exchanges are registered under Section 6(b) of the Exchange Act and
therefore subject to more rigorous requirements than non-registered
domestic exchanges. Cover page disclosure of these other exchanges
might, in the commenter's view, give them the ``imprimatur'' of a
national securities exchange, thus complicating the disclosure
rather than streamlining it.
---------------------------------------------------------------------------

    We are adopting amended Item 501(b)(4), as proposed. We continue to
believe, as stated in the Proposing Release, that investors would
benefit from the addition of this information.\151\ In adopting this
disclosure requirement, we considered the concern that the presentation
of this information on the prospectus cover page might suggest to some
investors that the registrant's principal United States market, while
not a national securities exchange, carries the imprimatur of an
exchange registered under Section 6(b) of the Exchange Act. It is not
clear, however, that providing the name of the principal market on the
prospectus cover page, in and of itself, is sufficient to create an
inference about the quality of the market, or that such identification
carries any implication about the market that would not already be
produced by identification of the market under the existing prospectus
disclosure requirements of Item 202 and Item 508 of Regulation S-
K.\152\ Therefore, we do not think that there is a significant risk
that investors will equate the principal market or markets listed on
the cover page with a national stock exchange.
---------------------------------------------------------------------------

    \151\ See Proposing Release, supra note 5, Section II.D.1.c. at
50998.
    \152\ Item 202 [17 CFR 229.202] requires a description of the
registrant's securities, including relevant market information. Item
508 [17 CFR 229.508] pertains to disclosure about the plan of
distribution of the securities offering, including identification of
the exchange, if any, on which the securities are to be offered.
---------------------------------------------------------------------------

iv. Prospectus ``Subject to Completion'' Legend (Item 501(b)(10))
    Item 501(b)(10) requires a registrant that is using a preliminary
prospectus to include a legend advising readers that the information
will be amended or completed. The legend also must include a statement
that the prospectus is not an offer to sell or a solicitation of an
offer to buy securities in any state where the offer or sale is not
permitted. The latter statement was introduced in 1958 to harmonize the
legend with what was required by state securities administrators at the
time.\153\
---------------------------------------------------------------------------

    \153\ See Amendment of Rules 134 and 433, Release No. 33-3885
(Jan. 7, 1958) [23 FR 184 (Jan. 10, 1958)]. This requirement was
originally in Rule 433, a predecessor to the current requirement.
---------------------------------------------------------------------------

    The legend requirement has remained mostly unchanged since 1958,
even after the National Securities Markets Improvement Act (``NSMIA'')
allowed for preemption of state blue sky laws in many offerings.\154\
The Commission proposed to amend Item 501(b)(10) to permit registrants
to exclude from the prospectus the portion of the legend relating to
state law for offerings that are not prohibited by state blue sky laws.
This change would allow for a more tailored prospectus cover page in
recognition of the changes to securities law brought by NSMIA.
---------------------------------------------------------------------------

    \154\ Public Law 104-290, 110 Stat. 3416 (1996).
---------------------------------------------------------------------------

    The Commission also proposed to streamline Item 501(b) by
consolidating existing Item 501(b)(11), regarding the use of Rule 430A,
into Item 501(b)(10) for the sake of simplicity without substantive
change.
    A number of commenters supported the amendments to Item 501(b)(10)
that would simplify the ``subject to completion'' legend on preliminary
prospectuses, and no commenters opposed these amendments.\155\
Therefore, and for the reasons noted in the Proposing Release, we are
adopting the revisions to Item 501(b)(10) as proposed.
---------------------------------------------------------------------------

    \155\ See letters from CCMC, Cravath, Fenwick, and Sullivan.
---------------------------------------------------------------------------

b. Risk Factors (Item 503(c))
    Item 503(c) requires disclosure of the most significant factors
that make an offering speculative or risky.\156\ This risk factor
disclosure was initially called for only in the offering context,\157\
but in 2005 the risk factor disclosure requirements were extended to
periodic reports and registration statements on Form 10.\158\
Consistent with this change, the Commission proposed to relocate Item
503(c) to new Item 105, as Subpart 100 covers a broad category of
business information and is not limited to offering-related
disclosure.\159\
---------------------------------------------------------------------------

    \156\ 17 CFR 229.503(c).
    \157\ See Guides for Preparation and Filing of Registration
Statements, Release No. 33-4666 (Feb. 7, 1964) [29 FR 2490 (Feb. 15,
1964)] and Guides for Preparation and Filing of Registration
Statements, Release No. 33-4936 (Dec. 9, 1968) [33 FR 18617 (Dec.
17, 1968)].
    \158\ See Securities Offering Reform, Release No. 33-8591 (July
19, 2005) [70 FR 44722 (Aug. 3, 2005)] (``Securities Offering Reform
Adopting Release'').
    \159\ Additionally, the proposed amendments use the term
``registrant'' instead of ``issuer.'' Use of and reference to
``registrant'' instead of ``issuer'' was intended to better reflect
the application of risk factor disclosure outside of the offering
context. The term ``registrant'' is defined under both the Exchange
Act and Securities Act. See Rule 12b-2 [17 CFR 240.12b-2] and Rule
405 [17 CFR 230.405]. The Commission also proposed amendments to
several Commission forms that require risk factor disclosure and
reference Item 503(c). The proposed amendments would revise
references to Item 503 to specify new Item 105. A number of forms
that require risk factor disclosure do not reference Item 503(c).
The proposed amendments did not include revisions to these forms.
For example, Forms 10-Q and 20-F require risk factor disclosure but
do not reference item 503(c).

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

    The Commission also proposed amendments that would eliminate the
specific risk factor examples that are currently enumerated in Item
503(c). Although Item 503(c) is principles-based, and the Commission
has eschewed ``boiler plate'' risk factors that are not tailored to the
unique circumstances of each registrant, the following examples of
factors that may make an offering speculative or risky have remained
unchanged since the Commission first published guidance on risk factor
disclosure in 1964: \160\
---------------------------------------------------------------------------

    \160\ See Guides for Preparation and Filing of Registration
Statements, Release No. 33-4666 (Feb. 7, 1964) [29 FR 2490 (Feb. 15,
1964)].
---------------------------------------------------------------------------

     A registrant's lack of an operating history;
     a registrant's lack of profitable operations in recent
periods;
     a registrant's financial position;
     a registrant's business or proposed business; and
     the lack of a market for a registrant's common equity
securities or securities convertible into or exercisable for common
equity securities.
    As discussed in the Proposing Release, the Commission's principles-
based approach to risk factor disclosure is not consonant with the
item's list of examples of material risks.\161\ These examples may not
apply to all registrants and may not correspond to the material risks
of any particular registrant. In addition, the inclusion of these
examples could suggest that a registrant must address each one in its
risk factor disclosures, regardless of the significance to its
business. Finally, the Commission was concerned that the inclusion of
any examples in Item 503(c), whether to illustrate the specific kinds
of risks that should be disclosed or generic risks that should be
avoided, could anchor or skew the registrant's risk analysis in the
direction of the examples.\162\
---------------------------------------------------------------------------

    \161\ See Proposing Release, supra note 5, Section II.D.2. at
50998-10.
    \162\ See Proposing Release, supra note 5, at n. 145.
---------------------------------------------------------------------------

    Numerous commenters supported the proposed amendments to relocate
the risk factor disclosure requirements from Item 503(c) to new Item
105 and eliminate the examples of risk factors that currently appear in
the rule.\163\ Commenters generally agreed that the examples are not
helpful because they are written generically and, as such, are not well
suited to the particular circumstances and material risks of individual
registrants. Some commenters pointed out that the examples may even
prompt registrants to include risk factors that address the risks
highlighted in the examples even if they are not material to their
business.\164\ One commenter opposed the elimination of examples in
Item 503(c) because, in its view, the examples are helpful guidance
that brings focus to the risk factor disclosures.\165\ The commenter
suggested that eliminating the examples may not further the
Commission's objective of eliciting more specific and relevant risk
factor disclosure.
---------------------------------------------------------------------------

    \163\ See letters from American Fuel, BDO, CAQ, Cravath, Edison
Electric Institute & American Gas Association, E&Y, Fenwick,
Financial Executives, PNC Financial Services Group (``PNC''), Reed
Smith, SIFMA, Sullivan, and UnitedHealth.
    \164\ See, e.g., letters from Reed Smith and SIMFA.
    \165\ See letter from CII.
---------------------------------------------------------------------------

    We are adopting the amendments as proposed. With respect to the
elimination of the specific examples of material risks currently found
in Item 503(c), we continue to think that retaining these examples,
which have remained unchanged since they were first articulated in
1964, would be inconsistent with the Commission's emphasis on
principles-based requirements that encourage registrants to provide
risk disclosure that is more precisely calibrated to their particular
circumstances and therefore more meaningful to investors. By removing
this language from the risk factor disclosure rules, we seek to
encourage registrants to focus on their own risk identification
processes.
c. Plan of Distribution (Item 508)
    Item 508 requires disclosure about the plan of distribution for
securities in an offering, including information about underwriters.
Paragraph (a) requires disclosure about the principal underwriters and
any underwriters that have a material relationship with the registrant,
while paragraph (h) requires disclosure of the discounts and
commissions to be allowed or paid to dealers. If a dealer is paid any
additional discounts or commissions for acting as a ``sub-
underwriter,'' paragraph (h) allows the registrant to include a general
statement to that effect without giving the additional amounts to be
sold.
    ``Sub-underwriter'' is not a defined term, and its application may
be unclear. ``Principal underwriter,'' however, is defined in
Regulation C as ``an underwriter in privity of contract with the issuer
of the securities as to which he is an underwriter.'' \166\ The
Commission accordingly proposed to amend Rule 405 to define the term
``sub-underwriter'' as a dealer that is participating as an underwriter
in an offering by committing to purchase securities from a principal
underwriter for the securities but is not itself in privity of contract
with the issuer of the securities.\167\
---------------------------------------------------------------------------

    \166\ Rule 405.
    \167\ The only other use of the term ``sub-underwriter'' or
``subunderwriter'' in Regulation S-K, the Securities Act rules, or
the Exchange Act rules is in Rule 491. The Commission proposed to
amend Rule 491 to reference ``sub-underwriter,'' consistent with the
proposed amendments to Rule 405. The proposed definition of sub-
underwriter would not change the meaning of that term in Rule 491.
---------------------------------------------------------------------------

    A number of commenters supported the proposed amendments to Rule
405 and no commenters opposed them.\168\ We are therefore adopting the
amendment to add the definition of ``sub-underwriter'' to Rule 405, as
proposed.
---------------------------------------------------------------------------

    \168\ See letters from CCMC, Cravath, and Sullivan.
---------------------------------------------------------------------------

d. Undertakings (Item 512)
    Item 512 provides undertakings that a registrant must include in
Part II of its registration statement, depending on the type of
offering. As further described in the Proposing Release, the Commission
proposed the following amendments to eliminate undertakings that are
duplicative of other rules or that have become unnecessary due to
developments since their adoption.\169\ Specifically, the Commission
proposed to eliminate Item 512(c) \170\ in its entirety because it is
no longer necessary,\171\ and proposed to eliminate the Item 512(d),
Item 512(e), and Item 512(f) undertakings, because they are
obsolete.\172\
---------------------------------------------------------------------------

    \169\ See Proposing Release, supra note 5, Section II.D.4. at
51000-1.
    \170\ 17 CFR 229.512(c).
    \171\ See Proposing Release, supra note 5, Section II.D.4. at
51000. Item 512(c) sets forth undertakings that a registrant must
include if it registers a warrant or rights offering to existing
security holders and the securities not purchased by those security
holders will be reoffered to the public. The Item requires a
registrant to supplement the prospectus to disclose the results of
the subscription offer and the terms of any subsequent reoffer to
the public. If any public reoffer is made on different terms than
the offer to existing security holders, the registrant must
undertake to file a post-effective amendment. The purpose of the
undertaking is to provide current information about warrants or
rights offerings. See FAST ACT Report, supra note 7, at
Recommendation E.8. Given that the registrant would already have to
register and disclose the offering to existing security holders, as
well as the reoffering to the public, the undertaking is duplicative
and unnecessary. Furthermore, disclosure of material changes in the
terms of the offering would also be required as part of the Item
512(a)(1) undertaking, thus obviating the need for Item 512(c).
    \172\ Id. at 51000-1. Item 512(d) is applicable when the
securities to be registered are to be offered at competitive
bidding. Item 512(e) sets forth undertakings that are required if
the registration statement incorporates by reference in the
prospectus all or any part of the annual report to security holders
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Exchange Act. Item 512(f) pertains to equity offerings of
registrants that are not subject to the reporting requirements of
Section 13(a) or 15(d) of the Exchange Act. Each of these items is
no longer necessary because of prior changes in our rules, as
described in the Proposing Release. For example, the undertaking in
Item 512(d) arose from a requirement in the Public Utility Holding
Company Act of 1935 (``PUHCA'') that public utility company
securities be sold through competitive bidding. That requirement was
rescinded in 1994 and PUHCA was repealed by Congress in 2005.

