Release No. 33-5925

Release No. 34-14692

Release No. IC-10212

April 21, 1978

AGENCY: Securities and Exchange Commission

ACTION: Final rules.

SUMMARY: The Commission announced: (1) the amendment of rules and a schedule governing the disclosure of the beneficial ownership and related information of certain equity securities which were previously scheduled to take effect on April 30, 1978; (2) the adoption of a new schedule which sets forth the disclosure requirements for reporting beneficial ownership and related information of certain equity securities by certain institutional investors; and (3) the rescission of the short term acquisition notice which would have been available to certain of the institutional investors who are instead eligible to use the new schedule adopted herein. The Commission took these actions as a result of the practical and interpretative difficulties anticipated by certain institutional investors in complying with the beneficial ownership disclosure requirements scheduled to take effect on April 30, 1978. The amended rules and schedule and the new short form schedule represent an effort by the Commission to strike a more appropriate balance between the burdens imposed on persons who are required to report thereunder and the need for adequate disclosure of the ownership of equity securities.

EFFECTIVE DATE: Thirty days after publication in the FEDERAL REGISTER.

FOR FURTHER INFORMATION CONTACT: John Granda, Office of Disclosure Policy and Proceedings, Division of Corporation Finance, Securities and Exchange Commission, 500 North Capitol Street, Washington, D.C. 20549, (202/755-1750).

SUPPLEMENTARY INFORMATION: The Securities and Exchange Commission today announced the amendment of rules and Schedule 13D (17 CFR 240. 13d-101) which were adopted on February 24, 1977 and scheduled to take effect on April 30, 1978, the adoption of new Schedule 13G, (17 CFR 240. 13d-102) and the rescission of Form 13D-5 (17 CFR 240. 13d-102) relating to disclosure by certain beneficial owners of securities pursuant to Section 13(d) of the Securities Exchange Act of 1934 ("Exchange Act" 15 U.S.C. 78a et seq., as amended by Pub. L. No. 94-29 (June 4, 1975) and Pub L. No. 95-213 (December 19, 1977)). At the same time, the Commission amended certain of its forms and schedules under the Securities Act of 1933 ("Securities Act" 15 U.S.C. 77a et seq.) and under the Exchange Act to require issuers to disclose in a more uniform manner the percentage of their securities beneficially owned by certain persons.

In large part the Commission believes that its action is responsive to many of the comments submitted with respect to the institutional investor objections raised in Exchange Act Release No. 34-13900 (42 FR 44964) and the concerns raised by these institutional investors with respect to the availability of the short form acquisition notice, the overlap under rules implementing Section 13(f), practical problems and definitional and interpretative problems. In addition, some of the amendments to the rules and to Schedule 13D proposed in Exchange Act Release No. 34-13292 (42 FR 12355) have been adopted. The Commission has also concurrently published for comment proposed rules to implement newly enacted Section 13(g) of the Exchange Act.

I. Background

As part of the Williams Act Amendments, ¹ P. L. 90-439, Congress added Section 13(d) to the Exchange Act. Generally, Section 13(d) requires a report by any person (or group of persons) who, as a result of an acquisition, becomes the beneficial owner of more than five percent of certain classes of equity securities of certain issuers. The legislative history of that Section indicates that it was intended to provide information to the public and the affected issuer about rapid accumulations of its equity securities in the hands of persons who would then have the potential to change or influence control of the issuer. ²

In November and December 1974, the Commission conducted a Public Fact-Finding Investigation in the Matter of Beneficial Ownership, Takeovers and Acquisitions by Foreign and Domestic Persons ("Beneficial Ownership Hearings"). ³ The testimony of witnesses and letters of comment highlighted certain issues regarding reporting of beneficial ownership and the need for rulemaking action by the Commission.

Based on the testimony, exhibits and written comments contained in the record of the Beneficial Ownership Hearings and on its own experience, the Commission published on August 25, 1975, its "Proposals Relating to Disclosure of Beneficial Owners and Holders of Record of Voting Securities" ("1975 Ownership Proposals"). ⁴ The proposals recognized the need for more objective standards for the application of the key statutory terms "beneficial owner," "acquisition" and "group". In response to these proposals the Commission received over 225 letters of comment from interested persons. ⁵

On the basis of the letters of comment and on its own experience, the Commission on February 24, 1977, announced the amendment of the then existing rules and Schedule 13D (the amended Schedule 13D is hereinafter referred to as "old Schedule 13D") and the adoption of new rules (hereinafter referred to as "old rules") and Form 13D-5 relating to disclosure by certain beneficial owners of securities pursuant to Section 13(d) of the Exchange Act. ⁶ The Commission also concurrently published for comment proposed amendments to those rules and Schedule 13D ("proposed amendments"). ⁷ All of the rules, forms and schedules which were adopted or amended were originally scheduled to become effective on August 31, 1977. However, as a result of the practical and interpretative issues raised by institutional investors regarding compliance with the old rules, as well as objections to the exclusion of insurance companies from the use of the short form acquisition statement, the Commission deferred their effective date to April 30, 1978. ⁸

In order to assure that its actions were fully responsive to the public interest, the Commission invited public comment with respect to the issues raised by the institutions. ⁹ In response to the Commissions invitation thirty-one commentators submitted their views with respect to the issues set forth in Exchange Act Release No. 13900 (42 FR 44964). ¹⁰ Most of the letters of comment focused on each of the areas encompassed by the release, viz., the availability of the short form, the overlap under proposed Rule 13f-1, ¹¹ practical problems, and definitional and interpretative problems. While comment was also specifically invited on the issue of whether, and how, the definition of beneficially ownership should be revised to alleviate the institutions problems, few letters addressed it.

An additional development since the old rules were adopted was the enactment of the Domestic and Foreign Investment Improved Disclosure Act of 1977 _{the "Act" Title II of P. L. 95-213}. The Act was signed by the President on December 19, 1977 and became effective on that date. Among other things, it amended Section 13(d)(1) to specifically authorize the Commission to obtain disclosure of certain matters which had previously been required to be disclosed under the old rules pursuant to the Commissions general rulemaking authority. Thus, residence, citizenship and the nature of the beneficial ownership were added to the list of specifically enumerated disclosures which may be required by the Commission. The Act also authorizes the Commission to require disclosure of the background, identity, residence, and citizenship of each associate of the beneficial owner.

The Act also adds a new Section 13(g) to the Exchange Act which requires any person who owns more than five percent of a class of securities described in Section 13(d)(1) of the Exchange Act to disclose to the Commission and to the issuer of the security in such form and at such times as the Commission by rule may specify: the persons identity, residence, citizenship, the number and description of the shares in which such person has an interest and the nature of such interest. Although Section 13(g)(1) would require disclosure of the information prescribed regardless of whether the person was required to report similar information under other sections of the Exchange Act, Section 13(g)(5) directs the Commission to take such steps as are necessary and appropriate in the public interest and for the protection of investors to achieve centralized reporting of the information, to avoid unnecessarily duplicative reporting, and to minimize the compliance burden on persons required to report. The principal effect of Section 13(g), therefore, is to provide the authority necessary to close certain gaps in the disclosure requirements under Section 13(d). ¹² The principal classes of persons who are currently not required to report are those who acquired their securities prior to December 22, 1970 and those who acquire not more than two percent of a class of securities within a twelve month period.

The Commission has today also published for comment rules under Section 13(g) which would, inter alia, require these persons to disclose the information called for by the abbreviated acquisition schedule adopted herein. A more comprehensive system for disclosure of ownership interests would thereby be created in accordance with Congress intent in enacting Section 13(g). ¹³

II. Synopsis Of Adopted And Amended Rules and Forms

This synopsis is included in order to assist all interested persons in their understanding of and compliance with the filing and disclosure provisions of the rules and schedules adopted and amended herein. However, attention is directed to the actual text of the rules and schedules for a more complete understanding.

A. Provisions Relating to Obligations of Beneficial Owners

(1) Rule 13d-1: Filing of Schedules 13D and 13G.

The essential requirements of old Rules 13d-1 _{17 CFR 240.13d-1} and 13d-5 _{17 CFR 240.13d-5} have been included in new Rule 13d-1 so that a person may look to a single rule to determine whether he has a reporting obligation and if so, how that obligation may be satisfied. This is an initial step in the adoption of an integrated ownership reporting system to be denominated as Regulation 13D-G. As indicated in Exchange Act Release No. (FR), when rules have been adopted to implement Section 13(g), the filing requirements under that Section would appear as paragraph (c) of Rule 13d-1 with the remaining provisions of Rule 13d-1 being re-designated accordingly.

(a) Rule 13d-1(a): Filing of Schedule 13D

Rule 13d-1(a) has not been changed substantively from the revision adopted in Exchange Act Release No. 34-13291 (42 FR 12342). However, the provision relating to the types of equity securities the ownership of which gives rise to a filing requirement is now in Rule 13d-1(c), rather than in Rule 13d-1(a); and the provision which permits persons to rely upon the information set forth in the issuers most recent quarterly or annual report and current report subsequent thereto in determining the amount of outstanding shares of a class of equity securities now appears in Rule 13d-1(d), rather than in Rule 13d-1(a). Further, the filing fee requirement has been transferred from Rule 13d-1(a) to a separate fee rule, Rule 13d-7, _{17 CFR 240.13d-7} which applies to filings on both Schedules 13D and 13G. Finally, the number of copies of Schedule 13D which are required to be filed with the Commission has been reduced from eight to six.

(b) Rule 13d-1(b): Filing of Schedule 13G

New Rule 13d-1(b) and new Schedule 13G correspond to old Rule 13d-5 and former Form 13D-5, respectively. However, certain substantive changes have been made in order to achieve a more satisfactory balancing of the costs and benefits attendant to the disclosure elicited thereunder, including revisions of the categories of persons eligible to use Schedule 13G to include insurance companies, as defined in Section 3(a)(19) of the Exchange Act.

The Commission has not adopted the position taken by the majority of commentators that reporting under Section 13(f) of the Exchange Act should serve as the exclusive reporting obligation for institutional investors who disclaim any intention of investing for purposes of influencing control or management. The Commission is, however, contemplating a revision of proposed Rule 13f-1 which will reduce the possibility of duplicative filing requirements.

Proposed Rule 13f-1 was proposed pursuant to Section 13(f) of the Exchange Act. It provides that institutional investment managers which exercise investment discretion over accounts holding over $100,000,000 of equity securities designated "Section 13(f) securities" must file a proposed Form 13F on a quarterly basis to report certain information regarding those accounts. "Section 13(f) securities" are defined to include all classes of securities described in Section 13(d)(1) of the Exchange Act that are listed on a national securities exchange or quoted on the automated quotation system of a registered association (e.g. the NASDAQ system) and that are contained in the most recent list of Section 13(f) securities proposed to be published by the Commission.

Proposed Rule 13f-1 also provides that an institutional investment manager shall be deemed to exercise investment discretion not only when it has the power described in the definition of that term in Section 3(a)(35) of the Exchange Act _{15 USC 78 (a)(35)}, but also when it is deemed to be the beneficial owner of the securities in the account under Section 13(d). The inclusion of beneficial ownership within the scope of investment discretion was an attempt to ease the burden on institutions in that it was thought that they would have to make fewer determinations in deciding which securities they are "beneficial owner" of for purposes of Section 13(d) and which they exercise investment discretion with respect to for purposes of Section 13(f). It appears instead that this created more problems than it helped solve. The Commission therefore intends to eliminate beneficial ownership as a reporting trigger under Section 13(f). This should assist in reducing the reporting overlap under the two sections.

