[Federal Register Volume 73, Number 176 (Wednesday, September 10, 2008)]
[Rules and Regulations]
[Pages 52752-52769]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-20995]



[[Page 52751]]

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

Part III





Securities and Exchange Commission





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



17 CFR Parts 239, 240, and 249



Exemption From Registration Under Section 12(G) of the Securities 
Exchange Act of 1934 for Foreign Private Issuers; Final Rule

Federal Register / Vol. 73, No. 176 / Wednesday, September 10, 2008 / 
Rules and Regulations

[[Page 52752]]


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

SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 239, 240 and 249

[Release No. 34-58465; International Series Release No. 1309; File No. 
S7-04-08]
RIN 3235-AK04


Exemption From Registration Under Section 12(G) of the Securities 
Exchange Act of 1934 for Foreign Private Issuers

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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

SUMMARY: We are adopting amendments to the rule that exempts a foreign 
private issuer from having to register a class of equity securities 
under Section 12(g) of the Securities Exchange Act of 1934 (``Exchange 
Act'') based on the submission to the Commission of certain information 
published by the issuer outside the United States. The exemption allows 
a foreign private issuer to have its equity securities traded in the 
U.S. over-the-counter market without registration under Section 12(g). 
The adopted rule amendments will eliminate the current written 
application and paper submission requirements under Rule 12g3-2(b) by 
automatically exempting from Exchange Act Section 12(g) a foreign 
private issuer that meets specified conditions. Those conditions will 
require an issuer to maintain a listing of its equity securities in its 
primary trading market located outside the United States, and require 
it to publish electronically in English specified non-United States 
disclosure documents. As a result, the adopted amendments should make 
it easier for U.S. investors to gain access to a foreign private 
issuer's material non-United States disclosure documents and thereby to 
make better informed decisions regarding whether to invest in that 
issuer's equity securities through the over-the-counter market in the 
United States or otherwise. As is currently the case, issuers must 
continue to register their securities under the Exchange Act to have 
them listed on a national securities exchange or traded on the OTC 
Bulletin Board.

DATES: Effective Date: October 10, 2008.

FOR FURTHER INFORMATION CONTACT: Elliot Staffin, Special Counsel, at 
(202) 551-3450, in the Office of International Corporate Finance, 
Division of Corporation Finance, U.S. Securities and Exchange 
Commission, 100 F Street, NE., Washington, DC 20549-3628.

SUPPLEMENTARY INFORMATION: We are adopting amendments to Commission 
Rules 12g3-2 \1\ and 15c2-11 \2\ under the Exchange Act,\3\ Forms 
15F,\4\ 40-F,\5\ and 6-K \6\ under the Exchange Act, and Form F-6 \7\ 
under the Securities Act of 1933 (``Securities Act'').\8\
---------------------------------------------------------------------------

    \1\ 17 CFR 240.12g3-2.
    \2\ 17 CFR 240.15c2-11.
    \3\ 15 U.S.C. 78a et seq.
    \4\ 17 CFR 249.324.
    \5\ 17 CFR 249.240f
    \6\ 17 CFR 249.306.
    \7\ 17 CFR 239.36.
    \8\ 15 U.S.C. 77a et seq.
---------------------------------------------------------------------------

Table of Contents

I. Executive Summary and Background
    A. Introduction
    1. Current Rule 12g3-2(b) Requirements
    2. Proposed Rule 12g3-2 Amendments
    B. Principal Comments Regarding the Proposed Rule Amendments
    C. Summary of the Adopted Rule Amendments
II. Discussion
    A. Foreign Listing Condition
    1. The Primary Trading Market Definition
    2. Elimination of the Proposed 20 Percent Trading Volume 
Condition
    3. Treatment of Compensatory Stock Options
    B. Non-Exchange Act Reporting Condition
    1. Non-Reporting Issuers
    2. Deregistered Issuers
    C. Electronic Publishing of Non-U.S. Disclosure Documents
    1. Electronic Publishing Requirement To Claim Exemption
    2. Electronic Publishing Requirement To Maintain Exemption
    3. English Translation Requirement
    D. Elimination of the Written Application Requirement
    E. Duration of the Amended Rule 12g3-2(b) Exemption
    F. Elimination of the Successor Issuer Prohibition
    G. Elimination of the Rule 12g3-2(b) Exception for MJDS Filers
    H. Elimination of the ``Automated Inter-Dealer Quotation 
System'' Prohibition and Related Grandfathering Provision
    I. Revisions to Form F-6
    J. Amendment of Exchange Act Rule 15c2-11
    K. Transition Periods
    1. Regarding Section 12 Registration
    2. Regarding Processing of Paper Submissions
III. Paperwork Reduction Act
    A. Rule 12g3-2(b) Submissions or Publications
    B. Form F-6
IV. Cost-Benefit Analysis
    A. Expected Benefits
    B. Expected Costs
V. Consideration of Impact on the Economy, Burden on Competition and 
Promotion of Efficiency, Competition and Capital Formation
VI. Regulatory Flexibility Act Certification
VII. Statutory Basis and Text of Rule Amendments

I. Executive Summary and Background

A. Introduction

    Exchange Act Rule 12g3-2(b) \9\ exempts a foreign private issuer 
\10\ from Section 12(g) registration \11\ if, among other requirements, 
the issuer furnishes to the Commission on an ongoing basis information 
it has made public or is required to make public under the laws of its 
jurisdiction of incorporation, organization or domicile, pursuant to 
its non-U.S. stock exchange filing requirements, or that it has 
distributed or is required to distribute to its security holders 
(collectively, its ``non-U.S. disclosure documents'').\12\ The 
Commission adopted Rule 12g3-2(b) more than 40 years ago in order to 
exempt from Section 12(g) registration foreign companies that have not 
obtained a listing on a national securities exchange or otherwise 
sought a public market for their equity securities in the United 
States.\13\
---------------------------------------------------------------------------

    \9\ 17 CFR 240.12g3-2(b).
    \10\ See the definition of foreign private issuer at Exchange 
Act Rule 3b-4(c) (17 CFR 240.3b-4(c)).
    \11\ When read in conjunction with Exchange Act Rules 12g-1 (17 
CFR 240.12g-1) and 12g3-2(a) (17 CFR 240.12g3-2(a)), Exchange Act 
Section 12(g) requires an issuer to file an Exchange Act 
registration statement regarding a class of equity securities within 
120 days of the last day of its fiscal year if, on that date, the 
number of its record holders is 500 or greater, the number of its 
U.S. resident holders is 300 or more, and the issuer's total assets 
exceed $10 million.
    \12\ Current Exchange Act Rule 12g3-2(b)(1)(iii) (17 CFR 
240.12g3-2(b)(1)(iii)).
    \13\ Release No. 34-8066 (April 28, 1967). For additional 
background on the initial adoption of Rule 12g3-2(b), see Part I.A 
of Release No. 34-57350 (February 19, 2008), 73 FR 10102 (February 
25, 2008) (``Proposing Release'').
---------------------------------------------------------------------------

    Acquiring the Rule 12g3-2(b) exemption enables a foreign private 
issuer to have its equity securities traded on a limited basis in the 
over-the-counter market in the United States while avoiding 
registration under Exchange Act Section 12(g). Typically a foreign 
private issuer obtains the Rule 12g3-2(b) exemption in order to have 
established an unlisted, sponsored or unsponsored depositary facility 
for its American Depositary Receipts (``ADRs'').\14\ Establishing the 
Rule 12g3-

[[Page 52753]]

2(b) exemption also permits registered broker-dealers to fulfill their 
current information obligations concerning foreign private issuers' 
securities for which they seek to publish quotations.\15\ It further 
facilitates resales of an issuer's securities to qualified 
institutional buyers (``QIBs'') under Rule 144A.\16\
---------------------------------------------------------------------------

    \14\ An ADR is a negotiable instrument that represents an 
ownership interest in a specified number of securities, which the 
securities holder has deposited with a designated bank depositary. 
The filing of Securities Act Form F-6 (17 CFR 239.36) is required in 
order to establish an ADR facility. The eligibility criteria for the 
use of Form F-6 include the requirement that the issuer of the 
deposited securities have a reporting obligation under Exchange Act 
Section 13(a) or have established the exemption under Rule 12g3-
2(b). See General Instruction I.A.3 of Form F-6. While required to 
be registered on Form F-6 under the Securities Act, ADRs are exempt 
from registration under Exchange Act Section 12(g) pursuant to 
current Exchange Act Rule 12g3-2(c) (17 CFR 240.12g3-2(c)).
    \15\ Brokers currently can comply with their obligations under 
Exchange Act Rule 15c2-11 (17 CFR 240.15c2-11) when a foreign 
company has established and maintains the Rule 12g3-2(b) exemption 
by, in part, reviewing the information furnished to the Commission 
under the exemption. See Rule 15c2-11(a)(4) (17 CFR 240.15c2-
11(a)(4)).
    \16\ See Securities Act Rule 144A(d)(4) (17 CFR 230.144A(d)(4)).
---------------------------------------------------------------------------

1. Current Rule 12g3-2(b) Requirements
    Currently, in order to establish the Exchange Act Rule 12g3-2(b) 
exemption, a foreign private issuer must initially submit to the 
Commission a list of its non-U.S. disclosure requirements as well as 
copies of its non-U.S. disclosure documents published since the 
beginning of its last fiscal year.\17\ An issuer must further submit 
its non-U.S. disclosure documents on an ongoing basis in order to 
maintain the exemption. The current Rule provides that an issuer need 
only submit copies of information that is material to an investment 
decision for the purpose of obtaining or maintaining the exemption.\18\ 
At the time of the initial submission, an issuer must also provide the 
Commission with the number of U.S. holders of its equity securities and 
the percentage held by them, as well as a brief description of how its 
U.S. holders acquired those shares.\19\
---------------------------------------------------------------------------

    \17\ Current Exchange Act Rule 12g3-2(b)(1)(i) (17 CFR 240.12g3-
2(b)(1)(i)). Historically, an issuer has submitted its home 
jurisdiction materials as part of a letter application to the 
Commission, which has been processed through the Office of 
International Corporate Finance in the Division of Corporation 
Finance. The written application process does not apply to an issuer 
that receives the Rule 12g3-2(b) exemption upon the effectiveness of 
its Exchange Act deregistration pursuant to Exchange Act Rule 12h-6 
(17 CFR 240.12h-6).
    \18\ Current Exchange Act Rule 12g3-2(b)(3) (17 CFR 240.12g3-
2(b)(3)). As examples of material information, the Rule lists an 
issuer's financial condition or results of operations, changes in 
its business, the acquisition or disposition of assets, the 
issuance, redemption or acquisition of securities, changes in 
management or control, the granting of options or other payment to 
directors or officers, and transactions with directors, officers or 
principal security holders.
    \19\ Current Exchange Act Rule 12g3-2(b)(1)(v) (17 CFR 240.12g3-
2(b)(1)(v)). An issuer must also disclose the dates and 
circumstances of the most recent public distribution of securities 
by the issuer or an affiliate.
---------------------------------------------------------------------------

    Rule 12g3-2(b) currently requires that an applicant submit all of 
the necessary non-U.S. disclosure documents and other information 
before the date that a registration statement would otherwise become 
due under Section 12(g).\20\ Once an issuer has timely submitted its 
application and obtained the exemption, the issuer may surpass any of 
the record holder, U.S. resident holder, or asset thresholds that would 
otherwise trigger an obligation to register a class of securities under 
Section 12(g) or the rules thereunder, as long as it maintains the 
exemption by submitting the required non-U.S. disclosure documents.
---------------------------------------------------------------------------

    \20\ Current Exchange Act Rule 12g3-2(b)(2) (17 CFR 240.12g3-
2(b)(2)).
---------------------------------------------------------------------------

    For most of its 40-year history, the Rule 12g3-2(b) disclosure 
regime has mandated paper submissions. Even after the adoption of EDGAR 
filing rules for foreign private issuers, the Commission has required a 
foreign private issuer to submit its initial Rule 12g3-2(b) supporting 
materials in paper.\21\ The Commission has based this treatment of Rule 
12g3-2(b) materials on the analogous treatment of applications for an 
exemption from Exchange Act reporting obligations filed pursuant to 
Exchange Act Section 12(h).\22\
---------------------------------------------------------------------------

    \21\ See Release No. 33-8099 (May 14, 2002), 67 FR 36678 (May 
24, 2002).
    \22\ 15 U.S.C. 78l(h). We require the filing of Section 12(h) 
exemptive applications in paper pursuant to Regulation S-T Rule 
101(c)(16) (17 CFR 232.101(c)(16)).
---------------------------------------------------------------------------

    In March 2007, the Commission voted to adopt amendments to Rule 
12g3-2, which enable a foreign private issuer to claim the Rule 12g3-
2(b) exemption immediately upon the effectiveness of its termination of 
Exchange Act registration and reporting pursuant to contemporaneously 
adopted Exchange Act Rule 12h-6.\23\ The March 2007 amendments require 
an issuer that has obtained the Rule 12g3-2(b) exemption, upon the 
effectiveness of its termination of registration and reporting pursuant 
to Rule 12h-6, to publish specified non-U.S. disclosure documents in 
English on an ongoing basis on its Internet Web site or through an 
electronic information delivery system generally available to the 
public in its primary trading market, rather than submit that 
information in paper to the Commission.\24\ The amendments further 
permit, but do not require, a foreign private issuer that has obtained 
or will obtain the Rule 12g3-2(b) exemption, upon application to the 
Commission and not pursuant to Rule 12h-6, to publish electronically in 
the same manner its non-U.S. disclosure documents required to maintain 
the exemption.\25\
---------------------------------------------------------------------------

    \23\ See Release No. 34-55540 (March 27, 2007), 72 FR 16934 
(April 5, 2007).
    \24\ Current Exchange Act Rule 12g3-2(e) (17 CFR 240.12g3-2(e)).
    \25\ Current Exchange Act Rule 12g3-2(f) (17 CFR 240.12g3-2(f)).
---------------------------------------------------------------------------

    The March 2007 amendments further clarified the English translation 
requirements under Rule 12g3-2(b).\26\ The amendments provide that, 
when electronically publishing its non-U.S. disclosure documents 
required to maintain the Rule 12g3-2(b) exemption, at a minimum, a 
foreign private issuer must electronically publish English translations 
of the following documents if in a foreign language:
---------------------------------------------------------------------------

    \26\ Current Exchange Act Rule 12g3-2(b)(4) (17 CFR 240.12g3-
2(b)(4)) provides that copies furnished to the Commission of press 
releases and any materials distributed directly to security holders 
must be in English, and states that English summaries and versions 
may be used instead of English translations. However, the rule does 
not specify what other documents must be translated fully into 
English, and when summaries or versions may be used.
---------------------------------------------------------------------------

    <bullet> Its annual report, including or accompanied by annual 
financial statements;
    <bullet> Interim reports that include financial statements;
    <bullet> Press releases; and
    <bullet> All other communications and documents distributed 
directly to security holders of each class of securities to which the 
exemption relates.\27\
---------------------------------------------------------------------------

    \27\ Note 1 to Current Exchange Act Rule 12g3-2(e).
---------------------------------------------------------------------------

2. Proposed Rule 12g3-2 Amendments
    In February 2008, we proposed amendments to Rule 12g3-2(b) in order 
to adapt that exemptive regime to the several significant developments 
occurring since its initial adoption four decades ago.\28\ Those 
developments include the increased globalization of securities markets, 
advances in information technology, and the increased use of ADR 
facilities by foreign companies to trade their securities in the United 
States, which have multiplied the number of foreign companies engaged 
in cross-border activities, as well as increased the amount of U.S. 
investor interest in the securities of foreign companies. Just as those 
developments led us to re-evaluate and revise the Commission rules 
governing when a foreign private issuer may terminate its Exchange Act 
registration and reporting obligations, so those same factors have led 
us to reconsider as well the Commission rules that determine when a 
foreign private issuer must enter the Section 12(g) registration 
regime.
---------------------------------------------------------------------------

    \28\ Release No. 34-57350.
---------------------------------------------------------------------------

