Rule: Securities: Foreign Private Issuer's Registration Termination

Thursday,
April 5, 2007
Part III
Securities and
Exchange
Commission
17 CFR Parts 200, 232, 240 and 249
Termination of a Foreign Private Issuer’s
Registration of a Class of Securities
Under Section 12(g) and Duty To File
Reports Under Section 13(a) or 15(d) of
the Securities Exchange Act of 1934;
Final Rule
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16934 Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations
SECURITIES AND EXCHANGE suspend, its section 15(d) reporting III. Paperwork Reduction Act Analysis
COMMISSION obligations. IV. Cost-Benefit Analysis
V. Consideration of Impact on the Economy,
DATES: Effective Date: June 4, 2007. Burden on Competition and Promotion
17 CFR Parts 200, 232, 240 and 249
FOR FURTHER INFORMATION CONTACT: of Efficiency, Competition and Capital
[Release No. 34–55540; International Series Elliot Staffin, Special Counsel, at (202) Formation Analysis
Release No. 1301; File No. S7–12–05] 551–3450, in the Office of International VI. Regulatory Flexibility Act Certification
Corporate Finance, Division of VII. Statutory Basis and Text of Rule
RIN 3235–AJ38 Amendments
Corporation Finance, U.S. Securities
Termination of a Foreign Private and Exchange Commission, 100 F I. Executive Summary and Background
Issuer’s Registration of a Class of Street, NE., Washington, DC 20549–
A. Introduction
Securities Under Section 12(g) and 3628.
In December 2005, the Commission
Duty To File Reports Under Section SUPPLEMENTARY INFORMATION: We are
issued proposed amendments to its
13(a) or 15(d) of the Securities adopting amendments to Commission current rules governing when a foreign
Exchange Act of 1934 Rule 30–1,1 Rule 101 2 of Regulation S– private issuer 8 may exit the Exchange
T,3 and Rules 12g3–2, 12g–4 and 12h– Act reporting regime.9 Under the
AGENCY: Securities and Exchange
3 4 under the Exchange Act,5 and adding current rules, the primary determinant
Commission.
new Rule 12h–6 6 and Form 15F 7 under regarding whether a foreign private
ACTION: Final rule. the Exchange Act. issuer may terminate its registration of
SUMMARY: We are adopting amendments Table of Contents a class of securities under section
to the rules that govern when a foreign I. Executive Summary and Background 12(g) 10 or suspend its reporting
private issuer may terminate the A. Introduction obligations under section 15(d) 11 is if its
registration of a class of equity securities B. Principal Comments Regarding the subject securities are held of record by
under section 12(g) of the Securities Reproposed Rule Amendments less than 300 residents in the United
Exchange Act of 1934 (‘‘Exchange Act’’) C. Summary of the Adopted Rule States.12 The Commission proposed to
Amendments amend these rules out of concern that,
and the corresponding duty to file
II. Discussion due to the increased globalization of
reports required under section 13(a) of A. Conditions for Equity Securities Issuers
the Exchange Act, and when it may 1. Quantitative Benchmarks
securities markets in recent decades as
cease its reporting obligations regarding a. Trading Volume Benchmark well as other trends, it has become
a class of equity or debt securities under i. Calculation of the U.S. Trading Volume difficult for a foreign private issuer to
section 15(d) of the Exchange Act. Benchmark as a Percentage of exit the Exchange Act reporting system
Under the current rules, a foreign Worldwide Trading Volume Instead of even when there is relatively little U.S.
private issuer may find it difficult to Primary Trading Market Trading Volume investor interest in its U.S.-registered
terminate its Exchange Act registration ii. Inclusion of Off-Market Transactions in securities.13
the Trading Volume Calculation We recognize that U.S. investors
and reporting obligations despite the
iii. The 5 Percent Trading Volume Measure benefit from the investment
fact that there is relatively little interest iv. Definition of Equity Securities
in the issuer’s U.S.-registered securities opportunities provided by foreign
v. One Year Ineligibility Period After
among United States investors. private issuers registering their
Delisting
Moreover, currently a foreign private vi. One Year Ineligibility Period After securities with the Commission and
issuer can only suspend, and cannot Termination of Sponsored ADR Facility listing and publicly offering those
terminate, a duty to report arising under vii. Transition Period securities in the United States.
section 15(d) of the Exchange Act. New b. Alternative 300-Holder Condition However, because of the burdens and
Exchange Act Rule 12h–6 will permit a 2. Prior Exchange Act Reporting Condition uncertainties associated with
3. The One Year Dormancy Condition terminating registration and reporting
foreign private issuer of equity
4. Foreign Listing Condition under the Exchange Act, the current exit
securities to terminate its reporting B. Debt Securities Provision
obligations under either section 13(a) or process may serve as a disincentive to
C. Revised Counting Method foreign private issuers accessing the
section 15(d) of the Exchange Act by D. Expanded Scope of Rule 12h–6
meeting a quantitative benchmark 1. Application of Rule 12h–6 to Successor 8 See the definition of foreign private issuer at
designed to measure relative U.S. Issuers Exchange Act Rule 3b–4(c) (17 CFR 240.3b–4(c)).
market interest for its equity securities 2. Application of Rule 12h–6 to Prior Form 9 Release No. 34–53020 (December 23, 2005), 70
that does not depend on a head count 15 Filers FR 77688 (December 30, 2005) (Original Proposing
of the issuer’s U.S. security holders. The E. Public Notice Requirement Release).
F. Form 15F 10 This statutory section applies to equity
new rule will permit a foreign private
G. Amended Rules 12g–4 and 12h–3 securities only. See Exchange Act Section 12(g)(1)
issuer to compare the average daily H. Amendment Regarding the Rule 12g3– [15 U.S.C. 78l (g)(1)].
trading volume of its securities in the 2(b) Exemption 11 15 U.S.C. 78o(d). The effectiveness of a
United States with its worldwide 1. Extension of the Rule 12g3–2(b) registration statement under the Securities Act of
average daily trading volume, using a 5 Exemption Under Rule 12g3–2(e) 1933 (‘‘Securities Act’’) triggers Section 15(d)
reporting obligations. That section provides that an
percent benchmark. The accompanying 2. Electronic Publishing of Home Country issuer cannot suspend its reporting obligations
rule amendments will also help provide Documents unless the subject class of securities is held of
U.S. investors with ready access through I. Concerns Regarding Securities Act Rule record by less than 300 persons at the beginning of
the Internet on an ongoing basis to 701 a fiscal year other than the year in which the
Securities Act registration statement became
material information about a foreign 1 17 effective. Section 15(d) does not permit an issuer to
CFR 200.30–1.
private issuer of equity securities that is terminate, but only to suspend, its reporting
2 17 CFR 232.101.
required by its home country after it has obligations under that section.
3 17 CFR 232.10 et seq.
12 Exchange Act Rules 12g–4(a)(2)(i) (17 CFR
exited the Exchange Act reporting 4 17 CFR 240.12g3–2, 240.12g–4 and 240.12h–3.
240.12g–4(a)(2)(i)) and 12h–3(b)(2)(i) (17 CFR
system. The new rule will also permit 5 15 U.S.C. 78a et seq.
240.12h–3(b)(2)(i)).
a foreign private issuer of debt securities 6 17 CFR 240.12h–6. 13 See Original Proposing Release, 70 FR at
to terminate, rather than merely 7 17 CFR 249.324. 77689–77690.
Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations 16935
U.S. public capital markets.14 In order to primarily on a comparison of an issuer’s requested that we increase the
remove this disincentive, we proposed U.S. public float with its worldwide percentage in the trading volume-based
to amend the current Exchange Act exit public float, because it is a more direct measure to a percentage greater than 5
rules for foreign private issuers. measure of the issuer’s nexus with the percent, as reproposed, particularly if
As originally proposed, new Exchange U.S. market and because trading volume we did not move to a worldwide ADTV
Act Rule 12h–6 would have permitted a data is easier to obtain than public float standard.
foreign private issuer of equity or record holder data.18 We concluded Commenters expressed concern or
securities to terminate its Exchange Act that, in applying an exit standard based requested guidance regarding a number
registration and reporting obligations if, on trading volume data for the U.S. and of other issues, including:
among other conditions, it met one of a an issuer’s primary trading market, • the appropriateness of the proposed
set of alternative quantitative issuers would face reduced costs when provision that would prohibit reliance
benchmarks that, depending on whether determining whether they can terminate on the trading volume standard if an
the issuer was a well-known seasoned their registration and reporting issuer has delisted its securities from a
issuer (‘‘WKSI’’),15 was based either on obligations under the Exchange Act, U.S. exchange during the preceding 12
a combination of U.S. trading volume compared to the originally proposed months when its U.S. ADTV exceeded
and U.S. public float criteria or just U.S. standards that would have required an the 5 percent threshold;
public float data.16 However, numerous issuer to assess the U.S. residence of its • the appropriateness of the proposed
commenters stated that the originally security holders.19 provision that would prohibit reliance
proposed rules would still unduly on the trading volume standard if an
B. Principal Comments Regarding the issuer has terminated a sponsored
restrict a significant portion of U.S.-
Reproposed Rule Amendments American Depositary Receipts (ADR)
registered foreign private issuers from
exiting the Exchange Act reporting We received 30 comment letters in facility 21 during the preceding 12
regime, thus making it unlikely that the response to the reproposed rule months, regardless of whether the issuer
proposed rules would achieve their amendments.20 These letters met the trading volume benchmark at
purpose of attracting more foreign represented the views of over 40 distinct the time of termination;
companies to U.S. public capital entities, including business, financial • whether to include convertible debt
markets. and legal associations, foreign and other equity-linked securities in the
In light of these criticisms, we companies, financial advisory and definition of equity security for
reconsidered our approach and, in accounting firms, law firms, and one purposes of the new exit rule;
December 2006, we reproposed the foreign government. While the • whether a special financial report
amendments to the Exchange Act exit commenters generally strongly filed pursuant to Exchange Act Rule
rules for foreign private issuers.17 As an supported the trading volume-based 15d–2 22 would constitute an Exchange
alternative to the record holder standard approach and other aspects of the Act annual report for the purpose of the
for equity securities issuers, we reproposed rules, many offered reproposed prior reporting condition;
proposed a quantitative benchmark suggestions designed primarily to fine- • the appropriateness of the
based solely on a comparison of the tune those rules. reproposed dormancy condition for
average daily trading volume of a We received the most comments equity securities registrants,23 including
foreign private issuer’s equity securities concerning the reproposed trading whether it would prohibit an issuer
in the United States with that in its volume benchmark for equity securities from conducting a registered offering in
primary trading market. We reasoned issuers. Numerous commenters urged us which an underwriter has agreed to a
that a standard based on trading volume to adopt a quantitative benchmark that standby purchase commitment but only
may in fact be superior to the originally would require an issuer to measure its resells the purchased securities outside
proposed standard, which was based U.S. ADTV as a percentage of its ADTV the United States;
for the same class of securities on a • the appropriateness of the
14 See Part I.C of the Original Proposing Release worldwide basis, rather than against its reproposed foreign listing condition for
for a discussion of the concerns raised by foreign ADTV in its primary trading market, as equity securities registrants,24 including
private issuers regarding the current Exchange Act reproposed. Many commenters also whether it should apply to an issuer
exit regime. requested that we permit an issuer to relying on the alternative 300 holder
15 For purposes of proposed Rule 12h–6, a ‘‘well-
include off-market transactions when provision of Rule 12h–6, and to an
known seasoned issuer’’ meant a well-known
seasoned issuer as defined in Securities Act Rule calculating its worldwide ADTV for a
405 (17 CFR 230.405), which would have required class of equity securities, rather than 21 An ADR is a negotiable instrument that
the worldwide market value of an issuer’s only when calculating its U.S. ADTV, as represents an ownership interest in a specified
outstanding voting and non-voting common equity number of securities, which the securities holder
reproposed. Some commenters further has deposited with a designated bank depositary.
held by non-affiliates to be $700 million or more.
16 Under the original rule proposal, a WKSI
urged us to permit an issuer to include Use of an ADR facility makes it easier for a U.S.
would have been eligible to terminate its Exchange trades conducted through alternative resident to collect dividends in U.S. dollars.
Act reporting obligations regarding a class of equity trading systems when determining Moreover, because the clearance and settlement
securities if the U.S. average daily trading volume process for ADRs generally is the same for securities
whether it meets the proposed trading of domestic companies that are traded in U.S.
(‘‘ADTV’’) of the subject class of securities had been
no greater than 5 percent of the ADTV of that class
volume benchmark. Still others markets, a U.S. holder of an ADR is able to hold
of securities in its primary trading market during a securities of a foreign company that trades, clears
recent 12 month period, and U.S. residents held no 18 We reproposed the rule amendments primarily and settles within automated U.S. systems and
more than 10 percent of the issuer’s worldwide because the Commission did not fully address this within U.S. time periods.
public float as of a specified date. A WKSI with trading volume approach in the Original Proposing 22 17 CFR 240.15d–2.
greater than 5 percent U.S. ADTV or a non-WKSI Release. 23 As reproposed, Rule 12h–6 would prohibit an
would have been eligible for termination of 19 See Parts II.A.1.a and IV of the Reproposing equity securities registrant from selling its securities
reporting regarding a class of equity securities if, Release. in the United States in a registered offering under
regardless of U.S. trading volume, U.S. residents 20 These comment letters, along with the letters the Securities Act, except for specified registered
held no more than 5 percent of the issuer’s received at the proposing stage, are available on the offerings, during the 12 months preceding the filing
worldwide public float as of a specified date. See Commission’s Internet Web site, located at http:// of its Form 15F.
Part II.B.2.d of Release No. 34–53020. www.sec.gov/rules/proposed/s71205.shtml, and in 24 As reproposed, Rule 12h–6 would require an
17 Release No. 34–55005 (December 22, 2006), 72 the Commission’s Public Reference Room in its equity securities issuer to have maintained a listing
FR 1384 (January 11, 2007) (Reproposing Release). Washington, DC headquarters. on an exchange in its primary trading market.
issuer that delists from its non-U.S. worldwide ADTV for a class of equity trading in a foreign private issuer’s class
exchange in connection with being securities—as discussed in connection of securities that is the subject of Form
acquired; with calculating its U.S. ADTV, as 15F took place in, on or through the
• the role of a predecessor in reproposed—as long as the trading facilities of a securities market or
determining a successor issuer’s volume information regarding the off- markets in a single foreign jurisdiction
eligibility to terminate its Exchange Act market transactions is reasonably or in no more than two foreign
reporting obligations under reproposed reliable and does not duplicate other jurisdictions during a recent 12-month
Rule 12h–6, including whether, under trading volume information regarding period, as long as the trading in at least
Exchange Act Rule 12g–3(g),25 a the subject class of securities; one of the two foreign jurisdictions is
successor issuer would have to file an • require an issuer to wait 12 months larger than the trading in the United
Exchange Act annual report for the before filing its Form 15F in reliance on States for the same class of the issuer’s
predecessor’s most recently completed the trading volume standard if the issuer securities;
fiscal year before it could terminate its has delisted its class of equity securities • permit an equity securities issuer
reporting obligations under Rule 12h–6; from a national securities exchange or relying on the alternative 300-holder
• whether to permit a foreign automated inter-dealer quotation system standard, or a debt securities issuer, to
company that filed a Form 15 in the United States,27 or terminated a use a revised counting method that
previously to terminate or suspend its sponsored ADR facility and, at the time limits the inquiry regarding the amount
Exchange Act reporting obligations of delisting or termination, the U.S. of securities represented by accounts of
regarding a class of equity securities ADTV of the subject class of securities customers resident in the United States
before the effectiveness of new Rule exceeded 5 percent of its worldwide to brokers, dealers, banks and other
12h–6 to terminate its reporting ADTV for the preceding 12 months; nominees located in the United States,
obligations under the new exit rule • retain the 300-holder standard as an the foreign private issuer’s jurisdiction
without having to recount its holders, as alternative to the trading volume of incorporation, legal organization or
long as it meets that rule’s trading standard for an equity securities issuer establishment, and the one or two
volume benchmark; and as the quantitative standard for a jurisdictions comprising the issuer’s
• whether to increase the threshold debt securities issuer, as reproposed; primary trading market if different from
number of record holders in the debt • exclude convertible debt and other
the issuer’s jurisdiction of
securities provision; and equity-linked securities from the
incorporation, legal organization or
• whether an issuer that has filed a definition of equity security for the
establishment, as reproposed;
Form 15F 26 solely to terminate its purpose of new Rule 12h–6’s trading
• permit an issuer of equity or debt
reporting obligations regarding debt volume provision;
• require an equity securities securities to rely on the assistance of an
securities must wait until the independent information services
effectiveness of that termination before registrant to have at least one year of
Exchange Act reporting, be current in provider when determining whether the
it can submit an application for the Rule issuer falls below the 300-holder
12g3–2(b) exemption regarding a class reporting obligations for that period,
and have filed at least one Exchange Act standard, as reproposed;
of equity securities. • permit a successor issuer meeting
annual report, as reproposed;
C. Summary of the Adopted Rule • permit an issuer to count a special specified conditions to terminate its
Amendments financial report filed pursuant to Exchange Act reporting obligations
Exchange Act Rule 15d–2 as an under new Rule 12h–6, as reproposed; 28
We have carefully considered
Exchange Act annual report for the • permit a foreign private issuer that
commenters’ concerns regarding the
purpose of the new rule’s prior filed a Form 15 and suspended or
reproposed rules, and have addressed
reporting condition; terminated its Exchange Act reporting
many of them in the rule amendments
• prohibit an issuer of equity obligations under the current exit rules
that we are adopting today. As adopted,
securities from selling securities in the before the effective date of Rule 12h–6
new Exchange Act Rule 12h–6 and the
United States in a registered offering to terminate its Exchange Act reporting
accompanying rule amendments will:
• permit a foreign private issuer, under the Securities Act, except as obligations under new Exchange Act
regardless of size, to terminate its specified, during the 12 months Rule 12h–6, as long as, if regarding a
Exchange Act registration and reporting preceding the filing of its Form 15F (the class of equity securities, the issuer
obligations regarding a class of equity ‘‘dormancy condition’’), substantially as meets Rule 12h–6’s listing condition
securities, assuming it meets all the reproposed; and either the trading volume or
other conditions of Rule 12h–6, if, for a • require an issuer of equity securities alternative-300 holder condition or, if
recent 12-month period, the U.S. ADTV to have maintained a listing of the regarding a class of debt securities, the
of the subject class of securities has subject class of securities for at least the issuer meets the rule’s 300-holder
been no greater than 5 percent of its 12 months preceding the filing of its condition for debt issuers;
worldwide ADTV—rather than 5 Form 15F on one or more exchanges in • extend the Rule 12g3–2(b)
percent of the ADTV in its primary a foreign jurisdiction that, either singly exemption to a foreign private issuer of
trading market, as reproposed; or together with the trading of the same equity securities, including a successor
• permit an issuer to include off- class of the issuer’s securities in another issuer and prior Form 15 filer,
market transactions, including foreign jurisdiction, constitutes the immediately upon its termination of
transactions through alternative trading primary trading market for those reporting under Rule 12h–6, and require
systems, when calculating its securities, substantially as reproposed; the issuer to maintain that exemption by
• define primary trading market to publishing in English specified material
25 17 CFR 240.12g–3(g). mean that at least 55 percent of the home country documents required by
26 Like current Rules 12g–4 and 12h–3, which

