SUMMARY OF COMMENTS
Relating to Proposed Amendments to
Accelerate Periodic Report Filing Dates and
Disclosure Concerning Website Access to Reports

Securities Act Release No. 8089
File No. S7-08-02

July 1, 2002

Prepared by:
Jeffrey J. Minton
Special Counsel
Office of Rulemaking
Division of Corporation Finance

TABLE OF CONTENTS

1. List of Commenters (305 total)

2. Overview

3. Comments on Accelerating Periodic Report Filing Dates

   1. General Comments

   2. Proposal: Acceleration of Periodic Report Due Dates

      1. Proposal: Annual Reports from 90 Days to 60 Days

      2. Proposal: Quarterly Reports from 45 Days to 30 Days

      3. Proposal: Transition Reports

      4. Request for Comment: Effect of Accelerating Disclosure to Investors

      5. Request for Comment: Effect on Reliability and Accuracy

      6. Request for Comment: Effects of Technology on Reporting

      7. Request for Comment: Anticipated Problems

      8. Request for Comment: Effect on Number of Late Filings

      9. Request for Comment: Linking Deadlines to Earnings Releases

      10. Request for Comment: Filing Information in Stages

      11. Request for Comment: Whether a Company's Audit is Complete or Substantially Complete by the Earnings Release

      12. Request for Comment: Process in Preparing Periodic Reports

      13. Request for Comment: Costs of the Proposal

      14. Request for Comment: Conforming Revisions

          1. 120-Day Period to File Form 10-K Part III Information in Definitive Proxy or Information Statements

          2. Schedules Required by Article 12 of Regulation S-X

          3. Timeliness Requirements in Other Commission Filings

          4. Item 7 of Form 8-K

          5. Rule 3-09 of Regulation S-X

   3. Proposal: Definition of Accelerated Filer

      1. General Comments

      2. Proposal: Public Float Requirement

      3. Proposal: Reporting History Requirement

      4. Request for Comment: Effect on Smaller Companies

      5. Request for Comment: Effect on Different Industries

      6. Request for Comment: Proposed Exclusion of Foreign Issuers

      7. Request for Comment: Entering or Exiting Accelerated Filer Status

   4. Transition Period

4. Comments on Disclosure Concerning Website Access to Reports

   1. General Comments

   2. Proposal: Disclosure Regarding Website Access to Reports

   3. Proposal: Disclosure Regarding Why a Company Does Not Post Reports

   4. Proposal: Disclosure of Company Internet Address

   5. Proposal: Disclosure of Where Else Investors Can Access Reports

   6. Request for Comment: Costs of the Proposal

   7. Request for Comment: Whether the Disclosure Should be in Other Filings

   8. Request for Comment: Whether the Disclosure Should Cover Website Access to All Company Filings

   9. Request for Comment: Proposed Exclusion of Smaller Issuers

   10. Request for Comment: Proposed Exclusion of Foreign Issuers

   11. Eliminating the 24-hour Delay For the Commission's EDGAR Website

   12. Transition Period

5. Paperwork Reduction Act

6. Other Issues Raised by Commenters

I. List of Commenters (305 total)

a)	Academics
	1.	Paul A. Griffin, Associate Dean, Graduate School of Management, University of California, Davis		(Griffin)
	2.	Joseph A. Grundfest, William A. Franke Professor of Law and Business, Stanford Law School, et al.1		(Grundfest)
	3.	Marc I. Steinberg, Radford Professor of Law, Southern Methodist University School of Law		(Steinberg)
b)	Accountants and Accounting Firms
	1.	AJ. Robbins, PC		(Robbins)
	2.	BDO Seidman, LLP		(BDO)
	3.	Berry, Dunn, McNeil & Parker		(BDMP)
	4.	Crowe, Chizek and Company LLP		(Crowe)
	5.	Deloitte & Touche LLP		(Deloitte)
	6.	Ernst & Young LLP		(E&Y)
	7.	Al Goll, CPA		(Goll)
	8.	Grant Thornton LLP		(Grant Thornton)
	9.	Daniel R. Janet, CPA		(Janet)
	10.	KPMG LLP		(KPMG)
	11.	PricewaterhouseCoopers LLP		(PWC)
	12.	Michel B. Smith, CPA		(Smith)
c)	Corporations and Corporate Executives
	1.	A. O. Smith Corporation		(AOS)
	2.	Abbott Laboratories		(Abbott Laboratories)
	3.	AFLAC Incorporated		(AFLAC)
	4.	Air Products and Chemicals, Inc.		(Air Products)
	5.	Allegheny Energy, Inc.		(Allegheny)
	6.	The Allstate Corporation		(Allstate)
	7.	Amerada Hess Corporation		(Amerada)
	8.	American Electric Power		(AEP)
	9.	American Financial Group, Inc.		(AFG)
	10.	American International Group, Inc.		(AIG)
	11.	American Safety Insurance Group, Ltd.		(Am. Safety)
	12.	Anchor BanCorp Wisconsin, Inc.		(Anchor)
	13.	AOL Time Warner Inc.		(AOL)
	14.	Armstrong World Industries, Inc.		(Armstrong)
	15.	Arris Group, Inc.		(Arris)
	16.	Ashland Inc.		(Ashland)
	17.	Associated Banc-Corp		(Associated)
	18.	Astoria Financial Corporation		(Astoria)
	19.	AT&T Corp.		(AT&T)
	20.	Aztar Corporation		(Aztar)
	21.	Baldwin & Lyons, Inc.		(Baldwin)
	22.	Bank of America Corporation		(Bank of America)
	23.	The Bank of New York Company, Inc.		(BONY)
	24.	Bradley J. Bartells, Senior Accountant/Finance, Centennial First Financial Services, Redlands Centennial Bank		(Bartells)
	25.	Frederick G. Beisser, Vice President - Finance and Administration, Integrated Spatial Information Solutions, Inc.		(Beisser)
	26.	BioReliance Corporation		(BioReliance)
	27.	Bowater Incorporated		(Bowater)
	28.	Brown-Forman Corporation		(Brown)
	29.	Cabot Corporation		(Cabot)
	30.	Capital One Financial Corporation		(Capital One)
	31.	Capitol Federal Financial		(Capitol Federal)
	32.	Caremark Rx, Inc.		(Caremark)
	33.	Cendant Corporation		(Cendant)
	34.	CH Energy Group, Inc.		(CH Energy)
	35.	Charles Schwab & Co., Inc.		(Schwab)
	36.	Chevron Phillips Chemical Company LLP		(Chevron Phillips)
	37.	ChevronTexaco Corporation		(ChevronTexaco)
	38.	J.D. Choi, President and CEO, Tax Technologies, Inc.		(Choi)
	39.	The Chubb Corporation		(Chubb)
	40.	CIGNA Corporation		(Cigna)
	41.	Cincinnati Financial Corporation		(CFC)
	42.	Cinergy Corp.		(Cinergy)
	43.	Clancy Systems International, Inc.		(Clancy)
	44.	CNA Financial Corporation		(CNA Financial)
	45.	CNA Surety Corporation		(CNA Surety)
	46.	The Coca-Cola Company		(Coca-Cola)
	47.	Comcast Corporation		(Comcast)
	48.	Commercial Federal Corporation		(Commercial)
	49.	Community Bankshares, Inc.		(Community Bankshares)
	50.	Community Health Systems, Inc.		(CHS)
	51.	Compass Bancshares, Inc.		(Compass)
	52.	Computer Sciences Corporation		(Computer Sciences)
	53.	Concurrent Computer Corporation		(Concurrent)
	54.	Constellation Energy Group, Inc.		(Constellation)
	55.	The Conway National Bank		(Conway)
	56.	Corning Incorporated		(Corning)
	57.	Crawford & Company		(Crawford)
	58.	Crescent Real Estate Equities Company		(Crescent)
	59.	CRI, Inc.		(CRI)
	60.	Cross Country, Inc.		(Cross Country)
	61.	CSX Corporation		(CSX)
	62.	The Davey Tree Expert Company		(Davey)
	63.	Dean Foods Company		(Dean)
	64.	Dell Computer Corporation		(Dell)
	65.	Delphi Corporation		(Delphi)
	66.	John Detwiler, Senior Vice President and CFO, Credence Systems Corporation		(Detwiler)
	67.	The Dial Corporation		(Dial)
	68.	Diamond Offshore Drilling, Inc.		(Diamond)
	69.	Dollar Tree Stores, Inc.		(Dollar)
	70.	Dorchester Hugoton, Ltd.		(Dorchester)
	71.	The Dow Chemical Company		(Dow)
	72.	Eastman Kodak Company		(Kodak)
	73.	EDGAR Online, Inc.		(EDGAR Online)
	74.	Electronics for Imaging, Inc.
		a.	Gerald Graves, Corporate Controller	(Electronics for Imaging - Graves)
		b.	Cyndi Miller, Financial Reporting Manager	(Electronics for Imaging - Miller)
		c.	John Ritchie, Vice President of Finance	(Electronics for Imaging - Ritchie)
	75.	Eli Lilly and Company		(Eli Lilly)
	76.	Emerson Electric Co.		(Emerson)
	77.	Audit and Conflicts Committee of Enterprise Products GP, LLC		(Enterprise)
	78.	First Capital Bank Holding Corporation		(First Capital)
	79.	First Mutual Bancshares, Inc.
		a.	Phyllis Easterlin, Corporate Secretary	(First Mutual - Easterlin)
		b.	Roger A. Mandery, Chief Financial Officer	(First Mutual - Mandery)
		c.	Kari Stenslie, Vice President and Controller	(First Mutual - Stenslie)
		d.	John R. Valaas, President and CEO	(First Mutual - Valaas)
	80.	First Tennessee National Corporation		(First Tennessee)
	81.	FirstEnergy Corp.		(FirstEnergy)
	82.	Forest City Enterprises, Inc.		(Forest City)
	83.	FPL Group, Inc.		(FPL)
	84.	Greg Gibson, Chief Financial Officer, MountainBank Financial Corporation		(Gibson)
	85.	Global Preferred Holdings, Inc.		(Global Preferred)
	86.	Global Securities Information, Inc.		(GSI)
	87.	GrandSouth Bancorporation		(GrandSouth)
	88.	Great American Financial Resources, Inc.		(GAFRI)
	89.	The Great Atlantic & Pacific Tea Company, Inc.		(A&P)
	90.	Great Plains Energy Incorporated		(Great Plains)
	91.	H&R Block, Inc.		(H&R Block)
	92.	Halliburton Company		(Halliburton)
	93.	Julia A. Harper, Chief Financial Officer, Radisys Corporation		(Harper)
	94.	Harrah's Entertainment, Inc.		(Harrah's)
	95.	HealthSouth Corporation		(HealthSouth)
	96.	Heritage Bank		(Heritage Bank)
	97.	Heritage Financial Corporation		(Heritage Financial)
	98.	Hibernia Corporation		(Hibernia)
	99.	Horizon PCS, Inc.		(Horizon)
	100.	Leann L. Hubbard, Financial Analyst FirstBank Northwest		(Hubbard)
	101.	James E. Hurlbutt, Vice President and Corporate Controller, Stepan Company		(Hurlbutt)
	102.	IMC Global, Inc.		(IMC)
	103.	Imperial Oil Limited		(Imperial)
	104.	Infonet Services Corporation		(Infonet)
	105.	Intel Corporation		(Intel)
	106.	International Bancshares Corporation		(IBC)
	107.	International Lease Finance Corporation		(ILFC)
	108.	Iomega Corporation		(Iomega)
	109.	Jacobs Engineering Group, Inc.		(Jacobs)
	110.	J.C. Penney Company, Inc.		(JC Penney)
	111.	J.D. Edwards & Company		(JD Edwards)
	112.	Jefferson-Pilot Corporation		(Jefferson)
	113.	J.P. Morgan Chase & Co.		(JPMorgan Chase)
	114.	Kellogg Company		(Kellogg)
	115.	Kerr-McGee Corporation		(Kerr)
	116.	Kimball International, Inc.		(Kimball)
	117.	Robert Krakauer, Senior Vice President and CFO, ChipPAC Incorporated		(Krakauer)
	118.	Lamar Advertising Company		(Lamar)
	119.	Fredric A. Lawrence, Vice President of Finance and Administration (CFO), Advanced Solutions International, Inc.		(Lawrence)
	120.	Liberty Media Corporation		(Liberty Media)
	121.	Loews Corporation		(Loews)
	122.	M&T Bank Corporation		(M&T)
	123.	MacDermid, Incorporated		(MacDermid)
	124.	Markel Corporation		(Markel)
	125.	Marathon Oil Corporation		(Marathon)
	126.	Massey Energy Company		(Massey)
	127.	Michael D. McDonald, Vice President and CFO, Integrated Silicon Solution, Inc.		(Michael McDonald)
	128.	McDonald's, Inc.		(McDonald's)
	129.	MDU Resources, Inc.		(MDU)
	130.	MedImmune, Inc.		(MedImmune)
	131.	Mellon Financial Corporation		(Mellon)
	132.	Stephen Melvin, Chief Financial Officer, The Princeton Review, Inc.		(Melvin)
	133.	Merchants and Marine Bank		(M&M)
	134.	Merck & Co., Inc.		(Merck)
	135.	Mercury General Corporation		(Mercury)
	136.	Merrill Lynch & Co., Inc.		(Merrill Lynch)
	137.	Microsoft Corporation		(Microsoft)
	138.	Mid Atlantic Medical Services, Inc.		(MAMSI)
	139.	Monsanto Company		(Monsanto)
	140.	Navistar International Corporation		(Navistar)
	141.	NeoMagic Corporation		(NeoMagic)
	142.	Nortel Networks Corporation		(Nortel)
	143.	Northern Border Partners, L.P.		(Northern Border)
	144.	Nucor Corporation		(Nucor)
	145.	NUI Corporation		(NUI)
	146.	PACCAR Inc.		(Paccar)
	147.	Papa John's International, Inc.		(Papa John's)
	148.	Parametric Technology Corporation		(PTC)
	149.	Parexel International Corporation		(Parexel)
	150.	The Pepsi Bottling Group		(Pepsi Bottling)
	151.	PepsiCo, Inc.		(PepsiCo)
	152.	Perma-Fix Environmental Services, Inc.		(Perma-Fix)
	153.	Pfizer Inc.		(Pfizer)
	154.	PG&E Corporation		(PG&E)
	155.	Pharmacia Corporation		(Pharmacia)
	156.	Phillips Petroleum Company		(Phillips)
	157.	Pinnacle West Capital Corporation		(Pinnacle)
	158.	PPL Corporation		(PPL)
	159.	PRIMEDIA Inc.		(Primedia)
	160.	Principal Financial Group, Inc.		(Principal)
	161.	Progress Energy, Inc.		(Progress)
	162.	Provident Financial Group, Inc.		(Provident)
	163.	Robert A. Reed, Vice President, Secretary & Associate General Counsel, Jefferson-Pilot Corporation		(Robert Reed)
	164.	Republic Services, Inc.		(Republic)
	165.	Rock of Ages Corporation		(Rock)
	166.	The Rouse Company		(Rouse)
	167.	SAES Getters S.p.A.		(SAES)
	168.	SBC Communications Inc.		(SBC)
	169.	SCANA Corporation		(Scana)
	170.	Scholastic Inc.		(Scholastic)
	171.	Sempra Energy		(Sempra)
	172.	Service Corporation International		(SCI)
	173.	Siebel Systems, Inc.		(Siebel)
	174.	Sinclair Broadcast Group, Inc.		(Sinclair)
	175.	Somanetics Corporation		(Somanetics)
	176.	Sotheby's Holdings, Inc.		(Sotheby's)
	177.	The Southern Company		(Southern Co)
	178.	Southern Union Company		(Southern Union)
	179.	Sovereign Bancorp		(Sovereign)
	180.	Spherix, Inc.		(Spherix)
	181.	Standard Pacific Corp.		(Standard)
	182.	StarTek, Inc.		(StarTek)
	183.	Stewart Information Services Corporation		(Stewart)
	184.	Storage Technology Corporation		(Storagetek)
	185.	Ronald S. Stowell, Vice President, Chief Financial Officer & Treasurer, LSI Industries, Inc.		(Stowell)
	186.	SunTrust Banks, Inc.		(SunTrust)
	187.	TechBooks Financial		(TechBooks)
	188.	Technitrol, Inc.		(Technitrol)
	189.	TETRA Technologies, Inc.		(Tetra)
	190.	The Toro Company		(Toro)
	191.	Toys R Us, Inc.		(Toys R Us)
	192.	Triarc Companies, Inc.		(Triarc)
	193.	TriQuint Semiconductor, Inc.		(TriQuint)
	194.	Trover Solutions, Inc.		(Trover)
	195.	TXU Corp.		(TXU)
	196.	UbiquiTel, Inc.		(Ubiquitel)
	197.	Union Planters Corporation		(Union Planters)
	198.	UnionBanCal Corporation		(UnionBanCal)
	199.	UniSource Energy Corporation		(UniSource)
	200.	United States Steel Corporation		(USS)
	201.	United Technologies Corporation		(United Tech)
	202.	UnumProvident Corporation		(UnumProvident)
	203.	U.S. Bancorp		(USB)
	204.	UST Inc.		(UST)
	205.	US Unwired Inc.		(US Unwired)
	206.	V. I. Technologies, Inc.		(VI Tech)
	207.	Valero Energy Corporation		(Valero)
	208.	Valmont Industries, Inc.		(Valmont)
	209.	Veritas Software Corporation		(Veritas)
	210.	Donald E. Vick, Controller, LanVision Systems, Inc.		(Vick)
	211.	Washington Mutual, Inc.		(Washington Mutual)
	212.	Weatherford International, Inc.		(Weatherford)
	213.	Robert S. Weiss, Executive Vice President and Chief Financial Officer, The Cooper Companies, Inc.		(Weiss)
	214.	Wells Fargo & Company		(Wells Fargo)
	215.	Western Wireless Corporation		(Western)
	216.	Wild Oats Markets, Inc.		(Wild Oats)
	217.	The Williams Companies, Inc.		(Williams)
	218.	XTO Energy Inc.		(XTO)
	219.	Zygo Corporation		(Zygo)
d)	Attorneys and Law Firms
	1.	Adrienne Randle Bond, Hughes, Watters & Askanase, L.L.P.		(Bond)
	2.	Cleary, Gottlieb, Steen & Hamilton		(Cleary)
	3.	Clifford Chance Rogers & Wells LLP		(Clifford Chance)
	4.	Dechert		(Dechert)
	5.	Foley, Hoag & Eliot LLP		(Foley)
	6.	Greenberg Traurig, P.A.		(Greenberg)
	7.	Jones & Keller, P.C.		(Jones)
	8.	LeBoeuf, Lamb, Green & MacRae		(LeBoeuf)
	9.	Locke Liddell & Sapp LLP		(Locke)
	10.	Long Aldridge & Norman LLP		(Long)
	11.	Simon M. Lorne, Munger, Tolles & Olson LLP		(Lorne)
	12.	McGuireWoods LLP		(McGuireWoods)
	13.	James G. McMillan, Hogan & Hartson LLP		(McMillan)
	14.	Helen W. Melman		(Melman)
	15.	Perkins Coie LLP		(Perkins)
	16.	Ptiney, Hardin, Kipp & Szuch LLP		(Pitney)
	17.	Patrick A. Reardon		(Patrick Reardon)
	18.	Roxanne Reardon, Simpson Thacher & Bartlett		(Roxanne Reardon)
	19.	Reed Smith LLP		(Reed Smith)
	20.	Shearman & Sterling		(Shearman)
	21.	Sidley Austin Brown & Wood LLP		(Sidley)
	22.	Sullivan & Cromwell		(S&C)
	23.	Thacher Profitt & Wood		(Thacher)
	24.	Troutman Sanders LLP		(Troutman)
	25.	Wyrick Robbins Yates & Ponton LLP		(Wyrick)
e)	Pension Funds, Institutional Investors, Institutional Investor Associations, Investor Relations Professionals and Financial Analysts
	1.	Alex. Brown Investment Management L.P.		(Alex. Brown)
	2.	American Federal of Labor and Congress of Industrial Organizations		(AFL-CIO)
	3.	Citigate Dewe Rogerson		(CDR)
	4.	Jack T. Ciesielski, President, R.G. Associates, Inc.		(Ciesielski)
	5.	Jason Cook, Investor Relations Executive, Mindshare Communications, Inc.		(Cook)
	6.	Corporate Communications Broadcast Network		(CCBN)
	7.	Council of Institutional Investors		(CII)
	8.	Fidelity Management & Research Company		(Fidelity)
	9.	Investment Company Institute		(ICI)
	10.	Maverick Capital Ltd.		(Maverick)
	11.	SNL Financial LC		(SNL)
	12.	Teachers Insurance and Annuity Association of America - College Retirement and Equities Fund		(TIAA-CREF)
	13.	T. Rowe Price Associates, Inc.		(T. Rowe Price)
f)	Professional Associations
	1.	American Bankers Association		(Am. Bankers. Assoc.)
	2.	American Bar Association		(ABA)
	3.	American Corporate Counsel Association		(ACCA)
	4.	American Council of Life Insurers		(ACLI)
	5.	American Institute of Certified Public Accountants		(AICPA)
	6.	American Insurance Association		(AIA)
	7.	American Society of Corporate Secretaries, Inc.		(ASCS)
	8.	Association for Financial Professionals		(AFP)
	9.	Association for Investment Management and Research		(AIMR)
	10.	The Association of the Bar of the City of New York		(NYCBA)
	11.	The Business Roundtable		(BRT)
	12.	Edison Electric Institute		(EEI)
	13.	Financial Executives Institute		(FEI)
	14.	Financial Institutions Accounting Committee		(FIAC)
	15.	Institute of Management Accountants		(IMA)
	16.	National Association of Real Estate Companies		(NAREC)
	17.	National Association of Real Estate Investment Trusts		(NAREIT)
	18.	National Investor Relations Institute		(NIRI)
	19.	New York State Bar Association		(NYSBA)
	20.	Securities Industry Association		(SIA)
g)	Individuals
	1.	David M. Abbott, Jr.		(David Abbott)
	2.	William H. Bennett		(Bennett)
	3.	Michael R. Bertram		(Bertram)
	4.	Robert M. Flora		(Flora)
	5.	Scott H. Schulke		(Schulke)
	6.	Gill Timpson		(Timpson)
	7.	Greg Vlasek		(Vlasek)
	8.	Kathryn J. Wilson		(Wilson)

