[Federal Register: June 25, 2009 (Volume 74, Number 121)]
[Proposed Rules]
[Page 30245-30247]
[DOCID:fr25jn09-17]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2009-0571; Directorate Identifier 2009-NM-004-AD]
RIN 2120-AA64

Airworthiness Directives; Boeing Model 777 Series Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: We propose to adopt a new airworthiness directive (AD) for all
Boeing Model 777 series airplanes. This proposed AD would require
inspections for scribe lines in the skin along lap joints, butt joints,
certain external doublers, and the large cargo door hinges; and related
investigative and corrective actions if necessary. This proposed AD
results from reports of scribe lines found at lap joints and butt
joints, around external doublers, and at locations where external
decals had been cut. We are proposing this AD to detect and correct
scribe lines, which can develop into fatigue cracks in the skin.
Undetected fatigue cracks can grow and cause sudden decompression of
the airplane.

DATES: We must receive comments on this proposed AD by August 10, 2009.

ADDRESSES: You may send comments by any of the following methods:
     Federal eRulemaking Portal: Go to http://
www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue, SE., Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
    For service information identified in this proposed AD, contact
Boeing Commercial Airplanes, Attention: Data & Services Management,
P.O. Box 3707, MC 2H-65, Seattle, Washington 98124-2207; telephone 206-
544-5000, extension 1; fax<PHONE_NUMBER>; e-mail<EMAIL_ADDRESS>
Internet https://www.myboeingfleet.com. You may review copies of the
referenced service information at the FAA, Transport Airplane
Directorate, 1601 Lind Avenue, SW., Renton, Washington. For information
on the availability of this material at the FAA, call<PHONE_NUMBER> or
425-227-1152.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://
www.regulations.gov; or in person at the Docket Management Facility
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this proposed AD, the regulatory
evaluation, any comments received, and other information. The street
address for the Docket Office (telephone<PHONE_NUMBER>) is in the
ADDRESSES section. Comments will be available in the AD docket shortly
after receipt.

FOR FURTHER INFORMATION CONTACT: Berhane Alazar, Aerospace Engineer,
Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office,
1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone (425)
917-6577; fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposed AD. Send your comments to an address
listed under the ADDRESSES section. Include ``Docket No. FAA-2009-0571;
Directorate Identifier 2009-NM-004-AD'' at the beginning of your
comments. We specifically invite comments on the overall regulatory,
economic, environmental, and energy aspects of this proposed AD. We
will consider all comments received by the closing date and may amend
this proposed AD because of those comments.
    We will post all comments we receive, without change, to http://
www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this proposed AD.

Discussion

    We have received a report indicating that scribe lines have been
found by one operator on one Model 777 airplane. On this airplane,
scribe lines were found around the edges of the area where a large
decal had been installed. The operator believed that the scribe lines
were made when the decal was removed. No cracks were found at the
scribe line locations. On other airplane models, scribe lines appear to
have been made when sealant was removed as part of preparation of the
airplane for repainting, and in some cases resulted in significant
cracking. Although no such cracking has been found on Model 777
airplanes, fatigue cracks can develop in the skin at scribe line
locations and have been found on some airplane models. Such fatigue
cracks, if not corrected, could grow large and cause sudden
decompression of the airplane.

Related ADs

    This proposed AD is similar to two existing ADs. AD 2006-07-12,
amendment 39-14539 (71 FR 16211, March 31, 2006), applies to Boeing
Model 737-100, -200, -200C, -300, -400, and -500 series airplanes. AD
2007-19-07, amendment 39-15198 (72 FR 60244, October 24, 2007), applies
to all Boeing Model 757-200, -200PF, and -200CB series airplanes. Those
ADs require inspections to detect scribe lines in the fuselage skin at
certain lap joints, butt joints, external repair doublers, and other
areas; and related investigative/corrective actions if necessary. Those
actions resulted from reports of fuselage skin cracks adjacent to the
skin lap joints on airplanes that had scribe lines.

Relevant Service Information

    We have reviewed Boeing Alert Service Bulletin 777-53A0054, dated
August 7, 2008. The service bulletin describes procedures for
exploratory detailed inspections to detect scribe lines in affected lap
joint and butt joint locations, external repair doubler locations, and
large cargo door hinges. The service bulletin specifies removing paint
and sealant from affected areas before the initial exploratory
inspection. The compliance time for the exploratory inspections is
15,000, 32,000, or 45,000 total flight cycles (depending on the
inspection location).
    The service bulletin specifies related investigative and corrective
actions. The related investigative actions include performing
repetitive detailed, high frequency eddy current, or ultrasonic
inspections of the scribe lines to detect cracks, and the corrective
actions include repairing scribe lines and cracks. The service bulletin
specifies to repair cracks before further flight.
    The service bulletin specifies repairing scribe lines before
further flight, except when a limited return to service (LRTS) program
for qualifying scribe lines would allow return to service for a limited
period before scribe lines are repaired. The LRTS program includes
repetitive inspections to detect cracks where scribe lines are found.
To qualify for an LRTS program, scribe lines must meet certain criteria
based on their depth and location. The service bulletin specifies final
repair by using the structural repair manual or

contacting Boeing for instructions, which would eliminate the need for
the repetitive inspections of the LRTS program. The repetitive
intervals for the LRTS program range from 1,200 to 5,000 flight cycles,
depending on the depth and location of the scribe lines and the
configuration of the airplane.
    The service bulletin notes that certain inspections would not be
required under the following conditions:
     The airplane had never been stripped or repainted.
     The area under the wing-to-body fairings had never been
stripped or repainted.
     For each repair, the airplane had never been stripped or
repainted since the repair was installed.
     No sealant had been removed except in accordance with the
specified sealant removal processes as given in Appendix A of the
service bulletin.
     No fillet seal exists at a certain lap joint or was
previously removed from that lap joint.
    The service bulletin specifies submitting inspection results to
Boeing. The service bulletin also provides procedures for addressing
scribe lines detected before the initial inspection threshold.

FAA's Determination and Requirements of This Proposed AD

    We are proposing this AD because we evaluated all relevant
information and determined the unsafe condition described previously is
likely to exist or develop in other products of the same type design.
This proposed AD would require accomplishing the actions specified in
the service information described previously, except as discussed under
``Differences Between the Proposed AD and Service Bulletin.'' This
proposed AD would also require sending the results of the exploratory
inspections to Boeing.

Differences Between the Proposed AD and Service Bulletin

    Where the note below Table 6 in paragraph 1.E., ``Compliance,'' of
Boeing Alert Service Bulletin 777-53A0054, dated August 7, 2008,
specifies to ``contact Boeing for inspection requirements for operation
beyond 60,000 total flight-cycles after first repaint,'' this AD
proposes to require contacting the FAA for inspection requirements for
those airplanes.
    Where the service bulletin specifies contacting the manufacturer
for instructions on how to repair certain conditions, this proposed AD
would require repairing those conditions in one of the following ways:
     Using a method that we approve; or
     Using data that meet the certification basis of the
airplane, and that have been approved by an Authorized Representative
for the Boeing Commercial Airplanes Delegation Option Authorization
Organization whom we have authorized to make those findings.

Costs of Compliance

    We estimate that this proposed AD would affect 129 airplanes of
U.S. registry. The following table provides the estimated costs for
U.S. operators to comply with this proposed AD. A work-hour estimate is
not available for the inspection for an external repair doubler since
the inspection required can be different depending on the in-service
repair history of the airplane. This inspection affects up to 129 U.S.-
registered airplanes.

                                                                 Table--Estimated Costs
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                                                                                Number of U.S.-
             Action                   Work hours       Average labor         Parts           Cost per product       registered          Fleet cost
                                                       rate per hour                                                 airplanes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Exploratory Inspection.........  9 to 34............             $80  None..............  $720 to $2,720........             129  $92,880 to $350,880.
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Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. ``Subtitle VII: Aviation
Programs,'' describes in more detail the scope of the Agency's
authority.
    We are issuing this rulemaking under the authority described in
``Subtitle VII, Part A, Subpart III, Section 44701: General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.

Regulatory Findings

    We determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would not
have a substantial direct effect on the States, on the relationship
between the national Government and the States, or on the distribution
of power and responsibilities among the various levels of government.
    For the reasons discussed above, I certify this proposed
regulation:
    1. Is not a ``significant regulatory action'' under Executive Order
12866,
    2. Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979), and
    3. Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.
    You can find our regulatory evaluation and the estimated costs of
compliance in the AD Docket.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

The Proposed Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

    1. The authority citation for part 39 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

    2. The FAA amends Sec.  39.13 by adding the following new AD:

Boeing: Docket No. FAA-2009-0571; Directorate Identifier 2009-NM-
004-AD.

Comments Due Date

    (a) We must receive comments by August 10, 2009.

Affected ADs

    (b) None.

