Cleary, Gottlieb, Steen & HamiltonAug. 13, 1996INQUIRY LETTERCLEARY, GOTTLIEB, STEEN & HAMILTON ONE LIBERTY PLAZA NEW YORK, NY 10006 (212) 225-2000 August 12, 1996
Forms F-7, F-8, F-9, F-10, F-80; Securities Exchange Act of 1934, Rule 12b-11(d), Form 40-F
Office of International Corporate Finance Division of Corporation Finance Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549
Securities Exchange Act of 1934 -- Rule 12b-11(d), Form 40-F Dear Mr. Van Dorn:
The MJDS, which became effective on July 1, 1991, was adopted by the Commission and provincial securities regulators in Canada to facilitate certain cross-border securities offerings by allowing such transactions to proceed in both countries on the basis of home country disclosure and rules and by permitting issuers who have used the MJDS to satisfy their continuous disclosure obligations in both countries through the use of home country disclosure. As noted by the Commission in the adopting release, the MJDS was designed to eliminate much of the expense and delay that resulted from requiring compliance with the disclosure rules of two jurisdictions by allowing certain eligible Canadian issuers to use offering documents and periodic reports prepared under Canadian law in connection with transactions and reporting in the United States. 1 Since its adoption, the MJDS has made it significantly easier for eligible Canadian issuers to access the United States capital markets and has encouraged the equal treatment of United States securityholders in rights of offerings and, to a lesser extent, offers in connection with business combinations, exchanging offers and tender offers that are eligible for MJDS treatment. 2 Consistent with the objective of permitting eligible Canadian issuers to use documents prepared in accordance with Canadian law, the MJDS Securities Act registration forms specifically exempt such issuers from complying with Regulation C under the Securities Act, which sets forth requirements for preparing and filing registration statements and prospectuses. Each such registration form states that "the rules comprising Regulation C under the Securities Act shall not apply to filings on this form unless specifically referred to in the form." 3 Similarly, Form 40-F, the Exchange Act annual report form available to MJDS issuers, states that "Rules 12b-2, 12b-5, 12b-10, 12b-11, 12b-12, 12b-13, 12b-14, 12b-21, 12b-22, 12b-23, 12b-25, 12b-33 and 12b-37 under the Exchange Act," which govern the form and method of preparation of Exchange Act reports, "shall not apply to filings on this form." 4 Each of the MJDS Securities Act registration forms and Form 40-F specify that instead, "the rules and regulations applicable in the home jurisdiction regarding the form and method of preparation of disclosure documents shall apply." We are writing to confirm that although eligible Canadian issuers using the MJDS Securities Act registration forms are exempt from compliance with Regulation C, such issuers nevertheless may rely on Rule 402(e) of Regulation C. That Rule permits registrants to use typed, duplicated or facsimile versions of manual signatures in any registration statement, post-effective amendment, opinion or consent filed with the Commission under the Securities Act. 5 We also are writing to confirm that MJDS issuers filing Exchange Act reports may rely on the provisions of Rule 12b-11(d). Like Rule 402(e), Rule 12b-11(d) permits Exchange Act filers to use typed, duplicated or facsimile versions of manual signatures. 6 For purposes of this letter, we assume that any Canadian filer taking advantage of Rule 402(e) or Rule 12b-11(d) would comply with the requirement that corresponding manual signatures be maintained in the issuers file for five years if typed, duplicated or facsimile signatures are used in a filing with the Commission. The Commissions purpose in exempting MJDS issuers from the requirements of Regulation C and the Exchange Act rules mentioned above was to facilitate cross-border offerings by eliminating much of the difficulty and expense of registration and periodic reporting in the United States. In attempting to ease the burdens of United States registration and reporting for MJDS issuers, it was not the Commissions intent to prevent such issuers from taking advantage of provisions such as those set forth in Rule 402(e) and Rule 12b-11(d) that were designed to streamline the registration and reporting process for all issuers. Thus, we believe that the statement in each of the MJDS Securities Act registration forms that Regulation C does not "apply" to such form should not be read to preclude MJDS issuers from relying on Rule 402(e). Similarly, we believe that the statement in Form 40-F that Rule 12b-11 does not "apply" to such form should not be read to preclude MJDS issuers from relying on Rule 12b-11(d). Moreover, we note that Rule 402(e) and Rule 12b-11(d) were adopted as part of the Commissions effort to simplify certain aspects of the registration and reporting requirements in connection with the implementation of T§3 settlement, 7 and that there is no question that Canadian issuers using non-MJDS forms may rely on those rules. We believe it would be an anomalous result to preclude an eligible Canadian issuer from taking advantage of Rule 402(e) or Rule 12b-11(d) simply because it elects to use an MJDS form which, as was the case with Rule 402(e) and Rule 12b-11(d), was designed to streamline and simplify the registration and reporting process. For the reasons stated above, we believe that Canadian issuers should be permitted to rely on Rule 402(e) in connection with the registration of offerings with the Commission under the MJDS and to rely on Rule 12b-11(d) in connection with their subsequent reporting obligations. If you have any questions or comments concerning the above, please do not hesitate to call me at (212) 225-2650 or my colleague David Leinwand at (212) 225-2838. We look forward to your response. Very truly yours, Craig B. Brod STAFF REPLY LETTERAugust 13, 1996
DIVISION OF CORPORATION FINANCE
Incoming letter dated August 12, 1996 Based on the facts presented, this Division would raise no objection if eligible Canadian issuers, using multijurisdictional disclosure system Forms F-7, F-8, F-9, F-10, F-80 or 40-F under the Securities Act or Exchange Act, respectively, rely on Rule 402(e) under the Securities Act or Rule 12b-11(d) under the Exchange Act, as appropriate. Subject to certain conditions, such rules permit registrants to use typed, duplicated or facsimile versions of manual signatures in any document filed with or furnished to the Commission under the Securities Act or Exchange Act which is required to be signed. This response is granted on the condition that a Canadian issuer availing itself of the relief provided herein also must comply with the requirements of Rule 402(e) and Rule 12b-11(d) regarding retaining manual signature pages and furnishing to the Commission or its staff copies of such pages upon request. Sincerely, Walter G. Van Dorn, Jr., Special Counsel 1See Securities Act Release No. 6902 (July 1, 1991) (adoption of MJDS by Commission); National Policy Statement No. 45, 14 O.S.C.B. 2889 (June 28, 1991) (adoption of MJDS by Canadian Securities Administrators). 2See Edward F. Greene et al., U.S. Regulation of the International Securities and Derivatives Markets §8.02 at n.4 (1996). 3See Form F-7, General Instructions II.A; Form F-8, General Instructions IV.A; Form F-9, General Instructions II.B; Form F-10, General Instructions II.B; Form F-80, General Instructions IV.A. 4See Form 40-F, General Instructions D(1). 5Rule 402(e) states:
6Rule 12b-11(d) states:
7See Securities Act Release No. 7168 (June 7, 1995). |
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