disclosure on price differs from the effect of recognition on
price); and H. Espahbodi, P. Espahbodi, Z. Rezaee, and H. Tehranian,
Stock Price Reaction and Value Relevance of Recognition versus
Disclosure: The Case of Stock-Based Compensation, Journal of
Accounting and Economics 33 (3), 2002 at 343-373 (examining the
equity price reaction to the announcements related to accounting for
stock-based compensation to assess the value relevance of
recognition on the face of the financial statements versus
disclosure in the notes to the financial statements and concluding
that recognition and disclosure are not substitutes).
    \539\ See, e.g. W. B. Elliot, Are Investors Influenced by Pro
Forma Emphasis and Reconciliations in Earnings Announcements? The
Accounting Review 81 (1), 2006 at 113-133.
    \540\ P. Y. Davis-Friday, L. B. Folami, C. S. Liu, and H. F.
Mittelstaedt, The Value Relevance of Financial Statement Recognition
vs. Disclosure: Evidence from SFAS No. 106, The Accounting Review.
74 (4), 1999 at 403-423 (testing whether market agents treat
disclosed and recognized amounts equivalently by examining firms'
obligations for postretirement benefits other than pensions before
and after formal recognition). This research focuses on a sample of
229 firms that elected disclosure of the postretirement benefit
liability in the year(s) prior to adoption of SFAS 106. The authors
find that both post-retirement benefit liabilities disclosed prior
to adoption of SFAS No. 106, Employers' Accounting for
Postretirement Benefits Other than Pensions, and those recognized
subsequent to adoption significantly contribute to explaining stock
prices, thus suggesting that market agents treat disclosed and
recognized amounts equivalently.
    \541\ See, e.g. letters from CAQ; Deloitte; and EY.
---------------------------------------------------------------------------

    Second, besides the Disclosure Location Considerations discussed
above, some deletions may change the mix of information available to
investors. An example of this is the revision to require dividend
restriction and related disclosures when material, rather than using
the bright line of when restricted net assets exceed a 25 percent
threshold.\542\ Bright line thresholds set forth explicit quantitative
criteria for disclosure and may result in more or less detail than a
materiality standard. Several commenters were supportive of a more
principles-based disclosure framework.\543\ These commenters stated
that materiality is a better disclosure standard because certain of the
existing thresholds result in disclosure that in their view is
immaterial to investors and costly to provide. Other commenters opposed
the amendment, indicating that removing bright line thresholds may
result in the elimination of disclosure relevant to investors or
diminish comparability.\544\
---------------------------------------------------------------------------

    \542\ Rule 4-08(e)(3) of Regulation S-X.
    \543\ See, e.g. letters from CAQ; CGCIV; Clearing House; Davis;
FEI; and USCC.
    \544\ See, e.g. letters from CalPERS; Public Citizen; and R.G.
Associates.
---------------------------------------------------------------------------

    The economic effect of replacing a bright line threshold with a
disclosure standard based on materiality depends on the preferences of
investors and other users. The bright line threshold may be easier to
apply and could enhance the comparability and verifiability of
information; however, a materiality standard may permit more tailored
information to be presented and potentially avoid certain distortions
that can arise from the use of a bright line threshold.
a. Deletion of Commission Disclosure Requirements
    We are eliminating certain Commission disclosure requirements that
we have determined: (1) Require disclosures that convey reasonably
similar information to or are encompassed by the disclosures that
result from compliance with the overlapping U.S. GAAP, IFRS, or
Commission disclosure requirements or (2) require disclosures
incremental to the overlapping U.S. GAAP or Commission disclosure
requirements and are no longer useful to investors.
    The effects of the deletion of these overlapping disclosure
requirements depend on the level of overlap between the requirements.
For investors, eliminating overlapping requirements may reduce search
costs and lead to more efficient information processing. This, in turn,
may lead to better informed investment decisions and an increase in
allocative efficiency. However, to the extent eliminating a requirement
results in a loss of information incremental to the overlapping
requirement, it could negatively impact investors that use the
incremental information. For issuers, eliminating overlapping
requirements may reduce the costs of preparation of the disclosure by
reducing the need to reconcile similar requirements. Requirements that
are clearer and less repetitive may additionally make the disclosure
easier to prepare and result in disclosure that is more responsive and
easier to understand.
    The examples below illustrate the potential effects of the
elimination of Commission disclosure requirements on issuers,
investors, and other users.
    An example of an overlapping disclosure requirement that we are
deleting because it results in only incremental disclosure is Item
101(d)(3) of Regulation S-K, which requires risk disclosures outside
the financial statements relating to geographic areas. These
disclosures are largely encompassed by the disclosures that result from
compliance with other parts of Regulation S-K. More specifically, Item
101(d)(3) requires disclosure of ``any'' risks associated with an
issuer's foreign operations. Item 503(c) of Regulation S-K similarly
requires disclosure of ``significant'' risk factors. Item 101(d)(3)
also requires disclosures of a segment's dependence on foreign
operations, which is similar to the requirement in Item 303(a) of
Regulation S-K, requiring disclosure of trends and uncertainties by
segment, if appropriate to an understanding of the issuer as a whole.
We are also amending Item 303(a) to add an explicit reference to
``geographic areas'' to reduce the likelihood of loss of information
due to the deletion of Item 101(d)(3).
    Since Item 101(d)(3) is more expansive than the similar
requirements in other parts of Regulation S-K, the economic effects of
the deletion would depend on the nature of the incremental information
required by Item 101(d)(3). Research shows that international corporate
diversification may affect issuers' stock market performance \545\ and
valuation.\546\ Therefore, some investors may want incremental
information on foreign operations that is not covered by the amended
Item 303(a) or the requirements of Item 503(c) to disclose
``significant'' risk factors. Deletion of Item 101(d)(3) may adversely
affect this group of investors. However, if the requirements in Item
101(d)(3), such as the requirement to disclose ``any'' risk associated
with foreign operations, tend to yield immaterial disclosures, deletion
of Item 101(d)(3) will benefit investors by eliminating immaterial
information, reducing search costs, and facilitating more efficient
information processing.\547\ More efficient information processing
could in turn result in improved price discovery and enhance the
allocative efficiency of the capital markets. In addition, to the
extent an issuer spends less time preparing its disclosures, investors
will benefit from lower preparation costs although savings could be
modest, if any.\548\
---------------------------------------------------------------------------

    \545\ See T. Agmon and D. R. Lessard, Investor Recognition of
Corporate International Diversification, Journal of Finance 32(4),
1977 at 1049-1055 (arguing that multinational firms have an
advantage relative to single-country firms because of their ability
to overcome the barriers to portfolio capital flows). The empirical
results of the study support the notion that U.S. investors are
attentive to international composition of the activities of U.S.-
based corporations.
    \546\ See V. Errunza and L. Senbet, International Corporate
Diversification, Market Valuation and Size-Adjusted Evidence,
Journal of Finance 34, 1984 at 727-745 (developing a model where
international corporate intermediation through direct foreign
investment can undo barriers to international capital flows faced by
individual investors and lead to a positive valuation effect
associated with the degree of international involvement). See also
R. Morck and B. Yeung, Why Investors Value Multinationality, Journal
of Business, 64 (2), 1991 at 165-187 (supporting the notion that
multinational corporations have intangible assets that can be used
internationally.)
    \547\ See D. Hirshleifer and S. Teoh, Limited Attention,
Information Disclosure, and Financial Reporting, Journal of
Accounting and Economics 36, 2003 at 337-386 (showing that with
partially attentive investors, means of presenting information may
have an impact on stock price reactions, mis-valuation, long-run
abnormal returns, and corporate decisions.)
    \548\ See Section VIII.B.
---------------------------------------------------------------------------

    Another example of an overlapping disclosure requirement that
involves incremental information is Item 303(b) of Regulation S-K.
Instruction 5 to Item 303(b) requires seasonality disclosures outside
of the financial statements in interim periods. U.S. GAAP similarly
requires seasonality disclosures, but this disclosure is required in
the notes to the

interim financial statements.\549\ Eliminating the specific seasonality
disclosure requirements in Item 303(b) may result in the removal of
this information from MD&A. Investors and other users will only have
this disclosure available in the notes to the financial statements,
unless issuers provide it in both locations either because the issuer
views the seasonality disclosure as appropriate or necessary to an
understanding of its business or financial condition under Item 303(a)
or the issuer provides it voluntarily. In addition, investors may
receive less supplemental forward-looking information about seasonality
because the PSLRA safe harbor is not available for such information
when it is disclosed in the notes to the financial statements. To the
extent that the seasonality disclosures in MD&A and in the financial
statements are redundant, eliminating the requirements in Item 303(b)
would reduce search costs and facilitate more efficient information
processing. In addition, to the extent an issuer spends less time
preparing its disclosures, investors will benefit from lower
preparation costs although savings could be modest, if any.\550\
---------------------------------------------------------------------------

    \549\ ASC 270-10-45-11 states: Revenues of certain entities are
subject to material seasonal variations. To avoid the possibility
that interim results with material seasonal variations may be taken
as fairly indicative of the estimated results for a full fiscal
year, such entities are required to disclose the seasonal nature of
their activities, and should consider supplementing their interim
reports with information for 12-month periods ended at the interim
date for the current and preceding years.
    \550\ See Section VIII.B.
---------------------------------------------------------------------------

    In addition to the economic effects of changing disclosure location
and bright line disclosure thresholds, potential costs to investors may
arise if U.S. GAAP were to change in such a way that information
previously required by Commission disclosure requirements is no longer
provided under U.S. GAAP. As noted above, the potential for such
changes may be mitigated by the FASB's transparent, public standard-
setting process and the Commission's oversight of the FASB.
b. Integration of Commission Disclosure Requirements
    We are amending and integrating certain Commission disclosure
requirements that overlap with, but require information incremental to,
other Commission disclosure requirements. In addition to the economic
effects of changing disclosure location and bright line disclosure
thresholds, integration of overlapping Commission disclosure
requirements simplifies issuer compliance efforts by reducing the
number of rules to consider and the extent of disclosures that need to
be provided. Integration of these requirements should also facilitate
more efficient information processing by investors.
    One example to illustrate the potential effects of the integration
of Commission disclosure requirements is Item 101(d)(4) of Regulation
S-K. Item 101(d)(4) requires, when interim financial statements are
presented, a discussion of the facts that indicate that the three-year
financial data for geographic performance may not be indicative of
current or future operations. This requirement is similar to
requirements in Instruction 3 to Item 303(a) of Regulation S-K and
Instruction 4 to Item 303(b) of Regulation S-K to identify elements of
income which are not necessarily indicative of the issuer's ongoing
business, except that there is no explicit reference to ``geographic
areas'' in the Item 303 instructions. To integrate the requirements
into one location in Regulation S-K, we are eliminating Item 101(d)(4)
and amending Item 303(a) to explicitly refer to ``geographic areas''
and clarify that the geographic discussion is required when management
believes such discussion would be appropriate to an understanding of
the business. A number of commenters supported the proposed
amendment.\551\ As noted above, integration of these requirements
should facilitate more efficient information processing by investors.
However, some investors may be adversely affected if they prefer
geographic performance information to be presented with other business
description disclosures.
---------------------------------------------------------------------------

    \551\ See, e.g., letters from CAQ; Deloitte; E&Y Grant; KPMG;
and PwC.
---------------------------------------------------------------------------

c. FASB Referral of Commission Disclosure Requirements
    We are referring certain Commission disclosure requirements that
overlap with, but require information incremental to, U.S. GAAP
requirements to the FASB for potential incorporation into U.S. GAAP.
While the referral alone has no direct impact on investors and issuers,
any future FASB standard-setting activities, as well as any Commission
rulemaking that may result from such a referral, could potentially
affect investors, issuers, auditors, other users of financial
statements, as well as other entities that report under U.S. GAAP. Any
potential effects of standard-setting activities arising out of these
referrals could be considered and taken into account by the Commission,
and could be addressed through Commission rulemaking. Additionally, the
potential effects may be mitigated by the FASB's transparent, public
standard-setting process and the Commission's oversight of the FASB.
3. Outdated Requirements
    We are eliminating certain outdated Commission disclosure
requirements that have become obsolete as a result of the passage of
time or changes in the regulatory, business, or technological
environment. Elimination of outdated disclosure requirements should
simplify issuer compliance efforts by reducing the number of rules to
consider and the extent of disclosures that need to be provided. In
some cases, the amendments require additional disclosure of information
to avoid any loss of information or decrease the burden for investors
to retrieve such information from other sources. Such information is
expected to be readily available at minimal to no cost to issuers.
    The effect of these amendments on investors depends on the use of
the information. If investors do not use the deleted information to
make investment and voting decisions, these amendments may have little
to no effect on investors, or the amendments may have a positive effect
on investors since elimination of such disclosures may reduce search
costs and facilitate more efficient information processing. This, in
turn, could enhance the allocative efficiency of the market and
facilitate capital formation. If the information is used by investors
but can be retrieved from alternative sources with little or no cost to
investors (e.g., share prices),\552\ the effects of these amendments on
investors should be minimal. In other cases where the information is
less readily available from alternative sources (e.g., average exchange
rates for each of the five most recent financial years and any
subsequent interim period),\553\ these amendments may make it more
burdensome for investors and other users to access the information,
with a potentially adverse effect on the cost of capital of issuers. We
do not expect these potential adverse effects to be significant as the
amendments delete only requirements that call for information that is
either no longer relevant or is readily available or can be derived
from alternative sources, and which may, in fact, be more robust than
the information currently required to be disclosed. As noted above,
some amendments require disclosure of additional information (e.g., the
issuer's

internet address, if available) to mitigate any loss of information or
decrease the burden for investors.
---------------------------------------------------------------------------

