SECURITIES AND EXCHANGE COMMISSION

     17 CFR Parts 228, 229, 230,  239 and 274

     [Release Nos. 33-7497; 34-39593; IC-23011

     International Series No. 1113; File No. S7-3-97]

     RIN:  3235-AG88

      Plain English Disclosure

     AGENCY:   Securities and Exchange Commission

     ACTION:   Final Rules

     SUMMARY:  We are adopting the plain English rule with some

     changes based on the comments we received and the lessons we

     learned from the plain English pilot participants.  The rule

     requires issuers to write the cover page, summary, and risk

     factors section of prospectuses in plain English.  We are

     changing the existing requirements for these sections to the

     extent they conflict with the plain English rule.  We are also

     giving issuers more specific guidance on how to make the entire

     prospectus clear, concise, and understandable.  We believe that

     using plain English in prospectuses will lead to a better

     informed securities market_a market in which investors can more

     easily understand the disclosure required by the federal

     securities laws.

     DATES:  Effective Date.  October 1, 1998.

     Compliance Date.  October 1, 1998.  When we act on the amendments

     to the mutual fund disclosure requirements that we proposed in

     February 1997, we may change the date by which mutual funds must


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     comply with these amendments.

     FOR FURTHER INFORMATION CONTACT:  Ann D. Wallace or Carolyn A.

     Miller at (202) 942-2980 or David Maltz at (202) 942-1921 in the

     Division of Corporation Finance.  If your questions involve

     mutual funds, call Kathleen K. Clarke at (202) 942-0724 or

     Markian Melnyk at (202) 942-0592 in the Division of Investment

     Management.  Direct your questions on the staff's plain English

     handbook to Nancy M. Smith at (202) 942-7040.

     SUPPLEMENTARY INFORMATION:  We are adopting amendments to Rules

     421,1 4612 and 4813 of Regulation C4 and Items 101,5 501,6 502,7

     503,8 and 5089 of Regulations S-K10 and S-B.11  We are also

     adopting minor amendments to Forms S-2,12 S-3,13 S-4,14 S-20,15 F-2,16

     F-3,17 F-4,18  and N-2.19

          Our Office of Investor Education and Assistance will, within

     the next six weeks, issue a final version of  A Plain English

     Handbook:  How to Create Clear SEC Disclosure Documents.  The

     handbook will give techniques and tips on how to create plain

     English disclosure documents.  We suggest you order a hard copy

     by calling 800-SEC-0330.  Some of the handbook's graphic elements

     will not be available on the web version.  A draft version is

     available now on our Internet site (http://www.sec.gov).

                             TABLE OF CONTENTS



     I.   Executive Summary

     II.  Lessons From the Plain English Pilot Program

     III. Rules on How to Prepare Prospectuses


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          A.   Plain English Rule - Rule 421(d)

          B.   Clear, Concise, and Understandable
               Prospectuses - Rule 421(b)

          C.   Comments on Proposed Amendments to
               Rule 421(b) and Rule 421(d)

     IV.  Revisions to Regulations S-K and S-B

          A.   Item 501 - Forepart of Registration Statement
               and Outside Front Cover Page of Prospectus

          B.   Item 502 - Inside Front and Outside Back
               Cover Pages of Prospectus

          C.   Item 503 - Summary Information, Risk Factors,
               and Ratio of Earnings to Fixed Charges

               1.   Summary Information

               2.   Risk Factors

               3.   Ratio of Earnings to Fixed Charges

     V.   Plain English for Investment Companies

     VI.  Phase-In of the Plain English Rule and Other Requirements
     for
          Issuers Other Than Investment Companies
          


     VII. Comments on the Plain English Proposals
               
          A.   Liability Concerns
          
          B.   Staff Plain English Review and
               Comment Process

          C.   Requests for Acceleration

     VIII.     Cost-Benefit Analysis

     IX.  Final Regulatory Flexibility Analysis

     X.   Paperwork Reduction Act

     XI.  Statutory Authority

     Text of the Amendments


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     Appendix A:         Charts on Amendments to Small Business Issuer
                    Rules

     Appendix B:         List of Plain English Pilot Participants

     I.   Executive Summary

          Full and fair disclosure is one of the cornerstones of

     investor protection under the federal securities laws.  If a

     prospectus fails to communicate information clearly, investors do

     not receive that basic protection.  Yet, prospectuses today often

     use complex, legalistic language that is foreign to all but

     financial or legal experts.  The proliferation of complex

     transactions and securities magnifies this problem.  A major

     challenge facing the securities industry and its regulators is

     assuring that financial and business information reaches

     investors in a form they can read and understand.

          In response to this challenge, we undertake today a sweeping

     revision of how issuers must disclose information to investors.

     This new package of rules will change the face of every

     prospectus used in registered public offerings of securities.20

     Prospectuses will be simpler, clearer, more useful, and we hope,

     more widely read.

          First, the new rules require issuers to write and design the

     cover page, summary, and risk factors section of their

     prospectuses in plain English.  Specifically, in these sections,

     issuers will have to use:  short sentences; definite, concrete,

     everyday language; active voice; tabular presentation of complex

     information; no legal or business jargon; and no multiple

     negatives.  Issuers will also have to design these sections to

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     make them inviting to the reader.  In response to comments, the

     new rules will not require issuers to limit the length of the

     summary, limit the number of risk factors, or prioritize risk

     factors.

          Second, we are giving guidance to issuers on how to comply

     with the current rule that requires the entire prospectus to be

     clear, concise, and understandable.  Our goal is to purge the

     entire document of legalese and repetition that blur important

     information investors need to know.

          Also, our Office of Investor Education and Assistance is

     finalizing a handbook with practical tips on how to prepare plain

     English documents.  This handbook explains how to apply plain

     English principles to disclosure documents.

          To ensure a smooth transition, the plain English rule and

     the other changes adopted today will apply beginning October 1,

     1998.  We encourage all participants in securities offerings to

     start following these plain English principles now when writing

     their prospectuses.  Our staff will continue its efforts to

     assist companies in drafting prospectuses in plain English.





     II.  Lessons From the Plain English Pilot Program

          To test plain English in disclosure documents, the Division

     of Corporation Finance started a pilot program in 1996 for public

     companies willing to file plain English documents under either

     the Securities Act of 193321 or the Securities Exchange Act of


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     1934.22  More than 75 companies have volunteered to participate in

     the pilot program.  Many participants have prepared disclosure

     documents that will not be subject to the plain English rule,

     including proxy statements, footnotes to financial statements,23

     and management's discussion and analysis of financial condition

     and results of operations.24

          We have included in Appendix B a list of pilot participants

     that filed plain English documents.  These pilot participants

     produced examples of disclosure that is clear, well-written, and

     designed to increase investors' understanding.

          Our experience with the pilot participants affirms our

     belief that preparing documents in plain English increases

     investors' understanding and helps them make informed investment

     decisions.  The package of rules we are adopting, as well as the

     handbook, will enable issuers to improve dramatically the clarity

     of their disclosure documents.



     III. Rules on How to Prepare Prospectuses

          A.   Plain English Rule - Rule 421(d)

          Rule 421(d), the plain English rule, requires you to prepare

     the front portion of the prospectus in plain English.  You must

     use plain English principles in the organization, language, and

     design of the front and back cover pages, the summary, and the

     risk factors section. Also, when drafting the language in these

     front parts of the prospectus, you must comply substantially with

     six basic principles:


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          *    Short sentences;

          *    Definite, concrete, everyday language;

          *    Active voice;
    
          *    Tabular presentation or bullet lists for complex material,

            whenever possible;

          *    No legal jargon or highly technical business terms; and

          *    No multiple negatives.

          A number of comment letters noted that our rule dictates how

     to write the front of the prospectus.  They are correct.  We have

     seen marked improvement in the clarity of disclosure when pilot

     participants have used these widely recognized, basic principles

     of clear writing.  We believe the benefits to investors support

     mandating the use of these writing principles for the front of

     the prospectus.

          In addition, you must design the cover page, summary, and

     risk factors section to make them easy to read.  You must format

     the text and design the document to highlight important

     information for investors.  The rule permits you to use pictures,

     charts, graphics, and other design features to make the

     prospectus easier to understand.

          B.   Clear, Concise, and Understandable Prospectuses -
               Rule 421(b)

          Rule 421(b) currently requires that the entire prospectus be

     clear, concise, and understandable.  This requirement is in

     addition to the plain English rule we are adopting, which applies

     only to the front of the prospectus.

          We are adopting, as proposed, amendments to Rule 421(b).

     These amendments provide guidance on how to prepare a prospectus

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     that is clear, concise, and understandable.  The amendments set

     out four general writing techniques that you must follow and list

     four conventions to avoid when drafting the prospectus.  As

     several comment letters noted, these amendments codify our

     earlier interpretive advice.25

          Amended Rule 421(b) requires you to use the following

     techniques when writing the entire prospectus:

                   *     Present information in clear, concise

               sections, paragraphs, and sentences.  Whenever

               possible, use short explanatory sentences and bullet

               lists;

                   *     Use descriptive headings and subheadings;

                   *     Avoid frequent reliance on glossaries or

               defined terms as the primary means of explaining

               information in the prospectus.  Define terms in a

               glossary or other section of the document only if the

               meaning is unclear from the context.  Use a glossary

               only if it facilitates understanding of the disclosure;

               and

                   *     Avoid legal and highly technical business

               terminology.

          The new note to Rule 421(b) provides guidance on how to

     comply with the rule's general requirements.  The note lists the

     following drafting conventions to avoid because they make your

     document harder to read:

                   *     Legalistic or overly complex presentations


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               that make the substance of the disclosure difficult to

               understand;

                   *     Vague boilerplate explanations that are

               readily subject to differing interpretations;

                   *     Complex information copied directly from

               legal documents without any clear and concise

               explanation of the provision(s); and

                   *     Repetitive disclosure that increases the size

               of the document, but does not enhance the quality of

               the information.

          C.   Comments on Proposed Amendments to Rule 421(b) and
               Rule 421(d)

          Several comment letters stated that we should permit public

     companies to use legal and technical business terminology.  The

     letters noted, for example, that high technology companies must

     use technical terms to distinguish their products or services

     from others in the industry.  We recognize that certain business

     terms may be necessary to describe your operations properly.

     But, you should avoid using excessive technical jargon that only

     your competitors or an industry specialist can understand.

          You should write the disclosure in your prospectus for

     investors.  When you use many highly technical terms, the

     investor must learn your dictionary of terms to understand your

     disclosure.  If technical terms are unavoidable, you should make

     every effort to explain their meaning the first time you use

     them.

          Several comment letters noted that some investors,

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     particularly institutional investors, want to read the specific

     terms of contracts or the securities offered.  For example, an

     investor may want to read the specific language of a loan

     agreement's financial covenants or an indenture's default

     provisions.

          Our current rule permits you to summarize an exhibit's key

     provisions in your prospectus.26  Moreover, we require you to file

     material contracts and any instruments that define the rights of

     security holders.  We believe this approach generally serves the

     needs of all investors in the market.  If you cannot adequately

     summarize the language from an exhibit in the prospectus, then

     you should include that language.  However, you must present it

     clearly and explain what it means to investors.



     IV.  Revisions to Regulations S-K and S-B

          We are adopting these revisions largely as we proposed them.

     However, based on the comment letters and our belief that

     communicating clearly should be the focus of disclosure to

     investors, we are not adopting any requirements that would

     require you to:

          *    limit the length of the summary;

          *    limit the number of risk factors; or

     *    prioritize risk factors.

          A.   Item 501 - Forepart of Registration Statement and
     Outside
               Front Cover Page of Prospectus27

          As proposed, we are eliminating the formal design


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     requirements for the prospectus cover page.  We are, however,

     requiring you to limit the front cover of the prospectus to one

     page.  We believe these revisions will allow you to design and

     write a cover page that will focus investors on key information

     about the offering and encourage them to read the important

     information in the prospectus.  Also, we intend for these

     amendments to give you the flexibility you need to design a cover

     page tailored to your company and the offering.

          Under the revised disclosure item, you are free to use

     pictures, graphs, charts, and other designs that accurately

     depict your company, business products, and financial condition.

     The staff will object to design features and font types that make

     the disclosure hard to read or understand.

          We are amending the formalized requirements on how you

     present the mandatory legends on the cover page.  We are not

     placing any restrictions on how you present these legends,

     except:

          *    you must make the legends prominent; and

          *    you must make the print type easy to read.

     Using all capitalized letters for the legends does not give them

     proper prominence.  Rather, it makes them hard to read.  A well-

     designed cover page that does not crowd the legends with other

     text can give them the  prominence they need.

          We have amended Item 501 to give you two plain English

     examples of the legend that states the Commission has not

     approved the offering.28 The item also gives you a plain English


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     example of the legend that states the prospectus is not yet

     complete, commonly called the "red herring" legend.

          We are revising the requirements on information that you

     must always include on the prospectus cover page.  Our goal is to

     have the cover page focus on key information about the offering.

     You should avoid moving information to the cover page

     unnecessarily.

          We had proposed to eliminate the requirement that the cover

     page include a cross-reference to the risk factors section in the

     prospectus.  In response to comment letters emphasizing the

     importance of this information, we are keeping this requirement.

     The cover page must reference the risk factors section and state

     the page number on which the risk factors begin.

          The following table shows the current requirements for the

     prospectus cover page and the changes we are adopting.

