SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 230, 232, 239, 240, 270, and 274
[Release Nos. 33-7653; 34-41150; IC-23735 File No. S7-9-99]
RIN 3235-AH70
Rulemaking for EDGAR System
AGENCY: Securities and Exchange Commission
ACTION: Proposed rule
SUMMARY: The Securities and Exchange Commission is modernizing the
Electronic Data Gathering, Analysis, and Retrieval ("EDGAR") system. When
the programming for the new system is accomplished, we will be able to
accept filings submitted to EDGAR in HyperText Markup Language as well as
documents submitted in the American Standard Code for Information
Interchange format. Filers will have the option of accompanying their
required filings with unofficial copies in Portable Document Format. In
this release, we are proposing amendments to our rules to reflect initial
changes to filing requirements resulting from EDGAR modernization, as well
as certain other changes to clarify or update the rules. We also request
comment on the impact that the new approach to EDGAR may have upon filers,
investors, and the public, as well as on certain matters that will be the
subject of later rulemaking in connection with the completion of EDGAR
modernization.
DATES: We must receive your comments on or before April 15, 1999.
ADDRESSES: Please submit three copies of your comments to Jonathan G.
Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549-0609. You also may submit your comments
electronically at the following e-mail address: rule-comments@sec.gov.
Your comment letter should refer to File No. S7-9-99; include this file
number in the subject line if you use e-mail. We will make comment letters
available for your inspection and copying in our Public Reference Room, 450
Fifth Street, N.W., Washington, D.C. 20549. We also will post any
electronically submitted comment letters on our Internet Web Site
(http://www.sec.gov).
FOR FURTHER INFORMATION CONTACT: If you have questions about the proposed
rules, please contact one of the following members of our staff: in the
Division of Investment Management, Ruth Armfield Sanders, Senior Counsel,
(202) 942-0633; and in the Division of Corporation Finance, Margaret R.
Black, (202) 942-2940. If you have questions about the development of the
modernized EDGAR system, please contact Richard D. Heroux, (202) 942-8885,
in the Office of Information Technology.
SUPPLEMENTARY INFORMATION:
Today we propose amendments to the following rules relating to
electronic filing on the EDGAR system: Rules 485, 486, 487, 495, and
497,<(1)> and Form S-6,<(2)> under the Securities Act of 1933
("Securities Act");<(3)> Rules 10, 11, 101, 102, 302, 303, 304, 305,
306, 307, and 310 of Regulation S-T;<(4)> Schedule 14A<(5)>
<(1)> 17 CFR 230.485, 486, 487, 495, and 497.
<(2)> 17 CFR 239.16.
<(3)> 15 U.S.C. 77a et seq.
<(4)> 17 CFR 232.10, 11, 101, 102, 302, 303, 304, 305, 306,
307, and 310.
<(5)> 17 CFR 240.101.
======END OF PAGE 2======
under the Securities Exchange Act of 1934 ("Exchange Act");<(6)> Rules
8b-23 and 8b-32,<(7)> and Form N-SAR,<(8)> under the Investment
Company Act of 1940 ("Investment Company Act");<(9)> and Forms N-1,
N-1A, N-2, N-3, N-4, and N-5<(10)> under the Securities Act and the
Investment Company Act. Today we also propose to add the following to
Regulation S-T: Rules 104, 105, and 106.
I. Modernization of EDGAR
A. Background
In 1984, we initiated the EDGAR system to automate the receipt,
processing, and dissemination of documents required to be filed with us
under the Securities Act, the Exchange Act, the Public Utility Holding
Company Act of 1935 ("Public Utility Act"),<(11)> the Trust Indenture
Act of 1939,<(12)> and the Investment Company Act. Since 1996, we
have required all domestic public companies to file with us electronically
through the EDGAR system, absent an exemption. EDGAR filings are
<(6)> 15 U.S.C. 78a et seq.
<(7)> 17 CFR 270.8b-23 and 8b-32.
<(8)> 17 CFR 274.101.
<(9)> 15 U.S.C. 80a-1 et seq.
<(10)> 17 CFR 239.15 and 274.11, 17 CFR 15A and 274.11A, 17 CFR
239.14 and 274.11a-1, 17 CFR 239.17a and 274.11b, 17 CFR
239.17b and 274.11c, 17 CFR 239.24 and 274.5.
<(11)> 15 U.S.C. 79a et seq.
<(12)> 15 U.S.C. 77sss et seq.
======END OF PAGE 3======
disseminated electronically and displayed on our web site at
http://www.sec.gov, in the form in which we receive them. The EDGAR
system's broad and rapid dissemination benefits the public by allowing
investors and others to obtain information rapidly in electronic format, a
form easily searchable and lending itself to ready financial analysis by
using spreadsheets and other methods.
Recent technological advances, most notably the rapidly expanding use
of the Internet, have led to unprecedented changes in the means available
to corporations, government agencies, and the investing public to obtain
and disseminate information. Today, many companies, regardless of size,
maintain web sites via the World Wide Web through which companies can make
information available to the public. Through links from one web site to
others, individuals may obtain a vast amount of information in a matter of
seconds. Advanced data presentation methods using audio, video, and
graphic and image material are now available through even the most
inexpensive personal computers or laptops.
We have recognized the profound impact that these technological
advances have on the dissemination and collection of information governed
by the securities laws.
* In October 1995, we issued an interpretive release on the
electronic delivery of information, providing guidance to market
participants on using electronic media to satisfy delivery
obligations of disclosure documents.<(13)>
<(13)> Use of Electronic Media for Delivery Purposes, Securities
Act Release No. 7233, Exchange Act Release No. 36345
(Oct. 6, 1995) [60 FR 53458].
======END OF PAGE 4======
* In May 1996, we issued an interpretive release providing similar
guidance concerning use of electronic media by broker-dealers and
investment advisers.<(14)>
* In October 1997, we issued a report to Congress, under Section
510(a) of the National Securities Markets Improvement Act of
1996, on the impact of recent technological advances on the
securities markets.
* In March 1998, we issued another interpretive release providing
guidance on when we would consider offers of securities or
investment services made on Internet web sites by foreign
entities not to be offerings in the United States.<(15)>
These releases and reports discuss the increasing use of such
technologies as Internet web sites, CD-ROMs, and e-mail for delivery to
investors of documents such as prospectuses, tender offer materials, and
proxy statements. The releases and reports also discuss the impact of such
technologies on the reporting and disclosure requirements of the securities
laws. Also, we adopted technical amendments to our filing and reporting
rules that were premised on the filing and distribution of paper documents
<(14)> Use of Electronic Media by Broker-Dealers, Transfer
Agents, and Investment Advisers for Delivery of
Information, Securities Act Release No. 7288, Exchange
Act Release No. 37182 (May 9, 1996) [61 FR 24644].
<(15)> Statement of the Commission Regarding the Use of Internet
Web Sites to Offer Securities, Solicit Securities
Transactions or Advertise Investment Services Offshore,
Securities Act Release No. 7516 (Mar. 23, 1998) [63 FR
14806].
======END OF PAGE 5======
to take into account these technological changes.<(16)> Our staff
also has provided interpretive guidance regarding the application of
technology to market practices and has addressed electronic issues on a
case-by-case basis as questions have been raised by market participants.
B. Implementation of HTML/PDF Environment
The purpose of our new EDGAR contract is to modernize EDGAR
completely, making the system easier for filers to use, and the documents
more attractive and readable for the users of public information.
Currently, filers must submit electronic filings to the EDGAR system in a
text-based American Standard Code for Information Interchange ("ASCII")
format. With EDGAR modernization, filers will be able to submit most
filings to us in HyperText Markup Language ("HTML"), as well as in ASCII.
We expect that HTML will eventually replace ASCII for most filings. Filers
also may submit unofficial copies of filings in Portable Document Format
("PDF"). Unlike ASCII documents, HTML and PDF documents can include
graphics, varied fonts, and other visual displays that filers use when they
create Internet presentations or material for distribution to shareholders.
In this release, we refer to the required filings that filers must submit
only in either ASCII or HTML formats as "official filings." We refer to
the PDF documents as "unofficial PDF copies" because filers may not use
them instead of HTML or ASCII documents to meet filing requirements.
Our plan for the evolution of the EDGAR system is to include an
HTML/PDF environment. In May of 1999, we will provide limited support for
HTML by allowing only certain tags (commands and identifying information)
<(16)> Securities Act Release No. 7289 (May 9, 1996)[61 FR
24652].
======END OF PAGE 6======
to be accepted by the EDGAR system. Later, we plan to modernize the EDGAR
system so that it will be able to accept and display filings that use
graphic and other visual presentations. Filers will be able to submit
documents to the EDGAR system that can appear in substantially the same
graphic format as those prepared by the filer for delivery to investors and
the marketplace. Although initially graphics and hypertext links will be
very limited, we anticipate expanding both of these elements, as we discuss
below.
These advances will greatly expand the amount and kinds of information
that we can make available to investors and other members of the public
through the EDGAR system. These advances also will ease the burden upon
filers, by enabling the submission of documents to the EDGAR system in a
format similar to that in which documents are presented to the public and
to investors. However, as discussed below, these advances also pose
significant issues concerning the rules governing documents filed with us
under the EDGAR system, which we must address before these advances are
implemented.
