SEC Release 33-8501 (XV)

Release No. 33-8501

Release No. 34-50624

Release No. IC-26649

International Series Rel. No. 1282

69 Fed. Reg. 67391 - Nov. 17, 2004

Securities Offering Reform

ACTION: Proposed rule.

Table of Contents

XV. Statutory Basis--Text of the Proposed Amendments

We are proposing the new rules and amendments pursuant to Sections 7, 10, 19, 27A and 28 of the Securities Act, as amended, Sections 3, 10, 12, 13, 15, 17, 21E, 23 and 36 of the Securities Exchange Act, as amended, and Sections 8, 24(a), 30, and 38 of the Investment Company Act of 1940, as amended.

List of Subjects

17 CFR Part 228

Reporting and recordkeeping requirements, Securities, Small businesses.

17 CFR Parts 229, 230, 239, 240, and 243

Reporting and recordkeeping requirements, Securities.

17 CFR Part 274

Investment companies, Reporting and recordkeeping requirements, Securities.

For the reasons set out in the preamble, title 17, chapter II of the Code of Federal Regulations is proposed to be amended as follows:

PART 228--INTEGRATED DISCLOSURE SYSTEM FOR SMALL BUSINESS ISSUERS

1. The authority citation for part 228 continues to read in part as follows:

Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77jjj, 77nnn, 77sss, 78l, 78m, 78n, 78o, 78u-5, 78w, 78ll, 78mm, 80a-8, 80a-29, 80a-30, 80a-37, 80b-11, and 7201 et seq.; and 18 U.S.C. 1350. * * * * *

2. Amend Sec. 228.512 as follows:

a. Add paragraph (a)(4);

b. Add paragraph (a)(5); and

c. Add paragraph (g).

The additions read as follows:

Sec. 228.512 (Item 512) Undertakings.

* * * * *

(a) * * * * * * * *

(4) For determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed by the small business issuer pursuant to Rule 424(b)(3) (Sec. 230.424(b)(3) of this chapter) shall be deemed to be part of the registration statement as of the date it is first used after effectiveness.

(5) For determining liability of the small business issuer under the Securities Act of 1933 to any purchaser, the small business issuer undertakes that in a primary offering for the benefit of the small business issuer pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, the small business issuer will be considered to offer or sell the securities by means of any of the following communications:

(i) A small business issuer's registration statement relating to the offering and any preliminary prospectus and prospectus supplement relating to the offering filed pursuant to Rule 424 (Sec. 230.424 of this chapter);

(ii) Any free writing prospectus prepared by or on behalf of the undersigned small business issuer;

(iii) Information about the small business issuer or its securities (A) provided by or on behalf of the undersigned small business issuer and (B) included in any other free writing prospectus; and

(iv) Any other communication made by or on behalf of undersigned small business issuer. * * * * *

(g) If the small business issuer is relying on Rule 430C (Sec. 230.430C of this chapter), include the following:

Each prospectus filed pursuant to Rule 424(b)(3) (Sec. 230.424(b)(3) of this chapter) as part of a registration statement in reliance on Rule 430C (Sec. 230.430C of this chapter) relating to an offering made pursuant to Rule 415(a)(1)(i) or (ix) (Sec. 230.415(a)(1)(i) or (ix) of this chapter), other than registration statements relying on Rule 430A (Sec. 230.430A of this chapter), shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement in a document incorporated or deemed incorporated by reference or in a prospectus deemed part of and included in a registration statement or the prospectus will supersede or modify any statement that was in a document incorporated or deemed incorporated by reference or in a prospectus deemed part of and included in the registration statement or the prospectus as to any purchaser who had a date and time of contract of sale prior to the date the filed prospectus was deemed part of and included in the registration statement.

PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND CONSERVATION ACT OF 1975--REGULATION S-K

3. The authority citation for part 229 continues to read as follows:

Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 77nnn, 77sss, 78c, 78i, 78j, 78l, 78m, 78n, 78o, 78u-5, 78w, 78ll, 78mm, 79e, 79j, 79n, 79t, 80a-8, 80a-9, 80a-20, 80a-29, 80a-30, 80a- 31(c), 80a-37, 80a-38(a), 80a-39, 80b-11, and 7201 et seq.; and 18 U.S.C. 1350, unless otherwise noted. * * * * *

4. Amend Sec. 229.512 as follows:

a. Revise the proviso immediately following paragraph (a)(1)(iii);

b. Add paragraph (a)(5); and

c. Add paragraph (a)(6).

The revision and additions read as follows:

Sec. 229.512 (Item 512) Undertakings.

(a) * * *

(1) * * *

(iii) * * *

Provided, however, That: (A) paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the registration statement is on Form S-8 (Sec. 239.16b of this chapter), and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m and 78o(d)) that are incorporated by reference in the registration statement; and (B) paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 (Sec. 239.13 of this chapter) or Form F-3 (Sec. 239.33 of this chapter) and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a prospectus supplement filed pursuant to Rule 424(b) (Sec. 230.424(b) of this chapter). * * * * *

(5) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, except as provided in (a)(5)(ii) or (a)(5)(iii) of this section:

(i) Each prospectus filed by the registrant pursuant to Rule 424(b)(3)

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(Sec. 230.424(b)(3) of this chapter) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

(ii) If the registrant is relying on Rule 430B (Sec. 230.430B of this chapter): Each prospectus filed pursuant to Rule 424(b)(2), (b)(5), (b)(7) or (b)(8) (Sec. 230.424(b)(2), (b)(5), (b)(7), or (b)(8) of this chapter) as part of a registration statement in reliance on Rule 430B (Sec. 230.430B of this chapter) or otherwise relating to an offering made pursuant to Rule 415(a)(1)(i) or (x) (Sec. 230.415(a)(1)(i) or (x) of this chapter), for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date it is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. Such date shall be deemed to be a new effective date of the registration statement for liability purposes as provided in Rule 430B (Sec. 230.430B of this chapter) relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement in a document incorporated or deemed incorporated by reference or in a prospectus deemed part of and included in a registration statement or the prospectus will supersede or modify any statement that was in a document incorporated or deemed incorporated by reference or in a prospectus deemed part of and included in the registration statement or the prospectus as to any purchaser who had a date and time of contract of sale prior to the date the filed prospectus was deemed part of and included in the registration statement; or

(iii) If the registrant is relying on Rule 430C (Sec. 230.430C of this chapter): Each prospectus filed pursuant to Rule 424(b)(3) (Sec. 230.424(b)(3) of this chapter) as part of a registration statement in reliance on Rule 430C (Sec. 230.430C of this chapter) relating to an offering made pursuant to Rule 415(a)(1)(i) or (ix) (Sec. 230.415(a)(1)(i) or (ix) of this chapter), other than registration statements relying on Rule 430A (Sec. 230.430A of this chapter) shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement in a document incorporated or deemed incorporated by reference or in a prospectus deemed part of and included in a registration statement or the prospectus will supersede or modify any statement that was in a document incorporated or deemed incorporated by reference or in a prospectus deemed part of and included in the registration statement or the prospectus as to any purchaser who had a date and time of contract of sale prior to the date the filed prospectus was deemed part of and included in the registration statement.

(6) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser:

The undersigned registrant undertakes that in a primary offering for the benefit of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, it will be considered to offer or sell the securities by means of any of the following communications:

(i) A registrant's registration statement relating to the offering and any preliminary prospectus and prospectus supplement relating to the offering filed pursuant to Rule 424 (Sec. 230.424 of this chapter);

(ii) Any free writing prospectus prepared by or on behalf of the undersigned registrant;

(iii) Information about the registrant or its securities (A) provided by or on behalf of the undersigned registrant and (B) included in any other free writing prospectus; and

(iv) Any other communication made by or on behalf of undersigned registrant. * * * * *

PART 230--GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933

5. The authority citation for part 230 continues to read in part as follows:

Authority: 15 U.S.C. 77b, 77c, 77d, 77f, 77g, 77h, 77j, 77r, 77s, 77z-3, 77sss, 78c, 78d, 78j, 78l, 78m, 78n, 78o, 78t, 78w, 78ll(d), 78mm, 79t, 80a-8, 80a-24, 80a-28, 80a-29, 80a-30, and 80a- 37, unless otherwise noted. * * * * *

6. Revise Sec. 230.134 to read as follows:

Sec. 230.134 Communications not deemed a prospectus.

Except as provided in paragraph (f) of this section, the terms ''prospectus'' as defined in section 2(a)(10) of the Act or ''free writing prospectus'' as defined in Rule 405 (Sec. 230.405) shall not include a communication limited to the statements required or permitted by this section, provided that the communication is published or transmitted to any person only after a registration statement (which includes a prospectus satisfying the requirements of section 10 of the Act, including a price range where required) has been filed.

