SECURITIES AND EXCHANGE COMMISSION 17 CFR PARTS 232, 240, and 249 [Release Nos. 34-38800; IC-22731. File No. S7-18-97] RIN 3235-AG97 Rulemaking for EDGAR System AGENCY: Securities and Exchange Commission ACTION: Proposed Rules SUMMARY: The Securities and Exchange Commission ("Commission") is proposing to require electronic filing of Form 13F by institutional investment managers via the Electronic Data Gathering, Analysis, and Retrieval ("EDGAR") system. The proposal would require filings of Form 13F to be made by either direct transmission, magnetic tape, or diskette. Under this proposal, these reports would be filed electronically and have the same degree of availability to the public as other Commission electronic filings. DATES: Comments must be submitted on or before August 7, 1997. ADDRESSES: Comments should be submitted in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. Comments also may be submitted electronically at the following E-mail address: rule-comments@sec.gov. All comment letters should refer to File No. S7-18-97; this file number should be included in the subject line if E-mail is used. Comment letters will be available for inspection and copying in the Commission's Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549. Electronically submitted comment letters will also be posted on the Commission's Internet Web Site (http://www.sec.gov). FOR FURTHER INFORMATION CONTACT: Anthony A. Vertuno, Senior Special Counsel, or Ruth Armfield Sanders, Senior Counsel, Division of Investment Management, at (202) 942-0591 or (202) 942-0633. SUPPLEMENTARY INFORMATION: The Commission requests public comment on a proposal to require mandatory electronic filing of Form 13F<(1)> by institutional investment managers in accordance with the Commission's rules implementing the EDGAR system.<(2)> The changes, if adopted, will affect Regulation S-T; rules 13f-1 and 13f-2<(3)> under the Securities Exchange Act of 1934 ("Exchange Act");<(4)> and Forms 13F and 13F- E<(5)> under the Exchange Act. <(1)> 17 CFR 249.325. <(2)> For a comprehensive discussion of the rules adopted by the Commission governing mandated electronic filing, see Release Nos. 33-6977 (Feb. 23, 1993) [58 FR 14628], IC-19284 (Feb. 23, 1993) [58 FR 14848], 35-25746 (Feb. 23, 1993) [58 FR 14999], and 33-6980 (Feb. 23, 1993) [58 FR 15009]. See also Release No. 33-7072 (July 8, 1994 [59 FR 36258], relating to implementation of Financial Data Schedules, Release No. 33-7122 (Dec. 19, 1994) [59 FR 67752], making the EDGAR rules final and applicable to all domestic registrants and adopting minor amendments to the EDGAR rules, and Release No. 33-7241 (Nov. 13, 1995) [60 FR 57682], adopting an updated EDGAR Filer Manual, version 4.40 (the "EDGAR Filer Manual") and technical amendments to the EDGAR rules. See also Release No. 33-7427 (July 1, 1997) adopting certain technical amendments to the EDGAR rules. <(3)> 17 CFR 240.13f-1 and 240.13f-2. <(4)> 15 U.S.C. 78a et seq. <(5)> 17 CFR 249.326. ======END OF PAGE 2====== I. BACKGROUND AND PROPOSED AMENDMENTS In February 1993, the Commission adopted Regulation S-T, governing mandatory electronic filing, and a number of amendments to its rules, schedules and forms, to implement the EDGAR system and require registrants whose filings are processed by the Division of Corporation Finance and the Division of Investment Management to make most of their submissions electronically. A graduated phase-in process to mandatory electronic filing began on April 26, 1993, and ended on May 6, 1996, when all filers not previously phased in became subject to mandatory electronic filing. The Commission has gained substantial experience with the EDGAR system and its implementing regulations since the first mandated filings were made in April 1993 and has determined that it should proceed with mandatory electronic filing of Form 13F. The public interest in having these reports, along with other filings, available electronically has increased, and the Commission believes these reports should have the same degree of availability as other Commission filings. The specific proposal is set forth below. A. General Form 13F reports are filed by institutional investment managers to report certain equity securities holdings of their managed accounts.<(6)> During phase-in to mandatory electronic filing, filers <(6)> Section 13(f)(1) of the Exchange Act [15 U.S.C. 78m(f)(1)] requires institutional investment managers exercising investment discretion over accounts holding at least $100 million in fair market value of certain equity securities to file a report on Form 13F with the Commission at the times set forth in rule 13f-1 [17 CFR 240.13f-1]. ======END OF PAGE 3====== have not been required to file Form 13F reports electronically. Currently, Form 13F reports can be filed electronically on Form 13F-E, the electronic version of Form 13F, on a voluntary basis.