    \552\ Item 201(a)(1) of Regulation S-K.
    \553\ Item 3.A.3 of Form 20-F.
---------------------------------------------------------------------------

    One example of an outdated disclosure requirement is Item 201(a)(1)
of Regulation S-K. Item 201(a)(1) requires the disclosure of historical
market price information. We are substituting this disclosure with
disclosure of the issuer's ticker symbol, which can be used to obtain
current and historical information on stock price, among other
information. This additional disclosure may help reduce any loss of
information as well as facilitate access to additional information
while imposing minimal or no cost on issuers and saving them the
expense of disclosing information that is readily available in more up-
to-date form from alternative sources. Commenters were generally
supportive of this initiative to delete outdated requirements,\554\ and
specifically supported removing historical price information, noting
that stock price information is readily available on commercial
websites on a more current basis than what is required by existing
disclosure requirements.\555\
---------------------------------------------------------------------------

    \554\ See e.g., letters from CAQ; EEI and AGA; FedEx; R.G.
Associates; and XBRL US.
    \555\ See letters from E&Y EEI and AGA; FedEx; and KPMG.
---------------------------------------------------------------------------

4. Superseded Requirements
    We are amending certain Commission disclosure requirements to
address inconsistencies that have arisen between existing Commission
disclosure requirements and newer requirements, recent legislation, or
more recently updated U.S. GAAP requirements.
    Eliminating or amending superseded Commission disclosure
requirements may simplify issuer compliance efforts by resolving some
confusion for issuers. Where there are superseded requirements, issuers
may need to expend time and resources seeking advice from outside
professionals or guidance from Commission staff as to compliance with
such requirements. To the extent that, in practice, many issuers
already comply with the more recently adopted requirements, we expect
these benefits to be modest. In addition, investors may benefit from
the reduction in the variation of disclosure practices that could
result from confusion about the superseded requirements among issuers.
    One example of superseded disclosure is the requirement to report
the cumulative effect of a change in accounting principle in the income
statement, which the FASB eliminated from U.S. GAAP in 2005.\556\
Instead, U.S. GAAP now requires the cumulative effect of
retrospectively-applied changes in accounting principle to be reflected
in the opening balance of retained earnings for the earliest period
presented. The Commission disclosure requirements, by contrast,
continue to refer to a line on the income statement for a cumulative
effect of a change in accounting principle. Eliminating references to
the cumulative effect of a change in accounting principle in the income
statement in the Commission disclosure requirements resolves this
contradiction and removes any resulting issuer confusion.
---------------------------------------------------------------------------

    \556\ See SFAS No. 154, Accounting Changes and Error
Corrections. This is now reflected in ASC 250, Accounting Changes
and Error Corrections.
---------------------------------------------------------------------------

    As another example, Rule 10-01(b)(2) of Regulation S-X requires,
for interim periods, the presentation of dividends per share applicable
to common stock on the face of the income statement. These rules are
inconsistent with U.S. GAAP, which prohibits presentation of dividends
per share on the face of the income statement. We are deleting Rule 10-
01(b)(2) to conform to U.S. GAAP and simplify issuer compliance
efforts.
    In connection with this amendment and to avoid any loss of
disclosure, we are extending the annual disclosure requirement of
changes in stockholders' equity in Rule 3-04 of Regulation S-X to
interim periods, which also requires disclosure of the amount of
dividends per share for each class of shares, rather than only for
common stock. As suggested by a few commenters, the final amendments
clarify that Rule 3-04 requires both the year-to-date information and
subtotals for each interim period.\557\ Investors and other users may
benefit from the additional information on dividends per share for each
class of shares for interim periods. For example shareholders may use
dividends to value an issuer.\558\ Information about dividends also can
be material for debtholders.\559\ In addition, there may also be
different dividend preferences based on an investor's
characteristics.\560\
---------------------------------------------------------------------------

    \557\ See letters from CAQ and PwC.
    \558\ See M. Miller and F. Modigliani, Dividend Policy, Growth,
and the Valuation of Shares, Journal of Business 34 (4), 1961 at
411-433 (providing an early theory of the effects of dividend policy
on share price). See also, F. Black, The Dividend Puzzle, The
Journal of Portfolio Management 2(2), 1976 at 5-8 (discussing
reasons why firms pay dividends).
    \559\ See P. Healy and K. Palepu, Effectiveness of Accounting-
Based Dividend Covenants, Journal of Accounting and Economics 12,
1990 at 97-123 (examining the effectiveness of dividend covenants in
mitigating conflicts of interests between stockholders and
bondholders). See also, H. Fan and S. Sundaresan, Debt Valuation,
Renegotiation, and Optimal Dividend Policy, Review of Financial
Studies 13 (4), 2000 at 1057-1099 (developing a theoretical
framework for optimal dividend policy and capital structure).
    \560\ See R. Pettit, Taxes, Transactions Costs and the Clientele
Effect of Dividends, Journal of Financial Economics 5 (3), 1977 at
419-436 (showing that individuals' preferences for dividends are
influenced by their age and their tax rates on dividends and capital
gains).
---------------------------------------------------------------------------

    These amendments may give rise to Disclosure Location
Considerations, in that issuers will now disclose dividends either in
the changes in stockholders' equity statement or the notes to the
financial statements to comply with Regulation S-X instead of on the
face of the income statement.\561\ Disclosing information on dividends
issued and the relationship it has to stockholders' equity in one
location may help investors understand some of the strategic decisions
made by management, such as dividend payout versus share buyback. The
extension of the disclosure requirement in Rule 3-04 of Regulation S-X
may create some additional burden for issuers, including Regulation A
issuers,\562\ because it requires disclosure of dividends per share for
each class of shares, rather than only for common stock, and disclosure
of changes in stockholders' equity in interim periods. However, such
costs should be limited to the extent that the required information is
already available from the preparation of other aspects of the interim
financial statements. Disclosure of this additional information may
also lead to additional costs for issuers to comply with ICFR, audit,
and XBRL tagging requirements, as applicable.
---------------------------------------------------------------------------

    \561\ ASC 260-10-45-5 requires disclosure of dividends per share
in the notes to the financial statements.
    \562\ The amendments to require interim disclosure of changes in
stockholders' equity and dividends per share amounts are being made
directly to Forms 1-A and 1-SA for Regulation A issuers.
---------------------------------------------------------------------------

    In the Proposing Release, we requested comments about other
disclosure requirements that meet the criteria in any of the four
sections of the release. Based on commenter responses and further
internal review, we identified additional disclosure requirements that
contained typographical errors, incorrect references, or references to
rules that no longer exist. As a result, we are adopting additional
conforming amendments, the majority of which are in the superseded
category. These technical and conforming amendments should lower
disclosure costs for issuers.

C. Anticipated Effects on Efficiency, Competition, and Capital
Formation

    The rules may improve capital allocation efficiency by enabling

investors to make more efficient investment decisions. For example, the
rules may reduce search costs for investors by eliminating information
that is redundant, duplicative, overlapping, outdated, or superseded.
Given that investors may have limited attention and limited information
processing capabilities, elimination of such information may facilitate
more efficient investment decision-making. In addition, elimination of
these disclosure requirements may reduce issuer compliance costs and
encourage capital formation. The reduction in compliance costs might be
particularly beneficial for smaller and younger issuers that are
resource constrained. A more efficient and less costly disclosure
environment may make the public capital markets more competitive
relative to private capital market alternatives and may additionally
make the U.S. capital markets more competitive relative to markets in
other countries. Although it is difficult to quantify these effects, to
the extent that they are present, they may result in more public
capital market investment opportunities for investors.
    Eliminating information could result in increased information
asymmetries between issuers and investors. Such asymmetries may
increase the cost of capital, reduce capital formation, and hamper
efficient allocation of capital across companies. To the extent that
certain disclosure is no longer required, issuers for which this
disclosure would be unfavorable may be less likely to disclose such
information voluntarily. Even if other issuers do disclose such
information voluntarily, it will be difficult to estimate the relative
quality of issuers without every issuer's disclosure. This will make it
more difficult for higher quality issuers to distinguish their quality
with respect to this metric even with voluntary disclosures. Such
negative effects might be more pronounced among smaller and younger
issuers that suffer more from information asymmetries. Overall, though,
to the extent that we eliminate disclosure that we consider redundant,
duplicative, overlapping, outdated, or superseded, we do not think
these effects are likely to be significant.

D. Alternatives

    We considered reasonable alternatives to the amendments. For
redundant, duplicative, outdated, or superseded disclosure requirements
being eliminated, we considered the alternative of retaining these
requirements. However, as a general matter, given the nature of these
requirements, we believe retaining the requirements could result in
inefficiencies for investors, issuers, and others. For certain of the
disclosure requirements that we proposed to modify or delete, where
commenters indicated that the requirements may provide beneficial
incremental disclosures for investors and other users, we are retaining
the requirements and also are referring some of them to the FASB for
potential incorporation into U.S. GAAP.
    For overlapping disclosure requirements, we solicited comments in
the Proposing Release on certain requirements to determine whether to
retain, modify, eliminate, or refer them to the FASB for potential
incorporation into U.S. GAAP. After further consideration based on our
review of the issues and consideration of the comments received, we are
retaining all of the requirements discussed in Section III.D and
referring all except one to the FASB for potential incorporation.
    As an alternative to retaining these requirements, we could
eliminate the Commission requirements and refer them to the FASB. This
would deprive investors of any incremental disclosures elicited by the
Commission requirements pending the FASB's deliberations. If the
disclosure requirements are ultimately added to U.S. GAAP, some
information would be relocated from outside the financial statements to
within the financial statements, giving rise to Disclosure Location
Considerations, potentially impacting issuers, investors, and other
users.\563\ Another alternative to retaining these requirements is to
simply eliminate the Commission requirements and forgo disclosure of
the incremental information without FASB referral. Although such an
alternative would simplify issuer compliance efforts, it also may
result in less informed investment decisions and diminished investor
protections.
---------------------------------------------------------------------------

    \563\ Any future consideration of amendments to these
disclosures requirements will take into account the outcome of
standard-setting activities undertaken by the FASB.
---------------------------------------------------------------------------

VIII. Paperwork Reduction Act

A. Background

    Certain provisions of our rules and forms that would be affected by
the final amendments contain ``collection of information'' requirements
within the meaning of the Paperwork Reduction Act of 1995
(``PRA'').\564\ The Commission published a notice requesting comment on
the collection of information requirements in the Proposing Release and
has submitted these requirements to the Office of Management and Budget
(``OMB'') for review in accordance with the PRA.\565\ The titles for
the affected collections of information are:
---------------------------------------------------------------------------

    \564\ 44 U.S.C. 3501 et seq.
    \565\ 44 U.S.C. 3507(d) and 5 CFR 1320.11.

