56862 Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Proposed Rules 

Comments Due Date 

(a) The Federal Aviation Administration 

(FAA) must receive comments on this AD 

action by November 14, 2005. 

Affected ADs 

(b) Inspections specified in this AD may be 

considered an alternative method of 

compliance (AMOC) for certain requirements 

of AD 2004–07–22, as specified in paragraph 

(i)(2) of this AD. 

Applicability 

(c) This AD applies to all Boeing Model 

747–200F, 747–200C, 747–400, 747–400D, 

and 747–400F series airplanes; certificated in 

any category. 

Unsafe Condition 

(d) This AD was prompted by fatigue tests 

and analysis that identified areas of the 

fuselage where fatigue cracks can occur. We 

are issuing this AD to prevent loss of the 

structural integrity of the fuselage, which 

could result in rapid depressurization of the 

airplane. 

Compliance 

(e) You are responsible for having the 

actions required by this AD performed within 

the compliance times specified, unless the 

actions have already been done. 

Inspections 

(f) Except as required/provided by 

paragraphs (g) and (h) of this AD: Do initial 

and repetitive inspections for fuselage cracks 

using applicable internal and external 

detailed inspection methods, and repair all 

cracks, by doing all the actions specified in 

the Accomplishment Instructions of Boeing 

Alert Service Bulletin 747–53A2500, dated 

December 21, 2004. Do the initial and 

repetitive inspections at the times specified 

in paragraph 1.E. of the service bulletin. 

Repair any crack before further flight after 

detection. 

Exceptions to Service Bulletin Procedures 

(g) If any crack is found during any 

inspection required by this AD, and the 

bulletin specifies to contact Boeing for 

appropriate action: Before further flight, 

repair the crack according to a method 

approved by the Manager, Seattle Aircraft 

Certification Office (ACO), FAA; or according 

to data meeting the certification basis of the 

airplane approved by an Authorized 

Representative for the Boeing Delegation 

Option Authorization Organization who has 

been authorized by the Manager, Seattle 

ACO, to make those findings. For a repair 

method to be approved, the repair must meet 

the certification basis of the airplane, and the 

approval must specifically reference this AD. 

(h) Where the service bulletin specifies a 

compliance time after the issuance of the 

service bulletin, this AD requires compliance 

within the specified compliance time after 

the effective date of this AD. 

AMOCs 

(i)(1) The Manager, Seattle Aircraft 

Certification Office (ACO), FAA, has the 

authority to approve AMOCs for this AD, if 

requested in accordance with the procedures 

found in 14 CFR 39.19. 

(2) Accomplishment of the inspections 

specified in this AD is considered an AMOC 

for the applicable requirements of paragraphs 

(c) and (d) of AD 2004–07–22, amendment 

39–13566, under the following conditions: 

(i) The actions must be done within the 

compliance times specified in AD 2004–07–

22. The initial inspection must be done at the 

times specified in paragraph (d) of AD 2004–

07–22, and the inspections must be repeated 

within the intervals specified in paragraph (f) 

of this AD. 

(ii) The AMOC applies only to the areas of 

Supplemental Structural Inspection 

Document D6–35022, Revision G, that are 

specified in Boeing Alert Service Bulletin 

747–53A2500, dated December 21, 2004. 

(3) An AMOC that provides an acceptable 

level of safety may be used for any repair 

required by this AD, if it is approved by an 

Authorized Representative for the Boeing 

Delegation Option Authorization 

Organization who has been authorized by the 

Manager, Seattle ACO, to make those 

findings. For a repair method to be approved, 

the repair must meet the certification basis of 

the airplane, and the approval must 

specifically refer to this AD. 

(4) Before using any AMOC approved in 

accordance with § 39.19 on any airplane to 

which the AMOC applies, notify the 

appropriate principal inspector in the FAA 

Flight Standards Certificate Holding District 

Office. 

Issued in Renton, Washington, on 

September 16, 2005. 

Ali Bahrami, 

Manager, Transport Airplane Directorate, 

Aircraft Certification Service. 

[FR Doc. 05–19239 Filed 9–28–05; 8:45 am] 

BILLING CODE 4910–13–P 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Parts 210, 229, 240 and 249 

[Release Nos. 33–8617; 34–52491; File No. 

S7–08–05] 

RIN 3235–AJ29 

Revisions to Accelerated Filer 

Definition and Accelerated Deadlines 

for Filing Periodic Reports 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Proposed rule. 

SUMMARY: We are proposing to modify 

the periodic report filing deadlines so 

that only the largest accelerated filers 

(those with a market value of 

outstanding voting and non-voting 

common equity held by non-affiliates of 

$700 million or more) become subject to 

the final phase-in of the accelerated 

filing transition schedule that will 

require annual reports on Form 10–K to 

be filed within 60 days after fiscal year 

end. Under our proposed amendments, 

however, these companies would 

continue to file their quarterly reports 

on Form 10–Q under the current 40-day 

deadline, rather than the 35-day 

deadline that was scheduled to apply to 

quarterly reports filed next year. Other 

accelerated filers would continue to file 

both their annual and quarterly reports 

under current deadlines—75 days after 

fiscal year end for annual reports on 

Form 10–K and 40 days after quarter 

end for quarterly reports on Form 10–Q. 

We also are proposing to revise the 

definition of the term ‘‘accelerated filer’’

to permit an accelerated filer that has 

voting and non-voting common equity 

held by non-affiliates of less than $25 

million to exit accelerated filer status 

promptly and begin filing its annual and 

quarterly reports on a non-accelerated 

filer basis. Finally, the proposed 

amendments would permit a large 

accelerated filer that has voting and 

non-voting common equity held by nonaffiliates of less than $75 million to 

promptly exit large accelerated filer 

status. 

DATES: Comments should be received on 

or before October 31, 2005. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form http://www.sec.gov/ 

rules/proposed.shtml; or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number S7–08–05 on the subject line; 

or 

• Use the Federal eRulemaking Portal 

(http://www.regulations.gov). Follow the 

instructions for submitting comments. 

Paper Comments 

• Send paper comments in triplicate 

to Jonathan G. Katz, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE, Washington, DC 

20549–9303. 

All submissions should refer to File 

Number S7–08–05. This file number 

should be included on the subject line 

if e-mail is used. To help us process and 

review your comments more efficiently, 

please use only one method. The 

Commission will post all comments on 

the Commission’s Internet Web site 

(http://www.sec.gov/rules/ 

proposed.shtml). Comments will also be 

available for public inspection and 

copying in the Commission’s Public 

Reference Room, 100 F Street, NE, 

Washington, DC 20549. All comments 

received will be posted without change; 

we do not edit personal identifying 

information from submissions. You 

Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Proposed Rules 56863 

1 17 CFR 210.3–01. 

2 17 CFR 210.3–09. 

3 17 CFR 210.3–12. 

4 17 CFR 210.1–01 et seq. 

5 17 CFR 229.101. 

6 17 CFR 229.10 et seq. 

7 17 CFR 249.308a; 17 CFR 249.310; and 17 CFR 

249.220f. 

8 15 U.S.C. 78a et seq. 

9 17 CFR 240.12b–2. 

10 17 CFR 240.13a–10. 

11 17 CFR 240.15d–10. 

12See Release No. 33–8128 (Sept. 5, 2002) [67 FR 

58480]. 

13The $75 million public float threshold in the 

accelerated filer definition, though not the date of 

determination, is the same as the public float 

eligibility requirement for registration of a primary 

offering for cash on Form S–3 or Form F–3. 

14For purposes of the accelerated filer definition, 

the issuer must compute the aggregate market value 

of its outstanding voting and non-voting common 

equity by use of the price at which the common 

equity was last sold, or the average of the bid and 

asked prices of such common equity, in the 

principal market for such common equity, as of the 

last business day of its most recently completed 

second fiscal quarter. 

15 15 U.S.C. 78m(a) or 78o(d). 

16 17 CFR 249.310b. 

17 17 CFR 249.308b. 

18While the accelerated filer definition does not 

by its terms exclude foreign private issuers, to date, 

the filing deadlines for accelerated filers have had 

application only with respect to foreign private 

issuers that file annual reports on Form 10–K and 

quarterly reports on Form 10–Q. In another action 

that the Commission takes today to defer the 

compliance date for our rules implementing 

application of Section 404 of the Sarbanes-Oxley 

Act of 2002 [15 U.S.C. 7262] for an additional year 

for certain issuers, until fiscal years commencing on 

or after July 15, 2007, the deferral would extend to 

foreign private issuers that are not accelerated filers. 

19See Exchange Act Rule 12b–2. See also Item 

10(a)(2) of Regulation S–B [17 CFR 228.10(a)(2)] for 

the conditions for entering and exiting the small 

business reporting system. A reporting company 

that is not a small business issuer must meet the 

definition of a small business issuer at the end of 

two consecutive fiscal years before it becomes 

eligible to file Forms 10–KSB and 10–QSB. The 

term ‘‘small business issuer’’ is defined in Rule 

12b–2 as a U.S. or Canadian issuer that is not an 

investment company and that has less than $25 

million in revenues and public float. If the issuer 

is a majority-owned subsidiary, it meets the 

definition of a small business issuer only if the 

parent corporation is also a small business issuer. 

20See Release No. 33–8128. 

21 Id. 

22 Id. Accelerated filers are required to disclose in 

their annual reports where investors can obtain 

access to their filings, including whether the 

company provides access to its Form 10–K, 10–Q 

and 8–K reports on its Internet Web site, free of 

charge, as soon as reasonably practicable after those 

reports are electronically filed with, or furnished to, 

the Commission. See Item 101(e)(4) of Regulation 

S–K [17 CFR 229.101(e)(4)]. 

23See Exchange Act Rules 13a–15 and 15d–15 [17 

CFR 240.13a–15 and 15d–15] and Item 308 of 

Regulations S–K and S–B [17 CFR 229.308 and 

228.308], as adopted in Release No. 33–8238 (June 

5, 2003) [68 FR 36636]. 

24See note 18 in Release No. 33–8477 (Aug. 25, 

2004) [69 FR 53550]. 

should submit only information that 

you wish to make available publicly. 

FOR FURTHER INFORMATION CONTACT: 

Katherine W. Hsu, Special Counsel, 

Office of Rulemaking, at (202) 551–

3430, Division of Corporation Finance, 

U.S. Securities and Exchange 

Commission, 100 F Street, NE, 

Washington, DC 20549–3628. 

SUPPLEMENTARY INFORMATION: We are 

proposing amendments to Rules 3–01,1

3–09 2 and 3–12 3 of Regulation S–X,4

Item 101 5 of Regulation S–K,6 Forms 

10–Q, 10–K and 20–F 7 under the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’) 8 and Exchange Act 

Rules 12b–2,9 13a–10 10 and 15d–10.11

I. Background 

A. Initial Adoption of Accelerated Filing 

Requirements 

On September 5, 2002, we adopted 

new rules requiring larger public 

companies filing annual reports on 

Form 10–K and quarterly reports on 

Form 10–Q to file these reports on an 

accelerated basis.12 We adopted the 

accelerated filing requirements as part 

of a series of steps to modernize and 

improve the usefulness of the periodic 

reporting system. The term ‘‘accelerated 

filer,’’ which is used to describe these 

issuers, is defined in Exchange Act Rule 

12b-2 and applies to an issuer once it 

first meets all of the following 

conditions as of the end of its fiscal 

year: 

• The issuer has an aggregate market 

value of voting and non-voting common 

equity held by non-affiliates of the 

issuer (referred to as ‘‘public float’’) of 

$75 million or more,13 as of the last 

business day of the issuer’s most 

recently completed second fiscal 

quarter;14

• The issuer has been subject to the 

reporting requirements of Section 13(a) 

or 15(d) of the Exchange Act 15 for a 

period of at least 12 calendar months; 

• The issuer previously has filed at 

least one annual report; and 

• The issuer is not eligible to use 

Forms 10–KSB16 and 10–QSB17 for its 

annual and quarterly reports. 

The definition of an accelerated filer 

also contains specific requirements 

concerning the entry into, and exit from, 

accelerated filer status. These 

requirements provide that the 

determination of whether a nonaccelerated filer becomes an accelerated 

filer as of the end of its fiscal year 

governs the filing deadlines for the 

annual report on Form 10–K to be filed 

for that fiscal year, for the quarterly 

reports on Form 10–Q to be filed for the 

subsequent fiscal year and for all such 

annual and quarterly reports to be filed 

thereafter.18 Currently, once a company 

becomes an accelerated filer, it remains 

an accelerated filer unless and until it 

subsequently becomes eligible to use 

Forms 10–KSB and 10–QSB for its 

annual and quarterly reports.19

We originally determined to phase-in 

the accelerated filing deadlines over a 

three-year period in an effort to balance 

the market’s demand for more timely 

information with the time that issuers 

need to prepare accurate information 

without undue burden.20 In the 

accelerated filer adopting release, we 

anticipated that a gradual transition 

period would allow issuers to adjust 

their reporting schedules and develop 

efficiencies to ensure that the quality 

and accuracy of their reported 

information would not be 

compromised.21

Year one of the phase-in period began 

for accelerated filers with fiscal years 

ending on or after December 15, 2002. 

During year one, the Form 10–K annual 

report deadline remained at 90 days 

after fiscal year end, and the Form 10–

Q quarterly report deadline remained at 

45 days after quarter end, but 

accelerated filers became subject to new 

disclosure requirements concerning 

Web site access to their Exchange Act 

reports.22 In year two, the deadline for 

annual reports on Form 10–K filed for 

fiscal years ending on or after December 

15, 2003 was accelerated to 75 days and 

the deadline for the three subsequently 

filed quarterly reports on Form 10–Q 

was accelerated to 40 days. 

