Requirements for Arthur Andersen LLP Auditing Clients

SECURITIES EXCHANGE ACT OF 1934
Release No. 34-45589 / March 18, 2002

ORDER UNDER SECTION 36 OF THE SECURITIES EXCHANGE ACT OF 1934 GRANTING EXEMPTIONS FROM CERTAIN PROVISIONS OF THE ACT AND RULES THEREUNDER

To assure a continuing and orderly flow of information to investors and the U.S. capital markets and to minimize any potential disruptions that may occur in light of the circumstances surrounding Arthur Andersen LLP ("Andersen"), the Commission finds that the exemptions set forth below are necessary and appropriate in the public interest and consistent with the protection of investors.1

I. Accordingly, IT IS ORDERED, pursuant to Section 36 of the Securities Exchange Act of 1934 (the "Exchange Act"), that any one or more of the provisions of Section I. of this order shall apply to any issuer:

• Whose report, registration statement, amendment or other documents referenced in this order will include financial statements the examination or review of which Andersen (or a foreign affiliate of Andersen) had been engaged, on or after March 14, 2002, as the independent public accountant;
• That, on or before March 14, 2002, had not obtained a manually signed audit report from Andersen (or a foreign affiliate of Andersen) in respect of those financial statements (or a review report in the case of interim financial statements);
• That is unable to obtain from Andersen (or a foreign affiliate of Andersen) or elects not to have Andersen (or a foreign affiliate of Andersen) issue a manually signed audit report in respect of those financial statements (or a review in the case of interim financial statements); and
• That is not a "blank check company" as defined in Rule 419(a)(2) under the Securities Act of 1933.

The review referenced above is a review in accordance with Rule 10-01(d) of Regulation S-X (or Item 310(b) of Regulation S-B for small business issuers, as defined in Item 10(a)(1) of Regulation S-B).

1. Annual Reports on Form 10-K/Form 10-KSB. Notwithstanding any other Commission rule or regulation, an issuer that has a fiscal year ending between and including November 30, 2001 and April 15, 2002 that is required to file an annual report on Form 10-K or Form 10-KSB may file its annual report for that fiscal year under the conditions below.

Conditions.

(a) The issuer timely files its annual report on Form 10-K or Form 10-KSB within the period specified in the appropriate form (including any additional period for filing the report if the issuer relies on Exchange Act Rule 12b-25) responding to all items required by the appropriate form, but with unaudited financial statements for those financial statements as to the examination of which Andersen (or a foreign affiliate of Andersen) had been engaged as the independent public accountant;

(b) The issuer provides the disclosure reflecting the guidance included in Temporary Note 2T to Article 3 of Regulation S-X in the report; and

(c) The issuer files an amendment to the report within 60 days of the original due date of the report (excluding any additional period for filing the original report if the issuer relied on Exchange Act Rule 12b-25 for the filing of that report), that presents:

(1) The financial statements audited by an independent public accountant other than Andersen (or a foreign affiliate of Andersen);

(2) If the original filing was on Form 10-K and Andersen (or a foreign affiliate of Andersen) had been engaged as the independent public accountant to examine the issuer's financial statements, selected financial data required by Item 6 of Form 10-K based on the audited financial statements;

(3) A discussion of any material changes from the unaudited financial statements filed originally; and

(4) Any other section of the annual report that should be amended, including without limitation, Management's Discussion and Analysis of Financial Condition and Results of Operations, to reflect any changes in the financial statements so filed by amendment.

2. Quarterly Reports on Form 10-Q/Form 10-QSB. Notwithstanding any other Commission rule or regulation, an issuer that has a fiscal quarter ending between and including January 26, 2002 and June 15, 2002 that is required to file quarterly reports on Form 10-Q or Form 10-QSB may file its quarterly report for those fiscal quarters under the conditions listed below.

Conditions.

