Release No. 34-53020
International Series Release No. 1295
File No. S7-12-05

Termination of a Foreign Private Issuer's Registration
of a Class of Securities Under Section 12(g) and
Duty to File Reports Under Section 15(d) of the
Securities Exchange Act of 1934

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule.

SUMMARY: We propose to amend the rules allowing a foreign private issuer to terminate the registration of a class of equity securities under section 12(g) of the Securities Exchange Act of 1934 (and thus stop filing reports required as a result of registration) and to cease its reporting obligations regarding a class of equity or debt securities under section 15(d) of the Exchange Act. Under the current rules, a foreign private issuer may find it difficult to terminate its Exchange Act registration and reporting obligations despite the fact that there is relatively little interest in the issuer's securities among United States investors. Moreover, currently a foreign private issuer can only suspend, and cannot permanently terminate, a duty to report arising under section 15(d). The proposed rules would permit the termination of Exchange Act reporting regarding a class of equity securities under either section 12(g) or section 15(d) by a foreign private issuer that meets specified criteria designed to measure U.S. market interest for that class of securities. The proposed rules would also permit a foreign private issuer to terminate, and not merely suspend, its section 15(d) reporting obligations regarding a class of debt securities as long as it meets conditions similar to the current requirements for suspending its reporting obligations relating to that class of debt securities. At the same time, the proposed rules would seek to provide U.S. investors with ready access through the Internet to material information about a foreign private issuer that is required by its home country on an ongoing basis after it has exited the Exchange Act reporting system.

DATES: Comments should be received on or before February 28, 2006..

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments:

• Use the Commissions Internet comment form (http://www.sec.gov/rules/proposed.shtml); or
• Send an e-mail to rule-comments@sec.gov. Please include File Number S7-12- 05 on the subject line; or
• Use the Federal eRulemaking Portal (http://www.regulations.gov). Follow the instructions for submitting comments.

Paper Comments:

• Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-9303.

All submissions should refer to File Number S7-12-05. This file number should be included on the subject line if e-mail is used. To help us process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commissions Internet Web site (http://www.sec.gov/rules/proposed.shtml). Comments also are available for public inspection and copying in the Commissions Public Reference Room, 100 F Street, NE, Washington, DC 20549. All comments received will be posted without change; we do not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly.

FOR FURTHER INFORMATION CONTACT: Elliot Staffin, Special Counsel, at (202) 551-3450, in the Office of International Corporate Finance, Division of Corporation Finance, U.S. Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-3628.

SUPPLEMENTARY INFORMATION: We propose to amend Commission Rule 30-1,¹ Rule 101² of Regulation S-T,³ and Rules 12g3-2, 12g-4 and 12h-3⁴ under the Securities Exchange Act of 1934 ("Exchange Act"),⁵ and to add Rule 12h-6⁶ and Form 15F⁷ under the Exchange Act.

I. BACKGROUND

A. Overview of the Current Rules Governing Exiting the Exchange Act Reporting Regime

Under the current Exchange Act reporting regime, whether a domestic or foreign

private issuer⁸ can terminate its reporting obligations under section 13(a) of the Act⁹ depends on how it became subject to those obligations. An issuer may have become subject to section 13(a) reporting obligations by:

• listing a class of either equity or debt securities on a national securities exchange and registering this class under section 12(b) of the Exchange Act;¹⁰
• registering a class of equity securities under section 12(g)¹¹ either voluntarily or because it had 500 or more security holders of record and more than $10 million in total assets¹² and, if a foreign private issuer, more than 300 shareholders resident in the United States on the last day of its most recently completed fiscal year;¹³ or
• registering either equity or debt securities under a Securities Act registration statement, which has gone effective, thus triggering section 13(a) reporting obligations under Section 15(d) of the Exchange Act.¹⁴

An issuer may be subject to reporting obligations under more than one of the above statutory sections and rules. While an issuer is deemed to have only one active set of reporting obligations, when an issuer attempts to exit the Exchange Act reporting system, it must consider whether there are any dormant or suspended reporting obligations that would preclude the issuer from ceasing its Exchange Act reporting.

For example, an issuer may have active section 13(a) reporting obligations because it has a class of equity securities listed on a national securities exchange and registered with the Commission under section 12(b) of the Exchange Act. When attempting to exit the Exchange Act reporting system, the registrant not only must take steps to effect its delisting from the national securities exchange,¹⁵ but also it must consider whether it has any dormant or suspended reporting obligations under section 12(g)¹⁶ or 15(d) that will become operative once its section 12(b) registration ceases.¹⁷

Exchange Act Rule 12g-4 currently governs whether an issuer may terminate its registration of a class of securities under section 12(g) of the Exchange Act and its corresponding section 13(a) reporting obligations.¹⁸ Under this rule, a foreign private issuer may seek termination of its registration of a class of securities under section 12(g) by certifying in Form 15¹⁹ that the subject class of securities is held by less than 300 residents in the United States or by less than 500 U.S. residents when the issuer's total assets have not exceeded $10 million on the last day of each of the issuer's most recent three fiscal years.²⁰ For the purpose of determining the number of U.S. resident shareholders under this rule, a foreign private issuer must use the method of counting provided under Exchange Act Rule 12g3-2(a).²¹ This method requires looking through the record ownership of brokers, dealers, banks or other nominees on a worldwide basis and counting the number of separate accounts of customers resident in the United States for which the securities are held.²² Under this rule, issuers are required to make inquiries of all nominees, wherever located and wherever in the chain of ownership, for the purpose of assessing the number of U.S. resident holders.

An issuer that has determined that it meets the threshold requirements for termination of registration of a class of securities under Rule 12g-4, and has also never engaged in a registered offering under the Securities Act, may seek termination of its Exchange Act reporting obligations by filing the Form 15 certification.²³ However, an issuer that has registered securities under an effective Securities Act registration statement must determine if it has any suspended reporting obligations under section 15(d) that will become operative after it has terminated the registration of a class of securities under Exchange Act section 12(g).

Rule 12h-3²⁴ is the Exchange Act rule governing when an issuer may suspend its reporting obligations under section 15(d).²⁵ While Rule 12h-3's standards are substantially similar to those under Rule 12g-4,²⁶ there are two important differences. First, an issuer may generally not suspend its section 15(d) reporting obligations until it has filed one Exchange Act annual report after the offering in question. Second, an issuer cannot permanently terminate its reporting obligations under section 15(d) but can only suspend those obligations.²⁷ Therefore, for as long as the subject class of securities is outstanding, a foreign private issuer must also determine at the end of each fiscal year whether the number of U.S. resident security holders or total number of record holders has increased enough to trigger anew its section 15(d) reporting obligations.

B. The Increased Internationalization of the U.S. Securities Markets

It has been almost four decades since the Commission first adopted the "300 U.S. resident shareholder" standard as the benchmark for determining both when a foreign private issuer must register a class of equity securities under section 12(g) and when it may terminate that registration.²⁸ Moreover, it has been over two decades since the Commission adopted Form 15 under Rules 12g-4 and 12h-3.²⁹

Since then, market globalization, advances in information technology, the increased use of American Depositary Receipt ("ADR")³⁰ facilities by foreign companies to sell their securities in the United States,³¹ and other factors have increased significantly the number of foreign companies that have engaged in cross-border activities and sought listings in U.S. securities markets, as well as increased the amount of U.S. investor interest in the securities of foreign companies. For example:

• the number of foreign companies with Exchange Act reporting obligations increased from approximately 300 in 1985 to over 1,200 in 2004;³²
• the number of foreign companies listed on the New York Stock Exchange ("NYSE") increased from 54, or approximately 3.5% of the total number ofNYSE-listed companies in 1985, to 460 or over 16% of the total number of NYSE-listed companies in 2004;³³ and
• the average daily trading value of NYSE-traded foreign securities increased from over $350 million, or over 5% of the total value of NYSE-traded securities in 1991, to over $4.5 billion, or over 10% of the total value of NYSE-traded securities in 2000.³⁴

C. Concerns Regarding the Exchange Act Reporting Exiting Rules for Foreign Private Issuers

Representatives of foreign companies and foreign industry associations have recently voiced their concerns to the Commission about the rules that govern whether a foreign private issuer may exit the Exchange Act registration and reporting regime.³⁵ These representatives maintain that, due to the increased internationalization of U.S. investor interest, the "300 U.S. resident shareholder" standard has become outdated and too easily exceeded by a foreign company that may have engaged in very little recent selling activity in the United States. According to these representatives, after a few years of listing its securities in the United States, a foreign company may discover that there is little U.S. market interest in its securities. Yet because it has not been able to reduce the number of its U.S. shareholders to below 300, it must continue to incur the costs of being an Exchange Act reporting company.

These representatives have further criticized the exit rules' reliance on the number of U.S. resident shareholders because, with the advent of book-entry recording,³⁶ it is difficult and costly to arrive at an accurate count of a foreign company's U.S. resident shareholders. These representatives also are critical of Rule 12h-3 because it merely suspends rather than permanently terminates a company's section 15(d) reporting obligations. As such, years after filing a Form 15, a foreign company may find that it has once again exceeded the 300 U.S. resident shareholder threshold, and thereupon again become subject to section 15(d) reporting duties, without regard to its U.S. market activity.