In year three, the Form 10–K annual 

report deadline was to become further 

accelerated to 60 days for reports filed 

for fiscal years ending on or after 

December 15, 2004, and the deadline for 

the three subsequently filed quarterly 

reports on Form 10–Q was to accelerate 

to 35 days. This would have completed 

the phase-in for all accelerated filers, 

with the 60-day and 35-day deadlines 

remaining in place for Form 10–K and 

Form 10–Q, respectively, for all 

subsequent periods. 

B. One-Year Postponement of the Final 

Phase-In Period for the Accelerated 

Periodic Report Deadlines 

However, in year two of the phase-in 

period, several issuers and auditors 

expressed concern over their ability to 

perform the work necessary to file 

reports timely and, in particular, to 

comply with the Commission’s new 

internal control over financial reporting 

requirements 23 mandated by Section 

404 of the Sarbanes-Oxley Act of 2002 

at the same time that periodic report 

deadlines were scheduled to be further 

accelerated.24 The Commission acted in 

response to the concerns voiced by 

issuers and auditors by providing 

56864 Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Proposed Rules 

25Release No. 33–8392 (Feb. 24, 2004) [69 FR 

9722]. 26The Commission organized the Advisory 

Committee on March 23, 2005 to examine the 

impact of the Sarbanes-Oxley Act and other federal 

securities laws on smaller public companies. 27As discussed in Section II.D of this release, we 

are proposing to modify the existing Rule 12b–2 

definition of ‘‘accelerated filer’’ to refer to the 

company’s ‘‘aggregate worldwide market value’’

rather than ‘‘aggregate market value.’’

28See paragraph 2 of the proposed Exchange Act 

Rule 12b–2 definition of ‘‘accelerated filer and large 

accelerated filer.’’ 29See proposed amendments to Exchange Act 

Forms 10–K [17 CFR 249.310] and 10–Q [17 CFR 

249.308a]. 30See paragraph 3(ii) of the proposed Exchange 

Act Rule 12b–2 definition of ‘‘accelerated filer and 

large accelerated filer.’’ 31See paragraph 3(iii) of the proposed Exchange 

Act Rule 12b–2 definition of ‘‘accelerated filer and 

large accelerated filer.’’

32See paragraph 2 of the proposed Exchange Act 

Rule 12b–2 of ‘‘accelerated filer and large 

accelerated filer.’’ 33As a related change, we propose to re-define an 

accelerated filer as an issuer with an aggregate 

market value of voting and non-voting common 

equity held by non-affiliates of $75 million or more 

and less than $700 million. See paragraph (1)(i) of 

the proposed Exchange Act Rule 12b-2 definition of 

‘‘accelerated filer and large accelerated filer.’’ 34Release No. 33–8591 (July 19, 2005) [70 FR 

44722]. 35 In addition to having different dates of 

determination, the ‘‘large accelerated filer’’ and 

‘‘well-known seasoned issuer’’ definitions are 

different in other respects. In particular, Securities 

Act Rule 405 [17 CFR 230.405] defines a wellknown seasoned issuer as one that meets the 

following requirements: 

• the registrant requirements of Form S–3 [17 

CFR 239.13] or F–3 [17 CFR 239.33]; 

• the issuer either must have outstanding a 

worldwide market value of its outstanding voting 

and non-voting common equity held by nonaffiliates of $700 million or more, or must have 

issued at least $1 billion aggregate principal amount 

of non-convertible securities, other than common 

equity, in registered offerings during the past three 

years and register only non-convertible securities; 

and 

additional time and opportunity for 

accelerated filers and their auditors to 

focus on complying with the new 

internal control reporting requirements. 

First, in February 2004, we extended the 

Section 404 rule compliance dates so 

that an accelerated filer had to begin 

complying with the internal control 

reporting requirements for its first fiscal 

year ending on or after November 15, 

2004, rather than its first fiscal year 

ending on or after June 15, 2004.25

In November 2004, we postponed for 

one year the final phase-in period for 

acceleration of the annual and quarterly 

report filing deadlines on Forms 10–K 

and 10–Q. The amendments permitted 

an accelerated filer’s annual report on 

Form 10–K for a fiscal year ending on 

or after December 15, 2004, but before 

December 15, 2005, to be filed within 75 

days, rather than 60 days, after fiscal 

year end and the three subsequently 

filed quarterly reports on Form 10–Q to 

be filed within 40 days, rather than 35 

days, after the end of a fiscal quarter. 

Under the amended accelerated phasein schedule that currently governs the 

periodic report filing deadlines, annual 

reports on Form 10–K filed by 

accelerated filers for fiscal years ending 

on or after December 15, 2005 will be 

due within 60 days after fiscal year end 

and quarterly reports on Form 10–Q will 

be due within 35 days after fiscal 

quarter end, thereby completing the 

final phase-in period. 

II. Discussion of Proposed Amendments 

Based on various comments from 

issuers and auditors, and a recent 

recommendation from the SEC Advisory 

Committee on Smaller Public 

Companies regarding the accelerated 

filing deadlines,26 we are proposing to 

amend the definition of accelerated filer 

and to further amend the accelerated 

filing deadlines. We are proposing to 

amend the accelerated filer rules to: 

• Create a new category of accelerated 

filer, the ‘‘large accelerated filer,’’ for 

issuers with an aggregate worldwide 27

market value of voting and non-voting 

common equity held by non-affiliates of 

the issuer of $700 million or more, as of 

the last business day of the issuer’s most 

recently completed second fiscal 

quarter; 28

• Amend the accelerated filing 

deadlines so that the 60-day Form 10–

K annual report deadline would apply 

only to the proposed new large 

accelerated filers. The Form 10–Q 

quarterly report filing deadline for large 

accelerated filers would remain at 40 

days with no further reduction provided 

in our rules. Periodic report deadlines 

for other accelerated filers would 

remain at 75 days for annual reports on 

Form 10–K and 40 days for quarterly 

reports on Form 10–Q, again with no 

further reduction provided in our 

rules; 29

• Allow an accelerated filer with less 

than a $25 million aggregate worldwide 

market value of voting and non-voting 

common equity held by non-affiliates of 

the issuer, as of the last business day of 

the issuer’s most recently completed 

second fiscal quarter, to exit accelerated 

filer status without a second year’s 

determination or other delay; 30 and • Allow a large accelerated filer with 

less than a $75 million aggregate 

worldwide market value of voting and 

non-voting common equity held by nonaffiliates of the issuer, as of the last 

business day of the issuer’s most 

recently completed second fiscal 

quarter, to exit large accelerated filer 

status.31

We believe that the proposed 

deadlines would strike the appropriate 

balance between the timeliness and 

accessibility of Exchange Act reports to 

investors and to the financial markets 

and the need of companies and their 

auditors to conduct, without undue 

cost, high-quality and thorough 

assessments and audits of the financial 

statements contained in the reports. The deadline for filing an annual 

report on Form 20–F has not been 

accelerated and we are not proposing to 

do so in this release. However, the 

current definition of accelerated filer 

and the proposed definitions of 

accelerated filer and large accelerated 

filer do not exclude companies that 

qualify as foreign private issuers. As a 

result, a foreign private issuer that 

voluntarily files on Forms 10–K and 10–

Q is required to determine whether it is 

an accelerated filer or large accelerated 

filer and, if so, must comply with the 

applicable deadlines. A foreign private 

issuer that loses its status as such and 

is therefore required to file reports on 

Forms 10–K and 10–Q must do likewise. 

A. Large Accelerated Filers 

We are proposing amendments to the 

Exchange Act Rule 12b–2 definition of 

‘‘accelerated filer’’ to create a new 

category of accelerated filers to be 

designated as ‘‘large accelerated 

filers.’’ 32 Under the proposed 

amendments, an issuer would become a 

large accelerated filer once it meets the 

following conditions for the first time at 

its fiscal year end: 

• The issuer had an aggregate 

worldwide market value of voting and 

non-voting common equity held by its 

non-affiliates of $700 million or more, 

as of the last business day of the issuer’s 

most recently completed second fiscal 

quarter; 33

• The issuer has been subject to the 

reporting requirements of Exchange Act 

Section 13(a) or 15(d) for a period of at 

least 12 calendar months; 

• The issuer has filed at least one 

annual report pursuant to Section 13(a) 

or 15(d); and 

• The issuer is not eligible to use 

Forms 10–KSB and 10–QSB for its 

annual and quarterly reports. 

The proposed $700 million public 

float threshold in the large accelerated 

filer definition, though not the time of 

determination, is the same as the public 

float eligibility requirement that we 

used in our recently adopted Securities 

Offering Reform final rules 34 to 

establish a new category of issuer 

defined as a ‘‘well-known seasoned 

issuer.’’ 35

Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Proposed Rules 56865 

• the issuer cannot be a registered investment 

company, asset-backed issuer or a type of issuer 

that falls within the Rule 405 definition of an 

‘‘ineligible issuer.’’

As a result, for example, some debt-only issuers 

may become well-known seasoned issuers while 

only issuers that have registered a class of equity 

security under Section 12 of the Exchange Act 

could become subject to the large accelerated filer 

definition. In addition, there could be some large 

accelerated filers that are ineligible issuers and 

therefore cannot become well-known seasoned 

issuers. For example, a large accelerated filer that 

is not current with respect to its periodic report 

filing obligations, or that was a blank check, shell 

company (other than a business combination 

related shell company) or an issuer of penny stock 

as defined in Exchange Act Rule 3a51–1 during the 

three years before the determination date specified 

in the ineligible issuer definition, would not be 

eligible to become a well-known seasoned issuer. 

36See the discussion in Section II.A.1 in Release 

No. 33–8591. We previously used the $700 million 

cut-off as the threshold differentiating the largest 

companies with the most active market following in 

our order granting an exemption under Section 36 

of the Exchange Act [15 U.S.C. 78mm(a)] to 

accelerated filers with less than $700 million from 

filing their management’s annual report on internal 

control over financial reporting and the related 

attestation report of the registered public 

accounting firm and providing them an additional 

45 days to timely file. Release No. 34–50754 (Nov. 

30, 2004) [69 FR 70291]. 

37See, e.g., letters from the American Institute of 

Certified Public Accountants, BDO Seidman LLP, 

Ernst & Young LLP, and KPMG LLP in response to 

Release No. 33–8501. 

38See SEC Press Release Nos. 2005–20 (Feb. 22, 

2005) and 2005–50 (Apr. 7, 2005). The roundtable 

was held April 13, 2005. See, e.g., testimony from 

Bob Miles of Washington Mutual and letters from 

Ernst & Young LLP April 4, 2005, Glass Lewis & Co. 

April 12, 2005 and Crowe Chizek and Company 

LLC, March 28, 2005. Materials related to the 

roundtable, including an archived broadcast of the 

roundtable are available on-line at http:// 

www.sec.gov/spotlight/soxcomp.htm. 

39See, e.g., letters from the American Institute of 

Certified Public Accountants, American Bankers 

Association, Arris Group, Inc., Baldwin & Lyons, 

Inc., Berry, Dunn, McNeil & Parker, R.G. Associates, 

Inc., Ernst & Young LLP, HealthSouth Corporation, 

Jones & Keller, P.C., KPMG LLP, Helen W. Melman, 

National Association of Real Estate Companies, 

New York State Bar Association, Perkins Coie LLP, 

Thacher Profitt & Wood, Triarc Companies, Inc., 

and Troutman Sanders LLP in response to Release 

No. 33–8089 (Apr. 12, 2002) [67 FR 19896]. 

40See, e.g., letters from the American Institute of 

Certified Public Accountants, Becker & Poliakoff, 

P.A., BDO Seidman, LLP, The Chubb Corporation, 

Deloitte & Touche LLP, Ernst & Young LLP, First 

Federal Bancshares of Arkansas, Federal Signal 

Corporation, Franklin Financial Services 

Corporation, MBNA Corporation, Pfizer Inc., 

Protective Life Corporation, and Spectrum Organic 

Products in response to Release No. 33–8477 (Aug. 

25, 2004) [69 FR 67392]. 

41See, e.g., letters from the American Institute of 

Certified Public Accountants, BDO Seidman LLP, 

Ernst & Young LLP, and KPMG LLP in response to 

Release No. 33–8501. 

42The Advisory Committee advocated that in 

implementing this recommendation, the 

Commission look to the Committee’s guidance in 

defining ‘‘smaller public company.’’ Materials 

related to the August 10, 2005 meeting held by the 

Commission’s Advisory Committee on Smaller 

Public Companies are available on-line at http:// 

www.sec.gov/info/smallbus/acspc.shtml. The 

Continued 

We believe that Exchange Act 

reporting companies with a public float 

of $700 million or more are more closely 

followed by the markets and securities 

analysts than other issuers. They 

accounted for approximately 95% of 

U.S. equity market capitalization in 

2004.36 By virtue of their size, the 

proposed large accelerated filers also are 

more likely than smaller companies to 

have a well-developed infrastructure 

and financial reporting resources to 

support further acceleration of the 

annual report deadline.37 Under the 

proposed amendments, large accelerated 

filers would become subject to Form 10–

K annual report deadlines that are more 

accelerated than the deadlines that 

would apply to all other filers, as 

explained in Section II.B. below. 

Currently, every company filing 

annual reports on Form 10–K and 

quarterly reports on Form 10–Q is 

required to check a box on the cover 

page of these reports to indicate whether 

or not it is an accelerated filer. As a 

conforming amendment, we propose to 

add a new check box to the cover page 

of Forms 10–K, 10–Q and 20–F so that 

a reporting company can indicate on 

these forms whether it is a large 

accelerated filer, an accelerated filer, or 

a non-accelerated filer. We also are 

proposing a conforming amendment to 

Item 101(c) of Regulation S–K which 

requires accelerated filers to disclose in 

their annual reports where investors can 

obtain access to their filings, including 

whether the company provides access to 

its Forms 10–K, 10–Q and 8–K reports 

on its Internet Web site, free of charge. 

