- 306 - communications and relaxed integration rules). We also believe that our proposals balance these benefits with enhanced protection for investors (e.g., earlier prospectus delivery, filing of free writing prospectuses). We solicit comment on the impact that our proposals may have on microcap companies and microcap fraud. Should we exclude microcap companies from some of our proposals as a precautionary measure against microcap fraud? If so, which proposals? By excluding microcap companies from certain proposals would we be providing a competitive advantage to their non-microcap competitors? Rather than excluding microcap companies, should we provide for enhanced monitoring of microcap companies? We encourage your comments on whether and how our proposal would affect the secondary trading markets for securities. How would our proposal affect public investors, broker-dealers and the companies whose securities are traded in the secondary markets? Our proposed changes to the Exchange Act disclosure system would enhance and speed corporate information to the marketplace, would add Commission resources to oversight of the secondary markets and should provide valuable benefits to investors. Besides the proposed Exchange Act reporting changes, our proposal relates primarily to the securities offering process, rather than secondary trading. Would these proposed changes adversely affect participants in secondary trading? Would investor protection in secondary market transactions be affected by our proposed changes? If so, how? Any interested person wishing to submit written comments on any aspect of the proposals, as well as on other matters that might have an impact on the proposals, is requested to do so. In addition, the Commission requests comment on whether any further changes to the Commission's rules and forms are necessary or appropriate to implement the objectives of the proposals. Comments should be submitted in triplicate to Jonathan G. Katz, Secretary, U.S. Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 and should refer to file number S7-30-98. XVIII. STATUTORY BASES The proposed new rules, forms and amendments to the Commission existing rules and forms are being proposed pursuant to Sections 2(b), 6, 7, 8, 10, 19(a) and 28 of the Securities Act of 1933 as amended and Sections 3, 4, 10, 12, 15, 23 and 36 of the Securities Exchange Act of 1934. List of Subjects 17 CFR Part 200 Administrative practice and procedure, Authority delegation (Government agencies). 17 CFR Part 202 Administrative practice and procedure, Securities. 17 CFR Part 210 Accountants, Accounting. 17 CFR Part 228 Reporting and recordkeeping requirements, Securities, Small business. 17 CFR Parts 229, 239 and 249 Reporting and recordkeeping requirements, Securities. 17 CFR Part 230 Advertising, Investment companies, Reporting and recordkeeping requirements, Securities. 17 CFR Part 240 Brokers, Reporting and recordkeeping requirements, Securities. TEXT OF PROPOSED AMENDMENTS In accordance with the foregoing, the Securities and Exchange Commission proposes to amend Title 17, chapter II of the Code of Federal Regulations as follows: PART 200 -ORGANIZATION; CONDUCT AND ETHICS; AND INFORMATION AND REQUESTS 1. The authority citation for Part 200 continues to read in part as follows: Authority: 15 U.S.C. 77s, 78d-1, 78d-2, 78w, 78ll(d), 78mm, 79t, 77sss, 80a-37, 80b-11, unless otherwise noted. * * * * * 2. By removing paragraph (a)(4) in § 200.30-1 and by redesignating paragraphs (a)(5), (a)(6), (a)(7) and (a)(8) as paragraphs (a)(4), (a)(5), (a)(6) and (a)(7). - 307 - PART 202 - INFORMAL AND OTHER PROCEDURES 3. The authority citation for Part 202 continues to read in part as follows: Authority: 15 U.S.C. 77s, 77t, 78d-1, 78u, 78w, 78ll(d), 79r, 79t, 77sss, 77uuu, 80a-37, 80a-41, 80b-9, and 80b-11, unless otherwise noted. * * * * * 4. By revising the seventh sentence of the introductory text of § 202.3a to read as follows: § 202.3a Instructions for filing fees. * * * Filing fees paid pursuant to Section 6(b) of the Securities Act of 1933 ( 15 U.S.C. 77a et. seq.) or pursuant to Section 307(b) of the Trust Indenture Act of 1939 (15 U.S.C. 77aaa et. seq.) should be designated as "restricted," except that filing fees paid with respect to registration statements filed in accordance with Form SB-1, SB-2 and SB-3 (§§ 239.9, 239.10 and 239.11 of this chapter) or pursuant to §§ 230.462(b), 230.462(e) and 230.462(f) of this chapter should be designated as "unrestricted." * * * * * * * * PART 210 - FORM AND CONTENT OF AND REQUIREMENTS FOR FINANCIAL STATEMENTS, SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934, PUBLIC UTILITY HOLDING COMPANY ACT OF 1935, INVESTMENT COMPANY ACT OF 1940, AND ENERGY POLICY AND CONSERVATION ACT OF 1975 5. The authority citation for Part 210 continues to read as follows: Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77aa(25), 77aa(26), 78j-1, 78l, 78m, 78n, 78o(d), 78u-5, 78w(a), 78ll(d), 79e(b), 79j(a), 79n, 79t(a), 80a-8, 80a-20, 80a-29, 80a- 30, 80a-37(a), unless otherwise noted. 6. By amending the Note following paragraph (a)(1) of § 210.3-14 by removing the words "Item 15 of Form S-11" and adding, in their place the words "Item 1107(b) of Regulation S-K (§ 229.1107(b) of this chapter)". PART 228 -INTEGRATED DISCLOSURE SYSTEM FOR SMALL BUSINESS ISSUERS 7. The authority citation for Part 228 continues to read as follows: Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77jjj, 77nnn, 77sss, 78l, 78m, 78n, 78o, 78u-5, 78w, 78ll, 80a-8, 80a- 29, 80a-30, 80a-37, 80b-11, unless otherwise noted. 8. By amending § 228.10 by removing paragraph (b)(4); and revising paragraph (a) to read as follows: § 228.10 (Item 10) General. (a) Application of Regulation S-B. Regulation S-B is the source of disclosure requirements for "small business issuer" filings under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act"). (1) Definition of small business issuer. A small business issuer is defined as a company that meets all of the following criteria: (i) Has revenues (including revenues of any consolidated subsidiaries) of less than $50,000,000; (ii) Is a U.S. or Canadian issuer; (iii) Is not an investment company; (iv) If a majority-owned subsidiary, the parent corporation is also a small business issuer; and (v) Each majority-owned subsidiary of the company, if any, meets the criteria of paragraphs (a)(1)(ii) and (a)(1)(iii) of this section. (2) Entering and exiting the small business disclosure system. (i) A company that meets the definition of small business issuer may use Form SB-1, SB-2 or SB-3 (§§ 239.9, 239.10 and 239.11 of this chapter), whichever is appropriate, for registration of its securities under the Securities Act; Form 10- SB (§ 249.210b of this chapter) for registration of its securities under the Exchange Act; and Forms 10-KSB and 10-QSB (§§ 249.310b and 249.308b of this chapter) for its annual and quarterly reports. (ii) For a non-reporting company entering the disclosure system for the first time either by filing a registration statement under the Securities Act or a registration statement under the Exchange Act, the determination as to whether the company is a small business issuer is made with reference to its revenues during its last fiscal year. (iii) Once a small business issuer becomes a reporting company, it will remain a small business issuer until it exceeds the revenue limit at the end of two consecutive years (or until it fails to meet one of the other criteria in the small business issuer definition). (iv) A reporting company that is not a small business issuer must meet the definition of a small business issuer at the end of two consecutive fiscal years before it will be considered a small business issuer. (v) The determination as to the reporting category (small business issuer or other issuer) made for a non-reporting company at the time it enters the disclosure system governs all Exchange Act reports relating to the remainder of that fiscal year. The determination made for a reporting company at the end of its fiscal year governs all Exchange Act reports relating to the next fiscal year. An issuer may not change from one category to another with respect to reports under the Exchange Act for a single fiscal year. A small business issuer may, however, choose not to use Form SB-1 or SB-2 (§ 239.9 or § 239.10 of this chapter) for registration under the Securities Act. (vi) Notwithstanding paragraph (a)(2)(v) of this section, a company that is a reporting company as of _______________ [insert date of effectiveness of this amendment] may determine at any time between _________ [insert date of effectiveness of this amendment] and _________ [insert date one year after effectiveness of this amendment] to begin reporting under the Exchange Act on the forms available only to small business issuers if it satisfies the small business issuer definition through having revenues of less than $50 million in each of its last two fiscal years and satisfying the other criteria in paragraph (a)(1) of this section. * * * * * 9. By amending § 228.304 by revising the introductory text of paragraph (a)(1), paragraphs (a)(1)(i), (a)(1)(iii), (a)(1)(iv)(A), (a)(1)(iv)(B), (a)(1)(iv)(B)(2), (a)(1)(iv)(B)(3), (a)(1)(iv)(D) and (a)(1)(iv)(E); and by adding a sentence at the end of paragraph (a)(3) to read as follows: § 228.304 (Item 304) Changes in and disagreements with accountants on accounting and financial disclosure. (a)(1) The disclosure described below is required if the small business issuer, during its two most recent fiscal years or any subsequent interim period, dismissed its principal independent accountant or a significant subsidiary dismissed its independent accountant on whom the small business issuer's principal accountant expressed reliance in its report. The disclosure also is required if, during that time, any of those accountants: resigned; declined to stand for re-election after the current audit; notified the registrant or a significant subsidiary that reliance on the accountant's prior audit report is no longer permissible; or notified the registrant or a significant subsidiary that it will not consent to the use of the accountant's prior audit report in a filing with the Commission. State: (i) Which of the actions described in paragraph (a)(1) of this section occurred and when; * * * * * (iii) If a change in accountants resulted, whether the decision to change accountants was recommended or approved by the board of directors or a committee thereof; and (iv)(A) Whether, during the small business issuer's two fiscal years and any subsequent interim period immediately preceding the date of the action described in paragraph (a)(1) of this section, there were disagreements with the accountant, whether or not resolved to the accountant's satisfaction, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure; (B) The following information, if applicable. Indicate whether the accountant advised the small business issuer that: * * * * * (2) Information has come to the attention of the accountant that made the accountant unwilling to rely on management's representations, or unwilling to be associated with the financial statements prepared by management; or (3) The scope of its audit should be expanded significantly, or that information has come to the accountant's attention that the accountant has concluded will, or if further investigated might, materially impact the fairness or reliability of a previously issued audit report or the underlying financial statements, or the financial statements issued or to be issued covering the fiscal period(s) subsequent to the date of the most recent audited financial statements (including information that might preclude the issuance of an unqualified audit report); and * * * * * (D) Whether the board of directors or any committee thereof discussed the subject matter of each such disagreement with the accountant; * * * * * (E) If a change in accountants resulted, whether the small business issuer has authorized the former accountant to respond fully to the inquiries of the successor