    We proposed to amend Exchange Act Rule 12g3-2 to permit a foreign 
private issuer to claim the Rule 12g3-2(b) exemption, without having to 
submit an application to, or otherwise notify, the Commission, as long 
as:

[[Page 52754]]

    <bullet> The issuer is not required to file or furnish reports 
under Exchange Act Section 13(a) \29\ or 15(d);
---------------------------------------------------------------------------

    \29\ 15 U.S.C. 78m(a).
---------------------------------------------------------------------------

    <bullet> The issuer currently maintains a listing of the subject 
class of securities on one or more exchanges in a foreign jurisdiction 
that, either singly or together with the trading of the same class of 
the issuer's securities in another foreign jurisdiction, constitutes 
the primary trading market for those securities;
    <bullet> Either:
    [cir] The average daily trading volume (``ADTV'') of the subject 
class of securities in the United States for the issuer's most recently 
completed fiscal year has been no greater than 20 percent of the 
average daily trading volume of that class of securities on a worldwide 
basis for the same period; or
    [cir] The issuer has terminated its registration of a class of 
securities under Exchange Act Section 12(g), or terminated its 
obligation to file or furnish reports under Exchange Act Section 15(d), 
pursuant to Exchange Act Rule 12h-6; and
    <bullet> Unless claiming the exemption in connection with or 
following its recent Exchange Act deregistration, the issuer has 
published specified non-U.S. disclosure documents, required to be made 
public from the first day of its most recently completed fiscal year, 
in English on its Internet Web site or through an electronic 
information delivery system generally available to the public in its 
primary trading market.
    As proposed, a foreign private issuer that met the above 
requirements would be immediately exempt from Exchange Act registration 
under Rule 12g3-2(b) even if, on the last day of its most recently 
completed fiscal year, it exceeded the asset and shareholder thresholds 
for Section 12(g) registration, and although the 120-day window for 
filing a registration statement under Section 12(g) had elapsed. 
Further, as proposed, an issuer could immediately claim the Rule 12g3-
2(b) exemption upon the effectiveness of, or following its recent 
Exchange Act deregistration, whether pursuant to the older exit rules 
of Rule 12g-4 or 12h-3,\30\ or Rule 12h-6, or the suspension of its 
reporting obligations under Section 15(d),\31\ if it met the above 
requirements other than the electronic publication condition for its 
most recently completed fiscal year.
---------------------------------------------------------------------------

    \30\ 17 CFR 240.12g-4 or 240.12h-3. Both Rules 12g-4 and 12h-3 
permit an issuer to exit the Exchange Act reporting regime following 
the filing of a Form 15 (17 CFR 249.323), which certifies that the 
issuer has fewer than 300 record holders or less than 500 record 
holders and total assets not exceeding $10 million on the last day 
of each of its most recent 3 fiscal years.
    \31\ An issuer may suspend its Section 15(d) reporting 
obligations under Rule 12h-3 or Section 15(d) itself. The statutory 
section provides that suspension occurs if, on the first day of the 
fiscal year, other than the year in which the issuer's registration 
statement went effective, the issuer's record holders number less 
than 300.
---------------------------------------------------------------------------

    The proposed rules would require any issuer, whether a prior 
registrant or not, to maintain the Rule 12g3-2(b) exemption by 
publishing its specified non-U.S. disclosure documents on an ongoing 
basis and for each subsequent fiscal year, in English, on its Internet 
Web site or through an electronic information delivery system generally 
available to the public in its primary trading market. The proposed 
rules would require the electronic publication in English of the same 
types of information required under the March 2007 amendments.
    As proposed, the Rule 12g3-2(b) exemption would remain in effect 
until:
    <bullet> The issuer no longer satisfies the electronic publication 
condition;
    <bullet> The issuer no longer maintains a listing for the subject 
class of securities on one or more exchanges in its primary trading 
market;
    <bullet> The ADTV of the subject class of securities in the United 
States exceeds 20 percent of the average daily trading volume of that 
class of securities on a worldwide basis for the issuer's most recently 
completed fiscal year, other than the year in which the issuer first 
claims the exemption; or
    <bullet> The issuer registers a class of securities under Exchange 
Act Section 12 or incurs reporting obligations under Exchange Act 
Section 15(d).

B. Principal Comments Regarding the Proposed Rule Amendments

    We received letters from 32 commenters, including law firms, 
business, industry and legal trade associations, depositary banks, 
financial advisory firms, and an OTC market participant. Most 
commenters strongly supported the Commission's proposals to eliminate 
the written application process for the Exchange Act Rule 12g3-2(b) 
exemption and replace the paper submission process for an issuer's non-
U.S. disclosure documents with mandated electronic publication as a 
condition to claiming and maintaining the exemption.
    However, most commenters were critical of the proposal that, as a 
condition to claiming and maintaining the Rule 12g3-2(b) exemption, a 
foreign private issuer's U.S. ADTV must be no greater than 20% of its 
worldwide ADTV for the issuer's most recently completed fiscal year. 
Those commenters urged us either to eliminate the trading volume 
condition in its entirety or else increase the U.S. ADTV threshold to a 
higher percentage, such as 35%, 40% or 50% of worldwide ADTV. Some 
commenters also requested that we impose a trading volume condition 
only as an initial requirement for claiming the exemption, and not as a 
condition for continued use in subsequent years.
    Other areas receiving comment included whether:
    <bullet> To adopt the foreign listing condition as a requirement 
for either initially claiming the exemption or maintaining it in 
subsequent years;
    <bullet> To permit an issuer to publish English summaries, brief 
English descriptions, or English versions instead of English 
translations of its non-U.S. disclosure documents;
    <bullet> To provide a period of time for an issuer to cure a 
deficiency in its compliance with one or more conditions before it 
would be required to register under the Exchange Act;
    <bullet> To require an issuer to provide some form of public notice 
that it was claiming and intended to rely on the Rule 12g3-2(b) 
exemption;
    <bullet> To modify Form F-6 in light of the rule amendments, 
including whether to adopt provisions regarding unsponsored ADR 
facilities; and
    <bullet> To grandfather any issuer having the Rule 12g3-2(b) 
exemption before the effective date of the rule amendments.

C. Summary of the Adopted Rule Amendments

    We have carefully considered commenters' concerns regarding the 
proposed amendments to Rule 12g3-2(b), and have addressed many of them 
in the rule amendments that we are adopting today. Most notably, we 
have determined to adopt a trading volume measure solely as part of the 
foreign listing/primary trading market condition, and not as a separate 
condition. As adopted, the rule amendments will enable a foreign 
private issuer to claim the Rule 12g3-2(b) exemption,\32\ without 
having to submit a written application to the Commission, as long as 
the issuer:
---------------------------------------------------------------------------

    \32\ By the use of the term ``claim'' in his release, we do not 
mean to imply that a foreign private issuer must apply for or 
provide notice of the Rule 12g3-2(b) exemption in order to qualify 
for that exemption. Rather, as amended, the Rule 12g3-2(b) exemptive 
regime is meant to be self-executing.
---------------------------------------------------------------------------

    <bullet> Currently maintains a listing of the subject class of 
securities on one or more exchanges in its primary trading market, 
which is defined to mean, as proposed, that:

[[Page 52755]]

    [cir] At least 55 percent of the trading in the subject class of 
securities on a worldwide basis took place in, on or through the 
facilities of a securities market or markets in a single foreign 
jurisdiction or in no more than two foreign jurisdictions during the 
issuer's most recently completed fiscal year; and
    [cir] If a foreign private issuer aggregates the trading of its 
subject class of securities in two foreign jurisdictions, the trading 
for the issuer's securities in at least one of the two foreign 
jurisdictions is greater than the trading in the United States for the 
same class of the issuer's securities;
    <bullet> The issuer is not required to file or furnish reports 
under Exchange Act Section 13(a) or 15(d), as proposed; and
    <bullet> Unless claiming the exemption upon or following its recent 
Exchange Act deregistration, the issuer has published in English 
specified non-U.S. disclosure documents, from the first day of its most 
recently completed fiscal year, on its Internet Web site or through an 
electronic information delivery system generally available to the 
public in its primary trading market.\33\
---------------------------------------------------------------------------

    \33\ These rule amendments relate solely to the application of 
Exchange Act Section 12(g) and not to antifraud or other provisions 
of the U.S. federal securities laws.
---------------------------------------------------------------------------

    The adopted rule amendments will require an issuer to maintain the 
Rule 12g3-2(b) exemption by electronically publishing the specified 
non-U.S. disclosure documents for subsequent years. An issuer will lose 
the exemption if it:
    <bullet> Fails to publish electronically the required non-U.S. 
disclosure documents;
    <bullet> No longer meets the foreign listing/primary trading market 
condition; or
    <bullet> Incurs Exchange Act reporting obligations.
    We are adopting the rule amendments regarding English translation 
requirements, as proposed. While we decline to permit the use of 
``brief English descriptions'' or ``English versions,'' we have 
clarified that, generally, an issuer may provide an English summary for 
a non-U.S. disclosure document if such a summary would be permitted for 
a document submitted under cover of Form 6-K \34\ or Exchange Act Rule 
12b-12(d)(3).\35\
---------------------------------------------------------------------------

    \34\ 17 CFR 249.306.
    \35\ 17 CFR 240.12b-12(d)(3).
---------------------------------------------------------------------------

    We are adopting conforming amendments to Form F-6 and Rule 15c2-11. 
Other adopted rule amendments include eliminating, as proposed:
    <bullet> The current provision that generally prohibits the Rule 
12g3-2(b) exemption tosuccessor issuers;
    <bullet> The rarely used ability of a Canadian issuer filing under 
the Multijurisdictional Disclosure System (``MJDS'') to obtain the Rule 
12g3-2(b) exemption for a class of equity securities while having 
Exchange Act reporting obligations regarding a class of debt 
securities;
    <bullet> The current provision that prohibits an issuer from 
relying on the Rule 12g3-2(b) exemption if its securities are traded 
through an automated inter-dealer quotation system; and
    <bullet> The related provision grandfathering Nasdaq-traded 
companies meeting specified conditions from Rule 12g3-2(b)'s automated 
inter-dealer quotation system prohibition.
    While the adopted rule amendments do not include a grandfathering 
provision, we are establishing, as proposed, a three-year transition 
period to provide sufficient time for any current Rule 12g3-2(b)-exempt 
issuer, which will no longer qualify for the exemption under the rule 
amendments, either to comply with all of the conditions of amended Rule 
12g3-2(b) or register under the Exchange Act. We also are establishing, 
as proposed, a three-month transition period following the 
effectiveness of the rule amendments during which the Commission will 
accept and process any non-U.S. disclosure documents submitted in paper 
by Rule 12g3-2(b)-exempt issuers. Thereafter, the Commission will no 
longer process paper Rule 12g3-2(b) submissions.
    By enabling a qualified foreign private issuer to claim the Rule 
12g3-2(b) exemption automatically, and without regard to the number of 
its U.S. shareholders, the adopted rule amendments should encourage 
more foreign private issuers to claim the Rule 12g3-2(b) exemption. 
That would enable the establishment of additional ADR facilities, make 
it easier for broker-dealers to fulfill their obligations under 
Exchange Act Rule 15c2-11 with respect to the equity securities of a 
non-reporting foreign private issuer, and facilitate the resale of a 
foreign company's securities to QIBs in the United States under 
Securities Act Rule 144A. Consequently, the adopted rule amendments 
should foster the increased trading of a foreign private issuer's 
securities in the U.S. over-the-counter market.
    By requiring the electronic publication in English of specified 
non-U.S. disclosure documents for an issuer claiming the Rule 12g3-2(b) 
exemption, the adopted amendments should make it easier for U.S. 
investors to gain access to a foreign private issuer's material non-
U.S. disclosure documents, and make better informed decisions regarding 
whether to invest in that issuer's equity securities through the over-
the-counter market in the United States or otherwise. Thus, the adopted 
amendments should foster increased efficiency in the trading of the 
issuer's securities for U.S. investors.

II. Discussion

A. Foreign Listing Condition

    We are adopting, as proposed, the condition that, in order to be 
eligible to claim the Rule 12g3-2(b) exemption, an issuer must 
currently maintain a listing of the subject class of securities on one 
or more exchanges in a foreign jurisdiction that, either singly or 
together with the trading of the same class of the issuer's securities 
in another foreign jurisdiction, constitutes the primary trading market 
for those securities.\36\ This condition is substantially similar to 
the foreign listing condition adopted as part of the March 2007 
amendments.\37\
---------------------------------------------------------------------------

    \36\ Exchange Act Rule 12g3-2(b)(1)(ii) (17 CFR 240.12g3-
2(b)(1)(ii)).
    \37\ Exchange Act Rule 12h-6(a)(3) (17 CFR 240.12h-6(a)(3)).
---------------------------------------------------------------------------

    The purpose of the foreign listing condition is to help assure that 
there is a non-U.S. jurisdiction that principally regulates and 
oversees the trading of the issuer's securities and the issuer's 
disclosure obligations to investors. This foreign listing condition 
increases the likelihood that the principal pricing determinants for a 
foreign private issuer's securities are located outside the United 
States, and makes more likely the availability of a set of non-U.S. 
securities disclosure documents to which a U.S. investor may turn for 
material information when making investment decisions about the 
issuer's securities in the U.S. over-the-counter market.
    Several commenters supported the proposed foreign listing condition 
substantially as proposed or at least in principle.\38\ Some commenters 
supported a condition that would require an issuer to be subject to a 
recognized foreign regulatory authority and a set of public disclosure 
obligations, but would not require a foreign listing.\39\ We decline to 
adopt such a provision because, among other factors, we believe it 
could be difficult for market participants to determine whether an 
issuer is in fact subject to a

[[Page 52756]]

complying foreign regulatory regime. In addition, a listing on a 
securities market generally involves the affirmative action of an 
issuer to be traded on that market and to be subject to the listing 
requirements of that market, including applicable ongoing disclosure 
requirements. The foreign listing requirement therefore supports one of 
the underlying purposes of the Rule 12g3-2(b) exemption--to make 
material information available to investors.
---------------------------------------------------------------------------

    \38\ See, for example, the letter of the Bank of New York 
(``BNY''), dated April 25, 2008. This letter, along with other 
comment letters, is available at http://www.sec.gov/comments/s7-04-08/s70408.shtml.
    \39\ See, for example, the letter of Sullivan & Cromwell, dated 
April 25, 2008.
---------------------------------------------------------------------------

    A few commenters opposed the foreign listing condition on the 
grounds that it would impose costs on those issuers that have not yet 
obtained a foreign listing, and which are likely to be smaller 
companies.\40\ As we noted when proposing the rule amendments, the 
foreign listing condition is consistent with the Commission staff's 
past and current practice of administering the Rule 12g3-2(b) 
exemption. Any issuer, regardless of size, has had to obtain a foreign 
listing before it could receive the exemption. Accordingly, the adopted 
rule should impose no new burdens in this regard.\41\
---------------------------------------------------------------------------

    \40\ See, for example, the letter of the American Bar 
Association, Business Law Section (``ABA''), dated April 30, 2008.
    \41\ As is currently the case, an issuer that, on the last day 
of its most recently completed fiscal year, has not exceeded the 500 
worldwide holder threshold under Exchange Act Section 12(g), the 300 
U.S. holder threshold under Rule 12g3-2(a), or the $10 million 
annual aset threshold under Rule 12g-1, could claim an exemption 
from Section 12(g) registration for a class of equity securities 
based upon one or more of those provisions, and would not have to 
comply with Rule 12g3-2(b)'s foreign listing or other conditions, if 
it chose not to rely on that rule for its exemption from Section 
12(g) registration. However, such an issuer would have to claim the 
Rule 12g3-2(b) exemption, and satisfy all of its conditions, if it 
sought to have established an ADR facility for its equity 
securities. ADRs must be registered on a Form F-6, which requires an 
issuer of the deposited securities to be either an Exchange Act 
reporting company or have the Rule 12g3-2(b) exemption.
---------------------------------------------------------------------------

