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                                                 Washington, D.C.

                                                 January 17, 1997

Mr. Jonathan G. Katz
Secretary
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549


Offshore Press Conferences, Meetings with Company Representatives
Conducted Offshore and Press Related Materials Released Offshore
Release Nos. 33-7356; 34-37803 (October 10, 1996)
(File No. S7-26-96)

Dear Mr. Katz:

   We welcome the opportunity to comment on the issues raised by
the Securities and Exchange Commission (the "Commission") on the
above-captioned release (the "Release").  We support the
Commission's efforts to clarify that legitimate journalistic
activities should not implicate the filing or procedural
provisions of the U.S. securities laws.  While we generally
support the Commission's adoption of a safe harbor with respect
to offshore press activities, we are in favor of even broader
reform.  Technological advances and internationalization of the
markets have profoundly changed the implications of the current
regulatory framework in ways that call for reexamination of
geography based regulation.

Securities Act Safe Harbor

   The Commission proposes to provide a safe harbor from Section
5 under the Securities Act of 1933 (the "Securities Act") for
press contacts made and press releases delivered offshore in
connection with any offering of securities, provided that a
portion of the offering is made offshore, foreign journalists are
provided comparable access and certain written material includes
specified legends.  The safe harbor would be available both with
respect to registered and exempt offerings.

   We fully agree with the Commission that it is in the public
interest and consistent with the protection of investors to
provide a safe harbor for journalistic contacts in connection
with both registered and exempt offerings.  However, we have two
principal reservations concerning the proposed Section 5 safe
harbor (which are equally applicable to the proposed Williams Act
safe harbor, discussed below).  First, there seems little
principled basis for requiring that the press contacts occur
offshore.  No investor protection interest is served by such
requirement and the location of the press contact generally will
not affect either the content or dissemination of the
information.  The requirement simply adds to the complexity of
the rule, makes it more expensive and cumbersome for U.S. news
media to access information directly and leaves in place an
incentive to deny U.S. journalists access to information made
available to other news media.  The location of the press contact
in no way affects the legitimacy of the journalistic activity.
Having (in our view) correctly determined that legitimate
journalistic coverage of a securities offering is not
inconsistent with the purposes of the federal securities laws and
the interests of investors, the Commission should recognize that
the locus of the press contact is irrelevant.

   Likewise, the requirement that some portion of the offering be
conducted offshore does not further investors' interests or lend
itself to clear application.  Indeed, such a requirement may
preclude an issuer from using the most economically advantageous
structure of an offering to come within the ambit of the safe
harbor or, more likely, limit the utility of the safe harbor and
result in the continued exclusion of U.S. journalists from
participation in news coverage of the offering.  Moreover, as the
Commission recognizes in the Release, offerings frequently are
not clearly separated into identifiable onshore and offshore
tranches.  It may not be possible at the outset to determine
where sales will be successfully made.  To avoid being unduly
narrow, the safe harbor requirement would have to focus on the
locus of offers, not simply sales, which would introduce a
counterproductive element of subjectivity.  The Commission seems
to suggest that there would be no reason for offshore press
contacts concerning an exclusively U.S. offering.  However,
foreign issuers may be subject to stock exchange and other
offshore requirements to inform the market of such transactions;
so too may domestic issuers as the Commission has recognized in
its safe harbor Rules 135(a), (b) and (c).

   The geographic focus of both the press contact and offering
location requirements is unnecessary and ineffective and should
be eliminated from the safe harbor.  Antifraud prohibitions,
journalistic independence and the remaining conditions of the
safe harbor should provide adequate safeguards against abuse of
the safe harbor.

