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SECURITIES AND EXCHANGE COMMISSION

17 CFR PARTS 228, 229 AND 249

RELEASE NO. 34-37801; INTERNATIONAL SERIES NO. 1020

FILE NO. S7-19-95

RIN  3235-AG47

PERIODIC REPORTING OF UNREGISTERED EQUITY SALES 

AGENCY:   Securities and Exchange Commission

ACTION:   Final Rules.

SUMMARY:  The Commission is adopting revisions to forms under the

Securities Exchange Act of 1934 and Regulations S-K and S-B to

require registrants to report recent sales of equity securities

that have not been registered under the Securities Act of 1933. 

The revisions are designed, in part, to address abusive practices

in connection with the sale of equity securities by domestic

companies in purported Regulation S offerings by requiring more

disclosure about such sales in a timely fashion.  

EFFECTIVE DATE:  The revisions are effective [30 days after

publication in the Federal Register].

FOR FURTHER INFORMATION CONTACT:  Walter Van Dorn, Office of

International Corporate Finance, Division of Corporation Finance,

U.S. Securities and Exchange Commission, Washington, D.C. 20549,

(202) 942-2990.

SUPPLEMENTARY INFORMATION:  The Commission is adopting amendments

to the following forms under the Securities Exchange Act of 1934
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-[1]- to require periodic disclosure of unregistered equity

offerings:  Form 10-Q, -[2]- Form 10-QSB, -[3]- Form

10-K, -[4]- Form 

10-KSB -[5]- and Form 8-K. -[6]-  In addition the

Commission is amending the following Rules:  Item 701 -[7]-

of Regulation S-K -[8]- and Item 701 -[9]- of

Regulation S-B -[10]-.

I.   DISCUSSION

     A.   Introduction and Summary

     Today the Commission is adopting amendments to its rules and

forms applicable to U.S. reporting companies -[11]- to

require timely disclosure of unregistered sales of equity




---------FOOTNOTES----------
     -[1]-     15 U.S.C. 78a et seq. (the "Exchange Act").

     -[2]-     17 CFR 249.308a.

     -[3]-     17 CFR 249.308b.

     -[4]-     17 CFR 249.310.

     -[5]-     17 CFR 249.310b.

     -[6]-     17 CFR 249.308.

     -[7]-     17 CFR 229.701.

     -[8]-     17 CFR Part 229.

     -[9]-     17 CFR 228.701.

     -[10]-    17 CFR Part 228.

     -[11]-    The new disclosure requirements apply to U.S.
               reporting companies and foreign companies not
               using the foreign integrated disclosure system.
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securities.  The amendments were proposed in June 1995.

-[12]-  They are designed to address concerns that the

current rules do not require adequate and timely disclosure to

shareholders and the markets of unregistered offerings of equity

securities, particularly those made in reliance upon Regulation S

-[13]-, the safe harbor for offshore sales, and Section

4(2) -[14]-, the private placement exemption.  As a result,

shareholders and the markets have been unaware of the potential

dilution or the effects on the financial condition of the issuer

that these unregistered sales can cause.  Moreover, the lack of a

specific disclosure requirement may be permitting the abusive

practices -[15]- of some U.S. issuers selling common equity

offshore purportedly in reliance upon Regulation S to occur

without notice to the market of such offerings.  For example,

without a timely disclosure requirement, issuers have been able

to sell shares offshore at a substantial discount to the U.S.

market price, and the shares have been resold in the U.S. markets

before the U.S. markets have been made aware of potential




---------FOOTNOTES----------
     -[12]-    Securities Act Release No. 7189 (June 27, 1995)
               [60 FR 35656] (the "Proposing Release").

     -[13]-    17 CFR 230.901-904.

     -[14]-    15 U.S.C. 77d(2).

     -[15]-    For a description of such practices, see
               Securities Act Release No. 7190 (June 27, 1995)
               [60 FR 35663] (the "Regulation S Interpretive
               Release").
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significant dilution or effects on the financial condition of the

issuer of such transactions.