Finally, these representatives disagree with the fact that our current rule does not permit a foreign private issuer to obtain the Exchange Act Rule 12g3-2(b) exemption³⁷ if, during the previous 18 months, it has had a class of securities registered under section 12 or a reporting obligation, suspended or active, under section 15(d) of the Exchange Act.³⁸

II. DISCUSSION

A. Summary of the Proposed Rule Amendments

In light of the increased internationalization of the U.S. securities markets that has occurred, we believe that it is time to reconsider the rules allowing a foreign private issuer to exit the Exchange Act registration and reporting regime. We propose to amend Rules 12g-4 and 12h-3 to eliminate the provisions that primarily condition a foreign private issuer's eligibility to cease its Exchange Act reporting obligations on whether the number of its U.S. resident security holders has fallen below the 300 or 500 person threshold. In their place, we propose new Exchange Act Rule 12h-6 that would permit a foreign private issuer that meets the conditions discussed below to achieve the following:

• termination of the registration of a class of equity securities under section 12(g) and its resulting section 13(a) reporting obligations;
• permanent termination of its section 15(d) reporting obligations regarding a class of equity securities; and
• permanent termination of its section 15(d) reporting obligations regarding a class of debt securities.

A foreign private issuer would be eligible to terminate its Exchange Act reporting obligations regarding a class of equity securities under proposed Rule 12h-6 if it met the following conditions:

• the issuer has been an Exchange Act reporting company for the past two years, has filed or furnished all reports required for this period, and has filed at least two annual reports under section 13(a);
• the issuer's securities have not been sold in the United States in either a registered or unregistered offering under the Securities Act during the preceding 12 months other than securities:
• sold to the issuer's employees;
• sold by selling security holders in non-underwritten offerings;
• exempt from registration under section 3 of the Securities Act, except section 3(a)(10);³⁹ and
• constituting obligations having a maturity of less than nine months at the time of issuance and offered and sold in transactions exempted from registration under section 4(2) of the Securities Act;⁴⁰ and
• for the preceding two years, the issuer has maintained a listing of the subject class of securities on an exchange in its home country, as defined in Form 20-F,⁴¹ which constitutes the primary trading market for the securities.

Rule 12h-6 would further permit a foreign private issuer seeking to terminate its registration and reporting obligations regarding a class of equity securities to meet one of a set of alternative benchmarks, which are not based on a record holder count, and which depend on whether the issuer is a well-known seasoned issuer.⁴² If a well-known seasoned issuer, then a foreign private issuer could terminate its Exchange Act registration and reporting obligations as long as either:

• the U.S. average daily trading volume of the subject class of securities has been no greater than 5 percent of the average daily trading volume of that class of securities in its primary trading market during a recent 12 month period, and U.S. residents held no more than 10 percent of the issuer's worldwide public float⁴³ at a date within 60 days before the end of that same period; or
• regardless of U.S. trading volume, U.S. residents held no more than 5 percent of the issuer's worldwide public float at a date within 120 days before the filing date of the Form 15F, which is the form that a foreign private issuer would have to file to certify that it meets the conditions for terminating its Exchange Act registration and reporting obligations under proposed Rule 12h-6.

If not a well-known seasoned issuer, then a foreign private issuer could terminate its Exchange Act registration and reporting obligations regarding a class of equity securities as long as, regardless of U.S. trading volume, U.S. residents held no more than 5 percent of the issuer's worldwide public float at a date within 120 days before the filing date of the Form 15F.

Under proposed Rule 12h-6, if a foreign private issuer is unable to meet one of these proposed benchmarks, but satisfies the other conditions of the rule, it could still terminate its Exchange Act registration and reporting obligations regarding a class of equity securities as long as that class of securities is held of record by less than 300 persons on a worldwide basis or less than 300 persons resident in the United States at a date within 120 days before the filing date of the Form 15F.

A foreign private issuer would be eligible to terminate its section 15(d) reporting obligations regarding a class of debt securities under proposed Rule 12h-6 if it met the following conditions:

• the issuer has filed or furnished all required reports under section 15(d), including at least one annual report pursuant to section 13(a) of the Act; and

• at a date within 120 days before the filing date of the Form 15F the class of debt securities is either held of record by less than 300 persons on a worldwide basis or less than 300 persons resident in the United States.

Rules 12g-4 and 12h-3 currently require the filing of Form 15 by which an issuer certifies that it meets the conditions for ceasing its Exchange Act reporting obligations. Unlike Form 15, proposed new Form 15F would require a foreign private issuer to provide specified information regarding several items that would enable investors to obtain information regarding the issuer's decision to terminate its Exchange Act reporting obligations. In addition, proposed new Form 15F would help Commission staff to assess whether the issuer qualifies for termination of its Exchange Act reporting obligations. As under current Rules 12g-4 and 12h-3, the filing of Form 15F would automatically suspend an issuer's reporting duties. If the Commission has not objected, the suspension would become a permanent termination 90 days after the filing of the Form 15F.⁴⁴

Proposed Rule 12h-6 would further require a foreign private issuer, no later than fifteen business days prior to the filing of the Form 15F, to publish a notice, such as a press release, in the United States that discloses its intent to terminate its section 13 reporting obligations, and to submit a copy of the press release either under cover of a Form 6-K, before or at the time of filing of the Form 15F, or as an exhibit to the Form 15F.

Finally, we propose to amend Exchange Act Rule 12g3-2(d) to permit a foreign private issuer to establish the Rule 12g3-2(b) exemption for a class of equity securities that is the subject of a Form 15F immediately upon the effectiveness of termination of Exchange Act reporting pursuant to Rule 12h-6. As a condition to maintaining this exemption, a foreign private issuer would have to publish in English the home country materials required by Rule 12g3-2(b) on its Internet web site or through an electronic information delivery system that is generally available to the public in its primary trading market.

We recognize that U.S. investors benefit from the investment opportunities provided by the registration of foreign private issuers with the Commission and listing and publicly offering securities in the United States. The current exit process may serve as a disincentive to foreign private issuers accessing the U.S. public capital markets because of the burdens and uncertainties associated with terminating registration and reporting under the Exchange Act. We believe that these changes to the exit process for foreign private issuers, if adopted, should provide those issuers with a meaningful option to terminate their Exchange Act reporting obligations when, after electing to access the U.S. public capital markets, they find a diminished level of U.S. investor interest in their securities. As a result, foreign private issuers should be more willing initially to register their securities with the Commission when there is a clearly defined process with more appropriate benchmarks by which they can terminate their Exchange Act reporting obligations if after a period of time U.S. investor interest is not significant relative to non-U.S. investor interest.

In addition, we believe the conditions under proposed Rule 12h-6 are consistent with the interests of U.S. investors in other ways. The two-year reporting and the one-year dormancy conditions are intended to provide sufficient time periods of Commission reporting and of not promoting U.S. investor interest through recent capital raising. The conditions relating to trading on a non-U.S. securities exchange and the benchmarks based on relevant U.S. public float and (for well-known seasoned issuers) relative U.S. trading volume support our view that foreign private issuers that would terminate Exchange Act reporting under proposed Rule 12h-6 should be subject to an ongoing disclosure and financial reporting regime, and have a significant market following, in their home market. The conditions relating to the publication of a press release or other notice, the filing of proposed Form 15F, and the immediate availability of the exemption under Rule 12g3-2(b) promote transparency of the exit process as well as access by U.S. investors to ongoing home country information about issuers that terminate their Exchange Act reporting obligations.

B. Proposed Exchange Act Rule 12h-6

1. Purpose and Scope of Proposed Rule 12h-6

Like current Rule 12g-4, proposed Rule 12h-6 would permit a foreign private issuer meeting specified criteria to terminate its registration of a class of securities under section 12(g) and its corresponding section 13 reporting obligations after filing a certification with the Commission. However, unlike the current Exchange Act reporting exiting regime, proposed Rule 12h-6 would also permit a foreign private issuer to terminate permanently, rather than merely suspend, its reporting obligations regarding a class of equity or debt securities, or both, under section 15(d).

As discussed below, proposed Rule 12h-6 would permit termination of Exchange Act registration and reporting regarding a class of a foreign private issuer's equity securities for which U.S. investor interest is small relative to non-U.S. investor interest, and the expected risk of harm to U.S. investors of termination of registration and reporting is low. Once a foreign company has met the proposed Rule 12h-6 criteria, and taken the other necessary steps to effect termination of reporting,⁴⁵ we believe that it is unlikely that, following termination of its reporting obligations, U.S. trading in the subject class of securities would increase to such an extent as to justify reimposing Exchange Act reporting obligations, and the proposed rule would not do so.

We have proposed to require a foreign company that terminates its Exchange Act registration and reporting under Rule 12h-6 regarding a class of equity securities to provide material home country documents in English under Rule 12g3-2(b) on its Internet Web site or through an electronic information delivery system that is generally available to the public in its primary trading market.⁴⁶ We believe that this proposed "home country disclosure" requirement should provide continued access to issuer information for U.S. investors that continue to own the subject class of equity securities following a foreign company's termination of Exchange Act registration and reporting. Merely suspending a foreign company's section 15(d) reporting obligations could discourage foreign companies from initially registering their securities with the Commission and joining our Exchange Act reporting system, to the detriment of investors in U.S. securities markets.⁴⁷

Proposed Rule 12h-6 would further permit a foreign private issuer to terminate permanently its section 15(d) reporting obligations regarding a class of debt securities as long as the issuer met conditions similar to the current requirements for suspending its reporting obligations under Rule 12h-3. One of these conditions would require a foreign private issuer's debt securities to be held either by less than 300 persons on a worldwide basis or by less than 300 U.S. residents.⁴⁸ Once the number of a foreign private issuer's debt holders has fallen below either of these thresholds, we believe that it is unlikely that the number of its debt holders would increase enough to warrant reimposing Exchange Act reporting obligations. Moreover, by providing a definite means of exiting the Exchange Act reporting system, we would remove one possible disincentive for foreign companies to register their debt securities with the Commission, to the benefit of U.S. investors.

