Release No. 33-8591

Release No. 34-52056

Release No. IC-26993

Financial Reporting Rel. No. 75

International Series Rel. No. 1294

70 Fed. Reg. _____ - ____

Table of Contents

Securities Offering Reform

II. Well-Known Seasoned Issuers; Other Categories of Issuers

A. Well-Known Seasoned Issuers

We are modifying the framework for communications in connection with public offerings for all issuers and the framework of the registration process for most issuers that report under the Exchange Act. As we explained in the Proposing Release, we believe that the most far-reaching revisions of our communications rules and registration processes should be considered for issuers that have a reporting history under the Exchange Act and are presumptively the most widely followed in the marketplace.⁴⁰

Today, the largest issuers are followed by sophisticated institutional and retail investors, members of the financial press, and numerous sell-side and buy-side analysts that actively seek new information on a continual basis. Unlike smaller or less mature issuers, large seasoned public issuers tend to have a more regular dialogue with investors and market participants through the press and other media. The communications of these well-known seasoned issuers are subject to scrutiny by investors, the financial press, analysts, and others who evaluate disclosure when it is made.

1. Definition of Well-Known Seasoned Issuer

We are adding a new category of issuer – a “well-known seasoned issuer” – that will be permitted to benefit to the greatest degree from the modifications to our rules we are adopting today regarding communications and the registration processes.⁴¹ We are defining a well-known seasoned issuer as an issuer that is required to file reports pursuant to Section 13(a) or Section 15(d) the Exchange Act and satisfies the following requirements as of the date on which its status as a well-known seasoned issuer is determined:

• the issuer must meet the registrant requirements of Form S-3 or Form F-3;⁴²

• the issuer either:

  • as of a date within 60 days of its eligibility determination date must have a worldwide market value of its outstanding voting and non-voting common equity held by non-affiliates of $700 million or more; or

  • as of a date within 60 days of its eligibility determination date, must have issued in the last three years, at least $1 billion aggregate principal amount of non-convertible securities, other than common equity,⁴³ in primary offerings for cash, not exchange, registered under the Securities Act;⁴⁴ and

• the issuer must not be an ineligible issuer.⁴⁵

If it does not itself meet the conditions for eligibility as a well-known seasoned issuer, a majority-owned subsidiary of a well-known seasoned issuer will nonetheless be a well-known seasoned issuer in connection with the offer and sale of its own securities if:

• the securities are non-convertible securities, other than common equity, and the parent of the majority-owned subsidiary is a well-known seasoned issuer and fully and unconditionally guarantees those securities;⁴⁶

• the securities are guarantees of non-convertible securities, other than common equity, of (1) its well-known seasoned issuer parent or (2) another majority-owned subsidiary where those non-convertible securities are fully and unconditionally guaranteed by the well-known seasoned issuer parent;⁴⁷ or

• the majority-owned subsidiary is offering non-convertible investment grade securities.⁴⁸

Overall, the issuers that will meet our thresholds for well-known seasoned issuers are the most active issuers in the U.S. public capital markets. In 2004, those issuers, which represented approximately 30% of listed issuers, accounted for about 95% of U.S. equity market capitalization. They have accounted for more than 96% of the total debt raised in registered offerings over the past eight years by issuers listed on a major exchange or equity market. These issuers, accordingly, represent the most significant amount of capital raised and traded in the United States. As a result of the active participation of these issuers in the markets and, among other things, the wide following of these issuers by market participants, the media, and institutional investors, we believe that it is appropriate to provide communications and registration flexibilities to these well-known seasoned issuers beyond that provided to other issuers, including other seasoned issuers.

a. Market Capitalization Threshold

As we discussed in the Proposing Release, we believe that non-affiliate equity market capitalization, or “public float,” of a reporting issuer can be used as a proxy for whether the issuer has a demonstrated market following.⁴⁹ We are adopting as a threshold a public float of $700 million or more. We have used market capitalization as a proxy for public float in evaluating this threshold and its implications.