accountant concerning the subject matter of each such disagreement. If not, describe the nature of any limitation on responses and the reason for that limitation. * * * * * (a) * * * (3) If the former accountant declines to furnish the registrant with a letter addressed to the Commission stating whether the accountant agrees with the statements made by the registrant in response to this Item 304(a), so state. * * * * * 10. By amending § 228.512 by removing the words "Form S-3 or S-8 (§§ 239.13 or 239.16b of this chapter)" from the Note to paragraph (a)(1) and adding in their place the words "Form B or S-8 (§§ 239.5 or 239.16b of this chapter)"; and by adding paragraphs (g), (h) and (i) to read as follows: § 228.512 (Item 512) Undertakings. * * * * * (g) Registration on Form SB-3 of securities offered for resale. Include the following if the securities are being registered on Form SB-3 (§ 239.11 of this chapter) in connection with a transaction specified in paragraph (a) of § 230.145 of this chapter: (1) Before a public reoffering of securities registered on this Form by any person who is considered an underwriter within the meaning of § 230.145(c) of this chapter through use of a prospectus that is a part of this registration statement, [Name of registrant] will ensure that the reoffering prospectus contains all the information called for by the Form concerning the reoffering by the underwriter(s) (in addition to the information required by other items of the Form). (2) [Name of registrant] will file as part of an amendment to the registration statement any prospectus that is filed under paragraph (g)(1) of this Item or purports to meet the requirements of Section 10(a)(3) of the Securities Act (15 U.S.C. 77j(a)(3)) and is used in connection with an offering of securities subject to § 230.415 of this chapter. We will not use such prospectus until the amendment containing the prospectus is effective. For purposes of determining any liability under the Securities Act of 1933 (15 U.S.C. 77a et. seq.), we acknowledge that each amendment will be considered a new registration statement relating to the securities being offered, and the offering of those securities at that time will be considered the initial bona fide offering of those securities. (h) Delayed payment of registration fee. A small business issuer relying on § 230.456 of this chapter to delay paying the registration fee, must include the following undertaking: [Name of registrant] will pay the required registration fee no later than the earlier of: (1) the date on which we request that the Commission grant effectiveness of this registration statement under Section 8(a) of the Act (15 U.S.C. 77h(a)); or (2) the date on which we file an amendment to the registration statement that contains the statement set forth in § 230.473(b). (i) Registration on Form SB-1, SB-2 or SB-3. If the securities are being registered on Form SB-1 (§ 239.9 of this chapter), Form SB-2 (§ 239.10 of this chapter) or on Form SB-3 (§ 239.11 of this chapter) include the following: The registrant will file with the Commission, on or before the date of first use, all free writing materials used in connection with the securities registered on this registration statement after effectiveness and before the offering is completed. 11. By amending § 228.601 by removing from paragraph (b)(1) the words "Form S-3 (§ 239.13)" and adding, in their place, the words "Form B (§ 239.5)"; by removing from paragraph (b)(10)(ii)(B)(5) the words ", or registering debt or non-voting preferred stock on Form S-2 (§ 239.12)"; by removing from Note 2 to paragraph (c)(1)(ii) the words "Form S-3 (§ 239.13 of this chapter)" and adding, in their place, the words "Form B (§ 239.5 of this chapter)"; by removing from Note 1 to paragraph (c)(1) the words "Form S-2 (§ 239.12 of this chapter), Form S-3 (§ 239.13 of this chapter)" and adding, in their place, the words "Items 11 and 12 of Form SB-2 (§ 239.10 of this chapter), Form B (§ 239.5 of this chapter)"; by removing from the introductory text of paragraph (c)(3) the words "Form S-1 (§ 239.11 of this chapter)" and adding, in their place, the words "Form A (§ 239.4 of this chapter)"; and by revising the exhibit table to read as follows: - 308 - Securities Exchange Act Act forms forms B SB-2 SB-3 S-8 10-SB 8-K 10- 10- QSB KSB (1) Underwriting X X X X agreement (2) Plan of acquisition, reorganization, arrangement, liquidation X X X X X X X or succession (3) (i) Articles of X X X X X Incorporation (ii) By-Laws X X X X X (4) Instruments defining the rights of security holders, including indentures X X X X X X X X (5) Opinion re X X X X legality (6) No exhibit N/A N/A N/A N/A N/A N/A N/A N/A required. (7) [Removed and reserved] (8) Opinion re X X X tax matters (9) Voting trust X X X X agreement (10) Material X X X X X contracts (11) Statement re computation of per share X X X X X earnings (12) No exhibit N/A N/A N/A N/A N/A N/A N/A N/A required (13) Annual or quarterly reports, X X X Form 10-Q[1] (14) [Removed and reserved] (15) Letter re unaudited interim financial information X X X X X (16) Letter re change in certifying X X X X X accountant[3] (17) Letter re director resignation X (18) Letter re change in accounting X X principles (19) Report furnished to security X holders (20) Other documents or statements to security holders X (21) Subsidiaries of the registrant X X X X (22) Published report regarding matters submitted to vote of security X X holders (23) Consents of experts and counsel X X X X X[2] X[2] X[2] (24) Power of X X X X X X X X attorney (25) Statement of eligibility of trustee X X X (26) Invitation for competitive bids X X X (27) Financial Data Schedule[4] X X X X X X X (28) [Removed and reserved] (29) Underwriter Concurrence with X Effective Date [Reserved (30) through (98)] (99) Additional X X X X X X X X Exhibits 1 Only if incorporated by reference into a prospectus and delivered to holders along with the prospectus as permitted by the registration statement; or in the case of a Form 10-KSB, where the annual report is incorporated by reference in to the text of of the Form 10-KSB. 2 Where the opinion of the expert or counsel has been incorporated by reference into a previously filed Securities Act registration statement. 3 If required under Item 304 of Regulation S-K. 4 Financial Data Schedules must be filed by electronic filers only. Such Schedule must be filed only when a filing includes annual and/or interim financial statements that have not been previously included in a filing with the Commission. See Item 601(c) of Regulation S-B. - 310 - PART 229 - STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND CONSERVATION ACT OF 1975 - REGULATION S-K 12. The authority citation for Part 229 continues to read in part as follows: Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 77nnn, 77sss, 78c, 78i, 78j, 78l, 78m, 78n, 78o, 78u-5, 78w, 78ll(d), 79e, 79n, 79t, 80a-8, 80a-29, 80a-30, 80a-37, 80b-11, unless otherwise noted. * * * * * 13. By amending § 229.10 by removing in paragraph (c)(1)(iii) the words "Form S-3 (§ 239.13 of this chapter)" and adding, in their place, the words "Form B (§ 239.5 of this chapter)". 14. By amending § 229.101 by removing in paragraph (a)(2)(i) the words "Form S-1 (§239.11 of this chapter)" and adding, in their place, the words "Form A (§239.4 of this chapter)", and by removing in paragraph (a)(2)(iii)(B)(1) the words "Form S-1" and adding, in their place, the words "Form A". 15. By amending § 229.102 by removing the words "Office of Engineering" in Instruction 4. to Instructions to Item 102 and adding, in their place, "Office of Natural Resources". 16. By amending § 229.201 by removing in paragraph (a)(2) the words "Form S-1 (§239.11 of this chapter)" and adding, in their place, the words "Form A (§239.4 of this chapter)". 17. By amending § 229.304 by revising the introductory text of paragraph (a)(1), paragraph (a)(1)(i), the introductory text of paragraph (a)(1)(iii), paragraph (a)(1)(iv), the first sentence of the introductory text of paragraph (a)(1)(v), paragraph (a)(1)(v)(C)(2), paragraph (a)(1)(v)(D)(2); and by adding a sentence at the end of paragraph (a)(3) to read as follows: § 229.304 (Item 304) Changes in and disagreements with accountants on accounting and financial disclosure. (a)(1) The disclosure described below is required if the registrant, during its two most recent fiscal years or any subsequent interim period, dismissed its principal independent accountant or a significant subsidiary dismissed its independent accountant on whom the registrant's principal accountant expressed reliance in its report. The disclosure also is required if, during that time, any of those accountants: resigned; declined to stand for re-election after the current audit; notified the registrant or a significant subsidiary that reliance on the accountant's prior audit report is no longer permissible; or notified the registrant or a significant subsidiary that it will not consent to the use of the accountant's prior audit report in a filing with the Commission. (i) State which of the actions described in paragraph (a)(1) of this section occurred and when; * * * * * (iii) If a change in accountants resulted, state whether the decision to change accountants was recommended or approved by: * * * * * (iv) State whether, during the registrant's two fiscal years and any subsequent interim period immediately preceding the date of the action described in paragraph (a)(1) of this section, there were disagreements with the accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure. In addition: (A) Describe each such disagreement; (B) State whether the board of directors or any committee thereof discussed the subject matter of each such disagreement with the accountant; and (C) If a change in accountants resulted, state whether the registrant has authorized the former accountant to respond fully to the inquiries of the successor accountant concerning the subject matter of each such disagreement. If not, describe the nature of any limitation on responses and the reason for that limitation. Instructions to Item (a)(1)(iv). 1. The registrant need only disclose information in response to this Item if the disagreement(s), if not resolved to the satisfaction of the accountant, would have caused it to make reference to the subject matter of the disagreement(s) in connection with its report. 2. The disagreements required to be reported in response to this Item include both those resolved to the accountant's satisfaction and those not resolved to the accountant's satisfaction. 3. Disagreements contemplated by this Item are those that occur at the decision-making level, i.e., between personnel of the registrant responsible for the presentation of its financial statements and personnel of the accounting firm responsible for rendering its report. (v) If, during the registrant's two fiscal years and any subsequent interim period immediately preceding the date of the action described in paragraph (a)(1) of this Item, any of the events listed in paragraphs (a)(1)(v)(A) through (a)(1)(v)(D) of this Item occurred, provide the information required by paragraph (a)(1)(iv) of this Item for each event (even if the registrant and the accountant did not express a difference of opinion regarding the event). * * * * * * * * (C) * * * (2) Due to the action described in paragraph (a)(1) of this Item, or for any other reason, the accountant did not so expand the scope of its audit or conduct such further investigation; or (D) * * * (2) Due to the action described in paragraph (a)(1) of this Item, or for any other reason, the issue has not been resolved to the accountant's satisfaction prior to such action. * * * * * (3) * * * If the former accountant declines to furnish the registrant with a letter addressed to the Commission stating whether the accountant agrees with the statements made by the registrant in response to this Item 304(a), so state. * * * * * 18. By amending § 229.305 by revising Instruction 2.D. to General Instructions to Paragraphs 305(a), 305(b), 305(c), 305(d), and 305(e), to read as follows: § 229.305 Quantitative and Qualitative Disclosures About Market Risk * * * * * General Instructions to Paragraphs 305(a), 305(b), 305(c), 305(d), and 305(e): 2. * * * D. For purposes of Instruction 1. of the General Instructions to Paragraphs 305(a), 305(b), 305(c), 305(d), and 305(e), market capitalization is the aggregate market value of common equity. The term "common equity" is as defined in Securities Act Rule 405 (§230.405 of this chapter). The aggregate market value of the registrant's outstanding voting and non-voting common equity shall include the common equity held by affiliates and shall be computed by use of the price at which the common equity was last sold, or the average of the bid and asked prices of such common equity, in the principal market for such common equity as of January 28, 1997. 