From: laurence.hickey@kodak.com Sent: Monday, February 10, 2003 9:38 AM To: rule-comments@sec.gov Cc: susan.wolf@spcorp.com; ascs@ascs.org; DQuinn@nixonpeabody.com Subject: File No. S7-52-02 February 10, 2003 VIA E-MAIL United States Securities and Exchange Commission 450 Fifth Street N.W. Washington, D.C. 20549 Attn: Jonathan G. Katz Secretary of the Commission Re: Mandated Electronic Filing and Website Posting for Forms 3, 4 and 5, File No. S7-52-02 Dear Mr. Katz: Thank you for the opportunity to comment on the proposed rule mandating electronic filing and website posting of Forms 3, 4 and 5. I am writing to you today on behalf of The Securities Law Committee of the American Society of Corporate Secretaries (the "Committee"). The American Society of Corporate Secretaries is a professional association whose membership of over 4,000 persons is composed principally of corporate secretaries, assistant secretaries and other persons who are involved in duties traditionally associated with the corporate secretarial function. I offer comments on behalf of the Committee in the following areas. Extend the deadline for accepting Forms 3, 4 and 5 to 12:00 midnight Eastern Time. The Commission has asked whether it should amend Rule 13(a)(3) to treat an accepted Form 3, 4 or 5 filing in the same manner as a Rule 462(b) filing for purposes of the deemed filing date. The Committee views an extension of the deadline from 5:30 to 10:00 p.m. favorably, but proposes that the deadline be extended further to 12:00 midnight Eastern Time. The Sarbanes-Oxley Act of 2002 (the "Act") requires the reports to be filed before the end of the second business day following the day on which the subject transaction has been executed. Filings received and accepted by 12:00 midnight Eastern Time will have complied with the statutory requirement. In addition, a report that is filed by 12:00 midnight Eastern Time will be filed in time to be consistent with the intention of the Act and will be available to the investing public in the morning of the following business day before the opening of the public stock markets. This deadline will permit West Coast filers a more reasonable deadline for filing, since the 5:30 Eastern time deadline requires them to file by 2:30 West Coast time. Given the two-day filing requirement, that deadline is unreasonable given the steps required before filing is possible: receiving notice of the transaction, securing the required information, preparing the form, securing the officer's or director's signature or approval, and accomplishing the filing. Post Forms 3, 4 and 5 in a separate location in Edgar so that they can be easily located. In order to facilitate efficient dissemination, analysis, storage and retrieval of insider ownership and transaction information, the Committee suggests that the Commission segregate Forms 3, 4 and 5 to a separate location on the Edgar portion of the Commission's website. Placement of the Forms 3, 4 and 5 in a separate location will ease retrieval and analysis of the contents of these forms by interested investors and will unclutter the sites where investors access company financial information and other information. Address the disappearing CIK code problem that results from subsequently filed Form IDs. Presently, if a filer has obtained filer codes (or an issuer has obtained the codes on behalf of the filer) from the Commission and another person, on the filer's behalf, subsequently files a Form ID to obtain a new CCC in order to facilitate filing for that filer, the Commission will issue a new CCC number. The Committee is aware of problems with issuers attempting to make filings on behalf of board members, for example, that are members of more than one board of directors. The Committee suggests that the Commission take affirmative steps to eradicate this problem. Ideally, an issuer or filer that files a subsequent Form ID or an amendment on behalf of a person that already has filer codes should be given the existing codes and permitted to use them. At the very least, the second filing should be returned to the filer with a notice that the individual already has filer codes. We acknowledge that the Commission has taken the position that individuals required to files Forms 3, 4 and 5 should know whether they have filer codes and what those codes are, that position ignores the realities. Corporate officers and directors have no practical knowledge of the Edgar filing mechanics, and should not need to concern themselves with such matters, given the much more important functions their positions require. Ensure that the New System contemplates single data entry for reduced content filers. Section III of the release does not indicate clearly whether the on-line filing system will be made available to reduced content filers. The Committee requests that the Commission clarify that reduced content filers may take advantage of the on-line filing system that will be implemented. Advocate a single link to the Edgar portion of the Commission website for the website posting requirement. The release states that an issuer could meet the website posting requirement by hyperlinking to Forms 3, 4 and 5 via a third party service in lieu of maintaining the forms themselves if certain conditions are met. The Committee suggests that the Commission permit and advocate, in lieu of maintaining the forms themselves, the issuer to create a single hyperlink on the issuer's website directly to the Edgar portion of the Commission website where the Forms 3, 4 and 5 are made available. Such a hyperlink would be directly to the completed forms and would meet the additional criteria set forth in the release. It would reduce the burden on businesses to constantly update their websites. Maintain the temporary hardship exemption. In response to the Commission's questions regarding temporary hardship exemptions, the Committee requests that the Commission maintain the temporary hardship exemption as proposed. As the release indicates, the Commission expects that hardship exemptions for Forms 3, 4 and 5 will be available infrequently. Presumably then, hardship exemptions that are granted will be granted because of deserving circumstances. Technological developments and the ease of use cited in the release as reasons to possibly shorten the timeframe to file electronically or to eliminate the exemption altogether are likely not available to filers seeking a hardship exemption. Filers who have made good faith efforts to make timely filings electronically and experience system or operator failures should not be unreasonably penalized. Provide for an appropriate trial period for testing the new on-line filing system. The Committee is looking forward to the Commission's implementation of the new on-line filing system described in the release. However, we believe that for a time, it will be inevitable that problems will arise. We advocate a trial period for testing the new on-line filing system. During this trial period, filers should not be prevented from using EDGARLink filing or any other electronic filing mechanism. We propose a period of 12 months as a reasonable trial period. The Committee appreciates the opportunity to comment on the proposed rule. If you have any questions or require additional information, please do not hesitate to contact me at (585) 724-3378. Very truly yours on behalf of the Securities Law Committee of the American Society of Corporate Secretaries, Laurence L. Hickey Assistant Secretary, Eastman Kodak Company 343 State Street, Rochester, NY 14650 Tel (585) 724-3378, Fax (585) 724-9549 Laurence.hickey@kodak.com cc: Susan E. Wolf Thomas C. Sanger David W. Smith Margaret M. Foran