Release No. 33-6163

Release No. 34-16405

December 5, 1979

REVIEW OF GUIDES FOR THE PREPARATION AND FILING OF REGISTRATION STATEMENTS AND REPORTS

ACTION: Advance notice of proposed rulemaking.

SUMMARY: The Commission has authorized the Division of Corporation Finance to request public comment to assist it in its re-evaluation of the Guides for the Preparation and Filing of Registration Statements and Reports. The Division intends to re-examine the Guides to determine if they are current and effective and to consider what action, if any, would be appropriate to increase their usefulness and to eliminate any inconsistencies or out-of-date material.

DATE: Comments must be received on or before February 29, 1980.

ADDRESS: All communications on the matters discussed in this release should be submitted in triplicate to George A. Fitzsimmons, Secretary, Securities and Exchange Commission, 500 North Capitol Street, Washington, D.C. 20549. Comment letters should refer to File No. S7-813. All comments received will be available for public inspection and copying in the Commissions Public Reference Room, 1100 L Street, N.W., Washington, D.C. 20549.

FOR FURTHER INFORMATION CONTACT: Bruce S. Mendelsohn or Catherine Collins, Office of Disclosure Policy, Division of Corporation Finance, Securities and Exchange Commission, 500 North Capitol Street, Washington, D.C. 20549 (202-272-2589).

SUPPLEMENTARY INFORMATION: The Securities and Exchange Commission today authorized the Division of Corporation Finance (the "Division") to request public comment on the concept of an overall re-evaluation of the Guides for the Preparation and Filing of Registration Statements under the Securities Act of 1933 (the "Securities Act") 15 U.S.C. 77a et seq. ¹ and of the Guides for the Preparation and Filing of Reports and Proxy and Registration Statements under the Securities Exchange Act of 1934 (the "Exchange Act") 15 U.S.C. 78a et seq.. The present Guides are not Commission rules nor do they bear the Commissions official approval; they represent policies and practices followed by the Division in administering the disclosure requirements of the Securities Act and the Exchange Act.

The Commission believes that monitoring the effectiveness and operation of its existing rules, forms, and Guides is an essential part of its responsibilities in administering the federal securities laws. The Advisory Committee on Corporate Disclosure included in its recommendations to the Commission that the consequences and costs of new disclosure requirements be monitored after adoption and encouraged the Commission to re-evaluate periodically all of its outstanding rules. ² The Advisory Committee felt that such monitoring would "keep the disclosure requirements current and effective and prevent the development of an encrusting layer of unnecessary and irrelevant information in disclosure documents."

In the Divisions view, a thorough study of the Guides is consistent with and necessary to its objective of increasing uniformity and integration of the disclosure requirements under the Securities Act and the Exchange Act. The Division therefore intends to examine the Guides particularly in light of the creation and development of Regulation S-K. ³ Additionally, the Division plans to review all aspects of the Securities Act rules. It should be noted, however, that the review of the Guides will precede the study of the rules, specifically Regulation C. ⁴

The Commission is continuing its efforts to develop and improve upon specific industry disclosure guides, as was recommended by the Advisory Committee. In this regard, the Commission has sought comment on the quality and desirability of disclosure made under existing Guide 61, relating to statistical disclosure for bank holding companies, ⁵ and published for comment proposed staff guidelines on disclosure by electric and gas utility companies. ⁶ The Division intends to address specific industry guides individually, rather than as part of the overall re-evaluation of the Guides. Accordingly, commentators are requested not to include suggestions or views with respect to industry guides in whatever comments they may submit in response to this release.

Inquiries

Comment is invited on all aspects of the Guides, a comprehensive list of which is appended hereto; with particular attention directed to the following points:

1. The effectiveness of the Guides, individually and as a whole;

2. Any portions of the Guides which may no longer be current or necessary in light of changes in statutes, Commission regulations, case law, securities markets or financial practices;

3. Any portions of the Guides which may be inconsistent with Commission rules, regulations or forms;

4. Any changes in disclosure requirements which may be necessary to make the Guides more helpful to registrants and to provide meaningful disclosure for investors;

5. The optimum relationship of the Guides with Regulation S-K; and

6. The costs and other burdens occasioned by the Guides.

In addition, recognizing its limited staff resources, the Division requests that commentators indicate which areas, if any, they feel should receive immediate attention and which areas they feel are of less pressing concern.

By the Commission.

George A. Fitzsimmons

Secretary

______________________________

APPENDIX

The following is a list of the Guides under the Securities Act of 1933 and the Securities Exchange Act of 1934. Brief descriptions of subject matter have been added where titles are not self-explanatory.