19. By amending § 229.404 by removing in the introductory text of paragraph (d) the words "Form S-1 under the Securities Act (§239.11 of this chapter)" and adding, in their place, the words "Form A under the Securities Act (§239.4 of this chapter)". 20. By amending § 229.501 by revising the section heading to read as follows: § 229.501 (Item 501)Front cover page of the registration statement and outside front cover page of the prospectus. * * * * * 21. By amending § 229.512 by removing in paragraph (a)(1)(iii) the words "on Form S-3 (§ 239.13 of this chapter)" and adding in their place the words "on Form B (§ 239.5 of this chapter)"; in paragraph (a)(4), by removing in the third sentence the words "on Form F-3 (§ 239.33 of this chapter)" and adding, in their place, the words "on Form B (§ 239.5 of this chapter)", and removing the words "in the Form F-3." and adding in their place "in the Form B."; by revising paragraph (b) and the introductory text of paragraph (g); and by adding paragraph (k) to read as follows: § 229.512 (Item 512) Undertakings. * * * * * (b) Filings incorporating by reference subsequent Exchange Act documents. Include the following if the registration statement incorporates by reference any Exchange Act document filed subsequent to the initial effective date of the registration statement: The undersigned registrant hereby undertakes that, for determining liability under the Securities Act of 1933, each of the registrant's reports pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. * * * * * (g) Registration on Form C or Form SB-3 of securities offered for resale. Include the following if the registrant is registering an offering on Form C or Form SB-3 (§§ 239.6 or 239.11 of this chapter) in connection with a transaction specified in paragraph (a) of Rule 145 (§ 230.145 of this chapter). * * * * * (k) Registration on Form A, Form B or Form C. If the securities are being registered on Form A (§ 239.4 of this chapter), Form B (§ 239.5 of this chapter) or on Form C (§ 239.6 of this chapter) include the following: The registrant will file with the Commission, on or before the date of first use, all free writing materials used in connection with the securities registered on this registration statement after effectiveness and before the offering is completed. 22. By amending § 229.601 by removing from paragraph (b)(10)(iii)(B)(6) the words "or registering debt instruments or preferred stock which are not voting securities on Form S-2"; and by removing from Note 1 to Paragraph (c)(1) the words "Form S-2 (§ 239.12 of this chapter), Form S-3 (239.13 of this chapter)" and adding, in their place, the words "Form B (239.13 of this chapter), General Instruction VIII of Form A (§ 239.4 of this chapter)"; by revising the Exhibit Table, paragraph (b)(4)(ii) and paragraph (b)(8); and by adding paragraph (b)(28) to read as follows: § 229.601 (Item 601)Exhibits. * * * * * (b) * * * (4) Instruments defining the rights of security holders, including indentures (i) * * * (ii) Except as set forth in paragraph (b)(4)(iii) of this Item, for filings on Forms A and C under the Securities Act (§§ 239.4 and 239.6 of this chapter) and Forms 10 and 10-K (§§ 249.210 and 249.310 of this chapter) under the Exchange Act all instruments defining the rights of holders of long-term debt of the registrant and its consolidated subsidiaries and for any of its unconsolidated subsidiaries for which financial statements are required to be filed. * * * * * (8) Opinion re tax matters. (i) Real estate entity registrants and roll-up transactions. The registrant must file an opinion of counsel, an opinion of an independent public or certified public accountant or a revenue ruling from the Internal Revenue Service supporting the tax matters and consequences to the investors it describes in its filing in the following circumstances: (A) The registrant is required to provide the information required by Item 1108 of Regulation S-K (Tax treatment) in its registration statement on Form A (§ 239.4 of this chapter); (B) Securities Act Industry Guide 5 applies to the offering; or (C) The transaction being registered is a roll-up as defined in Item 901 of Regulation S-K. (ii) All other registrants. All other registrants must include this exhibit only when the tax consequences are material to an investor and the registrant includes a discussion of tax consequences in the filing. If a tax opinion is set forth in full in the filing, the exhibit may so state instead of repeating the full opinion. Any conditions or qualifications on the opinion must be adequately described in the filing. * * * * * (28) Underwriter concurrence with effective date. A registrant filing a registration statement listed in § 230.462(f)(1) of this chapter must file the written concurrence with the effective date, signed and dated by the managing underwriter(s), or if there are no managing underwriter(s), of the principal underwriter(s) of its offering. If the filed concurrence is not manually signed, a registrant must retain the manually signed underwriters' concurrence for a period of five years. Upon request, the registrant must provide a copy of that concurrence to the Commission or its staff. * * * * * - 311 - Securities Act forms A B C[3] S-8 (1) Underwriting X X .. agreement (2) Plan of acquisition, reorganization, arrangement, liquidation X X .. or succession (3) (i) Articles of X X .. Incorporation (ii) By-Laws X X .. (4) Instruments defining the rights of security holders, including indentures X X X X (5) Opinion re X X X X legality (6) [Removed and reserved] (7) [Removed and reserved] (8) Opinion re X X X .. tax matters (9) Voting trust X X .. agreement (10) Materials X X .. contracts (11) Statement re computation of per share X X .. earnings (12) Statements re computation X X .. of ratios (13) Annual report to security holders, Form 10-Q or quarterly report to security X X .. holders [1] (14) [Removed and reserved] (15) Letter re unaudited interim financial information X X X (16) Letter re change in certifying X[4] X[4] .. accountant (17) Letter re director resignation .. .. .. .. (18) Letter re change in accounting .. .. .. .. principles (19) Report furnished to security .. .. .. .. holders (20) Other documents or statements to security holders .. .. .. .. (21) Subsidiaries of the registrant X X .. (22) Published report regarding matters submitted to vote of security .. .. holders (23) Consents of experts and counsel[2] X X X X (24) Power of X X X attorney (25) Statement of eligibility of trustee X X X .. (26) Invitation for competitive bids X X .. (27) Financial Data Schedule[5] X X .. (28) [Removed and reserved] (29) Underwriter Concurrence with X X Effective Date [Reserved (30) through (98)] (99) Additional X X Exhibits 1 Where incorporated by reference into the text of the prospectus and delivered to security holders along with the prospectus as permitted by the registration statement; or, in the case of the Form 10-K, where the annual report to security holders is incorporated by reference into the text of the Form 10-K. 2 Where the opinion of the expert or counsel has been incorporated by reference into a previously filed Securities Act registration statement 3 An exhibit need not be provided about a company if (a) the company meets the requirements of General Instruction I.A., I.B., I.C.1 of Form B; and (b) The Exhibit would not have been required to be filed if the Company was registering a primary offering on Form B. 4 If required pursuant ot Item 304 of Regulation S-K. 5 Financial Data Schedules shall be filed by electronic filers only. Such schedule shall be filed only when a filing includes annual and/or interim financial statements that have not been previously included in a filing with the Commission. See Item 601 of Regulation S-K. - 313 - 23. By amending Securities Act Industry Guide 5 (referenced in § 229.801(e)) by removing from paragraph 16 the words "Form S-1 or S-11" and adding, in their place, the words "Form A (§ 239.4 of this chapter)" and by revising paragraph 19.D. to read as follows: Note: The text of Securities Act Industry Guide 5 does not and this amendment will not appear in the Code of Federal Regulations. * * * * * Guide 5 * * * * * 19. Summary of promotional and sales material * * * * * D.(1) The registrant or any offering participant must, before its use, provide the Commission staff supplementally any written sales material that it intends to furnish investors. This includes all materials described in paragraph B. The registrant or the offering participant need not, however, supplementally provide the staff with sales material if: (i) the offering is registered on Form A and the registrant meets the requirements of General Instruction VIII. of that Form; (ii) the offering is registered on Form B; (iii) the staff has notified the registrant that its registration statement will not be reviewed; or (iv) the sales material is used only internally. (2) For purposes of this paragraph, sales material includes all marketing memoranda that are sent by the General Partner or its affiliates to broker/dealers or other sales personnel and may include material labeled "for broker/dealers use only." Staff comments, if any, will be promptly communicated to the registrant. The registrant should contact the staff before using any sales material that has been submitted to the staff. Note to paragraph 19.D.: You should read Securities Act Rule 425. Sales materials may be required to be filed under that Rule. 24. By amending Part 229 to add Subpart 229.1100 to read as follows: Subpart 229.1100 - Real Estate Interests 229.1101 (Item 1101) Definitions. 229.1102 (Item 1102) Limitations on transfer. 229.1103 (Item 1103) Summary risk factor information. 229.1104 (Item 1104) Organization. 229.1105 (Item 1105) Operating and financing activities. 229.1106 (Item 1106) Real estate and other investment activities. 229.1107 (Item 1107) Description of real estate and operating data. 229.1108 (Item 1108) Tax treatment of you and your investors. 229.1109 (Item 1109) Certain relationships and related transactions. 229.1110 (Item 1110) Selection, management and custody of investments. 229.1111 (Item 1111) Conflict of interest policies. 229.1112 (Item 1112) Limitations of liability. 