The modernization schedule provides that the EDGAR system will accept
HTML/PDF documents beginning on May 24, 1999. However, we envision an
initial implementation period for HTML filings, extending until early 2000,
during which we will impose certain limitations on HTML filings (the "HTML
implementation period"). This period is necessary due to technical issues
that we must resolve before full implementation of the new HTML component
of the EDGAR system.
The modernized EDGAR system is designed to be Year 2000 compliant.
During the summer of 1999, we plan to turn the dates forward on the EDGAR
======END OF PAGE 7======
system at specified times to give filers an opportunity to submit test
filings so they can assure themselves that the Commission-owned and
operated EDGAR components will operate after January 1, 2000. We advise
filers to have their own operating environments certified to be Year 2000
compliant. Other than testing to assure that documents are received and
disseminated by us, is there any other testing that filers may want to see
performed for Year 2000 compliance?
In this release, we describe how the EDGAR system will change at the
beginning of the initial HTML implementation period, and we propose rule
changes to govern EDGAR filing during this period.<(17)> We also
describe further changes to the system that we plan to make after the HTML
implementation period. We will propose corresponding rule changes closer
to that time.
Currently, some filers use multi-media prospectuses, including videos,
CD-ROMs, and streamed video or audio files that can be played over the
Internet. The current EDGAR modernization contract will not accommodate
these media, but we are considering whether we should include some of these
media in the future. As noted in our release proposing rules on the
regulation of securities offerings, we must consider factors such as
security; development and maintenance costs; costs of database storage; how
these materials should be disseminated to the public; whether investors
<(17)> We will revise the EDGAR Filer Manual at a later date.
The EDGAR Filer Manual sets forth the technical
formatting requirements governing the preparation and
submission of electronic filings through the EDGAR
system. Filers must comply with the provisions of the
Filer Manual to assure timely acceptance and processing
of electronic filings. See Rule 301 of Regulation S-T
[17 CFR 232.301].
======END OF PAGE 8======
would have as ready access to these materials as to the current electronic
filings; how to meet the archival requirements for storage of these
materials; wide divergence in industry standards for most multi-media
formats; and how to assure that filed documents continue to be readable in
the future, since applications that present these media may change or even
disappear over time.<(18)>
C. Use of HTML
Although the EDGAR system will be able to accept HTML documents
beginning May 24, 1999, we are not now proposing to require the use of
HTML. However, we expect to require HTML for most filings as soon as
practicable, so we encourage filers to use it and gain experience with this
format if they do not have it already.<(19)> We intend to provide
technical support for filers to assist them in submitting and correcting
HTML documents through our filer technical support function.
During the HTML implementation period, if HTML is used, each EDGAR
document may consist of no more than one HTML file. Filers may not submit
EDGAR documents composed of multiple linked HTML files, although we may
permit this after the conclusion of the HTML implementation period.
We request comment on whether we should continue to accept all EDGAR
submissions in ASCII, or whether, in the future, we should require
submission of all or some documents in HTML. If you think we should
require some or all submissions in HTML, please state when HTML should
<(18)> See Section VII.B of "The Regulation of Securities
Offerings," Securities Act Release No. 7606A (Nov. 13,
1998)[63 FR 67174].
<(19)> See footnote 39 and accompanying text for submissions
that we will keep in ASCII format.
======END OF PAGE 9======
become mandatory and specify the submissions we should require in HTML
format. How soon will individuals, companies, filing agents and training
agents begin using HTML? We request comments and data on the impact of
converting to HTML from ASCII. Are there one-time or ongoing extra costs?
Will the conversion affect all filers equally, e.g., small business issuers
or frequent issuers of securities? We request comment on the use of
eXtensible Markup Language ("XML"), particularly for EDGAR submission
header tags.
D. Use of PDF
In addition to permitting the use of HTML for filings, we intend to
permit filers to submit a single unofficial PDF copy of each
document.<(20)> These copies will be disseminated publicly. Filers
may wish to submit these copies, since PDF documents retain all the fonts,
formatting, colors, images, and graphics contained in an original document.
The unofficial PDF copy will be optional, but if an unofficial PDF copy of
a document is submitted, it must be substantively equivalent<(21)> to
<(20)> For example, if a filing consists of a registration
statement plus five exhibits, there are six documents for
EDGAR purposes. Generally, the filer could submit all of
these as HTML documents, all as ASCII documents, or some
as HTML and some as ASCII documents. The filer also
would have the option to accompany any or all of the six
documents with an unofficial PDF copy. But the rules
would not permit a filer to submit a single unofficial
PDF copy including the registration statement and
exhibits; each PDF document should reflect only one ASCII
or HTML document.
<(21)> "Substantively equivalent" documents are the same in all
respects except for the formatting and inclusion of
graphics (instead of the narrative and/or tabular
description of the graphics). For documents to be
substantively equivalent, the text of the two documents
must be identical.
======END OF PAGE 10======
the document contained in the official filing of which it is a copy.
Further, filers may not make a submission consisting solely of PDF
documents; filers must include unofficial PDF copies only in submissions
that contain official filings in HTML or ASCII format.
We request comment on our proposal to allow unofficial PDF copies of
official filings. Should the unofficial PDF copy contain a legend or
disclaimer that it is not the official filing? How else could we alert
viewers to the unofficial status of the PDF copy? We also request comment
on whether we should require the exhibit index to a filing to note which
exhibits, if any, are accompanied by an unofficial PDF copy. Further,
should we initially impose a size limitation for unofficial PDF documents?
How quickly will individuals, companies, filing agents, and training agents
start using PDF? Because PDF documents will be delivered to dissemination
subscribers, we also request comment on how our dissemination subscribers
and providers of information services will use the PDF documents.
E. Graphic and Image Material
During the HTML implementation period, we will not accept graphic or
image material in HTML documents.<(22)> The EDGAR system will
suspend submissions made during the HTML implementation period if they
contain tags for graphic or image files. However, the optional, unofficial
PDF copy of an EDGAR document may contain graphic and/or image material.
We also propose to prohibit, during the HTML implementation period,
any EDGAR submission containing animated graphics (e.g., files with moving
<(22)> Filers should continue to provide a fair and accurate
description of the differences between a version
including graphic or image material and the filed
version, as required by Rule 304 of Regulations S-T [17
CFR 232.304].
======END OF PAGE 11======
corporate logos or other animation), either in any official submission or
any unofficial PDF copy. We are proposing this requirement during HTML
implementation due to the issues concerning how to capture and represent
the animated graphics, which we cannot print or search, in identifying the
official filing. We request comment concerning what would constitute the
official filing in the event that we later propose to allow animated
graphics.
We intend to propose permitting graphic and image material in HTML
documents after the HTML implementation period. However, due to concerns
about data storage limitations and ease of viewing, we may propose
restrictions on the type and size of graphic and image material included.
Also, we may propose that information presented as tables, charts, text, or
otherwise in a graphic or image file be presented as text in an ASCII file
or as an HTML table in an HTML file.
We have some concerns about the potential size of data files that
filers may submit in connection with graphic and image material if we allow
it following the implementation period, not only because of our own
database storage needs, but also because some Internet users may encounter
difficulties in downloading or viewing documents that are very large. We
request comment on the circumstances and manner in which we might limit
file size and the type of graphic and image materials. For example, should
we propose a limitation on the allowed size of each file or group of files,
including graphic and image files, and provide EDGAR Filer Manual
instructions on ways to minimize file size? Should we limit the total
number of files that include graphic and/or image material?
======END OF PAGE 12======
We are considering whether, once the HTML implementation period is
over, if we permit graphic and image material in HTML documents, we should
require graphic and image material to be included in HTML documents under
some circumstances. Should we propose that, when our rules require
information to be in graphic form, filers using HTML be required to present
the graphic, rather than merely giving the data, in the HTML
document?<(23)> Or, should the presentation of graphic and image
material continue to be optional to alleviate the burden on filers who do
not currently have the resources to prepare graphic and image material?
F. Limitation on Hypertext Links
During the HTML implementation period, we propose to prohibit
hypertext links from HTML documents to external web sites. Similarly, we
propose to prohibit hypertext links from HTML documents to external
documents (including exhibits), regardless of whether the document is part
of the same filing. Electronic filers may include hypertext links to
different sections within a single HTML document.<(24)> A document
may include an inactive textual reference to external sites or documents
<(23)> See, e.g., the performance line graph required by Item
402(l) of Regulation S-K [17 CFR 229.402(l)] and the bar
chart and performance graph required for investment
companies by Items 2 and 5 of Form N-1A [17 CFR 239.15A
and 274.11A].
<(24)> For example, companies might wish to include a prospectus
table of contents containing links to the various
sections of the prospectus.
======END OF PAGE 13======
for informational purposes,<(25)> but it may not include a link to
such an external site or document.
We expect to propose allowing hypertext links to exhibits within the
same filing after the HTML implementation period. We also will consider
whether to propose permitting external hypertext links to documents
contained in other filings or to web sites. However, as discussed below,
we recognize that use of such external links poses significant issues
concerning the content of an "official filing," which we must resolve
before we would permit such links.<(26)> We request comment on
whether, following the HTML implementation period, we should allow external
hypertext links. For example, should we allow links from within a filing
to previously filed documents that are incorporated by reference?