Guides for the Preparation and Filing of Registration Statements Under the Securities Act of 1933:

1. Pre-filing Conferences with Registrants.

2. Letter of Comment.

3. Applicability of Amended Rules and Forms to Previously Filed Statements.

4. Registration of Securities for Delayed Offerings.

Guide 4 describes those types of deferred or extended offerings for which registration under the Securities Act is permitted despite the provisions of Section 6(a) thereof, which prevents registration without the intention to offer the securities in the proximate future.

5. Preparation of Prospectuses.

Guide 5 encourages registrants to keep prospectuses readable and gives specific guidelines as to cover page content and presentation.

6. Introductory Statements.

Guide 6 provides guidelines indicating when and where disclosure is appropriate as to risk factors, disparity between public offering price and effective cost to affiliated persons, and dilution of investors equity.

7. Dating of Prospectuses.

8. Pictorial or Graphic Representations in Prospectuses.

9. Promoters.

Guide 9 refers registrants to Rule 405 (17 CFR 230.405), the Securities Act definitional rule, and discusses the conditions for using synonymous terms.

10. Registration of Options, Warrants or Rights and Other Securities Issued or Sold to Underwriters.

Guide 10 points out that such securities issued to underwriters in connection with a public offering are considered part of the offering and, therefore, must be registered. The Guide also discusses such registration.

11. Finders.

Guide 11 deals with appropriate cover page disclosure of finders fees or similar payments.

12. Over-the-Counter Trading in Rights or Warrants.

Guide 12 discusses the Uniform Practice Code of the National Association of Securities Dealers, Inc., approach to this subject and the appropriate disclosure of the basis for trading.

13. Market Quotations-Absence of Established Market.

Guide 13 addresses the appropriateness of disclosing historical market prices of securities where there is an established market therefor and, where there is none, disclosing that fact.

14. Underwriters Compensation from Conversion of Funds into Foreign Currency.

15. Expenses of Issuance and Distribution.

Guide 15 discusses disclosure with respect to expenses incurred in the issuance and distribution of offerings of securities.

16. Underwriters Experience and Due Diligence Inquiry.

Guide 16 indicates that, where a new or speculative issue of securities is being registered, the underwriter may be asked to explain to the staff its efforts to verify the prospectus disclosure.

17. Disclosure of Underwriting Discounts and Commissions.

18. Original Issue Discount of Debt Securities.

19. Distribution of Preliminary Prospectus.

Guide 19 discusses adequate preliminary prospectus delivery as a condition to acceleration of effectiveness of a registration statement.

20. Mailing of Amended Preliminary Prospectus to Regional Offices.

21. Use of Proceeds.

Guide 21 addresses acceptable content and presentation of use of proceeds disclosure.

22. Summary of Earnings.

Because the Commission staff is currently re-evaluating Guide 22 in connection with a separate rule-making project, specific comments need not be addressed to this guide.

23. Current Financial Statements and Related Data.

Guide 23 assists in determining the need for updating financial statements and related data in registration statements.

24. Currencies in Which Amounts Are to be Stated by Foreign Issuers.

25. Manner of Showing Distributions by Real Estate Syndicates and Real Estate Investment Trusts.

26. Statement of Dividend Policy.

Guide 26 also is currently being considered by the staff and therefore should not be included in specific comments.

27. Names of Customers and Competitors.

28. Disclosure of Extractive Reserves and Natural Gas Supplies.

Guide 28 addresses technical matters arising from the application of the disclosure requirements in various forms to oil and gas reserves and supplies.

29. Disclosure of Material Long-Term Leases.

30. Disclosure of Principal Sources of Electric Revenues.

31. Disclosure of Recent Developments-Backlog.

Guide 31 points out that a material change in the trend of sales or earnings of the registrant, and the reason for the change, as well as information with respect to backlog level, should be adequately disclosed in the prospectus.

32. Liability of Shareholders to Laborers, Servants or Employees Under State Law.

33. Notice of Redemption of Convertible Securities or Callable Warrants.

34. Executive Committee.

35. Identification of Members of Board of Directors Selected by the Underwriters.

36. Effect of Issuance of Options or Warrants to Certain Persons.

Guide 36 indicates certain disclosures which should be made if a material amount of options or warrants has been or is to be issued to promoters, underwriters, finders, principal stockholders, officers or directors.

37. Consents of Accountants.

38. Consents of Attorneys.

39. Charter Amendments Authorizing New Securities.

40. Underwriting Agreements.

41. Specimen Bond.

42. Reports or Memoranda Concerning the Registrant.

Guide 42 specifies documents which should be furnished to the staff as supplemental information when a registration statement is filed.