require the filing of Form 15, reproposed Rule 12h– 27 Neither the OTC Bulletin Board operated by 28 See Part II.D.1 of this release for clarification
6 would require the filing of a form—Form 15F— Nasdaq nor the market operated by the Pink Sheets regarding the limited role of the predecessor in
by which an issuer would certify that it meets the LLC are deemed to be automated inter–dealer determining a successor issuer’s eligibility to
conditions for ceasing its Exchange Act reporting quotation systems. See Release 33–6862 (April 23, terminate its Exchange Act reporting obligations
obligations. 1999), n.22. under Rule 12h–6.
Rule 12g3–2(b) 29 on its Internet Web At the same time, we believe the II. Discussion
site or through an electronic information conditions that determine a foreign A. Conditions for Equity Securities
delivery system generally available to private issuer’s eligibility to terminate Issuers
the public in its primary trading market, its Exchange Act registration and
as reproposed; reporting regarding a class of equity 1. Quantitative Benchmarks
• permit a non-reporting company securities under new Rule 12h–6 will a. Trading Volume Benchmark
that has received or will receive the serve to protect U.S. investors. For
Rule 12g3–2(b) exemption, upon As adopted, new Exchange Act Rule
example, the prior reporting 12h–6 will enable a foreign private
application to the Commission and not condition 30 is intended to provide
pursuant to Rule 12h–6, to publish its issuer of equity securities, regardless of
investors with at least one complete size, to qualify for termination of its
‘‘ongoing’’ home country documents year’s worth of Exchange Act reports,
required under Rule 12g3–2(b) on its Exchange Act reporting by meeting a
including an annual report, upon which quantitative benchmark provision that
Internet Web site or through an they can base their investment decisions does not depend on the number of its
electronic information delivery system about a particular foreign registrant U.S. record holders or the percentage of
rather than submit them in paper to the before that registrant exits the Exchange its securities held by those holders.
Commission; and Act reporting system. The dormancy Under new Rule 12h–6, an issuer will
• permit an issuer that has filed a condition is designed to deter a foreign be able to terminate its Exchange Act
Form 15F to terminate its Exchange Act private issuer’s promotion of U.S. registration and reporting obligations
reporting obligations regarding a class of investor interest through recent regarding a class of equity securities,
debt securities to establish the Rule assuming it meets the other conditions
registered capital-raising shortly before
12g3–2(b) exemption for a class of of Rule 12h–6, if the ADTV of the
exiting our reporting system. The one
equity securities upon the effectiveness subject class of equity securities in the
year reporting and dormancy conditions
of its termination of reporting under United States has been 5 percent or less
Rule 12h–6, by submitting an are consistent with the statutory
requirements under section 15(d). of the ADTV of that class of securities
application for the Rule 12g3–2(b) on a worldwide basis during a recent
exemption after filing its Form 15F. The foreign listing condition and U.S. 12-month period.31 This trading volume
We are also adopting, as reproposed, trading volume benchmark support our benchmark is substantially similar to
procedural conditions that will: view that, before a foreign private issuer the reproposed standard, except that the
• require a foreign private issuer to may terminate its Exchange Act adopted benchmark requires an issuer to
file a Form 15F providing information reporting obligations under Rule 12h–6, measure its U.S. ADTV as a percentage
with respect to whether the issuer meets it must have been subject to an ongoing of its worldwide ADTV rather than the
the requirements for terminating its disclosure and financial reporting ADTV in its primary trading market.
reporting obligations under Rule 12h–6; regime, and have a significant market A threshold matter in this regulatory
• automatically suspend an issuer’s following, in its primary trading market. initiative has been what is the most
Exchange Act reporting obligations We have set the U.S. trading volume appropriate benchmark for equity
upon the filing of its Form 15F and benchmark at such a level that, although securities that would best serve the
trigger a 90-day waiting period at the there may be some U.S. investor interest interests of investors and issuers, and
end of which, assuming the Commission in the subject securities of an issuer most commenters addressed this issue.
has no objections, the suspension will meeting the benchmark, that interest Most of the commenters agreed that a
become a termination of reporting; and would appear to be sufficiently benchmark based solely on trading
• require a foreign private issuer to diminished so that a foreign private volume is superior to one based on a
publish a notice, such as a press release, issuer should not be required to combination of U.S. public float and
announcing its intention to terminate its continue its Exchange Act reporting if it trading volume criteria or just U.S.
Exchange Act reporting obligations determines that it is no longer desirable public float data, as under the originally
under Rule 12h–6, before or at the time to continue as a U.S. registrant. proposed Rule 12h–6, or one based on
of filing its Form 15F. the number of record holders in the
The condition restricting the ability of
We believe the rules that we are United States or on a worldwide basis,
an issuer to rely on the trading volume
adopting today provide meaningful as under the current exit rules. Most
standard under specified circumstances
protection of U.S. investors by commenters stressed that trading
(U.S. delisting and termination of a
permitting the termination of Exchange volume data is easier to obtain and
sponsored ADR facility) should deter an
Act registration and reporting only by confirm than is the data required for a
issuer from excluding U.S. investors, U.S. public float or record holder
those foreign registrants with relatively
particularly retail investors, from determination.32 As commenters have
low U.S. market interest in their U.S.-
registered securities. Compared to the investing in their securities when U.S. noted, it is difficult for a reporting
current exit rules, Rule 12h–6 will market interest is still significant. The foreign private issuer to determine
establish a more clearly defined process immediate availability of the exemption accurately the specific country of
with a more appropriate benchmark by under Rule 12g3–2(b) will foster access residence of its investors.33 Because a
which a foreign private issuer can by U.S. investors to ongoing home public float benchmark would require
terminate its Exchange Act reporting country information about an issuer such a determination to varying degrees,
obligations. As a result, we believe after it terminates its Exchange Act most commenters agreed with our
foreign private issuers should be more registration and reporting under Rule conclusion that the reproposed trading
willing initially to register their 12h–6. Finally, the conditions relating
securities with the Commission, which to the filing of Form 15F and the 31 New Exchange Act Rule 12h–6(a)(4)(i) (17 CFR
will provide more investment choices publication of a press release or other 240.12h–6(a)(4)(i)).
32 See, for example, the letter, dated February 12,
for U.S. investors. notice will promote transparency in the
2007, from Cleary Gottlieb, Steen & Hamilton LLP
exit process. (Cleary Gottlieb).
29 See Exchange Act Rule 12g3–2(b)(1)(iii) (17 33 See the comment letters discussed in Part
CFR 240.12g3–2(b)(1)(iii)). 30 See p. 12 and Part II.A.2 of this release. II.A.1.a of the Reproposing Release.
volume-based benchmark should result adopting the same trading volume a non-U.S. jurisdiction that principally
in reduced costs to issuers in standard for a smaller issuer as for a regulates and oversees the issuance and
determining whether they can terminate larger issuer in order to provide trading of the issuer’s securities and the
their Exchange Act reporting increased flexibility and simplification issuer’s disclosure obligations to
obligations.34 to the Exchange Act deregistration investors.45 Limiting the definition of
Some commenters supported the regime, and for the other reasons primary trading market in this context
reproposed trading volume measure discussed in the Reproposing Release.40 to no more than two jurisdictions helps
because it would provide a simple and to further the purpose of the foreign
clear measure of the degree of U.S. i. Calculation of the U.S. Trading
listing condition. In contrast, the
market interest in an issuer’s equity Volume Benchmark as a Percentage of
purpose of the trading volume
securities.35 Some commenters Worldwide Trading Volume Instead of
benchmark is to measure the relative
expressed the view that basing the new Primary Trading Market Trading
U.S. market interest in a foreign private
exit rule on a trading volume measure Volume
issuer’s equity securities. Accounting
would help ensure that an issuer’s Numerous commenters requested that for as much of the issuer’s trading as is
termination of Exchange Act registration the Commission calculate U.S. trading reasonably possible would further the
and reporting would not have a volume as a percentage of worldwide purpose of this rule.
significant impact on the primary price- trading volume rather than as a We agree that, in light of the number
setting determinants of an issuer’s percentage of ADTV in the issuer’s of foreign registrants that have listings
equity securities, which would allow for primary trading market,41 as in more than two jurisdictions, and
U.S. investors to trade in that issuer’s reproposed.42 The primary rationale for given the purpose of the trading volume
securities following its U.S. this request is that, with the increased benchmark, measuring an issuer’s U.S.
deregistration.36 globalization of securities markets, ADTV as a percentage of its worldwide
Commenters expressed their belief many issuers now trade on multiple ADTV would increase the likelihood of
that adoption of the reproposed trading non-U.S. markets. According to these obtaining a more accurate measure of
volume standard would enable commenters, since the goal of the relative U.S. market interest for that
significantly more foreign private reproposed trading volume benchmark issuer’s equity securities. Therefore, we
issuers to exit the Exchange Act is to determine the relative importance are adopting a trading volume
reporting regime if they so desire.37 of the U.S. trading market for an issuer’s benchmark for new Rule 12h–6 that will
Consequently, as one commenter securities, an issuer should be able to require an issuer to use as the
indicated, by removing restrictions take into account all non-U.S. trading in denominator of its trading volume
regarding the ability to exit U.S. its securities, and not just the trading calculation its worldwide ADTV for the
securities markets, adoption of new that has occurred in the one or two subject class of securities.46
Rule 12h–6 and the accompanying jurisdictions comprising its primary
trading market.43 ii. Inclusion of Off-Market Transactions
amendments will have a major impact
Some commenters maintained that, in the Trading Volume Calculation
on the perception that foreign
companies have of those markets, while it is reasonable to base Rule 12h– We reproposed to require an issuer to
making the U.S. capital markets ‘‘much 6’s foreign listing condition on the include both transactions occurring on a
more attractive and competitive on an reproposed primary trading market stock exchange and over-the-counter
international scale.’’38 definition, it is not so for the trading trades for the purpose of calculating
For the above reasons, we are volume benchmark.44 As discussed U.S. ADTV for the numerator of the
adopting a quantitative exit standard for below, the purpose of the foreign listing trading volume benchmark, but to
equity securities registrants based solely condition is to help assure that there is include only on-exchange transactions
on trading volume instead of one based for the purpose of calculating its ADTV
on a combination of trading volume and 40 For example, a trading volume standard that for the denominator (its primary trading
favored WKSIs could discourage smaller foreign market, as reproposed). We did so based
public float criteria or just public float companies from entering U.S. public capital
data. We also are adopting, as markets, to the detriment of U.S. investors. on our belief that trading volume
reproposed, one trading volume Moreover, commenters at the proposing stage noted information about over-the-counter
standard that will apply to all issuers of that the costs of continued Exchange Act reporting trades was more readily available in the
fall disproprotionately on smaller issuers. See Part United States than in many foreign
equity securities. Commenters generally II.A.1.a of the Reproposing Release.
supported having one benchmark 41 As discussed in Part II.A.4 of this release, we jurisdictions.
applicable to any foreign private issuer, define primary trading market to mean that at least Numerous commenters 47 urged the
regardless of size.39 Although we 55 percent of the trading in a foreign private issuer’s Commission to permit an issuer to
subject class of securities took place in, on or include ‘‘off-market’’ transactions when
originally proposed a set of quantitative through the facilities of a securities market or
benchmarks that depended primarily on markets in a single foreign jurisdiction or in no
determining whether it meets the 5
whether an issuer was a WKSI, we are more than two foreign jurisdictions during a recent
45 See Part II.A.4 of this release.
12-month period. If an issuer aggregates the trading
34 See,
in two foreign jurisdictions, the trading market for 46 Worldwide ADTV includes U.S. ADTV. Some
for example, the letter, dated February 12, the issuer’s securities in at least one of the two commenters favored a trading measure based on the
2007, from the European Association for Listed foreign jurisdictions must be larger than the United dollar value of shares traded rather than on the
Companies and other signatories (EALIC). States trading market for the same class of the
35 See, for example, the letter, dated February 12,
number of shares traded. See the letter, dated
issuer’s securities. We proposed a substantially February 12, 2007, from Ziegler, Ziegler and
2007, from Sullivan & Cromwell LLP (Sullivan & similar definition at the reproposing stage. Associates (Ziegler) and the letter from Galileo. We
Cromwell) and the letter, dated January 2, 2007, 42 See, for example, the letter, dated February 8, decline to adopt a trading value measure because
from Galileo Global Advisors (Galileo). 2007, from BusinessEurope, the letters, dated we believe that it would add an unnecessary level
36 See, for example, the letter from Cleary
February 12, 2007, from Davis Polk & Wardwell of complexity and cost to the non-record holder
Gottlieb. (Davis Polk), Linklaters, and Makinson Cowell, and determination.
37 See, for example, the letter, dated February 12, the letters from Cleary Gottlieb, EALIC, and the EU. 47 See the letters from BusinessEurope, Cleary
2007, from the European Commission. In contrast, only one commenter opposed using Gottlieb, Davis Polk, EALIC, the EU, Makinson
38 See the letter from Cleary Gottlieb. worldwide trading volume. See the letter from Cowell, and Sullivan & Cromwell, and the letters,
39 See, most recently, the letter, dated February Galileo. dated February 12, 2007, from the International Bar
43 See the letters from Cleary Gottlieb and EALIC.
23, 2007, from the American Bar Association, Association and Skadden Arps Slate Meagher &
Section of Business Law (ABA). 44 See the letter from Linklaters. Flom (Skadden Arps).
percent trading volume standard, rather These comments have persuaded us to be reliable and that do not duplicate
than just transactions occurring on a that, for at least some foreign private trading volume information obtained
stock exchange, as reproposed. These issuers, information regarding off- from other sources, such as various
commenters maintained that it was exchange transactions in non-U.S. exchanges or markets.59 Issuers will be
inappropriate to require an issuer to jurisdictions will be readily obtainable. required to disclose their trading
include both on-exchange and off- Therefore, under adopted Rule 12h–6, volume data sources on Form 15F,
exchange transactions when calculating when making its trading volume which will inform investors of the data
its U.S. ADTV but not when calculating determination, an issuer must include sources used.60
its worldwide trading volume. As noted in its calculation of U.S. ADTV both on-
iii. The 5 Percent Trading Volume
by some of these commenters, members exchange and off-exchange transactions,
Measure
of Euronext markets are currently as reproposed. For both on-exchange
required to report off-market and off-exchange transactions in the Commenters expressed a variety of
transactions.48 Moreover, some United States, we expect an issuer to be views on whether 5 percent U.S. ADTV
commenters noted that an EU able to obtain relevant trading volume was the appropriate threshold for the
Directive,49 scheduled for effectiveness information as reported pursuant to an trading volume benchmark. Although
in November 2007, will generally effective transaction reporting plan,56 some commenters requested that the
require the reporting of off-market pursuant to NASD rules,57 or reported Commission increase the percentage to
transactions, which will make by a national securities exchange 10 percent ADTV,61 many others
information regarding off-market otherwise than pursuant to an effective supported the 5 percent threshold.62
transactions generally available in transaction reporting plan. In addition, Moreover, some of the commenters that
Europe the same way that such an issuer may include in its calculation requested an increase to 10 percent did
information is available through a of worldwide ADTV off-market so only if the Commission decided not
transaction reporting plan in the United transactions, including transactions to adopt a world-wide trading based
States.50 conducted through alternative trading benchmark.63
systems, in addition to transactions We believe that adoption of the ‘‘5
Some of these commenters urged the percent of worldwide trading volume’’
Commission to permit an issuer to occurring on an exchange, as long as an
issuer has obtained the information standard will permit foreign companies
include not only off-market transactions with relatively little U.S. market interest
that currently occur through traditional concerning the off-market transactions
from publicly available sources or third- to deregister.64 Moreover, by permitting
over-the-counter means, but those that an issuer to include both on-exchange
may occur through alternative trading party information service providers,
and off-exchange transactions when
systems.51 According to these upon which the issuer has reasonably
calculating its worldwide ADTV, we
commenters, MiFID will encourage the relied in good faith, and as long as the
have addressed the concerns of
development of such trading systems.52 off-market transaction information does
commenters who suggested the 5
These commenters stated that, as long as not duplicate any other trading volume
percent threshold could be too low to
trading information is credible and the information obtained.
In response to our request for achieve the rule’s purpose of reducing
sources reliable, an issuer should be the disincentive to U.S. registration that
comments on whether issuers should be
able to include information about may be caused by the current exit
required to obtain trading volume data
securities transactions regardless of the regime.
from particular sources, a number of
platform on which they occur.53
commenters advocated that the final iv. Definition of Equity Securities
Some commenters requested that, if rules provide issuers with sufficient
the Commission does not permit an We reproposed that, for purposes of
flexibility to use such data sources as new Rule 12h–6, an issuer would use
issuer to include off-market transactions they deem reliable and
when determining its worldwide trading the definition of equity security
appropriate.58 The adopted rules do not provided in Exchange Act Rule 3a11–
volume for the denominator of its specify any particular data sources that
trading volume calculation, it should 1.65 That provision includes equity-
issuers must use to determine either its linked securities, such as convertible
also prohibit the inclusion of off-market U.S. or worldwide trading volume. In
transactions when determining its U.S. debt securities and warrants, within the
this respect, when obtaining definition of equity security. Several
ADTV for the numerator of that information concerning either on-
calculation.54 In contrast, one commenters 66 requested that the
exchange or off-exchange transactions, Commission exclude equity-linked
commenter, which favored a worldwide issuers will have the latitude to use
trading volume measure, expressly securities from the definition of equity
market data vendors or other
requested that the Commission prohibit commercial service providers and 59 See Instruction 3.c to Item 4 of Form 15F.
the inclusion of off-market transactions publicly available sources of market 60 See Item 4.F of Form 15F.
for both the numerator and denominator information that they reasonably believe 61 See the letter, dated February 9, 2007, from
because of the difficulty of obtaining SGL Carbon, the letter, dated February 12, 2007,
over-the-counter trading information.55 56 Rule 601 of Regulation NMS (17 CFR 242.601) from Fried Frank Harris Shriver & Jacobson (Fried
requires every national securities exchange to file Frank), and the letter from Skadden Arps. Another
a transaction reporting plan regarding transactions commenter requested an increase to 15 percent. See
48 See, for example, the letter from Cleary
in listed equity and Nasdaq securities. the letter from i-CABLE Communications Ltd. (i-
Gottlieb. CABLE).
57 See, for example, NASD Manual Rule 6600 et
49 Directive 2004/39/EC, also known as the 62 See the letters from Cleary Gottlieb, EALIC,
Market in Financial Instruments Directive (MiFID). seq. for rules regarding recording and reporting
transactions in OTC Equity Securities. A member Galileo, Sullivan & Cromwell, and the New York
50 See the letters from Cleary Gottlieb, the EU, and
broker-dealer must report information concerning State Society of Certified Public Accountants
BusinessEurope. (NYSSCPA).
OTC trades not involving a listed security,
51 See the letters from the EU and Davis Polk. 63 See the letters from the ABA, BusinessEurope,
including a Nasdaq security, under the NASD rules
52 See, for example, the EU letter. and Linklaters.
rather than pursuant to a transaction reporting plan
53 See, for example, the letter from Davis Polk. 64 See Part III, n. 191 of this release.
since the latter only covers unlisted transactions
54 See the letters from BusinessEurope and the involving listed (and Nasdaq) securities. 65 17 CFR 240.3a11–1.
EU. 58 See, for example, the letters from Cleary 66 See the letters from BusinessEurope, the EU,
55 See the letter from Skadden Arps. Gottlieb and EALIC. EALIC and Cleary Gottlieb.
security on the grounds that trading months preceding the date of concern about possible negative impacts
volume information for equity-linked delisting.70 Under this condition: on U.S. investors stemming from a
securities is difficult to obtain. One • a listed foreign private issuer that measure based solely on trading
commenter suggested using instead the satisfied the trading volume condition volume. Moreover, by requiring
definition of equity security provided in will be able to delist from its stock companies to remain registered and
the Securities Act cross-border rules, exchange and terminate its Exchange reporting under the Exchange Act for a
which explicitly excludes convertible Act registration and reporting period of time after delisting when,
debt and other equity-linked obligations concurrently; and before delisting, the company had a
securities.67 • a listed foreign private issuer that relatively active U.S. market for its
We agree with those commenters that, did not satisfy the trading volume securities, U.S. investors will have
because trading volume information condition will be able to delist but will access to information prepared in
concerning convertible debt and other not be eligible to file a Form 15F and accordance with the Commission’s
equity-linked securities is more difficult terminate its Exchange Act registration financial reporting and disclosure
to obtain than trading volume and reporting obligations until one year requirements for a period of time during
after the date of delisting, assuming that, which, most likely, the U.S. market will
information for the underlying equity
at that time, it meets the conditions of be diminishing. Accordingly, we are
securities, an issuer should not have to
the rule.71 adopting the delisting condition
include equity-linked securities when
We are adopting this condition in substantially as proposed.74
determining whether it meets the
order to prevent the new trading
trading volume benchmark. The same
volume-based rule from creating an vi. One Year Ineligibility Period After
reasoning applies to an issuer’s
incentive for a foreign private issuer to Termination of Sponsored ADR Facility
determination concerning the foreign
delist its securities from a U.S. exchange
listing condition, which requires an As part of the rule reproposal, we
for the purpose of decreasing its U.S.
issuer to meet the definition of primary proposed an additional condition to an
trading volume. As one commenter
trading market, which is a trading issuer’s use of Rule 12h–6 and eligibility
suggested early on, if we were to adopt
volume-based definition.68 Therefore, to file Form 15F in reliance on the
a standard based solely on trading
we are adopting a definition of equity trading volume provision. That
volume, a foreign private issuer that
security that is based on Rule 3a11–1, condition provided that a foreign
delisted its securities from a U.S.
except that, for purposes of the trading private issuer must not have terminated
exchange before its trading volume fell
volume and foreign listing provisions of any sponsored ADR facility within the
below the applicable percentage should
Rule 12h–6, the definition explicitly 12 month period before filing its Form
not be eligible to terminate its
excludes: 15F. We proposed that condition in
registration under such a standard.72
• any debt security that is convertible A few commenters requested that the order to encourage foreign private
into an equity security, with or without Commission remove this delisting issuers to maintain their ADR facilities,
consideration; condition on the grounds that it even after they delist from a U.S. market
• any debt security that includes a imposed a restraint on the use of the and terminate their Exchange Act
warrant or right to subscribe to or new exit rule that was not necessary for reporting obligations.
purchase an equity security; the protection of U.S. investors.73 We After a foreign private issuer delists
agree that companies should not be
• any such warrant or right; or and deregisters, investors will benefit if
unnecessarily restricted in choosing the its ADRs continue to be traded in the
• any put, call, straddle, or other markets on which their securities are
option or privilege that gives the holder over-the-counter market in the United
listed. Thus, we do not believe that States. The termination of ADR facilities
the option of buying or selling a security delisting from a U.S. exchange should
but does not require the holder to do has a detrimental impact on holders,
result in an automatic bar against a
so.69 imposing fees and other charges on
foreign private issuer from using the
investors and, when investors are
v. One Year Ineligibility Period After new exit rule. Nonetheless, we share the
cashed out, subjecting investors to
Delisting 70 New Exchange Act Rule 12h–6(b)(1) (17 CFR unplanned tax consequences and
240.12h–6(b)(1)). We previously proposed to codify limiting their investment choices.75 In
We are adopting, substantially as this delisting requirement, along with a similar addition, the termination of ADR
proposed, a condition to the use of Rule requirement concerning termination of a sponsored facilities will limit the ability of many
12h–6’s trading volume standard and ADR facility, as Notes to paragraph (a)(4) of
reproposed Rule 12h–6. We have restructured final U.S. investors to effect transactions in
corresponding eligibility to file Form
Rule 12h–6 to provide for these requirements in a
15F. This condition provides that if a separate paragraph and have changed the paragraph 74 Some commenters requested that we exempt
foreign private issuer has had its equity numbering of the adopted rule accordingly. As from the delisting condition an issuer that has been
securities delisted from a registered adopted, Rule 12h–6(b) does not apply to issuers involuntarily delisted. See, for example, the letter,
national securities exchange or terminating their reporting obligations under either dated February 22, 2007, from Cravath, Swaine &
Rule 12h–6(d) (the successor issuer provision) or Moore (Cravath). We decline to do so since such an
automated inter-dealer quotation system Rule 12h–6(i) (the prior Form 15 filer provision). exemption could encourage an issuer not to comply
within one year before filing the Form 71 For example, an issuer that failed to meet the
with exchange standards in order to get delisted.
15F, it must have satisfied the trading trading volume standard at the date of delisting 75 When an issuer terminates its ADR facility, the
volume percentage as of the date of would have to meet the trading volume standard holders of ADRs generally have the option to make
delisting, as measured over the 12 one year later when filing its Form 15F. If, arrangements to hold the underlying securities
notwithstanding its delisting, an active U.S. over- directly. However, if holders are unable or
the-counter market in the company’s securities unwilling to make these arrangements, or to pay the
67 See the letter from Cleary Gottlieb, which cites continued, the company would not be eligible to costs associated with these arrangements, the
Securities Act Rule 800(b) (17 CFR 230.800(b)). use Rule 12h–6 and file a Form 15F in reliance on holders will have their investment cashed out, that
68 See Part II.A.4 of this release. the trading volume benchmark. is, the underlying securities will generally be sold
69 New Exchange Act Rule 12h–6(f)(3) (17 CFR 72 See the letter, dated February 9, 2004, from
into the home market and the net proceeds (after
240.12h–6(f)(3)). These are the same categories of Cleary Gottlieb. deducting fees and expenses of the selling broker
securities excluded from the definition of equity 73 See the letters from Galileo, Makinson Cowell and the depositary bank) remitted to the former
security under Securities Act Rule 800(b). and SGL Carbon. ADR holders.
the securities of the subject foreign ADR facility before the effective date of The adopted alternative record holder
company. the new exit rule. One commenter 80 condition is substantially the same as
Some commenters opposed the ADR requested that neither provision apply the proposed and reproposed condition.
facility termination condition on to an issuer that delisted or terminated Although at the proposing stage, some
grounds similar to those raised against a sponsored ADR facility before commenters requested that the
the delisting condition. However, these December 13, 2006, which is the date of Commission significantly raise the 300-
commenters also objected to the fact the open meeting at which the holder threshold in both the Exchange
that, unlike the delisting condition, the Commission voted to repropose Rule Act exit and entrance rules, and a few
proposed ADR facility condition 12h–6 and the accompanying rule made a similar request at the
applied regardless of whether, at the amendments. reproposing stage,83 we decline to adopt
time of termination of its ADR facility, We agree that, in the interests of an increase to the 300-holder threshold
an issuer met the trading volume fairness, an issuer should not be for foreign private issuers either in the
threshold measured for the previous 12 precluded from relying on Rule 12h–6’s exit or entrance rules at this time. As we
months.76 One commenter stated that trading volume provision because it previously stated, the limited purpose
adoption of the reproposed condition delisted or terminated a sponsored ADR for retaining the 300-holder provision in
could dissuade issuers from sponsoring facility before the Commission had even the new exit rule is to preclude
ADR programs, to the detriment of U.S. proposed to make those acts meaningful disadvantaging those companies that
investors.77 to the application of Rule 12h–6. could terminate their Exchange Act
We continue to believe that, due to However, we believe that March 21, reporting obligations under the current
the importance of ADR facilities for U.S. 2007 should be the dispositive date exit rules but not under the new trading
investors, a sponsored ADR facility since, on that date, the Commission volume condition.84 Moreover, since
termination condition is appropriate. voted to adopt the delisting and ADR domestic registrants are subject to a
However, we agree with commenters termination conditions, thus making substantially similar record holder
that the importance of this concern definite its intent that those conditions standard, we believe any change would
significantly diminishes if, at the time of apply to Rule 12h–6’s trading volume be more appropriately considered as
its termination of a sponsored ADR provision. part of a comprehensive evaluation of
facility, an issuer’s U.S. ADTV has Therefore, a foreign private issuer the record holder provisions in both the
already fallen below the trading volume that, before March 21, 2007, delisted a Exchange Act entrance and exit rules for
threshold. class of equity securities from a national both domestic and foreign registrants.85
Therefore, we are adopting a securities exchange or inter-dealer In addition, issuers relying on the
condition providing that, if an issuer quotation system in the United States or alternative holder provision will be able
has terminated a sponsored ADR terminated a sponsored ADR facility, to use the revised counting method that
facility, and at the time of termination may file a Form 15F in reliance on Rule we are adopting today, which should
the average daily trading volume in the 12h–6’s trading volume provision even make the U.S. holder determination
United States of the ADRs exceeded 5 if, at the time of delisting or easier for those issuers.86
percent of the average daily trading termination, its U.S. ADTV exceeded 5
volume of the underlying class of percent of the ADTV of that class of 2. Prior Exchange Act Reporting
securities on a worldwide basis for the securities on a worldwide basis for the Condition
preceding 12 months, the issuer must preceding 12 months. We are adopting, substantially as
wait 12 months before it may file a Form reproposed, a prior Exchange Act
15F to terminate its Exchange Act b. Alternative 300-Holder Condition reporting condition that a foreign
reporting obligations in reliance on Rule We are adopting, substantially as private issuer must meet before it can
12h–6’s trading volume provision.78 We reproposed, an alternative to the trading terminate its section 12(g) registration or
are also clarifying that, for purposes of volume benchmark provision, which its section 15(d) reporting obligations
Rule 12h–6’s trading volume provision, will permit a foreign private issuer to regarding a class of equity securities
an issuer must calculate the trading terminate its Exchange Act reporting under Rule 12h–6.87 This condition will
volume of its ADRs in terms of the obligations regarding a class of equity require an issuer of equity securities to
number of securities represented by securities if it has less than 300 record have had reporting obligations under
those ADRs.79 holders on a worldwide basis or who are section 13(a) or section 15(d) of the
vii. Transition Period U.S. residents as long as the issuer Exchange Act for at least the 12 months
meets the rule’s other conditions.81 The preceding the filing of Form 15F, to
In connection with our reproposal of
purpose of this alternative 300-holder have filed or furnished all reports
Rule 12h–6, we solicited comment on
condition is to enable an issuer to required for this period, and to have
whether the proposed delisting and
terminate its Exchange Act reporting filed at least one annual report pursuant
ADR termination conditions should
obligations if it cannot satisfy the new
apply to a foreign private issuer that
trading volume benchmark but does relied on that provision due to the difficulty in
delisted its equity securities from a U.S. meeting the asset test.
meet the current 300-holder standard.
exchange or terminated a sponsored 83 See the letters from the ABA and the
Otherwise, an issuer could find itself
Organization for International Investment.
76 See, for example, the letter, dated February 12, worse off under Rule 12h–6 than under 84 See Part II.A.1.b of the Reproposing Release.
2007, from the New York State Bar Association the current exit rules.82 85 In this regard, we note that the Advisory
(N.Y. State Bar), and the letters from the ABA and Committee on Smaller Public Companies has made
Linklaters. 80 See the letter from the ABA. recommendations relating to Exchange Act
77 See the letter from the N.Y. State Bar. 81 New registration and termination of registration. See the
Exchange Act Rule 12h–6(a)(4)(ii) (17 CFR
78 New Exchange Act Rule 12h–6(b)(2) (17 CFR 240.12h–6(a)(4)(ii)). Final Report of the Advisory Committee on Smaller
240.12h–6(b)(2)). 82 We did not originally propose or repropose a Public Companies, dated April 23, 2006, which is
79 Note to paragraph (a)(4) of Rule 12h–6. similar 500 record holder condition, although one available at http://www.sec.gov/info/smallbus/
Typically the ratio defining the number of common exists in the current rules for a small issuer with acspc/acspc-finalreport.pdf.
86 See Part II.C of this release.
or ordinary shares underlying each ADR is included total assets that have not exceeded $10 million for
as part of the deposit agreement or in an exhibit to its most recent three fiscal years. Based on current 87 New Exchange Act Rule 12h–6(a)(1) (17 CFR
that agreement. experience, most foreign private issuers have not 240.12h–6(a)(1)).
to section 13(a) of the Exchange Act. foreign private issuer as required by its with Rule 12h–6’s prior reporting
The purpose of this prior Exchange Act home country. We continue to believe condition.
reporting condition is to provide that our rules should provide
3. One Year Dormancy Condition
investors in U.S. securities markets with appropriate incentives for companies to
a minimum period of time to make stay current with their Exchange Act We are adopting, as reproposed, a one
investment decisions regarding a foreign reporting obligations. year dormancy condition with which a
private issuer’s securities based on the From a practical point of view, the 12- foreign private issuer must comply
information provided in an Exchange month prior reporting requirement before it can terminate its Exchange Act
Act annual report and the interim home should not be problematic since, based registration and reporting obligations
country materials furnished in English on current experience, most foreign regarding a class of equity securities
under cover of Form 6–K.88 companies that register securities with under Rule 12h–6.96 New Rule 12h–6
Originally proposed Rule 12h–6 the Commission, including solely under will prohibit sales of a foreign private
would have required a foreign private Exchange Act section 12(g), stay in the issuer’s securities in the United States
issuer to have had Exchange Act U.S. market for at least a year and file in a registered offering under the
reporting obligations for the two years at least one Exchange Act annual Securities Act during the 12 months
preceding the filing of its Form 15F and report.92 Moreover, the prior reporting preceding the filing of its Form 15F
to have filed at least two Exchange Act condition will require that a foreign other than securities issued:
annual reports before it could terminate private issuer must be current in its • to the issuer’s employees;
its Exchange Act reporting obligations reporting obligations, not that it must • by selling security holders in non-
regarding a class of equity securities. As have timely filed all reports required underwritten offerings;
previously noted, several commenters during the 12 month period. In the • upon the exercise of outstanding
objected to this two year reporting event that an issuer determines that it rights granted by the issuer if the rights
condition primarily on the grounds that should have filed a Form 6–K during are granted pro rata to all existing
it would impose a stricter reporting this period, it can do so before it files security holders of the class of the
requirement than is the case under the its Form 15F. issuer’s securities to which the rights
current exit rules.89 In response to those Another commenter 93 requested that attach;
commenters, when reproposing Rule we permit an issuer to satisfy the prior • pursuant to a dividend or interest
12h–6, we reduced the required prior Exchange Act annual report requirement reinvestment plan; or
reporting period to at least 12 months by filing a special financial report • upon the conversion of outstanding
and proposed to require only one required under Exchange Act Rule 15d– convertible securities or upon the
Exchange Act annual report. 2.94 We agree that it would be exercise of outstanding transferable
We received only a few comments on appropriate to have the special financial warrants issued by the issuer.
the reproposed prior reporting condition report satisfy the annual report filing The primary purpose of the dormancy
for equity security issuers. One requirement under new Rule 12h– condition’s prohibition of registered
commenter supported the revisions 6(a)(1). In this situation, an issuer will offerings is to preclude a foreign private
made to the proposed prior reporting have recently sold securities under an issuer from exiting the Exchange Act
condition but urged the Commission to effective Securities Act registration reporting system shortly after it has
permit an issuer to terminate its statement with non-financial engaged in U.S. public capital raising.
Exchange Act reporting obligations information as current as the date of the We received relatively few comments
regarding a class of equity securities prospectus, and the information in the on the reproposed dormancy
even if it has not submitted all required special financial report will provide condition.97 Most welcomed the
Form 6–Ks.90 That commenter pointed financial statements and other revisions made to the originally
to the difficulties that a foreign private information as of and for the most proposed dormancy condition.98 For
issuer may experience when recent fiscal year end, thus serving the example, the originally proposed rule
determining whether a Form 6–K same purpose as an Exchange Act would have prohibited sales of
submission is required under foreign annual report. unregistered securities, with limited
reporting and U.S. materiality In addition, this approach is exceptions. We removed this
requirements. consistent with our recent prohibition when reproposing Rule
As adopted, Rule 12h–6 will require implementation rules for the internal 12h–6 after commenters convinced us
a foreign private issuer to have control over financial reporting that adoption of the originally proposed
submitted all Form 6–Ks required requirements mandated by Section 404 dormancy condition could well drive
during the 12 months preceding the of the Sarbanes-Oxley Act of 2002.95 many private placement financings and
filing of its Form 15F in order to be Accordingly, we are clarifying that a other unregistered offerings by foreign
eligible to terminate its reporting special financial report, filed with the companies offshore, to the detriment of
obligations regarding a class of equity Commission pursuant to Rule 15d–2, U.S. investors and U.S. broker-dealers,
securities. This requirement will help constitutes an Exchange Act annual since many companies might prefer to
ensure that a U.S. investor is able to report for the purpose of complying finance outside the United States under
access through EDGAR 91 and in English Regulation S in order to avoid triggering
all material interim information about a 92 See, for example, the letter from Galileo. the dormancy condition. Consequently,
93 See the letter from Sullivan & Cromwell. as reproposed, the adopted rule will
88 Under cover of a Form 6–K (17 CFR 249.306), 94 17 CFR 240.15d–2. This rule requires an issuer
permit the unregistered sale of securities
a foreign private issuer is required to furnish in that filed a Securities Act registration statement,
English a copy of any document that it publishes which did not contain audited financial statements
that are exempted under the Securities
or is required to publish under the laws of its home for the last full fiscal year preceding the year in
country or the requirements of its local exchange or 96 New Exchange Act Rule 12h–6(a)(2) (17 CFR
which the registration statement became effective,
that it has distributed to shareholders, and which to file a special financial report with the 240.12h–6(a)(2)).
is material to an investment decision. Commission that includes audited financials for 97 See the letters from the ABA, Linklaters, the
89 See Part II.A.2 of the Reproposing Release. that last full fiscal year. N.Y. State Bar, Sullivan & Cromwell, and Skadden
90 See the letter from the ABA. 95 15 U.S.C. 7262. See Release No. 33–8760 Arps.
91 EDGAR is the Commission’s Electronic Data (December 15, 2006), 71 FR 76580 (December 21, 98 See the letters from the ABA, Skadden Arps,
Gathering, Analysis and Retrieval System. 2006). and Sullivan & Cromwell.
Act during the dormancy period. The sales of an issuer’s securities by its That definition further provides that if
permitted category of securities will selling security holders in an an issuer aggregates the trading of its
include sales pursuant to section 4(2),99 underwritten registered offering because securities in two foreign jurisdictions
Regulation D,100 Rule 144A,101 Rules there is a greater likelihood of issuer for the purpose of Rule 12h–6’s foreign
801 and 802,102 and exempt securities involvement in a U.S. underwritten listing condition, the trading for the
under section 3, including section offering than in a non-underwritten issuer’s securities in at least one of the
3(a)(10) of the Securities Act.103 offering of selling security holders. two foreign jurisdictions must be larger
Some of the comments pertained to New Exchange Act Rule 12h–6 will than the trading in the United States for
additional proposed exceptions to the use the definition of ‘‘employee’’ under the same class of the issuer’s
dormancy condition. As originally Form S–8 107 for the purpose of applying securities.112
proposed, Rule 12h–6 would have the dormancy condition under Rule The purpose of this foreign listing
excepted from the dormancy condition’s 12h–6, as reproposed.108 That definition condition is to help assure that there is
prohibition of sales of an issuer’s includes any employee, director, general a non-U.S. jurisdiction that principally
registered securities in the United States partner, certain trustees, certain regulates and oversees the issuance and
only securities sold to an issuer’s insurance agents, and former employees trading of the issuer’s securities and the
employees and those sold by selling as well as executors, administrators or issuer’s disclosure obligations to
security holders in non-underwritten beneficiaries of the estates of deceased investors. This foreign listing condition
offerings. When reproposing Rule 12h– employees, and a family member of an increases the likelihood that the
6, we proposed three additional employee who has received shares principal pricing determinants for a
exceptions to the dormancy condition’s through a gift or domestic relations foreign private issuer’s securities are
prohibition of sales of an issuer’s order.109 Otherwise, a narrow located outside the United States, and
registered securities: the issuance of interpretation of the term ‘‘employee’’ makes more likely the availability of a
registered securities pursuant to pro rata could result in an issuer being set of non-U.S. securities disclosure
rights offerings, dividend or interest disqualified from terminating its documents to which a U.S. investor may
reinvestment plans, and the conversion Exchange Act registration and reporting turn for material information when
of outstanding convertible securities.104 obligations under Rule 12h–6 because it making investment decisions about the
Like the earlier proposed exceptions, engaged in a sale of securities during the issuer’s securities following the
these transactions often occur for dormancy period to an employee’s termination of its disclosure obligations
reasons unrelated to capital raising or family member or other relationship under Rule 12h–6. If the United States
for the benefit of the issuer, for example, permitted under Form S–8 but not was the sole or principal market for the
to benefit current security holders or for explicitly allowed under the new rule. foreign private issuer’s securities, then
the convenience of investors. the Commission would have a greater
We also reproposed that these 4. Foreign Listing Condition
regulatory interest in continuing to
additional exceptions would not apply We are adopting a foreign listing subject the foreign company to the
to securities issued pursuant to a condition under Rule 12h–6, which will Exchange Act reporting regime.
standby underwritten offering or other require that, with respect to equity The adopted foreign listing condition
similar arrangement in the United securities, for at least the 12 months is substantially the same as the
States. As we explained, this limitation preceding the filing of its Form 15F, a reproposed condition, except that, at the
is consistent with the Commission’s foreign private issuer must have request of commenters, we have
previous treatment of these types of maintained a listing of the subject class modified the rule to reflect that an
registered offerings.105 of securities on one or more exchanges issuer may be listed on multiple
Two commenters requested that we in a foreign jurisdiction that, either exchanges within a single
clarify that an issuer would not trigger singly or together with the trading of the jurisdiction.113 Thus, the new rule
the dormancy condition if it conducted same class of the issuer’ s securities in provides that an issuer may aggregate
a registered offering involving, for another foreign jurisdiction, constitutes trading in the same class of its equity
example, a rights offering, in the United the primary trading market for the securities on all of its exchanges within
States, with a standby underwriting issuer’s subject class of securities.110 a single foreign jurisdiction or in no
arrangement according to which the The new rule defines ‘‘primary trading more than two foreign jurisdictions for
underwriter only resold the securities market’’ to mean that at least 55 percent the purpose of the foreign listing
purchased in the offering outside the of the trading in the foreign private condition, as long as the trading in one
United States pursuant to Regulation issuer’s subject class of securities took of the foreign jurisdictions is greater
S.106 We agree that this type of standby place in, on or through the facilities of than the trading in the United States.114
underwritten arrangement would not a securities market or markets in no
trigger the dormancy condition since it more than two foreign jurisdictions 112 New Exchange Act Rule 12h–6(f)(5)(ii) (17
would not increase an issuer’s during a recent 12-month period.111 CFR 240.12h–6(f)(5)(ii)). As proposed and as
involvement in public capital raising in adopted, measurement under this condition is by
107 17 CFR 239.16b. Form S–8 is the form used reference to average daily trading volume (ADTV)
the United States. by an Exchange Act reporting company to register as reported by the relevant market. Although the
Also as reproposed, the adopted rule securities for issuance to its employees or those of proposing and reproposing releases noted that there
includes under the dormancy condition its subsidiaries or parent under an employee benefit are differences concerning how various markets
plan. measure and report trading volume (for example,
99 15 U.S.C. 77d(2).
108 New Exchange Act Rule 12h–6(f)(2) (17 CFR dealer markets versus auction markets), no
100 17 240.12h–6(f)(2)). commenter supported a trading volume standard
CFR 230.501 et seq.
101 17 CFR 230.144A.
109 See General Instruction A.1 to Form S–8. that would take such differences into account.
110 New Exchange Act Rule 12h–6(a)(3) (17 CFR 113 See, for example, the letter from Cravath.
102 17 CFR 230.801 and 230.802.
240.12h–6(a)(3)). 114 For the purpose of the primary trading market
103 15 U.S.C. 77c and 77c(a)(10).