To determine whether an issuer meets the $700 million threshold under the definition, the issuer will calculate its public float in the same manner that it calculates its public float for purposes of determining Form S-3 or F-3 eligibility.⁵⁰ We have revised the definition from the proposal to clarify that the non-affiliate equity market capitalization is determined on a worldwide basis, as it historically has been for purposes of eligibility to use Form F-3. In addition, for purposes of calculating public float of a non-U.S. issuer to determine eligibility as a well-known seasoned issuer and eligibility to use Form S-3 or F-3, we interpret “common equity” as defined in Securities Act Rule 405 as including a class of participating voting or non-voting preferred stock of a foreign issuer where the issuance of the preferred stock results from requirements of the applicable foreign jurisdiction or market and where the class of preferred stock has liquidation or dividend preferences and other terms that cause it to be the substantial economic equivalent of a class of common stock.

To evaluate the implications of a $700 million public float threshold, staff in our Office of Economic Analysis (“OEA”) obtained data on the 12,551 registered offerings that were conducted from 1997 to 2004 by 2,875 issuers that had public equity outstanding and were listed on a major exchange or equity market.⁵¹ Of these offerings, 9,164 were debt offerings that raised proceeds of $1,927 billion, and 3,387 were equity offerings that raised proceeds of $567 billion. The average issuer conducted 4.2 debt offerings and 1.1 equity offerings per calendar year, although as many as 209 debt offerings have been conducted by a single issuer within a calendar year.

OEA also analyzed data on the financial market conditions under which these offerings were made. High levels of analyst coverage, institutional ownership, and trading volume are useful indicators of the scrutiny that an issuer receives from the market, although no one statistic can fully capture the extent to which an issuer is followed by the market.⁵² Issuers with market capitalization in excess of $700 million that conducted offerings from 1997 to 2004 typically had an average of 12 analysts following them prior to the offering.⁵³ This includes only sell-side analysts and is, we believe, a conservative indicator of analyst scrutiny. Institutional investors accounted for an average of 52% of equity ownership prior to offerings by issuers with market capitalization above $700 million. Those issuers had an average daily trading volume of nearly $52 million prior to offerings in this period and accounted for the following percentages of capital raised:

OFFERING PROCEEDS, BY ISSUER CAPITALIZATION
PRIMARY SEASONED OFFERINGS, 1997-2004*

$Billions (%) Proceeds from Offerings, by Issuer Capitalization

Market Capitalization of Issuers

*Source: OEA estimates using Center for Research in Securities Prices at the University of Chicago and Securities Data Corporation data.

b. Registered Offerings of Non-Convertible Securities Threshold

Issuers that do not meet the public equity float test will be considered well-known seasoned issuers if they have issued for cash more than an aggregate of $1 billion in non-convertible securities, other than common equity, through registered primary offerings over the prior three years. These issuers also will have to satisfy the other conditions of the well-known seasoned issuer definition, such as the form eligibility requirement.⁵⁵ In determining compliance with this threshold:

• issuers may aggregate the amount of non-convertible securities, other than common equity, issued in registered primary offerings during the prior three years;

• issuers may include only such non-convertible securities that were issued in registered primary offerings for cash – they may not include registered exchange offers in this aggregation; and

• parent company issuers only may include in their calculation the principal amount of their full and unconditional guarantees, within the meaning of Rule 3-10 of Regulation S-X,⁵⁶ of non-convertible securities, other than common equity, of their majority-owned subsidiaries issued in registered primary offerings for cash during the three-year period.

The aggregate principal amount of non-convertible securities that may be counted toward the $1 billion issuance threshold may have been issued in any registered primary offering for cash, on any form (other than Form S-4 or Form F-4). Those non-convertible securities need not be investment grade securities to be included in the calculation. In calculating the $1 billion amount, issuers generally may include the principal amount of any debt and the greater of liquidation preference or par value of any non-convertible preferred stock that were issued in primary registered offerings for cash.⁵⁷

Issuers may not include the principal amount of securities that were offered in registered exchange offers by the issuer when determining compliance with the $1 billion non-convertible securities threshold. A substantial portion of these offerings involve registered exchange offers of substantially identical securities for securities that were sold in private offerings. In those cases, the original sale to investors in the private offering, relying upon, for example, the exemptions of Securities Act Section 4(2)⁵⁸ and Rule 144A, is not registered and is not carried out under the Securities Act’s disclosure or liability standards. Moreover, in the subsequent registered exchange offers purchasers may not be able, in certain cases, to avail themselves effectively of the remedies otherwise available to purchasers in registered offerings for cash. While these exchange offers are permitted in some circumstances, the policy preference for registered offerings, in conjunction with the streamlining of the registration process we provide today, lead us to conclude that such exchange offers should not count towards the $1 billion threshold.