G. Method of Electronic Transmission
Most filers currently make EDGAR submissions by using a dial-up modem
process, with or without the use of EDGARLink,<(27)> directly to
EDGAR or through CompuServe to EDGAR. The EDGAR system requires three
codes for a filer to access EDGAR: a Central Index Key ("CIK"), a CIK
Confirmation Code ("CCC") for filer authentication, and a Password
Modification Authorization Code ("PMAC"). We contemplate that, after the
<(25)> It is the staff's position that such a reference will not
be deemed to incorporate the material by reference into
the filing. See ITT Corp. (Dec. 6, 1996) and Baltimore
Gas & Electric Co. (Jan. 6, 1997).
<(26)> See Section II.A of this release and our discussion of
proposed new Rule 105 below.
<(27)> EDGARLink is the filer assistance software we provide to
filers filing on the EDGAR system.
======END OF PAGE 14======
HTML implementation period, filers will be able to make EDGAR filings
through Internet-based technology via an Internet Service Provider ("ISP")
of their choice. We plan to revise EDGARLink to support Internet-based
filing. We envision providing security by Secure Socket Layer ("SSL,"
i.e., encrypted transmissions) and server side certificates. We request
comment on whether we should propose to allow or to require filers to
acquire and present client side certificates from one for more vendors that
we designate. This would enhance the security of the transaction, provide
for non-repudiation, and allow for digital signing of the filings. We
request comment on our planned revision to the method of electronic
transmission, including our planned security precautions.
H. Regulatory Impact of EDGAR Modernization Filing Requirements
Although these technical advances provide the potential for much more
effective use of the EDGAR system for compliance with filing requirements
and investor access to information, they also raise significant issues
concerning our current filing requirements that we must address as these
changes are implemented. In addition to the specific rule changes which we
discuss in Section II below, we request comment on the following issues.
We recognize that different Internet browsers used by filers or the
public may display the information presented in an HTML document in a
different fashion. A document viewed through one browser may have a
different appearance and layout from the same filing viewed through a
different browser. This problem would be especially evident when a filing
printed in hard copy from one browser appears significantly different from
the same filing printed out from another browser. We initially propose to
maximize the likelihood of consistent document appearance across different
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browsers by specifying HTML 3.2 as the required standard for HTML
documents. We request comment on our selection of a standard. We also
request comment on whether we should specify a standard screen size (e.g.,
800 by 600 pixels) for HTML document preparers to use to assure that
documents will fit most viewers' browser screens and will be printable on
most printers.
In addition to using HTML 3.2 as the standard, we also propose to
adopt a set of permissible HTML 3.2 tags for use in HTML documents during
the HTML implementation period. These permissible tags allow for most HTML
3.2 formatting capability while eliminating active content and certain
classes of hypertext links.<(28)> The tentative list of these tags,
which will be included in the EDGAR Filer Manual and updated from time to
time, appears in Appendix A to this release.<(29)> In general, the
EDGAR system will suspend filings if they contain tags that are not
permitted. We request comment on the proposed tag set, including whether
we should permit, require, or prohibit any particular tag. In particular,
we call attention to the fact that we do not plan to allow tables within
tables ("nested tables"). This is because users of EDGAR information may
find it difficult to locate and use information in documents with nested
tables.
<(28)> The 3.2 tag set will not include proprietary extensions
that are not supported by all browsers.
<(29)> We anticipate that the permitted tag set will evolve over
time to accommodate the industry standard and needs of
filers.
======END OF PAGE 16======
We anticipate proposing that, following the HTML implementation
period, HTML documents may consist of more than one HTML file. However, we
envision proposing certain restrictions on the presentation and grouping of
HTML files within a single HTML document to promote complete, readable, and
accurate printing by our staff and web users. We request comment on
technical approaches to facilitate printing of HTML documents, including
file ordering and width restrictions.
We believe that these advances will ease the burden upon filers by
enabling them to submit documents to the EDGAR system in a format similar
to the documents they present to the public and to investors. In addition,
we believe that these advances will maintain the ability for the public to
view, process and analyze the content of filings. We request comment on
whether the changes we propose will achieve these goals. We also request
comment on what other steps we can take to ease filer burden further while
maintaining the usability of the filings. We also seek comment on whether
filers will handle the shift to HTML/PDF themselves or by hiring outside
filing agents, and whether the benefits to electronic filers and the public
of HTML will exceed any associated burdens. We are particularly interested
in receiving data on whether the use of a limited set of HTML tags presents
a burden to filers.
Currently, electronic filers may make electronic submissions either as
direct transmissions or on magnetic tape or diskette.<(30)> Diskette
filings often present formatting difficulties, and the percentage of filers
using diskettes is minimal, well under one percent. As the EDGAR
<(30)> See Rules 12(b) and 12(c) of Regulation S-T [17 CFR
232.12(b) and 12(c)].
======END OF PAGE 17======
modernization effort continues, we anticipate eventually discontinuing
acceptance of electronic submissions on diskettes. We request comment on
whether diskettes remain useful for certain types of filings and whether we
should continue to permit them.
II. Rule Amendments to Accommodate EDGAR Modernization
We propose to amend certain rules and regulations, which we discuss
below, to accommodate the modernization of EDGAR. We request comment on
our proposed amendments and on whether we should amend any other rules and
regulations under the securities laws in connection with EDGAR
modernization.
A. Amendments to Regulation S-T.
We propose to amend certain provisions of Regulation S-T, which
governs the preparation and submission of electronic filings to us, as
described below in connection with the addition to the EDGAR environment of
HTML documents and unofficial PDF copies.
Rule 11 -- Definition of Terms used in Part 232. Rule 11 contains
definitions used in Regulation S-T. We propose to add to the definition
section of Regulation S-T the following new terms in connection with EDGAR
modernization: animated graphics; ASCII document; disruptive code;
electronic document; executable code, HTML document; hypertext links or
hyperlinks; and unofficial PDF copy. We also propose to revise the current
definition of "electronic filing" to make it clear that an electronic
filing may include more than one document.
New Rule 104 -- Unofficial PDF Copies Included in an Electronic
Submission.
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Proposed Rule 104 would provide that an electronic submission may include
one unofficial PDF copy of each electronic document contained within an
electronic submission.<(31)> As proposed, each unofficial PDF copy
would have to be substantively equivalent to its associated ASCII or HTML
document contained in the submission.<(32)> Filers wanting to submit
an unofficial PDF copy to replace a flawed one, or to include an omitted
one, would have to submit the unofficial PDF copy as part of another
electronic submission containing an amendment to the original submission.
The amendment would have to include an explanatory note that the purpose of
the amendment was to add or replace an unofficial PDF copy.<(33)> If
the amendment was being filed to add or resubmit an unofficial PDF copy of
one or more exhibits, the submission would need to include an exhibit
document for each exhibit for which an unofficial PDF copy was being
submitted.<(34)>
<(31)> Proposed Rule 104(a). We also would permit the filer to
submit an unofficial PDF copy of correspondence or a
cover letter document.
<(32)> See note 21 and accompanying text.
<(33)> The amendment could consist solely of the cover page (or
the first page of the document), the explanatory note,
and the signature page and exhibit index (where
appropriate), and the corresponding unofficial PDF copy
would include the complete text of the official filing
for which the amendment was being submitted.
<(34)> The amendment could consist of the cover page (or first
page of the document), the explanatory note, the
signature page (where appropriate), the exhibit index, a
separate electronic document for each exhibit for which
an unofficial PDF copy was being submitted, and the
corresponding unofficial PDF copy of each exhibit
document. However, the text of the official exhibit
document(s) could contain only the following legend:
"RESUBMITTED TO ADD/REPLACE UNOFFICIAL PDF COPY OF
EXHIBIT."
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Rule 104 would provide that unofficial PDF copies are not official
filings.<(35)> The rule would make it clear that unofficial PDF
copies that are prospectuses retain prospectus liability under Section 12
of the Securities Act.<(36)> The rule also would make it clear that
an unofficial PDF copy could contain graphic and image material even though
its ASCII (and, during the implementation period, HTML) counterpart might
not contain such material.<(37)>
We propose to accept electronic submissions even if an unofficial PDF
copy is flawed and not accepted. In such a case, we propose to accept the
submission but not the PDF document.<(38)> Otherwise, filers would
risk having a time-sensitive filing being made late because of a problem
with the unofficial PDF copy.
New Rule 105 -- Limitation on Use of HTML Documents and Unofficial
PDF Copies; Use of Hypertext Links. We propose to exclude Form N-SAR, Form
13F, and Financial Data Schedules from being submitted as HTML
documents.<(39)> These documents have standard formats and tagging
designed for presentation in ASCII, and their current format facilitates
their downloading and use in other computer applications. We request
<(35)> Proposed Rule 104(d).
<(36)> Proposed Rule 104(e).
<(37)> Proposed Rule 104(b).
<(38)> See the discussion of proposed Rule 106 below.
<(39)> Proposed Rule 105(a). We propose to allow filers the
option of submitting all exhibits to Form N-SAR except
Financial Data Schedules as HTML documents.
