Gary J. Wolfe
December 3, 2001
Jonathan G. Katz
Securities and Exchange Commission
450 Fifth Street, N.W., Mailstop 6-9
Washington, D.C. 20549
Re: Mandated Edgar filing for foreign issuers
File No. S7-18-01
Dear Mr. Katz:
Seward & Kissel LLP submits this letter in response to the request of the Securities and Exchange Commission (the "Commission") for comments on its proposed amendment to Regulation S-T governing the Electronic Data Gathering, Analysis, and Retrieval system ("EDGAR") to require foreign issuers to use EDGAR to the same extent as domestic issuers. We support the Commission's proposal with one comment that we set forth below.
We represent numerous foreign private issuers that have registered securities under the Securities Act of 1933, as amended (the "Securities Act") and the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As a matter of course we have informed our foreign clients that have become subject to the Exchange Act's periodic reporting requirements of the availability and benefits of EDGAR. Nearly all of these clients have chosen to file via EDGAR because they have realized that it is in their interest to disseminate information to the public as quickly and efficiently as possible.
We also represent many investment companies, private investment vehicles, money managers and other investors. Many of these clients have expressed to us their frustration over not having quick access to reports and press releases filed by foreign issuers that do not file via EDGAR , and not being able to locate reports and registration statements that have been filed on paper. This is consistent with the experience of our foreign issuer clients, who have expressed to us the difficulties they often face in having their press releases carried by U.S. focused press services. Our foreign issuer clients that have elected to use EDGAR appreciate their ability to refer investors to the Commission's EDGAR web site for reference to their periodic reports, press releases and other announcements.
Similarly, foreign private issuers who have not made the transition to EDGAR have experienced an unnecessary delay in learning about third-party filings such as Schedules 13D or 13G, since those filings continue to be made on paper for those issuers. Extending EDGAR to foreign issuers will enhance the accessibility and timeliness of information disseminated by those issuers, including information from third party filers, which we believe will benefit both investors and foreign issuers themselves.
All of the foreign private issuers with whom we deal are capable of drafting filings with widely-accepted word processing software and making arrangements with third parties to convert and file them via EDGAR. We believe that the relatively small burden of having a financial printer, law firm or other qualified third party convert and file those reports and registration statements via EDGAR is more than outweighed by the benefits. These benefits include improved relationships with investors and enhanced dissemination of information to all interested parties.
We do, however, have a concern with the Commission's proposal to requireforeign issuers to file the full English translation of foreign language documents included as exhibits. Many of the documents required to be filed as exhibits are long, complex legal contracts that often contain boilerplate language. In many instances, a full and accurate translation would be extremely difficult to obtain and would raise additional liability concerns for the issuer without providing any additional information that is material to investors. We believe that the Commission should allow foreign issuers to file summaries of foreign language documents as exhibits on EDGAR, contemporaneously with a paper filing of the original document. The summaries of the exhibits could include an explanatory note advising readers that the original exhibit has been filed with the Commission and is available for copying.
On a related matter, we note the support that the Commission has afforded foreign private issuers seeking to register securities in the United States for the first time. Many foreign companies approach their first entry into the U.S. capital markets with some hesitation. In some cases, companies that are considering registration are resident in jurisdictions that require little or no disclosure.
To address this concern, the Division of Corporation Finance's Office of International Corporate Finance currently reviews, on a confidential basis, draft registration statements, submitted on paper, by first-time foreign private issuer registrants. In our experience, foreign private issuers who are made aware of this procedure uniformly take advantage of it. We believe that the Office of International Corporate Finance's procedure is extremely helpful in attracting foreign private issuers to the U.S. capital markets. We believe that this program has been extremely successful, and that the Office of International Corporate Finance should continue to make this procedure available to foreign private issuers who are contemplating entry into the U.S. capital markets by continuing to accept draft confidential submissions on paper.
Please do not hesitate to contact the undersigned or Robert E. Lustrin of this office with any questions relating to the comments in this letter.
Very truly yours,
SEWARD & KISSEL LLP
By: /s/ Gary J. Wolfe