9074 Federal Register / Vol. 75, No. 38 / Friday, February 26, 2010 / Rules and Regulations 

1 17 CFR 240.14a–16. 

2 15 U.S.C. 78a et seq. 

3 17 CFR 230.498. 

4 15 U.S.C. 77a et seq. 

5Amendments to Rules Requiring Internet 

Availability of Proxy Materials, Release No. 33– 

9073 (Oct. 14, 2009) [74 FR 53954] (the ‘‘Proposing 

Release’’). 

6See, e.g., Facilitating Shareholder Director 

Nominations, Release No. 33–9046 (June 10, 2009) 

[74 FR 29024], Proxy Disclosure Enhancements, 

Release No. 33–9089 (Dec. 16, 2009) [74 FR 68443], 

and Order Approving Proposed Rule Change, as 

modified by Amendment No. 4, to Amend NYSE 

Rule 452 and Corresponding Listed Company 

Manual Section 402.08 to Eliminate Broker 

Discretionary Voting for the Election of Directors, 

Except for Companies Registered under the 

Investment Company Act of 1940, and to Codify 

Two Previously Published Interpretations that Do 

Not Permit Broker Discretionary Voting for Material 

Amendments to Investment Advisory Contracts 

with an Investment Company, Release No. 34– 

60215 (July 1, 2009) [74 FR 33293]. 

7See letters from American Bar Association 

(‘‘ABA’’), American Business Conference (‘‘ABC’’), 

Ameriprise Financial, Inc. (‘‘Ameriprise’’), 

Association of Corporate Counsel (‘‘ACC’’), The 

Altman Group (‘‘Altman’’), BNY Mellon Shareowner 

Services (‘‘BNY’’), Broadridge Financial Solutions, 

Inc. (‘‘Broadridge’’), Independent Steering 

Committee of Broadridge Investor Communications 

Solutions (‘‘Broadridge Steering Committee’’), 

California State Teachers Retirement System 

(‘‘CalSTRS’’), Calvert Group Limited (‘‘Calvert’’), U.S. 

Chamber of Commerce (‘‘Chamber’’), Computershare 

Limited (‘‘Computershare’’), Corporate Governance, 

Diversified Global Graphics Group (‘‘DG3’’), Edison 

International (‘‘Edison’’), Investment Company 

Institute (‘‘ICI’’), Intel Corporation (‘‘Intel’’), IR 

WebReport.com, Moxy Vote (‘‘Moxy’’), National 

Investor Relations Institute (‘‘NIRI’’), Otter Tail 

Corporation (‘‘Otter Tail’’), Registrar and Transfer 

Company (‘‘R&T’’), Sullivan & Cromwell (‘‘S&C’’), 

Society of Corporate Secretaries and Governance 

Professionals (‘‘SCSGP’’), and Securities Transfer 

Association, Inc. (‘‘STA’’). 

8See, e.g., letters from ABA, ABC, ACC, Altman, 

BNY, Broadridge, Broadridge Steering Committee, 

CalSTRS, Calvert, Chamber, Computershare, 

Edison, ICI, Intel, NIRI, Otter Tail, R&T, S&C, 

SCSGP, and STA. 

9See Internet Availability of Proxy Material, 

Release No. 34–55146 (Jan. 22, 2007) [72 FR 4148] 

(‘‘Internet Availability of Proxy Material Adopting 

Release’’) and Shareholder Choice Regarding Proxy 

Materials, Release No. 34–56135 (July 26, 2007) [72 

FR 42221]. 

10See Broadridge Notice & Access, Statistical 

Overview of Use with Beneficial Shareholders (as 

of June 30, 2009) attached to the letter from 

Broadridge (‘‘Broadridge Statistical Overview’’). 

Broadridge is the largest provider of brokerage 

processing services with respect to beneficial 

owners holding through a broker or similar 

intermediary and has provided detailed statistical 

information on the use of the notice and access 

model. The Broadridge Statistical Overview is 

generally limited to comparisons between issuers 

that have used the notice-only option for 

distribution to some portion of their beneficial 

owners and issuers that exclusively used the full set 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Parts 230 and 240 

[Release Nos. 33–9108; 34–61560; IC– 

29131; File No. S7–22–09] 

RIN 3235–AK25 

Amendments to Rules Requiring 

Internet Availability of Proxy Materials 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Final rule. 

SUMMARY: We are amending rules under 

the Securities Exchange Act of 1934 and 

the Securities Act of 1933 to clarify and 

provide additional flexibility regarding 

the format of the Notice of Internet 

Availability of Proxy Materials that is 

sent to shareholders and to permit 

issuers and other soliciting persons to 

better communicate with shareholders 

by including explanatory materials 

regarding the reasons for the use of the 

notice and access proxy rules and the 

process of receiving and reviewing 

proxy materials and voting pursuant to 

the notice and access proxy rules. The 

amendments also revise the timeframe 

for delivering a Notice to shareholders 

when a soliciting person other than the 

issuer relies on the notice and access 

proxy rules and permit mutual funds to 

accompany the Notice with a summary 

prospectus. 

DATES: Effective Date: March 29, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Steven G. Hearne, Special Counsel in 

the Office of Rulemaking, Division of 

Corporation Finance, at (202) 551–3430, 

or with respect to registered investment 

companies, Sanjay Lamba, Senior 

Counsel, in the Office of Disclosure 

Regulation, Division of Investment 

Management, at (202) 551–6784, 100 F 

Street, NE., Washington, DC 20549. 

SUPPLEMENTARY INFORMATION: The 

Commission is amending Rule 14a–16 1

under the Securities Exchange Act of 

1934 2 and Rule 498 3 under the 

Securities Act of 1933.4

Table of Contents 

I. Background and Overview of the 

Amendments 

II. Discussion of the Amendments 

A. Revisions to the Notice Requirements 

and Inclusion of Explanatory Materials 

1. Proposed Amendments 

2. Comments on the Proposed 

Amendments 

3. Final Rule 

B. Amendment to Notice Deadlines for 

Soliciting Persons Other Than the Issuer 

1. Proposed Amendment 

2. Comments on the Proposed Amendment 

3. Final Rule 

C. Additional Comments on the Proposed 

Amendments and Actions Taken by the 

Commission 

D. Technical Amendments Relating to 

Registered Investment Companies 

III. Paperwork Reduction Act 

IV. Cost-Benefit Analysis 

V. Consideration of Burden on Competition 

and Promotion of Efficiency, 

Competition and Capital Formation 

VI. Final Regulatory Flexibility Analysis 

VII. Statutory Authority and Text of the 

Amendments 

I. Background and Overview of the 

Amendments 

On October 14, 2009, we proposed 

amendments to the notice and access 

proxy rules to remove regulatory 

impediments that may be reducing 

shareholder response rates to proxy 

solicitations by permitting issuers and 

other soliciting persons to more 

effectively use the notice and access 

model.5 These amendments were 

proposed based on our continuing 

review of the disclosures shareholders 

receive when they are asked to make a 

voting decision and the process 

followed when those votes are 

solicited.6 As discussed in detail below, 

we are adopting the proposed 

amendments with certain modifications 

based on the comments received on the 

proposal. 