Applicability

    (c) This AD applies to Boeing Model 777 series airplanes,
certificated in any category, as identified in Boeing Alert Service
Bulletin 777-53A0054, dated August 7, 2008.

Subject

    (d) Air Transport Association (ATA) of America Code 53:
Fuselage.

Unsafe Condition

    (e) This AD results from reports of scribe lines found at lap
joints and butt joints, around external doublers, and at locations
where external decals had been cut. We are issuing this AD to detect
and correct scribe lines, which can develop into fatigue cracks in
the skin. Undetected fatigue cracks can grow and cause sudden
decompression of the airplane.

Compliance

    (f) You are responsible for having the actions required by this
AD performed within the compliance times specified, unless the
actions have already been done.

Inspection

    (g) At the applicable times specified in paragraph 1.E.,
``Compliance,'' of Boeing Alert Service Bulletin 777-53A0054, dated
August 7, 2008, except as provided in paragraphs (h) and (j) of this
AD, do detailed exploratory inspections for scribe lines in the skin
along lap joints, butt joints, certain external doublers, and the
large cargo door hinges. Do all applicable related investigative and
corrective actions at the times specified in the service bulletin,
by accomplishing all actions specified in the Accomplishment
Instructions of the service bulletin, except as provided by
paragraph (i) of this AD.

    Note 1:  The inspection exemptions described in NOTES 1.-5. in
paragraph 1.E. of Boeing Alert Service Bulletin 777-53A0054, dated
August 7, 2008, apply to this AD.

Exceptions to Service Bulletin Specifications

    (h) Where Boeing Alert Service Bulletin 777-53A0054, dated
August 7, 2008, specifies a compliance time after the date on the
service bulletin, this AD requires compliance within the specified
compliance time after the effective date of this AD.
    (i) Where Boeing Alert Service Bulletin 777-53A0054, dated
August 7, 2008, specifies to contact Boeing for appropriate action,
accomplish applicable actions using a method approved in accordance
with the procedures specified in paragraph (l) of this AD.
    (j) Where paragraph 1.E. of Boeing Alert Service Bulletin 777-
53A0054, dated August 7, 2008, specifies to ``contact Boeing for
inspection requirements for operation beyond 60,000 total flight-
cycles after first repaint,'' for those airplanes, this AD requires
contacting the Manager, Seattle Aircraft Certification Office (ACO),
for all inspection requirements of this AD.

Report

    (k) At the applicable time specified in paragraph (k)(1) or
(k)(2) of this AD: Submit a report of the findings (both positive
and negative) of the inspections required by paragraph (g) of this
AD. You may use Appendix B of Boeing Alert Service Bulletin 777-
53A0054, dated August 7, 2008. Send the report to Boeing Commercial
Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207. The report
must contain, at a minimum, the inspection results, a description of
any discrepancies found, the airplane serial number, and the number
of flight cycles and flight hours on the airplane. Under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.),
the Office of Management and Budget (OMB) has approved the
information collection requirements contained in this AD and has
assigned OMB Control Number 2120-0056.
    (1) If the inspection was done on or after the effective date of
this AD: Submit the report within 30 days after the inspection.
    (2) If the inspection was done before the effective date of this
AD: Submit the report within 30 days after the effective date of
this AD.

Alternative Methods of Compliance (AMOCs)

    (l)(1) The Manager, Seattle ACO, FAA, has the authority to
approve AMOCs for this AD, if requested using the procedures found
in 14 CFR 39.19. Send information to ATTN: Berhane Alazar, Aerospace
Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft
Certification Office, 1601 Lind Avenue, SW., Renton, Washington
98057-3356; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>. Or, e-mail
information to<EMAIL_ADDRESS>    (2) To request a different method of compliance or a different
compliance time for this AD, follow the procedures in 14 CFR 39.19.
Before using any approved AMOC on any airplane to which the AMOC
applies, notify your principal maintenance inspector (PMI) or
principal avionics inspector (PAI), as appropriate, or lacking a
principal inspector, your local Flight Standards District Office.
The AMOC approval letter must specifically reference this AD.
    (3) An AMOC that provides an acceptable level of safety may be
used for any repair required by this AD, if it is approved by an
Authorized Representative for the Boeing Commercial Airplanes
Delegation Option Authorization Organization who has been authorized
by the Manager, Seattle ACO, to make those findings. For a repair
method to be approved, the repair must meet the certification basis
of the airplane and the approval must specifically refer to this AD.

    Issued in Renton, Washington, on June 17, 2009.
Dorr M. Anderson,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. E9-14991 Filed 6-24-09; 8:45 am]

BILLING CODE 4910-13-P


as a source of capital and thereby enhance the competitiveness of the
U.S. markets compared to other markets. The proposed amendments are
expected to reduce the cost for foreign issuers of monitoring whether
they qualify as foreign private issuers, including the time spent by
management in tracking this information. If more foreign issuers are
encouraged to remain in the U.S. markets and to make public offerings,
investors should also benefit because this will enhance their ability
to invest in the securities of foreign issuers that have been
registered with the Commission, and that are thus subject to the
disclosure requirements and investor protections provided by the
federal securities laws.
    Once a foreign issuer determines that it no longer qualifies as a
foreign private issuer, the proposed amendments would provide the
issuer with at least six months' advance notice that it must comply
with the domestic issuer forms and rules. This would provide these
issuers with more time to comply with the reporting requirements
applicable to domestic issuers under the Exchange Act, and to modify
their information and processing systems to comply with the domestic
reporting and registration regime. This includes the requirements to
comply with the more extensive executive compensation disclosure
requirements that apply to domestic issuers, as well as the proxy rules
and Section 16 reporting requirements under the Exchange Act, which do
not apply to foreign private issuers. Because the proposed amendments
would provide foreign issuers with advance notice when their status
changes, more foreign issuers may be encouraged to remain in the U.S.
markets, and investors should benefit from the increased opportunities
to invest in foreign securities in the United States.
    The proposed amendments should mitigate a burden on foreign issuers
by reducing the amount of time and the resources they expend to
determine their status pursuant to the four-factor test set forth in
the definition of ``foreign private issuer.'' In this respect, the
proposed amendments would be most beneficial to reporting foreign
private issuers that have close to 50% of their outstanding voting
securities held of record by U.S. residents, since they are most at
risk of no longer qualifying as foreign private issuers. The current
requirement that foreign issuers continuously test their status can
result in confusion for investors if a foreign issuer needs to move
between foreign and domestic reporting forms in the same fiscal year.
For example, investors may be confused if a foreign issuer determines
that it no longer qualifies as a foreign private issuer, and then
switches from the foreign private issuer forms (Form 6-K and Form 20-F)
to the domestic forms (e.g., quarterly reports on Form 10-Q) in the
same fiscal year. The proposed amendments would benefit U.S. investors
by eliminating this confusion. However, the proposed amendments may not
be as helpful in reducing investor confusion with respect to foreign
private issuers that have been reporting under the domestic regime and
that would now be permitted to switch immediately to the foreign
private issuer reporting regime upon the determination of their
eligibility to do so.
    At the same time, foreign issuers that previously did not qualify
as foreign private issuers, but that determine that they would qualify
as foreign private issuers, would be able to use the foreign private
issuer rules and forms immediately under the proposed amendments. This
accommodation could encourage more foreign issuers to enter the U.S.
markets and to make public offerings, and should benefit investors by
enhancing their ability to invest in foreign securities that have been
registered with the Commission.

B. Expected Costs
    Investors could incur costs from the proposed amendments if foreign
issuers that have been reporting under the domestic reporting regime
immediately switch over to the foreign private issuer forms once they
qualify as foreign private issuers. Because foreign private issuers
have different Exchange Act reporting obligations than domestic issuers
and file on different forms, some investors may find it confusing if a
foreign issuer that had been reporting under the domestic reporting
regime switches reporting regimes mid-year. In addition, once a foreign
issuer switches status from a domestic issuer to a foreign private
issuer, investors will no longer have the benefit of the disclosures
that were once provided by the foreign issuer on the domestic forms.
    Currently, when a foreign issuer no longer qualifies as a foreign
private issuer, it must immediately file quarterly reports on Form 10-Q
and current reports on Form 8-K. It must also comply with the
Commission's proxy rules and the Section 16 insider stock trading and
short-swing profit recovery provisions. Under the proposed amendments,
when a foreign issuer determines that it no longer qualifies as a
foreign issuer, for the six months following the test date, the foreign
issuer would be permitted to continue relying on the rules applicable
to foreign private issuers, such as the exemption from the proxy rules
and Section 16. The foreign issuer would also be allowed to use the
forms reserved for foreign private issuers, and to provide current
reports on Form 6-K, rather than Exchange Act reports on Forms 10-Q and
8-K. During that period, investors would not have the benefit of the
additional disclosures that the foreign issuer would otherwise be
required to provide.

