Release No. 33-6493

Release No. 34-20264

October 6, 1983

Foreign Securities

ACTION: Final rules.

SUMMARY: The Commission today announces the adoption of revisions to a current rule, known as the information-supplying exemption which exempts certain foreign securities from registration under the Securities Exchange Act of 1934. These revisions generally treat foreign securities quoted on the automated quotation system of the National Association of Securities Dealers ("NASDAQ") the same as foreign securities listed on a United States ("U.S.") exchange. Generally, non-Canadian foreign securities currently quoted on NASDAQ could continue to rely on the exemption indefinitely subject to certain conditions. Canadian securities, however, currently quoted on NASDAQ could continue to rely on the exemption until January 2, 1986. Revisions also are made to other rules to clarify the concept of voluntary entry into the U.S. capital markets.

EFFECTIVE DATE: (Upon publication in the Federal Register.)

FOR FURTHER INFORMATION CONTACT: Carl T. Bodolus (202) 272-3246, Office of International Corporate Finance, Division of Corporation Finance, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.

SUPPLEMENTARY INFORMATION: Foreign private issuers whose securities are not trading on one of the national securities exchanges are now exempt from registering with the Commission. The Commission today is revising that exemption so that it will no longer be available to foreign issuers whose securities trade on NASDAQ. This change is being made because the Commission believes that trading on NASDAQ is substantially the same as trading on an exchange and therefore the information available for NASDAQ traded companies should be essentially the same as the information available for exchange traded companies. The Commission will "grandfather" foreign private issuers who are now trading on NASDAQ and relying on the exemption. Canadian issuers will be grandfathered for two years and all other foreign issuers will be grandfathered indefinitely. However, no additional foreign equity securities can begin trading on NASDAQ unless they are registered with the Commission.

I. Background

The Commission is adopting revisions to Rule 12g3-2 (17 CFR 240.12g3-2) ¹ under the Securities Exchange Act of 1934 (the "Exchange Act") 15 U.S.C. 78a et seq. (1976 and Supp. III 1979) that would terminate the availability of that exemptive rule to certain foreign issuers with securities quoted in NASDAQ and clarify several provisions of that rule. ² Amendments to Rule 12g-3 (17 CFR 240.12g-3) and Rule 15d-5 (17 CFR 240.15d-5) relating to successor issuers further clarify the application of the periodic reporting requirements of the Exchange Act to issuers that acquire reporting issuers by the issuance of securities. The concept of the "essentially U.S. issuer" exemption in the definition of foreign private issuer in Rule 405 (17 CFR 230.405) and Rule 3b-4 (17 CFR 240.3b-4) is also revised. Rule 12g-1 (17 CFR 240.12g-1) is also clarified.

The Commission solicited public comments on these changes in Release No. 33-6433 (October 28, 1982) 47 FR 50292. One hundred sixty-three comment letters were received on the proposals. ³ One hundred twenty-six were from individuals, thirteen from issuers, eight from the securities industry, five from law firms, three each from associations and banks maintaining facilities for American Depositary Receipts, two each for analysts and self-regulatory organizations, and one from a foreign securities exchange. Most commentators addressed only the proposal that the information-supplying exemption in Rule 12g3-2(b) be no longer available for securities quoted in an automated inter-dealer quotation system, i.e., NASDAQ.

II. Registration for NASDAQ Listing

Proposed paragraph (d)(3) of Rule 12g3-2 would have denied the information-supplying exemption to securities quoted on NASDAQ. Foreign securities quoted only in the pink sheets would continue to be exempt under the information-supplying exemption in Rule 12g3-2(b). Virtually all comments received addressed this proposal.