Comment Solicited

We solicit comment on the purpose and scope of proposed Rule 12h-6.

• Should we permit a foreign company to terminate permanently its section 15(d) reporting obligations regarding a class of equity securities, as proposed?
• Should we instead merely permit a foreign company to suspend its section 15(d) reporting obligations regarding a class of equity securities on the condition that those obligations would resume once it no longer meets the criteria specified under proposed Rule 12h-6?
• If so, should we also merely suspend section 12(g) reporting on the same grounds?
• Should we permit a foreign company to terminate its section 15(d) reporting obligations regarding a class of debt securities, as proposed?
• Should we prohibit a foreign company whose sole Exchange Act reporting obligations arise from a class of debt securities under section 15(d) to terminate those reporting obligations under proposed Rule 12h-6?
• Should we merely permit a foreign company to suspend its section 15(d) reporting obligations regarding certain classes of debt securities? If so, what classes of debt securities should we exclude from the proposed Rule 12h-6 termination process?
• Should we require a foreign company that has terminated its Exchange Act reporting obligations under proposed Rule 12h-6 to resume Exchange Act reporting if it reaches a certain number or percentage of U.S. resident shareholders? If so, what number or percentage of U.S. shareholders should trigger renewed Exchange Act reporting?

• Should we add additional conditions to proposed Rule 12h-6, such as a requirement that the issuer self-tender for securities held by U.S. residents?
• Should proposed Rule 12h-6 require issuers to establish a share-sale facility as a condition to termination of registration, through which U.S. holders of securities would be able to dispose of securities without incurring brokerage or other fees? If so, for what period of time would an issuer be required to maintain such a facility one month, two months, or longer or shorter?
• How frequently do foreign companies find that, after filing Form 15, the number of their U.S. resident shareholders has increased and exceeds the 300 U.S. resident shareholder threshold?
• How unlikely is it that, once a foreign company has met the proposed Rule 12h-6 criteria and taken the other steps to effect termination of its reporting, U.S. trading or U.S. resident holdings in the subject class of securities would increase to an extent that could justify reimposing Exchange Act reporting obligations? How unlikely is it that, once the number of a foreign private issuer's debt holders drops below 300 persons on a worldwide basis or 300 U.S. residents, the number of its debt holders would increase to an extent that could justify reimposing Exchange Act reporting obligations?

2. Conditions for Equity Securities Registrants

a. The Two Year Exchange Act Reporting Condition

In order to be eligible to terminate its Exchange Act reporting obligations regarding a class of equity securities under proposed Rule 12h-6, a foreign private issuer must have been an Exchange Act reporting company for the two years preceding its filing of the Form 15F. It also must have filed or furnished all reports required for this period.⁴⁹ Proposed Rule 12h-6 would also provide that an issuer must have filed at least two Exchange Act annual reports.⁵⁰

The purpose of this Exchange Act reporting condition is to provide investors in U.S. securities markets with a reasonable period of time to make investment decisions regarding a foreign private issuer's securities based on the information provided in Exchange Act annual reports and the interim home country materials furnished in English under cover of Form 6-K.⁵¹ Without this Exchange Act reporting condition, a foreign private issuer could conduct a U.S. registered offering of equity securities under the Securities Act and then seek to terminate its section 15(d) reporting duties in less than a year, after filing an Exchange Act annual report.⁵² The value of securities of a foreign issuer may be discounted, and the level of interest among U.S. investors in such securities may be lowered, if U.S. investors are not confident that the foreign private issuer will be subject to Exchange Act reporting for a sufficient period of time. In addition, without this condition, a foreign private issuer could promote U.S. investor interest in its equity securities by listing on a U.S. stock market and registering a class of securities under section 12(b) or section 12(g), and then shortly thereafter terminate its registration without even filing one Exchange Act annual report. Once a foreign private issuer has elected to list equity securities or otherwise sell equity securities publicly to investors in U.S. securities markets, we believe that the issuer should have to provide Exchange Act reports for a reasonable period of time to enable investors to discern trends about and to otherwise evaluate their investment in the issuer. A balance of prudence against the burden on a foreign private issuer that has attracted limited U.S. investor interest leads us to propose setting this requirement at two years.

Comment Solicited

We solicit comment on the proposed Exchange Act reporting requirement.

• Should we require a foreign private issuer to be an Exchange Act reporting company for a specified period and to have filed or furnished all reports required during that period before it can terminate its reporting obligations regarding a class of equity securities under proposed Rule 12h-6?
• If so, should we set this Exchange Act reporting requirement at two previous years, as proposed?
• Should we require an issuer to have provided two Exchange Act annual reports, as proposed?
• Should we instead adopt a longer reporting period that requires an issuer to have provided at least three Exchange Act annual reports?
• Should we adopt an Exchange Act reporting requirement that covers a shorter period, such as one year, and requires a foreign private issuer to have filed at least one Exchange Act annual report?
• Or should we permit a foreign private issuer to terminate its Exchange Act reporting obligations regarding a class of equity securities under proposed Rule 12h-6 even if it has not yet filed one Exchange Act annual report?
• If we should impose an Exchange Act reporting requirement under proposed Exchange Act Rule 12h-6, should this requirement relate only to annual report filings under the Exchange Act and not to filings or submissions on Form 6-K?
• Should this requirement relate only to specified materials likely to be filed or furnished on Form 6-K (such as annual reports to shareholders, proxy statements and other materials relating to meetings of shareholders, earnings releases, and interim period financial statements), and if so, what should they be?

b. The One Year Dormancy Condition

Proposed Rule 12h-6 would require a foreign private issuer not to have sold any securities in a registered offering in the United States during the preceding 12 months, other than securities sold to its employees and those sold by its selling security holders in non-underwritten offerings, before it could terminate its Exchange Act reporting obligations regarding a class of equity securities. The purpose of this condition is to help ensure that Rule 12h-6 would only be available to a foreign issuer when the U.S. securities markets have relatively little interest and the issuer is not trying to create or take advantage of such interest. A foreign company that has actively engaged in U.S. capital raising efforts and sold securities to U.S. investors relatively recently should not be permitted to exit the Exchange Act reporting regime under Rule 12h-6 on the grounds that the U.S. securities markets no longer represent as viable an option for capital raising.

The proposed "one year dormancy" condition would further prevent a foreign company from exiting the Exchange Act reporting system within a year after it has conducted a U.S. registered offering under the Securities Act and garnered investors who are entitled to the protections afforded by our Exchange Act reporting regime. We have excluded from this proposed dormancy period securities sold to a foreign company's U.S. employees, since such sales are undertaken primarily for purposes other than capital formation. Similarly, we have excluded from this proposed dormancy period securities sold by a foreign company's selling security holders in non-underwritten offerings registered under the Securities Act since such sales are not undertaken primarily for the benefit of the issuer.

The proposed condition would also prohibit a foreign company from engaging in unregistered offerings in the United States, other than securities sold to its employees, and securities exempt from registration under section 3 of the Securities Act, except section 3(a)(10), during the previous 12 months.⁵³ Our reasoning regarding an issuer actively seeking U.S. investors would apply equally to unregistered offerings. In addition, if we only proscribed registered offerings, that condition could act as a disincentive to a foreign private issuer to conduct a registered offering in the United States.

We have generally excluded from the proposed one year dormancy requirement securities exempt from registration under section 3 of the Securities Act⁵⁴ because, given their exemptive nature and their limited role in capital formation, they do not raise the same concerns as other securities transactions. We also propose to exclude from the prohibition obligations having a maturity at the time of issuance of less than nine months and exempted from registration under section 4(2) of the Securities Act, on the theory that so-called "4(2) commercial paper" is analogous for these purposes to commercial paper exempt from registration under section 3(a)(3) of the Securities Act.⁵⁵

However, we have proposed to preclude the issuance of securities pursuant to a court-approved scheme of arrangement under section 3(a)(10) of the Securities Act⁵⁶ during the one year dormancy period. Such schemes of arrangement typically possess characteristics of registered offerings, including the solicitation of numerous U.S. resident security holders.

Comment Solicited

We solicit comment on the "one year dormancy" condition.

• Is it appropriate to prohibit an issuer from selling securities in the United States for a period preceding its termination of Exchange Act reporting regarding a class of equity securities under Rule 12h-6?
• If so, should we adopt a one year dormancy period, as proposed? Should the period be more than one year, for example, 18 months or two years? Should it be less than one year, for example, three or six months?
• If it is appropriate to adopt a dormancy condition, should it prohibit both registered and unregistered offerings, as proposed? Should it prohibit only registered offerings? If so, why should the rule distinguish between registered and unregistered offerings?
• Should the dormancy condition exclude from its prohibition securities sold to an issuer's employees and those sold by its selling security holders in registered, non-underwritten offerings, as proposed? Should we distinguish between smaller security holders and those who may have control or have other significant interests and sell without ending their relationship with the issuer?
• Should the dormancy condition exclude from its prohibition securities exempted under Securities Act section 3 other than section 3(a)(10), as proposed? Should we exclude from the one year prohibition securities issued under Securities Act section 3(a)(10) as well?