111 New Exchange Act Rule 12h–6(f)(5)(i) (17 CFR determination, an issuer would measure the ADTV
104 See Part II.A.3 of the Reproposing Release.
240.12h–6(f)(5)(i)). Rule 12h–6 defines ‘‘recent 12- of on-exchange transactions in its securities
105 Instruction 2 to Item 8 of Form 20–F imposes
month period’’ to mean a 12-calendar month period aggregated over one or two foreign jurisdictions
a similar limitation. that ended no more than 60 days before the filing against its worldwide trading volume. The issuer
106 See the letters from Linklaters and the N.Y. date of the Form 15F. New Exchange Act Rule 12h– could include in this measure off-exchange
State Bar. 6(f)(6) (17 CFR 240.12h–6(f)(6)). Continued
We received relatively few comments whether domestic or foreign, or listed or based transfer agent. Further, the same
on the reproposed foreign listing unlisted, to file a Form 15 if its 300-holder threshold applies to U.S.
condition.115 Three commenters securities are held by less than 300 companies, and unlike the situation for
generally approved of the changes made holders of record.120 equity securities, no commenter has
to the originally proposed foreign listing addressed why it would be appropriate
condition.116 These changes included B. Debt Securities Provision
to treat U.S. and foreign registrants
shortening the proposed foreign listing As adopted, Rule 12h–6 will enable a differently with respect to the
requirement from two years to one year foreign private issuer to terminate its termination or suspension of reporting
and permitting an issuer to aggregate its Exchange Act reporting obligations obligations under section 15(d) as
trading on an exchange in one foreign regarding a class of debt securities as applied to debt securities.125
jurisdiction with that in a second long as the issuer has filed or furnished
foreign jurisdiction.117 These all reports required under Exchange Act C. Revised Counting Method
commenters agreed that the reproposed section 13(a) or section 15(d), including
We are adopting, as reproposed, Rule
foreign listing condition would increase at least one Exchange Act annual report,
12h–6’s revised counting method,
the flexibility of the new rule for foreign and has its class of debt securities held
private issuers while serving to protect which will enable an issuer of equity
of record by less than 300 holders either
investors. securities proceeding under the
on a worldwide basis or who are U.S.
New Rule 12h–6’s foreign listing alternative 300-holder provision, or a
residents.121 This provision reflects the
condition will apply to any issuer of debt securities issuer, to use a modified
minimum reporting requirement and
equity securities, whether that issuer is version of the ‘‘look through’’ counting
current 300 holder standard under
relying on the trading volume section 15(d) and Rule 12h–3. Moreover, method under Rule 12g3–2(a) when
benchmark or the alternative holder it is the same as the reproposed debt determining the number of its U.S.
provision, as reproposed. Some securities provision.122 resident security holders.126 Instead of
commenters requested that the Some commenters requested that we having to look through the accounts of
Commission not apply the foreign revise the 300-holder standard for brokers, banks and other nominees on a
listing condition to an issuer that has termination of a foreign private issuer’s worldwide basis to determine the
delisted in its primary trading market as Exchange Act reporting obligations number of its U.S. resident holders, as
a result of being acquired. According to under Exchange Act Section 15(d) is required under the current rules, a
these commenters, that issuer would not regarding a class of debt securities that foreign private issuer could limit its
be able to terminate its Exchange Act had been offered and sold pursuant to inquiry to brokers, banks and other
reporting obligations under the 300- an effective registration statement under nominees located in the United States,
holder provision because it could not the Securities Act.123 In the view of the issuer’s jurisdiction of
meet the foreign listing requirement.118 most of these commenters, an increase incorporation, legal organization or
The foreign listing condition is an to at least 1,000 holders would be establishment and, if different, the
important component of the new exit appropriate in light of the changes in jurisidiction of its primary trading
regime because it increases the the global securities markets since the market.127 This revised counting
likelihood that U.S. investors will have 300-holder standard was adopted by method is substantially similar to the
a set of material disclosure documents Congress in the 1960s.124 counting method that the Commission
about an issuer to which they may turn We are not revising the 300-holder adopted under the exemptive rules for
following that issuer’s exit from the standard as it applies to debt securities. cross-border rights offerings, exchange
Exchange Act reporting system. While we agree that there have been offers and business combinations,128 as
Therefore, we decline to create an substantial changes in the global capital well as under the definition of foreign
exception from this condition for any private issuer.129
markets, no commenter has presented
issuer at this time.119 We note that,
us with data or other information that Like the reproposed rule, the adopted
under most circumstances, a foreign
supports raising the threshold from that counting method provision requires an
private issuer that has been acquired
adopted by Congress. In addition, the issuer that aggregates the trading
may exit the Exchange Act reporting
problems associated with determining volume of its securities in two foreign
regime under the provisions of the
the ownership of equity securities do jurisdictions for the purpose of meeting
current exit rules that permit any issuer,
not appear to apply to debt securities, as Rule 12h–6’s foreign listing condition to
transactions in those jurisdictions comprising the
to which there is generally a single U.S.- look through nominee accounts in both
numerator only if it includes those off-exchange foreign jurisdictions, which comprise its
120 Exchange Act Rules 12g–4(a)(1)(i) and 12h–
transactions when calculating worldwide trading primary trading market, and in the
volume in the denominator. This denominator 3(b)(1)(i) (17 CFR 240.12g–4(a)(1)(i) and 240.12h–
would be the same as the denominator used for the 3(b)(1)(i)). United States as well as in its
trading volume benchmark. Thus, this denominator 121 New Exchange Act Rule 12h–6(c) (17 CFR jurisdiction of incorporation or
would consist of U.S. ADTV, which must include 240.12h–6(c)). organization, if different from the two
both on-exchange and off-exchange transactions, 122 As originally proposed and reproposed, the
jurisdictions that comprise its primary
and non-U.S. ADTV, which must include on- adopted exit rule for debt securities does not
exchange transactions, but could also include off- include a provision comparable to Rule 12h–3’s 500
exchange transactions. See Part II.A.1.a.ii of this 125 We note that foreign private issuers that avail
record holder provision because most foreign
release. private issuers that are debt securities registrants themselves of Rule 12h–6 will be able to terminate
115 See the letters from the ABA, BusinessEurope,
would likely exceed the $10 million asset threshold their reporting obligations under section 15(d)
Cravath, Davis Polk, Linklaters, and Skadden Arps. that accompanies the 500 record holder standard. while U.S. companies will only continue to be able
116 See the letters from the ABA, Linklaters, and No commenter has ever requested that we to suspend their reporting obligations pursuant to
Skadden Arps. incorporate the 500 record holder and $10 million Rule 12h–3 and section 15(d).
126 New Exchange Act Rule 12h–6(e) (17 CFR
117 See Part II.A.4 of the Reproposing Release. asset standard into Rule 12h–6’s debt securities
118 See the letters from BusinessEurope and Davis provision, either at the proposing or reproposing 240.12h–6(e)).
Polk. stage. 127 New Exchange Act Rule 12h–6(e)(1) (17 CFR
119 For this reason, we decline to adopt a general 123 See the letters from Cleary Gottlieb, EALIC, 240.12h–6(e)(1)).
exception from the foreign listing condition for Davis Polk, and the EU. 128 Securities Act Rules 800 et seq. (17 CFR
equity securities issuers proceeding under the 124 Davis Polk favored an increase to at least 230.800 et seq.).
alternative 300-holder provision. 3,000. 129 17 CFR 230.405 and 240.3b–4(c).
trading market.130 Also as reproposed, as we noted in the reproposing release, assumed pursuant to Rule 12g–3 or
the adopted counting method provision as part of its inquiry regarding whether 15d–5.142
permits an issuer to rely on the it meets any of the quantitative This successor issuer provision will
assistance of an independent benchmarks under Rule 12h–6, an enable a non-Exchange Act reporting
information services provider when issuer may refer to shareholder foreign private issuer that acquires a
calculating the number of its U.S. information obtained pursuant to those
reporting foreign private issuer in a
security holders.131 foreign statutory or code provisions to
We are also adopting a presumption, transaction exempt under the Securities
the extent that this shareholder
included in both the originally proposed information is reasonably reliable and Act, for example, under Rule 802 or
and reproposed counting method accurate and furthers the purpose of the section 3(a)(10), to qualify immediately
provisions, that we previously adopted inquiry. for termination of its Exchange Act
under the cross-border rules and reporting obligations under Rule 12h–6,
definition of foreign private issuer.132 D. Expanded Scope of Rule 12h–6 without having to file an Exchange Act
This presumption is that, if, after We are adopting, substantially as annual report, as long as the successor
reasonable inquiry, an issuer is unable reproposed, an expansion of the scope issuer meets the rule’s foreign listing,
without unreasonable effort to obtain of the originally proposed Rule 12h–6 in dormancy and quantitative benchmark
information about the amount of two respects. First, we are adopting a conditions, and the acquired company’s
securities held by nominees for the rule providing that an issuer that has reporting history fulfills Rule 12h–6’s
accounts of customers resident in the succeeded to the Exchange Act prior reporting condition. Since the
United States, it may assume that the reporting obligations of an acquired successor issuer will have assumed the
customers are the residents of the company may terminate those reporting acquired company’s Exchange Act
jurisdiction in which the nominee has obligations under Rule 12h–6 as long as reporting obligations, we believe it is
its principal place of business.133 it satisfies specified conditions. Second, appropriate that the issuer succeed to
The reproposed rule provided that an we are extending the application of Rule the acquired company’s reporting
issuer must count securities as owned 12h–6 to a foreign private issuer that history for the purpose of Rule 12h–6.
by U.S. holders when publicly filed previously filed a Form 15 and effected
reports of beneficial ownership or its termination of registration or The adopted successor issuer
information that is otherwise provided suspension of reporting under the provision is substantially similar to the
to it indicates that the securities are current exit rules before the effective reproposed provision, except that the
held by U.S. residents. One commenter date of Rule 12h–6, subject to adopted rule clarifies that, in order to
requested that we clarify that an issuer conditions. qualify for deregistration under the
is not required to take account of U.S. successor issuer provision, an issuer
1. Application of Rule 12h–6 to
ownership information provided to it if must meet all of the conditions
Successor Issuers
the issuer determines that it is pertaining to equity securities
unreliable.134 We have so clarified by As adopted, Exchange Act Rule 12h– registrants, including the dormancy
revising the above provision to state that 6(d) 137 provides that, following a condition. We have made this
an issuer must count securities as merger, consolidation, exchange of clarification in order to underscore our
owned by U.S. holders when publicly securities, acquisition of assets or position, stated at the reproposing stage,
filed reports of beneficial ownership or otherwise, a foreign private issuer that that if a previously non-Exchange Act
other reliable information that is has succeeded to the registration of a reporting foreign private issuer acquires
provided to it indicates that the class of securities under Exchange Act
an Exchange Act reporting company by
securities are held by U.S. residents.135 section 12(g) pursuant to Rule 12g–3,138
consummating an exchange offer,
Some foreign jurisdictions have laws or to the reporting obligations of another
merger or other business combination
that provide an established and issuer under Exchange Act section 15(d)
pursuant to Rule 15d–5,139 may file a registered under the Securities Act,
enforceable means for a public company
Form 15F to terminate those reporting most likely on a Form F–4 registration
to obtain information about its
obligations if, regarding a class of equity statement, the acquiror will have to
shareholders.136 Like the reproposed
rule, Rule 12h–6 does not provide that securities, the successor issuer meets fulfill Rule 12h–6’s prior reporting
a foreign private issuer may rely solely the conditions under Rule 12h–6(a), condition without reference to the
on specified foreign statutory or code which applies to equity securities acquired company’s reporting history.
provisions when calculating the number issuers.140 Regarding a class of debt Since the acquiror will have triggered its
of its U.S. resident equity or debt securities, the successor issuer must own section 15(d) reporting obligations
holders. We received only two meet the conditions under Rule 12h– upon the effectiveness of its Securities
comments in support of such a 6(c), including the reporting Act registration statement, it will have
provision at the proposing stage, and condition.141 New Rule 12h–6(d) then to meet Rule 12h–6’s full reporting
none at the reproposing stage. However, provides that, when determining condition like any other section 15(d)
whether it meets the prior reporting reporting company before it can
130 New Exchange Act Rule 12h–6(e)(1)(ii) (17 condition under either the equity or terminate its reporting obligations under
CFR 240.12h–6(e)(1)(ii)). debt securities provision of the final the new rule. In order to clarify that
131 New Exchange Act Rule 12h–6(e)(4) (17 CFR
rule, a successor issuer may take into such a Securities Act registrant may not
240.12h–6(e)(4)).
132 See Securities Act Rule 800(h)(4) (17 CFR
account the reporting history of the proceed under the successor issuer
230.800(h)(4)) and Instruction B to Exchange Act issuer whose reporting obligations it has provision and immediately terminate its
Rule 3b–4(c)(1) (17 CFR 240.3b–4(c)(1)). section 15(d) reporting obligations upon
133 New Exchange Act Rule 12h–6(e)(2) (17 CFR 137 17 CFR 240.12h–6(d). completion of the Form F–4 transaction,
240.12h–6(e)(2)). 138 17 CFR 240.12g–3.