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

    A number of commenters supported the proposed amendments to the
undertakings and no commenters opposed them.\173\ Accordingly, and for
the reasons noted in the Proposing Release, we are amending Item 512 to
remove the undertakings in paragraphs 512(c), (d), (e), and (f), as
proposed.
---------------------------------------------------------------------------

    \173\ See letters from Cravath, FedEx, Nasdaq, Sullivan, and
CCMC.
---------------------------------------------------------------------------

5. Exhibits
a. Description of Registrant's Securities (Item 601(b)(4))
    Item 202 requires registrants to provide a brief description of
their registered capital stock, debt securities, warrants, rights,
American Depositary Receipts, and other securities.\174\ Registrants
provide Item 202 disclosure about registered securities in their
registration statements,\175\ but are not required to provide this
disclosure in their Form 10-K or Form 10-Q.\176\
---------------------------------------------------------------------------

    \174\ Items 202(a)-(d) and (f) [17 CFR 229.202(a)-(d) and (f)].
Item 202(e), ``Market information for securities other than common
equity,'' is outside the scope of this rulemaking; it requires that
if securities other than common stock are to be registered and there
is an established trading market for such securities, registrants
are required to provide market information for such securities
comparable to that required by Item 201(a) of Regulation S-K.
    \175\ Item 202 disclosure is often incorporated by reference
into a registration statement on Form 8-A from a prior registration
statement on Form S-1. See Concept Release, supra note 9, at Section
IV.D.2.
    \176\ Registrants are required to file complete copies of their
articles and bylaws as exhibits to Form 10-K, but they are not
required to provide the descriptions called for by Item 202. See
Item 601(b)(3) [17 CFR 229.601(b)(3)]. Also, under Accounting
Standards Codification (``ASC'') Topic 505-10-50-3, registrants are
required to summarize the ``pertinent rights and privileges of the
various securities outstanding'' in the notes to their financial
statements. ASC Topic 470-10-50-5 requires the same information for
debt securities. While the date of sale is not required, registrants
usually include it in their discussions of the rights and privileges
of securities sold.
---------------------------------------------------------------------------

    The Commission proposed to amend Item 601(b)(4) \177\ to require
registrants to provide the information required by Item 202(a)-(d) and
(f) as an exhibit to Form 10-K, rather than limiting this disclosure to
registration statements.\178\ The proposed amendments were intended to
be in addition to the current requirement to file a complete copy of
the amended articles of incorporation or bylaws under Item 601(b)(3)
\179\ in order to increase investors' ease of access to information
about the rights and obligations of each class of securities
registered.\180\
---------------------------------------------------------------------------

    \177\ 17 CFR 229.601(b)(4).
    \178\ To the extent that a registrant has previously filed an
exhibit to a Form 10-K containing Item 202 disclosure, under the
proposal it could incorporate that exhibit by reference and
hyperlink to the previously filed exhibit in future Form 10-K
filings, assuming that the information contained therein remains
unchanged. See Instruction 3 to proposed Item 601(b)(4)(vi).
    \179\ See Item 601(b)(3) of Regulation S-K [17 CFR
229.601(b)(3)]. The Commission proposed to amend Item 601(b)(4)
instead of Item 601(b)(3) because (b)(4) is consistent with Item
202's requirement to provide a description of capital stock that is
registered, while (b)(3) is specific to the articles of
incorporation and bylaws.
    \180\ Proposed Item 601(b)(4)(vi) would require Item 202
disclosure only for securities that are registered under Section 12
of the Exchange Act. Because Item 202(e) requires Item 201(a) market
information for securities other than common equity where there is
an established trading market for those securities, proposed Item
601(b)(4)(vi) did not include Item 202(e).
---------------------------------------------------------------------------

    We received responses from a number of commenters on the proposal
to require Item 202 information as an exhibit to Form 10-K.\181\
Several commenters supported the Commission's proposal to consolidate
into one exhibit the description of a registrant's securities, but
emphasized that the ability of registrants to incorporate the required
information by reference to prior filings was essential to minimizing
the registrants' compliance burden.\182\ One commenter acknowledged the
initial, one-time burden required to comply with the new exhibit
requirement, but thought this cost was outweighed by the benefit to
investors from making the information easier to locate.\183\ This
commenter stated that the effect of the requirement would be to ``put
all registrants on a level playing field.'' \184\ In contrast, some
commenters opposed the proposal because, in their view, the information
required by new Item 601(b)(4)(vi) would be duplicative of information
already readily available to investors on EDGAR.\185\
---------------------------------------------------------------------------

    \181\ See letters from Ball Corporation (``Ball''), CCMC, CII,
Cravath, Davis Polk, Fenwick, Financial Executives, Reed Smith,
SIFMA, Soc. For Corp Gov., and Sullivan.
    \182\ See, e.g., letters from Davis Polk, Fenwick, Society for
Corp. Gov., and Sullivan. One commenter indicated that without the
option to incorporate by reference, preparation of new exhibits with
multiple classes of registered debt securities would exceed the
associated 0.5 hour paperwork burden estimated in the Proposing
Release because of the time needed to prepare the disclosure and
have it reviewed by outside counsel. See letter from Davis Polk.
    \183\ See letter from SIFMA.
    \184\ Id.
    \185\ See letters from Ball, Cravath, and Financial Executives
(noting obligations under Form 8-K and Schedule 14A). See also
Proposing Release, supra note 5 at Section II.E.1. at nn. 180 and
181.
---------------------------------------------------------------------------

    We are adopting amendments to Item 601(b)(4) as proposed. Although
the information required by this item will necessarily overlap with
disclosure that may already be found in a registrant's publicly
available registration statements, we think that providing all of this
information in one location is a better alternative for investors than
requiring them to search for and piece together the information they
need from multiple documents that may span many years. By virtue of new
601(b)(4)(vi), investors will be able to easily locate an updated
description of their rights as security holders by referring to the
registrant's most recent annual report. We believe this will facilitate
investors' access to information without imposing significant
additional costs on registrants, particularly given the registrant's
ability to incorporate the information by reference \186\ and the
existing requirement to hyperlink exhibits that are incorporated by
reference.\187\
---------------------------------------------------------------------------

    \186\ See Instruction 3 to new Item 601(b)(4)(vi).
    \187\ See Item 601(a)(2) of Regulation S-K.
---------------------------------------------------------------------------

    We note that these amendments do not change existing disclosure
obligations under Form 8-K and Schedule 14A, which require registrants
to disclose certain modifications to the rights of their security
holders and amendments to their articles of incorporation or
bylaws.\188\ Under new Item 601(b)(4)(vi), any modifications and
amendments during a fiscal year should also be reflected in the Item
202 disclosure provided in an exhibit to the

registrant's annual report for such year.\189\
---------------------------------------------------------------------------

    \188\ Item 3.03 of Form 8-K requires disclosure of material
modifications to rights of security holders while Item 5.03 requires
disclosure of amendments to the articles of incorporation or bylaws
for amendments not disclosed in a proxy or information statement.
Item 5.03 of Form 8-K also requires disclosure of changes in fiscal
year other than by means of a submission to a vote of security
holders through the solicitation of proxies (or otherwise) or an
amendment to the articles of incorporation or bylaws.
    Item 12 of Schedule 14A requires disclosure if action is to be
taken regarding the modification of any class of securities of the
registrant, or the issuance or authorization for issuance of
securities of the registrant in exchange for outstanding securities.
Section (b) of Item 12 requires disclosure of any material
differences between the outstanding securities and the modified or
new securities in respect to any of the matters concerning which
information would be required in the description of the securities
in Item 202 of Regulation S-K. Item 19 of Schedule 14A requires
disclosure of amendments to the registrant's charter, bylaws, or
other documents.
    \189\ Over the course of a given fiscal year, it is possible
that a registrant may make various non-material changes to the
rights and privileges of its securities that do not require separate
disclosure on Form 8-K. However, if any changes are made, whether
material or non-material, new Item 601(b)(4)(vi) requires a
registrant to update the description of securities in the exhibit
filed with its Form 10-K.
---------------------------------------------------------------------------

b. Additional Information Omitted From Exhibits (Item 601 and
Investment Company Forms) \190\
---------------------------------------------------------------------------

    \190\ See supra at Section II.A.2. for a discussion of our
amendment to the exhibit requirements in Item 601(b)(10) pertaining
to material contracts.
---------------------------------------------------------------------------

i. Schedules and Attachments to Exhibits
    Under existing rules in Item 601 of Regulation S-K, registrants
generally must file complete copies of any required exhibits. Very
often, these exhibits include a number of schedules, appendices, and
other similar attachments which can be quite lengthy but not
necessarily material to investors. Except for paragraph (b)(2) of Item
601,\191\ which applies only to material plans of acquisition,
reorganization, arrangement, liquidation, or succession, registrants
must file every required exhibit under Item 601 in its entirety,
irrespective of the materiality of particular information in the
exhibits. Because the information in certain schedules or similar
attachments to the exhibits may not be material to investors, a uniform
filing requirement for this information is not commensurate with the
corresponding costs and burden imposed on registrants, particularly
when the schedules, appendices, and other attachments contain
proprietary or otherwise sensitive information.
---------------------------------------------------------------------------

    \191\ Item 601(b)(2) states that registrants shall not file
schedules or similar attachments to material plans of acquisition,
reorganization, arrangement, liquidation, or succession unless they
contain information material to an investment decision and unless
that information is not otherwise disclosed in the agreement or the
disclosure document.
---------------------------------------------------------------------------

    Consequently, the Commission proposed Item 601(a)(5) to expand the
existing accommodation in Item 601(b)(2) to include all exhibits filed
under Item 601. Similar to current Item 601(b)(2), proposed Item
601(a)(5) would permit registrants to omit entire schedules and similar
attachments to required exhibits, provided: (i) They did not contain
material information and (ii) were not otherwise disclosed in the
exhibit or the disclosure document. Just as with Item 601(b)(2),
proposed Item 601(a)(5) was qualified by the requirement that the filed
exhibit must contain a list briefly identifying the contents of any
omitted schedules and attachments.\192\ The Commission also requested
comment on whether it should apply the proposed amendments to forms
that contain their exhibit requirements in the form and do not
separately reference Item 601 of Regulation S-K. The Commission
similarly requested comment on whether it should amend the investment
company rules or forms to permit investment companies to omit entire
schedules and attachments to required exhibits on similar terms.
---------------------------------------------------------------------------

    \192\ See proposed Item 601(a)(5) of Regulation S-K. Unlike the
current version of Item 601(b)(2), proposed Item 601(a)(5) would not
require registrants to include with their list of omitted schedules
an explicit agreement to furnish a supplemental copy of any omitted
schedule to the Commission upon request. Nonetheless, registrants
may be required to provide a copy of any omitted schedule to the
Commission staff upon request. Securities Act Rule 418 [17 CFR
230.418] states that the Commission or its staff may, where it is
deemed appropriate, request supplemental information concerning the
registrant or a registration statement, among other things. Exchange
Act Rule 12b-4 [17 CFR 240.12b-4] similarly indicates that the
Commission or its staff may, where it is deemed appropriate, request
supplemental information concerning the registrant, a registration
statement, and a periodic or other report filed under the Exchange
Act.
---------------------------------------------------------------------------

    Commenters generally supported the proposal, with several noting
the excessive burden on registrants under the current rules without a
corresponding benefit to investors.\193\ One commenter stated that the
rationale for the proposed amendments to Item 601 of Regulation S-K was
applicable to other forms,\194\ while another favored expanding the
scope of the proposal specifically to include rules and forms under the
Investment Company Act.\195\ Another commenter stated that the required
list identifying any omitted schedules or attachments was unnecessary
if a comparable list already exists in the exhibit.\196\
---------------------------------------------------------------------------

    \193\ See letters from Business Roundtable, CCMC, Cravath, Davis
Polk, FedEx, Fenwick, Financial Executives, Grumman, PNC, SIFMA,
Society for Corp. Gov., Sullivan, and UnitedHealth.
    \194\ See letter from Society for Corp. Gov.
    \195\ See letter from ICI.
    \196\ See letter from Cravath.
---------------------------------------------------------------------------