OEA analyzed statistics on issuers that did not meet the $700 million public equity threshold. OEA found that very few issuers that had public common equity but did not meet the $700 million public float threshold would meet the $1 billion non-convertible securities threshold. However, OEA also found that a number of issuers without any public common equity would meet the $1 billion threshold. Based on OEA’s analysis, from 1997 to 2004 the issuers of fixed income securities that did not have outstanding public common equity but met the $1 billion threshold accounted for 16.7% of all of the issuers without public common equity that issued public debt, but accounted for 65% of total debt and preferred stock issued by all of such issuers. None of the debt offerings of issuers meeting the threshold was rated below investment grade, and 86% of their debt offerings were rated A or higher by a nationally recognized security rating organization (an “NRSRO”). This group of issuers also on average had 19 basis points lower yield spread for their issues relative to issuers without public common equity that had issued less than $1 billion of fixed income securities in the past three years. We believe that this lower yield spread reflects lower default risk (higher ratings) and higher liquidity and transparency of the issuers.⁵⁹

2. Timing of Determination of Well-Known Seasoned Issuer Status

Whether an issuer satisfies the eligibility requirements for being a well-known seasoned issuer generally will be determined on an approximately annual basis. We revised the timing of determination of status as a well-known seasoned issuer in response to comments.⁶⁰ As adopted, the definition uses the 60-day window period used in Form S-3 and Form F-3 and provides that the eligibility determination will be made as of the later of the time of filing of the issuer’s most recent shelf registration statement or the time of its most recent amendment (by post-effective amendment, incorporated Exchange Act report, or form of prospectus) to a shelf registration statement for purposes of complying with Securities Act Section 10(a)(3).⁶¹ In the event that the issuer has not filed a shelf registration statement or amended a shelf registration statement for purposes of complying with Securities Act Section 10(a)(3) for sixteen months, the determination date will be the time of filing of the issuer’s most recent annual report on Form 10-K or Form 20-F. If the issuer does not accomplish its Section 10(a)(3) update or file its annual report when due, the due date will become the date of determination and, because the issuer will be neither timely nor current in its reporting obligations under the Exchange Act at that time, it will cease to be a well-known seasoned issuer. It can of course become a well-known seasoned issuer again in the future if and when it meets applicable requirements.

A well-known seasoned issuer may not be an ineligible issuer on the date of determination of well-known seasoned issuer status. The date of determination of whether an issuer is an ineligible issuer for these purposes is the same date as that used for other purposes in determining the issuer’s status as a well-known seasoned issuer.

3. Well-Known Seasoned Issuers’ Securities Offerings

An issuer that meets the definition of well-known seasoned issuer based on the $700 million public float threshold can use an automatic shelf registration statement, as discussed below, to register any offering of securities, other than those for business combination transactions.⁶² An issuer that meets the definition of well-known seasoned issuer based on the amount of registered non-convertible security issuances in the prior three years also may register any such offering for cash using automatic shelf registration if it is eligible to register a primary offering of its securities on Form S-3 or Form F-3 pursuant to General Instruction I.B.1. of such forms.⁶³ An issuer that meets the definition of well-known seasoned issuer based on the amount of registered non-convertible security issuances in the prior three years but is not eligible to register a primary offering of securities on Form S-3 or Form F-3 pursuant to General Instruction I.B.1 of such forms may use automatic shelf registration to register only offerings for cash of non-convertible securities, other than common equity, whether or not investment grade.