A. Comments

Twenty-six commentators supported this proposal. These commentators stated that the proposal would result in more disclosure to investors, increase investor confidence, expand the Commissions ability to enforce the antifraud provisions, and would eliminate the unequal treatment of foreign issuers, who now can use the information-supplying exemption to get on NASDAQ, and U.S. issuers, who must register their securities for inclusion in NASDAQ. A Canadian broker stated that many investors prefer NASDAQ-quoted Canadian securities on the incorrect assumption that they were registered with the Commission. Another individual stated that the proposal failed to go far enough and that the Commission should require Canadian issuers to report of Forms 10-K, 10-Q and 8-K instead of Forms 20-F and 6-K. Some commentators stated that some Canadian corporations misuse the exemption and also make illegal distributions of their securities in the U.S.

One hundred thirty-three commentators opposed this proposal. Twenty-two commentators disagreed with the analysis in the proposing release that obtaining inclusion in NASDAQ is voluntary entry into the U.S. capital market for various reasons. Eight stated that the acts necessary to obtain inclusion in NASDAQ are minimal and should not be used to justify the imposition of Exchange Act reporting. Others noted that in the past the ADR depositary banks were allowed to list certain foreign securities and continue to pay the fees. Twelve stated that most foreign issuers have their securities included in NASDAQ as a convenience to U.S. shareholders and the issuer does not receive as many benefits as U.S. issuers.

Eighteen commentators opposing the proposals stated that they were unaware of any problems with the current rules and thirty-one stated that the information-supplying exemption provided investors with adequate information.

All commentators opposing the proposal assumed that many foreign issuers would withdraw from NASDAQ and have their securities traded in the pink sheets instead of registering. The following unfavorable consequences were identified: increased price spreads, decrease in information, price quotes not carried in newspapers, less liquid market and fewer institutions in the market, absence of NASD surveillance, and delays in execution of transfers. These factors could cause a price drop of twenty percent according to one estimate.

Other objections to this proposal are: increased red tape, increased burden on foreign issuers, loss of investment opportunities and limits on freedom of choice, forced trading in foreign markets, forced use of disreputable dealers or foreign brokers, increased Commission budget, unfair change in policy, inconsistency with Congressional interest, possible relation by foreign governments, and reinforced fears of foreign issuers that the Commission repeatedly changes its rules.

Two commentators estimated the cost of registering securities under Section 12(g). One estimated it to be $150,000. A law firm, representing some Canadian issuers with registered securities, estimated the cost to be $12,000-$15,000. A Canadian issuer subject to the reporting requirements of the Exchange Act stated it did not find reporting to be burdensome in terms of time or cost.

B. Revision of Rule 12g3-2

Since its commencement in 1971, NASDAQ has matured into a major securities market, ⁴ providing securities quoted on NASDAQ with heightened visibility and access to active trading markets. As a result, NASDAQ has become an attractive alternative to exchange listing for foreign issuers which desire access to U.S. trading markets for the convenience of their U.S. shareholders or to raise capital, but which wish to avoid registration under Section 12. Although registration is required for exchange listing, foreign securities have been included in NASDAQ without Section 12 registration through use of the information-supplying exemption of Rule 12g3-2(b), which was adopted in 1967, prior to the start of NASDAQ, and was intended to exempt from registration foreign issuers whose securities were traded in the U.S. without the voluntary action of the issuer.

In the past, foreign securities could be included in NASDAQ without the participation of the issuer; at present, however, the consent of the issuer is required before a foreign security can be quoted in NASDAQ. ⁵ Accordingly the Commission believes that foreign securities included in NASDAQ should be regarded prospectively as voluntarily seeking U.S. trading markets, and hence should be denied the information-supplying exemption. Also, the Commission believes that the increased administrative sanctions available to the Commission resulting from the revisions are necessary. Finally, the Commission believes it is appropriate to eliminate any undue differences in the disclosure requirements of and the treatment of U.S. and foreign issuers with securities quoted on NASDAQ.