                        Regulation S-K - Item  501
                  Current                             Final

     *    Cover page of registration    *    Same
       statement

     *    Company name                  *    Same

     *    Title, amount, and            *    Same
       description of securities offered

     *    Selling security holders      *    Same
       offering

     *    Cross reference to risk       *    Same, except cross-reference
       factors                            must include page number.  No
                                          print type specified
                    Regulation S-K - Item  501, con't.
                  Current                             Final

     *    Formatted distribution table  *    Delete distribution table.
       showing price, underwriting        Use bullet list or other design

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       commission, and proceeds of        that highlights the information
       offering

     *    Show bona fide estimate of    *    Same
       range of maximum offering price
       and number of securities

     *    If price not set, show how    *    Same
       price will be determined

     *    Formatted best efforts        *    Delete distribution table.
       disclosure and distribution table  Use bullet list or other design
                                          that highlights the information

     *    Commission legend             *    Retain in plain English.
                                          Include reference to state
                                          securities commissions.  No print
                                          type specified

     *    State-required legends        *    Same

     *    Underwriters' over-allotment  *    Identify existence of the
       option, expenses of offering,      option and the number of shares.
       commissions paid by others, and    Move all other information to the
       other non-cash consideration and   plan of distribution section
       finders' fees

     *    No requirement to identify    *    Identify market for
       market for securities, trading     securities, trading symbol,
       symbol, underwriters, or type of   underwriters, and type of
       underwriting arrangements          underwriting arrangements

     *    Date of prospectus            *    Same

     *    Prospectus "Subject to        *    Retain in plain English
       Completion" legend

     *    No page limit                 *    Must limit cover to one page

          In our proposing release, we asked whether we should require

     specific information on the prospectus cover page for certain

     types of offerings, such as mergers, exchange offers, or limited

     partnership offerings.  Several comment letters suggested that

     the plain English rule and the revised disclosure requirements

     should replace our earlier interpretive advice on cover page

     disclosure for limited partnership offerings.29

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          We believe that the plain English rule and the revised

     disclosure requirements are consistent with our earlier advice on

     limited partnership offering prospectuses and similar offerings,

     with one significant exception.  Under our advice, the cover page

     must list the offering's key risks, resulting in repetitious

     disclosure of those risks.  However, we believe the unique nature

     of these offerings and the risks they present to investors

     warrant requiring the issuer to highlight these risks on the

     cover page.  Of course, the cover page, summary, and risk factors

     section must otherwise comply with the plain English rule and the

     revised disclosure requirements we are adopting.

          We are not adopting special requirements for any other type

     of offering.  We have had a number of merger prospectuses in the

     pilot program that provide excellent guidance on how to apply

     plain English to these offerings.

               B.   Item 502 - Inside Front and Outside Back Cover
               Pages of Prospectus30

          We are amending the requirements for the inside front cover

     page and outside back cover page of the prospectus to limit

     significantly the information you are required to include on

     these pages.  We believe this will give you further freedom to

     arrange the information in the prospectus from investors'

     viewpoints.  The table at the end of this section shows the

     current requirements for these pages and the changes we are

     adopting.31

          Although we prefer that the required table of contents

     immediately follow the cover page, we believe you should continue

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     to have the flexibility to include it on either the inside front

     or outside back cover page of the prospectus.  However, if you

     deliver a prospectus to investors electronically, you must

     include the table of contents immediately after the cover page.

     This placement will benefit investors because they will not have

     to scroll to the end of the prospectus to see how it is

     organized.

          Although some comment letters recommended that we eliminate

     the requirement to disclose the dealer's prospectus delivery

     obligations, we have decided to retain this disclosure on the

     outside back cover page.  We believe this disclosure is helpful

     to dealers in meeting their legal obligation to deliver the

     prospectus.

                           Regulation S-K - Item  502
                  Current                             Final

     *    Availability of Exchange Act  *    Move to description of
       reports generally                  business section or, for short-
                                          form registration statements, to
                                          the incorporation by reference
                                          disclosure

     *    Identify market for           *    Move to cover page
       securities

     *    Availability of annual        *    Move to description of
       reports to shareholders with       business section
       financial statements for foreign
       issuers and others not subject to
       proxy rules
                       Regulation S-K - Item  502, con't.
                  Current                             Final

     *    Availability of Exchange Act  *    Move to incorporation by
       reports incorporated by reference  reference disclosure
       in short-form registration
       statements

     *    Stabilization legend          *    Move to plan of distribution

                              ======END OF PAGE 15======





                                          section

     *    Passive market making         *    Delete. Disclosure remained
       activities legend                  in plan of distribution section

     *    Dealer prospectus delivery    *    Retain on outside back cover
                                          page

     *    Enforceability of civil       *    Move to description of
       liability provisions of federal    business section
       securities laws against foreign
       persons

     *    Table of contents             *    Same.  If prospectus
                                          delivered electronically, must
                                          immediately follow cover page


               C.   Item 503 - Summary Information, Risk Factors, and
               Ratio of Earnings to Fixed Charges32
               
               1.   Summary Information

          If you include a summary, it must be brief and in plain

     English.  Further, if you include a summary description of the

     company's business operations or financial condition, you must

     write this information in plain English even if you do not

     caption it a "summary."

          Although we have not limited the length of the summary, we

     believe this section should highlight the most important features

     of the offering.  For example, the summary should not include a

     lengthy description of the company's business and business

     strategy.  This detailed information is better suited to the

     disclosure in the body of the prospectus.

          Several comment letters suggested that we require a summary

     section.  We decided against this because a summary may not be

     helpful in all prospectuses.  For example, you may not need to

     summarize the prospectus in a short-form registration statement.

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          Several comment letters suggested that we specify the

     information that must be in a summary.  Because we believe you

     need flexibility to write a summary that is appropriate to your

     offering, we are not adopting specific disclosure items for the

     summary.  However, because the financial statements are an

     important part of the disclosures made by public companies, we

     believe you should continue to highlight financial information in

     the summary.  You should present this financial information in a

     manner that allows investors to understand it easily.

               2.   Risk Factors

          If you include a risk factors section in your prospectus,

     you must write the risk factors in plain English and avoid

     "boilerplate" risk factors. We believe a discussion of risk in

     purely generic terms does not tell investors how the risk may

     affect their investment in a specific company.  You should place

     any risk factor in context so investors can understand the

     specific risk as it applies to your company and its operations.

               3.   Ratio of Earnings to Fixed Charges

          When you offer debt or preferred equity, you must disclose a

     ratio of earnings to fixed charges.  Where you include a

     prospectus summary, amended Item 503 requires you to show the

     ratio of earnings to fixed charges as part of the summarized

     financial data.



     V.   Plain English for Investment Companies

          The plain English rule applies to prospectuses of investment


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     companies and will complement our disclosure initiatives for

     these companies.33  Also, the amendments we are adopting to Rule

     481 require these companies to write and design the front parts

     of their prospectuses in plain English.

          As part of our commitment to improve mutual fund disclosure,

     in February 1997, we proposed significant changes to the

     disclosure requirements for mutual fund prospectuses and new

     summary disclosure documents called "profiles."34  These proposals

     would require a standardized risk/return summary in mutual fund

     prospectuses and profiles. The risk/return summary would include

     a concise narrative discussion of fund risks and a bar chart

     showing a fund's annual returns for the past ten years.  We

     expect to consider these and other changes to mutual fund

     prospectuses shortly.  The plain English rule will apply to the

     cover page and the risk/return summary in prospectuses and the

     new fund profiles.35

          Investment companies must comply with the plain English rule

     and the revised disclosure requirements for new registration

     statements filed on or after October 1, 1998.  When we act on the

     changes to the mutual fund disclosure requirements, we may change

     the compliance date for mutual funds so they may comply with

     these new requirements with one filing.36



     VI.  Phase-In of the Plain English Rule and Other Requirements
     for
          Issuers Other Than Investment Companies

          To ease the transition to plain English and to avoid


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     delaying your access to the capital markets, we will phase in the

     plain English rule and the other changes as follows:

                   *     If you first file a registration statement on

               or after October 1, 1998, you must comply with the new

               requirements.37  If you file a registration statement

               before October 1, 1998, but it is not yet effective on

               that date, you do not have to amend it to comply with

               the new requirements before it is effective.

           *    On or after October 1, 1998, any supplement you file to a

               prospectus in an effective registration statement that relies on

               Rule 415(a)(1)(x) must comply with the new requirements.

                   *     If you file a post-effective amendment on or

               after October 1, 1998, either to include the company's

               latest audited financial statements in the registration

               statement or to update the prospectus under Section

               10(a)(3),38 you must comply with the new requirements.

          If you elect to comply immediately with any of the plain

     English requirements, we believe you should comply with all of

     them to make the document more readable.  For example, you should

     not have a plain English cover page and a legalistic summary or

     risk factors section.

          During the phase-in period, we will hold workshops to help

     issuers, underwriters, and their counsel comply with the plain

     English rule.  Until October 1, 1998, the staff will continue the

     plain English pilot program, but because of limited resources and

     because we expect high demand by issuers to participate in the


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     pilot, the staff will no longer offer expedited review.  We

     encourage issuers to participate in the pilot program with both

     Securities Act and Exchange Act documents.

     VII. Comments on the Plain English Proposals

          We received 45 comment letters on the plain English

     proposals.39  Generally, the comment letters favored requiring

     plain English for the front of prospectuses_the cover page,

     summary, and risk factors section.  The American Society of

     Corporate Secretaries and the American Corporate Counsel

     Association, as well as several public companies, supported the

     plain English requirements.  They believe that requiring plain

     English will focus all parties involved in the offering

     process_issuers, underwriters, trustees, and counsel_on clear and

     readable disclosure.  Investor groups, such as the American

     Association of Retired Persons and the Consumer Federation of

     America, supported adopting the plain English rule to ensure that

     investors receive clear information.

          Other comment letters raised the following general concerns

     about the plain English rule:

          *    Will the plain English rule increase a registrant's

            liability?

          *    How will the staff review and comment on plain English

            filings?

          *    Will the Commission deny acceleration of a filing if it does

            not comply with the plain English rule?

     We address these concerns in the following three sections.


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          A.   Liability Concerns

          Several comment letters, including those of the American Bar

     Association and the Securities Industry Association, recommended

     a voluntary rather than a mandatory approach to improving the

     readability of prospectuses.  These comment letters argued

     against mandating plain English primarily because of liability

     concerns.

          These comment letters expressed concern that issuers may

     omit material information in the course of simplifying the

     language.  The comment letters urged us to adopt a safe harbor

     rule from legal liability to cover the sections of the prospectus

     that must be in plain English.

          Other letters from groups representing public companies and

     the mutual fund industry stated they believe plain English will

     not increase their liability.  They stated that plain English

     disclosure should reduce potential liability because it decreases

     the likelihood that an investor will misunderstand the

     prospectus.40

          Using plain English does not mean omitting important

     information.  These rules only require you to disclose

     information in words investors can understand and in a format

     that invites them to read the document.  For these reasons, we do

     not believe that a safe harbor rule is necessary or appropriate.

     We also believe it is inappropriate for you to include language

     that attempts to create a safe harbor for these sections.

          The letters raising liability concerns also questioned


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     whether it is possible to summarize in plain English complex

     matters covered in the body of the document.  We believe the

     courts will continue to view the summary section, as its caption

     indicates, as a highlight of important information in the

     prospectus.  A summary, by its very nature, cannot disclose

     everything.  In determining whether a company has made full

     disclosure, courts should look at the disclosure in the entire

     document.

          Moreover, a company's failure to include everything in the

     summary should not trigger automatically the application of the

     "buried facts" doctrine.  Under the buried facts doctrine, a

     court would consider disclosure to be false and misleading only

     if its overall significance is obscured because material

     information is "buried," for example, in footnotes or appendices.41

          The package of rules we are adopting should lead to clearer

     documents that are easier for investors to understand.  We

     believe that compliance with these requirements will not increase

     the risk of litigation.

          

          B.   Staff Plain English Review and Comment Process

          Several comment letters questioned whether the staff's time

     would be well spent giving comments on grammar. The letters also

     stated that the staff's past comments have caused many immaterial

     disclosures and much of the repetition in current prospectuses.

          Our staff will focus on whether you disclose material

     information and whether that disclosure is clear and readable.


                              ======END OF PAGE 22======





     The staff will not correct grammatical mistakes.

          We recognize that a document can still be clear despite the

     occasional long sentence or use of passive voice.  But we have

     learned from the plain English pilot program that a document

     becomes clearer and easier to read when its writer uses plain

     English.

          The staff will issue their comments in plain English and

     avoid requesting repetitive information in the document.  If the

     staff selects your registration statement for a legal and

     accounting review, the same people who review your document will

     issue any plain English comments.

          Because the format and design of your document play a large

     part in its readability, we will request paper copies of the

     plain English sections that you plan to deliver to investors.  We

     are working to upgrade our Electronic Data Gathering Analysis and

     Retrieval system, EDGAR, to permit the filing of an exact

     duplicate of the paper copy sent to investors but this may not

     occur for some time.

          C. Requests for Acceleration

          Rule 461 currently requires the Commission staff, when

     presented with a request for acceleration, to consider the

     accuracy and adequacy of the prospectus that you circulated.42

     The rule also requires the staff to consider whether you have

     made a bona fide effort to make the prospectus reasonably concise

     and understandable.  We are amending Rule 461 to require the

     staff to consider also whether you have made a bona fide effort


                              ======END OF PAGE 23======





     to satisfy the plain English rule in drafting the front part of

     the prospectus.  Because compliance with the plain English rule

     will facilitate investors' understanding of the prospectus

     information, we believe it is important that the preliminary

     prospectus that you circulate to investors complies with the

     plain English rule.

          Comment letters expressed concern that the amendment to Rule

     461 could frequently delay the effective date of registration

     statements.  We believe that these concerns are unfounded.  The

     procedures for addressing deficiencies and for granting or

     denying acceleration requests have worked very well for many

     years.  We believe the continued use of these procedures will

     work in implementing the plain English rule.  If we select your

     registration statement for review, the staff will give you

     comments on how to comply with the plain English rule as well as

     other requirements.  You will have the same opportunity you have

     now to work with the staff to resolve all comments on your

     document, consistent with your financing schedule.