     The amendments are being adopted substantially as proposed,

with one important change.  In the proposal, the rules generally

would have required quarterly reporting of exempt equity sales

(e.g., Regulation S and private placements).  As adopted,

quarterly reporting will be required for exempt equity sales

other than those made in reliance on Regulation S.  The

Commission believes that quarterly reporting of most exempt

equity sales will provide adequate and timely disclosure.  Most

exempt sales by reporting companies involve private placements. 

In those cases, the securities cannot be freely resold into the

public markets until a significant period of time after sale. 

Consequently, quarterly reporting should provide sufficient

notice. -[16]-  

     For Regulation S sales, however, current reporting on Form

8-K will be required within 15 days of their occurrence.  The

Commission believes that quarterly reporting would not be timely

enough for Regulation S sales because, under the current 40-day


---------FOOTNOTES----------
     -[16]-    Under Rule 144, the safe harbor for resales of
               "restricted" securities (including privately
               placed securities), resales into the public
               markets cannot be made until at least two years
               after the sale by the issuer or an affiliate. 
               Although the Commission proposed to reduce these
               time periods (see Securities Act Release No.
               7187), even under a shortened time period
               quarterly reporting would still result in
               disclosure before the securities could be resold
               without registration into the public markets.
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Regulation S restricted period for sales of equity securities by

domestic reporting companies, the restricted period could expire,

and securities could be resold in the U.S. market (assuming an

exemption is available), before disclosure is made.  Several

commenters supported a Form 8-K filing requirement. -[17]-

     The Commission is currently considering whether to revise

the issuer safe harbor for sales of equity securities by domestic

reporting companies under Regulation S, including possibly

lengthening the restricted period. -[18]-   If the

restricted period for sales of equity securities pursuant to

Regulation S is changed, the Commission intends to consider

revising the periodic disclosure requirement for Regulation S

sales adopted in this release.

     B.   Description of Amendments

          1.   Disclosure Required

---------FOOTNOTES----------
     -[17]-    Twenty-four letters of comment were received in
               response to the Proposing Release, 16 of which
               responded specifically to questions relating to
               quarterly reporting of sales of unregistered sales
               of equity securities.  Five commenters stated that
               unregistered offerings of equity securities should
               be reported on Form 8-K.  These comment letters,
               together with a Summary of Comments prepared by
               Commission staff, are available for inspection and
               copying in the Commission's Public Reference Room,
               450 Fifth Street, N.W., Washington D.C. 20549. 
               Persons seeking these materials should make
               reference to File No. S7-19-95.

     -[18]-    See Securities Act Release No. 7190 (June 27,
               1995).
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     Under the new requirements, the following information about

unregistered sales of equity securities -[19]- will be

required to be disclosed for the applicable reporting period:

*    the title and amount of securities sold, and the date of the
     transaction

*    the name of the underwriter or placement agent

*    the consideration received

*    persons or classes of persons to whom the securities were
     sold  

*    the exemption from registration claimed

*    in the case of convertible or exchangeable securities,
     warrants and options, the terms of conversion or exercise.

     With the exception of the last disclosure item, this

information is currently required to be disclosed in certain

Securities Act filings pursuant to Item 701 of Regulation S-K and

Regulation S-B.  In response to the Commission's request for

comment in the Proposing Release, one commenter suggested that

such information in addition to that currently listed in Item 701

would be helpful to investors.  The additional information

required is disclosure of pricing information for the underlying

common equity when convertible securities, warrants and similar

securities are sold.  In those situations, information about the

conversion or exercise price is important to shareholders and the

market place since it shows the potential dilutive effects of


---------FOOTNOTES----------
     -[19]-    "Equity security" is defined in Rule 3a11-1 [17
               CFR 240.3a11-1].  It includes convertible and
               exchangeable securities, warrants, options and
               other types of equity-related securities.
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conversion or exercise.  Item 701 of Regulation S-K and

Regulation S-B will be amended to require that this additional

information be provided in filings of annual, periodic or current

reports under the Exchange Act.