Nevertheless, the Commission acknowledges the concerns of many of the commentators. The Commission believes that applying the revisions prospectively and grandfathering the securities, as described below, is a pragmatic balance of these competing policies. ⁶

Many of the foreign issuers that appear to be complying with the information-supplying exemption initially established it prior to the formation of NASDAQ or in its early years. As discussed above, until recently, persons other than the issuer could obtain the NASDAQ listing for foreign securities. Imposing the revised rule against such issuers could force them to withdraw from NASDAQ, consequently depriving U.S. investors of the accustomed market for such securities and, in some cases, reducing the depth and liquidity for these securities.

Securities of the non-Canadian issuers in compliance with the information-supplying exemption as of October 5, 1983 and currently quoted in NASDAQ are grandfathered indefinitely. ⁷ However, the exemption will be extended to the Canadian securities only until January 1986. The recent hot-issue market in securities from Canada has created problems and abuses of the rule. Some issuers appear to have used the exemption as a means to make unregistered, illegal distributions of their securities over NASDAQ. ⁸ Several commentators urged the Commission to address directly the problems associated with some of the issuers from Canada rather than using an overly broad approach as proposed. The adopted revision is consistent with the Commissions position of treating Canadian issuers the same as U.S. issuers for many purposes. ⁹ Canadian issuers generally must file the same reports as domestic issuers under the Exchange Act and, unlike other foreign issuers, are subject to the proxy regulations and the short-swing profit recovery provisions. Moreover, the requirements for Canadian issues to ultimately register their securities under Section 12 do not appear to be particularly burdensome in light of the similarity of the accounting principles and disclosure standards of the U.S. and Canada. Canadian issuers, unlike other foreign issuers, can use Form S-18 and the limited offering exemption of Regulation A. The coming-to-rest concept in release No. 33-4708 (July 9, 1964) 29 FR 9828 treats offerings of U.S. issuers in Canada the same as offerings in the U.S. due to the close nexus of the markets. The Commission believes the revised rule, as adopted, adequately addresses the problems without undue market interference. The two year time period was selected to provide Canadian issuers with sufficient time to adjust their procedures or to register their securities and for the market to take into account any changes in the way such securities trade.

The Commission considered the alternative of imposing seasoning or suitability tests as conditions for listing on NASDAQ in reliance on the information-supplying exemption. Commentators suggested tests such as a history of active trading in the foreign market: minimum income, minimum assets, and minimum capitalization. The Commission declined to adopt any of those tests because of the difficulty in forming objectively the proper test, and the lack of any specific theoretical basis for a particular test.

III. Other Revisions

The Commission received no adverse comments on the proposed revisions to the successor issuer rules and has adopted them without change.

Several commentors objected to the proposed repeal of paragraph (d) of Rule 12g3-2 that exempts from Section 12(g) registration the securities of a non-Canadian issuer with any class of securities registered under Section 12(b) or any issuer filing reports under Section 15(d). The major consequences of repealing paragraph (d) is to require some of the 83 foreign issuers now subject to a Section 15(d) reporting obligation to register under Section 12(g) and thereby making their securities subject to the Williams Act. ¹⁰ The commentators to the proposal pointed out potential problems due to inconsistent tender offer regulation among various countries.

The Williams Act has applied to Canadian and, since 1979, to other foreign equity securities registered under Section 12(b). Approximately 52 Canadian and 65 non-Canadian issuers have securities registered under this section. The proposal would merely end the anomaly of exempting foreign issuers now subject to reporting obligations because of the exchange listing of debt securities or because they have had a registration statement become effective under the Securities Act. Few problems have arisen due to the inconsistent regulations of various countries, but the Commission is aware of the possibility of such problems. As in the past, with respect to foreign securities subject to the Williams Act, such situations will continue to be resolved on a case-by-case basis.

Another consequence of the repeal of paragraph (d) and the consequent registration of securities under Section 12(g) is that certain Canadian issuers would become subject to the proxy requirements of Sections 14(a) and 14(c) of the Exchange Act and the rules thereunder and the short-swing profits provisions of Section 16 of the Exchange Act and the rules thereunder. One commentator stated that the proposal would make Securities Act registration of equity securities more burdensome, extend U.S. regulation to the internal corporate affairs of Canadian issuers, and conflict with the voluntarism principle explained in the proposing release.