134 See the letter from Cravath. 139 17 CFR 240.15d–5.
the adopted rule provides that an issuer
135 New Rule 12h–6(e)(3) (17 CFR 240.12h– 140 New Exchange Act Rule 12h–6(d)(1)(i) (17 must meet Rule 12h–6’s equity
6(e)(3)). CFR 240.12h–6(d)(1)(i)).
136 See, for example, section 212 of the United 141 New Exchange Act Rule 12h–6(d)(1)(ii) (17 142 New Exchange Act Rule 12h–6(d)(2) (17 CFR
Kingdom Companies Act. CFR 240.12h–6(d)(1)(ii)). 240.12h–6(d)(2)).
securities conditions, which includes This is consistent with the current securities registrant could not have
the dormancy condition.143 practice involving Form 15. relied on the trading volume condition,
Most of the parties that commented that registrant would have had once
on the reproposed successor issuer 2. Application of Rule 12h–6 to Prior
more to undertake the costly task of
provision supported it.144 However, one Form 15 Filers
counting its U.S. resident holders.
commenter sought clarification As adopted, Rule 12h–6(i) will extend We agree that, as suggested by some
regarding the intended role that the termination of Exchange Act reporting of those commenters, a more equitable
predecessor company would play in under the new exit rule to a foreign approach would be to place former
satisfying Rule 12h–6’s requirements.145 private issuer that, before the effective equity securities registrants in as good a
More particularly, this commenter was date of Rule 12h–6, already effected the position as current registrants by
concerned that Rule 12h–6 could be suspension or termination of its permitting them to meet the trading
construed to require an issuer to take Exchange Act reporting obligations after volume benchmark as an alternative to
into account the listing and trading filing a Form 15.148 A prior Form 15 the record holder standard.153 The
history of an acquired company. Such filer will have to meet the following adopted rule takes this approach.
an interpretation could preclude an conditions in order to obtain the
benefits of Rule 12h–6 with respect to E. Public Notice Requirement
acquiror from terminating its Exchange
Act reporting obligations immediately a class of equity securities: We are adopting, as reproposed, a
after succession if the acquired • the issuer must satisfy Rule 12h–6’s public notice requirement as a condition
company was unlisted or had an active foreign listing condition regarding the to termination of reporting under Rule
U.S. trading market. class of equity securities that was the 12h–6, except for prior Form 15
Therefore, we are clarifying that Rule subject of its Form 15; filers.154 Pursuant to this requirement,
12h–6(d) permits a successor issuer to • the issuer must satisfy either Rule an issuer of equity or debt securities,
consider an acquired company’s history 12h–6’s trading volume or alternative including a successor issuer, will have
only when determining whether the holder provision; and to publish, either before or on the date
successor meets Rule 12h–6’s prior • the issuer must file a Form 15F.149 that it files its Form 15F, a notice in the
reporting condition. Following an An equity securities issuer will not United States that discloses its intent to
acquisition, a successor issuer must look have to satisfy Rule 12h–6’s prior terminate its section 13(a) or 15(d)
only to its own foreign listing history, reporting or dormancy provisions since reporting obligations. The issuer must
and consider its own U.S. and it will already be a non-reporting entity. publish the notice, such as a press
A prior Form 15 filer will have to release, through a means reasonably
worldwide trading volume, when
meet the following conditions in order designed to provide broad
determining whether it satisfies Rule
to obtain the benefits of Rule 12h–6 dissemination of the information to the
12h–6’s foreign listing and trading
with respect to a class of debt securities: public in the United States. The issuer
volume conditions. • the issuer must meet Rule 12h–6’s
This commenter also sought also must submit a copy of the notice,
record holder provision for debt either under cover of a Form 6–K before
clarification regarding whether, as a
securities; and or at the time of filing of the Form 15F,
condition to deregistration under Rule • the issuer must file a Form 15F.150
12h–6, a successor issuer would have an As reproposed, the prior Form 15 filer or as an exhibit to the Form 15F. The
obligation under Exchange Act Rule provision was substantially similar to primary purpose of this notice provision
12g–3(g)146 to file an Exchange Act the adopted rule, except that we is to alert U.S. investors who have
annual report for the predecessor’s last proposed to establish, as a condition of purchased the issuer’s securities about
full fiscal year prior to succession. As eligibility, that an issuer not be required the issuer’s intended exit from the
with the filing of a Form 15 under the to register a class of securities under Exchange Act registration and reporting
current exit rules, under Rule 12h– section 12(g) or be required to file system.
6(g),147 the suspension of a foreign The notice requirement will not apply
reports under section 15(d).151 While
private issuer’s duty to file reports to a prior Form 15 filer that files a Form
the parties that commented on the
under section 13(a) or 15(d) occurs 15F to terminate its registration and
reproposed provision supported
immediately upon filing a Form 15F. reporting obligations under Rule 12h–
extending the benefits of Rule 12h–6 to
This suspension extends to an annual 6(i). Since a prior Form 15 filer will
a prior Form 15 filer, most also opposed
report that would be required under already have ceased its Exchange Act
requiring that filer to determine that it
Rule 12g–3(g). A successor issuer would reporting obligations, investors would
had not assumed or resumed Exchange
only have to file an annual report on gain little from the publishing of such
Act reporting obligations.152 Those
behalf of its predecessor under Rule a notice.
commenters noted that, since under the One commenter requested that we
12g–3(g) if, at the time of filing its Form reproposed rule, a former equity
15F, that annual report was past due. clarify that an issuer may satisfy this
148 New Exchange Act Rule 12h–6(i)(1) (17 CFR
notice provision by having the press
143 Because some commenters stated that the 240.12h–6(i)(1)). A former section 15(d) reporting release disseminated in the United
dormancy condition should not apply to a foreign company would benefit from proceeding under States by one of the international wire
private issuer that filed a Securities Act registration Rule 12h–6 by obtaining termination, rather than services, such as those operated by U.S.
statement solely to effect an acquisition or business mere suspension, of its reporting obligations with and international financial
combination (see, for example, the letter from respect to a class of equity or debt securities. As
Sullivan & Cromwell), we believe it is necessary to discussed below, a former section 12(g) company publications.155 We have so clarified by
state explicitly in Rule 12h–6 that the dormancy also would benefit from proceeding under Rule revising Form 15F to request that the
condition applies to a successor issuer. 12h–6 by being able to claim the Rule 12g3–2(b) issuer identify the means, such as
144 See, for example, the letters from Cleary exemption immediately upon the effectiveness of
its Rule 12h–6 termination.
publication in a particular newspaper or
Gottlieb and PricewaterhouseCoopers.
145 See the letter from Latham & Watkins. 149 Rule 12h–6(i)(2)(i) (17 CFR 240.12h–6(i)(2)(i)). transmission by a particular wire
146 17 CFR 240.12g–3(g). This provision requires 150 Rule 12h–6(i)(2)(ii) (17 CFR 240.12h–
a successor issuer to file an Exchange Act annual 6(i)(2)(ii)). 153 See, for example, the letters from EALIC and
report for the last full fiscal year of the predecessor 151 See Part II.D.2 of the Reproposing Release. Sullivan & Cromwell.
before the issuer’s succession if the predecessor has 152 See the letters from the ABA, BusinessEurope, 154 New Exchange Act Rule 12h–6(h) (17 CFR
not done so. Cleary Gottlieb, EALIC, the EU, the N.Y. State Bar, 240.12h–6(h)).
147 17 CFR 240.12h–6(g). and Sullivan & Cromwell. 155 See the letter from Skadden Arps.
service, used to disseminate the notice withdraw its Form 15F before the date holders of the class of subject securities
in the United States.156 of effectiveness if it has actual has risen above the statutory or
knowledge of information that causes it regulatory threshold.
F. Form 15F Given these advantages, we continue
reasonably to believe that, at the date of
Like our current exit rules, adopted filing the Form 15F: to believe that, following the adoption
Rule 12h–6 will require a foreign private • the average daily trading volume of of Rule 12h–6, few, if any, foreign
issuer to file electronically on EDGAR a its subject class of securities in the private issuers will elect to proceed
form certifying that it meets the United States exceeded 5 percent of the under the provisions of Rule 12g–4 or
requirements for ceasing its Exchange average daily trading volume of that Rule 12h–3 that allow a foreign private
Act reporting obligations.157 By signing class of securities on a worldwide basis issuer to terminate its registration of a
and filing new Form 15F,158 a foreign for the same recent 12-month period class of securities under section 12(g) or
private issuer will be certifying that: that the issuer used for purposes of Rule suspend the duty to file reports under
• it meets all of the conditions for 12h–6(a)(4)(i); section 15(d) if the class of securities is
termination of Exchange Act reporting • its subject class of securities was held by less than 300 U.S. residents or
specified in Rule 12h–6; and held of record by 300 or more United by 500 U.S. residents and the issuer has
• there are no classes of securities States residents or 300 or more persons had total assets not exceeding $10
other than those that are the subject of worldwide, if proceeding under Rule million on the last day of each of its
the Form 15F regarding which the issuer 12h–6(a)(4)(ii) or Rule 12h–6(c); or most recent three fiscal years.163
has Exchange Act reporting • it otherwise did not qualify for Accordingly, we are adopting the
obligations.159 termination of its Exchange Act amendments to eliminate these
Unlike current Form 15, new Form reporting obligations under Rule 12h– provisions in Rules 12g–4 and 12h–3, as
15F will require a foreign private issuer 6.161 reproposed.
to provide disclosure regarding several This undertaking is substantially the
same as that required under the H. Amendment Regarding the Rule
items in order to provide investors with 12g3–2(b) Exemption
information regarding an issuer’s reproposed rule and form, except that,
decision to terminate its Exchange Act in the first prong of the reproposed We are adopting, substantially as
reporting obligations. The information rule’s undertaking, we referred to reproposed, an amendment to Exchange
will also assist Commission staff in trading volume ‘‘during a recent 12- Act Rule 12g3–2 164 that will apply the
assessing the use of Rule 12h–6. The month period.’’ At the request of a exemption under Exchange Act Rule
Form 15F filing requirement and the commenter,162 we have clarified that the 12g3–2(b) immediately to an issuer of
specified items of information are undertaking applies to an issuer relying equity securities upon the effectiveness
substantially the same as those under on the trading volume provision only of its termination of reporting under
when it learns that its trading volume Rule 12h–6.165 As a condition to the
reproposed Rule 12h–6, except that we
exceeded the 5 percent threshold for the immediate application of the Rule 12g3–
have modified some items to conform to
same recent 12-month period that the 2(b) exemption upon its termination of
the changes we have made to the
issuer used for purposes of Rule 12h–6’s reporting under Rule 12h–6, an issuer
reproposed rule.
trading volume provision. must publish subsequently in English
As with Form 15, and as originally
material home country documents
proposed and reproposed, filing of new G. Amended Rules 12g–4 and 12h–3 required under Rule 12g3–2(b)(1)(iii) on
Form 15F will immediately suspend an
Although similar to the current 300 its Web site or through an electronic
issuer’s Exchange Act reporting
record holder standard, Rule 12h–6’s information delivery system generally
obligations regarding the subject class of
alternative record holder condition for available to the public in its primary
securities and commence a 90-day
equity securities and its debt securities trading market.166
waiting period. If, at the end of this 90- The purpose of this condition is to
provision will offer advantages
day period, the Commission has not provide U.S. investors with access to
compared to the current exit rules. As
objected to the filing, the suspension material information about an issuer of
adopted, Rule 12h–6’s revised counting
will automatically become a termination equity securities following its
method will limit the jurisdictions in
of registration and reporting. If the termination of reporting pursuant to
which a foreign private issuer must
Commission denies the Form 15F or the Rule 12h–6.167 In addition, an issuer
search for records of its U.S. resident
issuer withdraws it, within 60 days of
holders. Moreover, Rule 12h–6 will
the date of the denial or withdrawal, the 163 See Exchange Act Rules 12g–4(a)(2) and 12h–
enable a foreign private issuer to
issuer will be required to file or submit 3(b)(2) (17 CFR 240.12g–4(a)(2) and 12h–3(b)(2)).
terminate, rather than merely suspend,
all reports that would have been 164 New Exchange Act Rule 12g3–2(e)(1) (17 CFR
its section 15(d) reporting obligations 240.12g3–2(e)(1)).
required had it not filed the Form
regarding a class of equity or debt 165 Currently, foreign private issuers that
15F.160
securities. In addition, under Rule 12h– registered a class of securities under section 12
After filing Form 15F, an issuer will 6, a foreign private issuer will be able must wait at least 18 months following their
have no continuing obligation to make to claim the benefits of the Rule 12g3– termination of reporting before they would be
inquiries or perform other work 2(b) exemption immediately upon the
eligible to apply for the Rule 12g3–2(b) exemption.
concerning the information contained in In addition, foreign private issuers with an active
effectiveness of its termination of or suspended reporting obligation under section
the Form 15F, including its assessment reporting regarding a class of equity 15(d) have thus far not been eligible to claim the
of trading volume or ownership of its securities under section 12(g) or 15(d). Rule 12g3–2(b) exemption. See Rule 12g3–2(d)(1)
securities. However, Form 15F will In each instance, once its termination of
(17 CFR 240.12g3–2(d)(1)), which currently excepts
require an issuer to undertake to from the 18 month requirement only issuers that
reporting becomes effective under Rule have filed Securities Act registration statements
12h–6, an issuer will no longer have to using the Multijurisdictional Disclosure Act (MJDS)
156 See Item 7.B of Form 15F. forms.