• Should we exclude "4(2) commercial paper" from the prohibition, as proposed?
• Are there any other types of securities offerings that should be excluded from the prohibition, for example, rights offers, certain exchange offers, and offers under Securities Act Rule 144A?⁵⁷
• Should the dormancy period for unregistered offerings only extend to equity securities?

c. The Home Country Listing Condition

Proposed Rule 12h-6 would require a foreign private issuer to have maintained a listing of the subject class of equity securities for the preceding two years on an exchange in its home country. As proposed, the term "home country" would have the same meaning as under Form 20-F, which defines "home country" as the jurisdiction in which the issuer is legally organized, incorporated or established and, if different, the jurisdiction where it has its principal listing.⁵⁸

Proposed Rule 12h-6 would further require that a foreign private issuer's home country constitutes its primary trading market. As proposed, the term "primary trading market" would mean that at least 55 percent of the trading in the foreign private issuer's securities took place in, on or through the facilities of a securities market in a single foreign country during a recent 12 month period.⁵⁹ Proposed Rule 12h-6 would define "recent 12 month period" to mean a 12 calendar month period that ended no more than 60 days before the filing date of the Form 15F.⁶⁰

The purpose of this condition is to provide for a non-U.S. jurisdiction that principally regulates and oversees the issuance and trading of the issuer's securities and disclosure obligations by the issuer to its investors. If the United States was the sole or principal market for the foreign private issuer's securities, then the Commission would have a greater regulatory interest in continuing to subject the foreign company to the Exchange Act reporting regime. In contrast, if 55 percent or more of the average daily trading volume of the company's securities occurred through the facilities of its home country securities market, then there is a greater likelihood that the principal pricing determinants for the company's securities are within the jurisdiction of its home country regulator.⁶¹ There also is a greater likelihood that the foreign company will be subject to a body of reporting and other securities regulatory requirements in its home jurisdiction. Consequently, for a company meeting these requirements, there should be less interruption in the flow of material information about the company once it exits the Exchange Act reporting system.

Comment Solicited

We solicit comment on the proposed "home country listing" condition.

(17 CFR 230.902(j)(1)(ii)).

• Should we require that a company have maintained a listing of the subject class of equity securities on an exchange in its home country for the last two years, as proposed?
• Do other countries have markets or facilities that are not an "exchange"? If so, should the listing requirement be satisified by means of quoting the subject class of securities on foreign markets operated other than as an exchange?
• Should we impose a home country listing requirement that is shorter than two years, say, one year? Should we impose a home country listing requirement that is longer than two years? Should we not impose a home country listing requirement at all?
• Should the Commission's rule be sensitive to particular characteristics of the listing market or the home country? If so, how should this be accomplished?
• Should we require that a foreign private issuer represent that it is in compliance with the rules of, or otherwise in good standing with, its home country securities regulator or listing authority?
• Should we require that a foreign private issuer's home country constitutes its primary trading market, as proposed?
• If so, should we require that 55 percent or more of the average daily trading volume of a foreign company's securities occurred through the facilities of a single foreign country securities market during a recent 12 month period, as proposed?
• Should we require that a higher percentage, for example, 60 or 75 percent or a lower percentage, for example, 50 percent of the average daily trading volume of a foreign company's equity securities occurred through the facilities of its home country securities market during a recent 12 month period?
• Should we permit a foreign company to terminate its Exchange Act reporting obligations regarding a class of equity securities if the percentage of the average daily trading volume of its securities that occurred in its home country market is less than 50 percent as long as that percentage when aggregated with the percentage of the average daily trading volume of the company's securities occurring in another non-U.S. jurisdiction was at least 55 percent or some other percentage greater than 55 percent? Would another test better accomplish the goals of the home country listing condition?
• Should we adopt the definition of "recent 12 month period", as proposed? Should we adopt a period that is longer or shorter than 12 months?
• Should we adopt the 60-day window to the 12 month period, as proposed? Should the window be longer or shorter than 60 days?

d. Public Float and Trading Volume Benchmarks

Proposed Rule 12h-6 would next permit a foreign private issuer to meet one of a set of quantitative conditions designed to measure the relative level of U.S. market interest in a foreign company's equity securities, and which is not based on a record holder count. The particular condition applicable to a foreign company would depend upon whether the foreign company met the definition of a well-known seasoned issuer under Rule 405 of the Securities Act.⁶²

If the issuer is a well-known seasoned issuer, and the average daily trading volume of the subject class of equity securities in the United States has been 5 percent or less of the average daily trading volume of that class of securities in its primary trading market during a recent 12 month period, then the foreign company would be eligible to terminate its Exchange Act registration and reporting obligations under proposed Rule 12h-6 as long as U.S. residents held no more than 10 percent of the class of company's outstanding voting and non-voting equity securities, regarding which there is an Exchange Act reporting obligation, held by the company's non-affiliates on a worldwide basis ("worldwide public float") at a date within 60 days before the end of the same 12 month period.⁶³ Otherwise, a foreign private issuer that is a well-known seasoned issuer could terminate its Exchange Act registration and reporting obligations under proposed Rule 12h-6 regarding a class of equity securities if its U.S. resident shareholders held no more than 5 percent of the company's worldwide public float at a date within 120 days before the filing date of the Form 15F.⁶⁴

A foreign company that is not a well-known seasoned issuer could terminate its Exchange Act registration and reporting under proposed Rule 12h-6 if U.S. residents held no more than 5 percent of the company's worldwide public float at a date within 120 days before the filing date of the Form 15F, regardless of its U.S. trading volume.⁶⁵

One of the principal reasons that we are proposing to replace the current standard for a foreign private issuer's termination of reporting, which rests solely on a "300 U.S. holder" benchmark (or "500 U.S. holder" benchmark for companies with $10 million or less in assets), with benchmarks based upon, among other things, relative U.S. ownership of a foreign company's worldwide public float, is that the proposed benchmarks should liberalize a foreign private issuer's exiting of the Exchange Act registration and reporting regime. At the same time, the proposed benchmarks should work with the other proposed conditions to permit a foreign private issuer to exit the Exchange Act registration and reporting regime only when the impact of the issuer's termination of reporting on the U.S. investor community is expected to be low.

Our expectation that the proposed benchmarks will liberalize exiting the Exchange Act reporting regime for foreign private issuers arises from an evaluation of data developed by our staff in the Division of Corporation Finance and the Office of Economic Analysis regarding the number of foreign private issuers that would be eligible to deregister under the proposal. The staff developed a database of 510 foreign private issuers for which data was sufficient to make the necessary calculations.⁶⁶ The data show that approximately 26% of these foreign private issuers would be eligible to deregister under the proposals.⁶⁷ The breakdown of that 26% is as follows:

• well-known seasoned issuers with 5% or less U.S. trading volume and 10% or less U.S. ownership--26% of WKSIs or 16% of total;
• well-known seasoned issuers with more than 5% U.S. trading volume and 5% or less U.S. ownership--8% of WKSIs or 5% of total; and
• other issuers with 5% or less U.S. ownership--15% of other issuers or 5% of total.

The proposed benchmarks do not take a "one size fits all" approach. Although any foreign private issuer may meet the public float condition if U.S. residents hold 5 percent or less of the issuer's worldwide public float, we have proposed an additional benchmark for a foreign company that is a well-known seasoned issuer. For the following reasons, we believe that a well-known seasoned issuer that is at or below the proposed U.S. trading volume threshold should be able to exit the registration and reporting system under Rule 12h-6 even though the percentage of its worldwide public float held by U.S. investors is greater than the public float benchmark applied to a non-well-known seasoned issuer.

It is more likely that a very large, well-followed foreign company will have a greater percentage of its shares held by U.S. residents than smaller foreign companies. Large companies, including those that are foreign private issuers, are included in various securities indices that are tracked by many U.S. institutional investors. Thus, a large foreign company may especially find it unduly difficult to terminate its Exchange Act reporting obligations, despite the lack of recent U.S. securities offerings and other transactions by that company, because a significant portion of its public float continues to be held by index-based U.S. investors.

In addition, in order to satisfy investor interest around the world as well as home country requirements, large foreign companies are more likely to provide a steady flow of financial and non-financial information that is easily accessible. Because of their extensive market following, this information is more likely to be the subject of analysis and comment. After a large foreign company's termination of Exchange Act reporting under proposed Rule 12h-6, it is likely that both this steady flow of information from the company and the ensuing analysis will continue, to the benefit of U.S. and other investors.

Although some foreign company representatives have proposed using a benchmark based solely on trading volume as the determinant of a foreign private issuer's ability to exit the Exchange Act reporting regime, we have declined to do so.⁶⁸ A benchmark based solely on trading volume could result in an inaccurate gauge of U.S. investor interest. For example, some U.S. investors, particularly large institutional investors, are more likely to purchase and sell securities of foreign well-known seasoned issuers and other foreign companies through foreign markets rather than U.S. markets. These U.S. investors may look to the information contained in a foreign private issuer's Exchange Act reports when investing in the foreign private issuer's home market. A benchmark based solely on U.S. trading volume as a percentage of worldwide trading volume would not capture these U.S. investors and, therefore, would understate the degree of U.S. interest in a foreign company's securities.

Moreover, some economists have noted that various securities markets measure trading volume differently. Accordingly, adoption of a benchmark that relies only on trading volume could result in overstating the trading volume of a particular foreign company's securities either in its home country or the United States.⁶⁹ Reliance solely on trading volume could also induce attempts to affect the trading volume of a foreign private issuer's securities in global markets in order to affect the determination of whether the issuer could exit the U.S. reporting system.