<(7)> Now that filer phase- in has been completed, the Commission proposes to make electronic filing of Form 13F mandatory. Unlike other EDGAR submissions, which can be prepared and filed as "free text" documents, Form 13F-E must be prepared as a structured file with a position-sensitive layout of data records.<(8)> To help ensure that filers used the specified structure, the Commission requires Form 13F- E to be submitted by magnetic tape. Form 13F-E reports consist of large numbers of similar data records, and magnetic tape filings provide an efficient means of standardizing the filing format and facilitating automated and accurate transfer and tabulation of the reported <(7)> In the EDGAR Pilot system and following the opening of the operational EDGAR system, Form 13F reports could be filed on Form 13F-E, under temporary rule 13f-2(T) [17 CFR 240.13f-2(T)], proposed in Release No. 34-23694 (Oct. 8, 1986) [51 FR 37291], adopted in Release No. 34-24206 (Mar. 12, 1987) [52 FR 9151], amended to govern the filing of Form 13F on operational EDGAR in Release No. IC-18664 (Apr. 20, 1992) [57 FR 18223], and made permanent with minor amendments in Release No. IC- 19284. See Rule 101(b)(7) of Regulation S-T [17 CFR 232.101(b)(7)]. <(8)> Instructions for filing electronically Form 13F-E appear in the form and in the EDGAR Filer Manual. ======END OF PAGE 4====== data.<(9)> However, only about five percent of the approximately 1800 filers of Form 13F choose to file the form electronically on Form 13F-E. The standardized format is also used by EDGAR, which performs some pre-dissemination processing of the filings. Successful pre-dissemination processing<(10)> depends directly on the filer's compliance with the format requirements for the form. Electronic filing of reports on Form 13F-E is optional under the current EDGAR filing rules because many filers do not have the ability to produce magnetic tape filings. However, the Commission is aware of increasing demand for the electronic availability of reports on Form 13F.<(11)> For example, the Commission believes that shareholders may find the information contained in Form 13F filings useful in tracking <(9)> Section 13(f)(3) of the Exchange Act requires the Commission to tabulate the information reported under Section 13(f)(1). Disclosure Inc., under contract with the Commission, tabulates the reported securities holdings both by the issuer of the securities being held (showing the portfolio manager whose clients hold the securities) and by reporting portfolio manager (showing the securities being held by each reporting portfolio manager). These tabulations are made available in the Commission's public reference room and are published by Disclosure Inc. in both hard copy and on-line computerized form. <(10)> Pre-dissemination processing of Form 13F-E includes pagination, insertion of column headings on each page, and make-up of a cover page for the filing using data elements tagged by the filer. <(11)> Currently, only the reports filed voluntarily via EDGAR on Form 13F-E are disseminated electronically and available on the Commission's Internet Web Site, whereas other public disclosure filings are required to be filed via EDGAR and are disseminated and available electronically. ======END OF PAGE 5====== institutional investor holdings in their investments and that issuers, too, may find detail as to institutional investor holdings useful, since much of their shareholder list may reflect holdings in "street name," rather than beneficial ownership. Mandatory electronic dissemination of this data would help insure timely and efficient dissemination of this important information. The Commission believes that these reports should have the same degree of availability as other Commission filings. Therefore, the Commission is now proposing to make the electronic filing of Form 13F reports mandatory and to provide for the filing of these reports by direct transmission and diskette as well as by magnetic tape. The Commission does not propose to apply the detailed formatting requirements of Form 13F-E to the mandatory electronic submission of Form 13F. The Commission proposes that filers prepare Form 13F as they do other electronic submissions, although the basic tabular presentation of data would be retained, as is currently the case with Form 13F reports filed in paper. Disseminators and other users of Form 13F data would be responsible for extracting the data and for standardizing its presentation, to the extent desirable. B. Changes to Rule 13f-1 and Form 13F The proposals would amend rule 13f-1 to address the requirements for filing amendments to Form 13F and would make certain revisions to Form 13F, as described below.<(12)> <(12)> The revisions to Form 13F would be made to accommodate more easily the preparation of the form as an electronic filing. The proposals would also remove Form 13F-E and rule 13f-2 [17 CFR 240.13f-2], which governs the filing of Form 13F-E on EDGAR. ======END OF PAGE 6====== Requests for confidential treatment<(13)> of Form 13F information and the information for which confidential treatment is requested will continue to be required to be filed in paper.