     Several commenters opposed the requirement that the names of

persons to whom the securities were sold be disclosed.  Item 701

would continue to provide companies with an option to describe

the person or persons to whom the securities were sold by class

(for example, to an accredited investor), as opposed to the names

of individual investors.

          2.   Timing of Disclosure

     Information about unregistered sales of equity securities

(except those made under Regulation S) will be required to be

provided in an issuer's Quarterly Report on Form 10-Q or 10-QSB

for sales during the issuer's first three fiscal quarters, and in

the Annual Report on Form 10-K or 10-KSB for sales made during

the final fiscal quarter.  Information about sales made in

reliance upon Regulation S will be required to be reported

pursuant to new Item 9 of Form 8-K and filed within 15 days of

the sale.  The Form 8-K filing will be required if the issuer

claims reliance on Regulation S under Item 701 of Regulation S-K,

even if reliance on other possible bases for the unregistered

sale also could be claimed.

     C.   Effective Date of Amendments

     The amendments will be effective [insert date - 30 days from

date of publication].  Sales that occur prior to the effective
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date, but for which a report is not due until after the effective

date, must be reported on the appropriate form.  For example, an

exempt private placement occurring before the effective date must

be reported on the Form 10-Q covering the quarter if that form

has not been filed before the effective date.  A sale of equity

securities pursuant to Regulation S occurring before the

effective date must be reported on Form 8-K if the Regulation S

sale was made within 15 days before the effective date.

II.  COST-BENEFIT ANALYSIS

     The new requirement to disclose sales of unregistered equity

securities is expected to increase modestly registrants' costs

and compliance burdens.  That requirement should not

significantly increase the burden on company resources, since

most registrants are required to gather such information in

connection with the preparation of audited and unaudited

financial statements.  To the extent the requirement results in

any additional expense, it is justified in view of the material

information that will be made available to investors in a timely

manner.

III. SUMMARY OF FINAL REGULATORY FLEXIBILITY ANALYSIS

     The Commission has prepared a Final Regulatory Flexibility

Analysis pursuant to the requirements of the Regulatory

Flexibility Act, -[20]- regarding the amendments.  The new

rules with respect to disclosure of recent sales of unregistered


---------FOOTNOTES----------
     -[20]-    5 U.S.C. 603 (1988).
==========================================START OF PAGE 9======

securities are intended to provide investors with more timely and

complete information regarding changes in outstanding securities

of public companies.

     Small U.S. entities that file current or quarterly reports

will be affected by the proposed amendments to the extent that

they offer equity securities in unregistered offerings.  To the

extent small U.S. entities are affected by the proposed

amendments, the investors in such small entities are expected to

benefit from the increased information required to be provided.

     The analysis also indicates that the amendments to the rules

and forms modestly increase reporting, recordkeeping and

compliance requirements.  These requirements should not

significantly increase the burden on company resources, since

such information will be readily available, as the transaction in

question would have been completed within the prior fiscal

quarter, or, in the case of Form 8-K reporting, within the prior

15 days.

     The term "small business," as used with reference to an

issuer for purposes of the Regulatory Flexibility Act, is defined

by Rule 157 -[21]- under the Securities Act as an issuer

whose total assets on the last day of its most recent fiscal year

were $5 million or less and who is engaged or proposing to engage

in small business financing.  The Commission is aware of

approximately 1,100 Exchange Act reporting companies that

currently satisfy the definition of "small business" under Rule

---------FOOTNOTES----------
     -[21]-    17 CFR 230.157.
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157.  Because these rules will affect issuers that sell

securities in unregistered offerings, and in the majority of

situations no reporting with the Commission of unregistered

security offerings currently is required, little information is

available to the Commission that would make it possible to

estimate the number of small issuers that will be affected by

these amendments.  However, approximately 11,400 issuers are

subject to Exchange Act reporting requirements, and, based on

discussions with intermediaries and other participants in the

Regulation S market, the Commission staff estimates that

approximately 500 of such issuers may conduct Regulation S

offerings of equity securities per year.  The Commission staff

further estimates that approximately 250 such issuers are "small

businesses" under Rule 157.