     VIII.     Cost-Benefit Analysis

          The plain English rule and amendments should improve

     communications between public companies and investors and promote

     investor protection.  Specifically, we anticipate, and many

     public comment letters concur, that adopting the plain English

     rule will:

     *    allow investors to make better-informed assessments of the


                              ======END OF PAGE 24======





       risk and rewards of investment opportunities;

     *    reduce the likelihood that investors make investment

       mistakes because of incomprehensible disclosure documents;

     *    reduce investors' costs of investing by lowering the time
     required to read and understand information;
     *    increase consumers' interest in investing by giving them
     greater confidence in their understanding of investments;
     *    reduce the number of costly legal disputes because investors
     are more likely to better understand disclosure documents; and
     *    lower offering costs because investors will ask issuers
     fewer questions about the offering.
          Several comment letters suggested that writing documents in

     plain English would impose substantial costs on public companies.43

     While there may be some additional costs initially, we expect

     them to be modest and to diminish over time as firms learn to

     prepare documents using plain English principles.  After a short

     phase-in period, public companies should incur little, if any,

     additional cost from this rule or these amendments.  In some

     instances, we anticipate that companies will save on printing and

     mailing costs because plain English tends to reduce document

     length.  Some firms may also save time answering investors'

     questions.  We believe the substantial benefits to investors and

     the public markets more than justify the phase-in costs.

          We base these conclusions, in part, on companies'

     experiences in the plain English pilot program.  To help assess

     the benefits and costs, we asked nine randomly selected plain

     English pilot participants, one of which prepared an initial

     public offering prospectus, about their experiences preparing

     plain English documents.  Six of the nine participants responded,

     including the initial public offering issuer.  All of the


                              ======END OF PAGE 25======





     participants agreed that investors benefit from clearer, more

     readable, less redundant disclosure.  Specifically, several

     predicted that investor misunderstandings and mistakes would

     decline.  They did not generally believe, however, that writing

     their disclosures in plain English would reduce their liability

     for disclosures.  The consensus was that investors file lawsuits

     on the basis of disclosure materiality, not brevity or wording.

     Several participants found, however, that they spent less time

     answering investors' questions when they wrote their documents in

     plain English.44

          In terms of the costs of writing documents in plain English,

     all of the responding participants spent more time writing their

     documents in plain English than they otherwise would have if they

     used conventional language.45  Pilot participants found that legal

     and technical writing costs rose for plain English filings by

     approximately 15 percent.46 Because legal and technical writing

     comprises approximately 48 percent of the total burden hours

     necessary to complete a registration statement (with accounting

     comprising the other 52 percent),47 we estimate that total burden

     hours will rise by approximately seven percent in the first year.

          The table below shows the current and estimated burden hours

     per filing, the estimated change in burden hours per filing, and

     the number of forms filed in 1997 by form type.48 The information

     in the table indicates that we estimate public companies will

     require on average 60 additional hours per filing to comply with

     the plain English requirements in the first year.  At $120 per


                              ======END OF PAGE 26======





     hour,49 this translates to an added cost in the first year of

     approximately $7,200 per filing.50  Based on pilot program

     participants' experiences,51 we expect the number of hours and

          cost to fall in the following year to the current level as firms

     gain experience with the plain English principles.  We anticipate

     the cost to repeat filers to fall even sooner.

             Estimat                              Change in
                ed    Estimat                     Estimated
              Burden     ed                        Burden
              Hours/   Burden   Change            Hours by
              Filing   Hours/     in               Filing
              Before   Filing   Estimat             Type
              Plain    After      ed                After
     Form    English   Plain    Burden   Filings    Plain
               Rule   English   Hours/      /      English
                        Rule    Filing    Year52    Rule
     S-1      1,267    1,358       91     1,067    97,097
     S-2        470      504       34       145     4,930
     S-3        398      427       29     3,137    90,973
     S-4      1,233    1,322       89     2,044    181,91
                                                        6
     F-1/S-   1,868    2,002      134       162    21,708
     20
     F-2        559      599       40         3       120
     F-3        166      178       12       220     2,640
     F-4      1,308    1,402       94       243    22,842
     S-11       147      158       11        68       748
     SB-1       710      761       51         8       408
     SB-2       876      939       63       434    27,342
     Total                                7,531    450,72
                                                        4
          

          We believe the estimate of seven-percent higher cost in the

     first year is somewhat overstated because it is based on the

     experiences of pilot participants who did not have models to

     follow.  The time required for future registrants to comply with

     the requirements should be lower.  To help reduce compliance

     time, the staff is including a list of filings by pilot

     participants and the information issuers need to locate those

                              ======END OF PAGE 27======





     filings.  The staff is also issuing a handbook on how to prepare

     plain English documents and will hold workshops to help public

     companies, their counsel, and underwriters comply with the rules.

     We also anticipate that public companies' legal counsel, who will

     gain experience from all their clients' transactions, will help

     to speed the transition to plain English.  Finally, some firms

     filed multiple registration statements in 1997 and we applied the

     same burden hour increase to all filings.  We believe that

     required compliance time for firms' later filings should be lower

     than earlier filings as companies gain experience writing in

     plain English.

          These results are consistent with those found by the

     American Society of Corporate Secretaries, which surveyed the 57

     member companies represented on its Securities Law Committee.

     The twelve members who had prepared at least one plain English

     document predicted no "material change in annual burden reporting

     or hours."53 Similarly, Baltimore Gas and Electric Company

          incurred no additional cost once the company learned the process.54

          One benefit generally found by pilot program participants

     was that document length was shortened on average by 11 percent.55

     Given that the average length of an S-1 prospectus is

     approximately 116 pages, this decline would result in a 13-page

     reduction.  For an S-3 prospectus, whose average length is 52

     pages, the decline would save 6 pages.  And the length of an S-4

     prospectus, which averages 219 pages, would fall by 24 pages.56

     Where plain English shortened documents, several responding


                              ======END OF PAGE 28======





     participants estimated lower printing and distribution costs.

     Even if costs dropped by only five percent, firms would save

     approximately $3,160 per filing.  In aggregate, firms would save

     approximately $24 million per year_savings that could continue

     for as long as firms comply with the plain English requirements.57

          In summary, while all of the participants that answered our

     questions incurred some additional document preparation costs,

          the majority estimated them to be low and predicted that they

     would fall over time.  The participants anticipated little added,

     and perhaps even lower, overall cost.  Some even predicted they

     might save money on printing and distribution costs and time

     answering investors' questions.  Based on the experiences of

     pilot program participants, we believe that the substantial

     benefits to investors of plain English and the on-going cost

     savings to issuers justify the short-term cost to public

     companies of learning to prepare documents in plain English.

                                                                      

     IX.  Final Regulatory Flexibility Analysis

          The staff has prepared this Final Regulatory Flexibility

     Analysis in accordance with Section 603 of the Regulatory

     Flexibility Act (5 U.S.C. 603).  This analysis relates to

     revisions of Rules 421, 461, and 481 of Regulation C and Items

     101, 501, 502, 503, and 508 of Regulations S-K and S-B to

     implement the Commission's plain English initiative.  The

     Commission is also adopting minor amendments to Forms S-2, S-3, S-

     4, S-20, F-2, F-3, and F-4 under the Securities Act and Form N-2


                              ======END OF PAGE 29======





     under the Investment Company Act.

     Need for and Objectives of Plain English Rules

          In August 1995, Chairman Arthur Levitt organized the Task

     Force on Disclosure Simplification to find ways to simplify the

     disclosure process and increase the effectiveness and efficiency

     of capital formation where consistent with investor protection.

     In its final report to the Commission, the Task Force suggested

     that the Commission require public companies to write certain

     parts of prospectuses in plain English.58 The Commission responded

     in January 1997 by proposing a rule and several amendments that

     required public companies to write the front of prospectuses

     using plain English principles.59 The amendments revised current

     rules and forms to eliminate certain language requirements in the

     front of prospectuses and relocate highly technical language

     within the prospectus.  The Commission proposed these rules to

     enhance the clarity and conciseness of prospectuses.

          The Commission received 45 comment letters from 43 entities

     in response to the proposing release.60  The commentators

     generally expressed strong support for the plain English

     proposals, although several expressed concerns with specific

     provisions and some suggested alternative approaches for

     addressing particular issues.  The Commission is adopting the

     plain English proposals with minor modifications that clarify

     provisions and reflect the suggestions of some comment letters

     and the plain English pilot program participants.  These rules

     will make prospectuses simpler, clearer, more useful, and, we


                              ======END OF PAGE 30======





     hope, more widely read.

          The amendments will be adopted pursuant to Sections 6, 7, 8,

     10, and 19(a) of the Securities Act, Sections 12, 13, 15(d),

     16(a), and 23(a) of the Exchange Act, and Sections 8, 24, 30, 31,

          and 38 of the Investment Company Act of 1940.

     Small Entities Subject to the Rules

          For the purposes of the Regulatory Flexibility Act, the term

     "small business," as used in reference to a public company other

     than an investment company, is defined by Rule 157 under the

     Securities Act as an issuer whose total assets on the last day of

     its most recent fiscal year were $5 million or less and is

     engaged or proposing to engage in small business financing.61  An

     issuer is considered to be engaged in small business financing if

     it is conducting or proposes to conduct an offering of securities

     that does not exceed $5 million.  The Securities Exchange Act

     defines a "small business" issuer, other than an investment

     company, to be an issuer that, on the last day of its most recent

     fiscal year, had total assets of $5 million or less.  When used

     with respect to an issuer that is an investment company, the term

     is defined as an investment company with net assets of $50

     million or less as of the end of its most recent fiscal year. 62

          The Commission estimates that approximately 1,100 of

     approximately 12,700 Exchange Act reporting companies and 800

     investment companies of approximately 3,700 active registered

     investment companies currently satisfy the definition of "small

     business," all of which will be subject to the plain English


                              ======END OF PAGE 31======





     requirements.  We have no reliable way, however, to determine how

     many businesses may become subject to Commission reporting

     obligations in the future, or may otherwise be impacted by the

     plain English requirements.

     Significant Issues Raised by Public Comment

          The Commission received no requests for the Initial

     Regulatory Flexibility Analysis and received no comments

     specifically in response to its request for information about the

     impact of the rule and amendments on small businesses.  Nine

     comment letters, however, discussed the costs and benefits to

     public companies in general.  Six believed that costs would

     generally be low and temporary as firms learn to write in plain

     English.  Three believed that the costs would be more

     significant.  These costs are discussed in greater detail in the

     next subsection.  The Commission's efforts to minimize the

     compliance costs to all reporting companies, both large and

     small, are discussed in the final subsection of this Final

     Regulatory Flexibility Analysis.

     Projected Reporting, Recordkeeping, and Other Compliance

     Requirements

          The plain English rules and amendments do not affect the

     substance of the disclosures that public companies must make.

     They do not impose any new recordkeeping requirements or require

     reporting of additional information.  We anticipate, however,

     that there will be a temporary increase in cost that will

     diminish over time as firms learn to prepare documents using


                              ======END OF PAGE 32======





     plain English principles.  Thus, after a short phase-in period,

     public companies should incur little, if any, additional cost

     from this rule or these amendments.  In some instances, we

     anticipate that companies

     will save on printing and mailing costs because plain English

     tends to reduce document length.  Some firms may also save time

     answering investors' questions.

          We base these conclusions, in part, on companies'

     experiences in the plain English pilot program.  We solicited

     information about firms' experiences by questioning a group of

     pilot participants.  Based on their responses, discussed in

     detail in Section VIII, we anticipate a temporary increase in

     cost that will diminish over time as firms learn to prepare

     documents using plain English principles.  While none of the

     pilot participants specifically qualified as a "small business,"

     the company that wrote its initial public offering prospectus in

     plain English had a favorable experience.

          In addition, we requested information about the impact of

     the plain English requirements on small businesses in the

     proposing release.  While no one commented specifically on the

     burden to small firms, several letters indicated that the

     additional cost of writing in plain English would be low and

     would diminish after the initial effort of learning to write in

     plain English.  Some commentators even predicted savings.  This

     evidence contrasts, however, with three letters expressing

     concern that writing in plain English would increase document


                              ======END OF PAGE 33======





     preparation costs and lengthen documents.  While we considered

     these concerns, experience from the pilot program suggests that

     phase-in costs will be low and that documents will be shorter and

     easier to read and understand.

     Agency Action to Minimize Effect on Small Businesses

          The Regulatory Flexibility Act directs the Commission to

     consider significant alternatives that would accomplish the

     stated objectives, while minimizing any significant adverse

     impact on small issuers.  In connection with the plain English

     rules and amendments, we considered several alternatives,

     including (a) establishing different compliance and reporting

     requirements for small businesses; and (b) using performance

     rather than design standards, and (c) exempting small businesses

     from all or part of the requirements.  We do not believe,

     however, that these alternatives are appropriate.  First, these

     alternatives would be inconsistent with our statutory mandate to

     require prospectuses to disclose fully and fairly all material

     information to investors.  Second, these alternatives would

     significantly dilute or negate the important benefits of plain

     English disclosure to investors.  For these reasons, we also

     believe there would be no benefit in providing separate

     requirements for small issuers based on the use of performance

     rather than design standards.

          We have tried before, through interpretive advice and other

     means, to address the problems with current prospectus

     disclosure, which too often includes arcane, needlessly complex,


                              ======END OF PAGE 34======





     and incomprehensible language.  These earlier measures have not

     resulted in widespread improvement in prospectus readability.

     Therefore, we believe the plain English requirements are

     necessary to improve communication between public companies and

     investors, particularly given the relatively low compliance

     burden.  In addition, we believe the rules and amendments should

     apply equally to all entities required to disclose information

     under the Securities Act to enhance protection of all investors.

