Release No. 34-20784

March 22, 1984

Suspension of Periodic Reporting Obligation

ACTION: Final Rules.

SUMMARY: The Commission announces the adoption of revisions to Rule 12h-3 under the Securities Exchange Act of 1934 that permit immediate suspension of the Section 15(d) reporting obligation with respect to any class of securities held of record by less than 300 persons or, in the case of certain small businesses, 500 persons. The Commission also announces the adoption of a new simplified form for reporting such suspension. These changes are intended to eliminate an inconsistency in the provisions suspending the obligation of issuers to file periodic reports and to standardize and simplify the suspension process.

EFFECTIVE DATE: Effective immediately upon publication in the Federal Register.

FOR FURTHER INFORMATION CONTACT: William E. Toomey, (202) 272-2573, Division of Corporation Finance, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.

SUPPLEMENTARY INFORMATION: Section 13 of the Securities Exchange Act of 1934 (the "Exchange Act") ¹establishes a periodic reporting obligation for every issuer of a class of securities registered under Section 12 of that Act. Section 15(d) of the Exchange Act imposes the same reporting obligation on every issuer which has filed a registration statement that has become effective under the Securities Act of 1933. ² Pursuant to Rule 12g-4 17 CFR 240.12g-4, a Section 12 issuer can effect immediate suspension of this obligation whenever it has fewer than three hundred security holders by filing a certification with the Commission. Under Section 15(d) of the Exchange Act and Rule 15d-6 17 CFR 240.15d-6, a Section 15(d) issuer is entitled to a comparable suspension, but only if it has fewer than three hundred security holders at the beginning of a fiscal year. As a result, a Section 15(d) issuer may be required to continue to report in circumstances where a Section 12 issuer can effect an immediate cessation. Since this distinction does not appear to serve a useful function, the Commission published proposals in October 1983 to establish uniformity, to the extent practicable, in the treatment of Section 12 and 15(d) issuers, to simplify the suspension process and to assist small businesses consistent with investor protection. ³

The proposals consisted of four parts. First, the proposed revisions to Rule 12h-3 were designed to permit immediate cessation of the periodic reporting requirement for Section 15(d) issuers whenever the number of record holders of a class of registered securities falls below 300 persons or, for certain small businesses, below 500 persons. Second, proposed Form 15, a simplified form for reporting suspension under Section 15(d) and termination of registration under Section 12(g), would replace Form 12g-4/15d-6 17 CFR 249.323 and 333. Third, conforming amendments to Rules 12g-4 and 15d-6 were proposed to provide uniformity. Fourth, Rule 12b-4 was proposed to be rescinded since its provisions would be included in proposed Rule 12h-3. The Commission received four comment letters which generally supported the proposals. ⁴

The proposals are being adopted as proposed with two modifications to Rule 12h-3 and one revision to Rule 15d-6. With respect to Rule 12h-3, the Commission requested specific comment on whether a 90 or 120 day period should be permitted for the filing of an annual report on Form 10-K upon the discontinuance of a suspension. The Commission agrees with the commentators that 120 days, the same period allowed for the filing of Form 10 17 CFR 249.210 is appropriate. In addition, the first sentence of paragraph (c) of proposed Rule 12h-3 has been clarified to limit its application to a registration statement relating to the class of securities for which suspension is sought. The Commission is of the view that this modification will enhance the purpose of the rule by broadening its application in situations where there should be no adverse impact on investors or the public. Finally, Rule 15d-6 has been revised to emphasize that an issuer that has already filed Form 15 with respect to a class of securities pursuant to the provisions of Rule 12h-3, need not make a duplicative filing for that class because of the provisions of Rule 15d-6.

Table of Contents

I. SUMMARY OF FINAL REGULATORY FLEXIBILITY ANALYSIS

The Commission has prepared a final Regulatory Flexibility Analysis in accordance with 5 U.S.C. 604 regarding the revisions to Rule 12h-3. A summary of the corresponding Initial Regulatory Flexibility Analysis was included in the release proposing the changes to Rule 12h-3 at 48 FR 48245. Members of the public who wish to obtain a copy of the Final Regulatory Analysis should contact William E. Toomey in the manner specified above.

II. LIST OF SUBJECTS

List of Subjects in 17 CFR Parts 240 and 249

Forms, Reporting and recordkeeping requirements, Securities.

III. TEXT OF AMENDMENTS

In accordance with the foregoing, Title 17, Chapter II, of the Code of Federal Regulations is proposed to be amended as follows:

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

1. By revising §240.12h-3, Rule 12h-3, to read as follows: §240.12h-3 Suspension of duty to file reports under section 15(d).