======END OF PAGE 20======
comment on whether we should allow unit investment trust and small business
investment company filers, who currently submit Forms N-SAR as text rather
than in standard format, to submit their Forms N-SAR in HTML.
Rule 105 as proposed would prohibit electronic filers from including
in HTML documents hypertext links to sites or documents outside the HTML
document.<(40)> However, the rule would allow electronic filers to
include hypertext links to different sections within a single HTML
document.
We recognize that use of hypertext links to external web sites and
documents in a filing may enhance filers' ability to present information as
well as the public's ability to access information. As noted above in
Section I.F, initially we will not permit such hypertext links. Links or
references in an EDGAR filing to such external sites present significant
issues concerning what constitutes an "official filing" submitted to and
accepted by us. With paper filings, or even text-based ASCII filings, an
"official filing" is encompassed entirely within the four corners of the
text documents submitted to us by the filer, as well as specific documents
incorporated by reference, and is thus easily identifiable. A document
submitted to us in HTML format, however, could include links to web sites
or other documents that reside outside the EDGAR database. The content of
these web sites or documents could change on a regular basis, even after
the "official filing" was received by us. As a result, someone trying to
determine the content of the "official filing" at a later date would not
necessarily be able to re-create the document as it was originally filed.
<(40)> Proposed Rule 105(b).
======END OF PAGE 21======
This also raises issues concerning the extent to which filers' use of
such external links could lead to liability under the securities laws. We
request comment on whether allowing hypertext links to other documents or
web sites in the future is advisable. We request comment on the impact of
such links on the definition of an official filing for regulatory and
liability purposes, as well as the impact on automated analysis systems
used by the processors and disseminators of EDGAR data. We also request
comment on what we should accept as an official filing and on possible
methods of archiving the official filing.
Proposed Rule 105 provides that, if an accepted filing includes
external links in contravention of this rule, we will not consider
information contained in the linked material to be part of the official
filing for determining compliance with reporting obligations, but such
information will be subject to the civil liability and anti-fraud
provisions of the federal securities laws.<(41)> We request comment
on the need for this proposed provision, the impact of including hypertext
links within an official filing, and the effect of different liability
provisions.
New Rule 106 -- Prohibition Against Electronic Submissions Containing
Executable Code. Our planning for the modernized EDGAR system is
designed to minimize security risks. Accordingly, new Rule 106 would
<(41)> The proposed rule provides that information contained in
the linked material is not part of the official filing
for reporting purposes in order to prevent a filing from
being considered complete when the entire content of the
filing is not available without reference to another
document. This provision should not, however, be viewed
as a statement that linked material is not considered to
be part of the filed document for other purposes.
======END OF PAGE 22======
prohibit any EDGAR submission containing executable code,<(42)>
either in any official submission or any unofficial PDF copy, at any time,
either during the HTML implementation period or subsequently. "Executable
code" includes, but is not limited to, disruptive code.<(43)> This
requirement is necessary to protect the integrity of the EDGAR system and
database, by reducing the possibility of unauthorized access to sensitive
information, and to reduce the possibility of introducing viruses or other
destructive applications into the EDGAR system (and to any disseminator
receiving data from the EDGAR system). We request comment on this proposal
and on the sanctions that we should impose if a filer or filing agent
submits a document containing executable code. We also request comment on
whether, following HTML implementation, we should continue to prohibit the
submission of all executable code.
<(42)> Executable code is defined as instructions to a computer
to carry out operations that use features beyond the
viewer's, reader's, or Internet browser's native ability
to interpret and display HTML, PDF, and static graphic
files. Such code may be in binary (machine language) or
in script form. See proposed Rule 11(n). Thus,
scripting languages, such as JavaScript and similar
scripting languages, fall into this class of executable
code, as does Java, ActiveX, Postscript, and any other
programming language.
<(43)> The term "disruptive code" means any active content or
other executable code, or any program or set of
electronic computer instructions inserted into a
computer, operating system, or program that replicates
itself or that actually or potentially modifies or in any
way alters, damages, destroys or disrupts the file
content or the operation of any computer, computer file,
computer database, computer system, computer network or
software, or as otherwise set forth in the EDGAR Filer
Manual. A violation of this provision or the relevant
provision of the EDGAR Filer Manual also may be a
violation of the Computer Fraud and Abuse Act of 1986, as
amended, and other statutes and laws.
======END OF PAGE 23======
We propose, in general, to suspend any attempted submission that our
staff determines contains executable code.<(44)> We will program the
EDGAR system to detect and prohibit acceptance of such code during
acceptance processing. If a submission is accepted, and our staff later
determines that the accepted submission contains executable code, our staff
may delete any document contained in the electronic submission from the
EDGAR system and direct the electronic filer to resubmit electronically
replacement documents for all or selected documents deleted from the
submission. We request comment on this proposal and on other possible
alternative treatment of attempted and accepted submissions containing
executable code. We are aware that suspending acceptance of a filing, or
deleting it from the EDGAR database, could have significant consequences to
the filer, such as causing a filing to miss its due date or preventing a
time-sensitive filing from moving forward. Nevertheless, we need to take
whatever steps are necessary to address potential security problems.
Rule 302 -- Signatures. Rule 302 currently provides that signatures
to or within electronic documents must be in typed form. We propose to
revise Rule 302 to make it clear that this provision relates only to
required signatures to or within electronic submissions.<(45)> We
recognize that signatures that are not required may appear as script in
<(44)> If the executable code is contained only in one or more
PDF documents, we propose to accept the submission but
not the PDF document(s).
<(45)> We propose to keep the rule that required signatures be
typed to ensure legibility of these signatures.
======END OF PAGE 24======
HTML documents once we permit graphic and image material.<(46)> We
solicit comment, however, on whether we also should accept required
signatures as script in HTML documents.
Rule 304 -- Graphic, Image, Audio and Video Material. Currently, Rule
304 prohibits the inclusion of graphic, image, or audio material in an
EDGAR document. We propose to add the word "video" to the rule to clarify
that that information also is prohibited. As discussed above in Section
I.E, as part of a later rulemaking proposal, we anticipate lifting the
prohibition on graphic and image material (but not on audio or video
material) after the HTML implementation period. Rule 304 applies only to
official filings, not to unofficial PDF copies, which may contain graphic
and image material (but not animated graphics, audio or video
material).<(47)>
Rule 305 -- Number of Characters per Line; Tabular and Columnar
Information. Currently, Rule 305 limits the number of characters per line.
We propose to add paragraph (b) to Rule 305 to provide that the limitations
of paragraph (a)<(48)> do not apply to HTML documents.<(49)>
Rule 306 -- Foreign Language Documents and Symbols. Rule 306
currently provides that foreign currency denominations be expressed in
<(46)> Proposed Rule 302. We will not require signatures in
unofficial PDF copies.
<(47)> See proposed Rule 104.
<(48)> I.e., the narrative portion of an electronic document may
not exceed certain character limitations per line and
other formatting restrictions.
<(49)> Proposed Rule 305(b).
======END OF PAGE 25======
words or letters in the English language rather than representative
symbols. We propose to amend Rule 306 to allow HTML documents to include
the representative foreign currency symbols specified in the EDGAR Filer
Manual and to provide that the limitations would not apply to documents
which are unofficial PDF copies.
Rules 307 -- Bold-Face Type. Rule 307 currently states that filers
should present required bold-face type as capital letters in ASCII
documents. We propose to amend this rule to make it clear that the current
provision does not apply to HTML documents, since filers are able to
include bold-face type in HTML documents.
Rule 310 -- Marking Changed Material. Currently, Rule 310 provides
that the marking of changed materials is satisfied by inserting the tag
before and the tag following a paragraph containing changed material.
We propose to retain this redlining convention and extend it to HTML
documents. Further, we propose to allow filers to mark changed material in
HTML documents within paragraphs, as well.<(50)>
B. Other Rule Amendment in Connection with EDGAR Modernization
Currently, paragraph (k)(2)(ii) of Rule 497<(51)> requires
filers to submit additional copies of certain forms of profiles in the
primary form intended for distribution to investors (e.g., paper or
<(50)> Filers should not redline PDF documents. While the EDGAR
system will remove the redlining tags from HTML documents
before they are publicly disseminated (just as is
currently the case with ASCII documents), the EDGAR
system will not remove the redlining tags from PDF
documents. Therefore, if a filer includes redlining tags
in a PDF document, the disseminated PDF document will
contain redlining tags.
<(51)> 17 CFR 230.497(k)(2)(ii).
======END OF PAGE 26======
electronic media) or, if the profile is distributed primarily on the
Internet, to provide the URL of the profile pages(s) in an exhibit to the
electronic filing. We propose to amend paragraph (k)(2)(ii) of Rule 497 to
allow the electronic filer to submit with its electronically filed
definitive form of profile an unofficial PDF copy of the profile instead.
C. Miscellaneous Amendments
We also propose several electronic filing rule amendments not directly
associated with EDGAR modernization.
1. Amendments to Regulation S-T
Rule 10 -- Form ID. Rule 10 provides that filers must file Form ID,
the uniform application for access codes to file on the EDGAR system,
before they begin electronic filing. We propose to amend Rule 10 to make
it clear that filers must submit Form ID in paper format. We are
investigating other methods of beginning electronic filing, but these would
not become available until after the HTML implementation period. We
request comment on more convenient methods of submitting Form ID and
initiating electronic filing.