Provision has also been made in Schedule 13G for incorporation by reference of information contained in whatever form is ultimately adopted under Section 13(f) for those persons who are required to file under both Sections. Since investment discretion subsumes investment power and Section 13(f) requires reporting of voting authority, the Commission believes that incorporation by reference of relevant information will satisfy the purpose of Section 13(d) while at the same time avoiding unnecessary duplication.

Beyond provision for incorporation by reference, however, the Commission continues to believe that the purposes of Section 13(d) could not be effected if Section 13(f) were the exclusive source of filing obligations for institutional investors. Because of the differences between Section 13(f) and Section 13(d) not all institutions subject to Section 13(d) would be subject to Section 13(f). For example, an institution with a portfolio of "Section 13(f) securities" which does not exceed $100,000,000 would not be subject to Section 13(f), but would be subject to Section 13(d). Also all securities subject to Section 13(d) would not be subject to Section 13(f), since the proposal is to include only listed and NASDAQ securities in reports pursuant to that Section. An additional impediment is that Section 13(f) provides for the confidentiality of certain information. There are no such provisions in Section 13(d) and confidentiality might defeat the purposes of that Section.

Congressional recognition of the importance of disclosing to the public the location of rapidly accumulated blocks of stock, even though they have been acquired not with the purpose or with the effect of changing or influencing control, is expressed in Section 13(d)(5) of the Exchange Act. That this is a realistic need has recently been underscored by the pivotal role played by investment managers holding large blocks of stock in surprise tender offers.

In addition, Section 13(g) and its legislative history reveal a clear Congressional intent to achieve a comprehensive disclosure system of corporate ownership. For the same reasons discussed in comparing the differences between Sections 13(d) and 13(f), not all institutions subject to 13(g) would be subject to 13(f). Reporting under Section 13(f) therefore cannot be made the exclusive reporting obligation for institutions if the purpose of Section 13(g) is to be realized. Accordingly, since the Commission would have to obtain the information now required pursuant to Section 13(d)(5) under Section 13(g) in any event, the enactment of Section 13(g) has rendered moot the issue of whether obtaining such disclosure under Section 13(d)(5) is within the primary purpose of Section 13(d).

The introductory language in old Rule 13d-5 which described the obligation to file thereunder has been revised in new Rule 13d-1(b) in order to avoid repetition and to clarify that persons subject thereto are not required to file under Rule 13d-1(a).

Old Rule 13d-5 would have required a person to file former Form 13D-5 if at any time during the quarter such person acquired, in the ordinary course of business and not for the purpose of changing or influencing control, beneficial ownership of a class of equity security exceeding five percent, regardless of whether his ownership as of the end of the quarter exceeded that amount. This requirement was objected to by institutions on the ground that a costly daily monitoring system would have to be established in order to determine when, if ever, the aggregate amount of securities held in numerous individual accounts exceeded five percent.

The Commission believes that the utility of ownership disclosure where the acquisition is in the ordinary course of business and there is no purpose or effect of changing or influencing control does not warrant expenditures of the magnitude said to be necessary for the operation of a daily tracking system. Accordingly, the first provision in new Rule 13d-1(b) has been added to make clear that the obligation to file a Schedule 13G under this provision under need be determined only on the last day of the calendar year. New provisions which may more frequent reporting on Schedule 13G if larger amounts of securities are acquired are discussed below. Nonetheless, it should be understood that any acquisition during the year which was not in the ordinary course of business, or was for the purpose or effect of influencing or changing control would be subject to disclosure in a Schedule 13D.

Except as described later, new Schedule 13G is to be filed annually whereas former Form 13D-5 was required to be filed quarterly. This change represents an effort to reduce the reporting burden on institutions required to file Schedule 13G.

Old Rule 13d-5(a) required that former Form 13D-5 be filed within ten days after the end of the calendar quarter in which a person became obligated to report under Section 13(d)(1). This requirement was criticized on the ground that ten days was too short a time to collect the information necessary to prepare a Form 13D-5. Reasons such as added expense, the need for management review and analysis of the data, the slowness of the mails, and the press of other regulatory reporting requirements at the end of the quarter were all cited as bases for extending the filing period.

In view of these difficulties, the Commission believes that except when the reporting person is subject to Rule 13d-1(b)(3), extension of the filing period is consistent with the objectives of Section 13(d)(5). Accordingly, filing Schedule 13G to disclose a beneficial ownership interest of more than five but not more than ten percent will be required forty-five days after the end of the calendar year.

The forepart of the Rule has also been revised to conform certain procedural aspects to Rule 13d-(1)(a). Thus, the number of copies of the statement filed under Rule 13d-1(b) is reduced from eight to six. The filing fee requirement has been removed from the rule and placed in new Rule 13d-7, which sets forth a revised fee structure.

Rule 13d-1(b)(1)(i) is unchanged from the comparable provision in old Rule 13d-5(a). Thus, Schedule 13G may be used by a specified institutional person only when such person is acquiring and holding securities in the ordinary course of business, and not with the purpose or with the effect of changing or influencing control of the issuer, or in connection with or as a participant in any transaction having such purpose or effect.

The Commission has determined not to adopt a proposal would have caused former Form 13D-5 to be unavailable if any of the securities being reported on were purchased at the direction of another person. This amendment was intended to assure further that such securities were acquired in the ordinary course of business and not with the purpose or effect of changing or influencing the control of the issuer.

The commentators were opposed to the proposal because they believed that all the persons who were permitted to use former Form 13D-5, other than investment advisers, at some point would be purchasing securities at the direction of another person. It was also noted that purchases at anothers direction are in the ordinary course of business of bank trust departments and mutual funds, but in these situations no intent to control is necessary. They also observes that the requirement is unnecessary since the person directing the purchase would have an independent obligation to file Schedule 13D.

The use of new Schedule 13G as adopted herein is expressly limited to the persons specified in subparagraph (ii) of new Rule 13d-1(b)(1). With certain significant exceptions, the persons listed are the same as those in old Rule 13d-5(a)(2). Thus, certain brokers, dealers, banks, investment companies, investment advisers, employee benefit plans, pension funds, parent holding companies, and groups continue to be eligible to use Schedule 13G. Old Rule 13d-5(a)(2), however, did not permit insurance companies to use old Form 13D-5, and as a result three rulemaking petitions, pursuant to the Commissions Rules of Practice _{17 CFR 201.4}, were filed seeking to have the Commission amend Rule 13d-5 to permit insurance companies to use the short form. Comment was specifically invited as to whether insurance companies generally, or life insurance companies or property and casualty insurance companies specifically, should qualify for inclusion in Rule 13d-5 as a class of beneficial owners entitled to use Form 13D-5 in lieu of Schedule 13D.

The commentators favored the use of Form 13D-5 by insurance companies. In their view, an adequate basis does not exist for distinguishing investors companies from the other institutional investors who would be permitted to use Form 13D-5. In this regard, it was argued that most insurance companies are subject to uniform state regulation which is comparable to or, in the case of life insurance companies, more stringent than the regulation to which the other eligible institutional investors are subject. Certain commentators also maintained that insurance company investment decisions are essentially similar to those made by other institutional investors. The relevance of the adequacy of state regulation as a substitute for the protection to investors afforded by disclosure under Section 13(d) was also questioned on the ground that the sole concern should be whether the public interest will be satisfied and investors protected if Form 13D-5 rather than Schedule 13D is filed by insurance companies. In addition, they contended that there has been an inadequate showing of any relationships between insurance companies as a group and violations of the Williams Act. Further, they argued, the availability of short form is necessary to avoid costly and duplicative reporting requirements for insurers.

In light of these comments the Commission believes that a sufficient basis exists to permit insurance companies to use Schedule 13G. During this period the reporting and disclosure practices under the Williams Act of insurance companies as well as others entitled to use the short form will be carefully monitored for the purpose of determining whether investor protection would be better served by limiting them to the use of Schedule 13D.

Under old Rule 13d-5(a)(2)(v) any pension fund was eligible to use old Form 13D-5. The Commission has, however, determined that only those pension plans which are subject to the provisions of the Employment Retirement Income Security Act of 1974 ("ERISA") are governed by uniform regulatory controls which are adequate to permit them to file Schedule 13G.

Under old Rule 13d-5(a)(2)(vi) a parent holding company could only use Form 13D-5 to report the indirect acquisition of the beneficial ownership of securities from subsidiaries which were specified in Rule 13d-5 (a)(2). This requirement was criticized because the attribution to a parent of beneficial ownership of securities from a subsidiary which was not so specified precluded the parent from using the short form. Thus, a bank holding company with several bank subsidiaries and a single finance company would have been denied the use of the short form if the finance company owned a single share of the subject Section 13(d) security.

However, the complete elimination of the qualification of the parents subsidiaries as a condition to the use of Schedule 13G would effectively make the short form available to anyone who chooses to erect a holding company structure. While such a result is obviously unsatisfactory, the Commission is mindful that the denial of the use of the short form because of the attribution of ownership of even a de minimis amount of securities may work an unduly harsh result. The comments indicate that this would be particularly likely if bank holding companies were not permitted to use the short form because of attribution from ineligible subsidiaries in view of the fact that, at least for the largest banks, substantially less than 1% of the securities deemed to be owned by each bank holding company is held by such subsidiaries. The statutory and regulatory limitations on the bank holding company activities were also pointed to as indicating that there is no purpose to be served by requiring that all subsidiaries be qualified for a bank holding company to file a short form.

The Commission believes that the addition of a de minimis proviso with respect to the attribution of ownership from non-qualifying subsidiaries strike an appropriate balance between the applicable burdens and the benefits of limiting the use of the short form within the intendment of Section 13(d)(5). Accordingly, under Rule 13d-1(b)(1)(ii)(G) the attribution of not more than one percent of a class of securities from a non-qualifying subsidiary will not preclude the parent from utilizing the short form if the information called for by Schedule 13D is furnished in the parents Schedule 13G with respect to the securities of such subsidiary.

As adopted, old Rule 13d-5 limited the use of former Form 13D-5 to domestic persons. A proposed amendment to the rule would have made Form 13D-5 available to foreign entities who otherwise qualified, provided that they agreed to made available to the Commission in the United States the same information they would be required to furnish in responding to the disclosure requirements of Schedule 13D. The Commission has determined not to adopt this amendment in view of the substantial enforcement difficulties encountered in seeking to assure compliance by foreign persons with the provisions of Section 13(d). Nonetheless, the Commission will entertain applications for exemptive orders submitted by foreign institutional investors to enable them to report their beneficial ownership on Schedule 13D, when the acquisitions are in the ordinary course of business and not with the purpose nor with the effect of changing or influencing the control of the issuer, nor in connection with or as a participant in any transaction having such purpose or effect. In this context, the Commission may consider what further conditions would be appropriate in connection with the granting of any such applications.

