September 14, 1994
TO: CLOSED-END FUND COMMITTEE NO. 20-94
INVESTMENT ADVISERS COMMITTEE NO. 51-94
RE: SEC PROPOSES AMENDMENTS TO SECTION 16 FILING REQUIREMENTS
__________________________________________________________
The Securities and Exchange Commission has proposed
amendments to the rules under Section 16 of the Securities
Exchange Act of 1934 regarding the filing of ownership reports by
officers, directors and principal security holders, and the
exemption of certain transactions by those persons from the
short-swing profit recovery provisions under Section 16. The
proposed amendments are intended to streamline the Section 16
regulatory scheme, particularly with respect to employee benefit
plans; broaden exemptions from short-swing profit recovery where
consistent with the statutory purposes; and codify several staff
interpretive provisions. A copy of the SEC's release is
attached.
Among other proposed revisions that may be of interest to
investment companies are the proposed changes to the issuer
disclosure requirements contained in Item 405 of Regulation S-K
concerning compliance with Section 16(a) reporting obligations.
The proposal would require registrants to set off any disclosure
of non-compliance under an appropriate and discrete caption, to
enable interested persons to locate quickly this disclosure. In
addition, language would be added to Item 405 to make it clear
that in determining whether there have been any delinquent
reports that must be disclosed, the issuer is obligated to
consider the absence of certain forms (e.g., the absence of a
Form 3 from an insider is an indication that disclosure is
required). Finally, the Commission solicited comment on whether
Item 405 should be revised to require issuers to include in their
filings an affirmative statement that there were no Section 16(a)
delinquencies required to be reported.
Comments on the proposed amendments are due to the SEC on
October 17, 1994. If there are any issues that you would like
the Institute to consider addressing in a comment letter on the
proposed amendments, please contact the undersigned at 202/326-
5824 by October 4, 1994.
Amy B.R. Lancellotta
Associate Counsel
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