4. Comments Regarding the Definition of Well-Known Seasoned Issuer

Commenters generally supported the addition of a class of well-known seasoned issuers who will benefit the most from the new rules.⁶⁴ Most of the comments related to the threshold for eligibility based on public equity float, the definition of “debt security” for purposes of the debt threshold calculation, the inclusion of securities issued in exchange offers, the frequency of eligibility determinations, and the inclusion or exclusion of Schedule B issuers, voluntary issuers, and asset-backed issuers.⁶⁵ A number of commenters also suggested that the timing of the eligibility determination for well-known seasoned issuers be revised.⁶⁶

Some commenters expressed the view that the $700 million threshold was too high, while others thought additional eligibility conditions should be included.⁶⁷ None of the commenters provided any empirical data supporting their views to modify the thresholds. Other commenters suggested alternative ways to measure whether an issuer should be considered a well-known seasoned issuer, including average daily trading volume or institutional ownership measures.⁶⁸ Many commenters requested that we clarify that the public float used in the calculation be the company’s worldwide public float.⁶⁹ A number of commenters on the definition requested that we direct the staff to reconsider the bases for the thresholds in two to three years.⁷⁰

Commenters on the debt threshold were most concerned about the types of securities included in the calculation and whether it was appropriate to include only debt issued in registered offerings.⁷¹ Some commenters requested that the debt calculation be based on a broader category of fixed income securities including debt securities and non-convertible preferred securities.⁷² Commenters suggested that non-investment grade debt be included in the calculation.⁷³ These commenters also suggested that securities issued in exchange offers, such as “Exxon Capital” exchange offers, be included in the debt calculation. Some commenters suggested that the debt calculation be based on all debt and non-convertible preferred stock sold, whether or not in registered offerings.⁷⁴Finally, some commenters requested that issuers meeting the well-known seasoned issuer definition based on their debt offerings be allowed to use the automatic shelf registration procedure for registering offerings of equity securities as well as debt securities.⁷⁵

We have retained the $700 million public float threshold and the $1 billion debt threshold. As the discussion above reflects, in reaching our determination to use the $700 million public float amount, we considered trading volume, institutional ownership, and market capitalization.

In response to comments, we have clarified that the basis for determining the public float calculation is worldwide public float of voting and non-voting common equity. In response to comments,⁷⁶ we also are providing an interpretation, as set forth above, regarding the inclusion in the calculation of certain participating preferred stock of non-U.S. issuers that is substantially economically equivalent to common equity.

While we are not revising the dollar amount of the thresholds for public equity float or for issued debt, the definition as adopted addresses a number of the other issues that commenters raised. For example, we have expanded the $1 billion debt threshold to include any non-convertible security, other than common equity, that has been issued in a registered offering for cash during the prior three years.⁷⁷ Further, the offering of the security included in the calculation could have been registered on any form (other than Form S-4 or Form F-4) and the security need not be investment grade. In addition, a parent issuer may count the aggregate amount of its registered full and unconditional guarantees of non-convertible securities, other than common equity, of its majority-owned subsidiaries issued for cash during the three-year period.

While we have not changed the dollar amounts of the thresholds, we do agree with commenters that it would be appropriate to revisit the thresholds in a few years. We, therefore, are directing the staff of the Division of Corporation Finance and OEA to undertake a study in three years after full implementation of the rules to evaluate the operation of the definition we adopt today and any material changes in the data upon which the thresholds are based and report back to us and recommend any potential changes to the thresholds based on such new data.

Although some commenters had suggested expanding the categories of eligible issuers beyond those contained in the proposed definition,⁷⁸ and others suggested narrowing the categories of eligible issuers or otherwise imposing more stringent eligibility conditions,⁷⁹ we have adopted the definition as proposed in that regard. As a result, well-known seasoned issuer status is not available to voluntary filers, asset-backed issuers, or Schedule B issuers.⁸⁰ Voluntary filers are not required to file reports under the Exchange Act, and we believe that such issuers should be required to register under the Exchange Act, and thus become subject to all of the results of registration for all purposes, if they wish to avail themselves of the benefits of reporting issuer, seasoned issuer, or well-known seasoned issuer status.⁸¹ For Schedule B issuers, we expect that the staff will continue to consider disclosure and other shelf issues affecting Schedule B issuers in the same manner that they do today. Finally, we have recently adopted rules and regulations covering the offering of and reporting by asset-backed issuers.⁸² This new regulatory structure is not yet fully operational. The advantages of a reporting history under the Exchange Act that influenced our decision to create the well-known seasoned issuer category are essentially absent for asset-backed issuers.