Old Rule 13d-5(a)(2)(vii) permitted a group, as that term is defined by Section 13(d)(3) of the Exchange Act, to use former Form 13D-5 if all the members of the group were persons specified in Rule 13d-5(a)(2) and the securities were acquired in a transaction exempt from registration under the Securities Act of 1933 pursuant to section 4(2) thereof. Institutional private placements were singled out for reporting by groups on old Form 13D-5 because the Commission believed that they represented a frequent type of acquisition in which concerted action among the purchasers took place in the ordinary course of business and not with the purpose or with the effect of changing or influencing the control of the issuer. The significance attached to compliance with section 4(2) of the Securities Act was that it helped to insure that the acquisition was a typical institutional private placement.

The commentators, however, maintained that there are situations other than institutional private placements in which a group acquires a security in the ordinary course of the members business and not with the effect of changing or influencing control. It was also argued that qualification of a non-public offering under Section 4(2) of the Securities Act depends primarily on the actions of the issuer rather than of the purchasers and is therefore an inappropriate condition to the use by groups of what is now Schedule 13G.

Although the Commission believes that situations, other than the private placement of securities directly from the issuer, in which Schedule 13G may be appropriately used by groups are probably quite limited, the Commission does not wish to unduly restrict the Rules flexibility so long as all of its conditions are met. Moreover, by not prescribing the specific types of group acquisitions which qualify for the use of Schedule 13G, it will also be available for novel, albeit legitimate, arrangements which are not now in the record before the Commission. Accordingly, compliance with section 4(2) of the Securities Act has therefore been eliminated from Rule 13d-1(b)(1)(ii)(H) as a condition to the use of Schedule 13(g) by groups.

Except for minor editorial changes, Rule 13d-1(b)(1)(iii) is identical to old Rule 13d-5(a)(3). It requires that in order to use Schedule 13G the reporting person must have promptly notified any discretionary account owner, on whose behalf it holds securities which amount to more than five percent of the class, of any acquisition or transaction which might subject such person to the reporting requirements of Section 13(d). It is contemplated that such account owners would be notified of information known to the reporting person which would reasonably inform such account owner of his ownership and a possible obligation to report under Section 13(d). The Commission continues to believe that this provision is necessary since such person may be the beneficial owner of securities held in the account, pursuant to Rule 13d-3(d)(1), if such person has the power to revoke the authority at any time.

A new provision, Rule 13d-1(b)(2), has been added to specify further reporting obligations applicable to persons otherwise eligible to use Schedule 13G, but who beneficially own more than 10 percent of the specified class of securities as of the last day of a month. This provision, which is adopted in lieu of a similar proposal contained in Release No. 34-13292 _{42 FR 12355}, requires a filing on Schedule 13G within ten days after the end of the first month in which such persons direct or indirect beneficial ownership exceeds ten percent of the class, computed as of the last day of the month, and thereafter within ten days after the end of any month, in which such persons beneficial ownership of securities of the class, computed as of the last day of the month, increases or decreases by more than five percent. Although the reports imposed by Rule 13d-1(b)(2) are in addition to those otherwise imposed by Rules 13d-1(b) and 13d-2(b), a report filed for the month of December and containing all the required information as of December 31, would satisfy the reporting persons obligation as of such date.

New provisions have also been added to the rules to address the situations in which a person reporting on a Schedule 13G ceases to be eligible to so report, due to the fact that such person concludes that he no longer has acquired or holds the securities in the ordinary course of business or not with the purpose or effect of changing or influencing control, or due to the fact that the owner ceases to be among those listed persons eligible to use the short form. In the first situation, and assuming that the person then is still the beneficial owner of more than five percent of the specified class, the reporting person will be required pursuant to Rule 13d-1(b)(3) promptly, but not more than ten days after his change of intent, to file a report on Schedule 13D. Moreover, a provision is adopted stating that for the ten day period immediately following the date of filing of Schedule 13D pursuant to this provision, the beneficial owner shall not vote or direct the voting of the subject securities, not to acquire an additional beneficial ownership interest in any equity securities of the issuer or of any person controlling such issuer. The Commission has determined that this provision is necessary and appropriate when the beneficial owner of a block of securities disclosed or to be disclosed on the short form determines he no longer has acquired or holds the securities in the ordinary course of business or that he will use such block for control purposes. The obligation to report under this provision would arise, among other situations, when the owner becomes part of a group.

If a person who has reported beneficial ownership on Schedule 13G ceases to be a person listed among those eligible to use the short form, Rule 13d-1(b)(4) states that he shall immediately become subject to those provisions which specify the obligation to file and amend on Schedule 13D, provided the person at that time is the beneficial owner of more than five percent of the class of equity securities.

A proposed amendment to old Rule 13d-5(a)(1) would have created a presumption that the acquisition of 10 percent or more of a class of an issuers equity securities by the reporting person would not be deemed to have been in the ordinary course of business. The presumption would have precluded use of former Form 13D-5 when an acquisition caused the reporting person to exceed the 10 percent amount and would have required the reporting person immediately to file on Schedule 13D, pursuant to old Rule 13d-5(c).

The commentators were critical of this proposal because they believed that it would accomplish nothing but the prevention of the use of the form by many of those who were legitimately entitled thereto. In their view, the condition that the acquisition must be in the ordinary course of business and not with the purpose or with the effect of changing or influencing control should be sufficient to satisfy the objective of the proposal.

While this proposal would undoubtedly assist in the enforcement of Section 13(d) violations, the Commission believes the obligation to report on Schedule 13D may be unduly burdensome in these instances. On balance, therefore, the Commission has decided to adopt the provisions of Rule 13d-1(b)(3) described above, and to accelerate the time of filing a short form report, rather than require a report on the long form. This provision, as well as the entire short form reporting scheme, will, however, be closely monitored by the Commission to determine whether they carry out the legislative purpose of Section 13(d). Should it subsequently become apparent that there is a pattern of acquisitions in amounts slightly less than the ten percent ceiling to evade the reporting provisions, the Commission will reconsider the rule.

(c) Rule 13d-1(c): Definition of "equity security".

A provision has been added to the definition of the term "equity security" used in Regulation 13D to narrow the scope of that term. Under the amended definition, certain securities which do not have voting rights have been excluded; these include non-voting options, warrants, rights convertible debt or convertible preferred securities. As a result, beneficial ownership of securities of such classes would not, in and of itself, generate an obligation to file reports under Sections 13(d) or 13(g). However, securities which might be acquired upon the exercise or conversion of such securities are not removed from the definition of the term "equity security" and would be includable in the calculation of the five percent threshold.

(d) Rule 13d-1: Determination of amount of outstanding securities.

This provision in substance is unchanged from that adopted in Release No. 34-13291.

(e) Rule 13d-1(e): Joint filings.

Old Rule 13d-1(b), the predecessor to new Rule 13d-1(e), permitted one acquisition statement to be filed when there is more than one beneficial owner of the same securities only if the statement were being filed on Schedule 13D. The commentators argued that former Form 13D-5 should also be made available for joint filings. They were of the view that this would avoid unnecessary duplicative reporting, minimize the compliance burden, reduce costs, and present information in a format which would be more useful for both the filing parties and for the reader. For these reasons, the Commission has determined to permit joint filings on both Schedule 13D and Schedule 13G. Because Schedule 13G is available only to specified classes of persons, another condition to the joint use of the Schedule has been added in order to maintain the integrity of that limitation. Persons seeking to jointly file a Schedule 13G must therefore be individually eligible to use Schedule 13G if they were filing separately. Thus, if an institutional investor who meets the standards of Rule 13d-1(b) and an individual investor who does not are beneficial owners of the same securities and are required to file under Section 13(d) they may not both utilize Schedule 13G since the individual does not meet the requirements for the use of that Schedule. They may file a joint Schedule 13D or the individual may file Schedule 13D and the institutional investor Schedule 13G.

As with former Rule 13d-1(b), new Rule 13d-1(e) is permissive so that each beneficial owner of the same securities may file a separate acquisition statement. This is important because each beneficial owner in a multiple beneficial ownership situation must comply with all of the rules set forth herein and the provisions of new Rule 13d-1(e) do not relieve such person from this responsibility. When two or more persons do not report jointly pursuant to Rule 13d-1(b), each such person is responsible for the timely filing of the statement and any amendments thereto, and for the completeness and accuracy of the information concerning such person contained therein. The person is not responsible for the completeness or accuracy of the information concerning the other persons making the filing, unless such person knows or has reason to believe that such information is inaccurate. The joint statement must contain all requisite information about each person and should include as an exhibit their agreement in writing that the statement is filed on behalf of each.

(2) Rule 13d-2: Filing of Amendments to Schedules 13D or 13G

(a) Rule 13d-2(a): Filing of Amendments to Schedule 13D.

New Rule 13d-2(a) requires the filing of an amendment to Schedule 13D upon the occurrence of a material change in the facts set forth in the Schedule 13D. The rule is the same as old Rule 13d-2 except for two revisions. The Rule now specifies that a decrease in beneficial ownership to less than five percent of the class is per se material and must be disclosed by amendment. In addition, the Rule indicates for the first time that material increases or decreases in the percentage of the class beneficially owned are to be reported by amendment. While an increase or decrease in the percentage of the class owned by one percent or more is deemed to be material, the Rule states acquisitions or dispositions of less than that amount may also be material depending upon the facts and circumstances of a particular case. The rule also contains a provision to make clear that an acquisition which is exempt from Section 13(d) pursuant to the two percent exemption of Section 13(d)(6)(B) need not be reported in an amendment.

Requiring the filing of an amendment upon a material increase or decrease in the percentage of the class owned represents a reversal of the prior position taken by the Commission in that previously each acquisition made after the five percent threshold was exceeded, no matter how small, was viewed as triggering a new filing requirement under Section 13(d)(1) to be satisfied by the filing of an original Schedule 13D. While the prior interpretation can be supported by the literal language of Section 13(d)(1), the Commission believes that the burden of filing a Schedule 13D is not justified with respect to the acquisition or disposition of an immaterial amount of stock.

Of course, material changes other than changes in the amount of securities beneficially owned may also occur and would be required to be disclosed in amendments.

(b) Rule 13d-2(b): Filing of Amendments to Schedule 13G.

New Rule 13d-2(b) requires the annual filing of amendments to Schedule 13G to reflect all changes in the information previously reported on that Schedule. Since the information required by Schedule 13G has been reduced to the minimum necessary to satisfy the statutory purpose, the Commission believes that except for the provisions set forth in Rule 13d-1(b)(2), (3) and (4), a materiality standard is inherent in those requirements. Moreover, the Commission believes that the compliance burden under Schedule 13G is sufficiently small that it is unnecessary to further minimize it by the insertion of an express materiality standard.

If no changes have occurred in the information contained in the previous Schedule 13G a signed statement reporting that fact must be filed with the Commission and sent to the issuer and the principal national securities exchange where the security is traded. This will permit interested persons to examine the institutional acquisition statements on Schedule 13G for the previous year for the purpose of determining their ownership.

(3) Rule 13d-3: Determination of Beneficial Owner

(a) Rule 13d-3(a): Definitions of Beneficial Ownership Rule 13d-3(a) is unchanged from that adopted in Release No. 34-13291 (42 FR 12342). It provides that a beneficial owner of a security includes any person who directly or indirectly has or shares voting power and/or investment power with respect to such security. Voting power includes "the power to vote, or to direct the voting of such security" and investment power includes "the power to dispose, or to direct the disposition of such security."