   We fully concur with the Commission's proposal to provide a
safe harbor based on objective criteria, unrestricted with
respect to the issuer, content or nature of the offering.
Experience under the Commission's current guidance with respect
to offshore press contacts has made clear that without an
objective safe harbor with minimal procedural conditions, issuers
and bidders will find it safer and easier to exclude U.S.
journalists rather than run the risk of violating the regulatory
provisions of the Securities Act or the Williams Act.
Restrictions on the content of information concerning an issuer
or an offering will not reduce offshore press communications.  It
will, as it has done in the past, simply cause U.S. journalists'
access to information to be cut off or delayed.  The Commission
asks whether the safe harbor should cover press releases that are
limited in a manner similar to that covered by Rules 135(a), (b)
and (c).  As noted in our comment letter on the Commission's
Concept Release No. 33-7314, the highly restrictive nature of
these safe harbors severely limits their utility and operates to
compel issuers to artificially segment information disseminated
to the public.  In the case of offshore press communications,
issuers have another choice:  exclude U.S. journalists entirely
and forgo the need to rely on the safe harbor.

   Similarly, any requirement to file with or submit to the
Commission written press communications would likely deter
reliance on the safe harbor, particularly in the case of foreign
issuers.  This would be all the more true if a registration
statement was required to be on file prior to reliance on the
safe harbor in connection with a public offering.  As the
Commission is fully aware, there is often significant media
coverage of a proposed offering well in advance of the
preparation of a registration statement, or even a decision as to
whether to conduct a public offering in the United States.  Press
coverage of the recent Deutsche Telekom AG offering started
several years prior to the actual offering.  To condition the
safe harbor on the filing of a registration statement could have
the unintended consequence of encouraging those issuers that want
to rely on the safe harbor, particularly foreign issuers, to
proceed with an exempt rather than registered offering in the
United States.

   We agree with the Commission's proposal to extend the safe
harbor to issuers and selling security holders, and to those
acting on behalf of the issuers and selling security holders.  We
assume this would include all those involved in the offering
process:  underwriters, dealers and public relations agents.  It
is unclear who among those subject to Section 5 would be
precluded from relying on the safe harbor and what purpose is
served by limiting the availability of the safe harbor.  We
recommend that the safe harbor be available to any person.

Williams Act Safe Harbor

   As in the case of the Securities Act safe harbor, we see no
principled reason for requiring that the press contact occur
offshore and recommend that the Commission eliminate such
condition.

   The Commission proposes to provide the safe harbor only with
respect to bids made in connection with the securities of a
foreign private issuer.  We believe that consideration should be
given to broadening the safe harbor to cover foreign issuers that
do not qualify for foreign private issuer status where the bid is
also subject to takeover laws of a foreign jurisdiction.  Unlike
Section 14(d) of the Securities Exchange Act of 1934, certain
foreign takeover laws base their jurisdiction, in large part, on
the target company's domicile in the jurisdiction.  For example,
the U.K. City Code of Take-overs and Mergers applies where the
offeree is a public company resident in the United Kingdom,
Channel Islands or Isle of Man. The Code defines resident
companies to include those incorporated, and with their head
office and central management, in one of those jurisdictions.
Such companies may not quality for foreign private issuer status
under Rule 405 of the Securities Act where, for example, they
have a majority of U.S. shareholders and conduct significant
operations in the United States.  Nonetheless they may have
reason to conduct press activity offshore in accordance with
foreign law and local practice.  Exclusion of bids for such
foreign targets is likely to cause U.S. journalists to be
excluded from such offshore press contacts.

   As with the Securities Act safe harbor, we do not believe that
any written materials should be required to be filed with the
Commission, even when there is a substantial U.S. market interest
in the target company.  Likewise, reliance on the safe harbor
should not be conditioned on the bidder's undertaking to extend
an offer in compliance with Section 14(d)(l) to U.S. investors.
Such requirements would have the effect of deterring reliance on
the safe harbor.

                           *   *   *

   We appreciate the opportunity to comment on the proposed safe
harbor for offshore press activities and believe that broader
reforms can and should be implemented expeditiously for the
benefit of all market participants.

   If the Commission or the staff have any questions concerning
the foregoing, please call Mark Kessel at (212) 848-7285 or Arbie
R. Thalacker at (212) 848-7085.

                                        Very truly yours,



                                        Shearman & Sterling