17 CFR 190.10 17 CFR (4-1-92 Edition)
17 CFR 190.10 List of CFR Sections Affected
17 CFR 190.10 List of CFR Sections Affected
All changes in this volume of the Code of Federal Regulations which
were made by documents published in the Federal Register since January
1, 1986, are enumerated in the following list. Entries indicate the
nature of the changes effected. Page numbers refer to Federal Register
pages. The user should consult the entries for chapters and parts as
well as sections for revisions.
For the period before January 1, 1986, see the ''List of CFR Sections
Affected, 1949-1963, 1964-1972, and 1973-1985,'' published in seven
separate volumes.
17 CFR 190.10 1986
17 CFR
51 FR
Page
Chapter I
1 Authority citation revised; section authority citations removed
2691, 17473
Occupational categories list revised 26236
1.3 (z)(1) introductory text, (iii), and undesignated text revised
(effective date pending) 17473
Eff. 8-1-86 27529
1.10 (j)(3) revised 45760
1.35 (d), (e) and (g) revised; (i) added; eff. 10-1-86 and 1-1-87
2691
1.46 (d)(1) revised (effective date pending) 17473
Eff. 8-1-86 27529
1.59 Added; eff. 6-12-87 44869
1.61 (b)(2) and (c) revised (effective date pending) 17473
Eff. 8-1-86 27529
2 Authority citation revised 37177
2.2 (b) revised 37177
3 Registration expiration date deferred 34458
3.2 (d) revised 34460
3.11 Revised 34460
3.31 (d) added 34460
3.44 Added 45760
3.45 Added 45761
3.46 Added 45761
3.47 Added 45761
5 Authority citation revised 17473
5.2 Revised (effective date pending) 17473
Eff. 8-1-86 27529
5.4 Added (effective date pending) 17474
Eff. 8-1-86 27529
5 Appendix B amended 21150
12.13 (b)(4) revised 35507
15 Authority citation revised; section authority citations removed
4717
15.00 (l) added; eff. 8-1-86 4717
15.03 (a) revised 21344
16 Authority citation revised; section authority citations removed
4717
Authority citation revised 17474
Occupational categories list revised 26236
16.00 (b) revised; eff. 8-1-86 4717
16.01 (d) revised; eff. 8-1-86 4717
(a) (5), (6), and undesignated text revised; (a)(7) added 17474
16.02 (b) revised; eff. 8-1-86 4718
(a) introductory text, (1)(i) (A), (B), and (C), and (ii) (A) through
(D) revised; (a)(1)(i) (D) and (E) removed; (a)(1)(iv) added 17474
16.04 (b) revised; eff. 8-1-86 4718
16.05 Removed 17474
16.06 Revised; eff. 8-1-86 4718
16.07 Added; eff. 8-1-86 4718
17 Authority citation revised; section authority citations removed
4718
17.00 (a)(1) revised; (g) and (h) added; eff. 8-1-86 4718
17.01 (a) and (c) revised; eff. 8-1-86 4719
17.02 Revised; eff. 8-1-86 4719
17.03 Revised; eff. 8-1-86 4719
18 Authority citation revised; section authority citations removed
4720
18.04 (a) (5), (8), and (9), (b)(3) and (c)(6) revised; eff. 8-1-86
4720
21 Authority citation revised; section authority citations removed
4720
21.02 Heading and introductory text revised; eff. 8-1-86 4720
21.02a Heading, (a) introductory text, (b) (1), (3), and (4) (iv) and
(x) revised; eff. 8-1-86 4720
32 Order 12698
33.4 Introductory text republished; (a)(6)(i) revised (effective
date pending) 11906
(a)(5)(ii) and (b)(2) removed; (a)(5)(iii) and (6)(ii), (b)(4)
introductory text, (i), and (iii), (6), and (8) revised (effective date
pending) 17474
(a)(6)(i) revision eff. 6-3-86 21344
(a)(5)(ii) and (b)(2) removal and (a)(5)(iii) and (6)(ii), (b)(4)
introductory text, (i), and (iii), (6), and (8) revisions eff. 8-1-86
27529
33.5 (c) revised (effective date pending) 17475
Eff. 8-1-86 27529
33.7 (b)(2) introductory text and (i), (3), and (5), (c), and (d)
revised; (b)(2)(ii) removed; (b)(2) (iii) through (viii) redesignated
as (b)(2) (ii) through (vii) (effective date pending) 17475
Eff. 8-1-86 27529
145.0 Revised 26869
145.2 Revised 26869
145.3 Removed 26869
145.4 Revised 26869
145.5 Heading and introductory text revised 26870
145.6 Heading, (a), and (b)(2) revised 26870
145.7 Revised 26870
145.9 Revised 26871
145 Appendix A added 26874
146.9 (f) added 26874
148 Authority citation revised 18880
148.1 Revised 18880
148.2 Revised 18880
148.3 (a) and (b) revised 18880
148.4 (b)(1) and (2) amended; (b)(5) and (e) revised; (b)
introductory text republished 18880
148.5 (a) revised 18880
148.11 (a) and (b) introductory text revised 18881
148.26 (a) revised 18881
148.28 Revised 18881
149 Added 22889, 22896
149.170 (c) revised 22889
17 CFR 190.10 1987
17 CFR
52 FR
Page
Chapter I
1 Occupational list categories revised 2920
Occupational list categories republished 6139
Interpretation 27195, 34633
Authority citation revised 46072
1.3 (rr) and (ss) added 28994
(z)(2)(iii) revised; (z)(2)(iv) added 38922
1.10 (d) (1) and (2) and (g)(2) revised 28994
1.12 (f)(3) added 28248
(b)(2) revised 28995
1.16 (a)(4) revised 28995
1.17 (c)(2)(i) revised 28250
(a)(1)(i)(B), (b)(2), (c)(5)(iii), (e)(1), (h)(2)(vi)(C), (vii) (A)
and (B), (viii)(A), (3) (ii) and (v) revised 28995
1.19 Revised 28997
1.33 (a) and (b) introductory text revised 28997
1.41b (a)(3) removed; (a)(1) and (2) reviseded 779
1.42 (a) revised 18910
1.59 Heading revised; (c) added 48977
1 Appendix B amended 46072
Technical correction 47705
3.16 (a)(3) revised 41984
4.6 Added 41984
4.12 Revised 41984
4.14 (a)(8) added 41985
(a)(8)(i)(B) and (iii)(B) corrected 43827
4.21 (a)(17)(i) introductory text and (g) revised 41985
4.22 (c) amended 41986
4.31 (f) revised 41986
5 Appendix C added 1446
5 Appendix B amended 22635
9 Revised 25366
9.2 (k) corrected 27286
9.12 (b) corrected 27286
9.20 (b)(7) corrected 27286
9.24 (b) corrected 27286
11 Appendix A added 19501
15.00 (b)(1) (i) and (ii) revised 38922
15.02 Revised 38922
15.03 (a) revised 18910
(a) designation and (b) removed 38922
16 Occupational list categories revised 2920
Occupational list categories republished 6139
16.00 (a)(3) removed 18910
19 Authority citation revised 38922
19.00 (a) and (b) introductory text revised 38922
19.01 Heading and introductory text revised 38923
19.02 Introductory text revised 38923
19.03 -- 19.04 Removed 38923
19.10 (a) and (b) revised 38923
30 Revised 28998
Effective date deferred 48811
31 Appendixes A and B amended 22635
32.1 (a) revised 29003
32.11 (b) revised 29003
33.4 (a)(6) removed 779
33.5 (c) removed 779
33.11 Added 29508
140.93 (a)(1) revised; (a)(6) added 41986
140.735-4 (b) (1) and (2) revised 20592
(b)(1)(iii)(B) corrected 22415
145 Authority citation revised 19307
145.7 (e) through (i) redesignated as (f) through (j); new (e) added
19307
145 Appendix B revised; Appendix B authority citation removed 19308
150 Revised 38923
166 Authority citation revised 29003
166.1 (b) (1) and (2) revised 29003
166.2 (b) revised 29003
17 CFR 190.10 1988
17 CFR
53 FR
Page
Chapter I
1.10 (d)(1) (iii) through (vi) redesignated as (d)(1) (iv) through
(vii); (a)(1) and new (d)(1)(iii) and (k) added; new (d)(1)(v), (2)
(ii) and (iv) and (g) (1) and (2) revised 4611
(d) (1) and (2) correctly revised 7179
1.12 (a)(2) revised 4612
1.16 (d)(1) and (2)(iv), (f)(1)(iv) and (vii)(C) revised 4612
1.46 (d)(6) and (e) added 614
1.52 (a) revised 4612
1.59 Technical correction 615
1 Appendix B fee schedule; eff. 6-6-88 7179
3.2 (d) removed; (e) redesignated as (d); (a) and new (d) revised;
eff. 4-4-88 8431
3.10 (b) revised; (d) added; eff. 4-4-88 8431
3.12 (c)(1)(ii), (d) heading, (1) introductory text and (iii), (2)
and (3) revised; (d)(1)(vi), (4) and (5) added; eff. 4-4-88 8431
3.12a-(T) Removed; eff. 4-4-88 8431
3.13 (b) revised; (c) added; eff. 4-4-88 8431
3.14 (b) revised; (c) added; eff. 4-4-88 8432
3.15 (b) revised; (c) added; eff. 4-4-88 8432
3.16 (c)(1)(ii), (d) heading, (1) introductory text, and (iii), (2)
and (3) revised; (d)(1)(vi) and (4) added; eff. 4-4-88 8432
3.17 (b) revised; (c) added; eff. 4-4-88 8432
3.18 (c)(1)(ii), (d) heading, (1) introductory text and (iii), (2)
and (3) revised; (d)(1)(vi), (4) and (5) added; eff. 4-4-88 8432
3.22 (a) and (b) revised; eff. 4-4-88 8433
3.31 (a) and (c)(1) introductory text revised; eff. 4-4-88 8433
3.32 (a), (d), (e)(1), (g) and (h) revised; eff. 4-4-88 8433
3.33 (a)(3), (b) introductory text, (e) and (f) revised; eff.
4-4-88 8434
3.40 (d) added; eff. 4-4-88 8435
3.42 (a)(2) revised; (a)(3) added; eff. 4-4-88 8435
3.44 (a)(4)(i) and (c) revised; eff. 4-4-88 8435
3.46 (a)(3) revised; eff. 4-4-88 8435
5 Appendix B fee schedule; eff. 6-6-88 7179
Appendix D added 30672
12 Authority citation revised 17692
12.406 (d) added 17692
15.03 Revised 50923
Order 44856
30 Interim order 3338
Interim order extended 11491
Appendix B added 28832
Appendix B amended 28840, 28848, 30673
31 Appendix A fee schedule; eff. 6-6-88 7179
Appendix B amended 22139
140.735-8 (b) revised 27678
145.5 (d)(1)(i) (C) through (F) redesignated as (d)(1)(i) (E) through
(H); new (d)(1)(i) (C) and (D) added 4613
145.6 (b) (1) and (2) amended; eff. 4-4-88 8435
146.12 (a) and (b) amended 35198
147.3 (b)(4)(i)(A) (3) through (6) redesignated as (b)(4)(i)(A) (5)
through (8); new (b)(4)(i)(A) (3) and (4) added 4613
150.1 (d) added 41571
150.3 Revised 41571
17 CFR 190.10 1989
17 CFR
54 FR
Page
Chapter I
1 Authority citation revised 41077
1.3 (ff) revised 41077
1.35 (a-2) added 33881
1 Appendix B fee schedule 22426
3 Authority citation revised 19557
3.2 (c) revised 19558
3.3 (a) revised 19558
3.17 (a) and (c) revised 19558
3.18 (c) (3), (4), (d) (1), (3), (4), and (5) revised 19558
3.20 (d)(2) removed 19558
3.21 (a) introductory text republished; (a)(1) revised 19558
3.31 (c)(1) introductory text and (2) revised 19558
3.32 (b), (c), (d) (2), (3), (e), (f), and (h) revised 19559
3.33 (a) introductory text, (b) introductory text, (e), and (f)
introductory text revised 41078
(e) corrected 46503
3.40 Introductory text and (b) revised 19559
3.43 (b)(1) revised 19559
4 Interpretation 5597
Interpretation; comment time extended 15748
5 Appendix B fee schedule 22426
30 Appendix C added 809
Appendix C amended 21604,
21609, 21614, 21618
Appendix B amended 37644
Appendix B Table amended 50356, 50363
Appendix C amended; eff. 4-17-89 11182
31.1 Removed 41078
31.2 Removed 41078
31.4 (g) revised 41078
31.5 (a) introductory text and (b) revised; (c), (d), (e) and (g)
removed; new (c) added; (f) redesignated as (d) 41078
31.6 (a) (1), (4), (5) and (b)(1) revised; (a)(6) added 41079
31.7 (c) revised 41079
31.8 (a)(2)(ii), (b) and (e) revised; (a)(2)(iii) (A) and (B)
redesignated as (a)(2)(v) (A) and (B); (a)(2) (iii) and (iv) added
41079
31.9 (a) (2), (4) and (d) revised 41079
31.11 (a)(1) amended; (a)(2) (ii), (viii), (e), (h), (k)(1)
introductory text and (i), (ii) introductory text, (2) introductory
text, (i), and (ii) introductory text revised; (m) added 41080
(a)(1) and (e)(2) corrected 46503
31.12 (h) added 41081
(h) corrected 46503
31.13 (a) introductory text, (b)(2) and (c) revised; (f) (3) and (4)
redesignated as (f)(4) and (5); new (f)(3) added; (g)(2), (j), (k),
(l)(1) introductory text, (1)(vii), (2), (3), and (m) revised 41081
31.16 Revised 41082
31.21 Revised 41082
31.22 Revised 41082
31.24 Removed 41082
31.25 (b) revised 41082
31.26 Introductory text revised; (a) designation and (b) removed;
(a) (1) through (12) redesignated as (a) through (l) 41083
31.27 Added 41083
31.28 Added 41083
31.29 Added 41084
Corrected 46503
31 Appendix B fee schedule 22426
Appendix B removed 41084
34 Added 30692
140 Authority citation added; section authority citations removed
18099
140.2 (c) and (d) revised 18099
140.735-8 (b) revised 23208, 31814
142 Added 25234
145.5 (d)(1)(i)(H) revised 41084
145.6 (a) revised 18099
(b)(1) revised 19559
(a) corrected 19886
147.3 (b)(4)(i)(A)(8) revised 41084
180 Authority citation revised 1684
180.3 (b)(4) revised 1684
17 CFR 190.10 1990
17 CFR
55 FR
Page
Chapter I
1 Interpretative rule 17932
Fee schedule 19725
1.35 (a), (a-1)(2), (4), and (d) revised; (j) through (l) added 8137
(a), (a-1)(2) and (4), (d)(1) through (3), (5), (7) and (8), and
(j)(1) through (4), (7), (8), (k), and (l) eff. 5-7-90 8127
(d)(4) and (6) and (j)(5) and (6) eff. 6-5-90 8127
1.63 Added; eff. 4-5-90 7890
3 Interpretation 3205
3.3 Removed 32242
3.80 -- 3.91 (Subpart F) Removed 41067
Correctly removed 49029
4 Interpretation 3205
5 Appendix B fee schedule 4993
30 Order 14238
Technical correction 25925
Appendix B amended; eff. 4-4-90 7706
Appendix B amended 23909,
26429, 28373
Appendix C amended 10614, 23909
31 Appendix A fee schedule 4993
140.96 (b) and (c) redesignated as (c) and (d); new (b) added 35897
141 Added 5207
171 Added 41068
17 CFR 190.10 1991
17 CFR
56 FR
Page
Chapter I
1 Fee schedule 12444
1.39 (b) redesignated as (c) and revised; new (b) added; eff.
4-24-91 12344
1.41 (l)(1)(i), (ii) and (iii) revised; (l)(1)(iv) removed 42685
1.46 (d)(7) added 14314
4 Advisory 8109
4.21 (a)(4) introductory text, (ii)(F) and (5) introductory text
revised 28056
4.31 (a)(3) introductory text revised 28056
5 Fee schedule 12444
5.4 Removed 43697
15.00 Heading and (b)(2) revised 43697
15.01 Introductory text and (d) revised 14194
15.03 Revised 14194
16.04 Removed 14194
19 Heading revised 14194
19.00 (a)(2) and (b) introductory text revised 14194
19.02 Revised 14194
19.10 Introductory text revised 14194
30 Authority citation revised 3208
Appendix B amended 3208
6262, 8113, 51650, 66346
Appendix C amended 14019, 66345
31 Fee schedule 12444
33.4 (a)(5)(iii), (b)(1)(iv), (d)(1) and (g) revised; (b)(2) added
43697
150.1 (d) redesignated as (e) and revised; new (d) added 14315
17 CFR 190.10 1992
17 CFR
57 FR
Page
Chapter I
1 Fee schedule 1372
5 Fee schedule 1372
Appendix A revised 3523
30Appendix B amended 1375, 2676
Appendix B amended; eff. 5-1-92 10988
31 Fee schedule 1372
140.2 (b) revised 3722
145.6 (a) revised 3722
146.13 Added 4364
17
Commodity and Securities Exchanges
PARTS 1 to 199
Revised as of April 1, 1992
CONTAINING
A CODIFICATION OF DOCUMENTS
OF GENERAL APPLICABILITY
AND FUTURE EFFECT
AS OF APRIL 1, 1992
With Ancillaries
Published by
the Office of the Federal Register
National Archives and Records
Administration
as a Special Edition of
the Federal Register
Washington, DC 20402-9328
17 CFR 190.10 Table of Contents
Page
Explanation v
Title 17:
Chapter I -- Commodity Futures Trading Commission
Finding Aids:
Table of CFR Titles and Chapters
Alphabetical List of Agencies Appearing in the CFR
List of CFR Sections Affected
17 CFR 190.10 Explanation
The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. The Code is divided
into 50 titles which represent broad areas subject to Federal
regulation. Each title is divided into chapters which usually bear the
name of the issuing agency. Each chapter is further subdivided into
parts covering specific regulatory areas.
Each volume of the Code is revised at least once each calendar year
and issued on a quarterly basis approximately as follows:
Title 1 through Title 16 as of January 1
Title 17 through Title 27 as of April 1
Title 28 through Title 41 as of July 1
Title 42 through Title 50 as of October 1
The appropriate revision date is printed on the cover of each volume.
LEGAL STATUS
The contents of the Federal Register are required to be judicially
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie
evidence of the text of the original documents (44 U.S.C. 1510).
HOW TO USE THE CODE OF FEDERAL REGULATIONS
The Code of Federal Regulations is kept up to date by the individual
issues of the Federal Register. These two publications must be used
together to determine the latest version of any given rule.
To determine whether a Code volume has been amended since its
revision date (in this case, April 1, 1992), consult the ''List of CFR
Sections Affected (LSA),'' which is issued monthly, and the ''Cumulative
List of Parts Affected,'' which appears in the Reader Aids section of
the daily Federal Register. These two lists will identify the Federal
Register page number of the latest amendment of any given rule.
EFFECTIVE AND EXPIRATION DATES
Each volume of the Code contains amendments published in the Federal
Register since the last revision of that volume of the Code. Source
citations for the regulations are referred to by volume number and page
number of the Federal Register and date of publication. Publication
dates and effective dates are usually not the same and care must be
exercised by the user in determining the actual effective date. In
instances where the effective date is beyond the cut-off date for the
Code a note has been inserted to reflect the future effective date. In
those instances where a regulation published in the Federal Register
states a date certain for expiration, an appropriate note will be
inserted following the text.
OMB CONTROL NUMBERS
The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires Federal
agencies to display an OMB control number with their information
collection request. Many agencies have begun publishing numerous OMB
control numbers as amendments to existing regulations in the CFR. These
OMB numbers are placed as close as possible to the applicable
recordkeeping or reporting requirements.
OBSOLETE PROVISIONS
Provisions that become obsolete before the revision date stated on
the cover of each volume are not carried. Code users may find the text
of provisions in effect on a given date in the past by using the
appropriate numerical list of sections affected. For the period before
January 1, 1986, consult either the List of CFR Sections Affected,
1949-1963, 1964-1972, or 1973-1985, published in seven separate volumes.
For the period beginning January 1, 1986, a ''List of CFR Sections
Affected'' is published at the end of each CFR volume.
CFR INDEXES AND TABULAR GUIDES
A subject index to the Code of Federal Regulations is contained in a
separate volume, revised annually as of January 1, entitled CFR Index
and Finding Aids. This volume contains the Parallel Table of Statutory
Authorities and Agency Rules (Table I), and Acts Requiring Publication
in the Federal Register (Table II). A list of CFR titles, chapters, and
parts and an alphabetical list of agencies publishing in the CFR are
also included in this volume.
An index to the text of ''Title 3 -- The President'' is carried
within that volume.
The Federal Register Index is issued monthly in cumulative form.
This index is based on a consolidation of the ''Contents'' entries in
the daily Federal Register.
A List of CFR Sections Affected (LSA) is published monthly, keyed to
the revision dates of the 50 CFR titles.
REPUBLICATION OF MATERIAL
There are no restrictions on the republication of material appearing
in the Code of Federal Regulations.
INQUIRIES AND SALES
For a summary, legal interpretation, or other explanation of any
regulation in this volume, contact the issuing agency. Inquiries
concerning editing procedures and reference assistance with respect to
the Code of Federal Regulations may be addressed to the Director, Office
of the Federal Register, National Archives and Records Administration,
Washington, DC 20408 (telephone 202-523-3517). All mail order sales are
handled exclusively by the Superintendent of Documents, Attn: New
Orders, P.O. Box 371954, Pittsburgh, PA 15250-7954. Charge orders may
be telephoned to the Government Printing Office order desk at
202-783-3238.
Martha L. Girard,
Director,
Office of the Federal Register.
April 1, 1992.
17 CFR 190.10 THIS TITLE
Title 17 -- Commodity and Securities Exchanges is composed of three
volumes. The first volume containing parts 1 to 199, comprises Chapter
I -- Commodity Futures Trading Commission. The second volume contains
Chapter II -- Securities and Exchange Commission, parts 200 to 239. The
third volume, comprising part 240 to End, contains the remaining
regulations of the Securities and Exchange Commission, and Chapter IV --
Department of the Treasury. The contents of these volumes represent all
current regulations issued by the Commodity Futures Trading Commission,
the Securities and Exchange Commission, and the Department of the
Treasury as of April 1, 1992.
The OMB control numbers for the Securities and Exchange Commission
appear in 200.800 of chapter II. For the convenience of the user,
200.800 is reprinted in the Finding Aids section of the volume
containing part 240 to End.
For this volume, Ann Worley was Chief Editor. The Code of Federal
Regulations publication program is under the direction of Richard L.
Claypoole, assisted by Alomha S. Morris.
17 CFR 0.0 17 CFR Ch. II (4-1-92 Edition)
17 CFR 0.0 Securities and Exchange Commission
17 CFR 0.0 Title 17 -- Commodity and Securities Exchanges
17 CFR 0.0 (This book contains parts 200 to 239)
Part
chapter ii -- Securities and Exchange Commission 200
17 CFR 0.0 17 CFR Ch. II (4-1-92 Edition)
17 CFR 0.0 Securities and Exchange Commission
17 CFR 0.0 CHAPTER II -- SECURITIES AND EXCHANGE
17 CFR 0.0 COMMISSION
Part
Page
200 Organization; conduct and ethics; and information and requests
201 Rules of practice
202 Informal and other procedures
203 Rules relating to investigations
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, and Energy
Policy and Conservation Act of 1975
211 Interpretations relating to financial reporting matters
229 Standard instructions for filing forms under Securities Act of
1933, Securities Exchange Act of 1934 and Energy Policy and Conservation
Act of 1975 -- Regulation S-K
230 General rules and regulations, Securities Act of 1933
231 Interpretative releases relating to the Securities Act of 1933
and general rules and regulations thereunder
239 Forms prescribed under the Securities Act of 1933
17 CFR 0.0
17 CFR 0.0 17 CFR Ch. II (4-1-92 Edition)
17 CFR 0.0 Securities and Exchange Commission
17 CFR 0.0 Pt. 200
17 CFR 0.0 PART 200 -- ORGANIZATION; CONDUCT AND ETHICS; AND INFORMATION AND REQUESTS
17 CFR 0.0 Subpart A -- Organization and Program Management
Sec.
200.1 General statement and statutory authority.
200.2 Statutory functions.
200.10 The Commission.
200.11 Headquarters Office -- Regional Office relationship.
200.12 Functional responsibilities.
200.13 Executive Director.
200.13a The Secretary of the Commission.
200.13b Director of the Office of Public Affairs.
200.14 Office of Administrative Law Judges.
200.15 (Reserved)
200.16 Executive Assistant to the Chairman.
200.16a Director of Internal Audit.
200.17 Chief Management Analyst.
200.18 Director of Division of Corporation Finance.
200.19a Director of the Division of Market Regulation.
200.19b Director of the Division of Enforcement.
200.20b Director of Division of Investment Management.
200.20c Office of Applications and Reports Services.
200.21 The General Counsel.
200.21a Ethics Counsel.
200.22 The Chief Accountant.
200.23a Office of the Chief Economist.
200.23b Directorate of Economic and Policy Analysis.
200.24 Office of the Comptroller.
200.24a Office of Consumer Affairs and Information Services.
200.25 Office of Personnel.
200.26 Office of Administrative Services.
200.26a Office of Information Systems Management.
200.27 The Regional Administrators.
200.28 Issuance of instructions.
200.29 Rules.
200.30-1 Delegation of authority to Director of Division of
Corporation Finance.
200.30-3 Delegation of authority to Director of Division of Market
Regulation.
200.30-4 Delegation of authority to Director of Division of
Enforcement.
200.30-5 Delegation of authority to Director of Division of
Investment Management.
200.30-6 Delegation of authority to Regional Administrators.
200.30-7 Delegation of authority to Secretary of the Commission.
200.30-8 (Reserved)
200.30-9 Delegation of authority to hearing officers.
200.30-10 Delegation of authority to Chief Administrative Law Judge.
200.30-11 Delegation of authority to Director, Office of Applications
and Reports Services.
200.30-12 Delegation of authority to Director, Office of Consumer
Affairs and Information Services.
200.30-13 Delegation of authority to Comptroller.
200.30-14 Delegation of authority to the General Counsel.
200.30-15 Delegation of authority to Executive Director.
200.30-16 Delegation of authority to Executive Assistant to the
Chairman.
17 CFR 0.0 Subpart B -- Disposition of Commission Business
200.40 Joint disposition of business by Commission meeting.
200.41 Disposition of business by seriatim Commission consideration.
200.42 Disposition of business by exercise of authority delegated to
individual Commissioner.
17 CFR 0.0 Subpart C -- Canons of Ethics
200.50 Authority.
200.51 Policy.
200.52 Copies of the Canons.
200.53 Preamble.
200.54 Constitutional obligations.
200.55 Statutory obligations.
200.56 Personal conduct.
200.57 Relationships with other members.
200.58 Maintenance of independence.
200.59 Relationship with persons subject to regulation.
200.60 Qualification to participate in particular matters.
200.61 Impressions of influence.
200.62 Ex parte communications.
200.63 Commission opinions.
200.64 Judicial review.
200.65 Legislative proposals.
200.66 Investigations.
200.67 Power to adopt rules.
200.68 Promptness.
200.69 Conduct toward parties and their counsel.
200.70 Business promotions.
200.71 Fiduciary relationships.
200.72 Supervision of internal organization.
17 CFR 0.0 Subpart D -- Information and Requests
200.80 Commission records and information.
200.80a Appendix A -- Documentary materials available to the public.
200.80b Appendix B -- SEC releases.
200.80c Appendix C -- Rules and miscellaneous publications available
from the Government Printing Office.
200.80d Appendix D -- Other publications available from the
Commission.
200.80e Appendix E -- Schedule of fees for records services.
200.80f Appendix F -- Records control schedule.
200.81 Publication of interpretative, no-action letters and other
written communications.
200.82 Public availability of materials filed pursuant to
240.14a-8(d) and related materials.
200.83 Confidential treatment procedures under the Freedom of
Information Act.
17 CFR 0.0 Subpart E -- Regulation Regarding Equal Employment
Opportunity
200.90 General statement.
200.91 Definitions.
200.92 Designation of Employment Policy Officer.
200.93 Duties of the Employment Policy Officer.
200.94 Who may file.
200.95 Where to file.
200.96 Processing of complaints; time limitation.
200.97 Investigation.
200.98 Negotiation and settlement.
200.99 Opportunity for hearing and review.
200.100 Right to counsel.
200.101 Final decision.
200.102 Review of cases by Executive Vice Chairman.
200.103 Report of disposition of complaints.
200.104 Dissemination of information.
17 CFR 0.0 Subpart F -- Code of Behavior Governing Ex Parte
Communications Between Persons Outside the Commission and Decisional
Employees
200.110 Purpose.
200.111 Prohibitions; application; definitions.
200.112 Duties of recipient; notice to participants.
200.113 Opportunity to respond; interception.
200.114 Sanctions.
17 CFR 0.0 Subpart G -- Plan of Organization and Opera- tion Effective
During Emergency Conditions
200.200 Purpose.
200.201 Emergency conditions, effective date, and duration.
200.202 Offices, and information and submittals.
200.203 Organization, and delegations of authority.
200.204 Personnel, fiscal, and service functions.
200.205 Effect upon existing Commission organization, delegations,
and rules.
17 CFR 0.0 Subpart H -- Regulations Pertaining to the Privacy of
Individuals and Systems of Records Maintained by the Commission
200.301 Purpose and scope.
200.302 Definitions.
200.303 Times, places and requirements for requests pertaining to
individual records in a record system and for the identification of
individuals making requests for access to the records pertaining to
them.
200.304 Disclosure of requested records.
200.305 Special procedure: Medical records.
200.306 Requests for amendment or correction of records.
200.307 Review of requests for amendment or correction.
200.308 Appeal of initial adverse agency determination as to access
or as to amendment or correction.
200.309 General provisions.
200.310 Fees.
200.311 Penalties.
200.312 Specific exemptions.
200.313 Inspector General exemptions.
17 CFR 0.0 Subpart I -- Regulations Pertaining to Public Observation
of Commission Meetings
200.400 Open meetings.
200.401 Definitions.
200.402 Closed meetings.
200.403 Notice of Commission meetings.
200.404 General procedure for determination to close meeting.
200.405 Special procedure for determination to close meeting.
200.406 Certification by the General Counsel.
200.407 Transcripts, minutes, and other documents concerning closed
Commission meetings.
200.408 Public access to transcripts and minutes of closed Commission
meetings; record retention.
200.409 Administrative appeals.
200.410 Miscellaneous.
17 CFR 0.0 Subpart J -- Classification and Declassification of
National Security Information and Material
200.500 Purpose.
200.501 Applicability.
200.502 Definition.
200.503 Senior agency official.
200.504 Oversight Committee.
200.505 Original classification.
200.506 Derivative classification.
200.507 Declassification dates on derivative documents.
200.508 Requests for mandatory review for declassification.
200.509 Challenge to classification by Commission employees.
200.510 Access by historical researchers.
200.511 Access by former Presidential appointees.
17 CFR 0.0 Subpart K -- Regulations Pertaining to the Protection of
the Environment
200.550 Purpose.
200.551 Applicability.
200.552 NEPA planning.
200.553 Draft, final and supplemental impact statements.
200.554 Public availability of information.
17 CFR 0.0 Subpart L -- Enforcement of Nondiscrimination on the Basis
of Handicap in Programs or Activities Conducted by the Securities and
Exchange Commission
200.601 Purpose.
200.602 Application.
200.603 Definitions.
200.604-200.609 (Reserved)
200.610 Self-evaluation.
200.611 Notice.
200.612-200.629 (Reserved)
200.630 General prohibitions against discrimination.
200.631-200.639 (Reserved)
200.640 Employment.
200.641-200.648 (Reserved)
200.649 Program accessibility: Discrimination prohibited.
200.650 Program accessibility: Existing facilities.
200.651 Program accessibility: New construction and alterations.
200.652-200.659 (Reserved)
200.660 Communications.
200.661-200.669 (Reserved)
200.670 Compliance procedures.
200.671-200.699 (Reserved)
17 CFR 0.0 Subpart M -- Regulation Concerning Conduct of Members and
Employees and Former Members and Employees of the Commission
200.735-1 Purpose.
200.735-2 Policy.
200.735-3 General provisions.
200.735-4 Outside employment and activities.
200.735-5 Securities transactions.
200.735-6 Action in case of personal interest.
200.735-7 Negotiation for employment.
200.735-8 Practice by former members and employees of the Commission.
200.735-9 Indebtedness.
200.735-10 Miscellaneous statutory provisions.
200.735-11 Statement of employment and financial interests.
200.735-12 Special Government employees.
200.735-13 Disciplinary and other remedial action.
200.735-14 Employees on leave of absence.
200.735-15 Interpretive and advisory service.
200.735-16 Delegation.
200.735-17 Administration of the conduct regulation.
200.735-18 Requests for waivers.
17 CFR 0.0 Subpart N -- Commission Information Collection Requirements
Under the Paperwork Reduction Act: OMB Control Numbers and Expiration
Dates
200.800 OMB control numbers assigned pursuant to the Paperwork
Reduction Act.
17 CFR 0.0 Subpart A -- Organization and Program Management
Authority: 15 U.S.C. 77s, 78d-1, 78d-2, 78w, 79t, 77sss, 80a-37,
80b-11, unless otherwise noted.
Section 200.30-1 is also issued under 15 U.S.C. 77f, 77g, 77h, 77j,
78c(b) 78l, 78m, 78n, 78o(d).
Section 200.30-3 is also issued under 15 U.S.C. 78b, 78d, 78f, 78k-1,
78s, 78q, 78eee, 79d.
Section 200.30-11 is also issued under 15 U.S.C. 78d-1, 78d-2.
Section 200.30-11 is also issued under 15 U.S.C. 78d-1, 78d-2
Source: 27 FR 12712, Dec. 22, 1962, unless otherwise noted.
17 CFR 200.1 General statement and statutory authority.
The Securities and Exchange Commission was created in 1934 under the
Securities Exchange Act. That Act transferred to the Commission the
administration of the Securities Act of 1933, formerly administered by
the Federal Trade Commission. Subsequent laws assigned to the
Securities and Exchange Commission for administration are: Public
Utility Holding Company Act of 1935, Trust Indenture Act of 1939,
Investment Company Act of 1940, and Investment Advisers Act of 1940. In
addition, under the Bankruptcy Code, the Commission is a statutory party
in cases arising under chapters 9 and 11. Considered together, the laws
administered by the Commission provided for the following.
(a) Public disclosure of pertinent facts concerning public offerings
of securities and securities listed on national securities exchanges and
certain securities trade in the over-the-counter markets.
(b) Enforcement of disclosure requirements in the soliciting of
proxies for meetings of security holders by companies whose securities
are registered pursuant to section 12 of the Securities Exchange Act of
1934, public utility holding companies, and their subsidiaries and
investment companies.
(c) Regulation of the trading in securities on national securities
exchanges and in the over-the-counter markets.
(d) Investigation of securities frauds, manipulations, and other
violations, and the imposition and enforcement of legal sanctions
therefor.
(e) Registration, and the regulation of certain activities, of
brokers, dealers and investment advisers.
(f) Supervision of the activities of mutual funds and other
investment companies.
(g) Administration of statutory standards governing protective and
other provisions of trust indentures under which debt securities are
sold to the public.
(h) Regulation of the purchase and sale of securities, utility
properties, and other assets by registered public utility holding
companies and their electric and gas utility subsidiaries; enforcement
of statutory standards for public utility holding company system
simplification and integration; and approval of their reorganization,
mergers and consolidations.
(i) Protection of the interests of public investors involved in
bankruptcy reorganization cases and in bankruptcy cases involving the
adjustment of debts of a municipality.
(j) Administrative sanctions, injunctive remedies and criminal
prosecution. There are also private rights of action for investors
injured by violations of the Acts.
(15 U.S.C. 78d-1, 78d-2; 11 U.S.C. 901, 1109(a))
(27 FR 12712, Dec. 22, 1962, as amended at 43 FR 13375, Mar. 30,
1978; 49 FR 12684, Mar. 30, 1984)
17 CFR 200.2 Statutory functions.
Following are brief descriptions of the Commission's functions under
each of the statutes it administers:
(a) Securities Act of 1933. (1) Issuers of securities making public
offerings for sale in interstate commerce or through the mails, directly
or by others on their behalf, are required to file with the Commission
registration statements containing financial and other pertinent data
about the issuer and the offering. A similar requirement is provided
with respect to such public offerings on behalf of a controlling person
of the issuer. Unless a registration statement is in effect with
respect to such securities, it is unlawful to sell the securities in
interstate commerce or through the mails. (There are certain limited
exemptions, such as government securities, non-public offerings, and
intrastate offerings.) The effectiveness of a registration statement may
be refused or suspended after a hearing if the statement contains
material misstatements or omissions, thus barring sale of the securities
until it is appropriately amended. Registration is not a finding by the
Commission as to the accuracy of the facts disclosed; and it is
unlawful so to represent. Moreover, registration of securities does not
imply approval of the issue by the Commission or insure investors
against loss in their purchase, but serves rather to provide information
upon which investors may make an informed and realistic evaluation of
the worth of the securities.
(2) Persons responsible for filing false information with the
Commission subject themselves to the risk of fine or imprisonment or
both; and the issuing company, its directors, officers, and the
underwriters and dealers and others may be liable in damages to
purchasers of registered securities if the disclosures in the
registration statements and prospectus are materially defective. Also
the statute contains antifraud provisions which apply generally to the
sale of securities, whether or not registered.
(b) Securities Exchange Act of 1934. This Act requires the filing of
registration applications and annual and other reports with national
securities exchanges and the Commission, by companies whose securities
are listed upon the exchanges. Annual and other reports must be filed
also by certain companies whose securities are traded in the
over-the-counter markets. These must contain financial and other data
prescribed by the Commission for the information of investors. Material
misstatements or omissions are grounds for suspension or withdrawal of
the security from exchange trading. This Act makes unlawful
solicitations of proxies, authorizations or consents from holders of
listed securities in contravention of rules prescribed by the
Commission. These rules provide for disclosures to securities holders
of information relevant to the matters which are the subject of
solicitations. The Act also requires disclosure of the holdings and the
transactions by officers, directors and large (10%) holders of equity
securities of companies having such securities listed on a national
securities exchange. The Act also provides for registration with the
Commission and for regulation by the Commission of national securities
exchanges, brokers and dealers engaged in an over-the-counter securities
business, and national associations of such dealers. It gives the
Commission rule making power with respect to short sales, stabilizing,
floor trading, activities of specialists and odd-lot dealers, and such
matters as excessive trading by the exchange members. The Act empowers
the Board of Governors of the Federal Reserve System to prescribe
minimum margin requirements with respect to listed securities.
(c) Public Utility Holding Company Act of 1935. This Act provides
for regulation by the Commission of the purchase and sale of securities,
properties, and other assets by companies comprised within electric and
gas utility holding company systems, their intrasystem transactions and
service and management arrangements. It further provides for limitation
of system operations to physically integrated and coordinated
properties, and simplification of complex corporate and capital
structures and elimination of unfair distribution of voting power. The
issuance and sale of securities by holding companies and their
subsidiaries, unless exempt (subject to conditions and terms which the
Commission is empowered to impose) as an issue expressly authorized by
the state commission in the state in which the issuer is incorporated,
must be found by the Commission to meet statutory standards, namely:
That the new security is reasonably adapted to the security structure
and earning power of the issuer; that the proposed financing is
necessary and appropriate to the economical and efficient operation of
the company's business; that the consideration received, and fees,
commissions, and other remuneration paid are fair; and that the terms
and conditions of the sale are not detrimental to investors, consumers,
or the public. The purchase and sale of utility properties and other
assets may not be made in contravention of rules, regulations, or orders
of the Commission regarding the consideration to be received,
maintenance of competitive conditions, fees and commissions, accounts,
disclosure of interest, and similar matters. In passing upon proposals
for reorganization, merger, or consolidation, the Commission must be
satisfied that the objectives of the act generally are complied with and
that the terms of the proposals are fair and equitable to all classes of
security holders affected.
(d) Trust Indenture Act of 1939. This Act is designed to safeguard
the interests of purchasers of publicly offered debt securities issued
under trust indentures through provisions requiring in such indentures
the elimination of certain types of exculpatory clauses and the
inclusion of certain protective provisions. The act also requires that
the indenture trustee, who is a representative of the debt holders,
shall be independent by proscribing certain relationships which might
conflict with the proper exercise of his duties.
(e) Investment Company Act of 1940. This Act provides for the
registration with the Commission of investment companies and subjects
their activities to regulation in accordance with standards prescribed
in the interests of protecting investors. Various transactions of
investment companies, including transactions with affiliated interests,
are prohibited unless exempted by the Commission. The Commission is
authorized to prepare reports to security holders on the fairness of
plans of reorganization, merger or consolidation; it may institute
court action to enjoin the consummation of plans considered grossly
unfair to security holders, or to enjoin acts and practices of
management involving gross misconduct or gross abuse of trust and to
disqualify from office officials responsible therefor.
(f) Investment Advisers Act of 1940. Persons who, for compensation,
engage in the business of advising others with respect to their security
transactions must register with the Commission. Their activities in the
conduct of such business are subject to standards of the act which make
unlawful those practices which constitute fraud or deceit and which
require, among other things, disclosure of any interests they may have
in transactions executed for clients. The Act grants to the Commission
rule-making power with respect to fraudulent and other activities of
investment advisers.
(g) Chapters 9 and 11 of the Bankruptcy Code. Chapters 9 and 11 of
the Bankruptcy Code provides for Commission participation as a statutory
party in reorganization cases in cases involving a judgment of debts of
a municipality administered in the Federal courts. Under 1109(a) of the
Bankruptcy Code, the Commission ''may raise and may appear and be heard
on any issue in the case . . .''.
(11 U.S.C. 901, 1109(a))
(27 FR 12712, Dec. 22, 1962, as amended at 49 FR 12684, Mar. 30,
1984)
17 CFR 200.2 General Organization
17 CFR 200.10 The Commission.
The Commission is composed of five members, not more than three of
whom may be members of the same political party. The members are
appointed by the President, with the advice and consent of the Senate,
for 5-year terms, one term ending each year. The Chairman is designated
by the President pursuant to the provisions of section 3 of
Reorganization Plan No. 10 of 1950 (3 CFR, 1949-1953 Comp., p. 1006).
The Commission is assisted by a staff, which includes lawyers,
accountants, engineers, financial security analysts, investigators and
examiners, as well as administrative and clerical employees.
17 CFR 200.11 Headquarters Office -- Regional Office relationship.
(a)(1) Division and Office Heads in the Headquarters Office (450
Fifth Street, NW., Washington, DC 20549) have Commission-wide
responsibility to the Commission for the overall development, policy and
technical guidance, and policy direction of the operating programs under
their jurisdiction.
(2) Each Regional Administrator is responsible for the direction and
supervision of his work force and for the execution of all programs in
his region as shown in paragraph (b) of this section, in accordance with
established policy.
(b) Regional Administrators of the Commission.
Region 1. New York, New Jersey -- Regional Administrator, 26 Federal
Plaza, New York, NY 10007.
Region 2. Massachusetts, Connecticut, Rhode Island, Vermont, New
Hampshire, Maine -- Regional Administrator, 150 Causeway Street, Boston,
MA 02114.
Region 3. Tennessee, Virgin Islands, Puerto Rico, North Carolina,
South Carolina, Georgia, Alabama, Mississippi, Florida, and the part of
Louisiana lying east of the Atchafalaya River -- Regional Administrator,
Suite 788, 1375 Peachtree Street, NE., Atlanta, GA 30309.
Region 4. Illinois, Indiana, Iowa, Kansas City (Kans.), Kentucky,
Michigan, Minnesota, Missouri, Ohio, Wisconsin -- Regional
Administrator, Everett McKinley Dirksen Bldg., 219 South Dearborn
Street, Room 1204, Chicago, IL 60604.
Region 5. Oklahoma, Arkansas, Texas, that part of Louisiana lying
west of the Atchafalaya River, and Kansas -- Regional Administrator, 8th
Floor, 411 West 7th Street, Fort Worth, TX 76102.
Region 6. Wyoming, Colorado, New Mexico, Nebraska, North Dakota,
South Dakota, Utah -- Regional Administrator, Suite 700, 410 Seventeenth
Street, Denver, CO 80202.
Region 7. California, Nevada, Arizona, Hawaii, Guam -- Regional
Administrator, 5757 Wilshire Boulevard, Suite 500 East, Los Angeles, CA
90036-3648.
Region 8. Washington, Oregon, Idaho, Montana, Alaska -- Regional
Administrator, 3040 Federal Building, 915 Second Avenue, Seattle, WA
98174.
Region 9. Pennsylvania, Maryland, Virginia, West Virginia, Delaware,
District of Columbia -- Regional Administrator, Room 2204, William J.
Green, Jr. Federal Building, 600 Arch Street, Philadelphia, PA 19106.
(27 FR 12712, Dec. 22, 1962, as amended at 28 FR 6970, July 9, 1963;
41 FR 44696, Oct. 12, 1976; 47 FR 26818, June 22, 1982; 49 FR 12684,
Mar. 30, 1984; 49 FR 13679, Apr. 6, 1984; 52 FR 2677, Jan. 26, 1987)
17 CFR 200.12 Functional responsibilities.
This section sets forth the administrative and substantive
responsibilities of the Division Directors, Office Heads, Regional
Administrators, and certain other Commission officers. All Commission
officers and other staff members, except administrative law judges,
shall perform, in addition to the duties herein set forth, such
additional duties as the chairman of the Commission may assign from time
to time. These officers also serve as liaison with Government and other
agencies concerning matters within their respective functional
responsibilities.
(15 U.S.C. 77u, 78d, 78d-1)
(37 FR 23826, Nov. 9, 1972)
17 CFR 200.13 Executive Director.
(a) The Executive Director is vested with broad discretionary powers
and executive authority to act within the general framework of basic
policies established by the Chairman or the Commission to achieve
maximum efficiency and economy in the Commission's total operations.
This entails the development and execution of the overall management
policies of the Commission for all its operating divisions and staff
offices. The Executive Director also provides executive direction to,
and exercises administrative control over, the Office of Equal
Employment Opportunity, Office of Consumer Affairs and Information
Services, Office of the Comptroller, Office of Information Systems
Management, Office of Personnel, Office of Public Affairs, Office of
Administrative Services, and the Office of Applications and Reports
Services. In addition, the Executive Director is delegated the full
range of program administration functions for the purposes of
implementing the following statutes, regulations, and Executive orders,
as well as others designated by the Chairman.
(1) Pub. L. 96-511 -- The Paperwork Reduction Program.
(2) 16 U.S.C. 644 -- The Small and Disadvantaged Business Utilization
Program.
(3) Government Printing and Binding Regulations, U.S. Congress Joint
Committee on Printing (1977).
(4) Executive Order 11807 and 29 CFR 1960 -- The Occupational Safety
and Health Program.
(5) Section 2 of Pub. L. 97-255 -- The Federal Managers Financial
Integrity Act of 1982.
(b) These functions include, but are not limited to, the appointment
of program officials; the review and approval of program policies,
procedures and regulations; the authorization and transmittal of
required reports; and the assurance of appropriate resource
requirements to implement the programs.
(c) The Executive Director is also delegated authority to designate
certifying officers for agency payments, to prescribe procurement
regulations, to enter into contracts, to designate contracting officers,
and to make procurement determinations.
(15 U.S.C. 78d-1, 78d-2)
(43 FR 13375, Mar. 30, 1978, as amended at 49 FR 12684, Mar. 30,
1984; 50 FR 12239, Mar. 28, 1985)
17 CFR 200.13a The Secretary of the Commission.
(a) The Secretary of the Commission is responsible for the
preparation of the daily and weekly agendas of Commission business; the
orderly and expeditious flow of business at formal Commission meetings;
the maintenance of the Official Minute record of all actions of the
Commission; and the service of all instruments of formal Commission
action. He or she is custodian of the official seal of the Commission,
and also has the responsibility for authenticating documents.
(b) The Secretary has been delegated responsibilities relating to the
Commission's rules of practice, administrative proceedings under the
Commission's statutes, and other responsibilities.
(c) In addition, he or she administers the Commission's Library.
(50 FR 12239, Mar. 28, 1985)
17 CFR 200.13b Director of the Office of Public Affairs.
The Director of the Office of Public Affairs is the chief public
information officer for the Commission, and oversees activities that
communicate the Commission's actions to those interested in or affected
by them. His or her responsibilities include liaison with the news
media, dissemination of information to the news media and to the general
public, coordination and production of the Annual Report to Congress,
supervision of internal and some external publications and of
audio-visual presentations. Responsibilities of the Director, and of
his or her staff, include special projects that may be deemed
appropriate to communicate information on Commission actions.
(50 FR 12239, Mar. 28, 1985)
17 CFR 200.14 Office of Administrative Law Judges.
(a) Hearings for the purpose of developing the evidentiary record in
the Commission's administrative proceedings are conducted before its
administrative law judges. They rule on the admissibility of evidence
and on legal and other issues which arise during the course of such
proceedings. Unless waived by the parties, an initial decision is
prepared by the administrative law judge in each case containing his
conclusions as to the factual and legal issues presented and an
appropriate order.
(b) The Chief Administrative Law Judge performs the duties of an
administrative law judge and in addition those duties delegated to him
by the Commission. He is responsible for the orderly functioning of the
Office of Administrative Law Judges apart from the conduct of
administrative proceedings and acts as liaison between that Office and
the Commission.
(15 U.S.C. 77u, 78d, 78d-1)
(37 FR 23826, Nov. 9, 1972)
200.15 (Reserved)
17 CFR 200.16 Executive Assistant to the Chairman.
The Executive Assistant to the Chairman assists the Chairman in
consideration of legal, financial, and economic problems encountered in
the administration of the Commission's statutes. He or she arranges for
and conducts conferences with officials of the Commission, members of
the staff, and/or representatives of the public on matters arising with
regard to general programs or specific matters. Acting for the
Chairman, he or she furnishes the initiative, executive direction, and
authority for staff studies and reports bearing on the Commission's
administration of the laws and its relations with the public, industry,
and the Congress. The Executive Assistant is also responsible for
assisting members of the Commission in the preparation of the opinions
of the Commission, and to the Commission for the preparation of opinions
and decisions on motions and certifications of questions and rulings by
administrative law judges in the course of administrative proceedings
under Rule 2(e) of the Commission's Rules of Practice ( 201.2(e) of this
chapter), and in other cases in which the Chairman or the General
Counsel has determined that separation of functions requirements or
other circumstances would make inappropriate the exercise of such
functions by the General Counsel. In cases where, pursuant to a waiver
by the parties of separation of function requirements, another Division
or Office of the Commission's staff undertakes to prepare an opinion or
decision, such Division or Office rather than the Executive Assistant
will prepare such opinion or decision, although the Executive Assistant
may assist in such preparation. The Executive Assistant is further
responsible for the exercise of such review functions with respect to
adjudicatory matters as are delegated to him or her by the Commission
pursuant to 101 Stat. 1254 (15 U.S.C. 78d-1, 78d-2) or as may be
otherwise delegated or assigned to him or her.
(54 FR 18100, Apr. 27, 1989)
17 CFR 200.16a Director of Internal Audit.
(a) The Director of Internal Audit provides to the Chairman
independent assessments of Commission operations. Organizationally a
part of the Chairman's Office, the Director of Internal Audit audits
Commission organizations, programs, activities and functions. The
audits seek to determine whether:
(1) The program goals and results identified in enabling legislation
are achieved.
(2) Resources are managed and used in an economical and efficient
manner.
(3) Financial operations are properly conducted.
(4) Financial reports are presented fairly.
(5) Applicable laws and regulations are complied with.
(b) The Director develops the audit universe and audit targets for
review by the Chairman and tracks implementation of audit
recommendations.
(c) The Director administers the Internal Control Program and
provides technical assistance on internal controls to other Commission
offices and divisions.
(d) With respect to government audit and internal control policies,
the Director serves as liaison to other agencies, including the General
Accounting Office, the Office of Management and Budget and the
President's Council on Efficiency and Integrity.
(51 FR 4305, Feb. 4, 1986)
17 CFR 200.17 Chief Management Analyst.
The Chief Management Analyst is responsible to the Executive Director
for the analysis, evaluation, development, promotion of, and advice on,
improvement in management policies, practices, methods, procedures and
organizational structures, including: distribution and assignment of
functions and responsibilities; work methods and procedures;
management control systems and similar aspects of management for the
purpose of improving the efficiency and effectiveness of the Commission.
(15 U.S.C. 78d-1, 78d-2)
(43 FR 13375, Mar. 30, 1978)
17 CFR 200.18 Director of Division of Corporation Finance.
The Director of the Division of Corporation Finance is responsible to
the Commission for the administration of all matters (except those
pertaining to investment companies registered under the Investment
Company Act of 1940) relating to establishing and requiring adherence to
standards of business and financial disclosure with respect to
securities being offered for public sale pursuant to the registration
requirements of the Securities Act of 1933 (15 U.S.C. 77a et seq.) or
the exemptions therefrom; establishing and requiring adherence to
standards of reporting and disclosure with respect to securities traded
on national securities exchanges or required to be registered pursuant
to section 12 (g) of the Securities Exchange Act of 1934 (15 U.S.C.
78l(g)) and with respect to securities whose issuers are required to
file reports pursuant to section 15(d) of that Act (15 U.S.C. 78c(d));
establishing and requiring adherence to disclosure and procedural
standards in the solicitation of proxies for the election of directors
and other corporate actions; establishing and requiring adherence to
standards of disclosure with respect to the filing of statements
respecting beneficial ownership and transaction statements pursuant to
sections 13 (d), (e), and (g) (15 U.S.C. 78m(d), 78m(e), and 78m(g)) of
the Securities Exchange Act of 1934; administering the disclosure and
substantive provisions of the Williams Act relating to tender offers;
and ensuring adherence to enforcement of the standards set forth in the
Trust Indenture Act of 1939 (15 U.S.C. 77aaa et seq.) regarding
indenture covering debt securities. Those duties shall include, with
the exception of enforcement and related activities under the
jurisdiction of the Division of Enforcement, the responsibility to the
Commission for the administration of the disclosure requirements and
other provisions of the Securities Act of 1933, the Securities Exchange
Act of 1934, and the Trust Indenture Act of 1939, as listed below:
(a) All matters under the Securities Act of 1933 (15 U.S.C. 77a, et
seq.) including the examination and processing of material filed
pursuant to the requirements of that Act (except such material filed by
investment companies registered under the Investment Company Act of
1940), the interpretation of the provisions of the Securities Act of
1933, and the proposing to the Commission of rules under that Act.
(b) All matters, except those pertaining to investment companies
registered under the Investment Company Act of 1940, arising under the
Securities Exchange Act of 1934 (15 U.S.C. 78a, et seq.) in connection
with:
(1) The registration of securities pursuant to section 12 of the Act
(15 U.S.C. 78l), including the exemptive provisions of section 12(h) (15
U.S.C. 78l(h)).
(2) The examination and processing of periodic reports filed pursuant
to sections 13 and 15(d) of the Act (15 U.S.C. 78m, 78o(d)).
(3) The examination and processing of proxy soliciting material filed
pursuant to section 14(a) and information material filed pursuant to
section 14(c) of the Act (15 U.S.C. 78n(a), 78n(c)).
(4) The examination and processing of statements respecting
beneficial ownership transaction statements and tender offer statements
filed pursuant to sections 13 (d), (e), and (g) and 14 (d), (e), (f),
and (g) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(d),
78m(e), 78m(g), and 78n(d)), and the administration of the other
protective standards of these provisions.
(5) The interpretation of the foregoing provisions of the Act, as
well as Section 16(a) thereof (15 U.S.C. 78p(a)), and proposing of rules
under those portions of the Act to the Commission.
(c) All matters, except those pertaining to investment companies
registered under the Investment Company Act of 1940, arising under the
Trust Indenture Act of 1939 (15 U.S.C. 77aaa, et seq.).
(41 FR 29374, July 16, 1976, as amended at 50 FR 12239, Mar. 28,
1985)
17 CFR 200.19a Director of the Division of Market Regulation.
The Director of the Division of Market Regulation is responsible to
the Commission for the administration of all matters relating to the
regulation of exchanges, national securities, associations, clearing
agencies, securities information processors, the Municipal Securities
Rulemaking Board, brokers, and dealers, municipal securities dealers,
and transfer agents, the conduct of statistical functions under the
Securities Exchange Act of 1934, and the investigations and inspections
arising in connection with such administration, as specified below:
(a) Administration of all matters arising under the Securities
Exchange Act of 1934 (15 U.S.C. 78a, et seq.), except:
(1) The examination and processing of applications for registration
of securities on national securities exchanges pursuant to section 12 of
the Act (15 U.S.C. 78l).
(2) The examination and processing of periodic reports filed pursuant
to sections 13 and 15(d) of the Act (15 U.S.C. 78m, 78o(d)).
(3) The examination and processing of proxy soliciting material
pursuant to regulations adopted under section 14 of the Act (15 U.S.C.
78n).
(4) The examination and processing of ownership reports filed under
section 16(a) of the Act (15 U.S.C. 78p(a)).
(5) The denial or suspension of registration of securities registered
on national securities exchanges, pursuant to section 19(a)(2) (15
U.S.C. 78s(a)(2)) by reason of failure to comply with the reporting
requirements of that Act.
(6) The enforcement and related activities under the jurisdiction of
the Division of Enforcement.
(15 U.S.C. 78d, 78d-1, 78d-2, 80a-37)
(37 FR 16792, Aug. 19, 1972, as amended at 43 FR 13376, Mar. 30,
1978)
17 CFR 200.19b Director of the Division of Enforcement.
The Director of the Division of Enforcement is responsible to the
Commission for the supervision and conduct of all of the enforcement
activities under each of the acts administered by the Commission and the
investigations relating thereto. The Director is responsible also for
recommending the institution of administrative and injunctive actions
arising out of such investigations and enforcement activities and for
the determination of whether the available evidence supports the
allegations in the proposed complaint. In addition, the Director is
responsible, in collaboration with the General Counsel, for the review
of cases to be referred to the Department of Justice with a
recommendation for criminal prosecution. The Director is responsible
for granting or denying requests by domestic and foreign governmental
authorities, foreign securities authorities, self-regulatory
organizations, receivers, special counsels, and other similar persons
appointed in Commission litigation, the Securities Investor Protection
Corporation, trustees and counsel for trustees appointed pursuant to
section 5(b) of the Securities Investor Protection Act, and trustees in
bankruptcy, for access to materials in the Commission's enforcement
files and, in collaboration with other involved Commission offices and
divisions, regulatory files.
(54 FR 24331, June 7, 1989)
17 CFR 200.20b Director of Division of Investment Management.
The Director of the Division of Investment Management is responsible
to the Commission for the administration of the Commission's
responsibilities under the Investment Company Act of 1940 and the
Investment Advisers Act of 1940, the administration and execution of the
Public Utility Holding Company Act of 1935, and with respect to matters
pertaining to investment companies registered under the Investment
Company Act of 1940 and pooled investment funds or accounts, the
administration of all matters relating to establishing and requiring
adherence to standards of economic and financial reporting and the
administration of fair disclosure and related matters under the
Securities Act of 1933 and the Securities Exchange Act of 1934 and
enforcement of the standards set forth in the Trust Indenture Act of
1939 regarding indentures covering debt securities, as listed in
paragraphs (a) through (e) of this section. These duties shall include
investigations and inspections arising in connection with such
administration; duties under paragraphs (a) through (e) of this section
shall not include enforcement and related activities under the
jurisdiction of the Division of Enforcement, but duties under paragraphs
(f) and (g) of this section shall include enforcement and related
activities under the jurisdiction of the Division of Enforcement.
(a) The administration of all matters arising under the Investment
Company Act of 1940 (15 U.S.C. 80a-1, et seq.), except those arising
under section 30(f) of the Act (15 U.S.C. 80a-29(f)).
(b) All matters arising under the Securities Act of 1933 (15 U.S.C.
77a, et seq.) arising from or pertaining to material field pursuant to
the requirements of that Act by investment companies registered under
the Investment Company Act of 1940 (15 U.S.C. 80a-1, et seq.) and pooled
investment funds or accounts.
(c) All matters arising under the Securities Exchange Act of 1934 (15
U.S.C. 78a, et seq.), except the examination and processing of
statements of beneficial ownership of securities and changes in such
ownership filed under section 16(a) (15 U.S.C. 78p(a)) of such Act,
pertaining to investment companies registered under the Investment
Company Act of 1940 and pooled investment funds or accounts in
connection with:
(1) The registration of securities pursuant to section 12 of the Act
(15 U.S.C. 78l), including the exemptive provisions of section 12(h) (15
U.S.C. 78l(h)).
(2) The examination and processing of periodic reports filed pursuant
to sections 13 and 15(d) of the Act (15 U.S.C. 78m, 78o(d)).
(3) The examination and processing of proxy soliciting material filed
pursuant to section 14(a) and information material filed pursuant to
section 14(c) of the Act (15 U.S.C. 78n(a), 78n(c)).
(d) All matters pertaining to investment companies registered under
the Investment Company Act of 1940 and pooled investment funds or
accounts arising under the Trust Indenture Act of 1939 (15 U.S.C.
77aaa, et seq.).
(e) All matters arising under the Investment Advisers Act of 1940 (15
U.S.C. 80b-1, et seq.).
(f) The examination and processing of proxy solicitation material
that is subject to Regulation 14 ( 240.14a-1 to 240.14a-12 of this
chapter) adopted under the Securities Exchange Act of 1934.
(g) The examination and processing of ownership reports filed under
sec. 17(a) of the Public Utility Holding Company Act (15 U.S.C.
79q(a)).
(41 FR 29375, July 16, 1976, as amended at 50 FR 5064, Feb. 5, 1985)
17 CFR 200.20c Office of Applications and Reports Services.
The Office of Applications and Reports Services is responsible for
the receipt and initial handling of all public documents filed at the
Commission's headquarters office. The initial handling includes
determining acceptability, extracting data for EDP input, calculating
fees, conducting cursory and substantive examinations, assigning filings
to branches and preparing deficiency correspondence. In addition, the
Office is responsible for the custody and control of the Commission's
official records; for the development of plans and implementation of
the Commission's records management program; for authenticating all
documents produced for administrative or judicial proceedings; for
maintaining liaison with the National Archives and Records Service and
other Government agencies with respect to the Commission's records and
its records management program. Additionally, the Office is the
definitive source of statistics for a wide variety of reports and
prepares various data based publications, such as the Corporation Index.
(Sec. 4(b), 48 Stat. 885, sec. 1106(a), 63 Stat. 972, 15 U.S.C.
78d(b); secs. 1, 2, 76 Stat. 394, 395, 15 U.S.C. 78d-1, 78d-2; secs.
19, 48 Stat. 85, 908, 15 U.S.C. 77s; sec. 23(a), 48 Stat. 901, sec. 8,
49 Stat. 1379, 15 U.S.C. 78w(a); sec. 20, 49 Stat. 833, 15 U.S.C. 78t;
sec. 319, 53 Stat. 1173, 15 U.S.C. 77sss; sec. 38, 54 Stat. 841, 15
U.S.C. 80a-37; sec. 211, 54 Stat. 855, sec. 14, 74 Stat. 888, 15 U.S.C.
80b-11; sec. 15B, 15 U.S.C. 78o-4(a); sec. 17A, 15 U.S.C. 78q-1
(c)(2); 11 U.S.C. 901, 1109(a))
(43 FR 13376, Mar. 30, 1978, as amended at 49 FR 12685, Mar. 30,
1984)
17 CFR 200.21 The General Counsel.
(a) The General Counsel is the chief legal officer of the Commission.
He or she is responsible for the representation of the Commission in
judicial proceedings in which it is involved as a party or as amicus
curiae, for directing and supervising all civil litigation involving the
Commission in the United States District Courts, for directing and
supervising the Commission's responsibilities under the Bankruptcy Code
and all related litigation, and for representing the Commission in all
cases in appellate courts. The General Counsel is responsible for the
review of cases which the Division of Enforcement recommends be referred
to the Department of Justice with a recommendation for criminal
prosecution. In addition, he or she is responsible for advising the
Commission at its request or at the request of any division director or
officer head, or on his or her own motion, with respect to
interpretations involving questions of law; for the conduct of
administrative proceedings relating to the disqualification of
professional persons from practice before the Commission; for the
preparation of the Commission comments to the Congress on pending
legislation; and for the drafting, in conjunction with appropriate
divisions and offices, of legislative proposals to be sponsored by the
Commission. The General Counsel is also responsible for the review and
clearance of the form and content of articles, treatises, and prepared
speeches and addresses by members of the staff relating to the
Commission or to the statutes and rules administered by the Commission
and is responsible for investigating any claims of staff improprieties.
He or she is responsible (with the Director of Personnel) for
administering and interpreting the Commission's Conduct Regulation. He
or she serves as Counselor to the Commission and its staff with regard
to ethical and conflicts of interest questions and acts as the
Commission's liaison on such matters with the Office of Personnel
Management and the Department of Justice. The General Counsel also is
responsible for coordinating and reviewing the interpretive positions of
the various divisions and offices. In addition, he or she is
responsible for appropriate disposition of all Freedom of Information
Act and Privacy Act appeals pursuant to the authority delegated in
200.30-14 of this chapter, and is the Commission's advisor with respect
to legal problems arising under the Freedom of Information Act, the
Privacy Act, the Federal Reports Act, the Federal Advisory Committee
Act, the Civil Service laws and regulations, the statutes and rules
applicable to the Commission's procurement, contracting, fiscal and
related administrative activities, and other statutes and regulations of
a similar nature applicable to a number of Government agencies.
(b) The General Counsel is also responsible for assisting members of
the Commission in the preparation of the opinions of the Commission, and
to the Commission for the preparation of opinions and decisions on
motions and certifications of questions and rulings by administrative
law judges in the course of administrative law proceedings, except (1)
in cases where, pursuant to a waiver by the parties of separation of
function requirements, another Division or Office of the Commission's
staff undertakes to prepare an opinion or decision, in which cases the
General Counsel may assist in such preparation, and (2) with respect to
administrative proceedings under Rule 2(e) of the Commission's Rules of
Practice ( 201.2(e) of this chapter) or other cases in which the
Chairman or the General Counsel has determined that separation of
function requirements or other circumstances would make inappropriate
the exercise of such functions by the General Counsel. In the cases
described in clause (2), the Executive Assistant to the Chairman
exercises such functions. The General Counsel deals with general
problems arising under the Administrative Procedure Act, including the
revision or adoption of rules of practice. The General Counsel is also
responsible for the exercise of such review functions with respect to
adjudicatory matters as are delegated to him or her by the Commission
pursuant to 101 Stat. 1254 (15 U.S.C. 78d-1, 78d-2) or as may be
otherwise delegated or assigned to him or her.
(c) The General Counsel also is responsible to the Commission for the
administration of the Government in the Sunshine Act for publicly
certifying, pursuant to 200.406, that, in his or her opinion,
particular Commission meetings may properly be closed to the public. In
the absence of the General Counsel, the Solicitor to the Commission
shall be deemed the General Counsel for purposes of 200.406. In the
absence of the General Counsel and the Solicitor, the most senior
Associate General Counsel available shall be deemed the General Counsel
for purposes of 200.406. In the absence of the General Counsel, the
Solicitor, and every Associate General Counsel, the most senior
Assistant General Counsel available shall be deemed the General Counsel
for purposes of 200.406. In the absence of the General Counsel, the
Solicitor, every Associate General Counsel and every Assistant General
Counsel, such attorneys as the General Counsel may designate (in such
order of succession as the General Counsel directs) shall exercise the
responsibilities imposed by 200.406.
(43 FR 13376, Mar. 30, 1978, as amended at 47 FR 26821, June 22,
1982; 47 FR 37077, Aug. 25, 1982; 49 FR 12685, Mar. 30, 1984; 49 FR
13866, Apr. 9, 1984; 50 FR 12240, Mar. 28, 1985; 54 FR 18100, Apr.
27, 1989; 54 FR 24331, June 7, 1989)
17 CFR 200.21a Ethics Counsel.
(a) The Ethics Counsel within the Office of the General Counsel of
the Commission shall oversee compliance with the Regulation Concerning
Conduct of Members and Employees and Former Members and Employees,
200.735-1-200.735-18 of this chapter and shall, when appropriate,
investigate allegations of violation of that Regulation and the
Commission's Canons of Ethics, 200.50-200.72 of this chapter and the
Code of Behavior Concerning Ex Parte Communications Between Persons
Outside the Commission and Decisional Employees, 200.110-200.114 of
this chapter.
(b) The Counsel's responsibilities, subject to the oversight of the
General Counsel or his or her delegate, shall include:
(1) Receiving and reviewing information containing allegations of
misconduct by a Commission employee;
(2) Referring those matters which involve management questions to
Division Directors, Office Heads or Regional Administrators;
(3) Investigating or overseeing investigations into those allegations
of misconduct which, in the judgment of Counsel, require investigation;
(4) Referring complaints which appear to involve a violation of
Federal criminal statutes, after a preliminary investigation has
determined that the complaint is not frivolous, to the Chairman or most
senior Commissioner who would be proper, for transmission to the
Department of Justice in accordance with the provisions of 28 U.S.C.
535;
(5) Acting as liaison with the Department of Justice with respect to
such matters as have been referred; or with state or local authorities
to whom matters may on occasion be referred;
(6) Preparing for submission to the General Counsel reports of
completed investigations wth recommendations for disposition;
(7) Arranging for the review of articles and speeches as required by
200.735-4(e) of this chapter;
(8) Giving counseling under, and preparing interpretations or
opinions with respect to, provisions of the Commission's regulations
governing the conduct of employees; and
(9) Referring findings of professional misconduct to the appropriate
state professional boards or societies.
(11 U.S.C. 901, 1109(a))
(45 FR 46352, July 10, 1980, as amended at 49 FR 12685, Mar. 30,
1984)
17 CFR 200.22 The Chief Accountant.
The Chief Accountant of the Commission is the chief accounting
officer of the Commission and is responsible to the Commission for all
accounting and auditing matters arising in the administration of the
Acts administered by the Commission, particularly with respect to new
accounting policy determinations, the form and content of financial
statements to be filed with the Commission, and the supervision of
procedures to be followed in audit or accounting investigations
conducted by the Commission staff. He is responsible for recommending
the institution of administrative proceedings relating to the
disqualification of accountants to practice before the Commission, and
for assisting counsel in the conduct of such proceedings and, in
appropriate cases, for consultation and advice in the preparation of
formal Commission opinions involving accounting and auditing matters.
17 CFR 200.23a Office of the Chief Economist.
The Office of the Chief Economist is responsible to the Commission
for providing an objective economic perspective to understand and
evaluate the economic dimension of the agency's regulatory oversight.
The Chief Economist provides the Commission with economic analyses of
proposed rule changes, current or proposed policies, and capital market
topics. Advice is designed to address such questions as whether
proposed rules or policies accomplish their objectives, what benefits
are produced by proposed rules or policies, and what costs accompany
those benefits. Upon request, the Chief Economist provides professional
advice and technical support to operating divisions.
(11 U.S.C. 901, 1109(a))
(49 FR 12685, Mar. 30, 1984)
17 CFR 200.23b Directorate of Economic and Policy Analysis.
The Directorate of Economic and Policy Analysis is responsible to the
Commission, in coordination with its other divisions and offices, for
the continuing analysis of the economic effects of existing and proposed
Commission regulations and developments in the securities industry and
markets. Based on its analysis, the Directorate is responsible for
recommending to the Commission the adoption or modification or programs,
policies and regulations under the statutes administered by the
Commission. The Directorate also has the responsibility for
coordinating and, together with the Office of the General Counsel,
ensuring compliance with the requirements of the Regulatory Flexibility
Act.
(15 U.S.C. 78d-1, 8d-2)
(49 FR 12685, Mar. 30, 1984)
17 CFR 200.24 Office of the Comptroller.
This Office, under the direction of the Comptroller, is responsible
to the Executive Director, Chairman and Commission for the internal
financial management and programming functions of the Securities and
Exchange Commission. These functions include: budgeting, accounting,
payroll and adminstrative audit. The Comptroller, and his designees,
serves as liaison to the Commission before the Office of Management and
Budget and Congressional Appropriations Committees on appropriation
matters, and the Treasury Department and the General Accounting Office
on financial and progamming matters.
(11 U.S.C. 901, 1109(a))
(49 FR 12685, Mar. 30, 1984)
17 CFR 200.24a Office of Consumer Affairs and Information Services.
The Office of Consumer Affairs and Information Services is
responsible to the Commission for its consumer protection program. This
includes implementation of a nationwide system for the resolution of
investor disputes; improving and upgrading the Commission's complaint
processing effort; providing for greater Commission oversight of the
complaint processing procedures of the self-regulatory organizations;
increasing the Commission's consumer education program, in conjunction
with the Office of Public Affairs; providing for greater consumer input
in Commission rulemaking proceedings; and, together with the Office of
the General Counsel, recommending cases in which the Commission might
seek to appear as amicus curiae. This Office is also charged with
managing the Commission's public reference facilities and with
processing general inquiries under the Freedom of Information Act (Pub.
L. 90-23, 81 Stat. 54) and the Privacy Act (Pub. L. 93-579, 88 Stat.
1896).
(15 U.S.C. 78d-1, 78d-2)
(43 FR 13376, Mar. 30, 1978, as amended at 49 FR 12685, Mar. 30,
1984)
17 CFR 200.25 Office of Personnel.
The Office of Personnel is under the supervision of the Director of
Personnel, who is responsible to the Chairman and the Executive Director
for the development and execution of the personnel programs of the
Commission. These programs include recruitment, placement and staffing;
position classification and wage administration; employee career
development and training; labor-management relations, including
representing management on labor relations matters; personnel
management evaluation; employee performance evaluation; insurance and
health benefits; and incentive awards. He or she also is the
Commission's liaison officer with the Office of Personnel Management,
professional organizations and other government agencies on personnel
matters. He or she is responsible for the day-to-day administration of
the Regulation Regarding Conduct of Members and Employees except where
otherwise specifically provided in the Regulation.
(15 U.S.C. 78d-1, 78d-2)
(43 FR 13377, Mar. 30, 1978, as amended at 50 FR 12240, Mar. 28,
1985)
17 CFR 200.26 Office of Administrative Services.
(a) The Director of Administrative Services is responsible for the
development and execution of the Commission's office service programs,
which include procurement, contract administration, telecommunications
management, supply and space management, transportation, safety
programs, emergency preparedness coordination and building security, as
well as all mail, printing and publication operations of the Commission.
(b) The Director has authority to act as Contracting Officer for the
Commission, serves as Printing Liaison with the Joint Committee on
Printing and is the liaison with those Federal, state, and local
government agencies involved with matters that are within the
jurisdiction of the Director.
(50 FR 12240, Mar. 28, 1985)
17 CFR 200.26a Office of Information Systems Management.
The Office of Information Systems Management is responsible for the
analysis, design programming, operation, and maintenance of all ADP
systems; developing and implementing long-range ADP plans and programs;
coordinating all ADP and systems analysis activities being considered
or carried out by other divisions and offices, and furnishing such
organizations with appropriate assistance and support; providing
technical advice to the staff in connection with development of
Commission rules and regulations having ADP implications; facilitating
the Commission's surveillance of ADP in the securities industry;
evaluating and recommending new information processing concepts and
capabilities for application within the Commission; and, development of
microcomputer and office automation capabilities and support within the
Commission.
(15 U.S.C. 78d-1, 78d-2; 11 U.S.C. 901, 1109(a))
(43 FR 13377, Mar. 30, 1978, as amended at 49 FR 12685, Mar. 30,
1984)
17 CFR 200.27 The Regional Administrators.
Each Regional Administrator is responsible for executing the
Commission's programs within his geographic region as set forth below,
subject to policy direction and review by the Division Directors, the
General Counsel, and the Chief Accountant. The Regional Administrators'
responsibilities include particularly the investigation of transactions
in securities on national securities exchanges, in the over-the-counter
market, and in distribution to the public; the examination of members
of national securities exchanges and registered brokers and dealers,
transfer agents, investment advisers and investment companies including
the examination of reports filed under 240.17a-5 of this chapter; the
examination and processing of filings under 230.251 to 230.264 of this
chapter issued pursuant to section 3(b) of the Securities Act of 1933;
the examination and processing of filings under 239.28 of this chapter
and any related filings under the Trust Indenture Act of 1939; the
prosecution of injunctive actions in U.S. District Courts and
administrative proceedings before Administrative Law Judges; the
rendering of assistance to U.S. Attorneys in criminal cases; and the
making of the Commission's facilities more readily available to the
public in that region. In addition, the New York Regional Administrator
is responsible for the participation in cases under chapters 9 and 11 of
the Bankruptcy Code in the New York and Boston Regions, and in the State
of Pennsylvania; the Atlanta Regional Administrator in the Atlanta and
Washington Regions, except the State of Pennsylvania; the Chicago
Regional Administrator in Chicago, Fort Worth and Denver regions, except
for the State of Utah; and the Los Angeles Regional Administrator in
the Los Angeles and Seattle regions, plus the State of Utah.
(15 U.S.C. 77u, 78d, 78d-1; secs. 6, 7, 8, 10, 19(a), 48 Stat. 78,
79, 81, 85; secs. 205, 209, 48 Stat. 906, 908; sec. 301, 54 Stat. 857;
sec. 8, 68 Stat. 685; sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90
Stat. 57; secs. 13, 15(d), 23(a), 48 Stat. 894, 895, 90k; sec. 203(a),
49 Stat. 704; secs. 3, 8, 49 Stat. 1377, 1379; secs. 4, 6, 10, 78
Stat. 569, 570-574, 580; sec. 2, 82 Stat. 454; secs. 1, 2, 84 Stat.
1497; secs. 10, 18, 89 Stat. 119, 155; sec. 308(b), 90 Stat. 57; (15
U.S.C. 77f, 77g, 77h, 77j, 77s(a), 78m, 78o(d), 78w(a)); 11 U.S.C. 901,
1109(a))
(37 FR 23826, Nov. 9, 1972, as amended at 44 FR 21566, Apr. 10, 1979;
49 FR 12685, Mar. 30, 1984; 50 FR 12240, Mar. 28, 1985)
17 CFR 200.28 Issuance of instructions.
(a) Within the spheres of responsibilities heretofore set forth,
Division and Office Heads, and all Regional Administrators may issue
such definitive instructions as may be necessary pursuant to this
section.
(b) All existing procedures and authorizations not inconsistent with
this section shall continue in effect until and unless modified by
definitive instructions issued pursuant to this paragraph.
17 CFR 200.29 Rules.
The individual operating divisions shall have the initial
responsibility for proposing amendments to existing rules or new rules
under the statutory provisions within the jurisdiction of the particular
division. Where any such proposals presents a legal problem or is a
matter of first impression, or involves a matter of enforcement policy
or questions involving statutes other than those administered by the
Commission, or may have an effect on prior judicial precedent or pending
litigation, submission of the proposal should be made to the Office of
the General Counsel for an expression of opinion prior to presentation
of the matter to the Commission.
17 CFR 200.30-1 Delegation of authority to Director of Division of
Corporation Finance.
Pursuant to the provisions of Pub. L., No. 87-592, 76 Stat. 394 (15
U.S.C. 78d-1, 78d-2), the Securities and Exchange Commission hereby
delegates, until the Commission orders otherwise, the following
functions to the Director of the Division of Corporation Finance, to be
performed by him or under his direction by such person or persons as may
be designated from time to time by the Chairman of the Commission:
(a) With respect to registration of securities pursuant to the
Securities Act of 1933 (15 U.S.C. 77a, et seq.), and Regulation C
thereunder ( 230.400, et seq. of this chapter):
(1) To determine the effective dates of amendments to registration
statements filed pursuant to section 8(c) of the Act (15 U.S.C.
77h(c)).
(2) To consent to the withdrawal of registration statements or
amendments or exhibits thereto, pursuant to Rule 477 ( 230.477 of this
chapter), and to issue orders declaring registration statements
abandoned, pursuant to Rule 479 ( 230.479 of this chapter).
(3) To grant applications for confidential treatment of contract
provisions pursuant to Rule 406 ( 230.406 of this chapter) under the
Act; to issue orders scheduling hearings on such applications and to
deny any such application as to which the applicant waives his right to
a hearing, provided such applicant is advised of his right to have such
denial reviewed by the Commission.
(4) To accelerate the use or publication of any summary prospectus
filed with the Commission pursuant to section 10(b) of the Act (15
U.S.C. 77j(b)) and Rule 431(g) ( 230.431(g) of this chapter) thereunder.
(5) To take the following action pursuant to section 8(a) of the Act
(15 U.S.C. 77h(a)):
(i) To determine registration statements to be effective within
shorter periods of time than 20 days after the filing thereof;
(ii) To consent to the filing of amendments prior to the effective
dates of registration statements as part thereof, or to determine that
amendments filed prior to the effective dates of registration statements
have been filed pursuant to orders of the Commission, so as to be
treated as parts of the registration statements for the purpose of
section 8(a) of the Act (15 U.S.C. 77h(a));
(iii) To determine to be effective applications for qualification of
trust indentures filed with registration statements.
(6) Pursuant to instructions as to financial statements contained in
forms adopted under the Act:
(i) To permit the omission of one or more financial statements
therein required or the filing in substitution therefor of appropriate
statements of comparable character, or
(ii) To require the filing of other financial statements in addition
to, or in substitution for, the statements therein required.
(7) Acting pursuant to section 4(3) of the Act (15 U.S.C. 77d(3)) or
Rule 174 thereunder ( 230.174 of this chapter), to reduce the 40-day
period or the 90-day period with respect to transactions referred to in
section 4(3)(b) of the Act (15 U.S.C. 77d(3)(B)).
(8) To act on applications to dispense with any written consents of
an expert pursuant to Rule 437 ( 230.437 of this chapter).
(9) To adjust the filing date of a filing submitted in an electronic
format where the acceptance of the filing is delayed because of
equipment malfunction or technical problem.
(b) With respect to the Securities Act of 1933 (15 U.S.C. 77a, et
seq.) and Regulation B thereunder ( 230.300, et seq. of this chapter):
(1) To authorize the commencement of the offering within shorter
periods of time than 10 days after the filing of the offering sheet,
pursuant to Rule 310(a) thereunder ( 230.310(a) of this chapter);
(2) To authorize the issuance of orders temporarily suspending the
effectiveness of offering sheets as prescribed in Rule 334 thereunder (
230.334 of this chapter);
(3) To issue notices of suspension of offering sheets and of
opportunity for hearing thereon, in the manner prescribed in Rule 336(a)
thereunder ( 230.336(a) of this chapter);
(4) To terminate temporary suspension orders issued by the Commission
under Rule 334 ( 230.334 of this chapter), to terminate proceedings
under Rule 336(a) ( 230.336(a) of this chapter) and to issue notices of
such action, if at any time before the Commission enters an order
setting the matter down for hearing, as set forth in Rule 336(c) (
230.336(c) of this chapter), it finds that the offering sheet has been
amended to cure the objections specified in the temporary suspension
order or the notice instituting the proceeding;
(5) To authorize the issuance of orders granting requests for
withdrawal of offering sheets, pursuant to Rule 344 thereunder ( 230.344
of this chapter), when it appears that no sales of securities described
in said offering sheets have, in fact, been made;
(6) To authorize the issuance of orders declaring offering sheets
effective, as amended, filed in accordance with the provisions in Rule
340 thereunder ( 230.340 of this chapter) and Rule 342(c) thereunder (
230.342(c) of this chapter);
(7) To authorize the issuance of orders terminating the effectiveness
of offering sheets upon applications of persons filing them in
compliance with the provisions of Rule 346 thereunder ( 230.346 of this
chapter); and
(8) To authorize the granting of applications for release of reports
filed with the Commission on Form 1-G ( 239.101(b)(1) of this chapter)
pursuant to Rule 316(a) thereunder ( 239.316(a) of this chapter).
(c) With respect to the Securities Act of 1933 (15 U.S.C. 77a, et
seq.) and Regulation A thereunder ( 230.251, et seq. of this chapter),
to authorize the granting of applications under Rule 252(g) ( 230.252(g)
of this chapter) upon a showing of good cause that it is not necessary
under the circumstances that an exemption under Regulation A be denied.
(d) With respect to the Securities Act of 1933 (15 U.S.C. 77a, et
seq.) and Regulation D thereunder ( 230.501, et seq. of this chapter),
to authorize the granting of applications under Rule 505(b)(2)(iii)(C),
( 230.505(b)(2)(iii)(C) of this chapter) and under Rule 507(b) (
230.507(b) of this chapter) upon the showing of good cause that it is
not necessary under the circumstances that the exemption under
Regulation D be denied.
(e) With respect to the Trust Indenture Act of 1939 (15 U.S.C.
77aaa, et seq.):
(1) To determine to be effective prior to the 20th day after filing
thereof applications for qualification of indentures filed on Form T-3 (
269.3 of this chapter) pursuant to section 307 of the Act (15 U.S.C.
77ggg), and Rule 7a-1 thereunder ( 260.7a-1 of this chapter);
(2) To authorize the issuance of orders exempting certain securities
from the provisions of the Act pursuant to sections 304 (c) and (d)
thereof (15 U.S.C. 77ddd(c), 77ddd(d)) and Rule 4c-1, thereunder (
260.4c-1 of this chapter);
(3) In cases in which opportunity for hearing is waived, to authorize
the issuance of orders determining that a trusteeship under an indenture
to be qualified and another indenture is not so likely to involve a
material conflict of interest as to make it necessary to disqualify the
trustee pursuant to section 310(b)(1)(ii) of the Act (15 U.S.C.
77jjj(b)(1)(ii)) and Rule 10b-2 thereunder ( 260.10b-2 of this chapter).
(4) To adjust the filing date of a filing submitted in an electronic
format where the acceptance of the filing is delayed because of
equipment malfunction or technical problem.
(5) To authorize the issuance of orders exempting any person,
registration statement, indenture, security or transaction, or any class
or classes of persons, registration statements, indentures, securities,
or transactions from the requirements of one or more provisions of the
Act pursuant to section 304(d) of the Act (15 U.S.C. 77ddd(d)) and rule
4d-7 thereunder (17 CFR 260.4d-7 of this chapter).
(6) To determine to be effective prior to the 10th day after filing
thereof an application for determining the eligibility under section
310(a) of the Act of a person designated as trustee for delayed
offerings of debt securities under the Securities Act pursuant to
section 305(b)(2) of the Act and rule 5b-1 (17 CFR 260.5b-1 of this
chapter) thereunder.
(7) To authorize the issuance of an order permitting a foreign person
to act as sole trustee under qualified indentures pursuant to section
310(a) of the Act and rule 10a-1 through 10a-4 thereunder (17 CFR
260.10a-1 through 260.10a-4 of this chapter).
(8) To issue notices with respect to applications for, and authorize
the issuance of orders granting, a stay of a trustee's duty to resign
pursuant to section 310(b) of the Act and Rule 10b-4 (17 CFR 260.10b-4
of this chapter) thereunder.
(f) With respect to the Securities Exchange Act of 1934 (15 U.S.C.
78a, et seq.):
(1) To determine to be effective applications for registration of
securities on a national securities exchange prior to 30 days after
receipt of a certification pursuant to section 12(d) of the Act (15
U.S.C. 78l(d));
(2) Pursuant to instructions as to financial statements contained in
forms adopted under the Act:
(i) To extend the time for filing or to permit the ommission of one
or more financial statements therein required or the filing in
substitution therefor of appropriate statements of comparable character.
(ii) To require the filing of other financial statements in addition
to, or in substitution for, the statements therein required;
(3)(i) To grant and deny applications for confidential treatment
filed pursuant to section 24(b) of the Act (15 U.S.C. 78x(b)) and Rule
24b-2 thereunder ( 240.24b-2 of this chapter);
(ii) To revoke a grant of any such application for confidential
treatment.
(4) To authorize the use of forms of proxies, proxy statements or
other soliciting material within periods of time less than that
prescribed in Rules 14a-6, 14a-8(d) and 14a-11 ( 240.14a-6,
240.14a-8(d), and 240.14a-11 of this chapter); to authorize the filing
of information statements within periods of time less than that
prescribed in Rule 14c-5(a) ( 240.14c-5(a) of this chapter); and to
authorize the filing of information pursuant to Rule 14d-2(f) (
240.14d-2(f) of this chapter) and Rule 14f-1 ( 240.14f-1 of this
chapter) within periods of time less than that prescribed in those
sections.
(5) To grant or deny applications filed pursuant to section 12(g)(1)
of the Act (15 U.S.C. 78l(g)(1)) for extensions of time within which to
file registration statements pursuant to that section, provided the
applicant is advised of his right to have any such denial reviewed by
the Commission.
(6) To accelerate at the request of the issuer the effective date of
registration statements filed pursuant to section 12(g) of the Act (15
U.S.C. 78l(g)).
(7) To issue notices of applications for exemptions and to grant
exemptions under section 12(h) of the Act (15 U.S.C. 78l(h)).
(8) At the request of the issuer to accelerate the termination of
registration of any class of equity securities as provided in section
12(g)(4) of the Act (15 U.S.C. 78l(g)(4)) or as provided in Rule
12g3-2(a)(2) ( 240.12g3-2(a)(2)).
(9) Upon receipt of a notification from the Secretary of the Treasury
designating a security for exemption pursuant to section 3(a)(12), to
issue public releases announcing such designation.
(10) To issue public releases listing those foreign issuers which
appear to be current in submitting the information specified in Rule
12g3-2(b) ( 240.12g3-2(b)).
(11) To adjust the filing date of a filing submitted in an electronic
format where the acceptance of the filing is delayed because of
equipment malfunction or technical problem.
(12) To grant exemptions from Rule 14d-10 ( 240.14d-10 of this
chapter) pursuant to Rule 14d-10(e) ( 240.14d-10(e) of this chapter.
(13) To grant exemptions from Rule 14b-2 (b) and/or (c) ( 240.14b-2
(b) and/or (c) of this chapter) pursuant to Rule 14b-2(d) ( 240.14b-2(d)
of this chapter).
(14) To determine with respect to a tender or exchange offer
otherwise eligible to be made pursuant to rule 14d-1(b) ( 240.14d-1(b)
of this chapter) whether, in light of any exemptive order granted by a
Canadian federal, provincial or territorial regulatory authority,
application of certain or all of the provisions of sections 14(d)(1)
through 14(d)(7) of the Exchange Act, Regulation 14D and Schedules 14D-1
and 14D-9 thereunder, and rule 14e-1 of Regulation 14E, to such offer is
necessary or appropriate in the public interest.
(g) Notwithstanding anything in the foregoing:
(1) Matters arising under the Investment Company Act of 1940 (15
U.S.C. 80a-1, et seq.), the Securities Act of 1933 (15 U.S.C. 77a, et
seq.), the Securities Exchange Act of 1934 (15 U.S.C. 78a, et seq.) and
the Trust Indenture Act of 1939 (15 U.S.C. 77aaa, et seq.) pertaining to
investment companies registered under the Investment Company Act of 1940
are not within the scope of the functions delegated to the Director of
the Division of Corporation Finance, except those arising under section
30(f) of the Investment Company Act of 1940 (15 U.S.C. 80a-29(f));
(2) The Director of the Division of Corporation Finance shall have
the same authority with respect to the Securities Act of 1933 (15 U.S.C.
77a, et seq.), Regulation A ( 230.251, et seq. of this chapter), as that
delegated to each Regional Administrator in paragraphs (a), (b) and (d)
of Article 30-6 of the Commission's Statement of Organization, Conduct
and Ethics, and Information and Requests ( 200.30-6 of this chapter);
(3) In any case in which the Director of the Division of Corporation
Finance believes it appropriate, he may submit the matter to the
Commission.
(h) With respect to the Securities Act of 1933 (15 U.S.C. 77a et
seq.) and Rule 701 thereunder ( 230.701 of this chapter), to authorize
the granting of applications under Rule 703(b) ( 230.703(b) of this
chapter) upon a showing of good cause that it is not necessary under the
circumstances that an exemption under Rule 701 be denied.
(i) With respect to the Securities Act of 1933 (15 U.S.C. 77a, et
seq.) and Rule 144A thereunder ( 230.144A of this chapter), taking into
account then-existing market practices, to designate any securities or
classes of securities to be securities that will not be deemed ''of the
same class as securities listed on a national securities exchange or
quoted in a U.S. automated inter-dealer quotation system'' within the
meaning of Rule 144A(d)(3)(i) ( 230.144A(d)(3)(i) of this chapter).
(j) With respect to the Securities Act of 1933 (15 U.S.C. 77a et
seq.) and Regulation S thereunder ( 230.901 et seq. of this chapter),
and in consultation with the Director of the Division of Market
Regulation, to designate any foreign securities exchange or non-exchange
market as a ''designated offshore securities market'' within the meaning
of Rule 902(a) ( 230.902(a) of this chapter).
(41 FR 29375, July 16, 1976)
Editorial Note: For Federal Register citations affecting 200.30-1
see the List of CFR Sections Affected in the Finding Aids section of
this volume.
17 CFR 200.30-3 Delegation of authority to Director of Division of
Market Regulation.
Pursuant to the provisions of Pub. L. 87-592, 76 Stat. 394, 15
U.S.C. 78d-1, 78d-2), the Securities and Exchange Commission hereby
delegates, until the Commission orders otherwise, the following
functions to the Director of the Division of Market Regulation to be
performed by him or under his direction by such person or persons as may
be designated from time to time by the Chairman of the Commission:
(a) With respect to the Securities Exchange Act of 1934 (15 U.S.C.
78a, et seq.):
(1) To approve the withdrawal or striking from listing and
registration of securities registered on any national securities
exchange pursuant to section 12(d) of the Act (15 U.S.C. 78l(d)) and
Rules 12d2-1 and 12d2-2 thereunder ( 240.12d2-1 and 240.12d2-2 of this
chapter);
(2) To extend unlisted trading privileges and to deny applications
for unlisted trading privileges by national securities exchanges
pursuant to section 12(f)(2) of the Act, 15 U.S.C. 78l(f)(2), and Rule
12f-1 thereunder, 17 CFR 240.12f-1, provided that any applicant exchange
denied unlisted trading privileges is advised of its right to have such
denial reviewed by the Commission.
(3) Pursuant to section 15(b) of the Act (15 U.S.C. 78o(b)):
(i) To authorize the issuance of orders granting registration of
brokers or dealers within forty-five days of the filing of an
application for registration as a broker or dealer (or within such
longer period as to which the applicant consents);
(ii) To authorize the issuance of orders canceling registrations of
brokers or dealers, or pending applications for registration, if such
brokers or dealers or applicants for registration are no longer in
existence or have ceased to do business as brokers or dealers;
(4) Pursuant to Rule 19h-1 ( 240.19h-1 of this chapter):
(i) To grant applications with respect to membership in, association
with a member of, or participation in, a self-regulatory organization
and for other relief as to persons who are subject to an applicable
disqualification where such relationships or other relief have been
approved or recommended by a self-regulatory organization;
(ii) To extend the time for Commission consideration of notices for
admission to membership or participation in a self-regulatory
organization or association with a member of persons subject to a
statutory disqualification pursuant to paragraph (a)(7) of that rule.
(5) Pursuant to Rule 17a-5(1)(3) ( 240.17a-5(1)(3) of this chapter),
to consider applications, by brokers and dealers for exemptions from,
and extension of time within which to file, reports required by Rule
17a-5 ( 240.17a-5 of this chapter), and to grant, and to authorize the
issuance of orders denying, such applications provided such applicant is
advised of his right to have such denial reviewed by the Commission.
(6) Pursuant to Rules 10b-4(d), 10b-6(h), 10b-7(o), 10b-8(f), and
10b-13(d) ( 240.10b-4(d), 240.10b-6(h), 240.10b-7(o), 240.10b-8(f), and
240.10b-13(d) of this chapter), to grant requests for exemptions from
Rules 10b-4, 10b-6, 10b-7, 10b-8, and 10b-13 ( 240.10b-4, 240.10b-6,
240.10b-7, 240.10b-8, and 240.10b-13 of this chapter).
(7) Pursuant to Rule 15c3-1 ( 240.15c3-1 of this chapter):
(i) To approve lesser equity requirements in specialist or market
maker accounts pursuant to Rule 15c3-1(a)(6)(iii)(E) (
240.15c3-1(a)(6)(iii)(E) of this chapter);
(ii) To grant exemptions from Rule 15c3-1 ( 240.15c3-1 of this
chapter) pursuant to Rule 15c3-1(b)(3) ( 240.15c3-1(b)(3) of this
chapter);
(iii) To grant temporary exemptions upon specified terms and
conditions from the debt equity requirements of Rule 15c3-1(d)(
240.15c3-1(d) of this chapter);
(iv) To approve a change in election of the alternative capital
requirement pursuant to Rule 15c3-1(f)(1) (i) and (ii) (
240.15c3-1(f)(1) (i) and (ii) of this chapter).
(8) Pursuant to Rule 17a-10(d) ( 240.17a-10(d) of this chapter), to
consider applications by broker-dealers for extensions of time in which
to file reports required by Rule 17a-10( 240.17a-10 of this chapter),
and to grant, and to authorize the issuance of orders denying, such
applications provided such applicant is advised of his right to have
such denial reviewed by the Commission. Any extension granted shall not
be for more than 150 days after the close of the calendar year for which
the report on Form X-17A-10 ( 249.618 of this chapter) is made.
(9) Pursuant to Rule 10b-17(b)(2) ( 240.10b-17(b)(2) of this
chapter), to review applications of various issuers for exemption from
the notice requirements of Rule 10b-17 ( 240.10b-17 of this chapter) and
to grant or deny such applications, with authority to issue orders
granting and denying same, provided each applicant is advised of his
right to have a denial reviewed by the Commission.
(10) Pursuant to Rule 15c3-3 ( 240.15c3-3 of this chapter) to find
and designate as control locations for purposes of Rule 15c3-3(c)(7) (
240.15c3-3(c)(7) of this chapter) certain broker-dealer accounts which
are adequate for the protection of customer securities.
(11) (Reserved)
(12) Pursuant to Rule 19b-4 ( 240.19b-4) of this chapter, to publish
notices of proposed rule changes filed by self-regulatory organizations
and to approve such proposed rule changes.
(13) Pursuant to section 15B(a) of the Act (15 U.S.C. 78o-4(a)), to
authorize the issuance of orders granting registration of municipal
securities dealers within forty-five days of the filing of an
application for registration as a municipal securities dealer (or within
such longer period as to which the applicant consents).
(14) Pursuant to section 17A(c)(2) of the Act (15 U.S.C.
78q-1(c)(2)), to authorize the issuance of orders accelerating
registration of transfer agents for which the Commission is the
appropriate regulatory agency before the expiration of thirty days
following the dates on which applications for registration as a transfer
agent are filed.
(15) Pursuant to Rule 10a-1(f) ( 240.10a-1(f)) to grant requests for
exemptions from Rule 10a-1;
(16) Pursuant to sections 17A(b)(1), 17A(b)(2) and 19(a) of the Act
(15 U.S.C. 78q-1(b)(1), 78q-1(b)(2) and 78s(a)), to publish notice of
the filing of applications for registration and for exemption from
registration as a clearing agency.
(17) Pursuant to Rule 17f-2 ( 240.17f-2 of this chapter).
(i) To disapprove a ''Notice Pursuant to Rule 17f-2'' pursuant to
Rule 17f-2(e) ( 240.17f-2(e) of this chapter).
(ii) To grant exemptions upon specified terms, conditions and
periods, for classes of persons subject to Rule 17f-2 pursuant to Rule
17f-2(g) ( 240.17f-2(g) of this chapter).
(iii) To approve amendments to plan of a registered national
securities exchange or a national securities association submitted
pursuant to Rule 17f-2(c) ( 240.17f-2(c) of this chapter).
(18) Pursuant to Rule 17d-1 ( 240.17d-1 of this chapter) to designate
one self-regulatory organization responsible for the examination of
brokers and dealers which are members of more than one such organization
to insure compliance with applicable financial responsibility rules.
(19)(i) To grant and deny applications for confidential treatment
filed pursuant to section 24(b) of the Act (15 U.S.C. 78x(b)) and Rule
24b-2 thereunder (240.24b-2 of this chapter);
(ii) To revoke a grant of confidential treatment for any such
application.
(20) Pursuant to sections 8(c) and 15(c)(2) of the Act (15 U.S.C.
78h(c) and 78o(2)) and paragraphs (g) of Rules 8c-1 and 15c2-1
thereunder, to make findings that the agreements, safeguards, and
provisions of registered clearing agencies are adequate for the
protection of investors.
(21) Pursuant to section 17A(c)(3)(C) of the Act (15 U.S.C.
78q-1(c)(3)(C)), to set terms and conditions upon which transfer agents
registered with the Commission may withdraw from registration as a
transfer agent by filing a written notice of withdrawal.
(22) Pursuant to section 17A(c)(3)(C) of the Act (15 U.S.C.
78q-1(c)(3)(C)), to authorize the issuance of orders cancelling
registrations of transfer agents registered with the Commission or
denying applications for registration as a transfer agent with the
Commission, if such transfer agents are no longer in existence or have
ceased to do business as transfer agents.
(23) Pursuant to section 17(b) of the Act (15 U.S.C. 78q(b)), prior
to any examination of a registered clearing agency, registered transfer
agent, or registered municipal securities dealer whose appropriate
regulatory agency is not the Commission, to notify and consult with the
appropriate regulatory agency for such clearing agency, transfer agent,
or municipal securities dealer.
(24) Pursuant to section 17(c)(3) of the Act, 15 U.S.C. 78q(c)(3), in
regard to clearing agencies, transfer agents and municipal securities
dealers for which the Commission is not the appropriate regulatory
agency, (i) to notify the appropriate regulatory agency of any
examination conducted by the Commission of any such clearing agency,
transfer agent, or municipal securities dealer; (ii) to request from
the appropriate regulatory agency a copy of the report of any
examination of any such clearing agency, transfer agent, or municipal
securities dealer conducted by such appropriate regulatory agency and
any data supplied to it in connection with such examination; and (iii)
to furnish to the appropriate regulatory agency on request a copy of the
report of any examination of any such clearing agency, transfer agent,
or municipal securities dealer conducted by the Commission and any data
supplied to it in connection with such examination.
(25) Pursuant to Rule 17f-1 ( 240.17f-1 of this chapter), to
designate persons not subject to 240.17f-1 as reporting institutions
upon specified terms, conditions, and time periods.
(26) (Reserved)
(27) To approve amendments to the joint industry plan governing the
consolidated transaction reporting declared effective by the Commission
pursuant to Rule 11Aa(3-1) ( 240.11Aa3-1 of this chapter) or its
predecessor, Rule 17a-15, and to grant exemptions from Rule 11Aa3-1
pursuant to Rule 11Aa3-1(g) ( 240.11Aaa3-1(g) of this chapter) to
exchanges trading listed securities that are designated as national
market system securities until such times as a Joint Reporting Plan for
such securities is filed and approved by the Commission.
(28) To grant exemptions from Rule 11Ac1-1 (''Rule'') ( 240.11Ac1-1),
pursuant to paragraph (d) of the rule.
(29) To issue supplemental orders modifying the terms upon which
self-regulatory organizations are authorized to act jointly in planning,
developing, operating or regulating facilities of a national market
system in accordance with the terms of amendments to plans which plans
have been previously approved by the Commission under section
11A(a)(3)(B) of the Securities Exchange Act of 1934.
(30) Pursuant to section 17(a) of the Act, 15 U.S.C. 78q, to approve
amendments to the plans which are consistent with the reporting
structure of Rules 17a-5(a)(4) and 17a-10(b) filed by self-regulatory
organizations pursuant to Rules 17a-5(a)(4) and 17a-10(b).
(31) Pursuant to section 19(b)(2) of the Act, 15 U.S.C. 78s(b)(2), to
extend for a period not exceeding 90 days from the date of publication
of notice of the filing of a proposed rule change pursuant to section
19(b)(1) of the Act, 15 U.S.C. 78s(b)(1), the period during which the
Commission must by order approve the proposed rule change or institute
proceedings to determine whether the proposed rule change should be
disapproved.
(32) Pursuant to paragraph (e) of Rule 10b-10 (240.10b-10(e) of this
chapter), to grant exemptions from Rule 10b-10.
(33) Pursuant to Rule 17a-6 ( 240.17a-6 of this chapter) to approve
record destruction plans and amendments thereto filed by a national
securities exchange or a national securities association.
(34) Pursuant to Rule 17d-2 ( 240.17d-2 of this chapter) to publish
notice of plans and plan amendments filed pursuant to Rule 17d-2 and to
approve such plans and plan amendments.
(35)(i) To grant exemptions from rule 13e-4 ( 240.13e-4 of this
chapter) pursuant to rule 13e-4(h)(7) ( 240.13e-4(h)(7) of this
chapter);
(ii) To determine with respect to a tender or exchange offer
otherwise eligible to be made pursuant to rule 13e-4(g) ( 240.13e-4(g)
of this chapter) whether, in light of any exemptive order granted by a
Canadian federal, provincial or territorial regulatory authority,
application of certain or all of the provisions of section 13(e)(1) and
rule 13e-4 and Schedule 13E-4 thereunder to such offer is necessary or
appropriate in the public interest.
(36) To grant exemptions from Rule 11Ac1-2 ( 240.11Ac1-2 of this
chapter), pursuant to Rule 11Ac1-2(g) ( 240.11Ac1-2(g) of this chapter).
(37) Pursuant to Rule 11Aa2-1, 17 CFR 240.11Aa2-1, to publish notice
of the filing of a designation plan with respect to national market
system securities, or any proposed amendment thereto, and to approve
such plan or amendment.
(38) To disclose:
(i) To the Comptroller of the Currency, the Board of Governors of the
Federal Reserve System, the Federal Deposit Insurance Corporation, and
the state banking authorities, information and documents deemed
confidential regarding registered clearing agencies and registered
transfer agents; and
(ii) To the Department of Treasury, information and documents deemed
confidential regarding possible laundering of money through or by
brokers or dealers, including compliance by brokers or dealers with the
Currency and Foreign Transactions Reporting Act of 1970, as amended.
(39) Pursuant to Rule 9b-1, (i) To enable distribution of an options
disclosure document or amendment to an options disclosure document to
the public prior to the time required in the Rule or to lengthen the
period before distribution can be made;
(ii) To require refiling of an amendment to an options disclosure
document pursuant to the procedure set forth in (b)(2)(a) of the rule.
(40) Pursuant to section 15B(b)(2)(B) of the Act, 15 U.S.C.,
78o-4(b), to review and, where appropriate, approve the selection by the
Municipal Securities Rulemaking Board (''Board'') of public
representatives to serve on the Board.
(41) Pursuant to Rule 6a-2(c) ( 240.6a-2 of this chapter) to exempt
registered national securities exchanges from the filing requirements
imposed by Rule 6a-2 with respect to certain affiliates and subsidiaries
of the exchange.
(42) To grant or deny exemptions from Rule 11Aa2-1 ( 240.11Aa2-1 of
this chapter), pursuant to Rule 11Aa2-1(f) ( 240.11Aa2-1(f) of this
chapter).
(43) To grant or deny exemptions from Rule 17Ad-14 ( 240.17Ad-14 of
this chapter), pursuant to Rule 17Ad-14(d) ( 240.17Ad-14(d) of this
chapter). (Pub. L. 87-592, 76 Stat. 394, 15 U.S.C 78d-1, 78d-2).
(44) To review, publish notice of, and where appropriate, approve
plans, and amendments to plans, submitted by self-regulatory
organizations pursuant to Rule 19d-1(c) under the Act ( 240.19d-1(c)).
(45) To grant exemptions from Rule 3b-9 under the Act. ( 240.3b-9(c)
of this chapter).
(46) Pursuant to section 15(b)(9) of the Act, 15 U.S.C. 78o(b)(9) to
review and, where appropriate, grant exemptions from the requirement of
section 15(b)(8) of the Act, 15 U.S.C. 78o(b)(8).
(47) Pursuant to section 15(a)(2) of the Act, 15 U.S.C. 78o(a)(2), to
review and, either unconditionally or on specified terms and conditions,
grant exemptions from the broker-dealer registration requirements of
section 15(a)(1) of the Act, 15 U.S.C. 78o(a)(1), to government
securities brokers or government securities dealers that have registered
with the Commission under section 15(a)(2) of the Act, 15 U.S.C.
78o^5(a)(2), solely with respect to effecting any transactions in, or
inducing or attempting to induce the purchase or sale of, any security
principally backed by a guaranty of the United States.
(48) Pursuant to paragraph (d) of Rule 15c2-12 (17 CFR 15c2-12), to
grant or deny exemptions, either unconditionally or on specified terms
and conditions, from Rule 15c2-12.
(49) Pursuant to section 11A(b) of the Act and Rule 11Ab2-1
thereunder (17 CFR 11Ab2-1), to publish notice of and, by order, grant
under section 11A(b) of the Act and Rule 11Ab2-1 thereunder:
Applications for registration as a securities information processor;
and exemptions from that section and any rules or regulations
promulgated thereunder, either conditionally or unconditionally.
(50) Pursuant to sections 17A(b) and 19(a) of the Act (15 U.S.C.
78q-1(b) and 78s(a)):
(i) To authorize the issuance of orders granting an extension to a
temporary clearing agency registration, for up to two years or such
longer period as the clearing agency consents.
(ii) To authorize the issuance of orders granting the withdrawal of
an application to become a registered clearing agency, at any time prior
to final determination of such application by the Commission, upon
submission of a request for such withdrawal by applicant.
(b) To designate officers empowered to administer oaths and
affirmations, subpoena witnesses, compel their attendance, take
evidence, and require the production of any books, papers,
correspondence, memoranda, contracts, agreements, or other records in
the course of investigations instituted by the Commission pursuant to
section 21(b) of the Securities Exchange Act of 1934 (15 U.S.C.
78u(b)).
(c) In nonpublic investigatory proceedings within the responsibility
of the Director or Deputy Director, to grant requests of persons to
procure copies of the transcript of their testimony given pursuant to
Rule 6 of the Commission's rules relating to investigations as in effect
subsequent to November 16, 1972 (17 CFR 203.6).
(d) To notify the Securities Investor Protection Corporation
(''SIPC'') of facts concerning the activities and the operational and
financial condition of any registered broker or dealer which is or
appears to be a member of SIPC and which is in or approaching financial
difficulty within the meaning of section 5 of the Securities Investor
Protection Act of 1970, as amended, 15 U.S.C. 78aaa, et seq.
(e) To determine whether, and issue orders regarding, proposals for
designation of a contract market for futures trading on an index or
group of securities meet the eligibility criteria set forth under
section 2(a)(1)(B)(ii) of the Commodity Exchange Act, 7 U.S.C. 2(a).
(f) With respect to the Securities Investor Protection Act of 1970,
as amended, 15 U.S.C. 78aaa, et. seq., pursuant to Section 3(a)(2)(B)
of the Securities Investor Protection Act of 1970, to (1) extend for a
period not exceeding 90 days from the date of the filing of the
determination by the Securities Investor Protection Corporation
(''SIPC'') that a registered broker-dealer is not a SIPC member because
it conducts its principal business outside the United States and its
territories and possessions, the period during which the Commission must
affirm, reverse or amend any determination by SIPC and (2) affirm such
determination filed by SIPC.
(g) Notwithstanding anything in the foregoing, in any case in which
the Director of the Division of Market Regulation believes it
appropriate, he may submit the matter to the Commission.
(37 FR 16795, Aug. 19, 1972)
Editorial Note: For Federal Register citations affecting 200.30-3
see the List of CFR Sections Affected in the Finding Aids section of
this volume.
17 CFR 200.30-4 Delegation of authority to Director of Division of
Enforcement.
Pursuant to the provisions of Pub. L. No. 100-181, 101 Stat. 1254,
1255 (15 U.S.C. 78d-1, 78d-2), the Securities and Exchange Commission
hereby delegates, until the Commission orders otherwise, the following
functions to the Director of the Division of Enforcement to be performed
by him or under his direction by such other person or persons as may be
designated from time to time by the Chairman of the Commission.
(a)(1) To designate officers empowered to administer oaths and
affirmations, subpena witnesses, compel their attendance, take evidence,
and require the production of any books, papers, correspondence,
memoranda, contracts, agreements, or other records in the course of
investigations instituted by the Commission pursuant to section 19(b) of
the Securities Act of 1933 (15 U.S.C. 77s(b)), section 21(b) of the
Securities Exchange Act of 1934 (15 U.S.C. 78u(b)), section 18(c) of
the Public Utility Holding Company Act of 1935 (15 U.S.C. 79r(c)),
section 42(b) of the Investment Company Act of 1940 (15 U.S.C.
80a-41(b)) and section 209(b) of the Investment Advisers Act of 1940 (15
U.S.C. 80b-9(b)).
(2) In nonpublic investigatory proceedings, within the responsibility
of the Director, to grant requests of persons to procure copies of the
transcript of their testimony given pursuant to Rule 6 of the
Commission's Rules Relating to Investigations as in effect subsequent to
November 16, 1972 (17 CFR 203.6).
(3) To terminate and close all investigations authorized by the
Commission pursuant to section 20 of the Securities Act of 1933 (15
U.S.C. 77t), section 21 of the Securities Exchange Act of 1934 (15
U.S.C. 78u), section 18 of the Public Utility Holding Company Act of
1935 (15 U.S.C. 79r), section 42 of the Investment Company Act of 1940
(15 U.S.C. 80a-41) and section 209 of the Investment Advisers Act of
1940 (15 U.S.C. 80b-9).
(4) To terminate the authority to administer oaths and affirmations,
subpoena witnesses, compel their attendance, take evidence, and require
the production of any books, papers, correspondence, memoranda,
contracts, agreements, or other records in the course of investigations
instituted by the Commission pursuant to section 19(b) of the Securities
Act of 1933 (15 U.S.C. 77s(b)), section 21(b) of the Securities Exchange
Act of 1934 (15 U.S.C. 78u(b)), section 18(c) of the Public Utility
Holding Company Act of 1935 (15 U.S.C. 79r(c)), section 42(b) of the
Investment Company Act of 1940 (15 U.S.C. 80a-41(b)) and section 209(b)
of the Investment Advisers Act of 1940 (15 U.S.C. 80b-9(b)).
(5) To grant or deny applications made pursuant to Rule 29 of the
Commission's Rules of Practice (17 CFR 201.1-201.29), provided, that, in
the event of a denial, the applicant shall be notified that such a
denial may be appealed to the Commisson for review.
(6) To notify the Securities Investor Protection Corporation
(''SIPC'') of facts concerning the activities and the operational and
financial condition of any registered broker or dealer which is or
appears to be a member of SIPC and which is in or approaching financial
difficulty within the meaning of section 5 of the Securities Investor
Protection Act of 1970, as amended, 15 U.S.C. 78aaa, et seq.
(7) To grant requests for access to, or copies of, materials in the
Commission's enforcement and regulatory files upon written request for
such access submitted by domestic and foreign governmental authorities,
foreign securities authorities, self-regulatory organizations,
receivers, special counsels, and other similar persons appointed in
Commission litigation, the Securities Investor Protection Corporation,
trustees and counsel for trustees appointed pursuant to section 5(b) of
the Securities Investor Protection Act, and trustees in bankruptcy;
Provided That requests for access to, or copies of, materials in the
Commission's regulatory files shall be granted only with the concurrence
of the head of the Commission division or office responsible for such
files or his or her delegate.
(8) Pursuant to Rule 204-2(j)(3)(ii) ( 275.204-2(j)(3)(ii) of this
chapter) under the Investment Advisers Act of 1940 (15 U.S.C. 80b-1, et
seq.), to make written demands upon non-resident investment advisers
subject to the provisions of such rule to furnish to the Commission
true, correct, complete and current copies of any or all books and
records which such non-resident investment advisers are required to
make, keep current or preserve pursuant to any provision of any rule or
regulation of the Commission adopted under the Investment Advisers Act
of 1940, or any part of such books and records which may be specified in
any such demand.
(b) Notwithstanding anything in the foregoing, in any case in which
the Director of the Division of Enforcement believes it appropriate, he
may submit the matter to the Commission.
(37 FR 16796, Aug. 19, 1972, as amended at 37 FR 25166, Nov. 28,
1972; 40 FR 14748, Apr. 2, 1975; 44 FR 22716, Apr. 17, 1979; 44 FR
50835, Aug. 30, 1979; 44 FR 76774, Dec. 28, 1979; 45 FR 7781, Feb. 5,
1980; 47 FR 26822, June 22, 1982; 49 FR 12206, Mar. 29, 1984; 52 FR
12148, Apr. 15, 1987; 54 FR 24331, June 7, 1989)
17 CFR 200.30-5 Delegation of authority to Director of Division of
Investment Management.
Pursuant to the provisions of Pub. L. 87-592, 76 Stat. 394 (15
U.S.C. 78d-1, 78d-2), the Securities and Exchange Commission hereby
delegates, until the Commission orders otherwise, the following
functions to the Director of the Division of Investment Management, to
be performed by him or under his direction by such person or persons as
may be designated from time to time by the Chairman of the Commission:
(a) With respect to the Investment Company Act of 1940 (15 U.S.C.
80a-1, et seq.):
(1) To issue notices, pursuant to Rule 0-5(a) ( 270.0-5(a) of this
chapter), with respect to applications for orders under the following
sections of the Act and the rules and regulations promulgated thereunder
and, with respect to section 8(f) (15 U.S.C. 80a-8(f)) of the Act, in
cases where no application has been filed, where, upon examination, the
matter does not appear to him to present issues not previously settled
by the Commission or to raise questions of fact or policy indicating
that the public interest or the interest of investors requires that a
hearing be held:
(i) Section 3(b)(2), 15 U.S.C. 80a-3(b)(2).
(ii) Section 6(b), 15 U.S.C. 80a-6(b).
(iii) Section 6(c), 15 U.S.C. 80a-6(c).
(iv) Section 6(d), 15 U.S.C. 80a-6(d).
(v) Section 6(e), 15 U.S.C. 80a-6(e).
(vi) Section 7(d), 15 U.S.C. 80a-7(d).
(vii) Section 8(f), 15 U.S.C. 80a-8(f).
(viii) Section 10(e), 15 U.S.C. 80a-10(e).
(ix) Section 10(f), 15 U.S.C. 80a-10(f).
(x) Section 11(a), 15 U.S.C. 80a-11(a).
(xi) Section 12(g), 15 U.S.C. 80a-12(g).
(xii) Section 16(a), 15 U.S.C. 80a-16(a).
(xiii) Section 17(b), 15 U.S.C. 80a-17(b).
(xiv) Section 17(d), 15 U.S.C. 80a-17(d).
(xv) Section 17(e), 15 U.S.C. 80a-17(e).
(xvi) Section 17(f), 15 U.S.C. 80a-17(f).
(xvii) Section 17(g), 15 U.S.C. 80a-17(g).
(xviii) Section 18(j), 15 U.S.C. 80a-18(j).
(xix) Section 23(b), 15 U.S.C. 80a-23(b).
(xx) Section 23(c), 15 U.S.C. 80a-23(c).
(xxi) Section 26(b), 15 U.S.C. 80a-26(b).
(xxii) Section 28(c), 15 U.S.C. 80a-28(c).
(xxiii) Section 31(d), 15 U.S.C. 80a-30(d).
(xxiv) Section 32(c), 15 U.S.C. 80a-31(c).
(xxv) Section 45(a), 15 U.S.C. 80a-44(a).
(xxvi) Section 57(c), 15 U.S.C. 80a-56(c).
(xxvii) Section 57(j), 15 U.S.C. 80a-56(j).
(xxviii) Section 57(k), 15 U.S.C. 80a-56(k).
(xxix) Section 57(n), 15 U.S.C. 80a-56(n).
(xxx) Section 61(a)(3), 15 U.S.C. 80a-60(a)(3).
(2) To authorize the issuance of orders where a notice, pursuant to
Rule 0-5(a), ( 270.0-5(a) of this chapter), has been issued and no
request for a hearing has been received from any interested person
within the period specified in the notice and the matter involved
presents no issue that he believes has not been previously settled by
the Commission and it does not appear to him to be necessary in the
public interest or the interest of investors that a hearing be held
(section 40(a) of the Act, 15 U.S.C. 80a-39(a));
(3) To permit the withdrawal of applications pursuant to the Act (15
U.S.C. 80a-1, et seq.)
(4) In connection with the mailing of reports to stockholders and the
filing with the Commission of registration statements and of reports:
(i) To grant reasonable extensions of time, upon a showing of good
cause and that it would not be contrary to the public interest or
inconsistent with the protection of investors; and
(ii) To deny requests for extensions of time, provided the applicant
is advised that he can request Commission review of any such denial.
(5) To permit, pursuant to Rule 20a-2(a)(9) ( 270.20a-2(a)(9) of this
chapter), the omission from a proxy statement of a registered investment
company of the certification of the balance sheet of the investment
adviser of such investment company and, if the investment adviser is
primarily engaged in a business other than the underwriting or
distribution of investment company securities or the performance of
advisory services to registered investment companies, to permit the
summarization or omission of such balance sheet.
(6) To authorize the issuance of orders granting confidential
treatment pursuant to section 45(a) of the Act (15 U.S.C. 80a-44(a))
where applications for confidential treatment are made regarding matters
of disclosure in registration statements filed pursuant to section 8 of
the Act (15 U.S.C. 80a-8), or in reports filed pursuant to section 30 of
the Act (15 U.S.C. 80a-29), but only when the Commission has previously
by order granted confidential treatment to the same information.
(7) To adjust the filing date of a filing submitted in an electronic
format where the acceptance of the filing is delayed because of
equipment malfunction or technical problem.
(8) To issue notices, pursuant to Rule 0-5(a) ( 270.0-5(a) of this
chapter) with respect to applications for temporary and permanent orders
under section 9(c) of the Investment Company Act of 1940 (15 U.S.C.
80a-9(c)), and to conditionally or unconditionally exempt persons, for a
temporary period not exceeding 60 days, from section 9(a) of the
Investment Company Act of 1940 (15 U.S.C. 80a-9(a)), if, on the basis of
the facts then set forth in the application, it appears that:
(i)(A) The prohibitions of section 9(a), as applied to the applicant,
may be unduly or disproportionately severe, or (B) the applicant's
conduct has been such as not to make it against the public interest or
the protection of investors to grant the temporary exemption; and
(ii) Granting the temporary exemption would protect the interests of
the investment companies being served by the applicant by allowing time
for the orderly consideration of the application for permanent relief or
the orderly transition of the applicant's responsibilities to a
successor, or both.
(9) To issue --
(i) Notices, pursuant to Rule 0-5(a) ( 270.0-5(a) of this chapter),
with respect to applications for permanent orders under section 9(c) of
the Act (15 U.S.C. 80a-9(c)), and, orders, pursuant to paragraph (a)(2)
of this section, that exempt conditionally or unconditionally persons
from section 9(a) of the Act (15 U.S.C. 80a-9(a)), if, on the basis of
the facts then set forth in the application, it appears that:
(A) The prohibitions of section 9(a) of the Act, as applied to the
applicant, may be unduly or disproportionately severe, or the
applicant's conduct has been such as not to make it against the public
interest or the protection of investors to grant the exemption;
(B) The prohibitions arise under section 9(a)(3) of the Act solely
because the applicant employs, or will employ, a person who is
disqualified under section 9(a) (1) or (2) of the Act; and,
(C) The employee does not and will not serve in any capacity directly
related to providing investment advice to, or acting as depositor for,
any registered investment company, or acting as principal underwriter
for any registered open-end company, registered unit investment trust or
registered face amount certificate company.
(ii) Temporary orders under section 9(c) of the Act (15 U.S.C.
80a-9(c)), exempting conditionally or unconditionally persons from
section 9(a) of the Act (15 U.S.C. 80a-9(a)), if, on the basis of the
application, it appears that:
(A) The prohibitions arise under section 9(a)(3) of the Act solely
because the applicant employs a person who is disqualified under section
9(a) (1) or (2) of the Act; and
(B) Applicant meets the requirements of paragraphs (a)(9)(i) (A) and
(C) of this section.
(b) With respect to matters pertaining to investment companies
registered under the Investment Company Act of 1940, pooled investment
funds or accounts, and the general assets or separate accounts of
insurance companies, all arising under the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Trust Indenture Act of 1939, the
same functions as are delegated to the Director of the Division of
Corporation Finance in regard to companies other than such registered
investment companies in paragraphs (a), (e) and (f) of Article 30-1 (
200.30-1 of this chapter) of these articles.
(b-1) With respect to the Securities Act of 1933. (1) To issue
notices with respect to applications for orders under section 3(a)(2)
exempting from section 5 interests or participations issued in
connection with stock bonus, pension, profit-sharing, or annuity plans
covering employees some or all of whom are employees within the meaning
of section 401(c)(1) of the Internal Revenue Code of 1954 where, upon
examination, the matter does not appear to him to present issues not
previously settled by the Commission or to raise questions of fact or
policy indicating that the public interest or the interest of investors
requires that a hearing be held.
(2) To authorize the issuance of orders where a notice has been
issued and no request for a hearing has been received from any
interested person within the period specified in the notice and the
matter involved presents no issue that he believes has not been settled
previously by the Commission and it does not appear to him to be
necessary in the public interest or the interest of investors that a
hearing be held.
(b-2) With respect to post-effective amendments filed pursuant to
paragraph (a) of Rule 485 under the Act (17 CFR 230.485(a)) and
post-effective amendments filed pursuant to paragraph (a) of Rule 486
under the Act (17 CFR 230.486(a)):
(1) To suspend the operation of said paragraphs and to issue written
notices to registrants of such suspensions;
(2) To determine such amendments to be effective within shorter
periods of time than the sixtieth day after the filing thereof.
(b-3) With respect to registration statements filed pursuant to
paragraph (a) of Rule 487 under the Act (17 CFR 230.487(a)):
(1) To suspend the operation of said paragraph (a) and to issue
written notices to registrants of such suspensions.
(b-4) With respect to registration statements filed pursuant to
paragraph (a) of rule 488 under the Act (17 CFR 230.488(a)):
(1) To suspend the operation of said paragraphs and to issue written
notices to registrants of such suspensions;
(2) To determine such amendments to be effective within shorter
periods of time than the thirtieth day after the filing thereof.
(c) With respect to the Securities Act of 1933 and Regulation E
thereunder ( 230.601, et seq. of this chapter):
(1) To authorize the offering of securities:
(i) Less than ten days subsequent to the filing with the Commission
of a notification on Form 1-E ( 239.200 of this chapter) pursuant to
Rule 604(a) ( 230.604(a) of this chapter);
(ii) Less than ten days subsequent to the filing of an amendment to a
notification on Form 1-E ( 239.200 of this chapter) pursuant to Rule
604(c) ( 230.604(c) of this chapter).
(2) To authorize the use of a revised or amended offering circular
less than ten days subsequent to the filing thereof pursuant to Rule
605(e) ( 230.605(e) of this chapter).
(3) To authorize the use of communications specified in paragraphs
(a), (b) and (c) of Rule 607 ( 230.607 of this chapter), less than five
days subsequent to the filing thereof.
(4) To permit the withdrawal of any notification, or any exhibit or
other documents filed as a part thereof, pursuant to Rule 604(d) (
230.604(d) of this chapter).
(c-1) With respect to the Securities Exchange Act of 1934: (1) To
grant and deny applications filed pursuant to section 24(b) of the
Securities Exchange Act of 1934 (15 U.S.C. 78x(b)) and Rule 24b-2
thereunder ( 240.24b-2 of this chapter) for confidential treatment of
information filed pursuant to section 13(f) of that Act (15 U.S.C.
78m(f)) and Rule 13f-1 thereunder ( 240.13f-1 of this chapter); and
(2) To revoke a grant of confidential treatment for any such
application.
(d) To issue certifications to investment companies which are
principally engaged in the furnishing of capital to other corporations
which are principally engaged in the development or exploitation of
inventions, technological improvements, new processes, or products not
previously generally available, pursuant to section 851(e) of the
Internal Revenue Code of 1954 (26 U.S.C. 851(e)), where applications
from such companies do not present issues not previously settled by the
Commission and do not require a hearing.
(e) With respect to the Investment Advisers Act of 1940 (15 U.S.C.
80b-1, et seq.):
(1) Pursuant to section 203(c) of the Act (15 U.S.C. 80b-3(c)): To
authorize the issuance of orders granting registration of investment
advisers within 45 days of the filing of an application for registration
as an investment adviser (or within such longer period as to which the
applicant consents).
(2) Pursuant to section 203(h) of the Act (15 U.S.C. 80b-3(h)), to
authorize the issuance of orders canceling registration of investment
advisers, or applications for registration, if such investment advisers
or applicants for registration are no longer in existence or are not
engaged in business as investment advisers.
(3) To issue notices, pursuant to Rule 0-5(a) ( 275.0-5(a) of this
chapter), with respect to applications for orders under the following
sections of the Act and the rules and regulations promulgated
thereunder, where, upon examination, the matter does not appear to him
to present issues not previously settled by the Commission or to raise
questions of fact or policy indicating that the public interest or the
interest of investors requires that a hearing be held:
(i) Section 202(a)(11)(F), 15 U.S.C. 80b-2(a)(11)(F).
(ii) Section 206A, 15 U.S.C. 80b-6a.
(4) To authorize the issuance of orders where a notice, pursuant to
Rule 0-5(a) ( 275.0-5(a) of this chapter), has been issued and no
request for a hearing has been received from any interested person
within the period specified in the notice and the matter involved
presents no issue that he believes has not been previously settled by
the Commission and it does not appear to him to be necessary in the
public interest or the interest of investors that a hearing be held
(section 211(c) of the Act, 15 U.S.C. 80b-11(c)).
(5) To permit the withdrawal of applications pursuant to the Act (15
U.S.C. 80b-1, et seq.).
(6) Pursuant to Rule 204-2(j)(3)(ii) ( 275.204-2(j)(3)(ii) of this
chapter), to make written demands upon non-resident investment advisers
subject to the provisions of such rule to furnish to the Commission
true, correct, complete and current copies of any or all books and
records which such non-resident investment advisers are required to
make, keep current or preserve pursuant to any provision of any rule or
regulation of the Commission adopted under the Act, or any part of such
books and records which may be specified in any such demand.
(f) With respect to the Public Utility Holding Company Act of 1935
(15 U.S.C. 79 et seq.):
(1) To issue notices with respect to applications or declarations
under the following sections of the Act:
(i) Section 2(a)(3), 15 U.S.C. 79(b)(a)(3).
(ii) Section 2(a)(4), 15 U.S.C. 79b(a)(4).
(iii) Section 2(a)(7), 15 U.S.C. 79b(a)(7).
(iv) Section 2(a)(8), 15 U.S.C. 79b(a)(8).
(v) Section 3(a), 15 U.S.C. 79c(a).
(vi) Section 3(b), 15 U.S.C. 79c(b).
(vii) Section 5(d), 15 U.S.C. 79e(d).
(viii) Section 6(b), 15 U.S.C. 79f(b).
(ix) Section 7, 15 U.S.C. 79g.
(x) Section 9(c)(3), 15 U.S.C. 79i(c)(3).
(xi) Section 10, 15 U.S.C. 79j.
(xii) Section 11(e), 15 U.S.C. 79k(e).
(xiii) Section 12(b), 15 U.S.C. 79l(b).
(xiv) Section 12(c), 15 U.S.C. 79l(c).
(xv) Section 12(d), 15 U.S.C. 79l(d).
(xvi) Section 12(e), 15 U.S.C. 79l(e).
(xvii) Section 12(f), 15 U.S.C. 79l(f).
(xviii) Section 12(g), 15 U.S.C. 79l(g).
(xix) Section 13(b), 15 U.S.C. 79m(b).
(xx) Section 13(c), 15 U.S.C. 79m(c).
(xxi) Section 13(d), 15 U.S.C. 79m(d).
(xxii) Section 13(e), 15 U.S.C. 79m(e).
(xxiii) Section 13(f), 15 U.S.C. 79m(f).
(2) To authorize the issuance of orders where a notice has been
issued and no request for a hearing has been received from any
interested person within the period specified in the notice and the
matter involved presents no issue that the director believes has not
previously been settled by the Commission and it does not appear to the
director to be necessary in the public interest or the interest of
investors or consumers that a hearing be held; section 20(c) of the Act
(15 U.S.C. 79t(c));
(3) To permit the withdrawal of applications or declarations filed
pursuant to the Act (15 U.S.C. 79a, et seq.);
(4) Upon a showing of good cause and that it would not be contrary to
the public interest or inconsistent with the protection of investors or
consumers, to grant reasonable extensions of time with respect to the
time for the filing with the Commission of registration statements and
of reports pursuant to section 20(a) of the Act (15 U.S.C. 79t(a)) and
Rules 1(b), 1(c), 2, 24, and 29 ( 250.1(b), 250.1(c), 250.2, 250.4, and
250.29 of this chapter) thereunder;
(5) To issue notices and grant applications by a holding company or
any subsidiary company thereof, under section 3(c) of the Act (15 U.S.C.
79c(c)), for revocation of previously granted exemptions from
registration, unless, upon examination, the application appears to the
director to present issues not previously settled by the Commission or
to raise questions of fact or policy indicating that the public interest
of investors or consumers requires that a hearing be held;
(6) To permit the filing of preliminary registration statements
pursuant to section 5(c) of the Act (15 U.S.C. 79e(c));
(7) To authorize the destruction of records pursuant to the
provisions of General Instruction 1(f) ( 257.1(f) of this chapter) to
the Appendix of the Uniform System of Accounts for Public Utility
Holding Companies ( 257.1, et seq. of this chapter) and pursuant to
provisions of General Requirement 1(e) ( 256a.0-1(e) of this chapter) of
the Uniform System of Accounts for Mutual Service Companies and
Subsidiary Service Companies ( 256.00-1, et seq., of this chapter);
(8) To authorize the discontinuance of reporting of information
otherwise required to be reported under sections 5(b), 13(c), 13(e),
13(f), 14, and 20(a) of the Act (15 U.S.C. 79e(b), 79m(c), 79m(e),
79m(f), 79n, 79t(a));
(9) To grant extensions of time for filing registration statements
and reports pursuant to sections 5(b), 13(c), 13(d), 13(f), 14, and
20(a) of the Act (15 U.S.C. 79e(b), 79m(c), 79m(d), 79m(f), 79n,
79t(a)).
(10) To adjust the filing date of a filing submitted in an electronic
format where the acceptance of the filing is delayed because of
equipment malfunction or technical problem.
(g) To designate officers empowered to administer oaths and
affirmations, subpoena witnesses, compel their attendance, take
evidence, and require the production of any books, papers,
correspondence, memoranda, contracts, agreements, or other records in
the course of investigations instituted by the Commission pursuant to
section 209(b) of the Investment Advisers Act of 1940 (15 U.S.C.
80b-9(b)), section 42(b) of the Investment Company Act of 1940 (15
U.S.C. 80a-41(b)), section 19(b) of the Securities Act of 1933 (15
U.S.C. 77s(b)), section 21(b) of the Securities Exchange Act of 1934 (15
U.S.C. 78u(b)), section 8(e) of the Securities Act of 1933 (15 U.S.C.
77h(e)), and section 18(c) of the Public Utility Holding Company Act of
1935 (15 U.S.C. 79r(c)).
(h) In nonpublic investigatory proceedings within the responsibility
of the Director, to grant requests of persons to procure copies of the
transcript of their testimony given pursuant to Rule 6 of the
Commission's Rules Relating to Investigations as in effect subsequent to
November 16, 1972 ( 203.6 of this chapter).
(i) Notwithstanding anything in the foregoing:
(1) The Director of the Division of Investment Management shall have
the same authority with respect to the Securities Act of 1933 (15 U.S.C.
77a, et seq.), Regulation A (17 CFR 230.251, et seq.) and Regulation F
(17 CFR 230.651, et seq.) as that delegated to each Regional
Administrator in paragraphs (b)(1), (b)(2) and (b)(3), and in paragraphs
(c) and (f) of Article 30-6 of the Commission's Statement of
Organization, Conduct and Ethics, and Information and Requests (17 CFR
200.30-6).
(2) In any case in which the Director of the Division of Investment
Management believes it appropriate, he may submit the matter to the
Commission.
(Pub. L. 91-567, 84 Stat. 1497 (15 U.S.C. 77c(a)(2)); Pub. L.
87-592, 76 Stat. 394, as amended by Pub. L. 94-29, 89 Stat. 163 (15
U.S.C. 78d-1, 78d-2); (15 U.S.C. 80a-44, 80b-11(a)); secs. 6, 7, 8,
10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209, 48 Stat. 906, 908;
sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685; sec. 308(a)(2), 90 Stat.
57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48 Stat. 882, 892, 894, 895,
901; secs. 203(a), 1, 3, 8, 49 Stat. 704, 1375, 1377, 1379; sec. 202,
68 Stat. 686; secs. 4, 5, 6(d), 78 Stat. 569, 570-574; secs. 1, 2, 3,
82 Stat. 454, 455; secs. 28(c), 1, 2, 3, 4, 5, 84 Stat. 1435, 1497;
sec. 105(b), 88 Stat. 1503; secs. 8, 9, 10, 89 Stat. 117, 118, 119;
sec. 308(b), 90 Stat 57; sec. 18, 89 Stat. 155; secs. 202, 203, 204,
91 Stat. 1494, 1498-1500; sec. 20(a), 49 Stat. 833; sec. 319, 53
Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C. 77f, 77g, 77h, 77j,
77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 79t(a), 77sss(a), 80a-37;
15 U.S.C. 78d-1, 78d-2)
(41 FR 29376, July 16, 1976)
Editorial Note: For Federal Register citations affecting 200.30-5
see the List of CFR Sections Affected in the Finding Aids section of
this volume.
17 CFR 200.30-6 Delegation of authority to Regional Administrators.
Pursuant to the provisions of Pub. L. 87-592, 76 Stat. 394, the
Securities and Exchange Commission hereby delegates, until the
Commission orders otherwise, the following functions to each Regional
Administrator, to be performed by him or under his direction by such
person or persons as may be designated from time to time by the Chairman
of the Commission:
(a) With respect to registration of securities on Form S-18 ( 239.28
of this chapter) pursuant to the Securities Act of 1933 (15 U.S.C. 77a
et seq.), and Regulation C thereunder ( 230.400 et seq. of this
chapter):
(1) To determine the effective dates of amendments filed pursuant to
section 8(c) of the Act (15 U.S.C. 77h(c)).
(2) To consent to the withdrawal of registration statements or
amendments or exhibits thereto, pursuant to Rule 477 ( 230.477 of this
chapter), and to issue orders declaring registration statements
abandoned, pursuant to Rule 479 ( 230.479 of this chapter).
(3) To grant applications for confidential treatment of contract
provisions pursuant to Rule 406 ( 230.406 of this chapter) under the
Act; to issue orders scheduling hearings on such application and to
deny any such application as to which the applicant waives his right to
a hearing, provided such applicant is advised of his right to have such
denial reviewed by the Commission.
(4) To take the following action pursuant to section 8(a) of the Act
(15 U.S.C. 77j(a)):
(i) To determine registration statements to be effective within
shorter periods of time than 20 days after the filing thereof;
(ii) To consent to the filing of amendments prior to the effective
dates of registration statements as part thereof, or to determine that
amendments filed prior to the effective dates of registration statements
have been filed pursuant to orders of the Commission, so as to be
treated as parts of the registration statements for the purpose of
section 8(a) of the Act (15 U.S.C. 77h(a));
(iii) To determine to be effective applications for qualifications of
trust indentures filed with registration statements.
(b) With respect to the Securities Act of 1933, 15 U.S.C. 77a et seq.
and Regulation A thereunder, 230.251 et seq. of this chapter:
(1) To authorize the offering of securities:
(i) Less than ten days subsequent to the filing with the Regional
Office of notification on Form 1-A, pursuant to Rule 255(a), 230.255(a)
of this chapter, or
(ii) Less than ten days subsequent to the filing of an amendment to a
notification on Form 1-A, pursuant to Rule 255(d), 230.255(d) of this
chapter or Rule 256(f), 230.256(f) of this chapter;
(2) To authorize the use of sales material less than five days
subsequent to its filing with the Regional Office pursuant to Rule 258,
230.258 of this chapter;
(3) To permit the furnishing of financial statements as of dates
earlier than 90 days prior to the filing of notifications, but not
exceeding six months, pursuant to Item 11(a)(1) of Schedule I and Rule
256 and Rule 257, 230.256 and 230.257 of this chapter;
(4) To issue orders declaring notifications on Form 1-A 239.90 of
this chapter) abandoned pursuant to Rule 264 ( 230.264 of this chapter).
(c) With respect to the Securities Act of 1933, 15 U.S.C. 77a et seq.
and Regulation F thereunder, 230.652, et seq. of this chapter:
(1) To authorize the offering of securities less than ten days
subsequent to the filing with the Regional Office of notification on
Form 1-F, pursuant to Rule 652, 230.652 of this chapter;
(2) To authorize the use of sales material less than ten days
subsequent to its filing with the Regional Office pursuant to Rule 654,
230.654 of this chapter;
(d) With respect to the Securities Exchange Act of 1934, 15 U.S.C.
78 et seq.:
(1) Pursuant to Rule 17a-5(a) ( 240.17a-5(a) of this chapter) and
Rule 17a-5(d) ( 240.17a-5(d) of this chapter):
(i) To consider applications by brokers and dealers for extensions of
time within which to file reports required by Rule 17a-5 ( 240.17a-5 of
this chapter) and to grant or to deny such applications: Provided, Such
applicant is advised of his right to have such denial reviewed by the
Commission; and
(ii) To grant or deny requests by brokers and dealers for the
approval of a change of date for the annual audited reports required by
Rule 17a-5 ( 240.17a-5 of this chapter) where the report will not be as
of a date more than 15 months from the date as of which the last
preceding annual audited report was prepared: Provided, Such applicant
is advised of his right to have such denial reviewed by the Commission.
(2) Pursuant to section 15(b)(2)(C) of the Act (15 U.S.C.
78o(b)(2)(C)):
(i) To delay until the second six month period from registration with
the Commission, the inspection of newly registered broker-dealers that
have not commenced actual operations within six months of their
registration with the Commission; and
(ii) To delay until the second six month period from registration
with the Commission, the inspection of newly registered broker-dealers
to determine whether they are in compliance with applicable provisions
of the Act and rules thereunder, other than financial responsibility
rules.
(3) Pursuant to Rule 0-4 ( 240.0-4 of this chapter), to disclose to
the Comptroller of the Currency, the Board of Governors of the Federal
Reserve System and the Federal Deposit Insurance Corporation and to the
state banking authorities, information and documents deemed confidential
regarding registered clearing agencies and registered transfer agents;
Provided That, in matters in which the Commission has entered a formal
order of investigation, such disclosure shall be made only with the
concurrence of the Director of the Division of Enforcement or his or her
delegate, and the General Counsel or his or her delegate.
(e) With respect to the Investment Advisers Act of 1940, 15 U.S.C.
80b-1, et seq.: Pursuant to Rule 204-2(j)(3)(ii) ( 275.204-2(j)(3)(ii)
of this chapter), to make written demands upon non-resident investment
advisers subject to the provisions of such rule to furnish to the
Commission true, correct, complete and current copies of any or all
books and records which such non-resident investment advisers are
required to make, keep current or preserve pursuant to any provision of
any rule or regulation of the Commission adopted under the Investment
Advisers Act of 1940, or any part of such books and records which may be
specified in any such demand.
(f) In nonpublic investigatory proceedings within the responsibility
of the Regional Administrator, to grant requests of persons to procure
copies of the transcript of their testimony given pursuant to Rule 6 of
the Commission's rules relating to investigations as in effect
subsequent to November 16, 1972 (17 CFR 203.6).
(g) To notify the Securities Investor Protection Corporation
(''SIPC'') of facts concerning the activities and the operational and
financial condition of any registered broker or dealer which is or
appears to be a member of SIPC and which is in or approaching financial
difficulty within the meaning of section 5 of the Securities Investor
Protection Act of 1970, as amended, 15 U.S.C. 78aaa, et seq.
(h) Notwithstanding anything in the foregoing, in any case in which
the Regional Administrator believes it appropriate, he may submit the
matter to the Commission.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37; secs. 3(b), 19(a), 48 Stat. 75, 85; sec.
209, 48 Stat. 908; c. 122, 59 Stat. 167; Pub. L. 91-565, 84 Stat.
1480; 15 U.S.C. 77c(b), 77s(a), 78d-1, 78n, 80a-37; secs. 2, 17 and 23
thereof (15 U.S.C. 78b, 78q and 78w))
(28 FR 2856, Mar. 22, 1963, as amended at 36 FR 7659, Apr. 23, 1971.
Redesignated at 37 FR 16792, Aug. 19, 1972)
Editorial Note: For Federal Register citations affecting 200.30-6
see the List of CFR Sections Affected in the Finding Aids section of
this volume.
17 CFR 200.30-7 Delegation of authority to Secretary of the Commission.
Pursuant to the provisions of Pub. L. 87-592, 76 Stat. 394 (15
U.S.C. 78d-1), the Securities and Exchange Commission hereby delegates,
until the Commission orders otherwise, the following functions to the
Secretary of the Commission to be performed by him or under his
direction by such person or persons as may be designated from time to
time by the Chairman of the Commission:
(a) With respect to proceedings conducted pursuant to the Securities
Act of 1933, 15 U.S.C. 77a et seq. , the Securities Exchange Act of
1934, 15 U.S.C. 78a et seq. , the Public Utility Holding Company Act of
1935, 15 U.S.C. 79a et seq. , the Trust Indenture Act of 1939, 15 U.S.C.
77aaa et seq. , the Investment Company Act of 1940, 15 U.S.C. 80a-1 et
seq. , and the Investment Advisers Act of 1940, 15 U.S.C. 80b-1 et seq.:
(1) To fix the time and place for hearings and oral arguments before
the Commission pursuant to Rule 21(a) of the Commission's rules of
practice, 201.21(a) of this chapter;
(2) In appropriate cases to extend and reallocate the time prescribed
in Rule 21(b) of the Commission's rules of practice, 201.21(b) of this
chapter;
(3) To postpone or adjourn hearings or otherwise adjust the date for
commencement of hearings before the Commission pursuant to Rule 13 of
the Commission's rules of practice, 201.13 of this chapter, and to
advance such hearings;
(4) To grant extensions of time within which to file papers before
the Commission pursuant to Rule 13 of the Commission's rules of
practice, 201.13 of this chapter;
(5) To permit the filing of briefs with the Commission exceeding 60
pages in length, pursuant to Rule 22(d) of the Commission's rules of
practice, 201.22(d) of this chapter;
(6) To certify records of proceedings upon which are entered orders
the subject of review in courts of appeals pursuant to section 9 of the
Securities Act of 1933, 15 U.S.C. 77i, section 25 of the Securities
Exchange Act of 1934, 15 U.S.C. 78y, section 24 of the Public Utility
Holding Company Act of 1935, 15 U.S.C. 79x, section 322(a) of the Trust
Indenture Act of 1939, 15 U.S.C. 77vvv, section 43 of the Investment
Company Act of 1940, 15 U.S.C. 80a-42, and section 213 of the Investment
Advisers Act of 1940, 15 U.S.C. 80b-13;
(7) Except where the Commission otherwise directs, to issue findings
and orders pursuant to offers of settlement which the Commission has
determined should be accepted;
(8) To issue findings and orders taking the remedial action described
in the order for proceedings where a respondent expressly consents to
such action, fails to appear, or defaults in the filing of an answer
required to be filed and to grant a request, based upon a showing of
good cause, to vacate an order or default, so as to permit presentation
of a defense;
(9) To designate officers of the Commission to serve notices of and
orders for proceedings and decisions and orders in such proceedings, the
service of which is required by rules 6 and 23 of the Commission's rules
of practice.
(b) To order the making of private investigations pursuant to section
21(a) of the Securities Exchange Act of 1934, on request of the Division
of Corporation Finance or the Division of Enforcement, with respect to
proxy contests subject to section 14 of that Act and regulation 14A
thereunder, and tender offers filed pursuant to section 14(d) of the
Act.
(c) Notwithstanding anything in the foregoing, in any case in which
the Secretary of the Commission believes it appropriate he or she may
submit the matter to the Commission.
(15 U.S.C. 78d, 78d-1, 78d-2)
(35 FR 17989, Nov. 24, 1970. Redesignated at 37 FR 16792, Aug. 19,
1972, and amended at 38 FR 12913, May 17, 1973; 40 FR 46107, Oct. 6,
1975; 43 FR 13377, Mar. 30, 1978)
200.30-8 (Reserved)
17 CFR 200.30-9 Delegation of authority to hearing officers.
Pursuant to the provisions of Pub. L. 87-592, 76 Stat. 394 (15
U.S.C. ties and Exchange Commission hereby delegates, until the
Commission orders otherwise, to each hearing officer the authority to
make an initial decision in any proceeding at which he presides in which
a hearing is required to be conducted in conformity with section 7 of
the Administrative Procedure Act unless such initial decision is waived
by all parties who appear at the hearing and the Commission does not
subsequently order that an initial decision nevertheless be made by the
hearing officer, and in any other proceeding in which the Commission
directs him to make such a decision.
(Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 78d-1, 78d-2)
(29 FR 9487, July 11, 1964. Redesignated at 37 FR 16792, Aug. 19,
1972)
17 CFR 200.30-10 Delegation of authority to Chief Administrative Law
Judge.
Pursuant to the provisions of Pub. L. 87-592, 76 Stat. 394 (15
U.S.C. 78d-1), the Securities and Exchange Commission hereby delegates,
until the Commission orders otherwise, the following functions to the
Chief Administrative Law Judge or to such administrative law judge or
administrative law judges as may be designated by the Chief
Administrative Law Judge in his absence, or as otherwise designated by
the Chairman of the Commission in the absence of the Chief
Administrative Law Judge:
(a) With respect to proceedings conducted before an administrative
law judge, pursuant to the Securities Act of 1933, 15 U.S.C. 77a et
seq., the Securities Exchange Act of 1934, 15 U.S.C. 78a et seq., the
Public Utility Holding Company Act of 1935, 15 U.S.C. 79a et seq., the
Trust Indenture Act of 1939, 15 U.S.C. 77aaa et seq., the Investment
Company Act of 1940, 15 U.S.C. 80a-1 et seq., and the Investment
Advisers Act of 1940, 15 U.S.C. 80b-1 et seq.:
(1) After a proceeding has been authorized, to fix the time and place
for hearing pursuant to Rule 6(b) of the Commission's rules of practice,
201.6(b) of this chapter, and Rule 11(a) of the Commission's rules of
practice ( 201.11(a) of this chapter);
(2) To designate administrative law judges pursuant to Rule 11(b) of
the Commission's rules of practice ( 201.11(b) of this chapter);
(3) To postpone or adjourn hearings or otherwise adjust the date for
commencement of hearings pursuant to Rule 13 of the Commission's rules
of practice, 201.13 of this chapter, or to advance or cancel such
hearings, if necessary;
(4) To grant extensions of time within which to file papers pursuant
to Rule 13 of the Commission's rules of practice ( 201.13 of this
chapter);
(5) To permit the filing of briefs exceeding 60 pages in length,
pursuant to Rule 22(d) of the Commission's rules of practice ( 201.22(d)
of this chapter);
(6) To extend the time within which initial decisions are to be filed
with the Secretary by administrative law judges designated to prepare
such, pursuant to Rule 16(f) of the Commission's rules of practice (
201.16(f) of this chapter);
(7) In the event the designated presiding administrative law judge is
unavailable to issue subpenas requiring the attendance and testimony of
witnesses and subpenas requiring the production of documentary or other
tangible evidence at any designated place of hearing upon request
therefor by any party, pursuant to Rule 14(b) of the Commission's rules
of practice (201.14(b) of this chapter);
(8) Pursuant to sections 15(b)(1)(B), 15B(a)(2)(B), and 19(a)(1)(B)
of the Securities Exchange Act of 1934 and section 203(c)(2)(B) of the
Investment Advisers Act of 1940 to grant extensions of time for
conclusion of proceedings instituted to determine whether applications
for registration as a broker or dealer, municipal securities dealer,
national securities exchange, registered securities association, or
registered clearing agency, or as an investment adviser should be
denied.
(b) With respect to proceedings under the Equal Access to Justice
Act, 5 U.S.C. 504, to make assignments as provided in 201.37(b) of this
chapter, respecting applications made pursuant to that Act.
(c) Notwithstanding anything in the foregoing, in any case in which
the Chief Administrative Law Judge believes it appropriate he or she may
submit the matter to the Commission.
(15 U.S.C. 77u, 78d, 78d-1, 78d-2, 76 Stat. 394, as amended, secs.
25(1) and 25(2), 89 Stat. 163)
(37 FR 23827, Nov. 9, 1972, as amended at 41 FR 21183, May 24, 1976;
43 FR 13378, Mar. 30, 1978; 54 FR 53051, Dec. 27, 1989)
17 CFR 200.30-11 Delegation of authority to Director, Office of
Applications and Reports Services.
Pursuant to the provisions of Pub. L. 87-592, 76 Stat. 394 (15
U.S.C. 78d-1, 78d-2), the Securities and Exchange Commission hereby
delegates the following functions to the Director of the Office of
Applications and Reports Services to be performed by him or under his
direction by such person or persons as may be designated from time to
time by the Chairman of the Commission:
(a) With respect to the Securities Exchange Act of 1934 (15 U.S.C.
78a, et seq.):
(1) Pursuant to section 15(b) of the Act (15 U.S.C. 78o(b)):
(i) To authorize the issuance of orders granting registration of
brokers or dealers within forty-five days of the filing of an
application for registration as a broker or dealer (or within such
longer period as to which the applicant consents);
(ii) To authorize the issuance of orders cancelling registrations of
brokers or dealers or pending applications for registration, if such
brokers or dealers or applicants for registration are no longer in
existence or have ceased to do business as brokers or dealers;
(iii) To determine whether notices of withdrawal from registration on
Form BDW shall become effective sooner than the normal 60-day waiting
period.
(2) Pursuant to section 15B(a) of the Act (15 U.S.C. 78o-4(a)), to
authorize the issuance of orders granting registration of municipal
securities dealers within 45 days of the filing of an application for
registration as a municipal securities dealer (or within such longer
period as to which the applicant consents).
(3) Pursuant to section 17A(c)(2) of the Act (15 U.S.C.
78q-1(c)(2)), to authorize the issuance of orders accelerating
registration of transfer agents for which the Commission is the
appropriate regulatory agency before the expiration of 30 days following
the date on which applications for registration as a transfer agent are
filed.
(4) Pursuant to section 17A(c)(3)(C) of the Act (15 U.S.C.
78q-1(c)(3)(C)), to set terms and conditions upon which transfer agents
registered with the Commission may withdraw from registration as a
transfer agent by filing a written notice of withdrawal.
(5) Pursuant to section 17A(c)(3)(C) of the Act (15 U.S.C.
78q-1(c)(3)(C)), to authorize the issuance of orders cancelling
registrations of transfer agents registered with the Commission or
denying applications for registration as a transfer agent with the
Commission, if such transfer agents are no longer in existence or have
ceased to do business as transfer agents.
(b) With respect to the Investment Advisers Act of 1940 (15 U.S.C.
80b-1, et seq.).
(1) Pursuant to section 203(c) of the Acts (15 U.S.C. 80b-3(c)), to
authorize the issuance of orders granting registration of investment
advisers within 45 days of the filing of an application for registration
as an investment adviser (or within such longer period as to which the
applicant consents).
(i) To determine registration of investment advisers to be effective
within shorter periods of time than 45 days after receipt by the
Commission of applications for registration;
(ii) To authorize the issuance of orders declaring amendments filed
with the Commission after an application has become effective to be
effective within shorter periods of time than 30 days after the filing
of such amendments.
(2) Pursuant to section 203(h) of the Act (15 U.S.C. 80b-3(i)):
(i) To authorize the issuance of orders cancelling registrations of
investment advisers or applications for registration, if such investment
advisers or applicants for registration are no longer in existence or
are not engaged in business as investment advisers.
(ii) To determine whether notices of withdrawal from registration on
Form ADV-W shall become effective sooner than the normal 60-day waiting
period.
(c) With respect to the Securities Investor Protection Act of 1970
(15 U.S.C. 78aaa et seq.):
(1) To cause a written notice to be sent by registered or certified
mail, upon receipt of a copy of a notice sent by or on behalf of the
Securities Investor Protection Corporation that a broker or dealer has
failed to timely file any report or information or to pay when due all
or any part of an assessment as required under section 10(a) of this
Act, to such delinquent member advising such member that it is unlawful
for him or her under the provisions of such section of the Act to engage
in business as a broker-dealer while in violation of such requirements
of the Act and requesting an explanation in writing within ten days
stating what he or she intends to do in order to cure such delinquency;
(2) To authorize formerly delinquent brokers or dealers, upon receipt
of written confirmation from or on behalf of the Securities Investor
Protection Corporation that the delinquencies referred to in paragraph
(c)(1) of this section have been cured, and upon having been advised by
the appropriate regional office of this Commission and the Division of
Enforcement and Division of Market Regulation that there is no objection
to such member being authorized to resume business, and upon there
appearing to be no unusual or novel circumstances which would warrant
direct consideration of the matter by this Commission, to resume
business as registered broker-dealers as provided in section 10(a) of
this Act.
(d) Notwithstanding anything in the foregoing, in any case in which
the Director of the Office of Applications and Reports Services believes
it appropriate, he or she may submit the matter to the Commission.
(e) To authenticate all Commission documents produced for
administrative or judicial proceedings.
(Sec. 1, 76 Stat. 394, 15 U.S.C. 78d-1, 78d-2; sec. 10(a), 84 Stat.
1655, 15 U.S.C. 78jjj(a); sec. 15B, 15 U.S.C. 78o-4(a); sec. 17A, 15
U.S.C. 78q-1(c)(2); 11 U.S.C. 901, 1109(a))
(41 FR 1740, Jan. 12, 1976, as amended at 41 FR 32736, Aug. 5, 1976;
42 FR 56727, Oct. 28, 1977; 49 FR 12686, Mar. 30, 1984; 55 FR 11168,
Mar. 27, 1990)
17 CFR 200.30-12 Delegation of authority to Director, Office of
Consumer Affairs and Information Services.
Pursuant to the provisions of Pub. L. 87-592; 76 Stat. 394 (15
U.S.C. 78d-1, 78d-2), the Securities and Exchange Commission hereby
delegates the following functions to the Director of the Office of
Consumer Affairs and Information Services to be performed by him or
under his direction by such person or persons as may be designated from
time to time by the Chairman of the Commission:
(a) With respect to the Freedom of Information Act, 5 U.S.C. 552 and
the Privacy Act, 5 U.S.C. 552a:
(1) To waive or reduce fees for searching and/or duplicating
requested records under the Freedom of Information Act whenever it shall
be determined that waiver or reduction of fee is in the public interest;
(2) To waive or reduce fees for reproduction under the Privacy Act
whenever it shall be determined that good cause therefor exists.
(3) Notwithstanding anything in the foregoing, in any case in which
the Director of the Office of Consumer Affairs and Information Services
believes it appropriate, he or she may submit the matter to the
Commission.
(11 U.S.C. 901, 1109(a))
(49 FR 12686, Mar. 30, 1984)
17 CFR 200.30-13 Delegation of authority to Comptroller.
Pursuant to the provisions of Pub. L. 94-29, 89 Stat. 163, Pub. L.
87-592, 76 Stat. 395, 15 U.S.C. 78d-1, 78d-2, the Securities and
Exchange Commission hereby delegates, until the Commission orders
otherwise, the following function to the Comptroller of the Commission,
to be performed by him or under his direction by such person or persons
as may be designated from time to time by the Chairman of the
Commission: The compromise and collection of Federal claims as required
by the Federal Claims Collection Act of 1966, 31 U.S.C. 951 et seq., in
conformance with standards and procedures jointly promulgated by the
Attorney General and Comptroller General, 4 CFR 101.1 -- 105.7.
(Sec. 25, 89 Stat. 163, 15 U.S.C. 78d-1; Sec. 2, 76 Stat. 395 15
U.S.C. 78d-2)
(44 FR 3473, Jan. 17, 1979)
17 CFR 200.30-14 Delegation of authority to the General Counsel.
Pursuant to the provisions of Pub. L. 101-181, 101 Stat. 1254, 101
Stat. 1255, 15 U.S.C. 78d-1, 15 U.S.C. 78d-2, and 5 U.S.C.
552a(d)(2)(B)(ii), the Securities and Exchange Commission hereby
delegates, until the Commission orders otherwise, the following
functions to the General Counsel of the Commission, to be performed by
him or her or under his or her direction by such person or persons as
may be designated from time to time by the Chairman of the Commission:
(a) Grant waivers of imputed disqualification requested pursuant to
17 CFR 200.735-8(d);
(b) Determine whether the Commission will submit, after consultation
with any Division or Office of the Commission designated by the
Commission, and amicus curiae brief in private litigation on issues
previously considered and designated by the Commission as appropriate
for the exercise of delegated authority. A list of the issues
designated by the Commission as subject to this delegated authority and,
where determined by the Commission, the position to be taken on each
such issue, may be obtained on request addressed to Securities and
Exchange Commission, Washington, D.C. 20549; and
(c) Determine the appropriate disposition of all Freedom of
Information Act and confidential treatment appeals in accordance with
200.80(d)(6), 200.80(e)(4), 200.83(e), 200.83(f), and 200.83(h).
(d) Determine the appropriate disposition of all Privacy Act appeals
and related matters in accordance with 200.304 (a) and (c); 200.307
(a) and (b); 200.308(a) (4)-(10); 200.308(b) (1)-(4); and 200.309(e)
(1) and (2).
(e) File notices of appearance in bankruptcy reorganization cases
under section 1109(a) of the Bankruptcy Code involving debtors, the
securities of which are registered or required to be registered under
section 12 of the Securities Exchange Act.
(f) Approve non-expert, non-privileged, factual testimony by present
or former staff members, and the production of non-privileged documents,
when validly subpoenaed.
(g)(1) With respect to proceedings conducted pursuant to the
Securities Act of 1933 (15 U.S.C. 77a, et seq.), the Securities Exchange
Act of 1934 (15 U.S.C. 78a, et seq.), the Public Utility Holding Company
Act of 1935 (15 U.S.C. 79a, et seq.), the Trust Indenture Act of 1939
(15 U.S.C. 77aaa, et seq.), the Investment Company Act of 1940 (15
U.S.C. 80a-1, et seq.), the Investment Advisers Act of 1940 (15 U.S.C.
80b-1, et seq.), and the Securities Investor Protection Act of 1970 (15
U.S.C. 78aaa, et seq.);
(i) To consider an application for review of an interlocutory ruling
which an administrative law judge has refused to certify, and to deny
such application upon determining that the administrative law judge did
not err in refusing to certify the matter.
(ii) To consider an interlocutory ruling which an administrative
judge has certified, and to affirm such ruling upon determining that
such action is appropriate.
(iii) To issue any order pursuant to an initial decision as to any
person who has not filed a petition for review within the time provided,
or has withdrawn his appeal, where the Commission has not on its own
motion ordered that the initial decision be reviewed.
(iv) Except where the Commission otherwise directs, to issue findings
and orders pursuant to offers of settlement which the Commission has
determined should be accepted.
(v) To grant petitions for review of initial decisions by a hearing
officer.
(vi) To grant motions of staff counsel to discontinue administrative
proceedings as to a particular respondent who has died or cannot be
found, or because of a mistake in the identity of a respondent named in
the order for proceedings.
(vii) To grant requests for the submission of late or additional
briefs, or the acceptance of affidavits or other material for inclusion
in the record or in support of motions or petitions addressed to the
Commission.
(viii) To issue an order dismissing an application for review upon
the request of the applicant that the application be withdrawn.
(ix) To issue an order dismissing an exemptive application upon the
request of the applicant that the application be withdrawn.
(2) With respect to proceedings conducted pursuant to the Securities
Act of 1933 (15 U.S.C. 77a, et seq.), the Securities Exchange Act of
1934 (15 U.S.C. 78a, et seq.), the Investment Company Act of 1940 (15
U.S.C. 80a-1, et seq.), the Investment Advisers Act of 1940 (15 U.S.C.
80b-1, et seq.), and the Securities Investor Protection Act of 1970 (15
U.S.C. 78aaa et seq.), to issue findings and orders taking the remedial
action described in the order for proceedings where the respondents
expressly consent to such action, fail to appear or default in the
filing of answers required to be filed; or to grant a request, based
upon a showing of good cause, to vacate an order of default, so as to
permit presentation of a defense.
(3) With respect to proceedings conducted pursuant to the Securities
Exchange Act of 1934 (15 U.S.C. 78a, et seq.), to issue an order
dismissing an application for review of a denial by a self-regulatory
organization of an application by a person subject to statutory
disqualification to become associated with a member firm upon receipt of
notice from the self-regulatory organization that the firm is no longer
a member of the self-regulatory organization.
(4) With respect to proceedings under Sections 19 (d), (e) and (f) of
the Securities Exchange Act of 1934 (15 U.S.C. 78s (d), (e) and (f)), to
determine that an application for review under those sections has been
abandoned under the provision of 240.19d-3(c) of this chapter or
otherwise, and to issue an order dismissing the application in such
event.
(5) With respect to proceedings conducted or reviewed pursuant to the
provisions of the Securities Exchange Act of 1934 (15 U.S.C. 78(a), et
seq.), the Investment Company Act of 1940 (15 U.S.C. 80a-1, et seq.),
and the Investment Advisers Act of 1940 (15 U.S.C. 80b-1, et seq.) to
determine applications to stay Commission orders pending appeal of those
orders to the federal courts.
(6) With respect to review proceedings pursuant to Sections 19 (d),
(e) and (f) of the Securities Exchange Act of 1934 (15 U.S.C. 78s (d),
(e) and (f)), to determine applications for a stay of action taken by a
self-regulatory organization pending Commission review of that action.
(7) In connection with Commission review of actions taken by
self-regulatory organizations, pursuant to Sections 19 (d), (e) and (f)
of the Securities Exchange Act of 1934 (15 U.S.C. 78s (d), (e) and (f)),
to grant or deny requests for oral argument in accordance with the
provisions of 240.19d-3(f) of this chapter.
(h) Notwithstanding anything in paragraph (g) of this section, the
functions described in paragraph (g) of this section are not delegated
to the General Counsel with respect to administrative proceedings under
Rule 2(e) of the Commission's Rules of Practice ( 201.2(e) of this
chapter), or with respect to other proceedings in which the Chairman or
the General Counsel determines that separation of functions requirements
or other circumstances would make inappropriate the General Counsel's
exercise of such delegated functions. With respect to such Rule 2(e)
and other proceedings, such functions are delegated to the Executive
Assistant to the Chairman pursuant to 200.30-16 of this chapter.
(i) Notwithstanding anything in paragraph (g) of this section, in any
case described in paragraph (g) of this section in which the General
Counsel believes it appropriate, he or she may submit the matter to the
Commission.
(47 FR 20288, May 12, 1982, as amended at 49 FR 13866, Apr. 9, 1984;
49 FR 43951, Nov. 1, 1984; 53 FR 17458, May 17, 1988; 54 FR 18101,
Apr. 27, 1989; 54 FR 33500, Aug. 15, 1989)
17 CFR 200.30-15 Delegation of authority to Executive Director.
Under Pub. L. 94-29, 89 Stat. 163, Pub. L. 87-592, 76 Stat. 395,
15 U.S.C. 78d-1, 78d-2, the Securities and Exchange Commission
delegates, until the Commission orders otherwise, the following function
to the Executive Director, to be performed by him or under his direction
by persons designated by the Chairman of the Commission: The
publication, required by 17 CFR 200.735-4(b)(4), of quarterly
compilations of reimbursements for Commission members and staff for
attending non-Federal conferences that concern the agency's
responsibilities.
(51 FR 25684, July 16, 1986)
17 CFR 200.30-16 Delegation of authority to Executive Assistant to the
Chairman.
Pursuant to the provisions of Pub. L. 101-181, 101 Stat. 1254, 101
Stat. 1255, 15 U.S.C. 78d-1, and 15 U.S.C. 78d-2, the Securities and
Exchange Commission hereby delegates, until the Commission orders
otherwise, the following functions to the Executive Assistant to the
Chairman (or to such other person or persons designated pursuant to
paragraph (d) of this section), to be performed by such Executive
Assistant or under the Executive Assistant's direction by such person or
persons as may be designated from time to time by the Chairman of the
Commission (or by such other person or persons designated pursuant to
paragraph (d) of this section):
(a) The functions otherwise delegated to the General Counsel under
200.30-14(g) of this chapter, with respect to any proceeding in which
the Chairman or the General Counsel has determined, pursuant to
200.30-14(h) of this chapter, that separation of functions requirements
or other circumstances would make inappropriate the General Counsel's
exercise of such delegated functions.
(b) With respect to proceedings conducted pursuant to the provisions
of Rule 2(e) of the Commission's Rules of Practice ( 201.2(e) of this
chapter);
(1) To consider an application for review of an interlocutory ruling
which an administrative law judge has refused to certify, and to deny
such application upon determining that the administrative law judge did
not err in refusing to certify the matter.
(2) To consider an interlocutory ruling which an administrative judge
has certified, and to affirm such ruling upon determining that such
action is appropriate.
(3) To issue any order pursuant to an initial decision as to any
person who has not filed a petition for review within the time provided,
where the Commission has not on its own motion ordered that the initial
decision be reviewed.
(4) Except where the Commission otherwise directs, to issue findings
and orders pursuant to offers of settlement which the Commission has
determined should be accepted.
(5) To grant petitions for full review of initial decisions by a
hearing officer.
(6) To grant motions of staff counsel to discontinue administrative
proceedings as to a particular respondent who has died or cannot be
found, or because of a mistake in the identity of a respondent named in
the order for proceedings.
(7) To grant requests for the submission of late or additional
briefs, or the acceptance of affidavits or other material for inclusion
in the record or in support of motions or petitions addressed to the
Commission.
(8) To issue findings and orders taking the remedial action described
in the order for proceedings where the respondents expressly consent to
such action, fail to appear or default in the filing of answers required
to be filed; or to grant a request, based upon a showing of good cause,
to vacate an order of default, so as to permit presentation of a
defense.
(9) To determine applications to stay Commission orders imposing,
affirming, or modifying sanctions pending appeal of those orders to the
Federal courts.
(c) Notwithstanding anything in the foregoing, in any case described
in paragraphs (a) and (b) of this section in which the Executive
Assistant believes it appropriate, he or she may submit the matter to
the Commission.
(d) Notwithstanding anything in the foregoing, the functions
otherwise delegated to the Executive Assistant are hereby delegated to
such person or persons, not under the Executive Assistant's supervision,
designated by the Chairman, with respect to any proceeding in which the
Chairman or the Executive Assistant determines that the Executive
Assistant's exercise of such delegated functions would be inappropriate.
(54 FR 18102, Apr. 27, 1989)
17 CFR 200.30-16 Subpart B -- Disposition of Commission Business
Authority: 5 U.S.C. 552b.
Source: 42 FR 14692, Mar. 16, 1977, unless otherwise noted.
17 CFR 200.40 Joint disposition of business by Commission meeting.
Any disposition of Commission business which entails joint
deliberation among the members of the Commission shall occur at
Commission meetings in accordance with the definitions and procedures
set forth in Subpart I of this part. The Commission's Secretary shall
prepare and maintain a Minute Record reflecting the official action
taken at such meetings.
17 CFR 200.41 Disposition of business by seriatim Commission
consideration.
(a) Whenever the Commission's Chairman, or the Commission member
designated as duty officer pursuant to 200.42, is of the opinion that
joint deliberation among the members of the Commission upon any matter
is unnecessary in light of the nature of the matter, impracticable, or
contrary to the requirements of agency business, but is of the view that
such matter should be the subject of a vote of the Commission, such
matter may be disposed of by circulation of any relevant materials
concerning the matter to at least that number of Commission members
necessary to take action thereon. Each participating Commission member
shall report his or her vote to the Secretary, who shall record it in
the Minute Record of the Commission.
(b) Whenever any member of the Commission so requests, any matter
circulated for disposition pursuant to 200.41(a) shall be withdrawn
from circulation and scheduled instead for joint Commission
deliberation.
17 CFR 200.42 Disposition of business by exercise of authority
delegated to individual Commissioner.
(a) Delegation to duty officer. (1) Pursuant to the provisions of
Pub. L. No. 87-592, 76 Stat. 394, as amended by section 25 of Pub. L.
94-29, 89 Stat. 163, the Commission hereby delegates to an individual
Commissioner, to be designated as the Commission's ''duty officer'' by
the Chairman of the Commission (or by the Chairman's designee) from time
to time, all of the functions of the Commission; Provided, however,
That no such delegation shall authorize the duty officer (i) to exercise
the function of rulemaking, as defined in the Administrative Procedure
Act of 1946, as codified, 5 U.S.C. 551, et seq., with reference to
general rules as distinguished from rules of particular applicability;
(ii) to make any rule, pursuant to section 19(c) of the Securities
Exchange Act of 1934; or (iii) to preside at the taking of evidence as
described in section 7(a) of the Administrative Procedure Act, 5 U.S.C.
556(b).
(2) To the extent feasible, the designation of a duty officer shall
rotate, under the administration of the Secretary, on a regular weekly
basis among the members of the Commission other than the Chairman.
(b) Exercise of duty officer authority. (1) The authority delegated
by this rule shall be exercised when, in the opinion of the duty
officer, action is required to be taken which, by reason of its urgency,
cannot practicably be scheduled for consideration at a Commission
meeting. After consideration of a staff recommendation involving such a
matter, the duty officer shall forthwith report his or her action
thereon to the Secretary.
(2) In any consideration of Commission business by a duty officer,
the provisions of subpart I herein, 200.400 et seq., shall not apply,
whether or not the duty officer, in exercising his or her authority,
consults with, or seeks the advice of, other members of the Commission
individually.
(c) Commission affirmation of duty officer action. (1) Any action
authorized by a duty officer pursuant to 200.42(a) shall be either (i)
circulated to the members of the Commission for affirmation pursuant to
200.41; or (ii) scheduled for affirmation at a Commission meeting at
the earliest practicable date consistent with the procedures in subpart
I.
(2)(i) The Commission may, in its discretion, at any time review any
unaffirmed action taken by a duty officer, either upon its own
initiative or upon the petition of any person affected thereby. The
vote of any one member of the Commission, including the duty officer,
shall be sufficient to bring any such unaffirmed action taken by a duty
officer before the Commission for review.
(ii) A person or party adversely affected by any unaffirmed action
taken by a duty officer shall be entitled to seek review by the
Commission of the duty officer's unaffirmed actions, but only in the
event that the unaffirmed action by the duty officer (A) denies any
request for action pursuant to sections 8(a) or 8(c) of the Securities
Act of 1933, or the first sentence of section 12(d) of the Securities
Exchange Act of 1934; (B) suspends trading in a security pursuant to
section 12(k) of the Securities Exchange Act of 1934; or (C) is
pursuant to any provision of the Securities Exchange Act of 1934 in a
case of adjudication, as defined in section 551 of Title 5, U.S. Code,
not required by that Act to be determined on the record after notice and
opportunity for hearing (except to the extent there is involved a matter
described in section 554(a) (1) through (6) of Title 5, United States
Code).
(3) Affirmed or unaffirmed action taken by the duty officer shall be
deemed to be, for all purposes, the action of the Commission unless and
until the Commission directs otherwise. Rule 26 of the Commission's
rules of practice, 17 CFR 201.26, shall not apply to duty officer
action.
17 CFR 200.42 Subpart C -- Canons of Ethics
Authority: Secs. 19, 28, 48 Stat. 85, 901, as amended, sec. 20, 49
Stat. 833, sec. 319, 53 Stat. 1173, secs. 38, 211, 54 Stat. 841,
855; 15 U.S.C. 77s, 78w, 79t, 77sss, 80a-37, 80b-11.
Source: 25 FR 6725, July 15, 1960, unless otherwise noted.
17 CFR 200.50 Authority.
The Canons of Ethics for Members of the Securities and Exchange
Commission were approved by the Commission on July 22, 1958.
17 CFR 200.51 Policy.
It is characteristic of the administrative process that the Members
of the Commission and their place in public opinion are affected by the
advice and conduct of the staff, particularly the professional and
executive employees. It shall be the policy of the Commission to
require that employees bear in mind the principles specified in the
Canons.
17 CFR 200.52 Copies of the Canons.
The Canons have been distributed to employees of the Commission. In
addition, executive and professional employees are issued copies of the
Canons upon entrance on duty.
17 CFR 200.53 Preamble.
(a) Members of the Securities and Exchange Commission are entrusted
by various enactments of the Congress with powers and duties of great
social and economic significance to the American people. It is their
task to regulate varied aspects of the American economy, within the
limits prescribed by Congress, to insure that our private enterprise
system serves the welfare of all citizens. Their success in this
endeavor is a bulwark against possible abuses and injustice which, if
left unchecked, might jeopardize the strength of our economic
institutions.
(b) It is imperative that the members of this Commission continue to
conduct themselves in their official and personal relationships in a
manner which commands the respect and confidence of their fellow
citizens. Members of this Commission shall continue to be mindful of,
and strictly abide by, the standards of personal conduct set forth in
its regulation regarding Conduct of Members and Employees and Former
Members and Employees of the Commission, which is set forth in subpart M
of this part 200, most of which has been in effect for many years, and
which was originally codified in 1953.
(c) However, in addition to the continued observance of those
principles of personal conduct, it is fitting and proper for the members
of the Commission to restate and resubscribe to the standards of conduct
applicable to its executive, legislative and judicial responsibilities.
(25 FR 6725, July 15, 1960, as amended at 31 FR 13533, Oct. 20, 1966)
17 CFR 200.54 Constitutional obligations.
The members of this Commission have undertaken in their oaths of
office to support the Federal Constitution. Insofar as the enactments
of the Congress impose executive duties upon the members, they must
faithfully execute the laws which they are charged with administering.
Members shall also carefully guard against any infringement of the
constitutional rights, privileges, or immunities of those who are
subject to regulation by this Commission.
17 CFR 200.55 Statutory obligations.
In administering the law, members of this Commission should
vigorously enforce compliance with the law by all persons affected
thereby. In the exercise of the rulemaking powers delegated this
Commission by the Congress, members should always be concerned that the
rulemaking power be confined to the proper limits of the law and be
consistent with the statutory purposes expressed by the Congress. In
the exercise of their judicial functions, members shall honestly, fairly
and impartially determine the rights of all persons under the law.
17 CFR 200.56 Personal conduct.
Appointment to the office of member of this Commission is a high
honor and requires that the conduct of a member, not only in the
performance of the duties of his office but also in his everyday life,
should be beyond reproach.
17 CFR 200.57 Relationships with other members.
Each member should recognize that his conscience and those of other
members are distinct entities and that differing shades of opinion
should be anticipated. The free expression of opinion is a safeguard
against the domination of this Commission by less than a majority, and
is a keystone of the commission type of administration. However, a
member should never permit his personal opinion so to conflict with the
opinion of another member as to develop animosity or unfriendliness in
the Commission, and every effort should be made to promote solidarity of
conclusion.
17 CFR 200.58 Maintenance of independence.
This Commission has been established to administer laws enacted by
the Congress. Its members are appointed by the President by and with
the advice and consent of the Senate to serve terms as provided by law.
However, under the law, this is an independent Agency, and in performing
their duties, members should exhibit a spirit of firm independence and
reject any effort by representatives of the executive or legislative
branches of the government to affect their independent determination of
any matter being considered by this Commission. A member should not be
swayed by partisan demands, public clamor or considerations of personal
popularity or notoriety; so also he should be above fear of unjust
criticism by anyone.
17 CFR 200.59 Relationship with persons subject to regulation.
In all matters before him, a member should administer the law without
regard to any personality involved, and with regard only to the issues.
Members should not become indebted in any way to persons who are or may
become subject to their jurisdiction. No member should accept loans,
presents or favors of undue value from persons who are regulated or who
represent those who are regulated. In performing their judicial
functions, members should avoid discussion of a matter with any person
outside this Commission and its staff while that matter is pending. In
the performance of his rule-making and administrative functions, a
member has a duty to solicit the views of interested persons. Care must
be taken by a member in his relationship with persons within or outside
of the Commission to separate the judicial and the rule-making functions
and to observe the liberties of discussion respectively appropriate.
Insofar as it is consistent with the dignity of his official position,
he should maintain contact with the persons outside the agency who may
be affected by his rule-making functions, but he should not accept
unreasonable or lavish hospitality in so doing.
17 CFR 200.60 Qualification to participate in particular matters.
The question in a particular matter rests with that individual
member. Each member should weigh carefully the question of his
qualification with respect to any matter wherein he or any relatives or
former business associates or clients are involved. He should
disqualify himself in the event he obtained knowledge prior to becoming
a member of the facts at issue before him in a quasi-judicial
proceeding, or in other types of proceeding in any matter involving
parties in whom he has any interest or relationship directly or
indirectly. If an interested person suggests that a member should
disqualify himself in a particular matter because of bias or prejudice,
the member shall be the judge of his own qualification.
17 CFR 200.61 Impressions of influence.
A member should not, by his conduct, permit the impression to prevail
that any person can improperly influence him, that any person unduly
enjoys his favor or that he is affected in any way by the rank,
position, prestige, or affluence of any person.
17 CFR 200.62 Ex parte communications.
All proceedings required to be determined by the Commission on the
record shall be determined by the members solely upon the record and the
arguments of the parties or their counsel properly made in the regular
course of such proceeding. A member shall at all times comply with the
Commission's Code of Behavior governing ex parte communications between
persons outside the Commission and decisional employees, 200.110 et
seq.
(28 FR 4446, May 3, 1963)
17 CFR 200.63 Commission opinions.
The opinions of the Commission should state the reasons for the
action taken and contain a clear showing that no serious argument of
counsel has been disregarded or overlooked. In such manner, a member
shows a full understanding of the matter before him, avoids the
suspicion of arbitrary conclusion, promotes confidence in his
intellectual integrity and may contribute some useful precedent to the
growth of the law. A member should be guided in his decisions by a deep
regard for the integrity of the system of law which he administers. He
should recall that he is not a repository of arbitrary power, but is
acting on behalf of the public under the sanction of the law.
17 CFR 200.64 Judicial review.
The Congress has provided for review by the courts of the decisions
and orders by this Commission. Members should recognize that their
obligation to preserve the sanctity of the laws administered by them
requires that they pursue and prosecute, vigorously and diligently but
at the same time fairly and impartially and with dignity, all matters
which they or others take to the courts for judicial review.
17 CFR 200.65 Legislative proposals.
Members must recognize that the changing conditions in a volatile
economy may require that they bring to the attention of the Congress
proposals to amend, modify or repeal the laws administered by them.
They should urge the Congress, whenever necessary, to effect such
amendment, modification or repeal of particular parts of the statutes
which they administer. In any action a member's motivation should be
the common weal and not the particular interests of any particular
group.
17 CFR 200.66 Investigations.
The power to investigate carries with it the power to defame and
destroy. In determining to exercise their investigatory power, members
should concern themselves only with the facts known to them and the
reasonable inferences from those facts. A member should never suggest,
vote for, or participate in an investigation aimed at a particular
individual for reasons of animus, prejudice or vindictiveness. The
requirements of the particular case alone should induce the exercise of
the investigatory power, and no public pronouncement of the pendency of
such an investigation should be made in the absence of reasonable
evidence that the law has been violated and that the public welfare
demand it.
17 CFR 200.67 Power to adopt rules.
In exercising its rule-making power, this Commission performs a
legislative function. The delegation of this power by the Congress
imposes the obligation upon the members to adopt rules necessary to
effectuate the stated policies of the statute in the interest of all of
the people. Care should be taken to avoid the adoption of rules which
seek to extend the power of the Commission beyond proper statutory
limits. Its rules should never tend to stifle or discourage legitimate
business enterprises or activities, nor should they be interpreted so as
unduly and unnecessarily to burden those regulated with onerous
obligations. On the other hand, the very statutory enactments evidence
the need for regulation, and the necessary rules should be adopted or
modifications made or rules should be repealed as changing requirements
demand without fear or favor.
17 CFR 200.68 Promptness.
Each member should promptly perform the duties with which he is
charged by the statutes. The Commission should evaluate continuously
its practices and procedures to assure that it promptly disposes of all
matters affecting the rights of those regulated. This is particularly
desirable in quasi-judicial proceedings. While avoiding arbitrary
action in unreasonably or unjustly forcing matters to trial, members
should endeavor to hold counsel to a proper appreciation of their duties
to the public, their clients and others who are interested. Requests
for continuances of matters should be determined in a manner consistent
with this policy.
17 CFR 200.69 Conduct toward parties and their counsel.
Members should be temperate, attentive, patient and impartial when
hearing the arguments of parties or their counsel. Members should not
condone unprofessional conduct by attorneys in their representation of
parties. The Commission should continuously assure that its staff
follows the same principles in their relationships with parties and
counsel.
17 CFR 200.70 Business promotions.
A member must not engage in any other business, employment or
vocation while in office, nor may he ever use the power of his office or
the influence of his name to promote the business interests of others.
17 CFR 200.71 Fiduciary relationships.
A member should avoid service as a fiduciary if it would interfere or
seem to interfere with the proper performance of his duties, or if the
interests of those represented require investments in enterprises which
are involved in questions to be determined by him. Such relationships
would include trustees, executors, corporate directors, and the like.
17 CFR 200.72 Supervision of internal organization.
Members and particularly the Chairman of the Commission should
scrutinize continuously its internal organization in order to assure
that such organization handles all matters before it efficiently and
expeditiously, while recognizing that changing times bring changing
emphasis in the administration of the laws.
17 CFR 200.72 Subpart D -- Information and Requests
Authority: 80 Stat. 383, as amended, 31 Stat. 54, secs. 19, 23,
48 Stat. 85, 901, as amended, sec. 20, 49 Stat. 85, 833, sec. 319,
53 Stat. 1173, secs. 38, 211, 54 Stat. 841, 855; 5 U.S.C. 552, as
amended, 15 U.S.C. 77f(d), 77s, 77ggg(a), 78m(F)(3), 78w, 79t, 79v(a),
77sss, 80a-37, 80a-44(c), 80a-44(b), 80b-10(a), 80b-11.
200.80 also issued under 5 U.S.C. 552b; Pub. L. 87-592, 76 Stat.
394, 15 U.S.C. 78d-1, 78d-2; Pub. L. 93-502; Pub. L. 93-579; 15
U.S.C. 78a et. seq., as amended by Pub. L. 84-29 (June 4, 1975) and by
secs. 11A, 15, 19 and 23 of Pub. L. 98-38 (June 6, 1983) (15 U.S.C.
78k-1, 78o, 78s and 78w); 11 U.S.C. 901, 1109(a).
200.80a also issued under 5 U.S.C. 552b.
200.80b and 200.80c also issued under 11 U.S.C. 901, 1109(a).
200.82 also issued under 15 U.S.C. 78n.
17 CFR 200.80 Commission records and information.
(a)(1) Information published in the Federal Register. Except as
provided in paragraph (b) of this section the following materials are
published in the Federal Register for the guidance of the public:
(i) Description of the Commission's central and field organization
and the established places at which, the employees from whom, and the
methods whereby the public may obtain information, make submittals or
requests, or obtain decisions;
(ii) Statements of the general course and method by which the
Commission's functions are channeled and determined, including the
nature and requirements of all formal and informal procedures available;
(iii) Rules of procedure, descriptions of forms available or the
places at which forms may be obtained, and instructions as to the scope
and contents of all papers, reports, or examinations;
(iv) Substantive rules of general applicability adopted as authorized
by law, and statements of general policy or interpretations of general
applicability formulated and adopted by the Commission;
(v) Each amendment, revision, or repeal of the foregoing; and
(vi) The notice of Commission meetings described in 200.403, but
only to the extent, and under the conditions, specified in 200.403.
(2) Records available for public inspection and copying; documents
published and indexed. Except as provided in paragraph (b) of this
section, the following materials are available for public inspection and
copying during normal business hours at the public reference room
located at 450 Fifth Street, NW., Room 1024, Washington, DC and at the
Regional Offices of the Commission, and, except for indices, they are
published weekly in a document entitled ''SEC Docket'' (see paragraph
(e)(8)(ii) of this section):
(i) Final opinions of the Commission, including concurring and
dissenting opinions, as well as orders made by the Commission in the
adjudication of cases;
(ii) Statements of policy and interpretations which have been adopted
by the Commission and are not published in the Federal Register;
(iii) Administrative staff manuals and instructions to staff that
affect a member of the public;
(iv) A record of the final votes of each member of the Commission in
every Commission proceeding concluded after July 1, 1967; and
(v) Current indices (published quarterly or more frequently)
providing identifying information to the public as to the materials made
available pursuant to paragraphs (a)(2) (i), (ii), and (iii) of this
section which have been issued, adopted or promulgated after July 1,
1967, and such other indices as the Commission may determine.
(3) Other records available upon request. Except with respect to the
records made available under paragraphs (a) (1) and (2) of this section,
and subject to the provisions of paragraph (b) of this section,
pertaining to nonpublic matters, the Commission, upon request for
records which (i) reasonably describes such records and (ii) is made in
accordance with the rules set forth in paragraphs (d) and (e) of this
secton, stating the time, place, fees (if any) and procedures to be
followed, shall make the records promptly available to any person. A
compilation of records generally available at the public reference room
at the principal office of the Commission appears below as appendix A to
this subpart (17 CFR 200.80a). Most of the records described in appendix
A to this section are provided to the public pursuant to the Securities
Act of 1933, 15 U.S.C. 77f(d), the Securities Exchange Act of 1934, 15
U.S.C. 78m(f)(3), the Public Utility Holding Company Act of 1935, 15
U.S.C. 79v(a), the Investment Company Act of 1940, 15 U.S.C.
80a-44(a)(b), and the Investment Advisers Act of 1940, 15 U.S.C.
80b-10(a). Arrangements can be made through the Public Reference Branch
as explained in paragraph (c) of this section for materials to be copied
by the Commission's contract copying service at fees found in appendix E
to this section.
(4) Records available with identifying details deleted. To the
extent required to prevent a clearly unwarranted invasion of personal
privacy, identifying details may be deleted from materials made public
as set forth in paragraphs (a) (1), (2), and (3), of this section, e.g.,
apparently defamatory statements made about any person, information
received by or given to the Commission in confidence, or any contents of
personnel and medical and similar files. In addition, certain materials
which are considered to be nonpublic, as described in paragraph (b) of
this section may, as authorized by the Commission from time to time, be
made available for public inspection and copying in an abridged or
summary form or with identifying details deleted.
(b) Nonpublic matters. Certain records are nonpublic, but any
reasonably segregable portion of a record shall be provided to any
person requesting such record in accordance with paragraphs (d) and (e)
of this section and after deletion of the portions which are considered
nonpublic under paragraph (b) of this section. Except for such
reasonably segregable portions of records, the Commission will generally
not publish or make available to any person matters that are:
(1)(i) Specifically authorized under criteria established by an
executive order to be kept secret in the interest of national defense or
foreign policy, and (ii) are in fact properly classified pursuant to
such executive order.
(2) Related solely to the internal personnel rules and practices of
the Commission or any other agency, including, but not limited to:
(i) Operation rules, guidelines, and manuals of procedure for
investigators, attorneys, accountants, and other employees other than
those which establish legal requirements to which members of the public
are expected to conform; or
(ii) Hiring, termination, promotion, discipline, compensation, or
reward of any Commission employee or member, the existence,
investigation, or disposition of a complaint against any Commission
employee or member, the physical or mental condition of any Commission
employee or member, the handling of strictly internal matters, matters
which would tend to infringe on the privacy of the staff or members of
the Commission, or similar subjects.
(3) Specifically exempted from disclosure by statute (other than 5
U.S.C. 552): Provided, That such statute (i) requires that the matters
be withheld from the public in such a manner as to leave no discretion
on the issue, or (ii) establishes particular criteria for withholding or
refers to particular types of matters to be withheld.
(4) Disclose trade secrets and commercial or financial information
obtained from a person and privileged or confidential, including, but
not limited to:
(i) Information contained in letters of comment in connection with
registration statements, applications for registration or other material
filed with the Commission, replies thereto, and related material which
is deemed to have been submitted to the Commission in confidence or to
be confidential at the instance of the registrant or person who has
filed such material unless the contrary clearly appears; and
(ii) Information contained in any document submitted to or required
to be filed with the Commission where the Commission has undertaken
formally or informally to receive such submission or filing for its use
or the use of specified persons only, such as preliminary proxy material
filed pursant to Rule 14a-6 under the Securities Exchange Act (17 CFR
240.14a-6) or preliminary information statements filed pursuant to Rule
14c-5 (17 CFR 240.14c-5) before definitive material has been filed with
the Commission, reports filed pursuant to Rule 316(a) under the
Securities Act (17 CFR 230.316(a)), agreements filed pursuant to Rule
15c-3-1(c)(7)(G) under the Securities Exchange Act (17 CFR
240.15c-1(c)(7)(vii)), schedules filed pursuant to Part II of Form
X-17A-5 (17 CFR 249.617) in accordance with Rule 17a-5(b)(3) under the
Securities Exchange Act (17 CFR 240.17a-5(b)(3)), statements filed
pursuant to Rule 17a-5(k)(1) under the Securities Exchange Act (17 CFR
240.17a-5(k)(1)), and confidential reports filed pursuant to Rules
17a-9, 17a-10, 17a-12 and 17a-16 under the Securities Exchange Act (17
CFR 240.17a-9, 240.17a-10, 240.17a-12, and 240.17a-16); and
(iii) Information contained in reports, summaries, analyses, letters,
or memoranda arising out of, in anticipation of or in connection with an
examination or inspection of the books and records of any person or any
other investigation.
(5) Interagency or intra-agency memoranda or letters, including
generally records which reflect discussions between or consideration by
members of the Commission or members of its staff, or both, of any
action taken or proposed to be taken by the Commission or by any member
of its staff, and specifically, reports, summaries, analyses,
conclusions, or any other work product of members of the Commission or
of attorneys, accountants, analysts, or other members of the
Commission's staff, prepared in the course of an inspection of the books
or records of any person whose affairs are regulated by the Commission,
or prepared otherwise in the course of an examination or investigation
or related litigation conducted by or on behalf of the Commission,
except those which by law would routinely be made available to a party
other than an agency in litigation with the Commission.
(6) Personnel and medical files and similar files the disclosure of
which would constitute a clearly unwarranted invasion of personal
privacy, including those concerning all employees of the Commission and
those concerning persons subject to regulation by the Commission.
(7)(i) Records or information compiled for law enforcement purposes
to the extent that the production of such records or information:
(A) Could reasonably be expected to interfere with enforcement
activities undertaken or likely to be undertaken by the Commission or
the Department of Justice, or any United States Attorney, or any
Federal, state, local, foreign governmental authority or foreign
securities authority, any professional association, or any securities
industry self-regulatory organization;
(B) Would deprive a person of a right to a fair trial or an impartial
adjudication;
(C) Could reasonably be expected to constitute an unwarranted
invasion of personal privacy;
(D) Could reasonably be expected to disclose the identity of a
confidential source including a State, local or foreign agency or
authority or any private institution which furnished information on a
confidential basis, and, in the case of a record or information compiled
by a criminal law enforcement authority in the course of a criminal
investigation, or by an agency conducting a lawful national security
intelligence investigation, information furnished by a confidential
source;
(E) Would disclose techniques or procedures or would disclose
guidelines for law enforcement investigations or prosecutions if such
disclosure could reasonably be expected to risk circumvention of the
law; or
(F) Could be reasonably expected to endanger the life or physical
safety of any individual.