2. Proposed Amendments to Form 20-F

    The proposed amendments would make several changes to annual
reports filed on Form 20-F. We are proposing to accelerate the deadline
for annual reports filed on Form 20-F by foreign private issuers. We
are also proposing to amend Form 20-F to require certain additional
disclosures in annual reports on that Form. The proposed amendments
would require issuers to disclose any changes in and disagreements with
the registrant's certifying accountant in their Form 20-F annual
reports, as well as in the Securities Act registration statements filed
by first-time registrants with the Commission. The proposed amendments
would also require disclosure of the fees and other charges paid by ADR
holders to depositaries, and any payments made by depositaries to the
foreign issuers whose securities underlie the ADRs. In addition, we are
proposing to amend Form 20-F to require disclosure in the annual report
about the significant differences in the corporate governance practices
of listed foreign private issuers compared to the corporate governance
practices applicable to domestic companies under the relevant
exchange's listing standards. Another proposed amendment would
eliminate an instruction to Item 17 of Form 20-F that permits certain
foreign private issuers to omit segment data from the U.S. GAAP
financial statements. The proposed amendments to Form 20-F would also
amend that Form to require foreign private issuers to present
information about a significant, completed acquisition that is
significant at the 50% or greater level, calculated based on assets or
income from continuing operations, in their annual reports on that
Form.
    In addition to these amendments, we are proposing to eliminate the
availability of the limited U.S. GAAP reconciliation option that is
contained in Item 17 of Form 20-F for foreign private issuers that are
only listing a class of securities on a U.S. national securities
exchange, or only registering a class of equity securities under
Section 12(g) of the Exchange Act, and not conducting a public
offering. The proposed amendments would apply not only to registration
statements filed on Form 20-F in the circumstances described above, but
also to annual reports filed on that Form. Related to this proposed
amendment, we are proposing to eliminate the Item 17 limited
reconciliation option for certain non-capital raising offerings, such
as offerings pursuant to dividend reinvestment plans, offerings upon
the conversion of securities, or offerings of investment grade
securities. The Securities Act registration statement forms available
to foreign private issuers (Form F-1, F-3 and F-4) would be amended
accordingly.
A. Expected Benefits
    We anticipate that the proposed amendments to Form 20-F and the
related amendments to the Securities Act registration statement forms
available to foreign private issuers would provide a significant
benefit to U.S. investors by providing them with enhanced disclosure
that is more similar to the disclosures provided by domestic issuers,
as well as disclosure on an accelerated basis that is more comparable
to the timeframe within which domestic issuers file annual reports.
Because of the Commission's integrated disclosure system, in which
approximately the same information is provided in both the primary and
secondary markets, the disclosure requirements contained in Form 20-F
are often more comprehensive than the disclosures required by foreign
securities regulators. For example, although many foreign regulators
require audited financial statements and a form of management's report
in annual reports, they do not require disclosure about executive
compensation, description about the issuer's business, or a
Management's Discussion and Analysis (MD&A). These additional
disclosures are required in the Form 20-F annual reports that foreign
private issuers file with the Commission.
    Based on our analysis of a sample of Form 20-F annual reports filed
with the Commission in the past few years, we estimate that
approximately one-third of all such filers currently file Form 20-F
annual reports with us within 120 days after their fiscal year-end. The
proposed amendment to accelerate the due date for Form 20-F annual
reports would thus affect a majority of the foreign private issuers
that file on Form 20-F. As a result of the accelerated deadline,
investors may be better able to compare the performance of foreign and
domestic issuers, since information about both will be provided on a
more contemporaneous basis.
    The proposed amendments to require additional disclosure in Form
20-F annual reports should help investors better compare foreign and
domestic issuers. Currently, domestic issuers provide disclosure about
changes in and disagreements with their certifying accountant on a Form
8-K current report. Listed domestic issuers are also required to comply
with the corporate governance requirements of the U.S. exchange on
which their securities are listed, although foreign private issuers
whose securities are listed on the same exchange are exempt. The
proposed amendments would provide investors with more comparable
information about foreign private issuers regarding possible audit
opinion shopping and corporate governance practices.
    The proposed amendments to require disclosure about ADR fees and
payments made by depositaries to the foreign issuers whose securities
underlie the ADRs will make this information more readily available to
investors. The placement of this disclosure in annual reports and Form
20-F registration statements should

assist investors in determining the fees related to their investments
in ADRs, including indirect costs that may be imposed on them if the
depositary bank passes along the cost of its payments to foreign
issuers to ADR holders. This should better enable investors to
determine the value of investing in the ADRs of foreign issuers.
    Several of the proposed amendments to Item 17 of Form 20-F may also
help ensure that all foreign private issuers provide the same level of
financial information, thereby facilitating a readier comparison across
all issuers. This could, as a consequence, increase the attractiveness
of these companies to investors. For example, the proposed amendments
would eliminate the availability of the limited U.S. GAAP
reconciliation option in Item 17 of Form 20-F for annual reports,
registration statements on Form 20-F that do not involve a public
offering, and Securities Act registration statements for certain non-
capital raising transactions. Currently, most foreign private issuers
that provide U.S. GAAP reconciliation disclose financial information
according to Item 18 of Form 20-F. The proposed amendment would ensure
that all foreign private issuers provide this level of disclosure.
Another proposed amendment would eliminate the instruction to Item 17
of Form 20-F that permits certain foreign private issuers to omit
segment data from their U.S. GAAP financial statements. Although we
estimate that less than 10 foreign private issuers use this
instruction, the instruction creates an anomaly whereby an issuer is
permitted to provide a qualified U.S. GAAP audit report.
    Investors are also expected to benefit from the proposed amendment
to require foreign private issuers to present information about a
highly significant, completed acquisition in their annual reports filed
on Form 20-F. Currently, foreign private issuers are not required to
provide any information about such transactions in their periodic
reports. The proposed amendment would enable investors to receive
historical financial information about the acquired company,
information they currently receive from domestic registrants, but not
from foreign issuers that are acquirers. This information may help
investors to assess the past performance of the acquired entity and its
possible effect on the valuation of the acquiring company.
B. Expected Costs
    Foreign private issuers could incur costs from the proposed
amendments to Form 20-F, and the related amendments to the Securities
Act registration statements available to foreign private issuers. In
order to comply with the proposed accelerated due dates, many foreign
private issuers would likely have to implement new systems for
preparing information during the transition period to the new rules.
They could be required to prepare annual reports on a dual track, one
for the annual report filed with their home country regulator and the
Form 20-F annual report. According to our analysis of a sample of Form
20-F annual reports filed with us, approximately one-fifth of all such
filers file their Form 20-F annual reports within 90 days of their
fiscal year-end, and approximately one-third file their Form 20-F
annual reports within 120 days of their fiscal year-end. The cost of
preparing filings on an accelerated basis may therefore vary among
issuers. In addition, because of the Commission's integrated disclosure
system, in which issuers provide approximately the same disclosures to
both the primary and secondary markets, the disclosures required in
Form 20-F are more substantial than the information required for annual
reports in many foreign jurisdictions. The proposed amendments could
thus result in increased costs for foreign private issuers.
    The proposed amendments to provide additional disclosures in Form
20-F may also impose additional costs on foreign private issuers. With
respect to the proposed disclosure regarding ADR fees and payments made
by depositaries, we note that the information about ADR fees is
provided in the deposit agreement and form of receipt that are attached
as exhibits to the Form F-6 used to register the ADRs under the
Securities Act, as well as in the Securities Act registration statement
related to the offering of the securities underlying the ADRs. Because
the information is already required by the Commission, albeit in
filings that most retail investors are not familiar with, we do not
believe that the requirement to include this information in the foreign
private issuer's annual report on Form 20-F would involve significant
compliance costs.
    In addition, the information about the payments made by
depositaries to foreign private issuers would provide important new
information to investors about incentives used by depositaries that may
encourage foreign private issuers to sell their securities in ADR form
and with a particular depositary bank. If foreign issuers are reluctant
to disclose this information, they could be discouraged from entering
the U.S. markets, or, if they already have established ADR facilities
in the United States, from maintaining their ADR facilities. This would
reduce the opportunities for investors to invest in foreign securities
in the United States.
    Foreign private issuers could incur some costs related to the
proposal to include information about differences in corporate
governance practices for listed foreign private issuers. However, the
U.S. exchanges already require that this information be prepared. For
foreign private issuers that are listed on U.S. exchanges, the proposed
amendment would not involve the collection of new information or
preparation of new disclosure, but would simply require that the
information also be made available in the annual report, where many
investors may expect to see it. As a result, we believe the compliance
costs of this proposed amendment would be relatively small. Under the
proposed amendments, corporate governance information would not be
required for issuers that are not listed on a U.S. exchange.
    The proposed amendments to eliminate the availability of the
limited U.S. GAAP reconciliation contained in Item 17 of Form 20-F, and
to require segment data in U.S. GAAP financial statements could result
in costs for the affected foreign private issuers because they would
now need to collect this information and to prepare additional
disclosure in their Form 20-F annual reports. However, based on our
review of Form 20-F annual report filings made with us for fiscal year
2006, we estimate that most foreign private issuers already provide
financial information according to Item 18 of Form 20-F, and that less
than 10 foreign private issuers would be affected by the requirement to
provide segment data.
    Foreign private issuers would also incur costs in connection with
the proposal to require disclosure about any changes in and
disagreements with the registrant's certifying accountant in Form 20-F
annual reports and in Securities Act registration statements filed by
first-time registrants. In addition to the preparation costs of
including this information in the Form 20-F, the foreign private issuer
could also incur certain costs associated with the proposed requirement
to obtain a letter from its former accountant stating whether it agrees
with the disclosure provided by the issuer in the document filed with
the Commission.
    Foreign private issuers could also incur compliance costs in
connection with the proposal to require information about a highly
significant, completed acquisition in annual reports filed on Form 20-
F. These costs would include,

