December 18, 2001

Jonathan G. Katz
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0609

Release Nos. 33-8016, 34-44868;
International Series Release No. 1250; File No. S7-18-01

Dear Mr. Katz:

We welcome the opportunity to comment on the issues raised in the captioned release (the "Release"). We support the efforts of the Securities and Exchange Commission (the "Commission") to provide investors with better access to information about non-U.S. issuers whose securities are traded in the U.S. market. While we generally support the adoption of amendments requiring non-U.S. issuers to make filings or submissions to the Commission through EDGAR, we believe that certain revisions of the proposed amendments are necessary to ensure that non-U.S. issuers are not overly burdened by the new requirements. As discussed below, we recommend that the Commission:

Elimination of the summary option. We are concerned that eliminating the English language summary option for both Form 6-Ks, 20-Fs as well as registration statements under the Securities Act of 1933 (the "Securities Act") will result in higher costs for non-U.S. issuers, seriously hinder their ability to meet their disclosure obligations under the Exchange Act in a timely manner, and result in the filing of less information as a result of closer materiality judgments being made. Non-U.S. issuers will have to incur substantial additional expense related to translation services, which can be expensive and result in prohibitive additional costs to many non-U.S. issuers. In addition, translations of lengthy documents take time to prepare, which may result in delays in meeting periodic disclosure obligations under the Exchange Act or in timetables for capital raising transactions under the Securities Act. We see little reason to tie the implementation of electronic filing requirements to a substantive change in the information required to be submitted by foreign private issuers; indeed, the linkage threatens to adversely affect such issuers' reaction to the EDGAR initiative.

Non-U.S. issuers are often pressed to meet the deadlines imposed by the laws of their home jurisdictions in connection with the preparation of annual and semi-annual reports. Requiring these issuers to prepare a translation of these reports in parallel to their actual preparation would be unduly burdensome and, in some cases, not possible, and could result in significant delays in the submission of Forms 6-K and other mandated filings. Non-U.S. issuers face similar administrative and cost issues in connection with offering documents used in offshore transactions.

For these reasons, we believe that the summary option should be retained for documents required to be filed based on home country requirements under cover of Form 6-K as well as for material contracts filed as exhibits to registration statements or annual reports on Form 20-F.

The general instructions under Form 6-K permit non-U.S. issuers to provide "English versions or adequate summaries in the English language" of press releases and other direct communication with securities holders required to be submitted under the cover of a Form 6-K. Form 6-K further allows other information required by Form 6-K to be briefly described if no English version or summary is available. Non-U.S. issuers often take advantage of the summary or brief description option to meet their interim reporting obligations under the Exchange Act. Many non-U.S. issuers are required to publicly file in their home jurisdictions annual and semi-annual reports, as well as offering documents used in offerings in their home jurisdictions, that contain information required by the laws of their home jurisdictions. These reports and offering documents can be voluminous and often contain additional detailed information that is not required to be set forth in filings and submissions under U.S. securities laws. Such "additional detailed information" is not necessarily material or relevant for non-local investors (such as statistics about the age/gender composition of the employees). Often, only very limited portions of a report or offering document are material or relevant to U.S. investors. As a result, non-U.S. issuers frequently either submit under Form 6-K brief descriptions or English summaries rather than full translations of these reports and documents required to be publicly filed under the laws of their home jurisdictions or choose not to submit the report. The existing disclosure regime currently requires "all material information" to be provided. Thus, whether the issuer chooses the English summary, brief description or translation option, the issuer is still bound under Form 6-K to set forth "all material information" to assure "investor understanding of the foreign issuer in the United States."

In addition, under Rule 403(c) under the Securities Act, and Rule 12b-12(d) under the Exchange Act, non-U.S. issuers are permitted to submit a non-English language document as an exhibit or other part of a filing as long as it is accompanied by a "summary, version or translation" in the English language. In practice, as pointed out by the Commission in the Release, the staff of the Commission does not permit summaries or versions of exhibits that it believes are too important to be presented in an abbreviated fashion. Therefore, we believe that there is no compelling investor protection purpose to be served by changing this rule. The total amount of material information regarding non-U.S. issuers that becomes available to U.S. investors may not increase substantially upon the elimination of the summary option.

Finally, there seems little evidence that the elimination of English summary option is necessary for investor protection. The Commission has not cited any evidence of abuse or set forth a compelling reason for reducing the extent to which, for example, Form 6-K is intended to provide an accommodation for non-U.S. issuers. That Form 6-K does not require English language summaries to be accompanied by the original language documents has long been perceived by non-U.S. issuers as part of that accommodation. Indeed, eliminating the summary option would result in non-U.S. issuers having to submit information not required to be submitted by domestic issuers on Form 8-K or 10-Q.

Rule 12g3-2(b) applications. We support the Commission's proposal to continue to accept applications for Rule 12g3-2(b) exemptions, and supporting documents, in paper form. A wide spectrum of foreign issuers of varying levels of sophistication and from a wide variety of foreign markets have complied with Rule 12g3-2(b). Imposing additional requirements such as electronic filing could cause various new issuers to forego establishing the exemption and existing issuers to allow their exemption to lapse. U.S. investors would be the losers.