II. Overview

We received responses from 305 commenters. 302 commenters referred to the acceleration of periodic report deadlines. Generally, these commenters fell into two categories. The first group (20 commenters) was submitted by commenters representing primarily investors, institutional investors and financial analysts who concurred with the proposals and our objective to provide investors with more timely access to company filings. The second, and much larger, group (282 commenters) was submitted by commenters representing primarily companies, business associations, law firms and accounting firms who opposed the extent of acceleration and transition period proposed because, in their view, preparing reports in the proposed timeframe would be too burdensome and could result in less accurate filings. Most of these commenters believed that any incremental benefit from the proposed deadlines is insufficient to warrant the added burdens on registrants and the risk of diminished disclosure quality.

The most frequent concerns of those objecting to the proposal were:

• The proposed deadlines would negatively affect the quality and accuracy of reports. Many commenters who opposed the proposals thought the proposals were contrary to other initiatives that the Commission has undertaken to increase the quantity and quality of company disclosure. Many commenters believed focusing on and improving accuracy and quality should be the objective, not speed. See Section III.B.5.

• The proposed deadlines would impair the ability of management, external auditors, boards of directors and particularly audit committees to scrutinize and review filings properly and give appropriate consideration to the form, substance and priority of disclosures, particularly for MD&A and financial statement footnotes. Disclosures could be reduced or become more boilerplate if companies have less time to prepare and review them. See Section III.B.5.

• Advances in technology over the past 30 years have been largely offset by increases in accounting and disclosure requirements and business complexity. Also, technological advances that have allowed companies to generate earnings information quickly for an earnings release do not replace the more analytical thought and analysis necessary to prepare the periodic reports. See Section III.B.6.

• Companies would face an increased burden in preparing reports, particularly with respect to increased costs and audit fees. See Sections III.B.7 and III.B.13.

Slightly less than half of those objecting to the proposals (129 commenters) did not think any acceleration was warranted. However, slightly more than half of those objecting (153 commenters) objected because they believed the Commission was too aggressive in its proposal. Many of these commenters generally supported the Commission's objective to provide investors with more timely access to company information and offered alternatives to reduce the potential costs and burden to registrants and the impact on disclosure quality. These alternatives fell roughly into three categories:

• Accelerating the deadlines by a lesser amount (e.g., 75 days for the annual report or 40 days for the quarterly report) or accelerating only the annual report. In this regard, while commenters were mixed, more commenters believed it would be more difficult to accelerate the quarterly report than the annual report. See Sections III.B.1 and III.B.2.

• A more gradual phase-in or transition period than that proposed (e.g., reducing deadlines by a set number of days per year over several years or a delay before the proposals would take effect). See Section III.D.

• Linking the deadline for filing reports to a company's public announcement of earnings (e.g., the earlier of the existing deadlines or some period of time after the earnings release). See Section III.B.9.

Many commenters outlined their process of preparing reports to demonstrate the difficulties of accelerating the process. Several commenters provided detailed timelines. The particular steps and timing varied depending on the company, and not all companies appear to be at the same level of technological sophistication and staffing for preparing reports. See Section III.B.11.

While the proposals did not directly address earnings releases, 50 commenters supported additional efforts by the Commission in this area. 25 of these commenters recommended that earnings or other standardized earnings information be filed with the Commission, such as on Form 8-K. 28 commenters thought the Commission should consider issuing or promoting minimum requirements or guidelines for the contents of earnings releases, such as a reconciliation to generally accepted accounting principles. See Section VI.

141 commenters referred to the proposals for disclosure concerning website access to company filings. 60 supported the proposals and concurred with our objective to provide investors with information on where they can access company reports. 40 commenters also concurred with our objective but offered modifications to the proposal, such as additional time to post the reports on a company's website or suggesting that a permanent statement on a web page referring to EDGAR or a standing hyperlink to EDGAR should suffice. 20 other commenters offered suggestions to modify the proposal. 21 commenters questioned the utility of the proposal, especially considering the existence of Commission's EDGAR website and the Commission's recent announcement that its website now provides real-time access to filings. See Section IV.

The responses are discussed in more detail below.

III. Comments on Accelerating Periodic Report Filing Dates

A. General Comments

Commenters generally supporting proposal (20):²

• One institutional investor association noted that the need to improve the flow of information to investors is critical to maintaining the free flow of funds.³ The association's surveyed members were not concerned that shortening deadlines would lead to a decrease in quality or a delay in earnings announcements.

• One professional association noted that today's environment, replete with forecasts, earnings releases and media "sound bites," leads investors to believe they have sufficient information on which to make informed investment decisions.⁴ In actuality, much of the information provided may be misleading, or at the very least incomplete. At a time when investor confidence regarding the reliability of information is being questioned, it is essential that investors and other market participants are provided with more information on a timely basis. Shortening the information gap between earnings releases and filing dates will reduce market volatility and provide investors with reliable information on a more timely basis. The proposed filing dates should provide affected companies with sufficient time to prepare their reports, without undue hardship or significant additional costs.

• Two commenters (one company and one investor organization) agreed that shorter deadlines will improve the delivery of information to investors and capital markets, assist in the efficient operation of markets and still allow companies and their management adequate time to prepare and review their reports.⁵

• One institutional investor stated that markets can only be efficient if there is sufficient information available in a timely fashion.⁶ There should not be a significant delay between the earnings announcement and filing dates. Also, as a reporting entity, the commenter did not anticipate any difficulty or significant costs as a result of the proposed deadlines.

• One company agreed that financial information used in making decisions is most useful when the information is made available in a timely manner, and the Commission's proposal moves the reporting process in the right direction.⁷

• One individual believed that accelerating deadlines is vital to promoting the integrity of the financial markets and believed the proposals were long overdue.⁸

• One institutional investor noted that all too frequently companies report earnings with limited detail and investors discover weeks later, through a Commission filing, that the company hid a one-time gain.⁹ Stocks move based on these disclosures.

• Another company believed that much confusion is caused in the market place by the common practice of issuing press releases containing selected earnings information in advance of annual and quarterly reports, and often the financials in the press release do not match the financials in the report.¹⁰ Disclosures need to be made in a timely fashion, they must be electronic in order to be of value to the public, they should be required to be filed on EDGAR and the requirements should apply equally to all public companies regardless of their size.

• One institutional investor association applauded the Commission's efforts and believed the proposal would be at least partially responsible to the information gap that frequently exists between the release of earnings announcements and the filing of periodic reports.¹¹ The commenter believed there may also be more effective ways to respond to this concern, such as to require earnings announcements to be filed on Form 8-K and include a GAAP reconciliation.

• One institutional investor urged the Commission to adopt the shortened reporting deadlines if it is able to conclude there is little likelihood that such deadlines will pose an appreciable risk to the quality of disclosure and financial reporting.¹²

Commenters opposing acceleration in general (129):¹³

• Many commenters who opposed the proposal thought the proposed deadlines would negatively affect the quality and accuracy of reports. See Section III.B.5.

• Many commenters who opposed the proposal thought the proposed deadlines would impair the ability of management, external auditors, boards of directors and particularly audit committees to scrutinize and review filings properly and give appropriate consideration to the form, substance and priority of disclosures, particularly for MD&A and financial statement footnotes. See Section III.B.5.

• Many commenters who opposed the proposal thought that advances in technology over the past 30 years have been largely offset by increases in accounting and disclosure requirements and business complexity. See Section III.B.6.

• Many companies who opposed the proposal thought companies would face an increased burden in preparing reports, particularly with respect to increased costs and audit fees. See Sections III.B.7 and III.B.13.

• Fifty-eight commenters (one accounting firm, one audit committee, eight corporate executives, forty-three companies, one individual, three law firms and one professional association) opposed the proposed deadlines because they believed existing deadlines are needed to complete the forms.¹⁴

• Ten commenters (five companies, two law firms and three professional associations) noted that the comments that opposed acceleration in response to the Commission's 1998 request for comment are still valid today, if not more so.¹⁵ Shortening the deadlines as proposed would impose onerous burdens on issuers, including large seasoned issuers, without commensurate improvements in the quality and utility of information to investors.

• One accounting firm believed that the proposal aims to fix a current regimen of reporting deadlines that, at best, is not broken, and at worst, is not a pressing problem.¹⁶ The proposal is also too reliant on anecdotal (rather than empirically-determined) information about the nature of pre-filing preparatory activities, the duration of time necessary to accomplish them and the different circumstances and experiences among registrants. The Commission should allow market forces, rather than regulations, to govern the promptness of disclosures, except perhaps by linking deadlines to earnings releases.

• One company thought that if the Commission plans to increase the liability of senior executives for inaccuracies in reports, then it is inequitable to shorten filing deadlines as well.¹⁷

• One company, in referring to the Commission's roundtable discussions on accelerating deadlines, believed the opinions would have been significantly different if they had been obtained from individuals actually responsible for preparing the reports and those responsible for auditing the results.¹⁸

Commenters suggesting general modifications or alternatives to the proposal (153):¹⁹

• Several commenters recommended a longer phase-in or transition period. See Section III.D. In this regard, one business association that surveyed its members noted that while almost every respondent thought more time would be better than less time, the majority of the respondents were of the view that it would be possible to meet the proposed deadlines if an adequate transition period were provided.²⁰

• Several commenters recommended linking deadlines to a company's public announcement of earnings in lieu of shortening the deadlines as proposed. See Section III.B.9.