157 New Exchange Act Rule 12h–6(a). concern itself with whether the number 166 New Exchange Act Rule 12g3–2(e)(2) (17 CFR
158 17 CFR 249.324. of its U.S. resident or worldwide 240.12g3 –2(e)(2)).
159 Form 15F General Instruction B. 167 Any post-termination trading of a foreign
160 New Exchange Act Rule 12h–6(g) (17 CFR 161 Form 15F Item 11. private issuer’s securities in the United States
240.12h–6(g)). 162 See the letter from Cleary Gottlieb. Continued
will be able to maintain a sponsored • a prior Form 15 filer immediately its termination of reporting under Rule
ADR facility with respect to its upon its termination of reporting 12h–6.
securities.168 This condition also will regarding a class of equity securities The reproposed version of Rule 12g3–
facilitate resales of that issuer’s pursuant to Rule 12h–6(i).172 2(e)(4) provided that a debt securities
securities to qualified institutional Currently Rule 12g3–2(d)(2) precludes issuer could apply for the Rule 12g3–
buyers under Rule 144A.169 Moreover, extending the Rule 12g3–2(b) exemption 2(b) exemption at any time following
having a foreign private issuer’s key to a foreign private issuer, other than a the effectiveness of its termination of
home country documents posted in Canadian issuer using the MJDS forms, reporting regarding the class of debt
English on its web site will assist U.S. that has issued securities in a merger or securities. One commenter pointed out
investors who are interested in trading other similar transaction to acquire a that this version, if adopted, would
the issuer’s securities in its primary company that has registered a class of jeopardize the legality of a sponsored
securities market.170 securities under section 12 or has a ADR facility maintained by a registered
The adopted extension of Rule 12g3– reporting obligation under section debt securities issuer regarding a class
2(b) will apply both to a class of equity 15(d).173 As amended, and as of equity securities.175 A foreign private
securities formerly registered under reproposed, Rule 12g3–2(d)(2) will issuer that has registered only debt
section 12(g) and one that formerly gave effectively extend the Rule 12g3–2(b) securities under the Securities Act may
rise to section 15(d) reporting exemption to a successor issuer that has establish an ADR facility for its equity
obligations, as reproposed. The Rule terminated its Exchange Act reporting securities by filing and having become
12g3–2(b) exemption received under obligations under Rule 12h–6(d). Since effective a Form F–6 registration
new Rule 12g3–2(e) will remain in effect we are permitting a successor issuer to statement because it is an Exchange Act
for as long as the foreign private issuer rely on its predecessor’s reporting reporting company.176 Such an issuer
satisfies the rule’s electronic publication history for the purpose of Rule 12h–6, would lose the legal basis for its ADR
conditions or until the issuer registers a we believe the issuer should also benefit facility if, before it could apply for the
new class of securities under section 12 from claiming the Rule 12g3–2(b) Rule 12g3–2(b) exemption, it had to
or incurs section 15(d) reporting exemption immediately upon the wait until after the completion of the 90-
obligations by filing a new Securities effectiveness of its Form 15F. day waiting period, when the
Act registration statement, which has Also as reproposed, we are extending termination of its Exchange Act
the Rule 12g3–2(b) amendment reporting obligations under Rule 12h–6
become effective.171
immediately upon the termination of would become effective.
1. Extension of the Rule 12g3–2(b) reporting pursuant to Rule 12h–6(i) to a As we have previously stated, we
Exemption Under Rule 12g3–2(e) foreign private issuer that, before the value the formation of ADR facilities,
effective date of Rule 12h–6, terminated
As adopted, because Rule 12g3–2(e) because they are beneficial to U.S.
its registration or suspended its
applies to any issuer that has terminated investors, and we encourage foreign
reporting obligations regarding a class of
its reporting under Rule 12h–6, the rule issuers to continue to maintain their
equity securities after filing a Form 15.
amendment will effectively extend the ADR facilities after terminating their
This is consistent with our expansion of
Rule 12g3–2(b) exemption to: Exchange Act reporting obligations.
the scope of Rule 12h–6 to encompass
• a foreign private issuer immediately prior Form 15 filers. Without this
Therefore, we are clarifying that, under
upon its termination of reporting adopted Rule 12g3–2(e)(4), while a debt
change, a prior Form 15 filer would find
regarding a class of equity securities securities issuer may establish the Rule
itself subject to the 18 month waiting
pursuant to Rule 12h–6(a); 12g3–2(b) exemption only upon the
period that currently exists under Rule
• a successor issuer immediately 12g3–2(d), although the issuer qualified
effectiveness of its termination of
upon its termination of reporting for termination of reporting under Rule reporting regarding its class of debt
regarding a class of equity securities 12h–6(i). securities under Rule 12h–6, it may
pursuant to Rule 12h–6(d); and We further are permitting a foreign apply for the Rule 12g3–2(b) exemption
private issuer that filed a Form 15F after it has filed its Form 15F and
would have to occur through over-the-counter solely to terminate its reporting commenced the 90–day waiting
markets such as that maintained by the Pink Sheets, obligations regarding a class of debt period.177 The issuer must include in
LLC since, as of April, 1998, the NASD and the that application the date that it filed its
Commission have required a foreign private issuer securities to establish the Rule 12g3–
to register a class of securities under Exchange Act 2(b) exemption for a class of equity Form 15F as well as the address of its
section 12 before its securities could be traded securities upon the effectiveness of its Internet Web site or that of the
through the electronic over-the-counter bulletin termination of reporting regarding the electronic information delivery system
board administered by Nasdaq. See, for example, on which it will publish the material
NASD Notice to Members (January 1998). class of debt securities.174 Since we are
168 In order to establish an ADR facility, an issuer abolishing the 18 month ‘‘waiting home country information required
must register the ADRs on Form F–6 (17 CFR period’’ for equity securities issuers that under Rule 12g3–2(b).
239.36) under the Securities Act. The eligibility have terminated their Exchange Act
criteria for the use of Form F–6 include the
2. Electronic Publishing of Home
requirement that the issuer have a reporting
reporting obligations pursuant to Rule Country Documents
obligation under Exchange Act section 13(a) or have 12h–6, it would serve no useful purpose
established the exemption under Rule 12g3–2(b). to impose this waiting period on a debt Currently foreign companies claim the
See General Instruction I.A.3 of Form F–6. securities issuer that determines that it Rule 12g3–2(b) exemption by submitting
169 See Securities Act Rule 144A(d)(4) (17 CFR
will need the Rule 12g3–2(b) exemption to the Commission on an ongoing basis
230.144A(d)(4)).
for a class of equity securities following the material required by the rule. This
170 Brokers currently are exempt from complying
material may only be submitted in paper
with certain information obligations under
172 Most parties that commented on reproposed
Exchange Act Rule 15c2–11 (17 CFR 240.15c2–11)
when a foreign company has established and Rule 12g3–2(e) favored the extension of the Rule 175 Seethe letter from MTR Corporation.
maintains the Rule 12g3–2(b) exemption. See 12g3–2(b) exemption to the above categories of 176 SeeGeneral Instruction I.A.3 of Form F–6.
Release No. 34–41110 (February 25,1999), 64 FR issuers. See, for example, the letter from the ABA. 177 Commission staff will work with issuers to
11124 (March 8, 1999). 173 17 CFR 240.12g3–2(d)(2).
coordinate the establishment of the Rule 12g3–2(b)
171 See New Exchange Act Rule 12g3–2(e)(3) (17 174 New Exchange Act Rule 12g3–2(e)(4) (17 CFR exemption on the same day as their termination of
CFR 240.12g3–2(e)(3)). 240.12g3–2(e)(4)). Exchange Act reporting.
format.178 Because paper submissions an issuer to publish its home country to adopt a specific time limit primarily
are more difficult to access, we are documents electronically after it because different types of home country
adopting Rule 12g3–2(e), which relies terminates its reporting obligations documents may require different
on electronic access to a foreign under Rule 12h–6 applies equally to periods of electronic posting. While an
company’s home country securities current Rule 12g3–2(b) exempt issuer will be required to post
documents, although not through the companies and the non-reporting electronically a home country document
Commission’s electronic database. companies that eventually will apply for for a reasonable period of time, what
As part of the condition requiring an the exemption. In each case, the constitutes a reasonable period will
issuer to publish its home country electronic posting of an issuer’s home depend on the nature and purpose of
documents required under Rule 12g3– country documents will increase an the home country document. At a
2(b)(1)(iii) on its Internet Web site or investor’s ability to access those minimum, we suggest companies
through an electronic information documents. provide Web site access to their home
delivery system generally available to Therefore, we are adopting, as country reports for at least a 12 month
the public in its primary trading market, proposed, an amendment to Rule 12g3– period.
Rule 12g3–2(e) will require an issuer to 2 to permit a foreign private issuer that, We also suggest that, if an issuer
publish English translations of the upon application to the Commission publishes its home country documents
following documents: and not after filing Form 15F, has required under Rule 12g3–2(b) on an
• its annual report, including or obtained or will obtain the Rule 12g3– electronic information delivery system
accompanied by annual financial 2(b) exemption to publish its home or an Internet Web site that is not in
statements; country documents that it is required to English, the issuer provide a prominent
• interim reports that include furnish on a continuous basis under link on its Internet Web site directing
financial statements; Rule 12g3–2(b)(1)(iii) on its Internet investors to those home country
• press releases; and Web site or through an electronic documents in English.
• all other communications and information delivery system generally
documents distributed directly to I. Concerns Regarding Securities Act
available to the public in its primary
security holders of each class of Rule 701
trading market.181 As a condition to this
securities to which the exemption electronic posting, an issuer that wishes Some commenters asked that we
relates.179 to use this procedure will have to clarify the availability of Securities Act
Rule 12g3–2(e) will further require a comply with the English translation Rule 701 185 for a foreign private issuer
foreign private issuer of equity requirements of reproposed Rule 12g3– that terminates its registration and
securities to disclose in the Form 15F 2(e). It also will have to provide the reporting obligations under Rule 12h–6.
the address of its Internet Web site or Commission with the address of its By its terms, Rule 701 is available to any
that of the electronic information Internet Web site or that of the issuer that is not subject to the reporting
delivery system in its primary trading electronic information delivery system requirements of Exchange Act section
market on which it will publish the in its primary trading market in its 13 or 15(d). Therefore, upon the
information required under Rule 12g3– application for the Rule 12g3–2(b) effectiveness of termination of
2(b)(1)(iii).180 The purpose of this exemption or in an amendment to that registration and reporting requirements
requirement is to alert investors and the application. under Rule 12h–6, a foreign private
Commission regarding where investors Currently the Commission does not issuer would appear to satisfy this
and others may find the company’s have an established means for a non- condition of Rule 701.
home country documents should a reporting company to submit As we noted when originally
problem arise concerning the Internet electronically to the Commission its proposing Rule 12h–6, before the filing
location of those documents. initial documents under Rule 12g3– of a Form 15F, a foreign private issuer
Currently non-reporting issuers that 2(b)(1)(i) and (ii).182 Therefore, an would have to file a post-effective
seek the Rule 12g3–2(b) exemption must applicant will have to continue to amendment to terminate the registration
submit their letter application for the submit its letter application and the of its remaining unsold securities under
exemption and their home country home country documents submitted in any of its Securities Act registration
documents to the Commission in paper. support of its initial application to the statements.186 This would include a
The same primary reason for requiring Commission in paper.183 Form S–8 registration statement relating
At both the proposing and to securities issuable under certain
178 A foreign private issuer that has successfully
reproposing stages, some commenters compensatory benefit plans. After the
filed an application for the Rule 12g3–2(b) effectiveness of the Form 15F, a foreign
exemption must currently furnish its home country
suggested that the Commission impose
documents in paper because the application is a specific time limit, for example three private issuer would be able to rely on
analogous to one submitted for an exemption under years, governing how long an issuer Rule 701 with respect to unsold
Exchange Act section 12(h). See Regulation S–T must keep its home country documents securities that had previously been
Rule 101(c)(16)(17 CFR 232.101(c)(16)). Although covered by the Form S–8 registration
the Commission’s EDGAR database contains an
on its Internet Web site.184 We decline
entry signifying the receipt of paper documents,
statement.
181 New Exchange Act Rule 12g3–2(f) (17 CFR
materials received in paper are not accessible III. Paperwork Reduction Act Analysis
through the EDGAR system. 240.12g3–2(f)). Parties that commented on the
179 Note 1 to Rule 12g3–2(e). Rule 12g3–2(b) reproposed extension of Rule 12g3–2(b) supported The final rule amendments contain
requires an exempt issuer to submit substantially this electronic publishing provision for issuers ‘‘collection of information’’
the same categories of home country documents as claiming the Rule 12g3–2(b) other than through
Rule 12h–6. See, for example, the letters from the requirements within the meaning of the
a reporting issuer must furnish to the Commission
under cover of Form 6–K. Moreover, both Rule ABA and Skadden Arps. Paperwork Reduction Act of 1995
182 17 CFR 240.12g3–2(b)(1)(i) and (ii).
12g3–2(b) and Form 6–K state that only material
information need be furnished under the rule and 183 As under current practice, the applicant 185 17 CFR 230.701. Rule 701 provides a
form. See Rule 12g3–2(b)(3) (17 CFR 240.12g3– should send these initial materials to the Securities Act exemption for the offer and sale of
2(b)(3)) and General Instruction B to Form 6–K. Commission’s Office of International Corporate securities to employees and others pursuant to
180 Note 3 to Rule 12g3–2(e). An issuer will not Finance in the Division of Corporation Finance. certain compensatory benefit plans and contracts
have to update the Form 15F to reflect a change in 184 See Part II.H.2 of the Reproposing Release and, relating to compensation.
that address. more recently, the letter from Sullivan & Cromwell. 186 See the Original Proposing Release at n. 45.
(‘‘PRA’’).187 The titles of the affected A foreign private issuer may attach and to publish copies of its home
collection of informations are Form 20– annual reports to security holders, country documents required by Rule
F (OMB Control No. 3235–0288), Form statutory reports, press releases and 12g3–2(b) on its Internet Web site
40–F (OMB Control No. 3235–0381), other documents as exhibits or instead of submitting them in paper to
Form 6–K (OMB Control No. 3235– attachments to the Form 6–K. We the Commission. We have based the
0116), new Form 15F, and submissions adopted Form 6–K under the Exchange annual burden and cost estimates of the
under Exchange Act Rule 12g3–2 (OMB Act in order to keep investors informed adopted rule amendments on Forms 20–
Control No. 3235–0119).188 An agency on an ongoing basis about foreign F, 40–F, 6–K and 15F, and on the home
may not conduct or sponsor, and a private issuers that have registered country submissions required under
person is not required to respond to, a securities with the Commission. Rule 12g3–2(b), on the following
collection of information such as Form New Form 15F is the form that a estimates and assumptions:
20–F or new Form 15F unless it foreign private issuer must file when • a foreign private issuer incurs or
displays a currently valid OMB control terminating its Exchange Act reporting will incur 25% of the annual burden
number. Compliance with the obligations under new Exchange Act required to produce each Form 20–F or
disclosure requirements of new Form Rule 12h–6. Form 15F requires a filer to 40–F report or Form 15F;
15F and new Rule 12h–6, which will disclose information that will help • outside firms, including legal
affect the above collections of investors understand the foreign private counsel, accountants and other advisors,
information, is mandatory. issuer’s decision to terminate its incur or will incur 75% of the burden
Form 20–F sets forth the disclosure Exchange Act reporting obligations and required to produce each Form 20–F or
requirements for a foreign private assist Commission staff in assessing 40–F report or Form 15F at an average
issuer’s annual report and registration whether the Form 15F filer is eligible to cost of $400 per hour;
statement under the Exchange Act as terminate its Exchange Act reporting • a foreign private issuer incurs or
well as many of the disclosure obligations pursuant to Rule 12h–6. will incur 75% of the annual burden
requirements for a foreign private Exchange Act Rule 12g3–2 is an required to produce each Form 6–K
issuer’s registration statements under exemptive rule that, under paragraph (b) report and Rule 12g3–2(b) submission,
the Securities Act. We adopted Form of that rule, provides an exemption from not including English translation work,
20–F pursuant to the Exchange Act and Exchange Act section 12(g) registration and 25% of the annual burden required
the Securities Act in order to provide for a foreign private issuer that, in to perform the English translation work
investors with information about foreign addition to satisfying other for Form 6–K reports and Rule 12g3–
requirements, submits copies of its 2(b) submissions; and
private issuers that have registered
material home country documents to the • outside firms, including legal
securities with the Commission.
Commission on an ongoing basis. We counsel, accountants and other advisors,
Form 40–F sets forth the disclosure
adopted paragraph (b) of Rule 12g3–2 in incur or will incur 25% of the burden
requirements regarding the annual
order to provide information for U.S. required to produce each Form 6–K
report and registration statement under
investors concerning foreign private report and Rule 12g3–2(b) submission,
the Exchange Act for a Canadian issuer
issuers with limited securities trading in not including English translation work,
that is qualified to use the at an average cost of $400 per hour, and
Multijurisdictional Disclosure System U.S. capital markets.
The hours and costs associated with 75% of the annual burden resulting
(‘‘MJDS’’). We adopted Form 40–F from the English translation work for
preparing, filing and sending Forms 20–
pursuant to the Exchange Act in order Form 6–K reports and Rule 12g3–2(b)
F, 40–F, 6–K and 15F, and making
to permit qualified Canadian issuers to submissions, at an average cost of $125
submissions under Exchange Act Rule
prepare their Exchange Act annual per hour.
12g3–2(b) constitute reporting and cost
reports and registration statements As was the case with the originally
burdens imposed by those collections of
based primarily in accordance with proposed and reproposed rule
information. We based our estimates of
Canadian requirements. the effects that the final rule amendments, the estimated effects of
Form 6–K is used by a foreign private the adopted rule amendments reflect the
amendments will have on those
issuer to report material information initial phase-in period of the Exchange
collections of information primarily on
that it: Act termination process under new Rule
our review of the most recently
• makes or is required to make 12h–6 and Form 15F during the first
completed PRA submissions for Forms
public under the laws of the jurisdiction year of availability. We expect that most
20–F, 40–F, and 6–K, and for
of its incorporation, domicile or of these estimated effects will occur on
submissions under Rule 12g3–2(b), on
organization (its ‘‘home country’’); a one-time, rather than a recurring,
the particular requirements for those
• files or is required to file with its basis. While we expect that some issuers
forms and submissions, and on relevant
home country stock exchange that is will terminate their Exchange Act
information, for example, concerning
made public by that exchange; or reporting under Rule 12h–6 and file
comparative trading volume for
• distributes or is required to Form 15F in subsequent years, we do
numerous filers of those forms.
distribute to its security holders. Final Rule 12h–6 will permit a foreign not expect the resulting burdens and
187 44
private issuer to terminate permanently costs to be of the same magnitude as the
U.S.C. 3501 et seq.
188 A limited number of foreign private issuers
its Exchange Act reporting obligations, burdens and costs currently expected
file annual reports on Form 10–K. In voluntarily including the obligation to file an during the first year. Moreover, we
electing to file periodic reports using domestic annual report on Form 20–F or 40–F expect that over time, the number of
issuer forms, these issuers seem to have closely and the obligation to submit Form 6–K foreign private issuers that are
aligned themselves with the U.S. market.
Accordingly, for the purpose of the Paperwork
reports, after filing a Form 15F. Final encouraged to enter the Exchange Act
Reduction Act Analysis, these issuers do not appear Rule 12h–6 and the accompanying rule reporting system as a result of the rule
likely to terminate their Exchange Act registration amendments will also enable a foreign amendments will increase so that, on an
under new Rule 12h–6, and we have assumed that private issuer to claim the Rule 12g3– annual basis, the number of foreign
none of these companies will seek to use Rule 12h–
6. Foreign private issuers that file periodic reports
2(b) exemption immediately upon the companies entering the Exchange Act
using domestic issuer forms will be eligible, effectiveness of its termination of reporting regime will exceed the
nonetheless, to use Rule 12h–6. reporting pursuant to the new exit rule, number exiting that regime.
We published a notice requesting • the total number of burden hours • the number of Form 40–Fs filed to
comment on the collection of required to produce Form 20–F 193 to total 125; 200
information requirements in the decrease to 2,314,400 total hours; 194 • the number of burden hours
Original Proposing Release and • the total number of burden hours required to produce Form 40–F 201 to
submitted these requirements to the required by foreign private issuers to total 53,375 total hours; 202
Office of Management and Budget produce Form 20–F to decrease to
578,600 total hours; 195 and • the number of burden hours
(‘‘OMB’’) for review in accordance with
required by foreign private issuers to
the PRA.189 OMB subsequently • the cost incurred by outside
firms 196 to produce Form 20–F to total produce Form 40–F to total 13,344
approved the proposed requirements
$694,320,000.197 hours; 203 and
without change. We received several
comment letters regarding the proposed • the cost incurred by outside firms to
B. Form 40–F
rule amendments, although none produce Form 40–F to total
addressed their estimated effects on the During the first year of effectiveness $16,012,500.204
collection of information requirements. of Rule 12h–6, we estimate that as many
as 10% of Form 40–F filers could C. Form 6–K
We revised and reproposed Rule 12h–6
and the accompanying rule amendments terminate their Exchange Act reporting During the first year of effectiveness
in response to these comments. We also obligations under the new rule.198 of Rule 12h–6, we estimate that as many
revised the estimated reporting and cost However, the reproposed rule could as 23% of foreign private issuers that
burdens for the reproposed rules.190 encourage some foreign companies to furnish Form 6–K reports could
enter the Exchange Act registration and terminate their Exchange Act reporting
Because we are adopting Rule 12h–6
reporting regime for the first time,
and the accompanying rule amendments obligations under the new rule.205
including some that would be eligible to
substantially as reproposed, the However, the adopted rule could
use the MJDS forms, including the Form
estimated reporting and cost burdens for 40–F annual report. Consequently, over encourage some foreign companies to
the adopted rules remain the same as this same period, the number of Form enter the Exchange Act registration and
the estimated reporting and cost 40–F annual reports filed could increase reporting regime for the first time,
burdens for the reproposed rules, as by approximately 3%, resulting in a net including those that will furnish Form
discussed below. decrease of 7% for Form 40–Fs filed 6–K reports. Consequently, over this
over this same period.199 This net same period, the number of Form 6–K
A. Form 20–F
decrease would cause: reports furnished could increase by as
During the first year of effectiveness much as 5%,206 resulting in a net
of reproposed Rule 12h–6, we estimate 193 As in the Reproposing Release, we estimate decrease of 18% for Form 6–Ks
that as many as 25% of Form 20–F filers that a foreign private issuer requires on average furnished over this same period. This
2,630 hours to produce each Form 20–F. net decrease would cause:
could terminate their Exchange Act 194 880 Form 20–Fs filed annually × 2,630 hours
reporting obligations under the new per Form 20–F = 2,314,400 hours.
200 134 Form 40–Fs filed annually (prior to this
rule.191 However, we continue to 195 880 Form 20–Fs × 2,630 hours per Form 20–
F × .25 = 578,600 hours. Thus, we estimate that, rulemaking) × .07 = 9; 134¥9 = 125 Form 40–Fs
believe that Rule 12h–6 will encourage filed annually.
during the first year of effectiveness of Rule 12h–
some foreign companies to enter the 6, foreign private issuers could incur a reduction of 201 As in the Reproposing Release, we estimate
Exchange Act registration and reporting 144,650 hours in the number of burden hours that it takes 427 hours on average to produce a
regime for the first time. Consequently, required to produce Form 20–F. 220 Form 20–Fs × Form 40–F report.
during the first effective year of Rule 2,630 hrs. × .25 = 144,650 hours. Using an estimated 202 125 Form 40–Fs filed annually × 427 hours per
hourly rate of $175 for in-house work, foreign Form 40–F = 53,375 hours.
12h–6, the number of Form 20–F annual private issuers could incur Form 20–F cost savings 203 125 Form 40–Fs filed annually × 427 hours per
reports filed could increase by 5%, of $25,313,750 during Rule 12h–6’s first year of Form 40–F × .25 = 13,344 hours. Thus, we estimate
leading to a net decrease of 20% for effectiveness. 144,650 hrs. × $175/hr. = that, during the first year of effectiveness of Rule
$25,313,750. 12h–6, foreign private issuers could incur a
Form 20–Fs filed over this same period. 196 We estimate cost savings of $173,580,000 reduction of 961 hours in the number of burden
This net decrease would cause: regarding outside firms’ production of Form 20–Fs hours required to produce Form 40–F. 9 Form 40–
during Rule 12h–6’s first year of effectiveness. 220 Fs × 427 hrs. × .25 = 961 hrs. This could result in
• the number of Form 20–Fs filed to Form 20–Fs × 2,630 hrs. × .75 × $400/hr. = estimated Form 40–F cost savings for foreign
decrease to 880; 192 $173,580,000. Thus, during the first year of its private issuers of $168,175. 961 hrs. × $175/hr. =
effectiveness, Rule 12h–6 could result in total $168,175.
189 44 estimated Form 20–F cost savings of $198,893,750. 204 125 Form 40–Fs filed annually × 427 hours per
U.S.C. 3507(d) and 5 CFR 1320.11.
190 See
$25,313,750 + $173,580,000 = $198,893,750. Form 40–F × .75 × $400/hour = $16,012,500. This
Part III of the Reproposing Release. 197 880 Form 20–Fs × 2,630 hours × .75 × $400/ estimate corresponds to estimated cost savings of
191 191 As noted at the reproposing stage, a
hour = $694,320,000. The $108,487,500 increase $1,152,900 in connection with outside firms’
review by the Commission’s Office of Economic reflects the increase in the estimated outside firm production of Form 40–F during reproposed Rule
Analysis of trading volume data on a sample of hourly rate from $300 to $400. 12h–6’s first year of effectiveness. 9 × 427 hrs. × .75
foreign Exchange Act reporting companies that filed 198 We do not expect the expanded scope of × $400/hr. = $1,152,900. Thus, during the first year
Form 20–F during 2004 suggested that reproposed Rule 12h–6 to have as great an effect on of its effectiveness, Rule 12h–6 could result in
approximately 30% of filers would meet the U.S. MJDS filers as other foreign reporting companies estimated total Form 40–F cost savings of $168,175
trading volume threshold of the reproposed rule. since, typically, the U.S. trading volume relating to + $1,152,900 = $1,321,075.
See Part III, n. 137 of the Reproposing Release. A those shares is significant. Moreover, because of 205 This estimate is based on the estimated
more recent review of the Office of Economic their close proximity to U.S. capital markets, we number of Form 20–F and Form 40–F filers that are
Analysis of trading volume data on foreign believe MJDS filers are less likely to seek to expected to terminate their Exchange Act reporting
Exchange Act reporting companies with common terminate their Exchange Act reporting obligations obligations under 2h–6. 1,100 Form 20–Fs × .25 =
than other foreign private issuers. Accordingly, 275; 134 Form 40–Fs × .10 = 13; 288 = .23 × 1,234.
equity trading during 2005 indicates that an
based on current experience, we expect no more 206 This estimate is based on the estimated
estimated 29% of filers would meet the U.S. trading than 10% of Form 40–F filers will terminate their number of foreign private issuers that are expected
volume threshold of the adopted rule. That Exchange Act reporting obligations under Rule to enter the Exchange Act reporting regime and file
percentage may vary by region. 12h–6. Form 20–Fs or Form 40–Fs as a result of this
192 1,100 Form 20–Fs filed annually (prior to this 199 This is the same percentage previously rulemaking during the first year of effectiveness.
rulemaking) × .20 = 220; 1,100—220 = 880 Form estimated under the originally proposed rule 1,100 Form 20–Fs × .05 = 55; 134 Form 40–Fs × .03
20–Fs filed annually. amendments. = 4; 59 = .05 × 1,234.
• the number of Form 6–K reports file a Form 15F to terminate their During the first year of effectiveness
furnished to decrease to 12,022; 207 Exchange Act reporting obligations, of reproposed Rule 12h–6, we estimate
• the total number of burden hours which would cause: that as many as 351 foreign private
required to produce the Form 6–Ks 208 • the number of burden hours issuers could claim the Rule 12g3–2(b)
to decrease to 104,591 total hours; 209 required to produce Form 15F 215 to exemption immediately upon the
• the total number of burden hours total 10,530 hours; 216 effectiveness of their termination of
required by foreign private issuers 210 to • foreign private issuers to incur a reporting under new Rule 12h–6.222
produce Form 6–K to decrease to 65,369 total of 2,633 hours to produce Form This increase in the number of Rule
hours; 211 and 15F; 217 and 12g3–2(b) exempt issuers would cause:
• the cost incurred by outside • outside firms to incur a total cost of • the number of issuers claiming the
firms 212 to produce Form 6–K to total $3,159,200 218 to produce Form 15F.219 Rule 12g3–2(b) exemption to total 1,036;
$10,295,775.213 E. Rule 12g3–2(b) Submissions • the number of Rule 12g3–2(b)
submissions made annually to total
D. Form 15F We estimate that 685 foreign private 12,432;
During the first year of effectiveness issuers currently have obtained the Rule • the number of annual burden hours
of Rule 12h–6, we estimate that as many 12g3–2(b) exemption.220 In addition, we required to produce these Rule 12g3–
as 351 foreign private issuers 214 could estimate that each Rule 12g3–2(b) 2(b) submissions to total 49,728 hours;
exempt issuer currently makes 12 Rule • foreign private issuers to incur a
207 14,661 Form 6–K reports × .18 = 2,639; 12g3–2(b) submissions per year for a total of 31,080 annual burden hours to
14,661 – 2,639 = 12,022 Form 6–K reports. total of 8,220 Rule 12g3–2(b) produce these Rule 12g3–2(b)
208 In the Original and Reproposing Releases, we submissions. We further estimate that it submissions, or 2.5 annual burden
estimated that, prior to this rulemaking, it took a takes a total of 32,880 annual burden hours per submission; 223 and
total of 127,197 annual burden hours to produce the
14,661 Form 6–Ks, or approximately 8.7 hours per
hours, or 4 annual burden hours per • outside firms to incur a total cost of
Form 6–K (for work performed by foreign private submission (for work performed by $4,909,275 224 to produce the Rule
issuers and outside firms). We continue to use this foreign private issuers and outside 12g3–2(b) submissions.225
8.7 hour estimate for the final rule amendments. firms), to produce the 8,220 Rule 12g3–
209 12,022 Form 6–K reports × 8.7 hours = 104,591
2(b) submissions.221 222 This amount includes the estimated 288 Form
hours. 20–F and 40–F filers expected to terminate their
210 We estimate that, during the first year of
Exchange Act reporting obligations under Rule
effectiveness of Rule 12h–6, foreign private issuers estimated to elect to terminate their Exchange Act
12h–6 as well as the estimated 63 prior Form 15
could incur a reduction of 14,349 hours in the reporting obligations under Rule 12h–6 during the
filers expected to file a Form 15F to make their
number of burden hours required to produce Form first year of the rule’s effectiveness. We then added
prior termination or suspension of reporting under
6–K. 2,639 Form 6–Ks × 8.7 hours = 22,959 hours; to this sum (288) the number of prior Form 15 filers
Rule 12h–6.
22,959 hours × .25 = 5,740 hours of English (63) estimated to file a Form 15F during the first 223 Because the home country document
translation work; 5,740 hours × .25 = 1,435 hours year of Rule 12h–6’s effectiveness in order to make
their Form 15 termination or suspension of submission requirement under Rule 12g3–2(b) is
of English translation work for foreign private similar to the home country document submission
issuers; 22,959 × .75 = 17,219 hours of non-English reporting obligations permanent. The latter number
is based on the approximate number of foreign requirement under Form 6–K, we have used the
translation work; 17,219 × .75 = 12,914 hours of same assumptions regarding the English and non-
non-English translation work for foreign private private issuers that filed a Form 15 from 2003
through the present. English translation work required under Rule 12g3–
issuers; 1,435 + 12,914 = 14,349 hours. This could 2(b) that we adopted for Form 6–K submissions.
215 In the Original and Reproposing Releases, we
result in estimated Form 6–K cost savings of Accordingly: 49,728 hours × .25 = 12,432 total
$2,511,075 for foreign private issuers during the estimated that the production of each Form 15F
annual burden hours for English translation work;
first year of Rule 12h–6’s effectiveness. 14,349 hrs. would require 30 hours. We continue to use this
49,728¥12,432 = 37,296 total annual burden hours
× $175/hr. = $2,511,075. estimate for the final rule amendments.
216 351 Form 15Fs × 30 = 10,530 hours.
required for non-English translation work; 37,296
211 104,591 hours × .25 = 26,148 hours for English
hours × .75 = 27,972 total annual burden hours
217 10,530 hours × .25 = 2,633 hours. This could
translation work; 104,591 hours—26,148 hours = incurred by foreign private issuers for non-English
78,443 hours for non-English translation work; result in estimated Form 15F costs for foreign translation work; 12,432 hours × .25 = 3,108 total
78,443 hours × .75 = 58,832 hours for non-English private issuers of $460,775 during Rule 12h–6’s first annual hours incurred by foreign private issuers for
translation work performed by foreign private year of effectiveness. 2,633 hrs. × $175 = $460,775. English translation work; 27,972 + 3,108 = 31,080
issuers; 26,148 hours × .25 = 6,537 hours of English 218 10,530 hours × .75 = 7,898 hours; 7,898 hours
total annual burden hours incurred by foreign
translation work performed by foreign private × $400/hour = $3,159,200. The $3,159,200 increase private issuers for Rule 12g3–2(b) submissions, or
issuers; 58,832 hours + 6,537 hours = 65,369 total reflects the increase in the number of estimated 2.5 annual burden hours per submission. Of the
hours for Form 6–K work performed by foreign Form 15F filers and the increase in the estimated 31,080 hours, 10,530 hours would result from
private issuers, or 5.4 hours for foreign private outside firm hourly rate from $300 to $400. adoption of the new rules and 20,550 hours
issuer work per Form 6–K. 219 Thus, Rule 12h–6 could result in total represents an adjustment from the previous PRA
212 We estimate cost savings of $2,260,025 in estimated Form 15F costs of $3,619,975 during its estimates for Rule 12g3–2 submissions.
connection with outside firms’ production of Form first year of effectiveness. $460,775 + $3,159,200 = 224 49,728 hours × .25 = 12,432 hours for English
6–K during Rule 12h–6’s first year of effectiveness. $3,619,975. translation work; 12,432 hours × .75 = 9,324 hours;
5,740 hrs. × .75 × $125/hour = $538,125 for English 220 This estimate is based on Commission staff’s 9,324 hours × $125 = $1,165,500 for English
translation work; 17,219 × .25 × $400/hour = most recent annual review of the number of current translation work; 49,728 hours¥12,432 hours =
$1,721,900 for non-English translation work. Rule 12g3–2(b) exempt companies, which will be 37,296 hours for non-English translation work;
$538,125 + $1,721,900 = $2,260,025 in Form 6–K available soon on our Internet Web site at http:// 37,296 hours × .25 = 9,324 hours; 9,324 hours ×
cost savings for outside firms. Thus, Rule 12h–6 www.sec.gov/divisions/corpfin.shtml. $400 = $3,729,600 for non-English translation work;
could result in total estimated Form 6–K cost 221 These estimates are the same as the estimates $1,165,500 + $3,729,600 = $4,895,100 for total work
savings of $4,771,100. $2,511,075 + $2,260,025 = presented in the Reproposing Release. As we stated performed by outside firms. Of that total amount,
$4,771,100. in that release, the estimates represent an $1,658,475 would result from adoption of the new
213 78,443 hours × .25 = 19,611 hours × $400/hour rules and $3,236,625 constitutes an adjustment
adjustment of 31,080 hours from the 1,800 total
= $7,844,400 for non-translation work; 26,148 hours hours previously reported for Rule 12g3–2(b) from the previous PRA estimates for Rule 12g3–2
× .75 = 19,611 hours × $125/hour = $2,451,375 for submissions. They reflect a re-evaluation of the submissions.
English translation work; $7,844,400 + $2,451,375 number of foreign private issuers that currently 225 We further estimate that new Rule 12h–6 and
= $10,295,775 for total work performed by outside claim the Rule 12g3–2(b) exemption, the number of the accompanying rule amendments could result in
firms. The $2,078,475 increase reflects the increase Rule 12g3–2(b) submissions made by them, and the total estimated Rule 12g3–2(b) costs of $3,501,225
in the estimated outside firm hourly rate from $300 number of burden hours required for their during the first year of their effectiveness. 351
to $400 and the increase in the estimated outside production, in addition to assessing the effects on issuers × 12 submissions/issuer × 2.5 hrs./
firm rate for English translation work from $75 to Rule 12g3–2(b) submissions expected to result from submission = 10,530 hours; 10,530 hours × $175/
$125/hour based on current information provided adoption of the final rule amendments. We believe hr. = $1,842,750 in Rule 12g3–2(b) submission costs
by financial printer representatives. these estimates more accurately reflect the current for foreign private issuers. For outside firm costs:
214 We derived this estimate from the number of burden hours required for the collections of 351 issuers × 12 submissions/issuer × 4 hrs./
Form 20–F filers (275) and Form 40–F filers (13) information submitted under Rule 12g3–2(b). submission = 16,848 hours; 16,848 × .25 = 4,212
IV. Cost-Benefit Analysis a worldwide basis when determining B. Expected Costs