More than 50 Canadian issuers are currently subject to such regulations and the repeal of paragraph (d) requires some of the 23 Canadian issuers subject to Section 15(d) to register their securities under Section 12(g). Few problems have arisen in the past under these rules. The Commission believes it is anomalous to exempt those Canadians that have made a registered public offering in the U.S., who would otherwise be subject to Section 12, but not those whose securities are listed on a U.S. exchange or are registered under Section 12 of the Exchange Act.

Foreign issuers that generally are owned and managed by U.S. persons are considered to be essentially U.S. issuers and are ineligible for any of the exemptions or forms available to other issuers organized under foreign law. As amended, Rule 405 and Rule 3b-4 set forth two elements to determine whether an issuer is an essentially U.S. issuer. ¹¹ The first element is that fifty percent of the issuers shares are held by U.S. residents. The second element is that one of three conditions is present: (1) the issuers business be principally administered in the U.S.; (2) a majority of the issuers directors or executive officers be U.S. persons; or (3) fifty percent of the assets of the issuer be located in the U.S. These elements combine concepts in the former and proposed definitions. The Commission believes these amendments will prevent evasion but are unlikely to apply to many issuers not intended to be covered by the concept.

REGULATORY FLEXIBILITY ACT

A copy of the Final Regulatory Flexibility Analysis is available upon request from the Office of International Corporate Finance, Room 3094 (3-6), Division of Corporation Finance, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C., 20549, telephone (2) 272-3246.

List of Subjects in 17 CFR 230 and 240: Reporting Requirements, Securities

TEXT OF AMENDMENTS

17 CFR Chapter II is amended as follows:

PART 230--GENERAL RULES AND

REGULATIONS, SECURITIES ACT OF 1933

1. By revising the definition of "Foreign Private Issuer" in §230.405 to read as follows:

§230.405 Definitions of terms.

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Foreign private issuer: The term "foreign private issuer" means any foreign issuer other than a foreign government except an issuer meeting the following conditions: (1) more than 50 percent of the outstanding voting securities of such issuer are held of record either directly or through voting trust certificates or depositary recepits by residents of the United States; and (2) any of the following: (i) the majority of the executive officers or directors are United States citizens or residents, (ii) more than 50 percent of the assets of the issuer are located in the United States, or (iii) the business of the issuer is administered principally in the United States. For the purpose of this paragraph, the term "resident," as applied to security holders, shall mean any person whose address appears on the records of the issuer, the voting trustee, or the depositary as being located in the United States.

* * * * *

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 1934

2. By revising paragraph (c) of §240.3b-4 to read as follows:

§240.3b-4 Definition of "foreign government," "foreign issuer," and "foreign private issuer."

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(c) Foreign private issuer: The term "foreign private issuer" means any foreign issuer other than a foreign government except an issuer meeting the following conditions: (1) more than 50 percent of the outstanding voting securities of such issuer are held of record either directly or through voting trust certificates or depositary receipts by residents of the United States; and (2) any of the following: (i) the majority of the executive officers or directors are United States citizens or residents, (ii) more than 50 percent of the assets of the issuer are located in the United States, or (iii) the business of the issuer is administered principally in the United States. For the purpose of this paragraph, the term "resident," as applied to security holders, shall mean any person whose address appears on the records of the issuer, the voting trustee, or the depositary as being located in the United States.

3. By revising §240.12g-1 to read as follows:

§240.12g-1 Exemption from section 12(g).

An issuer shall be exempt from the requirement to register any class of equity securities pursuant to section 12(g)(1) if on the last day of its most recent fiscal year the issuer had total assets not exceeding $3,000,000 and, with respect to a foreign private issuer, such securities were not quoted in an automated inter-dealer quotation system.