229.1113 (Item 1113) Sales to special parties. * * * * * Subpart 229.1100 - Real Estate Interests § 229.1101 (Item 1101)Definitions For purposes of this subpart 229.1100 of Regulation S-K: (a) You are a real estate entity if you: (1) Are a real estate investment trust under Section 856 of the Internal Revenue Code (26 U.S.C. 856(a)); or (2) Invest in real estate, interests in real estate, or securities of other real estate investors as your primary business. Instruction to Item 1101(a) "Real estate entity" does not include any issuer that is an investment company registered or required to register under the Investment Company Act of 1940. (b) Affiliated person means: (1) Your directors and officers; (2) Any person directly or indirectly controlling or under direct or indirect common control with you; (3) Any record owner who owns, or anyone you know who beneficially owns, 10 percent or more of any class of your equity securities; (4) Any promoter directly or indirectly connected with you in any capacity; (5) Principal underwriters of securities being registered; (6) People performing management or advisory services; and (7) Any associate of any of these people. § 229.1102 (Item 1102) Limitations on transfer. Disclose on the cover page of the prospectus any limitations on the transfer of the securities you are offering. If no market exists for the securities, so state on the cover page. If a market does exist, disclose in the prospectus the nature of the market and the market price as of the latest practicable date before the filing of the registration statement or an amendment to the registration statement. § 229.1103 (Item 1103) Summary risk factor information. In a series of concise bullets or paragraphs, present a summary of the risk factors of the offering. Address the following, if appropriate: (a) A comparison of the percentage of securities being offered to the public and those issued or to be issued to affiliated person; (b) The extent to which security holders can be liable for your acts or obligations; (c) The allocation of cash distributions between investors who are affiliated persons and those investors who are not affiliated persons; and (d) The compensation and benefits affiliated persons will receive, directly or indirectly. With respect to underwriters, include a comparison of the aggregate compensation and benefits to be received by them with the aggregate net proceeds from the sale of the securities being registered. § 229.1104 (Item 1104) Organization. (a) Provide the following information: (1) Your name and form of organization; (2) The State or other jurisdiction whose laws govern your organization; (3) The date your governing instruments became operative; and (4) The date on which your governing instruments will expire, if any and, if you may be finite life as defined in Item 901 of Regulation S-K, your planned time period for holding your assets. (b) Outline any provisions of your governing instruments that provide that your duration or planned investment holding period may be shortened or extended. (c) Summarize the provisions of your governing instruments, or any policy or proposed policy, relating to the holding of annual or other meetings of investors. (d) If you were organized within the last five years, name all promoters. Indicate whether each promoter holds any position or intends to hold any position with you. § 229.1105 (Item 1105) Operating and financing activities. For each of the following activities, describe your and your subsidiaries' policy or proposed policy, indicate if you may change each policy without a vote of investors, and indicate the extent to which you have engaged in each activity. (a) Issue securities senior to the securities you are offering; (b) Borrow money; (c) Make loans. Purchasing a portion of publicly distributed bonds, debentures or other securities, in the original distribution, or otherwise, is not making a loan; (d) Invest in another issuer's securities in order to exercise control; (e) Underwrite other issuer's securities; (f) Purchase, sell or trade investments; (g) Offer securities in exchange for property; (h) Repurchase or otherwise reacquire your securities; and (i) Provide annual or other reports to investors. Indicate what the reports will cover and whether they will include audited financial statements. Instruction to Item 1105. Include a separate description of your policy for each activity. If you will not engage in a particular activity, specifically state that you will not. § 229.1106 (Item 1106) Real estate and other investment activities. (a) Describe the types of real estate investments you intend to make and indicate whether you can change this plan without a vote of investors. (b) Describe the principles and procedures you and your subsidiaries will use in investing in the assets. (c) Disclose the percentage of your and your subsidiaries' assets you may invest in any one type of investment. (d) You should include the information below if you or your subsidiaries might invest in the following types of assets: (1) Investments in real estate or real estate interests. (i) Identify the geographic areas where you intend to invest; (ii) Describe the types of real estate in which you may invest, such as office buildings, apartment buildings, shopping centers, industrial and commercial properties, special purpose buildings or undeveloped land; (iii) Describe how you intend to operate and finance your real estate. Disclose any limit on the number or amount of mortgages you may place on any one piece of property; (iv) Specifically state whether your policy is to acquire assets primarily for income or capital gain; and (v) Disclose your policy as to the amount or percentages of your assets you may invest in any one property; (2) Investments in real estate mortgages and mortgage-backed securities. (i) Describe the types of mortgages you may invest in, such as first or second mortgages. Disclose whether the mortgages are guaranteed, and if so, by whom; (ii) Describe your policy as to the amount or percentage of assets you may invest in any single mortgage; (iii) Describe each type of mortgage activity in which you intend to engage, such as originating or servicing mortgages; (iv) Describe how long you anticipate holding these investments; (v) Indicate the types of properties subject to mortgages in which you intend to invest, such as, single family homes, apartment buildings, office buildings, bowling alleys, commercial properties or undeveloped land; and (vi) Identify the geographic areas where the property underlying the mortgages is located. (3) Securities of or interests in other real estate investors. (i) Describe the types of securities or other interests in persons engaged in real estate activities in which you may invest, such as common stock, limited partnership interests, interests in real estate investment trusts, mortgage-backed securities and joint venture interests; (ii) Disclose your policy as to the amount or percentage of your assets you may invest in each type of security or interest and the amount or percentage of your assets you may invest in any one issuer; (iii) Describe the investment policies and primary activities of persons in which you will invest, such as mortgage sales, investment in office buildings or investment in undeveloped land; and (iv) State your criteria for the purchase of these securities or interests, such as securities listed on a national securities exchange, minimum net income requirements, period of operation of issuer or rating of security. (e) Indicate the type of other securities (e.g., bonds, preferred stocks, common stocks) and the industry groups in which you may invest and the percentage of your assets which you may invest in each type or industry group. Describe how you will acquire these assets. § 229.1107 (Item 1107) Description of real estate and operating data. Provide the following information separately for each material real estate interest. For all other real estate interests, provide the following information by classes or groups of properties that reasonably convey the required disclosure: (a) For real estate interests in which you or your subsidiaries now invest or intend to invest: (1) State the location and describe the general character; (2) Identify the present and proposed use and discuss whether the real estate interests are suitable and adequate for the present or proposed use; (3) Describe your title to or interest in the real estate; (4) For each material mortgage, lien or other encumbrance: (i) Disclose the principal amount; (ii) Describe the interest and amortization provisions; (iii) Describe the prepayment provisions; (iv) Discuss any cross collateralization or cross default provisions; (v) Identify the maturity date; and (vi) Quantify the balance due at maturity assuming no prepayment of principal; (5) Disclose principal lease terms; (6) Outline the terms of any option or contract to purchase or sell the real estate interests; (7) Briefly discuss proposed renovation, development or improvement programs. Quantify the cost of these programs. If you do not have any plans, state that you have no plan and indicate why you are investing or will invest in the real estate; (8) Describe the general competitive conditions in the markets in which the real estate interests or the underlying properties are operated; and (9) State whether management believes that the real estate interest or the underlying properties are adequately covered by insurance. (b) For each improved material real estate interest in which you or your subsidiaries now invest or intend to invest: (1) Occupancy rate, as a percentage of rentable square footage or units, for each of the past five years; (2) Average annual effective rent paid per square foot or per unit for each of the past five years; - 314 - (3) The following schedule of lease expirations in each of the next ten years: (A) (B) (C) (D) Total Area Annual Percentage Number of Covered Rental of gross Tenants By of annual Year with Expiring Expiring rental Leases Leases Leases for expiring Expiring (sq. feet) ($) leases _________ ________ __________ ________ ___________ Year in which filing is made Second Year * * * Tenth Year (4) The number of tenants that occupy ten percent or more of the rentable square footage, the main business of those tenants and the principal provisions of their lease including, but not limited to, annual rent, the expiration date and any renewal option; (5) The principal businesses, occupations or professions conducted at the property underlying the real estate interest; (6) The Federal tax basis, rate, depreciation method and life claimed for each real estate interest or component for which you charge depreciation; and (7) The realty tax rate, annual realty taxes and estimated taxes on any proposed improvement. Instructions to Item 1107. 1. You need not provide detailed legal and physical descriptions of your real estate interest. Rather, you should disclose all information necessary for an investor to evaluate and understand your real estate interests. We encourage tabular presentation. 2. A material real estate interest is one that: (a) Has a book value representing ten percent or more of your total assets, including assets of your consolidated subsidiaries; or (b) Produced gross revenue in the last fiscal year that was ten percent or more of your total revenues for the last fiscal year, including revenues of your consolidated subsidiaries. § 229.1108 (Item 1108) Tax treatment of you and your investors. Describe material Federal income tax consequences for you, your subsidiaries and your investors including a discussion of: (a) Your and your subsidiaries' treatment under Federal income tax laws; (b) The treatment of distributions to investors under Federal income tax laws, including gains from the sale of securities or real estate interests in excess of annual net income; and (c) The tax treatment of any exchange of securities for real estate interests or other securities. § 229.1109 (Item 1109) Certain relationships and related transactions. Disclose the aggregate depreciation claimed by the seller for Federal income tax purposes if: (a) You provide any information required by Instruction 5 to Item 404(a) of Regulation S-K; and (b) The assets had been acquired by the seller within five years prior to the Item 404 of Regulation S-K transaction. § 229.1110 (Item 1110) Selection, management and custody of investments. (a) Describe any arrangements you or your subsidiaries have made or propose to make with respect to the following. If any of the persons performing these services is a corporation or other organization, include the name and principal occupations during the last five years of each principal executive officer of such corporation or other organization: (1) Management of your real estate interests, including arranging for purchases, sales, leases, maintenance and insurance; (2) The purchase, sale and servicing of your mortgages; and (3) Investment advisory services. (b) If any of these services