1. The Primary Trading Market Definition
    The adopted rule amendments define primary trading market, as 
proposed, to mean that at least 55 percent of the worldwide trading in 
the issuer's subject class of securities took place in, on or through 
the facilities of a securities market or markets in a single foreign 
jurisdiction or in no more than two foreign jurisdictions during the 
issuer's most recently completed fiscal year. The rule amendments 
further instruct that, if a foreign private issuer aggregates the 
trading of its subject class of securities in two foreign jurisdictions 
for that purpose, the trading for the issuer's securities in at least 
one of the two foreign jurisdictions must be larger than the trading in 
the United States for the same class of the issuer's securities.\42\
---------------------------------------------------------------------------

    \42\ Note 1 to Rule 12g3-2(b)(1) (17 CFR 240.12g3-2(b)(1)).
---------------------------------------------------------------------------

    As proposed, we have based the adopted definition on the definition 
of primary trading market under the March 2007 amendments. Like the 
earlier amendments, the amendments we are adopting today will permit an 
issuer to aggregate its securities over multiple markets in one or two 
foreign jurisdictions in recognition that many foreign private issuers 
have listings on more than one exchange in one or more non-U.S. 
markets.\43\
---------------------------------------------------------------------------

    \43\ As under the earlier amendments, measurement for the 
primary trading market determination will be by reference to ADTV as 
reported by the relevant market. An issuer would measure the ADTV of 
on-exchange transactions in its securities aggregated over one or 
two foreign jurisdictions against its worldwide trading volume. The 
issuer could include in this measure off-exchange transactions in 
those jurisdictions comprising the numerator only if it includes 
those off-exchange transactions when calculating worldwide trading 
volume in the denominator. This denominator would consist of U.S. 
ADTV, which must include both on-exchange and off-exchange 
transactions, and non-U.S. ADTV, which must include on-exchange 
transactions, but could also include off-exchange transactions. See 
Note 1 to Rule 12g3-2(b)(1) and Release No. 34-55540 at 72 FR 16934, 
16939.
---------------------------------------------------------------------------

    Some commenters urged the Commission to adopt a primary trading 
market definition that would permit an issuer to aggregate its trading 
over an unlimited number of foreign jurisdictions or permit an issuer's 
trading in its primary foreign markets to comprise less than 55 percent 
of its worldwide trading.\44\ We decline to adopt these suggestions 
because, by defining an issuer's primary trading market to comprise no 
more than two foreign jursidictions, it becomes more likely that an 
eligible issuer will be subject to an overseas regulator with principal 
authority for regulating the issuance and trading of the issuer's 
securities and the issuer's disclosure to investors. Similarly, 
requiring an issuer's primary non-U.S. trading to constitute no less 
than 55 percent of its worldwide trading helps assure that a clear 
majority of an issuer's securities trading occurs outside the United 
States. If the United States was the sole or principal market for a 
foreign private issuer's securities, then the Commission would have a 
greater regulatory interest in subjecting the foreign company to the 
Exchange Act reporting regime.
---------------------------------------------------------------------------

    \44\ See, for example, the letters of JPMorgan Chase Bank 
(``JPMorganChase''), dated April 18, 2008, and the Organization for 
International Investment (``OFII''), dated April 23, 2008.
---------------------------------------------------------------------------

    The adopted rule amendments will not require an issuer establishing 
the exemption, but not deregistering, to have maintained a foreign 
listing for the previous twelve months, or for some other specified 
period of time, as was required under the March 2007 amendments. As 
noted in the Proposing Release, we see no reason to exclude newly 
listed foreign companies from eligibility. Many foreign exchanges 
require substantial initial disclosure before a listing is accepted. 
Moreover, there is currently no similar requirement for a non-reporting 
company applying for the Rule 12g3-2(b) exemption.
    Under Rule 12h-6, an issuer must certify that, at the time it files 
its Form 15F,\45\ it meets that rule's foreign listing requirement. 
That issuer will also have to meet Rule 12g3-2(b)'s foreign listing 
requirement upon the effectiveness of its Exchange Act termination of 
registration and reporting under Rule 12h-6 in order to be able to 
claim the Rule 12g3-2(b) exemption. Since typically that effectiveness 
occurs 90 days from the date of filing of the Form 15F, we expect most 
Form 15F filers will satisfy the adopted foreign listing requirement 
under Rule 12g3-2(b).\46\
---------------------------------------------------------------------------

    \45\ 17 CFR 249.324. Similar to a Form 15, Form 15F is the form 
that a foreign private issuer must file to certify that it meets the 
conditions for terminating its Exchange Act registration and 
reporting obligations under Rule 12h-6.
    \46\ Unless the Commission objects, termination of an issuer's 
reporting and registration under Rule 12h-6 is effective 90 days 
after the filing of its Form 15F. Exchange Act Rule 12h-6(g)(1) (17 
CFR 240.12h-6(g)(1)).
---------------------------------------------------------------------------

2. Elimination of the Proposed 20 Percent Trading Volume Condition
    In addition to the trading volume standard under the primary 
trading market definition, we proposed that an issuer's U.S. ADTV must 
be no greater than 20 percent of its worldwide ADTV for its most 
recently completed fiscal year. We have determined not to adopt this 
separate trading volume condition.
    Most commenters opposed the 20 percent trading volume condition. 
Several commenters maintained that a foreign private issuer cannot 
control the level of U.S. trading of its equity securities because U.S. 
investors are able to purchase a foreign private issuer's securities in 
the issuer's home market and subsequently trade them in the United 
States, or purchase the issuer's securities through unsponsored ADR 
facilities in the United States. According to these commenters, those 
factors could cause an issuer's U.S. trading volume to exceed the 
proposed trading volume threshold and thereby require the issuer to 
register its securities in the United States although

[[Page 52757]]

it has not voluntarily sought a public market there.\47\
---------------------------------------------------------------------------

    \47\ See, for example, the letters of Cleary Gottlieb Steen & 
Hamilton LLP (``Cleary Gottlieb''), dated April 25, 2008, and 
EuropeanIssuers, dated April 25, 2008.
---------------------------------------------------------------------------

    Some commenters further stated that the proposed trading volume 
condition would likely discourage foreign private issuers from 
establishing or maintaining sponsored ADR facilities or engaging in 
exempted offerings in the U.S., such as private placements and Rule 
144A resales, to the detriment of U.S. investors.\48\ In addition, 
commenters noted that the proposed trading volume condition would be 
unnecessary should the Commission adopt the proposed foreign listing 
condition and accompanying definition of primary trading market.\49\
---------------------------------------------------------------------------

    \48\ See, for example, the letters of the International Bar 
Association, dated April 25, 2008, and Linklaters, dated April 24, 
2008.
    \49\ See, for example, the letters of BNY and O'Melveny & Myers 
LLP, dated April 25, 2008.
---------------------------------------------------------------------------

    After consideration of the comments, we have determined that 
adopting these amendments without the 20 percent trading volume 
condition is consistent with the protection of U.S. investors. Most of 
the foreign private issuers that currently claim the Rule 12g3-2(b) 
exemption have U.S. trading volumes that fall below the proposed 20 
percent threshold although there is no mandatory trading volume 
condition.\50\ We expect that the primary trading market provision will 
serve to protect U.S. investors by making it more likely that foreign 
companies claiming the exemption will be subject to disclosure 
requirements where they are listed.
---------------------------------------------------------------------------

    \50\ See the Memo by Jennifer Marietta-Westberg, Office of 
Economic Analysis, dated March 10, 2008, which is available at 
http://www.sec.gov/comments/s7-04-08/s70408-2.pdf.
---------------------------------------------------------------------------

3. Treatment of Compensatory Stock Options
    Currently, the scope of the exemption afforded to a class of equity 
securities under Rule 12g3-2(b) may include compensatory stock options 
that relate to that class of equity securities.\51\ Some commenters 
expressed their concern that, as proposed, the scope of the amended 
rule would not include compensatory stock options since the exemption 
extends to a class of equity securities, the compensatory stock options 
would likely be deemed a separate class, and the compensatory stock 
options would typically not be listed in the issuer's primary trading 
market.\52\
---------------------------------------------------------------------------

    \51\ See current Exchange Act Rule 12g3-2(b)(1), which states 
that ``securities'' of a foreign private issuer shall be exempt from 
Section 12(g) if the rule's conditions are met.
    \52\ See the letter of Gloria W. Nusbacher and 24 other 
attorneys.
---------------------------------------------------------------------------

    It is not our intention to change the scope of Rule 12g3-2(b) in 
this regard. Accordingly, we have added a note to the amended rule to 
clarify that compensatory stock options for which the underlying 
securities are in a class exempt under Rule 12g3-2(b) are also exempt 
under that rule.\53\
---------------------------------------------------------------------------

    \53\ Note 3 to Exchange Act Rule 12g3-2(b)(1).
---------------------------------------------------------------------------

B. Non-Exchange Act Reporting Condition

    We are adopting the condition, as proposed, that in order to be 
eligible for the Rule 12g3-2(b) exemption, an issuer must not have any 
reporting obligations under Exchange Act Section 13(a) or 15(d).\54\ 
Like the current non-Exchange Act reporting condition of Rule 12g3-
2(b),\55\ the purpose of this provision is to prevent an issuer from 
claiming the Rule 12g3-2(b) exemption when it already has incurred 
active Exchange Act reporting obligations.
---------------------------------------------------------------------------

    \54\ Exchange Act Rule 12g3-2(b)(1)(i) (17 CFR 240.12g3-
2(b)(1)(i)).
    \55\ Current Exchange Act Rule 12g3-2(d)(1) (17 CFR 240.12g3-
2(d)(1)).
---------------------------------------------------------------------------

1. Non-Reporting Issuers
    A foreign private issuer will satisfy the proposed non-reporting 
condition if it does not already have reporting obligations under 
either Exchange Act Section 13(a) or 15(d). Since Section 13(a) imposes 
reporting obligations on an issuer that has registered a class of 
securities under Section 12, a foreign private issuer that has an 
effective registration statement filed with the Commission under 
Section 12(b),\56\ for example, covering a class of debt securities, or 
Section 12(g), covering a particular class of equity securities, would 
be ineligible to claim the exemption. This treatment is consistent with 
the current Exchange Act reporting prohibition under Rule 12g3-
2(b).\57\
---------------------------------------------------------------------------

    \56\ 15 U.S.C. 78l(b).
    \57\ Current Exchange Act Rule 12g3-2(d)(1).
---------------------------------------------------------------------------

    We received relatively few comments on the proposed non-reporting 
condition. While some commenters supported the proposed condition,\58\ 
others requested that, in the interest of increasing the flexibility of 
capital raising in the United States for foreign private issuers, we 
permit an issuer to claim the Rule 12g3-2(b) exemption with respect to 
a particular class of equity securities although it has Exchange Act 
reporting obligations regarding a class of debt securities or a 
different class of equity securities.\59\ We decline to adopt this 
suggested modification because we believe that it could cause confusion 
for investors and other market participants regarding the scope of an 
issuer's Exchange Act reporting obligations and the protections 
available under the Exchange Act.
---------------------------------------------------------------------------

    \58\ See, for example, the letter of Sullivan & Cromwell.
    \59\ See, for example, the letter of OFII.
---------------------------------------------------------------------------

    Currently an issuer may apply for the Rule 12g3-2(b) exemption, 
although it may have exceeded the Section 12(g) shareholder thresholds 
on the last day of its most recently completed fiscal year, as long as 
the statutory 120-day period for filing a Section 12(g) registration 
statement has not lapsed.\60\ We proposed to eliminate this 120-day 
submission requirement because, under the revised Rule 12g3-2(b) 
exemptive scheme, we did not believe that this requirement would be 
necessary to protect investors.
---------------------------------------------------------------------------

    \60\ Current Exchange Act Rule 12g3-2(b)(2) (17 CFR 240.12g3-
2(b)(2)).
---------------------------------------------------------------------------

    The revised exemption does not depend on an issuer's determination 
of the number of its worldwide or U.S. shareholders, and does not 
require that it submit a written application disclosing that 
information. Instead, it affirmatively requires a foreign private 
issuer to meet a foreign listing requirement and electronically publish 
specified material non-U.S. disclosure documents in English. If we also 
required an issuer to claim the exemption within the 120-day period, we 
believe some issuers, particularly smaller ones, would be unable to 
meet that deadline.\61\ Those issuers would have to wait until the end 
of their current fiscal year and the start of a new 120-day period 
before they could claim the exemption. We see little benefit in 
requiring issuers to wait several months before being able to claim the 
exemption. On the other hand, providing the exemption and encouraging 
these issuers to publish their material non-U.S. disclosure documents 
in English should benefit U.S. investors. Commenters uniformly agreed 
with our assessment on this issue. Therefore, we are eliminating the 
120-day requirement for issuers under Rule 12g3-2(b), as proposed.
---------------------------------------------------------------------------

    \61\ Under current Rule 12g3-2(b), several issuers have applied 
for the exemption although the 120-day period has lapsed.
---------------------------------------------------------------------------

2. Deregistered Issuers
    Under the adopted, revised exemptive scheme, a foreign private 
issuer that has suspended its Exchange Act reporting obligations upon 
the filing of Form 15, pursuant to Rule 12g-4 or 12h-3, or Form 15F, 
pursuant to Rule 12h-6, will

[[Page 52758]]

satisfy the non-reporting requirement upon the effectiveness of its 
deregistration, assuming that it has not otherwise incurred additional 
Exchange Act reporting obligations. Similarly, a foreign private issuer 
that has suspended its reporting obligations pursuant to the statutory 
terms of Section 15(d) will satisfy the non-reporting condition 
immediately upon its determination that it had less than 300 
shareholders as of the beginning of its most recent fiscal year.
    Thus, unlike the current rule, the adopted rule amendments will not 
require an issuer to look back over the previous eighteen months and 
determine whether it had Exchange Act reporting obligations during that 
period.\62\ We eliminated the eighteen month requirement when adopting 
the March 2007 rule amendments that granted the Rule 12g3-2(b) 
exemption automatically to a foreign private issuer upon the 
effectiveness of its termination of Exchange Act registration and 
reporting pursuant to Rule 12h-6. We see no reason to treat differently 
foreign private issuers that have terminated their Section 12(g) 
registration under the older Rule 12g-4 or suspended their Section 
15(d) reporting obligations pursuant to that statutory section or under 
Rule 12h-3 and following the filing of Form 15. Elimination of a 
lengthy waiting period will hasten the electronic publication of a 
foreign private issuer's non-U.S. disclosure documents required under 
the exemption and, thus, help improve the ability of U.S. investors to 
make informed decisions regarding that issuer's securities. Commenters 
uniformly supported this revision, which we are adopting as proposed.
---------------------------------------------------------------------------

    \62\ Current Exchange Act Rule 12g3-2(d)(1) provides that the 
Rule 12g3-2(b) exemption is generally not available to a foreign 
private issuer that, during the preceding 18 months, has registered 
a class of securities under Exchange Act Section 12 or had an active 
or suspended Section 15(d) reporting obligation.
---------------------------------------------------------------------------

C. Electronic Publishing of Non-U.S. Disclosure Documents

1. Electronic Publishing Requirement To Claim Exemption
    We are adopting, as proposed, the requirement that, unless in 
connection with or following a recent Exchange Act deregistration, in 
order to claim the Rule 12g3-2(b) exemption, an issuer must have 
published in English, on its Internet Web site or through an electronic 
information delivery system generally available to the public in its 
primary trading market, information that, from the first day of its 
most recently completed fiscal year, it:
    <bullet> Has made public or been required to make public pursuant 
to the laws of the country of its incorporation, organization or 
domicile;
    <bullet> Has filed or been required to file with the principal 
stock exchange in its primary trading market on which its securities 
are traded and which has been made public by that exchange; and
    <bullet> Has distributed or been required to distribute to its 
security holders.\63\

    These are the same categories of information that the Commission 
has historically required a non-reporting company to submit in paper 
when applying for the exemption under Rule 12g3-2(b).\64\ They also are 
the same non-U.S. disclosure documents that, more recently, the 
Commission has required an issuer to publish electronically in order to 
maintain its Rule 12g3-2(b) exemption claimed upon the effectiveness of 
its deregistration under Rule 12h-6.\65\ Commenters strongly supported 
this electronic publication requirement.\66\
---------------------------------------------------------------------------