The Commission is of the view that this broad definition must be retained in order to obtain disclosure from all those persons who have the ability to change or influence control. However, the few commentators who addressed the problems encountered by institutions as a result of the definition were critical of including the power to dispose as an independent test of beneficial ownership. The Commission nevertheless continues to believe that the power to dispose, without more, gives its holder the ability to change or influence control and is therefore essential to eliciting the type of information within the purview of Section 13(d). This is attributable to the fact that the power to vote inheres in the security and may be relocated in the hands of any person to whom the holder of the power to dispose wishes to sell. Thus, the holder of the power to dispose potentially has the ability to bring about the rapid shift in control at which Section 13(d) is aimed even though he does not have the power to vote or to direct the voting of the security.

The other problems raised by institutions with respect to the definition appear largely to be alleviated by the simplification of the reporting and disclosure requirements to which they now would be subject. Nonetheless, some institutional investor concerns regarding the definition cannot be remedied because to do so would undermine realization of the purposes of Section 13(d).

(b) Rule 13d-3(b): Evasion of Definition of Beneficial Owner

Rule 13d-3(b) is unchanged from that adopted in Exchange Act Release No. 34-13291 (42 FR 12342). The purpose of the Rule is to ensure that Rule is to ensure that Rule 13d-3(a) is not circumvented by an arrangement to divest a person of beneficial ownership or to prevent the vesting of beneficial ownership as part of a plan or scheme to evade the reporting requirements of Section 13(d).

(c) Rule 13d-3(c): Aggregation of Securities Beneficially Owned

Rule 13d-3(c) is also unchanged from that adopted in Exchange Act Release No. 34-13291 (42 FR 12342). It provides that all securities beneficially owned by a person are to be aggregated in determining how many securities such person owns, regardless of the nature of the beneficial ownership.

The commentators recommended that an exemption be created for persons qualified to file former Form 13D-5 from the requirements to aggregate securities held by foreign branches and subsidiaries. They argued that the number of securities held in foreign branches and subsidiaries is so small relative to the total holdings of most institutions that the reportedly significant additional cost of establishing and operating a system to track those securities would not be justified. Such a reduction in the reporting burden on institutions eligible to file Form 13D-5 was thought to be consistent with the purposes of Section 13(d) because they cannot, be definition, be exercising control. The commentators also maintained that the applicability of bank and investment account records presents a serious risk of liability to reporting institutions if they make the disclosures contemplated by the rules.

The Commission continues to believe that complete aggregation is essential to the determination of the potential to affect control with which any given individual is vested. The presentation of ownership information which has been developed without complete aggregation would not truly reflect that potential. The Commission is mindful of the burden imposed on institutional investors as a result of this requirement, however, the one percent provision adopted in Rule 13d-1(b)(ii)(G) should afford a measure of relief from many of the objections. Rather than distort the information which is obtained, the Commission has chosen to reduce the overall burden of reporting in order to more appropriately balance the costs and benefits attendant to reporting under the rules.

The recent amendments to Section 13(d)(1) to require disclosure of the citizenship of the beneficial owner of securities and his associates evince a Congressional intent to obtain information about foreign ownership of U.S. corporations. It would be inconsistent with these amendments for the Commission to create an exemption from the aggregation requirements for securities beneficially owned by foreign branches and subsidiaries because of concern over the application of foreign secrecy laws.

(d) Rule 13d-3(d): Persons Who Are Deemed Beneficial Owners

New Rule 13d-3(d)(1)(i) deems a person to be the beneficial owner of a security if he has the right to acquire beneficial ownership of such security, at any time within sixty days, through: (a) the exercise of an option, warrant or right, (b) the conversion of a convertible security, (c) the power to revoke a trust, discretionary account or similar arrangement, or (d) the automatic termination of a trust, discretionary account or similar arrangement; provided, however, that if the acquisition of a security or power described in (a), (b) or (c) is for control purposes, the holder of the security or power immediately upon such acquisition shall be deemed the beneficial owner of the underlying securities. The Rule is the same as old Rule 13d-3(d)(1) except that the proviso has been added to (a), (b) and (c), and the provision of (d) concerning automatic termination has been added. The latter action reflects the proposed amendment to old Rule 13d-3(d)(1) but utilizes the same sixty day time period applicable to the other instruments giving one the right to acquire securities. The proposal would have reached automatic terminations of trusts, discretionary accounts or similar arrangements within a specified period of time from one to five years.

The same reasons which influenced the Commission in deciding to utilize a sixty day time period for the automatic termination provision were also decisive in its determination not to adopt the proposed amendment which would have deleted the sixty day time period from the predecessor of Rule 13d-3(d)(1)(ii). Under that proposal a person would be deemed a beneficial owner of securities with respect to which he has the right to acquire at any time. The commentators criticized this proposal on the ground that it would escalate substantially the cost of compliance and the possibility of inadvertent non-compliance. The Commission is also mindful that as the point in time in which the right to acquire may come to fruition is extended into the future the relation of the rights ability to influence control is correspondingly attenuated. When sixty days or less are left until the right to acquire may be exercised, the Commission believes that the ability of the holder of such right to effect control is sufficient to warrant the imposition of an obligation to file under Rule 13d-1. Nonetheless, it is recognized that the acquisition of options or convertible securities, or the acquisition of a power to revoke a trust or similar arrangement offers a distinct possibility for actions which are for the purpose or with the effect of changing or influencing control as, for example, in obtaining an interest in a block of securities large enough to influence control, or in coupling an option with an agreement concerning the composition of the board of directors. In such instances, the rule as adopted does not afford the holder the benefit of the sixty-day provision.

The Commission has determined not to adopt the suggestion made by certain commentators that persons qualified to file former Form 13D-5 be exempted from what is now Rule 13d-3(d)(1)(ii). The commentators favored such an exemption primarily because of the substantial costs which they estimate would be incurred in designing and operating a system to monitor the various investment vehicles which represent the right to acquire an equity security. In their view, the burdens associated with disclosure of these contingent interests, in the context of acquisitions which are not made with the purpose or with the effect of changing or influencing control, outweigh attendant benefits to the public from such disclosure. As explained above in connection with the recommendation for an exemption from the aggregation requirement for securities held by foreign branches and subsidiaries of institutions eligible to use old Form 13D-5, the Commission has chosen to reduce the overall reporting burden imposed on qualifying institutions rather than to sacrifice the accuracy and completeness of the information which is obtained.

New Rule 13d-3(d)(l)(ii) has been in response to an interpretative question which has arisen under the old rules with respect to the obligation to report separately for options, warrants, rights or convertible securities and the underlying securities. For example, inquiries have been received as to whether the obligation to file pursuant to Section 13(d) with convertible securities which are registered under Section 12 of the Exchange Act is to be determined based on the percentage of the class of convertible securities beneficially owned or the beneficial ownership of the securities into which they may be converted. This may be important because the amount of convertible securities outstanding may be much smaller than the securities into which they may be converted and therefore increase the likelihood that the percentage of a class beneficially owned will exceed the five percent threshold. Rule 13d-3(d)(l)(ii) indicates that in such a situation a reporting obligation may exist simultaneously with respect to both the convertible security and, by virtue of Rule 13d-3(d)(l)(i), the security into which it may be converted. Thus, if a person beneficially owns more than five percent of a class of convertible preferred stock upon conversion of which he would also become the beneficial owner of more than five percent of a class of common stock, and both classes are registered under Section 12 of the Exchange Act, he would have the obligation to file a Schedule 13D or Schedule 13G for the preferred stock and for the common stock. It should be noted, however, that an amendment to Rule 13d-1(c), discussed earlier, deletes certain non-voting securities from the definition of "equity security" and consequently should reduce the incidence to these types of questions.

Rule 13d-3(d)(2) is unchanged from that adopted in Exchange Act Release No. 13292. It excludes from the definition of beneficial owner any person whose only interest in the securities is record ownership and membership on a national securities exchange that has rules which permit a member to vote such securities without instruction on certain routine matters. ¹⁴

Old Rule 13d-3(d)(3) excluded from the definition of beneficial owner any person whose only interest in the securities is that of a pledgee in the ordinary course of his business pursuant to a bona fide pledgee agreement. However, in the event of a default under such an agreement, the Rule provided that the pledgee would be deemed the beneficial owner if the event of default remained uncured for more than thirty days, or at any time before the default was cured, if the power acquired by the pledgee because of the default enabled him to change or influence issuer control.

The commentators stated that they do not have computer systems capable of providing the information that would have been required under the Rule. Start-up costs to create such a system and the annual operating expense were reported to be substantial. The commentators also argued that the Rule did not comport with the commercial realties of bank pledge situations in that they do not take pledged securities for the purpose of exercising investment or voting rights with respect to such securities. Moreover, they indicated that in the event of default the banks will most often attempt to work out the problem with the borrower without taking any action on the pledged securities. Further, they stated that it is extremely rare that a bank will vote pledged securities.

The most common recommendation for the revision of the Rule was that institutions which qualify for the use of Form 13D-5 should not be required to classify pledged securities as "beneficially owned" until such time as they exercise the right to vote the pledged securities. The Commission believes that this would be a somewhat unsatisfactory basis upon which to impose a reporting requirement for at that point the change of or influence upon control will have already occurred. In addition, limiting the requirement to the power to vote ignores the ability to affect control inherent in the power to dispose of securities. Nevertheless, the Commission is of the view that if institutions which are eligible to file Schedule 13G and which meet certain other conditions are not deemed to be the beneficial owners until such time as they formally declare a default and decide that the power to vote or dispose will be exercised, disclosure will in most instances be elicited at a point sufficiently far in advance of those acts to be of value to investors. Thus, new Rule 13d-3(d)(3) provides that persons qualified to file Schedule 13G who become pledgees of securities in the ordinary course of their business pursuant to certain bona fide pledge agreements, which have not been entered into with the purpose or with the effect of changing or influencing issuer control, will be deemed not to have acquired beneficial ownership of such securities upon a default until such time as the pledgee determines that the power to vote or dispose of the pledged securities will be exercised. However, the Rule conditions its availability on the absence of a provision in the pledge agreements that gives the pledgee the power to vote or to dispose of the pledged securities prior to default. In that situation, the definition of beneficial owner in Rule 13d-3(a) would determine when the pledgee became a beneficial owner.

The Rule no longer specifically excludes from the definition of beneficial owner any person whose only interest in the securities is that of a pledgee in the ordinary course of his business. The Commission believes such a provision to be superfluous since under the definition of beneficial owner in Rule 13d-3(a) a pledgee of securities who prior to default has neither the power to vote or dispose would not be considered the beneficial owner of the securities.

Under new Rule 13d-3(d)(4) an underwriter is deemed not to be the beneficial owner of securities which he acquires as part of a good faith firm commitment underwriting where it is anticipated that he will, as part of a distribution registered under the Securities Act, be immediately reselling such securities. By analogy to the forty-day period specified in Section 4(3) of the Securities Act, the Rule subjects such underwriter to Section 13(d)(l) if beneficial ownership of the securities is retained for more than forty days.

