SEC Proposes Streamlining Exchange Act Rule 12g3-2(b) for Foreign Private Issuers
February 25, 2008
On February 19, 2008, the SEC issued a proposed rule release which would amend Exchange Act Rule 12g3-2(b), which provides foreign private issuers an exemption from registering their equity securities under Section 12(g) of the Exchange Act if, prior to the time that they would be subject to Section 12(g) the company had submitted a Rule 12g3-2(b) exemption filing to the SEC. The submission, which was previously required to be in paper format, obligated a non-reporting issuer to include a list of the issuer’s non-U.S. public disclosure obligations, information concerning its U.S. shareholders and paper copies of its non-U.S. disclosure documents published since the beginning of its most recently completed fiscal year. In order to maintain the exemption, a non-reporting foreign private issuer was required to submit to the SEC paper copies of its non-U.S. disclosure documents on an ongoing basis. Pursuant to the proposed amendments, a foreign private issuer would be permitted to claim the Rule 12g3-2(b) exemption without having to apply to, or otherwise notify, the SEC concerning the exemption, as long as the following criteria are met:
1) the issuer is not required to file or furnish reports under Section 13(a) or 15(d) of the Exchange Act
2) the issuer currently maintains a listing of the subject class of securities on one or more exchanges in a foreign jurisdiction that, either singly or together with the trading of the same class of the issuer’s securities in another foreign jurisdiction, constitutes the primary trading market for those securities
3) the average daily trading volume in the U.S. for the most recently completed fiscal year has been no greater than 20 percent of the average daily trading volume of that class of securities on a worldwide basis for the same period and
4) the issuer has electronically published specified non- U.S. disclosure documents, since the beginning of the most recently completed fiscal year
The proposed rule also provides for similar exemption for foreign private issuers that have terminated their registration of a class of securities under Section 12(g) of the Act, or terminated their obligation to file or furnish reports under Section 15(d) of the Act.
http://www.sec.gov/rules/proposed/2008/34-57350.pdf