whether it may terminate its Exchange Investors could incur costs from the
A. Expected Benefits
Act reporting obligations. Because adopted rule amendments to the extent
New Exchange Act Rule 12h–6 and trading volume data is more easily that currently registered foreign
the accompanying rule amendments obtainable than information regarding companies respond to the rule changes
will benefit U.S. investors to the extent its U.S. shareholders, the new rule by terminating their Exchange Act
that they remove a possible disincentive should lower the costs of Exchange Act registration and reporting obligations
for foreign companies that are not termination for foreign private issuers. with respect to their equity and debt
currently Exchange Act reporting Second, new Rule 12h–6 will allow a securities. If Exchange Act disclosure
companies to register their equity and foreign firm to terminate its Exchange requirements provide more information
debt securities with the Commission. In Act reporting obligations regarding a or protection to U.S. or other investors
response to foreign companies’ concerns class of equity securities and than is provided in an issuer’s primary
about Exchange Act reporting and other immediately obtain the Rule 12g3–2(b) trading market, then all investors, both
obligations, these rules will expand the exemption. Accordingly, such a U.S. and foreign, may suffer the costs of
criteria by which a foreign company terminating foreign private issuer would losing that information and protection
may terminate those obligations. In so be able to avoid the costs associated upon Exchange Act termination.228 If
doing, the adopted rule amendments with continued annual verification that this is the case, the announcement that
should over time remove an its number of holders of record remains a foreign firm is terminating its
impediment to foreign company access below 300. Exchange Act reporting may result in a
and participation in U.S. public capital Third, new Rule 12h–6 will permit an loss of share value and the incurrence
markets while still providing U.S. issuer to rely on the assistance of an by investors of higher costs from trading
investors with the protections afforded independent information services in the firm’s equity and debt securities.
by our Exchange Act reporting regime. provider when determining whether it There are costs associated with the
The adopted rule amendments should falls below the 300-holder standard. The filing of new Form 15F, which is a
remove a disincentive for foreign firms option to hire an independent requirement for a foreign private issuer
to enter our Exchange Act reporting information services provider may be a that terminates its Exchange Act
regime by lowering the cost of exiting more efficient and cost-effective registration and reporting under Rule
from that regime. Investors are expected mechanism to make that determination. 12h–6.229 A foreign private issuer will
to benefit from the amendments by Moreover, a foreign company may save also incur costs in connection with
being able to purchase shares in foreign costs when assessing its eligibility to having to post on its Internet Web site
firms that have been registered with the terminate its registration and reporting in English its material home country
Commission and that, therefore, provide under the 300-holder provision of Rule documents required to maintain the
a high level of investor protection. In 12h–6, since the rule will limit the Rule 12g3–2(b) exemption that it will
addition, U.S. investors may incur lower number of jurisdictions in which a have received upon the effectiveness of
transaction costs when trading a foreign foreign private issuer must search for its termination of reporting under new
company’s shares on a U.S. exchange the amount of securities represented by Rule 12h–6.230
relative to a foreign exchange. accounts of customers resident in the We expect that new Rule 12h–6 will
To remove a disincentive for foreign United States held by brokers, dealers, enable some foreign registrants to avoid
companies to enter U.S. public capital banks and other nominees. The current other recent U.S. regulation, such as the
markets, the adopted rule amendments rules require a foreign private issuer to Sarbanes-Oxley Act. Investors will lose
will benefit U.S. investors by enabling a conduct a worldwide search for such the benefits afforded by the Sarbanes-
foreign Exchange Act reporting U.S. customer accounts. Oxley Act to the extent a current foreign
company to lower its costs of Fourth, once having terminated its registrant is not fully subject to that Act.
compliance in connection with reporting obligations under new Rule Some U.S. investors might seek to
Exchange Act deregistration. This 12h–6, a foreign company will no longer trade in the equity securities of a foreign
reduction in the cost of compliance will be required to incur costs associated company following its termination of
directly benefit both foreign companies with producing an Exchange Act annual Exchange Act reporting under Rule
and their investors, including those report or interim Form 6–K reports.226 12h–6. U.S. investors seeking to trade
resident in the United States. Based on estimates and assumptions the former reporting company’s
The final rule amendments will result used for the purpose of the Paperwork securities in the U.S. may be forced to
in foreign private issuers incurring Reduction Act, these estimated cost trade in over-the-counter markets such
lower costs of Exchange Act compliance savings could total approximately as the one administered by Pink Sheets,
in four possible ways. First, rather than $200,000,000 for the first year of Rule LLC, which could result in higher
require a foreign private issuer to 12h–6’s effectiveness.227 transaction costs than if the foreign
determine the number of its company had continued to have a class
U.S.holders, as is the case under the 226 We recognize that, as a result of terminating
of securities registered with the
current exit rules, new Rule 12h–6 will their Exchange Act reporting obligations under Rule
Commission.
enable a foreign private issuer to rely 12h–6, foreign firms may accrue other cost savings
that are not specifically quantified in this section.
solely on trading volume data regarding One such example is an investment in an internal 228 Conversely, in countries that have similar
its securities in the United States and on control system in order to comply with the regulatory regimes and levels of investor protection,
Sarbanes-Oxley Act. the impact of U.S. deregistration may be mitigated.
hours of English translation work; 4,212 × .75 × 227 As discussed in Part III of this release, for the 229 As discussed in Part III of this release, based
$125 = $394,875 of English translation costs for first year of Rule 12h–6’s effectiveness, estimated on estimates and assumptions adopted for the
outside firms. 16,848 hours × .75 = 12,636 hours of cost savings in connection with Forms 20–F, 40–F purpose of the Paperwork Reduction Act, these
non-English translation work; 12,636 × .25 × $400 and 6–K could amount to, respectively, costs could total $3,619,975 during the first year of
= $1,263,600 of non-English translation costs for $198,893,750, $1,321,075, and $4,771,100, for a the new form’s use.
outside firms. $394,875 + $1,263,600 = $1,658,475 total of $204,985,925. These cost savings could be 230 As discussed in Part III of this release, based
in total Rule 12g3–2(b) submission costs for outside less to the extent that more foreign private issuers on estimates and assumptions adopted for the
firms. $1,842,750 + $1,658,475 = $3,501,225 in total register with the Commission over time as a result Paperwork Reduction Act, these resulting Rule
estimated Rule 12g3–2(b) costs. of the adoption of Rule 12h–6. 12g3–2(b) costs could amount to $3,501,225.
U.S. investors seeking to trade the action is necessary or appropriate in the in its primary trading market, the
former reporting company’s securities in public interest, Section 3(f) of the adopted rules will help ensure that U.S.
its primary trading market also could Exchange Act 233 requires the investors continue to have ready access
incur additional costs. For example, Commission to consider whether the to material information in English about
U.S. investors who held the securities in action will promote efficiency, the foreign private issuer.234 Thus, new
the form of ADRs could incur costs competition and capital formation. Rule 12h–6 and the accompanying rule
associated with the depositary’s In the Reproposing Release, we amendments should foster increased
conversion of the ADRs into ordinary considered reproposed Rule 12h–6 and efficiency in the trading of the issuer’s
shares.231 Moreover, some U.S. the accompanying reproposed rule securities for U.S. investors following
investors could incur costs associated amendments in light of the standards set the issuer’s termination of Exchange Act
with finding and contracting with a new forth in the above statutory sections. We reporting.
broker-dealer who is able to trade in the solicited comment on whether, if
foreign reporting company’s primary adopted, reproposed Rule 12h–6 and the VI. Regulatory Flexibility Act
trading market. U.S. investors may face other reproposed rule amendments Certification
additional costs due to the cost of would result in any anti-competitive Under Section 605(b) of the
currency conversion and higher effects or promote efficiency, Regulatory Flexibility Act,235 we
transaction costs trading the securities competition and capital formation. We certified that, when adopted,
in a foreign market. further encouraged commenters to reproposed Rule 12h–6 and the
Some investors who wish to make provide empirical data or other facts to accompanying reproposed rule
investment decisions regarding former support their views on any anti- amendments would not have a
Exchange Act reporting foreign competitive effects or any burdens on significant economic impact on a
companies also may incur costs to the efficiency, competition or capital substantial number of small entities. We
extent that the information provided by formation that might result from included this certification in Part VI of
such companies pursuant to any home adoption of reproposed Rule 12h–6 and the Reproposing Release. While we
country regulations is different from the other reproposed rule amendments. encouraged written comments regarding
that which currently is required under We did not receive any comments or this certification, no commenters
the Exchange Act. Such investors could any empirical data in this regard
responded to this request.
incur costs associated with hiring an concerning reproposed Rule 12h–6 and
attorney or investment adviser, to the the accompanying rule amendments. VII. Statutory Basis and Text of Rule
extent that they have not already done Accordingly, since the adopted rules are Amendments
so, to explain the material differences, if substantially similar to the reproposed
rules, we continue to believe the new We are adopting the amendments to
any, between a foreign company’s home
rules will provide a foreign reporting Rule 30–1 of Part 200, Rule 101 of
country reporting requirements, as
company with a more efficient option of Regulation S–T, and Exchange Act
reflected in its home country annual
exiting the Exchange Act reporting Rules 12g3–2, 12g–4 and 12h–3, new
report posted on its Internet Web site,
system when U.S. investor interest has Exchange Act Rule 12h–6 and new
and Exchange Act reporting
become relatively scarce. In so doing, Exchange Act Form 15F under the
requirements.
new Rule 12h–6 and the other rule authority in sections 6, 7, 10 and 19 of
V. Consideration of Impact on the amendments should encourage foreign the Securities Act 236 and sections 3(b),
Economy, Burden on Competition and private issuers to register their equity 12, 13, 23 and 36 of the Exchange
Promotion of Efficiency, Competition and debt securities with the Act.237
and Capital Formation Analysis Commission by reassuring foreign List of Subjects
When adopting rules under the private issuers that, should interest in
Exchange Act, Section 23(a)(2) of the the U.S. market for their securities 17 CFR Part 200
Exchange Act 232 requires us to consider decline sufficiently, they may exit the Administrative practice and
the impact that any new rule will have Exchange Act reporting system with procedure, Authority delegations
on competition. Section 23(a)(2) also little difficulty. (Government agencies).
prohibits us from adopting any rule that By providing increased flexibility for
will impose a burden on competition foreign private issuers regarding our 17 CFR Parts 232, 240 and 249
not necessary or appropriate in Exchange Act reporting system, the Reporting and recordkeeping
furtherance of the purposes of the adopted rules should encourage foreign requirements, Securities.
Exchange Act. Furthermore, when companies to participate in U.S. capital
engaging in rulemaking that requires us markets as Exchange Act reporting Text of Rule Amendments
to consider or determine whether an companies to the benefit of investors. In
so doing, the adopted rules should ■ For the reasons set out in the
231 A foreign company may terminate its ADR foster increased competition between preamble, we are amending Title 17,
facility whether or not it is an Exchange Act domestic and foreign firms for investors Chapter II of the Code of Federal
registrant, and adopted Rule 12h–6 does not require
in U.S. capital markets. Regulations as follows.
the termination of ADR facilities. In fact, by
granting foreign private issuers the Rule 12g3–2(b) Moreover, by requiring a foreign
234 Similarly, by expanding the scope of the
exemption immediately upon their termination of private issuer that has terminated its
reporting with regard to a class of equity securities, originally proposed Rule 12h–6 to permit prior
Exchange Act reporting under Rule Form 15 filers to terminate their Exchange Act
Rule 12h–6 will enable foreign private issuers to
retain their ADR facilities as unlisted facilities
12h–6 to publish its home country reporting obligations under the new exit rule and
following their termination of reporting under Rule documents required under Exchange claim the Rule 12g3–2(b) exemption immediately
12h–6. As adopted, Rule 12h–6 will require an Act Rule 12g3–2(b) in English on its upon such termination, the adopted rules will help
issuer that has terminated a sponsored ADR facility promote the availability of material home country
Internet Web site or through an information in English about those issuers for U.S.
to wait a year before it may file a Form 15F in
reliance on the trading volume provision of Rule
electronic information delivery system investors.
12h–6 if, on the date of termination, the issuer does that is generally available to the public 235 5 U.S.C. 605(b).
not meet the trading volume benchmark. 236 15 U.S.C. 77f, 77g, 77j, and 77s.
232 15 U.S.C. 78w(a)(2). 233 15 U.S.C. 78c(f). 237 15 U.S.C. 78c, 78l, 78m, 78w, and 78mm.
PART 200—ORGANIZATION; 20, 80a–23, 80a–29, 80a–37, 80b–3, 80b–4, reporting obligations under section
CONDUCT AND ETHICS; AND 80b–11, and 7201 et seq.; and 18 U.S.C. 1350, 15(d) of the Act.
unless otherwise noted. (4) Notwithstanding the time period
INFORMATION AND REQUESTS
* * * * * specified in § 240.12g3–2(d)(1), a foreign
■ 1. The general authority citation for ■ 6. Amend § 240.12g3–2 by revising private issuer that filed a Form 15F
Part 200 is revised to read as follows: paragraphs (d)(1) and (d)(2) and adding solely with respect to a class of debt
Authority: 15 U.S.C. 77o, 77s, 77sss, 78d, paragraphs (e) and (f) to read as follows: securities under section 15(d) of the Act
78d–1, 78d–2, 78w, 78ll(d), 78mm, 80a–37, (15 U.S.C. 78o(d)) may establish the
80b–11, and 7202, unless otherwise noted. § 240.12g3–2 Exemptions for American exemption provided by paragraph (b) of
depositary receipts and certain foreign
* * * * * securities.
this section for a class of equity
■ 2. Amend § 200.30–1 by adding securities upon the effectiveness of its
*
* * * * termination of reporting regarding the
paragraph (e)(17) to read as follows: (d) * * *
(1) Securities of a foreign private class of debt securities.
§ 200.30–1 Delegation of authority to
Notes to Paragraph (e): 1. In order to
Director of Division of Corporation Finance. issuer that has or has had during the
prior eighteen months any securities maintain the § 240.12g3–2(b) exemption
* * * * * obtained under this paragraph, at a
registered under section 12 of the Act or
(e) * * * minimum, a foreign private issuer shall
a reporting obligation (suspended or
(17) At the request of a foreign private electronically publish English translations of
active) under section 15(d) of the Act the following documents required to be
issuer, pursuant to Rule 12h–6
(other than arising solely by virtue of furnished under paragraph (b)(1)(iii) of this
(§ 240.12h–6 of this chapter), to
the use of Form F–7, F–8, F–9, F–10 or section if in a foreign language:
accelerate the termination of the
F–80), except as provided by paragraph a. Its annual report, including or
registration of a class of securities under
(e) of this section; accompanied by annual financial statements;
section 12(g) of the Act (15 U.S.C. 78l(g)) b. Interim reports that include financial
(2) Securities of a foreign private
or the duty to file reports under section statements;
issuer issued in a transaction (other than
13(a) of the Act (15 U.S.C. 78m(a)) or c. Press releases; and
a transaction registered on Form F–8, F–
section 15(d) of the Act (15 U.S.C. d. All other communications and
9, F–10 or F–80) to acquire by merger,
78o(d)). documents distributed directly to security
consolidation, exchange of securities or holders of each class of securities to which
* * * * * acquisition of assets, another issuer that the exemption relates.
had securities registered under section 2. As used in paragraph (e)(2) of this
PART 232—REGULATION S–T—
12 of the Act or a reporting obligation section, primary trading market has the same
GENERAL RULES AND REGULATIONS
(suspended or active) under section meaning as under § 240.12h–6(f).
FOR ELECTRONIC FILINGS 3. A foreign private issuer that files a Form
15(d) of the Act, except as provided by
paragraph (e) of this section; and 15F regarding a class of equity securities
■ 3. The authority citation for Part 232
shall disclose in the Form 15F the address of
continues to read in part as follows: * * * * * its Internet Web site or that of the electronic
(e)(1) A foreign private issuer that has information delivery system in its primary
Authority: 15 U.S.C. 77f, 77g, 77h, 77j,
77s(a), 77sss(a), 78c(b), 78l, 78m, 78n, 78o(d),
filed a Form 15F (§ 249.324 of this trading market on which it will publish the
78w(a), 78ll(d), 80a–8, 80a–29, 80a–30, 80a– chapter) pursuant to § 240.12h–6 shall information required under paragraph
37, and 7201 et seq.; and 18 U.S.C. 1350. receive the exemption provided by (b)(1)(iii) of this section. An issuer need not
* * * * * paragraph (b) of this section for a class update the Form 15F to reflect a change in
of equity securities immediately upon that address.
■ 4. Amend § 232.101 by: 4. A foreign private issuer that has filed a
the effectiveness of the termination of
■ a. Removing the word ‘‘and’’ at the Form 15F solely with respect to a class of
registration of that class of securities
end of paragraph (a)(1)(x); under section 12(g) of the Act (15 U.S.C. debt securities may establish the exemption
■ b. Removing the period and adding ‘‘; under § 240.12g3–2(b) regarding a class of
78l(g)) or the termination of the duty to equity securities by submitting an
and’’ at the end of paragraph (a)(1)(xi); file reports regarding that class of
and application to the Commission after filing its
securities under section 15(d) of the Act Form 15F. The issuer must provide in that
■ c. Adding paragraph (a)(1)(xii).
(15 U.S.C. 78o(d)), or both. application the date that it filed its Form 15F
The addition reads as follows: (2) Notwithstanding any provision of as well as the address of its Internet Web site
§ 232.101 Mandated electronic § 240.12g3–2(b), in order to satisfy the or that of the electronic information delivery
submissions and exceptions. conditions of the § 240.12g3–2(b) system in its primary trading market on
exemption received under this which it will publish the information
(a) * * * required under paragraph (b)(1)(iii) of this
(1) * * * paragraph (e), the issuer shall publish in
section.
(xii) Forms 15 and 15F (§ 249.323 and English the information required under
§ 249.324 of this chapter). paragraph (b)(1)(iii) of this section on its (f)(1) A foreign private issuer that,
Internet Web site or through an upon application to the Commission
* * * * *
electronic information delivery system and not after filing a Form 15F, has
PART 240—GENERAL RULES AND generally available to the public in its obtained or will obtain the exemption
REGULATIONS, SECURITIES primary trading market, rather than under § 240.12g3–2(b), may publish the
EXCHANGE ACT OF 1934 furnish that information to the information required under paragraph
Commission. (b)(1)(iii) of this section on its Internet
■ 5. The general authority citation for (3) The § 240.12g3–2(b) exemption Web site or through an electronic
Part 240 continues to read in part as received under this paragraph (e) will information delivery system generally
follows: remain in effect for as long as the available to the public in its primary
Authority: 15 U.S.C. 77c, 77d, 77g, 77j,