------------------------------------------------------------------------
                                                             OMB Control
                           Title                                 No.
------------------------------------------------------------------------
Regulation S-X \566\......................................     3235-0009
Regulation S-K............................................     3235-0071
Rule 405 of Regulation C..................................     3235-0074
Rule 436 of Regulation C..................................     3235-0074
Form S-1..................................................     3235-0065
Form S-3..................................................     3235-0073
Form S-11.................................................     3235-0067
Form S-4..................................................     3235-0324
Form F-1..................................................     3235-0258
Form F-3..................................................     3235-0256
Form F-4..................................................     3235-0325
Form F-6..................................................     3235-0292
Form F-7..................................................     3235-0383
Form F-8..................................................     3235-0378
Form F-10.................................................     3235-0380
Form F-80.................................................     3235-0404
Form SF-1.................................................     3235-0707
Form SF-3.................................................     3235-0690
Form 1-A..................................................     3235-0286
Form 1-K..................................................     3235-0720
Form 1-SA.................................................     3235-0721
Exchange Act Rule 10A-1...................................     3235-0468
Exchange Act Rule 12b-2...................................     3235-0062
Schedule 14A..............................................     3235-0059
Schedule 14C..............................................     3235-0057
Exchange Act Rule 15c3-1g.................................     3235-0200
Exchange Act Rule 17a-5 and Form X-17A-5..................     3235-0123
Exchange Act Rule 17a-12..................................     3235-0498
Exchange Act Rule 17h-1T..................................     3235-0410
Form 10...................................................     3235-0064
Form 20-F.................................................     3235-0288
Form 40-F.................................................     3235-0381
Form 10-Q.................................................     3235-0070
Form 10-K.................................................     3235-0063
Form 11-K.................................................     3235-0082
Form 10-D.................................................     3235-0604
Form N-5..................................................     3235-0169
Form N-1A.................................................     3235-0307
Form N-2..................................................     3235-0026
Form N-3..................................................     3235-0316
Form N-4..................................................     3235-0318
Form N-6..................................................     3235-0503
Form N-8B-2...............................................     3235-0186
------------------------------------------------------------------------

    The majority of these regulations, schedules, and forms were
adopted under the Securities Act, the Exchange Act, and/or the
Investment Company Act and set forth the disclosure requirements for
registration statements, periodic reports, and proxy and information
statements filed by issuers to help investors make informed investment
and voting decisions.

Certain other forms and reports are filed by broker-dealers, entities
regulated by the Investment Company Act and the Investment Advisers
Act, and NRSROs in connection with the Commission's oversight of such
entities.
---------------------------------------------------------------------------

    \566\ The paperwork burdens from Regulation S-X and Regulation
S-K are imposed through the forms that are subject to the disclosure
requirements in both regulations and are reflected in the analysis
of these forms. To avoid a Paperwork Reduction Act inventory
reflecting duplicative burdens, for administrative convenience we
estimate the burden imposed by Regulation S-X and Regulation S-K to
be a total of one hour for each regulation.
---------------------------------------------------------------------------

    These amendments are the result of the staff's ongoing evaluation
of our disclosure requirements \567\ and also are part of our efforts
to implement Title LXXII, Section 72002(2) of the FAST Act.
---------------------------------------------------------------------------

    \567\ See supra note 12.
---------------------------------------------------------------------------

    The hours and costs associated with preparing, filing, and sending
the schedules and forms constitute reporting and cost burdens imposed
by each collection of information. An agency may not conduct or
sponsor, and a person is not required to comply with, a collection of
information unless it displays a currently valid OMB control number.
Compliance with the information collections is mandatory. Responses to
the information collections are not kept confidential, and there is no
mandatory retention period for the information disclosed.

B. Summary of the Final Amendments

    As described in more detail above, we are adopting amendments to
certain of our disclosure requirements that have become redundant,
duplicative, overlapping, outdated, or superseded, in light of other
Commission disclosure requirements, U.S. GAAP, IFRS, or changes in the
information environment.
    By eliminating the redundancy, duplication, and overlap in current
Commission disclosure requirements, we are enabling respondents to
consider fewer rules and requirements in their compliance efforts even
as they are preparing a substantially similar level of disclosures. As
such, except for the amendment to eliminate the requirement to disclose
the ratio of earnings to fixed charges, which may result in a modest
decrease in the paperwork burden, we believe that the amendments to
eliminate these redundant, duplicative, and overlapping Commission
requirements would marginally reduce, if at all, respondents' overall
paperwork burden.
    Similarly, we expect that the amendments to eliminate outdated
requirements would marginally reduce the paperwork burden on
respondents by eliminating any efforts that were undertaken to prepare
these disclosures. With the exception of the amendments to require the
disclosure of an issuer's website address and the ticker symbol of
their common equity that is publicly traded, which will slightly
increase the paperwork burden, the remaining amendments related to
outdated requirements would have no change or only a modest reduction
in the paperwork burden when respondents are providing information in
response to Forms 10, 10-K, 20-F, S-1, and F-1.
    Finally, we believe that the amendments to update superseded
Commission disclosure requirements would marginally reduce, if at all,
respondents' paperwork burden, except for the extension of the
application of Rule 3-04 of Regulation S-X to interim period
disclosures,\568\ which we estimate will modestly increase the
paperwork burden. While the amendments eliminate any existing confusion
related to contradictory and inconsistent requirements, in many
instances, we believe respondents are currently not providing
information in response to the requirements that we are deleting.
Instead, we believe respondents provide information in response to U.S.
GAAP or other Commission disclosure requirements that have been updated
more recently, rather than the superseded requirement covered by the
amendments. As a result, we do not believe the majority of these
amendments would result in a change to respondents' overall paperwork
burden.
---------------------------------------------------------------------------

    \568\ The extension of Rule 3-04 of Regulation S-X addresses
both overlapping and superseded disclosure issues and is discussed
in both Sections III.C.16 and V.B.5 above.
---------------------------------------------------------------------------

    In light of the foregoing, our estimates for the paperwork burden
for a number of the collections of information have not changed. The
tables below therefore do not reflect any change in the paperwork
burden for the following collections of information: Rules 405 and 436
of Regulation C and Forms F-6, F-7, F-8, F-10, F-80, 1-K under the
Securities Act; Exchange Rules 10A-1, 12b-2, 15c3-1g, 17a-5, 17h-1T and
Forms 40-F, 11-K, 10-D, X-17A-5 under the Exchange Act; Forms N-5, N-
1A, N-2, N-3, N-4, N-6, N-8B-2 under the Investment Company Act; and
Schedules 14A and 14C under the Exchange Act.

C. Summary of Comment Letters and Revisions to Proposals

    In the Proposing Release, we requested comment on our PRA burden
hour and cost estimates and the analysis used to derive such estimates.
We did not receive any comments that addressed our PRA analysis of the
proposed amendments.
    We did make some changes to the proposed amendments as a result of
comments received, but we do not expect any of those changes to affect
the compliance burdens of the existing collections of information, and
therefore we are not revising our PRA burden hour and cost estimates as
a result of these changes.

D. Burden and Cost Estimates

    As noted above, we do not believe that the overwhelming majority of
the amendments will result in a change to respondents' overall
paperwork burden. In this subsection we discuss the few amendments that
will result in a change to respondents' overall paperwork burden.
1. Forms 10, 10-K, 10-Q, 20-F, and 1-SA
    We anticipate that the amendments to eliminate the requirement to
disclose the market prices for an issuer's common equity for the two
most recent fiscal years will modestly reduce affected issuers' current
paperwork burdens. We estimate that issuers currently expend an average
of two hours internally preparing the market price disclosure for
inclusion in their Forms 10-K and 20-F. As such, we estimate that
affected issuers would experience a two hour reduction in their annual
paperwork burden.\569\ We also estimate that there are 8,862 annual
responses made in connection with Forms 10-K and 20-F. The table below
illustrates the overall impact on respondents filing Forms 10-K and 20-
F as a result of these amendments.
---------------------------------------------------------------------------

    \569\ In the Proposing Release we included estimates for the
minimal paperwork burden increase associated with the proposed
amendments to require disclosure of an issuer's ticker symbol and
internet address. Upon further consideration, we are not making a
separate burden adjustment for these two amendments. We believe the
burdens for these amendments will be mostly incurred upon initial
disclosure and not in subsequent periods. In addition, any increases
in burden associated with the disclosure of the ticker symbol and
internet address would be fully offset by the reduction in burden
associated with the elimination of two years' worth of market price
disclosure. Accordingly, we believe the two-hour reduction in burden
hours associated with the elimination of the market price disclosure
requirement will encompass the combined effect of these related
changes.

                                                     Table 1
----------------------------------------------------------------------------------------------------------------
                                                                 Reduction in        Total
                                                 Number of       incremental      incremental        Internal
                                                 responses      burden hours/     burden hours     company time
                                                                     form          reduction        reduction
                                                          (A)              (B)  (C) = (A) * (B)        (D) = (C)
----------------------------------------------------------------------------------------------------------------
Form 10-K...................................            8,137              (2)         (16,274)         (16,274)
Form 20-F...................................              725              (2)          (1,450)          (1,450)
----------------------------------------------------------------------------------------------------------------

    The amendments will extend to interim periods the requirements
under Rule 3-04 of Regulation S-X to disclose changes in stockholders'
equity and dividends per share for each class of shares, rather than
only for common stock. Prior to these amendments, these disclosures
were not required for interim periods. While this creates a new
disclosure requirement for respondents, the information being required
is generally readily available from respondents' preparation of other
aspects of the interim financial statements. As a result, we estimate
that this amendment will increase the average paperwork burdens by 0.5
hours each time such disclosure is required.\570\ We also estimate that
there are 23,159 annual responses in connection with Forms 10, 10-Q,
and 1-SA. The table below illustrates the overall impact on respondents
filing Forms 10, 10-Q, and 1-SA as a result of the proposed application
of Rule 3-04 to interim period disclosures.\571\
---------------------------------------------------------------------------

    \570\ As Form 10-Q is filed for the first three quarters of an
issuer's fiscal year, the annual burden increase is estimated to be
1.5 hours annually. As such, there is no increase to the paperwork
burdens associated with preparing annual reports filed on Forms 10-K
or 20-F. However, for registration statements filed on Form 10s and
20-F, to the extent that interim period disclosures are made, the
issuer would experience an increase in paperwork burden.
    \571\ While this amendment will not impact foreign private
issuers that file a Form 20-F as an annual report, it may impact
those that file the form to register a class of securities when they
would be required to provide interim period disclosures. However,
the staff has observed that this occurs so infrequently that we
estimate no change in the burden estimate for Form 20-F.

                                                     Table 2
----------------------------------------------------------------------------------------------------------------
                                                                 Increase in         Total
                                                 Number of       incremental      incremental        Internal
                                                 responses      burden hours/     burden hours     company time
                                                                     form           increase         increase
                                                          (A)              (B)  (C) = (A) * (B)        (D) = (C)
----------------------------------------------------------------------------------------------------------------
Form 10.....................................              216              0.5              108              108
Form 10-Q...................................           22,907              0.5         11,453.5         11,453.5
Form 1-SA...................................               36              0.5               18               18
----------------------------------------------------------------------------------------------------------------

2. Forms S-1, S-3, S-4, S-11, SF-1, SF-3, F-1, F-3, F-4, and 1-A
    We anticipate that the amendments to eliminate the market prices
disclosure will have the same paperwork burden reduction for Forms S-1,
S-4, S-11, F-1, and F-4 as for Forms 10-K and 20-F.\572\ As such, we
estimate that there will be a corresponding reduction in the burden
estimate for these forms.\573\ We estimate that there are approximately
1,618 annual responses made in connection with the referenced forms.
The table below illustrates the overall impact on respondents filing
the referenced forms as a result of these amendments.
---------------------------------------------------------------------------

    \572\ The information subject to the amendments discussed in
this paragraph is incorporated by reference into Forms S-3 and F-3
and not provided in direct response to a form item requirement. As
such, the amendments do not affect the paperwork burdens associated
with Forms S-3 and F-3.
    \573\ See supra note 570.

                                                     Table 3
----------------------------------------------------------------------------------------------------------------
                                                                 Reduction in        Total
                                                 Number of       incremental      incremental        Internal
                                                 responses      burden  hours/    burden hours     company time
                                                                     form          reduction        reduction
                                                          (A)              (B)  (C) = (A) * (B)        (D) = (C)
----------------------------------------------------------------------------------------------------------------
Form S-1....................................              901              (2)          (1,802)          (1,802)
Form S-4....................................              551              (2)          (1,102)          (1,102)
Form S-11...................................               64              (2)            (128)            (128)
Form F-1....................................               63              (2)            (126)            (126)
Form F-4....................................               39              (2)             (78)             (78)
----------------------------------------------------------------------------------------------------------------

    The amendments to extend Rule 3-04 of Regulation S-X to interim
periods will also impact the paperwork burdens of registration
statements filed on Forms 1-A, S-1, S-4, S-11, F-1, and F-4 because
such forms require interim period financial disclosures, when
applicable.\574\ We believe that the

estimated burden increase of 0.5 hours discussed above similarly
applies to the referenced registration statements. We estimate that
there are approximately 1,730 annual responses made in connection with
the referenced forms. The table below illustrates the overall impact on
respondents filing the referenced forms as a result of these
amendments.
---------------------------------------------------------------------------

    \574\ Filers of the referenced forms may have to provide interim
period financial disclosures in order to comply with Rule 3-12 of
Regulation S-X. While the timing of the effectiveness of the
registration statement or qualification of the offering statement
may not trigger the requirement for interim period financial
disclosure, we have used the full population of responses for our
estimate to be conservative.