Commenters wanted market participants to have greater certainty that issuers were eligible as well-known seasoned issuers.⁸³ We have modified the timing for determination of well-known seasoned issuer status to provide more certainty. We have provided generally for an approximately annual determination of well-known seasoned issuer status. We also are adopting a change to Form 10-K and Form 20-F that will modify the cover page of those forms to include a check box for issuers to indicate if they are considered well-known seasoned issuers at the time of the filing of the Form 10-K or Form 20-F.

B. Other Categories of Issuers

We also are using existing categories of issuers, including seasoned issuers, unseasoned Exchange Act reporting issuers, and non-reporting issuers, in the new rules regarding communications and the registration process. A seasoned issuer is an issuer that is eligible to use Form S-3 or Form F-3 to register primary offerings of securities pursuant to General Instruction I.B.1 of such Forms or is registering securities in reliance on General Instruction I.B.2, I.B.5, or I.C. of Form S-3 or General Instruction I.A.5 or I.B.2 of Form F-3.⁸⁴ Majority-owned subsidiaries registering offerings of their securities on Form S-3 or Form F-3 pursuant to General Instruction I.C. of Form S-3 or I.A.5. of Form F-3 also are considered seasoned issuers.⁸⁵ As commenters requested, we are clarifying that issuers of asset-backed securities eligible for registration on Form S-3 also are considered seasoned issuers.⁸⁶

An unseasoned issuer is an issuer that is required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act, but does not satisfy the requirements of Form S-3 or Form F-3 for a primary offering of its securities. A non-reporting issuer is an issuer that is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act, regardless of whether it is filing such reports voluntarily.

A number of commenters suggested that the rules treat voluntary filers as seasoned issuers even though they are not required to file reports pursuant to Exchange Act Section 13 or Section 15(d).⁸⁷ As we note above with respect to eligibility for well-known seasoned issuer status, voluntary filers are not required to file reports under the Exchange Act, and we believe that such issuers should be required to register under the Exchange Act if they wish to avail themselves of the benefits accorded seasoned issuers under the rules we are adopting today.

⁴⁰ Today’s rules will provide a class of well-known seasoned issuers greater flexibility in registering their securities offerings under a more streamlined registration process known as automatic shelf registration. Under the automatic shelf registration process, eligible well-known seasoned issuers can register, on a more flexible basis than is currently the case, offerings of different types of securities using Form S-3 or Form F-3 registration statements that are effective upon filing. See discussion in Section V.B.2. below under “Automatic Shelf Registration for Well-Known Seasoned Issuers.”

⁴¹ Except for expanding eligibility for certain majority-owned subsidiaries, as discussed below, we are not changing the existing eligibility standards for the use of Form S-3 and Form F-3.

⁴² Through the form requirements, the definition requires that a well-known seasoned issuer be current and timely in its Exchange Act reporting obligations.

⁴³ “Common equity” is defined in Securities Act Rule 405 as “any class of common stock, or an equivalent interest, including but not limited to a unit of beneficial interest in a trust or a limited partnership interest.”

⁴⁴ As we discuss below, these issuers generally are limited in the types of securities they may register on an automatic shelf registration statement as a well-known seasoned issuer. See Section II.A.3 below under “Well-Known Seasoned Issuers Securities Offerings.”

⁴⁵ See definition of “ineligible issuer” added to Securities Act Rule 405 and discussed in Section III.D.3 below under “Issuer Eligibility.” Further, an issuer will not meet the definition of well-known seasoned issuer if it is an asset-backed issuer (as defined in Release No. 33-8518(b) of Regulation AB [17 CFR 229.1101(b)], an investment company registered under the Investment Company Act of 1940, or a business development company. Business development companies are a category of closed-end investment companies that are not required to register under the Investment Company Act. See Section 2(a)(48) of the Investment Company Act of 1940 [15 U.S.C. 80a-2(a)(48)].

⁴⁶ Whether a guarantee is full and unconditional is analyzed under the same principles as those used under Rule 3-10 of Regulation S-X [17 CFR 210.3-10] and Exchange Act Rule 12h-5 [17 CFR 240.12h-5]. In addition, the guarantee may only be of securities that have a limited duration and are not perpetual. This analysis is not different from the current analysis under Form S-3 or Form F-3 for registered guaranteed securities.

⁴⁷ See amendments to Securities Act Rule 405. Unless the majority-owned subsidiary itself meets the eligibility conditions for a well-known seasoned issuer, it may, of course, only register securities as a well-known seasoned issuer on its parent’s automatic shelf registration statement.