          The plain English principles are generally broad statements

     that provide registrants flexibility in how to disclose

     information.  Thus, there are a variety of ways in which

     registrants, including small businesses, can use the principles

     and guidance in making their disclosures.  Modifications of the

     plain English proposals by the Commission will reduce the short-

     term cost to small issuers.  Based on suggestions in several

     comment letters, the Commission is not adopting limitations on

     the length of summaries, limitations on the number of risk

     factors or the requirement that companies prioritize risk

     factors.  To provide compliance assistance to both small and

     large issuers, the release includes a list of filings by pilot

     participants and the information issuers need to locate those

     filings.  The staff is also issuing a handbook on how to prepare

     plain English documents and will hold workshops to help small and

     large issuers, their counsels, underwriters, and others comply

     with the rules.  Finally, the Commission is minimizing the impact

     by delaying the effective date of the rules until October 1,


                              ======END OF PAGE 35======





     1998.



     X.   Paperwork Reduction Act

          The plain English rule and amendments affect several

     regulations and forms that contain "collection of information

     requirements" within the meaning of the Paperwork Reduction Act

     of 1995.63 In the proposing release, the Commission stated its

          belief that the plain English rule and amendments would not

     result in a substantive or material change to the affected

     collections of information.  Nevertheless, the Commission

     solicited comment on whether the rule and amendments would

     materially affect the burden on public companies and mutual funds

     that prepare prospectuses.  Because several comment letters

     indicated that the burden would increase, at least in the short

     term, the Commission has determined to submit the rule and

     amendments to the Office of Management and Budget for review in

     accordance with 44 U.S.C. 3507(d).  The Commission is amending

     Rules 421, 461, and 481 of Regulation C and Items 101, 501, 502,

     503, and 508 of Regulations S-K and S-B.  The Commission is also

     adopting minor amendments to Forms S-2, S-3, S-4, S-20, F-2, F-3,

     and F-4 under the Securities Act and Form N-2 under the

     Investment Company Act as a part of the plain English initiative.64

          The rule and amendments require public companies to write

     information included in the front of prospectuses_the cover page,

     summary, and risk factors section_in everyday language that

     investors can understand.  The changes also codify existing


                              ======END OF PAGE 36======





     Commission interpretive advice and eliminate requirements no

     longer deemed useful.  The requirements do not affect the

     substance of the disclosures that registrants must make.  They do

     not impose any new recordkeeping requirements or require

     reporting of additional information.

          As discussed in detail in Section VII, we anticipate that

     there will be a temporary increase in burden that will diminish

     over time as firms learn to prepare documents using plain English

     principles.  As indicated in the Cost/Benefit Analysis table, we

     estimate that public companies will require on average 60

     additional burden hours per filing or 450,724 hours in total to

     comply with the plain English requirements in the first year.  We

     then expect burden hours to fall to their current level.  Thus,

     after a short phase-in period, public companies should incur

     little, if any, additional cost from this rule or these

     amendments.  In some instances, we anticipate that companies will

     save on printing and mailing costs because plain English tends to

     reduce document length.  Some firms may also save time answering

     investors' questions.  The added burden will be reflected in the

     estimated burden hours for Regulation C.65

          The information collection requirements imposed by the forms

     and regulations are mandatory to the extent that a company elects

     to do a registered offering.  The information is made publicly

     available.  An agency may not conduct or sponsor, and a person is

     not required to respond to, a collection of information unless it

     displays a currently valid OMB control number.


                              ======END OF PAGE 37======





          In accordance with 44 U.S.C. 3506(c)(2)(B), the Commission

     solicits comment on the following:

     *    whether the changes in the collection of information are

       necessary for the proper performance of the function of the

       agency;

     *    the accuracy of the Commission's estimate of the burden of

       the changes to the collection of information;

     *    the quality, utility, and clarity of the information to be

       collected; and

     *    whether there are ways to minimize the burden of the

       collection of information on those who are to respond, including

       through the use of automated collection techniques or other forms

       of information technology.

          Anyone desiring to submit comments on the collection of

     information requirements should direct them to the Office of

     Management and Budget, Attention: Desk Officer for the Securities

     and Exchange Commission, Office of Information and Regulatory

     Affairs, Washington, D.C. 20503, and should also send a copy of

     their comments to Jonathan G. Katz, Secretary, Securities and

     Exchange Commission, 450 Fifth Street, N.W., Washington, D.C.

     20549, with reference to File No. S7-3-97.  The Office of

     Management and Budget is required to make a decision concerning

     the collection of information between 30 and 60 days after

     publication, so a comment to OMB is best assured of having its

     full effect if OMB receives it within 30 days of publication.




                              ======END OF PAGE 38======





     XI.  Statutory Authority

          The rule amendments are proposed under Sections 6, 7, 8, 10

     and 19(a) of the Securities Act, Sections 12, 13, 15(d), 16(a)

     and 23(a) of the Exchange Act, and Sections 8, 24, 30, 31 and 38

     of the Investment Company Act of 1940.

     List of Subjects in 17 CFR Parts 228, 229, 230, 239, and 274

          Reporting and recordkeeping requirements, Securities, and

     Investment companies.



     Text of the Amendments

          For the reasons discussed in the preamble, the Securities

     and Exchange Commission amends Title 17, Chapter 11 of the Code

     of Federal Regulations as follows:



     PART 228 -     INTEGRATED DISCLOSURE SYSTEM FOR SMALL BUSINESS
               ISSUERS
               
          1.   The authority citation for Part 228 continues to read

     as follows:

          Authority:  15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-

     2, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77jjj, 77nnn,

     77sss, 78l, 78m, 78n, 78o, 78u-5, 78w, 78ll, 80a-8, 80a-29, 80a-

     30, 80a-37, 80b-11, unless otherwise noted.



          2.   By amending 228.101 to add paragraphs (c) and (d) to

     read as follows:

     228.101  (Item 101)  Description of Business.

                                * * * * *

                              ======END OF PAGE 39======





          (c)  Reports to security holders.  Disclose the following in

     any registration statement you file under the Securities Act of

     1933:

          (1)  If you are not required to deliver an annual report to

     security holders, whether you will voluntarily send an annual

     report and whether the report will include audited financial

     statements;

          (2)  Whether you file reports with the Securities and

     Exchange Commission.  If you are a reporting company, identify

     the reports and other information you file with the SEC; and

          (3)  That the public may read and copy any materials you

     file with the SEC at the SEC's Public Reference Room at 450 Fifth

     Street, N.W., Washington, D.C. 20549.  State that the public may

     obtain information on the operation of the Public Reference Room

     by calling the SEC at 1-800-SEC-0330.  If you are an electronic

     filer, state that the SEC maintains an Internet site that

     contains reports, proxy and information statements, and other

     information regarding issuers that file electronically with the

     SEC and state the address of that site (http://www.sec.gov).  You

     are encouraged to give your Internet address, if available;

          (d)  Canadian Issuers.  Provide the information required by

     Items 101(f)(2) and 101(g) of Regulation S-K (229.101(f)(2) and

     (g)).



          3.   Section 228.501 is revised to read as follows:

     228.501 (Item 501) Front of Registration Statement and Front
                         Cover of Prospectus.

                              ======END OF PAGE 40======





          The small business issuer must furnish the following

     information in plain English.  See 230.421(d) of Regulation C of

     this chapter.

          (a)  Limit the outside front cover page of the prospectus to

     one page and include the following information:

          (1)  The registrant's name.  A foreign registrant also must

     give the English translation of its name;

          (2)  The title, amount, and description of securities

     offered.  If the underwriter has any arrangement with the issuer,

     such as an over-allotment option, under which the underwriter may

     purchase additional shares in connection with the offering,

     indicate that this arrangement exists and state the amount of

     additional shares that the underwriter may purchase under the

     arrangement;

          (3)  If there are selling security holders, a statement to

     that effect;

          (4)  Whether any national securities exchange or the Nasdaq

     Stock Market lists the securities offered, naming the particular

     market(s), and identifying the trading symbol(s) for those

     securities;

          (5)  A cross-reference to the risk factors section,

     including the page number where it appears in the prospectus.

     Highlight this

     cross-reference by prominent type or in another manner;

          (6)  Any legend or statement required by the law of any

     state in which the securities are offered;


                              ======END OF PAGE 41======





          (7)  A legend that indicates that neither the Securities and

     Exchange Commission nor any state securities commission has

     approved or disapproved of the securities or passed on the

     adequacy or accuracy of the disclosures in the prospectus.  Also

     make clear that any representation to the contrary is a criminal

     offense.  You may use one of the following or other clear, plain

     language:

                    Example A:     Neither the
                    Securities and Exchange Commission
                    nor any state securities commission
                    has approved or disapproved of
                    these securities or passed upon the
                    adequacy or accuracy of the
                    prospectus.  Any representation to
                    the contrary is a criminal offense.

                    Example B:     Neither the
                    Securities and Exchange Commission
                    nor any state securities commission
                    has approved or disapproved of
                    these securities or determined if
                    this prospectus is truthful or
                    complete. Any representation to the
                    contrary is a criminal offense.
                    
          (8)  If you are not a reporting company and the preliminary

     prospectus will be circulated, as applicable:

          (i) A bona fide estimate of the range of the maximum

     offering price and maximum number of shares or units offered; or

          (ii) A bona fide estimate of the principal amount of debt

     securities offered;

          (9)(i)  Name(s) of the lead or managing underwriter(s) and

     an identification of the nature of the underwriting arrangements;

          (ii)  If the offering is not made on a firm commitment

     basis, a brief description of the underwriting arrangements;


                              ======END OF PAGE 42======





          (iii)  If you offer the securities on a best efforts or best

     efforts minimum/maximum basis, the date the offering will end,

     any minimum purchase requirements, and whether or not there are

     any arrangements to place the funds in an escrow, trust, or

     similar account; and

          (iv)  If you offer the securities for cash, the price to the

     public for the securities, the underwriting discounts and

     commissions, and proceeds to the registrant or other persons.

     Show the information on both a per share or unit basis and for

     the total amount of the offering.  If you make the offering on a

     minimum/maximum basis, show this information based on the total

     minimum and total maximum amount of the offering.  You may

     present the information in a table, term sheet format, or other

     clear presentation.  You may present the information in any

     format that fits the design of the cover page so long as the

     information can be easily read and is not misleading;

          (10) If the prospectus will be used before the effective

     date of the registration statement, a prominent statement that:

          (i)  The information in the prospectus will be amended or

     completed;

          (ii) A registration statement relating to these securities

     has been filed with the Securities and Exchange Commission;

          (iii)     The securities may not be sold until the

     registration statement becomes effective; and

          (iv) The prospectus is not an offer to sell the securities

     and it is not soliciting an offer to buy the securities in any


                              ======END OF PAGE 43======





     state where offers or sales are not permitted.  You may use the

     following or other clear, plain language:

                    The information in this prospectus is
               not complete and may be changed.  We may not
               sell these securities until the registration
               statement filed with the Securities and
               Exchange Commission is effective.  This
               prospectus is not an offer to sell these
               securities and it is not soliciting an offer
               to buy these securities in any state where
               the offer or sale is not permitted.
               
          (11) If you use 230.430A of this chapter to omit pricing

     information and the prospectus is used before you determine the

     public offering price, the information in paragraph (a)(10) of

     this section; and

          (12) The date of the prospectus.

          (b)  [Reserved]



          4.   Section 228.502 is revised to read as follows:

      228.502 (Item 502) Inside Front and Outside Back Cover Pages of
                         Prospectus.

          The small business issuer must furnish the following

     information in plain English. See 230.421(d) of Regulation C of

     this chapter.

          (a)  Table of Contents.  On either the inside front or

     outside back cover page of the prospectus, provide a reasonably

     detailed table of contents.  It must show the page number of the

     various sections or subdivisions of the prospectus.  Include a

     specific listing of the risk factors section required by Item 503

     of this Regulation S-B (17 CFR 228.503).  You must include the

     table of contents immediately following the cover page in any

                              ======END OF PAGE 44======





     prospectus you deliver electronically;

          (b)  Dealer Prospectus Delivery Obligation.  If applicable

     to your offering, on the outside back cover page of the

     prospectus, advise dealers of their prospectus delivery

     obligation, including the expiration date specified by Section

     4(3) of the Securities Act (15 U.S.C. 77d(3)) and 230.174 of

     this chapter. You may use the following or other clear, plain

     language:

               Dealer Prospectus Delivery Obligation
               Until (insert date), all dealers that effect
               transactions in these securities, whether or
               not participating in this offering, may be
               required to deliver a prospectus.  This is in
               addition to the dealers' obligation to
               deliver a prospectus when acting as
               underwriters and with respect to their unsold
               allotments or subscriptions.


          5.   By revising 228.503 to read as follows:

      228.503 (Item 503) Summary Information and Risk Factors.

          The small business issuer must furnish the following

     information in plain English. See 230.421(d) of Regulation C of

     this chapter.

          (a)  Summary.  Provide a summary of the information in the

     prospectus where the length or complexity of the prospectus makes

     a summary useful.  The summary should be brief.  The summary

     should not contain, and is not required to contain, all of the

     detailed information in the prospectus.  If you provide summary

     business or financial information, even if you do not caption it

     as a summary, you still must provide that information in plain

     English.

                              ======END OF PAGE 45======





                      Instruction to paragraph 503(a)

     The summary should not merely repeat the text of the prospectus

     but should provide a brief overview of the key aspects of the

     offering.  Carefully consider and identify those aspects of the

     offering that are the most significant and determine how best to

     highlight those points in clear, plain language.

          (b)  Address and phone number.  Include, either on the cover

     page or in the summary section of the prospectus, the complete

     mailing address and telephone number of your principal executive

     offices.

          (c)  Risk factors.  (1)  Discuss in a section captioned

     "Risk Factors" any factors that make the offering speculative or

     risky.  The factors may include, among other things, the

     following:

          (i)  Your lack of an operating history;

          (ii) Your lack of recent profits from operations;

          (iii)     Your poor financial position;

          (iv) Your business or proposed business; or

               (v)  The lack of a market for your common equity

               securities.

          (2)  The risk factor discussion must immediately follow the

     summary section.  If you do not include a summary section, the

     risk factor discussion must immediately follow the cover page or

     the pricing information that immediately follows the cover page.