for example, costs related to the preparation of this information. In
some cases, this requirement could deter and potentially discourage
issuers from effectuating certain transactions because of the
difficulty of obtaining financial information to comply with this
requirement.
    Investors may incur costs to the extent that the amendments to Form
20-F discourage foreign private issuers from registering or maintaining
their registration with the Commission. If foreign private issuers
deregister or do not register their securities under the Securities Act
or the Exchange Act, there may be reduced opportunities for investment
by U.S. investors in the securities of foreign issuers. Although each
of the proposed amendments would affect a different number of foreign
private issuers, for purposes of the Paperwork Reduction Act, we
estimate that these new disclosures would result in an increased
paperwork burden of 34 hours for all respondents and $9,516,990 for
Form 20-F.

3. Exchange Act Rule 13e-3

A. Expected Benefits
    We believe that the proposal to amend Exchange Act Rule 13e-3,
which pertains to going private transactions by reporting issuers or
their affiliates, to reflect the recently adopted rules pertaining to
the ability of foreign private issuers to terminate their Exchange Act
registration and reporting obligations would benefit investors. The
proposed amendment would help ensure that Rule 13e-3 covered the types
of transactions that were intended when the Commission first adopted
the Rule. Investors would benefit because more foreign private issuers
are expected to be able to terminate their registration and reporting
obligations under the Exchange Act as a result of these recently
adopted amendments. If more foreign private issuers decide to conduct
going private transactions to terminate their registration or reporting
obligations, the proposed amendment to Rule 13e-3 would require more
foreign private issuers to comply with that Rule and to file a Schedule
13E-3, as required by that Rule. Investors would benefit from the
additional disclosures that would be provided.
B. Expected Costs
    Foreign private issuers may incur additional costs in connection
with the proposed amendment to Rule 13e-3(a)(3)(ii)(A) if Rule 13e-3 is
more easily triggered because of the reference to the new termination
of registration and reporting requirements that apply to foreign
private issuers. These costs would include, for example, the cost of
preparing, filing and disseminating a Schedule 13E-3, as well as any
required amendments to that Schedule, with the Commission.
Comments Solicited
    We solicit comment on the costs and benefits to U.S. and other
investors, foreign private issuers and others who may be affected by
the proposed amendments. We request your views on the costs and
benefits described above, as well as on any other costs and benefits
that could result from adoption of the proposed amendments. We also
request data to quantify the costs and value of the benefits
identified. In particular, we solicit comment on:
     The number of current foreign private issuers that are
expected to be affected by the proposed amendments;
     The estimated U.S dollar cost to foreign issuers as a
result of the proposed amendment to accelerate the due date for filing
Form 20-F annual reports;
     The number of current foreign issuers who do not already
provide financial information according to Item 18 of Form 20-F; and
     How investors would be affected both directly and
indirectly from the proposed amendments, as discussed in this section.

VII. Consideration of Impact on the Economy, Burden on Competition, and
Promotion of Efficiency, Competition, and Capital Formation

    For purposes of the Small Business Regulatory Enforcement Fairness
Act of 1996 (``SBREFA''),\123\ we solicit data to determine whether the
proposals constitute a ``major'' rule. Under SBREFA, a rule is
considered ``major'' where, if adopted, it results or is likely to
result in: an annual effect on the economy of $100 million or more
(either in the form of an increase or a decrease); a major increase in
costs or prices for consumers or individual industries; or significant
adverse effects on competition, investment or innovation. We request
comment on the potential impact of the proposals on the economy on an
annual basis. Commenters are requested to provide empirical data and
other factual support for their views if possible.
---------------------------------------------------------------------------

    \123\ Pub. L. 104-121, Title II, 110 Stat. 857 (1996) (codified
in various sections of 5 U.S.C., 15 U.S.C. and as a note to 5 U.S.C.
601).
---------------------------------------------------------------------------

    Section 2(b) of the Securities Act \124\ and Section 3(f) of the
Exchange Act \125\ require us, when engaging in rulemaking that
requires us to consider or determine whether an action is necessary or
appropriate in the public interest, to consider whether the action will
promote efficiency, competition, and capital formation. When adopting
rules under the Exchange Act, Section 23(a)(2) of the Exchange Act
\126\ requires us to consider the impact that any new rule would have
on competition. In addition, Section 23(a)(2) prohibits us from
adopting any rule that would impose a burden on competition not
necessary or appropriate in furtherance of the purposes of the Exchange
Act.
---------------------------------------------------------------------------

    \124\ 15 U.S.C. 77b(b).
    \125\ 15 U.S.C. 78c(f).
    \126\ 15 U.S.C. 78w(a)(2).
---------------------------------------------------------------------------

    The purpose of the proposed amendments to Securities Act Rule 405
and Exchange Act Rule 3b-4, which would permit foreign issuers to
assess their eligibility to use the special forms and rules available
to foreign private issuers once a year, are expected to facilitate
capital formation by foreign issuers in the U.S. capital markets. The
proposed amendments should reduce regulatory compliance burdens for
foreign private issuers that rely on the proposed amendments because of
the reduction in monitoring costs. Reduced compliance burdens are
expected to lower the cost of raising capital in the Unites States for
those issuers. In addition, the competitiveness of the U.S. markets may
be enhanced because the reduced monitoring costs may make the markets
more attractive to them. The reduction in compliance burdens may also
promote efficiency because foreign issuers would no longer need to
continuously test their qualification as foreign private issuers.
    The proposed amendments to Form 20-F would accelerate the reporting
deadline for annual reports on Form 20-F. The proposed amendments to
Exchange Act Rules 13a-10 and 15d-10 would conform the due dates for
transition reports filed on Form 20-F with the proposed due dates for
annual reports on Form 20-F. Several of the proposed amendments to Form
20-F would require more disclosure in the annual reports filed by
foreign private issuers. The disclosures required would include
information about any changes in and disagreements with the
registrant's certifying accountant, ADR fees and payments made by
depositaries to the foreign issuers whose securities underlie the ADR,
information about corporate governance, and information about highly
significant, completed acquisitions. In addition, the proposed
amendments would eliminate the availability of the limited U.S. GAAP
reconciliation option contained in Item 17 of Form 20-F, and would
eliminate

an instruction to Item 17 of that Form, which permits certain foreign
private issuers to omit segment data from their U.S. GAAP financial
statements.
    These proposed amendments would create a more level playing field
between foreign private issuers and U.S. issuers because they would
require disclosures from foreign private issuers that are currently
required of domestic issuers. Foreign private issuers that file annual
reports on Form 20-F would also be required to provide these annual
reports in a timeframe that is closer to the annual report due dates
imposed on domestic issuers. As a result, the proposed amendments
should put foreign private issuers and domestic issuers in a more
similar position with respect to their compliance obligations under the
Commission's regulations, although the incremental costs of complying
with these proposed amendments may also create a disincentive for some
foreign private issuers to enter the U.S. capital markets.
    The proposed amendments may also facilitate capital formation by
foreign companies in the U.S. capital markets by enabling investors to
obtain more information about these companies in a timeframe that would
make the information useful to them and in a manner that would allow
for greater comparability to domestic issuers. This could affect the
allocation of capital between foreign private issuers and domestic
issuers.
    The proposed amendments to Exchange Act Rule 13e-3, which reflect
the newly adopted rules pertaining to the termination and
deregistration of the reporting obligations of foreign private issuers,
could require more foreign private issuers to comply with that Rule and
to file a Schedule 13E-3 as a result if more foreign private issuers
decide to conduct going private transactions to terminate their
registration and reporting obligations. This additional compliance
obligation could create a disincentive for foreign private issuers to
enter the U.S. markets.
    We solicit comment on whether the proposed rules would impose a
burden on competition or whether they would promote efficiency,
competition and capital formation. For example, would the proposals
have an adverse effect on competition that is neither necessary nor
appropriate in furtherance of the purposes of the Exchange Act? Would
the proposals create an adverse competitive effect on U.S. issuers or
on foreign issuers? Commenters are requested to provide empirical data
and other factual support for their views if possible.