The proposed amendment to this item 

references both accelerated filers and 

large accelerated filers. 

Request for Comment 

• Is it appropriate to create a new 

category of accelerated filers known as 

‘‘large accelerated filers?’’ Should we 

modify the proposed definition of ‘‘large 

accelerated filer’’ in any way? 

• Are differences between the 

Securities Act Rule 405 definition of 

‘‘well-known seasoned issuer’’ and the 

proposed Exchange Act Rule 12b–2 

definition of ‘‘large accelerated filer’’

appropriate? Would any problems be 

created by differences between the two 

definitions? 

• As proposed, an issuer would 

determine whether it must enter large 

accelerated filer status based on the 

aggregate worldwide market value of its 

outstanding voting and non-voting 

common equity as of the last business 

day of the issuer’s most recently 

completed second fiscal quarter. Is it 

appropriate to tie the determination of 

large accelerated filer status and 

accelerated filer status to the last 

business day of the issuer’s most 

recently completed second fiscal 

quarter? Should the determination be 

made over a longer period of time? 

B. Proposed Amendments to the 

Accelerated Filing Deadlines 

Under the current phase-in schedule 

and absent today’s proposed 

amendments, all accelerated filers 

would become subject to the final 

phase-in period that requires annual 

reports on Form 10–K for fiscal years 

ending on or after December 15, 2005 to 

be filed within 60 days after fiscal year 

end and subsequently filed quarterly 

reports on Form 10–Q to be filed within 

35 days after quarter end. After 

evaluating the discussions and 

comments provided at the 

Commission’s roundtable on internal 

control over financial reporting,38 and 

public comments on our initial 

accelerated filer release,39 temporary 

postponement release 40 and securities 

offering reform release,41 we are 

proposing to maintain the accelerated 

filing deadlines at the current 75 days 

for annual reports on Form 10–K for 

accelerated filers that are not large 

accelerated filers and to maintain the 

accelerated filer deadlines for all 

accelerated filers at the current 40 days 

for quarterly reports on Form 10–Q. 

While we are mindful of the 

incremental benefit that more timely 

accessibility to periodic reports would 

provide to investors, we believe that the 

burdens associated with an increased 

acceleration of the deadlines justify our 

proposal to subject only certain 

companies to the further acceleration. 

This proposal also is consistent with a 

recommendation adopted on August 10, 

2005 by the SEC Advisory Committee 

on Smaller Public Companies that 

smaller public companies not be subject 

to any further acceleration of due dates 

for annual and quarterly reports.42 If the 

56866 Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Proposed Rules 

Advisory Committee also recommended deferring 

compliance with the internal control over financial 

reporting requirements by companies that are not 

accelerated filers. 

43According to the Office of Economic Analysis, 

in the period from 1997 to 2004, issuers with a 

market capitalization in excess of $700 million that 

conducted offerings typically had an average of 12 

analysts following them prior to the offering and 

issuers with a market capitalization of between $75 

million and $200 million, in most cases, have 

between zero to five analysts following them with 

approximately 50% having zero to two analysts 

following them. Further analysis showed that 

issuers with a market capitalization in excess of 

$700 million had significantly higher average daily 

trading volumes. In addition, the data shows that 

issuers with a market capitalization in excess of 

$700 million accounted for over 90% of the 

proceeds from securities offerings over that period. 

44See, e.g., letters from The Committee on 

Corporate Reporting of Financial Executives 

International (July 20, 2005) and Stewart 

Information Services Corp (June 23, 2005). 

proposed deadlines are adopted, we 

intend to begin applying the revised 

deadlines with respect to Form 10–K 

annual reports for fiscal years ending on 

or after December 15, 2005. 

We continue to believe that the public 

float test is an appropriate measure of 

size and market interest, and that there 

is a significant difference between 

companies with a public float of $700 

million or more and other public 

companies.43 Based on the public 

comments that we have received and 

our staff’s analysis of the available data 

in connection with the Securities 

Offering Reform, we believe other 

accelerated filers with a public float 

below $700 million generally are not 

followed as closely by investors and 

analysts and have fewer resources to 

devote to regulatory compliance and 

financial reporting. We note, however, 

that most accelerated filers have been 

able to meet the current accelerated 

deadlines, although we are aware of the 

additional cost that meeting these 

deadlines has imposed on companies. In 

order to provide reporting companies 

with a public float between $75 million 

and $700 million with adequate time to 

prepare accurate and complete reports 

without imposing undue burden and 

expense, we propose to maintain the 

Form 10–K annual report deadline at 75 

days after fiscal year end and the Form 

10–Q quarterly report deadline at 40 

days after the quarter end for these 

companies. 

The proposed amendments also 

would allow large accelerated filers to 

continue filing their quarterly reports on 

Form 10–Q within 40 days after quarter 

end. Based on comments that we have 

received indicating that most 

accelerated filers find it significantly 

more difficult to comply with the 

accelerated quarterly report deadline 

than with the accelerated annual report 

deadline,44 we propose to maintain the 

Form 10–Q quarterly report deadline at 

40 days even for large accelerated filers. 

We are also proposing technical 

corrections to the codification of 

financial reporting policies to reflect 

these amendments. 

Therefore, the proposed periodic 

report filing deadlines would relate to 

the following three separate tiers of 

issuers and be of different lengths 

depending on the type of issuer: 

• Large accelerated filers would be 

required to file their annual reports on 

Form 10–K within 60 days after the end 

of the fiscal year and quarterly reports 

on Form 10–Q within 40 days after the 

end of the fiscal quarter; 

• Accelerated filers that are not large 

accelerated filers would be required to 

file their annual reports on Form 10–K 

within 75 days after the end of the fiscal 

year and quarterly reports on Form 10–

Q within 40 days after the end of the 

fiscal quarter; and 

• All issuers that are not accelerated 

filers would continue to be required to 

file their annual reports on Form 10–K 

within 90 days after the end of the fiscal 

year and quarterly reports on Form 10–

Q within 45 days after the end of the 

fiscal quarter. 

The following table compares the 

periodic reporting deadlines under the 

current rules with the deadlines under 

our proposed amendments: 

Category of filer 

Deadlines for reports beginning with 

the annual report for fiscal year ending 

on or after December 15, 2005 under 

the current rules Category of filer 

Deadlines for reports beginning with 

the annual report for fiscal year ending on or after December 15, 2005 

under the proposed rules 

10–K 

Deadline (days) 

10–Q 

Deadline (days) 

10–K 

Deadline (days) 

10–Q 

Deadline (days) 

Accelerated Filer ($75MM or 

more).

60 35 Large Accelerated Filer 

($700MM or more).

60 40 

Accelerated Filer (between 

$75MM and $700MM).

75 40 

Non-accelerated Filer (less 

than $75MM).

90 45 Non-accelerated Filer (less 

than $75MM).

90 45 

Request for Comment 

• Do the proposed three tiers of filing 

deadlines provide appropriate balance 

and structure within the periodic 

reporting system? Would an alternate 

structure for reporting deadlines be 

preferable? If so, what criteria should 

we use to determine the appropriate 

deadlines? 

• Should we change any of the filing 

deadlines for any category of issuer? 

• Would three tiers of filing deadlines 

cause confusion among investors 

regarding the due dates for companies’

periodic reports? Is it necessary to 

distinguish large accelerated filers from 

smaller accelerated filers if the only 

effect of the distinction is to require 

large accelerated filers to file their 

annual reports 15 days earlier than 

smaller accelerated filers? If there 

should be a uniform set of deadlines 

that would apply to all accelerated 

filers, what should those deadlines be? 

• Should we require large accelerated 

filers to file their quarterly reports 

within 35 days after quarter end, 

consistent with the deadline that is 

currently scheduled to be phased-in 

under existing requirements? 

• Is it appropriate to maintain the 

current 75 and 40-day filing deadlines 

for accelerated filers that are not large 

accelerated filers? Do the current 

deadlines achieve our goal of providing 

detailed reports to the public as quickly 

as possible without compromising the 

reliability and accuracy of the reports? 

• Would deadlines for accelerated 

filers and non-accelerated filers that are 

longer than the deadlines for large 

accelerated filers unduly disadvantage 

investors in companies that are not large 

accelerated filers? 

C. Exiting Accelerated Filer and Large 

Accelerated Filer Status 

We propose to amend the accelerated 

filer definition to allow an issuer to exit 

accelerated filer status at the end of the 

Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Proposed Rules 56867 

45For example, if an issuer meets the definition 

of accelerated filer at the end of its 2004 fiscal year, 

the issuer will file its 2004 annual report on an 

accelerated filer basis. However, in order to exit 

accelerated filer status, an accelerated filer must 

meet the definition of small business issuer and file 

on an accelerated filer basis at the end of its 2004 

and 2005 fiscal years before being allowed to file 

on a non-accelerated filer basis beginning with its 

first quarter Form 10–QSB in fiscal 2006. 

46See Item 10(a)(2)(v) of Regulation S–B [17 CFR 

228.10(a)(2)(v)]. 

47Based on data from the Center for Research in 

Securities Prices Database obtained by the Office of 

Economic Analysis, we estimate that 142 

companies met the accelerated filer definition on or 

after their fiscal years ended December 15, 2002 and 

then subsequently delisted their common stock or 

other common equity from a national securities 

exchange or Nasdaq during the 2003 calendar year. 

Of the 142 companies, we estimate that only four 

companies continued to have an Exchange Act 

reporting obligation with respect to another class of 

debt or non-common equity securities. It is our 

understanding that the data in CRSP does not 

include a complete list of common equity traded 

through the OTC Bulletin Board or Pink Sheets 

LLC, so our estimate may understate the actual 

number of companies that would be affected by our 

proposed revision to the accelerated filer definition. 

48See Release No. 33–8128. Stability of status 

helps avoid investor confusion and assures that 

issuers have sufficient notice to prepare their 

periodic disclosure on a timely basis. 

49See paragraph 3(ii) of the proposed Exchange 

Act Rule 12b–2 definition of ‘‘accelerated filer and 

large accelerated filer.’’

50Based on data from the Thomson Worldscope 

Global Database, we estimate that only 25 

companies had a public float of $75 million in 

2003, but less than $25 million in 2004. 

51The proposed amendment would allow 

reporting issuers that have lost their public float to 

be treated similarly to other Exchange Act reporting 

issuers that have never had a public float, such as 

issuer of publicly held debt securities. 

52See paragraph (3)(iii) of the proposed Exchange 

Act Rule 12b–2 definition of ‘‘accelerated filer and 

large accelerated filer.’’

fiscal year if the issuer’s aggregate 

market value of voting and non-voting 

common equity held by non-affiliates of 

the issuer falls below $25 million, as of 

the last day of the issuer’s second fiscal 

quarter. Under the current definition, an 

issuer that has become an accelerated 

filer remains one unless and until the 

issuer becomes eligible to use Forms 

10–KSB and 10–QSB for its annual and 

quarterly reports. 

Under requirements set forth in Item 

10(a)(2) of Regulation S–B, a reporting 

issuer that is not a small business issuer 

must meet the small business issuer 

definition at the end of two consecutive 

years before becoming eligible to use 

Forms 10–KSB and 10–QSB. The 

determination made by a reporting 

company at the end of the second 

consecutive fiscal year that it has 

become eligible to file on Forms 10–KSB 

and 10–QSB governs reports relating to 

the next fiscal year only. This requires 

a reporting issuer that first meets the 

small business issuer definition at the 

end of a fiscal year to wait two years 

from that point before it can begin to file 

its annual report on a non-accelerated 

filer basis.45

Thus, a previously reporting issuer 

will always enter the small business 

reporting system with a quarterly report 

filed on Form 10–QSB and must still file 

its annual report on Form 10–K for the 

fiscal year in which it first met the small 

business definition.46 This differs from 

the accelerated filer reporting system 

which requires new accelerated filers to 

always enter the system with the filing 

of an annual report rather than a 

quarterly report. 

In addition, there have been 

circumstances under the current 

accelerated filer definition where a 

company that no longer has common 

equity securities outstanding and 

therefore no longer has a duty to file 

periodic reports with respect to these 

securities, but continues to have a 

reporting obligation for another security, 

is required to remain an accelerated filer 

for two years. While the instances in 

which a company no longer would have 

publicly held common equity but still 

be subject to an Exchange Act reporting 

obligation with respect to another class 

of non-common equity security are 

likely to occur infrequently, the 

circumstance may occasionally occur in 

connection with a stock merger or 

leveraged buyout structured as a cash 

merger or recapitalization.47 These 

companies remain subject to the 

requirement to file their periodic reports 

on an accelerated filer basis despite the 

fact that they would not have been 

required to initially become an 

accelerated filer if they had only a class 

of debt securities registered under the 

Exchange Act. 