(a) Such communication may include any one or more of the following items of information, which need not follow the numerical sequence of this paragraph:

(1) Factual information about the legal identity and business location of the issuer limited to the following: the name of the issuer of the security, the address, phone number and e-mail address of the issuer's principal offices and contact for investors, the issuer's country of organization, and the geographic areas in which it conducts business;

(2) The title of the security or securities and the amount or amounts being offered;

(3) A brief indication of the general type of business of the issuer, limited to the following:

(i) In the case of a manufacturing company, the general type of manufacturing, the principal products or classes of products manufactured, and the segments in which the company conducts business;

(ii) In the case of a public utility company, the general type of services rendered, a brief indication of the area served, and the segments in which the company conducts business;

(iii) In the case of an asset-backed issuer, the identity of key parties, such as sponsor, depositor, issuing entity, servicer, and trustee, the asset class of the transaction, and the identity of any credit enhancement or other support; and

(iv) In the case of any other type of company, a corresponding statement;

(4) The price of the security, or if the price is not known, the method of its determination or the bona fide estimate of the price range as specified by the issuer or the managing underwriter or underwriters;

(5) In the case of a fixed income security, the final maturity and interest rate provisions or, if the final maturity or interest rate provisions are not known, the probable final maturity or interest rate provisions, as specified by the issuer or the managing underwriter or underwriters;

(6) In the case of a fixed income security with a fixed (non- contingent) interest rate provision, the yield or, if the yield is not known, the probable yield range, as specified by the issuer or the managing underwriter or underwriters and the yield of fixed income securities with comparable maturity and security rating as referred to in paragraph (a)(15) of this section;

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(7) The name and address of the sender of the communication and the fact that it is participating, or expects to participate, in the distribution of the security;

(8) The names of underwriters participating in the offering of the securities, and their additional roles, if any, within the underwriting syndicate;

(9) The anticipated schedule for the offering (including the approximate date upon which the proposed sale to the public will begin) and a description of marketing events (including the dates, times, locations, and procedures for attending or otherwise accessing them);

(10) A description of the procedures by which the underwriters will conduct the offering and the procedures for transactions in connection with the offering with an underwriter or participating dealer (including procedures regarding account-opening and submitting indications of interest and conditional offers to buy);

(11) Whether, in the opinion of counsel, the security is a legal investment for savings banks, fiduciaries, insurance companies, or similar investors under the laws of any State or Territory or the District of Columbia;

(12) Whether, in the opinion of counsel, the security is exempt from specified taxes, or the extent to which the issuer has agreed to pay any tax with respect to the security or measured by the income therefrom;

(13) Whether the security is being offered through rights issued to security holders, and, if so, the class of securities the holders of which will be entitled to subscribe, the subscription ratio, the actual or proposed record date, the date upon which the rights were issued or are expected to be issued, the actual or anticipated date upon which they will expire, and the approximate subscription price, or any of the foregoing;

(14) Any statement or legend required by any state law or administrative authority;

(15) With respect to the securities being offered:

(i) Any security rating assigned, or reasonably expected to be assigned, by a nationally recognized statistical rating organization as defined in Rule 15c3-1(c)(2)(vi)(F) of the Securities Exchange Act of 1934 (Sec. 240.15c3-1(c)(2)(vi)(F) of this chapter) and the name or names of the nationally recognized statistical rating organization(s) that assigned or is or are reasonably expected to assign the rating(s); and

(ii) If registered on Form F-9 (Sec. 239.39 of this chapter), any security rating assigned, or reasonably expected to be assigned, by any other rating organization specified in the Instruction to paragraph A.(2) of General Instruction I of Form F-9;

(16) The names of selling security holders (if included in the prospectus filed at the time of the communication);

(17) The names of securities exchanges or other securities markets where any class of the issuer's securities are, or will be, listed;

(18) The ticker symbols, or proposed ticker symbols, of the issuer's securities; and

(19) Information disclosed in order to correct inaccuracies previously contained in a communication made pursuant to this section.

(b) Except as provided in paragraph (c) of this section, every communication used pursuant to this section shall contain the following:

(1) If the registration statement has not yet become effective, the following statement:

''A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective''; and

(2) The name and address of a person or persons from whom a written prospectus for the offering meeting the requirements of section 10 of the Act, including a price range where required, may be obtained.

(c) Any of the statements or information specified in paragraph (b) of this section may, but need not, be contained in a communication:

(1) Which does no more than state from whom a written prospectus meeting the requirements of section 10 of the Act, including a price range where required, may be obtained, identify the security, state the price thereof and state by whom orders will be executed; or

(2) Which is accompanied or preceded by a prospectus or a summary prospectus, other than a free writing prospectus as defined in Rule 405 (Sec. 230.405), which meets the requirements of section 10 of the Act, including a price range where required, at the date of such preliminary communication.

(d) A communication sent or delivered to any person pursuant to this section which is accompanied or preceded by a prospectus (other than a free writing prospectus as defined in Rule 405 (Sec. 230.405)) which meets the requirements of section 10 of the Act, including a price range where required, at the date of such communication, may solicit from the recipient of the communication an offer to buy the security or request the recipient to indicate whether he might be interested in the security, if the communication contains substantially the following statement:

''No offer to buy the securities can be accepted and no part of the purchase price can be received until the registration statement has become effective, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time prior to notice of its acceptance given after the effective date.''

Provided, that such statement need not be included in such a communication to a dealer.

(e) This section does not apply to a notice, circular, advertisement, letter, or other communication relating to an investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) or a business development company as defined in section 2(a)(48) of the Investment Company Act of 1940 (15 U.S.C. 80a- 2(a)(48)).

(f) A section 10 prospectus included in any communication pursuant to this section shall remain a prospectus for all purposes under the Act.

7. Revise Sec. 230.137 to read as follows:

Sec. 230.137 Publications or distributions of research reports by brokers or dealers that are not participating in an issuer's registered distribution of securities.

Under the following conditions, the terms ''offers,'' ''participates'', or ''participation'' in section 2(a)(11) of the Act shall not be deemed to apply to the publication or distribution of research reports with respect to the securities of an issuer which is the subject of an offering pursuant to a registration statement that the issuer proposes to file or has filed, or that is effective:

(a) The broker or dealer (and any affiliate) that has distributed the report and, if different, the person (and any affiliate) that has published the report have not participated, are not participating, and do not propose to participate in the distribution of the securities that are or will be the subject of the registered offering;

(b) In connection with the publication or distribution of any research report, the broker or dealer (and any affiliate) that has distributed the report and, if different, the person (and any affiliate) that has published the report are not receiving and have not received consideration directly or indirectly from, and are not acting under any direct or indirect arrangement or understanding with:

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(1) The issuer of the securities;

(2) A selling security holder;

(3) Any participant in the distribution of the securities that are or will be the subject of the registration statement; or

(4) Any other person interested in the securities that are or will be the subject of the registration statement;

(d) The issuer is not and any predecessor of the issuer during the past three years was not:

(1) A blank check company as defined in Rule 419(a)(2) (Sec. 230.419(a)(2));

(2) A shell company as defined in Rule 405 (Sec. 230.405); or

(3) An issuer for an offering of penny stock as defined in Rule 3a51-1 of the Securities Exchange Act of 1934 (Sec. 240.3a51-1 of this chapter).

Instructions to Sec. 230.137.

1. Definition of research report. For purposes of this section, research report means a written communication as defined in Rule 405 (Sec. 230.405) that includes an analysis of a security or an issuer and provides information reasonably sufficient upon which to base an investment decision.

2. Paragraph (b) of this section does not preclude payment of the regular price being paid by the broker or dealer for independent research, so long as the conditions of paragraph (b) of this section are satisfied.

3. Paragraph (b) of this section does not preclude payment of the regular subscription or purchase price for the research report.

8. Revise Sec. 230.138 to read as follows:

Sec. 230.138 Publications or distributions of research reports by brokers or dealers about securities other than those they are distributing.

(a) Registered offerings. Under the following conditions, a broker's or dealer's publication or distribution of research reports about securities of an issuer shall be deemed for purposes of sections 2(a)(10) and 5(c) of the Act not to constitute an offer for sale or offer to sell a security which is the subject of an offering pursuant to a registration statement that the issuer proposes to file, or has filed, or that is effective, even if the broker or dealer is participating or will participate in the registered offering of the issuer's securities:

(1)(i) The research report relates solely to the issuer's common stock, or debt securities or preferred stock convertible into its common stock, and the offering involves solely the issuer's non- convertible debt securities or non-convertible, nonparticipating preferred stock; or

(ii) The research report relates solely to the issuer's non- convertible debt securities or non-convertible, nonparticipating preferred stock, and the offering involves solely the issuer's common stock, or debt securities or preferred stock convertible into its common stock;

Instruction to paragraph (a)(1): If the issuer has filed a shelf registration statement under Rule 415(a)(1)(x) (Sec. 230.415(a)(1)(x)) or pursuant to General Instruction I.D. of Form S-3 or General Instruction I.C. of Form F-3 (Sec. 239.13 or Sec. 239.33 of this chapter) with respect to multiple classes of securities, the conditions of paragraph (a)(1) of this section must be satisfied for the offering in which the broker or dealer is participating or will participate.