in paragraph (a) of this Item will be performed by any affiliated person, other than an officer or director performing the services in that capacity with no additional compensation, furnish the following information about each person: (1) Name and address; (2) Nature of principal business; (3) Principal occupations during the last five years; (4) Nature of all existing direct or indirect material interests in or business connections with you or any of your affiliated person; (5) Nature of all services rendered to you; and (6) Compensation received from you and your subsidiaries, directly or indirectly, during your last fiscal year and the capacities in which this remuneration was received. § 229.1111 (Item 1111) Conflict of interest policies. Outline your policies and provisions of your governing instruments which limit any person from any of the following: (a) Having any financial interest in any investment you or any of your subsidiaries will acquire or dispose of or in any transaction to which you or any of your subsidiaries are a party or have an interest; and (b) Engaging for their own account in business activities of the types you and your subsidiaries conduct or will conduct. § 229.1112 (Item 1112) Limitations of liability. Outline the principal provisions of your governing instruments or of any contract or arrangement to which you or a subsidiary are a party that limit the liability of affiliated person or any of their directors, officers or employees. Indicate the effect of Section 14 of the Act (15 U.S.C. 77n) upon any provision broad enough to cover liability arising under the Act. § 229.1113 (Item 1113) Sales to special parties. Name each person or specify each class of persons (other than underwriters or dealers, acting in that capacity) to whom you or your subsidiaries have sold securities within the past six months or are going to sell securities at a different price than you are offering the same class of securities pursuant to this registration statement. Also provide this information with respect to any selling security holder registering securities pursuant to this registration statement. State the consideration given or to be given by each of these persons or class. PART 230 - GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933 25. By revising the general authority citation for Part 230 to read in part as follows: AUTHORITY: 15 U.S.C. 77b, 77c, 77d, 77f, 77g, 77h, 77j,, 77r, 77s, 77sss, 77z-3, 78c, 78d, 78l, 78m, 78n, 78o, 78t, 78w, 78ll(d), 78mm, 79t, 80a-8, 80a-24, 80a-28, 80a-29, 80a-30, and 80a-37, unless otherwise noted. * * * * * 26. By revising paragraph (d) of § 230.110 to read as follows: § 230.110 Business hours of the Commission. * * * * * (d) Filings by facsimile. Registration statements, post- effective amendments and prospectuses, filed pursuant to §§ 230.425(c), 230.462(a), (b), (e) or (f) may be filed by facsimile transmission with the Commission any day (except Saturdays, Sundays and federal holidays) from 5:30 p.m. to 10 p.m. Eastern Standard Time or Eastern Daylight Savings Time, whichever is currently in effect. 27. By revising the introductory text of paragraph (b) of § 230.111 to read as follows: § 230.111 Payment of fees. * * * * * (b) Notwithstanding paragraph (a) of this section, payment of filing fees for registration statements filed pursuant to §§ 230.462(b), (e), or (f) between the hours of 5:30 p.m. and 10 p.m. Eastern Standard Time or Eastern Daylight Savings Time, whichever is currently in effect may be made by: * * * * * 28. By amending § 230.134 by revising the section heading and the introductory text, the introductory text of paragraph (a) and paragraphs (a)(3), (a)(13), (a)(14)(i), (b)(1), and (e) to read as follows: § 230.134 Registered investment company communications not deemed a prospectus. The term prospectus as defined in Section 2(10) of the Act (15 U.S.C. 77b(10)) does not include a notice, circular, advertisement, letter, or other communication published or transmitted to any person after a registration statement has been filed by an investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 - 80(a)-64) ("fund") if the communication contains only the statements required or permitted by this section. (a) The communication may include any one or more of the following items of information, in any order: * * * * * (3)(i) The fund's classification and subclassification under the Investment Company Act of 1940, the type or category of fund and whether in the selection of investments emphasis is placed upon income or growth characteristics, and a general description of an investment company including its general attributes, methods of operation and services offered provided that such description is not inconsistent with the operation of the particular fund for which more specific information is being given, identification of the fund's investment adviser, any logo, corporate symbol or trademark of the fund or its investment adviser and any graphic design or device or an attention-getting headline, not involving performance figures, designed to direct the reader's attention to textual material included in the communication pursuant to other provisions of this section; and, with respect to a fund issuing redeemable securities: (A) A description of the fund's investment objectives and policies, services, and method of operation; (B) Identification of the fund's principal officers; (C) The year of incorporation or organization or period of existence of the fund, its investment adviser, or both; (D) The fund's aggregate net asset value as of the most recent practicable date; (E) The aggregate net asset value as of the most recent practicable date of all funds under the management of the fund's investment adviser; (F) Any pictorial illustration that is appropriate for inclusion in the fund's prospectus and not involving performance figures; (G) Descriptive material relating to economic conditions, or to retirement plans or other goals to which an investment in the fund could be directed, but not directly or indirectly relating to past performance or implying achievement of investment objectives; and (H) Written notice of the terms of an offer made solely to all registered holders of the securities, or of a particular class or series of securities, issued by the fund proportionate to their holdings, offering to sell additional shares to such holders of securities at prices reflecting a reduction in, or elimination of, the regular sales load charged: Provided that, if any printed material permitted by paragraphs (a)(3)(i)(A) through (H) of this section is included, or if any material permitted by paragraphs (a)(3)(i)(A) through (G) of this section is used in a radio or television advertisement, the communication shall also contain the following legend given emphasis no less than that used in the major portion of the advertisement: For more complete information about [Name of Fund] including charges and expenses [get] [obtain] [send for] a prospectus [from (Name and Address)] [by sending this coupon]. Read it carefully before you invest or [pay] [forward funds] [send money]. (ii) For purposes of paragraph (a)(3)(i)(B) of this section, principal officers means the president, secretary, treasurer, any vice-president in charge of a principal business function and any other person who performs similar policy making functions for the fund on a regular basis. (iii) In the case of two or more funds having the same investment adviser or principal underwriter, the same information described in paragraph (a)(3)(i) may be included as to each such fund in a joint communication on the same basis as it is permitted in communications dealing with individual funds under paragraph (a)(3)(i). * * * * * (13) Offers, descriptions and explanations of any products and services not constituting securities subject to registration under the Act, and descriptions of corporations. The offers, descriptions and explanations may not relate directly to the desirability of owning or purchasing a security issued by a fund and all direct references to a security issued by a fund may contain only the statements required or permitted to be included by the other provisions of this section and must be placed in a separate and enclosed area in the communication. (14)(i) With respect to any class of debt securities, any class of convertible debt securities or any class of preferred stock, the security rating or ratings assigned to the class of securities by any nationally recognized statistical rating organization and the name or names of the nationally recognized statistical rating organization(s) that assigned such rating(s). * * * * * (b) * * * (1) If the registration statement has not yet become effective, the following statement: A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This [communication] shall not constitute an offer to sell or the solicitation of an offer to buy. * * * * * (e) In the case of a fund that holds itself out as a “money market fund,„ a communication used under this section shall contain the disclosure required by § 230.482(a)(7). 29. By revising § 230.135 to read as follows: § 230.135 Notice of proposed offerings. (a) All Offerings. For purposes of Section 5 of the Act (15 U.S.C. 77e) only, an issuer or a selling security holder (and any person acting on behalf of either of them) that publishes through any medium a notice of a proposed offering will not be deemed to offer its securities for sale through that notice if: (1) Legend. The notice includes a statement to the effect that it does not constitute an offer of any securities for sale; and (2) Limited notice content. The notice otherwise includes no more than the following information: (i) The name of the issuer; (ii) The title, amount and basic terms of the securities offered; (iii) The amount of the offering, if any, to be made by selling security holders; (iv) The anticipated timing of the offering; (v) A brief statement of the manner and the purpose of the offering; (vi) Whether the issuer is directing its offering to only a particular class of purchasers; (vii) Any statements or legends required by the laws of any state or foreign country or administrative authority; and (viii) In the following offerings, the notice may contain additional information, as follows: (A) In a rights offering to existing security holders: (1) The class of security holders eligible to subscribe; (2) The subscription ratio and expected subscription price; (3) The proposed record date; (4) The anticipated issuance date of the rights; and (5) The subscription period or expiration date of the rights offering. (B) In an offering to employees of the issuer or an affiliated company: (1) The name of the employer; (2) The class of employees being offered the securities; (3) The offering price; and (4) The duration of the offering period. (C) In an exchange offer: (1) The basic terms of the exchange offer; (2) The name of the subject company; and (3) The subject class of securities. (b) Corrections of misstatements about the offering. A person that publishes a notice in reliance on this section may issue a notice that contains no more information than is necessary to correct inaccuracies published about the proposed offering. (c) Rule 145(a) offerings. For purposes of Section 5 of the Act (15 U.S.C. 77e) only, an issuer or a selling security holder (and any person acting on behalf of either of them) that publishes through any medium a notice of a transaction described in paragraph (a) of § 230.145 will not be deemed to offer its securities for sale through that notice if: (1) Legend. The notice includes a statement to the effect that it does not constitute an offer of any securities for sale; (2) Limited notice content. The notice otherwise includes no more than the following information: (i) The name of the issuer; (ii) The name of the person whose assets are to be sold in exchange for the securities to be offered; (iii) The names of any other parties to the transaction; (iv) A brief description of the business of the parties to the transaction; (v) The date, time and place of the meeting of security holders to vote on or consent to the transaction; (vi) A brief description of the transaction and the basis upon which the transaction will be made; and (vii) Any statements or legends required by the laws of any state or foreign country or administrative authority. 