    We are adopting new Item 601(a)(5) as proposed. When the Commission
first adopted Item 601(b)(2) in 1980, it noted that many of the
schedules then received by the staff were ``not material for investor
information or protection and are unnecessary for Commission review
purposes.'' \197\ The same reasoning provides the basis for expanding
the accommodation in Item 601(b)(2) to other exhibits filed pursuant to
Item 601. For similar reasons, we are adding comparable provisions to
the exhibit requirements of Item 1016 of Regulation M-A,\198\ our
investment company registration forms, and Form N-CSR.\199\ As
discussed, each exhibit that includes omitted schedules or other
attachments in reliance on these new provisions must contain a list
briefly identifying the contents of each such schedule or attachment,
which is a requirement that mirrors the language in Item 601(b)(2).
However, in response to one commenter's suggestion, we are clarifying
that the amendments do not require that registrants prepare a separate
list if that information is already included within the exhibit in a
manner that conveys the subject matter of the omitted schedules and
attachments.
---------------------------------------------------------------------------

    \197\ Amendments Regarding Exhibit Requirements, Release No. 33-
6230 (Aug. 27, 1980) [45 FR 58822 (Sept. 5, 1980)], at 5.
    \198\ See new Instruction 1 to Item 1016.
    \199\ See new Instruction 2 to Item 28 of Form N-1A; new
Instruction 4 to Item 25.2 of Form N-2; new Instruction 3 to Item
29(b) of Form N-3; new Instruction 3 to Item 24(b) of Form N-4; new
Instruction 1 of Instructions as to Exhibits of Form N-5; new
Instruction 1 to Item 26 of Form N-6; new Instruction 1 to Item 16
of Form N-14; new Additional Instruction 1 to the Instructions as to
Exhibits of Form S-6; new Instruction 1 to IX. Exhibits of Form N-
8B-2; and new Instruction 2 to Item 13 of Form N-CSR.
---------------------------------------------------------------------------

ii. Personally Identifiable Information \200\
---------------------------------------------------------------------------

    \200\ See supra at Section II.A.2. for a discussion of our
amendments to the exhibit requirements in Item 601(b)(10) pertaining
to material contracts.
---------------------------------------------------------------------------

    The Commission generally does not publish or make available
information that ``would constitute a clearly unwarranted invasion of
personal privacy.'' \201\ Exhibits filed pursuant to Item 601 may
include sensitive personally identifiable information, such as bank
account numbers, social security numbers, home addresses, and similar
information (``PII'').
---------------------------------------------------------------------------

    \201\ 17 CFR 200.80(b)(6) (exempting personnel and medical files
and similar files the disclosure of which would constitute a clearly
unwarranted invasion of personal privacy).
---------------------------------------------------------------------------

    As a matter of practice, the staff generally does not object where
a registrant omits PII from exhibits without also submitting a
confidential treatment request under Rule 406 or Rule 24b-2. To codify
this current staff practice, the Commission proposed new Item 601(a)(6)
to allow registrants to omit PII from their required Item 601 exhibits
without submitting a confidential treatment request for the
information. In proposing this amendment, the Commission also
anticipated the added benefit of better safeguarding PII by limiting
its dissemination. In the Proposing Release, the Commission asked
whether similar amendments should be made to forms that contain their
exhibit requirements in the form and do not separately

reference Item 601 of Regulation S-K, as well as investment company
forms.
    Several commenters supported the proposed amendment to Item 601,
and no commenters opposed.\202\ In addition, one commenter indicated
that the same rationale applied to other forms \203\ and two other
commenters specifically recommended that a similar accommodation be
extended to investment companies.\204\
---------------------------------------------------------------------------

    \202\ See, e.g., letters from American Fuel, CCMC, Cravath,
Davis Polk, FedEx, Grumman, ICI, PNC, and Society for Corp. Gov.
    \203\ See supra note 194.
    \204\ See letters from ICI and Society for Corp. Gov.
---------------------------------------------------------------------------

    We are adopting new Item 601(a)(6) as proposed. For the same policy
reasons as discussed above, we are also adding comparable provisions to
the exhibit requirements of Item 1016 of Regulation M-A,\205\ our
investment company registration forms, and Form N-CSR.\206\ Under the
amendments, registrants may redact information if disclosure of such
information would constitute a clearly unwarranted invasion of personal
privacy. Registrants who choose to avail themselves of this
accommodation may provide their exhibit with appropriate redactions and
need not include an analysis supporting the redactions at the time of
filing.
---------------------------------------------------------------------------

    \205\ See new Instruction 2 to Item 1016.
    \206\ See new Instruction 3 to Item 28 of Form N-1A; new
Instruction 5 to Item 25.2 of Form N-2; new Instruction 4 to Item
29(b) of Form N-3; new Instruction 4 to Item 24(b) of Form N-4; new
Instruction 2 of Instructions as to Exhibits of Form N-5; new
Instruction 2 to Item 26 of Form N-6; new Instruction 2 to Item 16
of Form N-14, new Additional Instruction 2 to the Instructions as to
Exhibits of Form S-6; new Instruction 2 to IX. Exhibits of Form N-
8B-2; and new Instruction 3 to Item 13 of Form N-CSR.
---------------------------------------------------------------------------

c. Material Contracts (Item 601(b)(10)(i))
    Item 601(b)(10)(i) requires registrants to file every material
contract not made in the ordinary course of business, provided that one
of two tests is met: (i) The contract must be performed in whole or in
part at or after the filing of the registration statement or report, or
(ii) the contract was entered into not more than two years before that
filing.\207\ The first test captures contracts that have not been fully
performed prior to the filing date. The second test--the two-year look
back--captures material contracts that were fully performed before the
filing date.\208\
---------------------------------------------------------------------------

    \207\ Item 601(b)(10)(i) of Regulation S-K [17 CFR
229.601(b)(10)(i)].
    \208\ The two-year look back is included in Schedule A of the
Securities Act [15 U.S.C. 77aa(24)] and serves as a ``cutoff
period'' so registrants would not have to file material contracts
that may have been fully performed many years prior to registration.
When Section 12(g) was added to the Exchange Act in 1964, the
Commission was authorized to issue rules requiring such material
contracts to be filed with Exchange Act reports. See Section
12(b)(1)(I) of the Exchange Act; H.R. Rep. No. 88-1418, 83rd Cong.,
2nd Sess., 1964. Prior to the enactment of Section 12(g), the
Exchange Act reporting requirements were applicable only to listed
companies.
---------------------------------------------------------------------------

    The Commission proposed amendments to Item 601(b)(10)(i) that would
limit the two-year look back test to ``newly reporting registrants,''
as that term was defined in the proposed revision to Instruction 1 of
Item 601(b)(10). The proposal required registrants meeting this
definition to file material agreements for the two-year look back
period. The proposed amendments were intended to help ensure that
investors receive access to agreements containing material information,
including agreements entered into by newly reporting registrants up to
two years prior to the commencement of their reporting obligations.
Registrants with established reporting histories, however, would no
longer be subject to the two-year look back requirement because
investors would continue to have access to any material agreements
previously filed on EDGAR. As such, the amendments were proposed to
streamline reporting obligations while maintaining investor
protections.
    A number of commenters supported the proposed amendments, and no
commenters opposed them.\209\ Accordingly, we are adopting amendments
to Item 601(b)(10)(i) and Instruction 1 of Item 601(b)(10) as proposed.
We believe restricting the two-year look back to newly-reporting
registrants is consistent with the original objective of the disclosure
requirement and will help to eliminate unnecessary disclosures without
impairing investor information or protection. Accordingly, under the
revised item all registrants are required to file as an exhibit every
contract not made in the ordinary course of business that is material
to the registrant and is to be performed in whole or in part at or
after the filing of the registration statement or report. In addition,
newly reporting registrants are also required to file every contract
that was not made in the ordinary course of business that is material
to the registrant and that was entered into not more than two years
before.\210\
---------------------------------------------------------------------------

    \209\ See letters from CCMC, Cravath, Fenwick, SIFMA, and
Sullivan.
    \210\ Item 601(b)(10)(i), as revised.
---------------------------------------------------------------------------

    As proposed, we are adopting a definition of ``newly reporting
registrant'' that includes:
     Registrants that are not subject to the reporting
requirements of Section 13(a) or 15(d) of the Exchange Act at the time
of filing;
     registrants that have not filed an annual report since the
revival of a previously suspended reporting obligation; \211\ and
---------------------------------------------------------------------------

    \211\ In the case of a registrant with a suspended reporting
obligation that, less than two years later, is revived, the
requirement to file material agreements for the two-year look back
period may be satisfied by incorporating by reference and
hyperlinking to agreements previously filed on EDGAR and filing any
material agreements entered into while the registrant was not
reporting. See Exhibit Hyperlinks Adopting Release, supra note 10,
at 14135.
---------------------------------------------------------------------------

     any registrant that (a) was a shell company, other than a
business combination related shell company, as defined in Rule 12b-2
under the Exchange Act (17 CFR 240.12b-2), immediately before
completing a transaction that has the effect of causing it to cease
being a shell company and (b) has not filed a registration statement or
Form 8-K as required by Items 2.01 and 5.06 of that form, since the
completion of such transaction (or, in the case of foreign private
issuers, has not filed a Form 20-F since the completion of the
transaction).\212\
---------------------------------------------------------------------------

    \212\ The definition of ``newly reporting registrant'' does not
include reporting companies completing merger transactions with
business combination-related shell companies.
---------------------------------------------------------------------------

d. Application to Foreign Private Issuers
    The Commission previously adopted amendments to conform the exhibit
requirements in Form 20-F to the requirements in Item 601.\213\ To
maintain a consistent approach to the exhibit requirements for domestic
registrants and foreign private issuers, the Commission proposed
amendments to require foreign private issuers to provide information in
exhibit filings comparable to the information provided by domestic
registrants under the proposed amendments to Item 601. Specifically,
the Commission proposed to amend the ``Instructions to Exhibits'' in
Form 20-F to include revised language comparable to Items 601(a)(5),
Item 601(a)(6), Item 601(b)(4)(vi), Item 601(b)(10)(i), Item
601(b)(10)(iv), and Item 601(b)(21) of Regulation S-K.
---------------------------------------------------------------------------

    \213\ See International Disclosure Standards Release, Release
No. 33-7637 (Feb. 2, 1999) [64 FR 6261 (Feb. 9, 1999)] (expressing
the Commission's intention ``to conform the exhibit requirements for
Form 20-F with the exhibit requirements for registration statements
filed by U.S. issuers under the Exchange Act'' and stating that all
of the Form 20-F exhibit requirements ``are required for domestic
issuers filing a registration statement on Form 10 or an annual
report on Form 10-K'').
---------------------------------------------------------------------------

    In the Proposing Release, the Commission asked whether it should
amend the exhibit requirements of Form 20-F so that they are consistent
with the requirements under Item 601. A few

commenters supported the proposal,\214\ and no commenters opposed.
---------------------------------------------------------------------------

    \214\ See letters from Cravath and Sullivan.
---------------------------------------------------------------------------

    Accordingly, and for the reasons noted in the Proposing Release, we
are adopting amendments to Form 20-F to align the exhibit requirements
of the form with similar amendments we are adopting today that are
applicable to domestic registrants. In each case, we believe that the
justifications for the proposed amendments to Item 601 are equally
applicable to Form 20-F.\215\
---------------------------------------------------------------------------

    \215\ The Commission did not propose similar changes to the
exhibit requirements of Form 40-F. Form 40-F generally permits
Canadian issuers to use Canadian disclosure documents to satisfy the
Commission's registration and disclosure requirements. As a result,
the exhibit requirements in Form 40-F are largely in accordance with
Canadian disclosure standards.
---------------------------------------------------------------------------

6. Incorporation by Reference \216\
---------------------------------------------------------------------------

    \216\ For a discussion of our amendments that impact the ability
to incorporate by reference or cross-reference information into the
financial statements, see Section II.A.3 supra.
---------------------------------------------------------------------------

    To reduce duplicative disclosure, registrants have been permitted
to incorporate previously filed information into their filings since
the enactment of the Securities Act and the Exchange Act.\217\
Initially, incorporation by reference was limited to exhibits, but over
time the Commission has increasingly permitted incorporation by
reference in other contexts. The rules and instructions governing
incorporation by reference are now found in a variety of regulations,
including Regulation S-K, Regulation C, Regulation 12B, and many of the
Commission's forms.
---------------------------------------------------------------------------