foreign private issuer satisfies the trading market, rather than furnish that
77s, 77z–2, 77z–3, 77eee, 77ggg, 77nnn, electronic publication condition of information to the Commission, as long
77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 78j, paragraph (e)(2) of this section or until as it complies with the English
78j–1, 78k, 78k–1, 78l, 78m, 78n, 78o, 78p, the issuer registers a class of securities translation requirements provided in
78q, 78s, 78u–5, 78w, 78x, 78ll, 78mm, 80a– under section 12 of the Act or incurs paragraph (e) of this section.
(2) Before a foreign private issuer may or section 15(d) of the Act for at least (b) A foreign private issuer must wait
publish information electronically the 12 months preceding the filing of at least 12 months before it may file a
pursuant to this paragraph, it must the Form 15F, has filed or furnished all Form 15F to terminate its section 13(a)
provide the Commission with the reports required for this period, and has or 15(d) reporting obligations in reliance
address of its Internet Web site or that filed at least one annual report pursuant on paragraph (a)(4)(i) of this section if:
of the electronic information delivery to section 13(a) of the Act; (1) The issuer has delisted a class of
system in its primary trading market in (2) The foreign private issuer’s equity securities from a national
its application for the exemption under securities have not been sold in the securities exchange or inter-dealer
§ 240.12g3–2(b) or in an amendment to United States in a registered offering quotation system in the United States,
that application. under the Securities Act of 1933 (15 and at the time of delisting, the average
■ 7. Amend § 240.12g–4 by: U.S.C. 77a et seq.) during the 12 months daily trading volume of that class of
■ a. Removing the authority citations preceding the filing of the Form 15F, securities in the United States exceeded
following the section; and other than securities issued: 5 percent of the average daily trading
■ b. Revising paragraph (a) to read as (i) To the issuer’s employees; volume of that class of securities on a
follows: (ii) By selling security holders in non- worldwide basis for the preceding 12
underwritten offerings; months; or
§ 240.12g–4 Certifications of termination (2) The issuer has terminated a
of registration under section 12(g).
(iii) Upon the exercise of outstanding
rights granted by the issuer if the rights sponsored American Depositary
(a) Termination of registration of a are granted pro rata to all existing Receipts facility, and at the time of
class of securities under section 12(g) of security holders of the class of the termination the average daily trading
the Act (15 U.S.C. 78l(g)) shall take issuer’s securities to which the rights volume in the United States of the
effect 90 days, or such shorter period as attach; American Depositary Receipts exceeded
the Commission may determine, after (iv) Pursuant to a dividend or interest 5 percent of the average daily trading
the issuer certifies to the Commission reinvestment plan; or volume of the underlying class of
on Form 15 (17 CFR 249.323) that the securities on a worldwide basis for the
(v) Upon the conversion of
class of securities is held of record by: preceding 12 months.
outstanding convertible securities or
(1) Less than 300 persons; or (c) A foreign private issuer may
(2) Less than 500 persons, where the upon the exercise of outstanding
transferable warrants issued by the terminate its duty to file or furnish
total assets of the issuer have not reports pursuant to section 13(a) or
exceeded $10 million on the last day of issuer;
section 15(d) of the Act with respect to
each of the issuer’s most recent three Note to Paragraph (a)(2): The exceptions in a class of debt securities after certifying
fiscal years. paragraphs (a)(2)(iii) through (v) do not apply to the Commission on Form 15F that:
to securities issued pursuant to a standby
* * * * * (1) The foreign private issuer has filed
underwritten offering or other similar
■ 8. Amend § 240.12h–3 by: arrangement in the United States. or furnished all reports required by
■ a. Removing the authority citations section 13(a) or section 15(d) of the Act,
following the section; (3) The foreign private issuer has including at least one annual report
■ b. Adding the word ‘‘and’’ at the end
maintained a listing of the subject class pursuant to section 13(a) of the Act; and
of paragraph (b)(1)(ii); of securities for at least the 12 months (2) On a date within 120 days before
■ c. Removing paragraph (b)(2), preceding the filing of the Form 15F on the filing date of the Form 15F, the class
including the undesignated paragraph; one or more exchanges in a foreign of debt securities is either held of record
■ d. Redesignating paragraph (b)(3) as jurisdiction that, either singly or by:
(b)(2); together with the trading of the same (i) Less than 300 persons on a
■ e. Revising the cite ‘‘paragraphs class of the issuer’ s securities in worldwide basis; or
(b)(1)(ii) and (2)(ii)’’ to read ‘‘paragraph another foreign jurisdiction, constitutes (ii) Less than 300 persons resident in
(b)(1)(ii)’’ in paragraph (c); and the primary trading market for those the United States.
■ f. Revising the phrase ‘‘criteria (i) and securities; and (d)(1) Following a merger,
(ii) in either paragraph (b)(1) or (2)’’ to (4)(i) The average daily trading consolidation, exchange of securities,
read ‘‘either criteria (i) or (ii) of volume of the subject class of securities acquisition of assets or otherwise, a
paragraph (b)(1)’’ in paragraph (d). in the United States for a recent 12- foreign private issuer that has succeeded
month period has been no greater than to the registration of a class of securities
■ 9. Add § 240.12h–6 to read as follows:
5 percent of the average daily trading under section 12(g) of the Act of another
§ 240.12h–6 Certification by a foreign volume of that class of securities on a issuer pursuant to § 240.12g–3, or to the
private issuer regarding the termination of worldwide basis for the same period; or reporting obligations of another issuer
registration of a class of securities under (ii) On a date within 120 days before under section 15(d) of the Act pursuant
section 12(g) or the duty to file reports the filing date of the Form 15F, a foreign to § 240.15d–5, may file a Form 15F to
under section 13(a) or section 15(d). terminate that registration or those
private issuer’s subject class of equity
(a) A foreign private issuer may securities is either held of record by: reporting obligations if:
terminate the registration of a class of (A) Less than 300 persons on a (i) Regarding a class of equity
securities under section 12(g) of the Act worldwide basis; or securities, the successor issuer meets
(15 U.S.C. 78l(g)), or terminate the (B) Less than 300 persons resident in the conditions under paragraph (a) of
obligation under section 15(d) of the Act the United States. this section; or
(15 U.S.C. 78o(d)) to file or furnish (ii) Regarding a class of debt
reports required by section 13(a) of the Note to Paragraph (a)(4): If an issuer’s securities, the successor issuer meets
equity securities trade in the form of
Act (15 U.S.C. 78m(a)) with respect to the conditions under paragraph (c) of
American Depositary Receipts in the United