(a) Subject to paragraphs (c) and (d) of this section, the duty under section 15(d) to file reports required by section 13(a) of the Act with respect to a class of securities specified in paragraph (b) of this section shall be suspended for such class of securities immediately upon filing with the Commission a certification on Form 15 17 CFR 249.323 if the issuer of such class has filed all reports required by section 13(a), without regard to Rule 12b-25 17 CFR 249.322, for the shorter of its most recent three fiscal years and the portion of the current year preceding the date of filing Form 15, or the period since the issuer became subject to such reporting obligation. If the certification on Form 15 is subsequently withdrawn or denied, the issuer shall, within 60 days, file with the Commission all reports which would have been required if such certification had not been filed.

(b) The classes of securities eligible for the suspension provided in paragraph (a) of this section are:

(1) Any class of securities held of record by: (i) less than 300 persons; or (ii) by less than 500 persons, where the total assets of the issuer have not exceeded $3,000,000 on the last day of each of the issuers three most recent fiscal years;

(2) Any class of securities of a foreign private issuer, as defined in Rule 3b-4 §240.3b-4, held of record by: (i) less than 300 persons resident in the United States or (ii) less than 500 persons resident in the United States where the total assets of the issuer have not exceeded $3,000,000 on the last day of each of the issuers three most recent fiscal years. For purposes of this paragraph, the number of persons resident in the United States shall be determined in accordance with the provisions of Rule 12g3-2(a) §240.12g3-2(a); and

(3) Any class of securities deregistered pursuant to section 12(d) of the Act if such class would not thereupon be deemed registered under section 12(g) of the Act or the rules thereunder.

(c) This section shall not be available for any class of securities for a fiscal year in which a registration statement relating to that class becomes effective under the Securities Act of 1933, or is required to be updated pursuant to section 10(a)(3) of the Act, and, in the case of paragraphs (b)(1)(ii) and (b)(2)(ii), the two succeeding fiscal years; Provided, however, That this paragraph shall not apply to the duty to file reports which arises solely from a registration statement filed by an issuer with no significant assets, for the reorganization of a non-reporting issuer into a one subsidiary holding company in which equity security holders receive the same proportional interest in the holding company as they held in the non-reporting issuer, except for changes resulting from the exercise of dissenting shareholder rights under state law.

(d) The suspension provided by this rule relates only to the reporting obligation under section 15(d) with respect to a class of securities, does not affect any other duties imposed on that class of securities, and shall continue as long as criteria (i) and (ii) in either paragraph (b)(1) or (b)(2) is met on the first day of any subsequent fiscal year; Provided, however, That such criteria need not be met if the duty to file reports arises solely from a registration statement filed by an issuer with no significant assets in a reorganization of a non-reporting company into a one subsidiary holding company in which equity security holders receive the same proportional interest in the holding company as they held in the non-reporting issuer except for changes resulting from the exercise of dissenting shareholder rights under state law.

(e) If the suspension provided by this rule is discontinued because a class of securities does not meet the eligibility criteria of paragraph (b) on the first day of an issuers fiscal year, then the issuer shall resume periodic reporting pursuant to section 15(d) by filing an annual report on Form 10-K for its preceding fiscal year, not later than 120 days after the end of such fiscal year.

2. By revising Rule §240.12g3-2, Rule 12g3-2, to delete paragraph (a)(2) and redesignate paragraph (a)(1) as (a).

3. By revising §240.12g-4, Rule 12g-4, to read as follows: §240.12g-4 Certification of termination of registration under section 12(g).

(a) Termination of registration of a class of securities shall take effect 90 days, or such shorter period as the Commission may determine, after the issuer certifies to the Commission on Form 15 that:

(1) Such class of securities is held of record by: (i) less than 300 persons; or (ii) by less than 500 persons, where the total assets of the issuer have not exceeded $3,000,000 on the last day of each of the issuers most recent three fiscal years; or

(2) Such class of securities of a foreign private issuer, as defined in Rule 3b-4 §240.3b-4, is held of record by: (i) less than 300 persons resident in the United States or (ii) less than 500 persons resident in the United States where the total assets of the issuer have not exceeded $3,000,000 on the last day of each of the issuers most recent three fiscal years. For purposes of this paragraph, the number of persons resident in the United States shall be determined in accordance with the provisions of Rule 12g3-2(a) §240.12g3-2(a).

(b) The issuers duty to file any reports required under section 13(a) shall be suspended immediately upon filing a certification on Form 15; Provided, however, That if the certification on Form 15 is subsequently withdrawn or denied, the issuer shall, within 60 days after the date of such withdrawal or denial, file with the Commission all reports which would have been required had the certification on Form 15 not been filed. If the suspension resulted from the issuers merger into, or consolidation with, another issuer or issuers, the certification shall be filed by the successor issuer.

4. By removing in its entirety §240.12h-4, Rule 12h-4.

5. By revising §240.15d-6, Rule 15d-6, to read as follows:

§240.15d-6 Suspension of duty to file reports.