     Pricing information means price and price-related information

     that you may omit from the prospectus in an effective


                              ======END OF PAGE 46======





     registration statement based on 230.430A(a) of this chapter.



          6.   Section 228.508 is amended to revise the heading of

     paragraph (a), add two sentences to the end of paragraph (a) and

     revise paragraph (j) to read as follows:

      228.508 (Item 508) Plan of Distribution.

          (a)  Underwriters and underwriting obligations.  * * *  The

     small business issuer must disclose the offering expenses

     specified in Item 511 of this Regulation S-B (17 CFR 228.511).

     If there is an arrangement under which the underwriter may

     purchase additional shares in connection with the offering, such

     as an over-allotment option, describe that arrangement and

     disclose information on the total offering price, underwriting

     discounts and commissions, and total proceeds assuming the

     underwriter purchases all of the shares subject to that

     arrangement.

                                * * * * *

          (j)  Stabilization and other transactions.  (1) Briefly

     describe any transaction that the underwriter intends to conduct

     during the offering that stabilizes, maintains, or otherwise

     affects the market price of the offered securities.  Include

     information on stabilizing transactions, syndicate short covering

     transactions, penalty bids, or any other transaction that affects

     the offered security's price.  Describe the nature of the

     transactions clearly and explain how the transactions affect the

     offered security's price.  Identify the exchange or other market


                              ======END OF PAGE 47======





     on which these transactions may occur.  If true, disclose that

     the underwriter may discontinue these transactions at any time;

          (2)  If the stabilizing began before the effective date of

     the registration statement, disclose the amount of securities

     bought, the prices at which they were bought, and the period

     within which they were bought.  If you use 230.430A of this

     chapter, the final prospectus must contain information on the

     stabilizing transactions that took place before the public

     offering price was set; and

          (3)  If you are making a warrant or rights offering of

     securities to existing security holders and the securities not

     purchased by existing security holders are to be reoffered to the

     public, disclose the following information in the reoffer

     prospectus:

          (i)  The amount of securities bought in stabilization

     activities during the offering period and the price or range of

     prices at which the securities were bought;

          (ii) The amount of the offered securities subscribed for

     during the offering period;

          (iii)     The amount of the offered securities purchased by

     the underwriter during the offering period;

          (iv) The amount of the offered securities sold by the

     underwriter during the offering period and the price or range of

     prices at which the securities were sold; and

          (v)  The amount of the offered securities that will be

     reoffered to the public and the offering price.


                              ======END OF PAGE 48======





     PART 229 -     STANDARD INSTRUCTIONS FOR FILING FORMS UNDER
               SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934
               AND ENERGY POLICY AND CONSERVATION ACT OF 1975 -
               REGULATION S-K
               
          7.   The authority citation for Part 229 continues to read

     as follows:

          Authority:  15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-

     2, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj,

     77nnn, 77sss, 78c, 78i, 78j, 78l, 78m, 78n, 78o, 78u-5, 78w,

     78ll(d), 79e, 79n, 79t, 80a-8, 80a-29, 80a-30, 80a-37, 80b-11,

     unless otherwise noted.

                                * * * * *

          8.   By amending 229.101 to add paragraphs (e), (f), and

     (g) before "Instructions to Item 101" to read as follows:





     229.101 (Item 101) Description of business.

                                * * * * *

          (e)  Available Information.  Disclose the following in any

     registration statement you file under the Securities Act of 1933:

          (1)  Whether you file reports with the Securities and

     Exchange Commission.  If you are a reporting company, identify

     the reports and other information you file with the SEC.

          (2)  That the public may read and copy any materials you

     file with the SEC at the SEC's Public Reference Room at 450 Fifth

     Street, N.W., Washington, D.C. 20549.  State that the public may

     obtain information on the operation of the Public Reference Room

     by calling the SEC at 1-800-SEC-0330.  If you are an electronic

                              ======END OF PAGE 49======





     filer, state that the SEC maintains an Internet site that

     contains reports, proxy and information statements, and other

     information regarding issuers that file electronically with the

     SEC and state the address of that site (http://www.sec.gov).  You

     are encouraged to give your Internet address, if available;

          (f)  Reports to Security Holders.  Disclose the following

     information in any registration statement you file under the

     Securities Act:

          (1)  If the SEC's proxy rules or regulations, or stock

     exchange requirements, do not require you to send an annual

     report to security holders or to holders of American depository

     receipts, describe briefly the nature and frequency of reports

     that you will give to security holders.  Specify whether the

     reports that you give will contain financial information that has

     been examined and reported on, with an opinion expressed "by" an

     independent public or certified public accountant.

          (2)  For a foreign private issuer, if the report will not

     contain financial information prepared in accordance with U.S.

     generally accepted accounting principles, you must state whether

     the report will include a reconciliation of this information with

     U.S. generally accepted accounting principles.

          (g)  Enforceability of Civil Liabilities Against Foreign

     Persons.  Disclose the following if you are a foreign private

     issuer filing a registration statement under the Securities Act:

          (1)  Whether or not investors may bring actions under the

     civil liability provisions of the U.S. federal securities laws


                              ======END OF PAGE 50======





     against the foreign private issuer, any of its officers and

     directors who are residents of a foreign country, any

     underwriters or experts named in the registration statement that

     are residents of a foreign country, and whether investors may

     enforce these civil liability provisions when the assets of the

     issuer or these other persons are located outside of the United

     States.  The disclosure must address the following matters:

          (i)  The investor's ability to effect service of process

     within the United States on the foreign private issuer or any

     person;

          (ii) The investor's ability to enforce judgments obtained in

     U.S. courts against foreign persons based upon the civil

     liability provisions of the U.S. federal securities laws;

          (iii)     The investor's ability to enforce, in an

     appropriate foreign court, judgments of U.S. courts based upon

     the civil liability provisions of the U.S. federal securities

     laws; and

          (iv) The investor's ability to bring an original action in

     an appropriate foreign court to enforce liabilities against the

     foreign private issuer or any person based upon the U.S. federal

     securities laws.

          (2)  If you provide this disclosure based on an opinion of

     counsel, name counsel in the prospectus and file as an exhibit to

     the registration statement a signed consent of counsel to the use

     of its name and opinion.

                                 * * * * *


                              ======END OF PAGE 51======





          9.   By revising 229.501 to read as follows:

     229.501 (Item 501) Forepart of Registration Statement and
                         Outside Front Cover Page of Prospectus.

          The registrant must furnish the following information in

     plain English.  See 230.421(d) of Regulation C of this chapter.

          (a)  Front Cover Page of the Registration Statement.  Where

     appropriate, include the delaying amendment legend from 230.473

     of Regulation C of this chapter.

          (b)  Outside Front Cover Page of the Prospectus.  Limit the

     outside cover page to one page.  If the following information

     applies to your offering, disclose it on the outside cover page

     of the prospectus.

          (1)  Name.  The registrant's name.  A foreign registrant

     must give the English translation of its name.

                      Instruction to paragraph 501(b)(1).

          If your name is the same as that of a company that is well

     known, include information to eliminate any possible confusion

     with the other company.  If your name indicates a line of

     business in which you are not engaged or you are engaged only to

     a limited extent, include information to eliminate any misleading

     inference as to your business.  In some circumstances, disclosure

     may not be sufficient and you may be required to change your

     name.  You will not be required to change your name if you are an

     established company, the character of your business has changed,

     and the investing public is generally aware of the change and the

     character of your current business.

          (2)  Title and amount of securities.  The title and amount

                              ======END OF PAGE 52======





     of securities offered.  Separately state the amount of securities

     offered by selling security holders, if any.  If the underwriter

     has any arrangement with the issuer, such as an over-allotment

     option, under which the underwriter may purchase additional

     shares in connection with the offering, indicate that this

     arrangement exists and state the amount of additional shares that

     the underwriter may purchase under the arrangement.  Give a brief

     description of the securities except where the information is

     clear from the title of the security.  For example, you are not

     required to describe common stock that has full voting, dividend

     and liquidation rights usually associated with common stock.

          (3)  Offering price of the securities.  Where you offer

     securities for cash, the price to the public of the securities,

     the underwriter's discounts and commissions, the net proceeds you

     receive, and any selling shareholder's net proceeds.  Show this

     information on both a per share or unit basis and for the total

     amount of the offering.  If you make the offering on a

     minimum/maximum basis, show this information based on the total

     minimum and total maximum amount of the offering.  You may

     present the information in a table, term sheet format, or other

     clear presentation.  You may present the information in any

     format that fits the design of the cover page so long as the

     information can be easily read and is not misleading;





                      Instructions to paragraph 501(b)(3)


                              ======END OF PAGE 53======





          1.   If a preliminary prospectus is circulated and you are

     not subject to the reporting requirements of Section 13(a) or 15

     (d) of the Exchange Act, provide, as applicable:

          (A)  A bona fide estimate of the range of the maximum

     offering price and the maximum number of securities offered; or

          (B)  A bona fide estimate of the principal amount of the

     debt securities offered.

          2.   If it is impracticable to state the price to the

     public, explain the method by which the price is to be

     determined.  If the securities are to be offered at the market

     price, or if the offering price is to be determined by a formula

     related to the market price, indicate the market and market price

     of the securities as of the latest practicable date.

          3.   If you file a registration statement on Form S-8, you

     are not required to comply with this paragraph (b)(3).



          (4)  Market for the Securities.  Whether any national

     securities exchange or the Nasdaq Stock Market lists the

     securities offered, naming the particular market(s), and

     identifying the trading symbol(s) for those securities;

          (5)  Risk Factors.  A cross-reference to the risk factors

     section, including the page number where it appears in the

     prospectus.  Highlight this cross-reference by prominent type or

     in another manner;

          (6)  State Legend.  Any legend or statement required by the

     law of any state in which the securities are to be offered.  You


                              ======END OF PAGE 54======





     may combine this with any legend required by the SEC, if

     appropriate;

          (7)  Commission Legend.  A legend that indicates that

     neither the Securities and Exchange Commission nor any state

     securities commission has approved or disapproved of the

     securities or passed upon the accuracy or  adequacy of the

     disclosures in the prospectus and that any contrary

     representation is a criminal offense.  You may use one of the

     following or other clear, plain language:

                    Example A:     Neither the
                    Securities and Exchange Commission
                    nor any state securities commission
                    has approved or disapproved of
                    these securities or passed upon the
                    adequacy or accuracy of this
                    prospectus.  Any representation to
                    the contrary is a criminal offense.


                    Example B:     Neither the
                    Securities and Exchange Commission
                    nor any state securities commission
                    has approved or disapproved of
                    these securities or determined if
                    this prospectus is truthful or
                    complete. Any representation to the
                    contrary is a criminal offense.
                    
          (8)  Underwriting.  (i)  Name(s) of the lead or managing

     underwriter(s) and an identification of the nature of the

     underwriting arrangements;

          (ii)  If the offering is not made on a firm commitment

     basis, a brief description of the underwriting arrangements.  You

     may use any clear, concise, and accurate description of the

     underwriting arrangements.  You may use the following

     descriptions of underwriting arrangements where appropriate:

                              ======END OF PAGE 55======





                    Example A:     Best efforts
                    offering.  The underwriters are not
                    required to sell any specific
                    number or dollar amount of
                    securities but will use their best
                    efforts to sell the securities
                    offered.

                    Example B:     Best efforts,
                    minimum-maximum offering.  The
                    underwriters must sell the minimum
                    number of securities offered
                    (insert number) if any are sold.
                    The underwriters are required to
                    use only their best efforts to sell
                    the maximum number of securities
                    offered (insert number).


          (iii)  If you offer the securities on a best efforts or best

     efforts minimum/maximum basis, the date the offering will end,

     any minimum purchase requirements, and any arrangements to place

     the funds in an escrow, trust, or similar account.  If you have

     not made any of these arrangements, state this fact and describe

     the effect on investors;

          (9)  Date of Prospectus.  The date of  the prospectus;

          (10) Prospectus "Subject to Completion" Legend.  If you use

     the prospectus before the effective date of the registration

     statement, a prominent statement that:

          (i)  The information in the prospectus will be amended or

     completed;

          (ii) A registration statement relating to these securities

     has been filed with the Securities and Exchange Commission;

          (iii)     The securities may not be sold until the

     registration statement becomes effective; and

          (iv) The prospectus is not an offer to sell the securities

                              ======END OF PAGE 56======





     and it is not soliciting an offer to buy the securities in any

     state where offers or sales are not permitted.  The legend may be

     in the following or other clear, plain language:

                    The information in this prospectus is
               not complete and may be changed.  We may not
               sell these securities until the registration
               statement filed with the Securities and
               Exchange Commission is effective.  This
               prospectus is not an offer to sell these
               securities and it is not soliciting an offer
               to buy these securities in any state where
               the offer or sale is not permitted.
               
          (11) If you use 230.430A of this chapter to omit pricing

     information and the prospectus is used before you determine the

     public offering price, the information and legend in paragraph

     (b)(10) of this section.



          10.  By revising 229.502 to read as follows:

     229.502 (Item 502) Inside Front and Outside Back Cover Pages of
                         Prospectus.

          The registrant must furnish this information in plain

     English.  See 230.421(d) of Regulation C of this chapter.

          (a)  Table of Contents.  On either the inside front or

     outside back cover page of the prospectus, provide a reasonably

     detailed table of contents.  It must show the page number of the

     various sections or subdivisions of the prospectus.  Include a

     specific listing of the risk factors section required by Item 503

     of this Regulation S-K (17 CFR 229.503).  You must include the

     table of contents immediately following the cover page in any

     prospectus you deliver electronically.

          (b)  Dealer Prospectus Delivery Obligation.  On the outside

                              ======END OF PAGE 57======





     back cover page of the prospectus, advise dealers of their

     prospectus delivery obligation, including the expiration date

     specified by Section 4(3) of the Securities Act (15 U.S.C.