We received 25 comment letters in 

response to the proposed amendments.7

These letters came from corporations, 

professional associations, institutional 

investors, law firms, transfer agents, 

proxy service providers and other 

interested parties. We have reviewed 

and considered all of the comments that 

we received on the proposed 

amendments. Most commenters 

supported the use of the notice and 

access model and the Commission’s 

proposed modifications to improve its 

implementation.8 The adopted rules 

reflect changes made in response to 

some of these comments. We explain 

our revisions with respect to each 

proposed rule amendment in more 

detail throughout this release. 

In 2007, the Commission established 

procedures that promote the use of the 

Internet as a reliable and cost-efficient 

means of making proxy materials 

available to shareholders.9 The notice 

and access proxy rules require all 

issuers and other soliciting persons to 

post their proxy materials on an Internet 

Web site and provide a Notice of 

Internet Availability of Proxy Materials 

(‘‘Notice’’) to shareholders. These rules 

also provide issuers and other soliciting 

persons an option as to whether to send 

a full set of proxy materials to all 

shareholders or to send shareholders 

only the Notice. According to 

Broadridge Financial Solutions, Inc. 

(‘‘Broadridge’’), over 1,300 corporate 

issuers used the notice-only option for 

distribution of the Notice to some 

portion of their beneficial owners under 

the notice and access model in the 2009 

proxy season.10 Commenters, including 


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delivery option and comparisons between the first 

and second years of use of the notice-only option. 

The data does not provide a comparison to an 

issuer’s experience in the year prior to using the 

notice-only option for distribution. 11See, e.g., letters from Broadridge, BNY, and 

R&T. Some commenters noted that processing fees 

were reduced on distributions to registered owners, 

but expressed concern about the processing fees 

charged by service providers for distributions to 

beneficial owners. See, e.g., letters from Altman, 

BNY, ICI, NIRI, Otter Tail, R&T, and STA. 

12See notes 18–20 of the Proposing Release. 

13As proposed, Exchange Act Rule 14a–16(d) 

would limit the required legend to the line 

‘‘Important Notice Regarding the Availability of 

Proxy Materials for the Shareholder Meeting To Be 

Held on [insert meeting date]’’ and would require 

the other information currently required in the 

legend to be included in the Notice, but not as part 

of a specified legend. 

14 17 CFR 240.14a–16(f)(2). 

15See, e.g., letters from ABA, ACC, BNY, 

Broadridge, Broadridge Steering Committee, 

Calvert, Chamber, Computershare, Edison, ICI, 

Intel, Otter Tail, R&T, S&C, SCSGP, and STA. 

16See, e.g., letters from ABA, Altman, Otter Tail, 

and Intel. Letters from ABA, Altman and Intel 

suggested the inclusion of a mandatory legend 

indicating that a separate proxy card should be used 

for voting. 

17See letter from Otter Tail. 

18See letter from Edison. 

19See letter from Intel suggesting that the 

mandated format of the Notice be changed so that 

matters to be addressed at the annual meeting be 

identified by topic rather than identifying the 

specific proposals in order to avoid confusion 

between the Notice and the proxy card. 

20See, e.g., letters from ABA, ACC, S&C, and 

STA. 

21See, e.g., letters from ABA and ACC. 

22See letter from ABA. 

23See letter from S&C. 

Broadridge and transfer agents who 

conduct the distribution to registered 

owners, indicated that issuers have 

experienced significant cost savings in 

printing, postage and processing fees.11

As we noted in the Proposing Release, 

while many issuers have experienced 

significant cost savings using the noticeonly option, statistics indicate lower 

shareholder response rates to proxy 

solicitations when the notice-only 

option is used.12 We are concerned that 

some investors may be confused when 

issuers and other soliciting persons 

distribute proxy materials using the 

notice-only option and we believe our 

rules should be amended to provide 

additional flexibility for issuers and 

other soliciting persons to better 

communicate with shareholders to 

reduce that confusion. 

We are adopting amendments today to 

provide issuers and other soliciting 

persons with additional flexibility to 

provide to shareholders a more effective 

explanation of the importance and effect 

of the Notice and the reasons for its use, 

which should better facilitate use of our 

rules and improve investor 

understanding. Specifically, the 

amendments provide additional 

flexibility regarding the format and 

content of the Notice, permit issuers and 

other soliciting persons to better 

communicate with shareholders by 

including explanatory materials 

regarding the reasons for the use of the 

notice and access rules and the process 

of receiving and reviewing proxy 

materials and voting, and revise the 

timeframe for delivering a Notice to 

shareholders when a soliciting person 

other than the issuer relies on the 

notice-only option. 

II. Discussion of the Amendments 

A. Revisions to the Notice Requirements 

and Inclusion of Explanatory Materials 

We proposed amendments to 

Exchange Act Rule 14a–16 to provide 

issuers and other soliciting persons with 

additional flexibility to develop a more 

effective Notice and to provide 

shareholders with guidance as to how to 

access the proxy materials online, 

request a paper copy of the proxy 

materials, and vote their shares. We are 

adopting the amendments generally as 

proposed with some changes as 

recommended by commenters. 

1. Proposed Amendments 

Under the amendments we proposed, 

issuers and other soliciting persons 

would have additional flexibility in 

formatting and selecting the language to 

be used in the Notice. Rather than 

requiring the soliciting person to 

include a detailed legend that may seem 

like boilerplate language to 

shareholders, we proposed to require 

that the information appearing on the 

Notice address certain topics, without 

specifying the exact language to be 

used.13 Further, in order to mitigate 

confusion about the Notice and to allow 

issuers and other soliciting persons to 

better engage shareholders, we proposed 

to revise Exchange Act Rule 14a– 

16(f)(2)14 to permit issuers and other 

soliciting persons to accompany the 

Notice with an explanation of the notice 

and access model, which would be 

limited to an explanation of the process 

of receiving and reviewing the proxy 

materials and voting. Materials designed 

to persuade shareholders to vote in a 

particular manner, change the method 

of delivery of proxy materials, or 

explain why the person was sending 

only a Notice to shareholders would not 

be permitted under the proposed 

amendments. 