• One law firm suggested that the Commission should conduct an empirical study to determine whether processes used to prepare reports are reasonably susceptible to across-the-board acceleration, even among large issuers, and if so, to what degree.²¹ The Commission's Office of Economic Analysis should develop a questionnaire for registrants that specifically asks about audit and other processes needed to prepare reports.

• Two commenters believed the Commission should consider instituting a "best practices" program of early filing instead of making accelerated filing mandatory.²²

• Two commenters (one company and one corporate executive) thought shortening deadlines might be more feasible if disclosure requirements were reduced.²³

• Sixty-five commenters believed increasing quality should be the focus over speed.²⁴ Specific alternatives included:

  • Eighteen commenters believed that the Commission should utilize Form 8-K or other methods of current reporting for the timely disclosure of material information.²⁵ Eleven of these commenters favored expanding the mandatory disclosure requirements in Form 8-K over accelerated periodic report deadlines.²⁶

  • Several commenters favored stricter guidelines or requirements on the content of earnings releases as preferable to shortening deadlines as proposed. See Section VI. for a description of these suggestions.

  • Two commenters believed the Commission should create restrictions on non-audit services.²⁷ One of these commenters also thought the Commission should work with the AICPA and the FASB to make auditors more responsible for financial statements.²⁸

  • Three companies believed the focus should be on simplifying accounting rules and related disclosures so common investors can understand the information, including plain English disclosures.²⁹

  • Two commenters supported changes to corporate governance and ethics, including addressing the lack of integrity and professionalism, the need for improved communication among management, the board and audit committees and creating business environments that further support management, audit committees and independent accountant involvement.³⁰

  • Two commenters believed there should be more accountability of audit committees, audit firms and boards of directors.³¹ One of these commenters believed there should be board and audit committee qualification standards, requirements for more frequent board and audit committee involvement, meetings and powers and increased board and audit committee penalties.³²

B. Proposal: Acceleration of Periodic Report Due Dates

1. Proposal: Annual Reports from 90 Days to 60 Days

Commenters specifically supporting or not objecting to this aspect of the proposal (17):³³

• One investor relations professional thought that requiring annual reports to be filed within 60 rather than 90 days would enhance investors' ability to make informed investment decisions by narrowing the gap between the earnings release and the more extensive information in the Form 10-K.³⁴ Shortening the deadlines would not unduly burden issuers.

• One company noted it currently files its Form 10-K within the proposed timeframe and would not object to accelerating the deadlines from 90 days to 60 days.³⁵

• One company thought shortening the deadline to 60 days achieves an appropriate balance between the markets need for information with the time companies need to prepare that information without undue burden.³⁶

• Two companies believed that 60 days gives it adequate time to prepare and announce earnings, have the audit completed, meet with the audit committee to review the filing and then file it with the Commission.³⁷

• One company believed it should be able to file its annual report within 60 calendar days with some additional effort, although it expected that some companies with a December 31 year-end may have a more difficult time.³⁸

• One company thought the 60 day deadline was feasible, but it would need to hire additional staff and eliminate its "glossy" annual report.³⁹

Commenters specifically opposing this aspect of the proposal (9):⁴⁰

• Six commenters (four companies and two law firms) objecting to this aspect of the proposal believed accelerating the annual report is more difficult than accelerating quarterly reports.⁴¹

• One company noted that a number of incremental activities take place around year-end, such as budgeting, annual audit and annual evaluations. Accelerating the annual report during this busy time of year would place an undue burden on the financial staff.⁴²

• One corporate executive believed the ability of many public companies to finalize audits and then complete the annual report in 60 days is probably not practical.⁴³

• One company believed it could currently meet the proposed deadline, but believed most companies would have difficulty doing so.⁴⁴

• Another commenter thought the 60 day deadline was achievable, but preferred not changing the deadline.⁴⁵

Commenters suggesting revisions to this aspect of the proposal (59):⁴⁶

• One professional association noted that a substantial majority of the respondents to its survey felt they could adequately meet the Form 10-K deadline with a transition period of at least 18 months for calendar year-end companies.⁴⁷

• Four commenters (two companies, one law firm and one professional association) recommended shortening the deadline to 80 days instead of 60 if the Commission elected to proceed with the proposal.⁴⁸

• Forty-nine commenters (four accounting firms, thirty companies, one corporate executive, one institutional investor, four law firms, eight professional associations and one financial analyst) recommended shortening the deadline to 75 days instead of 60 if the Commission elected to proceed with the proposal.⁴⁹ One of these commenters recommended this change only after the pace and extent of new accounting and disclosure regulations normalizes.⁵⁰

• One professional association recommended shortening the deadline to 80 days, provided that companies issue an earnings release that complies with minimum standards to be recommended by the National Investor Relations Institute and Financial Executives Institute.⁵¹ Companies that chose not to follow the guidelines would have to file within 60 days.

• One professional association recommended the filing deadline be at least 70 days.⁵² The commenter noted that according to the respondents of its survey, 86% reported they could more easily meet a 70 day deadline, with 14% reporting they would save significant costs (11 respondents stated that 70 days would still not be enough time; most of these companies would prefer 75 days, some longer).

• Three companies recommended shortening the deadline to 70 days instead of 60 if the Commission elected to proceed with the proposal.⁵³ One commenter thought this change would not require additional staffing or costs.⁵⁴ One of the commenters thought 60 days would be achievable, but 70 days would provide increased flexibility.⁵⁵

2. Proposal: Quarterly Reports from 45 Days to 30 Days

Commenters specifically supporting this aspect of the proposal (4):⁵⁶

• One law firm believed that accelerating the quarterly report deadline poses no threat to quality as the report is comprised of unaudited data and management's interpretation of that data.⁵⁷

• One individual thought the proposal would give the public more timely information to base decisions.⁵⁸ The change would not have a material impact on companies because they have the information available well within 30 days.

• One investor relations professional believed that access to quarterly information is important and having it in a timely manner would help restore investor confidence.⁵⁹

• One corporate executive noted that acceleration of quarterly reports is probably almost practical.⁶⁰

Commenters specifically opposing this aspect of the proposal (45):

• Forty-five commenters (one accountant, six accounting firms, thirty-one companies, one corporate executive, three law firms, one investor relations professional and two professional associations) noted that filing within 30 days does not allow sufficient time to prepare the required disclosure and complete each necessary level of review.⁶¹ The added benefit of a 15-day reduction would not outweigh the inconvenience, difficulty and cost incurred by filers. Many of these commenters thought that the desire to provide more timely information to investors is outweighed by the risk that the resulting disclosure would be less reliable and complete. Several of these commenters feared that additional reviews or disclosures that the commenters currently provide above those required by applicable rules may need to be sacrificed if the deadlines are shortened.

Commenters suggesting revisions to this aspect of the proposal (37):⁶²

• One professional association acknowledged that many of its members have already begun the process of reviewing and modifying their procedures in an effort to file their quarterly report in 30 days.⁶³ Several of its members were able to achieve this objective for the most recent quarter-end, although some indicated that the process and procedures that were needed took a significant amount of time to develop and implement. Others have not been able to file within 30 days thus far and have indicated they will need more transition time. The commenter thought the deadline would be especially hard for smaller and medium size companies, and urged a greater transition period if the Commission proceeded.

• One professional association noted that while a majority of its surveyed members reported they could meet the proposed deadline for quarterly reports without a serious diminution in the quality of reporting, a substantial minority requested at least a 35 to 40 day timeframe in order to assure quality reporting.⁶⁴ This minority thought that filing within 30 days does not allow sufficient time to prepare and review the required disclosure. The added benefit of a 15-day reduction would not outweigh the inconvenience, difficulty and cost incurred by filers. The commenter recommended reducing the deadline to 40 days with at least a 18 month transition period, and a year later, reducing the deadline to 35 days. A shorter period was not thought possible.

• Twenty-seven commenters (eighteen companies, three law firms and six professional associations) recommended shortening the deadline to 40 days instead of 30 if the Commission elected to proceed with the proposal.⁶⁵

• One company recommended a 38-day deadline.⁶⁶

• One professional association recommended the filing period be at least 35 days.⁶⁷ The commenter noted that according to the respondents of its survey, 80% reported they could more easily meet a 35-day deadline, with 11% reporting they would save significant costs (A number of companies reported that 35 days would not be enough to avoid additional costs).

• Four commenters (three companies and one professional association) recommended shortening the deadline to 35 days instead of 30 if the Commission elected to proceed with the proposal.⁶⁸

• Another company recommended extending the deadline to 35 or 40 days.⁶⁹

• One professional association recommended shortening the deadline to 40 days, provided that companies issue an earnings release that complies with minimum standards to be recommended by the National Investor Relations Institute and Financial Executives Institute.⁷⁰ Companies that chose not to follow the guidelines would have to file within 30 days.

3. Proposal: Transition Reports

• One accounting firm that objected to shortening annual and quarterly report deadlines did not believe there were special circumstances associated with the preparation of a transition report that would make its filing any more problematic.⁷¹

• One company that objected to shortening the deadlines for annual and quarterly reports also specifically objected to shortening the deadlines for transition reports.⁷²

• One company that supported shortening deadlines for annual and quarterly reports thought it would be appropriate to reduce the deadlines for transition reports as well.⁷³

4. Request for Comment: Effect of Accelerating Disclosure to Investors

Commenters describing positive effects

• Twenty-eight commenters (one attorney, one individual, three institutional investors, one institutional investor association, one investor organization, one investor relations professional, seventeen companies and two professional associations) believed that shortening deadlines will improve the delivery and flow of information to investors and capital markets and assist in the efficient operation of the markets.⁷⁴ Twenty-six additional commenters (two accounting firms, one institutional investor, one institutional investor association, seventeen companies, two law firms and three professional associations) agreed in concept that shortening due dates would improve the flow of information, but believed the due dates finally chosen should reflect concerns about the quality of information to be filed.⁷⁵ Examples of the effects included the following:

  • One commenter believed financial markets move quickly and investors need timely information for their investing decisions.⁷⁶ Earnings releases disclose selective data regarding companies' operating results while SEC filings present the whole financial picture in accordance with GAAP. Meanwhile, the market reacts to available data. A long delay between earnings releases and Form 10-Q and 10-K filings may render the filings irrelevant to investors who make quick investment decisions.

  • Another commenter thought the current timing and method of communicating financial information to the investor community is no longer sufficient.⁷⁷ Shortening deadlines would considerably impact investors' understanding of an entity's financial position on a timely basis. The demand for instantaneous information by investors continues to rise. As a result, the idea of shortening the deadline for filing reports is logical. There should also be an advantage to shortening the time span between announced earnings and fully reviewed financial information in reports.

  • One professional association noted that today's environment, replete with forecasts, earnings releases and media "sound bites," leads investors to believe they have sufficient information on which to make informed investment decisions.⁷⁸ In actuality, much of the information provided may be misleading, or at the very least incomplete. At a time when investor confidence regarding the reliability of information is being questioned, it is essential that investors and other market participants are provided with more information on a timely basis. Shortening the information gap between earnings releases and filing dates will reduce market volatility and provide investors with reliable information on a more timely basis.

  • Four commenters did not believe that shortening deadlines would delay earnings announcements.⁷⁹

• One academic described a study he performed of stock market response to Form 10-K and 10-Q filings from 1996 to 2001.⁸⁰ The commenter noted that he found statistically reliable evidence of an investor response to these filings on the day of and one or two days after filing, and that the magnitude of investor response has been increasing. His results were consistent with several other more recent studies demonstrating investor response to these filings, and represented a change from pre-EDGAR studies. The commenter noted that his results provide strong empirical support for the statement that periodic reports contain valuable information to investors. He attributed this in part to the increased availability of this information electronically.

  The academic also noted that there is an intense clustering of filings around current due dates. However, his study indicated that investor response does not decrease during intense filing periods, and he would not expect it to decrease if filing intensity increased.

• Two commenters (one institutional investor and one financial analyst) generally supported accelerating disclosures, noting that investors move securities prices on the basis of management-selected information rather than the more complete, comparatively objective information in the filings.⁸¹

Commenters describing no or negative effects

• Thirty-eight commenters (one accountant, two attorneys, one accounting firm, six corporate executives, one law firm, twenty-five companies and two professional associations) believed shortening deadlines would not prevent the failures to provide truthful and adequate disclosures that were the real cause of the recent disruption in the markets.⁸²

• One company believed the Commission places undue weight on the degree to which investors rely on reports.⁸³ The commenter believed their significance is typically small and any benefit from acceleration would be illusory. The commenter noted it had not conducted empirical research, but based its conclusion upon the fact that it had never seen any material movement in its stock price or trading volume coinciding with the filing of reports. The commenter believed that because of other factors, such as the wide variety of other information available, including analyst reports and estimates, the Internet and new disclosures and practices because of Regulation FD, it has become increasingly rare for investors to rely on periodic reports. The commenter also believed that much of the content of periodic reports frequently lacks significance (such as property information or quarterly financial information that is duplicative of earnings releases) or is prepared to avoid or mitigate claims of liability (such as descriptions of regulatory matters, pending litigation and risk factors).

• Four other commenters (one accounting firm, two companies and one professional association) did not think the marketplace was demanding earlier filings.⁸⁴ These commenters mentioned they have not experienced any particular pressure to file reports faster than the current due dates.

• Twenty-eight commenters (nineteen companies, three corporate executives, three law firms and three professional associations) believed that existing deadlines and market practices allow investors enough time to receive and review filings.⁸⁵ Many of these commenters believed earnings announcements, press releases, analyst conference calls and other practices, particularly as a result of Regulation FD, provide the information that is of interest to the bulk of investors. Several commenters did not think the current delay between the earnings release and the report is extensive. An accountant also did not see a significant benefit from shortening deadlines given the market's emphasis on earnings releases.⁸⁶

• One professional association did not believe the need for accelerated filing has been adequately demonstrated.⁸⁷ Practical reality forces companies to release core earnings information when it is available, in response to market demand, and file reports later, after they take time to prepare the financial statement footnotes and MD&A. Moreover, it is beneficial to the marketplace and investors to have earnings releases issued as soon as possible, without delaying them until more detailed comprehensive reports are prepared. The markets have worked well under this two-phased disclosure system. The Commission cited no empirical or other evidence supporting the proposition that current deadlines crease meaningful market inefficiencies, such as a pattern of significantly higher trading volume and price volatility immediately following the filing of Exchange Act reports. Companies are not delaying their reports to keep information from investors or dawdling in preparing and filing their reports, but rather are making information available to investors incrementally as it becomes available, a process that investors understand and accept. The "information gap" is not a problem; rather, it is a market-generated solution to the inescapable problem created by the time demands necessary to comply fully with the Commission's disclosure requirements and accounting literature. The commenter doubted that any information gap results in a meaningful delay in getting material information to the marketplace or shortchanging investors of the disclosures they need.

• Seven commenters (five companies, one corporate executive and one law firm) questioned whether there was a benefit from increasing filing deadlines.⁸⁸ One of these commenters noted in particular that for annual reports, the investment community has to come to rely on the Form 10-K as a reference document and a source of information to make long-term decisions.⁸⁹ Therefore, there is a less compelling argument for such a significant proposed acceleration. One company believed that the timing of information is not a factor in investment decisions.⁹⁰

• Seven commenters (four companies, two law firms and one professional association) believed that quality, not speed, is the focus of investors.⁹¹ An additional commenter mentioned this concern for quarterly reports and questioned how important it is for investors to get the full quarterly information in 30 rather than 45 days.⁹²

• Eight commenters (six companies and two investor relations professionals) believed that shortening deadlines for quarterly reports could cause a potential information overload to investors and analysts.⁹³ The shortened deadline would mean that more companies would file at or near the same time. Investors and analysts would be unable to process all this information, and the resulting overload would be at odds with improving disclosure quality. This could affect small to mid-sized companies the most because they could lose sell-side analyst coverage. Analysts, faced with an increase in the volume of information, may focus on larger companies to the detriment of small to mid-sized companies. One commenter provided statistics that 58.2% of companies release earnings in the first 30 days after quarter end, 34.5% release between 23-30 days and 27.5% release between 31-45 days.⁹⁴ Under the proposal, the last group would need to accelerate their processes. Another commenter thought the compression could cause the quality of analyst reports to decrease because analysts would not have time to digest all of the information, which could lead to pressure for greater pre-Regulation FD practices.⁹⁵

• Ten commenters (eight companies, one law firm and one professional association) were concerned that the proposed deadlines could delay earnings releases or reduce the amount of meaningful disclosure in them.⁹⁶ An additional commenter raised this concern for quarterly reports only.⁹⁷ As management and the board would be required to prepare and review the quarterly report at the same time as preparing the earnings release, it may take more time to release earnings. This is contrary to providing the investors with timely and critical financial information.