----------------------------------------------------------------------------------------------------------------
                                                                 Increase in         Total
                                                 Number of       incremental      incremental        Internal
                                                 responses      burden  hours/    burden hours     company time
                                                                     form           increase         increase
                                                          (A)              (B)  (C) = (A) * (B)        (D) = (C)
----------------------------------------------------------------------------------------------------------------
Form S-1....................................              901              0.5            450.5            450.5
Form S-4....................................              551              0.5            275.5            275.5
Form S-11...................................               64              0.5               32               32
Form F-1....................................               63              0.5             31.5             31.5
Form F-4....................................               39              0.5             19.5             19.5
Form 1-A....................................              112              0.5               56               56
----------------------------------------------------------------------------------------------------------------

    The amendment to eliminate the requirements to disclose the ratio
of earnings to fixed charges, when an issuer registers debt securities,
and the ratio of combined fixed charges and preference dividends to
earnings, when an issuer registers preference securities, will reduce
the current paperwork burden for issuers registering such securities on
Forms S-1, S-3, S-4, S-11, F-1, F-3 and F-4. Depending on the size and
complexity of the issuer, the paperwork burden associated with
preparing this information for inclusion in the aforementioned
registration statements can vary greatly. We estimate that issuers
expend an average of four hours preparing this disclosure for inclusion
in their registration statements. For the purposes of this analysis, we
assume that the ratio is prepared internally, and we have estimated
that there are approximately 1,722 annual responses made in connection
with the referenced forms. Based on this average, the table below
illustrates the overall impact on respondents filing the referenced
forms as a result of the amendments.

----------------------------------------------------------------------------------------------------------------
                                                                 Reduction in        Total
                                                 Number of       incremental      incremental        Internal
                                                 responses      burden  hours/    burden hours    company  time
                                                                     form          reduction        reduction
                                                    (A) \575\              (B)  (C) = (A) * (B)        (D) = (C)
----------------------------------------------------------------------------------------------------------------
Form S-1....................................              450              (4)          (1,800)          (1,800)
Form S-3....................................              800              (4)          (3,200)          (3,200)
Form S-4....................................              300              (4)          (1,200)          (1,200)
Form S-11...................................               32              (4)            (128)            (128)
Form F-1....................................               32              (4)            (128)            (128)
Form F-3....................................               78              (4)            (312)            (312)
Form F-4....................................               30              (4)            (120)            (120)
----------------------------------------------------------------------------------------------------------------

IX. Final Regulatory Flexibility Act Analysis

    This Final Regulatory Flexibility Analysis (``FRFA'') has been
prepared in accordance with the Regulatory Flexibility Act
(``RFA'').\576\ This FRFA relates to final amendments that will
eliminate certain Commission disclosure requirements that have become
redundant, duplicative, overlapping, outdated, or superseded, in light
of other Commission disclosure requirements, U.S. GAAP, IFRS, or
changes in the information environment. These amendments are the result
of the staff's ongoing evaluation of our disclosure requirements \577\
and also are part of our efforts to implement Title LXXII, Section
72002(2) of the FAST Act.
---------------------------------------------------------------------------

    \575\ The portion of registration statements filed on each
referenced form that actually registers debt or preference
securities varies from year to year. As a result, the numbers in
this column are based on staff estimates using data samples obtained
from EDGAR.
    \576\ 5 U.S.C. 601 et seq.
    \577\ See supra note 12.
---------------------------------------------------------------------------

A. Need for, and Objectives of, the Amendments

    The main purpose of the amendments is to update and simplify the
Commission's current disclosure requirements. Specifically, the
amendments will:
     Eliminate certain Commission disclosure requirements that
are redundant or duplicative of requirements in U.S. GAAP, IFRS, or
other Commission disclosure requirements.
     Streamline certain overlapping Commission disclosure
requirements by deleting or integrating provisions that address
disclosure topics covered elsewhere in our rules or regulations.
     Revise certain Commission disclosure requirements that are
outdated.
     Revise certain superseded Commission disclosure
requirements to update and conform these provisions with recent
legislation, more recently updated Commission disclosure requirements,
or more recently updated U.S. GAAP requirements.
    The need for, and objectives of, the final amendments are discussed
in more detail throughout this release, particularly in Section I,
above.

B. Significant Issues Raised by Public Comments

    In the Proposing Release we requested comment on any aspect of the
Initial Regulatory Flexibility Analysis (``IRFA''), including the
number of small entities that would be affected by the proposed
amendments, the nature of the impact, how to quantify the number of
small entities that would be affected, and how to quantify the impact
of the proposed amendments. We did not receive comments specifically
addressing the IRFA or the proposed amendments' impact on small
entities.

C. Small Entities Subject to the Amendments

    The amendments will affect some small entities that file
registration statements under the Securities Act, the Exchange Act, and
the Investment Company Act and periodic reports, proxy and information
statements, or other reports under the Exchange Act and the Investment
Company Act. In addition, the amendments will affect some small
entities that are not reporting companies and that issue securities
under Regulation A exemption. The RFA defines ``small entity'' to mean
``small business,'' ``small organization,'' or ``small governmental
jurisdiction.'' \578\
---------------------------------------------------------------------------

    \578\ 5 U.S.C. 601(6).
---------------------------------------------------------------------------

    For purposes of the RFA, under 17 CFR 230.157 (``Securities Act
Rule 157''), an issuer, other than an investment company, is a ``small
business'' or ``small organization'' if it had total assets of $5
million or less on the last day of its most recent fiscal year and is
engaged or proposing to engage in an offering of securities not
exceeding $5 million. Under 17 CFR 240.0-10(a) (``Exchange Act Rule 0-
10(a)''), an issuer, other than an investment company, is a ``small
business'' or ``small organization'' if it had total assets of $5
million or less on the last day of its most recent fiscal year. In
total, we estimate that there are approximately 1,233 issuers, other
than investment companies, that may be considered small entities and
will be subject to the amendments.\579\
---------------------------------------------------------------------------

    \579\ This estimate includes 1,163 reporting companies and 70
Regulation A issuers estimated to be small entities (1,233 = 1,163 +
70). The reporting company small entity estimate is based on staff
analysis of XBRL data submitted by filers, other than co-
registrants, with EDGAR filings of Forms 10-K, 20-F, and 40-F and
amendments filed during the calendar year 2017. The Regulation A
small entity estimate is based on staff analysis of Form 1-A data
from EDGAR filings of Forms 1-A qualified during the calendar year
2017, excluding issuers in subsequently withdrawn offerings and
issuers that became reporting companies during the calendar year
2017.
---------------------------------------------------------------------------

    An investment company, including a business development company, is
considered to be a ``small business,'' for the purposes of the RFA, if
it, together with other investment companies in the same group of
related investment companies, has net assets of $50 million or less as
of the end of its most recent fiscal year.\580\ We estimate that there
are approximately 112 investment companies, including 18 business
development companies, that will be subject to the amendments that may
be considered small entities.\581\
---------------------------------------------------------------------------

    \580\ See 17 CFR 270.0-10(a).
    \581\ The estimate of small investment companies is derived from
an analysis of data obtained from Morningstar Direct as well as data
reported on Forms N-SAR filed with the Commission for the period
ending December 31, 2017. The number of small business development
companies is derived from data obtained from Forms 10-K and Forms
10-Q for reporting periods ended in the last quarter of 2017,
adjusted by the number of active business development companies that
do not submit such filings and late filers.
---------------------------------------------------------------------------

    For the purposes of the RFA, an investment adviser generally is a
small entity if it: (1) Has assets under management having a total
value of less than $25 million; (2) did not have total assets of $5
million or more on the last day of the most recent fiscal year; and (3)
does not control, is not controlled by, and is not under common control
with another investment adviser that has assets under management of $25
million or more, or any person (other than a natural person) that had
total assets of $5 million or more on the last day of its most recent
fiscal year.\582\ We estimate that there are approximately 447
investment advisers that will be subject to the amendments that may be
considered small entities.\583\
---------------------------------------------------------------------------

    \582\ See 17 CFR 275.0-7.
    \583\ The estimate is based on SEC-registered investment adviser
responses to Items 5.F. and 12 of Form ADV.
---------------------------------------------------------------------------

    For the purposes of the RFA, a broker-dealer is considered to be a
``small business'' if its total capital (net worth plus subordinated
liabilities) is less than $500,000 on the date in the prior fiscal year
as of which its audited financial statements were prepared pursuant to
Rule 17a-5(d) under the Exchange Act,\584\ or, if not required to file
such statements, a broker-dealer with total capital (net worth plus
subordinated liabilities) of less than $500,000 on the last day of the
preceding fiscal year (or in the time that it has been in business, if
shorter); and that is not affiliated with any person (other than a
natural person) that is not a small business or small
organization.\585\ We estimate there are approximately 1,042 broker-
dealers that may be considered small entities. Of these, nine were Part
II filers and 1,033 were Part IIA filers.\586\
---------------------------------------------------------------------------

    \584\ See 17 CFR 240.17a-5(d).
    \585\ See 17 CFR 240.0-10(c).
    \586\ This estimate is based on the FOCUS Reports, or
``Financial and Operational Combined Uniform Single'' Reports, which
broker-dealers are generally required to file with the Commission
and/or SROs pursuant to Exchange Act Rule 17a-5. The estimate is
based on the FOCUS Reports data as of December 31, 2017. The
information on Part IIB and Part III filers are not available from
this data source.
---------------------------------------------------------------------------

    The Commission has previously stated, and we continue to believe,
that an NRSRO with total assets of $5 million or less would qualify as
a ``small'' entity for purposes of the RFA.\587\ Currently, there are
10 NRSROs and, based on their most recently filed annual reports
pursuant to Rule 17g-3, two NRSROs are small entities under the above
definition and will be subject to the amendments.
---------------------------------------------------------------------------

    \587\ See, e.g., Final Rules: Nationally Recognized Statistical
Rating Organizations, Release No. 34-72936 (Aug. 27, 2014) [79 FR
55077 (Sep. 15, 2014)].
---------------------------------------------------------------------------

D. Projected Reporting, Recordkeeping, and Other Compliance
Requirements

    As noted above, the final amendments update and simplify the
Commission's disclosure requirements and do not impose any significant
new disclosure obligations. While there are no particular professional
skills that are required to comply with the amendments, the
professional skills necessary for complying with an issuer's disclosure
obligations as a whole may include legal, accounting, or information
technology skills. As adopted, the amendments address requirements that
have become redundant, duplicative, overlapping, outdated, or
superseded in light of other Commission disclosure requirements, U.S.
GAAP, IFRS, or changes in the information environment. We expect these
amendments to reduce slightly the existing reporting, recordkeeping,
and other compliance burdens for all issuers, including small entities.
    The amendments are discussed in detail in Sections II, III, IV, and
V, above. We discuss the economic impact, including the estimated
compliance costs and burdens, of the amendments in Section VII
(Economic Analysis) and Section VIII (Paperwork Reduction Act) above.

