Excerpt from Current Issues and Rulemaking Projects Outline Quarterly Update (March 31, 2001)

Cover Page Gatefold for Registered Public Offerings

In many registered public offerings, issuers choose to include text and/or artwork inside the front and back cover pages. Graphics depicting a registrant's products or services, or explaining how they are used, can be very helpful to investors – particularly when the products or services relate to a complex process or technical industry. In order to avoid significant re-printing costs, we will review proposed gatefold and other graphic presentations as soon as they are available. Most of our comments are based on the following staff concerns:

• The graphics don't accurately represent current business – for example, the depiction of products that do not exist yet or are not the registrant's products, the selective one-sided presentation of only the most favorable aspects of a registrant's business, excessive hyping, the inclusion of testimonials or statistical data that are taken out of context, or the identification of customers or other third parties upon which the registrant is not substantially dependant;
   
• The text in the graphics does not adhere to plain English principles – for example, the use of technical industry jargon and terms that are unfamiliar to the average investor or the inclusion of extensive narrative text which repeats information already contained in the summary or business sections; and
   
• The graphics detract from other prospectus disclosure because it is too confusing or obscure.

The gatefold for each registrant is unique, and we take into account all the information we have learned about the registrant and its industry when we review it. Sometimes the gatefolds for two different registrants seem similar at first glance, but they may raise significant staff concerns in one instance and not in the other, based on the unique facts of each registrant.

Registrants and underwriters can expedite staff review and reduce the number of staff comments if they keep in mind our concerns when they are preparing their gatefold and other graphic presentations.

http://www.sec.gov/divisions/corpfin/guidance/ci033101ex_saf.htm