• Fourteen commenters (one academic, seven companies, one corporate executive, two law firms and three professional associations) thought that by making filing periodic reports a higher priority, it could pull senior executives away from growing and running the business, which could potentially cost shareholder value.⁹⁸

• Five commenters (one accounting firm, one attorney and three companies) noted that a shorter filing period suggests that the appropriate emphasis should be upon short-term performance rather than long-term trends.⁹⁹

• One accounting firm did not believe that improved information flow can be achieved by the compression of GAAP reporting timeframes.¹⁰⁰ "Current" reporting and "faster" reporting are neither synonymous nor congruent concepts, and the likely adverse consequences of shortening due dates would not provide a desirable outcome. The acceleration of deadlines has no impact on the interval between releases of information.

• One company believed that accelerating deadlines would not lessen the information gap in all cases because the proposal does not link deadlines to earnings releases.¹⁰¹ Processes that will be instituted to accelerate the filing of reports will also accelerate earnings releases.

• One accounting firm thought that accelerating deadlines would create a catalyst for increased instances of financial fraud.¹⁰²

• One company noted that some changes to the financial reporting process are needed, but believed the issue of stale information under present deadlines appears to be more of an issue that should be addressed at an individual company level based on the needs of each company's individual investors.¹⁰³ Investors at certain companies expect information more quickly than other companies. A "one-size fits all" answer of shortening deadlines for all companies would cause major strains to the reporting system.

5. Request for Comment: Effect on Reliability and Accuracy

Commenters describing no impact

• Eight commenters (three companies, one individual, one institutional investor, one institutional investor association, one investor organization and one professional association) believed the proposed deadlines would still allow companies and their management adequate time to prepare their reports, and sufficient time would be available for the required reviews.¹⁰⁴ Accelerating deadlines would not have a significant adverse effect on the accuracy or the cost of preparing reports. One institutional investor association mentioned that its surveyed members were not concerned that the proposed deadlines would harm investors by resulting in less reliable, lower-quality reported financials or by delaying the release of earnings announcements.¹⁰⁵ One of the commenters noted that while it understands the concerns about the potential for decreases in the quality of periodic reports given less time for preparation and review, these concerns can be mitigated with proper planning.¹⁰⁶ In addition, the commenter noted it has developed additional efficiencies in its processes as the result of its work to accelerate the filing of its reports.

• One institutional investor doubted whether shortening deadlines could lead to rushed audits.¹⁰⁷ According to this commenter, the accountants' review should be complete before the earnings release. The commenter also thought one positive benefit from the proposal would be more involvement with auditors throughout the year instead of a rushed period end process.

Commenters describing an impact

• Two hundred fourteen commenters (one academic, eight accounting firms, three attorneys, one audit committee, one hundred forty-nine companies, fifteen corporate executives, three individuals, one investor relations professional, seventeen law firms and sixteen professional associations) were concerned that the accuracy and quality of reports may suffer under the proposed deadlines.¹⁰⁸ Fifteen additional commenters mentioned this concern for quarterly reports only,¹⁰⁹ and one law firm mentioned this concern for annual reports only.¹¹⁰ Many of these commenters believed that focusing on and improving accuracy and quality should be the objective, not speed. Decreasing the time for completing and filing reports is counterintuitive to the need for companies, management, boards, audit committees and auditors to do a better job of preparing and filing reports. Accelerating deadlines would also undermine the governance and review mechanisms that have been put in place to insure quality. According to one professional association, two-thirds of its survey respondents expected a reduction in the precision of reported information under the proposed deadlines.¹¹¹ Many commenters believed that the benefits of more timely quarterly and annual reports would likely be outweighed by a decline of financial disclosure and increased costs that could result from the proposed deadlines, although some of these commenters favored alternatives with longer transition periods or deadlines.

• One hundred seventy-nine commenters (one academic, seven accounting firms, one audit committee, one attorney, one hundred thirty-three companies, five corporate executives, seventeen law firms and fourteen professional associations) believed that the proposed deadlines would impair the ability of management, external auditors, boards of directors and particularly audit committees to scrutinize and review filings properly and give appropriate consideration to the form, substance and priority of disclosures, particularly for MD&A and financial statement footnotes.¹¹² Nineteen additional commenters mentioned this concern for quarterly reports only,¹¹³ and one law firm mentioned this concern for annual reports only.¹¹⁴ According to one professional association, approximately half of its survey respondents expected that the proposed deadlines will significantly reduce their ability to identify and address errors and/or adjustments in their financial data.¹¹⁵

• Thirty commenters (one accountant, four accounting firms, two corporate executives, nineteen companies, one individual, two law firms and one professional association) believed the proposed deadlines could increase the chance for rushed audits and reviews, which could result in less quality audits and possible audit failures.¹¹⁶ Two additional commenters had this concern for quarterly reports.¹¹⁷ Several of these commenters also mentioned this concern for legal advisors. Another commenter foresaw increased use of temporary or intermittent staff by auditors, which increases the risk of error.¹¹⁸

• Forty-two commenters (one academic, two accounting firms, thirty-one companies, one corporate executive, three law firms and four professional associations) feared companies would be required to reduce or remove additional reviews or disclosures made above statutory requirements or feared that disclosures would become more boilerplate, particularly for quarterly reports.¹¹⁹

• Five commenters (one academic, one attorney, one accounting firm and two companies) noted that in light of recent high profile audit failures, it is likely that many auditing firms are reconsidering their respective audit approaches, with the likely result being an increase in the time spent on each audit.¹²⁰ The proposed deadlines run counter to these initiatives to increase quality.

• Three commenters (one accounting firm, one company and one professional association) thought the independent auditor would likely need to modify audit timing and methodology to address any incremental risks that arise as a result of a compressed reporting period.¹²¹

• One audit committee mentioned that its company regularly reviews the reports of other companies in the ordinary course of business.¹²² If this information were to become less reliable because of shortened deadlines, the company would be prejudiced along with the rest of the commercial, financial and securities world.

6. Request for Comment: Effects of Technology on Reporting

Positive impact

• One company thought the current timing and method of communicating financial information to the investor community is no longer sufficient.¹²³ With advances in technology over the past 30 years, it seems reasonable for companies to take advantage of those improvements to address financial reporting and the timely availability of data. The demand for instantaneous information by investors continues to rise. As a result, the idea of shortening the deadline for filing reports is logical. Technological improvements attained over the last 30 years should assist in mitigating the impact of additional disclosures that have been added during that same period.

• One institutional investor thought that today's technological capabilities are such that the filing deadlines set over 30 years ago should be revisited.¹²⁴

• One company agreed that the transparency, timeliness and usability of financial information is critical to the functioning of the capital markets.¹²⁵ The company thought that while the amount of information required to be disclosed in periodic reports has increased significantly since the last time deadlines were changed, the advances in communications and information technology during this same period has more than offset the difficulties incurred in providing this increased amount of information. While the commenter understood the concerns about the potential for decreases in the quality of reports given less time for preparation and review, these concerns can be mitigated with proper planning. The company also noted that it filed it most recent quarterly report within 30 days.

• One corporate executive noted that the advancement of Internet technology enables real-time financial reporting with a very short audit cycle. This allows more frequent reporting of financial information to the Commission with a significant reduction in delay. Technology already exists to have audited global financial results reported to the Commission on a monthly basis within days from the close of each month.¹²⁶

• One accountant noted that as a manager of reporting for a major public company 30 years ago, report preparation involved Telexes, central mainframe computers, pencils, paper, adding machines and calculators.¹²⁷ Given the increases in technology over the past 30 years, the proposed modest acceleration in filing dates appears reasonable.

Offsetting factors

• One hundred sixty-six commenters (one academic, one attorney, seven accounting firms, one hundred twenty-three companies, three corporate executives, fourteen law firms and seventeen professional associations) note that issuers have been faced with demands for increasingly detailed and complex disclosure and increasing review requirements, both of which have increased the amount of disclosure and the time involved in preparing periodic reports.¹²⁸ Business operations have also become increasingly global and complex with uniquely structured financial products and complicated hedging through derivatives. As a result, the benefits of technological advances have been largely offset by the additional disclosures now required and the time needed to collect and prepare the required information. Many of the commenters noted that their reports have become much longer over the years as a result. The commenters offered the following as examples that have resulted in increased disclosure:

  • The increasing volume and complexity of accounting rules and disclosures (examples discussed include SAB Nos. 99, 100 and 101 and SFAS Nos. 91, 109, 123, 131, 132, 133, 138, 140, 141, 142, 143, 144 and 145). Several commenters noted that in 1970, there were only six Accounting Research Bulletins and 17 APB opinions. Since that time, the EITF has discussed over 425 issues, and 145 SFAS and 31 APB opinions have been issued.

  • MD&A requirements, particularly the Commission's new interpretive releases concerning MD&A. One professional association noted that the registrants it surveyed indicated that these releases have added approximately two additional days to the reporting process.¹²⁹

  • The Commission's proposed new disclosure regarding the application of critical accounting policies.

  • SAS No. 71 reviews for quarterly reports.

  • Expanded audit committee requirements.

  • Expanded segment disclosures.

  • Increased disclosure in earnings releases as a result of Regulation FD.

  • Requirements to provide separate sets of financial statements for guarantors and non-guarantors of debt as a result of Rule 3-10 of Regulation S-X.

  • Increased auditing standards, such as SAS Nos. 61, 71, 82 and 90, as well as the Auditing Standards Board's proposal to expand its fraud standard which would substantially increase the need to perform additional period-end tests.¹³⁰

  • EDGAR requirements.

  • The Commission's requirements for derivatives and market risks inherent in derivatives and other financial instruments.

  • Requirements for hedge accounting.

• Seventy-six commenters (one academic, four accounting firms, fifty-seven companies, eight law firms and six professional associations) thought that the technological efficiencies which have allowed companies to generate and report earnings results quickly do not replace the analytical review that is necessary to produce complete and accurate disclosure in periodic reports.¹³¹

7. Request for Comment: Anticipated Problems

• One company did not anticipate any problems in meeting the proposed deadlines.¹³² The company mentioned it completed a successful "test run" of the accelerated timeline for its first quarter 2002 Form 10-Q filing. There may be some initial difficulty in arranging outside advisors to meet the filing date. However, the issuer and the advisor should be able to develop a mutually agreeable arrangement with adequate planning.

• One company believed the proposed deadlines could be met, but everything must "go right" and the proposed deadlines do not allow for other projects or reporting issues that may occur.¹³³ Additional staff may have to be added, and there is more of a chance for undetected errors.

• One professional association described the results of a March, 2002 survey of its members.¹³⁴ According to the survey, 60% of the respondents said they would encounter "significant" problems filing their annual reports within 60 days. The four most frequently cited reasons were:

  • Insufficient time to complete auditor review, a reason particularly prevalent among smaller capitalization companies that have to wait for a major audit firm to complete audits of large capitalization company clients.

  • Accelerating work processes will incur substantial cost and reallocation of workload. Again, smaller cap companies often said this would impose major personnel and systems costs.

  • 60 days is too short a time to develop the annual report because of the more extensive disclosure the SEC now requires, particularly in the MD&A section.

  • Insufficient time to consolidate business segments, an issue mostly cited by larger cap companies.

  Survey respondents indicated that 54% would encounter significant problems filing their quarterly report in 30 days. 81% could file a quarterly report within 40 days. 19% said they could file within 35 days. The primary reasons cited for being unable to file within the proposed 30 days were virtually the same as for the annual report. The survey and other anecdotal information from the commenter's members suggest that most companies would experience greater problems with the shorter filing deadline for the quarterly report than the annual report.

• One professional association noted that according to a survey of its members, 45% reported they would be able to meet a 60-day deadline, 23% reported they cannot file within 60 days and 30% reported they were not sure they could file within 60 days.¹³⁵ For the quarterly report, 45% reported they would be able to meet a 30-day deadline, 29% reported they cannot file within 60 days and 23% reported they were not sure they could file within 60 days. In addition to concerns over quality and the ability to conduct proper reviews, concerns that were mentioned included:

  • The cash flow statement may have less precision,

  • Reconciling cash, investments and payables will be more difficult,

  • The estimation process for accruals, allowances for doubtful accounts and reserves will be complicated,

  • May eliminate cash flow statement from the earnings release so resources can be devoted to preparing the quarterly report, and

  • If the result is a delay in filings, the consequence will be a false presumption of an issuer problem.

• Two commenters (one academic and one professional association) noted that there is little data to suggest that companies can meet the proposed shortened deadlines without significant problems or a significant degradation in the quality of disclosure.¹³⁶ Both commenters also pointed to information cited in the proposing release that year-end earnings announcements are issued approximately 43 days after year end and quarterly announcements are issued approximately 27 days after quarter end. This leaves only 17 additional days to prepare the annual report and three additional days to prepare the quarterly report.

• Forty-nine commenters (three accounting firms, one attorney, thirty-nine companies, two corporate executives and four professional associations) were concerned that shortening deadlines would force greater use of estimates.¹³⁷ This could reduce the quality of reported information and increase estimation error.

• Forty-three commenters (five accounting firms, twenty-seven companies, one corporate executive, six law firms and four professional associations) thought the proposals would be difficult on companies that operate on a decentralized basis that have many subsidiaries and operations to consolidate, or that have grown through acquisitions or consolidation, especially when the subsidiaries and operations are located worldwide or in emerging markets.¹³⁸ The international expansion of a business particularly makes the financial reporting process more complex. The proposals could increase costs and inefficiencies to ensure that the financial statements are timely filed. One of these commenters believed the proposals could hinder globalization efforts.¹³⁹

• Twenty-one commenters (one accounting firm, one corporate executive, thirteen companies, four law firms and two professional associations) thought the proposed deadlines could result in more restatements or amendments.¹⁴⁰

• Twenty commenters (one academic, one accountant, one accounting firm, three corporate executives, eleven companies and three professional associations) believed that to comply with shortened deadlines, companies would have to close their books early or perform some work before period end.¹⁴¹ These accommodations could introduce additional estimations or uncertainties into the reporting process, which could increase the risk of error. One professional association noted that 47% of its survey respondents mentioned they may would have to close accounting systems early, as compared to 14% of respondents that do so currently.¹⁴² Another risk is that companies will be forced to defer accounting items until subsequent accounting periods for analysis and resolution. Another company thought that much work cannot begin until after the closing of the books and preparation of financial statements, which typically requires 10-15 business days after period end.¹⁴³

• Twenty-one commenters (two accounting firms, fifteen companies, one law firm and three professional associations) were concerned about the impact of shortened deadlines on the availability of accounting and legal professionals.¹⁴⁴ With accelerated deadlines, outside advisors will be forced to review the same number of companies in a compressed amount of time. Adequate preparation time will be jeopardized. In addition, there may be difficulty in retaining the necessary advisors. Increased workloads could also drive some of the best accountants and attorneys to other areas of the professions, or to other professions altogether.