If the duty of an issuer to file reports pursuant to section 15(d) of the Act as to any fiscal year is suspended as provided in section 15(d) of the Act, such issuer shall, within 30 days after the beginning of the first fiscal year, file a notice on Form 15 informing the Commission of such suspension unless Form 15 has already been filed pursuant to Rule 12h-3. If the suspension resulted from the issuers merger into, or consolidation with, another issuer or issuers, the notice shall be filed by the successor issuer.

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

1. By revising §249.323 to read as follows:

§249.323 Form 15, certification of termination of registration of a class of security under section 12(g) or notice of suspension of duty to file reports pursuant to sections 13 and 15(d) of the Act.

(a) This form shall be filed by each issuer to certify that the number of holders of record of a class of security registered under section 12(g) of the Act is reduced to less than 300 persons, or that the number of holders of record of a class of security registered under section 12(g) of the Act is reduced to less than 500 persons and the total assets of the issuer have not exceeded $3,000,000 on the last day of each of the issuers most recent three fiscal years. Registration terminates 90 days after the filing of the certificate or within such shorter time as the Commission may direct.

(b) This form shall also be filed by each issuer required to file reports pursuant to section 15(d) of the Act, as a notification that the duty to file such reports is suspended pursuant to section 15(d) of the Act because all securities of each class of such issuer registered under the Securities Act of 1933 are held of record by less than 300 persons at the beginning of its fiscal year, or otherwise pursuant to the provisions of Rule 12h-3 17 CFR 240.12h-3.

2. By deleting in its entirety §249.333.

____________________

OMB No. 3235-0167

Exp. October 30, 1986

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 15

Certification and Notice of Termination of Registration under Section 12(g) of the Securities Exchange Act of 1934 or Suspension of Duty to File Reports Under Sections 13 and 15(d) of the Securities Exchange Act of 1934.

Commission File Number ____________________

______________________________

(Exact name of registrant as specified in its charter)

______________________________

(Address, including zip code, and telephone number, including

area code, of registrants principal executive offices)

______________________________

(Title of each class of securities covered by this Form)

______________________________

(Titles of all other classes of securities for which a duty to

file reports under section 13(a) or 15(d) remains)

Please place an X in the box(es) to designate the appropriate rule provision(s) relied upon to terminate or suspend the duty to file reports:

SEC_CODE_REF_0090001192884

Approximate number of holders of record as of the certification or notice date: ____________________

Pursuant to the requirements of the Securities Exchange Act of 1934 (Name of registrant as specified in charter) has caused this certification/notice to be signed on its behalf by the undersigned duly authorized person.

DATE: ____________________

BY: ____________________

Instruction: This form is required by Rules 12g-4, 12h-3 and 15d-6 of the General Rules and Regulations under the Securities Exchange Act of 1934. The registrant shall file with the Commission three copies of Form 15, one of which shall be manually signed. It may be signed by an officer of the registrant, by counsel or by any other duly authorized person. The name and title of the person signing the form shall be typed or printed under the signature.

IV. STATUTORY AUTHORITY

The amendments to Rule 12h-3 are adopted by the Commission pursuant to Sections 12(g)(4), 12(h), 13(a), 15(d) and 23(a) of the Exchange Act.

Secs. 12(g)(4), 12(h), 13(a), 15(d), 23(a), 48 Stat. 892, 894, 895, 901; sec. 203(a), 49 Stat. 704; secs. 3,8,49 Stat. 1377, 1379; secs. 3,4,6, 78 Stat. 565-568, 569, 570-574; sec. 18, 89 Stat. 155; sec. 204, 91 Stat. 1500; 15 U.S.C. 78l(g)(4), 78l(h), 78m(a), 79o(d), 78w(a).

By the Commission.

George A. Fitzsimmons

Secretary

¹15 U.S.C. 78a-78kk (1976 and Supp. V. 1981), as amended by Act of June 6, 1983, Publ. L. No. 98-38.

²15 U.S.C. 77a-77aa (1976 and Supp. V. 1981), as amended by Bus. Regulatory Reform Act of 1982, Pub. L. No. 97-261, §19(d), 96 Stat. 1121 (1982).

³Release No. 34-20263 (October 5, 1983) 48 FR 48245.

⁴The commentators consisted of two bar associations, one law firm and one corporation. The comment letters are available for inspection and copying at the Commissions Public Reference Room, File No. S7-997. One commentator suggested that proposed revised Rule 15d-6 be rescinded as superfluous. Rule 15d-6 is necessary as it continues to be possible for an issuer to effect a suspension under the basic suspension authority contained in Section 15(d) of the Exchange Act. Another commentator observed that the filing of Form 15 should not be required where a national securities exchange has filed a Form 25 with respect to a class of securities. Form 25 does not provide information relevant to the status of a reporting obligation under either Section 12(g) or Section 15d. Therefore, the Commission believes that the public files should clearly reflect the reporting status of a registrant and that the Form 15 will do this in the least burdensome way.