<(14)> Upon denial of a confidential treatment request, or the expiration of confidential treatment previously granted, the filer would be required to submit the material electronically.<(15)> 1. Rule 13f-1 Under the proposals, rule 13f-1 would be revised by adding a new subparagraph governing the filing of amendments to Form 13F.<(16)> The new paragraph would require that each amendment to a Form 13F either restate the form in its entirety, as amended, or designate the amendment as <(13)> Requests for confidential treatment may be filed pursuant to Section 13(f)(3) of the Exchange Act [15 U.S.C. 78m(f)(3)]. Instruction D of current Form 13F references that section and further provides for confidential treatment for up to one year for certain open risk arbitrage positions for which required representations are included in the request. Proposed Instructions for Confidential Treatment Requests for revised Form 13F include the same provisions. <(14)> This is consistent with the treatment of other requests for confidential treatment under the EDGAR system. See Rule 101(c)(1)(i) [17 CFR 232.101(c)(1)(i)]. <(15)> Each quarter approximately 50 managers would be required to re-submit electronically information previously submitted in paper in connection with a request for confidential treatment. See supra footnote 14. <(16)> See paragraph (a)(2) of rule 13f-1 [17 CFR 240.13f- 1(a)(1)] as proposed. ======END OF PAGE 7====== containing only additions to the previous filed report. The paragraph would also provide for the sequential numbering of amendments. 2. Form 13F The revised Form 13F, as proposed, would not differ substantively from the current Form 13F, although there would be some differences in organization and presentation. The revised Form 13F would be in a three- part format, consisting of a Form 13F Cover Page (the "Cover Page"), a Form 13F Summary Page (the "Summary Page"), and a Form 13F Information Table (the "Information Table").<(17)> The proposed contents of each of these parts, as well as the content of certain proposed form instructions, are summarized below. o Cover Page. The Cover Page would include the information included in current Form 13F, such as the period end date;<(18)> the name and address of the institutional investment manager filing the report; the signature, name, title and phone number of the person signing the report; and, if applicable, a List of Other Managers Reporting for this Manager.<(19)>. The Cover Page as proposed would also provide for the identification of an amendment filing;<(20)> the inclusion of the 13F file number of the manager filing the report; and the designation of the report as one that names other reporting manager(s) reporting for the <(17)> See Special Instruction 1 for Form 13F as proposed. <(18)> See Special Instruction 2 for Form 13F as proposed. <(19)> See Special Instruction 7 for Form 13F as proposed. <(20)> See Special Instruction 3 for Form 13F as proposed. ======END OF PAGE 8====== filer, reports holdings over which the reporting manager exercises discretion, or both.<(21)> o Summary Page. The Summary Page, as proposed, would include a List of Other Included Managers for which the filer is reporting<(22)> and a new Report Summary. The Report Summary would contain the Number of Other Included Managers, an Information Table Entry Total, and an Information Table Value Total.<(23)> These three items would provide a useful and convenient summary of key information included elsewhere in the report and also provide a means for cross-checking to ensure that the report as accepted and disseminated is the complete report as intended to be filed. o Information Table. The Information Table, as proposed, would call for the same information as Items 1 through 8 of current Form 13F.<(24)> o Certain Proposed Instructions. Proposed General Instruction 3 for Form 13F would retain the requirement that copies of the form be filed with the appropriate regulatory agency.<(25)> However, this instruction would clarify that the manager may satisfy its obligation to file with <(21)> See Special Instruction 6 for Form 13F as proposed. <(22)> See Special Instruction 9 for Form 13F as proposed. The requirement in the current Form 13F and 13F-E that other included managers be listed alphabetically would be eliminated. <(23)> See Special Instruction 8 for Form 13F as proposed. <(24)> See Special Instruction 13 for Form 13F as proposed. <(25)> See General Instruction C for current Form 13F. ======END OF PAGE 9====== another regulatory agency by sending a printed copy of the EDGAR filing with the confidential access codes removed or blanked out. Proposed General Instruction 4 would retain a reference to the Official List of Section 13(f) securities.