2. Comments on the Proposed 

Amendments 

Most commenters supported the 

additional flexibility provided by the 

proposed amendments to design and 

prepare the Notice and provide 

explanatory materials, and many of 

these commenters offered additional 

suggestions for improving the 

proposals.15 Several commenters 

recommended that the design and 

wording of the Notice should be 

required to clearly indicate that the 

Notice is not a proxy card and may not 

be voted.16 Other commenters 

supported a uniform and easily 

recognizable design for the Notice,17

requiring intermediaries to forward the 

Notice in issuer provided envelopes,18

or requiring that the Notice identify 

proxy items by topic rather than specific 

proposals.19

Several commenters supported more 

flexibility than we had proposed for the 

explanatory materials, such as 

permitting an issuer to explain the 

reasons for its use of the notice-only 

option.20 Commenters suggested that an 

issuer’s rationale for using the noticeonly option would enhance 

shareholders’ understanding of the 

reasons for receiving the Notice, inform 

investors of the benefits of using the 

notice-only option and help to 

distinguish the Notice from the proxy 

card, without influencing a 

shareholder’s voting decision.21 One 

commenter supported additionally 

requiring that intermediaries be 

required to pass explanatory materials 

on to beneficial owners.22

Finally, one commenter noted that if 

the Commission approved the proposed 

amendments to the Notice requirements, 

a technical change is necessary to 

Exchange Act Rule 14a–16(n).23 Rule 

14a–16(n) addresses the notice and 

access requirements when an issuer or 

other soliciting person sends a full set 

of proxy materials to security holders. 

The suggested technical change related 

to references in Rule 14a–16(n)(4) to the 

disclosure requirements of the Notice in 

Exchange Act Rule 14a–16(d). Since the 

proposed amendments revise the 

disclosure requirements of Rule 14a– 

16(d), conforming changes should also 

be made to 14a–16(n)(4). 

3. Final Rule 

After considering the comments, we 

are adopting the amendments to our 

requirements regarding the Notice and 

the rules about what materials may 

accompany the initial distribution of the 

Notice as proposed with some changes 

as recommended by commenters. The 

final rule provides issuers and other 

soliciting persons with additional 

flexibility in formatting and selecting 

the language to be used in the Notice, 

as proposed. The information appearing 

on the Notice is required to address 


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9076 Federal Register / Vol. 75, No. 38 / Friday, February 26, 2010 / Rules and Regulations 

24We are redesignating 17 CFR 240.14a–16(d)(2) 

through 17 CFR 240.14a–16(d)(8) as 17 CFR 

240.14a–16(d)(5) through 17 CFR 240.14a– 

16(d)(11). Prior to this redesignation, the referenced 

paragraph was 17 CFR 240.14a–16(d)(3) as 

indicated in the Proposing Release. After adoption, 

as noted here, the referenced paragraph is 17 CFR 

240.14a–16(d)(6). 

25See note 20 above. 

26We emphasize that under revised Rule 14a– 

16(f)(2) only registrants and other soliciting 

persons, and not other parties, may accompany a 

Notice with explanatory materials. 

27This new provision is an additional exception 

to the general rule in Exchange Act Rule 14a–16(f) 

that the Notice be sent separately from other types 

of security holder communications. 

28While the Notice continues to permit the 

soliciting person to include their recommendations 

as provided in redesignated Exchange Act Rule 

14a–16(d)(6), as we explained in the Internet 

Availability of Proxy Material Adopting Release, 

‘‘The Notice is intended merely to make 

shareholders aware that these proxy materials are 

available on an Internet Web site; it is not intended 

to serve as a stand-alone basis for making a voting 

decision.’’ 

29See 17 CFR 240.14b–1(b)(2) and 17 CFR 

240.14b–2(b)(3). 

30 17 CFR 240.14a–4. 

31 17 CFR 240.14a–16(l)(2)(ii). 

32Alternatively, a soliciting person may also send 

the Notice 40 calendar days before the shareholder 

meeting to which the proxy materials relate. 17 CFR 

14a–16(l)(2)(i). 

33See letter from ABA. 

certain topics, without specifying the 

exact language to be used. In response 

to comments requesting that the rules 

specifically state that the Notice is not 

a form of proxy and may not be voted, 

we are adopting final rules that require 

an issuer or other soliciting person to 

indicate that the Notice is not a form for 

voting. We are not, however, adopting 

suggested changes to the Notice 

requirements that would require a 

prescribed legend that the Notice is not 

a proxy card. We are also not adopting 

changes to the Notice that would require 

a uniform design for the Notice or 

would require that the Notice identify 

proxy items by topic rather than specific 

identification. We believe that the 

requirement that the Notice indicate 

that it is not a form for voting and the 

additional flexibility provided by the 

revised rules, as well as the guidance 

regarding the requirements of 

redesignated Exchange Act Rule 14a– 

16(d)(6),24 address the concerns raised 

by commenters. These changes also 

provide issuers and other soliciting 

persons the flexibility to draft the Notice 

more effectively. We believe that the 

flexibility should discourage the 

development of boilerplate disclosure, 

which is one of the problems our 

amendments are designed to address. 

As noted above, several commenters 

supported additional flexibility to allow 

the materials to address the reasons for 

the use of the notice-only option.25

Consistent with the proposal, the final 

rule permits issuers and other soliciting 

persons to accompany the Notice with 

an explanation of the notice and access 

model.26 As proposed, new Exchange 

Act Rule 14a–16(f)(2)(iv) 27 allows 

issuers and other soliciting persons to 

provide an explanation of the process of 

receiving and reviewing the proxy 

materials and voting under the notice 

and access proxy rules. In a change from 

the proposal, new Exchange Act Rule 

14a–16(f)(2)(iv) also permits an 

explanation of the reasons for the use of 

the notice and access rules, as some 

commenters suggested. 

We concur that additional flexibility 

to explain the reasons for the use of the 

notice and access rules and the noticeonly option may enhance shareholders’ 

understanding of the notice and access 

model and, therefore, we have expanded 

the exception to include those topics. 

Materials designed to persuade 

shareholders to vote in a particular 

manner or change the method of the 

delivery of proxy materials are still not 

permitted under the revised 

exception.28 As also noted above, one 

commenter suggested that we 

specifically require that intermediaries 

and their agents be required to 

distribute explanatory materials 

prepared in reliance on the amended 

rules. Since issuers and other soliciting 

persons are generally required to 

reimburse intermediaries for the 

reasonable expenses incurred in 

connection with forwarding materials to 

shareholders, we are not at this time 

specifically requiring intermediaries 

and their agents to forward explanatory 

materials. Of course, to the extent that 

materials that accompany the Notice are 

‘‘other soliciting materials’’ then our 

current rules 29 would specifically 

require distribution of the materials. 

In response to comments, we are also 

making a technical change to Exchange 

Act Rule 14a–16(n). Rule 14a–16(n)(4) 

details the notice and access disclosures 

that registrants and other soliciting 

persons are not required to include in 

proxy materials when they choose to 

send a full set of proxy materials to 

security holders. Since we are amending 

the notice and access disclosure 

requirements in Rule 14a–16(d), we are 

making conforming changes to Rule 

14a–16(n)(4). Specifically, we are 

revising Rule 14a–16(n)(4)(i) to delete 

the reference to legend requirements 

that are no longer part of Rule 14a– 

16(d)(1) and to make reference to new 

paragraph 14a–16(d)(2) and changing 

the reference to ‘‘(d)(7)’’ in Rule 14a– 

16(n)(4)(iii) to ‘‘(d)(10)’’ to track the new 

numbering in Rule 14a–16(d). 