(2) The issuer:

(i) Is required to file reports, and has filed all required periodic reports on Forms 10-K (Sec. 249.310 of this chapter), 10-KSB (Sec. 249.310b of this chapter), 10-Q (Sec. 249.308a of this chapter), 10-QSB (Sec. 249.308b of this chapter), and 20-F (Sec. 249.220f of this chapter) pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); or

(ii) Is a foreign private issuer that:

(A) Meets all of the registrant requirements of Form F-3 other than the reporting history provisions of General Instructions I.A.1. and I.A.2.(a) of Form F-3;

(B) Either satisfies the public float threshold in General Instruction I.B.1. of Form F-3 or is issuing non-convertible investment grade securities as defined in General Instruction I.B.2. of Form F-3; and

(C) Has its equity securities trading on a designated offshore securities market as defined in Rule 902(b) (Sec. 230.902(b)) and has had them so traded for at least 12 months;

(3) The broker or dealer publishes or distributes research reports on the types of securities in question in the regular course of its business; and

(4) The issuer is not and any predecessor of the issuer during the past three years was not:

(i) A blank check company as defined in Rule 419(a)(2) (Sec. 230.419(a)(2));

(ii) A shell company as defined in Rule 405 (Sec. 230.405); or

(iii) An issuer for an offering of penny stock as defined in Rule 3a51-1 of the Securities Exchange Act of 1934 (Sec. 240.3a51-1 of this chapter).

(b) Rule 144A offerings. If the conditions in paragraphs (a)(1), (a)(2), (a)(3) and (a)(4) of this section are satisfied, a broker's or dealer's publication or distribution of a research report shall not be considered an offer for sale or an offer to sell a security or general solicitation or general advertising, in connection with an offering relying on Rule 144A (Sec. 230.144A).

(c) Regulation S offerings. If the conditions in paragraphs (a)(1), (a)(2), (a)(3), and (a)(4) of this section are satisfied, a broker's or dealer's publication or distribution of a research report shall not:

(1) Constitute directed selling efforts as defined in Rule 902(c) (Sec. 230.902(c)) for offerings under Regulation S (Sec. Sec. 230.901 through 230.905); or

(2) Be inconsistent with the offshore transaction requirement in Rule 902(h) (Sec. 230.902(h)) for offerings under Regulation S.

Instruction to Sec. 230.138.

Definition of research report. For purposes of this section, research report means a written communication as defined in Rule 405 (Sec. 230.405) that includes an analysis of a security or an issuer and provides information reasonably sufficient upon which to base an investment decision.

9. Revise Sec. 230.139 to read as follows:

Sec. 230.139 Publications or distributions of research reports by brokers or dealers distributing securities.

(a) Registered offerings. Under the conditions of paragraph (a)(1) or (a)(2) of this section, a broker's or dealer's publication or distribution of a research report about an issuer or any of its securities shall be deemed for purposes of sections 2(a)(10) and 5(c) of the Act not to constitute an offer for sale or offer to sell a security that is the subject of an offering pursuant to a registration statement that the issuer proposes to file, or has filed, or that is effective, even if the broker or dealer is participating or will participate in the registered offering of the issuer's securities:

(1) Research reports of any type.

(i) The issuer:

(A) Meets the registrant requirements of Form S-3 (Sec. 239.13 of this chapter) or Form F-3 (Sec. 239.33 of this chapter) and the minimum float or investment grade securities provisions of either paragraph (B)(1) or (2) of General Instruction I of the respective form; or

(B) Is a foreign private issuer that:

(1) Meets the registrant requirements of Form F-3 other than the reporting history provisions of General Instructions I.A.1. and I.A.2.(a);

(2) Either satisfies the public float threshold in General Instruction I.B.1.of Form F-3 or is issuing non-convertible investment grade securities pursuant to General Instruction I.B.2. of Form F-3; and

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(3) Has its equity securities trading on a designated offshore securities market as defined in Rule 902(b) (Sec. 230.902(b)) and has had them so traded for at least 12 months;

(ii) The issuer is not and any predecessor of the issuer during the past two years was not:

(A) A blank check company as defined in Rule 419(a)(2) (Sec. 230.419(a)(2));

(B) A shell company as defined in Rule 405 (Sec. 230.405); or

(C) An issuer for an offering of penny stock as defined in Rule 3a51-1 of the Securities Exchange Act of 1934 (Sec. 240.3a51-1 of this chapter); and

(iii) The broker or dealer publishes or distributes research reports in the regular course of its business and is, at the time of publication or distribution, publishing or distributing research reports about the issuer or its securities.

(2) Industry reports.

(i) The issuer is required to file reports pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d) or satisfies the conditions in paragraph (a)(1)(i)(B) of this section;

(ii) The condition in paragraph (a)(1)(ii) of this section is satisfied;

(iii) The research report includes similar information with respect to a substantial number of issuers in the issuer's industry or sub- industry, or contains a comprehensive list of securities currently recommended by the broker or dealer;

(iv) The analysis regarding the issuer or its securities is given no materially greater space or prominence in the publication than that given to other securities or issuers; and

(v) The broker or dealer publishes or distributes research reports in the regular course of its business and, at the time of the publication or distribution of the research report, is including similar information about the issuer or its securities in similar reports.

(b) Rule 144A offerings. If the conditions in paragraph (a)(1) or (a)(2) of this section are satisfied, a broker's or dealer's publication or distribution of a research report shall not be considered an offer for sale or an offer to sell a security or general solicitation or general advertising, in connection with an offering relying on Rule 144A (Sec. 230.144A).

(c) Regulation S offerings. If the conditions in paragraph (a)(1) or (a)(2) of this section are satisfied, a broker's or dealer's publication or distribution of a research report shall not:

(1) Constitute directed selling efforts as defined in Rule 902(c) (Sec. 230.902(c)) for offerings under Regulation S (Sec. Sec. 230.901 through 230.905); or

(2) Be inconsistent with the offshore transaction requirement in Rule 902(h) (Sec. 230.902(h)) for offerings under Regulation S.

Instructions to Sec. 230.139.

2. Projections. A projection constitutes an analysis or information falling within the definition of research report. When a broker or dealer publishes or distributes projections of an issuer's sales or earnings in reliance on paragraph (a)(2) of this section, it must:

(i) Have previously published or distributed projections on a regular basis in order to satisfy the ''regular course of its business'' condition;

(ii) At the time of publishing or disseminating a research report, be publishing or distributing projections with respect to that issuer; and

(iii) For purposes of paragraph (a)(2)(iii) of this section, include projections covering the same or similar periods with respect to either a substantial number of issuers in the issuer's industry or sub-industry or all issuers represented in the comprehensive list of securities contained in the research report.

10. Revise Sec. 230.153 to read as follows:

Sec. 230.153 Definition of ''preceded by a prospectus'' as used in section 5(b)(2) of the Act, in relation to certain transactions.

(a) Definition of preceded by a prospectus. The term preceded by a prospectus as used in section 5(b)(2) of the Act, regarding any requirement of a broker or dealer to deliver a prospectus to a broker or dealer as a result of a transaction effected on or through a national securities exchange or facility thereof, trading facility of a national securities association, or an alternative trading system registered pursuant to Rule 301 of Regulation ATS under the Securities Exchange Act of 1934 (Sec. 242.301 of this chapter), shall mean the filing of the final prospectus for the securities that are the subject of the transaction with the Commission by the applicable filing date under Rule 424 (Sec. 230.424) if the conditions in paragraph (b) of this section are satisfied.

(b) Conditions. A broker or dealer may rely on paragraph (a) of this section with regard to any requirement to deliver a prospectus for transactions covered by that paragraph if:

(1) Securities of the same class are trading on that national securities exchange or facility thereof, trading facility of a national securities association, or alternative trading system;

(2) The registration statement relating to the offering is effective and is not the subject of any pending proceeding or examination under section 8(d) or 8(e) of the Act;

(3) Neither the issuer, nor any underwriter or participating dealer is the subject of a pending proceeding under section 8A of the Act in connection with the offering; and

(4) The issuer has filed with the Commission a prospectus that satisfies the requirements of section 10(a) of the Act, other than omitting price-related information under Rule 430A (Sec. 230.430A), or for offerings relying on Rule 430B (Sec. 230.430B) or Rule 430C (Sec. 230.430C), the issuer has filed or will file such a prospectus within the time required under Rule 424 (Sec. 230.424).

(1) The term national securities exchange, as used in this section, shall mean a securities exchange registered as a national securities exchange under section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f).

(2) The term trading facility shall mean a trading facility sponsored and governed by the rules of a registered securities association or a national securities exchange.

(3) The term alternative trading system shall mean an alternative trading system as defined in Rule 300(a) of Regulation ATS under the Securities Exchange Act of 1934 (Sec. 242.300(a) of this chapter).

11. Amend Sec. 230.158 to revise paragraph (c) to read as follows:

Sec. 230.158 Definition of certain terms in the last paragraph of section 11(a).