30. By removing and reserving § 230.135c. 31. By amending § 230.135e by revising paragraph (b)(1) to read as follows: (b) * * * (1) State that: (i) The written press-related materials are not an offer of securities for sale in the United States; (ii) The securities may not be offered or sold in the United States absent registration or an exemption from registration; and (iii) Any registered public offering to be made in the United States will involve a registration statement that will contain information about the company and management, as well as financial statements. * * * * * 32. By revising § 230.137 to read as follows: § 230.137 Publications by brokers or dealers that are not participating in a registrant's distribution of securities. Under the following conditions, a broker or dealer shall not be considered an underwriter as defined in Section 2(a)(11) of the Act (15 U.S.C. 77b(a)(11)) solely because it publishes or distributes information, an opinion or a recommendation with respect to the securities of a registrant that proposes to file, has filed, or has an effective registration statement under the Act: (a) The broker or dealer is not participating, and does not propose to participate, in the distribution of the registered securities; (b) The issuer is not: (1) A development stage company that either has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified entity or entities; (2) A shell entity having few or no assets, earnings or operations; or (3) Registering an offering of penny stock as defined in § 240.3a51-1 of this chapter; and (c) In connection with its publication or distribution, the broker or dealer is not receiving consideration directly or indirectly from, or acting under any direct or indirect arrangement or understanding with: (1) The registrant; (2) A selling security holder; (3) Any participant in the distribution; or (4) Any other person with an interest in the securities that are the subject of the registration statement. Instruction to paragraph (c): This provision does not preclude payment of the regular subscription or purchase price of the document or other communication in which the broker or dealer's information, opinion or recommendation appears. 33. By revising § 230.138 to read as follows: § 230.138 Publications by a broker or dealer about securities other than those it is distributing or selling. (a) Registered offerings. Under the following conditions, a broker's or dealer's publication or distribution of information, an opinion or a recommendation shall be exempt from Section 5(b)(1) and Section 5(c) of the Act (15 U.S.C. 77e(b)(1) and (c)) even if the broker or dealer is participating or will participate in the distribution of the issuer's securities to which the registration statement relates: (1) The issuer is: (i) Subject to the requirements of Section 12 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78l or 78o(d)); or (ii) A foreign private issuer that satisfies the public float threshold in General Instruction I.C.1. of Form B (§ 239.5 of this chapter) or the public float/average daily trading volume threshold in General Instruction I.C.1. of Form B (except measured on world-wide markets rather than only U.S. markets), and has equity securities trading on a designated offshore securities market as defined in § 230.902(b); (2) The issuer is not: (i) A development stage company that either has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified entity or entities; (ii) A shell entity having few or no assets, earnings or operations; or (iii) Registering an offering of penny stock as defined in § 240.3a51-1 of this chapter; (3) The broker or dealer publishes or distributes the information, opinion or recommendation in the ordinary course of its business; (4) The publication prominently describes the capacity in which the broker or dealer is participating in the distribution; and (5) The information, opinion or recommendation relates to: (i)(A) An issuer's common stock, or debt or preferred stock convertible into common stock; and (B) The issuer proposes to file a registration statement, has filed a registration statement, or has an effective registration statement relating to non-convertible debt securities or non-convertible, nonparticipating preferred stock; or (ii)(A) An issuer's non-convertible debt securities or non-convertible, nonparticipating preferred stock; and (B) The issuer proposes to file a registration statement, has filed a registration statement, or has an effective registration statement relating solely to common stock or debt or preferred stock convertible into common stock. (b) Certain unregistered offerings. (1) If the conditions set forth in paragraph (a)(1), (a)(2), (a)(3), (a)(4), (b)(2) and (b)(3) of this section are satisfied, a broker's or dealer's publication or distribution of information, an opinion or a recommendation: (i) Shall not constitute directed selling efforts as defined in § 230.902(c); (ii) Shall not be inconsistent with an offshore transaction as defined in § 230.902(h); and (iii) Shall be an exception to the prohibition against offers to persons other than qualified institutional buyers in § 230.144A(d)(1)(i). (2) The broker or dealer publishes or distributes the information, opinion or recommendation in a publication that is distributed with reasonable regularity in the ordinary course of business. (3) The information, opinion or recommendation relates to: (i)(A) An issuer's common stock, or debt or preferred stock convertible into common stock; and (B) The issuer proposes to offer or is offering solely non-convertible debt securities or non-convertible, nonparticipating preferred stock; or (ii)(A) An issuer's non-convertible debt securities or non-convertible, nonparticipating preferred stock; and (B) The issuer proposes to offer or is offering solely common stock or debt or preferred stock convertible into common stock. 34. By revising § 230.139 to read as follows: § 230.139 Publications by brokers or dealers distributing securities. (a) Registered offerings. Under the following conditions, a broker's or dealer's publication or distribution of information, an opinion or a recommendation shall be exempt from Section 5(b)(1) and Section 5(c) of the Act (15 U.S.C. 77e(b)(1) and (c)) even if the broker or dealer is participating or will participate in the distribution of the issuer's securities to which a registration statement relates: (1) Seasoned issuers; larger foreign issuers; foreign government issuers. (i) The issuer: (A) Has been subject to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 781 or 78o(d)) for at least one year and has filed all reports it was required to file pursuant to Section 13, 14 or 15(d) of such Act (15 U.S.C. 78m, 78n or 78o(d)) during the last year; (B) Is a foreign private issuer that: (1) Is not subject to the requirements of Section 13 or 15(d) of the Exchange Act; (2) Satisfies the public float threshold in General Instruction I.C.1. of Form B (§ 239.5 of this chapter) or the public float/average daily trading volume threshold in General Instruction I.C.1. of Form B (except measured on markets worldwide rather than only U.S. markets); and (3) Has had equity securities trading on a designated offshore securities market (as defined in § 230.902(b)) for at least one year; (C) Is a foreign government issuer eligible to register on Schedule B (15 U.S.C. 77aa), if the offering is a firm commitment underwritten offering in excess of $250 million in securities; (ii) The issuer is not: (A) A development stage company that either has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified entity or entities; (B) A shell entity having few or no assets, earnings or operations; or (C) Registering an offering of "penny stock" as defined in § 240.3a51-1; (iii) The publication prominently describes the capacity in which the broker or dealer is participating in the distribution; and (iv) The information, opinion or recommendation is contained in a publication that is distributed in the ordinary course of business. (2) All other reporting and non-reporting issuers. (i) The conditions set forth in paragraphs (a)(1)(ii), (a)(1)(iii) and (a)(1)(iv) of this section are satisfied; (ii) The information, opinion or recommendation is contained in a publication that is distributed with reasonable regularity in the ordinary course of business; (iii) The information, opinion or recommendation is contained in a publication that includes similar information, opinions or recommendations with respect to a substantial number of issuers in the issuer's industry or sub-industry, or contains a comprehensive list of securities currently recommended by such broker or dealer; (iv) The information, opinion or recommendation is given no materially greater space or prominence in the publication than that given to other securities or registrants; and (v) If the publication contains an opinion or recommendation more favorable as to the issuer or any class of its securities than that last published by the broker or dealer prior to the commencement of participation in the distribution, the publication sets forth the last two opinions or recommendations published by the broker or dealer with respect to the issuer or its securities while not participating in a distribution by the issuer. (b) Certain unregistered offerings. If the conditions set forth in paragraph (a)(1) of this section are satisfied, a broker's or dealer's publication or distribution of information, an opinion or a recommendation, if contained in a publication that is distributed with reasonable regularity in the ordinary course of business: (1) Shall not constitute directed selling efforts as defined in § 230.902(c); (2) Shall not be inconsistent with an offshore transaction as defined in § 230.902(h); and (3) Shall be an exception to the prohibition against offers to persons other than qualified institutional buyers in § 230.144A(d)(1)(i). Instructions to § 230.139. 1. For purposes of paragraph (a)(2) of this section, a research report has not been distributed with "reasonable regularity" if it contains information, an opinion or a recommendation concerning a company with respect to which a broker or dealer currently is not publishing research. 2. Projections constitute opinions within the meaning of this section. 3. For purposes of paragraph (a)(2)(ii) of this section, where projections of an issuer's sales or earnings are included in a publication, the broker or dealer must have published the projections previously on a regular basis in order for the publication to have been distributed with reasonable regularity in the ordinary course of business. 4. For purposes of paragraph (a)(2)(iii), the broker or dealer must have included projections with respect to either a substantial number of companies in the issuer's industry or sub-industry, or all companies represented in the comprehensive list of securities contained in the publication. Also, those projections may not cover significantly different periods with respect to the issuer as compared to the other companies. 