4. By revising paragraphs (a) and (b) and adding new paragraph (c) to §240.12g-3 to read as follows:

§240.12g-3 Registration of securities of successor issuers.

(a) Where in connection with a succession by merger, consolidation, exchange of securities or acquisition of assets, equity securities of an issuer, not previously registered pursuant to section 12 of the Act, are issued to the holders of any class of equity securities of another issuer which is registered pursuant to section 12 of the Act, the class of securities so issued shall be deemed to be registered pursuant to section 12 of the Act unless upon consummation of the succession such class is exempt from such registration other than by Rule 12g3-2 (§240.12g3-2 of this chapter) or all securities of such class are held of record by less than 300 persons.

(b) Where in connection with a succession by merger, consolidation, exchange of securities or acquisition of assets, equity securities of an issuer, which are not registered pursuant to section 12 of the Act, are issued to the holders of any class of equity securities of another issuer which is required to file a registration statement pursuant to section 12 but has not yet done so, the duty to file such statement shall be deemed to have been assumed by the issuer of the class of securities so issued and such issuer shall file a registration statement pursuant to section 12 of the Act with respect to such class within the period of time the predecessor issuer would have been required to file such a statement, or within such extended period of time as the Commission may authorize upon application pursuant to §240.12b-25 of this chapter, unless upon consummation of the succession such class is exempt from such registration other than by Rule 12g3-2 (§240.12g3-2 of this chapter) or all securities of the class are held of record by less than 300 persons.

(c) An issuer that is deemed to have a class of securities registered pursuant to section 12 according to either paragraph (a) or (b) of this section shall file reports on the same forms and such class of securities shall be subject to the provisions of sections 14 and 16 to the same extent as the predecessor issuer, except as follows:

(1) An issuer that is not a foreign issuer shall not be eligible to file on Form 20-F (§249.220f of this chapter) or to use the exemption in Rule 3a12-3 (§240.3a12-3 of this chapter).

(2) A non-Canadian foreign private issuer shall be eligible to file on Form 20-F and to use the exemption in Rule 3a12-3.

(3) A Canadian foreign private issuer shall be eligible to file on Form 20-F and to use the exemption in Rule 3a12-3 only if the predecessor issuer filed on Form 20-F and was eligible to use such exemption and it does not have or has not had during the twelve months prior to the consummation of the succession a reporting obligation (suspended or active) under section 15(d) of the Act or a class of securities registered under section 12.

5. By revising section 240.12g3-2 to read as follows:

§240.12g3-2 Exemptions for American depositary receipts and certain foreign securities.

(a)(1) Securities of any class issued by any foreign private issuer shall be exempt from section 12(g) of the Act if the class has fewer than 300 holders resident in the United States. This exemption shall continue until the next fiscal year end at which the issuer has a class of equity securities held by 300 or more persons resident in the United States. For the purpose of determining whether a security is exempt pursuant to this paragraph, securities held of record by persons resident in the United States shall be determined as provided in Rule 12g5-1 (§240.12g5-1 of this chapter) except that securities held of record by a broker, dealer, bank or nominee for any of them for the accounts of customers resident in the United States shall be counted as held in the United States by the number of separate accounts for which the securities are held. The issuer may rely in good faith on information as to the number of such separate accounts supplied by all owners of the class of its securities which are brokers, dealers, or banks or a nominee for any of them.

(2) Registration of any class of security by a foreign private issuer pursuant to section 12(g) of the Act shall be terminated ninety days, or such shorter period as the Commission may determine, after the issuer files a certification with the Commission that the number of holders resident in the United States of such class of security is reduced to less than 300 persons. The Commission shall, after notice and opportunity for hearing, deny termination of registration if it finds that there are 300 or more holders resident in the United States. Termination of registration shall be deferred pending final determination on the question of denial.