• Twenty commenters (three accounting firms, one attorney, eleven companies, one law firm and four professional associations) believed that many issuers would experience difficulty completing financial statements when they are dependent on the receipt of financial information from material non-managed subsidiaries or equity investees.¹⁴⁵ The parent's report cannot be completed until the lowest tier subsidiary has substantially completed its process, which could mean subsidiaries would in effect have even shorter deadlines. This could be particularly onerous for these smaller subsidiaries, particularly for those that otherwise would not meet the definition of an accelerated filer. One company noted that many agreements with unconsolidated affiliates to provide data were negotiated under the presumption that there were 90 days to file a Form 10-K.¹⁴⁶ If these agreements cannot be amended, there will be less actual data available and a greater reliance on estimates. Several commenters also noted they must prepare reports for separate entities, particularly as a result of Rule 3-10 of Regulation S-X, as well as separate sets of financial statements for guarantors and non-guarantors of public debt. This adds to the amount of work that must be completed. One commenter recommended that the Commission either reconsider the requirement to provide this information or allow such information to be filed subsequent to the accelerated filing deadlines (i.e., as an amendment under the current deadlines).¹⁴⁷

• Ten commenters (one accounting firm, six companies, one law firm and two professional associations) mentioned that registrants, even those that normally would be able to meet shortened deadlines, might have difficulty when significant or complex acquisitions or transactions are completed during or near period end.¹⁴⁸

• Nine commenters (one academic, three accounting firms, four companies and one professional association) were especially concerned about accelerating deadlines now given recent events with Arthur Andersen.¹⁴⁹ Two companies specifically mentioned that they were changing auditors from Arthur Andersen.¹⁵⁰

• Ten commenters (one accounting firm, five companies, two law firms and two professional associations) were concerned that shortened deadlines could also make it more difficult to recruit and retain qualified individuals who would be willing to serve as directors and audit committee members.¹⁵¹

• Four companies thought that with more abbreviated deadlines, more companies will be filing at or near the same time and were concerned whether EDGAR filing agents and the EDGAR system would be able to handle the increased volume of filings.¹⁵²

• Eight companies thought the proposed deadlines would exacerbate peak staffing and workload issues that are already difficult to manage.¹⁵³

• Seven commenters (six companies and one professional association) mentioned that accelerated deadlines may result in difficulties such as increased mailing and preparation costs.¹⁵⁴ For example, the accelerated due dates may require some registrants to file a separate Form 10-K in advance of the annual report to shareholders whereas today companies can publish and mail both in a single document. Two additional commenters noted that companies will need to have their reports prepared in advance to allow for printing and publishing time, which will further compress the time for management and independent auditor review.¹⁵⁵

• Four commenters (one attorney, one company and two professional associations) believed that accelerated filers would not be able to access the capital markets during the period between the filing of the Form 10-K and the proxy statement.¹⁵⁶ The commenters requested accommodation by the staff on this issue, perhaps by permitting filers to rely on the prior year's proxy statements rather than be forced to prepare the information earlier or forego the ability to have a newly filed registration statement go effective.

• Three companies mentioned they relied on a third party with whom they conduct business for much of the financial information required for their reports.¹⁵⁷ Their relationship with this provider is contractual, so they are not in a position to alter the contract unilaterally. Another company mentioned that it receives cost data for a major raw material from the Federal government only after the second week of the month, which would greatly reduce the period of time available to prepare reports under shortened deadlines.¹⁵⁸

• One professional association reported that 67% of its survey respondents anticipated they may have to ask their auditors to be involved earlier in the process under shortened deadlines.¹⁵⁹

• One professional association noted that many filers now incorporate by reference to their proxy statement.¹⁶⁰ The commenter believed that until such time as the proxy statement deadline is accelerated, filers will need to recreate much of the information and include it in any annual report filed on an accelerated basis.

8. Request for Comment: Effect on Number of Late Filings

• Sixteen commenters (one investor relations professional, one attorney, nine companies, one corporate executive, three law firms and one professional association) were concerned that the proposed deadlines may increase the number of late filings.¹⁶¹ In addition to adverse market reaction, filing late could cause issuers to lose eligibility to use short-form registration statements for at least one year, and Securities Act Rule 144 and Form S-8 would be temporarily available during the period of non-compliance. Even if loss of Form S-3 eligibility was eliminated, companies would be subject to a blackout period when a shelf registration statement could not be used if a report was delayed. Also, some indentures, loan agreements and registration rights agreements require a company to file timely all periodic reports. A late filing may give rise to a breach of contract or default. While registrants may be able to negotiate modifications to these agreements, the ability to modify covenants in indentures governing public debt may be more problematic.

• One academic noted that there is an intense clustering of filings around current due dates.¹⁶² Accelerating due dates will most likely exacerbate this behavior, and could increase the number of late filings. However, his study indicated that investor response does not decrease during intense filing periods, and the commenter would not expect it to decrease if filing intensity increased. The commenter did caution that an increase in filing intensity may benefit those with sophisticated information processing capabilities at the expense of others. The commenter also noted that if acceleration increases the number of filers who take advantage of Rule 12b-25, this may also result in an adverse effect on some filers since his study indicates that the market penalizes a later filer.

• Sixteen commenters (three accounting firms, eight companies, two law firms and three professional associations) suggested lengthening the extension periods under Rule 12b-25 (i.e., to 20 or 30 days for annual reports and 15-20 days for quarterly reports) if deadlines were accelerated.¹⁶³ Some of these commenters suggested this only for a transition period.

• Four commenters (two accounting firms, one company and one professional association) objected to shortening the extension periods under Rule 12b-25.¹⁶⁴

• One company believed that for annual reports, extensions should be eliminated or made more difficult to obtain.¹⁶⁵

• One institutional investor objected to lengthening the extension periods under Rule 12b-25.¹⁶⁶

9. Request for Comment: Linking Deadlines to Earnings Releases

• Forty-eight commenters (one academic, five accounting firms, one attorney, twenty-nine companies, two corporate executives; two institutional investors; one investor relations professional, two law firms and five professional associations) suggested that linking deadlines to earnings announcements may be a more preferable change than the proposals.¹⁶⁷ For example, these commenters recommended the deadlines to be the earlier of the existing deadlines or a specified period of time after the earnings release (i.e., 20, 30, 45 or 55 days for the annual report and 10-15 days for the quarterly report). Five additional commenters had this thought for quarterly reports only.¹⁶⁸ Three additional commenters thought the Commission may wish to link deadlines to earnings releases during a transition period for mid-cap companies.¹⁶⁹ Two commenters recommended both linking the filing date to the earnings release and accelerating deadlines.¹⁷⁰ For example, one of these commenters recommended setting the dates at the earlier of 15 days after the earnings release or 40 days for quarterly reports and the early of 30 days after the earnings release and 70 days for annual reports.¹⁷¹ One professional association would add that regardless of how early a company releases earnings, periodic reports would in no event be due earlier than a specified time.¹⁷² Commenters offered the following thoughts in favor of linking deadlines to earnings announcements:

  • The alternative addresses concerns regarding the information gap while avoiding adverse consequences to companies that may not be capable of accelerating deadlines.

  • There would be no need to distinguish between companies based on size or public float.

  • A one-size-fits-all proposal might produce more boilerplate and less robust disclosures, while the earnings release approach might not encourage cost-cutting.

  • The alternative would provide companies needed flexibility to address new or complex transactions, events or disclosure requirements. It would also give companies enough time to prepare thoroughly their earnings release and then their periodic report.

  • The alternative could alleviate some of the competition for the time and attention of external advisors.

  • The alternative could increase the quality of earnings releases by driving companies to a more robust review process.

  • As to the concern over potential confusion from periodic reporting deadlines that may vary from company to company and from period to period, the markets already operate in an environment of significant variability in the timing of earnings releases and the filing of reports. Consequently, investors and the markets will readily adapt to a direct correlation of the timing of earnings releases and periodic reports. To aid regulatory compliance, the SEC should require companies to disclose on the report cover page the date they made their earnings release and indicate whether or not the report has been timely filed.

• One professional association recommended shortening deadlines to 80 days for the annual report and 40 days for the quarterly report, provided that companies issue an earnings release that complies with minimum standards to be recommended by the National Investor Relations Institute and Financial Executives Institute.¹⁷³ These guidelines would require, at a minimum, a balance sheet, an abbreviated plain English MD&A and a discussion of key drivers of earnings and material factors affecting financial condition. Companies that chose not to follow the guidelines would have to file within 60 days for annual reports and 30 days for quarterly reports.

• One professional association noted that a number of its members support the concept of linking deadlines to earnings releases.¹⁷⁴ However, other members believed that a fixed date that applies to all companies makes the most sense for markets as a whole, in that investors and analysts will know and be able to rely on the filing dates. Some companies release their earnings very early, but need lengthy periods to prepare the reports. Other companies already file their reports shortly after their earnings release, which may be later in the process than for other companies.

• Several commenters addressed whether linking filings deadlines to earnings releases would result in a delay in the release of earnings:

  • Eight commenters did not think linking deadlines to earnings releases would delay earnings announcements.¹⁷⁵ Most of these commenters thought that investor and market demand would prevent a delay.

  • One investor relations professional thought that even if such a limit delayed earnings releases, Regulation FD would still obligate companies to inform the market of any expected material changes to previously released public forecasts.¹⁷⁶

  • Two commenters thought that any such delay might be acceptable if it results in an increase in quality.¹⁷⁷

  • Twenty-five commenters believed it is likely that linking reports to earnings releases would delay earnings releases so companies would have adequate time to complete their filings.¹⁷⁸ Twenty-one of these commenters opposed a mandated link as a result.¹⁷⁹ Several of these commenters also thought this approach would effectively penalize companies for early releases of information while rewarding companies that delay their earnings with extended time to file reports. Commenters objecting to linked deadlines also thought it would make calculations of deadlines difficult for investors and for determining regulatory compliance.

• Four commenters (one attorney, two accounting firms and one professional association) thought that if deadlines are linked to earnings releases, an "earnings release" should not include a "pre-release" to disclose whether management expects results to vary significantly from expectations.¹⁸⁰ Also, one of these commenters thought that limited disclosure of key operating information such as revenues, gross profit and even operating income should not be considered an earnings release if it excludes conventional measures of net income or earnings per share.¹⁸¹

• Two commenters (one accounting firm and one company) objected to linking deadlines to earnings releases because it would be too difficult to define what constitutes an earnings release, such as whether a partial release of information or a "pre-release" constituted an earnings release.¹⁸²

• One professional association thought that if deadlines are linked to earnings releases, Securities Act Rule 144 should be changed so that the current public information requirement is deemed satisfied so long as the required periodic reports are filed by the current deadlines, regardless of when the earnings release is issued.¹⁸³ The same relief could be provided for Form S-3 resale registration statements and sales of securities to employees under Form S-8.

• One company suggested a pilot program if deadlines are linked to earnings releases.¹⁸⁴

10. Request for Comment: Filing Information in Stages

• Twenty-one commenters (one accounting firm, thirteen companies, four law firms and three professional associations) thought providing selected financial information earlier, such as when a company releases earnings or a certain period of time after period end, would be a preferable alternative to shortening deadlines.¹⁸⁵ These commenters offered various alternatives on the type and amount of core information to be disclosed. Two commenters recommended an abbreviated Form 10-K.¹⁸⁶ One commenter objected, however, to filing MD&A on an accelerated basis due to its complexity.¹⁸⁷ One commenter suggested a pilot program if the Commission elects this alternative.¹⁸⁸

• An accounting firm recommended increasing the amount of information that may be incorporated by reference from the proxy statement to alleviate the burden of shortening deadlines.¹⁸⁹

• One accounting firm believed the Commission should partially or fully exempt registrants from accelerated reporting that are making a good-faith effort to address the priority of enhancing "current reporting."¹⁹⁰ For example, the Commission and the FASB should develop relevant key performance indicators and a regimen to promote or require their disclosure on a current basis. A registrant that discloses these indicators monthly on a consistent basis, such as filing them on Form 8-K, should be permitted to remain on existing deadlines.

• Eleven commenters (eight companies, one institutional investor, one law firm and one professional association) objected to filing information in stages.¹⁹¹ These commenters noted the following possible inefficiencies from such an approach:

  • Filing reports in stages would most likely lead to investor confusion;

  • Multiple reviews would be required by outside advisors;

  • The sections the Commission is considering accelerating are those sections that take the longest to prepare; and

  • Clerical and administrative effort would be more difficult.

11. Request for Comment: Whether a Company's Audit is Complete or Substantially Complete by the Earnings Release

• Five companies noted that its quarterly reviews and year-end audits are substantially complete by the earnings announcement.¹⁹² However, four of these commenters also noted that the average period of time before they release quarterly earnings is greater than 30 days.¹⁹³ Three additional commenters (one attorney, one company and one professional association) also mentioned that many companies release earnings after the proposed deadlines.¹⁹⁴

• Fifty-four commenters (one accounting firm, two corporate executives, thirty-eight companies, ten law firms and three professional associations) noted that while most audits and reviews are substantially complete before the earnings release or the proposed deadlines, the process of preparing reports, including the financial statements and footnotes, is not.¹⁹⁵ These commenters believed that additional time is needed to prepare a thorough filing and to coordinate reviews by management, counsel, auditors, audit committee members. EDGAR filing agents also recommend that its customers deliver their Form 10-K five days to a week before the due date to ensure timely filing (and two to three days for Form 10-Q's).

• Three commenters noted that regardless of whether the audit is complete, liability issues are not comparable between earnings releases and reports because:¹⁹⁶

  • Greater detail is required in the financial statements;

  • Periodic reports carry specific standards of liability;

  • Reports are incorporated by reference into registration statements, giving rise to potential Securities Act liability; and

  • Financial statements are frequently the subject of representations and warranties in loan and other agreements, giving rise to potential liability to other parties.

• Nine commenters noted that earnings numbers rarely change after the earnings release.¹⁹⁷

• Twenty-four commenters (four accounting firms, one attorney, seventeen companies and two law firms) disagreed with the belief that the bulk financial statement preparation and audit work is complete by the earnings release.¹⁹⁸ One commenter mentioned that even though it may appear to the Commission that the financial statements are final at the earnings release date, the audit and review process is far from complete.¹⁹⁹ According to one accounting firm, in some cases, significant work remains to be performed and little, if any, assurance can be ascribed to the publicly disclosed results.²⁰⁰ Several audit or review procedures affecting other aspects of financial statements, particularly those relating to the balance sheet, are typically not completed until after the earnings release. Even if the audit field work is substantially complete by the earnings release, the full financial statements and reports generally will not have been prepared.

12. Request for Comment: Process in Preparing Periodic Reports

• Sixty-eight commenters (one academic, two accounting firms, four corporate executives, fifty-one companies, one individual, five law firms and four professional associations) discussed generally the process of preparing reports.²⁰¹ Most of these commenters believed that properly preparing all sections of the reports, including the MD&A, takes additional time above the proposed deadlines, particularly given the Commission's recent calls to increase disclosure quality. While some described that they prepare their reports concurrently with the earnings release, most described the process as a series of sequential steps where the company first closes the books, then prepares and releases its earnings press release and then turns its attention to the periodic report. Several of these commenters provided detailed timelines. While the particular steps and timing vary depending on the company (two professional associations noted that company practices with respect to the preparation of periodic reports vary significantly-there are no "best practices" in this area),²⁰² the following basic steps frequently were outlined:

  • Close financial records and collect raw data

  • Consolidation and related adjustments

  • Review and analyze consolidated financial information by management

  • Independent auditor review/audit

  • Preparation of earnings release

  • Complete consolidated statement of cash flows

  • Draft notes to financial statements, MD&A and non-financial sections of report

  • Review by internal departments, including legal and accounting departments and senior management

  • Review by outside auditors and outside counsel

  • Audit committee review

  • For the Form 10-K, submit report to the full board for approval and signature

  • Revise the report and re-solicit comments, if necessary

  • Prepare the report for electronic filing, or "EDGARizing" (described as taking anywhere from one day to a week).

