Securities Act Release No. 5145

Exchange Act Release No. 9151

April 30, 1971

Amendment of Rules Relating to Size of Type Used in Prospectuses and Other Documents.

The Securities and Exchange Commission has adopted certain amendments to its rules under the Securities Act of 1933 and the Securities Exchange Act of 1934. Notice of the proposed amendments was published November 23, 1970 in Securities Act Release No. 5112 (Securities Exchange Act Release No. 9026) together with a statement of the reasons for the proposed action.

The amendments provide that notes to financial statements and other tabular data shall be set forth in 10-point type, which is the size of type prescribed for the body of prospectuses, proxy statements and other documents filed with the Commission or sent to security holders. The amendments leave unchanged the provision that financial statements and other tabular data, including tabular data in notes, may be set forth in 8-point type.

It should be noted that the amended rules require that printed material filed with the Commission or sent to security holders pursuant to the Commission's rules must be in type at least as large and as legible as roman (not italic), modern type of the size specified. Thus the rules do not specify a particular type face so long as the one used meets the standards set forth in the rules. This enables issuers to choose from a variety of type faces in deciding which one to use for a particular type of document.

The following rules are the ones affected by the amendments:

Rule 256(d) of Regulation A under the Securities Act of 1933 establishes requirements for the size of type to be used in printed offering circulars filed with the Commission pursuant to the provisions of that regulation.

Rule 420 under the Securities Act of 1933 specifies the size of type to be used in printed prospectuses relating to securities registered under that Act.

Rule 12b-12(c) of Regulation 12B under the Securities Exchange Act of 1934 specifies the size of type to be used in printed registration statements and reports filed pursuant to Sections 12, 13, or 15(d) of that Act.

Rule 14a-3(b) of Regulation 14A under the Securities Exchange Act of 1934 specifies the requirements for financial statements included in the annual reports required to be sent to security holders pursuant to that rule.

Rule 14a-5(d) of Regulation 14A and Rule 14c-4(c) of Regulation 14C specify the size of the type to be used in proxy and information statements filed pursuant to those regulations.

The text of the amendments is set forth below.

Rules Under the Securities Act of 1933

I. Rule 256. Paragraph (d) of Rule 256 has been amended to read as follows:

"(d)  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, the body of the offering circular 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, to the extent necessary for convenient presentation, financial statements and other tabular data, including tabular data in notes, may be set in type at least as large and as legible as 8-point modern type. All such type shall be leaded at least 2 points."

II. Rule 420. Rule 420 has been amended to read as follows:

"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, to the extent necessary for convenient presentation, financial statements and other tabular data, including tabular data in notes, 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."

Rules Under the Securities Exchange Act of 1934

I. Rule 12b-12. Paragraph (c) of Rule 12b-12 has been amended to read as follows:

"(c)  The body of all printed statements and reports 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, to the extent necessary for convenient presentation, financial statements and other tabular data, including tabular data in notes, 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."

II. Rule 14a-3. Paragraph (b)(1) of Rule 14a-3 has been amended to read as follows:

"(b)  If the solicitation is made on behalf of the management of the issuer and relates to an annual meeting of security holders at which directors are to be elected, each proxy statement furnished pursuant to paragraph (a) shall be accompanied or preceded by an annual report to such security holders as follows:

"(1)  The report shall contain, in comparative columnar form, such financial statements for the last 2 fiscal years, prepared on a consistent basis, as will in the opinion of the management adequately reflect the financial position of the issuer at the end of each such year and the results of operations for each such year:  Provided, however, That investment companies registered under the Investment Company Act of 1940 need include such financial statements only for the last fiscal year. Consolidated financial statements of the issuer and its subsidiaries shall be included in the report if they are necessary to reflect adequately the financial position and results of operations of the issuer and its subsidiaries, but in such case the individual statements of the issuer may be omitted even though they are required to be included in reports to the Commission. Such financial statements, other than the notes thereto, shall be in roman type at least as large and as legible as 8-point modern type. All notes to such financial statements shall be in roman type at least as large and as legible as 10-point modern type. All such type shall be leaded at least 2 points. The Commission may upon the request of the issuer, permit the omission of financial statements for the earlier of such 2 fiscal years upon a showing of good cause therefor."

III. Rule 14a-5. Paragraph (d) of Rule 14a-5 has been amended to read as follows:

"(d)  All printed proxy statements shall be in roman type at least as large and as legible as 10-point modern type, except that to the extent necessary for convenient presentation financial statements and other tabular data, but not the notes thereto, 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."

IV. Rule 14c-4. Paragraph (c) of Rule 14c-4 has been amended to read as follows:

"(c)  All printed information statements shall be in roman type at least as large and as legible as 10-point modern type except that to the extent necessary for convenient presentation financial statements and other tabular data, but not the notes thereto, 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.

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The foregoing action has been taken pursuant to the Securities Act of 1933, particularly Sections 6, 7, 10 and 19(a) thereof, and the Securities Exchange Act of 1934, particularly Sections 12, 13, 14, 15(d) and 23(a) thereof.

The foregoing action shall be effective with respect to any of the above-mentioned printed matter filed with the Commission or sent to security holders on or after July 1, 1971.

By the Commission.