VIII. Regulatory Flexibility Act Certification

    The Commission hereby certifies, pursuant to 5 U.S.C. 605(b), that
the amendments to Rule 405 of Regulation C, Form F-1, Form F-3, and
Form F-4 under the Securities Act, and Form 20-F, Rule 3b-4, Rule 13a-
10, Rule 13e-3 and Rule 15d-10 under the Exchange Act contained in this
release, if adopted, would not have a significant economic impact on a
substantial number of small entities. The proposed amendments would:
(1) Amend Rule 405 of Regulation C under the Securities Act to permit
foreign issuers to test their qualification to use the forms and rules
available to foreign private issuers on an annual basis, rather than on
the continuous basis that is currently required; (2) Amend Form 20-F to
accelerate the filing deadline for annual reports filed by foreign
private issuers on Form 20-F, subject to a two-year transition period,
and amend Exchange Act Rules 13a-10 and 15d-10 so that the deadline for
transition reports filed by foreign private issuers on Form 20-F is the
same as the deadline for annual reports filed on Form 20-F; (3) Amend
Form 20-F by eliminating an instruction to Item 17 of that Form, which
permits certain foreign private issuers to omit segment data from their
U.S. GAAP financial statements; (4) Amend Rule 13e-3, which pertains to
going private transactions by reporting issuers or their affiliate, to
reflect the recently adopted rules pertaining to the ability of foreign
private issuers to terminate their Exchange Act registration and
reporting obligations; (5) Amend Form 20-F and Forms F-1, F-3 and F-4
to require foreign private issuers that are required to provide a U.S.
GAAP reconciliation to do so pursuant to Item 18 of Form 20-F; (6)
Amend Form 20-F to require foreign private issuers to disclose
information about a change in the issuer's certifying accountant, the
fees and charges paid by ADR holders, the payments made by the
depositary to the foreign issuer whose securities underlie the ADRs,
and for listed issuers, the differences in the foreign private issuer's
corporate governance practices and those applicable to domestic
companies under the relevant exchange's listing rules; and (7) Amend
Form 20-F to require foreign private issuers to provide certain
financial information in their annual reports on Form 20-F about a
significant, completed acquisition that is significant at the 50% or
greater level when that acquisition is completed after the issuer's
first fiscal quarter.
    Based on an analysis of the language and legislative history of the
Regulatory Flexibility Act, Congress does not appear to have intended
the Act to apply to foreign issuers. The entities directly affected by
the proposed amendments will fall outside the scope of the Act. For
this reason, the proposed amendments should not have a significant
economic impact on a substantial number of small entities.
    We solicit written comments regarding this certification. We
request that commenters describe the nature of any impact on small
entities and provide empirical data to support the extent of the
impact.

IX. Statutory Authority and Text of the Proposed Amendments

    We are proposing amendments to the rules and forms pursuant to the
authority set forth in Sections 6, 7, 10 and 19 of the Securities Act,
as amended, and Sections 3, 12, 13, 15, 23 and 36 of the Exchange Act,
as amended.

List of Subjects in 17 CFR Parts 230, 239, 240 and 249

    Reporting and recordkeeping requirements, Securities.

Text of the Proposed Amendments

    For the reasons set out in the preamble, the Commission proposes to
amend Title 17, Chapter II of the Code of Federal Regulations as
follows:

PART 230--GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933

    1. The authority citation for Part 230 continues to read in part as
follows:

    Authority: 15 U.S.C. 77b, 77c, 77d, 77f, 77g, 77h, 77j, 77r,
77s, 77z-3, 77sss, 78c, 78d, 78j, 78l, 78m, 78n, 78o, 78t, 78w,
78ll(d), 78mm, 80a-8, 80a-24, 80a-28, 80a-29, 80a-30, and 80a-37,
unless otherwise noted.
* * * * *
    2. Section 230.405 is amended by revising the definition of
``foreign private issuer'' to read as follows:

Sec.  230.405  Definition of terms.

* * * * *
    Foreign private issuer. (1) The term foreign private issuer means
any foreign issuer other than a foreign government except an issuer
meeting the following conditions as of the last business day of its
most recently completed second fiscal quarter:
    (i) More than 50 percent of the outstanding voting securities of
such issuer are directly or indirectly owned of record by residents of
the United States; and
    (ii) Any of the following:

    (A) The majority of the executive officers or directors are United
States citizens or residents;
    (B) More than 50 percent of the assets of the issuer are located in
the United States; or
    (C) The business of the issuer is administered principally in the
United States.
    (2) In the case of a new registrant with the Commission, the
determination of whether an issuer is a foreign private issuer shall be
made as of a date within 30 days prior to the issuer's filing of an
initial registration statement under either the Act or the Securities
Exchange Act of 1934.
    (3) Once an issuer qualifies as a foreign private issuer, it will
immediately be able to use the forms and rules designated for foreign
private issuers until it fails to qualify for this status at the end of
its most recently completed second fiscal quarter. An issuer's
determination that it fails to qualify as a foreign private issuer
governs its eligibility to use the forms and rules designated for
foreign private issuers beginning on the first day of the fiscal year
following the determination date. Once an issuer fails to qualify for
foreign private issuer status, it will remain unqualified unless it
meets the requirements for foreign private issuer status as of the last
business day of its second fiscal quarter.
* * * * *

PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

    3. The authority citation for part 239 continues to read in part as
follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3,
77sss, 78c, 78l, 78m, 78n, 78o(d), 78u-5, 78w(a), 78ll, 78mm, 80a-
2(a), 80a-3, 80a-8, 80a-9, 80a-10, 80a-13, 80a-24, 80a-26, 80a-29,
80a-30, and 80a-37, unless otherwise noted.
* * * * *
    4. Form F-1 (referenced in Sec.  239.31) is amended by revising
paragraph (c) and Instruction 2 to Item 4 of Part I and removing the
Instruction to Item 4A of Part I. The revisions read as follows:

    Note: The text of Form F-1 does not, and the amendments thereto
will not, appear in the Code of Federal Regulations.

Form F-1--Registration Statement Under the Securities Act of 1933

* * * * *

Part I

* * * * *

Item 4. Information With Respect to the Registrant and the Offering

    Furnish the following information with respect to the Registrant.
* * * * *
    (c) Information required by Item 16F of Form 20-F.
* * * * *

Instructions

* * * * *
    2. You do not have to provide the information required by Item 4(c)
if you are required to file reports under sections 13(a) or 15(d) of
the Exchange Act.
* * * * *
    5. Form F-3 (referenced in Sec.  239.33) is amended by:
    a. In General Instruction I.B.2., removing the phrase ``may comply
with Item 17 or 18'' in the last sentence and adding in its place
``must comply with Item 18'';
    b. In General Instruction I.B.3., removing the phrase ``may comply
with Item 17 or 18'' in the first sentence and adding in its place
``must comply with Item 18'';
    c. In General Instruction I.B.4., removing the phrase ``may comply
with Item 17 or 18'' in the second sentence and adding in its place ``
must comply with Item 18''; and
    d. Revising the Instruction to Item 5 to read as follows:

    Note: The text of Form F-3 does not, and the amendments thereto
will not, appear in the Code of Federal Regulations.

Form F-3--Registration Statement Under the Securities Act of 1933

* * * * *

Item 5. Material Changes

* * * * *
    Instruction. Financial statements or information required to be
furnished by this Item shall be reconciled pursuant to Item 18 of Form
20-F.
* * * * *
    6. Form F-4 (referenced in Sec.  239.34) is amended by:
    a. Revising Instruction 1 to Item 11;
    b. Revising Item 12(b)(2) introductory text and Item 12(b)(3)(vii);
    c. In Item 12(b)(3)(viii), removing the period and adding in its
place ``; and'' and adding Item 12(b)(3)(ix);
    d. Adding an Instruction to Item 12;
    e. Revising Instruction 1 to Item 13;
    f. Revising Item 14(h);
    g. In Item 14(i), removing the period and adding in its place ``;
and'';
    h. Adding Item 14(j);
    i. Adding ``1'' before the existing instruction for Instructions to
Item 14 and adding an Instruction 2; and
    j. In Item 17(b)(5)(ii), removing the period and adding in its
place ``; and'' and adding Item 17(b)(6).
    The revisions and additions read as follows:

    Note: The text of Form F-4 does not, and the amendments thereto
will not, appear in the Code of Federal Regulations.