     77d(3)) and 230.174 of this chapter.  If you do not know the

     expiration date on the effective date of the registration

     statement, include the expiration date in the copy of the

     prospectus you file under 230.424(b) of this chapter.  You do

     not have to include this information if dealers are not required

     to deliver a prospectus under 230.174 of this chapter or Section

     24(d) of the Investment Company Act (15 U.S.C. 80a-24).  You may

     use the following or other clear, plain language:

               Dealer Prospectus Delivery Obligation
               Until (insert date), all dealers that effect
               transactions in these securities, whether or
               not participating in this offering, may be
               required to deliver a prospectus.  This is in
               addition to the dealers' obligation to
               deliver a prospectus when acting as
               underwriters and with respect to their unsold
               allotments or subscriptions.


          11.  By revising 229.503 to read as follows:

     229.503 (Item 503) Prospectus Summary, Risk Factors, and
                         Ratio of Earnings to Fixed Charges.

          The registrant must furnish this information in plain

     English.  See 230.421(d) of Regulation C of this chapter.

          (a)  Prospectus Summary.  Provide a summary of the

     information in the prospectus where the length or complexity of

     the prospectus makes a summary useful.  The summary should be

     brief.  The summary should not contain, and is not required to

     contain, all of the detailed information in the prospectus.  If


                              ======END OF PAGE 58======





     you provide summary business or financial information, even if

     you do not caption it as a summary, you still must provide that

     information in plain English.

                        Instruction to paragraph 503(a).

          The summary should not merely repeat the text of the

     prospectus but should provide a brief overview of the key aspects

     of the offering.  Carefully consider and identify those aspects

     of the offering that are the most significant and determine how

     best to highlight those points in clear, plain language.

          (b)  Address and Telephone Number.  Include, either on the

     cover page or in the summary section of the prospectus, the

     complete mailing address and telephone number of your principal

     executive offices.

          (c)  Risk Factors.  Where appropriate, provide under the

     caption "Risk Factors" a discussion of the most significant

     factors that make the offering speculative or risky.  This

     discussion must be concise and organized logically.  Do not

     present risks that could apply to any issuer or any offering.

     Explain how the risk affects the issuer or the securities being

     offered.  Set forth each risk factor under a subcaption that

     adequately describes the risk.  The risk factor discussion must

     immediately follow the summary section.  If you do not include a

     summary section, the risk factor section must immediately follow

     the cover page of the prospectus or the pricing information

     section that immediately follows the cover page.  Pricing

     information means price and price-related information that you


                              ======END OF PAGE 59======





     may omit from the prospectus in an effective registration

     statement based on 230.430A(a) of this chapter.  The risk

     factors may include, among other things, the following:

          (1)  Your lack of an operating history;

               (2)  Your lack of profitable operations in recent

               periods;

          (3)  Your financial position;

          (4)  Your business or proposed business; or

          (5)  The lack of a market for your common equity securities

     or securities convertible into or exercisable for common equity

     securities.

          (d)  Ratio of Earnings to Fixed Charges.  If you register

     debt securities, show a ratio of earnings to fixed charges.  If

     you register preference equity securities, show the ratio of

     combined fixed charges and preference dividends to earnings.

     Present the ratio for each of the last five fiscal years and the

     latest interim period for which financial statements are

     presented in the document.  If you will use the proceeds from the

     sale of debt or preference securities to repay any of your

     outstanding debt or to retire other securities and the change in

     the ratio would be ten percent or greater, you must include a

     ratio showing the application of the proceeds, commonly referred

     to as the pro forma ratio.

                        Instructions to paragraph 503(d)

          1.   Definitions.  In calculating the ratio of earnings to

     fixed charges, you must use the following definitions:


                              ======END OF PAGE 60======





          (A)  Fixed charges.  The term "fixed charges" means the sum

     of the following:  (a) interest expensed and capitalized, (b)

     amortized premiums, discounts and capitalized expenses related to

     indebtedness, (c) an estimate of the interest within rental

     expense, and (d) preference security dividend requirements of

     consolidated subsidiaries.

          (B)  Preference security dividend.  The term "preference

     security dividend" is the amount of pre-tax earnings that is

     required to pay the dividends on outstanding preference

     securities.  The dividend requirement must be computed as the

     amount of the dividend divided by (1 minus the effective income

     tax rate applicable to continuing operations).

          (C)  Earnings.  The term "earnings" is the amount resulting

     from adding and subtracting the following items.  Add the

     following:  (a) pretax income from continuing operations before

     adjustment for minority interests in consolidated subsidiaries or

     income or loss from equity investees, (b) fixed charges, (c)

     amortization of capitalized interest, (d) distributed income of

     equity investees, and (e) your share of pre-tax losses of equity

     investees for which charges arising from guarantees are included

     in fixed charges.  From the total of the added items, subtract

     the following: (a) interest capitalized, (b) preference security

     dividend requirements of consolidated subsidiaries, and (c) the

     minority interest in pre-tax income of subsidiaries that have not

     incurred fixed charges.  Equity investees are investments that

     you account for using the equity method of accounting.  Public


                              ======END OF PAGE 61======





     utilities following SFAS 71 should not add amortization of

     capitalized interest in determining earnings, nor reduce fixed

     charges by any allowance for funds used during construction.

          2.   Disclosure.  Disclose the following information when

     showing the ratio of earnings to fixed charges:

          (A)  Deficiency.  If a ratio indicates less than one-to-one

     coverage, disclose the dollar amount of the deficiency.

          (B)  Pro forma ratio.  You may show the pro forma ratio only

     for the most recent fiscal year and the latest interim period.

     Use the net change in interest or dividends from the refinancing

     to calculate the pro forma ratio.

          (C)  Foreign private issuers.  A foreign private issuer must

     show the ratio based on the figures in the primary financial

     statement.  A foreign private issuer must show the ratio based on

     the figures resulting from the reconciliation to U.S. generally

     accepted accounting principles if this ratio is materially

     different.

          (D)  Summary Section.  If you provide a summary or similar

     section in the prospectus, show the ratios in that section.

          3.   Exhibit.  File an exhibit to the registration statement

     to show the figures used to calculate the ratios.  See paragraph

     (b)(12) of Item 601 of Regulation S-K (17 CFR 229.601(b)(12)).



          12.  By amending 229.508 by revising paragraphs (e) and (l)

     to read as follows:

     229.508 (Item 508) Plan of distribution.


                              ======END OF PAGE 62======





                                * * * * *

          (e)  Underwriter's compensation.  Provide a table that sets

     out the nature of the compensation and the amount of discounts

     and commissions to be paid to the underwriter for each security

     and in total.  The table must show the separate amounts to be

     paid by the company and the selling shareholders.  In addition,

     include in the table all other items considered by the National

     Association of Securities Dealers to be underwriting compensation

     for purposes of that Association's Rules of Fair Practice.

                        Instructions to paragraph 508(e)

          1.   The term "commissions" is defined in paragraph (17) of

     Schedule A of the Securities Act.  Show separately in the table

     the cash commissions paid by the registrant and selling security

     holders.  Also show in the table commissions paid by other

     persons.  Disclose any finder's fee or similar payments in the

     table.

          2.   Disclose the offering expenses specified in Item 511 of

     Regulation S-K (17 CFR 229.511).

          3.   If the underwriter has any arrangement with the issuer,

     such as an over-allotment option, under which the underwriter may

     purchase additional shares in connection with the offering,

     indicate that this arrangement exists and state the amount of

     additional shares that the underwriter may purchase under the

     arrangement.  Where the underwriter has such an arrangement,

     present maximum-minimum information in a separate column to the

     table, based on the purchase of all or none of the shares subject


                              ======END OF PAGE 63======





     to the arrangement.  Describe the key terms of the arrangement in

     the narrative.

                                 * * * * *

          (l)  Stabilization and other transactions.  (1)  Briefly

     describe any transaction that the underwriter intends to conduct

     during the offering that stabilizes, maintains, or otherwise

     affects the market price of the offered securities.  Include

     information on stabilizing transactions, syndicate short covering

     transactions, penalty bids, or any other transaction that affects

     the offered security's price.  Describe the nature of the

     transactions clearly and explain how the transactions affect the

     offered security's price.  Identify the exchange or other market

     on which these transactions may occur.  If true, disclose that

     the underwriter may discontinue these transactions at any time;

          (2)  If the stabilizing began before the effective date of

     the registration statement, disclose the amount of securities

     bought, the prices at which they were bought and the period

     within which they were bought.  If you use 230.430A of this

     chapter, the prospectus you file under 230.424(b) of this

     chapter or include in a post-effective amendment must contain

     information on the stabilizing transactions that took place

     before the determination of the public offering price; and

          (3)  If you are making a warrants or rights offering of

     securities to existing security holders and any securities not

     purchased by existing security holders are to be reoffered to the

     public, disclose in a supplement to the prospectus or in the


                              ======END OF PAGE 64======





     prospectus used in connection with the reoffering:

          (i)  The amount of securities bought in stabilization

     activities during the offering period and the price or range of

     prices at which the securities were bought;

          (ii) The amount of the offered securities subscribed for

     during the offering period;

          (iii)     The amount of the offered securities subscribed

     for by the underwriter during the offering period;

          (iv) The amount of the offered securities sold during the

     offering period by the underwriter and the price or price ranges

     at which the securities were sold; and

          (v)  The amount of the offered securities that will be

     reoffered to the public and the public offering price.



     PART 230 -     GENERAL RULES AND REGULATIONS, SECURITIES ACT OF
               1933


          13.  The general authority citation for Part 230 is revised

     to read as follows:

          Authority:  15 U.S.C. 77b, 77f, 77g, 77h, 77j, 77s, 77sss,

     78c, 78d, 78l, 78m, 78n, 78o, 78w, 78ll(d), 79t, 80a-8, 80a-24,

     80a-29, 80a-30, and 80a-37, unless otherwise noted.

                                * * * * *



          14.  By amending 230.421 by revising paragraph (b) and

     adding paragraph (d) to read as follows:




                              ======END OF PAGE 65======










     230.421  Presentation of information in prospectuses.

                                * * * * *

          (b)  You must present the information in a prospectus in a

     clear, concise and understandable manner.  You must prepare the

     prospectus using the following standards:

          (1)  Present information in clear, concise sections,

     paragraphs, and sentences.  Whenever possible, use short,

     explanatory sentences and bullet lists;

          (2)  Use descriptive headings and subheadings;

          (3)  Avoid frequent reliance on glossaries or defined terms

     as the primary means of explaining information in the prospectus.

     Define terms in a glossary or other section of the document only

     if the meaning is unclear from the context.  Use a glossary only

     if it facilitates understanding of the disclosure; and

          (4)  Avoid legal and highly technical business terminology.



                              Note to 230.421(b):

          In drafting the disclosure to comply with this section, you

     should avoid the following:

          1.   Legalistic or overly complex presentations that make

     the substance of the disclosure difficult to understand;

          2.   Vague "boilerplate" explanations that are imprecise and

     readily subject to different interpretations;

          3.   Complex information copied directly from legal

                              ======END OF PAGE 66======





     documents without any clear and concise explanation of the

     provision(s); and

          4.   Disclosure repeated in different sections of the

     document that increases the size of the document but does not

     enhance the quality of the information.

                                 * * * * *

          (d)(1)    To enhance the readability of the prospectus, you

     must use plain English principles in the organization, language,

     and design of the front and back cover pages, the summary, and

     the risk factors section.

          (2)  You must draft the language in these sections so that

     at a minimum it substantially complies with each of the following

     plain English writing principles:

               (i)  Short sentences;

               (ii) Definite, concrete, everyday words;

          (iii)     Active voice;

               (iv) Tabular presentation or bullet lists for complex

               material, whenever possible;

               (v)  No legal jargon or highly technical business

               terms; and

               (vi) No multiple negatives.

          (3)  In designing these sections or other sections of the

     prospectus, you may include pictures, logos, charts, graphs, or

     other design elements so long as the design is not misleading and

     the required information is clear.  You are encouraged to use

     tables, schedules, charts and graphic illustrations of the


                              ======END OF PAGE 67======





     results of operations, balance sheet, or other financial data

     that present the data in an understandable manner.  Any

     presentation must be consistent with the financial statements and

     non-financial information in the prospectus.  You must draw the

     graphs and charts to scale.  Any information you provide must not

     be misleading.



                          Instruction to 230.421

          You should read Securities Act Release No. 33-7497 (January

     28, 1998) for information on plain English principles.



          15.  By revising paragraph (b)(1) of 230.461 to read as

     follows.

     230.461  Acceleration of effective date.

                                * * * * *

          (b)  * * *

          (1)  Where there has not been a bona fide effort to make the

     prospectus reasonably concise, readable, and in compliance with

     the plain English requirements of Rule 421(d) of Regulation C (17

     CFR 230.421(d)) in order to facilitate an understanding of the

     information in the prospectus.

                                * * * * *

          16.  Revise 230.481 to read as follows:

     230.481  Information required in prospectuses.

          Disclose the following in registration statements prepared

     on a form available solely to investment companies registered


                              ======END OF PAGE 68======





     under the Investment Company Act of 1940 or in registration

     statements filed under the Act for a company that has elected to

     be regulated as a business development company under Sections 55

     through 65 of the Investment Company Act (15 U.S.C. 80a-54 - 80a-

     64):

          (a)  Facing Page.  Indicate the approximate date of the

     proposed sale of the securities to the public.

          (b)  Outside Front Cover Page.  If applicable, include the

     following in plain English as required by 230.421(d):

          (1)  Commission Legend.  Provide a legend that indicates

     that the Securities and Exchange Commission has not approved or

     disapproved of the securities or passed upon the accuracy or

     adequacy of the disclosure in the prospectus and that any

     contrary representation is a criminal offense.  The legend may be

     in one of the following or other clear and concise language:

          Example A:     The Securities and Exchange Commission has
                    not approved or disapproved these securities or
                    passed upon the adequacy of this prospectus.  Any
                    representation to the contrary is a criminal
                    offense.