13. Request for Comment: Costs of the Proposal

• Five commenters (two companies, one institutional investor, one investor organization and one professional association) believed that accelerating deadlines will not have a significant adverse effect on the cost of preparing reports.²⁰³ One of these companies noted that it had already changed the processing of its quarterly filing and certain expenses were actually either reduced or eliminated, primarily in redundant computer processing costs.²⁰⁴ Two additional commenters did not think the deadlines would result in any internal cost increases.²⁰⁵

• One company thought staffing may actually decrease from the proposed deadlines.²⁰⁶

• Several commenters provided the following cost estimates:

  • According to one professional association, 52% of its survey respondents reported that they expect costs to increase in order to comply with the proposals.²⁰⁷ 46% of respondents indicated they will have to hire additional staff. 27% of respondents indicated they will have to buy or develop additional systems. Other companies mentioned overtime, audit fees and increased financial printer expenses. While some companies stated they were not able to estimate costs, the following summarizes the estimates that were received:

    	Up to $75,000	-	27 companies
    	$76,000 to $150,000	-	24 companies
    	$151,000 to $300,000	-	11 companies
    	$300,000 to $999,000	-	4 companies
    	$1,000,000 and over	-	7 companies

    Some respondents did not expect to incur any additional costs. Because of the issues involved in preparing reports, a company cannot simply hire temporary staff to help out in the heavy reporting seasons; nor, for most companies, can the work be done effectively by outside counsel.

  • One company mentioned that first-year costs for the 30-day quarterly deadline would be approximately $100,000, which includes required information systems program changes and one additional CPA.²⁰⁸ The continuing annual expense would be approximately $65,000, which includes salary and benefits for the one additional accounting staff. The company did not expect to incur any significant costs in meeting the proposed annual report deadline.

  • Another commenter thought accelerating deadlines would result in increased staffing costs for Form 10-Q filings in the range of $225,000-$275,000 per year.²⁰⁹ Irrespective of the cost, the commenter feared that hiring the additional staff would increase the risk of error. The same commenter mentioned that shortening the annual report deadline to 70 days would not require any additional staffing nor add any additional cost.

  • One company estimated it would have to increase its internal accounting staff by 10-15% for a total additional cost of $200,000-$300,000 per year.²¹⁰ It further estimated that its independent auditors would have to increase their staff assigned to the audit by as much as 30%, increasing the external cost of the audit by $100,000-$150,000 per year. In the near term, the quality of work would suffer because the new staff would likely be less experienced, knowledgeable and productive than current staff.

  • One accounting firm mentioned that one of its survey respondents expected costs of $1 million and the need to hire four to five additional staff members.²¹¹ Another respondent said costs could easily exceed $1 million.

  • One company believed the total costs needed to upgrade its systems was uncertain but could easily be in excess of $5-10 million and would primarily be a one-time cost.²¹² The costs for increased personnel would be at least $150,000 per year along with additional ongoing personnel costs within the commenter's businesses.

  • One company thought it would need to add an additional ten to twelve people at a cost in excess of $1,000,000 and systems upgrades of approximately $10-15 million.²¹³ However, neither additional staff nor improved technology would compensate for the expected loss in executive and board involvement in the report process.

  • One company thought it would have to add approximately 40 additional hours per quarterly filing and 500 hours for the annual filing. If an outside contractor were hired to assist in this process, the estimated costs would be $60,200, and if outside advisors were used, the estimated costs would be $155,000.²¹⁴

  • One company believed it would cost "millions of dollars" to change its information technology system to allow real-time reporting.²¹⁵ In addition, the commenter expected to hire temporary staff to assist in the preparation of reports.

  • One company expected to spend an additional $1,000,000 on in-house accountants, audit fees and systems work.²¹⁶

  • One company believed it would have to increase its accounting staff by 20%.²¹⁷ Another company believed it would need to hire one additional staff member.²¹⁸

  • One company believed it would have to hire one or more additional full-time professionals.²¹⁹ In addition to salary and benefits, it would incur overhead costs.

  • One law firm thought that limiting the time to file the reports by one-third would increase company and audit costs by 50%.²²⁰ There would also be increased costs in compensating audit committee members for additional time constraints and liability risks.

  • One professional association noted that seven of its members estimated the additional costs to comply with the proposal to be over $1 million, with one member estimating costs exceeding $10 million.²²¹ Nevertheless, a substantial majority of its members indicated they would be able to meet the proposed deadline for annual reports with a substantial transition period. This may involve adjusting practices, revising systems and hiring additional staff.

  • One commenter thought that compressing deadlines by 33% implies 50% in personnel overtime.²²²

• Eighty-five other commenters (one academic, three accounting firms, two corporate executives, sixty-four companies, five law firms and ten professional associations) generally mentioned that accelerating deadlines would result in increased costs, particularly from increases to internal staff.²²³ Three additional commenters (two companies and one professional association) mentioned this concern for quarterly reports only.²²⁴ One company believed it is not possible to put a dollar value on such costs, as it depends on the quality and flexibility of each registrant's present systems, processes and staff.²²⁵ Several companies believed they would need to reengineer their closing process, which would be costly. Several noted that larger staffs also would make the process less efficient. Several also noted that skilled individuals must perform a large percentage of this work, and adding more people would not necessarily assist these critical individuals. Three commenters noted that their ability to recover any additional costs would be limited, which could lead to reduced earnings and a reduction in shareholder value.²²⁶

• Fourteen commenters (two accounting firms, nine companies, one law firm and two professional associations) anticipated that some companies would require technological investments to accelerate its reporting process.²²⁷ Two additional commenters (one company and one professional association) mentioned this concern for quarterly reports in particular.²²⁸

• Forty-eight commenters (two accounting firms, one attorney, thirty-five companies, one individual, five law firms and four professional associations) expected that accelerating deadlines would result in increased audit fees, particularly for companies with a calendar fiscal year-end, due to a greater supply and demand imbalance between the work required and the audit staffing available.²²⁹ Several of these commenters also mentioned this concern for legal fees. One of these commenters thought audit fees might increase by as much as 50%.²³⁰ Another commenter noted that the increased risk to be faced by accounting firms, together with the reductions in number of firms, limitations on consulting work, a general shortage of qualified personnel, tightening of reporting deadlines and additional reporting requirements, could create a "Perfect Storm" scenario for very large increases in audit fees.²³¹

• Eighteen commenters (one accounting firm, fourteen companies, two law firms and one professional association) noted that any increased costs would be ongoing and recurring.²³² One professional association thought that some of the costs are one-time (such as systems upgrades) and others are ongoing (such as additional staff and additional auditor review).²³³

• Five commenters (four companies and one professional association) were concerned that increasing staff would mean companies would be overstaffed between periods.²³⁴

• Two companies were concerned they would be required to forego other projects.²³⁵

• Four companies noted that in addition to estimated dollar costs, costs may also be found in abbreviated reviews and reduced opportunity for discussion or change before filing which may result in a reduction in quality.²³⁶

• Four companies did not believe increased staff or systems would overcome the potential problems from increased deadlines.²³⁷

• One company believed the proposals would dramatically increase its exposure to potential liability.²³⁸

14. Request for Comment: Conforming Revisions

a. 120-Day Period to File Form 10-K Part III Information in Definitive Proxy or Information Statements

• Two commenters (one professional association and one institutional investor) supported accelerating the filing of definitive proxy or information statements to ensure that investors have timely information with which to make informed investment decisions.²³⁹

• One company, while opposing shortening deadlines generally, did not believe the Commission could accelerate the deadline for annual reports without also accelerating the filing of proxy statements, as each document contains information important for consideration of the other.²⁴⁰

• Fifteen commenters (two accounting firms, two law firms, nine companies and two professional associations) objected to a conforming change to the 120-day period.²⁴¹ These commenters offered the following arguments:

  • Compiling proxy information is a long and comprehensive process that occurs at the busiest time of year. Shortening the deadline would result either in much earlier preparation of the Part III information for inclusion in the Form 10-K or acceleration of the annual meeting process.

  • Shortening the deadline would require proxy statements to be sent out further in advance of the annual meeting. This could result in an increase in lost and disregarded proxies by stockholders, leading to reduced voting and ultimately to difficulty (with the attendant cost of additional solicitation efforts) in obtaining a quorum. Shortening deadlines could also interfere with setting the record date.

  • Shortening the deadline would result in an increased number of issuers filing and mailing their proxy statements within the same very short period of time. This could overwhelm the vendor most companies use to process, mail and tabulate proxies (which could lead to increased costs) and could overwhelm the U.S. Postal Service.

  • Shortening the deadline would compromise the time available to verify stockholder addresses to ensure that they receive their annual meeting materials.

  • Shortening the deadline is not necessary nor would it diminish the value of accelerated periodic reports to investors. Investors may not need this information on a more timely basis as it is generally relied upon for voting purposes before annual meetings rather than for investing decisions.

  • The Commission's current and expected proposals related to the contents of MD&A and the requirements for Form 8-K will cover a substantial amount of Part III information which is permitted to be incorporated by reference.

b. Schedules Required by Article 12 of Regulation S-X

• Three commenters (one accounting firm, one professional association and one institutional association) supported requiring these schedules to be filed with the Form 10-K with no additional delay.²⁴²

• Six commenters (one accountant, one accounting firm, three companies and one professional association) recommended keeping the deadline for these schedules at 30 days after the deadline for the Form 10-K.²⁴³ According to one commenter, if the Form 10-K deadline is shortened to 60 days, then the extra 30 days becomes more important as it takes time and effort to prepare the schedules.²⁴⁴ If the 30 days were removed, the quality of both the annual report and the schedules would suffer.

• One company referred to Securities Act Release Nos. 33-7793 and 34-42354, which the commenter noted would expand the supplementary financial information schedules.²⁴⁵ The commenter stated it would object to the conforming change if a final rule is adopted which significantly expands the requirements of the schedules.

c. Timeliness Requirements in Other Commission Filings

• Six commenters (one accounting firm and five companies) believed it would be appropriate to conform the timeliness requirements in Regulation S-X to any changes the Commission determines to make for periodic reports.²⁴⁶ One commenter recommended a transition period to implement these changes.²⁴⁷ Another commenter believed the Commission should consider eliminating the current requirements under Rule 3-01(c) and (d) of Regulation S-X that require audited financial statements to be provided in a Securities Act registration statements under certain conditions when such statements are not yet required to be filed in periodic reports.²⁴⁸ According to this commenter, those current requirements create an artificial distinction and serve to unreasonably deprive some companies of access to the capital markets.

• One company that objected to shortening the deadlines for Exchange Act reports also objected to any conforming amendments for other Commission filings.²⁴⁹

• One professional association thought it was not clear whether historical and pro forma financial information for business to be acquired would be required in registration statements and proxy statements filed by accelerated filers on the proposed 30-day/60-day basis.²⁵⁰ The commenter encouraged the Commission not to shorten these current time limitations under Rules 3-01, 3-02 and 3-12 of Regulation S-X and, therefore, confirm that the 135-day period in those rules remains the appropriate benchmark for historical and pro forma financial information relating to acquired companies. The commenter also requested clarification whether reporting companies in these situations can continue to sell securities under effective shelf registration statements.

d. Item 7 of Form 8-K

• Twenty-three commenters (five accounting firms, thirteen companies, two law firms and three professional associations) objected to conforming amendments to Item 7 of Form 8-K.²⁵¹ Many commenters believed the ability to obtain audited financial statements of a significant acquired business generally is unrelated to any circumstances of the acquirer that cause it to be an accelerated filer for purposes of its own financial statements.

e. Rule 3-09 of Regulation S-X

• Five commenters (two accounting firms, one attorney, one company and one professional association) did not think the due date for Rule 3-09 of Regulation S-X regarding the financial statements of significant equity investees, joint ventures and subsidiaries not consolidated should be accelerated to conform with that of the investor registrant.²⁵² This could require a company that does not meet the definition of an accelerated filer to file their financial statements before they would otherwise be required. In addition, the investor registrant may have difficulty in obtaining these financial statements from these non-wholly owned entities in the appropriate time frame. Accelerated filers should be able to file the audited financial statements under Rule 3-09 by means of an amendment to the Form 10-K under the current deadlines.

C. Proposal: Definition of Accelerated Filer

1. General Comments

• One company believed that the proposed criteria used to identify companies that will be subject to the shortened deadlines are appropriate.²⁵³

• Seventeen commenters (one accounting firm, eleven companies, two law firms and three professional associations) believed all public companies should be required to adhere to the same filing deadlines regardless of a company's size or experience in preparing filings.²⁵⁴ Two additional commenters believed all public companies, with the possible exception of small business filers, should have the same filing deadlines.²⁵⁵ According to most of these commenters, it would be confusing to have differing deadlines. Investors in companies with floats of less than $75 million should expect the same timely access to prompt disclosure as investors in larger companies. Such prompt disclosure may be even more important for smaller companies due to the relative scarcity of available information about them. Also, one commenter thought it is also fundamentally unfair to have tiered reporting requirements that emphasize the difference between large and small companies.²⁵⁶ Smaller companies may have fewer resources, but they also generally have less complex operations and business environments. One law firm thought differing reporting deadlines could adversely affect competition.²⁵⁷ Non-accelerated filers would enjoy a competitive advantage against companies who are forced to incur the incremental costs imposed by accelerated deadlines.

• Eleven commenters (two accounting firms, one institutional investor, one investor organization, three companies, one law firm and three professional associations) specifically agreed with the notion of separating small and large companies.²⁵⁸ One of these commenters, while supporting a split, recommended that the Commission amend the deadlines for smaller issuers to be framed as the earlier of 90 days (or 45 days) or 2-3 following the release of earnings.²⁵⁹

• Nineteen commenters (one academic, one accounting firm, two attorneys, eleven companies, one law firm and three professional associations) disagreed with the Commission's belief that larger issuers will be better able to meet shortened deadlines.²⁶⁰ While one of these commenters acknowledged that some large issuers may not have difficulty,²⁶¹ these commenters thought larger issuers face challenges just as daunting as those affecting smaller issuers, if not more so. While large firms may have more resources, they tend to have more complex and geographically widespread operations, numerous consolidated and unconsolidated entities, segment reporting and complicated financial transactions. This makes preparing reports and the audit process more time-consuming and complex. One of the commenters thought the proposal would particularly strain middle-market companies.²⁶²

• Two commenters (one company and one law firm) suggested that companies with significant foreign operations be excluded from the definition of "accelerated filer."²⁶³ One of these commenters recommended excluding from the definition of accelerated filer companies with 10% of revenues or assets derived from international operations.²⁶⁴

2. Proposal: Public Float Requirement

• Three commenters (one accounting firm, one company and one professional association) supported the use of public float as a method to differentiate companies.²⁶⁵

• One accounting firm believed that the $75 million float threshold appears a reasonable cutoff pint, but could easily be much higher.²⁶⁶ The commenter also suggested that initially the acceleration should apply to perhaps only the 200 or so largest companies, and then expanded to others, if reasonable practices can be developed for handling acceleration of the filing dates.

• One law firm believed that using a different test than that used for Form S-3 eligibility would further confuse issuers and be even more disruptive than the original proposal.²⁶⁷ The commenter objected to alternative thresholds, such as a $5 million revenue or asset threshold. This commenter thought, however, that many registrants that would qualify as accelerated filers as proposed would have significant difficulty meeting the proposed deadlines.

• Twenty-two commenters (one academic, three accounting firms, one attorney, nine companies, one financial analyst, three law firms and four professional associations) questioned the use of public float as indicative of a company's ability to file sooner.²⁶⁸ These commenters offered the following arguments and alternatives:

  • One academic believed that while public float may be a useful indicator that a company is well known in the marketplace and should be allowed to incorporate material by reference, it does not relate to the ability of companies to file earlier.²⁶⁹ The commenter believed the proposed threshold was over-inclusive and recommended limiting application to companies that are included in the S&P 500 as of their prior fiscal year end. These companies make up approximately 75% of the market value of all public companies and are companies with the size, experience and infrastructure necessary to file in a shortened time frame. These companies would remain accelerated filers until they ceased reporting, became a small business issuer or otherwise successfully petitioned the Commission to change status. Alternatively, annual revenues of at least $500 million and a year of reporting experience should be used. Revenues provide a better measure than public float of which issuers are sufficiently seasoned to meet shortened deadlines and absorb any additional expense that would be required.

  • One professional association noted that smaller issuers with limited operations and personnel may develop a significant public float.²⁷⁰ Conversely, the public float test would exclude larger registrants that do not avail themselves of the public equity markets and rely instead on other sources of financing, such as debt. A $500 million revenue threshold, determined as of the end of the third quarter, based on revenues during the prior four quarters, would be a better indicator of whether the registrant has adequate resources and personnel to meet shortened deadlines.