E. Agency Action To Minimize Effect on Small Entities

    The Regulatory Flexibility Act directs us to consider alternatives
that would accomplish our stated objectives, while minimizing any
significant adverse impact on small entities. In connection with the
final amendments, we considered the following alternatives: (1)
Establishing different compliance or

reporting requirements or timetables that take into account the
resources available to small entities; (2) clarifying, consolidating,
or simplifying compliance and reporting requirements for small
entities; (3) using performance rather than design standards; and (4)
exempting small entities from coverage of all or part of the proposed
amendments.
    With respect to clarification, consolidation, and simplification of
compliance and reporting requirements for small entities, the
amendments do not impose any significant new disclosure obligations,
and they reduce other disclosure obligations. As noted above, the
amendments address certain of our disclosure requirements that have
become redundant, duplicative, overlapping, outdated, or superseded, in
light of other Commission disclosure requirements, U.S. GAAP, IFRS, or
changes in the information environment. The amendments will clarify,
consolidate, and simplify compliance for all issuers, including small
entities.
    For similar reasons, we do not believe it is necessary, and indeed
would be contrary to the stated objectives of the amendments, to
establish different compliance or reporting requirements or timetables
or to exempt small entities from all or part of the amendments.\588\
The Commission's existing disclosure requirements provide for scaled
disclosure requirements and other accommodations for SRCs and EGCs, and
the amendments would not alter these existing accommodations.
---------------------------------------------------------------------------

    \588\ The amendment discussed in Section V.B.2 that extends the
disclosure requirement in Rule 3-04 of Regulation S-X to interim
periods will apply to all issuers, including small entities. As the
required information would be readily available from the preparation
of the interim financial statements, the Commission expects the
additional burdens to be limited. The new disclosure would better
facilitate investor understanding of stockholders' equity, as
dividends are distributed from stockholders' equity. As such, we do
not believe it is necessary to scale this specific amendment for
small entities.
---------------------------------------------------------------------------

    Finally, with respect to use of performance rather than design
standards, the amendments to eliminate certain prescriptive Commission
rules that call for information that overlaps with information required
by U.S. GAAP or revise certain prescriptive rules to streamline our
disclosure requirements may result in issuers, including small
entities, being provided with additional flexibility when preparing
their disclosures. For instance, existing Rule 4-08(e)(3) requires
disclosure of dividend restrictions and related disclosures when
restricted net assets exceed 25 percent. As amended, the rule will
require such disclosure when it is material and not based on a bright
line threshold. While not all amendments use performance standards,
many would have a similar effect--namely, to provide issuers, including
small entities, with additional flexibility to present more tailored
disclosures without meaningfully reducing the total mix of information
provided to investors.

X. Statutory Authority

    The amendments contained in this document are being adopted under
the authority set forth in Sections 7, 10, 19(a), and 28 of the
Securities Act, Sections 3(b), 12, 13, 15, 23(a), and 36 of the
Exchange Act, Sections 8, 24(a), 24(g), 30, and 38 of the Investment
Company Act, and Title LXXII, Section 72002(2) of the FAST Act.

Text of the Final Amendments

List of Subjects

17 CFR Part 210

    Accountants, Accounting, Banks, Banking, Employee benefit plans,
Holding companies, Insurance companies, Investment companies, Oil and
gas exploration, Reporting and recordkeeping requirements, Securities,
Utilities.

17 CFR Part 229

    Reporting and recordkeeping requirements, Securities.

17 CFR Part 230

    Investment companies, Reporting and recordkeeping requirements,
Securities.

17 CFR Part 239

    Reporting and recordkeeping requirements, Securities.

17 CFR Part 240

    Brokers, Fraud, Reporting and recordkeeping requirements,
Securities.

17 CFR Part 249

    Brokers, Reporting and recordkeeping requirements, Securities.

17 CFR Part 274

    Investment companies, Reporting and recordkeeping requirements,
Securities.

    For the reasons stated in the preamble, the Commission is amending
Title 17, Chapter II, of the Code of the Federal Regulations as
follows:

PART 210--FORM AND CONTENT OF AND REQUIREMENTS FOR FINANCIAL
STATEMENTS, SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF
1934, INVESTMENT COMPANY ACT OF 1940, INVESTMENT ADVISERS ACT OF
1940, AND ENERGY POLICY AND CONSERVATION ACT OF 1975

0
1. The authority citation for part 210 continues to read as follows:

    Authority:  15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3,
77aa(25), 77aa(26), 77nn(25), 77nn(26), 78c, 78j-1, 78l, 78m, 78n,
78o(d), 78q, 78u-5, 78w, 78ll, 78mm, 80a-8, 80a-20, 80a-29, 80a-30,
80a-31, 80a-37(a), 80b-3, 80b-11, 7202 and 7262, and sec. 102(c),
Pub L. 112-106, 126 Stat. 310 (2012), unless otherwise noted.

0
2. Amend Sec.  210.1-02 by:
0
a. Revising paragraphs (d) and (w)(3);
0
b. Redesignating the Computational note as Computational note 1 to
paragraph (w)(3);
0
c. Revising paragraph 2 of the newly redesignated Computational note 1
to paragraph (w)(3);
0
d. Revising paragraph (bb)(1)(ii); and
0
e. Adding paragraphs (cc) and (dd).
    The revisions and additions read as follows:

Sec.  210.1-02  Definitions of terms used in Regulation S-X (17 CFR
part 210).

* * * * *
    (d) Audit (or examination). The term audit (or examination), when
used in regard to financial statements of issuers as defined by Section
2(a)(7) of the Sarbanes-Oxley Act of 2002, means an examination of the
financial statements by an independent accountant in accordance with
the standards of the Public Company Accounting Oversight Board (United
States) (``PCAOB'') for the purpose of expressing an opinion thereon.
When used in regard to financial statements of entities that are not
issuers as defined by Section 2(a)(7) of the Sarbanes-Oxley Act of
2002, the term means an examination of the financial statements by an
independent accountant in accordance with either the standards of the
PCAOB or U.S. generally accepted auditing standards (``U.S. GAAS'') as
specified or permitted in the regulations and forms applicable to those
entities for the purpose of expressing an opinion thereon. The
standards of the PCAOB and U.S. GAAS may be modified or supplemented by
the Commission.
* * * * *
    (w) * * *
    (3) The registrant's and its other subsidiaries' equity in the
income from continuing operations before income taxes of the subsidiary
exclusive of amounts attributable to any

noncontrolling interests exceeds 10 percent of such income of the
registrant and its subsidiaries consolidated for the most recently
completed fiscal year.

    Note to paragraph (w):  * * *

    Computational note 1 to paragraph (w)(3):  * * *

* * * * *
    2. If income of the registrant and its subsidiaries consolidated
exclusive of amounts attributable to any noncontrolling interests for
the most recent fiscal year is at least 10 percent lower than the
average of the income for the last five fiscal years, such average
income should be substituted for purposes of the computation. Any loss
years should be omitted for purposes of computing average income.
* * * * *
    (bb) * * *
    (1) * * *
    (ii) Net sales or gross revenues, gross profit (or, alternatively,
costs and expenses applicable to net sales or gross revenues), income
or loss from continuing operations, net income or loss, and net income
or loss attributable to the entity (for specialized industries, other
information may be substituted for sales and related costs and expenses
if necessary for a more meaningful presentation); and
* * * * *
    (cc) Statement(s) of comprehensive income. The term statement(s) of
comprehensive income means a financial statement that includes all
changes in equity during a period except those resulting from
investments by owners and distributions to owners. Comprehensive income
comprises all components of net income and all components of other
comprehensive income. The statement of comprehensive income may be
presented either in a single continuous financial statement or in two
separate but consecutive financial statements. A statement(s) of
operations or variations thereof may be used in place of a statement(s)
of comprehensive income if there was no other comprehensive income
during the period(s).
    (dd) Restricted net assets. The term restricted net assets shall
mean that amount of the registrant's proportionate share of net assets
of consolidated subsidiaries (after intercompany eliminations) which as
of the end of the most recent fiscal year may not be transferred to the
parent company by subsidiaries in the form of loans, advances or cash
dividends without the consent of a third party (i.e., lender,
regulatory agency, foreign government, etc.). Not all limitations on
transferability of assets are considered to be restrictions for
purposes of this rule, which considers only specific third party
restrictions on the ability of subsidiaries to transfer funds outside
of the entity. For example, the presence of subsidiary debt which is
secured by certain of the subsidiary's assets does not constitute a
restriction under this rule. However, if there are any loan provisions
prohibiting dividend payments, loans or advances to the parent by a
subsidiary, these are considered restrictions for purposes of computing
restricted net assets. When a loan agreement requires that a subsidiary
maintain certain working capital, net tangible asset, or net asset
levels, or where formal compensating arrangements exist, there is
considered to be a restriction under the rule because the lender's
intent is normally to preclude the transfer by dividend or otherwise of
funds to the parent company. Similarly, a provision which requires that
a subsidiary reinvest all of its earnings is a restriction, since this
precludes loans, advances or dividends in the amount of such
undistributed earnings by the entity. Where restrictions on the amount
of funds which may be loaned or advanced differ from the amount
restricted as to transfer in the form of cash dividends, the amount
least restrictive to the subsidiary shall be used. Redeemable preferred
stocks (Sec.  210.5-02.27) and noncontrolling interests shall be
deducted in computing net assets for purposes of this test.

0
3. Amend Sec.  210.2-01 by revising paragraph (f)(7)(ii)(B) to read as
follows:

Sec.  210.2-01  Qualifications of accountants.

* * * * *
    (f) * * *
    (7) * * *
    (ii) * * *
    (B) The partner conducting a quality review under applicable
professional standards and any applicable rules of the Commission to
evaluate the significant judgments and the related conclusions reached
in forming the overall conclusion on the audit or review engagement
(``Engagement Quality Reviewer'' or ``Engagement Quality Control
Reviewer'');
* * * * *

0
4. Amend Sec.  210.2-02 by revising paragraph (b)(1) to read as
follows:

Sec.  210.2-02  Accountants' reports and attestation reports.

* * * * *
    (b) * * *
    (1) Shall state the applicable professional standards under which
the audit was conducted; and
* * * * *

0
5. Amend Sec.  210.3-01 by revising paragraphs (c)(2) and (3) to read
as follows:

Sec.  210.3-01  Consolidated balance sheets.

* * * * *
    (c) * * *
    (2) For the most recent fiscal year for which audited financial
statements are not yet available the registrant reasonably and in good
faith expects to report income attributable to the registrant, after
taxes; and
    (3) For at least one of the two fiscal years immediately preceding
the most recent fiscal year the registrant reported income attributable
to the registrant, after taxes.
* * * * *

0
6. Amend Sec.  210.3-02 by revising the section heading and paragraphs
(a) and (b) to read as follows:

Sec.  210.3-02  Consolidated statements of comprehensive income and
cash flows.

    (a) There shall be filed, for the registrant and its subsidiaries
consolidated and for its predecessors, audited statements of
comprehensive income and cash flows for each of the three fiscal years
preceding the date of the most recent audited balance sheet being filed
or such shorter period as the registrant (including predecessors) has
been in existence. A registrant that is an emerging growth company, as
defined in Sec.  230.405 of this chapter (Rule 405 of the Securities
Act) or Sec.  240.12b-2 of this chapter (Rule 12b-2 of the Exchange
Act), may, in a Securities Act registration statement for the initial
public offering of the emerging growth company's equity securities,
provide audited statements of comprehensive income and cash flows for
each of the two fiscal years preceding the date of the most recent
audited balance sheet (or such shorter period as the registrant has
been in existence).
    (b) In addition, for any interim period between the latest audited
balance sheet and the date of the most recent interim balance sheet
being filed, and for the corresponding period of the preceding fiscal
year, statements of comprehensive income and cash flows shall be
provided. Such interim financial statements may be unaudited and need
not be presented in greater detail than is required by Sec.  210.10-01.
* * * * *

0
7. Amend Sec.  210.3-03 by
0
a. Revising the section heading and paragraphs (b) and (d); and

0
b. Removing paragraph (e).
    The revisions read as follows:

Sec.  210.3-03  Instructions to statement of comprehensive income
requirements.

* * * * *
    (b) If the registrant is engaged primarily--
    (1) In the generation, transmission or distribution of electricity,
the manufacture, mixing, transmission or distribution of gas, the
supplying or distribution of water, or the furnishing of telephone or
telegraph service; or
    (2) In holding securities of companies engaged in such businesses,
it may at its option include statements of comprehensive income and
cash flows (which may be unaudited) for the twelve-month period ending
on the date of the most recent balance sheet being filed, in lieu of
the statements of comprehensive income and cash flows for the interim
periods specified.
* * * * *
    (d) Any unaudited interim financial statements furnished shall
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim periods
presented. A statement to that effect shall be included. If all such
adjustments are of a normal recurring nature, a statement to that
effect shall be made; otherwise, there shall be furnished information
describing in appropriate detail the nature and amount of any
adjustments other than normal recurring adjustments entering into the
determination of the results shown.

0
8. Revise Sec.  210.3-04 to read as follows:

Sec.  210.3-04  Changes in stockholders' equity and noncontrolling
interests.

    An analysis of the changes in each caption of stockholders' equity
and noncontrolling interests presented in the balance sheets shall be
given in a note or separate statement. This analysis shall be presented
in the form of a reconciliation of the beginning balance to the ending
balance for each period for which a statement of comprehensive income
is required to be filed with all significant reconciling items
described by appropriate captions with contributions from and
distributions to owners shown separately. Also, state separately the
adjustments to the balance at the beginning of the earliest period
presented for items which were retroactively applied to periods prior
to that period. With respect to any dividends, state the amount per
share and in the aggregate for each class of shares. Provide a separate
schedule in the notes to the financial statements that shows the
effects of any changes in the registrant's ownership interest in a
subsidiary on the equity attributable to the registrant.

