Year 2000 Disclosure Interpretive Release
                      Information Sheet
                        July 29, 1998
                              

     The "Year 2000 problem" arose because many existing
computer programs use only the last two digits to refer to a
year.  Therefore, these computer programs do not properly
recognize a year that begins with "20" instead of the
familiar "19."  If not corrected, many computer applications
could fail or create erroneous results.  The extent of the
potential impact of the Year 2000 problem is not yet known,
and if not timely corrected, it could affect the global
economy.

     The Commission is being asked to approve the issuance
of an interpretive release on Year 2000 disclosure.  This
release is meant to elicit more meaningful Year 2000
disclosure from public companies, investment advisers,
investment companies and municipal securities issuers. This
interpretive release supersedes the Divisions of Corporation
Finance's and Investment Management's guidance in Staff
Legal Bulletin No. 5.  Despite that Staff Legal Bulletin,
many companies are not providing the quality of detailed
disclosures that the Commission believes investors expect.

     For public companies that make filings with the
Division of Corporation Finance, our authority basically is
limited to eliciting disclosure.  Our disclosure framework
requires companies to disclose material information that
enables investors to make informed investment decisions.
The interpretive release provides specific guidance for
public companies making disclosure called for by
Management's Discussion and Analysis of Financial Condition
and Results of Operations ("MD&A"), financial statement
requirements and other rules and regulations.

     MD&A is the regulation that requires companies to
disclose known events, trends, and uncertainties -- forward-
looking information.  Most discussions of Year 2000 issues
contain forward-looking elements.  Under the release's
interpretation of MD&A, a company would provide Year 2000
disclosure if:

     (1)  its assessment of its Year 2000 issues is not
          complete, or

     (2)  management determines that the
          consequences of its Year 2000 issues would have a
          material effect on the company's business, results
          of operations, or financial condition, without
          taking into account the company's efforts to avoid
          those consequences.

     The Commission believes that the vast majority of
companies have material Year 2000 issues, and therefore
expects them to address this topic in their MD&A.  In almost
all cases, this disclosure should be updated in each
quarterly and annual periodic report.

  When a company has a Year 2000 disclosure obligation, the
release states that full and fair disclosure includes:

     (1)  the company's state of readiness;

     (2)  the costs to address the company's Year 2000
          issues;

     (3)  the risks of the company's Year 2000 issues; and

     (4)  the company's contingency plans.

     Each company must consider if its own Year 2000
circumstances require disclosure of other matters to meet
their disclosure obligations.  The release provides
suggestions for some of these other matters.

     To encourage companies to provide meaningful
disclosure, the release provides interpretive guidance on
the application of the statutory safe harbors for forward-
looking information provided by the Private Securities
Litigation Reform Act of 1995.  These safe harbors provide
protection for forward-looking information accompanied by
meaningful cautionary statements.  The safe harbors provide
protection from class action lawsuits in federal court.
                              
     The release also addresses investment advisers and
investment companies. The Commission, which has direct
regulatory authority over these entities, has concluded that
the best approach to monitor the year 2000 readiness of
investment advisers and investment companies is to require
the investment advisers to provide publicly available
reports to the Commission. In June 1998, the Commission
proposed to require these reports. The release also
discusses the importance of disclosure by investment
companies and investment advisers if the Year 2000 issue is
material to their operating results or financial conditions,
and provides guidance for such disclosure.

     The Commission's regulatory authority over disclosure
by issuers of municipal securities is not as broad as its
authority over disclosure by public and investment
companies. Generally, municipal securities offerings are, by
statute, exempt from registration and municipal securities
issuers are exempt from the reporting provisions of the
federal securities law, including line-item disclosure
rules.  Under an anti-fraud standard, the release provides
guidance to municipal securities issuers on how to disclose
their Year 2000 issues.

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