    \217\ See Federal Trade Commission Release No. 33-47 (Sept. 22,
1933) (allowing for incorporation by reference of exhibits filed
with registration statements); Release No. 34-51 (Nov. 27, 1934)
(allowing for incorporation by reference of exhibits filed with the
Commission under the Exchange Act or filed with an exchange).
---------------------------------------------------------------------------

    Consistent with our mandate under the FAST Act, the Commission
proposed amendments to revise Item 10(d), Rule 411, Rule 12b-23, and a
number of our forms to simplify and modernize these rules while still
providing all material information. The Commission also proposed to
rescind Rule 12b-32. In addition, to provide for a consistent set of
incorporation by reference rules for investment companies and
investment advisers, the Commission proposed parallel amendments to
Rule 0-4 and a number of forms under the Investment Company Act,
certain conforming amendments to Rule 0-6 under the Investment Advisers
Act, and the rescission of Rules 8b-23, 8b-24, and 8b-32 under the
Investment Company Act (certain provisions of which would be
consolidated into the amendments to Rule 0-4).
    The proposed amendments were intended to streamline the
requirements associated with incorporation by reference and facilitate
investor access to incorporated documents through the use of
hyperlinks. The proposed amendments were also consistent with the
Commission's longstanding acceptance of incorporation by reference in
the interests of encouraging registrants to eliminate duplicative
disclosures.
a. Item 10(d)
    Item 10 of Regulation S-K contains general requirements on the
application of Regulation S-K and Item 10(d) focuses on incorporation
by reference.\218\ Item 10(d) states that where rules, regulations, or
instructions to the forms permit incorporation by reference, a document
may be incorporated by reference to the specific document and to the
prior filing or submission in which that document was physically filed
or submitted. Item 10(d) generally prevents registrants from
incorporating by reference a portion of a document that itself also
incorporates pertinent information by reference.\219\ It also prohibits
incorporating documents by reference if they have been on file with the
Commission for more than five years and do not fall within one of the
exceptions provided in the rule.\220\
---------------------------------------------------------------------------

    \218\ 17 CFR 229.10(d).
    \219\ Indirect incorporation by reference is permitted when the
registrant is expressly required to incorporate a document by
reference and, in the case of asset-backed issuers, under Item
1100(c) of Regulation AB [17 CFR 229.1100(c)]. See Item 10(d).
    \220\ See Proposing Release, supra note 5, Section II.F.1.a. at
51007-8.
---------------------------------------------------------------------------

    As discussed in the Proposing Release, the Commission proposed to
eliminate the five-year limit in Item 10(d).\221\ Given the broad
exceptions to the rule and the current practice of retaining documents
electronically, we believe the five-year limit now serves little
purpose and may lead to confusion about which documents may be
incorporated by reference.\222\ Under the proposed amendments, a
registrant would not be permitted to incorporate by reference to a
destroyed document because it would render its disclosure incomplete,
unclear, or confusing.\223\
---------------------------------------------------------------------------

    \221\ Id. Without the provisions relating to the five-year
limit, little substance remains in Item 10(d). Therefore, to
simplify the requirements, the Commission proposed to move the
remaining provision in Item 10(d) prohibiting indirect incorporation
by reference into the other rules governing incorporation by
reference.
    \222\ We believe that it is very unlikely that a registrant
would attempt to incorporate by reference to a document that was
filed with the Commission but is no longer available because it was
not submitted on EDGAR and has been destroyed pursuant to the
Records Control Schedule. For example, the Commission retains
Securities Act and Exchange Act registration statements, reports,
and proxy materials that have not been filed on EDGAR for 30 years.
See Records Control Schedule [17 CFR 200.80f].
    \223\ See, e.g., proposed Rule 411(e) and Rule 12b-23(e).
---------------------------------------------------------------------------

    Several commenters supported the proposal, and no commenters
opposed.\224\ Therefore, and for the reasons noted in the Proposing
Release, we are adopting these amendments as proposed.
---------------------------------------------------------------------------

    \224\ See letters from Chamber, Cravath, Fenwick, Financial
Executives, Nasdaq, Society for Corp. Gov., Sullivan, UnitedHealth,
and ICI.
---------------------------------------------------------------------------

b. Securities Act Rule 411, Exchange Act Rule 12b-23 and Rule 12b-32,
and Related Rules Under the Investment Company Act and Investment
Advisers Act
    Rule 12b-23 governs incorporation by reference for registration
statements filed pursuant to Sections 12(b) and 12(g) of the Exchange
Act and reports filed pursuant to Sections 13 and 15(d) of the Exchange
Act.\225\ Rule 12b-23 broadly allows for incorporation by reference in
answer, or partial answer, to any item of an Exchange Act registration
statement or report. Rule 12b-32 governs incorporation by reference for
exhibits filed with registration statements and reports. Rule 411
governs incorporation by reference for registration statements filed
under the Securities Act, including exhibits thereto.\226\ Rule 411
restricts incorporation by reference in a prospectus unless otherwise
provided in the appropriate form but allows for incorporation by
reference similar to Rule 12b-23 for the non-prospectus portions of a
registration statement.\227\
---------------------------------------------------------------------------

    \225\ See Rule 12b-1 [17 CFR 240.12b-1] (setting forth the scope
of Regulation 12B).
    \226\ See Rule 400 [17 CFR 230.400] (setting forth the scope of
Regulation C).
    \227\ See Integrated Disclosure System Adopting Release, supra
note 103; Proposed Revision of Regulation C, Registration and
Regulation 12B, Registration and Reporting, Release No. 33-6333
(Aug. 6, 1981) [46 FR 41971 (Aug. 18, 1981)] (``While it is
generally proper to prevent prospectuses from incorporating exhibits
which are not delivered, the Commission does not believe it is
necessary to impose such limits in connection with Exchange Act
reports which are not actually delivered in registered public
offerings of securities.'').
---------------------------------------------------------------------------

    Rule 0-4 provides general incorporation by reference rules for
investment company registration statements, applications, and reports
filed with the Commission. Rule 8b-23 (additional incorporation by
reference rules for registration statements and reports), Rule 8b-24
(rules regarding summaries or outlines of documents), and Rule 8b-32
(incorporation of exhibits by reference) provide

additional incorporation by reference rules for investment company
registration statements and reports. Rule 0-6 governs incorporation by
reference for investment adviser applications for Commission orders
under the Investment Advisers Act other than applications for
registration as an investment adviser.
i. Exhibit and Other Filing Requirements
    Rule 12b-23(a)(3) under the Exchange Act requires that copies of
any information incorporated by reference must be filed as an exhibit,
with limited exceptions.\228\ Rule 411(b)(4) under the Securities Act,
which is more limited and pertains to non-prospectus information that
is incorporated by reference, requires that the incorporated
information be filed as an exhibit if it does not comply with the five-
year limit in Item 10(d). Rule 8b-23 generally requires investment
company registrants to file with a registration statement or report a
copy of any registration statement, report, or prospectus from which
information is incorporated by reference, except in cases where the
registration statement, report, or prospectus is filed
electronically.\229\
---------------------------------------------------------------------------

    \228\ See Rule 12b-23(a)(3) [17 CFR 240.12b-23(a)(3)] (providing
exceptions for a proxy or information statement incorporated by
reference in response to Part III of Form 10-K, a form of prospectus
filed pursuant to Rule 424(b) [17 CFR 230.424(b)] incorporated by
reference in response to Item 1 of Form 8-A, and information filed
on Form 8-K). This provision was introduced in 1971 so that then-
existing microfiche technology for the public dissemination of
reports and documents filed with the Commission could function
properly. See Registration and Reporting and Form for Annual Reports
of Employee Stock Purchase Plans, Release No. 34-9048 (Jan. 4, 1971)
[36 FR 4483 (Mar. 6, 1971)] (``In order that the microfiche system
for the public dissemination of reports and documents filed with
[the] Commission may work, the amended rule requires that copies of
information or financial statements incorporated by reference, or
copies of the pertinent pages of any document containing such
information or statement, be filed with the registration statement
or report in which it is so incorporated.'').
    \229\ See Rule 8b-23(a) [17 CFR 270.8b-23(a)]. In addition, Rule
0-4 and Rule 0-6 permit the incorporation by reference as an exhibit
in any registration statement, application or report (in the case of
Rule 0-4) or in any application (in the case of Rule 0-6) any
document or part thereof previously or concurrently filed with the
Commission. Both rules also permit the incorporation by reference of
financial statements (or parts thereof), although Rule 0-6 specifies
that the financial statements (or parts thereof) that are
incorporated are to be filed as exhibits. For consistent rules under
both Acts, the Commission proposed amendments to Rule 0-4 to specify
that financial statements may be filed as exhibits to investment
company applications, as Rule 0-6 currently specifies with respect
to applications filed under the Investment Advisers Act.
    Furthermore, if the number of copies of any document from which
information is incorporated by reference is less than the number of
copies required to be filed with a registration statement,
application, or report, Rule 0-4 and Rule 0-6 require an investment
company or applicant, respectively, to file as many additional
copies of the document incorporated by reference as may be necessary
to meet the requirements of the registration statement, application,
or report. See Rule 0-4(a), Rule 0-6(a). The Commission proposed to
eliminate the requirement to file additional copies from Rule 0-4
because most investment company filings are available on EDGAR.
Although investment adviser applications are filed in paper format,
in the staff's experience, those applications rarely incorporate by
reference information as permitted by Rule 0-6. For our regulatory
purposes, we do not believe that the number of copies specified in
current Rule 0-6 is needed. Thus, for the foregoing reasons and for
consistency purposes, the Commission similarly proposed to eliminate
the requirement to file additional copies from Rule 0-6.
---------------------------------------------------------------------------

    The Commission proposed to eliminate these requirements to make the
rules for incorporation by reference more consistent, and to apply
consistent requirements for incorporation by reference under the
Investment Company Act and Investment Advisers Act. We no longer
believe that these requirements are necessary, as most Exchange Act
filings are made publicly available on EDGAR, and as we generally do
not have similar exhibit filing requirements for Securities Act
registration statements.\230\
---------------------------------------------------------------------------

    \230\ Investment advisers register and submit some filings to
the Commission electronically through the Investment Adviser
Registration Depository (``IARD'').
---------------------------------------------------------------------------

    The Commission also proposed to eliminate the corresponding exhibit
requirement in Item 601(b)(99)(ii) of Regulation S-K, which was adopted
in connection with Rule 12b-23(a) and Rule 411(b)(4).\231\ In addition
to Item 601(b)(99), other provisions in Item 601 require documents to
be filed as exhibits only when they are incorporated by reference into
a filing. For example, Item 601(b)(13) requires a registrant to file an
annual report to security holders, Form 10-Q, or quarterly report to
security holders as an exhibit when the registrant incorporates all or
a portion of such a report by reference. Although annual reports to
security holders are readily available to investors and the staff
outside of EDGAR, we believe it is appropriate to retain the exhibit
requirement in these circumstances because some registrants satisfy
their disclosure requirements by incorporating a significant amount of
disclosure from these reports. The Commission did not propose to
eliminate these other exhibit filing requirements in Item 601.
Nonetheless, the Commission did propose to eliminate the requirement in
Item 601(b)(13) to file a Form 10-Q as an exhibit when it is
specifically incorporated by reference into a prospectus. This
provision will no longer be necessary because, under the rules we are
adopting, a registrant will be required to include a hyperlink to any
information that is incorporated by reference to a document available
on EDGAR.\232\
---------------------------------------------------------------------------

    \231\ See Integrated Disclosure System Adopting Release, supra
note 103 (adopting Item 601(b)(28)(ii), which is now found in Item
601(b)(99)(ii)) and Proposed Revision of Regulation S-K and Proposed
Rescission of Guides for the Preparation and Filing of Registration
Statements and Reports, Release No. 33-6332 (Aug. 6, 1981) [46 FR
41925 (Aug. 18, 1981)].
    \232\ See infra Section II.B.6.b.ii.
---------------------------------------------------------------------------

    Several commenters supported the proposal and no commenters opposed
it.\233\ Therefore, and for the reasons noted in the Proposing Release,
we are adopting the amendments, as proposed.
---------------------------------------------------------------------------