(ii) The term ''investigatory records'' includes, but is not limited
to, all documents, records, transcripts, evidentiary materials of any
nature, correspondence, related memoranda, or work product concerning
any examination, any investigation (whether formal or informal), or any
related litigation, which pertains to, or may disclose, the possible
violation by any person of any provision of any statute, rule, or
regulation administered by the Commission, by any other Federal, state,
local, or foreign governmental authority or foreign securities
authority, by any professional association, or by any securities
industry self-regulatory organization. The term ''investigatory
records'' also includes all written communications from, or to, any
person complaining or otherwise furnishing information respecting such
possible violations, as well as all correspondence or memoranda in
connection with such complaints or information.
(8) Contained in, or related to, any examination operating, or
condition report prepared by, on behalf of, or for the use of, the
Commission, any other Federal, state, local, or foreign governmental
authority or foreign securities authority, or any securities industry
self-regulatory organization, responsible for the regulation or
supervision of financial institutions.
(9) Geological and geophysical information and data, including maps,
concerning wells.
(c)(1) Public reference facilities. In order to disseminate records,
including those listed in Appendix A to this section, the Commission has
a specially staffed and equipped public reference room located at 450
Fifth Street NW., Room 1024, Washington, DC (202-272-3100) and public
reference facilities in its New York and Chicago regional offices.
Copying machines, which are available to requesters on a self-service or
contractor-operated basis, can be used to make immediate copies up to 8
1/2 by 14 inches in size of materials that are available for inspection
in the Washington, DC, New York and Chicago offices. Fees and levels of
service are set out in the Commission's schedule of fees in appendix E
to this section and in information available from the public reference
room. The Commission accepts only written requests for copies of
documents.
(i) The public reference room in Washington has available for public
inspection all of the publicly available records of the Commission as
described in paragraph (a) of this section. In addition, upon request,
such records will be sent to the Commission's regional offices in New
York or Chicago for inspection in the public reference facilities at
those offices, if the records are not needed by the Commission or the
staff in connection with the performance of official duties. Also upon
request, and only when suitable arrangements can be made with respect to
the transportation, storage, and inspection of records, records may be
sent to any other Commission office for inspection at that office, if
the records are not needed by the Commission or the staff in connection
with the performance of official duties. When records are sent to
another office at the request of a member of the public, the requestor
shall be charged all costs incurred by the Commission in transporting
the records.
(ii) All regional offices of the Commission have available for public
examination the materials set forth in paragraph (a)(2) of this section
and the SEC Docket, SEC News Digest and other SEC publications. Blank
forms as well as other general information about the operations of the
Commission described in paragraph (a)(1) of this section may also be
available at particular regional offices.
(iii) In the New York and Chicago regional offices, microfiche of all
recent registration statements filed pursuant to the Securities Act of
1933, registration statements and periodic reports filed pursuant to the
Securities Exchange Act of 1934, and periodic reports filed pursuant to
the Investment Company Act from 1969 to date are available for
inspection and reproduction.
The addresses of the Commission's regional offices are:
Atlanta Regional Office, 1375 Peachtree Street, NE, Suite 788,
Atlanta, GA 30309, (404-881-4768). Office hours -- 9 a.m. to 5:30 p.m.
e.s.t.
Boston Regional Office, John W. McCormack Post Office and Courthouse
Building, Suite 700, Boston, MA 02109.
Chicago Regional Office, Everett McKinley Dirksen Building, 219 South
Dearborn Street, Room 1204, Chicago, IL 60604, (312-353-7390). Office
hours -- 8:45 a.m. to 5:15 p.m. c.s.t.
Denver Regional Office, Suite 700, 410 Seventeenth Street, Denver, CO
80202 (303-837-2071). Office Hours -- 8:00 a.m. to 4:30 p.m. m.s.t.
Fort Worth Regional Office, Eighth Floor, 411 West Seventh Street,
Fort Worth, TX 76102 (817-334-3821). Office Hours -- 8:30 a.m. to 5:00
p.m. c.s.t.
Los Angeles Regional Office, 5757 Wilshire Boulevard, Suite 500 East,
Los Angeles, CA 90036-3648 (213-473-3098). Office Hours -- 8:30 a.m. to
5:00 p.m. p.s.t.
New York Regional Office, 75 Park Place, Room 1228, New York, NY
10007.
Philadelphia Regional Office, The Curtis Center, Suite 1005 E, 600
Walnut Street, Philadelphia, PA 19106-3322.
Seattle Regional Office, 3040 Federal Building, 915 Second Street,
Seattle, WA 98174, (206-442-7990). Office hours -- 8:00 a.m. to 4:30
p.m. p.s.t.
(2) Public reference inquiries. Inquiries concerning the nature and
extent of records available at the Commission's public reference room in
Washington or at its other public reference facilities may be made in
person or by telephone. The addresses and telephone numbers of all
Commission Regional and Branch Offices are set forth at paragraph (c)(1)
of this section. Written inquiries may be addressed to the Securities
and Exchange Commission, Public Reference Branch, 450 Fifth Street, NW.,
Washington, DC 20549, or to a particular regional office.
(d) Requests for Commission records and copies thereof -- (1) Time
and place of requests for access to Commission records. Requests for
access to records available through the Commission's public reference
facilities may be made in person during normal business hours at those
facilities or by mail directed to Public Reference Branch, Securities
and Exchange Commission, Washington, DC 20549. In addition, access to
agency records not available in public reference facilities may be
requested pursuant to the Freedom of Information Act. Such requests
must be in writing, should be clearly and prominently identified by a
legend on the first page, such as ''Freedom of Information Act
Request'', and should be addressed to the Freedom of Information Act
Officer, Securities and Exchange Commission, Washington, DC 20549.
(2) Requests for copies of records. Requests for copies of
Commission records available through the Commission's public reference
facilities, including those listed in appendix A to this section, may be
made directly to the appropriate facility either in person or by mail
addressed to the Securities and Exchange Commission, Public Reference
Branch, Washington, DC 20549. Levels of service and charges for copies
are set out in the Commission's schedule of fees in appendix E to this
section. Requests for copies of materials to which access has been
granted pursuant to a Freedom of Information Act request will be
processed pursuant to regulations found in this section in paragraphs
(e)(9) and (e)(10) and at charges set out in appendix E to this section.
(3) Description of requested records. Each request for Commission
records or copies thereof shall reasonably describe the records sought
with sufficient specificity with respect to names, dates and subject
matter to permit the records to be located among the records maintained
by or for the Commission. A person who has requested Commission records
or copies thereof will be promptly advised if the records cannot be
located on the basis of the description given and that further
identifying information must be provided before his request can be
satisfied.
(4) Normal availability. Records maintained in the Commission's
public reference facilities or copies thereof will normally be made
available in keeping with levels of service and fees set out in appendix
E to this section. Records requested pursuant to the Freedom of
Information Act will be made available as described in paragraphs (e)(9)
and (e)(10) of this section.
(5) Initial determinations, denials. With respect to any record
requested pursuant to the Freedom of Information Act, the Freedom of
Information Act Officer of the Commission will determine within ten days
(excepting Saturdays, Sundays, and legal public holidays) after the
receipt of a request for inspection of the record or for a copy (or
within such extended period as may be permitted in accordance with
paragraph (d)(7) of this section) whether to comply with such request,
and shall immediately notify the person making such request of such
determination and, where it is determined not to comply, the reasons
therefor, and of the right of such person to appeal to the General
Counsel any adverse determination: Provided, That a Director of a staff
Division of the Commission or Office head whose zone of responsibility
relates to the record requested (See 17 CFR 200.13, et seq.) may make a
determination that the record or copy is not lawfully required to be
made available and should not be made available, in which case he, and
not the Freedom of Information Act Officer, shall make the required
notification. The notification of denial of any request for records
shall set forth the name and title or position of each person
responsible for the denial.
(6) Administrative review. Any person who has been notified pursuant
to paragraph (d)(5) of this section that his request for inspection of a
record or for a copy has been denied, or who has received no response to
a request for a record or copy within ten days (or within such extended
period as may be permitted in accordance with paragraph (d)(7) of this
section) after his request was received by the Commission's staff, may
appeal to the General Counsel the adverse determination or the failure
to respond.
(i) The appeal shall be in writing, shall be clearly and prominently
identified on the envelope or other cover and at the top of the first
page by a legend such as ''Freedom of Information Act Appeal,'' and
shall identify the record in the form in which it was originally
requested.
(ii) The appeal shall be delivered in person to the Public Reference
Branch, Room 1024, 450 Fifth Street, NW., Washington, DC, or sent by
mail addressed to the Freedom of Information Act Officer, Securities and
Exchange Commission, Washington, DC 20549. A copy should be sent to the
General Counsel, Securities and Exchange Commission, Washington, DC
20549.
(iii) The appeal may include such facts and cite such legal or other
authorities as the person submitting the appeal may consider
appropriate.
(iv) The General Counsel shall have the authority to grant or deny
all appeals, in whole or in part, and to release as an exercise of
discretion records exempt from mandatory disclosure under 5 U.S.C.
552(b). In appropriate cases he or she may, in his or her sole and
unfettered discretion, refer appeals to the Commission for
determination.
(v) A determination with respect to any appeal shall be made within
twenty days (excepting Saturdays, Sundays and legal public holidays)
after the receipt of such appeal or within such extended period as may
be permitted in accordance with paragraph (d)(7) of this section.
(vi) A denial of an appeal in whole or in part shall set forth the
basis for the denial, and shall advise the requester that judicial
review of the decision is available in accordance with 5 U.S.C.
552(a)(4).
(7) Extension of time to consider requests and to consider
administrative appeals. In unusual circumstances, as specified in this
paragraph, the time limits prescribed in either paragraphs (d) (5) or
(6) of this section may be extended by written notice to the person
making a request for a record or a copy, setting forth the reasons for
such extension and the date on which a determination is expected to be
dispatched. No such notice shall specify a date that would result in an
extension for more than ten working days. As used in this paragraph,
''unusual circumstances'' means, but only to the extent reasonably
necessary to the proper processing of the particular request:
(i) The need to search for and collect the requested records from
field facilities or other establishments that are separate from the
office processing the request. (Many records of the Commission are
stored in Federal Records Centers in accordance with law -- including
many of the documents which have been on file with the Commission for
more than 2 years -- and cannot be made available for several days after
a request has been made. Other records may temporarily be located at a
regional or branch office of the Commission. Any person who has
requested for personal examination a record stored at the Federal
Records Center or temporarily located in a regional or branch office of
the Commission will be notified when and where the record will be made
available to him. Any person who has ordered a copy of such record will
be provided with a copy as soon as practicable). Some records have been
disposed of in accordance with the Commission's Records Control Schedule
(17 CFR 200.80(f)).
(ii) The need to search for, collect, and appropriately examine a
voluminous amount of separate and distinct records which are demanded in
a single request. (While every reasonable effort will be made fully to
comply with each request as promptly as possible on a first-come,
first-served basis, work done to search for, collect and appropriately
examine records in response to a request for a large number of records
will be contingent upon the availability of processing personnel in
accordance with an equitable allocation of time to all members of the
public who have requested or wish to request records.)
(iii) The need for consultation, which shall be conducted with all
practicable speed, with another agency having a substantial interest in
the determination of the request or among two or more components within
the Commission having substantial subject-matter interest therein.
(8) Inability to comply with time requirements. If the Commission
should be unable to comply with the applicable time limits contained in
this paragraph (d) of this section in responding to a request for
records, it shall send written notice of the reason for delay to the
person who made the request and shall be prepared to demonstrate the
existence of exceptional circumstances and that the Commission is
exercising due diligence in responding to the request for records.
(i) Records in use for another member of the public. Any record
being inspected by or copied for another member of the public will be
made available as soon as practicable.
(ii) Records in use by a member of the Commission or its staff.
Although every effort will be made to make a record in use by a member
of the Commission or its staff available when requested, it may
occasionally be necessary to delay making such a record available when
doing so at the time the request is made would seriously interfere with
the work of the Commission or its staff.
(iii) Missing or lost records. Any person who has requested a record
or copy will be notified if the record sought cannot be found. If he so
requests, he will be notified if it should subsequently be located.
(9) Oral requests; misdirected written requests -- (i) Telephone and
other oral requests. While the Commission's staff will attempt in good
faith to comply with requests for copies of records made orally, by
telephone, or otherwise, the Commission cannot assure a timely or
satisfactory response to such requests due to the risk of
misunderstanding inherent in the use of oral communication. The
Commission will not entertain any appeal from an alleged denial or
failure to comply with an oral request. Any person who has orally
requested a copy of a record that he believes to have been improperly
denied to him should resubmit his request in appropriate written form in
order to obtain proper consideration and, if need be, administrative
review.
(ii) Misdirected written requests. The Commission cannot assure that
a timely or satisfactory response will be given to written requests for
inspection or copies of records that are directed to the Commission
other than in the manner prescribed in paragraphs (d) (1) and (2) of
this section. Any staff member who receives a written request for
records should promptly forward the request to the Freedom of
Information Act Officer. Misdirected requests for records will be
considered to have been received for purposes of paragraph (d) of this
section only when they have been actually received by the Freedom of
Information Act Officer. The Commission will not entertain any appeal
from an alleged denial or failure to comply with a misdirected request,
unless it is clearly shown that the request was in fact received by the
Freedom of Information Act Officer.
(e) Fees for records services. A current schedule of fees for record
services, including locating and making records available, attestations
and copying, appears in appendix E to this subpart D, 17 CFR 200.80e.
Copies of the current schedule of fees may also be obtained upon request
made in person, by telephone or by mail from the public reference room
or at any regional office of the Commission.
(1) Services provided without charge. Generally, up to one-half hour
of staff time devoted to searching for Commission records will be
provided without charge. Where a request for records pursuant to the
Freedom of Information Act is determined not to serve a commercial
purpose as defined in paragraph (e)(10)(ii) of this section, a total of
two staff hours of search and review and one hundred pages of
duplication as defined in paragraphs (e)(9)(i), (e)(9)(ii) and
(e)(9)(iii) of this section, respectively, shall be made available
without charge in the form most economical for the government.
(2) Services for which fees are charged. For records available
through the Commission's public reference facilities, requestors may
make arrangements for duplication in accordance with provisions of the
Commission's dissemination contract. Copies of that contract, which
contain tables of charges, may be inspected in the public reference
room, 450 Fifth Street, NW., Room 1024, Washington, DC. A complete
schedule of services offered by the contractor and fees charged for
those services is available through the Commission's public reference
facilities. Fees for services provided in connection with requests made
pursuant to the Freedom of Information Act shall be assessed as set out
in appendix E to this section and in keeping with guidelines and
procedures described in paragraphs (e)(9) and (e)(10) of this section.
(3) Requests requiring large expenditures. A request for Commission
records may state that the requesting person is willing to pay fees up
to a stated limit for services to be provided in locating and making
available requested records. In such circumstances, no work will be
done that will result in fees beyond the stated limit without further
written authorization. If no limit is initially stated by the person
requesting records or copies, services in locating and making available
the requested records will not be done so as to exceed fees of $25
(exclusive of applicable copying charges) without the express written
authorization by the requesting person, and he will be so advised.
(4) Waiver or reduction of fees. Requested records shall be
furnished without charge or at reduced charge whenever it shall be
determined by the Director of the Office of Consumer Affairs and
Information Services that waiver or reduction of the fee is in the
public interest because furnishing the information can be considered as
primarily benefiting the general public; provided the information will
significantly assist citizens in understanding the working of their
government; and the purpose of the request is not primarily commercial
as defined in paragraph (e)(10)(ii) of this section. Requests for
waiver or reduction of fees for searching and/or copying may be
submitted with the original request for records and should state such
facts as the requester considers appropriate. Denials of requests for a
waiver or reduction of fees may be appealed to the General Counsel in
accordance with the procedure set forth in paragraph (d)(6) of this
section.
(5) Records obtained from Federal Records Centers. When, to fill a
request for inspection or copying, records are required to be obtained
from a Federal Records Center, fees, in addition to those provided on
the Commission's current schedule of fees, will be charged to the extent
authorized or required by rules or regulations promulgated by the
National Archives and Records Administration.
(6) Attestations. In addition to any other fees or charges which may
apply, a fee will be charged for records attestations as provided in the
Commission's current schedule of fees. The seal of the Commission will
be affixed to all attestations without additional charge.
(7) Copying services. Copies of records filed with or retained by
the Commission, or portions thereof, will be provided subject to fees
established by agreement between the Commission and a private contractor
as set forth in the Commission's current schedule of fees and, where
applicable, procedures and guidelines for Freedom of Information Act
requests as set out in paragraphs (e)(9) and (e)(10) of this section.
(i) Facsimile copies. Requests for facsimile copies may be made
either in person at the Commission's Washington, DC, New York, or
Chicago public reference rooms, or by mail addressed to the Securities
and Exchange Commission, Public Reference Room Branch, 450 Fifth Street,
NW., room 1024, Washington, DC 20549. The contractor will send copies
directly to the purchaser unless attestation is requested. Persons who
request copies of documents through the public reference room will be
billed by the contractor at regulated prices, and will be billed
separately by the Commission for search, review and attestation charges,
if any. Copies of documents requested directly from the contractor or
from any other information service or vendor are not subject to
regulated prices. Special classes of copying services, such as
telecopies, not listed herein or in the current schedule of fees posted
in the public reference room, are not provided or regulated by the
Commission, but may be obtained from private vendors at market prices.
(ii) Microfiche copies. A contractor also makes available to the
public microfiche copies of certain public documents on file with the
Commission, at prices and on terms governed by its contract with the
Commission. Microfiche services include subscription microfiche service
on an annual basis. Microfiche subscription prices are regulated by the
Commission whether requested through the public reference room or
directly from the contractor. Certain other microfiche services are
provided at prices that are regulated by the Commission only if ordered
through the Commission's public reference room. The Commission will
accept only subscription requests made in writing, although the
contractor may elect to accept subscription requests by telephone. All
microfiche subscription charges are payable directly to the contractor,
whether placed through the Commission or not. Information concerning
the types and cost of regulated microfiche services may be obtained by
writing to the Commission at its public reference room located at 450
Fifth Street, NW., room 1024, Washington, DC 20549 or calling this
facility at 202-272-3100.
(iii) Transcripts of public hearings. Copies of the transcripts of
recent public hearings may be obtained from the reporter subject to the
fees established annually by contract between the Commission and the
reporter. Copies of that contract, which contains tables of charges,
may be inspected in the public reference room, 450 Fifth Street, NW.,
Room 1024, Washington, D.C. and in each regional and branch office.
Copies of other public transcripts may be obtained, in the manner of
other Commission records, subject to the charges referred to in
paragraph (e)(7)(i) of this section.
(8) Releases and publications. (i) The Commission's decisions,
reports, orders, rules and regulations are published initially in the
form of releases and distributed.
(ii) The Commission publishes daily the SEC News Digest, which
summarizes the releases published by the Commission each day, contains
Commission announcements, and lists certain filings with the Commission.
The Commission publishes weekly the SEC Docket, which prints the full
text of every Commission release.
(iii) The Commission publishes an annual report to the Congress which
sets forth the results of the Commission's operations during the past
fiscal year under the various statutes committed to its charge. Copies
may be obtained from the Superintendent of Documents, Government
Printing Office, Washington, DC 20402.
(iv) The Commission also makes other information in the fields of
securities and finance, including economic studies, available to the
public through the issuance of releases on specific subject matters.
(v) A classification of the releases available from the Commission
appears below as appendix B to this section. Other publications
available from the Commission are set forth in appendix C to this
section. Copies of rules, regulations, and miscellaneous publications
set forth in appendix D to this section may be purchased from the
Superintendent of Documents, U.S. Government Printing Office,
Washington, DC 20402.
(9) Fees for services required for processing Freedom of Information
Act Requests. In cases where records are requested pursuant to the
Freedom of Information Act and according to procedures set forth in
paragraph (d)(1) of this section, fees shall be charged as set out in
the Commission's current schedule of fees, appendix E to this section,
for services as described in the following:
(i) Search. The term ''search'' includes all time spent looking for
material manually or by using electronic data processing equipment that
is responsive to a request, as distinguished from ''review'' as defined
at paragraph (e)(9)(ii) of this section. Searching for requested and
specifically identified information, as described in paragraph (d)(1) of
this section, includes the cost of staff time devoted to the search as
indicated in appendix E to this section and direct costs for use of
Commission electronic data processing equipment.
(ii) Review. The term ''review'' refers to the process of examining
documents located in response to a request to determine whether any
portion of any document is permitted to be withheld pursuant to
provisions of the Freedom of Information Act. It also includes
processing any documents for disclosure, e.g., doing all that is
necessary to excise material from and otherwise prepare them for
release.
(iii) Duplication. The term ''duplication'' refers to producing
paper or microform copies of records. The Commission shall charge for
duplication as established by agreement between the Commission and a
private contractor. These charges are currently set out in appendix E
to this section. Such charges shall be set so as not to exceed the
direct cost that would be incurred by the Commission if it were to
perform such services itself, as calculated to include the salary of
operators, the cost of reproduction machinery, the cost of material and
any other direct costs incurred by the Commission in copying materials
responsive to a Freedom of Information Act request.
(iv) Partial exemption from fee provisions. No fees shall be charged
for the first two hours of search time and the first one hundred pages
of materials for requesters described in paragraphs (e)(10)(i) and
(e)(10)(iii) of this section.
(v) Minimum fee. Fees will not be charged if the normal cost of
collecting a fee would be equal to or greater than the fee itself.
(10) Classification of Freedom of Information Act requesters for
purposes of assessing fees. Parties requesting records pursuant to the
Freedom of Information Act will be classified and charged fees described
in appendix E to this section as follows:
(i) The following types of requesters shall be charged for
duplication of records as described in paragraph (e)(9)(iii) of this
section as qualified in paragraph (e)(9)(iv) of this section:
Educational institutions requesting information for purposes of
scholarly research; non-commercial scientific institutions requesting
information for purposes of scientific research; and representatives of
the news media requesting information concerning current events or
matters of current interest to the general public.
(ii) Commercial requesters, defined as parties other than those
mentioned in paragraph (e)(10)(i) of this section who are requesting
information to be used in any way which could reasonably be expected to
result in corporate or personal financial gain or profit, shall be
charged for search, review and duplication of records as described in
paragraphs (e)(9)(i), (e)(9)(ii) and (e)(9)(iii), respectively, of this
section.
(iii) All parties other than those described in paragraphs (e)(10)(i)
and (e)(10)(ii) of this section requesting access to such records shall
be charged for search and duplication of records as described in
paragraphs (e)(9)(i) and (e)(9)(iii) of this section, respectively, as
qualified in paragraph (e)(9)(iv) of this section.
(11) Appeal of classification. Classification under the provisions
of paragraph (e)(10) of this section may be appealed to the General
Counsel in accordance with the procedure set forth in paragraph (d)(6)
of this section.
(12) Aggregation of requests. If the Freedom of Information Act
Officer reasonably believes that a requester or group of requesters
acting in concert is attempting to divide one request into a series of
requests for the purpose of evading the assessment of fees, those
requests may be aggregated and charges assessed accordingly.
(13) Advance payment. The Freedom of Information Act Officer may
require advance payment of fees expected to be incurred in connection
with a request, but only when the subject requester has failed to make
timely payment in the past, or when the estimated processing costs
exceed $250.00 and the requester has no previous payment records or has
failed to make timely payment in the past. Processing in such cases
shall be delayed until advance payment is received and statutory time
limits will be appropriately extended.
(14) Interest on unpaid bills. On the 31st day following the date of
a bill to a requester, the Commission may begin assessing interest on
the unpaid amount at the rate prescribed in section 3717 of title 31 of
the U.S. Code. Interest will accrue from the date of the bill.
(40 FR 8799, Mar. 3, 1975)
Editorial Note: For Federal Register citations affecting 200.80,
see the List of CFR Sections Affected in the Finding Aids section of
this volume.
17 CFR 200.80a Appendix A -- Documentary materials available to the
public.
Requests or petitions that a change in the Commission's rules,
regulations or forms be made; comments on proposed rules, regulations
or forms; issuance, amendment or repeal of rules, regulations or forms
promulgated under the various Acts administered by the Commission.
Requests for no-action and interpretative letters and responses
thereto.
Transcripts of proceedings in public hearings including testimony,
exhibits received in evidence, intermediate decisions, oral arguments,
motions, briefs, exceptions.
Commission findings, opinions, orders, rulings and notices issued for
public release.
Final opinions of the Commission, including concurring and dissenting
opinions, as well as orders made by the Commission in the adjudication
of cases.
A record of the final votes of each member of the Commission in every
Commission proceedings concluded after July 1, 1967.
Hearings and comments on proposed rules or statements of policy,
etc., except where the writer requests that his comments not be made
public.
Periodic reports filed by the International Bank for Reconstruction
and Development under Regulation BW -- Rules 1 to 4, section 15(a) of
the Bretton Woods Agreement Act (17 CFR Part 285).
Periodic reports filed by the Inter-American Development Bank,
pursuant to Regulation IA (17 CFR Part 286) adopted pursuant to section
11(a) of the Inter-American Bank Act.
Periodic reports filed by the Asian Development Bank, pursuant to
Regulation AD (17 CFR Part 287) adopted pursuant to section 11(a) of the
Asian Development Bank Act.
Copies of papers filed in court, and papers and documents received
from courts, are primarily for the use of the Commission attorneys and
other members of the staff. These may not always be complete and
accurate and may contain nonpublic staff notations. However, in
appropriate situations, with the approval of the Office of the General
Counsel, examination of such material may be made or copies obtained as
a matter of courtesy.
Statements of policy and interpretations which have been adopted by
the Commission and are not published in the Federal Register.
Administrative staff manuals and instructions to the staff that
affect a member of the public.
Reports by the Commission to the Congress as a whole.
Notices of Commission meetings announced to the public as described
in 200.403; announcements of Commission action to close a meeting, or
any portion thereof, as described in 200.404(b) and 200.405(c); and
certifications by the General Counsel, pursuant to 200.406, that a
Commission meeting, or any portion thereof, may be closed to the public.
(41 FR 44696, Oct. 12, 1976, as amended at 42 FR 14693, Mar. 16,
1977)
17 CFR 200.80b Appendix B -- SEC releases.
Free mailing list distribution of releases has been discontinued by
the Commission because of rising costs and staff limitations. However,
the texts of all releases under the various Acts, the corporate
reorganization releases, and the litigation releases are contained in
the SEC Docket, which may be purchased through the Superintendent of
Documents as described in 200.80c of this part. The Statistical series
releases are contained in the SEC Monthly Statistical Review, which also
can be obtained by purchase through the Superintendent of Documents.
(40 FR 1009, Jan. 6, 1975, as amended at 49 FR 12686, Mar. 30, 1984;
52 FR 24148, June 29, 1987; 52 FR 48193, Dec. 21, 1987)
17 CFR 200.80c Appendix C -- Rules and miscellaneous publications
available from the Government Printing Office.
(a) The current rules of the Commission are not published by the
Commission in pamphlet form. All SEC public rules and regulations,
including its Rules of Practice, are contained in title 17 of the Code
of Federal Regulations, which also is available for purchase from the
Superintendent of Documents, Government Printing Office, Washington, DC
20402. New rules and rules changes, and other Commission releases,
except statistical releases, also are published in the Federal Register
as they are adopted.
(b) Copies of the following miscellaneous publications may be
purchased from the Superintendent of Documents, Government Printing
Office, Washington, DC 20402. Please address to him directly all
inquiries, orders and payments concerning the following publications:
1. Reports.
SEC Annual Report to the Congress.
2. Periodicals.
Official Summary. A monthly summary of securities transactions and
holdings reported under the provisions of the Securites Exchange Act of
1934, the Public Utility Holding Company Act of 1935, and the Investment
Company Act of 1940 by officers, directors, and certain other persons.
SEC Monthly Statistical Review. A monthy publication containing data
on round-lot and odd-lot share volume in stock exchanges, OTC volume in
selected securities, block distributions, securities registrations and
offerings, net change in corporate securities outstanding, working
capital of U.S. corporations, assets of non-insured pension funds, Rule
144 filings and 8K reports.
Directory of Companies Filing Annual Reports with the Securities and
Exhange Commission under the Securities Exchange Act of 1934. Published
annually. Lists companies alphabetically and classified by industry
groups according to the Standard Industrial Classification Manual of the
Bureau of the Budget.
(40 FR 1010, Jan. 6, 1975, as amended at 49 FR 12686, Mar. 30, 1984;
52 FR 24148, June 29, 1987; 52 FR 48193, Dec. 21, 1987)
17 CFR 200.80d Appendix D -- Other publications available from the
Commission.
(a) Limited amounts of the following materials among others are
available free of charge upon request to the Commission's Publications
Section, Public Reference Branch, 202-272-7460:
Work of the Securities and Exchange Commission.
Blank copies of all forms used under each of the Acts administered by
the Commission.
(b) Facsimile copies of other SEC publications which are out of print
may be obtained through the Commission's Public Reference Section, at
the cost of the copying service to be performed by the commercial copier
employed to do the copying. Purchasers of copies will be billed by the
copier. An example of the publications which are available in this way
is the Litigation Actions and Proceedings Bulletin.
(52 FR 24148, June 29, 1987; 52 FR 48193, Dec. 21, 1987)
17 CFR 200.80e Appendix E -- Schedule of fees for records services.
Search and review services: Up to one half hour total -- No fee.
For each one half hour or fraction thereof of chargeable service -- up
to GS-11 employee performing service: $8.00; GS-12 or above employee
performing service: $14.00.
Attestation with Commission seal: $4.00
Duplication services: The following duplication services are
available. The stated time for delivery in each case begins to run only
after receipt of the material by the contractor; if files cannot
immediately be made available by the Commission, the time of shipment
will be affected.
Regular service. Paper (facsimile) copies of original paper copies,
or from microfiche accessible to the contractor, will be shipped within
seven calendar days after order and material are received by the
contractor -- each page -- $0.20. (Delivery costs and applicable sales
taxes are additional).
Other services. The Commission's dissemination contractor also
provides a wide range of additional regulated dissemination services
through the Commission's public reference rooms. Two offsite services
also are provided at prices that are regulated: microfiche
subscriptions and watch services. Information concerning the
availability of all dissemination services may be obtained by writing to
the Commission's public reference room located at 450 Fifth Street, NW.,
room 1024, Washington, DC 20549 or calling 202-272-3100. Copies made
pursuant to requests submitted to the Commission's public reference room
will be filled by the contractor and sent directly to the purchaser,
unless attestation is requested. The contractor will bill the purchaser
directly for the cost of copies plus postage or other delivery charges,
and applicable taxes. Purchasers shall make full payment directly to
the contractor for these services. Search, review or attestation
charges will be billed separately by the Commission.
(52 FR 24148, June 29, 1987; 52 FR 48193, Dec. 21, 1987, as amended
at 55 FR 41189, Oct. 10, 1990)
17 CFR 200.80f Appendix F -- Records control schedule.
(47 FR 47546, Oct. 27, 1982)
17 CFR 200.81 Publication of interpretative, no-action and certain
exemption letters and other written communications.
(a) Except as provided in paragraphs (b) and (c) of this section,
every letter or other written communication requesting the staff of the
Commission to provide interpretative legal advice with respect to any
statute administered by the Commission or any rule or regulation adopted
thereunder; or requesting a statement that, on the basis of the facts
stated in such letter or other communication, the staff would not
recommend that the Commission take any enforcement action; or
requesting an exemption, on the basis of the facts stated in such
letter, from the provisions of the Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.) or any rule or regulation thereunder, where the
issuance of an order granting such exemption does not require public
notice and an opportunity for hearing; together with any written
response thereto, shall be made available for inspection and copying by
any person as soon as practicable after the response has been sent or
given to the person requesting it.
(b) Any person submitting such letter or other written communication
may also submit therewith a request that it be accorded confidential
treatment for a specified period of time, not exceeding 120 days from
the date the response, together with a statement setting forth the
considerations upon which the request for such treatment is based. If
the staff determines that the request is reasonable and appropriate it
will be granted and the letter or other communication will not be made
available for public inspection or copying until the expiration of the
specified period. If it appears to the staff that the request for
confidential treatment should be denied, the staff shall so advise the
person making the request and such person may withdraw the letter or
other communication within 30 days thereafter. In such case, no
response will be sent or given and the letter or other communication
shall remain in the Commission's files but will not be made public. If
such letter or other communication is not so withdrawn, it shall be
deemed to be available for public inspection and copying together with
any written response thereto.
Note: All letters or other written communications requesting
interpretative advice, a no-action position, or an exemption shall
indicate prominently, in a separate caption at the beginning of the
request, each section of the Act and each rule to which the request
relates. If more than one section or rule is involved, a separate copy
of the request shall be submitted for each section or rule involved and
an additional copy for the use of the staff of the Commission.
(c) This section shall not apply, however, to letters of comment or
other communications relating to the accuracy or adequacy of any
registration statement, report, proxy, or information statement or other
document filed with the Commission, or relating to the extent to which
such statement, report, or document complies with any applicable
requirement. Further, this section shall not apply to applications or
other written communications filed pursuant to 240.24b-2 that relate to
objections to public disclosure of information filed with the Commission
or any exchange.
(35 FR 17779, Nov. 19, 1970, as amended at 53 FR 12413, Apr. 14,
1988; 53 FR 32605, Aug. 26, 1988)
17 CFR 200.82 Public availability of materials filed pursuant to
240.14a-8(d) and related materials.
Materials filed with the Commission pursuant to Rule 14a-8(d) under
the Securities Exchange Act of 1934 (17 CFR 240.14a-8(d)), written
communications related thereto received from any person, and each
related no-action letter or other written communication issued by the
staff of the Commission, shall be made available to any person upon
request for inspection or copying.
(37 FR 20558, Sept. 30, 1972)
17 CFR 200.83 Confidential treatment procedures under the Freedom of
Information Act.
(a) Purpose. This section provides a procedure by which persons
submitting information in any form to the Commission can request that
the information not be disclosed pursuant to a request under the Freedom
of Information Act, 5 U.S.C. 552. This section does not affect the
Commission's right, authority, or obligation to disclose information in
any other context. This section is procedural only and does not provide
rights to any person or alter the rights of any person under the Freedom
of Information Act or any other applicable statute or regulation.
(b) Scope. The provisions of this section shall apply only where no
other statute or Commission rule provides procedures for requesting
confidential treatment respecting particular categories of information
(see, e.g., 17 CFR 240.24b-2) or where the Commission has not specified
that an alternative procedure be utilized in connection with a
particular study, report, investigation, or other matter. The
provisions of this section shall not apply to any record which is
contained in or is part of a personnel, medical or similar file relating
to a Commission member or employee which would normally be exempt from
disclosure pursuant to section 552(b)(6) of title 5, U.S. Code.
(c) Written request for confidential treatment to be submitted with
information. (1) Any person who, either voluntarily or pursuant to any
requirement of law, submits any information or causes or permits any
information to be submitted to the Commission, which information is
entitled to confidential treatment and for which no other specific
procedure exists for according confidential treatment, may request that
the Commission afford confidential treatment under the Freedom of
Information Act to such information for reasons of personal privacy or
business confidentiality, or for any other reason permitted by Federal
law, and should take all steps reasonably necessary to ensure, as nearly
as practicable, that at the time the information is first received by
the Commission (i) it is supplied segregated from information for which
confidential treatment is not being requested, (ii) it is appropriately
marked as confidential, and (iii) it is accompanied by a written request
for confidential treatment which specifies the information as to which
confidential treatment is requested.
(2) Except in the circumstances covered by paragraph (c)(4), all
records which contain information for which a request for confidential
treatment is made or the appropriate segregable portions thereof should
be marked by the person submitting the records with a prominent stamp,
typed legend, or other suitable form of notice on each page or
segregable portion of each page, stating ''Confidential Treatment
Requested by (name).'' If such marking is impractical under the
circumstances, a cover sheet prominently marked ''Confidential Treatment
Requested by (name)'' should be securely attached to each group of
records submitted for which confidential treatment is requested. Each
of the records transmitted in this manner should be individually marked
with an identifying number and code so that they are separately
identifiable.
(3) In addition to providing a copy of any written request for
confidential treatment required by this section to the Commission
personnel receiving the information in question, the person requesting
confidential treatment shall also deliver or send by mail a copy of the
request (but not the records to which the request applies) to the
Freedom of Information Act Officer, Securities and Exchange Commission,
Washington, DC 20549. The written request shall be clearly and
prominently identified on the envelope or other cover and on the top of
the first page by the legend ''FOIA Confidential Treatment Request'' and
shall contain the name, address and telephone number of the requestor.
The requestor is responsible for informing the Commission promptly of
any changes in address or telephone number. In case records submitted
are not individually marked ''Confidential Treatment Requested by
(name),'' the written request for confidential treatment should refer to
the identifying numbers and codes placed on the records.
(4) In some circumstances, such as when a person is testifying in the
course of a Commission investigation or providing documents requested in
the course of a Commission inspection, it may be impracticable to submit
a written request for confidential treatment at the time the information
is first provided to the Commission. In no circumstances can the need
to comply with the requirements of this section justify or excuse any
delay in submitting information to the Commission. Rather, in such
circumstances, the person testifying or otherwise submitting information
should inform the Commission employee receiving the information, at the
time the information is submitted or as soon thereafter as possible,
that the person is requesting confidential treatment for the
information. The person shall then submit a written request for
confidential treatment within 30 days of the submission of the
information. Any request for confidential treatment submitted pursuant
to this paragraph shall be clearly and prominently identified as
provided in paragraph (c)(3) of this section and shall be delivered or
sent by mail both to the Commission personnel who received or is known
to have custody of the information and to the Freedom of Information Act
Officer, Securities and Exchange Commission, Washington, DC 20549.
(5) Where confidential treatment is requested by the submitter on
behalf of other persons, the request should identify those persons and
provide the telephone number and address of such person or the
responsible representative thereof if the submitter would be unable to
provide prompt substantiation of the request at the appropriate time.
(6) No determination as to the validity of any request for
confidential treatment will be made until a request for disclosure of
the information under the Freedom of Information Act is received.
(d) Substantiation of request for confidential treatment. (1) If it
is determined that records which are the subject of a request for access
under the Freedom of Information Act are also the subject of a request
for confidential treatment under this rule and no other grounds appear
to exist which would justify the withholding of the records (e.g.,
Freedom of Information Act Exemption 7(A), 5 U.S.C. 552(b)(7)(A)), the
Commission's Freedom of Information Act Officer promptly shall so inform
the person requesting confidential treatment or, in the case of a
request made on behalf of a person other than the submitter, the person
identified as able to provide substantiation, by telephone, telegram or
express mail and require that substantiation of the request for
confidential treatment be submitted in ten calendar days.
(2) Substantiation of a request for confidential treatment shall
consist of a statement setting forth, to the extent appropriate or
necessary for the determination of the request for confidential
treatment, the following information regarding the request:
(i) The reasons, concisely stated and referring to specific exemptive
provisions of the Freedom of Information Act, why the information should
be withheld from access under the Freedom of Information Act;
(ii) The applicability of any specific statutory or regulatory
provisions which govern or may govern the treatment of the information;
(iii) The existence and applicability of any prior determinations by
the Commission, other Federal agencies, or a court, concerning
confidential treatment of the information;
(iv) The adverse consequences to a business enterprise, financial or
otherwise, that would result from disclosure of confidential commercial
or financial information, including any adverse effect on the business'
competitive position;
(v) The measures taken by the business to protect the confidentiality
of the commercial or financial information in question and of similar
information, prior to, and after, its submission to the Commission;
(vi) The ease or difficulty of a competitor's obtaining or compiling
the commercial or financial information;
(vii) Whether the commercial or financial information was voluntarily
submitted to the Commission and, if so, whether and how disclosure of
the information would tend to impede the availability of similar
information to the Commission;
(viii) The extent, if any, to which portions of the substantiation of
the request for confidential treatment should be afforded confidential
treatment; and
(ix) Such additional facts and such legal and other authorities as
the requesting person may consider appropriate.
(e) Appeal from initial determination that confidential treatment is
not warranted. (1) If it is determined by the Commission's Freedom of
Information Act Officer that confidential treatment is not warranted
with respect to all or part of the information in question, the person
requesting access to the information under the Freedom of Information
Act and the person requesting confidential treatment will be so notified
by telephone, telegram or express mail. The person requesting
confidential treatment will also be informed that any appeal of such
decision must be taken to the Commission's General Counsel within ten
calendar days of the date of the notice. Information which is
determined not to be entitled to confidential treatment may be released
under the Freedom of Information Act ten calendar days after notice to
the person requesting confidential treatment. If within that ten
calendar day period the General Counsel has actually received an appeal
from the person requesting confidential treatment, the person requesting
access to the information under the Freedom of Information Act will be
informed of the pending appeal and that no disclosure of the information
will be made until the appeal is resolved.
(2) Any appeal of a denial of a request for confidential treatment
shall be in writing, and shall be clearly and prominently identified on
the envelope or other cover and at the top of the first page by the
legend ''FOIA Confidential Treatment Appeal.'' The appeal should be
delivered or sent by mail to the General Counsel, with a copy to the
Freedom of Information Act Officer. The person requesting confidential
treatment may supply additional substantiation of the request for
confidential treatment in connection with the appeal to the General
Counsel.
(3) The General Counsel shall have the authority to consider all
appeals from decisions of the Freedom of Information Act Officer with
respect to confidential treatment. All appeals taken under this section
will be considered by the General Counsel as expeditiously as
circumstances permit. Although other procedures may be employed, to the
extent possible, the General Counsel will decide the matter on the basis
of the affidavits and other documentary evidence submitted by the
interested persons and such other information as is brought to the
attention of the General Counsel in accordance with the provisions of
201.28 of this chapter. The General Counsel shall also have the
authority to enter and vacate stays under the circumstances set forth in
paragraph (e)(5) of this section. In appropriate cases the General
Counsel may, in his or her sole and unfettered discretion, refer appeals
and questions concerning stays under paragraph (e)(5) of this section to
the Commission for decision.
(4) If it is determined that confidential treatment is not warranted
with respect to all or any part of the information in question, the
person requesting confidential treatment will be so informed by
telephone, if possible, with a telegram or express mail letter directed
to the person's last known address. Disclosure of the information under
the Freedom of Information Act will occur ten calendar days after notice
to the person requesting confidential treatment, subject to any stay
entered pursuant to paragraph (e) (5) of this section.
(5) If within that ten calendar day period the General Counsel has
been notified that the person requesting confidential treatment has
commenced an action in a Federal court concerning the determination to
make such information publicly available, the General Counsel will stay
making the public disclosure of the information pending final judicial
resolution of the matter. The General Counsel may vacate a stay under
this section either on his or her own motion or at the request of a
person seeking access to the information under the Freedom of
Information Act. If the stay is vacated, the information will be
released under the Freedom of Information Act ten calendar days after
the person requesting confidential treatment is notified of this action
by telephone, if possible, with a telegram or express mail letter sent
to the person's last known address, unless the court orders otherwise.
(f) Initial determination that confidential treatment is warranted.
If it is determined by the Commission's Freedom of Information Act
Officer that confidential treatment is warranted, the person submitting
the information and the person requesting access to the information
under the Freedom of Information Act will be so informed by mail. The
person requesting access, pursuant to the Freedom of Information Act,
will also be informed of the right to appeal the determination to the
General Counsel. Any such appeal must be taken in accordance with the
provisions of the Freedom of Information Act and Commission rules
thereunder. See 17 CFR 200.80(d)(6).
(g) Effect of no prior request for confidentiality. (1) If access is
requested under the Freedom of Information Act to information which is
submitted to the Commission on or after October 20, 1980 with respect to
which no request for confidential treatment has been made pursuant to
either paragraph (c)(1) or (c)(4) of this section, it will be presumed
that the submitter of the information has waived any interest in
asserting an exemption from disclosure under the Freedom of Information
Act for reasons of personal privacy or business confidentiality, or for
other reasons.
(2) Notwithstanding paragraph (g)(1) of this section, in appropriate
circumstances, any person who would be affected by the public disclosure
of information under the Freedom of Information Act may be contacted by
Commission personnel to determine whether the person desires to make a
request for confidential treatment. Any request for confidential
treatment that is asserted in response to such inquiry shall be made in
accordance with provisions of this section.
(h) Extensions of time limits. Any time limit under this section may
be extended, in the discretion of the Commission, the Commission's
General Counsel, or the Commission's Freedom of Information Act Officer,
for good cause shown.
(45 FR 62421, Sept. 19, 1980, as amended at 47 FR 20289, May 12,
1982)
17 CFR 200.83 Subpart E -- Regulation Regarding Equal Employment
Opportunity
Authority: Secs. 19, 23, 48 Stat. 85, 901, as amended, sec. 20, 49
Stat. 833, sec. 319, 53 Stat. 1173, secs. 38, 211, 54 Stat. 841,
855; 15 U.S.C. 77s, 78w, 79t, 77sss, 80a-37, 80b-11.
Source: 26 FR 11290, Nov. 30, 1961, unless otherwise noted.
17 CFR 200.90 General statement.
The purpose of this subpart is to implement Part II of Executive
Order 10925, which reaffirms the policy expressed in Executive Order No.
10590 of January 18, 1955, with respect to the exclusion and
prohibition of discrimination against any employee or applicant for
employment in the Federal Government because of race, color, religion,
or national origin. This subpart applies to all positions in the
Securities and Exchange Commission, whether or not in competitive
service and supersedes the ''Regulations and Procedures under Executive
Order 10590'' adopted by the Commission on August 17, 1955.
17 CFR 200.91 Definitions.
(a) Commission means the Securities and Exchange Commission.
(b) Committee means the President's Committee on Equal Employment
Opportunity.
(c) Chairman means the Chairman of the Securities and Exchange
Commission.
(d) Executive Vice Chairman means the Executive Vice Chairman of the
Committee.
(e) Order means Executive Order 10925 of March 6, 1961.
17 CFR 200.92 Designation of Employment Policy Officer.
The Employment Policy Officer of the Commission shall be designated
by the Chairman. The Employment Policy Officer may designate, when
appropriate, Deputy Employment Policy Officers for each of the regional
offices of the Commission to assist the Employment Policy Officer. The
positions of the Employment Policy Officer and Deputy Employment Policy
Officer shall be established outside the office handling the personnel
matters of the Commission unless prior approval is received from the
Executive Vice Chairman. In the discharge of his functions, the
Employment Policy Officer shall be under the immediate supervision of
the Chairman. The name of each Employment Policy Officer, his official
title, address and telephone number, and any changes made in his
designation, shall be furnished to the Executive Vice Chairman.
17 CFR 200.93 Duties of the Employment Policy Officer.
The Employment Policy Officer shall:
(a) Advise the Chairman with respect to the preparation of
regulations, reports, and other matters dealing with the exclusion and
prohibition of discrimination under the order.
(b) Process complaints of alleged discrimination in personnel matters
within the Commission, and make recommendations to approve
administrative officials for such corrective measures as he may deem
necessary.
(c) Appraise the personnel operations of the department or agency at
regular intervals to assure their continuing conformity to the policy
expressed in the order of excluding and prohibiting discrimination.
17 CFR 200.94 Who may file.
Any aggrieved employee of the Commission or qualified applicant for
employment in the Commission who believes he has been discriminated
against because of race, creed, color or national origin may file a
written, signed complaint within 90 days from the date of the alleged
discrimination, unless such time is extended by the Employment Policy
Officer or the Executive Vice Chairman for good cause shown. The
complaint shall state specifically the action or personnel matter
complained of and shall contain a full factual statement to support the
allegations made.
17 CFR 200.95 Where to file.
Complaints may be filed with the Employment Policy Officer or with
the Committee. Those filed with the Committee may be referred to the
appropriate Employment Policy Officer for consideration, or may be
processed by the Committee pursuant to 5 CFR 401.22 (26 FR 6580). Where
complaints are filed with the Employment Policy Officer or Deputy
Employment Policy Officer, he shall transmit a copy of the complaint to
the Executive Vice Chairman.
17 CFR 200.96 Processing of complaints; time limitation.
Within 30 days from receipt of a complaint by the Employment Policy
Officer or within such additional time as may be allowed by the
Executive Vice Chairman for good cause shown, the Employment Policy
Officer shall process the complaint and submit to the Executive Vice
Chairman a report on disposition of the complaint. Where the
complainant requests a hearing, the report on the disposition of the
complaint may be submitted to the Executive Vice Chairman within 60 days
after the receipt thereof.
17 CFR 200.97 Investigation.
The Employment Policy Officer shall institute a prompt investigation
of each complaint, and shall be responsible for developing a complete
case record, including an adequate transcript of agreed summary of any
hearing, sufficient to dispose of all relevant issues. Whenever
necessary or appropriate for a full development of the case, the
investigation shall include an appraisal of employment practices in the
organizational segment or unit in which the alleged discrimination
occurred. In those instances where no discrimination is found, the
complainant shall be advised of such finding, of the results of the
investigation, and of his right to secure a review by the Executive Vice
Chairman.
17 CFR 200.98 Negotiation and settlement.
After completion of the investigation, if the Employment Policy
Officer believes there is sufficient justification for the complaint to
support an effort to dispose of the matter informally, an attempt should
be made to resolve the matter by informal means.
17 CFR 200.99 Opportunity for hearing and review.
(a) In any case not disposed of by informal means, the complainant
shall be afforded an opportunity for an oral hearing before the
Employment Policy Officer or someone designated by him, at a convenient
time and place. At such hearing, the Commission shall produce any
witnesses in its employ, upon a showing satisfactory to the hearing
officer of reasonable necessity therefor, and the rights of
confrontation and of cross-examination (insofar as may be necessary for
a development of the facts), shall be preserved. Any requests for the
attendance of necessary witnesses in the Commission's employ shall be
made in writing of the complainant at least 10 days prior to the date of
the hearing.
(b) The complainant shall have the right to inspect any investigative
report except where the Executive Vice Chairman determines that any
report or portions thereof shall not be disclosed for reasons of
national security. The hearing shall be informal and the hearing
officer shall make his proposed findings and recommend conclusions upon
the basis of the record before him. Where a complainant fails to appear
without good cause shown or fails within 60 days to furnish requested
information or to otherwise process his complaint, such case may be
closed. The Employment Policy Officer may refer cases to the Executive
Vice Chairman for study and recommendation after the Employment Policy
Officer has formulated his findings and recommendations and prior to any
decision by the Employment Policy Officer.
17 CFR 200.100 Right to counsel.
Parties to proceedings under this regulation shall have the right to
be accompanied, represented and advised by counsel, or by other
qualified representative.
17 CFR 200.101 Final decision.
The Employment Policy Officer shall make the final decision in the
disposition of the case. Where the Employment Policy Officer has
referred the case to the Executive Vice Chairman for review and advisory
opinion, such final decision may be made only after receipt of the
recommendations of the Executive Vice Chairman. Further such final
decisions shall be reconsidered whenever reconsideration is recommended
or ordered by the Executive Vice Chairman.
17 CFR 200.102 Review of cases by Executive Vice Chairman.
The complainant may request the Employment Policy Officer to forward
his case to the Executive Vice Chairman for review. Such request must
be made by the complainant within 30 days of the date of final action by
the Employment Policy Officer, unless the Executive Vice Chairman shall
waive such time limitation upon good cause shown.
17 CFR 200.103 Report of disposition of complaints.
The Employment Policy Officer shall submit to the Executive Vice
Chairman a report of the final disposition of each complaint processed
by him. The report shall contain the following:
(a) A copy of the complete case record, if requested by the Executive
Vice Chairman.
(b) A summary of the complete case record, which shall include the
following:
(1) The name and address of the complainant.
(2) The date on which the complaint was filed with or referred to the
Employment Policy Officer.
(3) A summary of the complaint indicating the specific type or types
of discrimination alleged.
(4) A summary of the results of any appraisal of employment practices
and the significant facts disclosed by the investigation and any
hearing.
(5) A statement describing disposition of the complaint. If the
complaint was withdrawn, the reason for withdrawal should be included.
(6) The date of disposition of the complaint.
17 CFR 200.104 Dissemination of information.
A copy of this subpart shall be posted on all employee bulletin
boards and all bulletin boards which are used to announce Federal
examinations and job opportunities in the Commission; where bulletin
boards are not used, the regulations will be made available to all
personnel. Similar publication shall be made of the name and address of
the Employment Policy Officer and that of any Deputy Employment Policy
Officers in the regional offices serviced by them. Information
concerning the Commission's non-discrimination policy and procedures
shall be published at least annually.
17 CFR 200.104 Subpart F -- Code of Behavior Governing Ex Parte
Communications Between Persons Outside the Commission and Decisional
Employees
Authority: Secs. 19, 23, 48 Stat. 85, 901, as amended, sec. 20, 49
Stat. 833, sec. 319, 53 Stat. 1173, secs. 38, 211, 54 Stat. 841,
855; 15 U.S.C. 77s, 78w, 79t, 77sss, 80a-37, 80b-11; sec. 4,
Government in the Sunshine Act, Pub. L. 94-409.
17 CFR 200.110 Purpose.
This code is adopted in conformity with section 4 of the Government
in the Sunshine Act, Pub. L. 94-409, and is designed to insulate the
administrative process from improper influence.
(42 FR 14690, Mar. 16, 1977)
17 CFR 200.111 Prohibitions; application; definitions.
(a) Prohibited communications. In any agency proceeding which is
subject to this subpart, except to the extent required for the
disposition of ex parte matters as authorized by law:
(1) No interested person outside the agency shall make or knowingly
cause to be made to any member of the Commission or decisional employee
an ex parte communication relevant to the merits of the proceeding; and
(2) No member of the Commission or decisional employee shall make or
knowingly cause to be made to any interested person outside the agency
an ex parte communication relevant to the merits of the proceeding.
(b) Proceedings to which prohibitions apply. This subpart shall
apply to all proceedings subject to 5 U.S.C. 557(a), including
suspension proceedings instituted pursuant to the provisions of
Regulations A, B, E, and F of the Securities Act of 1933 ( 230.251 et
seq. of this chapter), all review proceedings instituted pursuant to
section 19(g) of the Securities Exchange Act of 1934, and all other
proceedings where an evidentiary hearing has been ordered pursuant to a
statutory provision or rule of the Commission and where the action of
the Commission must be taken on the basis of an evidentiary record. In
addition, this subpart shall apply to any other proceeding in which the
Commission so orders.
(c) Period during which prohibitions apply. (1) The prohibitions in
200.111 (a) shall begin to apply when the Commission issues an order for
hearing; Provided,
(i) That in suspension proceedings pursuant to Regulations A, B, E
and F of the Securities Act of 1933 ( 230.251 et seq. of this chapter),
these prohibitions shall commence when the Commission enters an order
temporarily suspending the exemption; and
(ii) That in proceedings under section 19(d) of the Securities
Exchange Act of 1934 these prohibitions shall commence from the time
that a copy of an application for review has been served by the
Secretary upon the self-regulatory organization; and
(iii) In no case shall the prohibitions in 200.111(a) begin to apply
later than the time at which a proceeding is noticed for hearing unless
the person responsible for the communication has knowledge that it will
be noticed, in which case the prohibitions shall apply beginning at the
time of his or her acquisition of such knowledge.
(2) The prohibitions in 200.111(a) shall continue until the time to
file a petition for rehearing from the final order of the Commission has
expired. In the event a petition for rehearing is filed, these
prohibitions shall cease if and when the petition for rehearing is
denied.
(3) The Commission may, by specific order entered in a particular
proceeding, determine that these prohibitions shall commence from some
date earlier than the time specified in this paragraph (c) or shall
continue until a date subsequent to the time specified herein.
(d) Definitions. As used in this subpart:
(1) Ex parte communication means an oral or written communication not
on the public record with respect to which reasonable prior notice to
all participants to the proceeding is not given, but it shall not
include requests for status reports on any matter or proceeding. In
addition, an ex parte communication shall not include:
(i) Any written communication of which copies are served by the
communicator contemporaneously with the transmittal of the communication
in accordance with requirements of Rule 23 of the Commission's Rules of
Practice, 201.23 of this chapter, upon all participants to the
proceeding (including the interested Division or Office of the
Commission); or
(ii) Any oral communication where 48 hours advance written notice is
given to all participants to the proceeding (including the interested
division of the Commission).
(2) Participants to the proceeding means all parties to the
proceeding (including the interested Division or Office of the
Commission) and any other persons who have been granted limited
participation pursuant to the provisions of Rule 9(c) of the
Commission's Rules of Practice, 201.9(c) of this chapter.
(3) Decisional employee means: (i) The administrative law judge
assigned to the proceeding in question; and
(ii) All members of the staff of the Office of Opinions and Review;
and
(iii) The legal and executive assistants to members of the
Commission; and
(iv) Any employee of the Commission who has been specifically named
by order of the administrative law judge or the Commission in the
proceeding to assist thereafter in making or recommending a particular
decision; and
(v) Any other employee of the Commission who is, or may reasonably be
expected to be, involved in the decisional process of the proceeding.
(42 FR 14690, Mar. 16, 1977)
17 CFR 200.112 Duties of recipient; notice to participants.
(a) Duties of recipient. A member of the Commission or decisional
employee who receives, or who make or knowingly causes to be made, a
communication prohibited by this section, or who receives or makes a
communication which he or she concludes should, in fairness, be brought
to the attention of all participants to the proceeding, shall transmit
to the Commission's Secretary, who shall place on the public record of
the proceeding:
(1) All such written communications; and
(2) Memoranda stating the substance of all such oral communications;
and
(3) All written responses, and memoranda stating the substance of all
oral responses, to the materials described in paragraphs (a) (1) and (2)
of this section.
(b) Notice to participants. The Secretary shall send copies of the
communication to all participants to the proceeding with respect to
which it was made, and shall notify the communicator of the provisions
of this code prohibiting ex parte communications. If the communications
are from persons other than participants to the proceedings or their
agents, and the Secretary determines that it would be too burdensome to
send copies of the communications to all participants because: (1) The
communications are so voluminous, or (2) the communications are of such
borderline relevance to the issues of the proceedings, or (3) the
participants to the proceeding are so numerous, the Secretary may,
instead, notify the participants that the communications have been
received, placed in the file, and are available for examination.
(c) Post decisional communications. Any Commission member or
decisional employee who receives a communication which would be
prohibited by this Code, but for the fact that it was received
subsequent to the date when the prohibitions imposed hereby have ceased
to apply, shall comply with the provisions of 200.112(a) with respect
to such communication in the event that he or she is to act in a
decisional capacity in the same proceeding pursuant to remand where he
or she concludes, in fairness, that such communication should be brought
to the attention of all participants to the proceeding.
(42 FR 14691 Mar. 16, 1977)
17 CFR 200.113 Opportunity to respond; interception.
(a) Opportunity to respond. All participants to a proceeding may
respond to any allegations or contentions contained in a prohibited ex
parte communication placed in the public record in accordance with
200.112. Such responses shall be included in the public record.
(b) Interception of communications. All written communications
addressed to the Commission respecting a proceeding will be deemed to be
communications to the staff of the interested division and will be
directed to that division by the Commission's mail room. A Commission
member or decisional employee may instruct any of his assistants who are
nondecisional employees to intercept any communication directed to him
which might appear to violate this Code and authorize them either to
transmit any such written communication to the staff of the interested
division of the Commission, if it appears from the contents of the
communication that the intent of the sender is consistent with such
action, or to return the communication to the sender.
(28 FR 4447, May 3, 1963, as amended at 42 FR 14691, Mar. 16, 1977)
17 CFR 200.114 Sanctions.
(a) Discipline of persons practicing before the Commission. The
Commission may, to the extent not prohibited by law, censure, suspend,
or revoke the privilege to practice before it of any person who makes,
or solicits the making of, an unauthorized ex parte communication.
(b) Adverse action on claim. Upon receipt of a communication
knowingly made or knowingly caused to be made by a party in violation of
this subpart, the Commission, administrative law judge, or other
employee presiding at the hearing may, to the extent consistent with the
interests of justice and the policy of the underlying statutes, require
the party to show cause why his claim or interest in the proceeding
should not be dismissed, denied, disregarded, or otherwise adversely
affected on account of such violation.
(c) Discipline of Commission employees. The Commission may censure,
suspend, or dismiss any Commission employee who violates the
prohibitions or requirements of this Code.
(28 FR 4447, May 3, 1963, as amended at 42 FR 14691, Mar. 16, 1977)
17 CFR 200.114 Subpart G -- Plan of Organization and Operation
Effective During Emergency Conditions
Authority: 15 U.S.C. 77s, 78w, 79t, 77sss, 80a-37, 80b-11, unless
otherwise noted.
Section 200.203 is also issued under 15 U.S.C. 78d, 78d-1.
Source: 28 FR 6970, July 9, 1963, unless otherwise noted.
17 CFR 200.200 Purpose.
This subpart describes the plan of organization and operation which
will be observed by the Securities and Exchange Commission in
discharging its duties and responsibilities in the event of a national
emergency as defined in the following section.
(Sec. 4, 48 Stat. 885, as amended; 15 U.S.C. 78d, sec. 1, 76 Stat.
394; 15 U.S.C. 78d-1. Reorganization Plan No. 10 of 1950; 3 CFR,
1949-1953 Comp., p. 1006)
17 CFR 200.201 Emergency conditions, effective date, and duration.
For the purposes of this subpart, emergency conditions shall be
deemed to commence at the time of an armed attack upon the United
States, its territories and possessions, at the time of official
notification of the likelihood or imminence of such attack, or at a time
specified by the authority of the President, whichever may first occur,
and shall continue until official notification of cessation of such
conditions. The provisions of this subpart shall become operative as at
the commencement of emergency conditions and continue until cessation of
those conditions, or until the Commission shall by notice or order
resume its normal organization and operations.
(Sec. 4, 48 Stat. 885, as amended; 15 U.S.C. 78d, sec. 1, 76 Stat.
394; 15 U.S.C. 78d-1. Reorganization Plan No. 10 of 1950; 3 CFR,
1949-1953 Comp., p. 1006)
17 CFR 200.202 Offices, and information and submittals.
(a) During emergency conditions, the location or headquarters of the
Commission shall be as designated by the Chairman or his successor. The
location of each Regional and Branch Office of the Commission, if
different from the normal location, shall be as designated by the
Chairman of the Commission or his successor, or in the absence of
communications with him, by the Regional Administrator for the area or
his acting successor.
(b) During emergency conditions, all formal or informal requests,
filings, reports or other submittals shall be delivered to the
Commission at designated offices or addressed to the Securities and
Exchange Commission, Official Mail and Messenger Service, United States
Post Office Department, Washington 25, DC
(Sec. 4, 48, Stat. 885, as amended; 15 U.S.C. 78d, sec. 1, 76 Stat.
394; 15 U.S.C. 78d-1. Reorganization Plan No. 10 of 1950; 3 CFR,
1949-1953 Comp., p. 1006)
17 CFR 200.203 Organization, and delegations of authority.
(a) During emergency conditions, the respective functions and
responsibilities of the Commissioners, the Chairman of the Commission,
and the staff members shall be, to the extent possible, as set forth in
Subpart A of this part ( 200.1 et seq.).
(b) Action for and in the name of the Commission taken pursuant to
this subpart by one or more Commissioners or by a successor as
designated in this section shall mean and include the delegated
authority to act for the unavailable or incapacitated Commissioners.
(c) Pursuant to the statutes governing the Commission, to
Reorganization Plan No. 10 of 1950, and to Pub. L. 100-181, section
308(b), 101 Stat. 1249 (1987), the following automatic delegation of
authority is made to provide continuity in the event of an emergency:
(1) In the absence or incapacity of the Chairman of the Commission
during an emergency of the nature contemplated by this subpart, the
authority of the Chairman to govern the affairs of the Commission and to
act for the Commission, as provided for by laws and by delegations from
the Commission, will pass to the surviving successor highest on the
following list until such time as a duly appointed Chairman of the
Commission is available:
(i) The Commissioners in order of seniority.
(ii) The General Counsel.
(iii) The Executive Director.
(iv) The Executive Assistant to the Chairman.
(v) The Division Directors in order of seniority.
(vi) The Regional Administrators in order of seniority.
(2) If and when a commissioner previously incapacitated or otherwise
unavailable, again becomes available, he shall thereupon have all the
powers and functions he would have had if he had not been incapacitated
or otherwise unavailable.
(d) Actions taken for and in the name of the Commission as described
above shall be effective immediately or as specified by the successor
acting, but shall be subject to reconsideration by the Commissioners
when the Commission has been reconstituted and is functioning.
(e) Except as may be determined otherwise by the Chairman or his
successor, the duties of each head of a division or office of the
Commission shall be discharged, in the absence or incapacity of such
person during the emergency conditions, by the available staff member
next in line of succession. The head of each division or office shall
designate the line of succession within his division or office. If no
such designation has been made or the designatee is unavailable, such
duties shall be assumed by the available subordinate officer or employee
in the particular division or office who is highest in grade and in the
event that there is more than one such person, in length of service with
the Commission.
(Sec. 4, 48 Stat. 885, as amended; 15 U.S.C. 78d, sec. 1, 76 Stat.
394; 15 U.S.C. 78d-1. Reorganization Plan No. 10 of 1950; 3 CFR,
1949-1953 Comp., p. 1006)
(28 FR 6970, July 9, 1963, as amended at 28 FR 7672, July 27, 1963;
28 FR 14493, Dec. 31, 1963; 54 FR 40862, Oct. 4, 1989)
17 CFR 200.204 Personnel, fiscal, and service functions.
In the absence of unavailability of the appropriate staff officer or
his successor, authority to effect temporary appointments of such
additional officers and employees, to classify and allocate positions to
their proper grades, to issue travel orders, and to effect emergency
purchases of supplies, equipment and services shall be exercised by the
respective Regional Administrators, their deputies, or staff in line of
succession, as may be required for the discharge of the lawful duties of
the respective offices.
(Sec. 4, 48 Stat. 885, as amended; 15 U.S.C. 78d, sec. 1, 76 Stat.
394; 15 U.S.C. 78d-1, Reorganization Plan No. 10 of 1950; 3 CFR,
1949-1953 Comp., p. 1006)
17 CFR 200.205 Effect upon existing Commission organization,
delegations, and rules.
Except as otherwise provided herein, all outstanding Commission
organizational statements, delegations of authority, orders, rules and
regulations shall remain in force and effect during emergency
conditions, subject to all lawful requirements and such changes as may
be authorized by or in the name of the Chairman or the Commission.
(Sec. 4, 48 Stat. 885, as amended; 15 U.S.C. 78d, sec. 1, 76 Stat.
394, 15 U.S.C. 78d-1. Reorganization Plan No. 10 of 1950; 3 CFR,
1949-1953 Comp., p. 1006)
17 CFR 200.205 Subpart H -- Regulations Pertaining to the Privacy of
Individuals and Systems of Records Maintained by the Commission
Authority: Pub. L. 93-579, sec. (f), 5 U.S.C. 552a(f), unless
otherwise noted.
Section 200.312 is also issued under Pub. L. 93-579, sec. k, 5
U.S.C. 552a(k).
Section 200.313 is also issued under Pub. L. 93-579, sec. j, 5
U.S.C. 552a(j) and sec. k, 5 U.S.C. 552a(k).
Source: 40 FR 44068, Sept. 24, 1975, unless otherwise noted.
17 CFR 200.301 Purpose and scope.
(a) The Privacy Act of 1974, Pub. L. 93-579, 88 Stat. 1896, is
based, in part, on the finding by Congress that ''in order to protect
the privacy of individuals identified in information systems maintained
by Federal agencies, it is necessary and proper for the Congress to
regulate the collection, maintenance, use, and dissemination of
information by such agencies.'' To achieve this objective the Act, among
other things, provides, with some exceptions, that Federal agencies
shall advise an individual upon request whether records maintained by
the agency in a system of records pertain to the individual and shall
grant the individual access to such records. The Act further provides
that individuals may request amendments or corrections to records
pertaining to them that are maintained by the agency, and that the
agency shall either grant the requested amendments or set forth fully
its reasons for refusing to do so.
(b) The Securities and Exchange Commission, pursuant to subsection
(f) of the Privacy Act, adopts the following rules and procedures to
implement the provisions of the Act summarized above, and other
provisions of the Act. These rules and procedures are applicable to all
requests for information, access or amendment to records pertaining to
an individual that are contained in any system of records that is
maintained by the Commission.
17 CFR 200.302 Definitions.
The following definitions shall apply for purposes of this subpart:
(a) The terms individual, maintain, record, system of records, and
routine use are defined for purposes of these rules as they are defined
in 5 U.S.C. 552a(a)(2), (a)(3), (a)(4), (a)(5), and (a)(6).
(b) Commission means the Securities and Exchange Commission.
17 CFR 200.303 Times, places and requirements for requests pertaining
to individual records in a record system and for the identification of
individuals making requests for access to the records pertaining to
them.
(a) Place to make request. Any request by an individual to be
advised whether any system of records maintained by the Commission and
named by the individual contains a record pertaining to him or her, or
any request by an individual for access to a record pertaining to him or
her that is contained in a system of records maintained by the
Commission, shall be submitted by the individual in person during normal
business hours at the Commission's Public Reference Room which is
located at 450 Fifth Street, NW., Room 1024, Washington, DC, or by mail
addressed to the Privacy Act Officer, Securities and Exchange
Commission, Washington, DC 20549. All requests will be required to be
put in writing and signed by the individual making the request. In the
case of requests for access that are made by mail, the envelope should
be clearly marked ''Privacy Act Request.''
(1) Information to be included in requests. Each request by an
individual concerning whether the Commission maintains in a system of
records a record that pertains to him, or for access to any record
pertaining to the individual that is maintained by the Commission in a
system of records, shall include such information as will assist the
Commission in identifying those records as to which the individual is
seeking information or access. Where practicable, the individual should
identify the system of records that is the subject of his request by
reference to the Commission's notices of systems of records, which are
published in the Federal Register, as required by section (e)(4) of the
Privacy Act, 5 U.S.C. 552a(e)(4). Where a system of records is compiled
on the basis of a specific identification scheme, the individual should
include in his request the identification number or other identifier
assigned to him. In the event the individual does not know the specific
identifier assigned to him, he shall provide other information,
including his full name, address, date of birth and subject matter of
the record, to aid in processing his request. If additional information
is required before a request can be processed, the individual shall be
so advised.
(2) Verification of identity. When the fact of the existence of a
record is not required to be disclosed under the Freedom of Information
Act, 5 U.S.C. 552, as amended, or when a record as to which access has
been requested is not required to be disclosed under that Act, the
individual seeking the information or requesting access to the record
shall be required to verify his or her identity before access will be
granted or information given. For this purpose, individuals shall
appear at the Commission's Public Reference Room located at 450 Fifth
Street, NW., Room 1024, Washington, DC, during normal business hours of
9 a.m. to 4:30 p.m. e.s.t., Monday through Friday, or at one of the
Commission's Regional or Branch Offices. The addresses and business
hours of those offices are listed below:
Atlanta Regional Office, 1375 Peachtree Street, NE., Suite 788,
Atlanta, GA 30367. Office hours -- 9 a.m.-5:30 p.m. e.s.t.
Boston Regional Office, John W. McCormack Post Office and Courthouse
Building, Suite 700, Boston, MA 02109. Office hours -- 9 a.m.-5:30 p.m.
e.s.t.
Chicago Regional Office, Everett McKinley Dirksen Building, 219 South
Dearborn Street, Room 1204, Chicago, IL 60604. Office hours -- 8:45
a.m.-5:15 p.m. c.s.t.
Denver Regional Office, 410 Seventeenth Street, Suite 700, Denver, CO
80202. Office hours -- 8 a.m.-4:30 p.m. m.s.t.
Fort Worth Regional Office, 411 West Seventh Street, 8th Floor, Fort
Worth, TX 76102. Office hours -- 8:30 a.m.-5 p.m. c.s.t.
Houston Branch Office, 7500 San Felipe Street, Suite 550, Houston, TX
77063. Office hours -- 8:30 a.m.-5 p.m. c.s.t.
Los Angeles Regional Office, 5757 Wilshire Boulevard, Suite 500 East,
Los Angeles, CA 90036-3648. Office hours -- 8:30 a.m.-5 p.m. p.s.t.
Miami Branch Office, Dupont Plaza Center, 300 Biscayne Blvd. Way,
Suite 500, Miami, FL 33131. Office hours -- 8:30 a.m.-5 p.m. e.s.t.
New York Regional Office, 75 Park Place, Room 1228, New York, NY
10007. Office hours -- 9 a.m.-5:30 p.m. e.s.t.
Philadelphia Regional Office, William J. Green, Jr. Federal
Building, 600 Arch Street, Room 2204, Philadelphia, PA 19106. Office
hours -- 8:30 a.m.-5 p.m. e.s.t.
Salt Lake City Branch Office, U.S. Post Office and Courthouse, 350 S.
Main Street, Room 505, Salt Lake City, UT 84101. Office hours -- 8
a.m.-4:30 p.m. m.s.t.
San Francisco Branch Office, 901 Market Street, Suite 470, San
Francisco, CA 94103. Office hours -- 8:30 a.m.-5 p.m. p.s.t.
Seattle Regional Office, 3040 Federal Building, 915 Second Avenue,
Seattle, WA 98174. Office hours -- 8 a.m.-4:30 p.m. p.s.t.
None of the Commission's Offices are open on Saturday, Sunday or the
following legal holidays: New Year's Day, President's Day, Memorial
Day, Independence Day, Labor Day, Veterans' Day, Columbus Day,
Thanksgiving Day or Christmas Day.
(3) Methods for verifying identity -- appearance in person. For the
purpose of verifying his identity, an individual seeking information as
to records pertaining to him or access to those records shall furnish
documentation that may reasonably be relied on to establish the
individual's identity. Such documentation might include a valid birth
certificate, driver's license, employee or military identification card,
or medicare card.
(4) Method for verifying identity by mail. Where an individual
cannot appear at one of the Commission's Offices for the purpose of
verifying his identity, he shall submit, along with the request for
information or access, a signed and notarized statement attesting to his
identity. Where access is being sought, the sworn statement shall
include a representation that the records being sought pertain to the
individual and a stipulation that the individual is aware that knowingly
and willfully requesting or obtaining records pertaining to an
individual from the Commission under false pretenses is a criminal
offense.
(5) Additional procedures for verifying identity. When it appears
appropriate, there may be made such other arrangements for the
verification of identity as are reasonable under the circumstances and
appear to be effective to prevent unauthorized disclosure of, or access
to, individual records.
(b) Acknowledgement of requests for information pertaining to
individual records in a record system or for access to individual
records. (1) Except where an immediate acknowledgement is given for
requests made in person, the receipt of a request for information
pertaining to individual records in a record system will be acknowledged
within 10 days after the receipt of such request. Requests will be
processed as promptly as possible and a response to such requests will
be given within 30 days (excluding Saturdays, Sundays, and legal
holidays) unless, within the 30 day period and for cause shown, the
individual making the request is notified in writing that a longer
period is necessary.
(2) When an individual appears in person at the Commission's Public
Reference Room in Washington, DC, or at one of its Regional or Branch
Offices to request access to records pertaining to him, and such
individual provides the required information and verification of
identity, the Commission's staff, if practicable, will indicate at that
time whether it is likely that the individual will be given access to
the records and, if so, when and under what circumstances such access
will be given. In the case of requests received by mail, whenever
practicable, acknowledgement of the receipt of the request will be given
within 10 days after receipt (excluding Saturdays, Sundays, and legal
holidays). The acknowledgement will indicate, if practicable, whether
or not access likely will be granted and, if so, when and under what
circumstances.
(40 FR 44068, Sept. 24, 1975, as amended at 41 FR 44698, Oct. 12,
1976; 47 FR 26819, June 22, 1982; 52 FR 2677, Jan. 26, 1987; 54 FR
40862, Oct. 4, 1989; 54 FR 50307, Dec. 5, 1989)
17 CFR 200.304 Disclosure of requested records.
(a) Initial review. Requests by individuals for access to records
pertaining to them will be referred to the Commission's Privacy Act
Officer who initially will determine whether access will be granted,
Provided, however, That a Director of a staff Division of the Commission
or Office head, other than the General Counsel, whose zone of
responsibility relates to the record requested (see 17 CFR 200.13 et
seq.), may make a determination that access is not lawfully required to
be granted and should not be granted, in which case he, and not the
Privacy Act Officer, shall make the required notification to the
individual making the request.
(b) Grant of request for access. (1) If it is determined that a
request for access to records pertaining to an individual will be
granted, the individual will be advised by mail that access will be
given at the designated Office of the Commission or a copy of the
requested record will be provided by mail if the individual shall so
indicate. Where the individual requests that copies of the record be
mailed to him or requests copies of a record upon reviewing it at a
Commission Office, the individual shall pay the cost of making the
requested copies, as set forth in 200.310 of this subpart.
(2) In granting access to an individual to a record pertaining to
him, such steps shall be taken by the Commission's staff as are
necessary to prevent the unauthorized disclosure at the same time of
information pertaining to individuals other than the person making the
request or of other information that does not pertain to the individual.
(c) Denial of request for access. If it is determined that access
will not be granted, the individual making the request will be notified
of that fact and given the reasons why access is being denied. The
individual also will be advised (1) of his right to seek review by the
General Counsel of the intital decision to deny access, in accordance
with the procedures set forth in 200.308 of this subpart; and (2) of
his right ultimately to obtain judicial review pursuant to 5 U.S.C.
552a(g)(1)(A) of a final denial of access by the General Counsel.
(d) Time for acting on requests for access. Access to a record
pertaining to an individual normally will be granted or denied within 30
days (excluding Saturdays, Sundays and legal holidays) after the receipt
of the request for access unless the individual making the request is
notified in writing within the 30 day period that, for good cause shown,
a longer time is required. In such cases, the individual making the
request shall be informed in writing of the difficulties encountered and
an indication shall be given as to when it is anticipated that access
may be granted or denied.
(e) Authorization to allow designated person to review and discuss
records pertaining to another individual. An individual who is granted
access to records pertaining to him, and who appears at a Commission
Office to review the records, may be accompanied by another person of
his choosing. Where the records as to which access has been granted are
not required to be disclosed under provisions of the Freedom of
Information Act 5 U.S.C. 552, as amended, the individual requesting the
records, before being granted access, shall execute a written statement,
signed by him and the person accompanying him, which specifically
authorizes the latter individual to review and discuss the records. If
such authorization has not been given as described, the person who has
accompanied the individual making the request will be excluded from any
review or discussion of the records.
(f) Exclusion for certain records. Nothing contained in these rules
shall allow an individual access to any information compiled in
reasonable anticipation of a civil action or proceeding.
(5 U.S.C. 552a(f); sec. 19, Securities Act of 1933, 48 Stat. 85, as
amended; sec. 23, Securities Exchange Act of 1934, 48 Stat. 901, as
amended; sec. 20, Public Utility Holding Company Act of 1935, 49 Stat.
833; sec. 319, Trust Indenture Act of 1939, 53 Stat. 1173; sec. 38,
Investment Company Act of 1940, 54 Stat. 841; sec. 211, Investment
Advisers Act of 1940, 54 Stat. 855 (15 U.S.C. 77s, 78w, 79t, 77sss,
80a-37, 80b-11))
(40 FR 44068, Sept. 24, 1975, as amended at 49 FR 13866, Apr. 9,
1984)
17 CFR 200.305 Special procedure: Medical records.
(a) Statement of physician or mental health professional. When an
individual requests access to records pertaining to him that include
medical and/or psychological information, the Commission, if it deems it
necessary under the particular circumstances, may require the individual
to submit with the request a signed statement by his physician or a
mental health professional indicating that, in their opinion, disclosure
of the requested records or information directly to the individual will
not have an adverse effect on the individual.
(b) Designation of physician or mental health professional to receive
records. If the Commission believes, in good faith, that disclosure of
medical and/or psychological information directly to an individual could
have an adverse effect on that individual, the individual may be asked
to designate in writing a physician or mental health professional to
whom he would like the records to be disclosed, and disclosure that
otherwise would be made to the individual will instead be made to the
designated physician or mental health professional.
17 CFR 200.306 Requests for amendment or correction of records.
(a) Place to make requests. A request by an individual to amend or
correct records pertaining to him or her may be made in person during
normal business hours at the Commission's Public Reference Room located
at 450 Fifth Street, NW., Room 1024, Washington, DC, or by mail
addressed to the Privacy Act Officer, Securities and Exchange
Commission, Washington, DC 20549.
(1) Information to be included in requests. Each request to amend or
correct a Commission record shall reasonably describe the record sought
to be amended or corrected. Such description should include, for
example, relevant names, dates and subject matter to permit the record
to be located among the records maintained by the Commission. An
individual who has requested that a record pertaining to him be amended
or corrected will be advised promptly if the record cannot be located on
the basis of the description given and that further identifying
information is necessary before his request can be processed. An
initial evaluation of a request presented in person will be made
immediately to ensure that the request is complete and to indicate what,
if any, additional information will be required. Verification of the
individual's identity as set forth in 200.303(a) (2), (3), (4) and (5)
may also be required.
(2) Basis for amendment or correction. An individual requesting an
amendment or correction to a record pertaining to him shall specify the
substance of the amendment or correction and set forth facts and provide
such materials that would support his contention that the record
pertaining to him as maintained by the Commission is not accurate,
timely or complete, or that the record is not necessary and relevant to
accomplish a statutory purpose of the Commission as authorized by law or
by Executive Order of the President.
(b) Acknowledgement of requests for amendment or correction. Receipt
of a request to amend or correct a record pertaining to an individual
normally will be acknowledged in writing within 10 days after such
request has been received. When a request to amend or correct is made
in person, the individual making the request will be given a written
acknowledgement when the request is presented. The acknowledgement will
describe the request received and indicate when it is anticipated that
action will be taken on the request. No acknowledgement will be sent
when the request for amendment or correction will be reviewed, and an
initial decision made, within 10 days from the date the request is
received.
(40 FR 44068, Sept. 24, 1975, as amended at 47 FR 26819, June 22,
1982)
17 CFR 200.307 Review of requests for amendment or correction.
(a) Initial review. As in the case of requests for access, requests
by individuals for amendment or correction to records pertaining to them
will be referred to the Commission's Privacy Act Officer for an initial
determination, except that such requests may be considered by a Division
Director or Office Head (other than the General Counsel) as set forth in
200.304(a) of this subpart.
(b) Standards to be applied in reviewing requests. In reviewing
requests to amend or correct records, the Privacy Act Officer, or
Division or Office head, will be guided by the criteria set forth in 5
U.S.C. 552a(e)(1), i.e., that records maintained by the Commission shall
contain only such information as is necessary and relevant to accomplish
a statutory purpose of the Commission as required by statute or
Executive Order of the President and that such information also be
accurate, timely, and complete. These criteria will be applied whether
the request is to add material to a record or to delete information from
a record.
(c) Time for acting on requests. Initial review of a request by an
individual to amend or correct a record pertaining to him shall be
completed as promptly as is reasonably possible and normally within 30
days (excluding Saturdays, Sundays and legal holidays) from the date the
request was received, unless unusual circumstances preclude completion
of review within that time. If the anticipated completion date
indicated in the acknowledgement cannot be met, the individual
requesting the amendment will be advised in writing of the delay and the
reasons therefor, and also advised when action is expected to be
completed.
(d) Grant of requests to amend or correct records. If a request to
amend or correct a record is granted in whole or in part, the Privacy
Act Officer will: (1) Advise the individual making the request in
writing of the extent to which it has been granted; (2) amend or
correct the record accordingly; and (3) where an accounting of
disclosures of the record has been kept pursuant to 5 U.S.C. 552a(c),
advise all previous recipients of the record of the fact that the record
has been amended or corrected and the substance of the amendment or
correction.
(e) Denial of requests to amend or correct records. If an
individual's request to amend or correct a record pertaining to him is
denied in whole or in part, the Privacy Act Officer will:
(1) Promptly advise the individual making the request in writing of
the extent to which the request has been denied;
(2) State the reasons for the denial of the request;
(3) Describe the procedures established by the Commission to obtain
further review within the Commission of the request to amend or correct,
including the name and address of the person to whom the appeal is to be
addressed; and
(4) Inform the individual that the Privacy Act Officer will provide
information and assistance to the individual in perfecting an appeal of
the initial decision.
(5 U.S.C. 552a(f); sec. 19, Securities Act of 1933, 48 Stat. 85, as
amended; sec. 23, Securities Exchange Act of 1934, 48 Stat. 901, as
amended; sec. 20, Public Utility Holding Company Act of 1935, 49 Stat.
833; sec. 319, Trust Indenture Act of 1939, 53 Stat. 1173; sec. 38,
Investment Company Act of 1940, 54 Stat. 841; sec. 211, Investment
Advisers Act of 1940, 54 Stat. 855 (15 U.S.C. 77s, 78w, 79t, 77sss,
80a-37, 80b-11))
(40 FR 44068, Sept. 24, 1975, as amended at 49 FR 13866, Apr. 9,
1984)
17 CFR 200.308 Appeal of initial adverse agency determination as to
access or as to amendment or correction.
(a) Administrative review. Any person who has been notified pursuant
to 200.304(c) that his request for access to records pertaining to him
has been denied, or pursuant to Section 307(e) of this subpart that his
request for amendment or correction has been denied in whole or in part,
or who has received no response to a request for access or to amend
within 30 days (excluding Saturdays, Sundays and legal holidays) after
his request was received by the Commission's staff (or within such
extended period as may be permitted in accordance with 200.304(d) and
200.307(c) of this subpart), may appeal the adverse determination or
failure to respond by applying for an order of the General Counsel
determining and directing that access to the record be granted or that
the record be amended or corrected in accordance with his request.
(1) The application shall be in writing and shall describe the record
in issue and set forth the proposed amendment or correction and the
reasons therefor.
(2) The application shall be delivered to the Securities and Exchange
Commission, Public Reference Branch, Room 1024, 450 Fifth Street, NW.,
Washington, DC 20549, or by mail addressed to the Privacy Act Officer,
Securities and Exchange Commission, Washington, DC 20549.
(3) The applicant, if he wishes, may state such facts and cite such
legal or other authorities as he may consider appropriate in support of
his application.
(4) The General Counsel will make a determination with respect to any
appeal within 30 days after the receipt of such appeal (excluding
Saturdays, Sundays and legal holidays), unless for good cause shown, the
General Counsel shall extend that period. If such an extension is made,
the individual who is appealing shall be advised in writing of the
extension, the reasons therefor, and the anticipated date when the
appeal will be decided.
(5) In considering an appeal from a denial of a request to amend or
correct a record, the General Counsel shall apply the same standards as
set forth in 200.307(b).
(6) If the General Counsel shall conclude that access should be
granted, he or she shall issue an order granting access and instructing
the Privacy Act Officer to comply with 200.304(b).
(7) If the General Counsel shall conclude that the request to amend
or correct the record should be granted in whole or in part, he or she
shall issue an order granting the requested amendment or correction in
whole or in part and instructing the Privacy Act Officer to comply with
the requirements of 200.307(d) of this subpart, to the extent
applicable.
(8) If the General Counsel affirms the initial decision denying
access, he or she shall issue an order denying access and advising the
individual seeking access of (i) The order; (ii) the reasons for
denying access; and (iii) the individual's right to obtain judicial
review of the decision pursuant to 5 U.S.C. 552a(g)(1)(B).
(9) If the General Counsel determines that the decision of the
Privacy Act Officer denying a request to amend or correct a record
should be upheld, he or she shall issue an order denying the request and
the individual shall be advised of
(i) The order refusing to amend or correct the record and the reasons
therefor;
(ii) His right to file a concise statement setting forth his
disagreement with the General Counsel's decision not to amend or correct
the record;
(iii) The procedures for filing such a statement of disagreement with
the General Counsel;
(iv) The fact that any such statement of disagreement will be made
available to anyone to whom the record is disclosed, together with, if
the General Counsel deems it appropriate, a brief statement setting
forth the General Counsel's reasons for refusing to amend or correct;
(v) The fact that prior recipients of the record in issue will be
provided with the statement of disagreement and the General Counsel's
statement, if any, to the extent that an accounting of such disclosures
has been maintained pursuant to 5 U.S.C. 552a(c); and
(vi) The individual's right to seek judicial review of the General
Counsel's refusal to amend or correct, pursuant to 5 U.S.C.
552a(g)(1)(A).
(10) In appropriate cases the General Counsel may, in his or her sole
and unfettered discretion, refer matters requiring administrative review
of initial decisions to the Commission for determination and the
issuance, where indicated, of orders.
(b) Statement of disagreement. As noted in paragraph (a)(9)(ii) of
this section, an individual may file with the General Counsel a
statement setting forth his disagreement with the General Counsel's
denial of his request to amend or correct a record.
(1) Such statement of disagreement shall be delivered to the
Securities and Exchange Commission, Public Reference Branch, 450 Fifth
Street NW., Room 1024, Washington, DC 20549, or mailed to the Privacy
Act Officer, Securities and Exchange Commission, Washington, DC 20549,
within 30 days after receipt by the individual of the General Counsel's
order denying the amendment or correction. For good cause shown this
period can be extended for a reasonable time.
(2) Such statement of disagreement shall concisely state the basis
for the individual's agreement. Generally a statement should be no more
than two pages in length, except an individual may submit a slightly
longer statement if it is necessary to set forth his disagreement
effectively. Unduly lengthy or irrelevant materials will be returned to
the individual by the General Counsel for appropriate revisions before
they become a permanent part of the individual's record.
(3) The record about which a statement of disagreement has been filed
will clearly note which part of the record is disputed and the General
Counsel will provide copies of the statement of disagreement and, if the
General Counsel deems it appropriate, provide a concise statement of his
or her reasons for refusing to amend or correct the record, to persons
or other agencies to whom the record has been or will be disclosed.
(4) In appropriate cases, the General Counsel may, in his or her sole
and unfettered discretion, refer matters concerning statements of
disagreement to the Commission for disposition.
(5 U.S.C. 552a(f); sec. 19, Securities Act of 1933, 48 Stat. 85, as
amended; sec. 23, Securities Exchange Act of 1934, 48 Stat. 901, as
amended; sec. 20, Public Utility Holding Company Act of 1935, 49 Stat.
833; sec. 319, Trust Indenture Act of 1939, 53 Stat. 1173; sec. 38,
Investment Company Act of 1940, 54 Stat. 841; sec. 211, Investment
Advisers Act of 1940, 54 Stat. 855 (15 U.S.C. 77s, 78w, 79t, 77sss,
80a-37, 80b-11))
(40 FR 44068, Sept. 24, 1975, as amended at 42 FR 40190, Aug. 9,
1977; 47 FR 26819, June 22, 1982; 49 FR 13866, Apr. 9, 1984)
17 CFR 200.309 General provisions.
(a) Extensions of time. Pursuant to 200.303(b), 200.304(d),
200.307(c) and 200.308(a)(4) of this subpart, the time within which a
request for information, access or amendment by an individual with
respect to records maintained by the Commission that pertain to him
normally would be processed may be extended for good cause shown or
because of unusual circumstances. As used in these rules, good cause
and unusual circumstances shall include, but only to the extent
reasonably necessary to the proper processing of a particular request:
(1) The need to search for and collect the requested records from
field facilities or other establishments that are separate from the
Office processing the request. Many records of the Commission are
stored in Federal Records Centers in accordance with law -- including
many of the documents which have been on file with the Commission for
more than 2 years -- and cannot be made available promptly. Other
records may temporarily be located at a Regional or Branch Office of the
Commission. Any person who has requested for personal examination a
record stored at the Federal Records Center or temporarily located in a
Regional or Branch Office of the Commission will be notified when the
record will be made available to him.
(2) The need to search for, collect, and appropriately examine a
voluminous amount of separate and distinct records which may be demanded
in a single request. While every reasonable effort will be made fully
to comply with each request as promptly as possible on a first-come,
first-served basis, work done to search for, collect and appropriately
examine records in response to a request for a large number of records
will be contingent upon the availability of processing personnel in
accordance with an equitable allocation of time to all members of the
public who have requested or wish to request records.
(3) The need for consultation, which shall be conducted with all
practicable speed, with another agency having a substantial interest in
the determination of the request, or among two or more components within
the Commission having substantial subject-matter interest therein.
(b) Effective date of action. Whenever it is provided in this
Subpart that an acknowledgement or response to a request will be given
by specific times, deposit in the mails of such acknowledgement or
response by that time, addressed to the person making the request, will
be deemed full compliance.
(c) Records in use by a member of the Commission or its staff.
Although every effort will be made to make a record in use by a member
of the Commission or its staff available when requested, it may
occasionally be necessary to delay making such a record available when
doing so at the time the request is made would seriously interfere with
the work of the Commission or its staff.
(d) Missing or lost records. Any person who has requested a record
or a copy of a record pertaining to him will be notified if the record
sought cannot be found. If he so requests, he will be notified if the
record subsequently is found.
(e) Oral requests; misdirected written requests -- (1) Telephone and
other oral requests. Before responding to any request by an individual
for information concerning whether records maintained by the Commission
in a system of records pertain to him or to any request for access to
records by an individual, such request must be in writing and signed by
the individual making the request. The General Counsel will not
entertain any appeal from an alleged denial or failure to comply with an
oral request. Any person who has orally requested information or access
to records pertaining to him that he believes to have been improperly
denied to him should resubmit his request in appropriate written form in
order to obtain proper consideration and, if need be, administrative
review.
(2) Misdirected written requests. The Commission cannot assure that
a timely or satisfactory response will be given to written requests for
information, access or amendment by an individual with respect to
records pertaining to him that are directed to the Commission other than
in a manner prescribed in 200.303(a), 200.306(a), 200.308(a)(2), and
200.310 of this subpart. Any staff member who receives a written
request for information, access or amendment should promptly forward the
request to the Privacy Act Officer. Misdirected requests for records
will be considered to have been received by the Commission only when
they have been actually received by the Privacy Act Officer in cases
under 200.308(a)(2). The General Counsel will not entertain any appeal
from an alleged denial or failure to comply with a misdirected request,
unless it is clearly shown that the request was in fact received by the
Privacy Act Officer.
(5 U.S.C. 552a(f); sec. 19, Securities Act of 1933, 48 Stat. 85, as
amended; sec. 23, Securities Exchange Act of 1934, 48 Stat. 901, as
amended; sec. 20, Public Utility Holding Company Act of 1935, 49 Stat.
833; sec. 319, Trust Indenture Act of 1939, 53 Stat. 1173; sec. 38,
Investment Company Act of 1940, 54 Stat. 841; sec. 211, Investment
Advisers Act of 1940, 54 Stat. 855 (15 U.S.C. 77s, 78w, 79t, 77sss,
80a-37, 80b-11))
(40 FR 44068, Sept. 24, 1975, as amended at 49 FR 13867, Apr. 9,
1984)
17 CFR 200.310 Fees.
(a) A request by an individual for copies of a record pertaining to
him or her that is maintained by the Commission may be made in person
during normal business hours at the Public Reference Room at 450 Fifth
Street, NW., Room 1024, Washington, DC, or by mail addressed to the
Privacy Act Officer, Securities and Exchange Commission, Washington, DC
20549. There will be no charge assessed to the individual for the
Commission's expense involved in searching for or reviewing the record.
Copies of the Commission's records will be provided by a commercial
copier or by the Commission at rates established by a contract between
the copier and the Commission. In addition, copying machines are
provided for public reference facilities in the Commission's Washington,
DC, New York and Chicago Offices.
(b) Waiver or reduction of fees. Whenever the Director of the Office
of Consumer Affairs and Information Services determines that good cause
exists to grant a request for reduction or waiver of fees for copying
documents, he may reduce or waive any such fees.
(Pub. L. 87-592, 76 Stat. 394, 15 U.S.C. 78d-1, 78d-2; Pub. L.
93-502; 11 U.S.C. 901, 1109(a))
(42 FR 56727, Oct. 28, 1977, as amended at 47 FR 26819, June 22,
1982; 49 FR 12686, Mar. 30, 1984; 50 FR 50287, Dec. 10, 1985)
17 CFR 200.311 Penalties.
Title 18 U.S.C. 1001 makes it a criminal offense, subject to a
maximum fine of $10,000, or imprisonment for not more than 5 years or
both, to knowingly and willingly make or cause to be made any false or
fradulent statements or representations in any matter within the
jurisdiction of any agency of the United States. 5 U.S.C. 552a(i) makes
it a misdemeanor punishable by a fine of not more than $5,000 for any
person knowingly and willfully to request or obtain any record
concerning an individual from the Commission under false pretenses. 5
U.S.C. 552a(i) (1) and (2) provide criminal penalties for certain
violations of the Privacy Act by officers and employees of the
Commission.
17 CFR 200.312 Specific exemptions.
Pursuant to section (k) of the Privacy Act of 1974, the Chairman of
the Securities and Exchange Commission, with the concurrence of the
Commission, has deemed it necessary to promulgate the following
exemptions to specified provisions of the Privacy Act:
(a) Pursuant to, and limited by 5 U.S.C. 552a(k)(2), the following
systems of records maintained by the Commission shall be exempted from 5
U.S.C. 552a(c)(3), (d), (e)(1), (e)(4)(G), (H), and (I), and (f) and 17
CFR 200.303, 200.304, and 200.306, insofar as they contain investigatory
materials compiled for law enforcement purposes:
(1) Enforcement Files;
(2) Litigation, Actions and Proceedings Bulletin;
(3) Office of the General Counsel Working Files;
(4) Office of the Chief Accountant Working Files;
(5) Complaint processing System;
(6) Investor Service Complaint Index;
(7) Name-Relationship Index System; and
(8) Rule 2(e) of the Commission's Rules of Practice -- Appearing or
Practicing Before the Commission.
(b) Pursuant to 5 U.S.C. 552a(k)(5), the systems of records
containing the Commission's (1) Office of Personnel Code of Conduct and
Employee Performance Files and (2) Personnel Security Files shall be
exempt from sections (c)(3), (d), (e)(1), (e)(4) (G), (H), and (I), and
(f) of the Privacy Act, 5 U.S.C. 552a(c)(3), (d), (e)(1), (e)(4) (G),
(H), and (I), and (f), and 17 CFR 200.303, 200.304, and 200.306 insofar
as they contain investigatory material compiled to determine an
individual's suitability, eligibility, and qualifications for Federal
civilian employment or access to classified information, but only to the
extent that the disclosure of such material would reveal the identity of
a source who furnished information to the Government under an express
promise that the identity of the source would be held in confidence, or,
prior to September 27, 1975, under an implied promise that the identity
of the source would be held in confidence.
(Pub. L. 93-579, Sec. k, 5 U.S.C. 552a(k))
(40 FR 44073, Sept. 24, 1975, as amended at 52 FR 2677, Jan. 26,
1987; 54 FR 24332, June 7, 1989; 54 FR 46373, Nov. 3, 1989)
17 CFR 200.313 Inspector General exemptions.
(a) Pursuant to section (j) of the Privacy Act of 1974, the Chairman
of the Securities and Exchange Commission, with the concurrence of the
Commission, has deemed it necessary to promulgate the following
exemptions to specified provisions of the Privacy Act:
(1) Pursuant to, and limited by 5 U.S.C. 552a(j)(2), the system of
records maintained by the Office of Inspector General of the Commission
that contains the Investigative Files shall be exempted from the
provisions of 5 U.S.C. 552a, except subsections (b), (c) (1) and (2),
(e)(4) (A) through (F), (e) (6), (7), (9), (10), and (11), and (i), and
17 CFR 200.303, 200.304, 200.306, 200.307, 200.308, 200.309 and 200.310,
insofar as the system contains information pertaining to criminal law
enforcement investigations.
(b) Pursuant to section (k) of the Privacy Act of 1974, the Chairman
of the Securities and Exchange Commission, with the concurrence of the
Commission, has deemed it necessary to promulgate the following
exemptions to specified provisions of the Privacy Act:
(1) Pursuant to, and limited by 5 U.S.C. 552a(k)(2), the system of
records maintained by the Office of Inspector General of the Commission
that contains the Investigative Files shall be exempted from 5 U.S.C.
552a(c)(3), (d), (e)(1), (e)(4) (G), (H), and (I), and (f) and 17 CFR
200.303, 200.304, and 200.306, insofar as it contains investigatory
materials compiled for law enforcement purposes.
(55 FR 19872, May 14, 1990)
17 CFR 200.313 Subpart I -- Regulations Pertaining to Public
Observation of Commission Meetings
Authority: 5 U.S.C. 552b, unless otherwise noted. Section 200.410
also is issued under 29 U.S.C. 794.
Source: 42 FR 14693, Mar. 16, 1977, unless otherwise noted.
17 CFR 200.400 Open meetings.
Except as otherwise provided in this subpart, meetings of the
Commission shall be open to public observation.
17 CFR 200.401 Definitions.
As used in this subpart:
(a) Meeting means the joint deliberations of at least the number of
individual members of the Securities and Exchange Commission required to
take action on behalf of the Commission where such deliberations
determine or result in the joint conduct or disposition of official
Commission business, but does not include deliberations required or
permitted by 200.41 or 200.42 (respecting seriatim and duty officer
disposition of Commission business, respectively), or by 200.403,
200.404, or 200.405 (respecting whether particular Commission
deliberations shall be open or closed and related matters).
(b) Portion of a meeting means the consideration during a meeting of
a particular topic or item separately identified in the notice of
Commission meetings described in 200.403.
(c) Open, when used in the context of a Commission meeting or a
portion thereof, means that the public may attend and observe the
deliberations of the Commission during such meeting or portion of a
meeting, consistent with the provisions of 200.410 (respecting decorum
at meetings and other related matters).
(d) Closed, when used in the context of a Commission meeting or a
portion thereof, means that the public may not attend or observe the
deliberations of the Commission during such meeting or portion of a
meeting.
(e) Announce, and make publicly available, when used in the context
of the dissemination of information, mean, in addition to any specific
method of publication described in this subpart, that a document
containing the information in question will be posted for public
inspection in, or adjacent to, the lobby of the Commission's
headquarters offices, and will be available to the public through the
Commission's Public Reference Section and the Commission's Office of
Public Affairs, all in Washington, DC
(f) The term likely to, as used in 200.402, illustrating the
circumstances under which Commission meetings may be closed, and the
circumstances in which information may be deleted from the notice of
Commission meetings, means that it is more probable than not that the
discussion of Commission business, or publication of information,
reasonably could encompass matters which the Commission is authorized,
by the Government in the Sunshine Act, Pub. L. 94-409, as implemented
by this subpart, to consider or discuss at a closed meeting (or a closed
portion of a meeting).
(g) The term financial institution, as used in 200.402(a),
authorizing the closure of certain Commission meetings, includes, but is
not limited to, banks, savings and loan associations, credit unions,
brokers and dealers in securities or commodities, exchanges dealing in
securities or commodities, national securities associations, investment
companies, investment advisers, securities industry self-regulatory
organizations subject to 15 U.S.C. 78s, and institutional managers as
defined in 15 U.S.C. 78m(f).
(h) The term person includes, but is not limited to, any corporation,
partnership, company, association, joint stock corporation, business
trust, unincorporated organization, government, political subdivision,
agency, or instrumentality of a government.
17 CFR 200.402 Closed meetings.
(a) Nonpublic matters. Pursuant to the general or special procedures
for closing Commission meetings, as set forth in 200.404 or 200.405,
respectively, a meeting, or any portion thereof, shall be closed to
public observation where the Commission determines that such meeting, or
a portion thereof, is likely to:
(1) Disclose matters specifically authorized under criteria
established by an executive order to be kept secret in the interests of
national defense or foreign policy, and in fact properly classified
pursuant to such executive order.
(2) Relate solely to the internal personnel rules and practices of
the Commission or any other agency, including, but not limited to,
discussion concerning:
(i) Operation rules, guidelines, and manuals of procedure for
investigators, attorneys, accountants, and other employees, other than
those rules, guidelines, and manuals which establish legal requirements
to which members of the public are expected to conform; or
(ii) Hiring, termination, promotion, discipline, compensation, or
reward of any Commission employee or member, the existence,
investigation, or disposition of a complaint against any Commission
employee or member, the physical or mental condition of any Commission
employee or member, the handling of strictly internal matters, which
would tend to infringe on the privacy of the staff or members of the
Commission, or similar subjects.
(3) Disclose matters specifically exempted from disclosure by statute
(other than 5 U.S.C. 552): Provided, That such statute requires that
the matters be withheld from the public in such a manner as to leave no
discretion on the issue, or establishes particular criteria for
withholding or refers to particular types of matters to be withheld.
(4) Disclose trade secrets and commercial or financial information
obtained from a person and privileged or confidential, including, but
not limited to:
(i) Information contained in letters of comment in connection with
registration statements, applications for registration or other material
filed with the Commission, replies thereto, and related material which
is deemed to have been submitted to the Commission in confidence or to
be confidential at the instance of the registrant or person who has
filed such material unless the contrary clearly appears; and
(ii) Information contained in any document submitted to or required
to be filed with the Commission where the Commission has undertaken
formally or informally to receive such submission or filing for its use
or the use of specified persons only, such as preliminary proxy material
filed pursuant to Rule 14a-6 under the Securities Exchange Act (17 CFR
240.14a-6), reports filed pursuant to Rule 316(a) under the Securities
Act (17 CFR 230.316(a)), agreements filed pursuant to Rule 15c3-1 under
the Securities Exchange Act, 17 CFR 240.15c3-1, schedules filed pursuant
to Part I of Form X-17A-5 (17 CFR 249.617) in accordance with Rule
17a-5(b)(3) under the Securities Exchange Act (17 CFR 240.17a-5(b)(3)),
statements filed pursuant to Rule 17a-5(k)(1) under the Securities
Exchange Act (17 CFR 240.17a-5(k)(1)), confidential reports filed
pursuant to Rules 17a-9, 17a-10, 17a-12 and 17a-16 under the Securities
Exchange Act (17 CFR 240.17a-9, 240.17a-10, 240.17a-12, and 240.17a-16),
and any information filed with the Commission and confidential pursuant
to section 45 of the Investment Company Act of 1940, 15 U.S.C. 80a-44,
or Rule 45a-1 thereunder (17 CFR 270.45a-1); and
(iii) Information contained in reports, summaries, analyses, letters,
of memoranda arising out of, in anticipation of, or in connection with,
an examination or inspection of the books and records of any person or
any other investigation.
(5) Involve accusing any person of a crime, or formally censuring any
person, including, but not limited to, consideration of whether to:
(i) Institute, continue, or conclude administrative proceedings or
any formal or informal investigation or inquiry, whether public or
nonpublic, against or involving any person, alleging a violation of any
provision of the federal securities laws, or the rules and regulations
thereunder, or any other statute or rule a violation of which is
punishable as a crime; or
(ii) Commence, participate in, or terminate judicial proceedings
alleging a violation of any provision of the federal securities laws, or
the rules and regulations thereunder, or any other statute or rule a
violation of which is punishable as a crime; or
(iii) Issue a report or statement discussing the conduct of any
person and the relationship of that conduct to possible violations of
any provision of the federal securities laws, or the rules and
regulations thereunder, or any other statute or rule a violation of
which is punishable as a crime; or
(iv) Transmit, or disclose, with or without recommendation, any
Commission memorandum, file, document, or record to the Department of
Justice, a United States Attorney, any federal, state, local, or foreign
governmental authority or foreign securities authority, any professional
association, or any securities industry self-regulatory organization, in
order that the recipient may consider the institution of proceedings
against any person or the taking of any action that might involve
accusing any person of a crime or formally censuring any person; or
(v) Seek from, act upon, or act jointly with respect to, any
information, file, document, or record where such action could lead to
accusing any person of a crime or formally censuring any person by any
entity described in paragraph (a)(5)(iv) of this section.
(6) Disclose information of a personal nature, where disclosure would
constitute a clearly unwarranted invasion of personal privacy.
(7)(i) Disclose investigatory records compiled for law enforcement
purposes, or information which, if written, would be contained in such
records, to the extent that the production of such records would:
(A) Interfere with enforcement activities undertaken, or likely to be
undertaken, by the Commission or the Department of Justice, or any
United States Attorney, or any Federal, State, local, or foreign
governmental authority or foreign securities authority, any professional
association, or any securities industry self-regulatory organization;
(B) Deprive a person of a right to a fair trial or an impartial
adjudication;
(C) Constitute an unwarranted invasion of personal privacy;
(D) Disclose the identity of a confidential source and, in the case
of a record compiled by a criminal law enforcement authority in the
course of a criminal investigation, or by an agency conducting a lawful
national security intelligence investigation, confidential information
furnished only by the confidential source;
(E) Disclose investigative techniques and procedures; or
(F) Endanger the life or physical safety of law enforcement
personnel.
(ii) The term investigatory records includes, but is not limited to,
all documents, records, transcripts, evidentiary materials of any
nature, correspondence, related memoranda, or work product concerning
any examination, any investigation (whether formal or informal), or any
related litigation, which pertains to, or may disclose, the possible
violation by any person of any provision of any statute, rule, or
regulation administered by the Commission, by any other Federal, State,
local, or foreign governmental authority or foreign securities
authority, by any professional association, or by any securities
industry self-regulatory organization. The term investigatory records
also includes all written communications from, or to, any person
complaining or otherwise furnishing information respecting such possible
violations, as well as all correspondence or memoranda in connection
with such complaints or information.
(8) Disclose information contained in, or related to, any
examination, operating, or condition report prepared by, on behalf of,
or for the use of, the Commission, any other federal, state, local, or
foreign governmental authority or foreign securities authority, or any
securities industry self-regulatory organization, responsible for the
regulation or supervision of financial institutions.
(9) Disclose information the premature disclosure of which would be
likely to
(i)(A) Lead to significant financial speculation in currencies,
securities, or commodities, including, but not limited to, discussions
concerning the proposed or continued suspension of trading in any
security, or the possible investigation of, or institution of activity
concerning, any person with respect to conduct involving or affecting
publicly-traded securities, or
(B) Significantly endanger the stability of any financial
institution; or
(ii) Significantly frustrate the implementation, or the proposed
implementation, of any action by the Commission, any other federal,
state, local or foreign governmental authority, any foreign securities
authority, or any securities industry self-regulatory organization:
Provided, however, That this paragraph (a)(9)(ii) shall not apply in any
instance where the Commission has already disclosed to the public the
precise content or nature of its proposed action, or where the
Commission is expressly required by law to make such disclosure on its
own initiative prior to taking final agency action on such proposal.
(10) Specifically concern the Commission's consideration of, or its
actual: Issuance of a subpoena (whether by the Commission directly or
by any Commission employee or member); participation in a civil action
or proceeding, an action in a foreign court or international tribunal,
or an arbitration; or initiation, conduct, or disposition of a
particular case of formal adjudication pursuant to the procedures in 5
U.S.C. 554, or otherwise involving a determination on the record after
opportunity for a hearing; including, but not limited to, matters
involving
(i) The institution, prosecution, adjudication, dismissal,
settlement, or amendment of any administrative proceeding, whether
public or nonpublic; or
(ii) The commencement, settlement, defense, or prosecution of any
judicial proceeding to which the Commission, or any one or more of its
members or employees, is or may become a party; or
(iii) The commencement, conduct, termination, status, or disposition
of any inquiry, investigation, or proceedings to which the power to
issue subpoenas is, or may become, attendant; or
(iv) The discharge of the Commission's responsibilities involving
litigation under any statute concerning the subject of bankruptcy; or
(v) The participation by the Commission (or any employee or member
thereof) in, or involvement with, any civil judicial proceeding or any
administrative proceeding, whether as a party, as amicus curiae, or
otherwise; or
(vi) The disposition of any application for a Commission order of any
nature where the issuance of such an order would involve a determination
on the record after opportunity for a hearing.
(b) Interpretation of exemptions. The examples set forth
200.402(a)(1) through (10) of particular matters which may be the
subject of closed Commission deliberations are to be construed as
illustrative, but not as exhaustive, of the scope of those exemptions.
(c) Public interest determination. Notwithstanding the provisions of
200.402(a) (concerning the closing of Commission meetings), but subject
to the provisions of 200.409(a) (respecting the right of certain
persons to petition for the closing of a Commission meeting), the
Commission may conduct any meeting or portion of a meeting in public
where the Commission determines, in its discretion, that the public
interest renders it appropriate to open such a meeting.
(d) Nonpublic matter in announcements. The Commission may delete
from the notice of Commission meetings described in 200.403, from the
announcements concerning closed meetings described in 200.404(b) and
200.405(c), and from the General Counsel's certification described in
200.406, any information or description the publication of which would
be likely to disclose matters of the nature described in 200.402(a)
(concerning the closing of Commission meetings).
(Pub. L. 94-409, 90 Stat. 1241)
(42 FR 14693, Mar. 16, 1977; 47 FR 37077, Aug. 25, 1982, as amended
at 54 FR 24332, June 7, 1989)
17 CFR 200.403 Notice of Commission meetings.
(a) Content of notice. (1) In the case of open meetings, or meetings
closed pursuant to the procedures specified in 200.404, the Commission
shall announce the items to be considered. For each such item, the
announcement shall include:
(i) A brief description of the generic or precise subject matter to
be discussed;
(ii) The date, place, and approximate time at which the Commission
will consider the matter;
(iii) Whether the meeting, or the various portions thereof, shall be
open or closed; and
(iv) The name and telephone number of the Commission official
designated to respond to requests for information concerning the meeting
at which the matter is to be considered.
(2) Every announcement of a Commission meeting described in this
subsection, or any amended announcement described in paragraph (c),
shall be transmitted to the Federal Register for publication.
(b) Time of notice. The announcement of Commission meetings referred
to in paragraph (a) shall be made publicly available (and submitted
immediately thereafter to the Federal Register for publication) at least
one week prior to the consideration of any item listed therein, except
where a majority of the members of the Commission determine, by a
recorded vote, that Commission business requires earlier consideration
of the matter. In the event of such a determination, the announcement
shall be made publicly available (and submitted to the Federal Register)
at the earliest practicable time.
(c) Amendments to notice. (1)(i) The time or place of a meeting may
be changed following any public announcement that may be required by
paragraph (a). In the event of such action, the Commission shall
announce the change at the earliest practicable time.
(ii) The subject matter of a meeting, or the determination of the
Commission to open or close a meeting (or a portion of a meeting), may
be changed following any public announcement that may be required by
paragraph (a), if (A) a majority of the entire membership of the
Commission determines, by a recorded vote, that Commission business so
requires and that no earlier announcement of the change was possible;
and (B) the Commission publicly announces such change and the vote of
each member upon such change at the earliest practicable time.
(2) Notwithstanding the provisions of this paragraph (c), matters
which have been announced for Commission consideration may be deleted,
or continued in whole or in part to the next scheduled Commission
meeting, without notice.
(d) Notice of meetings closed pursuant to special procedure. In the
case of meetings closed pursuant to the special procedures set forth in
200.405, the Commission shall make publicly available, in whole or in
summary form,
(1) A brief description of the general subject matter considered or
to be considered, and
(2) The date, place, and approximate time at which the Commission
will, or did, consider the matter. The announcement described in this
subsection shall be made publicly available at the earliest practicable
time, and may be combined, in whole or in part, with the announcement
described in paragraph (a).
Note: The Commission intends, to the extent convenient, to adhere to
the following schedule in organizing its weekly agenda: Closed meetings
to consider matters concerning the enforcement of the federal securities
laws and the conduct of related investigations will generally be held on
Tuesdays and on Thursday afternoons. An open meeting will generally be
held each Thursday morning to consider matters of any appropriate
nature. On Wednesdays, either open or closed meetings, or both, will
generally be held according to the requirements of the Commission's
agenda for the week in question. Normally, no meetings will be
scheduled on Mondays, Fridays, Saturdays, Sundays, or legal holidays.
The foregoing tentative general schedule is set forth for the
guidance of the public, but is not, in any event, binding upon the
Commission. In every case, the scheduling of Commission meetings shall
be determined by the demands of Commission business, consistent with the
requirements of this subpart I. When feasible, the Commission will
endeavor to announce the subject matter of all then-contemplated open
meetings during a particular month at least one week prior to the
commencement of that month.
When and if convenient after the conclusion of a closed Commission
meeting, the Commission will endeavor to make publicly available a
notice describing (subject to the provision in 200.402(d) regarding
nonpublic matter in announcements) the items considered at that meeting
and any action taken thereon.
17 CFR 200.404 General procedure for determination to close meeting.
(a) Action to close meeting. Action to close a meeting pursuant to
200.402(a) or (c) shall be taken only upon a vote of a majority of the
entire membership of the Commission. A separate vote of the Commission
members shall be taken with respect to each Commission meeting a portion
or portions of which are proposed to be closed to the public pursuant to
200.402(a), or with respect to any information which is proposed to be
withheld under 200.402(d); Provided, however, That a single vote may
be taken with respect to a series of meetings, a portion or portions of
which are proposed to be closed, or with respect to any information
concerning such series of meetings, so long as each meeting in such
series relates to the same matters and is scheduled to be held no more
than thirty days after the initial meeting in such series. The vote of
each Commission member participating in such vote shall be recorded and
no proxies shall be allowed.
(b) Announcement of action to close meeting. Within one day of any
vote pursuant to paragraph (a) of this section or 200.409(a) (relating
to review of Commission determinations to open a meeting), the
Commission shall make publicly available:
(1) A written record reflecting the vote of each participating member
of the Commission on the question; and
(2) In the case of a meeting or portion thereof to be closed to the
public, a written explanation of the Commission's action closing the
meeting or a portion thereof, together with a list describing
generically or specifically the persons expected to attend the meeting
and their affiliation; and
(3) For every closed meeting, the certification executed by the
Commission's General Counsel as described in 200.406.
17 CFR 200.405 Special procedure for determination to close meeting.
(a) Finding. Based, in part, on a review of several months of its
meetings, as well as the legislative history of the Sunshine Act, the
Commission finds that a majority of its meetings may properly be closed
to the public pursuant to 200.402(a) (4), (8), (9)(i), or (10), or any
combination thereof.
(b) Action to close meeting. The Commission may, by recorded vote of
a majority of its members at the commencement of any meeting or portion
thereof, determine to close any meeting or a portion thereof properly
subject to being closed pursuant to 200.402(a) (4), (8), (9)(i), or
(10), or any combination thereof. The procedure described in this rule
may be utilized notwithstanding the fact that a meeting or portion
thereof properly subject to being closed pursuant to 200.402(a) (4),
(8), (9)(i), or (10), or any combination thereof, could also be closed
pursuant to 200.402(a) (1), (2), (3), (5), (6), (7), or (9)(ii), or any
combination thereof.
(c) Announcement of action to close meeting. In the case of a
meeting or a portion of a meeting closed pursuant to this rule, as soon
as practicable the Commission shall make publicly available:
(1) A written record reflecting the vote of each participating member
of the Commission to close the meeting; and
(2) The certification described in 200.406, executed by the
Commission's General Counsel.
17 CFR 200.406 Certification by the General Counsel.
For every Commission meeting closed pursuant to 200.402(a) (1)
through (10), the General Counsel of the Commission (or, in his or her
absence, the attorney designated by General Counsel pursuant to 200.21)
shall publicly certify that, in his or her opinion, the meeting may be
closed to the public and shall state each relevant exemptive provision.
17 CFR 200.407 Transcripts, minutes, and other documents concerning
closed Commission meetings.
(a) Record of closed meetings. Except as provided in 200.407(b),
the Commission's Secretary shall prepare a complete transcript or
electronic recording adequate to record fully the proceedings of each
closed meeting, or closed portion of a meeting.
(b) Minutes of closed meetings. In the case of a meeting, or portion
of a meeting, closed to the public pursuant to 200.402(a) (8), (9)(i),
or (10), the Secretary may, in his or her discretion or at the direction
of the Commission, prepare either the transcript or recording described
in 200.407(a), or a set of minutes. Such minutes shall fully and
clearly describe all matters discussed and shall provide a full and
accurate summary of any actions taken, and the reasons therefor,
including a description of each of the views expressed on any item and
the record of any rollcall vote (reflecting the vote of each
participating Commission member on the question). All documents
specifically considered by the Commission in connection with any action
shall be identified in such minutes are maintained.
(c) Retention of certificate and statement. The Secretary shall
retain a copy of every certification executed by the General Counsel
pursuant to 200.406, together with a statement from the presiding
officer of the meeting, or portion of a meeting to which the
certification applies, setting forth the time and place of the meeting,
and the persons present.
(d) Minute Record. Nothing herein shall affect the provisions of
200.13a and 200.40 requiring the Secretary to prepare and maintain a
Minute Record reflecting the official actions of the Commission.
17 CFR 200.408 Public access to transcripts and minutes of closed
Commission meetings; record retention.
(a) Public access to record. Within twenty days (excluding
Saturdays, Sundays, and legal holidays) of the receipt by the
Commission's Freedom of Information Act Officer of a written request, or
within such extended period as may be agreeable to the person making the
request, the Secretary shall make available for inspection by any person
in the Commission's Public Reference Room, the transcript, electronic
recording, or minutes (as required by 200.407 (a) or (b)) of the
discussion of any item on the agenda, except for such item or items as
the Freedom of Information Act Officer determines to involve matters
which may be withheld under 200.402 or otherwise. Copies of such
transcript, or minutes, or a transcription of such recording disclosing
the identity of each speaker, shall be furnished to any person at the
actual cost of duplication, as set forth in 200.80e, and, if a
transcript is prepared, the actual cost of such transcription.
(b) Review of deletion from record. Any person who has been notified
that the Freedom of Information Act Officer has determined to withhold
any transcript, recording, or minute, or portion thereof, which was the
subject of a request for access pursuant to 200.402(a), or any person
who has not received a response to his or her own request within the 20
days specified in 200.408(a), may appeal the adverse determination or
failure to respond by applying for an order of the Commission
determining and directing that the transcript, recording or minute, or
deleted portion thereof, be made available. Such application shall be
in writing and should be directed to the Secretary, Securities and
Exchange Commission, Washington, DC 20549. The applicant shall state
such facts and cite such legal or other authorities as the applicant may
consider appropriate. The Commission shall make a determination with
respect to any appeal pursuant to this subsection within 20 days
(excepting Saturdays, Sundays and legal public holidays) after the
receipt of such appeal, or within such extended period as may be
agreeable to the person making the request. The Commission may
determine to withhold any record that is exempt from disclosure pursuant
to 200.402(a), although it may disclose a record, even if exempt, if,
in its discretion, it determines it to be appropriate to do so.
(c) Retention of record. The Commission, by its Secretary, shall
retain a complete verbatim copy of the transcript, or a complete copy of
the minutes, or a complete electronic recording of each meeting, or
portion of a meeting, closed to the public, for a period of at least two
years after such meeting, or until one year after the conclusion of any
Commission proceeding with respect to which the meeting or portion was
held, whichever occurs later.
17 CFR 200.409 Administrative appeals.
(a) Review of determination to open meeting. Following any
announcement stating that the Commission intends to open a meeting or a
portion thereof, any person whose interests may be directly and
substantially affected by the disposition of the matter to be discussed
at such meeting may make a request, directed to the Commission's
Secretary, that the meeting, or relevant portion thereof, be closed
pursuant to 200.402(a) (5), (6), or (7). The Secretary shall circulate
such a request to the members of the Commission, along with a supporting
statement provided by the requestor setting forth the requestor's
interest in the matter and the reasons why the requestor believes that
the meeting (or portion thereof) should be closed, and the Commission,
upon the request of any one of its members, shall vote by recorded vote
on whether to close such meeting or portion.
(b) Review of determination to close meeting. Following any
announcement that the Commission intends to close a meeting or a portion
thereof, any person may make written or telegraphic request, directed to
the Commission's Secretary, that the meeting or a portion thereof be
open. Such a request shall set forth the requestor's interest in the
matter and the reasons why the requestor believes that the meeting (or a
portion thereof) should be open to the public. The Secretary shall
circulate such a request and supporting statement to the members of the
Commission, and the Commission, upon the request of any one of its
members, shall vote whether to open such a meeting or a portion thereof.
17 CFR 200.410 Miscellaneous.
(a) Unauthorized activities; maintenance of decorum. Nothing in
this subpart shall authorize any member of the public to be heard at, or
otherwise participate in, any Commission meeting, or to photograph or
record by videotape or similar device any Commission meeting or portion
thereof. The Commission may exclude any person from attendance at any
meeting whenever necessary to preserve decorum, or where appropriate or
necessary for health or safety reasons, or where necessary to terminate
behavior unauthorized by this paragraph (a). Any person desiring to
sound-record an open Commission meeting shall notify the Commission's
Secretary of his intention to do so at least 48 hours in advance of the
meeting in question. Any person desiring to photograph or videotape the
Commission's proceedings may apply to the Secretary for permission to do
so at least 48 hours in advance of the meeting in question. The
Commission's determination to permit photography or videotaping at any
meeting is confined to its exclusive discretion, and will be granted
only if such activities will not result in undue disruption of
Commission proceedings.
(b) Suspension of open meeting. Subject to the satisfaction of any
procedural requirements which may be required by this subpart, nothing
in this subpart shall preclude the Commission from directing that the
room be cleared of spectators, temporarily or permanently, whenever it
appears that the discussion during an open Commission meeting is likely
to involve any matter described in 200.402(a) (respecting closed
meetings).
(c) Access to Commission documents. Except as expressly provided,
nothing in this subpart shall authorize any person to obtain access to
any document not otherwise available to the public or not required to be
disclosed pursuant to subpart D. Access to documents considered or
mentioned at Commission meetings may only be obtained subject to the
procedures set forth in, and the provisions of, subpart D.
(d) Access to public meetings. Any member of the public who plans to
attend a public meeting of the Commission, and who requires an auxiliary
aid such as a sign language interpreter, should contact the Commission's
Selective Placement Coordinator, Office of Personnel at (202) 272-7065
or TDD number (202) 272-2552, prior to the meeting to make the necessary
arrangements. The Selective Placement Coordinator will take all
reasonable steps to accommodate requests made in advance of the
scheduled meeting date.
(42 FR 14693, Mar. 16, 1977, as amended at 44 FR 32366, June 6, 1979;
55 FR 10235, Mar. 20, 1990)
17 CFR 200.410 Subpart J -- Classification and Declassification of
National Security Information and Material
Authority: Sec. 19, Securities Act of 1933, as amended, 48 Stat.
84, 15 U.S.C. 77s. E.O. 12356, 47 FR 14874, Apr. 6, 1982. Information
Security Oversight Office Directive No. 1 (47 FR 27836, June 25, 1982).
Source: 44 FR 65737, Nov. 15, 1979, unless otherwise noted.
17 CFR 200.500 Purpose.
This part establishes general policies and procedures for the
classification, declassification and safeguarding of national security
information which is generated, processed and/or stored by the
Commission, and supplements Executive Order 12356, April 6, 1982 (47 FR
14874), and Information Security Oversight Office Directive No. 1, June
25, 1982 (47 FR 27836).
(47 FR 47236, Oct. 25, 1982)
17 CFR 200.501 Applicability.
This part applies to the handling of, and public access to, national
security information and classified documents in the Commission's
possession. Such documents no longer in the Commission's possession
will be handled by the agency having possession, or in accordance with
guidelines developed in consultation with the Archivist.
17 CFR 200.502 Definition.
As used in this part: Foreign government information means either
(a) information provided to the United States by a foreign government or
governments, an international organization of governments, or any
element thereof with the expectation, express or implied, that the
information, the source of the information, or both, are to be held in
confidence, or (b) information produced by the United States pursuant to
or as a result of a joint arrangement with a foreign government or
governments or an international organization of governments or any
element thereof, requiring that the information, the arrangement, or
both, are to be held in confidence.
(47 FR 47236, Oct. 25, 1982)
17 CFR 200.503 Senior agency official.
The Executive Director of the Commission is designated the senior
agency official responsible for conducting an oversight program to
ensure effective implementation of Executive Order 12356. Any
complaints or suggestions regarding the Commission's information
security program should be directed to the Office of the Executive
Director, Securities and Exchange Commission, Attn: Information
Security Program, 450 5th Street, NW., Washington, DC 20549.
(a) The Deputy Executive Director is the Senior Agency Official for
purposes of the Paperwork Reduction Act of 1980. In this capacity, the
Deputy Executive Director will carry out all responsibilities required
by the Act (Pub. L. 96-511, 3506(b)), as well as serving as Agency
Clearance Officer for purposes of the publication of notices in the
Federal Register.
(11 U.S.C. 901, 1109(a))
(47 FR 47236, Oct. 25, 1982, as amended at 49 FR 12686, Mar. 30,
1984; 51 FR 5315, Feb. 13, 1986)
17 CFR 200.504 Oversight Committee.
An Oversight Committee is established, under the chairmanship of the
Executive Director, with the following responsibilities:
(a) Establish a security education program to familiarize Commission
and other personnel who have access to classified information with the
provisions of Executive Order 12065, and encourage Commission personnel
to challenge those classification decisions they believe to be improper.
(b) Establish controls to insure that classified information is used,
processed, stored, reproduced, and transitted only under conditions that
will provide adequate protection and prevent access by unauthorized
persons.
(c) Establish procedures which require that a demonstrable need,
under section 4-1 of Executive Order 12065, for access to classified
information be established before administrative clearance procedures
are initiated, as well as other appropriate procedures to prevent
unnecessary access to classified information.
(d) Act on all suggestions and complaints concerning Commission
administration of its information security program.
(e) Establish procedures within the Commission to insure the orderly
and effective referral of requests for declassification of documents in
the Commission's possession.
(f) Review on an annual basis all practices for safeguarding
information and to eliminate those practices which are duplicative or
unnecessary.
(g) Recommend to the Chairman of the Commission appropriate
administrative action to correct abuse or violation of any provision of
Executive Order 12356.
(h) Consider and decide other questions concerning classification and
declassification that may be brought before it.
(i) Develop special contingency plans for the protection of
classified information used in or near hostile or potentially hostile
areas.
(j) Promptly notify the Director of the Information Security
Oversight Office whenever an officer or employee of the United States
Government or its contractors, licensees or grantees knowingly,
willfully or negligently (1) discloses to unauthorized persons
information properly classified under Executive Order 12356 or
predecessor orders or (2) classifies or continues the classification of
information in violation of Executive Order 12356 or predecessor orders.
(44 FR 65737, Nov. 15, 1979, as amended at 47 FR 47236, Oct. 25,
1982; 51 FR 5315, Feb. 13, 1986)
17 CFR 200.505 Original classification.
(a) No Commission Member or employee has the authority to classify
any information on an original basis.
(b) If a Commission employee originates information that appears to
require classification, the employee shall immediately notify the
Secretary and protect the information accordingly.
(c) If the Executive Director believes the information warrants
classification, it shall be sent to an agency with original
classification authority over the subject matter, or to the information
Security Oversight Office, for determination.
(44 FR 65737, Nov. 15, 1979, as amended at 51 FR 5315, Feb. 13, 1986)
17 CFR 200.506 Derivative classification.
Any document that includes paraphrases, restatements, or summaries
of, or incorporates in new form, information that is already classified
shall be assigned the same level of classification as the source; if,
however, the basic information appears to have been so changed that no
classification, or a lower classification than originally assigned,
should be used, the appropriate official of the originating agency or
office of origin who has the authority to upgrade, downgrade or
declassify the information must be consulted prior to assigning a
different classification to the information.
(47 FR 47236, Oct. 25, 1982)
17 CFR 200.507 Declassification dates on derivative documents.
(a) A document that derives its classification from information
classified under Executive Order 12356 of predecessor orders shall be
marked with the date or event assigned to that source information for
its automatic declassification or for review of its continued need for
classification.
(b) A derivative document that derives its classification from the
approved use of the classification guide of another agency shall bear
the declassification date required by the provisions of that
classification guide.
(47 FR 47236, Oct. 25, 1982)
17 CFR 200.508 Requests for mandatory review for declassification.
(a) Requests for mandatory review of a Commission document for
declassification may be made by any United States citizen or permanent
resident alien, including Commission employees, or a Federal agency, or
a State or local government. The request shall be in writing and shall
be sent to the Office of the Executive Director, Attn: Mandatory Review
Request, Securities and Exchange Commission, 450 5th Street NW.,
Washington, DC 20549.
(b) The request shall describe the material sufficiently to enable
the Commission to locate it. Requests with insufficient description of
the material will be returned to the requester for further information.
(c) Within 5 days of receiving a request for declassification, the
Commission shall acknowledge its receipt. If the document was
derivatively classified by the Commission or originally classified by
another agency, the request and the document shall be forwarded promptly
to the agency with original classification authority together with the
Commission's recommendation to withhold any of the information where
appropriate. The requester shall be notified of the referral.
(d) If the request requires the provision of services by the
Commission, fair and equitable fees may be charged under title 5 of the
Independent Offices Appropriation Act, 65 Stat. 290, 31 U.S.C. 483a.
(44 FR 65737, Nov. 15, 1979, as amended at 47 FR 47237, Oct. 25,
1982; 51 FR 5315, Feb. 13, 1986)
17 CFR 200.509 Challenge to classification by Commission employees.
Commission employees who have reasonable cause to believe that
information is classified unnecessarily, improperly, or for an
inappropriate period of time, may challenge those classification
decisions through mandatory review or other appropriate procedures as
established by the Oversight Committee. Commission employees who
challenge classification decisions may request that their identity not
be disclosed.
17 CFR 200.510 Access by historical researchers.
(a) Persons outside the executive branch performing historical
research may have access to information over which the Commission has
classification jurisdiction for the period requested (but not longer
than 2 years unless renewed for an additional period of less than 2
years) if the Executive Director determines in writing that access to
the information will be consistent with the interests of national
security.
(b) The person seeking access to classified information must agree in
writing:
(1) To be subject to a national agency check;
(2) To protect the classified information in accordance with the
provisions of Executive Order 12356; and
(3) Not to publish or otherwise reveal to unauthorized persons any
classified information.
(44 FR 65737, Nov. 15, 1979, as amended at 47 FR 47237, Oct. 25,
1982; 51 FR 5315, Feb. 13, 1986)
17 CFR 200.511 Access by former Presidential appointees.
(a) Former Commission Members appointed by the President may have
access to classified information or documents over which the Commission
has jurisdiction that they originated, reviewed, signed, or received
while in public office, if the Executive Director determines in writing
that access to the information will be consistent with the interest of
nation security.
(b) The person seeking access to classified information must agree in
writing:
(1) To be subject to a national agency check;
(2) To protect the classified information in accordance with the
provisions of Executive Order 12356; and
(3) Not to publish or otherwise reveal to unauthorized persons any
classified information.
(44 FR 65737, Nov. 15, 1979, as amended at 47 FR 47237, Oct. 25,
1982; 51 FR 5315, Feb. 13, 1986)
17 CFR 200.511 Subpart K -- Regulations Pertaining to the Protection of
the Environment
Authority: Sec. 23(a)(2) of the Securities and Exchange Act of 1934
(15 U.S.C. 78w(a)(2).
Source: 44 FR 41177, July 16, 1979, unless otherwise noted.
17 CFR 200.550 Purpose.
This subpart sets forth the procedures the Commission will follow to
ensure compliance with the goals of the National Environmental Policy
Act (NEPA) and with the procedures required by NEPA in the event that
the Commission should take action subject to such procedural
requirements.
17 CFR 200.551 Applicability.
(a) Compliance with the procedures set forth in 200.552 through
200.554 shall be appropriate where Commission action taken with respect
to security transactions subject to sections 6(b) and 7 of the Public
Utility Holding Company Act of 1935 and acquisitions subject to sections
9 and 10 of that Act involves major Federal action significantly
affecting the quality of the human environment.
(b) In addition to the foregoing, in the event of extraordinary
circumstances in which a Commission action not specified in paragraph
(a) of this section may involve major Federal action significantly
affecting the quality of the human environment, the Commission shall
follow the procedures set forth in 200.552 through 200.554, unless
doing so would be inconsistent with its statutory authority under the
Federal securities laws.
17 CFR 200.552 NEPA planning.
Where it is reasonably foreseeable by the Commission that it may be
required to act on a matter specified in 200.551 and that matter is
likely to involve major Federal action significantly affecting the
quality of the human environment, the Commission shall:
(a) Advise the relevant persons as to information respecting the
environment, if any, which may later be required to be submitted for
Commission consideration should Commission action become necessary;
(b) Consult on any environmental factors involved with individuals,
organizations, and state and local authorities interested in the planned
action; and
(c) Begin implementing the procedures set forth in 200.553 and
200.554 as soon as possible, Provided, That such procedures are not
inconsistent with the Commission's authority under the Federal
securities laws.
17 CFR 200.553 Draft, final and supplemental impact statements.
If the Commission determines that the requirements of section
102(2)(C) of NEPA for preparation of an environmental impact statement
are applicable in connection with a proposed Commission action, it shall
prepare such statement generally in accordance with the procedures
specified in 40 CFR parts 1500-1508, particularly part 1502 concerning
impact statement preparation and content, 1505.1 concerning
decision-making procedures, and 1501.6 concerning the function of
cooperating agencies, to the extent that such procedures do not conflict
with the Commission's statutory responsibilities and authority under the
Federal securities laws.
17 CFR 200.554 Public availability of information.
(a) Any environmental assessment or impact statement, and Commission
responses pertaining to formal rulemaking proceedings or adjudicatory
proceedings, shall be made part of the record in any such proceedings.
In the case of formal adjudicatory proceedings, this shall be done in
accordance with 201.20 of this chapter. In the case of formal
rulemaking proceedings, this shall be done in accordance with the
Commission's rules respecting such proceedings.
(b) The location of publicly available environmental impact
statements will be 450 Fifth Street, NW., Room 1024, Washington, DC
(c) Interested persons may obtain information regarding and status
reports on specific environmental impact statements and environmental
assessments by contacting the division or office within the Commission
which has responsibility for the particular proposed action.
(44 FR 41177, July 16, 1979, as amended at 47 FR 26819, June 22,
1982)
17 CFR 200.554 Subpart L -- Enforcement of Nondiscrimination on the
Basis of Handicap in Programs or Activities Conducted by the Securities
and Exchange Commission
Authority: 29 U.S.C. 794.
Source: 53 FR 25885, July 8, 1988, unless otherwise noted.
17 CFR 200.601 Purpose.
The purpose of this regulation is to effectuate section 119 of the
Rehabilitation, Comprehensive Services, and Developmental Disabilities
Amendments of 1978, which amended section 504 of the Rehabilitation Act
of 1973 to prohibit discrimination on the basis of handicap in programs
or activities conducted by Executive agencies or the United States
Postal Service.
17 CFR 200.602 Application.
This regulation ( 200.601-200.670) applies to all programs or
activities conducted by the agency, except for programs or activities
conducted outside the United States that do not involve individuals with
handicaps in the United States.
17 CFR 200.603 Definitions.
For purposes of this regulation, the term --
Assistant Attorney General means the Assistant Attorney General,
Civil Rights Division, United States Department of Justice.
Auxiliary aids means services or devices that enable persons with
impaired sensory, manual, or speaking skills to have an equal
opportunity to participate in, and enjoy the benefits of, programs or
activities conducted by the agency. For example, auxiliary aids useful
for persons with impaired vision include readers, Brailled materials,
audio recordings, and other similar services and devices. Auxiliary
aids useful for persons with impaired hearing include telephone handset
amplifiers, telephones compatible with hearing aids, telecommunication
devices for deaf persons (TDD's), interpreters, notetakers, written
materials, and other similar services and devices.
Complete complaint means a written statement that contains the
complainant's name and address and describes the agency's alleged
discriminatory action in sufficient detail to inform the agency of the
nature and date of the alleged violation of section 504. It shall be
signed by the complainant or by someone authorized to do so on his or
her behalf. Complaints filed on behalf of classes or third parties
shall describe or identify (by name, if possible) the alleged victims of
discrimination.
Facility means all or any portion of buildings, structures,
equipment, roads, walks, parking lots, rolling stock or other
conveyances, or other real or personal property.
Historic preservation programs means programs conducted by the agency
that have preservation of historic properties as a primary purpose.
Historic properties means those properties that are listed or
eligible for listing in the National Register of Historic Places or
properties designated as historic under a statute of the appropriate
State or local government body.
Individual with handicaps means any person who has a physical or
mental impairment that substantially limits one or more major life
activities, has a record of such an impairment, or is regarded as having
such an impairment.
As used in this definition, the phrase:
(1) Physical or mental impairment includes --
(i) Any physiological disorder or condition, cosmetic disfigurement,
or anatomical loss affecting one or more of the following body systems:
Neurological; musculoskeletal; special sense organs; respiratory,
including speech organs; cardiovascular; reproductive; digestive;
genitourinary; hemic and lymphatic; skin; and endocrine; or
(ii) Any mental or psychological disorder, such as mental
retardation, organic brain syndrome, emotional or mental illness, and
specific learning disabilities. The term physical or mental impairment
includes, but is not limited to, such diseases and conditions as
orthopedic, visual, speech, and hearing impairments, cerebral palsy,
epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease,
diabetes, mental retardation, emotional illness, and drug addiction and
alcoholism.
(2) Major life activities includes functions such as caring for one's
self, performing manual tasks, walking, seeing, hearing, speaking,
breathing, learning, and working.
(3) Has a record of such an impairment means has a history of, or has
been misclassified as having, a mental or physical impairment that
substantially limits one or more major life activities.
(4) Is regarded as having an impairment means --
(i) Has a physical or mental impairment that does not substantially
limit major life activities but is treated by the agency as constituting
such a limitation;
(ii) Has a physical or mental impairment that substantially limits
major life activities only as a result of the attitudes of others toward
such impairment; or
(iii) Has none of the impairments defined in paragraph (1) of this
definition but is treated by the agency as having such an impairment.
Qualified individual with handicaps means --
(1) With respect to preschool, elementary, or secondary education
services provided by the agency, an individual with handicaps who is a
member of a class of persons otherwise entitled by statute, regulation,
or agency policy to receive education services from the agency;
(2) With respect to any other agency program or activity under which
a person is required to perform services or to achieve a level of
accomplishment, an individual with handicaps who meets the essential
eligibility requirements and who can achieve the purpose of the program
or activity without modifications in the program or activity that the
agency can demonstrate would result in a fundamental alteration in its
nature;
(3) With respect to any other program or activity, an individual with
handicaps who meets the essential eligibility requirements for
participation in, or receipt of benefits from, that program or activity;
and
(4) Qualified handicapped person as that term is defined for purposes
of employment in 29 CFR 1613.702(f), which is made applicable to this
regulation by 200.640.
Section 504 means section 504 of the Rehabilitation Act of 1973 (Pub.
L. 93-112, 87 Stat. 394 (29 U.S.C. 794)), as amended by the
Rehabilitation Act Amendments of 1974 (Pub. L. 93-516, 88 Stat. 1617);
the Rehabilitation, Comprehensive Services, and Developmental
Disabilities Amendments of 1978 (Pub. L. 95-602, 92 Stat. 2955); and
the Rehabilitation Act Amendments of 1986 (Pub. L. 99-506, 100 Stat.
1810). As used in this regulation, section 504 applies only to programs
or activities conducted by Executive agencies and not to federally
assisted programs.
Substantial impairment means a significant loss of the integrity of
finished materials, design quality, or special character resulting from
a permanent alteration.
200.604 -- 200.609 (Reserved)
17 CFR 200.610 Self-evaluation.
(a) The agency shall, by September 6, 1989, evaluate its current
policies and practices, and the effects thereof, that do not or may not
meet the requirements of this regulation and, to the extent modification
of any such policies and practices is required, the agency shall proceed
to make the necessary modifications.
(b) The agency shall provide an opportunity to interested persons,
including individuals with handicaps or organizations representing
individuals with handicaps, to participate in the self-evaluation
process by submitting comments (both oral and written).
(c) The agency shall, for at least three years following completion
of the self-evaluation, maintain on file and make available for public
inspection:
(1) A description of areas examined and any problems identified; and
(2) A description of any modifications made.
17 CFR 200.611 Notice.
The agency shall make available to employees, applicants,
participants, beneficiaries, and other interested persons such
information regarding the provisions of this regulation and its
applicability to the programs or activities conducted by the agency, and
make such information available to them in such manner as the head of
the agency finds necessary to apprise such persons of the protections
against discrimination assured them by section 504 and this regulation.
200.612 -- 200.629 (Reserved)
17 CFR 200.630 General prohibitions against discrimination.
(a) No qualified individual with handicaps shall, on the basis of
handicap, be excluded from participation in, be denied the benefits of,
or otherwise be subjected to discrimination under any program or
activity conducted by the agency.
(b)(1) The agency, in providing any aid, benefit, or service, may
not, directly or through contractual, licensing, or other arrangements,
on the basis of handicap --
(i) Deny a qualified individual with handicaps the opportunity to
participate in or benefit from the aid, benefit, or service;
(ii) Afford a qualified individual with handicaps an opportunity to
participate in or benefit from the aid, benefit, or service that is not
equal to that afforded others;
(iii) Provide a qualified individual with handicaps with an aid,
benefit, or service that is not as effective in affording equal
opportunity to obtain the same result, to gain the same benefit, or to
reach the same level of achievement as that provided to others;
(iv) Provide different or separate aid, benefits, or services to
individuals with handicaps or to any class of individuals with handicaps
than is provided to others unless such action is necessary to provide
qualified individuals with handicaps with aid, benefits, or services
that are as effective as those provided to others;
(v) Deny a qualified individual with handicaps the opportunity to
participate as a member of planning or advisory boards;
(vi) Otherwise limit a qualified individual with handicaps in the
enjoyment of any right, privilege, advantage, or opportunity enjoyed by
others receiving the aid, benefit, or service.
(2) The agency may not deny a qualified individual with handicaps the
opportunity to participate in programs or activities that are not
separate or different, despite the existence of permissibly separate or
different programs or activities.
(3) The agency may not, directly or through contractual or other
arrangements, utilize criteria or methods of administration the purpose
or effect of which would --
(i) Subject qualified individuals with handicaps to discrimination on
the basis of handicap; or
(ii) Defeat or substantially impair accomplishment of the objectives
of a program or activity with respect to individuals with handicaps.
(4) The agency may not, in determining the site or location of a
facility, make selections the purpose or effect of which would --
(i) Exclude individuals with handicaps from, deny them the benefits
of, or otherwise subject them to discrimination under any program or
activity conducted by the agency; or
(ii) Defeat or substantially impair the accomplishment of the
objectives of a program or activity with respect to individuals with
handicaps.
(5) The agency, in the selection of procurement contractors, may not
use criteria that subject qualified individuals with handicaps to
discrimination on the basis of handicap.
(6) The agency may not administer a licensing or certification
program in a manner that subjects qualified individuals with handicaps
to discrimination on the basis of handicap, nor may the agency establish
requirements for the programs or activities of licensees or certified
entities that subject qualified individuals with handicaps to
discrimination on the basis of handicap. However, the programs or
activities of entities that are licensed or certified by the agency are
not, themselves, covered by this regulation.
(c) The exclusion of nonhandicapped persons from the benefits of a
program limited by Federal statute or Executive order to individuals
with handicaps or the exclusion of a specific class of individuals with
handicaps from a program limited by Federal statute or Executive order
to a different class of individuals with handicaps is not prohibited by
this regulation.
(d) The agency shall administer programs and activities in the most
integrated setting appropriate to the needs of qualified individuals
with handicaps.
200.631 -- 200.639 (Reserved)
17 CFR 200.640 Employment.
No qualified individual with handicaps shall, on the basis of
handicap, be subject to discrimination in employment under any program
or activity conducted by the agency. The definitions, requirements, and
procedures of section 501 of the Rehabilitation Act of 1973 (29 U.S.C.
791), as established by the Equal Employment Opportunity Commission in
29 CFR part 1613, shall apply to employment in federally conducted
programs or activities.
200.641 -- 200.648 (Reserved)
17 CFR 200.649 Program accessibility: Discrimination prohibited.
Except as otherwise provided in 200.650, no qualified individual
with handicaps shall, because the agency's facilities are inaccessible
to or unusable by individuals with handicaps, be denied the benefits of,
be excluded from participation in, or otherwise be subjected to
discrimination under any program or activity conducted by the agency.
17 CFR 200.650 Program accessibility: Existing facilities.
(a) General. The agency shall operate each program or activity so
that the program or activity, when viewed in its entirety, is readily
accessible to and usable by individuals with handicaps. This paragraph
does not --
(1) Necessarily require the agency to make each of its existing
facilities accessible to and usable by individuals with handicaps;
(2) In the case of historic preservation programs, require the agency
to take any action that would result in a substantial impairment of
significant historic features of an historic property; or
(3) Require the agency to take any action that it can demonstrate
would result in a fundamental alteration in the nature of a program or
activity or in undue financial and administrative burdens. In those
circumstances where agency personnel believe that the proposed action
would fundamentally alter the program or activity or would result in
undue financial and administrative burdens, the agency has the burden of
proving that compliance with 200.650(a) would result in such alteration
or burdens. The decision that compliance would result in such
alteration or burdens must be made by the agency head or his or her
designee after considering all agency resources available for use in the
funding and operation of the conducted program or activity, and must be
accompanied by a written statement of the reasons for reaching that
conclusion. If an action would result in such an alteration or such
burdens, the agency shall take any other action that would not result in
such an alteration or such burdens but would nevertheless ensure that
individuals with handicaps receive the benefits and services of the
program or activity.
(b) Methods -- (1) General. The agency may comply with the
requirements of this section through such means as redesign of
equipment, reassignment of services to accessible buildings, assignment
of aides to beneficiaries, home visits, delivery of services at
alternate accessible sites, alteration of existing facilities and
construction of new facilities, use of accessible rolling stock, or any
other methods that result in making its programs or activities readily
accessible to and usable by individuals with handicaps. The agency is
not required to make structural changes in existing facilities where
other methods are effective in achieving compliance with this section.
The agency, in making alterations to existing buildings, shall meet
accessibility requirements to the extent compelled by the Architectural
Barriers Act of 1968, as amended (42 U.S.C. 4151-4157), and any
regulations implementing it. In choosing among available methods for
meeting the requirements of this section, the agency shall give priority
to those methods that offer programs and activities to qualified
individuals with handicaps in the most integrated setting appropriate.
(2) Historic preservation programs. In meeting the requirements of
200.650(a) in historic preservation programs, the agency shall give
priority to methods that provide physical access to individuals with
handicaps. In cases where a physical alteration to an historic property
is not required because of 200.650(a) (2) or (3), alternative methods
of achieving program accessibility include --
(i) Using audio-visual materials and devices to depict those portions
of an historic property that cannot otherwise be made accessible;
(ii) Assigning persons to guide individuals with handicaps into or
through portions of historic properties that cannot otherwise be made
accessible; or
(iii) Adopting other innovative methods.
(c) Time period for compliance. The agency shall comply with the
obligations established under this section by November 7, 1988, except
that where structural changes in facilities are undertaken, such changes
shall be made by September 6, 1991, but in any event as expeditiously as
possible.
(d) Transition plan. In the event that structural changes to
facilities will be undertaken to achieve program accessibility, the
agency shall develop, by March 6, 1989, a transition plan setting forth
the steps necessary to complete such changes. The agency shall provide
an opportunity to interested persons, including individuals with
handicaps or organizations representing individuals with handicaps, to
participate in the development of the transition plan by submitting
comments (both oral and written). A copy of the transition plan shall
be made available for public inspection. The plan shall, at a minimum
--
(1) Identify physical obstacles in the agency's facilities that limit
the accessibility of its programs or activities to individuals with
handicaps;
(2) Describe in detail the methods that will be used to make the
facilities accessible;
(3) Specify the schedule for taking the steps necessary to achieve
compliance with this section and, if the time period of the transition
plan is longer than one year, identify steps that will be taken during
each year of the transition period; and
(4) Indicate the official responsible for implementation of the plan.
17 CFR 200.651 Program accessibility: New construction and
alterations.
Each building or part of a building that is constructed or altered
by, on behalf of, or for the use of the agency shall be designed,
constructed, or altered so as to be readily accessible to and usable by
individuals with handicaps. The definitions, requirements, and
standards of the Architectural Barriers Act (42 U.S.C. 4151-4157), as
established in 41 CFR 101-19.600 to 101-19.607, apply to buildings
covered by this section.
200.652 -- 200.659 (Reserved)
17 CFR 200.660 Communications.
(a) The agency shall take appropriate steps to ensure effective
communication with applicants, participants, personnel of other Federal
entities, and members of the public.
(1) The agency shall furnish appropriate auxiliary aids where
necessary to afford an individual with handicaps an equal opportunity to
participate in, and enjoy the benefits of, a program or activity
conducted by the agency.
(i) In determining what type of auxiliary aid is necessary, the
agency shall give primary consideration to the requests of the
individual with handicaps.
(ii) The agency need not provide individually prescribed devices,
readers for personal use or study, or other devices of a personal
nature.
(2) Where the agency communicates with applicants and beneficiaries
by telephone, telecommunication devices for deaf persons (TDD's) or
equally effective telecommunication systems shall be used to communicate
with persons with impaired hearing.
(b) The agency shall ensure that interested persons, including
persons with impaired vision or hearing, can obtain information as to
the existence and location of accessible services, activities, and
facilities.
(c) The agency shall provide signage at a primary entrance to each of
its inaccessible facilities, directing users to a location at which they
can obtain information about accessible facilities. The international
symbol for accessibility shall be used at each primary entrance of an
accessible facility.
(d) This section does not require the agency to take any action that
it can demonstrate would result in a fundamental alteration in the
nature of a program or activity or in undue financial and administrative
burdens. In those circumstances where agency personnel believe that the
proposed action would fundamentally alter the program or activity or
would result in undue financial and administrative burdens, the agency
has the burden of proving that compliance with 200.660 would result in
such alteration or burdens. The decision that compliance would result
in such alteration or burdens must be made by the agency head or his or
her designee after considering all agency resources available for use in
the funding and operation of the conducted program or activity and must
be accompanied by a written statement of the reasons for reaching that
conclusion. If an action required to comply with this section would
result in such an alteration or such burdens, the agency shall take any
other action that would not result in such an alteration or such burdens
but would nevertheless ensure that, to the maximum extent possible,
individuals with handicaps receive the benefits and services of the
program or activity.
200.661 -- 200.669 (Reserved)
17 CFR 200.670 Compliance procedures.
(a) Except as provided in paragraph (b) of this section, this section
applies to all allegations of discrimination on the basis of handicap in
programs and activities conducted by the agency.
(b) The agency shall process complaints alleging violations of
section 504 with respect to employment according to the procedures
established by the Equal Employment Opportunity Commission in 29 CFR
part 1613 pursuant to section 501 of the Rehabilitation Act of 1973 (29
U.S.C. 791).
(c)The Equal Employment Opportunity Manager shall be responsible for
coordinating implementation of this section. Complaints may be sent to
the EEO Manager, 450 Fifth Street NW., Washington, DC 20549.
(d) The agency shall accept and investigate all complete complaints
for which it has jurisdiction. All complete complaints must be filed
within 180 days of the alleged act of discrimination. The agency may
extend this time period for good cause.
(e) If the agency receives a complaint over which it does not have
jurisdiction, it shall promptly notify the complainant and shall make
reasonable efforts to refer the complaint to the appropriate Government
entity.
(f) The agency shall notify the Architectural and Transportation
Barriers Compliance Board upon receipt of any complaint alleging that a
building or facility that is subject to the Architectural Barriers Act
of 1968, as amended (42 U.S.C. 4151-4157), is not readily accessible to
and usable by individuals with handicaps.
(g) Within 180 days of the receipt of a complete complaint for which
it has jurisdiction, the agency shall notify the complainant of the
results of the investigation in a letter containing --
(1) Findings of fact and conclusions of law;
(2) A description of a remedy for each violation found; and
(3) A notice of the right to appeal.
(h) Appeals of the findings of fact and conclusions of law or
remedies must be filed by the complainant within 90 days of receipt from
the agency of the letter required by 200.670(g). The agency may extend
this time for good cause.
(i) Timely appeals shall be accepted and processed by the head of the
agency.
(j) The head of the agency shall notify the complainant of the
results of the appeal within 60 days of the receipt of the request. If
the head of the agency determines that additional information is needed
from the complainant, he or she shall have 60 days from the date of
receipt of the additional information to make his or her determination
on the appeal.
(k) The time limits cited in paragraphs (g) and (j) of this section
may be extended with the permission of the Assistant Attorney General.
(l) The agency may delegate its authority for conducting complaint
investigations to other Federal agencies, except that the authority for
making the final determination may not be delegated to another agency.
(53 FR 25882 and 25885, July 8, 1988, as amended at 53 FR 25882, July
8, 1988)
200.671 -- 200.699 (Reserved)
17 CFR 200.670 Subpart M -- Regulation Concerning Conduct of Members
and Employees and Former Members and Employees of the Commission
Authority: Secs. 19, 23, 48 Stat. 85, 901, as amended, sec. 20, 49
Stat. 833, sec. 319, 53 Stat. 1173, secs. 38, 211, 54 Stat. 841,
855; 15 U.S.C. 77s, 78w, 79t, 77sss, 80a-37, 80b-11; E.O. 11222; 3
CFR, 1964-1965 Comp., 5 CFR 735.104.
Source: 45 FR 36064, May 29, 1980, unless otherwise noted.
17 CFR 200.735-1 Purpose.
This subpart sets forth the standards of ethical conduct required of
members, employees and special Government employees, and former members
and employees of the Securities and Exchange Commission. It is a
further revision of a comprehensive conduct regulation first adopted by
the Commission in 1953 ''to restate the ethical principles which it
believes should govern and have governed the conduct of members and
employees and former members and employees of the Commission.''1 This
revision is necessary to provide members, employees, special Government
employees and former Commission members and employees with a
comprehensive statement of standards of conduct which are dictated by
applicable Federal law, Executive orders, and the Commission's own
requirements.
1The last major revision of the Conduct Regulation was done in 1966
to implement Executive Order 11222, May 8, 1965, and part 735 of the
Civil Service Commission regulations (5 CFR part 735) adopted pursuant
thereto. It also contains references to the several applicable statutes
governing employee conduct, particularly Pub. L. 87-849 (76 Stat. 1119,
18 U.S.C. 201 et seq.), and the ''Code of Ethics for Government
Service,'' House Concurrent Resolution 175, 85th Congress, 2d session
(72 Stat. B 12).
17 CFR 200.735-2 Policy.
(a) The Securities and Exchange Commission has been entrusted by
Congress with the protection of the public interest in a highly
significant area of our national economy. In view of the effect which
Commission action frequently has on the general public, it is important
that members, employees and special Government employees maintain
unusually high standards of honesty, integrity, impartiality and
conduct. They must be constantly aware of the need to avoid situations
which might result either in actual or apparent misconduct or conflicts
of interest and to conduct themselves in their official relationships in
a manner which commands the respect and confidence of their fellow
citizens.
(b) For these reasons, members, employees and special Government
employees should at all times abide by the standards of conduct set
forth in this subpart, the canons of ethics for members of the
Securities and Exchange Commission (subpart C of this part 200) and, in
the case of a professional person, the ethical standards applicable to
the profession of such person.
17 CFR 200.735-3 General provisions.
(a)(1) In considering the prohibitions of this section, members and
employees must constantly be aware that the provisions here enumerated
set forth standards of conduct which are broader than the specific
applications stated in the rules which follow. Therefore, members and
employees should look to these general prohibitions when assessing the
advisability of a particular course of conduct. The broadly stated
provisions of this rule are aimed at eliminating the appearance of
impropriety as well as any actual wrongdoing.
(2) Accordingly, a member or employee should avoid any action,
whether or not specifically prohibited by law or regulation (including
the provisions of this subpart), which would result in or might create
appearance of, among other things:
(i) Using public office for private gain;
(ii) Giving preferential treatment to any organization or person;
(iii) Losing complete independence or impartiality;
(iv) Making a Government decision outside official channels; or
(v) Affecting adversely the confidence of the public in the integrity
of the Government.
(3) While provisions applicable to all employees of the Commission
are outlined in this regulation, certain Offices or Divisions for
management reasons may require more stringent regulations in certain
areas. These may be imposed by Division Directors, Office Heads or
Regional Administrators with the consent of the Chairman and the
approval of the Office of Government Ethics. Should such additional
regulations be imposed, all employees affected must be notified ten days
before the effective date of the restriction or at the time of their
employment.
(b) A member or employee of the Commission shall not:
(1) Engage, directly or indirectly, in any personal business
transaction or private arrangement for personal profit the opportunity
for which arises because of his or her official position or authority,
or that is based upon confidential or nonpublic information which he or
she gains by reason of such position or authority. 2
(2) Solicit or accept, directly or indirectly, any gift, gratuity,
favor, entertainment, loan, service, or any other thing of monetary
value from any person with whom he or she transacts business on behalf
of the United States:
(i) Who has, or is seeking to obtain, contractual or other business
or financial relations with the Commission;
(ii) Who conducts operations or activities regulated by the
Commission; or
(iii) Who has interests that may be substantially affected by the
performance or non-performance of his or her official duty.
(3) The restrictions of paragraph (b)(2) of this section do not
prohibit members and employees from the following:
(i) The acceptance of food and refreshments, not lavish in kind,
offered free in the course of a meeting or other group function, not
connected with an inspection or investigation, at which attendance is
desirable because it will assist the member or employee in performing
his or her official duties. Members shall determine for themselves and
their staffs the propriety of accepting such invitations. Division
Directors, Office Heads, and Regional Administrators are authorized to
make such determinations for themselves and their subordinates. Staff
members are required to advise their Division Director, Office Head, or
Regional Administrator of invitations received from entities described
in paragraph (b)(2) of this section.
(ii) The acceptance of items of value when the circumstances make it
clear that it is family or personal relationships rather than the
business of the persons concerned which govern and are the motivating
factors.
(iii) The acceptance of unsolicited advertising or promotional
material, such as pens, pencils, notepads, calendars and other items of
modest value.
(iv) The acceptance of meals and refreshments as provided to all
panelists, when participating as a panelist in an educational program.
(v) The acceptance of gifts given for participation in an educational
program when they are (A) of modest value; or (B) provided to all
participants in the program; or (C) in the nature of a remembrance
traditional to the particular sponsor institution.
(vi) For purposes of this subpart, person means an individual, a
corporation, a company, an association, a firm, a partnership, a
society, a joint stock company; or any other organization or
institution or anyone who acts for such a person in a representative
capacity. /3/
(4) Solicit contributions from another employee for a gift to an
employee in a superior official position. An employee in a superior
official position shall not accept a gift presented as a contribution
from employees receiving less salary than himself or herself. An
employee shall not make a donation as a gift to an employee in a
superior official position (5 U.S.C. 7351). However, this paragraph does
not prohibit the occasional giving of gifts of modest value to an
employee in a superior position or the receipt of such gifts by a
superior or the use of completely voluntary contributions of nominal
amounts by employees within the Commission to establish funds for the
limited purpose of providing token remembrances or gifts of modest value
to an employee in a superior position on special occasions.
(5) Accept from a foreign government a gift, decoration or other
thing of more than minimal value except in accordance with the
provisions of 5 U.S.C. 7342.
(6) Discuss or entertain a proposal for future employment by any
person outside the Government with whom he or she is personally and
substantially involved in transacting business on behalf of the United
States. 4
(i) If an employee wishes to discuss future employment with another
Government agency, this fact should be disclosed to the employee's
Division Director, Office Head or Regional Administrator prior to any
discussion regarding employment, if at that time the employee is
representing the Commission in a particular matter in which the other
agency is taking a position adverse to the Commission.
(7)(i) Divulge to any unauthorized person or release in advance of
authorization for its release /5/ any nonpublic Commission document, or
any information contained in any such document or any confidential
information: (A) In contravention of the rules and regulations of the
Commission promulgated under 5 U.S.C. 552, 552a and 552b; or (B) in
circumstances where the Commission has determined to accord such
information confidential treatment.
(ii) Except where the Commission or the General Counsel, pursuant to
delegated authority, has previously granted approval or in relation to a
Commission administrative proceeding or a judicial proceeding in which
the Commission, or a present or former Commissioner, or present or
former member of the staff, represented by Commission counsel, is a
party, any officer, employee or former officer or employee who is served
with a subpoena requiring the disclosure of confidential or non-public
information or documents shall, unless the Commission or the General
Counsel, pursuant to delegated authority, authorizes the disclosure of
such information or documents, respectfully decline to disclose the
information or produce the documents called for, basing his or her
refusal on this paragraph.
(iii) Any member, employee or former member or employee who is served
with such a subpoena not covered by the exceptions in paragraph
(b)(7)(ii) of this section shall promptly advise the General Counsel of
the service of such subpoena, the nature of the information or documents
sought, and any circumstances which may bear upon the desirability in
the public interest of making available such information or documents. 6
The Commission or the General Counsel, pursuant to delegated authority,
shall authorize the disclosure of non-expert, non-privileged, factual
staff testimony and the production of non-privileged documents when
validly subpoenaed.
(8) Act in any official matter with respect to which there exists a
personal interest incompatible with an unbiased exercise of official
judgment. 7
(9) Have direct or indirect personal, business or financial affairs
which conflict or appear to conflict with his or her official duties and
responsibilities.
(10)(i) Use, or allow the use of, directly or indirectly, Government
property of any kind, including property leased to the Government, for
other than officially approved activities. Officially approved
activities for the purpose of this section are those activities which
are part of an employee's official duties or are approved by the
employee's Division Director, Office Head or Regional Administrator as
being sufficiently related to the employee's official duties, or
important to the interests of the Commission to warrant the use of
Commission facilities for their accomplishment. Division Directors,
Office Heads and Regional Administrators may, for their own activities
meeting the same criteria, obtain the concurrence of the Executive
Director.
(ii) An employee has a positive duty to protect and conserve
Government property, including equipment, supplies, and other property
entrusted or issued to him or her.
(11) Participate, while on Government-owned or leased property or
while on duty for the Government, in any gambling activity, including
the operation of a gambling device, in conducting a lottery or pool, in
a game for money or property, or in selling or purchasing a numbers slip
or ticket.
(12) Engage in unlawful or unethical conduct, or other conduct
prejudicial to the Government.
(45 FR 36064, May 29, 1980; 45 FR 40975, June 17, 1980, as amended
at 50 FR 23287, June 3, 1985; 53 FR 17458, May 17, 1988; 54 FR 33500,
Aug. 15, 1989)
/2/ Detailed provisions regarding outside or private employment and
transactions in securities and commodities are set forth in 200.735-4
and 200.735-5, respectively. Further provisions regarding use and
disclosure of confidential information are set forth in paragraph (b) of
this section and in the note appended thereto.
Members of the Commission are subject also to the following
prohibition in section 4(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78d(a)): ''* * * No Commissioner shall engage in any other
business, vocation, or employment than that of serving as Commissioner,
nor shall any Commissioner participate, directly or indirectly, in any
stock market operations or transactions of a character subject to
regulation by the Commission pursuant to this title * * *.'' This does
not preclude Commissioners from engaging in securities transactions.
See Opinion letter dated February 11, 1975, sent by the Office of the
General Counsel to David Reich, Ethics Counselor at the Civil Service
Commission. In addition, members of the Commission are subject to the
requirements of Executive Order 11222 of May 8, 1965.
/3/ Members and employees of the Commission are subject also to
provisions of the Federal criminal code which prohibit, (1) any officer
or employee of the United States from asking, accepting or receiving any
money or other thing of value in connection with any matter before him
or her in his or her official capacity, (18 U.S.C. 203); and (2) the
compensation of government employees for services to the government by
entities other than the United States (18 U.S.C. 209). In addition,
members are prohibited by 5 CFR 735.203(c) from receiving compensation
or anything of monetary value for any consultation, lecture, discussion,
writing, or appearance, the subject matter of which is devoted
substantially to the responsibilities, programs, or operations of the
Commission or which draws substantially on official data or ideas which
have not become part of the body of public information. See also 17 CFR
200.735-4.
/4/ Detailed provisions regarding negotiations for future employment
are set forth in 200.735-7.
5In Section 171 of the Commission's Manual of Administrative
Regulations the Commission's policy on making available nonpublic
information to Federal, State and foreign government authorities,
national securities exchanges and national securities associations is
outlined.
6Detailed prohibitions regarding disclosure or use of confidential or
nonpublic information are set forth in Rule 122 (17 CFR 230.122) under
the Securities Act of 1933; section 24(b) of the Securities Exchange
Act of 1934 (15 U.S.C. 78x) and Rule 0-4 (17 CFR 240.0-4); and Rule
24(b)(2) (17 CFR 240.24b-2), thereunder; section 22(c) of the Public
Utility Holding Company Act of 1935 (15 U.S.C. 79y) and Rule 104
thereunder (17 CFR 250.104); section 45(a)(1) of the Investment Company
Act, and section 210(b) of the Investment Advisers Act of 1940 (15
U.S.C. 80b-10). But see, section 171 of the Administrative Manual which
authorizes the staff to divulge certain nonpublic information without
Commission approval (n. 5, supra).
7Section 200.735-6 of this subpart provides a procedure for relieving
employees from assignments in certain cases, including those covered by
paragraph (b)(5) of this section.
17 CFR 200.735-4 Outside employment and activities.
(a) No member or employee shall permit his or her name to be
associated in any way with any legal, accounting or other professional
firm or office. /8/
(b)(1) No employee shall have any outside or private employment,
activity, or affiliation incompatible with concurrent employment by the
Commission. Incompatible activities include but are not limited to
(i) Employment or association with any securities exchange,
association of securities dealers, or other self-regulatory organization
either registered under the Securities Exchange Act of 1934 or otherwise
involved with the securities industry, any registered broker, dealer,
registered municipal securities dealer, public utility holding company,
investment company, investment adviser, securities information
processor, transfer agent, clearing agency or other persons who are
subject to regulation by the Commission, or where the facts relating to
a particular employment would create an appearance of impropriety,
because the employment is directly or indirectly related to the
issuance, sale, purchase or investment of securities;
(ii) Legal, accounting, or engineering work for compensation
involving matters in which the Federal government may be significantly
interested;
(iii) Acceptance of a fee, compensation, gift, payment of expense, or
any other thing of monetary value in circumstances in which acceptance
may result in or create the appearance of conflicts of interest;
(iv) Outside employment or activity which impairs the employee's
mental or physical capacity to perform his or her Commission duties and
responsibilities in an acceptable manner;
(2) For the purposes of this paragraph (b), the private employment of
an employee's spouse, or other member of his or her immediate household
with any securities exchange, association of securities dealers, or
other self-regulatory organization either registered under the
Securities Exchange Act of 1934 or otherwise involved in the securities
industry, any registered broker, dealer, registered municipal securities
dealer, public utility holding company, investment company, investment
adviser, securities information processor, transfer agent, clearing
agency or other persons who are subject to regulation by the Commission,
or where the particular employment is directly related to the issuance,
sale, purchase or investment of securities is deemed to be incompatible
with the employee's concurrent employment by the Commission if the
duties and activities incident to such employment relate directly to the
official activities of the Commission employee, except as determined
otherwise by the Commission in a specific case.
(i) Member of his or her immediate household is defined for the
purposes of this paragraph as a resident of the employee's household who
is related to the employee by blood or marriage.
(3) No employee shall accept or perform outside employment prohibited
by law, regulations of the Office of Personnel Management or the rules
in this subpart.
(4) No employee shall receive any salary or anything of monetary
value from a private source as compensation for his or her services to
the Government (18 U.S.C. 209), except as otherwise provided by law.
(5) The Commission encourages employees to engage in teaching,
lecturing, and writing activities with or without compensation. 9 In
participating in such activities, employees should be guided by the
following:
(i) No teaching, lecturing, or writing should be engaged in if
prohibited by law, Executive order, Office of Personnel Management
regulations, or the rules in this subpart.
(ii) No teaching, lecturing, or writing should be engaged in
(including for the purpose of the special preparation of a person or
class of persons for an examination of the Office of Personnel
Management or Board of Examiners for the Foreign Service) that depends
on information filed with the Commission, or obtained by the Commission
in an investigation or otherwise, or generated within the Commission
which is nonpublic, unless the Commission gives formal approval for the
use of such nonpublic information on the basis that the use thereof is
in the public interest. 10
(6)(i) Subject to the specific prohibition and requirements set forth
below, the Commission may accept payment or reimbursement in cash or in
kind, for travel and subsistence expenses actually incurred by
Commission members and employees, while on official duty status, in
connection with the participation of such members and employees in
conferences, proceedings, meetings, seminars, and educational programs
concerning the functions and responsibilities of the Commission and
related topics.
(ii)(A) The Commission shall accept no payment or reimbursement for
expenses described in paragraph (b)(6)(i) of this section from or in
connection with a conference sponsored by:
(1) A person directly required to file reports or registration
statements with the Commission, or
(2) A person directly or indirectly regulated by the Commission, or
(3) Any association or other group composed predominantly of persons
regulated by the Commission, Provided, however, That the Chairman may
authorize the Commission to accept payment or reimbursement from such a
group. In determining whether to authorize such payment or
reimbursement, the Chairman shall consider the benefits to the
Commission and the public of participation in the particular program and
the possibility of any appearance of impropriety.
(B) For purposes of this section, the phrase person regulated by the
Commission means all persons whose activities are directly regulated by,
or who are required to register with, the Commission, including but not
limited to, such persons as brokers or dealers in securities, national
securities exchanges, national securities associations, investment
companies, investment advisers, public utility holding companies, and
any self-regulatory organization, as that term is defined in section 3
of the Securities Exchange Act of 1934, 15 U.S.C. 78(c).
(iii)(A) Subordinate members of the staff who are invited to
participate in programs which offer payment or reimbursement meeting the
criteria of paragraph (b)(6)(i) of this section must, prior to
participation, obtain the written approval of their Division Director,
Office Head, or Regional Administrator to participate in the program and
the written approval of the Chairman, if paragraph (b)(6)(ii)(A)(3) of
this section applies. If paragraph (b)(6)(ii)(A)(3) of this section
does not apply, the Executive Director shall determine in writing
whether the Commission will accept the payment or reimbursement.
(1) In acting on requests to participate, Division Directors, Office
Heads, and Regional Administrators shall consider: (i) The benefit to
the Commission and the public of participation; (ii) the expertise of
the proposed participant; and (iii) the appropriate allocation of
resources.
(2) In determining whether the Commission shall accept payment or
reimbursement, the Executive Director shall consider the possibility of
any appearance of impropriety.
(B) Division Directors, Office Heads, and Regional Administrators
must, prior to participation, obtain the written approval of the
Chairman, if paragraph (b)(6)(ii)(A)(3) of this section applies. If
paragraph (b)(6)(ii)(A)(3) of this section does not apply, the Executive
Director shall determine, in writing, considering the possibility of any
appearance of impropriety, whether the Commission will accept the
payment or reimbursement. Division Directors, Office Heads, and
Regional Administrators shall make the determinations specified in
paragraph (b)(6)(iii)(A)(1) of this section as to their own
participation.
(C) Except if paragraph (b)(6)(ii)(A)(3) of this section applies,
each Commissioner shall determine for himself or herself whether payment
or reimbursement for his or her expenses incident to participation in
programs meeting the criteria of paragraph (b)(6)(i) of this section
should be accepted by the Commission. Notice of each decision shall be
sent to the Executive Director.
(D) Whenever it is determined, pursuant to paragraphs (b)(6)(iii)
(A), (B), or (C) of this section that the Commission will accept a
particular payment or reimbursement, the Executive Director shall
forward notice of that decision to the Public Reference Room,
Washington, DC, for insertion in a public file.
(iv) Payment or reimbursement shall not be accepted for expenses
which are unreasonable or lavish.
(v) On a quarterly basis, the Commission shall publish in the SEC
Docket a compilation of payments and reimbursements accepted.
(vi) The Commission's acceptance from any person of payment or
reimbursement for the expenses of a spouse or traveling companion
accompanying a member or employee is prohibited. If a staff member
wishes to participate in a program which offers payment or reimbursement
meeting the criteria of paragraph (b)(6)(i) of this section and
acceptance would not be prohibited by paragraph (b)(6)(ii) of this
section, but is denied approval in accordance with paragraphs
(b)(6)(iii)(A) or (B) of this section, or wishes to accept reimbursement
for the travel expenses of his or her spouse or traveling companion, the
staff member may participate in the program and accept such
reimbursement personally, Provided, That:
(A) No reimbursement for travel expenses may be accepted from a
person who does, or is seeking to do, business with the Commission, is
regulated directly or indirectly by the Commission, is registered with
the Commission, or has interests which may be substantially affected by
the official's performance or non-performance of his or her official
duties.
(B) No reimbursement may be accepted for the travel expenses of an
employee's spouse or traveling companion unless the prior written
approval of the General Counsel is obtained. Under appropriate
circumstances, such as programs where participants are expected to
engage in social activities, the General Counsel may approve acceptance
upon written application.
(C) A copy of the General Counsel's approval and notice of the amount
of payment or reimbursement accepted from the sponsor must be sent to
the Executive Director for inclusion in the public file in accordance
with paragraph (b)(6)(iii)(D) of this section.
(D) Such staff member's participation and travel occur only while on
annual leave, approved in accord with regular leave procedures. Note 7
CFR 200.735-4(e)(2)(ii).
(vii) Members or employees who are participating in a program meeting
the criteria of paragraph (b)(6)(i) of this section, which is sponsored
by a person determined by the Secretary of the Treasury to be a
tax-exempt organization pursuant to 26 U.S.C. 501(c)(3), and for which
reimbursement for the member's or employee's participation will be
accepted by the Commission, may, while on official duty, accept from the
sponsoring entity bona fide reimbursement for actual expenses for travel
and necessary subsistence for a spouse or traveling companion Provided
that the procedures detailed in paragraphs (d)(6)(vi) (A)-(C) of this
section are followed.
(7) The provisions of this paragraph (b) and 200.735-3(b)(2) do not
preclude a member or employee from:
(i) Participation in the activities of national or State political
parties not proscribed by law;
(ii) Participation in the affairs of, or acceptance of an award for a
meritorious public contribution or achievement given by, a charitable,
religious, professional, social, fraternal, nonprofit educational,
recreational, public service, or civic organization.
(8)(i) As a matter of general policy, the Commission discourages the
acceptance of honoraria or similar fees and payments which are given for
publications, speeches or lectures based on the official duties of the
employee. In accord with this policy, no member or employee may accept
such an honorarium unless written approval is obtained in advance from
the Commission's General Counsel, subject to the general review of the
Commission. Requests for such approval should be submitted to the
General Counsel in writing and should include a statement in support of
the request.
(ii) Honoraria which are most likely to be deemed acceptable are
those which appear to be remuneration for teaching. An employee may
not, under any circumstances, accept an honorarium from any person from
whom reimbursement for travel expenses is prohibited by paragraph
(b)(6)(ii) of this section. In any event an employee may not accept an
excessive honorarium as described in 2 U.S.C. 441(i). This section does
not preclude the acceptance of a modest gift for participation as a
speaker, as provided in Rule 3.
(c) No employee shall appear in court or on a brief in a
representative capacity (with or without compensation) or otherwise
accept or perform legal, accounting, engineering, or similar
professional work, unless specifically authorized to do so by the
Commission. Acceptance of a forwarding fee shall be deemed to be within
the foregoing prohibition. As a matter of general policy, outside or
private professional work or practice by the staff is discouraged and
only in unusual cases or circumstances will it be authorized. However,
the Commission encourages its employees, in off-duty hours and
consistent with official responsibilities, to participate, without
compensation, in programs to provide legal or other appropriate
assistance and representation to indigents. 12 Such participation may
include limited appearances in court and on briefs when required in
connection with such programs. However, such participation may not
involve any activities which are prohibited by law, Executive orders,
Office of Personnel Management regulations, or this subpart M. 13 For
example, 18 U.S.C. 205 prohibits a Federal employee from appearing in
court in a matter in which the United States has an interest (other than
on behalf of the United States), without regard to compensation.
(1) The provisions of this paragraph (c) and 200.735-3(b)(2) do not
preclude an employee from:
(i) Acting without compensation as agent or attorney (A) for a
Commission employee who is sued or is under investigation in connection
with his or her official duties; (B) for any Commission employee who is
the subject of disciplinary, loyalty or other personnel administrative
proceedings in connection with those proceedings; or (C) for any
Commission employee who raises claims or against whom allegations of
wrongdoing are made pursuant to the Commission's Equal Opportunity
regulations, if such representation is not inconsistent with the
faithful performance of the employee's duties. 14
(d) No member or employee shall hold office in or be a director of
any company which has public security holders, except not for profit
corporations, savings and loan associations, and similar institutions,
whose securities are exempted under section 3(a)(4) or 3(a)(5) of the
Securities Act of 1933 (15 U.S.C. 77c(a)(4), 77c(a)(5)).
(e)(1) As paragraph (b)(5) of this section indicates, the Commission
encourages employees to engage in teaching, lecturing and writing
activities. 15 It is understood, however, that Commission employees in
their teaching, writing and lecturing shall not
(i) Use confidential or nonpublic information;
(ii) Make comments on pending litigation in which the Commission is
participating as a party or amicus curiae; or
(iii) Make comments on rulemaking proceedings pending before the
Commission which would adversely affect the operations of the
Commission.
(2) To assist employees in conforming to these requirements the
following procedure for reviewing writings prior to publication, or
prepared speeches prior to delivery, has been established:
(i) Employees must submit proposed publications or prepared speeches
relating to the Commission, or the statutes or rules it administers, to
the General Counsel for review. Employees will be notified as promptly
as possible, with due regard to publication deadlines, but in any event
within 30 days of receipt of the written document, whether such document
conforms to the requirements of this Rule.
(ii) A determination by the General Counsel that a proposed
publication conforms to the requirements of the rule will not involve
adoption of, or concurrence in, the views expressed. Therefore, such
publication or speech shall include at an appropriate place or by way of
footnote, or otherwise, the following disclaimer of responsibility:
The Securities and Exchange Commission, as a matter of policy,
disclaims responsibility for any private publication or statement by any
of its employees. The views expressed herein are those of the author
and do not necessarily reflect the views of the Commission or of the
author's colleagues upon the staff of the Commission.
In appropriate cases, the above disclaimer may be modified by the
General Counsel or the Commission to reflect the circumstances of an
individual case. In addition, any publication or speech which reflects
positions taken by the Commission shall set forth those positions
accurately and, if it contains differences with Commission positions, it
shall clearly state that such positions are those of the employee.
(f) An employee who intends to accept or perform any outside or
private employment or professional work shall obtain necessary
authorization in advance of such acceptance or performance. A request
for such authorization shall be submitted to the Division Director,
Office Head or Regional Administrator concerned, together with all
pertinent facts regarding the proposed employment, such as the name of
the employer, the nature of the work to be performed, its estimated
duration, and the fee or compensation to be received. Division
Directors, Office Heads and Regional Administrators have been delegated
the authority to approve routine requests for outside employment. The
approving official shall forward to the Director of Personnel a copy of
each request showing the date of approval. Requests of a non-routine
nature should be forwarded to the Director of Personnel.
(g) The Director of Personnel, or his designee, is authorized to
approve or disapprove requests for outside or private employment under
this rule, except as to those cases which, in his judgment, should be
considered and decided by the Commission. An employee may appeal a
disapproved request to the Commission. The written appeal, submitted
through the Director of Personnel, shall give reasons why the proposed
outside or private employment is consistent with this rule. The
Director of Personnel may not approve proposed outside or private
employment which is absolutely prohibited by these rules. The
Commission may, in a particular case, approve such employment. 16
(Pub. L. 98-38)
(45 FR 36064, May 29, 1980; 45 FR 40975, June 17, 1980; 48 FR
39216, Aug. 30, 1983; 50 FR 45603, Nov. 1, 1985)
/8/ With respect to members, this paragraph supplements the statutory
prohibition against outside employment contained in section 4(a) of the
Securities Exchange Act of 1934, quoted in footnote 2. Except as
otherwise indicated, the remaining provisions of this section are not
made applicable to members in view of the provisions of section 4(a) of
the Securities Exchange Act of 1934.
9As to employees, while the receipt of honoraria is discouraged (See
17 CFR 200.735-4(b)(7)), that rule is not applicable to the receipt of
compensation for teaching.
10Since members of the Commission are covered by section 401(a) of
Executive Order 11222, they are prohibited by Civil Service Regulations
(5 CFR 735.203(c)) from receiving compensation or anything of monetary
value for any consultation, lecture, discussion, writing, or appearance
the subject matter of which is devoted substantially to the
responsibilities, programs, or operations of their agencies, or which
draws substantially on official data or ideas which have not become part
of the body of public information.
11(Reserved)
12As a matter of policy, the Commission encourages members of its
staff to participate in matters involving improvement to their
communities and service to indigent persons, provided that the necessary
approval is obtained in advance. However, in no case will approval be
given to participate in matters involving securities.
13Attention is called to Title 18, United States Code, sections 201
through 209 which provide, among other things, that Federal employees
are prohibited from acting as agent or attorney in prosecuting any claim
against the United States or from aiding and assisting in any way,
except as otherwise permitted in the discharge of official duties, in
the prosecution or support of any such claim, or from receiving any
gratuity, or any share of an interest in any claim from any claimant
against the United States; and from directly or indirectly receiving or
agreeing to receive any compensation whatever for services rendered or
to be rendered to any persons in relation to any matter in which the
United States is a party or directly or indirectly interested. 18
U.S.C. 205 contains an exception from the foregoing restrictions for
acting as agent or attorney, without compensation, for government
employees who are the subject of disciplinary, loyalty or other
personnel-type proceedings, in connection with these proceedings.
14This is adapted from the provision in 18 U.S.C. 205 and expresses
the Commission's general policy which favors the representation of
fellow employees without compensation. However, it may be necessary to
look to other regulations for specific provisions regarding such
representation.
15This paragraph (e), requiring review of prepared speeches or
writings relating to the Commission, does not apply to teaching
activities.
16The Commission does not favor the granting of waivers from the
provision of this subsection.
17 CFR 200.735-5 Securities transactions.
(a)(1) This section applies to all transactions effected by or on
behalf of a member or employee. This includes transactions for the
accounts of other persons effected by the member or employee, directly
or indirectly, under a power of attorney or otherwise. In addition, a
member or employee is considered to have sufficient interest in the
securities transactions of his or her spouse or unemancipated minor
child or other member of his or her immediate household so that
transactions effected by or on behalf of such persons must be reported
and are subject to all the terms of this section.
(i) Except, this section shall not apply to securities transactions
of a legally separated spouse living apart from the member or employee,
including transactions for the benefit of a minor child, if the member
or employee has no power to control and does not, in fact, advise or
control with regard to such transactions. If the member or employee has
knowledge of securities held by a separated spouse or for the benefit of
a minor child, the disqualification provisions of Rule 6, 17 CFR
200.735-6, and 18 U.S.C. 208 are applicable.
(ii) For purposes of this section member of his or her immediate
household means a resident of the member's or employee's household who
is related to the employee by blood or marriage or who is in the legal
care and/or custody of the employee by reason of adoption, prospective
adoption or guardianship.
(2) Members and employees are prohibited from recommending or
suggesting the purchase or sale of securities:
(i) Based on non-public information gained in the course of
employment; or
(ii) Which a member or employee could not purchase because of the
restrictions of this rule, in any circumstance in which the member or
employee could reasonably expect to benefit from the recommendation, or
to anyone over whom the member or employee has or may have control or
substantial influence.
(b)(1) No member or employee shall effect or cause to be effected any
transaction in a security except for bona fide investment purposes.
Therefore, all securities purchased by a member or employee must be held
for a minimum of six months. Except, this holding period is not
applicable to
(i) Securities sold for less than the purchase price pursuant to a
stop-loss order entered at the time of purchase and submitted to the
Office of Personnel with the report of purchase;
(ii) Money market fund shares; /7/
(iii) Securities purchased by a member or employee prior to entrance
on duty with the Commission;
(iv) Debt securities with an initial term of less than six months
which are held to term;
(v) Shares of a unit investment trust having a term of less than six
months; or
(vi) The transferring of funds within a family of registered
investment companies.
(2) For purposes of this provision a family means any two or more
registered investment companies which share the same investment adviser
or principal underwriter and hold themselves out to investors as related
companies for purposes of investment and investor services.
(c) No member or employee shall effect any purchase or sale of an
option, future contract, or option on a future contract involving a
security or group of securities.
(d) No member or employee shall
(1) Carry securities on margin;
(2) Borrow funds or securities, with or without collateral, for the
purpose of purchasing or carrying securities with the proceeds, unless
the prior approval of the Commission has been secured; or
(3) Sell a security which he or she does not own, or consummate a
sale by the delivery of a security borrowed by or for such member's or
employee's account.
(e)(1) Except as provided in this paragraph (e) or paragraph (f)
below, members and employees are prohibited from purchasing or selling
any security which is the subject of a registration statement filed
under the Security Exchange Act of 1934 (15 U.S.C. 78a et seq.), the
Securities Act of 1933 (15 U.S.C. 77a et seq.), or a letter of
notification filed under Regulation A, or any security of the same
issuer while such a registration statement or letter of notification is
pending or during the first 60 days after its effective date. This
prohibition shall not apply to:
(i) A security which is the subject of a pending registration
statement filed on Forms S-2, S-3, S-8, F-2, F-3, 8-A, or 8-B; or
(ii) Offerings, except initial public offerings, of shares by an
investment company, other than a closed-end investment company, or to
offerings by a registered separate account (as defined in section
1(a)(37) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(37))
which become effective pursuant to 17 CFR 230.486(b).
(2) Securities of a unit investment trust whose registration
statements become effective pursuant to 17 CFR 230.487 may be purchased
immediately upon effectiveness of the registration statement.
(3) Securities which are registered for delayed distribution pursuant
to 17 CFR 230.415 may be purchased 60 days after the registration
becomes effective. The subsequent filing of a pricing amendment or
sticker does not revive the prohibition on purchase.
(f) A member or employee may sell a security which is referred to in
paragraph (e) of this section only if:
(1) The member or employee certifies that he or she has no
information which is not publicly available concerning or relating to
the issuer; and
(2) The employee's Division Director, Office Head or Regional
Administrator certifies that the employee has not participated in the
registration processing. Members, Division Directors, Office Heads, and
Regional Administrators are required to submit such certification on
their own behalf to the Director of the Office of Personnel.
(g) No member or employee shall purchase any security which to his or
her knowledge is involved in any pending investigation by the
Commission, or in any proceeding before the Commission, or to which the
Commission is a party.
(h) No member or employee shall purchase any security of any company
which is in a receivership or bankruptcy proceeding in which the
Commission has filed a notice of appearance.
(i) No member or employee shall purchase securities of:
(1) Any holding company registered under section 5 of the Public
Utility Holding Company Act of 1935 (15 U.S.C. 79e), or any subsidiary
thereof, or
(2) Any company, if its status under such Act, or the applicability
of any provision of the Act to it, is known by the employee to be under
consideration.
(j) The restrictions imposed in paragraphs (e), (g), (h), and (i) of
this section do not apply;
(1) To the exercise of a privilege to convert or exchange securities;
(2) To the exercise of rights accruing unconditionally by virtue of
ownership of other securities (as distinguished from a contingent right
to acquire securities not subscribed for by others);
(3) To the acquisition and exercise of rights in order to round out
fractional shares;
(4) To the acceptance of stock dividends on securities already owned;
to the reinvestment, under a reinvestment program, of cash dividends on
a security already owned; or the participation in a periodic investment
plan for the purchase of a security when the original purchase was
consistent with the provisions of this rule; or
(5) Investments in funds established pursuant to the Federal
Employees Retirement System.
(k) No member or employee holding a Senior Executive Service position
in the Division of Investment Management shall purchase any securities
issued by any investment company registered under the Investment Company
Act of 1940 (15 U.S.C. 80a et seq.). Except, capital or income dividends
received by persons subject to this rule from securities acquired prior
to entrance on duty, may be reinvested, but no optional investments may
be made.
(l) No member or employee shall have a beneficial interest in any
broker, dealer or investment adviser through ownership of securities or
otherwise. However, if a corporation acquires or establishes a
subsidiary or affiliate subject to regulation by the Commission
(regulated entity),
(1) A member or employee may retain his or her existing holdings in
the corporation, provided the security was originally acquired in
compliance with the provisions of this rule or prior to entry on duty
with the Commission.
(2) Purchases of the corporation's shares will be permitted so long
as the regulated entity subsidiary or affiliate provides less than 10%
of the corporation's gross revenue. Except for reinvestment of cash
dividends, additional purchases are prohibited when the regulated entity
provides 10% or more of the corporation's gross revenues.
(3) A member or employee who owns shares in a corporation with a
regulated entity subsidiary or affiliate is disqualified from
participating in any matter including rulemaking which affects the
regulated entity unless the disqualification is waived in accordance
with the provisions of Rule 6, of this section, 17 CFR 200.735-6, and 18
U.S.C. 208(b).
(m)(1) Annually, in accordance with the procedures adopted by the
Director of Personnel, every member and employee shall furnish the
Director of Personnel with a complete list of all securities in which he
or she has an interest. Employees having no interests in securities and
required to so state.
(2) Except as provided in paragraphs (m)(3) and (m)(4) of this
section, members and employees shall report every acquisition or sale of
any security within five business days of the transaction date or date
confirmation is received. (Reports submitted by employees in field
offices must be placed in the mails within five business days of the
transaction date or date the confirmation is received for each
transaction.)
(3) After the initial purchase of shares in a mutual fund, employees
shall report holdings in that mutual fund only on the annual statement.
(4) Changes in holdings, other than by purchase, which do not affect
disqualification, such as those resulting from the automatic
reinvestment of dividends, stock splits, stock dividends or
reclassifications, may be reported on the annual statement rather than
when notification of the transaction is received. But, the acquisition
of holdings by, for example, gifts, inheritance or spin-offs, which may
result in additional disqualifications pursuant to Rule 6 of this
section, 17 CFR 200.735-6, and 18 U.S.C. 208 shall be reported within
five days of the receipt of the notice of the change in holdings.
(n) At the time of taking the oath of office, or prior thereto if
requested by the Director of Personnel, a new member or employee shall
provide to the Office of Personnel, as requested, information relating
to --
(1) Securities owned by or held for the benefit of him or her, or his
or her spouse or unemancipated minor child, or a member of his or her
immediate household, or by any trust or estate of which he or she is a
trustee or other fiduciary or beneficiary, or by any person for whom he
or she effects transactions under a power of attorney or otherwise;
(2) Accounts with securities firms;
(3) Close relatives (i.e. children, parents, grandparents, siblings,
aunts, uncles, or like relations of a spouse), who are partners or
officers of securities firms, investment advisers, or registered public
utility holding companies or their affiliates;
(4) The holding of office in or being a director of any company which
has public security holders; and
(5) Such other information as may be required by the Director of
Personnel.
Employees are required to advise the Office of Personnel of changes
in the foregoing information within ten business days of the time the
new information is learned.
(o) Paragraphs (b), (m), and (n) of this section do not apply to
personal notes, individual real estate mortgages, securities issued by
the U.S. Government or its agencies, and securities issued by building
and loan associations or cooperatives.
(p) Any member or employee who is a trustee or other fiduciary or a
beneficiary of a trust or estate holding securities not exempted by
paragraph (o) of this section, shall report the existence and nature of
such trust or estate to the Director of Personnel. The transactions of
such trust or estate, which is not a qualified blind trust, shall be
subject to all the provisions of this section except if the member or
employee did not create the trust, is solely a beneficiary, has no power
to control, and does not in fact control or advise with respect to the
investments of the trust or estate, unless the Commission shall
otherwise direct in view of the circumstances of the particular case.
(q) The Director of Personnel, or his designee, is authorized to
require the disposition of securities acquired as a result of a
violation of the provisions of this section, whether unintentional or
not. Repeated violations shall be reported to the Commission for
appropriate action.
(r) Any member or employee who believes that the application of any
of the provisions of this rule will result in undue hardship in a
particular case may make a written application to the Commission
(through the Director of Personnel) setting out, in detail, the reasons
for that belief and requesting a waiver. However, as a matter of policy
the Commission favors a strict interpretation of the provisions of this
rule.
(53 FR 18553, May 24, 1988)
/7/ For purposes of this rule a money market fund is defined as an
open end investment company whose investment policy calls for investment
of at least 80% of its assets in debt securities maturing in 13 months
or less.