  • Three commenters thought that linking accelerated filing requirements to Form S-3 eligibility is misguided.²⁷¹ Simply because a company is more visible to the public does not mean it is more likely to be able to file sooner. Further, greater visibility should not correlate to a greater need for the public to receive expedited information because market forces will push companies for more disclosure in the form of press releases.

  • One professional association also thought that linking the threshold to Form S-3 eligibility does not necessarily identify companies that could file in an accelerated timeframe.²⁷² The criteria should be set to exclude companies whose failure would not be expected to impact the financial markets. Possibilities include total assets, average daily trading volume or market capitalization.

  • Three small companies believed that a $75 million public float is not indicative of the market for a stock active enough to need, and significantly benefit from, more rapid disclosure.²⁷³ Float is subject to aberrations because it is tied to stock value. In a market with limited demand and more demand than supply, the few shares available may trade over an extended time at prices far in excess of those that would be likely in a more active market. Thus, it would be possible to have a $75 million float not because there existed an active market demanding up to the minute information, but because of the absence of such a market. Any definition of accelerated filer should have a substantial trading volume requirement in addition to a float requirement. Although the commenters did not presently meet the proposed float requirement, they mentioned that a modest increase in stock price or a reduction in holdings by directors could result in the company meeting the proposed requirement.

  • Two other commenters believed the Commission should consider trading volume because a company may meet the float test but may have a very small daily traded volume.²⁷⁴ One of these commenters recommended a $1 million ADTV threshold.²⁷⁵

  • One law firm thought that separating companies based on size creates the prospect of greater inefficiencies in the capital markets as companies of comparable business parameters within the same industrial sector may be publishing their full results as much as 30 days apart based on a small difference in market capitalization.²⁷⁶ A better test would be one that takes into account revenues, tangible assets, the number of employees or other factors.

  • One accounting firm believed that public float is too volatile, it is out of the control of the registrant and any float threshold used would be arbitrary.²⁷⁷

  • One company recommended excluding all reporting companies whose equity securities are not listed or traded on an established public trading market or Nasdaq in addition to those that file only by virtue of public debt, preferred stock or limited partnership interests.²⁷⁸ If this is not done, provide exclusionary thresholds based on trading volume definitions that presently exist elsewhere in promulgated regulations. Another company suggested accelerating the filing dates only for companies whose equity securities are listed on an exchange and whose public float exceeds that required to use Form 10-KSB and 10-QSB.²⁷⁹

  • Two commenters believed that the public float is not appropriate for addressing the concern of smaller companies.²⁸⁰ Public float is not necessarily indicative of company size, is not a stable criterion and is not necessarily reflective of the strength of a company's internal controls or other financial resources, or the extent to which non-insiders own it. One of these commenters recommended instead a threshold based on revenues or assets.²⁸¹ The other commenter recommended market capitalization or revenue.²⁸²

• Seventeen commenters (three accounting firms, one attorney, four companies, one financial analyst, four law firms and four professional associations) thought the proposed $75 million public float threshold was too low.²⁸³ These commenters offered the following arguments and alternatives:

  • One company with a public float of approximately $350 million suggested the threshold be $10 billion to cover only the very largest corporations that have the necessary internal resources and external auditor attention.²⁸⁴

  • One company with a public float of approximately $400 million suggested a threshold of not less than $5 billion if a two-tier structure is adopted.²⁸⁵

  • One law firm noted that companies in the S&P 100 have a market cap of at least $1.4 billion and the commenter believed these are the only companies that are currently able to file before March 31.²⁸⁶ Other companies do not receive the necessary attention from auditors to file within the proposed deadlines.

  • Two accounting firms recommended a threshold of $1 billion or more.²⁸⁷ This would affect approximately the largest 750-800 public companies that generally would have the level of investor interest and resources available to justify accelerated reporting. One of these commenters believed that companies with a market capitalization of less than $1 billion will incur significant costs to comply with the proposed deadlines.²⁸⁸

  • One accounting firm recommended the threshold be $300 million.²⁸⁹

  • One professional association recommended the threshold be $250 million.²⁹⁰

  • One law firm recommended a threshold of $200 million.²⁹¹

  • One professional association recommended a threshold of $150 million.²⁹²

  • One company noted it had a public float approximately twice the $75 million threshold and yet it is considered to be on the low end of the "micro cap" market.²⁹³ Its trading volume is only a few hundred shares per day. Due to its size, it does not have the resources of a Fortune 500 company to meet shortened deadlines, particularly for quarterly reports. The commenter suggested an alternative that companies with a float of less than $1 billion be given different, but still shorter, deadlines, such as 40 days for quarterly reports and 80 days for annual reports.²⁹⁴

• Three mid-cap companies mentioned their strong preference was to retain the present deadlines, but if that is not done, they suggested a greater transition period for mid-cap companies.²⁹⁵ Two of these companies did not want to be separated from large-cap filers if such separation would involve depriving them of the use of Form S-3.²⁹⁶

• One accounting firm thought the definition of accelerated filer should exclude companies that file only by virtue of public debt, preferred stock or limited partnership interests.²⁹⁷

• One attorney questioned the impact of the proposals on a company registered under Section 12(g) of the Exchange Act that is not publicly listed or traded and therefore does not have a readily ascertainable common equity public float.²⁹⁸

3. Proposal: Reporting History Requirement

• Three commenters (one investor organization and two professional associations) thought that imposing the accelerated filing requirements on more seasoned issuers ensures that the requirement is not overly burdensome and does not compromise report quality.²⁹⁹

• Two professional associations thought that one reporting cycle may not provide sufficient experience to file on an accelerated basis.³⁰⁰ One of these commenters recommended a two year requirement.³⁰¹

• Four commenters (two companies, one law firm and one professional association) did not believe a history of preparing reports or that at least one annual report has been filed is necessarily relevant to filing on an accelerated time frame.³⁰² Another company did think a one year history of preparing reports and that at least one annual report has been filed is relevant and appropriate.³⁰³

4. Request for Comment: Effect on Smaller Companies

• One individual urged the Commission to develop a proposal for accelerating deadlines for Form 10-KSB and 10-QSB filers with an adequate phase-in period.³⁰⁴

• One academic noted from the results of his study that the market apparently pays more attention to smaller firm than larger firm filings.³⁰⁵ By accelerating larger firm filings, it is likely that two periods of filing concentration would arise, with some information about smaller firms being derived from larger firm filings. If smaller firm information is correctly anticipated earlier, the market response to later firm filing would thereby be less. If the smaller firm information is not correctly anticipated, this could induce unnecessary volatility in smaller firm stock prices in anticipation or at the time of the subsequent filing. This could change registrants' incentives about when to file.

• Twenty-six commenters (one academic, two accounting firms, eight companies, seven corporate executives, four law firms and four professional associations) thought that the proposed deadlines would be particularly burdensome for small companies, particularly due to the small staff and limited technological resources available to small companies in preparing their reports.³⁰⁶ These companies have a difficult time filing under current deadlines, and accelerating deadlines would have a greater impact on these companies.

• Seventeen commenters (one academic, one accounting firm, seven companies, two corporate executives, five law firms and two professional associations) thought that many smaller companies, including those with a public float of $75 million or more, may be unable to obtain sufficient auditor participation for the preparation of financial statements until auditors have completed work for larger clients.³⁰⁷ Shortening deadlines would strain already scarce resources and likely result in increased audit fees. However, one accounting firm thought that if an entity were not subject to the accelerated deadlines, it would not be more difficult to retain necessary outside advisors, in fact it may be easier.³⁰⁸

• One company thought that with accelerated deadlines, more companies would be filing around the same time.³⁰⁹ This will likely increase EDGAR filing fees and disadvantage smaller issuers who have less bargaining power with EDGAR providers.

• Three small companies opposed modifying the proposal to include smaller companies.³¹⁰ They explained that they had small staffs and only one or two people responsible for reporting. Outside auditors and counsel provide assistance and have other clients with the same deadlines. Finding capable assistance is a serious challenge for small companies. Shortening deadlines would strain resources and increase costs. Neither the financial statements nor MD&A are so scientific and routine that they can be automated. Accordingly, preparation time cannot be reduced as a one-time expense. The ongoing additional cost was estimated at $15,000-$50,000 per year. They also did not see a benefit to investors from shortening deadlines for small companies, noting that they have a relatively small shareholder base (examples were less than 700, 1000 and 2000 shareholders), their stock is not heavily traded and they have no analyst coverage.

5. Request for Comment: Effect on Different Industries

• Sixteen commenters (two accounting firms, nine companies, one corporate executive, two law firms and two professional associations) thought that the proposal would be difficult for the banking industry due to additional regulatory requirements.³¹¹ One commenter explained that in addition to the Commission's requirements, there is a comprehensive quarterly reporting process for bank and other financial regulators.³¹² Much of the Commission's reporting is dependent on data gathered for that process. Today, the two reporting cycles are aligned. If the Commission's reporting cycle accelerated, certain aspects of the bank regulatory reporting cycle also would need to be accelerated. In addition, the commenter anticipated additional disclosures if the Commission revises Guide 3. One commenter advocated an exemption to accelerated filing for registrants such as financial institutions that already are required o provide public information regarding their financial position within the time frames to other regulators.³¹³

• Thirteen commenters (nine companies, one corporate executive, one law firm and two professional associations) thought that the proposal would be difficult for insurance and insurance holding companies because of the particular accounting requirements and actuarial calculations required.³¹⁴ These companies also must prepare separate filings for other regulators, and the acceleration of the Commission's deadlines would cause a burdensome overlap of the reporting cycles. One of these commenters mentioned that according to a survey of its members, 80% of respondents use the same accounting staff for both sets of reports and 90% use the same chief actuary.³¹⁵ 74% of the respondents indicated they could not currently meet the 30 day deadline for quarterly reports, and 50% indicated they could not currently meet the 60 day deadline for annual reports. This commenter also noted that state regulators are proposing to accelerate the due date of statutory annual financial reports from June 1^st to April 1^st, a proposed Statement of Position related to the life insurance industry is expected shortly and external auditors have increased difficulty with insurance companies because they audit both the statutory and GAAP financial statements.

• An additional commenter thought the deadlines would be difficult for the reinsurance industry.³¹⁶ Substantial information necessary for the reports is provided by client life insurance companies, and many of the agreements with those clients provide that reporting information must be provided no later than the 20^th day after quarter-end. The company suggested a hardship exception for companies that can demonstrate to Commission staff, similar to the existing practice for confidential treatment requests, that filing on an accelerated basis would cause undue hardship. Companies receiving relief could be required to provide notice via a Form 8-K as well as in their reports. Additional means of providing relief would be to grant relief to industry groups that are more particularly impacted by accelerated deadlines.

• Three commenters (one company and two professional associations) noted that shortened deadlines would be difficult for real estate companies.³¹⁷ These companies rely on several third-parties or non-wholly owned operating partnerships for much of the required information for their reports, which increases preparation time. To meet the deadlines, many real estate companies would need to close their books early and rely on forecasts. In addition, these companies may have additional filing requirements pursuant to Rule 3-10 of Regulation S-X or they may have multiple reporting registrants.

• Additional industries mentioned by commenters included the following:

  • Utilities due to additional regulatory requirements.³¹⁸

  • Oil and gas companies because of extra time needed for the closing process.³¹⁹

  • Healthcare services business due to the complexity and number of governmental and third-party reimbursement systems that affect revenue estimation.³²⁰

  • Mining and petroleum companies that employ independent reserve auditors.³²¹ Companies that elect to have their reserves independently audited may face difficulties because the independent reserve audit involves additional time and personnel. Because reserve audits are not required but do provide an additional measure of investor and market protection, firms that elect to have such audits performed should not be penalized.

6. Request for Comment: Proposed Exclusion of Foreign Issuers

• Two companies requested that foreign companies be exempted from coverage of the proposal regardless of the forms they use to file their reports.³²² One commenter noted that it is a foreign private issuer that voluntarily files on Forms 10-Q and 10-K.³²³ The proposal could conflict with domestic reporting requirements and discourage voluntary filing on these forms . Another commenter noted that it is a Canadian issuer that does not meet the definition of a foreign private issuer so it must therefore file on Form 10-K and 10-Q.³²⁴ It must file its reports along with a separate MD&A supplement with its home country regulator concurrently with the filing of its reports with the SEC. Financial statements also must be sent to each stockholder concurrently with their filing with the home country regulator. Shortening deadlines would cause additional challenges and potential costs to meet these requirements.

• One foreign company thought it would be feasible to reduce the deadline for Form 20-F from six months to five months.³²⁵ If any obligation to file quarterly reports was established for foreign issuers, it believed filing such reports within 30 days would be feasible for the second and third fiscal quarters with a non-negligible increase in costs and workload. However, the deadline would not be feasible for the first and fourth quarters due to additional workload during those periods.

• Eleven commenters (one accounting firm, seven companies, one corporate executive, one institutional investor and one professional association) did not think there was a reason to not also shorten deadlines for foreign filers.³²⁶ According to one of these commenters, the technological and processing improvements that have been successful in domestic companies have been established for foreign issuers as well.³²⁷ If foreign issuers are sophisticated enough to participate in the U.S. securities markets, they can comply with more rigorous disclosure standards that have long been applicable to domestic companies. Having different deadlines also creates the potential to place domestic companies at a competitive disadvantage compared to foreign companies.

• Five commenters (three accounting firms and two professional associations) thought that the issues involving foreign issuers are sufficiently different as to warrant a separate study and rule proposal.³²⁸ One commenter suggested the Commission solicit input on a number of specific questions before issuing a separate release.³²⁹ One commenter recommended delaying accelerated reporting for domestic companies until the Commission adopts analogous rules for foreign issuers.³³⁰ The commenter also recommended linking the foreign issuer deadlines to the distribution of audited financial statements to shareholders or their filing with the home country regulator.

• Two commenters (one law firm and one professional association) thought the deadlines for foreign issuers should not be accelerated at all.³³¹ These registrants face additional requirements, such as GAAP reconciliation, English translations and home country reporting requirements. Accelerated filing would be costly, burdensome and would undermine efforts to encourage foreign registrants to access U.S. capital markets.

7. Request for Comment: Entering or Exiting Accelerated Filer Status

• Five commenters (two accounting firms, one law firm and two professional associations) offered alternative approaches for measuring public float, if that test is used.³³² The proposed measurement date occurs too late in the fiscal year to give issuer's sufficient time to modify systems and prepare for accelerated reporting. Companies would have already set their calendar for audit events and would have to rely on more expensive outside help. Two commenters suggested the determination for accelerated filer status be made at the beginning of the issuer's fiscal year to give companies enough time to modify their systems, as necessary.³³³ One commenter noted the test should be based off of the public float as reported in the company's Form 10-K for the previous year.³³⁴ One professional association thought the date should be fixed at the last trading day of the company's third fiscal quarter.³³⁵ One commenter recommended that companies determine their filing status based on their prior year determination and public float as described in the proposing release and, if the criteria are met, begin accelerated filing with the following year's Form 10-K.³³⁶

• Two commenters (one professional association and one accounting firm) thought it would be confusing to companies and investors to become an accelerated filer during the middle of a fiscal year.³³⁷

• One professional association thought that utilizing different public float standards for entering and exiting accelerated filer status would be confusing.³³⁸ The threshold should be the same.

• Another professional association thought the standards for entering and exiting accelerated filer status should be the same.³³⁹ Qualifying for the Small Business Reporting System to exit is too difficult because of the revenues test and the length of time necessary to qualify. Under the proposal, a company whose public float falls from $75 million to $26 million would remain saddled by accelerated deadlines even though such a filer no longer enjoys Form S-3 and may be just as burdened by accelerated deadlines as would other similarly sized companies that never met the accelerated filer definition. Not only would a same standard for exiting and exiting avoid dissimilar treatment, it reduces regulatory complexity. Notice of exiting would be unimportant. If the Commission does impose a notice requirement, draconian consequences for non-compliance, such as loss of Form S-3 eligibility, should be avoided.