Rule 13d-3(d)(4) produces the same effect as former Rule 13d-7(a) which deemed there to be no "acquisition" in such circumstances during the first forty days the underwriter beneficially owned the security. The approach of deeming such underwriters not to be "beneficial owners" until the lapse of the forty-day period was utilized in lieu of deeming there to be no "acquisition" in anticipation of the adoption of rules implementing Section 13(g). This is necessary because reporting under Section 13(g) is required by a "beneficial owner" of more than five percent of a class of equity security whereas under Section 13(d) reporting is required by a person "acquiring" beneficial ownership of securities exceeding that amount. Thus, if the exemptive approach taken in Rule 13d-7(a) had been retained, underwriters would have to report under Section 13(g) upon its implementation, even if they are within the forty-day provision.

(4) Rule 13d-4: Disclosure of Beneficial Ownership

Rule 13d-4 is unchanged from that adopted in Exchange Act Release No. 34-13291 (42 FR 12342). It permits any person to expressly declare in such persons Schedule 13D or Schedule 13G that the filing of such a statement shall not be construed as an admission that the person is the beneficial owner of the securities covered by such statement.

(5) Rule 13d-5: Acquisition of Securities

New Rule 13d-5(a) is the same as old Rule 13d-6(a) except that the note thereto has been included as a substantive provision of the Rule. The Rule deems certain persons who become beneficial owners of securities to have "acquired" them for the purposes of Section 13(d)(l) of the Exchange Act. Donees, executors, trustees and legatees who become beneficial owners of securities will be deemed to have "acquired" such securities, even though such persons had not so intended and had taken no action to become beneficial owners. However, executors and administrators of the estate of a decedent will be presumed not to have acquired beneficial ownership until they are qualified under local law to perform their duties.

New Rule 13d-5(b) corresponds to former Rule 13d-6(b). It deems the group formed by two or more persons who agree to act together for the purpose of acquiring, holding, voting or disposing of equity securities of an issuer to have acquired, for the purpose of Sections 13(d) and 13(g), beneficial ownership, as of the date of their agreement, of all securities beneficially owned by any member of such group. ¹⁵

Rule 13d-5(b) applies only to agreements relating to equity securities whereas former Rule 13d-6(b) applied to all securities. The commentators criticized the application of former Rule 13d-6(b) to non-equity securities because it created filing obligations in situations which they believed to be beyond the purpose of Section 13(d). Leaving Rule 13d-6(b) as it stood in this respect would have resulted in the application of Section 13(d)(1) to private placements of straight debt securities with institutional investors and to certain loan workouts involving the cooperation of more than one lender. The Commission is also mindful that while Section 13(d)(3) is not specifically limited to equity securities, Section 13(d) as a whole relates only to the acquisition of equity securities. Moreover, the Commission believes that limiting Rule 13d-5(b) to equity securities does not frustrate the Congressional purpose underlying Section 13(d) since any intention on the part of purchasers of a debt security to pool their equity securities would trigger a group filing.

Minor word changes have also been made from the predecessor of Rule 13d-5(b). The most significant of these is the addition of the word "voting" to the list of actions to which an agreement must relate in order for the Rule to apply. The Commission considered "voting" to be subsumed within the term "holding" but has decided to make this express to avoid any misunderstanding.

New Rule 13d-5(b)(2) deems there to be no "group" within the meaning of Section 13(d)(3), when securities are privately placed by the issuer with persons who are eligible to file Schedule 13G and there is no agreement among members of the group to act together except for the purpose of facilitating the particular transaction. However, if the purchase is not in the ordinary course of each members business, or is with the purpose or the effect of changing or influencing issuer control, or is there is cooperative activity of a non-ministerial nature among group members subsequent to the closing date, a group filing obligation would arise.

New Rule 13d-5(b)(2) reflects a suggestion by commentators that an exemption from the predecessor of the Rule 13d-5(b) be provided for institutional private placements directly from the issuer. The Commission agrees with the commentators that such transactions are not within the primary scope of Section 13(d)(3). The legislative history of that Section reveals that it was intended primarily to prevent a group of persons seeking to change or influence issuer control from evading the provisions of Section 13(d) because no one individual owned more than five percent of a class of securities. ¹⁶ The cooperative activity characteristic of an institutional private placement directly from the issuer generally results from sound business considerations such as cost savings resulting from the use of common counsel and forms, rather than from a desire to affect control of the issuer. Moreover, since the cooperative activity generally ends when the transaction is completed, the information obtained in such a group filing is of little interest to investors and is available to the issuer.

(6) Rule 13d-6: Exemption of Certain Acquisitions

New Rule 13d-6 is substantially the same as old Rule 13d-7(b). However, paragraph (b) of the Rule has been revised to address the situation where an issuer is the sole distributor of the rights, and during the rights offering period, purchases rights from the security holders to whom such rights were originally issued, and does not subsequently sell the securities underlying the rights purchased. Under these circumstances, a person who owned beneficially, prior to the rights offering, in excess of 5 percent of the underlying security and who exercised his pro rata portion of the rights offered would inadvertently have acquired more than his pro rata share of the securities actually sold and, accordingly, would not have been eligible to use the exemption as previously stated.

(7) Rule 13d-7: Fees for Filing Schedules 13D or 13G.

New Rule 13d-7 establishes a uniform fee schedule for acquisition statements filed on Schedule 13D and 13G. It provides that the first Schedule which is filed must be accompanied by a filing fee of $100. All amendments to that Schedule reflecting an increase in ownership about five percent do not require an additional fee. However, after an amendment to the Schedule reporting beneficial ownership of less than five percent has been filed, the first Schedule filed thereafter is treated as a new filing for fee purposes and must be accompanied by a filing fee of $100.

(8) Schedule 13D: Acquisition Statement Filed Pursuant to Rule 13d-1(a).

(a) Cover Sheet

An instruction has been added to the Cover Sheet of new Schedule 13D to notify interested persons that the Schedule relates to an acquisition which has been previously reported on Schedule 13G and that it is now being reported on Schedule 13D, as required by Rule 13d-1(b)(3) or (4), because the beneficial owner is no longer eligible to file Schedule 13G. The purpose of the instruction is to avoid confusion which might otherwise arise because of double counting of the same ownership. Another instruction is added concerning the filing fee.

The note concerning the number of copies to be filed has been revised to require six copies in order to conform it to new Rule 13d-1(a).

(b) Instructions.

Instructions A and B are unchanged from those adopted in Exchange Act Release No. 34-13291 (42 FR 12342). Although new Instruction C is substantially the same, it has been revised to conform more closely to Instruction C of Schedule 14D-1 because the commentators believe that it is easier to understand in that format.

(c) Item 1: Security and Issuer

The only change in new Item 1 is that the address of the issuer to be furnished has been clarified to be that of their principal executive offices. This is in conformity with the disclosure required in other Commission filings.

(d) Item 2: Identity and Background

New Item 2 has essentially been conformed to Item 2 of Schedule 14D-1. The introductory paragraph of Item 2 has been modified to clarify the disclosure required by Item 2 for natural persons as compared with other entities. If the person filing the statement or any other person enumerated in Instruction C of the Schedule is a corporation, partnership, limited partnership, syndicate or other group of persons certain information is required. This includes: the name; the state or other place of organization; the principal business; the address of the principal office, and the information regarding criminal proceedings and civil actions required by Items 2(d) and (e), respectively. If one or more of these is inapplicable or if the answer is in the negative, a statement should be made to that effect pursuant to Instruction A of the Schedule.

Information concerning material occupations and employments during the preceding five years, formerly required by Item 2(d) of old Schedule 13D, has been deleted in an effort to reduce the compliance burden. The Commission believes that in the context of an acquisition covered by the Schedule a statement of the present principal occupation or employment ordinarily provides adequate disclosure as to the competence of the persons required to give such information.

New Item 2(e) requires disclosure about civil proceedings involving securities laws violations at either the federal or state level during the preceding five year period. The proposed amendment to Item 2 has been followed except that the proposal has been conformed to Item 2(f) of Schedule 14D-1 by requiring disclosure of judicial or administrative findings of violations of law rather than of liability. This was done to provide disclosure of cases in which a violation has been found by the court or admitted by the party.

(e) Item 3: Source and Amount of Funds or Other Consideration.

New Item 3, concerning disclosure of the source of the funds used or to be used in making the acquisitions, is similar to old item 3. The reference of consideration used to "to be used" is added to assure that financing arrangements are disclosed. Also with respect to the source of funds, a sentence is added stating that where material, similar source of funds information should be given with respect to prior acquisitions not previously reported pursuant to the regulation. This provision will help assure that filing persons disclose appropriate information when they have engaged in a series of acquisitions.

"Voting" has been added to the list of purposes for which the securities have been purchased in order to make express what the Commission believed to be implicit in the term "holding". A sentence has also been added to provide the option of preserving the confidentiality of the identity of a bank that has made a loan which is a source of funds under the item. The provision was added because many persons were not aware that under Section 13(d)(1)(B) of the Exchange Act they did not have to disclose the name of the bank publicly in such circumstances.

(f) Item 4: Purpose of Transaction

Unlike old Item 4, new Item 4 requires disclosure of plans in the nature of those described in the Item regardless of whether one of the purposes of the purchase is to acquire control of the issuer. New Item 4 effectuates the proposed amendments to old Item 4 but has been conformed more closely to Item 5 of Schedule 14D-1. In this regard, plans or proposals which result in or relate to extraordinary corporate transactions have been made a separate item of disclosure, as in Schedule 14D-1. This is to obviate the possible limitation on disclosure under the Item to only extraordinary corporate transactions as a result of the placement in the proposal of the term "extraordinary corporate transactions" prior to the list of enumerated disclosures. The Item has also been expanded to require disclosure about types of plans of the purchaser not specifically required by old Item 4 or Item 5 of Schedule 14d-1, including plans relating to: the acquisition of additional securities or the disposition of securities; and changes in the governing corporate documents which might be used to deter unfriendly takeovers. In addition, an Item has been added to make express what has been implicit all long-that disclosure of plans relating to actions similar to those specifically prescribed must also be made.

(g) Item 5: Interest in Securities of the Issuer.

Disclosure of the shares beneficially owned has been limited in the new Item 5(a) to the persons named in Item 2 and persons who together with such persons comprise a group. This action has been taken in response to the difficulties raised by the commentators with respect to the disclosure of the ownership of associates of the persons specified in Item 5. For instance, if an outside director happened to be an officer of a bank, the use of the term "associate" in old Item 5(a) would have required disclosure of all shares of the class being reported on as to which the bank and its subsidiaries were beneficial owners, even though the bank was not a member of a group. The Commission believes that, in light of the breadth of the definition of beneficial ownership and Instruction C to the Schedule, the burden of obtaining disclosure of the securities owned by associates is not warranted by the purpose of Section 13(d). It also appears that specifically requiring disclosure of the ownership of majority owned subsidiaries is unnecessary since the definition of beneficial ownership automatically attributes such ownership to a parent who is among those specified in new Item 5(a). By requiring persons who are members of a group with the persons named in Item 2 to also disclose the amount of shares which they beneficially own, new Item 5(a) has the flexibility to elicit ownership information from persons outside the normal chain of persons specified in Item 2 only where it is necessary to satisfy the purpose of Section 13(d).