17 CFR 200.735-6 Action in case of personal interest.
Any employee assigned to work on any application, filing or matter of
a company (a) in which he or she or his or her spouse or his or her
minor unemancipated child then owns any securities or has a personal
interest, including a continuing financial interest in a pension or
retirement plan, shared income, or other arrangement, as a result of any
current or prior employment or business or professional association; or
(b) with which he or she has been employed or associated in the past 5
years; or (c) which was a client of a firm with which he or she had
been associated, shall immediately advise his or her Division Director
or other Office Head or Regional Administrator of the fact. Division
Directors, Office Heads and Regional Administrators are authorized to
direct the reporting employee to continue with the assignment in
question where this appears in the interest of the Government, taking
into account (1) the prohibitions stated in 200.735-3(b) (7) and (8);
(2) the general desirability of avoiding situations that require a
question of conflict of interest to be resolved; (3) the extent to
which the employee's activities will be supervised; and (4) the
difficulty of assigning the matter to some other employee. Where the
employee in question is not relieved of the assignment, his or her
written report concerning the nature of his or her interest shall be
forwarded to the Director of Personnel with a notation that he or she
has been directed to continue the assignment, together with such
explanation, if any, as may seem appropriate. In the event that a
Division Director, Office Head or Regional Administrator deems that he
or she has, himself or herself, such a personal interest in an
application, filing or matter of a company as may raise a question as to
his or her disinterestedness, he or she may delegate his or her
responsibility with regard thereto to a subordinate, but in that event
shall submit a brief memorandum of the circumstances to the Director of
Personnel. 18
(45 FR 36064, May 29, 1980; 45 FR 40975, June 17, 1980)
1818 U.S.C. 208, provides among other things, that a member or
employee is prohibited from participating personally and substantially
in any matter in which to his knowledge, he, his spouse, minor child,
partner, organization in which he is serving as an officer, director,
trustee, partner or employee, or any person or organization with whom he
is negotiating or has any arrangement concerning prospective employment,
has a financial interest. This section (of the Criminal Code) does not
apply if the employee has received a written determination made by an
authorized official that the interest is not so substantial as to be
deemed likely to affect the integrity of the employee's service. Note:
Members of the Commission may follow the procedural provision contained
in Part V, Section 503 of the Executive Order 11222.
17 CFR 200.735-7 Negotiation for employment.
(a) An employee may not negotiate employment with anyone outside the
Commission with whom he or she is personally transacting business in any
matter on behalf of the Commission or the United States, or while he or
she is immediately or personally engaged in representing the Commission
in any matter in which the prospective employer is a participant or
witness or counsel for such a person, whether or not such a person takes
a substantive position in an adversary proceeding in opposition to the
Commission's position.
(b) An employee who wishes to negotiate employment with another
Government agency at a time when he or she is representing the
Commission in a particular matter in which the other Government agency
is taking a position adverse to the Commission should disclose this
intention to his or her Division Director, Office Head or Regional
Administrator prior to taking any action.
(c) No employee shall undertake to act personally on behalf of the
Commission in any capacity in a matter19 that, to his or her knowledge,
affects even indirectly any person or organization outside the
Commission with whom he or she is discussing or entertaining any
proposal for future employment, except pursuant to the direction of the
Commission, his or her Division Director, Office Head, or Regional
Administrator, as provided in 200.735-6. See footnote 18.
19Employees should bear in mind that in this connection the word
matter is construed very broadly. See 200.735-8 and footnote 20,
thereto, infra.
17 CFR 200.735-8 Practice by former members and employees of the
Commission.
(a)(1) No person shall appear in a representative capacity before the
Commission in a particular matter if such person, or one participating
with him or her in the particular matter, participated personally and
substantially in that matter while he or she was a member or employee of
the Commission. /20/ As used in this rule, a matter means a discrete
and isolatable transaction or set of transactions between identifiable
parties. /21/
(2) No person who has been a member or employee shall, within 2 years
after his or her employment has ceased, assist, by personal presence, a
person appearing in a representative capacity before the Commission in
any matter in which he or she participated personally and substantially
while a member or employee of the Commission at any time within a period
of 1 year prior to the termination of such responsibility.
(3) No person who has been a member or an employee shall, within 2
years after his or her employment has ceased, appear in a representative
capacity before the Commission in any matter which was under his or her
official responsibility as a member or employee of the Commission at any
time within a period of 1 year prior to the termination of such
responsibility. The term official responsibility as defined in 18
U.S.C. 202 means the ''direct administrative or operating authority,
whether intermediate or final, and either exercisable alone or with
others, and either personally or through subordinates, to approve,
disapprove, or otherwise direct Government action.''
(4) No employee in a position which is designated by the Director of
the Office of Government Ethics shall, within one year after his or her
employment has ceased, appear in a representative capacity before the
Commission or communicate with the Commission or its employees with the
intent to influence. /22/ This restriction does not apply to members
who ceased employment before July 1, 1979, or to employees who ceased
employment prior to February 28, 1980.
(b)(1) Any former member or employee of the Commission who, within 2
years after ceasing to be such, is employed or retained as the
representative of any person outside the Government in any matter in
which it is contemplated that he or she will appear before the
Commission, or communicate with the Commission or its employees, shall,
within ten days of such retainer or employment, or of the time when
appearance before, or communication with the Commission or its employees
is first contemplated, file with the Secretary of the Commission a
statement which includes:
(i) A description of the contemplated representation;
(ii) An affirmative representation that the former employee while on
the Commission's staff had neither personal and substantial
responsibility nor official responsibility for the matter which is the
subject of the representation; and
(iii) The name of the Commission Division or Office in which the
person had been employed.
(2) Employment of a recurrent character may be covered by a single
comprehensive statement. Each such statement should include an
appropriate caption indicating that it is filed pursuant to this
section. The reporting requirements of this paragraph do not apply to
(i) Communications incidental to court appearances in litigation
involving the Commission; and
(ii) Oral communications concerning ministerial or informational
matters or requests for oral advice not otherwise prohibited by
paragraph (a) of this section.
(c) As used in this section, the term appear before the commission
means physical presence before the Commission or its employees in either
a formal or informal setting or the conveyance of material in connection
with a formal appearance or application to the Commission. As used in
this section the term communication with intent to influence does not
encompass communications which are not for the purpose of influencing
the Commission or any of its employees or which, at the time of the
filings, are reasonably believed not to involve any potential
controversy. As used in this section, the term representative or
representative capacity shall include not only the usual type of
representation by an attorney, etc., but also representation of a
corporation in the capacity of an officer, director or controlling
stockholder thereof.
(d)(1) Partners or associates of any person disqualified from
appearing or practicing before the Commission in a particular matter by
paragraph (a)(1) of this section are also disqualified. Such partners
or associates (the firm) may request a waiver of this prohibition from
the Commission by writing a letter to the General Counsel of the
commission setting forth the facts of the proposed representation and
the individual's disqualification. In appropriate situations, a firm
may request a generic waiver with respect to a number of different
matters. Upon the advice of the Office of the General Counsel, the
Commission, or the General Counsel exercising delegated authority, will
advise the requestor of the Commission's response.
(2) Waivers ordinarily will be granted where the firm makes a
satisfactory representation that it has adopted screening measures which
will effectively isolate the individual lawyer disqualified under
paragraph (a)(1) of this section from participating in the particular
matter or matters and from sharing in any fees attributable to it. It
will be considered significant for purposes of this determination that:
(i) The firm had a pre-existing securities law practice prior to the
arrival of the disqualified attorney;
(ii) The matter was previously the subject of consideration by the
firm or the client was already advised by the firm;
(iii) In cases where the matter or client became the subject of
consideration by the firm subsequent to the firm's employment of the
lawyer individually disqualified, that the matter was not brought to the
firm because of the disqualified attorney.
(3) Notwithstanding the existence or non-existence of any of these
factors, no waiver will be issued if the proposed representation would
create a significant appearance of impropriety or would otherwise
adversely affect the interests of the government. 23 All proceedings
with respect to waivers shall be a matter of public record except to the
extent that such public disclosure might violate attorney-client
privilege or breach the attorney's obligation to preserve the
confidences and secrets of this or her clients, reveal the existence of
ongoing private investigations, interfere with law enforcement
proceedings, or otherwise be inconsistent with the public interest.
(e) Persons in doubt as to the applicability of any portion of this
section may apply for an advisory ruling of the Commission. 24
(45 FR 36064, May 29, 1980, as amended at 50 FR 23669, June 5, 1985)
/20/ As used in this paragraph, a single investigation or formal
proceeding, or both if they are related, shall be presumed to constitute
a particular matter for at least 2 years irrespective of changes in the
issues. However, in cases of proceedings in which the issues change
from time to time, such as proceedings involving compliance with section
11 of the Public Utility Holding Company Act (15 U.S.C. 79k), this
paragraph shall not be construed as prohibiting appearance in such a
proceeding, more than two years after ceasing to be a member or employee
of the Commission, unless it appears to the Commission that there is
such an identity of particular issues or pertinent facts as to make it
likely that confidential information, derived while a member or employee
of the Commission, would have continuing relevance to the proceeding, so
as to make participation therein by the former member or employee of the
Commission unethical or prejudicial to the interests of the Commission.
/21/ This definition is taken from Formal Opinion 342 of the ABA
Ethics Committee. The opinion states that ''work as a government
employee in drafting, enforcing or interpreting government or agency
procedures, regulations or laws, or in briefing abstract principles of
law, does not disqualify the lawyer under DR9-101B (which states 'a
lawyer shall not accept private employment in a matter in which he had
substantial responsibility while he was a public employee') from
subsequent private employment involving the same regulation procedures,
or points of law * * *.''
/22/ This prohibition appears in the Ethics in Government Act of
1978. Pub. L. 95-521.
23For example, no waiver will be granted if, during the course of
representing a client who has an interest with respect to a matter
before the Commission, a firm employs, or accepts as a partner, a member
of the staff or of the Commission who at any time during the course of
that representation had direct and substantial responsibility for the
same matter, and whose departure would result in a significant adverse
impact upon that matter at the Commission.
24Attention of former members and employees is directed to Formal
Opinion 342 of the Committee on Ethics of the American Bar Association,
62 A.B.A.J. 517 (1975) and to 18 U.S.C. 207.
17 CFR 200.735-9 Indebtedness.
(a) The Securities and Exchange Commission considers the indebtedness
of its members and employees to be essentially a matter of their own
concern and will not be placed in the position of acting as a collection
agency or of determining the validity or amount of contested debts.
Nevertheless, failure on the part of an employee without good reason and
in a proper and timely manner to honor debts acknowledged by him or her
to be valid, or reduced to judgment by a court, or to make or to adhere
to satisfactory arrangements for the settlement thereof, may be a cause
for disciplinary action. In this connection each member and employee is
expected to meet his or her responsibilities for payment of Federal,
State and local taxes. For purposes of this section, in a proper and
timely manner means in a manner which the agency determines does not,
under the circumstances, reflect adversely on the Government as his or
her employer.
(b) Compensation due members and employees is subject to garnishment
for child support and alimony obligations. (42 U.S.C. 659).
17 CFR 200.735-10 Miscellaneous statutory provisions.
Each member and employee is responsible for acquainting himself or
herself with each statute that relates to his or her ethical and other
conduct as a member or employee of the Commission and of the Government,
including the statutory provisions listed below. Violations of any of
these statutes are deemed to be violations of the rules in this subpart
M as well.
(a) House Concurrent Resolution 175, 85th Congress, 2d Session, 72
Stat. B12, the ''Code of Ethics for Government Service.''
(b) Chapter 11 of title 18 U.S.C., relating to bribery, graft, and
conflicts of interest, as appropriate to the employees concerned.
(c) The prohibition against lobbying with appropriated funds (18
U.S.C. 1913).
(d) The prohibition against disloyalty and striking (5 U.S.C. 7311,
18 U.S.C. 1918).
(e) The prohibition against (1) the disclosure of classified
information (18 U.S.C. 798, 50 U.S.C. 783); and (2) disclosure of
confidential information (18 U.S.C. 1905).
(f) The provision relating to the habitual use of intoxicants to
excess (5 U.S.C. 7352).
(g) The prohibition against the misuse of a Government vehicle (31
U.S.C. 638a(c)).
(h) The prohibition against the misuse of the franking privilege (18
U.S.C. 1719).
(i) The prohibition against the use of deceit in an examination or
personnel action in connection with Government employment (18 U.S.C.
1917).
(j) The prohibition against fraud or false statements in a Government
matter (18 U.S.C. 1001).
(k) The prohibition against mutilating or destroying a public record
(18 U.S.C. 2071).
(l) The prohibition against counterfeiting and forging transportation
requests (18 U.S.C. 508).
(m) The prohibition against (1) embezzlement of Government money or
property (18 U.S.C. 641); (2) failing to account for public money (18
U.S.C. 643); and (3) embezzlement of the money or property of another
person in the possession of an employee by reason of his employment (18
U.S.C. 654).
(n) The prohibition against unauthorized use of documents relating to
claims from or by the Government (18 U.S.C. 285).
(o) The prohibition against political activities in subchapter III of
chapter 73 of title 5 U.S.C. and 18 U.S.C. 602, 603, 607, and 608.
(p) The prohibition against an employee acting as the agent of a
foreign principal registered under the Foreign Agents Registration Act
(18 U.S.C. 219).
17 CFR 200.735-11 Statement of employment and financial interests.
(a) Members and employees in the Senior Executive Service or Grades
GS-16 through GS-18 are required to file a financial disclosure report
as provided by title II of the Ethics in Government Act of 1978, Pub.
L. 95-521. Members and such employees need not also file the statement
of employment and financial interests required by the following
provisions.
(b) Prior to the time of entry on duty, or upon designation to a
position set forth in paragraph (c) of this section, such employee shall
submit to the Director of Personnel a statement, on the official form
made available for this purpose through the Office of Personnel, setting
forth the following information:25
(1) A list of the names of all corporations, companies, firms, or
other business enterprises, partnerships, nonprofit organizations, and
educational or other institutions with or in which the employee, his or
her spouse, unemancipated minor child or other member of his or her
immediate household has --
(i) Any connection as an employee, officer, owner, director, member,
trustee, partner, adviser or consultant; or
(ii) Any continuing financial interest, through a pension or
retirement plan, shared income, or other arrangement as a result of any
current or prior employment or business or professional association.
(iii) Any financial interest through the ownership of stock, stock
options, bonds, securities, or other arrangements including trusts.
(2) A list of the names of the employee's creditors and the creditors
of his or her spouse, unemancipated minor child or other member of his
or her immediate household, other than those creditors to whom any such
person may be indebted by reason of a mortgage on property which he or
she occupies as a personal residence, or to whom such person may be
indebted for current and ordinary household and living expenses such as
those incurred for household furnishings, vacations, an automobile,
education, or the like.
(3) A list of the employee's interests and those of his or her
spouse, unemancipated minor child, or other member of his or her
immediate household in real property or rights in lands, other than
property which he or she occupies as a personal residence.
(4) For the purpose of this section, member of his or her immediate
household means a resident of the employee's household who is related to
the employee by blood or marriage.
(5) In the instance where a spouse is not a member of the employee's
immediate household, and the employee certifies he or she neither
derives nor expects to derive any economic benefit from the holdings of
the spouse, the Director of Personnel may waive the requirement of
reporting the interests of such spouse.
(c) Except as to employees noted in paragraph (a) of this section,
statements of employment and financial interests are required of the
following:
(1) All employees in grade GS-15.
(2) Incumbents of the following positions, regardless of grade:
(i) Executive Staff. (A) Legal Assistants to the Chairman and to
each Commissioner; (B) Special Counsels to the Chairman.
(ii) Employees serving under SEC Fellowship Programs.
(iii) All employees engaged in any aspect of Government contracting
or procurement activities.
(iv) Division, Office, Directorate
(A) Directors
(B) Deputies
(C) Associates
(D) Assistants
(E) Chief Counsels
(v) Regional Offices
(A) Administrators
(B) Associate Administrators
(C) Assistant Administrators
(D) Attorneys-in-Charge of Branch Offices
(E) Chief Enforcement Attorneys
(d) Changes in, or additions to, the information contained in an
employee's statement of employment and financial interests shall be
reported in a supplementary statement as of May 15 of each year. If no
changes or additions occur, a negative report is required.
Notwithstanding the filing of the annual report required by this
paragraph, each employee shall at all times avoid acquiring a financial
interest that could result, or taking an action that would result, in a
violation of the conflict-of-interest provisions of section 208 of title
18 U.S.C., or of this Conduct Regulation.
(e) If any information required to be included on a statement of
employment and financial interest or supplementary statement, including
holdings placed in trust, is not known to the employee but is known to
another person, the employee shall request that other person to submit
information in his or her behalf.
(f) Paragraph (c) of this section does not require an employee to
submit any information relating to his or her connection with, or
interest in, a non-profit educational, charitable, religious,
professional, social, fraternal, recreational, public service, civic, or
political organization, or a similar organization not conducted as a
business enterprise. For the purpose of this section, educational and
other institutions doing research and development or related work
involving grants of money from or contracts with the Government are
deemed business enterprises and are required to be included in an
employee's statement of employment and financial interests.
(g) Statements of employment and financial interests filed pursuant
to paragraph (c) of this section shall be sent to the Director of
Personnel in a sealed envelope marked ''Confidential Employment and
Financial Interests.'' They shall be maintained in a confidential file.
Only those officials of the Commission whose participation is necessary
for the carrying out of the purpose of this Conduct Regulation may have
access to such statements and no information may be disclosed from them
except as the Commission or the Office of Personnel Management may
determine for good cause shown.
(h) In accordance with the requirements of the Ethics in Government
Act of 1978, Pub. L. 95-521, the Director of Personnel or the Assistant
Director of Personnel shall review the financial disclosure reports
filed pursuant to that Act.
(i) The Director of Personnel or the Assistant Director of Personnel
shall examine the statements of employment and financial interests filed
pursuant to paragraph (c) of this section to determine whether conflicts
of interest or apparent conflicts of interest on the part of employees
exist. An employee shall be afforded the opportunity to explain any
conflict or appearance of conflict. When the Director or Assistant
Director of Personnel, in consultation with appropriate superiors of the
employee involved, is unable to resolve a conflict or appearance of
conflict, he or she shall report the matter to the Commission through
the Counselor for the Commission designated under 200.735-15(a).
(j) The Counselor for the Commission shall examine statements filed
by the Director of Personnel and the Assistant Director of Personnel.
(k) Except as otherwise provided in paragraph (a) of this section the
statement of employment and financial interests and supplementary
statements required of employees are in addition to, and not in
substitution for, or in derogation of, any similar requirement imposed
by law, order or regulation. The submission of a statement by an
employee does not permit him or her or any other person to participate
in a matter in which his or her or the other person's participation is
prohibited by law, order or regulation.
(l) An employee has the right to ask for a review through the
Commission's grievance procedure outlined in section 771, Part II,
Manual of Administrative Regulations, of a complaint that his or her
position has been improperly included under the provisions of this
section as one requiring the submission of a statement of employment and
financial interests.
(45 FR 36064, May 29, 1980; 45 FR 40975, June 17, 1980)
25In addition to the information required by this Rule, all employees
are required by Rule 5 to file annually with the Director of Personnel a
listing of their securities holdings.
17 CFR 200.735-12 Special Government employees.
(a) Special Government employee means a person defined in section 18
U.S.C. 202 as a special Government employee. All of the provisions of
this Conduct Regulation are applicable to special Government employees,
except that in specific appropriate cases the Commission may exempt such
employees from, or modify the applicability of, any portion of any
provision of the Conduct Regulation.
(b) In no event will the Commission waive a provision of the Conduct
Regulation which would permit a special Government employee to:
(1) Use his or her Government employment for a purpose that is, or
gives the appearance of being, motivated by the desire for private gain
for himself or another person, particularly one with whom he or she has
family, business, or financial ties.
(2) Use inside information obtained as a result of his or her
Government employment for private gain for himself or herself or another
person either by direct action on his or her part or by counsel,
recommendation, or suggestion to another person, particularly one with
whom he or she has family, business, or financial ties. For purposes of
this paragraph, inside information means information obtained under
Government authority which has not become part of the body of public
information.
(3) Use his or her Government employment to coerce, or give the
appearance of coercing, a person to provide financial benefit to himself
or herself or another person, particularly one with whom he or she has
family, business, or financial ties.
(4) Receive or solicit from a person having business with the
Commission anything of value as a gift, gratuity, loan, entertainment,
or favor for himself or herself or another person, particularly one with
whom he or she has family, business or financial ties.
(c) Prior to entrance on duty, each special Government employee shall
submit to the Director of Personnel a statement of employment and
financial interests which contains such information as the Director of
Personnel determines is relevant in the light of the duties the special
Government employee is to perform and, if appropriate, the financial
disclosure report as provided by title II of the Ethics in Government
Act of 1978, Pub. L. 95-521. It shall be kept current throughout the
period of employment by the filing of supplementary statements in
accordance with the requirements of 200.735-11(d). Statements shall be
on the official form made available for this purpose through the Office
of Personnel.
(d) The Commission may waive the requirement of paragraph (c) of this
section in the case of a special Government employee who is not a
consultant or an expert, as those terms are defined in chapter 304 of
the Federal Personnel Manual (5 CFR 735.304), if the duties of the
position are determined to be at a level of responsibility which does
not require the submission of such statement to protect the integrity of
the Commission.
17 CFR 200.735-13 Disciplinary and other remedial action.
(a) Knowing participation in a violation of this subpart by persons
not within the scope of the foregoing rules in this subpart shall
likewise be deemed improper conduct and in contravention of Commission
rules. Departure from any of the rules in this subpart by employees or
special Government employees without specific approval may be cause for
appropriate remedial and/or disciplinary action or, in the case of
former members, employees, and special Government employees, for
disqualification from appearing and practicing before the Commission,
which may be in addition to any penalty prescribed by law.
(b) When there has been a departure from any of the rules of this
subpart without specific approval or when a conflict of interest or an
apparent conflict of interest on the part of an employee or special
Government employee arises, the Director of Personnel may order
immediate action to end such conflict or appearance of conflict of
interest. Remedial action may include, but is not limited to (1)
changes in assigned duties; (2) divestment by the employee or special
Government employee of his conflicting interest; (3) disciplinary
action; or (4) disqualification for a particular assignment. Remedial
action, whether disciplinary or otherwise, shall be effected in
accordance with any applicable laws, Executive Orders, and regulations.
The Director of Personnel may refer any recommended action to the
Commission. The employee may obtain review by the Commission of any
action ordered to be taken by the Director of Personnel. During the
period of review, unless otherwise directed by the Commission, the
action ordered by the Director of Personnel is stayed.
(c) Former members or employees who violate the post-employment
restriction provisions of 18 U.S.C. 207(a), (b) or (c), which parallel
the provisions of Rule 8(a), supra, will be subject to an administrative
enforcement proceeding as set forth in Rule 2(e) of the Commission's
Rules of Practice, 17 CFR 201.2(e), except that, when proceedings are
brought to determine if violations of post-employment restrictions have
occurred, denial of the privilege of appearing and practicing before the
Commission will be based on a finding of violation of the provisions of
Rule 8(a) and 18 U.S.C. 207 (a), (b) and (c). Procedures applicable to
such administrative proceedings are to be found in the Commission's
Rules of Practice, 17 CFR 201.1 et seq.
17 CFR 200.735-14 Employees on leave of absence.
The provisions of the rules in this subpart relative to employees of
the Commission are applicable to employees on a leave with pay or a
leave without pay status other than extended military service.
17 CFR 200.735-15 Interpretive and advisory service.
(a) The General Counsel shall be designated Counselor for the
Commission and shall serve as the Commission's delegate to the Office of
Personnel Management on matters covered by the rules in this subpart.
The General Counsel shall be responsible for coordinating the
Commission's counseling services provided under this section and for
assuring that counseling and interpretations on questions of conflicts
of interest and other matters covered by the rules in this subpart are
available to all members and employees.
(b) There shall be designated as Deputy Counselors the Director of
Personnel, the Administrator of each regional office, and the person in
charge of each branch office. The General Counsel or his or her
designee shall provide guidance to the Deputy Counselors for the purpose
of achieving uniform interpretations of this subpart.
(c) A member, employee, or former member or employee may obtain
advice or guidance on the application of the rules in this subpart from
any Deputy Counselor or the General Counsel. In addition, any former
member or employee seeking advice or an interpretation relating to the
Ethics in Government Act shall submit his or her request to the General
Counsel.
(d) The General Counsel and Deputy Counselors will treat information
they receive pursuant to requests for advice or guidance under this Rule
on a confidential basis, except that information they receive indicating
a possible past violation of any provision of this Conduct Regulation or
of the law will be brought to the attention of appropriate persons.
(e) The Director of Personnel shall furnish a copy of this Conduct
Regulation (subpart M) to each member, employee and special Government
employee immediately upon his or her entrance on duty and shall
thereafter, annually, and at such other times as circumstances warrant,
bring to the attention of each member, employee and special Government
employee this Conduct Regulation (subpart M) and all revisions thereof.
(f) The Director of Personnel shall notify each member, employee and
special Government employee at the time of entrance on duty, and from
time to time thereafter, of the availability of counseling services and
of how and where these services are available.
17 CFR 200.735-16 Delegation.
Any official responsibility assigned to a person in a particular
position pursuant to this subpart may be delegated by such person to any
other person.
17 CFR 200.735-17 Administration of the conduct regulation.
Under the general direction of the Executive Director, the Director
of Personnel is responsible for the day-to-day administration of this
conduct regulation except where otherwise provided.
17 CFR 200.735-18 Requests for waivers.
Unless a different procedure is specifically prescribed in a rule of
this part, an employee may submit a request for a waiver, modification
or postponement of a requirement included in this part to the Chairman.
Such waiver, modification or postponement may be granted if it is
determined by the Chairman that such waiver, modification of
postponement would not adversely affect the interest of the Commission
or the United States. Any such waiver, modification or postponement
granted by the Chairman shall be made available to the public. The
Chairman may submit any request made pursuant to this rule to the
Commission for its consideration. Any Commission action on such request
shall be made public only in the discretion of the Commission.
Requirements included in this part which implement any provision of
Federal law, regulation or Executive Order generally applicable to the
Executive Branch shall not be waived under this provision.
17 CFR 200.735-18 Subpart N -- Commission Information Collection
Requirements Under the Paperwork Reduction Act: OMB Control Numbers and
Expiration Dates
Authority: (44 U.S.C. 3507(f); secs. 6, 7, 8, 10, 19(a), 48 Stat.
78, 79, 81, 85; secs. 205, 209, 48 Stat. 906, 908; sec. 301, 54 Stat.
857; sec. 8, 68 Stat. 685; sec. 308(a)(2), 90 Stat. 57; secs. 3(b),
12, 13, 14, 15(d), 23(a), 48 Stat. 882, 892, 894, 895, 901; secs.
203(a), 1, 3, 8, 49 Stat. 704, 1375, 1377, 1379; sec. 202, 68 Stat.
686; secs. 4, 5, 6(d), 78 Stat. 569, 570-574; secs. 1, 2, 3, 82 Stat.
454, 455; secs. 28(c), 1, 2, 3, 4, 5, 84 Stat. 1435, 1497; sec.
105(b), 88 Stat. 1503; secs. 8, 9, 10, 89 Stat. 117, 118, 119; sec.
308(b), 90 Stat 57; sec. 18, 89 Stat. 155; secs. 202, 203, 204, 91
Stat. 1494, 1498-1500; sec. 20(a), 49 Stat. 833; sec. 319, 53 Stat.
1173; sec. 38, 54 Stat. 841; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a),
78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 79t(a), 77sss(a), 80a-37)
17 CFR 200.800 OMB control numbers assigned pursuant to the Paperwork
Reduction Act.
(a) Purpose. This subpart collects and displays the control numbers
and expiration dates assigned to information collection requirements of
the Commission by the Office of Management and Budget pursuant to the
Paperwork Reduction Act of 1980, Pub. L. 96-511. The Commission intends
that this subpart comply with the requirements of section 3507(f) of the
Paperwork Reduction Act, which requires that agencies display a current
control number assigned by the Director of the Office of Management and
Budget (OMB) for each agency information collection requirement. In
particular, this subpart displays current OMB control numbers and
expiration dates of those information collection requirements of the
Commission which are rules and regulations and codified in 17 CFR either
in full text or incorporated by reference with the approval of the
Director of the Office of the Federal Register. Where the information
collection requirement also exists as a separate document, as, for
example, an information collection requirement which the Commission
incorporates by reference in 17 CFR, the Commission, of course, will
display on the separate document as well the current OMB control number
and the expiration date as required by section 3507(f). Henceforth, the
Commission will publish in the Federal Register only additions,
deletions and corrections to particular control numbers and expiration
dates contained in this subpart.
(b) Display.
(47 FR 4982, Feb. 3, 1982, as amended at 47 FR 11401, Mar. 16, 1982;
47 FR 54766, Dec. 6, 1982; 47 FR 56834, Dec. 21, 1982; 48 FR 12347,
Mar. 24, 1983; 48 FR 13160, Mar. 30, 1983; 49 FR 10927, Mar. 23,
1984; 49 FR 16765, Apr. 20, 1984; 51 FR 9769, Mar. 21, 1986; 53 FR
9764, Mar. 25, 1988; 54 FR 13057, Mar. 30, 1989)
17 CFR 200.800 Pt. 201
17 CFR 200.800 PART 201 -- RULES OF PRACTICE
17 CFR 200.800 Subpart A -- Rules of Practice
Sec.
201.1 Scope of rules of practice.
201.2 Appearance and practice before the Commission.
201.3 (Reserved)
201.4 Issuance, amendment and repeal of rules of general application.
201.5 Business hours.
201.6 Notice of proceedings and hearings.
201.7 Answers.
201.8 Settlements, agreements, and conferences.
201.9 Parties and limited participation.
201.10 Consolidation.
201.11 Hearings for the purpose of taking evidence; motions and
applications to hearing officer.
201.11-1 Production of witnesses' statements.
201.12 Interlocutory review; motions and applications to Commission.
201.13 Extension of time and adjournments.
201.14 Evidence.
201.15 Depositions and interrogatories.
201.16 Proposed findings and conclusions; initial decision.
201.17 Review by the Commission of initial decisions by hearing
officers.
201.18 Briefs.
201.19 Special provisions relating to proceedings for suspension of
broker-dealer registrations pending final determination.
201.20 Contents and certification of record.
201.21 Hearings before the Commission.
201.22 Filing; formalities; computation of time.
201.23 Service of pleadings, etc., other than moving papers.
201.24 Incorporation by reference.
201.25 Confidential treatment of certain matters.
201.26 Review by the Commission of determinations at a delegated
level.
201.27 Adjudications under the Securities Exchange Act of 1934 not
required to be determined on the record after notice and opportunity for
hearing.
201.28 Adjudications not required to be determined on the record
after notice and opportunity for hearing.
201.29 Applications by barred individuals for consent to associate
with registered brokers, dealers, municipal securities dealers,
investment advisers or investment companies.
Table I -- Showing Derivation of Revised Rules in Relation to Present
Rules
Table II -- Showing Location in Revised Rules of Provisions of
Present Rules
17 CFR 200.800 Subpart B -- Regulations Pertaining to the Equal Access
to Justice Act
201.31 Purpose of these rules.
201.32 When the Act applies.
201.33 Proceedings covered.
201.34 Eligibility of applicants.
201.35 Standards for awards.
201.36 Allowable fees and expenses.
201.37 Delegations of authority.
201.41 Contents of application.
201.42 Net worth exhibit.
201.43 Documentation of fees and expenses.
201.44 When an application may be filed.
201.51 Filing and service of documents.
201.52 Answer to application.
201.53 Reply.
201.54 Settlement.
201.55 Further proceedings.
201.56 Decision.
201.57 Commission review.
201.58 Judicial review.
201.59 Payment of award.
201.60 Appendix -- Advisory adjudications conducted by the Commission
under 5 U.S.C. 554.
17 CFR 200.800 Subpart C -- Procedures Pertaining to the Payment of
Bounties Pursuant to Subsection 21A(e) of the Securities Exchange Act of
1934
201.61 Scope of subpart.
201.62 Application required.
201.63 Time and place of filing.
201.64 Form of application and information required.
201.65 Identity and signature.
201.66 Notice to applicants.
201.67 Applications by legal guardians.
201.68 No promises of payment.
Authority: 15 U.S.C. 77s, 78w, 79t, 77sss, 80a-37, 80b-11, unless
otherwise noted.
Section 201.6 is also issued under 15 U.S.C. 77h, 77ttt, 78d-1, 78v,
79s, 80a-40, 80b-12.
Section 201.23(e) is also issued under 28 U.S.C. 2112(a).
Section 201.24 is also issued under 15 U.S.C. 77f, 77g, 77h, 77j,
78c(d), 78l, 78m, 78n, 78o(d).
17 CFR 200.800 Subpart A -- Rules of Practice
17 CFR 201.1 Scope of rules of practice.
These rules of practice are generally applicable to proceedings
before the Commission under the statutes which it administers,
particularly those which involve a hearing or opportunity for hearing
before the Commission or its duly designated officer. Rule 201.27
applies to cases pursuant to the Securities Exchange Act of 1934 of
adjudication not required to be determined on the record after notice
and opportunity for hearing. In connection with any particular matter,
reference should also be made to any special requirements of procedure
and practice that may be contained in the particular statute involved or
the rules and forms adopted by the Commission thereunder, which special
requirements are controlling. These rules do not apply to
investigations, except where made specifically applicable by the Rules
Relating to Investigations (Part 203 of this chapter).
(40 FR 42186, Sept. 11, 1975)
17 CFR 201.2 Appearance and practice before the Commission. 1038
(a) By non-lawyers. An individual may appear in his own behalf, a
member of a partnership may represent the partnership, a bona fide
officer of a corporation, trust or association may represent the
corporation, trust or association, and an officer or employee of a State
commission or of a department or political subdivision of a State may
represent the State commission or the department or political
subdivision of the State, in any proceeding.
(b) By lawyers. A person may be represented in any proceeding by an
attorney at law admitted to practice before the Supreme Court of the
United States, or the highest court of any State or Territory of the
United States, or the Court of Appeals or the District Court of the
United States for the District of Columbia.
(c) Representation only as specified. A person shall not be
represented at any hearing before the Commission or a hearing officer
except as stated in paragraphs (a) and (b) of this section or except as
otherwise permitted by the Commission.
(d) Notice of appearance; designation for service; power of
attorney. When an individual appears in his own behalf before the
Commission or a hearing officer in a particular proceeding which
involves a hearing or an opportunity for hearing, he shall file with the
Commission or otherwise state on the record an address at which any
notice or other written communication required to be served upon him or
furnished to him may be sent. When an attorney appears before the
Commission or a hearing officer in a representative capacity in a
particular proceeding which involves a hearing or an opportunity for
hearing, he shall file with the Commission a written notice of such
appearance, which shall state his name, address and telephone number and
the name and address of the person or persons on whose behalf he
appears. Any additional notice or other written communication required
to be served or furnished to the client may be sent to the attorney at
the attorney's stated address. Any person appearing or practicing
before the Commission in a representative capacity may be required to
file a power of attorney with the Commission showing his authority to
act in such capacity.
(e) Suspension and disbarment. (1) The Commission may deny,
temporarily or permanently, the privilege of appearing or practicing
before it in any way to any person who is found by the Commission after
notice of and opportunity for hearing in the matter (i) not to possess
the requisite qualifications to represent others, or (ii) to be lacking
in character or integrity or to have engaged in unethical or improper
professional conduct, or (iii) to have willfully violated, or willfully
aided and abetted the violation of any provision of the Federal
securities laws (15 U.S.C. 77a to 80b-20), or the rules and regulations
thereunder.
(2) Any attorney who has been suspended or disbarred by a Court of
the United States or in any State, Territory, District, Commonwealth, or
Possession, or any person whose license to practice as an accountant,
engineer or other expert has been revoked or suspended in any State,
Territory, District, Commonwealth, or Possession, or any person who has
been convicted of a felony, or of a misdemeanor involving moral
turpitude, shall be forthwith suspended from appearing or practicing
before the Commission. A disbarment, suspension, revocation or
conviction within the meaning of this paragraph (e)(2) shall be deemed
to have occurred when the disbarring, suspending, revoking or convicting
agency or tribunal enters its judgment or order, regardless of whether
appeal is pending or could be taken, and includes a judgment or order on
a plea of nolo contendere.
(3)(i) The Commission, with due regard to the public interest and
without preliminary hearing, may by order temporarily suspend from
appearing or practicing before it any attorney, accountant, engineer, or
other professional or expert who, on or after July 1, 1971, has been by
name:
(a) Permanently enjoined by any court of competent jurisdiction by
reason of his misconduct in an action brought by the Commission from
violation or aiding and abetting the violation of any provision of the
Federal securities laws (15 U.S.C. 77a to 80b-20) or of the rules and
regulations thereunder; or
(b) Found by any court of competent jurisdiction in an action brought
by the Commission to which he is a party or found by this Commission in
any administrative proceeding to which he is a party to have violated or
aided and abetted the violation of any provision of the Federal
securities laws (15 U.S.C. 77a to 80b-20) or the rules and regulations
thereunder (unless the violation was found not to have been willful).
An order of temporary suspension shall become effective when served
by certified or registered mail directed to the last known business or
residence address of the person involved. No order of temporary
suspension shall be entered by the Commission pursuant to this paragraph
(e)(3)(i) more than three months after the final judgment or order
entered in a judicial or administrative proceeding described in (a) or
(b) of this paragraph (e)(3)(i) has become effective upon completion of
review or appeal procedures or because further review or appeal
procedures are no longer available.
(ii) Any person temporarily suspended from appearing and practicing
before the Commission in accordance with paragraph (e)(3)(i) may, within
thirty days after service upon him of the order of temporary suspension,
petition the Commission to lift the temporary suspension. If no
petition has been received by the Commission within 30 days after
service of the order by mail the suspension shall become permanent.
(iii) Within 30 days after the filing of a petition in accordance
with paragraph (e)(3)(i), the Commission shall either lift the temporary
suspension or set the matter down for hearing at a time and place to be
designated by the Commission or both, and after opportunity for hearing,
may censure the petitioner or may disqualify the petitioner from
appearing or practicing before the Commission for a period of time or
permanently. In every case in which the temporary suspension has not
been lifted, every hearing held and other action taken pursuant to this
paragraph (e)(3) shall be expedited in every way consistent with the
Commission's other responsibilities.
(iv) In any hearing held on a petition filed in accordance with
paragraph (e)(3)(ii), the staff of the Commission shall show either that
the petitioner has been enjoined as described in paragraph (e)(3)(i)(a)
of this section or that the petitioner has been found to have committed
or aided and abetted violations as described in (e)(3)(i)(b) of this
section and that showing, without more, may be the basis for censure or
disqualification; that showing having been made, the burden shall be
upon the petitioner to show cause why he should not be censured or
temporarily or permanently disqualified from appearing and practicing
before the Commission. In any such hearing the petitioner shall not be
heard to contest any findings made against him or facts admitted by him
in the judicial or administrative proceeding upon which the proceeding
under this paragraph (e)(3) is predicated, as provided in paragraph
(e)(3)(i) of this section. A person who has consented to the entry of a
permanent injunction as described in paragraph (e)(3)(i)(a) without
admitting the facts set forth in the complaint shall be presumed for all
purposes under this paragraph (e)(3) to have been enjoined by reason of
the misconduct alleged in the complaint.
(4)(i) An application for reinstatement of a person permanently
suspended or disqualified under paragraph (e) (1) or (3) of this section
may be made at any time, and the applicant may, in the Commission's
discretion, be afforded a hearing; however, the suspension or
disqualification shall continue unless and until the applicant has been
reinstated by the Commission for good cause shown.
(ii) Any person suspended under paragraph (e)(2) shall be reinstated
by the Commission, upon appropriate application, if all the grounds for
application of the provisions of that subparagraph are subsequently
removed by a reversal of the conviction or termination of the
suspension, disbarment or revocation. An application for reinstatement
on any other grounds by any person suspended under paragraph (e)(2) may
be filed at any time and the applicant shall be accorded an opportunity
for a hearing in the matter; however, such suspension shall continue
unless and until the applicant has been reinstated by order of the
Commission for good cause shown.
(5) Any person appearing or practicing before the Commission who has
been the subject of an order, judgment, decree, or finding as set forth
above shall promptly file with the Secretary of the Commission a copy
thereof (together with any related opinion or statement of the agency or
tribunal involved). Failure to file any such paper shall not impair the
operation of any other provision of this paragraph (e).
(6) Any proceeding brought under any of the above subparagraphs shall
not preclude a proceeding under any other subparagraph.
(7) All hearings held under this paragraph (e) shall be public unless
the Commission, at any time, on its own motion or after considering the
request of a party, otherwise directs.
(f) Contemptuous conduct. Contemptuous conduct at any hearing before
the Commission or a hearing officer shall be ground for exclusion from
said hearing and for summary suspension without a hearing for the
duration of the hearing.
(g) Practice defined. For the purposes of this rule, practicing
before the Commission shall include, but shall not be limited to (1)
transacting any business with the Commission; and (2) the preparation
of any statement, opinion or other paper by any attorney, accountant,
engineer or other expert, filed with the Commission in any registration
statement, notification, application, report or other document with the
consent of such attorney, accountant, engineer or other expert.
(h) Service on attorneys. In any proceeding where an attorney has
filed an appearance pursuant to paragraph (d) of this section, any
notice or other written communication required to be served upon or
furnished to the client should also be served upon or furnished to the
attorney (or one of such attorneys if the client is represented by more
than one attorney) in the same manner as prescribed for his client,
regardless of whether such communication is furnished directly to the
client.
(25 FR 6728, July 15, 1960, as amended at 29 FR 4966, Apr. 9, 1964;
31 FR 5688, Apr. 13, 1966; 36 FR 8933, May 15, 1971; 53 FR 26434, July
13, 1988)
201.3 (Reserved)
0381Additional restrictions upon practice by former employees of the
Commission are contained in Rule 6 of the Commission's Conduct
Regulation ( 200.735-8 of this chapter).
17 CFR 201.4 Issuance, amendment and repeal of rules of general
application.
(a) By petition. Any person desiring the issuance, amendment or
repeal of a rule of general application may file a petition therefor
with the Secretary of the Commission. Such petition shall include a
statement setting forth the text or the substance of any proposed rule
or amendment desired or specifying the rule the repeal of which is
desired and stating the nature of his interest and his reasons for
seeking the issuance, amendment or repeal of the rule. The Secretary
shall acknowledge receipt of the petition and refer it to the
appropriate Division or Office for consideration and recommendation.
Such recommendations are transmitted with the petition to the Commission
for such action as the Commission deems appropriate. The Secretary
shall notify the petitioner of the action taken by the Commission.
(b) Notice of proposed issuance, amendment or repeal of rules.
Except where the Commission finds that notice and public procedure are
impracticable, unnecessary, or contrary to the public interest, whenever
the Commission proposes to issue, amend, or repeal any rule or
regulation of general application other than an interpretative rule,
general statement of policy, or a rule of agency organization,
procedure, or practice, or any matter relating to agency management or
personnel or to public property, loans, grants, benefits, or contracts,
there shall first be published in the Federal Register a notice of the
proposed action. Such notice shall include (1) a statement of the time,
place, and nature of the rulemaking proceeding, with particular
reference to the manner in which interested persons shall be afforded
the opportunity to participate in such proceedings; (2) reference to
the authority under which the rule is proposed; and (3) the terms or
substance of the proposed rule or a description of the subjects and
issues involved.
(25 FR 6729, July 15, 1960, as amended at 43 FR 38575, Aug. 29, 1978)
17 CFR 201.5 Business hours.
The principal office of the Commission, at 450 Fifth Street, NW.,
Washington, DC 20549, is open each day, except Saturdays, Sundays, and
legal holidays, from 9 a.m. to 5:30 p.m., eastern standard time or
eastern daylight saving time, whichever is currently in effect in
Washington. Legal holidays consist of New Year's Day, Washington's
Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day,
Veterans Day, Thanksgiving Day, Christmas Day, and any other day
appointed as a holiday in the District of Columbia by the President or
the Congress of the United States.
(47 FR 26819, June 22, 1982)
17 CFR 201.6 Notice of proceedings and hearings.
(a) Notice of proceedings; order for proceedings. Whenever an order
for proceeding is issued by the Commission, appropriate notice thereof
shall be given by the Secretary or other duly designated officer of the
Commission to each party to the proceeding and any other person entitled
to notice or to the person designated by any such party or person as
being authorized to receive on his behalf notices issued by the
Commission. The parties or persons entitled to notice shall be timely
informed of the time, place and nature of any hearing and the legal
authority and jurisdiction under which the hearing is to be held, and
furnished a short and simple statement of the matters of fact and law to
be considered and determined. In proceedings in which an answer is
directed pursuant to 201.7, the order for proceeding shall set forth
the action proposed and the factual and legal basis alleged therefor in
such detail as will permit a specific response thereto.
(b) Notice of hearing; service of notice. The time and place for
any hearing in a proceeding shall be fixed with due regard for the
public interest and the convenience and necessity of the parties, the
participants or their representatives. It is the policy of the
Commission that in a proceeding under any provision of the Public
Utility Holding Company Act of 1935, the Investment Company Act of 1940
(except section 9(b) thereof), section 206A of the Investment Advisers
Act of 1940, section 8 of the Securities Act of 1933, or sections 305 or
307 of the Trust Indenture Act of 1939, the hearing should normally be
held in Washington, DC Each party or person entitled to notice shall be
given notice of hearing a reasonable time in advance of the hearing, and
such notice may be given by personal service, by confirmed telegraphic
notice or, in any proceedings other than those pursuant to section 8 of
the Securities Act of 1933 or section 305 or 307 of the Trust Indenture
Act of 1939, by registered mail or certified mail, addressed to his last
known business or residence address or to the address of his agent for
service.
(c) Publication of notice of hearing. Unless otherwise ordered by
the Commission, notice of any public hearing shall be given general
circulation by release to the public press and, where ordered, by
publication in the Federal Register.
(d) Amendment of order for proceedings. In any proceeding,
applications or motions for amendments to the matters of fact and law to
be considered may be granted, for cause shown, by the hearing officer at
any time after the commencement of the hearing and prior to the filing
of an initial decision therein, or, if no initial decision is to be
filed, prior to the time fixed for the filing of final briefs with the
Commission, or by the Commission at any time.
(e) Effect of failure to appear. If any person who is named in an
order for proceeding as a person against whom findings may be made or
sanctions imposed in the proceeding does not file a notice of appearance
in the proceeding within 15 days after service upon him of the order for
proceeding (unless a different period is specified in the order), or if
he fails to appear at a hearing of which he has been duly notified, such
person shall be deemed in default and the proceeding may be determined
against him upon consideration of the order for proceeding, the
allegations of which may be deemed to be true. For the purpose of this
paragraph an answer shall constitute a notice of appearance.
(f) Persons entitled to notice. Any notice of a proceeding relating
to the issuance of a stop order suspending the effectiveness of a
registration statement pursuant to section 8(d) of the Securities Act of
1933 (15 U.S.C. 77a et seq., as amended by Pub. L. 94-29 (June 4,
1975)), shall be given to each person specified in section 8(f) of that
act. In addition, if such proceeding is commenced within 90 days after
the registration statement became effective, notice of the proceeding
shall be given to the agent for service named on the facing sheet of the
registration statement and to each other person designated on the facing
sheet of the registration statement as a person to whom copies of
communications to such agent are to be sent.
(Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 77u, 78d-1, 78d-2; secs.
8, 19, 48 Stat. 79, 85; sec. 209, 48 Stat. 908; sec. 301, 54 Stat.
857; sec. 308(a)(2), 90 Stat. 57; 15 U.S.C. 77h, 77s; 15 U.S.C. 77u,
77ttt, 78v, 79s, 80a-40, 80b-12)
(25 FR 6729, July 15, 1960, as amended at 29 FR 9487, July 11, 1964;
33 FR 17683, Nov. 27, 1968; 37 FR 23828, Nov. 9, 1972; 43 FR 28999,
July 5, 1978; 43 FR 52217, Nov. 9, 1978; 52 FR 25208, July 6, 1987)
17 CFR 201.7 Answers.
(a) When required. In any order for proceeding issued by the
Commission, the Commission may direct that any party respondent shall
file an answer to the allegations contained in the order for proceeding,
and any party in any proceeding may file an answer.
(b) Time to file answer. Except where a different period is provided
by rule or by order, a party respondent directed to file an answer as
provided in paragraph (a) of this section shall do so within 15 days
after service upon him of the order for proceeding. Any other person
admitted to such a proceeding (except a person becoming a party under
201.9(a)) may be required to file an answer within such time as is
directed by the hearing officer or the Commission. Where amendments to
the matters of fact and law to be considered in such proceeding are
authorized subsequent to the institution of the proceeding, the parties
may be required to answer within a reasonable time the matters of fact
and law to be considered as amended.
(c) Requirements of answer; effect of failure to deny. Unless
otherwise directed by the Commission, an answer required by this section
shall specifically admit, deny, or state that the party does not have
and is unable to obtain sufficient information to admit or deny, each
allegation in the order for proceeding. A statement of a lack of
information shall have the effect of a denial. Any allegation not
denied shall be deemed to be admitted. When a party intends in good
faith to deny only a part or a qualification of an allegation, he shall
specify so much of it as is true and shall deny only the remainder.
(d) Motion for more definite statement. A party may file, with an
answer required by this section, a motion for a more definite statement
of specified matters of fact or law to be considered or determined.
Such motion shall state the respects in which, and the reasons why, each
such matter of fact or law should be required to be made more definite.
If the motion is granted, the order granting such motion will set the
periods in which such statement, and any answer thereto, shall be filed.
(e) Effect of failure to file answer. If a party fails to file an
answer required by this rule within the time provided, such person shall
be deemed in default and the proceeding may be determined against him by
the Commission upon consideration of the order for proceeding, the
allegations of which may be deemed to be true.
(f) Signature on answer; requirement and effect. Every answer filed
pursuant to this section shall be signed by the party filing it or by at
least one attorney, in his individual name, who represents such party.
The signature constitutes a certificate by the signer that he has read
the answer; that to the best of his knowledge, information and belief
there is good ground to support it; and that it is not interposed for
delay.
(Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 78d-1, 78d-2)
(25 FR 6730, July 15, 1960, as amended at 29 FR 9487, July 11, 1964)
17 CFR 201.8 Settlements, agreements, and conferences.
(a) Offers of settlement. (1) Parties may propose in writing offers
of settlement which shall be submitted to and considered by the
interested division of the Commission where time, the nature of the
proceeding, and the public interest permit. Such offers may be made at
any time during the course of the proceeding; and
(2) Upon the agreement and request of the interested parties, the
hearing officer may express his views regarding the appropriateness of
any offer of settlement, with the understanding that the request by the
parties constitutes a waiver of any right to claim prejudgment by the
hearing officer based on the views the hearing officer expresses, and
the hearing officer in any event in his discretion may decline to
express any view on the offer;
(3) The interested division shall present an offer of settlement to
the Commission with its recommendation, except that where the division's
recommendation is unfavorable, the offer shall not be presented to the
Commission by the division unless the party making the offer so
requests. Where the Commission deems it appropriate, it may also give
the party making the offer an opportunity to make an oral presentation
to the Commission. Where the Commission rejects an offer of settlement,
the party making the offer shall be notified of the Commission's action
and the offer of settlement shall be deemed withdrawn and such offer and
any documents relating thereto shall not constitute a part of the
record. Final acceptance by the Commission of any offer of settlement
will be only by its Findings and Opinion issued in the proceedings.
(b) Specification of procedures. In any proceeding the moving party
shall, in the moving papers or the notice of hearing if that is
practicable, or, if not, as early as practicable in the course of the
hearing, specify the procedures considered necessary or appropriate in
the proceeding with particular reference to (1) whether there should be
an initial decision by a hearing officer, (2) whether the interested
division of the Commission may assist in the preparation of the
Commission's decision, and (3) whether there should be a 30-day waiting
period between the issuance of the Commission's order and the date it is
to become effective. Any other party may object promptly or within such
time as shall be designated by the hearing officer, having due regard to
the circumstances of the case and to the procedure so specified, and
such party may specify such additional procedure as he considers
necessary or appropriate; in the absence of such objection or
specification of additional procedure, such party may be deemed to have
waived objection to the specified procedure and to the omission of any
procedure not specified, unless the Commission, for good cause shown and
upon taking into account any resulting prejudice to other parties,
determines the contrary.
(c) Agreement on procedure. Any proposal as to the procedural
matters enumerated in paragraph (b) of this section which is agreed upon
by all parties present and which is not contrary to any specific
provision of this part, shall, subject to the approval of the hearing
officer, be embodied in an appropriate stipulation, which shall become
part of the record, and shall determine the procedure in that respect,
except that the Commission may order that the hearing officer prepare an
initial decision notwithstanding any waiver by the parties.
(d) Conferences and prehearing memoranda. At the opening of a
hearing or at any other time during the course of any proceeding, to the
extent practicable, where time, the nature of the proceeding, and the
public interest permit, the hearing officer shall, at the request of any
party or upon his own motion, hold or order conferences for the purpose
of clarifying and simplifying issues and otherwise facilitating or
expediting the proceeding. At the conference or otherwise, the hearing
officer, at the request of any party or upon his own motion, where he
believes such action would tend to expedite the proceedings or promote
fairness, may in his discretion and with due regard for the convenience
and necessity of the parties or their attorneys, order a party,
including the interested division, to furnish where practicable any or
all of the following: An outline of its case or defense; the legal
theories upon which it will rely; the identity of the witnesses who
will testify on its behalf; and copies of or a list of documents which
it intends to introduce at the hearing. The hearing officer shall not
order any of the foregoing procedures that a party including the
division can show is inappropriate under all the circumstances. At the
conference, the parties shall where practical and reasonable consider
such matters as (1) the possibility of obtaining stipulations and
admissions of facts and of authenticity and contents of documents which
will avoid unnecessary proof; (2) expedition in the presentation of
evidence; (3) the exchange of copies of proposed exhibits; (4)
settlement of the issues; and (5) such other matters as will promote a
fair and expeditious hearing or aid in the disposition of the
proceeding. Where such conference is held without the presence of the
hearing officer, the hearing officer shall be advised promptly by the
parties of the agreements reached. At or following the conclusion of a
conference the hearing officer shall enter a ruling or order which
recites the agreements reached and any procedural determinations made by
the hearing officer, which may include any procedural ruling he is
authorized to make during the course of a proceeding.
(Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 77u, 78d-1, 78d-2)
(25 FR 6730, July 15, 1960, as amended at 29 FR 9487, July 11, 1964;
31 FR 10573, Aug. 6, 1966; 37 FR 23828, Nov. 9, 1972)
17 CFR 201.9 Parties and limited participation.
(a) Who may become parties; interested division a party. Any
interested representative, agency, authority or instrumentality of the
United States or any interested State, State commission, municipality or
other political subdivision of a State shall become a party to any
proceeding upon the filing of a written notice of appearance therein.
The interested division of the Commission shall be deemed a party to all
proceedings.
(b) Parties in broker-dealer proceedings. (1) In proceedings under
sections 15(b), 15A(1)(2) or 19(a)(3) of the Securities Exchange Act of
1934, any person associated with a member of a national securities
association, a member of a national securities exchange, a broker or a
dealer, whose interests may be affected by the proceedings, shall be
entitled to participate as a party. If he participates generally in the
proceedings or files a notice of appearance, he shall be deemed a party
of record and will be given notices of intermediate developments in the
proceedings. In any event he may inform himself of such developments by
attendance at the hearings or examination of the record (whether the
proceedings be public or private) or by arrangement with a party of
record so that he can determine whether he desires to be heard at any
time. The term person associated as used in this section shall mean a
person associated with a member, broker or dealer in any of the
capacities specified in sections 15(b) and 15A(b)(4) of the Securities
Exchange Act of 1934.
(2) Unless the Commission otherwise directs, paragraph (b)(1) of this
section shall apply only to proceedings instituted prior to August 20,
1964. The term person associated referred to therein shall mean a
person associated with a member, broker or dealer in any of the
capacities specified in sections 15(b) and 15A(b)(4) of the Securities
Exchange Act of 1934 as in effect prior to August 20, 1964.
(c) Limited participation; leave to be heard. Any person may, at
the discretion of the hearing officer, be given leave to be heard in any
proceeding as to any matter affecting his interests. Requests for leave
to be heard shall be in writing, shall set forth the nature and extent
of the applicant's interest in the proceeding, and, except where good
cause for late filing is shown, shall be filed not later than 2 days
prior to the date fixed for the commencement of the hearing, or where a
respondent is required to answer, requests for leave to be heard shall
be filed within the time provided for the filing of the answer. The
hearing officer or the Commission may direct any person requesting leave
to be heard to submit himself to examination as to his interest in the
proceeding.
(d) Rights of participant. Leave to be heard pursuant to paragraph
(c) of this section may include such rights of a party as the hearing
officer may deem appropriate, except that oral argument before the
Commission may be permitted only by the Commission upon written request
therefor. Persons granted leave to be heard shall be bound, except as
may be otherwise determined by the hearing officer, by any stipulation
between the parties to the proceeding with respect to procedure,
including submission of evidence, substitution of exhibits, corrections
of the record, the time within which briefs or exceptions may be filed
or proposed findings and conclusions may be submitted, the filing of
initial decisions, the procedure to be followed in the preparation of
decisions, and the effective date of the Commission's order in the case.
Where the filing of briefs or exceptions or the submission of proposed
findings and conclusions are waived by the parties to the proceedings, a
person granted leave to be heard pursuant to paragraph (c) of this
section shall not be permitted to file a brief or exceptions or submit
proposed findings and conclusions except by leave of the Commission or
of the hearing officer, if the hearing is pending before the hearing
officer. Except as may otherwise be specifically directed by the
hearing officer at the request of any person granted leave to be heard,
such person shall be expected to inform himself by attendance at public
hearings and by examination of the public files of the Commission as to
the various steps taken in the proceeding including continuances, the
filing of amendments, answers, motions, or briefs by parties to the
proceeding, or the fixing of time for any such action, and such person
shall not be entitled as of right to other notice thereof, or to service
of copies of documents.
(e) When intervention as party granted. Except as provided in
paragraphs (a) and (b) of this section, no person shall be admitted as a
party to a proceeding by intervention unless the Commission is satisfied
on the basis of the written application of such person (and any evidence
taken in connection therewith) that his participation as a party will be
in the public interest, and that leave to be heard pursuant to
paragraphs (c) and (d) of this section would be inadequate for the
protection of his interests.
(f) Permission to state views. Any person who has not complied with
the requirements of paragraph (c) of this section may, in the discretion
of the hearing officer, be permitted to file a memorandum or make an
oral statement of his views, and the hearing officer may accept for the
record written communications received from any such person. Unless
offered and admitted as evidence of the truth of the statements therein
made, the memoranda and oral or written communications submitted
pursuant to the provisions of this paragraph will be considered only to
the extent that the statements therein made are otherwise supported by
the record.
(g) Certain persons entitled to leave to be heard. The hearing
officer is directed to grant leave to be heard under paragraph (c) or
(f) of this section, whichever may be applicable, to any person to whom
it is proposed to issue any security in exchange for one or more bona
fide outstanding securities, claims or property interests, or partly in
such exchange and partly for cash, where the Commission is authorized to
approve the terms and conditions of such issuance and exchange after a
hearing upon the fairness of such terms and conditions.
(h) Review by Commission; modification of participation provisions.
Any ruling of the hearing officer as to matters within the scope of this
section is subject to review by the Commission at the close of the
proceeding, or at the Commission's discretion, in the course of the
proceeding. The Commission may by order in any case, modify the
provisions of this section which would otherwise be applicable, and may
impose such terms and conditions on the participation of any person in
any proceeding as it may deem necessary or appropriate in the public
interest.
(Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 78d-1, 78d-2)
(25 FR 6730, July 15, 1960, as amended at 29 FR 9487, July 11, 1964;
29 FR 13422, Sept. 29, 1964)
17 CFR 201.10 Consolidation.
By order of the Commission, proceedings involving a common question
of law or fact may be joined for hearing of any or all the matters in
issue in such proceedings and such proceedings may be consolidated; and
the Commission may make such orders concerning the conduct of such
proceedings as may tend to avoid unnecessary costs or delay.
(25 FR 6731, July 15, 1960)
17 CFR 201.11 Hearings for the purpose of taking evidence; motions and
applications to hearing officer.
(a) When held. Hearings for the purpose of taking evidence shall be
held as ordered by the Commission.
(b) Presiding officers; public hearings. All such hearings shall be
held before the Commission or a hearing officer, who shall be an
administrative law judge or other officer duly designated by the
Commission or shall be one or more members of the Commission. The
hearings shall be conducted in an impartial and orderly manner. All
such hearings, except hearings on applications for confidential
treatment filed pursuant to the provisions of Clause 30 of Schedule A of
the Securities Act of 1933, section 24(b) of the Securities Exchange Act
of 1934, section 22(b) of the Public Utility Holding Company Act of
1935, section 45(a) of the Investment Company Act of 1940, section
210(a) of the Investment Advisers Act of 1940, or the rules and
regulations promulgated under such sections, shall be public unless
otherwise ordered by the Commission. No hearing shall be private where
all respondents request that the hearing be made public.
(c) Disqualification of hearing officer. In any hearing for the
purpose of taking evidence a hearing officer may withdraw from a case
when he deems himself disqualified. In such event he shall immediately
notify the Commission of his withdrawal and inform it of his reasons for
such action. Any party or any person who has been granted leave to be
heard pursuant to 201.9 may in good faith request a hearing officer to
withdraw on the grounds of personal bias or other disqualification. The
person seeking disqualification shall file with the hearing officer a
timely affidavit setting forth in detail the facts alleged to constitute
grounds for disqualification, and the hearing officer may file a
response thereto. If the hearing officer believes himself not
disqualified, he shall so rule and proceed with the hearing. If the
person seeking disqualification excepts from the ruling of the hearing
officer, the hearing officer shall certify the question together with
the affidavit and any response filed in connection with it, to the
Commission. The Commission may rule on the question without hearing or
it may require testimony or argument on the issues raised. The
affidavit and response, any testimony taken, and the decision thereon
shall be part of the record in the case.
(d) Functions of hearing officer. The hearing officer shall regulate
the course of the hearing and shall perform the functions specified in
paragraph (e) of this section. Upon notice to all parties, the hearing
officer may reopen any hearing prior to the filing of an initial
decision therein, or, if no initial decision is to be filed, prior to
the time fixed for the filing of final briefs with the Commission. The
hearing officer may in his discretion where practicable order the
division in a proceeding involving more than one respondent to indicate
on the record at least 1 day prior to the presentation of any evidence,
each respondent against whom that evidence will be offered.
(e) Rulings by hearing officer; exceptions. Except as otherwise
directed by the Commission, or where these rules specifically provide
otherwise, all applications, motions and objections made during a
proceeding prior to the filing of an initial decision therein, or, if no
initial decision is to be filed, prior to the time fixed for the filing
of final briefs with the Commission, shall be made to or referred to and
decided by the hearing officer, except that an application or motion
which requires a ruling which would dispose of the proceeding in whole
or in part shall be made to the hearing officer after the conclusion of
the division's case or after the conclusion of the hearing. Except
where the hearing officer prescribes or permits a different procedure,
any application or motion shall be in writing and shall be accompanied
by a written brief of the points and authorities relied upon in support
of the same and any party may file an answer within five days after
service upon him of such motion or application as provided in 201.23.
Objections to the admission or exclusion of evidence must be made on the
record and shall be in short form, stating the grounds of objections
relied upon, and the transcript shall not include argument or debate
thereon except as ordered by the hearing officer. Rulings by the
hearing officer on all applications, motions and objections shall be
part of the record. Exceptions to any ruling thereon by the hearing
officer need not be noted at the time of the ruling in order to be urged
before the Commission. Such exceptions will be deemed waived however,
unless raised (1) in accordance with 201.12(a), (2) in the manner of a
proposed finding in accordance with 201.16(d), or (3) in a petition for
Commission review of an initial decision in accordance with 201.17.
(f) Transcript of hearings. Hearings for the purpose of taking
evidence shall be stenographically reported, and a transcript thereof
shall be made.
(Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 77u, 78d-1, 78d-2)
(25 FR 6731, July 15, 1960, as amended at 29 FR 3567, Mar. 20, 1964;
29 FR 9488, July 11, 1964; 37 FR 23828, Nov. 9, 1972)
17 CFR 201.11-1 Production of witnesses' statements.
After a witness called by the attorney for the interested Division of
the Commission has given direct testimony in a hearing, any other party
may request and obtain the production of any statement, or part thereof,
of such witness, pertaining to his direct testimony, in the possession
of the Division, subject, however, to the limitations applicable to the
production of witnesses' statements under the Jencks Act, 18 U.S.C.
3500.
(31 FR 10573, Aug. 6, 1966)
17 CFR 201.12 Interlocutory review; motions and applications to
Commission.
(a) Review of hearing officer's rulings. The Commission will not
review a ruling of the hearing officer prior to its consideration of the
entire proceeding in the absence of extraordinary circumstances. Except
as provided in 201.11(c), a hearing officer shall not certify a ruling
for interlocutory review by the Commission unless a party so requests
and (1) the hearing officer finds, either on the record or in writing,
that in his opinion a subsequent reversal of his ruling would cause
unusual delay or expense, taking into consideration the probability of
such reversal, or (2) his ruling would compel testimony of Commission
members, officers or employees or the production of documentary evidence
in their custody. The certification by the hearing officer shall be in
writing and shall specify the material relevant to the ruling involved.
The Commission may decline to consider the ruling certified, if it
determines that interlocutory review is not warranted or appropriate
under the circumstances. If the hearing officer does not certify a
matter, a party who had requested certification may apply to the
Commission for review, or the Commission on its own motion may direct
that any matter be submitted to it for review. An application for
review shall be in writing and shall briefly state the grounds relied
on. Review will not be granted unless the Commission concludes that the
hearing officer erred in failing to certify the matter. Unless
otherwise ordered by the hearing officer, the hearing before the hearing
officer shall continue whether or not such certification or application
is made. Failure to request certification or to make such application
will not waive the right to seek review of the ruling of the hearing
officer after the close of the hearing pursuant to 201.16(d) and
201.17. The Commission will prescribe the procedure for each application
hereunder and paragraph (c) of this section shall not apply.
(b) Motions to Commission. All motions and applications not required
to be made to the hearing officer pursuant to 201.11 shall be made to
and ruled upon by the Commission.
(c) Filing of motions to Commission; briefs; stays. Motions or
applications calling for determination by the Commission shall be filed
with the Secretary or other duly authorized officer of the Commission in
writing provided that motions or applications calling for determination
by the Commission but made in the course of a hearing may be filed, in
writing, with the hearing officer, who shall refer such motion or
application to the Commission. Any such motion or application shall be
accompanied by a written brief of the points and authorities relied upon
in support of the same. Any party may file an answering brief within
five days after service upon him of such motion or other application as
provided in 201.23 unless otherwise directed by the Commission.
Motions and applications will be considered on the briefs filed
following the time for filing the answering brief, unless otherwise
directed by the Commission. No oral argument will be heard on such
matters unless the Commission so directs. Unless otherwise ordered by
the Commission or the hearing officer, the hearing shall continue
pending the determination of the motion or application by the
Commission. Where a stay of effectiveness of an order of the Commission
is sought, application therefor shall be made prior to the filing of a
petition to review or, in connection with a petition pursuant to section
15A(b)(4) of the Securities Exchange Act of 1934, at any time when a
petition for review of the disqualifying order of the Commission is not
pending.
(d) Motions to set aside defaults. In order to prevent injustice and
on such conditions as may be appropriate, the hearing officer at any
time prior to the filing of his initial decision or the Commission at
any time, may for good cause, set aside a default under 201.6(e) or
201.7(e). Any motion to set aside a default shall be made within a
reasonable time, and shall state the reasons for the failure to file or
appear and specify the nature of the proposed defense in the
proceedings.
(Sec. 15A(b)(4), 52 Stat. 1070, secs. 1, 2, 76 Stat. 394, 395; 15
U.S.C. 78o-3, 78d-1, 78d-2)
(25 FR 6731, July 15, 1960, as amended at 27 FR 2399, Mar. 14, 1962;
28 FR 4350, May 2, 1963; 29 FR 3567, Mar. 20, 1964; 29 FR 9488, July
11, 1964)
17 CFR 201.13 Extension of time and adjournments.
(a) Commission or hearing officer may extend, postpone or adjourn.
Except as otherwise provided by law, the Commission at any time, or the
hearing officer at any time prior to the filing of his initial decision
or, if no initial decision is to be filed, at any time prior to the
closing of the record, for cause shown, may extend or shorten any time
limits prescribed by these rules for filing any papers and may postpone
or adjourn any hearing.
(b) Limitations on postponements and adjournments. A hearing before
a hearing officer shall begin at the time and place ordered by the
Commission, provided that, within the limits provided by statute, the
hearing officer may for good cause postpone the commencement of the
hearing for a reasonable period of time or change the place of hearing.
Any convened hearing may be adjourned to such time and place as may be
ordered by the Commission or by the hearing officer. It is the policy
of the Commission that such postponements or adjournments should
normally not exceed 30 days. If the hearing officer orders a
postponement or an adjournment for a period exceeding 30 days, the
reasons for so doing shall be stated in his order.
(Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 77u, 78d-1, 78d-2)
(29 FR 9488, July 11, 1964, as amended at 37 FR 23829, Nov. 9, 1972)
17 CFR 201.14 Evidence.
(a) Presentation and admission of evidence. All witnesses at a
hearing for the purpose of taking evidence shall testify under oath or
affirmation, which shall be administered by the hearing officer. Every
party shall have the right to present such oral or documentary evidence
and to conduct such cross-examination as may be required for a full and
true disclosure of the facts. The hearing officer shall receive
relevant and material evidence, rule upon offers of proof and exclude
all irrelevant, immaterial or unduly repetitious evidence.
(b) Subpoenas; motions to quash or modify; service -- (1) Issuance
of subpoenas ad testificandum and subpoenas duces tecum. The hearing
officer, or in the event he is unavailable, any member of the
Commission, or any other officer designated by the Commission for the
purpose, in connection with any hearing ordered by the Commission, shall
issue subpoenas requiring the attendance and testimony of witnesses and
subpoenas requiring the production of documentary or other tangible
evidence at any designated place of hearing upon request therefor by any
party: Provided, however, That, where it appears to the person
requested to issue the subpoena that the subpoena sought may be
unreasonable, oppressive, excessive in scope, or unduly burdensome, he
may in his discretion, as a condition precedent to the issuance of the
subpoena, require the person seeking the subpoena to show the general
relevance and reasonable scope of the testimony or other evidence
sought. In the event the person requested to issue the subpoena shall
after consideration of all the circumstances determine that the subpoena
or any of its terms are unreasonable, oppressive, excessive in scope, or
unduly burdensome, he may refuse to issue the subpoena, or issue it only
upon such conditions as fairness requires. In making the foregoing
determination, where he can do so without undue inconvenience to the
participants in the proceeding, the person requested to issue the
subpoena may inquire of the other participants whether they will concede
the facts sought to be proved; but in this connection, except with
permission of the person seeking the subpoena, he shall not disclose the
identity of the person sought to be subpoenaed. A person whose request
for a subpoena has been denied or modified may not request any other
Commission official to issue the subpoena; but he may appeal to the
Commission from the denial or modification.
(2) Motions to quash. Any person to whom a subpoena is directed may,
prior to the time specified therein for compliance, but in no event more
than 5 days after the date of service of such subpoena, apply to the
hearing officer, or if he is unavailable, to the Commission, to quash or
modify such subpoena, accompanying such application with a brief
statement of the reasons therefor. The hearing officer or the
Commission, as the case may be, may deny the application, or upon notice
to the person upon whose request the subpoena was issued, and
opportunity for reply, may, (i) deny the application, (ii) quash or
modify the subpoena or (iii) condition denial of the application to
quash or modify the subpoena upon just and reasonable conditions,
including, in the case of a subpoena duces tecum, a requirement that the
person in whose behalf the subpoena was issued shall advance the
reasonable cost of transporting documentary or other tangible evidence
to the designated place of hearing.
(3) Service of subpoenas. Service of a subpoena upon a person named
therein shall be made by delivering a copy of the subpoena to such
person. Delivery of a copy of the subpoena to a natural person may be
made by handing it to the person; by leaving it at his office with the
person in charge thereof, or, if there is no one in charge, leaving it
in a conspicuous place therein; by leaving it at his dwelling place or
usual place of abode with some person of suitable age and discretion
then residing therein; by mailing it by registered or certified mail to
him at his last known address; or by any method whereby actual notice
is given to him prior to the return date. When the person to be served
is not a natural person, delivery of a copy of the subpoena may be
effected by handing it to a registered agent for service, or to any
officer, director, or agent in charge of any office of such person; by
mailing it by registered or certified mail to such representative at his
last known address; or by any method whereby actual notice is given to
such representative prior to the return date.
(i) Whenever service is to be made upon a person who is represented
in the pending proceeding by an attorney, the service may be made upon
the attorney.
(ii) When a subpoena is issued at the instance of anyone other than
an officer or agency of the United States, for the service to be valid
accompanying the subpoena there shall be a tender to the subpoenaed
person of the fees for one day's attendance and the mileage as specified
by paragraph (c) of this section (Rule 14(c)).
(iii) The provisions of this subparagraph (Rule 14(b)(3)) shall apply
to investigations as well as hearings.
(c) Witness fees and mileage. Witnesses summoned before the
Commission shall be paid the same fees and mileage that are paid to
witnesses in the courts of the United States, and witnesses whose
depositions are taken and the persons taking the same shall severally be
entitled to the same fees as are paid for like services in the courts of
the United States. Witness fees and mileage shall be paid by the party
at whose instance the witnesses appear.
(d) Official notice. In any proceeding official notice may be taken
of any material fact which might be judicially noticed by a district
court of the United States, any matter in the public official records of
the Commission, or any matter which is peculiarly within the knowledge
of the Commission as an expert body. If official notice is requested or
taken of a material fact not appearing in the evidence in the record,
the parties, upon timely request, shall be afforded an opportunity to
establish the contrary.
(Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 78d-1, 78d-2; sec. 19, 48
Stat. 85, sec. 23, 48 Stat. 901, as amended, sec. 20, 49 Stat. 833, sec.
319, 53 Stat. 1173, secs. 38, 211, 54 Stat. 841, 855. (15 U.S.C. 77s,
78w, 79c, 77sss, 80a-37, 80b-11))
(25 FR 6732, July 15, 1960, as amended at 28 FR 10486, Sept. 28,
1963; 29 FR 9948, July 11, 1964; 31 FR 5689, Apr. 13, 1966; 41 FR
9865, Mar. 8, 1976)
17 CFR 201.15 Depositions and interrogatories.
(a) Applications and orders for depositions. Any party desiring to
take a deposition shall make written application therfor, setting forth
the reasons why such deposition should be taken, the name and residence
of the witness, the matters concerning which it is expected to question
the witness, and the time and place proposed for the taking of the
deposition. If it appears that a prospective witness may be unable to
attend or may be prevented from attending a hearing, that his testimony
is material and that it is necessary to take his deposition in the
interest of justice, the hearing officer or the Commission, as the case
may be, may in his or its discretion, issue an order which will name the
witness whose deposition is to be taken, state the scope of the
testimony to be taken, and specify the time when, the place where, and
the designated officer before whom the witness is to testify. Such
order shall be served upon the parties by the Secretary, or other duly
designated officer of the Commission, a reasonable time in advance of
the time fixed for taking testimony.
(b) Testimony on depositions. Witnesses whose testimony is taken by
deposition shall be sworn or shall affirm before any questions are put
to them. Each question propounded shall be recorded and the answers
shall be taken down in the words of the witness. Examination and
cross-examination of deponents may proceed as permitted at the hearing.
(c) Objections to questions or evidence. Objections to questions or
evidence shall be in short form, stating the grounds of objection relied
upon, but no transcript filed by the officer shall include argument or
debate. Objections to questions or evidence shall be noted by the
officer upon the deposition, but he shall not have power to decide on
the competency or materiality or relevance or evidence. Failure to
object to questions or evidence before the officer shall not be deemed a
waiver unless the ground of the objection is one which might have been
obviated or removed if presented at that time.
(d) Filing of depositions. The testimony shall be reduced to writing
by the officer, or under his direction, after which the deposition shall
be subscribed by the witness and certified in usual form by the officer.
The original deposition and exhibits shall be forwarded under seal to
the Secretary of the Commission with such number of copies as may be
requested by the Secretary of the Commission. Upon receipt thereof the
Secretary or other duly designated officer shall file the original in
the proceeding and shall forward a copy to each party or his attorney of
record.
(e) Form of depositions. Such depositions shall conform to the
specifications of 201.22(e), (f) and (g), but deficiencies of form
shall not invalidate the deposition if properly executed.
(f) Depositions as part of the record. At a hearing, a part or all
of a deposition, so far as otherwise admissible in the proceeding, may
be used if it appears: (1) That the witness is dead; (2) that the
witness is out of the United States, unless it appears that the absence
of the witness was procured by the party offering the deposition; (3)
that the witness is unable to attend or testify because of age,
sickness, infirmity or imprisonment; (4) that the party offering the
deposition has been unable to procure the attendance of the witness by
subpoena; or (5) upon application and notice, that such exceptional
circumstances exist as to make it desirable, in the interest of justice
and with due regard to the importance of presenting the testimony of
witnesses orally in open hearing, to allow the deposition to be used.
If only part of a deposition is offered in evidence by a party, any
other party may require him to introduce all of it which is relevant to
the part introduced, and any party may introduce any other parts. Any
part of a deposition not received in evidence at a hearing before the
Commission or a hearing officer shall not constitute a part of the
record in such proceeding, unless the parties shall so agree or the
Commission so orders.
(g) Interrogatories. Depositions may also be taken and submitted on
written interrogatories in substantially the same manner as depositions
taken by oral examination upon application of any party as provided in
paragraph (a) of this section. The interrogatories shall be filed with
the application in triplicate. Within ten (10) days after service, any
party may file with the Secretary his objections, if any, to such
interrogatories, and may file such cross-interrogatories as he desires
to submit. Such objections and cross-interrogatories shall be filed in
triplicate and all other parties shall have ten (10) days after service
to file their objections, if any, to such interrogatories. Objections
to interrogatories or cross-interrogatories shall be settled by the
hearing officer. Objections to interrogatories shall be made before the
order for taking the deposition issues and if not so made shall be
deemed waived. When a deposition is taken upon written interrogatories
and cross-interrogatories, no party shall be present or represented, and
no person other than the witness, a stenographic reporter, and the
officer shall be present at the examination of the witness, which fact
shall be certified by the officer, who shall propound the
interrogatories and cross-interrogatories to the witness in their order.
The testimony shall be reduced to writing by the officer or under his
direction and shall be subscribed by the witnesses and certified in
usual form by the officer.
(25 FR 6732, July 15, 1960, as amended at 31 FR 10573, Aug. 6, 1966)
17 CFR 201.16 Proposed findings and conclusions; initial decision.
2039
(a) Content of initial decisions. An initial decision shall include:
Findings and conclusions, with the reasons or bases therefor, upon all
the material issues of fact, law or discretion presented on the record;
an appropriate order; a statement of the time within which a petition
for review of the initial decision may be filed; a statement that
pursuant to Rule 17(f) of these rules the initial decision shall become
the final decision of the Commission as to each party unless he files a
petition for review of the initial decision (pursuant to Rule 17(b) of
these rules) or the Commission (pursuant to Rule 17(c) of these rules)
determines on its own initiative to review the initial decision as to
him; and a statement that if a party timely files a petition for review
or the Commission takes action to review as to a party, the initial
decision shall not become final with respect to that party.
(b) When initial decision required. The hearing officer shall make
an initial decision in any proceeding in which a hearing is required to
be conducted in conformity with section 7 of the Administrative
Procedure Act, unless an initial decision is waived by all parties who
appear at the hearing and the Commission does not subsequently order
that an initial decision nevertheless be made by the hearing officer,
and in any other proceeding in which the Commission directs him to make
such a decision.
(c) (Reserved)
(d) Proposed findings and conclusions; briefs. In any proceeding
involving a hearing or an opportunity for hearing, the parties may file
in writing proposed findings and conclusions. Proposed findings of fact
shall indicate the basis therefor by appropriate citations to the
record. Briefs in support of such proposals may be filed therewith or
as a part thereof, and any proposed finding or conclusion not briefed
may be regarded as waived.
(e) Time for filing proposed findings and briefs prescribed by
hearing officer. At the end of every hearing, the hearing officer
shall, after consultation with the parties, prescribe the period within
which such proposed findings and conclusions and supporting briefs are
to be filed and shall direct such filings to be either simultaneous or
successive: Provided, however, That the period within which the first
filing is to be made, normally should be no more than 30 days after the
close of the hearing, and if the hearing officer directs that the first
filing be made at a date later than 30 days after the close of the
hearing, the reasons for so doing shall be stated in his order. If
successive filings are directed the proposed findings and conclusions of
the moving party shall be set forth in serially numbered paragraphs and
any counter statement of proposed findings and conclusions must, in
addition to any other matter, indicate as to which paragraphs of the
moving party's proposals there is no dispute. Reply briefs may be filed
by the moving party or, where simultaneous filings are directed, reply
briefs may be filed by all parties, within the period prescribed
therefor by the hearing officer.
(f) Service of record; preparation and filing of initial decision.
In proceedings in which an initial decision by a hearing officer is to
be made, the record in the proceeding shall, promptly after the time for
the last filing of briefs in reply to proposed findings, be served by
the Records Officer upon the hearing officer. The hearing officer shall
file his initial decision with the Secretary within 30 days after such
service. The Secretary shall promptly serve the initial decisions upon
the parties and shall promptly publish notice of the filing thereof in
the Securities and Exchange Commission News Digest; provided, however,
in private proceedings, no such notice shall be published unless the
Commission otherwise directs.
(g) Oral argument. At his discretion the hearing officer may hear
oral argument by the parties any time before he files his initial
decision with the Secretary.
(Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 78d-1, 78d-2)
(25 FR 6733, July 15, 1960, as amended at 29 FR 9488, July 11, 1964;
31 FR 5688, Apr. 13, 1966; 37 FR 23829, Nov. 9, 1972)
0392See 201.19 for special time limits applicable to broker-dealer
suspension cases.
17 CFR 201.17 Review by the Commission of initial decisions by hearing
officers. 2040
(a) Petition for review; when available. In any proceeding in which
an initial decision is made by a hearing officer, any party to the
proceeding, and any person who would have been entitled to judicial
review of the final order entered in the proceeding if the Commission
itself had made the initial decision, may file a petition for Commission
review of the initial decision.
(b) Petition for review; procedure. Any person who seeks Commission
review of an initial decision by a hearing officer shall, within 15 days
after service of such initial decision, serve and file a petition for
Commission review containing exceptions thereto indicating specifically
the findings and conclusions as to which exceptions are taken together
with supporting reasons for such exceptions. These reasons may be
stated in summary form. Any objection to an initial decision not saved
by written exception filed pursuant to this rule will be deemed to have
been abandoned and may be disregarded.
(c) Review by the Commission on its own initiative. The Commission
may on its own initiative order review of any initial decision by a
hearing officer within 30 days after the initial decision has been
served on all parties. When parties who do not intend to file a
petition for review desire this determination to be made in a shorter
time, they may so advise the Commission in writing; stating that they
waive their right to file a petition for review. Notice of any order of
the Commission directing review on its own initiative shall be served on
all parties by the Secretary.
(d) Review by the Commission pursuant to petition for review. After
a petition for review has been filed the Commission may decline to
review the initial decision except that it will order review where
(1) The initial decision:
(i) Suspends, denies or revokes a broker-dealer registration pursuant
to section 15(b) of the Securities Exchange Act of 1934; or
(ii) Suspends, denies or withdraws any registration or suspends or
expels a member of a national securities exchange pursuant to section
19(a) of the Securities Exchange Act of 1934; or
(iii) Suspends trading on an exchange pursuant to section 19(a) of
the Securities Exchange Act of 1934; or
(2) The petition for review makes reasonable showing that
(i) A prejudicial procedural error was committed in the conduct of
the proceeding; or
(ii) The initial decision embodies
(a) A finding or conclusion of material fact which is clearly
erroneous; or
(b) A legal conclusion which is erroneous; or
(c) An exercise of discretion or decision of law or policy which is
important and which the Commission should review.
After ordering review the Commission may summarily affirm the initial
decision except where the petition for review presents a matter within
paragraph (d)(2) of this section.
(e) Time for filing briefs. (1) Unless the Commission has summarily
affirmed the initial decision, the petitioner and any other person
entitled to Commission review may serve and file briefs in support of
the petition within 30 days after the Commission has ordered review
pursuant to a petition for review. Other persons entitled to Commission
review in the proceeding may serve and file reply briefs within 30 days
of service of a brief in support of the petition.
(2) When the Commission orders review on its own initiative pursuant
to paragraph (c) of this section, within 30 days after the Commission
has ordered review, any persons entitled to Commission review may serve
and file cross briefs in support of their positions and reply briefs
within 30 days of service of the original briefs.
(3) The time periods specified in this paragraph shall not be
applicable where the order for review specifies other time periods.
(f) Effect of initial decisions. Unless a party or other person
entitled to seek review of an initial decision timely files a petition
for review, or unless the Commission on its own initiative orders
review, such initial decision shall become the final decision of the
Commission with respect to those parties who have not timely filed a
petition for review of the initial decision. In the event that the
initial decision becomes the final decision of the Commission with
respect to a party, such party shall be duly notified thereof by the
Secretary of the Commission and a notice thereof shall be published,
unless the Commission otherwise directs, in the Securities and Exchange
Commission News Digest. The notice to the party shall state that the
time for filing of a petition for review of the initial decision by the
party has expired and that the Commission has determined not to order
review of the initial decision on its own initiative and shall specify
the date on which the order shall become effective. If a petition for
review is timely filed by a party or action to review as to a party is
taken by the Commission upon its own initiative, the initial decision
shall not become final as to that party.
(g) Scope of review. (1) Review by the Commission of an initial
decision by a hearing officer shall be limited to the matters specified
in the order for review. On notice to all parties, however, the
Commission on review may raise and determine any other matters which it
deems material, with opportunity for oral or written argument thereon by
the parties.
(2) On review the Commission may affirm, reverse, modify, set aside
or remand for further proceedings, in whole or in part, the initial
decision by the hearing officer and make any findings or conclusions
which in its judgment are proper on the record.
(3) In the event a majority of participating Commissioners do not
agree to a disposition on the merits, the initial decision shall be of
no effect, and an order will be issued in accordance with this result.
(h) Petition for review a prerequisite to judicial review. Pursuant
to the provisions of section 10(c) of the Administrative Procedure Act,
a petition to the Commission for review of an initial decision in any
proceeding is a prerequisite to the seeking of judicial review of a
final order entered pursuant to the initial decision.
(Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 78d-1, 78d-2)
(29 FR 9488, July 11, 1964, as amended at 31 FR 5688, Apr. 13, 1966;
46 FR 43137, Aug. 27, 1981)
0402See 201.19 for special time limits applicable to broker-dealer
suspension cases.
17 CFR 201.18 Briefs.
Briefs shall be confined to the particular matters remaining at
issue. Briefs not filed at or before the time provided will not be
received except upon special permission of the Commission. Each
exception which is briefed shall be supported by a concise argument and
by citation of such statutes, decisions and other authorities and by
page references to such portions of the record, as may be relevant. If
the exception relates to the admission or exclusion of evidence, the
substance of the evidence admitted or excluded shall be set forth in the
brief with appropriate references to the transcript. Reply briefs shall
be confined to matters in original briefs or other parties.
(25 FR 6733, July 15, 1960)
17 CFR 201.19 Special provisions relating to proceedings for suspension
of broker-dealer registrations pending final determination.
In any proceeding pursuant to section 15(b) of the Securities
Exchange Act of 1934 on the question of suspension of registration of a
broker or dealer pending final determination whether such registration
shall be revoked, the following time limits shall be applicable, unless
otherwise ordered by the Commission, in lieu of the time limits
prescribed by other provisions of this part:
(a) Proposed findings and briefs. Proposed findings and conclusions
and briefs in support thereof may be filed within 3 days after the close
of the hearing.
(b) Service of record; filing of decision. In proceedings in which
an initial decision by a hearing officer is to be prepared, the record
in the proceedings shall, promptly after the time for filing proposed
findings and conclusions and briefs in support thereof, be served by the
Records Officer upon the hearing officer. The initial decision shall be
filed with the Secretary within 5 days after such service.
(c) Petition for review. Any petition for review must be filed
within 3 days after receipt of the initial decision.
(d) Briefs. Briefs in support of a petition for review, or in
support of or in opposition to any portion of an initial decision, may
be served and filed within 5 days after receipt of notice that the
Commission has ordered review of the initial decision. Reply briefs may
be served and filed within 5 days of receipt of an original brief.
(e) No review by the Commission on its own initiative. The
provisions of 201.17(c) shall not be applicable to the proceedings to
which this rule applies.
(Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 78d-1, 78d-2)
(25 FR 6733, July 15, 1960, as amended at 29 FR 9489, July 11, 1964)
17 CFR 201.20 Contents and certification of record.
(a) Contents of record. (1) The record in every proceeding before
the Commission for final decision shall include:
(i) The order for proceedings, the notice of hearing and any
amendments thereto;
(ii) Any responsive pleading and any amendments thereto;
(iii) The moving papers to the extent the same are not comprehended
under (a)(1)(i) of this section;
(iv) Any other document or portion thereof which constitutes part of
the official public records of the Commission and which is specified in
the documents listed in paragraph (a)(1) (i), (ii) or (iii) of this
section, unless the hearing officer shall determine the same to be
irrelevant, immaterial or unduly repetitious;
(v) Any affidavit and response, testimony taken and decision in
connection with a request to withdraw under 201.11(c);
(vi) Proofs of service;
(vii) Any application, motion or objection made in the course of the
proceeding, rulings thereon and exceptions thereto;
(viii) Any stipulation between the parties as to any matter of fact,
law or procedure;
(ix) The transcript of testimony and any specification of corrections
thereof;
(x) Any exhibit received at the hearing, including any document or
portion thereof constituting part of the official public records of the
Commission which the hearing officer during the course of the hearing
may incorporate by reference upon a determination that it is relevant,
material and not unduly repetitious;
(xi) Any written communication accepted by the hearing officer
pursuant to 201.9(f);
(xii) Any proposed findings and conclusions;
(xiii) Any initial decision and any petition for review; and
(xiv) Any final environmental impact statement, and any supplement
thereto, prepared in connection with the proceeding as well as any
public comments received thereon and any Commission responses to such
comments.
(2) At the beginning of the hearing, the hearing officer shall read
into the record a list of the documents which at that time constitute
the record.
(3) The documents or portions thereof referred to in paragraphs
(a)(1) (iv) and (x) of this section shall be deemed to have been
received in evidence as exhibits whether or not they have been
physically introduced.
(4) Promptly after the close of the hearing, the hearing officer
shall transmit to the Records Officer of the Commission or his
designated deputy a list of documents or portions thereon constituting
part of the public official records of the Commission which during the
course of the hearing have been admitted as exhibits pursuant to
paragraph (a)(1)(x) of this section or excluded pursuant to paragraph
(a)(1)(iv) of this section and a copy of any written communication
accepted pursuant to 201.9(f), application, motion, objection, ruling
or stipulation made in writing during the proceeding which has not
theretofore been filed with the Secretary or other duly designated
officer of the Commission or included in the transcript. Promptly after
the last date for filing briefs where the Commission has ordered review
of the initial decision, or at such earlier time as the Commission may
direct after receipt of a petition for review, and prior to any oral
arguments before the Commission, the Records Officer of the Commission
or his duly designated deputy shall certify the entire record to the
Commission, provided that documents or portions thereof constituting
part of the official records of the Commission may be incorporated by
reference and need not be physically transferred to the record.
(b) Retention of documents not admitted in evidence; substitution of
copies. (1) Documents offered in evidence during the course of a
hearing but excluded by the hearing officer, and documents marked for
identification but not offered as exhibits, shall not be considered as a
part of the record, but any such document shall be retained in the
custody of the Commission.
(2) With the consent of the parties a copy may be substituted for a
document which is retained pursuant to the provisions of this paragraph.
(c) Correction of transcript. Any party may submit a timely request
to the hearing officer to correct the transcript. Proposed corrections
of the transcript may be submitted to the hearing officer by stipulation
of the parties, or by a motion by any party, and, upon notice to all
parties to the proceeding, the hearing officer may specify corrections
of the transcript. A copy of such specification shall be furnished to
all parties and made a part of the record.
(d) Scandalous or impertinent matter. Any scandalous or impertinent
matter contained in any brief or pleading or in connection with any oral
presentation in a proceeding may be stricken on order of the Commission
or at the direction of the hearing officer.
(Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 78d-1, 78d-2; secs.
19(a), 20, 23(a)(1), 319(a), 38 and 211 (15 U.S.C. 77s(a), 79t,
78w(a)(1), 77sss(a), 80a-37 and 80b-11)
(25 FR 6733, July 15, 1960, as amended at 29 FR 9489, July 11, 1964;
44 FR 41177, July 16, 1979)
17 CFR 201.21 Hearings before the Commission.
(a) Oral argument. Except as to motions and applications dealt with
in 201.12 and determinations whether to order review of an initial
decision by a hearing officer, upon written request of any party a
matter to be decided by the Commission will be set down for oral
argument before the Commission unless exceptional circumstances make
oral argument impractical or inadvisable. Such request must be made
within the time provided for filing the original briefs.
(b) Time allowed. Unless otherwise directed by the Commission, not
more than one-half hour will be allowed for oral argument by any
participant and, where the same or similar interests are represented by
more than one participant, an aggregate of not more than one-half hour
will be allowed the interests so represented irrespective of the number
of participants, the time to be divided equally among such participants.
In appropriate cases the Commission may, in its discretion, extend,
shorten, or reallocate the time prescribed herein. Oral argument should
be succinct.
(c) Basis for Commission determinations. The Commission shall
determine the matter on the record, any briefs of the parties and any
oral argument before the Commission.
(d) Leave to adduce additional evidence. The Commission, upon its
own motion or upon application in writing by any party for leave to
adduce additional evidence which application shall show to the
satisfaction of the Commission that such additional evidence is material
and that there were reasonable grounds for failure to adduce such
evidence at the hearing before the Commission or the hearing officer,
may hear such additional evidence or may refer the proceeding to the
hearing officer for the taking of such additional evidence.
(e) Petition for rehearing. Any petition for rehearing by the
Commission shall be filed within 10 days after the entry of the order
complained of, or within such time as the Commission may prescribe upon
request of the party, if made within the foregoing 10-day period. The
petition for rehearing shall clearly state the specific matters upon
which rehearing is sought.
(f) Participation of Commissioners. Any member or members of the
Commission who were not present at the oral argument may participate in
the decision of the proceeding. Any Commissioner participating in the
decision who was not present at oral argument will review the transcript
of such argument.
(Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 78d-1, 78d-2)
(25 FR 6734, July 15, 1960, as amended at 29 FR 9489, July 11, 1964;
31 FR 5689, Apr. 13, 1966)
17 CFR 201.22 Filing; formalities; computation of time.
(a) Filing with Commission. All papers required to be filed with the
Commission in any proceeding shall be filed with the Secretary, and must
be received at the office of the Commission in Washington, DC, within
the time limit, if any, for such filing.
(b) (Reserved)
(c) Number of copies. Unless otherwise specifically provided in this
part or by a particular rule or order of the Commission an original and
7 copies of all papers shall be filed.
(d) Length and form of briefs. All briefs filed with the Commission
or with a hearing officer containing more than 10 pages shall include an
index and table of cases. The date of each brief must appear on its
front cover or title page. No brief shall exceed 60 pages in length,
except with the permission of the Commission, or as to briefs filed with
a hearing officer, with the permission of that hearing officer.
(e) Paper, spacing, type. All paper filed under this part shall be
typewritten, mimeographed, lithographed, printed or prepared by any
similar process which, in the opinion of the Commission, produces copies
suitable for microfilming. All papers shall be plainly legible and
shall be on one grade of good unglazed white paper measuring no larger
than 8 1/2 x 11 inches. To the extent that the reduction of larger
documents would render them illegible, such documents may be filed on
paper larger than 8 1/2 x 11 inches in size. All papers should have
lefthand margins at least 1 1/2 inches wide, shall be bound on the
lefthand side, and shall be double-spaced, except that quotations shall
be single-spaced and indented. If printed, they shall be in either 10-
or 12-point type with double-leaded text and single-leaded quotations.
(f) Signatures. All papers must be signed in ink by the party filing
the same, or his duly authorized agent or attorney, and must show the
address of the signed.
(g) Title page. All papers filed must include at the head thereof,
or on a title page, the name of the Commission, the title of the
proceeding, the names of the parties, and the subject of the particular
paper or pleading, and the file number assigned to the proceeding.
(h) Signature on orders. All orders of the Commission shall be
signed by the Secretary or such other person as may be authorized by the
Commission.
(i) Time allowances for residents of distant states. Wherever the
rules in this part provide a specific limitation as to the time within
which any papers are required to be filed with the Commission in any
proceeding, an additional period of 3 days shall be available for the
hearing officers and parties who are residents of Alaska, Arizona,
California, Colorado, Hawaii, Idaho, Montana, Nebraska, Nevada, New
Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and
Wyoming.
(j) Computation of time. In computing any period of time prescribed
or allowed by these rules or by order of the Commission the day of the
act, event, or default from which the designated period of time begins
to run is not to be included. The last day of the period so computed is
to be included unless it is a Saturday, a Sunday, or a legal holiday (as
defined in 201.5) in which event the period runs until the end of the
next day which is neither a Saturday, a Sunday nor a legal holiday.
Intermediate Saturdays, Sundays, and legal holidays shall be excluded
from the computation when the period of time prescribed or allowed is 7
days or less.
(k) Entry of orders. In computing any period of time involving the
date of the entry of an order by the Commission, the date of entry shall
be (1) the date of the adoption of the order by the Commission, as
reflected in the caption of the order, or (2) in the case of orders
reflecting action taken pursuant to delegated authority, the date when
such action is taken, as reflected in the caption of the order. The
order shall be available for inspection by the public from and after the
date of entry, unless it is a non-public order. A non-public order
shall be available for inspection from and after the date of entry by
any person entitled to inspect it.
(25 FR 6734, July 15, 1960, as amended at 29 FR 3424, Mar. 17, 1964;
36 FR 9864, May 29, 1971; 37 FR 23829, Nov. 9, 1972; 47 FR 58238, Dec.
30, 1982)
17 CFR 201.23 Service of pleadings, etc., other than moving papers.
(a) Service of documents filed with Commission. All amendments to
moving papers, all answers, all motions or applications made in the
course of a proceeding (unless made orally during a hearing), all
proposed findings and conclusions, all petitions for review of any
initial decision, and all briefs shall be filed with the Commission and
shall, at the time of personal delivery or dispatch to the Commission,
be served by the filing person upon all parties to the proceeding
(including the interested division of the Commission), provided that
such papers relating to proceedings concerning confidential treatment
pursuant to provisions of Clause 30 of Schedule A of the Securities Act
of 1933, section 24(b) of the Securities Exchange Act of 1934, section
22(b) of the Public Utility Holding Company Act of 1935, section 45(a)
of the Investment Company Act of 1940, or section 210(a) of the
Investment Advisers Act of 1940, and the rules and regulations
promulgated under such sections, shall be served only by filing the
appropriate number of copies thereof upon the Commission.
(b) How service made. Service of such documents shall be made by
personal service on, or by mail addressed to, the party or his attorney
or other agent for service. Where the document being served is printed,
2 copies shall be served on each party or his attorney or other agent
for service. Service shall be deemed made at the time of personal
service or of deposit in the mails properly addressed and post-paid.
Where a party makes service by mail any specific limitation on the time
within which the person on whom such mail service has been made may
respond thereto shall be increased by 2 days.
(c) Proof of service. Proof of service must be made by filing with
the Commission an affidavit of service or, in the case of any
attorney-at-law, a certificate, simultaneously with the filing of the
required number of copies with the Commission.
(d) Service of decisions and orders. Copies of all rulings by the
Commission on any written application and decisions and orders of the
Commission (including those pursuant to delegated authority) shall be
served by the Secretary or other duly designated officer of the
Commission on the applicant and, if made in connection with a pending
proceeding, on all parties thereto.
(e) Commission receipt pursuant to 28 U.S.C. 2112(a)(1) of copies of
petitions for judicial review of Commission orders where petitions for
review are filed in two or more courts of appeals with respect to the
same order. The Commission officer and office designated to receive,
pursuant to 28 U.S.C. 2112(a)(1), copies of petitions for review of
Commission orders, from the persons instituting the review proceedings
in a court of appeals, are the Secretary and the Office of the Secretary
at the Commission's Office in Washington, DC. Ten copies of the
petition shall be submitted pursuant to this paragraph. Each copy shall
state on its face that it is being submitted to the Commission pursuant
to 28 U.S.C. 2112 by the persons or person who filed the petition in the
court of appeals.
Note: 28 U.S.C. 2112(a) contains certain applicable requirements.
(Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 78d-1, 78d-2)
(25 FR 6735, July 15, 1960, as amended at 29 FR 9489, July 11, 1964;
41 FR 21184, May 24, 1976; 53 FR 28191, July 27, 1988)
17 CFR 201.24 Incorporation by reference.
Where rules, regulations, or instructions to forms of the Commission
permit incorporation by reference, a document may be so incorporated by
reference to the specific document and to the prior filing or submission
in which such document was physically filed or submitted. Except where
a registrant or issuer is expressly required to incorporate a document
or documents by reference, reference may not be made to any document
which incorporates another document by reference if the pertinent
portion of the document containing the information or financial
statements to be incorporated by reference includes an incorporation by
reference to another document. No document on file with the Commission
for more than five years may be incorporated by reference except:
(a) Documents contained in registration statements which may be
incorporated by reference as long as the registrant has a reporting
requirement with the Commission;
(b) Documents that the registrant specifically identifies by physical
location by SEC file number reference, provided such materials have not
been disposed of by the Commission pursuant to its Records Control
Schedule (17 CFR 200.80f).
(47 FR 11401, Mar. 16, 1982, as amended at 56 FR 30053, July 1, 1991)
17 CFR 201.25 Confidential treatment of certain matters.
(a) Requests for confidential treatment. Confidential treatment of
material listed in 201.25(a) may be requested for good cause where
authorized by statute. Request for confidential treatment may be made
pursuant to the provisions of Clause 30 of Schedule A of the Securities
Act of 1933 and 230.406 of this chapter thereunder, section 22(b) of
the Public Utility Holding Company Act of 1935 and 250.104 of this
chapter thereunder, section 45(a) of the Investment Company Act of 1940
and 270.45a-1 of this chapter thereunder, or section 210(a) of the
Investment Advisers Act of 1940. In any case where a hearing for the
purpose of taking testimony relating to whether confidential treatment
should be granted or continued is to be held, the Commission may in its
discretion, prior to the hearing, require the person desiring the
confidential treatment to furnish in writing additional information in
respect of its grounds of objection to public disclosure. Failure to
supply the information so requested within 15 days from the date of
receipt by the registrant of a notice of the information required, shall
be deemed a waiver of the objections to public disclosure of that
portion of the information filed confidentially with respect to which
the additional information required by the Commission relates, unless
the Commission shall otherwise order for good cause shown at or before
the expiration of such 15-day period.
(b) Procedure in confidential treatment cases. (1) All papers
containing data as to which confidential treatment is sought, together
with any application making objection to the disclosure thereof, or
other papers relating in any way to such application, shall be made
available to the public only in accordance with orders of the Commission
and/or the applicable provisions of 230.406, 240.24b-2, 250.104 of
this chapter (Rule 485 issued under the Securities Act of 1933, Rule
24b-2 issued under the Securities Exchange Act of 1934, Rule 104 issued
under the Public Utility Holding Company Act of 1935), section 45 of the
Investment Company Act of 1940 and 270.45a-1 of this chapter (Rule
45a-1 issued under that Act), or section 210(a) of the Investment
Advisers Act of 1940.
(2) Proposed findings and conclusions and briefs in support of such
proposed findings and conclusions, and initial decision, any petition
for Commission review thereof, and any briefs pursuant to Commission
order for review which are filed in connection with any proceeding
concerning confidential treatment shall, unless otherwise ordered by the
Commission, be for the confidential use only of the hearing officer, the
Commission, the parties and counsel. The initial page of copies of such
an initial decision will contain a statement that such decision is
nonpublic. The order of the Commission sustaining or denying the
application for confidential treatment shall be made available to the
public. Any findings or opinion issued by a hearing officer or by the
Commission in any proceeding relating to confidential treatment shall be
made public at such time as the material filed confidentially is made
available to the public.
(c) (Reserved)
(d) Purchase of transcripts of private hearings. Transcripts of
private hearings will be supplied to the parties at the prescribed
rates.
(Secs. 1, 2, 76 Stat. 394, 395; 15 U.S.C. 78d-1, 78d-2; secs. 6, 7,
8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209, 48 Stat. 906,
908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685; sec. 308(a)(2),
90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48 Stat. 882, 892,
894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704, 1375, 1377, 1379;
sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat. 569, 570-574;
secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3, 4, 5, 84 Stat.
1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9, 10, 89 Stat. 117,
118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat. 155; secs. 202,
203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49 Stat. 833; sec.
319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C. 77f, 77g, 77h,
77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 79t(a), 77sss(a),
80a-37)
(25 FR 6735, July 15, 1960, as amended at 29 FR 3620, Mar. 20, 1964;
29 FR 9490, July 11, 1964. Redesignated at 32 FR 9828, July 6, 1967, and
amended at 40 FR 54774, Nov. 26, 1975; 47 FR 11401, Mar. 16, 1982)
17 CFR 201.26 Review by the Commission of determinations at a delegated
level.
(a) Scope of rule. This rule is applicable to determinations at a
delegated level made pursuant to authority delegated in Article 30-1 et
seq. of Subpart A of the Commission's Statement of Organization and
Program Management, 200.30-1 et seq. of this chapter.
(b) Petition for review; when available. Commission review of any
matter determined at a delegated level in accordance with 15 U.S.C.
78d-1, as amended, shall be available as therein provided.
(c) Petition for review; procedure. Any party or intervenor who
seeks review of a determination at a delegated level shall communicate
to the Secretary of the Commission by telegram or otherwise a notice of
intention to petition for review. Such communication shall be made
within one day after receipt of actual notice of the determination or
within five days after notice has been mailed to the person's last
address listed with the Commission, whichever is shorter. The notice of
intention to petition for review shall identify the petitioner and the
determination complained of. Within five days after such notice has
been communicated, a petition for review containing a clear and concise
statement of the issues to be reviewed and the reasons review is
appropriate shall be filed with the Commission.
(d) Review by the Commission on its own initiative. The Commission
may on its own initiative order review of any determination at a
delegated level at any time; except that any review by the Commission
on its own initiative will be ordered within five days after the
determination where there are parties to or intervenors in the matter.
(e) Effect of delegated determinations; stays, etc. Any
determination at a delegated level shall have immediate effect and be
deemed the action of the Commission. Upon communication to the
Secretary of a notice of intention to petition for review as provided in
paragraph (c) of this section, the determination at a delegated level
shall thereafter be stayed until the Commission orders otherwise. An
order directing review on the Commission's own initiative or granting a
petition for review will set forth the procedure to be followed
thereafter, including the time within which any party or intervenor may
file a statement in support of or in opposition to the determination,
whether a stay should be granted or continued and whether oral argument
will be heard. As against any person who shall have acted in reliance
upon any determination at a delegated level, any stay or any
modification or reversal by the Commission of such determination shall
be effective only from the time such person receives actual notice of
such stay, modification or reversal.
(Sec. 1, 76 Stat. 394, (15 U.S.C. 78d-1, 78d-1(b), as amended))
(28 FR 2857, Mar. 22, 1963, as amended at 28 FR 12616, Nov. 27, 1963;
29 FR 3567, Mar. 20, 1964. Redesignated at 32 FR 9828, July 6, 1967,
and amended at 40 FR 54774, Nov. 26, 1975; 44 FR 75383, Dec. 20, 1979)
17 CFR 201.27 Adjudications under the Securities Exchange Act of 1934
not required to be determined on the record after notice and opportunity
for hearing.
In every case pursuant to the Securities Exchange Act of 1934 of
adjudication (as defined in section 551 of title 5 U.S.C.) not required
to be determined on the record after notice and opportunity for hearing,
the Commission shall (a) give prompt notice of any adverse action or
final disposition to any person who has requested the Commission to make
(or not to make) any such adjudication, and (b) furnish to any such
person a statement of written reasons therefor. Additional procedures
may be specified in rules relating to specific types of such
adjudications; where any such rule provides for the publication of a
Commission order, notice of the action or disposition shall be deemed to
be given by such publication.
(40 FR 42186, Sept. 11, 1975, as amended at 44 FR 35207, June 19,
1979)
17 CFR 201.28 Adjudications not required to be determined on the record
after notice and opportunity for hearing.
(a) This section applies to every case of adjudication (as defined in
section 551 of title 5 U.S.C.) pursuant to any statute which the
Commission administers, which adjudication is not required to be
determined on the record after notice and opportunity for hearing and
which the Commission has not chosen to determine on the record after
notice and opportunity for hearing.
(b) In any case of adjudication described in paragraph (a) of this
section, if the Commission provides notice and opportunity for the
submission of written comments by parties to the adjudication or, as the
case may be, by other interested persons, written comments received on
or before the closing date for comments, unless accorded confidential
treatment pursuant to statute or rule of the Commission, become a part
of the public record of the adjudication. The Commission, in its
discretion, may accept and include in the public record written comments
filed with the Commission after the closing date.
(Sec. 19(a), 48 Stat. 908; sec. 23(a), 48 Stat. 901; sec. 20(a), 49
Stat. 833; sec. 319(a), 53 Stat. 1173; sec. 38(a), 54 Stat. 841; sec.
211(a), 54 Stat. 855; (15 U.S.C. 77s(a), 78w(a), 78t(a), 77sss(a),
80a-37(a), 80b-11(a)))
(44 FR 35207, June 19, 1979)
17 CFR 201.29 Applications by barred individuals for consent to
associate with registered brokers, dealers, municipal securities
dealers, investment advisers or investment companies.
This rule governs applications by certain persons, barred by
Commission order from association with entities registered with the
Commission, for consent to become so associated. Applications made
pursuant to this rule must show that the proposed association would be
consistent with the public interest. In addition to the information
specifically required by the rule, applications should be supplemented,
where appropriate, by written statements of individuals (other than the
applicant) who are competent to attest to the applicant's character,
employment performance, and other relevant information. Intentional
misstatements or omissions of fact may constitute criminal violations of
18 U.S.C. 1001 and other provisions of law.
The nature of the supervision that an applicant will receive or
exercise as an associated person with a registered entity is an
important matter bearing upon the issue of the public interest. In
meeting the burden of showing that the proposed association is
consistent with the public interest, the application and supporting
documentation must demonstrate that the proposed supervision,
procedures, or terms and conditions of employment, are reasonably
designed to prevent a recurrence of the conduct that led to imposition
of the bar. As an associated person, the applicant will be limited to
association in a specified capcity with a particular registered entity
and may also be subject to specific temrs and condtions.
Normally, the applicant's burden of demonstrating that the proposed
association is consistent with the public interest will be difficult to
meet where the applicant is to be supervised by, or is to supervise,
another barred individual. In addition, where an applicant wishes to
become the sole proprietor of a registered entity and, thus, is seeking
Commission consent notwithstanding an absence of supervision, the
applicant's burden will be difficult to meet.
In addition to the factors set forth in paragraph (d) of this rule,
the Commission will consider the nature of the findings that resulted in
the bar in determining whether the proposed association is consistent
with the public interest. In this regard, attention is directed to Rule
5(e) of the Commission's Rules on Informal and Other Procedures. Among
other things, Rule 5(e) sets forth the Commission's policy ''not to
permit a * * * respondent (in an administrative proceeding) to consent
to * * * (an) order that imposes a sanction while denying the
allegations in the * * * order for proceeding.'' Consistent with the
rationale underlying that policy, and in order to avoid the appearance
that an application made pursuant to this rule was granted on the basis
of such denial, the Commission will not consider any application that
attempts to re-argue or collaterally attack the findings that resulted
in the Commission's bar order.
(a) Scope of rule. Applications for Commission consent to associate,
or to change the terms and conditions of association, with a registered
broker, dealer, municipal securities dealer, investment adviser, or
investment company (''registered entities'') may be made pursuant to
this rule where a Commission order bars the individual from association
with a registered entity and:
(1) Such barred individual seeks to become associated with an entity
that is not a member of a self-regulatory organization; or
(2) The order contains a proviso that application may be made to the
Commission after a specified period of time.
(b) Form of application. Each application shall be supported by an
affidavit, manually signed by the applicant, which addresses the factors
set forth in paragraph (d) of this rule. One original and four copies
of the application shall be filed with the Office of the Secretary,
Securities and Exchange Commission, 450 Fifth Street, NW., Washington,
DC 20549. Each application shall include as exhibits:
(1) A copy of the Commission order imposing the bar;
(2) An undertaking by the applicant immediately to notify the
Commission in writing if any information submitted in support of the
application, while pending, becomes materially false or misleading;
(3) A copy of a completed Form U-4, where the applicant's proposed
association is with a broker-dealer or municipal securities dealer;
(4) A copy of a completed Form MSD-4, where the applicant's proposed
association is with a bank municipal securities dealer;
(5) The information required by Form ADV with respect to the
applicant, where the applicant's proposed association is with an
investment adviser; and
(6) A written statement by the proposed employer that describes (i)
the terms and conditions of employment and supervision to be exercised
over such applicant and, where applicable, by such applicant; (ii) the
qualifications, experience, and disciplinary records of the proposed
supervisor(s) of the applicant; (iii) the compliance and disciplinary
history, during the two years preceding the filing of the application,
of the office in which the applicant will be employed; and (iv) the
names of any other associated persons in the same office who have
previously been barred by the Commission, and whether they are to be
supervised by the applicant.
(c) Required showing. The applicant shall make a showing
satisfactory to the Commission that the proposed association would be
consistent with the public interest.
(d) Factors to be addressed. The affidavit required by paragraph (b)
shall address each of the following:
(1) The time period which has elapsed since the imposition of the
bar;
(2) Any restitution or similar action taken by the applicant to
recompense any person injured by the misconduct that resulted in the
bar;
(3) The applicant's compliance with the order imposing the bar;
(4) The applicant's employment during the period subsequent to
imposition of the bar;
(5) The capacity or position in which the applicant proposes to be
associated;
(6) The manner and extent of supervision to be exercised over such
applicant and, where applicable, by such applicant;
(7) Any relevant courses, seminars, examinations or other actions
completed by the applicant subsequent to imposition of the bar to
prepare for his or her return to the securities business; and
(8) Any other information material to the application.
(e) Notification to applicant and written statement. In the event an
adverse recommendation is proposed by the staff with respect to an
application made pursuant to this rule, the applicant shall be so
advised and provided with a written statement of the reasons for such
recommendation. The applicant shall then have 30 days to submit a
written statement in response.
(f) Concurrent applications. The Commission will not consider any
application submitted pursuant to this rule, if any other application
for consent to associate concerning the same applicant is pending before
any self-regulatory organization.
(Secs. 15, 15B, 19, 23 (a) and (c) of the Securities Exchange Act of
1934 (15 U.S.C. 78o, 78s, 78w (a) and (c)); secs. 203 and 211 of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-3, 80b-11); and secs. 9
and 38 of the Investment Company Act of 1940 (15 U.S.C. 809-9, 809-38))
(49 FR 12206, Mar. 29, 1984)
17 CFR 201.29 Pt. 201, Subpt. A, Table I
17 CFR 201.29 Table I Showing Derivation of Revised Rules in Relation to Present Rules
(25 FR 6736, July 15, 1960)
17 CFR 201.29 Pt. 201, Subpt. A, Table II
17 CFR 201.29 Table II Showing Location in Revised Rules of Provisions of Present Rules
(25 FR 6736, July 15, 1960)
17 CFR 201.29 Subpart B -- Regulations Pertaining to the Equal Access
to Justice Act
Authority: Sec. 19, Securities Act of 1933, 15 U.S.C. 77r; secs.
23 and 24, Securities Exchange Act of 1934, 15 U.S.C. 78w and 78x; sec.
20, Public Utility Holding Company Act of 1935, 15 U.S.C. 79t; sec.
319, Trust Indenture Act of 1939, 15 U.S.C. 77sss; sec. 38, Investment
Company Act of 1940, 15 U.S.C. 80a-37; sec. 211, Investment Advisers
Act of 1940, 15 U.S.C. 80b-11; and sec. 203(a)(1), Equal Access to
Justice Act, 5 U.S.C. 504(c)(1).
Source: 47 FR 610, Jan. 6, 1982, unless otherwise noted.
17 CFR 201.31 Purpose of these rules.
The Equal Access to Justice Act, 5 U.S.C. 504 (called the Act in this
subpart B), provides for the award of attorney fees and other expenses
to eligible individuals and entities who are parties to certain
administrative proceedings (called adversary adjudications) before the
Commission. An eligible party may receive an award when it prevails
over the Commission, unless the Commission's position was substantially
justified or special circumstances make an award unjust. The rules in
this subpart describe the parties eligible for awards and the
proceedings that are covered. They also explain how to apply for
awards, and the procedures and standards that the Commission will use in
ruling on those applications.
(54 FR 53051, Dec. 27, 1989)
17 CFR 201.32 When the Act applies.
The Act applies to adversary adjudications described in 201.33
pending or commenced before the Commission on or after August 5, 1985.
It also applies to any adversary adjudication commenced on or after
October 1, 1984, and finally disposed of before August 5, 1985, provided
that an application for fees and expenses, as described in these rules,
has been filed with the Commission within 30 days after August 5, 1985.
Proceedings which have been substantially concluded are not deemed
pending under these rules although officially pending for purposes such
as concluding remedial actions found in Commission orders or private
undertakings.
(54 FR 53051, Dec. 27, 1989)
17 CFR 201.33 Proceedings covered.
(a) The Act applies to adversary adjudications conducted by the
Commission. These are on the record adjudications under 5 U.S.C. 554 in
which the position of an Office or Division of the Commission as a
party, not including amicus participation, is presented by an attorney
or other representative who enters an appearance and participates in the
proceeding. See Appendix, 17 CFR 201.60.
(b) The fact that the Commission has not identified a type of
proceeding as an adversary adjudication shall not preclude the filing of
an application by a party who believes the proceeding is covered by the
Act; whether the proceeding is covered will then be an issue for
resolution in proceedings on the application.
(c) If a proceeding includes both matters covered by the Act and
matters specifically excluded from coverage, any award made will include
only fees and expenses related to covered issues.
(47 FR 610, Jan. 6, 1982, as amended at 54 FR 53051, Dec. 27, 1989)
17 CFR 201.34 Eligibility of applicants.
(a) To be eligible for an award of attorney fees and other expenses
under the Act, the applicant must be a party to the adversary
adjudication for which it seeks it seeks an award. The term party is
defined in 5 U.S.C. 551(3). The applicant must show that it meets all
conditions of eligibility set out in this subpart.
(b) The types of eligible applicants are as follows:
(1) An individual with a net worth of not more than $2 million;
(2) The sole owner of an unincorporated business who has a net worth
of not more than $7 million, including both personal and business
interests, and not more than 500 employees;
(3) A charitable or other tax-exempt organization described in
section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3))
with not more than 500 employees;
(4) A cooperative association as defined in section 15(a) of the
Agricultural Marketing Act (12 U.S.C. 1141j(a)) with more than 500
employees; and
(5) Any other partnership, corporation, association, unit of local
government, or public or private organization with a new worth of not
more than $7 million and not more than 500 employees.
(c) For the purpose of eligibility, the net worth and number of
employees of an applicant shall be determined as of the date the
proceeding was initiated.
(d) An applicant who owns an unincorporated business will be
considered as an individual rather than a sole owner of an
unincorporated business if the issues on which the applicant prevails
are related primarily to personal interests rather than to business
interests.
(e) The employees of an applicant include all persons who regularly
perform services for remuneration for the applicant, under the
applicant's direction and control. Part-time employees shall be
included on a proportional basis.
(f) The net worth and number of employees of the applicant and all of
its affiliates shall be aggregated to determine eligibility. Any
individual, corporation or other entity that directly or indirectly
controls or owns a majority of the voting shares or other interest of
the applicant, or any corporation or entity of which the applicant
directly or indirectly owns or controls a majority of the voting shares
or other interest, will be considered an affiliate for purposes of this
subpart, unless the administrative law judge determines that such
treatment would be unjust and contrary to the purposes of the Act in
light of the actual relationship between the affiliated entities. In
addition, the administrative law judge may determine that financial
relationships of the applicant other than those described in this
paragraph constitute special circumstances that would make an award
unjust.
(g) An applicant that participates in a proceeding primarily on
behalf of one or more other persons or entities that would be ineligible
is not itself eligible for an award.
(47 FR 610, Jan. 6, 1982, as amended at 54 FR 53051, Dec. 27, 1989)
17 CFR 201.35 Standards for awards.
(a) A prevailing applicant may receive an award for fees and expenses
incurred in connection with a proceeding or in a significant and
discrete substantive portion of the proceeding, unless the position of
the Office or Division over which the applicant has prevailed was
substantially justified. The position of the Office or Division
includes, in addition to the position taken by the Office or Division in
the adversary adjudication, the action or failure to act by the Office
or Division upon which the adversary adjudication is based. The burden
of proof that an award should not be made to an eligible prevailing
applicant is on counsel for an Office or Division of the Commission,
which must show that its position was reasonable in law and fact.
(b) An award will be reduced or denied if the applicant has unduly or
unreasonably protracted the proceeding or if special circumstances make
the award sought unjust.
(47 FR 610, Jan. 6, 1982, as amended at 54 FR 53051, Dec. 27, 1989)
17 CFR 201.36 Allowable fees and expenses.
(a) Subject to the limitation of paragraph (b), awards will be based
on rates customarily charged, in the locale of the hearing, by persons
engaged in the business of acting as attorneys, agents and expert
witnesses, even if the services were made available without charge or at
a reduced rate to the applicant.
(b) No award of the fee of an attorney or agent under these rules may
exceed $75.00 per hour. No award to compensate an expert witness may
exceed the reasonable rate at which the Commission pays witnesses with
similar expertise. However, an award may also include the reasonable
expenses of the attorney, agent or witness as a separate item, if the
attorney, agent or witness ordinarily charges clients separately for
such expenses.
(c) In determining the reasonableness of the fee sought for an
attorney, agent or expert witness, the administrative law judge shall
consider the following:
(1) If the attorney, agent or witness is in private practice, his or
her customary fee for similar services, or, if an employee of the
applicant the fully allocated cost of the services;
(2) The prevailing rate for similar services in the community in
which the attorney, agent or witness ordinarily performs services;
(3) The time actually spent in the representation of the applicant;
(4) The time reasonably spent in light of the difficulty or
complexity of the issues in the proceeding; and
(5) Such other factors as may bear on the value of the services
provided.
(d) The reasonable cost of any study, analysis, engineering report,
test, project or similar matter prepared on behalf of a party may be
awarded, to the extent that the charge for the service does not exceed
the prevailing rate for similar services, and the study or other matter
was necessary for preparation of the applicant's case.
(47 FR 610, Jan. 6, 1982, as amended at 54 FR 53051, Dec. 27, 1989)
17 CFR 201.37 Delegations of authority.
(a) The Commission may by order delegate authority to take final
action on matters pertaining to the Equal Access to Justice Act in
particular cases.
(b) Unless the Commission shall order otherwise, applications for
awards of fees and expenses made pursuant to this subject shall be
assigned by the Chief Administrative Law Judge to an administrative law
judge for determination.
(54 FR 53051, Dec. 27, 1989)
17 CFR 201.41 Contents of application.
(a) An application for an award of fees and expenses under the Act
shall identify the applicant, the proceeding for which an award is
sought and contain the information required in this subpart. The
application shall show that the applicant has prevailed and specify the
position(s) of the opposing Office or Division in the proceeding that
the applicant alleges was not substantially justified. Unless the
applicant is an individual, the application shall also state the number
of employees of the applicant and describe briefly the type and purpose
of its organization or business.
(b) The application shall also include a statement that the
applicant's net worth does not exceed $2 million (if an individual) or
$7 million (for all other applicants, including their affiliates).
However, an applicant may omit this statement if:
(1) It attaches a copy of a ruling by the Internal Revenue Service
that it qualifies as an organization described in section 501(c)(3) of
the Internal Revenue Code (26 U.S.C. 501(c)(3)) or, in the case of a
tax-exempt organization not required to obtain a ruling from the
Internal Revenue Service on its exempt status, a statement that
describes the basis for the applicant's belief that it qualifies under
such section; or
(2) It states that it is a cooperative association as defined in
section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)).
(c) The application shall state the amount of fees and expenses for
which an award is sought.
(d) The application may also include any other matters that the
applicant wishes the Commission to consider in determining whether and
in what amount an award should be made.
(e) The application shall be signed by the applicant or an authorized
officer or attorney of the applicant. It shall also contain or be
accompanied by a written verification under oath or under penalty of
perjury that the information provided in the application is true and
correct.
(47 FR 610, Jan. 6, 1982, as amended at 54 FR 53051, Dec. 27, 1989)
17 CFR 201.42 Net worth exhibit.
(a) Each applicant, except a qualified tax-exempt organization or
cooperative association, must provide with its application a detailed
exhibit showing the net worth of the applicant and any affiliates (as
defined in 201.34(f) of this part) when the proceeding was initiated.
The exhibit may be in any form convenient to the applicant that provides
full disclosure of the applicant's and its affiliates' assets and
liabilities and is sufficient to determine whether the applicant
qualifies under the standards in this subpart. The administrative law
judge or the Commission may require an applicant to file additional
information to determine its eligibility for an award.
(b) Ordinarily, the net worth exhibit will be included in the public
record of the proceeding. However, an applicant that objects to public
disclosure of information in any portion of the exhibit and believes
there are legal grounds for withholding it from disclosure may submit
that exhibit in accordance with 17 CFR 201.25.
17 CFR 201.43 Documentation of fees and expenses.
The application shall be accompanied by full documentation of the
fees and expenses, including the cost of any study, analysis,
engineering report, test, project or similar matter, for which an award
is sought. A separate itemized statement shall be submitted for each
professional firm or individual whose services are covered by the
application, showing the hours spent in connection with the proceeding
by each individual, a description of the specific services performed,
the rate at which each fee has been computed, any expenses for which
reimbursement is sought, the total amount claimed, and the total amount
paid or payable by the applicant or by any other person or entity for
the services provided. The applicant may be required to provide
vouchers, receipts, or other substantiation for any fees or expenses
claimed.
17 CFR 201.44 When an application may be filed.
(a) An application may be filed whenever the applicant has prevailed
in the proceeding or in a significant and discrete substantive portion
of the proceeding, but in no case later than 30 days after the
Commission's final disposition of the proceeding.
(b) For purposes of this rule, final disposition means the date on
which a decision or order disposing of the merits of the proceeding or
any other complete resolution of the proceeding, such as a settlement or
voluntary dismissal, becomes final and unappealable, both within the
Commission and to the courts.
(c) If review or reconsideration is sought or taken of a decision as
to which an applicant believes it has prevailed, proceedings for the
award of fees shall be stayed pending final disposition of the
underlying controversy.
(47 FR 610, Jan. 6, 1982, as amended at 54 FR 53052, Dec. 27, 1989)
17 CFR 201.51 Filing and service of documents.
Any application for an award or other document related to an
application shall be filed and served in the same manner as other papers
in proceedings under the Commission's Rules of Practice. In addition, a
copy of each application for fees and expenses shall be served on the
General Counsel of the Commission.
17 CFR 201.52 Answer to application.
(a) Within 30 days after service of an application, counsel
representing the Office or Division of the Commission may file an answer
to the application. Unless the Office or Division of the Commission
counsel requests an extension of time for filing or files a statement of
intent to negotiate under paragraph (b) of this section, failure to file
an answer within the 30-day period may be treated as a consent to the
award requested.
(b) If counsel for the Office or Division of the Commission and the
applicant believe that the issues in the fee application can be settled,
they may jointly file a statement of their intent to negotiate a
settlement. The filing of this statement shall extend the time for
filing an answer for an additional 30 days, and further extensions may
be granted upon request by agency counsel and the applicant.
(c) The answer shall explain any objections to the award requested
and identify the facts relied on in support of that position. If the
answer is based on any alleged facts not already in the record of the
proceeding, it shall include supporting affidavits or a request for
further proceedings under 201.55.
17 CFR 201.53 Reply.
Within 15 days after service of an answer, the applicant may file a
reply. If the reply is based on any alleged facts not already in the
record of the proceeding, the applicant shall include with the reply
either supporting affidavits or a request for further proceedings under
201.55.
17 CFR 201.54 Settlement.
The applicant and counsel for the Office or Division of the
Commission may agree on a proposed settlement of the award before final
action on the application, either in connection with a settlement of the
underlying proceeding or after the underlying proceeding has been
concluded, in accordance with the Commission's standard settlement
procedure. See 17 CFR 201.8. If a prevailing party and counsel for the
Office or Division of the Commission agree on a proposed settlement of
an award before an application has been filed, the application shall be
filed with the proposed settlement. If a proposed settlement provides
that each side shall bear its own expenses, and the settlement is
accepted, no application may be filed.
(54 FR 53052, Dec. 27, 1989)
17 CFR 201.55 Further proceedings.
(a) Ordinarily, the determination of an award will be made on the
basis of the written record. However, on request of either the
applicant or counsel for the Office or Division of the Commission, or on
his or her own initiative, the administrative law judge may order
further proceedings, such as an informal conference, oral argument,
additional written submissions or, as to issues other than substantial
justification (such as the applicant's eligibility or substantiation of
fees and expenses) an evidentiary hearing. The administrative law judge
may order all proceedings that are otherwise available under Rule 8(d)
of the Commission's Rules of Practice. Such further proceedings shall
be held only when necessary for full and fair resolution of the issues
arising from the application, and shall be conducted as promptly as
possible. Whether or not the Commission's position was substantially
justified shall be determined on the basis of the administrative record,
as a whole, which is made in the adversary adjudication for which fees
and other expenses are sought.
(b) A request for further proceedings under this section shall
specifically identify the information sought or the disputed issues and
shall explain why the additional proceedings are necessary to resolve
the issues.
(47 FR 610, Jan. 6, 1982, as amended at 54 FR 53052, Dec. 27, 1989)
17 CFR 201.56 Decision.
The administrative law judge shall issue an initial decision on the
application promptly after completion of proceedings on the application.
The decision shall include written findings and conclusions on the
applicant's eligibility and status as a prevailing party, and an
explanation of the reasons for any difference between the amount
requested and the amount awarded. The decision shall also include, if
at issue, findings on whether the Commission's position was
substantially justified, whether the applicant unduly protracted the
proceedings, or whether special circumstances make an award unjust.
17 CFR 201.57 Commission review.
In accordance with the procedures set forth in 17 CFR 201.17, either
the applicant or counsel for the Office or Division of the Commission
may seek review of the initial decision on the fee application, or the
Commission may decide to review the decision on its own initiative. If
neither the applicant nor counsel for the Division or Office of the
Commission seeks review and the Commission does not take review on its
own initiative, the initial decision on the application shall become a
final decision of the Commission 30 days after it is issued. Whether to
review a decision is a matter within the discretion of the Commission.
If review is taken, the Commission will issue a final decision on the
application or remand the application to the administrative law judge
for further proceedings.
17 CFR 201.58 Judicial review.
Judicial review of final Commission decisions on awards may be sought
as provided in 5 U.S.C. 504(c)(2).
17 CFR 201.59 Payment of award.
An applicant seeking payment of an award shall submit to the
Comptroller of the Commission a copy of the Commission's final decision
granting the award, accompanied by a sworn statement that the applicant
will not seek review of the decision in the United States courts. The
Commission will pay the amount awarded to the applicant as authorized by
law, unless judicial review of the award has been sought by the
applicant.
(54 FR 53052, Dec. 27, 1989)
17 CFR 201.60 Appendix -- Adversary adjudications conducted by the
Commission under 5 U.S.C. 554.
Section 11A(b)(6), 15 U.S.C. 78k-1(b)(6) (suspension or revocation of
registration, or censure of a securities information processor).
Section 12(j), 15 U.S.C. 78l(j) (suspension of effective date or
revocation of registration of a security).
Section 15(b)(4), 15 U.S.C. 78o(b)(4) (suspension or revocation of
registration, or censure of a broker or dealer).
Section 15(b)(6), 15 U.S.C. 78o(b)(6) (censure, suspension or bar of
an associate of a broker or dealer).
Section 15(B)(c)(2), 15 U.S.C. 78o-4(c)(2) (suspension or revocation
of registration, or censure of a municipal securities dealer).
Section 15(B)(c)(4), 15 U.S.C. 78o-4(c)(4) (censure, suspension or
bar of an associate of a municipal securities dealer).
Section 15B(c)(8), 15 U.S.C. 78o-4(c)(8) (removal or censure of
member of the Municipal Securities Rulemaking Board).
Section 17A(C)(3)(A), 15 U.S.C. 78q-1(c)(3)(A) (denial of
registration or postponement of effective date of registration of a
transfer agent).
Section 197h(1), 15 U.S.C. 78s(h)(1) (suspension or revocation of
registration, or censure of a self-regulatory organization).
Section 19(h)(2), 15 U.S.C. 78s(h)(2) (suspension or expulsion of a
member of a self-regulatory organization).
Section 19(h)(3), 15 U.S.C. 78s(h)(3) (suspension or bar of a person
from being associated with a national securities exchange or registered
securities association).
Section 19(h)(4), 15 U.S.C. 78s(h)(4) (removal or censure of a
director or officer of a self-regulatory organization).
Section 203(e), 15 U.S.C. 80b-3(e) (suspension or revocation of
registration, or censure of an investment adviser).
Section 203(f), 15 U.S.C. 80b-3(f) (censure, suspension or bar of an
associate of an investment adviser).
17 CFR 201.60 Subpart C -- Procedures Pertaining to the Payment of
Bounties Pursuant to Subsection 21A(e) of the Securities Exchange Act of
1934
Authority: Sec. 21A, 102 Stat. 4679, sec. 23, 48 Stat. 901, as
amended, 15 U.S.C. 78u-1, 78w.
Source: 54 FR 28799, July 10, 1989, unless otherwise noted.
17 CFR 201.61 Scope of subpart.
Section 21A of the Securities Exchange Act of 1934 authorizes the
courts to impose civil penalties for certain violations of that Act.
Subsection 21A(e) permits the Commission to award bounties to persons
who provide information that leads to the imposition of such penalties.
Any such determination, including whether, to whom, or in what amount to
make payments, is in the sole discretion of the Commission. This
subpart sets forth procedures regarding applications for the award of
bounties pursuant to subsection 21A(e). Nothing in this subpart shall
be deemed to limit the discretion of the Commission with respect to
determinations under subsection 21A(e) or to subject any such
determination to judicial review.
17 CFR 201.62 Application required.
No person shall be eligible for the payment of a bounty under
subsection 21A(e) of the Securities Exchange Act of 1934 unless such
person has filed a written application that meets the requirements of
this subpart and, upon request, provides such other information as the
Commission or its staff deems relevant to the application.
17 CFR 201.63 Time and place of filing.
Each application pursuant to this subpart and each amendment thereto
must be filed within one hundred and eighty days after the entry of the
court order requiring the payment of the penalty that is subject to the
application. Such applications and amendments shall be addressed to:
Office of the Secretary, Securities and Exchange Commission, 450 Fifth
Street NW., Washington, DC 20549.
17 CFR 201.64 Form of application and information required.
Each application pursuant to this subpart shall be identified as an
Application for Award of a Bounty and shall contain a detailed statement
of the information provided by the applicant that the applicant believes
led or may lead to the imposition of a penalty. Except as provided by
Rule 65 of this subpart, each application shall state the identity and
mailing address of, and be signed by, the applicant. When the
application is not the means by which the applicant initially provides
such information, the application shall contain: the dates and times
upon which, and the means by which, the information was provided; the
identity of the Commission staff members to whom the information was
provided; and, if the information was provided anonymously, sufficient
further information to confirm that the person filing the application is
the same person who provided the information to the Commission.
17 CFR 201.65 Identity and signature.
Applications pursuant to this subpart may omit the identity, mailing
address, and signature of the applicant; provided, that such identity,
mailing address and signature are submitted by an amendment to the
application. Any such amendment must be filed within one hundred and
eighty days after the entry of the court order requiring the payment of
the penalty that is subject to the application.
17 CFR 201.66 Notice to applicants.
The Commission will notify each person who files an application that
meets the requirements of this subpart, at the address specified in such
application, of the Commission's determination with respect to such
person's application. Nothing in this subpart shall be deemed to
entitle any person to any other notice from the Commission or its staff.
17 CFR 201.67 Applications by legal guardians.
An application pursuant to this subpart may be filed by an executor,
administrator, or other legal representative of a person who provides
information that may be subject to a bounty payment, or by the parent or
guardian of such a person if that person is a minor. Certified copies
of the letters testamentary, letters of administration, or other similar
evidence showing the authority of the legal representative to file the
application must be annexed to the application.
17 CFR 201.68 No promises of payment.
No person is authorized under this subpart to make any offer or
promise, or otherwise to bind the Commission with respect to the payment
of any bounty or the amount thereof.
17 CFR 201.68 PART 202 -- INFORMAL AND OTHER PROCEDURES
Sec.
202.1 General.
202.2 Pre-filing assistance and interpretative advice.
202.3 Processing of filings.
202.3a Instructions for filing fees.
202.4 Facilitating administrative hearings.
202.5 Enforcement activities.
202.6 Adoption, revision and rescission of rules and regulations of
general application.
202.7 Submittals.
202.8 Summary suspensions.
Authority: Secs. 19, 23, 48 Stat. 85, 901, as amended, sec. 20, 49
Stat. 833, sec. 319, 53 Stat. 1173, secs. 38, 211, 54 Stat. 841,
855; 15 U.S.C. 77s, 78w, 79t, 77sss, 80a-37, 80b-11, unless otherwise
noted.
Section 202.5 is also issued under sec. 20, 48 Stat. 86, sec. 21,
48 Stat. 899, sec. 18, 49 Stat. 831, sec. 321, 53 Stat. 1174, sec.
1, 76 Stat. 394, 15 U.S.C. 77t, 78u, 79r, 77uuu, 80a-4l, 80b-9, 78d-1.
Source: 25 FR 6736, July 15, 1960, unless otherwise noted.
17 CFR 202.1 General.
(a) The statutes administered by the Commission provide generally (1)
for the filing with it of certain statements, such as registration
statements, periodic and ownership reports, and proxy solicitation
material, and for the filing of certain plans of reorganization,
applications and declarations seeking Commission approvals; (2) for
Commission determination through formal procedures of matters initiated
by private parties or by the Commission; (3) for the investigation and
examination of persons and records where necessary to carry out the
purposes of the statutes and for enforcement of statutory provisions;
and (4) for the adoption of rules and regulations where necessary to
effectuate the purposes of the statutes.
(b) In addition to the Commission's rules of practice set forth in
part 201 of this chapter, the Commission has promulgated rules and
regulations pursuant to the several statutes it administers (parts 230,
240, 250, 260, 270 and 275 of this chapter). These parts contain
substantive provisions and include as well numerous provisions detailing
the procedure for meeting specific standards embodied in the statutes.
The Commission's rules and regulations under each of the statutes are
available in pamphlet form upon request to the Superintendent of
Documents, U.S. Government Printing Office, Washington, DC 20402.
(c) The statutes and the published rules, regulations and forms
thereunder prescribe the course and method of formal procedures to be
followed in Commission proceedings. These are supplemented where
feasible by certain informal procedures designed to aid the public and
facilitate the execution of the Commission's functions. There follows a
brief description of procedures generally followed by the Commission
which have not been formalized in rules.
(d) The informal procedures of the Commission are largely concerned
with the rendering of advice and assistance by the Commission's staff to
members of the public dealing with the Commission. While opinions
expressed by members of the staff do not constitute an official
expression of the Commission's views, they represent the views of
persons who are continuously working with the provisions of the statute
involved. And any statement by the director, associate director,
assistant director, chief accountant, chief counsel, or chief financial
analyst of a division can be relied upon as representing the views of
that division. In certain instances an informal statement of the views
of the Commission may be obtained. The staff, upon request or on its
own motion, will generally present questions to the Commission which
involve matters of substantial importance and where the issues are novel
or highly complex, although the granting of a request for an informal
statement by the Commission is entirely within its discretion.
17 CFR 202.2 Pre-filing assistance and interpretative advice.
The staff of the Commission renders interpretative and advisory
assistance to members of the general public, prospective registrants,
applicants and declarants. For example, persons having a question
regarding the availability of an exemption may secure informal
administrative interpretations of the applicable statute or rule as they
relate to the particular facts and circumstances presented. Similarly,
persons contemplating filings with the Commission may receive advice of
a general nature as to the preparation thereof, including information as
to the forms to be used and the scope of the items contained in the
forms. Inquiries may be directed to an appropriate officer of the
Commission's staff. In addition, informal discussions with members of
the staff may be arranged whenever feasible, at the Commission's central
office or, except in connection with matters under the Public Utility
Holding Company Act of 1935 and certain matters under the Investment
Company Act of 1940, at one of its regional offices.
17 CFR 202.3 Processing of filings.
(a) Registration statements, proxy statements, letters of
notification, periodic reports, applications for qualification of
indentures, and similar documents filed with the Commission under the
Securities Act of 1933 and the Trust Indenture Act of 1939, and certain
filings under the Securities Exchange Act of 1934 and the Public Utility
Holding Company Act of 1935 are routed to the Division of Corporation
Finance, which passes initially on the adequacy of disclosure and
recommends the initial action to be taken. If the filing appears to
afford inadequate disclosure, as for example through omission of
material information or through violation of accepted accounting
principles and practices, the usual practice is to bring the deficiency
to the attention of the person who filed the document by letter from the
Assistant Director assigned supervision over the particular filing, and
to afford a reasonable opportunity to discuss the matter and make the
necessary corrections. This informal procedure is not generally
employed when the deficiencies appear to stem from careless disregard of
the statutes and rules or a deliberate attempt to conceal or mislead or
where the Commission deems formal proceedings necessary in the public
interest. Where it appears that the filing affords adequate disclosure,
acceleration of its effectiveness when appropriate normally will be
granted. A similar procedure is followed with respect to filings under
the Investment Company Act of 1940 and certain filings relating to
investment companies under the Securities Act of 1933, the Securities
Exchange Act of 1934, and the Trust Indenture Act of 1939, which are
routed to the Division of Investment Management, and filings under the
Public Utility Holding Company Act of 1935 which are routed to the
Division of Corporate Regulation. A similar procedure is also followed
in the Commission's Regional Offices with respect to registration
statements on Form S-18 (17 CFR 239.28) and related filings under the
Trust Indenture Act of 1939.
(b) Applications for registration as brokers, dealers, investment
advisers, municipal securities dealers and transfer agents are submitted
to the Office of Applications and Reports Services where they are
examined to determine whether all necessary information has been
supplied and whether all required financial statements and other
documents have been furnished in proper form. Defective applications
may be returned with a request for correction or held until corrected
before being accepted as a filing. The files of the Commission and
other sources of information are considered to determine whether any
person connected with the applicant appears to have engaged in
activities which would warrant commencement of proceedings on the
question of denial of registration. The staff confers with applicants
and makes suggestions in appropriate cases for amendments and
supplemental information. Where it appears appropriate in the public
interest and where a basis therefor exists, denial proceedings may be
instituted. Within 45 days of the date of the filing of a
broker-dealer, investment adviser or municipal securities dealer
application (or within such longer period as to which the applicant
consents), the Commission shall (1) by order grant registration, or (2)
institute proceedings to determine whether registration should be
denied. An application for registration as a transfer agent shall
become effective within 30 days after receipt of the application (or
within such shorter period as the Commission may determine). The Office
of Applications and Reports Services is also responsible for the
processing and substantive examination of statements of beneficial
ownership of securities and changes in such ownership filed under the
Securities Exchange Act of 1934, the Public Utility Holding Company Act
of 1935, and the Investment Company Act of 1940, and for the examination
of reports filed pursuant to 230.144 of this chapter.
(15 U.S.C. 77a et seq., as amended by Pub. L. 94-29 (June 4, 1975);
11 U.S.C. 901, 1109(a))
(41 FR 44699, Oct. 12, 1976, as amended at 44 FR 21567, Apr. 10,
1979; 49 FR 12686, Mar. 30, 1984)
17 CFR 202.3a Instructions for filing fees.
Payment of fees required by the following rules shall be made
according to the directions listed in this part: 230.111 (17 CFR
230.111), 240.0-9 (17 CFR 240.0-9), 250.107 (17 CFR 250.107), 270.0-8
(17 CFR 270.0-8) and 275.203-3(b) (17 CFR 275.203-3(b)). Effective
August 15, 1984, all such fees may be transmitted to a U.S. Treasury
designated lockbox in Pittsburgh, Pennsylvania, by either mail or wire
transfer; or may be transmitted directly to the Commission at 450 Fifth
Street NW., Washington, DC 20549. If a filer selects the lockbox method
of transmitting fees, payments in the form of personal check, money
order, certified check, cashier's check, or wire transfer will be
considered received by the Commission at the time of their receipt by
the lockbox depository. Personal checks will continue to be
unacceptable for filings under the Securities Act of 1933. The
following instructions are for lockbox transmittals only.
(a) Mail. Fees transmitted by mail must be addressed to the
Securities and Exchange Commission, Post Office Box 360055M, Pittsburgh,
PA 15251. Checks and money orders are to be made payable to the
Securities and Exchange Commission. Checks must contain the following
information for each individual filing (preferably on the front of the
check): Filing company's name, IRS identification number, form type,
amendment (if applicable), and Commission file number, if known. Filers
should include the specific payment being sent for each filing if a
check contains payments for multiple filings. Each response should be
clearly labeled to indicate the data element to which it refers, e.g.,
''IRS : 53-0040540.''
(b) Wire. Filers who wish to wire filing fee payments to the lockbox
must contact their respective banks to determine the specific procedures
utilized by each bank for wire transfer of funds. In addition, filers
must inform their banks that the wire is to be sent to the Mellon Bank,
American Banker's Association number 043000261, that the Securities and
Exchange Commission account number at Mellon is 910-8739, and that the
Commission is the recipient. The wire transfer must contain the
following data elements (clearly identified) for each individual filing:
filing company's name, dollar amount, IRS identification number, form
type, amendment (if applicable), and Commission file number, if known.
Filers should include the specific payment being sent for each filing if
a wire transfer contains payments for multiple filings. Wire transfers
will be accepted from 9 a.m. to 3 p.m. weekdays (excluding holidays).
(51 FR 40791, Nov. 10, 1986; 52 FR 33796, Sept. 4, 1987)
Effective Date Note: At 51 FR 40791, Nov. 10, 1986, 202.3a was
added, effective November 10, 1986 through September 1, 1987. At 52 FR
33796, Sept. 4, 1987, a document was published extending the
effectiveness to September 1, 1988. At 53 FR 32891, Sept. 6, 1988, a
document was published extending the effectiveness to September 1, 1990.
At 55 FR 34011, Aug. 21, 1990, a document was published further
extending the effectiveness to September 1, 1992.
17 CFR 202.4 Facilitating administrative hearings.
(a) Applications, declarations, and other requests involving formal
Commission action after opportunity for hearing are scrutinized by the
appropriate division for conformance with applicable statutory standards
and Commission rules and generally the filing party is advised of
deficiencies. Prior to passing upon applications and declarations the
Commission receives the views of all interested persons at public
hearings whenever appropriate; hence, any applicant or declarant
seeking Commission approval of proposed transactions by a particular
time should file his application or declaration in time to allow for the
presentation and consideration of such views.
(b) After the staff has had an opportunity to study an application or
declaration, interested persons may informally discuss the problems
therein raised to the extent that time and the nature of the case permit
(e.g., consideration is usually given to whether the proceeding is
contested and if so to the nature of the contest). In such event, the
staff will, to the extent feasible, advise as to the nature of the
issues raised by the filing, the necessity for any amendments to the
documents filed, the type of evidence it believes should be presented at
the hearing and, in some instances, the nature, form, and contents of
documents to be submitted as formal exhibits. The staff will, in
addition, generally advise as to Commission policy in past cases which
dealt with the same subject matter as the filing under consideration.
(c) During the course of the hearings, the staff is generally
available for informal discussions to reconcile bona fide divergent
views not only between itself and other persons interested in the
proceedings, but among all interested persons; and, when circumstances
permit, an attempt is made to narrow, if possible, the issues to be
considered at the formal hearing.
(d) In some instances the Commission in the order accompanying its
findings and opinion reserves jurisdiction over certain matters relating
to the proceeding, such as payment of fees and expenses, accounting
entries, terms and conditions relating to securities to be issued, and
other matters. In such cases, upon receipt of satisfactory information
and data the Commission considers whether further hearing is required
before releasing jurisdiction.
17 CFR 202.5 Enforcement activities.
(a) Where, from complaints received from members of the public,
communications from Federal or State agencies, examination of filings
made with the Commission, or otherwise, it appears that there may be
violation of the acts administered by the Commission or the rules or
regulations thereunder, a preliminary investigation is generally made.
In such preliminary investigation no process is issued or testimony
compelled. The Commission may, in its discretion, make such formal
investigations and authorize the use of process as it deems necessary to
determine whether any person has violated, is violating, or is about to
violate any provision of the federal securities laws or the rules of a
self-regulatory organization of which the person is a member or
participant. Unless otherwise ordered by the Commission, the
investigation or examination is non-public and the reports thereon are
for staff and Commission use only.
(b) After investigation or otherwise the Commission may in its
discretion take one or more of the following actions: Institution of
administrative proceedings looking to the imposition of remedial
sanctions, initiation of injunctive proceedings in the courts, and, in
the case of a willful violation, reference of the matter to the
Department of Justice for criminal prosecution. The Commission may
also, on some occasions, refer the matter to, or grant requests for
access to its files made by, domestic and foreign governmental
authorities or foreign securities authorities, self-regulatory
organizations such as stock exchanges or the National Association of
Securities Dealers, Inc., and other persons or entities.
(c) Persons who become involved in preliminary or formal
investigations may, on their own initiative, submit a written statement
to the Commission setting forth their interests and position in regard
to the subject matter of the investigation. Upon request, the staff, in
its discretion, may advise such persons of the general nature of the
investigation, including the indicated violations as they pertain to
them, and the amount of time that may be available for preparing and
submitting a statement prior to the presentation of a staff
recommendation to the Commission for the commencement of an
administrative or injunction proceeding. Submissions by interested
persons should be forwarded to the appropriate Division Director or
Regional Administrator with a copy to the staff members conducting the
investigation and should be clearly referenced to the specific
investigation to which they relate. In the event a recommendation for
the commencement of an enforcement proceeding is presented by the staff,
any submissions by interested persons will be forwarded to the
Commission in conjunction with the staff memorandum.
(d) In instances where the staff has concluded its investigation of a
particular matter and has determined that it will not recommend the
commencement of an enforcement proceeding against a person, the staff,
in its discretion, may advise the party that its formal investigation
has been terminated. Such advice if given must in no way be construed
as indicating that the party has been exonerated or that no action may
ultimately result from the staff's investigation of the particular
matter.
(e) The Commission has adopted the policy that in any civil lawsuit
brought by it or in any administrative proceeding of an accusatory
nature pending before it, it is important to avoid creating, or
permitting to be created, an impression that a decree is being entered
or a sanction imposed, when the conduct alleged did not, in fact, occur.
Accordingly, it hereby announces its policy not to permit a defendant
or respondent to consent to a judgment or order that imposes a sanction
while denying the allegations in the complaint or order for proceedings.
In this regard, the Commission believes that a refusal to admit the
allegations is equivalent to a denial, unless the defendant or
respondent states that he neither admits nor denies the allegations.
(f) In the course of the Commission's investigations, civil lawsuits,
and administrative proceedings, the staff, with appropriate
authorization, may discuss with persons involved the disposition of such
matters by consent, by settlement, or in some other manner. It is the
policy of the Commission, however, that the disposition of any such
matter may not, expressly or impliedly, extend to any criminal charges
that have been, or may be, brought against any such person or any
recommendation with respect thereto. Accordingly, any person involved
in an enforcement matter before the Commission who consents, or agrees
to consent, to any judgment or order does so solely for the purpose of
resolving the claims against him in that investigative, civil, or
administrative matter and not for the purpose of resolving any criminal
charges that have been, or might be, brought against him. This policy
reflects the fact that neither the Commission nor its staff has the
authority or responsibility for instituting, conducting, settling, or
otherwise disposing of criminal proceedings. That authority and
responsibility are vested in the Attorney General and representatives of
the Department of Justice.
(25 FR 6736, July 15, 1960, as amended at 37 FR 23829, Nov. 9, 1972;
37 FR 25224, Nov. 29, 1972; 44 FR 50835, Aug. 30, 1979; 46 FR 47532,
Sept. 29, 1981; 47 FR 26822, June 22, 1982; 54 FR 24332, June 7, 1989)
17 CFR 202.6 Adoption, revision, and rescission of rules and
regulations of general application.
(a) The procedure followed by the Commission in connection with the
adoption, revision, and rescission of rules of general application
necessarily varies in accordance with the nature of the rule, the extent
of public interest therein, and the necessity for speed in its adoption.
Rules relating to Commission organization, procedure and management,
for example, are generally adopted by the Commission without affording
public discussion thereof. On the other hand, in the adoption of
substantive rules materially affecting an industry or a segment of the
public, such as accounting rules, every feasible effort is made in
advance of adoption to receive the views of persons to be affected. In
such cases, proposals for the adoption, revision, or rescission of rules
are initiated either by the Commission or by members of the public, and
to the extent practicable, the practices set forth in paragraph (b) of
this section are observed.
(b) After preliminary consideration by the Commission a draft of the
proposed rule is published in the Federal Register and mailed to
interested persons (e.g., other interested regulatory bodies, principal
registrants or persons to be affected, stock exchanges, professional
societies and leading authorities on the subject concerned and other
persons requesting such draft) for comments. Unless accorded
confidential treatment pursuant to statute or rule of the Commission,
written comments filed with the Commission on or before the closing date
for comments become a part of the public record upon the proposed rule.
The Commission, in its discretion, may accept and include in the public
record written comments received by the Commission after the closing
date.
(c) Following analysis of comments received, the rule may be adopted
in the form published or in a revised form in the light of such
comments. In some cases, a revised draft is prepared and published and,
where appropriate, an oral hearing may be held before final action upon
the proposal. Any interested person may appear at the hearing and/or
may submit written comment for consideration in accordance with the
Commission's notice of the rulemaking procedure to be followed. The
rule in the form in which it is adopted by the Commission is publicly
released and is published in the Federal Register.
(Sec. 19(a), 48 Stat. 908; sec. 23(a), 48 Stat. 901; sec. 20(a), 49
Stat. 833; sec. 319(a), 53 Stat. 1173; sec. 38(a), 54 Stat. 841; sec.
211(a), 54 Stat. 855; (15 U.S.C. 77s(a), 78w(a), 78t(a), 77sss(a),
80a-37(a), 80b-11(a))
(25 FR 6736, July 15, 1960, as amended at 44 FR 35208, June 19, 1979)
17 CFR 202.7 Submittals.
All required statements, reports, applications, etc. must be filed
with the principal office of the Commission except letters of
notification filed pursuant to 230.251 et seq. of this chapter,
notices of proposed sale of securities pursuant to 230.237 of this
chapter, and reports by issuer of sales pursuant to 230.240 of this
chapter, under the Securities Act of 1933. Reports by exchange members,
brokers and dealers required by 240.17a-5 of this chapter under the
Securities Exchange Act of 1934 must be filed with the appropriate
regional office as provided in 230.255(a) of this chapter under the
Securities Act of 1933, and with the principal office of the Commission
and the appropriate regional office as provided under 240.17a-5(a) et
seq. of this chapter under the Securities Exchange Act of 1934.
(41 FR 44699, Oct. 12, 1976)
17 CFR 202.8 Summary suspensions.
(a) Any person adversely affected by a summary suspension pursuant to
section 12(k) of the Securities Exchange Act may obtain prompt
consideration by the Commission of the reasons such person believes the
continued suspension is not in the public interest or is not required
for the protection of investors. Section 12(k) authorizes the
Commission summarily to suspend trading in securities for 10-day
periods, if in its opinion the public interest or the protection of
investors so requires.
(b) The usual purpose of a suspension is to alert the investing
public to the fact that there is insufficient public information about
the issuer upon which an informed investment judgment can be made or
that the market for the securities may be reacting to manipulative
forces or deceptive practices. Consequently the primary issues normally
to be considered by the Commission in determining whether or not 10-day
suspensions should be instituted or renewed are whether or not there is
sufficient public information upon which to base an informed investment
decision or whether the market for the security appears to reflect
manipulative or deceptive activities.
(c) If any person adversely affected by such suspension or who would
be adversely affected by the renewal of the suspension desires to show
that such suspension is not necessary in the public interest or for the
protection of investors, he may petition the Commission that it not
renew the suspension. Such petition, which may be in the form of a
letter or other statement, should set forth with particularity the facts
upon which petitioner relies and should be sworn to by the petitioner or
an authorized officer of the petitioner.
(d) If the petitioner so requests in the petition, and if upon
examination of the petition the Commission is of the opinion that there
is a genuine issue as to any material fact, the Commission will provide
an opportunity for prompt presentation of all material facts. If no
such opportunity is requested in the petition or if in the opinion of
the Commission there is no genuine issue as to any material fact, the
Commission will determine the issue upon the basis of the information
contained in the petition and any other relevant facts known to the
Commission.
(e) The Commission will not be disposed to grant such petition if the
petitioner or anyone affiliated with the petitioner shall fail to
cooperate in supplying relevant information to the Commission or shall
in any way obstruct any inquiry by the Commission into the relevant
facts.
(41 FR 18290, May 3, 1976)
17 CFR 202.8 PART 203 -- RULES RELATING TO INVESTIGATIONS
17 CFR 202.8 Subpart A -- In General
Sec.
203.1 Application of the rules of this part.
203.2 Information obtained in investigations and examinations.
203.3 Suspension and disbarment.
17 CFR 202.8 Subpart B -- Formal Investigative Proceedings
203.4 Applicability of 203.4 through 203.8.
203.5 Non-public formal investigative proceedings.
203.6 Transcripts.
203.7 Rights of witnesses.
203.8 Service of subpoenas.
Authority: Secs. 19, 23, 48 Stat. 85, 901, as amended, sec. 20, 49
Stat. 833, sec. 319, 53 Stat. 1173, secs. 38, 211, 54 Stat. 841,
855 as amended; 15 U.S.C. 77s, 78w, 79t, 77sss, 80a-37, 80b-11, unless
otherwise noted.
Source: 29 FR 3620, Mar. 21, 1964, unless otherwise noted.
17 CFR 202.8 Subpart A -- In General
17 CFR 203.1 Application of the rules of this part.
The rules of this part apply only to investigations conducted by the
Commission. They do not apply to adjudicative or rulemaking
proceedings.
17 CFR 203.2 Information obtained in investigations and examinations.
Information or documents obtained by the Commission in the course of
any investigation or examination, unless made a matter of public record,
shall be deemed non-public, but the Commission approves the practice
whereby officials of the Division of Enforcement at the level of
Assistant Director or higher, and officials in Regional Offices at the
level of Assistant Regional Administrator or higher, may engage in, and
may authorize members of the Commission's staff to engage in,
discussions with representatives of domestic and foreign governmental
authorities, foreign securities authorities, self-regulatory
organizations, receivers, special counsels, and other similar persons
appointed in Commission litigation, the Securities Investor Protection
Corporation, trustees and counsel for trustees appointed pursuant to
section 5(b) of the Securities Investor Protection Act, and trustees in
bankruptcy, concerning information obtained in individual
investigations, including examinations and formal investigations
conducted pursuant to Commission order.
(54 FR 24333, June 7, 1989)
17 CFR 203.3 Suspension and disbarment.
The provisions of 201.2(e) of this chapter (Rule 2(e) of the
Commission's rules of practice) are hereby made specifically applicable
to all investigations.
17 CFR 203.3 Subpart B -- Formal Investigative Proceedings
17 CFR 203.4 Applicability of 203.4 through 203.8.
(a) Sections 203.4 through 203.8 shall be applicable to a witness who
is sworn in a proceeding pursuant to a Commission order for
investigation or examination, such proceeding being hereinafter referred
to as a formal investigative proceeding.
(b) Formal investigative proceedings may be held before the
Commission, before one or more of its members, or before any officer
designated by it for the purpose of taking testimony of witnesses and
received other evidence. The term officer conducting the investigation
shall mean any of the foregoing.
17 CFR 203.5 Non-public formal investigative proceedings.
Unless otherwise ordered by the Commission, all formal investigative
proceedings shall be non-public.
17 CFR 203.6 Transcripts.
Transcripts, if any, of formal investigative proceedings shall be
recorded solely by the official reporter, or by any other person or
means designated by the officer conducting the investigation. A person
who has submitted documentary evidence or testimony in a formal
investigative proceeding shall be entitled, upon written request, to
procure a copy of his documentary evidence or a transcript of his
testimony on payment of the appropriate fees: Provided, however, That
in a nonpublic formal investigative proceeding the Commission may for
good cause deny such request. In any event, any witness, upon proper
identification, shall have the right to inspect the official transcript
of the witness' own testimony.
(15 U.S.C. 78d-1)
(37 FR 25166, Nov. 28, 1972)
17 CFR 203.7 Rights of witnesses.
(a) Any person who is compelled or requested to furnish documentary
evidence or testimony at a formal investigative proceeding shall, upon
request, be shown the Commission's order of investigation. Copies of
formal orders of investigation shall not be furnished, for their
retention, to such persons requesting the same except with the express
approval of officials in the Regional Offices at the level of Assistant
Regional Administrator or higher, or officials in the Division or
Divisions conducting or supervising the investigation at the level of
Assistant Director or higher. Such approval shall not be given unless
the person granting such approval, in his or her discretion, is
satisfied that there exist reasons consistent both with the protection
of privacy of persons involved in the investigation and with the
unimpeded conduct of the investigation.
(b) Any person compelled to appear, or who appears by request or
permission of the Commission, in person at a formal investigative
proceeding may be accompanied, represented and advised by counsel, as
defined in 201.2(b) of this chapter (Rule 2(b) of the Commission's
rules of practice): Provided, however, That all witnesses shall be
sequestered, and unless permitted in the discretion of the officer
conducting the investigation no witness or the counsel accompanying any
such witness shall be permitted to be present during the examination of
any other witness called in such proceeding.
(c) The right to be accompanied, represented and advised by counsel
shall mean the right of a person testifying to have an attorney present
with him during any formal investigative proceeding and to have this
attorney (1) advise such person before, during and after the conclusion
of such examination, (2) question such person briefly at the conclusion
of the examination to clarify any of the answers such person has given,
and (3) make summary notes during such examination solely for the use of
such person.
(d) Unless otherwise ordered by the Commission, in any public formal
investigative proceeding, if the record shall contain implications of
wrongdoing by any person, such person shall have the right to appear on
the record; and in addition to the rights afforded other witnesses
hereby, he shall have a reasonable opportunity of cross-examination and
production of rebuttal testimony or documentary evidence. Reasonable
shall mean permitting persons as full an opportunity to assert their
position as may be granted consistent with administrative efficiency and
with avoidance of undue delay. The determination of reasonableness in
each instance shall be made in the discretion of the officer conducting
the investigation.
(e) The officer conducting the investigation may report to the
Commission any instances where any witness or counsel has been guilty of
dilatory, obstructionist or contumacious conduct during the course of an
investigation or any other instance of violation of these rules. The
Commission will thereupon take such further action as the circumstances
may warrant, including suspension or disbarment of counsel from further
appearance or practice before it, in accordance with 201.2(e) of this
chapter (Rule 2(e) of the Commission's rules of practice), or exclusion
from further participation in the particular investigation.
(29 FR 3620, Mar. 21, 1964, as amended at 52 FR 12148, Apr. 15, 1987)
17 CFR 203.8 Service of subpoenas.
Service of subpoenas issued in formal investigative proceedings shall
be effected in the manner prescribed by 201.14(b) of this chapter (Rule
14(b) of the Commission's rules of practice).
17 CFR 203.8 Pt. 210
17 CFR 203.8 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, AND ENERGY POLICY AND CONSERVATION ACT OF 1975
Sec.
210.1-01 Application of Regulation S-X (17 CFR part 210).
210.1-02 Definitions of terms used in Regulation S-X (17 CFR part
210).
210.2-01 Qualifications of accountants.
210.2-02 Accountants' reports.
210.2-03 Examination of financial statements by foreign government
auditors.
210.2-04 Examination of financial statements of persons other than
the registrant.
210.2-05 Examination of financial statements by more than one
accountant.
210.3-01 Consolidated balance sheets.
210.3-02 Consolidated statements of income and changes in financial
position.
210.3-03 Instructions to income statement requirements.
210.3-04 Changes in other stockholders' equity.
210.3-05 Financial statements of businesses acquired or to be
acquired.
210.3-06 Financial statements covering a period of nine to twelve
months.
210.3-07 -- 210.3-08 (Reserved)
210.3-09 Separate financial statements of subsidiaries not
consolidated and 50 percent or less owned persons.
210.3-10 Financial statements of guarantors and affiliates whose
securities collateralize an issue registered or being registered.
210.3-11 Financial statements of an inactive registrant.
210.3-12 Age of financial statements at effective date of
registration statement or at mailing date of proxy statement.
210.3-13 Filing of other financial statements in certain cases.
210.3-14 Special instructions for real estate operations to be
acquired.
210.3-15 Special provisions as to real estate investment trusts.
210.3-16 Reorganization of registrant.
210.3-17 Financial statements of natural persons.
210.3-18 Special provisions as to registered management investment
companies and companies required to be registered as management
investment companies.
210.3-19 Special provisions as to financial statements for foreign
private issuers.
210.3-20 Currency for financial statements for foreign private
issuers.
210.3-21 Special provisions as to financial statements of companies
engaged in marketing computer software.
210.3A-01 Application of 210.3A-01 to 210.3A-05.
210.3A-02 Consolidated financial statements of the registrant and its
subsidiaries.
210.3A-03 Statement as to principles of consolidation or combination
followed.
210.3A-04 Intercompany items and transactions.
210.3A-05 Special requirements as to public utility holding
companies.
210.4-01 Form, order, and terminology.
210.4-02 Items not material.
210.4-03 Inapplicable captions and omission of unrequired or
inapplicable financial statements.
210.4-04 Omission of substantially identical notes.
210.4-05 Current assets and current liabilities.
210.04-06 Reacquired evidences of indebtedness.
210.4-07 Discount on shares.
210.4-08 General notes to financial statements.
210.4-09 (Reserved)
210.4-10 Financial accounting and reporting for oil and gas producing
activities pursuant to the Federal securities laws and the Energy Policy
and Conservation Act of 1975.
210.5-01 Application of 210.5-01 to 210.5-04.
210.5-02 Balance sheets.
210.5-03 Income statements.
210.5-04 What schedules are to be filed.
210.6-01 Application of 210.6-01 to 210.6-10.
210.6-02 Definition of certain terms.
210.6-03 Special rules of general application to registered
investment companies.
210.6-04 Balance sheets.
210.6-05 Statements of net assets.
210.6-06 Special rules applicable to the balance sheets of issuers of
face-amount certificates.
210.6-07 Statements of operations.
210.6-08 Special provisions applicable to the statements of
operations of issuers of face-amount certificates.
210.6-09 Statements of changes in net assets.
210.6-10 What schedules are to be filed.
210.6A-01 Application of 210.6A-01 to 210.6A-05.
210.6A-02 Special rules applicable to employee stock purchase,
savings and similar plans.
210.6A-03 Statements of financial condition.
210.6A-04 Statements of income and changes in plan equity.
210.6A-05 What schedules are to be filed.
210.7-01 Application of 210.7-01 to 210.7-05.
210.7-02 General requirement.
210.7-03 Balance sheets.
210.7-04 Income statements.
210.7-05 What schedules are to be filed.
210.9-01 Application of 210.9-01 to 210.9-07.
210.9-02 General requirement.
210.9-03 Balance sheets.
210.9-04 Income statements.
210.9-05 Foreign activities.
210.9-06 Condensed financial information of registrant.
210.9-07 Schedules.
210.10-01 Interim financial statements.
210.11-01 Presentation requirements.
210.11-02 Preparation requirements.
210.11-03 Presentation of financial forecast.
210.12-01 Application of 210.12-01 to 210.12-29.
210.12-02 Marketable securities -- other security investments.
210.12-03 Amounts receivable from related parties and underwriters,
promoters, and employees other than related parties.
210.12-04 Condensed financial information of registrant.
210.12-05 Indebtedness of and to related parties -- not current.
210.12-06 Property, plant and equipment.
210.12-07 Accumulated depreciation, depletion and amortization of
property, plant, and equipment.
210.12-08 Guarantees of securities of other issuers.
210.12-09 Valuation and qualifying accounts.
210.12-10 Short-term borrowings.
210.12-11 Supplementary income statement information.
210.12-12 Investments in securities of unaffiliated issuers.
210.12-12A Investments -- securities sold short.
210.12-12B Open option contracts written.
210.12-13 Investments other than securities.
210.12-14 Investments in and advances to affiliates.
210.12-15 Summary of investments -- other than investments in related
parties.
210.12-16 Supplementary insurance information.
210.12-17 Reinsurance.
210.12-18 Supplemental information (for property-casualty insurance
underwriters).
210.12-21 Investments in securities of unaffiliated issuers.
210.12-22 Investments in and advances to affiliates and income
thereon.
210.12-23 Mortgage loans on real estate and interest earned on
mortgages.
210.12-24 Real estate owned and rental income.
210.12-25 Supplementary profit and loss information.
210.12-26 Certificate reserves.
210.12-27 Qualified assets on deposit.
210.12-28 Real estate and accumulated depreciation.
210.12-29 Mortgage loans on real estate.
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77aa(25), 77aa(26),
78l, 78m, 78n, 78o, 78w(a), 79e(a) (b), 79n, 79t, 80a-8, 80a-20, 80a-29,
80a-30, 80a-37, unless otherwise noted.
17 CFR 203.8 Application of Regulation S-X (17 CFR Part 210)
17 CFR 210.1-01 Application of Regulation S-X (17 CFR part 210).
(a) This part (together with the Financial Reporting Releases (part
211 of this chapter)) sets forth the form and content of and
requirements for financial statements required to be filed as a part of:
(1) Registration statements under the Securities Act of 1933 (part
239 of this chapter), except as otherwise specifically provided in the
forms which are to be used for registration under this Act;
(2) Registration statements under section 12 (subpart C of part 249
of this chapter), annual or other reports under sections 13 and 15(d)
(subparts D and E of part 249 of this chapter), and proxy and
information statements under section 14 of the Securities Exchange Act
of 1934 except as otherwise specifically provided in the forms which are
to be used for registration and reporting under these sections of this
Act;
(3) Registration statements and annual reports filed under the Public
Utility Holding Company Act of 1935 (part 259 of this chapter) by public
utility holding companies registered under such Act; and
(4) Registration statements and shareholder reports under the
Investment Company Act of 1940 (part 274 of this chapter), except as
otherwise specifically provided in the forms which are to be used for
registration under this Act.
(b) The term financial statements as used in this part shall be
deemed to include all notes to the statements and all related schedules.
(c) In addition to filings pursuant to the Federal securities laws,
210.4-10 applies to the preparation of accounts by persons engaged, in
whole or in part, in the production of crude oil or natural gas in the
United States pursuant to section 503 of the Energy Policy and
Conservation Act of 1975 (42 U.S.C. 6383) (EPCA) and section 1(c) of the
Energy Supply and Environmental Coordination Act of 1974 (15 U.S.C.
796), as amended by section 505 of EPCA.
(37 FR 14593, July 21, 1972, as amended at 43 FR 40712, Sept. 12,
1978; 45 FR 63680, Sept. 25, 1980; 45 FR 63687, Sept. 25, 1980; 46 FR
36124, July 14, 1981; 50 FR 25214, June 18, 1985)
17 CFR 210.1-02 Definitions of terms used in Regulation S-X (17 CFR
part 210).
Unless the context otherwise requires, terms defined in the general
rules and regulations or in the instructions to the applicable form,
when used in Regulation S-X (this part 210), shall have the respective
meanings given in such instructions or rules. In addition, the
following terms shall have the meanings indicated in this section unless
the context otherwise requires.
(a) Accountant's report. The term accountant's report, when used in
regard to financial statements, means a document in which an independent
public or certified public accountant indicates the scope of the audit
(or examination) which he has made and sets forth his opinion regarding
the financial statements taken as a whole, or an assertion to the effect
that an overall opinion cannot be expressed. When an overall opinion
cannot be expressed, the reasons therefor shall be stated.
(b) Affiliate. An affiliate of, or a person affiliated with, a
specific person is a person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common
control with, the person specified.
(c) Amount. The term amount, when used in regard to securities,
means the principal amount if relating to evidences of indebtedness, the
number of shares if relating to shares, and the number of units if
relating to any other kind of security.
(d) Audit (or examination). The term audit (or examination), when
used in regard to financial statements, means an examination of the
statements by an accountant in accordance with generally accepted
auditing standards for the purpose of expressing an opinion thereon.
(e) Bank holding company. The term bank holding company means a
person which is engaged, either directly or indirectly, primarily in the
business of owning securities of one or more banks for the purpose, and
with the effect, of exercising control.
(f) Certified. The term certified, when used in regard to financial
statements, means examined and reported upon with an opinion expressed
by an independent public or certified public accountant.
(g) Control. The term control (including the terms controlling,
controlled by and under common control with) means the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting shares, by contract, or otherwise.
(h) Development stage company. A company shall be considered to be
in the development stage if it is devoting substantially all of its
efforts to establishing a new business and either of the following
conditions exists: (1) Planned principal operations have not commenced.
(2) Planned principal operations have commenced, but there has been no
significant revenue therefrom.
(i) Equity security. The term equity security means any stock or
similar security; or any security convertible, with or without
consideration, into such a security, or carrying any warrant or right to
subscribe to or purchase such a security; or any such warrant or right.
(j) Fifty-percent-owned person. The term 50-percent-owned person, in
relation to a specified person, means a person approximately 50 percent
of whose outstanding voting shares is owned by the specified person
either directly, or indirectly through one or more intermediaries.
(k) Fiscal year. The term fiscal year means the annual accounting
period or, if no closing date has been adopted, the calendar year ending
on December 31.
(l) Insurance holding company. The term insurance holding company
means a person which is engaged, either directly or indirectly,
primarily in the business of owning securities of one or more insurance
companies for the purpose, and with the effect, of exercising control.
(m) Majority-owned subsidiary. The term majority-owned subsidiary
means a subsidiary more than 50 percent of whose outstanding voting
shares is owned by its parent and/or the parent's other majority-owned
subsidiaries.
(n) Material. The term material, when used to qualify a requirement
for the furnishing of information as to any subject, limits the
information required to those matters about which an average prudent
investor ought reasonably to be informed.
(o) Parent. A parent of a specified person is an affiliate
controlling such person directly, or indirectly through one or more
intermediaries.
(p) Person. The term person means an individual, a corporation, a
partnership, an association, a joint-stock company, a business trust, or
an unincorporated organization.
(q) Principal holder of equity securities. The term principal holder
of equity securities, used in respect of a registrant or other person
named in a particular statement or report, means a holder of record or a
known beneficial owner of more than 10 percent of any class of equity
securities of the registrant or other person, respectively, as of the
date of the related balance sheet filed.
(r) Promoter. The term promoter includes:
(1) Any person who, acting alone or in conjunction with one or more
other persons, directly or indirectly takes initiative in founding and
organizing the business or enterprise of an issuer;
(2) Any person who, in connection with the founding and organizing of
the business or enterprise of an issuer, directly or indirectly receives
in consideration of services or property, or both services and property,
10 percent or more of any class of securities of the issuer or 10
percent or more of the proceeds from the sale of any class of
securities. However, a person who receives such securities or proceeds
either solely as underwriting commissions or solely in consideration of
property shall not be deemed a promoter within the meaning of this
paragraph if such person does not otherwise take part in founding and
organizing the enterprise.
(s) Registrant. The term registrant means the issuer of the
securities for which an application, a registration statement, or a
report is filed.
(t) Related parties. The term related parties is used as that term
is defined in the Glossary to Statement of Financial Accounting
Standards No. 57, ''Related Party Disclosures.''
(u) Share. The term share means a share of stock in a corporation or
unit of interest in an unincorporated person.
(v) Significant subsidiary. The term significant subsidiary means a
subsidiary, including its subsidiaries, which meets any of the following
conditions:
(1) The registrant's and its other subsidiaries' investments in and
advances to the subsidiary exceed 10 percent of the total assets of the
registrant and its subsidiaries consolidated as of the end of the most
recently completed fiscal year (for a proposed business combination to
be accounted for as a pooling of interests, this condition is also met
when the number of common shares exchanged or to be exchanged by the
registrant exceeds 10 percent of its total common shares outstanding at
the date the combination is initiated); or
(2) The registrant's and its other subsidiaries' proportionate share
of the total assets (after intercompany eliminations) of the subsidiary
exceeds 10 percent of the total assets of the registrants and its
subsidiaries consolidated as of the end of the most recently completed
fiscal year; or
(3) The registrant's and its other subsidiaries' equity in the income
from continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principle of the subsidiary
exceeds 10 percent of such income of the registrant and its subsidiaries
consolidated for the most recently completed fiscal year.
Computational note: For purposes of making the prescribed income
test the following guidance should be applied:
1. When a loss has been incurred by either the parent and its
subsidiaries consolidated or the tested subsidiary, but not both, the
equity in the income or loss of the tested subsidiary should be excluded
from the income of the registrant and its subsidiaries consolidated for
purposes of the computation.
2. If income of the registrant and its subsidiaries consolidated for
the most recent fiscal year is at least 10 percent lower than the
average of the income for the last five fiscal years, such average
income should be substituted for purposes of the computation. Any loss
years should be omitted for purposes of computing average income.
3. Where the test involves combined entities, as in the case of
determining whether summarized financial data should be presented,
entities reporting losses shall not be aggregated with entities
reporting income.
(w) Subsidiary. A subsidiary of a specified person is an affiliate
controlled by such person directly, or indirectly through one or more
intermediaries.
(x) Totally held subsidiary. The term totally held subsidiary means
a subsidiary (1) substantially all of whose outstanding equity
securities are owned by its parent and/or the parent's other totally
held subsidiaries, and (2) which is not indebted to any person other
than its parent and/or the parent's other totally held subsidiaries, in
an amount which is material in relation to the particular subsidiary,
excepting indebtedness incurred in the ordinary course of business which
is not overdue and which matures within 1 year from the date of its
creation, whether evidenced by securities or not. Indebtedness of a
subsidiary which is secured by its parent by guarantee, pledge,
assignment, or otherwise is to be excluded for purposes of paragraph
(x)(2) of this section.
(y) Voting shares. The term voting shares means the sum of all
rights, other than as affected by events of default, to vote for
election of directors and/or the sum of all interests in an
unincorporated person.
(z) Wholly owned subsidiary. The term wholly owned subsidiary means
a subsidiary substantially all of whose outstanding voting shares are
owned by its parent and/or the parent's other wholly owned subsidiaries.
(aa) Summarized financial information. (1) Except as provided in
paragraph (aa)(2), summarized financial information referred to in this
regulation shall mean the presentation of summarized information as to
the assets, liabilities and results of operations of the entity for
which the information is required. Summarized financial information
shall include the following disclosures:
(i) Current assets, noncurrent assets, current liabilities,
noncurrent liabilities, and, when applicable, redeemable preferred
stocks (see 210.5-02.28) and minority interests (for specialized
industries in which classified balance sheets are normally not
presented, information shall be provided as to the nature and amount of
the major components of assets and liabilities);
(ii) Net sales or gross revenues, gross profit (or, alternatively,
costs and expenses applicable to net sales or gross revenues), income or
loss from continuing operations before extraordinary items and
cumulative effect of a change in accounting principle, and net income or
loss (for specialized industries, other information may be substituted
for sales and related costs and expenses if necessary for a more
meaningful presentation); and
(2) Summarized financial information for unconsolidated subsidiaries
and 50 percent or less owned persons referred to in and required by
210.10-01(b) for interim periods shall include the information required
by paragraph (aa)(1)(ii) of this section.
(Secs. 7 and 19a of the Securities Act, 15 U.S.C. 77g, 77s(a),
77aa(25)(26); secs. 12, 13, 14, 15(d), and 23(a) of the Securities
Exchange Act of 1934, 15 U.S.C. 78l, 78m, 78n, 78o(d), 78w(a), secs.
5(b), 10(a), 14, 20(a) of the Public Utility Holding Company Act, 15
U.S.C. 79e(a), 79n, 79t(a); secs. 8, 20, 30, 31(c), 38(a) of the
Investment Company Act of 1940, 15 U.S.C. 80a-8, 80a-20, 80a-29,
80a-30(c), 80a-37(a))
(37 FR 14593, July 21, 1972, as amended at 38 FR 6066, Mar. 6, 1973;
39 FR 17931, May 22, 1974; 40 FR 55835, Dec. 2, 1975; 45 FR 63668,
Sept. 25, 1980; 46 FR 56178, Nov. 16, 1981; 47 FR 29836, July 9, 1982;
50 FR 25214, June 18, 1985; 50 FR 49531, Dec. 3, 1985)
17 CFR 210.1-02 Qualifications and Reports of Accountants
Source: Sections 210.2-01 to 210.2-05 appear at 37 FR 14594, July
21, 1972, unless otherwise noted.
17 CFR 210.2-01 Qualifications of accountants.
(a) The Commission will not recognize any person as a certified
public accountant who is not duly registered and in good standing as
such under the laws of the place of his residence or principal office.
The Commission will not recognize any person as a public accountant who
is not in good standing and entitled to practice as such under the laws
of the place of his residence or principal office.
(b) The Commission will not recognize any certified public accountant
or public accountant as independent who is not in fact independent. For
example, an accountant will be considered not independent with respect
to any person or any of its parents, its subsidiaries, or other
affiliates (1) in which, during the period of his professional
engagement to examine the financial statements being reported on or at
the date of his report, be, his firm, or a member of his firm had, or
was committed to acquire, any direct financial interest or any material
indirect financial interest; (2) with which, during the period of his
professional engagement to examine the financial statements being
reported on, at the date of his report or during the period covered by
the financial statements, he, his firm, or a member of his firm was
connected as a promoter, underwriter, voting trustee, director, officer,
or employee. A firm's independence will not be deemed to be affected
adversely where a former officer or employee of a particular person is
employed by or becomes a partner, shareholder or other principal in the
firm and such individual has completely disassociated himself from the
person and its affiliates and does not participate in auditing financial
statements of the person or its affiliates covering any period of his
employment by the person. For the purposes of 210.2-01(b), the term
member means (i) all partners, shareholders, and other principals in the
firm, (ii) any professional employee involved in providing any
professional service to the person, its parents, subsidiaries, or other
affiliates, and (iii) any professional employee having managerial
responsibilities and located in (the engagement office) or other office
of the firm which participates in a significant portion of the audit.
(c) In determining whether an accountant may in fact be not
independent with respect to a particular person, the Commission will
give appropriate consideration to all relevant circumstances, including
evidence bearing on all relationships between the accountant and that
person or any affiliate thereof, and will not confine itself to the
relationships existing in connection with the filing of reports with the
Commission.
(37 FR 14594, July 21, 1972, as amended at 48 FR 9521, Mar. 7, 1983)
17 CFR 210.2-02 Accountants' reports.
(a) Technical requirements. The accountant's report: (1) Shall be
dated; (2) shall be signed manually; (3) shall indicate the city and
State where issued; and (4) shall identify without detailed enumeration
the financial statements covered by the report.
(b) Representations as to the audit. The accountant's report: (1)
Shall state whether the audit was made in accordance with generally
accepted auditing standards; and (2) shall designate any auditing
procedures deemed necessary by the accountant under the circumstances of
the particular case, which have been omitted, and the reasons for their
omission. Nothing in this rule shall be construed to imply authority
for the omission of any procedure which independent accountants would
ordinarily employ in the course of an audit made for the purpose of
expressing the opinions required by paragraph (c) of this section.
(c) Opinion to be expressed. The accountant's report shall state
clearly: (1) The opinion of the accountant in respect of the financial
statements covered by the report and the accounting principles and
practices reflected therein; and (2) the opinion of the accountant as
to the consistency of the application of the accounting principles, or
as to any changes in such principles which have a material effect on the
financial statements.
(d) Exceptions. Any matters to which the accountant takes exception
shall be clearly identified, the exception thereto specifically and
clearly stated, and, to the extent practicable, the effect of each such
exception on the related financial statements given. (See section 101
of the Codification of Financial Reporting Policies.)
(37 FR 14594, July 21, 1972, as amended at 41 FR 35479, Aug. 23,
1976; 45 FR 63668, Sept. 25, 1980; 50 FR 25215, June 18, 1985)
17 CFR 210.2-03 Examination of financial statements by foreign
government auditors.
Notwithstanding any requirements as to examination by independent
accountants, the financial statements of any foreign governmental agency
may be examined by the regular and customary auditing staff of the
respective government if public financial statements of such
governmental agency are customarily examined by such auditing staff.
17 CFR 210.2-04 Examination of financial statements of persons other
than the registrant.
If a registrant is required to file financial statements of any other
person, such statements need not be examined if examination of such
statements would not be required if such person were itself a
registrant.
17 CFR 210.2-05 Examination of financial statements by more than one
accountant.
If, with respect to the examination of the financial statements, part
of the examination is made by an independent accountant other than the
principal accountant and the principal accountant elects to place
reliance on the work of the other accountant and makes reference to that
effect in his report, the separate report of the other accountant shall
be filed. However, notwithstanding the provisions of this section,
reports of other accountants which may otherwise be required in filings
need not be presented in annual reports to security holders furnished
pursuant to the proxy and information statement rules under the
Securities Exchange Act of 1934 ( 240.14a-3 and 240.14c-3).
(46 FR 40872, Aug. 13, 1981)
17 CFR 210.2-05 General Instructions as to Financial Statements
Source: Sections 210.3-01 to 210.3-16 appear at 45 FR 63687, Sept.
25, 1980, unless otherwise noted.
Note: These instructions specify the balance sheets and statements
of income and changes in financial position to be included in disclosure
documents prepared in accordance with Regulation S-X. Other portions of
Regulation S-X govern the examination, form and content of such
financial statements, including the basis of consolidation and the
schedules to be filed. The financial statements described below shall
be audited unless otherwise indicated.
For filings under the Securities Act of 1933, attention is directed
to 230.411(b) regarding incorporation by reference to financial
statements and to section 10(a)(3) of the Act regarding information
required in the prospectus.
For filings under the Securities Exchange Act of 1934, attention is
directed to 240.12b-23 regarding incorporation by reference and
240.12b-36 regarding use of financial statements filed under other acts.
17 CFR 210.3-01 Consolidated balance sheets.
(a) There shall be filed, for the registrant and its subsidiaries
consolidated, audited balance sheets as of the end of each of the two
most recent fiscal years. If the registrant has been in existence for
less than one fiscal year, there shall be filed an audited balance sheet
as of a date within 135 days of the date of filing the registration
statement.
(b) If the filing, other than a filing on Form 10-K or Form 10, is
made within 45 days after the end of the registrant's fiscal year and
audited financial statements for the most recent fiscal year are not
available, the balance sheets may be as of the end of the two preceding
fiscal years and the filing shall include an additional balance sheet as
of an interim date at least as current as the end of the registrant's
third fiscal quarter of the most recently completed fiscal year.
(c) The instruction in paragraph (b) is also applicable to filings,
other than on Form 10-K or Form 10, made after 45 days but within 90
days of the end of the registrant's fiscal year: Provided, That the
following conditions are met:
(1) The registrant files annual, quarterly and other reports pursuant
to section 13 or 15(d) of the Securities Exchange Act of 1934 and all
reports due have been filed;
(2) For the most recent fiscal year for which audited financial
statements are not yet available the registrant reasonably and in good
faith expects to report income, after taxes but before extraordinary
items and cumulative effect of a change in accounting principle; and
(3) For at least one of the two fiscal years immediately preceding
the most recent fiscal year the registrant reported income, after taxes
by before extraordinary items and cumulative effect of a change in
accounting principle.
(d) For filings made after 45 days but within 90 days of the end of
the registrant's fiscal year where the conditions set forth in paragraph
(c) of this section are not met, the filing must include the audited
balance sheets required by paragraph (a) of this section.
(e) For filings made after 134 days subsequent to the end of the
registrant's most recent fiscal year the filing shall also include a
balance sheet as of an interim date within 135 days of the date of
filing.
(f) Any interim balance sheet provided in accordance with the
requirements of this section may be unaudited and need not be presented
in greater detail than is required by 210.10-01. Notwithstanding the
requirements of this section, the most recent interim balance sheet
included in a filing shall be at least as current as the most recent
balance sheet filed with the Commission on Form 10-Q.
(g) For filings by registered management investment companies, the
requirements of 210.3-18 shall apply in lieu of the requirements of
this section.
(h) Any foreign private issuer, other than a registered management
investment company or an employee plan, may file the financial
statements required by 210.3-19 in lieu of the financial statements
specified in this rule.
(45 FR 63687, Sept. 25, 1980, as amended at 46 FR 12491, Feb. 17,
1981; 46 FR 36124, July 14, 1981; 50 FR 49531, Dec. 3, 1985; 56 FR
30053, July 1, 1991)
17 CFR 210.3-02 Consolidated statements of income and changes in
financial position.
(a) There shall be filed, for the registrant and its subsidiaries
consolidated and for its predecessors, audited statements of income and
changes in financial position for each of the three fiscal years
preceding the date of the most recent audited balance sheet being filed
or such shorter period as the registrant (including predecessors) has
been in existence.
(b) In addition, for any interim period between the latest audited
balance sheet and the date of the most recent interim balance sheet
being filed, and for the corresponding period of the preceding fiscal
year, statements of income and changes in financial position shall be
provided. Such interim financial statements may be unaudited and need
not be presented in greater detail than is required by 210.10-01.
(c) For filings by registered management investment companies, the
requirements of 210.3-18 shall apply in lieu of the requirements of
this section.
(d) Any foreign private issuer, other than a registered management
investment company or an employee plan, may file the financial
statements required by 210.3-19 in lieu of the financial statements
specified in this rule.
(45 FR 63687, Sept. 25, 1980, as amended at 46 FR 12491, Feb. 17,
1981; 46 FR 36125, July 14, 1981; 50 FR 49531, Dec. 3, 1985; 56 FR
30053, July 1, 1991)
17 CFR 210.3-03 Instructions to income statement requirements.
(a) The statements required shall be prepared in compliance with the
applicable requirements of this regulation.
(b) If the registrant is engaged primarily (1) in the generation,
transmission or distribution of electricity, the manufacture, mixing,
transmission or distribution of gas, the supplying or distribution of
water, or the furnishing of telephone or telegraph service; or (2) in
holding securities of companies engaged in such businesses, it may at
its option include statements of income and changes in financial
position (which may be unaudited) for the twelve-month period ending on
the date of the most recent balance sheet being filed, in lieu of the
statements of income and changes in financial position for the interim
periods specified.
(c) If a period or periods reported on include operations of a
business prior to the date of acquisition, or for other reasons differ
from reports previously issued for any period, the statements shall be
reconciled as to sales or revenues and net income in the statement or in
a note thereto with the amounts previously reported: Provided, however,
That such reconciliations need not be made (1) if they have been made in
filings with the Commission in prior years or (2) the financial
statements which are being retroactively adjusted have not previously
been filed with the Commission or otherwise made public.
(d) Any unaudited interim financial statements furnished shall
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim periods
presented. A statement to that effect shall be included. Such
adjustments shall include, for example, appropriate estimated provisions
for bonus and profit sharing arrangements normally determined or settled
at year-end. If all such adjustments are of a normal recurring nature,
a statement to that effect shall be made; otherwise, there shall be
furnished information describing in appropriate detail the nature and
amount of any adjustments other than normal recurring adjustments
entering into the determination of the results shown.
(e) Disclosures regarding business segments required by generally
accepted accounting principles (Statement of Financial Accounting
Standards No. 14) shall be provided for each year for which an audited
statement of income is presented. To the extent that the segment
information presented pursuant to this instruction complies with the
provisions of Item 101 of Regulation S-K, the disclosures may be
combined by cross referencing to or from the financial statements.
(45 FR 63687, Sept. 25, 1980. Redesignated at 47 FR 29836, July 9,
1982, and amended at 50 FR 25215, June 18, 1985; 50 FR 49532, Dec. 3,
1985)
17 CFR 210.3-04 Changes in other stockholders' equity.
An analysis of the changes in each caption of other stockholders'
equity presented in the balance sheets shall be given in a note or
separate statement. This analysis shall be presented in the form of a
reconciliation of the beginning balance to the ending balance for each
period for which an income statement is required to be filed with all
significant reconciling items described by appropriate captions. State
separately the adjustments to the balance at the beginning of the
earliest period presented for items which were retroactively applied to
periods prior to that period. With respect to any dividends, state the
amount per share and in the aggregate for each class of shares.
(Secs. 7 and 19a of the Securities Act, 15 U.S.C. 77g, 77s(a),
77aa(25)(26); secs. 12, 13, 14, 15(d), and 23(a) of the Securities
Exchange Act of 1934, 15 U.S.C. 78l, 78m, 78n, 78o(d), 78w(a), secs.
5(b), 10(a), 14, 20(a) of the Public Utility Holding Company Act, 15
U.S.C. 79e(a), 79n, 79t(a); secs. 8, 20, 30, 31(c), 38(a) of the
Investment Company Act of 1940, 15 U.S.C. 80a-8, 80a-20, 80a-29,
80a-30(c), 80a-37(a))
(47 FR 29836, July 9, 1982)
17 CFR 210.3-05 Financial statements of businesses acquired or to be
acquired.
(a) Financial statements required. (1) Financial statements prepared
and audited in accordance with this regulation should be furnished for
the periods specified in paragraph (b) below if any of the following
conditions exist:
(i) Consummation of a business combination accounted for as a
purchase has occurred or is probable (for purposes of this rule, the
term purchase encompasses the purchase of an interest in a business
accounted for by the equity method); or
(ii) Consummation of a business combination to be accounted for as a
pooling of interests is probable.
(2) For purposes of determining whether the provisions of this rule
apply, the determination of whether a business has been acquired should
be made in accordance with the guidance set forth in 210.11-01(d).
(3) If consummation of more than one transaction has occurred or is
probable, the required financial statements may be presented on a
combined basis, if appropriate.
(4) This rule shall not apply to a business which is totally held by
the registrant prior to consummation of the transaction.
(b) Periods to be presented. (1) If securities are being registered
to be offered to the security holders of the business to be acquired,
the financial statements specified in 210.3-01 and 210.3-02 shall be
furnished for the business to be acquired, except as provided otherwise
for filings on Form N-14, S-4 or F-4. In all other cases, financial
statements of the business acquired or to be acquired shall be filed for
the periods specified in this paragraph or such shorter period as the
business has been in existence. The financial statements covering
fiscal years shall be audited except as provided in Item 14 of Schedule
14A, ( 240.14a-101 of this chapter) with respect to certain proxy
statements or in registration statements filed on Forms N-14, S-4 or F-4
( 239.23, 25 or 34 of this chapter). The periods for which such
financial statements are to be filed shall be determined using the
conditions specified in the definition of significant subsidiary in
210.1-02(v) as follows:
(i) If none of the conditions exceeds 10 percent, financial
statements are not required. However, if the aggregate impact of the
individually insignificant businesses acquired since the date of the
most recent audited balance sheet filed for the registrant exceeds 20%,
financial statements covering at least the substantial majority of the
businesses acquired, combined if appropriate, shall be furnished. Such
financial statements shall be for at least the most recent fiscal year
and any interim periods specified in 210.3-01 and 210.3-02.