    \233\ See letters from American Fuel, CAQ, Chamber, Cravath,
Davis Polk, E&Y, Fenwick, Piercy Bowler, PNC, Reed Smith, Society
for Corp. Gov., Sullivan, and ICI.
---------------------------------------------------------------------------

ii. Hyperlinks
    The Commission proposed to facilitate greater investor access to
disclosure by amending Rule 411, Rule 12b-23, and Rule 0-4 to require
hyperlinks to information that is incorporated by reference if that
information is available on EDGAR.\234\ The Commission recently adopted
rules requiring hyperlinks to most exhibits filed pursuant to Item 601,
Form F-10,\235\ or Form 20-F.\236\ To accommodate hyperlinks, those
filings must be made in HTML format.\237\ Accordingly, the Commission
proposed to expand the requirement to file documents in HTML to include
filings that are subject to the hyperlinking requirements proposed in
Rule 411, Rule 12b-23, and Rule 0-4.
---------------------------------------------------------------------------

    \234\ The Commission did not propose similar amendments to Rule
0-6 because applications under the Investment Advisers Act filed
pursuant to that rule are not required to be filed electronically.
In addition, applications filed pursuant to Rule 0-6 may incorporate
information that may not be filed on EDGAR.
    \235\ 17 CFR 239.40.
    \236\ See Exhibit Hyperlinks Adopting Release, supra note 10, at
14130.
    \237\ See id. at 14130. The rules adopted by the Commission at
that time did not generally apply to investment companies. However,
as discussed below, we are adopting similar requirements to certain
filings by investment companies in this release. See infra Section
II.B.7.b.
---------------------------------------------------------------------------

    Commenters generally supported the proposals,\238\ although some
thought it would be helpful for the Commission to provide further
clarification on some aspects of the rule.\239\ One commenter suggested
that the Commission make

clear that incorporating only a portion of a document filed on EDGAR is
permissible,\240\ while another commenter recommended that the
Commission provide instructions for registrants to clarify which
hyperlinks and cross-references relate to information incorporated by
reference in the current filing and which are provided only for reader
convenience and navigability.\241\ Other commenters thought the
Commission should consider allowing exceptions to the rule in certain
situations.\242\ Specifically, one commenter believed hyperlinks to
Forms 10-K, 10-Q, and 8-K and definitive proxy statements should not be
required, as they can be easily located by investors.\243\ Another
commenter believed hyperlinks should not be required in filings that
also incorporated by reference to subsequently filed documents.\244\ In
addition, another commenter suggested that the Commission allow
registrants and the staff to develop more experience with the recently
adopted exhibit hyperlinking requirements prior to requiring additional
hyperlinking.\245\
---------------------------------------------------------------------------

    \238\ See letters from CAQ, Davis Polk, E&Y, Fenwick, Grant
Thornton, Grumman, KPMG, Piercy Bowler, Public Citizen, Reed Smith,
Society for Corp. Gov., ICI, and Morningstar, Inc.
(``Morningstar'').
    \239\ See letters from Davis Polk and E&Y.
    \240\ See letter from Davis Polk.
    \241\ See letter from E&Y (noting that this clarification would
benefit the PCAOB's work regarding the scope of an auditor's
responsibility for information in a filing subject to the
requirements of AS 2710, Other Information in Documents Containing
Audited Financial Statements).
    \242\ See letters from Fenwick and Reed Smith.
    \243\ See letter from Fenwick.
    \244\ See letter from Reed Smith (stating that the use of
hyperlinks, particularly in connection with shelf registration
statements, could direct readers to stale or superseded
information).
    \245\ See letter from Cravath.
---------------------------------------------------------------------------

    We are adopting the amendments to Rule 411, Rule 12b-23, and Rule
0-4 as proposed. By requiring an active hyperlink to information on
EDGAR if it has been incorporated by reference into a registration
statement or prospectus, we believe these amendments will improve the
readability and navigability of disclosure documents and discourage
repetition, consistent with our FAST Act mandate.
    We do not believe that additional clarification in the new rules
regarding the ability to incorporate portions of a previous filing by
reference is necessary because existing rules regarding incorporation
by reference already allow for this, and the new hyperlinking
requirement does not change the substance of these rules.\246\ Nor have
we excluded hyperlinks to Forms 10-K, 10-Q, 8-K and definitive proxy
statements when those forms are incorporated by reference, as suggested
by one commenter.\247\ Such a restriction would reduce investors' ease
of access to information and, therefore, the utility of the amendments.
Moreover, as this commenter noted, the requirement is not anticipated
to be a significant compliance burden for registrants.
---------------------------------------------------------------------------

    \246\ See Securities Act Rule 411 and Exchange Act Rule 12b-23,
which state that ``where only certain pages of a document are
incorporated by reference . . . , the document from which the
[information or material] is taken shall be clearly identified in
the reference.''
    \247\ See letter from Fenwick.
---------------------------------------------------------------------------

    With respect to one commenter's suggestion that we provide an
exception to the hyperlinking requirement where a registration
statement incorporates by reference subsequently filed documents,\248\
we do not believe that this circumstance warrants a change to the rule.
In the case of a shelf registration statement on Form S-3, for example,
while it is correct that documents incorporated by reference under Item
12 of that form may become stale over time, the item requires the
registrant to clearly state that the prospectus also incorporates by
reference ``all documents subsequently filed under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the
offering.'' Accordingly, we do not believe that the existence of
hyperlinks to the previously filed information will cause confusion
among investors regarding the scope of information incorporated by
reference or cause investors to disregard subsequently filed reports.
---------------------------------------------------------------------------

    \248\ See letter from Reed Smith.
---------------------------------------------------------------------------

    We are also not adopting instructions, as suggested by one
commenter, which would require registrants to differentiate between
hyperlinked information incorporated by reference in the current filing
and hyperlinks provided only for reader convenience and
navigability.\249\ The new rules are solely meant to introduce a
navigation feature and do not impose additional or modified
requirements regarding what information may be incorporated by
reference.
---------------------------------------------------------------------------

    \249\ See letter from E&Y.
---------------------------------------------------------------------------

    Finally, we are not delaying compliance with the new hyperlinking
requirements, as suggested by one commenter, in the case of operating
companies.\250\ Delaying compliance seems unnecessary given that the
exhibit hyperlinking rules have been in effect for all operating
companies since September 1, 2018 and our amendments in this rulemaking
are only incremental to the current rules.\251\ Technologically, these
new amendments requiring hyperlinks for information incorporated by
reference are no different than existing hyperlink disclosure
requirements. Therefore, we anticipate any additional compliance burden
for operating companies will not be significant. However, as outlined
below in Section V.2, we are adopting a transition period for
investment companies that is intended to provide them with time to
prepare filings to include hyperlinks to exhibits and to information
incorporated by reference, as well as help mitigate the cost burdens
related to switching to HTML format for investment companies currently
submitting filings in ASCII.
---------------------------------------------------------------------------

    \250\ See letter from Cravath.
    \251\ See Exhibit Hyperlinks Adopting Release, supra note 10.
---------------------------------------------------------------------------

    Under the amendments we are adopting, registrants are not required
to file an amendment to a document solely to correct an inaccurate
hyperlink, unless that hyperlink was included in a pre-effective
registration statement, similar to the existing requirements for
exhibit hyperlinking. An inaccurate hyperlink alone would neither
render the filing materially deficient nor affect a registrant's
eligibility to use Form S-3, Form SF-3, or Form F-3. In addition,
registrants are not required to refile information that is incorporated
by reference from a document that was previously filed with the
Commission in paper. Similar to the Commission's reasoning in the
Exhibit Hyperlinks Adopting Release, we believe such a requirement
would have limited utility given that electronic filing has been
required for over two decades and paper filings are currently made in
very limited circumstances.\252\
---------------------------------------------------------------------------

    \252\ See Exhibit Hyperlinks Adopting Release, supra note 10, at
14131. See also FAST Act Report, supra note 7, at n. 31 and
accompanying text.
---------------------------------------------------------------------------

    Unlike the requirements for exhibit hyperlinking, however, a
registrant is not required to correct inaccurate hyperlinks to
information incorporated by reference in an effective registration
statement by including a corrected hyperlink in a subsequent periodic
report or a post-effective amendment. We believe that it would result
in more confusion than clarity if we were to require registrants to re-
file disclosure to correct a hyperlink or to include a section solely
devoted to corrected hyperlinks in the body of a periodic report or
post-effective amendment. This differs from exhibit hyperlinks where
the corrected hyperlink would be unobtrusively located in the exhibit
index with other exhibits. The requirement in amended Rule 411, Rule
12b-23, and Rule 0-4 to describe the location of the information
incorporated by reference should mitigate the impact of any inaccurate
hyperlinks.

iii. Other Amendments
    As discussed in detail in the Proposing Release, the Commission
proposed several non-substantive changes to Rule 411, Rule 12b-23, Rule
0-4, and Rule 0-6 to streamline, clarify, and conform these rules.\253\
---------------------------------------------------------------------------

    \253\ See Proposing Release, supra note 5, Section II.F.2.d. at
51011-2.
---------------------------------------------------------------------------

    Several commenters supported the proposal, and no commenters
opposed.\254\ For the reasons noted in the Proposing Release, we are
adopting the proposed amendments to Rule 411, Rule 12b-23, Rule 12b-32,
Rule 0-4, and Rule 0-6, as proposed.
---------------------------------------------------------------------------

    \254\ See letters from American Fuel, CAQ, CCMC, Cravath, Davis
Polk, E&Y, Fenwick, Piercy Bowler, PNC, Reed Smith, Society for
Corp. Gov., and Sullivan.
---------------------------------------------------------------------------

7. Manner of Delivery
a. Tagging Cover Page Data
    Currently, operating company registrants \255\ are required to file
their financial statements as an exhibit in a machine-readable format
using eXtensible Business Reporting Language (``XBRL'').\256\ This
disclosure is required as an exhibit to periodic reports and Securities
Act registration statements, as well as reports on Form 8-K or Form 6-K
that contain revised or updated financial statements. The Commission
recently adopted rules requiring the use of Inline XBRL format, where
XBRL data is embedded into the HTML document, instead of the
traditional XBRL format \257\ for the submission of operating company
financial statements and risk/return summary information for open-end
management investment companies.\258\
---------------------------------------------------------------------------

    \255\ As used in this context, operating companies do not
include any investment company that is registered under the
Investment Company Act, any business development company, as defined
in Section 2(a)(48) of that Act [15 U.S.C. 80a-2(a)(48)], any entity
that reports under the Exchange Act and prepares its financial
statements in accordance with Article 6 of Regulation S-X [17 CFR
210.6-01 through 210.6-10], or asset-backed issuers. See Interactive
Data to Improve Financial Reporting, Release No. 33-9002 (Jan. 30,
2009) [74 FR 6776 (Feb. 10, 2009)], as corrected by Release No. 33-
9002A (Apr. 1, 2009) [74 FR 15666 (Apr. 7, 2009)] (the ``XBRL
Adopting Release''), at 6780-1, nn. 69 and 78 and accompanying text.
    \256\ For domestic disclosure forms, the XBRL data-tagging
requirements are imposed through Item 601(b)(101) of Regulation S-K
and Rule 405(b) of Regulation S-T. See Item 601(b)(101) of
Regulation S-K and Rule 405(b) of Regulation S-T [17 CFR
232.405(b)]. For foreign disclosure forms, analogous XBRL tagging
requirements are included in the instructions to the relevant forms.
See, e.g., paragraphs 100 and 101 of the Instructions to Exhibits to
Form 20-F. XBRL data-tagging requirements do not apply to asset-
backed securities filings because issuer financial statements are
generally not required or provided in filings made pursuant to
Regulation AB (17 CFR 229.1100 et seq.). See the XBRL Adopting
Release, supra note 255, at n. 78.
    \257\ In the traditional XBRL format for financial statements,
which will be phased out as operating companies transition to Inline
XBRL, as discussed infra at note 258, none of the registrant's XBRL
data is embedded into an HTML document. Instead, an exhibit
containing all XBRL data is filed with the relevant form. Inline
XBRL allows filers to embed XBRL data directly into an HTML
document, eliminating the need to tag a copy of the information in a
separate document.
    \258\ See Inline XBRL Filing of Tagged Data, Release No. 33-
10514 (June 28, 2018) [83 FR 40846 (July 10, 2018)] (``Inline XBRL
Adopting Release''). Operating companies that are currently required
to submit financial statement information in XBRL and open-end
management investment companies that are currently required to
submit risk/return summary XBRL data will be required, on a phased-
in basis, to transition to Inline XBRL. The date of mandatory
compliance with the Inline XBRL rules depends on the type of filer.
See Section III.A.1.c. of the Inline XBRL Adopting Release.
---------------------------------------------------------------------------