In the initial accelerated filer adopting 

release, we expressed the view that, 

once a company meets the accelerated 

filer threshold, it is reasonable to 

minimize a company’s fluctuation in 

and out of accelerated filer status.48 We 

are proposing to allow an accelerated 

filer to exit accelerated filer status 

promptly if the aggregate worldwide 

market value of the voting and nonvoting common equity held by nonaffiliates of the issuer has fallen to less 

than $25 million as of the last business 

day of the issuer’s most recently 

completed second fiscal quarter.49

While the proposed amendments would 

permit additional companies to exit 

accelerated filer status, our research 

indicates that the proposed amendments 

would not significantly increase 

fluctuations out of accelerated filer 

status.50

Considering the substantial loss in 

public float required for an accelerated 

filer to reach the $25 million threshold 

and the limited following and reporting 

resources of a public issuer with less 

than $25 million in public float, we 

believe that it is appropriate to allow 

these issuers to exit accelerated filer 

status promptly. The types of companies 

that would benefit from this proposed 

relief also would include those that no 

longer have any voting or non-voting 

common equity held by non-affiliates 

but continue to be subject to the 

reporting requirements of Exchange Act 

Section 13(a) or 15(d) with respect to a 

class of securities that are not common 

equity securities.51

Under the proposed amendments, the 

issuer’s determination that it has less 

than $25 million in public float, as of 

the last business day of the issuer’s most 

recently completed second fiscal quarter 

would permit it to file its annual report 

on a non-accelerated filer basis for the 

fiscal year in which that determination 

is made. For example, if a December 31, 

2005 fiscal year-end accelerated filer 

had less than $25 million in public float 

on June 30, 2005, the end of its second 

fiscal quarter, it could exit accelerated 

filer status on December 31, 2005, and 

would not have to file its Form 10–K for 

fiscal year 2005 on an accelerated filer 

basis. The issuer could then continue to 

file all subsequent annual and quarterly 

reports on a non-accelerated filer basis 

unless and until the issuer again meets 

the accelerated filer definition. 

The proposed amendments also 

permit large accelerated filers to exit 

from large accelerated filer status. Once 

its public float has fallen to less than 

$75 million, also as of the last business 

day of the company’s most recently 

completed second fiscal quarter, a large 

accelerated filer could exit large 

accelerated filer status as of the end of 

the fiscal year and file its annual report 

as an accelerated filer or nonaccelerated filer in the same year that 

the determination of public float was 

made. If the company’s public float was 

$25 million or more, but less than $700 

million, as of the last day of its second 

fiscal quarter, the company would begin 

filing its reports as an accelerated filer. 

If the company’s public float was less 

than $25 million as of that date, it no 

longer would be required to file its 

periodic reports on an accelerated 

basis.52 We have chosen the $75 million 

threshold for the exit of a large 

accelerated filer, as it parallels the 

amount of public float that characterizes 

an accelerated filer. 

Request for Comment 

• Should we revise the accelerated 

filer definition to allow issuers that fall 

56868 Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Proposed Rules 

53See Release No. 33–8128. 

54 17 CFR 210.3–01, 210.3–09 and 210.3–12. 

55See the proposed amendments to paragraph 

(j)(1) of Exchange Act Rules 13a–10 and 15d–10. 

56See the proposed amendment to paragraph 

(1)(i) of Exchange Act Rule 12b–2. 

57This interpretation is consistent with the 

longstanding staff interpretation of the public float 

determination for Form S–3 and Form F–3 

eligibility requirements. 

58This is consistent with the requirement in 

General Instruction I.B.1 of Form S–3 and Form F–

3 that a registrant have a $75 million market value. 

Therefore, an entity with $75 million of common 

equity securities outstanding but not trading in any 

public trading market would not be an accelerated 

filer or a large accelerated filer. 

59 44 U.S.C. 3501 et seq. 

below the $25 million public float 

threshold to exit accelerated filer status, 

as proposed? Would the proposal 

adversely impact investor protection in 

any material respect? 

• Is $25 million public float an 

appropriate threshold point at which an 

accelerated filer should be permitted to 

exit accelerated filer status? For 

example, should an accelerated filer 

instead be permitted to exit when its 

public float drops below $50 million? If 

not, what would be a more appropriate 

point and why? 

• Is $75 million public float an 

appropriate threshold point at which a 

large accelerated filer should be 

permitted to exit large accelerated filer 

status? Should a large accelerated filer 

instead be allowed to exit when its 

public float has dropped to $250 

million, $500 million, or some other 

threshold? 

• As proposed, an issuer would 

determine whether it can exit 

accelerated filer status at the end of the 

fiscal year and for its upcoming annual 

report based on the aggregate worldwide 

market value of the issuer’s outstanding 

voting and non-voting common equity 

as of the last business day of the issuer’s 

most recently completed second fiscal 

quarter. Is this an appropriate date upon 

which to determine whether an issuer 

should be able to exit accelerated filer 

status? Should the determination 

instead be tied to the end of the fiscal 

year? Is tying the determination to a 

specific date appropriate, or should the 

determination be made over a longer 

period of time based on an average 

aggregate worldwide market value? How 

could we improve the timing and 

method of determination? 

• Is it appropriate to allow such an 

issuer to exit accelerated filer status 

only at the end of a fiscal year, or 

should the issuer be able to begin filing 

on a non-accelerated filer basis with 

respect to quarterly reports when the 

issuer is no longer subject to Exchange 

Act reporting with respect to its 

common equity securities during one of 

its first three quarters? Would the 

proposal, if adopted, adversely impact 

investor protection in any material 

respect? 

• Should we, as proposed, allow an 

issuer to exit accelerated filer status if 

it has no voting or non-voting common 

equity held by non-affiliates and no 

duty to file reports pursuant to Section 

13(a) or 15(d) of the Exchange Act with 

respect to any common equity 

securities, but still has a duty to file 

such reports with respect to its debt 

securities? 

• Should an issuer be required to file 

a notice with the Commission, such as 

on Form 8–K, announcing that there has 

been a change in its periodic report 

filing deadline status (i.e., the issuer has 

moved from one tier in the proposed 

three-tier accelerated filing system to a 

different tier)? If so, when should that 

issuer be required to file the notice? 

D. Other Amendments 

We also are proposing other 

amendments to our rules. First, we are 

proposing to make the same types of 

conforming changes to Rules 3–01, 3–09 

and 3–12 of Regulation S–X that we 

made when we first adopted the 

accelerated filing deadlines in 2002.53 In 

the interest of creating uniform 

requirements, our conforming 

amendments would require financial 

information that must be included in 

Commission filings other than periodic 

reports filed on Forms 10–K and 10–Q, 

such as Securities Act and Exchange Act 

registration statements and proxy or 

information statements, to be at least as 

current as the financial information 

included in these periodic reports.54

Second, we are proposing to make 

similar changes to the transition reports 

that a company must make when it 

changes its fiscal year.55

Finally, we are proposing to revise the 

public float condition in the existing 

Exchange Act Rule 12b–2 definition of 

‘‘accelerated filer’’ to indicate that it 

would have a public float of $75 million 

or more but less than $700 million, as 

of the last business day of the issuer’s 

most recently completed second fiscal 

quarter, and to clarify that the public 

float term in this definition means the 

‘‘aggregate worldwide market value of 

the company’s voting and non-voting 

common equity held by nonaffiliates.’’ 56 This is also clarified in the 

note to the proposed definition of 

‘‘accelerated filer and large accelerated 

filer’’ that discusses how to calculate 

public float. The addition of the word, 

‘‘worldwide,’’ would codify staff 

interpretation of the term 57 and is 

consistent with the public float 

condition in the recently adopted 

Securities Act Rule 405 definition of a 

‘‘well-known seasoned issuer.’’ The 

determination of public float would be 

premised on the existence of a public 

trading market for the company’s equity 

securities.58

Request for Comment 

• Should we make the proposed 

conforming revisions to Regulation S–X 

and the transition reports required by 

Rules 13a–10 and 15d–10? 

• Is there any reason why we should 

not amend the aggregate market value 

condition in the accelerated filer 

definition, as proposed, to refer to a 

company’s aggregate worldwide market 

value? 

III. General Request for Comments 

We request and encourage any 

interested person to submit comments 

on the proposal and any other matters 

that might have an impact on the 

proposal. We request comment from 

investors, as well as issuers and other 

users of Exchange Act information that 

may be affected by the proposal. With 

respect to any comments, we note that 

such comments are of greatest assistance 

to our rulemaking initiative if 

accompanied by supporting data and 

analysis of the issues addressed in those 

comments. 

IV. Paperwork Reduction Act 

The proposed amendments contain 

‘‘collection of information’’

requirements within the meaning of the 

Paperwork Reduction Act of 1995, or 

PRA.59 Form 10–K (OMB Control No. 

3235–0063) and Form 10–Q (OMB 

Control No. 3235–0070) were adopted 

pursuant to Sections 13 and 15(d) of the 

Exchange Act. They prescribe 

information that a registrant must 

disclose annually and quarterly to the 

market about its business. 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. 

The proposed amendments to the 

Exchange Act Rule 12b–2 definition of 

‘‘accelerated filer’’ and to the periodic 

reporting deadlines applicable to 

accelerated filers, if adopted, would: 

• Amend the Exchange Act Rule 12b–

2 definition of an ‘‘accelerated filer’’ to 

create a new category of accelerated 

filer, the ‘‘large accelerated filer,’’ for 

issuers with an aggregate worldwide 

market value of voting and non-voting 

common equity held by non-affiliates 

(‘‘public float’’) of $700 million or more; 

Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Proposed Rules 56869 

60See Release No. 33–8089 and Release No. 33–

8128. In the initial accelerated filing proposing 

release, we acknowledged the possibility that 

accelerating the filing deadline could result in 

respondents investing more resources in 

technology, relying more on outside advisers, 

higher average charges by outside advisers or 

increased efficiencies in preparing periodic reports. 

61See Release No. 33–8507 and Release No. 33–

8477. 

62Also, as of the end of the fiscal year, the issuer 

must have been subject to the requirements of 

Section 13(a) or 15(d) of the Exchange Act for a 

period of at least twelve calendar months; must 

have filed at least one annual report pursuant to 

Section 13(a) or 15(d) of the Exchange Act; and 

must not eligible be to use Forms 10–KSB and 10–

QSB for its annual and quarterly reports. 

63See Release No. 33–8128. 

64See Release 33–8089. 

• Re-define an ‘‘accelerated filer’’ as 

an issuer with an aggregate worldwide 

market value of voting and non-voting 

common equity held by non-affiliates of 

$75 million or more, but less than $700 

million; 

• Amend the accelerated filing 

deadlines so that the 60-day Form 10–

K annual report deadline would apply 

only to the proposed large accelerated 

filers. The Form 10–Q quarterly report 

deadline for large accelerated filers 

would remain at 40 days. Periodic 

report deadlines for accelerated filers 

would remain at 75 days for annual 

reports on Form 10–K and 40 days for 

quarterly reports on Form 10–Q; 

• Amend the accelerated filer 

definition to allow accelerated filers 

with less than $25 million in public 

float to exit accelerated filer status 

without a two-year delay; and 

• Amend the accelerated filer 

definition to allow large accelerated 

filers with less than $75 million in 

public float to exit large accelerated filer 

status. 

Our proposed amendments would not 

change the amount of information 

required to be included in Exchange Act 

reports. Therefore, they would neither 

increase nor decrease the amount of 

burden hours necessary to prepare 

Forms 10–K and 10–Q, for the purposes 

of the PRA. This analysis is consistent 

with the PRA analysis included in the 

original accelerated filing proposing and 

adopting releases.60 We reached the 

same conclusion in our proposing and 

adopting releases postponing the final 

phase-in period for acceleration of 

periodic filing.61 In that release, we 

stated that the amendments changing 

the due dates for a temporary period did 

not increase the information collection 

burden in a quantifiable manner, and 

commenters did not address this 

position. 

V. Cost-Benefit Analysis 

The proposed amendments are part of 

our continuing initiative to improve the 

regulatory system for periodic 

disclosure under the Exchange Act. We 

first adopted rules regarding accelerated 

filing deadlines in September 2002, 

requiring issuers with a public float of 

$75 million or more and meeting three 

other conditions specified in Exchange 

Act Rule 12b–2 62 to accelerate the filing 

of Exchange Act periodic reports on 

Form 10–K and Form 10–Q. We are 

sensitive to the costs and benefits that 

result from our rulemaking. Based on 

concerns expressed by the public, we 

propose to: 

• Create a new category of accelerated 

filer—the ‘‘large accelerated filer’’—that 

would be defined in the same manner 

as accelerated filers and include issuers 

with $700 million or more in public 

float; 

• Change the accelerated filing 

deadlines currently scheduled to be 

phased-in; and 

• Amend the provisions governing 

issuers’ ability to exit accelerated filer 

status. 

In this section, we examine the costs 

and benefits of our proposal. These 

costs and benefits are difficult to 

quantify. We request comment on the 

type, amount and duration of any costs 

or benefits from the proposed revisions 

to the accelerated filer definition. We 

request commenters to provide their 

views along with supporting data as to 

the benefits and costs associated with 

the proposals. 

A. Benefits 

Our proposed amendments may 

afford various benefits. Our proposed 

amendments contemplate a three-tier 

system governing accelerated filing 

deadlines that would continue to 

exclude smaller companies that may 

have fewer financial resources or less 

well-developed financial reporting 

systems in place to support the Form 

10–K and 10–Q accelerated filing 

deadlines. Our proposals also would 

allow accelerated filers that are not large 

accelerated filers to continue filing both 

their annual reports on Form 10–K and 

quarterly reports on Form 10–Q under 

the currently scheduled 75-day and 40- 

day deadlines without further 

modification. These accelerated filers 

would not be subject to the final phasein of deadlines that would result in a 

further acceleration of deadlines. Under 

the proposals, even the larger 

companies, defined as ‘‘large 

accelerated filers,’’ which would 

include companies with a public float of 

$700 million or more, would be able to 

continue to file their quarterly reports 

on Form 10–Q within 40 days after 

fiscal quarter end. They are the only 

companies that would be required to file 

their annual reports within 60 days after 

fiscal year end, beginning with reports 

filed for fiscal years ending on or after 

December 15, 2005. 