* * * * *

(c) For purposes of the last paragraph of section 11(a) of the Act only, the effective date of the registration statement is deemed to be the date of the latest to occur of:

(1) The effective date of the registration statement;

(2) The effective date of the last post-effective amendment to the registration statement, next preceding a particular sale by the issuer of registered securities to the public filed for the purposes of:

(i) Including any prospectus required by section 10(a)(3) of the Act;

(ii) Reflecting in the prospectus any facts or events arising after the effective

[[Page 67464]]

date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; or

(iii) Including any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(3) The date of filing of the last report of the issuer incorporated by reference into the prospectus, and relied upon in lieu of filing a post-effective amendment for purposes of paragraphs (c)(2)(i), (ii) and (iii) of this section, next preceding a particular sale by the issuer of registered securities to the public; or

(4) The most recent effective date of the registration statement for liability purposes determined pursuant to Rule 430B (Sec. 230.430B) next preceding a particular sale by the issuer of registered securities to the public. * * * * *

12. Add Sec. 230.159 to read as follows:

Sec. 230.159 Information available to purchaser at time of contract of sale.

(a) For purposes of section 12(a)(2) of the Act only, and without affecting any other rights a purchaser may have, for purposes of determining whether a prospectus or oral statement included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading at the time of sale (including, without limitation, a contract of sale), any information conveyed to the purchaser only after such time of sale (including such contract of sale) will not be taken into account.

(b) For purposes of section 17(a)(2) of the Act only, and without affecting any other rights the Commission may have to enforce that section, for purposes of determining whether a statement includes or represents any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading at the time of sale (including, without limitation, a contract of sale), any information conveyed to the purchaser only after such time of sale (including such contract of sale) will not be taken into account.

(c) For purposes of section 12(a)(2) of the Act only, knowing of such untruth or omission in respect of a sale (including, without limitation, a contract of sale), means knowing at the time of such sale (including such contract of sale).

13. Add Sec. 230.159A to read as follows:

Sec. 230.159A Definition of ''seller'' for purposes of section 12(a)(2) of the Act.

For purposes of section 12(a)(2) of the Act only, seller shall include the issuer of the securities with regard to, and the issuer shall be considered to offer or sell the securities by means of, any of the following communications made by or on behalf of the issuer in connection with primary offerings of securities of the issuer, regardless of the underwriting method used to sell the issuer's securities:

(a) An issuer's registration statement relating to the offering and any preliminary prospectus and prospectus supplement relating to the offering filed pursuant to Rule 424 (Sec. 230.424) or Rule 497 (Sec. 230.497);

(b) Any free writing prospectus as defined in Rule 405(Sec. 230.405) prepared by or on behalf of the issuer and, in the case of an issuer that is an open-end management company registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), any profile provided pursuant to Rule 498 (Sec. 230.498);

(c) Information about the issuer or its securities (1) provided by or on behalf of the issuer and (2) included in any other free writing prospectus or, in the case of an issuer that is an investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(48)), in any advertisement pursuant to Rule 482 (Sec. 230.482); and

(d) Any other communication made by or on behalf of the issuer.

Notes to Sec. 230.159A:

1. For purposes of this section, information is provided or a communication is made by or on behalf of an issuer if the issuer or an agent or representative authorizes the information or communication and approves the information or communication before its provision or use.

2. This rule shall not affect in any respect the determination of whether any other person is a ''seller'' for purposes of section 12(a)(2) of the Act.

14. Add Sec. 230.163 to read as follows:

Sec. 230.163 Exemption from section 5(c) of the Act for certain communications by or on behalf of well-known seasoned issuers.

Preliminary Note to Sec. 230.163.

Because of the objectives of this section and the policies underlying the Act, the exemption is not available for any communication that, although in technical compliance with the section, is part of a plan or scheme to evade the requirements of section 5 of the Act.

(a) In an offering by a well-known seasoned issuer as defined in Rule 405 (Sec. 230.405), that will be registered under the Act, an offer by or on behalf of such issuer is exempt from the prohibitions in section 5(c) of the Act on offers to sell, offers for sale or offers to buy its securities before a registration statement has been filed, provided that any written offer made in reliance on this exemption will be a prospectus under section 2(a)(10) of the Act and a free writing prospectus as defined in Rule 405 (Sec. 230.405) relating to a public offering of securities to be covered by the registration statement to be filed and the exemption from section 5(c) provided in this section for such written offer shall be conditioned on satisfying the conditions in paragraph (b) of this section.

(b) Conditions. (1) Legend. (i) Every written offer made in reliance on this exemption shall contain the following legend:

[Issuer's name] may file a registration statement (including a prospectus) with the SEC for this offering. Before you invest, you should read the prospectus in it and other documents the issuer has filed with the SEC for more complete information about [issuer's name], including any risks affecting the issuer or its securities, and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at http://www.sec.gov. Alternatively, the company will arrange to send you the prospectus after filing if you request it by calling toll-free 1-8[xx-xxx-xxxx]. This document is a written communication that is an offer pursuant to a free writing prospectus.''

(ii) The legend may indicate that the documents also are available by accessing the issuer's Web site, and provide the Internet address and the particular location of the documents on the Web site.

(iii) An unintentional failure to include the legend in a free writing prospectus required by this section will not result in a violation of section 5(c) of the Act or the loss of the ability to rely on this section so long as:

(A) A good faith and reasonable effort was made to comply with the legend condition;

(B) The free writing prospectus is amended to include the legend as soon as practicable after discovery of the omitted legend; and

(C) If the free writing prospectus has been transmitted without the legend, the free writing prospectus must be retransmitted with the legend to all prospective purchasers to whom, or by

[[Page 67465]]

the same means as, the free writing prospectus was originally transmitted.

(2) Filing condition.

(i) Every written communication made pursuant to this exemption shall be filed with the Commission promptly upon the filing of the registration statement or amendment covering the securities that are being offered in reliance on this exemption.

(ii) An immaterial or unintentional failure to file or delay in filing a free writing prospectus to the extent as provided in this section will not result in a violation of section 5(c) of the Act or the loss of the ability to rely on this section so long as:

(A) A good faith and reasonable effort was made to comply with the filing condition, and

(B) The free writing prospectus is filed as soon as practicable after discovery of the failure to file.

(3) Ineligible offerings. The exemption in paragraph (a) of this section shall not be available to the following communications:

(i) Communications subject to Rule 166 (Sec. 230.166) for business combination transactions;

(ii) Communications made in connection with offerings registered on Form S-8 (Sec. 239.16b); or

(iii) Communications in offerings of securities of ineligible issuers as defined in Rule 405 (Sec. 230.405).

(c) For purposes of this section, a communication is made by or on behalf of an issuer if the issuer or an agent or representative authorizes the communication and approves the communication before its use.

(d) For purposes of this section, a written communication for which disclosure would be required under section 17(b) of the Act as a result of consideration given or to be given, directly or indirectly, by an issuer is deemed a written offer by the issuer and a free writing prospectus of the issuer.

(e) A communication exempt pursuant to this section will not be considered to be in connection with a securities offering registered under the Securities Act for purposes of Rule 100(b)(2)(iv) of Regulation FD under the Securities Exchange Act of 1934 (Sec. 243.100(b)(2)(iv) of this chapter).

15. Add Sec. 230.163A to read as follows:

Sec. 230.163A Exemption from section 5(c) of the Act for certain communications made by or on behalf of issuers more than 30 days before a registration statement is filed.

Preliminary Note to Sec. 230.163A.

(a) Except as excluded pursuant to paragraph (b) of this section, in all registered offerings by issuers, any communication made by or on behalf of an issuer more than 30 days before the date of the filing of the registration statement that does not reference a securities offering shall not constitute an offer to sell, offer for sale, or offer to buy the securities being offered under the registration statement for purposes of section 5(c) of the Act, provided that the issuer takes reasonable steps within its control to prevent further distribution or publication of such communication during the 30 days immediately preceding the date of filing the registration statement. Communications satisfying the requirements of Rule 168 (Sec. 230.168) or Rule 169 (Sec. 230.169) or other safe harbors or exemptions from the definition of offer or the requirements of section 5(c) of the Act are not subject to the restriction of this section on distribution or publication during the 30 days immediately preceding the date of filing the registration statement.

(b) The exemption in paragraph (a) of this section shall not be available to the following communications:

(1) Communications subject to Rule 166 (Sec. 230.166) for business combination transactions;

(2) Communications made in connection with offerings registered on Form S-8 (Sec. 239.16b of this chapter); or

(3) Communications in offerings of securities of ineligible issuers as defined in Rule 405 (Sec. 230.405).

(d) A communication exempt pursuant to this section will not be considered to be in connection with a securities offering registered under the Securities Act for purposes of Rule 100(b)(2)(iv) of Regulation FD under the Securities Exchange Act of 1934 (Sec. 243.100(b)(2)(iv) of this chapter).

16. Add Sec. 230.164 to read as follows:

Sec. 230.164 Post-filing free writing prospectuses in connection with certain registered offerings.

Preliminary Note to Sec. 230.164.

Because of the objectives of this section and the policies underlying the Act, this section is not available for any communication that, although in technical compliance with this section, is part of a plan or scheme to evade the requirements of section 5 of the Act.

(a) In connection with a registered offering, a free writing prospectus as defined in Rule 405 (Sec. 230.405) used by an issuer, underwriter or participating dealer after the filing of the registration statement will be a section 10(b) prospectus for purposes of section 5(b)(1) of the Act provided that the conditions set forth in Rule 433 (Sec. 230.433) are satisfied.