Finally, we are confirming the 

guidance provided in the Proposing 

Release that it is not necessary that the 

Notice directly mirror the proxy card. 

Rather, Exchange Act Rule 14a–16(d)(6) 

provides that the Notice must clearly 

and impartially identify each separate 

matter intended to be acted on that will 

be considered at the meeting. We do not 

believe the Notice has to conform to the 

specific Exchange Act Rule 14a–4 30

formatting and content requirements for 

disclosure of matters on the proxy card. 

B. Amendment to Notice Deadlines for 

Soliciting Persons Other Than the Issuer 

We proposed to amend Exchange Act 

Rule 14a–16(l)(2)(ii) 31 to improve the 

workability of the notice and access 

rules that apply to soliciting persons, 

other than the issuer, that choose to use 

the notice-only option. 

1. Proposed Amendment 

As we noted in the Proposing Release, 

the current requirement in Exchange 

Act Rule 14a–16(l)(2) that requires 

soliciting persons to send the Notice to 

shareholders 10 calendar days after the 

date that the issuer first sends its proxy 

materials to shareholders can create 

potential compliance issues for 

soliciting persons. The staff review of 

filings may result in outstanding 

comments on a soliciting person’s 

preliminary proxy statement more than 

10 calendar days after the soliciting 

person has initially filed. The practical 

effect of this requirement was to limit 

that soliciting person’s ability to use the 

notice-only option if the soliciting 

person was unable to file its definitive 

proxy statement with the Commission 

by that time. To improve 

implementation of the notice and access 

model, we proposed to amend Exchange 

Act Rule 14a–16(l)(2)(ii) to require 

soliciting persons relying on this 

alternative 32 to file a preliminary proxy 

statement within 10 calendar days after 

the issuer files its definitive proxy 

statement and to send its Notice to 

shareholders no later than the date on 

which it files its definitive proxy 

statement with the Commission. 

2. Comments on the Proposed 

Amendment 

Comments on the proposal were 

limited and mixed. One commenter 

supported the Commission’s proposal 

for a soliciting person to file a 

preliminary proxy statement within 10 

calendar days after the issuer files its 

definitive proxy statement and send its 

Notice no later than the date on which 

it files its definitive proxy statement.33

Other commenters expressed concern 


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34See, e.g., letters from Ameriprise, SCSGP, and 

S&C. 

35See, e.g., letters from ABC and R&T. 

36See, e.g., letters from Altman, Chamber, 

Computershare, Edison, ICI, Intel, R&T, SCSGP, and 

STA. 

37See, e.g., letters from ABA, ACC, Altman, 

Broadridge Steering Committee, Calvert, Chamber, 

Computershare, ICI, Intel, NIRI, Otter Tail, R&T, 

and SCSGP. 

38See, e.g., letters from Altman, DG3, Otter Tail, 

NIRI, R&T, SCSGP, and STA. 

39See, e.g., letters from ABA, ABC, Altman, BNY, 

Broadridge, Broadridge Steering Committee, 

Chamber, Computershare, Edison, ICI, Intel, NIRI, 

Otter Tail, R&T, S&C, and SCSGP. 

40See, e.g., letters from ABC, Altman, ICI, NIRI, 

R&T, and STA. 

41See, e.g., letters from Corporate Governance, 

DG3, and Moxy. 

42See letter from IRWebReport.com. 

43See Speech by Chairman Mary Schapiro to the 

Practising Law Institute’s 41st Annual Institute on 

Securities Regulation (Nov. 4, 2009) at http:// 

sec.gov/news/speech/2009/spch110409mls.htm. 

44 Information about the Commission’s 

educational efforts can be found at: http:// 

www.sec.gov/spotlight/proxymatters.shtml. 

45 17 CFR 240.14a–16(f)(2)(iii). Unless otherwise 

specified or the context otherwise requires, the term 

‘‘prospectus’’ means a prospectus meeting the 

requirements of Section 10(a) of the Securities Act 

[15 U.S.C. 77j(a)]. See 17 CFR 240.0–1(d). 

46We use the term ‘‘mutual fund’’ to mean a 

registered investment company that is an open-end 

management company as defined in Section 5(a)(1) 

of the Investment Company Act of 1940 [15 U.S.C. 

80a–5(a)(1)]. 

47See Enhanced Disclosure and New Prospectus 

Delivery Option for Registered Open-End 

Management Investment Companies, Release No. 

33–8998 (Jan. 13, 2009) [74 FR 4546]. Although the 

summary prospectus is not a Section 10(a) 

prospectus, it may be used to satisfy any prospectus 

delivery obligations under Section 5(b)(2) of the 

Securities Act [15 U.S.C. 77e(b)(2)]. 17 CFR 

230.498(c). 

48See amendment to Exchange Act Rule 14a– 

16(f)(2)(iii). We are also adopting a conforming 

amendment to Rule 498 under the Securities Act 

[17 CFR 230.498], which permits mutual funds to 

use a summary prospectus to satisfy their 

prospectus delivery obligations. Rule 498(f)(2) 

provides that a mutual fund’s summary prospectus 

shall be given greater prominence than any 

accompanying materials. We are amending Rule 

498(f)(2) to provide that a summary prospectus 

need not be given greater prominence than an 

accompanying Notice. 

49See, e.g., letters from ABA, Calvert, and ICI. 

50 44 U.S.C. 3501 et seq.; 5 CFR 1320.11. 

that without a specific time requirement 

for sending the Notice prior to the 

shareholder meeting, shareholders may 

not have sufficient time to access and 

consider the materials provided or 

obtain paper copies prior to casting their 

vote.34

3. Final Rule 

After considering the comments, we 

are adopting the revisions as proposed 

to amend Exchange Act Rule 14a– 

16(l)(2)(ii) to require soliciting persons 

other than the issuer to file a 

preliminary proxy statement within 10 

calendar days after the issuer files its 

definitive proxy statement and to send 

its Notice to shareholders no later than 

the date on which it files its definitive 

proxy statement with the Commission. 

We continue to believe that the time 

period provides sufficient time for a 

soliciting person to prepare its proxy 

statement and respond to any staff 

comments, while still permitting the 

soliciting person to use the notice and 

access model. While the rule does not 

provide for a specific period of time 

before the meeting by which a soliciting 

person is required to mail the Notice, 

the soliciting person should, and 

generally it would be in their best 

interest to, make the Notice and proxy 

materials available to shareholders with 

sufficient time for shareholders to 

review the materials and make an 

informed voting decision. 