(b)(1) Securities of any foreign private issuer shall be exempt from section 12(g) of the Act if the issuer, or a government official or agency of the country of the issuers domicile or in which it is incorporated or organized:

(i) Shall furnish to the Commission whatever information in each of the following categories the issuer since the beginning of its last fiscal year (A) has made or is required to make public pursuant to the law of the country of its domicile or in which it is incorporated or organized, (B) has filed or is required to file with a stock exchange on which its securities are traded and which was made public by such exchange, or (C) has distributed or is required to distribute to its security holders;

(ii) Shall furnish to the Commission a list identifying the information referred to in paragraph (b)(1)(i) of this section and stating when and by whom it is required to be made public, filed with any such exchange, or distributed to security holders;

(iii) Shall furnish to the Commission, during each subsequent fiscal year, whatever information is made public as described in (A), (B) or (C) of paragraph (b)(1)(i) of this section promptly after such information is made or required to be made public as described therein;

(iv) Shall, promptly after the end of any fiscal year in which any changes occur in the kind of information required to be published as referred to in the list furnished under paragraph (b)(1)(ii) of this section or any subsequent list, furnish to the Commission a revised list reflecting such changes; and

(v) Shall furnish to the Commission in connection with the initial submission the following information to the extent known or which can be obtained without unreasonable effort or expense: the number of holders of each class of equity securities resident in the United States, the amount and percentage of each class of outstanding equity securities held by residents in the United States, the circumstances in which such securities were acquired, and the date and circumstances of the most recent public distribution of securities by the issuer or an affiliate thereof.

(2) The information required to be furnished under paragraphs (b)(1)(i) and (b)(1)(ii) of this section shall be furnished on or before the date on which a registration statement under section 12(g) of the Act would otherwise be required to be filed. Any issuer furnishing information under paragraph (b)(1)(i) of this section shall notify the Commission that it is furnished under that paragraph.

(3) The information required to be furnished under this paragraph (b) is information material to an investment decision such as: the financial condition or results of operations; changes in business; acquisitions or dispositions of assets; issuance, redemption or acquisitions of their securities; changes in management or control; the granting of options or the payment of other remuneration to directors or officers; and transactions with directors, officers or principal security holders.

(4) Only one complete copy of any information or document need be furnished under paragraph (b)(1). Such information and documents need not be under cover of any prescribed form and shall not be deemed to be "filed" with the Commission or otherwise subject to the liabilities of section 18 of the Act. Press releases and all other communications or materials distributed directly to securityholders of each class of securities to which the exemption relates shall be in English. English versions or adequate summaries in English may be furnished in lieu of original English translations. No other documents need be furnished unless the issuer has prepared or caused to be prepared English translations, versions, or summaries of them. If no English translations, versions, or summaries have been prepared; a brief description in English of any such documents shall be furnished. Information or documents in a language other than English are not required to be furnished. If practicable, the Commission file number shall appear on the information furnished or in an accompanying letter.

(5) The furnishing of any information or document under paragraph (b) of this rule shall not constitute an admission for any purpose that the issuer is subject to the Act.

(c) Depositary Shares registered on Form F-6 (§239.36 of this chapter), but not the underlying deposited securities, are exempt from section 12(g) of the Act under this paragraph (c).

(d) The exemption provided by paragraph (b) of this rule shall not be available for the following securities:

(1) Securities of a foreign private issuer that has or has had during the prior eighteen months any securities registered under section 12 of the Act or a reporting obligation (suspended or active) under section 15(d) of the Act;

(2) Securities of a foreign private issuer issued in a transaction to acquire by merger, consolidation, exchange of securities, or acquisition of assets, another issuer that had securities registered under section 12 of the Act or a reporting obligation (suspended or active) under section 15(d) of the Act; and

(3) Securities quoted in an "automated interdealer quotation system" or securities represented by American Depositary Receipts so quoted unless all the following conditions are met:

(i) Such securities were so quoted on October 5, 1983 and have been continuously traded since;

(ii) The issuer is in compliance with the exemption in paragraph (b) on October 5, 1983 and has continuously maintained the exemption since; and

(iii) After January 2, 1986, the issuer is organized under the laws of any country except Canada or a political subdivision thereof.

