Federal Register, Volume 76, Number 149, August 3, 2011, Pages 46595-47054 Page: 46,611

Federal Register/Vol. 76, No. 149 /Wednesday, August 3, 2011 /Rules and Regulations

the parent guarantee or public float
requirements of Form F-10.94
One commentator also noted that
removing the reference to Form F-9
from Form 40-F (as was proposed in the
2011 Proposing Release) would result in
former F-9 filers who do not have a
public float of $75 million or a parent
guarantee of their debt losing eligibility
to file annual reports on Form 40-F.95
Issuers who are not eligible to use Form
40-F use Form 20-F, which requires
disclosure in accordance with standards
set by the Commission rather than
standards set by the Canadian securities
regulators. In Form 40-F, Canadian
MJDS filers file with the Commission
their home jurisdiction periodic
disclosure documents under cover of
Form 40-F. In Form 20-F, foreign
private issuers are subject to the
Commission's special disclosure
requirements for foreign private issuers,
and have to prepare separate disclosure
to comply with those requirements.
Similar to the Form F-10 "grandfather"
provision above, we believe this change
to Form 40-F would result in a very
small number of issuers no longer being
able to use Form 40-F. In order to
address this concern, we are adopting a
permanent "grandfather" provision that
would allow currently eligible Form 40-
F filers to continue to use Form 40-F to
satisfy their reporting obligations under
Section 13 and Section 15(d) of the
Exchange Act as to previously sold
securities if they had filed and sold
securities under a Form F-9 with the
Commission before the effective date of
the new rules. We believe a permanent
"grandfather" provision is appropriate
for these issuers because some issuers
may have issued securities many years
ago and may still be reporting pursuant
to the requirements of Form 40-F, and
given the design of the MJDS system, we
do not believe it would be appropriate
to change the requirements that these
issuers relied on when the offering was
One commentator was opposed to
rescinding Form F-9 because Form F-
9 filers who are in the oil and gas
industry are not required to provide the
disclosure required by Accounting
Standards Codification 932 "Extractive
Activities-Oil and Gas" (ASC 932) that
would be required for Form F-10
filers.96 A review of issuers that have
94Smia to the grandfather provision we are
adopting for Form S-3 and Form F-3 fliers, new
Form F-10s may be filed, but issuers relying on this
instruction will need to file a final prospectus for
any such offering within three years of the effective
date of the new rules.
95 See letter from Davies.

96 See letter from Paul, Weiss, Rifkind, Wharton
& Garrison LLP dated March 28, 2011 (Paul Weiss).

filed a Form F-9 since January 1, 2007
indicates that this change would affect
very few issuers. As the commentator
notes, the Commission has indicated
that it will continue to monitor the
necessity of providing ASC 932
disclosure as regulatory changes
occur.97 At this time we are not making
any changes to the requirement for Form
F-10 filers to provide ASC 932
disclosure or otherwise making special
accommodations for previous Form F-9
filers. We are also not adopting a
grandfather provision for this disclosure
requirement because we believe the
burden on former F-9 filers will not be
significant and will impact a very small
number of issuers.
D. Ratings Reliance in Other Forms and
1. Forms S-4 and F-4 and Schedule
Proposals relating to Form S-4, Form
F-4 and Schedule 14A were also
included in the 2011 Proposing Release.
We did not receive significant separate
comment on these proposals. Form S-4
and Form F-4 include the Form S-3 and
Form F-3 eligibility criteria by allowing
registrants that meet the registrant
eligibility requirements of Form S-3 or
F-3 and that are offering investment
grade securities to incorporate by
reference certain information.98
Similarly, Schedule 14A permits a
registrant to incorporate by reference if
the Form S-3 registrant requirements in
General Instruction I.A. are met and
action is to be taken as described in
Items 11, 12 and 14 99 of Schedule 14A,
which concerns non-convertible debt or
preferred securities that are "investment
grade securities" as defined in General
Instruction I.B.2. of Form S-3.1oo In
addition, Item 13 of Schedule 14A
allows financial information to be
incorporated into a proxy statement if
the requirements of Form S-3 (as
described in Note E to Schedule 14A)
are met. Because we are changing the
eligibility requirements in Forms S-3
and F-3 to remove references to ratings
by an NRSRO, we believe the same
97 See Release No. 33-8879, Acceptance From
Foreign Private Issuers of Financial Statements
Prepared in Accordance With International
Financial Reporting Standards Without
Reconciliation to U.S. GAAP (Dec. 21, 2007) [73 FR
98 See General Instruction B.1 of Forms S-4 and
Form F-4.
99Item 11 of Schedule of 14A provides for
solicitations related to the authorization or issuance
of securities other than an exchange of securities.
Item 12 provides for solicitations related to the
modification or exchange of securities. Item 14
provides for solicitations related to mergers,

consolidations and acquisitions.
100oo See Note E of Schedule 14A.

standard should apply to the disclosure
options in Forms S-4 and F-4 based on
Form S-3 or F-3 eligibility. That is, a
registrant will be eligible to use
incorporation by reference in order to
satisfy certain disclosure requirements
of Forms S-4 and F-4 to register non-
convertible debt or preferred securities
on Form S-4 or Form F-4 if:
(i) The issuer has issued (as of a date
within 60 days prior to the filing of the
registration statement) at least $1 billion
in non-convertible securities, other than
common equity, in primary offerings for
cash, not exchange, registered under the
Securities Act, over the prior three
years; or
(ii) The issuer has outstanding (as of
a date within 60 days prior to the filing
of the registration statement) at least
$750 million of non-convertible
securities, other than common equity,
issued in primary offerings for cash, not
exchange, registered under the
Securities Act;
(iii) The issuer is a wholly-owned
subsidiary of a WKSI as defined in Rule
405 under the Securities Act;
(iv) The issuer is a majority-owned
operating partnership of a REIT that
qualifies as a WKSI; or
(v) The issuer discloses in the
registration statement that it has a
reasonable belief that it would have
been eligible to register the securities
offerings proposed to be registered
under such registration statement
pursuant to General Instruction I.B.2 of
Form S-3 or Form F-3 in existence
prior to the new rules, discloses the
basis for such belief, and files the final
prospectus for any such offering on or
before the date that is three years from
the effective date of the amendments.
Similarly, we are amending Schedule
14A to refer simply to the requirements
of General Instruction I.B.2. of Form S-
3, rather than to "investment grade
securities." As a result, an issuer will be
permitted to incorporate by reference
into a proxy statement if the issuer
satisfied the requirements of General
Instruction I.A. of Form S-3, the matter
to be acted upon related to non-
convertible securities, other than
common equity, and was described in
Item 11, 12 or 14 of Schedule 14A and
the issuer falls into one of the categories
listed above (measured as of a date that
is within 60 days of the proxy first being
sent to security holders).
2. Securities Act Rules 138, 139 and 168
Other Securities Act rules also
reference credit ratings. Rules 138, 139,
and 168 under the Securities Act
provide that certain communications are
deemed not to be an offer for sale or

offer to sell a security within the


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United States. Office of the Federal Register. Federal Register, Volume 76, Number 149, August 3, 2011, Pages 46595-47054, periodical, August 3, 2011; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc52326/m1/25/ocr/: accessed August 17, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.