In the initial adopting release for the 

accelerated filing deadlines, we 

acknowledged several possible costs 

and risks to affected reporting 

companies.63 Since the adoption of the 

deadlines, we have received several 

comments expressing concern over the 

ability of companies to meet the 

accelerated filing deadlines, in light of 

the new requirements adopted in 2003 

by the Commission requiring companies 

to include a report by management and 

accompanying auditor’s report on the 

effectiveness of the company’s internal 

control over financial reporting in their 

annual reports. Our proposals maintain 

the current periodic report filing 

deadlines for accelerated filers and the 

current quarterly report filing deadlines 

for both accelerated filers and large 

accelerated filers. We are proposing to 

provide these companies with 

additional time to prepare their annual 

and quarterly reports and to update 

their financial statements included in a 

registration statement, proxy or 

information statement. It is difficult to 

quantify the benefits that the extra time 

would afford these companies, however, 

as noted in the cost-benefit analysis 

included in our initial accelerated filing 

release,64 additional time to prepare the 

financial reports may lower preparation 

costs and limit the internal resources 

that must be committed to filing 

periodic reports. Companies may 

therefore direct those resources towards 

other projects. Also, companies may 

take into account this possible lower 

cost of entry when considering whether 

to become a public reporting company. 

The longer deadlines would also 

allow additional time for companies’

management, external auditors, boards 

of directors and audit committees to 

review the disclosure included in the 

periodic reports. Thus, as an indirect 

benefit for the markets and investors, 

the proposed amendments may lead to 

higher quality and more accurate 

reports. As another indirect benefit, as 

companies are provided with more time 

to file their periodic reports, it may be 

less likely that companies become 

subject to the collateral consequences of 

the late filing of reports (e.g., losing the 

ability to use short-form registration). 

We propose to continue to subject 

large accelerated filers to the final 

phase-in of the deadlines for annual 

reports on Form 10–K. We continue to 

56870 Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Proposed Rules 

65For example, see Qi, Wu and Haw, ‘‘The 

Incremental Information Content of SEC 10–K 

Reports Filed under the EDGAR System,’’ in the 

Journal of Accounting, Auditing and Finance. 

66See Griffin, ‘‘Got Information? Investor 

Response to Form 10–K and Form 10–Q EDGAR 

Filings,’’ in the Review of Accounting Studies. 

67Bloomberg was the source of the public float 

data. Bloomberg defines public float as the number 

of shares outstanding less shares held by insiders 

and those deemed to be ‘‘stagnant shareholders.’’

‘‘Stagnant shareholders’’ include ESOP’s, ESOT’s, 

QUEST’s employee benefit trusts, corporations not 

actively engaged in managing money, venture 

capital companies, and shares held by governments. 

When terms for public float were missing from 

Bloomberg, market capitalization was used as a 

proxy for public float which likely overstates the 

number of firms in certain categories. However, 

given the low number of companies where market 

capitalization was used, the difference should not 

be large. 

68 In our Securities Offering Reform release, we 

noted that in 2004, the issuers that met the 

thresholds for well-known seasoned issuers 

represented accounted for about 95% of U.S. equity 

market capitalization. See Release No. 33–8591. The 

eligibility requirements for a well-known seasoned 

issuer and the $700 million threshold for a large 

accelerated filer are not the same because, unlike 

an accelerated filer, a well-known seasoned issuer 

may also be an issuer of non-convertible securities, 

other than common equity. Nevertheless, we 

believe that the numbers in the release for wellknown seasoned issuers still provide us with a good 

approximation for our purposes. 

believe, at this stage, that larger issuers 

possess the infrastructure and resources 

to support further acceleration of filing 

deadlines for annual reports, and that 

they have a greater market following 

than smaller companies. We also 

continue to believe that our accelerated 

filing deadlines promote investor 

protection by providing investors with 

timely access to important information. 

In creating the proposed category of 

large accelerated filers, which would 

continue to file annual reports under 

accelerated deadlines, we have 

proposed a system that accelerates the 

delivery of material information to 

investors and capital markets for those 

issuers that we believe are not only 

more capable of meeting the deadlines, 

but also for which we believe the 

benefits to investors justify the possible 

increased costs. 

The proposed conforming 

amendments that relate to the timeliness 

requirements for the inclusion of 

financial information in Securities Act 

and Exchange Act registration 

statements, proxy or information 

statements, and transition reports, 

promote consistency among our rules. 

These proposed amendments also may 

promote capital formation, by providing 

companies with a longer window before 

financial statements in registration 

statements become stale. 

Our proposals covering the exit from 

accelerated filer status offer similar 

benefits. While we continue to believe 

that it is important to minimize 

fluctuation in and out of accelerated 

filer status, we have identified some 

situations with respect to which we 

believe the current rules have been 

unnecessarily restrictive. One such 

situation involves a company that has 

de-registered all of its common equity 

but still has an Exchange Act reporting 

obligation with respect to another class 

of securities. Under the current 

requirements, this company must still 

file reports on an accelerated basis, 

despite the fact that it would not have 

been required to become an accelerated 

filer initially if it only had a class of 

debt securities registered under the 

Exchange Act. We believe that our 

proposed amendment permitting filers 

to exit based on a public float 

measurement would be a more balanced 

and fair approach than the current rules 

that govern the exit from accelerated 

filer status. 

B. Costs 

We believe, and academic studies 

indicate, that the information required 

to be contained in the Exchange Act 

periodic reports is valuable to investors 

and the markets.65 For quarterly reports 

on Form 10–Q filed by both large 

accelerated filers and accelerated filers 

and for annual reports on Form 10–K 

filed by accelerated filers with less than 

$700 million in public float, the 

proposed amendments have the 

incremental effect of delaying access to 

periodic report information to investors 

and to the capital markets. Information 

required by Exchange Act reports 

provides a verification function against 

other unofficial statements made by 

issuers. Investors can judge these 

informal statements against the more 

extensive formal disclosure provided in 

the reports, including financial 

statements prepared in accordance with 

generally accepted accounting 

principles. Accelerated filing shortens 

the delay before this verification can 

occur and speeds the timing for 

comparative financial analyses of 

information in those reports. Delaying 

access to this information may thereby 

hinder an investor’s ability to make 

informed decisions on as timely a basis 

as would have been possible if the final 

phase-in of accelerated filing deadlines 

were completed. Thus, the amendments 

which propose longer deadlines of 

periodic reports than those currently 

scheduled, will delay investors in 

making informed investment and 

valuation decisions, and may increase 

capital market inefficiencies in stock 

valuation and pricing. Likewise, the 

delay may cause Exchange Act reports 

to have less relevance to investors. 

Moreover, smaller companies 

generally are followed by fewer analysts 

and have less institutional ownership. 

One study shows that smaller 

companies experience a larger price 

impact on the filing date than larger 

companies, indicating that filings 

contain more valuable information for 

smaller companies than larger 

companies.66 The delay of filing 

deadlines for smaller companies may be 

costly to the market, perhaps even more 

costly to the market than the delay of 

filing deadlines for larger companies. 

Nevertheless, we recognize inherent 

difficulties in the ability to quantify the 

effect that, for example, the proposed 

15-day delay in the filing of the annual 

report by accelerated filers would have 

on the market. 

The Office of Economic Analysis has 

provided us with data for companies 

listed on NYSE, Amex, NASDAQ, the 

Over the Counter Bulletin Board 

(OTCBB) and Pink Sheets LLC from 

which we can estimate the number of 

companies that would be affected by 

these proposals. For the most part, the 

data is based on a public float definition 

which is highly correlated to the 

Commission’s definition of public 

float.67 The data indicates that 2,307 of 

the companies that are listed on NYSE, 

Amex, NASDAQ, OTCBB or the Pink 

Sheets have a public float of between 

$75 million and $700 million, while 

1,678 of the companies have a public 

float over $700 million. The companies 

possessing between $75 million and 

$700 million in public float represent 

23% of the total number of companies 

on the exchanges and 4.3% of the total 

public float of these companies on the 

exchanges. The companies with a public 

float of over $700 million represent 

approximately 18% of the total number 

of companies on these exchanges and 

approximately 95% of the total public 

float on these exchanges.68

The proposed amendments may 

produce costs as a result of requiring 

companies and their investors to 

regularly monitor public float levels to 

determine companies’ filing deadlines. 

It is difficult to quantify the number of 

companies that would be affected by our 

proposed amendments relating to the 

exit of issuers from accelerated filer 

status or large accelerated filer status, 

however, we have reason to believe that 

this number is small. Using 2003 data, 

we estimate that the amendment which 

relates to the exit of issuers from 

accelerated filing status, if adopted, 

would allow four respondents to no 

longer be subject to the accelerated filer 

definition and to be able to file their 

Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Proposed Rules 56871 

69OEA provided us with a list of companies that 

delisted their common stock or other common 

equity from a national securities exchange or 

NASDAQ during the 2003 calendar year from the 

CRSP Database. From this list, we identified the 

companies that met the accelerated filer definition 

for fiscal years ending on or after December 15, 

2002. Then, we confirmed whether or not the 

accelerated filer continued to have an Exchange Act 

reporting obligation with respect to a class of debt 

or equity securities on the Commission’s Electronic 

Data Gathering, Analysis, and Retrieval System 

(‘‘EDGAR’’). It is our understanding that the data in 

CRSP does not include a complete list of common 

equity traded on the OTC Bulletin Board, so our 

estimate may understate the actual number of 

companies that would be affected by our proposed 

revision to the accelerated filer definition. 

70 In deriving these estimates, we used common 

equity data as an approximation for public float 

data from the Thomson Worldscope Global 

Database. 

71Pub. L. No. 104–121, Title II, 110 Stat. 857 

(1996). 

72 15 U.S.C. 78w(a)(2). 

73 15 U.S.C. 77b(b). 

74 15 U.S.C. 78c(f). 75 5 U.S.C. 603. 

Exchange Act reports up to 15 days later 

than currently required.69 In addition, 

our research indicates that only 25 

companies with $75 million or more in 

public float in 2003 had their public 

float drop to less than $25 million in 

2004.70

VI. Consideration of Impact on the 

Economy, Burden on Competition and 

Promotion of Efficiency, Competition 

and Capital Formation 

For purposes of the Small Business 

Regulatory Enforcement Fairness Act of 

1996, or ‘‘SBREFA,’’ 71 we solicit data to 

determine whether the proposed 

amendments constitute ‘‘major’’ rules. 

Under SBREFA, a rule is considered 

‘‘major’’ where, if adopted, it results or 

is likely to result in: 

• An annual effect on the economy of 

$100 million or more; 

• A major increase in costs or prices 

for consumers or individual industries; 

or 

• Significant adverse effects on 

competition, investment or innovation. 

We request comment on the potential 

impact of the proposed amendments on 

the economy on an annual basis. 

Commenters are requested to provide 

empirical data and other factual support 

for their views if possible. 

Section 23(a)(2) of the Exchange 

Act 72 requires us, when adopting rules 

under the Exchange Act, to consider the 

impact that any new rule would have on 

competition. Section 23(a)(2) prohibits 

us from adopting any rule that would 

impose a burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Exchange Act. In 

addition, Section 2(b) of the Securities 

Act 73 and Section 3(f) of the Exchange 

Act 74 require us, when engaging in 

rulemaking where we are required to 

consider or determine whether an action 

is necessary or appropriate in the public 

interest, to consider, in addition to the 

protection of investors, whether the 

action will promote efficiency, 

competition and capital formation. 

The proposed amendments balance 

the timeliness and accessibility of 

Exchange Act reports to investors and 

the financial markets against the need of 

companies and their auditors to 

conduct, without undue cost, highquality and thorough assessments and 

audits of the companies’ financial 

information, so as to increase the 

likelihood that more complete, reliable, 

and timely information contained in 

Exchange Act reports is available to the 

market. The creation of the category of 

large accelerated filers and the 

requirement that large accelerated filers 

file their annual reports within 60 days 

after fiscal year end are proposed to 

preserve the timeliness and accessibility 

of issuer information so that investors 

can more easily make informed 

investment and voting decisions. We 

believe it is appropriate to fully 

implement the 60-day accelerated 

deadline for annual reports for large 

accelerated filers, given their internal 

reporting resources and the greater 

market interest that they generate. 

Similarly, we are seeking to retain the 

40-day deadline for the quarterly reports 

on Form 10–Q for large accelerated 

filers and the 75 and 40-day deadlines 

for the annual and quarterly reports of 

accelerated filers that are not large 

accelerated filers. We have proposed 

that issuers with a public float that has 

dropped below $25 million be allowed 

to exit accelerated filer status, without 

the current two-year delay. 

Informed investor decisions generally 

promote market efficiency and capital 

formation. The proposals would affect 

accelerated filers differently depending 

on their public float. Some accelerated 

filers would be required to further 

accelerate their filing deadlines, while 

others would remain subject to current 

filing deadlines. A few would be able to 

exit accelerated filer status more 

quickly. This may enhance competition 

by avoiding the imposition of onerous 

burdens on smaller competitors who are 

least able to bear them. This may also 

have the effect of allowing some 

competitors to file their Exchange Act 

reports later than others, potentially 

providing some competitive advantage 

to the later filers. We have also heard 

concerns from some issuers that 

accelerated filing deadlines may affect 

their ability to provide accurate and 

reliable information. We have sought to 

minimize these concerns by limiting 

further acceleration of annual reports to 

only the largest public issuers that are 

likely to have the greatest internal 

reporting resources. In contrast, 

allowing issuers to retain their current 

filing deadlines or to exit accelerated 

filer status would have the effect of 

delaying the receipt of information by 

investors, and the delay may affect an 

investor’s ability to make informed 

decisions in as timely a fashion. These 

amendments may further promote 

capital formation by diminishing the 

risk that companies would not be able 

to utilize short-form registration because 

of the untimely filing of reports. 

Our conforming amendments to 

Regulation S–X which cover the 

timeliness of financial information in 

registration statements and proxy or 

information statements may affect 

capital formation. This may promote 

capital formation by providing 

companies with a longer window to 

access capital markets before financial 

information becomes stale. 