6. By redesignating the first paragraph of §240.15d-5 as paragraph (a) and adding a new paragraph (b) to read as follows: §240.15d-5 Reporting by successor issuers.

* * * * *

(b) An issuer that is deemed to be a successor issuer according to paragraph (a) of this section shall file reports on the same forms as the predecessor issuer except as follows:

(1) An issuer that is not a foreign issuer or that is a North American foreign private issuer shall not be eligible to file on Form 20-F (§240.22f of this chapter).

(2) A non-North American foreign private issuer shall be eligible to file on Form 20-F.

STATUTORY BASIS

These amendments are adopted pursuant to authority in Sections 6, 7, 8, 10, and 19(a) of the Securities Act of 1933; Sections 12, 13, 15(d), and 23(a) of the Securities Exchange Act of 1934.

Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209, 48 Stat. 906, 908; sec. 301, 54 Stat. 857; sec. 8, 68 Stat. 685; sec. 1, 79 Stat. 1051; sec. 308(a)(2), 90 Stat. 57; secs. 12, 13, 15(d), 23(a), 48 Stat. 892, 894, 895, 901; secs. 1, 3, 8, 49 Stat. 1375, 1377, 1379; sec. 203(a), 49 Stat. 704; sec. 202, 68 Stat. 686; secs. 3, 4, 6, 78 Stat. 565-574; secs. 1, 2, 82 Stat. 454; sec. 28(c), 84 Stat. 1435; secs. 1, 2, 84 Stat. 1497; sec. 105(b), 88 Stat. 1503; secs. 8, 9, 10, 18, 89 Stat. 117, 118, 119, 155; sec. 308(b), 90 Stat. 57; secs. 202, 203, 204, 91 Stat. 1494, 1498, 1500; 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 78l, 78m, 78o(d), 78w(a).

By the Commission.

¹ Paragraph (b) of that rule exempts certain foreign securities from registration under section 12(g) of the Exchange Act if the issuer furnishes the Commission with copies of disclosure documents made public under foreign law or regulations. Release No. 33-6433 (October 28, 1982) 47 FR 50292 discusses this rule in more detail.

² As explained below, the securities of issuers listed in accompanying Release No. 34-20265, and currently quoted in NASDAQ are generally grandfathered.

³ Copies of these comment letters as well as a comment highlight prepared by the staff are in File No. S7-951 and are available for public inspection and copying at the Commissions Public Reference Room.

⁴ The monthly average share volume on NASDAQ for the first six months of 1983 was approximately three-fourths that of the New York Stock Exchange and nearly seven times larger than the volume of the American Stock Exchange.

⁵ As explained in the proposing release, foreign securities may be included in NASDAQ directly or in ADR form. These amendments apply equally to both.

⁶ Grandfathering is unusual in the securities laws, but see Section 3(a)(1) of the Securities Act and Section 12(f) of the Exchange Act.

⁷ Unless, of course, the securities are delisted from NASDAQ or the issuer fails to maintain the information supplying exemption.

⁸ The Commission wishes to remind issuers and broker-dealers of their responsibilities during distributions of unregistered securities. See Release Nos. 33-4445 (February 2, 1962) 27 FR 2312 and 33-5168 (July 17, 1971).

⁹ In 1980, the Commission solicited public comment on whether to eliminate the distinction between Canadian and other foreign private issuers. Few comments, even those from Canadian issuers, supported elimination. Release No. 33-6235 (September 2, 1980) 45 FR 63693.

¹⁰ Sections 13(d), 13(e), 14(d), 14(e) and 14(f) of the Exchange Act regulate certain acquisitions of securities and tender offers.

¹¹ The conditions are in the except clause in the definition of a foreign private issuer. Rules 405 (17 CFR 230.405) and 3b-4 (17 CFR 240.3b-4).