0
9. Amend Sec.  210.3-05 by revising paragraph (b)(4)(iii) to read as
follows:

Sec.  210.3-05  Financial statements of businesses acquired or to be
acquired.

* * * * *
    (b) * * *
    (4) * * *
    (iii) Separate financial statements of the acquired business need
not be presented once the operating results of the acquired business
have been reflected in the audited consolidated financial statements of
the registrant for a complete fiscal year unless such financial
statements have not been previously filed or unless the acquired
business is of such significance to the registrant that omission of
such financial statements would materially impair an investor's ability
to understand the historical financial results of the registrant. For
example, if, at the date of acquisition, the acquired business met at
least one of the conditions in the definition of significant subsidiary
in Sec.  210.1-02 at the 80 percent level, the statements of
comprehensive income of the acquired business should normally continue
to be furnished for such periods prior to the purchase as may be
necessary when added to the time for which audited statements of
comprehensive income after the purchase are filed to cover the
equivalent of the period specified in Sec.  210.3-02.
* * * * *

0
10. Amend Sec.  210.3-12 by revising paragraph (a) to read as follows:

Sec.  210.3-12  Age of financial statements at effective date of
registration statement or at mailing date of proxy statement.

    (a) If the financial statements in a filing are as of a date the
number of days specified in paragraph (g) of this section or more
before the date the filing is expected to become effective, or proposed
mailing date in the case of a proxy statement, the financial statements
shall be updated, except as specified in the following paragraphs, with
a balance sheet as of an interim date within the number of days
specified in paragraph (g) of this section and with statements of
comprehensive income and cash flows for the interim period between the
end of the most recent fiscal year and the date of the interim balance
sheet provided and for the corresponding period of the preceding fiscal
year. Such interim financial statements may be unaudited and need not
be presented in greater detail than is required by Sec.  210.10-01.
Notwithstanding the above requirements, the most recent interim
financial statements shall be at least as current as the most recent
financial statements filed with the Commission on Form 10-Q.
* * * * *

0
11. Amend Sec.  210.3-14 by:
0
a. Revising paragraph (a) introductory text; and
0
b. Redesignating the Note following paragraph (a)(1)(iii) as Note 1 to
paragraph (a)(1).
    The revision reads as follows:

Sec.  210.3-14   Special instructions for real estate operations to be
acquired.

    (a) If, during the period for which statements of comprehensive
income are required, the registrant has acquired one or more properties
which in the aggregate are significant, or since the date of the latest
balance sheet required has acquired or proposes to acquire one or more
properties which in the aggregate are significant, the following shall
be furnished with respect to such properties:
* * * * *

Sec.  210.3-15  [Amended]

0
12. Amend Sec.  210.3-15 by removing and reserving paragraphs (a) and
(b).

0
13. Amend Sec.  210.3-17 by revising paragraph (a) to read as follows:

Sec.  210.3-17  Financial statements of natural persons.

    (a) In lieu of the financial statements otherwise required, a
natural person may file an unaudited balance sheet as of a date within
90 days of date of filing and unaudited statements of comprehensive
income for each of the three most recent fiscal years.
* * * * *

0
14. Amend Sec.  210.3-20 by:
0
a. Revising the section heading;
0
b. Redesignating paragraph (a) as paragraph (a)(1);
0
c. Adding paragraph (a)(2);
0
d. Redesignating paragraph (b) as paragraph (b)(1) and adding paragraph
(b)(2); and
0
e. Revising paragraph (d).
    The additions and revisions read as follows:

Sec.  210.3-20   Currency for financial statements.

    (a)(1) * * *
    (2) An issuer that is not a foreign private issuer shall present
its financial statements in U.S. dollars.
    (b)(1) * * *
    (2) If there are material exchange restrictions or controls
relating to the

currency of a subsidiary's domicile, the currency held by a subsidiary,
or the currency in which a subsidiary will pay dividends or transfer
funds to the issuer or other subsidiaries, prominent disclosure of this
fact shall be made in the financial statements.
* * * * *
    (d) Notwithstanding the currency used for reporting purposes, the
issuer shall measure separately its own transactions, and those of each
of its material operations (e.g., branches, divisions, subsidiaries,
joint ventures, and similar entities) that is included in the issuer's
consolidated financial statements and not located in a
hyperinflationary environment, using the particular currency of the
primary economic environment in which the issuer or the operation
conducts its business. Assets and liabilities so determined shall be
translated into the reporting currency at the exchange rate at the
balance sheet date; all revenues, expenses, gains, and losses shall be
translated at the exchange rate existing at the time of the transaction
or, if appropriate, a weighted average of the exchange rates during the
period; and all translation effects of exchange rate changes shall be
included as a separate component (``cumulative translation
adjustment'') of shareholder's equity. For purposes of this paragraph,
the currency of an operation's primary economic environment is normally
the currency in which cash is primarily generated and expended; a
hyperinflationary environment is one that has cumulative inflation of
approximately 100% or more over the most recent three year period.
Departures from the methodology presented in this paragraph shall be
quantified pursuant to Item 17(c)(2) of Form 20-F (Sec.  249.220f of
this chapter).

Sec.  210.3A-01  [Removed and Reserved]

0
15. Remove and reserve Sec.  210.3A-01.

0
16. Revise Sec.  210.3A-02 to read as follows:

Sec.  210.3A-02  Consolidated financial statements of the registrant
and its subsidiaries.

    In deciding upon consolidation policy, the registrant must consider
what financial presentation is most meaningful in the circumstances and
should follow in the consolidated financial statements principles of
inclusion or exclusion which will clearly exhibit the financial
position and results of operations of the registrant. There is a
presumption that consolidated financial statements are more meaningful
than separate financial statements and that they are usually necessary
for a fair presentation when one entity directly or indirectly has a
controlling financial interest in another entity. Other particular
facts and circumstances may require combined financial statements, an
equity method of accounting, or valuation allowances in order to
achieve a fair presentation.
    (a) Majority ownership: Among the factors that the registrant
should consider in determining the most meaningful presentation is
majority ownership. Generally, registrants shall consolidate entities
that are majority owned and shall not consolidate entities that are not
majority owned. The determination of majority ownership requires a
careful analysis of the facts and circumstances of a particular
relationship among entities. In rare situations, consolidation of a
majority owned subsidiary may not result in a fair presentation,
because the registrant, in substance, does not have a controlling
financial interest (for example, when the subsidiary is in legal
reorganization or in bankruptcy). In other situations, consolidation of
an entity, notwithstanding the lack of technical majority ownership, is
necessary to present fairly the financial position and results of
operations of the registrant, because of the existence of a parent-
subsidiary relationship by means other than record ownership of voting
stock.
    (b) [Reserved].

0
17. Amend Sec.  210.3A-03 by removing and reserving paragraph (a) and
revising paragraph (b).
    The revision reads as follows:

Sec.  210.3A-03  Statement as to principles of consolidation or
combination followed.

* * * * *
    (b) As to each consolidated financial statement and as to each
combined financial statement, if there has been a change in the persons
included or excluded in the corresponding statement for the preceding
fiscal period filed with the Commission that has a material effect on
the financial statements, the persons included and the persons excluded
shall be disclosed.

Sec.  210.3A-04   [Removed and Reserved]

0
18. Remove and reserve Sec.  210.3A-04.

Sec.  210.4-01   [Amended]

0
19. Amend Sec.  210.4-01 by removing paragraph (a)(3).

0
20. Amend Sec.  210.4-08 by:
0
 a. Revising the introductory text;
0
b. Removing and reserving paragraph (a);
0
c. Redesignating paragraph (d)(1) as paragraph (d) and removing
paragraph (d)(2);
0
d. Revising paragraphs (e)(1) and (e)(3) introductory text;
0
e. Revising paragraphs (f) and (h)(1) introductory text;
0
f. Redesignating the Note following paragraph (h)(1) as Note 1 to
paragraph (h)(1);
0
g. Revising paragraph (h)(2);
0
h. Removing paragraph (h)(3);
0
i. Removing and reserving paragraph (i);
0
j. Revising paragraph (k); and
0
k. Revising paragraphs (m)(2)(ii) and (n).
    The revisions read as follows:

Sec.  210.4-08  General notes to financial statements.

    If applicable to the person for which the financial statements are
filed, the following shall be set forth on the face of the appropriate
statement or in appropriately captioned notes. The information shall be
provided for each statement required to be filed, except that the
information required by paragraphs (b), (c), (d), (e), and (f) of this
section shall be provided as of the most recent audited balance sheet
being filed and for paragraph (j) of this section as specified therein.
When specific statements are presented separately, the pertinent notes
shall accompany such statements unless cross-referencing is
appropriate.
* * * * *
    (e) * * *
    (1) Describe the most significant restrictions on the payment of
dividends by the registrant, indicating their sources, their pertinent
provisions, and the amount of retained earnings or net income
restricted or free of restrictions.
* * * * *
    (3) The disclosures in paragraphs (e)(3)(i) and (ii) of this
section shall be provided when material.
* * * * *
    (f) Significant changes in bonds, mortgages and similar debt. Any
significant changes in the authorized amounts of bonds, mortgages and
similar debt since the date of the latest balance sheet being filed for
a particular person or group shall be stated.
* * * * *
    (h) Income tax expense. (1) Disclosure shall be made in the
statement of comprehensive income or a note thereto, of the components
of income (loss) before income tax expense (benefit) as either domestic
or foreign.
* * * * *
    (2) In the reconciliation between the amount of reported total
income tax expense (benefit) and the amount computed by multiplying the
income (loss) before tax by the applicable

statutory Federal income tax rate, if no individual reconciling item
amounts to more than five percent of the amount computed by multiplying
the income before tax by the applicable statutory Federal income tax
rate, and the total difference to be reconciled is less than five
percent of such computed amount, no reconciliation need be provided
unless it would be significant in appraising the trend of earnings.
Reconciling items that are individually less than five percent of the
computed amount may be aggregated in the reconciliation. Where the
reporting person is a foreign entity, the income tax rate in that
person's country of domicile should normally be used in making the
above computation, but different rates should not be used for
subsidiaries or other segments of a reporting entity. When the rate
used by a reporting person is other than the United States Federal
corporate income tax rate, the rate used and the basis for using such
rate shall be disclosed.
* * * * *
    (k) Related party transactions that affect the financial
statements. (1) Amounts of related party transactions should be stated
on the face of the balance sheet, statement of comprehensive income, or
statement of cash flows.
    (2) In cases where separate financial statements are presented for
the registrant, certain investees, or subsidiaries, any intercompany
profits or losses resulting from transactions with related parties and
the effects thereof shall be disclosed.
* * * * *
    (m) * * *
    (2) Reverse repurchase agreements (assets purchased under
agreements to resell). (i) If, as of the most recent balance sheet
date, the aggregate carrying amount of ``reverse repurchase
agreements'' (securities or other assets purchased under agreements to
resell) exceeds 10% of total assets:
    (A) Disclose separately such amount in the balance sheet; and
    (B) Disclose in an appropriately captioned footnote:
    (1) The registrant's policy with regard to taking possession of
securities or other assets purchased under agreements to resell; and
    (2) Whether or not there are any provisions to ensure that the
market value of the underlying assets remains sufficient to protect the
registrant in the event of default by the counterparty and if so, the
nature of those provisions.
    (ii) If, as of the most recent balance sheet date, the amount at
risk under reverse repurchase agreements with any individual
counterparty or group of related counterparties exceeds 10% of
stockholders' equity (or in the case of investment companies, net asset
value), disclose the name of each such counterparty or group of related
counterparties, the amount at risk with each, and the weighted average
maturity of the reverse repurchase agreements with each. The amount at
risk under reverse repurchase agreements is defined as the excess of
the carrying amount of the reverse repurchase agreements over the
market value of assets delivered pursuant to the agreements by the
counterparty to the registrant (or to a third party agent that has
affirmatively agreed to act on behalf of the registrant) and not
returned to the counterparty, except in exchange for their approximate
market value in a separate transaction.
    (n) Accounting policies for certain derivative instruments.
Disclosures regarding accounting policies shall include, to the extent
material, where in the statement of cash flows derivative financial
instruments, and their related gains and losses, as defined by U.S.
generally accepted accounting principles, are reported.