The possibility of these effects and 

their magnitude if they were to occur 

are difficult to quantify. We request 

comment on whether the proposal, if 

adopted, would promote efficiency, 

competition and capital formation or 

have an impact or burden on 

competition. Commenters are requested 

to provide empirical data and other 

factual support for their views if 

possible. 

VII. Initial Regulatory Flexibility 

Analysis 

This Initial Regulatory Flexibility 

Analysis, or IRFA, has been prepared in 

accordance with the Regulatory 

Flexibility Act.75 This IRFA involves 

proposed amendments to the rules and 

forms under the Securities Act and the 

Exchange Act to: 

• Create a new category of accelerated 

filer—the ‘‘large accelerated filer’’—for 

issuers with a public float of $700 

million or more; 

• Re-define an ‘‘accelerated filer’’ as 

an issuer with an aggregate worldwide 

market value of voting and non-voting 

common equity held by non-affiliates of 

$75 million or more, but less than $700 

million; 

• Amend the accelerated filing 

deadlines so that the 60-day Form 10–

K annual report deadline would apply 

only to the proposed large accelerated 

filers. The Form 10–Q quarterly report 

deadline for large accelerated filers 

would remain at 40 days. Periodic 

report deadlines for other accelerated 

filers would remain at 75 days for 

annual reports on Form 10–K and 40 

56872 Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Proposed Rules 

76 17 CFR 240.0–10(a). 

77For purposes of the accelerated filer definition, 

the issuer must compute the aggregate market value 

of its outstanding voting and non-voting common 

equity by use of the price at which the common 

equity was last sold, or the average of the bid and 

asked prices of such common equity, in the 

principal market for such common equity, as of the 

last business day of its most recently completed 

second fiscal quarter. 

78 It is our understanding that the data in the 

Compustat Database is derived principally from 

larger issuers, so our estimate could understate the 

actual number of issuers that would be affected by 

the proposals. This sample was taken in September 

2005. Assuming that this sample is representative 

of small entities, the accelerated filer public float 

requirement has the effect of excluding almost all 

small entities from the definition. 

79We also noted that the accelerated filer 

deadlines have little, if any, effect on smaller 

entities. See Release No. 33–8129. 

80Based on data from the Thomson Worldscope 

Global Database, we estimate that only 25 

companies had a public float of $75 million in 

2003, but less than $25 million in 2004. 

days for quarterly reports on Form 10–

Q; 

• Amend the accelerated filer 

definition to allow accelerated filers 

with less than $25 million in public 

float to exit accelerated filer status 

without the current two-year delay; and 

• Amend the accelerated filer 

definition to allow large accelerated 

filers with less than $75 million in 

public float to exit large accelerated filer 

status. 

A. Reasons for, and Objectives of, 

Proposed Amendments 

The proposed amendments seek to 

balance the interests of investors and 

the market to have timely access to 

important information contained in 

periodic reports against the need of 

companies and their auditors to 

conduct, without undue cost, highquality and thorough assessments and 

audits of the companies financial 

information, so as to increase the 

likelihood that more complete, reliable, 

and timely information contained in 

Exchange Act reports is available to the 

market. The proposed amendments 

relate to the acceleration of filing 

deadlines for annual reports on Form 

10–K and quarterly report on Form 10–

Q for accelerated filers. We propose to 

change the current rules and forms to: 

• Create a new category of accelerated 

filer—the ‘‘large accelerated filer’’—that 

would be defined in the same manner 

as an accelerated filer and include 

issuers with $700 million or more of 

public float; 

• Amend the periodic report 

deadlines so that only the large 

accelerated filer become subject to the 

final phase-in of the accelerated Form 

10–K deadlines; and 

• Amend the definition of accelerated 

filer to facilitate the speedier exit by 

accelerated filers from accelerated filer 

status. 

While we continue to believe that 

periodic reports contain information 

that is essential to conduct comparative 

financial analysis, and that timely 

access to these reports can greatly 

benefit investors and the market, we 

share in the concern expressed by 

several companies regarding the 

currently imposed deadlines. These 

comments have led to our proposals 

today which would subject only large 

accelerated filers to the shortest annual 

report accelerated filing deadlines, 

which we believe is achievable by 

issuers without undue cost. In doing so, 

we acknowledge the relative ability of 

different issuers to support the 

accelerated report deadlines. In 

proposing new rules governing the exit 

from accelerated filer status, we seek to 

eliminate unnecessary restrictions and 

delays, and attempt to achieve a more 

streamlined set of rules. 

B. Legal Basis 

We are proposing the amendments to 

the forms and rules under the authority 

set forth in Sections 3(b) and 19(a) of the 

Securities Act and Sections 12, 13, 15(d) 

and 23(a) of the Exchange Act. 

C. Small Entities Subject to the 

Proposed Amendments 

For purposes of the Regulatory 

Flexibility Act, Exchange Act Rule 0–

10(a) 76 defines an issuer, other than an 

investment company, to be a ‘‘small 

business’’ or ‘‘small organization’’ if it 

had total assets of $5 million or less on 

the last day of its most recent fiscal year. 

The proposed amendments would 

affect only the Exchange Act reporting 

companies that would be defined as 

‘‘accelerated filers’’ or ‘‘large accelerated 

filers.’’ Under the current rules, an 

issuer becomes an accelerated filer once 

it first meets the following conditions as 

of the end of its fiscal year: 

• The issuer has an aggregate market 

value of voting and non-voting common 

equity held by non-affiliates of the 

issuer (referred to as ‘‘public float’’) of 

$75 million or more, as of the last 

business day of the issuer’s most 

recently completed second fiscal 

quarter; 77

• The issuer has been subject to the 

reporting requirements of Section 13(a) 

or 15(d) of the Exchange Act for a period 

of at least 12 calendar months; 

• The issuer previously has filed at 

least one annual report; and 

• The issuer is not eligible to use 

Forms 10–KSB and 10–QSB for its 

annual and quarterly reports. 

An issuer becomes a large accelerated 

filer in much the same way, except that 

a large accelerated filer has an aggregate 

market value of voting and non-voting 

common equity held by non-affiliates of 

the issuer (referred to as ‘‘public float’’) 

of $700 million or more, as of the last 

business day of the issuer’s most 

recently completed second fiscal 

quarter. 

According to the Standard & Poors 

Research Insight Compustat Database, as 

of a recent date, of the 990 reporting 

companies listed with assets of $5 

million or less, 28, or 2.8%, had a 

market capitalization greater than $75 

million and three had a market 

capitalization greater than $700 

million.78 Based on our research, we do 

not expect these proposals to affect a 

substantial number of small entities. 

D. Reporting, Recordkeeping, and Other 

Compliance Requirements 

Changes to Form 10–K annual report 

and Form 10–Q quarterly report filing 

deadlines should not affect smaller 

entities. Our proposals would subject 

large accelerated filers with $700 

million or more in public float to the 

currently scheduled final phase-in of 

the accelerated Form 10–K annual 

report deadline of 60 days, but they 

would continue to file their quarterly 

reports on Form 10–Q under the current 

40-day deadline. Accelerated filers that 

are not large accelerated filers or those 

with at least $75 million in public float, 

but less than $700 million, as of the last 

day of the second fiscal quarter, would 

continue filing their annual reports and 

quarterly reports on Forms 10–K and 

10–Q under the current 75-day and 40- 

day deadlines, respectively.79

Our other proposed amendments 

governing the exit from accelerated filer 

status could have an impact on a 

company that becomes a small entity 

after its public float threshold has 

dropped below $25 million. However, 

we do not expect the impact of the 

proposed amendments on small entities 

to be significant, because we expect that 

only a few accelerated filers would 

become small entities each year.80 For 

those that do, the proposed amendments 

would streamline their exit from 

accelerated filer status, and make it 

easier for such issuers to begin filing 

their reports under longer deadlines. 

Specifically, under the proposed 

amendments, issuers no longer would 

have to wait for two years before they 

could start filing under longer 

deadlines. We seek comment on 

whether any of our proposals affect the 

reporting burden of smaller entities. 

Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Proposed Rules 56873 

E. Duplicative, Overlapping or 

Conflicting Federal Rules 

We believe that there are no rules that 

duplicate, overlap or conflict with the 

proposed amendments. 

F. Significant Alternatives 

The Regulatory Flexibility Act directs 

us to consider significant alternatives 

that would accomplish our stated 

objectives, while minimizing any 

significant adverse impact on small 

entities. In connection with our 

proposals, we considered the following 

alternatives: 

1. Establishing different compliance 

or reporting requirements for smaller 

entities that take into account the 

resources available to smaller entities; 

2. Setting different thresholds upon 

which companies can exit from 

accelerated filer status; and 

3. Using different standards by which 

companies are measured to determine 

whether they should be subject to 

different regulatory burdens, taking into 

account the needs of smaller entities. 

We have considered different changes 

to our rules and forms to achieve our 

regulatory objectives, and where 

possible, have taken steps to minimize 

the effect of the rules on smaller 

entities. Our proposed amendments 

likely would have a favorable impact on 

smaller entities as they now permit 

more companies to exit from accelerated 

status and permit companies to exit 

from accelerated status without the 

current two-year delay. Therefore, as a 

result of our amendments, it is less 

likely that smaller entities would be 

subject to accelerated deadlines of their 

periodic reports. 

G. General Request for Comments 

We solicit written comments 

regarding this analysis. We request 

comment on whether the proposals 

could have an effect that we have not 

considered. We request that commenters 

describe the nature of any impact on 

small entities and provide empirical 

data to support the extent of the impact. 

VIII. Update to Codification of 

Financial Reporting Policies 

The Commission proposes to amend 

the ‘‘Codification of Financial Reporting 

Policies’’ announced in Financial 

Reporting Release No. 1 (April 15, 1982) 

as follows: 

1. By amending Section 102.05.(2) to 

read as follows: 

(2) Conforming the Filing Requirements 

of Transition Reports to the Current 

Requirements for Forms 10–Q and 10– 

K 

To conform to the current filing 

periods for reports on Forms 10–K and 

10–Q, the filing period for transition 

reports on Form 10–K is 60 days for 

large accelerated filers, 75 days for 

accelerated filers, and 90 days for other 

issuers after the close of the transition 

period or the date of the determination 

to change the fiscal year, whichever is 

later, and for transition reports on Form 

10–Q, the filing period is 40 days for 

large accelerated filers and accelerated 

filers or 45 days for other issuers after 

the later of these two events. 

2. By amending Section 102.05. to 

revise the preliminary note to the 

‘‘Appendix’’ to Section 102.05. to read 

as follows: 

Preliminary Note: The following 

examples are applicable if the issuer is 

neither a large accelerated filer nor an 

accelerated filer. If the issuer is a large 

accelerated filer, substitute 60 days for 

90 days in the examples for transition 

reports on Form 10–K, and substitute 40 

days for 45 days in the examples for 

transition reports on Form 10–Q. If the 

issuer is an accelerated filer, substitute 

75 days for 90 days in the examples for 

transition reports on Form 10–K, and 

subsitute 40 days for 45 days in the 

examples for transition reports on Form 

10–Q. 

3. By amending Section 302.01.a. to: 

a. Replace the phrase ‘‘after 45 days 

but within 90, 75 or 60 days of the end 

of the registrant’s fiscal year for 

accelerated filers, as applicable 

depending on the registrant’s fiscal year 

(or after 45 days but within 90 days of 

the end of the registrant’s fiscal year for 

other registrants)’’ with the phrase ‘‘after 

45 days but within 60 days of the end 

of the registrant’s fiscal year for large 

accelerated filers or after 45 days but 

within 75 days of the end of the 

registrant’s fiscal year for accelerated 

filers (or after 45 days but within 90 

days of the end of the registrant’s fiscal 

year for other registrants)’’ in the second 

paragraph of Section 302.01.a.; and 

b. Replace the phrase ‘‘after 45 days 

but within 90, 75 or 60 days of the end 

of its fiscal year if the registrant is an 

accelerated filer, as applicable 

depending on the registrant’s fiscal year 

(i.e., February 16 to March 31, 15, or 1 

for calendar year companies) (or after 45 

days but within 90 days of the end of 

its fiscal year for other registrants (i.e., 

February 16 to March 31 for calendar 

year companies))’’ with the phrase 

‘‘after 45 days but within 60 days of the 

end of its fiscal year if the registrant is 

a large accelerated filer (i.e., February 16 

to March 1 for calendar year 

companies), after 45 days but within 75 

days of the end of its fiscal year if the 

registrant is an accelerated filer (i.e., 

February 16 to March 15 for calendar 

year companies), or after 45 days but 

within 90 days of the end of its fiscal 

year for other registrants (i.e., February 

16 to March 31 for calendar year 

companies)’’ in the first sentence of the 

fourth paragraph of Section 302.01.a. 

4. By amending Section 302.01.b. to: 

a. Replace the phrase ‘‘134, 129 or 124 

days subsequent to the end of a 

registrant’s fiscal year if the registrant is 

an accelerated filer, as applicable 

depending on the registrant’s fiscal year 

(or 134 days subsequent to the end of a 

registrant’s fiscal year for other 

registrants)’’ with the phrase ‘‘129 days 

subsequent to the end of a registrant’s 

fiscal year if the registrant is a large 

accelerated filer or an accelerated filer 

(or 134 days subsequent to the end of a 

registrant’s fiscal year for other 

registrants)’’ in the first sentence of 

Section 302.01.b.; and 

b. Replace the phrase ‘‘135, 130 or 125 

days of the date of the filing if the 

registrant is an accelerated filer, as 

applicable depending on the registrant’s 

fiscal year (or 135 days of the date of the 

filing for other registrants)’’ with the 

phrase ‘‘130 days of the date of the filing 

if the registrant is a large accelerated 

filer or an accelerated filer (or 135 days 

of the date of the filing for other 

registrants)’’ in the second sentence of 

Section 302.01.b. 