    Registrants must also tag in XBRL a specific group of data points
that appears on the cover page of the filing. These specific data
points, which are tagged according to Regulation S-T and the EDGAR
Filer Manual, are known as document and entity identifier elements and
include, among others, form type, company name, filer size, and public
float.\259\ This information corresponds to some, but not all, of the
information that registrants are required to include on the filing
cover page. For example, the Form 10-K cover page contains
approximately 25 data points. Less than half of those data points are
currently required to be tagged in XBRL. The non-tagged data points
include, among others, the exchange on which securities are registered
and the state (or jurisdiction) of incorporation.
---------------------------------------------------------------------------

    \259\ See Rule 405 of Regulation S-T [17 CFR 232.405]; See also
XBRL Adopting Release (discussing the requirement to tag document
and entity identifier elements, such as form type, company name, and
public float, according to Regulation S-T and the EDGAR Filer
Manual).
---------------------------------------------------------------------------

    The Commission proposed amendments to require all of the
information on the cover pages of Form 10-K, Form 10-Q, Form 8-K, Form
20-F, and Form 40-F to be tagged in Inline XBRL in accordance with the
EDGAR Filer Manual.\260\ To implement the cover page tagging
requirements, the Commission also proposed to add new Rule 406 to
Regulation S-T, new Item 601(b)(104) to Regulation S-K, new paragraph
104 to the ``Instructions as to Exhibits'' of Form 20-F, and new
paragraph B.17 to the ``General Instructions'' of Form 40-F to require
registrants to file with each of the specified forms a ``Cover Page
Interactive Data File.'' \261\ The Commission also proposed to revise
Rule 11 of Regulation S-T to add the term ``Cover Page Interactive Data
File.'' The term would be defined as the machine readable computer code
that presents the information required by Rule 406 of Regulation S-T in
Inline XBRL format.
---------------------------------------------------------------------------

    \260\ See Proposing Release, supra note 5, Section II.G.1. at
51013-4.
    \261\ The Commission proposed that registrants filing Form 20-F
and Form 40-F would be required to tag cover page data only when
those forms are used as annual reports, not as registration
statements. See Proposing Release, supra note 5, at 51014.
---------------------------------------------------------------------------

    In addition, the Commission proposed amendments to the cover pages
of these forms to include the trading symbol for each class of
registered securities.\262\ Because the cover pages of Form 10-K, Form
20-F, and Form 40-F already require disclosure of the title of each
class of securities registered pursuant to Section 12(b) of the
Exchange Act and each exchange on which they are registered, the
Commission proposed amendments to these forms that would revise the
cover page to include a corresponding field for the trading symbol.
Unlike Form 10-K, Form 20-F, and Form 40-F, however, the cover pages of
Form 10-Q and Form 8-K do not currently require disclosure of the title
of each class of securities and each exchange on which they are
registered. Accordingly, to ensure that registrants and their
registered securities are identified in a consistent manner across
forms, the Commission proposed to revise the cover pages of Form 10-Q
and Form 8-K to include this disclosure in addition to the trading
symbol.
---------------------------------------------------------------------------

    \262\ In the Disclosure Update and Simplification Release, the
Commission amended Item 201(a) to also require disclosure of the
trading symbol(s) for each class of a registrant's common equity.
See Disclosure Update and Simplification Release, supra note 147, at
Section IV.C.1.(a).
---------------------------------------------------------------------------

    Commenters were divided in their responses to the proposal. Several
commenters believed that tagging cover page data would be useful and
viewed XBRL generally as a benefit to investors in collecting and
analyzing financial information.\263\ Some commenters further
recommended expanding the proposal to require that additional
information be tagged.\264\ By contrast, a

number of other commenters opposed the proposal, and were skeptical
that the benefit of tagging cover page data justified the costs of
compliance.\265\ Noting their concerns over the burdens already
incurred by registrants to satisfy existing data-tagging obligations,
some commenters urged that studies be undertaken to assess investor
usage of XBRL information before expanding XBRL requirements any
further.\266\
---------------------------------------------------------------------------

    \263\ See letters from Calcbench, Inc. (``Calcbench''), Grumman,
Merrill Corporation (``Merrill''), Morningstar, and XBRL US, Inc.
(``XBRL US'').
    \264\ See, e.g., letters from Calcbench (supporting the
expansion of XBRL tagging to MD&A), Merrill (recommending extending
the proposed tagging requirements to Form 6-K), and XBRL US
(recommending requiring XBRL tagging of additional forms, such as
the Form 8-K earnings report). But see letter from Grumman
(recommending that the proposal not be extended to MD&A, earnings
releases, or proxy statements because the costs of compliance would
outweigh the benefits). In the Proposing Release, the Commission
asked whether there were any additional disclosures discussed in the
release that should be required in machine-readable structured
format, such as within Item 303(a) or any property disclosures under
Item 102. See Proposing Release, supra note 5, at 51014. We are not
adopting these additional tagging requirements at this time, several
of which are beyond the scope of this rulemaking.
    \265\ See letters from CCMC, FedEx, Financial Executives, IMA,
Society for Corp. Gov., and UnitedHealth.
    \266\ See letter from CCMC and IMA. We note that the Inline XBRL
Adopting Release included a discussion of current XBRL usage levels
indicating ``a wide range of XBRL data users, including investors,
financial analysts, economic research firms, data aggregators,
academic researchers, filers seeking information on their peers for
benchmarking purposes, and Commission staff.'' See Inline XBRL
Adopting Release, supra note 258, at 40850.
---------------------------------------------------------------------------

    After considering the comments, we are adopting the amendments as
proposed.\267\ By increasing the capacity for automation of the data
gathering process, we believe these amendments will further enhance
investors' use of interactive data to identify, count, sort, compare,
and analyze registrants and their disclosures.\268\ For example, an
investor will be able to more readily and accurately identify
registrants that are listed on a specific exchange and that identified
themselves as well known seasoned issuers in their last annual report.
Similarly, the Inline XBRL tagging of the new ticker symbol disclosure
requirement will make it easier to relate/link a specific security to
the underlying registrant. In addition, the amendments will allow the
Commission to make enhancements to the EDGAR system to enable investors
to search for filings with these specific criteria. The new filing
requirements will also be of benefit to the Commission, as the
Commission and its staff will be able to more readily sort and analyze
filings to, among other things, improve data and analysis for
rulemaking initiatives.
---------------------------------------------------------------------------

    \267\ As proposed, the amendments apply to Form 20-F or Form 40-
F only when those forms are used as annual reports, not registration
statements. See new paragraph 104 to Instructions as to Exhibits of
Form 20-F and new paragraph B.17 of General Instructions to Form 40-
F.
    \268\ See the Recommendations of the Investor Advisory Committee
Regarding the SEC and the Need for the Cost Effective Retrieval of
Information by Investors (Jul. 25, 2013), available at http://www.sec.gov/spotlight/investor-advisory-committee-2012/data-tagging-resolution-72513.pdf (recommending, among other things, that the
Commission promote the use of machine-readable data tagging formats
in filings with the Commission).
---------------------------------------------------------------------------

    We do not expect the incremental compliance burden associated with
tagging the additional cover page information to be significant, given
that registrants already are required to tag some of this information
as well as information in their financial statements. The amendments
will also facilitate future enhancements to the EDGAR system by
utilizing the tagged information to reduce duplicative entry of
information into both the filing and the submission header at the time
of filing.
b. Exhibit Hyperlinks and HTML Format for Investment Companies
    As discussed above, the Commission recently adopted rules requiring
hyperlinks to most exhibits filed pursuant to Item 601, Form F-10, and
Form 20-F, and, to accommodate hyperlinking, those filings are required
to be made in HTML.\269\ The Commission proposed parallel amendments to
Regulation S-T Rules 102 and 105 and certain of our registration and
reporting forms that are used by investment companies that would apply
similar exhibit hyperlinking and HTML submission requirements in those
forms to facilitate access to exhibits by investors and other users of
the information. Specifically, the proposed amendments would require an
investment company filing a registration statement on Forms S-6, N-1A,
N-2, N-3, N-4, N-5, N-6, and N-14, or reports on Form N-CSR, to include
a hyperlink to each exhibit identified in that filing's exhibit index,
unless the exhibit is filed in paper pursuant to an exemption under
Rule 201, Rule 202, or Rule 311 of Regulation S-T.
---------------------------------------------------------------------------

    \269\ See Exhibit Hyperlinks Adopting Release, supra note 10, at
14130.
---------------------------------------------------------------------------

    One commenter supported the proposed amendments to require exhibit
hyperlinks and associated HTML submission requirements, stating that it
would help investors' ability to navigate through EDGAR filings and
advance investor protection.\270\ Another commenter requested
clarification on how the proposed HTML submission requirement would
affect filers on Form N-4 and Form N-6 who use type 1 modules under
EDGARLink\271\ to make these submissions because the type 1 modules are
only supported by ASCII, and not HTML.\272\
---------------------------------------------------------------------------

    \270\ See letter from ICI.
    \271\ EDGARLink is an application that is used by electronic
filers to facilitate the preparation, validation, and transmission
of electronic format documents to EDGAR. EDGARLink works
interactively with EDGAR and is available for download from the
Commission's website.
    \272\ See letter from G. Stanzione. Modules are partial or
complete documents that are intended to be included in an electronic
submission. In connection with our ongoing efforts to upgrade EDGAR,
we are updating type 1 and type 2 modules to permit their use in
connection with filings made in HTML. These updates are expected to
be completed by June 2019.
---------------------------------------------------------------------------

    After considering the comments, we are requiring, as proposed,
investment companies filing registration statements on Forms S-6, N-14,
N-5, N-1A, N-2, N-3, N-4, N-6, and reports on Form N-CSR, to include a
hyperlink to each exhibit (other than an exhibit filed in XBRL)
identified in the filing's exhibit index, unless the exhibit is filed
in paper pursuant to a temporary or continuing hardship exemption under
Rule 201 or Rule 202 of Regulation S-T, or pursuant to Rule 311 of
Regulation S-T.\273\ In addition, we are extending similar exhibit
hyperlinking and HTML filing requirements to filings on Form N-8B-
2.\274\ Consistent with our rules for operating companies, we are not
requiring investment companies to refile electronically any exhibits
previously filed in paper.\275\
---------------------------------------------------------------------------

    \273\ See Rule 102(d); Rule 105(d) of Regulation S-T.
    \274\ Form N-8B-2 is the form used by unit investment trusts
other than separate accounts that are currently issuing securities
to register under the Investment Company Act. The form requires the
registration statement to include exhibits similar to those required
under the Commission's other investment company registration forms.
We believe extending similar exhibit hyperlinking and HTML filing
requirements to filings on Form N-8B-2 would further achieve our
objective of facilitating access to exhibits by investors and other
users of the information.
    \275\ See Instruction 1 to paragraph (d) of Rule 105.
---------------------------------------------------------------------------

    A registered investment company will be required to correct an
inaccurate or nonfunctioning link or hyperlink to an exhibit as
follows. In the case of a registration statement that is not yet
effective, the filer will be required to file an amendment to the
registration statement containing the inaccurate or nonfunctioning link
or hyperlink. In the case of a registration statement that has become
effective, the filer will be required to correct an inaccurate or
nonfunctioning link or hyperlink in the next post-effective amendment,
if any, to the registration statement. \276\ In the case of a report on
Form N-CSR, the filer will be required to correct the inaccurate or
nonfunctioning link or

hyperlink in its next report on Form N-CSR.
---------------------------------------------------------------------------

    \276\ See Instruction 2 to paragraph (d) of Rule 105. We
proposed to amend Instruction 2 to paragraph (d) of Rule 105 to
include a new provision pertaining to an investment company
registration statement that has become effective that contains an
inaccurate or nonfunctioning link or hyperlink. That new provision
would have required the filer to correct the link or hyperlink in
the next post-effective amendment, if any, to the registration
statement. We are not adopting the proposed amendment because the
provision would be duplicative of the current provision of
Instruction 2 to paragraph (d) of Rule 105.
---------------------------------------------------------------------------

    In connection with the exhibit hyperlinking requirements, we are
also adopting an amendment to Regulation S-T Rule 105 to require
filings on Forms S-6, N-14, N-5, N-1A, N-2, N-3, N-4, N-6, N-8B-2, and
N-CSR be submitted in HTML format. Prior to this amendment, electronic
filers were permitted to submit such filings in either the ASCII format
or HTML format. Because the ASCII format does not support hyperlink
functionality, the exhibit hyperlinking requirement is feasible only if
documents are filed in HTML. Accordingly, electronic filers will now be
required to file registration statements and reports on Form N-CSR (and
any amendments thereto) in HTML format.\277\
---------------------------------------------------------------------------