    \63\ Exchange Act Rule 12g3-2(b)(1)(iii) (17 CFR 240.12g3-
2(b)(1)(iii)) and Note 2 to Exchange Act Rule 12g3-2(b)(1). As 
proposed, the adopted amendments do not require a deregistered 
issuer to satisfy the non-U.S. publication requirement in order to 
claim the Rule 12g3-2(b) exemption since that issuer will have filed 
Exchange Act reports for the prior fiscal year upon which investors 
may rely.
    \64\ Current Exchange Act Rule 12g3-2(b)(1)(i).
    \65\ Current Exchange Act Rule 12g3-2(e)(2).
    \66\ While commenters uniformly supported the electronic 
publication condition, some questioned the proposed requirement to 
provide English translations of specified non-U.S. disclosure 
documents. See Part II.C.3 of this release.
---------------------------------------------------------------------------

    The purpose of this non-U.S. electronic publication condition is to 
provide U.S. investors with ready access to material information when 
trading in the issuer's equity securities in the over-the-counter 
market.\67\ This condition also will assist U.S. investors who are 
interested in trading the issuer's securities in its primary securities 
market. Moreover, having a foreign private issuer's key non-U.S. 
disclosure documents electronically published in English will assist 
broker-dealers in meeting their Rule 15c2-11 obligations and facilitate 
resales of that issuer's securities to QIBs under Rule 144A.
---------------------------------------------------------------------------

    \67\ Any trading of a foreign private issuer's Rule 12g3-2(b)-
exempt securities in the United States would have to occur through 
an over-the-counter market such as that maintained by the Pink 
Sheets, LLC since, as of April, 1998, the NASD has required a 
foreign private issuer to register a class of securities under 
Exchange Act Section 12 before its securities could be traded 
through the electronic over-the-counter bulletin board administered 
by Nasdaq. See, for example, NASD Notice to Members (January 1998).
---------------------------------------------------------------------------

    As under the current rule, the adopted amendments will require an 
issuer only to publish electronically information that is material to 
an investment decision regarding the subject securities,\68\ such as:
---------------------------------------------------------------------------

    \68\ Exchange Act Rule 12g3-2(b)(3)(i) (17 CFR 240.12g3-
2(b)(3)(i)). Although the substantive requirements are the same, we 
have made conforming changes to General Instruction E and Part II, 
Item 9 of Form 15F to reflect the renumbering of the non-U.S. 
publication requirements of Rule 12g3-2(b).
---------------------------------------------------------------------------

    <bullet> Results of operations or financial condition;
    <bullet> Changes in business;
    <bullet> Acquisitions or dispositions of assets;
    <bullet> The issuance, redemption or acquisition of securities;
    <bullet> Changes in management or control;
    <bullet> The granting of options or the payment of other 
remuneration to directors or officers; and
    <bullet> Transactions with directors, officers or principal 
security holders.\69\
---------------------------------------------------------------------------

    \69\ These are the same types of information specified in 
current Exchange Act Rule 12g3-2(b)(3) (17 CFR 240.12g3-2(b)(3)).
---------------------------------------------------------------------------

2. Electronic Publishing Requirement to Maintain Exemption
    In order to maintain the Rule 12g3-2(b) exemption, the adopted 
amendments will require an issuer to publish the same information 
specified in the prior fiscal year provision, on an ongoing basis and 
for subsequent fiscal years, on its Internet Web site or through an 
electronic information delivery system in its primary trading 
market.\70\ This requirement will apply to any issuer claiming the 
exemption, whether or not a former Exchange Act registrant. Like the 
prior fiscal year publication condition, this ongoing publication 
condition will help assure that investors and other market participants 
have access to an issuer's specified non-U.S. disclosure documents, in 
English, which are material to an investment decision. Most commenters 
strongly supported this ongoing non-U.S. electronic publication 
condition.
---------------------------------------------------------------------------

    \70\ Exchange Act Rule 12g3-2(b)(2)(i) (17 CFR 240.12g3-
2(b)(2)(i)).
---------------------------------------------------------------------------

    Similar to the current rule,\71\ the adopted rule amendments will 
require an issuer to publish electronically its non-U.S. disclosure 
documents promptly after the information has been made public, pursuant 
to its home jurisdiction laws, non-U.S. stock exchange rules, or 
shareholder meeting rules and practices.\72\ As under current 
Commission staff practice, what constitutes ``promptly'' will depend on 
the type of document and the amount of time required to prepare an 
English

[[Page 52759]]

translation. Currently an issuer typically must electronically publish 
or submit in paper a copy of a material press release on or around the 
same business day of its original publication.
---------------------------------------------------------------------------

    \71\ Current Exchange Act Rule 12g3-2(b)(1)(iii).
    \72\ Exchange Act Rule 12g3-2(b)(2)(ii) (17 CFR 240.12g3-
2(b)(2)(ii)). Form 6-K imposes a similar requirement.
---------------------------------------------------------------------------

    The adopted amendments will permit an issuer to meet Rule 12g3-
2(b)'s electronic publication requirement concurrently with the 
publishing in English of a non-U.S. disclosure document through an 
electronic information delivery system generally available to the 
public in its primary trading market. Thus, if an issuer's non-U.S. 
stock exchange or securities regulatory authority permits the issuer to 
publish electronically a required report on its electronic delivery 
system, and the public has ready access to the report and other 
documents maintained on the system,\73\ that electronic publication 
solely will satisfy the proposed Rule 12g3-2(b)'s electronic publishing 
requirements.
---------------------------------------------------------------------------

    \73\ An example of such a system is the System for Electronic 
Document Analysis and Retrieval (``SEDAR'') maintained by the 
Canadian Securities Administrators.
---------------------------------------------------------------------------

3. English Translation Requirement
    We are adopting, as proposed, the condition that, in order to claim 
or maintain the Rule 12g3-2(b) exemption, an issuer must publish 
electronically, at a minimum, English translations of the following 
documents if in a foreign language:
    <bullet> Its annual report, including or accompanied by annual 
financial statements;
    <bullet> Interim reports that include financial statements;
    <bullet> Press releases; and
    <bullet> All other communications and documents distributed 
directly to security holders of each class of securities to which the 
exemption relates.\74\
---------------------------------------------------------------------------

    \74\ Exchange Act Rule 12g3-2(b)(3)(ii) (17 CFR 240.12g3-
2(b)(3)(ii)).
---------------------------------------------------------------------------

    These are the same documents for which an issuer that has 
deregistered under Rule 12h-6 must currently provide English 
translations.\75\
---------------------------------------------------------------------------

    \75\ Note 1 to Current Exchange Act Rule 12g3-2(e) (17 CFR 
240.12g3-2(e)).
---------------------------------------------------------------------------

    Some commenters requested that we permit an issuer to provide brief 
English descriptions or English versions of specified non-U.S. 
disclosure documents instead of English translations.\76\ We decline to 
adopt this suggestion because, as we stated in the Proposing Release, 
the specified non-U.S. disclosure documents are the same documents for 
which the Commission staff has historically required English 
translations because of their importance to investors.\77\
---------------------------------------------------------------------------

    \76\ See, for example, the letters of Sullivan & Cromwell and 
Simpson Thacher & Bartlett (``Simpson Thacher''), dated April 18, 
2008.
    \77\ See Part II.D.1 of the Proposing Release. We similarly 
eliminated the ability of foreign registrants to provide English 
versions or brief English descriptions of specified non-U.S. 
documents submitted under cover of Form 6-K because of the vagueness 
and lack of utility of such versions and descriptions submitted to 
the Commission. See Release No. 33-8099 (May 14, 2002), 67 FR 36678 
(May 24, 2002).
---------------------------------------------------------------------------

    Some commenters also requested that we provide guidance regarding 
when an issuer may provide an English summary instead of an English 
translation.\78\ Generally, if, as a registrant, an issuer could submit 
an English summary for a non-U.S. disclosure document under cover of 
Form 6-K or pursuant to Exchange Act Rule 12b-12(d)(3), it can do so 
when claiming or maintaining the Rule 12g3-2(b) exemption.
---------------------------------------------------------------------------

    \78\ See, for example, the letters of Shearman & Sterling, dated 
April 25, 2008, and Sullivan & Cromwell.
---------------------------------------------------------------------------

D. Elimination of the Written Application Requirement

    The adopted rule amendments eliminate the current requirement that, 
in order to obtain the Rule 12g3-2(b) exemption, if not proceeding 
under Rule 12h-6, a foreign private issuer must submit written 
materials, typically in the form of a letter application, to the 
Commission. These materials currently include a list of the issuer's 
non-U.S. disclosure requirements, the number of U.S. holders of its 
subject securities and the percentage of outstanding shares held by 
them, the circumstances in which its U.S. holders acquired those 
securities, and the date and circumstances of the most recent public 
distribution of the securities of the issuer or its affiliate.\79\ As 
long as an issuer satisfies the adopted rule's conditions, it no longer 
has to submit these materials to the Commission. Commenters strongly 
supported eliminating the written application process.
---------------------------------------------------------------------------

    \79\ Current Exchange Act Rules 12g3-2(b)(1), (2) and (5). As 
part of the written application process, an issuer must also submit 
paper copies of its non-U.S. disclosure documents published since 
the first day of its most recently completed fiscal year.
---------------------------------------------------------------------------

    Elimination of Rule 12g3-2(b)'s written application process for all 
foreign private issuers is consistent with our adoption of an automatic 
application of the Rule 12g3-2(b) exemption upon the effectiveness of 
an issuer's deregistration under Rule 12h-6. Moreover, since the 
adopted rule amendments permit an issuer to claim the Rule 12g3-2(b) 
exemption based on a foreign listing/primary trading market condition, 
regardless of the number of its U.S. shareholders, the current 
shareholder information requirement would be of marginal use. Further, 
since, as adopted, as a condition to claiming and maintaining the Rule 
12g3-2(b) exemption, an issuer will have to publish electronically its 
non-U.S. disclosure documents, investors should be able to ascertain 
many of the issuer's non-U.S. disclosure requirements from a review of 
those publicly available documents.
    From time to time, the Commission has published a list of issuers 
claiming the Rule 12g3-2(b) exemption that have submitted relatively 
current information pursuant to that rule.\80\ Commission staff has 
compiled this list based on a review of submitted paper documents. As 
we stated in the Proposing Release, as part of the streamlining of the 
Rule 12g3-2(b) process that the adopted rule amendments are intended to 
effect, the Commission anticipates it will no longer publish these 
lists subsequent to the effective date of the new rules.\81\
---------------------------------------------------------------------------

    \80\ See, for example, Release No. 34-51893 (June 21, 2005), 70 
FR 37128 (June 28, 2005).
    \81\ See the Proposing Release at n. 86.
---------------------------------------------------------------------------

    Some commenters suggested that, as a substitute for these lists, we 
adopt a requirement that an issuer must notify the Commission and other 
market participants that it is claiming and intends to rely on the Rule 
12g3-2(b) exemption.\82\ We decline to adopt such a notice requirement 
because we believe that, as other commenters have noted, a notice 
requirement could run contrary to the goal of encouraging an issuer to 
claim the Rule 12g3-2(b) exemption and electronically disseminate its 
non-U.S. disclosure documents in English.\83\ Nevertheless, an issuer 
that wants to provide notice to investors, broker-dealers and other 
market participants may do so by, for example, stating on its Internet 
Web site that it has electronically published specified non-U.S. 
disclosure documents in order to claim or maintain the Rule 12g3-2(b) 
exemption.
---------------------------------------------------------------------------

    \82\ See, for example, the letters of Simpson Thacher and 
Sullivan & Cromwell.
    \83\ See the letters of Ziegler, Ziegler & Associates, dated 
April 28, 2008, and BNY.
---------------------------------------------------------------------------

E. Duration of the Amended Rule 12g3-2(b) Exemption

    As adopted, the amended Rule 12g3-2(b) exemption will remain in 
effect until an issuer:
    <bullet> No longer electronically publishes the specified non-U.S. 
disclosure documents required to maintain the exemption;
    <bullet> No longer maintains a listing for the subject class of 
securities on one or more exchanges in a primary trading market, as 
defined by the rule; or

[[Page 52760]]

    <bullet> Registers a class of securities under Section 12 of the 
Exchange Act or incurs reporting obligations under Section 15(d) of the 
Exchange Act.\84\
---------------------------------------------------------------------------

    \84\ Exchange Act Rule 12g3-2(c) (17 CFR 240.12g3-2(c)).
---------------------------------------------------------------------------

    The duration of the amended Rule 12g3-2(b) exemption is similar to 
the duration of the current exemption. Both depend on an issuer's 
continued compliance with the requirement to publish its non-U.S. 
disclosure documents. Under both provisions, Section 12 registration or 
the incurrence of Section 15(d) reporting obligations terminates the 
exemption.\85\ Moreover, currently, if an issuer can no longer claim 
the Rule 12g3-2(b) exemption because it has not complied with the 
rule's publication requirements, it must determine on the last day of 
the fiscal year whether, because of its record holder count, it would 
be required to register a class of securities under Section 12(g). The 
same would hold true under the rule amendments for a non-compliant 
issuer.
---------------------------------------------------------------------------

    \85\ See, for example, current Exchange Act Rule 12g3-2(e)(3). A 
Rule 12g3-2(b)-exempt issuer that acquires an Exchange Act reporting 
company following an exchange of shares, and thereby succeeds to the 
target company's Exchange Act reporting obligations under Exchange 
Act Rule 12g-3 (17 CFR 240.12g-3) or Exchange Act Rule 15d-5 (17 CFR 
240.15d-5), would lose the Rule 12g3-2(b) exemption upon succession. 
If such successor issuer qualified for deregistration under Exchange 
Act Rule 12h-6, it could claim the Rule 12g3-2(b) exemption upon 
deregistration.
---------------------------------------------------------------------------

    We are also adopting the provision, as proposed, that an issuer 
will lose the Rule 12g3-2(b) exemption if it no longer meets the 
foreign listing condition. An issuer will no longer satisfy the foreign 
listing condition either because it is no longer listed in its primary 
trading market, or because the one or two foreign jurisdictions in 
which it trades no longer qualifies as its primary trading market, as 
defined by the rule. Since the definition of primary trading market 
uses a trading volume standard for the issuer's most recently completed 
fiscal year, an issuer will have to redetermine its relative U.S. and 
foreign trading volumes on an annual basis.
    Some commenters opposed basing the duration of the Rule 12g3-2(b) 
exemption on whether an issuer remains listed in its primary trading 
market.\86\ We believe this provision is necessary in order to help 
ensure the continued availability of a set of non-U.S. disclosure 
documents to which investors may turn when making decisions regarding 
an issuer's securities. It is also necessary to help make sure that an 
issuer's principal trading market has not become the U.S. market, which 
would require the issuer to register and report under the Exchange Act.
---------------------------------------------------------------------------

    \86\ See the letters of the ABA and Sullivan & Cromwell. The 
primary objection was that adherence to the electronic publication 
condition should be a sufficient basis for maintaining the exemption 
as it is under the current rule.
---------------------------------------------------------------------------

    Some commenters requested that we at least establish a ``cure'' 
period, such as six or twelve months, during which an issuer would 
either have to correct any deficiency or else register under the 
Exchange Act.\87\ We decline to adopt a specific cure period. We 
believe that in order to best protect investors, an issuer that finds 
itself not in compliance with any of the conditions required to 
maintain the Rule 12g3-2(b) exemption must either re-establish 
compliance with the rule in a reasonably prompt manner or else register 
under the Exchange Act.
---------------------------------------------------------------------------

    \87\ See, for example, the letter of the OFII.
---------------------------------------------------------------------------

    There is no cure period for domestic issuers that find they are 
subject to registration under Section 12(g). Thus, foreign private 
issuers are treated in a similar manner as domestic issuers in this 
respect. As noted, foreign private issuers may be able to avoid 
registration by re-establishing compliance with Rule 12g3-2(b), for 
example, by relisting its securities in its primary trading market.