(ii) If any of the conditions exceeds 10 percent, but none exceed 20
percent, financial statements shall be furnished for at least the most
recent fiscal year and any interim periods specified in 210.3-01 and
210.3-02.
(iii) If any of the conditions exceeds 20 percent, but none exceed 40
percent, financial statements shall be furnished for at least the two
most recent fiscal years and any interim periods specified in 210.3-01
and 210.3-02.
(iv) If any of the conditions exceeds 40 percent, the full financial
statements specified in 210.3-01 and 210.3-02 shall be furnished.
The determination shall be made by comparing the most recent annual
financial statements of each such business to the registrant's most
recent annual consolidated financial statements filed at or prior to the
date of acquisition. However, if the registrant made a significant
acquisition subsequent to the latest fiscal year-end and filed a report
on Form 8-K which included audited financial statements of such acquired
business for the periods required by this section and the pro forma
financial information required by 210.11, such determination may be
made by using the pro forma amounts for the latest fiscal year in the
report on Form 8-K rather than by using the historical amounts for the
latest fiscal year of the registrant. The tests may not be made by
annualizing data.
(2)(i) Notwithstanding the requirements in (b)(1) above, separate
financial statements of the acquired business need not be presented once
the operating results of the acquired business have been reflected in
the audited consolidated financial statements of the registrant for a
complete fiscal year unless such financial statements have not been
previously filed or unless the acquired business is of such significance
to the registrant that omission of such financial statements would
materially impair an investor's ability to understand the historical
financial results of the registrant. For example, if, at the date of
acquisition, the acquired business met at least one of the conditions in
the definition of significant subsidiary in 210.1-02 at the 80 percent
level the income statements of the acquired business should normally
continue to be furnished for such periods prior to the purchase as may
be necessary when added to the time for which audited income statements
after the purchase are filed to cover the equivalent of the period
specified in 210.3-02.
(ii) A separate audited balance sheet of the acquired business is not
required when the registrant's most recent audited balance sheet
required by 210.3-01 is for a date after the date the acquisition was
consummated.
(Secs. 7 and 19a of the Securities Act, 15 U.S.C. 77g, 77s(a),
77aa(25)(26); secs. 12, 13, 14, 15(d), and 23(a) of the Securities
Exchange Act of 1934, 15 U.S.C. 78l, 78m, 78n, 78o(d), 78w(a), secs.
5(b), 10(a), 14, 20(a) of the Public Utility Holding Company Act, 15
U.S.C. 79e(a), 79n, 79t(a); secs. 8, 20, 30, 31(c), 38(a) of the
Investment Company Act of 1940, 15 U.S.C. 80a-8, 80a-20, 80a-29,
80a-30(c), 80a-37(a))
(47 FR 29836, July 9, 1982, as amended at 50 FR 49532, Dec. 3, 1985;
51 FR 42056, Nov. 20, 1986)
17 CFR 210.3-06 Financial statements covering a period of nine to
twelve months.
Except with respect to registered investment companies, the filing of
financial statements covering a period of 9 to 12 months shall be deemed
to satisfy a requirement for filing financial statements for a period of
1 year where:
(a) The issuer has changed its fiscal year;
(b) The issuer has made a significant business acquisition for which
financial statements are required under 210.3-05 of this chapter and
the financial statements covering the interim period pertain to the
business being acquired; or
(c) The Commission so permits pursuant to 210.3-13 of this chapter.
Where there is a requirement for filing financial statements for a
time period exceeding one year but not exceeding three consecutive years
(with not more than 12 months included in any period reported upon), the
filing of financial statements covering a period of nine to 12 months
shall satisfy a filing requirement of financial statements for one year
of that time period only if the conditions described in either paragraph
(a), (b), or (c) of this section exist and financial statements are
filed that cover the full fiscal year or years for all other years in
the time period.
(54 FR 10315, Mar. 13, 1989)
210.3-07 -- 210.3-08 (Reserved)
17 CFR 210.3-09 Separate financial statements of subsidiaries not
consolidated and 50 percent or less owned persons.
(a) If any of the conditions set forth in 210.1-02(v), substituting
20 percent for 10 percent in the tests used therein to determine a
significant subsidiary, are met for a majority-owned subsidiary not
consolidated by the registrant or by a subsidiary of the registrant,
separate financial statements of such subsidiary shall be filed.
Similarly, if any of the conditions set forth therein, substituting 20
percent for 10 percent, are met by a 50 percent or less owned person
accounted for by the equity method either by the registrant or a
subsidiary of the registrant, separate financial statements of such 50
percent or less owned person shall be filed.
(b) Insofar as practicable, the separate financial statements
required by this section shall be as of the same dates and for the same
periods as the audited consolidated financial statements required by
210.3-01 and 3-02. However, these separate financial statements are
required to be audited only for those fiscal years in which any of the
conditions described in 210.1-02(v), substituting 20 percent for 10
percent, are met. For purposes of a filing on Form 10-K, if the fiscal
year of any majority-owned subsidiary not consolidated or any 50 percent
or less-owned person ends within 90 days before the date of filing, or
if the fiscal year ends after the date of filing, the required financial
statements may be filed as an amendment to the report within 90 days
after the end of such subsidiary's or person's fiscal year.
(c) Notwithstanding the requirements for separate financial
statements in paragraph (a) of this section, where financial statements
of two or more majority-owned subsidiaries not consolidated are
required, combined or consolidated statements of such subsidiaries may
be filed subject to principles of inclusion and exclusion which clearly
exhibit the financial position, changes in financial position and
results of operations of the combined or consolidated group. Similarly,
where financial statements of two or more 50 percent or less owned
persons are required, combined or consolidated statements of such
persons may be filed subject to the same principles of inclusion or
exclusion referred to above.
(Secs. 7 and 19a of the Securities Act, 15 U.S.C. 77g, 77s(a),
77aa(25)(26); secs. 12, 13, 14, 15(d), and 23(a) of the Securities
Exchange Act of 1934, 15 U.S.C. 78l, 78m, 78n, 78o(d), 78w(a), secs.
5(b), 10(a), 14, 20(a) of the Public Utility Holding Company Act, 15
U.S.C. 79e(a), 79n, 79t(a); secs. 8, 20, 30, 31(c), 38(a) of the
Investment Company Act of 1940, 15 U.S.C. 80a-8, 80a-20, 80a-29,
80a-30(c), 80a-37(a))
(46 FR 56179, Nov. 16, 1981, as amended at 47 FR 29837, July 9, 1982)
17 CFR 210.3-10 Financial statements of guarantors and affiliates whose
securities collateralize an issue registered or being registered.
(a) For each guarantor of any class of securities of a registrant and
for each of the registrant's affiliates whose securities constitute a
substantial portion of the collateral for any class of securities
registered or being registered, there shall be filed the financial
statements that would be required if the guarantor or affiliate were a
registrant and required to file financial statements. However,
financial statements need not be filed pursuant to this provision for
any person whose statements are otherwise separately included in the
filing on an individual basis or on a basis consolidated with its
subsidiaries.
(b) For the purposes of this provision, securities of a person shall
be deemed to constitute a substantial portion of collateral if the
aggregate principal amount, par value, or book value of the securities
as carried by the registrant, or the market value of such securities,
whichever is the greatest, equals 20 percent or more of the principal
amount of the secured class of securities.
(50 FR 49532, Dec. 2, 1985)
17 CFR 210.3-11 Financial statements of an inactive registrant.
If a registrant is an inactive entity as defined below, the financial
statements required by this regulation for purposes of reports pursuant
to the Securities Exchange Act of 1934 may be unaudited. An inactive
entity is one meeting all of the following conditions:
(a) Gross receipts from all sources for the fiscal year are not in
excess of $100,000;
(b) The registrant has not purchased or sold any of its own stock,
granted options therefor, or levied assessments upon outstanding stock;
(c) Expenditures for all purposes for the fiscal year are not in
excess of $100,000;
(d) No material change in the business has occurred during the fiscal
year, including any bankruptcy, reorganization, readjustment or
succession or any material acquisition or disposition of plants, mines,
mining equipment, mine rights or leases; and
(e) No exchange upon which the shares are listed, or governmental
authority having jurisdiction, requires the furnishing to it or the
publication of audited financial statements.
17 CFR 210.3-12 Age of financial statements at effective date of
registration statement or at mailing date of proxy statement.
(a) If the financial statements in a filing are as of a date 135 days
or more prior to the date the filing is expected to become effective or
proposed mailing date in the case of a proxy statement, the financial
statements shall be updated, except as specified in the following
paragraphs, with a balance sheet as of an interim date within 135 days
and with statements of income and changes in financial position for the
interim period between the end of the most recent fiscal year and the
date of the interim balance sheet provided and for the corresponding
period of the preceding fiscal year. Such interim financial statements
may be unaudited and need not be presented in greater detail than is
required by 210.10-01. Notwithstanding the above requirements, the most
recent interim financial statements shall be at least as current as the
most recent financial statements filed with the Commission on Form 10-Q.
(b) Where the anticipated effective date of a filing, or in the case
of a proxy statement the proposed mailing date, falls within 90 days
subsequent to the end of the fiscal year, the filing need not include
financial statements more current than as of the end of the third fiscal
quarter of the most recently completed fiscal year unless the audited
financial statements for such fiscal year are available or unless the
anticipated effective date or proposed mailing date falls after 45 days
subsequent to the end of the fiscal year and the registrant does not
meet the conditions prescribed under paragraph (c) of 210.3-01. If the
anticipated effective date or proposed mailing date falls after 45 days
subsequent to the end of the fiscal year and the registrant does not
meet the conditions prescribed under paragraph (c) of 210.3-01, the
filing must include audited financial statements for the most recently
completed fiscal year.
(c) Where a filing is made near the end of a fiscal year and audited
financial statements for that fiscal year are not included in the
filing, the filing shall be updated with such audited financial
statements if they become available prior to the anticipated effective
date, or proposed mailing date in the case of a proxy statement.
(d) The age of the registrant's most recent audited financial
statements included in a registration statement filed under the
Securities Act of 1933 or filed on Form 10 (17 CFR 249.210) under the
Securities Exchange Act of 1934 shall not be more than one year and 45
days old at the date the registration statement becomes effective if the
registration statement relates to the security of an issuer that was not
subject, immediately prior to the time of filing the registration
statement, to the reporting requirements of section 13 or 15(d) of the
Securities Exchange Act of 1934.
(e) For filings by registered management investment companies, the
requirements of 210.3-18 shall apply in lieu of the requirements of
this section.
(f) Any foreign private issuer may file financial statements whose
age is specified in 210.3-19.
(45 FR 62687, Sept. 25, 1980, as amended at 46 FR 12491, Feb. 17,
1981; 46 FR 36125, July 14, 1981; 47 FR 54767, Dec. 6, 1982; 54 FR
10316, Mar. 13, 1989; 56 FR 30053, July 1, 1991)
17 CFR 210.3-13 Filing of other financial statements in certain cases.
The Commission may, upon the informal written request of the
registrant, and where consistent with the protection of investors,
permit the omission of one or more of the financial statements herein
required or the filing in substitution therefor of appropriate
statements of comparable character. The Commission may also by informal
written notice require the filing of other financial statements in
addition to, or in substitution for, the statements herein required in
any case where such statements are necessary or appropriate for an
adequate presentation of the financial condition of any person whose
financial statements are required, or whose statements are otherwise
necessary for the protection of investors.
17 CFR 210.3-14 Special instructions for real estate operations to be
acquired.
(a) If, during the period for which income statements are required,
the registrant has acquired one or more properties which in the
aggregate are significant, or since the date of the latest balance sheet
required has acquired or proposes to acquire one or more properties
which in the aggregate are significant, the following shall be furnished
with respect to such properties:
(1) Audited income statements (not including earnings per unit) for
the three most recent fiscal years, which shall exclude items not
comparable to the proposed future operations of the property such as
mortgage interest, leasehold rental, depreciation, corporate expenses
and Federal and state income taxes: Provided, however, That such
audited statements need be presented for only the most recent fiscal
year if (i) the property is not acquired from a related party; (ii)
material factors considered by the registrant in assessing the property
are described with specificity in the filing with regard to the
property, including sources of revenue (including, but not limited to,
competition in the rental market, comparative rents, occupancy rates)
and expense (including, but not limited to, utility rates, ad valorem
tax rates, maintenance expenses, capital improvements anticipated); and
(iii) the registrant indicates in the appropriate filing that, after
reasonable inquiry, the registrant is not aware of any material factors
relating to that specific property other than those discussed in
response to paragraph (a)(1)(ii) of this section that would cause the
reported financial information not to be necessarily indicative of
future operating results.
Note: The discussion of material factors considered should be
combined with that required by Item 15 of Form S-11.
(2) If the property is to be operated by the registrant, there shall
be furnished a statement showing the estimated taxable operating results
of the registrant based on the most recent twelve month period including
such adjustments as can be factually supported. If the property is to
be acquired subject to a net lease the estimated taxable operating
results shall be based on the rent to be paid for the first year of the
lease. In either case, the estimated amount of cash to be made
available by operations shall be shown. There shall be stated in an
introductory paragraph the principal assumptions which have been made in
preparing the statements of estimated taxable operating results and cash
to be made available by operations.
(3) If appropriate under the circumstances, there shall be given in
tablular form for a limited number of years the estimated cash
distribution per unit showing the portion thereof reportable as taxable
income and the portion representing a return of capital together with an
explanation of annual variations, if any. If taxable net income per
unit will become greater than the cash available for distribution per
unit, that fact and approximate year of occurrence shall be stated, if
significant.
(b) Information required by this section is not required to be
included in a filing on Form 10-K.
(Secs. 7, 10, 19(a), 48 Stat. 78, 81, 85; secs. 205, 209, 48 Stat.
906, 908; sec. 8, 68 Stat 685; sec. 308(a)(2), 90 Stat. 57; secs. 13,
15(d), 23(a), 48 Stat. 894, 895, 901; sec. 203(a), 49 Stat. 704;
secs. 3, 8, 49 Stat. 1377, 1379; secs. 4, 6, 78 Stat. 570-574; sec. 2,
82 Stat. 454; secs. 1, 2, 84 Stat. 1497; secs. 10, 18, 89 Stat. 119,
155; sec. 308(b), 90 Stat. 57; secs. 202-204, 91 Stat. 1494,
1498-1500; 15 U.S.C. 77g, 77j, 77s(a), 78m, 78o(d), 78w(a))
(45 FR 63687, Sept. 25, 1980, as amended at 47 FR 25122, June 10,
1982)
17 CFR 210.3-15 Special provisions as to real estate investment trusts.
(a)(1) The income statement prepared pursuant to 210.5-03 shall
include the following additional captions between those required by
210.5-03.15 and 16: (i) Income or loss before gain or loss on sale of
properties, extraordinary items and cumulative effects of accounting
changes, and (ii) gain or loss on sale of properties, less applicable
income tax.
(2) The balance sheet required by 210.5-02 shall set forth in lieu
of the captions required by 210.5-02.31(a)(3): (i) The balance of
undistributed income from other than gain or loss on sale of properties
and (ii) accumulated undistributed net realized gain or loss on sale of
properties. The information specified in 210.3-04 shall be modified
similarly.
(b) The trust's status as a real estate investment trust under
applicable provisions of the Internal Revenue Code as amended shall be
stated in a note referred to in the appropriate statements. Such note
shall also indicate briefly the principal present assumptions on which
the trust has relied in making or not making provisons for Federal
income taxes.
(c) The tax status of distributions per unit shall be stated (e.g.,
ordinary income, capital gain, return of capital).
(45 FR 63687, Sept. 25, 1980, as amended at 50 FR 49532, Dec. 3,
1985)
17 CFR 210.3-16 Reorganization of registrant.
(a) If, during the period for which its income statements are
required, the registrant has emerged from a reorganization in which
substantial changes occurred in its asset, liability, capital shares,
other stockholders' equity or reserve accounts, a brief explanation of
such changes shall be set forth in a note or supporting schedule to the
balance sheets filed.
(b) If the registrant is about to emerge from such a reorganization,
there shall be filed, in addition to the balance sheets of the
registrant otherwise required, a balance sheet giving effect to the plan
of reorganization. These balance sheets shall be set forth in such
form, preferably columnar, as will show in related manner the balance
sheet of the registrant prior to the reorganization, the changes to be
effected in the reorganization and the balance sheet of the registrant
after giving effect to the plan of reorganization. By a footnote or
otherwise a brief explanation of the changes shall be given.
17 CFR 210.3-17 Financial statements of natural persons.
(a) In lieu of the financial statements otherwise required, a natural
person may file an unaudited balance sheet as of a date within 90 days
of date of filing and unaudited statements of income for each of the
three most recent fiscal years.
(b) Financial statements conforming with the instructions as to
financial statements of subsidiaries not consolidated and 50 percent or
less owned persons under 210.3-09(a) shall be separately presented for:
(1) Each business owned as a sole proprietor, (2) each partnership,
business trust, unincorporated association, or similar business
organization of which the person holds a controlling interest and (3)
each corporation of which the person, directly or indirectly, owns
securities representing more than 50 percent of the voting power.
(c) Separate financial statements may be omitted, however, for each
corporation, business trust, unincorporated association, or similar
business organization if the person's total investment in such entity
does not exceed 5 percent of his total assets and the person's total
income from such entity does not exceed 5 percent of his gross income;
Provided, that the person's aggregate investment in and income from all
such omitted entities shall not exceed 15 percent of his total assets
and gross income, respectively.
(46 FR 12491, Feb. 17, 1981, as amended at 50 FR 25215, June 18,
1985)
17 CFR 210.3-18 Special provisions as to registered management
investment companies and companies required to be registered as
management investment companies.
(a) For filings by registered management investment companies, the
following financial statements shall be filed:
(1) An audited balance sheet or statement of assets and liabilities
as of the end of the most recent fiscal year;
(2) An audited statement of operations for the most recent fiscal
year conforming to the requirements of 210.6-07.
(3) Audited statements of changes in net assets conforming to the
requirements of 210.6-09 for the two most recent fiscal years.
(b) If the filing is made within 60 days after the end of the
registrant's fiscal year and audited financial statements for the most
recent fiscal year are not available, the balance sheet or statement of
assets and liabilities may be as of the end of the preceding fiscal year
and the filing shall include an additional balance sheet or statement of
assets and liabilities as of an interim date within 245 days of the date
of filing. In addition, the statements of operations and changes in net
assets shall be provided for the one and two preceding fiscal years,
respectively, and for the interim period between the end of the
preceding fiscal year and the date of most recent interim balance sheet
or statement of assets and liabilities being filed. Financial
statements for the corresponding interim period of the preceding fiscal
year need not be provided.
(c) If the most current balance sheet or statement of assets and
liabilities in a filing is as of a date 245 days or more prior to the
date the filing is expected to become effective, the financial
statements shall be updated with a balance sheet or statement of assets
and liabilities as of an interim date within 245 days. In addition, the
statements of operations and changes in net assets shall be provided for
the interim period between the end of the most recent fiscal year for
which a balance sheet or statement of assets and liabilities is
presented and the date of the most recent interim balance sheet or
statement of assets and liabilities filed.
(d) Interim financial statements provided in accordance with these
requirements may be unaudited but shall be presented in the same detail
as required by 210.6-01 to 210.6-10. When unaudited financial
statements are presented in a registration statement, they shall include
the statement required by 210.3-03(d).
(Secs. 7 and 19a of the Securities Act, 15 U.S.C. 77g, 77s(a),
77aa(25)(26); secs. 12, 13, 14, 15(d), and 23(a) of the Securities
Exchange Act of 1934, 15 U.S.C. 78l, 78m, 78n, 78o(d), 78w(a), secs.
5(b), 10(a), 14, 20(a) of the Public Utility Holding Company Act, 15
U.S.C. 79e(a), 79n, 79t(a); secs. 8, 20, 30, 31(c), 38(a) of the
Investment Company Act of 1940, 15 U.S.C. 80a-8, 80a-20, 80a-29,
80a-30(c), 80a-37(a))
(46 FR 36125, July 14, 1981; 46 FR 46795, Sept. 22, 1981, as amended
at 47 FR 29837, July 9, 1982; 47 FR 56838, Dec. 21, 1982)
17 CFR 210.3-19 Special provisions as to financial statements for
foreign private issuers.
(a) A foreign private issuer, as defined in rule 405 ( 230.405 of
this chapter), other than a registered management investment company or
an employee plan, shall include the following financial statements for
the registrant and its subsidiaries consolidated and, where appropriate,
its predecessors:
(1) Audited balance sheets as of the end of each of the two most
recent fiscal years.
(2) Audited statements of income and changes in financial position
for each of the three fiscal years preceding the date of the most recent
audited balance sheet being filed.
(b) If the filing, other than an annual report on Form 20-F, is made
within six full months after the end of the registrant's fiscal year and
if the audited balance sheet for the most recent fiscal year is not
available, the audited balance sheets in the filing may be as of the end
of the two preceding fiscal years; Provided, That on the effective date
the filing shall include a balance sheet as of an interim date within
six months of the effective date (except as permitted in paragraph (e)
of this section), and Provided Further, That if the effective date falls
after five months subsequent to the end of the most recent fiscal year,
the filing shall include an audited balance sheet for the most recent
fiscal year.
(c) If the filing is made after six full months subsequent to the end
of the most recent fiscal year, the filing shall include a balance
sheet, which may be unaudited, as of an interim date within six months
(except as permitted in paragraph (e) of this section) of the effective
date.
(d) If the interim balance sheet is required by this rule, statements
of income and changes in financial position for the interim period
between the latest audited balance sheet and the date of the interim
balance sheet being filed and for the corresponding period of the
preceding fiscal year shall also be filed. Such interim financial
statements may be unaudited and need not be presented in greater detail
than is required by Rule 10-01 ( 210.10-01 of this chapter).
(e) The balance sheet shall be as of a date within one year of the
effective date if the only securities to be offered are (1) upon the
exercise of outstanding rights granted by the issuer of the securities
to be offered, if such rights are granted pro rata to all existing
security holders of the class of securities to which the rights attach;
or (2) pursuant to a dividend or interest reinvestment plan; or (3)
upon the conversion of oustanding convertible securities or upon the
exercise of outstanding transferable warrants issued by the issuer. The
provisions of this paragraph are not applicable if securities are to be
offered or sold in a standby underwriting in the United States or
similar arrangement.
(f) Notwithstanding the above provisions of this rule if a foreign
private issuer prepares and discloses to its shareholders or otherwise
makes public, pursuant to applicable foreign laws or regulations or
stock exchange requirements or otherwise, interim financial information
relating to revenues and income that is more current than the financial
statements required by this rule, such information shall be included in
the filing and reconciled according to the provisions of either Item 17
or Item 18 of Form 20-F, whichever applies to the audited financial
statements in the filing.
(47 FR 54767, Dec. 6, 1982, as amended at 56 FR 30053, July 1, 1991)
17 CFR 210.3-20 Currency for financial statements for foreign private
issuers.
(a) A foreign private issuer, as defined in Rule 405 ( 230.405 of
this chapter), shall state its primary financial statements only in the
currency of the country in which the issuer is incorporated or
organized, except that a different currency may be used if all the
following conditions are met:
(1) The other currency is the currency of the primary economic
environment in which the operations of such issuer and its subsidiaries
are conducted; normally that is the currency of the environment in
which such issuer primarily generates and expends cash. (The practice
of linking or indexing transactions to a particular currency is not
determinative that such currency is the reporting currency.);
(2) There are no material exchange restrictions or controls relating
to that currency; and
(3) The issuer publishes its financial statements for all of its
shareholders in the other currency.
(b) The currency in which the financial statements are prepared shall
be disclosed prominently on the face of the financial statements.
Dollar-equivalent financial statements or convenience translations shall
not be presented except a translation may be presented of the most
recent fiscal year and any subsequent interim period presented using the
exchange rate as of the most recent balance sheet included in the filing
except a rate as of the most recent practicable date shall be used if
materially different.
(c) If the financial statements of a foreign private issuer (1) are
denominated in a currency of a country that has experienced cumulative
inflationary effects exceeding a total of 100 percent over the most
recent three year period, and (2) have not been recast or otherwise
supplemented to include information on a constant currency or current
cost basis prescribed or permitted by appropriate authoritative
standards, the issuer shall present supplementary information to
quantify the effects of changing prices upon its financial condition and
results of operations.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90 Stat. 57; secs. 12, 13,
15(d), 23(a), 48 Stat. 892, 894, 895, 901; secs. 1, 3, 8, 49 Stat.
1375, 1377, 1379; sec. 203(a), 49 Stat. 704; sec. 202, 68 Stat. 686;
secs. 3, 4, 6, 78 Stat. 565-568, 569, 570-574; secs. 1, 2, 82 Stat.
454; sec. 28(c), 84 Stat. 1435; secs. 1, 2, 84 Stat. 1497; sec.
105(b), 88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat. 117, 118, 119, 155;
sec. 308(b), 90 Stat. 57; secs. 202, 203, 204, 91 Stat. 1494, 1498,
1499, 1500; secs. 8 30, 31(c), 38(a), 54 Stat. 803, 836, 838, 841; 74
Stat. 201; 84 Stat. 1415; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 78l,
78m, 78o(d), 78w(a), 80a-8, 80a-29, 80a-30(c), 80a-37(a))
(47 FR 54767, Dec. 6, 1982)
17 CFR 210.3-21 Special provisions as to financial statements of
companies engaged in marketing computer software.
(a) Companies shall not capitalize costs of internally developing
(other than under a contractual arrangement for which accounting for
contracts is appropriate) computer software as a product or process (or
a part of a product or process) to be sold, leased, or otherwise
marketed to others in financial statements included in documents
prepared pursuant to rules adopted pursuant to either the Securities Act
of 1933 or the Securities Exchange Act of 1934 and filed with or
furnished to the Commission after April 14, 1983, unless they had
disclosed the practice of capitalizing software costs in either: (1)
Audited financial statements issued prior to April 14, 1983; (2) a
report or registration statement filed with the Commission prior to
April 14, 1983; or (3) a document for an offering of securities by the
issuer, other than a registration statement, which document was used in
such offering prior to April 14, 1983.
(b) Because the term product also encompasses services that are sold,
leased, or otherwise marketed to others, the prohibition in paragraph
(a) of this section applies, for example, to a data processing service
bureau or a computer time-sharing company.
(c) A company which, pursuant to paragraph (a) of this section,
continues to follow the practice of capitalizing costs of internally
developing computer software as a product or process to be sold, leased,
or otherwise marketed to others, shall disclose for each period for
which an income statement is required to be presented, the net amount of
such costs capitalized during the period.
Note: The requirements of this rule shall not apply to financial
statements which reflect the provisions of a pronouncement adopted after
August 4, 1983 by the Financial Accounting Standards Board which
provides specific accounting guidance in this area.
(Secs. 5, 6, 7, 10, 19(a) and Schedule A (25) and (26) of the
Securities Act of 1933, 15 U.S.C. 77e, 77f, 77g, 77j, 77s(a) and 77aa
(25) and (26); secs. 12, 13, 14, 15(d), and 23(a) of the Securities
Exchange Act of 1934, 15 U.S.C. 78l, 78m, 78n, 78o(d), and 78w(a))
(48 FR 36569, Aug. 12, 1983)
17 CFR 210.3-21 Consolidated and Combined Financial Statements
17 CFR 210.3A-01 Application of 210.3A-01 to 210.3A-05.
Sections 210.3A-01 to 210.3A-05 shall govern the presentation of
consolidated and combined financial statements.
(44 FR 19386, Apr. 3, 1979. Redesignated at 45 FR 63687, Sept. 25,
1980, and amended at 50 FR 25215, June 18, 1985)
17 CFR 210.3A-02 Consolidated financial statements of the registrant
and its subsidiaries.
In deciding upon consolidation policy, the registrant must consider
what financial presentation is most meaningful in the circumstances and
should follow in the consolidated financial statements principles of
inclusion or exclusion which will clearly exhibit the financial position
and results of operations of the registrant. There is a presumption
that consolidated statements are more meaningful than separate
statements and that they are usually necessary for a fair presentation
when one entity directly or indirectly has a controlling financial
interest in another entity. Other particular facts and circumstances
may require combined financial statements, an equity method of
accounting, or valuation allowances in order to achieve a fair
presentation. In any case, the disclosures required by 210.3A-03
should clearly explain the accounting policies followed by the
registrant in this area, including the circumstances involved in any
departure from the normal practice of consolidating majority owned
subsidiaries and not consolidating entities that are less than majority
owned. Among the factors that the registrant should consider in
determining the most meaningful presentation are the following:
(a) Majority ownership: Generally, registrants shall consolidate
entities that are majority owned and shall not consolidate entities that
are not majority owned. The determination of majority ownership
requires a careful analysis of the facts and circumstances of a
particular relationship among entities. In rare situations,
consolidation of a majority owned subsidiary may not result in a fair
presentation, because the registrant, in substance, does not have a
controlling financial interest (for example, when the subsidiary is in
legal reorganization or in bankruptcy, or when control is likely to be
temporary). In other situations, consolidation of an entity,
notwithstanding the lack of technical majority ownership, is necessary
to present fairly the financial position and results of operations of
the registrant, because of the existence of a parent-subsidiary
relationship by means other than record ownership of voting stock.
(b) Different fiscal periods: Generally, registrants shall not
consolidate any entity whose financial statements are as of a date or
for periods substantially different from those of the registrant.
Rather, the earnings or losses of such entities should be reflected in
the registrant's financial statements on the equity method of
accounting. However:
(1) A difference in fiscal periods does not of itself justify the
exclusion of an entity from consolidation. It ordinarily is feasible
for such entity to prepare, for consolidation purposes, statements for a
period which corresponds with or closely approaches the fiscal year of
the registrant. Where the difference is not more than 93 days, it is
usually acceptable to use, for consolidation purposes, such entity's
statements for its fiscal period. Such difference, when it exists,
should be disclosed as follows: the closing date of the entity should
be expressly indicated, and the necessity for the use of different
closing dates should be briefly explained. Furthermore, recognition
should be given by disclosure or otherwise to the effect of intervening
events which materially affect the financial position or results of
operations.
(2) Notwithstanding the 93-day provision specified in paragraph
(b)(1) of this section, in connection with the retroactive combination
of financial statements of entities following a pooling of interests,
the financial statements of the constituents may be combined even if
their respective fiscal periods do not end within 93 days, except that
the financial statements for the latest fiscal year shall be recast to
dates which do not differ by more than 93 days, if practicable.
Disclosure shall be made of the periods combined and of the sales or
revenues, net income before extraordinary items and net income of any
interim periods excluded from or included more than once in results of
operations as a result of such recasting.
(c) Bank Holding Company Act: Registrants shall not consolidate any
subsidiary or group of subsidiaries of a registrant subject to the Bank
Holding Company Act of 1956 as amended as to which (1) a decision
requiring divestiture has been made, or (2) there is substantial
likelihood that divestiture will be necessary in order to comply with
provisions of the Bank Holding Company Act.
(d) Foreign subsidiaries: Due consideration shall be given to the
propriety of consolidating with domestic corporations foreign
subsidiaries which are operated under political, economic or currency
restrictions. If consolidated, disclosure should be made as to the
effect, insofar as this can reasonably be determined, of foreign
exchange restrictions upon the consolidated financial position and
operating results of the registrant and its subsidiaries.
(51 FR 17330, May 12, 1986)
17 CFR 210.3A-03 Statement as to principles of consolidation or
combination followed.
(a) A brief description of the principles followed in consolidating
or combining the separate financial statements, including the principles
followed in determining the inclusion or exclusion of (1) subsidiaries
in consolidated or combined financial statements and (2) companies in
consolidated or combined financial statements, shall be stated in the
notes to the respective financial statements.
(b) As to each consolidated financial statement and as to each
combined financial statement, if there has been a change in the persons
included or excluded in the corresponding statement for the preceding
fiscal period filed with the Commission which has a material effect on
the financial statements, the persons included and the persons excluded
shall be disclosed. If there have been any changes in the respective
fiscal periods of the persons included made during the periods of the
report which have a material effect on the financial statements,
indicate clearly such changes and the manner of treatment.
(37 FR 14597, July 21, 1972. Redesignated at 45 FR 63687, Sept. 25,
1980, and 46 FR 56179, Nov. 16, 1981)
17 CFR 210.3A-04 Intercompany items and transactions.
In general, there shall be eliminated intercompany items and
transactions between persons included in the (a) consolidated financial
statements being filed and, as appropriate, (b) unrealized intercompany
profits and losses on transactions between persons for which financial
statements are being filed and persons the investment in which is
presented in such statements by the equity method. If such eliminations
are not made, a statement of the reasons and the methods of treatment
shall be made.
(37 FR 14597, July 21, 1972. Redesignated at 46 FR 56179, Nov. 16,
1981)
17 CFR 210.3A-05 Special requirements as to public utility holding
companies.
There shall be shown in the consolidated balance sheet of a public
utility holding company the difference between the amount at which the
parent's investment is carried and the underlying book equity of
subsidiaries as at the respective dates of acquisition.
(37 FR 14597, July 21, 1972. Redesignated at 45 FR 63687, Sept. 25,
1980, and 46 FR 56179, Nov. 16, 1981)
17 CFR 210.3A-05 Rules of General Application
Source: Sections 210.4-01 to 210.4-10 appear at 45 FR 63669, Sept.
25, 1980, unless otherwise noted.
17 CFR 210.4-01 Form, order, and terminology.
(a) Financial statements should be filed in such form and order, and
should use such generally accepted terminology, as will best indicate
their significance and character in the light of the provisions
applicable thereto. The information required with respect to any
statement shall be furnished as a minimum requirement to which shall be
added such further material information as is necessary to make the
required statements, in the light of the circumstances under which they
are made, not misleading.
(1) Financial statements filed with the Commission which are not
prepared in accordance with generally accepted accounting principles
will be presumed to be misleading or inaccurate, despite footnote or
other disclosures, unless the Commission has otherwise provided. This
article and other articles of Regulation S-X provide clarification of
certain disclosures which must be included in any event, in financial
statements filed with the Commission.
(2) In all filings of foreign private issuers (see 230.405 of this
chapter), except as stated otherwise in the applicable form, the
financial statements may be prepared according to a comprehensive body
of accounting principles other than those generally accepted in the
United States if a reconciliation to United States generally accepted
accounting principles and the provisions of Regulation S-X of the type
specified in Item 18 of Form 20-F ( 249.220f of this chapter) is also
filed as part of the financial statements. Alternatively, the financial
statements may be prepared according to United States generally accepted
accounting principles.
(b) All money amounts required to be shown in financial statements
may be expressed in whole dollars or multiples thereof, as appropriate:
Provided, That, when stated in other than whole dollars, an indication
to that effect is inserted immediately beneath the caption of the
statement or schedule, at the top of the money columns, or at an
appropriate point in narrative material.
(c) Negative amounts (red figures) shall be shown in a manner which
clearly distinguishes the negative attribute. When determining methods
of display, consideration should be given to the limitations of
reproduction and microfilming processes.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90 Stat. 57; secs. 12, 13,
15(d), 23(a), 48 Stat. 892, 894, 895, 901; secs. 1, 3, 8, 49 Stat.
1375, 1377, 1379; sec. 203(a), 49 Stat. 704; sec. 202, 68 Stat. 686;
secs. 3, 4, 6, 78 Stat. 565-568, 569, 570-574; secs. 1, 2, 82 Stat.
454; sec. 28(c), 84 Stat. 1435; secs. 1, 2, 84 Stat. 1497; sec.
105(b), 88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat. 117, 118, 119, 155;
sec. 308(b), 90 Stat. 57; secs. 202, 203, 204, 91 Stat. 1494, 1498,
1499, 1500; secs. 8 30, 31(c), 38(a), 54 Stat. 803, 836, 838, 841; 74
Stat. 201; 84 Stat. 1415; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 78l,
78m, 78o(d), 78w(a), 80a-8, 80a-29, 80a-30(c), 80a-37(a))
(45 FR 63669, Sept. 25, 1980, as amended at 47 FR 54767, Dec. 6,
1982)
17 CFR 210.4-02 Items not material.
If the amount which would otherwise be required to be shown with
respect to any item is not material, it need not be separately set
forth. The combination of insignificant amounts is permitted.
17 CFR 210.4-03 Inapplicable captions and omission of unrequired or
inapplicable financial statements.
(a) No caption should be shown in any financial statement as to which
the items and conditions are not present.
(b) Financial statements not required or inapplicable because the
required matter is not present need not be filed.
(c) The reasons for the omission of any required financial statements
shall be indicated.
17 CFR 210.4-04 Omission of substantially identical notes.
If a note covering substantially the same subject matter is required
with respect to two or more financial statements relating to the same or
affiliated persons, for which separate sets of notes are presented, the
required information may be shown in a note to only one of such
statements: Provided, That a clear and specific reference thereto is
made in each of the other statements with respect to which the note is
required.
17 CFR 210.4-05 Current assets and current liabilities.
If a company's normal operating cycle is longer than one year,
generally recognized trade practices should be followed with respect to
the inclusion or exclusion of items in current assets or current
liabilities. An appropriate explanation of the circumstances should be
made and, if practicable, an estimate given of the amount not realizable
or payable within one year. The amounts maturing in each year (if
practicable) along with the interest rates or range of rates also shall
be disclosed.
17 CFR 210.04-06 Reacquired evidences of indebtedness.
Reacquired evidences of indebtedness shall be deducted from the
appropriate liability caption. However, reacquired evidences of
indebtedness held for pension and other special funds not related to the
particular issues may be shown as assets: Provided, That there be
stated the amount of such evidences of indebtedness, the cost thereof,
the amount at which stated, and the purpose for which acquired.
17 CFR 210.4-07 Discount on shares.
Discount on shares, or any unamortized balance thereof, shall be
shown separately as a deduction from the applicable account(s) as
circumstances require.
17 CFR 210.4-08 General notes to financial statements.
If applicable to the person for which the financial statements are
filed, the following shall be set forth on the face of the appropriate
statement or in appropriately captioned notes. The information shall be
provided for each statement required to be filed, except that the
information required by paragraphs (b), (c), (d), (e) and (f) shall be
provided as of the most recent audited balance sheet being filed and for
paragraph (j) as specified therein. When specific statements are
presented separately, the pertinent notes shall accompany such
statements unless cross-referencing is appropriate.
(a) Principles of consolidation or combination. With regard to
consolidated or combined financial statements, refer to 210.3A-01 to
3A-08 for requirements for supplemental information in notes to the
financial statements.
(b) Assets subject to lien. Assets mortgaged, pledged, or otherwise
subject to lien, and the approximate amounts thereof, shall be
designated and the obligations collateralized briefly identified.
(c) Defaults. The facts and amounts concerning any default in
principal, interest, sinking fund, or redemption provisions with respect
to any issue of securities or credit agreements, or any breach of
covenant of a related indenture or agreement, which default or breach
existed at the date of the most recent balance sheet being filed and
which has not been subsequently cured, shall be stated in the notes to
the financial statements. If a default or breach exists but
acceleration of the obligation has been waived for a stated period of
time beyond the date of the most recent balance sheet being filed, state
the amount of the obligation and the period of the waiver.
(d) Preferred shares. (1) Aggregate preferences on involuntary
liquidation, if other than par or stated value, shall be shown
parenthetically in the equity section of the balance sheet.
(2) Disclosure shall be made of any restriction upon retained
earnings that arises from the fact that upon involuntary liquidation the
aggregate preferences of the preferred shares exceeds the par or stated
value of such shares.
(e) Restrictions which limit the payment of dividends by the
registrant. (1) Describe the most significant restrictions, other than
as reported under paragraph (d) of this section, on the payment of
dividends by the registrant, indicating their sources, their pertinent
provisions, and the amount of retained earnings or net income restricted
or free of restrictions.
(2) Disclose the amount of consolidated retained earnings which
represents undistributed earnings of 50 percent or less owned persons
accounted for by the equity method.
(3) The disclosures in paragraphs (e)(3) (i) and (ii) in this section
shall be provided when the restricted net assets of consolidated and
unconsolidated subsidiaries and the parent's equity in the undistributed
earnings of 50 percent or less owned persons accounted for by the equity
method together exceed 25 percent of consolidated net assets as of the
end of the most recently completed fiscal year. For purposes of this
test, restricted net assets of subsidiaries shall mean that amount of
the registrant's proportionate share of net assets (after intercompany
eliminations) reflected in the balance sheets of its consolidated and
unconsolidated subsidiaries as of the end of the most recent fiscal year
which may not be transferred to the parent company in the form of loans,
advances or cash dividends by the subsidiaries without the consent of a
third party (i.e., lender, regulatory agency, foreign government, etc.).
Not all limitations on transferability of assets are considered to be
restrictions for purposes of this test, which considers only specific
third party restrictions on the ability of subsidiaries to transfer
funds outside of the entity. For example, the presence of subsidiary
debt which is secured by certain of the subsidiary's assets does not
constitute a restriction under this rule. However, if there are any
loan provisions prohibiting dividend payments, loans or advances to the
parent by a subsidiary, these are considered restrictions for purposes
of computing restricted net assets. When a loan agreement requires that
a subsidiary maintain certain working capital, net tangible asset, or
net asset levels, or where formal compensating arrangements exist, there
is considered to be a restriction under the rule because the lender's
intent is normally to preclude the transfer by dividend or otherwise of
funds to the parent company. Similarly, a provision which requires that
a subsidiary reinvest all of its earnings is a restriction, since this
precludes loans, advances or dividends in the amount of such
undistributed earnings by the entity. Where restrictions on the amount
of funds which may be loaned or advanced differ from the amount
restricted as to transfer in the form of cash dividends, the amount
least restrictive to the subsidiary shall be used. Redeemable preferred
stocks ( 210.5-02.28) and minority interests shall be deducted in
computing net assets for purposes of this test.
(i) Describe the nature of any restrictions on the ability of
consolidated subsidiaries and unconsolidated subsidiaries to transfer
funds to the registrant in the form of cash dividends, loans or advances
(i.e., borrowing arrangements, regulatory restraints, foreign
government, etc.).
(ii) Disclose separately the amounts of such restricted net assets
for unconsolidated subsidiaries and consolidated subsidiaries as of the
end of the most recently completed fiscal year.
(f) Significant changes in bonds, mortgages and similar debt. Any
significant changes in the authorized or issued amounts of bonds,
mortgages and similar debt since the date of the latest balance sheet
being filed for a particular person or group shall be stated.
(g) Summarized financial information of subsidiaries not consolidated
and 50 percent or less owned persons. (1) The summarized information as
to assets, liabilities and results of operations as detailed in
210.1-02(aa) shall be presented in notes to the financial statements on
an individual or group basis for (i) subsidiaries not consolidated and
(ii) for 50 percent or less owned persons accounted for by the equity
method by the registrant or by a subsidiary of the registrant, if the
criteria in 210.1-02(v) for a significant subsidiary are met (A)
individually by any subsidiary not consolidated or any 50% or less owned
person or (B) on an aggregate basis by any combination of such
subsidiaries and persons.
(2) Summarized financial information shall be presented insofar as is
practicable as of the same dates and for the same periods as the audited
consolidated financial statements provided and shall include the
disclosures prescribed by 210.1-02(aa). Summarized information of
subsidiaries not consolidated shall not be combined for disclosure
purposes with the summarized information of 50 percent or less owned
persons.
(h) Income tax expense. (1) Disclosure shall be made in the income
statement or a note thereto, of (i) the components of income (loss)
before income tax expense (benefit) as either domestic or foreign; (ii)
the components of income tax expense, including (A) taxes currently
payable and (B) the net tax effects, as applicable, of timing
differences (indicate separately the amount of the estimated tax effect
of each of the various types of timing differences, such as
depreciation, warranty costs, etc., where the amount of each such tax
effect exceeds five percent of the amount computed by multiplying the
income before tax by the applicable statutory Federal income tax rate;
other differences may be combined.)
Note: Amounts applicable to United States Federal income taxes, to
foreign income taxes and the other income taxes shall be stated
separately for each major component. Amounts applicable to foreign
income (loss) and amounts applicable to foreign or other income taxes
which are less than five percent of the total of income before taxes or
the component of tax expense, respectively, need not be separately
disclosed. For purposes of this rule, foreign income (loss) is defined
as income (loss) generated from a registrant's foreign operations, i.e.,
operations that are located outside of the registrant's home country.
(2) Provide a reconciliation between the amount of reported total
income tax expense (benefit) and the amount computed by multiplying the
income (loss) before tax by the applicable statutory Federal income tax
rate, showing the estimated dollar amount of each of the underlying
causes for the difference. If no individual reconciling item amounts to
more than five percent of the amount computed by multiplying the income
before tax by the applicable statutory Federal income tax rate, and the
total difference to be reconciled is less than five percent of such
computed amount, no reconciliation need be provided unless it would be
significant in appraising the trend of earnings. Reconciling items that
are individually less than five percent of the computed amount may be
aggregated in the reconciliation. The reconciliation may be presented
in percentages rather than in dollar amounts. Where the reporting
person is a foreign entity, the income tax rate in that person's country
of domicile should normally be used in making the above computation, but
different rates should not be used for subsidiaries or other segments of
a reporting entity. When the rate used by a reporting person is other
than the United States Federal corporate income tax rate, the rate used
and the basis for using such rate shall be disclosed.
(i) Warrants or rights outstanding. Information with respect to
warrants or rights outstanding at the date of the related balance sheet
shall be set forth as follows:
(1) Title of issue of securities called for by warrants or rights.
(2) Aggregate amount of securities called for by warrants or rights
outstanding.
(3) Date from which warrants or rights are exercisable.
(4) Price at which warrant or right is exercisable.
(j) Leased assets and lease commitments of regulated enterprises
subject to the rate-making process. (1) This section is applicable to
all regulated enterprises subject to the rate-making process that do not
record capital leases (as defined by Statement of Financial Accounting
Standards No. 13) as assets with associated liabilities.
(2) The following information shall be provided for capital leases
covered by this rule.
(i) As of the date for each required balance sheet, the aggregate
amounts of the assets and liabilities that would have been recorded in
the accounts had all leases meeting the definition of a capital lease
been recorded.
(ii) For each period for which an income statement is required, the
aggregate effect on expenses had all assets obtained through leases
meeting the definition of a capital lease been recorded as assets with
associated liabilities and any additional information management
believes is necessary as to the rate-making process.
(k) Related party transactions which affect the financial statements.
(1) Related party transactions should be identified and the amounts
stated on the face of the balance sheet, income statement, or statement
of changes in financial position.
(2) In cases where separate financial statements are presented for
the registrant, certain investees, or subsidiaries, separate disclosure
shall be made in such statements of the amounts in the related
consolidated financial statements which are (i) eliminated and (ii) not
eliminated. Also, any intercompany profits or losses resulting from
transactions with related parties and not eliminated and the effects
thereof shall be disclosed.
(l) (Reserved)
(m) Repurchase and reverse repurchase agreements -- (1) Repurchase
agreements (assets sold under agreements to repurchase). (i) If, as of
the most recent balance sheet date, the carrying amount (or market
value, if higher than the carrying amount or if there is no carrying
amount) of the securities or other assets sold under agreements to
repurchase (repurchase agreements) exceeds 10% of total assets, disclose
separately in the balance sheet the aggregate amount of liabilities
incurred pursuant to repurchase agreements including accrued interest
payable thereon.
(ii)(A) If, as of the most recent balance sheet date, the carrying
amount (or market value, if higher than the carrying amount) of
securities or other assets sold under repurchase agreements, other than
securities or assets specified in paragraph (m)(1)(ii)(B) of this
section, exceeds 10% of total assets, disclose in an appropriately
captioned footnote containing a tabular presentation, segregated as to
type of such securities or assets sold under agreements to repurchase
(e.g., U.S. Treasury obligations, U.S. Government agency obligations and
loans), the following information as of the balance sheet date for each
such agreement or group of agreements (other than agreements involving
securities or assets specified in paragraph (m)(1)(ii)(B) of this
section) maturing (1) overnight; (2) term up to 30 days; (3) term of
30 to 90 days; (4) term over 90 days and (5) demand:
(i) The carrying amount and market value of the assets sold under
agreement to repurchase, including accrued interest plus any cash or
other assets on deposit under the repurchase agreements; and
(ii) The repurchase liability associated with such transaction or
group of transactions and the interest rate(s) thereon.
(B) For purposes of paragraph (m)(1)(ii)(A) of this section only, do
not include securities or other assets for which unrealized changes in
market value are reported in current income or which have been obtained
under reverse repurchase agreements.
(iii) If, as of the most recent balance sheet date, the amount at
risk under repurchase agreements with any individual counterparty or
group of related counterparties exceeds 10% of stockholders' equity (or
in the case of investment companies, net asset value), disclose the name
of each such counterparty or group of related counterparties, the amount
at risk with each, and the weighted average maturity of the repurchase
agreements with each. The amount at risk under repurchase agreements is
defined as the excess of carrying amount (or market value, if higher
than the carrying amount or if there is no carrying amount) of the
securities or other assets sold under agreement to repurchase, including
accrued interest plus any cash or other assets on deposit to secure the
repurchase obligation, over the amount of the repurchase liability
(adjusted for accrued interest). (Cash deposits in connection with
repurchase agreements shall not be reported as unrestricted cash
pursuant to rule 5-02.1.)
(2) Reverse repurchase agreements (assets purchased under agreements
to resell). (i) If, as of the most recent balance sheet date, the
aggregate carrying amount of reverse repurchase agreements (securities
or other assets purchased under agreements to resell) exceeds 10% of
total assets: (A) Disclose separately such amount in the balance sheet;
and (B) disclose in an appropriately captioned footnote: (1) The
registrant's policy with regard to taking possession of securities or
other assets purchased under agreements to resell; and (2) whether or
not there are any provisions to ensure that the market value of the
underlying assets remains sufficient to protect the registrant in the
event of default by the counterparty and if so, the nature of those
provisions.
(ii) If, as of the most recent balance sheet date, the amount at risk
under reverse repurchase agreements with any individual counterparty or
group of related counterparties exceeds 10% of stockholders' equity (or
in the case of investment companies, net asset value), disclose the name
of each such counterparty or group of related counterparties, the amount
at risk with each, and the weighted average maturity of the reverse
repurchase agreements with each. The amount at risk under reverse
repurchase agreements is defined as the excess of the carrying amount of
the reverse repurchase agreements over the market value of assets
delivered pursuant to the agreements by the counterparty to the
registrant (or to a third party agent that has affirmatively agreed to
act on behalf of the registrant) and not returned to the counterparty,
exept in exchange for their approximate market value in a separate
transaction.
(45 FR 63669, Sept. 25, 1980, as amended at 46 FR 56179, Nov. 16,
1981; 50 FR 25215, June 18, 1985; 50 FR 49532, Dec. 3, 1985; 51 FR
3770, Jan. 30, 1986)
210.4-9 (Reserved)
17 CFR 210.4-10 Financial accounting and reporting for oil and gas
producing activities pursuant to the Federal securities laws and the
Energy Policy and Conservation Act of 1975.
This section prescribes financial accounting and reporting standards
for registrants with the Commission engaged in oil and gas producing
activities in filings under the Federal securities laws and for the
preparation of accounts by persons engaged, in whole or in part, in the
production of crude oil or natural gas in the United States, pursuant to
section 503 of the Energy Policy and Conservation Act of 1975 (42 U.S.C.
6383) (EPCA) and section 11(c) of the Energy Supply and Environmental
Coordination Act of 1974 (15 U.S.C. 796) (ESECA), as amended by section
505 of EPCA. The application of this section to those oil and gas
producing operations of companies regulated for ratemaking purposes on
an individual-company-cost-of-service basis may, however, give
appropriate recognition to differences arising because of the effect of
the ratemaking process.
Exemption. Any person exempted by the Department of Energy from any
record-keeping or reporting requirements pursuant to section 11(c) of
ESECA, as amended, is similarly exempted from the related provisions of
this section in the preparation of accounts pursuant to EPCA. This
exemption does not affect the applicability of this section to filings
pursuant to the Federal securities laws.
17 CFR 210.4-10 Definitions
(a) Definitions. The following definitions apply to the terms listed
below as they are used in this section:
(1) Oil and gas producing activities. (i) Such activities include:
(A) The search for crude oil, including condensate and natural gas
liquids, or natural gas (oil and gas) in their natural states and
original locations.
(B) The acquisition of property rights or properties for the purpose
of further exploration and/or for the purpose of removing the oil or gas
from existing reservoirs on those properties.
(C) The construction, drilling and production activities necessary to
retrieve oil and gas from its natural reservoirs, and the acquisition,
construction, installation, and maintenance of field gathering and
storage systems -- including lifting the oil and gas to the surface and
gathering, treating, field processing (as in the case of processing gas
to extract liquid hydrocarbons) and field storage. For purposes of this
section, the oil and gas production function shall normally be regarded
as terminating at the outlet valve on the lease or field storage tank;
if unusual physical or operational circumstances exist, it may be
appropriate to regard the production functions as terminating at the
first point at which oil, gas, or gas liquids are delivered to a main
pipeline, a common carrier, a refinery, or a marine terminal.
(ii) Oil and gas producing activities do not include:
(A) The transporting, refining and marketing of oil and gas.
(B) Activities relating to the production of natural resources other
than oil and gas.
(C) The production of geothermal steam or the extraction of
hydrocarbons as a by-product of the production of geothermal steam or
associated geothermal resources as defined in the Geothermal Steam Act
of 1970.
(D) The extraction of hydrocarbons from shale, tar sands, or coal.
(2) Proved oil and gas reserves. Proved oil and gas reserves are the
estimated quantities of crude oil, natural gas, and natural gas liquids
which geological and engineering data demonstrate with reasonable
certainty to be recoverable in future years from known reservoirs under
existing economic and operating conditions, i.e., prices and costs as of
the date the estimate is made. Prices include consideration of changes
in existing prices provided only by contractual arrangements, but not on
escalations based upon future conditions.
(i) Reservoirs are considered proved if economic producibility is
supported by either actual production or conclusive formation test. The
area of a reservoir considered proved includes (A) that portion
delineated by drilling and defined by gas-oil and/or oil-water contacts,
if any, and (B) the immediately adjoining portions not yet drilled, but
which can be reasonably judged as economically productive on the basis
of available geological and engineering data. In the absence of
information on fluid contacts, the lowest known structural occurrence of
hydrocarbons controls the lower proved limit of the reservoir.
(ii) Reserves which can be produced economically through application
of improved recovery techniques (such as fluid injection) are included
in the proved classification when successful testing by a pilot project,
or the operation of an installed program in the reservoir, provides
support for the engineering analysis on which the project or program was
based.
(iii) Estimates of proved reserves do not include the following: (A)
Oil that may become available from known reservoirs but is classified
separately as indicated additional reserves; (B) crude oil, natural
gas, and natural gas liquids, the recovery of which is subject to
reasonable doubt because of uncertainty as to geology, reservoir
characteristics, or economic factors; (C) crude oil, natural gas, and
natural gas liquids, that may occur in undrilled prospects; and (D)
crude oil, natural gas, and natural gas liquids, that may be recovered
from oil shales, coal, gilsonite and other such sources.
(3) Proved developed oil and gas reserves. Proved developed oil and
gas reserves are reserves that can be expected to be recovered through
existing wells with existing equipment and operating methods.
Additional oil and gas expected to be obtained through the application
of fluid injection or other improved recovery techniques for
supplementing the natural forces and mechanisms of primary recovery
should be included as proved developed reserves only after testing by a
pilot project or after the operation of an installed program has
confirmed through production response that increased recovery will be
achieved.
(4) Proved undeveloped reserves. Proved undeveloped oil and gas
reserves are reserves that are expected to be recovered from new wells
on undrilled acreage, or from existing wells where a relatively major
expenditure is required for recompletion. Reserves on undrilled acreage
shall be limited to those drilling units offsetting productive units
that are reasonably certain of production when drilled. Proved reserves
for other undrilled units can be claimed only where it can be
demonstrated with certainty that there is continuity of production from
the existing productive formation. Under no circumstances should
estimates for proved undeveloped reserves be attributable to any acreage
for which an application of fluid injection or other improved recovery
technique is contemplated, unless such techniques have been proved
effective by actual tests in the area and in the same reservoir.
(5) Proved properties. Properties with proved reserves.
(6) Unproved properties. Properties with no proved reserves.
(7) Proved area. The part of a property to which proved reserves
have been specifically attributed.
(8) Field. An area consisting of a single reservoir or multiple
reservoirs all grouped on or related to the same individual geological
structural feature and/or stratigraphic condition. There may be two or
more reservoirs in a field that are separated vertically by intervening
impervious, strata, or laterally by local geologic barriers, or by both.
Reservoirs that are associated by being in overlapping or adjacent
fields may be treated as a single or common operational field. The
geological terms structural feature and stratigraphic condition are
intended to identify localized geological features as opposed to the
broader terms of basins, trends, provinces, plays, areas-of-interest,
etc.
(9) Reservoir. A porous and permeable underground formation
containing a natural accumulation of producible oil and/or gas that is
confined by impermeable rock or water barriers and is individual and
separate from other reservoirs.
(10) Exploratory well. A well drilled to find and produce oil or gas
in an unproved area, to find a new reservoir in a field previously found
to be productive of oil or gas in another reservoir, or to extend a
known reservoir. Generally, an exploratory well is any well that is not
a development well, a service well, or a stratigraphic test well as
those items are defined below.
(11) Development well. A well drilled within the proved area of an
oil or gas reservoir to the depth of a stratigraphic horizon known to be
productive.
(12) Service well. A well drilled or completed for the purpose of
supporting production in an existing field. Specific purposes of
service wells include gas injection, water injection, steam injection,
air injection, salt-water disposal, water supply for injection,
observation, or injection for in-situ combustion.
(13) Stratigraphic test well. A drilling effort, geologically
directed, to obtain information pertaining to a specific geologic
condition. Such wells customarily are drilled without the intention of
being completed for hydrocarbon production. This classification also
includes tests identified as core tests and all types of expendable
holes related to hydrocarbon exploration. Stratigraphic test wells are
classified as (i) exploratory-type, if not drilled in a proved area, or
(ii) development-type, if drilled in a proved area.
(14) Acquisition of properties. Costs incurred to purchase, lease or
otherwise acquire a property, including costs of lease bonuses and
options to purchase or lease properties, the portion of costs applicable
to minerals when land including mineral rights is purchased in fee,
brokers' fees, recording fees, legal costs, and other costs incurred in
acquiring properties.
(15) Exploration costs. Costs incurred in identifying areas that may
warrant examination and in examining specific areas that are considered
to have prospects of containing oil and gas reserves, including costs of
drilling exploratory wells and exploratory-type stratigraphic test
wells. Exploration costs may be incurred both before acquiring the
related property (sometimes referred to in part as prospecting costs)
and after acquiring the property. Principal types of exploration costs,
which include depreciation and applicable operating costs of support
equipment and facilities and other costs of exploration activities, are:
(i) Costs of topographical, geographical and geophysical studies,
rights of access to properties to conduct those studies, and salaries
and other expenses of geologists, geophysical crews, and others
conducting those studies. Collectively, these are sometimes referred to
as geological and geophysical or G&G costs.
(ii) Costs of carrying and retaining undeveloped properties, such as
delay rentals, ad valorem taxes on properties, legal costs for title
defense, and the maintenance of land and lease records.
(iii) Dry hole contributions and bottom hole contributions.
(iv) Costs of drilling and equipping exploratory wells.
(v) Costs of drilling exploratory-type stratigraphic test wells.
(16) Development costs. Costs incurred to obtain access to proved
reserves and to provide facilities for extracting, treating, gathering
and storing the oil and gas. More specifically, development costs,
including depreciation and applicable operating costs of support
equipment and facilities and other costs of development activities, are
costs incurred to:
(i) Gain access to and prepare well locations for drilling, including
surveying well locations for the purpose of determining specific
development drilling sites, clearing ground, draining, road building,
and relocating public roads, gas lines, and power lines, to the extent
necessary in developing the proved reserves.
(ii) Drill and equip development wells, development-type
stratigraphic test wells, and service wells, including the costs of
platforms and of well equipment such as casing, tubing, pumping
equipment, and the wellhead assembly.
(iii) Acquire, construct, and install production facilities such as
lease flow lines, separators, treaters, heaters, manifolds, measuring
devices, and production storage tanks, natural gas cycling and
processing plants, and central utility and waste disposal systems.
(iv) Provide improved recovery systems.
(17) Production costs. (i) Costs incurred to operate and maintain
wells and related equipment and facilities, including depreciation and
applicable operating costs of support equipment and facilities and other
costs of operating and maintaining those wells and related equipment and
facilities. They become part of the cost of oil and gas produced.
Examples of production costs (sometimes called lifting costs) are:
(A) Costs of labor to operate the wells and related equipment and
facilities.
(B) Repairs and maintenance.
(C) Materials, supplies, and fuel consumed and supplies utilized in
operating the wells and related equipment and facilities.
(D) Property taxes and insurance applicable to proved properties and
wells and related equipment and facilities.
(E) Severance taxes.
(ii) Some support equipment or facilities may serve two or more oil
and gas producing activities and may also serve transportation,
refining, and marketing activities. To the extent that the support
equipment and facilities are used in oil and gas producing activities,
their depreciation and applicable operating costs become exploration,
development or production costs, as appropriate. Depreciation,
depletion, and amortization of capitalized acquisition, exploration, and
development costs are not production costs but also become part of the
cost of oil and gas produced along with production (lifting) costs
identified above.
(b) Costs to be capitalized if the successful efforts method of
accounting is followed. The costs of the following assets involved in
oil and gas producing activities are to be capitalized when incurred:
(1) Mineral interests in properties. Including (i) fee ownership or
a lease, concession, or other interest representing the right to extract
oil or gas subject to such terms as may be imposed by the conveyance of
that interest; (ii) royalty interests, production payments payable in
oil or gas, and other nonoperating interests in properties operated by
others; and (iii) those agreements with foreign governments or
authorities under which a reporting entity participates in the operation
of the related properties or otherwise serves as producer of the
underlying reserves (as opposed to being an independent purchaser,
broker, dealer, or importer). Properties do not include other supply
agreements or contracts that represent the right to purchase, rather
than extract, oil and gas.
(2) Wells and related equipment and facilities. Including: (i)
Costs incurred to drill and equip those exploratory wells and
exploratory-type stratigraphic test wells that have found proved
reserves and (ii) development costs, i.e., costs incurred to obtain
access to proved reserves and provide facilities for extracting,
treating, gathering, and storing the oil and gas, including the drilling
and equipping of development wells and development-type stratigraphic
test wells (whether those wells are successful or unsuccessful) and
service wells.
(3) Support equipment and facilities used in oil and gas producing
activities. Items such as seismic equipment, drilling equipment,
construction and grading equipment, vehicles, repair shops, warehouses,
supply points, camps, and division, district, or field offices.
(4) Uncompleted wells, equipment and facilities. Including costs
incurred to: (i) Drill and equip wells that are not yet completed and
(ii) acquire or construct equipment and facilities that are not yet
completed and installed.
(5) Geological and geophysical studies. G&G studies may be conducted
on a property owned by another person, in exchange for an interest in
the property if proved reserves are found or to be reimbursed if proved
reserves are not found. In such cases, the G&G costs shall be accounted
for as a receivable when incurred and, if proved reserves are found,
they shall become the cost of the proved property acquired.
(c) Assessment of unproved properties if the successful efforts
method of accounting is followed. Unproved properties shall be assessed
periodically to determine whether they have been impaired. A property
would likely be impaired, for example, if a dry hole has been drilled on
it and the reporting entity has no firm plans to continue drilling.
Also, the likelihood of partial or total impairment of a property
increases as the expiration of the lease term approaches if drilling
activity has not commenced on the property or on nearby properties.
Information that becomes available after the end of the period covered
by the financial statements but before those financial statements are
issued shall be taken into account in evaluating conditions that existed
at the balance sheet date.
(1) If the results of the assessment indicate impairment, a loss
shall be recognized by providing a valuation allowance. Impairment of
individual unproved properties whose acquisition costs are relatively
significant shall be assessed on a property-by-property basis, and an
indicated loss shall be recognized by providing a valuation allowance.
When a reporting entity has a relatively large number of unproved
properties whose acquisition costs are not individually significant, it
may not be practical to assess impairment on a property-by-property
basis, in which case the amount of loss to be recognized and the amount
of the valuation allowance needed to provide for impairment of those
properties shall be determined by amortizing those properties, either in
the aggregate or by groups, on the basis of the experience of the entity
in similar situations and other information about such factors as the
primary lease terms of those properties, the average holding period of
unproved properties, and the relative proportion of such properties on
which proved reserves have been found in the past.
(2) A property shall be reclassified from unproved properties to
proved properties when proved reserves are discovered on or otherwise
attributed to the property. Occasionally, a single property such as a
foreign lease or concession covers so vast an area that only the portion
of the property to which the proved reserves relate -- determined on the
basis of geological structural features or stratigraphic conditions --
should be reclassified from unproved to proved. For a property whose
impairment has been assessed individually, the net carrying amount
(acquisition cost minus valuation allowance) shall be reclassified to
proved properties; for properties amortized by providing a valuation
allowance on a group basis, the gross acquisition cost shall be
reclassified.
(d) Surrender or abandonment of properties if the successful efforts
method of accounting is followed. When an unproved property is
surrendered, abandoned, or otherwise deemed worthless, capitalized
acquisition costs relating thereto shall be charged against the related
allowance for impairment to the extent an allowance has been provided;
if the allowance previously provided is inadequate, a loss shall be
recognized. Normally, no gain or loss shall be recognized if only an
individual well or individual item of equipment is abandoned or retired
or if only a single lease or other part of a group of proved properties
constituting the amortization base is abandoned or retired as long as
the remainder of the property or group of properties continues to
produce oil or gas. Instead, the asset being abandoned or retired shall
be deemed to be fully amortized, and its costs shall be charged to
accumulated depreciation, depletion, or amortization. When the last
well on an individual property (if that is the amortization base) or
group of properties (if amortization is determined on the basis of an
aggregation of properties with a common geological structure) ceases to
produce and the entire property or property group is abandoned, gain or
loss shall be recognized. Occasionally, the partial abandonment or
retirement of a proved property or group of proved properties or the
abandonment or retirement of wells or related equipment or facilities
may result from a catastrophic event or other major abnormality. In
those cases, a loss shall be recognized at the time of abandonment or
retirement.
(e) Amortization of capitalized costs if the successful effects
method of accounting is followed. (1) Capitalized acquisition costs of
proved properties shall be amortized using the unit-of-production method
on the basis of total estimated units of proved oil and gas reserves.
(2) Capitalized costs of exploratory wells and exploratory-type
stratigraphic test wells that have found proved reserves and capitalized
development costs shall be amortized (depreciated) using the
unit-of-production method on the basis of total estimated units of
proved developed reserves. However, it may be more appropriate, in some
cases, to depreciate natural gas cycling and processing plants by a
method other than the unit-of-production method.
(3) Amortization, using the unit-of-production method as required by
paragraphs (e)(1) and (2) of this section, may be computed either on a
property-by-property basis or on the basis of some reasonable
aggregation of properties with a common geological structural feature or
stratigraphic condition, such as a reservoir or field. When a reporting
entity has a relatively large number of royalty interests whose
acquisition costs are not individually significant, they may be
aggregated, for purpose of computing amortization, without regard to
commonality of geological structural features or stratigraphic
conditions; if information is not available to estimate reserve
quantities applicable to royalty interests owned, a method other than
the unit-of-production method may be used to amortize their acquisition
costs. If significant development costs (such as the cost of an
off-shore production platform) are incurred in connection with a planned
group of development wells before all of the planned wells have been
drilled, it will be necessary to exclude a portion of those development
costs in determining the unit-of-production amortization rate until the
additional development wells are drilled. Similarly, it will be
necessary to exclude, in computing the amortization rate, those proved
developed reserves that will be produced only after significant
additional development costs are incurred, such as for improved recovery
systems. However, in no case should future development costs be
anticipated in computing the amortization rate. Estimated
dismantlement, restoration, and abandonment costs and estimated residual
salvage values shall be taken into account in determining amortization
and depreciation rates. For those properties or groups of properties
containing both oil reserves and gas reserves, the units of oil and gas
used to compute amortization shall be converted to a common unit of
measure on the basis of their approximate relative energy content
(without considering their relative sales values). However, if the
relative proportion of gas and oil extracted in the current period is
expected to continue throughout the remaining productive life of the
property, unit-of-production amortization may be computed on the basis
of one of the two minerals only; similarly, if either oil or gas
clearly dominates both the reserves and the current production (with
dominance determined on the basis of relative energy content),
unit-of-production amortization may be computed on the basis of the
dominant mineral only. Unit-of-production amortization rates shall be
revised whenever there is an indication of the need for revision but at
least once a year; those revisions shall be accounted for prospectively
as changes in accounting estimates.
(f) Costs to be charged to expense if the successful efforts method
of accounting is followed. Costs incurred in oil and gas producing
activities other than those described in paragraph (b) of this section
shall be charged to expense. Examples include geological and
geophysical costs, costs of carrying and retaining undeveloped
properties, dry hole and bottom hole contributions, the costs of
drilling those exploratory wells and exploratory-type stratigraphic test
wells that do not find proved reserves (see paragraph (g) of this
section), and the cost of oil and gas produced.
(g) Accounting for the costs of exploratory wells and
exploratory-type stratigraphic test wells if the successful efforts
method of accounting is followed. The costs of drilling exploratory
wells and the costs of drilling exploratory-type stratigraphic test
wells shall be capitalized as part of the reporting entity's uncompleted
wells, equipment, and facilities pending determination of whether the
well has found proved reserves. If the well has found proved reserves,
the capitalized costs of drilling the well shall become part of the
entity's wells and related equipment and facilities (even though the
well may not be completed as a producing well); if, however, the well
has not found proved reserves, the capitalized costs of drilling the
well, net of any salvage value, shall be charged to expense. The
determination of whether proved reserves are found is usually made on or
shortly after completion of drilling the well, and the capitalized costs
shall either be charged to expense or be reclassified as part of the
costs of wells and related equipment and facilities at that time.
Information that becomes available after the end of the period covered
by the financial statements but before those financial statements are
issued shall be taken into account in evaluating conditions that existed
at the balance sheet date. Occasionally, an exploratory well or an
exploratory-type stratigraphic test well may be determined to have found
oil and gas reserves, but classification of those reserves as proved
cannot be made when drilling is completed. In those cases, one of three
subparagraphs set forth below shall apply. Paragraphs (g)(1) and (2)
are intended to prohibit, in all cases, the deferral of the costs of
exploratory wells that find some oil and gas reserves merely on the
chance that some event totally beyond the entity's control will occur,
e.g., on the chance that the selling prices of oil and gas will increase
sufficiently to result in classification of reserves as proved that are
not commercially recoverable at current prices.
(1) Exploratory wells that find oil and gas reserves in an area
requiring a major capital expenditure, such as a trunk pipeline, before
production could begin. On completion of drilling, an exploratory well
may be determined to have found oil and gas reserves, but classification
of those reserves as proved depends on whether a major capital
expenditure can be justified which, in turn, depends on whether
additional exploratory wells find a sufficient quantity of additional
reserves. In that case, the cost of drilling the exploratory well shall
continue to be carried as an asset pending determination of whether
proved reserves have been found only as long as both of the following
conditions are met: (i) The well has found a sufficient quantity of
reserves to justify its completion as a producing well if the required
capital expenditure is made, and (ii) drilling of the additional
exploratory wells is under way or firmly planned for the near future.
Otherwise, the exploratory well shall be assumed to be impaired, and its
costs shall be charged to expense.
(2) All other exploratory wells that find oil and gas reserves. In
the absence of a determination as to whether the reserves that have been
found can be classified as proved, the costs of drilling such an
exploratory well shall not be carried as an asset for more than one year
following completion of drilling. If, after that year has passed, a
determination that proved reserves have been found cannot be made, the
well shall be assumed to be impaired, and its costs shall be charged to
expense.
(3) Exploratory-type stratigraphic test wells that find oil and gas
reserves. On completion of drilling, such a well may be determined to
have found oil and gas reserves, but classification of those reserves as
proved depends on whether a major capital expenditure (usually a
production platform) can be justified which, in turn, depends on whether
additional exploratory-type stratigraphic test wells find a sufficient
quantity of additional reserves. In that case, the cost of drilling the
exploratory-type stratigraphic test well shall continue to be carried as
an asset pending determination of whether proved reserves have been
found only as long as both of the following conditions are met: (i) The
well has found a quantity of reserves that would justify its completion
for production had it not been simply a stratigraphic test well, and
(ii) drilling of the additional exploratory-type stratigraphic test
wells is under way or firmly planned for the near future. Otherwise,
the exploratory-type stratigraphic test well shall be assumed to be
impaired, and its costs shall be charged to expense.
(h) Mineral property conveyances and related transactions if the
successful efforts method of accounting is followed. (1) Certain
transactions, sometimes referred to as conveyances, are in substance
borrowings repayable in cash or its equivalent and shall be accounted
for as borrowings. The following are examples of such transactions:
(i) Entities seeking supplies of oil or gas sometimes make cash
advances to operators to finance exploration in return for the right to
purchase oil or gas discovered. Funds advanced for exploration that are
repayable by offset against purchases of oil or gas discovered, or in
cash if insufficient oil or gas is produced by a specified date, shall
be accounted for as a receivable by the lender and as a payable by the
operator.
(ii) Funds advanced to an operator that are repayable in cash out of
the proceeds from a specified share of future production of a producing
property, until the amount advanced plus interest at a specified or
determinable rate is paid in full, shall be accounted for as a
borrowing. The advance is a payable for the recipient of the cash and a
receivable for the party making the advance. Such transactions, as well
as those described in paragraph (h)(5)(i) of this section, are commonly
referred to as production payments. The two types differ in substance,
however, as explained in paragraph (h)(5)(i) of this section.
(2) In the following types of conveyances, gain or loss shall not be
recognized at the time of conveyance:
(i) A transfer of assets used in oil and gas producing activities
(including both proved and unproved properties) in exchange for other
assets also used in oil and gas producing activities.
(ii) A pooling of assets in a joint undertaking intended to find,
develop, or produce oil or gas from a particular property or group of
properties.
(3) In the following types of conveyances, gain shall not be
recognized at the time of the conveyance:
(i) A part of an interest owned is sold and substantial uncertainty
exists about recovery of the costs applicable to the retained interest.
(ii) A part of an interest owned is sold and the seller has a
substantial obligation for future performance, such as an obligation to
drill a well or to operate the property without proportional
reimbursement for that portion of the drilling or operating costs
applicable to the interest sold.
(4) If a conveyance is not one of the types described in paragraphs
(h)(2) and (3) of this section, gain or loss shall be recognized unless
there are other aspects of the transaction that would prohibit such
recognition under accounting principles applicable to enterprises in
general.
(5) In accordance with paragraphs (h)(2) through (4) of this section,
the following types of transactions shall be accounted for as indicated
in each example. No attempt has been made to include the many
variations of those arrangements that occur, but paragraphs (h)(2)
through (4) of this section shall, where applicable, determine the
accounting for those other arrangements as well.
(i) Some production payments differ from those described in paragraph
(h)(1)(ii) of this section in that the seller's obligation is not
expressed in monetary terms but as an obligation to deliver, free and
clear of all expenses associated with operation of the property, a
specified quantity of oil or gas to the purchaser out of a specified
share of future production. Such a transaction is a sale of a mineral
interest for which gain shall not be recognized because the seller has a
substantial obligation for future performance. The seller shall account
for the funds received as unearned revenue to be recognized as the oil
or gas is delivered. The purchaser of such a production payment has
acquired an interest in a mineral property that shall be recorded at
cost and amortized by the unit-of-production method as delivery takes
place. The estimated oil or gas reserves and production data shall be
reported, in accordance with paragraph (k) of this section, as those of
the purchaser of the production payment and not of the seller.
(ii) An assignment of the operating interest in an unproved property
with retention of a nonoperating interest in return for drilling,
development and operation by the assignee is a pooling of assets in a
joint undertaking for which the assignor shall not recognize gain or
loss. The assignor's cost of the original interest shall become the
cost of the interest retained. The assignee shall account for all costs
incurred as specified by paragraphs (b) through (g) of this section and
shall allocate none of those costs to the mineral interest acquired. If
oil or gas is discovered, each party shall report its share of oil and
gas reserves and production, in accordance with paragraph (k) of this
section.
(iii) An assignment of a part of an operating interest in an unproved
property in exchange for a free well with provision for joint ownership
and operation is a pooling of assets in a joint undertaking by the
parties. The assigner shall record no cost for the obligatory well;
the assignee shall record no cost for the mineral interest acquired.
All drilling, development, and operating costs incurred by either party
shall be accounted for as provided in paragraphs (b) through (g) of this
section. If the conveyance agreement requires the assignee to incur
geological or geophysical expenditures instead of, or in addition to, a
drilling obligation, those costs shall likewise be accounted for by the
assignee as provided in paragraphs (b) through (g) of this section. If
reserves are discovered, each party shall report its share of reserves
and production, in accordance with paragraph (k) of this section.
(iv) A part of an operating interest in an unproved property may be
assigned to effect an arrangement called a carried interest whereby the
assignee (the carrying party) agrees to defray all costs of drilling,
developing, and operating the property and is entitled to all of the
revenue from production from the property, excluding any third party
interest, until all of the assignee's costs have been recovered, after
which the assignor will share in both costs and production. Such an
arrangement represents a pooling of assets in a joint undertaking by the
assignor and assignee. The carried party shall make no accounting for
any costs and revenue until after recoupment (payout) of the carried
costs by the carrying party. Subsequent to payout the carried party
shall account for its share of revenue, operating expenses, and (if the
agreement provides for subsequent sharing of costs rather than a carried
interest) subsequent development costs. During the payout period the
carrying party shall record all costs, including those carried, as
provided in paragraphs (b) through (g) of this section, and shall record
all revenue from the property including that applicable to the recovery
of cost carried. The carried party shall report as oil or gas reserves,
in accordance with paragraph (k) of this section, only its share of
proved reserves estimated to remain after payout, and unit-of-production
amortization of the carried party's property cost shall not commence
prior to payout. Prior to payout the carrying party's reserve estimates
and production data, reported in accordance with paragraph (k) of this
section, shall include the quantities applicable to recoupment of the
carried costs.
(v) A part of an operating interest owned may be exchanged for a part
of an operating interest owned by another party. The purpose of such an
arrangement, commonly called a joint venture in the oil and gas
industry, often is to avoid duplication of facilities, diversify risks,
and achieve operating efficiencies. Such reciprocal conveyances
represent exchanges of similar productive assets, and no gain or loss
shall be recognized by either party at the time of the transaction. In
some joint ventures which may or may not involve an exchange of
interests, the parties may share different elements of costs in
different proportions. In such an arrangement a party may acquire an
interest in a property or in wells and related equipment that is
disproportionate to the share of costs borne by it. As in the case of a
carried interest or a free well, each party shall account for its own
cost under the provisions of this section. No gain shall be recognized
for the acquisition of an interest in joint assets, the cost of which
may have been paid in whole or in part by another party.
(vi) In a unitization all of the operating and nonoperating
participants pool their assets in a producing area (normally a field) to
form a single unit and in return receive an undivided interest (of the
same type as previously held) in that unit. Unitizations generally are
undertaken to obtain operating efficiencies and to enhance recovery of
reserves, often through improved recovery operations. Participation in
the unit is generally proportionate to the oil and gas reserves
contributed by each. Because the properties may be in different stages
of development at the time of unitization, some participants may pay
cash and others may receive cash to equalize contributions of wells and
related equipment and facilities with the ownership interests in
reserves. In those circumstances, cash paid by a participant shall be
recorded as an additional investment in wells and related equipment and
facilities, and cash received by a participant shall be recorded as a
recovery of cost. The cost of the assets contributed plus or minus cash
paid or received is the cost of the participant's undivided interest in
the assets of the unit. Each participant shall include its interest in
reporting reserve estimates and production data.
(vii) If the entire interest in an unproved property is sold for cash
or cash equivalent, recognition of gain or loss depends on whether, in
applying paragraph (c) of this section, impairment had been assessed for
that property individually, or by amortizing that property as part of a
group. If impairment was assessed individually, gain or loss shall be
recognized. For a property amortized by providing a valuation allowance
on a group basis, neither gain nor loss shall be recognized when an
unproved property is sold unless the sales price exceeds the original
cost of the property, in which case gain shall be recognized in the
amount of such excess.
(viii) If a part of the interest in an unproved property is sold,
even though for cash or cash equivalent, substantial uncertainty usually
exists as to recovery of the cost applicable to the interest retained.
Consequently, the amount received shall be treated as a recovery of
cost. However, if the sales price exceeds the carrying amount of a
property whose impairment has been assessed individually in accordance
with paragraph (c) of this section, or exceeds the original cost of a
property amortized by providing a valuation allowance on a group basis,
gain shall be recognized in the amount of such excess.
(ix) The sale of an entire interest in a proved property that
constitutes a separate amortization base is not one of the types of
conveyances described in paragraphs (h)(2) and (h)(3) of this section.
The difference between the amount of sales proceeds and the unamortized
cost shall be recognized as a gain or loss.
(x) The sale of a part of a proved property, or of an entire proved
property constituting a part of an amortization base, shall be accounted
for as the sale of an asset, and a gain or loss shall be recognized,
since it is not one of the conveyances described in paragraphs (h)(2)
and (h)(3) of this section. The unamortized cost of the property or
group of properties a part of which was sold shall be apportioned to the
interest sold and the interest retained on the basis of the fair values
of those interests. However, the sale may be accounted for as a normal
retirement under the provisions of paragraph (d) of this section with no
gain or loss recognized if doing so does not significantly affect the
unit-of-production amortization rate.
(xi) The sale of the operating interest in a proved property for cash
with retention of a nonoperating interest is not one of the types of
conveyances described in paragraphs (h)(2) and (h)(3) of this section.
Accordingly, it shall be accounted for as the sale of an asset, and any
gain or loss shall be recognized. The seller shall allocate the cost of
the proved property to the operating interest sold and the nonoperating
interest retained on the basis of the fair values of those interests.
(xii) The sale of a proved property subject to a retained production
payment that is expressed as a fixed sum of money payable only from a
specified share of production from that property, with the purchaser of
the property obligated to incur the future costs of operating the
property, shall be accounted for as follows: If satisfaction of the
retained production payment is reasonably assured, the seller of the
property, who retained the production payment, shall record the
transaction as a sale, with recognition of any resulting gain or loss.
The retained production payment shall be recorded as a receivable, at an
amount reflecting appropriate consideration of imputed interest thereon.
The purchaser shall record as the cost of the assets acquired the cash
consideration paid plus the present value of the retained production
payment, which shall be recorded as a payable. The oil and gas reserve
estimates and production data, including those applicable to liquidation
of the retained production payment, shall be reported by the purchaser
of the property. If satisfaction of the retained production payment is
not reasonably assured, the transaction is in substance a sale with
retention of an overriding royalty that shall be accounted for in
accordance with paragraph (h)(5)(xi) of this section.
(xiii) The sale of a proved property subject to a retained production
payment that is expressed as a right to a specified quantity of oil or
gas out of a specified share of future production shall be accounted for
in accordance with paragraph (h)(5)(xi) of this section.
(i) Application of the full cost method of accounting. A reporting
entity that follows the full cost method shall apply that method to all
of its operations and to the operations of its subsidiaries, as follows:
(1) Determination of cost centers. Cost centers shall be established
on a country-by-country basis.
(2) Costs to be capitalized. All costs associated with property
acquisition, exploration, and development activities (as defined in
paragraph (a) of this section) shall be capitalized within the
appropriate cost center. Any internal costs that are capitalized shall
be limited to those costs that can be directly identified with
acquisition, exploration, and development activities undertaken by the
reporting entity for its own account, and shall not include any costs
related to production, general corporate overhead, or similar
activities.
(3) Amortization of capitalized costs. Capitalized costs within a
cost center shall be amortized on the unit-of-production basis using
proved oil and gas reserves, as follows:
(i) Costs to be amortized shall include (A) all capitalized costs,
less accumulated amortization, other than the cost of properties
described in paragraph (ii) below; (B) the estimated future
expenditures (based on current costs) to be incurred in developing
proved reserves; and (C) estimated dismantlement and abandonment costs,
net of estimated salvage values.
(ii) The cost of investments in unproved properties and major
development projects may be excluded from capitalized costs to be
amortized, subject to the following:
(A) All costs directly associated with the acquisition and evaluation
of unproved properties may be excluded from the amortization computation
until it is determined whether or not proved reserves can be assigned to
the properties, subject to the following conditions:
(1) Until such a determination is made, the properties shall be
assessed at least annually to ascertain whether impairment has occurred.
Unevaluated properties whose costs are individually significant shall
be assessed individually. Where it is not practicable to individually
assess the amount of impairment of properties for which costs are not
individually significant, such properties may be grouped for purposes of
assessing impairment. Impairment may be estimated by applying factors
based on historical experience and other data such as primary lease
terms of the properties, average holding periods of unproved properties,
and geographic and geologic data to groupings of individually
insignificant properties and projects. The amount of impairment
assessed under either of these methods shall be added to the costs to be
amortized.
(2) The costs of drilling exploratory dry holes shall be included in
the amortization base immediately upon determination that the well is
dry.
(3) If geological and geophysical costs cannot be directly associated
with specific unevaluated properties, they shall be included in the
amortization base as incurred. Upon complete evaluation of a property,
the total remaining excluded cost (net of any impairment) shall be
included in the full cost amortization base.
(B) Certain costs may be excluded from amortization when incurred in
connection with major development projects expected to entail
significant costs to ascertain the quantities of proved reserves
attributable to the properties under development (e.g., the installation
of an offshore drilling platform from which development wells are to be
drilled, the installation of improved recovery programs, and similar
major projects undertaken in the expectation of significant additions to
proved reserves). The amounts which may be excluded are applicable
portions of (1) the costs that relate to the major development project
and have not previously been included in the amortization base, and (2)
the estimated future expenditures associated with the development
project. The excluded portion of any common costs associated with the
development project should be based, as is most appropriate in the
circumstances, on a comparison of either (i) existing proved reserves to
total proved reserves expected to be established upon completion of the
project, or (ii) the number of wells to which proved reserves have been
assigned and total number of wells expected to be drilled. Such costs
may be excluded from costs to be amortized until the earlier
determination of whether additional reserves are proved or impairment
occurs.
(C) Excluded costs and the proved reserves related to such costs
shall be transferred into the amortization base on an ongoing
(well-by-well or property-by-property) basis as the project is evaluated
and proved reserves established or impairment determined. Once proved
reserves are established, there is no further justification for
continued exclusion from the full cost amortization base even if other
factors prevent immediate production or marketing.
(iii) Amortization shall be computed on the basis of physical units,
with oil and gas converted to a common unit of measure on the basis of
their approximate relative energy content, unless economic circumstances
(related to the effects of regulated prices) indicate that use of units
of revenue is a more appropriate basis of computing amortization. In
the latter case, amortization shall be computed on the basis of current
gross revenues (excluding royalty payments and net profits
disbursements) from production in relation to future gross revenues,
based on current prices (including consideration of changes in existing
prices provided only by contractual arrangements), from estimated
production of proved oil and gas reserves. The effect of a significant
price increase during the year on estimated future gross revenues shall
be reflected in the amortization provision only for the period after the
price increase occurs.
(iv) In some cases it may be more appropriate to depreciate natural
gas cycling and processing plants by a method other than the
unit-of-production method.
(v) Amortization computations shall be made on a consolidated basis,
including investees accounted for on a proportionate consolidation
basis. Investees accounted for on the equity method shall be treated
separately.
(4) Limitation on capitalized costs. (i) For each cost center,
capitalized costs, less accumulated amortization and related deferred
income taxes, shall not exceed an amount (the cost center ceiling) equal
to the sum of: (A) The present value of future net revenues from
estimated production of proved oil and gas reserves as defined in
paragraph (k)(6) of this section; plus (B) the cost of properties not
being amortized pursuant to paragraph (i)(3)(ii) of this section; plus
(C) the lower of cost or estimated fair value of unproved properties
included in the costs being amortized; less (D) income tax effects
related to differences between the book and tax basis of the properties
involved.
(ii) If unamortized costs capitalized within a cost center, less
related deferred income taxes, exceed the cost center ceiling, the
excess shall be charged to expense and separately disclosed during the
period in which the excess occurs. Amounts thus required to be written
off shall not be reinstated for any subsequent increase in the cost
center ceiling.
(5) Production costs. All costs relating to production activities,
including workover costs incurred solely to maintain or increase levels
of production from an existing completion interval, shall be charged to
expense as incurred.
(6) Other transactions. The provisions of paragraph (h) of this
section, ''Mineral property conveyances and related transactions if the
successful efforts method of accounting is followed,'' shall apply also
to those reporting entities following the full cost method except as
follows:
(i) Sales and abandonments of oil and gas properties. Sales of oil
and gas properties, whether or not being amortized currently, shall be
accounted for as adjustments of capitalized costs, with no gain or loss
recognized, unless such adjustments would significantly alter the
relationship between capitalized costs and proved reserves of oil and
gas attributable to a cost center. For instance, a significant
alteration would not ordinarily be expected to occur for sales involving
less than 25 percent of the reserve quantities of a given cost center.
If gain or loss is recognized on such a sale, total capitalization costs
within the cost center shall be allocated between the reserves sold and
reserves retained on the same basis used to compute amortization, unless
there are substantial economic differences between the properties sold
and those retained, in which case capitalized costs shall be allocated
on the basis of the relative fair values of the properties.
Abandonments of oil and gas properties shall be accounted for as
adjustments of capitalized costs; that is, the cost of abandoned
properties shall be charged to the full cost center and amortized
(subject to the limitation on capitalized costs in paragraph (b) of this
section).
(ii) Purchases of reserves. Purchases of oil and gas reserves in
place ordinarily shall be accounted for as additional capitalized costs
within the applicable cost center; however, significant purchases of
production payments or properties with lives substantially shorter than
the composite productive life of the cost center shall be accounted for
separately.
(iii) Partnerships, joint ventures and drilling arrangements. (A)
Except as provided in paragraph (i)(6)(i) of this section, all
consideration received from sales or transfers of properties in
connection with partnerships, joint venture operations, or various other
forms of drilling arrangements involving oil and gas exploration and
development activities (e.g., carried interest, turnkey wells,
management fees, etc.) shall be credited to the full cost account,
except to the extent of amounts that represent reimbursement of
organization, offering, general and administrative expenses, etc., that
are identifiable with the transaction, if such amounts are currently
incurred and charged to expense.
(B) Where a registrant organizes and manages a limited partnership
involved only in the purchase of proved developed properties and
subsequent distribution of income from such properties, management fee
income may be recognized provided the properties involved do not require
aggregate development expenditures in connection with production of
existing proved reserves in excess of 10% of the partnership's recorded
cost of such properties. Any income not recognized as a result of this
limitation would be credited to the full cost account and recognized
through a lower amortization provision as reserves are produced.
(iv) Other services. No income shall be recognized in connection
with contractual services performed (e.g. drilling, well service, or
equipment supply services, etc.) in connection with properties in which
the registrant or an affiliate (as defined in 210.1-02(b)) holds an
ownership or other economic interest, except as follows:
(A) Where the registrant acquires an interest in the properties in
connection with the service contract, income may be recognized to the
extent the cash consideration received exceeds the related contract
costs plus the registrant's share of costs incurred and estimated to be
incurred in connection with the properties. Ownership interests
acquired within one year of the date of such a contract are considered
to be acquired in connection with the service for purposes of applying
this rule. The amount of any guarantees or similar arrangements
undertaken as part of this contract should be considered as part of the
costs related to the properties for purposes of applying this rule.
(B) Where the registrant acquired an interest in the properties at
least one year before the date of the service contract through
transactions unrelated to the service contract, and that interest is
unaffected by the service contract, income from such contract may be
recognized subject to the general provisions for elimination of
inter-company profit under generally accepted accounting principles.
(C) Notwithstanding the provisions of paragraphs (i)(6)(iv) (A) and
(B) of this section, no income may be recognized for contractual
services performed on behalf of investors in oil and gas producing
activities managed by the registrant or an affiliate. Furthermore, no
income may be recognized for contractual services to the extent that the
consideration received for such services represents an interest in the
underlying property.
(D) Any income not recognized as a result of these rules would be
credited to the full cost account and recognized through a lower
amortization provision as reserves are produced.
(7) Disclosures. Reporting entities that follow the full cost method
of accounting shall disclose all of the information required by
paragraph (k) of this section, with each cost center considered as a
separate geographic area, except that reasonable groupings may be made
of cost centers that are not significant in the aggregate. In addition:
(i) For each cost center for each year that an income statement is
required, disclose the total amount of amortization expense (per
equivalent physical unit of production if amortization is computed on
the basis of physical units or per dollar of gross revenue from
production if amortization is computed on the basis of gross revenue).
(ii) State separately on the face of the balance sheet the aggregate
of the capitalized costs of unproved properties and major development
projects that are excluded, in accordance with paragraph (i)(3) of this
section, from the capitalized costs being amortized. Provide a
description in the notes to the financial statements of the current
status of the significant properties or projects involved, including the
anticipated timing of the inclusion of the costs in the amortization
computation. Present a table that shows, by category of cost, (A) the
total costs excluded as of the most recent fiscal year; and (B) the
amounts of such excluded costs, incurred (1) in each of the three most
recent fiscal years and (2) in the aggregate for any earlier fiscal
years in which the costs were incurred. Categories of cost to be
disclosed include acquisition costs, exploration costs, development
costs in the case of significant development projects and capitalized
interest.
(j) Income taxes. Comprehensive interperiod income tax allocation by
the deferred method shall be followed for intangible drilling and
development costs and other costs incurred that enter into the
determination of taxable income and pretax accounting income in
different periods. The excess of statutory depletion over cost
depletion for income tax purposes shall be accounted for as a permanent
difference in the period in which the excess is deducted for income tax
purposes.
(k) Disclosure of oil and gas reserve information and historical
financial data. The information specified by paragraphs (k)(1) through
(4) of this section shall be disclosed in the body of the financial
statements, in the notes thereto, or in a separate schedule or other
presentation that is an integral part of the financial statements. The
information in paragraphs (k)(5) through (8) of this section is not
required to be audited and may be reported as supplementary information
accompanying, but outside, the financial statements.
Exemption. This paragraph shall not apply to filings under the
federal securities laws by any registrant meeting all of the conditions
described below for each of the two most recent fiscal years, based on
its annual consolidated financial statements:
(i) Gross revenues from sales or transfers of oil and gas (as defined
in paragraph (k)(4)(ii) of this section) do not exceed 10 percent of
total revenues;
(ii) Income after taxes (but before extraordinary items) from oil and
gas producing activities, including amounts applicable to investees
accounted for under the equity method, does not exceed 10 percent of
consolidated income before extraordinary items; and
(iii) The ''Present Value of Estimated Future Net Revenues'' (see
paragraph (k)(6)(ii) of this section), including amounts attributable to
investees accounted for under the equity method, plus the net
capitalized costs of unproved properties, do not exceed 10 percent of
total assets.
(1) Disclosure of method of accounting. The reporting entity shall
disclose on the face of its balance sheet that it is adhering to the
successful efforts method of accounting or the full cost method of
accounting.
(2) Disclosure of capitalized costs. The aggregate amount of
capitalized costs relating to oil and gas producing activities and the
aggregate amount of the related accumulated depreciation, depletion,
amortization, and valuation allowances shall be reported as of the end
of each period for which a complete set of (annual or interim) financial
statements is presented, with separate presentation for each geographic
area for which quantities of proved reserves are presented in accordance
with paragraph (k)(5) of this section. If the capitalized costs of
unproved properties are significant, aggregate amounts shall be reported
separately for capitalized costs related to unproved properties and
capitalized costs related to proved properties. Capitalized costs of
support equipment and facilities may be disclosed separately or
included, as appropriate, with capitalized costs of proved and unproved
properties.
(3) Disclosure of costs incurred in oil and gas producing activities.
The financial statements shall disclose the amounts of each of the
following types of costs for each year for which an income statement is
required (whether those costs are capitalized or charged to expense at
the time they are incurred):
(i) Property acquisition costs (disclose separately the costs of
acquiring proved properties, if significant).
(ii) Exploration costs.
(iii) Development costs.
(iv) Production (lifting) costs.
Exploration, development, and production costs include depreciation
of support equipment and facilities used in those activities rather than
the expenditures to acquire support equipment and facilities.
Production (lifting) costs do not include depreciation, depletion, and
amortization of capitalized acquisition, exploration, and development
costs. If some or all of those costs are incurred in foreign countries,
the amounts shall be disclosed separately for each of the geographic
areas for which reserve quantities are disclosed in accordance with
paragraph (k)(5) of this section and for any other foreign geographic
area in which significant costs have been incurred without discovery of
significant proved reserves. Also, disclose the aggregate amount of
depreciation, depletion, amortization, and valuation provisions relating
to oil and gas producing activities, presented separately for each of
these geographic areas. If the reporting entity's share of the oil and
gas reserves of its investee companies accounted for by the equity
method is reported in conformity with paragraph (k)(5) of this section,
disclosure shall also be made of the investor's share of its investee's
capitalized costs and costs incurred in oil and gas producing
activities.
(4) Revenues from producing oil and gas. (i) For each full fiscal
year for which an income statement is required, disclose, for each
geographic area for which reserve quantities are disclosed in accordance
with paragraph (k)(5) of this section, the net revenues from oil and gas
production related to each of the following, if significant: (A) Proved
developed oil and gas reserves, (B) reserves applicable to long-term
supply or similar agreements with foreign governments in which the
entity acts as producer (see paragraph (k)(5) of this section), and (C)
the entity's proportional interest in reserves of investees accounted
for by the equity method.
(ii) Net revenues shall be computed by subtracting production
(lifting) costs from gross revenues that are determined in accordance
with the provisions of this subparagraph, as presented below. The
following accounting practices shall be applied in determining gross
revenues from sales or transfers of production of oil and gas:
(A) Sales to unaffiliated entities shall be included in gross
revenues at the amount received in sales transactions attributable to
net working interests, royalty interests, oil payments interests (see
paragraph (h) of this section), net profits interests, etc., of the
reporting entity. Production or severance taxes should not be deducted
in determining gross revenues. Royalty payments and net profits
disbursements should be excluded from gross revenues.
(B) Sales and transfers to unconsolidated affiliated persons and to
other operations (such as refineries, chemical plants, etc.) of the
reporting entity shall be separately disclosed and accounted for in the
same manner as described in paragraph (k)(4)(ii)(A) of this section
except that such sales and transfers shall be valued at estimated market
prices based on the prices of comparable products using posted field
prices, if applicable, or amounts estimated to represent prices
equivalent to those that could be obtained in a competitive arm's-length
market environment, giving recognition to transportation costs, quality
differences, and arrangements with and regulation by governments.
(5) Disclosure of estimated quantities of proved oil and gas
reserves. Net quantities of proved reserves and proved developed
reserves of crude oil (including condensate and natural gas liquids) and
natural gas shall be reported as of the beginning and the end of each
fiscal year for which an income statement is required. Net quantities
of reserves include those relating to the operating and non-operating
interests in properties as defined in paragraph (b)(1) of this section.
Quantities of reserves relating to royalty interests owned shall be
included in net quantities if the necessary information is available;
if reserves relating to royalty interests owned are not included because
the information is unavailable, that fact and the reporting entity's
share of oil and gas produced for those royalty interests shall be
reported for each year for which a complete set of financial statements
is presented. Net quantities shall not include reserves relating to
interests of others in properties owned by the reporting entity.
(i) Changes in the net quantities of proved reserves of oil and of
gas during each fiscal year for which an income statement is required
shall be reported. Changes resulting from each of the following shall
be shown separately, with appropriate explanation of significant
changes:
(A) Revisions of previous estimates. Revisions represent changes in
previous estimates of proved reserves, either upward or downward,
resulting from new information (except for an increase in proved
acreage) normally obtained from development drilling and production
history or resulting from a change in economic factors.
(B) Improved recovery. Changes in reserve estimates resulting from
application of improved recovery techniques shall be separately shown if
significant. If not significant, such changes shall be included in
revisions of previous estimates.
(C) Purchases of minerals-in-place.
(D) Extensions, discoveries, and other additions. Additions to
proved reserves that result from extension of the proved acreage of
previously discovered (old) reservoirs through additional drilling in
periods subsequent to discovery and discovery of new fields with proved
reserves or of new reservoirs of proved reserves in old fields.
(E) Production.
(F) Sales of minerals in-place.
(ii) If the reporting entity's proved reserves of oil and gas are
located entirely within its home country, that fact shall be disclosed.
If some or all of its reserves are located in foreign countries, the
disclosures of net quantities of reserves of oil and gas and changes in
them (as required above) shall be separately reported for the entity's
home country (if significant reserves are located there) and each
foreign geographic area in which significant reserves are located.
Foreign geographic areas are individual countries or groups of
countries, as appropriate, for meaningful disclosure in the
circumstances.
(iii) Net quantities disclosed shall not include oil or gas subject
to purchase under long-term supply, purchase, or similar agreements and
contracts, including such agreements with foreign governments or
authorities. However, quantities of oil and gas subject to such
agreements with foreign governments or authorities as of the end of each
fiscal year for which an income statement is required, and the net
quantity of oil or gas received under the agreements during each such
year, shall be separately disclosed if the reporting entity participates
in the operation of the properties in which the oil or gas is located or
otherwise serves as the producer of those reserves, as opposed, for
example, to being an independent purchaser, broker, dealer, or importer.
(iv) In determining the reserve quantities to be reported:
(A) If consolidated financial statements are issued, 100 percent of
the net reserve quantities attributable to the parent company and 100
percent of the net reserve quantities attributable to its consolidated
subsidiaries (whether or not wholly owned) shall be included.
(B) If the financial statements include investments that are
proportionately consolidated, reserve quantities shall include a
proportionate share of the investee's net oil and gas reserves.
(C) If the financial statements include investments that are
accounted for by the equity method, the investee's net proved oil and
gas reserves shall not be included in the disclosures of reserves.
However, the reporting entity's share of the investee's net proved oil
and gas reserves shall be separately reported as of the end of each
fiscal year for which an income statement is required.
(v) If important economic factors or significant uncertainties affect
particular components of proved reserves, explanations shall be
provided. Examples include unusually high expected development or
lifting costs; the necessity to build a major pipeline or other major
facilities before production of the reserves can begin; or contractual
obligations to produce and sell a significant portion of reserves at
prices that are substantially below those at which the oil and gas could
otherwise be sold in the absence of the contractual obligation.
(vi) In reporting reserve quantities and changes in them, oil
reserves (which include condensate and natural gas liquids) shall be
stated in barrels, and gas reserves in cubic feet.
(vii) If any foreign government restricts the disclosure of estimated
reserves for properties under its governmental authority, or amounts
under long-term supply, purchase, or similar agreements, or if the
foreign government requires the disclosure of reserves other than
proved, the registrant should identify the country, cite the law or
regulation which restricts or requires such disclosure, and indicate
that the reported reserve estimates or amounts do not include figures
for the named country or that reserve estimates include reserves other
than proved.
(6) Disclosure of future net revenues from estimated production of
proved oil and gas reserves. In conjunction with the disclosure of
changes in net quantities of estimated proved reserves of crude oil
(including condensate and natural gas liquids) and natural gas as
required by paragraph (k)(5) of this section, the following information
shall be disclosed in financial statements for each geographic
classification for which quantities of oil and gas are disclosed:
(i) For each of the following categories: (A) Proved oil and gas
reserves, (B) proved developed oil and gas reserves, (C) proved oil and
gas applicable to long-term supply or similar agreements with foreign
governments in which the entity acts as producer, and (D) the entity's
share of proved oil and gas reserves of investees accounted for by the
equity method, an amount (the ''Estimated Future Net Revenues''), in the
aggregate, computed by applying current prices of oil and gas (with
consideration of price changes only to the extent provided by
contractual arrangements) to estimated future production of proved oil
and gas reserves as of the date of the latest balance sheet presented,
less estimated future expenditures (based on current costs) to be
incurred in developing and producing the proved reserves, and assuming
continuation of existing economic conditions. Present separately the
amounts applicable to each of the first three succeeding fiscal years,
and the remainder in a single amount. Indicate the basis used to
compute current prices and current costs.
(ii) The present value of the Estimated Future Net Revenues (the
''Present Value of Estimated Future Net Revenues''), as of the end of
each fiscal year for which an income statement is required, computed
using a discount factor of ten percent, for each of the categories for
which Estimated Future Net Revenues are disclosed pursuant to paragraph
(k)(6)(i) of this section.
(iii) Any additional information of which management is aware and
which it believes is necessary to prevent the above information from
being misleading.
(7) Summary of oil and gas producing activities. For each fiscal
year for which an income statement is required a summary shall be
presented that sets forth the current year's additions and revisions to
the Present Value of Estimated Future Net Revenues, and the costs
associated with the additions and revisions to proved oil and gas
reserves, together with all costs determined to be nonproductive during
the period. Identify separately the total of extensions, discoveries
and additions; revisions of previous estimates; and accretion of
discount. A provision for income taxes shall be deducted from the
difference between total additions and revisions and the total amount of
current period expenses. For purposes of this requirement, the
following rules shall apply:
(i) Additions from current exploration and development activities
shall be computed by applying current prices of oil and gas (as of the
end of the period) to estimated future production of proved oil and gas
reserves added during the period and discounting the result at a rate of
10 percent. Estimated future development and production costs may
either be deducted in determining additions or reported separately as
expenses of the current period.
(ii) Revisions shall include the effects of all changes in Present
Value of Estimated Future Net Revenues resulting from changes in
estimates during the period, including differences between
beginning-of-year valuations and actual proceeds or costs. Amounts
attributable to changes in prices during the period shall be reported
separately from other revisions. Significant gains on sales of
reserves-in-place shall also be disclosed. A narrative description
shall be provided of the major factors causing other revisions (e.g.,
changes in estimated future costs, quantities, rates of production,
etc.).
(iii) Property acquisition costs shall be charged to expense at the
time the property is determined to have proved reserves of oil or gas,
or when evidence of impairment is ascertained pursuant to the criteria
of paragraphs (c) and (d) of this section. In cases involving major
leasehold costs for properties being evaluated, an allocation may be
made of the leasehold costs between initial discoveries of proved
reserves and reserves expected to be proved.
(iv) Consistent with the provisions of paragraph (g) of this section
for the successful efforts method of accounting, costs of uncompleted
exploratory wells shall be deferred pending determination of whether or
not the well has found proved reserves. At the time such determination
is made, the deferred costs of drilling the well shall be charged to
expense. Other current exploration costs (e.g., geological and
geophysical costs, costs of carrying and retaining undeveloped
properties, dry hole and bottom hole contributions, and the costs of
drilling exploratory wells that do not find proved reserves) shall be
included in expenses of the period.
(v) Expenses of the period shall include all development costs
(including the discounted present value of estimated future development
costs not deducted in measuring additions to proved reserves) associated
with current extensions and discoveries, plus any development costs
determined to be non-productive. Major development projects (e.g., the
installation of an offshore drilling platform from which development
wells are to be drilled, the installation of improved recovery programs,
etc.) may require that significant costs be incurred prior to
ascertaining the quantities of proved reserves attributable to the
properties. In such cases, a portion of the development costs may be
deferred until the proved reserves added as a result of the project are
ascertainable or until it is determined that impairment has occurred
(with any impairment being charged to expense). Costs deferred shall be
based on the relationship of identified proved reserves to the
anticipated future additions to proved reserves used in evaluating the
economic feasibility of the project.
(vi) Purchases of oil and gas properties may involve payment of an
amount different from the Present Value of Estimated Future Net Revenues
as computed under paragraph (k)(6) of this section. Where appropriate,
an allocation of the purchase price shall be made between proved
properties and unproved properties. Any remaining excess of the
allocated purchase price over the computed present value as of the date
of purchase shall be capitalized and offset against subsequent upward
revisions to the present value of the related properties (or expensed
when impairment is determined to have occurred). If the purchase price
is less than the computed present value, the difference shall be
deferred and amortized over the estimated life of the properties, unless
earlier used to offset downward revisions to estimated present values.
Disclosure shall be made of excess purchase costs capitalized during the
period and the aggregate amount of such deferred costs at the end of the
period.
(vii) Significant gains or losses on the sale of unproved properties,
recognized in accordance with paragraph (h) of this section, shall be
reported separately in the summary.
(viii) The provision for income taxes shall be computed by first
applying current statutory tax rates to the future taxable income to be
generated from producing proved reserves (the Present Value of Estimated
Future Net Revenues less the current tax basis of the properties
involved and related carry-forwards) as of the end of the year, giving
effect to applicable permanent differences (such as the effect of
statutory depletion and investment tax credits), and deducting the
similarly computed amount as of the beginning of the year. To this
amount shall be added the current tax provision for oil and gas
producing activities during the year.
(ix) The summary shall generally include all items of revenue and
expense applicable to oil and gas producing activities, but should not
include other oil and gas operations, operations in other business
segments, or extraordinary items. Corporate administrative expense and
interest expense, however, may be allocated to oil and gas producing
operations and reported separately in the summary. Proved reserves of
oil and gas applicable to long-term supply agreements with foreign
governments in which the entity acts as producer shall be included in
the summary, unless the registrant concludes that the nature of its
arrangements with the foreign government justifies exclusion.
Operations of investees accounted for by the equity method shall be
included unless insignificant to the registrant's total operations. A
narrative description of the nature of any excluded operations shall be
provided.
(x) Report the pre-tax profit contribution reflected in the primary
financial statements for the oil and gas producing activities
corresponding to the pre-tax amount reported in the supplemental
summary.
(xi) Disclose the aggregate property acquisition costs, costs of
uncompleted exploratory wells and major development costs that have been
deferred pending determination of proved reserves, in accordance with
paragraphs (k)(7) (iii), (iv), and (v) of this section. Also, indicate
the amount of any valuation allowances provided during the period with
respect to these properties and the aggregate amount of such valuation
allowances at the end of the most recent period.
(8) Summary of changes in Present Value of Estimated Future Net
Revenues. For each fiscal year for which an income statement is
presented, provide a reconciliation between the total Present Value of
Estimated Future Net Revenues of an entity's proved oil and gas reserves
at the beginning and end of the year. Changes resulting from each of
the following shall be shown separately:
(i) The total of additions, revisions and accretion of discount,
computed in accordance with paragraph (k)(7) of this section, less
related estimated future development and production costs;
(ii) Purchases of minerals-in-place;
(iii) Previously estimated future development costs incurred during
the year;
(iv) Sales of oil and gas and value of transfers, net of production
costs; and
(v) Proceeds from sales of minerals-in-place.
(9) Safe harbor provision. Disclosures made pursuant or supplemental
to the requirements of paragraphs (k) (6), (7) and (8) of this section
relating to future net revenues from estimated production of proved oil
and gas reserves, the present value of estimated future net revenues,
and the summaries of oil and gas producing activities and changes in
present value of estimated future net revenues, shall be deemed not to
be an untrue statement of a material fact; a statement false or
misleading with respect to any material fact; an omission to state a
material fact necessary to make a statement not misleading; or the
employment of a manipulative, deceptive, or fraudulent device,
contrivance, scheme, transaction, act, practice, course of business or
an artifice to defraud; as those terms are used in the Securities Act
of 1933, the Securities Exchange Act of 1934, or the Public Utility
Holding Company Act of 1935, or rules and regulations thereunder, unless
such information: (i) Was prepared without a reasonable basis; or (ii)
was disclosed other than in good faith.
Note: Deletion. The requirements of this paragraph (k) shall not
apply to supplemental disclosures accompanying financial statements for
fiscal years beginning on or after December 15, 1982. For fiscal years
beginning prior to that date, registrants may substitute the disclosures
required under paragraph (c) of Item 302 of Regulation S-K ( 229.302).
(Secs. 6, 7, 8, 10, and 19(a) (15 U.S.C. 77f, 77g, 77h, 77j, 77s) of
the Securities Act of 1933; secs. 12, 13, 15(d) and 23(a) (15 U.S.C.
78l, 78m, 78o(d), 78w), of the Securities Exchange Act of 1934; secs.
5(b), 14, and 20(a) (15 U.S.C. 79e, 79n, 79t) of the Public Utility
Holding Company Act of 1935; secs. 8, 30, 31(c) and 38(a) (15 U.S.C.
80a-8, 80a-29, 80a-30(c), 80a-37(a)) of the Investment Company Act of
1940; sec. 503 (42 U.S.C. 6383) of the Energy Policy and Conservation
Act of 1975; secs. 5, 6, 7, 8, 10, 19(a) and Schedule A e(25) and (26)
(15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77s(a) and 77aa (25) and (26)) of
the Securities Act of 1933; secs. 12, 13, 14, 15(d) and 23(a) (15
U.S.C. 78l, 78m, 78n, 78o(d), 78w(a)) of the Securities Exchange Act of
1934; secs. 5(b), 14 and 20(a) (15 U.S.C. 79e(b), 79n, 79t(a)) of the
Public Utility Holding Company Act of 1935 and sec. 503 (42 U.S.C. 6383)
of the Energy Policy and Conservation Act of 1975)
(43 FR 60405, Dec. 27, 1978, as amended at 43 FR 60417, Dec. 27,
1978; 44 FR 57036, 57038, Oct. 9, 1979; 45 FR 27749, Apr. 24, 1980.
Redesignated and amended at 45 FR 63669, Sept. 25, 1980; 47 FR 57913,
Dec. 29, 1982; 48 FR 44200, Sept. 28, 1983; 49 FR 18473, May 1, 1984)
17 CFR 210.4-10 Commercial and Industrial Companies
17 CFR 210.5-01 Application of 210.5-01 to 210.5-04.
Sections 210.5-01 to 210.5-04 shall be applicable to financial
statements filed for all persons except --
(a) Registered investment companies (see 210.6-01 to 210.6-10).
(b) Employee stock purchase, savings and similar plans (see
210.6A-01 to 210.6A-05).
(c) Insurance companies (see 210.7-01 to 210.7-05).
(d) Bank holding companies and banks (see 210.9-01 to 210.9-07).
(e) Brokers and dealers when filing Form X-17A-5 (249.617) (see
240.17a-5 and 240.17a-10 under the Securities Exchange Act of 1934).
(50 FR 49533, Dec. 3, 1985)
17 CFR 210.5-02 Balance sheets.
The purpose of this rule is to indicate the various line items and
certain additional disclosures which, if applicable, and except as
otherwise permitted by the Commission, should appear on the face of the
balance sheets or related notes filed for the persons to whom this
article pertains (see 210.4-01(a)).
1. Cash and cash items. Separate disclosure shall be made of the
cash and cash items which are restricted as to withdrawal or usage. The
provisions of any restrictions shall be described in a note to the
financial statements. Restrictions may include legally restricted
deposits held as compensating balances against short-term borrowing
arrangements, contracts entered into with others, or company statements
of intention with regard to particular deposits; however, time deposits
and short-term certificates of deposit are not generally included in
legally restricted deposits. In cases where compensating balance
arrangements exist but are not agreements which legally restrict the use
of cash amounts shown on the balance sheet, describe in the notes to the
financial statements these arrangements and the amount involved, if
determinable, for the most recent audited balance sheet required and for
any subsequent unaudited balance sheet required in the notes to the
financial statements. Compensating balances that are maintained under
an agreement to assure future credit availability shall be disclosed in
the notes to the financial statements along with the amount and terms of
such agreement.
2. Marketable securities. The accounting and disclosure requirements
for current marketable equity securities are specified by generally
accepted accounting principles. With respect to all other current
marketable securities, state, parenthetically or otherwise, the basis of
determining the aggregate amount shown in the balance sheet, along with
the alternatives of the aggregate cost or the aggregate market value at
the balance sheet date.
3. Accounts and notes receivable. (a) State separately amounts
receivable from (1) customers (trade); (2) related parties (see
210.4-08(k)); (3) underwriters, promoters, and employees (other than
related parties) which arose in other than the ordinary course of
business; and (4) others.
(b) If the aggregate amount of notes receivable exceeds 10 percent of
the aggregate amount of receivables, the above information shall be set
forth separately, in the balance sheet or in a note thereto, for
accounts receivable and notes receivable.
(c) If receivables include amounts due under long-term contracts (see
210.5-02.6(d)), state separately in the balance sheet or in a note to
the financial statements the following amounts:
(1) Balances billed but not paid by customers under retainage
provisions in contracts.
(2) Amounts representing the recognized sales value of performance
and such amounts that had not been billed and were not billable to
customers at the date of the balance sheet. Include a general
description of the prerequisites for billing.
(3) Billed or unbilled amounts representing claims or other similar
items subject to uncertainty concerning their determination or ultimate
realization. Include a description of the nature and status of the
principal items comprising such amount.
(4) With respect to (1) through (3) above, also state the amounts
included in each item which are expected to be collected after one year.
Also state, by year, if practicable, when the amounts of retainage (see
(1) above) are expected to be collected.
4. Allowances for doubtful accounts and notes receivable. The amount
is to be set forth separately in the balance sheet or in a note thereto.
5. Unearned income.
6. Inventories. (a) State separately in the balance sheet or in a
note thereto, if practicable, the amounts of major classes of inventory
such as: (1) Finished goods; (2) inventoried costs relating to
long-term contracts or programs (see (d) below and 210.4-05); (3) work
in process (see 210.4-05); (4) raw materials; and (5) supplies. If
the method of calculating a LIFO inventory does not allow for the
practical determination of amounts assigned to major classes of
inventory, the amounts of those classes may be stated under cost flow
assumptions other that LIFO with the excess of such total amount over
the agggregate LIFO amount shown as a deduction to arrive at the amount
of the LIFO inventory.
(b) The basis of determining the amounts shall be stated.
If cost is used to determine any portion of the inventory amounts,
the description of this method shall include the nature of the cost
elements included in inventory. Elements of cost include, among other
items, retained costs representing the excess of manufacturing or
production costs over the amounts charged to cost of sales or delivered
or in-process units, initial tooling or other deferred startup costs, or
general and administrative costs.
The method by which amounts are removed from inventory (e.g., average
cost, first-in, first-out, last-in, first-out, estimated average cost
per unit) shall be described. If the estimated average cost per unit is
used as a basis to determine amounts removed from inventory under a
total program or similar basis of accounting, the principal assumptions
(including, where meaningful, the aggregate number of units expected to
be delivered under the program, the number of units delivered to date
and the number of units on order) shall be disclosed.
If any general and administrative costs are charged to inventory,
state in a note to the financial statements the aggregate amount of the
general and administrative costs incurred in each period and the actual
or estimated amount remaining in inventory at the date of each balance
sheet.
(c) If the LIFO inventory method is used, the excess of replacement
or current cost over stated LIFO value shall, if material, be stated
parenthetically or in a note to the financial statements.
(d) For purposes of 210.5-02.3 and 210.5-02.6, long-term contracts
or programs include (1) all contracts or programs for which gross
profits are recognized on a percentage-of-completion method of
accounting or any variant thereof (e.g., delivered unit, cost to cost,
physical completion), and (2) any contracts or programs accounted for on
a completed contract basis of accounting where, in either case, the
contracts or programs have associated with them material amounts of
inventories or unbilled receivables and where such contracts or programs
have been or are expected to be performed over a period of more than
twelve months. Contracts or programs of shorter duration may also be
included, if deemed appropriate.
For all long-term contracts or programs, the following information,
if applicable, shall be stated in a note to the financial statements:
(i) The aggregate amount of manufacturing or production costs and any
related deferred costs (e.g., initial tooling costs) which exceeds the
aggregate estimated cost of all in-process and delivered units on the
basis of the estimated average cost of all units expected to be produced
under long-term contracts and programs not yet complete, as well as that
portion of such amount which would not be absorbed in cost of sales
based on existing firm orders at the latest balance sheet date. In
addition, if practicable, disclose the amount of deferred costs by type
of cost (e.g., initial tooling, deferred production, etc.).
(ii) The aggregate amount representing claims or other similar items
subject to uncertainty concerning their determination or ultimate
realization, and include a description of the nature and status of the
principal items comprising such aggregate amount.
(iii) The amount of progress payments netted against inventory at the
date of the balance sheet.
7. Prepaid expenses.
8. Other current assets. State separately, in the balance sheet or
in a note thereto, any amounts in excess of five percent of total
current assets.
9. Total current assets, when appropriate.
10. Securities of related parties. (See 210.4-08(k).)
11. Indebtedness of related parties -- not current. (See
210.4-08(k).)
12. Other investments. The accounting and disclosure requirements
for non-current marketable equity securities are specified by generally
accepted accounting principles. With respect to other security
investments and any other investment, state, parenthetically or
otherwise, the basis of determining the aggregate amounts shown in the
balance sheet, along with the alternate of the aggregate cost or
aggregate market value at the balance sheet date.
13. Property, plant and equipment.
(a) State the basis of determining the amounts.
(b) Tangible and intangible utility plant of a public utility company
shall be segregated so as to show separately the original cost, plant
acquisition adjustments, and plant adjustments, as required by the
system of accounts prescribed by the applicable regulatory authorities.
This rule shall not be applicable in respect to companies which are not
required to make such a classification.
14. Accumulated depreciation, depletion, and amortization of
property, plant and equipment. The amount is to be set forth separately
in the balance sheet or in a note thereto.
15. Intangible assets. State separately each class of such assets
which is in excess of five percent of the total assets, along with the
basis of determining the respective amounts. Any significant addition
or deletion shall be explained in a note.
16. Accumulated depreciation and amortization of intangible assets.
The amount is to be set forth separately in the balance sheet or in a
note thereto.
17. Other assets. State separately, in the balance sheet or in a
note thereto, any other item not properly classed in one of the
preceding asset captions which is in excess of five percent to total
assets. Any significant addition or deletion should be explained in a
note. With respect to any significant deferred charge, state the policy
for deferral and amortization.
18. Total assets.
19. Accounts and notes payable. (a) State separately amounts payable
to (1) banks for borrowings; (2) factors or other financial
institutions for borrowings; (3) holders of commercial paper; (4)
trade creditors; (5) related parties (see 210.4-08(k)); (6)
underwriters, promoters, and employees (other than related parties);
and (7) others. Amounts applicable to (1), (2) and (3) may be stated
separately in the balance sheet or in a note thereto.
(b) The amount and terms (including commitment fees and the
conditions under which lines may be withdrawn) of unused lines of credit
for short-term financing shall be disclosed, if significant, in the
notes to the financial statements. The amount of these lines of credit
which support a commercial paper borrowing arrangement or similar
arrangements shall be separately identified.
20. Other current liabilities. State separately, in the balance
sheet or in a note thereto, any item in excess of 5 percent of total
current liabilities. Such items may include, but are not limited to,
accrued payrolls, accrued interest, taxes, indicating the current
portion of deferred income taxes, and the current portion of long-term
debt. Remaining items may be shown in one amount.
21. Total current liabilities, when appropriate.
22. Bonds, mortgages and other long-term debt, including capitalized
leases. (a) State separately, in the balance sheet or in a note
thereto, each issue or type of obligation and such information as will
indicate (see 210.4-06):
(1) The general character of each type of debt including the rate of
interest; (2) the date of maturity, or, if maturing serially, a brief
indication of the serial maturities, such as ''maturing serially from
1980 to 1990''; (3) if the payment of principal or interest is
contingent, an appropriate indication of such contingency; (4) a brief
indication of priority; and (5) if convertible, the basis. For amounts
owed to related parties, see 210.4-08(k).
(b) The amount and terms (including commitment fees and the
conditions under which commitments may be withdrawn) of unused
commitments for long-term financing arrangements that would be disclosed
under this rule if used shall be disclosed in the notes to the financial
statements if significant.
23. Indebtedness to related parties -- noncurrent. Include under
this caption indebtedness to related parties as required under
210.4-08(k).
24. Other liabilities. State separately, in the balance sheet or in
a note thereto, any item not properly classified in one of the preceding
liability captions which is in excess of 5 percent of total liabilities.
25. Commitments and contingent liabilities.
26. Deferred credits. State separately in the balance sheet amounts
for (a) deferred income taxes, (b) deferred tax credits, and (c)
material items of deferred income.
27. Minority interests in consolidated subsidiaries. State
separately in a note the amounts represented by preferred stock and the
applicable dividend requirements if the preferred stock is material in
relation to the consolidated stockholders' equity.
28. Preferred stocks subject to mandatory redemption requirements or
whose redemption is outside the control of the issuer. (a) Include
under this caption amounts applicable to any class of stock which has
any of the following characteristics: (1) it is redeemable at a fixed
or determinable price on a fixed or determinable date or dates, whether
by operation of a sinking fund or otherwise; (2) it is redeemable at
the option of the holder; or (3) it has conditions for redemption which
are not solely within the control of the issuer, such as stocks which
must be redeemed out of future earnings. Amounts attributable to
preferred stock which is not redeemable or is redeemable solely at the
option of the issuer shall be included under 210.5-02.29 unless it
meets one or more of the above criteria.
(b) State on the face of the balance sheet the title of each issue,
the carrying amount, and redemption amount. (If there is more than one
issue, these amounts may be aggregated on the face of the balance sheet
and details concerning each issue may be presented in the note required
by paragraph (c) below.) Show also the dollar amount of any shares
subscribed but unissued, and show the deduction of subscriptions
receivable therefrom. If the carrying value is different from the
redemption amount, describe the accounting treatment for such difference
in the note required by paragraph (c) below. Also state in this note or
on the face of the balance sheet, for each issue, the number of shares
authorized and the number of shares issued or outstanding, as
appropriate (See 210.4-07).
(c) State in a separate note captioned ''Redeemable Preferred
Stocks'' (1) a general description of each issue, including its
redemption features (e.g. sinking fund, at option of holders, out of
future earnings) and the rights, if any, of holders in the event of
default, including the effect, if any, on junior securities in the event
a required dividend, sinking fund, or other redemption payment(s) is not
made; (2) the combined aggregate amount of redemption requirements for
all issues each year for the five years following the date of the latest
balance sheet; and (3) the changes in each issue for each period for
which an income statement is required to be filed. (See also
210.4-08(d).)
(d) Securities reported under this caption are not to be included
under a general heading ''stockholders' equity'' or combined in a total
with items described in captions 29, 30 or 31 which follow.
29. Preferred stocks which are not redeemable or are redeemable
solely at the option of the issuer. State on the face of the balance
sheet, or if more than one issue is outstanding state in a note, the
title of each issue and the dollar amount thereof. Show also the dollar
amount of any shares subscribed but unissued, and show the deduction of
subscriptions receivable therefrom. State on the face of the balance
sheet or in a note, for each issue, the number of shares authorized and
the number of shares issued or outstanding, as appropriate (see
210.4-07). Show in a note or separate statement the changes in each
class of preferred shares reported under this caption for each period
for which an income statement is required to be filed. (See also
210.4-08(d).)
30. Common stocks. For each class of common shares state, on the
face of the balance sheet, the number of shares issued or outstanding,
as appropriate (see 210.4-07), and the dollar amount thereof. If
convertible, this fact should be indicated on the face of the balance
sheet. For each class of common shares state, on the face of the
balance sheet or in a note, the title of the issue, the number of shares
authorized, and, if convertible, the basis of conversion (see also
210.4-08(d)). Show also the dollar amount of any common shares
subscribed but unissued, and show the deduction of subscriptions
receivable therefrom. Show in a note or statement the changes in each
class of common shares for each period for which an income statement is
required to be filed.
31. Other stockholders' equity. (a) Separate captions shall be shown
for (1) additional paid-in capital, (2) other additional capital and (3)
retained earnings (i) appropriated and (ii) unappropriated. (See
210.4-08(e).) Additional paid-in capital and other additional capital
may be combined with the stock caption to which it applies, if
appropriate.
(b) For a period of at least 10 years subsequent to the effective
date of a quasi-reorganization, any description of retained earnings
shall indicate the point in time from which the new retained earnings
dates and for a period of at least three years shall indicate, on the
face of the balance sheet, the total amount of the deficit eliminated.
32. Total liabilities and stockholders' equity.
(Secs. 7 and 19a of the Securities Act, 15 U.S.C. 77g, 77s(a),
77aa(25)(26); secs. 12, 13, 14, 15(d), and 23(a) of the Securities
Exchange Act of 1934, 15 U.S.C. 78l, 78m, 78n, 78o(d), 78w(a), secs.
5(b), 10(a), 14, 20(a) of the Public Utility Holding Company Act, 15
U.S.C. 79e(a), 79n, 79t(a); secs. 8, 20, 30, 31(c), 38(a) of the
Investment Company Act of 1940, 15 U.S.C. 80a-8, 80a-20, 80a-29,
80a-30(c), 80a-37(a))
(45 FR 63671, Sept. 25, 1980, as amended at 46 FR 43412, Aug. 28,
1981; 47 FR 29837, July 9, 1982; 50 FR 25215, June 18, 1985; 50 FR
49533, Dec. 3, 1985)
17 CFR 210.5-03 Income statements.
(a) The purpose of this rule is to indicate the various line items
which, if applicable, and except as otherwise permitted by the
Commission, should appear on the face of the income statements filed for
the persons to whom this article pertains (see 210.4-01(a)).
(b) If income is derived from more than one of the subcaptions
described under 210.5-03.1, each class which is not more than 10
percent of the sum of the items may be combined with another class. If
these items are combined, related costs and expenses as described under
210.5-03.2 shall be combined in the same manner.
1. Net sales and gross revenues. State separately:
(a) Net sales of tangible products (gross sales less discounts,
returns and allowances), (b) operating revenues of public utilities or
others; (c) income from rentals; (d) revenues from services; and (e)
other revenues. Amounts earned from transactions with related parties
shall be disclosed as required under 210.4-08(k). A public utility
company using a uniform system of accounts or a form for annual report
prescribed by federal or state authorities, or a similar system or
report, shall follow the the general segregation of operating revenues
and operating expenses reported under 210.5-03.2 prescribed by such
system or report. If the total of sales and revenues reported under
this caption includes excise taxes in an amount equal to 1 percent or
more of such total, the amount of such excise taxes shall be shown on
the face of the statement parenthetically or othewise.
2. Costs and expenses applicable to sales and revenues.
State separately the amount of (a) cost of tangible goods sold, (b)
operating expenses of public utilities or others, (c) expenses
applicable to rental income, (d) cost of services, and (e) expenses
applicable to other revenues. Merchandising organizations, both
wholesale and retail, may include occupancy and buying costs under
caption 2(a). Amounts of costs and expenses incurred from transactions
with related parties shall be disclosed as required under 210.4-08(k).
3. Other operating costs and expenses. State separately any material
amounts not included under caption 2 above.
4. Selling, general and administrative expenses.
5. Provision for doubtful accounts and notes.
6. Other general expenses. Include items not normally included in
caption 4 above. State separately any material item.
7. Non-operating income.
State separately in the income statement or in a note thereto amounts
earned from (a) dividends, (b) interest on securities, (c) profits on
securities (net of losses), and (d) miscellaneous other income. Amounts
earned from transactions in securities of related parties shall be
disclosed as required under 210.4-08(k). Material amounts included
under miscellaneous other income shall be separately stated in the
income statement or in a note thereto, indicating clearly the nature of
the transactions out of which the items arose.
8. Interest and amortization of debt discount and expense.
9. Non-operating expenses.
State separately in the income statement or in a note thereto amounts
of (a) losses on securities (net of profits) and (b) miscellaneous
income deductions. Material amounts included under miscellaneous income
deductions shall be separately stated in the income statement or in a
note thereto, indicating clearly the nature of the transactions out of
which the items arose.
10. Income or loss before income tax expense and appropriate items
below.
11. Income tax expense. Include under this caption only taxes based
on income (see 210.4-08(h)).
12. Minority interest in income of consolidated subsidiaries.
13. Equity in earnings of unconsolidated subsidiaries and 50 percent
or less owned persons. State, parenthetically or in a note, the amount
of dividends received from such persons. If justified by the
circumstances, this item may be presented in a different position and a
different manner (see 210.4-01(a)).
14. Income or loss from continuing operations.
15. Discontinued operations.
16. Income or loss before extraordinary items and cumulative effects
of changes in accounting principles.
17. Extraordinary items, less applicable tax.
18. Cumulative effects of changes in accounting principles.
19. Net income or loss.
20. Earnings per share data.
(45 FR 63671, Sept. 25, 1980, as amended at 45 FR 76977, Nov. 21,
1980; 50 FR 25215, June 18, 1985)
17 CFR 210.5-04 What schedules are to be filed.
(a) Except as expressly provided otherwise in the applicable form:
(1) The schedules specified below in this section as Schedules I,
VII, XI, XII and XIII shall be filed as of the date of the most recent
audited balance sheet for each person or group.
(2) Other schedules specified below in this section as Schedules II,
IV, V, VI, VIII, IX and X shall be filed for each period for which an
audited income statement is required to be filed for each person or
group.
(3) Schedules III and XIV shall be filed as of the date and for the
periods specified in the schedule.
(b) When information is required in schedules for both the registrant
and the registrant and its subsidiaries consolidated it may be presented
in the form of a single schedule: Provided, That items pertaining to
the registrant are separately shown and that such single schedule
affords a properly summarized presentation of the facts. If the
information required by any schedule (including the notes thereto) may
be shown in the related financial statement or in a note thereto without
making such statement unclear or confusing, that procedure may be
followed and the schedule omitted.
(c) The schedules shall be examined by the independent accountant if
the related financial statements are so examined.
Schedule I -- Marketable securities -- other investments.
The schedule prescribed by 210.12-02 shall be filed:
(1) In support of caption 2 of a balance sheet, if the greater of the
aggregate cost or the aggregate market value of marketable securities as
of the balance sheet date constitutes 10 percent or more of total
assets.
(2) In support of caption 12 of a balance sheet, if the greater of
the aggregate cost or the aggregate market value of other investments as
of the balance sheet date constitutes 10 percent or more of total
assets.
(3) In support of captions 2 and 12 of a balance sheet, if the
greater of the aggregate cost or aggregate market of other investments
plus the greater of the aggregate cost or the aggregate market value of
marketable securities as of the balance sheet date constitutes 15
percent or more of total assets.
(4) In support of captions 2 and 12 of a balance sheet, if the
greater of the aggregate cost or aggregate market value of the
securities as of the balance sheet date of any issuer reported under
either caption 2 or caption 12 constitutes 2 percent or more of total
assets.
Schedule II -- Amounts receivable from related parties and
underwriters, promoters, and employees other than related parties. The
schedule prescribed by 210.12-03 shall be filed with respect to each
person among related parties and underwriters, promoters, and employees
other than related parties, from whom an aggregate indebtedness of more
than $100,000 or 1 percent of total assets, whichever is less, is owed,
or at any time during the period for which related income statements are
required to be filed was owed. This schedule shall not include
information which is prescribed by 210.12-05. For the purposes of this
schedule, exclude in the determination of the amount of indebtedness all
amounts receivable from such persons for purchases subject to usual
trade terms, for ordinary travel and expense advances and for other such
items arising in the ordinary course of business.
Schedule III -- Condensed financial information of registrant. The
schedule prescribed by 210.12-04 shall be filed when the restricted net
assets ( 210.4-08(e)(3)) of consolidated subsidiaries exceed 25 percent
of consolidated net assets as of the end of the most recently completed
fiscal year. For purposes of the above test, restricted net assets of
consolidated subsidiaries shall mean that amount of the registrant's
proportionate share of net assets of consolidated subsidiaries (after
intercompany eliminations) which as of the end of the most recent fiscal
year may not be transferred to the parent company by subsidiaries in the
form of loans, advances or cash dividends without the consent of a third
party (i.e., lender, regulatory agency, foreign government, etc.). Where
restrictions on the amount of funds which may be loaned or advanced
differ from the amount restricted as to transfer in the form of cash
dividends, the amount least restrictive to the subsidiary shall be used.
Redeemable preferred stocks ( 210.5-02.28) and minority interests shall
be deducted in computing net assets for purposes of this test.
Schedule IV -- Indebtedness of and to related parties -- not current.
The schedule prescribed by 210.12-05 shall be filed in support of
captions 11 and 23 of each balance sheet. This schedule may be omitted
if (1) neither the amount of caption 11 in the related balance sheet nor
the amount of caption 23 in such balance sheet exceeds 5 percent of
total assets as shown by the related balance sheet at either the
beginning or end of the period, or (2) there have been no material
changes in the information required to be filed from that last
previously reported.
Schedule V -- Property, plant and equipment. The schedule prescribed
by 210.12-06 shall be filed for each period specified in paragraph
(a)(2) of this section, provided that these schedules may be omitted if,
at both the beginning and end of the latest fiscal year, the total of
property, plant and equipment (caption 13 on the balance sheet) less
accumulated depreciation, depletion and amortization (caption 14 on the
balance sheet) is less than 25 percent of total assets as shown by the
related balance sheet.
Schedule VI -- Accumulated depreciation, depletion and amortization
of property, plant and equipment. The schedule prescribed by 210.12-07
shall be filed for each period specified in paragraph (a)(2) of this
section. This schedule may be omitted if Schedule V is omitted.
Schedule VII -- Guarantees of securities of other issuers. The
schedule prescribed by 210.12-08 shall be filed with respect to any
guarantees of securities of other issuers by the person for which the
statement is filed.
Schedule VIII -- Valuation and qualifying accounts. The schedule
prescribed by 210.12-09 shall be filed in support of valuation and
qualifying accounts included in each balance sheet but not included in
Schedule VI. (See 210.4-02.)
Schedule IX -- Short-term borrowings. The schedule prescribed by
210.12-10 shall be filed in support of caption 19, amounts payable to
banks for borrowings; factors and financial institutions for
borrowings; and holders of commercial paper. The information required
by this schedule may be presented in Management's Discussion and
Analysis if it results in a more meaningful presentation of the
information being provided.
Schedule X -- Supplementary income statement information. The
schedule prescribed by 210.12-11 may be omitted for each income
statement in which sales or operating revenues were not of significant
amount. This schedule may also be omitted if the information required
by column B and instructions 3 and 5 thereof is furnished in the income
statement or in a note thereto.
Schedule XI -- Real estate and accumulated depreciation. The
schedule prescribed by 210.12-28 shall be filed for real estate (and
the related accumulated depreciation) held by persons a substantial
portion of whose business is that of acquiring and holding for
investment real estate or interests in real estate, or interests in
other persons a substantial portion of whose business is that of
acquiring and holding real estate or interests in real estate for
investment. Real estate used in the business shall be excluded from the
schedule.
Schedule XII -- Mortgage loans on real estate. The schedule
prescribed by 210.12-29 shall be filed by persons specified under
Schedule XI for investments in mortgage loans on real estate.
Schedule XIII -- Other investments. If there are any other
investments, under caption 12 of 210.5-02 or elsewhere in a balance
sheet, not required to be included in Schedule I, there shall be set
forth in a separate schedule information concerning such investments
corresponding to that prescribed by Schedule I. This schedule may be
omitted if the total amount of such other investments does not exceed 5
percent of total assets as shown by such balance sheet.
Schedule XIV -- Supplemental Information Concerning Property-casualty
Insurance Operations. The schedule prescribed by 210.12-18 shall be
filed when a registrant, its subsidiaries or 50%-or-less-owned equity
basis investees, have liabilities for property-casualty (''P/C'')
insurance claims. The required information shall be presented as of the
same dates and for the same periods for which the information is
reflected in the audited consolidated financial statements required by
210.3-01 and 3-02. The schedule may be omitted if reserves for unpaid
P/C claims and claims adjustment expenses of the registrant and its
consolidated subsidiaries, its unconsolidated subsidiaries and its
50%-or-less-owned equity basis investees did not, in the aggregate,
exceed one-half of common stockholders' equity of the registrant and its
consolidated subsidiaries as of the beginning of the fiscal year. For
purposes of this test only the proportionate share of the registrant and
its other subsidiaries in the reserves for unpaid claims and claim
adjustment expenses of 50%-or-less-owned equity basis investees taken in
the aggregate after intercompany eliminations shall be taken into
account.
(45 FR 63671, Sept. 25, 1980, as amended at 46 FR 48137, Oct. 1,
1981; 46 FR 56180, Nov. 16, 1981; 49 FR 47598, Dec. 6, 1984; 50 FR
25215, June 18, 1985)
17 CFR 210.5-04 Registered Investment Companies
Source: Sections 210.6-01 to 210.6-10 appear at 47 FR 56838, Dec.
21, 1982, unless otherwise noted.
17 CFR 210.6-01 Application of 210.6-01 to 210.6-10.
Sections 210.6-01 to 210.6-10 shall be applicable to financial
statements filed for registered investment companies.
17 CFR 210.6-02 Definition of certain terms.
The following terms shall have the meaning indicated in this rule
unless the context otherwise requires. (Also see 210.1-02 of this
part.)
(a) Affiliate. The term affiliate means an affiliated person as
defined in section 2(a)(3) of the Investment Company Act of 1940 unless
otherwise indicated. The term control has the meaning in section
2(a)(9) of that Act.
(b) Value. As used in 210.6-01 to 210.6-10, the term value shall
have the meaning given in section 2(a)(41)(B) of the Investment Company
Act of 1940.
(c) Balance sheets; statements of net assets. As used in 210.6-01
to 210.6-10, the term balance sheets shall include statements of assets
and liabilities as well as statements of net assets unless the context
clearly indicates the contrary.
(d) Qualified assets. (1) For companies issuing face-amount
certificates subsequent to December 31, 1940 under the provisions of
section 28 of the Investment Company Act of 1940, the term qualified
assets means qualified investments as that term is defined in section
28(b) of the Act. A statement to that effect shall be made in the
balance sheet.
(2) For other companies, the term qualified assets means cash and
investments which such companies do maintain or are required, by
applicable governing legal instruments, to maintain in respect of
outstanding face-amount certificates.
(3) Loans to certificate holders may be included as qualified assets
in an amount not in excess of certificate reserves carried on the books
of account in respect of each individual certificate upon which the
loans were made.
17 CFR 210.6-03 Special rules of general application to registered
investment companies.
The financial statements filed for persons to which 210.6-01 to
210.6-10 are applicable shall be prepared in accordance with the
following special rules in addition to the general rules in 210.1-01
to 210.4-10 (Articles 1, 2, 3, and 4). Where the requirements of a
special rule differ from those prescribed in a general rule, the
requirements of the special rule shall be met.
(a) Content of financial statements. The financial statements shall
be prepared in accordance with the requirements of this part (Regulation
S-X) notwithstanding any provision of the articles of incorporation,
trust indenture or other governing legal instruments specifying certain
accounting procedures inconsistent with those required in 210.6-01 to
210.6-10.
(b) Audited financial statements. Where, under Article 3 of this
part, financial statements are required to be audited, the independent
accountant shall have been selected and ratified in accordance with
section 32 of the Investment Company Act of 1940.
(c) Consolidated and combined statements. (1) Consolidated and
combined statements filed for registered investment companies shall be
prepared in accordance with 210.3A-01 to 210.3A-05 (Article 3A) except
that (i) statements of the registrant may be consolidated only with the
statements of subsidiaries which are investment companies; (ii) a
consolidated statement of the registrant and any of its investment
company subsidiaries shall not be filed unless accompanied by a
consolidating statement which sets forth the individual statements of
each significant subsidiary included in the consolidated statement:
Provided, however, That a consolidating statement need not be filed if
all included subsidiaries are totally held; and (iii) consolidated or
combined statements filed for subsidiaries not consolidated with the
registrant shall not include any investment companies unless accompanied
by consolidating or combining statements which set forth the individual
statements of each included investment company which is a significant
subsidiary.
(2) If consolidating or combining statements are filed, the amounts
included under each caption in which financial data pertaining to
affiliates is required to be furnished shall be subdivided to show
separately the amounts: (i) Eliminated in consolidation; and (ii) not
eliminated in consolidation.
(d) Valuation of assets. The balance sheets of registered investment
companies, other than issuers of face-amount certificates, shall reflect
all investments at value, with the aggregate cost of each category of
investment reported under 210.6-04.1, 6-04.2 and 6-04.3 and of the
total investments reported under 210.6-04.4 or 210.6-05.1 shown
parenthetically. State in a note the methods used in determining value
of investments. As required by section 28(b) of the Investment Company
Act of 1940, qualified assets of face-amount certificate companies shall
be valued in accordance with certain provisions of the Code of the
District of Columbia. For guidance as to valuation of securities, see
404.03 to 404.05 of the Codification of Financial Reporting Policies.
(e) Qualified assets. State in a note the nature of any investments
and other assets maintained or required to be maintained, by applicable
legal instruments, in respect of outstanding face-amount certificates.
If the nature of the qualifying assets and amount thereof are not
subject to the provisions of section 28 of the Investment Company Act of
1940, a statement to that effect shall be made.
(f) Restricted securities. State in a note unless disclosed
elsewhere the following information as to investment securities which
cannot be offered for public sale without first being registered under
the Securities Act of 1933 (restricted securities):
(1) The policy of the person with regard to acquisition of restricted
securities.
(2) The policy of the person with regard to valuation of restricted
securities. Specific comments shall be given as to the valuation of an
investment in one or more issues of securities of a company or group of
affiliated companies if any part of such investment is restricted and
the aggregate value of the investment in all issues of such company or
affiliated group exceeds five percent of the value of total assets. (As
used in this paragraph, the term affiliated shall have the meaning given
in 210.6-02(a) of this part.)
(3) A description of the person's rights with regard to demanding
registration of any restricted securities held at the date of the latest
balance sheet.
(g) Income recognition. Dividends shall be included in income on the
ex-dividend date; interest shall be accured on a daily basis.
Dividends declared on short positions existing on the record date shall
be recorded on the ex-dividend date and included as an expense of the
period.
(h) Federal income taxes. The company's status as a regulated
investment company as defined in subtitle A, chapter 1, subchapter M of
the Internal Revenue Code, as amended, shall be stated in a note
referred to in the appropriate statements. Such note shall also
indicate briefly the principal assumptions on which the company relied
in making or not making provisions for income taxes. However, a company
which retains realized capital gains and designates such gains as a
distribution to shareholders in accordance with section 852(b)(3)(D) of
the Internal Revenue Code shall, on the last day of its taxable year
(and not earlier), make provision for taxes on such undistributed
capital gains realized during such year.
(i) Issuance and repurchase by a registered investment company of its
own securities. Disclose for each class of the company's securities:
(1) The number of shares, units, or principal amount of bonds sold
during the period of report, the amount received therefor, and, in the
case of shares sold by closed-end management investment companies, the
difference, if any, between the amount received and the net asset value
or preference in involuntary liquidation (whichever is appropriate) of
securities of the same class prior to such sale; and
(2) The number of shares, units, or principal amount of bonds
repurchased during the period of report and the cost thereof.
Closed-end management investment companies shall furnish the following
additional information as to securities repurchased during the period of
report:
(i) As to bonds and preferred shares, the aggregate difference
between cost and the face amount or preference in involuntary
liquidation and, if applicable net assets taken at value as of the date
of repurchase were less than such face amount or preference, the
aggregate difference between cost and such net asset value;
(ii) As to common shares, the weighted average discount per share,
expressed as a percentage, between cost of repurchase and the net asset
value applicable to such shares at the date of repurchases.
The information required by paragraphs (h)(i)(2) (i) and (ii) of this
section may be based on reasonable estimates if it is impracticable to
determine the exact amounts involved.
(j) Series companies. (1) The information required by this part
shall, in the case of a person which in essence is comprised of more
than one separate investment company, be given as if each class or
series of such investment company were a separate investment company;
this shall not prevent the inclusion, at the option of such person, of
information applicable to other classes or series of such person on a
comparative basis, except as to footnotes which need not be comparative.
(2) If the particular class or series for which information is
provided may be affected by other classes or series of such investment
company, such as by the offset of realized gains in one series with
realized losses in another, or through contingent liabilities, such
situation shall be disclosed.
(k) Certificate reserves. (1) For companies issuing face-amount
certificates subsequent to December 31, 1940 under the provisions of
section 28 of the Investment Company Act of 1940, balance sheets shall
reflect reserves for outstanding certificates computed in accordance
with the provisions of section 28(a) of the Act.
(2) For other companies, balance sheets shall reflect reserves for
outstanding certificates determined as follows:
(i) For certificates of the installment type, such amount which,
together with the lesser of future payments by certificate holders as
and when accumulated at a rate not to exceed 3 1/2 per centum per annum
(or such other rate as may be appropriate under the circumstances of a
particular case) compounded annually, shall provide the minimum maturity
or face amount of the certificate when due.
(ii) For certificates of the fully-paid type, such amount which, as
and when accumulated at a rate not to exceed 3 1/2 per centum per annum
(or such other rate as may be appropriate under the circumstances of a
particular case) compounded annually, shall provide the amount or
amounts payable when due.
(iii) Such amount or accrual therefor, as shall have been credited to
the account of any certificate holder in the form of any credit, or any
dividend, or any interest in addition to the minimum maturity or face
amount specified in the certificate, plus any accumulations on any
amount so credited or accrued at rates required under the terms of the
certificate.
(iv) An amount equal to all advance payments made by certificate
holders, plus any accumulations thereon at rates required under the
terms of the certificate.
(v) Amounts for other appropriate contingency reserves, for death and
disability benefits or for reinstatement rights on any certificate
providing for such benefits or rights.
(l) Inapplicable captions. Attention is directed to the provisions
of 210.4-02 and 210.4-03 which permit the omission of separate
captions in financial statements as to which the items and conditions
are not present, or the amounts involved not significant. However,
amounts involving directors, officers, and affiliates shall nevertheless
be separately set forth except as otherwise specifically permitted under
a particular caption.
17 CFR 210.6-04 Balance sheets.
This rule is applicable to balance sheets filed by registered
investment companies except for persons who substitute a statement of
net assets in accordance with the requirements specified in 210.6-05,
and issuers of face-amount certificates which are subject to the special
provisions of 210.6-06 of this part. Balance sheets filed under this
rule shall comply with the following provisions:
1. Investments in securities of unaffiliated issuers.
2. Investments in and advances to affiliates. State separately
investments in and advances to: (a) Controlled companies and (b) other
affiliates.
3. Investments -- other than securities. State separately each major
category.
4. Total investments.
5. Cash. Include under this caption cash on hand and demand deposits.
Provide in a note to the financial statements the information required
under 210.5-02.1 regarding restrictions and compensating balances.
6. Receivables. (a) State separately amounts receivable from (1)
sales of investments; (2) subscriptions to capital shares; (3)
dividends and interest; (4) directors and officers; and (5) others.
(b) If the aggregate amount of notes receivable exceeds 10 percent of
the aggregate amount of receivables, the above information shall be set
forth separately, in the balance sheet or in a note thereto, for
accounts receivable and notes receivable.
7. Deposits for securities sold short and open option contracts.
State separately amounts held by others in connection with: (a) Short
sales and (b) open option contracts.
8. Other assets. State separately (a) prepaid and deferred expenses;
(b) pension and other special funds; (c) organization expenses; and
(d) any other significant item not properly classified in another asset
caption.
9. Total assets.
10. Accounts payable and accrued liabilities. State separately
amounts payable for: (a) Securities sold short; (b) open option
contracts written; (c) other purchases of securities; (d) capital
shares reedeemed; (e) dividends or other distributions on capital
shares; and (f) others. State separately the amount of any other
liabilities which are material. Securities sold short and open option
contracts written shall be stated at value.
11. Deposits for securities loaned. State the value of securities
loaned and indicate the nature of the collateral received as security
for the loan, including the amount of any cash received.
12. Other liabilities. State separately (a) amounts payable for
investment advisory, management and service fees; and (b) the total
amount payable to: (1) Officers and directors; (2) controlled
companies; and (3) other affiliates, excluding any amounts owing to
noncontrolled affiliates which arose in the ordinary course of business
and which are subject to usual trade terms.
13. Notes payable, bonds and similar debt. (a) State separately
amounts payable to: (1) Banks or other financial institutions for
borrowings; (2) controlled companies; (3) other affiliates; and (4)
others, showing for each category amounts payable within one year and
amounts payable after one year.
(b) Provide in a note the information required under 210.5-02.19(b)
regarding unused lines of credit for short-term financing and
210.5-02.22(b) regarding unused commitments for long-term financing
arrangements.
14. Total liabilities.
15. Commitments and contingent liabilities.
16. Units of capital. (a) Disclose the title of each class of
capital shares or other capital units, the number authorized, the number
outstanding, and the dollar amount thereof.
(b) Unit investment trusts, including those which are issuers of
periodic payment plan certificates, also shall state in a note to the
financial statements: (1) The total cost to the investors of each class
of units or shares; (2) the adjustment for market depreciation or
appreciation; (3) other deductions from the total cost to the investors
for fees, loads and other charges, including an explanation of such
deductions; and (4) the net amount applicable to the investors.
17. Accumulated undistributed income (loss). Disclose:
(a) The accumulated undistributed investment income-net,
(b) accumulated undistributed net realized gains (losses) on
investment transactions, and (c) net unrealized appreciation
(depeciation) in value of investments at the balance sheet date.
18. Other elements of capital. Disclose any other elements of
capital or residual interests appropriate to the capital structure of
the reporting entity.
19. Net assets applicable to outstanding units of capital. State the
net asset value per share.
17 CFR 210.6-05 Statements of net assets.
In lieu of the balance sheet otherwise required by 210.6-04 of this
part, persons may substitute a statement of net assets if at least 95
percent of the amount of the person's total assets are represented by
investments in securities of unaffiliated issuers. If presented in such
instances, a statement of net assets shall consist of the following:
1. A schedule of investments in securities of unaffiliated issuers as
prescribed in 210.12-12.
2. The excess (or deficiency) of other assets over (under) total
liabilities stated in one amount, except that any amounts due from or to
officers, directors, controlled persons, or other affiliates, excluding
any amounts owing to noncontrolled affiliates which arose in the
ordinary course of business and which are subject to usual trade terms,
shall be stated separately.
3. Disclosure shall be provided in the notes to the financial
statements for any item required under 210.6-04.10 to 210.6-04.13.
4. The balance of the amounts captioned as net assets. The number of
outstanding shares and net asset value per share shall be shown
parenthetically.
5. The information required by (i) 210.6-04.16, (ii) 210.6-04.17
and (iii) 210.6-04.18 shall be furnished in a note to the financial
statements.
17 CFR 210.6-06 Special provisions applicable to the balance sheets of
issuers of face-amount certificates.
Balance sheets filed by issuers of face-amount certificates shall
comply with the following provisions:
1. Investments. State separately each major category: such as, real
estate owned, first mortgage loans on real estate, other mortgage loans
on real estate, investments in securities of unaffiliated issuers, and
investments in and advances to affiliates.
2. Cash. Include under this caption cash on hand and demand deposits.
Provide in a note to the financial statements the information required
under 210.5-02.1 regarding restrictions and compensating balances.
3. Receivables. (a) State separately amounts receivable from (1)
sales of investments; (2) dividends and interest; (3) directors and
officers; and (4) others.
(b) If the aggregate amount of notes receivable exceeds 10 percent of
the aggregate amount of receivables, the above information shall be set
forth separately, in the balance sheet or in a note thereto, for
accounts receivable and notes receivable.
4. Total qualified assets. State in a note to the financial
statements the amount of qualified assets on deposit classified as to
general categories of assets and as to general types of depositories,
such as banks and states, together with a statement as to the purpose of
the deposits.
5. Other assets. State separately: (a) Investments in securities of
unaffiliated issuers not included in qualifying assets in item 1 above;
(b) investments in and advances to affiliates not included in qualifying
assets in item 1 above; and (c) any other significant item not properly
classified in another asset caption.
6. Total assets.
7. Certificate reserves. Issuers of face-amount certificates shall
state separately reserves for: (a) Certificates of the installment
type; (b) certificates of the fully-paid type; (c) advance payments;
(d) additional amounts accrued for or credited to the account of
certificate holders in the form of any credit, dividend, or interest in
addition to the minimum amount specified in the certificate; and (e)
other certificate reserves. State in an appropriate manner the basis
used in determining the reserves, including the rates of interest of
accumulation.
8. Notes payable, bonds and similar debt. (a) State separately
amounts payable to: (1) Banks or other financial institutions for
borrowings; (2) controlled companies; (3) other affiliates; and (4)
others, showing for each category amounts payable within one year and
amounts payable after one year.
(b) Provide in a note the information required under 210.5-02.19(b)
regarding unused lines of credit for short-term financing and
210.5-02.22(b) regarding unused commitments for long-term financing
arrangements.
9. Accounts payable and accrued liabilities. State separately (a)
amounts payable for investment advisory, management and service fees;
and (b) the total amount payable to: (1) Officers and directors; (2)
controlled companies; and (3) other affiliates, excluding any amounts
owing to noncontrolled affiliates which arose in the ordinary course of
business and which are subject to usual trade terms. State separately
the amount of any other liabilities which are material.
10. Total liabilities.
11. Commitments and contingent liabilities.
12. Capital shares. Disclose the title of each class of capital
shares or other capital units, the number authorized, the number
outstanding and the dollar amount thereof. Show also the dollar amount
of any capital shares subscribed but unissued, and show the deduction
for subscriptions receivable therefrom.
13. Other elements of capital. (a) Disclose any other elements of
capital or residual interests appropriate to the capital structure of
the reporting entity.
(b) A summary of each account under this caption setting forth the
information prescribed in 210.3-04 shall be given in a note or separate
statement for each period in which a statement of operations is
presented.
14. Total liabilities and stockholders' equity.
17 CFR 210.6-07 Statements of operations.
Statements of operations filed by registered investment companies,
other than issuers of face-amount certificates subject to the special
provisions of 210.6-08 of this part, shall comply with the following
provisions:
1. Investment income. State separately income from: (a) dividends;
(b) interest on securities; and (c) other income. If income from
investments in or indebtedness of affiliates is included hereunder, such
income shall be segregated under an appropriate caption subdivided to
show separately income from: (1) Controlled companies; and (2) other
affiliates. If non-cash dividends are included in income, the bases of
recognition and measurement used in respect to such amounts shall be
disclosed. Any other category of income which exceeds five percent of
the total shown under this caption shall be stated separately.
2. Expenses. (a) State separately the total amount of investment
advisory, management and service fees, and expenses in connection with
research, selection, supervision, and custody of investments. Amounts
of expenses incurred from transactions with affiliated persons shall be
disclosed together with the identity of and related amount applicable to
each such person accounting for five percent or more of the total
expenses shown under this caption together with a description of the
nature of the affiliation. Expenses incurred within the person's own
organization in connection with research, selection and supervision of
investments shall be stated separately. Reductions or reimbursements of
management or service fees shall be shown as a negative amount or as a
reduction of total expenses shown under this caption.
(b) State separately any other expense item the amount of which
exeeds five percent of the total expenses shown under this caption.
(c) A note to the financial statements shall include information
concerning management and service fees, the rate of fee, and the base
and method of computation. State separately the amount and a
description of any fee reductions or reimbursements representing: (1)
Expense limitation agreements or commitments; and (2) offsets received
from broker-dealers showing separately for each amount received or due
from (i) unaffiliated persons; and (ii) affiliated persons. If no
management or service fees were incurred for a period, state the reason
therefor.
(d) If any expenses were paid otherwise than in cash, state the
details in a note.
(e) State in a note to the financial statements the amount of
brokerage commissions (including dealer markups) paid to affiliated
broker-dealers in connection with purchase and sale of investment
securities. Open-end management companies shall state in a note the net
amounts of sales charges deducted from the proceeds of sale of capital
shares which were retained by any affiliated principal underwriter or
other affiliated broker-dealer.
(f) State separately all amounts paid in accordance with a plan
adopted under rule 12b-1 of the Investment Company Act of 1940 (17 CFR
270.12b-1). Reimbursement to the fund of expenses incurred under such
plan (12b-1 expense reimbursement) shall be shown as a negative amount
and deducted from current 12b-1 expenses. If 12b-1 expense
reimbursements exceed current 12b-1 costs, such excess shall be shown as
a negative amount used in the calculation of total expenses under this
caption.
3. Interest and amortization of debt discount and expense.
4. Investment income before income tax expense.
5. Income tax expense. Include under this caption only taxes based
on income.
6. Investment income-net.
7. Realized and unrealized gain (loss) on investments-net. (a) State
separately the net realized gain or loss on transactions in: (1)
Investment securities of unaffiliated issuers, (2) investment securities
of affiliated issuers, and (3) investments other than securities.
(b) Distributions of realized gains by other investment companies
shall be shown separately under this caption.
(c) State separately: (1) The gain or loss from expiration or
closing of option contracts written, (2) the gain or loss on closed
short positions in securities, and (3) other realized gain or loss.
Disclose in a note to the financial statements the number and associated
dollar amounts as to option contracts written: (i) At the beginning of
the period; (ii) during the period; (iii) expired during the period;
(iv) closed during the period; (v) exercised during the period; (vi)
balance at end of the period.
(d) State separately the amount of the net increase or decrease
during the period in the unrealized appreciation or depreciation in the
value of investment securities and other investments held at the end of
the period.
(e) State separately any: (1) Federal income taxes and (2) other
income taxes applicable to realized and unrealized gain (loss) on
investments, distinguishing taxes payable currently from deferred income
taxes.
8. Net gain (loss) on investments.
9. Net increase (decrease) in net assets resulting from operations.
(47 FR 56838, Dec. 21, 1982, as amended at 52 FR 23172, June 18,
1987)
17 CFR 210.6-08 Special provisions applicable to the statements of
operations of issuers of face-amount certificates.
Statements of operations filed by issuers of face-amount certificates
shall comply with the following provisions:
1. Investment income. State separately income from: (a) Interest on
mortgages; (b) interest on securities; (c) dividends; (d) rental
income; and (e) other investment income. If income from investments in
or indebtedness of affiliates is included hereunder, such income shall
be segregated under an appropriate caption subdivided to show separately
income from: (1) Controlled companies; and (2) other affiliates. If
non-cash dividends are included in income, the bases of recognition and
measurement used in respect to such amounts shall be disclosed. Any
other category of income which exceeds five percent of the total shown
under this caption shall be stated separately.
2. Investment expenses. (a) State separately the total amount of
investment advisory, management and service fees, and expenses in
connection with research, selection, supervision, and custody of
investments. Amounts of expenses incurred from transactions with
affiliated persons shall be disclosed together with the identity of and
related amount applicable to each such person accounting for five
percent or more of the total expenses shown under this caption together
with a description of the nature of the affiliation. Expenses incurred
within the person's own organization in connection with research,
selection and supervision of investments shall be stated separately.
Reductions or reimbursements of management or service fees shall be
shown as a negative amount or as a reduction of total expenses shown
under this caption.
(b) State separately any other expense item the amount of which
exceeds five percent of the total expenses shown under this caption.
(c) A note to the financial statements shall include information
concerning management and service fees, the rate of fee, and the base
and method of computation. State separately the amount and a
description of any fee reductions or reimbursements representing: (1)
Expense limitation agreements or commitments; and (2) offsets received
from broker-dealers showing separately for each amount received or due
from: (i) Unaffiliated persons; and (ii) affiliated persons. If no
management or service fees were incurred for a period, state the reason
therefor.
(d) If any expenses were paid otherwise than in cash, state the
details in a note.
(e) State in a note to the financial statements the amount of
brokerage commissions (including dealer markups) paid to affiliated
broker-dealers in connection with purchase and sale of investment
securities.
3. Interest and amortization of debt discount and expense.
4. Provision for certificate reserves. State separately any
provision for additional credits, or dividends, or interests, in
addition to the minimum maturity or face amount specified in the
certificates. State also in an appropriate manner reserve recoveries
from surrenders or other causes.
5. Investment income before income tax expense.
6. Income tax expense. Include under this caption only taxes based
on income.
7. Investment income-net.
8. Realized gain (loss) on investments-net.
(a) State separately the net realized gain or loss on transactions
in: (1) Investment securities of unaffiliated issuers, (2) investment
securities of affiliated issuers, and (3) other investments.
(b) Distributions of capital gains by other investment companies
shall be shown separately under this caption.
(c) State separately any: (1) Federal income taxes and (2) other
income taxes applicable to realized gain (loss) on investments,
distinguishing taxes payable currently from deferred income taxes.
9. Net income or loss.
17 CFR 210.6-09 Statements of changes in net assets.
Statements of changes in net assets filed for persons to whom this
article is applicable shall comply with the following provisions:
1. Operations. State separately: (a) Investment income-net as shown
by 210.6-07.6; (b) realized gain (loss) on investments-net of any
Federal or other income taxes applicable to such amounts; (c) increase
(decrease) in unrealized appreciation or depreciation-net of any Federal
or other income taxes applicable to such amounts; and (d) net increase
(decrease) in net assets resulting from operations as shown by
210.6-07.9.
2. Net equalization charges and credits. State the net amount of
accrued undivided earnings separately identified in the price of capital
shares issued and repurchased.
3. Distributions to shareholders. State separately distributions to
shareholders from: (a) Investment income-net; (b) realized gain from
investment transactions-net; and (c) other sources.
4. Capital share transactions. (a) State the increase or decrease in
net assets derived from the net change in the number of outstanding
shares or units.
(b) Disclose in the body of the statements or in the notes, for each
class of the person's shares, the number and value of shares issued in
reinvestment of dividends as well as the number of dollar amounts
received for shares sold and paid for shares redeemed.
5. Total increase (decrease).
6. Net assets at the beginning of the period.
7. Net assets at the end of the period. Disclose parenthetically the
balance of undistributed net investment income included in net assets at
the end of the period.
17 CFR 210.6-10 What schedules are to be filed.
(a) When information is required in schedules for both the person and
its subsidiaries consolidated, it may be presented in the form of a
single schedule, provided that items pertaining to the registrant are
separately shown and that such single schedule affords a properly
summarized presentation of the facts. If the information required by
any schedule (including the notes thereto) is shown in the related
financial statement or in a note thereto without making such statement
unclear or confusing, that procedure may be followed and the schedule
omitted.
(b) The schedules shall be examined by an independent accountant if
the related financial statements are so examined.
(c) Management investment companies. Except as otherwise provided in
the applicable form: (1) The schedules specified below in this rule
shall be filed for management investment companies as of the dates of
the most recent audited balance sheet and any subsequent unaudited
statement being filed for each person or group.
Schedule I -- Investments in securities of unaffiliated issuers. The
schedule prescribed by 210.12-12 shall be filed in support of caption 1
of each balance sheet.
Schedule II -- Investments -- other than securities. The schedule
prescribed by 210.12-13 shall be filed in support of caption 3 of each
balance sheet. This schedule may be omitted if the investments, other
than securities, at both the beginning and end of the period amount to
less than one percent of the value of total investments ( 210.6-04.4).
Schedule III -- Investments in and advances to affiliates. The
schedule prescribed by 210.12-14 shall be filed in support of caption 2
of each balance sheet.
Schedule IV -- Amounts due from directors and officers. The schedule
prescribed by 210.12-03 shall be filed with respect to each person
among the directors and officers from whom any amount was owed at any
time during the period for which related statements of changes in net
assets are required to be filed.
Schedule V -- Investments -- securities sold short. The schedule
prescribed by 210.12-12A shall be filed in support of caption 10(a) of
each balance sheet.
Schedule VI -- Open option contracts written. The schedule
prescribed by 210.12-12B shall be filed in support of caption 10(b) of
each balance sheet.
Schedule VII -- Short-term borrowings. The schedule prescribed by
210.12-10 shall be filed in support of any amounts included in caption
13 of each balance sheet which are payable within one year to banks for
borrowings; factors and other financial institutions for borrowings;
and holders of any short-term notes.
(d) Unit investment trusts. Except as otherwise provided in the
applicable form: (1) Schedules I and II, specified below in this
section, shall be filed for unit investment trusts as of the dates of
the most recent audited balance sheet and any subsequent unaudited
statement being filed for each person or group.
(2) Schedule III, specified below in this section, shall be filed for
unit investment trusts for each period for which a statement of
operations is required to be filed for each person or group.
Schedule I -- Investment in securities. The schedule prescribed by
210.12-12 shall be filed in support of caption 1 of each balance sheet (
210.6-04).
Schedule II -- Allocation of trust assets to series of trust shares.
If the trust assets are specifically allocated to different series of
trust shares, and if such allocation is not shown in the balance sheet
in columnar form or by the filing of separate statements for each series
of trust shares, a schedule shall be filed showing the amount of trust
assets, indicated by each balance sheet filed, which is applicable to
each series of trust shares.
Schedule III -- Allocation of trust income and distributable funds to
series of trust shares. If the trust income and distributable funds are
specifically allocated to different series of trust shares and if such
allocation is not shown in the statement of operations in columnar form
or by the filing of separate statements for each series of trust shares,
a schedule shall be submitted showing the amount of income and
distributable funds, indicated by each statement of operations filed,
which is applicable to each series of trust shares.
(e) Face-amount certificate investment companies. Except as
otherwise provided in the applicable form:
(1) Schedules I, V and X, specified below, shall be filed for
face-amount certificate investment companies as of the dates of the most
recent audited balance sheet and any subsequent unaudited statement
being filed for each person or group.
(2) All other schedules specified below in this seciton shall be
filed for face-amount certificate investment companies for each period
for which a statement of operations is filed, except as indicated for
Schedules III and IV.
Schedule I -- Investment in securities of unaffiliated issuers. The
schedule prescribed by 210.12-21 shall be filed in support of caption 1
and, if applicable, caption 5(a) of each balance sheet. Separate
schedules shall be furnished in support of each caption, if applicable.
Schedule II -- Investments in and advances to affiliates and income
thereon. The schedule prescribed by 210.12-22 shall be filed in
support of captions 1 and 5(b) of each balance sheet and caption 1 of
each statement of operations. Separate schedules shall be furnished in
support of each caption, if applicable.
Schedule III -- Mortage loans on real estate and interest earned on
mortages. The schedule prescribed by 210.12-23 shall be filed in
support of captions 1 and 5(c) of each balance sheet and caption 1 of
each statement of operations, except that only the information required
by column G and note 8 of the schedule need be furnished in support of
statements of operations for years for which related balance sheets are
not required.
Schedule IV -- Real estate owned and rental income. The schedule
prescribed by 210.12-24 shall be filed in support of captions 1 and
5(a) of each balance sheet and caption 1 of each statement of operations
for rental income included therein, except that only the information
required by columns H, I and J, and item ''Rent from properties sold
during the period'' and note 4 of the schedule need be furnished in
support of statements of operations for years for which related balance
sheets are not required.
Schedule V -- Qualified assets on deposit. The schedule prescribed
by 210.12-27 shall be filed in support of the information required by
caption 4 of 210.6-06 as to total amount of qualified assets on
deposit.
Schedule VI -- Amounts due from officers and directors. The schedule
prescribed by 210.12-03 shall be filed with respect to each director,
officer, or employee from whom any amount was owed at any time during
the period for which related statements of operation are filed. State
if an exemption has been granted by the Commission with respect to
amounts included in this schedule.
Schedule VII -- Short-term borrowings. The schedule prescribed by
210.12-10 shall be filed in support of any amounts included in caption 8
of each balance sheet which are payable within one year to banks for
borrowings; factors and other financial institutions for borrowings;
and holders of any short-term notes.
Schedule VIII -- Indebtedness to affiliates -- not current. The
schedule prescribed by 210.12-05 shall be filed in support of any
amounts included in caption 9 of each balance sheet. This schedule and
Schedule II may be combined.
Schedule IX -- Supplementary profit and loss information. The
schedule prescribed by 210.12-25 shall be filed in support of each
statement of operations.
Schedule X -- Guarantees of securities of other issuers. The
schedule prescribed by 210.12-08 shall be filed with respect to any
guarantees of securities of other issuers by the person for which the
statement is filed.
Schedule XI -- Certificate reserves. The schedule prescribed by
210.12-26 shall be filed in support of caption 7 of each balance sheet.
Schedule XII -- Valuation and qualifying accounts. The schedule
prescribed by 210.12-09 shall be filed in support of all other reserves
included in the balance sheet.
17 CFR 210.6-10 Employee Stock Purchase, Savings and Similar Plans
17 CFR 210.6A-01 Application of 210.6A-01 to 210.6A-05.
(a) Sections 210.6A-01 to 210.6A-05 shall be applicable to financial
statements filed for employee stock purchase, savings and similar plans.
(47 FR 56843, Dec. 21, 1982)
17 CFR 210.6A-02 Special rules applicable to employee stock purchase,
savings and similar plans.
The financial statements filed for persons to which this article is
applicable shall be prepared in accordance with the following special
rules in addition to the general rules in 210.1-01 to 210.4-10. Where
the requirements of a special rule differ from those prescribed in a
general rule, the requirements of the special rule shall be met.
(a) Investment programs. If the participating employees have an
option as to the manner in which their deposits and contributions may be
invested, a description of each investment program shall be given in a
footnote or otherwise. The number of employees under each investment
program shall be stated.
(b) Net asset value per unit. Where appropriate, the number of units
and the net asset value per unit shall be given by footnote or
otherwise.
(c) Federal income taxes. (1) If the plan is not subject to Federal
income taxes, a note shall so state indicating briefly the principal
assumptions on which the plan relied in not making provision for such
taxes.
(2) State the Federal income tax status of the employee with respect
to the plan.
(d) Valuation of assets. The statement of financial condition shall
reflect all investments at value, showing cost parenthetically. For
purposes of this rule, the term value shall mean (1) market value for
those securities having readily available market quotations and (2) fair
value as determined in good faith by the trustee(s) for the plan (or by
the person or persons who exercise similar responsibilities) with
respect to other securities and assets.
(47 FR 56843, Dec. 21, 1982)
17 CFR 210.6A-03 Statements of financial condition.
Statements of financial condition filed under this rule shall comply
with the following provisions:
1. Investments in securities of participating employers. State
separately each class of securities of the participating employer or
employers.
2. Investments in securities of unaffiliated issuers.
(a) United States Government bonds and other obligations. Include
only direct obligations of the United States Government.
(b) Other securities. State separately (1) marketable securities and
(2) other securities.
3. Investments. Other than securities. State separately each major
class.
4. Dividends and interest receivable.
5. Cash.
6. Other assets. State separately (a) total of amounts due from
participating employers or any of their directors, officers and
principal holders of equity securities; (b) total of amounts due from
trustees or managers of the plan; and (c) any other significant
amounts.
7. Liabilities. State separately (a) total of amounts payable to
participating employers; (b) total of amounts payable to participating
employees; and (c) any other significant amounts.
8. Reserves and other credits. State separately each significant
item and describe each such item by using an appropriate caption or by a
footnote referred to in the caption.
9. Plan equity at close of period.
(27 FR 7870, Aug. 9, 1962. Redesignated at 47 FR 56843, Dec. 21,
1982)
17 CFR 210.6A-04 Statements of income and changes in plan equity.
Statements of income and changes in plan equity filed under this rule
shall comply with the following provisions:
1. Net investment income.
(a) Income. State separately income from (1) cash dividends; (2)
interest, and (3) other sources. Income from investments in or
indebtedness of participating employers shall be segregated under the
appropriate subcaption.
(b) Expenses. State separately any significant amounts.
(c) Net investment income.
2. Realized gain or loss on investments. (a) State separately the
net of gains or losses arising from transactions in (1) investments in
securities of the participating employer or employers; (2) other
investments in securities; and (3) other investments.
(b) State in a footnote or otherwise for each category of investment
in paragraph (a) above the aggregate cost, the aggregate proceeds and
the net gain or loss. State the principle followed in determining the
cost of securities sold, e.g., average cost or first-in, first-out.
3. Unrealized appreciation or depreciation of investments. (a) State
the amount of increase or decrease in unrealized appreciation or
depreciation of investments during the period.
(b) State in a footnote or otherwise the amount of unrealized
appreciation or depreciation of investments at the beginning of the
period of report, at the end of the period of report, and the increase
or decrease during the period.
4. Contributions and deposits. (a) State separately (1) total of
amounts deposited by participating employees, and (2) total of amounts
contributed by the participating employer or employers.
(b) If employees of more than one employer participate in the plan,
state in tabular form in a footnote or otherwise the amount contributed
by each employer and the deposits of the employees of each such
employer.
5. Withdrawals, lapses and forfeitures. State separately (a)
balances of employees' accounts withdrawn, lapsed or forfeited during
the period; (b) amounts disbursed in settlement of such accounts; and
(c) disposition of balances remaining after settlement specified in (b).
6. Plan equity at beginning of period.
7. Plan equity at end of period.
(27 FR 7870, Aug. 9, 1962. Redesignated at 47 FR 56843, Dec. 21,
1982)
17 CFR 210.6A-05 What schedules are to be filed.
(a) Schedule I, specified below, shall be filed as of the most recent
audited statement of financial condition and any subsequent unaudited
statement of financial condition being filed. Schedule II shall be
filed as of the date of each statement of financial condition being
filed. Schedule III shall be filed for each period for which a
statement of income and changes in plan equity is filed. All schedules
shall be audited if the related statements are audited.
Schedule I -- Investments. A schedule substantially in form
prescribed by 210.12-12 shall be filed in support of captions 1, 2 and
3 of each statement of financial condition unless substantially all of
the information is given in the statement of financial condition by
footnote or otherwise.
Schedule II -- Allocation of plan assets and liabilities to
investment program. If the plan provides for separate investment
programs with separate funds, and if the allocation of assets and
liabilities to the several funds is not shown in the statement of
financial condition in columnar form or by the submission of separate
statements for each fund, a schedule shall be submitted showing the
allocation of each caption of each statement of financial condition
filed to the applicable fund.
Schedule III -- Allocation of plan income and changes in plan equity
to investment programs. If the plan provides for separate investment
programs with separate funds, and if the allocation of income and
changes in plan equity to the several funds is not shown in the
statement of income and changes in plan equity in columnar form or by
the submission of separate statements for each fund, a schedule shall be
submitted showing the allocation of each caption of each statement of
income and changes in plan equity filed to the applicable fund.
(45 FR 63676, Sept. 25, 1980. Redesignated at 47 FR 56843, Dec. 21,
1982, and amended at 50 FR 25215, June 18, 1985)
17 CFR 210.6A-05 Insurance Companies
Authority: Secs. 6, 7, 8, 10, 12, 13, 15, 19, 23 (15 U.S.C. 77f,
77g, 77h, 77j, 77s, 78l, 78m, 78o(d), 78w, 79e, 79n, 79t, 80a-8, 80a-29,
80a-30(c), 80(a)).
Source: Sections 210.7-01 to 210.7-05 appears at 46 FR 54335, Nov.
2, 1981, unless otherwise noted.
17 CFR 210.7-01 Application of 210.7-01 to 210.7-05.
This article shall be applicable to financial statements filed for
insurance companies.
17 CFR 210.7-02 General requirement.
(a) The requirements of the general rules in 210.1-01 to 210.4-10
(Articles 1, 2, 3, 3A and 4) shall be applicable except where they
differ from requirements of 210.7-01 to 210.7-05.
(b) Financial statements filed for mutual life insurance companies
and wholly owned stock insurance company subsidiaries of mutual life
insurance companies may be prepared in accordance with statutory
accounting requirements. Financial statements prepared in accordance
with statutory accounting requirements may be condensed as appropriate,
but the amounts to be reported for net gain from operations (or net
income or loss) and total capital and surplus (or surplus as regards
policyholders) shall be the same as those reported on the corresponding
Annual Statement.
17 CFR 210.7-03 Balance sheets.
(a) The purpose of this rule is to indicate the various items which,
if applicable, and except as otherwise permitted by the Commission,
should appear on the face of the balance sheets and in the notes thereto
filed for persons to whom this article pertains. (See 210.4-01(a).)
1. Investments -- other than investments in related parties.
(a) Fixed maturities.
(b) Equity securities.
(c) Mortgage loans on real estate.
(d) Investment real estate.
(e) Policy loans.
(f) Other long-term investments.
(g) Short-term investments.
(h) Total investments.
Notes: (1) State parenthetically or otherwise in the balance sheet
(a) the basis of determining the amounts shown in the balance sheet and
(b) as to fixed maturities and equity securities either aggregate cost
or aggregate value at the balance sheet date, whichever is the alternate
amount of the carrying value in the balance sheet. Consideration shall
be given to the discussion of ''Valuation of Securities'' in 404.03 of
the Codification of Financial Reporting Policies.
(2) Include under fixed maturities: bonds, notes, marketable
certificates of deposit with maturities beyond one year, and redeemable
preferred stocks. Include under equity securities: common stocks and
nonredeemable preferred stocks.
(3) State separately in the balance sheet or in a note thereto the
amount of accumulated depreciation and amortization deducted from
investment real estate. Subcaption (d) shall not include real estate
acquired in settling title claims, mortgage guaranty claims, and similar
insurance claims. Real estate acquired in settling claims shall be
included in caption 10, ''Other Assets,'' or shown separately, if
material.
(4) Include under subcaption (g) investments maturing within one
year, such as commercial paper maturing within one year, marketable
certificates of deposit maturing within one year, savings accounts, time
deposits and other cash accounts and cash equivalents earning interest.
State in a note any amounts subject to withdrawal or usage restrictions.
(See 210.5-02.1.)
(5) State separately in a note the amount of any class of investments
included in subcaption (f) if such amount exceeds ten percent of
stockholders' equity.
(6) State in a note the name of any person in which the total amount
invested in the person and its affiliates, included in the above
subcaptions, exceeds ten percent of total stockholders' equity. For
this disclosure, include in the amount invested in a person and its
affiliates the aggregate of indebtedness and stocks issued by such
person and its affiliates that is included in the several subcaptions
above, and the amount of any real estate included in subcaption (d) that
was purchased or acquired from such person and its affiliates. Indicate
the amount included in each subcaption. An investment in bonds and
notes of the United States Government or of a United States Government
agency or authority which exceeds ten percent of total stockholders'
equity need not be reported.
(7) State in a note the amount of investments included under each
subcaption (a), (c), (d) and (f) which have been non-income producing
for the twelve months preceding the balance sheet date.
2. Cash. Cash on hand or on deposit that is restricted as to
withdrawal or usage shall be disclosed separately on the balance sheet.
The provisions of any restrictions shall be described in a note to the
financial statements. Restrictions may include legally restricted
deposits held as compensating balances against short-term borrowing
arrangements, contracts entered into with others, or company statements
of intention with regard to particular deposits. In cases where
compensating balance arrangements exist but are not agreements which
legally restrict the use of cash amounts shown on the balance sheet,
describe in the notes to the financial statements these arrangements and
the amount involved, if determinable, for the most recent audited
balance sheet required. Compensating balances that are maintained under
an agreement to assure future credit availability shall be disclosed in
the notes to the financial statements along with the amount and terms of
the agreement.
3. Securities and indebtedness of related parties. State separately
(a) investments in related parties and (b) indebtedness from such
related parties. (See 210.4-08(k).)
4. Accrued investment income.
5. Accounts and notes receivable. Include under this caption (a)
amounts receivable from agents and insureds, (b) uncollected premiums
and (c) other receivables. State separately in the balance sheet or in
a note thereto any category of other receivable which is in excess of
five percent of total assets. State separately in the balance sheet or
in a note thereto the amount of allowance for doubtful accounts that was
deducted.
6. Reinsurance recoverable on paid losses.
7. Deferred policy acquisition costs.
8. Property and equipment. (a) State the basis of determining the
amounts.
(b) State separately in the balance sheet or in a note thereto the
amount of accumulated depreciation and amortization of property and
equipment.
9. Title plant.
10. Other assets. State separately in the balance sheet or in a note
thereto any other asset the amount of which exceeds five percent of
total assets.
11. Assets held in separate accounts. Include under this caption the
aggregate amount of assets used to fund liabilities related to variable
annuities, pension funds and similar activities. The aggregate
liability shall be included under caption 18. Describe in a note to the
financial statements the general nature of the activities being reported
on in the separate accounts.
12. Total assets.
13. Policy liabilities and accruals. (a) State separately in the
balance sheet the amounts of (1) future policy benefits and losses,
claims and loss expenses, (2) unearned preminums and (3) other policy
claims and benefits payable.
(b) State in a note to the financial statements the basis of
assumptions (interest rates, mortality, withdrawals) for future policy
benefits and claims and settlements which are stated at present value.
(c) Information shall be given in a note concerning the general
nature of reinsurance transactions, including a description of the
significant types of reinsurance agreements executed. The information
provided shall include (1) the nature of the contingent liability in
connection with insurance ceded and (2) the nature and effect of
material nonrecurring reinsurance transactions.
14. Other policyholders' funds. (a) Include amounts of supplementary
contracts without life contingencies, policyholders' dividend
accumulations, undistributed earnings on participating business,
dividends to policyholders and retrospective return premiums (not
included elsewhere) and any similar items. State separately in the
balance sheet or in a note thereto any item the amount of which is in
excess of five percent of total liabilities.
(b) State in a note to the financial statements the relative
significance of participating insurance expressed as percentages of (1)
insurance in force and (2) premium income; and the method by which
earnings and dividends allocable to such insurance is determined.
15. Other liabilities. (a) Include under this caption such items as
accrued payrolls, accrued interest and taxes. State separately in the
balance sheet or in a note thereto any item included in other
liabilities the amount of which exceeds five percent of total
liabilities.
(b) State separately in the balance sheet or in a note thereto the
amount of (1) income taxes payable and (2) deferred income taxes.
Disclose separately the amount of deferred income taxes applicable to
unrealized appreciation of equity securities.
16. Notes payable, bonds, mortgages and similar obligations,
including capitalized leases. (a) State separately in the balance sheet
the amounts of (1) short-term debt and (2) long-term debt including
capitalized leases.
(b) The disclosure required by 210.5-02.19(b) shall be given if the
aggregate of short-term borrowings from banks, factors and other
financial institutions and commercial paper issued exceeds five percent
of total liabilities.
(c) The disclosure requirements of 210.5-02.22 shall be followed for
long-term debt.
17. Indebtedness to related parties. (See 210.4-0.8(k).)
18. Liabilities related to separate accounts. (See caption 11.)
19. Commitments and contingent liabilities.
20. Minority interests in consolidated subsidiaries. The disclosure
requirements of 210.5-02.27 shall be followed.
21. Preferred stocks subject to mandatory redemption requirements or
whose redemption is outside the control of the issuer. The
classification and disclosure requirements of 210.5-02.28 shall be
followed.
22. Preferred stocks which are not redeemable or are redeemable
solely at the option of the issuer. The classification and disclosure
requirements of 210.5-02.29 shall be followed.
23. Common stocks. The classification and disclosure requirements of
210.5-02.30 shall be followed.
24. Other stockholders' equity. (a) Separate captions shall be shown
for (1) additional paid-in capital, (2) other additional capital, (3)
unrealized appreciation or depreciation of equity securities less
applicable deferred income taxes, (4) retained earnings (i) appropriated
and (ii) unappropriated. (See 210.4-08(e).) Additional paid-in capital
and other additional capital may be combined with the stock caption to
which they apply, if appropriate.
(b) The classification and disclosure requirements of 210.5-02.31(b)
and (c) shall be followed for (1) dating and effect of a
quasi-reorganization and (2) summaries of each stockholder's equity
account.
(c) State in a note the following information separately for (1) life
insurance legal entities, and (2) property and liability insurance legal
entities: the amount of statutory stockholders' equity as of the date
of each balance sheet presented and the amount of statutory net income
or loss for each period for which an income statement is presented.
25. Total liabilities and stockholders' equity.
(46 FR 54335, Nov. 2, 1981, as amended at 50 FR 25215, June 18, 1985)
17 CFR 210.7-04 Income statements.
The purpose of this rule is to indicate the various items which, if
applicable, should appear on the face of the income statements and in
the notes thereto filed for persons to whom this article pertains. (See
210.4-01(a).)
1. Premiums. Include premiums from reinsurance assumed and deduct
premiums on reinsurance ceded. Where applicable, the amounts included
in this caption should represent premiums earned.
2. Net investment income. State in a note to the financial
statements, in tabular form, the amounts of (a) investment income from
each category of investments listed in the subcaptions of 210.7-03.1
that exceeds five percent of total investment income, (b) total
investment income, (c) applicable expenses, and (d) net investment
income.
3. Other income. Include all revenues not included in captions 1 and
2 above. State separately in the statement any amounts in excess of
five percent of total revenue, and disclose the nature of the
transactions from which the items arose.
4. Benefits, claims, losses and settlement expenses.
5. Policyholders' share of earnings on participating policies,
dividends and similar items. (See 210.7-03.14(b).)
6. Underwriting, acquisition and insurance expenses. State
separately in the income statement or in a note thereto (a) the amount
included in this caption representing deferred policy acquisition costs
amortized to income during the period, and (b) the amount of other
operating expenses. State separately in the income statement any
material amount included in all other operating expenses.
7. Income or loss before income tax expense and appropriate items
below.
8. Income tax expense. Include under this caption only taxes based
on income. (See 210.4-08(g).)
9. Minority interest in income of consolidated subsidiaries.
10. Equity in earnings of unconsolidated subsidiaries and 50 percent
or less owned persons. The amount reported under this caption shall be
stated net of any applicable tax provisions and shall exclude gains or
losses on investments and other items below. State in the income
statement or in a note thereto the amount of dividends received from
such persons. If justified by the circumstances, this item may be
presented in a different position and a different manner.
11. Income or loss before realized gains or losses on investments and
extraordinary items.
12. Realized gains or losses on investments other than investments in
affiliates, less applicable tax. (a) State separately in the income
statement or in a note thereto the amount of equity in net realized
investment gains or losses of persons for which the equity in earnings
was reported under caption 10, disclosing parenthetically or otherwise
the tax applicable to such amounts. State in the income statement or in
a note thereto the method followed in determining the cost of
investments, e.g., ''average cost,'' ''first-in, first-out,'' or
''identified certificate.''
(b) For each period for which an income statement is filed, include
in a note an analysis of realized and unrealized investment gains or
losses on fixed maturities and equity securities. For each period,
state separately for fixed maturities (see 210.7-03.1(a)) and for
equity securities (see 210.7-03.1(b)) the following amounts: (1)
realized investment gains or losses, less applicable tax (included in
210.7-04.12), and (2) the change during the period in the difference
between value and cost adjusted for applicable tax effects. The change
in the difference between value and cost shall be given for both
categories of investments even though they may be shown on the related
balance sheet on a basis other than value.
(c) Parenthetically following this caption, refer to the note
including the analysis required by (b) above.
13. Discontinued operations.
14. Income or loss before extraordinary items and cumulative effects
of changes in accounting principles.
15. Extraordinary items, less applicable tax.
16. Cumulative effects of changes in accounting principles.
17. Net income or loss.
18. Earnings per share data.
17 CFR 210.7-05 What schedules are to be filed.
(a) Except as expressly provided otherwise in the applicable form:
(1) The schedules specified below as Schedules I and VII shall be
filed as of the dates of the most recent audited balance sheet for each
person or group.
(2) Other schedules specified below as Schedules II, IV, VI, VIII and
IX shall be filed for each period for which an audited income statement
is required to be filed for each person or group.
(3) Schedules III, V, and X shall be filed as of the dates and for
the periods specified in the schedule.
(b) When information is required in schedules for both the registrant
and the registrant and its subsidiaries consolidated it may be presented
in the form of a single schedule: Provided, That items pertaining to
the registrant are shown separately and that such single schedule
affords a properly summarized presentation of the facts. If the
information required by any schedule (including the notes thereto) may
be shown in the related financial statement or in a note thereto without
making such statement unclear or confusing, that procedure may be
followed and the schedule omitted.
(c) The schedules shall be examined by the independent accountant.
Schedule I -- Summary of investments -- other than investments in
related parties. The schedule prescribed by 210.12-15 shall be filed
in support of caption 1 of the most recent audited balance sheet.
Schedule II -- Amounts receivable from related parties, and
underwriters, promoters, and employees other than related parties. The
schedule prescribed by 210.12-03 shall be filed with respect to each
person among related parties, and underwriters, promoters, and employees
other than related parties, from whom an aggregate indebtedness of more
than $100,000 or one percent of total assets, whichever is less, is
owed, or at any time during the period for which related audited income
statements are required to be filed was owed. This schedule shall not
include information which is prescribed by 210.12-05. For purposes of
this schedule, exclude in the determination of the amount of
indebtedness all amounts receivable from such persons for purchases
subject to usual trade terms, for ordinary travel and expense advances,
and for other such items arising in the ordinary course of business.
Schedule III -- Condensed financial information of registrant. The
schedule prescribed by 210.12-04 shall be filed when the restricted net
assets ( 210.4.08(e)(3)) of consolidated subsidiaries exceed 25 percent
of consolidated net assets as of the end of the most recently completed
fiscal year. For purposes of the above test, restricted net assets of
consolidated subsidiaries shall mean that amount of the registrant's
proportionate share of net assets of consolidated subsidiaries (after
intercompany eliminations) which as of the end of the most recent fiscal
year may not be transferred to the parent company by subsidiaries in the
form of loans, advances or cash dividends without the consent of a third
party (i.e., lender, regulatory agency, foreign government, etc.). Where
restrictions on the amount of funds which may be loaned or advanced
differ from the amount restricted as to transfer in the form of cash
dividends, the amount least restrictive to the subsidiary shall be used.
Redeemable preferred stocks ( 210.7-03.21) and minority interests shall
be deducted in computing net assets for purposes of this test.
Schedule IV -- Indebtedness of and to related parties -- not current.
The schedule prescribed by 210.12-05 shall be filed in support of
captions 3(b) and 17 of the balance sheet. This schedule may be omitted
if (1) neither the sum of captions 3(a) and 3(b) in the related balance
sheet nor the amount of caption 17 in such balance sheet exceeds five
percent of total assets as shown by the related balance sheet at either
the beginning or end of the period or (2) there have been no material
changes in the information required to be filed from that last
previously reported.
Schedule V -- Supplementary insurance information. The schedule
prescribed by 210.12-16 shall be filed giving segment detail in support
of various balance sheet and income statement captions. The required
balance sheet information shall be presented as of the date of each
audited balance sheet filed, and the income statement information shall
be presented for each period for which an audited income statement is
required to be filed, for each person or group.
Schedule VI -- Reinsurance. The schedule prescribed by 210.12-17
shall be filed for reinsurance ceded and assumed.
Schedule VII -- Guarantees of securities of other issuers. The
schedule prescribed by 210.12-08 shall be filed with respect to any
guarantees of securities of other issuers by the person for which the
statement is being filed.
Schedule VIII -- Valuation and qualifying accounts. The schedule
prescribed by 210.12-09 shall be filed in support of valuation and
qualifying accounts included in the balance sheet (see 210.4-02).
Schedule IX -- Short-term borrowings. The schedule prescribed by
210.12-10 shall be filed in support of caption 16(a)(1) of the balance
sheet to report amounts payable to banks for borrowings; factors and
financial institutions for borrowings; and holders of commercial paper.
The information required by this schedule may be presented in
Management's Discussion and Analysis if it results in a more meaningful
presentation of the information being provided. If that procedure is
followed, the schedule may be omitted if appropriate cross-references
are made.
Schedule X -- Supplemental Information Concerning Property-Casualty
Insurance Operations. The information required by 210.12-18 shall be
presented as of the same dates and for the same periods for which the
information is reflected in the audited consolidated financial
statements required by 210.3-01 and 3-02. The schedule may be omitted
if reserves for unpaid property-casualty claims and claim adjustment
expenses of the registrant and its consolidated subsidiaries, its
unconsolidated subsidiaries and its 50%-or-less-owned equity basis
investees did not in the aggregate, exceed one-half of common
stockholders' equity of the registrant and its consolidated subsidiaries
as of the beginning of the fiscal year. For purposes of this test, only
the proportionate share of the registrant and its other subsidiaries in
the reserves for unpaid claims and claim adjustment expenses of
50%-or-less-owned equity investees taken in the aggregate after
intercompany eliminations shall be taken into account. Article 12 --
Form and Content of Schedules (17 CFR 210)
(Secs. 7 and 19a of the Securities Act, 15 U.S.C. 77g, 77s(a),
77aa(25)(26); secs. 12, 13, 14, 15(d), and 23(a) of the Securities
Exchange Act of 1934, 15 U.S.C. 78l, 78m, 78n, 78o(d), 78w(a), secs.