     As stated in the analysis, the economic impact of the new

rules is expected to be small, particularly in view of the

additional information and protection to be provided to

investors.  In part, to minimize the recordkeeping and reporting

burden, and corresponding economic impact, on small entities and

others, the Commission has decided to require that unregistered

sales of securities (other than sales in reliance on Regulation

S) be reported on a quarterly basis.  Only sales of securities

which were not registered in reliance on Regulation S are

proposed to be reported within 15 days.

      A copy of the Final Regulatory Flexibility Analysis may be

obtained by contacting Walter Van Dorn, Office of International
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Corporate Finance, Division of Corporation Finance, U.S.

Securities and Exchange Commission, 450 Fifth Street, N.W.,

Washington, D.C. 20549, (202) 942-2990.

IV.  PAPERWORK REDUCTION ACT

     In June, 1995, the staff submitted to the Office of

Management and Budget ("OMB") for review proposals to amend the

following information collections under the Exchange Act to

require periodic disclosure of unregistered equity offerings: 

Form 10-Q, Form 10-QSB, Form 10-K and Form 10-KSB. -[22]- 

These information collections display an OMB control number and

expiration date. -[23]-  The information collections are

required to be filed by registrants subject to the Exchange Act

reporting requirements and are publicly available.  The

Commission solicited comment on the compliance burdens associated

with the proposals but received no public comment on the burden

estimates.

     In response to public comments received on the Proposing

Release, as discussed in Section I.A of this release, in addition


---------FOOTNOTES----------
     -[22]-    There are no changes regarding the purpose, use or
               necessity of the information collections for which
               OMB approval was requested, nor are there changes
               to the estimates of reporting or recordkeeping
               burden expected to result from adoption of the
               proposed amendments.  See the Proposing Release
               for estimates of changes in reporting or
               recordkeeping burden.

     -[23]-    Unless a currently valid OMB number is displayed,
               an agency may not sponsor or conduct or require
               response to an information collection pursuant to
               44 U.S.C. 3506(c)(1)(B).
==========================================START OF PAGE 12======

to adopting changes to the information collections listed in the

preceding paragraph, the Commission also is adopting changes to

Form 8-K to require current reporting on Form 8-K of Regulation S

sales within 15 days after their occurrence.  Form 8-K contains

"collection of information" requirements within the meaning of

the Paperwork Reduction Act of 1995. -[24]-  The Commission

is submitting the revision to Form 8-K to OMB for review.

     The title of the affected information collection is "Form 8-

K."  The likely respondents to Form 8-K generally are all issuers

reporting under the Exchange Act that are not foreign private

issuers.  Currently, an estimated 11,400 respondents file 21,000

Forms 8-K per year for a total annual burden of 105,000 hours. 

The Commission believes that the same number of respondents will

file Form 8-K after the revision described in this release

becomes effective, but those making Regulation S sales will file

Form 8-K more frequently, resulting in an increased number of

total burden hours.  Since there currently is not any Exchange

Act reporting requirement when Regulation S sales are made, the

Commission has no basis for estimating the increase in the Form

8-K total burden hours expected to result from this rulemaking.