(a) The issuer timely files its quarterly report on Form 10-Q or Form 10-QSB within the period specified in the appropriate form (including any additional period for filing the report if the issuer relies on Exchange Act Rule 12b-25) responding to all items required by the appropriate form, but with interim financial statements that have not been reviewed by an independent public accountant in accordance with Rule 10-01(d) of Regulation S-X (or Item 310(b) of Regulation S-B for issuers filing on Form 10-QSB);

(b) The issuer provides disclosure in the report similar to that reflected in the guidance included in Temporary Note 2T to Article 3 of Regulation S-X, as applicable;

(c) If upon completion of the review by an independent public accountant in accordance with Rule 10-01(d) of Regulation S-X (or Item 310(b) of Regulation S-B for issuers filing on Form 10-QSB) there is a change to the interim financial statements, the issuer must file an amendment to the report upon completion of the review presenting:

(1) The interim financial statements reviewed by an independent public accountant other than Andersen (or a foreign affiliate of Andersen);

(2) A discussion of any material changes from the unreviewed financial statements filed originally; and

(3) Any other section of the quarterly report that should be amended, including without limitation, Management's Discussion and Analysis of Financial Condition and Results of Operations, to reflect any changes in the financial statements so filed by amendment; and

(d) If upon completion of the review there is not a change to the interim financial statements, the issuer must state in its quarterly report for the immediately succeeding fiscal quarter that the interim financial statements for the previous quarter had subsequently been reviewed by an independent public accountant other than Andersen (or a foreign affiliate of Andersen), but no report of that independent public accountant need be presented.

3. Annual Reports on Form 20-F. Notwithstanding any other Commission rule or regulation, a foreign private issuer that has a fiscal year ending between and including August 31, 2001 and April 15, 2002 that is required to file an annual report on Form 20-F may file its annual report on Form 20-F for that fiscal year under the conditions listed below.

Conditions.

(a) The foreign private issuer timely files its annual report on Form 20-F within the period specified in Form 20-F (including any additional period for filing the report if the foreign private issuer relies on Exchange Act Rule 12b-25) responding to all items required by Form 20-F, but with unaudited financial statements for those financial statements as to the examination of which either Andersen (or a foreign affiliate of Andersen) had been engaged as the independent public accountant (including an unaudited reconciliation to U.S. generally accepted accounting principles (GAAP) pursuant to Item 17(c) of Form 20-F if the foreign private issuer prepares its financial statements on a basis of accounting other than U.S. GAAP);

(b) The foreign private issuer provides disclosure reflecting the guidance included in Temporary Note 2T to Article 3 of Regulation S-X in the report; and

(c) The foreign private issuer files an amendment to the report within 60 days of the original due date of the report (excluding any additional period for filing the original report if the issuer relied on Exchange Act Rule 12b-25 for the filing of that report), that presents:

(1) The financial statements audited by an independent public accountant other than Andersen (or a foreign affiliate of Andersen);

(2) If Andersen (or a foreign affiliate of Andersen) had been engaged as the independent public accountant to examine the foreign private issuer's financial statements, selected financial data required by Item 3.A. of Form 20-F (including any reconciliation of that data to U.S. GAAP and Regulation S-K if required by Instruction 2 to Item 3.A. of Form 20-F) based on the audited financial statements;

(3) A discussion of any material changes from the unaudited financial statements or unaudited reconciliation filed originally; and

(4) Any other section of the annual report that should be amended, including without limitation, the Operating and Financial Review and Prospects required by Item 5 of Form 20-F, to reflect any changes in the financial statements so filed by amendment.

4. Rule 12b-25. Notwithstanding any other Commission rule or regulation, an issuer that files a Notification of Late Filing on Form 12b-25 for its annual report on Form 10-K or Form 10-KSB for its fiscal year ending between and including November 30, 2001 and April 15, 2002, its annual report on Form 20-F for its fiscal year ending between and including August 31, 2001 and April 15, 2002, its annual report on Form N-SAR for its fiscal year ending between and including December 15, 2001 and April 15, 2002 or its quarterly report on Form 10-Q or Form 10-QSB for its fiscal quarter ending between and including January 26, 2002 and June 15, 2002 need not attach as an exhibit a statement by Andersen (or a foreign affiliate of Andersen) as required by Exchange Act Rule 12b-25(c) if such statement cannot be obtained by the issuer after reasonable efforts.