5(b), 10(a), 14, 20(a) of the Public Utility Holding Company Act, 15
U.S.C. 79e(a), 79n, 79t(a); secs. 8, 20, 30, 31(c), 38(a) of the
Investment Company Act of 1940, 15 U.S.C. 80a-8, 80a-20, 80a-29,
80a-30(c), 80a-37(a); secs. 6, 7, 8, 10, 19(a))
(46 FR 54335, Nov. 2, 1981, as amended at 47 FR 29837, July 9, 1982;
49 FR 47598, Dec. 6, 1984)
17 CFR 210.7-05 Bank Holding Companies
Source: Sections 210.9-01 to 210.9-07 appear at 48 FR 11107, Mar.
16, 1983, unless otherwise noted.
17 CFR 210.9-01 Application of 210.9-01 to 210.9-07
This article is applicable to consolidated financial statements filed
for bank holding companies and to any financial statements of banks that
are included in filings with the Commission.
17 CFR 210.9-02 General requirement.
The requirements of the general rules in 210.1 to 210.4 (Articles
1, 2, 3, 3A and 4) should be complied with where applicable.
17 CFR 210.9-03 Balance sheets.
The purpose of this rule is to indicate the various items which, if
applicable, should appear on the face of the balance sheets or in the
notes thereto.
17 CFR 210.9-03 Assets
1. Cash and due from banks. The amounts in this caption should
include all noninterest bearing deposits with other banks.
(a) Any withdrawal and usage restrictions (including requirements of
the Federal Reserve to maintain certain average reserve balances) or
compensating balance requirements should be disclosed (see 210.5-02-1).
2. Interest-bearing deposits in other banks.
3. Federal funds sold and securities purchased under resale
agreements of similar arrangements. These amounts should be presented
gross and not netted against Federal funds purchased and securities sold
under agreement to repurchase as reported in Caption 13.
4. Trading account assets. Include securities or any other
investments held for trading purposes only.
5. Other short-term investments.
6. Investment securities Include securities held for investment only.
Disclose the aggregate book value of investment securities; show on
the balance sheet the aggregate market value at the balance sheet date.
The aggregate amounts should include securities pledged, loaned or sold
under repurchase agreements and similar arrangements; borrowed
securities and securities purchased under resale agreements or similar
arrangements should be excluded.
(a) Disclose in a note the carrying value and market value of
securities of (1) the U.S. Treasury and other U.S. Government agencies
and corporations; (2) states of the U.S. and political subdivisions;
and (3) other securities.
7. Loans. Disclose separately (1) total loans, (2) the related
allowance for losses and (3) unearned income.
(a) Disclose on the balance sheet or in a note the amount of total
loans in each of the following categories:
(1) Commercial, financial and agricultural
(2) Real estate -- construction
(3) Real estate -- mortgage
(4) Installment loans to individuals
(5) Lease financing
(6) Foreign
(7) Other (State separately any other loan category regardless of
relative size if necessary to reflect any unusual risk concentration).
(b) A series of categories other than those specified in (a) above
may be used to present details of loans if considered a more appropriate
presentation.
(c) The amount of foreign loans must be presented if the disclosures
provided by 210.9-05 are required.
(d) For each period for which an income statement is required,
furnish in a note a statement of changes in the allowance for loan
losses showing the balances at beginning and end of the period provision
charged to income, recoveries of amounts charged off and losses charged
to the allowance.
(e)(1)(i) As of each balance sheet date, disclose in a note the
aggregate dollar amount of loans (exclusive of loans to any such persons
which in the aggregate do not exceed $60,000 during the latest year)
made by the registrant or any of its subsidiaries to directors,
executive officers, or principal holders of equity securities (
210.1-02) of the registrant or any of its significant subsidiaries (
210.1-02), or to any associate of such persons. For the latest fiscal
year, an analysis of activity with respect to such aggregate loans to
related parties should be provided. The analysis should include the
aggregate amount at the beginning of the period, new loans, repayments,
and other changes. (Other changes, if significant, should be
explained.)
(ii) This disclosure need not be furnished when the aggregate amount
of such loans at the balance sheet date (or with respect to the latest
fiscal year, the maximum amount outstanding during the period) does not
exceed 5 percent of stockholders equity at the balance sheet date.
(2) If a significant portion of the aggregate amount of loans
outstanding at the end of the fiscal year disclosed pursuant to
(e)(1)(i) above relates to loans which are disclosed as nonaccrual, past
due, restructured or potential problems (see Item III.C. 1. or 2. of
Industry Guide 3, Statistical Disclosure by Bank Holding Companies), so
state and disclose the aggregate amounts of such loans along with such
other information necessary to an understanding of the effects of the
transactions on the financial statements.
(3) Notwithstanding the aggregate disclosure called for by (e)(1)
above, if any loans were not made in the ordinary course of business
during any period for which an income statement is required to be filed,
provide an appropriate description of each such loan (see
210.4-08(L)(3)).
(4) Definition of terms. For purposes of this rule, the following
definitions shall apply:
Associate means (i) a corporation, venture or organization of which
such person is a general partner or is, directly or indirectly, the
beneficial owner of 10 percent or more of any class of equity
securities; (ii) any trust or other estate in which such person has a
substantial beneficial interest or for which such person serves as
trustee or in a similar capacity and (iii) any member of the immediate
family of any of the foregoing persons.
Executive officers means the president, any vice president in charge
of a principal business unit, division or function (such as loans,
investments, operations, administration or finance), and any other
officer or person who performs similar policymaking functions.
Immediate Family means such person's spouse; parents; children;
siblings; mothers and fathers-in-law; sons and daughters-in-law; and
brothers and sisters-in-law.
Ordinary course of business means those loans which were made on
substantially the same terms, including interest rate and collateral, as
those prevailing at the same time for comparable transactions with
unrelated persons and did not involve more than the normal risk of
collectibility or present other unfavorable features.
8. Premises and equipment.
9. Due from customers on acceptances. Include amounts receivable
from customers on unmatured drafts and bills of exchange that have been
accepted by a bank subsidiary or by other banks for the account of a
subsidiary and that are outstanding -- that is, not held by a subsidiary
bank, on the reporting date. (If held by a bank subsidiary, they should
be reported as ''loans'' under 210.9-03.7.)
10. Other assets. Disclose separately on the balance sheet or in a
note thereto any of the following assets or any other asset the amount
of which exceeds thirty percent of stockholders equity. The remaining
assets may be shown as one amount.
(1) Excess of cost over tangible and identifiable intangible assets
acquired (net of amortization).
(2) Other intangible assets (net of amortization).
(3) Investments in and indebtness of affiliates and other persons.
(4) Other real estates.
(a) Disclose in a note the basis at which other real estate is
carried. An reduction to fair market value from the carrying value of
the related loan at the time of acquisition shall be accounted for as a
loan loss. Any allowance for losses on other real estate which has been
established subsequent to acquisition should be deducted from other real
estate. For each period for which an income statement is required,
disclosures should be made in a note as to the changes in the
allowances, including balance at beginning and end of period, provision
charged to income, and losses charged to the allowance.
11. Total assets.
12. Deposits. Disclose separately the amounts of noninterest bearing
deposits and interest bearing deposits.
(a) The amount of noninterest bearing deposits and interest bearing
deposits in foreign banking offices must be presented if the disclosure
provided by 210.0-05 are required.
13. Short-term borrowing. Disclosure separately on the balance sheet
or in a note, amounts payable for (1) Federal funds purchased and
securities sold under agreements to repurchase; (2) commercial paper,
and (3) other short-term borrowings.
(a) Disclose any unused lines of credit for short-term financing: (
210.5-02.19(b)).
14. Bank acceptances outstanding. Disclose the aggregate of
unmatured drafts and bills of exchange accepted by a bank subsidiary, or
by some other bank as its agent, less the amount of such acceptances
acquired by the bank subsidiary through discount or purchase.
15. Other liabilities. Disclose separately on the balance sheet or
in a note any of the following liabilities or any other items which are
individually in excess of thirty percent of stockholders' equity (except
that amounts in excess of 5 percent of stockholders' equity should be
disclosed with respect to item (4)). The remaining items may be shown
as one amount.
(1) Income taxes payable.
(2) Deferred income taxes.
(3) Indebtedness to affiliates and other persons the investments in
which are accounted for by the equity method.
(4) Indebtedness to directors, executive officers, and principal
holders of equity securities of the registrant or any of its significant
subsidiaries (the guidance in 210.9-03.7(e) shall be used to identify
related parties for purposes of this disclosure).
(5) Accounts payable and accrued expenses.
16. Long-term debt. Disclose in a note the information required by
210.5-02.22.
17. Commitments and contingent liabilities.
18. Minority interest in consolidated subsidiaries. The information
required by 210.5-02.27 should be disclosed if applicable.
19. Preferred stocks subject to mandatory redemption requirements or
whose redemption is outside the control of the issuer. See
210.5-02.28.
20. Preferred stocks which are not redeemable or are redeemable
solely at the option of the issuer. See 210.5-02.29.
21. Common stocks. See 210.5-02.30.
22. Other stockholders' equity. See 210.5-02.31.
23. Total liabilities and stockholders' equity.
(Secs. 7, 19a, and Schedule A (25) and (26) of the Securities Act of
1933, 15 U.S.C. 77g, 77s(a), 77nn (25) and (26); and secs. 12, 13, 14,
15(d), and 23(n) of the Securities Exchange Act of 1934, 15 U.S.C. 78l,
78m, 78n, 78o(d), 78w(a).
(48 FR 11107, Mar. 16, 1983, as amended at 48 FR 37612, Aug. 19,
1983; 50 FR 25215, June 18, 1985)
17 CFR 210.9-04 Income statements.
The purpose of this rule is to indicate the various items which, if
applicable, should appear on the face of the income statement or in the
notes thereto.
1. Interest and fees on loans. Include commitment and origination
fees, late charges and current amortization of premium and accretion of
discount on loans which are related to or are an adjustment of the loan
interest rate.
2. Interest and dividends on investment securities. Disclosure
separately (1) taxable interest income, (2) nontaxable interest income,
and (3) dividends.
3. Trading account interest.
4. Other interest income.
5. Total interest income (total of lines 1 through 4).
6. Interest on deposits.
7. Interest on short-term borrowings.
8. Interest on long-term debt.
9. Total interest expense (total of lines 6 through 8).
10. Net interest income (line 5 minus line 9).
11. Provision for loan losses.
12. Net interest income after provision for loan losses.
13. Other income. Disclose separately any of the following amounts,
or any other item of other income, which exceed one percent of the
aggregate of total interest income and other income. The remaining
amounts may be shown as one amount, except for investment securities
gains or losses which shall be shown separately regardless of size.
(a) Commissions and fees and fiduciary activities.
(b) Commissions, broker's fees and markups on securities underwriting
and other securities activities.
(c) Insurance commissions, fees and premiums.
(d) Fees for other customer services.
(e) Profit or loss on transactions in securities in dealer trading
account.
(f) Equity in earnings of unconsolidated subsidiaries and 50 percent
or less owned persons.
(g) Gains or losses on disposition of equity in securities of
subsidiaries or 50 percent or less owned persons.
(h) Investment securities gains or losses. The method followed in
determining the cost of investments sold (e.g., ''average cost,''
''first-in, first-out,'' or ''identified certificate) and related income
taxes shall be disclosed.
14. Other expenses. Disclose separately any of the following
amounts, or any other item of other expense, which exceed one percent of
the aggregate of total interest income and other income. The remaining
amounts may be shown as one amount.
(a) Salaries and employee benefits.
(b) Net occupancy expense of premises.
(c) Goodwill amortization.
(d) Net cost of operation of other real estate (including provisions
for real estate losses, rental income and gains and losses on sales of
real estate).
(e) Minority interest in income of consolidated subsidiaries.
15. Income or loss before income tax expense.
16. Income tax expense. The information required by 210.4-08(h)
should be disclosed.
17. Income or loss before extraordinary items and cumulative effects
of changes in accounting principles.
18. Extraordinary items, less applicable tax.
19. Cumulative effects of changes in accounting principles.
20. Net income or loss.
21. Earnings per share data.
(48 FR 11107, Mar. 16, 1983, as amended at 50 FR 25215, June 18,
1985)
17 CFR 210.9-05 Foreign activities.
(a) General requirement. Separate disclosure concerning foreign
activities shall be made for each period in which either (1) assets, or
(2) revenue, or (3) income (loss) before income tax expense, or (4) net
income (loss), each as associated with foreign activities, exceeded ten
percent of the corresponding amount in the related financial statements.
(b) Disclosures. (1) Disclose total identifiable assets (net of
valuation allowances) associated with foreign activities.
(2) For each period for which an income statement is filed, state the
amount of revenue, income (loss) before taxes, and net income (loss)
associated with foreign activities. Disclose significant estimates and
assumptions (including those related to the cost of capital) used in
allocating revenue and expenses to foreign activities; describe the
nature and effects of any changes in such estimates and assumptions
which have a significant impact on interperiod comparability.
(3) The information in paragraph (b) (1) and (2) of this section
shall be presented separately for each significant geographic area and
in the aggregate for all other geographic areas not deemed significant.
(c) Definitions. (1) Foreign activities include loans and other
revenues producing assets and transactions in which the debtor or
customer, whether an affiliated or unaffiliated person, is domiciled
outside the United States.
(2) The term revenue includes the total of the amount reported at
210.9-04.5 and 210.9-04.13.
(3) A significant geographic area is one in which assets or revenue
or income before income tax or net income exceed 10 percent of the
comparable amount as reported in the financial statements.
17 CFR 210.9-06 Condensed financial information of registrant.
The information prescribed by 210.12-04 shall be presented in a note
to the financial statements when the restricted net assets (
210.4-08(e)(3)) of consolidated subsidiaries exceed 25 percent of
consolidated net assets as of the end of the most recently completed
fiscal year. The investment in and indebtedness of and to bank
subsidiaries shall be stated separately in the condensed balance sheet
from amounts for other subsidiaries; the amount of cash dividends paid
to the registrant for each of the last three years by bank subsidiaries
shall be stated separately in the condensed income statement from
amounts for other subsidiaries. For purposes of the above test,
restricted net assets of consolidated subsidiaries shall mean that
amount of the registrant's proportionate share of net assets of
consolidated subsidiaries (after intercompany eliminations) which as of
the end of the most recent fiscal year may not be transferred to the
parent company by subsidiaries in the form of loans, advances or cash
dividends without the consent of a third party (i.e., lender, regulatory
agency, foreign government, etc.). Where restrictions on the amount of
funds which may be loaned or advanced differ from the amount restricted
as to transfer in the form of cash dividends, the amount least
restrictive to the subsidiary shall be used. Redeemable preferred
stocks ( 210.5-02.28) and minority interests shall be deducted in
computing net assets for purposes of this test.
17 CFR 210.9-07 Schedules.
(a) The following schedules, which should be examined by an
independent accountant, should be filed unless the required information
is not applicable or is presented in the related financial statements.
Schedule I -- Indebtedness to Related Parties. The schedule
prescribed by 210.12-05 should be filed for each period for which an
income statement is required in support of the amounts required to be
reported by 210.9-03.15(4) unless such aggregate amount does not exceed
5 percent of stockholders' equity at either the beginning or the end of
the period.
Schedule II -- Guarantees of Securities of Other Issuers. The
schedule prescribed by 210.12-08 should be filed as of the date of the
most recent audited balance sheet with respect to any guarantees of
securities of other issuers by the person for which the statements are
being filed.
17 CFR 210.9-07 Interim Financial Statements
17 CFR 210.10-01 Interim financial statements.
(a) Condensed statements. Interim financial statements shall follow
the general form and content of presentation prescribed by the other
sections of this Regulation with the following exceptions:
(1) Interim financial statements required by this rule need only be
provided as to the registrant and its subsidiaries consolidated and may
be unaudited. Separate statements of other entities which may otherwise
be required by this regulation may be omitted.
(2) Interim balance sheets shall include only major captions (i.e.,
numbered captions) prescribed by the applicable sections of this
Regulation with the exception of inventories. Data as to raw materials,
work in process and finished goods inventories shall be included either
on the face of the balance sheet or in the notes to the financial
statements, if applicable. Where any major balance sheet caption is
less than 10% of total assets, and the amount in the caption has not
increased or decreased by more than 25% since the end of the preceding
fiscal year, the caption may be combined with others.
(3) Interim statements of income shall also include major captions
prescribed by the applicable sections of this Regulation. When any
major income statement caption is less than 15% of average net income
for the most recent three fiscal years and the amount in the caption has
not increased or decreased by more than 20% as compared to the
corresponding interim period of the preceding fiscal year, the caption
may be combined with others. In calculating average net income, loss
years should be excluded. If losses were incurred in each of the most
recent three years, the average loss shall be used for purposes of this
test. Notwithstanding these tests, 210.4-02 applies and de minimis
amounts therefore need not be shown separately, except that registrants
reporting under 210.9 shall show investment securities gains or losses
separately regardless of size.
(4) The statement of changes in financial position may be
abbreviated, starting with a single figure of funds provided by
operations and showing other changes individually only when they exceed
10% of the average of funds provided by operations for the most recent
three years. Notwithstanding this test, Rule 4-02 of Regulation S-X
applies and de minimis amounts therefore need not be shown separately.
(5) The interim financial information shall include disclosures
either on the face of the financial statements or in accompanying
footnotes sufficient so as to make the interim information presented not
misleading. Registrants may presume that users of the interim financial
information have read or have access to the audited financial statements
for the preceding fiscal year and that the adequacy of additional
disclosure needed for a fair presentation, except in regard to material
contingencies, may be determined in that context. Accordingly, footnote
disclosure which would substantially duplicate the disclosure contained
in the most recent annual report to security holders or latest audited
financial statements, such as a statement of significant accounting
policies and practices, details of accounts which have not changed
significantly in amount or composition since the end of the most
recently completed fiscal year, and detailed disclosures prescribed by
Rule 4-08 of this Regulation, may be omitted. However, disclosure shall
be provided where events subsequent to the end of the most recent fiscal
year have occurred which have a material impact on the registrant.
Disclosures should encompass for example, significant changes since the
end of the most recently completed fiscal year in such items as:
accounting principles and practices; estimates inherent in the
preparation of financial statements; status of long-term contracts;
capitalization including significant new borrowings or modification of
existing financing arrangements; and the reporting entity resulting
from business combinations or dispositions. Notwithstanding the above,
where material contingencies exist, disclosure of such matters shall be
provided even though a significant change since year end may not have
occurred.
(6) Detailed schedules otherwise required by this Regulation may be
omitted for purposes of preparing interim financial statements.
(7) In addition to the financial statements required by paragraphs
(a)(2), (3) and (4) of this section, registrants in the development
stage shall provide the cumulative financial statements (condensed to
the same degree as allowed in this paragraph) and disclosures required
by Statement of Financial Accounting Standards No. 7, ''Accounting and
Reporting by Development Stage Enterprises'' to the date of the latest
balance sheet presented.
(b) Other instructions as to content. The following additional
instructions shall be applicable for purposes of preparing interim
financial statements:
(1) Summarized income statement information shall be given separately
as to each subsidiary not consolidated or 50 percent or less owned
persons or as to each group of such subsidiaries or fifty percent or
less owned persons for which separate individual or group statements
would otherwise be required for annual periods. Such summarized
information, however, need not be furnished for any such unconsolidated
subsidiary or person which would not be required pursuant to Rule 13a-13
or 15d-13 to file quarterly financial information with the Commission if
it were a registrant.
(2) If appropriate, the income statement shall show earnings per
share and dividends declared per share applicable to common stock. The
basis of the earnings per share computation shall be stated together
with the number of shares used in the computation. In addition, see
Item 601(b)(11) of Regulation S-K, (17 CFR 229.601(b)(11)).
(3) If, during the most recent interim period presented, the
registrant or any of its consolidated subsidiaries entered into a
business combination treated for accounting purposes as a pooling of
interests, the interim financial statements for both the current year
and the preceding year shall reflect the combined results of the pooled
businesses. Supplemental disclosure of the separate results of the
combined entities for periods prior to the combination shall be given,
with appropriate explanations.
(4) Where a material business combination accounted for as a purchase
has occurred during the current fiscal year, pro forma disclosure shall
be made of the results of operations for the current year up to the date
of the most recent interim balance sheet provided (and for the
corresponding period in the preceding year) as though the companies had
combined at the beginning of the period being reported on. This pro
forma information should as a minimum show revenue, income before
extraordinary items and the cumulative effect of accounting changes,
including such income on a per share basis, and net income and net
income per share.
(5) Where the registrant has disposed of any significant segment of
its business (as defined in paragraph 13 of Accounting Principles Board
Opinion No. 30) during any of the periods covered by the interim
financial statements, the effect thereof on revenues and net income --
total and per share -- for all periods shall be disclosed.
(6) In addition to meeting the reporting requirements specified by
existing standards for accounting changes, the registrant shall state
the date of any material accounting change and the reasons for making
it. In addition, for filings on Form 10-Q, a letter from the
registrant's independent accountant shall be filed as an exhibit (in
accordance with the provisions of Item 601 of Regulation S-K, 17 CFR
229.601) in the first Form 10-Q subsequent to the date of an accounting
change indicating whether or not the change is to an alternative
principle which in his judgment is preferable under the circumstances;
except that no letter from the accountant need be filed when the change
is made in response to a standard adopted by the Financial Accounting
Standards Board which requires such change.
(7) Any material retroactive prior period adjustment made during any
period convered by the interim financial statements shall be disclosed,
together with the effect thereof upon net income -- total and per share
-- of any prior period included and upon the balance of retained
earnings. If results of operations for any period presented have been
adjusted retroactively by such an item subsequent to the initial
reporting of such period, similar disclosure of the effect of the change
shall be made.
(8) Any unaudited interim financial statements furnished shall
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim periods
presented. A statement to that effect shall be included. Such
adjustments shall include, for example, appropriate estimated provisions
for bonus and profit sharing arrangements normally determined or settled
at year-end. If all such adjustments are of a normal recurring nature,
a statement to that effect shall be made; otherwise, there shall be
furnished information describing in appropriate detail the nature and
amount of any adjustments other than normal recurring adjustments
entering into the determination of the results shown.
(c) Periods to be covered. The periods for which interim financial
statements are to be provided in registration statements are prescribed
elsewhere in this Regulation (see 210.3-01 and 3-02). For filings on
Form 10-Q, financial statements shall be provided as set forth below:
(1) An interim balance sheet as of the end of the most recent fiscal
quarter and a balance sheet as of the end of the preceding fiscal year
shall be provided. The balance sheet as of the end of the preceding
fiscal year may be condensed to the same degree as the interim balance
sheet provided. An interim balance sheet as of the end of the
corresponding fiscal quarter of the preceding fiscal year need not be
provided unless necessary for an understanding of the impact of seasonal
fluctuations on the registrant's financial condition.
(2) Interim statements of income shall be provided for the most
recent fiscal quarter, for the period between the end of the preceding
fiscal year and the end of the most recent fiscal quarter, and for the
corresponding periods of the preceding fiscal year. Such statements may
also be presented for the cumulative twelve month period ended during
the most recent fiscal quarter and for the corresponding preceding
period.
(3) Interim statements of changes in financial position shall be
provided for the period between the end of the preceding fiscal year and
the end of the most recent fiscal quarter, and for the corresponding
period of the preceding fiscal year. Such statements may also be
presented for the cumulative twelve month period ended during the most
recent fiscal quarter and for the corresponding preceding period.
(4) Registrants engaged in seasonal production and sale of a
single-crop agricultural commodity may provide interim statements of
income and changes in financial position for the twelve month period
ended during the most recent fiscal quarter and for the corresponding
preceding period in lieu of the year-to-date statements specified in (2)
and (3) above.
(d) Review by independent public accountant. The interim financial
information included in filings with the Commission need not be reviewed
by an independent public accountant prior to filing. If, however, a
review of the data is made in accordance with established professional
standards and procedures for such a review, the registrant may state
that the independent accountant has performed such a review. If such a
statement is made, the report of the independent accountant on such
review shall accompany the interim financial information.
(e) Filing of other interim financial information in certain cases.
The Commission may, upon the informal written request of the registrant,
and where consistent with the protection of investors, permit the
omission of any of the interim financial information herein required or
the filing in substitution thereof of appropriate information of
comparable character. The Commission may also by informal written
notice require the filing of other information in addition to, or in
substitution for, the interim information herein required in any case
where such information is necessary or appropriate for an adequate
presentation of the financial condition of any person for which interim
financial information is required, or whose financial information is
otherwise necessary for the protection of investors.
(46 FR 12489, Feb. 17, 1981, as amended at 50 FR 25215, June 18,
1985; 50 FR 49533, Dec. 3, 1985)
17 CFR 210.10-01 Pro Forma Financial Information
Authority: Secs. 210.11-01 to 210.11-03 issued under secs. 7 and
19a of the Securities Act, 15 U.S.C. 77g, 77s(a), 77aa(25)(26); secs.
12, 13, 14, 15(d), and 23(a) of the Securities Exchange Act of 1934, 15
U.S.C. 78l, 78m, 78n, 78o(d), 78w(a); secs. 5(b), 10(a), 14, 20(a) of
the Public Utility Holding Company Act, 15 U.S.C. 79e(a), 79n, 79t(a);
secs. 8, 20, 30, 31(c), 38(a) of the Investment Company Act of 1940, 15
U.S.C. 80a-8, 80a-20, 80a-29, 80a-30(c), 80a-37(a).
Source: Sections 210.11-01 to 210.11-03 appear at 47 FR 29837, July
9, 1982, unless otherwise noted.
17 CFR 210.11-01 Presentation requirements.
(a) Pro forma financial information shall be furnished when any of
the following conditions exist:
(1) During the most recent fiscal year or subsequent interim period
for which a balance sheet is required by 210.3-01, a significant
business combination accounted for as a purchase has occurred (for
purposes of these rules, the term ''purchase'' encompasses the purchase
of an interest in a business accounted for by the equity method);
(2) After the date of the most recent balance sheet filed pursuant to
210.3-01, consummation of a significant business combination to be
accounted for by either the purchase method or pooling-of-interests
method of accounting has occurred or is probable;
(3) Securities being registered by the registrant are to be offered
to the security holders of a significant business to be acquired or the
proceeds from the offered securities will be applied directly or
indirectly to the purchase of a specific significant business;
(4) The disposition of a significant portion of a business either by
sale, abandonment or distribution to shareholders by means of a
spin-off, split-up or split-off has occurred or is probable and such
disposition is not fully reflected in the financial statements of the
registrant included in the filing;
(5) During the most recent fiscal year or subsequent interim period
for which a balance sheet is required by 210.3-01, the registrant has
acquired one or more real estate operations or properties which in the
aggregate are significant, or since the date of the most recent balance
sheet filed pursuant to that section the registrant has acquired or
proposes to acquire one or more operations or properties which in the
aggregate are significant.
(6) Pro forma financial information required by 229.914 is required
to be provided in connection with a roll-up transaction as defined in
229.901(c).
(7) The registrant previously was a part of another entity and such
presentation is necessary to reflect operations and financial position
of the registrant as an autonomous entity; or
(8) Consummation of other events or transactions has occurred or is
probable for which disclosure of pro forma financial information would
be material to investors.
(b) A business combination or disposition of a business shall be
considered significant if:
(1) A comparison of the most recent annual financial statements of
the business acquired or to be acquired and the registrant's most recent
annual consolidated financial statements filed at or prior to the date
of acquisition indicates that the business would be a significant
subsidiary pursuant to the conditions specified in 210.1-02, or
(2) The business to be disposed of meets the conditions of a
significant subsidiary in 210.1-02.
(c) When consummation of more than one transaction has occurred or is
probable during a fiscal year, the tests of significance in paragraph
(b) above shall be applied to the cumulative effect of those
transactions. If the cumulative effect of the transactions is
significant, pro forma financial information shall be presented.
(d) For purposes of this rule, the term business should be evaluated
in light of the facts and circumstances involved and whether there is
sufficient continuity of the acquired entity's operations prior to and
after the transactions so that disclosure of prior financial information
is material to an understanding of future operations. A presumption
exists that a separate entity, a subsidiary, or a division is a
business. However, a lesser component of an entity may also constitute
a business. Among the facts and circumstances which should be
considered in evaluating whether an acquisition of a lesser component of
an entity constitutes a business are the following:
(1) Whether the nature of the revenue-producing activity of the
component will remain generally the same as before the transaction; or
(2) Whether any of the following attributes remain with the component
after the transaction:
(i) Physical facilities,
(ii) Employee base,
(iii) Market distribution system,
(iv) Sales force,
(v) Customer base,
(vi) Operating rights,
(vii) Production techniques, or
(viii) Trade names.
(e) This rule does not apply to transactions between a parent company
and its totally held subsidiary.
(47 FR 29837, July 9, 1982, as amended at 50 FR 49533, Dec. 3, 1985;
56 FR 57247, Nov. 8, 1991)
17 CFR 210.11-02 Preparation requirements.
(a) Objective. Pro forma financial information should provide
investors with information about the continuing impact of a particular
transaction by showing how it might have affected historical financial
statements if the transaction had been consummated at an earlier time.
Such statements should assist investors in analyzing the future
prospects of the registrant because they illustrate the possible scope
of the change in the registrant's historical financial position and
results of operations caused by the transaction.
(b) Form and content. (1) Pro forma financial information shall
consist of a pro forma condensed balance sheet, pro forma condensed
statements of income, and accompanying explanatory notes. In certain
circumstances (i.e., where a limited number of pro forma adjustments are
required and those adjustments are easily understood), a narrative
description of the pro forma effects of the transaction may be furnished
in lieu of the statements described herein.
(2) The pro forma financial information shall be accompanied by an
introductory paragraph which briefly sets forth a description of (i) the
transaction, (ii) the entities involved, and (iii) the periods for which
the pro forma information is presented. In addition, an explanation of
what the pro forma presentation shows shall be set forth.
(3) The pro forma condensed financial information need only include
major captions (i.e., the numbered captions) prescribed by the
applicable sections of this Regulation. Where any major balance sheet
caption is less than 10 percent of total assets, the caption may be
combined with others. When any major income statement caption is less
than 15 percent of average net income of the registrant for the most
recent three fiscal years, the caption may be combined with others. In
calculating average net income, loss years should be excluded unless
losses were incurred in each of the most recent three years, in which
case the average loss shall be used for purposes of this test.
Notwithstanding these tests, de minimis amounts need not be shown
separately.
(4) Pro forma statements shall ordinarily be in columnar form showing
condensed historical statements, pro forma adjustments, and the pro
forma results.
(5) The pro forma condensed income statement shall disclose income
(loss) from continuing operations before nonrecurring charges or credits
directly attributable to the transaction. Material nonrecurring charges
or credits and related tax effects which result directly from the
transaction and which will be included in the income of the registrant
within the 12 months succeeding the transaction shall be disclosed
separately. It should be clearly indicated that such charges or credits
were not considered in the pro forma condensed income statement. If the
transaction for which pro forma financial information is presented
relates to the disposition of a business, the pro forma results should
give effect to the disposition and be presented under an appropriate
caption.
(6) Pro forma adjustments related to the pro forma condensed income
statement shall be computed assuming the transaction was consummated at
the beginning of the fiscal year presented and shall include adjustments
which give effect to events that are (i) directly attributable to the
transaction, (ii) expected to have a continuing impact on the
registrant, and (iii) factually supportable. Pro forma adjustments
related to the pro forma condensed balance sheet shall be computed
assuming the transaction was consummated at the end of the most recent
period for which a balance sheet is required by 210.3-01 and shall
include adjustments which give effect to events that are directly
attributable to the transaction and factually supportable regardless of
whether they have a continuing impact or are nonrecurring. All
adjustments should be referenced to notes which clearly explain the
assumptions involved.
(7) Historical primary and fully diluted per share data based on
continuing operations (or net income if the registrant does not report
either discontinued operations, extraordinary items, or the cumulative
effects of accounting changes) for the registrant, and primary and fully
diluted pro forma per share data based on continuing operations before
nonrecurring charges or credits directly attributable to the transaction
shall be presented on the face of the pro forma condensed income
statement together with the number of shares used to compute such per
share data. For transactions involving the issuance of securities, the
number of shares used in the calculation of the pro forma per share data
should be based on the weighted average number of shares outstanding
during the period adjusted to give effect to shares subsequently issued
or assumed to be issued had the particular transaction or event taken
place at the beginning of the period presented. If a convertible
security is being issued in the transaction, consideration should be
given to the possible dilution of the pro forma per share data.
(8) If the transaction is structured in such a manner that
significantly different results may occur, additional pro forma
presentations shall be made which give effect to the range of possible
results.
Instructions. 1. The historical statement of income used in the pro
forma financial information shall not report operations of a segment
that has been discontinued, extraordinary items, or the cumulative
effects of accounting changes. If the historical statement of income
includes such items, only the portion of the income statement through
''income from continuing operations'' (or the appropriate modification
thereof) should be used in preparing pro forma results.
2. For a purchase transaction, pro forma adjustments for the income
statement shall include amortization of goodwill, depreciation and other
adjustments based on the allocated purchase price of net assets
acquired. In some transactions, such as in financial institution
acquisitions, the purchase adjustments may include significant discounts
of the historical cost of the acquired assets to their fair value at the
acquisition date. When such adjustments will result in a significant
effect on earnings (losses) in periods immediately subsequent to the
acquisition which will be progressively eliminated over a relatively
short period, the effect of the purchase adjustments on reported results
of operations for each of the next five years should be disclosed in a
note.
3. For a disposition transaction, the pro forma financial information
shall begin with the historical financial statements of the existing
entity and show the deletion of the business to be divested along with
the pro forma adjustments necessary to arrive at the remainder of the
existing entity. For example, pro forma adjustments would include
adjustments of interest expense arising from revised debt structures and
expenses which will be or have been incurred on behalf of the business
to be divested such as advertising costs, executive salaries and other
costs.
4. For entities which were previously a component of another entity,
pro forma adjustments should include adjustments similar in nature to
those referred to in Instruction 3 above. Adjustments may also be
necessary when charges for corporate overhead, interest, or income taxes
have been allocated to the entity on a basis other than one deemed
reasonable by management.
5. Adjustments to reflect the acquisition of real estate operations
or properties for the pro forma income statement shall include a
depreciation charge based on the new accounting basis for the assets,
interest financing on any additional or refinanced debt, and other
appropriate adjustments that can be factually supported. See also
Instruction 4 above.
6. When consummation of more than one transaction has occurred or is
probable during a fiscal year, the pro forma financial information may
be presented on a combined basis; however, in some circumstances (e.g.,
depending upon the combination of probable and consummated transactions,
and the nature of the filing) it may be more useful to present the pro
forma financial information on a disaggregated basis even though some or
all of the transactions would not meet the tests of significance
individually. For combined presentations, a note should explain the
various transactions and disclose the maximum variances in the pro forma
financial information which would occur for any of the possible
combinations. If the pro forma financial information is presented in a
proxy or information statement for purposes of obtaining shareholder
approval of one of the transactions, the effects of that transaction
must be clearly set forth.
7. Tax effects, if any, of pro forma adjustments normally should be
calculated at the statutory rate in effect during the periods for which
pro forma condensed income statements are presented and should be
reflected as a separate pro forma adjustment.
(c) Periods to be presented. (1) A pro forma condensed balance sheet
as of the end of the most recent period for which a consolidated balance
sheet of the registrant is required by 210.3-01 shall be filed unless
the transaction is already reflected in such balance sheet.
(2)(i) Pro forma condensed statements of income shall be filed for
only the most recent fiscal year and for the period from the most recent
fiscal year end to the most recent interim date for which a balance
sheet is required. A pro forma condensed statement of income may be
filed for the corresponding interim period of the preceding fiscal year.
A pro forma condensed statement of income shall not be filed when the
historical income statement reflects the transaction for the entire
period.
(ii) For a business combination accounted for as a pooling of
interests, the pro forma income statements (which are in effect a
restatement of the historical income statements as if the combination
had been consummated) shall be filed for all periods for which
historical income statements of the registrant are required.
(3) Pro forma condensed statements of income shall be presented using
the registrant's fiscal year end. If the most recent fiscal year end of
any other entity involved in the transaction differs from the
registrant's most recent fiscal year end by more than 93 days, the other
entity's income statement shall be brought up to within 93 days of the
registrant's most recent fiscal year end, if practicable. This updating
could be accomplished by adding subsequent interim period results to the
most recent fiscal year-end information and deducting the comparable
preceding year interim period results. Disclosure shall be made of the
periods combined and of the sales or revenues and income for any periods
which were excluded from or included more than once in the condensed pro
forma income statements (e.g., an interim period that is included both
as part of the fiscal year and the subsequent interim period). For
investment companies subject to 210.6-01 to 210.6-10, the periods
covered by the pro forma statements must be the same.
(4) Whenever unusual events enter into the determination of the
results shown for the most recently completed fiscal year, the effect of
such unusual events should be disclosed and consideration should be
given to presenting a pro forma condensed income statement for the most
recent twelve-month period in addition to those required in paragraph
(c)(2)(i) above if the most recent twelve-month period is more
representative of normal operations.
(47 FR 29837, July 9, 1982, as amended at 50 FR 49533, Dec. 3, 1985)
17 CFR 210.11-03 Presentation of financial forecast.
(a) A financial forecast may be filed in lieu of the pro forma
condensed statements of income required by 210.11-02(b)(1).
(1) The financial forecast shall cover a period of at least 12 months
from the latest of (i) the most recent balance sheet included in the
filing or (ii) the consummation date or estimated consummation date of
the transaction.
(2) The forecasted statement of income shall be presented in the same
degree of detail as the pro forma condensed statement of income required
by 210.11-02(b)(3).
(3) Assumptions particularly relevant to the transaction and effects
thereof should be clearly set forth.
(4) Historical condensed financial information of the registrant and
the business acquired or to be acquired, if any, shall be presented for
at least a recent 12 month period in parallel columns with the financial
forecast.
(b) Such financial forecast shall be presented in accordance with the
guidelines established by the American Institute of Certified Public
Accountants.
(c) Forecasted earnings per share data shall be substituted for pro
forma per share data.
(d) This rule does not permit the filing of a financial forecast in
lieu of pro forma information required by generally accepted accounting
principles.
17 CFR 210.11-03 Form and Content of Schedules
17 CFR 210.11-03 general
17 CFR 210.12-01 Application of 210.12-01 to 210.12-29.
These sections prescribe the form and content of the schedules
required by 210.5-04, 210.6-10, 210.6A-05, 210.7-05 and 210.9-07.
(50 FR 25215, June 18, 1985)
17 CFR 210.12-02 Marketable securities -- other security investments.
(42 FR 51569, Sept. 29, 1977; 43 FR 1063, Jan. 6, 1978, as amended
at 43 FR 41028, Sept. 14, 1978; 45 FR 63678, Sept. 25, 1980)
17 CFR 210.12-03 Amounts receivable from related parties and
underwriters, promoters, and employees other than related parties.
(37 FR 14602, July 21, 1972, as amended at 45 FR 63678, Sept. 25,
1980)
17 CFR 210.12-04 Condensed financial information of registrant.
(a) Provide condensed financial information as to financial position,
changes in financial position and results of operations of the
registrant as of the same dates and for the same periods for which
audited consolidated financial statements are required. The financial
information required need not be presented in greater detail than is
required for condensed statements by 210.10-01(a) (2), (3) and (4).
Detailed footnote disclosure which would normally be included with
complete financial statements may be omitted with the exception of
disclosures regarding material contingencies, long-term obligations and
guarantees. Descriptions of significant provisions of the registrant's
long-term obligations, mandatory dividend or redemption requirements of
redeemable stocks, and guarantees of the registrant shall be provided
along with a five-year schedule of maturities of debt. If the material
contingencies, long-term obligations, redeemable stock requirements and
guarantees of the registrant have been separately disclosed in the
consolidated statements, they need not be repeated in this schedule.
(b) Disclose separately the amounts of cash dividends paid to the
registrant for each of the last three fiscal years by consolidated
subsidiaries, unconsolidated subsidiaries and 50 percent or less owned
persons accounted for by the equity method, respectively.
(46 FR 56180, Nov. 16, 1981)
17 CFR 210.12-04 210.12-05
17 CFR 210.12-06 Property, plant and equipment. /17/
(38 FR 6067, Mar. 6, 1973, as amended at 40 FR 55836, Dec. 2, 1975;
45 FR 63679, Sept. 25, 1980)
17 CFR 210.12-07 Accumulated depreciation, depletion and amortization
of property, plant, and equipment. /1/
(37 FR 14602, July 21, 1972, as amended at 40 FR 55836, Dec. 2, 1975)
17 CFR 210.12-08 Guarantees of securities of other issuers. /1/
(37 FR 14602, July 21, 1972. Redesignated at 45 FR 63679, Sept. 25,
1980)
17 CFR 210.12-09 Valuation and qualifying accounts.
(37 FR 14602, July 21, 1972. Redesignated and amended at 45 FR 63679,
Sept. 25, 1980)
17 CFR 210.12-10 Short-term borrowings. /4/
(45 FR 63679, Sept. 25, 1980)
17 CFR 210.12-11 Supplementary income statement information.
(45 FR 63679, Sept. 25, 1980)
17 CFR 210.12-11 for management investment companies
17 CFR 210.12-12 Investments in securities of unaffiliated issuers.
(47 FR 56843, Dec. 21, 1982)
17 CFR 210.12-12A Investments -- securities sold short.
(47 FR 56844, Dec. 21, 1982)
17 CFR 210.12-12B Open option contracts written.
(47 FR 56844, Dec. 21, 1982)
17 CFR 210.12-13 Investments other than securities.
(47 FR 56844, Dec. 21, 1982)
17 CFR 210.12-14 Investments in and advances to affiliates.
(47 FR 56844, Dec. 21, 1982)
17 CFR 210.12-15 Summary of investments -- other than investments in
related parties.
(46 FR 54337, Nov. 2, 1981)
17 CFR 210.12-15 210.12-16
17 CFR 210.12-17 Reinsurance.
(46 FR 54338, Nov. 2, 1981)
17 CFR 210.12-17 210.12-18
17 CFR 210.12-17 For Face-Amount Certificate Investment Companies
Source: Sections 210.12-21 to 210.12-41 appear at 16 FR 348, Jan.
13, 1951, unless otherwise noted. Redesignated at 45 FR 63679, Sept.
25, 1980.
17 CFR 210.12-21 Investments in securities of unaffiliated issuers.
17 CFR 210.12-22 Investments in and advances to affiliates and income
thereon.
17 CFR 210.12-23 Mortgage loans on real estate and interest earned on
mortgages. /1/
(16 FR 348, Jan. 13, 1951, as amended at 16 FR 2655, Mar. 24, 1951)
17 CFR 210.12-24 Real estate owned and rental income. /1/
(16 FR 348, Jan. 13, 1951, as amended at 16 FR 2655, Mar. 24, 1951.
Redesignated at 45 FR 63679, Sept. 25, 1980)
17 CFR 210.12-24 210.12-25
17 CFR 210.12-25 Supplementary profit and loss information.
17 CFR 210.12-25 210.12-26
17 CFR 210.12-25 210.12-27
17 CFR 210.12-27 Qualified assets on deposit. /1/
17 CFR 210.12-27 210.12-28
17 CFR 210.12-29 Mortgage loans on real estate. /1/
(38 FR 6069, Mar. 6, 1973; 38 FR 7323, Mar. 20, 1973. Redesignated
at 45 FR 63680, Sept. 25, 1980)
17 CFR 210.12-29 Pt. 211
17 CFR 210.12-29 PART 211 -- INTERPRETATIONS RELATING TO FINANCIAL
REPORTING MATTERS
17 CFR 210.12-29 -- PART 229 -- STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND CONSERVATION ACT OF 1975 -- REGULATION S-K
17 CFR 210.12-29 -- Pt. 229
17 CFR 210.12-29 -- Subpart 229.1 -- General
Sec.
229.10 General.
17 CFR 210.12-29 -- Subpart 229.100 -- Business
229.101 (Item 101) Description of business.
229.102 (Item 102) Description of property.
229.103 (Item 103) Legal proceedings.
17 CFR 210.12-29 -- Subpart 229.200 -- Securities of the Registrant
229.201 (Item 201) Market price of and dividends on the registrant's
common equity and related stockholder matters.
229.202 (Item 202) Description of registrant's securities.
17 CFR 210.12-29 -- Subpart 229.300 -- Financial Information
229.301 (Item 301) Selected financial data.
229.302 (Item 302) Supplementary financial information.
229.303 (Item 303) Management's discussion and analysis of financial
condition and results of operations.
229.304 (Item 304) Changes in and disagreements with accountants on
accounting and financial disclosure.
17 CFR 210.12-29 -- Subpart 229.400 -- Management and Certain Security
Holders
229.401 (Item 401) Directors, executive officers, promoters and
control persons.
229.402 (Item 402) Executive compensation.
229.403 (Item 403) Security ownership of certain beneficial owners
and management.
229.404 (Item 404) Certain relationships and related transactions.
229.405 (Item 405) Compliance with section 16(a) of the Exchange Act.
17 CFR 210.12-29 -- Subpart 229.500 -- Registration Statement and
Prospectus Provisions
229.501 (Item 501) Forepart of registration statement and outside
front cover page of prospectus.
229.502 (Item 502) Inside front and outside back cover pages of
prospectus.
229.503 (Item 503) Summary information, risk factors and ratio of
earnings to fixed charges.
229.504 (Item 504) Use of proceeds.
229.505 (Item 505) Determination of offering price.
229.506 (Item 506) Dilution.
229.507 (Item 507) Selling security holders.
229.508 (Item 508) Plan of distribution.
229.509 (Item 509) Interests of named experts and counsel.
229.510 (Item 510) Disclosure of Commission position on
indemnification for Securities Act liabilities.
229.511 (Item 511) Other expenses of issuance and distribution.
229.512 (Item 512) Undertakings.
17 CFR 210.12-29 -- Subpart 229.600 -- Exhibits
229.601 (Item 601) Exhibits.
17 CFR 210.12-29 -- Subpart 229.700 -- Miscellaneous
229.701 (Item 701) Recent sales of unregistered securities.
229.702 (Item 702) Indemnification of directors and officers.
17 CFR 210.12-29 -- Subpart 229.800 -- List of Industry Guides
229.801 Securities Act industry guides.
229.802 Exchange Act industry guides.
17 CFR 210.12-29 -- Subpart 229.900 -- Roll-Up Transactions
229.901 (Item 901) Definitions.
229.902 (Item 902) Individual partnership supplements.
229.903 (Item 903) Summary.
229.904 (Item 904) Risk factors and other considerations.
229.905 (Item 905) Comparative information.
229.906 (Item 906) Allocation of roll-up consideration.
229.907 (Item 907) Background of the roll-up transaction.
229.908 (Item 908) Reasons for and alternatives to the roll-up
transaction.
229.909 (Item 909) Conflicts of interest.
229.910 (Item 910) Fairness of the transaction.
229.911 (Item 911) Reports, opinions and appraisals.
229.912 (Item 912) Source and amount of funds and transactional
expenses.
229.913 (Item 913) Other provisions of the transaction.
229.914 (Item 914) Pro forma financial statements; selected
financial data.
229.915 (Item 915) Federal income tax consequences.
Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77aa(25),
77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77jjj, 77nnn, 77sss, 78l, 78m,
78n, 78o, 78w, 80a-8, 80a-29, 80a-30, 80a-37, 80b-11, unless otherwise
noted.
Section 229.302 is also issued under 15 U.S.C. 79e, 79n, 79t.
Section 229.404 is also issued under 15 U.S.C. 77nn(25) and 77nn(26).
Source: 47 FR 11401, Mar. 16, 1982, unless otherwise noted.
17 CFR 210.12-29 -- Subpart 229.1 -- General
17 CFR 229.10 General.
(a) Application of Regulation S-K. This part (together with the
General Rules and Regulations under the Securities Act of 1933, 15
U.S.C. 77a et seq., as amended (Securities Act), and the Securities
Exchange Act of 1934, 15 U.S.C. 78a et seq., as amended (Exchange Act)
(parts 230 and 240 of this chapter), the Interpretative Releases under
these Acts (parts 231 and 241 of this chapter) and the forms under these
Acts (parts 239 and 249 of this chapter)) states the requirements
applicable to the content of the non-financial statement portions of:
(1) Registration statements under the Securities Act (part 239 of
this chapter) to the extent provided in the forms to be used for
registration under such Act; and
(2) Registration statements under section 12 (subpart C of part 249
of this chapter), annual or other reports under sections 13 and 15(d)
(subparts D and E of part 249 of this chapter), annual reports to
security holders and proxy and information statements under section 14
of the Exchange Act (part 240 of this chapter), and any other documents
required to be filed under the Exchange Act, to the extent provided in
the forms and rules under such Act.
(b) Commission policy on projections. The Commission encourages the
use in documents specified in Rule 175 under the Securities Act (
230.175 of this chapter) and Rule 3b-6 under the Exchange Act ( 240.3b-6
of this chapter) of management's projections of future economic
performance that have a reasonable basis and are presented in an
appropriate format. The guidelines set forth herein represent the
Commission's views on important factors to be considered in formulating
and disclosing such projections.
(1) Basis for projections. The Commission believes that management
must have the option to present in Commission filings its good faith
assessment of a registrant's future performance. Management, however,
must have a reasonable basis for such an assessment. Although a history
of operations or experience in projecting may be among the factors
providing a basis for management's assessment, the Commission does not
believe that a registrant always must have had such a history or
experience in order to formulate projections with a reasonable basis.
An outside review of management's projections may furnish additional
support for having a reasonable basis for a projection. If management
decides to include a report of such a review in a Commission filing,
there also should be disclosure of the qualifications of the reviewer,
the extent of the review, the relationship between the reviewer and the
registrant, and other material factors concerning the process by which
any outside review was sought or obtained. Moreover, in the case of a
registration statement under the Securities Act, the reviewer would be
deemed an expert and an appropriate consent must be filed with the
registration statement.
(2) Format for projections. In determining the appropriate format
for projections included in Commission filings, consideration must be
given to, among other things, the financial items to be projected, the
period to be covered, and the manner of presentation to be used.
Although traditionally projections have been given for three financial
items generally considered to be of primary importance to investors
(revenues, net income (loss) and earnings (loss) per share), projection
information need not necessarily be limited to these three items.
However, management should take care to assure that the choice of items
projected is not susceptible of misleading inferences through selective
projection of only favorable items. Revenues, net income (loss) and
earnings (loss) per share usually are presented together in order to
avoid any misleading inferences that may arise when the individual items
reflect contradictory trends. There may be instances, however, when it
is appropriate to present earnings (loss) from continuing operations, or
income (loss) before extraordinary items in addition to or in lieu of
net income (loss). It generally would be misleading to present sales or
revenue projections without one of the foregoing measures of income.
The period that appropriately may be covered by a projection depends to
a large extent on the particular circumstances of the company involved.
For certain companies in certain industries, a projection covering a two
or three year period may be entirely reasonable. Other companies may
not have a reasonable basis for projections beyond the current year.
Accordingly, management should select the period most appropriate in the
circumstances. In addition, management, in making a projection, should
disclose what, in its opinion, is the most probable specific amount or
the most reasonable range for each financial item projected based on the
selected assumptions. Ranges, however, should not be so wide as to make
the disclosures meaningless. Moreover, several projections based on
varying assumptions may be judged by management to be more meaningful
than a single number or range and would be permitted.
(3) Investor understanding. (i) When management chooses to include
its projections in a Commission filing, the disclosures accompanying the
projections should facilitate investor understanding of the basis for
and limitations of projections. In this regard investors should be
cautioned against attributing undue certainty to management's
assessment, and the Commission believes that investors would be aided by
a statement indicating management's intention regarding the furnishing
of updated projections. The Commission also believes that investor
understanding would be enhanced by disclosure of the assumptions which
in management's opinion are most significant to the projections or are
the key factors upon which the financial results of the enterprise
depend and encourages disclosure of assumptions in a manner that will
provide a framework for analysis of the projection.
(ii) Management also should consider whether disclosure of the
accuracy or inaccuracy of previous projections would provide investors
with important insights into the limitations of projections. In this
regard, consideration should be given to presenting the projections in a
format that will facilitate subsequent analysis of the reasons for
differences between actual and forecast results. An important benefit
may arise from the systematic analysis of variances between projected
and actual results on a continuing basis, since such disclosure may
highlight for investors the most significant risk and profit-sensitive
areas in a business operation.
(iii) With respect to previously issued projections, registrants are
reminded of their responsibility to make full and prompt disclosure of
material facts, both favorable and unfavorable, regarding their
financial condition. This responsibility may extend to situations where
management knows or has reason to know that its previously disclosed
projects no longer have a reasonable basis.
(iv) Since a registrant's ability to make projections with relative
confidence may vary with all the facts and circumstances, the
responsibility for determining whether to discontinue or to resume
making projections is best left to management. However, the Commission
encourages registrants not to discontinue or to resume projections in
Commission filings without a reasonable basis.
(c) Commission policy on security ratings. In view of the importance
of security ratings (ratings) to investors and the marketplace, the
Commission permits registrants to disclose, on a voluntary basis,
ratings assigned by rating organizations to classes of debt securities,
convertible debt securities and preferred stock in registration
statements and periodic reports. In addition, the Commission permits,
pursuant to Rule 134(a)(14) under the Securities Act ( 230.134(a)(14) of
this chapter), voluntary disclosure of ratings assigned by any
nationally recognized statistical rating organizations (NRSROs) in
certain communications deemed not to be a prospectus (tombstone
advertisements). Set forth herein are the Commission's views on
important matters to be considered in disclosing security ratings.
(1) Securities Act filings. (i) If a registrant includes in a
registration statement filed under the Securities Act any rating(s)
assigned to a class of securities, it should consider including: (A)
Any other rating intended for public dissemination assigned to such
class by a NRSRO (additional NRSRO rating) that is available on the date
of the initial filing of the document and that is materially different
from any rating disclosed; and (B) the name of each rating organization
whose rating is disclosed; each such rating organization's definition
or description of the category in which it rated the class of
securities; the relative rank of each rating within the assigning
rating organization's overall classification system; and a statement
informing investors that a security rating is not a recommendation to
buy, sell or hold securities, that it may be subject to revision or
withdrawal at any time by the assigning rating organization, and that
each rating should be evaluated independently of any other rating. The
registrant also should include the written consent of any rating
organization that is not a NRSRO whose rating is included. With respect
to the written consent of any NRSRO whose rating is included, see Rule
436(g) under the Securities Act ( 230.436(g) of this chapter).
(ii) If a change in a rating already included is available subsequent
to the filing of the registration statement, but prior to its
effectiveness, the registrant should consider including such rating
change in the final prospectus. If the rating change is material or if
a materially different rating from any disclosed becomes available
during this period, the registrant should consider amending the
registration statement to include the rating change or additional rating
and recirculating the preliminary prospectus.
(iii) If a materially different additional NRSRO rating or a material
change in a rating already included becomes available during any period
in which offers or sales are being made, the registrant should consider
disclosing such additional rating or rating change by means of
post-effective amendment or sticker to the prospectus pursuant to Rule
424(b) under the Securities Act ( 230.424(b) of this chapter), unless,
in the case of a registration statement on Form S-3 ( 239.13 of this
chapter), it has been disclosed in a document incorporated by reference
into the registration statement subsequent to its effectiveness and
prior to the termination of the offering.
(2) Exchange Act filings. (i) If a registrant includes in a
registration statement or periodic report filed under the Exchange Act
any rating(s) assigned to a class of securities, it should consider
including the information specified in paragraphs (c)(1)(i)(A) and (B)
of this section.
(ii) If there is a material change in the rating(s) assigned by any
NRSRO(s) to any outstanding class(es) of securities of a registrant
subject to the reporting requirements of section 13(a) or 15(d) of the
Exchange Act, the registrant should consider filing a report on Form 8-K
( 249.308 of this chapter) or other appropriate report under the
Exchange Act disclosing such rating change.
(47 FR 11401, Mar. 16, 1982, as amended at 52 FR 21260, June 5, 1987)
17 CFR 229.10 Subpart 229.100 -- Business
17 CFR 229.101 (Item 101) Description of business.
(a) General development of business. Describe the general
development of the business of the registrant, its subsidiaries and any
predecessor(s) during the past five years, or such shorter period as the
registrant may have been engaged in business. Information shall be
disclosed for earlier periods if material to an understanding of the
general development of the business.
(1) In describing developments, information shall be given as to
matters such as the following: the year in which the registrant was
organized and its form of organization; the nature and results of any
bankruptcy, receivership or similar proceedings with respect to the
registrant or any of its significant subsidiaries; the nature and
results of any other material reclassification, merger or consolidation
of the registrant or any of its significant subsidiaries; the
acquisition or disposition of any material amount of assets otherwise
than in the ordinary course of business; and any material changes in
the mode of conducting the business.
(2) Registrants, (i) filing a registration statement on Form S-1 (
239.11 of this chapter) under the Securities Act or on Form 10 ( 249.210
of this chapter) under the Exchange Act, (ii) not subject to the
reporting requirements of section 13(a) or 15(d) of the Exchange Act
immediately prior to the filing of such registration statement, and
(iii) that (including predecessors) have not received revenue from
operations during each of the three fiscal years immediately prior to
the filing of registration statement, shall provide the following
information: (A) if the registration statement is filed prior to the
end of the registrant's second fiscal quarter, a description of the
registrant's plan of operation for the remainder of the fiscal year; or
(B) if the registration statement is filed subsequent to the end of the
registrant's second fiscal quarter, a descripition of the registrant's
plan of operation for the remainder of the fiscal year and for the first
six months of the next fiscal year. If such information is not
available, the reasons for its not being available shall be stated.
Disclosure relating to any plan shall include such matters as:
(1) In the case of a registration statement on Form S-1, a statement
in narrative form indicating the registrant's opinion as to the period
of time that the proceeds from the offering will satisfy cash
requirements and whether in the next six months it will be necessary to
raise additional funds to meet the expenditures required for operating
the business of the registrant; the specific reasons for such opinion
shall be set forth and categories of expenditures and sources of cash
resources shall be identified; however, amounts of expenditures and
cash resources need not be provided; in addition, if the narrative
statement is based on a cash budget, such budget shall be furnished to
the Commission as supplemental information, but not as part of the
registration statement;
(2) An explanation of material product research and development to be
performed during the period covered in the plan;
(3) Any anticipated material acquisition of plant and equipment and
the capacity thereof;
(4) Any anticipated material changes in number of employees in the
various departments such as research and development, production, sales
or administration; and
(5) Other material areas which may be peculiar to the registrant's
business.
(b) Financial information about industry segments. State for each of
the registrant's last three fiscal years or for each fiscal year the
registrant has been engaged in business, whichever period is shorter,
the amounts of revenue (with sales to unaffiliated customers and sales
or transfers to other industry segments of the registrant shown
separately), operating profit or loss and identifiable assets
attributable to each of the registrant's industry segments. (See
appendix A to this Item for a suggested tabular format for presentation
of this information.) To the extent that financial information included
pursuant to this paragraph (b) complies with generally accepted
accounting principles, the registrant may include in its financial
statements a cross reference to this data in lieu of presenting
duplicative information about its segments in the financial statements;
conversely, a registrant may cross reference to the financial
statements.
(1) The prior period information shall be restated retroactively in
the following circumstances, unless not material, with appropriate
disclosure of the nature and effect of the restatement:
(i) When the financial statements of the registrant as a whole have
been restated retroactively; or (ii) when there has been a change in
the way the registrant's products or services are grouped into industry
segments and such change affects the segment information being reported;
restatement is not required when a registrant's reportable segments
change solely as a result of a change in the nature of its operations or
as a result of a segment losing or gaining in significance.
(2) If the registrant includes, or is required by Article 3 of
Regulation S-X (17 CFR 210) to include, interim financial statements,
discuss any facts relating to the performance of any of the segments
during the period which, in the opinion of management, indicate that the
three year segment financial data may not be indicative of current or
future operations of the segment. Comparative financial information
shall be included to the extent necessary to the discussion.
(c) Narrative description of business. (1) Describe the business
done and intended to be done by the registrant and its subsidiaries,
focusing upon the registrant's dominant industry segment or each
reportable industry segment about which financial information is
presented in the financial statements. To the extent material to an
understanding of the registrant's business taken as a whole, the
description of each such segment shall include the information specified
in paragraphs (c)(1) (i) through (x) of this section. The matters
specified in paragraphs (c)(1) (xi) through (xiii) of this section shall
be discussed with respect to the registrant's business in general;
where material, the industry segments to which these matters are
significant shall be identified.
(i) The principal products produced and services rendered by the
registrant in the industry segment and the principal markets for, and
methods of distribution of, the segment's principal products and
services. In addition, state for each of the last three fiscal years
the amount or percentage of total revenue contributed by any class of
similar products or services which accounted for 10 percent or more of
consolidated revenue in any of the last three fiscal years or 15 percent
or more of consolidated revenue, if total revenue did not exceed
$50,000,000 during any of such fiscal years.
(ii) A description of the status of a product or segment (e.g.
whether in the planning stage, whether prototypes exist, the degree to
which product design has progressed or whether further engineering is
necessary), if there has been a public announcement of, or if the
registrant otherwise has made public information about, a new product or
industry segment that would require the investment of a material amount
of the assets of the registrant or that otherwise is material. This
paragraph is not intended to require disclosure of otherwise nonpublic
corporate information the disclosure of which would affect adversely the
registrant's competitive position.
(iii) The sources and availability of raw materials.
(iv) The importance to the industry segment and the duration and
effect of all patents, trademarks, licenses, franchises and concessions
held.
(v) The extent to which the business of the industry segment is or
may be seasonal.
(vi) The practices of the registrant and the industry (respective
industries) relating to working capital items (e.g., where the
registrant is required to carry significant amounts of inventory to meet
rapid delivery requirements of customers or to assure itself of a
continuous allotment of goods from suppliers; where the registrant
provides rights to return merchandise; or where the registrant has
provided extended payment terms to customers).
(vii) The dependence of the segment upon a single customer, or a few
customers, the loss of any one or more of which would have a material
adverse effect on the segment. The name of any customer and its
relationship, if any, with the registrant or its subsidiaries shall be
disclosed if sales to the customer by one or more segments are made in
an aggregate amount equal to 10 percent or more of the registrant's
consolidated revenues and the loss of such customer would have a
material adverse effect on the registrant and its subsidiaries taken as
a whole. The names of other customers may be included, unless in the
particular case the effect of including the names would be misleading.
For purposes of this paragraph, a group of customers under common
control or customers that are affiliates of each other shall be regarded
as a single customer.
(viii) The dollar amount of backlog orders believed to be firm, as of
a recent date and as of a comparable date in the preceding fiscal year,
together with an indication of the portion thereof not reasonably
expected to be filled within the current fiscal year, and seasonal or
other material aspects of the backlog. (There may be included as firm
orders government orders that are firm but not yet funded and contracts
awarded but not yet signed, provided an appropriate statement is added
to explain the nature of such orders and the amount thereof. The portion
of orders already included in sales or operating revenues on the basis
of percentage of completion or program accounting shall be excluded.)
(ix) A description of any material portion of the business that may
be subject to renegotiation of profits or termination of contracts or
subcontracts at the election of the Government.
(x) Competitive conditions in the business involved including, where
material, the identity of the particular markets in which the registrant
competes, an estimate of the number of competitors and the registrant's
competitive position, if known or reasonably available to the
registrant. Separate consideration shall be given to the principal
products or services or classes of products or services of the segment,
if any. Generally, the names of competitors need not be disclosed. The
registrant may include such names, unless in the particular case the
effect of including the names would be misleading. Where, however, the
registrant knows or has reason to know that one or a small number of
competitors is dominant in the industry it shall be identified. The
principal methods of competition (e.g., price, service, warranty or
product performance) shall be identified, and positive and negative
factors pertaining to the competitive position of the registrant, to the
extent that they exist, shall be explained if known or reasonably
available to the registrant.
(xi) If material, the estimated amount spent during each of the last
three fiscal years on company-sponsored research and development
activities determined in accordance with generally accepted accounting
principles. In addition, state, if material, the estimated dollar
amount spent during each of such years on customer-sponsored research
activities relating to the development of new products, services or
techniques or the improvement of existing products, services or
techniques.
(xii) Appropriate disclosure also shall be made as to the material
effects that compliance with Federal, State and local provisions which
have been enacted or adopted regulating the discharge of materials into
the environment, or otherwise relating to the protection of the
environment, may have upon the capital expenditures, earnings and
competitive position of the registrant and its subsidiaries. The
registrant shall disclose any material estimated capital expenditures
for environmental control facilities for the remainder of its current
fiscal year and its succeeding fiscal year and for such further periods
as the registrant may deem materials.
(xiii) The number of persons employed by the registrant.
(d) Financial information about foreign and domestic operations and
export sales. (1) State for each of the registrant's last three fiscal
years, or for each fiscal year the registrant has been engaged in
business, whichever period is shorter, the amounts of revenue (with
sales to unaffiliated customers and sales or transfers to other
geographic areas shown separately), operating profit or loss and
identifiable assets attributable to each of the registrant's geographic
areas and the amount of export sales in the aggregate or by appropriate
geographic area to which the sales are made. (See appendix B to this
section for a suggested tabular format for presentation of this
information.) To the extent that financial information included pursuant
to this paragraph (d) complies with generally accepted accounting
principles, the registrant may include in its financial statements a
cross reference to this data in lieu of presenting duplicative data in
its financial statements; conversely a registrant may cross-reference
to the financial statements. The prior period information shall be
retroactively restated in the following circumstances, unless not
material, with appropriate disclosure of the nature and effect of the
restatement:
(i) When the financial statements of the registrant as a whole have
been retroactively restated, or
(ii) When there has been a change in the way a registrant's foreign
operations are grouped into geographic areas and such change affects the
geographic area information being reported. Restatement is not required
when a registrant's geographic areas change as a result of a change in
the nature of operations or as a result of an area losing or gaining in
significance.
(2) Any risks attendant to the foreign operations and any dependence
of one or more of the registrant's industry segments upon such foreign
operations shall be described unless it would be more appropriate for
this matter to be discussed in connection with the description of one or
more of the registrant's industry segments pursuant to paragraph (c) of
this section.
(3) If the registrant includes, or is required by Article 3 of
Regulation S-X (17 CFR 210), to include, interim financial statements,
discuss any facts relating to the information furnished pursuant to this
paragraph (d) that, in the opinion of management, indicate that the
three year financial data for foreign and domestic operations or export
sales may not be indicative of current or future operations.
Comparative information shall be included to the extent necessary to the
discussion.
1. In determining what information about the industry segments is
material to an understanding of the registrant's business taken as a
whole and therefore required to be disclosed, pursuant to paragraph (c)
of this Item, the registrant should take into account both quantitative
and qualitative factors such as the significance of the matter to the
registrant (e.g., whether a matter with a relatively minor impact on the
registrant's business is represented by management to be important to
its future profitability), the pervasiveness of the matter (e.g.,
whether it affects or may affect numerous items in the segment
information), and the impact of the matter (e.g., whether it distorts
the trends reflected in the segment information). Situations may arise
when information should be disclosed about a segment, althought the
information in quantitative terms may not appear significant to the
registrant's business taken as a whole.
2. The determination whether information about foreign and domestic
operations and export sales is required in the document for a particular
year shall be based upon an evaluation of interperiod comparability.
For instance, interperiod comparability most likely would require that
foreign and domestic operations and export sales that have been
significant in the past and are expected to be significant in the future
be regarded as reportable even though they are not significant in the
current fiscal year.
3. The Commission, upon written request of the registrant and where
consistent with the protection of investors, may permit the omission of
any of the information required by this Item or the furnishing in
substitution thereof of appropriate information of comparable character.
The table set forth below is illustrative of the format that might be
used for presenting the segment information required by paragraphs (b)
and (c)(1)(i) of Items 101 regarding industry segments and classes of
similar products or services.
The table set forth below is illustrative of the format that might be
used for presenting the segment information required by paragraph (d) of
Item 101 regarding foreign and domestic operations and export sales.
17 CFR 229.102 (Item 102) Description of property.
State briefly the location and general character of the principal
plants, mines and other materially important physical properties of the
registrant and its subsidiaries. In addition, identify the industry
segment(s) that use the properties described. If any such property is
not held in fee or is held subject to any major encumbrance, so state
and describe briefly how held.
1. What is required is such information as reasonably will inform
investors as to the suitability, adequacy, productive capacity and
extent of utilization of the facilities by the registrant. Detailed
descriptions of the physical characteristics of individual properties or
legal descriptions by metes and bounds are not required and shall not be
given.
2. In determining whether properties should be described, the
registrant should take into account both quantitative and qualitative
factors. See Instruction 1 to Item 101 of Regulation S-K ( 229.101).
3. In the case of an extractive enterprise, material information
shall be given as to production, reserves, locations, development and
the nature of the registrant's interest. If individual properties are
of major significance to an industry segment:
A. More detailed information concerning these matters shall be
furnished; and
B. Appropriate maps shall be used to disclose location data of
significant properties except in cases for which numerous maps would be
required.
4. A. If reserve estimates are referred to in the document, the staff
of the Office of Engineering, Division of Corporation Finance of the
Commission, shall be consulted. That Office may request that a copy of
the full report of the engineer or other expert who estimated the
reserves be furnished as supplemental information and not as part of the
filing. See Rule 418 of Regulation C ( 230.418 of this chapter) and
Rule 12b-4 of Regulation 12B ( 240.12b-4 of this chapter) with respect
to the submission to, and return by, the Commission of supplemental
information.
B. If the estimates of reserves, or any estimated valuation thereof,
are represented as being based on estimates prepared or reviewed by
independent consultants, those independent consultants shall be named in
the document.
5. Estimates of oil or gas reserves other than proved or, in the case
of other extractive reserves, estimates other than proved or probable
reserves, and any estimated values of such reserves shall not be
disclosed in any document publicly filed with the Commission, unless
such information is required to be disclosed in the document by foreign
or state law; provided, however, that where such estimates previously
have been provided to a person (or any of its affiliates) that is
offering to acquire, merge or consolidate with the registrant or
otherwise to acquire the registrant's securities, such estimates may be
included in documents relating to such acquisition.
6. The definitions in 210.4-10(a) of Regulation S-X (17 CFR 210)
shall apply to this Item with respect to oil and gas operations.
17 CFR 229.103 (Item 103) Legal proceedings.
Describe briefly any material pending legal proceedings, other than
ordinary routine litigation incidental to the business, to which the
registrant or any of its subsidiaries is a party or of which any of
their property is the subject. Include the name of the court or agency
in which the proceedings are pending, the date instituted, the principal
parties thereto, a description of the factual basis alleged to underlie
the proceeding and the relief sought. Include similar information as to
any such proceedings known to be contemplated by governmental
authorities.
1. If the business ordinarily results in actions for negligence or
other claims, no such action or claim need be described unless it
departs from the normal kind of such actions.
2. No information need be given with respect to any proceeding that
involves primarily a claim for damages if the amount involved, exclusive
of interest and costs, does not exceed 10 percent of the current assets
of the registrant and its subsidiaries on a consolidated basis.
However, if any proceeding presents in large degree the same legal and
factual issues as other proceedings pending or known to be contemplated,
the amount involved in such other proceedings shall be included in
computing such percentage.
3. Notwithstanding Instructions 1 and 2, any material bankruptcy,
receivership, or similar proceeding with respect to the registrant or
any of its significant subsidiaries shall be described.
4. Any material proceedings to which any director, officer or
affiliate of the registrant, any owner of record or beneficially of more
than five percent of any class of voting securities of the registrant,
or any associate of any such director, officer, affiliate of the
registrant, or security holder is a party adverse to the registrant or
any of its subsidiaries or has a material interest adverse to the
registrant or any of its subsidiaries also shall be described.
5. Notwithstanding the foregoing, an administrative or judicial
proceeding (including, for purposes of A and B of this Instruction,
proceedings which present in large degree the same issues) arising under
any Federal, State or local provisions that have been enacted or adopted
regulating the discharge of materials into the environment or primary
for the purpose of protecting the environment shall not be deemed
''ordinary routine litigation incidental to the business'' and shall be
described if:
A. Such proceeding is material to the business or financial condition
of the registrant;
B. Such proceeding involves primarily a claim for damages, or
involves potential monetary sanctions, capital expenditures, deferred
charges or charges to income and the amount involved, exclusive of
interest and costs, exceeds 10 percent of the current assets of the
registrant and its subsidiaries on a consolidated basis; or
C. A governmental authority is a party to such proceeding and such
proceeding involves potential monetary sanctions, unless the registrant
reasonably believes that such proceeding will result in no monetary
sanctions, or in monetary sanctions, exclusive of interest and costs, of
less than $100,000; provided, however, that such proceedings which are
similar in nature may be grouped and described generically.
17 CFR 229.103 Subpart 229.200 -- Securities of the Registrant
17 CFR 229.201 (Item 201) Market price of and dividends on the
registrant's common equity and related stockholder matters.
(a) Market information. (1)(i) Identify the principal United States
market or markets in which each class of the registrant's common equity
is being traded. Where there is no established public trading market
for a class of common equity, furnish a statement to that effect. For
purposes of this Item the existence of limited or sporadic quotations
should not of itself be deemed to constitute an ''established public
trading market.'' In the case of foreign registrants, also identify the
principal established foreign public trading market, if any, for each
class of the registrant's common equity.
(ii) If the principal United States market for such common equity is
an exchange, state the high and low sales prices for the equity for each
full quarterly period within the two most recent fiscal years and any
subsequent interim period for which financial statements are included,
or are required to be included by Article 3 of Regulation S-X (17 CFR
210), as reported in the consolidated transaction reporting system or,
if not so reported, as reported on the principal exchange market for
such equity.
(iii) If the principal United States market for such common equity is
not an exchange, state the range of high and low bid information for the
equity for each full quarterly period within the two most recent fiscal
years and any subsequent interim period for which financial statements
are included, or are required to be included by Article 3 of Regulation
S-X, as regularly quoted in the automated quotation system of a
registered securities association, or where the equity is not quoted in
such a system, the range of reported high and low bid quotations,
indicating the source of such quotations. Indicate, as applicable, that
such over-the-counter market quotations reflect inter-dealer prices,
without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions. Where there is an absence of an
established public trading market, reference to quotations shall be
qualified by appropriate explanation.
(iv) Where a foreign registrant has identified a principal
established foreign trading market for its common equity pursuant to
paragraph (a)(1) of this Item, also provide market price information
comparable, to the extent practicable, to that required for the
principal United States market, including the source of such
information. Such prices shall be stated in the currency in which they
are quoted. The registrant may translate such prices into United States
currency at the currency exchange rate in effect on the date the price
disclosed was reported on the foreign exchange. If the primary United
States market for the registrant's common equity trades using American
Depositary Receipts, the United States prices disclosed shall be on that
basis.
(v) If the information called for by this Item is being presented in
a registration statement filed pursuant to the Securities Act or a proxy
or information statement filed pursuant to the Exchange Act, the
document also shall include price information as of the latest
practicable date, and, in the case of securities to be issued in
connection with an acquisition, business combination or other
reorganization, as of the date immediately prior to the public
announcement of such transaction.
(2) If the information called for by this paragraph (a) is being
presented in a registration statement on Form S-1 ( 239.11 of this
chapter) or Form S-18 ( 239.28 of this chapter) under the Securities Act
or on Form 10 ( 249.210 of this chapter) under the Exchange Act relating
to a class of common equity for which at the time of filing there is no
established United States public trading market, indicate the amount(s)
of common equity (i) that is subject to outstanding options or warrants
to purchase, or securities convertible into, common equity of the
registrant; (ii) that could be sold pursuant to Rule 144 under the
Securities Act ( 230.144 of this chapter) or that the registrant has
agreed to register under the Securities Act for sale by security
holders; or (iii) that is being, or has been publicly proposed to be,
publicly offered by the registrant (unless such common equity is being
offered pursuant to an employee benefit plan or dividend reinvestment
plan), the offering of which could have a material effect on the market
price of the registrant's common equity.
(b) Holders. (1) Set forth the approximate number of holders of each
class of common equity of the registrant as of the latest practicable
date.
(2) If the information called for by this paragraph (b) is being
presented in a registration statement filed pursuant to the Securities
Act or a proxy statement or information statement filed pursuant to the
Exchange Act that relates to an acquisition, business combination or
other reorganization, indicate the effect of such transaction on the
amount and percentage of present holdings of the registrant's common
equity owned beneficially by (i) any person (including any group as that
term is used in section 13(d)(3) of the Exchange Act) who is known to
the registrant to be the beneficial owner of more than five percent of
any class of the registrant's common equity and (ii) each director and
nominee and (iii) all directors and officers as a group, and the
registrant's present commitments to such persons with respect to the
issuance of shares of any class of its common equity.
(c) Dividends. (1) State the frequency and amount of any cash
dividends declared on each class of its common equity by the registrant
for the two most recent fiscal years and any subsequent interim period
for which financial statements are required to be presented by 210.3 of
Regulation S-X. Where there are restrictions (including, where
appropriate, restrictions on the ability of registrant's subsidiaries to
transfer funds to the registrant in the form of cash dividends, loans or
advances) that currently materially limit the registrant's ability to
pay such dividends or that the registrant reasonably believes are likely
to limit materially the future payment of dividends on the common equity
so state and either (i) describe briefly (where appropriate quantify)
such restrictions, or (ii) cross reference to the specific discussion of
such restrictions in the Management's Discussion and Analysis of
financial condition and operating results prescribed by Item 303 of
Regulation S-K ( 229.303) and the description of such restrictions
required by Regulation S-X in the registrant's financial statements.
(2) Where registrants have a record of paying no cash dividends
although earnings indicate an ability to do so, they are encouraged to
consider the question of their intention to pay cash dividends in the
foreseeable future and, if no such intention exists, to make a statement
of that fact in the filing. Registrants which have a history of paying
cash dividends also are encouraged to indicate whether they currently
expect that comparable cash dividends will continue to be paid in the
future and, if not, the nature of the change in the amount or rate of
cash dividend payments.
1. Registrants, the common equity of which is listed for trading on
more than one securities exchange registered under the Exchange Act, are
required to indicate each such exchange pursuant to paragraph (a)(1)(i)
of this Item; such registrants, however, need only report one set of
price quotations pursuant to paragraph (a)(1)(ii) of this Item; where
available, these shall be the prices as reported in the consolidated
transaction reporting system and, where the prices are not so reported,
the prices on the most significant (in terms of volume) securities
exchange for such shares.
2. Market prices and dividends reported pursuant to this Item shall
be adjusted to give retroactive effect to material changes resulting
from stock dividends, stock splits and reverse stock splits.
3. The computation of the approximate number of holders of
registrant's common equity may be based upon the number of record
holders or also may include individual participants in security position
listings. See Rule 17Ad-8 under the Exchange Act. The method of
computation that is chosen shall be indicated.
4. If the registrant is a foreign issuer, describe briefly:
A. Any governmental laws, decrees or regulations in the country in
which the registrant is organized that restrict the export or import of
capital, including, but not limited to, foreign exchange controls, or
that affect the remittance of dividends or other payments to nonresident
holders of the registrant's common equity; and
B. All taxes, including withholding provisions, to which United
States common equity holders are subject under existing laws and
regulations of the foreign country in which the registrant is organized.
Include a brief description of pertinent provisions of any reciprocal
tax treaty between such foreign country and the United States regarding
withholding. If there is no such treaty, so state.
5. If the registrant is a foreign private issuer whose common equity
of the class being registered is wholly or partially in bearer form, the
response to this Item shall so indicate together with as much
information as the registrant is able to provide with respect to
security holdings in the United States. If the securities being
registered trade in the United States in the form of American Depositary
Receipts or similar certificates, the response to this Item shall so
indicate together with the name of the depositary issuing such receipts
and the number of shares or other units of the underlying security
representing the trading units in such receipts.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90 Stat. 57; secs. 12, 13,
15(d), 23(a), 48 Stat. 892, 894, 895, 901; secs. 1, 3, 8, 49 Stat.
1375, 1377, 1379; sec. 203(a), 49 Stat. 704; sec. 202, 68 Stat. 686;
secs. 3, 4, 6, 78 Stat. 565-568, 569, 570-574; secs. 1, 2, 82 Stat.
454; sec. 28(c), 84 Stat. 1435; secs. 1, 2, 84 Stat. 1497; sec.
105(b), 88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat. 117, 118, 119, 155;
sec. 308(b), 90 Stat. 57; secs. 202, 203, 204, 91 Stat. 1494, 1498,
1499, 1500; secs. 8 30, 31(c), 38(a), 54 Stat. 803, 836, 838, 841; 74
Stat. 201; 84 Stat. 1415; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 78l,
78m, 78o(d), 78w(a), 80a-8, 80a-29, 80a-30(c), 80a-37(a))
(47 FR 11401, Mar. 16, 1982, as amended at 47 FR 25127, June 10,
1982; 47 FR 54768, Dec. 6, 1982)
17 CFR 229.202 (Item 202) Description of registrant's securities.
Note: If the securities being described have been accepted for
listing on an exchange, the exchange may be identified. The document
should not however, convey the impression that the registrant may apply
successfully for listing of the securities on an exchange or that, in
the case of an underwritten offering, the underwriters may request the
registrant to apply for such listing, unless there is reasonable
assurance that the securities to be offered will be acceptable to a
securities exchange for listing.
(a) Capital stock. If capital stock is to be registered, state the
title of the class and describe such of the matters listed in paragraphs
(a) (1) through (5) as are relevant. A complete legal description of
the securities need not be given.
(1) Outline briefly: (i) dividend rights; (ii) terms of conversion;
(iii) sinking fund provisions; (iv) redemption provisions; (v) voting
rights, including any provisions specifying the vote required by
security holders to take action; (vi) any classification of the Board
of Directors, and the impact of such classification where cumulative
voting is permitted or required; (vii) liquidation rights; (viii)
preemption rights; and (ix) liability to further calls or to assessment
by the registrant and for liabilities of the registrant imposed on its
stockholders under state statutes (e.g., to laborers, servants or
employees of the registrant), unless such disclosure would be immaterial
because the financial resources of the registrant or other factors make
it improbable that liability under such state statues would be imposed;
(x) any restriction on alienability of the securities to be registered;
and (xi) any provision discriminating against any existing or
prospective holder of such securities as a result of such security
holder owning a substantial amount of securities.
(2) If the rights of holders of such stock may be modified otherwise
than by a vote of a majority or more of the shares outstanding, voting
as a class, so state and explain briefly.
(3) If preferred stock is to be registered, describe briefly any
restriction on the repurchase or redemption of shares by the registrant
while there is any arrearage in the payment of dividends or sinking fund
installments. If there is no such restriction, so state.
(4) If the rights evidenced by, or amounts payable with respect to,
the shares to be registered are, or may be, materially limited or
qualified by the rights of any other authorized class of securities,
include the information regarding such other securities as will enable
investors to understand such limitations or qualifications. No
information need be given, however, as to any class of securities all of
which will be retired, provided appropriate steps to ensure such
retirement will be completed prior to or upon delivery by the registrant
of the shares.
(5) Describe briefly or cross-reference to a description in another
part of the document, any provision of the registrant's charter or
by-laws that would have an effect of delaying, deferring or preventing a
change in control of the registrant and that would operate only with
respect to an extraordinary corporate transaction involving the
registrant (or any of its subsidiaries), such as a merger,
reorganization, tender offer, sale or transfer of substantially all of
its assets, or liquidation. Provisions and arrangements required by law
or imposed by governmental or judicial authority need not be described
or discussed pursuant to this paragraph (a)(5). Provisions or
arrangements adopted by the registrant to effect, or further, compliance
with laws or governmental or judicial mandate are not subject to the
immediately preceding sentence where such compliance did not require the
specific provisions or arrangements adopted.
(b) Debt securities. If debt securities are to be registered, state
the title of such securities, the principal amount being offered, and,
if a series, the total amount authorized and the total amount
outstanding as of the most recent practicable date; and describe such
of the matter listed in paragraphs (b) (1) through (10) as are relevant.
A complete legal description of the securities need not be given. For
purposes solely of this Item, debt securities that differ from one
another only as to the interest rate or maturity shall be regarded as
securities of the same class. Outline briefly:
(1) Provisions with respect to maturity, interest, conversion,
redemption, amortization, sinking fund, or retirement;
(2) Provisions with respect to the kind and priority of any lien
securing the securities, together with a brief identification of the
principal properties subject to such lien;
(3) Provisions with respect to the subordination of the rights of
holders of the securities to other security holders or creditors of the
registrant; where debt securities are designated as subordinated in
accordance with Instruction 1 to this Item, set forth the aggregate
amount of outstanding indebtedness as of the most recent practicable
date that by the terms of such debt securities would be senior to such
subordinated debt and describe briefly any limitation on the issuance of
such additional senior indebtedness or state that there is no such
limitation;
(4) Provisions restricting the declaration of dividends or requiring
the maintenance of any asset ratio or the creation or maintenance of
reserves;
(5) Provisions restricting the incurrence of additional debt or the
issuance of additional securities; in the case of secured debt, whether
the securities being registered are to be issued on the basis of
unbonded bondable property, the deposit of cash or otherwise; as of the
most recent practicable date, the approximate amount of unbonded
bondable property available as a basis for the issuance of bonds;
provisions permitting the withdrawal of cash deposited as a basis for
the issuance of bonds; and provisions permitting the release or
substitution of assets securing the issue; Provided, however, That
provisions permitting the release of assets upon the deposit of
equivalent funds or the pledge of equivalent property, the release of
property no longer required in the business, obsolete property, or
property taken by eminent domain or the application of insurance moneys,
and other similar provisions need not be described;
(6) The general type of event that constitutes a default and whether
or not any periodic evidence is required to be furnished as to the
absence of default or as to compliance with the terms of the indenture;
(7) Provisions relating to modification of the terms of the security
or the rights of security holders;
(8) If the rights evidenced by the securities to be registered are,
or may be, materially limited or qualified by the rights of any other
authorized class of securities, the information regarding such other
securities as will enable investors to understand the rights evidenced
by the securities; to the extent not otherwise disclosed pursuant to
this Item; no information need be given, however, as to any class of
securities all of which will be retired, provided appropriate steps to
ensure such retirement will be completed prior to or upon delivery by
the registrant of the securities;
(9) If debt securities are to be offered at a price such that they
will be deemed to be offered at an ''original issue discount'' as
defined in paragraph (a) of section 1273 of the Internal Revenue Code
(26 U.S.C. 1273), or if a debt security is sold in a package with
another security and the allocation of the offering price between the
two securities may have the effect of offering the debt security at such
an original issue discount, the tax effects thereof pursuant to sections
1271-1278;
(10) The name of the trustee(s) and the nature of any material
relationship with the registrant or with any of its affiliates; the
percentage of securities of the class necessary to require the trustee
to take action; and what indemnification the trustee may require before
proceeding to enforce the lien.
(c) Warrants and rights. If the securities described are to be
offered pursuant to warrants or rights state:
(1) The amount of securities called for by such warrants or rights;
(2) The period during which and the price at which the warrants or
rights are exercisable;
(3) The amount of warrants or rights outstanding;
(4) Provisions for changes to or adjustments in the exercise price;
and
(5) Any other material terms of such rights on warrants.
(d) Other securities. If securities other than capital stock, debt,
warrants or rights are to be registered, include a brief description
(comparable to that required in paragraphs (a), (b) and (c) of Item 202)
of the rights evidenced thereby.
(e) Market information for securities other than common equity. If
securities other than common equity are to be registered and there is an
established public trading market for such securities (as that term is
used in Item 201 of Regulation S-K ( 229.201 of this chapter)) provide
market information with respect to such securities comparable to that
required by paragraph (a) of Item 201 of Regulation S-K ( 229.201).
(f) American Depositary Receipts. If Depositary Shares represented
by American Depositary Receipts are being registered, furnish the
following information:
(1) The name of the depositary and the address of its principal
executive office.
(2) State the title of the American Depositary Receipts and identify
the deposited security. Describe briefly the terms of deposit,
including the provisions, if any, with respect to:
(i) The amount of deposited securities represented by one unit of
American Depositary Receipts;
(ii) The procedure for voting, if any, the deposited securities;
(iii) The collection and distribution of dividends;
(iv) The transmission of notices, reports and proxy soliciting
material;
(v) The sale or exercise of rights;
(vi) The deposit or sale of securities resulting from dividends,
splits or plans of reorganization;
(vii) Amendment, extension or termination of the deposit;
(viii) Rights of holders of receipts to inspect the transfer books of
the depositary and the list of holders of receipts;
(ix) Restrictions upon the right to deposit or withdraw the
underlying securities;
(x) Limitation upon the liability of the depositary.
(3) Describe all fees and charges which may be imposed directly or
indirectly against the holder of the American Depositary Receipts,
indicating the type of service, the amount of fee or charges and to whom
paid.
1. Wherever the title of securities is required to be stated, there
shall be given such information as will indicate the type and general
character of the securities, including the following:
A. In the case of shares, the par or stated value, if any; the rate
of dividends, if fixed, and whether cumulative or non-cumulative; a
brief indication of the preference, if any; and if convertible or
redeemable, a statement to that effect;
B. In the case of debt, the rate of interest; the date of maturity
or, if the issue matures serially, a brief indication of the serial
maturities, such as ''maturing serially from 1955 to 1960''; if the
payment of principal or interest is contingent, an appropriate
indication of such contingency; a brief indication of the priority of
the issue; and, if convertible or callable, a statement to that effect;
or
C. In the case of any other kind of security, appropriate information
of comparable character.
2. If the registrant is a foreign registrant, include (to the extent
not disclosed in the document pursuant to Item 201 of Regulation S-K (
229.201) or otherwise) in the description of the securities:
A. A brief description of any limitations on the right of nonresident
or foreign owners to hold or vote such securities imposed by foreign law
or by the charter or other constituent document of the registrant, or if
no such limitations are applicable, so state;
B. A brief description of any governmental laws, decrees or
regulations in the country in which the registrant is organized
affecting the remittance of dividends, interest and other payments to
nonresident holders of the securities being registered;
C. A brief outline of all taxes, including withholding provisions, to
which United States security holders are subject under existing laws and
regulations of the foreign country in which the registrant is organized;
and
D. A brief description of pertinent provisions of any reciprocal tax
treaty between such foreign country and the United States regarding
withholding or, if there is no such treaty, so state.
3. Section 305(a)(2) of the Trust Indenture Act of 1939, 15 U.S.C.
77aaa et seq., as amended (''Trust Indenture Act''), shall not be deemed
to require the inclusion in a registration statement or in a prospectus
of any information not required by this Item.
4. Where convertible securities or stock purchase warrants are being
registered that are subject to redemption or call, the description of
the conversion terms of the securities or material terms of the warrants
shall disclose:
A. Whether the right to convert or purchase the securities will be
forfeited unless it is exercised before the date specified in a notice
of the redemption or call;
B. The expiration or termination date of the warrants;
C. The kinds, frequency and timing of notice of the redemption or
call, including the cities or newspapers in which notice will be
published (where the securities provide for a class of newspapers or
group of cities in which the publication may be made at the discretion
of the registrant, the registrant should describe such provision); and
D. In the case of bearer securities, that investors are responsible
for making arrangements to prevent loss of the right to convert or
purchase in the event of redemption of call, for example, by reading the
newspapers in which the notice of redemption or call may be published.
5. The response to paragraph (f) shall include information with
respect to fees and charges in connection with (A) the deposit or
substitution of the underlying securities; (B) receipt and distribution
of dividends; (C) the sale or exercise of rights; (D) the withdrawal
of the underlying security; and (E) the transferring, splitting or
grouping of receipts. Information with respect to the right to collect
the fees and charges against dividends received and deposited securities
shall be included in response to this item.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90 Stat. 57; secs. 12, 13,
15(d), 23(a), 48 Stat. 892, 894, 895, 901; secs. 1, 3, 8, 49 Stat.
1375, 1377, 1379; sec. 203(a), 49 Stat. 704; sec. 202, 68 Stat. 686;
secs. 3, 4, 6, 78 Stat. 565-568, 569, 570-574; secs. 1, 2, 82 Stat.
454; sec. 28(c), 84 Stat. 1435; secs. 1, 2, 84 Stat. 1497; sec.
105(b), 88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat. 117, 118, 119, 155;
sec. 308(b), 90 Stat. 57; secs. 202, 203, 204, 91 Stat. 1494, 1498,
1499, 1500; secs. 8 30, 31(c), 38(a), 54 Stat. 803, 836, 838, 841; 74
Stat. 201; 84 Stat. 1415; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 78l,
78m, 78o(d), 78w(a), 80a-8, 80a-29, 80a-30(c), 80a-37(a))
(47 FR 11401, Mar. 16, 1982, as amended at 47 FR 54768, Dec. 6, 1982;
51 FR 42056, Nov. 20, 1986)
17 CFR 229.202 Subpart 229.300 -- Financial Information
17 CFR 229.301 (Item 301) Selected financial data.
Furnish in comparative columnar form the selected financial data for
the registrant referred to below, for
(a) Each of the last five fiscal years of the registrant (or for the
life of the registrant and its predecessors, if less), and
(b) Any additional fiscal years necessary to keep the information
from being misleading.
1. The purpose of the selected financial data shall be to supply in a
convenient and readable format selected financial data which highlight
certain significant trends in the registrant's financial condition and
results of operations.
2. Subject to appropriate variation to conform to the nature of the
registrant's business, the following items shall be included in the
table of financial data: net sales or operating revenues; income
(loss) from continuing operations; income (loss) from continuing
operations per common share; total assets; long-term obligations and
redeemable preferred stock (including long-term debt, capital leases,
and redeemable preferred stock as defined in 210.5-02.28(a) of
Regulation S-X (17 CFR 210); and cash dividends declared per common
share. Registrants may include additional items which they believe would
enhance an understanding of and would highlight other trends in their
financial condition and results of operations.
Briefly describe, or cross-reference to a discussion thereof, factors
such as accounting changes, business combinations or dispositions of
business operations, that materially affect the comparability of the
information reflected in selected financial data. Discussion of, or
reference to, any material uncertainties should also be included where
such matters might cause the data reflected herein not to be indicative
of the registrant's future financial condition or results of operations.
3. All references to the registrant in the table of selected
financial data and in this Item shall mean the registrant and its
subsidiaries consolidated.
4. If interim period financial statements are included, or are
required to be included, by Article 3 of Regulation S-X, registrants
should consider whether any or all of the selected financial data need
to be updated for such interim periods to reflect a material change in
the trends indicated; where such updating information is necessary,
registrants shall provide the information on a comparative basis unless
not necessary to an understanding of such updating information.
5. A foreign private issuer shall disclose also the following
information in all filings containing financial statements:
A. In the forepart of the document and as of the latest practicable
date, the exchange rate into U.S. currency of the foreign currency in
which the financial statements are denominated;
B. A history of exchange rates for the five most recent years and any
subsequent interim period for which financial statements are presented
setting forth the rates for period end, the average rates, and the range
of high and low rates for each year; and
C. If equity securities are being registered, a five year summary of
dividends per share stated in both the currency in which the financial
statements are denominated and United States currency based on the
exchange rates at each respective payment date.
6. A foreign private issuer shall present the selected financial data
in the same currency as its financial statements. The issuer may
present the selected financial data on the basis of the accounting
principles used in its primary financial statements but in such case
shall present this data also on the basis of any reconciliations of such
data to United States generally accepted accounting principles and
Regulation S-X made pursuant to Rule 4-01 of Regulation S-X ( 210.4-01
of this chapter).
7. For purposes of this rule, the rate of exchange means the noon
buying rate in New York City for cable transfers in foreign currencies
as certified for customs purposes by the Federal Reserve Bank of New
York. The average rate means the average of the exchange rates on the
last day of each month during a year.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90 Stat. 57; secs. 12, 13,
15(d), 23(a), 48 Stat. 892, 894, 895, 901; secs. 1, 3, 8, 49 Stat.
1375, 1377, 1379; sec. 203(a), 49 Stat. 704; sec. 202, 68 Stat. 686;
secs. 3, 4, 6, 78 Stat. 565-568, 569, 570-574; secs. 1, 2, 82 Stat.
454; sec. 28(c), 84 Stat. 1435; secs. 1, 2, 84 Stat. 1497; sec.
105(b), 88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat. 117, 118, 119, 155;
sec. 308(b), 90 Stat. 57; secs. 202, 203, 204, 91 Stat. 1494, 1498,
1499, 1500; secs. 8, 30, 31(c), 38(a), 54 Stat. 803, 836, 838, 841;
74 Stat. 201; 84 Stat. 1415; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a),
78l, 78m, 78o(d), 78w(a), 80a-8, 80a-29, 80a-30(c), 80a-37(a))
(47 FR 11401, Mar. 16, 1982, as amended at 47 FR 54768, Dec. 6, 1982;
52 FR 30919, Aug. 18, 1987)
17 CFR 229.302 (Item 302) Supplementary financial information.
(a) Selected quarterly financial data. Registrants specified in
paragraph (a)(5) of this Item shall provide the information specified
below.
(1) Disclosure shall be made of net sales, gross profit (net sales
less costs and expenses associated directly with or allocated to
products sold or services rendered), income (loss) before extraordinary
items and cumulative effect of a change in accounting, per share data
based upon such income (loss), and net income (loss), for each full
quarter within the two most recent fiscal years and any subsequent
interim period for which financial statements are included or are
required to be included by Article 3 of Regulation S-X (17 CFR 210).
(2) When the data supplied pursuant to this paragraph (a) vary from
the amounts previously reported on the Form 10-Q ( 249.308a of this
chapter) filed for any quarter, such as would be the case when a pooling
of interests occurs or where an error is corrected, reconcile the
amounts given with those previously reported and describe the reason for
the difference.
(3) Describe the effect of any disposals of segments of a business,
and extraordinary, unusual or infrequently occurring items recognized in
each full quarter within the two most recent fiscal years and any
subsequent interim period for which financial statements are included or
are required to be included by Article 3 of Regulation S-X, as well as
the aggregate effect and the nature of year-end or other adjustments
which are material to the results of that quarter.
(4) If the financial statements to which this information relates
have been reported on by an accountant, appropriate professional
standards and procedures, as enumerated in the Statements of Auditing
Standards issued by the Auditing Standards Board of the American
Institute of Certified Public Accountants, shall be followed by the
reporting accountant with regard to the data required by this paragraph
(a).
(5) This paragraph (a) applies to any registrant, except a foreign
private issuer, that meets both of the following tests:
(i) First test. The registrant:
(A) Has securities registered pursuant to section 12(b) of the
Exchange Act (other than mutual life insurance companies); or
(B) Is an insurance company that is subject to the reporting
requirements of section 15(d) of the Exchange Act and has securities
which also meet the criteria set forth in paragraphs (a)(5)(i) (C)(1)
and (C)(2) immediately following; or
(C) Has securities registered pursuant to section 12(g) of the
Exchange Act which also
(1) Are quoted on the National Association of Securities Dealers
Automated Quotation System, and
(2) Meet the following criteria:
(i) Three or more dealers stand willing to, and do in fact, make a
market in such stock, including making regularly published bona fide
bids and offers for such stock for their own accounts; or the stock is
registered on a securities exchange that is exempted by the Commission
from registration as a national securities exchange pursuant to section
5 of the Exchange Act; for purposes of this paragraph, the insertion of
quotations into the National Association of Securities Dealers Automated
Quotation System by three or more dealers on at least 10 business days
during the six month period immediately preceding the fiscal year for
which the financial statements are required shall satisfy the
requirement that three dealers be making a market;
(ii) There continue to be 800 or more holders of record, as defined
in Rule 12g5-1 ( 240.12g5-1 of this chapter), under the Exchange Act, of
the stock who are not officers, directors, or beneficial owners of 10
percent or more of the stock;
(iii) The registrant continues to be a United States corporation;
(iv) There are 300,000 or more of such securities outstanding in
addition to shares held beneficially by officers, directors, or
beneficial owners of more than 10 percent of the stock; and
(v) In addition, the registrant shall meet two of the three following
requirements:
(A) The shares described in paragraph (5)(i)(C)(2)(iv) of this
section continue to have a market value of at least $2.5 million;
(B) The minimum representative bid price of such stock is at least $5
per share; or
(C) The registrant continues to have at least $2.5 million of
capital, surplus, and undivided profits.
1. The computation required by paragraphs (v)(A) and (v)(B) shall be
based on the average of the closing representative bid prices as
reported by the National Association of Securities Dealers Automated
Quotation System in accordance with Rule 11Ac1-2 under the Exchange Act
( 240.11Ac1-2 of this chapter) for the 20 business days immediately
preceding the fiscal year for which the financial statements are
required.
2. The computation required by paragraph (v)(C) shall be as at the
last business day of the fiscal year immediately preceding the fiscal
year for which the financial statements are required.
(ii) Second test. The registrant and its consolidated subsidiaries
(A) have had a net income after taxes but before extraordinary items and
the cumulative effect of a change in accounting of at least $250,000 for
each of the last three fiscal years; or (B) had total assets of at
least $200,000,000 for the last fiscal year-end.
(b) Information about oil and gas producing activities. Registrants
engaged in oil and gas producing activities shall present the
information about oil and gas producing activities (as those activities
are defined in Regulation S-X, 210.4-10(a)) specified in paragraphs
9-34 of Statement of Financial Accounting Standards (''SFAS'') No. 69,
''Disclosures about Oil and Gas Producing Activities.'' If such oil and
gas producing activities are regarded as significant under one or more
of the tests set forth in paragraph 8 of SFAS No. 69.
1. (a) SFAS No. 69 disclosures that relate to annual periods shall
be presented for each annual period for which an income statement is
required. (b) SFAS No. 69 disclosures required as of the end of an
annual period shall be presented as of the date of each audited balance
sheet required, and (c) SFAS No. 69 disclosures required as of the
beginning of an annual period shall be presented as of the beginning of
each annual period for which an income statement is required.
2. This paragraph, together with 210.4-10 of Regulation S-X,
prescribes financial reporting standards for the preparation of accounts
by persons engaged, in whole or in part, in the production of crude oil
or natural gas in the United States, pursuant to Section 503 of the
Energy Policy and Conservation Act of 1975 (42 U.S.C. 8383) (''EPCA'')
and Section 11(c) of the Energy Supply and Environmental Coordination
Act of 1974 (15 U.S.C. 796) (''ESECA'') as amended by Section 506 of
EPCA. The application of the paragraph to those oil and gas producing
operations of companies regulated for ratemaking purposes on an
individual-company-cost-of-service basis may, however, give appropriate
recognition to differences arising because of the effect of the
ratemaking process.
3. Any person exempted by the Department of Energy from any
record-keeping or reporting requirements pursuant to Section 11(c) of
ESECA, as amended, is similarly exempted from the related provisions of
this paragraph in the preparation of accounts pursuant to EPCA. This
exemption does not affect the applicability of this paragraph to filings
pursuant to the federal securities laws.
(47 FR 11401, Mar. 16, 1982, as amended at 47 FR 57914, Dec. 29,
1982; 52 FR 30919, Aug. 18, 1987; 56 FR 30053, July 1, 1991)
17 CFR 229.303 (Item 303) Management's discussion and analysis of
financial condition and results of operations.
(a) Full fiscal years. Discuss registrant's financial condition,
changes in financial condition and results of operations. The
discussion shall provide information as specified in paragraphs (a) (1),
(2) and (3) with respect to liquidity, capital resources and results of
operations and also shall provide such other information that the
registrant believes to be necessary to an understanding of its financial
condition, changes in financial condition and results of operations.
Discussions of liquidity and capital resources may be combined whenever
the two topics are interrelated. Where in the registrant's judgment a
discussion of segment information or of other subdivisions of the
registrant's business would be appropriate to an understanding of such
business, the discussion shall focus on each relevant, reportable
segment or other subdivision of the business and on the registrant as a
whole.
(1) Liquidity. Identify any known trends or any known demands,
commitments, events or uncertainties that will result in or that are
reasonably likely to result in the registrant's liquidity increasing or
decreasing in any material way. If a material deficiency is identified,
indicate the course of action that the registrant has taken or proposes
to take to remedy the deficiency. Also identify and separately describe
internal and external sources of liquidity, and briefly discuss any
material unused sources of liquid assets.
(2) Capital resources. (i) Describe the registrant's material
commitments for capital expenditures as of the end of the latest fiscal
period, and indicate the general purpose of such commitments and the
anticipated source of funds needed to fulfill such commitments.
(ii) Describe any known material trends, favorable or unfavorable, in
the registrant's capital resources. Indicate any expected material
changes in the mix and relative cost of such resources. The discussion
shall consider changes between equity, debt and any off-balance sheet
financing arrangements.
(3) Results of operations. (i) Describe any unusual or infrequent
events or transactions or any significant economic changes that
materially affected the amount of reported income from continuing
operations and, in each case, indicate the extent to which income was so
affected. In addition, describe any other significant components of
revenues or expenses that, in the registrant's judgment, should be
described in order to understand the registrant's results of operations.
(ii) Describe any known trends or uncertainties that have had or that
the registrant reasonably expects will have a material favorable or
unfavorable impact on net sales or revenues or income from continuing
operations. If the registrant knows of events that will cause a
material change in the relationship between costs and revenues (such as
known future increases in costs of labor or materials or price increases
or inventory adjustments), the change in the relationship shall be
disclosed.
(iii) To the extent that the financial statements disclose material
increases in net sales or revenues, provide a narrative discussion of
the extent to which such increases are attributable to increases in
prices or to increases in the volume or amount of goods or services
being sold or to the introduction of new products or services.
(iv) For the three most recent fiscal years of the registrant, or for
those fiscal years beginning after December 25, 1979, or for those
fiscal years in which the registrant has been engaged in business,
whichever period is shortest, discuss the impact of inflation and
changing prices on the registrant's net sales and revenues and on income
from continuing operations.
1. The registrant's discussion and analysis shall be of the financial
statements and of other statistical data that the registrant believes
will enhance a reader's understanding of its financial condition,
changes in financial condition and results of operations. Generally,
the discussion shall cover the three year period covered by the
financial statements and shall use year-to-year comparisons or any other
formats that in the registrant's judgment enhance a reader's
understanding. However, where trend information is relevant, reference
to the five year selected financial data appearing pursuant to Item 301
of Regulation S-K ( 229.301) may be necessary.
2. The purpose of the discussion and analysis shall be to provide to
investors and other users information relevant to an assessment of the
financial condition and results of operations of the registrant as
determined by evaluating the amounts and certainty of cash flows from
operations and from outside sources. The information provided pursuant
to this Item need only include that which is available to the registrant
without undue effort or expense and which does not clearly appear in the
registrant's financial statements.
3. The discussion and analysis shall focus specifically on material
events and uncertainties known to management that would cause reported
financial information not to be necessarily indicative of future
operating results or of future financial condition. This would include
descriptions and amounts of (A) matters that would have an impact on
future operations and have not had an impact in the past, and (B)
matters that have had an impact on reported operations and are not
expected to have an impact upon future operations.
4. Where the consolidated financial statements reveal material
changes from year to year in one or more line items, the causes for the
changes shall be described to the extent necesary to an understanding of
the registrant's businesses as a whole; Provided, however, That if the
causes for a change in one line item also relate to other line items, no
repetition is required and a line-by-line analysis of the financial
statements as a whole is not required or generally appropriate.
Registrants need not recite the amounts of changes from year to year
which are readily computable from the financial statements. The
discussion shall not merely repeat numerical data contained in the
consolidated financial statements.
5. The term ''liquidity'' as used in this Item refers to the ability
of an enterprise to generate adequate amounts of cash to meet the
enterprise's needs for cash. Except where it is otherwise clear from
the discussion, the registrant shall indicate those balance sheet
conditions or income or cash flow items which the registrant believes
may be indicators of its liquidity condition. Liquidity generally shall
be discussed on both a long-term and short-term basis. The issue of
liquidity shall be discussed in the context of the registrant's own
business or businesses. For example a discussion of working capital may
be appropriate for certain manufacturing, industrial or related
operations but might be inappropriate for a bank or public utility.
6. Where financial statements presented or incorporated by reference
in the registration statement are required by 210.4-08(e)(3) of
Regulation S-X (17 CFR Part 210) to include disclosure of restrictions
on the ability of both consolidated and unconsolidated subsidiaries to
transfer funds to the registrant in the form of cash dividends, loans or
advances, the discussion of liquidity shall include a discussion of the
nature and extent of such restrictions and the impact such restrictions
have had and are expected to have on the ability of the parent company
to meet its cash obligations.
7. Registrants are encouraged, but not required, to supply
forward-looking information. This is to be distinguished from presently
known data which will impact upon future operating results, such as
known future increases in costs of labor or materials. This latter data
may be required to be disclosed. Any forward-looking information
supplied is expressly covered by the safe harbor rule for projections.
See Rule 175 under the Securities Act (17 CFR 230.175), Rule 3b-6 under
the Exchange Act (17 CFR 240.3b-6) and Securities Act Release No. 6084
(June 25, 1979) (44 FR 38810).
8. Registrants are only required to discuss the effects of inflation
and other changes in prices when considered material. This discussion
may be made in whatever manner appears appropriate under the
circumstances. All that is required is a brief textual presentation of
management's views. No specific numerical financial data need be
presented except as Rule 3-20(c) of Regulation S-X ( 210.3-20(c) of this
chapter) otherwise requires. However, registrants may elect to
voluntarily disclose supplemental information on the effects of changing
prices as provided for in Statement of Financial Accounting Standards
No. 89, ''Financial Reporting and Changing Prices'' or through other
supplemental disclosures. The Commission encourages experimentation
with these disclosures in order to provide the most meaningful
presentation of the impact of price changes on the registrant's
financial statements.
9. Registrants that elect to disclose supplementary information on
the effects of changing prices as specified by SFAS No. 89, ''Financial
Reporting and Changing Prices,'' may combine such explanations with the
discussion and analysis required pursuant to this Item or may supply
such information separately with appropriate cross reference.
10. All references to the registrant in the discussion and in this
Item shall mean the registrant and its subsidiaries consolidated.
11. Foreign private registrants also shall discuss briefly any
pertinent governmental economic, fiscal, monetary, or political policies
or factors that have materially affected or could materially affect,
directly or indirectly, their operations or investments by United States
nationals.
12. If the registrant is a foreign private issuer, the discussion
shall focus on the primary financial statements presented in the
registration statement or report. There shall be a reference to the
reconciliation to United States generally accepted accounting
principles, and a discussion of any aspects of the difference between
foreign and United States generally accepted accounting principles, not
discussed in the reconciliation, that the registrant believes is
necessary for an understanding of the financial statements as a whole.
(b) Interim periods. If interim period financial statements are
included or are required to be included by Article 3 of Regulation S-X
(17 CFR 210), a management's discussion and analysis of the financial
condition and results of operations shall be provided so as to enable
the reader to assess material changes in financial condition and results
of operations between the periods specified in paragraphs (b) (1) and
(2) of this Item. The discussion and analysis shall include a
discussion of material changes in those items specifically listed in
paragraph (a) of this Item, except that the impact of inflation and
changing prices on operations for interim periods need not be addressed.
(1) Material changes in financial condition. Discuss any material
changes in financial condition from the end of the preceding fiscal year
to the date of the most recent interim balance sheet provided. If the
interim financial statements include an interim balance sheet as of the
corresponding interim date of the preceding fiscal year, any material
changes in financial condition from that date to the date of the most
recent interim balance sheet provided also shall be discussed. If
discussions of changes from both the end and the corresponding interim
date of the preceding fiscal year are required, the discussions may be
combined at the discretion of the registrant.
(2) Material changes in results of operations. Discuss any material
changes in the registrant's results of operations with respect to the
most recent fiscal year-to-date period for which an income statement is
provided and the corresponding year-to-date period of the preceding
fiscal year. If the registrant is required to or has elected to provide
an income statement for the most recent fiscal quarter, such discussion
also shall cover material changes with respect to that fiscal quarter
and the corresponding fiscal quarter in the preceding fiscal year. In
addition, if the registrant has elected to provide an income statement
for the twelve-month period ended as of the date of the most recent
interim balance sheet provided, the discussion also shall cover material
changes with respect to that twelve-month period and the twelve-month
period ended as of the corresponding interim balance sheet date of the
preceding fiscal year. Notwithstanding the above, if for purposes of a
registration statement a registrant subject to paragraph (b) of
210.3-03 of Regulation S-X provides a statement of income for the
twelve-month period ended as of the date of the most recent interim
balance sheet provided in lieu of the interim income statements
otherwise required, the discussion of material changes in that
twelve-month period will be in respect to the preceding fiscal year
rather than the corresponding preceding period.
1. If interim financial statements are presented together with
financial statements for full fiscal years, the discussion of the
interim financial information shall be prepared pursuant to this
paragraph (b) and the discussion of the full fiscal year's information
shall be prepared pursuant to paragraph (a) of this Item. Such
discussions may be combined.
2. In preparing the discussion and analysis required by this
paragraph (b), the registrant may presume that users of the interim
financial information have read or have access to the discussion and
analysis required by paragraph (a) for the preceding fiscal year.
3. The discussion and analysis required by this paragraph (b) is
required to focus only on material changes. Where the interim financial
statements reveal material changes from period to period in one or more
significant line items, the causes for the changes shall be described if
they have not already been disclosed: Provided, however, That if the
causes for a change in one line item also relate to other line items, no
repetition is required. Registrants need not recite the amounts of
changes from period to period which are readily computable from the
financial statements. The discussion shall not merely repeat numerical
data contained in the financial statements. The information provided
shall include that which is available to the registrant without undue
effort or expense and which does not clearly appear in the registrant's
condensed interim financial statements.
4. The registrant's discussion of material changes in results of
operations shall identify any significant elements of the registrant's
income or loss from continuing operations which do not arise from or are
not necessarily representative of the registrant's ongoing business.
5. The registrant shall discuss any seasonal aspects of its business
which have had a material effect upon its financial condition or results
of operation.
6. Registrants are encouraged but are not required to discuss
forward-looking information. Any forward-looking information supplied
is expressly covered by the safe harbor rule for projections. See Rule
175 under the Securities Act (17 CFR 230. 175), Rule 3b-6 under the
Exchange Act (17 CFR 249.3b-6) and Securities Act Release No. 6084
(June 25, 1979) (44 FR 38810).
(Secs. 7 and 19a of the Securities Act, 15 U.S.C. 77g, 77s(a),
77aa(25)(26); secs. 12, 13, 14, 15(d), and 23(a) of the Securities
Exchange Act of 1934, 15 U.S.C. 78l, 78m, 78n, 78o(d), 78w(a), secs.
5(b), 10(a), 14, 20(a) of the Public Utility Holding Company Act, 15
U.S.C. 79e(a), 79n, 79t(a); secs. 8, 20, 30, 31(c), 38(a) of the
Investment Company Act of 1940, 15 U.S.C. 80a-8, 80a-20, 80a-29,
80a-30(c), 80a-37(a); secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81,
85; secs. 205, 209, 48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec.
8, 68 Stat. 685; sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90 Stat. 57;
secs. 12, 13, 15(d), 23(a), 48 Stat. 892, 894, 895, 901; secs. 1, 3, 8,
49 Stat. 1375, 1377, 1379; sec. 203(a), 49 Stat. 704; sec. 202, 68
Stat. 686; secs. 3, 4, 6, 78 Stat. 565-568, 569, 570-574; secs. 1, 2,
82 Stat. 454; sec. 28(c), 84 Stat. 1435; secs. 1, 2, 84 Stat. 1497;
sec. 105(b), 88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat. 117, 118, 119,
155; sec. 308(b), 90 Stat. 57; secs. 202, 203, 204, 91 Stat. 1494,
1498, 1499, 1500; secs. 8 30, 31(c), 38(a), 54 Stat. 803, 836, 838,
841; 74 Stat. 201; 84 Stat. 1415; 15 U.S.C. 77f, 77g, 77h, 77j,
77s(a), 78l, 78m, 78o(d), 78w(a), 80a-8, 80a-29, 80a-30(c), 80a-37(a))
(47 FR 11401, Mar. 16, 1982, as amended at 47 FR 29839, July 9, 1982;
47 FR 54768, Dec. 6, 1982; 52 FR 30919, Aug. 18, 1987)
17 CFR 229.304 (Item 304) Changes in and disagreements with accountants
on accounting and financial disclosure.
(a)(1) If during the registrant's two most recent fiscal years or any
subsequent interim period, an independent accountant who was previously
engaged as the principal accountant to audit the registrant's financial
statements, or an independent accountant who was previously engaged to
audit a significant subsidiary and on whom the principal accountant
expressed reliance in its report, has resigned (or indicated it has
declined to stand for re-election after the completion of the current
audit) or was dismissed, then the registrant shall:
(i) State whether the former accountant resigned, declined to stand
for re-election or was dismissed and the date thereof.
(ii) State whether the principal accountant's report on the financial
statements for either of the past two years contained an adverse opinion
or a disclaimer of opinion, or was qualified or modified as to
uncertainty, audit scope, or accounting principles; and also describe
the nature of each such adverse opinion, disclaimer of opinion,
modification, or qualification.
(iii) State whether the decision to change accountants was
recommended or approved by:
(A) Any audit or similar committee of the board of directors, if the
issuer has such a committee; or
(B) The board of directors, if the issuer has no such committee.
(iv) State whether during the registrant's two most recent fiscal
years and any subsequent interim period preceding such resignation,
declination or dismissal there were any disagreements with the former
accountant on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreement(s), if not resolved to the satisfaction of the former
accountant, would have caused it to make reference to the subject matter
of the disagreement(s) in connection with its report. Also, (A)
describe each such disagreement; (B) state whether any audit or similar
committee of the board of directors, or the board of directors,
discussed the subject matter of each of such disagreements with the
former accountant; and (C) state whether the registrant has authorized
the former accountant to respond fully to the inquiries of the successor
accountant concerning the subject matter of each of such disagreements
and, if not, describe the nature of any limitation thereon and the
reason therefore. The disagreements required to be reported in response
to this Item include both those resolved to the former accountant's
satisfaction and those not resolved to the former accountant's
satisfaction. Disagreements contemplated by this Item are those that
occur at the decision-making level, i.e., between personnel of the
registrant responsible for presentation of its financial statements and
personnel of the accounting firm responsible for rendering its report.
(v) Provide the information required by paragraph (a)(1)(iv) of this
Item for each of the kinds of events (even though the registrant and the
former accountant did not express a difference of opinion regarding the
event) listed in paragraphs (a)(1)(v) (A) through (D) of this section,
that occurred within the registrant's two most recent fiscal years and
any subsequent interim period preceding the former accountant's
resignation, declination to stand for re-election, or dismissal
(''reportable events''). If the event led to a disagreement or
difference of opinion, then the event should be reported as a
disagreement under paragraph (a)(1)(iv) and need not be repeated under
this paragraph.
(A) The accountant's having advised the registrant that the internal
controls necessary for the registrant to develop reliable financial
statements do not exist;
(B) The accountant's having advised the registrant that information
has come to the accountant's attention that has led it to no longer be
able to rely on management's representations, or that has made it
unwilling to be associated with the financial statements prepared by
management;
(C) (1) The accountant's having advised the registrant of the need to
expand significantly the scope of its audit, or that information has
come to the accountant's attention during the time period covered by
Item 304(a)(1)(iv), that if further investigated may:
(i) Materially impact the fairness or reliability of either: a
previously issued audit report or the underlying financial statements;
or the financial statements issued or to be issued covering the fiscal
period(s) subsequent to the date of the most recent financial statements
covered by an audit report (including information that may prevent it
from rendering an unqualified audit report on those financial
statements), or
(ii) Cause it to be unwilling to rely on management's representations
or be associated with the registrant's financial statements, and
(2) Due to the accountant's resignation (due to audit scope
limitations or otherwise) or dismissal, or for any other reason, the
accountant did not so expand the scope of its audit or conduct such
further investigation; or
(D) (1) The accountant's having advised the registrant that
information has come to the accountant's attention that it has concluded
materially impacts the fairness or reliability of either (i) a
previously issued audit report or the underlying financial statements,
or (ii) the financial statements issued or to be issued covering the
fiscal period(s) subsequent to the date of the most recent financial
statements covered by an audit report (including information that,
unless resolved to the accountant's satisfaction, would prevent it from
rendering an unqualified audit report on those financial statements),
and
(2) Due to the accountant's resignation, dismissal or declination to
stand for re-election, or for any other reason, the issue has not been
resolved to the accountant's satisfaction prior to its resignation,
dismissal or declination to stand for re-election.
(2) If during the registrant's two most recent fiscal years or any
subsequent interim period, a new independent accountant has been engaged
as either the principal accountant to audit the registrant's financial
statements, or as an independent accountant to audit a significant
subsidiary and on whom the principal accountant is expected to express
reliance in its report, then the registrant shall identify the newly
engaged accountant and indicate the date of such accountant's
engagement. In addition, if during the registrant's two most recent
fiscal years, and any subsequent interim period prior to engaging that
accountant, the registrant (or someone on its behalf) consulted the
newly engaged accountant regarding:
(i) Either: the application of accounting principles to a specified
transaction, either completed or proposed; or the type of audit opinion
that might be rendered on the registrant's financial statements, and
either a written report was provided to the registrant or oral advice
was provided that the new accountant concluded was an important factor
considered by the registrant in reaching a decision as to the
accounting, auditing or financial reporting issue; or
(ii) Any matter that was either the subject of a disagreement (as
defined in paragraph 304(a)(1)(iv) and the related instructions to this
item) or a reportable event (as described in paragraph 304(a)(1)(v)),
then the registrant shall:
(A) So state and identify the issues that were the subjects of those
consultations;
(B) Briefly describe the views of the newly engaged accountant as
expressed orally or in writing to the registrant on each such issue and,
if written views were received by the registrant, file them as an
exhibit to the report or registration statement requiring compliance
with this Item 304(a);
(C) State whether the former accountant was consulted by the
registrant regarding any such issues, and if so, provide a summary of
the former accountant's views; and
(D) Request the newly engaged accountant to review the disclosure
required by this Item 304(a) before it is filed with the Commission and
provide the new accountant the opportunity to furnish the registrant
with a letter addressed to the Commission containing any new
information, clarification of the registrant's expression of its views,
or the respects in which it does not agree with the statements made by
the registrant in response to Item 304(a). The registrant shall file
any such letter as an exhibit to the report or registration statement
containing the disclosure required by this Item.
(3) The registrant shall provide the former accountant with a copy of
the disclosures it is making in response to this Item 304(a) that the
former accountant shall receive no later than the day that the
disclosures are filed with the Commission. The registrant shall request
the former accountant to furnish the registrant with a letter addressed
to the Commission stating whether it agrees with the statements made by
the registrant in response to this Item 304(a) and, if not, stating the
respects in which it does not agree. The registrant shall file the
former accountant's letter as an exhibit to the report on registration
statement containing this disclosure. If the former accountant's letter
is unavailable at the time of filing such report or registration
statement, then the registrant shall request the former accountant to
provide the letter as promptly as possible so that the registrant can
file the letter with the Commission within ten business days after the
filing of the report or registration statement. Notwithstanding the ten
business day period, the registrant shall file the letter by amendment
within two business days of receipt; if the letter is received on a
Saturday, Sunday or holiday on which the Commission is not open for
business, then the two business day period shall begin to run on and
shall include the first business day thereafter. The former accountant
may provide the registrant with an interim letter highlighting specific
areas of concern and indicating that a more detailed letter will be
forthcoming within the ten business day period noted above. If not
filed with the report or registration statement containing the
registrant's disclosure under this Item 304(a), then the interim letter,
if any, shall be filed by the registrant by amendment within two
business days of receipt.
(b) If:
(1) In connection with a change in accountants subject to paragraph
(a) of this Item 304, there was any disagreement of the type described
in paragraph (a)(1)(iv) or any reportable event as described in
paragraph (a)(1)(v) of this Item;
(2) During the fiscal year in which the change in accountants took
place or during the subsequent fiscal year, there have been any
transactions or events similar to those which involved such disagreement
or reportable event; and
(3) Such transactions or events were material and were accounted for
or disclosed in a manner different from that which the former
accountants apparently would have concluded was required, the registrant
shall state the existence and nature of the disagreement or reportable
event and also state the effect on the financial statements if the
method had been followed which the former accountants apparently would
have concluded was required.
These disclosures need not be made if the method asserted by the
former accountants ceases to be generally accepted because of
authoritative standards or interpretations subsequently issued.
Instructions to Item 304: 1. The disclosure called for by paragraph
(a) of this Item need not be provided if it has been previously reported
as that term is defined in Rule 12b-2 under the Exchange Act ( 240.12b-2
of this chapter); the disclosure called for by paragraph (a) must be
provided, however, notwithstanding prior disclosure, if required
pursuant to Item 9 of Schedule 14A ( 240.14a-101 of this chapter). The
disclosure called for by paragraph (b) of this section must be
furnished, where required, notwithstanding any prior disclosure about
accountant changes or disagreements.
2. When disclosure is required by paragraph (a) of this section in an
annual report to security holders pursuant to Rule 14a-3 ( 240.14a-3 of
this chapter) or Rule 14c-3 ( 240.14c-3 of this chapter), or in a proxy
or information statement filed pursuant to the requirements of Schedule
14A or 14C ( 240.14a-101 or 240.14c-101 of this chapter), in lieu of a
letter pursuant to paragraph (a)(2)(D) or (a)(3), prior to filing such
materials with or furnishing such materials to the Commission, the
registrant shall furnish the disclosure required by paragraph (a) of
this section to any former accountant engaged by the registrant during
the period set forth in paragraph (a) of this section and to the newly
engaged accountant. If any such accountant believes that the statements
made in response to paragraph (a) of this section are incorrect or
incomplete, it may present its views in a brief statement, ordinarily
expected not to exceed 200 words, to be included in the annual report or
proxy or information statement. This statement shall be submitted to
the registrant within ten business days of the date the accountant
receives the registrant's disclosure. Further, unless the written views
of the newly engaged accountant required to be filed as an exhibit by
paragraph (a)(2)(B) of this Item 304 have been previously filed with the
Commission the registrant shall file a Form 8-K concurrently with the
annual report or proxy or information statement for the purpose of
filing the written views as exhibits thereto.
3. The information required by Item 304(a) need not be provided for a
company being acquired by the registrant that is not subject to the
filing requirements of either section 13(a) or 15(d) of the Exchange
Act, or, because of section 12(i) of the Exchange Act, has not furnished
an annual report to security holders pursuant to Rule 14a-3 or Rule
14c-3 for its latest fiscal year.
4. The term ''disagreements'' as used in this Item shall be
interpreted broadly, to include any difference of opinion concerning any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure which (if not resolved to the
satisfaction of the former accountant) would have caused it to make
reference to the subject matter of the disagreement in connection with
its report. It is not necessary for there to have been an argument to
have had a disagreement, merely a difference of opinion. For purposes
of this Item, however, the term disagreements does not include initial
differences of opinion based on incomplete facts or preliminary
information that were later resolved to the former accountant's
satisfaction by, and providing the registrant and the accountant do not
continue to have a difference of opinion upon, obtaining additional
relevant facts or information.
5. In determining whether any disagreement or reportable event has
occurred, an oral communication from the engagement partner or another
person responsible for rendering the accounting firm's opinion (or their
designee) will generally suffice as the accountant advising the
registrant of a reportable event or as a statement of a disagreement at
the ''decision-making level'' within the accounting firm and require
disclosure under this Item.
(53 FR 12929, Apr. 20, 1988, as amended at 54 FR 9774, Mar. 8, 1989)
17 CFR 229.304 Subpart 229.400 -- Management and Certain Security Holders
17 CFR 229.401 (Item 401) Directors, executive officers, promoters and
control persons.
(a) Identification of directors. List the names and ages of all
directors of the registrant and all persons nominated or chosen to
become directors; indicate all positions and offices with the
registrant held by each such person; state his term of office as
director and any period(s) during which he has served as such; describe
briefly any arrangement or understanding between him and any other
person(s) (naming such person(s)) pursuant to which he was or is to be
selected as a director or nominee.
1. Do not include arrangements or understandings with directors or
officers of the registrant acting solely in their capacities as such.
2. No nominee or person chosen to become a director who has not
consented to act as such shall be named in response to this Item. In
this regard, with respect to proxy statements, see Rule 14a-4(d) under
the Exchange Act ( 240.14a-4(d) of this chapter).
3. If the information called for by this paragraph (a) is being
presented in a proxy or information statement, no information need be
given respecting any director whose term of office as a director will
not continue after the meeting to which the statement relates.
4. With regard to proxy statements in connection with action to be
taken concerning the election of directors, if fewer nominees are named
than the number fixed by or pursuant to the governing instruments, state
the reasons for this procedure and that the proxies cannot be voted for
a greater number of persons than the number of nominees named.
5. With regard to proxy statements in connection with action to be
taken concerning the election of directors, if the solicitation is made
by persons other than management, information shall be given as to
nominees of the persons making the solicitation. In all other
instances, information shall be given as to directors and persons
nominated for election or chosen by management to become directors.
(b) Identification of executive officers. List the names and ages of
all executive officers of the registrant and all persons chosen to
become executive officers; indicate all positions and offices with the
registrant held by each such person; state his term of office as
officer and the period during which he has served as such and describe
briefly any arrangement or understanding between him and any other
person(s) (naming such person) pursuant to which he was or is to be
selected as an officer.
1. Do not include arrangements or understandings with directors or
officers of the registrant acting solely in their capacities as such.
2. No person chosen to become an executive officer who has not
consented to act as such shall be named in response to this Item.
3. The information regarding executive officers called for by this
Item need not be furnished in proxy or information statements prepared
in accordance with Schedule 14A under the Exchange Act ( 240.14a-101 of
this chapter) by those registrants relying on General Instruction G of
Form 10-K under the Exchange Act ( 249.310 of this chapter), Provided,
That such information is furnished in a separate item captioned
''Executive officers of the registrant'' and included in Part I of the
registrant's annual report on Form 10-K.
(c) Identification of certain significant employees. Where the
registrant employs persons such as production managers, sales managers,
or research scientists who are not executive officers but who make or
are expected to make significant contributions to the business of the
registrant, such persons shall be identified and their background
disclosed to the same extent as in the case of executive officers. Such
disclosure need not be made if the registrant was subject to section
13(a) or 15(d) of the Exchange Act or was exempt from section 13(a) by
section 12(g)(2)(G) of such Act immediately prior to the filing of the
registration statement, report, or statement to which this Item is
applicable.
(d) Family relationships. State the nature of any family
relationship between any director, executive officer, or person
nominated or chosen by the registrant to become a director or executive
officer.
The term ''family relationship'' means any relationship by blood,
marriage, or adoption, not more remote than first cousin.
(e) Business experience -- (1) Background. Briefly describe the
business experience during the past five years of each director,
executive officer, person nominated or chosen to become a director or
executive officer, and each person named in answer to paragraph (c) of
Item 401, including: Each person's principal occupations and employment
during the past five years; the name and principal business of any
corporation or other organization in which such occupations and
employment were carried on; and whether such corporation or
organization is a parent, subsidiary or other affiliate of the
registrant. When an executive officer or person named in response to
paragraph (c) of Item 401 has been employed by the registrant or a
subsidiary of the registrant for less than five years, a brief
explanation shall be included as to the nature of the responsibility
undertaken by the individual in prior positions to provide adequate
disclosure of his prior business experience. What is required is
information relating to the level of his professional competence, which
may include, depending upon the circumstances, such specific information
as the size of the operation supervised.
(2) Directorships. Indicate any other directorships held by each
director or person nominated or chosen to become a director in any
company with a class of securities registered pursuant to section 12 of
the Exchange Act or subject to the requirements of section 15(d) of such
Act or any company registered as an investment company under the
Investment Company Act of 1940, 15 U.S.C. 80a-1, et seq., as amended,
naming such company.
(f) Involvement in certain legal proceedings. Describe any of the
following events that occurred during the past five years and that are
material to an evaluation of the ability or integrity of any director,
person nominated to become a director or executive officer of the
registrant:
(1) A petition under the Federal bankruptcy laws or any state
insolvency law was filed by or against, or a receiver, fiscal agent or
similar officer was appointed by a court for the business or property of
such person, or any partnership in which he was a general partner at or
within two years before the time of such filing, or any corporation or
business association of which he was an executive officer at or within
two years before the time of such filing;
(2) Such person was convicted in a criminal proceeding or is a named
subject of a pending criminal proceeding (excluding traffic violations
and other minor offenses);
(3) Such person was the subject of any order, judgment, or decree,
not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining him from,
or otherwise limiting, the following activities:
(i) Acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, any other person regulated by the
Commodity Futures Trading Commission, or an associated person of any of
the foregoing, or as an investment adviser, underwriter, broker or
dealer in securities, or as an affiliated person, director or employee
of any investment company, bank, savings and loan association or
insurance company, or engaging in or continuing any conduct or practice
in connection with such activity;
(ii) Engaging in any type of business practice; or
(iii) Engaging in any activity in connection with the purchase or
sale of any security or commodity or in connection with any violation of
Federal or State securities laws or Federal commodities laws;
(4) Such person was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any Federal or State
authority barring, suspending or otherwise limiting for more than 60
days the right of such person to engage in any activity described in
paragraph (f)(3)(i) of this section, or to be associated with persons
engaged in any such activity; or
(5) Such person was found by a court of competent jurisdiction in a
civil action or by the Commission to have violated any Federal or State
securities law, and the judgment in such civil action or finding by the
Commission has not been subsequently reversed, suspended, or vacated.
(6) Such person was found by a court of competent jurisdiction in a
civil action or by the Commodity Futures Trading Commission to have
violated any Federal commodities law, and the judgment in such civil
action or finding by the Commodity Futures Trading Commission has not
been subsequently reversed, suspended or vacated.
1. For purposes of computing the five year period referred to in this
paragraph, the date of a reportable event shall be deemed the date on
which the final order, judgment or decree was entered, or the date on
which any rights of appeal from preliminary orders, judgments, or
decrees have lapsed. With respect to bankruptcy petitions, the
computation date shall be the date of filing for uncontested petitions
or the date upon which approval of a contested petition became final.
2. If any event specified in this paragraph (f) has occurred and
information in regard thereto is omitted on the grounds that it is not
material, the registrant may furnish to the Commission, at time of
filing (or at the time preliminary materials are filed, or ten days
before definitive materials are filed in preliminary filing is not
required, pursuant to Rule 14a-6 or 14c-5 under the Exchange Act (
240.14a-6 and 240-14c-5 of this chapter)), as supplemental information
and not as part of the registration statement, report, or proxy or
information statement, materials to which the omission relates, a
description of the event and a statement of the reasons for the omission
of information in regard thereto.
3. The registrant is permitted to explain any mitigating
circumstances associated with events reported pursuant to this
paragraph.
4. If the information called for by this paragraph (f) is being
presented in a proxy or information statement, no information need be
given respecting any director whose term of office as a director will
not continue after the meeting to which the statement relates.
(g) Promoters and control persons. (1) Registrants, which have not
been subject to the reporting requirements of section 13(a) or 15(d) of
the Exchange Act for the twelve months immediately prior to the filing
of the registration statement, report, or statement to which this Item
is applicable, and which were organized within the last five years,
shall describe with respect to any promoter, any of the events
enumerated in paragraphs (f)(1) through (f)(6) of this section that
occurred during the past five years and that are material to a voting or
investment decision.
(2) Registrants, which have not been subject to the reporting
requirements of section 13(a) or 15(d) of the Exchange Act for the
twelve months immediately prior to the filing of the registration
statement, report, or statement to which this Item is applicable, shall
describe with respect to any control person, any of the events
enumerated in paragraphs (f)(1) through (f)(6) of this section that
occurred during the past five years and that are material to a voting or
investment decision.
1. Instructions 1. through 3. to paragraph (f) shall apply to this
paragraph (g).
2. Paragraph (g) shall not apply to any subsidiary of a registrant
which has been reporting pursuant to Section 13(a) or 15(d) of the
Exchange Act for the twelve months immediately prior to the filing of
the registration statement, report or statement.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85, secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90 Stat. 57; secs. 12, 13, 14,
15(d), 23(a), 48 Stat. 892, 895, 901; secs. 1, 3, 8, 49 Stat. 1375,
1377, 1379; sec 203(a), 49 Stat. 704; sec. 202, 68 Stat. 686; secs.
3, 4, 5, 6, 78 Stat. 565-568, 569, 570-574; secs. 1, 2, 3, 82 Stat.
454, 455; secs. 28(c), 1, 2, 3-5, 84 Stat. 1435, 1497; sec. 105(b),
88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat. 117, 118, 119, 155; sec.
308(b), 90 Stat. 57; secs. 202, 203, 204, 81 Stat. 1494, 1498, 1499,
1500; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 78l, 78m, 78n, 78o(d),
78w(a))
(47 FR 11401, Mar. 16, 1982, as amended at 47 FR 55665, Dec. 13,
1982; 48 FR 19874, May 3, 1983; 49 FR 32763, Aug. 16, 1984; 52 FR
48982, Dec. 29, 1987)
17 CFR 229.402 (Item 402) Executive compensation.
(a)(1) Cash compensation. Furnish, in substantially the tabular form
specified, all cash compensation paid to the following persons through
the latest practicable date for services rendered in all capacities to
the registrant and its subsidiaries during the registrant's last fiscal
year:
(i) Five executive officers. Each of the registrant's five most
highly compensated executive officers whose cash compensation required
to be disclosed pursuant to this paragraph exceeds $60,000, naming each
such person; and
(ii) All executive officers. All executive officers as a group,
stating the number of persons in the group without naming them.
(2) Bonuses and deferred compensation. The Cash Compensation Table
also shall include:
(i) All cash bonuses to be paid to the named individuals and group
for services rendered in all capacities to the registrant and its
subsidiaries during the last fiscal year unless such amounts have not
been allocated at such time as compensation disclosure is filed;
(ii) All cash bonuses paid during the last fiscal year for services
rendered in all capacities to the registrant and its subsidiaries in a
previous fiscal year, less any amount relating to the same contract,
agreement, plan or arrangement included in the Cash Compensation Table
for a prior fiscal year and less any amount that would have been so
included but for the fact that the individual was not included in the
Cash Compensation Table, as a named individual or as a member of the
group, for such prior fiscal year; and
(iii) All compensation that would have been paid in cash to the named
individuals and group for services rendered in all capacities to the
registrant and its subsidiaries during the last fiscal year but for the
fact that the payment of such compensation was deferred.
1. Cash Compensation Table. (A) The registrant may include
additional columns in the Cash Compensation Table. For example, the
registrant may segregate cash bonuses and deferred compensation from
cash salaries and fees.
(B) Amounts deferred pursuant to Section 401(k) of the Internal
Revenue Code are to be included in paragraph (a) for the fiscal year
during which they are accrued.
(C) Registrants need list in Column (B) of the Cash Compensation
Table only those principal capacities served by each of the identified
individuals. The cash compensation disclosed, however, must include
cash compensation received in all capacities.
2. Persons covered. (A) Paragraph (a) of this section applies to any
individual who was an executive officer of the registrant at any time
during the last fiscal year. Information need not be disclosed,
however, for any portion of the period during which such individual was
not an executive officer of the registrant, provided a statement to that
effect is made. With respect to an individual who becomes for the first
time an individual whose compensation is to be reported in the Cash
Compensation Table, it is not necessary to report compensation that
would have been reported in the Table had the individual been included
in prior years.
(B) Registrants should be flexible in determining which individuals
should be named in the Cash Compensation Table in order to ensure that
disclosure is made with respect to key policy making members of
management. Consideration should be given to the question of whether an
individual's level of executive responsibilities, viewed in conjunction
with such individual's actual level of cash compensation is such that
the registrant reasonably may conclude that the person is among its five
most highly compensated, key policy making executive officers. Under
this standard, it may be appropriate, in certain circumstances, to
include an executive officer of a subsidiary in the Cash Compensation
Table.
(C) In certain circumstances, it may be appropriate for a registrant
not to include in the Cash Compensation Table an individual who is one
of the registrant's five most highly compensated executive officers.
Among the factors that should be considered in determining not to name
an individual are: (i) The distribution or accrual of an unusually
large amount of cash compensation (such as a bonus or commission) that
is not part of a recurring arrangement and is unlikely to continue; and
(ii) the payment of amounts of cash compensation relating to overseas
assignments that may be attributed predominantly to such assignments.
(b)(1) Compensation pursuant to plans. Describe briefly all plans,
pursuant to which cash or non-cash compensation was paid or distributed
during the last fiscal year, or is proposed to be paid or distributed in
the future, to the named individuals and group specified in paragraph
(a) of this section. Information need not be given with respect to any
group life, health, hospitalization, medical reimbursement or relocation
plans that do not discriminate, in scope, terms, or operation, in favor
of officers or directors of the registrant and that are available
generally to all salaried employees. The description of each plan shall
include the following, except that the description of any defined
benefit or actuarial plans need not include the information specified in
paragraphs (b)(1)(vi) and (b)(1)(vii) of this section and the
description of any stock option and stock appreciation right plan need
not include the information specified in paragraph (b)(1)(vii) of this
section:
(i) A summary of how the plan operates and who is covered by the
plan;
(ii) The criteria used to determine amounts payable, including any
performance formula or measure;
(iii) The time periods over which the measurement of benefits will be
determined;
(iv) Payment schedules;
(v) Any recent material amendments to the plan;
(vi) Amounts paid or distributed pursuant to the plan to the named
individuals and the group during the last fiscal year less any amount
relating to the same plan which previously has been disclosed as accrued
pursuant to paragraph (b)(1)(vii) of this section or a predecessor
provision; and
(vii) Amounts accrued pursuant to the plan for the accounts of the
named individuals and group during the last fiscal year, the
distribution or unconditional vesting of which are not subject to future
events.
(2) Pension Table. As to defined benefit and actuarial plans, other
than any defined benefit or actuarial plan under which benefits are not
determined primarily by final compensation (or average final
compensation) and years of service, include, as the payment schedule
required by paragraph (b)(1)(iv) of this section, a separate Pension
Table showing estimated annual benefits payable upon retirement
(including amounts attributable to any defined benefit supplementary or
excess pension award plans) to persons in specified compensation and
years-of-service classifications. In addition, in furnishing the
information required by paragraphs (b)(1) (i)-(v) of this section,
include:
(i) The compensation covered by the plan, including the relationship
of such covered compensation to the compensation reported in the Cash
Compensation Table pursuant to paragraph (a) of this section, and state
the current compensation covered by the plan for any individuals named
in the Cash Compensation Table whose covered compensation differs
substantially (by more than 10 percent) from that set forth in the Cash
Compensation Table;
(ii) The estimated credited years of service for each of the
individuals named in the Cash Compensation Table; and
(iii) A statement as to the basis upon which benefits are computed
(e.g., straight life annuity amounts) and whether or not the benefits
listed in the Pension Table are subject to any deduction for Social
Security or other offset amounts.
(3) Alternative pension plan disclosure. In furnishing the
information required by paragraphs (b)(1) (i)-(v) of this section with
respect to defined benefit or actuarial plans under which benefits are
not determined primarily by final compensation (or average final
compensation) and years of service, include:
(i) The formula by which benefits are determined; and
(ii) The estimated annual benefits payable upon retirement at normal
retirement age for each of the individuals named in the Cash
Compensation Table pursuant to paragraph (a) of this section.
(4) Stock option and stock appreciation right plans. In addition to
providing the information required by paragraphs (b)(1) (i)-(vi) of this
section, furnish:
(i) With respect to stock options granted during the last fiscal
year: (A) the title and aggregate amount of securities subject to
options; (B) the average per share exercise price; and (C) if such
option exercise price was less than 100 percent of the market value of
the security on the date of grant, such fact and the market price on
such date. The title and aggregate amount of such securities subject to
options, if any, which are in tandem with stock appreciation rights
should be set forth separately.
(ii) With respect to the exercise or realization of options or stock
appreciation rights held in tandem with options, state the net value of
securities (market value less any exercise price) or cash realized
during the last fiscal year.
(iii) With respect to plans pursuant to which stock appreciation
rights not in tandem with options were granted during the last fiscal
year: (A) the number of rights granted; and (B) the average per share
base price thereof.
(iv) With respect to the exercise or realization of stock
appreciation rights not in tandem with options, state the net value of
the shares (market price) or cash realized during the last fiscal year.
1. Format. With the exception of those pension plans disclosed
pursuant to paragraph 402(b)(2), the registrant may use either a
narrative, tabular or other format or combination of formats provided
the information so disclosed is clear and understandable. Disclosure
required by paragraph (b)(2), pertaining to certain defined benefit and
actuarial plans, is required to be presented in the Pension Table format
set forth in that paragraph.
2. Cash paid pursuant to plans. The cash compensation paid pursuant
to a plan need not be disclosed as amounts paid or distributed pursuant
to paragraph (b)(1)(vi) of this section if such compensation was
included in the Cash Compensation Table pursuant to paragraph (a) of
this section and a statement to that effect is made. Similarly, the
cash compensation deferred under a deferred compensation plan need not
be disclosed as amounts accrued pursuant to paragraph (b)(1)(vii) of
this section if such compensation was included in the Cash Compensation
Table and a statement to that effect is made.
3. Definition of ''plan''. The term ''plan'' includes, but is not
limited to the following: any plan, contract, authorization or
arrangement, whether or not set forth in any formal documents, pursuant
to which the following may be received: cash, stock, restricted stock,
phantom stock, stock options, stock appreciation rights, stock options
in tandem with stock appreciation rights, warrants, convertible
securities, performance units and performance shares. A plan may be
applicable to one person.
4. Pension levels. Compensation set forth in the Pension Table
pursuant to paragraph (b)(2) of this section shall allow for reasonable
increases in existing compensation levels; alternatively, registrants
may present as the highest compensation level in the Pension Table an
amount equal to 120 percent of the amount of covered compensation of the
most highly compensated individual named in the Cash Compensation Table
pursuant to paragraph (a) of this section.
5. Definition of ''normal retirement age''. The term ''normal
retirement age'' means normal retirement age as defined in a pension or
similar plan or, if not defined therein, the earliest time at which a
participant may retire without any benefit reduction because of age.
(c) Other compensation. Describe, stating amounts, any other
compensation not covered by paragraphs (a) or (b) of this section that
was paid or distributed during the last fiscal year to the named
individuals and group specified in paragraph (a) of this section unless:
(1) With respect to any named individual, the aggregate amount of
such other compensation is the lesser of $25,000 or 10 percent of the
compensation reported in the Cash Compensation Table for such person
pursuant to paragraph (a) of this section, or
(2) With respect to the group, the aggregate amount of such other
compensation is the lesser of $25,000 times the number of persons in the
group or 10 percent of the compensation reported in the Cash
Compensation Table for the group pursuant to paragraph (a) of this
section and a statement to that effect is made.
1. Scope. Compensation to be disclosed pursuant to this paragraph may
include, amoung other things: (a) personal benefits or; (b) securities
or property that were paid or distributed other than pursuant to a plan.
It does not, in any event, include cash, which is to be disclosed
pursuant to either paragraph (a) or (b).
2. Threshold. If the amount of other compensation for a named
individual or the group exceeds the established thresholds, the entire
amount of such other compensation must be disclosed pursuant to this
paragraph.
3. Valuation. Compensation within paragraph (c) shall be valued on
the basis of the registrant's and subsidiaries' aggregate incremental
cost.
(d) Compensation of directors -- (1) Standard arrangements. Describe
any standard arrangement, stating amounts, pursuant to which directors
of the registrant are compensated for all services as a director,
including any additional amounts payable for committee participation or
special assignments.
(2) Other arrangements. Describe any other arrangements pursuant to
which any director of the registrant was compensated during the
registrant's last fiscal year for services as a director, stating the
amount paid and the name of the director.
(e) Termination of employment and change of control arrangement.
Describe any compensatory plan or arrangement, including payments to be
received from the registrant, with respect to any individual named in
the Cash Compensation Table pursuant to paragraph (a) of this section
for the latest or next preceding fiscal year if such a plan or
arrangement results or will result from the resignation, retirement or
any other termination of such individual's employment with the
registrant and its subsidiaries or from a change in control of the
registrant to or a change in the individual's responsibilities following
a change in control and the amount involved, including all periodic
payments or installments, exceeds $60,000.
1. Foreign private issuers. A foreign private issuer may respond to
all of Item 402 by indicating the aggregate payments or benefits paid or
to be paid to all executive officers as a group unless such registrants
disclose to their security holders or otherwise make public the
information specified in this section for individually named executive
officers, in which case such information also shall be disclosed.
2. Transactions with third parties. This section includes
transactions between the registrant and a third party where the primary
purpose of the transaction is to furnish compensation to any named
individual or the group specified in paragraph (a) of this section. No
information need be given in response to any paragraph of this section
as to any such transaction if the transaction has been reported in
response to Item 404 of Regulation S-K ( 229.404 of this chapter).
3. Exclusions. No information need be given pursuant to this Item
with respect to interest on deferred compensation provided that the rate
of interest does not exceed prevailing market interest rates either:
(1) At the time the interest is accrued or (2) at the time the plan
pursuant to which the compensation is deferred was established.
Similarly, dividends awarded on restricted stock need not be disclosed
provided that the restricted stock is not of a particular class
available only to certain employees on a discriminatory basis.
(48 FR 44473, Sept. 29, 1983, as amended at 56 FR 30053, July 1,
1991)
17 CFR 229.403 (Item 403) Security ownership of certain beneficial
owners and management.
(a) Security ownership of certain beneficial owners. Furnish the
following information, as of the most recent practicable date,
substantially in the tabular form indicated, with respect to any person
(including any ''group'' as that term is used in section 13(d)(3) of the
Exchange Act) who is known to the registrant to be the beneficial owner
of more than five percent of any class of the registrant's voting
securities. The address given in column (2) may be a business, mailing
or residence address. Show in column (3) the total number of shares
beneficially owned and in column (4) the percentage of class so owned.
Of the number of shares shown in column (3), indicate by footnote or
otherwise the amount known to be shares with respect to which such
listed beneficial owner has the right to acquire beneficial ownership,
as specified in Rule 13d-3(d)(1) under the Exchange Act (
240.13d-3(d)(1) of this chapter).
(b) Security ownership of management. Furnish the following
information, as of the most recent practicable date, in substantially
the tabular form indicated, as to each class of equity securities of the
registrant or any of its parents or subsidiaries other than directors'
qualifying shares, beneficially owned by all directors and nominees,
naming them, and directors and officers of the registrant as a group,
without naming them. Show in column (3) the total number of shares
beneficially owned and in column (4) the percent of class so owned. Of
the number of shares shown in column (3), indicate, by footnote or
otherwise, the amount of shares with respect to which such persons have
the right to acquire beneficial ownership as specified in Rule
13d-3(d)(1) under the Exchange Act.
(c) Changes in control. Describe any arrangements, known to the
registrant, including any pledge by any person of securities of the
registrant or any of its parents, the operation of which may at a
subsequent date result in a change in control of the registrant.
1. The percentages are to be calculated on the basis of the amount of
outstanding securities, excluding securities held by or for the account
of the registrant or its subsidiaries, plus securities deemed
outstanding pursuant to Rule 13d-3(d)(1) under the Exchange Act 17 (CFR
240.13d-3(d)(1)). For purposes of paragraph (b), if the percentage of
shares beneficially owned by any director or nominee, or by all
directors and officers of the registrant as a group, does not exceed one
percent of the class so owned, the registrant may, in lieu of furnishing
a precise percentage, indicate this fact by means of an asterisk and
explanatory footnote or other similar means.
2. For the purposes of this Item, beneficial ownership shall be
determined in accordance with Rule 13d-3 under the Exchange Act (
240.13d-3 of this chapter). Include such additional subcolumns or other
appropriate explanation of column (3) necessary to reflect amounts as to
which the beneficial owner has (A) sole voting power, (B) shared voting
power, (C) sole investment power, or (D) shared investment power.
3. The registrant shall be deemed to know the contents of any
statements filed with the Commission pursuant to section 13(d) or 13(g)
of the Exchange Act. When applicable, a registrant may rely upon
information set forth in such statements unless the registrant knows or
has reason to believe that such information is not complete or accurate
or that a statement or amendment should have been filed and was not.
4. For purposes of furnishing information pursuant to paragraph (a)
of this Item, the registrant may indicate the source and date of such
information.
5. Where more than one beneficial owner is known to be listed for the
same securities, appropriate disclosure should be made to avoid
confusion. For purposes of paragraph (b), in computing the aggregate
number of shares owned by directors and officers of the registrant as a
group, the same shares shall not be counted more than once.
6. Paragraph (c) of this Item does not require a description of
ordinary default provisions contained in the charter, trust indentures
or other governing instruments relating to securities of the registrant.
7. Where the holder(s) of voting securities reported pursuant to
paragraph (a) hold more than five percent of any class of voting
securities of the registrant pursuant to any voting trust or similar
agreement, state the title of such securities, the amount held or to be
held pursuant to the trust or agreement (if not clear from the table)
and the duration of the agreement. Give the names and addresses of the
voting trustees and outline briefly their voting rights and other powers
under the trust or agreement.
(47 FR 11401, Mar. 16, 1982, as amended at 47 FR 55665, Dec. 13,
1982; 51 FR 42056, Nov. 20, 1986)
17 CFR 229.404 (Item 404) Certain relationships and related
transactions.
(a) Transactions with management and others. Describe briefly any
transaction, or series of similar transactions, since the beginning of
the registrant's last fiscal year, or any currently proposed
transaction, or series of similar transactions, to which the registrant
or any of its subsidiaries was or is to be a party, in which the amount
involved exceeds $60,000 and in which any of the following persons had,
or will have, a direct or indirect material interest, naming such person
and indicating the person's relationship to the registrant, the nature
of such person's interest in the transaction(s), the amount of such
transaction(s) and, where practicable, the amount of such person's
interest in the transaction(s):
(1) Any director or executive officer of the registrant;
(2) Any nominee for election as a director;
(3) Any security holder who is known to the registrant to own of
record or beneficially more than five percent of any class of the
registrant's voting securities; and
(4) Any member of the immediate family of any of the foregoing
persons.
1. The materiality of any interest is to be determined on the basis
of the significance of the information to investors in light of all the
circumstances of the particular case. The importance of the interest to
the person having the interest, the relationship of the parties to the
transaction with each other and the amount involved in the transactions
are among the factors to be considered in determining the significance
of the information to investors.
2. For purposes of paragraph (a), a person's immediate family shall
include such person's spouse; parents; children; siblings; mothers
and fathers-in-law; sons and daughters-in-law; and brothers and
sisters-in-law.
3. In computing the amount involved in the transaction or series of
similar transactions, include all periodic installments in the case of
any lease or other agreement providing for periodic payments or
installments.
4. The amount of the interest of any person specified in paragraphs
(a) (1) through (4) shall be computed without regard to the amount of
the profit or loss involved in the transaction(s).
5. In describing any transaction involving the purchase or sale of
assets by or to the registrant or any of its subsidiaries, otherwise
than in the ordinary course of business, state the cost of the assets to
the purchaser and, if acquired by the seller within two years prior to
the transaction, the cost thereof to the seller. Indicate the principle
followed in determining the registrant's purchase or sale price and the
name of the person making such determination.
6. Information shall be furnished in answer to paragraph (a) with
respect to transactions that involve remuneration from the registrant or
its subsidiaries, directly or indirectly, to any of the persons
specified in paragraphs (a) (1) through (4) for services in any capacity
unless the interest of such person arises solely from the ownership
individually and in the aggregate of less than ten percent of any class
of equity securities of another corporation furnishing the services to
the registrant or its subsidiaries.
7. No information need be given in answer to paragraph (a) as to any
transactions where:
A. The rates or charges involved in the transaction are determined by
competitive bids, or the transaction involves the rendering of services
as a common or contract carrier, or public utility, at rates or charges
fixed in conformity with law or governmental authority;
B. The transaction involves services as a bank depositary of funds,
transfer agent, registrar, trustee under a trust indenture, or similar
services; or
C. The interest of the person specified in paragraphs (a) (1) through
(4) arises solely from the ownership of securities of the registrant and
such person receives no extra or special benefit not shared on a pro
rata basis.
8. Paragraph (a) requires disclosure of indirect, as well as direct,
material interests in transactions. A person who has a position or
relationship with a firm, corporation, or other entity that engages in a
transaction with the registrant or its subsidiaries may have an indirect
interest in such transaction by reason of such position or relationship.
Such an interest, however, shall not be deemed ''material'' within the
meaning of paragraph (a) where:
A. The interest arises only: (i) From such person's position as a
director of another corporation or organization which is a party to the
transaction; or (ii) from the direct or indirect ownership by such
person and all other persons specified in paragraphs (a) (1) through
(4), in the aggregate, of less than a ten percent equity interest in
another person (other than a partnership) which is a party to the
transaction; or (iii) from both such position and ownership;
B. The interest arises only from such person's position as a limited
partner in a partnership in which the person and all other persons
specified in paragraphs (a) (1) through (4) have an interest of less
than ten percent; or
C. The interest of such person arises solely from the holding of an
equity interest (including a limited partnership interest, but excluding
a general partnership interest) or a creditor interest in another person
that is a party to the transaction with the registrant or any of its
subsidiaries, and the transaction is not material to such other person.
9. There may be situations where, although these instrucions do not
expressly authorize nondisclosure, the interest of a person specified in
paragraphs (a) (1) through (4) in a particular transaction or series of
transactions is not a direct or indirect material interest. In that
case, information regarding such interest and transaction is not
required to be disclosed in response to this paragraph.
(b) Certain business relationships. Describe any of the following
relationships regarding directors or nominees for director that exist,
or have existed during the registrant's last fiscal year, indicating the
identity of the entity with which the registrant has such a
relationship, the name of the nominee or director affiliated with such
entity and the nature of such nominee's or director's affiliation, the
relationship between such entity and the registrant and the amount of
the business done between the registrant and the entity during the
registrant's last full fiscal year or proposed to be done during the
registrant's current fiscal year:
(1) If the nominee or director is, or during the last fiscal year has
been, an executive officer of, or owns, or during the last fiscal year
has owned, of record or beneficially in excess of ten percent equity
interest in, any business or professional entity that has made during
the registrant's last full fiscal year, or proposes to make during the
registrant's current fiscal year, payments to the registrant or its
subsidiaries for property or services in excess of five percent of (i)
the registrant's consolidated gross revenues for its last full fiscal
year, or (ii) the other entity's consolidated gross revenues for its
last full fiscal year;
(2) If the nominee or director is, or during the last fiscal year has
been, an executive officer of, or owns, or during the last fiscal year
has owned, of record or beneficially in excess of ten percent equity
interest in, any business or professional entity to which the registrant
or its subsidiaries has made during the registrant's last full fiscal
year, or proposes to make during the registrant's current fiscal year,
payments for property or services in excess of five percent of (i) the
registrant's consolidated gross revenues for its last full fiscal year,
or (ii) the other entity's consolidated gross revenues for its last full
fiscal year;
(3) If the nominee or director is, or during the last fiscal year has
been, an executive officer of, or owns, or during the last fiscal year
has owned, of record or beneficially in excess of ten percent equity
interest in, any business or professional entity to which the registrant
or its subsidiaries was indebted at the end of the registrant's last
full fiscal year in an aggregate amount in excess of five percent of the
registrant's total consolidated assets at the end of such fiscal year;
(4) If the nominee or director is, or during the last fiscal year has
been, a member of, or of counsel to, a law firm that the issuer has
retained during the last fiscal year or proposes to retain during the
current fiscal year; Provided, however, that the dollar amount of fees
paid to a law firm by the registrant need not be disclosed if such
amount does not exceed five percent of the law firm's gross revenues for
that firm's last full fiscal year;
(5) If the nominee or director is, or during the last fiscal year has
been, a partner or executive officer of any investment banking firm that
has performed services for the registrant, other than as a participating
underwriter in a syndicate, during the last fiscal year or that the
registrant proposes to have perform services during the current year;
Provided, however, That the dollar amount of compensation received by an
investment banking firm need not be disclosed if such amount does not
exceed five percent of the investment banking firm's consolidated gross
revenues for that firm's last full fiscal year; or
(6) Any other relationships that the registrant is aware of between
the nominee or director and the registrant that are substantially
similar in nature and scope to those relationships listed in paragraphs
(b) (1) through (5).
1. In order to determine whether payments or indebtedness exceed five
percent of the consolidated gross revenues of any entity, other than the
registrant, it is appropriate to rely on information provided by the
nominee or director.
2. In calculating payments for property and services the following
may be excluded:
A. Payments where the rates or charges involved in the transaction
are determined by competitive bids, or the transaction involves the
rendering of services as a common contract carrier, or public utility,
at rates or charges fixed in conformity with law or governmental
authority;
B. Payments that arise solely from the ownership of securities of the
registrant and no extra or special benefit not shared on a pro rata
basis by all holders of the class of securities is received; or
C. Payments made or received by subsidiaries other than significant
subsidiaries as defined in Rule 1-02(v) of Regulation S-X ( 210.1-02(v)
of this chapter), provided that all such subsidiaries making or
receiving payments, when considered in the aggregate as a single
subsidiary, would not constitute a significant subsidiary as defined in
Rule 1-02(v).
3. In calculating indebtedness the following may be excluded:
A. Debt securities that have been publicly offered, admitted to
trading on a national securities exchange, or quoted on the automated
quotation system of a registered securities association;
B. Amounts due for purchases subject to the usual trade terms; or
C. Indebtedness incurred by subsidiaries other than significant
subsidiaries as defined in Rule 1-02(v) of Regulation S-X ( 210.1-02(v)
of this chapter), provided that all such subsidiaries incurring
indebtedness, when considered in the aggregate as a single subsidiary,
would not constitute a significant subsidiary as defined in Rule
1-02(v).
4. No information called for by paragraph (b) need be given
respecting any director who is no longer a director at the time of
filing the registration statement or report containing such disclosure.
If such information is being presented in a proxy or information
statement, no information need be given respecting any director whose
term of office as a director will not continue after the meeting to
which the statement relates.
(c) Indebtedness of management. If any of the following persons has
been indebted to the registrant or its subsidiaries at any time since
the beginning of the registrant's last fiscal year in an amount in
excess of $60,000, indicate the name of such person, the nature of the
person's relationship by reason of which such person's indebtedness is
required to be described, the largest aggregate amount of indebtedness
outstanding at any time during such period, the nature of the
indebtedness and of the transaction in which it was incurred, the amount
thereof outstanding as of the latest practicable date and the rate of
interest paid or charged thereon:
(1) Any director or executive officer of the registrant;
(2) Any nominee for election as a director;
(3) Any member of the immediate family of any of the persons
specified in paragraph (c) (1) or (2);
(4) Any corporation or organization (other than the registrant or a
majority-owned subsidiary of the registrant) of which any of the persons
specified in paragraph (c) (1) or (2) is an executive officer or partner
or is, directly or indirectly, the beneficial owner of ten percent or
more of any class of equity securities; and
(5) Any trust or other estate in which any of the persons specified
in paragraph (c) (1) or (2) has a substantial beneficial interest or as
to which such person serves as a trustee or in a similar capacity.
1. For purposes of paragraph (c), the members of a person's immediate
family are those persons specified in Instruction 2 to Item 404(a).
2. Exclude from the determination of the amount of indebtedness all
amounts due from the particular person for purchases subject to usual
trade terms, for ordinary travel and expense payments and for other
transactions in the ordinary course of business.
3. If the lender is a bank, savings and loan association, or
broker-dealer extending credit under Federal Reserve Regulation T (12
CFR Part 220) and the loans are not disclosed as nonaccrual, past due,
restructured or potential problems (see Item III.C. 1. and 2. of
Industry Guide 3, Statistical Disclosure by Bank Holding Companies),
disclosure may consist of a statement, if such is the case, that the
loans to such persons (A) were made in the ordinary course of business,
(B) were made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable
transactions with other persons, and (C) did not involve more than the
normal risk of collectibility or present other unfavorable features.
4. If any indebtedness required to be described arose under section
16(b) of the Exchange Act and has not been discharged by payment, state
the amount of any profit realized, that such profit will inure to the
benefit of the registrant or its subsidiaries and whether suit will be
brought or other steps taken to recover such profit. If, in the opinion
of counsel, a question reasonably exists as to the recoverability of
such profit, it will suffice to state all facts necessary to describe
the transactions, including the prices and number of shares involved.
(d) Transactions with promoters. Registrants that have been
organized within the past five years and that are filing a registration
statement on Form S-1 under the Securities Act ( 239.11 of this chapter)
or on Form 10 under the Exchange Act ( 239.210 of this chapter) shall:
(1) State the names of the promoters, the nature and amount of
anything of value (including money, property, contracts, options or
rights of any kind) received or to be received by each promoter,
directly or indirectly, from the registrant and the nature and amount of
any assets, services or other consideration therefore received or to be
received by the registrant; and
(2) As to any assets acquired or to be acquired by the registrant
from a promoter, state the amount at which the assets were acquired or
are to be acquired and the principle followed or to be followed in
determining such amount and identify the persons making the
determination and their relationship, if any, with the registrant or any
promoter. If the assets were acquired by the promoter within two years
prior to their transfer to the registrant, also state the cost thereof
to the promoter.
1. No information need be given in response to any paragraph of Item
404 as to any compensation or other transaction reported in response to
any other paragraph of Item 404 or to Item 402 of Regulation S-K (
229.402 of this chapter) or as to any compensation with respect to which
information may be omitted pursuant to Item 402.
2. If the information called for by Item 404 is being presented in a
registration statement filed pursuant to the Securities Act or the
Exchange Act, information shall be given for the periods specified in
the Item and, in addition, for the two fiscal years preceding the
registrant's last fiscal year.
3. A foreign private issuer may respond to Item 404 only to the
extent that the registrant discloses to its security holders or
otherwise makes public the information specified in that Item.
(47 FR 55665, Dec. 13, 1982, as amended at 48 FR 37612, Aug. 19,
1983; 48 FR 44475, Sept. 29, 1983; 56 FR 30053, 30054, July 1, 1991)
17 CFR 229.405 (Item 405) Compliance with section 16(a) of the Exchange
Act.
Every registrant having a class of equity securities registered
pursuant to section 12 of the Exchange Act (15 U.S.C. 78l), every
closed-end investment company registered under the Investment Company
Act of 1940 (15 U.S.C. 80a-1 et seq.), and every holding company
registered pursuant to the Public Utility Holding Company Act of 1935
(15 U.S.C. 79a et seq.) shall:
(a) Based solely upon a review of Forms 3 ( 249.103) and 4 ( 249.104)
and amendments thereto furnished to the registrant pursuant to
240.16a-3(e) during its most recent fiscal year and Forms 5 and
amendments thereto ( 249.105) furnished to the registrant with respect
to its most recent fiscal year, and any written representation referred
to in paragraph (b)(2)(i) of this Item.
(1) Identify each person who, at any time during the fiscal year, was
a director, officer, beneficial owner of more than ten percent of any
class of equity securities of the registrant registered pursuant to
section 12 of the Exchange Act, or any other person subject to section
16 of the Exchange Act with respect to the registrant because of the
requirements of section 30 of the Investment Company Act or section 17
of the Public Utility Holding Company Act (reporting person) that failed
to file on a timely basis, as disclosed in the above Forms, reports
required by section 16(a) of the Exchange Act during the most recent
fiscal year or prior fiscal years.
(2) For each such person, set forth the number of late reports, the
number of transactions that were not reported on a timely basis, and any
known failure to file a required Form.
Note: The disclosure requirement is based on a review of the forms
submitted to the registrant during and with respect to its most recent
fiscal year, as specified above. Accordingly, a failure to file timely
need only be disclosed once. For example, if in the most recently
concluded fiscal year a reporting person filed a Form 4 disclosing a
transaction that took place in the prior fiscal year, and should have
been reported in that year, the registrant should disclose that late
filing and transaction pursuant to this Item 405 with respect to the
most recently concluded fiscal year, but not in material filed with
respect to subsequent years.
(b) With respect to the disclosure required by paragraph (a) of this
Item:
(1) A form received by the registrant within three calendar days of
the required filing date may be presumed to have been filed with the
Commission by the required filing date.
(2) If the registrant (i) receives a written representation from the
reporting person that no Form 5 is required; and (ii) maintains the
representation for two years, making a copy available to the Commission
or its staff upon request, the registrant need not identify such
reporting person pursuant to paragraph (a) of this Item as having failed
to file a Form 5 with respect to that fiscal year.
(56 FR 7265, Feb. 21, 1991)
17 CFR 229.405 Subpart 229.500 -- Registration Statement and Prospectus Provisions
17 CFR 229.501 (Item 501) Forepart of registration statement and
outside front cover page of prospectus.
(a) Facing page. The facing page of every registration statement
shall set forth the approximate date of proposed sale to the public and,
where appropriate, the delaying amendment legend as set forth in
Regulation C.
(b) Cross-reference sheet. Immediately following such facing page,
there shall be included a cross reference sheet showing the location in
the prospectus of the information required to be included in the
prospectus in response to the items of the form. If any such item is
inapplicable, or the answer thereto is in the negative and is omitted
from the prospectus, a statement to that effect shall be made in the
cross reference sheet. The cross reference sheet need not be included
in the prospectus.
(c) Outside front cover page of prospectus. The following
information (to the extent appropriate) shall appear on the outside
front cover page of the prospectus with appropriate cross references to
more detailed discussion elsewhere in the prospectus:
(1) Name of the registrant and, in the case of a foreign private
registrant, an English translation of such name. Where the name of the
registrant is the same as that of another well-known company and it
appears likely that the registrant may be confused with the other
company, or where the name indicates a line of business in which the
registrant is not engaged or is engaged to only a limited extent, a
statement may be necessary to prevent the confusion of the two companies
or to remove a misleading inference that may be drawn from the name as
to the nature of the registrant's business. In some circumstances,
however, disclosure may not be sufficient, and a change of name may be
the only way to preclude confusion of the companies or misleading
inferences from registrant's name. Such disclosure or name change is
not necessary in the case of an established registrant that over a
period of years has changed the general character of its business and
the investing public is aware generally of the change and the character
of the registrant's present business;
(2) Title and amount of securities offered and a brief description of
such securities (unless not necessary to indicate the material terms of
the securities, as in the case of an issue of common stock with full
voting rights and the dividend and liquidation rights usually associated
with common stock);
(3) Where any of the securities to be registered are to be offered
for the account of security holders, a statement to that effect;
(4) Cross reference, where applicable to the discussion in the
prospectus prescribed by Item 503 of Regulation S-K ( 229.503), of
material risks in connection with the purchase of the securities,
printed in bold-face roman type at least as high as ten-point modern
type and at least two points leaded, add '';''
(5) The following statement in capital letters printed in bold-face
roman type at least as high as ten-point modern type and at least two
points leaded:
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE;
(6) In the case of any preliminary prospectus that is circulated by
registrants not subject to the reporting provisions of section 13(a) or
15(d) of the Exchange Act immediately prior to the filing of the
registration statement, a bona fide estimate of the range of the maximum
offering price and maximum number of shares or other units of securities
to be offered, or a bona fide estimate of the principal amount of debt
securities to be offered;
(7) Where securities are to be offered for cash, other than on a
registration statement on Form S-8 ( 239.16b of this chapter), the
information called for by the following table, in substantially the
tabular form indicated, as to all securities to be registered
(estimated, if necessary):
(8) In the case of any prospectus to be used before the effective
date of the registration statement (or, in the case of any prospectus
that omits information as permitted by Rule 430A under the Securities
Act ( 230.430A of this chapter), prior to the determination of the
initial public offering price), in red ink, the caption ''Subject to
Completion,'' the date of its issuance, and the following statement
printed in type as large as that generally used in the body of the
prospectus:
Information contained herein is subject to completion or amendment.
A registration statement relating to these securities has been filed
with the Securities and Exchange Commission. These securities may not
be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of these securities in any State in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.
(9) Any legend or information required by the law of any State in
which the securities are to be offered; and
(10) The date of the prospectus.
1. The term commissions'' is defined in paragraph (17) of Schedule A
of the Securities Act. Only commissions paid by the registrant or
selling security holders in cash are to be included in the table.
Commissions paid by other persons, and other consideration to the
underwriters, shall be set forth in a note to the table with a reference
thereto in the second column of the table. Any finder's fee or similar
payments shall be disclosed appropriately.
2. If it is impracticable to state the price to the public, the
method by which it is to be determined shall be explained. In addition,
if the securities are to be offered at the market, or if the offering
price is to be determined by a formula related to market prices,
indicate the market involved and the market price as of the latest
practicable date.
3. If the securities are to be offered on a best efforts basis, set
forth the termination date of the offering, any minimum required
purchase and any arrangements to place the funds received in an escrow,
trust, or similar arrangement. If no such arrangements have been made,
so state. The following tabular presentation of the total maximum and
minimum securities to be offered shall be combined with the table
required above:
4. Where an underwriter has received an over-allotment option,
maximum-minimum information shall be presented in the price table, or in
a note thereto, based on the purchase of all or none of the shares
subject to the option. The terms of the option may be described in
response to Item 508 of Regulation S-K ( 229.508) rather than on the
cover page of the prospectus.
5. The total of other expenses of issuance and distribution'' called
for by Item 511 of Regulation S-K ( 229.511), stated separately for the
registrant and for the selling security holders, if any, shall be set
forth in a note to the proceeds column of the distribution table.
(47 FR 11401, Mar. 16, 1982, as amended at 52 FR 21260, June 5, 1987;
52 FR 30145, Aug. 13, 1987)
17 CFR 229.502 (Item 502) Inside front and outside back cover pages of
prospectus.
The following information, to the extent applicable, shall appear on
the inside front cover page of the prospectus (except that the
information required by paragraphs (e) and (g) of this Item may be set
forth on the outside back cover page).
(a) Available information. Registrants subject to the reporting
requirements of section 13(a) or 15(d) of the Exchange Act immediately
prior to the filing of the registration statement shall:
(1) State that the registrant is subject to the informational
requirements of the Exchange Act and in accordance therewith files
reports and other information with the Securities and Exchange
Commission;
(2) State that reports (and where registrant is subject to sections
14(a) and 14(c) of the Exchange Act proxy and information statements)
and other information filed by the registrant can be inspected and
copied at the public reference facilities maintained by the Commission
in Washington, DC, and at certain of its Regional Offices, and state the
current address of each such facility (see 200.11(b) and 200.80(c)(1)
of this chapter), and that copies of such material can be obtained from
the Public Reference Section of the Commission, Washington, DC 20549 at
prescribed rates; and
(3) Name any national securities exchange on which the registrant's
securities are listed and state that reports (and where registrant is
subject to sections 14(a) and 14(c) of the Exchange Act proxy and
information statements), and other information concerning the registrant
can be inspected at such exchanges.
(b) Reports to security holders. Where a registrant may not be
required to deliver an annual report to security holders (or holders of
American depository receipts) pursuant to section 14 of the Exchange Act
or stock exchange requirements, describe briefly the nature and
frequency of reports that will be given to such holders in such event,
specifying whether or not such reports will contain financial
information that has been examined and reported upon, with an opinion
expressed ''by'', an independent public or certified public accountant,
and, in the case of the reports of a foreign private registrant that
will not contain financial information prepared in accordance with
United States generally accepted accounting principles, state whether
the report will include a reconciliation of such information with such
accounting principles.
(c) Incorporation by reference. Where any document or part thereof
is incorporated by reference in the prospectus but not delivered
therewith, include an undertaking to provide without charge to each
person, including any beneficial owner, to whom a prospectus is
delivered, upon written or oral request of such person, a copy of any
and all of the information that has been incorporated by reference in
the prospectus (not including exhibits to the information that is
incorporated by reference unless such exhibits are specifically
incorporated by reference into the information that the prospectus
incorporates), and the address (including title or department) and
telephone number to which such a request is to be directed.
(d) Stabilization. (1) If the registrant or any of the underwriters
knows or has reason to believe that there is an intention to over-allot
or that the price of any security may be stabilized to facilitate the
offering of the registered securities, set forth a statement in
substantially the following form, subject to appropriate modification
where circumstances require. Such statement shall be in capital
letters, printed in bold-face roman type at least as large as ten-point
modern type and at least two points leaded:
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF
(IDENTIFY EACH CLASS OF SECURITIES IN WHICH SUCH TRANSACTIONS MAY BE
EFFECTED) AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON (IDENTIFY EACH
EXCHANGE ON WHICH STABILIZING TRANSACTIONS MAY BE EFFECTED; IF NONE,
OMIT THIS SENTENCE.) SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED
AT ANY TIME.
(2) If the stabilizing began prior to the effective date of the
registration statement, set forth the amount of securities bought, the
prices at which they were bought and the period within which they were
bought. In the event that Rule 430A under the Securities Act ( 230.430A
of this chapter) is used, the prospectus filed pursuant to Rule 424(b) (
230.424(b) of this chapter) or included in a post-effective amendment
must include information as to stabilizing transactions effected prior
to the determination of the public offering price set forth in such
prospectus.
(3) If the securities being registered are to be offered to existing
security holders pursuant to warrants or rights and any securities not
taken by security holders are to be reoffered to the public after the
expiration of the rights offering period, there shall be set forth, by
supplement or otherwise, in the prospectus used in connection with such
reoffering:
(i) The amount of securities bought in stabilization activities
during the rights offering period and the price or range of prices at
which such securities were bought,
(ii) The amount of the offered securities subscribed for during such
period,
(iii) The amount of the offered securities subscribed for by the
underwriters during such period,
(iv) The amount of the offered securities sold during such period by
the underwriters and the price, or range of prices, at which such
securities were sold, and
(v) The amount of the offered securities to be reoffered to the
public and the public offering price.
(e) Delivery of prospectuses by dealers. The legend below shall be
set forth inserting the expiration date of the period prescribed by
section 4(3) of the Securities Act and Rule 174 thereunder ( 230.174 of
this chapter) except that this legend need not be included if, pursuant
to Rule 174, dealers are not required to deliver a prospectus, or if the
exemption provided by section 4(3) of the Securities Act is not
applicable because of the provisions of section 24(d) of the Investment
Company Act. If such expiration date is not known on the effective date
of the registration statement it shall be included in the prospectus,
copies of which are required to be filed pursuant to Rule 424(b) under
the Securities Act ( 230.424(b) of this chapter). The following legend
shall be printed in bold-face or italic type at least as large as
eight-point modern type and at least two points leaded:
Until (insert date) all dealers effecting transactions in the
registered securities, whether or not participating in this
distribution, may be required to deliver a prospectus. This is in
addition to the obligation of dealers to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
(f) Enforceability of civil liabilities against foreign persons. In
the case of a foreign private registrant, a statement of how the
enforcement by investors of civil liabilities under the Federal
securities laws may be affected by the fact that the registrant is
located in a foreign country, that certain of its officers and directors
are residents of a foreign country, that certain underwriters or experts
named in the registration statement are residents of a foreign country,
and that all or a substantial portion of the assets of the registrant
and of said persons are located outside the United States. Such
disclosure need not be included on the inside front cover page of the
prospectus, if it is included, under appropriate caption, elsewhere in
the forepart of the prospectus.
(1) Such disclosure shall indicate:
(i) Whether investors will be able to effect service of process
within the United States upon such persons;
(ii) Whether investors will be able to enforce; in United States
courts, judgments against such persons judgments obtained in such courts
predicated upon the civil liability provisions of the Federal securities
laws;
(iii) Whether the appropriate foreign courts would enforce judgments
of United States courts obtained in actions against such persons
predicated upon the civil liability provisions of the Federal securities
laws; and
(iv) Whether the appropriate foreign courts would enforce, in
original actions, liabilities against such persons predicated solely
upon the Federal securities laws.
(2) If any portions of such disclosures are stated to be based upon
an opinion of counsel, such counsel shall be named in the prospectus and
an appropriate manually signed consent to the use of such name and
opinion shall be included as an exhibit to the registration statement.
(g) Table of contents. Include a reasonably detailed table of
contents showing the subject matter of the various sections or
subdivisions of the prospectus and the page number on which each such
section or subdivision begins.
(47 FR 11401, Mar. 16, 1982, as amended at 50 FR 18999, May 6, 1985;
52 FR 21260, June 5, 1987; 52 FR 30145, Aug. 13, 1987)
17 CFR 229.503 (Item 503) Summary information, risk factors and ratio
of earnings to fixed charges.
(a) Summary. Registrants should include a summary of the information
contained in the prospectus where the length or complexity of the
prospectus makes such a summary appropriate.
(b) Address and telephone number. Registrants shall include in the
forepart of the prospectus the complete mailing address, including zip
code, and the telephone number, including area code, of their principal
executive offices.
(c) Risk factors. Registrants, where appropriate, shall set forth on
the page immediately following the cover page of the prospectus (or
following the summary, if included) under an appropriate caption, a
discussion of the principal factors that make the offering speculative
or one of high risk; these factors may be due, among other things, to
such matters as an absence of an operating history of the registrant, an
absence of profitable operations in recent periods, the financial
position of the registrant, the nature of the business in which the
registrant is engaged or proposes to engage, or, if common equity or
securities convertible into or exercisable for common equity are being
offered, the absence of a previous market for the registrant's common
equity.
(d) Ratio of earnings to fixed charges. The ratio of earnings to
fixed charges or the ratio of earnings to combined fixed charges and
preferred stock dividends (the ratio) should be disclosed pursuant to
the following rules and definitions:
(1)(i) Furnish in registration statements filed under the Securities
Act of 1933 (A) the ratio of earnings to fixed charges if debt
securities are being registered; or (B) the ratio of earnings to
combined fixed charges and preferred stock dividends if preferred stock
is being registered. Disclosure of both ratios is permitted in
registration statements relating to debt or preferred stock and either
ratio or both ratios may be disclosed in other filings.
(ii) The ratio shall be disclosed for the following periods:
(A) Each of the last five fiscal years of the registrant (or for the
life of the registrant and its predecessors, if less), and
(B) The latest interim period for which financial statements are
presented.
(2) The ratio shall be computed using the amounts for the enterprise
as a whole including (i) the registrant, (ii) its majority-owned
subsidiaries, whether or not consolidated, (iii) its proportionate share
of any fifty-percent-owned persons, and (iv) any income received (but
not undistributed amounts) from less-than-fifty-percent-owned persons.
(3) The term earnings shall be defined as pretax income from
continuing operations with the following adjustments:
(i) Add to pretax income the amount of fixed charges computed
pursuant to paragraph (d)(4) of this section, adjusted to exclude (A)
the amount of any interest capitalized during the period and (B) the
actual amount of any preferred stock dividend requirements of
majority-owned subsidiaries and fifty-percent-owned persons which were
included in such fixed charges amount but not deducted in the
determination of pretax income.
(ii) Only the registrant's share in the income of majority-owned
subsidiaries and the distributed income of less-than-fifty-percent-owned
persons shall be included in earnings, except that a registrant may
include the minority interest in the income of majority-owned
subsidiaries that have fixed charges.
(iii) The full amount of losses of majority-owned subsidiaries shall
be considered in the computation of earnings.
(iv) Where an investment in a less-than-fifty-percent-owned person
accounted for under the equity method results in the recognition of a
loss, such loss shall not be considered in the computation of the ratio
except where the registrant has guaranteed or otherwise undertaken,
directly or indirectly to service the debt of such person. In the
latter case, the registrant's equity in the loss shall be included in
earnings and the fixed charges shall include the interest expense
related to the guaranteed debt.
(v) Registrants other than public utilities may add to earnings the
amount of previously capitalized interest amortized during the period.
(vi) A registrant which is a rate-regulated public utility shall not
reduce fixed charges (see paragraph (d)(4) below) by any allowance for
funds used during construction, but rather, shall include any such
allowance in the determination of earnings under this paragraph.
(4)(i) The term fixed charges shall mean the total of (A) interest,
whether expensed or capitalized; (B) amortization of debt expense and
discount or premium relating to any indebtedness, whether expensed or
capitalized; (C) such portion of rental expense as can be demonstrated
to be representative of the interest factor in the particular case; and
(D) preferred stock dividend requirements of majority-owned subsidiaries
and fifty-percent-owned persons, excluding in all cases items which
would be or are eliminated in consolidation.
(ii) If the registrant is a guarantor of debt of a less than
fifty-percent-owned person or of an unaffiliated person (such as a
supplier), the amount of fixed charges associated with such debt should
not be included in the computation of the ratio unless the registrant
has been required to satisfy the guarantee or it is probable that the
registrant will be required to honor the guarantee and the amount can
reasonably be estimated. A footnote to the ratio should disclose the
existence of any such guarantee and the amount of the associated fixed
charges and state whether or not such amount is included in the
computation of the ratio.
(5) The term preferred stock shall include all types of preferred and
preference stocks.
(6) For purposes of paragraph (4)(i)(D) above and computation of the
combined ratio, the preferred stock dividend requirements shall be
increased to an amount representing the pre-tax earnings which would be
required to cover such dividend requirements. Therefore, the increased
amount=
The tax rate shall be based on the relationship of the provision for
income tax expense applicable to income from continuing operations to
the amount of pre-tax income from continuing operations.
(7) If either ratio computation indicates a less than one-to-one
coverage, state that earnings are inadequate to cover fixed charges and
disclose the dollar amount of the coverage deficiency.
(8) If the level of the registrant's ratio is maintained by its
parent, for example, in order to meet the minimum borrowing standards of
agencies of various states, or if the registrant's parent is
guaranteeing the registrant's debt securities or preferred stock, the
parent's ratio as well as the registrant's ratio shall be disclosed.
(9) A pro forma ratio shall be presented in the prospectus of any
registration statement filed to register debt or preferred stock to be
used in a refinancing if the effect of the refinancing changes the
historical ratio by ten percent or more.
(i) A refinancing is defined as the extinguishment of one or more
specific issues of dept with the proceeds from the sale of additional
debt, or the extinguishment of one or more specific issues of preferred
stock with the proceeds from the sale of additional preferred stock.
(ii) The only adjustments which shall be made to the corresponding
historical ratio are to give effect to the net increase or decrease in
interest expense or preferred stock dividends resulting from (A) the
proposed issuance of new debt or preferred stock and (B) the
corresponding retirement of any debt or preferred stock presently
outstanding (but only for the period of time outstanding) which will be
retired with the proceeds from the proposed offering. If only a portion
of the proceeds will be used to retire presently outstanding debt or
preferred stock, only a related portion of the interest or preferred
dividend should be used in the pro forma adjustment.
(iii) The pro forma ratio, if applicable, shall be presented for only
the most recent fiscal year and the latest interim period or, at the
option of the registrant, the most recent twelve months.
(10) If the registrant is a foreign private issuer, the ratio shall
be computed on the basis of the primary financial statements and, if
materially different, their reconciliations.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90 Stat. 57; secs. 12, 13,
15(d), 23(a), 48 Stat. 892, 894, 895, 901; secs. 1, 3, 8, 49 Stat.
1375, 1377, 1379; sec. 203(a), 49 Stat. 704; sec. 202, 68 Stat. 686;
secs. 3, 4, 6, 78 Stat. 565-568, 569, 570-574; secs. 1, 2, 82 Stat.
454; sec. 28(c), 84 Stat. 1435; secs. 1, 2, 84 Stat. 1497; sec.
105(b), 88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat. 117, 118, 119, 155;
sec. 308(b), 90 Stat. 57; secs. 202, 203, 204, 91 Stat. 1494, 1498,
1499, 1500; secs. 8, 30, 31(c), 38(a), 54 Stat. 803, 836, 838, 841;
74 Stat. 201; 84 Stat. 1415; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a),
78l, 78m, 78o(d), 78w(a), 80a-8, 80a-29, 80a-30(c), 80a-37(a))
(47 FR 11401, Mar. 16, 1982, as amended at 47 FR 54769, Dec. 6, 1982;
49 FR 19874, May 3, 1983)
17 CFR 229.504 (Item 504) Use of proceeds.
State the principal purposes for which the net proceeds to the
registrant from the securities to be offered are intended to be used and
the approximate amount intended to be used for each such purpose. Where
registrant has no current specific plan for the proceeds, or a
significant portion thereof, the registrant shall so state and discuss
the principal reasons for the offering.
1. Where less than all the securities to be offered may be sold and
more than one use is listed for the proceeds, indicate the order of
priority of such purposes and discuss the registrant's plans if
substantially less than the maximum proceeds are obtained. Such
discussion need not be included if underwriting arrangements with
respect to such securities are such that, if any securities are sold to
the public, it reasonably can be expected that the actual proceeds will
not be substantially less than the aggregate proceeds to the registrant
shown pursuant to Item 501 of Regulation S-K ( 229.501).
2. Details of proposed expenditures need not be given; for example,
there need be furnished only a brief outline of any program of
construction or addition of equipment. Consideration should be given as
to the need to include a discussion of certain matters addressed in the
discussion and analysis of registrant's financial condition and results
of operations, such as liquidity and capital expenditures.
3. If any material amounts of other funds are necessary to accomplish
the specified purposes for which the proceeds are to be obtained, state
the amounts and sources of such other funds needed for each such
specified purpose and the sources thereof.
4. If any material part of the proceeds is to be used to discharge
indebtedness, set forth the interest rate and maturity of such
indebtedness. If the indebtedness to be discharged was incurred within
one year, describe the use of the proceeds of such indebtedness other
than short-term borrowings used for working capital.
5. If any material amount of the proceeds is to be used to acquire
assets, otherwise than in the ordinary course of business, describe
briefly and state the cost of the assets and, where such assets are to
be acquired from affiliates of the registrant or their associates, give
the names of the persons from whom they are to be acquired and set forth
the principle followed in determining the cost to the registrant.
6. Where the registrant indicates that the proceeds may, or will, be
used to finance acquisitions of other businesses, the identity of such
businesses, if known, or, if not known, the nature of the businesses to
be sought, the status of any negotiations with respect to the
acquisition, and a brief description of such business shall be included.
Where, however, pro forma financial statements reflecting such
acquisition are not required by Regulation S-X to be included, in the
registration statement, the possible terms of any transaction, the
identification of the parties thereto or the nature of the business
sought need not be disclosed, to the extent that the registrant
reasonably determines that public disclosure of such information would
jeopardize the acquisition. Where Regulation S-X (17 CFR 210) would
require financial statements of the business to be acquired to be
included, the description of the business to be acquired shall be more
detailed.
7. The registrant may reserve the right to change the use of
proceeds, provided that such reservation is due to certain contingencies
that are discussed specifically and the alternatives to such use in that
event are indicated.
17 CFR 229.505 (Item 505) Determination of offering price.
(a) Common equity. Where common equity is being registered for which
there is no established public trading market for purposes of paragraph
(a) of Item 201 of Regulation S-K ( 229.201(a)) or where there is a
material disparity between the offering price of the common equity being
registered and the market price of outstanding shares of the same class,
describe the various factors considered in determining such offering
price.
(b) Warrants, rights and convertible securities. Where warrants,
rights or convertible securities exercisable for common equity for which
there is no established public trading market for purposes of paragraph
(a) of Item 201 of Regulation S-K ( 229.201(a)) are being registered,
describe the various factors considered in determining their exercise or
conversion price.
17 CFR 229.506 (Item 506) Dilution.
Where common equity securities are being registered and there is
substantial disparity between the public offering price and the
effective cash cost to officers, directors, promoters and affiliated
persons of common equity acquired by them in transactions during the
past five years, or which they have the right to acquire, and the
registrant is not subject to the reporting requirements of section 13(a)
or 15(d) of the Exchange Act immediately prior to filing of the
registration statement, there shall be included a comparison of the
public contribution under the proposed public offering and the effective
cash contribution of such persons. In such cases, and in other
instances where common equity securities are being registered by a
registrant that has had losses in each of its last three fiscal years
and there is a material dilution of the purchasers' equity interest, the
following shall be disclosed:
(a) The net tangible book value per share before and after the
distribution;
(b) The amount of the increase in such net tangible book value per
share attributable to the cash payments made by purchasers of the shares
being offered; and
(c) The amount of the immediate dilution from the public offering
price which will be absorbed by such purchasers.
17 CFR 229.507 (Item 507) Selling security holders.
If any of the securities to be registered are to be offered for the
account of security holders, name each such security holder, indicate
the nature of any position, office, or other material relationship which
the selling security holder has had within the past three years with the
registrant or any of its predecessors or affiliates, and state the
amount of securities of the class owned by such security holder prior to
the offering, the amount to be offered for the security holder's
account, the amount and (if one percent or more) the percentage of the
class to be owned by such security holder after completion of the
offering.
17 CFR 229.508 (Item 508) Plan of distribution.
(a) Underwriters and underwriting obligation. If the securities are
to be offered through underwriters, name the principal underwriters, and
state the respective amounts underwritten. Identify each such
underwriter having a material relationship with the registrant and state
the nature of the relationship. State briefly the nature of the
obligation of the underwriter(s) to take the securities.
All that is required as to the nature of the underwriters' obligation
is whether the underwriters are or will be committed to take and to pay
for all of the securities if any are taken, or whether it is merely an
agency or the type of best efforts arrangement under which the
underwriters are required to take and to pay for only such securities as
they may sell to the public. Conditions precedent to the underwriters'
taking the securities, including market-outs, need not be described
except in the case of an agency or best efforts arrangement.
(b) New underwriters. Where securities being registered are those of
a registrant that has not previously been required to file reports
pursuant to section 13(a) or 15(d) of the Exchange Act, or where a
prospectus is required to include reference on its cover page to
material risks pursuant to Item 501 of Regulation S-K ( 229.501), and
any one or more of the managing underwriter(s) (or where there are no
managing underwriters, a majority of the principal underwriters) has
been organized, reactivated, or first registered as a broker-dealer
within the past three years, these facts concerning such underwriter(s)
shall be disclosed in the prospectus together with, where applicable,
the disclosures that the principal business function of such
underwriter(s) will be to sell the securities to be registered, or that
the promoters of the registrant have a material relationship with such
underwriter(s). Sufficient details shall be given to allow full
appreciation of such underwriter(s) experience and its relationship with
the registrant, promoters and their controlling persons.
(c) Other distributions. Outline briefly the plan of distribution of
any securities to be registered that are to be offered otherwise than
through underwriters.
(1) If any securities are to be offered pursuant to a dividend or
interest reinvestment plan the terms of which provide for the purchase
of some securities on the market, state whether the registrant or the
participant pays fees, commissions, and expenses incurred in connection
with the plan. If the participant will pay such fees, commissions and
expenses, state the anticipated cost to participants by transaction or
other convenient reference.
(2) If the securities are to be offered through the selling efforts
of brokers or dealers, describe the plan of distribution and the terms
of any agreement, arrangement, or understanding entered into with
broker(s) or dealer(s) prior to the effective date of the registration
statement, including volume limitations on sales, parties to the
agreement and the conditions under which the agreement may be
terminated. If known, identify the broker(s) or dealer(s) which will
participate in the offering and state the amount to be offered through
each.
(3) If any of the securities being registered are to be offered
otherwise than for cash, state briefly the general purposes of the
distribution, the basis upon which the securities are to be offered, the
amount of compensation and other expenses of distribution, and by whom
they are to be borne. If the distribution is to be made pursuant to a
plan of acquisition, reorganization, readjustment or succession,
describe briefly the general effect of the plan and state when it became
or is to become operative. As to any material amount of assets to be
acquired under the plan, furnish information corresponding to that
required by Instruction 5 of Item 504 of Regulation S-K ( 229.504).
(d) Offerings on exchange. If the securities are to be offered on an
exchange, indicate the exchange. If the registered securities are to be
offered in connection with the writing of exchange-traded call options,
describe briefly such transactions.
(e) Underwriters' compensation. To the extent not set forth on the
cover page of the prospectus, describe the discounts and commissions to
be allowed or paid to the underwriters, and all other items that would
be deemed by the National Association of Securities Dealers to
constitute underwriting compensation for purposes of the Association's
Rule of Fair Practice.
(f) Underwriter's representative on board of directors. Describe any
arrangement whereby the underwriter has the right to designate or
nominate a member or members of the board of directors of the
registrant. The registrant shall disclose the identity of any director
so designated or nominated, and indicate whether or not a person so
designated or nominated, or allowed to be designated or nominated by the
underwriter is or may be a director, officer, partner, employee or
affiliate of the underwriter.
(g) Indemnification of underwriters. If the underwriting agreement
provides for indemnification by the registrant of the underwriters or
their controlling persons against any liability arising under the
Securities Act, furnish a brief description of such indemnification
provisions.