F. Elimination of the Successor Issuer Prohibition

    The adopted rule amendments will eliminate the provision that 
precludes an issuer from obtaining the Rule 12g3-2(b) exemption if, 
following the issuance of shares to acquire by merger, consolidation, 
exchange of securities or acquisition of assets, it has succeeded to 
the Exchange Act reporting obligations of another issuer.\88\ Until 
recently, the sole exception to this successor issuer prohibition was 
for Canadian companies that registered the securities to be issued in 
the transaction on specified MJDS registration statements under the 
Securities Act.\89\
---------------------------------------------------------------------------

    \88\ Current Exchange Act Rule 12g3-2(d)(2). An issuer succeeds 
to the Exchange Act reporting obligations of another either under 
Exchange Act Rule 12g-3 (17 CFR 240.12g-3) or 15d-5 (17 CFR 240.15d-
5).
    \89\ The specified MJDS registration statements are Forms F-8, 
F-9, F-10 and F-80 (17 CFR 239.38, 239.39, 239.40, and 239.41).
---------------------------------------------------------------------------

    As part of the March 2007 rule amendments, we adopted a provision 
that permits a successor issuer to terminate its newly acquired 
Exchange Act reporting obligations as long as it meets Rule 12h-6's 
substantive requirements for equity or debt securities issuers.\90\ We 
also amended Exchange Act Rule 12g3-2 to permit a successor issuer to 
claim the Rule 12g3-2(b) exemption upon the effectiveness of its 
termination of Exchange Act registration and reporting under Rule 12h-
6. We see no reason to treat differently a successor issuer that 
qualifies for deregistration under one of the older exit rules, Rule 
12g-4 or 12h-3, or under Section 15(d).
---------------------------------------------------------------------------

    \90\ 17 CFR 240.12h-6(d). Under that rule, a non-Exchange Act 
reporting foreign private issuer that has acquired a reporting 
foreign private issuer in a transaction exempt under the Securities 
Act, for example, under Rule 802 (17 CFR 230.802), or Securities Act 
Section 3(a)(10) (15 U.S.C. 77c(a)(10)), may qualify immediately for 
termination of its Exchange Act reporting obligations under Rule 
12h-6, without having to file an Exchange Act annual report, as long 
as the acquired company's reporting history fulfills Rule 12h-6's 
prior reporting condition and the successor issuer meets the rule's 
other conditions.
---------------------------------------------------------------------------

    Elimination of the successor issuer prohibition will help encourage 
a successor issuer to claim the Rule 12g3-2(b) exemption and 
electronically publish its specified non-U.S. disclosure documents in 
English. No commenter opposed the proposed elimination of the successor 
issuer prohibition. Accordingly, we are removing the successor issuer 
prohibition under Rule 12g3-2(b), as proposed.

G. Elimination of the Rule 12g3-2(b) Exception for MJDS Filers

    The adopted rule amendments will eliminate the Rule 12g3-2 
provisions that make the Rule 12g3-2(b) exemption available to Canadian 
issuers that have only filed with the Commission specified registration 
statements under the MJDS,\91\ although they may have filed those 
registration statements within the previous 18 months or to effect 
transactions in which they would succeed to Exchange Act reporting 
obligations.\92\ Because the adopted amendments will eliminate the 18 
month and successor issuer prohibitions under Rule 12g3-2(b), they will 
remove as unnecessary the MJDS filer exceptions to those prohibitions.
---------------------------------------------------------------------------

    \91\ The Commission adopted the Rule 12g3-2 provisions when 
adopting the MJDS in order to encourage Canadian issuers to use the 
MJDS. See Release No. 33-6879 (October 22, 1990), 55 FR 462881 
(November 2, 1990), as adopted in Release No. 33-6902 (June 21, 
1991), 56 FR 30036 (July 1, 1991). The MJDS generally permits a 
qualified Canadian issuer to file with the Commission its Canadian 
registration statements and reports under cover of the MJDS forms.
    \92\ Current Exchange Act Rules 12g3-2(d)(1) and (2).
---------------------------------------------------------------------------

    The adopted rule amendments will also eliminate the current ability 
of a Canadian issuer that already has the Rule 12g3-2(b) exemption, but 
that subsequently acquires Exchange Act reporting obligations as a MJDS 
filer, for example, with regard to a class of debt securities, to 
retain the Rule 12g3-2(b) exemption for its equity securities. Such a 
MJDS filer currently may submit its

[[Page 52761]]

non-U.S. disclosure documents simultaneously to fulfill its Exchange 
Act reporting obligations under the MJDS and its non-U.S. publication 
obligations under Rule 12g3-2(b).\93\
---------------------------------------------------------------------------

    \93\ Under the current rules, a Canadian issuer that checks the 
appropriate box on the cover of each filed Form 40-F and submitted 
Form 6-K is able to use those Exchange Act reports to maintain its 
Rule 12g3-2(b) exemption as well.
---------------------------------------------------------------------------

    We proposed to eliminate this ability of a MJDS filer 
simultaneously to maintain the Rule 12g3-2(b) exemption both because 
few issuers have ever used that ability and because it no longer is the 
case that a MJDS filer must file the same documents to fulfill its 
obligations under the Exchange Act and Rule 12g3-2(b). Since the 
enactment of the Sarbanes-Oxley Act,\94\ and Commission rules adopted 
under that Act, Canadian issuers must respond to several U.S. 
disclosure requirements when preparing their Form 40-F annual 
reports.\95\
---------------------------------------------------------------------------

    \94\ Public Law 107-204, 116 Stat. 745 (2002).
    \95\ See, for example, Form 40-F's certifications required 
concerning an issuer's disclosure controls and procedures and its 
internal controls over financial reporting, and the disclosure 
required concerning its audit committee financial expert, its code 
of ethics, and its off-balance sheet arrangements.
---------------------------------------------------------------------------

    Only one commenter opposed eliminating this rarely used ability to 
be a MJDS filer while simultaneously claiming the Rule 12g3-2(b) 
exemption.\96\ The primary ground for objection was that some issuers 
may already be relying on the ability to use MJDS reports for this dual 
purpose. We continue to believe that this ability is rarely used if at 
all. Moreover, as explained below, we are adopting a three-year 
transition period following effectiveness of the adopted rule 
amendments, that will provide ample time for a MJDS registrant of debt 
securities, which has simultaneously claimed the Rule 12g3-2(b) 
exemption for a class of equity securities, to register that class of 
securities under the Exchange Act.\97\
---------------------------------------------------------------------------

    \96\ See the letter of Osler, Hoskins & Harcourt, dated April 
28, 2008.
    \97\ See Part II.K.1 below.
---------------------------------------------------------------------------

    Accordingly, we are adopting the elimination of this MJDS 
provision, as proposed.\98\ Under the adopted rule amendments, a MJDS 
registrant will be eligible to claim the Rule 12g3-2(b) exemption on 
the same grounds as other foreign registrants. If it has recently 
exited the Exchange Act reporting regime under Rule 12h-6, 12g-4 or12h-
3 or Section 15(d), it can claim the exemption, assuming it satisfies 
the rule amendments' other conditions. Otherwise, the filing of a MJDS 
registration statement under the Securities Act or Exchange Act will 
trigger Exchange Act reporting obligations and preclude that issuer 
from claiming the exemption.
---------------------------------------------------------------------------

    \98\ The adopted rule amendments remove the instruction on the 
cover page of Form 40-F and Form 6-K requiring a registrant to 
indicate whether it also is furnishing the materials pursuant to 
Rule 12g3-2(b).
---------------------------------------------------------------------------

H. Elimination of the ``Automated Inter-Dealer Quotation System'' 
Prohibition and Related Grandfathering Provision

    The adopted amendments will also eliminate the provision generally 
prohibiting a foreign private issuer from claiming the Rule 12g3-2(b) 
exemption if it has securities or ADRs quoted in the United States on 
an automated inter-dealer quotation system,\99\ which, until recently, 
referred to the inter-dealer quotation system administered by the 
National Association of Securities Dealers Inc., and known as Nasdaq. 
The Commission initially adopted this prohibition in 1983 because of 
its belief that, since its establishment in 1971, Nasdaq had so matured 
into a trading system with substantial similarities to a national 
securities exchange that Nasdaq-traded foreign private issuers should 
be required to meet the same disclosure standards as exchange-traded 
foreign private issuers.\100\ We are eliminating this prohibition, as 
proposed, because Nasdaq has since become a national securities 
exchange.\101\
---------------------------------------------------------------------------

    \99\ Current Exchange Act Rule 12g3-2(d)(3) (17 CFR 12g3-
2(d)(3)).
    \100\ Release No. 34-20264 (October 6, 1983), 48 FR 46736 
(October 14, 1983).
    \101\ Nasdaq ceased operations as an automated inter-dealer 
quotation system and became a national securities exchange effective 
August 1, 2006. See Release No. 34-53128 (January 13, 2006), 71 FR 
3550 (January 23, 2006).
---------------------------------------------------------------------------

    When the Commission adopted the automatic inter-dealer quotation 
system prohibition, it recognized that the general prohibition could 
cause some Nasdaq-quoted foreign companies that already had obtained 
the Rule 12g3-2(b) exemption to withdraw from Nasdaq. Therefore, the 
Commission excepted from that prohibition securities that:
    <bullet> Were quoted on Nasdaq on October 5, 1983 and have been 
continuously traded since;
    <bullet> Were exempt under Rule 12g3-2(b) on October 5, 1983 and 
have remained so since; and
    <bullet> After January 2, 1986, were issued by a non-Canadian 
company.\102\
---------------------------------------------------------------------------

    \102\ Current Exchange Act Rule 12g3-2(d)(3). The Commission 
based the more limited grandfathering of Canadian securities on the 
more active U.S. market for those securities, which had led to 
abuses under Rule 12g3-2(b). Release No. 34-20264.
---------------------------------------------------------------------------

    The adopted rule amendments will eliminate this grandfathering 
provision because, as we stated in the Proposing Release, due to 
developments occurring since its adoption, we no longer believe the 
grandfathering provision is necessary. Only nine of the grandfathered 
issuers remain listed on Nasdaq.\103\ Pursuant to Commission order, 
Nasdaq is now a national securities exchange, and those issuers must 
register their securities under Exchange Act Section 12(b) by August 1, 
2009 if they wish to remain listed on Nasdaq.\104\ Pursuant to the 
terms of the Commission order, as long as the nine grandfathered 
issuers continue to comply with the conditions of Rule 12g3-2(b), 
brokers and dealers may trade their securities in reliance on the Rule 
12g3-2(b) exemption until the above deadline for Exchange Act 
registration. Those few commenters that addressed the issue supported 
the proposed elimination of the grandfathering provision.\105\ 
Accordingly, we are adopting the elimination, as proposed.
---------------------------------------------------------------------------

    \103\ Letter from Edward S. Knight to Nancy M. Morris (July 31, 
2006), attached to Release No. 34-54240 (July 31, 2006), 71 FR 45246 
(August 8, 2006).
    \104\ Release No. 34-54241 (July 31, 2006), 71 FR 45359 (August 
8, 2006). The Commission granted the grandfathered issuers an 
additional three years to register their securities under Section 
12(b) in order to avoid disruptions in the trading of their 
securities caused by their delisting from Nasdaq and to provide them 
with time to meet U.S. disclosure requirements.
    \105\ See the ABA letter and the letter of the Pink OTC Markets 
Inc. (``Pink OTC''), dated April 10, 2008.
---------------------------------------------------------------------------

I. Revisions to Form F-6

    Currently, a registrant of ADRs must state on Form F-6, the 
registration statement used to register ADRs under the Securities Act, 
that the issuer of the deposited securities against which the ADRs will 
be issued is either an Exchange Act reporting company or furnishes 
public reports and other documents to the Commission pursuant to Rule 
12g3-2(b).\106\ We proposed to require a Form F-6 registrant to state 
that, if the issuer of deposited securities is not an Exchange Act 
reporting company, such issuer publishes information in English 
required to maintain the Rule 12g3-2(b) exemption on its Internet Web 
site or through an electronic information delivery system generally 
available to the public in its primary trading market. The registrant 
would also have to disclose the issuer's address of its Internet Web 
site or the

[[Page 52762]]

electronic information delivery system in its primary trading 
market.\107\
---------------------------------------------------------------------------

    \106\ Part I, Item 2 of Form F-6. Form F-6 states that the 
registrant is the legal entity created by the deposit agreement for 
the issuance of ADRs for the deposited securities.
    \107\ A registrant that has effected a Form F-6 registration 
statement before the effective date of these final rules would not 
have to amend the Form F-6 to provide the issuer's Internet Web site 
address until the registrant's first substantive amendment of the 
Form F-6. However, once a registrant has disclosed the issuer's 
Internet address on the Form F-6, it should promptly amend the Form 
F-6 to disclose a subsequent change in that address.
---------------------------------------------------------------------------

    Some commenters stated that, if the Commission elects not to 
publish an annual list of Rule 12g3-2(b)-exempt issuers, it will be 
difficult for a depositary of an unsponsored ADR facility \108\ to 
determine that the issuer of the subject securities has complied with 
the electronic publication condition of Rule 12g3-2(b). Those 
commenters requested that, for unsponsored facilities, we either 
eliminate the Form F-6 condition that an issuer must be subject to 
Exchange Act reporting or must furnish reports required under Rule 
12g3-2(b),\109\ or revise the proposed Form F-6 amendment to permit the 
depositary to base its representation concerning an issuer's Rule 12g3-
2(b) electronic publication upon the depositary's reasonable, good 
faith belief.\110\
---------------------------------------------------------------------------

    \108\ Currently an ADR facility may be either sponsored or 
unsponsored. With a sponsored facility, the issuer of the deposited 
securities is a party to the deposit agreement along with the 
depositary and is able to exercise some control regarding the terms 
and operations of the facility. With an unsponsored facility, the 
depositary solely controls the terms and operations of the facility.
    \109\ See the letter of JPMorganChase.
    \110\ See the letters of Ziegler, Ziegler & Associates and BNY.
---------------------------------------------------------------------------

    We are not revising the requirement under Form F-6 that the issuer 
of the deposited securities be either an Exchange Act reporting company 
or be exempt from registration under Rule 12g3-2(b) because such 
revision would eliminate any ongoing disclosure obligations as a 
condition of Form F-6 registration, which would not be in the best 
interest of investors. However, we are amending Form F-6 to state that, 
in the case of an unsponsored ADR facility, a Form F-6 filer may base 
its representation that the issuer publishes information in English 
required to maintain the exemption from registration under Exchange Act 
Rule 12g3-2(b) upon the filer's reasonable, good faith belief after 
exercising reasonable diligence.\111\ Except for this one change, we 
are adopting the Form F-6 amendment, as proposed.
---------------------------------------------------------------------------

    \111\ See the Note to Form F-6, Part I, Item 2.
---------------------------------------------------------------------------

    Currently an issuer that does not seek to have its securities 
traded in the United States in the form of ADRs is able, by not 
formally establishing the Rule 12g3-2(b) exemption and submitting 
documents to the Commission, to restrict the ability of ADR depositary 
banks to establish unsponsored ADR facilities. Because the adopted rule 
amendments will expand the availability of the Rule 12g3-2(b) exemption 
by making it available to all otherwise eligible foreign private 
issuers that post materials to their Web sites or publish them through 
an electronic information delivery system in their primary trading 
market, ADR depositaries will be able to establish unsponsored ADRs on 
this expanded group of foreign private issuers based upon their 
reasonable, good faith belief, after exercising reasonable diligence, 
that those issuers comply with Rule 12g3-2(b).\112\
---------------------------------------------------------------------------

    \112\ ADR depositaries will also be able to establish sponsored 
ADR facilities with foreign private issuers that choose to have 
their shares represented by ADRs in the United States.
---------------------------------------------------------------------------