     Persons desiring to submit comments on the collection of

information requirements should direct them to the Office of

Management and Budget, Attention:  Desk Officer for the

Securities and Exchange Commission, Office of Information and


---------FOOTNOTES----------
     -[24]-    44 U.S.C. 3501 et seq.
==========================================START OF PAGE 13======

Regulatory Affairs, Washington, D.C. 20503, and should also send

a copy of their comments to Jonathan G. Katz, Secretary,

Securities and Exchange Commission, 450 5th Street, N.W.,

Washington, D.C. 20549 with reference to File No. S7-19-95.  OMB

is required to make a decision concerning the collections of

information between 30 and 60 days after publication, so a

comment to OMB is best assured of having its full affect if OMB

receives it within 30 days of publication.

V.   STATUTORY BASES

     The amendments to the Commission's rules and forms are being

adopted pursuant to sections 3(b), 4A, 12, 13, 14, 15, 16 and 23

of the Securities Exchange Act.

     List of Subjects in 17 CFR Parts 228, 229 and 249

     Reporting and recordkeeping requirements, and Securities.

     TEXT OF AMENDMENTS

     In accordance with the foregoing, Title 17, Chapter II of

the Code of Federal Regulations is amended as follows:

PART 228 -     INTEGRATED DISCLOSURE SYSTEM FOR SMALL BUSINESS
               ISSUERS

     1.   The authority citation for Part 228 continues to read

as follows:

     Authority:  15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s,

77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77jjj, 77nnn,

77sss, 78l, 78m, 78n, 78o, 78w, 78ll, 80a-8, 80a-29, 80a-30, 80a-

37, 80b-11, unless otherwise noted,

     2.   By amending 228.701 by adding paragraph (e) to read as

follows:
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     228.701 (Item 701) Recent sales of unregistered securities.

                        *   *   *   *   *

     (e)  If the information called for by this paragraph (e) is

being presented on Form 8-K, Form 10-QSB, Form 10-Q, Form 10-KSB

or Form 10-K (249.308, 249.308b, 249.308a, 249.310b or 249.310)

under the Exchange Act, and where the securities sold by the

registrant are convertible or exchangeable into equity

securities, or are warrants or options representing equity

securities, disclose the terms of conversion or exercise of the

securities.

PART 229 -     STANDARD INSTRUCTIONS FOR FILING FORMS UNDER
               SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF
               1934 AND ENERGY POLICY AND CONSERVATION ACT OF
               1975 -- REGULATION S-K

     3.   The authority citation for Part 229 continues to read

in part as follows:

     Authority:  15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s,

77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj,

77nnn, 77sss, 78c, 78i, 78j, 78l, 78m, 78n, 78o, 78w, 78ll(d),

79e, 79n, 79t, 80a-8, 80a-29, 80a-30, 80a-37, 80b-11, unless

otherwise noted,

                        *   *   *   *   *

     4.   By amending 229.701 by adding paragraph (e) before the

Instructions to read as follows:

     229.701 (Item 701) Recent sales of unregistered securities.

                        *   *   *   *   *

     (e)  Terms of conversion or exercise.  If the information

called for by this paragraph (e) is being presented on Form 8-K,
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Form 10-QSB, Form 10-Q, Form 10-KSB or Form 10-K (249.308,

249.308b, 249.308a, 249.310b or 249.310) under the Exchange Act,

and where the securities sold by the registrant are convertible

or exchangeable into equity securities, or are warrants or

options representing equity securities, disclose the terms of

conversion or exercise of the securities.

                        *   *   *   *   *

PART 249 - FORMS, SECURITIES EXCHANGE ACT OF 1934

     5.   The authority citation for Part 249 continues to read

in part as follows:

     Authority:  15 U.S.C. 78a, et seq., unless otherwise noted;

                        *   *   *   *   *

     6.   By amending Form 8-K (referenced in 249.308) by adding

a sentence to the end of General Instruction B.1 and by adding

Item 9 to read as follows:

     Note:  Form 8-K does not and these amendments will not
     appear in the Code of Federal Regulations

                             Form 8-K

                        *   *   *   *   *

                       GENERAL INSTRUCTIONS

A. * * *

B.   Events to be Reported and Time for Filing of Reports

     1. * * * A report on this form pursuant to Item 9 is

required to be filed within 15 calendar days after the date of

sale.