<(26)> Proposed Special Instruction 14 would include guidance on the preparation of Form 13F for electronic filing, addressing such topics as maximum line length, page tag requirements, and selection of EDGAR submission types. C. Changes to Regulation S-T Regulation S-T, which governs the preparation and submission of electronic filings to the Commission, would be amended as described below in connection with the mandatory electronic submission of Form 13F: o Rule 101(a)(1)(iii) of Regulation S-T. The Regulation S-T list of mandated electronic submissions would be revised to remove the exclusion of Form 13F from the list of mandated electronic filings. o Rule 101(b)(7) of Regulation S-T. Reports on Form 13F would be removed from those allowed but not required to be submitted in electronic format. D. Request for Comment The Commission requests comment on its proposal to make the electronic submission of reports on Form 13F mandatory. The Commission also requests comment on the proposed amendments to Regulation S-T and rule 13f-1, and on the proposed revised format of Form 13F. The Commission also seeks comment on whether, in conjunction with mandatory electronic filing, it should <(26)> See General Instruction E for current Form 13F. ======END OF PAGE 10====== retain either the current Form 13F-E requirement that reports be submitted only by magnetic tape or the current Form 13F-E formatting requirements. II. GENERAL REQUEST FOR COMMENT Comment is solicited with regard to each proposal respecting the viewpoints of both the filers and the users of information filed via EDGAR. Commenters should address any alternatives to these proposals they deem appropriate. The Commission also requests comment on whether the proposals, if adopted, would have an adverse effect on competition that is neither necessary nor appropriate in furthering the purposes of the Exchange Act. The Commission requests comment on whether the proposals, if adopted, would promote efficiency, competition, and capital formation. The Commission also requests comment on whether the public considers this a major or minor rule change. Comments will be considered by the Commission in compliance with its responsibilities under Section 2(b) of the Securities Act of 1933<(27)> and Section 3(f) of the Exchange Act.<(28)> The Commission encourages commenters to provide empirical data or other facts to support their views. Comments will be considered by the Commission in complying with its responsibilities under Section 23(a) of the Exchange Act.<(29)> Comments should be addressed to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington D.C. 20549. Comments also may be submitted <(27)> 15 U.S.C. 77b(b). <(28)> 15 U.S.C. 78c(f). <(29)> 15 U.S.C. 78w(a). ======END OF PAGE 11====== electronically at the following E-mail address: rule-comments@sec.gov. All comment letters should refer to File Number S7-18-97. This file number should be included on the subject line if E-mail is used. III. COST-BENEFIT ANALYSIS To assist the Commission in its evaluation of the costs and benefits that may result from the proposed changes contained in this release, commenters are requested to provide their views and data relating to any costs and benefits associated with these proposals. It is anticipated that these proposals will not affect significantly the costs and burdens associated with filing requirements generally, or specifically with respect to electronic filing. In addition, Section 23(a) of the Exchange Act requires the Commission, in adopting rules under the Exchange Act, to consider the anti-competitive effects of such rules, if any, and to balance any impact against regulatory benefits gained in terms of furthering the purposes of the Exchange Act.<(30)> The Commission preliminarily has considered the proposed amendments to Rule 13f-1, Form 13F and related rules in light of the standards cited in Section 23(a)(2) and believes preliminarily that, if adopted, they would not likely have an adverse impact on competition not necessary or appropriate in furtherance of the Exchange Act because they would enhance public access to reported information. The Commission solicits commenters' views regarding the effects of the proposed rules on competition. IV. SUMMARY OF REGULATORY FLEXIBILITY ACT CERTIFICATION <(30)> See 15 U.S.C. 78w(a)(2). ======END OF PAGE 12====== Pursuant to Section 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 605(b), the Chairman of the Commission has certified that the amendments proposed in this release would not, if adopted, have a significant economic impact on a substantial number of small entities. Institutional investment managers are not required to submit reports on Form 13F unless their holdings are in aggregate at least $100,000,000. Therefore, no small entities within the definition contained in rule 0-10 under the Exchange Act are affected by the form, and no small entities are otherwise affected by the proposed rule amendments. The certification, documenting the factual basis therefor, is attached to this release as Appendix A. V. PAPERWORK REDUCTION ACT