          Example B:     The Securities and Exchange Commission has
                    not approved or disapproved these securities or
                    determined if this prospectus is truthful or
                    complete.  Any representation to the contrary is a
                    criminal offense.

          (2)  "Subject to Completion" Legend.

          (i)  If a prospectus or Statement of Additional Information

     will be used before the effective date of the registration

     statement, include on the outside front cover page of the

     prospectus or Statement of Additional Information, a prominent


                              ======END OF PAGE 69======





     statement that:

          (A)  The information in the prospectus or Statement of

     Additional Information will be amended or completed;

          (B)  A registration statement relating to these securities

     has been filed with the Securities and Exchange Commission;

          (C)  The securities may not be sold until the registration

     statement becomes effective; and

          (D)  In a prospectus, that the prospectus is not an offer to

     sell the securities and it is not soliciting an offer to buy the

     securities in any state where offers or sales are not permitted,

     or in a Statement of Additional Information, that the Statement

     of Additional Information is not a prospectus.

          (ii) The legend may be in the following language or other

     clear and understandable language:

               The information in this prospectus (or Statement of
               Additional Information) is not complete and may be
               changed. We may not sell these securities until the
               registration statement filed with the Securities and
               Exchange Commission is effective.  This prospectus (or
               Statement of Additional Information) is not an offer to
               sell these securities and is not soliciting an offer to
               buy these securities in any state where the offer or
               sale is not permitted.

          (iii)     In the case of a prospectus that omits pricing

     information under 230.430A, provide the information and legend

     in paragraph (b)(2) of this section if the prospectus or

     Statement of Additional Information is used before the initial

     public offering price is determined.

          (c)  Table of Contents.  Include on either the outside

     front, inside front, or outside back cover page of the


                              ======END OF PAGE 70======





     prospectus, a reasonably detailed table of contents.  It must

     show the page number of the various sections or subdivisions of

     the prospectus.  Include this table of contents immediately

     following the cover page in any prospectus delivered

     electronically.

          (d)  Stabilization and Other Transactions.  (1) Indicate on

     the front cover page of the prospectus if the underwriter has any

     arrangement with the issuer, such as an over-allotment option,

     under which the underwriter may purchase additional shares in

     connection with the offering, and state the amount of additional

     shares the underwriter may purchase under the arrangement.

     Provide disclosure in the prospectus that briefly describes any

     transaction that the underwriter intends to conduct during the

     offering that stabilizes, maintains, or otherwise affects the

     market price of the offered securities.  Include information on

     stabilizing transactions, syndicate short covering transactions,

     penalty bids, or any other transactions that affect the offered

     security's price.  Describe the nature of the transactions

     clearly and explain how the transactions affect the offered

     security's price.  Identify the exchange or other market on which

     these transactions may occur.  If true, disclose that the

     underwriter may discontinue these transactions at any time;

          (2)  If the stabilizing began before the effective date of

     the registration statement, disclose in the prospectus the amount

     of securities bought, the prices at which they were bought and

     the period within which they were bought.  In the event that


                              ======END OF PAGE 71======





     230.430A of this chapter is used, the prospectus filed under

     230.497(h) or included in a post-effective amendment must

     contain information on the stabilizing transactions that took

     place before the determination of the public offering price shown

     in the prospectus; and

          (3)  If you are making a warrant or rights offering of

     securities to existing security holders and the securities not

     purchased by existing security holders are to be reoffered to the

     public, disclose in the prospectus used in connection with the

     reoffering:

          (i)  The amount of securities bought in stabilization

     activities during the offering period and the price or range of

     prices at which the securities were bought;

          (ii) The amount of the offered securities subscribed for

     during the offering period;

          (iii)     The amount of the offered securities subscribed

     for by the underwriters during the offering period;

          (iv) The amount of the offered securities sold during the

     offering period by the underwriters and the price or range of

     prices at which the securities were sold; and

          (v)  The amount of the offered securities to be reoffered to

     the public and the public offering price.

          (e)  Dealer Prospectus Delivery Obligations.  On the outside

     back cover page of the prospectus, advise dealers of their

     prospectus delivery obligation, including the expiration date

     specified by Section 4(3) of the Act (15 U.S.C. 77d(3)) and


                              ======END OF PAGE 72======





     230.174.  If the expiration date is not known on the effective

     date of the registration statement, include the expiration date

     in the copy of the prospectus filed under 230.497.  This

     information need not be included if dealers are not required to

     deliver a prospectus under 230.174 or Section 24(d) of the

     Investment Company Act of 1940 (15 U.S.C. 80a-24).  Use the

     following or other clear, plain language:

               Dealer Prospectus Delivery Obligation
               Until (insert date), all dealers that effect
               transactions in these securities, whether or not
               participating in this offering, may be required to
               deliver a prospectus.  This is in addition to the
               dealers' obligation to deliver a prospectus when acting
               as underwriters and with respect to their unsold
               allotments or subscriptions.

          (f)  Electronic Distribution.  Where a prospectus is

     distributed through an electronic medium, issuers may satisfy

     legibility requirements applicable to printed documents, such as

     paper size, type size and font, bold-face type, italics and red

     ink, by presenting all required information in a format readily

     communicated to investors, and where indicated, in a manner

     reasonably calculated to draw investor attention to specific

     information.



     PART 239 -     FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

          17.  The authority citation for Part 239 continues to read

     in part as follows:

          Authority:  15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77sss,

     78c, 78l, 78m, 78n, 78o(d), 78u-5, 78w(a), 78ll(d), 79e, 79f,

     79g, 79j, 79l, 79m, 79n, 79q, 79t, 80a-8, 80a-29, 80a-30 and 80a-

                              ======END OF PAGE 73======





     37, unless otherwise noted.

                                 * * * * *



          18.  By amending Form S-2 (referenced in 239.12), Item 12

     to add paragraph (d) to read as follows:

          [Note:  The text of Form S-2 does not, and this amendment

     will not, appear in the Code of Federal Regulations]

                                 FORM S-2

            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                                 * * * * *

     Item 12.  Incorporation of Certain Information by Reference.

                                 * * * * *

          (d)(1)  You must state (i) that you will provide to each

     person, including any beneficial owner, to whom a prospectus is

     delivered, a copy of any or all of the information that has been

     incorporated by reference in the prospectus but not delivered

     with the prospectus;

          (ii) that you will provide this information upon written or

     oral request;

          (iii) that you will provide this information at no cost to

     the requester; and

          (iv) the name, address, and telephone number to which the

     request for this information must be made.

                           Note to Item 12(d)(1)

          If you send any of the information that is incorporated by

     reference in the prospectus to security holders, you also must


                              ======END OF PAGE 74======





     send any exhibits that are specifically incorporated by reference

     in that information.



          (2)  You must (i) identify the reports and other information

     that you file with the SEC; and

          (ii) state that the public may read and copy any materials

     you file with the SEC at the SEC's Public Reference Room at 450

     Fifth Street, N.W., Washington, D.C. 20549.  State that the

     public may obtain information on the operation of the Public

     Reference Room by calling the SEC at 1-800-SEC-0330.  If you are

     an electronic filer, state that the SEC maintains an Internet

     site that contains reports, proxy and information statements, and

     other information regarding issuers that file electronically with

     the SEC and state the address of that site (http://www.sec.gov).

     You are encouraged to give your Internet address, if available.

                                 * * * * *



          19.  By amending Form S-3 (referenced in 239.13) Item 12 to

     add paragraph (c) before the instruction to read as follows:

          [Note:  The text of Form S-3 does not, and this amendment

     will not, appear in the Code of Federal Regulations]

                                 FORM S-3

            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933


                                 * * * * *

     Item 12.  Incorporation of Certain Information by Reference.

                                 * * * * *

                              ======END OF PAGE 75======





          (c)(1)  You must state (i) that you will provide to each

     person, including any beneficial owner, to whom a prospectus is

     delivered, a copy of any or all of the information that has been

     incorporated by reference in the prospectus but not delivered

     with the prospectus;

          (ii) that you will provide this information upon written or

     oral request;

          (iii) that you will provide this information at no cost to

     the requester; and

          (iv) the name, address, and telephone number to which the

     request for this information must be made.

                                     

                           Note to Item 12(c)(1)

          If you send any of the information that is incorporated by

     reference in the prospectus to security holders, you also must

     send any exhibits that are specifically incorporated by reference

     in that information.



          (2)  You must (i) identify the reports and other information

     that you file with the SEC; and

          (ii) state that the public may read and copy any materials

     you file with the SEC at the SEC's Public Reference Room at 450

     Fifth Street, N.W., Washington, D.C. 20549.  State that the

     public may obtain information on the operation of the Public

     Reference Room by calling the SEC at 1-800-SEC-0330.  If you are

     an electronic filer, state that the SEC maintains an Internet


                              ======END OF PAGE 76======





     site that contains reports, proxy and information statements, and

     other information regarding issuers that file electronically with

     the SEC and state the address of that site (http://www.sec.gov).

     You are encouraged to give your Internet address, if available.

                                 * * * * *



          20.  By amending Form S-20 (referenced in 239.20) to revise

     the reference in Item 1 "Item 502(f) of Regulation S-K

     [229.502(f) of this chapter]" to read "Item 101(g) of Regulation

     S-K [229.101(g) of this chapter]."

          [Note:  The text of Form S-20 does not, and this amendment

     will not, appear in the Code of Federal Regulations]



          21.  By amending Form S-4 (referenced in 239.25) to revise

     Item 2 and adding paragraph (c) to Item 11 and paragraph (d) to

     Item 13 to read as follows:

          [Note:  The text of Form S-4 does not, and this amendment

     will not, appear in the Code of Federal Regulations]

                                 FORM S-4

            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                                 * * * * *

     Item 2.   Inside Front and Outside Back Cover Pages of
               Prospectus.

          Provide the information required by Item 502 of Regulation S-

     K.  In addition, on the inside front cover page, you must state

     (1) that the prospectus incorporates important business and

     financial information about the company that is not included in

                              ======END OF PAGE 77======





     or delivered with the document; and

          (2) that this information is available without charge to

     security holders upon written or oral request.  Give the name,

     address, and telephone number to which security holders must make

     this request.  In addition, you must state that to obtain timely

     delivery, security holders must request the information no later

     than five business days before the date they must make their

     investment decision.  Specify the date by which security holders

     must request this information.  You must highlight this statement

     by print type or otherwise.

                              Note to Item 2.

          If you send any of the information that is incorporated by

     reference in the prospectus to security holders, you also must

     send any exhibits that are specifically incorporated by reference

     in that information.

                                 * * * * *

     Item 11.  Incorporation of Certain Information by Reference.

                                 * * * * *

          (c)  You must (1) identify the reports and other information

     that you file with the SEC; and

          (2) state that the public may read and copy any materials

     you file with the SEC at the SEC's Public Reference Room at 450

     Fifth Street, N.W., Washington, D.C. 20549.  State that the

     public may obtain information on the operation of the Public

     Reference Room by calling the SEC at 1-800-SEC-0330.  If you are

     an electronic filer, state that the SEC maintains an Internet


                              ======END OF PAGE 78======





     site that contains reports, proxy and information statements, and

     other information regarding issuers that file electronically with

     the SEC and state the address of that site (http://www.sec.gov).

     You are encouraged to give your Internet address, if available.

                                 * * * * *

     Item 13.  Incorporation of Certain Information by Reference.

                                 * * * * *

          (d)  You must (1) identify the reports and other information

     that you file with the SEC; and

          (2) state that the public may read and copy any materials

     you file with the SEC at the SEC's Public Reference Room at 450

     Fifth Street, N.W., Washington, D.C. 20549.  State that the

     public may obtain information on the operation of the Public

     Reference Room by calling the SEC at 1-800-SEC-0330.  If you are

     an electronic filer, state that the SEC maintains an Internet

     site that contains reports, proxy and information statements, and

     other information regarding issuers that file electronically with

     the SEC and state the address of that site (http://www.sec.gov).

     You are encouraged to give your Internet address, if available.

                                 * * * * *

          22.  By amending Form F-2 (referenced in 239.32) to revise

     Item 12 to read as follows:

          [Note:  The text of Form F-2 does not, and this amendment

     will not, appear in the Code of Federal Regulations]

                                     

                                 FORM F-2


                              ======END OF PAGE 79======





            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                                 * * * * *

     Item 12.  Information with respect to the Registrant.

          (a)  You must state (1) that you will provide to each

     person, including any beneficial owner, to whom a prospectus is

     delivered, a copy of any or all of the information that has been

     incorporated by reference in the prospectus but not delivered

     with the prospectus;

          (2) that you will provide this information upon written or

     oral request;

          (3) that you will provide this information at no cost to the

     requester; and

          (4) the name, address, and telephone number to which the

     request for this information must be made.

                                     

                                     

                                     

                            Note to Item 12(a)

          If you send any of the information that is incorporated by

     reference in the prospectus to security holders, you also must

     send any exhibits that are specifically incorporated by reference

     in that information.

          (b)  You must (1) identify the reports and other information

     that you file with the SEC; and

          (2) state that the public may read and copy any materials

     you file with the SEC at the SEC's Public Reference Room at 450


                              ======END OF PAGE 80======





     Fifth Street, N.W., Washington, D.C. 20549.  State that the

     public may obtain information on the operation of the Public

     Reference Room by calling the SEC at 1-800-SEC-0330.  If you are

     an electronic filer, state that the SEC maintains an Internet

     site that contains reports, proxy and information statements, and

     other information regarding issuers that file electronically with

     the SEC and state the address of that site (http://www.sec.gov).

     You are encouraged to give your Internet address, if available.

                                 * * * * *

          23.  By amending Form F-3 (referenced in 239.33) by adding

     paragraphs (d) and (e) to Item 12 before the instruction to read

     as follows:

          [Note:  The text of Form F-3 does not, and this amendment

     will not, appear in the Code of Federal Regulations]

                                     

                                 FORM F-3

            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                                 * * * * *

     Item 12.  Incorporation of Certain Information by Reference.