(b) An immaterial or unintentional failure to file or delay in filing a free writing prospectus as necessary to satisfy the filing condition contained in Rule 433 (Sec. 230.433) will not result in a violation of section 5(b)(1) of the Act or the loss of the ability to rely on this section so long as:

(1) A good faith and reasonable effort was made to comply with the filing requirement; and

(2) The free writing prospectus is filed as soon as practicable after discovery of the failure to file.

(c) An unintentional failure to include the legend in a free writing prospectus as necessary to satisfy the legend condition contained in Rule 433 (Sec. 230.433) will not result in a violation of section 5(b)(1) of the Act or the loss of the ability to rely on this section so long as:

(1) A good faith and reasonable effort was made to comply with the legend condition;

(2) The free writing prospectus is amended to include the legend as soon as practicable after discovery of the omitted legend; and

(3) If the free writing prospectus has been transmitted without the legend, the free writing prospectus must be retransmitted with the legend to all prospective purchasers to whom, or by the same means as, the free writing prospectus was originally transmitted.

17. Add Sec. 230.168 to read as follows:

Sec. 230.168 Factual business information and forward-looking information regularly released by a reporting issuer.

Preliminary Note to Sec. 230.168.

This section is only available for factual business information and forward-looking information released or disseminated as provided in this section. This section is not available for any communication that may be in technical compliance with this section but is part of a plan or scheme to evade the requirements of section 5 of the Act.

(a) In the case of an issuer that is required to file reports pursuant to Section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)), and that is not an investment company registered under

[[Page 67466]]

the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) or a business development company as defined in section 2(a)(48) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(48)), for purposes of sections 2(a)(10) and 5(c) of the Act, the continued regular release or dissemination by or on behalf of the issuer of factual business information and forward-looking information shall be deemed not to constitute an offer to sell or offer for sale of a security which is the subject of an offering pursuant to a registration statement that the issuer proposes to file, or has filed, or that is effective, if the conditions of this section are satisfied.

(b) Definitions. Except as provided in paragraph (c) of this section, factual business information is limited to some or all of the following information that is released or disseminated under the conditions in paragraph (d) of this section:

(i) Factual information about the issuer or some aspect of its business;

(ii) Advertisements of, or other information about, the issuer's products or services;

(iii) Factual information about business or financial developments with respect to the issuer;

(iv) Dividend notices; and

(v) Factual information set forth in any report that the issuer files pursuant to the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).

(2) Except as provided in paragraph (c) of this section, forward- looking information is limited to some or all of the following information that is released or disseminated under the conditions in paragraph (d) of this section:

(i) Projections of the issuer's revenues, income (loss), earnings (loss) per share, capital expenditures, dividends, capital structure or other financial items;

(ii) Statements about the issuer management's plans and objectives for future operations, including plans or objectives relating to the products or services of the issuer;

(iii) Statements about the issuer's future economic performance, including statements of the type contemplated by the management's discussion and analysis of financial condition and results of operation described in Item 303 of Regulations S-B and S-K (Sec. 228.303 and Sec. 229.303 of this chapter) or the operating and financial review and prospects described in Item 5 of Form 20-F (Sec. 249.220f of this chapter); and

(iv) Assumptions underlying or relating to any of the information described in paragraphs (b)(2)(i), (b)(2)(ii) and (b)(2)(iii) of this section.

(3) For purposes of this section, information is released or disseminated on behalf of the issuer if the issuer or an agent or representative authorizes the communication and approves the communication before its use.

(c) Exclusions. (1) For purposes of this section, factual business information does not include information about the registered offering or information released or disseminated as part of the offering activities in the registered offering; and

(2) For purposes of this section, forward-looking information does not include information about the registered offering or information released or disseminated as part of the offering activities in the registered offering.

(d) Conditions to exemption. The following conditions must be satisfied with respect to the information:

(1) The issuer has previously released or disseminated information of the type described in this section in the ordinary course of its business; and

(2) The information is released or disseminated in the ordinary course of the issuer's business and the timing, manner and form in which the information is released or disseminated is materially consistent with similar past disclosures.

18. Add Sec. 230.169 to read as follows:

Sec. 230.169 Factual business information regularly released by a non-reporting issuer.

Preliminary Note to Sec. 230.169.

This section is only available for factual business information released or disseminated as provided in this section. This section is not available for any communication that may be in technical compliance with this section but is part of a plan or scheme to evade the requirements of section 5 of the Act.

(a) In the case of an issuer that is not required to file reports pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and that is not an investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) or a business development company as defined in section 2(a)(48) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(48)), for purposes of sections 2(a)(10) and 5(c) of the Act, the continued regular release or dissemination by or on behalf of the issuer of factual business information shall be deemed not to constitute an offer to sell or offer for sale of a security which is the subject of an offering pursuant to a registration statement that the issuer proposes to file, or has filed, or that is effective, if the conditions of this section are satisfied.

(b) Definitions.

(1) Except as provided in paragraph (c) of this section, factual business information is limited to some or all of the following information that is released or disseminated under the conditions in paragraph (d) of this section:

(i) Factual information about the issuer or some aspect of its business;

(ii) Advertisements of, or other information about, the issuer's products or services; and

(iii) Factual information about business or financial developments with respect to the issuer.

(2) For purposes of this section, information is released or disseminated on behalf of the issuer if the issuer or an agent or representative authorizes the communication and approves the communication before its use.

(1) Information about the registered offering or information released or disseminated as part of the offering activities in the registered offering; or

(2) Forward-looking information.

(d) Conditions to exemption. The following conditions must be satisfied with respect to the information:

(1) The issuer has previously released or disseminated information of this type in the ordinary course of its business;

(3) The information is released or disseminated to persons, such as customers and suppliers, other than in their capacities as investors or potential investors in the issuer's securities, by the issuer's employees or agents who regularly and historically have provided such information to such persons.

19. Add Sec. 230.172 to read as follows:

Sec. 230.172 Delivery of prospectuses.

(a) Sending confirmations and notices of allocations. After the effective date of a registration statement, written confirmations of sales of securities in an offering pursuant to a registration statement that contain information limited to that called for in Rule 10b-10 under the Securities Exchange Act of 1934 (Sec. 240.10b-10 of this chapter) and other information customarily included in written confirmations of sales of securities and notices of allocation of

[[Page 67467]]

securities sold or to be sold in an offering pursuant to a registration statement that identify the securities and information which is otherwise limited to information regarding pricing, allocation and settlement, and information incidental thereto are exempt from the provisions of section 5(b)(1) of the Act if the conditions set forth in paragraph (c) of this section are satisfied.

(b) Transfer of the security. Any obligation under section 5(b)(2) of the Act to have a prospectus that satisfies the requirements of section 10(a) of the Act precede or accompany the carrying or delivery of a security in a registered offering is satisfied if the conditions in paragraph (c) of this section are met.

(c) Conditions. (1) The registration statement relating to the offering is effective and is not the subject of any pending proceeding or examination under section 8(d) or 8(e) of the Act;

(2) Neither the issuer, nor an underwriter or participating dealer is the subject of a pending proceeding under section 8A of the Act in connection with the offering; and

(3) The issuer has filed with the Commission a prospectus with respect to the offering that satisfies the requirements of section 10(a) of the Act, other than omitting price-related information under Rule 430A (Sec. 230.430A), or for offerings relying on Rule 430B (Sec. 230.430B) or Rule 430C (Sec. 230.430C), the issuer has filed or will file such a prospectus within the time required under Rule 424 (Sec. 230.424).

(d) Exclusions. This section shall not apply to any:

(1) Offering of any investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.);

(2) Offering of any business development company as defined in section 2(a)(48) of the Investment Company Act of 1940 (15 U.S.C. 80a- 2(a)(48));

(3) A business combination transaction as defined in Rule 165(f)(1) (Sec. 230.165(f)(1); or

(4) Offering registered on Form S-8 (Sec. 239.16b of this chapter).

20. Add Sec. 230.173 to read as follows:

Sec. 230.173 Notice of registration.

(a) Each underwriter or broker or dealer participating in an offering pursuant to a registration statement shall provide to each purchaser from it in a transaction that represents: (1) A sale by the issuer or an underwriter, or (2) a sale where a final prospectus meeting the requirements of section 10(a) of the Act is not exempt pursuant to section 4(3) of the Act and Rule 174 (Sec. 230.174), from a requirement to be delivered, not later than two business days following the completion of such sale, a copy of the final prospectus or, in lieu of such prospectus, a notice to the effect that the sale was made pursuant to a registration statement or in a transaction in which a final prospectus would have been required to have been delivered in the absence of Rule 172 (Sec. 230.172).

(b) If the sale was by the issuer and was not effected by an underwriter, broker, or dealer, the responsibility to send a prospectus, or in lieu of such prospectus, such notice as set forth in paragraph (a) of this section, shall be the issuer's.

(c) Compliance with the requirements of this section is exempt from and not a requirement for compliance with Rule 172 (Sec. 230.172).

(d) A purchaser may request from the person responsible for sending a notice a copy of the final prospectus if one has not been sent.

(e) After the effective date of the registration statement with respect to an offering, including pursuant to Rule 430B (Sec. 230.430B), notices as set forth in paragraph (a) are exempt from the provisions of section 5(b)(1) of the Act.