C. Additional Comments on the 

Proposed Amendments and Actions 

Taken by the Commission 

Some commenters indicated their 

belief that the proposed amendments 

would result in only modest 

improvements.35 A number of 

commenters recommended revising the 

notice and access model to permit 

issuers to send a proxy card and 

business reply envelope, either with or 

without a short summary proxy 

statement accompanying the Notice in 

order to increase voting rates and 

facilitate shareholder participation.36

Other commenters expressed support 

for reducing the amount of time 

required for sending the Notice prior to 

the meeting from 40 days to 30 days.37

Still other commenters expressed 

concern regarding the notice and access 

processing fee structure, the lack of 

competition for proxy service providers 

and issuers’ inability to negotiate the 

fees which results in limitations on the 

amount of the cost savings from 

switching to the notice and access 

model.38 We are not addressing these 

issues at this time, as the Commission 

is still considering these and other ways 

to further encourage informed 

shareholder participation. 

Many commenters suggested that the 

Commission should do more to improve 

not only the notice and access model, 

but also the proxy process generally.39

While supporting the proposal, a 

number of commenters suggested that 

the Notice and lack of explanatory 

materials accompanying the Notice were 

not the primary reasons for reduced 

retail voting and advocated for more 

sweeping changes.40 A few commenters 

did not directly address the proposed 

amendments, but made broader appeals 

regarding the proxy process or provided 

alternative insights,41 and one 

commenter suggested that use of the 

notice and access model undermines 

investor protection and should be 

repealed.42

While we are not in this release 

addressing the broader concerns with 

the proxy system or the notice and 

access model raised by commenters that 

went beyond the scope of the proposals, 

we are continuing to consider these and 

other concerns relating to the proxy 

process that have been raised. At the 

direction of the Chairman, the 

Commission’s staff is conducting a 

comprehensive review of the mechanics 

by which proxies are voted and the way 

in which information is conveyed to 

shareholders and is preparing a concept 

release to seek public comment on these 

issues.43 In that review, the 

Commission’s staff will continue to 

monitor shareholder activity under, and 

the effects of, the notice and access 

model. In addition, the Commission’s 

staff is undertaking educational efforts 

to increase understanding of proxy 

mechanics generally and the notice and 

access model of delivery of proxy 

materials.44

D. Technical Amendments Relating to 

Registered Investment Companies 

We are also adopting, as proposed, 

technical amendments to our rules for 

registered investment companies. 

Exchange Act Rule 14a–16(f)(2)(iii) 

currently permits a registered 

investment company to accompany the 

Notice with a prospectus or report to 

shareholders.45 The Commission 

recently adopted rule amendments that 

permit mutual funds 46 to satisfy their 

prospectus delivery obligations by 

sending or giving investors key 

information in the form of a summary 

prospectus.47 Consistent with 

permitting mutual funds to use a 

summary prospectus to satisfy their 

delivery obligations, we are revising our 

rules to permit mutual funds to 

accompany the Notice with a summary 

prospectus.48 Commenters that 

addressed this issue supported the 

technical amendments.49

III. Paperwork Reduction Act 

A. Background 

Certain provisions of the amendments 

contain a ‘‘collection of information’’ 

within the meaning of the Paperwork 

Reduction Act of 1995.50 The 

Commission published a notice 

requesting comment on the collection of 

information requirements in the 

Proposing Release for the amendments, 


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51 44 U.S.C. 3507(d) and 5 CFR 1320.11. 

52See Internet Availability of Proxy Materials, 

Release No. 34–52926 (Dec. 8, 2005) [70 FR 74597]. 

53See the Internet Availability of Proxy Material 

Adopting Release at note 9 above. 

54While the revised amendments additionally 

permit an explanation of the reasons for an issuer’s 

use of the notice and access rules, we expect the 

additional explanation to be part of the same 

drafting process and to be limited to a few lines of 

text. Likewise, the required clarification that the 

Notice is not a form for voting should not add 

materially to the time to prepare the disclosure. We 

therefore believe the changes do not affect our 

burden estimates. 

55 15 U.S.C. 80a–1 et seq. 

56 17 CFR 270.20a–1. 

57 17 CFR 240.14a–1 et seq. 

58 17 CFR 240.14a–101. 

59 15 U.S.C. 78n(a). 

60See the Internet Availability of Proxy Material 

Adopting Release at note 9 above. 

and we are submitting these 

requirements to the Office of 

Management and Budget for review in 

accordance with the PRA.51 An agency 

may not conduct or sponsor, and a 

person is not required to comply with, 

a collection of information unless it 

displays a currently valid control 

number. Compliance with the rules as 

they are amended is mandatory; 

however, certain information collections 

under these rules are required and some 

are voluntary. Responses to the 

information collections will not be kept 

confidential and there is no mandatory 

retention period for the information 

disclosed. 

B. Summary of the Final Rules 

As discussed in more detail below, 

the amendments that we are adopting 

provide additional flexibility regarding 

the format of the Notice that is sent to 

shareholders, permit issuers and other 

soliciting persons to better communicate 

with shareholders by including 

explanatory materials regarding the 

reasons for the use of the notice and 

access rules and the process of receiving 

and reviewing proxy materials and 

voting, and revise the timeframe for 

delivering a Notice to shareholders 

when a soliciting person other than the 

issuer relies on the notice-only option. 

In the Proposing Release, we 

requested comment on the PRA 

analysis. We received no comments that 

addressed our burden estimates for the 

proposed amendments. 

1. Regulation 14A and 14C 

The titles for the collections of 

information for operating companies 

are: 

• Regulation 14A (OMB Control No. 

3235–0059); and 

• Regulation 14C (OMB Control No. 

3235–0057). 

We previously revised these 

collections of information in the release 

that proposed the notice and access 

model as a voluntary model for 

disseminating proxy materials 52 and the 

release in which we adopted 

amendments requiring issuers and other 

soliciting persons to follow the model.53

We submitted the revisions in those 

releases and are submitting the 

amendments to OMB for review in 

accordance with the PRA. 

We have made some additional 

changes to the amendments, but we do 

not expect those changes to affect our 

estimates.54 The following table 

summarizes for purposes of the PRA the 

burden estimates for Schedules 14A and 

14C reflecting amendments that permit, 

but do not require, an issuer or other 

soliciting person to include explanatory 

materials with the Notice, which are the 

only amendments in the release 

affecting our burden estimates: 

TABLE 1—CALCULATION OF INCREMENTAL PAPERWORK REDUCTION ACT BURDEN ESTIMATES FOR PROXY AND

INFORMATION STATEMENTS

Form Annual 

responses 

Incremental 

hours/form 

Incremental 

burden 75% Issuer 25% Professional 

$400 

Professional 

cost 

(A) (B) (C)=(A)*(B) (D)=(C)*0.75 (E)=(C)*0.25 (F)=(E)*$400 

Schedule 14A ....................................... 7300 0.5 3650 2737 .5 912 .5 $365,000 

Schedule 14C ...................................... 680 0.5 340 255 85 34,000 

Total .............................................. 7980 ........................ 3990 2992 .5 997 .5 399,000 

2. Rule 20a–1 

Certain provisions of the current 

notice and access model contain 

‘‘collection of information’’ requirements 

within the meaning of the PRA, 

including preparation of Notices, 

maintaining Web sites, maintaining 

records of shareholder preferences, and 

responding to requests for copies. Those 

provisions increase the current burden 

for the existing collection of information 

entitled ‘‘Rule 20a–1 under the 

Investment Company Act of 1940,55

Solicitation of Proxies, Consents and 

Authorizations’’ (OMB Control No. 