Rule 101(a) -- Mandated Electronic Submissions and Exceptions.
Currently, the note to paragraph (a)(1)(iii) of Rule 101 instructs filers
filing Schedules 13D and 13G with respect to foreign private issuers to
file in paper because one of the required data elements -- the IRS tax
identification number -- is not available for foreign issuers. However, a
paper filing is no longer necessary. The staff currently advises these
filers to include in the EDGAR submission header all zeroes (i.e.,
00-0000000) for the IRS tax identification number, so that they may file
======END OF PAGE 27======
electronically. We propose to amend the note to this rule to formalize the
existing practice and permit electronic filing.
Rules 101(b), 102(e), and 303 -- Permitted Electronic Submissions;
Exhibits; and Incorporation by Reference.
Currently, electronic filers may still submit exhibits to Forms N-SAR,
other than the Financial Data Schedule, either electronically or in
paper.<(52)> We have allowed filers to submit these exhibits in
paper because, during phase-in to electronic filing, registrants could file
their Forms N-SAR electronically on a voluntary basis in advance of their
phase-in date, at a time when they were not able to make any other
electronic filings. Since phase-in is complete, we propose to require that
filers submit all Form N-SAR exhibits electronically.<(53)>
We also propose to remove the references to phase-in for registered
investment companies and business development companies, since phase-in has
been completed.
2. Other Rule Amendments
Item 22(a)(4) of Schedule 14A and Forms N-1, N-1A, N-2, N-3, N-4, N-5,
and S-6 -- Financial Data Schedules. We propose to revise provisions
concerning Financial Data Schedules ("Schedules") submitted by registered
investment companies and business development companies. We believe that
<(52)> See Rules 101(b)(8), 102(e)(2), and 303(a)(3)(ii) [17 CFR
101(b)(8), 102(e)(2), and 202(a)(3)(ii)].
<(53)> We also propose to remove the last sentence of
Instruction F(2) of Form N-SAR [17 CFR 274.101], which
currently allows filers to submit exhibits to the form in
paper, and to remove the exemption for small business
investment companies, which are now phased-in to
electronic filing. Finally, we are proposing to revise
Instruction F(1) to correctly reference "Sub-Item 77Q1:
Exhibits."
======END OF PAGE 28======
electronic filers that are registered investment companies will provide us
with sufficient financial information in Schedule form by filing their
Schedules with their Forms N-SAR.<(54)> Therefore, we propose to
remove the requirement for registered investment companies to submit
Schedules with other forms and submissions.<(55)> Business
development companies will continue to submit Schedules with their Form 10-
K filings; face amount certificate companies and other investment companies
filing on forms not unique to investment companies will continue to submit
Schedules with the relevant forms.<(56)>
Investment Company Act Rules 8b-23 and 8b-32 -- Incorporation by
Reference; Incorporation of Exhibits by Reference. We propose to make
minor revisions to Rules 8b-23 and 8b-32<(57)> to remove the
reference to Regulation S-T Rule 102, since this reference is no longer
relevant following completion of phase-in by investment company
registrants.
III. GENERAL REQUEST FOR COMMENT
<(54)> Unit investment trusts are not required to submit the
Schedule with their N-SARs.
<(55)> See proposed revisions to Item 22(a)(4) of Schedule 14A
[17 CFR 240.101]; and Forms N-1 [239.15 and 274.11], N-
1A [239.15A and 274.11A], N-2 [239.14 and 274.11a-1],
N-3 [239.17a and 274.11b], N-4 [239.17b and 274.11c],
N-5 [239.24 and 274.5], and S-6 [239.16]. We also
propose to revise Rules 485, 486, 487, and 495 [17 CFR
230.485, 486, 487, and 495], which refer to Financial
Data Schedule requirements within registration statement
forms.
<(56)> See Rule 483(e)(2)(ii) [17 CFR 483(e)(2)(ii)].
<(57)> 17 CFR 270.8b-23 and 8b-32.
======END OF PAGE 29======
You are invited to submit written comments relating to the rule
proposals set forth in this release by submitting three copies to Jonathan
G. Katz, Secretary, U.S. Securities and Exchange Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549-0609. You also may submit your
comments electronically at the following e-mail address:
rule-comments@sec.gov. Your comment letter should refer to File No.
S7-9-99; include this file number in the subject line if you use e-mail.
We will make comment letters available for your inspection and copying in
our Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549.
We also will post any electronically submitted comment letters on our
Internet Web Site (http://www.sec.gov).
We request comment not only on the specific issues we discuss in this
release, but on any other approaches or issues that we should consider in
connection with the EDGAR modernization that we envision. We seek comment
from the point of view of parties required to file information with us via
the EDGAR system, as well as that of investors, disseminators of EDGAR
data, and other members of the public who have access to and use
information from the EDGAR system.
IV. COST-BENEFIT ANALYSIS
We expect that the envisioned EDGAR modernization will eventually
result in considerable benefit to the securities markets, investors, and
other members of the public, by expanding the types of information and
available media that can be filed and made available for public review
through the EDGAR system. We also envision that the changes will
eventually result in economic benefits to filers by easing their burden in
filing required materials through the EDGAR system. The vastly expanding
======END OF PAGE 30======
quantities of information that are made available to the public through the
Internet are predominantly presented in HTML format. The EDGAR system's
ability to accept filings submitted in this format means that filers will
eventually be able to file required documents with us in a format similar
to that they already use in making documents available to the public, thus
easing the burden that filing requirements place upon filers.
The rule proposals are not intended to substantively change the
information and disclosures that are required to be submitted to us under
the current filing requirements. Rather, they are intended to modify
current rules to reflect the expanded types of media and modes of
presentation through which information can be submitted to us
electronically once the EDGAR system is modernized.
We encourage commenters to identify any other costs or benefits
associated with the rule proposals that have not been addressed. In
particular, please identify any costs or benefits associated with the rule
proposals relating to the contents of an "official filing," impermissible
types of code and content, hypertext links to external documents or web
sites, variations in the appearance of an "official filing" that is
accessed through different browsers, and any impact that the rule proposals
may have on the ease of locating and using EDGAR data.
For purposes of the Small Business Regulatory Enforcement Fairness Act
of 1996, we request information regarding the potential impact of the
proposed amendments on the economy on an annual basis. In particular,
comments should address whether the proposed changes, if adopted, would
have a $100,000,000 annual effect on the economy, cause a major increase in
costs or prices, or have a significant adverse effect on competition,
======END OF PAGE 31======
investment, or innovations. Commenters should provide empirical data to
support their views.
Section 23(a)(2) of the Exchange Act requires us, in adopting rules
under the Exchange Act, to consider the anti-competitive effects of any
rules we adopt thereunder. Furthermore, Section 2(b) of the Securities
Act, Section 3(f) of the Exchange Act, and Section 2(c) of the Investment
Company Act require us, when engaging in rulemaking, and considering or
determining whether an action is necessary or appropriate in the public
interest, to consider whether the action will promote efficiency,
competition, and capital formation.
We preliminarily believe that the proposed rule and amendments would
not have an effect on competition. The proposed rules and amendments apply
equally to all entities currently required to file on EDGAR. Moreover, the
proposed rules and amendments are designed in part to permit filers to
provide information in a format that will be more useful to investors. We
request comment on any burden on efficiency, competition, or capital
formation that might result from the adoption of these proposals.
V. SUMMARY OF REGULATORY FLEXIBILITY ACT CERTIFICATION
Our Chairman has certified, under Section 605(b) of the Regulatory
Flexibility Act, 5 U.S.C. 605(b), that the new rules and rule amendments we
propose in this release (the "Proposals") would not, if adopted, have a
significant economic impact on a substantial number of small entities. The
certification, documenting the factual basis therefor, is attached to this
Release as Appendix B. We encourage written comments on the Certification.
We ask commenters to describe the nature of any impact on small entities
and provide empirical data to support the extent of the impact.
======END OF PAGE 32======
VI. PAPERWORK REDUCTION ACT
The new rules and amendments do not come within the scope of the
Paperwork Reduction Act of 1995<(58)> because the new rules and
amendments do not create a new collection of information.<(59)>
VII. STATUTORY BASIS
We propose the rule amendments outlined above under Sections 6, 7, 8,
10 and 19(a) of the Securities Act, Sections 3, 12, 13, 14, 15(d), 23(a)
and 35A of the Exchange Act, Sections 3, 5, 6, 7, 10, 12, 13, 14, 17 and 20
of the Public Utility Holding Company Act of 1935, <(60)> Section 319
of the Trust Indenture Act of 1939, <(61)> and Sections 8, 30, 31 and
38 of the Investment Company Act of 1940.<(62)>
List of Subjects
17 CFR Parts 230 and 270
Confidential business information, Investment companies, Reporting and
recordkeeping requirements, Securities.
17 CFR Part 232
Administrative practice and procedure, Confidential business
information, Reporting and recordkeeping requirements, Securities.
17 CFR Part 239
<(58)> 44 U.S.C. 3501 et seq.
<(59)> 5 CFR 1320.5(g).
<(60)> 15 U.S.C. 79a et seq.