(f) Exclusions. This section shall not apply to any:

(1) Offering of any investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.);

(2) Offering of any business development company as defined in section 2(a)(48) of the Investment Company Act of 1940 (15 U.S.C. 80a- 2(a)(48));

(3) A business combination transaction as defined in Rule 165(f)(1) (Sec. 230.165(f)(1)); or

(4) Offering registered on Form S-8 (Sec. 239.16b of this chapter).

21. Amend Sec. 230.174 by removing the authority citations following the section and adding paragraph (h) to read as follows:

Sec. 230.174 Delivery of prospectus by dealers; exemptions under section 4(3) of the Act.

* * * * *

(h) Any obligation pursuant to this section to deliver a prospectus, other than pursuant to paragraph (g) of this section, may be satisfied by compliance with the provisions of Rule 172 (Sec. 230.172).

22. Amend Sec. 230.401 by removing the authority citations following the section and revising paragraph (g) to read as follows:

Sec. 230.401 Requirements as to proper form.

* * * * *

(g)(1) Subject to paragraph (g)(2) of this section, except for registration statements and post-effective amendments that become effective automatically pursuant to Rule 462 and Rule 464 (Sec. 230.462 and Sec. 230.464), a registration statement or any amendment thereto is deemed filed on the proper registration form unless the Commission objects to the registration form before the effective date.

(2) An automatic shelf registration statement as defined in Rule 405 (Sec. 230.405) and any post-effective amendment thereto that becomes effective automatically pursuant to Rule 462 (Sec. 230.462) is deemed filed on the proper registration form unless and until the Commission notifies the issuer of its objection to the use of such form. Following any such notification, the issuer must amend its automatic shelf registration statement onto the registration form it is then eligible to use, provided, however, that any continuous offering of securities pursuant to Rule 415 (Sec. 230.415) the issuer has commenced pursuant to the registration statement before the Commission has notified the issuer of its ineligibility may continue until the effective date of a new registration statement or post-effective amendment to the registration statement that the issuer has filed on the proper registration form, if the issuer files promptly after notification the new registration statement or post-effective amendment relying on General Instructions I.B.1 or I.B.2 of Form S-3 or Form F-3 (Sec. 239.13 or Sec. 239.33 of this chapter) for primary offerings of its securities.

23. Amend Sec. 230.405 as follows:

a. Add new definitions of ''automatic shelf registration statement'', ''free writing prospectus'', ''ineligible issuer'', ''shell company'', ''well-known seasoned issuer'', and ''written communication'', in alphabetical order; and

b. Revise the definition of ''graphic communication''.

The revision and additions read as follows:

Sec. 230.405. Definition of terms.

* * * * *

Automatic shelf registration statement. The term automatic shelf registration statement means a registration statement filed on Forms S- 3 or F-3 (Sec. 239.13 or Sec. 239.33 of this chapter) by a well-known seasoned issuer pursuant to General Instruction I.D. or I.C. of such forms, respectively. * * * * *

Free writing prospectus. Except as otherwise specifically provided or the

[[Page 67468]]

context otherwise requires, a free writing prospectus is any written communication as defined in Rule 405 (Sec. 230.405) that constitutes an offer to sell or a solicitation of an offer to buy the securities relating to a registered offering that is used after the registration statement in respect of the offering is filed (or, in the case of a well-known seasoned issuer, whether or not such registration statement is filed) and is made by means other than

(1) A prospectus satisfying the requirements of section 10(a) of the Act, Rule 430 (Sec. 230.430), Rule 430A (Sec. 230.430A), Rule 430B (Sec. 230.430B), or Rule 431 (Sec. 230.431); or

(2) A written communication that constitutes an offer to sell or solicitation of an offer to buy such securities that falls within the exception from the definition of prospectus in clause (a) of section 2(a)(10) of the Act.

Graphic communication. The term graphic communication, which appears in the definition of ''write, written'' in section 2(a)(9) of the Act and the definition written communication in Rule 405 (Sec. 230.405) shall include all forms of electronic media, including, but not limited to, audiotapes, videotapes, facsimiles, CD-ROM, electronic mail, Internet Web sites, substantially similar messages widely distributed (rather than individually distributed) on telephone answering or voice mail systems, computers, computer networks and other forms of computer data compilation.

Ineligible issuer. (1)An ineligible issuer is an issuer with respect to which any of the following is true:

(i) Any issuer that is required to file reports pursuant to sections 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) that has not filed all materials required by sections 13, 14 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m, 78n, or 78o(d)), including any certifications required by any reports;

(ii) Within the past three years, the issuer or its predecessor was a blank check company as defined in Rule 419(a)(2) (Sec. 230.419(a)(2));

(iii) Within the past three years, the issuer or its predecessor was a shell company as defined in Rule 405 (Sec. 230.405);

(iv) The issuer is registering an offering of penny stock as defined in Rule 3a51-1 of the Securities Exchange Act of 1934 (Sec. 240.3a51-1 of this chapter) or it or its predecessor has issued penny stock in the last three years;

(v) The issuer is a limited partnership that is offering and selling its securities other than through a firm commitment underwriting;

(vi) The independent registered public accountant that examined the issuer's financial statements for the most recent fiscal year expressed in its report substantial doubt about the issuer's ability to continue as a going concern;

(vii) Within the past three years, a petition under the federal bankruptcy laws or any state insolvency law was filed by or against the issuer, or a court appointed a receiver, fiscal agent or similar officer with respect to the business or property of the issuer; provided, however, that this would not make the issuer ineligible if it has filed an annual report with audited financial statements subsequent to its emergence from that bankruptcy, insolvency or receivership process;

(viii) Within the past three years, the issuer or any of its subsidiaries was convicted of any felony or misdemeanor described in paragraphs (i) through (iv) of section 15(b)(4)(B) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(4)(B)(i) through (iv));

(ix) Within the past three years, the issuer or any of its subsidiaries entered into a settlement with any government agency involving allegations of violations of the federal securities laws or regulations;

(x) Within the past three years, the issuer or any of its subsidiaries was made the subject of any judicial or administrative decree or order arising out of a governmental action that:

(A) Prohibits certain conduct or activities regarding, including future violations of, the federal securities laws;

(B) Requires that the person cease and desist from violating any provision of the federal securities laws; or

(xi) The issuer has filed a registration statement that is the subject of any pending proceeding or examination under section 8 of the Act or has been the subject of any refusal order or stop order under section 8 of the Act within the past three years; or

(xii) The issuer is the subject of any pending proceeding under section 8A of the Act in connection with an offering.

(2) The following issuers shall also be deemed to be ineligible issuers:

(i) The issuer is an investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.);

(ii) The issuer is a business development company as defined in section 2(a)(48) of the Investment Company Act of 1940 (15 U.S.C. 80a- 2(a)(48)); or

(iii) The issuer is registering an offering relating to a business combination transaction as defined in Rule 165(f)(1)(Sec. 230.165(f)(1)), but only for purposes of such offerings.

(3) An issuer, other than an issuer described in paragraph (2)(i) or (2)(ii) of this section shall not be an ineligible issuer if the Commission determines, upon a showing of good cause, that it is not necessary under the circumstances that the issuer be considered an ineligible issuer. Any such determination shall be without prejudice to any other action by the Commission in any other proceeding or matter with respect to the issuer or any other person. * * * * *

Shell company. The term shell company means a registrant with no or nominal operations and with:

(1) No or nominal assets; or

(2) Assets consisting solely of cash and cash equivalents. * * * * *

Well-known seasoned issuer. A well-known seasoned issuer is any issuer that as of the last business day of its most recently completed second fiscal quarter prior to the date of filing its Form 10-K or Form 20-F (Sec. 249.310 or Sec. 249.220f of this chapter) or amendment to its registration statement for purposes of complying with section 10(a)(3) of the Act:

(1)(i) Is eligible to file a registration statement on Form S-3 or Form F-3 (Sec. 239.13 or Sec. 239.33 of this chapter) for primary offerings of its securities relying on General Instruction I.B.1, I.B.2 (for issuers satisfying the requirements of paragraph (1)(i)(A) of this section), or I.D. of Form S-3 or General Instruction I.B.I, I.B.2 (for issuers satisfying the requirements of paragraph (1)(i)(B) of this section) or I.C. of Form F-3 and:

(ii) Has either:

(A) A market value of its outstanding common equity held by non- affiliates of $700 million or more; or

(B) Has issued in the last three years at least $1 billion aggregate amount of debt securities in offerings registered under the Act and will register only debt securities;

(2) Is a majority-owned subsidiary of a well-known seasoned issuer and, as to the subsidiaries' securities that are being or may be offered:

(i) The well-known seasoned issuer parent has fully and unconditionally guaranteed, as defined in Rule 3-10 of Regulation S-X (Sec. 210.3-10 of this chapter), the payment obligations on the subsidiary's securities and the securities are non-convertible obligations;

[[Page 67469]]

(ii) Are guarantees of:

(A) Non-convertible obligations of its parent; or

(B) Non-convertible obligations of another majority-owned subsidiary where such non-convertible obligations are fully and unconditionally guaranteed, as defined in Rule 3-10 of Regulation S-X (Sec. 210.3-10 of this chapter), by the parent; or

(iii) Are non-convertible obligations fully and unconditionally guaranteed, as defined in Rule 3-10 of Regulation S-X (Sec. 210.3-10 of this chapter), by another majority-owned subsidiary of the same well-known seasoned issuer parent that itself is a well-known seasoned issuer, other than pursuant to this paragraph (2) of this section.