35. By amending § 230.144A by redesignating paragraphs (d)(1)(i), (d)(1)(ii), (d)(1)(iii) and (d)(1)(iv) as paragraphs (d)(1)(ii)(A), (d)(1)(ii)(B), (d)(1)(ii)(C) and (d)(1)(ii)(D); and by adding new paragraphs (d)(1)(i) and (d)(1)(ii) to read as follows: § 230.144APrivate resales of securities to institutions. * * * * * (d) * * * (1)(i) The securities are offered or sold only to a qualified institutional buyer or to an offeree or purchaser that the seller and any person acting on behalf of the seller reasonably believe is a qualified institutional buyer, except that if the seller is a broker or dealer, it may distribute information, an opinion or a recommendation in accordance with § 230.138(b) or § 230.139(b) while relying on this section. (ii) In determining whether a prospective purchaser is a qualified institutional buyer, the seller and any person acting on its behalf shall be entitled to rely upon the following non- exclusive methods of establishing the prospective purchaser's ownership and discretionary investments of securities: * * * * * 36. By amending § 230.145 by revising the last sentence of the first paragraph of the Preliminary Note and paragraph (b) to read as follows: § 230.145 Reclassification of securities, mergers, consolidations and acquisitions of assets. Preliminary Note: * * * Issuers must register transactions described in paragraph (a) of Rule 145 on Form C (§ 239.6 of this chapter), Form SB-3 (§ 239.11 of this chapter) or Form N-14 (§ 239.23 of this chapter). * * * * * (b) Communications. Communications in connection with a registered transaction described in paragraph (a) of this section may be made in accordance with §§ 230.135, 230.165, 230.166, 230.167, 230.168 or 230.169. 37. By revising § 230.152 to read as follows: § 230.152 Integration of private and public offerings. (a) Completed private offerings; resales. (1) A completed bona fide private offering will not be considered part of an offering registered under the Act as long as the registration statement is filed after the completion of the private offering. At any time following the completion of a bona fide private offering, a registrant may register the securities sold in the private offering for purpose of resale by persons other than an affiliate or a dealer who has purchased directly from the issuer or an affiliate of the issuer. (2) For purposes of paragraph (a)(1) of this section, a private offering will be considered completed: (i) As of the date all purchasers in the private offering have paid the purchase price; or (ii) As of the date the following are true, provided that the transaction is not subsequently renegotiated: (A) All purchasers are unconditionally obligated to pay the purchase price, except that the purchase obligation may be contingent on a condition that is not within the direct or indirect control of any purchaser; and (B) The purchase price is fixed and is not contingent on the market price of the securities at or around the time of the registered offering. (3) For purposes of paragraph (a)(1) of this section, an offering of securities underlying convertible securities or warrants will be considered completed if the offering of the convertible securities or warrants to which it relates is completed. This is true regardless of when the convertible securities or warrants become convertible or exercisable. (4) For purposes of paragraph (a)(1) of this section, an offering of securities prior to the issuer's initial offering registered under Section 5 of the Act (15 U.S.C. 77e) will be considered completed if: (i) It does not raise capital for the issuer; (ii) It is undertaken for the sole purpose of modifying the capital structure of the issuer; and (iii) It does not involve a roll-up transaction as defined in § 228.901(c) of this chapter. (b) Abandoned private offerings followed by offerings registered other than on Form B. A bona fide private offering of securities will not be considered part of an offering subsequently registered under Section 5 of the Act on a form other than Form B (§ 239.5 of this chapter) if: (1) The registrant notifies all offerees in the private offering of its abandonment of that offering; (2) The registrant does not file the registration statement for the registered offering until at least 30 days after it notified the offerees of abandonment, where the registrant (or any person acting on its behalf) offered securities in the private offering to any person ineligible to purchase in an offering in accordance with Section 4(2) or 4(6) of the Act (15 U.S.C. 77d(2) or 77d(6)) or § 230.506; (3) Neither the issuer nor any person acting on its behalf offered the securities in the private offering by any form of general solicitation or general advertising (as those terms are used in § 230.502(c)); (4) No securities were sold in the private offering; and (5) One of the following conditions is met: (i) The registrant files any selling materials used in the private offering as part of the effective registration statement; or (ii) The registrant informs offerees in the private offering that: (A) The prospectus delivered in the registered offering supersedes any selling materials used in the private offering; and (B) Any indications of willingness to purchase offerees gave during the private offering are considered rescinded. (c) Abandoned public offerings followed by private offerings. An offering of securities for which a registration statement under the Act was filed or that would have been eligible to be registered on Form B (collectively, a "public offering") will not be considered part of a subsequent bona fide private offering if: (1) The issuer notifies all offerees in the public offering of its abandonment of that offering or, if the issuer filed a registration statement for that offering, the issuer withdraws it under § 230.477; (2) No securities were sold in the public offering; and (3) One of the following conditions is satisfied: (i) If the issuer (or any person acting on its behalf) first offers the securities in the private offering more than 30 days after notification of abandonment or withdrawal of the public offering, it notifies each purchaser in the private offering that: (A) The offering is not registered under the Act; (B) The securities are restricted and cannot be resold unless they are registered under the Securities Act or unless an exemption from registration is available; and (C) Investors do not have the protection of Section 11 of the Act (15 U.S.C. 77k). (ii) If the issuer (or any person acting on its behalf) first offers the securities in the private offering 30 or fewer days after notification of abandonment or withdrawal of the public offering, the issuer and any underwriter: (A) Agree in writing, in a manner enforceable by each investor committing to purchase in the 30-day period following abandonment or withdrawal of the public offering, that they will be liable for any material misstatements or omissions in the offering documents used in the private offering under the standards set by Section 11 of the Act; and (B) Agree in writing, in a manner enforceable by each investor committing to purchase after the 30-day period following abandonment or withdrawal of the public offering, that they will be liable for any material misstatements or omissions in the offering documents used in the private offering under the standards set by Section 12(a)(2) of the Act (15 U.S.C. 77l(a)(2)). (d) Definition of terms. For the purposes of this section only, a private offering means an unregistered offering of securities that is exempt from registration pursuant to Section 4(2) or 4(6) of the Act or § 230.506 of Regulation D. 38. By removing and reserving § 230.153. - 315 - 39. By adding § 230.159 to read as follows: § 230.159 Lock-up agreements. All offers and sales in a negotiated transaction described in § 230.145(a) may be registered under Section 5 of the Act (15 U.S.C. 77e) notwithstanding the fact that certain shareholders of the company to be acquired sign agreements with the acquiror to vote in favor of the transaction prior to the filing or the effective date of the registration statement, if: (a) The agreements are limited to executive officers, affiliates and directors of the company to be acquired, the founder(s) of that company and their family members, and holders of 5% or more of the voting equity securities of that company; (b) The persons signing the agreements own less than 100% of the voting equity securities of the company being acquired; and (c) Votes will be solicited from shareholders of the company to be acquired who: (1) Have not signed the agreements; and (2) Would be ineligible to purchase under an exemption from registration pursuant to Section 4(2) or 4(6) of the Act (15 U.S.C. 77d(2) or 77d(6)) or §230.506 of Regulation D. 40. By adding § 230.165 to read as follows: § 230.165 Post-filing free writing. Notwithstanding Section 5(b)(1) of the Act (15 U.S.C. 77e(b)(1)), any prospectus used in connection with an offering after the filing of a registration statement need not satisfy the requirements of Section 10 (15 U.S.C. 77j) of the Act if: (a) Prospectus information is delivered in accordance with § 230.172, as applicable; (b) The registrant files with the Commission any prospectus used in reliance on this section when so required by § 230.425; and (c) The registrant files with the Commission the information necessary to satisfy the requirements of Section 10(a) of the Act prior to the first sale in the offering. 41. By adding § 230.166 to read as follows: § 230.166 Offers made before filing a registration statement. (a) Form B and seasoned Schedule B offerings. Notwithstanding Section 5(c) of the Act (15 U.S.C. 77e(c)), an issuer, underwriter or participating dealer may make an offer to sell or solicit an offer to buy securities prior to the filing of a registration statement with respect to those securities if: (1) At the time of the offer, the registrant and the offering satisfy the Eligibility Requirements of Schedule B or General Instruction I. of Form B (§ 239.5 of this chapter); (2) Either: (i) The offering is later registered on Form B; or (ii) The offering: (A) Is later registered on Schedule B (15 U.S.C. 77aa); (B) Is a firm commitment underwritten offering in excess of $250 million in securities; and (C) Is registered 1 year or more after the effective date of the registrant's initial registered offering; and (3) The registrant files any prospectus used in reliance on this section in the period beginning 15 days before the first offer and ending with the filing of the registration statement when so required by § 230.425. (b) Form C/SB-3 transactions. Notwithstanding Section 5(c) of the Act, the offeror of securities in a transaction to be registered on Form C, SB-3, F-8, F-80 or F-10 (§ 239.6, 239.11, 239.38, 239.41 or 239.40 of this chapter) (when that form is used in a business combination transaction) may make an offer to sell or solicit an offer to buy securities before the filing of a registration statement with respect to those securities if: (1) Any prospectus relating to the transaction used in the period beginning with the first public announcement, and ending with the filing of the registration statement is filed in accordance with § 230.425; and (2) In an exchange offer, the offers are made in accordance with the tender offer rules; and, in a transaction involving the vote of security holders, the offers are made in accordance with the proxy rules. 42. By adding § 230.167 to read as follows: § 230.167 Exemption from Section 5(c) for certain communications. (a) In offerings registered on Form B (§ 239.5 of this chapter), any communication made before the offering period shall not constitute an offer to sell or an offer to buy the securities being offered under the registration statement for purposes of Section 5(c) of the Act (15 U.S.C. 77e(c)). "Offering period" is defined in Form B. (b) In offerings registered on Forms C (§ 239.6 of this chapter), SB-3 (§ 239.11 of this chapter), F-8 (§ 239.38 of this chapter), F-80 (§ 239.41 of this chapter) or F-10 (§ 239.40 of this chapter) (when Form F-10 is used in connection with a business combination transaction), any communication before the first communication related to the offering (except for communications among the participants in the offering) shall not constitute an offer to sell or an offer to buy the securities being offered under the registration statement for purposes of Section 5(c) of the Act, provided that the parties to the transaction take all reasonable steps within their control to prevent further distribution or publication of such communication during the period between that first communication and the date of filing the registration statement. (c) In all offerings other than those described in paragraph (a) or (b) of this section or those registered on Form S-8 (§ 239.16b of this chapter), any communication made by an issuer, underwriter or participating dealer more than 30 days before the date of filing of the registration statement shall not constitute an offer to sell or offer to buy the securities being offered under the registration statement for purposes of Section 5(c) of the Act, provided that the issuer, underwriter(s) or participating dealer(s) take all reasonable steps within their control to prevent further distribution or publication of such communication during the 30 days immediately preceding the date of filing the registration statement. 