<(61)> 15 U.S.C. 77aaa et seq.
<(62)> 15 U.S.C. 80a-1 et seq.
======END OF PAGE 33======
Reporting and recordkeeping requirements, Securities.
17 CFR Part 240
Confidential business information, Reporting and recordkeeping
requirements, Securities.
17 CFR Part 274
Investment companies, Reporting and recordkeeping requirements,
Securities.
TEXT OF THE PROPOSED AMENDMENTS
In accordance with the foregoing, Title 17, Chapter II of the Code of
Federal Regulations is proposed to be amended as follows:
PART 230 - GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933
1. The authority citation for Part 230 continues to read in part as
follows:
Authority: 15 U.S.C. 77b, 77f, 77g, 77h, 77j, 77r, 77s, 77sss, 78c,
78d, 78l, 78m, 78n, 78o, 78w, 78ll(d), 79t, 80a-8, 80a-24, 80a-28, 80a-29,
80a-30, and 80a-37, unless otherwise noted.
* * * * *
2. By amending 230.485 by removing paragraph (f)(2) before the Note
and redesignating paragraph (f)(1) as paragraph (f).
3. By amending 230.486 by removing paragraph (f)(2) before the Note
and redesignating paragraph (f)(1) as paragraph (f).
4. By amending 230.487 by removing paragraph (d)(2) and
redesignating paragraph (d)(1) as paragraph (d).
5. By amending 230.495 by removing paragraph (e)(2) and
redesignating paragraph (e)(1) as paragraph (e).
======END OF PAGE 34======
6. By amending 230.497 by adding a sentence before the last
sentence in paragraph (k)(2)(ii) to read as follows:
230.497 Filing of investment company prospectuses -- number of copies.
(a) * * *
* * * * *
(k)(1) * * *
(2) Filing procedures. (i) * * *
(ii) * * * Filers may fulfill the requirements of this paragraph by
submitting with their definitive form of profile filed electronically under
paragraph (k)(1)(ii) of this section an unofficial PDF copy of the profile
in accordance with 232.104 of this chapter. * * *
PART 232 -- REGULATION S-T -- GENERAL RULES AND REGULATIONS FOR
ELECTRONIC FILINGS
7. The authority citation for Part 232 continues to read as follows:
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 77sss(a), 78c(b),
78l, 78m, 78n, 78o(d), 78w(a), 78ll(d), 79t(a), 80a-8, 80a-29, 80a-30 and
80a-37.
8. By amending 232.10 by revising paragraph (b) before the Note to
read as follows:
232.10 Application of part 232.
* * * * *
(b) Each registrant, third party, or agent must file in paper format a
Form ID ( 239.63, 249.446, 259.602, 269.7 and 274.402 of this chapter),
the uniform application for access codes to file on EDGAR, before beginning
to file electronically.
* * * * *
======END OF PAGE 35======
9. By amending 232.11 by redesignating paragraphs (a) as (c), (b)
as (d), (c) as (f), (d) as (g), (e) as (i), (f) as (j), (g) as (k), (h) as
(l), (i) as (m), (j) as (p), (k) as (r), (l) as (s), (m) as (t), (n) as
(u), (o) as (v), (p) as (w), (q) as (x), (r) as (y), (s) as (z), (t) as
(aa), (u) as (bb), (v) as (cc) and (w) as (dd); by revising newly
redesignated paragraph (j); and by adding paragraphs (a), (b), (e), (h),
(n), (o), (q) and (ee) to read as follows:
232.11 Definition of terms used in part 232.
* * * * *
(a) Animated graphics. The term animated graphics means text or
images that do not remain static but that move when viewed in a browser.
(b) ASCII document. The term ASCII document means an electronic text
document with contents limited to American Standard Code for Information
Interchange ("ASCII") characters and that is tagged with Standard
Generalized Mark Up Language ("SGML") tags in the format required for
ASCII/SGML documents by the EDGAR Filer Manual.
* * * * *
(e) Disruptive code. The term disruptive code means any active
content or other executable code, or any program or set of electronic
computer instructions inserted into a computer, operating system, or
program that replicates itself or that actually or potentially modifies or
in any way alters, damages, destroys or disrupts the file content or the
operation of any computer, computer file, computer database, computer
system, computer network or software, and as otherwise set forth in the
EDGAR Filer Manual.
* * * * *
======END OF PAGE 36======
(h) Electronic document. The term electronic document means the
portion of an electronic submission separately tagged as an individual
document in the format required by the EDGAR Filer Manual.
* * * * *
(j) Electronic filing. The term electronic filing means one or more
electronic documents filed under the federal securities laws that are
transmitted or delivered to the Commission in electronic format.
* * * * *
(n) Executable code. The term executable code means instructions to a
computer to carry out operations that use features beyond the viewer's,
reader's, or Internet browser's native ability to interpret and display
HTML, PDF, and static graphic files. Such code may be in binary (machine
language) or in script form. Executable code includes disruptive code.
(o) HTML document. The term HTML document means an electronic text
document tagged with HyperText Markup Language tags in the format required
by the EDGAR Filer Manual.
* * * * *
(q) Hypertext links or hyperlinks. The term hypertext links or
hyperlinks means the representation of an Internet address in a form that
an Internet browser application can recognize as an Internet address.
* * * * *
(ee) Unofficial PDF copy. The term unofficial PDF copy means an
optional copy of an electronic document that may be included in an EDGAR
submission tagged as a Portable Document Format document in the format
required by the EDGAR Filer Manual and submitted in accordance with Rule
104 of Regulation S-T ( 232.104).
======END OF PAGE 37======
10. By amending 232.101 by revising the note to paragraph
(a)(1)(iii) and by removing paragraph (b)(7) to read as follows:
232.101 Mandated electronic submissions and exceptions.
(a) Mandated electronic submissions. (1) * * *
(iii) * * *
Note to paragraph (a)(1)(iii). Electronic filers filing Schedules 13D
and 13G with respect to foreign private issuers should include in the
submission header all zeroes (i.e., 00-0000000) for the IRS tax
identification number, since the EDGAR system requires an IRS number to be
inserted for the subject company as a prerequisite to acceptance of the
filing.
* * * * *
11. By amending 232.102 by revising paragraph (e) to read as
follows:
232.102 Exhibits.
(a) * * *
* * * * *
(e) Notwithstanding the provisions of paragraphs (a) through (d) of
this section, any incorporation by reference by a registered investment
company or a business development company must relate only to documents
that have been filed in electronic format, unless the document has been
filed in paper under a hardship exemption ( 232.201 or 232.202) and any
required confirming copy has been submitted.
* * * * *
12. By adding 232.104, 232.105 and 232.106 to read as follows:
232.104 Unofficial PDF copies included in an electronic submission.
======END OF PAGE 38======
(a) An electronic submission may include one unofficial PDF copy of
each electronic document contained within that submission, tagged in the
format required by the EDGAR Filer Manual.
(b) Except as provided in paragraph (c) of this section, each
unofficial PDF copy must be substantively equivalent to its associated
electronic document contained in the electronic submission. An unofficial
PDF copy may contain graphic and image material (but not animated graphics,
or audio or video material), notwithstanding the fact that its HTML or
ASCII document counterpart may not contain such material but must contain a
fair and accurate narrative description or tabular representation of any
omitted graphic or image material.
(c) If a filer omits an unofficial PDF copy from, or submits one or
more flawed unofficial PDF copies in, the electronic submission of an
official filing, the filer may add or resubmit an unofficial PDF copy by
electronically submitting an amendment to the filing to which it relates.
The amendment should include an explanatory note that the purpose of the
amendment is to add or to correct an unofficial PDF copy.
(1) If such an amendment is filed, the official amendment may consist
solely of the cover page (or first page of the document), the explanatory
note, and the signature page and exhibit index (where appropriate). The
corresponding unofficial copy must include the complete text of the
official filing document for which the amendment is being submitted.
(2) If the amendment is being filed to add or resubmit an unofficial
PDF copy of one or more exhibits, the submission may consist of the
following: the official filing -- consisting of the cover page (or first
page of the document), the explanatory note, the signature page (where
======END OF PAGE 39======
appropriate), the exhibit index, and a separate electronic exhibit document
for each exhibit for which an unofficial PDF copy is being submitted -- and
the corresponding unofficial PDF copy of each exhibit document. However,
the text of the official exhibit document need not repeat the text of the
exhibit; that document may contain only the following legend: "RESUBMITTED
TO ADD/REPLACE UNOFFICIAL PDF COPY OF EXHIBIT."
(d) An unofficial PDF copy is not filed for purposes of section 11 of
the Securities Act (15 U.S.C. 77k), section 18 of the Exchange Act (15
U.S.C. 78r), section 16 of the Public Utility Act (15 U.S.C. 79p), section
323 of the Trust Indenture Act (15 U.S.C. 77www), or section 34(b) of the
Investment Company Act (15 U.S.C. 80a-33(b)), or otherwise subject to the
liabilities of such sections, and is not part of any registration statement
to which it relates. An unofficial PDF copy is, however, subject to all
other civil liability and anti-fraud provisions of the above Acts or other
laws.
(e) Unofficial PDF copies that are prospectuses are subject to
liability under Section 12 of the Securities Act (15 U.S.C. 77l).