(3) Is required to file reports pursuant to sections 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and has been required to file reports pursuant to those sections for at least the last 12 calendar months;

(4) Has filed all materials it was required to file during the last 12 calendar months under section 13, 14 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m, 78n or 78o(d));

(5) Has filed in a timely manner all materials required to be filed during the 12 calendar months and any portion of a month immediately preceding the date of determination, other than a report that is required solely pursuant to Item 1.01, 1.02, 2.03, 2.04, 2.05, 2.06 or 4.02(a) of Form 8-K (Sec. 249.308 of this chapter), and if the issuer has used (during the 12 calendar months and any portion of a month immediately preceding the date of determination) Rule 12b-25(b) of the Securities Exchange Act of 1934 (Sec. 240.12b-25(b) of this chapter) with respect to a report or a portion of a report, it has actually filed that report or portion thereof within the time period prescribed by that section;

(6) Is not an ineligible issuer as defined in Rule 405 (Sec. 230.405); and

(7) Is not an asset-backed issuer as defined in Rule 405 (Sec. 230.405). * * * * *

Written communication. Except as otherwise specifically provided or the context otherwise requires, a written communication is any communication that is written, printed, broadcast, or a graphic communication as defined in Rule 405 (Sec. 230.405).

24. Amend Sec. 230.408 as follows:

a. Designate the current text as paragraph (a); and

b. Add paragraph (b).

The addition reads as follows:

Sec. 230.408 Additional information.

(a) * * *

(b) Notwithstanding paragraph (a) of this section, unless otherwise required to be included in the registration statement, the failure to include in a registration statement information included in a free writing prospectus will not, solely by virtue of inclusion of the information in a free writing prospectus (as defined in Rule 405 (Sec. 230.405)), be considered an omission of material information required to be included in the registration statement.

25. Amend Sec. 230.412 as follows:

a. Remove the authority citation following the section;

b. Revise paragraph (a); and

c. Add paragraph (d).

The revision and addition read as follows:

Sec. 230.412 Modified or superseded documents.

(a) Any statement contained in a document incorporated or deemed to be incorporated by reference or deemed to be part of a registration statement or the prospectus shall be deemed to be modified or superseded for purposes of the registration statement or the prospectus to the extent that a statement contained in the prospectus or in any other subsequently filed document which also is or is deemed to be incorporated by reference or deemed to be part of the registration statement or prospectus modifies or replaces such statement. Any statement contained in a document that is deemed to be incorporated by reference or deemed to be part of a registration statement or the prospectus after the most recent effective date or after the date of the most recent prospectus may modify or replace existing statements contained in the registration statement or the prospectus. * * * * *

(d) Notwithstanding paragraph (a) of this section, any statement contained in a document that is deemed to be incorporated by reference or deemed to be part of, or any statement contained in a registration statement or the prospectus after the most recent effective date of the registration statement for liability purposes deemed to have occurred pursuant to Rule 430B (Sec. 230.430B), will not modify or supersede any statement contained in the registration statement or the prospectus or contained in a document that is incorporated or deemed to be incorporated by reference or deemed to be part of a registration statement or the prospectus immediately before the most recent deemed effective date pursuant to Rule 430B (Sec. 230.430B).

26. Revise Sec. 230.413 to read as follows:

Sec. 230.413 Registration of additional securities and additional classes of securities.

(a) Except as provided in sections 24(e)(1) and 24(f) of the Investment Company Act of 1940 (15 U.S.C. 80a-24(e)(1) and 80a-24(f)) and in paragraph (b) of this section, where a registration statement is already in effect, the registration of additional securities shall only be effected through a separate registration statement relating to the additional securities.

(b) Notwithstanding paragraph (a) of this section, the following additional classes of securities may be added to an automatic shelf registration statement already in effect by filing a post-effective amendment to that automatic shelf registration statement. The provisions of Rule 401 (Sec. 230.401), other than Rule 401(g)(2) (Sec. 230.401(g)(2)), do not apply to any post-effective amendment filed in reliance on this section:

(1) Securities of a class different than those registered on the effective automatic shelf registration statement, provided that the information required by Item 202 of Regulation S-K (Sec. 229.202 of this chapter) is contained either in the post-effective amendment, a report on Form 10-K (Sec. 249.310 of this chapter), Form 20-F (Sec. 249.220f of this chapter), Form 10-Q (Sec. 249.308a of this chapter), Form 8-K (Sec. 249.308 of this chapter), or Form 6-K (Sec. 249.306 of this chapter) under the Securities Exchange Act of 1934 that is incorporated by reference into the registration statement, or a prospectus filed pursuant to Rule 424 (Sec. 230.424) deemed to be part of and included in the registration statement; or

(2) Securities of a subsidiary that are permitted to be included in an automatic shelf registration statement, provided that the subsidiary is identified as and satisfies the signature requirements of an issuer in the post-effective amendment and the provisions of paragraph (b)(1) of this section are satisfied.

27. Amend Sec. 230.415 as follows:

a. Remove the authority citations following the section;

b. Revise paragraph (a)(1)(x);

a. Revise paragraph (a)(2);

b. Revise paragraph (a)(3);

e. Revise paragraph (a)(4) including the undesignated paragraph; and

f. Add paragraph (a)(5).

The revisions and addition read as follows:

Sec. 230.415 Delayed or continuous offering and sale of securities.

(a) * * *

(1) * * *

[[Page 67470]]

(x) Securities registered (or qualified to be registered) on Form S-3 or Form F-3 (Sec. 239.13 or Sec. 239.33 of this chapter) which are to be offered and sold on an immediate, continuous or delayed basis by or on behalf of the issuer, a subsidiary of the issuer or a person of which the issuer is a subsidiary. * * * * *

(2) Securities in paragraphs (a)(1)(viii) and (ix) of this section not registered on Form S-3 or Form F-3 (Sec. 239.13 or Sec. 239.33 of this chapter) may only be registered in an amount which, at the time the registration statement becomes effective, is reasonably expected to be offered and sold within two years from the initial effective date of the registration.

(3) The registrant furnishes the undertakings required by Item 512(a) of Regulation S-K (Sec. 229.512(a) of this chapter), except that a registrant that is an investment company filing on Form N-2 (Sec. Sec. 239.14 and 274.11a-1 of this chapter) must furnish the undertakings required by Item 34.4 of Form N-2.

(4) Securities in paragraph (a)(1)(i) or (x) of this section registered on a Form S-3 or Form F-3 (Sec. 239.13 or Sec. 239.33 of this chapter) may be offered and sold only if not more than three years have elapsed since the initial effective date of the registration statement. Provided, however, that continuous offerings of securities covered by the registration statement that commenced within the three years of the initial effective date may continue until the effective date of the new registration statement filed pursuant to paragraph (a)(5) of this section.

(5) Prior to the end of the three-year period described in paragraph (a)(4) of this section, an issuer may file a new registration statement and prospectus. The new registration statement and prospectus must include all the information that would be required at that time in a prospectus relating to all offering(s) that it covers. Upon the effective date of the new registration statement, any unsold securities covered by the earlier registration statement and any ongoing continuous offerings of securities pursuant to Rule 415 (Sec. 230.415) covered by the earlier registration statement would be deemed to be included in the new registration statement and any filing fee paid in connection with the earlier registration statement with regard to those securities may be used, pursuant to Rule 457(p) (Sec. 230.457(p)), to offset the filing fee due for the new registration statement. For purposes of Rule 457(p) (Sec. 230.457(p)), other than continuous offerings of securities that commenced prior to the expiration of the three year period described in paragraph (a)(4) of this section, the offering of securities on the earlier registration statement will be deemed terminated as of the date of effectiveness of the new registration statement. For automatic shelf registration statements, in addition to ongoing continuous offerings referenced in paragraph (a)(4) of this section, any offers of securities covered by the earlier registration statement also will be deemed included on the new registration statement as of the effective date of the new registration statement. * * * * *

28. Amend Sec. 230.418 as follows:

a. Revise the introductory text of paragraph (a)(3);

b. Remove the word ''and'' at the end of paragraph (a)(6);

c. Remove the period at the end of the paragraph (a)(7) and in its place add ''; and'';

d. Add paragraph (a)(8); and

e. Revise the introductory text of paragraph (b).

The addition and revisions read as follows:

Sec. 230.418 Supplemental information.