Form F-4--Registration Statement Under the Securities Act of 1933

* * * * *

Item 11. Incorporation of Certain Information by Reference

* * * * *

Instructions

    1. All annual reports or registration statements incorporated by
reference pursuant to Item 11 of this Form shall contain financial
statements that comply with Item 18 of Form 20-F.
* * * * *

Item 12. Information With Respect to F-3 Registrants

* * * * *
    (b) * * *
    (2) Include financial statements and information as required by
Item 18 of Form 20-F. In addition, provide:
    (3) * * *
    (vii) Financial statements required by Item 18 of Form 20-F, and
financial information required by Rule 3-05 and Article 11 of
Regulation S-X with respect to transactions other than that pursuant to
which the securities being registered are to be issued. (Schedules
required under Regulation S-X shall be filed as ``Financial Statement
Schedules'' pursuant to Item 21 of this Form, but need not be provided
with respect to the company being acquired if information is being
furnished pursuant to Item 17(a) of this Form);
* * * * *
    (ix) Item 16F of Form 20-F, change in registrant's certifying
accountant.

Instruction

    You do not have to provide the information required by Item
12(b)(3)(ix) if you are required to file reports under sections 13(a)
or 15(d) of the Exchange Act.
* * * * *

Item 13. Incorporation of Certain Information by Reference

* * * * *

Instructions

    1. All annual reports incorporated by reference pursuant to Item 13
of this Form shall contain financial statements

that comply with Item 18 of Form 20-F.
* * * * *

Item 14. Information With Respect to Foreign Registrants Other Than F-3
Registrants

* * * * *
    (a) * * *
    (h) Financial statements required by Item 18 of Form 20-F, as well
as financial information required by Rule 3-05 and Article 11 of
Regulation S-X with respect to transactions other than that pursuant to
which the securities being registered are to be issued. (Schedules
required by Regulation S-X shall be filed as ``Financial Statement
Schedules'' pursuant to Item 21 of this Form);
* * * * *
    (j) Item 16F of Form 20-F, change in registrant's certifying
accountant.

Instructions

    1. * * *
    2. You do not have to provide the information required by Item
14(j) if you are required to file reports under sections 13(a) or 15(d)
of the Exchange Act.
* * * * *

Item 17. Information With Respect to Foreign Companies Other Than F-3
Companies

* * * * *
    (b) * * *
    (6) Item 16F(b) of Form 20-F, change in registrant's certifying
accountant.
* * * * *

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF
1934

    7. The authority citation for Part 240 continues to read in part as
follows:

    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3,
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i,
78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5,
78w, 78x, 78ll, 78mm, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4,
80b-11, and 7201 et seq., and 18 U.S.C. 1350, unless otherwise
noted.
* * * * *
    8. Section 240.3b-4 is amended by revising paragraph (c) and adding
paragraphs (d) and (e) to read as follows:

Sec.  240.3b-4  Definition of ``foreign government'', ``foreign
issuer'' and ``foreign private issuer''.

* * * * *
    (c) The term ``foreign private issuer'' means any foreign issuer
other than a foreign government except for an issuer meeting the
following conditions as of the last business day of its most recently
completed second fiscal quarter:
* * * * *
    (d) Notwithstanding paragraph (c) of this part, in the case of a
new registrant with the Commission, the determination of whether an
issuer is a foreign private issuer will be made as of a date within 30
days prior to the issuer's filing of an initial registration statement
under either the Act or the Securities Act of 1933.
    (e) Once an issuer qualifies as a foreign private issuer, it will
immediately be able to use the forms and rules designated for foreign
private issuers until it fails to qualify for this status at the end of
its most recently completed second fiscal quarter. An issuer's
determination that it fails to qualify as a foreign private issuer
governs its eligibility to use the forms and rules designated for
foreign private issuers beginning on the first day of the fiscal year
following the determination date. Once an issuer fails to qualify for
foreign private issuer status, it will remain unqualified unless it
meets the requirements for foreign private issuer status as of the last
business day of its second fiscal quarter.
    9. Section 240.13a-10 is amended by revising paragraph (g)(3) to
read as follows:

Sec.  240.13a-10  Transition reports.

* * * * *
    (g) * * *
    (3) The report for the transition period shall be filed on Form 20-
F responding to all items to which such issuer is required to respond
when Form 20-F is used as an annual report. The financial statements
for the transition period filed therewith shall be audited. The
transition report shall be filed as follows:
    (i) For large accelerated filers and accelerated filers (as defined
in Sec.  240.12b-2), within 90 days after either the close of the
transition period or the date on which the issuer made the
determination to change the fiscal closing date, whichever is later,
for fiscal years ending on or after December 15, 2010; and
    (ii) For all other issuers, within 120 days after either the close
of the transition period or the date on which the issuer made the
determination to change the fiscal closing date, whichever is later,
for fiscal years ending on or after December 15, 2010.
* * * * *
    10. Section 240.13e-3 is amended by revising paragraph
(a)(3)(ii)(A) to read as follows:

Sec.  240.13e-3  Going private transactions by certain issuers or their
affiliates.

    (a) * * *
    (3) * * *
    (ii) * * *
    (A) Causing any class of equity securities of the issuer which is
subject to section 12(b) or section 15(d) of the Act to become eligible
for termination of registration under Rule 12g-4 [Sec.  240.12g-4] or
Rule 12h-6 [Sec.  240.12h-6], or causing the reporting obligations with
respect to such class to become eligible for termination under Rule
12h-6 [Sec.  240.12h-6]; or
* * * * *
    11. Section 240.15d-10 is amended by revising paragraph (g)(3) to
read as follows:

Sec.  240.15d-10  Transition reports.

* * * * *
    (g) * * *
    (3) The report for the transition period shall be filed on Form 20-
F responding to all items to which such issuer is required to respond
when Form 20-F is used as an annual report. The financial statements
for the transition period filed therewith shall be audited. The
transition report shall be filed as follows:
    (i) For large accelerated filers and accelerated filers (as defined
in Sec.  240.12b-2), within 90 days after either the close of the
transition period or the date on which the issuer made the
determination to change the fiscal closing date, whichever is later,
for fiscal years ending on or after December 15, 2010; and
    (ii) For all other issuers, within 120 days after either the close
of the transition period or the date on which the issuer made the
determination to change the fiscal closing date, whichever is later,
for fiscal years ending on or after December 15, 2010.
* * * * *

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

    12. The authority citation for part 249 continues to read in part
as follows:

    Authority: 15 U.S.C. 78a et seq., 7202, 7233, 7241, 7262, 7264,
and 7265; and 18 U.S.C. 1350, unless otherwise noted.
* * * * *
    13. Form 20-F (referenced in Sec.  249.220f) is amended by:
    a. Revising General Instructions A.(b) and E.(c);
    b. Revising Items 12.D and 12.D.3, and Instruction 1 to Item 12;
    c. Adding Item 16F and Instructions to Item 16F;
    d. Adding Item 16G and an Instruction to Item 16G;

    e. Revising Item 17(a);
    f. Removing Instruction 3 to Item 17, and redesignating
Instructions 4, 5 and 6 as 3, 4 and 5; and
    g. Revising the Instruction to Item 18.
    The additions and revisions read as follows:

    Note: The text of Form 20-F does not, and the amendments thereto
will not, appear in the Code of Federal Regulations.

]Form 20-F

* * * * *

General Instructions

A. Who May Use Form 20-F and When It Must Be Filed
* * * * *
    (b) A foreign private issuer must file its annual report on this
Form within the following period:
    (1) For large accelerated filers and accelerated filers (as defined
in Sec.  240.12b-2), within 90 days after the end of the fiscal year
covered by the report for fiscal years ending on or after December 15,
2010; and
    (2) For all other issuers, within 120 days after the end of the
fiscal year covered by the report for fiscal years ending on or after
December 15, 2010.
* * * * *
E. Which Items To Respond to in Registration Statements and Annual
Reports
    (a) * * *
    (c) Financial Statements. An Exchange Act registration statement or
annual report filed on this Form must contain the financial statements
and related information specified in Item 18 of this Form. Note that
Items 17 and 18 may require you to file the financial statements of
other entities in certain circumstances. These circumstances are
described in Regulation S-X.
* * * * *

Item 12. Description of Securities Other Than Equity Securities

* * * * *
    D. American Depositary Shares. If you are registering securities
represented by American depositary receipts in a sponsored facility,
provide the following information.
* * * * *
    3. Describe all fees and charges that a holder of American
depositary receipts may have to pay, either directly or indirectly.
Indicate the type of service, the amount of the fees or charges and to
whom the fees or charges are paid. In particular, provide information
about any fees or charges in connection with (a) depositing or
substituting the underlying shares; (b) receiving or distributing
dividends; (c) selling or exercising rights; (d) withdrawing an
underlying security; (e) transferring, splitting or grouping receipts;
and (f) general depositary services, particularly those charged on an
annual basis.
    In addition, describe all fees and other direct and indirect
payments made by the depositary to the foreign issuer of the deposited
securities.
    Instructions to Item 12:
    1. Except for Item 12.D.3., you do not need to provide the
information called for by this item if you are using this form as an
annual report.
* * * * *