    We solicited comment on whether, because of the expanded 
availability of the Rule 12g3-2(b) exemption under the proposed rule 
amendments, we should require, as a condition to the registration of 
ADRs on Form F-6, that the issuer give its consent to the depositary, 
or at least that the depositary must have notified the issuer of its 
intention to register ADRs and must not have received an affirmative 
statement of objection from the issuer. Those few commenters that 
addressed this matter disagreed on whether imposing such additional 
conditions on the creation of unsponsored ADR facilities was necessary 
or advisable.\113\ Given this disagreement, and because we concur with 
those commenters who stated that imposing such additional conditions 
could run counter to the goal of streamlining the Rule 12g3-2(b) regime 
for the benefit of investors and issuers,\114\ we are not adopting at 
this time any additional conditions regarding the formation of 
unsponsored ADR facilities.
---------------------------------------------------------------------------

    \113\ See the letters of Cleary Gottlieb and EuropeanIssuers, 
both of which favored requiring a depositary to notify an issuer 
before establishing an unsponsored ADR facility, and requiring it to 
terminate an unsponsored facility created without the consent of an 
issuer if the issuer decides to create a sponsored facility. But see 
the letters of BNY and Pink OTC, both of which opposed the adoption 
of a condition requiring a depositary to obtain the consent of an 
issuer before establishing an unsponsored ADR facility, and the 
letter of Deutsche Bank, dated April 21, 2008, which stated that, 
because, in practice, depositary banks typically obtain the issuer's 
consent before establishing an unsponsored ADR facility, a rule 
requiring such consent was not necessary.
    \114\ See the letters of BNY and Pink OTC.
---------------------------------------------------------------------------

J. Amendment of Exchange Act Rule 15c2-11

    Exchange Act Rule 15c2-11 \115\ contains requirements that are 
intended to deter broker-dealers from initiating or resuming quotations 
for covered over-the-counter securities that may facilitate a 
fraudulent or manipulative scheme. The Rule currently prohibits a 
broker-dealer from publishing (or submitting for publication) a 
quotation for a covered over-the-counter security in a quotation medium 
unless it has obtained and reviewed current information about the 
issuer.\116\ One of the specified types of information satisfying this 
Rule 15c2-11 obligation is information furnished to the Commission 
pursuant to Rule 12g3-2(b). A broker-dealer must make this information 
reasonably available upon request to any person expressing an interest 
in a proposed transaction involving the security with the broker-
dealer.\117\
---------------------------------------------------------------------------

    \115\ 17 CFR 240.15c2-11.
    \116\ Rule 15c2-11(a) (17 CFR 240.15c2-11(a)). The broker-dealer 
must also have a reasonable basis for believing that the issuer 
information, when considered along with any supplemental 
information, is accurate and is from a reliable source.
    \117\ Rule 15c2-11(a)(4) (17 CFR 240.15c2-11(a)(4)).
---------------------------------------------------------------------------

    We proposed to amend Rule 15c2-11 to conform to the proposed rule 
amendments so that a broker-dealer must have available the information 
that, since the beginning of its last fiscal year, the issuer has 
published pursuant to the Rule 12g3-2(b) exemption. We further proposed 
to permit a broker-dealer to fulfill its Rule 15c2-11 obligation to 
make reasonably available upon request the information published 
pursuant to Rule 12g3-2(b) by providing the requesting person with 
appropriate instructions regarding how to obtain the information 
electronically. This reflects our view that most investors will have 
ready access to the electronically published documents of Rule 12g3-
2(b)-exempt issuers.
    The proposed amendment of Rule 15c2-11 received little comment. 
Because this proposal will make it easier for broker-dealers to fulfill 
their Rule 15c2-11 obligations for the benefit of investors, we are 
adopting it, as proposed. Because some issuers currently still make 
paper submissions to maintain their Rule 12g3-2(b) exemption, we expect 
that, during the first year of the amended rules' effectiveness, a 
broker-dealer may have to resort to both paper submissions and 
electronically published materials in order to fulfill its Rule 15c2-11 
obligations regarding a particular issuer.

[[Page 52763]]

Eventually, however, a broker-dealer will only have to look to an 
issuer's electronically published materials for the purpose of Rule 
15c2-11.

K. Transition Periods

1. Regarding Section 12 Registration
    While we believe most issuers that currently have the Rule 12g3-
2(b) exemption will continue to be able to claim the exemption upon the 
effectiveness of the adopted rule amendments, some may not be able to 
do so because, for example, they no longer maintain a foreign listing 
or their principal foreign trading market comprises less than 55 
percent of their worldwide trading and, therefore, does not meet the 
definition of primary trading market under the amended rule. Those 
issuers will have to file a Section 12 registration statement if they 
are unable to meet all of the amended rule's conditions or fail to 
qualify under another exemption from Section 12(g). In order to provide 
those issuers with sufficient time to prepare for and complete the 
Section 12 registration process, including obtaining required audited 
financial statements, we are adopting a three-year transition period, 
as proposed. Those issuers must become Exchange Act registrants no 
later than three years from the effective date of the adopted rule 
amendments if they are unable to comply fully with all of the amended 
rule's conditions.\118\
---------------------------------------------------------------------------

    \118\ We adopted a similar three-year transition period to 
enable those grandfathered Nasdaq-traded foreign companies that were 
Rule 12g3-2(b)-exempt to register under Section 12(b) after Nasdaq 
became an exchange. See Release No. 34-54241 (July 31, 2006), 71 FR 
45359 (August 8, 2006).
---------------------------------------------------------------------------

    We believe this three-year transition period is necessary for the 
benefit not just of issuers, but of broker-dealers and investors as 
well. If a currently exempt issuer is unable to claim the Rule 12g3-
2(b) exemption upon the effectiveness of the rule amendments because it 
no longer has a foreign listing or cannot meet the primary trading 
market definition, but continues to comply with the electronic 
publishing condition, a broker-dealer will be able to rely on that 
issuer's electronic postings to meet its Rule 15c2-11 obligations to 
investors and to facilitate resales of that issuer's securities in Rule 
144A transactions during the transition period.
    Several commenters urged the Commission to grandfather indefinitely 
current Rule 12g3-2(b)-exempt companies.\119\ Most of those issuers 
also stated their support for a three-year transition period as an 
alternative to a grandfathering provision.\120\ We decline to adopt a 
grandfathering provision because, in the interest of protecting 
investors, we believe that any issuer that claims the Rule 12g3-2(b) 
exemption must comply fully with the foreign listing condition and 
definition of primary trading market. Adoption of a three-year 
transition period will enable issuers to achieve full compliance with 
Rule 12g3-2(b) or Exchange Act registration without unduly burdening 
them.
---------------------------------------------------------------------------

    \119\ See the letters of the ABA, BNY, JPMorganChase, Pink OTC, 
and Shearman & Sterling.
    \120\ The ABA suggested a five-year transition period.
---------------------------------------------------------------------------

2. Regarding Processing of Paper Submissions
    We expect that, following the effectiveness of the adopted rule 
amendments, some Rule 12g3-2(b)-exempt companies will continue to 
submit their non-U.S. disclosure documents in paper to the Commission 
either because they are unaware of the amendments or lack electronic 
publishing capabilities. In order to assist those companies in 
complying with the new amendments, and because there may also be some 
investors who currently do not have ready access to the Internet, we 
are adopting a three-month transition period, as proposed. During this 
period, the Commission will continue to process paper Rule 12g3-2(b) 
submissions and make them publicly available in the Public Reference 
Room for three months following the effectiveness of the rule 
amendments. Thereafter, the Commission will no longer process paper 
Rule 12g3-2(b) submissions. An issuer that continues to make Rule 12g3-
2(b) submissions in paper after this three-month period, and does not 
publish the submitted documents electronically as required, will no 
longer be able to claim the Rule 12g3-2(b) exemption.
    Those commenters that addressed the matter supported such a 
transition period,\121\ although one commenter suggested a one-year 
period instead of a three-month period.\122\ Because of recent advances 
in information technology, we continue to believe that three months 
will be sufficient time for all Rule 12g3-2(b)-exempt issuers to 
develop the capabilities to publish electronically their non-U.S. 
disclosure documents, and for investors and other interested persons to 
determine how and where to access those electronically published 
documents.
---------------------------------------------------------------------------

    \121\ See the letters of the ABA, BNY and Pink OTC.
    \122\ See the BNY letter.
---------------------------------------------------------------------------

III. Paperwork Reduction Act

    The final rule amendments contain ``collection of information'' 
requirements within the meaning of the Paperwork Reduction Act of 1995 
(``PRA'').\123\ The title of the affected collections of information 
are submissions under Exchange Act Rule 12g3-2 (OMB Control No. 3235-
0119) and Securities Act Form F-6 (OMB Control No. 3235-0292). 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. Compliance with the amendments to Rule 12g3-2 
and Form F-6 is mandatory.
---------------------------------------------------------------------------

    \123\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------

    Exchange Act Rule 12g3-2 is an exemptive rule that, under paragraph 
(b) of that rule, provides an exemption from Exchange Act Section 12(g) 
registration for a foreign private issuer that, on an ongoing basis, 
either submits copies of its material non-U.S. disclosure documents to 
the Commission in paper or publishes those documents on its Internet 
Web site or through an electronic information delivery system in its 
primary trading market. We adopted paragraph (b) of Rule 12g3-2 in 
order to provide information for U.S. investors concerning foreign 
private issuers with limited securities trading in U.S. capital 
markets.
    Securities Act Form F-6 is the form used to register ADRs, which 
are a special type of security issued by a U.S. bank, representing a 
specified amount of securities issued by a foreign company that are 
deposited with the bank. We adopted Form F-6 in order to provide 
investors with information concerning a foreign company's ADRs, as 
disclosed in the deposit agreement, which must be attached as an 
exhibit to the Form F-6.
    The hours and costs associated with making submissions under 
Exchange Act Rule 12g3-2(b) and preparing and filing Form F-6 
constitute reporting and cost burdens imposed by those collections of 
information. We based our estimates of the effects that the final rule 
amendments will have on those collections of information primarily on 
our review of the most recently completed PRA submissions for Rule 
12g3-2(b) documents and Form F-6, on the particular requirements for 
those submissions and form, and on other information, for example, 
concerning relative U.S. and foreign trading volume for foreign private 
issuers whose equity securities trade in the U.S. over-the-counter 
market.

[[Page 52764]]

    The final rule amendments to Exchange Act Rule 12g3-2 will permit a 
foreign private issuer to claim the Rule 12g3-2(b) exemption, without 
having to submit paper copies of written materials to the Commission, 
if, among other requirements, it maintains a listing of the subject 
class of securities on one or more exchanges in its primary trading 
market. The final rule amendments define primary trading market to mean 
that at least 55 percent of the trading in the issuer's subject class 
of securities on a worldwide basis took place in, on or through the 
facilities of a securities market or markets in a single foreign 
jurisdiction or in no more than two foreign jurisdictions during the 
issuer's most recently completed fiscal year. The final rule amendments 
also provide that, if a foreign private issuer aggregates the trading 
of its subject class of securities in two foreign jurisdictions for the 
purpose of meeting the primary trading market definition, the trading 
for the issuer's securities in at least one of the two foreign 
jurisdictions must be larger than the trading in the United States for 
the same class of the issuer's securities.
    The final rule amendments further require that, as a condition to 
claiming the Rule 12g3-2(b) exemption, a non-Exchange Act reporting 
issuer must publish in English specified non-U.S. disclosure documents 
required by Rule 12g3-2(b) for its most recently completed fiscal year 
on its Internet Web site or through an electronic information delivery 
system in its primary trading market, instead of requiring their 
submission in paper as part of a written application to the Commission. 
The final rule amendments also require an issuer similarly to publish 
electronically specified non-U.S. disclosure documents in English on an 
ongoing basis for subsequent fiscal years as a condition to maintaining 
the Rule 12g3-2(b) exemption, rather than permitting their submission 
in paper to the Commission.
    The final amendments to Form F-6 will require a registrant to state 
that the issuer of the deposited securities, which is not an Exchange 
Act reporting company, publishes information in English required to 
maintain the Rule 12g3-2(b) exemption on the issuer's Internet Web site 
or through its primary trading market's electronic information delivery 
system.\124\ The final amendments will also require the registrant to 
disclose the address of the issuer's Internet Web site or electronic 
information delivery system. A registrant that already has an effective 
Form F-6 will have to disclose the address of where the issuer 
electronically publishes its non-U.S. disclosure documents under Rule 
12g3-2(b) when the registrant first amends its Form F-6 following the 
effective date of the final rule amendments.
---------------------------------------------------------------------------

    \124\ The final amendments provide that the registrant of an 
unsponsored ADR facility may make the required representation based 
upon its reasonable good faith belief after exercising reasonable 
diligence.
---------------------------------------------------------------------------

    We have prepared the annual burden and cost estimates of the final 
rule amendments on Rule 12g3-2(b) submissions or publications and Form 
F-6 based on the following current estimates and assumptions:
    <bullet> A foreign private issuer incurs 75% of the burden required 
to produce each Rule 12g3-2(b) submission or publication, excluding the 
initial application for the Rule 12g3-2(b) exemption and English 
translation work, and 25% of the burden required to perform work for 
the initial application and English translation for the Rule 12g3-2(b) 
submissions or publications;
    <bullet> Outside firms, including legal counsel, accountants and 
other advisors incur 25% of the burden required to produce each Rule 
12g3-2(b) submission or publication, not including the initial 
application for the Rule 12g3-2(b) exemption and English translation 
work, at an average cost of $400 per hour, and 75% of the burden 
required to produce the initial application at an average cost of $400 
per hour, and 75% of the burden resulting from English translation work 
at an average cost of $125 per hour;
    <bullet> English translation work constitutes on average 25% of the 
total work required for the Rule 12g3-2(b) submissions;
    <bullet> A registrant satisfies 25% of the burden required to 
produce each Form F-6; and
    <bullet> Outside firms, including legal counsel, accountants and 
other advisors, satisfy 75% of the burden required to produce each Form 
F-6 at an average cost of $400 per hour.
    We published a notice requesting comment on the collection of 
information requirements in the Proposing Release and submitted these 
requirements to the Office of Management and Budget (``OMB'') for 
review in accordance with the PRA.\125\ We received several comment 
letters regarding the proposed rule amendments, although none addressed 
their estimated effects on the collection of information requirements. 
We have revised the proposed rule amendments in response to those 
comments. As a result, we have revised the estimated reporting and cost 
burdens of the rule amendments, as discussed below.
---------------------------------------------------------------------------

    \125\ 44 U.S.C. 3507(d) and 5 CFR 1320.11.
---------------------------------------------------------------------------

A. Rule 12g3-2(b) Submissions or Publications

    We estimate that, currently under Rule 12g3-2(b), on an annual 
basis:
    <bullet> 1,036 foreign private issuers claim the Rule 12g3-2(b) 
exemption;
    <bullet> Each issuer makes on average 12 submissions or 
publications, for a total of 12,432 submissions or publications under 
Rule 12g3-2(b);
    <bullet> Production of those Rule 12g3-2(b) submissions or 
publications requires a total of 49,728 burden hours, or an average of 
4 burden hours per submission or publication (for all work performed by 
foreign private issuers and outside firms);
    <bullet> Of those total burden hours, 13,700 hours result from work 
incurred by 685 issuers to produce their initial Rule 12g3-2(b) 
applications; \126\
---------------------------------------------------------------------------

    \126\ We previously estimated that 685 issuers obtained the Rule 
12g3-2(b) exemption before the adoption of Rule 12h-6, which 
eliminated the application process for issuers that deregister 
pursuant to that new rule. See Release No. 34-55540. All of the 685 
issuers obtained the Rule 12g3-2(b) exemption after having submitted 
a letter application to the Commission. Based on a review of several 
Rule 12g3-2(b) applications, and an assessment of Rule 12g3-2(b)'s 
requirements and current practice, we estimated then, and continue 
to estimate, that it takes approximately 20 hours on average to 
complete a Rule 12g3-2(b) letter application. 685 x 20 hrs. = 13,700 
hrs.
---------------------------------------------------------------------------

    <bullet> Foreign private issuers incur a total of 25,943 burden 
hours \127\ to produce the Rule 12g3-2(b) submissions or publications, 
or an average of 2.1 burden hours per submission or publication; \128\ 
and
---------------------------------------------------------------------------