As U.S. trading volume increases as a percentage of the trading volume of a foreign company's securities in its primary trading market, so does the concern that U.S. investor interest in that foreign company's securities may be large enough to warrant establishing a stricter ownership threshold before the company could exit the Exchange Act reporting regime. In order to mitigate this concern, under the rule proposal, if a foreign well-known seasoned issuer has a U.S. average daily trading volume that is greater than 5 percent of its average daily trading volume in its primary trading market for a class of securities, it must have a smaller percentage of its worldwide public float held by U.S. investors than a foreign well-known seasoned issuer that has a U.S. average daily trading volume below 5 percent of its average daily trading volume in its primary trading market.

We have not proposed a similar benchmark based on trading volume for non-well-known seasoned issuers because, based on our review of data for non-well-known seasoned issuers, it does not appear that U.S. trading volume as a percentage of worldwide trading volume is a dispositive factor that would permit a significant number of these smaller issuers to terminate their Exchange Act registration and reporting under proposed Rule 12h-6. Instead we have proposed to permit a smaller foreign company to rely on the percentage of its worldwide public float held by U.S. investors as the primary benchmark governing whether it may terminate its Exchange Act registration and reporting.⁷⁰

In proposing these benchmark conditions, we believe that a foreign company that meets any of them is more likely to be one for which the protections afforded by the Exchange Act registration and reporting regime are no longer justified in light of the costs and burdens borne by the company in complying with that regime. We hold this view because the benchmarks suggest that the relative interest of U.S. investors in the foreign private issuer's securities would be low. Moreover, for such a foreign company, the U.S. securities markets would generally have played little role in determining the prevailing price of its equity securities in world markets. Consequently, once such a foreign company has exited the Exchange Act reporting system, there should be little disruption in the information flow relating to, and the global pricing of, its securities. U.S. investors would be able to look to a foreign company's primary trading market should they desire to trade the company's equity securities in an established securities market once it has exited the Exchange Act reporting system.⁷¹

A Canadian issuer that files its Exchange Act annual report on Form 40-F under the MJDS would be eligible to terminate its Exchange Act registration and reporting obligations under proposed Rule 12h-6. However, because a MJDS filer is not eligible to be a well-known seasoned issuer as defined under Rule 405 of the Securities Act, a MJDS filer would not be able to proceed under the well-known seasoned issuer provisions of proposed Rule 12h-6.⁷² However, a MJDS filer could take advantage of the non-WKSI conditions regarding a class of equity securities and the debt securities provision of proposed Rule 12h-6.

Comment Solicited

We solicit comment on the proposed U.S. trading volume and public float benchmarks. In particular, we solicit comment on the trading volume and ownership information developed by Commission staff and our conclusions derived from them, as discussed in this section, and also solicit additional information regarding trading volume and ownership data.

• Should we adopt a termination of reporting condition for well-known seasoned issuers that relies on two measures--trading volume and public float--as proposed?

• If not, should we adopt a benchmark that uses just trading volume, public float, or some other measure?
• Does the potential for manipulation of trading volume make it an inappropriate benchmark, either alone or in combination with other benchmarks?
• Should we instead adopt a benchmark that uses some combination of measures excluding trading volume?
• For example, should we adopt a condition requiring a foreign well-known seasoned issuer to have U.S. residents holding no more than a specified percentage, say 10 percent or 5 percent of its worldwide public float at the end of a recent 12 month period, and having U.S. resident shareholders numbering no greater than 1,000, 2,000, 3,000 or some other number? Should we adopt a similar condition for non-well-known seasoned issuers?
• Should we adopt a benchmark that requires a foreign private issuer to have a specified U.S. public float expressed in dollars rather than as a percentage of the issuer's worldwide public float?
• Should we adopt a benchmark that excludes using public float?
• Should we adopt one set of conditions for well-known seasoned issuers and another for foreign companies that are not well-known seasoned issuers, as proposed? Should we instead have one set of conditions that applies to all?
• Proposed Rule 12h-6 would use the same definition of well-known seasoned issuer as under Securities Act Rule 405. That definition contains various conditions in addition to the $700 million public float requirement. Should proposed Rule 12h-6 incorporate all of those conditions or just some of them?
• A company that is an "ineligible issuer" under Securities Act Rule 405 does not qualify as a well-known seasoned issuer. Should we require an "ineligible issuer" to meet the more stringent benchmarks under Rule 12h-6, as proposed?
• Should we preclude a MJDS filer from using the well-known seasoned issuer benchmarks, as proposed? Should we instead allow a MJDS filer to proceed under the well-known seasoned issuer benchmarks as long as it meets the $700 million public float requirement?
• Should the date of determination of well-known seasoned issuer status be a date within 120 days of filing the proposed Form 15F, as proposed?
• Should we use the "well-known seasoned issuer" definition at all as the basis for making distinctions between foreign private issuers regarding termination of reporting? Should we instead use the definition of "large accelerated filer", which we are adopting in a separate release?⁷³
• Should we develop another measure based on a higher public float (for example, $1 billion) or a lower public float (for example, $500 billion)? Should we rely on a $75 million public float threshold, which we have previously used as a benchmark for eligibility to engage in certain U.S. securities transactions?⁷⁴

We encourage commenters in this area specifically to support the use of other thresholds with information about a foreign private issuer's market following. With respect to trading volume information, the proposed rule would require a comparison between the United States and the issuer's primary trading market.

• Should we require the comparison of trading volume information in the United States with worldwide trading volume information instead of solely with trading volume information in the issuer's primary trading market?
• Do many foreign well-known seasoned issuers have significant trading volume activity in two or more markets, other than the United States, so that a benchmark based on U.S. trading volume as a percentage of worldwide trading volume would be more meaningful?
• Are many foreign well-known seasoned issuers subject to home country reporting standards that require disclosure of worldwide trading volume information? If so, should proposed Rule 12h-6 use worldwide trading volume information instead of primary trading market information as well?
• Should we adopt alternative conditions for a foreign well-known seasoned issuer depending upon whether the U.S. average daily trading volume of a foreign company's class of securities is no greater than 5 percent of the average daily trading volume of that class of securities in its primary trading market during a recent 12 month period, as proposed? Should the threshold percentage instead be larger than 5 percent? Should it be smaller than 5 percent?
• Should we adopt a different period than a "recent 12 month period"? For example, should we adopt a period that is longer than 12 months, say 18 or 24 months? Should we adopt a period that is shorter than 12 months, for example, 6 or 3 months?
• Should we adopt the dual 60-day windows for determining U.S. trading volume and U.S. percentage of ownership? Should the periods be longer or shorter?
• If we should adopt the proposed "5 percent of primary trading market trading volume" benchmark, should we also adopt the condition that a well-known seasoned issuer that meets this trading volume benchmark must have U.S. residents holding no more than 10 percent of the foreign company's worldwide public float at the end of the recent 12 month period, as proposed?
• Should we instead adopt a percentage that is greater than 10 percent, for example, 15 or 20 percent? Should we adopt a percentage that is less than 10 percent, for example, 5 or 7 percent?
• Similarly, should we adopt the condition that would permit a well-known seasoned issuer to terminate its Exchange Act reporting obligations as long as U.S. residents held no more than 5 percent of its worldwide public float at a date within 120 days of the filing date of the Form 15F even if its U.S. average trading volume was greater than 5 percent of the average trading volume in its primary trading market, as proposed?
• Should we instead adopt a public float percentage that is larger than 5 percent, for example, 7, 10 or 15 percent, or smaller than 5 percent, for example, 3 percent?
• Should we adopt the condition permitting a foreign company that is not a well-known seasoned issuer to terminate its Exchange Act reporting obligations as long as U.S. residents held no more than 5 percent of its worldwide public float at a date within 120 days of the filing date of the Form 15F, regardless of its U.S. trading volume, as proposed?
• If not, should we adopt a public float percentage that is greater than 5 percent, for example, 7 or 10 percent, or less than 5 percent, for example, 3 percent? We have proposed a single benchmark for non-well-known seasoned issuers based on the proportion of U.S. residents who hold their securities.
• Should we adopt dual benchmarks, based on trading volume and U.S. ownership, similar to the dual benchmarks proposed for well-known seasoned issuers?
• Does a single benchmark provide an adequate measure in determining when a non-well-known seasoned issuer may terminate its Exchange Act reporting obligations under the proposed scheme, or would dual benchmarks provide a more refined classification that is supported by data and experience?
• For example, should we adopt a condition that permits a non-well-known seasoned issuer to terminate its Exchange Act registration and reporting obligations if the U.S. average daily trading volume of its class of securities is no greater than a certain percentage, say 5 percent, of the average daily trading volume of that class of securities in its primary trading market during a recent 12 month period, and U.S. residents held no more than 5 percent of its worldwide public float at a date within 60 days of that recent 12 month period?
• If so, should either of the U.S. trading volume or U.S. public float thresholds be larger or smaller than 5 percent?

e. Alternative Threshold Record Holder Condition

Proposed Rule 12h-6(a)(6) would permit a foreign private issuer that could not meet one of the benchmarks in proposed Rule 12h-6(a)(4) or (5), but met the other conditions of the rule, to terminate its Exchange Act registration and reporting obligations with regard to a class of equity securities as long as that class of securities was held of record by less than 300 persons on a worldwide basis or less than 300 U.S. residents at a date within 120 days before the filing date of the Form 15F. This threshold record holder condition is similar to that found in current Rules 12g-4 and 12h-3. Those rules also permit a foreign private issuer to cease its reporting obligations if the class of securities is held by less than 500 persons on a worldwide basis or by less than 500 U.S. residents where the issuer's total assets have not exceeded $10 million on the last day of each of the issuer's most recent three fiscal years.⁷⁵ We have not proposed a similar 500 record holder condition because, based on current experience, we believe that foreign private issuers seldom use the current standard.