232.105 Limitation on Use of HTML Documents and Hypertext Links.
(a) Electronic filers must submit the following documents in ASCII:
Form N-SAR (274.101 of this chapter), Form 13F (249.325 of this chapter),
and Financial Data Schedules submitted in accordance with Item 601(c) of
Regulation S-K (229.601(c) of this chapter), Item 601(c) of Regulation S-B
(228.601(c) of this chapter), or Rule 483(e) (230.483(e) of this
chapter). Notwithstanding the foregoing provision, electronic filers may
submit exhibits to Form N-SAR in HTML, except for Financial Data Schedules,
which filers must submit in ASCII.
======END OF PAGE 40======
(b) Electronic filers may not include in any HTML document hypertext
links to sites, locations, or documents outside the HTML document,
including links to exhibit documents. Electronic filers may include within
an HTML document hypertext links to different sections within that single
HTML document.
(c) If, notwithstanding paragraph (b) of this section, electronic
filers include hypertext links to external sites within a submission,
information contained in such links will not be considered part of the
official filing for determining compliance with reporting obligations;
however, this information is subject to the civil liability and anti-fraud
provisions of the federal securities laws.
232.106 Prohibition against electronic submissions containing executable
code.
(a) Electronic submissions must not contain executable code.
Attempted submissions identified as containing executable code will be
suspended, unless the executable code is contained only in one or more PDF
documents, in which case the submission will be accepted but the PDF
document(s) containing executable code will be deleted and not
disseminated.
(b) If an electronic submission has been accepted, and the Commission
staff later determines that the accepted submission contains executable
code, the staff may delete from the EDGAR system the entire accepted
electronic submission or any document contained in the accepted electronic
submission. The Commission staff may direct the electronic filer to
resubmit electronically replacement document(s) or a replacement submission
======END OF PAGE 41======
in its entirety, in compliance with this provision and the EDGAR Filer
Manual.
Note to 232.106: A violation of this section or the relevant EDGAR
Filer Manual section also may be a violation of the Computer Fraud and
Abuse Act of 1986, as amended, and other statutes and laws.
16. By amending 232.302 by revising paragraph (a) to read as
follows:
232.302 Signatures.
(a) Required signatures to or within any electronic submission must be
in typed form rather than manual format. When used in connection with an
electronic filing, the term "signature" means an electronic entry in the
form of a magnetic impulse or other form of computer data compilation of
any letter or series of letters or characters comprising a name, executed,
adopted or authorized as a signature. Signatures are not required in
unofficial PDF copies submitted in accordance with Rule 104 of Regulation
S-T ( 232.104).
* * * * *
17. By amending 232.303 by revising paragraph (a)(3) to read as
follows:
232.303 Incorporation by reference.
(a) * * *
(3) For a registered investment company or a business development
company, documents that have not been filed in electronic format, unless
the document has been filed in paper under a hardship exemption ( 232.201
or 232.202 of this chapter) and any required confirming copy has been
submitted.
======END OF PAGE 42======
* * * * *
18. By amending 232.304 by revising the section heading, paragraphs
(a) and (b) and the first sentence of paragraph (c) to read as follows:
232.304 Graphic, image, audio and video material.
(a) If a filer includes graphic, image, audio or video material in a
document delivered to investors and others that may not, in accordance with
the requirements of the EDGAR Filer Manual, be reproduced in an electronic
filing, the electronically filed version of that document must include a
fair and accurate narrative description, tabular representation or
transcript of the omitted material. Such descriptions, representations or
transcripts may be included in the text of the electronic filing at the
point where the graphic, image, audio or video material is presented in the
delivered version, or they may be listed in an appendix to the electronic
filing. Immaterial differences between the delivered and electronically
filed versions, such as pagination, color, type size or style, or corporate
logo need not be described.
(b)(1) The graphic, image, audio and video material in the version of
a document delivered to investors and others shall be deemed part of the
electronic filing and subject to the civil liability and anti-fraud
provisions of the federal securities laws.
(2) Narrative descriptions, tabular representations or transcripts of
graphic, image, audio and video material included in an electronic filing
or appendix thereto also shall be deemed part of the filing. However, to
the extent such descriptions, representations or transcripts represent a
good faith effort to fairly and accurately describe omitted graphic, image,
======END OF PAGE 43======
audio or video material, they shall not be subject to the civil liability
and anti-fraud provisions of the federal securities laws.
(c) An electronic filer shall retain for a period of five years a copy
of each publicly distributed document, in the format used, that contains
graphic, image, audio or video material where such material is not included
in the version filed with the Commission. * * *
* * * * *
19. By amending 232.305 by designating the existing text as
paragraph (a) and adding paragraph (b) to read as follows:
232.305 Number of characters per line; tabular and columnar information.
(a) * * *
(b) Paragraph (a) of this section does not apply to HTML documents.
20. By amending 232.306 by revising paragraph (b) to read as
follows:
232.306 Foreign language documents and symbols.
(a) * * *
(b) Foreign currency denominations must be expressed in words or
letters in the English language rather than representative symbols, except
that HTML documents may include any representative foreign currency symbols
that the EDGAR Filer Manual specifies. The limitations of this paragraph
do not apply to unofficial PDF copies submitted in accordance with Rule 104
of Regulation S-T ( 232.104).
21. By amending 232.307 by designating the existing language as
paragraph (a) and by adding paragraph (b) to read as follows:
232.307 Bold-Face Type.
(a) * * *
======END OF PAGE 44======
(b) Paragraph (a) of this section does not apply to HTML documents.
22. By revising 232.310 to read as follows:
232.310 Marking Changed Material.
Provisions requiring the marking of changed materials are satisfied in
ASCII and HTML documents by inserting the tag before and the tag
following a paragraph containing changed material. HTML documents may be
marked to show changed materials within paragraphs. Financial statements
and notes thereto need not be marked for changed material.
PART 239 -- FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933
23. The authority citation for Part 239 continues to read in part as
follows:
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2,77sss, 78c, 78l,
78m, 78n, 78o(d), 78u-5, 78w(a), 78ll(d), 79e, 79f, 79g, 79j, 79l, 79m,
79n, 79q, 79t, 80a-8, 80a-24, 80a-29, 80a-30 and 80a-37, unless otherwise
noted.
24. By amending Form S-6 (referenced in 239.16) by removing
Instruction 5 of Instructions as to Exhibits.
Note -- The text of Form S-6 and the amendments will not appear in the
Code of Federal Regulations.
PART 240 -- GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF
1934
24. The authority citation for Part 240 continues to read in part as
follows:
Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77eee, 77ggg,
77nnn, 77sss, 77ttt, 78c, 78d, 78f, 78i, 78j, 78j-1, 78k, 78k-1, 78l, 78m,
78n, 78o, 78p, 78q, 78s, 78u-5, 78w, 78x, 78ll(d), 79q, 79t, 80a-20,
80a-23, 80a-29, 80a-37, 80b-3, 80b-4 and 80b-11, unless otherwise noted.
======END OF PAGE 45======
* * * * *
25. By amending 240.14a-101 by removing paragraph (a)(4) of Item 22.
PART 270 -- RULES AND REGULATIONS, INVESTMENT COMPANY ACT OF 1940
26. The authority citation for Part 270 continues to read in part as
follows:
Authority: 15 U.S.C. 80a-1 et seq., 80a-34(d), 80a-37, 80a-39 unless
otherwise noted:
* * * * *
27. By amending 270.8b-23 by revising paragraph (a) to read as
follows:
270.8b-23 Incorporation by reference.
(a) Any registrant may incorporate by reference, in answer or partial
answer to any item of a registration statement or report, any information
contained elsewhere in the statement or report or any information contained
in any other statement, report or prospectus filed with the Commission
under any Act administered by it, so long as a copy of the other statement,
report or prospectus is filed with each copy of the registration statement
or report in which it is incorporated by reference. In the case of a
registration statement, report, or prospectus filed in electronic format,
the registrant need not file a copy of the document incorporated by
reference if that document also was filed in electronic format. A
registrant may incorporate by reference matter contained in an exhibit,
however, only to the extent permitted by 270.8b-24 and 270.8b-32. A
registrant may not incorporate by reference a Financial Data Schedule.
* * * * *
======END OF PAGE 46======
28. By amending 270.8b-32 by revising paragraph (c) to read as
follows:
270.8b-32 Incorporation of exhibits by reference.
* * * * *
(c) Electronic filings.
(1) A registrant may incorporate by reference into a registration
statement or report required to be filed electronically only exhibits that
have been filed in electronic format, unless the exhibit has been filed in
paper under a hardship exemption ( 232.201 or 232.202 of this chapter) and
any required confirming copy has been submitted.
(2) Notwithstanding paragraph (c)(1) of this section, a registrant may
not incorporate by reference a Financial Data Schedule.
PART 274 -- FORMS PRESCRIBED UNDER THE INVESTMENT COMPANY ACT OF 1940
29. The authority citation for Part 274 continues to read as follows:
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 78c(b), 78l, 78m, 78n,
78o(d), 80a-8, 80a-24, and 80a-29, unless otherwise noted.
30. By amending Form N-SAR (referenced in 274.101) by revising
General Instruction F to read as follows:
Note -- The text of Form N-SAR and the amendments will not appear in
the Code of Federal Regulations.