(a) * * *

(3) Except in the case of a issuer eligible to use Form S-3 (Sec. 239.13 of this chapter), any engineering, management or similar reports or memoranda relating to broad aspects of the business, operations or products of the issuer, which have been prepared within the past twelve months for or by the issuer and any affiliate of the registrant or any principal underwriter, as defined in Rule 405 (Sec. 230.405), of the securities being registered except for: * * * * *

(8) Any free writing prospectuses prepared or used by the issuer, any underwriter or any participating dealer. * * * * *

(b) Supplemental information described in paragraph (a) of this section shall not be required to be filed with or deemed part of and included in the registration statement, unless otherwise required. The information shall be returned to the issuer upon request, provided that: * * * * *

29. Amend Sec. 230.424 as follows:

a. Revise the introductory text of paragraph (b);

b. Revise paragraph (b)(2);

c. Revise Instruction 2 following paragraph (b)(7);

d. Add paragraph (b)(8); and

e. Add paragraph (g).

The additions and revisions read as follows:

Sec. 230.424 Filing of prospectuses, number of copies.

* * * * *

(b) Ten copies of each form of prospectus purporting to comply with section 10 of the Act, except for documents constituting a prospectus pursuant to Rule 428(a) (Sec. 230.428(a)) or free writing prospectuses filed pursuant to Rule 433(d) (Sec. 230.433(d)), shall be filed with the Commission in the form in which it is used after the effectiveness of the registration statement and identified as required by paragraph (e) of this section; Provided, however, that only a form of prospectus that contains substantive changes from or additions to a previously filed prospectus is required to be filed; Provided, further, that this paragraph (b) shall not apply in respect of a form of prospectus contained in a registration statement and relating solely to securities offered at competitive bidding, which prospectus is intended for use prior to the opening of bids. The ten copies shall be filed or transmitted for filing as follows: * * * * *

(2) A form of prospectus used in connection with a primary offering of securities pursuant to Rule 415(a)(1)(x) (Sec. 230.415(a)(1)(x)) or securities registered for issuance on a delayed basis pursuant to Rule 415(a)(1)(i), (vii) or (viii) (Sec. 230.415(a)(1)(i), (vii) or (viii)), or that discloses information previously omitted from the prospectus filed as part of an effective registration statement in reliance on Rule 430B (Sec. 230.430B) shall be filed with the Commission no later than the second business day following the earlier of the date of the determination of the offering price or the date it is first used after effectiveness in connection with a public offering or sales, or transmitted by a means reasonably calculated to result in filing with the Commission by that date. * * * * *

(7) * * *

Instruction 2: A form of prospectus sent or given in reliance on Rule 434(c) (Sec. 230.434(c)) with respect to securities registered on Form S-3 or Form F-3 (Sec. 239.13 or Sec. 239.33 of this chapter), other than an abbreviated term sheet filed pursuant to paragraph (b)(7) of this section, shall be filed with the Commission in the time required by paragraph (b)(1) or (b)(2) of this section, as applicable.

(8) A form of prospectus that identifies selling security holders and the amounts to be sold by them that was previously omitted from the registration statement and the prospectus in reliance

[[Page 67471]]

upon Rule 430B (Sec. 230.430B) shall be filed with the Commission no later than the second business day following the earlier of the date of sale or the date of first use or transmitted by a means reasonably calculated to result in filing with the Commission by that date. * * * * *

(g) A form of prospectus filed pursuant to paragraph (b)(2) or (b)(5) of this section that (1) operates to reflect the payment of the filing fee for the offering pursuant to Rule 456 (Sec. 230.456) or (2) does not include disclosure of omitted information regarding the terms of the offering, the securities, or the plan of distribution because such omitted information has been included in periodic or current reports filed pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) incorporated or deemed incorporated by reference into the prospectus, must include on its cover page the calculation of registration fee table reflecting the payment of the filing fee for the securities that are the subject of the form of the prospectus filed pursuant to paragraph (b)(2) or (b)(5) of this section or the identification of the periodic or current reports that are incorporated or deemed incorporated by reference into the prospectus that contain the omitted information as specified in this paragraph.

30. Amend Sec. 230.430A to add paragraph (f) following the note to read as follows:

Sec. 230.430A Prospectus in a registration statement at the time of effectiveness.

* * * * *

(f) This section shall apply to registration statements that are automatically effective pursuant to Rule 462(e) and (f) (Sec. 230.462(e) and (f)).

31. Add Sec. 230.430B to read as follows:

Sec. 230.430B Prospectus in a registration statement after effective date.

(a) A form of prospectus filed as part of a registration statement for offerings pursuant to Rule 415(a)(1) (viii) or (x) (Sec. 230.415(a)(1) (viii) or (x)) may omit information that is unknown or not reasonably available to the issuer pursuant to Rule 409 (Sec. 230.409). A form of prospectus filed as part of an automatic shelf registration statement for offerings pursuant to Rule 415(a)(1)(Sec. 230.415(a)(1)), other than Rule 415(a)(1)(vii) (Sec. 230.415(a)(1)(vii)), may also omit information as to whether the offering is a primary offering or an offering on behalf of persons other than the issuer, the plan of distribution for the securities, and the identification of other issuers unless known. Each such form of prospectus shall be deemed to have been filed as part of the registration statement for the purpose of section 7 of the Act.

(b) A form of prospectus filed as part of a registration statement, for offerings pursuant to Rule 415(a)(1)(i) (Sec. 230.415(a)(1)(i)) by an issuer eligible to use Form S-3 or Form F-3 (Sec. 239.13 or Sec. 239.33 of this chapter) for primary offerings pursuant to General Instruction I.B.1 of such forms, may omit, in addition to the information omitted pursuant to paragraph (a) of this section, the identities of selling security holders and amounts of securities to be registered on their behalf if:

(1) The registration statement is an automatic shelf registration statement as defined in Rule 405 (Sec. 230.405); or

(2) All of the following conditions are satisfied:

(i) The offering in which the selling security holders acquired the securities being registered on their behalf was completed;

(ii) The securities were issued and outstanding prior to the original date of filing the registration statement covering the resale of the securities; and

(iii) The registration statement refers to any unnamed selling security holders in a generic manner by identifying the transaction in which the securities were acquired.

(c) A form of prospectus that is part of a registration statement that omits information in reliance upon paragraph (a) or (b) of this section meets the requirements of section 10 of the Act for the purpose of section 5(b)(1) thereof. This provision shall not limit the information required to be contained in a form of prospectus in order to meet the requirements of section 10(a) of the Act for the purposes of section 5(b)(2) thereof or exception (a) of section 2(a)(10) thereof.

(d) Information omitted from a form of prospectus that is part of an effective registration statement in reliance on paragraph (a) or (b) of this section may be included in the prospectus by a post-effective amendment to the registration statement, a prospectus filed pursuant to Rule 424 (Sec. 230.424), or, if the applicable form permits, by including the information in the issuer's periodic or current reports filed pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) that are incorporated or deemed incorporated by reference into the prospectus in accordance with applicable requirements.

(e) Information omitted from a form of prospectus that is part of an effective registration statement in reliance on paragraph (a) or (b) of this section, that is contained in a form of prospectus filed with the Commission pursuant to Rule 424(b)(3) (Sec. 230.424(b)(3)), shall be deemed part of and included in the registration statement as of the date it is first used after effectiveness.

(f) Information omitted from a form of prospectus that is part of an effective registration statement in reliance on paragraph (a) or (b) of this section, that is contained in a form of prospectus filed with the Commission pursuant to Rule 424(b)(2), (b)(5), (b)(7) or (b)(8) (Sec. 230.424(b)(2), (b)(5), (b)(7) or (b)(8)), shall be deemed to be part of and included in the registration statement on the earlier of the date such form of prospectus is first used or the date and time of the first contract of sale of securities to which such subsequent form of prospectus relates. Such date shall be deemed, for liability purposes only, to be a new effective date of the registration statement relating to the securities to which such subsequent form of prospectus relates and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that, except for any prospectus filed for purposes of including information required by section 10(a)(3) of the Act, the provisions of Rule 401 (Sec. 230.401) do not apply when prospectuses are deemed part of or included in registration statements.

(g) Notwithstanding paragraph (e) or (f) of this section, no statement in a document incorporated or deemed incorporated by reference or a prospectus deemed part of and included in a registration statement or the prospectus will supersede or modify any statement that was in a document incorporated or deemed incorporated by reference or a prospectus deemed part of and included in a registration statement or the prospectus as to any purchaser who had a date and time of contract of sale prior to the effective date occurring based on the filed prospectus.

(h) Issuers relying on this section shall furnish the undertakings required by Item 512(a) of Regulation S-K (Sec. 229.512(a) of this chapter).

32. Add Sec. 230.430C to read as follows:

Sec. 230.430C Prospectus in a registration statement pertaining to an offering pursuant to Rule 415(a)(1)(i) or (ix) after effective date.

(a) In offerings pursuant to Rule 415(a)(1)(i) or (ix) (Sec. 230.415(a)(1)(i) or (ix)) by issuers not subject to the reporting requirements of section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) or not eligible to register a primary offering of its securities on Form S-3

[[Page 67472]]

(Sec. 239.13 of this chapter) pursuant to General Instructions I.B.1, I.B.2, I.C. or I.D. or Form F-3 (Sec. 239.33 of this chapter) pursuant to General Instructions I.A.5, I.B.1, I.B.2 or I.C., information contained in a fo

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Securities Offering Reform

ACTION: Proposed rule.

XV. Statutory Basis--Text of the Proposed Amendments