The purpose of this 300 record holder condition is to provide that the new exit rules for a foreign private issuer are no more rigorous than the current rules. A foreign private issuer that cannot meet one of the proposed benchmarks, but is eligible under the current 300 record holder standard, should be allowed to terminate its Exchange Act registration and reporting, assuming that it meets the other conditions of proposed Rule 12h-6(a).

Although similar to the current standard, the proposed alternative threshold record holder condition would offer advantages compared to the current exit rules. As discussed below, proposed Rule 12h-6 would adopt a counting method that limits the jurisdictions in which a foreign private issuer must search for records of its U.S. resident holders.⁷⁶ Moreover, in addition to enabling a foreign private issuer to terminate, rather than merely suspend, its section 15(d) reporting obligations regarding a class of securities, proposed Rule 12h-6 would impose a prior Exchange Act reporting requirement that is potentially shorter than that under current Rule 12h-3.⁷⁷

Given these advantages, if proposed Rule 12h-6 is adopted, we believe that few, if any, foreign private issuers would choose to proceed under the provisions of Rule 12g-4 or Rule 12h-3 that allow a foreign private issuer to terminate its registration of a class of securities under section 12(g) or suspend the duty to file reports under section 15(d) if the class of securities is held by less than 300 U.S. residents or by 500 U.S. residents and the issuer has had total assets not exceeding $10 million on the last day of each of its most recent three fiscal years.⁷⁸ Accordingly, we are proposing to amend these rules to eliminate the above provisions.

Comment Solicited

We solicit comment on proposed Rule 12h-6(a)(6).

• Should we permit an issuer that cannot meet the proposed benchmarks in proposed Rule 12h-6(a)(4) or (5) to terminate its Exchange Act registration and reporting as long as it has satisfied the other requirements of proposed Rule 12h-6 and has its class of equity securities held of record by less than 300 persons worldwide or by less than 300 U.S. resident holders, as proposed?
• Should we raise the record holder threshold to 500, 600, 750, 1,000 or some other number?
• Should we adopt a record holder threshold that is higher for a well-known seasoned issuer than a non-well-known seasoned issuer?
• Should we require a minimum total assets threshold in addition to a record holder threshold as under current Rules 12g-4 and 12h-3? For example, should we adopt the "less than 500 U.S. residents and $10 million asset" standard currently provided under Rules 12g-4 and 12h-3? If so, should we require that the asset test be met for only the registrant's most recently completed fiscal year or for two or more previous years?
• Should we adopt an asset threshold that is more than $10 million, for example, $25, 50, 75, or 100 million? In conjunction with an assets test, should we adopt a record holder threshold that is greater than 500, for example, 750, 1,000, 2,000, or 3,000?
• Should we amend Rules 12g-4 and 12h-3 to eliminate the provisions permitting a foreign private issuer to cease its reporting obligations, as proposed? Should we retain these provisions in addition to adopting proposed Rule 12h-6?

3. Conditions for Debt Securities Registrants

a. Section 15(d) Reporting Requirement

Proposed Rule 12h-6 would require a foreign private issuer to meet the minimum Exchange Act reporting requirement under section 15(d) before it could terminate its section 15(d) reporting obligations regarding a class of debt securities.⁷⁹ Under section 15(d), an issuer cannot suspend its Exchange Act reporting obligations even if its record holders have fallen below 300 during the year in which the Securities Act registration statement that triggered the section 15(d) reporting obligations became effective. Consequently, section 15(d) requires that, at a minimum, a foreign private issuer must file one annual report pursuant to section 13, and furnish Form 6-K reports until it has filed that one annual report, before it can effect a suspension based upon the number of its record holders.

Proposed Rule 12h-6 would impose this minimum reporting requirement on a debt securities registrant rather than a longer period, as would be required for an equity securities registrant, in order to prevent the new exiting standard from being more burdensome than is currently the case for debt securities registrants under section 15(d). Because debt securities offerings typically result in fewer securities holders than equity securities offerings, it is generally easier for a debt securities registrant to fall below the 300 record holder threshold. Consequently, on several occasions, debt securities registrants have filed Form 15 to suspend their section 15(d) reporting obligations after having filed only one Exchange Act annual report. Proposed Rule 12h-6 would permit this practice to continue.

Comment Solicited

We solicit comment on proposed Rule 12h-6's Exchange Act reporting requirement for debt securities registrants.

• Should we permit a foreign private issuer to terminate its section 15(d) reporting obligations regarding a class of debt securities after filing only one Exchange Act annual report and furnishing Form 6-Ks only up to the filing of that annual report, as proposed? Should we require a debt securities registrant to file at least two annual reports and furnish Form 6-Ks until it has filed its second annual report, as we have proposed to require for an equity securities registrant, before it can terminate its section 15(d) reporting obligations?
• Should we permit a foreign private issuer only to suspend rather than terminate its section 15(d) obligations regarding certain classes of debt securities? If so, what are those classes of debt securities?

b. Threshold Record Holder Condition Proposed Rule 12h-6 would require the record holders of a foreign private issuer's debt securities to be either less than 300 persons on a worldwide basis or less than 300 U.S. residents as of a date within 120 days before the filing of the Form 15F.⁸⁰ As with the alternative threshold record holder condition for equity securities registrants, we have based these thresholds on current statutory and rule conditions governing an issuer's suspension of reporting under section 15(d).⁸¹ Accordingly, the proposed record holder condition for termination of a debt securities registrant's reporting obligations would in most instances not pose any additional burdens.

Rule 12h-3 alternatively permits a foreign private issuer to suspend its section 15(d) reporting obligations if its class of debt securities is held of record by less than 500 U.S. residents and its total assets have not exceeded $10 million on the last day of each of the issuer's three most recent fiscal years.⁸² We have not proposed to adopt this alternative condition for a debt securities registrant under proposed Rule 12h-6 because we believe that most foreign private issuers that are debt securities registrants

would likely exceed that asset threshold.⁸³ For purposes of Rule 12h-6, the term "debt securities" refers not only to traditional debt securities but also to non-convertible preferred securities, the holders of which are entitled to a preference in payment of dividends and in distribution of assets on liquidation, dissolution or winding up of the issuer, but are not entitled to participate in residual earnings or assets of the issuer (referred to as "non-participating preferred stock"). The preferred securities have market characteristics more similar to traditional debt securities than to equity securities. This treatment of non-participating preferred stock under Rule 12h-6 is consistent with the treatment under other rules under the federal securities laws.⁸⁴

Comment Solicited

We solicit comment on proposed Rule 12h-6's threshold record holder condition for debt securities registrants.

• Should we require that the subject class of debt securities be held of record by less than 300 persons on a worldwide basis or less than 300 U.S. residents, as proposed?
• Should we increase the record holder threshold to, for example, less than 500, 750 or 1,000 persons on a worldwide basis or who are U.S. residents?
• If we do increase the threshold number of record holders, should we also impose a threshold asset standard? Should we adopt the "less than 500 U.S. residents and $10 million asset" standard currently provided under Rule 12h-3? If so, should we require that the asset test be met for only the registrant's most recently completed fiscal year?
• Should we adopt an asset threshold that is more than $10 million, for example, $25, 50, 75, or 100 million? If so, should we adopt a record holder threshold as well that is greater than 500?
• Should we instead adopt a record holder condition that would vary depending on whether a debt securities registrant was a well-known seasoned issuer?

We also solicit comment on the definition of debt securities under proposed Rule 12h-6.

• Should we treat as debt securities non-participating preferred securities, as proposed?
• Are there any other types of debt securities that should be included or excluded from the proposed definition of debt securities?

4. Counting Method In order to facilitate a foreign private issuer's determination regarding whether U.S. residents hold no more than the applicable threshold percentage of its worldwide public float, or whether the number of its equity or debt securities record holders meet the applicable threshold condition, proposed Rule 12h-6 would permit an issuer to use a method of calculating record ownership that is substantially similar to that we have adopted under the exemptive rules for cross-border rights offerings, exchange offers and business combinations,⁸⁵ as well as under the definition of foreign private issuer.⁸⁶ After instructing an issuer to use the method of calculating record ownership under Rule 12g3-2(a),⁸⁷ proposed Rule 12h-6(e) would provide that an issuer may limit its inquiry regarding the amount of securities represented by accounts of customers resident in the United States to brokers, dealers, banks and other nominees located in the United States, the foreign private issuer's jurisdiction of incorporation, legal organization or establishment, and the jurisdiction of the foreign private issuer's primary trading market if different from the issuer's jurisdiction of incorporation, legal organization or establishment.⁸⁸

The purpose of this provision is to limit the number of jurisdictions in which an issuer must search for records regarding its U.S. resident shareholders. The rule would permit an issuer to restrict its search to those jurisdictions that represent the most probable locations for brokers, dealers, banks and other nominees to hold the issuer's securities on behalf of U.S. customers.⁸⁹

Proposed Rule 12h-6(e) would further provide that, if, after reasonable inquiry, an issuer is unable without unreasonable effort to obtain information about the amount of securities represented by accounts of customers resident in the United States, it may assume that the customers are the residents of the jurisdiction in which the nominee has its principal place of business. However, the proposed rule would further instruct that an issuer must count securities as owned by U.S. holders when publicly filed reports of beneficial ownership or information that is otherwise provided to the issuer indicates that the securities are held by U.S. residents.⁹⁰

We are aware that domestic and foreign issuers use third party service providers for the purpose of obtaining information relating to the identification of their security holders. In general, the primary purpose of obtaining this information is usually not to satisfy a regulatory requirement, but to assist company management in communicating with security holders and otherwise to promote good investor relations. Nonetheless, foreign private issuers currently use these services for the purpose of determining whether they fall below the current 300 U.S. holder threshold.