0
21. Amend Sec.  210.4-10 by revising paragraph (c)(7)(i) to read as
follows:

Sec.  210.4-10  Financial accounting and reporting for oil and gas
producing activities pursuant to the Federal securities laws and the
Energy Policy and Conservation Act of 1975.

* * * * *
    (c) * * *
    (7) * * *
    (i) For each cost center for each year that a statement of
comprehensive income is required, disclose the total amount of
amortization expense (per equivalent physical unit of production if
amortization is computed on the basis of physical units or per dollar
of gross revenue from production if amortization is computed on the
basis of gross revenue).
* * * * *

0
22. Amend Sec.  210.5-02 by:
0
a. Removing ``[See Sec.  210.4-05]'' immediately below the undesignated
heading ``Current Assets, when appropriate'' and immediately above
paragraph 1;
0
b. Revising paragraphs 6.(a)(2) and (3);
0
c. Revising the undesignated heading immediately above paragraph 19;
0
d. Revising paragraphs 22.(a) introductory text, 27.(c)(3), 28, and 29;
and
0
e. Revising paragraph 30.(a).
    The revisions read as follows:

Sec.  210.5-02  Balance sheets.

* * * * *
    6. * * *
    (a) * * *
    (2) inventoried costs relating to long-term contracts or programs
(see paragraph (d) of this section);
    (3) work in process;
* * * * *

Current Liabilities, When Appropriate

    19. * * *
* * * * *
    22. * * *
    (a) State separately, in the balance sheet or in a note thereto,
each issue or type of obligation and such information as will indicate:
* * * * *
    27. * * *
    (c) * * *
    (3) the changes in each issue for each period for which a statement
of comprehensive income is required to be filed. (See also Sec.  210.4-
08(d).)
* * * * *
    28. Preferred stocks which are not redeemable or are redeemable
solely at the option of the issuer. State on the face of the balance
sheet, or if more than one issue is outstanding state in a note, the
title of each issue and the dollar amount thereof. Show also the dollar
amount of any shares subscribed but unissued, and show the deduction of
subscriptions receivable therefrom. State on the face of the balance
sheet or in a note, for each issue, the number of shares authorized and
the number of shares issued or outstanding, as appropriate (see Sec.
210.4-07). Show in a note or separate statement the changes in each
class of preferred shares reported under this caption for each period
for which a statement of comprehensive income is required to be filed.
(See also Sec.  210.4-08(d).)
* * * * *
    29. Common stocks. For each class of common shares state, on the
face of the balance sheet, the number of shares issued or outstanding,
as appropriate (see Sec.  210.4-07), and the dollar amount thereof. If
convertible, this fact should be indicated on the face of the balance
sheet. For each class of common shares state, on the face of the
balance sheet or in a note, the title of the issue, the number of
shares authorized, and, if convertible, the basis of conversion (see
also Sec.  210.4-08(d)). Show also the dollar amount of any common
shares subscribed but unissued, and show the deduction of subscriptions
receivable therefrom. Show in a note or statement the changes in each
class of common shares for each period for which a

statement of comprehensive income is required to be filed.
* * * * *
    30. Other stockholders' equity.
    (a) Separate captions shall be shown for (1) additional paid-in
capital, (2) other additional capital, (3) retained earnings, (i)
appropriated and (ii) unappropriated (See Sec.  210.4-08(e)), and (4)
accumulated other comprehensive income.

    Note 1 to paragraph 30.(a). Additional paid-in capital and other
additional capital may be combined with the stock caption to which
it applies, if appropriate.

* * * * *

0
23. Amend Sec.  210.5-03 by:
0
a. Revising the section heading and paragraphs (a), (b)1, 7, and 9;
0
b. Removing and reserving paragraphs (b)15, 16, and 17;
0
c. Redesignating paragraph (b)21 as (b)25; and
0
d. Adding new paragraph (b)21 and paragraphs (b)22, 23, and 24.
    The revisions and additions read as follows:

Sec.  210.5-03  Statements of comprehensive income.

    (a) The purpose of this rule is to indicate the various line items
which, if applicable, and except as otherwise permitted by the
Commission, should appear on the face of the statements of
comprehensive income filed for the persons to whom this article
pertains (see Sec.  210.4-01(a)).
    (b) * * *
    1. Net sales and gross revenues. State separately:
    (a) Net sales of tangible products (gross sales less discounts,
returns and allowances), (b) operating revenues of public utilities or
others; (c) income from rentals; (d) revenues from services; and (e)
other revenues. Amounts earned from transactions with related parties
shall be disclosed as required under Sec.  210.4-08(k). A public
utility company using a uniform system of accounts or a form for annual
report prescribed by federal or state authorities, or a similar system
or report, shall follow the general segregation of operating revenues
and operating expenses reported under Sec.  210.5-03.2 prescribed by
such system or report. If the total of sales and revenues reported
under this caption includes excise taxes in an amount equal to 1
percent or more of such total, the amount of such excise taxes shall be
shown on the face of the statement parenthetically or otherwise.
* * * * *
    7. Non-operating income. State separately in the statement of
comprehensive income or in a note thereto amounts earned from (a)
dividends, (b) interest on securities, (c) profits on securities (net
of losses), and (d) miscellaneous other income. Amounts earned from
transactions in securities of related parties shall be disclosed as
required under Sec.  210.4-08(k). Material amounts included under
miscellaneous other income shall be separately stated in the statement
of comprehensive income or in a note thereto, indicating clearly the
nature of the transactions out of which the items arose.
* * * * *
    9. Non-operating expenses. State separately in the statement of
comprehensive income or in a note thereto amounts of (a) losses on
securities (net of profits) and (b) miscellaneous income deductions.
Material amounts included under miscellaneous income deductions shall
be separately stated in the statement of comprehensive income or in a
note thereto, indicating clearly the nature of the transactions out of
which the items arose.
* * * * *
    21. Other comprehensive income. State separately the components of
and the total for other comprehensive income. Present the components
either net of related tax effects or before related tax effects with
one amount shown for the aggregate income tax expense or benefit. State
the amount of income tax expense or benefit allocated to each
component, including reclassification adjustments, in the statement of
comprehensive income or in a note.
    22. Comprehensive income.
    23. Comprehensive income attributable to the noncontrolling
interest.
    24. Comprehensive income attributable to the controlling interest.
    25. Earnings per share data.

0
24. Amend Sec.  210.5-04 by revising paragraph (a)(2); and Schedule I
to read as follows:

Sec.  210.5-04  What schedules are to be filed.

    (a) * * *
    (2) Schedule II of this section shall be filed for each period for
which an audited statement of comprehensive income is required to be
filed for each person or group.
* * * * *
    Schedule I--Condensed financial information of registrant. The
schedule prescribed by Sec.  210.12-04 shall be filed when the
restricted net assets (Sec.  210.1.02(dd)) of consolidated subsidiaries
exceed 25 percent of consolidated net assets as of the end of the most
recently completed fiscal year.
* * * * *

0
25. Amend Sec.  210.6-03 by revising paragraph (c)(1) introductory text
and removing and reserving paragraph (c)(1)(i).
    The revision reads as follows:

Sec.  210.6-03  Special rules of general application to registered
investment companies and business development companies.

* * * * *
    (c) * * *
    (1) Consolidated and combined statements filed for registered
investment companies and business development companies shall be
prepared in accordance with Sec. Sec.  210.3A-02 and 210.3A-03 (Article
3A), except that:
* * * * *

0
26. Amend Sec.  210.6-04 by revising the paragraph 17 heading, its
introductory text, and paragraph 17.(a) to read as follows:

Sec.  210.6-04  Balance sheets.

* * * * *
    17. Total distributable earnings (loss). Disclose total
distributable earnings (loss), which generally comprise:
    (a) Accumulated undistributed investment income-net,
* * * * *

0
27. Amend Sec.  210.6-07 by revising the introductory text to read as
follows:

Sec.  210.6-07  Statements of operations.

    Statements of operations, or statements of comprehensive income,
where applicable, filed by registered investment companies, other than
issuers of face-amount certificates, subject to the special provisions
of Sec.  210.6-08, and business development companies, shall comply
with the following provisions:
* * * * *

0
28. Amend Sec.  210.6-09 by revising paragraphs 3, 4.(b), and 7 to read
as follows:

Sec.  210.6-09  Statements of changes in net assets.

* * * * *
    3. Distributions to shareholders. State total distributions to
shareholders which generally come from: (a) Investment income-net; (b)
realized gain from investment transactions-net; and (c) other sources,
except tax return of capital distributions, which shall be disclosed
separately.
    4. * * *
    (b) Disclose in the body of the statements or in the notes, for
each class

of the person's shares, the number and value of shares issued in
reinvestment of dividends as well as the number and dollar amounts
received for shares sold and paid for shares redeemed.
* * * * *
    7. Net assets at the end of the period.

0
29. Amend Sec.  210.6A-04 by revising the section heading and
introductory text to read as follows:

Sec.  210.6A-04  Statements of comprehensive income and changes in plan
equity.

    Statements of comprehensive income and changes in plan equity filed
under this rule shall comply with the following provisions:
* * * * *

0
30. Amend Sec.  210.6A-05 by revising paragraph (a) introductory text
and Schedule III to read as follows:

Sec.  210.6A-05  What schedules are to be filed.

    (a) Schedule I of this section shall be filed as of the most recent
audited statement of financial condition and any subsequent unaudited
statement of financial condition being filed. Schedule II of this
section shall be filed as of the date of each statement of financial
condition being filed. Schedule III of this section shall be filed for
each period for which a statement of comprehensive income and changes
in plan equity is filed. All schedules shall be audited if the related
statements are audited.
* * * * *
    Schedule III--Allocation of plan income and changes in plan equity
to investment programs. If the plan provides for separate investment
programs with separate funds, and if the allocation of income and
changes in plan equity to the several funds is not shown in the
statement of comprehensive income and changes in plan equity in
columnar form or by the submission of separate statements for each
fund, a schedule shall be submitted showing the allocation of each
caption of each statement of comprehensive income and changes in plan
equity filed to the applicable fund.
* * * * *

0
31. Amend Sec.  210.7-03 by:
0
a. Revising paragraphs (a)6, (a)11, and (a)13.(a)(2); and
0
b. Removing and reserving paragraph (a)13.(b);
0
c. Removing paragraph (a)13.(c); and
0
d. Revising paragraphs (a)23.(a)(3) and (a)23.(c)(2).
    The revisions read as follows:

Sec.  210.7-03  Balance sheets.

    (a) * * *
    6. Reinsurance recoverable.
* * * * *
    11. Separate account assets. Include under this caption the portion
of separate account-assets representing contract holder funds required
to be reported in an insurance entity's financial statements as a
summary total. An equivalent summary total for the related liability
shall be included under caption 18.
* * * * *
    13. * * *
    (a) * * *
    (2) unearned premiums and
    (3) * * *
* * * * *
    23. * * *
    (a) * * *
    (3) accumulated other comprehensive income,
* * * * *
    (c) * * *
    (2) property and liability insurance legal entities: The amount of
statutory stockholders' equity as of the date of each balance sheet
presented and the amount of statutory net income or loss for each
period for which a statement of comprehensive income is presented.
* * * * *

0
32. Amend Sec.  210.7-04 by:
0
a. Revising the section heading;
0
b. Revising the introductory text;
0
c. Revising paragraph 3.(b);
0
d. Removing and reserving paragraph 3.(c);
0
e. Revising paragraphs 3.(d), 7, and 9;
0
f. Removing and reserving paragraphs 13, 14, and 15;
0
g. Redesignating paragraph 19 as paragraph 23; and
0
h. Adding new paragraph 19 and paragraphs 20, 21, and 22.
    The revisions and additions read as follows:

Sec.  210.7-04  Statements of comprehensive income.