Item 16F. Change in Registrant's Certifying Accountant

    (a)(1) If during the registrant's two most recent fiscal years or
any subsequent interim period, an independent accountant who was
previously engaged as the principal accountant to audit the
registrant's financial statements, or an independent accountant who was
previously engaged to audit a significant subsidiary and on whom the
principal accountant expressed reliance in its report, has resigned (or
indicated it has declined to stand for re-election after the completion
of the current audit) or was dismissed, then the registrant shall:
    (i) State whether the former accountant resigned, declined to stand
for re-election or was dismissed and the date thereof.
    (ii) State whether the principal accountant's report on the
financial statements for either of the past two years contained an
adverse opinion or a disclaimer of opinion, or was qualified or
modified as to uncertainty, audit scope, or accounting principles; and
also describe the nature of each such adverse opinion, disclaimer of
opinion, modification, or qualification.
    (iii) State whether the decision to change accountants was
recommended or approved by:
    (A) Any audit or similar committee of the board of directors, if
the issuer has such a committee; or
    (B) The board of directors, if the issuer has no such committee.
    (iv) State whether during the registrant's two most recent fiscal
years and any subsequent interim period preceding such resignation,
declination or dismissal there were any disagreements with the former
accountant on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreement(s), if not resolved to the satisfaction of the former
accountant, would have caused it to make reference to the subject
matter of the disagreement(s) in connection with its report. Also,
    (A) describe each such disagreement;
    (B) state whether any audit or similar committee of the board of
directors, or the board of directors, discussed the subject matter of
each of such disagreements with the former accountant; and
    (C) state whether the registrant has authorized the former
accountant to respond fully to the inquiries of the successor
accountant concerning the subject matter of each of such disagreements
and, if not, describe the nature of any limitation thereon and the
reason therefore.
    The disagreements required to be reported in response to this Item
include both those resolved to the former accountant's satisfaction and
those not resolved to the former accountant's satisfaction.
Disagreements contemplated by this Item are those that occur at the
decision-making level, i.e., between personnel of the registrant
responsible for presentation of its financial statements and personnel
of the accounting firm responsible for rendering its report.
    (v) Provide the information required by paragraph (a)(1)(iv) of
this Item for each of the kinds of events (even though the registrant
and the former accountant did not express a difference of opinion
regarding the event) listed in paragraphs (a)(1)(v)(A) through (D) of
this section, that occurred within the registrant's two most recent
fiscal years and any subsequent interim period preceding the former
accountant's resignation, declination to stand for re-election, or
dismissal (``reportable events''). If the event led to a disagreement
or difference of opinion, then the event should be reported as a
disagreement under paragraph (a)(1)(iv) and need not be repeated under
this paragraph.
    (A) The accountant's having advised the registrant that the
internal controls necessary for the registrant to develop reliable
financial statements do not exist;
    (B) The accountant's having advised the registrant that information
has come to the accountant's attention that has led it to no longer be
able to rely on management's representations, or that has made it
unwilling to be associated with the financial statements prepared by
management;
    (C)(1) The accountant's having advised the registrant of the need
to expand significantly the scope of its audit, or that information has
come to the accountant's attention during the time period covered by
Item

16F(a)(1)(iv), that if further investigated may:
    (i) Materially impact the fairness or reliability of either: a
previously issued audit report or the underlying financial statements;
or the financial statements issued or to be issued covering the fiscal
period(s) subsequent to the date of the most recent financial
statements covered by an audit report (including information that may
prevent it from rendering an unqualified audit report on those
financial statements); or
    (ii) Cause it to be unwilling to rely on management's
representations or be associated with the registrant's financial
statements; and
    (2) Due to the accountant's resignation (due to audit scope
limitations or otherwise) or dismissal, or for any other reason, the
accountant did not so expand the scope of its audit or conduct such
further investigation; or
    (D)(1) The accountant's having advised the registrant that
information has come to the accountant's attention that it has
concluded materially impacts the fairness or reliability of either (i)
a previously issued audit report or the underlying financial
statements, or (ii) the financial statements issued or to be issued
covering the fiscal period(s) subsequent to the date of the most recent
financial statements covered by an audit report (including information
that, unless resolved to the accountant's satisfaction, would prevent
it from rendering an unqualified audit report on those financial
statements); and
    (2) Due to the accountant's resignation, dismissal or declination
to stand for re-election, or for any other reason, the issue has not
been resolved to the accountant's satisfaction prior to its
resignation, dismissal or declination to stand for re-election.
    (2) If during the registrant's two most recent fiscal years or any
subsequent interim period, a new independent accountant has been
engaged as either the principal accountant to audit the registrant's
financial statements, or as an independent accountant to audit a
significant subsidiary and on whom the principal accountant is expected
to express reliance in its report, then the registrant shall identify
the newly engaged accountant and indicate the date of such accountant's
engagement. In addition, if during the registrant's two most recent
fiscal years, and any subsequent interim period prior to engaging that
accountant, the registrant (or someone on its behalf) consulted the
newly engaged accountant regarding:
    (i) Either: The application of accounting principles to a specified
transaction, either completed or proposed; or the type of audit opinion
that might be rendered on the registrant's financial statements, and
either a written report was provided to the registrant or oral advice
was provided that the new accountant concluded was an important factor
considered by the registrant in reaching a decision as to the
accounting, auditing or financial reporting issue; or
    (ii) Any matter that was either the subject of a disagreement (as
defined in Item 16F(a)(1)(iv) and the related instructions to this
Item) or a reportable event (as described in Item 16F(a)(1)(v), then
the registrant shall:
    (A) So state and identify the issues that were the subjects of
those consultations;
    (B) Briefly describe the views of the newly engaged accountant as
expressed orally or in writing to the registrant on each such issue
and, if written views were received by the registrant, file them as an
exhibit to the annual report requiring compliance with this Item
16F(a);
    (C) State whether the former accountant was consulted by the
registrant regarding any such issues, and if so, provide a summary of
the former accountant's views; and
    (D) Request the newly engaged accountant to review the disclosure
required by this Item 16F(a) before it is filed with the Commission and
provide the new accountant the opportunity to furnish the registrant
with a letter addressed to the Commission containing any new
information, clarification of the registrant's expression of its views,
or the respects in which it does not agree with the statements made by
the registrant in response to Item 16F(a). The registrant shall file
any such letter as an exhibit to the annual report containing the
disclosure required by this Item.
    (3) The registrant shall provide the former accountant with a copy
of the disclosures it is making in response to this Item 16F(a). The
registrant shall request the former accountant to furnish the
registrant with a letter addressed to the Commission stating whether it
agrees with the statements made by the registrant in response to this
Item 16F(a) and, if not, stating the respects in which it does not
agree. The registrant shall file the former accountant's letter as an
exhibit to the annual report or registration statement containing this
disclosure. If the former accountant's letter is unavailable at the
time that the registration statement is filed, then the registrant
shall request the former accountant to provide the letter as promptly
as possible so that the registrant can file the letter with the
Commission within ten business days after the filing of the
registration statement. If the change in accountants occurred less than
30 days prior to the filing of the annual report and the former
accountant's letter is unavailable at the time that the annual report
is filed, then the registrant shall request the former accountant to
provide the letter as promptly as possible so that the registrant can
file the letter with the Commission within ten business days after the
filing of the annual report. In either case, the former accountant may
provide the registrant with an interim letter highlighting specific
areas of concern and indicating that a more detailed letter will be
forthcoming. If not filed with the annual report or registration
statement containing the registrant's disclosure under this Item
16F(a), then the interim letter, if any, shall be filed by the
registrant by amendment promptly.
    (b) If: (1) In connection with a change in accountants subject to
paragraph (a) of this Item 16F, there was any disagreement of the type
described in paragraph (a)(1)(iv) or any reportable event as described
in paragraph (a)(1)(v) of this Item;
    (2) During the fiscal year in which the change in accountants took
place or during the subsequent fiscal year, there have been any
transactions or events similar to those which involved such
disagreement or reportable event; and
    (3) Such transactions or events were material and were accounted
for or disclosed in a manner different from that which the former
accountants apparently would have concluded was required, the
registrant shall state the existence and nature of the disagreement or
reportable event and also state the effect on the financial statements
if the method had been followed which the former accountants apparently
would have concluded was required.
    These disclosures need not be made if the method asserted by the
former accountants ceases to be generally accepted because of
authoritative standards or interpretations subsequently issued.
    Instructions to Item 16F:
    1. If you are filing Form 20-F as a registration statement under
the Exchange Act, you do not have to provide the information required
by Item 16F if you are already required to file reports under sections
13(a) or 15(d) of the Exchange Act. Item 16F applies to all annual
reports filed on Form 20-F.
    2. The disclosure called for by paragraph (a) of this Item need not
be provided if it has been previously reported, as that term is defined
in Rule