    \127\ 49,728 hrs. - 13,700 hrs. = 36,028 hrs. for work excluding 
application work. 36,028 hrs. x .25 = 9,007 hrs. for English 
translation work. 36,028 hrs. - 9,007 hrs. = 27,021 hrs. x .75 = 
20,266 hrs. for non-English translation work. 9,007 hrs. x .25 = 
2,252 hrs. for English translation work. 13,700 hrs. x .25 = 3,425 
hrs. for application work. 20,266 hrs. + 2,252 hrs. + 3,425 hrs. = 
25,943 hrs. for total work performed by foreign private issuers. 
25,943 hrs./12,432 = 2.1 hrs per submission or publication.
    \128\ The last OMB-approved submission for Rule 12g3-2(b) 
reported 31,080 burden hours for foreign private issuers. Our 
current estimate of 25,943 burden hours is due to our assessment of 
the average annual burden hours required to produce written 
applications under Rule 12g3-2(b), most of which are incurred by 
outside firms. The decrease in hours represents an adjustment to the 
previous OMB-approved burden estimate for Rule 12g3-2(b), which we 
noted when submitting the PRA estimate for the Proposing Release.
---------------------------------------------------------------------------

    <bullet> Outside firms perform service at a total cost of 
$7,656,375 \129\ to produce

[[Page 52765]]

the Rule 12g3-2(b) submissions or publications.\130\
---------------------------------------------------------------------------

    \129\ 27,021 hrs. x .25 = 6,755 hrs. x $400/hr. = $2,702,000 for 
non-English translation work. 9,007 hrs. x .75 = 6,755 hrs. x $125/
hr. = $844,375 for English translation work. 13,700 hrs. x .75 = 
10,275 hrs. x $400/hr. = $4,110,000 for application work. $2,702,000 
+ $844,375 + $4,110,000 = $7,656,375 for total work performed by 
outside firms.
    \130\ The last OMB-approved submission for Rule 12g3-2(b) 
reported $4,895,100 in total costs for outside firms. Our current 
estimate of $7,656,375 is due to the previously noted assessment of 
the average annual burden hours required to produce written 
applications under Rule 12g3-2(b). This increase in costs represents 
an adjustment to the previous OMB-approved cost estimate for Rule 
12g3-2(b), which we noted when submitting the PRA estimate for the 
Proposing Release.
---------------------------------------------------------------------------

    We estimate that, on an annual basis, up to 350 additional foreign 
private issuers could claim the Rule 12g3-2(b) exemption as a result of 
the amendments to Rule 12g3-2 we are adopting today.\131\ This increase 
in the number of Rule 12g3-2(b)-exempt issuers would cause:
---------------------------------------------------------------------------

    \131\ We previously estimated that the proposed rule amendments 
would cause an additional 150 issuers to claim the Rule 12g3-2(b) 
exemption. We have increased the estimated number of issuers 
affected by the final rule amendments in part due to the elimination 
of the proposed condition that would have required an issuer to have 
its U.S. trading volume no greater than 20 percent of its worldwide 
trading volume for its last fiscal year. Under the final rule 
amendments, an issuer must still meet the foreign listing/primary 
trading market condition, which effectively limits the issuer's U.S. 
trading volume to no greater than 45%. The increase in the estimated 
number of issuers affected by the final rule amendments is also due 
to a reconsideration of the number of unsponsored ADR facilities 
that could result from the amended rules.
---------------------------------------------------------------------------

    <bullet> The number of issuers claiming the Rule 12g3-2(b) 
exemption to total 1,386;
    <bullet> The number of Rule 12g3-2(b) publications to total 16,632; 
\132\
---------------------------------------------------------------------------

    \132\ 1,386 x 12 = 16,632 publications.
---------------------------------------------------------------------------

    <bullet> The number of burden hours required to produce these Rule 
12g3-2(b) publications to total 59,528 hours (for all work performed by 
issuers and outside firms); \133\
---------------------------------------------------------------------------

    \133\ 16,632 x 4 hrs. = 66,528 hrs. 350 x 20 hrs. = 7,000 hrs. 
of work saved by the elimination of the written application 
requirement. 66,528 hrs. - 7,000 hrs. = 59,528 hrs.
---------------------------------------------------------------------------

    <bullet> The number of burden hours incurred by foreign private 
issuers to produce the Rule 12g3-2(b) publications to total 37,206 
hours, or 2.2 burden hours per publication; \134\ and
---------------------------------------------------------------------------

    \134\ 59,528 hrs. x .25 = 14,882 hrs. for English translation 
work. 59,528 hrs. - 14,882 hrs. = 44,646 hrs.; 44,646 hrs. x .75 = 
33,485 hrs. for non-English translation work; 14,882 hrs. x .25 = 
3,721 hrs. for English translation work; 33,485 hrs. + 3,721 hrs. = 
37,206 total hrs. incurred by foreign private issuers. 37,206 hrs./
16,632 = 2.2 hrs. per publication. This represents an increase of 
6,126 hrs. from the most recent OMB-approved burden estimate for 
Rule 12g3-2(b) submissions or publications. Using a rate of $175/hr. 
for in-house work, the adopted amendments could result in $6,511,050 
of in-house costs incurred by foreign private issuers compared to 
$5,439,000 of in-house costs based on the previous OMB-approved 
burden estimate for Rule 12g3-2(b) submissions or publications. 
37,206 hrs. x $175/hr. = $6,511,050. 31,080 hrs. x $175/hr. = 
$5,439,000.
---------------------------------------------------------------------------

    <bullet> Outside firms perform services at a total cost of 
$5,860,050 \135\ to produce the Rule 12g3-2(b) publications.\136\
---------------------------------------------------------------------------

    \135\ 44,646 hrs. x .25 = 11,162 hrs. x $400/hr. = $4,464,800 
for non-English translation work; 14,882 hrs. x .75 = 11,162 hrs. x 
$125/hr. = $1,395,250 for English translation work; $4,464,800 + 
$1,395,250 = $5,860,050 for total costs incurred by outside firms. 
This represents an increase of $964,950 from the most recent OMB-
approved cost estimate for Rule 12g3-2(b) submissions or 
publications.
    \136\ Based on the above estimates, the amendments could result 
in a $2,037,000 increase in Rule 12g3-2(b) costs. $6,511,050 + 
$5,860,050 = $12,371,100 in total post-amendment Rule 12g3-2(b) 
costs. $5,439,000 + $4,895,100 = $10,334,100 in total pre-amendment 
Rule 12g3-2(b) costs. $12,371,100 - $10,334,100 = $2,037,000 
increase in Rule 12g3-2(b) costs.
---------------------------------------------------------------------------

B. Form F-6

    We currently estimate that, on an annual basis:
    <bullet> 150 registrants file Form F-6;
    <bullet> Each registrant files one Form F-6, for a total of 150 
Form F-6s;
    <bullet> Production of these Form F-6s requires 150 burden hours, 
or one burden hour per Form F-6 (for all work performed by registrants 
and outside firms);
    <bullet> Of those total hours, registrants incur 38 hours to 
produce the Form F-6s, or an average of .25 hours per Form F-6; \137\ 
and
---------------------------------------------------------------------------

    \137\ 150 hrs. x .25 = 38 hrs.
---------------------------------------------------------------------------

    <bullet> Outside firms perform services at a total cost of $45,000 
to produce the Form F-6s.\138\
---------------------------------------------------------------------------

    \138\ 150 hrs. x .75 x $400/hr. = $45,000.
---------------------------------------------------------------------------

    We estimate that, on an annual basis, approximately 350 additional 
registrants could file Form F-6 as a result of the final rule 
amendments. We further estimate that, as a result of the final rule 
amendments, the burden required to produce each Form F-6 would increase 
by .5 hours. This increase in the number of Form F-6s and burden hours 
would cause:
    <bullet> The number of Form F-6s filed to increase by 350 for a 
total of 500;
    <bullet> The total hours required to produce the Form F-6s to 
increase by 525 hours for a total of 675 hours, or 1.35 hours per Form 
F-6; \139\
---------------------------------------------------------------------------

    \139\ For the additional 350 filers: 350 x 1.5 hrs. = 525 hrs., 
525 hrs. + 150 hrs. = 675 hrs., 675 hrs./500 = 1.35 hrs. per Form F-
6.
---------------------------------------------------------------------------

    <bullet> The number of burden hours incurred by registrants to 
produce the Form F-6s to increase by 131 hours to 169 hours, or.34 
hours per Form F-6; \140\ and
---------------------------------------------------------------------------

    \140\ 675 hrs. x .25 = 169 hrs., 169 hrs. - 38 hrs. = 131 hrs., 
169 hrs./500 = .34 hr. per Form F-6. Using a rate of $175/hr. for 
in-house work, the adopted amendments could result in $29,575 of in-
house costs incurred by foreign private issuers compared to $6,650 
of pre-amendment in-house costs. 169 hrs. x $175/hr. = $29,575. 38 
hrs. x $175/hr. = $6,650.
---------------------------------------------------------------------------

    <bullet> Outside firms to perform services at a total cost of 
$202,400 (an increase of $157,400) \141\ to produce the Form F-6s.\142\
---------------------------------------------------------------------------

    \141\ 675 hrs. x .75 = 506 hrs. x $400/hr. = $202,400. $202,400 
- $45,000 = $157,400.
    \142\ Based on the above estimates, the amendments could result 
in a $180,325 increase in Form F-6 costs. $29,575 + $202,400 = 
$231,975 in total post-amendment Form F-6 costs. $6,650 + $45,000 = 
$51,650 in total pre-amendment Form F-6 costs. $231,975 - $51,650 = 
$180,325 increase in Form F-6 costs. Thus, considering the estimated 
effects on both Rule 12g3-2(b) submissions and publications and Form 
F-6, the amendments could result in a $2,217,325 increase in total 
costs. $2,037,000 + $180,325 = $2,217,325.
---------------------------------------------------------------------------

IV. Cost-Benefit Analysis

A. Expected Benefits

    The adopted rule amendments are designed to encourage more foreign 
companies, which have not listed or otherwise publicly sold their 
securities in the United States, to claim the Rule 12g3-2(b) exemption, 
and thereby require them to publish on the Internet material disclosure 
documents in English, enhancing the ability of U.S. investors to trade 
equity securities of such companies in the U.S. over-the-counter 
market. The Rule 12g3-2(b) exemption permits a foreign company to have 
established an unlisted ADR facility under which its equity securities 
are traded as ADRs in the U.S. over-the-counter market for the 
convenience of U.S. investors, even if its U.S. investors exceed the 
Section 12(g) shareholder thresholds.\143\ The Rule 12g3-2(b) exemption 
also permits a foreign company to have its equity securities traded in 
the form of ordinary shares through the U.S. over-the-counter market, 
makes it easier for broker-dealers to fulfill their obligations under 
Exchange Act Rule 15c2-11, and facilitates the resale of a foreign 
company's securities to qualified institutional buyers in the United 
States under Securities Act Rule 144A.
---------------------------------------------------------------------------

    \143\ Use of an ADR facility makes it easier for a U.S. investor 
to receive dividends in U.S. dollars. Moreover, because the 
clearance and settlement process for ADRs generally is the same for 
securities of domestic companies that are traded in U.S. markets, a 
U.S. holder of an ADR is able to hold securities of a foreign 
company that trades, clears and settles within automated U.S. 
systems and within U.S. time periods.
---------------------------------------------------------------------------

    The adopted rule amendments should result in new investment 
opportunities in foreign securities for U.S. investors by encouraging 
more foreign companies to claim the Rule 12g3-2(b) exemption and 
thereby have their securities traded in the United States over-the-
counter market. The new investment opportunities in foreign securities 
may also lead to improved diversification in the portfolios of U.S. 
investors.
    The adopted rule amendments will encourage more foreign companies 
to

[[Page 52766]]

claim the Rule 12g3-2(b) exemption by reducing the costs of obtaining 
that exemption for foreign private issuers in two ways. First, the rule 
amendments will enable an otherwise eligible issuer to claim the Rule 
12g3-2(b) exemption, regardless of the number of its U.S. security 
holders, as long as it maintains a listing of the subject class of 
equity securities on one or more exchanges in no more than two foreign 
jurisdictions constituting its primary trading market. The rule 
amendments define ``primary trading market'' to mean that at least 55 
percent of the worldwide trading volume of the issuer's subject class 
of securities occurs in no more than two foreign jurisdictions, and the 
trading volume in one of the foreign jurisdictions must be larger than 
the U.S. trading volume for the same class of securities. Currently 
Rule 12g3-2(b) requires an issuer to disclose the number of its U.S. 
security holders and the percentage of its outstanding securities held 
by them when applying for the Rule's exemption from Exchange Act 
registration.\144\ Since it is typically more difficult for a foreign 
company to calculate the number of its U.S. holders than to determine 
its U.S. or foreign trading volume, the adopted rule amendments should 
make it easier for more foreign companies to claim the exemption and 
thereby have their securities traded in the U.S. over-the-counter 
market for the benefit of U.S. investors.
---------------------------------------------------------------------------

    \144\ An issuer must also currently recalculate the number of 
its U.S. security holders when applying for reinstatement of the 
Rule 12g3-2(b) exemption should it lose that exemption due to non-
compliance with the Rule's ongoing requirements.
---------------------------------------------------------------------------

    Second, the adopted rule amendments will eliminate the current 
written application process that requires an issuer to submit in paper 
specified information concerning, for example, its non-U.S. disclosure 
requirements, along with paper copies of its non-U.S. disclosure 
documents published since the beginning of its last fiscal year. Since 
outside law firms typically perform most of the work required for the 
application, the rule amendments should reduce Rule 12g3-2(b) costs for 
foreign companies and encourage more of them to have their securities 
traded in the U.S. over-the-counter market pursuant to the Rule 12g3-
2(b) exemption for the benefit of U.S. investors.
    The adopted rule amendments will further benefit U.S. investors by 
requiring any foreign company that claims the Rule 12g3-2(b) exemption 
to publish in English specified non-U.S. disclosure documents on its 
Internet Web site or through an electronic information delivery system 
that is generally available to the public in its primary trading 
market. Currently an issuer that has obtained the Rule 12g3-2(b) 
exemption upon application may submit its non-U.S. documents on an 
ongoing basis in paper to the Commission. By requiring the electronic 
publication in English of specified non-U.S. documents for any issuer 
claiming the Rule 12g3-2(b) exemption, the adopted amendments should 
make it easier for U.S. investors to gain access to a foreign private 
issuer's material non-U.S. disclosure documents and make better 
informed decisions regarding whether to invest in that issuer's equity 
securities.

B. Expected Costs

    Investors will incur costs from the adopted rule amendments to the 
extent that the amendments encourage more foreign companies, which 
otherwise would be required to register their equity securities under 
the Exchange Act, to claim the Rule 12g3-2(b) exemption, where the 
information, enforcement remedies, and other effects of registration 
are valuable to investors. We estimate that, on an annual basis, 
approximately 350 additional foreign private issuers could claim the 
Rule 12g3-2(b) exemption as a result of the adopted amendments to Rule 
12g3-2. Some less technologically capable investors may also incur 
costs resulting from the search and retrieval of a foreign company's 
electronically published documents. However, we expect those costs to 
be less than the costs that investors currently must incur to obtain 
written copies of a foreign company's non-U.S. disclosure documents 
submitted in paper to the Commission.
    A foreign company will incur costs resulting from the amended 
rule's requirement to publish electronically specified non-U.S. 
disclosure documents in English to the extent that it is not already 
required to, or does not already, do so pursuant to any applicable law 
or rule. A foreign private issuer will also incur costs resulting from 
its required annual determination regarding whether it is still in 
compliance with the amended rule's primary trading market provision. 
However, those costs will likely be less than the costs that an issuer 
currently must incur when calculating the number of its U.S. holders 
pursuant to Rule 12g3-2(b).
    If, because of those costs, the foreign company does not claim or 
maintain the Rule 12g3-2(b) exemption, U.S. investors interested in 
trading in the securities of that company would have to resort to 
trading in the company's non-U.S. primary trading market. Those U.S. 
investors could incur costs associated with finding and contracting 
with a broker-dealer who is able to trade in the foreign reporting 
company's primary trading market. U.S. investors could also face 
additional costs resulting from currency conversion and higher 
transaction costs trading the securities in a foreign market. U.S. 
investors would also incur costs from lost investment opportunities and 
possibly lost diversification benefits to the extent that they choose 
not to trade in a foreign company's securities that are not available 
in the U.S. over-the-counter market.