    The purpose of this section is to indicate the various items which,
if applicable, should appear on the face of the statements of
comprehensive income and in the notes thereto filed for persons to whom
this article pertains. (See Sec.  210.4-01(a).)
* * * * *
    3. * * *
    (b) Indicate in a footnote the registrant's policy with respect to
whether investment income and realized gains and losses allocable to
policyholders and separate accounts are included in the investment
income and realized gain and loss amounts reported in the statement of
comprehensive income. If the statement of comprehensive income includes
investment income and realized gains and losses allocable to
policyholders and separate accounts, indicate the amounts of such
allocable investment income and realized gains and losses and the
manner in which the insurance enterprise's obligation with respect to
allocation of such investment income and realized gains and losses is
otherwise accounted for in the financial statements.
* * * * *
    (d) For each period for which a statement of comprehensive income
is filed, include in a note an analysis of realized and unrealized
investment gains and losses on fixed maturities and equity securities.
For each period, state separately for fixed maturities [see Sec.
210.7-03.1(a)] and for equity securities [see Sec.  210.7-03.1(b)] the
following amounts:
* * * * *
    7. Underwriting, acquisition and insurance expenses. State
separately in the statement of comprehensive income or in a note
thereto (a) the amount included in this caption representing deferred
policy acquisition costs amortized to income during the period, and (b)
the amount of other operating expenses. State separately in the
statement of comprehensive income any material amount included in all
other operating expenses.
* * * * *
    9. Income tax expense. Include under this caption only taxes based
on income (See Sec.  210.4-08(h).)
* * * * *
    19. Other comprehensive income. State separately the components of
and the total for other comprehensive income. Present the components
either net of related tax effects or before related tax effects with
one amount shown for the aggregate income tax expense or benefit. State
the amount of income tax expense or benefit allocated to each
component, including reclassification adjustments, in the statement of
comprehensive income or in a note.
    20. Comprehensive income.
    21. Comprehensive income attributable to the noncontrolling
interest.
    22. Comprehensive income attributable to the controlling interest.
    23. Earnings per share data.

0
33. Amend Sec.  210.7-05 by revising paragraph (a)(2) and Schedules II
and III to read as follows:

Sec.  210.7-05   What schedules are to be filed.

    (a) * * *
    (2) The schedules specified in this section as Schedule IV and V
shall be

filed for each period for which an audited statement of comprehensive
income is required to be filed for each person or group.
* * * * *
    Schedule II--Condensed financial information of registrant. The
schedule prescribed by Sec.  210.12-04 shall be filed when the
restricted net assets (Sec.  210.1.02(dd)) of consolidated subsidiaries
exceed 25 percent of consolidated net assets as of the end of the most
recently completed fiscal year.
    Schedule III--Supplementary insurance information. The schedule
prescribed by Sec.  210.12-16 shall be filed giving segment detail in
support of various balance sheet and statement of comprehensive income
captions. The required balance sheet information shall be presented as
of the date of each audited balance sheet filed, and the statement of
comprehensive income information shall be presented for each period for
which an audited statement of comprehensive income is required to be
filed, for each person or group.
* * * * *

0
34. Amend Sec.  210.8-01 by revising paragraph a. of Note 2 to Sec.
210.8 and removing Note 6 to Sec.  210.8.
    The revision reads as follows:

Sec.  210.8-01  Preliminary Notes to Article 8.

* * * * *

    Note 2 to Sec.  210.8.  * * *
    a. The report and qualifications of the independent accountant
shall comply with the requirements of Sec. Sec.  210.2-01 through
210.2-07 (Article 2 of this part); and

* * * * *

0
35. Revise Sec.  210.8-02 to read as follows:

Sec.  210.8-02   Annual financial statements.

    Smaller reporting companies shall file an audited balance sheet as
of the end of each of the most recent two fiscal years, or as of a date
within 135 days if the issuer has existed for a period of less than one
fiscal year, and audited statements of comprehensive income, cash flows
and changes in stockholders' equity for each of the two fiscal years
preceding the date of the most recent audited balance sheet (or such
shorter period as the registrant has been in business).

0
36. Amend Sec.  210.8-03 by:
0
 a. Revising the introductory text;
0
b. Revising paragraph (a)(2);
0
c. Adding paragraph (a)(5);
0
d. Removing and reserving paragraph (b)(2);
0
e. Revising paragraphs (b)(4) and (5);
0
f. Removing paragraph (b)(6); and
0
g. Revising Instruction 1 to Sec.  210.8-03.
    The revisions and addition read as follows:

Sec.  210.8-03  Interim financial statements.

    Interim financial statements may be unaudited; however, before
filing, interim financial statements included in quarterly reports on
Form 10-Q (Sec.  249.308(a) of this chapter) must be reviewed by an
independent public accountant using applicable professional standards
and procedures for conducting such reviews, as may be modified or
supplemented by the Commission. If, in any filing, the issuer states
that interim financial statements have been reviewed by an independent
public accountant, a report of the accountant on the review must be
filed with the interim financial statements. Interim financial
statements shall include a balance sheet as of the end of the issuer's
most recent fiscal quarter, a balance sheet as of the end of the
preceding fiscal year, and statements of comprehensive income and
statements of cash flows for the interim period up to the date of such
balance sheet and the comparable period of the preceding fiscal year.
    (a) * * *
    (2) Statements of comprehensive income (or the statement of net
income if comprehensive income is presented in two separate but
consecutive financial statements) should include net sales or gross
revenue, each cost and expense category presented in the annual
financial statements that exceeds 20% of sales or gross revenues,
provision for income taxes, and discontinued operations. (Financial
institutions should substitute net interest income for sales for
purposes of determining items to be disclosed.)
* * * * *
    (5) Provide the information required by Sec.  210.3-04 for the
current and comparative year-to-date periods, with subtotals for each
interim period.
    (b) * * *
    (4) Significant dispositions. If a significant disposition has
occurred during the most recent interim period and the transaction
required the filing of a Form 8-K (Sec.  249.308 of this chapter), pro
forma data must be presented that reflects revenue, income from
continuing operations, net income, net income attributable to the
registrant and income per share for the current interim period and the
corresponding interim period of the preceding fiscal year.
    (5) Material accounting changes. The registrant's independent
accountant must provide a letter in the first Form 10-Q (Sec.  249.308a
of this chapter) filed after the change indicating whether or not the
change is to a preferable method. Disclosure must be provided of any
retroactive change to prior period financial statements, including the
effect of any such change on income and income per share.
    Instruction 1 to Sec.  210.8-03. Where Sec. Sec.  210.8-01 through
210.8-08 (Article 8 of this part) are applicable to a Form 10-Q (Sec.
249.308a of this chapter) and the interim period is more than one
quarter, statements of comprehensive income must also be provided for
the most recent interim quarter and the comparable quarter of the
preceding fiscal year.
* * * * *

0
37. Amend Sec.  210.8-04 by revising paragraph (b)(3) to read as
follows:

Sec.  210.8-04   Financial statements of businesses acquired or to be
acquired.

* * * * *
    (b) * * *
    (3) Compare the smaller reporting company's equity in the income
from continuing operations before income taxes of the acquiree
exclusive of amounts attributable to any noncontrolling interests to
such consolidated income of the smaller reporting company for the most
recently completed fiscal year.
* * * * *

0
38. Amend Sec.  210.8-05 by revising paragraphs (b)(1) and (2) to read
as follows:

Sec.  210.8-05   Pro forma financial information.

* * * * *
    (b) * * *
    (1) If the transaction was consummated during the most recent
fiscal year or subsequent interim period, pro forma statements of
comprehensive income reflecting the combined operations of the entities
for the latest fiscal year and interim period, if any; or
    (2) If consummation of the transaction has occurred or is probable
after the date of the most recent balance sheet required by Sec.
210.8-02 or Sec.  210.8-03, a pro forma balance sheet giving effect to
the combination as of the date of the most recent balance sheet. For a
purchase, pro forma statements of comprehensive income reflecting the
combined operations of the entities for the latest fiscal year and
interim period, if any, are required.

0
39. Amend Sec.  210.8-06 by revising the introductory text to read as
follows:

Sec.  210.8-06   Real estate operations acquired or to be acquired.

    If, during the period for which statements of comprehensive income
are required, the smaller reporting company has acquired one or more
properties that

in the aggregate are significant, or since the date of the latest
balance sheet required by Sec.  210.8-02 or Sec.  210.8-03, has
acquired or proposes to acquire one or more properties that in the
aggregate are significant, the following shall be furnished with
respect to such properties:
* * * * *

0
40. Amend Sec.  210.9-03 by:
0
 a. Revising paragraph 3;
0
b. Removing paragraph 6.(a) and removing and reserving paragraph 7.(d);
and
0
c. Revising paragraphs 7.(e)(3), 10, and 12.(a).
    The revisions read as follows:

Sec.  210.9-03   Balance sheets.

* * * * *
    3. Federal funds sold and securities purchased under resale
agreements or similar arrangements.
* * * * *
    7. * * *
    (e) * * *
    (3) Notwithstanding the aggregate disclosure called for by
paragraph (e)(1) of this section, if any loans were not made in the
ordinary course of business during any period for which a statement of
comprehensive income is required to be filed, provide an appropriate
description of each such loan.
* * * * *
    10. Other assets. Disclose separately on the balance sheet or in a
note thereto any of the following assets or any other asset the amount
of which exceeds thirty percent of stockholders equity. The remaining
assets may be shown as one amount.
    (1) Goodwill.
    (2) Other intangible assets (net of amortization).
    (3) Investments in and indebtedness of affiliates and other
persons.
    (4) Other real estate.
    (a) Disclose in a note the basis at which other real estate is
carried. A reduction to fair market value from the carrying value of
the related loan at the time of acquisition shall be accounted for as a
loan loss. Any allowance for losses on other real estate which has been
established subsequent to acquisition should be deducted from other
real estate. For each period for which a statement of comprehensive
income is required, disclosures should be made in a note as to the
changes in the allowances, including balance at beginning and end of
period, provision charged to income, and losses charged to the
allowance.
* * * * *
    12. * * *
    (a) The amount of noninterest bearing deposits and interest bearing
deposits in foreign banking offices must be presented if the disclosure
provided by Sec.  210.9-05 is required.
* * * * *

0
41. Amend Sec.  210.9-04 by:
0
 a. Revising the section heading and introductory text;
0
b. Revising paragraph 13.(h);
0
c. Removing and reserving paragraphs 14.(c), 17, 18, and 19;
0
d. Redesignating paragraph 23 as paragraph 27; and
0
e. Adding new paragraph 23 and paragraphs 24, 25, and 26.
    The revisions and additions read as follows:

Sec.  210.9-04   Statements of comprehensive income.

    The purpose of this section is to indicate the various items which,
if applicable, should appear on the face of the statement of
comprehensive income or in the notes thereto.
* * * * *
    13. * * *
    (h) Investment securities gains or losses. Related income taxes
shall be disclosed.
* * * * *
    23. Other comprehensive income. State separately the components of
and the total for other comprehensive income. Present the components
either net of related tax effects or before related tax effects with
one amount shown for the aggregate income tax expense or benefit. State
the amount of income tax expense or benefit allocated to each
component, including reclassification adjustments, in the statement of
comprehensive income or in a note.
    24. Comprehensive income.
    25. Comprehensive income attributable to the noncontrolling
interest.
    26. Comprehensive income attributable to the controlling interest.
* * * * *

0
42. Amend Sec.  210.9-05 by revising paragraph (b)(2) to read as
follows:

Sec.  210.9-05   Foreign activities.

* * * * *
    (b) * * *
    (2) For each period for which a statement of comprehensive income
is filed, state the amount of revenue, income (loss) before taxes, and
net income (loss) associated with foreign activities. Disclose
significant estimates and assumptions (including those related to the
cost of capital) used in allocating revenue and expenses to foreign
activities; describe the nature and effects of any changes in such
estimates and assumptions which have a significant impact on
interperiod comparability.
* * * * *

0
43. Revise Sec.  210.9-06 to read as follows:

Sec.  210.9-06   Condensed financial information of registrant.

    The information prescribed by Sec.  210.12-04 shall be presented in
a note to the financial statements when the restricted net assets
(Sec.  210.1-02(dd)) of consolidated subsidiaries exceed 25 percent of
consolidated net assets as of the end of the most recently completed
fiscal year. The investment in and indebtedness of and to bank
subsidiaries shall be stated separately in the condensed balance sheet
from amounts for other subsidiaries; the amount of cash dividends paid
to the registrant for each of the last three years by bank subsidiaries
shall be stated separately in the condensed statement of comprehensive
income from amounts for other subsidiaries.

0
44. Amend Sec.  210.10-01 by:
0
 a. Revising paragraphs (a)(3), (5), and (7);
0
b. Revising paragraphs (b)(1) through (3);
0
c. Removing and reserving paragraphs (b)(4) and (5); and
0
d. Revising paragraphs (b)(6) through (8), (c)(2) and (4), and (d).
    The revisions read as follows:

Sec.  210.10-01   Interim financial statements.

    (a) * * *
    (3) Interim statements of comprehensive income shall also include
major captions prescribed by the applicable sections of part 210 of
this chapter (Regulation S-X). When any major statement of
comprehensive income (or statement of net income if comprehensive
income is presented in two separate but consecutive financial
statements) caption is less than 15% of average net income for the most
recent three fiscal years and the amount in the caption has not
increased or decreased by more than 20% as compared to the