REBOUL, MACMURRAY, HEWITT, MAYNARD & KRISTOL
45 ROCKEFELLER PLAZA
NEW YORK, N.Y. 10111
November 28, 2001
Mr. Jonathan G. Katz
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Proposed Rule: Mandated Edgar Filing for Foreign Issuers (Release Nos. 33-8016,
34-44868; International Series Release No. 1250; File No. S7-18-01)
Dear Mr. Katz:
We appreciate the opportunity to comment on the proposed amendments to Regulation S-T, which would require foreign private issuers and foreign governments to file substantially all of their U.S. securities documents with the Securities and Exchange Commission (the "Commission") electronically through the Electronic Data Gathering, Analysis, and Retrieval ("EDGAR") system. Our comments are based on our experience representing foreign private issuers and are solely our own and not intended to represent the views of our clients.
Our comment relates to an issue that is not directly addressed in the proposed amendments. As you know, the Division of Corporation Finance (the "Division") has a policy whereby it generally allows a foreign private issuer to submit a preliminary draft of its initial registration statement, which is then reviewed and commented on by the Division's staff.1 To ensure that the review process itself is entirely confidential, foreign private issuers typically transmit the draft submission in paper form and simultaneously file a confidential treatment request ("CTR") under Rule 83 of the Commission's Rules of Practice (17 CFR 200.83) relating to the entire submission.2 The stated purpose of the Division's policy is to address the special concerns of foreign private issuers by allowing them to remedy disclosure deficiencies in a registration statement prior to the document becoming publicly available. Confidentiality is thus an essential aspect of the policy. In our experience, this procedure has been very important to foreign private issuers by facilitating their transition to becoming publicly traded in the United States. Foreign private issuers would likely be more reluctant to list their securities in the U.S. if they were required to publicly disclose their initial registration statement prior to receiving some assurance that the document complies with U.S. securities laws. In order to continue to encourage foreign companies to participate in and support the U.S. capital markets, we believe it is critical that the Division maintain its policy of reviewing draft submissions of foreign private issuers on a confidential basis.
Therefore, if foreign private issuers are required to file documents through EDGAR, we recommend that an exemption be provided to allow foreign private issuers to submit preliminary drafts of initial registration statements in paper form. Without such an exemption, the Division's review of preliminary drafts submitted by foreign private issuers could no longer be entirely confidential since confidential treatment cannot be granted for any materials filed in electronic format, including supplemental submissions stored in non-public EDGAR.3 In order to receive confidential treatment for a document transmitted electronically, an issuer must submit the entire document to the Commission in paper form along with a CTR in compliance with Rule 83, and must also submit the document on EDGAR with the information subject to the CTR redacted from the electronic submission. We believe that this procedure is overly burdensome in connection with a new registrant's initial draft filing with the Commission.
If the final amendments do not grant an exemption for draft submissions of initial registration statements by foreign private issuers, then we believe that the Commission should confirm that such submissions will be stored only in the non-public EDGAR data storage area as correspondence, pursuant to Rule 101(a)(3) of Regulation S-T. Furthermore, we believe that the final release should provide guidance, or at least an advisory reference to related separate releases or communications by the Commission, regarding how foreign private issuers can submit a draft registration statement through EDGAR and still request confidential treatment for the entire submission.
Please contact any of the undersigned at (212) 841-5700 if you wish to discuss the views set forth above or other aspects of the proposed amendments.
REBOUL, MACMURRAY, HEWITT, MAYNARD & KRISTOL
Robert A. Schwed
Kristopher D. Brown
Caroline S. Fox
|1||See Part IIIB of the Division of Corporation Finance's International Financial Reporting and Disclosure Issues, May 1, 2001. This policy was recently revised to clarify that, except in unusual circumstances, the staff will only accept draft registration statements for an issuer's initial registration with the Commission. See the Division of Corporation Finance's Current Issues and Rulemaking Projects Quarterly Update, March 31, 2001.|
|2||See the Division of Corporation Finance's Staff Legal Bulletin No. 1 (with Addendum), "Confidential Treatment Requests", February 28, 1997, as updated July 11, 2001.|
|3||See the Division of Corporation Finance's Current Issues and Rulemaking Projects Quarterly Report, June 30, 2001.|