A parenthetical clause has been added to 5(a) permitting reliance on the most recently available filing with the Commission by the issuer in making the determination of the percentage of the class beneficially owned, unless the filing person has reason to believe the information in such filing is not current. This tracks an identical provision in Item 6(a) of Schedule 14D-1.

Item 5(b) has been amended to call for a further breakdown of the shares as to which a beneficial owner has the power to vote or dispose, by requiring the owner to indicate whether the powers are sole or shared. The Commission believes that this will improve disclosure of a persons ability to affect control since the scope of the ability to direct the voting or disposition of securities is typically more limited when those powers are shared. The Item also calls for disclosure of the information required by Item 2 with respect to each person with whom the power to vote or dispose is shared.

Consistently with the amendments to Item 5(a), new Item 5(c) has been limited to requiring a description of recent transactions in the securities by the persons named in Item 5(a). Old Item 5(c) would have also required disclosure of recent transactions by executive officers, directors or affiliates of any subsidiary of the persons named in old Item 5(a). Returning to the previous example of the executive officer of a bank who is an outside director of a company named in Item 5(a), the application of old Item 5(c) would have resulted in the disclosure of recent transactions in the securities by the bank, as an associate of the director, and by all the executive officers, directors and affiliates of the banks subsidiaries. In retrospect, the Commission believes that disclosure should not be required of such persons in all instances. If the benefits of disclosures are to outweigh the burdens of compliance, persons who are remotely related to the triggering acquisition should only have to disclose the prescribed information when they have agreed to act with the more central figures to acquire, hold, vote or dispose of the subject securities. This has been achieved by combining the utilization of the group concept in Item 5(a) with a reference to the persons named in that Item in Item 5(c).

New Item 5(d) is limited to the receipt of dividends or the proceeds upon sale whereas old Item 5(d) applied to all economic interests in the securities. The Commission has limited the item to the traditional economic interests in a security in order to facilitate compliance with the Item. Prior to the amendment considerable uncertainty had been expressed with respect to the scope of the interests contemplated by the Item.

New Item 5(e) has been added in response to a recommendation by the commentators for a provision which would permit them to report that their beneficial ownership had decreased to less than five percent of a class. This was also necessary because Rule 13d-2(a) now requires the filing of an amendment in that situation.

(h) Item 6: Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer

New Item 6 is essentially unchanged from old Item 6, except that the obligation to disclose contracts, arrangements, understandings or relationships with respect to securities of the issuer is clarified to include such agreements among the persons named in Item 2, and between those persons and any other person.

(i) Item 7: Material to be Filed as Exhibits

New Item 7 has been adopted as proposed for comment. The Item requires the filing as exhibits of any supporting documentation for responses to Items 3, 4 and 6 of the Schedule. The Item also provides for filing as an exhibit, as required by Rule 13d-1(e), the written agreement of two or more persons required to file an acquisition statement governing the same securities pursuant to which they agree to file only one statement.

(9) Schedule 13G: Acquisition Statement Filed Pursuant to Rule 13d-1(b)

(a) Instructions

Instruction A has been added to remind filing persons that Rule 13d-1(b) requires that Schedule 13G must be filed within 45 days after the end of the calendar year to which the statement relates, or within the time specified in Rule 13d-1(b)(2), if applicable. In order to ease the compliance burden Instruction B provides that when a form is adopted under Section 13(f) information contained therein may be incorporated by reference in response to any item of Schedule 13G so long as copies of the relevant pages are filed as exhibits.

(b) Items 1 and 2

Although the subitems 1 and 2 have been rearranged, the only substantive changes are the addition of new Items 1(b) and 2(c). Item 1(b) requires disclosure of the address of the issuers principal executive offices. Item 2(c) requires the filing person to state his citizenship. This effectuates the Congressional directive in the recent amendments to Section 13(d)(1) to obtain citizenship disclosure.

(c) Item 3

Item 3 has been expanded to conform to the revised list of persons eligible to file Schedule 13G, as set forth in Rule 13d-1(b)(1)(ii).

(d) Item 4: Ownership

Old Item 4(a), which required a statement of all increases and decreases in ownership during the reporting period, has been deleted from Schedule 13G as a result of the data submitted by the commentators with respect to the cost of furnishing that information. The Commission believes that the benefits of such disclosure do not warrant expenditures of the magnitude said to be necessary to obtain it.

New Item 4(a) requires the amount beneficially owned to be stated as of December 31 of the year to which the statement relates or as of the last day of any month described in Rule 13d-1(b)(2), if applicable. This is consistent with new Rule 13d-1(b) and is intended to avoid the necessity of having to create a system to track ownership between the end of the year and the time the statement may be filed.

New Item 4(c) requires a breakdown of the amount of securities beneficially owned into the shares as to which there is sole power to vote, shared power to vote, sole power to dispose and shared power to dispose. This is consistent with new Item 5(b) of Schedule 13D. It also gives effect to the recent amendments to Section 13(d)(1)(A) specifically authorizing the Commission to require disclosure of the nature of the beneficial ownership.

(e) Item 5: Ownership of Five Percent Or Less of a Class

Old Item 5 required the filing person to state the date or dates upon which he commenced and/or ceased to be the beneficial owner of more than five percent of the class of securities. This requirement was criticized by the commentators because it also required the implementation of an expensive tracking system to determine a precise date. New Item 5(c) will not require such a system since it merely requires the filing person to indicate whether the Schedule is being filed for the purpose of reporting that he is no longer the owner of more than five percent of a class of securities.

(f) Item 6: Ownership of More than Five Percent on Behalf of Another Person

New Item 6 is substantially the same as old Item 6 except that the only economic interests in securities to which it is now applicable are the receipt of dividends or the proceeds upon sale. The Commission determined to limit the Item for the reasons discussed in connection with the same amendment of Item 5(d) of Schedule 13D.

(g) Item 7: Identification and Classification of the Subsidiary Which Required the Security Being Reported on By the Parent Holding Company

A provision has been added for filing an exhibit pursuant to Rule 13d-1(b)(1)(ii)(G) which includes Schedule 13D information for a subsidiary who is not qualified to file the Schedule and who owns not more than one percent of the subject security.

(h) Items 8 and 9

Items 8 and 9 are unchanged.

(i) Item 10: Certification

The certification has been made a separate item in anticipation of the filing of Schedule 13G by persons under rules implementing Section 13(g) since only persons filing pursuant to Rule 13d-1(b) would be required to include it.

B. Provisions Relating to Reporting Obligations of Registrants

Item 19 of Form S-1, Item 18 of Form S-11, Item 5 of Form 10, Item 14 of Form 10-K and Item 5(g) of Schedule 14A require, upon the effective date of the amendments contained in this release, a table setting forth, among other things, the total number of shares beneficially owned and the percent of the class so owned for each person who is known by the registrant to be the beneficial owner of more than five percent of any class of the registrants voting securities. The registrant is also required to identify, to the extent known, the shares listed in the table as to which the beneficial owner has the right to acquire beneficial ownership.

New Instruction 1 to these items requires securities deemed outstanding under new Rule 13d-3(d)(1) to be added to the number of shares actually outstanding for the purpose of calculating the percentage of the class owned by a person who is deemed to own securities under that rule. The previous instruction gave the registrant the option of including securities deemed outstanding in such circumstances so long as it made appropriate disclosure that it was doing so.

Upon reconsideration, the Commission believes it is inconsistent with the definition of beneficial ownership, in general, and Rule 13d-3(d)(1), in particular, to permit the registrant to elect the method of disclosing percentage ownership. In order to accurately reflect, in percentage terms, the potential which a given individual has to change or influence issuer control, the shares deemed outstanding must be increased to the same extent as the shares deemed to beneficially owned. If the shares deemed to be beneficially owned under Rule 13d-3(d)(1) are added only to the numerator, the percentage figure obtained thereby over-represents the ability to affect control. If the shares deemed outstanding under Rule 13d-3(d)(1) are included neither in the numerator nor in the denominator, effect is not given to the determination reflected in the Rule that the right to acquire a security within sixty days or under other specified conditions makes a person the beneficial owner of the security subject to the right. Moreover, the old instruction would give rise to the anomalous result whereby a person would possibly be shown in the affected forms and schedules as owning a percentage of the class of securities different from the set forth in the Schedule 13D or Schedule 13G filed by such person. Accordingly, where securities are deemed to be beneficially owned under new Rule 13d-3(d)(1), the instruction now requires that both the numerator and the denominator be adjusted correspondingly. It should be noted, however, that securities are deemed outstanding under new Rule 13d-3(d)(1), and thus under the Instruction, for computing the percentage of the class owned only for the particular individual who is deemed to own securities which he has the right to acquire. This is a familiar provision which follows by analogy the percentage calculation provision in Rule 16a-2 _{17 CRF 240.16a-2} under the Exchange Act.

III. Certain Findings

As required by Section 23(a)(2) of the Exchange Act, the Commission has specifically considered the impact which the rules and schedules adopted herein would have on competition. The Commission has found that neither the preparation and disclosure of ownership information by beneficial owners pursuant to the Exchange Act nor the preparation and disclosure of ownership information by issuers pursuant to the Securities Act and the Exchange Act will significantly burden competition. In any event, the Commission has determined that any possible resulting competitive burden will be far outweighed by, and is necessary and appropriate to achieve, the benefits of this information to investors.

In Exchange Act Release No. 34-13900 the Commission specifically invited comments as to the cost of compliance with the old rules. As explained in the synopsis of the new rules, a number of revisions have been made to reduce the cost compliance where it was consistent with the purposes of Section 13(d). The Commission finds that the costs of the rules adopted herein are not unreasonable and are far outweighed by the benefits which will accrue to investors.

IV. Operation of Rules Adopted, Effective Date

The effective date of the actions announced herein will be thirty days after the publication of this release in the FEDERAL REGISTER.

The Commission has concluded that the provisions which had been scheduled to become effective on April 30, 1978, as specified in Release No. 34-13291 _{42 FR 12342} and Release No. 34-13844 _{42 FR 41405}, will not become effective on such date, and instead will be deferred until the effective date of the actions contained herein; i.e., thirty days following publication in the FEDERAL REGISTER.

Certain amendments which will become effective on the same date of the actions contained herein involve amendments to the registration statement forms under the Securities Act, and to registration statement and periodic reporting forms under the Exchange Act, as well as to the proxy rules under the latter act.

The Commissions staff will not require compliance with those new amended disclosure provisions with respect to: (1) registration statements under the Securities Act filed prior to the effective date of these rules, and pre-effective amendments thereto filed within a reasonable time thereafter (the amended disclosure provisions will apply to registration statements and post-effective amendments filed on or after the effective date); and (2) proxy soliciting material or information statement material, when the preliminary filing of such material was prior to the effective date.

The amendments will apply to periodic reports filed after the effective date.

Any person who so chooses may rely upon the new rules, schedules and amendments immediately. No person is relieved from complying with such persons present statutory obligations under Section 13(d) pending the effective date of these rules, schedules and amendments.