(h) Dealers' compensation. State briefly the discounts and
commissions to be allowed or paid to dealers, including all cash,
securities, contracts or other considerations to be received by any
dealer in connection with the sale of the securities. If any dealers
are to act in the capacity of sub-underwriters and are to be allowed or
paid any additional discounts or commissions for acting in such
capacity, a general statement to that effect will suffice without giving
the additional amounts to be sold.
(i) Finders. Identify any finder and, if applicable, describe the
nature of any material relationship between such finder and the
registrant, its officers, directors, principal stockholders, finders or
promoters or the principal underwriter(s), or if there is a managing
underwriter(s), the managing underwriter(s), (including, in each case,
affiliates or associates thereof).
(j) Discretionary accounts. If the registrant was not, immediately
prior to the filing of the registration statement, subject to the
requirements of section 13(a) or 15(d) of the Exchange Act, identify any
principal underwriter that intends to sell to any accounts over which it
exercises discretionary authority and include an estimate of the amount
of securities so intended to be sold. The response to this paragraph
shall be contained in a pre-effective amendment which shall be
circulated if the information is not available when the registration
statement is filed.
17 CFR 229.509 (Item 509) Interests of named experts and counsel.
If (a) any expert named in the registration statement as having
prepared or certified any part thereof (or is named as having prepared
or certified a report or valuation for use in connection with the
registration statement), or (b) counsel for the registrant, underwriters
or selling security holders named in the prospectus as having given an
opinion upon the validity of the securities being registered or upon
other legal matters in connection with the registration or offering of
such securities, was employed for such purpose on a contingent basis, or
at the time of such preparation, certification or opinion or at any time
thereafter, through the date of effectiveness of the registration
statement or that part of the registration statement to which such
preparation, certification or opinion relates, had, or is to receive in
connection with the offering, a substantial interest, direct or
indirect, in the registrant or any of its parents or subsidiaries or was
connected with the registrant or any of its parents or subsidiaries as a
promoter, managing underwriter (or any principal underwriter, if there
are no managing underwriters) voting trustee, director, officer, or
employee, furnish a brief statement of the nature of such contingent
basis, interest, or connection.
1. The interest of an expert (other than an accountant) or counsel
will not be deemed substantial and need not be disclosed if the
interest, including the fair market value of all securities of the
registrant owned, received and to be received, or subject to options,
warrants or rights received or to be received by the expert or counsel
does not exceed $50,000. For the purpose of this Instruction, the term
expert or counsel includes the firm, corporation, partnership or other
entity, if any, by which such expert or counsel is employed or of which
he is a member or of counsel to and all attorneys in the case of
counsel, and all nonclerical personnel in the case of named experts,
participating in such matter on behalf of such firm, corporation,
partnership or entity.
2. Accountants, providing a report on the financial statements,
presented or incorporated by reference in the registration statement,
should note 210.2-01 of Regulation S-X (17 CFR 210) for the
Commission's requirements regarding ''Qualification of Accountants''
which discusses disqualifying interests.
17 CFR 229.510 (Item 510) Disclosure of Commission position on
indemnification for Securities Act liabilities.
In addition to the disclosure prescribed by Item 702 of Regulation
S-K ( 229.702), if the undertaking required by paragraph (h) of Item 512
of Regulation S-K ( 229.512) is not required to be included in the
registration statement because acceleration of the effective date of the
registration statement is not being requested, and if waivers have not
been obtained comparable to those specified in paragraph (h), a brief
description of the indemnification provisions relating to directors,
officers and controlling persons of the registrant against liability
arising under the Securities Act (including any provision of the
underwriting agreement which relates to indemnification of the
underwriter or its controlling persons by the registrant against such
liabilities where a director, officer or controlling person of the
registrant is such an underwriter or controlling person thereof or a
member of any firm which is such an underwriter) shall be included in
the prospectus, together with a statement in substantially the following
form:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
persons controlling the registrant pursuant to the foregoing provisions,
the registrant has been informed that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is therefore unenforceable.
(47 FR 11401, Mar. 16, 1982, as amended at 56 FR 48103, Sept. 24,
1991)
17 CFR 229.511 (Item 511) Other expenses of issuance and distribution.
Furnish a reasonably itemized statement of all expenses in connection
with the issuance and distribution of the securities to be registered,
other than underwriting discounts and commissions. If any of the
securities to be registered are to be offered for the account of
security holders, indicate the portion of such expenses to be borne by
such security holder.
Insofar as practicable, registration fees, Federal taxes, States
taxes and fees, trustees' and transfer agents' fees, costs of printing
and engraving, and legal, accounting, and engineering fees shall be
itemized separately. Include as a separate item any premium paid by the
registrant or any selling security holder on any policy obtained in
connection with the offering and sale of the securities being registered
which insures or indemnifies directors or officers against any
liabilities they may incur in connection with the registration,
offering, or sale of such securities. The information may be given as
subject to future contingencies. If the amounts of any items are not
known, estimates, identified as such, shall be given.
17 CFR 229.512 (Item 512) Undertakings.
Include each of the following undertakings that is applicable to the
offering being registered.
(a) Rule 415 Offering. 1 Include the following if the securities are
registered pursuant to Rule 415 under the Securities Act ( 230.415 of
this chapter):
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any propectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, That paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 ( 239.13 of this
chapter) Form S-8 ( 239.16b of this chapter), and the information
required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Securities Exhange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any
financial statements required by 3-19 of Regulation S-X ( 210.3-19 of
this chapter) at the start of any delayed offering or throughout a
continuous offering.
(b) Filings incorporating subsequent Exchange Act documents by
reference. Include the following if the registration statement
incorporates by reference any Exchange Act document filed subsequent to
the effective date of the registration statement:
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Warrants and rights offerings. Include the following, with
appropriate modifications to suit the particular case, if the securities
to be registered are to be offered to existing security holders pursuant
to warrants or rights and any securities not taken by security holders
are to be reoffered to the public:
The undersigned registrant hereby undertakes to supplement the
prospectus, after the expiration of the subscription period, to set
forth the results of the subscription offer, the transactions by the
underwriters during the subscription period, the amount of unsubscribed
securities to be purchased by the underwriters, and the terms of any
subsequent reoffering thereof. If any public offering by the
underwriters is to be made on terms differing from those set forth on
the cover page of the prospectus, a post-effective amendment will be
filed to set forth the terms of such offering.
(d) Competitive bids. Include the following, with appropriate
modifications to suit the particular case, if the securities to be
registered are to be offered at competitive bidding:
The undersigned registrant hereby undertakes (1) to use its best
efforts to distribute prior to the opening of bids, to prospective
bidders, underwriters, and dealers, a reasonable number of copies of a
prospectus which at that time meets the requirements of section 10(a) of
the Act, and relating to the securities offered at competitive bidding,
as contained in the registration statement, together with any
supplements thereto, and (2) to file an amendment to the registration
statement reflecting the results of bidding, the terms of the reoffering
and related matters to the extent required by the applicable form, not
later than the first use, authorized by the issuer after the opening of
bids, of a prospectus relating to the securities offered at competitive
bidding, unless no further public offering of such securities by the
issuer and no reoffering of such securities by the purchasers is
proposed to be made.
(e) Incorporated annual and quarterly reports. Include the following
if the registration statement specifically incorporates by reference
(other than by indirect incorporation by reference through a Form 10-K (
249.310 of this chapter) report) in the prospectus all or any part of
the annual report to security holders meeting the requirements of Rule
14a-3 or Rule 14c-3 under the Exchange Act) 240.14a-3 and 240.14c-3 of
this chapter):
The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus
is sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to
and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are
not set forth in the prospectus, to deliver, or cause to be delivered to
each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
(f) Equity offerings of nonreporting registrants. Include the
following if equity securities of a registrant that prior to the
offering had no obligation to file reports with the Commission pursuant
to section 13(a) or 15(d) of the Exchange Act are being registered for
sale in an underwritten offering:
The undersigned registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreements
certificates in such denominations and registered in such names as
required by the underwriter to permit prompt delivery to each purchaser.
(g) Registration on Form S-4 or F-4 of securities offered for resale.
Include the following if the securities are being registered on Form
S-4 or F-4 ( 239.25, or 34 of this chapter) in connection with a
transaction specified in paragraph (a) of Rule 145 ( 230.145 of this
chapter).
(1) The undersigned registrant hereby undertakes as follows: That
prior to any public reoffering of the securities registered hereunder
through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter
within the meaning of Rule 145(c), the issuer undertakes that such
reoffering prospectus will contain the information called for by the
applicable registration form with respect to reofferings by persons who
may be deemed underwriters, in addition to the information called for by
the other Items of the applicable form.
(2) The registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (h)(1) immediately preceding, or (ii) that
purports to meet the requirements of section 10(a)(3) of the Act and is
used in connection with an offering of securities subject to Rule 415 (
230.415 of this chapter), will be filed as a part of an amendment to the
registration statement and will not be used until such amendment is
effective, and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(h) Request for acceleration of effective date or filing of
registration statement on Form S-8. Include the following if
acceleration is requested of the effective date of the registration
statement pursuant to Rule 461 under the Securities Act ( 230.461 of
this chapter), or if the registration statement is filed on Form S-8,
and:
(1) Any provision or arrangement exists whereby the registrant may
indemnify a director, officer or controlling person of the registrant
against liabilities arising under the Securities Act, or
(2) The underwriting agreement contains a provision whereby the
registrant indemnifies the underwriter or controlling persons of the
underwriter against such liabilities and a director, officer or
controlling person of the registrant is such an underwriter or
controlling person thereof or a member of any firm which is such an
underwriter, and
(3) The benefits of such indemnification are not waived by such
persons:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
(i) Include the following in a registration statement permitted by
Rule 430A under the Securities Act of 1933 ( 230.430A of this chapter):
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(j) Qualification of trust indentures under the Trust Indenture Act
of 1939 for delayed offerings. Include the following if the registrant
intends to rely on section 305(b)(2) of the Trust Indenture Act of 1939
for determining the eligibility of the trustee under indentures for
securities to be issued, offered, or sold on a delayed basis by or on
behalf of the registrant:
The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act
under subsection (a) of section 310 of the Trust Indenture Act (''Act'')
in accordance with the rules and regulations prescribed by the
Commission under section 305(b)(2) of the Act.
(47 FR 11401, Mar. 16, 1982, as amended at 47 FR 39803, Sept. 10,
1982; 47 FR 54769, Dec. 6, 1982; 50 FR 18999, May 6, 1985; 52 FR
21260, June 5, 1987; 52 FR 21939, June 10, 1987; 52 FR 30145, Aug.
13, 1987; 55 FR 23922, June 13, 1990; 56 FR 22319, May 15, 1991)
1Paragraph (a) reflects proposals made in Securities Act Release No.
6334 (Aug. 6, 1981).
17 CFR 229.512 Subpart 229.600 -- Exhibits
17 CFR 229.601 (Item 601) Exhibits.
(a) Exhibits and index required. (1) Subject to Rule 411(c) (
230.411(c) of this chapter) under the Securities Act and Rule 12b-32 (
240.12b-32 of this chapter) under the Exchange Act regarding
incorporation of exhibits by reference, the exhibits required by in the
exhibit table shall be filed as indicated, as part of the registration
statement or report.
(2) Each registration statement or report shall contain an exhibit
index, which shall precede immediately the exhibits filed with such
registration statement. For convenient reference, each exhibit shall be
listed in the exhibit index according to the number assigned to it in
the exhibit table. The exhibit index shall indicate, by handwritten,
typed, printed, or other legible form of notation in the manually signed
original registration statement or report, the page number in the
sequential numbering system where such exhibit can be found. Where
exhibits are incorporated by reference, this fact shall be noted in the
exhibit index referred to in the preceding sentence. Further, the first
page of the manually signed registration statement shall list the page
in the filing where the exhibit index is located. For a description of
each of the exhibits included in the exhibit table, see paragraph (b) of
this section.
(3) This Item applies only to the forms specified in the exhibit
table. With regard to forms not listed in that table, reference shall
be made to the appropriate form for the specific exhibit filing
requirements applicable thereto.
1. If an exhibit to a registration statement (other than an opinion
or consent), filed in preliminary form, has been changed only (A) to
insert information as to interest, dividend or conversion rates,
redemption or conversion prices, purchase or offering prices,
underwriters' or dealers' commissions, names, addresses or participation
of underwriters or similar matters, which information appears elsewhere
in an amendment to the registration statement or a prospectus filed
pursuant to Rule 424(b) under the Securities Act ( 230.424(b) of this
chapter), or (B) to correct typographical errors, insert signatures or
make other similar immaterial changes, then, notwithstanding any
contrary requirement of any rule or form, the registrant need not refile
such exhibit as so amended. Any such incomplete exhibit may not,
however, be incorporated by reference in any subsequent filing under any
Act administered by the Commission.
2. In any case where two or more indentures, contracts, franchises,
or other documents required to be filed as exhibits are substantially
identical in all material respects except as to the parties thereto, the
dates of execution, or other details, the registrant need file a copy of
only one of such documents, with a schedule identifying the other
documents omitted and setting forth the material details in which such
documents differ from the document a copy of which is filed. The
Commission may at any time in its discretion require filing of copies of
any documents so omitted.
3. Only copies, rather than originals, need be filed of each exhibit
required except as otherwise specifically noted.
1. The exhibit table indicates those documents that must be filed as
exhibits to the respective forms listed.
2. The ''X'' designation indicates the documents which are required
to be filed with each form even if filed previously with another
document, Provided, However, that such previously filed documents may be
incorporated by reference to satisfy the filing requirements.
3. The number used in the far left column of the table refers to the
appropriate subsection in paragraph (b) where a description of the
exhibit can be found. Whenever necessary, alphabetical or numerical
subparts may be used.
(b) Description of exhibits. Set forth below is a description of
each document listed in the exhibit tables.
(1) Underwriting agreement. Each underwriting contract or agreement
with a principal underwriter pursuant to which the securities being
registered are to be distributed; if the terms of such documents have
not been determined, the proposed forms thereof. Such agreement may be
filed as an exhibit to a report on Form 8-K ( 249.308 of this chapter)
which is incorporated by reference into a registration statement
subsequent to its effectiveness.
(2) Plan of acquisition, reorganization, arrangement, liquidation or
succession. Any material plan of acquisition, disposition,
reorganization, readjustment, succession, liquidation or arrangement and
any amendments thereto described in the statement or report. Schedules
(or similar attachments) to these exhibits shall not be filed unless
such schedules contain information which is material to an investment
decision and which is not otherwise disclosed in the agreement or the
disclosure document. The plan filed shall contain a list briefly
identifying the contents of all omitted schedules, together with an
agreement to furnish supplementally a copy of any omitted schedule to
the Commission upon request.
(3) Articles of incorporation and by-laws. The articles of
incorporation and by-laws of the registrant or instruments corresponding
thereto as currently in effect and any amendments thereto. Whenever
amendments to the articles or by-laws of the registrant are filed, there
shall also be filed a complete copy of the articles or by-laws as
amended. Where it is impracticable for the registrant to file a charter
amendment authorizing new securities with the appropriate state
authority prior to the effective date of the registration statement
registering such securities, the registrant may file as an exhibit to
the registration statement the form of amendment to be filed with the
state authority; and in such a case, if material changes are made after
the copy is filed, the registrant must also file the changed copy.
(4) Instruments defining the rights of security holders, including
identures. (i) All instruments defining the rights of holders of the
equity or debt securities being registered including, where applicable,
the relevant portion of the articles of incorporation or by-laws of the
registrant.
(ii) Except as set forth in paragraph (b)(4)(iii) of this section for
filings on Forms S-1, S-4, S-11, S-14 and F-4 under the Securities Act (
239.1, and 25, 18, 23 and 34 of this chapter) and Forms 10 and 10-K (
249.210 and 310 of this chapter) under the Exchange Act all instruments
defining the rights of holders of long-term debt of the registrant and
its consolidated subsidiaries and for any of its unconsolidated
subsidiaries for which financial statements are required to be filed.
(iii) Where the instrument defines the rights of holders of long-term
debt of the registrant and its consolidated subsidiaries and for any of
its unconsolidated subsidiaries for which financial statements are
required to be filed, there need not be filed:
(A) Any instrument with respect to long-term debt not being
registered if the total amount of securities authorized thereunder does
not exceed 10 percent of the total assets of the registrant and its
subsidiaries on a consolidated basis and if there is filed an agreement
to furnish a copy of such agreement to the Commission upon request;
(B) Any instrument with respect to any class of securities if
appropriate steps to assure the redemption or retirement of such class
will be taken prior to or upon delivery by the registrant of the
securities being registered; or
(C) Copies of instruments evidencing scrip certificates for fractions
of shares.
(iv) If any of the securities being registered are, or will be,
issued under an indenture to be qualified under the Trust Indenture Act,
the copy of such indenture which is filed as an exhibit shall include or
be accompanied by:
(A) A reasonably itemized and informative table of contents; and
(B) A cross-reference sheet showing the location in the indenture of
the provisions inserted pursuant to sections 310 through 318(a)
inclusive of the Trust Indenture Act of 1939.
(v) With respect to Forms 8-K and 10-Q under the Exchange Act which
are filed and which disclose, in the text of the Form 10-Q, the interim
financial statements, or the footnotes thereto the creation of a new
class of securities or indebtedness or the modification of existing
rights of security holders, file all instruments defining the rights of
holders of these securities or indebtedness. However, there need not be
filed any instrument with respect to long-term debt not being registered
which meets the exclusion set forth above in paragraph (b)(4)(iii)(A).
Instruction. There need not be filed any instrument which defines the
rights of participants (not as security holders) pursuant to an employee
benefit plan.
(5) Opinion re legality. (i) An opinion of counsel as to the
legality of the securities being registered, indicating whether they
will, when sold, be legally issued, fully paid and non-assessable, and,
if debt securities, whether they will be binding obligations of the
registrant.
(ii) If the securities being registered are issued under a plan and
the plan is subject to the requirements of ERISA furnish either:
(A) An opinion of counsel which confirms compliance of the provisions
of the written documents constituting the plan with the requirements of
ERISA pertaining to such provisions; or
(B) A copy of the Internal Revenue Service determination letter that
the plan is qualified under section 401 of the Internal Revenue Code;
or
(iii) If the securities being registered are issued under a plan
which is subject to the requirements of ERISA and the plan has been
amended subsequent to the filing of paragraph (b)(5)(ii) (A) or (B)
above, furnish either:
(A) An opinion of counsel which confirms compliance of the amended
provisions of the plan with the requirements of ERISA pertaining to such
provisions; or
(B) A copy of the Internal Revenue Service determination letter that
the amended plan is qualified under section 401 of the Internal Revenue
Code.
Note: Attention is directed to Item 8 of Form S-8 for exemptions to
this exhibit requirement applicable to that Form.
(6) Opinion re discount on capital shares. If any discount on
capital shares is shown as a deduction from capital shares on the most
recent balance sheet being filed for the registrant, there shall be
filed a statement of the circumstances under which such discount arose
and an opinion of counsel as to the legality of the issuance of the
shares to which such discount relates. The opinion shall set forth, or
specifically refer to, any applicable constitutional and statutory
provisions and shall cite any decisions which in the opinion of counsel
are controlling.
(7) Opinion re liquidation preference. If the registrant has any
shares the preference of which upon involuntary liquidation exceeds the
par or stated value thereof, there shall be filed an opinion of counsel
as to whether there are any restrictions upon surplus by reason of such
excess and also as to any remedies available to security holders before
or after payment of any dividend that would reduce surplus to an amount
less than the amount of such excess. The opinion shall set forth, or
specifically refer to, any applicable constitutional and statutory
provisions and shall cite any decisions which, in the opinion of
counsel, are controlling.
(8) Opinion re tax matters. For filings on Form S-11 under the
Securities Act ( 239.18) or those to which Securities Act Industry Guide
5 applies, an opinion of counsel or of an independent public or
certified public accountant or, in lieu thereof, a revenue ruling from
the Internal Revenue Service, supporting the tax matters and
consequences to the shareholders as described in the filing when such
tax matters are material to the transaction for which the registration
statement is being filed. This exhibit otherwise need only be filed
with the other applicable registration forms where the tax consequences
are material to an investor and a representation as to tax consequences
is set forth in the filing. If a tax opinion is set forth in full in
the filing, an indication that such is the case may be made in lieu of
filing the otherwise required exhibit. Such tax opinions may be
conditioned or may be qualified, so long as such conditions and
qualifications are adequately described in the filing.
(9) Voting trust agreement. Any voting trust agreements and
amendments thereto.
(10) Material contracts. (i) Every contract not made in the ordinary
course of business which is material to the registrant and is to be
performed in whole or in part at or after the filing of the registration
statement or report or was entered into not more than two years before
such filing. Only contracts need be filed as to which the registrant or
subsidiary of the registrant is a party or has succeeded to a party by
assumption or assignment or in which the registrant or such subsidiary
has a beneficial interest.
(ii) If the contract is such as ordinarily accompanies the kind of
business conducted by the registrant and its subsidiaries, it will be
deemed to have been made in the ordinary course of business and need not
be filed unless it falls within one or more of the following categories,
in which case it shall be filed except where immaterial in amount or
significance:
(A) Any contract to which directors, officers, promoters, voting
trustees, security holders named in the registration statement or
report, or underwriters are parties other than contracts involving only
the purchase or sale of current assets having a determinable market
price, at such market price;
(B) Any contract upon which the registrant's business is
substantially dependent, as in the case of continuing contracts to sell
the major part of registrant's products or services or to purchase the
major part of registrant's requirements of goods, services or raw
materials or any franchise or license or other agreement to use a
patent, formula, trade secret, process or trade name upon which
registrant's business depends to a material extent;
(C) Any contract calling for the acquisition or sale of any property,
plant or equipment for a consideration exceeding 15 percent of such
fixed assets of the registrant on a consolidated basis; or
(D) Any material lease under which a part of the property described
in the registration statement or report is held by the registrant.
(iii)(A) Any management contract or any compensatory plan, contract
or arrangement, including but not limited to plans relating to options,
warrants or rights, pension, retirement or deferred compensation or
bonus, incentive or profit sharing (or if not set forth in any formal
document, a written description thereof) in which any director or any of
the five most highly compensated executive officers of the registrant
participates shall be deemed material and shall be filed; and any other
management contract or any compensatory plan, contract, or arrangement
in which any other executive officer of the registrant participates
shall be filed unless immaterial in amount or significance.
(B) Notwithstanding paragraph (b)(10)(iii)(A) above, the following
management contracts or compensatory plans, contracts or arrangements
need not be filed:
(1) Ordinary purchase and sales agency agreements.
(2) Agreements with managers of stores in a chain organization or
similar organization.
(3) Contracts providing for labor or salesmen's bonuses or payments
to a class of security holders, as such.
(4) Any compensatory plan, contract or arrangement which pursuant to
its terms is available to employees, officers or directors generally and
which in operation provides for the same method of allocation of
benefits between management and nonmanagement participants.
(5) Any compensatory plan, contract or arrangement if the registrant
is a foreign private issuer that furnishes compensatory information on
an aggregate basis as permitted by General Instruction 1 to Item 402 (
229.402) or by Item 11 of Form 20-F.
(6) Any compensatory plan, contract, or arrangement if the registrant
is a wholly owned subsidiary of a company that has a class of securities
registered pursuant to section 12 or files reports pursuant to section
15(d) of the Exchange Act and is filing a report on Form 10-K or
registering debt instruments or preferred stock which are not voting
securities on Form S-2.
Instruction. With the exception of management contracts, in order to
comply with paragraph (iii) above, registrants need only file copies of
the various compensatory plans and need not file each individual
director's or executive officer's personal agreement under the plans
unless there are particular provisions in such personal agreements whose
disclosure in an exhibit is necessary to an investor's understanding of
that individual's compensation under the plan.
(11) Statement re computation of per share earnings. A statement
setting forth in reasonable detail the computation of per share
earnings, unless the computation can be clearly determined from the
material contained in the registration statement or report. The
information with respect to the computation of per share earnings on
both primary and fully diluted basis, presented by exhibit or otherwise,
must be furnished even though the amounts of per share earnings on the
fully diluted bases are not required to be presented in the income
statement under the provisions of Accounting Principles Board Opinion
No. 15. That Opinion provides that any reduction of less than 3% need
not be considered as dilution (see footnote to paragraph 14 of the
Opinion) and that a computation on the fully diluted basis which results
in improvement of earnings per share not be taken into account (see
paragraph 40 of the Opinion).
(12) Statements re computation of ratios. A statement setting forth
in reasonable detail the computation of any ratio of earnings to fixed
charges, any ratio of earnings to combined fixed charges and preferred
stock dividends or any other ratios which appear in the registration
statement or report. See Item 503(d) of Regulation S-K ( 229.503(d)).
(13) Annual report to security holders, Form 10-Q or quarterly report
to security holders. The registrant's annual report to security holders
for its last fiscal year, its Form 10-Q (if specifically incorporated by
reference in the prospectus) or its quarterly report to security
holders, if all or a portion thereof is incorporated by reference in the
filing. Such report, except for those portions thereof which are
expressly incorporated by reference in the filing, is to be furnished
for the information of the Commission and is not to be deemed ''filed''
as part of the filing. If the financial statements in the report have
been incorporated by reference in the filing, the accountant's
certificate shall be manually signed in one copy. See Rule 411(b) (
230.411(b) of this chapter).
(14) Material foreign patents. Each material foreign patent for an
invention not covered by a United States patent. If the filing is a
registration statement and if a substantial part of the securities to be
offered or if the proceeds therefrom have been or are to be used for the
particular purposes of acquiring, developing or exploiting one or more
material foreign patents or patent rights, furnish a list showing the
number and a brief identification of each such patent or patent right.
(15) Letter re unaudited interim financial information. A letter,
where applicable, from the independent accountant which acknowledges
awareness of the use in a registration statement of a report on
unaudited interim financial information which pursuant to Rule 436(c)
under the Securities Act ( 230.436(c) of this chapter) is not considered
a part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the
meaning of sections 7 and 11 of that Act. Such letter may be filed with
the registration statement, an amendment thereto, or a report on Form
10-Q which is incorporated by reference into the registration statement.
(16) Letter re change in certifying accountant. A letter from the
registrant's former independent accountant regarding its concurrence or
disagreement with the statements made by the registrant in the current
report concerning the resignation or dismissal as the registrant's
principal accountant.
(17) Letter re director resignation. Any letter from a former
director which sets forth a description of a disagreement with the
registrant that led to the director's resignation or refusal to stand
for re-election and which requests that the matter be disclosed.
(18) Letter re change in accounting principles. Unless previously
filed, a letter from the registrant's independent accountant indicating
whether any change in accounting principles or practices followed by the
registrant, or any change in the method of applying any such accounting
principles or practices, which affected the financial statements being
filed with the Commission in the report or which is reasonably certain
to affect the financial statements of future fiscal years is to an
alternative principle which in his judgment is preferable under the
circumstances. No such letter need be filed when such change is made in
response to a standard adopted by the Financial Accounting Standards
Board that creates a new accounting principle, that expresses a
preference for an accounting principle, or that rejects a specific
accounting principle.
(19) Previously unfiled documents. (i) Any unfiled document, which
was executed or in effect during the reporting period, shall be filed if
such document would have been required to be filed as an exhibit to a
registration statement on Form 10.
(ii) Any amendment or modification to a document which was previously
filed with the Commission as an exhibit to Form 10, 10-K or 10-Q. Such
amendment or modification need not be filed where such previously filed
exhibit would not be currently required.
(20) Report furnished to security holders. If the registrant makes
available to its stockholders or otherwise publishes, within the period
prescribed for filing the report, a document or statement containing
information meeting some or all of the requirements of Part I of Form
10-Q, the information called for may be incorporated by reference to
such published document or statement provided copies thereof are
included as an exhibit to the registration statement or to Part I of the
Form 10-Q report.
(21) Other documents or statements to security holders. If the
registrant makes available to its stockholders or otherwise publishes,
within the period prescribed for filing the report, a document or
statement containing information meeting some or all of the requirements
of this form the information called for may be incorporated by reference
to such published document or statement provided copies thereof are
filed as an exhibit to the report on this form.
(22) Subsidiaries of the registrant. (i) List all subsidiaries of
the registrant, the state or other jurisdiction of incorporation or
organization of each, and the names under which such subsidiaries do
business. This list may be incorporated by reference from a document
which includes a complete and accurate list.
(ii) The names of particular subsidiaries may be omitted if the
unnamed subsidiaries, considered in the aggregate as a single
subsidiary, would not constitute a significant subsidiary as of the end
of the year covered by this report. (See the definition of
''significant subsidiary'' in Rule 1-02(v) (17 CFR 210.1-02(v)) of
Regulation S-X.) The names of consolidated wholly-owned multiple
subsidiaries carrying on the same line of business, such as chain stores
or small loan companies, may be omitted, provided the name of the
immediate parent, the line of business, the number of omitted
subsidiaries operating in the United States and the number operating in
foreign countries are given. This instruction shall not apply, however,
to banks, insurance companies, savings and loan associations or to any
subsidiary subject to regulation by another Federal agency.
(23) Published report regarding matters submitted to vote of security
holders. Published reports containing all of the information called for
by Item 4 of Part II of Form 10-Q or Item 4 of Part I of Form 10-K which
is referred to therein in lieu of providing disclosure in Form 10-Q or
10-K, which are required to be filed as exhibits by Rule 12b-23(a)(3)
under the Exchange Act ( 240.12b-23(a)(3) of this chapter).
(24) Consents of experts and counsel -- (i) Securities Act filings.
All written consents required to be filed shall be dated and manually
signed. Where the consent of an expert or counsel is contained in his
report or opinion or elsewhere in the registration statement or document
filed therewith, a reference shall be made in the index to the report,
the part of the registration statement or document or opinion,
containing the consent.
(ii) Exchange Act reports. Where the filing of a written consent is
required with respect to material incorporated by reference in a
previously filed registration statement under the Securities Act, such
consent may be filed as exhibit to the material incorporated by
reference. Such consents shall be dated and manually signed.
(25) Power of attorney. If any name is signed to the registration
statement or report pursuant to a power of attorney, manually signed
copies of such power of attorney shall be filed. Where the power of
attorney is contained elsewhere in the registration statement or
documents filed therewith a reference shall be made in the index to the
part of the registration statement or document containing such power of
attorney. In addition, if the name of any officer signing on behalf of
the registrant is signed pursuant to a power of attorney, certified
copies of a resolution of the registrant's board of directors
authorizing such signature shall also be filed.
(26) Statement of eligibility of trustee. A statement of eligibility
and qualification of each person designated to act as trustee under an
indenture to be qualified under the Trust Indenture Act of 1939. Such
statement of eligibility shall be bound separately from the other
exhibits.
(27) Invitations for competitive bids. If the registration statement
covers securities to be offered at competitive bidding, any form of
communication which is an invitation for competitive bid which will be
sent or given to any person shall be filed.
(28) Additional exhibits. (i) Any additional exhibits which the
registrant may wish to file shall be so marked as to indicate clearly
the subject matters to which they refer.
(ii) Any document (except for an exhibit) or part thereof which is
incorporated by reference in the filing and is not otherwise required to
be filed by this Item or is not a Commission filed document incorporated
by reference in a Securities Act registration statement.
(29) Information from reports furnished to state insurance regulatory
authorities. (i) If reserves for unpaid property-casualty (''P/C'')
claims and claim adjustment expenses of the registrant and its
consolidated subsidiaries, its unconsolidated subsidiaries and the
proportionate share of the registrant and the other subsidiaries in the
unpaid P/C claims and claim adjustment expenses of its 50%-or-less-owned
equity investees, taken in the aggregate after intercompany
eliminations, exceed one-half of the common stockholders' equity of the
registrant and its consolidated subsidiaries as of the beginning of the
latest fiscal year the following information should be supplied.
(ii) The information included in Schedules O and P of Annual
Statements provided to state regulatory authorities by the registrant
and/or its P/C insurance company affiliates for the latest year should
be presented in the same format and on the same statutory basis, on a
combined or consolidated basis as appropriate, separately for each of
the following:
(A) The registrant and its consolidated subsidiaries and
(B) The registrant's unconsolidated subsidiaries and
(C) Fifty-percent-or-less-owned equity investees of the registrant
and its subsidiaries
(iii) The combined or consolidated Schedules O and P of
50%-or-less-owned equity investees may be omitted if they file the same
information with the Commission as registrants in their own right, if
that fact and the name and ownership percentage of such registrants is
stated.
(iv) If ending reserves in category (A), (B), or the proportionate
share of the registrant and its other subsidiaries in paragraph
(b)(29)(C) above are less than 5% of the total ending reserves in (A),
(B), and the proportionate share of (C), that category may be omitted
and that fact so noted. If the amount of the reserves attributable to
50%-or-less-owned equity investees that file this information as
registrants in their own right exceeds 95% of the total category (C)
reserves, information for the other 50%-or-less-owned equity investees
need not be provided.
(v) Schedules O and P information need not be included for entities
that are not required to file Schedules O and P with insurance
regulatory authorities. However, the nature and extent of any such
exclusions should be clearly noted in the Exhibit.
(vi) Registrants whose fiscal year differs from the calendar year
should present Schedules O and P as of the end of the calendar year that
falls within their fiscal year.
(vii) The nature and amount of the difference between reserves for
claims and claim adjustment expenses reflected on Schedules O and P and
the aggregate P/C statutory reserves for claims and claim adjustment
expenses as of the latest calendar year end should be disclosed in a
note to those Schedules.
(47 FR 11401, Mar. 16, 1982, as amended at 48 FR 19874, May 3, 1983;
48 FR 44475, Sept. 29, 1983; 49 FR 47599, Dec. 6, 1984; 50 FR 19000,
May 6, 1985; 50 FR 49534, Dec. 3, 1985; 51 FR 42057, Nov. 20, 1986;
51 FR 45576, Dec. 19, 1986; 52 FR 21260, June 5, 1987; 55 FR 23922,
June 13, 1990; 56 FR 30054, July 1, 1991)
17 CFR 229.601 Subpart 229.700 -- Miscellaneous
17 CFR 229.701 (Item 701) Recent sales of unregistered securities.
Furnish the following information as to all securities of the
registrant sold by the registrant within the past three years which were
not registered under the Securities Act. Include sales of reacquired
securities, as well as new issues, securities issued in exchange for
property, services, or other securities, and new securities resulting
from the modification of outstanding securities.
(a) Securities sold. Give the date of sale and the title and amount
of securities sold.
(b) Underwriters and other purchasers. Give the names of the
principal underwriters, if any. As to any such securities not publicly
offered, name the persons or identify the class of persons to whom the
securities were sold.
(c) Consideration. As to securities sold for cash, state the
aggregate offering price and the aggregate underwriting discounts or
commissions. As to any securities sold otherwise than for cash, state
the nature of the transaction and the nature and aggregate amount of
consideration received by the registrant.
(d) Exemption from registration claimed. Indicate the section of the
Securities Act or the rule of the Commission under which exemption from
registration was claimed and state briefly the facts relied upon to make
the exemption available.
Instructions. 1. Information required by this Item 701 need not be
set forth as to notes, drafts, bills of exchange, or bankers'
acceptances which mature not later than one year from the date of
issuance.
2. If the sales were made in a series of transactions, the
information may be given by such totals and periods as will reasonably
convey the information required.
17 CFR 229.702 (Item 702) Indemnification of directors and officers.
State the general effect of any statute, charter provisions, by-laws,
contract or other arrangements under which any controlling persons,
director or officer of the registrant is insured or indemnified in any
manner against liability which he may incur in his capacity as such.
17 CFR 229.702 Subpart 229.800 -- List of Industry Guides
17 CFR 229.801 Securities Act industry guides.
(a) Guide 1. Disclosure of principal sources of electric and gas
revenues.
(b) Guide 2. Disclosure of oil and gas operations.
(c) Guide 3. Statistical disclosure by bank holding companies.
(d) Guide 4. Prospectuses relating to interests in oil and gas
programs.
(e) Guide 5. Preparation of registration statements relating to
interests in real estate limited partnerships.
(f) Guide 6. Disclosures concerning unpaid claims and claim
adjustment expenses of property-casualty insurance underwriters.
(Secs. 6, 7, 8, 10, 19(a) and Schedule A (25) and (26) (15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 77aa (25) and (26), Securities Act of 1933;
secs. 12, 13, 14, 15(d) and 23(a) (15 U.S.C. 78(l), 78m, 78n, 78o(d),
78w, Securities Exchange Act of 1934)
(47 FR 11401, Mar. 16, 1982, and 49 FR 47600, Dec. 6, 1984)
17 CFR 229.802 Exchange Act industry guides.
(a) Guide 1. Disclosure of principal sources of electric and gas
revenues.
(b) Guide 2. Disclosure of oil and gas operations.
(c) Guide 3. Statistical disclosure by bank holding companies.
(d) Guide 4. Disclosures concerning unpaid claims and claim
adjustment expenses of property-casualty underwriters.
(Secs. 6, 7, 8, 10, 19(a) and Schedule A (25) and (26) (15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 77aa (25) and (26), Securities Act of 1933;
secs. 12, 13, 14, 15(d) and 23(a) (15 U.S.C. 78(l), 78m, 78n, 78o(d),
78w, Securities Exchange Act of 1934)
(47 FR 11401, Mar. 16, 1982, as amended at 49 FR 47600, Dec. 6, 1984)
17 CFR 229.802 Subpart 229.900 -- Roll-Up Transactions
Source: 56 FR 57247, Nov. 8, 1991, unless otherwise noted.
17 CFR 229.901 (Item 901) Definitions.
For the purposes of this subpart 229.900:
(a) General partner means the person or persons responsible under
state law for managing or directing the management of the business and
affairs of a partnership that is the subject of a roll-up transaction
including, but not limited to, the general partner(s), board of
directors, board of trustees, or other person(s) having a fiduciary duty
to such partnership.
(b)(1) Partnership means any:
(i) Finite-life limited partnership; or
(ii) Other finite-life entity.
(2)(i) Except as provided in paragraph (b)(2)(ii) of this Item (
229.901(b)(2)(ii)), a limited partnership or other entity is
''finite-life'' if:
(A) It operates as a conduit vehicle for investors to participate in
the ownership of assets for a limited period of time; and
(B) It has as a policy or purpose distributing to investors proceeds
from the sale, financing or refinancing of assets or cash from
operations, rather than reinvesting such proceeds or cash in the
business (whether for the term of the entity or after an initial period
of time following commencement of operations).
(ii) A real estate investment trust as defined in I.R.C. section 856
is not finite-life solely because of the distribution to investors of
net income as provided by the I.R.C. if its policies or purposes do not
include the distribution to investors of proceeds from the sale,
financing or refinancing of assets, rather than the reinvestment of such
proceeds in the business.
(3) Partnership does not include any entity registered under the
Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) or any Business
Development Company as defined in section 2(a)(48) of that Act (15
U.S.C. 80a-2(a)(48)).
(c)(1) Except as provided in paragraph (c)(2) of this Item (
229.901), roll-up transaction, means any transaction or series of
transactions that directly or indirectly, through acquisition or
otherwise, involves the combination or reorganization of one or more
partnerships and either:
(i) The offer or sale of securities by a successor entity, whether
newly formed or previously existing, to one or more limited partners of
the partnerships to be combined or reorganized; or
(ii) The acquisition of the successor entity's securities by the
partnerships being combined or reorganized.
(2) The Commission, upon written request or upon its own motion, may
exempt any transaction from the definition of rollup transaction if it
finds such action to be in the public interest and consistent with the
protection of investors.
(d) Sponsor means the person proposing the roll-up transaction.
(e) Successor means the surviving entity after completion of the
roll-up transaction or the entity whose securities are being offered or
sold to, or acquired by, limited partners of the partnerships or the
limited partnerships to be combined or reorganized.
Instruction to Item 901. If a transaction is a roll-up transaction
as defined in Item 901(c) of this subpart ( 229.901(c)), the
requirements of this subpart apply to each entity proposed to be
included in the roll-up transaction, whether or not the entity is a
''partnership'' as defined in Item 901(b) of this subpart ( 229.901(b)).
17 CFR 229.902 (Item 902) Individual partnership supplements.
(a) If two or more entities are proposed to be included in the
roll-up transaction, provide the information specified in this Item (
229.902) in a separate supplement to the disclosure document for each
entity.
(b) The separate supplement required by paragraph (a) of this Item (
229.902) shall be filed as part of the registration statement, shall be
delivered with the prospectus to investors in the partnership covered
thereby, and shall include:
(1) A statement in the forepart of the supplement to the effect that:
(i) Supplements have been prepared for each partnership;
(ii) The effects of the roll-up transaction may be different for
investors in the various partnerships; and
(iii) Upon receipt of a written request by an investor or his
representative who has been so designated in writing, a copy of any
supplement will be transmitted promptly, without charge, by the general
partner or sponsor.
This statement must include the name and address of the person to
whom investors should make their request.
(2) A brief description of each material risk and effect of the
roll-up transaction, including, but not limited to, federal income tax
consequences, for investors in the partnership, with appropriate cross
references to the discussions of the risks, effects and tax consequences
of the roll-up transaction required in the principal disclosure document
pursuant to Items 904 and 915 of this subpart ( 229.904 and 229.915).
Such discussion shall address the effect of the roll-up transaction on
the partnership's financial condition and results of operations.
(3) A statement concerning whether the general partner reasonably
believes that the roll-up transaction is fair or unfair to investors in
the partnership, together with a brief discussion of the bases for such
belief, with appropriate cross references to the discussion of the
fairness of the roll-up transaction required in the principal disclosure
document pursuant to Item 910 of this subpart ( 229.910). If there are
material differences between the fairness analysis for the partnership
and for the other partnerships, such differences shall be described
briefly in the supplement.
(4) A brief, narrative description of the method of calculating the
value of the partnership and allocating interests in the successor to
the partnership, and a table showing such calculation and allocation.
Such table shall include the following information (or other information
of a comparable character necessary to a thorough understanding of the
calculation and allocation):
(i) The appraised value of each separately appraised significant
asset (as defined in Item 911(c)(5) of this subpart ( 229.911(c)(5))
held by the partnership, or, if appraisals have not been obtained for
each significant asset, the value assigned for purposes of the valuation
of the partnership to each significant asset for which an appraisal has
not been obtained;
(ii) The dollar amount of any mortgages or other similar liabilities
to which each of such assets is subject;
(iii) Cash and cash equivalent assets held by the partnership;
(iv) Other assets held by the partnership;
(v) Other liabilities of the partnership;
(vi) The value assigned to the partnership;
(vii) The value assigned to the partnership per interest held by
investors in the partnership (on an equivalent interest basis, such as
per $1,000 original investment);
(viii) The aggregate number of interests in the successor to be
allocated to the partnership and the percentage of the total interests
of the successor;
(ix) The number of interests in the successor to be allocated to
investors in the partnership for each interest held by such investors
(on an equivalent interest basis, such as per $1,000 original
investment); and
(x) The value assigned to the general partner's interest in the
partnership, and the number of interests in the successor or other
consideration to be allocated in the roll-up transaction to the general
partner for such general partnership interest or otherwise as
compensation or reimbursement for claims against or interests in the
partnership, such as foregone fees, unearned fees and for fees to be
earned on the sale or refinancing of an asset.
(5) The amounts of compensation paid, and cash distributions made, to
the general partner and its affiliates by the partnership for the last
three fiscal years and the most recently completed interim period and
the amounts that would have been paid if the compensation and
distributions structure to be in effect after the roll-up transaction
had been in effect during such period. If any proposed change(s) in the
business or operations of the successor after the roll-up transaction
would change materially the compensation and distributions that would
have been paid by the successor (e.g., if properties will be sold or
purchased after the roll-up transaction and no properties were sold or
purchased during the period covered by the table), describe such changes
and the effects thereof on the compensation and distributions to be paid
by the successor.
(6) Cash distributions made to investors during each of the last five
fiscal years and most recently completed interim period, identifying any
such distributions which represent a return of capital.
(7) An appropriate cross reference to selected financial information
concerning the partnership and the pro forma financial statements
included in the principal disclosure document in response to Item
914(b)(2) of this subpart ( 229.914(b)(2)).
17 CFR 229.903 (Item 903) Summary.
(a) Provide in the forepart of the disclosure document a clear,
concise and comprehensible summary of the roll-up transaction.
(b) The summary required by paragraph (a) of this Item ( 229.903)
shall include a summary description of each of the following items, as
well as any other material terms or consequences of the roll-up
transaction necessary to an understanding of such transaction:
(1) Each material risk and effect on investors, including, but not
limited to:
(i) Changes in the business plan, voting rights, cash distribution
policies, form of ownership interest or management compensation;
(ii) The general partner's conflicts of interest in connection with
the roll-up transaction and in connection with the successor's future
operations; and
(iii) The likelihood that securities received by investors in the
roll-up transaction will trade at prices substantially below the value
assigned to such securities in the roll-up transaction and/or the value
of the successor's assets;
(2) The material terms of the roll-up transaction, including the
valuation method used to allocate securities in the successor to
investors in the partnerships;
(3) Whether the general partner reasonably believes that the roll-up
transaction is fair or unfair to investors in each partnership,
including a brief discussion of the bases for such belief;
(4) Any opinion from an outside party concerning the fairness of the
roll-up transaction, including whether the opinion addresses the
fairness of all possible combinations of partnerships or portions of
partnerships, and contacts with any outside party concerning fairness
opinions, valuations or reports in connection with the roll-up
transaction required to be disclosed pursuant to Item 911(a)(5) of this
subpart ( 229.911(a)(5));
(5) The background of and reasons for the roll-up transaction, as
well as alternatives to the roll-up transaction described in response to
Item 908(b) of this subpart ( 229.908(b));
(6) Rights of investors to exercise dissenters' or appraisal rights
or similar rights and to obtain a list of investors in the partnership
in which the investor holds an interest; and
(7) If any affiliates of the general partner or the sponsor may
participate in the business of the successor or receive compensation
from the successor, an organizational chart showing the relationships
between the general partner, the sponsor and their affiliates.
Instruction to Item 903. The description of the material risks and
effects of the roll-up transaction required by paragraph (b)(1) of this
Item ( 229.903) must be presented prominently in the forepart of the
summary.
17 CFR 229.904 (Item 904) Risk factors and other considerations.
(a) Immediately following the summary required by Item 903 of this
subpart ( 229.903), describe in reasonable detail each material risk and
effect of the roll-up transaction on investors in each partnership,
including, but not limited to:
(1) The potential risks, adverse effects and benefits of the roll-up
transaction for investors and for the general partner, including those
which result from each matter described in response to Item 905 of this
subpart ( 229.905), with appropriate cross references to the comparative
information required by Item 905;
(2) The material risks arising from an investment in the successor;
and
(3) The likelihood that securities of the successor received by
investors in the roll-up transaction will trade in the securities
markets at a price substantially below the value assigned to such
securities in the roll-up transaction and/or the value of the assets of
the successor, and the effects on investors of such a trading market
discount.
(b) Quantify each risk or effect to the extent practicable.
(c) State whether any of such risks or effects may be different for
investors in any partnership and, if so, identify such partnership(s)
and describe such difference(s).
Instruction to Item 904. The requirement to quantify the effects of
the roll-up transaction shall include, but not be limited to:
(i) If cost savings resulting from combined administration of the
partnerships is identified as a potential benefit of the roll-up
transaction, the amount of cost savings and a comparison of such amount
to the costs of the roll-up transaction; and
(ii) If there may be a material conflict of interest of the sponsor
or general partner arising from its receipt of payments or other
consideration as a result of the roll-up transaction, the amount of such
payments and other consideration to be obtained in the roll-up
transaction and a comparison of such amounts to the amounts to which the
sponsor or general partner would be entitled without the roll-up
transaction.
17 CFR 229.905 (Item 905) comparative information.
(a)(1) Describe the voting and other rights of investors in the
successor under the successor's governing instruments and under
applicable law. Compare such rights to the voting and other rights of
investors in each partnership subject to the transaction under the
partnerships' governing instruments and under applicable law. Describe
the effects of the change(s) in such rights.
(2) Describe the duties owed by the general partner of the successor
to investors in the successor under the successor's governing
instruments and under applicable law. Compare such duties to the duties
owed by the general partner of each partnership to investors in the
partnership under the partnership's governing instruments and under
applicable law. Describe the effects of the change(s) in such duties.
(b)(1) Describe each item of compensation (including reimbursement of
expenses) payable by the successor after the roll-up transaction to the
general partner and its affiliates or to any affiliate of the successor.
Compare such compensation to the compensation currently payable to the
general partner and its affiliates by each partnership. Describe the
effects of the change(s) in compensation arrangements.
(2) Describe each instance in which cash or other distributions may
be made by the successor to the general partner and its affiliates or to
any affiliate of the successor. Compare such distributions to the
distributions currently paid or payable to the general partner and its
affiliates by each partnership. Describe the effects of the change(s)
in distribution arrangements. If distributions similar to those
currently paid or payable by any partnership to the general partner or
its affiliates will not be made by the successor, state whether or not
other compensation arrangements with the successor described in response
to paragraph (b)(1) of this Item ( 229.905) (e.g., incentive fees
payable upon sale of a property) will, in effect, replace such
distributions.
(3) Provide a table demonstrating the changes in such compensation
and distributions setting forth among other things:
(i) The actual amounts of compensation and distributions, separately
identified, paid by the partnerships on a combined basis to the general
partner and its affiliates for the partnerships' last three fiscal years
and most recently ended interim periods; and
(ii) The amounts of compensation and distributions that would have
been paid if the compensation and distributions structure to be in
effect after the roll-up transaction had been in effect during such
period.
(4) If any proposed change(s) in the business or operations of the
successor after the roll-up transaction would change materially the
compensation and distributions that would have been paid by the
successor from that shown in the table provided in response to paragraph
(b)(3)(ii) of this Item ( 229.905) (e.g., if properties will be sold or
purchased after the roll-up transaction and no properties were sold or
purchased during the period covered by the table), describe such changes
and the effects thereof on the compensation and distributions to be paid
by the successor.
(5) Describe the material conflicts that may arise between the
interests of the sponsor or general partner and the interests of
investors in the successor as a result of the compensation and
distribution arrangements described in response to paragraphs (b)(1) and
(2) of this Item ( 229.905) and describe any steps that will be taken to
resolve any such conflicts.
(c) Describe any provisions in the governing instruments of the
successor and any policies of the general partner of the successor
relating to distributions to investors of cash from operations, proceeds
from the sale, financing or refinancing of assets, and any other
distributions. Compare such provisions and policies to those of each of
the partnerships. Describe the effects of any change(s) in such
provisions or policies.
(d)(1) Describe each material investment policy of the successor,
including, without limitation, policies with respect to borrowings by
the successor. Compare such investment policies to the investment
policies of each of the partnerships. Describe the effects of any
change(s) in such policies.
(2) Describe any plans of the general partner, sponsor or of any
person who will be an affiliate of the successor with respect to:
(i) A sale of any material assets of the partnerships;
(ii) A purchase of any material assets; and
(iii) Borrowings.
(3)(i) State whether or not specific assets have been identified for
sale, financing, refinancing or purchase following the roll-up
transaction.
(ii) If specific assets have been so identified, describe the assets
and the proposed transaction.
(e) Describe any other similar terms or policies of the successor
that are material to an investment in the successor. Compare any such
terms or policies to those of each of the partnerships. Describe the
effects of any change(s) in any such terms or policies.
Instructions to Item 905. (1) The information provided in response
to this Item ( 229.905) should be illustrated in tables or other readily
understandable formats, which should be included together with the
disclosures required by this Item.
(2) The information required by this Item ( 229.905) shall be set
forth in appropriate separate sections of the principal disclosure
document.
17 CFR 229.906 (Item 906) Allocation of roll-up consideration.
(a) Describe in reasonable detail the method used to allocate
interests in the successor to investors in the partnerships and the
reasons why such method was used.
(b) Provide a table showing the calculation of the valuation of each
partnership and the allocation of interests in the successor to
investors. Such table shall include for each partnership the following
information (or other information of a comparable character necessary to
an understanding of the calculation and allocation):
(1) The value assigned to each significant category of assets of the
partnership and the total value assigned to the partnership;
(2) The total value assigned to all partnerships;
(3) The aggregate amount of interests in the successor to be
allocated to each partnership and the percentage of the total amount of
all such interests represented thereby; and
(4) The amount of interests of the successor to be issued to
investors per interest held in each partnership (on an equivalent
interest basis, such as per $1,000 invested).
(c) If interests in the successor will be allocated to the general
partner in exchange for its general partner interest or otherwise or if
the general partner will receive other consideration in connection with
the roll-up transaction:
(1) Describe in reasonable detail the method used to allocate
interests in the successor to the general partner or to determine the
amount of consideration payable to the general partner and the reasons
such method(s) was used; and
(2) Identify the consideration paid by the general partner for
interests in the partnerships that will be exchanged in the roll-up
transaction.
17 CFR 229.907 (Item 907) Background of the roll-up transaction.
(a)(1) Furnish a summary of the background of the transaction. Such
summary shall include, but not be limited to, a description of any
contacts, negotiations or transactions concerning any of the following
matters:
(i) A merger, consolidation, or combination of any of the
partnerships;
(ii) An acquisition of any of the partnerships or a material amount
of any of their assets;
(iii) A tender offer for or other acquisition of securities of any
class issued by any of the partnerships; or
(iv) A change in control of any of the partnerships.
(2) The summary required by paragraph (a)(1) of this Item shall:
(i) Cover the period beginning with each partnership's second full
fiscal year preceding the date of the filing of the roll-up transaction;
(ii) Include contacts, negotiations or transactions between the
general partner or its affiliates and any person who would have a direct
interest in the matters listed in paragraphs (a)(1)(i)-(iv) of this
Item; and
(iii) Identify the person who initiated such contacts, negotiations
or transactions.
(b) Briefly describe the background of each partnership, including,
but not limited to:
(1) The amount of capital raised from investors, the extent to which
net proceeds from the original offering of interests have been invested,
the extent to which funds have been invested as planned and the amount
not yet invested; and
(2) The partnership's investment objectives and the extent to which
the partnership has achieved its investment objectives.
(c) Discuss whether the general partner (including any affiliated
person materially dependent on the general partner's compensation
arrangement with the partnership) or any partnership has experienced
since the commencement of the most recently completed fiscal year or is
likely to experience any material adverse financial developments. If
so, describe such developments and the effect of the transaction on such
matters.
17 CFR 229.908 (Item 908) Reasons for and alternatives to the roll-up
transaction.
(a) Describe the reason(s) for the roll-up transaction.
(b)(1) If the general partner or sponsor considered alternatives to
the roll-up transaction being proposed, describe such alternative(s) and
state the reason(s) for their rejection.
(2) Whether or not described in response to paragraph (b)(1) of this
Item ( 229.908), describe in reasonable detail the potential alternative
of continuation of the partnerships in accordance with their existing
business plans, including the effects of such continuation and the
material risks and benefits that likely would arise in connection
therewith, and, if applicable, the general partner's reasons for not
considering such alternative.
(3) Whether or not described in response to paragraph (b)(1) of this
Item ( 229.908), describe in reasonable detail the potential alternative
of liquidation of the partnerships, the procedures required to
accomplish liquidation, the effects of liquidation, the material risks
and benefits that likely would arise in connection with liquidation,
and, if applicable, the general partner's reasons for not considering
such alternative.
(c) State the reasons for the structure of the roll-up transaction
and for undertaking such transaction at this time.
(d) State whether the general partner initiated the roll-up
transaction and, if not, whether the general partner participated in the
structuring of the transaction.
(e) State whether the general partner recommends the roll-up
transaction and briefly describe the reasons for such recommendation.
17 CFR 229.909 (Item 909) Conflicts of interest.
(a) Briefly describe the general partner's fiduciary duties to each
partnership subject to the roll-up transaction and each actual or
potential material conflict of interest between the general partner and
the investors relating to the roll-up transaction.
(b)(1) State whether or not the general partner has retained an
unaffiliated representative to act on behalf of investors for purposes
of negotiating the terms of the roll-up transaction. If no such
representative has been retained, describe the reasons therefor and the
risks arising from the absence of separate representation.
(2) If an unaffiliated representative has been retained to represent
investors:
(i) Identify such unaffiliated representative;
(ii) Briefly describe the representative's qualifications, including
a brief description of any other transaction similar to the roll-up
transaction in which the representative has served in a similar capacity
within the past five years;
(iii) Describe the method of selection of such representative,
including a statement as to whether or not any investors were consulted
in the selection of the representative and, if so, the names of such
investors;
(iv) Describe the scope and terms of the engagement of the
representative, including, but not limited to, what party will be
responsible for paying the representative's fees and whether such fees
are contingent upon the outcome of the roll-up transaction;
(v) Describe any material relationship between the representative or
its affiliates and:
(A) The general partner, sponsor, any affiliate of the general
partner or sponsor; or
(B) Any other person having a material interest in the roll-up
transaction,
which existed during the past two years or is mutually understood to
be contemplated and any compensation received or to be received as a
result of such relationship;
(vi) Describe in reasonable detail the actions taken by the
representative on behalf of investors; and
(vii) Describe the fiduciary duties or other legal obligations of the
representative to investors in each of the partnerships.
17 CFR 229.910 (Item 910) Fairness of the transaction.
(a) State whether the general partner reasonably believes that the
roll-up transaction is fair or unfair to investors and the reasons for
such belief. Such discussion must address the fairness of the roll-up
transaction to investors in each of the partnerships and as a whole. If
the roll-up transaction may be completed with a combination of
partnerships consisting of less than all partnerships, or with portions
of partnerships, the belief stated must address each possible
combination.
(b) Discuss in reasonable detail the material factors upon which the
belief stated in paragraph (a) of this Item ( 229.910) is based and, to
the extent practicable, the weight assigned to each such factor. Such
discussion should include an analysis of the extent, if any, to which
such belief is based on the factors set forth in Instructions (2) and
(3) to this Item ( 229.910), paragraph (b)(1) of Item 909 of this
subpart ( 229.909(b)(1)) and Item 911 of this subpart ( 229.911). This
discussion also must:
(1) Compare the value of the consideration to be received in the
roll-up transaction to the value of the consideration that would be
received pursuant to each of the alternatives discussed in response to
Item 908(b) of this subpart ( 229.908(b)); and
(2) Describe any material differences among the partnerships (e.g.,
different types of assets or different investment objectives) relating
to the fairness of the transaction.
(c) If any offer of the type described in Instruction (2)(viii) to
this Item ( 229.910) has been received, describe such offer and state
the reason(s) for its rejection.
(d) Describe any factors known to the general partner that may affect
materially the value of the consideration to be received by investors in
the roll-up transaction, the values assigned to the partnerships for
purposes of the comparisons to alternatives required by paragraph (b) of
this Item ( 229.910) and the fairness of the transaction to investors.
(e) State whether the general partner's statements in response to
paragraphs (a) and (b) of this Item ( 229.910) are based, in whole or in
part, on any report, opinion or appraisal described in response to Item
911 of this subpart ( 229.911). If so, describe any material
uncertainties known to the general partner that relate to the
conclusions in any such report, opinion or appraisal including, but not
limited to, developments or trends that have affected or are reasonably
likely to affect materially such conclusions.
Instructions to Item 910. (1) A statement that the general partner
has no reasonable belief as to the fairness of the roll-up transaction
to investors will not be considered sufficient disclosure in response to
paragraph (a) of this Item ( 229.910(a)).
(2) The factors which are important in determining the fairness of a
roll-up transaction to investors and the weight, if any, which should be
given to them in a particular context will vary. Normally such factors
will include, among others, those referred to in paragraph (b)(1) of
Item 909 ( 229.909(b)(1)) and whether the consideration offered to
investors constitutes fair value in relation to:
(i) Current market prices, if any;
(ii) Historic market prices, if any;
(iii) Net book value;
(iv) Going concern value;
(v) Liquidation value;
(vi) Purchases of limited partnership interests by the general
partner or sponsor or their affiliates since the commencement of the
partnership's second full fiscal year preceding the date of filing of
the disclosure document for the roll-up transaction;
(vii) Any report, opinion, or appraisal described in Item 911 of this
subpart ( 229.911); and
(viii) Offers of which the general partner or sponsor is aware made
during the preceding eighteen months for a merger, consolidation, or
combination of any of the partnerships; an acquisition of any of the
partnerships or a material amount of their assets; a tender offer for
or other acquisition of securities of any class issued by any of the
partnerships; or a change in control of any of the partnerships.
(3) The discussion concerning fairness should specifically address
material terms of the transaction including whether the consideration
offered to investors constitutes fair value in relation to:
(i) The form and amount of consideration to be received by investors
and the sponsor in the roll-up transaction;
(ii) The methods used to determine such consideration; and
(iii) The compensation to be paid to the sponsor in the future.
(4) Conclusory statements, such as ''The roll-up transaction is fair
to investors in relation to net book value, going concern value,
liquidation value and future prospects of the partnership,'' will not be
considered sufficient disclosure in response to paragraph (b) of this
Item ( 229.910(b)).
(5) Consideration should be given to presenting the comparative
numerical data as to the value of the consideration being received by
investors, liquidation value and other values in a tabular format.
Financial and other information concerning the partnerships should be
prepared based upon the most recent available information, such as, in
the case of financial information, the periods covered by interim
selected financial information included in the prospectus in accordance
with Item 914 of this subpart ( 229.914).
17 CFR 229.911 (Item 911) Reports, opinions and appraisals.
(a)(1) All material reports, opinions or appraisals. State whether
or not the general partner or sponsor has received any report, opinion
(other than an opinion of counsel) or appraisal from an outside party
which is materially related to the roll-up transaction including, but
not limited to, any such report, opinion or appraisal relating to the
consideration or the fairness of the consideration to be offered to
investors in connection with the roll-up transaction or the fairness of
such transaction to the general partner or investors.
(2) With respect to any report, opinion or appraisal described in
paragraph (a)(1) of this Item ( 229.911);
(i) Identify such outside party;
(ii) Briefly describe the qualifications of such outside party;
(iii) Describe the method of selection of such outside party;
(iv) Describe any material relationship between:
(A) The outside party or its affiliates; and
(B) The general partner, sponsor, the successor or any of their
affiliates,
which existed during the past two years or is mutually understood to
be contemplated and any compensation received or to be received as a
result of such relationship;
(v) If such report, opinion or appraisal relates to the fairness of
the consideration, state whether the general partner, sponsor or
affiliate determined the amount of consideration to be paid or whether
the outside party recommended the amount of consideration to be paid.
(vi) Furnish a summary concerning such report, opinion or appraisal
which shall include, but not be limited to, the procedures followed;
the findings and recommendations; the bases for and methods of arriving
at such findings and recommendations; instructions received from the
general partner, sponsor or its affiliates; and any limitation imposed
by the general partner, sponsor or affiliate on the scope of the
investigation.
(3) Furnish a statement to the effect that upon written request by an
investor or his representative who has been so designated in writing, a
copy of any such report, opinion or appraisal shall be transmitted
promptly, without charge, by the general partner or sponsor. The
statement also must include the name and address of the person to whom
investors or their representatives should make their request.
(4) All reports, opinions or appraisals referred to in paragraph
(a)(1) of this Item ( 229.911) shall be filed as exhibits to the
registration statement.
(5)(i) Describe any contacts in connection with the roll-up
transaction between the sponsor or the general partner and any outside
party with respect to the preparation by such party of an opinion
concerning the fairness of the roll-up transaction, a valuation of a
partnership or its assets, or any other report with respect to the
roll-up transaction. No description is required, however, of contacts
with respect to reports, opinions or appraisals filed as exhibits
pursuant to paragraph (a)(4) of this Item ( 229.911).
(ii) The description of contacts with any outside party required by
paragraph (a)(5)(i) of this Item ( 229.911) shall include the following:
(A) The identity of each such party;
(B) The nature of the contact;
(C) The actions taken by such party;
(D) Any views, preliminary or final, expressed on the proposed
subject matter of the report, opinion or appraisal; and
(E) Any reasons such party did not provide a report, opinion or
appraisal.
(b) Fairness opinions. If any report, opinion or appraisal relates
to the fairness of the roll-up transaction to investors in the
partnerships, state whether or not the report, opinion or appraisal
addresses the fairness of:
(1) The roll-up transaction as a whole and to investors in each
partnership;
(2) All possible combinations of partnerships in the rollup
transaction (including portions of partnerships if the transaction is
structured to permit portions of partnerships to participate). If all
possible combinations are not addressed:
(i) Identify the combinations that are addressed;
(ii) Identify the person(s) that determined which combinations would
be addressed and state the reasons for the selection of the
combinations; and
(iii) State that if the roll-up transaction is completed with a
combination of partnerships not addressed, no report, opinion or
appraisal concerning the fairness of the roll-up transaction will have
been obtained.
(c) Appraisals. If the report, opinion or appraisal consists of an
appraisal of the assets of the partnerships:
(1) Describe the purpose(s) for which the appraisals were obtained
and their use in connection with the roll-up transaction;
(2) Describe which assets are covered by the appraisals and state the
aggregate appraised value of the assets covered by the appraisals
(including such value net of associated indebtedness). Provide a
description of, and valuation of, any assets subject to any material
qualifications by the appraiser and a summary of such qualifications;
(3) Identify the date as of which the appraisals were prepared.
State whether and in what circumstances the appraisals will be updated.
State whether any events have occurred or conditions have changed since
the date of the appraisals that may have caused a material change in the
value of the assets;
(4) Include as an appendix to the prospectus one or more tables
setting forth the following information:
(i) The appraised value of any separately appraised asset that is
significant to the partnership holding such asset;
(ii) If the appraiser considered different valuation approaches in
preparing the appraisals of the assets identified in response to
paragraph (c)(4)(i) of this Item ( 229.911(c)(4)(i)), the value of each
such asset under each valuation approach considered by the appraiser,
identifying the valuation approach used by the appraiser in determining
the appraised value and the reason such approach was chosen; and
(iii) All material assumptions used by the appraiser in appraising
the assets identified in response to paragraph (c)(4)(i) of this Item (
229.911(c)(4)(i)), and, if the appraiser used different assumptions for
any of such assets, the reasons the different assumptions were chosen.
(5) For purposes of this Item and Item 902 of this subpart (
229.902), an asset is ''significant'' to a partnership if it represents
more than 10% of the value of the partnership's assets as of the end of
the most recently-completed fiscal year or recently-completed interim
period or if 10% or more of the partnership's cash flow or net income
for the most recently-completed fiscal year or most recently-completed
subsequent interim period was derived from such asset.
Instructions to Item 911. (1) The reports, opinions and appraisals
required to be identified in response to paragraph (a) of this Item (
229.911) include any reports, opinions and appraisals which materially
relate to the roll-up transaction whether or not relied upon, such as
reports or opinions regarding alternatives to the roll-up transaction
whether or not the alternatives were rejected.
(2) The information called for by paragraph (a)(2) of this Item (
229.911) should be given with respect to the firm which provides the
report, opinion or appraisal rather than the employees of such firm who
prepared it.
(3) With respect to appraisals, a summary prepared by the appraisers
should not be included in lieu of the description of the appraisals
required by paragraph (c) of this Item ( 229.911). A clear and concise
summary description of the appraisals is required.
17 CFR 229.912 (Item 912) Source and amount of funds and transactional
expenses
(a) State the source and total amount of funds or other consideration
to be used in the roll-up transaction.
(b)(1) Furnish a reasonably itemized statement of all expenses
incurred or estimated to be incurred in connection with the roll-up
transaction including, but not limited to, filing fees, legal, financial
advisory, accounting and appraisal fees, solicitation expenses and
printing costs. Identify the persons responsible for paying any or all
of such expenses.
(2) State whether or not any partnership subject to the roll-up
transaction will be, directly or indirectly, responsible for any or all
of the expenses of the transaction. If any partnership will be so
responsible, state the amount to be provided by each partnership and the
sources of capital to finance such amount.
(c) If all or any part of the consideration to be used by the sponsor
or successor in the roll-up transaction is expected to be, directly or
indirectly, provided by any partnership, state the amount to be provided
by each partnership and the sources of capital to finance such amount.
(d) If all or any part of the funds or other consideration is, or is
expected to be, directly or indirectly borrowed by the sponsor or
successor for the purpose of the roll-up transaction:
(1) Provide a summary of each such loan agreement containing the
identity of the parties, the term, the collateral, the stated and
effective interest rates, and other material terms or conditions; and
(2) Briefly describe any plans or arrangements to finance or repay
such borrowing, or, if no plans or arrangements have been made, make a
statement to that effect.
(e) If the source of all or any part of the funds to be used in the
roll-up transaction is a loan made in the ordinary course of business by
a bank as defined by section 3(a)(6) of the Exchange Act and section
13(d) or 14(d) is applicable to such transaction, the name of such bank
shall not be made available to the public if the person filing the
statement so requests in writing and files such request, naming such
bank, with the Secretary of the Commission.
17 CFR 229.913 (Item 913) Other provisions of the transaction.
(a) State whether or not appraisal rights are provided under
applicable state law, under the partnership's governing instruments or
will be voluntarily accorded by the successor, the general partner or
the sponsor (or any of their affiliates) in connection with the roll-up
transaction. If so, summarize such appraisal rights. If appraisal
rights will not be available to investors who object to the transaction,
briefly outline the rights which may be available to such investors
under such law.
(b) If any provision has been made to allow investors to obtain
access to the books and records of the partnership or to obtain counsel
or appraisal services at the expense of the successor, the general
partner, the partnership, the sponsor (or any of their affiliates),
describe such provision.
(c) Discuss the investors' rights under federal and state law to
obtain a partnership's list of investors.
17 CFR 229.914 (Item 914) Pro forma financial statements: selected
financial data.
(a) In addition to the information required by Item 301 of Regulation
S-K, Selected Financial Data ( 229.301), and Item 302 of Regulation S-K,
Supplementary Financial Information ( 229.302), for each partnership
proposed to be included in a roll-up transaction provide: Ratio of
earnings to fixed charges, cash and cash equivalents, total assets at
book value, total assets at the value assigned for purposes of the
roll-up transaction (if applicable), total liabilities, general and
limited partners' equity, net increase (decrease) in cash and cash
equivalents, net cash provided by operating activities, distributions;
and per unit data for net income (loss), book value, value assigned for
purposes of the roll-up transaction (if applicable), and distributions
(separately identifying distributions that represent a return of
capital). This information should be provided for the same period(s)
for which Selected Financial Data and Supplementary Financial
Information are required to be provided. Additional or other
information should be provided if material to an understanding of each
partnership proposed to be included in a roll-up transaction.
(b) Provide pro forma financial information (including oil and gas
reserves and cash flow disclosure, if appropriate), assuming:
(1) All partnerships participate in the roll-up transaction; and
(2) Participation in a roll-up transaction of those partnerships that
on a combined basis have the lowest combined net cash provided by
operating activities for the last fiscal year of such partnerships,
provided participation by such partnerships satisfies all conditions to
consummation of the roll-up transaction. If the combination of all
partnerships proposed to be included in a roll-up transaction results in
such lowest combined net cash provided by operating activities, this
shall be noted and no separate pro forma financial statements are
required.
(c) The pro forma financial statements required by paragraph (b) of
this Item ( 229.914) shall disclose the effect of the roll-up
transaction on the successor's:
(1) Balance sheet as of the later of the end of the most recent
fiscal year or the latest interim period;
(2) Statement of income (with separate line items to reflect income
(loss) excluding and including the roll-up expenses and payments),
earnings per share amounts, and ratio of earnings to fixed charges for
the most recent fiscal year and the latest interim period;
(3) Statement of cash flows for the most recent fiscal year and the
latest interim period; and
(4) Book value per share as of the later of the end of the most
recent fiscal year or the latest interim period.
Instructions to Item 914. (1) Notwithstanding the provisions of this
Item ( 229.914), any or all of the information required by paragraphs
(b) and (c) of this Item ( 229.914) that is not material for the
exercise of prudent judgment in regard to the matter to be acted upon,
may be omitted.
(2) If the roll-up transaction is structured to permit participation
by portions of partnerships, consideration should be given to the effect
of such participation in preparing the pro forma financial statements
reflecting a partial roll-up.
17 CFR 229.915 (Item 915) Federal income tax consequences.
(a) Provide a brief, clear and understandable summary of the material
Federal income tax consequences of the roll-up transaction and an
investment in the successor. Where a tax opinion has been provided,
briefly summarize the substance of such opinion, including
identification of the material consequences upon which counsel has not
been asked, or is unable, to opine. If any of the material Federal
income tax consequences are not expected to be the same for investors in
all partnerships, the differences shall be described.
(b) State whether or not the opinion of counsel is included as an
appendix to the prospectus. If filed as an exhibit to the registration
statement and not included as an appendix to the prospectus, include a
statement to the effect that, upon receipt of a written request by an
investor or his representative who has been so designated in writing, a
copy of the opinion of counsel will be transmitted promptly, without
charge, by the general partner or sponsor. The statement should include
the name and address of the person to whom investors should make their
request.
17 CFR 229.915 Pt. 230
17 CFR 229.915 PART 230 -- GENERAL RULES AND REGULATIONS, SECURITIES
ACT OF 1933
Sec.
230.100 Definitions of terms used in the rules and regulations.
230.110 Business hours of the Commission.
230.111 Payment of fees.
230.120 Inspection of registration statements.
230.122 Nondisclosure of information obtained in the course of
examinations and investigations.
230.130 Definition of rules and regulations as used in certain
sections of the Act.
230.131 Definition of security issued under governmental obligations.
230.132 Definition of common trust fund as used in section 3(a)(2) of
the Act.
230.133 Definition for purposes of section 5 of the Act of sale,
offer, offer to sell, and offer for sale.
230.134 Communications not deemed a prospectus.
230.134a Options material not deemed a prospectus.
230.135 Notice of certain proposed offerings.
230.135a Generic advertising.
230.135b Materials not deemed an offer to sell or offer to buy.
230.136 Definition of certain terms in relation to assessable stock.
230.137 Definition of offers, participates, or participation in
section 2(11) in relation to certain publications by persons independent
of participants in a distribution.
230.138 Definition of offer for sale and offer to sell in sections
2(10) and 5(c) in relation to certain publications.
230.139 Definition of offer for sale and offer to sell in sections
2(10) and 5(c) in relation to certain publications.
230.140 Definition of distribution in section 2(11) for certain
transactions.
230.141 Definition of commission from an underwriter or dealer not in
excess of the usual and customary distributors' or sellers' commissions
in section 2(11), for certain transactions.
230.142 Definition of participates and participation, as used in
section 2(11), in relation to certain transactions.
230.143 Definition of has purchased, sells for, participates, and
participation, as used in section 2(11), in relation to certain
transactions of foreign governments for war purposes.
230.144 Persons deemed not to be engaged in a distribution and
therefore not underwriters.
230.144A Private resales of securities to institutions.
230.145 Reclassification of securities, mergers, consolidations and
acquisitions of assets.
230.147 Part of an issue, person resident, and doing business within
for purposes of section 3(a)(11).
230.148 Persons deemed not to be underwriters of securities issued or
sold in connection with bankruptcy proceedings.
230.149 Definition of exchanged in section 3(a)(9), for certain
transactions.
230.150 Definition of commission or other remuneration in section
3(a)(9), for certain transactions.
230.151 Safe harbor definition of certain annuity contracts or
optional annuity contracts within the meaning of section 3(a)(8).
230.152 Definition of transactions by an issuer not involving any
public offering in section 4(2), for certain transactions.
230.152a Offer or sale of certain fractional interests.
230.153 Definition of preceded by a prospectus, as used in section
5(b)(2), in relation to certain transactions.
230.153a Definition of preceded by a prospectus as used in section
5(b)(2) of the Act, in relation to certain transactions requiring
approval of security holders.
230.153b Definition of preceded by a prospectus, as used in section
5(b)(2), in connection with certain transactions in standardized
options.
230.156 Investment company sales literature.
230.157 Small entities for purposes of the Regulatory Flexibility
Act.
230.158 Definitions of certain terms in the last paragraph of section
11(a).
230.161 Amendments to rules and regulations governing exemptions.
230.170 Prohibition of use of certain financial statements.
230.171 Disclosure detrimental to the national defense or foreign
policy.
230.174 Delivery of prospectus by dealers; exemptions under section
4(3) of the Act.
230.175 Liability for forward-looking statements by issuers.
230.176 Circumstances affecting the determination of what constitutes
reasonable investigation and reasonable grounds for belief under section
11 of the Securities Act.
230.180 Exemption from registration of interests and participations
issued in connection with certain H.R. 10 plans.
230.215 Accredited investor.
230.236 Exemption of shares offered in connection with certain
transactions.
230.251 Definitions of terms used in 230.251 to 230.262.
230.252 Securities exempted.
230.253 Special requirements for certain offerings.
230.254 Amount of securities exempted.
230.255 Filing of offering statement.
230.256 Filing and use of the offering circular.
230.257 Offerings not in excess of $100,000.
230.258 Sales material to be filed.
230.259 Statement required in all offering circulars.
230.260 Reports of sales hereunder.
230.261 Suspension of exemption.
230.262 Consent to service of process.
230.263 Notice of delayed or suspended offering and sale.
230.264 Procedure with respect to abandoned offering statement.
230.300 Definitions of terms used in Regulation B.
230.302 Interests exempted.
230.304 Interests involving noncontiguous tracts.
230.306 Limitations on offeror.
230.310 Filing and use of the offering sheet.
230.312 Filing of offering sheets on behalf of other persons.
230.314 Delivery of evidence of title.
230.316 Reports.
230.318 Use of sales material.
230.320 Restricting use of estimations not included in offering
sheets.
230.322 Prohibition of certain statements.
230.324 Liability for unauthorized use of offering sheet.
230.326 Form and contents of offering sheets.
230.328 Preparation of offering sheet.
230.330 Representations in offering sheets.
230.332 The use of the offering sheet.
230.334 Reasons for suspension.
230.336 The suspension procedure.
230.338 Effect of suspension order.
230.340 When offering sheet may be amended.
230.342 How offering sheet may be amended.
230.344 Withdrawal.
230.346 Termination.
230.400 Application of 230.400 to 230.494, inclusive.
230.401 Requirements as to proper form.
230.402 Number of copies; binding; signatures.
230.403 Requirements as to paper, printing, language and pagination.
230.404 Preparation of registration statement.
230.405 Definitions of terms.
230.406 Confidential treatment of information filed with the
Commission.
230.408 Additional information.
230.409 Information unknown or not reasonably available.
230.410 Disclaimer of control.
230.411 Incorporation by reference.
230.412 Modified or superseded documents.
230.413 Registration of additional securities.
230.414 Registration by certain successor issuers.
230.415 Delayed or continuous offering and sale of securities.
230.416 Securities to be issued as a result of stock splits, stock
dividends and anti-dilution provisions and interests to be issued
pursuant to certain employee benefit plans.
230.417 Date of financial statements.
230.418 Supplemental information.
230.420 Legibility of prospectus.
230.421 Presentation of information in prospectuses.
230.423 Date of prospectuses.
230.424 Filing of prospectuses; number of copies.
230.427 Contents of prospectus used after nine months.
230.428 Documents constituting a section 10(a) prospectus for Form
S-8 registration statement; requirements relating to offerings of
securities registered on Form S-8.
230.429 Prospectus relating to several registration statements.
230.430 Prospectus for use prior to effective date.
230.430A Prospectus in a registration statement at the time of
effectiveness.
230.431 Summary prospectuses.
230.432 Additional information required to be included in
prospectuses relating to tender offers.
230.436 Consents required in special cases.
230.437 Application to dispense with consent.
230.438 Consents of persons about to become directors.
230.439 Consent to use of material incorporated by reference.
230.445 Competitive bidding registration statement.
230.446 Invitations for competitive bids.
230.447 Authorization of agent for service for filing amendments.
230.455 Place of filing.
230.456 Date of filing.
230.457 Computation of fee.
230.459 Calculation of effective date.
230.460 Distribution of preliminary prospectus.
230.461 Acceleration of effective date.
230.462 Effective date of a registration statement filed on Form S-8.
230.463 Report of offering of securities and use of proceeds
therefrom.
230.464 Effective date of post-effective amendments to registration
statements filed on Form S-8 and on certain Forms S-3, S-4, F-2, F-3,
and F-4.
230.466 Effective date of certain registration statements on Form
F-6.
230.467 Effectiveness of registration statements and post-effective
amendments thereto made on Forms F-7, F-8, F-9, F-10 and F-80.
230.470 Formal requirements for amendments.
230.471 Signatures to amendments.
230.472 Filing of amendments; number of copies.
230.473 Delaying amendments.
230.474 Date of filing of amendments.
230.475 Amendment filed with consent of Commission.
230.475a Certain pre-effective amendments on Forms S-3, S-4, F-2, F-3
and F-4 deemed filed with the consent of Commission.
230.476 Amendment filed pursuant to order of Commission.
230.477 Withdrawal of registration statement or amendment.
230.478 Powers to amend or withdraw registration statement.
230.479 Procedure with respect to abandoned registration statements
and posteffective amendments.
230.480 Title of securities.
230.481 Information required in prospectus.
230.482 Advertising by an investment company as satisfying
requirements of section 10.
230.483 Exhibits for certain registration statements.
230.484 Undertaking required in certain registration statements.
230.485 Effective date of post-effective amendments filed by certain
registered investment companies.
230.486 Effective date of post-effective amendments filed by
registered separate accounts of insurance companies.
230.487 Effectiveness of registration statements filed by certain
unit investment trusts.
230.488 Effective date of registration statements relating to
securities to be issued in certain business combination transactions.
230.489 Filing of form by foreign banks and insurance companies and
certain of their holding companies and finance subsidiaries.
230.490 Information to be furnished under paragraph (3) of Schedule
B.
230.491 Information to be furnished under paragraph (6) of Schedule
B.
230.492 Omissions from prospectuses.
230.493 Filing of opinions of counsel.
230.494 Newspaper prospectuses.
230.495 Preparation of registration statement.
230.496 Contents of prospectus used after nine months.
230.497 Filing of investment company prospectuses -- number of
copies.
230.499 EDGAR temporary rule.
230.501 Definitions and terms used in Regulation D.
230.502 General conditions to be met.
230.503 Filing of notice of sales.
230.504 Exemption for limited offerings and sales of securities not
exceeding $1,000,000.
230.505 Exemption for limited offers and sales of securities not
exceeding $5,000,000.
230.506 Exemption for limited offers and sales without regard to
dollar amount of offering.
230.507 Disqualifying provision relating to exemptions under
230.504, 230.505 and 230.506.
230.508 Insignificant deviations from a term, condition or
requirement of Regulation D.
230.601 Definitions of terms used in 230.601 to 230.610a.
230.602 Securities exempted.
230.603 Amount of securities exempted.
230.604 Filing of notification on Form 1-E.
230.605 Filing and use of the offering circular.
230.606 Offering not in excess of $100,000.
230.607 Sales material to be filed.
230.608 Prohibition of certain statements.
230.609 Reports of sales hereunder.
230.610 Suspension of exemption.
230.610a Schedule A: Contents of offering circular for small
business investment companies; Schedule B: Contents of offering
circular for business development companies.
230.651 Scope of exemption.
230.652 Filing of notification.
230.653 Information to be given stockholders and others.
230.654 Sales material to be filed.
230.655 Prohibition of certain statements.
230.656 Suspension of exemption.
230.701 Exemption for offers and sales of securities pursuant to
certain compensatory benefit plans and contracts relating to
compensation.
230.702(T) Notice of sales pursuant to an exemption under 230.701.
230.703(T) Disqualifying provision relating to an exemption under
230.701.
230.901 General statement.
230.902 Definitions.
230.903 Offers or sales of securities by the issuer, a distributor,
any of their respective affiliates, or any person acting on behalf of
any of the foregoing; conditions relating to specific securities.
230.904 Resales.
Authority: 15 U.S.C. 77b, 77f, 77g, 77h, 77j, 77s, 77sss, 78c, 78l,
78m, 78n, 78o, 78w, 79t, and 80a-37, unless otherwise noted.
Section 230.473 is also issued under 15 U.S.C. 79(t).
Section 230.502 is also issued under 15 U.S.C. 80a-8, 80a-29, 80a-30.
17 CFR 229.915 General
Note: In 230.100 to 230.174, the numbers to the right of the
decimal point correspond with the respective rule numbers in general
rules and regulations adopted by the Securities and Exchange Commission
under the Securities Act of 1933.
Cross Reference: For regulations governing registration, see
230.400 -- 230.494.
17 CFR 230.100 Definition of terms used in the rules and regulations.
(a) As used in the rules and regulations prescribed in this part by
the Securities and Exchange Commission pursuant to the Securities Act of
1933, unless the context otherwise requires:
(1) The term Commission means the Securities and Exchange Commission.
(2) The term Act means the Securities Act of 1933.
(3) The term rules and regulations refers to all rules and
regulations adopted by the Commission pursuant to the Act, including the
forms and accompanying instructions thereto.
(4) The term registrant means the issuer of securities for which a
registration statement is filed.
(5) The term agent for service means the person authorized in the
registration statement to receive notices and communications from the
Commission.
(b) Unless otherwise specifically provided, the terms used in this
part shall have the meanings defined in the act.
(c) A rule in the general rules and regulations which defines a term
without express reference to the Act or to the rules and regulations or
to a portion thereof defines such term for all purposes as used both in
the Act and in the rules and regulations, unless the context otherwise
requires.
(2 FR 1076, May 26, 1937, as amended at 21 FR 7566, Oct. 3, 1956)
17 CFR 230.110 Business hours of the Commission.
The principal office of the Commission, at 450 Fifth Street, NW.,
Washington, DC 20549, is open each day, except Saturdays, Sundays and
holidays, from 9:00 a.m. to 5:30 p.m., eastern standard time or eastern
daylight saving time, whichever is currently in effect in Washington,
DC.
(47 FR 26819, June 22, 1982)
17 CFR 230.111 Payment of fees.
All payments of fees for registration statements under the Act shall
be made in cash or by U.S. postal money order, certified check, bank
cashier's check, or bank money order payable to the Securities and
Exchange Commission, omitting the name or title of any official of the
Commission. In addition, all other filing fees may be paid by personal
check. There will be no refunds. Payment of fees required by this
section shall be made in accordance with the directions set forth in
202.3a of this chapter.
(37 FR 1471, Jan. 29, 1972, as amended at 49 FR 27307, July 3, 1984)
17 CFR 230.120 Inspection of registration statements.
Except for material contracts or portions thereof accorded
confidential treatment pursuant to 230.485, all registration statements
are available for public inspection, during business hours, at the
principal office of the Commission in Washington, DC.
(19 FR 6727, Oct. 20, 1954)
17 CFR 230.122 Non-disclosure of information obtained in the course of
examinations and investigations.
Information or documents obtained by officers or employees of the
Commission in the course of any examination or investigation pursuant to
section 8(e) or 20(a) (48 Stat. 80, 86; 15 U.S.C. 77h(e), 77t(a))
shall, unless made a matter of public record, be deemed confidential.
Except as provided by 17 CFR 203.2, officers and employees are hereby
prohibited from making such confidential information or documents or any
other non-public records of the Commission available to anyone other
than a member, officer or employee of the Commission, unless the
Commission or the General Counsel, pursuant to delegated authority,
authorizes the disclosure of such information or the production of such
documents as not being contrary to the public interest. Any officer or
employee who is served with a subpoena requiring the disclosure of such
information or the production of such documents shall appear in court
and, unless the authorization described in the preceding sentence shall
have been given, shall respectfully decline to disclose the information
or produce the documents called for, basing his or her refusal upon this
section. Any officer or employee who is served with such a subpoena
shall promptly advise the General Counsel of the service of such
subpoena, the nature of the information or documents sought, and any
circumstances which may bear on the desirability of making available
such information or documents.
(Sec. 19, 48 Stat. 85; sec. 20, 48 Stat. 86; sec. 21, 48 Stat.
899; sec. 23, 48 Stat. 901; sec. 18, 49 Stat. 831; sec. 20, 49 Stat.
833; sec. 319, 53 Stat. 1173; sec. 321, 53 Stat. 1174; sec. 38, 54
Stat. 841; sec. 42, 54 Stat. 842; sec. 209, 54 Stat. 853; sec. 211,
54 Stat. 855; sec. 1, 76 Stat. 394. (15 U.S.C. 77s, 77t, 78u, 78w, 79r,
79t, 77sss, 77uuu, 80a-37, 80a-41, 80b-9, 89b-11, 78d-1))
(44 FR 50836, Aug. 30, 1979, as amended at 53 FR 17459, May 17, 1988;
54 FR 33501, Aug. 15, 1989)
17 CFR 230.130 Definition of ''rules and regulations'' as used in
certain sections of the Act.
The term rules and regulations as used in sections 7, 10 (a), (c) and
(d) and 19(a) of the Act, shall include the forms for registration of
securities under the Act and the related instructions thereto.
(21 FR 1046, Feb. 15, 1956)
17 CFR 230.131 Definition of security issued under governmental
obligations.
(a) Any part of an obligation evidenced by any bond, note, debenture,
or other evidence of indebtedness issued by any governmental unit
specified in section 3(a)(2) of the Act which is payable from payments
to be made in respect of property or money which is or will be used,
under a lease, sale, or loan arrangement, by or for industrial or
commercial enterprise, shall be deemed to be a separate security within
the meaning of section 2(l) of the Act, issued by the lessee or obligor
under the lease, sale or loan arrangement.
(b) An obligation shall not be deemed a separate security as defined
in paragraph (a) of this section if, (1) the obligation is payable from
the general revenues of a governmental unit, specified in section
3(a)(2) of the Act, having other resources which may be used for payment
of the obligation, or (2) the obligation relates to a public project or
facility owned and operated by or on behalf of and under the control of
a governmental unit specified in such section, or (3) the obligation
relates to a facility which is leased to and under the control of an
industrial or commercial enterprise but is a part of a public project
which, as a whole, is owned by and under the general control of a
governmental unit specified in such section, or an instrumentality
thereof.
(c) This rule shall apply to transactions of the character described
in paragraph (a) of this section only with respect to bonds, notes,
debentures or other evidences of indebtedness sold after December 31,
1968.
(15 U.S.C. 77w)
(33 FR 12648, Sept. 6, 1968, as amended at 35 FR 6000, Apr. 11, 1970)
17 CFR 230.132 Definition of ''common trust fund'' as used in section
3(a)(2) of the Act.
The term common trust fund as used in section 3(a)(2) of the Act (15
U.S.C. 77c(a)(2)) shall include a common trust fund which is maintained
by a bank which is a member of an affiliated group, as defined in
section 1504(a) of the Internal Revenue Code of 1954 (26 U.S.C.
1504(a)), and which is maintained exclusively for the collective
investment and reinvestment of monies contributed thereto by one or more
bank members of such affiliated group in the capacity of trustee,
executor, administrator, or guardian, Provided That:
(a) The common trust fund is operated in compliance with the same
state and federal regulatory requirements as would apply if the bank
maintaining such fund and any other contributing banks were the same
entry; and
(b) The rights of persons for whose benefit a contributing bank acts
as trustee, executor, administrator, or guardian would not be diminished
by reason of the maintenance of such common trust fund by another bank
member of the affiliated group.
(15 U.S.C. 77s(a))
(43 FR 2392, Jan. 17, 1978)
17 CFR 230.133 Definition for purposes of section 5 of the Act, of
''sale,'' ''offer,'' ''offer to sell,'' and ''offer for sale.''
(a) For purposes only of section 5 of the Act, no sale, offer to
sell, or offer for sale shall be deemed to be involved so far as the
stockholders of a corporation are concerned where, pursuant to statutory
provisions in the state of incorporation or provisions contained in the
certificate of incorporation, there is submitted to the vote of such
stockholders a plan or agreement for a statutory merger or consolidation
or reclassification of securities, or a proposal for the transfer of
assets of such corporation to another person in consideration of the
issuance of securities of such other person or securities of a
corporation which owns stock possessing at least 80 percent of the total
combined voting power of all classes of stock entitled to vote and at
least 80 percent of the total number of shares of all other classes of
stock of such person, under such circumstances that the vote of a
required favorable majority (1) will operate to authorize the proposed
transaction as far as concerns the corporation whose stockholders are
voting (except for the taking of action by the directors of the
corporation involved and for compliance with such statutory provisions
as the filing of the plan or agreement with the appropriate State
authority), and (2) will bind all stockholders of such corporation
except to the extent that dissenting shareholders may be entitled, under
statutory provisions or provisions contained in the certificate of
incorporation, to receive the appraised or fair value of their holdings.
(b) Any person who purchases securities of the issuer from security
holders of a constituent corporation with a view to, or offers or sells
such securities for such security holders in connection with, a
distribution thereof pursuant to any contract or arrangement, made in
connection with any transaction specified in paragraph (a) of this
section, with the issuer or with any affiliate of the issuer, or with
any person who in connection with such transaction is acting as an
underwriter of such securities, shall be deemed to an underwriter of
such securities within the meaning of section 2(11) of the Act. This
paragraph does not refer to arrangements limited to provision for the
matching and combination of fractional interests in securities into
whole interests, or the purchase and sale of such fractional interests,
among security holders of the constituent corporation and to the sale on
behalf of, and as agent for, such security holders of such number of
fractional or whole interests as may be necessary to adjust for any
remaining fractional interests after such matching.
(c) Any constituent corporation, or any person who is an affiliate of
a constituent corporation at the time any transaction specified in
paragraph (a) of this section, is submitted to a vote of the
stockholders of such corporation, who acquires securities of the issuer
in connection with such transaction with a view to the distribution
thereof shall be deemed to be an underwriter of such securities within
the meaning of section 2(11) of the Act. A transfer by a constituent
corporation to its security holders of securities of the issuer upon a
complete or partial liquidation shall not be deemed a distribution for
the purpose of this paragraph.
(d) Notwithstanding the provisions of paragraph (c) of this section,
a person specified therein shall not be deemed to be an underwriter nor
to be engaged in a distribution with respect to securities acquired in
any transaction specified in paragraph (a) of this section, which are
sold by him in brokers' transactions within the meaning of section 4(4)
of the Act, in accordance with the conditions and subject to the
limitations specified in paragraph (e) of this section, if such person:
(1) Does not directly or indirectly solicit or arrange for the
solicitation of orders to buy in anticipation of or in connection with
such brokers' transactions;
(2) Makes no payment in connection with the execution of such
brokers' transactions to any person other than the broker; and
(3) Limits such brokers' transactions to a sale or series of sales
which, together with all other sales of securities of the same class by
such person or on his behalf within the preceding six months, will not
exceed the following:
(i) If the security is traded only otherwise than on a securities
exchange, approximately one percent of the shares or units of such
security outstanding at the time of receipt by the broker of the order
to execute such transactions, or
(ii) If the security is admitted to trading on a securities exchange,
the lesser of approximately (a) one percent of the shares or units of
such security outstanding at the time of receipt by the broker of the
order to execute such transactions or (b) the largest aggregate reported
volume of trading on securities exchanges during any one week within the
four calendar weeks preceding the receipt of such order.
(e) For the purposes of paragraph (d) of this section:
(1) The term brokers' transactions in section 4(4) of the Act shall
be deemed to include transactions by a broker acting as agent for the
account of the seller where:
(i) The broker performs no more than the usual and customary broker's
functions,
(ii) The broker does no more than execute an order or orders to sell
as a broker and receives no more than the usual or customary broker's
commissions,
(iii) The broker does not solicit or arrange for the solicitation of
orders to buy in anticipation of or in connection with such transactions
and
(iv) The broker is not aware of any circumstances indicating that his
principal is failing to comply with the provisions of paragraph (d) of
this section;
(2) The term solicitation of such orders in section 4(4) of the Act
shall be deemed to include the solicitation of an order to buy a
security, but shall not be deemed to include the solicitation of an
order to sell a security;
(3) Where within the previous 60 days a dealer has made a written bid
for a security or a written solicitation of an offer to sell such
security, the term solicitation in section 4(4) shall not be deemed to
include an inquiry regarding the dealer's bid or solicitation.
(f) For the purposes of this rule, the term constituent corporation
means any corporation, other than the issuer, which is a party to any
transaction specified in paragraph (a) of this section. The term
affiliate means a person controlling, controlled by or under common
control with a specified person.
Note: This section is rescinded effective on and after January 1,
1973, except that it shall remain in effect: (1) For transactions
submitted before that date for vote or consent of security holders; (2)
for transactions formally submitted before such date for approval to any
governmental regulatory agency, if such approval is required by law;
and (3) for resales of securities received by persons in such
transactions.
(Sec. 5, 48 Stat. 77; 15 U.S.C. 77e)
(19 FR 7129, Nov. 3, 1954, as amended at 24 FR 5900, July 23, 1959;
30 FR 2022, Feb. 13, 1965; 33 FR 566, Jan. 17, 1968. Rescinded at 37 FR
23636, Nov. 7, 1972)
17 CFR 230.134 Communications not deemed a prospectus.
The term prospectus as defined in section 2(10) of the Act shall not
include a notice, circular, advertisement, letter, or other
communication published or transmitted to any person after a
registration statement has been filed if it contains only the statements
required or permitted to be included therein by the following provisions
of this section:
(a) Such communication may include any one or more of the following
items of information, which need not follow the numerical sequence of
this paragraph:
(1) The name of the issuer of the security;
(2) The full title of the security and the amount being offered;
(3) A brief indication of the general type of business of the issuer,
limited to the following:
(i) In the case of a manufacturing company, the general type of
manufacturing and the principal products or classes of products
manufactured;
(ii) In the case of a public utility company, the general type of
services rendered and a brief indication of the area served;
(iii) In the case of an investment company registered under the
Investment Company Act of 1940, the company's classification and
subclassification under the Act, whether it is a balanced, specialized,
bond, preferred stock or common stock fund and whether in the selection
of investments emphasis is placed upon income or growth characteristics,
and a general description of an investment company including its general
attributes, methods of operation and services offered provided that such
description is not inconsistent with the operation of the particular
investment company for which more specific information is being given,
identification of the company's investment adviser, any logo, corporate
symbol or trademark of the company or its investment adviser and any
graphic design or device or an attention-getting headline, not involving
performance figures, designed to direct the reader's attention to
textual material included in the communication pursuant to other
provisions of this rule; and, with respect to an investment company
issuing redeemable securities:
(A) A description of such company's investment objectives and
policies, services, and method of operation;
(B) Identification of the company's principal officers;
(C) The year of incorporation or organization or period of existence
of the company, its investment adviser, or both;
(D) The company's aggregate net asset value as of the most recent
practicable date;
(E) The aggregate net asset value as of the most recent practicable
date of all registered investment companies under the management of the
company's investment adviser;
(F) Any pictorial illustration which is appropriate for inclusion in
the company's prospectus and not involving performance figures;
(G) Descriptive material relating to economic conditions, or to
retirement plans or other goals to which an investment in the company
could be directed, but not directly or indirectly relating to past
performance or implying achievement of investment objectives; Provided,
That, (1) if any printed material permitted by paragraphs (a)(3)(iii)
(A) through (G) of this section is included, such communication shall
also contain the following legend set in a size type at least as large
as and of a style different from, but at least as prominent as, that
used in the major portion of the advertisement; and
(H) Written notice of the terms of an offer made solely to all
registered holders of the securities, or of a particular class or series
of securities, issued by the company proportate to their holdings,
offering to sell additional shares to such holders of securities at
prices reflecting a reduction in, or elimination of, the regular sales
load charged: Provided, That, (1) if any printed material permitted by
pargraphs (a)(3)(iii) (A) through (H) of this section is included, such
communication shall also contain the following legend set in a size type
at least as large as and of a style different from, but at least as
prominent as, that used in the major portion of the advertisements:
For more complete information about (Name of Company) including
charges and expenses (get) (obtain) (send for) a prospectus (from (Name
and Address)) (by sending this coupon). Read it carefully before you
invest or (pay) (forward funds) (send money).
Or, (2) if any material permitted by paragraphs (a)(3)(iii) (A)
through (G) of this section is used in a radio or television
advertisement, such communication shall also contain the following
legend given emphasis equal to that used in the major portion of the
advertisement:
For more complete information about (Name of Company) including
charges and expenses (get) (obtain) (send for) a prospectus (from (Name
and Address)). Read it carefully before you invest or (pay) (forward
funds) (send money).
For purposes of paragraph (a)(3)(iii)(B) of this section, principal
officers means the president in charge of a principal business function
and any other person who performs similar policy making functions for
the company on a regular basis. In the case of two or more registered
investment companies having the same investment adviser or principal
underwriter, the same information described in this paragraph
(a)(3)(iii) may be included as to each such company in a joint
communication on the same basis as it is permitted in communications
dealing with individual companies under this paragraph (a)(3)(iii).
(iv) In the case of any other type of company, a corresponding
statement;
(4) The price of the security, or if the price is not known, the
method of its determination or the probable price range as specified by
the issuer or the managing underwriter;
(5) In the case of a debt security with a fixed (non-contingent)
interest provision, the yield or, if the yield is not known, the
probable yield range, as specified by the issuer or the managing
underwriter;
(6) The name and address of the sender of the communication and the
fact that he is participating, or expects to participate, in the
distribution of the security;
(7) The names of the managing underwriters;
(8) The approximate date upon which it is anticipated the proposed
sale to the public will commence;
(9) Whether, in the opinion of counsel, the security is a legal
investment for savings banks, fiduciaries, insurance companies, or
similar investors under the laws of any State or Territory or the
District of Columbia;
(10) Whether, in the opinion of counsel, the security is exempt from
specified taxes, or the extent to which the issuer has agreed to pay any
tax with respect to the security or measured by the income therefrom;
(11) Whether the security is being offered through rights issued to
security holders, and, if so, the class of securities the holders of
which will be entitled to subscribe, the subscription ratio, the actual
or proposed record date, the date upon which the rights were issued or
are expected to be issued, the actual or anticipated date upon which
they will expire, and the approximate subscription price, or any of the
foregoing;
(12) Any statement or legend required by any state law or
administrative authority; and
(13) A communication concerning the securities of a registered
investment company may also include any one or more of the following
items of information: Offers, descriptions, and explanations of any
products and services not constituting securities subject to
registration under the Securities Act of 1933, and descriptions of
corporations provided that such offers, descriptions and explanations do
not relate directly to the desirability of owning or purchasing a
security issued by a registered investment company and that all direct
references in such communications to a security issued by a registered
investment company contain only the statements required or permitted to
be included therein by the other provisions of this rule, and that all
such direct references be placed in a separate and enclosed area in the
communication.
(14)(i) With respect to any class of debt securities, any class of
convertible debt securities or any class of preferred stock, the
security rating or ratings assigned to the class of securities by any
nationally recognized statistical rating organization and the name or
names of the nationally recognized statistical rating organization(s)
which assigned such rating(s).
(ii) For the purpose of paragraph (a)(14)(i) of this section, the
term nationally recognized statistical rating organization shall have
the same meaning as used in Rule 15c-3-1(c)(2)(vi)(F) under the
Securities Exchange Act of 1934 (17 CFR 240.15c3-1(c)(2)(vi)(F)).
(b) Except as provided in paragraph (c) of this section, every
communication used pursuant to this section shall contain the following:
(1) If the registration statement has not yet become effective, the
following statement:
A registration statement relating to these securities has been filed
with the Securities and Exchange Commission but has not yet become
effective. These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes effective.
This (communication) shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities
laws of any such State.
(2) A statement whether the security is being offered in connection
with a distribution by the issuer or by a security holder, or both, and
whether the issue represents new financing or refunding or both; and
(3) The name and address of a person or persons from whom a written
prospectus meeting the requirements of section 10 of the Act may be
obtained.
(c) Any of the statements or information specified in paragraph (b)
of this section may, but need not, be contained in a communication: (i)
Which does no more than state from whom a written prospectus meeting the
requirements of section 10 of the Act may be obtained, identify the
security, state the price thereof and state by whom orders will be
executed; or (ii) which is accompanied or preceded by a prospectus or a
summary prospectus which meets the requirements of section 10 of the act
at the date of such preliminary communication.
(d) A communication sent or delivered to any person pursuant to this
rule which is accompanied or preceded by a prospectus which meets the
requirements of section 10 of the Act at the date of such communication,
may solicit from the recipient of the communication an offer to buy the
security or request the recipient to indicate, upon an enclosed or
attached coupon or card, or in some other manner, whether he might be
interested in the security, if the communication contains substantially
the following statement:
No offer to buy the securities can be accepted and no part of the
purchase price can be received until the registration statement has
become effective, and any such offer may be withdrawn or revoked,
without obligation or commitment of any kind, at any time prior to
notice of its acceptance given after the effective date. An indication
of interest in response to this advertisement will involve no obligation
or commitment of any kind.
Provided, That such statement need not be included in such a
communication to a dealer if the communication refers to a prior
communication to the dealer, with respect to the same security, in which
the statement was included.
(Sec. 2, 48 Stat. 74, as amended; 15 U.S.C. 77b; secs. 2(10),
10(b), 10(c), 10(d), 10(f), and 19(a) of the 1933 Act (15 U.S.C.
77b(10), 77j(b), 77j(c), 77j(d), 77j(f) and 77s(a); secs. 6, 7, 8, 10,
19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209, 48 Stat. 906, 908;
sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685; sec. 308(a)(2), 90 Stat.
57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48 Stat. 882, 892, 894, 895,
901; secs. 203(a), 1, 3, 8, 49 Stat. 704, 1375, 1377, 1379; sec. 202,
68 Stat. 686; secs. 4, 5, 6(d), 78 Stat. 569, 570-574; secs. 1, 2, 3,
82 Stat. 454, 455; secs. 28(c), 1, 2, 3, 4, 5, 84 Stat. 1435, 1497;
sec. 105(b), 88 Stat. 1503; secs. 8, 9, 10, 89 Stat. 117, 118, 119;
sec. 308(b), 90 Stat 57; sec. 18, 89 Stat. 155; secs. 202, 203, 204,
91 Stat. 1494, 1498-1500; sec. 20(a), 49 Stat. 833; sec. 319, 53
Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C. 77f, 77g, 77h, 77j,
77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 79t(a), 77sss(a), 80a-37;
secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85, secs. 205, 209, 48
Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685; sec. 1,
79 Stat. 1051; sec. 308(a)(2), 90 Stat. 57; secs. 12, 13, 14, 15(d),
23(a), 48 Stat. 892, 895, 901; secs. 1, 3, 8, 49 Stat. 1375, 1377,
1379; sec 203(a), 49 Stat. 704; sec. 202, 68 Stat. 686; secs. 3, 4,
5, 6, 78 Stat. 565-568, 569, 570-574; secs. 1, 2, 3, 82 Stat. 454,
455; secs. 28(c), 1, 2, 3-5, 84 Stat. 1435, 1497; sec. 105(b), 88
Stat. 1503; secs. 8, 9, 10, 18, 89 Stat. 117, 118, 119, 155; sec.
308(b), 90 Stat. 57; secs. 202, 203, 204, 81 Stat. 1494, 1498, 1499,
1500; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 78l, 78m, 78n, 78o(d),
78w(a))
(20 FR 6524, Sept. 3, 1955, as amended at 23 FR 184, Jan. 10, 1958;
37 FR 10073, May 19, 1972; 39 FR 39869, Nov. 12, 1974; 40 FR 27443,
June 30, 1975; 43 FR 47495, Oct. 16, 1978; 44 FR 52818, Sept. 10,
1979; 47 FR 11433, Mar. 16, 1982; 48 FR 19875, May 3, 1983)
17 CFR 230.134a Options material not deemed a prospectus.
Written materials, including advertisements, relating to standardized
options, as that term is defined in Rule 9b-1 under the Securities
Exchange Act of 1934, shall not be deemed to be a prospectus for the
purposes of section 2(10) of the Securities Act of 1933; Provided, That
such materials are limited to explanatory information describing the
general nature of the standardized options markets or one or more
strategies; And, Provided further, That:
(a) The potential risks related to options trading generally and to
each strategy addressed are explained;
(b) No past or projected performance figures, including annualized
rates of return are used;
(c) No recommendation to purchase or sell any option contract is
made;
(d) No specific security is identified, other than
(1) An option or other security exempt from registration under the
Act, or
(2) An index option, including the component securities of the index;
and
(e) If there is a definitive options disclosure document, as defined
in Rule 9b-1 under the Securities Exchange Act of 1934, the materials
shall contain the name and address of a person or persons from whom a
copy of such document may be obtained.
(15 U.S.C. 77a et seq.; secs. 2, 7, 10, 19(a), 48 Stat. 74, 78, 81,
85; secs. 201, 205, 209, 210, 48 Stat. 905, 906, 908; secs. 1-4. 8,
68 Stat. 683, 685; sec. 12(a), 73 Stat. 143; sec. 7(a), 74 Stat. 412;
sec. 27(a), 84 Stat. 1433; sec. 308(a)(2), 90 Stat. 57)
(47 FR 41955, Sept. 23, 1982, as amended at 49 FR 12688, Mar. 30,
1984)
17 CFR 230.135 Notice of certain proposed offerings.
(a) For the purpose only of section 5 of the Act, a notice given by
an issuer that it proposes to make a public offering of securities to be
registered under the Act shall not be deemed to offer any securities for
sale if such notice states that the offering will be made only by means
of a prospectus and contains no more than the following additional
information:
(1) The name of the issuer;
(2) The title, amount, and basic terms of the securities proposed to
be offered, the amount of the offering, if any, to be made by selling
security holders, the anticipated time of the offering and a brief
statement of the manner and purpose of the offering without naming the
underwriters;
(3) In the case of a rights offering to security holders of the
issuer, the class of securities the holders of which will be entitled to
subscribe to the securities proposed to be offered, the subscription
ratio, the proposed record date, the approximate date upon which the
rights are proposed to be issued, the proposed term or expiration date
of the rights and the approximate subscription price, or any of the
foregoing;
(4) In the case of an offering of securities in exchange for other
securities of the issuer or of another issuer, the name of the issuer
and the title of the securities to be surrendered in exchange for the
securities to be offered, the basis upon which the exchange may be made,
or any of the foregoing;
(5) In the case of an offering to employees of the issuer or to
employees of any affiliate of the issuer, the name of the employer and
class or classes of employees to whom the securities are proposed to be
offered, the offering price or basis of the offering and the period
during which the offering is to be made, or any of the foregoing; and
(6) Any statement or legend required by State law or administrative
authority.
(b) Any notice contemplated by this section may take the form of a
news release or a written communication directed to security holders or
employees, as the case may be, or other published statement.
(c) Notwithstanding the provisions of paragraphs (a) and (b) of this
section, in the case of a rights offering of a security listed or
subject to unlisted trading privileges on a national securities exchange
or quoted on the NASDAQ inter-dealer quotation system information with
respect to the interest rate, conversion ratio and subscription price
may be disseminated through the facilities of the exchange, the
consolidated transaction reporting system, the NASDAQ system or the Dow
Jones broad tape, provided such information is already disclosed in a
registration statement on file with the Commission.
(15 U.S.C. 77d; secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85;
secs. 205, 209, 48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68
Stat. 685; sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d),
23(a), 48 Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49
Stat. 704, 1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5,
6(d), 78 Stat. 569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs.
28(c), 1, 2, 3, 4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503;
secs. 8, 9, 10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec.
18, 89 Stat. 155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec.
20(a), 49 Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841;
15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d),
78w(a), 79t(a), 77sss(a), 80a-37)
(35 FR 18456, Dec. 4, 1970, as amended at 47 FR 11433, Mar. 16, 1982)
17 CFR 230.135a Generic advertising.
(a) For the purposes only of section 5 of the Act, a notice,
circular, advertisement, letter, sign, or other communication, published
or transmitted to any person which does not specifically refer by name
to the securities of a particular investment company, to the investment
company itself, or to any other securities not exempt under section 3(a)
of the Act, will not be deemed to offer any security for sale, provided:
(1) Such communication is limited to any one or more of the
following:
(i) Explanatory information relating to securities of investment
companies generally or to the nature of investment companies, or to
services offered in connection with the ownership of such securities,
(ii) The mention or explanation of investment companies of different
generic types or having various investment objectives, such as balanced
funds, growth funds, income funds, leveraged funds, specialty funds,
variable annuities, bond funds, and no-load funds,
(iii) Offers, descriptions, and explanation of various products and
services not constituting a security subject to registration under the
Act: Provided, That such offers, descriptions, and explanations do not
relate directly to the desirability of owning or purchasing a security
issued by a registered investment company,
(iv) Invitation to inquire for further information, and
(2) Such communication contains the name and address of a registered
broker or dealer or other person sponsoring the communication.
(b) If such communication contains a solicitation of inquiries and
prospectuses for investment company securities are to be sent or
delivered in response to such inquiries, the number of such investment
companies and, if applicable, the fact that the sponsor of the
communication is the principal underwriter or investment adviser in
respect to such investment companies shall be stated.
(c) With respect to any communication describing any type of
security, service, or product, the broker, dealer, or other person
sponsoring such communication must offer for sale a security, service,
or product of the type described in such communication.
(37 FR 10073, May 19, 1972, as amended at 37 FR 10931, June 1, 1972)
17 CFR 230.135b Materials not deemed an offer to sell or offer to buy.
For the purposes only of section 5 of the Act, materials meeting the
requirements of Rule 9b-1 of the Securities Exchange Act of 1934 shall
not be deemed to constitute an offer to sell or offer to buy any
security.
(15 U.S.C. 77a et seq.)
(47 FR 41955, Sept. 23, 1982)
17 CFR 230.136 Definition of certain terms in relation to assessable
stock.
(a) An offer, offer to sell, or offer for sale of securities shall be
deemed to be made to the holders of assessable stock of a corporation
when such corporation shall give notice of an assessment to the holders
of such assessable stock. A sale shall be deemed to occur when a
stockholder shall pay or agree to pay all or any part of such an
assessment.
(b) The term transactions by any person other than an issuer,
underwriter or dealer in section 4(1) of the Act shall not be deemed to
include the offering or sale of assessable stock, at public auction or
otherwise, upon the failure of the holder of such stock to pay an
assessment levied thereon by the issuer, where the offer or sale is made
for the purpose of realizing the amount of the assessment and any of the
proceeds of such sale are to be received by the issuer. However, any
person whose functions are limited to acting as auctioneer at such an
auction sale shall not be deemed to be an underwriter of the securities
offered or sold at the auction sale. Any person who acquires assessable
stock at any such public auction or other sale with a view to the
distribution thereof shall be deemed to be an underwriter of such
assessable stock.
(c) The term assessable stock means stock which is subject to resale
by the issuer pursuant to statute or otherwise in the event of a failure
of the holder of such stock to pay any assessment levied thereon.
(24 FR 6386, Aug. 8, 1959)
17 CFR 230.137 Definition of ''offers'', ''participates'', or
''participation'' in section 2(11) in relation to certain publications
by persons independent of participants in a distribution.
The terms offers, participates, or participation in section 2(11) of
the Act shall not be deemed to apply to the publication or distribution
of information, opinions or recommendations with respect to the
securities of a registrant which is required to file reports pursuant to
section 13 or 15(d) of the Securities Exchange Act of 1934 and proposes
to file, has filed or has an effective registration statement under the
Securities Act of 1933 if --
(a) Such information, opinions, and recommendations are published and
distributed in the regular course of its business by a broker or dealer
which is not and does not propose to be a participant in the
distribution of the security to which the registration statement
relates; and
(b) Such broker or dealer receives no consideration, directly or
indirectly, in connection with the publication and distribution of such
information, opinions or recommendations from the registrant, a selling
security holder or any participant in the distribution or any other
person interested in the securities to which the registration statement
relates, and such information, opinions or recommendations are not
published or distributed pursuant to any arrangement or understanding,
direct or indirect, with such registrant, underwriter, dealer, or
selling security holder; Provided, however, That nothing herein shall
forbid payment of the regular subscription or purchase price of the
document or other written communication in which such information,
opinions or recommendations appear.
(Secs. 6, 7, 10, 19(a), 48 Stat. 78, 81, 85; secs. 205, 109, 48
Stat. 906, 908; sec. 8, 68 Stat. 685; sec. 308(a)(2), 90 Stat. 57; 15
U.S.C. 77f, 77g, 77j, 77s(a))
(49 FR 37573, Sept. 25, 1984)
17 CFR 230.138 Definition of ''offer for sale'' and ''offer to sell''
in sections 2(10) and 5(c) in relation to certain publications.
(a) Where a registrant which meets all of the conditions for the use
of Form S-2 ( 239.12 of this chapter) or Form F-2 ( 239.32 of this
chapter) proposes to file, has filed or has an effective registration
statement under the Act relating solely to a nonconvertible debt
security or to a nonconvertible, nonparticipating preferred stock,
publication or distribution in the regular course of its business by a
broker or dealer of information, opinions or recommendations relating
solely to common stock or to debt or preferred stock convertible into
common stock of such registrant shall not be deemed to constitute an
offer for sale or offer to sell the security to which such registration
statement relates for purposes of sections 2(10) and 5(c) of the Act
even though such broker or dealer is or will be a participant in the
distribution of the security to which such registration statement
relates.
(b) Where a registrant which meets all of the conditions for the use
of Form S-2 ( 239.12 of this chapter) or Form F-2 ( 239.32 of this
chapter) proposes to file, has filed or has an effective registration
statement under the Act relating solely to common stock or to debt or
preferred stock convertible into common stock, the publication or
distribution in the regular course of its business by a broker or dealer
of information, opinions or recommendations relating solely to a
nonconvertible debt security, or to a nonconvertible nonparticipating
preferred stock shall not be deemed to constitute an offer for sale or
offer to sell the security to which such registration statement relates
for purposes of sections 2(10) and 5(c) of the Act, even though such
broker or dealer is or will be a participant in the distribution of the
security to which such registration statement relates.
(Secs. 6, 7, 10, 19(a), 48 Stat. 78, 81, 85; secs. 205, 109, 48
Stat. 906, 908; sec. 8, 68 Stat. 685; sec. 308(a)(2), 90 Stat. 57; 15
U.S.C. 77f, 77g, 77j, 77s(a))
(49 FR 37573, Sept. 25, 1984)
17 CFR 230.139 Definition of ''offer for sale'' and ''offer to sell''
in sections 2(10) and 5(c) in relation to certain publications.
Where a registrant which is required to file reports pursuant to
section 13 or 15(d) of the Securities Exchange Act of 1934 proposes to
file, has filed or has an effective registration statement under the
Securities Act of 1933 relating to its securities, the publication or
distribution by a broker or dealer of information, an opinion or a
recommendation with respect to the registrant or any class of its
securities shall not be deemed to constitute an offer for sale or offer
to sell the securities registered or proposed to be registered for
purposes of sections 2(10) and 5(c) of the Act, even though such broker
or dealer is or will be a participant in the distribution of such
securities, if the conditions of paragraph (a) or (b) have been met:
(a) The registrant meets the registrant requirements of Form S-3 (
239.13 of this chapter) or Form F-3 ( 239.33 of this chapter) and the
minimum float or investment grade securities provisions of either
paragraph (B) (1) or (2) of General Instruction I of the respective form
and such information, opinion or recommendation is contained in a
publication which is distributed with reasonable regularity in the
normal course of business; or
(b)(1) Such information, opinion or recommendation is contained in a
publication which:
(i) Is distributed with reasonable regularity in the normal course of
business and
(ii) Includes similar information, opinions or recommendations with
respect to a substantial number of companies in the registrant's
industry, or sub-industry, or contains a comprehensive list of
securities currently recommend by such broker or dealer.
(2) Such information, opinion or recommendation is given no
materially greater space or prominence in such publication than that
given to other securities or registrants; and
(3) An opinion or recommendation as favorable or more favorable as to
the registrant or any class of its securities was published by the
broker or dealer in the last publication of such broker or dealer
addressing the registrant or its securities prior to the commencement of
participation in the distribution.
1. For purposes of paragraph (a), a research report has not been
distributed with reasonable regularity if it contains information, an
opinion, or a recommendation concerning a company with respect to which
a broker or dealer currently is not publishing research.
2. Where projections of a registrant's sales or earnings are
included, the publication must comply with the following in order to
meet paragraphs (b)(1) and (b)(3).
A. The projections must have been published previously on a regular
basis in order for the publication to meet paragraph (b)(1)(i);
B. The projections must be included with respect to either a
substantial number of companies in the registrant's industry or
sub-industry or all companies in a comprehensive list which is contained
in the publication, and must cover the same periods with respect to such
companies as with respect to the registrant, in order to meet the
requirements of paragraph (b)(1)(ii); and
C. Because projections constitute opinions within the meaning of the
Rule, they must come within paragraph (b)(3).
(Secs. 6, 7, 10, 19(a), 48 Stat. 78, 81, 85; secs. 205, 109, 48
Stat. 906, 908; sec. 8, 68 Stat. 685; sec. 308(a)(2), 90 Stat. 57; 15
U.S.C. 77f, 77g, 77j, 77s(a))
(49 FR 37573, Sept. 25, 1984)
17 CFR 230.140 Definition of ''distribution'' in section 2(11) for
certain transactions.
A person, the chief part of whose business consists of the purchase
of the securities of one issuer, or of two or more affiliated issuers,
and the sale of its own securities, including the levying of assessments
on its assessable stock and the resale of such stock upon the failure of
the holder thereof to pay any assessment levied thereon, to furnish the
proceeds with which to acquire the securities of such issuer or
affiliated issuers, is to be regarded as engaged in the distribution of
the securities of such issuer or affiliated issuers within the meaning
of section 2(11) of the Act.
(24 FR 6386, Aug. 8, 1959)
17 CFR 230.141 Definition of ''commission from an underwriter or dealer
not in excess of the usual and customary distributors' or sellers'
commissions'' in section 2(11), for certain transactions.
(a) The term commission in section 2(11) of the Act shall include
such remuneration, commonly known as a spread, as may be received by a
distributor or dealer as a consequence of reselling securities bought
from an underwriter or dealer at a price below the offering price of
such securities, where such resales afford the distributor or dealer a
margin of profit not in excess of what is usual and customary in such
transactions.
(b) The term commission from an underwriter or dealer in section
2(11) of the Act shall include commissions paid by an underwriter or
dealer directly or indirectly controlling or controlled by, or under
direct or indirect common control with the issuer.
(c) The term usual and customary distributors' or sellers' commission
in section 2(11) of the Act shall mean a commission or remuneration,
commonly known as a spread, paid to or received by any person selling
securities either for his own account or for the account of others,
which is not in excess of the amount usual and customary in the
distribution and sale of issues of similar type and size; and not in
excess of the amount allowed to other persons, if any, for comparable
service in the distribution of the particular issue; but such term
shall not include amounts paid to any person whose function is the
management of the distribution of all or a substantial part of the
particular issue, or who performs the functions normally performed by an
underwriter or underwriting syndicate.
(2 FR 1075, May 26, 1937)
17 CFR 230.142 Definition of ''participates'' and ''participation,'' as
used in section 2(11), in relation to certain transactions.
(a) The terms participates and participation in section 2(11) (48
Stat. 74, 48 Stat. 905; 15 U.S.C. 77b) shall not include the interest
of a person (1) who is not in privity of contract with the issuer nor
directly or indirectly controlling, controlled by, or under common
control with, the issuer, and (2) who has no association with any
principal underwriter of the securities being distributed, and (3) whose
function in the distribution is confined to an undertaking to purchase
all or some specified proportion of the securities remaining unsold
after the lapse of some specified period of time, and (4) who purchases
such securities for investment and not with a view to distribution.
(b) As used in this section:
(1) The term issuer shall have the meaning defined in section 2(4)
(48 Stat. 74, 48 Stat. 905; 15 U.S.C. 77b) and in the last sentence of
section 2(11).
(2) The term association shall include a relationship between two
persons under which one:
(i) Is directly or indirectly controlling, controlled by, or under
common control with, the other, or
(ii) Has, in common with the other, one or more partners, officers,
directors, trustees, branch managers, or other persons occupying a
similar status or performing similar functions, or
(iii) Has a participation, direct or indirect, in the profits of the
other, or has a financial stake, by debtor-creditor relationship, stock
ownership, contract or otherwise, in the income or business of the
other.
(3) The term principal underwriter shall have the meaning defined in
230.405.
(3 FR 3015, Dec. 16, 1938)
Cross Reference: For interpretative release applicable to 230.142,
see No. 1862 in tabulation, Part 231, of this chapter.
17 CFR 230.143 Definition of ''has purchased'', ''sells for'',
''participates'', and ''participation'', as used in section 2(11), in
relation to certain transactions of foreign governments for war
purposes.
The terms has purchased, sells for, participates, and participation,
in section 2(11) (48 Stat. 74, 48 Stat. 905; 15 U.S.C. 77b), shall not
be deemed to apply to any action of a foreign government in acquiring,
for war purposes and by or in anticipation of the exercise of war
powers, from any person subject to its jurisdiction securities of a
person organized under the laws of the United States or any State or
Territory, or in disposing of such securities with a view to their
distribution by underwriters in the United States, notwithstanding the
fact that the price to be paid to such foreign government upon the
disposition of such securities by it may be measured by or may be in
direct or indirect relation to such price as may be realized by the
underwriters.
(6 FR 2052, Apr. 23, 1941)
17 CFR 230.144 Persons deemed not to be engaged in a distribution and
therefore not underwriters.
Rule 144 is designed to implement the fundamental purposes of the
Act, as expressed in its preamble, To provide full and fair disclosure
of the character of the securities sold in interstate commerce and
through the mails, and to prevent fraud in the sale thereof * * * The
rule is designed to prohibit the creation of public markets in
securities of issuers concerning which adequate current information is
not available to the public. At the same time, where adequate current
information concerning the issuer is available to the public, the rule
permits the public sale in ordinary trading transactions of limited
amounts of securities owned by persons controlling, controlled by or
under common control with the issuer and by persons who have acquired
restricted securities of the issuer.
Certain basic principles are essential to an understanding of the
requirement of registration in the Act:
1. If any person utilizes the jurisdictional means to sell any
nonexempt security to any other person, the security must be registered
unless a statutory exemption can be found for the transaction.
2. In addition to the exemptions found in section 3, four exemptions
applicable to transactions in securities are contained in section 4.
Three of these section 4 exemptions are clearly not available to anyone
acting as an underwriter of securities. (The fourth, found in section
4(4), is available only to those who act as brokers under certain
limited circumstances.) An understanding of the term underwriter is
therefore important to anyone who wishes to determine whether or not an
exemption from registration is available for his sale of securities.
The term underwriter is broadly defined in section 2(11) of the Act
to mean any person who has purchased from an issuer with a view to, or
offers or sells for an issuer in connection with, the distribution of
any security, or participates, or has a direct or indirect participation
in any such undertaking, or participates or has a participation in the
direct or indirect underwriting of any such undertaking. The
interpretation of this definition has traditionally focused on the words
with a view to in the phrase purchased from an issuer with a view to * *
* distribution. Thus, an investment banking firm which arranges with an
issuer for the public sale of its securities is clearly an underwriter
under that section. Individual investors who are not professionals in
the securities business may also be underwriters within the meaning of
that term as used in the Act if they act as links in a chain of
transactions through which securities move from an issuer to the public.
Since it is difficult to ascertain the mental state of the purchaser at
the time of his acquisition, subsequent acts and circumstances have been
considered to determine whether such person took with a view to
distribution at the time of his acquisition. Emphasis has been placed
on factors such as the length of time the person has held the securities
and whether there has been an unforeseeable change in circumstances of
the holder. Experience has shown, however, that reliance upon such
factors as the above has not assured adequate protection of investors
through the maintenance of informed trading markets and has led to
uncertainty in the application of the registration provisions of the
Act.
It should be noted that the statutory language of section 2(11) is in
the disjunctive. Thus, it is insufficient to conclude that a person is
not an underwriter solely because he did not purchase securities from an
issuer with a view to their distribution. It must also be established
that the person is not offering or selling for an issuer in connection
with the distribution of the securities, does not participate or have a
direct or indirect participation in any such undertaking, and does not
participate or have a participation in the direct or indirect
underwriting of such an undertaking.
In determining when a person is deemed not to be engaged in a
distribution several factors must be considered.
First, the purpose and underlying policy of the Act to protect
investors requires that there be adequate current information concerning
the issuer, whether the resales of securities by persons result in a
distribution or are effected in trading transactions. Accordingly, the
availability of the rule is conditioned on the existence of adequate
current public information.
Secondly, a holding period prior to resale is essential, among other
reasons, to assure that those persons who buy under a claim of a section
4(2) exemption have assumed the economic risks of investment, and
therefore are not acting as conduits for sale to the public of
unregistered securities, directly or indirectly, on behalf of an issuer.
It should be noted that there is nothing in section 2(11) which places
a time limit on a person's status as an underwriter. The public has the
same need for protection afforded by registration whether the securities
are distributed shortly after their purchase or after a considerable
length of time.
A third factor, which must be considered in determining what is
deemed not to constitute a distribution, is the impact of the particular
transaction or transactions on the trading markets. Section 4(1) was
intended to exempt only routine trading transactions between individual
investors with respect to securities already issued and not to exempt
distributions by issuers or acts of other individuals who engage in
steps necessary to such distributions. Therefore, a person reselling
securities under section 4(1) of the Act must sell the securities in
such limited quantities and in such a manner as not to disrupt the
trading markets. The larger the amount of securities involved, the more
likely it is that such resales may involve methods of offering and
amounts of compensation usually associated with a distribution rather
than routine trading transactions. Thus, solicitation of buy orders or
the payment of extra compensation are not permitted by the rule.
In summary, if the sale in question is made in accordance with all of
the provisions of the section as set forth below, any person who sells
restricted securities shall be deemed not to be engaged in a
distribution of such securities and therefore not an underwriter
thereof. The rule also provides that any person who sells restricted or
other securities on behalf of a person in a control relationship with
the issuer shall be deemed not to be engaged in a distribution of such
securities and therefore not to be an underwriter thereof, if the sale
is made in accordance with all the conditions of the section.
(a) Definitions. The following definitions shall apply for the
purposes of this section.
(1) An affiliate of an issuer is a person that directly, or
indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such issuer.
(2) The term person when used with reference to a person for whose
account securities are to be sold in reliance upon this section
includes, in addition to such person, all of the following persons:
(i) Any relative or spouse of such person, or any relative of such
spouse, any one of whom has the same home as such person;
(ii) Any trust or estate in which such person or any of the persons
specified in paragraph (a)(2)(i) of this section collectively own 10
percent or more of the total beneficial interest or of which any of such
persons serve as trustee, executor or in any similar capacity; and
(iii) Any corporation or other organization (other than the issuer)
in which such person or any of the persons specified in paragraph
(a)(2)(i) of this section are the beneficial owners collectively of 10
percent or more of any class of equity securities or 10 percent or more
of the equity interest.
(3) The term restricted securities means:
(i) Securities that are acquired directly or indirectly from the
issuer, or from an affiliate of the issuer, in a transaction or chain of
transactions not involving any public offering; or
(ii) Securities acquired from the issuer that are subject to the
resale limitations of Regulation D ( 230.501 through 230.506 of this
chapter) or Rule 701(c) ( 230.701(c) of this chapter) under the Act; or
(iii) Securities that are subject to the resale limitations of
Regulation D and acquired in a transaction or chain of transactions not
involving any public offering; or
(iv) Securities that are acquired in a transaction or chain of
transactions meeting the requirements of Rule 144A ( 230.144A of this
chapter).
(b) Conditions to be met. Any affiliate or other person who sells
restricted securities of an issuer for his own account, or any person
who sells restricted or any other securities for the account of an
affiliate of the issuer of such securities, shall be deemed not to be
engaged in a distribution of such securities and therefore not to be an
underwriter thereof within the meaning of section 2(11) of the Act if
all of the conditions of this section are met.
(c) Current public information. There shall be available adequate
current public information with respect to the issuer of the securities.
Such information shall be deemed to be available only if either of the
following conditions is met:
(1) Filing of reports. The issuer has securities registered pursuant
to section 12 of the Securities Exchange Act of 1934, has been subject
to the reporting requirements of section 13 of that Act for a period of
at least 90 days immediately preceding the sale of the securities and
has filed all the reports required to be filed thereunder during the 12
months preceding such sale (or for such shorter period that the issuer
was required to file such reports); or has securities registered
pursuant to the Securities Act of 1933, has been subject to the
reporting requirements of section 15(d) of the Securities Exchange Act
of 1934 for a period of at least 90 days immediately preceding the sale
of the securities and has filed all the reports required to be filed
thereunder during the 12 months preceding such sale (or for such shorter
period that the issuer was required to file such reports). The person
for whose account the securities are to be sold shall be entitled to
rely upon a statement in whichever is the most recent report, quarterly
or annual, required to be filed and filed by the issuer that such issuer
has filed all reports required to be filed by section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the issuer was required to file such reports)
and has been subject to such filing requirements for the past 90 days,
unless he knows or has reason to believe that the issuer has not
complied with such requirements. Such person shall also be entitled to
rely upon a written statement from the issuer that it has complied with
such reporting requirements unless he knows or has reasons to believe
that the issuer has not complied with such requirements.
(2) Other public information. If the issuer is not subject to
section 13 or 15(d) of the Securities Exchange Act of 1934, there is
publicly available the information concerning the issuer specified in
paragraphs (a)(5)(i) to (xiv), inclusive, and paragraph (a)(5)(xvi) of
Rule 15c2-11 ( 240.15c2-11 of this chapter) under that Act or, if the
issuer is an insurance company, the information specified in section
12(g)(2)(G)(i) of that Act.
(d) Holding period for restricted securities. If the securities sold
are restricted securities, the following provisions apply:
(1) General rule. A minimum of two years must elapse between the
later of the date of the acquisition of the securities from the issuer
or from an affiliate of the issuer, and any resale of such securities in
reliance on this section for the account of either the acquiror or any
subsequent holder of those securities, and if the acquiror takes the
securities by purchase, the two-year period shall not begin until the
full purchase price or other consideration is paid or given by the
person acquiring the securities from the issuer or from an affiliate of
the issuer.
(2) Promissory notes, other obligations or installment contracts.
Giving the issuer or affiliate of the issuer from whom the securities
were purchased a promissory note or other obligation to pay the purchase
price, or entering into an installment purchase contract with such
seller, shall not be deemed full payment of the purchase price unless
the promissory note, obligation or contract:
(3) Determination of holding period. The following provisions shall
apply for the purpose of determining the period securities have been
held:
(i) Stock dividends, splits and recapitalizations. Securities
acquired from the issuer as a dividend or pursuant to a stock split,
reverse split or recapitalization shall be deemed to have been acquired
at the same time as the securities on which the dividend or, if more
than one, the initial dividend was paid, the securities involved in the
split or reverse split, or the securities surrendered in connection with
the recapitalization;
(ii) Conversions. If the securities sold were acquired from the
issuer for a consideration consisting solely of other securities of the
same issuer surrendered for conversion, the securities so acquired shall
be deemed to have been acquired at the same time as the securities
surrendered for conversion;
(iii) Contingent issuance of securities. Securities acquired as a
contingent payment of the purchase price of an equity interest in a
business, or the assets of a business, sold to the issuer or an
affiliate of the issuer shall be deemed to have been acquired at the
time of such sale if the issuer or affiliate was then committed to issue
the securities subject only to conditions other than the payment of
further consideration for such securities. An agreement entered into in
connection with any such purchase to remain in the employment of, or not
to compete with, the issuer or affiliate or the rendering of services
pursuant to such agreement shall not be deemed to be the payment of
further consideration for such securities.
(iv) Pledged securities. Securities which are bona-fide pledged by
an affiliate of the issuer when sold by the pledgee, or by a purchaser,
after a default in the obligation secured by the pledge, shall be deemed
to have been acquired when they were acquired by the pledgor, except
that if the securities were pledged without recourse they shall be
deemed to have been acquired by the pledgee at the time of the pledge or
by the purchaser at the time of purchase.
(v) Gifts of securities. Securities acquired from an affiliate of
the issuer by gift shall be deemed to have been acquired by the donee
when they were acquired by the donor.
(vi) Trusts. Where a trust settlor is an affiliate of the issuer,
securities acquired from the settlor by the trust, or acquired from the
trust by the beneficiaries thereof, shall be deemed to have been
acquired when such securities were acquired by the settlor.
(vii) Estates. Where a deceased person was an affiliate of the
issuer, securities held by the estate of such person or acquired from
such estate by the beneficiaries thereof shall be deemed to have been
acquired when they were acquired by the deceased person, except that no
holding period is required if the estate is not an affiliate of the
issuer or if the securities are sold by a beneficiary of the estate who
is not such an affiliate.
Note: While there is no holding period or amount limitation for
estates and beneficiaries thereof which are not affiliates of the
issuer, paragraphs (c), (h) and (i) of the rule apply to securities sold
by such persons in reliance upon the rule.
(viii) Rule 145(a) transactions. The holding period for securities
acquired in a transaction specified in Rule 145(a) shall be deemed to
commence on the date the securities were acquired by the purchaser in
such transaction. This provision shall not apply, however, to a
transaction effected solely for the purpose of forming a holding
company.
(e) Limitation on amount of securities sold. Except as hereinafter
provided, the amount of securities which may be sold in reliance upon
this rule shall be determined as follows:
(1) Sales by affiliates. If restricted or other securities are sold
for the account of an affiliate of the issuer, the amount of securities
sold, together with all sales of restricted and other securities of the
same class for the account of such person within the preceding three
months, shall not exceed the greater of
(i) One percent of the shares or other units of the class outstanding
as shown by the most recent report or statement published by the issuer,
or
(ii) The average weekly reported volume of trading in such securities
on all national securities exchanges and/or reported through the
automated quotation system of a registered securities association during
the four calendar weeks preceding the filing of notice required by
paragraph (h), or if no such notice is required the date of receipt of
the order to execute the transaction by the broker or the date of
execution of the transaction directly with a market maker, or
(iii) The average weekly volume of trading in such securities
reported through the consolidated transaction reporting system
contemplated by Rule 11Aa3-1 under the Securities Exchange Act of 1934 (
240.11A3-1) during the four-week period specified in paragraph
(e)(1)(ii) of this section.
(2) Sales by persons other than affiliates. The amount of restricted
securities sold for the account of any person other than an affiliate of
the issuer, together with all other sales of restricted securities of
the same class for the account of such person within the preceding three
months, shall not exceed the amount specified in paragraphs (e)(1) (i),
(ii) or (iii) of this section, whichever is applicable, unless the
conditions of paragraph (k) of this rule are satisfied.
(3) Determination of amount. For the purpose of determining the
amount of securities specified in paragraphs (e) (1) and (2) of this
section, the following provisions shall apply:
(i) Where both convertible securities and securities of the class
into which they are convertible are sold, the amount of convertible
securities sold shall be deemed to be the amount of securities of the
class into which they are convertible for the purpose of determining the
aggregate amount of securities of both classes sold;
(ii) The amount of securities sold for the account of a pledgee
thereof, or for the account of a purchaser of the pledged securities,
during any period of 3 months within 2 years after a default in the
obligation secured by the pledge, and the amount of securities sold
during the same 3-month period for the account of the pledgor shall not
exceed, in the aggregate, the amount specified in paragraph (e) (1) or
(2) of this section, whichever is applicable.
(iii) The amount of securities sold for the account of a donee
thereof during any period of 3 months within 2 years after the donation,
and the amount of securities sold during the same 3-month period for the
account of the donor, shall not exceed, in the aggregate, the amount
specified in paragraph (e) (1) or (2) of this section, whichever is
applicable;
(iv) Where securities were acquired by a trust from the settlor of
the trust, the amount of such securities sold for the account of the
trust during any period of 3 months within 2 years after the acquisition
of the securities by the trust, and the amount of securities sold during
the same 3-month period for the account of the settlor, shall not
exceed, in the aggregate, the amount specified in paragraph (e) (1) or
(2) of this section, whichever is applicable;
(v) The amount of securities sold for the account of the estate of a
deceased person, or for the account of a beneficiary of such estate,
during any period of 3 months and the amount of securities sold during
the same period for the account of the deceased person prior to his
death shall not exceed, in the aggregate, the amount specified in
paragraph (e) (1) or (2) of this section, whichever is applicable:
Provided, That no limitation on amount shall apply if the estate or
beneficiary thereof is not an affiliate of the issuer;
(vi) When two or more affiliates or other persons agree to act in
concert for the purpose of selling securities of an issuer, all
securities of the same class sold for the account of all such persons
during any period of 3 months shall be aggregated for the purpose of
determining the limitation on the amount of securities sold;
(vii) Securities sold pursuant to an effective registration statement
under the Act or pursuant to an exemption provided by Regulation A under
the Act or in a transaction exempt pursuant to section 4 of the Act and
not involving any public offering need not be included in determining
the amount of securities sold in reliance upon this rule.
(f) Manner of sale. The securities shall be sold in brokers'
transactions within the meaning of section 4(4) of the Act or in
transactions directly with a market maker, as that term is defined in
section 3(a)(38) of the Securities Exchange Act of 1934, and the person
selling the securities shall not (1) solicit or arrange for the
solicitation of orders to buy the securities in anticipation of or in
connection with such transaction, or (2) make any payment in connection
with the offer or sale of the securities to any person other than the
broker who executes an order to sell the securities. The requirements
of this paragraph, however, shall not apply to securities sold for the
account of the estate of a deceased person or for the account of a
beneficiary of such estate provided the estate or beneficiary thereof is
not an affiliate of the issuer; nor shall they apply to securities sold
for the account of any person other than an affiliate of the issuer
provided the conditions of paragraph (k) of this rule are satisfied.
(g) Brokers' transactions. The term brokers' transactions in section
4(4) of the Act shall for the purposes of this rule be deemed to include
transactions by a broker in which such broker:
(1) Does not more than execute the order or orders to sell the
securities as agent for the person for whose account the securities are
sold; and receives no more than the usual and customary broker's
commission;
(2) Neither solicits nor arranges for the solicitation of customers'
orders to buy the securities in anticipation of or in connection with
the transaction; provided, that the foregoing shall not preclude (i)
inquiries by the broker of other brokers or dealers who have indicated
an interest in the securities within the preceding 60 days, (ii)
inquiries by the broker of his customers who have indicated an
unsolicited bona fide interest in the securities within the preceding 10
business days; or (iii) the publication by the broker of bid and ask
quotations for the security in an inter-dealer quotation system provided
that such quotations are incident to the maintenance of a bona fide
inter-dealer market for the security for the broker's own account and
that the broker has published bona fide bid and ask quotations for the
security in an inter-dealer quotation system on each of at least twelve
days within the preceding thirty calendar days with no more than four
business days in succession without such two-way quotations;
Note to paragraph (g)(2)(ii): The broker should obtain and retain in
his files written evidence of indications of bona fide unsolicited
interest by his customers in the securities at the time such indications
are received.
(3) After reasonable inquiry is not aware of circumstances indicating
that the person for whose account the securities are sold is an
underwriter with respect to the securities or that the transaction is a
part of a distribution of securities of the issuer. Without limiting
the foregoing, the broker shall be deemed to be aware of any facts or
statements contained in the notice required by paragraph (h) of this
section.
Notes: (i) The broker, for his own protection, should obtain and
retain in his files a copy of the notice required by paragraph (h) of
this section.
(ii) The reasonable inquiry required by paragraph (g)(3) of this
section should include, but not necessarily be limited to, inquiry as to
the following matters:
(a) The length of time the securities have been held by the person
for whose account they are to be sold. If practicable, the inquiry
should include physical inspection of the securities;
(b) The nature of the transaction in which the securities were
acquired by such person;
(c) The amount of securities of the same class sold during the past 3
months by all persons whose sales are required to be taken into
consideration pursuant to paragraph (e) of this section;
(d) Whether such person intends to sell additional securities of the
same class through any other means;
(e) Whether such person has solicited or made any arrangement for the
solicitation of buy orders in connection with the proposed sale of
securities;
(f) Whether such person has made any payment to any other person in
connection with the proposed sale of the securities; and
(g) The number of shares or other units of the class outstanding, or
the relevant trading volume.
(h) Notice of proposed sale. If the amount of securities to be sold
in reliance upon the rule during any period of three months exceeds 500
shares or other units or has an aggregate sale price in excess of
$10,000, three copies of a notice on Form 144 shall be filed with the
Commission at its principal office in Washington, DC; and if such
securities are admitted to trading on any national securities exchange,
one copy of such notice shall also be transmitted to the principal
exchange on which such securities are so admitted. The Form 144 shall
be signed by the person for whose account the securities are to be sold
and shall be transmitted for filing concurrently with either the placing
with a broker of an order to execute a sale of securities in reliance
upon this rule or the execution directly with a market maker of such a
sale. Neither the filing of such notice nor the failure of the
Commission to comment thereon shall be deemed to preclude the Commission
from taking any action it deems necessary or appropriate with respect to
the sale of the securities referred to in such notice. The requirements
of this paragraph, however, shall not apply to securities sold for the
account of any person other than an affiliate of the issuer, provided
the conditions of paragraph (k) of this rule are satisfied.
(i) Bona fide intention to sell. The person filing the notice
required by paragraph (h) of this section shall have a bona fide
intention to sell the securities referred to therein within a reasonable
time after the filing of such notice.
(j) Non-exclusive rule. Although this rule provides a means for
reselling restricted securities and securities held by affiliates
without registration, it is not the exclusive means for reselling such
securities in that manner. Therefore, it does not eliminate or
otherwise affect the availability of any exemption for resales under the
Securities Act that a person or entity may be able to rely upon.
(k) Termination of certain restrictions on sales of restricted
securities by persons other than affiliates. The requirements of
paragraphs (c), (e), (f) and (h) of this rule shall not apply to
restricted securities sold for the account of a person who is not an
affiliate of the issuer at the time of the sale and has not been an
affiliate during the preceding three months, provided a period of at
least three years has elapsed since the later of the date the securities
were acquired from the issuer or from an affiliate of the issuer. In
computing the three-year period for purposes of this provision,
reference should be made to paragraph (d) of this section.
(Secs. 2(11), 4(1), 4(4), 19(a), 19(c), 48 Stat. 74, 75, 77, 85;
secs. 201, 203, 209, 210, 48 Stat. 904, 906, 908; secs. 1-4, 6, 68
Stat. 683, 684; sec. 12, 78 Stat. 580, 84 Stat. 1480; sec. 308(a)(2),
90 Stat. 58 (15 U.S.C. 77b(11), 77d(1), 77d(4), 77s(a); sec. 209, 59
Stat. 167; sec. 3(b), 48 Stat. 75; sec. 308(a) (1), (2), (3), 90 Stat.
56, 57; secs. 2, 18, 92 Stat. 275, 962; secs. 505, 622, 701, 94 Stat.
2291, 2292, 2294 (15 U.S.C. 77c(b), 77d(1), 77s(a), 77s(c)); secs.
2(11), 4(1), 4(4), 19(a), 48 Stat. 74, 77, 85; secs. 201, 203, 209,
210, 48 Stat. 904, 906, 908; secs. 14, 5, 68 Stat. 683, 684; sec. 12,
78 Stat. 580 (15 U.S.C. 77b(11), 77d(1), 77d(4), 77s(a)))
(37 FR 596, Jan. 14, 1972, as amended at 39 FR 6071, Feb. 19, 1974;
39 FR 8914, Mar. 7, 1974; 43 FR 43711, Sept. 27, 1978; 43 FR 54230,
Nov. 21, 1978; 44 FR 15612, Mar. 14, 1979; 45 FR 12391, Feb. 28,
1980; 46 FR 12197, Feb. 12, 1981; 47 FR 11261, Mar. 16, 1982; 53 FR
12921, Apr. 20, 1988; 55 FR 17944, Apr. 30, 1990)
17 CFR 230.144A Private resales of securities to institutions.
1. This section relates solely to the application of section 5 of the
Act and not to antifraud or other provisions of the federal securities
laws.
2. Attempted compliance with this section does not act as an
exclusive election; any seller hereunder may also claim the
availability of any other applicable exemption from the registration
requirements of the Act.
3. In view of the objective of this section and the policies
underlying the Act, this section is not available with respect to any
transaction or series of transactions that, although in technical
compliance with this section, is part of a plan or scheme to evade the
registration provisions of the Act. In such cases, registration under
the Act is required.
4. Nothing in this section obviates the need for any issuer or any
other person to comply with the securities registration or broker-dealer
registration requirements of the Securities Exchange Act of 1934 (the
Exchange Act), whenever such requirements are applicable.
5. Nothing in this section obviates the need for any person to comply
with any applicable state law relating to the offer or sale of
securities.
6. Securities acquired in a transaction made pursuant to the
provisions of this section are deemed to be restricted securities within
the meaning of 230.144(a)(3) of this chapter.
7. The fact that purchasers of securities from the issuer thereof may
purchase such securities with a view to reselling such securities
pursuant to this section will not affect the availability to such issuer
of an exemption under section 4(2) of the Act, or Regulation D under the
Act, from the registration requirements of the Act.
(a) Definitions. (1) For purposes of this section, qualified
institutional buyer shall mean:
(i) Any of the following entities, acting for its own account or the
accounts of other qualified institutional buyers, that in the aggregate
owns and invests on a discretionary basis at least $100 million in
securities of issuers that are not affiliated with the entity:
(A) Any insurance company as defined in section 2(13) of the Act;
(B) Any investment company registered under the Investment Company
Act of 1940 (the Investment Company Act) or any business development
company as defined in section 2(a)(48) of that Act;
(C) Any Small Business Investment Company licensed by the U.S. Small
Business Administration under section 301(c) or (d) of the Small
Business Investment Act of 1958;
(D) Any plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees;
(E) Any employee benefit plan within the meaning of title I of the
Employee Retirement Income Security Act of 1974;
(F) Any business development company as defined in section 202(a)(22)
of the Investment Advisers Act of 1940;
(G) Any organization described in section 501(c)(3) of the Internal
Revenue Code, corporation (other than a bank as defined in section
3(a)(2) of the Act or a savings and loan association or other
institution referenced in section 3(a)(5)(A) of the Act or a foreign
bank or savings and loan association or equivalent institution),
partnership, or Massachusetts or similar business trust; and
(H) Any investment adviser registered under the Investment Advisers
Act.
(ii) Any dealer registered pursuant to section 15 of the Exchange
Act, acting for its own account or the accounts of other qualified
institutional buyers, that in the aggregate owns and invests on a
discretionary basis at least $10 million of securities of issuers that
are not affiliated with the dealer, Provided, That securities
constituting the whole or a part of an unsold allotment to or
subscription by a dealer as a participant in a public offering shall not
be deemed to be owned by such dealer;
(iii) Any dealer registered pursuant to section 15 of the Exchange
Act acting in a riskless principal transaction on behalf of a qualified
institutional buyer;
Note: A registered dealer may act as agent, on a non-discretionary
basis, in a transaction with a qualified institutional buyer without
itself having to be a qualified institutional buyer.
(iv) Any investment company registered under the Investment Company
Act, acting for its own account or for the accounts of other qualified
institutional buyers, that is part of a family of investment companies
which own in the aggregate at least $100 million in securities of
issuers, other than issuers that are affiliated with the investment
company or are part of such family of investment companies. Family of
investment companies means any two or more investment companies
registered under the Investment Company Act, except for a unit
investment trust whose assets consist solely of shares of one or more
registered investment companies, that have the same investment adviser
(or, in the case of unit investment trusts, the same depositor),
Provided That, for purposes of this section:
(A) Each series of a series company (as defined in Rule 18f-2 under
the Investment Company Act (17 CFR 270.18f-2)) shall be deemed to be a
separate investment company; and
(B) Investment companies shall be deemed to have the same adviser (or
depositor) if their advisers (or depositors) are majority-owned
subsidiaries of the same parent, or if one investment company's adviser
(or depositor) is a majority-owned subsidiary of the other investment
company's adviser (or depositor);
(v) Any entity, all of the equity owners of which are qualified
institutional buyers, acting for its own account or the accounts of
other qualified institutional buyers; and
(vi) Any bank as defined in section 3(a)(2) of the Act, any savings
and loan association or other institution as referenced in section
3(a)(5)(A) of the Act, or any foreign bank or savings and loan
association or equivalent institution, acting for its own account or the
accounts of other qualified institutional buyers, that in the aggregate
owns and invests on a discretionary basis at least $100 million in
securities of issuers that are not affiliated with it and that has an
audited net worth of at least $25 million as demonstrated in its latest
annual financial statements, as of a date not more than 16 months
preceding the date of sale under the Rule in the case of a U.S. bank or
savings and loan association, and not more than 18 months preceding such
date of sale for a foreign bank or savings and loan association or
equivalent institution.
(2) In determining the aggregate amount of securities owned and
invested on a discretionary basis by an entity, the following
instruments and interests shall be excluded: securities issued or
guaranteed by the United States or by any person controlled or
supervised by and acting as an instrumentality of the Government of the
United States pursuant to authority granted by the Congress of the
United States; bank deposit notes and certificates of deposit; loan
participations; repurchase agreements; securities owned but subject to
a repurchase agreement; and currency, interest rate and commodity
swaps.
(3) The aggregate value of securities owned and invested on a
discretionary basis by an entity shall be the cost of such securities,
except where the entity reports its securities holdings in its financial
statements on the basis of their market value, and no current
information with respect to the cost of those securities has been
published. In the latter event, the securities may be valued at market
for purposes of this section.
(4) In determining the aggregate amount of securities owned by an
entity and invested on a discretionary basis, securities owned by
subsidiaries of the entity that are consolidated with the entity in its
financial statements prepared in accordance with generally accepted
accounting principles may be included if the investments of such
subsidiaries are managed under the direction of the entity, except that,
unless the entity is a reporting company under section 13 or 15(d) of
the Exchange Act, securities owned by such subsidiaries may not be
included if the entity itself is a majority-owned subsidiary that would
be included in the consolidated financial statements of another
enterprise.
(5) For purposes of this section, riskless principal transaction
means a transaction in which a dealer buys a security from any person
and makes a simultaneous offsetting sale of such security to a qualified
institutional buyer, including another dealer acting as riskless
principal for a qualified institutional buyer.
(6) For purposes of this section, effective conversion premium means
the amount, expressed as a percentage of the security's conversion
value, by which the price at issuance of a convertible security exceeds
its conversion value.
(7) For purposes of this section, effective exercise premium means
the amount, expressed as a percentage of the warrant's exercise value,
by which the sum of the price at issuance and the exercise price of a
warrant exceeds its exercise value.
(b) Sales by persons other than issuers or dealers. Any person,
other than the issuer or a dealer, who offers or sells securities in
compliance with the conditions set forth in paragraph (d) of this
section shall be deemed not to be engaged in a distribution of such
securities and therefore not to be an underwriter of such securities
within the meaning of sections 2(11) and 4(1) of the Act.
(c) Sales by Dealers. Any dealer who offers or sells securities in
compliance with the conditions set forth in paragraph (d) of this
section shall be deemed not to be a participant in a distribution of
such securities within the meaning of section 4(3)(C) of the Act and not
to be an underwriter of such securities within the meaning of section
2(11) of the Act, and such securities shall be deemed not to have been
offered to the public within the meaning of section 4(3)(A) of the Act.
(d) Conditions to be met. To qualify for exemption under this
section, an offer or sale must meet the following conditions:
(1) The securities are offered or sold only to a qualified
institutional buyer or to an offeree or purchaser that the seller and
any person acting on behalf of the seller reasonably believe is a
qualified institutional buyer. In determining whether a prospective
purchaser is a qualified institutional buyer, the seller and any person
acting on its behalf shall be entitled to rely upon the following
non-exclusive methods of establishing the prospective purchaser's
ownership and discretionary investments of securities:
(i) The prospective purchaser's most recent publicly available
financial statements, Provided That such statements present the
information as of a date within 16 months preceding the date of sale of
securities under this section in the case of a U.S. purchaser and within
18 months preceding such date of sale for a foreign purchaser;
(ii) The most recent publicly available information appearing in
documents filed by the prospective purchaser with the Commission or
another United States federal, state, or local governmental agency or
self-regulatory organization, or with a foreign governmental agency or
self-regulatory organization, Provided That any such information is as
of a date within 16 months preceding the date of sale of securities
under this section in the case of a U.S. purchaser and within 18 months
preceding such date of sale for a foreign purchaser;
(iii) The most recent publicly available information appearing in a
recognized securities manual, Provided That such information is as of a
date within 16 months preceding the date of sale of securities under
this section in the case of a U.S. purchaser and within 18 months
preceding such date of sale for a foreign purchaser; or
(iv) A certification by the chief financial officer, a person
fulfilling an equivalent function, or other executive officer of the
purchaser, specifying the amount of securities owned and invested on a
discretionary basis by the purchaser as of a specific date on or since
the close of the purchaser's most recent fiscal year, or, in the case of
a purchaser that is a member of a family of investment companies, a
certification by an executive officer of the investment adviser
specifying the amount of securities owned by the family of investment
companies as of a specific date on or since the close of the purchaser's
most recent fiscal year;
(2) The seller and any person acting on its behalf takes reasonable
steps to ensure that the purchaser is aware that the seller may rely on
the exemption from the provisions of section 5 of the Act provided by
this section;
(3) The securities offered or sold:
(i) Were not, when issued, of the same class as securities listed on
a national securities exchange registered under section 6 of the
Exchange Act or quoted in a U.S. automated inter-dealer quotation
system; Provided, That securities that are convertible or exchangeable
into securities so listed or quoted at the time of issuance and that had
an effective conversion premium of less than 10 percent, shall be
treated as securities of the class into which they are convertible or
exchangeable; and that warrants that may be exercised for securities so
listed or quoted at the time of issuance, for a period of less than 3
years from the date of issuance, or that had an effective exercise
premium of less than 10 percent, shall be treated as securities of the
class to be issued upon exercise; and Provided further, That the
Commission may from time to time, taking into account then-existing
market practices, designate additional securities and classes of
securities that will not be deemed of the same class as securities
listed on a national securities exchange or quoted in a U.S. automated
inter-dealer quotation system; and
(ii) Are not securities of an open-end investment company, unit
investment trust or face-amount certificate company that is or is
required to be registered under section 8 of the Investment Company Act;
and
(4)(i) In the case of securities of an issuer that is neither subject
to section 13 or 15(d) of the Exchange Act, nor exempt from reporting
pursuant to Rule 12g3-2(b) ( 240.12g3-2(b) of this chapter) under the
Exchange Act, nor a foreign government as defined in Rule 405 ( 230.405
of this chapter) eligible to register securities under Schedule B of the
Act, the holder and a prospective purchaser designated by the holder
have the right to obtain from the issuer, upon request of the holder,
and the prospective purchaser has received from the issuer, the seller,
or a person acting on either of their behalf, at or prior to the time of
sale, upon such prospective purchaser's request to the holder or the
issuer, the following information (which shall be reasonably current in
relation to the date of resale under this section): a very brief
statement of the nature of the business of the issuer and the products
and services it offers; and the issuer's most recent balance sheet and
profit and loss and retained earnings statements, and similar financial
statements for such part of the two preceding fiscal years as the issuer
has been in operation (the financial statements should be audited to the
extent reasonably available).
(ii) The requirement that the information be reasonably current will
be presumed to be satisfied if:
(A) The balance sheet is as of a date less than 16 months before the
date of resale, the statements of profit and loss and retained earnings
are for the 12 months preceding the date of such balance sheet, and if
such balance sheet is not as of a date less than 6 months before the
date of resale, it shall be accompanied by additional statements of
profit and loss and retained earnings for the period from the date of
such balance sheet to a date less than 6 months before the date of
resale; and
(B) The statement of the nature of the issuer's business and its
products and services offered is as of a date within 12 months prior to
the date of resale; or
(C) With regard to foreign private issuers, the required information
meets the timing requirements of the issuer's home country or principal
trading markets.
(e) Offers and sales of securities pursuant to this section shall be
deemed not to affect the availability of any exemption or safe harbor
relating to any previous or subsequent offer or sale of such securities
by the issuer or any prior or subsequent holder thereof.
(55 FR 17945, Apr. 30, 1990)
17 CFR 230.145 Reclassification of securities, mergers, consolidations
and acquisitions of assets.
Rule 145 ( 230.145 of this chapter) is designed to make available the
protection provided by registration under the Securities Act of 1933, as
amended (Act), to persons who are offered securities in a business
combination of the type described in paragraphs (a) (1), (2) and (3) of
the rule. The thrust of the rule is that an offer, offer to sell, offer
for sale, or sale occurs when there is submitted to security holders a
plan or agreement pursuant to which such holders are required to elect,
on the basis of what is in substance a new investment decision, whether
to accept a new or different security in exchange for their existing
security. Rule 145 embodies the Commission's determination that such
transactions are subject to the registration requirements of the Act,
and that the previously existing no-sale theory of Rule 133 is no longer
consistent with the statutory purposes of the Act. See Release No.
33-5316 (October 6, 1972) (37 FR 23631). Securities issued in
transactions described in paragraph (a) of Rule 145 may be registered on
Form S-4 or F-4 ( 239.25 or 239.34 of this chapter) or Form N-14 (
239.23 of this chapter) under the Act.
Transactions for which statutory exemptions under the Act, including
those contained in sections 3(a)(9), (10), (11) and 4(2), are otherwise
available are not affected by Rule 145.
Note 1: Reference is made to Rule 153a ( 230.153a of this chapter)
describing the prospectus delivery required in a transaction of the type
referred to in Rule 145.
Note 2: A reclassification of securities covered by Rule 145 would
be exempt from registration pursuant to section 3(a)(9) or (11) of the
Act if the conditions of either of these sections are satisfied.
(a) Transactions within this section. An offer, offer to sell, offer
for sale, or sale shall be deemed to be involved, within the meaning of
section 2(3) of the Act, so far as the security holders of a corporation
or other person are concerned where, pursuant to statutory provisions of
the jurisdiction under which such corporation or other person is
organized, or pursuant to provisions contained in its certificate of
incorporation or similar controlling instruments, or otherwise, there is
submitted for the vote or consent of such security holders a plan or
agreement for:
(1) Reclassifications. A reclassification of securities of such
corporation or other person, other than a stock split, reverse stock
split, or change in par value, which involves the substitution of a
security for another security;
(2) Mergers of Consolidations. A statutory merger or consolidation
or similar plan or acquisition in which securities of such corporation
or other person held by such security holders will become or be
exchanged for securities of any person, unless the sole purpose of the
transaction is to change an issuer's domicile solely within the United
States; or
(3) Transfers of assets. A transfer of assets of such corporation or
other person, to another person in consideration of the issuance of
securities of such other person or any of its affiliates, if:
(i) Such plan or agreement provides for dissolution of the
corporation or other person whose security holders are voting or
consenting; or
(ii) Such plan or agreement provides for a pro rata or similar
distribution of such securities to the security holders voting or
consenting; or
(iii) The board of directors or similar representatives of such
corporation or other person, adopts resolutions relative to paragraph
(a)(3) (i) or (ii) of this section within 1 year after the taking of
such vote or consent; or
(iv) The transfer of assets is a part of a preexisting plan for
distribution of such securities, notwithstanding paragraph (a)(3) (i),
(ii), or (iii) of this section.
(b) Communications not deemed to be a Prospectus or Offer to Sell.
For the purpose of this section, the term prospectus as defined in
section 2(10) of the Act and the term offer to sell in section 5 of the
Act shall not be deemed to include the following:
(1) Any written communication or other published statement which
contains no more than the following information: The name of the issuer
of the securities to be offered, or the person whose assets are to be
sold in exchange for the securities to be offered, and the names of
other parties to any transaction specified in paragraph (a) of this
section; a brief description of the business of parties to such
transaction; the date, time, and place of the meeting of security
holders to vote on or consent to any such transaction specified in
paragraph (a) of this section; a brief description of the transaction
to be acted upon and the basis upon which such transaction will be made;
and any legend or similar statement required by State or Federal law or
administrative authority.
(2) Any written communication subject to and meeting the requirements
of paragraph (a) of 240.14a-12 of this chapter and filed in accordance
with paragraph (b) of that section.
(c) Persons and parties deemed to be underwriters. For purposes of
this section, any party to any transaction specified in paragraph (a) of
this section, other than the issuer, or any person who is an affiliate
of such party at the time any such transaction is submitted for vote or
consent, who publicly offers or sells securities of the issuer acquired
in connection with any such transaction, shall be deemed to be engaged
in a distribution and therefore to be an underwriter thereof within the
meaning of section 2(11) of the Act. The term party as used in this
paragraph (c) shall mean the corporations, business entities, or other
persons, other than the issuer, whose assets or capital structure are
affected by the transactions specified in paragraph (a) of this section.
(d) Resale provisions for persons and parties deemed underwriters.
Notwithstanding the provisions of paragraph (c), a person or party
specified therein shall not be deemed to be engaged in a distribution
and therefore not to be an underwriter of registered securities acquired
in a transaction specified in paragraph (a) of this section if:
(1) Such securities are sold by such person or party in accordance
with the provisions of paragraphs (c), (e), (f) and (g) of 230.144;
(2) Such person or party is not an affiliate of the issuer, and a
period of at least two years, as determined in accordance with paragraph
(d) of 230.144, has elapsed since the date the securities were acquired
from the issuer in such transaction, and the issuer meets the
requirements of paragraph (c) of 230.144; or
(3) Such person or party is not, and has not been for at least three
months, an affiliate of the issuer, and a period of at least three
years, as determined in accordance with paragraph (d) of 230.144, has
elapsed since the date the securities were acquired from the issuer in
such transaction.
(e) Definition of person. The term person as used in paragraphs (c)
and (d) of this section, when used with reference to a person for whose
account securities are to be sold, shall have the same meaning as the
definition of that term in paragraph (a)(2) of 230.144.
(Secs. 2(11), 4(1), 4(4), 19(a), 48 Stat. 74, 77, 85; sec. 209, 48
Stat. 908; secs. 1-4, 68 Stat. 683; sec. 12, 78 Stat. 580; sec.
308(a)(2), 90 Stat. 57; 15 U.S.C. 77b(11), 77d(1), 77d(4), 77s(a))
(37 FR 23636, Nov. 7, 1972, as amended at 49 FR 5921, Feb. 16, 1984;
50 FR 19016, May 6, 1985; 50 FR 48382, Nov. 25, 1985; 55 FR 17944,
Apr. 30, 1990)
17 CFR 230.147 ''Part of an issue,'' ''person resident,'' and ''doing
business within'' for purposes of section 3(a)(11).
1. This rule shall not raise any presumption that the exemption
provided by section 3(a)(11) of the Act is not available for
transactions by an issuer which do not satisfy all of the provisions of
the rule.
2. Nothing in this rule obviates the need for compliance with any
state law relating to the offer and sale of the securities.
3. Section 5 of the Act requires that all securities offered by the
use of the mails or by any means or instruments of transportation or
communication in interstate commerce be registered with the Commission.
Congress, however, provided certain exemptions in the Act from such
registration provisions where there was no practical need for
registration or where the benefits of registration were too remote.
Among those exemptions is that provided by section 3(a)(11) of the Act
for transactions in any security which is a part of an issue offered and
sold only to persons resident within a single State or Territory, where
the issuer of such security is a person resident and doing business
within * * * such State or Territory. The legislative history of that
Section suggests that the exemption was intended to apply only to issues
genuinely local in character, which in reality represent local financing
by local industries, carried out through local investment. Rule 147 is
intended to provide more objective standards upon which responsible
local businessmen intending to raise capital from local sources may rely
in claiming the section 3(a)(11) exemption.
All of the terms and conditions of the rule must be satisfied in
order for the rule to be available. These are: (i) That the issuer be
a resident of and doing business within the state or territory in which
all offers and sales are made; and (ii) that no part of the issue be
offered or sold to non-residents within the period of time specified in
the rule. For purposes of the rule the definition of issuer in section
2(4) of the Act shall apply.
All offers, offers to sell, offers for sale, and sales which are part
of the same issue must meet all of the conditions of Rule 147 for the
rule to be available. The determination whether offers, offers to sell,
offers for sale and sales of securities are part of the same issue
(i.e., are deemed to be integrated) will continue to be a question of
fact and will depend on the particular circumstances. See Securities
Act of 1933 Release No. 4434 (December 6, 1961) (26 FR 9158).
Securities Act Release No. 4434 indicated that in determining whether
offers and sales should be regarded as part of the same issue and thus
should be integrated any one or more of the following factors may be
determinative:
(i) Are the offerings part of a single plan of financing;
(ii) Do the offerings involve issuance of the same class of
securities;
(iii) Are the offerings made at or about the same time;
(iv) Is the same type of consideration to be received; and
(v) Are the offerings made for the same general purpose.
Subparagraph (b)(2) of the rule, however, is designed to provide
certainty to the extent feasible by identifying certain types of offers
and sales of securities which will be deemed not part of an issue, for
purposes of the rule only.
Persons claiming the availability of the rule have the burden of
proving that they have satisfied all of its provisions. However, the
rule does not establish exclusive standards for complying with the
section 3(a)(11) exemption. The exemption would also be available if
the issuer satisfied the standards set forth in relevant administrative
and judicial interpretations at the time of the offering but the issuer
would have the burden of proving the availability of the exemption.
Rule 147 relates to transactions exempted from the registration
requirements of section 5 of the Act by section 3(a)(11). Neither the
rule nor section 3(a)(11) provides an exemption from the registration
requirements of section 12(g) of the Securities Exchange Act of 1934,
the anti-fraud provisions of the federal securities laws, the civil
liability provisions of section 12(2) of the Act or other provisions of
the federal securities laws.
Finally, in view of the objectives of the rule and the purposes and
policies underlying the Act, the rule shall not be available to any
person with respect to any offering which, although in technical
compliance with the rule, is part of a plan or scheme by such person to
make interstate offers or sales of securities. In such cases
registration pursuant to the Act is required.
4. The rule provides an exemption for offers and sales by the issuer
only. It is not available for offers or sales of securities by other
persons. Section 3(a)(11) of the Act has been interpreted to permit
offers and sales by persons controlling the issuer, if the exemption
provided by that section would have been available to the issuer at the
time of the offering. See Securities Act Release No. 4434. Controlling
persons who want to offer or sell securities pursuant to section
3(a)(11) may continue to do so in accordance with applicable judicial
and administrative interpretations.
(a) Transactions covered. Offers, offers to sell, offers for sale
and sales by an issuer of its securities made in accordance with all of
the terms and conditions of this rule shall be deemed to be part of an
issue offered and sold only to persons resident within a single state or
territory where the issuer is a person resident and doing business
within such state or territory, within the meaning of section 3(a)(11)
of the Act.
(b) Part of an issue. (1) For purposes of this rule, all securities
of the issuer which are part of an issue shall be offered, offered for
sale or sold in accordance with all of the terms and conditions of this
rule.
(2) For purposes of this rule only, an issue shall be deemed not to
include offers, offers to sell, offers for sale or sales of securities
of the issuer pursuant to the exemption provided by section 3 or section
4(2) of the Act or pursuant to a registration statement filed under the
Act, that take place prior to the six month period immediately preceding
or after the six month period immediately following any offers, offers
for sale or sales pursuant to this rule, Provided, That, there are
during either of said six month periods no offers, offers for sale or
sales of securities by or for the issuer of the same or similar class as
those offered, offered for sale or sold pursuant to the rule.
Note: In the event that securities of the same or similar class as
those offered pursuant to the rule are offered, offered for sale or sold
less than six months prior to or subsequent to any offer, offer for sale
or sale pursuant to this rule, see Preliminary Note 3 hereof as to which
offers, offers to sell, offers for sale, or sales are part of an issue.
(c) Nature of the issuer. The issuer of the securities shall at the
time of any offers and the sales be a person resident and doing business
within the state or territory in which all of the offers, offers to
sell, offers for sale and sales are made.
(1) The issuer shall be deemed to be a resident of the state or
territory in which:
(i) It is incorporated or organized, if a corporation, limited
partnership, trust or other form of business organization that is
organized under state or territorial law;
(ii) Its principal office is located, if a general partnership or
other form of business organization that is not organized under any
state or territorial law;
(iii) His principal residence is located if an individual.
(2) The issuer shall be deemed to be doing business within a state or
territory if:
(i) The issuer derived at least 80 percent of its gross revenues and
those of its subsidiaries on a consolidated basis.
(A) For its most recent fiscal year, if the first offer of any part
of the issue is made during the first six months of the issuer's current
fiscal year; or
(B) For the first six months of its current fiscal year or during the
twelve-month fiscal period ending with such six-month period, if the
first offer of any part of the issue is made during the last six months
of the issuer's current fiscal year from the operation of a business or
of real property located in or from the rendering of services within
such state or territory; provided, however, that this provision does
not apply to any issuer which has not had gross revenues in excess of
$5,000 from the sale of products or services or other conduct of its
business for its most recent twelve-month fiscal period;
(ii) The issuer had at the end of its most recent semi-annual fiscal
period prior to the first offer of any part of the issue, at least 80
percent of its assets and those of its subsidiaries on a consolidated
basis located within such state or territory;
(iii) The issuer intends to use and uses at least 80 percent of the
net proceeds to the issuer from sales made pursuant to this rule in
connection with the operation of a business or of real property, the
purchase of real property located in, or the rendering of services
within such state or territory; and
(iv) The principal office of the issuer is located within such state
or territory.
(d) Offerees and purchasers: Person Resident. Offers, offers to
sell, offers for sale and sales of securities that are part of an issue
shall be made only to persons resident within the state or territory of
which the issuer is a resident. For purposes of determining the
residence of offerees and purchasers:
(1) A corporation, partnership, trust or other form of business
organization shall be deemed to be a resident of a state or territory
if, at the time of the offer and sale to it, it has its principal office
within such state or territory.
(2) An individual shall be deemed to be a resident of a state or
territory if such individual has, at the time of the offer and sale to
him, his principal residence in the state or territory.
(3) A corporation, partnership, trust or other form of business
organization which is organized for the specific purpose of acquiring
part of an issue offered pursuant to this rule shall be deemed not to be
a resident of a state or territory unless all of the beneficial owners
of such organization are residents of such state or territory.
(e) Limitation of resales. During the period in which securities
that are part of an issue are being offered and sold by the issuer, and
for a period of nine months from the date of the last sale by the issuer
of such securities, all resales of any part of the issue, by any person,
shall be made only to persons resident within such state or territory.
Notes: 1. In the case of convertible securities resales of either
the convertible security, or if it is converted, the underlying
security, could be made during the period described in paragraph (e)
only to persons resident within such state or territory. For purposes
of this rule a conversion in reliance on section 3(a)(9) of the Act does
not begin a new period.
2. Dealers must satisfy the requirements of Rule 15c2-11 under the
Securities Exchange Act of 1934 prior to publishing any quotation for a
security, or submitting any quotation for publication, in any quotation
medium.
(f) Precautions against interstate offers and sales. (1) The issuer
shall, in connection with any securities sold by it pursuant to this
rule:
(i) Place a legend on the certificate or other document evidencing
the security stating that the securities have not been registered under
the Act and setting forth the limitations on resale contained in
paragraph (e) of this section;
(ii) Issue stop transfer instructions to the issuer's transfer agent,
if any, with respect to the securities, or, if the issuer transfers its
own securities make a notation in the appropriate records of the issuer;
and
(iii) Obtain a written representation from each purchaser as to his
residence.
(2) The issuer shall, in connection with the issuance of new
certificates for any of the securities that are part of the same issue
that are presented for transfer during the time period specified in
paragraph (e), take the steps required by paragraphs (f)(1) (i) and (ii)
of this section.
(3) The issuer shall, in connection with any offers, offers to sell,
offers for sale or sales by it pursuant to this rule, disclose, in
writing, the limitations on resale contained in paragraph (e) and the
provisions of paragraphs (f)(1) (i) and (ii) and paragraph (f)(2) of
this section.
(39 FR 2356, Jan. 21, 1974)
17 CFR 230.148 Persons deemed not to be underwriters of securities
issued or sold in connection with bankruptcy proceedings.
Preliminary Note: Rule 148 relates to two categories of securities:
(1) Securities which were issued in bankruptcy proceedings by a debtor
or its successor; and (2) securities which were in the debtor's
portfolio either at the time proceedings were commenced under their
Bankruptcy Act or the Securities Investor Protection Act, or at the time
the Federal Deposit Insurance Corporation (FDIC) was appointed as a
receiver for the debtor's assets. Its purpose is to establish standards
which, if met, will enable the holder of such securities to sell them
without registration under the Securities Act of 1933 and without being
deemed an underwriter under section 2(11) of the Act. The standards set
forth in the rule are intended to provide some degree of assurance that
there will be current information about the issuer available in the
marketplace at the time the securities are sold and that the trading
market for such securities will not be disrupted by such sales.
(a) Definitions. The following definitions shall apply for the
purposes of this rule:
(1) The term Bankruptcy Act means the Federal Bankruptcy Act.
(2) The term debtor means a person or entity concerning which a case
has been commenced under either the Bankruptcy Act or the Securities
Investor Protection Act, as well as an entity over which the FDIC has
been appointed as a receiver.
(3) The term plan means a plan for the payment of debts and other
claims filed pursuant to the Bankruptcy Act and confirmed by the
bankruptcy court.
(4) The term securities issued under a plan shall include securities
issued by the debtor or any successor thereof under a plan, as well as
securities issued upon the exercise of any right to convert or exchange
securities issued under a plan.
(5) The term restricted securities means securities that are acquired
directly or indirectly from the issuer, or from an affiliate of the
issuer in a transaction or chain of transactions not involving any
public offering, or securities acquired from the issuer that are subject
to the resale limitations of Regulation D under the Securities Act of
1933, or securities that are subject to the resale limitations of
Regulation D and are acquired in a transaction or chain of transactions
not involving any public offering.
(6) An affiliate of the debtor is a person or entity that directly,
or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such debtor.
(b) Securities issued under a plan. A person or entity who acquires
securities issued under a plan in a transaction exempt from the
registration requirements of the Securities Act of 1933 shall not be
deemed an underwriter within the meaning of section 2(11) of the Act
with respect to resales of such securities if all of the following
conditions are met:
(1) Volume limitation. The amount of securities sold for the account
of such person or entity during any three month period shall not exceed
the greater of (i) one percent of the sum of the number of shares or
other units of the class issued and outstanding and the number of shares
or units of the class reserved for future issuance in respect of claims
and interests filed and allowed under the plan, as shown by the most
recent report or statement published by the issuer, or (ii) the average
weekly reported volume of trading in such securities on all national
securities exchanges and reported through the automated quotation system
of a registered securities association during the four calendar weeks
preceding the date of receipt of the order to execute the transaction by
the broker or the date of execution of the transaction directly with a
market maker, or (iii) the average weekly volume of trading in such
securities reported through the consolidated transaction reporting
system contemplated by Rule 11Aa3-1 under the Securities Exchange Act of
1934 ( 240.11Aa3-1) during the four-week period specified in paragraph
(b)(1)(ii) of this section. For the purpose of determining the
limitation on the amount of securities sold, all securities of the same
class sold under this rule by persons or entities acting in concert
shall be aggregated.
(A) Exception. The limitations in paragraph (b)(1) of this section
on the amount of securities that may be sold shall not apply to
securities sold for the account of a person who is not an affiliate of
the issuer at the time of the sale and has not been an affiliate during
the preceding three months, Provided: (1) The securities have been
beneficially owned by the person for a period of at least three years
prior to their sale and are part of a class that is either listed on a
national securities exchange or quoted in the National Association of
Securities Dealers, Inc.'s electronic interdealer quotation system known
as NASDAQ, or (2) The securities have been beneficially owned by the
person for a period of at least four years prior to their sale and the
issuer thereof is in compliance with the requirements of 230.144(c)(1)
regarding the filing of reports under sections 13 or 15(d) of the
Securities Exchange Act of 1934. In computing the holding period for
purposes of this provision, reference should be made to 230.144(d)(4).
Further, in regard to securities that were purchased, the full purchase
price or other consideration shall have been paid or given at least
three or four years, respectively, prior to their sale in order to
satisfy the beneficial ownership requirements of (b)(1)(A) (1) or (2) of
this section.
(2) Current public information. The issuer of the securities shall
make available to the public current information about itself and its
activities. Such information shall be deemed available only if either
of the following conditions is met:
(i) Filing of reports. The issuer is subject to the registration
requirements of section 12 of the Securities Exchange Act of 1934 and/or
the periodic reporting requirements of section 13 or 15(d) of the
Exchange Act and has filed all documents and reports required by those
sections to be filed subsequent to the distribution of securities under
the plan. The person or entity for whose account the securities are to
be sold shall be entitled to rely upon a written statement from the
issuer or a statement in whichever is the most recent report filed by
the issuer that such issuer has filed all documents and reports required
to be filed by sections 12, 13 or 15(d) of the Exchange Act subsequent
to the distribution of securities under the plan, unless such person or
entity has reason to believe that the issuer has not complied with such
requirements. In no event, however, shall any offers or sales of the
issuer's securities be made in reliance upon this rule unless the
information specified in Item 3(b) of Form 8-K ( 249.308) has been filed
by the debtor with the Commission.
(ii) Other public information. The issuer is not subject to the
registration and reporting requirements of sections 12, 13 or 15(d), but
there is publicly available the information concerning the issuer
specified in clauses (1) to (14), inclusive, and clause (16) of
paragraph (a)(4) of Rule 15c2-11 ( 240.15c2-11) under the Exchange Act.
(3) Manner of sale. The securities shall be sold in brokers'
transactions within the meaning of section 4(4) of the Securities Act or
in the transactions directly with a market maker, as that term is
defined in section 3(a)(38) of the Securities Exchange Act of 1934, and
the person selling the securities shall not (i) solicit or arrange for
the solicitation of orders to buy the securities in anticipation of or
in connection with such transactions, or (ii) make any payment in
connection with the offer or sale of the securities to any person other
than the broker who executes the order to sell the securities. The
requirements of this paragraph, however, shall not apply to securities
sold for the account of the estate of a deceased person or for the
account of a beneficiary of such estate, provided the estate or
beneficiary thereof is not an affiliate of the issuer. For the purposes
of this rule, the term brokers' transactions shall be deemed to include
transactions of the type described in rule 144(g) ( 230.144(g)) under
the Securities Act.
(c) Securities held in the debtor's portfolio. A debtor,
debtor-in-possession, court-appointed trustee or court-appointed
receiver for the debtor shall not be deemed an underwriter with respect
to resales of restricted securities of an issuer other than the debtor
or any affiliate or successor thereof, provided that:
(1) Such securities were owned by the debtor either on the date a
case concerning it was commenced under the Bankruptcy Act or the
Securities Investor Protection Act, or on the date the FDIC was
appointed as a receiver for the debtor's assets;
(2) Such resales are made in accordance with the provisions of
paragraphs (c), (e), (f) and (g) of Rule 144 ( 230.144) under the
Securities Act; and
(3) Such resales are authorized by the court, except that this
condition shall not apply to resales made by the FDIC in its capacity as
a receiver for the debtor's assets.
(d) Limited availability. This rule shall not be available to any
person or entity with respect to any transaction which, although in
technical compliance with the provisions of the rule, is a step in the
consummation of a plan or scheme to evade the registration requirements
applicable to the distribution or redistribution of securities to the
public.
(e) Non-exclusive rule. Although this rule provides a means for
reselling bankruptcy-related securities without registration under the
Securities Act, it is not the exclusive means for reselling such
securities in that manner. Therefore, it does not eliminate or
otherwise affect the availability of any exemption for resales under the
Securities Act that a person or entity may be able to rely upon.
(Secs. 2(11), 4(1), 4(4), 19(a), 19(c), 48 Stat. 74, 77, 85; secs.
201, 203, 209, 210, 48 Stat. 905, 906, 908; secs. 1-4, 6, 68 Stat. 683,
684; sec. 12, 78 Stat. 580 (15 U.S.C. 77b(11), 77d(1), 77d(4), 77s(a),
77s(c)))
(43 FR 14449, Apr. 6, 1978, as amended at 43 FR 43711, Sept. 27,
1978; 44 FR 15612, Mar. 14, 1979; 45 FR 12391, Feb. 28, 1980; 45 FR
29275, May 2, 1980; 47 FR 11261, Mar. 16, 1982)
17 CFR 230.149 Definition of ''exchanged'' in section 3(a)(9), for
certain transactions.
The term exchanged in section 3(a)(9) (sec. 202(c), 48 Stat. 906; 15
U.S.C. 77c(9)) shall be deemed to include the issuance of a security in
consideration of the surrender, by the existing security holders of the
issuer, of outstanding securities of the issuer, notwithstanding the
fact that the surrender of the outstanding securities may be required by
the terms of the plans of exchange to be accompanied by such payment in
cash by the security holder as may be necessary to effect an equitable
adjustment, in respect of dividends or interest paid or payable on the
securities involved in the exchange, as between such security holder and
other security holders of the same class accepting the offer of
exchange.
(2 FR 1382, July 7, 1937)
17 CFR 230.150 Definition of ''commission or other remuneration'' in
section 3(a)(9), for certain transactions.
The term commission or other remuneration in section 3(a)(9) of the
Act shall not include payments made by the issuer, directly or
indirectly, to its security holders in connection with an exchange of
securities for outstanding securities, when such payments are part of
the terms of the offer of exchange.
(2 FR 1076, May 26, 1937)
17 CFR 230.151 Safe harbor definition of certain ''annuity contracts or
optional annuity contracts'' within the meaning of section 3(a)(8).
(a) Any annuity contract or optional annuity contract (a contract)
shall be deemed to be within the provisions of section 3(a)(8) of the
Securities Act of 1933 (15 U.S.C. 77c(a)(8)), Provided, That
(1) The annuity or optional annuity contract is issued by a
corporation (the insurer) subject to the supervision of the insurance
commissioner, bank commissioner, or any agency or officer performing
like functions, of any State or Territory of the United States or the
District of Columbia;
(2) The insurer assumes the investment risk under the contract as
prescribed in paragraph (b) of this section; and
(3) The contract is not marketed primarily as an investment.
(b) The insurer shall be deemed to assume the investment risk under
the contract if:
(1) The value of the contract does not vary according to the
investment experience of a separate account;
(2) The insurer for the life of the contract
(i) Guarantees the principal amount of purchase payments and interest
credited thereto, less any deduction (without regard to its timing) for
sales, administrative or other expenses or charges; and
(ii) Credits a specified rate of interest (as defined in paragraph
(c) of this section to net purchase payments and interest credited
thereto; and
(3) The insurer guarantees that the rate of any interest to be
credited in excess of that described in paragraph (b)(2)(ii) of this
section will not be modifed more frequently than once per year.
(c) The term specified rate of interest, as used in paragraph
(b)(2)(ii) of this section, means a rate of interest under the contract
that is at least equal to the minimum rate required to be credited by
the relevant nonforfeiture law in the jurisdiction in which the contract
is issued. If that jurisdiction does not have any applicable
nonforfeiture law at the time the contract is issued (or if the minimum
rate applicable to an existing contract is no longer mandated in that
jurisdiction), the specified rate under the contract must at least be
equal to the minimum rate then required for individual annuity contracts
by the NAIC Standard Nonforfeiture Law.
(51 FR 20262, June 4, 1986)
17 CFR 230.152 Definition of ''transactions by an issuer not involving
any public offering'' in section 4(2), for certain transactions.
The phrase transactions by an issuer not involving any public
offering in section 4(2) (48 Stat. 77, sec. 203(a), 48 Stat. 906; 15
U.S.C. 77d) shall be deemed to apply to transactions not involving any
public offering at the time of said transactions although subsequently
thereto the issuer decides to make a public offering and/or files a
registration statement.
(2 FR 1076, May 26, 1937, as amended at 30 FR 2022, Feb. 13, 1965)
Cross Reference: For regulations relating to registration statement,
see 230.400 -- 230.494.
17 CFR 230.152a Offer or sale of certain fractional interests.
Any offer or sale of a security, evidenced by a scrip certificate,
order form or similar document which represents a fractional interest in
a share of stock or similar security shall be deemed a transaction by a
person other than an issuer, underwriter or dealer, within the meaning
of section 4(1) of the act, if the fractional interest (a) resulted from
a stock dividend, stock split, reverse stock split, conversion, merger
or similar transaction, and (b) is offered or sold pursuant to
arrangements for the purchase and sale of fractional interests among the
person entitled to such fractional interests for the purpose of
combining such interests into whole shares, and for the sale of such
number of whole shares as may be necessary to compensate security
holders for any remaining fractional interests not so combined,
notwithstanding that the issuer or an affiliate of the issuer may act on
behalf of or as agent for the security holders in effecting such
transactions.
(Sec. 4, 48 Stat. 77; 15 U.S.C. 77d)
(30 FR 2657, Mar. 2, 1965)
17 CFR 230.153 Definition of ''preceded by a prospectus'', as used in
section 5(b)(2), in relation to certain transactions.
(a) The term preceded by a prospectus, as used in section 5(b)(2) of
the Securities Act of 1933 (48 Stat. 77; 15 U.S.C. 77e(b)(2), as
amended, in respect of any requirement of delivery of a prospectus to a
member of a national securities exchange, on account of a transaction in
a security effected on such exchange, shall mean delivery, prior to such
transaction, of copies of a prospectus descriptive of such security and
meeting the requirements of section 10(a) (48 Stat. 81, sec. 205, 48
Stat. 906; 15 U.S.C. 77j) to such exchange by the issuer or any
underwriter, for the purpose of redelivery to members of such exchange
upon their request: Provided, That as to any transaction occurring
prior to the expiration of forty days after the effective date of the
registration statement or the expiration of forty days after the first
date upon which the security was bona fide offered to the public by the
issuer or by or through an underwriter after such effective date,
whichever is later (exclusive of the time during which a stop order
issued under section 8 is in effect as to such security):
(1) Such exchange shall theretofore have requested of the issuer or,
if such requests shall not have been compiled with, of a principal
underwriter (as that term is defined in 230.405), from time to time,
such number of copies of such prospectus as may have appeared reasonably
necessary to comply with the requests of its members, and shall have
delivered from its supply on hand a copy to any member theretofore
making a written request therefor, and
(2) The issuer or any underwriter shall theretofore have furnished
such exchange with such reasonable number of copies of such prospectus
as may have been requested by the exchange for the purpose stated above.
(b) The term national securities exchange, as used herein shall mean
a securities exchange registered as a national securities exchange under
the Securities Exchange Act of 1934 (48 Stat. 881; 15 U.S.C. Chapter
2B), as amended.
(2 FR 1076, May 26, 1937, as amended at 19 FR 6737, Oct. 20, 1954)
Cross References: For the rules and regulations under the Securities
Exchange Act of 1934, see Part 240 of this chapter. For general
requirements as to prospectuses, see 230.400-230.434a.
17 CFR 230.153a Definition of ''preceded by a prospectus'' as used in
section 5(b)(2) of the Act, in relation to certain transactions
requiring approval of security holders.
The term preceded by a prospectus, as used in section 5(b)(2) of the
Act with respect to any requirement for the delivery of a prospectus to
security holders of a corporation or other person, in connection with
transactions of the character specified in paragraph (a) of 230.145,
shall mean the delivery of a prospectus:
(a) Prior to the vote of security holders on such transactions; or,
(b) With respect to actions taken by consent, prior to the earliest
date on which the corporate action may be taken; to all security
holders of record of such corporation or other person, entitled to vote
on or consent to the proposed transaction, at their address of record on
the transfer records of the corporation or other person.
(37 FR 23636, Nov. 7, 1972)
17 CFR 230.153b Definition of ''preceded by a prospectus'', as used in
section 5(b)(2), in connection with certain transactions in standardized
options.
The term preceded by a prospectus, as used in section 5(b)(2) of the
Act with respect to any requirement for the delivery of a prospectus
relating to standardized options registered on Form S-20, shall mean the
delivery, prior to any transactions, of copies of such prospectus to
each options market upon which the options are traded, for the purpose
of redelivery to options customers upon their request, Provided That:
(a) Such options market shall thereto have requested of the issuer,
from time to time, such number of copies of such prospectus as may have
appeared reasonably necessary to comply with the requests of options
customers, and shall have delivered promptly from its supply on hand a
copy to any options customer making a request thereof; and
(b) The issuer shall have furnished such options market with such
reasonable number of copies of such prospectus as may have been
requested by the options market for the purpose stated above.
(15 U.S.C. 77a et seq.)
(47 FR 41955, Sept. 23, 1982)
17 CFR 230.156 Investment company sales literature.
(a) Under the federal securities laws, including section 17(a) of the
Securities Act of 1933 (15 U.S.C. 77q(a)) and section 10(b) of the
Securities Exchange Act of 1934 (15 U.S.C. 78j(b)) and Rule 10b-5
thereunder (17 CFR Part 240), it is unlawful for any person, directly or
indirectly, by the use of any means or instrumentality of interstate
commerce or of the mails, to use sales literature which is materially
misleading in connection with the offer or sale of securities issued by
an investment company. Under these provisions, sales literature is
materially misleading if it: (1) Contains an untrue statement of a
material fact or (2) omits to state a material fact necessary in order
to make a statement made, in the light of the circumstances of its use,
not misleading.
(b) Whether or not a particular description, representation,
illustration, or other statement involving a material fact is misleading
depends on evaluation of the context in which it is made. In
considering whether a particular statement involving a material fact is
or might be misleading, weight should be given to all pertinent factors,
including, but not limited to, those listed below.
(1) A Statement could be misleading because of:
(i) Other statements being made in connection with the offer of sale
or sale of the securities in question;
(ii) The absence of explanations, qualifications, limitations or
other statements necessary or appropriate to make such statement not
misleading; or
(iii) General economic or financial conditions or circumstances.
(2) Representations about past or future investment performance could
be misleading because of statements or omissions made involving a
material fact, including situations where:
(i) Portrayals of past income, gain, or growth of assets convey an
impression of the net investment results achieved by an actual or
hypothetical investment which would not be justified under the
circumstances; and
(ii) Representations, whether express or implied, about future
investment performance, including:
(A) Representations, as to security of capital, possible future gains
or income, or expenses associated with an investment;
(B) Representations implying that future gain or income may be
inferred from or predicted based on past investment performance; or
(C) Portrayals of past performance, made in a manner which would
imply that gains or income realized in the past would be repeated in the
future.
(3) A statement involving a material fact about the characteristics
or attributes of an investment company could be misleading because of:
(i) Statements about possible benefits connected with or resulting
from services to be provided or methods of operation which do not give
equal prominence to discussion of any risks or limitations associated
therewith;
(ii) Exaggerated or unsubstantiated claims about management skill or
techniques, characteristics of the investment company or an investment
in securities issued by such company, services, security of investment
or funds, effects of government supervision, or other attributes; and
(iii) Unwarranted or incompletely explained comparisons to other
investment vehicles or to indexes.
(c) For purposes of this section, the term sales literature shall be
deemed to include any communication (whether in writing, by radio, or by
television) used by any person to offer to sell or induce the sale of
securities of any investment company. Communications between issuers,
underwriters and dealers are included in this definition of sales
literature if such communications, or the information contained therein,
can be reasonably expected to be communicated to prospective investors
in the offer or sale of securities or are designed to be employed in
either written or oral form in the offer or sale of securities.
(Sec. 38(a) (15 U.S.C. 80a-37(a)); sec. 19(a) (15 U.S.C. 77s(a));
secs. 10(b) and 23(a) (15 U.S.C. 78j(b) and 78w(a)))
(44 FR 64072, Nov. 6, 1979)
17 CFR 230.157 Small entities for purposes of the Regulatory
Flexibility Act.
For purposes of Commission rulemaking in accordance with the
provisions of Chapter Six of the Administrative Procedure Act (5 U.S.C.
601 et seq.), and unless otherwise defined for purposes of a particular
rulemaking proceeding, the term small business or small organization
shall:
(a) When used with reference to an issuer, other than an investment
company, for purposes of the Securities Act of 1933, mean an issuer
whose total assets on the last day of its most recent fiscal year were
$5 million or less and that is engaged or proposing to engage in small
business financing. An issuer is considered to be engaged or proposing
to engage in small business financing under this section if it is
conducting or proposes to conduct an offering of securities which does
not exceed the dollar limitation prescribed by section 3(b) of the
Securities Act.
(b) When used with reference to an investment company that is an
issuer for purposes of the Securities Act of 1933, mean an investment
company with net assets of $50 million or less as of the end of its most
recent fiscal year.