12b-2 under the Exchange Act (Sec.  240.12b-2 of this chapter). The
disclosure called for by paragraph (b) of this Item must be furnished,
where required, notwithstanding any prior disclosure about accountant
changes or disagreements.
    3. The information required by paragraph (a) of this Item need not
be provided for a company being acquired by the registrant in a
transaction being registered on Form F-4 that is not subject to the
filing requirements of either section 13(a) or 15(d) of the Exchange
Act.
    4. The term ``disagreements'' as used in this Item shall be
interpreted broadly to include any difference of opinion concerning any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure which (if not resolved to
the satisfaction of the former accountant) would have caused it to make
reference to the subject matter of the disagreement in connection with
its report. It is not necessary for there to have been an argument to
have had a disagreement, merely a difference of opinion. For purposes
of this Item, however, the term ``disagreements'' does not include
initial differences of opinion based on incomplete facts or preliminary
information that were later resolved to the former accountant's
satisfaction by, and providing the registrant and the accountant do not
continue to have a difference of opinion upon, obtaining additional
relevant facts or information.
    5. In determining whether any disagreement or reportable event has
occurred, an oral communication from the engagement partner or another
person responsible for rendering the accounting firm's opinion (or his/
her designee) will generally suffice as the accountant advising the
registrant of a reportable event or as a statement of a disagreement at
the ``decision-making level'' within the accounting firm and require
disclosure under this Item.
    6. The term ``board of directors'' as used in this Item 16F has the
meaning set forth in Sec.  240.10A-3(e)(2).

Item 16G. Corporate Governance

    If the registrant's securities are listed on a national securities
exchange, provide a concise summary of any significant ways in which
its corporate governance practices differ from those followed by
domestic companies under the corporate governance standards of that
exchange.
    Instruction to Item 16G:
    Item 16G only applies to annual reports, and not to registration
statements on Form 20-F. Registrants should provide a brief and general
discussion, rather than a detailed, item-by-item analysis.
* * * * *

Item 17. Financial Statements

    (a) The registrant shall furnish financial statements for the same
fiscal years and accountants' certificates that would be required to be
furnished if the registration statement were on Form 10 or the annual
report on Form 10-K. In addition, in an annual report the registrant
shall furnish the information required by Rule 3-05, for the periods
required by Rule 3-05(b)(2)(iv), and Article 11 of Regulation S-X
(Sec.  210.3-05 and Sec.  210.11 et seq. of this chapter) for any
acquisition completed during the most recent fiscal year covered by the
Form 20-F that is significant under the definition in Rule 1-02(w) of
Regulation S-X (Sec.  210.1-02(w) of this chapter), substituting 50
percent for 10 percent. However, the information required by Rule 3-05
and Article 11 of Regulation S-X is not required in an annual report
filed on Form 20-F if the information has already been provided
previously in a registration statement. In an annual report, the
registrant does not need to provide Rule 3-05 and Article 11 of
Regulation S-X information for probable acquisitions, and does not need
to provide Rule 3-05 and Article 11 of Regulation S-X information for
the aggregation of individually insignificant acquisitions. Schedules
designated by Sec. Sec.  210.12-04, 210.12-09, 210.12-15, 210.12-16,
210.12-17, 210.12-18, 210.12-28, and 210.12-29 of this chapter shall
also be furnished if applicable to the registrant.
* * * * *

Item 18. Financial Statements

* * * * *
    Instruction to Item 18:
    All of the instructions to Item 17 also apply to this Item.
* * * * *

    Dated: February 29, 2008.

    By the Commission.
Nancy M. Morris,
Secretary.
 [FR Doc. E8-4366 Filed 3-11-08; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register: December 14, 2005 (Volume 70, Number 239)]
[Notices]
[Page 73996-73997]
[DOCID:fr14de05-50]

-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket Nos. EC03-131-003; EC03-131-004]

Oklahoma Gas and Electric Company; Notice of Request for Comments

December 8, 2005.
    On July 2, 2004, the Commission approved Oklahoma Gas and Electric
Company's (OG&E) Offer of Settlement in this proceeding subject to
certain modifications. In the Offer of Settlement, OG&E offered a
number of permanent and interim mitigation measures. Among these
mitigation measures was a commitment to construct a 600 MW Bridge
between InterGen's Redbud Energy Project and OG&E's control area that
would create an additional 600 MWs of available transmission capacity.
See Oklahoma Gas and Electric and NRG McClain LLC, 105 FERC ]61,297
(2003), order approving settlement, 108 FERC ]61,004 (2004). On May 31,
2005, OG&E filed a letter informing the Commission that, as of May 19,
2005, all of the facilities that OG&E committed to construct under the
Offer of Settlement were placed into commercial operation.
    A technical conference in this proceeding was held on December 1,
2005 at the Commission's Headquarters, 888 First Street, NE.,
Washington, DC 20426. The technical conference participants discussed
whether the upgrades completed by OG&E resulted in an additional 600
MWs of available transmission capacity, as required in the July 2004
Order. At the conclusion of the conference, the parties agreed to
answer the following questions:
    1. Is an additional 600 MWs of Available Transfer Capability,
achieved by upgrading the transmission system, created when: (a) The
McClain generating units are not running; (b) the McClain generating
units are running to serve OG&E load; or (c) the McClain generating
units are running under operating conditions other than those described
in (a) and (b)? In other words, should the base case be McClain running
with no transmission upgrades or McClain not running with no
transmission upgrades. Provide complete explanatory rationale and
support for how the 600 MWs of Available Transfer Capability is
created.
    2. Explain if there are discrepancies in Available Transfer
Capability, as calculated by OG&E and as calculated by SPP, including
whether the difference (if any) is the result of the use of different
models (planning models vs. operational models) containing different
generation dispatch pattern, different transmission system
configuration, different firm reservations, and different generation
and transmission outages.
    3. Were there any firm reservations, posted on the SPP OASIS after
the July 2004 Order and prior to Redbud's transmission request in June
2005, by Redbud or any other party that would have reduced the
Available Transfer Capability from Redbud to OG&E's transmission
system?
    4. In addition to the previously disclosed non-firm reservation
that was not removed from the SPP study in response to Redbud's June
2005 request, were there any other non-firm reservations which were not
removed from the ATC studies performed by OG&E and SPP.
    5. Assuming the transmission upgrades created an additional 600 MWs
of Available Transfer Capability, explain what happened to the
Available Transfer Capability from the time OG&E placed it into service
and when SPP made it available for transmission use.
    Comments in response to these questions are due on or before
December 16, 2005, and reply comments are due on or before January 20,
2006. Comments must refer to Docket Nos. EC03-131-003 and EC03-131-004,
and

must include the commenters' name, the organization they represent, if
applicable, and their address. Commenters should limit their answers to
the five specific questions identified above. Commentors may include
any additional pertinent information that will aid the Commission in
evaluating their responses to these five questions. Commentors may not
raise any new issues. The commentors should double space their
comments.
    Comments may be filed on paper or electronically via the eFiling
link on the Commission's Web site at http://www.ferc.gov. The

Commission accepts most standard word processing formats and commenters
may attach additional files with supporting information in certain
other file formats. Commenters filing electronically do not need to
make a paper filing. Commenters that are not able to file comments
electronically must send an original and 14 copies of their comments
to: Federal Energy Regulatory Commission, Office of the Secretary, 888
First Street, NE., Washington, DC 20426.
    All comments will be placed in the Commission's public files and
may be viewed, printed, or downloaded remotely as described below.
Commenters must serve copies of their comments on the other commenters.
    In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
Internet through the Commission's home page http://www.ferc.gov and in

the Commission's Public Reference Room during normal business hours
(8:30 a.m. to 5 p.m. Eastern time) at 888 First Street, NE., Room 2-A,
Washington, DC 20426.
    From the Commission's home page on the Internet, this information
is available in the Commission's document management system, eLibrary.
The full text of this document is available on eLibrary in PDF and
Microsoft Word format for viewing, printing, and/or downloading. To
access this document in eLibrary, type the docket number (excluding the
last three digits) in the docket number field.
    User assistance is available for eLibrary and the Commission's web
site during normal business hours. For assistance, please contact the
Commission's Online Support at 1-866-208-3676 (toll free) or 202-502-
6652 (e-mail at<EMAIL_ADDRESS>or the Public Reference
Room at<PHONE_NUMBER>, TTY<PHONE_NUMBER>, e-mail at
<EMAIL_ADDRESS>Questions should be directed to: David

Hunger<EMAIL_ADDRESS>Office of Markets Tariffs and Rates,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426.<PHONE_NUMBER>.

Magalie R. Salas,
Secretary.
[FR Doc. E5-7309 Filed 12-13-05; 8:45 am]

BILLING CODE 6717-01-P