Certain provisions of the proposed amendments to Form 13F contain "collection of information" requirements within the meaning of the Paperwork Reduction Act of 1995 (44 U.S.C. Section 3501 et seq.), and the Commission has submitted them to the Office of Management and Budget for review in accordance with 44 U.S.C. Section 3507(d) and 5 CFR 1320.11. The title for the collection of information is "Form 13F, Report of Institutional Investment Managers pursuant to Section 13(f) of the Securities Exchange Act of 1934." Section 13(f) of the Exchange Act requires the Commission to adopt rules that would create a reporting and disclosure system to collect specific information and to disseminate the information to the public. Pursuant to this statutory mandate, the Commission adopted rule 13f-1 under the Exchange Act (17 CFR 240.13f-1), which requires institutional investment managers who exercise investment discretion over accounts of exchange-traded or NASDAQ-quoted equity securities having, in the ======END OF PAGE 13====== aggregate, a fair market value of at least $100,000,000 to file quarterly reports with the Commission on Form 13F. Form 13F provides a reporting and disclosure system to collect specific information and to disseminate the information to the public about the holdings of institutional investment managers who exercise investment discretion over accounts of exchange-traded or NASDAQ-quoted equity securities having, in the aggregate, a fair market value of at least $100,000,000. It is estimated that approximately 1,800 institutional investment managers are subject to the rule. These include such institutional investment managers as certain pension funds, trusts, hedge funds, and investment advisers. Each reporting manager files Form 13F quarterly. Each quarter, following the expiration of grants of confidential treatment, approximately 50 managers will re-submit electronically information previously submitted in paper. It is estimated that compliance with the form's requirements imposes a total annual burden per manager of approximately 98.8 hours for each of the 1,804 managers submitting the report (an increase of .1 hours per quarter per manager due to the additional requirement of a cover page and summary page containing certain de minimis additional reporting information<(31)>) plus an additional <(31)> The additional requirements are not complex. The cover page adds the requirements of identification of an amendment filing; the inclusion of the 13F file number of the manager filing the report; and the designation of the report as one that names other reporting manager(s) reporting for the filer, reports holdings over which the reporting manager exercises discretion, or both. The summary page adds a Report Summary, containing the Number of Other Included Managers, an Information Table Entry Total, and an Information Table (continued...) ======END OF PAGE 14====== annual burden of 4 hours (one additional burden hour per quarter) for each of the 50 managers re-submitting information previously filed. The total annual burden for all managers is estimated at 177,894 hours. The estimate of average burden hours is made solely for the purposes of the Paperwork Reduction Act and is based on the Commission's experience with similar filings and discussions with a few registrants. Unless a currently valid OMB control number is displayed, an agency may not sponsor or conduct or require response to an information collection. The OMB control number for Form 13F is 3235-0006. The Form 13F contains no separate retention period rule for recordkeeping requirements but is subject to the general recordkeeping requirements under Regulation S-T and the Exchange Act rules. It is mandatory for each institutional investment manager subject to the rule to file Form 13F. Section 13(f)(3) of the Exchange Act<(32)> authorizes the Commission, as it determines necessary or appropriate in the public interest or for the protection of investors, to delay or prevent public disclosure of any information filed under Section 13(f) upon request. It also prohibits the Commission from disclosing to the public information identifying securities held by the account of a natural person or any estate or trust (other than a business trust or investment company). Pursuant to 44 U.S.C. Section 3506(c)(2)(B), the Commission solicits comments to (i) evaluate whether the proposed collection of information is <(31)>(...continued) Value Total. <(32)> 15 U.S.C. 78m(f)(3). ======END OF PAGE 15====== necessary for the proper performance of the functions of the agency, including whether the information has practical utility; (ii) evaluate the accuracy of the agency's estimate of the burden of the proposed collections of information; (iii) enhance the quality, utility, and clarity of the information to be collected; and (iv) minimize the burden of collection of information on those who are to respond, including through the use of automated collection