    \277\ See amendments to Regulation S-T Rule 105(d). While the
affected registration statements and reports will be required to be
filed in HTML pursuant to the amendments to S-T Rule 105,
registrants will continue to be permitted to file in ASCII any
schedules or forms that are not subject to the exhibit filing
requirements, such as proxy statements, or other documents included
with a filing, such as an exhibit.
---------------------------------------------------------------------------

C. Proposed Amendments Not Being Adopted

1. Forms--Captions and Item Numbers
    The Commission proposed amendments to Form 10, Form 10-K, and Form
20-F to allow registrants to exclude item numbers and captions or to
create their own captions tailored to their disclosure.\278\ The
proposed amendments did not affect captions that are expressly required
by the forms or Regulation S-K.\279\ The proposed amendments were
intended to reduce the use of unnecessary cross-references when
information may be responsive to more than one disclosure item in the
Exchange Act forms. The Commission stated its belief that increasing
flexibility in this manner may reduce repetitive disclosure or
unnecessary cross-references when information may be responsive to more
than one item and thereby enhance the overall readability of required
disclosures.
---------------------------------------------------------------------------

    \278\ Rule 12b-13 requires registrants to include the numbers
and captions of all items in these forms. Although provisions in a
form control when they cover the same subject matter as a rule in
Regulation 12B, these forms do not contradict Rule 12b-13.
    \279\ For example, Form 10-K and Form 20-F require captions for
``audit fees,'' ``audit-related fees,'' ``tax fees,'' and ``all
other fees.'' Regulation S-K requires a caption for ``risk
factors.''
---------------------------------------------------------------------------

    Of the commenters who addressed the issue, a majority opposed the
proposal to amend Form 10, Form 10-K, and Form 20-F to eliminate the
requirements to include most item numbers and captions.\280\ While they
supported the Commission's intent to allow registrants greater
flexibility over the presentation of their disclosure, these commenters
cautioned that this change could make an investor's task more
challenging. Commenters suggested that the required captions and item
numbers help investors navigate filings, make it more easy to locate
information important to them, and enhance their ability to compare
information in different filings.
---------------------------------------------------------------------------

    \280\ See, e.g., letters from Fenwick and Reed Smith. But see
letter from E&Y (supporting the proposal for providing registrants
more flexibility in organizing disclosures and tailoring their
presentation).
---------------------------------------------------------------------------

    In light of these comments, we have decided not to adopt the
proposed changes to the item number and caption requirements of Form
10, Form 10-K, and Form 20-F. Upon further review, we believe that any
potential benefits from the amendments that would accrue to registrants
and investors by permitting more variability in the presentation of
disclosure could be outweighed by the risk that the changes could
impair an investor's ability to use and navigate the information
efficiently and effectively.
2. Subsidiaries of the Registrant and Entity Identifiers
    Item 601(b)(21)(i) requires a registrant to list as an exhibit all
of its subsidiaries, the state or other jurisdiction of incorporation
or organization of each, and the names under which those subsidiaries
do business.\281\ The Commission proposed amendments to Item
601(b)(21)(i) that would require registrants to also include in the
exhibit the legal entity identifier (``LEI''), if one has been
obtained, of the registrant and each subsidiary listed.
---------------------------------------------------------------------------

    \281\ Item 601(b)(21)(i) of Regulation S-K [17 CFR
229.601(b)(21)(i)].
---------------------------------------------------------------------------

    Comments on the proposal were mixed. Commenters who were in favor
of the proposal \282\ generally stated that LEIs will make it easier
for investors, analysts, and regulators to understand relationships
between interrelated companies and more accurately assess investment
risk.\283\ Several commenters, however, expressed doubts about the
benefits of the information \284\ or were concerned that it would be
costly and time consuming to acquire and maintain LEIs, particularly
for registrants with numerous subsidiaries or affiliates operating
globally.\285\ In light of these comments, we have decided not to adopt
the amendments to Item 601(b)(21)(i) as proposed.
---------------------------------------------------------------------------

    \282\ See letters from CII, The FACT Coalition, Merrill,
Morningstar, and XBRL US.
    \283\ See, e.g., letters from CII, Morningstar, and XBRL US.
    \284\ See, e.g., letters from Cravath, Financial Executives
(indicating that such rules may not be necessary outside the
financial services industry), IMA, and UnitedHealth.
    \285\ See letter from Financial Executive. See also letters from
Ball and CCMC.
---------------------------------------------------------------------------

D. Removal of Outdated Requirement

    Rule 312 of Regulation S-T permitted issuers of asset-backed
securities, for their filings filed on or before June 30, 2012, to post
static pool disclosures on an internet website under certain conditions
in lieu of filing the information on EDGAR. This temporary
accommodation lapsed on June 30, 2012, and in 2014, in the adopting
release for revisions to disclosure requirements for asset-backed
securities, the Commission reiterated that issuers are no longer able
to use Rule 312 as a means to provide their static pool
information.\286\ As stated in that release, the Commission did not
remove Rule 312 at that time since asset-backed issuers that previously
provided static pool information via a website were required to retain
all versions of the information provided through the website for a
period of not less than five years. Because the period for retention
has now lapsed, the rule has become obsolete due to the passage of
time, and therefore we are removing Rule 312 from Regulation S-T.\287\
---------------------------------------------------------------------------

    \286\ See Asset-Backed Securities Disclosure and Registration,
Release No. 33-9638 (Sept. 4, 2014) [79 FR 57184 at 57258].
    \287\ We find that there is good cause to adopt the amendment
without notice and comment. Because the amendment makes a technical
change to eliminate an obsolete provision, notice and comment are
unnecessary. See 5 U.S.C. 553(b)(B).
---------------------------------------------------------------------------

III. Other Matters

    If any of the provisions of these rules, or the application thereof
to any person or circumstance, is held to be invalid, such invalidity
shall not affect other provisions or application of such provisions to
other persons or circumstances that can be given effect without the
invalid provision or application.
    Section 553(d) of the Administrative Procedure Act generally
requires an agency to publish an adopted rule in the Federal Register
30 days before it becomes effective.\288\ This requirement does not
apply, however, if the adopted rule is a ``substantive rule which
grants or recognizes an exemption or relieves a restriction.'' \289\ We
find that our amendments to the rules governing redaction of
confidential information in material contracts, discussed in Section
II.A.2. above, are substantive rules that

relieve a restriction. Specifically, these amendments relieve
registrants of the requirement to prepare and process confidential
treatment requests for information in their material contracts filed as
exhibits, so long as the information is not material and is likely to
cause competitive harm to the registrant if publicly disclosed.\290\
Accordingly, the following provisions are effective April 2, 2019:
Amendments to Items 601(b)(2)(ii) and 601(b)(10)(iv) of Regulation S-K;
paragraph 4(a) of Instructions as to Exhibits of Form 20-F; Instruction
6 to Item 1.01 of Form 8-K; new Instruction 4 to Item 28 of Form N-1A;
new Instruction 6 to Item 25.2 of Form N-2; new Instruction 5 to Item
29(b) of Form N-3; new Instruction 5 to Item 24(b) of N-4; new
Instruction 3 of Instructions as to Exhibits of Form N-5; new
Instruction 3 to Item 26 of Form N-6; new Instruction 3 to Item 16 of
Form N-14; new Additional Instruction 3 to the Instructions as to
Exhibits of Form S-6; and new Instruction 3 to IX. Exhibits of Form N-
8B-2.\291\
---------------------------------------------------------------------------

    \288\ See 5 U.S.C. 553(d).
    \289\ See 5 U.S.C. 553(d)(1).
    \290\ See supra Section II.A.2.c.
    \291\ But see infra Section V.B. for a discussion of the
compliance dates for the HTML filing and exhibit hyperlinking
requirements.
---------------------------------------------------------------------------

IV. Transition Matters

    If a registrant has a confidential treatment request pending at the
time the amended rules governing redaction of confidential information
in material contracts become effective, the registrant may, but is not
required to, withdraw its pending application. The Commission and its
staff will continue to process pending CTR applications that are not
withdrawn, following established procedures. Registrants who opt to
withdraw their CTR applications in order to rely on the amended rules
are advised to refile the exhibit or exhibits, in redacted form, in an
amended filing with the Commission that conforms to the amended rules.
Registrants should contact the Assistant Director office, or in the
case of an investment company the Division of Investment Management's
Disclosure Review and Accounting Office, responsible for reviewing
their filings to coordinate the withdrawal of any confidential
treatment application and the refiling of the exhibit or exhibits.

V. Compliance Dates

    Except as noted above in Section III (Other Matters) and below,
registrants will be required to comply with these amendments beginning
May 2, 2019.

A. Tagging of Cover Page Data

    We are adopting phased compliance dates for the requirements to tag
data on the cover pages of Form 10-K, Form 10-Q, Form 8-K, Form 20-F,
and Form 40-F in Inline XBRL. To mitigate the potential burden
associated with the transition of filers and preparers to Inline XBRL
generally, these dates are identical to the compliance dates for
mandatory compliance with the Inline XBRL rules set forth in the Inline
XBRL Adopting Release.\292\ The date of compliance depends on the type
of filer, as follows:
---------------------------------------------------------------------------

    \292\ See supra note 258.

------------------------------------------------------------------------
            Operating companies                 Compliance date \293\
------------------------------------------------------------------------
Large accelerated filers that prepare       Reports for fiscal periods
 their financial statements in accordance    ending on or after June 15,
 with U.S. GAAP.                             2019.
Accelerated filers that prepare their       Reports for fiscal periods
 financial statements in accordance with     ending on or after June 15,
 U.S. GAAP.                                  2020.
All other filers..........................  Reports for fiscal periods
                                             ending on or after June 15,
                                             2021.
------------------------------------------------------------------------

    As illustrated, we are adopting a three-year phase-in whereby: (i)
Large accelerated filers that prepare their financial statements in
accordance with U.S. GAAP will be required to comply with the cover
page tagging requirements in reports for fiscal periods ending on or
after June 15, 2019; (ii) accelerated filers that prepare their
financial statements in accordance with U.S. GAAP will be required to
comply in reports for fiscal periods ending on or after June 15, 2020;
and (iii) all other filers that are subject to the cover page tagging
requirements, including foreign private issuers that prepare their
financial statements in accordance with IFRS, will be required to
comply in reports for fiscal periods ending on or after June 15, 2021.
Domestic form filers \294\ will be required to comply beginning with
their first Form 10-Q for a fiscal period ending on or after the
applicable compliance date, as opposed to the first filing for a fiscal
period ending on or after that date.\295\
---------------------------------------------------------------------------

    \293\ Form 10-Q filers will not become subject to the Inline
XBRL requirements with respect to Form 10-K or any other form until
after they have been required to comply with the Inline XBRL
requirements for their first Form 10-Q for a fiscal period ending on
or after the applicable compliance date for the respective category
of filers.
    \294\ Form 20-F and 40-F filers do not have quarterly report
filing obligations and are therefore not affected by this provision.
    \295\ As an example, a Form 10-Q filer in the first phase-in
group with a calendar fiscal year end will be required to begin
compliance with its Form 10-Q for the period ending June 30, 2019.
As a further example, a Form 10-Q filer in the first phase-in group
with a June 30 fiscal year end will be required to begin compliance
with its Form 10-Q for the period ending September 30, 2019.
---------------------------------------------------------------------------

    To be consistent with existing Inline XBRL data-tagging
requirements, these cover page tagging requirements only apply to
electronic filers that file the specified forms and who are required to
submit Interactive Data Files in Inline XBRL format under Regulation S-
T.\296\ Therefore, the requirements do not apply to non-operating
companies such as any investment companies registered under the
Investment Company Act, business development companies, as defined in
Section 2(a)(48) of that Act,\297\ entities that report under the
Exchange Act and prepare their financial statements in accordance with
Article 6 of Regulation S-X,\298\ or asset-backed issuers.
---------------------------------------------------------------------------

    \296\ See new Rule 406 of Regulation S-T [17 CFR 232.406].
    \297\ 15 U.S.C. 80a-2(a)(48).
    \298\ 17 CFR 210.6-01 through 210.6-10.
---------------------------------------------------------------------------

B. Hyperlinks and HTML Format for Investment Companies

    We are adopting a transition period that is intended to provide
investment company registrants time to prepare filings to include
hyperlinks to exhibits and to information incorporated by reference, as
well as help mitigate the cost burdens related to switching over to
HTML format for registrants currently submitting filings in ASCII. All
registration statement and Form N-CSR filings made on or after April 1,
2020 must be made in HTML format and comply with the rule and form
amendments pertaining to the use of hyperlinks. However, we welcome
early compliance with the new filing requirements.

