July 24, 1992
TO: BOARD OF GOVERNORS NO. 48-92
SEC RULES COMMITTEE NO. 50-92
INTERNATIONAL COMMITTEE NO. 15-92
RE: SEC PROPOSES AMENDMENTS TO RULE 144A UNDER THE SECURITIES
ACT
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The Securities and Exchange Commission has published for
public comment amendments to Rule 144A under the Securities Act
of 1933 (which provides a safe harbor exemption from the
registration requirements thereunder for resales of restricted
securities to qualified institutional buyers ("QIBs")). Under
the Rule, institutions eligible to be QIBs must own or invest on
a discretionary basis at least $100 million in eligible
securities. A copy of the SEC's release is attached.
The proposed amendments would expand the categories of QIBs
to include collective trust funds and master trusts, which are
not currently enumerated as qualifying institutions in the Rule.
Specifically, the amendment would add collective trust funds used
for the investment of the funds of corporate-sponsored employee
benefit plans and state-sponsored benefit plans and master trusts
for the commingled investment of funds of a single employer's
employee benefit plans as types of entities eligible to qualify
as a QIB.
In addition, the definition of QIB would be amended to
specify that sales to a QIB insurance company for its
unregistered separate accounts can qualify under Rule 144A.
Finally, the Rule would be amended to permit institutions to
include U.S. government securities in the amount of securities
held or invested in determining whether the $100 million
threshold has been satisfied.
Comments are due to the SEC on the proposed amendments by
September 1, 1992. Please provide me with your comments on the
proposal for possible inclusion in the Institute's comment letter
by August 19, 1992. My direct number 202/955-3523.
Amy B.R. Lancellotta
Associate Counsel
Attachment