                                 * * * * *

          (d)  You must state (1) that you will provide to each

     person, including any beneficial owner, to whom a prospectus is

     delivered, a copy of any or all of the information that has been

     incorporated by reference in the prospectus but not delivered

     with the prospectus;

          (2) that you will provide this information upon written or


                              ======END OF PAGE 81======





     oral request;

          (3) that you will provide this information at no cost to the

     requester; and

          (4) the name, address, and telephone number to which the

     request for this information must be made.

                            Note to Item 12(d)

          If you send any of the information that is incorporated by

     reference in the prospectus to security holders, you also must

     send any exhibits that are specifically incorporated by reference

     in that information.

          (e)  You must (1) identify the reports and other information

     that you file with the SEC; and

          (2) state that the public may read and copy any materials

     you file with the SEC at the SEC's Public Reference Room at 450

     Fifth Street, N.W., Washington, D.C. 20549.  State that the

     public may obtain information on the operation of the Public

     Reference Room by calling the SEC at 1-800-SEC-0330.  If you are

     an electronic filer, state that the SEC maintains an Internet

     site that contains reports, proxy and information statements, and

     other information regarding issuers that file electronically with

     the SEC and state the address of that site (http://www.sec.gov).

     You are encouraged to give your Internet address, if available.

                                 * * * * *



          24.  By amending Form F-4 (referenced in 239.34) to revise

     Item 2 and add paragraph (b) to Item 11 and paragraph (c) to Item


                              ======END OF PAGE 82======





     13 to read as follows:

          [Note:  The text of Form F-4 does not, and this amendment

     will not, appear in the Code of Federal Regulations]

                                     

                                     

                                     

                                 FORM F-4

            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933


                                 * * * * *

     Item 2.   Inside Front and Outside Back Cover Pages of
     Prospectus.


          Provide the information required by Item 502 of Regulation S-

     K.  In addition, on the inside front cover page, you must state

     (1) that the prospectus incorporates important business and

     financial information about the company that is not included in

     or delivered with the document; and

          (2) that this information is available without charge to

     security holders upon written or oral request.  Give the name,

     address, and telephone number to which security holders must make

     this request.  In addition, you must state that to obtain timely

     delivery, security holders must request the information no later

     than five business days before the date they must make their

     investment decision.  Specify the date by which security holders

     must request this information.  You must highlight this statement

     by print type or otherwise.

                                     

                              ======END OF PAGE 83======





                                     

                                     

                              Note to Item 2.

          If you send any of the information that is incorporated by

     reference in the prospectus to security holders, you also must

     send any exhibits that are specifically incorporated by reference

     in that information.

                                 * * * * *

     Item 11.  Incorporation of Certain Information by Reference.

                                 * * * * *

          (b)  You must (1) identify the reports and other information

     that you file with the SEC; and

          (2) state that the public may read and copy any materials

     you file with the SEC at the SEC's Public Reference Room at 450

     Fifth Street, N.W., Washington, D.C. 20549.  State that the

     public may obtain information on the operation of the Public

     Reference Room by calling the SEC at 1-800-SEC-0330.  If you are

     an electronic filer, state that the SEC maintains an Internet

     site that contains reports, proxy and information statements, and

     other information regarding issuers that file electronically with

     the SEC and state the address of that site (http://www.sec.gov).

     You are encouraged to give your Internet address, if available.

                                 * * * * *





     Item 13.  Incorporation of Certain Information by Reference.


                              ======END OF PAGE 84======





                                 * * * * *

          (c)  You must (1) identify the reports and other information

     that you file with the SEC; and

          (2) state that the public may read and copy any materials

     you file with the SEC at the SEC's Public Reference Room at 450

     Fifth Street, N.W., Washington, D.C. 20549.  State that the

     public may obtain information on the operation of the Public

     Reference Room by calling the SEC at 1-800-SEC-0330.  If you are

     an electronic filer, state that the SEC maintains an Internet

     site that contains reports, proxy and information statements, and

     other information regarding issuers that file electronically with

     the SEC and state the address of that site (http://www.sec.gov).

     You are encouraged to give your Internet address, if available.

                                 * * * * *

















     PART 274 - FORMS PRESCRIBED UNDER THE INVESTMENT COMPANY ACT OF
               1940
               


          25.  The authority citation for Part 274 continues to read

     as follows:

                              ======END OF PAGE 85======





          Authority:  15 U.S.C. 77f, 77g, 77h, 77j, 77s, 78c(b), 78l,

     78m, 78n, 78o(d), 80a-8, 80a-24, and 80a-29, unless otherwise

     noted.



          26.  Amend Form N-2 (referenced in  274.11a-1) to revise

     Item 2, Item 3, and Item 14 to read as follows:

          [Note:  The text of Form N-2 does not, and this amendment

     will not, appear in the Code of Federal Regulations.]



                                 FORM N-2

                                 * * * * *

     Item 2.   Cover Pages; Other Offering Information

          1.   Disclose whether any national securities exchange or

     the Nasdaq Stock Market lists the securities offered, naming the

     particular market(s), and identify the trading symbol(s) for

     those securities, on the inside front or outside back cover page

     of the prospectus unless the information appears on the front

     cover page.

          2.   Provide the information required by paragraph (d) of

     Rule 481 under the Securities Act [17 CFR 230.481(d)] in an

     appropriate place in the prospectus.

          3.   Provide the information required by paragraph (e) of

     Rule 481 under the Securities Act [17 CFR 230, 481(d)] on the

     outside back cover page of the prospectus.

     Item 3.   Fee Table and Synopsis

                                 * * * * *


                              ======END OF PAGE 86======





     3.   In the case of a business development company, include the

     information required by Item 101(e) of Regulation S-K [17 CFR

     229.101(e)] (concerning reports and other information filed with

     the SEC).

                                 * * * * *

     Item 14.  Cover Page

     1.   The outside cover page must contain the following

     information:

                                 * * * * *

          (e)  the statement required by paragraph (b)(2) of Rule 481

     under the Securities Act [17 CFR 230.481(b)(2)].

                                 * * * * *

     By the Commission.

                                        Jonathan G. Katz
                                        Secretary
     January 28, 1998

     _______________________________
     1    17 CFR 230.421.

     2    17 CFR 230.461.

     3    17 CFR 230.481.

     4    17 CFR 230.400 et seq.

     5    17 CFR 229.101.

     6    17 CFR 229.501.

     7    17 CFR 229.502.

     8    17 CFR 229.503.

     9    17 CFR 229.508.

     10    17 CFR 229.10 et seq.

     11    17 CFR 228.10 et seq.

                              ======END OF PAGE 87======





     12    17 CFR 239.12.

     13    17 CFR 239.13.

     14    17 CFR 239.25.

     15    17 CFR 239.20.

     16    17 CFR 239.32.

     17    17 CFR 239.33.

     18    17 CFR 239.34.

     19    17 CFR 239.14.

     20    We proposed this package of rules in January 1997.  See
     Release No. 33-     7380 (January 14, 1997), 62 FR 3512 (January
     21, 1997).

     21    15 U.S.C. 77a et seq.

     22    15 U.S.C. 78a et seq.

     23    See the Forms 10-Q of Pfizer, Inc. (File No. 1-3619) for
     fiscal 1997.

     24    See the 1996 Form 10-K filed by Baltimore Gas and Electric
     Company (File No. 1-1910) and the Boddie-Noell Properties, Inc.
     registration statement filed December 2, 1997 (File No. 333-
     39803).

     25    See Securities Act Release No. 6900 (June 17, 1991).

     26    Rule 421(c), 17 CFR 230.421(c).

     27    Item 501 of Regulation S-K, 17 CFR 229.501, and Item 501 of
     Regulation S-B, 17 CFR 228.501.

     28    The North American Securities Administrators Association,
     Inc.'s Disclosure Reform Task Force recommended that the
     suggested legend include a reference to the state securities
     commissions.  We have changed the legend to reflect this
     suggestion.

     29    See Securities Act Release No. 6900 for our interpretive
     advice on      limited partnership offerings.

     30    Item 502 of Regulation S-K, 17 CFR 229.502, and Item 502 of
     Regulation S-B, 17 CFR 228.502.

     31    We are also amending Forms S-2, S-3, S-4, F-2, F-3, and F-4.

                              ======END OF PAGE 88======





     Along with     the list of reports incorporated by reference, you
     will include   information on (1) how investors may obtain a copy
     of these reports, and    (2) how they may obtain copies of the
     other reports you file with the    SEC.

     32    Item 503 of Regulation S-K, 17 CFR 229.503, and Item 503 of
     Regulation S-B, 17 CFR 228.503.

     33    See the amendments to Rule 481 under Regulation C, 17 CFR
     230.481.

     34    The proposed amendments to Form N-1A are included in
     Investment Company Act Release No. 22528 (February 27, 1997) and
     the proposed profile rule is in Investment Company Act Release
     No. 22529 (February 27, 1997).

     35    We are also adopting amendments to Rule 481 to require plain
     English legends in fund prospectuses.

     36    The Commission proposed to allow mutual funds a transition
     period    of six months after the effective date of the proposed
     rules before   they would need to comply with the new prospectus
     disclosure     requirements.  See Investment Company Act Release
     Nos. 22528 and 22529     (February 27, 1997).

     37    If you file a registration statement under Rule 462(b), you
     must      comply    with new requirements only if they applied to
     the earlier    offering.

     38    15 U.S.C. 77j(a)(3).

     39    You may read and copy the comment letters and the staff's
     summary   of these letters in our Public Reference Room at 450
     Fifth Street,  N.W., Washington, D.C. 20549.  Ask for File No. S7-
     3-97.

     40    For example, see the Investment Company Institute's comment
     letter, dated March 24, 1997.

     41    See Gould v. American Hawaiian Steamship Company, 331 F.
     Supp. 981 (D. Del. 1971); Kohn v. American Metal Climax, Inc.,
     322 F. Supp. 1331 (E.D. Pa. 1970), modified, 458 F.2d 255 (3d
     Cir. 1972).

     42    See Rule 461 of Regulation C, 17 CFR 230.461.

     43    PSA The Bond Market Trade Association, in their comment
     letter dated March 24, 1997, for example, estimated that costs
     "could increase by up to 50 percent."

     44    For example, one participant indicated that they spent 12
     percent less time answering investors' questions, while another

                              ======END OF PAGE 89======





     spent 20 percent less time.

     45    Four of the six participants spent 10 percent longer; the
     initial public offering issuer spent 15 percent longer; and one
     participant took "significantly longer."  For the participant
     that took significantly longer, we received two estimates_one
     from the company of 75 percent longer and one from the firm's
     legal counsel of 200 percent longer.

     46    This estimate is based on responses to a survey of nine
     plain English pilot program participants and on a summary of the
     results of an informal survey of pilot participants conducted by
     the American Society of Corporate Secretaries.  See Public
     Comment letter dated March 24, 1997.

     47    The Division of Corporation Finance collected Item 511 of
     Regulation S-K expense information from approximately 1500
     registration statements filed between January 1 and December 31,
     1995.  Assuming legal costs averaged $150/hour and accounting
     costs averaged $75/hour, the survey indicates that approximately
     48 percent of burden hours are for legal and technical writing,
     while 52 percent are accounting-related.  Because the rule and
     amendments apply predominately to legal and technical writing, we
     apply the increased burden to those hours.

     48    We do not anticipate that the plain English requirements
     will change the burden hours or cost for preparing Form N-2.
     Consequently, we do not include Form N-2 in the table.

     49    We anticipate that some firms will comply, in part, with the
     plain English requirements using in-house counsel, which will
     lower hourly costs.

     50    In 1997, registrants filed 7,531 filings.  At $7,200 per
     filing, the total increase in cost would be approximately $54
     million.

     51    Four of the six participants believed that once they
     developed plain English formats, it would take them less time to
     write a document in plain English than in the conventional
     language.  One participant predicted that writing documents in
     plain English would require no additional time after the initial
     effort.  The other participant did not comment directly.

     52    These estimates are based on the number of such filings made
     in calendar year 1997.

     53    See American Society of Corporate Secretaries Public Comment
     letter dated March 24, 1997.

     54    See Baltimore Gas and Electric Company Public Comment letter
     dated March 26, 1997.

                              ======END OF PAGE 90======





     55    One of the six participants indicated that writing in plain
     English shortened their document by 5 percent; one by 10 to 15
     percent; one by 15 percent; and one by 35 percent.
     Interestingly, the pilot participant who spent 75 percent more
     time on its plain English prospectus shortened its prospectus the
     largest amount_35 percent.  One found no appreciable difference,
     and one estimated that plain English increased document length by
     one percent.

     56    The staff randomly selected prospectuses filed in 1997 to
     estimate document length.

     57    The Division of Corporation Finance collected Item 511 of
     Regulation S-K expense information from approximately 1500
     registration statements filed between January 1 and December 31,
     1995.  Printing expenses averaged $63,200 per filing.  Assuming
     five-percent cost savings, public companies would save $3,160 per
     filing or a total of about $24 million in printing and mailing
     costs on 7,531 filings per year.

     58    See Report of the Task Force on Disclosure Simplification
     (March 1996).

     59    Securities Act Release No. 33-7380.

     60    A summary of comments is available, along with the comment
     letters, in Public File No. S7-3-97. The file is available for
     inspection and copying in the Commission's Public Reference Room,
     450 Fifth Street N.W., Washington, D.C. 20549.

     61    17 CFR 230.157.

     62    17 CFR 240.0-10.

     63    44 U.S.C. 3501 et seq.

     64    Regulations S-K, S-B, and C do not impose reporting burdens
     directly on public companies.  For administrative convenience,
     each of these regulations is currently assigned one burden hour.
     The burden hours imposed by the disclosure regulations are
     currently included in the estimates for the forms that refer to
     the regulations.

     65    Regulations S-K and S-B will continue to show an estimated
     burden    hour of one.








                              ======END OF PAGE 91======