43. Representations from Selling Security Holders.

Guide 43 indicates that, where securities are registered to be sold for the accounts of individual selling security holders, those holders will be expected to provide the staff with letters stating the reasons for selling and that they are aware of the disclosure contained in the registration statement.

44. Securities Act Exemption for Shares Subject to Options.

Guide 44 states that, where registrants with employee stock option plans have not registered the underlying stock, they should inform the staff by letter whether they intend to register stock issued upon exercise of the options and, if not, upon what exemption from registration they intend to rely.

45. Information as to Over-the Counter Market for Securities to be Registered.

46. Statement as to Indemnification.

Guide 46 deals with disclosure appropriate where provisions are made for indemnification by the registrant of any of its directors, officers or controlling persons.

47. Enforceability of Civil Liabilities Under the Act Against Foreign Persons.

Guide 47 discusses the need for foreign private registrant to disclose how civil liability under the Securities Act may be enforced by investors.

48. Annual Reports to Security Holders.

Guide 48 states that registrants should disclose whether or not annual reports will be furnished to security holders and whether or not such will contain certified financial statements.

49. Revision of Prospectuses Where a Company and its Employee Plan have Different Fiscal Years.

50. Disclosure of Confidential Material to Other Government Agencies.

51. Release of Price Data on Subscription Offerings by Listed Companies.

Guide 51 indicates that price information on subscription rights offerings may be disseminated through exchange facilities or the Dow Jones broad tape prior to the time a registration statement becomes effective so that such data is announced before trading is commenced.

52. Disclosure as to Listings on an Exchange.

Guide 52 points out that disclosure of intent to apply for listing on a securities exchange may be misleading unless there is reasonable assurance that such application would be accepted.

53. Secondary Distribution "at the Market."

Guide 53 describes various arrangements that should be entered into and disclosed, as protections against possible market manipulation, when a registration statement covers a non-underwritten offering "at the market" of a large block of securities held by a number of selling security holders.

54. Misleading Character of Certain Registrants Names.

55. Prospectuses Relating to Interests in Oil and Gas Programs.

Guide 55 sets forth the specific items of disclosure, and the order of presentation thereof, appropriate in prospectuses relating to the offering of interests in oil and gas drilling programs.

56. Interests of Counsel and Experts in the Registrant.

57. Registration Statements Relating to "Insurance Premium Funding" Programs.

Guide 57 discusses registration fee calculation as well as prospectus presentation of summary, tabular, and hypothetical data in registration statements relating to insurance premium funding programs.

58. Disclosure in Prospectus of Registrants Business Address and Telephone Number.

59. Summary of Disclosure in the Prospectus.

Guide 59 states that in registration statements on certain forms there should be presented in the forepart of the prospectus a summary of its contents and sets forth that information which should be included in such summary.

60. Preparation of Registration Statements Relating to Interests in Real Estate Limited Partnerships.

Guide 60 sets forth in detail the disclosure, and the order of presentation thereof, deemed appropriate in prospectuses relating to interests in real estate limited partnerships.

61. Statistical Disclosure by Bank Holding Companies.

The Commission sought public comment on Guide 61 in Securities Act Release No. 6115 (August 30, 1979) and is now considering the comments received. Accordingly, commentator need not specifically re-address Guide 61 at this time.

62. Disclosure of Projections of Future Economic Performance.

Guides for the Preparation and Filing of Reports and Proxy and Registration Statements under the Securities Exchange Act of 1934:

1. Summary of Operations.

Guide 1 also is currently being re-evaluated by the staff in connection with a separate rule-making project and therefore should not be included in specific comments.

2. Disclosure of Extractive Reserves and Natural Gas Supplies. (Same as Securities Act Guide 28.)

3. Statistical Disclosure by Bank Holding Companies. (Same as Securities Act Guide 61.)

4. Integrated Reports to Shareholders.

Guide 4 also is being considered and in connection with a separate rule-making project and therefore should not be addressed in specific comments.

5. Disclosure of Projections of Future Economic Performance. (Same as Securities Act Guide 62.)

¹Securities Act Release No. 4936, December 9, 1968 33 FR 18671, as amended.

² Report of the Advisory Committee on Corporate Disclosure to the Securities and Exchange Commission ("Report"), House Committee on Interstate and Foreign Commerce, 95th Cong., 1st Sess. (1977), Committee Print 95-29 at 328-342.

³ 17 CFR Part 229, first adopted in Securities Exchange Act Release No. 14306, December 23, 1977 42 FR 65554.

⁴ 17 CFR 230.400 to 230.494.

⁵Securities Act Release No. 6115, August 30, 1979.

⁶Securities Act Release No. 6085, June 25, 1979.