Imperial Oil Limited
111 St Clair Ave W
PO Box 4029 Stn A
Toronto ON M5W 1K3
Finance and Administration
May 22, 2002
Mr. Jonathan G. Katz, Secretary
U.S. Securities and Exchange Commission
450 Fifth Street N.W.
Washington, D.C. U.S.A. 20549
Proposed Rule: Accelerated Filing (File: S7-08-02)
Dear Mr. Katz:
We are writing in response to your request for comments on the S.E.C. Proposed Rule: "Acceleration of Periodic Report Filing Dates and Disclosure Concerning Website Access to Reports" (Release 33-8089).
Imperial Oil Limited is one of the largest producers of crude oil in Canada and is a major producer of natural gas. The company is Canada's largest refiner and marketer of petroleum products and is a major producer of petrochemicals.
Imperial is concerned about the proposed acceleration of filing dates for quarterly and annual reports.
While the Commission has noted that technological advances have made it possible to issue press releases earlier, the Form 10Q and 10K are more involved than issuing a set of numerical data from the financial system with accompanying high-level comments. The Form 10Q and 10K also includes a description of business operations, the MD&A and notes to the financial statements. Foreign private issuers that voluntarily file a Form 10Q and 10K, such as Imperial, must also reconcile domestic to U.S. GAAP, and provide additional note details.
In our view the advanced filing deadlines will lead to conflicts with domestic reporting responsibilities. Certain disclosures, such as the details of executive compensation currently disclosed in the management proxy circular, would have to be disclosed in the Form 10K before disclosure to shareholders because Imperial's management proxy circular is not subject to the S.E.C.'s remuneration disclosure rules for shareholder meetings. As well, several items in the Form 10K are incorporated by reference to the annual report to shareholders; an advanced filing date would require alternative reporting formats as the annual report is not usually scheduled for printing until after the proposed 60 day filing deadline.
Rather than encourage foreign private issuers to voluntarily file a Form 10Q and 10K, the proposal could actually discourage such disclosure. Therefore, we urge the S.E.C. to consider an exemption from the proposed rules for foreign private issuers to encourage voluntary filing of Forms 10Q and 10K.
We do, however, support the proposal that companies provide investors with website access to reports filed with the Commission. Imperial currently provides Forms 10Q and 10K on its website, along with other information of interest to investors. Imperial's Form 10Q and 10K reports are available on the company website on the same day as the material is filed with the Commission. Minor changes only would be required in the "annual report to shareholders" to reference the 10Q availability and to expressly state that such reports are available free of charge on the company's website.
We hope you find the above comments useful in your deliberations on the proposed rule.
cc: T.J. Hearn