In light of the difficulties associated with determining levels of U.S. ownership of securities, we believe it is appropriate to permit foreign private issuers to rely on a third party information service provider that is in the business of supplying security holder information to issuers generally. Accordingly, proposed Rule 12h-6(e) would provide that, when calculating the number of its U.S. resident security holders under proposed Rule 12h-6, a foreign private issuer could rely in good faith on the assistance of an independent information services provider that in the regular course of business assists issuers in determining the number of, and collecting other information regarding, their shareholders.⁹¹ By allowing a foreign private issuer to retain an expert when making the determination of the extent to which its securities are held by U.S. residents, this proposed provision should help increase the accuracy of that determination while reducing the burden posed by it for the issuer and its employees.

Comment Solicited

We solicit comment on proposed Rule 12h-6(e).

• Should we permit an issuer to restrict its inquiry regarding the number of its U.S. resident holders to the jurisdictions referenced in that rule, as proposed?
• Are there other jurisdictions in which an issuer must search for evidence of U.S. ownership of its securities when calculating the percentage of its worldwide public float held by U.S. holders or the number of U.S. residents who hold its equity or debt securities under proposed Rule 12h-6?
• Is there another method of accurately determining the percentage of an issuer's worldwide public float held by U.S. residents that does not require using the counting method in Rule 12g3-2(a)?
• Should we permit a foreign private issuer to exclude institutional investors when determining the number of its U.S. resident shareholders?
• Should we permit a foreign private issuer to rely in good faith on the assistance of an independent information services provider when making its public float determination or calculating the number of U.S. residents who hold its equity or debt securities, as proposed? Should we also allow an issuer to rely on an information services provider when calculating the number of its record holders worldwide?

We understand that some foreign jurisdictions have laws that provide an established and enforceable means for a public company to obtain information about their shareholders.⁹²

• Should we allow a foreign private issuer to rely on information obtained through these foreign statutory or code provisions when calculating the percentage of its worldwide public float held by U.S. residents or the number of its U.S. resident equity or debt holders? If so, should we permit reliance on only certain specified foreign provisions? Interested persons are requested to provide detailed information about such foreign provisions in their comments.

5. Form 15F

Like our current exit rules, proposed Rule 12h-6 would require a foreign private issuer to file a form certifying that it meets the requirements for ceasing its Exchange Act reporting obligations. By signing and filing proposed new Form 15F,⁹³ a foreign private issuer would be certifying that:

• it meets all of the conditions for termination of Exchange Act reporting specified in Exchange Act Rule 12h-6 (17 CFR 240.12h-6); and

• there are no classes of securities other than those that are the subject of the Form 15F regarding which the issuer has Exchange Act reporting obligations.

Unlike current Form 15, proposed new Form 15F would require a foreign private issuer to provide disclosure regarding several items in order to provide investors with information regarding an issuer's decision to terminate its Exchange Act reporting obligations. That information would also help Commission staff to assess whether the issuer meets the requirements for termination of reporting under Rule 12h-6. We believe that this disclosure approach is appropriate because of the multiple conditions that a foreign company would have to meet under proposed Rule 12h-6. Moreover, some of the proposed conditions, such as the trading volume and public float benchmarks, have not previously been the subject of mandatory disclosure under our Exchange Act reporting regime. Accordingly, without the proposed Form 15F items, investors would not be informed about, and Commission staff would not be able to assess readily, whether a foreign company was eligible to terminate its reporting under proposed Rule 12h-6.

The proposed Form 15F items would solicit information regarding:

• an issuer's Exchange Act reporting history;
• when it last sold securities in the United States other than those excluded from consideration under proposed Rule 12h-6;
• the primary trading market for its equity securities being deregistered;
• whether it is a well-known seasoned issuer;
• trading volume data for a well-known seasoned issuer's securities, both in the United States and in its primary trading market;

• its worldwide public float and the portion held by U.S. residents determined pursuant to the proposed rules with respect to the equity securities being deregistered, if applicable;
• the number of its equity or debt securities record holders, if applicable; and
• the classes of equity and debt securities, if any, that are the subject of the Form 15F.⁹⁴

As under the current deregistration regime, filing of the Form 15F would immediately suspend the issuer's Exchange Act reporting obligations regarding the subject class of securities and commence a 90-day waiting period.⁹⁵ During this period, Commission staff may review the Form 15F. If, at the end of the 90-day period, the Commission has not objected to the filing, the suspension would automatically become a termination of registration and reporting. If the Commission denies the Form 15F or the issuer withdraws it, within 60 days of the date of the denial or withdrawal, the issuer would be required to file or submit all reports that would have been required had it not filed the Form 15F.⁹⁶

We are also proposing to revise the rules governing the Commission's delegated authority to permit staff of the Division of Corporation Finance to accelerate the effectiveness of an issuer's termination of registration and reporting under proposed Rule 12h-6 prior to the 90th day at the issuer's request. The issuer would have to make this request in writing and file it on EDGAR.⁹⁷ Nevertheless, Division of Corporation Finance staff may submit requests to accelerate the effectiveness of an issuer's termination of registration and reporting pursuant to proposed Rule 12h-6 to the Commission for consideration, as appropriate.

We are aware that in today's investing and technological environment, it would be overly burdensome and costly to require foreign private issuers to assess the level of U.S. ownership of their securities with absolute certainty. Accordingly, we have proposed methods that should provide a reasonable level of certainty to the process by which a foreign private issuer determines the level of U.S. ownership of its securities.⁹⁸

As proposed, after filing its Form 15F, an issuer would have no continuing obligation to make inquiries or perform other work concerning the information contained in the Form 15F, including its assessment of U.S. ownership of its securities. However, proposed Form 15F would require an issuer to undertake to withdraw its Form 15F prior to the date of its effectiveness if it becomes aware of information that causes it reasonably to believe that U.S. holders held more than the applicable threshold percentage of its worldwide public float or exceeded the threshold number of debt securities record holders, or otherwise causes the issuer no longer to believe that it meets the conditions for terminating its Exchange Act reporting obligations under proposed Rule 12h-6. Comment Solicited We solicit comment on the proposed Form 15F.

• Should the Form 15F constitute an issuer's certification regarding each of the specified conditions, as proposed?
• Are there some conditions that we should exclude from the proposed Form 15F certification? Are there other conditions that we should include in the proposed Form 15F certification?
• Should we request an issuer to provide information on each of the enumerated items in the Form 15F, as proposed? Should we revise or omit some or all of the items on the proposed Form 15? Are there any other items that should be included on the proposed Form 15F?
• Should we adopt a 90-day waiting period following the filing of the Form 15F before termination of reporting could become effective, as proposed? Should we instead adopt a shorter or longer period?
• Should we adopt a 60-day period in which an issuer would have to file or submit all required reports should its Form 15F be denied or withdrawn, as proposed? Should we adopt instead a shorter or longer period?
• In the ordinary course, we anticipate that terminations pursuant to proposed Form 15F will become effective 90 days after filing, without Commission action. Should proposed Rule 12h-6 provide for some required processing or action by the Commission before any Form 15F termination of reporting would become effective?
• Should we require an issuer to provide the undertaking, as proposed? Are there other undertakings that we should require on Form 15F? For example, should we also require an issuer to undertake to issue a press release in the United States announcing its withdrawal of the Form 15F? Should we not require any undertakings at all?
• Are there other means to address the possibility of temporary shifts in an issuer's security holders to outside the United States? For example, should we require a foreign private issuer to assess the number of its U.S. security holders at the beginning and end of a three or six-month period before filing a Form 15F?
• Are there other means to address the difficulties associated with determining the level of U.S. ownership of a foreign private issuer's securities through book-entry systems and nominee holders?

6. Notice Requirement

As a condition to termination of reporting, proposed Rule 12h-6 would require a foreign private issuer, not later than 15 business days before it files its Form 15F, to publish a notice in the United States disclosing its intent to terminate its Exchange Act registration and reporting obligations regarding each class of securities under section 12(g) or section 15(d) or both. The issuer would be required to publish the notice through a means, such as a press release, reasonably designed to provide broad dissemination of the information to the public in the United States.⁹⁹ The issuer would be required to submit a copy of the notice either under cover of a Form 6-K, before or at the time of filing of the Form 15F, or as an exhibit to the Form 15F.¹⁰⁰ The primary purpose of this provision is to alert U.S. investors who have purchased the issuer's securities about the intended exiting of the issuer from the Exchange Act registration and reporting system. The notice requirement would also serve to alert investors and other U.S. market participants that, in the future, they will have to look to the issuer's home country documents, and not Exchange Act reports, for information regarding the issuer. Comment Solicited We solicit comment regarding proposed Rule 12h-6(c)'s notice requirement.