V. Authority

The Commission hereby amends Rules 13d-1, 13d-2, 13d-3, 13d-5, 13d-6 and 13d-7 and Schedule 13D and adopts Schedule 13G pursuant to the authority set forth in Sections 3(b), 13(d)(1), 13(d)(2), 13(d)(3), 13(d)(5), 13(d)(6) and 23 of the Exchange Act; amends Forms 10 and 10-K and Schedule 14A pursuant to the authority set forth in Sections 12, 13, 14 15(d) and 23 of the Exchange Act; and amends Forms S-1 and S-11 pursuant to the authority set forth in Sections 7, 10 and 19(a) of the Securities Act. The Commission finds that any changes in the amended rules and schedule and in the schedule adopted from those published in Exchange Act Release No. 34-13291 (42 FR 12342) have already been generally subject to comment during the Beneficial Ownership Hearings or as a result of the proposals published in Exchange Act Release No. 34-11616 (40 FR 42212), the amendments proposed in Exchange Act Release No. 34-13292 (42 FR 12355), or the issues raised in Exchange Act Release No. 34-13900 (42 FR 44964) and are either technical in nature or are less burdensome than previous requirements, so that further notice and rulemaking procedures pursuant to the Administrative Procedure Act (5 U.S.C. 553) are not necessary.

Text of Adopted and Amended Rules and Schedules

I. 17 CFR 240.13d-102 Form 13d-5-Short Form acquisition notice pursuant to §240.13d-5 under the Securities Exchange Act of 1934 is rescinded.

II. 17 CFR Part 240 is amended by revising §240.13d-1 to read as follows:

REGULATION 13D

§240.13d-1 Filing of Schedules 13D and 13G.

(a) Any person who, after acquiring directly or indirectly the beneficial ownership of any equity security of a class which is specified in paragraph (c), is directly or indirectly the beneficial owner of more than five percent of such class shall, within ten days after such acquisition, send to the issuer of the security at its principal executive office, by registered or certified mail, and to each exchange where the security is traded, and file with the Commission, a statement containing the information required by Schedule 13D _{§240.13d-101}. Six copies of the statement, including all exhibits, shall be filed with the Commission.

(b)(1) A person who would otherwise be obligated under paragraph (a) to file a statement on Schedule 13D may, in lieu thereof, file with the Commission, within forty-five days after the end of the calendar year in which such person became so obligated six copies, including all exhibits, of a short form statement on Schedule 13G and send one copy each of such Schedule to the issuer of the security at its principal executive office, by registered or certified mail, and to the principal national securities exchange where the security is traded, provided that it shall not be necessary to file a Schedule 13G unless the percentage of the class of equity security specified in paragraph (c) beneficially owned as of the end of the calendar year is more than five percent, and provided further that:

(i) Such person has acquired such securities in the ordinary course of his business and not with the purpose nor with the effect of changing or influencing the control of the issuer, nor in connection with or as a participant in any transaction having such purpose or effect, including any transaction subject to Rule 13d-3(b) (§240.13d-3(b)); and

(ii) Such person is:

(A) A broker or dealer registered under section 15 of the Act;

(B) A bank as defined in Section 3(a)(6) of the Act;

(C) An insurance company as defined in Section 3(a)(19) of the Act;

(D) An investment company registered under Section 8 of the Investment Company Act of 1940;

(E) An investment adviser registered under Section 203 of the Investment Advisers Act of 1940;

(F) An employee benefit plan, or pension fund which is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA") or an endowment fund;

(G) A parent holding company, provided that: ₁ the Schedule 13G is being used to report the indirect acquisition of the beneficial ownership of securities acquired by a subsidiary; and ₂ such subsidiary is a person specified in Rule 13d-1(b)(1)(ii) (§240.13d-1(b)(1)(ii)) except that the inclusion in the reported holdings of not more than one percent of a class beneficially owned by a subsidiary that is not so specified will not prevent the use of Schedule 13G, so long as the information called for by Schedule 13D is furnished in the parents Schedule 13G with respect to the securities of such subsidiary;

(H) A group, provided that all the members are persons specified in Rule 13d-1(b)(1)(ii)(A) through (G); and

(iii) Such person has promptly notified any other person (or group within the meaning of Section 13(d)(3) of the Act) on whose behalf it holds, on a discretionary basis, securities exceeding five percent of the class, of any acquisition or transaction on behalf of such other person which might be reportable by the person under Section 13(d) of the Act. This paragraph only requires notice to the account owner of information which the filing person reasonably should be expected to know and which would advise the account owner of an obligation he may have to file a statement pursuant to Section 13(d) of the Act or an amendment thereto.

(2) Any person relying on Rules 13d-1(b)(1) and 13d-2(b) shall, in addition to filing any statements required thereunder, file a statement on Schedule 13G, within ten days after the end of the first month in which such persons direct or indirect beneficial ownership exceeds ten percent of a class of equity securities specified in Rule 13d-1(c) computed as of the last day of the month, and thereafter within ten days after the end of any month in which such persons beneficial ownership of securities of such class, computed as of the last day of the month, increases or decreases by more than five percent of such class of equity securities. Six copies of such statement, including all exhibits, shall be filed with the Commission and one each sent, by registered or certified mail, to the issuer of the security at its principal executive office and to the principal national securities exchange where the security is traded. Once an amendment has been filed reflecting beneficial ownership of five percent or less of the class of securities, no additional filings are required by this paragraph (b)(2) unless the person thereafter becomes the beneficial owner of more than ten percent of the class and is required to file pursuant to this provision.

(3)(i) Notwithstanding paragraphs (b)(1) and (2) and Rule 13d-2(b) (§240.13d-2(b)), a person shall immediately become subject to Rules 13d-1(a) and 13d-2(a) and shall promptly, but not more than 10 days later, file a statement on Schedule 13D if such person:

(A) Has reported that it is the beneficial owner of more than five percent of a class of equity securities in a statement on Schedule 13G pursuant to paragraph (b)(1) or (b)(2), or is required to report such acquisition but has not yet filed the schedule;

(B) Determines that it no longer has acquired or holds such securities in the ordinary course of business or not with the purpose nor with the effect of changing or influencing the control of the issuer, nor in connection with or as a participant in any transaction having such purpose or effect, including any transaction subject to Rule 13d-3(b) (§240.13d-3(b)); and

(C) Is at that time the beneficial owner of more than five percent of a class of equity securities described in Rule 13d-1(c).

(ii) For the ten day period immediately following the date of the filing of a Schedule 13D pursuant to this paragraph (b)(3), such person shall not: (A) Vote or direct the voting of the securities described in paragraph (b)(3)(i)(A); nor, (B) Acquire an additional beneficial ownership interest in any equity securities of the issuer of such securities, nor of any person controlling such issuer.

(4) Any person who has reported an acquisition of securities in a statement on Schedule 13G pursuant to paragraph (b)(1) or (b)(2) and thereafter ceases to be a person specified in paragraph (b)(1)(ii) shall immediately became subject to Rules 13d-1(a) and 13d-2(a) and shall file, within ten days thereafter, a statement on Schedule 13D, in the event such person is a beneficial owner at that time of more than five percent of the class of equity securities.

(c) For the purpose of this regulation, the term "equity security" means any equity security of a class which is registered pursuant to Section 12 of that Act, or any equity security of any insurance company which would have been required to be so registered except for the exemption contained in Section 12(g)(2)(G) of the Act, or any equity security issued by a closed-end investment company registered under the Investment Company Act of 1940; provided, such term shall not include securities of a class of non-voting options, warrants, rights, convertible debt or convertible preferred securities.

(d) For the purposes of Sections 13(d) and 13(g), any person, in determining the amount of outstanding securities of a class of equity securities, may rely upon information set forth in the issuers most recent quarterly or annual report, and any current report subsequent thereto, filed with the Commission pursuant to this Act, unless he knows or has reason to believe that the information contained therein is inaccurate.

(e)(1) Whenever two or more persons are required to file a statement containing the information required by Schedule 13D or Schedule 13G with respect to the same securities, only one statement need be filed, provided that:

(i) Each person on whose behalf the statement is filed is individually eligible to use the Schedule on which the information is filed;

(ii) Each person on whose behalf the statement is filed is responsible for the timely filing of such statement and any amendments thereto, and for the completeness and accuracy of the information concerning such person contained therein; such person is not responsible for the completeness or accuracy of the information concerning the other persons making the filing, unless such person knows or has reason to believe that such information is inaccurate; and

(iii) Such statement identifies all such persons, contains the required information with regard to each such person, indicates that such statement is filed on behalf of all such persons, and includes, as an exhibit, their agreement in writing that such a statement is filed on behalf of each of them.

(2) A groups filing obligation may be satisfied either by a single joint filing or by each of the groups members making an individual filing. If the groups members elect to make their own filings, each such filing should identify all members of the group but the information provided concerning the other persons making the filing need only reflect information which the filing person knows or has reason to know.

§240.13d-2 Filing of amendments to Schedules 13D or 13G.

(a) Schedule 13d-If any material change occurs in the facts set forth in the statement required by Rule 13d-1(a), (§240.13d-1(a)) including, but not limited to, any material increase or decrease in the percentage of the class beneficially owned, the person or persons who were required to file such statement shall promptly file or cause to be filed with the Commission and send or cause to be sent to the issuer at its principal executive office, by registered or certified mail, and to each exchange on which the security is traded an amendment disclosing such change. An acquisition or disposition of beneficial ownership of securities in an amount equal to one percent or more of the class of securities shall be deemed "material" for purposes of this rule; acquisitions or dispositions of less than such amounts may be material, depending upon the facts and circumstances. The requirement that an amendment be filed with respect to an acquisition which materially increases the percentage of the class beneficially owned shall not apply if such acquisition is exempted by Section 13(d)(6)(B) of the Act. Six copies of each such amendment shall be filed with the Commission.

(b) Schedule 13G-Notwithstanding paragraph (a) of this rule, and provided that the person or persons filing a statement pursuant to Rule 13d-1(b) continue to meet the requirements set forth therein, any person who has filed a short form statement on Schedule 13G shall amend such statement within forty-five days after the end of each calendar year, to reflect, as of the end of the calendar year, any changes in the information reported in the previous filing on that Schedule, or if there are no changes from the previous filing, a signed statement to that effect under cover of Schedule 13G. Six copies of such amendment, including all exhibits, shall be filed with the Commission and one each sent, by registered or certified mail, to the issuer of the security at its principal executive office and to the principal national securities exchange where the security is traded. Once an amendment has been filed reflecting beneficial ownership of five percent or less of the class of securities, no additional filings are required unless the person thereafter becomes the beneficial owner of more than five percent of the class and is required to file pursuant to Rule 13d-1 (§240.13d-1).

Note: For persons filing a short form statement pursuant to Rule 13d-1(b), see also Rule 13d-1(b)(2), (3) and (4).

§240.13d-3 Determination of beneficial owner.

(a) For the purpose of Sections 13(d) and 13(g) of the Act a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares:

(1) Voting power which includes the power to vote, or to direct the voting of, such security; and/or,

(2) Investment power which includes the power to dispose, or to direct the disposition of, such security.

(b) Any person who, directly or indirectly, creates or uses a trust, proxy, power of attorney, pooling arrangement or any other contract, arrangement, or device with the purpose or effect of divesting such person of beneficial ownership of a security or preventing the vesting of such beneficial ownership as part of a plan or scheme to evade the reporting requirements of Sections 13(d) or 13(g) of the Act shall be deemed for purposes of such sections to be the beneficial owner of such security.

