December 4, 2001
Mr. Jonathan Katz
U.S. Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549-0609
File No. S7-18-01
Mandated Edgar Filing for Foreign Issuers
Dear Mr. Katz:
This letter is the response of KPMG LLP to the Securities and Exchange Commission's request for comments on its proposal to require foreign private issuers and foreign governments to file their securities documents electronically through the EDGAR system.
Generally, we support the Commission's proposal to extend mandatory electronic filing through EDGAR to foreign private issuers and foreign governments. Electronic filing by domestic registrants has greatly improved the accessibility of financial and other information to investors and other users. In light of the substantial increase in the number of foreign participants in the U.S. capital markets, it is appropriate to extend the EDGAR filing requirements to foreign filers. The remainder of this letter consists of our comments on certain elements of the proposal.
The proposed transition period is four months from the date of final rule adoption. If the Commission adopts the final rule within the first two months of 2002, current reporting foreign private issuers would be required to electronically file their December 31, 2001 annual reports on Forms 20-F or 40-F by June 30, 2002, unless they were otherwise filed in paper form within four months of the adoption date. In addition, other reports filed on Form 6-K (e.g., a home country annual report) may possibly have to be filed electronically before the Form 20-F is due, depending on the date of final rule adoption.
We do not believe that a transition period of four months would be adequate for foreign entities to implement electronic filing procedures, particularly since the electronic filing systems in other jurisdictions generally are not readily compatible with EDGAR, to the extent they exist at all. We suggest that electronic filing be required no earlier than October 1, 2002, or six months after final rule adoption if that results in a later date. This time frame will allow foreign private issuers who are already well into their 2002 fiscal years to plan and implement electronic filing procedures. We believe that a longer transition period is appropriate based on the large number of foreign private issuers that will be filing electronically for the first time and the diverse characteristics of that group, including the degree of sophistication and familiarity with electronic media.
Additionally, if a foreign private issuer files a registration statement or submits a confidential registration statement on paper before the effective date of the proposed rule, we believe that the filer should be allowed to continue to file on paper through effectiveness of its registration statement (i.e., no limited period of time, such as the one month period noted in the proposal). The registration statement that is declared effective would be filed electronically, along with all correspondence related to that filing.
Confidential Draft Submissions
It is our understanding that the proposed rule would not impact the current staff practice of allowing initial registrants to submit confidential draft registration statements and amendments on paper for staff review. We suggest that the Commission confirm this policy in the final rule release and clarify what information the registrant would be required to file electronically upon actual filing of the registration statement.
We appreciate the opportunity to comment on your proposal. If you have any questions about our comments please contact Sam Ranzilla at (212) 909-5837 or Melanie Dolan at (202) 533-4934.
Very truly yours,