Written representations. The proposed amendments would adopt the written representation requirement of Regulation S-T Rule 306 for paper filings, and would require a paper filer to include in any submitted English translation of a foreign language document a written representation, signed by a designated officer or official, that the submission is a fair and accurate translation of the foreign language document. We would urge that the Commission not adopt the written representation requirement for either electronic or paper filers. We believe that the antifraud provisions of the federal securities laws afford investors sufficient protection from, and deter the making of, material misrepresentations or omissions concerning English translations of foreign language documents. We, therefore, do not believe that a written representation is necessary to ensure the accuracy of any translated document. In addition, we do not believe that such a written representation would be meaningful. Not all non-U.S. companies have employees with the level of proficiency in English required to be able to make such a representation. Indeed, in our experience, many non-U.S. companies engage translation services for document translations either because they do not have proficient translators on staff or do not have sufficient resources to devote to so ministerial a task especially on an irregular basis.

Forms CB. The Commission proposes to require the EDGAR filing of Form CB where, among other things, the non-U.S. company that is the subject of a transaction covered by Form CB is an Exchange Act reporting company, even if the acquiror is not. We believe that imposing this requirement may be viewed as making compliance with a Tier I exemption more burdensome and, therefore, cause eligible acquirors to forego reliance on the exemption and simply exclude American investors from such offers. Even with the availability of the Tier I exemption, it can be difficult to convince non-U.S. bidders to include U.S. holders in a foreign exchange or tender offer, largely because of their fear of shareholder litigation and antifraud liability in the United States. Any additional burden (even the cost of translating offer documents for that matter) can cause a bidder to exclude U.S. holders. Requiring use of EDGAR will lead more non-U.S. companies to the conclusion that including U.S. holders is too burdensome and not worth the cost or liability risk. Moreover, Form CB is not an especially informative document; investors will not necessary benefit from its more rapid dissemination to the marketplace and we do not believe that its availability will not contribute to enhanced market exposure for a non-U.S. issuer's securities.

Electronic filing hours. We recommend that the Commission consider extending the EDGAR filing and assistance hours. The current EDGAR filing hours could prove to be an undue burden for many non-U.S. companies, some of whose business hours overlap minimally or not at all with the EDGAR filing hours. The Commission notes in the Release that many non-U.S. issuers that currently file electronically do so with the assistance of filing agents based in the United States. We do not believe that it is reasonable for the Commission to assume that all, or many, non-U.S. issuers have the resources to engage filing agents on an ongoing basis, nor should non-U.S. issuers be expected to incur the expense of doing so, which would cause them to incur higher costs in the implementation of EDGAR than those faced by U.S. issuers. For these reasons, we would urge the Commission to extend the EDGAR filing hours to assist foreign or domestic filers in different time zones in complying with their electronic filing obligations.

Foreign governments and supranational entities. We recommend that the Commission continue to allow foreign governments and supranational entities to make filings on paper. Foreign governments currently face substantial logistical difficulties in meeting their reporting and disclosure obligations under U.S. securities laws, including obstacles arising from language barriers and from internal approval procedures that are often cumbersome. We believe that mandating EDGAR filing by foreign governments would add to the existing, substantial difficulties faced by them in meeting their obligations under U.S. securities laws.

We further believe that investors receive very little new, material information from Form 18-Ks filed by foreign government issuers. The information in the Form 18-Ks is often less current than reliable information available from other sources, such as government offices and multilateral agencies that collect and disseminate country-specific data on a regular basis. Therefore, we believe that requiring foreign governments to adopt the EDGAR system would have very little real benefit to investors.

With respect to supranational entities, we support the Commission's proposal to permit these entities to file their annual, periodic and transactional reports on EDGAR. We believe that the Commission should refrain from making EDGAR filings mandatory for these entities for the same reasons we would exclude foreign government issuers.

Transition Period. We believe that the proposed four-month transition period is seriously inadequate and recommend that if the proposed rule is adopted the Commission provide that current registrants must begin filing their Form 20-F annual reports and subsequent Form 6-Ks beginning with the second Form 20-F annual report due after adoption of the rule. Registration statements of such issuers should be required to be filed electronically on or after the first electronic filing of their Form 20-F annual report; a similar transition was used for the new Form 20-F. New foreign private issuer registrants should have at least nine months following the effective date of the rule before having to submit any filings electronically. The new requirements will apply to non-U.S. companies of every level of sophistication. This would give non-U.S. issuers a meaningful opportunity to become familiar with EDGAR. It would also allow critical time for the infrastructure of printers and lawyers to be further developed overseas. Only with a meaningful transition period will non-U.S. issuers be able to realize increased efficiencies in the filing process that the Commission states is intended by its proposal.

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We appreciate the opportunity to comment on the Release. If the Commission or the staff has any questions concerning the foregoing, please call Linda C. Quinn at (212) 848-8747 or Ottilie L. Jarmel at (212) 848-8611.

Very truly yours,

Shearman & Sterling