5. Schedules 14A and 14C.  Notwithstanding any other Commission rule or regulation, every issuer that files either a Schedule 14A or Schedule 14C that requires audited financial statements of an entity with a fiscal year ending between and including:

(i) November 30, 2001 and April 15, 2002, if the entity meets all of the conditions in Rule 3-01(c) of Regulation S-X (or Item 310(g) of Regulation S-B if the entity is a small business issuer),

(ii) December 29, 2001 and April 15, 2002, if the entity does not meet all of the conditions in Rule 3-01(c) of Regulation S-X (or Item 310(g) of Regulation S-B if the entity is a small business issuer), or

(iii) January 1, 2002 and April 15, 2002, if the entity is a registered investment company,

may file unaudited financial statements in satisfaction of that requirement under the conditions listed below.

Conditions.  

(a) The issuer sends its proxy statement or information statement on or before September 13, 2002 (or, in the case of an issuer that is a registered investment company, on or before August 13, 2002);

(b) The issuer's proxy statement or information statement responds to all items required by Schedule 14A or Schedule 14C (taking into account paragraph I.6. below), but with unaudited financial statements for those financial statements as to the examination of which Andersen (or a foreign affiliate of Andersen) had been engaged as the independent public accountant;

(c) The issuer provides in the proxy statement or information statement disclosure reflecting the guidance included in Temporary Note 2T to Article 3 of Regulation S-X;

(d) The issuer must file either revised materials or amended documents incorporated by reference, as appropriate, not later than the date specified in paragraph I.5.(e) below, provided that this filing or amendment need not be made if the solicitation or corporate action has been completed by that date. Such filing or amended document shall present:

(1) The financial statements audited by an independent public accountant other than Andersen (or a foreign affiliate of Andersen);

(2) If Andersen (or a foreign affiliate of Andersen) had been engaged as the independent public accountant for the issuer's financial statements, selected financial data required by Item 301 of Regulation S-K based on the audited financial statements if this information would otherwise have been required in the proxy statement or information statement;

(3) A discussion of any material changes from the unaudited financial

statements filed originally; and

(4) Any other section of the revised materials or filings incorporated by reference that should be updated or revised to reflect any changes in the financial statements contained in the revised materials or amended documents; and

(e) For purposes of paragraph I.5.(d) above:

(1) If the issuer meets all of the conditions in Rule 3-01(c) of Regulation S-X (or Item 310(g)(2) of Regulation S-B for small business issuers, as defined in Item 10(a)(1) of Regulation S-B), the date shall be the earlier of (i) 60 days from the date the audited financial statements were required to be included in the proxy statement or information statement and (ii) the date on which an amended Form 10-K or 10-KSB containing audited financial statements is filed in accordance with this Order;

(2) If the issuer does not meet all of the conditions in Rule 3-01(c) of Regulation S-X (or Item 310(g)(2) of Regulation S-B for small business issuers, as defined in Item 10(a)(1) of Regulation S-B), the date shall be the earlier of (i) 106 days from the date the audited financial statements were required to be included in the proxy statement or information statement and (ii) the date on which an amended Form 10-K or 10-KSB containing audited financial statements is filed in accordance with this Order; and

(3) If the issuer is a registered investment company, the date shall be the earlier of (i) 60 days from the date the audited financial statements were required to be in the proxy statement or information statement and (ii) the date on which an amended annual report to shareholders containing audited financial information is filed in accordance with Release No. IC-25463 (March 18, 2002).

6. Audit Committee Disclosures in Certain Schedules 14A and 14C. Notwithstanding any other Commission rule or regulation, every issuer that has a fiscal year ending between and including November 30, 2001 and April 15, 2002 that files either a Schedule 14A or Schedule 14C may omit any disclosure required by Item 7(d)(3)(i) and Item 9(e) of Schedule 14A or Item 7(d)(3)(i) and Item 9(e) of Schedule 14A pursuant to Item 1 of Schedule 14C under the conditions listed below.

