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                            APPENDIX A
            THE IMPACT OF THE CURRENT REGULATORY SYSTEM
           ON INVESTOR PROTECTION AND CAPITAL FORMATION
                                                                 

I.   Introduction . . . . . . . . . . . . . . . . . . . . . . .  

II.  Direct and Indirect Costs and Uncertainties Resulting From 
     the Registration Process for Public Offerings  . . . . . . .

  A.  Costs of Registration - The Offering Process  . . .   

     1.  Direct Costs Associated with the Public Offering Process


     2.  Delay and Uncertainty Caused by Commission Staff Review  
                                                                

     3.  Residual Costs Associated With Registering Equity
         Securities On Shelf Registration Statements --           
         Pre-offering Filing Fees, Short-Selling and Market       
         Overhang  . . . . . . . . . . . . . . . . . 


  B.  Indirect Costs Associated with the Current Regulatory
      Scheme  . . . . . . . . . . . . . . . . . . . . . . . 

     1.  Securities Act Concepts Designed to Ensure the
         Registration of Public
         Offers and Sales Can Produce Unnecessary Costs and
         Uncertainties and Reduce Flexibility in Structuring      
         Financing Transactions  . . . . . . . . . . . . . .

               ù    Gun-jumping . . . . . . . . . . . . . . . . .
               ù    Integration and General Solicitation
                    Doctrines . . . . . . . . . . . . . . . . . .
               ù    Constraints on Resales - Statutory
                    Underwriters and Affiliates  . . . . . . .

     2.  Mandatory Prospectus Disclosure Requirements Do Not Meet
         Investor Needs in the Most Efficient Manner . . . . .

III.  Changes in the Markets and Offering Processes, and the
      Effect on Investor Protection . . . . . . . . . . . . 

  A.  Attractiveness of Public, Private and Offshore Markets
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  B.  Blurring of Distinctions Between Public, Private and
      Offshore Markets  . . . . . . . . . . . . . . . . . . .

  C.  Growth of Secondary Markets and Changes in Offering
      Techniques  . . . . . . . . . . . . . . . . . . . .

  D.  Changes in Gatekeeper Role  . . . . . . . . . . . . . . . .

ADDENDUMS TO APPENDIX A

Figure 1: Aggregate Net Issuance of Securities by Domestic Non-
          Financial Businesses,
          by Year

Figure 2: Total Value of Public Offerings of Equity vs. Trading
          Volume in Existing Markets, by Year

Figure 3: Value of Underwritten Public Offerings and Private
          Placements of Equity,
          by Year

Figure 4: Percent of Issuers Offering Additional Common Stock, by
          Year and Type of Filing

Figure 5: Distribution of Waiting Periods, by Review, for Offers
          of Additional Common Stock, 1990-94

Figure 6: Fraction of Offers Within Various Size Limits, for
          Underwritten Offers of Common Stock, 1992-94



List of Tables

Table 1   Typical Expenses In Underwritten Public Offers of
          Common Stock in 1993-95

Table 1b  Typical Expenses in Underwritten Public Offers of
          Common Stock in 1993-95, for Repeat Offers of $20 to
          $200 million by Domestic Issuers, by Value of Offer

Table 2   Typical Experience of Filers of Registration Statements
          for Underwritten Public Offers of Common Stock, January
          1994 through December 1995

Table 3   Typical Change in Stock Price from Filing to Effective
          Date, for Underwritten Public Offers of Additional
          Common Stock by 990 NYSE/Amex/Nasdaq issuers, 1993-94,
          by Pre-Offer Market Capitalization, and by Whether the
          Filing is Reviewed by the SEC
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Table 4   Relative Importance of Shelf Registration as a Vehicle
          for Securities Sales, by Class of Security and Year