3235–0158). Rule 20a–1 under the 

Investment Company Act 56 requires 

that the solicitation of a proxy, consent, 

or authorization with respect to a 

security issued by an investment 

company be in compliance with 

Regulation 14A,57 Schedule 14A,58 and 

all other rules and regulations adopted 

under Section 14(a) of the Exchange 

Act.59 It also requires a fund’s 

investment adviser, or a prospective 

adviser, to transmit to the person 

making a proxy solicitation the 

information necessary to enable that 

person to comply with the rules and 

regulations applicable to the 

solicitation. The notice and access 

model requires all registered investment 

companies to post their proxy materials 

on an Internet Web site and furnish 

Notice of the materials’ availability to 

shareholders.60 The Notices, the proxy 

materials posted on the Web site, and 

copies of the proxy materials sent in 

response to shareholder requests are not 

kept confidential. 

The following discussion summarizes 

the burden estimates for Rule 20a–1 that 

we provided in the Proposing Release. 

For purposes of the PRA, we estimate 

that the total annual reporting burden 

for Rule 20a–1 increased by 

approximately 1,378 hours and that the 

annual cost increased by approximately 

$735,000 for the services of outside 

professionals to comply with the 

disclosure provisions of the existing 

notice and access model. In addition, for 

purposes of the PRA, we estimate that 

a typical investment company issuer 

spends an additional five hours per 

year, or a total of 6,125 hours, to 

maintain these records as to which of its 

shareholders have made an election to 

receive proxy materials in paper or by 

e-mail. Further, we estimate that the 

additional burden to prepare an 

intermediary’s Notice is approximately 

one hour, or a total annual burden of 

1,225 hours for all investment company 


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61See the Proposing Release for calculations 

underlying the burden estimates. 62We do not expect our proposed conforming 

amendment, which would permit mutual funds to 

accompany the Notice with a summary prospectus, 

to have a substantive impact on a mutual fund’s 

decision otherwise permitted under Rule 498 of the 

Securities Act to provide a summary prospectus 

instead of a statutory prospectus to its shareholders. 

No commenters suggested it would have a 

substantial impact. 

63See, e.g., Broadridge, BNY, Computershare, and 

R&T. 

64Since intermediaries and their agents already 

have systems to prepare and deliver proxy materials 

and the nature of the proposed changes are 

relatively small, we do not expect the 

intermediaries’ role in sending explanatory material 

to beneficial owners to affect their costs associated 

with the rule. In any event, since soliciting persons 

reimburse intermediaries for their reasonable 

expenses of forwarding proxy materials, we do not 

expect intermediaries to incur costs associated with 

the rule. 

65 15 U.S.C. 78w(a). 

66 15 U.S.C. 77b(b). 

67 15 U.S.C. 78c(f). 

68 15 U.S.C. 80a–2(c). 

proxy solicitations. Finally, like 

investment company issuers, we 

estimate that the requirement to 

maintain records to keep track of which 

beneficial owners have made a 

permanent election to receive proxy 

materials in paper or by e-mail results 

in an additional annual burden of five 

hours, or a total of 6,125 hours, for 

intermediaries. We received no 

comments on the estimates and are 

making no adjustments. In total, we 

estimate that the annual PRA reporting 

burden for current Rule 20a–1 increased 

by 14,853 hours and $735,000 in 

professional costs to reflect compliance 

with the existing notice and access 

model. 

With respect to the amendments in 

this release, we have made some 

additional clarifying changes, but we do 

not expect those changes to affect our 

estimates. We estimate that the 

amendments that permit, but do not 

require, an issuer or other soliciting 

person to include explanatory materials 

with the Notice, increase the PRA 

burden estimates under Rule 20a–1 by 

approximately 459 hours and $61,250 in 

professional costs.61

IV. Cost-Benefit Analysis 

A. Introduction 

We are adopting amendments 

designed to improve implementation of 

the notice and access model by revising 

the legend requirements in the rule to 

make them more flexible, permitting the 

Notice to be accompanied by 

explanatory materials regarding the 

reasons for the use of the notice and 

access rules and the process of receiving 

and reviewing the proxy materials and 

voting, and revising the timeframe for 

delivering a Notice to shareholders 

when a soliciting person other than the 

issuer relies on the notice-only option.62

We received no comments on the costs 

and benefits of the amendments. 

We expect the amendments to: 

• Facilitate participation by 

shareholders who may be confused by 

the operation of the notice and access 

model; 

• Provide additional flexibility in 

describing the notice and access model; 

and 

• Facilitate participation by some 

soliciting persons who may currently be 

effectively precluded from using the 

notice-only option. 

B. Benefits 

As discussed above, by permitting 

some additional flexibility in designing 

the Notice and permitting explanatory 

materials regarding the reasons for the 

use of the notice and access rules and 

the process of receiving and reviewing 

the proxy materials and voting to 

accompany the Notice, the amendments 

are intended to reduce regulatory 

impediments and improve 

understanding of the notice and access 

model for participating shareholders. 

Improved understanding of the model 

through an explanation of the reasons 

for the use of the Notice and the process 

of receiving and reviewing proxy 

materials and voting should reduce 

confusion and may thereby improve the 

efficiency and effectiveness of the proxy 

voting system. The benefits may be 

limited if issuers send notices to 

shareholders that are less likely to 

respond. Some commenters noted lower 

shareholder response rates under the 

notice and access model.63

Revising one of the two alternative 

Notice deadlines applicable to soliciting 

persons other than issuers is intended to 

facilitate use of the notice-only option 

by soliciting persons who may 

otherwise be precluded from using the 

notice-only option because of their 

inability to meet the deadline for 

sending the Notice. This would help 

lower costs for those persons by 

reducing impediments for certain 

soliciting persons to participate in the 

proxy process through use of the noticeonly option. 

C. Costs 

Eliminating the specific limitations of 

the legend requirement may result in 

some soliciting persons providing a 

more confusing Notice. This may 

increase the cost of shareholder 

participation in the proxy process, and 

to the extent that it affects participation, 

could distort votes and outcomes. In 

addition, an issuer or other soliciting 

person that chooses to include 

explanatory materials in the same 

mailing with the Notice will incur the 

cost of preparing that information.64 For 

purposes of the PRA, we estimate that 

the amendments will cause an aggregate 

annual increase in the compliance 

burden for operating and investment 

company issuers and other soliciting 

persons preparing explanatory materials 

of approximately 3,450 hours of inhouse personnel time and 

approximately $460,000 for the services 

of outside professionals. 