(a) The issuer sends its proxy statement or information statement on or before September 13, 2002 (or, in the case of an issuer that is a registered investment company, on or before August 13, 2002).

(b) The issuer's proxy statement or information statement responds to all items required by Schedule 14A or Schedule 14C (taking into account paragraph I.5. above, if applicable) other than Items 7(d)(3)(i) and Item 9(e) for Schedule 14A or Item 7(d)(3)(i) and Item 9(e) of Schedule 14A pursuant to Item 1 of Schedule 14C for Schedule 14C.

(c) The issuer has not filed audited financial statements nor amended its Form 10-K or Form 10-KSB pursuant to paragraph I.1. above prior to sending its proxy statement or information statement to shareholders.

(d) The issuer includes information in its amended Form 10-K or Form 10-KSB (or, in the case of a registered investment company, in its amended annual report to shareholders) that responds to Items 7(d)(3)(i) and Item 9(e) of Schedule 14A, if this information would otherwise have been required in the Schedule 14A or Schedule 14C.

7. Rule 14a-3. Notwithstanding any other Commission rule or regulation, every issuer that has a fiscal year ending between and including November 30, 2001 and April 15, 2002 that files either a Schedule 14A that relates to an annual meeting of security holders (or a special meeting in lieu of an annual meeting of security holders), or written consent in lieu of such meeting, at which directors are to be elected shall satisfy the requirements in Rule 14a-3 for audited financial statements in the annual report to security holders for that fiscal year under the conditions listed below.

Conditions.  

(a) The proxy statement or information statement is sent on or before September 13, 2002;

(b) The issuer's proxy statement responds to all items required by Schedule 14A (taking into account paragraphs I.5. and I.6. above, if applicable);

(c) The issuer's annual report to security holders responds to all items required in the report, but with unaudited financial statements for those financial statements as to the examination of which Andersen (or a foreign affiliate of Andersen) had been engaged as the independent public accountant;

(d) The issuer provides in the annual report to security holders disclosure reflecting the guidance included in Temporary Note 2T to Article 3 of Regulation S-X; and

(e) The issuer announces in a press release, at the time it files its Form 10-K or Form 10-KSB (or an amendment thereto) that includes the financial statements audited by an independent public accountant other than Andersen (or a foreign affiliate of Andersen), that these financial statements are available and may be found in that filing on the Commission's website at www.sec.gov and on the issuer's website, citing the address, if the issuer has a website; provided that this announcement need not be made if the issuer's solicitation or corporate action has been completed prior to the time these audited financial statements are filed.

8. Rule 14c-3. Notwithstanding any other Commission rule or regulation, every issuer that has a fiscal year ending between and including November 30, 2001 and April 15, 2002 that files a Schedule 14C that relates to an annual meeting of security holders (or a special meeting in lieu of an annual meeting of security holders), or written consent in lieu of such meeting, at which directors are to be elected shall satisfy the requirements in Rule 14c-3 for audited financial statements in the annual report to security holders for that fiscal year under the conditions listed below.

Conditions.  

(a) The proxy statement or information statement is sent on or before September 13, 2002;

(b) The issuer's information statement responds to all items required by Schedule 14C (taking into account paragraphs I.5. and I.6. above, if applicable);

(c) The issuer's annual report to security holders responds to all items required in the report, but with unaudited financial statements for those financial statements as to the examination of which Andersen (or a foreign affiliate of Andersen) had been engaged as the independent public accountant;

(d) The issuer provides in the annual report to security holders disclosure reflecting the guidance included in Temporary Note 2T to Article 3 of Regulation S-X; and

(e) The issuer announces in a press release, at the time it files its Form 10-K or Form 10-KSB (or an amendment thereto) that includes the financial statements audited by an independent public accountant other than Andersen (or a foreign affiliate of Andersen), that these financial statements are available and may be found in that filing on the Commission's website at www.sec.gov and on the issuer's website, citing the address, if the issuer has a website; provided that this announcement need not be made if the issuer's solicitation or corporate action has been completed prior to the time these audited financial statements are filed.