Instructions and Form
FORM N-SAR
SEMI-ANNUAL REPORT
FOR REGISTERED INVESTMENT COMPANIES
* * * * *
GENERAL INSTRUCTIONS
======END OF PAGE 47======
* * * * *
F. Filings on EDGAR.
(1) Attention is directed to Sub-Item 77Q1: Exhibits for certain
items of financial information that are required (Financial Data Schedule).
(2) Management investment companies must file Form N-SAR
electronically only by direct electronic submission, and in accordance with
the EDGAR Filer Manual. Filing of the form on magnetic tapes or diskettes
is not permitted.
* * * * *
PART 239 - FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933
PART 274 -- FORMS PRESCRIBED UNDER THE INVESTMENT COMPANY ACT OF 1940
Note -- The text of Forms N-2, N-1, N-1A, N-3, N-4 and N-5 and the
amendments will not appear in the Code of Federal Regulations.
31. By amending Form N-2 (referenced in 239.14 and 274.11a-1) by
removing General Instruction I and redesignating General Instruction J as
General Instruction I and removing paragraph 2.r of Item 24 of Part C.
32. By amending Form N-1 (referenced in 239.15 and 274.11) by
removing General Instruction H and paragraph (b)(16) to Item 1 of Part II.
33. By amending Form N-1A (referenced in 239.15A and 274.11A) by
removing paragraph (n) of Item 23 and by redesignating paragraph (o) of
Item 23 as paragraph (n).
34. By amending Form N-3 (referenced in 239.17a and 274.11b) by
removing General Instruction J and paragraph (b)(17) to Item 28 of Part C.
35. By amending Form N-4 (referenced in 239.17b and 274.11c) by
removing General Instruction J and paragraph (b)(14) to Item 24 of Part C
======END OF PAGE 48======
and redesignating paragraphs (b)(15) through (b)(17) as paragraphs (b)(14)
through (b)(16).
36. By amending Form N-5 (referenced in 239.24 and 274.5) by
removing General Instruction H and Instruction 13 to Instructions as to
Exhibits.
By the Commission.
Jonathan G. Katz
Secretary
Dated: March 10, 1999
======END OF PAGE 49======
Note: Appendix A and Appendix B to the preamble do not appear in the
Code of Federal Regulations.
APPENDIX A -- ACCEPTABLE TAGS FOR HTML DOCUMENTS
Acceptable HTML 3.2 Tags -- Document Header
Non-Format Tags Definition
Identifies text as HTML document
Comment does not appear in browser, only in HTML
source
Anchor/Hyperlink
[NOTE: For the attribute HREF, external references are
not supported; however, Bookmark (internal) references
will be supported]
Signifies the body of the HTML document
[NOTE: The BACKGROUND attribute is not supported for
this tag]
Signifies header information for HTML document
Signifies document is an index for a search engine
Base URL to be used by all links in the document
Like a hyperlink, but only contained within header
Extended information to be included in document header
[NOTE: The HTTP-EQUIV attribute is not supported for
this tag]
Title of document. It is displayed at the top of the
browser
Acceptable HTML 3.2 Tags -- Within Document
Format-Specific Tags Definition
(change the appearance
of the text only)
<~<> Escape Sequences Used to display characters normally
reserved (such as "<") as plain text in the HTML
document
<A> Anchor/Hyperlink
======END OF PAGE 50======
[NOTE: For the attribute HREF, external references are
not supported; however, Bookmark (internal) references
will be supported]
<ADDRESS> Address Usually italicized
<B> Bold
<BLOCKQUOTE> Block Quote Usually indented
<BR> Line Break
<CITE> Citation
<CODE> Code
<DIR> Directory List
<DL> Definition List Used with <DT> and <DD>
<DT> Definition Term
<DD> Definition
<EM> Emphasized - Like Bold
<H1> Heading 1 - Largest
<H2> Heading 2
<H3> Heading 3
<H4> Heading 4
<H5> Heading 5
<H6> Heading 6 - Smallest
======END OF PAGE 51======
<HR> Horizontal Rule Displays a thin line across the page
separating text
<I> Italic
<KBD> Keyboard Preformatted text
<LI> List Item Used by <DIR>, <MENU>, <OL>, and <UL>
<LISTING> Listing Same as <PRE>
<MENU> Menu List
<OL> Ordered List Includes numbers
<P> Paragraph
<PLAINTEXT> Plain Text
<PRE> Preformatted Text
<SAMP> Sample Uses fixed width font - Like <PRE>
<STRIKE> Strikethrough
<STRONG> Strong Similar to bold
<TT> Teletype Uses fixed width font - Like <PRE>
<U> Underlined
<UL> Unordered List Bullets only
<VAR> Variable Uses fixed width font - Like <PRE>
======END OF PAGE 52======
<XMP> Example Same as <PRE>
<BIG> Big Text - Increases font size
<CAPTION> Caption Can only be used with tables
<CENTER> Centers elements between tags
<DFN> Definition Like <I>
<DIV> Division Helps separate a document into parts
<FONT> Allows alteration of font contained within tags
<SMALL> Small Text - Decreases font size
<SUB> Subscript
<SUP> Superscript
<TABLE> Table
[NOTE: No HTML documents with nested <TABLE> tags are
to be accepted or disseminated by EDGAR]
<TD> Table Data or Cell
<TH> Table Header Displayed in bold
<TR> Table Row
Acceptable Legacy SGML Tags -- Within HTML Documents
Non-Standard Tags Definition
======END OF PAGE 53======
<PAGE> SGML tag for page markers (browsers will ignore this
tag if present)
<R> [NOTE: The <R> tag can also be represented as <R>]
</R> [Second NOTE: the <R> tag will not be publicly
disseminated; it is for SEC use only.]
<SEGMENTS>
</SEGMENTS>
<MODULE>
<NAME>
<CIK>
<CCC>
</MODULE> For incorporation of document text at the Host
[NOTE: These tags will not be publicly disseminated]
======END OF PAGE 54======
APPENDIX B -- REGULATORY FLEXIBILITY ACT CERTIFICATION
I, Arthur Levitt, Chairman of the Securities and Exchange Commission,
hereby certify, pursuant to 5 U.S.C. 605(b), that the proposed amendments
to Rules 485, 486, 487, 495, and 497,<(63)> and Form S-6,<(64)>
under the Securities Act of 1933 ("Securities Act"),<(65)> Rules 10,
11, 101, 102, 302, 303, 304, 305, 306, 307, and 310 of Regulation S-
T<(66)> under the Securities Act, Schedule 14A<(67)> under the
Securities Exchange Act of 1934 ("Exchange Act"),<(68)> Rules 8b-23
and 8b-32,<(69)> and Form N-SAR,<(70)> under the Investment
Company Act of 1940 ("Investment Company Act"),<(71)> and Forms N-1,
<(63)> 17 CFR 230.485, 486, 487, 495, and 497.
<(64)> 17 CFR 239.16.
<(65)> 15 U.S.C. 77a et seq.
<(66)> 17 CFR 232.10, 11, 101, 102, 302, 303, 304, 305, 306,
307, and 310.
<(67)> 17 CFR 240.101.
<(68)> 15 U.S.C. 78a et seq.
<(69)> 17 CFR 270.8b-23 and 8b-32.
<(70)> 17 CFR 274.101.
<(71)> 15 U.S.C. 80a-1 et seq.
======END OF PAGE 55======
N-1A, N-2, N-3, N-4, and N-5<(72)> under the Securities Act and the
Investment Company Act; and the addition of new Rules 104, 105, 106, and
107 under Regulation S-T, as set forth in Release Number 33-7653 (together,
the "Proposals"), if adopted, would not have a significant economic impact
on a substantial number of small entities.
The Proposals generally would not have a significant economic impact
on a substantial number of small entities because they would only provide
filers additional options for making their submissions on the Commission's
Electronic Data Gathering, Analysis, and Retrieval ("EDGAR") system, which
they may choose to use on a voluntary basis; codify several existing
interpretations and practices relating to the preparation, filing, and
processing of electronic documents; remove the requirement for submission
of a financial data schedule exhibit for certain filings made by investment
companies; and make technical corrections to current rules. Therefore, the
Proposals would not have a significant economic impact on a substantial
number of small entities within the definitions of "small business" and
"small organization" (together, "small entities") set forth in Rule 0-
10<(73)> under the Investment Company Act, Rule 0-7<(74)> under
<(72)> 17 CFR 239.15 and 274.11, 17 CFR 15A and 274.11A, 17 CFR
239.14 and 274.11a-1, 17 CFR 239.17a and 274.11b, 17 CFR
239.17b and 274.11c, 17 CFR 239.24 and 274.5.
<(73)> 17 CFR 270.0-10.
<(74)> 17 CFR 275.0-7.
======END OF PAGE 56======
the Investment Advisers Act of 1940,<(75)> Rule 0-10<(76)>
under the Exchange Act, and Rule 157<(77)> under the Securities Act.
_____________________
Arthur Levitt
March 10, 1999
<(75)> 15 U.S.C. 80b-1 et seq.
<(76)> 17 CFR 240.0-10.
328
<(77)>s 17 CFR 230.157.
======END OF PAGE 57======