43. By adding § 230.168 to read as follows: § 230.168 Regularly released forward-looking information. (a) Except in connection with offerings registered on Form S-8, C, SB-3, F-8, F-80 or F-10 (when that form is used in a business combination transaction), (§ 239.16b, 239.6, 239.11, 239.38, 239.41 or 239.40 of this chapter) in a registered offering by an issuer that is subject to the requirements of Section 12 or 15(d) of the Exchange Act (15 U.S.C. 78l or 78o(d)), the dissemination of regularly released forward-looking information by an issuer, underwriter or participating dealer in the 30-day period immediately preceding the filing of a registration statement shall be exempt from the prohibitions on offers to sell or offers to buy set forth in Section 5(c) of the Act (15 U.S.C. 77e(c)), if the registrant files any prospectus used in reliance on this section when so required by § 230.425. (b) In an offering registered on Form S-8, C, SB-3, F-8, F- 80 or F-10 (when that form is used in a business combination transaction) by an issuer that is subject to the requirements of Section 12 or 15(d) of the Exchange Act, the dissemination of regularly released forward-looking information by an issuer, underwriter or participating dealer in the period after the public announcement of the offering and prior to the filing of the registration statement shall be exempt from the prohibitions on offers to sell or offers to buy in Section 5(c) of the Act, if the registrant files any prospectus used in reliance on this section when so required by § 230.425. (c) For purposes of this section, "regularly released forward-looking information" includes the information listed in paragraphs (c)(1) through (c)(4) of this section, if the issuer customarily releases information of this type in the ordinary course of business on a regular basis, it has done so in the two fiscal years (and any portion of a fiscal year) immediately prior to the communication, and the time, manner and form in which it is released is consistent with past practice: (1) Projections of the issuer's revenues, income (loss), earnings (loss) per share, capital expenditures, dividends, capital structure or other financial items; (2) Statements about the issuer management's plans and objectives for future operations, including plans or objectives relating to the products or services of the issuer; (3) Statements about the issuer's future economic performance of the type contemplated by the management's discussion and analysis of financial condition and results of operation described in § 229.303 of this chapter or Item 9 of Form 20-F (§ 249.220f of this chapter); and (4) Assumptions underlying or relating to any of the information described in paragraphs (c)(1), (c)(2) and (c)(3) of this section. 44. By adding § 230.169 to read as follows: §230.169 Factual business communications. (a) Except in connection with offerings registered on Form S-8, C, SB-3, F-8, F-80 or F-10 (when that form is used in a business combination transaction), (§ 239.16b, 239.6, 239.11, 239.38, 239.41 or 239.40 of this chapter), factual business communications made by an issuer, underwriter or participating dealer in the 30-day period immediately preceding the filing of a registration statement with respect to a registered offering shall be exempt from the prohibitions on offers to sell and offers to buy in Section 5(c) of the Act (15 U.S.C. 77e(c)). (b) In an offering registered on Form S-8, C, SB-3, F-8, F- 80 or F-10 (when that form is used in a business combination transaction), factual business communications made by an issuer, underwriter or participating dealer after the public announcement of the offering and prior to the filing of the registration statement shall be exempt from the prohibition on offers to sell and offers to buy in Section 5(c) of the Act. (c) For purposes of this section, factual business communications include: (1) Factual information about the issuer or some aspect of its business; (2) Advertisement of the issuer's products or services; (3) Factual business or financial developments with respect to the issuer; (4) Dividend notices; (5) Factual information set forth in any Exchange Act report the issuer is required to file; and (6) Factual information communicated in response to unsolicited inquiries by persons that are not affiliates of the issuer, underwriter or participating dealer. (d) For purposes of this section, factual business communications do not include: (1) Information about the registered offering; or (2) Forward-looking information. - 316 - 45. By adding § 230.172 to read as follows: § 230.172 Delivery of prospectus information. The issuer, selling security holders, any underwriter, any participating broker or dealer, and any person acting on behalf of any of them, must deliver prospectus information to each person offered securities in connection with an offering registered under the Act as follows: (a) Form B and Schedule B seasoned registrants. If the registrant is offering securities as described in paragraph (a)(1) of this section, then delivery under paragraph (a)(2) of this section must be made. (1) Securities in an offering registered on: (i) Form B (§ 239.5 of this chapter), other than pursuant to General Instruction I.C.6. of Form B; or (ii) Schedule B (15 U.S.C. 77aa), where it is a firm commitment underwritten offering in excess of $250 million in securities that is registered more than one year after the effective date of the registrant's initial registered offering; (2) A term sheet prospectus that contains the following information must be sent in a manner reasonably designed to arrive before the date an investor makes a binding investment decision: (i) An itemization of the material terms of the securities in summary format; (ii) The name of any person, other than the issuer, for whose account securities are offered and a brief identification of any material relationship such person has (or had within the past three years) with the issuer or any affiliate of the issuer; (iii) The identity and location of a contact person to whom questions may be directed; and (iv) The identity and location of a person who, upon request, will send promptly the documents that define the terms of the securities. (b) Other registrants -- firm commitment underwritten offerings. If an offering is registered on Form A, Form SB-1, Form SB-2, Form F-7, Form F-9, Form F-10 (other than in a business combination transaction), (§§ 239.4, 239.9, 239.10, 239.37, 239.39, 230.40 of this chapter) or on Schedule B (other than as described in paragraph (a) of this section), is underwritten on a firm commitment basis and the offering: (1) Is the registrant's initial offering registered in accordance with Section 5 of the Act (15 U.S.C. § 77e) or is an offering registered within one year of the effective date of the registrant's initial registered offering, then a prospectus satisfying Section 10 of the Act (15 U.S.C. § 77j) must be sent to each investor in a manner reasonably designed to arrive at least 7 calendar days before the pricing of the securities. (2) Takes place more than one year after the effective date of the registrant's initial offering registered in accordance with Section 5 of the Act, then a prospectus satisfying Section 10 of the Act must be sent to each investor in a manner reasonably designed to arrive at least 3 calendar days before the pricing of the securities. (c) Other registrants -- non-firm commitment underwritten offerings. If an offering is registered on Form A, Form SB-1, Form SB-2, Form F-7, Form F-9, Form F-10 (other than in a business combination), or on Schedule B (other than as described in paragraph (a) of this section), is not underwritten on a firm commitment basis and the offering: (1) Is the registrant's initial offering in accordance with Section 5 of the Act or is an offering taking place within one year of the effective date of the registrant's initial registered offering, then a prospectus satisfying Section 10 of the Act must be sent to each investor in a manner reasonably designed to arrive at least 7 calendar days before the investor signs a subscription agreement or otherwise commits to purchase securities. (2) Takes place more than one year after the effective date of the registrant's initial registered offering in accordance with Section 5 of the Act, then a prospectus satisfying Section 10 of the Act must be sent to each investor in a manner reasonably designed to arrive at least 3 days before the investor signs a subscription agreement or otherwise commits to purchase the securities. Note to paragraphs (b) and (c). The issuer, underwriter or participating broker or dealer may choose to deliver a prospectus meeting the requirements of Section 10(a), instead of a prospectus meeting the requirements of Section 10, if it does so in accordance with the terms of paragraphs (b) and (c) of this section. (d) Roll-ups. Notwithstanding paragraphs (a) through (c) of this section, if a registrant is registering a roll-up transaction as defined in § 229.901(c) of this chapter, a prospectus that satisfies the requirements of Section 10 of the Act must be sent to each investor no later than the earlier of: (1) 60 calendar days before the meeting at which the roll-up transaction will be submitted to a vote or 60 calendar days before the earliest date on which partnership action could be taken by consent; and (2) The date calculated by applying the maximum number of days permitted for giving notice under applicable state law. (e) Material changes. If not previously disclosed by any other means to investors, material changes to the information reflected in the prospectus delivered must be set forth in a document sent to each investor in a manner reasonably designed to arrive at least 24 hours before: (1) The securities are priced, if the offering is subject to paragraph (b) of this section; (2) The investor signs a subscription agreement or otherwise commits to purchase securities, if the offering is subject to paragraph (c) of this section; or (3) The date of the meeting at which the transaction will be submitted to a vote or on which partnership action could be taken by consent, if the offering is subject to paragraph (d) of this section. (f) Rule 462 registration statements. Notwithstanding paragraphs (a) through (d) of this section, if an offering is registered in part through a registration statement filed under § 230.462(b) or § 230.462(e), a prospectus delivered with respect to the earlier registration statement to an investor in compliance with this § 230.172 will be deemed to satisfy the delivery requirements with respect to that investor under this § 230.172 with respect to the § 230.462(b) or § 230.462(e) registration statement for the offering, provided that the issuer, underwriter or participating dealer otherwise informs investors purchasing in the offering of the change in the size of the offering. 46. By adding § 230.173 to read as follows: § 230.173 Delivery of final prospectuses. Notwithstanding Section 5(b)(2) of the Act (15 U.S.C. 77e(b)(2)), a prospectus that meets the requirements of Section 10(a) of the Act (15 U.S.C. 77j(a)) need not precede or accompany the carrying or delivery of any security by any person in an offering registered other than on Form S-8, Form C, Form SB-3, Form F-8, Form F-80 or F-10 (when that form is used in a