9. Schedules TO.  Notwithstanding any other Commission rule or regulation, every issuer whose Schedule TO requires audited financial statements of an entity with a fiscal year ending between and including November 30, 2001 and April 15, 2002 may file the Schedule TO with unaudited financial statements in satisfaction of that requirement under the conditions listed below.

Conditions.

(a) The issuer files its Schedule TO on or before September 13, 2002;

(b) The offering materials respond to all items required by Schedule TO, but with unaudited financial statements for those financial statements as to the examination of which Andersen (or a foreign affiliate of Andersen) had been engaged as the independent public accountant;

(c) The issuer provides in the offering materials disclosure reflecting the guidance included in Temporary Note 2T to Article 3 of Regulation S-X; and

(d) The issuer must either file revised materials or amend documents incorporated by reference to provide the financial statements audited by an independent public accountant other than Andersen (or a foreign affiliate of Andersen) not later than the earlier of (i) 60 days from the date the audited financial statements were required to be included in the Schedule TO and (ii) the date on which an amended Form 10-K or 10-KSB (or, in the case of a registered investment company, annual report to shareholders) containing audited financial statements is filed in accordance with this Order; provided that such filing or amendment shall not be required if the tender offer has been completed by such date. The revised materials or the periodic report which satisfies this requirement through incorporation by reference, must present:

(1) Those audited financial statements;

(2) If Andersen (or a foreign affiliate of Andersen) had been engaged originally as the independent public accountant for the issuer's financial statements, selected financial data required by Item 301 of Regulation S-K based on the audited financial statements;

(3) A discussion of any material changes from the unaudited financial

statements filed originally; and

(4) Any other section of the revised materials or filings incorporated by reference that should be updated or revised to reflect any changes in the financial statements contained in the revised materials or amended documents.

II. IT IS FURTHER ORDERED, pursuant to Section 36 of the Exchange Act, that:

1. Employee Benefit Plan Annual Reports on Form 11-K. Notwithstanding any other Commission rule or regulation, employee stock purchase, savings and similar plans meeting the requirements in paragraph II.1.(a) below that are required to file annual reports on Form 11-K may file their annual report on Form 11-K for their fiscal year ending between and including November 30, 2001 and April 15, 2002 under the conditions listed in paragraph II.1.(b) below.

(a) Eligibility Requirements. This paragraph II.1. applies to an employee stock purchase, savings or similar plan:

(1) That is subject to Section 15(d) of the Exchange Act;

(2) That is not subject to the Employee Retirement Income Security Act of 1974;

(3) That has a fiscal year ending between and including November 30, 2001 and April 15, 2002;

(4) Whose report for such period will include financial statements as to the examination of which Andersen (or a foreign affiliate of Andersen) had been engaged as the independent public accountant on or after March 14, 2002;

(5) That, on or before March 14, 2002, had not obtained a manually signed audit report from Andersen (or a foreign affiliate of Andersen) in respect of those financial statements;

(6) That is unable to obtain from Andersen (or a foreign affiliate of Andersen) or elects not to have Andersen (or a foreign affiliate of Andersen) issue a manually signed audit report in respect of those financial statements; and

(7) Where the issuer of the stock or other securities offered to employees through their participation in the plan is not a "blank check company" as defined in Rule 419(a)(2) under the Securities Act of 1933.

(b) Conditions.

(1) The plan timely files its annual report on Form 11-K within the period specified in Form 11-K (including any additional period for filing the report if the plan relies on Exchange Act Rule 12b-25) responding to all items required by Form 11-K, but with unaudited plan financial statements for those financial statements as to the examination of which Andersen (or a foreign affiliate of Andersen) had been engaged as the independent public accountant;

(2) The plan provides the disclosure reflecting the guidance included in Temporary Note 2T to Article 3 of Regulation S-X in the report;

(3) The plan files an amendment to the report within 60 days of the original due date for filing (excluding any additional period for filing the original report if the issuer relied on Exchange Act Rule 12b-25 for the filing of that report), that presents:

(i) The financial statements audited by an independent public accountant other than Andersen (or a foreign affiliate of Andersen);

(ii) A discussion of any material changes from the unaudited financial statements filed originally; and

(iii) Any other section of the annual report that should be amended to reflect any changes in the financial statements so filed by amendment.

