July 26, 1999
Mr. Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 - 5th Street, N.W.
Washington, D.C. 20549
Re: Release No. 33-7607 (Proposed Regulation M-A)
File No. S7-28-98
Dear Mr. Katz:
This letter is being submitted on behalf of myself, not my firm, any of its clients or any bar group with which I am affiliated. I apologize for the fact that this letter is somewhat tardy in relation to the extended deadline for commenting on the above-captioned Release but it has only recently become clear to me that the particular point raised in this letter is unlikely to be raised in other communications with the Commission.
I am writing with respect solely to one issue raised by the above-captioned Release and, specifically, by footnote 110 thereto. That footnote refers to an interpretive letter dated November 28, 1995 that was issued to me. Under that letter, the staff of the Division of Corporation Finance stated that, where it is impracticable to file proxy materials on the same business day, issuers and others would be permitted to file electronically "promptly on the next business day following distribution to securityholders."
One of the proposals contained in the above-captioned Release would supersede that interpretation and require that proxy material disseminated during the Commission's business hours would be required to be filed on that day; proxy materials disseminated outside the Commission's business hours would be deemed disseminated on a non-business day and would be required to be filed on the next business day.
I respectfully disagree with the Commission's conclusion that this provides issuers and others with sufficient flexibility in the context of a proxy contest. As I noted in my submission that led to the interpretive letter issued to me in 1995, it is frequently the case, in proxy contests, that one side feels compelled to respond, on extremely short notice during the day, to actions taken, or communications issued, by the other side earlier that day. Under the Commission's proposal, if the responding side wished to issue its own communication by 5:30 p.m., East Coast time, on the same day, i.e., the time at which it ceases to be possible to make an EDGAR filing that day, that particular side would be required to have prepared an EDGARized version of its communications and have filed it by that time. My experience, which I believe is both extensive and consistent with that of other practitioners who are frequently engaged in proxy contests on the West Coast, compels the conclusion that this is simply not practicable. One side in a proxy contest may take action, for example, in the mid or late afternoon, East Coast time, but the other side would be unable to issue any responsive solicitation that day unless it could rush to complete its EDGAR filing by 2:30 p.m., West Coast time, that day.
I see no reason why the adoption of the above-captioned Release should lead to the conclusion that the position the Division of Corporation Finance took in its letter to me in 1995 needs to be reversed. The case that was made for that position then is equally applicable today, and, in my view, none of the Commission's other proposed changes in the above-captioned Release in any way reduces the need for that position to continue to be available both to issuers and to other parties.
Thank you for your consideration of the foregoing.