• Should we require a foreign private issuer to issue a notice, such as a press release, disclosing its intention to terminate its Exchange Act reporting obligations, as proposed?
• If so, should we prescribe the form or content of the notice other than that it be broadly disseminated in the United States?
• Should a foreign private issuer be permitted to submit a copy of the notice to the Commission either prior to or at the time of filing the Form 15F?
• Does the filing of the Form 15F provide enough notice regarding a foreign private issuer's intentions to make the notice requirement unnecessary?

• Should a foreign private issuer be required to issue a notice upon the effectiveness of the termination of its Exchange Act registration and reporting obligations under proposed Rule 12h-6?

C. Proposed Amendment Regarding Rule 12g3-2(b)

Under Rule 12g3-2(b), a foreign private issuer may avoid registering under Exchange Act Section 12(g) if, prior to incurring a registration obligation, it establishes and maintains the exemption by submitting to the Commission various materials that are made public in its home market. As part of our proposals, we are proposing two amendments under this exemption:

• we are proposing to amend Rule 12g3-2(d), which currently prohibits a foreign private issuer from availing itself of the Rule 12g3-2(b) exemption for a period of 18 months after terminating its registration under Section 12(g) or an active or suspended reporting obligation under Section 15(d);¹⁰¹ and
• we are proposing new Rule 12g3-2(e), which would facilitate compliance with the information submission requirements by foreign private issuers that terminate their reporting obligations under proposed Rule 12h-6 by having them publish required materials on their Internet Web sites instead of submitting materials to the Commission on an ongoing basis.

The proposed amendment to Rule 12g3-2(d) would except from its 18 month prohibition a foreign private issuer that receives the Rule12g3-2(b) exemption pursuant to new proposed Rule 12g3-2(e). As proposed,a foreign private issuer that has filed a Form 15F with regard to a class of equity securities would receive the Rule 12g3-2(b) exemption immediately upon the effective date of the termination of its Exchange Act reporting obligations pursuant to Rule 12h-6.¹⁰² Thereafter, a foreign private issuer would have to publish in English on its Internet Web site the home country materials that it is required to furnish on a continuous basis¹⁰³ under Rule 12g3-2(b).¹⁰⁴ If a foreign private issuer's primary trading market has an electronic information delivery system that is generally available to the public, the issuer instead could publish its home country materials in English through that system.¹⁰⁵ Proposed Exchange Act Rule 12g3-2(e) would clarify that, at a minimum, in order to satisfy the conditions of the exemption, a foreign private issuer would have to publish electronically English translations of the following home country documents:

• its annual report, including or accompanied by annual financial statements;
• interim reports that include financial statements;
• material press releases; and

• all other material communications and documents distributed directly to security holders of each class of securities to which the exemption relates.¹⁰⁶

Proposed Exchange Act Rule 12g3-2(e) would further condition the exemption on requiring a foreign private issuer to disclose in its Form 15F the address of its Internet Web site or of the electronic information delivery system on which it will publish its home country materials.¹⁰⁷ The purpose of this proposed extension of Rule 12g3-2(b) is to provide U.S. investors with access to material information about an issuer of equity securities following its termination of reporting pursuant to proposed Rule 12h-6.¹⁰⁸ In addition, an issuer would be able to maintain a sponsored ADR facility with respect to its securities.¹⁰⁹ It also would facilitate resales of that issuer's securities to qualified institutional buyers under Rule 144A.¹¹⁰ Moreover, having a foreign private issuer's key home country documents posted in English on its web site would assist U.S. investors who are interested in trading the issuer's securities on its home country exchange.¹¹¹

The proposed extension of Rule 12g3-2(b) would apply to both a class of equity securities formerly registered under section 12(g) and one that formerly gave rise to section 15(d) reporting obligations.¹¹² The Rule 12g3-2(b) exemption received under proposed Rule 12g3-2(e) would remain in effect for as long as the foreign private issuer satisfied the rule's electronic publication conditions or until the issuer registered a new class of securities under section 12 or incurred section 15(d) reporting obligations by filing a new Securities Act registration statement, which became effective.¹¹³ However, absent a new effective Securities Act registration statement, under proposed Rule 12h-6, the termination of reporting obligations under section 15(d) would be permanent and would not be conditioned on continued maintenance of the Rule 12g3-2(b) exemption.

Currently foreign companies maintain the Rule 12g3-2(b) exemption by submitting to the Commission on an ongoing basis the material required by the rule.

This material may only be submitted in paper format.¹¹⁴ Although the Commission's EDGAR database contains an entry signifying the receipt of paper documents, materials received in paper are not accessible through the EDGAR system. Because paper submissions are more difficult to access, we have proposed the amendment to Rule 12g3-2, which relies on electronic access to a foreign company's home country securities documents, although not through the Commission's electronic database.

Comment Solicited

We solicit comment on the proposed amendment to Rule 12g3-2(d) and on proposed new Rule 12g3-2(e).

• Should we require a foreign private issuer that has terminated its Exchange Act reporting with regard to a class of equity securities under proposed Rule 12h-6 to comply with the home country publication requirements under Rule 12g3-2(b) by immediately granting the issuer the Rule 12g3-2(b) exemption upon the effectiveness of its termination of reporting, as proposed?
• Should we instead permit but not require such a foreign private issuer to apply for the Rule 12g3-2(b) exemption following termination of reporting under proposed Rule 12h-6?
• Or should we leave unamended Rule 12g3-2(d) and require a foreign private issuer to wait 18 months before it could apply for the Rule 12g3-2(b) exemption?

• If we should extend the Rule 12g3-2(b) exemption to a foreign private issuer that has terminated its Exchange Act reporting under proposed Rule 12h-6, should we require the issuer to publish electronically on its Internet Web site the home country documents required to be furnished under Rule 12g3-2(b)?
• If so, should we also allow the issuer to publish its home country documents through an electronic information delivery system in its primary trading market?
• Should we permit the issuer either to publish the required home country documents electronically or submit them in paper to the Commission?
• Should we require the issuer only to submit the required home country documents in paper to the Commission as is currently the requirement for non-Exchange Act reporting companies that have received the Rule 12g3-2(b) exemption?
• Should we require a foreign private issuer that has received the Rule 12g3-2(b) exemption under proposed Rule 12g3-2(e) to publish electronically English translations of the home country documents listed in proposed Note 1 to that proposed rule?
• Should we exclude any of the specified home country documents from the English translation and electronic publication condition? Are there other home country documents not mentioned in the proposed rule that should be translated in English and published electronically?

• Should we require the issuer to post its home country documents in English on its Internet Web site for a specified period of time? For example, should the issuer be required to keep its annual report in English available on its Internet Web site for at least 1, 2 or 3 or more years? Should the issuer be required to keep its material press releases in English for at least 6 months or a year?

As proposed, foreign companies that obtain the Rule 12g3-2(b) exemption by filing a Form 15F would be able to maintain the exemption through their Web site postings without the need for submitting material to the Commission. We would continue to require all other foreign companies that have the Rule 12g3-2(b) exemption to submit the required materials in paper to the Commission. In light of developments relating to information dissemination and information technology, we solicit comments generally on the Exchange Act exemptive scheme for foreign private issuers.

• Should we modify the registration thresholds under Rule 12g3-2(a) from 300 U.S. resident holders to some other measure?
• Does the Rule 12g3-2(b) exemption continue to serve a useful purpose for investors seeking information on foreign companies?
• Should we consider methods of compliance with Rule 12g3-2(b), such as Web site postings, as an alternative to the submission of paper documents to the Commission? How would such alternative methods operate in practice, and how would Commission staff oversee compliance?

• Does oversight by Commission staff in this area continue to be necessary or appropriate and serve to further investor protection? Is such oversight necessary or appropriate for a company that has obtained the Rule 12g3-2(b) exemption after terminating its reporting obligations under proposed Rule 12h-6?

General Request for Comments

We solicit comment on proposed Rule 12h-6, proposed Form 15F, proposed amendments to Rules 12g-4, 12h-3, 12g3-2(d) and 12g3-2(e) as well as to all other aspects of the proposed rule amendments. Here and throughout the release, when we solicit comment, we are interested in hearing from all interested parties, including members and representatives of the investing public, representatives of foreign companies and foreign industry groups, representatives of broker-dealers, domestic issuers, and other participants in U.S. securities markets. We are further interested in learning from all parties what aspects of the rule proposal they deem essential, what aspects they believe are preferred but not essential, and what aspects they believe should be modified.

III. PAPERWORK REDUCTION ACT ANALYSIS

This rule proposal contains "collection of information" requirements within the meaning of the Paperwork Reduction Act of 1995 ("PRA").¹¹⁵ We are submitting our proposal to the Office of Management and Budget ("OMB") for review in accordance with the PRA.¹¹⁶ The titles of the affected collection of informations are Form 20-F (OMB Control No. 3235-0288), Form 40-F (OMB Control No. 3235-0381), Form 6-K (OMB Control No. 3235-0116), and proposed new Form 15F.¹¹⁷ An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information such as Form 20-F or proposed new Form 15F unless it displays a currently valid OMB control number. Compliance with the disclosure requirements of proposed Form 15F and proposed Rule 12h-6, which will affect the above collections of information, will be mandatory.

Form 20-F sets forth the disclosure requirements for a foreign private issuer's annual report and registration statement under the Exchange Act as well as many of the disclosure requirements for a foreign private issuer's registration statements under the Securities Act. The Commission adopted Form 20-F pursuant to the Exchange Act and the Securities Act in order to provide investors with information about foreign private issuers that have registered securities