White & Case LLP
April 7, 2003
VIA EMAIL: email@example.com
Jonathan G. Katz
Re: File No. S7-45-02; Proposed Rule Regarding Implementation of Standards of Professional Conduct for Attorneys - Release No. 33-8186
Dear Mr. Katz:
On behalf of one of our Japanese clients which is a reporting foreign private issuer, White & Case LLP respectfully submits the following comments to the Securities and Exchange Commission (the "Commission") regarding the Commission's proposed Section 205.3(e) of the Proposed Rule Regarding Implementation of Standards of Professional Conduct for Attorneys - Release No. 33-8186 (the "Proposed Rule") that would require an issuer who has received notice from an attorney under alternative proposed Section 205.3(d) to report the notice and the circumstances related thereto in an appropriate filing with the Commission within two business days of receipt of such notice.
The Commission has proposed to require foreign private issuers to report on an abbreviated version of Form 20-F or 40-F, as applicable, in order to make these disclosures. The foreign private issuer would be required to make the disclosure by filing the form within two business days of the attorney's written notice.
Our client has indicated that it will defer to the comments of law firms and other groups with respect to the propriety and substance of the reporting proposal. Our client has asked us to respond on its behalf only to the Commission's request for comments as to whether two business days is the appropriate amount of time to allow foreign private issuers to make such a filing. It believes that most Japanese companies would find it virtually impossible to make such a filing within two United States business days.
Our client believes that the Commission should consider the following factors in determining the appropriate amount of time to allow foreign private issuers to make the required filing:
Based upon the above factors, our client believes that two business days is not an appropriate amount of time to allow foreign private issuers to make the required filing. Our client believes that, at a minimum, 20 home country business days would be necessary for foreign private issuers to make the required filing.
Our client believes that the additional regulatory burden imposed upon foreign private issuers by such requirements would be substantial and may deter foreign companies from raising capital in the United States. Such barriers may jeopardize the position of the United States as the most global and liquid capital market in the world and make it more difficult for U.S. investors to diversify their portfolios by investing in foreign securities.
In conclusion, our client asks the Commission to take into account the effect of the Proposed Rule on foreign private issuers. Specifically, our client believes that the Commission should amend the proposed Section 205.3(e), at a minimum to extend the filing requirement to report an attorney's written notice from two U.S. business days to 20 home country business days.
We thank the Commission for considering our client's views on this matter. If you have any questions or comments, please do not hesitate to contact Ichizo Takayama at +81 3 3259-0188 or Mari Uemura at +81 3 3259-0167.