⁴⁸ These offerings would be required to meet the conditions of General Instruction I.B.2 of Form S-3 or Form F-3.

⁴⁹ Public float also is one of the key determinants for eligibility for current short-form registration on Form S-3 or Form F-3.

⁵⁰ The determination of public float is based on a public trading market. This is the same requirement in General Instruction I.B.1 of Form S-3 and Form F-3 that a registrant have a $75 million market value and in the definition of accelerated filer in Exchange Act Rule 12b-2 [17 CFR 240.12b-2]. Therefore, an entity with $700 million of common equity securities outstanding but not trading in any public trading market would not be a well-known seasoned issuer based on market capitalization. See Simplification of Registration Procedures for Primary Securities Offerings, Release No. 33-6964 (Oct. 29, 1982) [57 FR 48970]; Simplification of Registration Procedures for Primary Securities Offerings, Release No. 33-6943 (July 22, 1992) [57 FR 32461] (proposing release); Integrated Disclosure Release, note 23; and Reproposal of Comprehensive Revision to System for Registration of Securities Offerings, Release No. 33-6331 (Aug. 18, 1981) [46 FR 41902].

⁵¹ OEA compiled and analyzed the supporting data for the public float (using market capitalization) and outstanding debt thresholds.

⁵² See, e.g., Harrison Hong, Terrence Lim, and Jeremy C. Stein, Bad News Travels Slowly: Size, Analyst Coverage and the Profitability of Momentum Strategies, 55 Journal of Finance 265 (2000); Robert C. Merton, A Simple Model of Capital Market Equilibrium with Incomplete Information, 42 Journal of Finance 483 (1987).

⁵³ Issuers with a market capitalization of between $75 million and $200 million, in most cases, have between zero to five analysts following them, with approximately 50% having zero to two analysts following them.

⁵⁴ Because the methodology includes only listed issuers, it excludes debt-only issuers (including companies that will be well-known seasoned issuers), including those that are subsidiaries of companies with listed public equity but that are not themselves listed.

⁵⁵ As we discuss below, these issuers generally are limited in the types of securities they may register on an automatic shelf registration statement as a well-known seasoned issuer. See Section II.A.3 below under “Well-Known Seasoned Issuers Securities Offerings.”

⁵⁶ 17 CFR 210.3-10.

⁵⁷ Some commenters asked for clarification on how to value certain types of debt issuances, such as debt issuances involving original issue discount or debt issued in foreign currency denominations. See, e.g., letters from the American Bar Association (“ABA”) and the New York State Bar Association (“NYSBA”). We have not made any modifications to the definition in response to these comments. Issuers should use the same calculation that they use to determine the dollar amount of securities that they are registering for purposes of determining their filing fees under Securities Act Rule 457.

⁵⁸ 15 U.S.C. 77d(2).

⁵⁹ See Gordon J. Alexander, William F. Sharpe, and Jeffrey V. Bailey, Fundamentals of Investments (2001 ed.) at 530.

⁶⁰ See, e.g., letters from Alston & Bird LLP (“Alston”); Davis Polk & Wardwell (“Davis Polk”); Ernst & Young LLP (“E & Y”); and the Association of the Bar of the City of New York (“NYCBA”).

⁶¹ See 15 U.S.C. 77j(a)(3). Under Form S-3 and Form F-3, the Section 10(a)(3) update need not be made through a post-effective amendment. Rather, under these Forms, the Section 10(a)(3) update generally occurs when the issuer files its annual report on Form 10-K or Form 20-F containing the issuer’s audited financial statements for its most recently completed fiscal year by the due date of such annual report.

⁶² Under the Rule, business combination transactions are those defined in Rule 165(f)(1) [17 CFR 230.165(f)(1)]. Rule 165(f)(1) defines a business combination transaction to mean any transaction specified in Rule 145(a) [17 CFR 230.145(a)] or exchange offer.

⁶³ We believe that an eligible well-known seasoned issuer that can otherwise use Form S-3 or Form F-3 for registered primary offerings because it has a $75 million public float should not have to use two different registration statements for its securities offerings for cash.