(c) All securities of the same class beneficially owned by a person, regardless of the form which such beneficial ownership takes, shall be aggregated in calculating the number of shares beneficially owned by such person.

(d) Notwithstanding the provisions of paragraphs (a) and (c) of this rule:

(1)(i) A person shall be deemed to be the beneficial owner of a security, subject to the provisions of paragraph (b) of this rule, if that person has the right to acquire beneficial ownership of such security, as defined in Rule 13d-3(a) (§240.13d-3(a)) within sixty days, including but not limited to any right to acquire; (A) through the exercise of any option, warrant or right; (B) through the conversion of a security; (C) pursuant to the power to revoke a trust, discretionary account, or similar arrangement; or (D) pursuant to the automatic termination of a trust, discretionary account or similar arrangement; provided, however, any person who acquires a security or power specified in paragraphs (A), (B), or (C), above, with the purpose or effect of changing or influencing the control of the issuer, or in connection with or as a participant in any transaction having such purpose or effect, immediately upon such acquisition shall be deemed to be the beneficial owner of the securities which may be acquired through the exercise or conversion of such security or power. Any securities not outstanding which are subject to such options, warrants, rights or conversion privileges shall be deemed to be outstanding for the purpose of computing the percentage of outstanding securities of the class owned by such person but shall not be deemed to be outstanding for the purpose of computing the percentage of the class by any other person.

(ii) Paragraph (i) remains applicable for the purpose of determining the obligation to file with respect to the underlying security even though the option, warrant, right or convertible security is of a class of equity security, as defined in Rule 13d-1(c), and may therefore give rise to a separate obligation to file.

(2) A member of a national securities exchange shall not be deemed to be a beneficial owner of securities held directly or indirectly by it on behalf of another person solely because such member is the record holder of such securities and, pursuant to the rules of such exchange, may direct the vote of such securities, without instruction, on other than contested matters or matters that may affect substantially the rights or privileges of the holders of the securities to be voted, but is otherwise precluded by the rules of such exchange from voting without instruction.

(3) A person who in the ordinary course of his business is a pledgee of securities under a written pledge agreement as to which there has been a default shall not be deemed to be the beneficial owner of such pledged securities until the pledgee has taken all formal steps necessary which are required to declare such default and determines that the power to vote or to direct the vote or to dispose or to direct the disposition of such pledged securities will be exercised, provided that:

(i) The pledge agreement is bona fide, does not grant the power to vote or to direct the vote or to dispose or to direct the disposition of such pledged securities to the pledgee prior to default, and was not entered into with the purpose nor with the effect of changing or influencing the control of the issuer, nor in connection with any transaction having such purpose or effect, including any transaction subject to Rule 13d-3(b); and

(ii) The pledgee is a person specified in Rule 13d-1(b)(1)(ii).

(4) A person engaged in business as an underwriter of securities who acquires securities through his participation in good faith in a firm commitment underwriting registered under the Securities Act of 1933 shall not be deemed to be the beneficial owner of such securities until the expiration of forty days after the date of such acquisition.

§240.13d-4 Disclaimer of beneficial ownership.

Any person may expressly declare in any statement filed that the filing of such statement shall not be construed as an admission that such person is, for the purposes of Sections 13(d) or 13(g) of the Act, the beneficial owner of any securities covered by the statement.

§240.13d-5 Acquisition of securities.

(a) A person who becomes a beneficial owner of securities shall be deemed to have acquired such securities for purposes of Section 13(d)(1) of the Act, whether such acquisition was through purchase or otherwise. However, executors or administrators of a decedents estate generally will be presumed not to have acquired beneficial ownership of the securities in the decedents estate until such time as such executors or administrators are qualified under local law to perform their duties.

(b)(1) When two or more persons agree to act together for the purpose of acquiring, holding, voting or disposing of equity securities of an issuer, the group formed thereby shall be deemed to have acquired beneficial ownership, for purposes of Sections 13(d) and 13(g) of the Act, as of the date of such agreement, of all equity securities of that issuer beneficially owned by any such persons.

(2) Notwithstanding the previous paragraph, a group shall be deemed not to have acquired any equity securities beneficially owned by the other members of the group solely by virtue of their concerned actions relating to the purchase of equity securities directly from an issuer in a transaction not involving a public offering, provided that:

(i) All the members of the group are persons specified in Rule 13d-1(b)(1)(ii);

(ii) The purchase is in the ordinary course of each members business and not with the purpose nor with the effect of changing or influencing control of the issuer, nor in connection with or as a participant in any transaction having such purpose or effect, including any transaction subject to Rule 13d-3(b);

(iii) There is no agreement among, or between any members of the group to act together with respect to the issuer or its securities except for the purpose of facilitating the specific purchase involved; and

(iv) The only actions among or between any members of the group with respect to the issuer or its securities subsequent to the closing date of the non-public offering are those which are necessary to conclude ministerial matters directly related to the completion of the offer or sale of the securities.

§240.13d-6 Exemption of certain acquisitions.

The acquisition of securities of an issuer by a person who, prior to such acquisition, was a beneficial owner of more than five percent of the outstanding securities of the same class as those acquired shall be exempt from section 13(d) of the Act, provided that:

(a) The acquisition is made pursuant to preemptive subscription rights in an offering made to all holders of securities of the class to which the preemptive subscription rights pertain;

(b) Such person does not acquire additional securities except through the exercise of his pro rata share of the preemptive subscription rights; and

(c) The acquisition is duly reported, if required, pursuant to section 16(a) of the Act and the rules and regulations thereunder.

§240.13d-7 Fees for filing Schedules 13D or 13G.

The initial Schedule 13D or 13G filed by a person shall be accompanied by a fee of $100 payable to the Commission, no part of which shall be refunded. No fees shall be required with respect to the filing of any amended Schedule 13D or 13G; provided, however, that once an amendment has been filed reflecting beneficial ownership of less than five percent of such class, an additional fee of $100 shall be paid with the next filing of that person which reflects ownership of more than five percent thereof.

§240.13d-101 Schedule 13D-Information to be included in statements filed pursuant to §240.13d-1(a) and amendments thereto filed pursuant to §240.13d-2(a).

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No.______)

__________________________________________________________________________________

(Name of Issuer)

____________________________________________________________________________________

(Name of person(s) filing Statement)

______________________________________________________________________________________

(Title of class of securities)

______________________________________________________________________________________

(CUSIP Number)

______________________________________________________________________________________

(Name, address and telephone number of person authorized to receive notices and communications)

________________________________________________________________________________________

(Date of event which requires filing of this statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this statement, and is filing this statement because of Rule 13d-1(b)(3) or (4), check the following: _{____}

Check the following box if a fee is being paid with this statement: _{____}. (A fee is not required only if the filing person: (1) has a previous statement on file reporting beneficial ownership of five percent or more of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of less than five percent of such class. See Rule 13d-7.)

Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent.

Instructions. A. The item number and captions of the items shall be included but the text of the items is to be omitted. The answers to the items shall be so prepared as to indicate clearly the coverage of the items without referring to the text of the items. Answer every item. If an item is inapplicable or the answer is in the negative, so state.

B. Information contained in exhibits to the statement may be incorporated by reference in answer or partial answer to any item or sub-item of the statement unless it would render such answer incomplete, unclear or confusing. Matter incorporated by reference shall be clearly identified in the reference by page, paragraph, caption or otherwise. An express statement that the specified matter is incorporated by reference shall be made at the particular place in the statement where the information is required.

C. If the statement is filed by a general or limited partnership, syndicate, or other group, the information called for by Items 2-6, inclusive, shall be given with respect to (i) each partner of such general partnership; (ii) each partner who is denominated as a general partner or who functions as a general partner of such limited partnership; (iii) each member of such syndicate or group; and (iv) each person controlling such partner or member. If the statement is filed by a corporation or if a person referred to in (i), (ii), (iii) or (iv) of this Instruction is a corporation, the information called for by the above mentioned items shall be given with respect to (a) each executive officer and director of such corporation; (b) each person controlling such corporation; and (c) each executive officer and director of any corporation or other person ultimately in control of such corporation. Executive officer shall mean the president, secretary, treasurer, and any vice president in charge of a principal business function (such as sales, administration or finance) and any other person who performs or has the power to perform similar policy making functions for the corporation.

Item 1. Security and Issuer.

State the title of the class of equity securities to which this statement relates and the name and address of the principal executive offices of the issuer of such securities.

Item 2. Identity and Background.

If the person filing this statement or any person enumerated in Instruction C of this statement is a corporation, general partnership, limited partnership, syndicate or other group of persons, state its name, the state or other place of its organization, its principal business, the address of its principal office and the information required by (d) and (e) of this Item. If the person filing this statement or any person enumerated in Instruction C is a natural person, provide the information specified in (a) through (f) of this Item with respect to such person(s).

(a) Name;

(b) Residence or business address;

(c) Present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted;

(d) Whether or not, during the last five years, such person has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and, if so, give the dates, nature of conviction, name and location of court, any penalty imposed, or other disposition of the case;

(e) Whether or not, during the last five years, such person was a party to a civil proceedings of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws; and, if so, identify and describe such proceedings and summarize the terms of such judgment, decree or final order; and

(f) Citizenship.

Item 3. Source and Amount of Funds or Other Consideration.

State the source and the amount of funds or other consideration used or to be used in making the purchases, and if any part of the purchase price is or will be represented by funds or other consideration borrowed or otherwise obtained for the purpose of acquiring, holding, trading or voting the securities, a description of the transaction and the names of the parties thereto. Where material, such information should also be provided with respect to prior acquisitions not previously reported pursuant to this regulation. If the source of all or any part of the funds is a loan made in the ordinary course of business by a bank, as defined in Section 3(a)(6) of the Act, the name of the bank shall not be made available to the public if the person at the time of filing the statement so requests in writing and files such request, naming such bank, with the Secretary of the Commission. If the securities were acquired other than by purchase, describe the method of acquisition.

Item 4. Purpose of Transaction.

State the purpose or purposes of the acquisition of securities of the issuer. Describe any plans or proposals which the reporting persons may have which relate to or would result in:

(a) The acquisition by any person of additional securities of the issuer, or the disposition of securities of the issuer;

(b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the issuer or any of its subsidiaries;

(c) A sale or transfer of a material amount of assets of the issuer or of any of its subsidiaries;

(d) Any change in the present board of directors or management of the issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board;

(e) Any material change in the present capitalization or dividend policy of the issuer;

(f) Any other material change in the issuers business or corporate structure, including but not limited to, if the issuer is a registered closed-end investment company, any plans or proposals to make any changes in its investment policy for which a vote is required by section 13 of the Investment Company Act of 1940;

(g) Changes in the issuers charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the issuer by any person;

(h) Causing a class of securities of the issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association;

(i) A class of equity securities of the issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or

(j) Any action similar to any of those enumerated above.

Item 5. Interest in Securities of the Issuer.

(a) State the aggregate number and percentage of the class of securities identified pursuant to Item 1 (which may be based on the number of securities outstanding as contained in the most recently available filing with the Commission by the issuer unless the filing person has reason to believe such information is not current) beneficially owned (identifying those shares which there is a right to acquire) by each person named in Item 2. The above mentioned information should also be furnished with respect to persons who, together with any of the persons named in Item 2, comprise a group within the mea