5. By amending Section 302.01.c. to: 

a. Replace the phrase ‘‘135, 130 or 125 

days or more, if the registrant is an 

accelerated filer, as applicable 

depending on the registrant’s fiscal year 

(or 135 days or more for other 

registrants)’’ with the phrase ‘‘130 days 

or more, if the registrant is a large 

accelerated filer or an accelerated filer 

(or 135 days or more for other 

registrants)’’ in the first paragraph of 

Section 302.01.c.; 

b. Replace the phrase ‘‘as of an 

interim date within 135, 130 or 125 

days, if the registrant is an accelerated 

filer, as applicable depending on the 

registrant’s fiscal year (or 135 days for 

other registrants)’’ with the phrase ‘‘as 

of an interim date within 125 days, if 

the registrant is a large accelerated filer, 

or 130 days, if the registrant is an 

accelerated filer (or 135 days for other 

registrants)’’ in the first paragraph of 

Section 302.01.c.; and 

c. Replace the phrase ‘‘after 45 days 

but within 90, 75 or 60 days of the end 

of the fiscal year if the registrant is an 

accelerated filer, as applicable 

depending on the registrant’s fiscal year 

56874 Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Proposed Rules 

(or after 45 days but within 90 days of 

the end of the fiscal year for other 

registrants)’’ with the phrase ‘‘after 45 

days but within 60 days of the end of 

the fiscal year if the registrant is a large 

accelerated filer, after 45 days but 

within 75 days if the registrant is an 

accelerated filer (or after 45 days but 

within 90 days of the end of the fiscal 

year for other registrants)’’ in the second 

and third sentences of the second 

paragraph of Section 302.01.c. 

Note: The Codification is a separate 

publication of the Commission. It will not 

appear in the Code of Federal Regulations. 

IX. Statutory Authority and Text of 

Proposed Amendments 

The amendments contained in this 

document are being proposed under the 

authority set forth in Sections 3(b) and 

19(a) of the Securities Act and Sections 

12, 13, 15(d) and 23(a) of the Exchange 

Act. 

Text of Proposed Amendments 

List of Subjects in 17 CFR Parts 210, 

229, 240 and 249 

Reporting and recordkeeping 

requirements, Securities. 

In accordance with the foregoing, 

Title 17, Chapter II of the Code of 

Federal Regulations is amended as 

follows. 

PART 210—FORM AND CONTENT OF 

AND REQUIREMENTS FOR FINANCIAL 

STATEMENTS, SECURITIES ACT OF 

1933, SECURITIES EXCHANGE ACT 

OF 1934, PUBLIC UTILITY HOLDING 

COMPANY ACT OF 1935, INVESTMENT 

COMPANY ACT OF 1940, INVESTMENT 

ADVISERS ACT OF 1940, AND 

ENERGY POLICY AND 

CONSERVATION ACT OF 1975 

1. The authority citation for Part 210 

continues to read as follows: 

Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 

77z–2, 77z–3, 77aa(25), 77aa(26), 78c, 78j–1, 

78l, 78m, 78n, 78o(d), 78q, 78u–5, 78w(a), 

78ll, 78mm, 79e(b), 79j(a), 79n, 79t(a), 80a–

8, 80a–20, 80a–29, 80a–30, 80a–31, 80a–

37(a), 80b–3, 80b–11, 7202 and 7262, unless 

otherwise noted. 

2. Section 210.3–01 is amended by 

revising paragraphs (e) and (i) to read as 

follows: 

§ 210.3–01 Consolidated balance sheets. 

* * * * * 

(e) For filings made after the number 

of days specified in paragraph (i)(2) of 

this section, the filing shall also include 

a balance sheet as of an interim date 

within the following number of days of 

the date of filing: 

(1) 130 days for large accelerated filers 

and accelerated filers (as defined in 

§ 240.12b–2 of this chapter); and 

(2) 135 days for all other registrants. 

* * * * * 

(i)(1) For purposes of paragraphs (c) 

and (d) of this section, the number of 

days shall be: 

(i) 60 days for large accelerated filers 

(as defined in § 240.12b–2 of this 

chapter); 

(ii) 75 days for accelerated filers (as 

defined in § 240.12b–2 of this chapter); 

and 

(iii) 90 days for all other registrants. 

(2) For purposes of paragraph (e) of 

this section, the number of days shall 

be: 

(i) 129 days subsequent to the end of 

the registrant’s most recent fiscal year 

for large accelerated filers and 

accelerated filers (as defined in 

§ 240.12b–2 of this chapter); and 

(ii) 134 days subsequent to the end of 

the registrant’s most recent fiscal year 

for all other registrants. 

3. Section 210.3–09 is amended by 

revising paragraphs (b)(3) and (b)(4) to 

read as follows: 

§ 210.3–09 Separate financial statements 

of subsidiaries not consolidated and 50 

percent or less owned persons. 

* * * * * 

(b) * * * 

(3) The term registrant’s number of 

filing days means: 

(i) 60 days if the registrant is a large 

accelerated filer; 

(ii) 75 days if the registrant is an 

accelerated filer; and 

(iii) 90 days for all other registrants. 

(4) The term subsidiary’s number of 

filing days means: 

(i) 60 days if the 50 percent or less 

owned person is a large accelerated 

filer; 

(ii) 75 days if the 50 percent or less 

owned person is an accelerated filer; 

and 

(iii) 90 days for all other 50 percent 

or less owned persons. 

* * * * * 

4. Section 210.3–12 is amended by 

revising paragraph (g) to read as follows: 

§ 210.3–12 Age of financial statements at 

effective date of registration statement or at 

mailing date of proxy statement. 

* * * * * 

(g)(1) For purposes of paragraph (a) of 

this section, the number of days shall 

be: 

(i) 130 days for large accelerated filers 

and accelerated filers (as defined in 

§ 240.12b–2 of this chapter); and 

(ii) 135 days for all other registrants. 

(2) For purposes of paragraph (b) of 

this section, the number of days shall 

be: 

(i) 60 days for large accelerated filers 

(as defined in § 240.12b–2 of this 

chapter); 

(ii) 75 days for accelerated filers (as 

defined in § 240.12b–2 of this chapter); 

and 

(iii) 90 days for all other registrants. 

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 

5. The authority citation for Part 229 

continues to read, in part, as follows: 

Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 

77k, 77s, 77z–2, 77z–3, 77aa(25), 77aa(26), 

77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 

77nnn, 77sss, 78c, 78i, 78j, 78l, 78m, 78n, 

78o, 78u–5, 78w, 78ll, 78mm, 79e, 79j, 79n, 

79t, 80a–8, 80a–9, 80a–20, 80a–29, 80a–30, 

80a–31(c), 80a–37, 80a–38(a), 80a–39, 80b–

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

unless otherwise noted. 

* * * * * 

6. Section 229.101 is amended by 

revising paragraph (e) to read as follows: 

§ 229.101 (Item 101) Description of 

business. 

* * * * * 

(e) Available information. Disclose the 

information in paragraphs (e)(1), (e)(2) 

and (e)(3) of this section in any 

registration statement you file under the 

Securities Act (15 U.S.C. 77a et seq.), 

and disclose the information in 

paragraphs (e)(3) and (e)(4) of this 

section if you are filing an annual report 

on Form 10–K (§ 249.310 of this 

chapter) and are an accelerated filer or 

a large accelerated filer (as defined in 

§ 240.12b–2 of this chapter): 

(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 100 

F Street, NE., Washington, DC 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). 

(3) You are encouraged to give your 

Internet address, if available, except that 

if you are filing your annual report on 

Form 10–K and are an accelerated filer 

Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Proposed Rules 56875 

or a large accelerated filer, you must 

disclose your Internet address, if you 

have one. 

(4)(i) Whether you make available free 

of charge on or through your Internet 

Web site, if you have one, your annual 

report on Form 10–K, quarterly reports 

on Form 10–Q (§ 249.308a of this 

chapter), current reports on Form 8–K 

(§ 249.308 of this chapter), and 

amendments to those reports filed or 

furnished pursuant to section 13(a) or 

15(d) of the Exchange Act (15 U.S.C. 

78m(a) or 78o(d)) as soon as reasonably 

practicable after you electronically file 

such material with, or furnish it to, the 

SEC; 

(ii) If you do not make your filings 

available in this manner, the reasons 

you do not do so (including, where 

applicable, that you do not have an 

Internet Web site); and 

(iii) If you do not make your filings 

available in this manner, whether you 

voluntarily will provide electronic or 

paper copies of your filings free of 

charge upon request. 

* * * * * 

PART 240—GENERAL RULES AND 

REGULATIONS, SECURITIES 

EXCHANGE ACT OF 1934 

7. The authority citation for Part 240 

continues to read, in part, as follows: 

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

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

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

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

78q, 78s, 78u–5, 78w, 78x, 78ll, 78mm, 79q, 

79t, 80a–20, 80a–23, 80a–29, 80a–37, 80b–3, 

80b–4, 80b–11, and 7201 et seq.; and 18 

U.S.C. 1350, unless otherwise noted. 

* * * * * 

8. Section 240.12b–2 is amended by 

revising the definition of ‘‘Accelerated 

filer’’ to read as follows: 

§ 240.12b–2 Definitions. 

* * * * * 

Accelerated filer and large 

accelerated filer. (1) Accelerated filer. 

The term accelerated filer means an 

issuer after it first meets the following 

conditions as of the end of its fiscal 

year: 

(i) The issuer had an aggregate 

worldwide market value of the voting 

and non-voting common equity held by 

its non-affiliates of $75 million or more, 

but less than $700 million, as of the last 

business day of the issuer’s most 

recently completed second fiscal 

quarter; 

(ii) The issuer has been subject to the 

requirements of section 13(a) or 15(d) of 

the Act (15 U.S.C. 78m or 78o(d)) for a 

period of at least twelve calendar 

months; 

(iii) The issuer has filed at least one 

annual report pursuant to section 13(a) 

or 15(d) of the Act; and 

(iv) The issuer is not eligible to use 

Forms 10–KSB and 10–QSB (§ 249.310b 

and § 249.308b of this chapter) for its 

annual and quarterly reports. 

(2) Large accelerated filer. The term 

large accelerated filer means an issuer 

after it first meets the following 

conditions as of the end of its fiscal 

year: 

(i) The issuer had an aggregate 

worldwide market value of the voting 

and non-voting common equity held by 

its non-affiliates of $700 million or 

more, as of the last business day of the 

issuer’s most recently completed second 

fiscal quarter; 

(ii) The issuer has been subject to the 

requirements of section 13(a) or 15(d) of 

the Act for a period of at least twelve 

calendar months; 

(iii) The issuer has filed at least one 

annual report pursuant to section 13(a) 

or 15(d) of the Act; and 

(iv) The issuer is not eligible to use 

Forms 10–KSB and 10–QSB for its 

annual and quarterly reports. 

(3) Entering and exiting accelerated 

filer and large accelerated filer status. (i) 

The determination at the end of the 

issuer’s fiscal year for whether a nonaccelerated filer becomes an accelerated 

filer, or whether a non-accelerated filer 

or accelerated filer becomes a large 

accelerated filer, governs the annual 

report to be filed for that fiscal year, the 

quarterly and annual reports to be filed 

for the subsequent fiscal year and all 

annual and quarterly reports to be filed 

thereafter while the issuer remains an 

accelerated filer or large accelerated 

filer. 

(ii) Once an issuer becomes an 

accelerated filer, it will remain an 

accelerated filer unless the issuer 

determines at the end of a fiscal year 

that the aggregate worldwide market 

value of the voting and non-voting 

common equity held by non-affiliates of 

the issuer was less than $25 million, as 

of the last business day of the issuer’s 

most recently completed second fiscal 

quarter. An issuer making this 

determination becomes a nonaccelerated filer. The issuer will not 

become an accelerated filer again unless 

it subsequently meets the conditions in 

paragraph (1) of this definition. 

(iii) Once an issuer becomes a large 

accelerated filer, it will remain a large 

accelerated filer unless the issuer 

determines at the end of a fiscal year 

that the aggregate worldwide market 

value of the voting and non-voting 

common equity held by non-affiliates of 

the issuer was less than $75 million, as 

of the last business day of the issuer’s 

most recently completed second fiscal 

quarter. If the issuer’s aggregate 

worldwide market value was $25 

million or more, but less than $75 

million, as of the determination date, 

the issuer becomes an accelerated filer. 

If the issuer’s aggregate worldwide 

market value was less than $25 million 

as of the determination date, the issuer 

becomes a non-accelerated filer. An 

issuer will not become a large 

accelerated filer again unless it 

subsequently meets the conditions in 

paragraph (2) of this definition. 

(iv) The determination at the end of 

the issuer’s fiscal year for whether an 

accelerated filer becomes a nonaccelerated filer, or a large accelerated 

filer becomes an accelerated filer or a 

non-accelerated filer, governs the 

annual report to be filed for that fiscal 

year, the quarterly and annual reports to 

be filed for the subsequent fiscal year 

and all annual and quarterly reports to 

be filed thereafter while the issuer 

remains an accelerated filer or nonaccelerated filer. 

Note to paragraphs (1), (2) and (3): The 

aggregate worldwide market value of the 

issuer’s outstanding voting and non-voting 

common equity shall be computed by use of 

the price at which the common equity was 

last sold, or the average of the bid and asked 

prices of such common equity, in the 

principal market for such common equity. 

* * * * * 

9. Section 240.13a–10 is amended by 

revising paragraph (j) to read as follows: 

§ 240.13a–10 Transition reports. 

