Mr. Jonathan Katz
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0609
December 3, 2001
File Number S7-18-01
Dear Mr. Katz:
PricewaterhouseCoopers LLP appreciates the opportunity to comment on Mandated Edgar Filing for Foreign Issuers (the "release" or the "proposed rule"). Subject to the points noted below, we support the proposed amendments to Regulation S-T and related rules and forms that would require foreign private issuers and foreign governments to file their documents on EDGAR. We agree that the proposed rules will be beneficial to investors and other users of financial statements.
Currently, foreign private issuers that are not subject to the Commission's reporting requirements are allowed to submit documents for the staff's review on a confidential basis. This practice is an enormous benefit for companies that are entering the US market for the first time. We assume that this practice will continue if this proposal is adopted, and we encourage the Commission to specifically address this matter in the adopting release.
Treatment of Foreign Language Documents
Currently, all documents filed on EDGAR need to be in the English language. If adopted, this requirement will be equally applicable to foreign private issuers. Under the existing rules, foreign registrants were permitted to submit foreign language documents as exhibits to filings as long as a "summary, version or translation in the English language" accompanied them. Additionally, for certain items subject to submission under Form 6-K, registrants were permitted to submit brief English language descriptions of the document when a summary or version in the English language had not been prepared.
We agree with the current practice that stipulates that certain documents required to be filed as exhibits to registration statements or annual reports on Form 20-F are of such importance that filing of summarized English translations, rather than a full translation, could be detrimental to an understanding of the registrant's affairs. However, based on our experience in working with foreign private issuers over the years, we believe that the cost of the proposal to require English language translations of many items typically submitted using Form 6-K, including local regulatory filings, such as statutory reports, and offerings of securities only made to non-U.S. investors, would exceed the incremental benefit to users in the US.
We respectfully request that the Commission reconsider the proposed requirement to have all documents submitted in an unabridged English language format. As an alternative, we recommend that the new rules codify existing Commission practices in this area and provide guidance as to what types of documents for which full English translations must be provided and those for which the Commission would be willing to accept the submission of a summarized English translation. Rather than filing paper documents in a foreign language, the companies could indicate that a copy of the document would be available upon request.
As proposed, the requirement to file on EDGAR would become effective for filings made four months from the date the release is adopted. This means that companies with a calendar year end do not know if they will need to file their 2001 Form 20-F on EDGAR and may not know, depending on the adoption date, until 2002. While in many instances the short notice will not cause a hardship, for others, the implementation will be problematic. Many companies have already made plans for distribution and filing of Form 20-F assuming no additional requirements relating to EDGAR.
We respectfully request the Commission extend the transition date for requiring the use of the EDGAR to at least six months subsequent to the adoption date of the amendments to provide sufficient time to address implementation issues and problems. In addition, to ensure that calendar year companies do not have to make modifications on short notice, we recommend that in no event should the rules go into effect prior to July 1, 2002.
We appreciate the opportunity to express our views and would be pleased to discuss our comments or answer any questions that the staff may have. Please do not hesitate to contact Wayne Carnall (973-236-7233) of Dennis Neider (973-236-4996) regarding our submission.