V. Consideration of Burden on 

Competition and Promotion of 

Efficiency, Competition and Capital 

Formation 

Section 23(a) of the Exchange Act 65

requires the Commission, when making 

rules and regulations under the 

Exchange Act, to consider the impact a 

new rule would have on competition. 

Section 23(a)(2) prohibits the 

Commission from adopting any rule that 

would impose a burden on competition 

not necessary or appropriate in 

furtherance of the purposes of the 

Exchange Act. Section 2(b) of the 

Securities Act,66 Section 3(f) of the 

Exchange Act 67 and Section 2(c) of the 

Investment Company Act 68 require the 

Commission, when engaging in 

rulemaking that requires it to consider 

whether an action is necessary or 

appropriate in the public interest, to 

also consider whether the action would 

promote efficiency, competition, and 

capital formation. 

The amendments that we are adopting 

permit additional flexibility in 

designing the Notice, permit issuers and 

other soliciting persons to better 

communicate with shareholders by 

accompanying the Notice with 

explanatory materials regarding the 

reasons for the use of the notice and 

access rules and the process of receiving 

and reviewing the proxy materials and 

voting, and revise the timeframe for 

delivering a Notice to shareholders 

when a soliciting person other than the 

issuer relies on the notice-only option. 

The amendments are designed to reduce 

regulatory impediments and thereby 

increase shareholder participation, 

improve implementation of the notice 

and access model, and enhance investor 

understanding of the operation of the 

notice and access model. These changes 

are intended to improve the efficiency 

and effectiveness of the proxy process. 

No commenters suggested, and we do 

not anticipate, any effect on competition 


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9080 Federal Register / Vol. 75, No. 38 / Friday, February 26, 2010 / Rules and Regulations 

69 17 CFR 240.0–10(a). 

70 17 CFR 270.0–10. 

71 17 CFR 240.0–10(c)(1). 

72 17 CFR 240.17a–5(d). 

73These numbers are based on a review by the 

Commission’s Office of Economic Analysis of 2005 

FOCUS Report filings reflecting registered brokerdealers. This number does not include brokerdealers that are delinquent in FOCUS Report filings. 

74 13 CFR 121.201. 

75We note that while not subject to the 

amendments, the amendments may affect these 

entities because they are intermediaries that are 

required under the Commission’s proxy rules to 

forward proxy materials, including the Notice or 

any explanatory materials, on to shareholders who 

beneficially own their shares through the 

intermediaries. An intermediary is not required to 

forward proxy materials to beneficial owners unless 

the issuer or other soliciting person provides 

assurance of reimbursement of the intermediary’s 

reasonable expenses incurred in connection with 

forwarding those materials. 17 CFR 240.14b– 

2(c)(2)(i). Therefore, any costs imposed on 

intermediaries by the rules will be borne by the 

issuer or other soliciting person. 

or capital formation as a result of these 

revisions. 

VI. Final Regulatory Flexibility 

Analysis 

This Final Regulatory Flexibility 

Analysis has been prepared in 

accordance with 5 U.S.C. 603. It relates 

to revisions to Exchange Act Rule 14a– 

16 and related changes that would 

permit some additional flexibility in 

designing the Notice, permit issuers and 

other soliciting persons to better 

communicate with shareholders by 

accompanying the Notice with 

explanatory materials regarding the 

reasons for the use of the notice and 

access rules and the process of receiving 

and reviewing the proxy materials and 

voting, and revise the timeframe for 

delivering a Notice to shareholders 

when a soliciting person other than the 

issuer relies on the notice-only option. 

An Initial Regulatory Flexibility 

Analysis (IRFA) was prepared in 

accordance with the Regulatory 

Flexibility Act in conjunction with the 

Proposing Release. The Proposing 

Release included, and solicited 

comment on, the IRFA. 

A. Reasons for, and Objectives of, the 

Amendments 

The amendments are designed to 

improve implementation of the notice 

and access model. Based on our 

monitoring of the effects of the notice 

and access model on the proxy 

solicitation process and the experiences 

that issuers and shareholders have had 

with the notice and access model to 

date, we believe that these revisions will 

improve the operation of the model 

without adversely affecting soliciting 

persons’ or shareholders’ abilities to 

participate effectively in the proxy 

process. 

Improved notice design and 

shareholder education should help to 

mitigate the difference in shareholder 

participation in the proxy voting 

process observed in the use of the notice 

and access model to the extent the 

difference was caused by the restrictions 

in our regulations. The amendment to 

the timing requirements for soliciting 

persons other than the issuer to file their 

preliminary proxy statements is 

designed to better enable soliciting 

persons other than the issuer to use the 

notice-only option. 

B. Significant Issues Raised by 

Commenters 

We did not receive comments 

specifically addressing the impact of the 

proposed amendments on small entities. 

C. Small Entities Subject to the 

Amendments 

The amendments affect issuers that 

are small entities. Exchange Act Rule 

0–10(a) 69 defines an issuer to be a 

‘‘small business’’ or ‘‘small organization’’ 

for purposes of the Regulatory 

Flexibility Act if it had total assets of $5 

million or less on the last day of its most 

recent fiscal year. We estimate that there 

are approximately 1,100 public 

companies, other than investment 

companies, that may be considered 

small entities. 

For purposes of the Regulatory 

Flexibility Act, an investment company 

is a small entity if it, together with other 

investment companies in the same 

group of related investment companies, 

has net assets of $50 million or less as 

of the end of its most recent fiscal 

year.70 Approximately 168 registered 

investment companies meet this 

definition. Moreover, approximately 33 

business development companies may 

be considered small entities. 

Paragraph (c)(1) of Rule 0–10 under 

the Exchange Act 71 states that the term 

‘‘small business’’ or ‘‘small organization,’’ 

when referring to a broker-dealer, means 

a broker or dealer that had total capital 

(net worth plus subordinated liabilities) 

of less than $500,000 on the date in the 

prior fiscal year as of which its audited 

financial statements were prepared 

pursuant to Exchange Act Rule 17a– 

5(d); 72 and is not affiliated with any 

person (other than a natural person) that 

is not a small business or small 

organization. The Commission has 

estimated that there were approximately 

910 broker-dealers that qualified as 

small entities as defined above.73 Small 

Business Administration regulations 

define ‘‘small entities’’ to include banks 

and savings associations with total 

assets of $165 million or less.74 The 

Commission estimates that the 

amendments might apply to 

approximately 9,475 banks, 

approximately 5,816 of which could be 

considered small banks with assets of 

$165 million or less.75

D. Reporting, Recordkeeping and Other 

Compliance Requirements 

The amendments revise the timeframe 

for delivering a Notice to shareholders 

when a soliciting person other than the 

issuer relies on the notice-only option, 

require clarification that the Notice is 

not a form for voting and permit, but do 

not require, issuers or other soliciting 

persons to include additional, 

explanatory material in their Notice. 