                        *   *   *   *   *

             INFORMATION TO BE INCLUDED IN THE REPORT
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                        *   *   *   *   *

Item 9.   Sales of Equity Securities Pursuant to Regulation S.

     Furnish the information required by Item 701 of Regulation

S-B (228.701 of this chapter) as to all equity securities of the

registrant sold by the registrant that were not registered under

the Securities Act in reliance upon Regulation S under the

Securities Act.

                        *   *   *   *   *

      7.  By amending Form 10-Q (referenced in 249.308a) by

adding paragraph (c) to Item 2 of Part II prior to the

Instruction to read as follows:

     Note:  Form 10-Q does not and these amendments will not
     appear in the Code of Federal Regulations

                            Form 10-Q

                        *   *   *   *   *

                             Part II

Item 2.   Changes in Securities.

                        *   *   *   *   *

     (c)  Furnish the information required by Item 701 of

Regulation S-K (229.701 of this chapter) as to all equity

securities of the registrant sold by the registrant during the

period covered by the report that were not registered under the

Securities Act other than unregistered sales made in reliance on

Regulation S.

                        *   *   *   *   *
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     8.   By amending Form 10-QSB (referenced in 249.308b) by

adding paragraph (c) to Item 2 of Part II prior to the

Instruction to read as follows:

     Note:  Form 10-QSB does not and these amendments will not
     appear in the Code of Federal Regulations

                           Form 10-QSB

                        *   *   *   *   *

                             Part II

                        *   *   *   *   *

Item 2.   Changes in Securities.

                        *   *   *   *   *

     (c)  Furnish the information required by Item 701 of

Regulation S-B (228.701 of this chapter) as to all equity

securities of the registrant sold by the registrant during the

period covered by the report that were not registered under the

Securities Act other than unregistered sales made in reliance on

Regulation S.

                        *   *   *   *   *



     9.   By amending Form 10-K (referenced in 249.310) by

revising Item 5 of Part II to read as follows:

     Note:  Form 10-K does not and these amendments will not
     appear in the Code of Federal Regulations

                            Form 10-K

                        *   *   *   *   *

                             Part II

                        *   *   *   *   *
==========================================START OF PAGE 18======

Item 5.   Market for Registrant's Common Equity and Related
          Stockholder Matters.

     Furnish the information required by Item 201 of Regulation

S-K (229.201 of this chapter) and Item 701 of Regulation S-K

(229.701 of this chapter) as to all equity securities of the

registrant sold by the registrant during the period covered by

the report that were not registered under the Securities Act

other than unregistered sales made in reliance on Regulation S.  

Provided that if the Item 701 information previously has been

included in a Quarterly Report on Form 10-Q or 10-QSB (249.308a

or 249.308b of this chapter) it need not be furnished. 

                        *   *   *   *   *

     10.  By amending Form 10-KSB (referenced in 249.310b) by

revising Item 5 of Part II to read as follows:

     Note:  Form 10-K does not and these amendments will not
     appear in the Code of Federal Regulations

                           Form 10-KSB

                        *   *   *   *   *

                             Part II

                        *   *   *   *   *

Item 5.   Market for Common Equity and Related Stockholder

          Matters.

     Furnish the information required by Item 201 of Regulation

S-B and Item 701 of Regulation S-B as to all equity securities of

the registrant sold by the registrant during the period covered

by the report that were not registered under the Securities Act
==========================================START OF PAGE 19======

other than unregistered sales made in reliance on Regulation S. 

Provided that if the Item 701 information previously has been 
==========================================START OF PAGE 20======

included in a Quarterly Report on Form 10-Q or 10-QSB it need not

be furnished.  



                        *   *   *   *   *



By the Commission.



                                   Jonathan G. Katz,
                                   Secretary


October 10, 1996