techniques or other forms of information technology. Persons desiring to submit comments on the collection of information requirements should direct them to the Office of Management and Budget, Attention: Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Washington, D.C. 20503, and should also send a copy of their comments to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 with reference to File No. 270-22. OMB is required to make a decision concerning the collections of information between thirty and sixty days after publication, so a comment to OMB is best assured of having its full effect if OMB receives it within thirty days of publication. VI. STATUTORY BASIS The foregoing amendments are proposed pursuant to Sections 3, 12, 13, 14, 15(d), 23(a) and 35A of the Exchange Act. List of Subjects in 17 CFR Parts 232, 240, and 249 Confidential business information, Reporting and recordkeeping requirements, Securities. TEXT OF THE PROPOSED AMENDMENTS In accordance with the foregoing, Title 17, Chapter II of the Code of Federal Regulations is proposed to be amended as follows: ======END OF PAGE 16====== ======END OF PAGE 17====== PART 232 -- REGULATION S-T -- GENERAL RULES AND REGULATIONS FOR ELECTRONIC FILINGS 1. The authority citation for Part 232 continues to read as follows: Authority: 15 U.S.C 77f, 77g, 77h, 77j, 77s(a), 77sss(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll(d), 79t(a), 80a-8, 80a-29, 80a-30 and 80a-37. 2. By amending 232.101 by revising paragraph (a)(1)(iii) and by removing paragraph (b)(7) and redesignating paragraph (b)(8) as (b)(7), to read as follows: 232.101 Mandated electronic submissions and exceptions. (a) Mandated electronic submissions. (1) * * * (iii) Statements, reports and schedules filed with the Commission pursuant to Sections 13, 14, or 15(d) of the Exchange Act (15 U.S.C. 78m, n, and o(d)), provided that if a registrant's first mandated electronic filing would be an annual report on Form 10-K (249.310 of this chapter) or Form 10-KSB (249.310b of this chapter) such annual report may, at the option of the registrant, be submitted in paper format; * * * * * PART 240 -- GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 1934 3. The authority citation for Part 240 continues to read in part as follows: Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78f, 78i, 78j, 78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 78w, 78x, 78ll(d), 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4 and 80b-11, unless otherwise noted. * * * * * ======END OF PAGE 18====== 4. By amending 240.13f-1 by redesignating paragraph (a) as paragraph (a)(1) and by adding paragraph (a)(2) to read as follows: 240.13f-1 Reporting by institutional investment managers of information with respect to accounts over which they exercise investment discretion. (a)(1) * * * (2) An amendment to a Form 13F (249.325 of this chapter) report, other than one reporting only holdings that were not previously reported in a public filing for the same period, must set forth the complete text of the Form 13F. Amendments must be numbered sequentially. * * * * * 5. Section 240.13f-2 is removed. PART 249 -- FORMS, SECURITIES EXCHANGE ACT OF 1934 6. The authority citation for Part 249 continues to read, in part, as follows: Authority: 15 U.S.C. 78a, et. seq., unless otherwise noted; Note -- The text of the following forms does not and the amendments will not appear in the Code of Federal Regulations. 7. By revising Form 13F (referenced in 249.325), to read as follows: [Proposed Form 13F, as revised, is included on the Commission's Website as a separate document, the reference to which is located with the reference to this release.] 9. Section 249.326 and Form 13F-E are removed. ======END OF PAGE 19====== By the Commission. Jonathan G. Katz Secretary Dated: July 1, 1997 ======END OF PAGE 20====== APPENDIX A -- This appendix to the preamble will not appear in the Code of Federal Regulations. Regulatory Flexibility Act Certification I, Arthur Levitt, Chairman of the Securities and Exchange Commission, hereby certify, pursuant to 5 U.S.C. 605(b), that the proposed amendments to Rules 101 and 903 of Regulation S-T, and Rule 13f-1 and Form 13F under the Securities Exchange Act of 1934 (the "Exchange Act"), and the elimination of Rule 13f-2 and Form 13F-E under the Exchange Act, as set forth in Exchange Act Release Number 38800, if adopted, would not have a significant economic impact on a substantial number of small entities. The proposed rule amendments generally would not have a significant economic impact on small entities. Institutional investment managers are not subject to reporting unless their holdings are in aggregate at least $100,000,000, so few if any small entities within the definition contained in rule 0-10 under the Exchange Act are affected by the form or rules amendments, and few if any small entities are otherwise affected by the proposed amendments. _____________________ Arthur Levitt June 30, 1997