E. Agency Action To Minimize Effect on 

Small Entities 

The purpose of the amendments is to 

improve the implementation of the 

notice and access model based on our 

experience with the model to date. The 

amendments are intended to improve 

the operation of the notice and access 

model by providing additional 

flexibility in designing the Notice, 

permitting issuers and other soliciting 

persons to better communicate with 

shareholders by accompanying the 

Notice with explanatory materials 

regarding the reasons for the use of the 

notice and access rules and the process 

of receiving and reviewing the proxy 

materials and voting, and revising the 

timeframe for delivering a Notice to 

shareholders when a soliciting person 

other than the issuer relies on the 

notice-only option. 

We considered the use of performance 

standards rather than design standards 

in the amendments. The amendments 

contain both performance standards and 

design standards. We are revising 

existing design standards, such as the 

deadline applicable to soliciting persons 

other than the issuer. However, we are 

imposing performance standards to 

provide issuers, other soliciting persons 

and intermediaries with the flexibility 

to devise the means through which they 

can comply with such standards. For 

example, the amendments regarding 

explanatory materials do not dictate 

wording of such information, but allow 

flexibility in how to communicate the 

information. 

We considered different compliance 

standards for the small entities that will 

be affected by the amendments. In the 

Proposing Release, we solicited 

comment regarding the possibility of 

different standards for small entities. 

We did not receive comment on this 

particular issue. We are not aware of 


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any different standards that would be 

consistent with the purposes of the 

amendments. 

VII. Statutory Authority and Text of the 

Amendments 

The amendments described in this 

release are being adopted under the 

authority set forth in Sections 6, 7, 10, 

and 19 of the Securities Act of 1933, as 

amended, Sections 3(b), 13, 14, 15, and 

23(a) of the Securities Exchange Act of 

1934, as amended, and Sections 8, 20(a), 

24(a), 24(g), 30, and 38 of the 

Investment Company Act of 1940, as 

amended. 

List of Subjects in 17 CFR Parts 230 and 

240 

Reporting and recordkeeping 

requirements, Securities. 

■ For the reasons set out in the 

preamble, the Commission amends Title 

17, Chapter II of the Code of Federal 

Regulation as follows. 

PART 230—GENERAL RULES AND 

REGULATIONS, SECURITIES ACT OF 

1933 

■ 1. The authority citation for Part 230 

continues to read in part as follows: 

Authority: 15 U.S.C. 77b, 77c, 77d, 77f, 

77g, 77h, 77j, 77r, 77s, 77z–3, 77sss, 78c, 78d, 

78j, 78l, 78m, 78n, 78o, 78t, 78w, 78ll(d), 

78mm, 80a–8, 80a–24, 80a–28, 80a–29, 80a– 

30, and 80a–37, unless otherwise noted. 

* * * * * 

■ 2. Amend § 230.498 by revising 

paragraph (f)(2) to read as follows: 

§ 230.498 Summary Prospectuses for 

open-end management investment 

companies. 

* * * * * 

(f) * * * 

(2) Greater prominence. If paragraph 

(c) or (d) of this section is relied on with 

respect to a Fund, the Fund’s Summary 

Prospectus shall be given greater 

prominence than any materials that 

accompany the Fund’s Summary 

Prospectus, with the exception of other 

Summary Prospectuses, Statutory 

Prospectuses, or a Notice of Internet 

Availability of Proxy Materials under 

§ 240.14a–16 of this chapter. 

* * * * * 

PART 240—GENERAL RULES AND 

REGULATIONS, SECURITIES 

EXCHANGE ACT OF 1934 

■ 3. The general authority citation for 

Part 240 is revised to read as follows: 

Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 

77s, 77z–2, 77z–3, 77eee, 77ggg, 77nnn, 

77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 78j, 

78j–1, 78k, 78k–1, 78l, 78m, 78n, 78o, 78p, 

78q, 78s, 78u–5, 78w, 78x, 78ll, 78mm, 80a– 

20, 80a–23, 80a–29, 80a–37, 80b–3, 80b–4, 

80b–11, and 7201 et seq.; and 18 U.S.C. 1350 

and 12 U.S.C. 5221(e)(3), unless otherwise 

noted. 

* * * * * 

■ 4. Amend § 240.14a–16 by: 

■ a. Revising paragraph (d)(1). 

■ b. Redesignating paragraphs (d)(2) 

through (d)(8) as paragraphs (d)(5) 

through (d)(11); 

■ c. Adding new paragraphs (d)(2) 

through (d)(4); 

■ d. Removing the word ‘‘and’’ at the 

end of paragraph (f)(2)(ii); 

■ e. Revising paragraph (f)(2)(iii); 

■ f. Adding paragraph (f)(2)(iv); 

■ g. Revising paragraph (l)(2)(ii); 

■ h. Revising paragraph (n)(4)(i); and 

■ i. In paragraph (n)(4)(iii) removing the 

reference to ‘‘(d)(7)’’ and adding in its 

place ‘‘(d)(10)’’. 

The revisions and additions read as 

follows: 

§ 240.14a–16 Internet availability of proxy 

materials. 

* * * * * 

(d) * * * 

(1) A prominent legend in bold-face 

type that states ‘‘Important Notice 

Regarding the Availability of Proxy 

Materials for the Shareholder Meeting 

To Be Held on [insert meeting date]’’; 

(2) An indication that the 

communication is not a form for voting 

and presents only an overview of the 

more complete proxy materials, which 

contain important information and are 

available on the Internet or by mail, and 

encouraging a security holder to access 

and review the proxy materials before 

voting; 

(3) The Internet Web site address 

where the proxy materials are available; 

(4) Instructions regarding how a 

security holder may request a paper or 

e-mail copy of the proxy materials at no 

charge, including the date by which 

they should make the request to 

facilitate timely delivery, and an 

indication that they will not otherwise 

receive a paper or e-mail copy; 

* * * * * 

(f) * * * 

(2) * * * 

(iii) In the case of an investment 

company registered under the 

Investment Company Act of 1940, the 

company’s prospectus, a summary 

prospectus that satisfies the 

requirements of § 230.498(b) of this 

chapter, or a report that is required to 

be transmitted to stockholders by 

section 30(e) of the Investment 

Company Act (15 U.S.C. 80a–29(e)) and 

the rules thereunder; and 

(iv) An explanation of the reasons for 

a registrant’s use of the rules detailed in 

this section and the process of receiving 

and reviewing the proxy materials and 

voting as detailed in this section. 

* * * * * 

(l) * * * 

(2) * * * 

(ii) The date on which it files its 

definitive proxy statement with the 

Commission, provided its preliminary 

proxy statement is filed no later than 10 

calendar days after the date that the 

registrant files its definitive proxy 

statement. 

* * * * * 

(n) * * * 

(4) * * * 

(i) Instructions regarding the nature of 

the communication pursuant to 

paragraph (d)(2) of this section; 

* * * * * 

By the Commission. 

Dated: February 22, 2010. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–3891 Filed 2–25–10; 8:45 am] 

BILLING CODE 8011–01–P 


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