VI. Economic Analysis

    We are sensitive to the economic effects that may result from the
amendments. Securities Act Section 2(b),\299\ Exchange Act Section
3(f),\300\ and Investment Company Act Section 2(c) \301\ require us,
when engaging in rulemaking that requires us to consider or determine
whether an action is necessary or appropriate in (or, with respect to
the Investment Company Act, consistent with) the public interest, to
consider, in addition to the protection of investors, whether the
action will promote efficiency, competition, and capital formation.
Additionally, Exchange Act Section 23(a)(2) \302\ requires us, when
adopting rules and

amendments under the Exchange Act, to consider the impact that any new
rule will have on competition and not to adopt any rule or amendment
that will impose a burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Exchange Act.
---------------------------------------------------------------------------

    \299\ 5 U.S.C. 77b(b).
    \300\ 15 U.S.C. 78c(f).
    \301\ 15 U.S.C. 80a-2(c).
    \302\ 15 U.S.C. 78w(a)(2).
---------------------------------------------------------------------------

    The expected economic effects of the amendments, as well as
possible alternatives to the amendments, are discussed in detail below.
Where possible, we have sought to quantify the benefits, costs, and
effects on efficiency, competition, and capital formation expected to
result from the amendments. However, we are unable to reliably quantify
many of the economic effects due to limitations on available data.
Therefore, parts of the discussion below are qualitative in nature,
although we try to describe, where possible, the direction of these
effects.
    A disclosure regime that facilitates the disclosure of material,
reliable information can reduce informational asymmetries between
managers of companies and investors, which can enhance capital
formation and the allocative efficiency of the capital markets. At the
same time, there are potential drawbacks associated with disclosure
requirements. For example, disclosure can be costly for registrants to
produce and disclosure of sensitive information can result in
competitive disadvantages. These general considerations help to frame
our analysis of the potential economic effects of the amendments, as
discussed in detail below.\303\
---------------------------------------------------------------------------

    \303\ See Proposing Release Section III.A. for detailed
discussion of the benefits and costs of disclosure.
---------------------------------------------------------------------------

    In the economic analysis that follows, we first examine the current
regulatory and economic landscape that forms the baseline for our
analysis. We then analyze the likely economic effects arising from the
rule amendments relative to that baseline. These economic effects
include the costs and benefits and impact on efficiency, competition,
and capital formation.

A. Baseline

    To assess the economic effect of the amendments, we are using as
our baseline the current state of the Commission's filing and
disclosure regime. In characterizing the baseline, it is useful to
distinguish between operating companies and investment companies.
Although both types of registrants are subject to registration and
reporting requirements, there are differences in the specific rules and
forms applicable to each. In particular, on March 1, 2017, the
Commission adopted amendments requiring registrants that file
registration statements and reports subject to the exhibit requirements
under Item 601 of Regulation S-K or that file Form F-10 or Form 20-F
(i.e., operating companies) to submit these filings in HTML format and
to include a hyperlink to each exhibit listed in the exhibit index of
these filings. In contrast, there is currently no comparable
requirement for investment companies.
    For operating companies, the baseline includes the disclosure
requirements in Regulation S-K and related rules and forms as well as
existing guidance on the application of those requirements. Table 1
below suggests that the amendments to Regulation S-K and related rules
and forms will apply to a substantial number of operating companies. On
average, about 7,400 different registrants per year have filed periodic
reports on Form 10-K and Form 10-Q in recent years. As shown in the
table below, approximately 800 foreign private issuers provided
periodic information to investors in the U.S. capital markets using
Form 20-F and Form 40-F. The number of registrants filing definitive
proxy statements on Schedule 14A has exceeded 5,000 each year.\304\
---------------------------------------------------------------------------

    \304\ We note that, in addition to operating companies,
registered investment companies file proxy materials as well.

                  Table 1--Number of Registrants Filing Various Disclosure Forms From 2014-2018
----------------------------------------------------------------------------------------------------------------
              Year                     10-K            10-Q            20-F            40-F           DEF 14A
----------------------------------------------------------------------------------------------------------------
2014............................           7,857           7,872             669             143           5,259
2015............................           7,767           7,676             687             131           5,390
2016............................           7,373           7,147             675             126           5,126
2017............................           7,074           6,816             658             129           5,104
2018............................           6,907           6,549             679             127           5,063
----------------------------------------------------------------------------------------------------------------

    As discussed above, investment companies making filings on certain
forms required by the Commission will also be affected by the
amendments. Table 2 below lists the number of filings filed by
investment companies in calendar year 2018 using EDGAR submission types
potentially affected by the amendments, broken out by the number of
filings in HTML and ASCII format. From January 1, 2018 to December 31,
2018, investment companies filed 64,470 filings using EDGAR submission
types potentially affected by the amendments. Of these filings, the
vast majority (58,137) were filed in HTML, while 10% (6,333) were filed
in ASCII format. As shown in Table 2, in 2018, more filings were made
in HTML than ASCII format, with the exception of filings on Form N-8B-2
and Form S-6 where more filings were made in ASCII than HTML format.

 Table 2--Number of Potentially Affected Filings From January 1, 2018 to
                            December 31, 2018
------------------------------------------------------------------------
                                          Number of HTML     Number of
                                              filings      ASCII filings
------------------------------------------------------------------------
N-1A....................................          42,316             329
N-2.....................................           1,514              20
N-3.....................................              26               9
N-4.....................................           5,374             650
N-5.....................................               0               0
N-6.....................................           1,614             190
N-8B-2..................................               1               3
N-14....................................             271               0
N-CSR...................................           6,575             134
S-6.....................................             446           4,998
                                         -------------------------------
    Total...............................          58,137           6,333
------------------------------------------------------------------------

    The amendments will require registrants to include hyperlinks in
the case of exhibits included with the forms and exhibits that are
incorporated by reference from a previously filed document. To draw a
baseline indicative of current disclosure practices, we selected a
random sample

of 400 filings (347 in HTML and 53 in ASCII) submitted in 2017 that may
be affected by the amendments. Table 3 below shows the average and
median number of exhibits listed in the sampled filings by the type of
exhibit (i.e., filed with the form vs. incorporated by reference).

                                                  Table 3--Number of Exhibits in Sampled Filings \305\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Number of exhibits listed in    Number of exhibits filed with        Number of exhibits
                                                     the index                      the filing               incorporated by reference       Number of
                                         ------------------------------------------------------------------------------------------------     sampled
                                              Average         Median          Average         Median          Average         Median          filings
--------------------------------------------------------------------------------------------------------------------------------------------------------
N-1A....................................            34.8               0             2.1               0            32.8               0             203
N-2.....................................            20.9              24             4.9               3              16              12               7
N-3.....................................           171.5           171.5              14              14           157.5           157.5               2
N-4.....................................            58.2            37.5             3.1               3            55.1              35              24
N-5.....................................              NA              NA              NA              NA              NA              NA               0
N-6.....................................             183             183              14              14             169             169               1
N-8B-2..................................              NA              NA              NA              NA              NA              NA               0
N-14....................................            19.5            19.5             8.5             8.5              11              11               2
N-CSR...................................             2.3               2             2.1               2             0.2               0             120
S-6.....................................             6.8               8               2               2             4.8               4              41
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Filings.............................            24.1               2             2.3               2            21.8               0             400
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Table 3 shows significant variation in the number of exhibits
listed in the exhibit index across different types of filings.
Registration statements on Form N-3, Form N-4, and Form N-6 typically
contain a large number of exhibits and had more exhibits incorporated
by reference than filings on other forms affected by the amendments. Of
the 400 sampled filings, we found that none of them included
hyperlinked indexes.
---------------------------------------------------------------------------

    \305\ Relative to the random sample in Table 3 of the Proposing
Release, the random sample in Table 3 of this release excludes
definitive materials filed under the Securities Act Rule 497 because
these materials do not include exhibits.
    In counting the number of exhibits, we did not include the
following exhibits: 101.INS XBRL Instance Taxonomy; 101.SCH XBRL
Taxonomy Extension Schema Document; 101.CAL XBRL Taxonomy Extension
Calculation Linkbase Document; 101.DEF XBRL Taxonomy Extension
Definition Linkbase Document; 101.LAB XBRL Taxonomy Extension Labels
Linkbase Document; and 101.PRE XBRL Taxonomy Extension Presentation
Linkbase Document because XBRL exhibits are not covered by the
amendments.
    The random sampling did not result in any Forms N-5 and N-8B-2
being drawn.
---------------------------------------------------------------------------

    Disclosure requirements involve trade-offs between benefits to
investors in terms of reducing information asymmetries and costs to
registrants associated with producing disclosure. While the amendments
will apply to all registrants subject to the regulation, the trade-offs
between the costs and benefits of disclosure requirements will vary
across different types of registrants. For example, because many of the
costs associated with disclosure do not vary with firm size, smaller
companies may have higher disclosure costs in proportion to their
revenues. Smaller companies also may have relatively higher disclosure
benefits.\306\ While the fixed costs of disclosure requirements
typically constitute a higher percentage of revenues for smaller
companies than for larger companies, the benefits of disclosure may be
greater for smaller companies because information asymmetries between
investors and managers of smaller companies are typically higher than
for larger companies. The costs of disclosure requirements can be also
higher for foreign registrants to the extent that the disclosure
requirements in the United States are different from the disclosure
requirements in their home countries.
---------------------------------------------------------------------------

    \306\ Based on a review of filings, the Commission observed in a
recent rulemaking that approximately 39% of registrants qualified as
smaller reporting companies. See Smaller Reporting Company
Definition, Release No. 33-10513; 34-83550; File No. S7-12-16 (Sept.
10, 2018), available at https://www.sec.gov/rules/final/2018/33-10513.pdf. Literature provides evidence consistent with the idea
that the costs of disclosure requirements can be higher for smaller
than larger firms. See, e.g., Engel, E., Hayes, R.M., & Wang, X.,
The Sarbanes-Oxley Act and firms' going private decisions. 44 J. of
Acc. and Econ. 116, 116-145 (2007). Literature also provides some
evidence that the benefits of disclosure requirements can be higher
for smaller firms. See, e.g., Eleswarapu, V.R., Thompson, R., &
Venkataraman, K., The Impact of Regulation Fair Disclosure: Trading
Costs and Information Asymmetry. 39 J. of Fin. and Quant. Anal. 209,
209-225 (2004).
---------------------------------------------------------------------------

B. Economic Analysis of the Amendments: General Assessment, Including
Impact on Efficiency, Competition, and Capital Formation

    In this section, we evaluate the broad economic effects of the
amendments, including a discussion of their impact on efficiency,
competition, and capital formation. The amendments will discourage
repetition and disclosure of information that is immaterial (see, e.g.,
amendments to Item 102 and Instruction 1 to Item 303(a)); will decrease
investors' information processing costs (see, e.g., Rule 411, Rule 12b-
23, and Rule 0-4); and will decrease registrants' costs to prepare
filing materials (see, e.g., amendment to Item 601(b)(10)). The
amendments modify a well-established and robust disclosure regime that
has existed for many years. As a result, we expect the aggregate impact
of the amendments (in the form of more accurate share prices, better
accountability of managers, and increased capital market liquidity) to
be incremental to the effects that have already been realized from the
existing disclosure regime.
    Disclosure provides benefits to participants in financial markets
by reducing information asymmetries that exist between investors in a
company and managers tasked with operating the company. Both
registrants and investors alike should generally benefit from the
amendments because they are designed to simplify the requirements and
resulting content of existing disclosures while still providing all
material information. We believe that changes to the requirements will
result in improved presentation of information, which we expect to
increase the usefulness of the disclosures for investors and generally
lower the regulatory burden (and compliance costs) for registrants. In
addition, we expect that improving the information environment with
modernized and simplified disclosures for all filers will incrementally
enhance capital formation and the allocative efficiency of the capital
markets through more accurate share prices, better accountability of

managers, and increased capital market liquidity. We do not expect that
the amendments will have a substantial effect on competition.
    We expect some of the amendments to entail modest initial
implementation costs. However, we believe that the initial costs will
be manageable for most registrants. Furthermore, those costs will be
offset by future savings as a result of simplified and streamlined
disclosure requirements, after implementation. Some of the amendments,
such as those that impose new data tagging, hyperlinking, or disclosure
requirements, will involve not only implementation costs but will also
increase compliance costs for registrants going forward, although as
discussed below, we do not expect these additional costs to be
significant relative to current compliance costs.
    While the purpose of the proposed amendments is to simplify and
modernize public company disclosure requirements without loss of
material information, we acknowledge that the amendments could result