(47 FR 5221, Feb. 4, 1982, as amended at 51 FR 25362, July 14, 1986)
17 CFR 230.158 Definitions of certain terms in the last paragraph of
section 11(a).
(a) An ''earning statement'' made generally available to
securityholders of the registrant pursuant to the last paragraph of
section 11(a) of the Act shall be sufficient for the purposes of such
paragraph if:
(1) There is included the information required for statements of
income contained either:
(i) In Item 8 of Form 10-K ( 249.310 of this chapter), part I, Item 1
of Form 10-Q ( 249.308a of this chapter), or rule 14a-3(b) (
240.14a-3(b) of this chapter) under the Securities Exchange Act of 1934;
(ii) In Item 17 of Form 20-F ( 249.220f of this chapter), if
appropriate; or
(iii) In Form 40-F ( 249.240f of this chapter); and
(2) The information specified in the last paragraph of section 11(a)
is contained in one report or any combination of reports either:
(i) On Form 10-K, Form 10-Q, Form 8-K ( 249.308 of this chapter), or
in the annual report to securityholders pursuant to rule 14a-3 under the
Securities Exchange Act of 1934; or
(ii) On Form 20-F, Form 40-F or Form 6-K ( 249.306 of this chapter).
A subsidiary issuing debt securities guaranteed by its parent will be
deemed to have met the requirements of this paragraph if the parent's
income statements satisfy the criteria of this paragraph and information
respecting the subsidiary is included to the same extent as was
presented in the registration statement. An ''earning statement'' not
meeting the requirements of this paragraph may otherwise be sufficient
for purposes of the last paragraph of section 11(a).
(b) For purposes of the last paragraph of section 11(a) only, the
''earning statement'' contemplated by paragraph (a) of this section
shall be deemed to be ''made generally available to its
securityholders'' if the registrant:
(1) Is required to file reports pursuant to section 13 or 15(d) of
the Securities Exchange Act of 1934 and
(2) Has filed its report or reports on Form 10-K, Form 10-Q, Form
8-K, Form 20-F, Form 40-F, or Form 6-K, or has supplied to the
Commission copies of the annual report sent to securityholders pursuant
to rule 14a-3(c), containing such information.
A registrant may use other methods to make an earning statement
''generally available to its securityholders'' for purposes of the last
paragraph of section 11(a).
(c) For purposes of the last paragraph of section 11(a) only, the
effective date of the registration statement is deemed to be the date of
the latest to occur of (1) the effective date of the registration
statement: (2) the effective date of the last post-effective amendment
to the registration statement, next preceding a particular sale by the
registrant of registered securities to the public filed for purposes of
(i) including any prospectus required by section 10(a)(3) of the Act,
(ii) reflecting in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement, or (iii) including any material
information with respect to the plan or distribution not previously
disclosed in this registration statement or any material change to such
information in the registration statement, or (3) the date of filing of
the last report of the registrant incorporated by reference into the
prospectus, and relied upon in lieu of filing a post-effective amendment
for purposes of paragraphs (c)(2) (i) and (ii) of this rule, next
preceding a particular sale by the registrant of registered securities
to the public.
(48 FR 44770, Sept. 30, 1983, as amended at 56 FR 30054, July 1,
1991)
17 CFR 230.161 Amendments to rules and regulations governing
exemptions.
The rules and regulations governing the exemption of securities under
section 3(b) of the Act, as in effect at the time the securities are
first bona fide offered to the public in conformity therewith, shall
continue to govern the exemption of such securities notwithstanding the
subsequent amendment of such rules and regulations. This section shall
not apply, however, to any new offering of such securities by an issuer
or underwriter after the effective date of any such amendment, nor shall
it apply to any offering after January 1, 1959, of securities by an
issuer or underwriter pursuant to Regulation D or pursuant to Regulation
A as in effect at any time prior to July 23, 1956.
(23 FR 4454, June 20, 1958)
17 CFR 230.170 Prohibition of use of certain financial statements.
Financial statements which purport to give effect to the receipt and
application of any part of the proceeds from the sale of securities for
cash shall not be used unless such securities are to be offered through
underwriters and the underwriting arrangements are such that the
underwriters are or will be committed to take and pay for all of the
securities, if any are taken, prior to or within a reasonable time after
the commencement of the public offering, or if the securities are not so
taken to refund to all subscribers the full amount of all subscription
payments made for the securities. The caption of any such financial
statement shall clearly set forth the assumptions upon which such
statement is based. The caption shall be in type at least as large as
that used generally in the body of the statement.
(21 FR 7566, Oct. 3, 1956)
17 CFR 230.171 Disclosure detrimental to the national defense or
foreign policy.
(a) Any requirement to the contrary notwithstanding, no registration
statement, prospectus, or other document filed with the Commission or
used in connection with the offering or sale of any securities shall
contain any document or information which, pursuant to Executive order,
has been classified by an appropriate department or agency of the United
States for protection in the interests of national defense or foreign
policy.
(b) Where a document or information is omitted pursuant to paragraph
(a) of this section, there shall be filed, in lieu of such document or
information, a statement from an appropriate department or agency of the
United States to the effect that such document or information has been
classified or that the status thereof is awaiting determination. Where
a document is omitted pursuant to paragraph (a) of this section, but
information relating to the subject matter of such document is
nevertheless included in material filed with the Commission pursuant to
a determination of an appropriate department or agency of the United
States that disclosure of such information would not be contrary to the
interests of national defense or foreign policy, a statement from such
department or agency to that effect shall be submitted for the
information of the Commission. A registrant may rely upon any such
statement in filing or omitting any document or information to which the
statement relates.
(c) The Commission may protect any information in its possession
which may require classification in the interests of national defense or
foreign policy pending determination by an appropriate department or
agency as to whether such information should be classified.
(d) It shall be the duty of the registrant to submit the documents or
information referred to in paragraph (a) of this section to the
appropriate department or agency of the United States prior to filing
them with the Commission and to obtain and submit to the Commission, at
the time of filing such documents or information, or in lieu thereof, as
the case may be, the statements from such department or agency required
by paragraph (b) of this section. All such statements shall be in
writing.
(33 FR 7682, May 24, 1968)
17 CFR 230.174 Delivery of prospectus by dealers; exemptions under
section 4(3) of the Act.
The obligations of a dealer (including an underwriter no longer
acting as an underwriter in respect of the security involved in such
transactions) to deliver a prospectus in transactions in a security as
to which a registration statement has been filed taking place prior to
the expiration of the 40- or 90-day period specified in section 4(3) of
the Act after the effective date of such registration statement or prior
to the expiration of such period after the first date upon which the
security was bona fide offered to the public by the issuer or by or
through an underwriter after such effective date, whichever is later,
shall be subject to the following provisions:
(a) No prospectus need be delivered if the registration statement is
on Form F-6 ( 239.36 of this chapter).
(b) No prospectus need be delivered if the issuer is subject,
immediately prior to the time of filing the registration statement, to
the reporting requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934.
(c) Where a registration statement relates to offerings to be made
from time to time no prospectus need be delivered after the expiration
of the initial prospectus delivery period specified in section 4(3) of
the Act following the first bona fide offering of securities under such
registration statement.
(d) If (1) the registration statement relates to the security of an
issuer that is not subject, immediately prior to the time of filing the
registration statement, to the reporting requirements of section 13 or
15(d) of the Securities Exchange Act of 1934, and (2) as of the offering
date, the security is listed on a registered national securities
exchange or authorized for inclusion in an electronic inter-dealer
quotation system sponsored and governed by the rules of a registered
securities association, no prospectus need be delivered after the
expiration of twenty-five calendar days after the offering date. For
purposes of this provision, the term offering date refers to the later
of the effective date of the registration statement or the first date on
which the security was bona fide offered to the public.
(e) Notwithstanding the foregoing, the period during which a
prospectus must be delivered by a dealer shall be:
(1) As specified in section 4(3) of the Act if the registration
statement was the subject of a stop order issued under section 8 of the
Act; or
(2) As the Commission may provide upon application or on its own
motion in a particular case.
(f) Nothing in this section shall affect the obligation to deliver a
prospectus pursuant to the provisions of section 5 of the Act by a
dealer who is acting as an underwriter with respect to the securities
involved or who is engaged in a transaction as to securities
constituting the whole or a part of an unsold allotment to or
subscription by such dealer as a participant in the distribution of such
securities by the issuer or by or through an underwriter.
(15 U.S.C. 77d; Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85;
secs. 205, 209, 48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68
Stat. 685; sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90 Stat. 57; secs.
12, 13, 15(d), 23(a), 48 Stat. 892, 894, 895, 901; secs. 1, 3, 8, 49
Stat. 1375, 1377, 1379; sec. 203(a), 49 Stat. 704; sec. 202, 68 Stat.
686; secs. 3, 4, 6, 78 Stat. 565-568, 569, 570-574; secs. 1, 2, 82
Stat. 454; sec. 28(c), 84 Stat. 1435; secs. 1, 2, 84 Stat. 1497;
sec. 105(b), 88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat. 117, 118, 119,
155; sec. 308(b), 90 Stat. 57; secs. 202, 203, 204, 91 Stat. 1494,
1498, 1499, 1500; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 78l, 78m,
78o(d), 78w(a))
(35 FR 18457, Dec. 4, 1970, as amended at 48 FR 12347, Mar. 24, 1983;
53 FR 11845, Apr. 11, 1988)
17 CFR 230.175 Liability for certain statements by issuers.
(a) A statement within the coverage of paragraph (b) of this section
which is made by or on behalf of an issuer or by an outside reviewer
retained by the issuer shall be deemed not to be a fraudulent statement
(as defined in paragraph (d) of this section), unless it is shown that
such statement was made or reaffirmed without a reasonable basis or was
disclosed other than in good faith.
(b) This rule applies to the following statements:
(1) A forward-looking statement (as defined in paragraph (c) of this
section) made in a document filed with the Commission, in Part I of a
quarterly report on Form 10-Q, 249.308a of this chapter, or in an
annual report to shareholders meeting the requirements of Rules 14a-3
(b) and (c) or 14c-3 (a) and (b) under the Securities Exchange Act of
1934, a statement reaffirming such forward-looking statement subsequent
to the date the document was filed or the annual report was made
publicly available, or a forward-looking statement made prior to the
date the document was filed or the date the annual report was publicly
available if such statement is reaffirmed in a filed document, in Part I
of a quarterly report on Form 10-Q, or in an annual report made publicly
available within a reasonable time after the making of such
forward-looking statement; Provided, That
(i) At the time such statements are made or reaffirmed, either the
issuer is subject to the reporting requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934 and has complied with the
requirements of rule 13a-1 or 15d-1 thereunder, if applicable, to file
its most recent annual report on Form 10-K, Form 20-F or Form 40-F; or
if the issuer is not subject to the reporting requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934, the statements
are made in a registration statement filed under the Act or pursuant to
section 12 (b) or (g) of the Securities Exchange Act of 1934, and
(ii) The statements are not made by or on behalf of an issuer that is
an investment company registered under the Investment Company Act of
1940; and
(2) Information which is disclosed in a document filed with the
Commission, in Part I of a quarterly report on Form 10-Q ( 249.308a of
this chapter) or in an annual report to shareholders meeting the
requirements of Rules 14a-3 (b) and (c) or 14c-3 (a) and (b) under the
Securities Exchange Act of 1934 ( 240.14a-3 (b) and (c) or 240.14a-3
(a) and (b) of this chapter) and which relates to (i) the effects of
changing prices on the business enterprise, presented voluntarily or
pursuant to Item 303 of Regulation S-K ( 229.303 of this chapter) or
Item 9 of Form 20-F ( 249.220f of this chapter) ''Management's
discussion and analysis of financial condition and results of
operations,'' or Item 302 of Regulation S-K ( 229.302 of this chapter),
''Supplementary financial information,'' or Rule 3-20(c) of Regulation
S-X ( 210.3-20(c) of this chapter), or (ii) the value of proved oil and
gas reserves (such as a standardized measure of discounted future net
cash flows relating to proved oil and gas reserves as set forth in
paragraphs 30-34 of Statement of Financial Accounting Standards No. 69)
presented voluntarily or pursuant to Item 302 of Regulation S-K (
229.302 of this chapter).
(c) For the purpose of this rule, the term forward-looking statement
shall mean and shall be limited to:
(1) A statement containing a projection of revenues, income (loss),
earnings (loss) per share, capital expenditures, dividends, capital
structure or other financial items;
(2) A statement of management's plans and objectives for future
operations;
(3) A statement of future economic performance contained in
management's discussion and analysis of financial condition and results
of operations included pursuant to Item 303 of Regulation S-K ( 229.303
of this chapter) or Item 9 of Form 20-F; or
(4) Disclosed statements of the assumptions underlying or relating to
any of the statements described in paragraphs (c) (1), (2), or (3) of
this section.
(d) For the purpose of this rule the term fraudulent statement shall
mean a statement which is an untrue statement of a material fact, a
statement false or misleading with respect to any material fact, an
omission to state a material fact necessary to make a statement not
misleading, or which constitutes the employment of a manipulative,
deceptive, or fraudulent device, contrivance, scheme, transaction, act,
practice, course of business, or an artifice to defraud, as those terms
are used in the Securities Act of 1933 or the rules or regulations
promulgated thereunder.
(46 FR 13990, Feb. 25, 1981, as amended at 46 FR 19457, Mar. 31,
1981; 47 FR 54770, Dec. 6, 1982; 48 FR 19875, May 3, 1983; 56 FR
30054, July 1, 1991)
17 CFR 230.176 Circumstances affecting the determination of what
constitutes reasonable investigation and reasonable grounds for belief
under section 11 of the Securities Act.
In determining whether or not the conduct of a person constitutes a
reasonable investigation or a reasonable ground for belief meeting the
standard set forth in section 11(c), relevant circumstances include,
with respect to a person other than the issuer.
(a) The type of issuer;
(b) The type of security;
(c) The type of person;
(d) The office held when the person is an officer;
(e) The presence or absence of another relationship to the issuer
when the person is a director or proposed director;
(f) Reasonable reliance on officers, employees, and others whose
duties should have given them knowledge of the particular facts (in the
light of the functions and responsibilities of the particular person
with respect to the issuer and the filing);
(g) When the person is an underwriter, the type of underwriting
arrangement, the role of the particular person as an underwritter and
the availability of information with respect to the registrant; and
(h) Whether, with respect to a fact or document incorporated by
reference, the particular person had any responsibility for the fact or
document at the time of the filing from which it was incorporated.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11433, Mar. 16, 1982)
17 CFR 230.180 Exemption from registration of interests and
participations issued in connection with certain H.R. 10 plans.
(a) Any interest or participation in a single trust fund or in a
collective trust fund maintained by a bank, or any security arising out
of a contract issued by an insurance company, issued to an employee
benefit plan shall be exempt from the provisions of section 5 of the Act
if the following terms and conditions are met:
(1) The plan covers employees, some or all of whom are employees
within the meaning of section 401(c)(1) of the Internal Revenue Code of
1954, and is either: (i) A pension or profit-sharing plan which meets
the requirements for qualification under section 401 of such Code, or
(ii) an annuity plan which meets the requirements for the deduction of
the employer's contribution under section 404(a)(2) of such Code;
(2) The plan covers only employees of a single employer or employees
of interrelated partnerships; and
(3) The issuer of such interest, participation or security shall have
reasonable grounds to believe and, after making reasonable inquiry,
shall believe immediately prior to any issuance that:
(i) The employer is a law firm, accounting firm, investment banking
firm, pension consulting firm or investment advisory firm that is
engaged in furnishing services of a type that involve such knowledge and
experience in financial and business matters that the employer is able
to represent adequately its interests and those of its employees; or
(ii) In connection with the plan, the employer prior to adopting the
plan obtains the advice of a person or entity that (A) is not a
financial institution providing any funding vehicle for the plan, and is
neither an affiliated person as defined in section 2(a)(3) of the
Investment Company Act of 1940 of, nor a person who has a material
business relationship with, a financial institution providing a funding
vehicle for the plan; and (B) is, by virtue of knowledge and experience
in financial and business matters, able to represent adequately the
interests of the employer and its employees.
(b) Any interest or participation issued to a participant in either a
pension or profit-sharing plan which meets the requirements for
qualification under section 401 of the Internal Revenue Code of 1954 or
an annuity plan which meets the requirements for the deduction of the
employer's contribution under section 404(a)(2) of such Code, and which
covers employees, some or all of whom are employees within the meaning
of section 401(c)(1) of such Code, shall be exempt from the provisions
of section 5 of the Act.
(46 FR 58291, Dec. 1, 1981)
17 CFR 230.215 Accredited investor.
The term accredited investor as used in section 2(15)(ii) of the
Securities Act of 1933 (15 U.S.C. 77b(15)(ii)) shall include the
following persons:
(a) Any savings and loan association or other institution specified
in section 3(a)(5)(A) of the Act whether acting in its individual or
fiduciary capacity; any broker or dealer registered pursuant to section
15 of the Securities Exchange Act of 1934; any plan established and
maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of
$5,000,000; any employee benefit plan within the meaning of Table I of
the Employee Retirement Income Security Act of 1974, if the investment
decision is made by a plan fiduciary, as defined in section 3(21) of
such Act, which is a savings and loan association, or if the employee
benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons
that are accredited investors;
(b) Any private business development company as defined in section
202(a)(22) of the Investment Advisers Act of 1940;
(c) Any organization described in section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the
securities offered, with total assets in excess of $5,000,000;
(d) Any director, executive officer, or general partner of the issuer
of the securities being offered or sold, or any director, executive
officer, or general partner of a general partner of that issuer;
(e) Any natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of his purchase exceeds
$1,000,000;
(f) Any natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that
person's spouse in excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current
year;
(g) Any trust, with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person as described in
230.506(b)(2)(ii); and
(h) Any entity in which all of the equity owners are accredited
investors.
(47 FR 11261, Mar. 16, 1982, as amended at 53 FR 7868, Mar. 10, 1988;
54 FR 11372, Mar. 20, 1989)
17 CFR 230.215 Regulation A-R -- Special Exemptions
17 CFR 230.236 Exemption of shares offered in connection with certain
transactions.
Shares of stock or similar security offered to provide funds to be
distributed to shareholders of the issuer of such securities in lieu of
issuing fractional shares, script certificates or order forms, in
connection with a stock dividend, stock split, reverse stock split,
conversion, merger or similar transaction, shall be exempt from
registration under the Act if the following conditions are met:
(a) The issuer of such shares is required to file and has filed
reports with the Commission pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934. At the time of filing this
information, the applicant shall pay to the Commission a fee of $100, no
part of which shall be refunded.
(b) The aggregate gross proceeds from the sale of all shares offered
in connection with the transaction for the purpose of providing such
funds does not exceed $300,000.
(c) At least ten days prior to the offering of the shares, the issuer
shall furnish to the Commission in writing the following information:
(1) That it proposes to offer shares in reliance upon the exemption
provided by this rule; (2) the estimated number of shares to be so
offered; (3) the aggregate market value of such shares as of the latest
practicable date; and (4) a brief description of the transaction in
connection with which the shares are to be offered. At the time of
filing this information, the applicant shall pay to the Commission a fee
of $100, no part of which shall be refunded.
(Secs. 3, 4, and 19, 48 Stat. 75, 77, 85, as amended; 15 U.S.C.
77c, 77d, 77s; secs. 3(b), 4(l), 19(a), 48 Stat. 75, 77, 85; secs.
209, 48 Stat. 908; 59 Stat. 167; sec. 12, 78 Stat. 580; 84 Stat.
1480; sec. 308(a)(2), 90 Stat. 57; sec. 18, 92 Stat. 275; sec. 2, 92
Stat. 962; sec. 301, 94 Stat. 2291, 2294; secs. 12(a), 12(h), 12(i),
16(a), 23(a), 48 Stat. 892, 896, 901; sec. 203a, 49 Stat. 704; sec. 8,
49 Stat. 1379, secs. 3, 8, 78 Stat. 565-568, 579; sec. 1, 82 Stat. 454;
sec. 105(b), 88 Stat. 1503; sec. 18, 89 Stat. 155; 15 U.S.C. 77c(b),
77d(l), 77s(a), 78l(a), 78l(h), 78l(i), 78p(a), 78w(a))
(27 FR 3289, Apr. 6, 1962, as amended at 37 FR 22978, Oct. 27, 1972;
47 FR 29652, July 8, 1982)
17 CFR 230.236 Regulation A -- General Exemptions
Authority: Secs. 230.251 to 230.264 issued under sec. 3, 19, 48
Stat. 85, as amended; 15 U.S.C. 77c, 77s, unless otherwise noted.
17 CFR 230.251 Definitions of terms used in 230.251 to 230.262.
As used in 230.251 to 230.262, the following terms shall have the
meaning indicated:
Affiliate. An affiliate of an issuer is a person controlling,
controlled by or under common control with such issuer. An individual
who controls an issuer is also an affiliate of such issuer.
Parent. A parent of a specified person is an affiliate controlling
such person directly, or indirectly through one or more intermediaries.
Predecessor. A predecessor of an issuer is (a) a person the major
portion of whose assets have been acquired directly or indirectly by the
issuer, or (b) a person from which the issuer acquired directly or
indirectly the major portion of its assets.
Promoter. The term promoter includes: (a) Any person who, acting
alone or in conjunction with one or more other persons, directly or
indirectly takes the initiative in founding and organizing the business
or enterprise of an issuer;
(b) Any person who, in connection with the founding or organizing of
the business or enterprise of an issuer, directly or indirectly receives
in consideration of services or property, or both services and property,
10 percent or more of any class of securities of the issuer or 10
percent or more of the proceeds from the sale of any class of
securities. However, a person who receives such securities or proceeds
either solely as underwriting commissions or solely in consideration of
property shall not be deemed a promoter within the meaning of this
paragraph if such person does otherwise take part in founding and
organizing the enterprise.
Province. A Province is any Province or Territory of Canada.
Resident. A resident of a specified country is an individual resident
of such country or a corporation or other organization which is
incorporated or organized under the laws of such country or any of its
political subdivisions.
State. A State is any State, Territory or insular possession of the
United States, or the District of Columbia.
Underwriter. The term underwriter shall have the meaning given in
section 2(11) of the Act.
(Reg. A, 21 FR 5739, Aug. 1, 1956, as amended at 46 FR 41767, Aug.
18, 1981)
17 CFR 230.252 Securities exempted.
(a) Except as hereinafter provided in 230.251 to 230.262,
securities issued by any of the following persons shall be exempt from
registration under the act if offered in accordance with the terms and
conditions of 230.251 to 230.262:
(1) Any corporation, unincorporated association or trust (i) which is
incorporated or organized under the laws of the United States or Canada
or any State or Province thereof and (ii) which has or proposes to have
its principal business operations in the United States or Canada; or
(2) Any individual who is a resident of, and has or proposes to have
his principal business operations in, any State or Province; or
(3) In the case of an offering to existing security holders on a pro
rata basis pursuant to warrants or rights, any direct or indirect
majority-owned subsidiary of any issuer specified in paragraph (a)(1) of
this section which has securities registered on a national securities
exchange pursuant to the provisions of the Securities Exchange Act of
1934.
(b) No exemption under this regulation shall be available for any of
the following securities:
(1) Fractional undivided interests in oil or gas rights as defined in
230.300, or similar interests in other mineral rights;
(2) Securities of any investment company registered or required to be
registered under the Investment Company Act of 1940, or any company
which has elected to be regulated as a business development company
under the Investment Company Act of 1940 or has notified the Commission
that it intends to elect to be regulated as a business development
company pursuant to section 54 of the Investment Company Act of 1940.
(c) No exemption under 230.251 to 230.264 shall be available for
the securities of any issuer if such issuer, any of its predecessors, or
any affiliated issuer:
(1) Has filed a registration statement which is the subject of any
pending proceeding or examination under section 8 of the act, or is the
subject of any refusal order or stop order thereunder within five years
prior to the filing of the notification required by 230.255;
(2) Is subject to any pending proceeding under 230.261 or any
similar rule adopted under section 3(b) of the Act, or to an order
entered thereunder within five years prior to the filing of such
notification;
(3) Has been convicted within five years prior to the filing of such
notification of any felony or misdemeanor in connection with the
purchase or sale of any security or involving the making of any false
filing with the Commission;
(4) Is subject to any order, judgment, or decree of any court of
competent jurisdiction temporarily or preliminarily restraining or
enjoining, or is subject to any order, judgment, or decree of any court
of competent jurisdiction, entered within five years prior to the filing
of such notification, permanently restraining or enjoining, such person
from engaging in or continuing any conduct or practice in connection
with the purchase or sale of any security or involving the making of any
false filing with the Commission; or
(5) Is subject to a U.S. Postal Service false representation order
entered under section 3005 of title 39 U.S.C., within five years prior
to the filing of the notification required by 230.255; or is subject
to a temporary restraining order or preliminary injunction entered under
section 3007 of Title 39 U.S.C., with respect to conduct alleged to have
violated section 3005 of title 39, U.S. Code.
This paragraph (c) of this section shall not apply to any order,
judgment, or decree contemplated by paragraphs (c) (1) through (5) of
this section because of its entry against any affiliated entity before
the affiliation with the issuer arose, if the affiliated entity is not
in control of the issuer and if the affiliated entity and the issuer are
not under the common control of a third party who was in control of the
affiliated entity at the time the order, judgment, or decree was entered
against it.
(d) No exemption under 230.251 to 230.264 shall be available for
the securities of any issuer, if any of its directors, officers, general
partners, or beneficial owners of ten percent or more of any class of
its equity securities (beneficial ownership meaning the power to vote or
direct the vote and/or the power to dispose or direct the disposition of
such securities), any of its promoters presently connected with it in
any capacity, any underwriter of the securities to be offered, or any
partner, director or officer of any such underwriter:
(1) Has been convicted within ten years prior to the filing of the
notification required by 230.255 of any felony or misdemeanor in
connection with the purchase or sale of any security, involving the
making of a false filing with the Commission, or arising out of the
conduct of the business of an underwriter, broker, dealer, municipal
securities dealer, or investment adviser;
(2) Is subject to any order, judgment, or decree of any court of
competent jurisdiction temporarily or preliminarily enjoining or
restraining, or is subject to any order, judgment, or decree of any
court of competent jurisdiction, entered within five years prior to the
filing of such notification, permanently enjoining or restraining such
person from engaging in or continuing any conduct or practice in
connection with the purchase or sale of any security or involving the
making of a false filing with the Commission, or arising out of the
conduct of the business of an underwriter, broker, dealer, municipal
securities dealer, or investment adviser;
(3) Is subject to an order of the Commission entered pursuant to
section 15(b), 15B(a) or 15B(c) of the Securities Exchange Act of 1934;
or is subject to an order of the Commission entered pursuant to section
203 (e) or (f) of the Investment Advisers Act of 1940;
(4) Is suspended or expelled from membership in, or suspended or
barred from association with a member of, an exchange registered as a
national securities exchange pursuant to section 6 of the Securities
Exchange Act of 1934, an association registered as a national securities
association under section 15A of the Securities Exchange Act of 1934, or
a Canadian securities exchange or association for any act or omission to
act constituting conduct inconsistent with just and equitable principles
of trade; or
(5) Is subject to a U.S. Postal Service false representation order
entered under section 3005 of title 39 U.S.C., within five years prior
to the filing of the notification required by 230.255; or is subject
to a restraining order or preliminary injunction entered under section
3007 of title 39 U.S.C., with respect to conduct alleged to have
violated section 3005 of title 39, U.S. Code.
(e) No exemption under 250.251 to 230.264 shall be available for
the securities of any issuer if any underwriter of such securities was,
or was named as, an underwriter of any securities:
(1) Covered by a registration statement which is the subject of any
pending proceeding or examination under section 8 of the Act, or is the
subject of any refusal order or stop order entered thereunder within
five years prior to the filing of the notification required by 230.255;
or
(2) Covered by any filing which is subject to any pending proceeding
under 230.261 of any similar rule adopted under section 3(b) of the
act, or to an order entered thereunder within five years prior to the
filing of such notification.
(f) No exemption under 230.251 to 230.264 shall be available for
the securities of an issuer which is subject to the requirements of
sections 13, 14, 15(d) of the Securities Exchange Act of 1934, unless
such issuer has filed all reports required by those sections to be filed
during the 12 calendar months preceding the filing of the notification
required by 230.255 (or for such shorter period that the issuer was
required to file such reports).
(g) Paragraph (c), (d), (e), or (f) of this section shall not apply
to the securities of any issuer if the Commission determines, upon a
showing of good cause, that it is not necessary under the circumstances
that the exemption be denied. Any such determination by the Commission
shall be without prejudice to any other action by the Commission in any
other proceeding or matter with respect to the issuer or any other
person.
(Secs. 3(b) and 3(c), Securities Act of 1933 (15 U.S.C. 77c (b) and
(c)); sec. 38, Investment Company Act of 1940 (15 U.S.C. 80a-37))
(Reg. A, 21 FR 5739, Aug. 1, 1956, as amended at 24 FR 8627, Oct.
24, 1959; 46 FR 13507, Feb. 23, 1981; 49 FR 35347, Sept. 7, 1984)
17 CFR 230.253 Special requirements for certain offerings.
(a) The following provisions of this section shall apply to any
offering under 230.251 to 230.262 of securities of any issuer which:
(1) Was incorporated or organized within one year prior to the date
of filing the notification required by 230.255 and has not had a net
income from operations; or
(2) Was incorporated or organized more than one year prior to such
date and has not had a net income from operations, of the character in
which the issuer intends to engage, for at least one of the last two
fiscal years.
(b) If the issuer conducts or proposes to conduct its principal
business operations in Canada, the securities to be offered hereunder
shall be qualified or made eligible for offering in the Province in
which such operations are or will be conducted. The securities of any
other issuer incorporated or organized under the laws of Canada or any
Province thereof shall be qualified or made eligible for offering in the
Province in which the issuer has its principal office or principal place
of business in Canada. All securities subject to this paragraph shall
be offered in the Province in which they are qualified or made eligible
for offering, concurrently with the offering in the United States.
Issuers engaged in extractive or manufacturing enterprises shall be
deemed to have their principal business operations in the Province in
which their principal plants or other properties are located.
(c) In computing the amount of securities which may be offered
hereunder, there shall be included, in addition to the securities
specified in 230.254:
(1) All securities issued prior to the filing of the offering
statement, a proposal to be issued, for a consideration consisting in
whole or in part of assets or services and held by the person to whom
issued; and
(2) All securities issued to and held by or proposed to be issued,
pursuant to options or otherwise, to any director, officer or promoter
of the issuer, or to any underwriter, dealer or security salesman:
Provided, That such securities need not be included to the extent that
effective provision is made, by escrow arrangements or otherwise, to
assure that none of such securities or any interest therein will be
reoffered to the public within one year after the commencement of the
offering hereunder and that any reoffering of such securities will be
made in accordance with the applicable provisions of the act.
(d) None of the securities to be offered hereunder shall be offered
for the account of any person other than the issuer of such securities.
(e) Section 230.257 shall not apply to any offering of securities
under 230.251 to 230.262 by any issuer which is subject to this
section.
(Reg. A, 21 FR 5739, Aug. 1, 1956, as amended at 46 FR 41767, Aug.
18, 1981)
17 CFR 230.254 Amount of securities exempted.
(a) For determining the requisite amount:
(1) The aggregate offering price of all securities of the issuer
offered or sold pursuant to 230.251 to 230.263 and any other
securities offered or sold within 1 year prior to the commencement of
the proposed offering pursuant to any other exemption under section 3(b)
of the Act or in violation of section 5(a) of the Act, shall not exceed
the following amounts:
(i) $1,500,000 if the securities are offered or sold by or on behalf
of the issuer, or by the estate of a decedent who owned the securities
at death if offered within 2 years after the death of a decedent, or by
affiliates of issuer: Provided, That the aggregate offering price of
securities offered or sold by or on behalf of any one affiliate other
than an estate shall not exceed $100,000; and
(ii) $100,000 if the securities are offered or sold by or on behalf
of any person other than the issuer or its affiliates; provided that
the aggregate offering price of all such securities offered or sold by
or on behalf of all such other persons shall not exceed $300,000: And
provided, That the aggregate offering price of securities offered or
sold by or on behalf of an estate pursuant to this paragraph and
paragraph (a)(1)(i) of this section shall not exceed $500,000.
(2) When two or more persons agree to act in concert for the purpose
of selling securities of the issuer, all securities of the same class
sold for the account of all such persons during any 12-month period
shall be aggregated for the purpose of determining the limitation on the
amount of securities sold.
(3) The following definitions shall apply for the purposes of this
rule:
(i) The term securities of the issuer shall include securities issued
by any predecessor of the issuer or by any affiliate of the issuer which
was organized or became such an affiliate within the past 2 years.
(ii) The term person when used with reference to a person who offers
securities in reliance upon the exemption provided by this section
includes, in addition to such person, all of the following persons:
(a) Any relative or spouse of such person, or any relative of such
spouse, any one of whom has the same home as such person;
(b) Any trust or estate in which such person or any of the persons
specified in paragraph (a)(3)(ii)(a) of this section collectively own 10
percent or more of the total beneficial interest or of which any of such
persons serve as trustee, executor or in any similar capacity; and
(c) Any corporation or other organization (other than the issuer) in
which such person or any of the persons specified in paragraph
(a)(3)(ii)(a) of this section are the beneficial owners collectively of
10 percent or more of any class of equity securities or 10 percent or
more of the equity interest.
(b) The aggregate offering price of securities which have a
determinable market value shall be computed upon the basis of such
market value as determined from transactions or quotations on a
specified date within 15 days prior to the date of filing the offering
statement or the offering price to the public, whichever is higher;
Provided, That the aggregate gross proceeds actually received from the
public for the securities offered hereunder shall not exceed the maximum
aggregate offering price permitted in the particular case by paragraph
(a) of this section.
(c) Where securities which have no determinable market value are
offered in exchange for outstanding securities, claims, property, or
services, the aggregate offering price thereof shall be computed at the
public offering price of securities of the same class for cash, or if no
cash offering is to be made, then upon the basis of the value of the
securities, claims, property or services to be received in exchange, as
established by bona fide sales made within a reasonable time, or in the
absence of such sales, upon the basis of the fair value of the
securities, claims, property or services to be received in exchange, as
determined by some accepted standard.
(d) The following securities need not be included in computing the
amount of securities which may be offered under this section:
(1) Unsold securities the offering of which has been withdrawn with
the consent of the Commission by amending the pertinent offering
statement to reduce the amount stated therein as proposed to be offered;
(2) Securities acquired or to be acquired, otherwise than for
distribution, by a single holder of the majority of the outstanding
voting stock of the issuer in connection with a pro rata offering to
stockholders;
(3) In the case of an offering by an issuer to its existing security
holders on a pro rata basis pursuant to warrants or rights, that portion
of the offering made outside of the United States and Canada;
(4) In the case of an offering of interests in an unincorporated
theatrical production, interests in any affiliated unincorporated
theatrical production; or
(5) In the case of an offering of interests in an unincorporated
issuer organized to hold title to, lease, operate or improve specific
real property, interests in any affiliated issuer organized to hold
title to, lease, operate or improve other specific real property.
(Reg. A, 21 FR 5739, Aug. 1, 1956, as amended at 23 FR 4454, June 20,
1958; 37 FR 599, Jan. 14, 1972; 43 FR 41385, Sept. 18, 1978; 46 FR
41767, Aug. 18, 1981)
17 CFR 230.255 Filing of offering statement.
(a) At least 10 days (Saturdays, Sundays and holidays excluded) prior
to the date on which the initial offering or sale of any securities is
to be made under this regulation, there shall be filed with the Regional
Office of the Commission specified below five copies of the offering
statement required by this Regulation which shall consist of Part I --
Notification, Part II -- Offering Circular, and Part III -- Exhibits.
The Commission may, however, in its discretion, authorize the
commencement of the offering prior to the expiration of such 10-day
period upon a written request for such authorization.
(b) The offering statement shall be signed by the issuer and each
person, other than the issuer, for whose account any of the securities
are to be offered. If the offering statement is signed by any person on
behalf of any other person, evidence of authority to sign on behalf of
such other person shall be filed with the offering statement, except
where an officer of the issuer signs on behalf of the issuer. At the
time of filing an offering statement, the applicant shall pay to the
Commission at the Regional Office where the offering statement is filed
a fee of $100.00, no part of which shall be refunded.
(c) The offering statement shall be filed with the Regional Office
for the region in which the issuer's principal business operations are
conducted or are proposed to be conducted in the United States;
Provided however, That if the registrant's principal business operations
are conducted or proposed to be conducted in the region covered by the
Philadelphia Regional Office, the offering statement may be filed either
at the Commission's principal office in Washington, DC or with the
Atlanta or the New York Regional Office. The Offering statement of any
issuer having or proposing to have its principal business operations in
Canada shall be filed with the Regional Office nearest the place where
the issuer's principal business operations are conducted or proposed to
be conducted, unless the offering is to be made through a principal
underwriter located in the United States, in which case the offering
statement shall be filed with the Regional Office for the region in
which such underwriter has its principal office. If the application of
the previous sentence would require a filing with the Philadelphia
Regional Office, such filing may be made either at the Commission's
principal Office in Washington, DC or with the Atlanta or the New York
Regional Office.
(d) An amendment to any part of the offering statement will
necessitate the filing of an amended offering statement which shall be
signed in the same manner as the original offering statement. Five
copies of such amendment shall be filed with the same Regional Office as
the original offering statement at least 10 days prior to any offering
or sale of the securities subsequent to the filing of such amendment, or
such shorter period as the Commission, in its discretion, may authorize
upon a written request for such authorization.
(e) An offering statement or any other document filed as a part
thereof may be withdrawn upon application unless the offering statement
is subject to an order under 230.261 at the time the application is
filed or becomes subject to such an order within 15 days (Saturdays,
Sundays and holidays excluded) thereafter. Provided That an offering
statement may not be withdrawn after any of the securities proposed to
be offered thereunder have been sold. Any such application shall be
signed in the same manner and filed with the same Regional Office as the
offering statement.
(f) The manually signed original (or in the case of duplicate
originals, one duplicate original) of all offering statements, reports,
or other documents filed shall be numbered sequentially (in addition to
any internal numbering which otherwise may be present) by handwritten,
typed, printed, or other legible form of notation from the cover page of
the document through the last page of that document and any exhibits or
attachments thereto. Further, the total number of pages contained in a
numbered orginal shall be set forth on the first on the first page of
the document.
(g) Each offering statement shall contain an exhibit index, which
should immediately precede the exhibits filed with such offering
statement. The index shall list each exhibit filed and identify by
handwritten, typed, printed, or other legible form of notation in the
manually signed original, the page number in the sequential numbering
system described in paragraph (f) of this section where such exhibit can
be found or where it is stated that the exhibit is incorporated by
reference. Further, the first page of the manually signed offering
statement shall list the page in the filing where the exhibit index is
located.
(46 FR 41767, Aug. 18, 1981, as amended at 51 FR 12842, Apr. 16,
1986)
17 CFR 230.256 Filing and use of the offering circular.
(a) Except as provided in paragraph (c) of this section and in
230.257 of this part:
(1) No written offer of securities of any issuer shall be made under
this regulation unless an offering circular containing the information
specified in Part II of the offering statement is concurrently given or
has previously been given to the person to whom the offer is made, or
has been sent to such person under such circumstances that it would
normally have been received by him at or prior to the time of such
written offer; and
(2) No securities of such issuer shall be sold under this regulation
unless such an offering circular is furnished to the person to whom the
securities are expected to be sold at least 48 hours prior to the
mailing of the confirmation of sale to such person, or is sent to such
person under such circumstances that it would normally be received by
him 48 hours prior to his receipt of confirmation of the sale;
Provided, however, If the issuer is required to file reports pursuant to
section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended, the offering circular may be furnished with or prior to the
confirmation of sale.
(b) In the case of transactions effected on a securities exchange,
delivery of the offering circular (offering statement -- Part II) shall
be deemed to have been made if prior to such transactions a reasonable
number of copies of the offering circular have been furnished to the
exchange for delivery to any person or persons requesting copies
thereof.
(c) Any written advertisement or other written communication, or any
radio or television broadcast, which states from whom an offering
circular containing the information specified in Part II of the offering
statement may be obtained and in addition contains no more than the
following information may be published, distributed or broadcast at or
after the commencement of the public offering to any person prior to
sending or giving such person a copy of such circular:
(1) The name of the issuer of such security;
(2) The title of the security, the amount being offered, and the
per-unit offering price to the public;
(3) The identity of the general type of business of the issuer; and
(4) A brief statement as to the general character and location of its
property.
(d) If the offering is not complete within nine months from the date
of the offering circular (offering statement -- Part II) a revised
offering circular shall be prepared, filed and used in accordance with
these rules as for an original offering circular, except that in the
case of offerings under stock purchase, savings, stock option or other
similar plans for the benefit of employees, if the offering is not
completed within 12 months from the date of the offering circular, a
revised offering circular shall be prepared, filed and used in
accordance with these rules as for an orginal offering circular. In no
event shall an offering circular be used which is false or misleading in
light of the circumstances then existing.
(e) If the original offering circular (offering statement -- Part II)
is revised or amended, such revised or amended circular shall be filed
as an amendment to the offering statement, as provided by 230.255(d),
with the appropriate Regional Office of the Commission at least 10 days
prior to its use, or such shorter period as the Commission may, in its
discretion, authorize upon a written request for such authorization.
(f) Sales by a dealer (including an underwriter no longer acting as
an underwriter in respect of the security involved in such transaction)
of securities of an issuer not subject, immediately prior to the time of
filing an offering statement, to the provisions of section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended, offered
pursuant to this regulation and taking place prior to the expiration of
ninety days after the first date upon which the securities were bona
fide offered to the public, shall not be exempt pursuant to this
regulation unless: (1) The dealer furnishes a copy of the then current
offering circular (offering statement -- Part II) to the purchaser prior
to or with the purchaser's receipt of the confirmation of the sale; or
(2) the offering circular has previously been mailed or delivered to
such purchaser. Failure by a dealer to comply with the provision of
this paragraph shall not otherwise affect the availability of the
exemption for any other person, including the aggregate amount of
securities exempted pursuant to Rule 254.
(g) The issuer or, if there is an underwriter, the underwriter shall
provide reasonable quantities of copies of the offering circular
(offering statement -- Part II) to any dealer on request prior to the
expiration of ninety days after the first date upon which securities of
such issuer were bona fide offered to the public pursuant to this
regulation.
(h) An offering circular filed pursuant to paragraph (e) of this
section may be distributed prior to the expiration of the 10-day waiting
period for offerings provided for in 230.255 (a) and (d) and paragraph
(e) of this section and such distribution may be accompanied or
following by oral offers related thereto, provided the conditions in
paragraphs (h) (1) through (4) are met. For the purposes of this
section, any offering circular distributed prior to the expiration of
the ten day waiting period is called a Preliminary Offering Circular.
Such Preliminary Offering Circular may be used to meet the requirements
of paragraph (a)(2) of this section: Provided, That if a Preliminary
Offering Circular is inaccurate or inadequate in any material respect, a
revised Preliminary Offering Circular or an offering circular of the
type referred to in paragraph (h)(4) of this section shall be furnished
to all persons to whom the securities are to be sold at least 48 hours
prior to the mailing of any confirmation of sale to such persons, or
shall be sent to such persons under such circumstances that it would
normally be received by them 48 hours prior to their receipt of
confirmation of the sale.
(1) Such Preliminary Offering Circular contains substantially the
information required by this section to be included in an offering
circular, or contains substantially that information except for the
omission of information with respect to the offering price, underwriting
discounts or commission, discounts or commissions to dealers, amount of
proceeds, conversion rates, call prices, or other matters dependent upon
the offering price. For issuers not subject to the reporting provisions
under section 13(a) or 15(d) of the Securities Exchange Act of 1934, the
disclosure on the outside front cover page of the Preliminary Offering
Circular should include a bona fide estimate of the range of the maximum
offering price and maximum number of shares or other units of securities
to be offered or should include a bona fide estimate of the principal
amount of debt securities to be offered.
(2) The outside front cover page of the Preliminary Offering Circular
shall bear the caption ''Preliminary Offering Circular,'' the date of
its issuance, and the following statement which shall run along the left
hand margin of the page and be printed perpendicular to the text, in
boldface type at least as large as that used generally in the body of
such offering circular:
An offering statement pursuant to Regulation A relating to these
securities has been filed with the Securities and Exchange Commission.
Information contained in this Preliminary Offering Circular is subject
to completion or amendment. These securities may not be sold nor may
offers to buy be accepted prior to the time an offering circular which
is not designated as a Preliminary Offering Circular is delivered. This
Preliminary Offering Circular shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sales of
these securities in any state in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such state.
(3) The Preliminary Offering Circular relates to a proposed public
offering of securities which is to be sold by or through one or more
underwriters who are broker-dealers registered under section 15 of the
Securities Exchange Act of 1934, each of whom has furnished a signed
Consent and Certification in the form prescribed as a condition to the
use of such offering circular;
(4) An offering circular which contains all of the information
specified in Part II of the offering statement and which is not
designated as a Preliminary Offering Circular is furnished with or prior
to delivery of the confirmation of sale to any person who has been
furnished with a Preliminary Offering Circular pursuant to this
paragraph.
(Secs. 3(b), 19(a), 48 Stat. 75, 85; sec. 209, 48 Stat. 908; 59
Stat. 167, Pub. L. 91-565, 84 Stat. 1480; sec. 308(a) (1), (2), (3), 90
Stat. 56, 57; Pub. L. 95-283, sec. 18, 92 Stat. 275; Pub. L. 95-425,
sec. 2, 92 Stat. 962; 15 U.S.C. 77c(b), 77s(a))
(Reg. A, 21 FR 5739, Aug. 1, 1956, as amended at 38 FR 17199, June
29, 1973; 46 FR 41768, Aug. 18, 1981)
17 CFR 230.257 Offerings not in excess of $100,000.
Except as to issues specified in paragraph (a) of 230.253 and issues
of assessable stock, the offering circular (offering statement -- Part
II) need not be filed or used in connection with an offering of
securities under this regulation if the aggregate offering price of all
securities of the issuer, its predecessors and affiliates offered or
sold without the use of such an offering circular does not exceed
$100,000, computed in accordance with 230.254, provided the following
conditions are met:
(a) In addition to filing Part I -- Notification and Part III --
Exhibits, there shall be filed as an exhibit five copies of a statement
setting forth the information (other than financial statements) required
by Part II -- Offering Circular of the offering statement.
(b) No advertisement, article or other communication published in any
newspaper, magazine or other periodical and no radio or television
broadcast in regard to the offering shall contain more than the
following information:
(1) The name of the issuer of such security;
(2) The title of the security, amount offered, and the per-unit
offering price to the public;
(3) The identity of the general type of business of the issuer;
(4) A brief statement as to the general character and location of its
property; and
(5) By whom orders will be filled or from whom further information
may be obtained.
(Secs. 3(b), 19(a), 48 Stat. 75, 85; secs. 202, 209, 48 Stat. 906,
908; 59 Stat. 167; Pub. L. 91-565, 84 Stat. 1480; sec. 308(a)(2), 90
Stat. 57; 15 U.S.C. 77c(b), 77s(a))
(Reg. A, 21 FR 5739, Aug. 1, 1956, as amended at 24 FR 8627, Oct.
24, 1959; 43 FR 41385, Sept. 18, 1978; 46 FR 41769, Aug. 18, 1981)
17 CFR 230.258 Sales material to be filed.
Four copies of each of the following communications prepared or
authorized by the issuer or anyone associated with the issuer, and of
its affiliates or any principal underwriter for use in connection with
the offering of any securities under 230.251 to 230.265 shall be
filed, with the office of the Commission with which the offering
statement is filed, at least five days (exclusive of Saturdays, Sundays
and holidays) prior to any use thereof, or such shorter period as the
Commission, in its discretion, may authorize:
(a) Every advertisement, article or other communication proposed to
be published in any newspaper, magazine or other periodical;
(b) The script of every radio or television broadcast; and
(c) Every letter, circular or other written communication proposed to
be sent, given or otherwise communicated to more than ten persons,
except an offering circular (offering statement -- Part II) filed
pursuant to 230.256(e).
(Reg. A, 21 FR 5739, Aug. 1, 1956, as amended at 46 FR 41769, Aug.
18, 1981)
17 CFR 230.259 Statement required in all offering circulars.
There shall be set forth on the cover page of every offering circular
the following statement in capital letters printed in boldface roman
type at least as large as ten-point modern type and at least two points
leaded:
''THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS
UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE
TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR
COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING LITERATURE.
THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION
WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN
INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED HEREUNDER ARE
EXEMPT FROM REGISTRATION.''
(46 FR 41769, Aug. 18, 1981)
17 CFR 230.260 Reports of sales hereunder.
Within 30 days after the end of each six-month period following the
date of the original offering circular (offering statement -- Part II)
required by 230.256, or of the statement required by 230.257, the
issuer or other person for whose account the securities are offered
shall file with the Regional Office of the Commission with which the
offering statement was filed four copies of a report on Form 2-A
containing the information called for by that form. A final report
shall be made upon completion or termination of the offering and may be
made prior to the end of the six-month period in which the last sale is
made.
(46 FR 41769, Aug. 18, 1981)
17 CFR 230.261 Suspension of exemption.
(a) The Commission may, at any time after the filing of an offering
statement, enter an order temporarily suspending the exemption, if it
has reason to believe that:
(1) No exemption is available under 230.251 to 230.262 for the
securities purported to be offered hereunder or any of the terms or
conditions of 230.251 to 230.262 have not been complied with,
including failure to file any report as required by 230.260.
(2) The offering statement or any other sales literature contains any
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they are made, not misleading;
(3) The offering is being made or would be made in violation of
section 17 of the act;
(4) Any event has occurred after the filing of the offering statement
which would have rendered the exemption hereunder unavailable if it had
occurred prior to such filing;
(5) Any person specified in paragraph (c) of 230.252 has been
indicted for any crime or offense of the character specified in
paragraph (c)(3) thereof, or any proceeding has been initiated for the
purpose of enjoining any such person from engaging in or continuing any
conduct or practice of the character specified in paragraph (c)(4);
(6) Any person specified in paragraph (d) of 230.252 has been
indicted for any crime or offense of the character specified in
paragraph (d)(1) thereof, or any proceeding has been initiated for the
purpose of enjoining any such person from engaging in or continuing any
conduct, or practice of the character specified in paragraph (d)(2); or
(7) The issuer or any promoter, officer, director or underwriter has
failed to cooperate, or has obstructed or refused to permit the making
of an investigation by the Commission in connection with any offering
made or proposed to be made hereunder.
(b) Upon the entry of an order under paragraph (a) of this section
the Commission will promptly give notice to the persons on whose behalf
the offering statement was filed (1) that such order has been entered,
together with a brief statement of the reasons for the entry of the
order, and (2) that the Commission, upon receipt of a written request
within 30 days after the entry of such order, will, within 20 days after
the receipt of such request, set the matter down for hearing at a place
to be designated by the Commission. If no hearing is requested and none
is ordered by the Commission, the order shall become permanent on the
thirtieth day after its entry and shall remain in effect unless or until
it is modified or vacated by the Commission. Where a hearing is
requested or is ordered by the Commission, the Commission will, after
notice of an opportunity for such hearing, either vacate the order or
enter an order permanently suspending the exemption.
(c) The Commission may at any time after notice of and opportunity
for hearing, enter an order permanently suspending the exemption for any
reason upon which it could have entered a temporary suspension order
under paragraph (a) of this section. Any such order shall remain in
effect until vacated by the Commission.
(d) All notices required by this rule shall be given to the person or
persons on whose behalf the offering statement was filed by personal
service, registered or certified mail or confirmed telegraphic notice at
the addresses of such persons given in the offering statement.
(Reg. A, 21 FR 5739, Aug. 1, 1956, as amended at 23 FR 4455, June 20,
1958; 46 FR 41770, Aug. 18, 1981)
17 CFR 230.262 Consent to service of process.
(a) If the issuer, any of its directors or officers, any person for
whose account any of the securities are to be offered, or any
underwriter of the securities to be offered, is not a resident of the
United States, each such non-resident person shall, at the time of
filing the offering statement required by 230.255, furnish to the
Commission in a form prescribed by or acceptable to it, a written
irrevocable consent and power of attorney which:
(1) Designates the Securities and Exchange Commission as an agent
upon whom may be served any process, pleadings, or other papers in any
civil suit or action brought against the person executing the consent
and power of attorney or to which he has been joined as defendant or
respond- ent, in any appropriate court in any place subject to the
jurisdiction of the United States, where the cause of action (i) accrues
on or after the effective date of this section, and (ii) arises out of
any offering made or purported to be made under 230.251 to 230.262 or
any purchase or sale of any security in connection therewith; and
(2) Stipulates and agrees that any such civil suit or action may be
commenced by the service of process upon the Commission and the
forwarding of a copy thereof as provided in paragraph (b) of this
section, and that the service as aforesaid of any such process,
pleadings, or other papers upon the Commission shall be taken and held
in all courts to be valid and binding as if due personal service thereof
had been made.
(b) Service of any process, pleadings or other papers on the
Commission under this part shall be made by delivering the requisite
number of copies thereof to the Secretary of the Commission or to such
other person as the Commission may authorize to act in its behalf.
Whenever any process, pleadings or other papers as aforesaid are served
upon the Commission, it shall promptly forward a copy thereof by
registered or certified mail to the appropriate defendants at their last
address of record filed with the Commission. The Commission shall be
furnished a sufficient number of copies for such purpose, and one copy
for its file.
(Reg. A, 21 FR 5739, Aug. 1, 1956, as amended at 29 FR 16982, Dec.
11, 1964; 46 FR 41770, Aug. 18, 1981)
17 CFR 230.263 Notice of delayed or suspended offering and sale.
If within three business days after the issuer had received notice
that the Commission has no further comments with respect to the offering
statement a bona fide effort is not made to proceed with the offering
and sale of the securities proposed to be offered under this regulation,
or if the offering or sale of such securities is suspended by the issuer
or any underwriter within 15 days after the issuer has received such
notice, a notice of the delay or suspension, stating the reasons
therefor, shall be filed by the issuer or underwriter with the Regional
Office of the Commission with which the offering statement was filed,
unless such information is set forth in the offering statement. Such
notice shall be sent promptly by telegraph or air mail and if sent by
telegraph shall be confirmed in writing within a reasonable time by the
filing of a signed copy of the notice.
(46 FR 41770, Aug. 18, 1981)
17 CFR 230.264 Procedure with respect to abandoned offering statement.
When an offering statement under 230.251 to 230.265, or the latest
substantive amendment thereto, if any, has been on file with the
Commission for a period of nine months from its filing date and the
offering has not commenced, the Commission may, in its discretion,
proceed in the following manner to determine whether such filing has
been abandoned by the issuer.
(a) Notice will be sent to the issuer, and to any counsel for the
issuer named in the offering statement, by registered or certified mail,
return receipt requested, addressed to the most recent addresses for
issuer and issuer's counsel as reflected in the offering statement.
Such notice will inform the issuer and issuer's counsel that the
offering statement or amendments thereto is out of date and must be
either amended to comply with applicable requirements of 230.251 to
230.265 or be withdrawn within thirty days after the date of such
notice.
(b) If the issuer or issuer's counsel fails to respond to such notice
by filing a substantive amendment or withdrawing the offering statement
or does not furnish a satisfactory explanation as to why the issuer has
not done so within thirty days, the Commission may, where consistent
with the public interest and the protection of investors, enter an order
declaring the offering statement abandoned.
(c) When such an order is entered by the Commission, the papers
comprising the offering statement and any amendment thereto will not be
removed from the files of the Commission but will be plainly marked in
the following manner: ''Declared abandoned by order dated ------ .''
(46 FR 41770, Aug. 18, 1981)
17 CFR 230.264 Regulation B -- Exemption Relating to Fractional
Undivided Interests in Oil or Gas Rights
Source: Sections 230.300 through 230.346 appear at 37 FR 23831, Nov.
9, 1972, unless otherwise noted.
17 CFR 230.300 Definitions of terms used in Regulation B.
(a) As used in Regulation B ( 230.300 -- 230.346), the following
terms shall have the respective meanings set forth below:
(1) Fractional undivided interests. The term fractional undivided
interest in oil or gas rights shall include fractional undivided
interests in landowner's royalty interests, overriding royalty
interests, working interests, participating interests, and oil and gas
payments as defined in paragraphs (a) (2) to (6) inclusive of this
section.
(2) Landowner's royalty interest. The term landowner's royalty
interest means the right in the royalty reserved by a landowner or fee
owner upon the creation of an oil and gas lease.
(3) Overriding royalty interest. The term overriding royalty
interest means the right of participation in the oil or gas, or in the
proceeds from the sale of the oil or gas, produced from a specified
tract or tracts, which right is limited in duration to the terms of an
existing lease and is not subject to any portion of the expense of
development, operation, or maintenance.
(4) Working interest. The term working interest means that right in
an oil or gas leasehold which is subject to any portion of the expense
of development, operation, or maintenance.
(5) Participating interest. The term participating interest means
the right of participation in the oil or gas, or in the proceeds from
the sale of oil or gas, produced from a specified tract or tracts, or
well(s), which right is limited in duration to the terms of an existing
lease and is subject to any portion of the expense of development,
operation, or maintenance.
(6) Oil or gas payment. The term oil and gas payment means the right
of participation in the oil or gas, or in the proceeds from the sale of
the oil or gas, produced from a specified tract or tracts, which is
limited to a maximum amount fixed in barrels of oil, cubic feet of gas,
or dollars.
(7) Offeror. The term offeror means any issuer of, underwriter of,
or dealer in, any of the interests or rights offered under Regulation B
( 230.300-230.346) or any other person who issues, offers, or sells,
any such interest or rights.
(8) Offering sheet. The term offering sheet means the offering sheet
required by 230.310.
(9) Affiliate. An affiliate of any person is a person controlling,
controlled by, or under common control with such person.
(10) The terms person, issuer, underwriter, and dealer shall have the
meanings given in section 2 of the Act.
(b) Where the terms defined in paragraphs (a) (1) through (10) of
this section are used in an offering sheet, such terms shall not be
given a meaning inconsistent with such definitions. Other technical
terms used in the offering sheet should not be inconsistent with their
customary usage in the oil and gas industry.
17 CFR 230.302 Interests exempted.
(a) Except as otherwise provided in this Regulation B ( 230.300 --
230.346), fractional undivided interests in oil and gas rights, such as
landowner's royalty interests, oil or gas payments, overriding royalty
interests, participating interests, or working interests which are
offered and sold in accordance with the terms and conditions of this
Regulation B ( 230.300 -- 230.346), shall be exempt from registration
under the Act, provided the aggregate amount of the offering does not
exceed $250,000.
(b) No exemption shall be available under this Regulation B unless
the operating lessee or lessees will own, as a minimum amount,
unencumbered in his name or their names, upon completion of the sale of
the issue, a working interest in the tract or tracts involved equal to
whichever of the following amounts is greater: (1) 20 percent of the
total production from such tract or tracts of all oil, gas, or other
hydrocarbon substances, or (2) the total percentage of production from
such tract or tracts which is not subject to any portion of the expenses
of development, operation, or maintenance, such as the landowner's
royalty and overriding royalty.
(c) As used in this section, the term operating lessee or lessees
shall include the lessee of record actually engaged in developing and
operating the tract or tracts involved and all other owners of working
interests in the tract or tracts, who are regularly engaged in the
business of exploring for or producing oil or gas and who have consented
in writing to the development and operation of said tract or tracts by
such lessee of record.
(d) No exemption shall be available under this Regulation B (
230.300 -- 230.346) for limited partnership interests, reversionary
interests, and interests in net profits. For purposes of this paragraph
the term reversionary interests means the right of participation in an
oil and gas right after the recovery by that right of all of its
drilling, completion, and operating costs; and the term interest in net
profits means the right of participation in the proceeds from the sale
of the oil or gas after deduction of all expenses of operation.
17 CFR 230.304 Interests involving noncontiguous tracts.
(a) Interests involving noncontiguous tracts of land may be included
in the same offering sheet, only if the following conditions are met:
(1) All of the interests to be offered thereunder are landowner's
royalty interests; and either:
(i) All of the tracts involving such interests are currently
producing oil or gas, are located wholly within the limits of the same
oil or gas pool, and are being currently operated by the same operator
under an oil and gas lease executed by one or more landowners, each of
whom was, at the time of the execution of the lease, the owner of a fee
or mineral interest in each of the tracts involved; or
(ii) All of the tracts involving such interests are nonproducing but
appear, on the basis of all past and proposed development for oil or
gas, to have equal possibilities for production of oil or gas; and
(2) The purchaser of any such interest is entitled to the same
fractional portion of the oil and gas produced from each tract covered
by the offering sheet.
17 CFR 230.306 Limitations on offeror.
(a) No exemption shall be available under this regulation to any
offeror if such offeror or any officer, director, predecessor, or
affiliate of such offeror as a result of any civil, criminal, or
governmental or self-regulatory administrative proceeding, or
examination commenced after January 1, 1973:
(1) Has been convicted within 10 years prior to the filing or use of
such offering sheet of any crime or offense in connection with the
purchase or sale of securities;
(2) Is subject to any order, judgment or decree of any court of
competent jurisdiction entered within 5 years prior to the filing or use
of an offering sheet, temporarily or permanently restraining or
enjoining such offeror from engaging in or continuing any conduct or
practice in connection with the purchase or sale of any security, or
arising out of such person's conduct as an underwriter, broker, dealer,
or investment adviser;
(3) Is subject to a United States Post Office fraud order entered
within 5 years prior to the filing or use of an offering sheet;
(4) Has filed a registration statement which is the subject of any
proceeding or examination under section 8 of the Act, or is the subject
of any refusal order or stop order entered thereunder within 5 years
prior to the filing or use of such offering sheet;
(5) Is subject to an order of the Commission pursuant to section
15(b) of the Securities Exchange Act of 1934, or pursuant to section
203(d) or (e) of the Investment Advisers Act of 1940, or is suspended,
or has been expelled from membership in a national or provincial
securities dealers association or national securities exchange for
conduct inconsistent with just and equitable principles of trade, if
such order has been issued, or such action has been taken within 5 years
prior to the filing or use of an offering sheet; and
(6) Has made any filing pursuant to sections 3 (b) or (c) of the
Securities Act of 1933 which is under an order of temporary suspension,
or which is and has been under an order of permanent suspension within 5
years prior to the filing or use of such offering sheet.
(b) No exemption shall be available under Regulation B ( 230.300 --
230.346) if the offeror is in fact, a dealer and at the time of any
offer to sell or any sale is not duly registered as a dealer pursuant to
section 15 of the Securities Exchange Act of 1934, as amended.
(c) Notwithstanding the foregoing, this section shall not apply to
any offering if the Commission determines, upon filing of an application
and showing of good cause, that it is not necessary in the public
interest and for the protection of investors that the exemption be
denied. Any such relief granted by the Commission may be either general
or on a specific filing basis. Any such determinations by the
Commission shall be without prejudice to any other action by the
Commission in any other proceeding or matter with respect to the offeror
or any other persons.
17 CFR 230.310 Filing and use of the offering sheet.
(a) At least 10 days prior to the commencement of the offering of any
securities under this Regulation B ( 230.300 -- 230.346), four copies
of an offering sheet containing the information specified in Rule 326
shall be filed with the Commission by or on behalf of the offeror of the
interests. At the time of filing the offering sheet, the applicant
shall pay to the Commission a fee of $100, no part of which shall be
refunded. Unless amended, the offering sheet shall become effective and
an offering may commence on the 11th day following such filing with the
Commission, provided that the Commission has received satisfactory
assurance that the offeror or someone acting on its behalf has furnished
a notification of the proposed offering to the state securities
administrator of each state in which the interests are proposed to be
offered. The Commission may, however, in its discretion, authorize the
commencement of the offering prior to the expiration of such 10-day
period.
Note 1: The notification to the relevant states shall consist of a
written statement setting forth the information specified in Rule 318(a)
(1)-(6) and the date the offering sheet was or will be filed with the
Commission. A written representation listing the states so notified
shall be furnished in a letter to the staff. If the offeror
subsequently decides to offer in a state not on the list, the offeror
prior to offering in the state shall notify the state administrator
involved and then by letter inform the staff of the change.
Note 2: Intentional misstatements or omissions of facts in the
letter to the staff constitute Federal criminal violations. (See 18
U.S.C. 1001.)
(b) Except as provided in 230.318, no securities shall be offered,
orally or otherwise, under Regulation B ( 230.300 -- 230.346) unless at
or prior to the time of the initial offer of such securities an offering
sheet meeting the requirements of paragraph (a) of this section
concurrently is given to the person to whom the offer is made.
(c) The offer and sale of securities under Regulation B (
230.300-230.346) shall be made through an offering sheet meeting the
requirements of paragraph (a) of this section, and the information
contained therein shall be as of a date not more than 120 days prior to
the use of such offering sheet.
(d) No sale shall be made nor money or other consideration accepted
from any person for the purchase of any security offered under this
Regulation B until 48 hours after a copy of the offering sheet has been
delivered to such person.
(e) If any sales under an offering sheet have been made and not
rescinded, the offering sheet may be refiled only once thereafter to
extend the time within which to complete the offering: Provided, That
adequate disclosure was made in the offering sheet that such a refiling
may be made.
(f) Within 10 days after the effective date of the offering sheet or
any amendment thereto, two copies of such offering sheet shall be filed
with the Commission in the exact form in which it is to be used. Each
offering sheet so filed shall be dated and clearly identified in red on
the first page as being a definitive copy of the offering sheet.
(37 FR 23831, Nov. 9, 1972, as amended at 41 FR 1272, Jan. 7, 1976)
17 CFR 230.312 Filing of offering sheets on behalf of other persons.
An offering sheet may be filed with the Commission for, and on behalf
of, other persons, provided all such other persons are duly registered
as dealers under section 15 of the Securities Exchange Act of 1934, and
addresses of all such persons are filed with the Commission in duplicate
prior to any use of such offering sheet by such other person; and the
Commission may refuse to accept for filing any list which contains the
name of any person who is not so registered.
17 CFR 230.314 Delivery of evidence of title.
Prior to the making of a contract of sale with, and prior to the
payment of any part of the consideration by, the purchaser of any
interest offered under Regulation B ( 230.300 -- 230.346), the offeror
shall deliver to the purchaser evidence satisfactory to the purchaser of
the validity of the title which he is to receive and upon which the
value of his interest depends.
17 CFR 230.316 Reports.
(a)(1) On or before the 15th day after the expiration of each
effective offering sheet pursuant to Regulation B ( 230.300 --
230.346), or the termination of sales, whichever comes first, the
offeror, or offerors collectively, if more than one, shall file with the
Commission one copy of a report on Form 1-G ( 239.101(b)(2) of this
chapter) containing the information called for by that form. This
report shall be filed whether or not any sales were made under the
offering sheet.
(2) An additional such report on Form 1-G shall be filed on or before
the 15th day after the termination of sales, or after the expiration of
each additional effective offering sheet covering the same tract or
tracts, whichever comes first, where such offering sheet has been
refiled to extend time for the offer.
(3) These reports shall be kept confidential unless the Commission
shall order otherwise.
(b) Not later than 3 calendar months after the termination of the
offering, the offeror shall file with the Commission and send to
purchasers of interests a report on Form 3-G ( 239.101(b)(2) of this
chapter), containing the information called for by that form. This form
shall be filed and distributed at the times specified in the
instructions to the form.
17 CFR 230.318 Use of sales material.
(a) Any written advertisement or other written communication, or any
radio or television broadcast, which states from whom an offering sheet
meeting the requirements of Regulation B ( 230.300-230.346) may be
obtained and, in addition, contains no more than the following
information, may be published, distributed, or broadcast at or after the
commencement of the public offering to any person prior to sending or
giving such person a copy of the offering sheet:
(1) The name of the offeror of the interests;
(2) The identity or type of the interests to be offered;
(3) The number of such interests to be offered;
(4) The location (county and state) of the tract or tracts involved;
(5) The price of the interest to be offered; or
(6) The type of well to be drilled, such as an exploratory or
developmental well.
(b) Except for the offering sheet required by Regulation B ( 230.300
-- 230.346) and any material permitted by paragraph (a) of this section,
no other advertisement, radio, or television broadcast, or written
communication shall be used in connection with the offering of
securities under Regulation B ( 230.300 -- 230.346), except as required
by state law.
17 CFR 230.320 Restricting use of estimations not included in offering
sheets.
A person using any estimation of the amount of oil or gas recoverable
from the tract involved, or from any other tract for comparative
purposes, in connection with an offer to sell any fractional undivided
interest in oil or gas rights, defined in 230.300 of this chapter,
shall not be entitled to the exemption provided by Regulation B (
230.300-230.346), and, shall not be relieved from any liability which,
in the absence of the exemption provided by Regulation B, would be
imposed upon such person because such security was unregistered, unless
such estimation is permitted to be and is included in, and furnished as
part of, an offering sheet accurately describing such security.
17 CFR 230.322 Prohibition of certain statements.
No offering sheet or other written or oral communication used in
connection with any offering under Regulation B ( 230.300 -- 230.346)
shall contain any language stating or implying that the Commission has
in any way passed upon the merits of, or given its approval to, the
securities offered or the terms of the offering, or has determined that
the securities are exempt from registration, or has made any finding
that the statements in any such offering sheet or other communication
are accurate or complete.
17 CFR 230.324 Liability for unauthorized use of offering sheet.
Any person using an offering sheet in connection with an offer to
sell any security described therein shall not be entitled to the
exemption provided by Regulation B ( 230.300 -- 230.346), and, shall
not be relieved from any liability which, in the absence of the
exemption provided by Regulation B, would be imposed upon such person
because such security was unregistered, unless such offering sheet has
previously been filed with the Commission by, or for, or on behalf of,
such person, and is effective at the time of its use.
17 CFR 230.326 Form and contents of offering sheets.
(a) The offering sheets required by Regulation B ( 230.300 --
230.346) shall be filed with the Commission in the form prescribed in
the schedules specifically enumerated below, which schedules, as amended
and adopted, are, by reference, hereby incorporated in, and made a part
of, this section.
(1) Schedule A. If the interests offered are producing landowner's
royalty interests.
(2) Schedule B. If the interests offered are nonproducing
landowner's royalty interests.
(3) Schedule C. If the interests offered are producing overriding
royalty interests, working interests, or participating interests, or are
oil payments, gas payments, or oil and gas payments to be made from
tracts represented to be producing at the time of the offering.
(4) Schedule D. If the interests offered are nonproducing overriding
royalty interests, working interests, or participating interests, or are
oil payments, gas payments, or oil and gas payments to be made from
tracts represented to be nonproducing at the time of the offering.
17 CFR 230.328 Preparation of offering sheet.
(a) The offering sheet shall contain the information called for by
all of the applicable items and required exhibits of the appropriate
schedule according to the instructions thereto, but the instructions
thereto shall not be repeated in the offering sheet.
(b) The information required shall be furnished as of a specified
date no earlier than 30 days prior to the date of filing the offering
sheet with the Commission, or as of such other date as may be indicated
in the particular item or instruction of the applicable schedule. When
any other date is used, such date shall be set forth with a brief
statement as to the necessity for its use.
(c) If any item of information cannot be furnished, or there is
reason to doubt the accuracy of all of the information available with
respect thereto, the answer to the item may be omitted, but the reason
for the omission must be given. In no case, however, may there be
omitted information which is a matter of public record in the county,
state, or other political subdivision in which the tract is located.
(d) The offering sheet which is given to the person to whom the
offering is made may be printed, mimeographed, lithographed, or
typewritten, or prepared by any similar process which will result in
clearly legible copies. If it is printed, it shall be set in roman type
at least as large as 10-point modern type, leaded at least 2 points, or
if typewritten the type shall be no smaller than elite.
(e) At least one copy of the offering sheet filed with the Commission
shall be manually signed by the offeror, or if there is more than one
offeror by each of them. If the offering sheet is typewritten, the
original ribbon copy shall be signed. Unsigned copies shall be
conformed.
17 CFR 230.330 Representations in offering sheets.
(a) All statements or information contained in any offering sheet or
in any exhibit attached thereto or incorporated therein shall constitute
continuing representations by the person filing such offering sheet to
any person who may, in reliance upon a copy of such offering sheet,
purchase any interest described therein, that the statements contained
therein are substantially correct and that no material fact has been
omitted, the inclusion of which would reasonably appear necessary, in
the light of the circumstances, to make the information contained
therein not misleading to the purchaser.
(b) All statements or information contained in any offering sheet
shall constitute continuing representations by any offeror who shall
deliver, or cause such offering sheet to be delivered, to any person who
may, in reliance upon a copy of such offering sheet, purchase any
interest described therein from, or through, such offeror, that such
offering sheet is a true copy of an offering sheet filed with the
Securities and Exchange Commission in compliance with the rules and
regulations of the Commission on behalf of such offeror, that such
offeror has reasonable grounds to believe, and does believe, that the
statements contained therein are substantially correct, and, that no
material fact known to the offeror has been omitted, the inclusion of
which would reasonably appear necessary, in the light of the
circumstances, to make the information contained therein not misleading
to the purchaser.
(c) If an estimation of recoverable oil or gas, or a geological
report made by someone other than the person filing the offering sheet,
is included in the offering sheet, the contents thereof shall not be
regarded as a representation by the person filing the offering sheet;
Provided, The person filing the offering sheet has reason to believe,
and does believe, that the author of such estimation or report possesses
the qualifications and integrity necessary to make such estimation or
report, and provided the person filing the offering sheet does not know
or believe the estimation or report to be untrue or misleading in any
respect.
17 CFR 230.332 The use of the offering sheet.
Each offering sheet used, distributed, or delivered by the person
making the filing with the Commission or by any other person shall be an
exact copy of the offering sheet filed with the Commission (as amended,
if amended).
17 CFR 230.334 Reasons for suspension.
(a) The Commission may, at any time after the filing of an offering
sheet, enter an order temporarily suspending the exemption if it has
reason to believe that:
(1) No exemption is available under Regulation B ( 230.300 --
230.346) for the securities purported to be offered hereunder, or any of
the terms or conditions of this Regulation B have not been complied
with, including failure to file any reports;
(2) The offering sheet, or any literature or report permitted or
required by Regulation B, or used, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements made, in the light of the circumstances under which
they are made, not misleading:
(3) The offering has been, or is being, made in violation of the
antifraud provisions of section 17 of the Act and section 10 of the
Securities Exchange Act of 1934, as amended;
(4) The issuer, offeror, underwriter, or any promoter, officer or
director thereof has failed to cooperate or has obstructed, or refused
to permit the making of an investigation by the Commission in connection
with any offering made or proposed to be made hereunder.
17 CFR 230.336 The suspension procedure.
(a) Upon the entry of an order under paragraph (a) of 230.334, the
Commission will promptly give notice to the persons on whose behalf the
notification was filed (1) that such order has been entered, together
with a brief statement of the reasons for the entry of the order, and
(2) that the Commission, upon receipt of a written request at any time
within 30 days after the entry of such order, will set the matter down
for hearing within 30 days after the receipt of such request at a place
to be designated and on a date to be set by the Commission. (Where a
hearing is requested or is ordered by the Commission, the Commission
will, after notice of and opportunity for such hearing, either vacate
the order or enter an order permanently suspending the exemption.)
(b) The Commission may at any time after notice of and opportunity
for hearing, enter an order permanently suspending the exemption for any
reason upon which it could have entered a temporary suspension order
under paragraph (a) of this section. Any such order shall remain in
effect until vacated by the Commission. If no hearing is requested and
none is ordered by the Commission, the order shall become permanent on
the 30th day after its entry and shall remain in effect unless or until
it is modified or vacated by the Commission.
(c) If any time before the Commission enters an order setting the
matter down for hearing, it finds that an offering sheet has been
amended to cure the objectives specified in any temporary suspension
order entered pursuant to 230.334, the Commission may, in its sole
discretion, upon written request or upon its own motion where necessary
or appropriate in the public interest or for the protection of investors
terminate the proceedings which have been instituted by any such
temporary suspension order and give notice of such action to the person
who filed the offering sheet.
(d) All notices required by this section shall be given by personal
service, registered or certified mail, or confirmed telegraphic notice
to the person or persons on whose behalf the offering sheet was filed at
the addresses of such persons given in the offering sheet.
17 CFR 230.338 Effect of suspension order.
(a) An offering sheet complying with the requirements of Regulation B
( 230.300 -- 230.346) shall become effective on the 11th day after the
date upon which it is received by the Commission for filing except that
(1) if the Commission shall enter a temporary suspension order, the
offering sheet shall not become effective, or if effective shall no
longer be effective until the temporary suspension order expires or is
vacated; (2) if the Commission shall enter a permanent suspension
order, the offering shall not become or shall no longer be effective.
17 CFR 230.340 When offering sheet may be amended.
(a) Any person who has filed an offering sheet may, subject to the
provisions of 230.342, file amendments thereto, but only under the
following conditions and in the following instances:
(1) In the event none of the securities referred to in said offering
sheet have been sold and the person filing the offering sheet shall so
represent to the Commission in writing.
(2) In the event a temporary suspension order is in effect and a
hearing with respect thereto has not been ordered.
17 CFR 230.342 How offering sheet may be amended.
(a) Any amendment to an offering sheet shall be filed in accordance
with this section and shall become and be effective only as hereinafter
provided:
(1) An amendment shall be made either by filing or substituting a
wholly corrected offering sheet, or by filing or substituting entire
exhibits or pages, as amended.
(2) Four copies of the amendment shall be filed with the Commission,
and each copy shall bear the signature of the person who filed the
offering sheet as well as every other person whose estimations or
statements are modified or affected by such amendment. Where the
amendment is made by filing or substituting exhibits or pages, each such
exhibit or page shall be signed by the persons whose signatures are
required by this subparagraph.
(3) Any amendment complying with the requirements of Regulation B (
230.300 -- 230.346) shall become effective at such time as the
Commission may order.
(4) One copy of any amendment filed shall be notated in red to
indicate any changes from the previous filing.
17 CFR 230.344 Withdrawal.
An offering sheet or any amendment or exhibit thereto may be
withdrawn upon application if none of the interests described therein
have been sold, if all persons on whose behalf the offering sheet was
filed and who have received copies thereof have been notified in writing
of the intention to withdraw it and the Commission, finding such
withdrawal consistent with the public interest and protection of
investors consents thereto. Application for the order shall be signed
by the person who filed the offering sheet and shall establish the
foregoing conditions necessary to the withdrawal.
17 CFR 230.346 Termination.
The Commission will enter an order terminating the exemption if all
persons on whose behalf the offering sheet was filed and who have
received copies thereof have been notified in writing of the intention
to terminate it, and if the Commission shall find it otherwise
appropriate in the public interest to do so. Application for the order
shall be in the form of an affidavit by the person who filed the
offering sheet and shall establish the foregoing conditions necessary to
the termination.
17 CFR 230.346 Regulation C -- Registration
Authority: Sections 230.400 to 230.499 issued under secs. 6, 8, 10,
19, 48 Stat. 78 79, 81, and 85, as amended (15 U.S.C. 77f, 77h, 77j,
77s);
Sec. 230.457 also issued under secs. 6 and 7, 15 U.S.C. 77f and 77g.
Sec. 230.499 also issued under secs. 6, 7, 10, 19(a), 48 Stat. 78,
79, 81, 85; secs. 205, 209, 48 Stat. 906, 908; sec. 301, 54 Stat.
857; sec. 8, 68 Stat. 685; sec. 308(a)(2), 48 Stat. 882, 892, 894,
895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704, 1375, 1377, 1379; sec.
202, 68 Stat. 686; secs. 3, 4, 5, 6(d), 78 Stat. 569, 570-574; secs.
1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3, 4, 5, 84 Stat.
1435, 1497; sec. 105(b) 88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat.
117, 118, 119; sec. 308(b), 90 Stat. 57; sec. 18, 89 Stat. 155;
secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49 Stat.
833; sec. 319, 54 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C. 77f,
77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 79t(a),
77sss(a), 80a-37;
Note: In 230.400 to 230.499, the numbers to the right of the
decimal point correspond with the respective rule number in Regulation
C, under the Securities Act of 1933.
17 CFR 230.400 Application of 230.400 to 230.494, inclusive.
Sections 230.400 to 230.494 shall govern every registration of
securities under the Act, except that any provision in a form, or an
item of Regulation S-K (17 CFR 229.001 et seq.) referred to in such
form, covering the same subject matter as any such rule shall be
controlling unless otherwise specifically provided in 230.400 to
230.494.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11434, Mar. 16, 1982)
17 CFR 230.400 general requirements
17 CFR 230.401 Requirements as to proper form.
(a) The form and contents of a registration statement and prospectus
shall conform to the applicable rules and forms as in effect on the
initial filing date of such registration statement and prospectus.
(b) If an amendment to a registration statement and prospectus is
filed for the purpose of meeting the requirements of section 10(a)(3) of
the Act or pursuant to the provisions of section 24(e) or 24(f) of the
Investment Company Act of 1940, the form and contents of such an
amendment shall conform to the applicable rules and forms as in effect
on the filing date of such amendment.
(c) The form and contents of an amendment to a registration statement
and prospectus other than an amendment described in paragraph (b) of
this section shall conform to the applicable rules and forms as in
effect on the filing date of the latest amendment described in paragraph
(b) of this section or, if no such amendment has been filed, on the
initial filing date of the registration statement and prospectus.
(d) The form and contents of a prospectus forming part of a
registration statement which is the subject of a stop order entered
under section 8(d) of the Act, if used after the date such stop order
ceases to be effective, shall conform to the applicable rules and forms
as in effect on the date such stop order ceases to be effective.
(e) A prospectus filed as part of an amendment to an effective
registration statement, or other amendment to such registration
statement, on any form may be prepared in accordance with the
requirements of any other form which would then be appropriate for the
registration of securities to which the prospectus or other amendment
relates, provided that all of the other requirements of such other form
and applicable rules (including any required undertakings) are met.
(f) Notwithstanding the provisions of this section, a registrant (1)
shall comply with the rules and forms as in effect at a date different
from those specified in paragraphs (a), (b), (c) and (d) of this section
if the rules or forms or amendments thereto specifically so provide;
and (2) may comply voluntarily with the rules and forms as in effect at
dates subsequent to those specified in paragraphs (a), (b), (c) and (d)
of this section, provided that all of the requirements of the particular
rules and forms in effect at such dates (including any required
undertakings) are met.
(g) A registration statement or any amendment thereto shall be deemed
to be filed on the proper form unless objection to the form is made by
the Commission prior to the effective date.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11434, Mar. 16, 1982)
17 CFR 230.402 Number of copies; binding; signatures.
(a) Three copies of the complete registration statement, including
exhibits and all other papers and documents filed as a part of the
statement, shall be filed with the Commission. Each copy shall be
bound, in one or more parts, without stiff covers. The binding shall be
made on the side or stitching margin in such manner as to leave the
reading matter legible. At least one such copy of every registration
shall be manually signed by the persons specified in section 6(a) of the
Act. Unsigned copies shall be conformed.
(b) Ten additional copies of the registration statement, similarly
bound, shall be furnished for use in the examination of the registration
statement, public inspection, copying and other purposes. Where a
registration statement incorporates into the prospectus documents which
are required to be delivered with the prospectus in lieu of prospectus
presentation, the ten additional copies of the registration statement
shall be accompanied by ten copies of such documents. No other exhibits
are required to accompany such additional copies.
(c) Notwithstanding any other provision of this section, if a
registration statement is filed on Form S-8 ( 239.16b of this chapter),
three copies of the complete registration statement, including exhibits
and all other papers and documents filed as a part of the statement,
shall be filed with the Commission. Each copy shall be bound, in one or
more parts, without stiff covers. The binding shall be made on the side
or stitching margin in such manner as to leave the reading matter
legible. At least one such copy shall be manually signed by the persons
specified in section 6(a) of the Act. Unsigned copies shall be
conformed. Three additional copies of the registration statement,
similarly bound, also shall be furnished to the Commission for use in
the examination of the registration statement, public inspection,
copying and other purposes. No exhibits are required to accompany the
additional copies of registration statements filed on Form S-8.
(47 FR 11434, Mar. 16, 1982, as amended at 55 FR 23922, June 13,
1990)
17 CFR 230.403 Requirements as to paper, printing, language and
pagination.
(a) Registration statements, applications and reports shall be filed
on good quality, unglazed, white paper no larger than 8 1/2 x 11 inches
in size, insofar as practicable. To the extent that the reduction of
larger documents would render them illegible, such documents may be
filed on paper larger than 8 1/2 x 11 inches in size.
(b) The registration statement and, insofar as practicable, all
papers and documents filed as a part thereof shall be printed,
lithographed, mimeographed or typewritten. However, the statement or
any portion thereof may be prepared by any similar process which, in the
opinion of the Commission, produces copies suitable for a permanent
record. Irrespective of the process used, all copies of any such
material shall be clear, easily readable and suitable for repeated
photocopying. Debits in credit categories and credits in debit
categories shall be designated so as to be clearly distinguishable as
such on photocopies.
(c) The registration statement proper shall be in the English
language. If any exhibit or other paper or document filed as part of
the registration statement is in a foreign language, it shall be
accompanied by a summary, version or translation in the English
language.
(d) The manually signed original (or in the case of duplicate
originals, one duplicate original) of all registrations, applications,
statements, reports or other documents filed under the Act shall be
numbered sequentially (in addition to any internal numbering which
otherwise may be present) by handwritten, typed, printed or other
legible form of notation from the first page of the document through the
last page of that document and any exhibits or attachments thereto.
Further, the total number of pages contained in a numbered original
shall be set forth on the first page of the document.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11434, Mar. 16, 1982, as amended at 47 FR 58238, Dec. 30,
1982)
17 CFR 230.404 Preparation of registration statement.
(a) A registration statement shall consist of the facing sheet of the
applicable form; cross reference sheet; a prospectus containing the
information called for by Part I of such form; the information, list of
exhibits, undertakings and signatures required to be set forth in Part
II of such form; financial statements and schedules; exhibits; any
other information or documents filed as part of the registration
statement; and all documents or information incorporated by reference
in the foregoing (whether or not required to be filed).
(b) All general instructions, instructions to items of the form, and
instructions as to financial statements, exhibits, or prospectuses are
to be omitted from the registration statement in all cases.
(c) The prospectus shall contain the information called for by all of
the items of Part I of the applicable form, except that unless otherwise
specified, no reference need be made to inapplicable items, and negative
answers to any item in Part I may be omitted. A copy of the prospectus
may be filed as a part of the registration statement in lieu of
furnishing the information in item-and-answer form. Wherever a copy of
the prospectus is filed in lieu of information in item-and-answer form,
the text of the items of the form is to be omitted from the registration
statement, as well as from the prospectus, except to the extent provided
in paragraph (d) of this rule.
(d) Where any items of a form call for information not required to be
included in the prospectus, generally Part II of such form, the text of
such items, including the numbers and captions thereof, together with
the answers thereto shall be filed with the prospectus under cover of
the facing sheet of the form as a part of the registration statement.
However, the text of such items may be omitted provided the answers are
so prepared as to indicate the coverage of the item without the
necessity of reference to the text of the item. If any such item is
inapplicable, or the answer thereto is in the negative, a statement to
that effect shall be made. Any financial statements not required to be
included in the prospectus shall also be filed as a part of the
registration statement proper, unless incorporated by reference pursuant
to Rule 411 ( 230.411).
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11435, Mar. 16, 1982)
17 CFR 230.405 Definitions of terms.
Unless the context otherwise requires, all terms used in 230.400 to
230.494, inclusive, or in the forms for registration have the same
meanings as in the Act and in the general rules and regulations. In
addition, the following definitions apply, unless the context otherwise
requires:
Affiliate. An affiliate of, or person affiliated with, a specified
person, is a person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control
with, the person specified.
Amount. The term amount, when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the number of
shares if relating to shares, and the number of units if relating to any
other kind of security.
Associate. The term associate, when used to indicate a relationship
with any person, means (1) a corporation or organization (other than the
registrant or a majority-owned subsidiary of the registrant) of which
such person is an officer or partner or is, directly or indirectly, the
beneficial owner of 10 percent or more of any class of equity
securities, (2) any trust or other estate in which such person has a
substantial benefical interest or as to which such person serves as
trustee or in a similar capacity, and (3) any relative or spouse of such
person, or any relative of such spouse, who has the same home as such
person or who is a director or officer of the registrant or any of its
parents or subsidiaries.
Business development company. The term business development company
refers to a company which has elected to be regulated as a business
development company under sections 55 through 65 of the Investment
Company Act of 1940.
Certified. The term certified, when used in regard to financial
statements, means examined and reported upon with an opinion expressed
by an independent public or certified public accountant.
Charter. The term charter includes articles of incorporation,
declarations of trust, articles of association or partnership, or any
similar instrument, as amended, affecting (either with or without filing
with any governmental agency) the organization or creation of an
incorporated or unincorporated person.
Common equity. The term common equity means any class of common
stock or an equivalent interest, including but not limited to a unit of
beneficial interest in a trust or a limited partnership interest.
Commission. The term Commission means the Securities and Exchange
Commission.
Control. The term control (including the terms controlling,
controlled by and under common control with) means the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting securities, by contract, or otherwise.
Depositary share. The term depositary share means a security,
evidenced by an American Depositary Receipt, that represents a foreign
security or a multiple of or fraction thereof deposited with a
depositary.
Director. The term director means any director of a corporation or
any person performing similar functions with respect to any organization
whether incorporated or unincorporated.
Dividend or interest reinvestment plan. The term dividend or
interest reinvestment plan means a plan which is offered solely to the
existing security holders of the registrant, which allows such persons
to reinvest dividends or interest paid to them on securities issued by
the registrant, and also may allow additional cash amounts to be
contributed by the participants in the plan, provided the securities to
be registered are newly issued, or are purchased for the account of plan
participants, at prices not in excess of current market prices at the
time of purchase, or at prices not in excess of an amount determined in
accordance with a pricing formula specified in the plan and based upon
average or current market prices at the time of purchase.
Employee. The term employee does not include a director, trustee, or
officer.
Employee benefit plan. The term employee benefit plan means any
written purchase, savings, option, bonus, appreciation, profit sharing,
thrift, incentive, pension or similar plan or written compensation
contract solely for employees, directors, general partners, trustees
(where the registrant is a business trust), officers, or consultants or
advisors, provided that bona fide services shall be rendered by
consultants or advisors and such services must not be in connection with
the offer or sale of securities in a capital-raising transaction.
Equity security. The term equity security means any stock or similar
security, certificate of interest or participation in any profit sharing
agreement, preorganization certificate or subscription, transferable
share, voting trust certificate or certificate of deposit for an equity
security, limited partnership interest, interest in a joint venture, or
certificate of interest in a business trust; or any security
convertible, with or without consideration into such a security, or
carrying any warrant or right to subscribe to or purchase such a
security; or any such warrant or right; or any put, call, straddle, or
other option or privilege of buying such a security from or selling such
a security to another without being bound to do so.
Executive officer. The term executive officer, when used with
reference to a registrant, means its president, any vice president of
the registrant in charge of a principal business unit, division or
function (such as sales, administration or finance), any other officer
who performs a policy making function or any other person who performs
similar policy making functions for the registrant. Executive officers
of subsidiaries may be deemed executive officers of the registrant if
they perform such policy making functions for the registrant.
Fiscal year. The term fiscal year means the annual accounting period
or, if no closing date has been adopted, the calendar year ending on
December 31.
Foreign government. The term foreign government means the government
of any foreign country or of any political subdivision of a foreign
country.
Foreign issuer. The term foreign issuer means any issuer which is a
foreign government, a national of any foreign country or a corporation
or other organization incorporated or organized under the laws of any
foreign country.
Foreign private issuer. The term foreign private issuer means any
foreign issuer other than a foreign government except an issuer meeting
the following conditions: (1) More than 50 percent of the outstanding
voting securities of such issuer are held of record either directly or
through voting trust certificates or depositary receipts by residents of
the United States; and (2) any of the following: (i) The majority of
the executive officers or directors are United States citizens or
residents, (ii) more than 50 percent of the assets of the issuer are
located in the United States, or (iii) the business of the issuer is
administered principally in the United States. For the purpose of this
paragraph, the term resident, as applied to security holders, shall mean
any person whose address appears on the records of the issuer, the
voting trustee, or the depositary as being located in the United States.
Majority-owned subsidiary. The term majority-owned subsidiary means
a subsidiary more than 50 percent of whose outstanding securities
representing the right, other than as affected by events of default, to
vote for the election of directors, is owned by the subsidiary's parent
and/or one or more of the parent's other majority-owned subsidiaries.
Material. The term material, when used to qualify a requirement for
the furnishing of information as to any subject, limits the information
required to those matters to which there is a substantial likelihood
that a reasonable investor would attach importance in determining
whether to purchase the security registered.
Officer. The term officer means a president, vice president,
secretary, treasurer or principal financial officer, comptroller or
principal accounting officer, and any person routinely performing
corresponding functions with respect to any organization whether
incorporated or unincorporated.
Parent. A parent of a specified person is an affiliate controlling
such person directly, or indirectly through one or more intermediaries.
Predecessor. The term predecessor means a person the major portion of
the business and assets of which another person acquired in a single
succession, or in a series of related successions in each of which the
acquiring person acquired the major portion of the business and assets
of the acquired person.
Principal underwriter. The term principal underwriter means an
underwriter in privity of contract with the issuer of the securities as
to which he is underwriter, the term issuer having the meaning given in
sections 2(4) and 2(11) of the Act.
Promoter. (1) The term promoter includes:
(i) Any person who, acting alone or in conjunction with one or more
other persons, directly or indirectly takes initiative in founding and
organizing the business or enterprise of an issuer; or
(ii) Any person who, in connection with the founding and organizing
of the business or enterprise of an issuer, directly or indirectly
receives in consideration of services or property, or both services and
property, 10 percent or more of any class of securities of the issuer or
10 percent or more of the proceeds from the sale of any class of such
securities. However, a person who receives such securities or proceeds
either solely as underwriting commissions or solely in consideration of
property shall not be deemed a promoter within the meaning of this
paragraph if such person does not otherwise take part in founding and
organizing the enterprise.
(2) All persons coming within the definition of promoter in paragraph
(1) of this definition may be referred to as founders or organizers or
by another term provided that such term is reasonably descriptive of
those persons' activities with respect to the issuer.
Prospectus. Unless otherwise specified or the context otherwise
requires, the term prospectus means a prospectus meeting the
requirements of section 10(a) of the Act.
Registrant. The term registrant means the issuer of the securities
for which the registration statement is filed.
Share. The term share means a share of stock in a corporation or unit
of interest in an unincorporated person.
Significant subsidiary. The term significant subsidiary means a
subsidiary, including its subsidiaries, which meets any of the following
conditions:
(1) The registrant's and its other subsidiaries' investments in and
advances to the subsidiary exceed 10 percent of the total assets of the
registrant and its subsidiaries consolidated as of the end of the most
recently completed fiscal year (for a proposed business combination to
be accounted for as a pooling of interests, this condition is also met
when the number of common shares exchanged or to be exchanged by the
registrant exceeds 10 percent of its total common shares outstanding at
the date the combination is initiated); or
(2) The registrant's and its other subsidiaries' proportionate share
of the total assets (after intercompany eliminations) of the subsidiary
exceeds 10 percent of the total assets of the registrants and its
subsidiaries consolidated as of the end of the most recently completed
fiscal year; or
(3) The registrant's and its other subsidiaries' equity in the income
from continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principle of the subsidiary
exceeds 10 percent of such income of the registrant and its subsidiaries
consolidated for the most recently completed fiscal year.
Computational note. For purposes of making the prescribed income
test the following guidance should be applied:
1. When a loss has been incurred by either the parent and its
subsidiaries consolidated or the tested subsidiary, but not both, the
equity in the income or loss of the tested subsidiary should be excluded
from the income of the registrant and its subsidiaries consolidated for
purposes of the computation.
2. If income of the registrant and its subsidiaries consolidated for
the most recent fiscal year is at least 10 percent lower than the
average of the income for the last five fiscal years, such average
income should be substituted for purposes of the computation. Any loss
years should be omitted for purposes of computing average income.
Subsidiary. A subsidiary of a specified person is an affiliate
controlled by such person directly, or indirectly through one or more
intermediaries. (See also majority owned subsidiary, significant
subsidiary, totally held subsidiary, and wholly owned subsidiary.)
Succession. The term succession means the direct acquisition of the
assets comprising a going business, whether by merger, consolidation,
purchase, or other direct transfer. The term does not include the
acquisition of control of a business unless followed by the direct
acquisition of its assets. The terms succeed and successor have
meanings correlative to the foregoing.
Totally held subsidiary. The term totally held subsidiary means a
subsidiary (1) substantially all of whose outstanding securities are
owned by its parent and/or the parent's other totally held subsidiaries,
and (2) which is not indebted to any person other than its parent and/or
the parent's other totally held subsidiaries in an amount which is
material in relation to the particular subsidiary, excepting
indebtedness incurred in the ordinary course of business which is not
overdue and which matures within one year from the date of its creation,
whether evidenced by securities or not.
Voting securities. The term voting securities means securities the
holders of which are presently entitled to vote for the election of
directors.
Wholly owned subsidiary. The term wholly owned subsidiary means a
subsidiary substantially all of whose outstanding voting securities are
owned by its parent and/or the parent's other wholly owned subsidiaries.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37; secs. 7 and 19a of the Securities Act, 15
U.S.C. 77g, 77s(a), 77aa(25)(26); secs. 12, 13, 14, 15(d), and 23(a) of
the Securities Exchange Act of 1934, 15 U.S.C. 78l, 78m, 78n, 78o(d),
78w(a), secs. 5(b), 10(a), 14, 20(a) of the Public Utility Holding
Company Act, 15 U.S.C. 79e(a), 79n, 79t(a); secs. 8, 20, 30, 31(c),
38(a) of the Investment Company Act of 1940, 15 U.S.C. 80a-8, 80a-20,
80a-29, 80a-30(c), 80a-37(a); secs. 6, 7, 8, 10, 19(a), 48 Stat. 78,
79, 81, 85; secs. 205, 209, 48 Stat. 906, 908; sec. 301, 54 Stat. 857;
sec. 8, 68 Stat. 685; sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90
Stat. 57; secs. 12, 13, 15(d), 23(a), 48 Stat. 892, 894, 895, 901;
secs. 1, 3, 8, 49 Stat. 1375, 1377, 1379; sec. 203(a), 49 Stat. 704;
sec. 202, 68 Stat. 686; secs. 3, 4, 6, 78 Stat. 565-568, 569, 570-574;
secs. 1, 2, 82 Stat. 454; sec. 28(c), 84 Stat. 1435; secs. 1, 2, 84
Stat. 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat.
117, 118, 119, 155; sec. 308(b), 90 Stat. 57; secs. 202, 203, 204, 91
Stat. 1494, 1498, 1499, 1500; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a),
78l, 78m, 78o(d), 78w(a))
(47 FR 11435, Mar. 16, 1982, as amended at 47 FR 29840, July 9, 1982;
47 FR 39803, Sept. 10, 1982; 47 FR 54770, Dec. 6, 1982; 48 FR 12347,
Mar. 24, 1983; 48 FR 46738, Oct. 14, 1983; 50 FR 25216, June 18, 1985;
55 FR 23923, June 13, 1990)
17 CFR 230.406 Confidential treatment of information filed with the
Commission.
Preliminary Note: Confidential treatment of supplemental information
or other information not required to be filed under the Act should be
requested under 17 CFR 200.83 and not under this rule.
(a) Any person submitting any information in a document required to
be filed under the Act may make written objection to its public
disclosure by following the procedure in paragraph (b) of this section,
which shall be the exclusive means of requesting confidential treatment
of information included in any document (hereinafter referred to as the
material filed) required to be filed under the Act, except that if the
material filed is a registration statement on Form S-8 ( 239.16b of this
chapter) or on Form S-3, F-2, F-3 ( 239.13, 239.32 or 239.33 of this
chapter) relating to a dividend or interest reinvestment plan, or on
Form S-4 ( 239.25 of this chapter) complying with General Instruction G
of that Form or on Form F-4 ( 239.34 of this chapter) complying with
General Instruction F of that Form, or if the material filed is a
registration statement that does not contain a delaying amendment
pursuant to Rule 473 ( 230.473 of this chapter), the person shall comply
with the procedure in paragraph (b) prior to the filing of a
registration statement.
(b) The person shall omit from the material filed the portion thereof
which it desires to keep undisclosed (hereinafter called the
confidential portion). In lieu thereof, the person shall indicate at
the appropriate place in the material filed that the confidential
portion has been so omitted and filed separately with the Commission.
The person shall file with the material filed:
(1) As many copies of the confidential portion, each clearly marked
''Confidential Treatment,'' as there are copies of the material filed
with the Commission. Each copy shall contain an appropriate
identification of the item or other requirement involved and,
notwithstanding that the confidential portion does not constitute the
whole of the answer or required disclosure, the entire answer or
required disclosure, except that in the case where the confidential
portion is part of a financial statement or schedule only the particular
financial statement or schedule need be included. All copies of the
confidential portion shall be in the same form as the remainder of the
material filed;
(2) An application making objection to the disclosure of the
confidential portion. Such application shall be on a sheet or sheets
separate from the confidential portion, and shall contain:
(i) An identification of the portion;
(ii) A statement of the grounds of the objection referring to and
analyzing the applicable exemption(s) from disclosure under 200.80 of
this chapter, the Commission's rule adopted under the Freedom of
Information Act (5 U.S.C. 552), and a justification of the period of
time for which confidential treatment is sought;
(iii) A detailed explanation of why, based on the facts and
circumstances of the particular case, disclosure of the information is
unnecessary for the protection of investors;
(iv) A written consent to the furnishing of the confidential portion
to other government agencies, offices, or bodies and to the Congress;
and
(v) The name, address and telephone number of the person to whom all
notices and orders issued under this rule at any time should be
directed.
(3) The copies of the confidential portion and the application filed
in accordance with this paragraph (b) shall be enclosed in a separate
envelope marked ''Confidential Treatment'' and addressed to the
Secretary, Securities and Exchange Commission, Washington, DC 20549.
(c) Pending a determination as to the objection, the material for
which confidential treatment has been applied will not be made available
to the public.
(d) If it is determined by the Division, acting pursuant to delegated
authority, that the application should be granted, an order to that
effect will be entered, and a notation to that effect will be made at
the appropriate place in the material filed. Such a determination will
not preclude reconsideration whenever appropriate, such as upon receipt
of any subsequent request under the Freedom of Information Act and, if
appropriate, revocation of the confidential status of all or a portion
of the information in question.
(e) If the Commission denies the application, or the Division, acting
pursuant to delegated authority, denies the application and Commission
review is not sought pursuant to 201.26 of this chapter, confirmed
telegraphic notice of the order of denial will be sent to the person
named in the application pursuant to paragraph (b)(2)(v) of this
section. In such case, if the material filed may be withdrawn pursuant
to an applicable statute, rule, or regulation, the registrant shall have
the right to withdraw the material filed in accordance with the terms of
the applicable statute, rule, or regulation, but without the necessity
of stating any grounds for the withdrawal or of obtaining the further
assent of the Commission. In the event of such withdrawal, the
confidential portion will be returned to the registrant. If the
material filed may not be so withdrawn, the confidential portion will be
made available for public inspection in the same manner as if
confidential treatment had been revoked under paragraph (h) of this
section.
(f) If a right of withdrawal pursuant to paragraph (e) of this
section is not exercised, the confidential portion will be made
available for public inspection as part of the material filed, and the
registrant shall amend the material filed to include all information
required to be set forth in regard to such confidential portion.
(g) In any case where a prior grant of confidential treatment has
been revoked, the person named in the application pursuant to paragraph
(b)(2)(v) of this section will be so informed by registered or certified
mail. Pursuant to 201.26 of this chapter, persons making objection to
disclosure may petition the Commission for review of a determination by
the Division revoking confidential treatment.
(h) Upon revocation of confidential treatment, the confidential
portion shall be made available to the public at the time and according
to the conditions specified in paragraphs (h) (1)-(2):
(1) Upon the lapse of five days after the dispatch of notice by
registered or certified mail of a determination disallowing an
objection, if prior to the lapse of such five days the person shall not
have communicated to the Secretary of the Commission his intention to
seek review by the Commission under 201.26 of this chapter of the
determination made by the Division; or
(2) If such a petition for review shall have been filed under 201.26
of this chapter, upon final disposition adverse to the petitioner.
(i) If the confidential portion is made available to the public, one
copy thereof shall be attached to each copy of the material filed with
the Commission.
(Secs. 7, 10, 19(a), 48 Stat. 78, 81, 85; secs. 205, 209, 48 Stat.
906, 908; sec. 8, 68 Stat. 685; sec. 308(a)(2), 90 Stat. 57; 15
U.S.C. 77g, 77j, 77s(a))
(49 FR 13336, Apr. 4, 1984, as amended at 50 FR 19000, May 6, 1985)
17 CFR 230.408 Additional information.
In addition to the information expressly required to be included in a
registration statement, there shall be added such further material
information, if any, as may be necessary to make the required
statements, in the light of the circumstances under which they are made,
not misleading.
(Reg. C, 12 FR 4072, June 24, 1947)
17 CFR 230.409 Information unknown or not reasonably available.
Information required need be given only insofar as it is known or
reasonably available to the registrant. If any required information is
unknown and not reasonably available to the registrant, either because
the obtaining thereof could involve unreasonable effort or expense, or
because it rests peculiarly within the knowledge of another person not
affiliated with the registrant, the information may be omitted, subject
to the following conditions:
(a) The registrant shall give such information on the subject as it
possesses or can acquire without unreasonable effort or expense,
together with the sources thereof.
(b) The registrant shall include a statement either showing that
unreasonable effort or expense would be involved or indicating the
absence of any affiliation with the person within whose knowledge the
information rests and stating the result of a request made to such
person for the information.
(Reg. C, 12 FR 4072, June 24, 1947, as amended at 14 FR 91, Jan. 7,
1949)
17 CFR 230.410 Disclaimer of control.
If the existence of control is open to reasonable doubt in any
instance, the registrant may disclaim the existence of control and any
admission thereof; in such case, however, the registrant shall state
the material facts pertinent to the possible existence of control.
(Reg. C, 12 FR 4073, June 24, 1947)
17 CFR 230.411 Incorporation by reference.
(a) Prospectus. Except as provided by this section or unless
otherwise provided in the appropriate form, information shall not be
incorporated by reference in a prospectus. Where a summary or outline
of the provisions of any document is required in the prospectus, the
summary or outline may incorporate by reference particular items,
sections or paragraphs of any exhibit and may be qualified in its
entirety by such reference.
(b) Information not required in a prospectus. Except for exhibits
covered by paragraph (c) of this section, information may be
incorporated by reference in answer, or partial answer, to any item that
calls for information not required to be included in a prospectus
subject to the following provisions:
(1) Non-financial information may be incorporated by reference to any
document;
(2) Financial information may be incorporated by reference to any
document, provided any financial statement so incorporated meets the
requirements of the forms on which the statement is filed. Financial
statements or other financial data required to be given in comparative
form for two or more fiscal years or periods shall not be incorporated
by reference unless the information incorporated by reference includes
the entire period for which the comparative data is given;
(3) Information contained in any part of the registration statement,
including the prospectus, may be incorporated by reference in answer, or
partial answer, to any item that calls for information not required to
be included in the prospectus; and
(4) Unless the information is incorporated by reference to a document
which complies with the time limitations of Rule 24 of the Commission's
Rules of Practice ( 201.24 of this chapter), then the document, or part
thereof, containing the incorporated information is required to be filed
as an exhibit.
(c) Exhibits. Any document or part thereof filed with the Commission
pursuant to any Act administered by the Commission may, subject to the
limitations of Rule 24 of the Commission's Rules of Practice, be
incorporated by reference as an exhibit to any registration statement.
If any modification has occurred in the text of any document
incorporated by reference since the filing thereof, the registrant shall
file with the reference a statement containing the text of such
modification and the date thereof.
(d) General. Any incorporation by reference of information pursuant
to this section shall be subject to the provisions of Rule 24 of the
Commission's Rules of Practice restricting incorporation by reference of
documents which incorporate by reference other information. Information
incorporated by reference shall be clearly identified in the reference
by page, paragraph, caption or otherwise. If the information is
incorporated by reference to a previously filed document, the file
number of such document shall be included. Where only certain pages of
a document are incorporated by reference and filed with the statement,
the document from which the information is taken shall be clearly
identified in the reference. An express statement that the specified
matter is incorporated by reference shall be made at the particular
place in the registration statement where the information is required.
Information shall not be incorporated by reference in any case where
such incorporation would render the statement incomplete, unclear or
confusing.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11437, Mar. 16, 1982)
17 CFR 230.412 Modified or superseded documents.
(a) Any statement contained in a document incorporated or deemed to
be incorporated by reference shall be deemed to be modified or
superseded for purposes of the registration statement or the prospectus
to the extent that a statement contained in the prospectus or in any
other subsequently filed document which also is or is deemed to be
incorporated by reference modifies or replaces such statement.
(b) The modifying or superseding statement may, but need not, state
that it has modified or superseded a prior statement or include any
other information set forth in the document which is not so modified or
superseded. The making of a modifying or superseding statement shall
not be deemed an admission that the modified or superseded statement,
when made, constituted an untrue statement of a material fact, an
omission to state a material fact necessary to make a statement not
misleading, or the employment of a manipulative, deceptive, or
fraudulent device, contrivance, scheme, transaction, act, practice,
course of business or artifice to defraud, as those terms are used in
the Act, the Securities Exchange Act of 1934, the Public Utility Holding
Company Act of 1935, the Investment Company Act of 1940, or the rules
and regulations thereunder.
(c) Any statement so modified shall not be deemed in its unmodified
form to constitute part of the registration statement or prospectus for
purpose of the Act. Any statement so superseded shall not be deemed to
constitute a part of the registration statement or the prospectus for
purposes of the Act.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11438, Mar. 16, 1982)
17 CFR 230.413 Registration of additional securities.
Except as provided in sections 24(e)(1) and 24(f) of the Investment
Company Act of 1940, the registration of additional securities of the
same class as other securities for which a registration statement is
already in effect shall be effected through a separate registration
statement relating to the additional securities.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11438, Mar. 16, 1982)
17 CFR 230.414 Registration by certain successor issuers.
If any issuer, except a foreign issuer exempted by Rule 3a12-3 (17
CFR 240.3a12-3), incorporated under the laws of any State or foreign
government and having securities registered under the Act has been
succeeded by an issuer incorporated under the laws of another State or
foreign government for the purpose of changing the State or country of
incorporation of the enterprises, or if any issuer has been succeeded by
an issuer for the purpose of changing its form of organization, the
registration statement of the predecessor issuer shall be deemed the
registration statement of the successor issuer for the purpose of
continuing the offering provided:
(a) Immediately prior to the succession the successor issuer had no
assets or liabilities other than nominal assets or liabilities;
(b) The succession was effected by a merger or similar succession
pursuant to statutory provisions or the terms of the organic instruments
under which the successor issuer acquired all of the assets and assumed
all of the liabilities and obligations of the predecessor issuer;
(c) The succession was approved by security holders of the
predecessor issuer at a meeting for which proxies were solicited
pursuant to section 14(a) of the Securities Exchange Act of 1934 or
section 20(a) of the Investment Company Act of 1940 or information was
furnished to security holders pursuant to section 14(c) of the
Securities Exchange Act of 1934; and
(d) The successor issuer has filed an amendment to the registration
statement of the predecessor issuer expressly adopting such statements
as its own registration statement for all purposes of the Act and the
Securities Exchange Act of 1934 and setting forth any additional
information necessary to reflect any material changes made in connection
with or resulting from the succession, or necessary to keep the
registration statement from being misleading in any material respect,
and such amendment has become effective.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11438, Mar. 16, 1982)
17 CFR 230.415 Delayed or continuous offering and sale of securities.
(a) Securities may be registered for an offering to be made on a
continuous or delayed basis in the future, Provided, That:
(1) The registration statement pertains only to:
(i) Securities which are to be offered or sold solely by or on behalf
of a person or persons other than the registrant, a subsidiary of the
registrant or a person of which the registrant is a subsidiary;
(ii) Securities which are to be offered and sold pursuant to a
dividend or interest reinvestment plan or an employee benefit plan of
the registrant;
(iii) Securities which are to be issued upon the exercise of
outstanding options, warrants or rights;
(iv) Securities which are to be issued upon conversion of other
outstanding securities;
(v) Securities which are pledged as collateral;
(vi) Securities which are registered on Form F-6 ( 239.36 of this
chapter);
(vii) Mortgage related securities, including such securities as
mortgage backed debt and mortgage participation or pass through
certificates;
(viii) Securities which are to be issued in connection with business
combination transactions;
(ix) Securities the offering of which will be commenced promptly,
will be made on a continuous basis and may continue for a period in
excess of 30 days from the date of initial effectiveness; or
(x) Securities registered (or qualified to be registered) on Form S-3
or Form F-3 ( 239.13 or 239.33 of this chapter) which are to be offered
and sold on a continuous or delayed basis by or on behalf of the
registrant, a subsidiary of the registrant or a person of which the
registrant is a subsidiary.
(2) Securities in paragraphs (a)(1) (viii) through (x) may only be
registered in an amount which, at the time the registration statement
becomes effective, is reasonably expected to be offered and sold within
two years from the initial effective date of the registration.
(3) The registrant furnishes the undertakings required by Item 512(a)
of Regulation S-K ( 229.512 of this chapter).
(4) In the case of a registration statement pertaining to an at the
market offering of equity securities by or on behalf of the registrant:
(i) The offering comes within paragraph (a)(1)(x); (ii) where voting
stock is registered, the amount of securities registered for such
purposes must not exceed 10% of the aggregate market value of the
registrant's outstanding voting stock held by non-affiliates of the
registrant (calculated as of a date within 60 days prior to the date of
filing); (iii) the securities must be sold through an underwriter or
underwriters, acting as principal(s) or as agent(s) for the registrant;
and (iv) the underwriter or underwriters must be named in the prospectus
which is part of the registration statement. As used in this paragraph,
the term at the market offering means an offering of securities into an
existing trading market for outstanding shares of the same class at
other than a fixed price on or through the facilities of a national
securities exchange or to or through a market maker otherwise than on an
exchange.
(b) This section shall not apply to any registration statement
pertaining to securities issued by a face-amount certificate company or
redeemable securities issued by an open-end management company or unit
investment trust under the Investment Company Act of 1940 or any
registration statement filed by any foreign government or political
subdivision thereof.
(Secs. 6, 7, 10, 19(a), 48 Stat 78, 81, 85; secs. 205 209, 48 Stat.
906, 908; sec. 8. 68 Stat. 685; sec. 1, 79 Stat. 1051; sec.
308(a)(2), 90 Stat. 57; 15 U.S.C. 77f, 77g, 77j, 77s(a))
(48 FR 52896, Nov. 23, 1983)
17 CFR 230.416 Securities to be issued as a result of stock splits,
stock dividends and anti-dilution provisions and interests to be issued
pursuant to certain employee benefit plans.
(a) If a registration statement purports to register securities to be
offered pursuant to terms which provide for a change in the amount of
securities being offered or issued to prevent dilution resulting from
stock splits, stock dividends, or similar transactions, such
registration statement shall, unless otherwise expressly provided, be
deemed to cover the additional securities to be offered or issued in
connection with any such provision.
(b) If prior to completion of the distribution of the securities
covered by a registration statement, additional securities of the same
class are issued or issuable as a result of a stock split or stock
dividend, the registration statement shall, unless otherwise expressly
provided therein, be deemed to cover such additional securities
resulting from the split of, or the stock dividend on, the registered
securities. If prior to completion of the distribution of the
securities covered by a registration statement, all the securities of a
class which includes the registered securities are combined by a reverse
split into a lesser amount of securities of the same class, the amount
of undistributed securities of such class deemed to be covered by the
registration statement shall be proportionately reduced. If paragraph
(a) of this section is not applicable, the registration statement shall
be amended prior to the offering of such additional or lesser amount of
securities to reflect the change in the amount of securities registered.
(c) Where a registration statement on Form S-8 relates to securities
to be offered pursuant to an employee benefit plan, including interests
in such plan that constitute separate securities required to be
registered under the Act, such registration statement shall be deemed to
register an indeterminate amount of such plan interests.
(30 FR 13824, Oct. 30, 1965, as amended at 55 FR 23923, June 13,
1990)
17 CFR 230.417 Date of financial statements.
Whenever financial statements of any person are required to be
furnished as of a date within a specified period prior to the date of
filing the registration statement and the last day of such period falls
on a Saturday, Sunday, or holiday, such registration statement may be
filed on the first business day following the last day of the specified
period.
(22 FR 2328, Apr. 9, 1957)
17 CFR 230.418 Supplemental information.
(a) The Commission or its staff may, where it is deemed appropriate,
request supplemental information concerning the registrant, the
registration statement, the distribution of the securities, market
activities and underwriters' activities. Such information includes, but
is not limited to, the following items which the registrant should be
prepared to furnish promptly upon request:
(1)(i) Any reports or memoranda which have been prepared for external
use by the registrant or a principal underwriter, as defined in Rule 405
( 230.405), in connection with the proposed offering;
(ii) A statement as to the actual or proposed use and distribution of
the reports or memoranda specified in paragraph (a)(1)(i) of this
section, identifying each class of persons who have received or will
receive such reports or memoranda and the number of copies distributed
to each such class;
(2) In the case of a registration statement relating to a business
combination as defined in Rule 145(a) (17 CFR 230.145(a)), exchange
offer, tender offer or similar transaction, any feasibility studies,
management analyses, fairness opinions or similar reports prepared by or
for any of the parties to the subject transaction in connection with
such transaction;
(3) Except in the case of a registrant eligible to use Form S-2 or
Form S-3 ( 239.12 or 239.13 of this chapter), any engineering,
management or similar reports or memoranda relating to broad aspects of
the business, operations or products of the registrant, which have been
prepared within the past twelve months for or by the registrant, any
affiliate of the registrant or any principal underwriter, as defined in
Rule 405 ( 230.405), of the securities being registered except for:
(i) Reports solely comprised of recommendations to buy, sell or hold
the securities of the registrant, unless such recommendations have
changed within the past six months; and
(ii) Any information contained in documents already filed with the
Commission.
(4) Where there is a registration of an offering at the market, as
defined in Rule 10b-7 under the Securities Exchange Act of 1934 (17 CFR
240.10b-7), of more than 10 percent of the securities outstanding, where
the offering includes securities owned by officers, directors or
affiliates of the registrant and where there is no underwriting
agreement, information (i) concerning contractual arrangements between
selling security holders of a limited group or of several groups of
related shareholders to comply with the anti-manipulation rules until
the offering by all members of the group is completed and to inform the
exchange, brokers and selling security holders when the distribution by
the members of the group is over; or (ii) concerning the registrant's
efforts to notify members of a large group of unrelated sellers of the
applicable Commission rules and regulations;
(5) Where the registrant recently has introduced a new product or has
begun to do business in a new industry segment or has made public its
intentions to introduce a new product or to do business in a new
industry segment, and this action requires the investment of a material
amount of the assets of the registrant or otherwise is material, copies
of any studies prepared for the registrant by outside persons or any
internal studies, documents, reports or memoranda the contents of which
were material to the decision to develop the product or to do business
in the new segment including, but not limited to, documents relating to
financial requirements and engineering, competitive, environmental and
other considerations, but excluding technical documents;
(6) Where reserve estimates are referred to in a document, a copy of
the full report of the engineer or other expert who estimated the
reserves; and
(7) With respect to the extent of the distribution of a preliminary
prospectus, information concerning:
(i) The date of the preliminary prospectus distributed;
(ii) The dates or approximate dates of distribution;
(iii) The number of prospective underwriters and dealers to whom the
preliminary prospectus was furnished;
(iv) The number of prospectuses so distributed;
(v) The number of prospectuses distributed to others, identifying
them in general terms; and
(vi) The steps taken by such underwriters and dealers to comply with
the provisions of Rule 15c2-8 under the Securities Exchange Act of 1934
( 240.15c2-8 of this chapter).
(b) Supplemental information described in paragraph (a) of this
section shall not be required to be filed with or deemed part of the
registration statement. The information shall be returned to the
registrant upon request, provided that:
(1) Such request is made at the time such information is furnished to
the staff;
(2) The return of such information is consistent with the protection
of investors; and
(3) The return of such information is consistent with the provisions
of the Freedom of Information Act (5 U.S.C. 552).
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11439, Mar. 16, 1982)
17 CFR 230.418 form and content of prospectuses
17 CFR 230.420 Legibility of prospectus.
The body of all printed prospectuses and all notes to financial
statements and other tabular data included therein shall be in roman
type at least as large and as legible as 10-point modern type. However,
(a) to the extent necessary for convenient presentation, financial
statements and other tabular data, including tabular data in notes, and
(b) prospectuses deemed to be omitting prospectuses under rule 482 (17
CFR 230.482) may be in roman type at least as large and as legible as
8-point modern type. All such type shall be leaded at least 2 points.
(53 FR 3878, Feb. 10, 1988)
17 CFR 230.421 Presentation of information in prospectuses.
(a) The information required in a prospectus need not follow the
order of the items or other requirements in the form. Such information
shall not, however, be set forth in such fashion as to obscure any of
the required information or any information necessary to keep the
required information from being incomplete or misleading. Where an item
requires information to be given in a prospectus in tabular form it
shall be given in substantially the tabular form specified in the item.
(b) The information set forth in a prospectus should be presented in
a clear, concise and understandable fashion. All information contained
in a prospectus shall be set forth under appropriate captions or
headings reasonably indicative of the principal subject matter set forth
thereunder. Except as to financial statements and other tabular data,
all information set forth in a prospectus shall be divided into
reasonably short paragraphs or sections.
(c) All information required to be included in a prospectus shall be
clearly understandable without the necessity of referring to the
particular form or to the general rules and regulations. Except as to
financial statements and information required in a tabular form, the
information set forth in a prospectus may be expressed in condensed or
summarized form. In lieu of repeating information in the form of notes
to financial statements, references may be made to other parts of the
prospectus where such information is set forth.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11439, Mar. 16, 1982)
17 CFR 230.423 Date of prospectuses.
Except for a form of prospectus used after the effective date of the
registration statement and before the determination of the offering
price as permitted by Rule 430A(c) under the Securities Act (
230.430A(c) of this chapter) or before the opening of bids as permitted
by Rule 445(c) under the Securities Act ( 230.445(c) of this chapter),
each prospectus used after the effective date of the registration
statement shall be dated approximately as of such effective date;
provided, however, that a revised or amended prospectus used thereafter
need only bear the approximate date of its issuance. Each supplement to
a prospectus shall be dated separately the approximate date of its
issuance.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11440, Mar. 16, 1982, as amended at 52 FR 21260, June 5, 1987)
17 CFR 230.424 Filing of prospectuses, number of copies.
(a) Except as provided in paragraph (f) of this section, five copies
of every form of prospectus sent or given to any person prior to the
effective date of the registration statement which varies from the form
or forms of prospectus included in the registration statement as filed
pursuant to 230.402(a) of this chapter shall be filed as a part of the
registration statement not later than the date such form of prospectus
is first sent or given to any person: Provided, however, That only a
form of prospectus that contains substantive changes from or additions
to a prospectus previously filed with the Commission as part of a
registration statement need be filed pursuant to this paragraph (a).
(b) Ten copies of each form of prospectus purporting to comply with
section 10 of the Securities Act (15 U.S.C. 77j), except for documents
constituting a prospectus pursuant to Rule 428(a) ( 230.428(a) of this
chapter), shall be filed with the Commission in the form in which it is
used after the effectiveness of the registration statement and
identified as required by paragraph (e); Provided, however, That only a
form of prospectus that contains substantive changes from or additions
to a previously filed prospectus is required to be filed; Provided,
further, That this paragraph (b) shall not apply in respect of a form of
prospectus contained in a registration statement and relating solely to
securities offered at competitive bidding, which prospectus is intended
for use prior to the opening of bids. The ten copies shall be filed or
transmitted for filing as follows:
(1) A form of prospectus that discloses information previously
omitted from the prospectus filed as part of an effective registration
statement in reliance upon Rule 430A under the Securities Act ( 230.430A
of this chapter) shall be filed with the commission no later than the
second business day following the earlier of the date of determination
of the offering price or the date it is first used after effectiveness
in connection with a public offering or sales, or transmitted by a means
reasonably calculated to result in filing with the Commission by that
date.
(2) A form of prospectus used in connection with a primary offering
of securities on a delayed basis pursuant to Rule 415(a)(1)(vii), (viii)
or (x) under the Securities Act ( 230.415(a)(1)(vii), (viii) or (x) of
this chapter) that discloses the public offering price, description of
securities, specific method of distribution or similar matters shall be
filed with the Commission no later than the second business day
following the earlier of the date of the determination of the offering
price or the date it is first used after effectiveness in connection
with a public offering or sales, or transmitted by a means reasonably
calculated to result in filing with the Commission by that date.
(3) A form of prospectus that reflects facts or events other than
those covered in paragraphs (b) (1), (2) and (6) of this section that
constitute a substantive change from or addition to the information set
forth in the last form of prospectus filed with the Commission under
this section or as part of a registration statement under the Securities
Act shall be filed with the Commission no later than the fifth business
day after the date it is first used after effectiveness in connection
with a public offering or sales, or transmitted by a means reasonably
calculated to result in filing with the Commission by that date.
(4) A form of prospectus that discloses information, facts or events
covered in both paragraphs (b) (1) and (3) shall be filed with the
Commission no later than the second business day following the earlier
of the date of the determination of the offering price or the date it is
first used after effectiveness in connection with a public offering or
sales, or transmitted by a means reasonably calculated to result in
filing with the Commission by that date.
(5) A form of prospectus that discloses information, facts or events
covered in both paragraphs (b) (2) and (3) shall be filed with the
Commission no later than the second business day following the earlier
of the date of the determination of the offering price or the date it is
first used after effectiveness in connection with a public offering or
sales, or transmitted by a means reasonably calculated to result in
filing with the Commission by that date.
(6) A form of prospectus used in connection with an offering of
securities under Canada's National Policy Statement No. 45 pursuant to
rule 415 under the Securities Act ( 230.415 of this chapter) that is not
made in the United States shall be filed with the Commission no later
than the date it is first used in Canada, or transmitted by a means
reasonably calculated to result in filing with the Commission by that
date.
(c) If a form of prospectus, other than one filed pursuant to
paragraph (b)(1) or (b)(4) of this Rule, consists of a prospectus
supplement attached to a form of prospectus that (1) previously ha been
filed or (2) was not required to be filed pursuant to paragraph (b)
because it did no contain substantive changes from a prospectus that
previously was filed, only the prospectus supplement need be filed under
paragraph (b) of this rule, provided that the first page of each
prospectus supplement includes a cross reference to the date(s) of the
related prospectus and any prospectus supplements thereto that together
constitute the prospectus required to be delivered by Section 5(b) of
the Securities Act (15 U.S.C. 77e(b)) with respect to the securities
currently being offered or sold. The cross reference may be set forth
in longhand, provided it is legible.
Note: Any prospectus supplement being filed separately that is
smaller than a prospectus page should be attached to an 8 1/2'' 11''
sheet of paper.
(d) Every prospectus consisting of a radio or television broadcast
shall be reduced to writing. Five copies of every such prospectus shall
be filed with the Commission at least five days before it is broadcast
or otherwise issued to the public.
(e) Each copy of a form of prospectus filed under this rule shall
contain in the upper right corner of the cover page the paragraph of
this rule, including the subparagraph if applicable, under which the
filing is made, and the file number of the registration statement to
which the prospectus relates. The information required by this
paragraph may be set forth in longhand, provided it is legible.
(f) This rule shall not apply with respect to prospectuses of an
investment company registered under the Investment Company Act of 1940
or a business development company.
(14 FR 202, Jan. 14, 1949, as amended at 16 FR 8736, Aug. 29, 1951;
19 FR 400, Jan. 22, 1954; 19 FR 6728, Oct. 20, 1954; 21 FR 1046, Feb.
15, 1956; 52 FR 21260, June 5, 1987; 53 FR 3878, Feb. 10, 1988; 55 FR
23923, June 13, 1990; 56 FR 30054, July 1, 1991)
17 CFR 230.427 Contents of prospectus used after nine months.
There may be omitted from any prospectus used more than 9 months
after the effective date of the registration statement any information
previously required to be contained in the prospectus insofar as later
information covering the same subjects, including the latest available
certified financial statement, as of a date not more than 16 months
prior to the use of the prospectus is contained therein.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11440, Mar. 16, 1982)
17 CFR 230.428 Documents constituting a section 10(a) prospectus for
Form S-8 registration statement; requirements relating to offerings of
securities registered on Form S-8.
(a)(1) Where securities are to be offered pursuant to a registration
statement on Form S-8 ( 239.16b of this chapter), the following, taken
together, shall constitute a prospectus that meets the requirements of
section 10(a) of the Act: (i) The document(s), or portions thereof as
permitted by paragraph (b)(1)(ii) of this section, containing the
employee benefit plan information required by Item 1 of the Form; (ii)
the statement of availability of registrant information, employee
benefit plan annual reports and other information required by Item 2;
and (iii) the documents containing registrant information and employee
benefit plan annual reports that are incorporated by reference in the
registration statement pursuant to Item 3.
(2) The registrant shall maintain a file of the documents that,
pursuant to paragraph (a) of this section, at any time are part of the
section 10(a) prospectus, except for documents required to be
incorporated by reference in the registration statement pursuant to Item
3 of Form S-8. Each such document shall be included in the file until
five years after it is last used as part of the Section 10(a) prospectus
to offer or sell securities pursuant to the plan. With respect to
documents containing specifically designated portions that constitute
part of the section 10(a) prospectus pursuant to paragraph (b)(1)(ii) of
this section, the entire document shall be maintained in the file. Upon
request, the registrant shall furnish to the Commission or its staff a
copy of any or all of the documents included in the file.
(b) Where securities are offered pursuant to a registration statement
on Form S-8:
(1)(i) The registrant shall deliver or cause to be delivered, to each
employee who is eligible to participate (or selected by the registrant
to participate, in the case of a stock option or other plan with
selective participation) in an employee benefit plan to which the
registration statement relates, the information required by Part I of
Form S-8. The information shall be in written form and shall be updated
in writing in a timely manner to reflect any material changes during any
period in which offers or sales are being made. When updating
information is furnished, documents previously furnished need not be
re-delivered, but the registrant shall furnish promptly without charge
to each employee, upon written or oral request, a copy of all documents
containing the plan information required by Part I that then constitute
part of the section 10(a) prospectus.
(ii) The registrant may designate an entire document or only portions
of a document as constituting part of the section 10(a) prospectus. If
the registrant designates only portions of a document as constituting
part of the prospectus, rather than the entire document, a statement
clearly identifying such portions, for example, by reference to section
headings, section numbers, paragraphs or page numbers within the
document must be included in a conspicuous place in the forepart of the
document, or such portions must be specifically designated throughout
the text of the document. Registrants shall not designate only words or
sentences within a paragraph as part of a prospectus. Unless the
portions of a document constituting part of the section 10(a) prospectus
are clearly identified, the entire document shall constitute part of the
prospectus.
(iii) The registrant shall date any document constituting part of the
section 10(a) prospectus or containing portions constituting part of the
prospectus and shall include the following printed, stamped or typed
legend in a conspicuous place in the forepart of the document,
substituting the bracketed language as appropriate: ''This document
(Specifically designated portions of this document) constitutes
(constitute) part of a prospectus covering securities that have been
registered under the Securities Act of 1933.''
(iv) The registrant shall revise the document(s) containing the plan
information sent or given to newly eligible participants pursuant to
paragraph (b)(1)(i) of this section, if documents containing updating
information would obscure the readability of the plan information.
(2) The registrant shall deliver or cause to be delivered with the
document(s) containing the information required by Part I of Form S-8,
to each employee to whom such information is sent or given, a copy of
any one of the following:
(i) The registrant's annual report to security holders containing the
information required by Rule 14a-3(b) ( 240.14a-3(b) of this chapter)
under the Securities Exchange Act of 1934 (Exchange Act) for its latest
fiscal year;
(ii) The registrant's annual report on Form 10-K ( 249.310 of this
chapter), U5S ( 259.5s of this chapter), 20-F ( 249.220f of this
chapter) or, in the case of registrants described in General Instruction
A.(2) of Form 40-F, 40-F ( 249.240f of this chapter) for its latest
fiscal year;
(iii) The latest prospectus filed pursuant to Rule 424(b) (
230.424(b) of this chapter) under the Act that contains audited
financial statements for the registrant's latest fiscal year, Provided
that the financial statements are not incorporated by reference from
another filing, and Provided further that such prospectus contains
substantially the information required by Rule 14a-3(b) or the
registration statement was on Form S-18 ( 239.28 of this chapter) or F-1
( 239.31 of this chapter); or
(iv) The registrant's effective Exchange Act registration statement
on Form 10 ( 249.210 of this chapter), 20-F or, in the case of
registrants described in General Instruction A.(2) of Form 40-F, 40-F
containing audited financial statements for the registrant's latest
fiscal year.
Instructions. 1. If a registrant has previously sent or given an
employee a copy of any document specified in clauses (i)-(iv) of
paragraph (b)(2) for the latest fiscal year, it need not be
re-delivered, but the registrant shall furnish promptly, without charge,
a copy of such document upon written or oral request of the employee.
2. If the latest fiscal year of the registrant has ended within 120
days (or 190 days with respect to foreign private issuers) prior to the
delivery of the documents containing the information specified by Part I
of Form S-8, the registrant may deliver a document containing financial
statements for the fiscal year preceding the last fiscal year, Provided
that within the 120 or 190 day period a document containing financial
statements for the latest fiscal year is furnished to each employee.
(3) The registrant shall deliver or cause to be delivered promptly,
without charge, to each employee to whom information is required to be
delivered, upon written or oral request, a copy of the information that
has been incorporated by reference pursuant to Item 3 of Form S-8 (not
including exhibits to the information that is incorporated by reference
unless such exhibits are specifically incorporated by reference into the
information that the registration statement incorporates).
(4) Where interests in a plan are registered, the registrant shall
deliver or cause to be delivered promptly, without charge, to each
employee to whom information is required to be delivered, upon written
or oral request, a copy of the then latest annual report of the plan
filed pursuant to Section 15(d) of the Exchange Act, whether on Form
11-K ( 249.311 of this chapter) or included as part of the registrant's
annual report on Form 10-K.
(5) The registrant shall deliver or cause to be delivered to all
employees participating in a stock option plan or plan fund that invests
in registrant securities (and other plan participants who request such
information orally or in writing) who do not otherwise receive such
material, copies of all reports, proxy statements and other
communications distributed to its security holders generally, provided
that such material is sent or delivered no later than the time it is
sent to security holders.
(c) As used in this Rule, the term employee benefit plan is defined
in Rule 405 of Regulation C ( 230.405 of this chapter) and the term
employee is defined in General Instruction A.1 of Form S-8.
(55 FR 23923, June 13, 1990, as amended at 57 FR 10614, Mar. 27,
1992)
17 CFR 230.429 Prospectus relating to several registration statements.
(a) Where two or more registration statements have been filed by the
same registrant, a prospectus which meets the requirements of the act
and the rules and regulations thereunder for use in connection with the
securities covered by the latest registration statement shall be deemed
to meet such requirements for use in connection with the securities
covered by the earlier registration statements if such prospectus
includes all of the information which would currently be required in a
prospectus relating to the securities covered by the earlier statements.
(b) Where the use of a combined prospectus is permitted by paragraph
(a) of this section, the filing of such prospectus as a part of the
latest registration statement or compliance with any undertaking
contained in such statement to file as an amendment thereto any
prospectus which purports to meet the requirements of section 10(a)(3)
of the Act, shall be deemed to constitute compliance with any similar
undertaking contained in the earlier registration statements. The
latest registration statement or any such amendment thereto shall
indicate on the facing page at the bottom thereof the earlier
registration statements to which the combined prospectus relates but
copies of such prospectus need not be filed with such earlier
statements.
(Secs. 6, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209, 48
Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685; sec. 1,
79 Stat. 1051; (15 U.S.C. 77f, 77h, 77j, 77s(a))
(33 FR 14638, Oct. 1, 1968, as amended at 36 FR 778, Jan. 16, 1971;
42 FR 12880, Mar. 7, 1977; 43 FR 33905, Aug. 2, 1978)
17 CFR 230.430 Prospectus for use prior to effective date.
A form of prospectus filed as a part of the registration statement
shall be deemed to meet the requirements of section 10 of the Act for
the purpose of section 5(b)(1) thereof prior to the effective date of
the registration statement, provided such form of prospectus contains
substantially the information required by the Act and the rules and
regulations thereunder to be included in a prospectus meeting the
requirements of section 10(a) of the Act for the securities being
registered, or contains substantially that information except for the
omission of information with respect to the offering price, underwriting
discounts or commissions, discounts or commissions to dealers, amount of
proceeds, conversion rates, call prices, or other matters dependent upon
the offering price. Every such form of prospectus shall be deemed to
have been filed as a part of the registration statement for the purpose
of section 7 of the Act.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11440, Mar. 16, 1982)
17 CFR 230.430A Prospectus in a registration statement at the time of
effectiveness.
(a) The form of prospectus filed as part of a registration statement
that is declared effective may omit information with respect to the
public offering price, underwriting syndicate (including any material
relationships between the registrant and underwriters not named
therein), underwriting discounts or commissions, discounts or
commissions to dealers, amount of proceeds, conversion rates, call
prices and other items dependent upon the offering price, delivery
dates, and terms of the securities dependent upon the offering date;
and such form of prospectus need not contain such information in order
for the registration statement to meet the requirements of Section 7 of
the Securities Act (15 U.S.C. 77g) for the purposes of Section 5 thereof
(15 U.S.C. 77e), Provided, That:
(1) The securities to be registered are offered for cash;
(2) The registrant furnishes the undertakings required by Item 512(i)
of Regulation S-K ( 229.512(i) of this chapter); and
(3) The information ommitted in reliance upon paragraph (a) from the
form of prospectus filed as part of a registration statement that is
declared effective is contained in a form of prospectus filed with the
Commission pursuant to Rule 424(b) or Rule 497(h) under the Securities
Act ( 230.424(b) or 230.497(h) of this chapter); except that if such
form of prospectus is not so filed by the later of five business days
after the effective date of the registration statement or five business
days after the effectiveness of a post-effective amendment thereto that
contains a form of prospectus, or transmitted by a means reasonably
calculated to result in filing with the Commission by that date, the
information omitted in reliance upon paragraph (a) must be contained in
an effective post-effective amendment to the registration statement.
(b) The information omitted in reliance upon paragraph (a) from the
form of prospectus filed as part of an effective registration statement,
and contained in the form of prospectus filed with the Commission
pursuant to Rule 424(b) or Rule 497(h) under the Securities Act (
230.424(b) or 230.497(h) of this chapter), shall be deemed to be a part
of the registration statement as of the time it was declared effective.
(c) When used prior to determination of the offering price of the
securities, a form of prospectus relating to the securities offered
pursuant to a registration statement that is declared effective with
information omitted from the form of prospectus filed as part of such
effective registration statement in reliance upon this Rule 430A need
not contain information omitted pursuant to paragraph (a), in order to
meet the requirements of Section 10 of the Securities Act (15 U.S.C.
77j) for the purpose of section 5(b)(1) (15 U.S.C. 77e(b)(1)) thereof.
This provision shall not limit the information required to be contained
in a form of prospectus meeting the requirements of section 10(a) of the
Act for the purposes of section 5(b)(2) thereof or exception (a) of
Section 2(10) (15 U.S.C. 77b(10)) thereof.
(d) This rule shall not apply to registration statements for
securities to be offered by competitive bidding.
Note: If information is omitted in reliance upon paragraph (a) from
the form of prospectus filed as part of an effective registration
statement, or effective post-effective amendment thereto, the registrant
must ascertain promptly whether a form of prospectus transmitted for
filing under Rule 424(b) of Rule 497(h) under the Securities Act
actually was received for filing by the Commission and, in the event
that it was not, promptly file such prospectus.
(52 FR 21261, June 5, 1987, as amended at 56 FR 48103, Sept. 24,
1991)
17 CFR 230.431 Summary prospectuses.
(a) A summary prospectus prepared and filed as a part of a
registration statement in accordance with this rule shall be deemed to
be a prospectus permitted under section 10(b) of the Act for the purpose
of section 5(b)(1) of the Act if the form used for registration of the
securities to be offered provides for the use of a summary prospectus
and, if the issuer is not a registered open-end investment company, the
following conditions are met:
(1)(i) The registrant is organized under the laws of the United
States or any State or Territory or the District of Columbia and has its
principal business operations in the United States or its territories;
or
(ii) The registrant is a foreign private issuer eligible to use Form
F-2 ( 239.32 of this chapter);
(2) The registrant has a class of securities registered pursuant to
section 12(b) of the Securities Exchange Act of 1934 or has a class of
equity securities registered pursuant to section 12(g) of that Act or is
required to file reports pursuant to section 15(d) of that Act;
(3) The registrant: (i) Has been subject to the requirements of
section 12 or 15(d) of the Securities Exchange Act of 1934 and has filed
all the material required to be filed pursuant to sections 13, 14 or
15(d) of that Act for a period of at least thirty-six calendar months
immediately preceding the filing of the registration statement; and
(ii) has filed in a timely manner all reports required to be filed
during the twelve calendar months and any portion of a month immediately
preceding the filing of the registration statement and, if the
registrant has used (during the twelve calendar months and any portion
of a month immediately preceding the filing of the registration
statement) Rule 12b-25(b) under the Securities Exchange Act of 1934 (
240.12b-25 of this chapter) with respect to a report or portion of a
report, that report or portion thereof has actually been filed within
the time period prescribed by that Rule; and
(4) Neither the registrant nor any of its consolidated or
unconsolidated subsidiaries has, since the end of its last fiscal year
for which certified financial statements of the registrant and its
consolidated subsidiaries were included in a report filed pursuant to
section 13(a) or 15(d) of the Securities Exchange Act of 1934: (i)
failed to pay any dividend or sinking fund installment on preferred
stock; or (ii) defaulted on any installment or installments on
indebtedness for borrowed money, or on any rental on one or more long
term leases, which defaults in the aggregate are material to the
financial position of the registrant and its consolidated and
unconsolidated subsidiaries, taken as a whole.
(b) A summary prospectus shall contain the information specified in
the instructions as to summary prospectuses in the form used for
registration of the securities to be offered. Such prospectus may
include any other information the substance of which is contained in the
registration statement except as otherwise specifically provided in the
instructions as to summary prospectuses in the form used for
registration. It shall not include any information the substance of
which is not contained in the registration statement except that a
summary prospectus may contain any information specified in Rule 134(a)
( 230.134(a)). No reference need be made to inapplicable terms and
negative answers to any item of the form may be omitted.
(c) All information included in a summary prospectus, other than the
statement required by paragraph (e) of this section, may be expressed in
such condensed or summarized form as may be appropriate in the light of
the circumstances under which the prospectus is to be used. The
information need not follow the numerical sequence of the items of the
form used for registration. Every summary prospectus shall be dated
approximately as of the date of its first use.
(d) When used prior to the effective date of the registration
statement, a summary prospectus shall be captioned a ''Preliminary
Summary Prospectus'' and shall comply with the applicable requirements
relating to a preliminary prospectus.
(e) A statement to the following effect shall be prominently set
forth in conspicuous print at the beginning or at the end of every
summary prospectus:
''Copies of a more complete prospectus may be obtained from'' (Insert
name(s), address(es) and telephone number(s)).
Copies of a summary prospectus filed with the Commission pursuant to
paragraph (g) of this section may omit the names of persons from whom
the complete prospectus may be obtained.
(f) Any summary prospectus published in a newspaper, magazine or
other periodical need only be set in type at least as large as 7 point
modern type. Nothing in this rule shall prevent the use of reprints of
a summary prospectus published in a newspaper, magazine, or other
periodical, if such reprints are clearly legible.
(g) Eight copies of every proposed summary prospectus shall be filed
as a part of the registration statement, or as an amendment thereto, at
least 5 days (exclusive of Saturdays, Sundays and holidays) prior to the
use thereof, or prior to the release for publication by any newspaper,
magazine or other person, whichever is earlier. The Commission may,
however, in its discretion, authorize such use or publication prior to
the expiration of the 5-day period upon a written request for such
authorization. Within 7 days after the first use or publication
thereof, 5 additional copies shall be filed in the exact form in which
it was used or published.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37; secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79,
81, 85; secs. 205, 209, 48 Stat. 906, 908; sec. 301, 54 Stat. 857;
sec. 8, 68 Stat. 685; sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90 Stat.
57; secs. 12, 13, 15(d), 23(a), 48 Stat. 892, 894, 895, 901; secs. 1,
3, 8, 49 Stat. 1375, 1377, 1379; sec. 203(a), 49 Stat. 704; sec. 202,
68 Stat. 686; secs. 3, 4, 6, 78 Stat. 565-568, 569, 570-574; secs. 1,
2, 82 Stat. 454; sec. 28(c), 84 Stat. 1435; secs. 1, 2, 84 Stat. 1497;
sec. 105(b), 88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat. 117, 118,
119, 155; sec. 308(b), 90 Stat. 57; secs. 202, 203, 204, 91 Stat.
1494, 1498, 1499, 1500; secs. 8 30, 31(c), 38(a), 54 Stat. 803, 836,
838, 841; 74 Stat. 201; 84 Stat. 1415; 15 U.S.C. 77f, 77g, 77h, 77j,
77s(a), 78l, 78m, 78o(d), 78w(a), 80a-8, 80a-29, 80a-30(c), 80a-37(a))
(47 FR 11440, Mar. 16, 1982, as amended at 47 FR 54770, Dec. 6, 1982)
17 CFR 230.432 Additional information required to be included in
prospectuses relating to tender offers.
Notwithstanding the provisions * * * not otherwise required to be
included therein, required by Rule 14d-6(e)(1) ( 240.14d-6(e)(1) of this
chapter) to be included in all such tender offers, requests or
invitations, published or sent or given to the holders of such
securities.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85, secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90 Stat. 57; secs. 12, 13, 14,
15(d), 23(a), 48 Stat. 892, 895, 901; secs. 1, 3, 8, 49 Stat. 1375,
1377, 1379; sec 203(a), 49 Stat. 704; sec. 202, 68 Stat. 686; secs.
3, 4, 5, 6, 78 Stat. 565-568, 569, 570-574; secs. 1, 2, 3, 82 Stat.
454, 455; secs. 28(c), 1, 2, 3-5, 84 Stat. 1435, 1497; sec. 105(b),
88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat. 117, 118, 119, 155; sec.
308(b), 90 Stat. 57; secs. 202, 203, 204, 81 Stat. 1494, 1498, 1499,
1500; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 78l, 78m, 78n, 78o(d),
78w(a))
(48 FR 19875, May 3, 1983)
17 CFR 230.432 written consents
17 CFR 230.436 Consents required in special cases.
(a) If any portion of the report or opinion of an expert or counsel
is quoted or summarized as such in the registration statement or in a
prospectus, the written consent of the expert or counsel shall be filed
as an exhibit to the registration statement and shall expressly state
that the expert or counsel consents to such quotation or summarization.
(b) If it is stated that any information contained in the
registration statement has been reviewed or passed upon by any persons
and that such information is set forth in the registration statement
upon the authority of or in reliance upon such persons as experts, the
written consents of such persons shall be filed as exhibits to the
registration statement.
(c) Notwithstanding the provisions of paragraph (b) of this section,
a report on unaudited interim financial information (as defined in
paragraph (d) of this section) by an independent accountant who has
conducted a review of such interim financial information shall not be
considered a part of a registration statement prepared or certified by
an accountant or a report prepared or certified by an accountant within
the meaning of sections 7 and 11 of the Act.
(d) The term report on unaudited interim financial information shall
mean a report which consists of the following:
(1) A statement that the review of interim financial information was
made in accordance with established professional standards for such
reviews;
(2) An identification of the interim financial information reviewed;
(3) A description of the procedures for a review of interim financial
information;
(4) A statement that a review of interim financial information is
substantially less in scope than an examination in accordance with
generally accepted auditing standards, the objective of which is an
expression of opinion regarding the financial statements taken as a
whole, and, accordingly, no such opinion is expressed; and
(5) A statement about whether the accountant is aware of any material
modifications that should be made to the accompanying financial
information so that it conforms with generally accepted accounting
principles.
(e) Where a counsel is named as having acted for the underwriters or
selling security holders, no consent will be required by reason of his
being named as having acted in such capacity.
(f) Where the opinion of one counsel relies upon the opinion of
another counsel, the consent of the counsel whose prepared opinion is
relied upon need not be furnished.
(g)(1) Notwithstanding the provisions of paragraphs (a) and (b) of
this section, the security rating assigned to a class of debt
securities, a class of convertible debt securities, or a class of
preferred stock by a nationally recognized statistical rating
organization shall not be considered a part of a registration statement
prepared or certified by a person within the meaning of sections 7 and
11 of the Act.
(2) For the purpose of paragraph (g)(1) of this section, the term
nationally recognized statistical rating organization shall have the
same meaning as used in Rule 15c3-1(c)(2)(vi)(F) (17 CFR 240.15c3-1
(c)(2)(vi)(F)).
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11441, Mar. 16, 1982)
17 CFR 230.437 Application to dispense with consent.
An application to the Commission to dispense with any written consent
of an expert pursuant to section 7 of the act shall be made by the
registrant and shall be supported by an affidavit or affidavits
establishing that the obtaining of such consent is impracticable or
involves undue hardship on the registrant. Such application shall be
filed and the consent of the Commission shall be obtained prior to the
effective date of the registration statement.
(Reg. C, 12 FR 4074, June 24, 1947)
17 CFR 230.438 Consents of persons about to become directors.
If any person who has not signed the registration statement is named
therein as about to become a director, the written consent of such
person shall be filed with the registration statement. Any such
consent, however, may be omitted if there is filed with the registration
statement a statement by the registrant, supported by an affidavit or
affidavits, setting forth the reasons for such omission and establishing
that the obtaining of such consent is impracticable or involves undue
hardship on the registrant.
(Reg. C, 12 FR 4074, June 24, 1947)
17 CFR 230.439 Consent to use of material incorporated by reference.
If the Act or the rules and regulations of the Commission require the
filing of a written consent to the use of any material in connection
with the registration statement, such consent shall be filed as an
exhibit to the registration statement even though the material is
incorporated therein by reference. Where the filing of a written
consent is required with respect to material incorporated in the
registration statement by reference, which is to be filed subsequent to
the effective date of the registration statement, such consent shall be
filed as an amendment to the registration statement no later than the
date on which such material is filed with the Commission, unless express
consent to incorporation by reference is contained in the material to be
incorporated by reference.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11441, Mar. 16, 1982)
17 CFR 230.439 competitive bids
Authority: Sections 230.445 to 230.447 issued under secs. 6, 7, 8,
10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209, 48 Stat. 906,
908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685; sec. 308(a)(2),
90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48 Stat. 882, 892,
894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704, 1375, 1377, 1379;
sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat. 569, 570-574;
secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3, 4, 5, 84 Stat.
1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9, 10, 89 Stat.
117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat. 155; secs.
202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49 Stat. 833;
sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C. 77f, 77g,
77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 79t(a),
77sss(a), 80a-37.
Source: Sections 230.445 to 230.447 appear at 47 FR 11441, Mar. 16,
1982, unless otherwise noted.
17 CFR 230.445 Competitive bidding registration statement.
(a) Any order declaring a registration statement, covering securities
to be offered at competitive bidding, effective shall be deemed to
declare an amendment thereto, filed to reflect the results of the
bidding, the terms of the reoffering and related materials, effective in
accordance with paragraph (b) of this section.
(b) An amendment to such a registration statement filed to reflect
the results of the bidding, the terms of the reoffering and related
materials (which may make such other changes in the registration
statement as the registrant deems appropriate) shall become effective at
the time such amendment is filed with the Commission at its principal
office or any regional or branch office, unless the Commission has
notified the registrant that it has instituted proceedings under section
8 of the Act. The amendment shall be accompanied by the consent of a
managing underwriter, acting on behalf of all principal underwriters of
the securities offered at competitive bidding, to the filing thereof.
(c) A prospectus relating to the securities offered at competitive
bidding, when used prior to the opening of bids, need not contain
information dependent upon the determination of the offering price of
such securities or the acceptance of the bid, in order to meet the
requirements of section 10(a) of the Act. A prospectus relating to such
securities, when used after the opening of bids, shall not be deemed to
meet the requirements of section 10(a) of the Act unless (1) an
amendment to the registration statement has been filed to reflect the
results of the bidding, the terms of the reoffering and related
materials, if required, and (2) such prospectus reflects the information
contained in the registration statement, as amended, to the extent
required by the applicable form.
(d) A registrant may register securities to be offered at competitive
bidding and securities not to be so offered pursuant to a single joint
registration statement only if all information (including offering data,
etc.) required by the applicable form with respect to the securities not
to be so offered is included in the registration statement prior to the
initial effectiveness thereof. If such information is not so included,
the Commission will not accelerate such effectiveness unless an
amendment to the registration statement is first filed so as to make it
cover only the securities to be offered at competitive bidding. The
registrant may, however, either initially or after such amendment,
register the securities not to be offered at competitive bidding
pursuant to a separate registration statement. An appropriate composite
form of prospectus may in any event be used for all securities
registered.
17 CFR 230.446 Invitations for competitive bids.
Any information or documents contained in a registration statement
may be omitted from any communication which is only an invitation for
competitive bids for securities with respect to which a registration
statement has been filed, provided (a) the terms of the bidding require
that each bid shall be for the purchase of the entire amount of one or
more of the issues; and (b) the communication states that prior to the
acceptance of any bid the bidder will be furnished a copy of a
prospectus which meets the requirements of section 10(a) of the Act at
that time.
17 CFR 230.447 Authorization of agent for service for filing
amendments.
A registration statement filed in connection with the registration of
securities to be offered at competitive bidding may expressly confer
authorization upon the agent for service named in the registration
statement to amend the registration statement in accordance with the
undertaking to file an amendment to the registration statement
reflecting the results of the bidding, the terms of the reoffering and
related matters, not later than the first use, authorized by the
registrant after the opening of bids. The authorization shall be
substantially in the following form:
Each person whose signature appears below hereby authorizes the agent
for service named in the registration statement to execute in the name
of each such person, and to file, an amendment to the registration
statement pursuant to the above undertaking, which amendment may make
such other changes in the registration statement as the registrant deems
appropriate.
17 CFR 230.447 filings; fees; effective date
17 CFR 230.455 Place of filing.
All registration statements and other papers filed with the
Commission shall be filed at its principal office, except for statements
on Form S-18 ( 239.28 of this chapter) and except as otherwise provided
in Rule 445 ( 230.445). Registration statements on Form S-18 may be
filed with the Commission either at its principal office or at the
Commission's regional offices as specified in General Instruction B to
Form S-18. Such material may be filed by delivery to the Commission
through the mails or otherwise.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11442, Mar. 16, 1982)
17 CFR 230.456 Date of filing.
The date on which any papers are actually received by the Commission
shall be the date of filing thereof, if all the requirements of the act
and the rules with respect to such filing have been complied with and
the required fee paid. The failure to pay an insignificant amount of
the required fee at the time of filing, as the result of a bona fide
error, shall not be deemed to affect the date of filing.
(16 FR 8737, Aug. 29, 1951)
17 CFR 230.457 Computation of fee.
(a) If a filing fee based on a bona fide estimate of the maximum
offering price, computed in accordance with this rule where applicable,
has been paid, no additional filing fee shall be required as a result of
changes in the proposed offering price. If the number of shares or
other units of securities, or the principal amount of debt securities to
be offered is increased by an amendment filed prior to the effective
date of the registration statement, an additional filing fee, computed
on the basis of the offering price of the additional securities, shall
be paid. There will be no refund once the statement is filed.
(b) A required fee shall be reduced in an amount equal to any fee
paid with respect to such transaction pursuant to sections 13(e) and
14(g) of the Securities Exchange Act of 1934 or any applicable provision
of this section; the fee requirements under sections 13(e) and 14(g)
shall be reduced in an amount equal to the fee paid the Commission with
respect to a transaction under this section. No part of a filing fee is
refundable.
(c) Where securities are to be offered at prices computed upon the
basis of fluctuating market prices, the registration fee is to be
calculated upon the basis of the price of securities of the same class,
as follows: either the average of the high and low prices reported in
the consolidated reporting system (for exchange traded securities and
last sale reported over-the-counter securities) or the average of the
bid and asked price (for other over-the-counter securities) as of a
specified date within 5 business days prior to the date of filing the
registration statement.
(d) Where securities are to be offered at varying prices based upon
fluctuating values of underlying assets, the registration fee is to be
calculated upon the basis of the market value of such assets as of a
specified date within fifteen days prior to the date of filing, in
accordance with the method to be used in calculating the daily offering
price.
(e) Where securities are to be offered to existing security holders
and the portion, if any, not taken by such security holders is to be
reoffered to the general public, the registration fee is to be
calculated upon the basis of the proposed offering price to such
security holders or the proposed reoffering price to the general public,
whichever is higher.
(f) Where securities are to be offered in exchange for other
securities (except where such exchange results from the exercise of a
conversion privilege) or in a reclassification or recapitalization which
involves the substitution of a security for another security, a merger,
a consolidation, or a similar plan of acquisition, the registration fee
is to be calculated as follows:
(1) Upon the basis of the market value of the securities to be
received by the registrant or canceled in the exchange or transaction as
established by the price of securities of the same class, as determined
in accordance with paragraph (c) of this section.
(2) If there is no market for the securities to be received by the
registrant or cancelled in the exchange or transaction, the book value
of such securities computed as of the latest practicable date prior to
the date of filing the registration statement shall be used, unless the
issuer of such securities is in bankruptcy or receivership, or has an
accumulated capital deficit, in which case one-third of the principal
amount, par value or stated value of such securities shall be used.
(3) If any cash is to be received by the registrant in connection
with the exchange or transaction, the amount thereof shall be added to
the value of the securities to be received by the registrant or
cancelled as computed in accordance with (e) (1) or (2) of this section.
If any cash is to be paid by the registrant in connection with the
exchange or transaction, the amount thereof shall be deducted from the
value of the securities to be received by the registrant in exchange as
computed in accordance with (e) (1) or (2) of this section.
(4) Securities to be offered directly or indirectly for certificates
of deposit shall be deemed to be offered for the securities represented
by the certificates of deposit.
(g) Where securities are to be offered pursuant to warrants or other
rights to purchase such securities and the holders of such warrants or
rights may be deemed to be underwriters, as defined in section 2(11) of
the Act, with respect to the warrants or rights or the securities
subject thereto, the registration fee is to be calculated upon the basis
of the price at which the warrants or rights or securities subject
thereto are to be offered to the public. If such offering price cannot
be determined at the time of filing the registration statement, the
registration fee is to be calculated upon the basis of the highest of
the following: (1) the price at which the warrants or rights may be
exercised, if known at the time of filing the registration statement;
(2) the offering price of securities of the same class included in the
registration statement; or (3) the price of securities of the same
class, as determined in accordance with paragraph (c) of this section.
If the fee is to be calculated upon the basis of the price at which the
warrants or rights may be exercised and they are exercisable over a
period of time at progressively higher prices, the fee shall be
calculated on the basis of the highest price at which they may be
exercised. If the warrants or rights are to be registered for
distribution in the same registration statement as the securities to be
offered pursuant thereto, no separate registration fee shall be
required.
(h)(1) Where securities are to be offered pursuant to an employee
benefit plan, the aggregate offering price and the amount of the
registration fee shall be computed with respect to the maximum number of
the registrant's securities issuable under the plan that are covered by
the registration statement. If the offering price is not known, the fee
shall be computed upon the basis of the price of securities of the same
class, as determined in accordance with paragraph (c) of this section.
In the case of an employee stock option plan, the aggregate offering
price and the fee shall be computed upon the basis of the price at which
the options may be exercised, or, if such price is not known, upon the
basis of the price of securities of the same class, as determined in
accordance with paragraph (c) of this section. If there is no market
for the securities to be offered, the book value of such securities
computed as of the latest practicable date prior to the date of filing
the registration statement shall be used.
(2) If the registration statement registers securities of the
registrant and also registers interests in the plan constituting
separate securities, no separate fee is required with respect to the
plan interests.
(3) Where a registration statement includes securities to be offered
pursuant to an employee benefit plan and covers the resale of the same
securities, no additional filing fee shall be paid with respect to the
securities to be offered for resale. A filing fee determined in
accordance with paragraph (c) of this section shall be paid with respect
to any additional securities to be offered for resale.
(i) Where convertible securities and the securities into which
conversion is offered are registered at the same time, the registration
fee is to be calculated on the basis of the proposed offering price of
the convertible securities alone, except that if any additional
consideration is to be received in connection with the exercise of the
conversion privilege the maximum amount which may be received shall be
added to the proposed offering price of the convertible securities.
(j) Where securities are sold prior to the registration thereof and
are subsequently registered for the purpose of making an offer of
rescission of such sale or sales, the registration fee is to be
calculated on the basis of the amount at which such securities were
sold, except that where securities repurchased pursuant to such offer of
rescission are to be reoffered to the general public at a price in
excess of such amount the registration fee is to be calculated on the
basis of the proposed reoffering price.
(k) Notwithstanding the other provisions of this rule, the proposed
maximum aggregate offering price of Depositary Shares evidenced by
American Depositary Receipts shall, only for the purpose of calculating
the registration fee, be computed upon the basis of the maximum
aggregate fees or charges to be imposed in connection with the issuance
of such receipts.
(l) Notwithstanding the other provisions of this rule, the proposed
maximum aggregate offering price of any put or call option which is
traded on an exchange and registered by such exchange or a facility
thereof or which is traded over the counter shall, for the purpose of
calculating the registration fee, be computed upon the basis of the
maximum aggregate fees or charges to be imposed by such registrant in
connection with the issuance of such option.
(m) Notwithstanding the other provisions of this rule, where the
securities to be registered include (1) any note, draft, bill of
exchange, or bankers' acceptance which meets all the conditions of
section 3(a)(3) hereof, and (2) any note, draft, bill of exchange or
bankers' acceptance which has a maturity at the time of issuance of not
exceeding nine months exclusive of days of grace, or any renewal thereof
the maturity date of which is likewise limited, but which otherwise does
not meet the conditions of section 3(a)(3), the registration fee shall
be calculated by taking one-fiftieth of 1 per centum of the maximum
principal amount of only those securities not meeting the conditions of
section 3(a)(3).
(n) Where the securities to be offered are guarantees of other
securities which are being registered concurrently, no separate fee for
the guarantees shall be payable.
(47 FR 11442, Mar. 16, 1982, as amended at 48 FR 12347, Mar. 24,
1983; 51 FR 2475, Jan. 17, 1986; 55 FR 23924, June 13, 1990)
17 CFR 230.459 Calculation of effective date.
Saturdays, Sundays and holidays shall be counted in computing the
effective date of registration statements under section 8(a) of the act.
In the case of statements which become effective on the twentieth day
after filing, the twentieth day shall be deemed to begin at the
expiration of nineteen periods of 24 hours each from 5:30 p.m. eastern
standard time or eastern daylight-saving time, whichever is in effect at
the principal office of the Commission on the date of filing.
(Reg. C, 12 FR 4075, June 24, 1947)
17 CFR 230.460 Distribution of preliminary prospectus.
(a) Pursuant to the statutory requirement that the Commission in
ruling upon requests for acceleration of the effective date of a
registration statement shall have due regard to the adequacy of the
information respecting the issuer theretofore available to the public,
the Commission may consider whether the persons making the offering have
taken reasonable steps to make the information contained in the
registration statement conveniently available to underwriters and
dealers who it is reasonably anticipated will be invited to participate
in the distribution of the security to be offered or sold.
(b) As a minimum, reasonable steps to make the information
conveniently available would involve the distribution, to each
underwriter and dealer who it is reasonably anticipated will be invited
to participate in the distribution of the security, a reasonable time in
advance of the anticipated effective date of the registration statement,
of as many copies of the proposed form of preliminary prospectus
permitted by Rule 430 ( 230.430) as appears to be reasonable to secure
adequate distribution of the preliminary prospectus.
(c) The granting of acceleration will not be conditioned upon
(1) The distribution of a preliminary prospectus in any state where
such distribution would be illegal; or
(2) The distribution of a preliminary prospectus (i) in the case of a
registration statement relating solely to securities to be offered at
competitive bidding, provided the undertaking in Item 512(d)(1) of
Regulation S-K ( 229.512(d)(2) of this chapter) is included in the
registration statement and distribution of prospectuses pursuant to such
undertaking is made prior to the publication or distribution of the
invitation for bids, or
(ii) In the case of a registration statement relating to a security
issued by a face-amount certificate company or a redeemable security
issued by an open-end management company or unit investment trust if any
other security of the same class is currently being offered or sold,
pursuant to an effective registration statement by the issuer or by or
through an underwriter, or
(iii) In the case of an offering of subscription rights unless it is
contemplated that the distribution will be made through dealers and the
underwriters intend to make the offering during the stockholders'
subscription period, in which case copies of the preliminary prospectus
must be distributed to dealers prior to the effective date of the
registration statement in the same fashion as is required in the case of
other offerings through underwriters, or
(iv) In the case of a registration statement pertaining to a security
to be offered pursuant to an exchange offer or transaction described in
Rule 145 ( 230.145).
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11443, Mar. 16, 1982)
17 CFR 230.461 Acceleration of effective date.
(a) Requests for acceleration of the effective date of a registration
statement shall be made in writing by the registrant and the managing
underwriters of the proposed issue, or, if there are no managing
underwriters, by the principal underwriters of the proposed issue, and
shall state the date upon which it is desired that the registration
statement shall become effective. If, by reason of the expected
arrangement in connection with the offering, it is to be requested that
the registration statement shall become effective at a particular hour
of the day, the Commission must be advised to that effect not later than
the second business day before the day which it is desired that the
registration statement shall become effective. A person's request for
acceleration will be considered confirmation of such person's awareness
of the person's obligations under the Act. Not later than the time of
filing the last amendment prior to the effective date of the
registration statement, the registrant shall inform the Commission as to
whether or not the amount of compensation to be allowed or paid to the
underwriters and any other arrangements among the registrant, the
underwriters and other broker dealers participating in the distribution,
as described in the registration statement, have been reviewed to the
extent required by the National Association of Securities Dealers, Inc.
and such Association has issued a statement expressing no objections to
the compensation and other arrangements.
(b) Having due regard to the adequacy of information respecting the
registrant theretofore available to the public, to the facility with
which the nature of the securities to be registered, their relationship
to the capital structure of the registrant issuer and the rights of
holders thereof can be understood, and to the public interest and the
protection of investors, as provided in section 8(a) of the Act, it is
the general policy of the Commission, upon request, as provided in
paragraph (a) of this section, to permit acceleration of the effective
date of the registration statement as soon as possible after the filing
of appropriate amendments, if any. In determining the date on which a
registration statement shall become effective, the following are
included in the situations in which the Commission considers that the
statutory standards of section 8(a) may not be met and may refuse to
accelerate the effective date:
(1) Where there has not been a bona fide effort to make the
prospectus reasonably concise and readable, so as to facilitate an
understanding of the information required or permitted to be contained
in the prospectus.
(2) Where the form of preliminary prospectus, which has been
distributed by the issuer or underwriter, is found to be inaccurate or
inadequate in any material respect, until the Commission has received
satisfactory assurance that appropriate correcting material has been
sent to all underwriters and dealers who received such preliminary
prospectus or prospectuses in quantity sufficient for their information
and the information of others to whom the inaccurate or inadequate
material was sent.
(3) Where the Commission is currently making an investigation of the
issuer, a person controlling the issuer, or one of the underwriters, if
any, of the securities to be offered, pursuant to any of the Acts
administered by the Commission.
(4) Where one or more of the underwriters, although firmly committed
to purchase securities covered by the registration statement, is subject
to and does not meet the financial responsibility requirements of Rule
15c3-1 under the Securities Exchange Act of 1934 ( 240.15c3-1 of this
chapter). For the purposes of this paragraph underwriters will be
deemed to be firmly committed even though the obligation to purchase is
subject to the usual conditions as to receipt of opinions of counsel,
accountants, etc., the accuracy of warranties or representations, the
happening of calamities or the occurrence of other events the
determination of which is not expressed to be in the sole or absolute
discretion of the underwriters.
(5) Where there have been transactions in securities of the
registrant by persons connected with or proposed to be connected with
the offering which may have artificially affected or may artificially
affect the market price of the security being offered.
(6) Where the amount of compensation to be allowed or paid to the
underwriters and any other arrangements among the registrant, the
underwriters and other broker dealers participating in the distribution,
as described in the registration statement, if required to be reviewed
by the National Association of Securities Dealers, Inc. (NASD), have
been reviewed by the NASD and the NASD has not issued a statement
expressing no objections to the compensation and other arrangements.
(7) Where, in the case of a significant secondary offering at the
market, the registrant, selling security holders and underwriters have
not taken sufficient measures to insure compliance with Rules 10b-2,
10b-6, and 10b-7 under the Securities Exchange Act of 1934 ( 240.10b-2,
240.10b-6 and 240.10b-7 of this chapter).
(c) Insurance against liabilities arising under the Act, whether the
cost of insurance is borne by the registrant, the insured or some other
person, will not be considered a bar to acceleration, unless the
registrant is a registered investment company or a business development
company and the cost of such insurance is borne by other than an insured
officer or director of the registrant. In the case of such a
registrant, the Commission may refuse to accelerate the effective date
of the registration statement when the registrant is organized or
administered pursuant to any instrument (including a contract for
insurance against liabilities arising under the Act) that protects or
purports to protect any director or officer of the company against any
liability to the company or its security holders to which he or she
would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduct of his or her office.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11444, Mar. 16, 1982)
17 CFR 230.462 Effective date of a registration statement filed on Form
S-8.
A registration statement on Form S-8 ( 239.16b of this chapter) shall
become effective upon filing with the Commission.
(55 FR 23924, June 13, 1990)
17 CFR 230.463 Report of offering of securities and use of proceeds
therefrom.
(a) Except as hereinafter provided in this section, within 10 days
after the end of the first three-month period following the effective
date of the first registration statement filed under the Act by an
issuer, and within 10 days after the end of each six-month period
following such three-month period, the issuer or successor issuer shall
file with the Commission four copies of a report on Form SR ( 239.61 of
this chapter) containing the information required by that form. A final
report shall be filed within 10 days after the later of (1) the
application of the offering proceeds or (2) the termination of the
offering. A report on Form SR shall be filed at the same office of the
Commission where the registration statement to which it relates was
filed.
(b) A successor issuer shall comply with paragraph (a) of this
section only to the extent that filings on Form SR are required with
respect to the first effective registration statement of the predecessor
issuer.
(c) For purposes of this section:
(1) The term offering proceeds shall not include any amount(s)
received for the account(s) of any selling security holder(s).
(2) The term application shall not include the temporary investment
of proceeds by the issuer pending final application.
(d) This section shall not apply to any effective registration
statement for securities to be issued:
(1) In a business combination described in Rule 145(a) ( 230.145(a));
(2) By an issuer which pursuant to a business combination described
in Rule 145(a) has succeeded to another issuer that prior to such
business combination had a registration statement become effective under
the Act and on the date of such business combination was not subject to
paragraph (a) of this section;
(3) Pursuant to an employee benefit plan;
(4) Pursuant to a dividend or interest reinvestment plan;
(5) As American depository receipts for foreign securities;
(6) By any investment company registered under the Investment Company
Act of 1940; or
(7) By any public utility company or public utility holding company
required to file reports with any State or Federal authority.
(8) In a merger in which a vote or consent of the security holders of
the company being acquired is not required pursuant to applicable state
law; or
(9) In an exchange offer for the securities of the issuer or another
entity.
(46 FR 48142, Oct. 1, 1981, as amended at 50 FR 19001, May 6, 1985)
17 CFR 230.464 Effective date of post-effective amendments to
registration statements filed on Form S-8 and on certain Forms S-3, S-4,
F-2, F-3, and F-4.
Provided. That, at the time of filing of each post-effective
amendment with the Commission, the issuer continues to meet the
requirements of filing on Form S-8 ( 239.16b of this chapter); or on
Form S-3, F-2 or F-3 ( 239.13, 239.32 or 239.33 of this chapter) for a
registration statement relating to a dividend or interest reinvestment
plan; or in the case of a registration statement on Form S-4 ( 239.25
of this chapter) that there is continued compliance with General
Instruction G of that Form or on Form F-4 ( 239.34 of this chapter) that
there is continued compliance with General Instruction F of that Form:
(a) The post-effective amendment shall become effective upon filing
with the Commission: and
(b) With respect to securities sold on or after the filing date
pursuant to a prospectus which forms a part of a Form S-8 registration
statement; or a Form S-3, F-2, or F-3 registration statement relating
to a dividend or interest reinvestment plan; or a Form S-4 registration
statement complying with General Instruction G of that Form or a Form
F-4 registration statement complying with General Instruction F of that
Form and which has been amended to include or incorporate new full year
financial statments or to comply with the provisions of section 10(a)(3)
of the Act, the effective date of the registration statement shall be
deemed to be the filing date of the post-effective amendment.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90 Stat. 57; secs. 12, 13,
15(d), 23(a), 48 Stat. 892, 894, 895, 901; secs. 1, 3, 8, 49 Stat.
1375, 1377, 1379; sec. 203(a), 49 Stat. 704; sec. 202, 68 Stat. 686;
secs. 3, 4, 6, 78 Stat. 565-568, 569, 570-574; secs. 1, 2, 82 Stat.
454; sec. 28(c), 84 Stat. 1435; secs. 1, 2, 84 Stat. 1497; sec.
105(b), 88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat. 117, 118, 119, 155;
sec. 308(b), 90 Stat. 57; secs. 202, 203, 204, 91 Stat. 1494, 1498,
1499, 1500; secs. 8 30, 31(c), 38(a), 54 Stat. 803, 836, 838, 841; 74
Stat. 201; 84 Stat. 1415; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 78l,
78m, 78o(d), 78w(a), 80a-8, 80a-29, 80a-30(c), 80a-37(a))
(47 FR 54770, Dec. 6, 1982, as amended at 50 FR 19001, May 6, 1985)
17 CFR 230.466 Effective date of certain registration statements on
Form F-6.
(a) A depositary that previously has filed a registration statement
on Form F-6 ( 239.36 of this chapter) may designate a date and time for
a registration statement (including post-effective amendments) on Form
F-6 to become effective and such registration statement shall become
effective in accordance with such designation if the following
conditions are met:
(1) The depositary previously has filed a registration statement on
Form F-6 ( 239.36 of this chapter), which the Commission has declared
effective, with identical terms of deposit, except for the number of
foreign securities a Depositary Share represents, and the depositary so
certifies; and
(2) The designation of the effective date and time is set forth on
the facing-page of the registration statement, or in any pre-effective
amendment thereto. A pre-effective amendment containing such a
designation properly made shall be deemed to have been filed with the
consent of the Commission.
(b)(1) The Commission may, in the manner and under the circumstances
set forth in paragraph (b)(2) of this section, suspend the ability of a
depositary to designate the date and time of effectiveness of a
registration statement, and such suspension shall remain in effect until
the Commission furnishes written notice to the depositary that the
suspension has been terminated. Any suspension, so long as it is in
effect, shall apply to any registration statement that has been filed
but has not, at the time of such suspension, become effective and to any
registration statement the depositary files after such suspension. Any
such suspension applies only to the ability to designate the date and
time of effectiveness under paragraph (a) of this section and does not
otherwise affect the registration statement.
(2) Any suspension under paragraph (b)(1) of this section becomes
effective when the Commission furnishes written notice thereof to the
depositary. The Commission may issue a suspension if it appears to the
Commission: (i) That any registration statement containing a
designation under this section is incomplete or inaccurate in any
material respect, whether or not such registration has become effective,
or (ii) that the depositary has not complied with any of the conditions
of this section. The depositary may petition the Commission to review
the suspension. The Commission will order a hearing on the matter if a
request for such a hearing is included in the petition.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90 Stat. 57; secs. 12, 13,
15(d), 23(a), 48 Stat. 892, 894, 895, 901; secs. 1, 3, 8, 49 Stat.
1375, 1377, 1379; sec. 203(a), 49 Stat. 704; sec. 202, 68 Stat. 686;
secs. 3, 4, 6, 78 Stat. 565-568, 569, 570-574; secs. 1, 2, 82 Stat.
454; sec. 28(c), 84 Stat. 1435; secs. 1, 2, 84 Stat. 1497; sec.
105(b), 88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat. 117, 118, 119, 155;
sec. 308(b), 90 Stat. 57; secs. 202, 203, 204, 91 Stat. 1494, 1498,
1499, 1500; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 78l, 78m, 78o(d),
78w(a))
(48 FR 12347, Mar. 24, 1983)
17 CFR 230.467 Effectiveness of registration statements and
post-effective amendments thereto made on Forms F-7, F-8, F-9, F-10 and
F-80.
(a) A registration statement on Form F-7, Form F-8 or Form F-80 (
239.37, 239.38 or 239.41 of this chapter), and any amendment thereto,
shall become effective upon filing with the Commission. A registration
statement on Form F-9 or Form F-10 ( 239.39 or 239.40 of this chapter),
and any amendment thereto, relating to an offering being made
contemporaneously in the United States and Canada shall become effective
upon filing with the Commission, unless designated as preliminary
material on the Form.
(b) Where no contemporaneous offering is being made in Canada, a
registrant filing on Form F-9 or Form F-10 may designate on the facing
page of the registration statement, or any amendment thereto, a date and
time for such filing to become effective that is not earlier than seven
calendar days after the date of filing with the Commission, and such
registration statement or amendment shall become effective in accordance
with such designation; provided, however, That such registration
statement or amendment may become effective prior to seven calendar days
after the date of filing with the Commission if the securities
regulatory authority in the review jurisdiction issues a receipt or
notification of clearance with respect thereto before such time elapses,
in which case the registration statement or amendment shall become
effective by order of the Commission as soon as practicable after
receipt of written notification by the Commission from the registrant or
the applicable Canadian securities regulatory authority of the issuance
of such receipt or notification of clearance.
(56 FR 30054, July 1, 1991)
17 CFR 230.467 amendments; withdrawals
17 CFR 230.470 Formal requirements for amendments.
Except for telegraphic amendments filed pursuant to Rule 473 (
230.473), amendments to a registration statement shall be filed under
cover of an appropriate facing sheet, shall be numbered consecutively in
the order in which filed, and shall indicate on the facing sheet the
applicable registration form on which the amendment is prepared and the
file number of the registration statement.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11445, Mar. 16, 1982)
17 CFR 230.471 Signatures to amendments.
Except as provided in Rule 447 ( 230.447) and in Rule 478 ( 230.478),
every amendment to a registration statement shall be signed by the
persons specified in section 6(a) of the Act. At least one copy of
every amendment filed with the Commission shall be signed. Unsigned
copies shall be conformed.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11445, Mar. 16, 1982)
17 CFR 230.472 Filing of amendments; number of copies.
(a) Except for telegraphic amendments filed pursuant to Rule 473 (
230.473), there shall be filed with the Commission three complete,
unmarked copies of every amendment, including exhibits and all other
papers and documents filed as part of the amendment, and eight
additional copies of such amendment at least five of which shall be
marked to indicate clearly and precisely, by underlining or in some
other appropriate manner, the changes effected in the registration
statement by the amendment. Where the amendment to the registration
statement incorporates into the prospectus documents which are required
to be delivered with the prospectus in lieu of prospectus presentation,
the eight additional copies shall be accompanied by eight copies of such
documents. No other exhibits are required to accompany such additional
copies.
(b) Every amendment which relates to a prospectus shall include
copies of the prospectus as amended. Each such copy of the amended
prospectus shall be accompanied by a copy of the cross reference sheet
required by Item 501 of Regulation S-K ( 229.501 of this chapter) or
Rule 481(a) ( 230.481(a)) if the amendment of the prospectus resulted in
any change in the accuracy of the cross reference sheet previously
filed. Notwithstanding the foregoing provisions of this paragraph, only
copies of the changed pages of the prospectus, and the cross reference
sheet if amended, need be included in an amendment filed pursuant to an
undertaking referred to in Item 512(d) of Regulation S-K ( 229.512(d) of
this chapter).
(c) Every amendment of a financial statement which is not included in
the prospectus shall include copies of the financial statement as
amended. Every amendment relating to a certified financial statement
shall include the consent of the certifying accountant to the use of his
certificate in connection with the amended financial statement in the
registration statement or prospectus and to being named as having
certified such financial statement.
(d) Notwithstanding any other provision of this section, if a
registration statement filed on Form S-8 ( 239.16b of this chapter) is
amended, there shall be filed with the Commission three complete,
unmarked copies of every amendment, including exhibits and all other
papers and documents filed as part of the amendment. Three additional,
unmarked copies of such amendments shall be furnished to the Commission.
No exhibits are required to accompany the additional copies of
amendments to registration statements filed on Form S-8.
(47 FR 11445, Mar. 16, 1982, as amended at 55 FR 23924, June 13,
1990)
17 CFR 230.473 Delaying amendments.
(a) An amendment in the following form filed with a registration
statement, or as an amendment to a registration statement which has not
become effective, shall be deemed, for the purpose of section 8(a) of
the Act, to be filed on such date or dates as may be necessary to delay
the effective date of such registration statement (1) until the
registrant shall file a further amendment which specifically states as
provided in paragraph (b) of this section that such registration
statement shall thereafter become effective in accordance with section
8(a) of the Act, or (2) until the registration statement shall become
effective on such date as the Commission, acting pursuant to section
8(a), may determine:
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that
this registration statement shall thereafter become effective in
accordance with section 8(a) of the Securities Act of 1933 or until the
registration statement shall become effective on such date as the
Commission acting pursuant to said section 8(a), may determine.
(b) An amendment which for the purpose of paragraph (a)(1) of this
section specifically states that a registration statement shall
thereafter become effective in accordance with section 8(a) of the Act,
shall be in the following form:
This registration statement shall hereafter become effective in
accordance with the provisions of section 8(a) of the Securities Act of
1933.
(c) An amendment pursuant to paragraph (a) of this section which is
filed with a registration statement shall be set forth on the facing
page thereof following the calculation of the registration fee. Any
such amendment filed after the filing of the registration statement, any
amendment altering the proposed date of public sale of the securities
being registered, or any amendment filed pursuant to paragraph (b) of
this section may be made by telegram or letter. Each such telegraphic
amendment shall be confirmed in writing within a reasonable time by the
filing of a signed copy of the amendment. Such confirmation shall not
be deemed an amendment.
(d) No amendments pursuant to paragraph (a) of this section may be
filed with a registration statement on Form F-7, F-8 or F-80 ( 239.37,
239.38 or 239.41 of this chapter); on Form F-9 or F-10 ( 239.39 or
239.40 of this chapter) relating to an offering being made
contemporaneously in the United States and the registrant's home
jurisdiction; on Form S-8 ( 239.16b of this chapter) ; on Form S-3,
F-2 or F-3 ( 239.13, 239.32 or 239.33 of this chapter) relating to a
dividend or interest reinvestment plan; or on Form S-4 ( 239.25 of this
chapter) complying with General Instruction G of that Form or on Form
F-4 ( 239.34 of this chapter) complying with General Instruction F of
that Form.
(47 FR 11445, Mar. 16, 1982, as amended at 56 FR 30054, 30055, July
1, 1991)
17 CFR 230.474 Date of filing of amendments.
The date on which amendments are actually received by the Commission
shall be the date of filing thereof, if all of the requirements of the
act and the rules with respect to such filing have been complied with.
(16 FR 8737, Aug. 29, 1951)
17 CFR 230.475 Amendment filed with consent of Commission.
An application for the Commission's consent to the filing of an
amendment with the effect provided in section 8(a) of the Act may be
filed before or after or concurrently with the filing of the amendment.
The application shall be signed and shall state fully the grounds upon
which it is made. The Commission's consent shall be deemed to have been
given and the amendment shall be treated as a part of the registration
statement only when the Commission shall after the filing of such
amendment enter an order to that effect.
(Reg. C, 12 FR 4075, June 24, 1947)
17 CFR 230.475a Certain pre-effective amendments on Forms S-3, S-4,
F-2, F-3 and F-4 deemed filed with the consent of Commission.
Amendments to a registration statement on Form S-3, F-2, or F-3 (
239.13, 239.32 or 239.33 of this chapter) relating to a dividend or
interest reinvestment plan; or on Form S-4 ( 239.25 of this chapter)
complying with General Instruction G of that Form or on Form F-4
complying with General instruction F of that Form filed prior to the
effectiveness of such registration statement shall be deemed to have
been filed with a consent of the Commission and shall accordingly be
treated as part of the registration statement.
(50 FR 19001, May 6, 1985, as amended at 55 FR 23924, June 13, 1990)
17 CFR 230.476 Amendment filed pursuant to order of Commission.
An amendment filed prior to the effective date of a registration
statement shall be deemed to have been filed pursuant to an order of the
Commission within the meaning of section 8(a) of the act so as to be
treated as a part of the registration statement only when the Commission
shall after the filing of such amendment enter an order declaring that
it has been filed pursuant to the Commission's previous order.
(Reg. C, 12 FR 4075, June 24, 1947)
17 CFR 230.477 Withdrawal of registration statement or amendment.
(a) Except as provided in paragraph (b) of this section, any
registration statement or any amendment or exhibit thereto may be
withdrawn upon application if the Commission, finding such withdrawal
consistent with the public interest and the protection of investors,
consents thereto.
(b) Any application for withdrawal of a registration statement filed
on Form S-8 ( 239.16b of this chapter); or on Form S-3, F-2, or F-3 (
239.13, 32 or 33 of this chapter), relating to a dividend or interest
reinvestment plan; or on Form S-4 ( 239.25 of this chapter) complying
with General Instruction G of that Form or on Form F-4 ( 239.34 of this
chapter) complying with General Instruction F of that Form and/or any
pre-effective amendment thereto, will be deemed granted upon filing if
such filing is made prior to the effective date.
(c) The application for withdrawal under either paragraphs (a) or (b)
of this section, shall be signed and shall state fully the grounds upon
which made. The fee paid upon the filing of the registration statement
will not be returned to the registrant. The papers comprising the
registration statement or amendment thereto shall not be removed from
the files of the Commission but an order with the date of the granting
of such withdrawal shall be included in the file for the registration
statement in the following manner: ''Withdrawn upon the request of the
registrant, the Commission consenting thereto.''
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11445, Mar. 16, 1982, as amended at 47 FR 54770, Dec. 6, 1982;
50 FR 19001, May 6, 1985)
17 CFR 230.478 Powers to amend or withdraw registration statement.
All persons signing a registration statement shall be deemed, in the
absence of a statement to the contrary, to confer upon the registrant,
and upon the agent for service named in the registration statement, the
following powers:
(a) A power to amend the registration statement (1) by filing an
amendment as provided in 230.473; (2) by filing any written consent;
(3) by correcting typographical errors; (4) by reducing the amount of
securities registered, pursuant to an undertaking contained in the
registration statement.
(b) A power to make application pursuant to 230.475 for the
Commission's consent to the filing of an amendment.
(c) A power to withdraw the registration statement or any amendment
or exhibit thereto.
(d) A power to consent to the entry of an order under section 8(b) of
the act, waiving notice and hearing, such order being entered without
prejudice to the right of the registrant thereafter to have the order
vacated upon a showing to the Commission that the registration statement
as amended is no longer incomplete or inaccurate on its face in any
material respect.
(Reg. C, 12 FR 4076, June 24, 1947, as amended at 16 FR 8737, Aug.
29, 1951)
17 CFR 230.479 Procedure with respect to abandoned registration
statements and post-effective amendments.
When a registration statement, or a post-effective amendment to such
a statement, has been on file with the Commission for a period of nine
months and has not become effective the Commission may, in its
discretion, proceed in the following manner to determine whether such
registration statement or amendment has been abandoned by the
registrant. If the registration statement has been amended, otherwise
than for the purpose of delaying the effective date thereof, or if the
post-effective amendment has been amended, the nine-month period shall
be computed from the date of the latest such amendment.
(a) A notice will be sent to the registrant, and to the agent for
service named in the registration statement, by registered or certified
mail, return receipt requested, addressed to the most recent addresses
for the registrant and the agent for service reflected in the
registration statement. Such notice will inform the registrant and the
agent for service that the registration statement or amendment is out of
date and must be either amended to comply with the applicable
requirements of the Act and the rules and regulations thereunder or be
withdrawn within 30 days after the date of such notice.
(b) If the registrant or the agent for service fails to respond to
such notice by filing a substantive amendment or withdrawing the
registration statement and does not furnish a satisfactory explanation
as to why it has not done so within such 30 days, the Commission may,
where consistent with the public interest and the protection of
investors, enter an order declaring the registration statement or
amendment abandoned.
(c) When such an order is entered by the Commission the papers
comprising the registration statement or amendment will not be removed
from the files of the Commission but an order shall be included in the
file for the registration statement in the following manner: ''Declared
abandoned by order dated ------------ .''
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11446, Mar. 16, 1982)
17 CFR 230.479 investment companies; business development companies
Authority: Sections 230.480 to 230.485 issued under secs. 6, 7, 8,
10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209, 48 Stat. 906,
908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685; sec. 308(a)(2),
90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48 Stat. 882, 892,
894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704, 1375, 1377, 1379;
sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat. 569, 570-574;
secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3, 4, 5, 84 Stat.
1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9, 10, 89 Stat.
117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat. 155; secs.
202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49 Stat. 833;
sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C. 77f, 77g,
77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 79t(a),
77sss(a), 80a-37, unless otherwise noted.
Source: Sections 230.480 to 230.485 appear at 47 FR 11446, Mar. 16,
1982, unless otherwise noted.
Note: The rules which comprise this section of Regulation C (
230.480 to 230.489) are applicable only to investment companies and
business development companies, except 230.489, which applies to
certain entities excepted from the definition of investment company by
rules under the Investment Company Act of 1940. The rules comprising
the rest of Regulation C ( 230.400 to 230.479 and 230.490 to 230.494)
are, unless the context specifically indicates otherwise, also
applicable to investment companies and business development companies.
See 230.400.
17 CFR 230.480 Title of securities.
If a registration statement is prepared on a form available solely to
investment companies registered under the Investment Company Act of
1940, or a business development company which is selling or proposing to
sell its securities pursuant to a registration statement which has been
filed under the Act, wherever the title of securities is required to be
stated there shall be given such information as will indicate the type
and general character of the securities, including the following:
(a) In the case of shares, the par or stated value, if any; the rate
of dividends, if fixed, and whether cumulative or non-cumulative; a
brief indication of the preference, if any; and, if convertible, a
statement to that effect.
(b) In the case of funded debt, the rate of interest; the date of
maturity, or, if the issue matures serially, a brief indication of the
serial maturities, such as ''maturing serially from 1950 to 1960''; if
the payment of principal or interest is contingent, an appropriate
indication of such contingency; a brief indication of the priority of
the issue; and, if convertible, a statement to that effect.
(c) In the case of any other kind of security, appropriate
information of comparable character.
17 CFR 230.481 Information required in prospectus.
If a registration statement is prepared on a form available solely to
investment companies registered under the Investment Company Act of
1940, or a company that has elected to be regulated as a business
development company under sections 55 through 65 of that Act which is
selling or proposing to sell its securities pursuant to a registration
statement which has been filed under the Act, the following provisions
apply:
(a) The facing page of every registration statement shall set forth
the approximate date of proposed sale to the public. Every registration
statement shall include, immediately following the facing page, a cross
reference sheet showing the location in the prospectus of the
information required to be included in the prospectus in response to the
items of the form. If any such item is inapplicable, or the answer
thereto is in the negative and is omitted from the prospectus, a
statement to that effect shall be made in the cross reference sheet.
(b) The outside front cover page of any prospectus relating to such
registration statement shall contain:
(1) The following statement in capital letters printed in boldface
roman type at least as large as ten-point modern type and at least two
points leaded:
''THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS, ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE''; and
(2) In the case of any prospectus to be used before the effective
date of the registration statement (or, in the case of any prospectus
that omits information as permitted by Rule 430A under the Securities
Act ( 230.430A of this chapter), prior to the determination of the
initial public offering price), in red ink, the caption ''Subject to
Completion,'' the date of its issuance, and the following statement
printed in type as large as that generally used in the body of the
prospectus:
Information contained herein is subject to completion or amendment.
A registration statement relating to these securities has been filed
with the Securities and Exchange Commission. These securities may not
be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of these securities in any State in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.
(c) The forepart, or the outside back cover, of any prospectus
relating to such registration statement shall include a reasonably
detailed table of contents showing the subject matter of the various
sections or subdivisions of the prospectus and the page number on which
each section or subdivision begins.
(d) The inside front cover page of any prospectus relating to such
registration statement shall contain:
(1) If the registrant or any of the underwriters knows or has reason
to believe that there is an intention to over allot or that the price of
any security may be stabilized to facilitate the offering of the
registered securities, a statement in substantially the following form,
subject to appropriate modification where circumstances require. Such
statement shall be in capital letters, printed in boldface roman type as
least as large as ten-point modern type and at least two points leaded:
''IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT
OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF
(IDENTIFY EACH CLASS OF SECURITIES IN WHICH SUCH TRANSACTIONS MAY BE
EFFECTED) AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET SUCH TRANSACTIONS MAY BE EFFECTED ON (IDENTIFY EACH EXCHANGE
ON WHICH STABILIZING TRANSACTIONS MAY BE EFFECTED. IF NONE, OMIT THIS
SENTENCE.) SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME''; and
(2) If the stabilizing began prior to the effective date of the
registration statement, disclosure of the amount of securities bought,
the prices at which they were bought and the period within which they
were bought. In the event that Rule 430A ( 230.430A of this chapter) is
used, the prospectus filed pursuant to Rule 497(h) ( 230.497(h) of this
chapter) or included in a post-effective amendment must include
information as to stabilizing transactions effected prior to the
determination of the public offering price set forth in such prospectus.
(e) If the securities being registered are to be offered to existing
security holders pursuant to warrants or rights and any securities not
taken by security holders are to be reoffered to the public after
expiration of the rights offering period, there shall be set forth in
the inside front cover, or elsewhere, in the prospectus used in
connection with the reoffering
(1) The amount of securities bought in stabilization activities
during the rights offering period and the price, or range of prices, at
which such securities were bought,
(2) The amount of the offered securities subscribed for during such
period,
(3) The amount of the offered securities subscribed for by the
underwriters during such period,
(4) The amount of the offered securities sold during such period by
the underwriters and the price, or range of prices, at which such
securities were sold, and
(5) The amount of the offered securities to be reoffered to the
public and the public offering price.
(f)(1) The inside front cover page or the back cover page of any
prospectus relating to such registration statement shall contain the
statement in paragraph (f)(2) of this section, inserting the expiration
date of the period prescribed by section 4(3) of the Act and Rule 174
(17 CFR 230.174) thereunder, except that this statement need not be
included if, pursuant to Rule 174, dealers are not required to deliver a
prospectus, or if the exemption provided by section 4(3) of the Act is
not applicable because of the provisions of section 24(d) of the
Investment Company Act of 1940. If such expiration date is not known on
the effective date of the registration statement, it shall be included
in the prospectus copies of which are required to be filed pursuant to
Rule 424(b) ( 230.424(b)).
(2) The following statement required by paragraph (f)(1) of this
section shall be printed in boldface type or italic type at least as
large as eight point Modern type and at least two points leaded:
Until ------ (insert date) all dealers effecting transactions in the
registered securities, whether or not participating in this
distribution, may be required to deliver a prospectus. This is in
addition to the obligation of dealers to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
(47 FR 11401, Mar. 16, 1982, as amended at 52 FR 21262, June 5, 1987;
52 FR 30146, Aug. 13, 1987)
17 CFR 230.482 Advertising by an investment company as satisfying
requirements of section 10.