(4) Notwithstanding paragraphs II.1.(b)(1) - (3) above, if the plan elects to use the alternative filing procedure in Exchange Act Rule 15d-21:

(i) Unaudited plan financial statements as to the examination of which Andersen (or a foreign affiliate of Andersen) had been engaged as the independent public accountant must be filed in the annual report on Form 10-K, Form 10-KSB or U5S of the issuer, or an amendment thereto, within 120 days after the end of the fiscal year of the plan;

(ii) The issuer provides the disclosure reflecting the guidance included in Temporary Note 2T to Article 3 of Regulation S-X in the report with respect to the plan;

(iii) An amendment must be filed to such report within 180 days after the end of the fiscal year of the plan, presenting:

(A) The audited financial statements that would have been required for the plan where Andersen (or a foreign affiliate of Andersen) had been engaged as the independent public accountant;

(B) A discussion of any material changes from the unaudited financial statements filed originally; and

(C) Any other section of the annual report related to the plan that should be amended including without limitation Management's Discussion and Analysis of Financial Condition and Results of Operations, to reflect any changes in the financial statements so filed by amendment; and

(iv) Notwithstanding paragraphs II.1.(b)(4)(i) - (iii) above, a plan whose fiscal year ends within 62 days prior to the end of the fiscal year of the issuer may elect to file the audited plan financial statements as a part of the issuer's next annual report pursuant to Exchange Act Rule 15d-21(b).

2. Rule 12b-25. Notwithstanding any other Commission rule or regulation, every plan meeting the eligibility requirements in paragraph II.1.(a) above that files a Notification of Late Filing on Form 12b-25 for its annual report on Form 11-K for its fiscal year ending between and including November 30, 2001 and April 15, 2002 need not attach as an exhibit a statement by Andersen (or a foreign affiliate of Andersen) as required by Exchange Act Rule 12b-25(c) if such statement cannot be obtained by the issuer after reasonable efforts.

III. IT IS FURTHER ORDERED, pursuant to Section 36 of the Exchange Act, that:

1. Rule 17a-5. A registered broker-dealer with a contractual commitment from Andersen (or a foreign affiliate of Andersen) to conduct the broker-dealer's annual audit pursuant to Exchange Act Rule 17a-5(d) as of a date between and including January 14, 2002 and April 15, 2002, and for which the manually signed audit report has not been received on or before March 14, 2002, may (i) file its audited financial statements within 60 days after the date the statements would otherwise have been required to have been filed under Exchange Act Rule 17a-5(d)(5); and (ii) comply with the requirements of Exchange Act Rule 17a-5(c)(2) by furnishing unaudited statements to customers and other persons set forth in Exchange Act Rule 17a-5(c)(1) within 105 days after the date as of which audited statements were to have been prepared. The unaudited statements shall contain the information specified in Exchange Act Rule 17a-5(c)(2)(i) and (c)(2)(ii).

2. Rule 17Ad-13. A registered transfer agent with a contractual commitment from Andersen (or a foreign affiliate of Andersen) to prepare a report concerning the transfer agent's system of internal accounting control and related procedures for the transfer of record ownership and the safeguarding of related securities and funds pursuant to Exchange Act Rule 17Ad-13(a), and for which the manually signed report has not been received on or before March 14, 2002, may file the report pursuant to such paragraph within 60 days after the date the report otherwise would have been required to have been filed.

By the Commission.

Jonathan G. Katz
Secretary

Footnote
1 The Commission is also publishing today a separate release modifying, in a manner appropriate for the protection of investors, the requirements for including audited financial statements in registration statements under the Securities Act of 1933 and filings required by the Trust Indenture Act of 1939. See Release No. 33-8070 (March 18, 2002).

Appendix B

UNITED STATES OF AMERICA
BEFORE THE
SECURITIES AND EXCHANGE COMMISSION