* * * * * 

(j)(1) For transition reports to be filed 

on the form appropriate for annual 

reports of the issuer, the number of days 

shall be: 

(i) 60 days for large accelerated filers 

(as defined in § 240.12b–2); 

(ii) 75 days for accelerated filers (as 

defined in § 240.12b–2); and 

(iii) 90 days for all other issuers; and 

(2) For transition reports to be filed on 

Form 10–Q or Form 10–QSB (§ 249.308a 

or § 249.308b of this chapter), the 

number of days shall be: 

(i) 40 days for large accelerated filers 

and accelerated filers (as defined in 

§ 240.12b–2); and 

(ii) 45 days for all other issuers. 

* * * * * 

10. Section 240.15d–10 is amended by 

revising paragraph (j) to read as follows: 

§ 240.15d–10 Transition reports. 

* * * * * 

(j)(1) For transition reports to be filed 

on the form appropriate for annual 

reports of the issuer, the number of days 

shall be: 

56876 Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Proposed Rules 

(i) 60 days for large accelerated filers 

(as defined in § 240.12b–2); 

(ii) 75 days for accelerated filers (as 

defined in § 240.12b–2); and 

(iii) 90 days for all other issuers; and 

(2) For transition reports to be filed on 

Form 10–Q or Form 10–QSB (§ 249.308a 

or § 249.308b of this chapter), the 

number of days shall be: 

(i) 40 days for large accelerated filers 

and accelerated filers (as defined in 

§ 240.12b–2); and 

(ii) 45 days for all other issuers. 

* * * * * 

PART 249—FORMS, SECURITIES 

EXCHANGE ACT OF 1934 

11. The authority citation for Part 249 

continues to read, in part, as follows: 

Authority: 15 U.S.C. 78a et seq. and 7201 

et seq.; and 18 U.S.C. 1350, unless otherwise 

noted. 

* * * * * 

12. Section 249.308a is amended by 

revising paragraph (a) to read as follows: 

§ 249.308a Form 10–Q, for quarterly and 

transition reports under sections 13 or 15(d) 

of the Securities Exchange Act of 1934. 

(a) Form 10–Q shall be used for 

quarterly reports under section 13 or 

15(d) of the Securities Exchange Act of 

1934 (15 U.S.C. 78m or 78o(d)), required 

to be filed pursuant to § 240.13a–13 or 

§ 240.15d–13 of this chapter. A 

quarterly report on this form pursuant to 

§ 240.13a–13 or § 240.15d–13 of this 

chapter shall be filed within the 

following period after the end of the 

first three fiscal quarters of each fiscal 

year, but no quarterly report need be 

filed for the fourth quarter of any fiscal 

year: 

(1) 40 days after the end of the fiscal 

quarter for large accelerated filers and 

accelerated filers (as defined in 

§ 240.12b–2 of this chapter); and 

(2) 45 days after the end of the fiscal 

quarter for all other registrants. 

* * * * * 

13. Form 10–Q (referenced in 

§ 249.308a) is amended by: 

a. Revising General Instruction A.1.; 

and 

b. Revising the check box on the cover 

page that starts ‘‘Indicate by check mark 

whether the registrant is an accelerated 

filer (as defined in Rule 12b–2 of the 

Exchange Act.) * * *.’’

The revisions read as follows: 

Note: The text of Form 10–Q does not, and 

this amendment will not, appear in the Code 

of Federal Regulations. 

UNITED STATES SECURITIES AND 

EXCHANGE COMMISSION 

Washington, D.C. 20549 

Form 10–Q 

General Instructions 

A. Rule as to Use of Form 10–Q. 

1. Form 10–Q shall be used for 

quarterly reports under Section 13 or 

15(d) of the Securities Exchange Act of 

1934 (15 U.S.C. 78m or 78o(d)), filed 

pursuant to Rule 13a–13 (17 CFR 

240.13a–13) or Rule 15d–13 (17 CFR 

240.15d–13). A quarterly report on this 

form pursuant to Rule 13a–13 or Rule 

15d–13 shall be filed within the 

following period after the end of each of 

the first three fiscal quarters of each 

fiscal year, but no report need be filed 

for the fourth quarter of any fiscal year: 

a. 40 days after the end of the fiscal 

quarter for large accelerated filers and 

accelerated filers (as defined in 17 CFR 

240.12b–2); and 

b. 45 days after the end of the fiscal 

quarter for all other registrants. 

* * * * * 

UNITED STATES SECURITIES AND 

EXCHANGE COMMISSION 

Washington, D.C. 20549 

Form 10–Q 

* * * * * 

Indicate by check mark whether the 

registrant is a large accelerated filer, an 

accelerated filer, or a non-accelerated 

filer. See definition of ‘‘accelerated filer 

and large accelerated filer’’ in Rule 12b–

2 of the Exchange Act. (Check one): 

Large accelerated filer . . . . 

Accelerated filer . . . . Non-accelerated 

filer . . . . 

* * * * * 

14. Section 249.310 is revised to read 

as follows: 

§ 249.310 Form 10–K, for annual and 

transition reports pursuant to sections 13 

or 15(d) of the Securities Exchange Act of 

1934. 

(a) This form shall be used for annual 

reports pursuant to sections 13 or 15(d) 

of the Securities Exchange Act of 1934 

(15 U.S.C. 78m or 78o(d)) for which no 

other form is prescribed. This form also 

shall be used for transition reports filed 

pursuant to section 13 or 15(d) of the 

Securities Exchange Act of 1934. 

(b) Annual reports on this form shall 

be filed within the following period: 

(1) 60 days after the end of the fiscal 

year covered by the report for large 

accelerated filers (as defined in 

§ 240.12b–2 of this chapter); 

(2) 75 days after the end of the fiscal 

year covered by the report for 

accelerated filers (as defined in 

§ 240.12b–2 of this chapter); and 

(3) 90 days after the end of the fiscal 

year covered by the report for all other 

registrants. 

(c) Transition reports on this form 

shall be filed in accordance with the 

requirements set forth in § 240.13a–10 

or § 240.15d–10 of this chapter 

applicable when the registrant changes 

its fiscal year end. 

(d) Notwithstanding paragraphs (b) 

and (c) of this section, all schedules 

required by Article 12 of Regulation S–

X (§§ 210.12–01–210.12–29 of this 

chapter) may, at the option of the 

registrant, be filed as an amendment to 

the report not later than 30 days after 

the applicable due date of the report. 

15. Form 10–K (referenced in 

§ 249.310) is amended by: 

a. Revising General Instruction A.; 

b. Revising the check box on the cover 

page that starts ‘‘Indicate by check mark 

whether the registrant is an accelerated 

filer (as defined in Rule 12b–2 of the 

Act). * * *;’’ and 

c. Revising Item 1B. of Part I. 

The revisions read as follows: 

Note: The text of Form 10–K does not, and 

this amendment will not, appear in the Code 

of Federal Regulations. 

UNITED STATES SECURITIES AND 

EXCHANGE COMMISSION 

Washington, DC 20549 

Form 10–K 

* * * * * 

General Instructions 

A. Rule as to Use of Form 10–K. 

(1) This Form shall be used for annual 

reports pursuant to Section 13 or 15(d) 

of the Securities Exchange Act of 1934 

(15 U.S.C. 78m or 78o(d)) (the ‘‘Act’’) for 

which no other form is prescribed. This 

Form also shall be used for transition 

reports filed pursuant to Section 13 or 

15(d) of the Act. 

(2) Annual reports on this Form shall 

be filed within the following period: 

(a) 60 days after the end of the fiscal 

year covered by the report for large 

accelerated filers (as defined in 17 CFR 

240.12b–2): 

(b) 75 days after the end of the fiscal 

year covered by the report for 

accelerated filers (as defined in 17 CFR 

240.12b–2); and 

(c) 90 days after the end of the fiscal 

year covered by the report for all other 

registrants. 

(3) Transition reports on this Form 

shall be filed in accordance with the 

requirements set forth in Rule 13a–10 

(17 CFR 240.13a–10) or Rule 15d–10 (17 

CFR 240.15d–10) applicable when the 

registrant changes its fiscal year end. 

(4) Notwithstanding paragraphs (2) 

and (3) of this General Instruction A., all 

schedules required by Article 12 of 

Regulation S–X (17 CFR 210.12–01 ‘‘

210.12–29) may, at the option of the 

Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Proposed Rules 56877 

registrant, be filed as an amendment to 

the report not later than 30 days after 

the applicable due date of the report. 

* * * * * 

UNITED STATES SECURITIES AND 

EXCHANGE COMMISSION 

Washington, DC 20549 

Form 10–K 

* * * * * 

Indicate by check mark whether the 

registrant is a large accelerated filer, an 

accelerated filer, or a non-accelerated 

filer. See definition of ‘‘accelerated filer 

and large accelerated filer’’ in Rule 12b–

2 of the Exchange Act. (Check one): 

Large accelerated filer . . . . 

Accelerated filer . . . . 

Non-accelerated filer . . . . 

* * * * * 

Part I 

* * * * * 

Item 1. * * * 

Item 1B. Unresolved Staff Comments. 

If the registrant is an accelerated filer 

or a large accelerated filer, as defined in 

Rule 12b–2 of the Exchange Act 

(§ 240.12b–2 of this chapter), or is a 

well-known seasoned issuer as defined 

in Rule 405 of the Securities Act 

(§ 230.405 of this chapter) and has 

received written comments from the 

Commission staff regarding its periodic 

or current reports under the Act not less 

than 180 days before the end of its fiscal 

year to which the annual report relates, 

and such comments remain unresolved, 

disclose the substance of any such 

unresolved comments that the registrant 

believes are material. Such disclosure 

may provide other information 

including the position of the registrant 

with respect to any such comment. 

* * * * * 

16. Form 20–F (referenced in 

§ 249.220f) is amended by: 

a. Adding a check box to the cover 

page before the paragraph that starts 

‘‘Indicate by check mark which 

financial statement item the registrant 

has elected to follow * * *’’ and 

b. Revising Item 4A. to Part I. 

The addition and revision read as 

follows: 

Note: The text of Form 20–F does not, and 

this amendment will not, appear in the Code 

of Federal Regulations. 

UNITED STATES SECURITIES AND 

EXCHANGE COMMISSION 

Washington, DC 20549 

Form 20–F 

* * * * * 

Indicate by check mark whether the 

registrant is a large accelerated filer, an 

accelerated filer, or a non-accelerated 

filer. See definition of ‘‘accelerated filer 

and large accelerated filer’’ in Rule 12b–

2 of the Exchange Act. (Check one): 

Large accelerated filer . . . . 

Accelerated filer . . . . 

Non-accelerated filer . . . . 

* * * * * 

Part 1 

* * * * * 

Item 4. * * * 

Item 4A. Unresolved Staff Comments 

If the registrant is an accelerated filer 

or a large accelerated filer, as defined in 

Rule 12b–2 of the Exchange Act 

(§ 240.12b–2 of this chapter), or is a 

well-known seasoned issuer as defined 

in Rule 405 of the Securities Act 

(§ 230.405 of this chapter) and has 

received written comments from the 

Commission staff regarding its periodic 

reports under the Exchange Act not less 

than 180 days before the end of its fiscal 

year to which the annual report relates, 

and such comments remain unresolved, 

disclose the substance of any such 

unresolved comments that the registrant 

believes are material. Such disclosure 

may provide other information 

including the position of the registrant 

with respect to any such comment. 

* * * * * 

Dated: September 22, 2005. 

By the Commission. 

Jonathan G. Katz, 

Secretary. 

[FR Doc. 05–19427 Filed 9–28–05; 8:45 am] 

BILLING CODE 8010–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–105346–03] 

RIN 1545–BB92 

Partnership Equity for Services; 

Hearing Cancellation 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Cancellation of notice of public 

hearing on proposed rulemaking. 

SUMMARY: This document cancels a 

public hearing on proposed regulations 

relating to the tax treatment of certain 

transfers of partnership equity in 

connection with the performance of 

services. 

DATES: The public hearing originally 

scheduled for October 5, 2005, at 10 

a.m., is cancelled. 

FOR FURTHER INFORMATION CONTACT: 

Robin R. Jones of the Publications and 

Regulations Branch, Legal Processing 

Division, Associate Chief Counsel 

(Procedure and Administration) at (202) 

622–7109 (not a toll-free number). 

SUPPLEMENTARY INFORMATION: A notice 

of proposed rulemaking and notice of 

public hearing that appeared in the 

Federal Register on May 24, 2005 (70 

FR 29675) announced that a public 

hearing was scheduled for October 5, 

2005, at 10 a.m., in the IRS Auditorium, 

Internal Revenue Service Building, 1111 

Constitution Avenue, NW., Washington, 

DC. The subject of the public hearing is 

under section 83 of the Internal Revenue 

Code. The public comment period for 

these regulations expired on September 

14, 2005. 

The notice of proposed rulemaking 

and notice of public hearing, instructed 

those interested in testifying at the 

public hearing to submit a request to 

speak and an outline of the topics to be 

addressed. As of Thursday, September 

22, 2005, no one has requested to speak. 

Therefore, the public hearing scheduled 

for October 5, 2005, is cancelled. 

Cynthia E. Grigsby, 

Acting Chief, Publications and Regulations 

Branch, Legal Processing Division, Associate 

Chief Counsel, (Procedure and 

Administration). 

[FR Doc. 05–19389 Filed 9–28–05; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 601 

[REG–133578–05] 

RIN 1545–BE74 

Dividends Paid Deduction for Stock 

Held in Employee Stock Ownership 

Plan; Hearing 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of public hearing on 

proposed rulemaking. 

SUMMARY: This document contains a 

notice of public hearing on proposed 

regulations relating to employee stock 

ownership plans. 

DATES: The public hearing is being held 

on January 18, 2006, at 10 a.m. The IRS 

must receive outlines of the topics to be 

discussed at the hearing by November 

23, 2005. 

ADDRESSES: The public hearing is being 

held at 10 a.m. in the IRS Auditorium, 

Internal Revenue Service Building, 1111