(a) An advertisement, other than one excepted from the definition of
prospectus by section 2(10) of the Act and rule 134 thereunder, shall be
deemed to be a prospectus under section 10(b) of the Act for the purpose
of section 5(b)(1) of the Act if:
(1) It is with respect to an investment company registered under the
Investment Company Act of 1940 (1940 Act), or a business development
company which is selling or proposing to sell its securities pursuant to
a registration statement which has been filed under the Act,
(2) It contains only information the substance of which is included
in the section 10(a) prospectus,
(3) It states, conspicuously, from whom a prospectus containing more
complete information may be obtained and that an investor should read
that prospectus carefully before investing,
Note: The fact that the statements included in the advertisement are
included in the section 10(a) prospectus does not relieve the issuer,
underwriter or dealer of the obligation to ensure that the advertisement
is not false or misleading.
(4) It contains the statement required by Rule 481(b)(2) under the
Securities Act ( 230.481(b)(2) of this chapter) when used prior to
effectiveness of the company's registration statement or, in the case of
a registration statement that becomes effective omitting certain
information from the prospectus contained in the registration statement
in reliance upon Rule 430A under the Securities Act ( 230.430A of this
chapter), when used prior to the determination of the public offering
price,
(5) It does not contain and is not accompanied by any application by
which a prospective investor may invest in the investment company;
Provided, however, That a prospectus meeting the requirements of section
10(a) of the Act by which a unit investment trust offers periodic
payment plan certificates may contain a contract application although
the prospectus includes another prospectus that, pursuant to this rule,
omits certain information required by section 10(a) of the Act regarding
investment companies in which the unit investment trust invests, and
(6) In the case of an advertisement containing performance data of an
open-end management investment company or a separate account registered
under the 1940 Act as a unit investment trust offering variable annuity
contracts (trust account), it includes a legend disclosing that the
performance data quoted represents past performance and that the
investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than
their original cost; Provided, however, That an advertisement may omit
legend disclosure pertaining to the fluctuation of the principal value
of an investment in a money market fund. In addition, if a sales load
or any other nonrecurring fee is charged, the advertisement must
disclose the maximum amount of the load or fee; if the sales load or
fee is not reflected, the advertisement must also disclose that the
performance data does not reflect its deduction, and that, if reflected,
the load or fees would reduce the performance quoted;
(7) In the case of an investment company that holds itself out to be
a ''money market'' fund, it includes a prominent statement that (i) an
investment in the fund is neither insured nor guaranteed by the U.S.
Government and (ii) there can be no assurance that the fund will be able
to maintain a stable net asset value of $1.00 per share (or, if other
than $1.00, the applicable net asset value); provided, however, that a
money market fund not holding itself out as maintaining a stable net
asset value may omit the portion of the statement required by paragraph
(a)(7)(ii) of this section.
Note: All advertisements made pursuant to this rule are subject to
Rule 420 (17 CFR 230.420) that requires all of the printed text of
omitting prospectus advertisements to be in at least 8-point type.
(b) An advertisement made pursuant to paragraph (a) of this section
need not contain the statement required by Rule 481(b)(1) (
230.481(b)(1)).
(c) An advertisement made pursuant to paragraph (a) of this section
need not be filed as part of the registration statement filed under the
Act.
Note: These advertisements, unless filed with the NASD, are required
to be filed in accordance with the requirements of Rule 497 (17 CFR
230.497).
(d) In the case of a ''money market'' fund, any quotation of the
money market fund's yield contained in an advertisement shall be:
(1) A quotation of current yield based on the method of computation
prescribed in Form N-1A (set forth in 239.15A and 274.11A of this
chapter), Form N-3 (set forth in 239.17a and 274.11b of this chapter),
or Form N-4 (set forth in 239.17b and 274.11c of this chapter) and
identifying the length of and the date of the last day in the base
period used in computing that quotation; or
(2) A quotation of current yield described in paragraph (d)(1) of
this section and a corresponding quotation of effective yield based on
the method of computation prescribed in Forms N-1A, N-3, or N-4;
Provided, That when both a quotation of current yield and effective
yield are used in the same advertisement, each quotation shall relate to
an identical base period and shall be given equal prominence.
(e) In the case of an open-end management investment company or a
trust account (other than a money market fund referred to in paragraph
(d) of this section), any quotation of the company's performance
contained in an advertisement shall be limited to quotations of:
(1) A current yield that --
(i) Is based on the methods of computation prescribed in Form N-1A,
N-3, or N-4;
(ii) Is accompanied by quotations of total return as provided for in
paragraph (e)(3) of this section;
(iii) Is set out in no greater prominence than the required
quotations of total return; and
(iv) Identifies the length of and the date of the last day in the
base period used in computing the quotation.
(2) A tax equivalent yield that --
(i) Is based on the methods of computation prescribed in Form N-1A,
N-3, or N-4;
(ii) Is accompanied by quotations of yield as provided for in
paragraph (e)(1) of this section and total return as provided for in
paragraph (e)(3) of this section;
(iii) Is set out in no greater prominence than the required
quotations of yield and total return;
(iv) Relates to the same base period as the required quotation of
yield; and
(v) Identifies the length of and the date of the last day in the base
period used in computing the quotation.
(3) Average annual total return for one, five, and ten year periods;
Provided, That if the company's registration statement under the
Securities Act of 1933 (15 U.S.C. 77A et seq.) has been in effect for
less than one, five, or ten years, the time period during which the
registration statement was in effect is substituted for the period(s)
otherwise prescribed; and Provided further, That such quotations --
(i) Are based on the methods of computation prescribed in Form N-1A,
N-3, or N-4;
(ii) Are current to the most recent calendar quarter ended prior to
the submission of the advertisement for publication;
(iii) Are set out with equal prominence; and
(iv) Identify the length of and the last day of the one, five, and
ten year periods; and
(4) Any other historical measure of company performance (not subject
to any prescribed method of computation) if such measurement --
(i) Reflects all elements of return;
(ii) Is accompanied by quotations of total return as provided for in
paragraph (e)(3) of this section;
(iii) Is set out in no greater prominence than the required
quotations of total return; and
(iv) Identifies the length of and the last day of the period for
which performance is measured.
(f) All performance data contained in any advertisement must be as of
the most recent practicable date considering the type of investment
company and the media through which the data will be conveyed;
Provided, however, That any advertisement containing total return
quotations shall be considered to have complied with this provision if
the total return quotations are current to the most recent calendar
quarter ended prior to the submission of the advertisement for
publication.
(47 FR 11446, Mar. 16, 1982, as amended at 48 FR 55725, Dec. 15,
1983; 52 FR 21262, June 5, 1987; 53 FR 3879, Feb. 10, 1988; 53 FR
9768, Mar. 25, 1988; 56 FR 8124, Feb. 27, 1991)
17 CFR 230.483 Exhibits for certain registration statements.
If a registration statement is prepared on a form available solely to
investment companies registered under the Investment Company Act of
1940, or a business development company which is selling or proposing to
sell its securities pursuant to a registration statement which has been
filed under the Act, the following provisions apply:
(a) Such registration statement shall contain an exhibit index, which
should immediately precede the exhibits filed with such registration
statement. The exhibit index shall indicate by handwritten, typed,
printed or other legible form of notation in the manually signed
original registration statement the page number in the sequential
numbering system where such exhibit can be found. Where exhibits are
incorporated by reference, this fact shall be noted in the exhibit index
referred to in the preceding sentence. Further, the first page of the
manually signed registration statement shall list the page in the filing
where the exhibit index is located.
(b) If any name is signed to the registration statement pursuant to a
power of attorney, copies of such powers of attorney shall be filed as
an exhibit to the registration statement. In addition, if the name of
any officer signing on behalf of the registrant, or attesting the
registrant's seal, is signed pursuant to a power of attorney, certified
copies of a resolution of the registrant's board of directors
authorizing such signature shall also be filed as an exhibit to the
registration statement.
(c) All written consents are required to be filed as an exhibit to
the registration statement, together with a list thereof. Such consents
shall be dated and manually signed. Where the consent of an expert or
counsel is contained in his report or opinion, a reference shall be made
in the list to the report or opinion containing the consent.
(d) The registrant:
(1) May file such exhibits as it may desire in addition to those
required by the appropriate form. Such exhibits shall be so marked as
to indicate clearly the subject matters to which they refer;
(2) In any case where two or more indentures, contracts, frachises,
or other documents required to be filed as exhibits are substantially
identical in all material respects except as to the parties thereto, the
dates of execution, or other details, need file a copy of only one of
such documents, with a schedule identifying the other documents omitted
and setting forth the material details in which such documents differ
from the document of which a copy is filed. The Commission may at any
time in its discretion require filing of copies of any documents so
omitted; and
(3) If an exhibit to a registration statement (other than an opinion
or consent), filed in preliminary form, has been changed only (i) to
insert information as to interest, dividend or conversion rates,
redemption or conversion prices, purchase or offering prices,
underwriters' or dealers' commission, names, addresses or participation
of underwriters or similar matters, which information appears elsewhere
in an amendment to the registration statement, or (ii) to correct
typographical errors, insert signatures or make other similar immaterial
changes, then, notwithstanding any contrary requirement of any rule or
form, need not refile such exhibit as so amended; provided the
registrant states in the amendment to the registration statement the
basis provided by this rule for not refiling such exhibit. Any such
incomplete exhibit may not, however, be incorporated by reference in any
subsequent filing under any Act administered by the Commission.
17 CFR 230.484 Undertaking required in certain registration statements.
If a registration statement is prepared on a form available solely to
investment companies registered under the investment Company Act of
1940, or a business development company which is selling or proposing to
sell its securities pursuant to a registration statement which has been
filed under the Act, if
(a) Any acceleration is requested of the effective date of the
registration statement pursuant to Rule 461 ( 230.461), and
(b)(1) Any provision or arrangement exists whereby the registrant may
indemnify a director, officer or controlling person of the registrant
against liabilities arising under the Act, or
(2) The underwriting agreement contains provisions by which
indemnification against such liabilities is given by the registrant to
the underwriter or controlling persons of the underwriter and the
director, officer or controlling person of the registrant is such an
underwriter or controlling person thereof or a member of any firm which
is an underwriter, and
(3) The benefits of such indemnification are not waived by such
persons; the registration statement shall include a brief description
of the indemnification provisions and an undertaking in substantially
the following form:
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
17 CFR 230.485 Effective date of post-effective amendments filed by
certain registered investment companies.
(a) Except as otherwise provided in this section, a post-effective
amendment to a registration statement filed by a registered open-end
management investment company or unit investment trust, other than a
registered separate account as defined in section 2(a)(37) of the
Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(37)), shall become
effective on the sixtieth day after the filing thereof, or such later
date designated by the registrant on the facing sheet of the amendment,
which date shall not be later than eighty days after the date on which
the amendment is filed, Provided, That the Commission, having due regard
to the public interest and the protection of investors, may declare an
amendment filed pursuant to this paragraph effective on an earlier date.
(b) Except as otherwise provided in this section, a post-effective
amendment to a registration statement filed by a registered open-end
management investment company or unit investment trust, other than a
registered separate account as defined in section 2(a)(37) of the
Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(37)), shall become
effective on the date upon which it is filed with the Commission, or
such later date designated by the registrant on the facing sheet of the
amendment, which date shall be not later than twenty days after the date
on which the amendment is filed, provided that the following conditions
are met:
(1) It is filed for no purpose other than one or more of the
following:
(i) Increasing the number or amount of securities proposed to be
offered pursuant to section 24(e)(1) of the Investment Company Act of
1940 (15 U.S.C. 80a-24(e)(1));
(ii) Registering an indefinite number or amount of securities
pursuant to section 24(f) of the Investment Company Act of 1940 (15
U.S.C. 80a-24(f)) and Rule 24f-2 thereunder (17 CFR 270.24f-2);
(iii) Bringing the financial statements and other information up to
date pursuant to section 10(a)(3) of the Act, and in conjunction
therewith, making such other non-material changes as the registrant
deems appropriate; and
(iv) Complying with an undertaking to file an amendment containing
financial statements, which may be unaudited, within four to six months
after the effective date of the registrant's registration statement
under the Securities Act of 1933 (15 U.S.C. 77a et seq.).
(2) Any prospectus or Statement of Additional Information filed as a
part of such amendment does not include disclosure relating to any of
the following events to the extent that such events have occurred since
the effective date of the registrant's registration statement or the
effective date of its most recent post-effective amendment thereto which
included a prospectus or Statement of Additional Information, whichever
is later, unless such events are disclosed in a post-effective amendment
filed pursuant to paragraph (a) of this section which has not yet become
effective:
(i) Termination of an investment advisory contract;
(ii) A change in the registrant's investment objectives, in any of
its policies listed in section 8(b)(1) of the Investment Company Act of
1940 (15 U.S.C. 80a-8(b)(1)), or in any other investment policy which
the registrant deems fundamental or which, pursuant to section 13 of the
Investment Company Act of 1940 (15 U.S.C. 80a-13), is changeable only by
shareholder vote;
(iii) Suspension of sales or redemptions of securities issued by the
registrant;
(iv) Resignation of any of the registrant's directors, unless the
registrant represents that such director did not resign due to
disagreement with the registrant on any matter relating to the
registrant's operations, policies or practices;
(v) A change in the registrant's independent public accountant,
unless the registrant represents that there were no disagreements with
the former accountant on any matter of accounting principles or
practices or financial statement disclosures; or
(vi) If registrant is a unit investment trust the assets of which do
not consist solely of securities issued by a management investment
company, any substitution by the depositor or trustee of the trust of
securities held by the trust with a value of 5% or more of the trust's
net assets; and
(3) The registrant represents that no material event requiring
disclosure in the prospectus, other than one listed in paragraph (b)(1)
of this section, has occurred since the latest of the following three
dates:
(i) The effective date of the registrant's registration statement;
(ii) The effective date of its most recent post-effective amendment
to its registration statement which included a prospectus; or
(iii) The filing date of a post-effective amendment filed pursuant to
paragraph (a) of this section which has not yet become effective; and
(4) Such amendment recites on the facing sheet thereof that the
registrant proposes that the amendment will become effective pursuant to
paragraph (b) of this section.
(c) No amendment shall become effective pursuant to paragraph (a) of
this section if, prior to the effective date of such amendment, it
should appear to the Commission that the amendment may be incomplete or
inaccurate in any material respect, and the Commission furnishes to the
registrant written notice that the effective date of the amendment is to
be suspended. Following such action by the Commission, the registrant
may file with the Commission at any time a petition for review of the
suspension. The Commission will order a hearing on the matter if a
request for such a hearing is included in the petition. If the
Commission has suspended the effective date of an amendment, the
amendment shall become effective on such date as the Commission may
determine, having due regard to the public interest and the protection
of investors.
(d)(1) Except as provided in paragraph (d)(2) of this section, a
post-effective amendment which includes a prospectus shall not become
effective pursuant to paragraph (a) of this section if a subsequent
post-effective amendment relating to such prospectus is filed before
such amendment becomes effective.
(2) A post-effective amendment which includes a prospectus shall
become effective pursuant to paragraph (a) of this section
notwithstanding the filing of a subsequent post-effective amendment
relating to such prospectus. Provided, That such subsequent amendment
is filed pursuant to paragraph (b) of this section. And provided
further, That such subsequent amendment designates as its effective date
the date on which the prior post-effective amendment shall become
effective pursuant to paragraph (a). If another posteffective amendment
relating to the same prospectus is filed pursuant to paragraph (a) of
this section before the prior amendments filed pursuant to paragraphs
(a) and (b) of this section have become effective, neither the prior
amendment filed pursuant to paragraph (a) of this section or the
amendment filed pursuant to paragraph (b) of this section shall become
effective pursuant to this section.
(e) The representations of the registrant referred to in paragraphs
(b)(2) (iv), (v) and (b)(3) of this section shall be made by
certification on the signature page of the posteffective amendment that
such amendment meets all of the requirements for effectiveness pursuant
to paragraph (b) of this section. If counsel prepared or reviewed the
posteffective amendment filed pursuant to paragraph (b) of this section,
such counsel shall furnish to the Commission at the time the amendment
is filed a written representation that the amendment does not contain
disclosures which would render if ineligible to become effective
pursuant to paragraph (b) of this section.
(15 U.S.C. 77g, 77h, 77s, 78d-1, 78d-2, 80a-8, 80a-37; Securities
Act of 1933)
(47 FR 11446, Mar. 16, 1982, as amended at 47 FR 22359, May 24, 1982;
49 FR 37938, Aug. 22, 1983; 49 FR 20280, May 14, 1984)
17 CFR 230.486 Effective date of post-effective amendments filed by
registered separate accounts of insurance companies.
(a) Except as otherwise provided in this section, a post-effective
amendment to a registration statement for an offering of securities by a
registered separate account as defined in section 2(a)(37) of the
Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(37)) shall become
effective on the sixtieth day after the filing thereof, or such later
date designated by the registrant on the facing sheet of the amendment
which date shall not be later than eighty days after the date on which
the amendment is filed, Provided, That the Commission, having due regard
to the public interest and the protection of investors, may declare an
amendment filed pursuant to this paragraph effective on an earlier date.
(b) Except as otherwise provided in this section, a post-effective
amendment to a registration statement for an offering of securities by a
registered separate account as defined in section 2(a)(37) of the
Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(37)) shall become
effective on the date upon which it is filed with the Commission, or
such later date designated by the registrant on the facing sheet of the
amendment, which date shall not be later than twenty days after the date
on which the amendment is filed, Provided, That the following conditions
are met:
(1) It is filed for no purpose other than one or more of the
following:
(i) Increasing the number or amount of securities proposed to be
offered pursuant to section 24(e)(1) of the Investment Company Act of
1940 (15 U.S.C. 80-24(e)(1));
(ii) Registering an indefinite number or amount of securities
pursuant to section 24(f) of the Investment Company Act of 1940 (15
U.S.C. 80a-24(f)) and Rule 24f-2 thereunder (17 CFR 270.24f-2);
(iii) Bringing the financial statements and other information up to
date pursuant to section 10(a)(3) of the Act (15 U.S.C. 77j(a)(3)) and,
in conjunction therewith, making such other nonmaterial changes as the
registrant deems appropriate; and
(iv) Complying with an undertaking to file an amendment containing
financial statements, which may be unaudited, within four to six months
after the effective date of the registrant's registration statement
under the Securities Act of 1933 (17 U.S.C. 77a et seq.).
(2) Any prospectus or Statement of Additional Information filed as a
part of such amendment does not include disclosure relating to any of
the following events to the extent that such events have occurred since
the effective date of the registrant's registration statement or the
effective date of its most recent post effective amendment thereto which
included a prospectus or Statement of Additional Information, whichever
is later, unless such events are disclosed in a post-effective amendment
filed pursuant to paragraph (a) of this section which has not yet become
effective:
(i) Termination of an investment advisory contract;
(ii) A change in the registrant's investment objectives, in any of
its policies listed in section 8(b)(1) of the Investment Company Act of
1940 (15 U.S.C. 80a-8(b)(1)), or in any other investment policy which
the registrant deems fundamental or which, pursuant to section 13 of the
Investment Company Act of 1940 (15 U.S.C. 80a-13), is changeable only be
shareholder vote;
(iii) Suspension of sales or redemptions of securities issued by the
registered separate account;
(iv) Resignation of any of the registered separate account's or
insurance company's directors, unless the registrant represents that
such director did not resign due to disagreement with the registrant on
any matter relating to the separate account's operations, policies or
practices;
(v) A change in the registered separate account's or insurance
company's independent public accountant, unless the registrant
represents that there were no disagreements with the former accountant
on any matter of accounting principles or practices or financial
statement disclosures pertaining to the separate account;
(vi) If the separate account is organized as a unit investment trust,
any substitution of securities held by the trust; or
(vii) Any change, including, but not limited to, a change in the
operations of the separate account or in the rights of security holders,
that requires the registrant to apply for exemptive relief under the
Investment Company Act of 1940, or an event for which approval by the
Commission is required under sections 11 or 26(b) of the Investment
Company Act of 1940 (15 U.S.C. 80a-11, 26(b));
(3) The registrant represents that no material event requiring
disclosure in the prospectus, other than one listed in paragraph (b)(1)
of this section, has occurred since the latest of three dates: (i) The
effective date of the separate account's registration statement; (ii)
the effective date of its most recent post effective amendment to its
registration statement which included a prospectus; or (iii) the filing
date of a post-effective amendment filed pursuant to paragraph (a) of
this section which has not yet become effective;
(4) Such amendment recites on the facing sheet thereof that the
registrant proposes that the amendment will become effective pursuant to
paragraph (b) of this section.
(c) No amendment shall become effective pursuant to paragraph (a) of
this section if, prior to the effective date of such amendment, it
should appear to the Commission that the amendment may be incomplete or
inaccurate in any material respect, and the Commission furnishes to the
registrant written notice that the effective date of the amendment is to
be suspended. Following such action by the Commission, the registrant
may file with the Commission at any time a petition for review of the
suspension. The Commission will order a hearing on the matter if a
request for such a hearing is included in the petition. If the
Commission has suspended the effective date of an amendment, the
amendment shall become effective on such date as the Commission may
determine, having due regard to the public interest and the protection
of investors.
(d)(1) Except as provided in paragraph (d)(2) of this section a
post-effective amendment which includes a prospectus shall not become
effective pursuant to paragraph (a) of this section if a subsequent
post-effective amendment relating to such prospectus is filed before
such amendment becomes effective.
(2) A post-effective amendment which includes a prospectus shall
become effective pursuant to paragraph (a) of this section
notwithstanding the filing of a subsequent post-effective amendment
relating to such prospectus. Provided, That such subsequent amendment
is filed pursuant to paragraph (b) of this section. And further
provided, That such subsequent amendment designates as its effective
date the date on which the prior post-effective amendment shall become
effective pursuant to paragraph (a) of this section. If another
post-effective amendment relating to the same prospectus is filed
pursuant to paragraph (a) of this section before the prior amendments
filed pursuant to paragraphs (a) and (b) of this section have become
effective, neither the prior amendment filed pursuant to paragraph (a)
of this section nor the amendment filed pursuant to paragraph (b) of
this section shall become effective pursuant to this section.
(e) The representations of the registrant referred to in paragraphs
(b)(2)(iv), (b)(2)(v) and (b)(3) of this section shall be made by
certification on the signature page of the post-effective amendment that
such amendment meets all of the requirements for effectiveness pursuant
to paragraph (b) of this section. If counsel prepared or reviewed the
post-effective amendment filed pursuant to paragraph (b) of this
section, such counsel shall furnish to the Commission at the time the
amendment is filed a written representation that the amendment does not
contain disclosures which would render it ineligible to become effective
pursuant to paragraph (b).
(f) For purposes of this section, a post-effective amendment to a
registration statement for an offering of securities by a registered
separate account as defined in section 2(a)(37) of the Investment
Company Act of 1940 (15 U.S.C. 80a-2(a)(37)), as that term is used in
paragraphs (a) and (b) of this section and as such amendments are
referred to in paragraphs (c) and (d) of this section, shall include a
post-effective amendment to a registration statement for an offering of
securities by an insurance company funded through a separate account, as
defined in section 2(a)(37) of the Investment Company Act of 1940 (15
U.S.C. 80a-2(a)(37)), where the separate account need not register under
the Investment Company Act of 1940 pursuant to section 3(c)(11) thereof
(15 U.S.C. 80a-3(c)(11)).
(15 U.S.C. 77g, 77h, 77s, 78d-1, 78d-2, 80a-8, 80a-37)
(47 FR 22358, May 24, 1982, as amended at 49 FR 20280, May 14, 1984;
50 FR 26159, June 25, 1985)
17 CFR 230.487 Effectiveness of registration statements filed by
certain unit investment trusts.
(a)(1) A unit investment trust registered under the Investment
Company Act of 1940 that files a registration statement pursuant to the
Act in connection with the offering of the securities of a series of the
unit investment trust, except the first series of such trust, may
designate a date and time for such registration statement to become
effective. If the registrant complies with the conditions set forth in
paragraph (b) of this section, the registration statement shall become
effective in accordance with such designation.
(2) The registrant may designate the date and time of effectiveness
in the registration statement or in any pre-effective amendment thereto.
A pre-effective amendment to a registration statement with respect to
which such a designation is properly made shall be deemed to have been
filed with the consent of the Commission and shall accordingly be
treated as part of the registration statement.
(b) Availability of effectiveness of a registration statement in
accordance with paragraph (a) of this section is conditioned upon
compliance with the following:
(1) The registrant is not engaged in the business of investing in
securities issued by one or more open-end management investment
companies;
(2) The designation provided for in paragraph (a) of this section is
set forth on the facing sheet of such registration statement or a
pre-effective amendment thereto;
(3) The registrant identifies one or more previous series of the
trust for which the effective date of the registration statement was
determined by the Commission or its staff, and makes the following
representations:
(i) That the portfolio securities deposited in the series with
respect to which the registration statement or pre-effective amendment
is being filed do not differ materially in type or quality from those
deposited in such previous series identified by the registrant; and
(ii) That, except to the extent necessary to identify the specific
portfolio securities deposited in, and to provide essential financial
information for, the series with respect to which the registration
statement or pre-effective amendment thereto is being filed, the
registration statement or pre-effective amendment thereto does not
contain disclosures that differ in any material respect from those
contained in the registration statement of such previous series
identified by the registrant;
(4) The registrant represents that it has complied with rule 460
under the Act (17 CFR 230.460);
(5) The identification and representations provided for in paragraphs
(b)(3) and (b)(4) of this section are made on the signature page of the
registration statement or a pre-effective amendment thereto; and
(6) If counsel prepared or reviewed such registration statement or a
pre-effective amendment thereto, such counsel shall furnish to the
Commission at the time the registration statement or pre-effective
amendment thereto is filed a written representation that such
registration statement or pre-effective amendment does not contain
disclosures which would render such registration statement ineligible to
become effective pursuant to paragraph (a) of this section.
(c)(1) The Commission may, in the manner and under the circumstances
set forth in paragraph (c)(2) of this section, suspend the ability of a
unit investment trust to designate the date and time of effectiveness of
series of such trust, and such suspension shall remain in effect until
the Commission furnishes written notice to the sponsor of the unit
investment trust that the suspension has been terminated. Any
suspension, so long as it is in effect, shall apply to any registration
statement that has been filed but has not, at the time of such
suspension, become effective, and to any registration statement with
respect to any series of such trust that may be filed after such
suspension. Any such suspension shall apply only to the ability to
designate the date and time of effectiveness pursuant to paragraph (a)
hereof and shall not otherwise affect any registration statement.
(2) Any suspension pursuant to paragraph (c)(1) of this section shall
become effective at such time as the Commission furnishes written notice
thereof to the sponsor of the unit investment trust. The Commission may
issue such a suspension if it appears to the Commission that any
registration statement containing a designation pursuant to this section
is incomplete or inaccurate in any material respect, whether or not such
registration statement has become effective, or that the registrant has
not complied with the conditions of this section. Following such action
by the Commission, the registrant may file with the Commission at any
time a petition for review of the suspension. The Commission will order
a hearing on the matter if a request for such a hearing is included in
the petition.
(47 FR 20294, May 12, 1982)
17 CFR 230.488 Effective date of registration statements relating to
securities to be issued in certain business combination transactions.
(a) A registration statement filed on Form N-14 by a registered
open-end management investment company for the purpose of registering
securities to be issued in an exchange offer or other business
combination transaction pursuant to Rule 145 under the Securities Act of
1933 (15 U.S.C. 77a et seq.) shall become effective on the thirtieth day
after the date upon which it is filed with the Commission, or such later
date designated by the registrant on the facing sheet of the
registration statement, which date shall be not later than fifty days
after the date on which the registration statement is filed, unless the
Commission having due regard to the public interest and the protection
of investors declares such amendment effective on an earlier date,
provided the following conditions are met:
(1) Any prospectus filed as a part of the registration statement does
not include disclosure relating to any other proposal to be acted on at
a meeting of the shareholders of either company other than proposals
related to an exchange offer, or a business combination transaction
pursuant to Rule 145(a), and any other proposal relating to:
(i) Uncontested election of directors,
(ii) Ratification of the selection of accountants,
(iii) The continuation of a current advisory contract,
(iv) Increases in the number or amount of shares authorized to be
issued by the registrant; and
(v) Continuation of any current contract relating to the distribution
of shares issued by the registrant; and
(2) The registration statement recites on the facing sheet that the
registrant proposes that the filing become effective pursuant to this
rule.
(b) No registration statement shall become effective pursuant to
paragraph (a) of this section if, prior to the effective date of the
registration statement, it should appear to the Commission that the
registration statement may be incomplete or inaccurate in any material
respect and the Commission furnishes to the registrant written notice
that the effective date is to be suspended. Following such action by
the Commission, the registrant may file with the Commission at any time
a petition for review of the suspension. The Commission will order a
hearing on the matter if a request for such a hearing is included in the
petition. If the Commission has suspended the effective date of the
registration statement, it shall become effective on such date as the
Commission may determine, having due regard to the public interest and
the protection of investors.
(50 FR 48383, Nov. 25, 1985)
17 CFR 230.489 Filing of form by foreign banks and insurance companies
and certain of their holding companies and finance subsidiaries.
(a) The following foreign issuers shall file Form F-N (17 CFR 239.43)
under the Act appointing an agent for service of process when filing a
registration statement under the Act:
(1) A foreign issuer that is a foreign bank or foreign insurance
company excepted from the definition of investment company by rule 3a-6
(17 CFR 270.3a-6) under the Investment Company Act of 1940 (the ''1940
Act'');
(2) A foreign issuer that is a finance subsidiary of a foreign bank
or foreign insurance company, as those terms are defined in rule 3a-6
under the 1940 Act, if the finance subsidiary is excepted from the
definition of investment company by rule 3a-5 (17 CFR 270.3a-5) under
the 1940 Act; or
(3) A foreign issuer that is excepted from the definition of
investment company by rule 3a-1 (17 CFR 270.3a-1) under the 1940 Act
because some or all of its majority-owned subsidiaries are foreign banks
or insurance companies excepted from the definition of investment
company by rule 3a-6 under the 1940 Act.
(b) The requirements of paragraph (a) of this section shall not apply
to:
(1) A foreign issuer that has filed Form F-X (17 CFR 239.42) under
the Securities Act of 1933 with respect to the securities being offered;
and
(2) A foreign issuer filing a registration statement relating to debt
securities or non-voting preferred stock that has on file with the
Commission a currently accurate Form N-6C9 (17 CFR 274.304, rescinded)
under the 1940 Act.
(c) Six copies of Form F-N, one of which shall be manually signed,
shall be filed with the Commission at its principal office.
(56 FR 56299, Nov. 4, 1991)
17 CFR 230.489 registration by foreign governments or political
subdivisions thereof
Source: Sections 230.490 to 230.494 contained in Regulation C, 12 FR
4076, June 24, 1947, unless otherwise noted.
17 CFR 230.490 Information to be furnished under paragraph (3) of
Schedule B.
Any issuer filing a registration statement pursuant to Schedule B of
the act need not furnish the detailed information specified in paragraph
(3) as to issues of outstanding funded debt the aggregate amount of
which outstanding is less than 5 percent of the total funded debt
outstanding and to be created by the security to be offered, provided
the amount thereof is included in the statement of the total amount of
funded debt outstanding and a statement is made as to the title, amount
outstanding, rate of interest, and date of maturity of each such issue.
17 CFR 230.491 Information to be furnished under paragraph (6) of
Schedule B.
Any foreign government filing a registration statement pursuant to
Schedule B of the act need state, in furnishing the information required
by paragraph (6), the names and addresses only of principal
underwriters, namely, underwriters in privity of contract with the
registrant, provided they are designated as principal underwriters and a
brief statement is made as to the discounts and commissions to be
received by subunderwriters or dealers.
17 CFR 230.492 Omissions from prospectuses.
In the case of a security for which a registration statement
conforming to Schedule B is in effect, the following information,
contained in the registration statement, may be omitted from any
prospectus: Information in answer to paragraph (3) of the Schedule with
respect to the amortization and retirement provisions for debt not being
registered, and with respect to the provisions for the substitution of
security for such debt; the addresses of underwriters in answer to
paragraph (6); information in answer to paragraph (11); the addresses
of counsel in answer to paragraph (12); the copy of any agreement or
agreements required by paragraph (13); the agreement required by
paragraph (14); and all information, whether contained in the
registration statement itself or in any exhibit thereto, not required by
Schedule B.
(Secs. 10(a)(4), 19(a), 48 Stat. 81, 85; sec. 209, 48 Stat. 908; 15
U.S.C. 77(j)(a)(4), 77(s)(a))
(41 FR 12010, Mar. 23, 1976)
17 CFR 230.493 Filing of opinions of counsel.
The copy of the opinion or opinions of counsel required by paragraph
(14) of Schedule B shall be filed either as a part of the registration
statement as originally filed, or as in amendment thereto.
17 CFR 230.494 Newspaper prospectuses.
(a) This section shall apply only to newspaper prospectuses relating
to securities, as to which a registration statement has become
effective, issued by a foreign national government with which the United
States maintains diplomatic relations. The term newspaper prospectus
means an advertisement of securities in newspapers, magazines or other
periodicals which are admitted to the mails as second-class matter and
which are not distributed by the advertiser. The term does not include
reprints, reproductions or detached copies of such advertisements. A
newspaper prospectus shall not be deemed a prospectus meeting the
requirements of section 10 for the purpose of section 2(10)(a) or
5(b)(2) of the Act.
(b) All information included in a newspaper prospectus may be
expressed in such condensed or summarized form as may be necessary in
the light of the circumstances under which newspaper prospectuses are
authorized to be used. The information need not follow the order in
which the information is set forth in the registration statement or in
the full prospectus. No information need be set forth in tabular form.
(c) The following statement shall be set forth at the head of every
newspaper prospectus in conspicuous print:
These securities, though registered, have not been approved or
disapproved by the Securities and Exchange Commission, which does not
pass on the merits of any registered securities.
(d) There shall be set forth at the foot of every newspaper
prospectus in conspicuous print a statement to the following effect:
Further information, particularly financial information, is contained
in the registration statement filed with the Commission and in a more
complete prospectus which must be furnished to each purchaser and is
obtainable from the following persons:
(Insert names.)
(e) If the registrant or any of the underwriters knows or has
reasonable grounds to believe that it is intended to stablize the price
of any security to facilitate the offering of the registered security,
there shall be placed in the newspaper prospectus, in capital letters,
the statement required by Item 502(d) of Regulation S-K ( 229.502(d) of
this chapter) to be included in the full prospectus.
(f) A newspaper prospectus shall contain the information specified in
paragraphs (f) (1) to (9) of this section. All other information and
documents contained in the registration statement may be omitted. The
following information shall be included:
(1) The name of the borrowing government;
(2) A brief description of the securities to be offered;
(3) The price at which it is proposed to offer the security to the
public in the United States;
(4) The purpose and approximate amounts to be devoted to such
purposes, so far as determinable, for which the security to be offered
is to supply funds; and if funds for such purposes are to be raised in
part from other sources, the amounts and the sources thereof:
(5) A brief statement as to the amount of funded and floating debt
outstanding and to be created, excluding inter-governmental debt;
(6) A condensed or summarized statement of receipt and expenditures
for the last three fiscal years for which data are available;
(7) A condensed or summarized statement of the balance of
international payments for the last three fiscal years for which data
are available;
(8) If the issuer or its predecessor has defaulted on the principal
or interest of any external debt, excluding intergovernmental debt,
during the last twenty years, the date, amount and circumstances of such
default and the general effect of any succeeding arrangement;
(9) Underwriting discounts and commissions per unit and in the
aggregate.
(g) A newspaper prospectus may also include, in condensed, summarized
or graphic form, additional information the substance of which is
contained in the registration statement. A newspaper prospectus shall
not contain any information the substance of which is not set forth in
the registration statement.
(h) All information included in a newspaper prospectus shall be set
forth in type at least as large as seven-point modern type: Provided,
however, That such information shall not be so arranged as to be
misleading or obscure the information required to be included in such a
prospectus.
(i) Five copies of every proposed newspaper prospectus, in the size
and form in which it is intended to be published shall be filed with the
Commission at least three business days before definitive copies thereof
are submitted to the newspaper, magazine or other periodical for
publication. Within seven days after publication, five additional
copies shall be filed in the exact form in which it was published and
shall be accompanied by a statement of the date and manner of its
publication.
(Interprets or applies sec. 7, 48 Stat. 78, as amended; 15 U.S.C.
77g; secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85, secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90 Stat. 57; secs. 12, 13, 14,
15(d), 23(a), 48 Stat. 892, 895, 901; secs. 1, 3, 8, 49 Stat. 1375,
1377, 1379; sec 203(a), 49 Stat. 704; sec. 202, 68 Stat. 686; secs.
3, 4, 5, 6, 78 Stat. 565-568, 569, 570-574; secs. 1, 2, 3, 82 Stat.
454, 455; secs. 28(c), 1, 2, 3-5, 84 Stat. 1435, 1497; sec. 105(b),
88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat. 117, 118, 119, 155; sec.
308(b), 90 Stat. 57; secs. 202, 203, 204, 81 Stat. 1494, 1498, 1499,
1500; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 78l, 78m, 78n, 78o(d),
78w(a))
(16 FR 8820 Aug. 31, 1951, as amended at 19 FR 6729, Oct. 20, 1954;
48 FR 19875, May 3, 1983)
17 CFR 230.495 Preparation of registration statement.
(a) A registration statement on Form N-1A, Form N-3, or Form N-4
shall consist of the facing sheet of the applicable form;
cross-reference sheet; a prospectus containing the information called
for by such form; the information; list of exhibits; undertakings and
signatures required to be set forth in such form; financial statements
and schedules; exhibits; any other information or documents filed as
part of the registration statement; and all documents or information
incorporated by reference in the foregoing (whether or not required to
be filed).
(b) All general instructions, instructions to items of the form, and
instructions as to financial statements, exhibits, or prospectuses are
to be omitted from the registration statement in all cases.
(c) In the case of a registration statement filed on Form N-1A, Form
N-3, or Form N-4, Parts A and B shall contain the information called for
by each of the items of the applicable part, except that unless
otherwise specified, no reference need be made to inapplicable items,
and negative answers to any item may be omitted. Copies of Parts A and
B may be filed as part of the registration statement in lieu of
furnishing the information in item-and-answer form. Wherever such
copies are filed in lieu of information in item-and-answer form, the
text of the items of the form is to be omitted from the registration
statement, as well as from Parts A and B, except to the extent provided
in paragraph (d) of this section.
(d) In the case of a registration statement filed on Form N-1A, Form
N-3, or Form N-4, where any item of those forms calls for information
not required to be included in Parts A and B, (generally Part C of such
form) the text of such items, including the numbers and captions
thereof, together with the answers thereto shall be filed with Parts A
and B under the cover of the facing sheet of the form as a part of the
registration statement. However, the text of such items may be omitted
provided the answers are so prepared as to indicate the coverage of the
item without the necessity of reference to the text of the item. If any
such item is inapplicable, or the answer thereto, is in the negative, a
statement to that effect shall be made. Any financial statements not
required to be included in Parts A or B shall also be filed as part of
the registration proper, unless incorporated by reference pursuant to
Rule 411 ( 230.411 of this chapter).
(Securities Act of 1933)
(48 FR 37938, Aug. 22, 1983, as amended at 50 FR 26159, June 25,
1985)
17 CFR 230.496 Contents of prospectus used after nine months.
In the case of a registration statement filed on Form N-1A, Form N-3,
or Form N-4 there may be omitted from any prospectus or Statement of
Additional Information used more than 9 months after the effective date
of the registration statement any information previously required to be
contained in the prospectus or the Statement of Additional Information
insofar as later information covering the same subjects, including the
latest available certified financial statements, as of a date not more
than 16 months prior to the use of the prospectus or the Statement of
Additional Information is contained therein.
(50 FR 26160, June 25, 1985)
17 CFR 230.497 Filing of investment company prospectuses -- number of
copies.
(a) Five copies of every form of prospectus sent or given to any
person prior to the effective date of the registration statement which
varies from the form or forms of prospectus included in the registration
statement as filed pursuant to 230.402(a) of this chapter shall be
filed as a part of the registration statement not later than the date
such form of prospectus is first sent or given to any person: Provided,
however, That an investment company advertisement which is deemed to be
a section 10(b) prospectus pursuant to 230.482 of this chapter and
which is required to be filed pursuant to this paragraph shall not be
filed as part of the registration statement.
(b) Within 5 days after the effective date of a registration
statement or the commencement of a public offering after the effective
date of a registration statement, whichever occurs later, 10 copies of
each form of prospectus used after the effective date in connection with
such offering shall be filed with the Commission in the exact form in
which it was used.
(c) For investment companies filing on Form N-1A ( 239.12A and
274.11A of this chapter), Form N-3 ( 239.17a and 274.11b of this
chapter), or Form N-4 ( 239.17b and 274.11c of this chapter), within
five days after the effective date of a registration statement or the
commencement of a public offering after the effective date of a
registration statement, whichever occurs later, ten copies of each form
of prospectus and Statement of Additional Information used after the
effective date in connection with such offering shall be filed with the
Commission in the exact form in which it was used.
(d) After the effective date of a registration statement no
prospectus which purports to comply with section 10 of the Act and which
varies from any form of prospectus filed pursuant to paragraph (b) or
(c) of this rule shall be used until 10 copies thereof have been filed
with, or mailed for filing to, the Commission, together with 5 copies of
a cross reference sheet similar to that previously filed, if changed.
(e) For investment companies filing on Form N-1A, Form N-3, or Form
N-4, after the effective date of a registration statement no prospectus
which purports to comply with section 10 of the act or Statement of
Additional Information which varies from any form of prospectus or
Statement of Additional Information filed pursuant to paragraph (b) of
this section shall be used until copies thereof have been filed with, or
mailed for filing to, the Commission, together with five copies of a
cross reference sheet similar to that previously filed, if changed.
(f) Every prospectus consisting of a radio or television broadcast
shall be reduced in writing. Five copies of every such prospectus shall
be filed with the Commission at least 5 days before it is broadcast or
otherwise issued to the public.
(g) Each copy of a prospectus under this rule shall contain in the
upper right hand corner of the cover page the paragraph of this rule
under which the filing is made and the file number of the registration
statement to which the prospectus relates. In addition, each investment
company advertisement deemed to be a section 10(b) prospectus pursuant
to 230.482 of this chapter shall contain in the upper right hand corner
of the cover page the legend ''Rule 482 ad.'' The information required
by this paragraph may be set forth in longhand, provided it is legible.
(h) No later than the second business day following the earlier of
the date of the determination of the offering price or the date it is
first used after effectiveness in connection with a public offering or
sales, ten copies of every form of prospectus and Statement of
Additional Information, where applicable, that discloses the information
previously omitted from the prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Securities
Act ( 230.430A of this chapter) shall be filed with the Commission in
the exact form in which it is used, or transmitted by a means reasonably
calculated to result in filing with the Commission by that date.
(i) An investment company advertisement deemed to be a section 10(b)
prospectus pursuant to 230.482 of this chapter shall be considered to
be filed with the Commission upon filing with a national securities
association registered under Section 15A of the Securities Exchange Act
of 1934 (15 U.S.C. 78o) that has adopted rules providing standards for
the investment company advertising practices of its members and has
established and implemented procedures to review that advertising.
(Securities Act of 1933)
(48 FR 37939, Aug. 22, 1983, as amended at 50 FR 26160, June 25,
1985; 52 FR 21262, June 5, 1987; 53 FR 3880, Feb. 10, 1988)
17 CFR 230.499 EDGAR temporary rule.
(a) Scope. In conjunction with the applicable rules and regulations
under the Securities Act, particularly Regulation C ( 230.400 et seq. of
this chapter), this rule shall govern registration of securities under
the Act by registrants permitted to participate in the EDGAR pilot and
shall be controlling for an electronic format document in the manner and
respects provided for in paragraphs (b)(1) through (c)(8) of this
section.
(b) Definitions. Unless otherwise specifically provided, the terms
used in this rule have the same meanings as in the Act and in the
general rules, regulations and forms. In addition, the following
definitions of terms apply specifically to a document in an electronic
format and shall define such terms wherever they appear in the Act,
rules, regulations or forms, unless the context otherwise requires:
(1) Bold-face type. The term bold-face type shall include capital
letters in a document in an electronic format.
(2) Electronic format. The term electronic format shall refer to a
computerized format of a document that is submitted to the Commission by
direct digital transmission, magnetic tape or diskette.
(3) Graphic communication. The term graphic communication, which
appears in the definition of write, written in section 2(9) of the
Securities Act, shall include magnetic impulse or other form of computer
data compilation.
(4) Original. The term original, when used or implied in the act,
rules, regulations or forms, shall include the writing itself or any
counterpart intended to have the same effect by a person executing or
issuing it. If data are stored in a computer or similar device, any
printout or other output readable by sight, shown to reflect the data
accurately, is an original.
(5) Received. The term received when used to determine the filing
date, i.e., the date received by the Commission, shall be the date on
which such filing is accepted, as determined by the Commission for a
document filed in an electronic format.
(6) Red ink. The required presentation of any legend, statement or
caption in red ink (horizontal or vertical to the page) is satisfied in
an electronic format if such legend, statement or caption is in a
prominent position and set off from the rest of the text by a box or
similar form of border enclosing such legend, statement or caption on
all four sides.
(7) Signed. The term signed shall include the entry in the form of a
magnetic impulse or other form of computer data compilation of any
symbol or series of symbols executed, adopted or authorized as a
signature.
(c) Suspended or substituted requirements. The following paragraphs
refer to requirements that are suspended or replaced, in whole or in
part, for a document in an electronic format.
(1) Binding. The requirement for a copy to be bound in one or more
parts shall be satisfied by including in or with a single submission in
an electronic format all documents required to be so bound.
(2) Filing of documents incorporated by reference. Wherever a
document, or part thereof, which is incorporated by reference into a
directly transmitted electronic filing is required to be filed with,
provided with, or is to accompany the filing to the Commission and such
document is not in an electronic format, such requirement shall be
suspended, provided that the document is filed with the Commission on
the same day or has been filed with or provided to the Commission
previously. A directly transmitted electronic filing that incorporates
by reference a required document shall not be accepted until the
document incorporated by reference has been received by the Commission.
Any requirement as to delivery or provision to persons other than the
Commission shall not be affected by this paragraph.
(3) Number of copies required to be filed. One copy of a document
filed in an electronic format shall satisfy any requirement that more
than one copy of such document be filed with or provided to the
Commission.
(4) Paper. Whenever the term paper appears, the term electronic
format also shall be included unless the context refers specifically to
characteristics of paper.
(5) Type size required. Any reference to specific size type shall be
suspended for documents while in an electronic format.
(6) Rule 403 of Regulation C, ''Requirements as to paper, printing,
language and pagination''. Paragraph (a) of Rule 403 ( 230.403 of this
chapter) is suspended for documents while in an electronic format.
(7) Rules 424 and 497 of Regulation C, ''Filing of prospectus --
number of copies'' and ''Filing of investment company prospectus --
number of copies.'' The copies required to be filed by paragraphs (a)
and (b) of Rules 424 and 497 under the Securities Act ( 230.424 and
230.497 of this chapter) shall consist of a copy of the document in an
electronic format with an explanation before the cover page that
narratively describes in detail the variations from such document of any
form of prospectus (or Statement of Additional Information) sent or
given to any person prior to the effective date of the registration
statement or used after the effective date. The explanation shall be a
part of the filed document. Copies required to be filed by paragraphs
(a) and (b) of Rule 497 may be omitted unless the prospectus (or
Statement of Additional Information) contains substantive changes from
or additions to a prospectus (or Statement of Additional Information)
previously filed with the Commission in an electronic format.
(8) Rule 431 of Regulation C, ''Summary prospectuses''. The
requirement in paragraph (g) of Rule 431 ( 230.431 of this chapter) to
file the summary prospectus in the exact form in which it was used or
published shall be satisfied by filing such document in an electronic
format with an explanation before the cover page that narratively
describes in detail the variations from such document of any summary
prospectus so used or published. The explanation shall be a part of the
filed document.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 3, 4, 5, 6(d), 78
Stat. 569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1,
2, 3, 4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8,
9, 10, 18, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat. 57; sec. 18,
89 Stat. 155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec.
20(a), 49 Stat. 833; sec. 319, 54 Stat. 1173; sec. 38, 54 Stat. 841;
15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d),
78w(a), 79t(a), 77sss(a), 80a-37)
(49 FR 28048, July 10, 1984, as amended at 50 FR 40483, Oct. 4, 1985;
53 FR 3880, Feb. 10, 1988)
17 CFR 230.499 Regulation D -- Rules Governing the Limited Offer and
Sale of Securities Without Registration Under the Securities Act of 1933
Authority: Sections 230.501 to 230.506 issued under secs. 3(b),
4(2), 19(a), 19(c), 48 Stat. 75, 77, 85; sec. 209, 48 Stat. 908;
c.122, 59 Stat. 167; sec. 12, 78 Stat. 580; 84 Stat. 1480; sec.
308(a)(2), 90 Stat. 57; sec. 18, 92 Stat. 275; sec. 2, 92 Stat.
962; secs. 505, 622, 701, 94 Stat. 2291, 2292, 2294 15 U.S.C. 77c(b),
77d(2), 77s(a), 77s(c).
Source: Sections 230.501 to 230.506 appear at 47 FR 11262, Mar. 16,
1982, unless otherwise noted.
1. The following rules relate to transactions exempted from the
registration requirements of section 5 of the Securities Act of 1933
(the Act) (15 U.S.C. 77a et seq., as amended). Such transactions are
not exempt from the antifraud, civil liability, or other provisions of
the federal securities laws. Issuers are reminded of their obligation
to provide such further material information, if any, as may be
necessary to make the information required under this regulation, in
light of the circumstances under which it is furnished, not misleading.
2. Nothing in these rules obviates the need to comply with any
applicable state law relating to the offer and sale of securities.
Regulation D is intended to be a basic element in a uniform system of
Federal-State limited offering exemptions consistent with the provisions
of sections 18 and 19(c) of the Act. In those states that have adopted
Regulation D, or any version of Regulation D, special attention should
be directed to the applicable state laws and regulations, including
those relating to registration of person who receive remuneration in
connection with the offer and sale of securities, to disqualification of
issuers and other persons associated with offerings based on state
administrative orders or judgments, and to requirements for filings of
notices of sales.
3. Attempted compliance with any rule in Regulation D does not act as
an exclusive election; the issuer can also claim the availability of
any other applicable exemption. For instance, an issuer's failure to
satisfy all the terms and conditions of Rule 506 shall not raise any
presumption that the exemption provided by section 4(2) of the Act is
not available.
4. These rules are available only to the issuer of the securities and
not to any affiliate of that issuer or to any other person for resales
of the issuer's securities. The rules provide an exemption only for the
transactions in which the securities are offered or sold by the issuer,
not for the securities themselves.
5. These rules may be used for business combinations that involve
sales by virtue of rule 145(a) (17 CFR 230.145(a)) or otherwise.
6. In view of the objectives of these rules and the policies
underlying the Act, regulation D is not available to any issuer for any
transaction or chain of transactions that, although in technical
compliance with these rules, is part of a plan or scheme to evade the
registration provisions of the Act. In such cases, registration under
the Act is required.
7. Securities offered and sold outside the United States in
accordance with Regulation S need not be registered under the Act. See
Release No. 33-6863. Regulation S may be relied upon for such offers
and sales even if coincident offers and sales are made in accordance
with Regulation D inside the United States. Thus, for example, persons
who are offered and sold securities in accordance with Regulation S
would not be counted in the calculation of the number of purchasers
under Regulation D. Similarly, proceeds from such sales would not be
included in the aggregate offering price. The provisions of this note,
however, do not apply if the issuer elects to rely solely on Regulation
D for offers or sales to persons made outside the United States.
(47 FR 11262, Mar. 16, 1982, as amended at 47 FR 54771, Dec. 6, 1982;
55 FR 18322, May 2, 1990)
17 CFR 230.501 Definitions and terms used in Regulation D.
As used in Regulation D ( 230.501-230.508), the following terms
shall have the meaning indicated:
(a) Accredited investor. Accredited investor shall mean any person
who comes within any of the following categories, or who the issuer
reasonably believes comes within any of the following categories, at the
time of the sale of the securities to that person:
(1) Any bank as defined in section 3(a)(2) of the Act, or any savings
and loan association or other institution as defined in section
3(a)(5)(A) of the Act whether acting in its individual or fiduciary
capacity; any broker or dealer registered pursuant to section 15 of the
Securities Exchange Act of 1934; any insurance company as defined in
section 2(13) of the Act; any investment company registered under the
Investment Company Act of 1940 or a business development company as
defined in section 2(a)(48) of that Act; any Small Business Investment
Company licensed by the U.S. Small Business Administration under section
301(c) or (d) of the Small Business Investment Act of 1958; any plan
established and maintained by a state, its political subdivisions, or
any agency or instrumentality of a state or its political subdivisions,
for the benefit of its employees, if such plan has total assets in
excess of $5,000,000; any employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974 if the investment
decision is made by a plan fiduciary, as defined in section 3(21) of
such act, which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or if the employee
benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons
that are accredited investors;
(2) Any private business development company as defined in section
202(a)(22) of the Investment Advisers Act of 1940;
(3) Any organization described in section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the
securities offered, with total assets in excess of $5,000,000;
(4) Any director, executive officer, or general partner of the issuer
of the securities being offered or sold, or any director, executive
officer, or general partner of a general partner of that issuer;
(5) Any natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of his purchase exceeds
$1,000,000;
(6) Any natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that
person's spouse in excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current
year;
(7) Any trust, with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person as described in
230.506(b)(2)(ii); and
(8) Any entity in which all of the equity owners are accredited
investors.
(b) Affiliate. An affiliate of, or person affiliated with, a
specified person shall mean a person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is
under common control with, the person specified.
(c) Aggregate offering price. Aggregate offering price shall mean
the sum of all cash, services, property, notes, cancellation of debt, or
other consideration to be received by an issuer for issuance of its
securities. Where securities are being offered for both cash and
non-cash consideration, the aggregate offering price shall be based on
the price at which the securities are offered for cash. Any portion of
the aggregate offering price attributable to cash received in a foreign
currency shall be translated into United States currency at the currency
exchange rate in effect at a reasonable time prior to or on the date of
the sale of the securities. If securities are not offered for cash, the
aggregate offering price shall be based on the value of the
consideration as established by bona fide sales of that consideration
made within a reasonable time, or, in the absence of sales, on the fair
value as determined by an accepted standard. Such valuations of
non-cash consideration must be reasonable at the time made.
(d) Business combination. Business combination shall mean any
transaction of the type specified in paragraph (a) of Rule 145 under the
Act (17 CFR 230.145) and any transaction involving the acquisition by
one issuer, in exchange for all or a part of its own or its parent's
stock, of stock of another issuer if, immediately after the acquisition,
the acquiring issuer has control of the other issuer (whether or not it
had control before the acquisition).
(e) Calculation of number of purchasers. For purposes of calculating
the number of purchasers under 230.505(b) and 230.506(b) only, the
following shall apply:
(1) The following purchasers shall be excluded:
(i) Any relative, spouse or relative of the spouse of a purchaser who
has the same principal residence as the purchaser;
(ii) Any trust or estate in which a purchaser and any of the persons
related to him as specified in paragraph (e)(1)(i) or (e)(1)(iii) of
this section collectively have more than 50 percent of the beneficial
interest (excluding contingent interests);
(iii) Any corporation or other organization of which a purchaser and
any of the persons related to him as specified in paragraph (e)(1)(i) or
(e)(1)(ii) of this section collectively are beneficial owners of more
than 50 percent of the equity securities (excluding directors'
qualifying shares) or equity interests; and
(iv) Any accredited investor.
(2) A corporation, partnership or other entity shall be counted as
one purchaser. If, however, that entity is organized for the specific
purpose of acquiring the securities offered and is not an accredited
investor under paragraph (a)(8) of this section, then each beneficial
owner of equity securities or equity interests in the entity shall count
as a separate purchaser for all provisions of Regulation D (
230.501-230.508), except to the extent provided in paragraph (e)(1) of
this section.
(3) A non-contributory employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974 shall be
counted as one purchaser where the trustee makes all investment
decisions for the plan.
(f) Executive officer. Executive officer shall mean the president,
any vice president in charge of a principal business unit, division or
function (such as sales, administration orfinance), any other officer
who performs a policy making function, or any other person who performs
similar policy making functions for the issuer. Executive officers of
subsidiaries may be deemed executive officers of the issuer if they
perform such policy making functions for the issuer.
(g) Issuer. The definition of the term issuer in section 2(4) of the
Act shall apply, except that in the case of a proceeding under the
Federal Bankruptcy Code (11 U.S.C. 101 et seq.), the trustee or debtor
in possession shall be considered the issuer in an offering under a plan
or reorganization, if the securities are to be issued under the plan.
(h) Purchaser representative. Purchaser representative shall mean
any person who satisfies all of the following conditions or who the
issuer reasonably believes satisfies all of the following conditions:
(1) Is not an affiliate, director, officer or other employee of the
issuer, or beneficial owner of 10 percent or more of any class of the
equity securities or 10 percent or more of the equity interest in the
issuer, except where the purchaser is:
(i) A relative of the purchaser representative by blood, marriage or
adoption and not more remote than a first cousin;
(ii) A trust or estate in which the purchaser representative and any
persons related to him as specified in paragraph (h)(1)(i) or
(h)(1)(iii) of this section collectively have more than 50 percent of
the beneficial interest (excluding contingent interest) or of which the
purchaser representative serves as trustee, executor, or in any similar
capacity; or
(iii) A corporation or other organization of which the purchaser
representative and any persons related to him as specified in paragraph
(h)(1)(i) or (h)(1)(ii) of this section collectively are the beneficial
owners of more than 50 percent of the equity securities (excluding
directors' qualifying shares) or equity interests;
(2) Has such knowledge and experience in financial and business
matters that he is capable of evaluating, alone, or together with other
purchaser representatives of the purchaser, or together with the
purchaser, the merits and risks of the prospective investment;
(3) Is acknowledged by the purchaser in writing, during the course of
the transaction, to be his purchaser representative in connection with
evaluating the merits and risks of the prospective investment; and
(4) Discloses to the purchaser in writing a reasonable time prior to
the sale of securities to that purchaser any material relationship
between himself or his affiliates and the issuer or its affiliates that
then exists, that is mutually understood to be contemplated, or that has
existed at any time during the previous two years, and any compensation
received or to be received as a result of such relationship.
Note 1: A person acting as a purchaser representative should
consider the applicability of the registration and antifraud provisions
relating to brokers and dealers under the Securities Exchange Act of
1934 (Exchange Act) (15 U.S.C. 78a et seq., as amended) and relating to
investment advisers under the Investment Advisers Act of 1940.
Note 2: The acknowledgment required by paragraph (h)(3) and the
disclosure required by paragraph (h)(4) of this section must be made
with specific reference to each prospective investment. Advance blanket
acknowledgment, such as for all securities transactions or all private
placements, is not sufficient.
Note 3: Disclosure of any material relationships between the
purchaser representative or his affiliates and the issuer or its
affiliates does not relieve the purchaser representative of his
obligation to act in the interest of the purchaser.
(47 FR 11262, Mar. 16, 1982, as amended at 53 FR 7868, Mar. 10, 1988;
54 FR 11372, Mar. 20, 1989)
17 CFR 230.502 General conditions to be met.
The following conditions shall be applicable to offers and sales made
under Regulation D ( 230.501-230.508):
(a) Integration. All sales that are part of the same Regulation D
offering must meet all of the terms and conditions of Regulation D.
Offers and sales that are made more than six months before the start of
a Regulation D offering or are made more than six months after
completion of a Regulation D offering will not be considered part of
that Regulation D offering, so long as during those six month periods
there are no offers or sales of securities by or for the issuer that are
of the same or a similar class as those offered or sold under Regulation
D, other than those offers or sales of securities under an employee
benefit plan as defined in rule 405 under the Act (17 CFR 230.405).
Note: The term offering is not defined in the Act or in Regulation
D. If the issuer offers or sells securities for which the safe harbor
rule in paragraph (a) of this 230.502 is unavailable, the determination
as to whether separate sales of securities are part of the same offering
(i.e. are considered integrated) depends on the particular facts and
circumstances. Generally, transactions otherwise meeting the
requirements of an exemption will not be integrated with simultaneous
offerings being made outside the United States in compliance with
Regulation S. See Release No. 33-6863.
The following factors should be considered in determining whether
offers and sales should be integrated for purposes of the exemptions
under Regulation D:
(a) Whether the sales are part of a single plan of financing;
(b) Whether the sales involve issuance of the same class of
securities;
(c) Whether the sales have been made at or about the same time;
(d) Whether the same type of consideration is being received; and
(e) Whether the sales are made for the same general purpose.
See Release 33-4552 (November 6, 1962) (27 FR 11316).
(b) Information requirements -- (1) When information must be
furnished. If the issuer sells securities under 230.505 or 230.506 to
any purchaser that is not an accredited investor, the issuer shall
furnish the information specified in paragraph (b)(2) of this section to
such purchaser a reasonable time prior to sale. The issuer is not
required to furnish the specified information to purchasers when it
sells securities under 230.504, or to any accredited investor.
Note: When an issuer provides information to investors pursuant to
paragraph (b)(1), it should consider providing such information to
accredited investors as well, in view of the anti-fraud provisions of
the federal securities laws. In addition, specific disclosure
requirements regarding limitations on resale are contained in
230.504(b)(2)(ii)
(2) Type of information to be furnished. (i) If the issuer is not
subject to the reporting requirements of section 13 or 15(d) of the
Exchange Act, at a reasonable time prior to the sale of securities the
issuer shall furnish to the purchaser the following information, to the
extent material to an understanding of the issuer, its business, and the
securities being offered:
(A) Offerings up to $2,000,000. The same kind of information as
would be required in Part II of Form 1-A (17 CFR 239.90), except that
the issuer's balance sheet, which shall be dated within 120 days of the
start of the offering, must be audited.
(B) Offerings up to $7,500,000. The same kind of information as
would be required in Part I of Form S-18 (17 CFR 239.28), except that
only the financial statements for the issuer's most recent fiscal year
must be certified by an independent public or certified accountant. If
Form S-18 is not available to an issuer, then the issuer shall furnish
the same kind of information as would be required in Part I of a
registration statement filed under the Act on the form that the issuer
would be entitled to use, except that only the financial statements for
the most recent two fiscal years prepared in accordance with generally
accepted accounting principles shall be furnished and only the financial
statements for the issuer's most recent fiscal year shall be certified
by an independent public or certified accountant. If an issuer, other
than a limited partnership, cannot obtain audited financial statements
without unreasonable effort or expense, then only the issuer's balance
sheet, which shall be dated within 120 days of the start of the
offering, must be audited. If the issuer is a limited partnership and
cannot obtain the required financial statements without unreasonable
effort or expense, it may furnish financial statements that have been
prepared on the basis of federal income tax requirements and examined
and reported on in accordance with generally accepted auditing standards
by an independent public or certified accountant.
(C) Offerings over $7,500,000. The same kind of information as would
be required in Part I of a registration statement filed under the Act on
the form that the issuer would be entitled to use. If an issuer, other
than a limited partnership, cannot obtain audited financial statements
without unreasonable effort or expense, then only the issuer's balance
sheet, which shall be dated within 120 days of the start of the
offering, must be audited. If the issuer is a limited partnership and
cannot obtain the required financial statements without unreasonable
effort or expense, it may furnish financial statements that have been
prepared on the basis of federal income tax requirements and examined
and reported on in accordance with generally accepted auditing standards
by an independent public or certified accountant.
(D) If the issuer is a foreign private issuer, the issuer shall
disclose the same kind of information required to be included in a
registration statement filed under the Act on the form that the issuer
would be entitled to use. The financial statements need be certified
only to the extent required by paragraph (b)(2)(i) (B) or (C) of this
section, as appropriate.
(ii) If the issuer is subject to the reporting requirements of
section 13 or 15(d) of the Exchange Act, at a reasonable time prior to
the sale of securities the issuer shall furnish to the purchaser the
information specified in paragraph (b)(2)(ii)(A) or (B) of this section,
and in either event the information specified in paragraph (b)(2)(ii)(C)
of this section:
(A) The issuer's annual report to shareholders for the most recent
fiscal year, if such annual report meets the requirements of 240.14a-3
or 240.14c-3 under the Exchange Act, the definitive proxy statement
filed in connection with that annual report, and, if requested by the
purchaser in writing, a copy of the issuer's most recent Form 10-K (17
CFR 249.310) under the Exchange Act.
(B) The information contained in an annual report on Form 10-K under
the Exchange Act or in a registration statement on Form S-1 (17 CFR
239.11), Form S-11 (17 CFR 239.18), or Form S-18 (17 CFR 239.28) under
the Act or on Form 10 (17 CFR 249.210) under the Exchange Act, whichever
filing is the most recent required to be filed.
(C) The information contained in any reports or documents required to
be filed by the issuer under sections 13(a), 14(a), 14(c), and 15(d) of
the Exchange Act since the distribution or filing of the report or
registration statement specified in paragraphs (b)(2)(ii) (A) or (B),
and a brief description of the securities being offered, the use of the
proceeds from the offering, and any material changes in the issuer's
affairs that are not disclosed in the documents furnished.
(D) If the issuer is a foreign private issuer, the issuer may provide
in lieu of the information specified in paragraph (b)(2)(ii) (A) or (B)
of this section, the information contained in its most recent filing on
Form 20-F or Form F-1 ( 239.31 of the chapter).
(iii) Exhibits required to be filed with the Commission as part of a
registration statement or report, other than an annual report to
shareholders or parts of that report incorporated by reference in a Form
10-K report, need not be furnished to each purchaser that is not an
accredited investor if the contents of material exhibits are identified
and such exhibits are made available to a purchaser, upon his written
request, a reasonable time prior to his purchase.
(iv) At a reasonable time prior to the sale of securities to any
purchaser that is not an accredited investor in a transaction under
230.505 or 230.506, the issuer shall furnish to the purchaser a brief
description in writing of any material written information concerning
the offering that has been provided by the issuer to any accredited
investor but not previously delivered to such unaccredited purchaser.
The issuer shall furnish any portion or all of this information to the
purchaser, upon his written request a reasonable time prior to his
purchase.
(v) The issuer shall also make available to each purchaser at a
reasonable time prior to his purchase of securities in a transaction
under 230.505 or 230.506 the opportunity to ask questions and receive
answers concerning the terms and conditions of the offering and to
obtain any additional information which the issuer possesses or can
acquire without unreasonable effort or expense that is necessary to
verify the accuracy of information furnished under paragraph (b)(2) (i)
or (ii) of this section.
(vi) For business combinations or exchange offers, in addition to
information required by Form S-4 (17 CFR 239.25), the issuer shall
provide to each purchaser at the time the plan is submitted to security
holders, or, with an exchange, during the course of the transaction and
prior to sale, written information about any terms or arrangements of
the proposed transactions that are materially different from those for
all other security holders. For purposes of this subsection, an issuer
which is not subject to the reporting requirements of section 13 or
15(d) of the Exchange Act may satisfy the requirements of Part I.B. or
C. of Form S-4 by compliance with paragraph (b)(2)(i) of this 230.502.
(vii) At a reasonable time prior to the sale of securities to any
purchaser that is not an accredited investor in a transaction under
230.505 or 230.506, the issuer shall advise the purchaser of the
limitations on resale in the manner contained in paragraph (d)(2) of
this section. Such disclosure may be contained in other materials
required to be provided by this paragraph.
(c) Limitation on manner of offering. Except as provided in
230.504(b)(1), neither the issuer nor any person acting on its behalf
shall offer or sell the securities by any form of general solicitation
or general advertising, including, but not limited to, the following:
(1) Any advertisement, article, notice or other communication
published in any newspaper, magazine, or similar media or broadcast over
televison or radio; and
(2) Any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising.
(d) Limitations on resale. Except as provided in 230.504(b)(1),
securities acquired in a transaction under Regulation D shall have the
status of securities acquired in a transaction under section 4(2) of the
Act and cannot be resold without registration under the Act or an
exemption therefrom. The issuer shall exercise reasonable care to
assure that the purchasers of the securities are not underwriters within
the meaning of section 2(11) of the Act, which reasonable care may be
demonstrated by the following:
(1) Reasonable inquiry to determine if the purchaser is acquiring the
securities for himself or for other persons;
(2) Written disclosure to each purchaser prior to sale that the
securities have not been registered under the Act and, therefore, cannot
be resold unless they are registered under the Act or unless an
exemption from registration is available; and
(3) Placement of a legend on the certificate or other document that
evidences the securities stating that the securities have not been
registered under the Act and setting forth or referring to the
restrictions on transferability and sale of the securities.
While taking these actions will establish the requisite reasonable
care, it is not the exclusive method to demonstrate such care. Other
actions by the issuer may satisfy this provision. In addition,
230.502(b)(2)(vii) and 230.504(b)(2)(ii) require the delivery of written
disclosure of the limitations on resale to investors in certain
instances.
(47 FR 11262, Mar. 16, 1982, as amended at 47 FR 54771, Dec. 6, 1982;
53 FR 7869, Mar. 11, 1988; 54 FR 11372, Mar. 20, 1989; 55 FR 18322,
May 2, 1990; 56 FR 30054, 30055, July 1, 1991)
17 CFR 230.503 Filing of notice of sales.
(a) An issuer offering or selling securities in reliance on 230.504,
230.505 or 230.506 shall file with the Commission five copies of a
notice on Form D (17 CFR 239.500) no later than 15 days after the first
sale of securities.
(b) One copy of every notice on Form D shall be manually signed by a
person duly authorized by the issuer.
(c) If sales are made under 230.505, the notice shall contain an
undertaking by the issuer to furnish to the Commission, upon the written
request of its staff, the information furnished by the issuer under
230.502(b)(2) to any purchaser that is not an accredited investor.
(d) Amendments to notices filed under paragraph (a) of this section
need only report the issuer's name and the information required by Part
C and any material change in the facts from those set forth in Parts A
and B.
(e) A notice on Form D shall be considered filed with the Commission
under paragraph (a) of this section.
(1) As of the date on which it is received at the Commission's
principal office in Washington, DC; or
(2) As of the date on which the notice is mailed by means of United
States registered or certified mail to the Commission's principal office
in Washington, DC, if the notice is delivered to such office after the
date on which it is required to be filed.
(51 FR 36386, Oct. 10, 1986, as amended at 54 FR 11373, Mar. 20,
1989)
17 CFR 230.504 Exemption for limited offerings and sales of securities
not exceeding $1,000,000.
(a) Exemption. Offers and sales of securities that satisfy the
conditions in paragraph (b) of this section by an issuer that is not
subject to the reporting requirements of section 13 or 15(d) of the
Exchange Act and that is not an investment company shall be exempt from
the provisions of section 5 of the Act under section 3(b) of the Act.
(b) Conditions to be met -- (1) General Conditions. To qualify for
exemption under this 230.504, offers and sales must satisfy the terms
and conditions of 230.501 and 230.502, except that the provisions of
230.502(c) and (d) shall not apply to offers and sales of securities
under this 230.504 that are made:
(i) Exclusively in one or more states each of which provides for the
registration of the securities and requires the delivery of a disclosure
document before sale and that are made in accordance with those state
provisions; or
(ii) In one or more states which have no provision for the
registration of the securities and the delivery of a disclosure document
before sale, if the securities have been registered in at least one
state which provides for such registration and delivery before sale,
offers and sales are made in the state of registration in accordance
with such state provisions, and such document is in fact delivered to
all purchasers in the states which have no such procedure before the
sale of the securities.
(2) Specific condition -- (i) Limitation on aggregate offering price.
The aggregate offering price for an offering of securities under this
230.504, as defined in 230.501(c), shall not exceed $1,000,000, less
the aggregate offering price for all securities sold within the twelve
months before the start of and during the offering of securities under
this 230.504 in reliance on any exemption under section 3(b) of the Act
or in violation of section 5(a) of the Act, provided that no more than
$500,000 of such aggregate offering price is attributable to offers and
sales of securities without registration under a state's securities
laws.
Note 1: The calculation of the aggregate offering price is
illustrated as follows:
Example 1. If an issuer sells $500,000 worth of its securities
pursuant to state registration on January 1, 1988 under this 230.504,
it would be able to sell an additional $500,000 worth of securities
either pursuant to state registration or without state registration
during the ensuing twelve-month period, pursuant to this 230.504.
Example 2. If an issuer sold $900,000 pursuant to state registration
on June 1, 1987 under this 230.504 and an additional $4,100,000 on
December 1, 1987 under 230.505, the issuer could not sell any of its
securities under this 230.504 until December 1, 1988. Until then the
issuer must count the December 1, 1987 sale towards the $1,000,000 limit
within the preceding twelve months.
Note 2: If a transaction under this 230.504 fails to meet the
limitation on the aggregate offering price, it does not affect the
availability of this 230.504 for the other transactions considered in
applying such limitation. For example, if an issuer sold $1,000,000
worth of its securities pursuant to state registration on January 1,
1988 under this 230.504 and an additional $500,000 worth on July 1,
1988, this 230.504 would not be available for the later sale, but would
still be applicable to the January 1, 1988 sale.
Note 3: In addition to the aggregation principles, issuers should be
aware of the applicability of the integration principles set forth in
230.502(a).
(ii) Advice about the limitations on resale. Except where the
provision does not apply by virtue of paragraph (b)(1) of this section,
the issuer, at a reasonable time prior to the sale of securities, shall
advise each purchaser of the limitations on resale in the manner
contained in paragraph (d)(2) of 230.502.
(47 FR 11262, Mar. 16, 1982, as amended at 53 FR 7869, Mar. 10, 1988;
54 FR 11373, Mar. 20, 1989)
17 CFR 230.505 Exemption for limited offers and sales of securities not
exceeding $5,000,000.
(a) Exemption. Offers and sales of securities that satisfy the
conditions in paragraph (b) of this section by an issuer that is not an
investment company shall be exempt from the provisions of section 5 of
the Act under section 3(b) of the Act.
(b) Conditions to be met -- (1) General conditions. To qualify for
exemption under this section, offers and sales must satisfy the terms
and conditions of 230.501 and 230.502.
(2) Specific conditions -- (i) Limitation on aggregate offering
price. The aggregate offering price for an offering of securities under
this 230.505, as defined in 203.501(c), shall not exceed $5,000,000,
less the aggregate offering price for all securities sold within the
twelve months before the start of and during the offering of securities
under this section in reliance on any exemption under section 3(b) of
the Act or in violation of section 5(a) of the Act.
Note: The calculation of the aggregate offering price is illustrated
as follows:
Example 1. If an issuer sold $2,000,000 of its securities on June 1,
1982 under this 230.505 and an additional $1,000,000 on September 1,
1982, the issuer would be permitted to sell only $2,000,000 more under
this 230.505 until June 1, 1983. Until that date the issuer must count
both prior sales towards the $5,000,000 limit. However, if the issuer
made its third sale on June 1, 1983, the issuer could then sell
$4,000,000 of its securities because the June 1, 1982 sale would not be
within the preceding twelve months.
Example 2. If an issuer sold $500,000 of its securities on June 1,
1982 under 230.504 and an additional $4,500,000 on December 1, 1982
under this section, then the issuer could not sell any of its securities
under this section until June 1, 1983. At that time it could sell an
additional $500,000 of its securities.
(ii) Limitation on number of purchasers. There are no more than or
the issuer reasonably believes that there are no more than 35 purchasers
of securities from the issuer in any offering under this section.
(iii) Disqualifications. No exemption under this section shall be
available for the securities of any issuer described in 230.252(c),
(d), (e), or (f) of Regulation A, except that for purposes of this
section only:
(A) The term filing of the notification required by 230.255 as used
in 230.252(c), (d), (e) and (f) shall mean the first sale of securities
under this section;
(B) The term underwriter as used in 230.252(d) and (e) shall mean a
person that has been or will be paid directly or indirectly remuneration
for solicitation of purchasers in connection with sales of securities
under this section; and
(C) Paragraph (b)(2)(iii) of this section shall not apply to any
issuer if the Commission determines, upon a showing of good cause, that
it is not necessary under the circumstances that the exemption be
denied. Any such determination shall be without prejudice to any other
action by the Commission in any other proceeding or matter with respect
to the issuer or any other person.
(47 FR 11262, Mar. 16, 1982, as amended at 54 FR 11373, Mar. 20,
1989)
17 CFR 230.506 Exemption for limited offers and sales without regard to
dollar amount of offering.
(a) Exemption. Offers and sales of securities by an issuer that
satisfy the conditions in paragraph (b) of this section shall be deemed
to be transactions not involving any public offering within the meaning
of section 4(2) of the Act.
(b) Conditions to be met -- (1) General conditions. To qualify for
an exemption under this section, offers and sales must satisfy all the
terms and conditions of 230.501 and 230.502.
(2) Specific Conditions -- (i) Limitation on number of purchasers.
There are no more than or the issuer reasonably believes that there are
no more than 35 purchasers of securities from the issuer in any offering
under this section.
Note: See 230.501(e) for the calculation of the number of
purchasers and 230.502(a) for what may or may not constitute an
offering under this section.
(ii) Nature of purchasers. Each purchaser who is not an accredited
investor either alone or with his purchaser representative(s) has such
knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of the prospective
investment, or the issuer reasonably believes immediately prior to
making any sale that such purchaser comes within this description.
(47 FR 11262, Mar. 6, 1982, as amended at 54 FR 11373, Mar. 20, 1989)
17 CFR 230.507 Disqualifying provision relating to exemptions under
230.504, 230.505 and 230.506.
(a) No exemption under 230.505, 230.505 or 230.506 shall be
available for an issuer if such issuer, any of its predecessors or
affiliates have been subject to any order, judgment, or decree of any
court of competent jurisdiction temporarily, preliminary or permanently
enjoining such person for failure to comply with 230.503.
(b) Paragraph (a) of this section shall not apply if the Commission
determines, upon a showing of good cause, that it is not necessary under
the circumstances that the exemption be denied.
(54 FR 11374, Mar. 20, 1989)
17 CFR 230.508 Insignificant deviations from a term, condition or
requirement of RegulationD.
(a) A failure to comply with a term, condition or requirement of
230.504, 230.505 or 230.506 will not result in the loss of the
exemption from the requirements of section 5 of the Act for any offer or
sale to a particular individual or entity, if the person relying on the
exemption shows:
(1) The failure to comply did not pertain to a term, condition or
requirement directly intended to protect that particular individual or
entity; and
(2) The failure to comply was insignificant with respect to the
offering as a whole, provided that any failure to comply with paragraph
(c) of 230.502, paragraph (b)(2)(i) of 230.504, paragraphs (b)(2)(i)
and (ii) of 230.505 and paragraph (b)(2)(i) of 230.506 shall be deemed
to be significant to the offering as a whole; and
(3) A good faith and reasonable attempt was made to comply with all
applicable terms, conditions and requirements of 230.504, 230.505 or
230.506.
(b) A transaction made in reliance on 230.504, 230.505 or 230.506
shall comply with all applicable terms, conditions and requirements of
Regulation D. Where an exemption is established only through reliance
upon paragraph (a) of this section, the failure to comply shall
nonetheless be actionable by the Commission under section 20 of the Act.
(54 FR 11374, Mar. 20, 1989)
17 CFR 230.508 Regulation E -- Exemption for Securities of Small
Business Investment Companies
Authority: Sections 230.601 to 230.610a issued under sec. 19, 48
Stat. 85, as amended; 15 U.S.C. 77s.
Source: Sections 230.601 to 230.610a appear at 23 FR 10484, Dec.
30, 1958, unless otherwise noted.
Cross Reference: For regulations of Small Business Administration
under the Small Business Investment Act of 1958, see 13 CFR, Chapter I.
17 CFR 230.601 Definitions of terms used in 230.601 to 230.610a.
As used in 230.601 to 230.610a, the following terms shall have the
meaning indicated:
Act. The term Act refers to the Securities Act of 1933 unless
specifically stated otherwise.
Affiliate. An affiliate of an issuer is a person controlling,
controlled by or under common control with such issuer. An individual
who controls an issuer is also an affiliate of such issuer.
Notification. The term notification means the notification required
by 230.604.
Offering Circular. The term offering circular means the offering
circular required by 230.605.
State. A State is any State, Territory or insular possession of the
United States, or the District of Columbia.
Underwriter. The term underwriter shall have the meaning given in
section 2(11) of the Act.
17 CFR 230.602 Securities exempted.
(a) Except as hereinafter provided in this rule, securities issued by
any small business investment company which is registered under the
Investment Company Act of 1940, or any closed-end investment company
that has elected to be regulated as a business development company under
the Investment Company Act of 1940 or has notified the Commission that
it intends to elect to be regulated as a business development company
pursuant to section 54 of the Investment Company Act of 1940, will be
exempt from registration under the Securities Act of 1933, subject to
the terms and conditions of 230.601 to 230.610a. As used in this
paragraph, the term small business investment company means any company
which is licensed as a small business investment company under the Small
Business Investment Act of 1958 or which has received the preliminary
approval of the Small Business Administration and has been notified by
the Administration that it may submit a license application. As used in
this paragraph, the term business development company means any
closed-end investment company which meets the definitional requirements
of section 2(a)(48) (A) and (B) of the Investment Company Act of 1940
(15 U.S.C. 80a-2(a)(48)).
(b) No exemption under 230.601 to 230.610a shall be available for
the securities of any issuer if such issuer or any of its affiliates:
(1) Has filed a registration statement which is the subject of any
proceeding or examination under section 8 of the Act, or is the subject
of any refusal order or stop order entered thereunder within five years
prior to the filing of the notification;
(2) Is subject to pending proceedings under 230.610 or any similar
rule adopted under section 3(b) of the Act, or to an order entered
thereunder within five years prior to the filing of such notification;
(3) Has been convicted within five years prior to the filing of such
notification of any crime or offense involving the purchase or sale of
securities;
(4) Is subject to any order, judgment or decree of any court of
competent jurisdiction, entered within five years prior to the filing of
such notification, temporarily or permanently restraining or enjoining
such person from engaging in or continuing any conduct or practice in
connection with the purchase or sale of securities;
(5) Is subject to pending proceedings under section 8(e) of the
Investment Company Act of 1940 or to any suspension or revocation order
issued thereunder;
(6) Is subject to an injunction issued pursuant to section 35(d) of
the Investment Company Act of 1940; or
(7) Is subject to a U.S. Post Office fraud order.
(c) No exemption under 230.601 to 230.610a shall be available for
the securities of any issuer, if any of its directors, officers or
principal security holders, any investment adviser or any underwriter of
the securities to be offered, or any partner, director or officer of any
such investment advisor or underwriter:
(1) Has been convicted within ten years prior to the filing of the
notification of any crime or offense involving the purchase or sale of
any security or arising out of such person's conduct as an underwriter,
broker, dealer or investment adviser;
(2) Is temporarily or permanently restrained or enjoined by any court
from engaging in or continuing any conduct or practice in connection
with the purchase or sale of any security or arising out of such
person's conduct as an underwriter, broker, dealer or investment
adviser;
(3) Is subject to an order of the Commission entered pursuant to
section 15(b) or 15A(1) of the Securities Exchange Act of 1934; has
been found by the Commission to be a cause of any such order which is
still in effect; or is subject to an order of the Commission entered
pursuant to section 203 (d) or (e) of the Investment Advisers Act of
1940;
(4) Is suspended or has been expelled from membership in a national
securities dealers association or a national securities exchange for
conduct inconsistent with just and equitable principles of trade; or
(5) Is subject to a U.S. Post Office fraud order.
(d) No exemption under 230.601 to 230.610a shall be available for
the securities of any issuer if any underwriter of such securities, or
any director, officer or partner of any such underwriter was, or was
named as, an underwriter of any securities:
(1) Covered by any registration statement which is the subject of any
proceeding or examination under section 8 of the Act, or is the subject
of any refusal order or stop order entered thereunder within five years
prior to the filing of the notification; or
(2) Covered by any filing which is subject to pending proceedings
under 230.610 or any similar rule adopted under section 3(b) of the
Act, or to an order entered thereunder within five years prior to the
filing of such notification.
(e) Paragraph (b), (c) or (d) of this section shall not apply to the
securities of any issuer if the Commission determines, upon a showing of
good cause, that it is not necessary under the circumstances that the
exemption be denied. Any such determination by the Commission shall be
without prejudice to any other action by the Commission in any other
proceeding or matter with respect to the issuer or any other person.
(Secs. 3(b) and 3(c) Securities Act of 1933 (15 U.S.C. 77c (b) and
(c)); sec. 38, Investment Company Act of 1940 (15 U.S.C. 80a-37))
(23 FR 10484, Dec. 30, 1958, as amended at 49 FR 35344, Sept. 7,
1984)
17 CFR 230.603 Amount of securities exempted.
(a) The aggregate offering price of all of the following securities
of the issuer shall not exceed $5,000,000:
(1) All securities presently being offered under 230.601 to
230.610a, or specified in the notification as proposed to be so offered;
(2) All securities previously sold pursuant to an offering under
230.601 to 230.610a, commenced within one year prior to the commencement
of the proposed offering; and
(3) All securities sold in violation of section 5(a) of the Act
within one year prior to the commencement of the proposed offering.
Notwithstanding the foregoing, the aggregate offering price of all
securities so offered or sold on behalf of any one person other than the
issuer shall not exceed $100,000, except that this limitation shall not
apply if the securities are to be offered on behalf of the estate of a
deceased person within two years after the death of such person.
(b) The aggregate offering price of securities, which have a
determinable market value shall be computed upon the basis of such
market value as determined from transactions or quotations on a
specified date within 15 days prior to the date of filing the
notification, or the offering price to the public, whichever is higher:
Provided, That the aggregate gross proceeds actually received from the
public shall not exceed the maximum aggregate offering price permitted
in the particular case by paragraph (a) of this section.
(c) In computing the amount of securities which may be offered under
230.601 to 230.610a, there need not be included unsold securities the
offering of which has been withdrawn with the consent of the Commission
by amending the pertinent notification to reduce the amount stated
therein as proposed to be offered.
(15 U.S.C. 77c; secs. 3(b) and 3(c), Securities Act of 1933 (15
U.S.C. 77c (b) and (c)); sec. 38, Investment Company Act of 1940 (15
U.S.C. 80a-37))
(23 FR 10484, Dec. 30, 1958, as amended at 36 FR 7050, Apr. 14, 1971;
49 FR 35344, Sept. 7, 1984)
17 CFR 230.604 Filing of notification on Form 1-E.
(a) At least 10 days (Saturdays, Sundays and holidays excluded) prior
to the date on which the initial offering or sale of any securities is
to be made under 230.601 to 230.610a, there shall be filed with the
Commission four copies of a notification on Form 1-E. The Commission
may, however, in its discretion, authorize the commencement of the
offering or sale prior to the expiration of such 10-day period upon a
written request for such authorization. At the time of filing the
notification, the applicant shall pay to the Commission a fee of $100,
no part of which shall be refunded.
(b) The notification shall be signed by the issuer and each person,
other than the issuer, for whose account any of the securities are to be
offered. If the notification is signed by any person on behalf of any
other person, evidence of authority to sign on behalf of such other
person shall be filed with the notification, except where an officer of
the issuer signs on behalf of the issuer.
(c) Any amendment to the notification shall be signed in the same
manner as the original notification. Four copies of such amendment
shall be filed with the Commission at least 10 days prior to any
offering or sale of the securities subsequent to the filing of such
amendment, or such shorter period as the Commission, in its discretion,
may authorize upon a written request for such authorization.
(d) A notification or any exhibit or other document filed as a part
thereof may be withdrawn upon application unless the notification is
subject to an order under 230.610 at the time the application is filed
or becomes subject to such an order within 15 days (Saturdays, Sundays
and holidays excluded) thereafter: Provided, That a notification may
not be withdrawn after any of the securities proposed to be offered
thereunder have been sold. Any such application shall be signed in the
same manner as the notification.
(Secs. 3(b) and 3(c), Securities Act of 1933 (15 U.S.C. 77c (b) and
(c)); sec. 38, Investment Company Act of 1940 (15 U.S.C. 80a-37))
(23 FR 10484, Dec. 30, 1958, as amended at 37 FR 1471, Jan. 29, 1972;
49 FR 35344, Sept. 7, 1984)
17 CFR 230.605 Filing and use of the offering circular.
(a) Except as provided in paragraphs (b) or (f) of this rule and in
230.606:
(1) No written offer of securities of any issuer shall be made under
230.601 to 230.610a unless an offering circular containing the
information specified in Schedule A or Schedule B, as appropriate, is
concurrently given or has previously been given to the person to whom
the offer is made, or has been sent to such person under such
circumstances that it would normally have been received by him at or
prior to the time of such written offer; and
(2) No securities of such issuer shall be sold under 230.601 to
230.610a unless such an offering circular is given to the person to whom
the securities were sold, or is sent to such person under such
circumstances that it would normally be received by him, with or prior
to any confirmation of the sale, or prior to the payment by him of all
or any part of the purchase price of the securities, whichever first
occurs.
(b) Any written advertisement or other written communication, or any
radio or television broadcast, which states from whom an offering
circular may be obtained and in addition contains no more than the
following information may be published, distributed or broadcast at or
after the commencement of the public offering to any person prior to
sending or giving such person a copy of such circular:
(1) The name of the issuer of such security;
(2) The title of the security, the amount being offered, and the
per-unit offering price to the public; and
(3) The identity of the general type of business of the issuer.
(c) The offering circular may be printed, mimeographed, lithographed
or typewritten, or prepared by any similar process which will result in
clearly legible copies. If printed, it shall be set in roman type at
least as large as ten-point modern type, except that financial
statements and other statistical or tabular matter may be set in roman
type at least as large as eight-point modern type. All type shall be
leaded at least two points.
(d) If the offering is not completed within nine months from the date
of the offering circular, a revised offering circular shall be prepared,
filed and used in accordance with 230.601 to 230.610a as for an
original offering circular. In no event shall an offering circular be
used which is false or misleading in light of the circumstances then
existing.
(e) Four copies of the offering circular required by this section,
which is to be used at the commencement of the offering, shall be filed
with the notification at the time such notification is filed and shall
be deemed a part thereof. If the offering circular is thereafter
revised or amended, four copies of such revised or amended circular
shall be filed as an amendment to the notification at least 10 days
prior to its use, or such shorter period as the Commission may, in its
discretion, authorize upon a written request for such authorization.
(f) An offering circular filed pursuant to paragraph (e) may be
distributed prior to the expiration of the 10-day waiting periods for
offerings provided for in 230.604 (a) and (c) and paragraph (e) of this
section and such distribution may be accompanied or followed by oral
offers related thereto, provided the conditions in paragraphs (f)(1)
through (f)(4) are met. For the purposes of this section, any offering
circular distributed prior to the expiration of the ten day waiting
period is called a Preliminary Offering Circular. Such Preliminary
Offering Circular may be used to meet the requirements of paragraph
(a)(2) of this section, provided that if a Preliminary Offering Circular
is inaccurate or inadequate in any material respect, a revised
Preliminary Offering Circular or an offering circular of the type
referred to in paragraph (f)(4) shall be furnished to all persons to
whom the securities are to be sold at least 48 hours prior to the
mailing of any confirmation of sale to such persons, or shall be sent to
such persons under such circumstances that it would normally be received
by them 48 hours prior to their receipt of confirmation of the sale.
(1) Such Preliminary Offering Circular contains substantially the
information required by this section to be included in an offering
circular, or contains substantially that information except for the
omission of information with respect to the offering price, underwriting
discounts or commissions, discounts or commissions to dealers, amount of
proceeds, conversion rates, call prices, or other matters dependent upon
the offering price.
(2) The outside front cover page of the Preliminary Offering Circular
shall bear the caption ''Preliminary Offering Circular,'' the date of
its issuance, and the following statement which shall run along the left
hand margin of the page and printed perpendicular to the text, in
boldface type at least as large as that used generally in the body of
such offering circular:
A notification pursuant to Regulation E relating to these securities
has been filed with the Securities and Exchange Commission. Information
contained in this Preliminary Offering Circular is subject to completion
or amendment. These securities may not be sold nor may offers to buy be
accepted prior to the time an offering circular which is not designated
as a Preliminary Offering Circular is delivered. This Preliminary
Offering Circular shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sales of these
securities in any state in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities
laws of any such state.
(3) The Preliminary Offering Circular relates to a proposed public
offering of securities that is to be sold by or through one or more
underwriters which are broker-dealers registered under section 15 of the
Securities Exchange Act of 1934, each of which has furnished a signed
Consent and Certification in the form prescribed as a condition to the
use of such offering circular;
(4) An offering circular contains all of the information specified in
Schedule A or Schedule B (17 CFR 230.610a) and which is not designated
as a Preliminary Offering Circular is furnished with or prior to
delivery of the confirmation of sale to any person who has been
furnished with a Preliminary Offering Circular pursuant to this
paragraph.
(Secs. 3(b) and 3(c), Securities Act of 1933 (15 U.S.C. 77c (b) and
(c)); sec. 38, Investment Company Act of 1940 (15 U.S.C. 80a-37))
(23 FR 10484, Dec. 30, 1958, as amended at 49 FR 35344, Sept. 7,
1984)
17 CFR 230.606 Offering not in excess of $100,000.
No offering circular need be filed or used in connection with an
offering of securities under 230.601 to 230.610a if the aggregate
offering price of all securites of the issuer offered or sold without
the use of such an offering circular does not exceed $100,000 computed
in accordance with 230.603, Provided, The following conditions are met:
(a) There shall be filed as an exhibit to the notification four
copies of a statement setting forth the information (other than
financial statements) required by Schedule A or Schedule B to be set
forth in an offering circular.
(b) No advertisement, article or other communication published in any
newspaper, magazine or other periodical and no radio or television
broadcast in regard to the offering shall contain more than the
following information:
(1) The name of the issuer of such security;
(2) The title of the security, amount offered, and the per-unit
offering price to the public;
(3) The identity of the general type of business of the issuer; and
(4) By whom orders will be filled or from whom further information
may be obtained.
(Secs. 3(b) and 3(c), Securities Act of 1933 (15 U.S.C. 77c (b) and
(c)); sec. 38, Investment Company Act of 1940 (15 U.S.C. 80a-37))
(23 FR 10484, Dec. 30, 1958, as amended at 49 FR 35344, Sept. 7,
1984)
17 CFR 230.607 Sales material to be filed.
Four copies of each of the following communications prepared or
authorized by the issuer or anyone associated with the issuer, any of
its affiliates or any principal underwriter for use in connection with
the offering of any securities under 230.601 to 230.610a shall be
filed with the Commission at least five days (exclusive of Saturdays,
Sundays and holidays) prior to any use thereof, or such shorter period
as the Commission, in its discretion, may authorize:
(a) Every advertisement, article or other communication proposed to
be published in any newspaper, magazine or other periodical;
(b) The script of every radio or television broadcast; and
(c) Every letter, circular or other written communication proposed to
be sent, given or otherwise communicated to more than ten persons.
17 CFR 230.608 Prohibition of certain statements.
No offering circular or other written or oral communication used in
connection with any offering under 230.601 to 230.610a shall contain
any language stating or implying that the Commission has in any way
passed upon the merits of, or given approval to, guaranteed or
recommended the securities offered or the terms of the offering or has
determined that the securities are exempt from registration, or has made
any finding that the statements in any such offering circular or other
communication are accurate or complete.
17 CFR 230.609 Reports of sales hereunder.
Within 30 days after the end of each six-month period following the
date of the original offering circular, or of the statement required by
230.606, the issuer or other person for whose account the securities are
offered shall file with the Commission four copies of a report on Form
2-E1045 containing the information called for by that form. A final
report shall be made upon completion or termination of the offering and
may be made prior to the end of the six-month period in which the last
sale is made.
0451Filed as part of original document.
17 CFR 230.610 Suspension of exemption.
(a) The Commission may, at any time after the filing of a
notification, enter an order temporarily suspending the exemption, if it
has reason to believe that:
(1) No exemption is available under 230.601 to 230.610a for the
securities purported to be offered hereunder or any of the terms or
conditions of 230.601 to 230.610a have not been complied with,
including failure to file any report as required by 230.609.
(2) The notification, the offering circular or any other sales
literature contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements made, in
the light of the circumstances under which they are made, not
misleading;
(3) The offering is being made or would be made in violation of
section 17 of the Act;
(4) Any event has occurred after the filing of the notification which
would have rendered the exemption hereunder unavailable if it has
occurred prior to such filing;
(5) Any person specified in paragraph (b) of 230.602 has been
indicted for any crime or offense of the character specified in
paragraph (b)(3) thereof, or any proceeding has been initiated for the
purpose of enjoining any such person from engaging in or continuing any
conduct or practice of the character specified in paragraph (b)(4);
(6) Any person specified in paragraph (c) of 230.602 has been
indicted for any crime or offense of the character specified in
paragraph (c)(1) thereof, or any proceeding has been initiated for the
purpose of enjoining any such person from engaging in or continuing any
conduct or practice of the character specified in paragraph (c)(2); or
(7) The issuer or any officer, director or underwriter has failed to
cooperate, or has obstructed or refused to permit the making of an
investigation by the Commission in connection with any offering made or
proposed to be made hereunder.
(b) Upon the entry of an order under paragraph (a) of this section,
the Commission will promptly give notice to the persons on whose behalf
the notification was filed (1) that such order has been entered,
together with a brief statement of the reasons for the entry of the
order, and (2) that the Commission, upon receipt of a written request
within 30 days after the entry of such order, will, within 20 days after
the receipt of such request, set the matter down for hearing at a place
to be designated by the Commission. If no hearing is requested and none
is ordered by the Commission, the order shall become permanent on the
thirtieth day after its entry and shall remain in effect unless or until
it is modified or vacated by the Commission. Where a hearing is
requested or is ordered by the Commission, the Commission will, after
notice of an opportunity for such hearing, either vacate the order or
enter an order permanently suspending the exemption.
(c) The Commission may at any time after notice of and opportunity
for hearing, enter an order permanently suspending the exemption for any
reason upon which it could have entered a temporary suspension order
under paragraph (a) of this section. Any such order shall remain in
effect until vacated by the Commission.
(d) All notices required by this part shall be given to the person or
persons on whose behalf the notification was filed by personal service,
registered or certified mail or confirmed telegraphic notice at the
addresses of such persons given in the notification.
(23 FR 10484, Dec. 30, 1958, as amended at 29 FR 16982, Dec. 11,
1964)
17 CFR 230.610a Schedule A: Contents of offering circular for small
business investment companies; Schedule B: Contents of offering
circular for business development companies.
1. The information in the offering circular should be organized to
make it easier to understand the organization and operation of the
company. The required information need not be in any particular order,
except that Items 1 and 2 must be the first and second items in the
offering circular.
2. The offering circular, including the cover page, may contain more
information than is called for by this Schedule, provided that it is not
incomplete, inaccurate, or misleading. Also, the additional information
should not, by its nature, quantity, or manner of presentation, obscure
or impede understanding of required information.
The cover page of the offering circular shall include the following
information:
(a) The name of the issuer;
(b) The mailing address of the issuer's principal executive offices
including the zip code and the issuer's telephone number;
(c) The date of the offering circular;
(d) A list of the type and amount of securities offered (e.g., if the
securities offered include redemption or conversion features, so state);
(e) The following statement in capital letters printed in boldface
roman type at least as large as ten-point modern type and at least two
points leaded:
''THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM
REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION; HOWEVER, THE
COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES
BEING OFFERED ARE EXEMPT FROM REGISTRATION. THE SECURITIES AND EXCHANGE
COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY
SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON
THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING
LITERATURE.''
(f) The name of the underwriter or underwriters, if applicable;
(g) A cross-reference to the place in the offering circular
discussing the material risks involved in purchasing the securities,
printed in bold-face roman type at least as high as ten-point modern
type and at least two points leaded;
(h) The approximate date when the proposed sale to the public will
begin; and
(i) The information called for by the following table shall be given,
in substantially the tabular form indicated, on the outside front cover
page of the offering circular as to all securities being offered
(estimate, if necessary):
If the securities are to be offered on a best efforts basis, the
cover page should set forth the termination date, if any, of the
offering, any minimum required sale, and any arrangements to place the
funds received in an escrow, trust, or similar arrangement. The
following tabular presentation of the total maximum and minimum
securities to be offered should be combined with the table required
above:
1. The term commissions shall include all cash, securities,
contracts, or anything else of value, paid, to be set aside, disposed
of, or understandings with or for the benefit of any other persons in
which any underwriter is interested, made in connection with the sale of
such security.
2. Only commissions paid by the issuer in cash are to be indicated in
the table. Commissions paid by other persons or any form of non-cash
compensation shall be briefly identified in a note to the table with a
cross-reference to a more complete description elsewhere in the offering
circular.
3. If the securities are not to be offered for cash, state the basis
upon which the offering is to be made.
4. (a) If it is impracticable to state the price to the public,
briefly state the method by which the price is to be determined.
(b) Any finder's fees or similar payments must be disclosed in a note
to the table with a reference to a more complete discussion in the
offering circular.
(c) The amount of the expenses of the offering borne by the issuer,
including underwriting expenses to be borne by the issuer, should be
disclosed in a note to the table.
5. If any of the securities are to be offered for the account of any
security holder, state the identity of each selling security holder, the
amount owned by him, the amount offered for his account and the amount
to be owned after the offering.
(a) Concisely discuss the organization and operation or proposed
operation of the issuer. Include the following:
(i) Basic identifying information, including:
(A) The date and form of organization of the issuer and the name of
the state under whose laws it is organized;
(B) A brief description of the nature of a small business investment
company; and
(C) The classification and subclassification of the issuer as
specified in sections 4 and 5 of the Investment Company Act of 1940.
(ii) A concise description of the investment objectives and policies
of the issuer, including:
(A) If those objectives may be changed without a vote of the holders
of the majority of the voting securities, a brief statement to that
effect; and
(B) A brief discussion of how the issuer proposes to achieve its
objectives, including:
(1) The types of securities (for example, bonds, convertible
debentures, preferred stocks, common stocks) in which it may invest, and
the proportion of the assets which may be invested in each such type of
security;
(2) If the issuer proposes to have a policy of concentrating in a
particular industry or group of industries, identification of such
industry or industries. (Concentration, for purposes of this item, is
deemed to be 25% or more of the value of the issuer's total assets
invested or proposed to be invested in a particular industry or group of
industries).
(C) A concise description of any other policies of the issuer that
may not be changed without the vote of the majority of the outstanding
voting securities, including those policies which the issuer deems to be
fundamental within the meaning of Section 8(b) of the Investment Company
Act of 1940.
(D) A concise description of those significant investment policies or
techniques (such as investing for control or management or investing in
other investment companies) that are not described pursuant to
subparagraphs (B) or (C) above that issuer employs or has the current
intention of employing in the foreseeable future.
Note: If the effect of a policy is to prohibit a particular
practice, or, if the policy permits a particular practice but the issuer
has not employed that practice within the past year and has no current
intention of doing so in the foreseeable future, do not include
disclosure as to that policy.
(b) Discuss briefly the principal risk factors associated with
investment in the issuer, including factors peculiar to the issuer as
well as those generally attendant to investment in a small business
investment company with investment policies and objectives similar to
the issuer.
(a) If the securities are to be offered through underwriters, give
the names of the principal underwriters, and state the amounts
underwritten by each. Identify each underwriter having a material
relationship to the issuer and state the nature of the relationship.
State briefly the nature of the underwriters' obligation to take the
securities.
(b) State briefly the discounts and commissions to be allowed or paid
to dealers, including all cash, securities, contracts or other
consideration to be received by any dealer in connection with the sale
of the securities.
(c) If finder's fees are to be paid, identify the finder, the nature
of the services rendered and the nature of any relationship between the
finder and the issuer, its officers, directors, promoters, principal
stockholders and underwriters (including any affiliates thereof). If a
finder is not registered with the Commission as a broker or dealer,
disclose that fact.
(d) Outline briefly the plan of distribution of any securities being
issued which are to be offered through the selling efforts of brokers or
dealers or otherwise than through underwriters.
(e)(1) Describe any arrangements for the return of funds to
subscribers if all of the securities to be offered are not sold; if
there are no such arrangements, so state.
(2) If there will be material delay in the payment of the proceeds of
the offering by the underwriter to the issuer, the nature of the delay
and the effects on the issuer should be briefly described.
Issuer
(a) Give the full names and complete addresses of all directors,
officers, members of any advisory board of the issuer and any person who
owns more than 5 percent of any class of securities of the issuer (other
than the Small Business Administration if the issuer is a small business
investment company as defined in 230.602(a) of this chapter).
(b) Identify each person who as of a specified date no more than 30
days prior to the date of filing of this registration statement,
controls the issuer as specified in section 2(a)(9) of the Investment
Company Act of 1940.
(c) Give the business experience over the last five years of any
person named in (a) above who is or is expected to be significantly
involved in the investment decisions of the issuer or in providing
advisory services, direction or control of portfolio companies of the
issuer.
(d) State the aggregate annual remuneration of each of the three
highest-paid persons who are officers or directors of the issuer and all
officers and directors as a group during the issuer's last fiscal year.
State the number of persons in the group referred to above without
naming them.
(e) Describe all direct and indirect interests (by security holdings
or otherwise) of each person named in (a) above (i) in the issuer and
(ii) in any material transactions within the past two years or in any
material proposed transaction to which the issuer was or is to be a
party. Include the cost to such persons of any assets or services for
which any payment by or for the account of the issuer has been or is to
be made.
(f) Provide, if applicable, for each investment adviser of the issuer
as defined in section 2(a)(20) of the Investment Company Act of 1940:
(i) The name and address of the investment adviser and a brief
description of its experience as an investment adviser, and, if the
investment adviser is controlled by another person, the name of that
person and the general nature of its business. (If the investment
adviser is subject to more than one level of control, it is sufficient
to give the name of the ultimate control person.)
(ii) A brief description of the services provided by the investment
adviser. (If, in addition to providing investment advice, the
investment adviser or persons employed by or associated with the
investment adviser are, subject to the authority of the board of
directors, responsible for overall management of issuer's business
affairs, it is sufficient to state that fact in lieu of listing all
services provided.)
(iii) A brief description of the investment adviser's compensation.
(If the issuer has been in operation for a full fiscal year, provide the
compensation paid to the adviser for the most recent fiscal year as a
percentage of average net assets. No further information is required in
response to this Item if the adviser is paid on the basis of a
percentage of net assets and if the issuer has neither changed
investment advisers nor changed the basis on which the adviser was
compensated during the most recent fiscal year. If the fee is paid in
some manner other than on the basis of average net assets, briefly
describe the basis of payment. If the registrant has not been in
operation for a full fiscal year, state generally what the investment
adviser's fee will be as a percentage of average net assets, including
any breakpoints, but it is not necessary to include precise details as
to how the fee is computed or paid.)
Furnish the following information, in the tabular form indicated,
with respect to the portfolio companies of the issuer, as of a specified
date within 90 days prior to the date of filing the notification with
the Commission pursuant to an offering of securities under Regulation E.
1. Provide the city and state for address of portfolio companies.
2. State the value as of date of balance sheet required under Item 7.
(a) Describe concisely the nature and most significant attributes of
the security being offered, including: (i) a brief discussion of voting
rights; (ii) restrictions, if any, on the right freely to retain or
dispose of such security; (iii) conversion rights, if applicable; and
(iv) and any material obligations or potential liability associated with
ownership of such security (not including risks).
(b) If the rights of holders of such security may be modified
otherwise than by a vote of majority or more of the shares outstanding,
voting as a class, so state and explain briefly.
(c) If issuer has any other classes of securities outstanding (other
than bank borrowings or borrowings that are not senior securities under
Section 18(g) of the Investment Company Act of 1940 identify them and
state whether they have any preference over the security being offered.
(d) Describe briefly the issuer's policy with respect to dividends
and distributions, including any options shareholders may have as to the
receipt of such dividends and distributions.
(e) Describe briefly the tax consequences to investors of an
investment in the securities being offered. Such description should not
include detailed discussions of applicable law. If the issuer intends
to qualify for treatment under Subchapter M, it is sufficient, in the
absence of special circumstances, to state briefly that in that case:
(1) the issuer will distribute all of its net income and gains to
shareholders and that such distributions are taxable income or capital
gains; (ii) shareholders may be proportionately liable for taxes on
income and gains of the issuer but that shareholders not subject to tax
on their income will not be required to pay tax on amounts distributed
to them; and that (iii) the issuer will inform shareholders of the
amount and nature of such income or gains.
(f) Where there is a material disparity between the public offering
price and the effective cash cost to officers, directors, promoters and
affiliated persons for shares acquired by them in a transaction during
the past three years, or which they have a right to acquire, there
should be included a comparison of the public contribution under the
proposed public offering and the effective cash contribution of such
persons. In such cases, and in other instances where the extent of the
dilution makes it appropriate, the following shall be given: (1) the
net tangible book value per share before and after the distribution;
(2) the amount of the increase in such net tangible book value per share
attributable to the cash payment made by purchasers of the shares being
offered; and (3) the amount of the immediate dilution from the public
offering price which will be absorbed by such purchasers.
Furnish appropriate financial statements of the issuer as required
below. Such statements shall be prepared in accordance with generally
accepted accounting principles and practices. The statements required
for the issuer's latest fiscal year shall be certified by an independent
public accountant or certified public accountant in accordance with
Regulation S-X if the issuer has filed or is required to file with the
Commission certified financial statements for such fiscal year; the
statements filed for the period or periods preceding such latest year
need not be certified.
(a) A blance sheet as of a date within 90 days prior to the date of
filing the notification with the Commission.
(b) A profit and loss or income statement for each of the last two
fiscal years and for any subsequent period up to the date of the balance
sheet furnished pursuant to (a) above.
Development Companies
Same as General Instructions to Schedule A.
Item 1. Same as Item 1 of Schedule A.
(a) Concisely discuss the organization and operation or proposed
operation of the issuer. Include the following:
(i) Basic identifying information, including:
(A) The date and form of organization of the issuer and the name of
the state under the laws of which it is organized; and
(B) A brief description of the nature of a business development
company.
Note: A business development company having a wholly-owned small
business investment company subsidiary should disclose how the
subsidiary is regulated, e.g., as an investment company registered under
the Investment Company Act of 1940, and what percentage of the parent
company's assets are, or are expected to be, invested in the subsidiary.
The business development company should also describe the small
business investment company's operations, including any material
difference in investment policies between the business development
company and its small business investment company subsidiary.
(ii) A concise description of the investment objectives and policies
of the issuer, including:
(A) If those objectives may be changed without a vote of the holders
of the majority of the voting securities, a brief statement to that
effect; and
(B) A brief discussion of how the issuer proposes to achieve such
objectives, including:
(1) The types of securities (for example, bonds, convertible
debentures, preferred stocks, common stock) in which it may invest,
indicating the proportion of the assets which may be invested in each
such type of security;
(2) The issuer proposes to have a policy of concentrating in a
particular industry or group of industries, identification of such
industry or industries. (Concentration, for purposes of this item, is
deemed to be 25% or more of the value of the issuer's total assets
invested or proposed to be invested in a particular industry or group of
industries).
(3) In companies for the purpose of exercising control or management;
(4) The policy with respect to any assets that are not required to be
invested in eligible portfolio companies or other companies qualifying
under section 55 of the Investment Company Act of 1940;
(5) The policy with respect to rendering significant managerial
assistance to eligible portfolio companies or other companies qualifying
under section 55 of the Investment Company Act of 1940;
(6) The policy with respect to investing as part of a group.
(C) Identification of any other policies of the issuer that may not
be changed without the vote of the majority of the outstanding voting
securities, including the policy not to withdraw its election as a
business development company without approval by the majority of the
outstanding voting securities.
(D) A concise description of those significant investment policies or
techniques (such as investing for control or management) that are not
described pursuant to subparagraphs (B) or (C) above that the issuer
employs or has the current intention of employing in the forseeable
future.
(b) Discuss briefly the principal risk factors associated with
investment in the issuer, including factors peculiar to the issuer as
well as those generally attendant to investment in a business
development company with investment policies and objectives similar to
the issuer.
Item 3. Same as Item 3 of Schedule A.
Item 4. Same as Item 4 of Schedule A.
Item 5. Same as Item 5 of Schedule A.
Item 6. Same as Item 6 of Schedule A.
Item 7. Same as Item 7 of Schedule A.
(Secs. 3(b) and 3(c), Securities Act of 1933 (15 U.S.C. 77c (b) and
(c)); sec. 38, Investment Company Act of 1940 (15 U.S.C. 80a-37))
(49 FR 35345, Sept. 7, 1984)
17 CFR 230.610a Regulation F -- Exemption for Assessments on Assessable
Stock and for Assessable Stock Offered or Sold to Realize Amount of
Assessment Thereon
Authority: Sections 230.651 to 230.656 issued under sec. 19, 48
Stat. 85, as amended; 15 U.S.C. 77s.
Source: Sections 230.651 to 230.656 appear at 24 FR 6386, Aug. 8,
1959, unless otherwise noted.
17 CFR 230.651 Scope of exemption.
(a) The following shall be exempt from registration under the Act,
subject to the terms and conditions of 230.651 to 230.656:
(1) Assessments on assessable stock of any corporation incorporated
under the laws of, and having its principal business operations in, any
State or Territory of the United States, or the District of Columbia;
(2) Assessable stock of any such corporation offered or sold at
public auction or otherwise for the purpose of realizing the amount of
an assessment levied thereon, or reoffered to the public by an
underwriter or dealer.
(b) The amount of the following shall not exceed $300,000 in any
period of one year commencing on or after July 1, 1959.
(1) The aggregate amount of all assessments levied on assessable
stock of the issuer;
(2) The aggregate offering price of all securities of the issuer
offered under 230.651 to 230.656 or any other rule or regulation
adopted pursuant to section 3(b) of the Act; and
(3) The aggregate sale price of all securities of the issuer sold in
violation of section 5(a) of the Act.
(c) Notwithstanding the foregoing, no exemption under 230.651 to
230.656 shall be available to an issuer so long as the issuer is subject
to a suspension order issued pursuant to 230.656, or any similar order
issued pursuant to any other rule or regulation under the Act, unless
the Commission determines, upon a showing of good cause, that it is not
necessary under the circumstances that the exemption be denied. Any
such determination by the Commission shall be without prejudice to any
other action by the Commission in any other proceeding or matter with
respect to the issuer or any other person.
17 CFR 230.652 Filing of notification.
At least 10 days (Saturdays, Sundays, and holidays excluded) prior to
the date of which the initial offering of any securities is to be made
under 230.651 to 230.656, there shall be filed with the Regional
Office of the Commission for the region in which the issuer conducts its
principal business operations four copies of a notification on Form 1-F
containing the information specified in that form. At the time of
filing the notification, the applicant shall pay to the Commission a fee
of $100, no part of which shall be refunded. The Commission may, in its
discretion authorize the commencement of the offering prior to the
expiration of such 10-day period upon a written request for such
authorization.
(37 FR 1471, Jan. 29, 1972)
17 CFR 230.653 Information to be given stockholders and others.
Every notice or advertisement of the assessment or of any delinquent
assessment sale which is sent to holders of the issuer's assessable
stock or otherwise published shall include or be accompanied by a
reasonably detailed statement of the purposes for which the proceeds
from the assessment and from any delinquent assessment sales are to be
used.
17 CFR 230.654 Sales material to be filed.
Four copies of each of the following communications prepared or
authorized by the issuer or anyone associated with the issuer or any of
its affiliates or by any underwriter, for use in connection with the
offering of any securities under 230.651 to 230.656 shall be filed,
with the Office of the Commission with which the notification is filed,
at least ten days (exclusive of Saturdays, Sundays and holidays) prior
to any use thereof, or such shorter period as the Commission, in its
discretion, may authorize:
(a) Every notice or advertisement proposed to be published in any
newspaper, magazine or other periodical;
(b) The script of every radio or television broadcast; and
(c) Every letter, circular or other written communication proposed to
be sent, given or otherwise communicated to more than ten persons.
17 CFR 230.655 Prohibition of certain statements.
No written or oral communication used in connection with any offering
under 230.651 to 230.656 shall contain any language stating or
implying that the Commission has in any way passed upon the merits of,
or given approval to, any securities of the issuer, has determined that
the assessment or proposed assessment is necessary or desirable or that
the offering is exempt from registration, or has made any finding that
the statements contained in such communication are accurate or complete.
17 CFR 230.656 Suspension of exemption.
(a) The Commission may, at any time after the filing of a
notification, issue an order temporarily suspending the exemption if it
has reason to believe that:
(1) No exemption is available under 230.651 to 230.656 for the
securities proposed or purported to be offered hereunder, or any of the
terms or conditions of 230.651 to 230.656 have not been complied with;
(2) Any written communication or radio or television broadcast used
or proposed to be used in connection with the offering contains any
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they are made, not misleading;
(3) The offering is being made or would be made in violation of
section 17 of the Act;
(4) The issuer or any promoter, director or officer thereof has
failed to cooperate, or has obstructed or refused to permit the making
of any investigation by the Commission in connection with any offering
made or proposed to be made hereunder.
(b) Upon the issuance of an order under paragraph (a) of this
section, the Commission will promptly give notice to the issuer (1) that
such order has been issued, together with a brief statement of the
reasons for the issuance of the order, and (2) that the Commission, upon
receipt of a written request within 30 days after the issuance of such
order, will within 20 days after the receipt of such request, set the
matter down for hearing at a place to be designated by the Commission.
If no hearing is requested and none is ordered by the Commission, the
order shall become permanent on the thirtieth day after its issuance and
shall remain in effect unless or until it is modified or vacated by the
Commission. Where a hearing is requested or is ordered by the
Commission, the Commission will, after notice of an opportunity for such
hearing, either vacate the order or issue an order permanently
suspending the exemption.
(c) The Commission may at any time after notice of and opportunity
for hearing, issue an order permanently suspending the exemption for any
reason upon which it could have issued a temporary suspension order
under paragraph (a) of this section. Any such order shall remain in
effect until vacated by the Commission.
(d) All notices required by this part shall be given to the issuer by
personal service, registered or certified mail or confirmed telegraphic
notice at the address of the issuer given in the notification.
(24 FR 6386, Aug. 8, 1959, as amended at 29 FR 16982, Dec. 11, 1964)
17 CFR 230.701 Exemption for offers and sales of securities pursuant to
certain compensatory benefit plans and contracts relating to
compensation.
Preliminary Notes: (1) Nothing in this rule is intended to be or
should be construed as in any way relieving issuers or persons acting on
behalf of issuers from providing disclosure to employees or other
persons within the scope of the rule adequate to satisfy the antifraud
provisions of the federal securities laws. The rule only provides an
exemption from the registration requirements of the Securities Act of
1933 (the Act) (15 U.S.C. 77a et seq.).
(2) Nothing in the rule obviates the need to comply with any
applicable state law relating to the offer and sale of securities.
(3) Attempted compliance with the rule does not act as an exclusive
election; the issuer can also claim the availability of any other
applicable exemption.
(4) The rule is only available to the issuer of the securities and
not to any affiliate of the issuer or to any other person for reselling
the securities. The rule provides an exemption only for the
transactions in which the securities are offered or sold by the issuer,
not for the securities themselves.
(5) In view of the primary purpose of the rule, which is to provide
an exemption from the registration requirements of the Act for
securities issued in compensatory circumstances, the rule is not
available for plans or schemes to circumvent this purpose, such as to
raise capital. In such cases, registration or some other exemption from
registration under the Act is required.
(6) The exemption provided by the rule is not available to any issuer
for any transaction which, while in technical compliance with such rule,
is part of a plan or scheme to evade the registration provisions of the
Act. In such cases, registration under the Act is required.
(a) Exemption. Offers and sales of securities that satisfy the
provisions of paragraphs (b) and (c) of this 230.701 by an issuer that
is not subject to the reporting requirements of section 13 or 15(d) of
the Securities Exchange Act of 1934 (the Exchange Act) (15 U.S.C. 78a et
seq.) and is not an investment company registered or required to be
registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et
seq.) shall be exempt from the provisions of section 5 of the Act by
virtue of section 3(b) of the Act. Issuers may rely on this rule with
respect to offers made prior to the adoption of this 230.701 if in
accordance with this section had it been in effect, or offers made
pursuant to this 230.701 prior to the issuer becoming subject to the
reporting requirements of section 13 or 15(d) of the Exchange Act, and
sales consummating such offers may be made thereafter in reliance upon
this provision.
(b) Conditions to be met. (1) An exemption under this 230.701
applies only to offers and sales of an issuer's securities (i) pursuant
to a written compensatory benefit plan and interests in such a plan
established by that issuer, its parents or majority-owned subsidiaries
for the participation of their employees, directors, general partners,
trustees (where the issuer is a business trust), officers, or
consultants or advisers, provided that bona fide services shall be
rendered by consultants or advisers and such services must not be in
connection with the offer and sale of securities in a capital-raising
transaction, or (ii) pursuant to a written contract relating to the
compensation of such persons.
(2) For purposes of 230.701 and 702, a compensatory benefit plan
means any purchase, savings, option, bonus, stock appreciation, profit
sharing, thrift, incentive, pension or similar plan.
(3) The issuer, its parent or majority-owned subsidiary shall provide
each participant in a compensatory benefit plan with a copy of such
plan. A copy of a written contract relating to compensation shall be
provided to the parties.
(4)(i) Aggregate offering price means the sum of all cash, property,
notes, cancellation of debt or other consideration to be received by the
issuer for the issuance of the securities. Non-cash consideration
should be valued in reference to bona fide sales of that consideration
made within a reasonable time, or, in the absence of sales, on the fair
value as determined by an accepted standard.
(ii) No adjustment to the aggregate offering price in this section
shall be made for other offerings made in reliance upon other rules or
regulations adopted pursuant to section 3(b) of the Act. The aggregate
offering price under other rules and regulations adopted pursuant to
section 3(b) shall not be reduced by offerings made under this 230.701.
(iii) The number of shares permitted to be offered and sold under
230.701(b)(5)(ii) shall not be reduced by the number of shares offered
or sold in reliance upon other rules or regulations adopted pursuant to
section 3(b) of the Act, or vice versa.
(5) The amount of securities offered and sold in reliance on 230.701
shall not exceed the greater of $500,000 or the amount determined by
(b)(5)(i) or (ii) of this section; provided, however, that the
aggregate offering price of securities of the issuer subject to
outstanding offers made in reliance on 230.701 plus securities of the
issuer sold in the preceding 12 months in reliance on 230.701 shall in
no event exceed $5,000,000.
(i) The aggregate offering price of securities of the issuer subject
to outstanding offers in reliance on 230.701 plus securities of the
issuer sold in the preceding 12 months in reliance on 230.701 shall not
exceed 15% of the total assets of the issuer, measured at the end of its
last fiscal year; or
(ii) The number of securities of the issuer subject to outstanding
offers in reliance on 230.701 plus securities of the issuer sold in the
preceding 12 months in reliance on 230.701 shall not exceed 15% of the
outstanding securities of that class. The outstanding securities of a
class shall include securities of that class issuable pursuant to the
exercise of outstanding options, warrants, rights or conversion of
convertible securities, unless such options, warrants, rights or
convertible securities were issued under 230.701. If the securities
offered or sold under 230.701 are convertible securities, the number of
securities subject to outstanding offers and sold under this subsection
shall be deemed to be the shares of the securities into which such
securities may be converted.
(6) Offers and sales exempt pursuant to this 230.701 are deemed to
be a part of a single, discrete offering and are not subject to
integration with any other offering or sale whether registered under the
Act or otherwise exempt from the registration requirements of the Act.
(c) Resale limitations. (1) Securities issued pursuant to this
230.701 are deemed to be restricted securities as defined in 230.144.
(2) Resales of such securities must be in compliance with the
registration requirements of the Act or an exemption therefrom.
(3) Ninety days after the issuer becomes subject to the reporting
requirements of section 13 or 15(d) of the Exchange Act, securities
issued in a 230.701 transaction may be resold by persons other than
affiliates in reliance on 230.144 without compliance with paragraphs
(c), (d), (e) and (h) thereof, and by affiliates without compliance with
paragraph (d) thereof.
(53 FR 12921, Apr. 20, 1988)
17 CFR 230.702(T) Notice of sales pursuant to an exemption under
230.701.
(a) The issuer shall file with the Commission five copies of a notice
on Form 701 (17 CFR 239.701) not later than 30 days after the first sale
of securities which brings the aggregate sales pursuant to benefit plans
and/or contracts relating to compensation exempt from the registration
requirements of the Act by 230.701 above $100,000 and thereafter
annually within 30 days following the end of the issuer's fiscal year.
(b) One copy of every notice on Form 701 shall be manually signed by
a person duly authorized by the issuer.
(c) New filings and annual amendments must contain all the
information requested on Form 701. Corrected filings need only report
the name of the issuer and plan and the information being corrected. A
separate filing is not required for each plan or contract relating to
compensation.
(d) A notice on Form 701 is considered filed with the Commission
under paragraph (a) of this 230.702 on the date of its receipt at the
Commission's principal offices in Washington, DC.
(e) This section shall be effective until May 20, 1993.
(53 FR 12922, Apr. 20, 1988)
17 CFR 230.703(T) Disqualifying provision relating to an exemption
under 230.701.
(a) No exemption under 230.701 shall be available for an issuer if
such issuer, any of its predecessors or affiliates have been subject to
any order, judgment, or decree of any court of competent jurisdiction
temporarily, preliminarily or permanently enjoining such person for
failure to comply with 230.702.
(b) Paragraph (a) of this section shall not apply if the Commission
determines, upon a showing of good cause, that it is not necessary under
the circumstances that the exemption be denied.
(c) This section shall be effective until May 20, 1993.
(53 FR 12922, Apr. 20, 1988)
17 CFR 230.703(T) Regulation S -- Rules Governing Offers and Sales Made
Outside the United States Without Registration Under the Securities Act
of 1933
Source: Sections 230.901 to 230.904 appear at 55 FR 18322, May 2,
1990, unless otherwise noted.
1. The following rules relate solely to the application of Section 5
of the Securities Act of 1933 (the Act'') (15 U.S.C. 77e) and not to
antifraud or other provisions of the federal securities laws.
2. In view of the objective of these rules and the policies
underlying the Act, Regulation S is not available with respect to any
transaction or series of transactions that, although in technical
compliance with these rules, is part of a plan or scheme to evade the
registration provisions of the Act. In such cases, registration under
the Act is required.
3. Nothing in these rules obviates the need for any issuer or any
other person to comply with the securities registration or broker-dealer
registration requirements of the Securities Exchange Act (the Exchange
Act''), whenever such requirements are applicable.
4. Nothing in these rules obviates the need to comply with any
applicable state law relating to the offer and sale of securities.
5. Attempted compliance with any rule in Regulation S does not act as
an exclusive election; a person making an offer or sale of securities
may also claim the availability of any applicable exemption from the
registration requirements of the Act.
6. Regulation S is available only for offers and sales of securities
outside the United States. Securities acquired overseas, whether or not
pursuant to Regulation S, may be resold in the United States only if
they are registered under the Act or an exemption from registration is
available.
7. Nothing in these rules precludes access by journalists for
publications with a general circulation in the United States to offshore
press conferences, press releases and meetings with company press
spokespersons in which an offshore offering or tender offer is
discussed, provided that the information is made available to the
foreign and United States press generally and is not intended to induce
purchases of securities by persons in the United States or tenders of
securities by United States holders in the case of exchange offers.
8. The provisions of this Regulation S shall not apply to offers and
sales of securities issued by open-end investment companies or unit
investment trusts registered or required to be registered or closed-end
investment companies required to be registered, but not registered,
under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) (the
1940 Act).
17 CFR 230.901 General statement.
For the purposes only of section 5 of the Act (15 U.S.C. 77e), the
terms offer, offer to sell, sell, sale, and offer to buy shall be deemed
to include offers and sales that occur within the United States and
shall be deemed not to include offers and sales that occur outside the
United States.
17 CFR 230.902 Definitions.
As used in Regulation S, the following terms shall have the meanings
indicated.
(a) Designated Offshore Securities Market. Designated offshore
securities market means:
(1) The Eurobond market, as regulated by the Association of
International Bond Dealers; the Amsterdam Stock Exchange; the
Australian Stock Exchange Limited; the Bourse de Bruxelles; the
Frankfurt Stock Exchange; The Stock Exchange of Hong Kong Limited; The
International Stock Exchange of the United Kingdom and the Republic of
Ireland, Ltd.; the Johannesburg Stock Exchange; the Bourse de
Luxembourg; the Borsa Valori di Milan; the Montreal Stock Exchange;
the Bourse de Paris; the Stockholm Stock Exchange; the Tokyo Stock
Exchange; the Toronto Stock Exchange; the Vancouver Stock Exchange;
and the Zurich Stock Exchange; and
(2) Any foreign securities exchange or non-exchange market designated
by the Commission. Attributes to be considered in determining whether
to designate such a foreign securities market, among others, include:
(i) Organization under foreign law;
(ii) Association with a generally recognized community of brokers,
dealers, banks, or other professional intermediaries with an established
operating history;
(iii) Oversight by a governmental or self-regulatory body;
(iv) Oversight standards set by an existing body of law;
(v) Reporting of securities transactions on a regular basis to a
governmental or self-regulatory body;
(vi) A system for exchange of price quotations through common
communications media; and
(vii) An organized clearance and settlement system.
(b) Directed Selling Efforts. (1) Directed selling efforts means any
activity undertaken for the purpose of, or that could reasonably be
expected to have the effect of, conditioning the market in the United
States for any of the securities being offered in reliance on this
Regulation S. Such activity includes placement of an advertisement in a
publication with a general circulation in the United States that refers
to the offering of securities being made in reliance upon this
Regulation S.
(2) Notwithstanding paragraph (b)(1) of this section, placement of an
advertisement required to be published under United States or foreign
law, or under rules or regulations of a United States or foreign
regulatory or self-regulatory authority, shall not be deemed directed
selling efforts, provided the advertisement contains no more information
than legally required and includes a statement to the effect that the
securities have not been registered under the Act and may not be offered
or sold in the United States (or to a U.S. person, if the advertisement
relates to an offering under 230.903(c) (2) or (3)) absent registration
or an applicable exemption from the registration requirements.
(3) Notwithstanding paragraph (b)(1) of this section, contact with
persons excluded from the definition of U.S. person pursuant to
paragraph (o)(7) of this section or persons holding accounts excluded
from the definition of U.S. person pursuant to paragraph (o)(2) of this
section, solely in their capacities as holders of such accounts, shall
not be deemed directed selling efforts.
(4) Notwithstanding paragraph (b)(l) of this section, a tombstone
advertisement in a publication with a general circulation in the United
States shall not be deemed directed selling efforts, provided:
(i) The publication has less than 20% of its circulation, calculated
by aggregating the circulation of its U.S. and comparable non-U.S.
editions, in the United States;
(ii) Such advertisement contains a legend to the effect that the
securities have not been registered under the Act and may not be offered
or sold in the United States (or to a U.S. person, if the advertisement
relates to an offering under 230.903(c) (2) or (3)) absent registration
or an applicable exemption from the registration requirements; and
(iii) Such advertisement contains no more information than:
(A) The issuer's name;
(B) The amount and title of the securities being sold;
(C) A brief indication of the issuer's general type of business;
(D) The price of the securities;
(E) The yield of the securities, if debt securities with a fixed
(non-contingent) interest provision;
(F) The name and address of the person placing the advertisement, and
whether such person is participating in the distribution;
(G) The names of the managing underwriters;
(H) The dates, if any, upon which the sales commenced and concluded;
(I) Whether the securities are offered or were offered by rights
issued to security holders and, if so, the class of securities that are
entitled or were entitled to subscribe, the subscription ratio, the
record date, the dates (if any) upon which the rights were issued and
expired, and the subscription price; and
(J) Any legend required by law or any foreign or U.S. regulatory or
self-regulatory authority.
(5) Notwithstanding paragraph (b)(1) of this section, bona fide
visits to real estate, plants or other facilities located in the United
States and tours thereof conducted for a prospective investor by an
issuer, a distributor, any of their respective affiliates or a person
acting on behalf of any of the foregoing shall not be deemed directed
selling efforts.
(6) Notwithstanding paragraph (b)(1) of this section, distribution in
the United States of a foreign broker-dealer's quotations by a
third-party system that distributes such quotations primarily in foreign
countries will not be deemed directed selling efforts if:
(i) Securities transactions cannot be executed between foreign
broker-dealers and persons in the United States through the system; and
(ii) The issuer, distributors, their respective affiliates, persons
acting on behalf of any of the foregoing, foreign broker dealers and
other participants in the system do not initiate contacts with U.S.
persons or persons within the United States, beyond those contacts
exempted under Rule 15a-6 under the Exchange Act (17 CFR 240.15a-6).
(c) Distributor. Distributor means any underwriter, dealer, or other
person who participates, pursuant to a contractual arrangement, in the
distribution of the securities offered or sold in reliance on this
Regulation S.
(d) Domestic Issuer. Domestic issuer means any issuer other than a
foreign issuer.
(e) Foreign Government. Foreign government means the government of
any foreign country or of any political subdivision of a foreign
country, provided that such person would qualify to register securities
under the Act on Schedule B.
(f) Foreign Issuer. (1) Foreign issuer means any issuer that is:
(i) A foreign government;
(ii) A national of any foreign country; or
(iii) A corporation or other organization incorporated or organized
under the laws of any foreign country.
(2) Notwithstanding paragraph (f)(1) of this section, an issuer other
than a foreign government shall not be deemed a foreign issuer if:
(i) More than 50 percent of the outstanding voting securities of such
issuer is held of record by persons for whom a U.S. address appears on
the records of the issuer, its transfer agent, voting trustee,
depositary, or person performing similar functions; and
(ii) Any of the following factors are present:
(A) The majority of the executive officers or directors of the issuer
are U.S. citizens or residents;
(B) More than 50 percent of the assets of the issuer are located in
the United States; or
(C) The business of the issuer is administered principally in the
United States.
(g) Held of Record. Held of record has the meaning assigned to that
term in Rule 12g5-1 under the Exchange Act (17 CFR 240.12g5-1).
(h) Offering Restrictions. Offering restrictions means:
(1) Each distributor agrees in writing that all offers and sales of
the securities prior to the expiration of the restricted period
specified in 230.903(c) (2) or (3), as applicable, shall be made only:
in accordance with the provisions of 230.903 or 230.904; pursuant to
registration of the securities under the Act; or pursuant to an
available exemption from the registration requirements of the Act; and
(2) All offering materials and documents (other than press releases)
used in connection with offers and sales of the securities prior to the
expiration of the restricted period specified in 230.903(c) (2) or (3),
as applicable, shall include statements to the effect that the
securities have not been registered under the Act and may not be offered
or sold in the United States or to U.S. persons (other than
distributors) unless the securities are registered under the Act, or an
exemption from the registration requirements of the Act is available.
Such statements shall appear:
(i) On the cover or inside cover page of any prospectus or offering
circular used in connection with the offer or sale of the securities;
(ii) In the underwriting section of any prospectus or offering
circular used in connection with the offer or sale of the securities;
and
(iii) In any advertisement made or issued by the issuer, any
distributor, any of their respective affiliates, or any person acting on
behalf of any of the foregoing. Such statements may appear in summary
form on prospectus cover pages and in advertisements.
(i) Offshore Transaction. (1) An offer or sale of securities is made
in an offshore transaction if:
(i) The offer is not made to a person in the United States; and
(ii) Either:
(A) At the time the buy order is originated, the buyer is outside the
United States, or the seller and any person acting on its behalf
reasonably believe that the buyer is outside the United States; or
(B) For purposes of:
(1) Section 230.903, the transaction is executed in, on or through a
physical trading floor of an established foreign securities exchange
that is located outside the United States; or
(2) Section 230.904, the transaction is executed in, on or through
the facilities of a designated offshore securities market described in
paragraph (a) of this section, and neither the seller nor any person
acting on its behalf knows that the transaction has been pre-arranged
with a buyer in the United States.
(2) Notwithstanding paragraph (i)(1) of this section, offers and
sales of securities specifically targeted at identifiable groups of U.S.
citizens abroad, such as members of the U.S. armed forces serving
overseas, shall not be deemed to be made in offshore transactions.
(3) Notwithstanding paragraph (i)(1) of this section, offers and
sales of securities to persons excluded from the definition of U.S.
person pursuant to paragraph (o)(7) of this section or persons holding
accounts excluded from the definition of U.S. person pursuant to
paragraph (o)(2) of this section, solely in their capacities as holders
of such accounts, shall be deemed to be made in offshore transactions.
(j) Overseas Directed Offering. Overseas directed offering means:
(1) An offering of securities of a foreign issuer that is directed
into a single country other than the United States to the residents
thereof and that is made in accordance with the local laws and customary
practices and documentation of such country; or
(2) An offering of non-convertible debt securities, or securities
described in 230.903(c)(4) (i) or (ii), of a domestic issuer that is
directed into a single country other than the United States to the
residents thereof and that is made in accordance with the local laws and
customary practices and documentation of such country, provided that the
principal and interest of the securities (or par value, as applicable)
are denominated in a currency other than U.S. dollars and such
securities are neither convertible into U.S. dollar-denominated
securities nor linked to U.S. dollars (other than through related
currency or interest rate swap transactions that are commercial in
nature) in a manner that in effect converts the securities to U.S.
dollar-denominated securities.
(k) Publication With a General Circulation in the United States. (1)
Publication with a general circulation in the United States means any
publication that:
(i) Is printed primarily for distribution in the United States; or
(ii) Has had, during the preceding twelve months, an average
circulation in the United States of 15,000 or more copies per issue.
(2) Notwithstanding paragraph (k)(1) of this section, only the U.S.
edition of any publication printing a separate U.S. edition will be
deemed a publication with a general circulation in the United States if:
(i) Such publication, without consideration of its U.S. edition,
would not meet the requirements of paragraph (k)(1) (i) or (ii) of this
section; and
(ii) The U.S. edition itself meets the requirements of paragraph
(k)(1) of this section.
(l) Reporting Issuer. Reporting issuer means an issuer other than an
investment company registered or required to register under the 1940 Act
that:
(1) Has a class of securities registered pursuant to section 12(b) or
12(g) of the Exchange Act (15 U.S.C. 78l(b) or 78l(g)) or is required
to file reports pursuant to Section 15(d) of the Exchange Act (15 U.S.C.
o8o(d)); and
(2) Has filed all the material required to be filed pursuant to
Section 13(a) or 15(d) of the Exchange Act (15 U.S.C. 78m(a) or 78o(d))
for a period of at least twelve months immediately preceding the offer
or sale of securities made in reliance upon this Regulation S (or for
such shorter period that the issuer was required to file such material).
(m) Restricted Period. Restricted period means a period that
commences on the later of the date upon which the securities were first
offered to persons other than distributors in reliance upon this
Regulation S or the date of closing of the offering, and expires a
specified period of time thereafter; Provided, however, that all offers
and sales by a distributor of an unsold allotment or subscription shall
be deemed to be made during the restricted period; provided, further,
that in a continuous offering, the restricted period shall commence upon
completion of the distribution, as determined and certified by the
managing underwriter or person performing similar functions; provided,
further, that in a continuous offering of non-convertible debt
securities offered and sold in identifiable tranches, the restricted
period for securities in a tranche shall commence upon completion of the
distribution of such tranche, as determined and certified by the
managing underwriter or person performing similar functions; provided,
further, that in a continuous offering of securities to be acquired upon
the exercise of warrants, the restricted period shall commence upon
completion of the distribution of the warrants, as determined and
certified by the managing underwriter or person performing similar
functions, if the following requirements are satisfied:
(1) Each warrant bears a legend stating that the warrant and the
securities to be issued upon its exercise have not been registered under
the Act and that the warrant may not be exercised by or on behalf of any
U.S. person unless registered under the Act or an exemption from such
registration is available;
(2) Each person exercising a warrant is required to give:
(i) Written certification that it is not a U.S. person and the
warrant is not being exercised on behalf of a U.S. person; or
(ii) A written opinion of counsel to the effect that the warrant and
the securities delivered upon exercise thereof have been registered
under the Act or are exempt from registration thereunder; and
(3) Procedures are implemented to ensure that the warrant may not be
exercised within the United States and that the securities may not be
delivered within the United States upon exercise, other than in
offerings deemed to meet the definition of offshore transaction pursuant
to paragraph (i)(3) of this section, unless registered under the Act or
an exemption from such registration is available.
(n) Substantial U.S. Market Interest. (1) Substantial U.S. market
interest with respect to a class of an issuer's equity securities means:
(i) The securities exchanges and inter-dealer quotation systems in
the United States in the aggregate constituted the single largest market
for such class of securities in the shorter of the issuer's prior fiscal
year or the period since the issuer's incorporation; or
(ii) 20 percent or more of all trading in such class of securities
took place in, on or through the facilities of securities exchanges and
inter-dealer quotation systems in the United States and less than 55
percent of such trading took place in, on or through the facilities of
securities markets of a single foreign country in the shorter of the
issuer's prior fiscal year or the period since the issuer's
incorporation.
(2) Substantial U.S. market interest with respect to an issuer's debt
securities means:
(i) Its debt securities and the securities described in
230.903(c)(4) (i) and (ii), in the aggregate, are held of record by 300
or more U.S. persons;
(ii) $1 billion or more of: the principal amount outstanding of its
debt securities, the greater of liquidation preference or par value of
its securities described in 230.903(c)(4)(i), and the principal amount
or principal balance of its securities described in 230.903(c)(4)(ii),
in the aggregate, is held of record by U.S. persons; and
(iii) 20 percent or more of: the principal amount outstanding of its
debt securities, the greater of liquidation preference or par value of
its securities described in 230.903(c)(4)(i), and the principal amount
or principal balance of its securities described in 230.903(c)(4)(ii),
in the aggregate, is held of record by U.S. persons.
(3) Notwithstanding paragraph (n)(2) of this section, substantial
U.S. market interest with respect to an issuer's debt securities is
calculated without reference to securities that qualify for the
exemption provided by section 3(a)(3) of the Act (15 U.S.C.
77c(a)(3)).
(o) U.S. Person. (1) U.S. person means:
(i) Any natural person resident in the United States;
(ii) Any partnership or corporation organized or incorporated under
the laws of the United States;
(iii) Any estate of which any executor or administrator is a U.S.
person;
(iv) Any trust of which any trustee is a U.S. person;
(v) Any agency or branch of a foreign entity located in the United
States;
(vi) Any non-discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary for the benefit or
account of a U.S. person;
(vii) Any discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary organized,
incorporated, or (if an individual) resident in the United States; and
(viii) Any partnership or corporation if:
(A) Organized or incorporated under the laws of any foreign
jurisdiction; and
(B) Formed by a U.S. person principally for the purpose of investing
in securities not registered under the Act, unless it is organized or
incorporated, and owned, by accredited investors (as defined in Rule
501(a) under the Act ( 230.501(a) of this chapter)) who are not natural
persons, estates or trusts.
(2) Notwithstanding paragraph (o)(1) of this section, any
discretionary account or similar account (other than an estate or trust)
held for the benefit or account of a non-U.S. person by a dealer or
other professional fiduciary organized, incorporated, or (if an
individual) resident in the United States shall not be deemed a U.S.
person.
(3) Notwithstanding paragraph (o)(1) of this section, any estate of
which any professional fiduciary acting as executor or administrator is
a U.S. person shall not be deemed a U.S. person if:
(i) An executor or administrator of the estate who is not a U.S.
person has sole or shared investment discretion with respect to the
assets of the estate; and
(ii) The estate is governed by foreign law.
(4) Notwithstanding paragraph (o)(1) of this section, any trust of
which any professional fiduciary acting as trustee is a U.S. person
shall not be deemed a U.S. person if a trustee who is not a U.S. person
has sole or shared investment discretion with respect to the trust
assets, and no beneficiary of the trust (and no settlor if the trust is
revocable) is a U.S. person.
(5) Notwithstanding paragraph (o)(1) of this section, an employee
benefit plan established and administered in accordance with the law of
a country other than the United States and customary practices and
documentation of such country shall not be deemed a U.S. person.
(6) Notwithstanding paragraph (o)(1) of this section, any agency or
branch of a U.S. person located outside the United States shall not be
deemed a U.S. person if:
(i) The agency or branch operates for valid business reasons; and
(ii) The agency or branch is engaged in the business of insurance or
banking and is subject to substantive insurance or banking regulation,
respectively, in the jurisdiction where located.
(7) The International Monetary Fund, the International Bank for
Reconstruction and Development, the Inter-American Development Bank, the
Asian Development Bank, the African Development Bank, the United
Nations, and their agencies, affiliates and pension plans, and any other
similar international organizations, their agencies, affiliates and
pension plans shall not be deemed U.S. persons.
(p) United States. United States means the United States of America,
its territories and possessions, any State of the United States, and the
District of Columbia.
17 CFR 230.903 Offers or sales of securities by the issuer, a
distributor, any of their respective affiliates, or any person acting on
behalf of any of the foregoing; conditions relating to specific
securities.
An offer or sale of securities by the issuer, a distributor, any of
their respective affiliates, or any person acting on behalf of any of
the foregoing, shall be deemed to occur outside the United States within
the meaning of 230.901 if it satisfies the following requirements:
(a) Requirement of Offshore Transaction. The offer or sale shall be
made in an offshore transaction.
(b) Prohibition Against Directed Selling Efforts. No directed
selling efforts shall be made in the United States by the issuer, a
distributor, any of their respective affiliates, or any person acting on
behalf of any of the foregoing.
(c) Additional Conditions -- (1) Securities of Certain Foreign
Issuers; Overseas Directed Offerings; Securities Backed By the Full
Faith and Credit of Foreign Government; Employee Benefit Plan
Securities. An offer or sale of securities may be made with no
conditions other than those set forth in 230.903 (a) and (b) if:
(i) The issuer is a foreign issuer that reasonably believes at the
commencement of the offering that:
(A) There is no substantial U.S. market interest in the class of
securities to be offered or sold (if equity securities are offered or
sold);
(B) There is no substantial U.S. market interest in its debt
securities (if debt securities are offered or sold);
(C) There is no substantial U.S. market interest in the securities to
be purchased upon exercise (if warrants are offered or sold); and
(D) There is no substantial U.S. market interest in either the
convertible securities or the underlying securities (if convertible
securities are offered or sold);
(ii) The securities are offered and sold in an overseas directed
offering;
(iii) The securities are backed by the full faith and credit of a
foreign government; or
(iv) The securities are offered and sold to employees of the issuer
or its affiliates pursuant to an employee benefit plan established and
administered in accordance with the law of a country other than the
United States, and customary practices and documentation of such
country, provided that:
(A) The securities are issued in compensatory circumstances for bona
fide services rendered to the issuer or its affiliates in connection
with their businesses and such services are not rendered in connection
with the offer and sale of securities in a capital-raising transaction;
(B) Any interests in the plan are not transferable other than by will
or the laws of descent or distribution;
(C) The issuer takes reasonable steps to preclude the offer and sale
of interests in the plan or securities under the plan to U.S. residents
other than employees on temporary assignment in the United States; and
(D) Documentation used in connection with any offer pursuant to the
plan contains a statement that the securities have not been registered
under the Act and may not be offered or sold in the United States unless
registered or an exemption from registration is available.
(2) Securities of Any Reporting Issuers; Debt Securities of
Non-Reporting Foreign Issuers; Non-Participating Preferred Stock and
Asset-Backed Securities of Non-Reporting Foreign Issuers. An offer or
sale of securities may be made, provided that the conditions set forth
in 230.903 (a) and (b) are met and provided that:
(i) The issuer is a reporting issuer or the securities are debt
securities of a foreign issuer;
(ii) Offering restrictions are implemented;
(iii) The offer or sale, if made prior to the expiration of a 40-day
restricted period, is not made to a U.S. person or for the account or
benefit of a U.S. person (other than a distributor); and
(iv) Each distributor selling securities to a distributor, a dealer,
as defined in section 2(12) of the Act (15 U.S.C. 77b(12)), or a person
receiving a selling concession, fee or other remuneration in respect of
the securities sold, prior to the expiration of a 40-day restricted
period, sends a confirmation or other notice to the purchaser stating
that the purchaser is subject to the same restrictions on offers and
sales that apply to a distributor.
(3) Securities of Any Issuer. An offer or sale of securities of any
issuer may be made, provided that the conditions set forth in 230.903
(a) and (b) are met and provided that:
(i) Offering restrictions are implemented;
(ii) In the case of debt securities:
(A) The offer or sale, if made prior to the expiration of a 40-day
restricted period, is not made to a U.S. person or for the account or
benefit of a U.S. person (other than a distributor); and
(B) The securities are represented upon issuance by a temporary
global security which is not exchangeable for definitive securities
until the expiration of the 40-day restricted period and, for persons
other than distributors, until certification of beneficial ownership of
the securities by a non-U.S. person or a U.S. person who purchased
securities in a transaction that did not require registration under the
Act;
(iii) In the case of equity securities:
(A) The offer or sale, if made prior to the expiration of a one-year
restricted period, is not made to a U.S. person or for the account or
benefit of a U.S. person (other than a distributor); and
(B) The offer or sale is made pursuant to the following conditions:
(1) The purchaser of the securities (other than a distributor)
certifies that it is not a U.S. person and is not acquiring the
securities for the account or benefit of any U.S. person or is a U.S.
person who purchased securities in a transaction that did not require
registration under the Act;
(2) The purchaser of the securities (other than a distributor) agrees
to resell such securities only in accordance with the provisions of this
Regulation S, pursuant to registration under the Act, or pursuant to an
available exemption from registration;
(3) The securities of a domestic issuer contain a legend to the
effect that transfer is prohibited except in accordance with the
provisions of this Regulation S; and
(4) The issuer is required, either by contract or a provision in its
bylaws, articles, charter or comparable document, to refuse to register
any transfer of the securities not made in accordance with the
provisions of this Regulation S; Provided, however, that if the
securities are in bearer form or foreign law prevents the issuer of the
securities from refusing to register securities transfers, other
reasonable procedures (such as a legend described in paragraph
(c)(3)(iii)(B)(3) of this section) are implemented to prevent any
transfer of the securities not made in accordance with the provisions of
this Regulation; and
(iv) Each distributor selling securities to a distributor, a dealer
(as defined in section 2(12) of the Act (15 U.S.C. 77b(12))), or a
person receiving a selling concession, fee or other remuneration, prior
to the expiration of a 40-day restricted period in the case of debt
securities or a one-year restricted period in the case of equity
securities, sends a confirmation or other notice to the purchaser
stating that the purchaser is subject to the same restrictions on offers
and sales that apply to a distributor.
(4) Non-Participating Preferred Stock and Asset-Backed Securities.
Notwithstanding paragraphs (c)(1) through (c)(3) of this section, only
the requirements of paragraph (c) of this section applicable to the
offer and sale of debt securities of an issuer need be satisfied with
respect to the offer and sale by such issuer of the following
securities:
(i) Non-convertible capital stock, the holders of which are entitled
to a preference in payment of dividends and in distribution of assets on
liquidation, dissolution, or winding up of the issuer, but are not
entitled to participate in residual earnings or assets of the issuer;
or
(ii) Securities of a type that either:
(A) Represents an ownership interest in a pool of discrete assets, or
certificates of interest or participation in such assets (including any
rights designed to assure servicing, or the receipt or timeliness of
receipt by holders of such assets, or certificates of interest or
participation in such assets, of amounts payable thereunder), provided
that the assets are not generated or originated between the issuer of
the security and its affiliates; or
(B) Is secured by one or more assets or certificates of interest or
participation in such assets, and the securities, by their terms,
provide for payments of principal and interest (if any) in relation to
payments or reasonable projections of payments on assets meeting the
requirements of paragraph (c)(4)(ii)(A) of this section, or certificates
of interest or participations in assets meeting such requirements.
For purposes of paragraph (c)(4)(ii) of this section, the term assets
means: securities, installment sales, accounts receivable, notes,
leases or other contracts, or other assets that by their terms convert
into cash over a finite period of time.
(5) Guaranteed Securities. Notwithstanding paragraphs (c)(1) through
(c)(4) of this section, in offerings of debt securities fully and
unconditionally guaranteed as to principal and interest by the parent of
the issuer of the debt securities, only the requirements of paragraph
(c) of this section that are applicable to the offer and sale of the
guarantee need be satisfied with respect to the offer and sale of the
guaranteed debt securities.
17 CFR 230.904 Resales.
An offer or sale of securities by any person other than the issuer, a
distributor, any of their respective affiliates (except any officer or
director who is an affiliate solely by virtue of holding such position),
or any person acting on behalf of any of the foregoing, shall be deemed
to occur outside the United States within the meaning of 230.901 if it
satisfies the following requirements:
(a) Requirement of Offshore Transaction. The offer or sale shall be
made in an offshore transaction.
(b) Prohibition Against Directed Selling Efforts. No directed
selling efforts shall be made in the United States by the seller, an
affiliate, or any person acting on their behalf.
(c) Additional Conditions. In addition to the conditions set forth
in 230.904 (a) and (b) of this section, the following requirements are
satisfied:
(1) Resales by Dealers and Persons Receiving Selling Concessions. In
the case of an offer or sale of securities of any issuer prior to the
expiration of the restricted period specified in 230.903 (c) (2) or
(3), as applicable, by a dealer, as defined in section 2(12) of the Act
(15 U.S.C. 77b(12)), or a person receiving a selling concession, fee or
other remuneration in respect of the securities offered or sold:
(i) Neither the seller nor any person acting on his behalf knows that
the offeree or buyer of the securities is a U.S. person; and
(ii) If the seller or any person acting on the seller's behalf knows
that the purchaser is a dealer, as defined in Section 2(12) of the Act
(15 U.S.C. 77b(12)), or is a person receiving a selling concession, fee
or other remuneration in respect of the securities sold, the seller or a
person acting on the seller's behalf sends to the purchaser a
confirmation or other notice stating that the securities may be offered
and sold during the restricted period only: in accordance with the
provisions of this Regulation S; pursuant to registration of the
securities under the Act; or pursuant to an available exemption from
the registration requirements of the Act.
(2) Resales by Certain Affiliates. In the case of an offer or sale
of securities of any issuer by an officer or director of the issuer or a
distributor, who is an affiliate of the issuer or distributor solely by
virtue of holding such position, no selling concession, fee or other
remuneration is paid in connection with such offer or sale other than
the usual and customary broker's commission that would be received by a
person executing such transaction as agent.
17 CFR 230.904 Pt. 231
17 CFR 230.904 PART 231 -- INTERPRETATIVE RELEASES RELATING TO THE
SECURITIES ACT OF 1933 AND GENERAL RULES AND REGULATIONS THEREUNDER
17 CFR 230.904 Pt. 239
17 CFR 230.904 PART 239 -- FORMS PRESCRIBED UNDER THE SECURITIES ACT OF
1933
Sec.
239.0-1 Availability of forms.
17 CFR 230.904 Subpart A -- Forms for Registration Statements
239.4 -- 239.10 (Reserved)
239.11 Form S-1, registration statement under the Securities Act of
1933.
239.12 Form S-2, for registration under the Securities Act of 1933 of
securities of certain issuers.
239.13 Form S-3, for registration under the Securities Act of 1933 of
securities of certain issuers offered pursuant to certain types of
transactions.
239.14 Form N-2, for closed-end management investment companies
registered on Form N-8A.
239.15 Form N-1, for open-end management investment companies
registered on Form N-8A.
239.15A Form N-1A, registration statement of open-end management
investment companies.
239.16 Form S-6, for unit investment trusts registered on Form
N-8B-2.
239.16b Form S-8, for registration under the Securities Act of 1933
of securities to be offered to employees pursuant to employee benefit
plans.
239.17 (Reserved)
239.17a Form N-3, registration statement for separate accounts
organized as management investment companies.
239.17b Form N-4, registration statement for separate accounts
organized as unit investment trusts.
239.18 Form S-11, for registration under the Securities Act of 1933
of securities of certain real estate companies.
239.19 (Reserved)
239.20 Form S-20, for standardized options.
239.23 Form N-14, for the registration of securities issued in
business combination transactions by investment companies and business
development companies.
239.24 Form N-5, form for registration of small business investment
company under the Securities Act of 1933 and the Investment Company Act
of 1940.
239.25 Form S-4, for the registration of securities issued in
business combination transactions.
239.26 -- 239.27 (Reserved)
239.28 Form S-18, optional form for the registration of securities to
be sold to the public by the issuer for an aggregate cash price not to
exceed $7,500,000.
239.29 -- 239.30 (Reserved)
239.31 Form F-1, registration statement under the Securities Act of
1933 for securities of certain foreign private issuers.
239.32 Form F-2, for registration under the Securities Act of 1933
for securities of certain foreign private issuers.
239.33 Form F-3, for registration under the Securities Act of 1933 of
securities of certain foreign private issuers offered pursuant to
certain types of transactions.
239.34 Form F-4, for registration of securities of certain foreign
private issuers issued in certain business combination transactions.
239.35 (Reserved)
239.36 Form F-6, for registration under the Securities Act of 1933 of
depositary shares evidenced by American Depositary Receipts.
239.37 Form F-7, for registration under the Securities Act of 1933 of
securities of certain Canadian issuers offered for cash upon the
exercise of rights granted to existing securityholders.
239.38 Form F-8, for registration under the Securities Act of 1933 of
securities of certain Canadian issuers to be issued in exchange offers
or a business combination.
239.39 Form F-9, for registration under the Securities Act of 1933 of
certain investment grade debt or investment grade preferred securities
of certain Canadian issuers.
239.40 Form F-10, for registration under the Securities Act of 1933
of securities of certain Canadian issuers.
239.41 Form F-80, for registration under the Securities Act of 1933
of securities of certain Canadian issuers to be issued in exchange
offers or a business combination.
239.42 Form F-X, for appointment of agent for service of process by
issuers registering securities on Form F-8, F-9, F-10 or F-80 ( 239.38,
239.39, 239.40 or 239.41 of this chapter), or registering securities or
filing periodic reports on Form 40-F ( 249.240f of this chapter), or by
any issuer or other non-U.S. person filing tender offer documents on
Schedule 13E-4F, 14D-1F or 14D-9F ( 240.13e-102, 240.14d-102 or
240.14d-103 of this chapter), or by any non-U.S. person acting as
trustee with respect to securities registered on Form F-7 ( 239.37 of
this chapter), F-8, F-9, F-10 or F-80.
239.43 Form F-N, appointment of agent for service of process by
foreign banks and foreign insurance companies and certain of their
holding companies and finance subsidiaries making public offerings of
securities in the United States.
239.44 -- 239.60 (Reserved)
239.61 Form SR, report of sales of securities and use of proceeds
therefrom.
239.62 Form ET, transmittal form for electronic format documents
under the EDGAR pilot.
239.63 Form ID, uniform application for identification numbers and
passwords under the EDGAR pilot.
239.64 Form SE, transmittal form for paper format documents under the
EDGAR pilot.
17 CFR 230.904 Subpart B -- Forms Pertaining to Exemptions
239.90 Form 1-A, offering statement under Regulation A.
239.91 Form 2-A, report pursuant to Rule 260 of Regulation A.
239.92 Form 3-A, irrevocable appointment by an individual of agent
for service of process, pleadings, and other papers pursuant to Rule 262
of Regulation A.
239.93 Form 4-A, irrevocable appointment by a corporation (or
association or other form of organization) of agent for service of
process, pleadings, and other papers, pursuant to Rule 262 of Regulation
A.
239.94 Form 5-A, certificate of resolution authorizing irrevocable
appointment by a corporation (or association or other form of
organization) of agent for service of process, pleadings, and other
papers, pursuant to Rule 262 of Regulation A.
239.95 Form 6-A, irrevocable appointment by partnership of agent for
service of process, pleadings, and other papers, pursuant to Rule 262 of
Regulation A.
239.96 Form 7A, optional form of escrow for securities that are
subject to the provisions of Rule 253(c) of Regulation A ( 230.253(c) of
this chapter).
239.97-239.100 (Reserved)
239.101 Schedules and forms for offering sheets pertaining to
fractional undivided interests in oil or gas rights offered pursuant to
exemption under Regulation B. ( 230.300-230.346 of this chapter).
239.102 -- 239.143 (Reserved)
239.144 Form 144, for notice of proposed sale of securities pursuant
to 230.144 of this chapter.
239.145 -- 239.199 (Reserved)
239.200 Form 1-E, notification under Regulation E.
239.201 Form 2-E, report of sales pursuant to Rule 609 of Regulation
E.
239.202 -- 239.299 (Reserved)
239.300 Form 1-F, notification under Regulation F.
239.500 Form D, notice of sales of securities under Regulation D and
section 4(6) of the Securities Act of 1933.
239.701 Form 701, report of sales securities pursuant to a
compensatory benefit plan or contract relating to compensation.
Authority: 15 U.S.C. 77a, et seq., unless otherwise noted.
Sections 239.31, 239.32 and 239.33 are also issued under 15 U.S.C.
78l, 78m, 78o, 78w, 80a-8, 80a-29, 80a-30, 80a-37 and 12 U.S.C. 241.
Source: 33 FR 18991, Dec. 20, 1968, unless otherwise noted.
17 CFR 239.0-1 Availability of forms.
(a) This part identifies and describes the forms prescribed for use
under the Securities Act of 1933.
(b) Any person may obtain a copy of any form prescribed for use in
this part by written request to the Securities and Exchange Commission,
450 Fifth Street, N.W., Washington, D.C. 20549. Any persons may inspect
the forms at this address and at the Commission's regional offices.
(See 200.11 of this chapter for the addresses of SEC regional offices.)
(46 FR 17757, Mar. 20, 1981, as amended at 47 FR 26820, June 22,
1982)
17 CFR 239.0-1 Subpart A -- Forms for Registration Statements
239.4 -- 239.10 (Reserved)
17 CFR 239.11 Form S-1, registration statement under the Securities Act
of 1933.
This form shall be used for registration under the Securities Act of
1933 of securities of all issuers for which no other form is authorized
or prescribed, except that this form shall not be used for securities of
foreign governments or political subdivisions thereof.
(Secs. 7, 10, 19(a), 48 Stat. 78, 81, 85; secs. 205, 209, 48 Stat.
906, 908; sec. 8, 68 Stat. 685; 15 U.S.C. 77g, 77j, 77s(a); secs. 12,
13, 14, 15(d), 23, 48 Stat. 892, 894, 895, 901; sec. 203(a), 49 Stat.
704; secs. 1, 3, 8, 49 Stat. 1375, 1377, 1379; sec. 202, 68 Stat.
686; secs. 3, 4, 5, 6, 10, 78 Stat. 565-568, 569, 570-574, 88a; secs.
1, 2, 3, 82 Stat. 454, 455; secs. 1, 2, 3-5, 28(c), 84 Stat. 1435,
1479; sec. 105(b), 88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat. 117,
118, 119, 155 (15 U.S.C. 78l, 78m, 78n, 78o(d), 1979))
Editorial Note: For Federal Register citations affecting Form S-1,
see the List of CFR Sections Affected in the Finding Aids section of
this volume.
17 CFR 239.12 Form S-2, for registration under the Securities Act of
1933 of securities of certain issuers.
This form may be used for registration of securities under the
Securities Act of 1933 which are offered or to be offered in any
transaction other than an exchange offer for securities of another
person by any registrant which meets the following conditions:
(a) The registrant is organized under the laws of the United States
or any State or Territory or the District of Columbia and has its
principal business operations in the United States or its territories;
(b) The registrant has a class of securities registered pursuant to
section 12(b) of the Securities Exchange Act of 1934 (Exchange Act) or
has a class of equity securities registered pursuant to section 12(g) of
the Exchange Act or is required to file reports pursuant to section
15(d) of the Exchange Act;
(c) The registrant: (1) Has been subject to the requirements of
section 12 of 15(d) of the Exchange Act and has filed all the material
required to be filed pursuant to section 13, 14 or 15(d) for a period of
at least thirty-six calendar months immediately preceding the filing of
the registration statement on this Form; and (2) has filed in a timely
manner all reports required to be filed during the twelve calendar
months and any portion of a month immediately preceding the filing of
the registration statement and, if the registrant has used (during the
twelve calendar months and any portion of a month immediately preceding
the filing of the registration statement) Rule 12b-25(b) ( 240.12b-25(b)
of this chapter) under the Exchange Act with respect to a report or a
portion of a report, that report or portion thereof has actually been
filed within the time period prescribed by that rule; and
(d) Neither the registrant nor any of its consolidated or
unconsolidated subsidiaries have, since the end of their last fiscal
year for which certified financial statements of the registrant and its
consolidated subsidiaries were included in a report filed pursuant to
section 13(a) or 15(d) of the Exchange Act:
(1) Failed to pay any dividend or sinking fund installment on
preferred stock; or
(2) Defaulted (i) on any installment or installments on indebtedness
for borrowed money, or (ii) on any rental on one or more long term
leases, which defaults in the aggregate are material to the financial
position of the registrant and its consolidated and unconsolidated
subsidiaries, taken as a whole.
(e) A foreign issuer, other than a foreign government, which
satisfies all of the above provisions of these registrant eligibility
requirements except the provisions in paragraph (a) of this section
relating to organization and principal business shall be deemed to have
met these registration eligibility requirements provided that such
foreign issuer files the same reports with the Commission under section
13(a) or 15(d) of the Exchange Act as a domestic registrant pursuant to
paragraph (c) of this section.
(f) If a registrant is a successor registrant it shall be deemed to
have met conditions in paragraphs (a), (b), (c) and (d) of this section
if: (1) Its predecessor and it, taken together, do so, provided that
the succession was primarily for the purpose of changing the state of
incorporation of the predecessor of forming a holding company and that
the assets and liabilities of the successor at the time of succession
were substantially the same as those of the predecessor; or (2) all
predecessors met the conditions at the time of succession and the
registrant has continued to do so since the succession.
(g) If a registrant is a majority-owned subsidiary which does not
itself meet the conditions of the eligibility requirements, it shall
nevertheless be deemed to have met such conditions if its parent meets
the conditions and if the parent fully guarantees the securities being
registered as to principal and interest. Note: In such an instance the
parent-guarantor is the issuer of a separate security consisting of the
guarantee which must be concurrently registered but may be registered on
the same registration statement as are the guaranteed securities.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11451, Mar. 16, 1982, as amended at 56 FR 30055, July 1, 1991)
Editorial Note: Form S-2 amended at 47 FR 29840, July 9, 1982; 48
FR 19875, May 3, 1983; 51 FR 42057, Nov. 20, 1986; 56 FR 30055, July
1, 1991.
17 CFR 239.13 Form S-3, for registration under the Securities Act of
1933 of securities of certain issuers offered pursuant to certain types
of transactions.
This form may be used by any registrant which meets the requirements
of paragraph (a) of this section (Registrant Requirements) for the
registration of securities under the Securities Act of 1933 (Securities
Act) which are offered in any transaction specified in paragraph (b) of
this section (Transaction Requirements), provided that the requirements
applicable to the specified transaction are met. With respect to
majority-owned subsidiaries, see paragraph (c) below.
(a) Registrant requirements. All registrants must meet the following
conditions in order to use this Form S-3 for registration under the
Securities Act of securities offered in the transactions specified in
paragraph (b) of this section:
(1) The registrant is organized under the laws of the United States
or any State or Territory or the District of Columbia and has its
principal business operations in the United States or its territories.
(2) The registrant has a class of securities registered pursuant to
section 12(b) of the Securities Exchange Act of 1934 (Exchange Act) or a
class of equity securities registered pursuant to section 12(g) of the
Exchange Act or is required to file reports pursuant to section 15(d) of
the Exchange Act;
(3) The registrant: (i) Has been subject to the requirements of
section 12 or 15(d) of the Exchange Act and has filed all the material
required to be filed pursuant to sections 13, 14 or 15(d) for a period
of at least thirty-six calendar months immediately preceding the filing
of the registration statement on this Form; and (ii) has filed in a
timely manner all reports required to be filed during the twelve
calendar months and any portion of a month immediately preceding the
filing of the registration statement and, if the registrant has used
(during the twelve calendar months and any portion of a month
immediately preceding the filing of the registration statement) Rule
12b-25(b) ( 240.12b-25(b) of this chapter) under the Exchange Act with
respect to a report or a portion of a report, that report or portion
thereof has actually been filed within the time period prescribed by the
Rule; and
(4) Neither the registrant nor any of its consolidated or
unconsolidated subsidiaries have, since the end of the last fiscal year
for which certified financial statements of the registrant and its
consolidated subsidiaries were included in a report filed pursuant to
section 13(a) or 15(d) of the Exchange Act: (i) Failed to pay any
dividend or sinking fund installment on preferred stock; or (ii)
defaulted (A) on any installment or installments on indebtedness for
borrowed money, or (B) on any rental on one or more long term leases,
which defaults in the aggregate are material to the financial position
of the registrant and its consolidated and unconsolidated subsidiaries,
taken as a whole.
(5) A foreign issuer, other than a foreign government, which
satisfies all of the above provisions of these registrant eligibility
requirements except the provisions in paragraph (a)(1) of this section
relating to organization and principal business shall be deemed to have
met these registrant eligibility requirements provided that such foreign
issuer files the same reports with the Commission under section 13(a) or
15(d) of the Exchange Act as a domestic registrant pursuant to paragraph
(a)(3) of this section.
(6) If the registrant is a successor registrant, it shall be deemed
to have met conditions in paragraph (a) (1), (2), (3), and (4) of this
section if: (i) its predecessor and it, taken together, do so, provided
that the succession was primarily for the purpose of changing the state
of incorporation of the predecessor or forming a holding company and
that the assets and liabilities of the successor at the time of
succession were substantially the same as those of the predecessor; or
(ii) if all predecessors met the conditions at the time of succession
and the registrant has continued to do so since the succession.
(b) Transaction requirements. Security offerings meeting and of the
following conditions and made by registrants meeting the Registrant
Requirements above may be registered on this Form:
(1) Primary and secondary offerings by certain registrants.
Securities to be offered for cash by or on behalf of a registrant, or
outstanding securities to be offered for cash for the account of any
person other than the registrant, including securities acquired by
standby underwriters in connection with the call or redemption by the
registrant of warrants or a class of convertible securities; provided
that the aggregate market value of the voting stock held by
non-affiliates of the registrant is $150 million or more, or
alternatively, the aggregate market value of the voting stock held by
non-affiliates of the registrant is $100 million or more and the
registrant has had an annual trading volume of such stock of 3 million
shares or more.
The aggregate market value of the registrant's outstanding voting
stock shall be computed by use of the price at which the stock was last
sold, or the average of the bid and asked prices of such stock, as of a
date within 60 days prior to the date of filing. Annual trading volume
shall be the volume of shares traded in any continuous twelve month
period ended within 60 days prior to the date of filing. See the
definition of affiliate in Securities Act Rule 405 ( 230.405 of this
chapter).
(2) Primary offerings of certain debt and non-convertible preferred
securities. Non-convertible debt and preferred securities to be offered
for cash by or on behalf of a registrant, provided such securities are
investment grade securities, as defined below. A non-convertible debt
or preferred security is an investment grade security if, at the time of
effectiveness of the registration statement, at least one nationally
recognized statistical rating organization (as that term is used in Rule
15c3-1(c)(2)(vi)(F) under the Securities Exchange Act of 1934 (
240.15c3-1(c)(2)(vi)(F) of this chapter)) has rated the security in one
of its generic rating categories which signifies investment grade;
typically, the four highest rating categories (within which there may be
sub-categories or gradations indicating relative standing) signify
investment grade.
(3) Transactions involving secondary offerings. Outstanding
securities to be offered for the account of any person other than the
issuer, including securities acquired by standby underwriters in
connection with the call or redemption by the issuer of warrants or a
class of convertible securities, if securities of the same class are
listed and registered on a national securities exchange or are quoted on
the automated quotation system of a national securities association. In
addition, Form S-3 may be used by affiliates to register securities for
resale pursuant to the conditions specified in General Instruction C to
Form S-8 ( 239.16b of this chapter).
(4) Rights offerings, dividend or interest reinvestment plans, and
conversions or warrants. Securities to be offered (a) upon the exercise
of outstanding rights granted by the issuer of the securities to be
offered, if such rights are granted on a pro rata basis to all existing
security holders of the class of securities to which the rights attach,
or (b) pursuant to a dividend or interest reinvestment plan, or (c) upon
the conversion of outstanding convertible securities or upon the
exercise of outstanding transferable warrants issued by the issuer of
the securities to be offered, or by an affiliate of such issuer;
Provided the issuer has sent to all record holders of such rights, or to
all participants in such plans, or to all record holders of such
convertible securities or transferable warrants, respectively, material
containing the information required by Rule 14a-3(b) ( 249.14a-3(b) of
this chapter) under the Exchange Act and Items 401, 402, and 403 of
Regulation S-K ( 249.401-249.403 of this chapter) within the twelve
calendar months immediately preceding the filing of the registration
statement, except that the information required by Items 401, 402 and
403 of Regulation S-K need only be provided to holders of rights
exercisable for common stock, holders of securities convertible into
common stock, participants in plans which may invest in common stock, or
in securities convertible into common stock or warrants exercisable for
common stock, respectively.
(c) Majority-owned subsidiaries. If a registrant is a majority-owned
subsidiary, security offerings may be registered on this Form if:
(1) The registrant-subsidiary itself meets the Registrant
Requirements and the applicable Transaction Requirement;
(2) The parent of the registrant-subsidiary meets the Registrant
Requirements and the conditions of Transaction Requirement in paragraph
(b)(1) of this section. (Primary Offerings of Certain Debt and
Non-convertible Preferred Securities) are met; or
(3) The parent of the registrant-subsidiary meets the Registrant
Requirements and the applicable Transaction Requirement and fully
guarantees the securities being registered as to principal and interest.
Note: In such an instance, the parent-guarantor is the issuer of a
separate security consisting of the guarantee which must be concurrently
registered but may be registered on the same registration statement as
are the guaranteed securities.
(d) Rights offerings by foreign private issuers. A Foreign private
issuer meeting eligibility requirements in paragraphs (a)(2), (a)(3) and
(a)(4) of this section may use Form S-3 to register securities to be
offered upon the exercise of outstanding rights granted by the issuer of
the securities to be offered if such rights are granted pro rata to all
existing security holders of the class of securities to which the rights
attach. In complying with Item 11 of this Form, the registrant shall
describe those material changes that have occurred since the end of the
latest fiscal year for which certified financial statements were
included in the registrant's latest filing on Form 20-F (17 CFR
249.220f). In complying with Item 12 of this Form, the registrant shall
incorporate by reference its latest filing on Form 20-F. The registrant
also shall:
(1) Furnish with the prospectus (or have furnished previously) to all
its shareholders resident in the United States, including those holding
under American Depository Receipts or similar arrangements, a copy of
its latest annual report to security holders, if in the English
language. Such annual reports or prospectus shall contain the
registrant's undertaking to send promptly to any such United States
holder, upon written request, a copy of the registrant's latest filing
on Form 20-F; or
(2) Furnish with the prospectus a copy of its latest filing on Form
20-F.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 308(a)(2), 90 Stat. 57; secs. 3(b), 12, 13, 14, 15(d), 23(a), 48
Stat. 882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704,
1375, 1377, 1379; sec. 202, 68 Stat. 686; secs. 4, 5, 6(d), 78 Stat.
569, 570-574; secs. 1, 2, 3, 82 Stat. 454, 455; secs. 28(c), 1, 2, 3,
4, 5, 84 Stat. 1435, 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9,
10, 89 Stat. 117, 118, 119; sec. 308(b), 90 Stat 57; sec. 18, 89 Stat.
155; secs. 202, 203, 204, 91 Stat. 1494, 1498-1500; sec. 20(a), 49
Stat. 833; sec. 319, 53 Stat. 1173; sec. 38, 54 Stat. 841; 15 U.S.C.
77f, 77g, 77h, 77j, 77s(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a),
79t(a), 77sss(a), 80a-37)
(47 FR 11453, Mar. 16, 1982, as amended at 56 FR 30055, July 1, 1991)
Editorial Notes: 1. Form S-3 amended at 47 FR 29840, July 9, 1982;
47 FR 54771, Dec. 6, 1982; 48 FR 19875, May 3, 1983; 52 FR 21262,
June 5, 1987; 52 FR 30146, Aug. 13, 1987; 55 FR 23925, June 13, 1990;
56 FR 30055, July 1, 1991.
2. Form S-4 amended at 56 FR 30055, July 1, 1991.
3. Form S-8 amended at 56 FR 30055, July 1, 1991.
4. Form S-11 amended at 56 FR 30055, July 1, 1991.
17 CFR 239.14 Form N-2 for closed end management investment companies
registered on Form N-8A.
Form N-2 shall be used for registration under the Securities Act of
1933 of securities of all closed end management investment companies
registered under the Investment Company Act of 1940 on form N-8A (
274.10 of this chapter). This form is also to be used for the
registration statement of such companies pursuant to section 8(b) of the
Investment Company Act of 1940 ( 274.11a-1 of this chapter). This form
is not applicable for small business investment companies which register
pursuant to 239.24 and 274.5 of this chapter.
(Secs. 6, 7, 8, 10 and 19(a) of the Securities Act of 1933 (15 U.S.C.
77f, 77g, 77h, 77j and 77s(a)); secs. 13, 15(d) and 23(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78m, 78o(d) and 78w(a)); and
secs. 8, 30 and 38(a) of the Investment Company Act of 1940 (15 U.S.C.
80a-8, 80a-29 and 80a-37(a)))
(43 FR 39554, Sept. 5, 1978)
Editorial Note: Form N-2 amended at 44 FR 7868, Feb. 7, 1979; 46
FR 36126, July 14, 1981; 49 FR 40571, Oct. 17, 1984; 50 FR 27938,
July 9, 1985.
17 CFR 239.15 Form N-1 for open-end management investment companies
registered on Form N-8A.
Form N-1 shall be used for the registration under the Securities Act
of 1933 of securities of all open-end management investment companies
that are separate accounts of insurance companies as defined by section
2(a)(37) of the Investment Company Act of 1940 registered under the
Investment Company Act of 1940 on form N-8A ( 274.10 of this chapter).
This form is also to be used for the registration statement of such
companies pursuant to section 8(b) of the Investment Company Act of 1940
( 274.11 of this chapter). This form is not applicable for small
business investment companies which register pursuant to 239.24 and
274.5 of this chapter.
(Sec. 19, Securities Act of 1933 (15 U.S.C. 77s; secs. 8 and 38,
Investment Company Act of 1940 (15 U.S.C. 80a-8 and 80a-37)))
(49 FR 32060, Aug. 10, 1984)
Editorial Note: For Federal Register citations affecting Form N-1,
see the List of CFR Sections Affected in the Finding Aids section of
this volume.
17 CFR 239.15A Form N-1A, registration statement of open-end management
investment companies.
Form N-1A shall be used for the registration under the Securities Act
of 1933 of securities of open-end management investment companies other
than separate accounts of insurance companies registered under the
Investment Company Act of 1940 (on form N-1) ( 270.11 of this chapter).
This form is also to be used for the registration statement of such
companies pursuant to section 8(b) of the Investment Company Act of 1940
( 270.11A of this chapter). This form is not applicable for small
business investment companies which register pursuant to 239.24 and
274.5 of this chapter.
(Securities Act of 1933; secs. 10 and 19(2) of the 1933 Act (15
U.S.C. 77; and 77s(a)) and sec. 38(a) of the 1940 Act (15 U.S.C.
80a-37(a)))
(48 FR 37940, Aug. 22, 1983)
Editorial Note: For Federal Register citations affecting Form N-1A,
see the List of CFR Sections Affected in the Finding Aids section of
this volume.
17 CFR 239.16 Form S-6, for unit investment trusts registered on Form
N-8B-2.
This form may be used for registration under the Securities Act of
1933 of securities of any unit investment trust registered under the
Investment Company Act of 1940 on Form N-8B-2 ( 274.12 of this chapter).
Editorial Note: Form S-6 amended at 45 FR 57707, Aug. 29, 1980; 47
FR 11457, Mar. 16, 1982; 47 FR 20295, May 12, 1982; 47 FR 22360, May
24, 1982.
17 CFR 239.16b Form S-8, for registration under the Securities Act of
1933 of securities to be offered to employees pursuant to employee
benefit plans.
Any registrant that, immediately prior to the time of filing a
registration statement on this form, is subject to the requirement to
file reports pursuant to sections 13 or 15(d) of the Securities Exchange
Act of 1934, and has filed all reports and other materials required to
be filed by such requirements during the preceding 12 months (or for
such shorter period that the registrant was required to file such
reports and materials), may use this form for registration under the
Securities Act of 1933 (the Act) of the following securities:
(a) Securities of such registrant to be offered to its employees or
employees of its subsidiaries or parents pursuant to any employee
benefit plan.
(b) Interests in the above plans, if such interests constitute
securities and are required to be registered under the Act. (See
Release No. 33-6188 (February 1, 1980) and section 3(a)(2) of the Act.)
(55 FR 23925, June 13, 1990)
Editorial Note: For Federal Register citations affecting Form S-8,
see the List of CFR Sections Affected in the Finding Aids section of
this volume.
239.17 (Reserved)
17 CFR 239.17a Form N-3, registration statement for separate accounts
organized as management investment companies.
Form N-3 shall be used for registration under the Securities Act of
1933 of securities of separate accounts that offer variable annuity
contracts and which register under the Investment Company Act of 1940 as
management investment companies, and certain other separate accounts.
This form is also to be used for the registration statement of such
separate accounts pursuant to section 8(b) of the Investment Company Act
of 1940 ( 274.11b of this chapter).
(50 FR 26160, June 25, 1985)
Editorial Note: Form N-3 amended at 56 FR 8129, Feb. 27, 1991.
17 CFR 239.17b Form N-4, registration statement for separate accounts
organized as unit investment trusts.
Form N-4 shall be used for registration under the Securities Act of
1933 of securities of separate accounts that offer variable annuity
contracts and which register under the Investment Company Act of 1940 as
unit investment trusts, and certain other separate accounts. This form
is also to be used for the registration statement of such separate
accounts pursuant to section 8(b) of the Investment Company Act of 1940
( 274.11c of this chapter).
(50 FR 26160, June 25, 1985)
Editorial Note: Form N-4 amended at 56 FR 8129, Feb. 27, 1991.
17 CFR 239.18 Form S-11, for registration under the Securities Act of
1933 of securities of certain real estate companies.
This form shall be used for registration under the Securities Act of
1933 of (a) securities issued by real estate investment trusts, as
defined in section 356 of the Internal Revenue Code, or (b) securities
issued by other issuers whose business is primarily that of acquiring
and holding for investment real estate or interests in real estate or
interests in other issuers whose business is primarily that of acquiring
and holding real estate or interests in real estate for investment.
This form shall not be used, however, by any issuer which is an
investment company registered or required to register under the
Investment Company Act of 1940.
(Secs. 7, 10, 19(a), 48 Stat. 78, 81, 85; secs. 205, 209, 48 Stat.
906, 908; sec. 8, 68 Stat. 685; 15 U.S.C. 77g, 77j, 77s(a); secs. 12,
13, 14, 15(d), 23, 48 Stat. 892, 894, 895, 901; sec. 203(a), 49 Stat.
704; secs. 1, 3, 8, 49 Stat. 1375, 1377, 1379; sec. 202, 68 Stat.
686; secs. 3, 4, 5, 6, 10, 78 Stat. 565-568, 569, 570-574, 88a; secs.
1, 2, 3, 82 Stat. 454, 455; secs. 1, 2, 3-5, 28(c), 84 Stat. 1435,
1479; sec. 105(b), 88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat. 117,
118, 119, 155 (15 U.S.C. 78l, 78m, 78n, 78o(d), 78w))
Editorial Note: For Federal Register citations affecting Form S-11,
see the List of CFR Sections Affected in the Finding Aids section of
this volume.
239.19 (Reserved)
17 CFR 239.20 Form S-20, for standardized options.
This form may be used to register standardized options under the
Securities Act of 1933 where the issuer undertakes not to issue, clear,
guarantee or accept an option registered on Form S-20 unless there is a
definitive options disclosure document meeting the requirements of Rule
9b-1 of the Securities Exchange Act of 1934.
(47 FR 41955, Sept. 23, 1982)
17 CFR 239.23 Form N-14, for the registration of securities issued in
business combination transactions by investment companies and business
development companies.
This form shall be used by a registered investment company or a
business development company as defined by section 2(a)(48) of the
Investment Company Act of 1940 for registration under the Securities Act
of 1933 of securities to be issued:
(a) In a transaction of the type specified in paragraph (a) of Rule
145 ( 230.145 of this chapter);
(b) In a merger in which the applicable state law would not require
the solicitation of the votes or consents of all the security holders of
the company being acquired;
(c) In an exchange offer for securities of the issuer or another
entity;
(d) In a public reoffering or resale of any such securities acquired
pursuant to this registration statement;
(e) In more than one of the kinds of transactions listed in
paragraphs (a) through (d) registered on one registration statement.
(50 FR 48383, Nov. 25, 1985)
Editorial Note: For Federal Register citations affecting Form N-14,
see the List of CFR Sections Affected in the Finding Aids section of
this volume.
17 CFR 239.24 Form N-5, form for registration of small business
investment company under the Securities Act of 1933 and the Investment
Company Act of 1940.
This form shall be used for registration under the Securities Act of
1933 of securities issued by any small business investment company which
is registered under the Investment Company Act of 1940, and which is
licensed under the Small Business Investment Company Act of 1958 or
which has received the preliminary approval of the Small Business
Administration and has been notified by the Administration that it may
submit a license application. This form may also be used for the
registration statement of such company pursuant to section 8(b) of the
Investment Company Act of 1940. The initial registration of such
company on this form will be deemed to be filed under both the
Securities Act of 1933 and the Investment Company Act of 1940 unless it
is indicated that the filing is made only for the purpose of one of such
acts. (Same as 274.5 of this chapter.)
Editorial Note: Form N-5 revised at 35 FR 14083, Sept. 4, 1970, and
amended at 49 FR 40572, Oct. 17, 1984.
17 CFR 239.25 Form S-4, for the registration of securities issued in
business combination transactions.
This form may be used for registration under the Securities Act of
1933 of securities to be issued (a) in a transaction of the type
specified in paragraph (a) of Rule 145 ( 230.145 of this chapter); (b)
in a merger in which the applicable state law would not require the
solicitation of the votes or consents of all of the security holders of
the company being acquired; (c) in an exchange offer for securities of
the issuer or another entity; (d) in a public reoffering or resale of
any such securities acquired pursuant to this registration statement;
or (e) in more than one of the kinds of transactions listed in
paragraphs (a) through (d) registered on one registration statement.
(50 FR 19001, May 6, 1985)
Editorial Note: For Federal Register citations affecting Form S-4,
see the List of CFR Sections Affected in the Finding Aids section of
this volume.
239.26 -- 239.27 (Reserved)
17 CFR 239.28 Form S-18, optional form for the registration of
securities to be sold to the public by the issuer for an aggregate cash
price not to exceed $7,500,000.
(a) This form is to be used for the registration of securities not to
exceed an aggregate offering price of $7.5 million which are to be sold
for cash, installments for cash and/or cash assessments and assumptions
by partners of partnership debt, by the registrant, or for the account
of security holders in accordance with paragraph (b), provided such
registrant:
(1) Is organized under the laws of the United States or Canada or any
State or Province thereof, and has or proposes to have its principal
business operations in the United States, if a domestic issuer, or
Canada or the United States if a Canadian issuer;
(2) Is not subject to the reporting provisions of the Securities
Exchange Act of 1934 pursuant to Sections 12 or 15(d) of that Act;
(3) Is not an investment company;
(4) Is not an insurance company which is exempt from the provisions
of section 12 of the Securities Exchange Act of 1934 in reliance upon
section 12(g)(2)(G) thereof; and
(5) Is not a majority owned subsidiary of a registrant which does not
meet the qualifications for use of the form, as specified herein.
(b) This form may be used for the registration of securities to be
sold for the account of any person other than the registrant, Provided:
(1) The aggregate offering price of such securities does not exceed $1.5
million and (2) the aggregate offering price of such securities together
with the aggregate offering price of any securities to be sold by the
the registrant does not exceed $7.5 million.
(c) For purposes of computing the $7.5 million ceiling specified
above, there shall be included in the aggregate offering price of the
securities registered herein, the aggregate offering price of all
securities sold: (1) By the registrant within one year prior to the
commencement of the proposed offering in violation of section 5(a) of
the Securities Act; (2) by the registrant within one year prior to the
commencement of the proposed offering pursuant to a registration
statement filed on Form S-18; and (3) which would be deemed integrated
with the proposed offering. (See: Securities Act Release No. 4552
(Nov. 6, 1962) (27 FR 11316).) In computing the $7.5 million ceiling,
the aggregate price of all securities sold which fall in more than one
of the above described categories need only be counted once.
(d) Notwithstanding the provisions of paragraph (a)(2), a registrant
which has had a prior offering on Form S-18 may, during the remainder of
the fiscal year in which the prior registration was made effective, use
the form to register additional securities until the offering limit as
computed in paragraph (c) has been met.
(Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209,
48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685;
sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90 Stat. 57; 15 U.S.C. 77f,
77g, 77h, 77j, 77s(a))
(44 FR 21567, Apr. 10, 1979, as amended at 48 FR 45387, Oct. 5, 1983)
Editorial Note: For Federal Register citations affecting Form S-18,
see the List of CFR Sections Affected in the Finding Aids section of
this volume.
239.29 -- 239.30 (Reserved)
17 CFR 239.31 Form F-1, registration statement under the Securities Act
of 1933 for securities of certain foreign private issuers.
(a) Form F-1 shall be used for registration under the Securities Act
of 1933 (''Securities Act'') of securities of all foreign private
issuers, as defined in rule 405 ( 230.405 of this chapter) for which no
other form is authorized or prescribed.
(b) If a registrant is a majority-owned subsidiary, which does not
itself meet the conditions of these eligibility requirements, it shall
nevertheless be deemed to have met such conditions if its parent meets
the conditions and if the parent fully guarantees the securities being
registered as to principal and interest.
(47 FR 54771, Dec. 6, 1982, as amended at 56 FR 30055, 30056, July 1,
1991)
Editorial Note: Form F-1 amended at 56 FR 30056, July 1, 1991.
17 CFR 239.32 Form F-2, for registration under the Securities Act of
1933 for securities of certain foreign private issuers.
Any foreign private issuer, as defined in Rule 405 ( 230.405 of this
chapter), which meets the following conditions may use this form for the
registration of securities under the Securities Act of 1933 (Securities
Act) which are offered or to be offered in any transaction other than an
exchange offer for securities of another person:
(a) The registrant has a class of securities registered pursuant to
section 12(b) of the Securities Exchange Act of 1934 (the ''Exchange
Act'') or has a class of equity securities registered pursuant to
section 12(g) of the Exchange Act or is required to file reports
pursuant to section 15(d) of the Exchange Act and has filed annual
reports on Form 20-F ( 249.220f of this chapter), on Form 10-K ( 249.310
of this chapter) or, in the case of registrants described in General
Instruction A. (2) of Form 40-F, on Form 40-F ( 249.240f of this
chapter) under the Exchange Act.
(b)(1) The Registrant (i) has been subject to the requirements of
section 12 or 15(d) of the Exchange Act and has filed all the
information required to be filed pursuant to Section 13, 14 or 15(d) for
a period of at least thirty-six calendar months immediately preceding
the filing of the registration statement on this form; (ii) has filed
in a timely manner all reports required to be filed during the twelve
calendar months and any portion of a month immediately preceding the
filing of the registration statement and, if the issuer has used (during
the twelve calendar months and any portion of a month immediately
preceding the filing of the registration statement) Rule 12b-25(b) (
240.12b-25(b) of this chapter) under the Exchange Act with respect to a
report or portion of a report, that report or portion thereof has
actually been filed within the time period prescribed by the Rule.
(2) The provisions of paragraph (b)(1)(i) of this section do not
apply to any registrant if:
(i) The aggregate market value worldwide of the voting stock of the
registrant held by non-affiliates is the equivalent of $300 million or
more, or if non-convertible debt securities that are ''investment grade
debt securities,'' as defined below, are being registered and
(ii) The registrant has filed at least one Form 20-F, Form 40-F or
Form 10-K that is the latest required to have been filed.
1. The aggregate market value of the registrant's outstanding voting
stock shall be computed by use of the price at which the stock was last
sold, or the average of the bid and asked prices of such stock in the
principal market for such stock, as of a date within 60 days prior to
the date of filing (See the definition of affiliate in Securities Act
Rule 405 ( 230.405 of this chapter)).
2. A non-convertible debt security is an investment grade debt
security if, at the time of effectiveness of the registration statement,
at least one nationally recognized statistical rating organization (as
that term is used in Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act (
240.15c3-1(c)(2)(vi)(F) of this chapter)) has rated the security in one
of its generic rating categories that signifies investment grade;
typically, the four highest rating categories (within which there may be
sub-categories or gradations indicating relative standing) signify
investment grade.
(c) Neither the registrant nor any of its consolidated or
unconsolidated subsidiaries have, since the end of their last fiscal
year for which certified financial statements of the registrant and its
consolidated subsidiaries were included in a report filed pursuant to
section 13(a) or 15(d) of the Exchange Act: (1) Failed to pay any
dividend or sinking fund installment on preferred stock; or (2)
defaulted (A) on any installment or installments on indebtedness for
borrowed money, or (B) on any rental on one or more long term leases,
which defaults in the aggregate are material to the financial position
of the registrant and its consolidated and unconsolidated subsidiaries,
taken as a whole.
(d) The financial statements in the registrant's latest filing on
Form 20-F, Form 40-F or Form 10-K comply with item 18 of Form 20-F.
(e) The provisions of paragraphs (b)(1)(i) and (d) of this section do
not apply if the Registrant has filed at least one Form 20-F, Form 40-F
or Form 10-K that is the latest required to have been filed and if the
only securities being registered are to be offered:
(1) Upon the exercise of outstanding rights granted by the issuer of
the securities to be offered, if such rights are granted pro rata to all
existing securityholders of the class of securities to which the rights
attach;
(2) Pursuant to a dividend or interest reinvestment plan; or
(3) Upon the conversion of outstanding convertible securities or upon
the exercise of outstanding transferable warrants issued by the issuer
of the securities to be offered, or by an affiliate of such issuer. The
exemptions in this paragraph (e) are unavailable if securities are to be
offered or sold in a standby underwriting in the United States or
similar arrangement.
(f) If a registrant is a successor registrant it shall be deemed to
have met conditions, paragraphs (a), (b), (c), (d) and (e) of this
section if: (1) Its predecessor and it, taken together, do so, provided
that the succession was primarily for the purpose of changing the state
or other jurisdiction of incorporation of the predecessor of forming a
holding company and that the assets and liabilities of the successor at
the time of succession were substantially the same as those of the
predecessor; or (2) all predecessors met the conditions at the time of
succession and the registrant has continued to do so since the
succession.
(g) If a registrant is a majority-owned subsidiary which does not
meet the conditions of these eligibility requirements, it nevertheless
shall be deemed to have met such conditions if its parent meets the
conditions and if the parent fully guarantees the securities being
registered as to principal and interest.
Note: In such an instance the parent-guarantor is the issuer of a
separate security consisting of the guarantee which must be concurrently
registered but may be registered on the same registration statement as
are the guaranteed securities. Both the parent-guarantor and the
subsidiary shall each disclose the information required by this Form as
if each were the only registrant except that if the subsidiary will not
be eligible to file annual reports on Form 20-F or Form 40-F after the
effective date of the registration statement, then it shall disclose the
information specified in Form S-2 ( 239.12 of this chapter). Rule 3-10
of Regulation S-X ( 210.3-10 of this chapter) specifies the financial
statements required.
(47 FR 54773, Dec. 6, 1982, as amended at 56 FR 30055, 30056, July 1,
1991)
Editorial Note: Form F-2 amended at 56 FR 30057, July 1, 1991; 57
FR 10615, Mar. 27, 1992.