⁶⁴ See, e.g., letters from Alston; The Bond Market Association (“TBMA”); Citigroup Global Corporate & Investment Bank (“Citigroup”); LaSalle Broker-Dealer Services Division of ABN-AMRO Financial Services, Inc. (“LaSalle”); NYSBA; and Reuters America LLC (“Reuters”).

⁶⁵ See, e.g., letters from ABA; the American Bar Association comment letter on asset-backed securities (“ABA-ABS”); Cleary Gottlieb Steen & Hamilton (“Cleary”); Fried, Frank, Harris, Shriver & Jacobson (“Fried Frank”); the International Bar Association (“IBA”); the Securities Industry Association (“SIA”); and TBMA.

⁶⁶ See, e.g., letters from Alston; Davis Polk; E & Y; NYCBA, and TBMA.

⁶⁷ See, e.g., letters from ABA; the American Institute for Certified Public Accountants (“AICPA”); BDO Seidman, LLP (“BDO Seidman”); Deloitte & Touche LLP (“Deloitte”); E & Y; Fried Frank; the National Association of Real Estate Investment Trusts (“NAREIT”); NYSBA; Reuters; Sullivan & Cromwell (“S & C”); and Students in Professor Samuel C. Thompson’s Investment Banking Class, UCLA School of Law (“UCLA”).

⁶⁸ See, e.g., letters from ABA; Brinson Patrick Securities Corporation (“Brinson Patrick”); and S & C.

⁶⁹ See, e.g., letters from ABA; Alston; Cleary; Fried Frank; IBA; NYSBA; and S & C.

⁷⁰ See, e.g., letters from NYCBA; SIA; and UCLA.

⁷¹ See, e.g., letters from ABA; Alston; Cleary; Davis Polk; S & C; and TBMA.

⁷² See, e.g., letters from ABA; Alston; Cleary; the Society of Corporate Secretaries & Governance Professionals (“SCSGP”); the Southern Company (“Southern”); and TBMA.

⁷³ See, e.g., letters from Alston; Davis Polk; the NYCBA; S & C; and TBMA.

⁷⁴ See, e.g., letters from ABA; Alston; Fried Frank; IBA; and TBMA.

⁷⁵ See, e.g., letters from Alston; Fried Frank; and TBMA.

⁷⁶ See letters from Cleary and Shearman & Sterling (“Shearman”).

⁷⁷  We have not expanded the non-convertible security threshold to include the amount of securities issued in unregistered offerings or in exchange offers.

⁷⁸ See, e.g., letters from ABA; ABA-ABS; Allied Capital Corporation (“Allied”);

⁷⁹ See, e.g., letters from AICPA; BDO Seidman; Deloitte; and E & Y.

⁸⁰  As noted above, the definition of well-known seasoned issuer explicitly excludes investment companies registered under the Investment Company Act of 1940 and business development companies.

⁸¹  As later discussed and consistent with our proposal, an issuer not subject to the reporting requirements of Exchange Act Section 13 or Section 15(d), but filing Exchange Act reports voluntarily, will not be a well-known seasoned issuer or a seasoned issuer. In addition, because voluntary filers are not required to report, they will not be treated as reporting issuers, for example, for purposes of Rule 138, Rule 168, or Rule 433.

⁸²  See Asset-Backed Securities, Release No. 33-8518 (Dec. 22, 2004) [70 FR 1506] (the “Asset-Backed Securities Adopting Release”).

⁸³ See, e.g., letters from ABA-ABS; American Securitization Forum (“ASF”); and Richard Hall.

⁸⁴  See Form S-3 and Form F-3.

⁸⁵ We are expanding the majority-owned subsidiary eligibility in Form S-3 and Form F-3 to allow majority-owned subsidiaries to use the forms under the same circumstances in which majority-owned subsidiaries may be well-known seasoned issuers. For example, see General Instruction I.C. to Form S-3.

⁸⁶ Asset-backed securities (as defined in Item 1101 of Regulation AB [17 CFR 229.1101]) may be offered and sold on Form S-3 if the issuer meets the requirements of General Instruction I.A.4 of Form S-3 and the transaction meets the requirements of General Instruction I.B.5 of such Form, including that the asset-backed securities are investment grade.

⁸⁷ See, e.g., letters from ABA; Alston; Fried Frank; and TBMA.