V. Consideration of Impact on the Economy, Burden on Competition and 
Promotion of Efficiency, Competition and Capital Formation Analysis

    When adopting rules under the Exchange Act, Section 23(a)(2) of the 
Exchange Act \145\ requires us to consider the impact that any new rule 
will have on competition. Section 23(a)(2) also prohibits us from 
adopting any rule that will impose a burden on competition not 
necessary or appropriate in furtherance of the purposes of the Exchange 
Act. Furthermore, when engaging in rulemaking that requires us to 
consider or determine whether an action is necessary or appropriate in 
the public interest, Section 2(b) \146\ of the Securities Act and 
Section 3(f) of the Exchange Act \147\ require the Commission to 
consider whether the action will promote efficiency, competition and 
capital formation.
---------------------------------------------------------------------------

    \145\ 15 U.S.C. 78w(a)(2).
    \146\ 15 U.S.C. 77b(b).
    \147\ 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    In the Proposing Release, we considered the proposed rule 
amendments in light of the standards set forth in the above statutory 
sections. We solicited comment on whether, if adopted, the proposed 
rule amendments would result in any anti-competitive effects or promote 
efficiency, competition and capital formation. We further encouraged 
commenters to provide empirical data or other facts to support their 
views on any anti-competitive effects or any burdens on efficiency, 
competition or capital formation that might result from adoption of the 
proposed amendments.
    We did not receive any comments or any empirical data in this 
regard concerning the proposed amendments. Accordingly, since the 
adopted rule amendments are similar to the proposed rule amendments, we 
continue to believe the amended rules will

[[Page 52767]]

contribute to efficiency, competition and capital formation.
    The adopted amendments revise the rules that determine when a 
foreign private issuer may claim the exemption from Exchange Act 
Section 12(g) registration under Exchange Act Rule 12g3-2(b). That 
exemption permits limited trading of an issuer's exempted equity 
securities in the over-the-counter market in the United States as long 
as the issuer submits its non-U.S. disclosure documents to the 
Commission, notwithstanding that the issuer exceeds the Section 12(g) 
registration thresholds. Many foreign private issuers rely on the Rule 
12g3-2(b) exemption to have established ADR facilities, which make it 
easier for U.S. investors to trade in those issuers' equity securities. 
The Rule 12g3-2(b) exemption also makes it easier for broker-dealers to 
meet their Exchange Act Rule 15c2-11 obligations, and effect the resale 
of a foreign private issuer's securities to QIBs under Securities Act 
Rule 144A.
    The adopted rule amendments will permit a foreign private issuer to 
claim the Rule 12g3-2(b) exemption without having to submit a paper 
application to the Commission, as is currently required, if, among 
other conditions, the issuer maintains a listing on one or more 
exchanges in no more than two foreign jurisdictions that constitute its 
primary trading market. The adopted rule amendments will also require 
an issuer to publish in English specified non-U.S. disclosure documents 
on its Internet Web site or through an electronic information delivery 
system that is generally available to the public in its primary trading 
market. Currently an issuer that has obtained the Rule 12g3-2(b) 
exemption by application may submit its non-U.S. disclosure documents 
in paper to the Commission.
    By enabling a qualified foreign private issuer to claim the Rule 
12g3-2(b) exemption automatically, and without regard to the number of 
its U.S. shareholders, as is currently the case, the adopted rule 
amendments should encourage more foreign private issuers to claim the 
Rule 12g3-2(b) exemption by lowering the costs of obtaining that 
exemption. Consequently, the adopted rule amendments should increase 
the efficiency of foreign private issuers' claiming the exemption and 
foster the trading of foreign companies' equity securities in the U.S. 
over-the-counter market, for example, by enabling the establishment of 
additional ADR facilities and making it easier for broker-dealers to 
meet their Rule 15c2-11 obligations with respect to foreign securities. 
The enhanced ability of investors to trade foreign securities in the 
United States should help encourage competition between domestic and 
foreign firms for investors in the U.S. over-the-counter market.
    Moreover, by requiring the electronic publication in English of 
specified non-U.S. disclosure documents for any issuer claiming the 
Rule 12g3-2(b) exemption, the adopted amendments should make it easier 
for U.S. investors to gain access to a foreign private issuer's 
material non-U.S. disclosure documents and make better informed 
decisions regarding whether to invest in that issuer's equity 
securities. Thus, the proposed amendments should foster increased 
efficiency in the trading of the issuer's securities.

VI. Regulatory Flexibility Act Certification

    Under Section 605(b) of the Regulatory Flexibility Act,\148\ we 
certified that, when adopted, the proposed rule amendments would not 
have a significant economic impact on a substantial number of small 
entities. We included this certification in Part VI of the Proposing 
Release. While we encouraged written comments regarding this 
certification, no commenters responded to this request.
---------------------------------------------------------------------------

    \148\ 5 U.S.C. 605(b).
---------------------------------------------------------------------------

VII. Statutory Basis and Text of Rule Amendments

    We are adopting the amendments to Securities Act Form F-6, Exchange 
Act Rules 12g3-2 and 15c2-11, and Exchange Act Forms 40-F, 6-K, and 15F 
under the authority in Sections 6, 7, 10 and 19 of the Securities Act 
\149\ and Sections 3(b), 12, 13, 23 and 36 of the Exchange Act.\150\
---------------------------------------------------------------------------

    \149\ 15 U.S.C. 77f, 77g, 77h, 77j, and 77s.
    \150\ 15 U.S.C. 78c, 78l, 78m, 78w, and 78mm.
---------------------------------------------------------------------------

Text of Rule Amendments

List of Subjects in 17 CFR Parts 239, 240 and 249

    Reporting and recordkeeping requirements, Securities.

0
For the reasons set out in the preamble, we are amending Title 17, 
Chapter II of the Code of Federal Regulations as follows.

PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

0
1. The authority citation for part 239 continues to read in part as 
follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 
77sss, 78c, 78l, 78m, 78n, 78o(d), 78u-5, 78w(a), 78ll, 78mm, 80a-
2(a), 80a-3, 80a-8, 80a-9, 80a-10, 80a-13, 80a-24, 80a-26, 80a-29, 
80a-30, and 80a-37, unless otherwise noted.
* * * * *

0
2. Amend Form F-6 (referenced in Sec.  239.36) by revising Item 2 of 
Part I to read as follows:

    Note: The text of Form F-6 does not and this amendment will not 
appear in the Code of Federal Regulations.

FORM F-6

Registration Statement Under the Securities Act of 1933 for Depositary 
Shares Evidenced by American Depositary Receipts

* * * * *

Part I--Information Required In Prospectus

* * * * *
Item 2. Available Information
    Provide the information in either (a) or (b) below, whichever is 
applicable.
    (a) State that the foreign issuer publishes information in English 
required to maintain the exemption from registration under Rule 12g3-
2(b) under the Securities Exchange of 1934 on its Internet Web site or 
through an electronic information delivery system generally available 
to the public in its primary trading market. Then disclose the address 
of the foreign issuer's Internet Web site or the electronic information 
delivery system in its primary trading market.
    (b) State that the foreign issuer is subject to the periodic 
reporting requirements of the Securities Exchange Act of 1934 and 
accordingly files reports with the Commission. Then disclose that these 
reports are available for inspection and copying through the 
Commission's EDGAR system or at public reference facilities maintained 
by the Commission in Washington, DC.

    Note to Item 2: In the case of an unsponsored ADR facility, you 
may base your representation that the issuer publishes information 
in English required to maintain the exemption from registration 
under Exchange Act Rule 12g3-2(b) upon your reasonable, good faith 
belief after exercising reasonable diligence.

* * * * *

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 
1934

0
3. 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, 80a-

[[Page 52768]]

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.
* * * * *

0
4. Amend Sec.  240.12g3-2 by revising paragraphs (b), (c), and (d), and 
removing paragraphs (e) and (f), to read as follows:


Sec.  240.12g3-2  Exemptions for American depositary receipts and 
certain foreign securities.

* * * * *
    (b)(1) A foreign private issuer shall be exempt from the 
requirement to register a class of equity securities under section 
12(g) of the Act (15 U.S.C. 78l(g)) if:
    (i) The issuer is not required to file or furnish reports under 
section 13(a) of the Act (15 U.S.C. 78m(a)) or section 15(d) of the Act 
(15 U.S.C. 78o(d));
    (ii) The issuer currently maintains a listing of the subject class 
of securities on one or more exchanges in a foreign jurisdiction that, 
either singly or together with the trading of the same class of the 
issuer's securities in another foreign jurisdiction, constitutes the 
primary trading market for those securities; and
    (iii) The issuer has published in English, on its Internet Web site 
or through an electronic information delivery system generally 
available to the public in its primary trading market, information 
that, since the first day of its most recently completed fiscal year, 
it:
    (A) Has made public or been required to make public pursuant to the 
laws of the country of its incorporation, organization or domicile;
    (B) Has filed or been required to file with the principal stock 
exchange in its primary trading market on which its securities are 
traded and which has been made public by that exchange; and
    (C) Has distributed or been required to distribute to its security 
holders.

    Note 1 to Paragraph (b)(1): For the purpose of paragraph (b) of 
this section, primary trading market means that at least 55 percent 
of the trading in the subject class of securities on a worldwide 
basis took place in, on or through the facilities of a securities 
market or markets in a single foreign jurisdiction or in no more 
than two foreign jurisdictions during the issuer's most recently 
completed fiscal year. If a foreign private issuer aggregates the 
trading of its subject class of securities in two foreign 
jurisdictions for the purpose of this paragraph, the trading for the 
issuer's securities in at least one of the two foreign jurisdictions 
must be larger than the trading in the United States for the same 
class of the issuer's securities. When determining an issuer's 
primary trading market under this paragraph, calculate average daily 
trading volume in the United States and on a worldwide basis as 
under Rule 12h-6 under the Act (Sec.  240.12h-6).


    Note 2 to Paragraph (b)(1): Paragraph (b)(1)(iii) of this 
section does not apply to an issuer when claiming the exemption 
under paragraph (b) of this section upon the effectiveness of the 
termination of its registration of a class of securities under 
section 12(g) of the Act, or the termination of its obligation to 
file or furnish reports under section 15(d) of the Act.


    Note 3 to Paragraph (b)(1): Compensatory stock options for which 
the underlying securities are in a class exempt under paragraph (b) 
of this section are also exempt under that paragraph.

    (2)(i) In order to maintain the exemption under paragraph (b) of 
this section, a foreign private issuer shall publish, on an ongoing 
basis and for each subsequent fiscal year, in English, on its Internet 
Web site or through an electronic information delivery system generally 
available to the public in its primary trading market, the information 
specified in paragraph (b)(1)(iii) of this section.
    (ii) An issuer must electronically publish the information required 
by paragraph (b)(2) of this section promptly after the information has 
been made public.
    (3)(i) The information required to be published electronically 
under paragraph (b) of this section is information that is material to 
an investment decision regarding the subject securities, such as 
information concerning:
    (A) Results of operations or financial condition;
    (B) Changes in business;
    (C) Acquisitions or dispositions of assets;
    (D) The issuance, redemption or acquisition of securities;
    (E) Changes in management or control;
    (F) The granting of options or the payment of other remuneration to 
directors or officers; and
    (G) Transactions with directors, officers or principal security 
holders.
    (ii) At a minimum, a foreign private issuer shall electronically 
publish English translations of the following documents required to be 
published under paragraph (b) of this section if in a foreign language:
    (A) Its annual report, including or accompanied by annual financial 
statements;
    (B) Interim reports that include financial statements;
    (C) Press releases; and
    (D) All other communications and documents distributed directly to 
security holders of each class of securities to which the exemption 
relates.
    (c) The exemption under paragraph (b) of this section shall remain 
in effect until:
    (1) The issuer no longer satisfies the electronic publication 
condition of paragraph (b)(2) of this section;
    (2) The issuer no longer maintains a listing of the subject class 
of securities on one or more exchanges in a primary trading market, as 
defined under paragraph (b)(1) of this section; or
    (3) The issuer registers a class of securities under section 12 of 
the Act or incurs reporting obligations under section 15(d) of the Act.
    (d) Depositary shares registered on Form F-6 (Sec.  239.36 of this 
chapter), but not the underlying deposited securities, are exempt from 
section 12(g) of the Act under this paragraph.

0
5. Amend Sec.  240.15c2-11 by revising paragraph (a)(4) to read as 
follows:


Sec.  240.15c2-11  Initiation or resumption of quotations without 
specific information.

* * * * *
    (a) * * *
    (4) The information that, since the beginning of its last fiscal 
year, the issuer has published pursuant to Sec.  240.12g3-2(b), and 
which the broker or dealer shall make reasonably available upon the 
request of a person expressing an interest in a proposed transaction in 
the issuer's security with the broker or dealer, such as by providing 
the requesting person with appropriate instructions regarding how to 
obtain the information electronically; or
* * * * *

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

0
6. 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.
* * * * *

0
7. Amend Form 40-F (referenced in Sec.  249.240f), the cover page, by 
removing the second to last paragraph, which pertains to information 
furnished pursuant to Rule 12g3-2(b), including the check boxes.

    Note: The text of Form 40-F does not and this amendment will not 
appear in the Code of Federal Regulations.


0
8. Amend Form 6-K (referenced in Sec.  249.306), the cover page, by 
removing the two paragraphs, which pertain to information furnished 
pursuant to Rule 12g3-2(b), following the second Note, including the 
check boxes.


[[Page 52769]]


    Note: The text of Form 6-K does not and this amendment will not 
appear in the Code of Federal Regulations.


0
9. Amend Form 15F (referenced in Sec.  249.324) by revising General 
Instruction E and Item 9 of Part II to read as follows:

    Note: The text of Form 15F does not and this amendment will not 
appear in the Code of Federal Regulations.

FORM 15F

Certification of a Foreign Private Issuer's Termination of Registration 
of a Class of Securities Under Section 12(G) of the Securities Exchange 
Act of 1934 or Its Termination of the Duty To File Reports Under 
Section 13(A) or Section 15(D) of the Securities Exchange Act of 1934

* * * * *

General Instructions

* * * * *
E. Rule 12g3-2(b) Exemption
    Regardless of the particular Rule 12h-6 provision under which it is 
proceeding, a foreign private issuer that has filed a Form 15F 
regarding a class of equity securities shall receive the exemption 
under Rule 12g3-2(b) (17 CFR 240.12g3-2(b)) for the subject class of 
equity securities immediately upon the effective date of its 
termination of registration and reporting under Rule 12h-6. Refer to 
Rules 12g3-2(b)(2) and (b)(3) (17 CFR 240.12g3-2(b)(2) and (b)(3)) and 
Rule 12g3-2(c) (17 CFR 240.12g3-2(c)) for the conditions that a foreign 
private issuer must meet in order to maintain the Rule 12g3-2(b) 
exemption following its termination of Exchange Act registration and 
reporting.
* * * * *

Part II

Item 9. Rule 12g3-2(b) Exemption
    Disclose the address of your Internet Web site or of the electronic 
information delivery system in your primary trading market on which you 
will publish the information required to maintain the exemption under 
Rule 12g3-2(b).
Instruction to Item 9
    Refer to Rule 12g3-2(b)(3)(ii) (17 CFR 240.12g3-2(b)(3)(ii)) for 
instructions regarding providing English translations of documents 
required to maintain the Rule 12g3-2(b) exemption.
* * * * *

    By the Commission.

    Dated: September 5, 2008.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-20995 Filed 9-9-08; 8:45 am]
BILLING CODE 8010-01-P