a class of equity securities, or both, after States, for purposes of paragraph (a)(4)(i), it this section.
certifying to the Commission on Form must calculate the trading volume of its (2) When determining whether it
15F (17 CFR 249.324) that: American Depositary Receipts in terms of the meets the prior reporting requirement
(1) The foreign private issuer has had number of securities represented by those under paragraph (a)(1) or paragraph
reporting obligations under section 13(a) American Depositary Receipts. (c)(1) of this section, a successor issuer
may take into account the reporting entitled to a preference in payment of (ii) The termination of a foreign
history of the issuer whose reporting dividends and in distribution of assets private issuer’s duty to file reports
obligations it has assumed pursuant to on liquidation, dissolution, or winding under section 13(a) or section 15(d) of
§ 240.12g–3 or § 240.15d–5. up of the issuer, but are not entitled to the Act.
(e) Counting method. When participate in residual earnings or assets (2) If the Form 15F is subsequently
determining under this section the of the issuer; and withdrawn or denied, the issuer shall,
number of United States residents (ii) Notwithstanding § 240.3a11–1, within 60 days after the date of the
holding a foreign private issuer’s equity any debt security described in withdrawal or denial, file with or
or debt securities: paragraph (f)(3)(i) and (ii) of this submit to the Commission all reports
(1)(i) Use the method for calculating section; that would have been required had the
record ownership § 240.12g3–2(a), (2) Employee has the same meaning as issuer not filed the Form 15F.
except that you may limit your inquiry the definition of employee provided in (h) As a condition to termination of
regarding the amount of securities Form S–8 (§ 239.16b of this chapter). registration or reporting under
represented by accounts of customers (3) Equity security means the same as paragraph (a), (c) or (d) of this section,
resident in the United States to brokers, under § 240.3a11–1, but, for purposes of a foreign private issuer must, either
dealers, banks and other nominees paragraphs (a)(3) and (a)(4)(i) of this before or on the date that it files its
located in: section, does not include: Form 15F, publish a notice in the
(A) The United States; (i) Any debt security that is United States that discloses its intent to
(B) The foreign private issuer’s convertible into an equity security, with terminate its registration of a class of
jurisdiction of incorporation, legal or without consideration; securities under section 12(g) of the Act,
organization or establishment; and (ii) Any debt security that includes a or its reporting obligations under
(C) The foreign private issuer’s warrant or right to subscribe to or section 13(a) or section 15(d) of the Act,
primary trading market, if different from purchase an equity security; or both. The issuer must publish the
the issuer’s jurisdiction of (iii) Any such warrant or right; or notice through a means reasonably
incorporation, legal organization or (iv) Any put, call, straddle, or other designed to provide broad
establishment. option or privilege that gives the holder dissemination of the information to the
(ii) If you aggregate the trading the option of buying or selling a security public in the United States. The issuer
volume of the issuer’s securities in two but does not require the holder to do so. must also submit a copy of the notice to
foreign jurisdictions for the purpose of (4) Foreign private issuer has the same the Commission, either under cover of
complying with paragraph (a)(3) of this meaning as under § 240.3b–4. a Form 6–K (17 CFR 249.306) before or
section, you must include both of those (5) Primary trading market means at the time of filing of the Form 15F, or
foreign jurisdictions when conducting that: as an exhibit to the Form 15F.
your inquiry under paragraph (e)(1)(i) of (i) At least 55 percent of the trading (i)(1) A foreign private issuer that,
this section. in a foreign private issuer’s class of before the effective date of this section,
(2) If, after reasonable inquiry, you are securities that is the subject of Form 15F terminated the registration of a class of
unable without unreasonable effort to took place in, on or through the securities under section 12(g) of the Act
obtain information about the amount of facilities of a securities market or or suspended its reporting obligations
securities represented by accounts of markets in a single foreign jurisdiction regarding a class of equity or debt
customers resident in the United States, or in no more than two foreign securities under section 15(d) of the Act
for purposes of this section, you may jurisdictions during a recent 12-month may file a Form 15F in order to:
assume that the customers are the period; and (i) Terminate under this section the
residents of the jurisdiction in which (ii) If a foreign private issuer registration of a class of equity securities
the nominee has its principal place of aggregates the trading of its subject class that was the subject of a Form 15
business. of securities in two foreign jurisdictions (§ 249.323 of this chapter) filed by the
(3) You must count securities as for the purpose of paragraph (a)(3) of issuer pursuant to § 240.12g–4; or
owned by United States holders when this section, the trading for the issuer’s (ii) Terminate its reporting obligations
publicly filed reports of beneficial securities in at least one of the two under section 15(d) of the Act, which
ownership or other reliable information foreign jurisdictions must be larger than had been suspended by the terms of that
that is provided to you indicates that the the trading in the United States for the section or by the issuer’s filing of a
securities are held by United States same class of the issuer’s securities. Form 15 pursuant to § 240.12h–3,
residents. (6) Recent 12-month period means a regarding a class of equity or debt
(4) When calculating under this 12-calendar-month period that ended no securities.
section the number of your United more than 60 days before the filing date (2) In order to be eligible to file a
States resident security holders, you of the Form 15F. Form 15F under this paragraph:
may rely in good faith on the assistance (g)(1) Suspension of a foreign private (i) If a foreign private issuer
of an independent information services issuer’s duty to file reports under terminated the registration of a class of
provider that in the regular course of its section 13(a) or section 15(d) of the Act securities pursuant to § 240.12g–4 or
business assists issuers in determining shall occur immediately upon filing the suspended its reporting obligations
the number of, and collecting other Form 15F with the Commission if filing pursuant to § 240.12h–3 or section 15(d)
information concerning, their security pursuant to paragraph (a), (c) or (d) of of the Act regarding a class of equity
holders. this section. If there are no objections securities, the issuer must meet the
(f) Definitions. For the purpose of this from the Commission, 90 days, or such requirements under paragraph (a)(3) and
section: shorter period as the Commission may paragraph (a)(4)(i) or (a)(4)(ii) of this
(1) Debt security means any security determine, after the issuer has filed its section; or
other than an equity security as defined Form 15F, the effectiveness of any of the (ii) If a foreign private issuer
under § 240.3a11–1, including: following shall occur: suspended its reporting obligations
(i) Non-participatory preferred stock, (i) The termination of registration of a pursuant to § 240.12h–3 or section 15(d)
which is defined as non-convertible class of securities under section 12(g); of the Act regarding a class of debt
capital stock, the holders of which are and securities, the issuer must meet the
requirements under paragraph (c)(2) of Expires: 4. A foreign private issuer may file Form
this section. Estimated average burden hours per 15F, pursuant to Rule 12h–6(i) (17 CFR
(3)(i) If the Commission does not response—30.0 240.12h–6(i)), if, before the effective date of
Rule 12h–6, it terminated the registration of
object, 90 days after the filing of a Form a class of securities under section 12(g) of the
United States Securities and Exchange
15F under this paragraph, or such Act, or suspended its reporting obligations
Commission
shorter period as the Commission may regarding a class of equity or debt securities
determine, the effectiveness of any of Washington, DC 20549 under section 15(d) of the Act, in order to:
the following shall occur: • Terminate under Rule 12h–6 the
Form 15F—Certification of a Foreign registration of a class of equity securities that
(A) The termination under this
Private Issuer’s Termination of was the subject of a Form 15 (§ 249.323 of
section of the registration of a class of
Registration of a Class of Securities this chapter) filed by the issuer pursuant to
equity securities, which was the subject
Under Section 12(g) of the Securities § 240.12g–4; or
of a Form 15 filed pursuant to • Terminate its reporting obligations under
Exchange Act of 1934 or its
§ 240.12g–4, and the duty to file reports section 15(d) of the Act, which had been
Termination of the Duty to File Reports
required by section 13(a) of the Act suspended by the terms of that section or by
Under Section 13(a) or Section 15(d) of
regarding that class of securities; or the issuer’s filing of a Form 15 pursuant to
the Securities Exchange Act of 1934
(B) The termination of a foreign § 240.12h–3, regarding a class of equity or
private issuer’s reporting obligations Commission File Number llllllll debt securities.
under section 15(d) of the Act, which lllllllllllllllllllll
B. Certification Effected by Filing Form 15F
had previously been suspended by the (Exact name of registrant as specified in its
charter) By completing and signing this Form, the
terms of that section or by the issuer’s issuer certifies that:
lllllllllllllllllllll
filing of a Form 15 pursuant to • It meets all of the conditions for
§ 240.12h–3, regarding a class of equity (Address, including zip code, and telephone
number, including area code, of registrant’s termination of Exchange Act reporting
or debt securities. principal executive offices)
specified in Rule 12h–6 (17 CFR 240.12h–6);
(ii) If the Form 15F is subsequently and
lllllllllllllllllllll
withdrawn or denied, the foreign • There are no classes of securities other
(Title of each class of securities covered by than those that are the subject of this Form
private issuer shall, within 60 days after this Form) 15F regarding which the issuer has Exchange
the date of the withdrawal or denial, file Place an X in the appropriate box(es) to Act reporting obligations.
with or submit to the Commission all indicate the provision(s) relied upon to
reports that would have been required terminate the duty to file reports under the C. Effective Date
had the issuer not filed the Form 15F. Securities Exchange Act of 1934: For an issuer filing Form 15F under Rule
Rule 12h–6(a) b 12h–6(a), (c) or (d), the duty to file any
PART 249—FORMS, SECURITIES (for equity securities) reports required under section 13(a) or 15(d)
EXCHANGE ACT OF 1934 of the Exchange Act will be suspended
Rule 12h–6(c) b immediately upon filing the Form 15F. If
(for debt securities) there are no objections from the Commission,
■ 10. The authority citation for Part 249
continues to read in part as follows: Rule 12h–6(d) b 90 days, or within a shorter period as the
(for successor registrants) Commission may determine, after the issuer
Authority: 15 U.S.C. 78a et seq. and 7201 Rule 12h–6(i) b has filed its Form 15F, there shall take effect:
et seq.; and 18 U.S.C. 1350, unless otherwise (for prior Form 15 filers) • the termination of registration of a class
noted. of securities under section 12(g) of the Act;
* * * * * General Instructions • the termination of the issuer’s duty to
■ 11. Add § 249.324 to read as follows: A. Who May Use Form 15F and When file or submit reports under section 13(a) or
section 15(d) of the Act; or
1. A foreign private issuer may file Form • both.
§ 249.324 Form 15F, certification by a 15F, pursuant to Rule 12h–6(a) (17 CFR
foreign private issuer regarding the For an issuer that has already terminated
240.12h–6(a)) under the Securities Exchange its registration of a class of equity securities
termination of registration of a class of Act of 1934 (‘‘Exchange Act’’), when seeking
securities under section 12(g) or the duty to pursuant to Rule 12g–4 or suspended its
to terminate: reporting obligations under section 15(d) or
file reports under section 13(a) or section • The registration of a class of securities
15(d). Rule 12h–3, the effectiveness of its
under section 12(g) of the Exchange Act and termination of section 12(g) registration
This form shall be filed by a foreign the corresponding duty to file or furnish under Rule 12h–6 and the corresponding
private issuer to disclose and certify the reports required by section 13(a) of the duty to file reports required by section 13(a)
information on the basis of which it Exchange Act; or of the Act, or the termination of its
meets the requirements specified in • The obligation under section 15(d) of the previously suspended reporting obligations
Rule 12h–6 (§ 240.12h–6 of this chapter) Exchange Act to file or furnish reports under section 15(d) of the Act, shall also
required by section 13(a) of the Act regarding occur 90 days after the issuer has filed its
to terminate the registration of a class of a class of equity securities; or
securities under section 12(g) of the Act Form 15F under Rule 12h–6(i), or within a
• Both. shorter period as the Commission may
(15 U.S.C. 78l(g)) or the duty to file 2. A foreign private issuer may file Form determine, if there are no objections from the
reports under section 13(a) of the Act 15F, pursuant to Rule 12h–6(c) (17 CFR Commission.
(15 U.S.C. 78m(a)) or section 15(d) of 240.12h–6(c)), when seeking to terminate its
the Act (15 U.S.C. 78(o)(d)). In each reporting obligations under section 13(a) or D. Other Filing Requirements
instance, unless the Commission section 15(d) of the Exchange Act regarding You must file Form 15F and related
objects, termination occurs 90 days, or a class of debt securities. materials, including correspondence, in
such shorter time as the Commission 3. A foreign private issuer may file Form electronic format via our Electronic Data
15F, pursuant to Rule 12h–6(d) (17 CFR Gathering, Analysis, and Retrieval (EDGAR)
may direct, after the filing of Form 15F. 240.12h–6(d)), when seeking to terminate the system in accordance with the EDGAR rules
■ 12. Add Form 15F (referenced in
registration of a class of securities under set forth in Regulation S–T (17 CFR Part 232).
§ 249.324) to read as follows: section 12(g), or reporting obligations under The Form 15F and related materials must be
(Note: The text of Form 15F will not appear section 13(a) or section 15(d) of the Exchange in the English language as required by
in the Code of Federal Regulations.) Act, to which it has succeeded pursuant to Regulation S–T Rule 306 (17 CFR 232.306).
OMB APPROVAL Rule 12g–3 (17 CFR 240.12g–3) or Rule 15d– You must provide the signature required for
OMB Number: 3235–0621 5 (17 CFR 240.15d–5). Form 15F in accordance with Regulation S–
T Rule 302 (17 CFR 232.302). If you have c. upon the exercise of outstanding rights trading volume in the denominator. This
technical questions about EDGAR, call the granted by the issuer if the rights are granted denominator should be the same as the
EDGAR Filer Support Office at (202) 551– pro rata to all existing security holders of the denominator used for the trading volume
8900. If you have questions about the EDGAR class of the issuer’s securities to which the benchmark under Rule 12h–6(a)(4)(i) (17 CFR
rules, call the Office of EDGAR and rights attach; 240.12h–6(a)(4)(i)) and Item 4 of this Form.
Information Analysis at (202) 551–3610. d. pursuant to a dividend or interest
If the Form 15F is subsequently withdrawn reinvestment plan; or Item 4. Comparative Trading Volume Data
or denied, you must, within 60 days after the e. upon the conversion of outstanding If relying on Rule 12h–6(a)(4)(i), provide
date of the withdrawal or denial, file with or convertible securities or upon the exercise of the following information:
submit to the Commission all reports that outstanding transferable warrants issued by A. Identify the first and last days of the
would have been required had you not filed the issuer. recent 12-month period used to meet the
the Form 15F. See Rule 12h–6(g)(2) (17 CFR However, you must include registered requirements of that rule provision.
240.12h–6(g)(2)) and Rule 12h–6(i)(3)(ii) (17 offerings described in paragraphs (c) through B. For the same recent 12-month period,
CFR 240.12h–6(i)(3)(ii)). (e) of this instruction if undertaken pursuant disclose the average daily trading volume of
to a standby underwritten offering or other the class of securities that is the subject of
E. Rule 12g3–2(b) Exemption similar arrangement in the United States. this Form both in the United States and on
Regardless of the particular Rule 12h–6 2. If you have registered equity securities a worldwide basis.
provision under which it is proceeding, a on a shelf or other Securities Act registration C. For the same recent 12-month period,
foreign private issuer that has filed a Form statement under which securities remain disclose the average daily trading volume of
15F regarding a class of equity securities unsold, disclose the last sale of securities the subject class of securities in the United
shall receive the exemption under Rule under that registration statement. If no sale States as a percentage of the average daily
12g3–2(b) (17 CFR 240.12g3–2(b)) for the has occurred during the preceding 12 trading volume for that class of securities on
subject class of equity securities immediately months, disclose whether you have filed a a worldwide basis.
upon the effective date of its termination of post-effective amendment to terminate the D. Disclose whether you have delisted the
registration and reporting under Rule 12h–6. registration of unsold securities under that subject class of securities from a national
Refer to Rule 12g3–2(e) (17 CFR 240.12g3– registration statement. securities exchange or inter-dealer quotation
2(e)) for the conditions that a foreign private system in the United States. If so, provide the
Item 3. Foreign Listing and Primary Trading
issuer must meet in order to maintain the date of delisting, and, as of that date, disclose
Market
Rule 12g3–2(b) exemption following its the average daily trading volume of the
termination of Exchange Act registration and A. Identify the exchange or exchanges
subject class of securities in the United States
reporting. outside the United States, and the foreign
as a percentage of the average daily trading
jurisdiction in which the exchange or
Part I volume for that class of securities on a
exchanges are located, on which you have
maintained a listing of the class of securities worldwide basis for the preceding 12-month
The purpose of this part is to provide period.
information to investors and to assist the that is the subject of this Form, and which,
either singly or together with the trading of E. Disclose whether you have terminated a
Commission in assessing whether you meet sponsored American depositary receipt
the requirements for terminating your the same class of the issuer’s securities in
another foreign jurisdiction, constitutes the (ADR) facility regarding the subject class of
Exchange Act reporting under Rule 12h–6. If, securities. If so, provide the date of the ADR
pursuant to Rule 12h–6, there is an item that primary trading market for those securities.
B. Provide the date of initial listing on the facility termination, and, as of that date,
does not apply to you, mark that item as disclose the average daily trading volume of
inapplicable. foreign exchange or exchanges identified in
response to Item 3.A. In addition, disclose the subject class of securities in the United
Item 1. Exchange Act Reporting History whether you have maintained a listing of the States as a percentage of the average daily
subject class of securities on one or more of trading volume for that class of securities on
A. State when you first incurred the duty
those foreign exchanges for at least the 12 a worldwide basis for the preceding 12-
to file reports under section 13(a) or section
months preceding the filing of this Form. month period.
15(d) of the Exchange Act.
C. Disclose the percentage of trading in the F. Identify the sources of the trading
B. State whether you have filed or
subject class of securities that occurred in the volume information used for determining
submitted all reports required under
identified jurisdiction or jurisdictions of your whether you meet the requirements of Rule
Exchange Act section 13(a) or section 15(d)
foreign listing as of a recent 12-month period. 12h–6. If you used more than one source,
and corresponding Commission rules for the
disclose the reasons why you used each
12 months preceding the filing of this form, Instructions to Item 3 source.
and whether you have filed at least one
1. When responding to this item, refer to Instructions to Item 4
annual report under section 13(a). the definition of ‘‘primary trading market’’ in
Instruction to Item 1. Rule 12h–6(f) (17 CFR 240.12h–6(f)). In 1. ‘‘Recent 12-month period’’ means a 12-
accordance with that definition, if your calendar-month period that ended no more
If you are a successor issuer that has filed
primary trading market consists of two than 60 days before the filing date of this
this Form 15F pursuant to Rule 12h–6(d),
foreign jurisdictions, provide the information form, as defined under Rule 12h–6(f). You
and are relying on the reporting history of the
required by this section for both foreign may disclose the comparative trading volume
issuer to which you have succeeded under
jurisdictions. In addition, disclose whether data in response to this item in tabular format
Rule 12g–3 (17 CFR 12g–3) or Rule 15d–5 (17
the trading market for your securities in at and attached as an exhibit to this Form.
CFR 240.15d–5), identify that issuer and
least one of those two foreign jurisdictions is 2. An issuer is ineligible to rely on
provide the information required by this
larger than the trading market for your paragraph (a)(4)(i) of Rule 12h–6 if, as of the
section for that issuer.
securities in the United States as of the same date of delisting or termination of an ADR
Item 2. Recent United States Market Activity recent 12-month period. Disclose the first facility, the average daily trading volume of
State when your securities were last sold and last days of that recent 12-month period. the subject class of securities in the United
in the United States in a registered offering 2. For the purpose of the primary trading States exceeded 5 percent of the average
under the Securities Act of 1933 (15 U.S.C. market determination, you must measure the daily trading volume of that class of
77a et seq.) (‘‘Securities Act’’). average daily trading volume of on-exchange securities on a worldwide basis, as measured
transactions in the subject securities over the preceding 12 months, and 12
Instructions to Item 2. aggregated over one or two foreign months has not elapsed from the date of
1. Do not include registered offerings jurisdictions against your worldwide trading delisting or termination of the ADR facility.
involving the issuance of securities: volume. You may include in this measure See Rule 12h–6(b) (17 CFR 240.12h–6(b)).
a. to your employees, as that term is off-exchange transactions in those 3. For purposes of paragraph (a)(4)(i) of
defined in Form S–8 (17 CFR 239.16b); jurisdictions comprising the numerator only Rule 12h–6:
b. by selling security holders in non- if you include those off-exchange a. when determining your U.S. average
underwritten offerings; transactions when calculating worldwide daily trading volume, you must include all
transactions, whether on-exchange or off- disclose the submission date of the Form 6– information that is material to your eligibility
exchange; K. If not, attach a copy of the notice as an to terminate your reporting obligations under
b. when determining your worldwide exhibit to this Form. See Rule 12h–6(h). Exchange Act Rule 12h–6. You should refer
average daily trading volume, in addition to to any relevant exhibit when responding to
on-exchange transactions, which you must Item 8. Prior Form 15 Filers
the items on this Form.
include, you may include off-exchange If relying on Rule 12h–6(i):
transactions; and A. Disclose whether, before the effective Item 11. Undertakings
c. the sources of your trading volume date of Rule 12h–6, you filed a Form 15 (17
Furnish the following undertaking:
information may include publicly available CFR 249.323) to terminate the registration of
sources, market data vendors or other a class of equity securities pursuant to Rule The undersigned issuer hereby undertakes
commercial information service providers 12g–4 (17 CFR 240.12g–4) or to suspend your to withdraw this Form 15F if, at any time
upon which you have reasonably relied in reporting obligations under section 15(d) of before the effectiveness of its termination of
good faith, and as long as the information the Act regarding a class of equity or debt reporting under Rule 12h–6, it has actual
does not duplicate any other trading volume securities pursuant to Rule 12h–3 (17 CFR knowledge of information that causes it
information obtained from exchanges or 240.12h–3). If so, disclose the date that you reasonably to believe that, at the time of
other sources. filed the Form 15. If you suspended your filing the Form 15F:
reporting obligations by the terms of section (1) The average daily trading volume of its
Item 5. Alternative Record Holder
15(d), disclose the effective date of that subject class of securities in the United States
Information
suspension as well as the date that you filed exceeded 5 percent of the average daily
If relying on Rule 12h–6(a)(4)(ii) (17 CFR a Form 15 to notify the Commission of that
240.12h–6(a)(4)(ii)): trading volume of that class of securities on
suspension pursuant to Rule 15d–6 (17 CFR
Disclose the number of record holders of 240.15d–6). a worldwide basis for the same recent 12-
the subject class of equity securities on a B. If you terminated the registration of a month period that the issuer used for
worldwide basis or who are United States class of securities pursuant to Rule 12g–4 or purposes of Rule 12h–6(a)(4)(i);
residents at a date within 120 days before suspended your reporting obligations (2) Its subject class of securities was held
filing this Form. Disclose the date used for pursuant to Rule 12h–3 or by the terms of of record by 300 or more United States
the purpose of Item 5. section 15(d) of the Act regarding a class of residents or 300 or more persons worldwide,
Item 6. Debt Securities equity securities, provide the disclosure if proceeding under Rule 12h–6(a)(4)(ii) or
required by Item 3 of this Form, ‘‘Primary Rule 12h–6(c); or
If relying on Rule 12h–6(c) (17 CFR Trading Market.’’ Further provide the
240.12h–6(c)): (3) It otherwise did not qualify for
disclosure required by Item 4 of this Form, termination of its Exchange Act reporting
Disclose the number of record holders of ‘‘Comparative Trading Volume Data,’’ or the
your debt securities either on a worldwide obligations under Rule 12h–6.
disclosure required by Item 5 of the Form,
basis or who are United States residents at a ‘‘Alternative Record Holder Information.’’ Instruction to Item 11
date within 120 days before the date of filing C. If you suspended your reporting
of this Form. Disclose the date used for the After filing this Form, an issuer has no
obligations pursuant to Rule 12h–3 or by the continuing obligation to make inquiries or
purpose of Item 6.
terms of section 15(d) of the Act regarding a
Instructions to Items 5 and 6 perform other work concerning the
class of debt securities, provide the
information contained in this Form,
1. When determining the number of record disclosure required by Item 6 of this Form,
‘‘Debt Securities.’’ including its assessment of trading volume or
holders of your equity or debt securities who
are United States residents, refer to Rule ownership of its securities in the United
Part II States.
12h–6(e) (17 CFR 240.12h–6(e)) for the
appropriate counting method. Item 9. Rule 12g3–2(b) Exemption Signature
2. If you have relied upon the assistance of Disclose the address of your Internet Web
an independent information services Pursuant to the requirements of the
site or of the electronic information delivery Securities Exchange Act of 1934, [name of
provider to determine the number of your system in your primary trading market on
United States equity or debt securities registrant as specified in charter] has duly
which you will publish the information
holders, identify this party in your response. authorized the undersigned person to sign on
required under Rule 12g3–2(b)(1)(iii) (17 CFR
240.12g3–2(b)(1)(iii)). its behalf this certification on Form 15F. In
Item 7. Notice Requirement
so doing, [name of registrant as specified in
If filing Form 15F pursuant to Rule 12h– Instruction to Item 9 charter] certifies that, as represented on this
6(a), (c) or (d): Refer to Note 1 to Rule 12g3–2(e) for Form, it has complied with all of the
A. Disclose the date of publication of the instructions regarding providing English
notice, required by Rule 12h–6(h) (17 CFR conditions set forth in Rule 12h–6 for
translations of documents published terminating its registration under section
240.12h–6(h)), disclosing your intent to pursuant to Rule 12g3–2(b)(1)(iii) (17 CFR
terminate your duty to file reports under 12(g) of the Exchange Act, or its duty to file
240.12g3–2(b)(1)(iii). reports under section 13(a) or section 15(d)
section 13(a) or 15(d) of the Exchange Act or
both. Part III of the Exchange Act, or both.
B. Identify the means, such as publication
Item 10. Exhibits Dated: March 27, 2007.
in a particular newspaper or transmission by
List the exhibits attached to this Form. By the Commission.
a particular wire service, used to disseminate
the notice in the United States. Nancy M. Morris,
Instruction to Item 10
Instruction to Item 7 Secretary.
In addition to exhibits specifically
If you have submitted a copy of the notice mentioned on this Form, you may attach as [FR Doc. E7–5947 Filed 4–4–07; 8:45 am]
under cover of a Form 6–K (17 CFR 249.306), an exhibit any document providing BILLING CODE 8010–01–P

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Rule: Securities: Foreign Private Issuer's Registration Termination

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Thursday,

to terminate, rather than merely 7 17 CFR 249.324. 77689–77690.

26 Like current Rules 12g–4 and 12h–3, which

103 15 U.S.C. 77c and 77c(a)(10).

240.12h–6(e)(2)). 138 17 CFR 240.12g–3.

Kingdom Companies Act. CFR 240.12h–6(d)(1)(ii)). 240.12h–6(d)(2)).

156 See Item 7.B of Form 15F. forms.

IV. Cost-Benefit Analysis a worldwide basis when determining B. Expected Costs

Authority: 15 U.S.C. 77c, 77d, 77g, 77j,

American Depositary Receipts in the United

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