FOR IMMEDIATE RELEASE 2002-53 SECURITIES AND EXCHANGE COMMISSION ANNOUNCES RESULTS OF APRIL 11, 2002 OPEN MEETING Washington, DC, April 11, 2002 - The Securities and Exchange Commission (SEC) today voted 3-0 on the following matters: * The Commission will issue for comment its proposals to accelerate the periodic report filing dates for domestic issuers and to require disclosure concerning Web site access to these reports. The proposals call for o Quarterly reports on Form 10-Q to be filed within 30 calendar days after quarter end instead of the current 45 days; and o Annual reports on Form 10-K to be filed within 60 calendar days after fiscal year end instead of the current 90 days. The proposals would accelerate these due dates only for domestic reporting companies that have: o A public float of at least $75 million; o Been subject to the Exchange Act reporting requirements for at least 12 calendar months; and o Previously filed at least one annual report on Form 10-K. The proposals would also require companies subject to the accelerated filing deadlines to disclose in their Form 10-K filings how investors can access company filings. A company will have to disclose: o Whether it makes its periodic reports available free of charge on its Web site no later than the same day such material is electronically filed with or furnished to the Commission o If the company does not make its filings available on its Web site, the reasons why; o Disclosure of the company's Web site address, if it has one; and o Other information regarding availability of the company's filings, including whether the company will provide electronic or paper copies of its filings free of charge upon request. Comments on these proposals are due within 30 days after publication in the Federal Register. * The Commission will issue for comment its proposed amendments to Form 8-K under the Securities Exchange Act of 1934, requiring companies to report transactions by executive officers and directors. These amendments respond to investors' needs for timely disclosure on EDGAR of transactions and other arrangements relating to executive officers and directors. The proposals would require domestic companies with a class of equity security registered under Section 12 of the Exchange Act to report on Form 8-K information about: o Executive officers' and directors' transactions in company equity securities (including derivative securities transactions and transactions with the company); o Executive officers' and directors' plans and other arrangements for the purchase or sale of company equity securities intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c); and o Loans of money to directors and executive officers made or guaranteed by the company or an affiliate of the company. Generally, reports of transactions and loans with an aggregate value of $100,000 or more would be due within two business days. Reports of transactions under $100,000 and some categories of transactions would be due by the close of business on the second business day of the following week. However, reports of transactions and loans with an aggregate value less than $10,000 would be deferrable until the aggregate cumulative value of unreported events for the same director or executive officer exceeds $10,000. Comments on these proposals are due within 60 days after publication in the Federal Register. * The Commission adopted amendments to the definitions of "equity security." These definitions are contained in Rule 405 under the Securities Act of 1933 and Rule 3a11-1 under the Securities Exchange Act of 1934 to include security futures. These changes to SEC rules conform them to statutory changes to the definitions made by the Commodity Futures Modernization Act of 2000. * The Commission will issue its proposed rule amendments that would allow online investment advisers to register with the Commission, relieving them of the time and costs associated with state-by-state registration for public comment. The amendments would apply to Internet-based advisers that provide substantially all of their investment advice through interactive Web sites where clients can enter their personal financial information and receive personalized investment advice based on a series of computer algorithms. Because online investment advisers typically do not manage client assets, they are currently ineligible for SEC registration, which requires that advisers manage at least $25 million. As a result, according to SEC staff cost benefit analysis, Internet-based firms may need to spend $50,000 a year to register in every state and comply with varying state law requirements. In recommending the proposed amendments to the Commission, the Division noted that the demand for Internet-based investment advice could grow in the next several years as employers respond to the increasing demand for independent advice from their pension plan participants. Comments on these proposals are due within 45 days after publication in the Federal Register. * The Commission adopted a new Form N-6 and amended Form N-1A. Adoption of Form N-6 will help investors better understand the fees, risks and benefits of variable life insurance policies. Form N-6 will, for the first time, provide a form specifically tailored for variable life insurance to be used for registration under the Investment Company Act of 1940 and the Securities Act of 1933. Previously, variable life insurance policies used forms designed for other investment company products. Premium payments for variable life insurance policies are invested in mutual funds, and the policies' cash values and death benefits depend on the funds' performance. In recent years, variable life insurance has become an increasingly important segment of the insurance industry, with an estimated $45.6 billion invested in variable life insurance policies. Beginning in December 2002, Form N-6 will be required for registration of new variable life insurance policies, and provide the following benefits: o Reducing Complex and Lengthy Prospectus Disclosure - Form N-6 streamlines variable life insurance prospectus disclosure by adopting a two-part format consisting of a simplified prospectus and a Statement of Additional Information containing more extensive information that investors may obtain upon request. o Tailored Registration Form - Form N-6 eliminates requirements in the current registration forms that are not relevant to variable life insurance and includes items specifically addressed to variable life insurance policies. o Standardized Fee Table - Form N-6 requires a uniform, tabular presentation of fees and charges in order to improve disclosure of the often-complex costs associated with variable life insurance policies. The Commission also adopted a conforming amendment to the fee table of Form N-1A, the registration form used by mutual fund investment options for variable life insurance and variable annuity contracts. The amendment will ensure that variable life insurance investors have access to complete information about fees and expenses. * The Commission also proposed amendments to the registration form for variable annuity contracts, Form N-4. The amendments would conform disclosure of the expenses of the mutual fund investment options in the fee table to the format of Form N-6. Comments on this proposal are due within 45 days after publication in the Federal Register.