• One company was concerned that companies on the margin may be faced with alternating requirements from one year to the next.³⁴⁰

• One company believed notice should be provided for entering and exiting accelerated filer status.³⁴¹ However, another law firm thought that notice of exiting may be useful, but notice of entering would not provide any particular benefit.³⁴² Another law firm objected to requiring any notice of entering or existing accelerated filer status as it would only increase the number of requirements companies face.³⁴³ The commenter also thought that the current proposal might not allow companies to exit accelerated filing quickly enough to reduce and control costs.

D. Transition Period

• Three commenters (one institutional investor and two companies) supported the proposed transition periods for annual and quarterly reports.³⁴⁴

• One professional association supported the proposed transition period for Form 10-K.³⁴⁵ However, the proposal for Form 10-Q should be effective for the second quarter of the first fiscal year ending after October 31, 2002.

• Thirty-two commenters (one academic, two accounting firms, one financial analyst, one institutional investor, one investor relations professional, twenty companies, three law firms and three professional associations) recommended a phase-in approach if the Commission elected to proceed with the proposal.³⁴⁶ A gradual approach would allow companies, their advisors and investors time to adjust to accelerated reporting and the additional disclosure requirements being considered by the Commission. Examples included:

  • One professional association that surveyed its members noted that the majority of the respondents were of the view that it would be possible to meet the proposed deadlines if an adequate transition and phase-in period were provided.³⁴⁷ For annual reports, the commenter recommended at least an 18 month transition period for companies with a calendar year fiscal year end. For quarterly reports, the commenter recommended reducing the deadline to 40 days with a transition period similar to that suggested for annual reports, and a year later, reducing the deadline to 35 days.

  • Fifteen commenters recommended shortening deadlines a set number of days per year over the next few years.³⁴⁸ For example, one academic recommended that any changes be phased-in in ten-day increments for Form 10-K and five-day increments for Form 10-Q, and that no change be made in the filing deadlines until registrants have had at least a year of experience with responding to the recently proposed changes to MD&A and Form 8-K.³⁴⁹ This commenter also suggested that at the end of each phase-in period, the Commission should review the costs and benefits of the accelerated filing deadlines that have been adopted and the likely costs and benefits of the next steps in the phase-in plan.

  • Seven commenters recommended reducing the deadlines on a less extensive basis for a certain period of time and then re-evaluating whether additional acceleration is necessary.³⁵⁰ For example, one professional association recommended reducing deadlines to 80 days for annual reports and 40 days for quarterly reports on an experimental basis.³⁵¹ At such time as registrants and the Commission gain experience with the accelerated deadlines, further reductions could be considered. Any further reductions should be phased-in over time.

  • One commenter suggested phasing in deadlines over time for different tiers of companies based on their net revenues determined in accordance with GAAP.³⁵²

  • One professional association recommended a phase-in period of two years.³⁵³ Another commenter recommended a phase-in period of three to five years.³⁵⁴ One law firm recommended reducing the deadlines to 75 days for annual reports and 40 days for quarterly reports over a one year phase-in period.

  • One law firm recommended a longer phase-in period, or in the alternative, the rules should provide that late-filing will not affect the availability of short-form registration, the availability of Rule 144 and the availability of Form S-8 so long as the report is filed within the current deadlines.³⁵⁵

  • One company recommended a delay in implementation along with a pilot program conducted with registrants with different sizes and levels of complexity to determine if the deadlines are feasible.³⁵⁶ Filings by pilot participants would be non-public and would not be subject to liability. If the pilot is successful, implementation would be phased-in over at least a two-year period.

  • Two commenters believed there should be a two year waiting period before changing the annual report deadline to 75 days.³⁵⁷

• Thirty-six commenters (four accounting firms, one attorney, twenty-four companies, one law firm and six professional associations) requested a longer transition period if the Commission elected to proceed with the proposal to facilitate the required changes that would be necessary.³⁵⁸ Examples included:

  • One commenter thought that at a minimum, sufficient time should be allowed for companies to prepare and complete one full periodic reporting cycle with new staff and processes in place.³⁵⁹

  • Two accounting firms recommended deferring the effective date of any change in reporting deadlines until the fiscal year beginning after adoption of the change.³⁶⁰

  • Two commenters recommended delaying the effective date until annual reports filed for fiscal years beginning after December 15, 2002.³⁶¹ One company recommended a similar approach but for annual reports filed for fiscal years beginning after December 31, 2002.³⁶²

  • One company recommended delaying the effective date of the proposals until the end of the registrant's first fiscal year ending after October 31, 2003.³⁶³

  • One accounting firm recommended that the deadlines should not be applicable until the 2003 calendar year annual reports to be followed by quarterly reporting in calendar year 2004.³⁶⁴ If deadlines are linked to earnings releases, the commenter believed application could begin with calendar 2002 reporting.

  • Two commenters commenter suggested the rules not be effective until April 30, 2004.³⁶⁵ Another commenter recommended this period for quarterly reports.³⁶⁶

  • Two commenters commenter recommended a delay of at least twelve months.³⁶⁷

  • One commenter recommended a one to two year transition period.³⁶⁸

  • Two commenters recommended a delay of 18-24 months.³⁶⁹

  • One commenter recommended a two-year transition.³⁷⁰

  • One company recommended making the proposals effective for quarterly reports for the first quarter in 2003.³⁷¹

  • Three commenters recommended a 12-18 month transition period for mid-cap companies, and the Commission may wish to require during this period that these filers must file reports within a specified period of time after earnings releases.³⁷²

  • Two commenters recommended a longer transition period due to the recent events surrounding Arthur Anderson.³⁷³ One of these commenters recommended that any newly adopted amendments become effective for periods ending after April 1, 2003.³⁷⁴ This commenter also recommended deferring any adoption of accelerated deadlines until companies have had an adequate opportunity to adjust to the Commission's new disclosure initiatives.

  • Two commenters recommended delaying effectiveness until some period after the Commission adopts any proposals for improving MD&A, such as the Commission's proposals concerning critical accounting policy disclosure.³⁷⁵

• One professional association thought the proposal should not be adopted without evidence that issuers generally will be able to make filings that are thoughtful and accurate in the shortened time frames.³⁷⁶ The proposals should be made and considered only after, not before, the Commission has implemented its proposed changes to disclosure and companies have had an opportunity to assimilate those new requirements.

• One professional association urged the Commission to postpone adoption of the proposals until EDGAR has been modernized to be more efficient and user friendly.³⁷⁷ EDGARizing reports represents an inordinately high percentage of the total time spent in the filing process.

• One company urged the Commission to postpone its decision on the proposals until it had clarified its plans for future changes to the EDGAR filing system.³⁷⁸

IV. Comments on Disclosure Concerning Website Access to Reports

A. General Comments

Commenters generally supporting proposal (60):³⁷⁹

• One professional association mentioned that almost 90% of companies in its March 2002 survey expected to accomplish the proposal with ease.³⁸⁰ Currently, 87% post their annual report on their website either simultaneously with filing or shortly thereafter. Over half link to the Commission's EDGAR website, a fourth link to a third party website and the remainder post documents directly. The commenter also pointed to other studies that demonstrated that corporate websites are a significant source of information to investors and the media.

• One professional association noted that over 90% of the respondents to its survey can and will provide website access to the specified Exchange Act forms if the proposed rules are adopted, and 70% currently do so.³⁸¹ The proposal would aid in encouraging companies to make information available in a variety of locations and hence make corporate information more widely accessible and disseminated. Investors would find this information useful, and the proposed disclosure requirement would provide sufficient notice to investors of the available sources of corporate information.

• One company remarked that along with technological improvements, the sophistication of investors and their demands for accurate, timely information have increased.³⁸² Providing filings immediately via the Internet provides broader and quicker dissemination and availability. The disclosure requirement in the Form 10-K should be sufficient to notify investors of the available sources of information.

• One professional association not only agreed with the proposal, but believed that providing website access to reports should be required.³⁸³

Commenters generally opposing the proposal (21):³⁸⁴

• Three commenters (two companies and one professional association) did not believe the Commission should be in the position of regulating the content of company websites, but should continue to encourage the use of websites as a means of investor communication.³⁸⁵ Also, requiring same day access is not reasonable.

• Six commenters (five companies and one professional association) objected to the proposal because they thought it unnecessarily duplicates the Commission's EDGAR system.³⁸⁶ One commenter did not agree that a variety of electronic sources provides any more widespread access to information than a single source.³⁸⁷ An additional company thought the proposal was an apparent refutation of the concept of companies using EDGAR to file with the SEC as a means of more timely and wider disclosure.³⁸⁸

• Ten companies suggested that the desired improvement in instant accessibility of information could be best accomplished by the Commission modernizing the EDGAR system, including by making filings immediately available to the public on its website.³⁸⁹ Three of the commenters, while admitting that they currently did not meet the proposed definition of accelerated filer, noted they do not have the resources in-house to post filings on their website.³⁹⁰ Also, they outsource their EDGAR filings, so coordination would be required between the third party it contracts with for web hosting and the third party that handles its EDGAR filings. The cost of simultaneous web posting would be significant, and, there would be little benefit to investors in light of the companies' limited trading market.

• Three commenters (two companies and one law firm) believed website access to reports should be strongly encouraged as a "best practice" instead of mandatory, especially considering that reports are already available from EDGAR.³⁹¹ Two of these commenters did suggest that a company's website address could be required to disclose its website address in Commission filings, and to disclose where filings are readily available, such as a box to check if the company is posting that filing to its website.³⁹²

Commenters suggesting modifications to the proposal (60):³⁹³

• Eleven commenters (one attorney and ten companies) believed that requiring a permanent statement on a company's website referring to EDGAR or hyperlinking to EDGAR should be sufficient.³⁹⁴ One professional association thought the proposed disclosure should not be required for companies that provide access through a hyperlink to EDGAR.³⁹⁵ The proposed disclosure is boilerplate and of little use to investors.

• One company, while supporting the goals of the proposal, suggested narrowing the scope of the proposed disclosure to avoid unnecessarily lengthening reports.³⁹⁶ The commenter questioned whether such disclosure would be meaningful and helpful to investors or is essentially boilerplate. The commenter noted the following as examples:

  • Anyone reading the disclosure in the Form 10-K already has found some means of accessing the report. Accordingly, it is difficult to see the utility of telling the reader of alternative means to find the same information.

  • The disclosure of a company's website address may result in more boilerplate because some issuers may feel it necessary to include lengthy language disclaiming any incorporation of information contained on their websites.

  • If the Commission expanded the requirement to require website access of Securities Act filings, issuers may feel obliged to include additional boilerplate to disclaim any intent to engage in an offering by providing such access.

• One company believed the requirement should not be overly onerous for larger companies, but adequate time should be provided to develop the appropriate website presentations and to address technical issues regarding translating such data into website format.³⁹⁷ The company also mentioned that the proposal would be costly and involve a number of additional people who are not currently involved in the SEC reporting process. The company also questioned the actual benefit of the proposal as any investor can currently obtain a company's filings through FreeEDGAR.

• Two professional associations requested clarification that a link to EDGAR will satisfy the website access requirement.³⁹⁸

• One company requested clarification that a hyperlink to a third-party is acceptable, regardless of whether the provider charges a fee for downloading or printing.³⁹⁹ Also, the commenter wanted clarification that companies would not be responsible for errors or omissions on the third-party site and there is no assumption of liability if the third-party does not archive historical filings.

• One company requested clarification that a disclaimer of responsibility for the accuracy of a third-party service will not make the website posting ineffective.⁴⁰⁰ The company also requested clarification that exhibits and information incorporated by reference would not be required to be posted.

• One professional association did not object to a requirement to provide access to exhibits or supplemental schedules that are required to be filed by EDGAR, but believed additional computerization of paper-only documents should not be required.⁴⁰¹

• One law firm questioned what the consequences would be if a company or third party website was down for some period of time.⁴⁰² In addition, the commenter questioned the consequences of not complying with the proposal. Would investors have a cause of action for failure to disclose material information? Would registrants be in violation of Regulation FD if due to heavy traffic the material was available to some users but not others? Would registrants be considered an untimely filer for purposes of Form S-3?

• One professional association thought that given that Internet crime is a pervasive problem, unless a registrant is allowed to hyperlink to the Commission's website, registrants should be provided "good faith" protection should copies of filings unknowingly become corrupted.⁴⁰³

• One company believed that there should be some relief for filings in cases where a computer virus or some other unexpected event causes the filing not to be available within the required time frame.⁴⁰⁴

B. Proposal: Disclosure Regarding Website Access to Reports

• Two professional associations believed that now that the Commission provides real-time access to filings on its website, there is no longer a need for same day posting of filings on company websites.⁴⁰⁵ EDGAR provides the most convenient website access to filed documents for investors generally. The benefits of website posting in the face of the burdens involved become less important with the availability of real-time access through EDGAR. One of these commenters did not object to requiring companies to refer to the Commission's website and Public Reference Room for access to filings.⁴⁰⁶ Also, if the Commission elects to proceed with the proposal, the same day standard should be eliminated now that the Commission provides real-time access to filings. Posting as soon as reasonably practicable should be sufficient.

• One accounting firm did not think this aspect of the proposal would encourage companies to make information available in a variety of locations as many companies are already making the information available on their websites.⁴⁰⁷ Since the information posted to the company's website would be the same information posted on EDGAR, investors would not necessarily find this information any more useful than that posted on EDGAR.

• One company questioned the need for this requirement.⁴⁰⁸ The reader of the disclosure would already have access to the annual report, so presumably he or she knows how to access the registrant's filings.

• Twenty-five commenters (nineteen companies, one law firm and five professional associations), most generally agreeing with the proposal, believed that companies should be allowed until the next day or business day to have filings available on their website.⁴⁰⁹ The additional time would allow companies to overcome any unusual technical difficulties and to coordinate multi-party interfaces in a complex technology environment. One of these commenters suggested this lag until the Commission's EDGAR website posts in real-time.⁴¹⁰ Five additional commenters requested longer lags.⁴¹¹ One professional association suggested a deadline of either (a) by the same time on the following business day as the registrant received confirmation of acceptance of the filing, or (b) for filings confirmed after 12:00 noon, by 12:00 noon on the following business day and for filings confirmed before 12:00 noon, by 12:00 midnight that day.⁴¹² Whatever the standard, the commenter suggested that a company should be deemed to be in compliance if it submits the report within the applicable time period to a service that the company reasonably believes to be reliable and capable of promptly posting the materials on the appropriate website.

• One professional association also mentioned that a same day access requirement would be too burdensome, but the commenter did not offer an alternative.⁴¹³ The commenter suggested the Commission consider a hardship exception that would permit an adjustment of the web posting date where posting is delayed for reasons beyond a company's control. The commenter also requested clarification that any periodic reports that companies move to the "archive" section of their websites would still be considered as available on those sites.

• Four commenters did not believe that companies should be required to post their filings in a shorter time frame than the filings are otherwise available through EDGAR.⁴¹⁴

• Two companies thought that if a same day rule is adopted, there should be some time allowance for filings made at the end of the day.⁴¹⁵ One additional company questioned whether a filing submitted after EDGAR filing hours such that it receives a file date of the next business day would need to be posted to its website that night or the next day.⁴¹⁶

• One company believed there should be disclosure only if a company does not intend to make its reports available on its website the same day as filing.⁴¹⁷

• One professional association suggested the following modifications if the Commission elects to proceed with the proposal:⁴¹⁸

  • Change the language in the proposed rule from "make available . . . on your Internet website" to "on or through your Internet website" to make clear that hyperlinking to a third party website is acceptable.

  • Make clear the specificity required for a hyperlink. If www.sec.gov is too general, a link to the EDGAR search site should suffice. The commenter would not consider it necessary to link to the specific company listing or to specific documents.

  • Replace the proposed standard of posting a document as soon as reasonably practicable after it is filed with the Commission with a standard tied to the issuer's receipt of notification of acceptance of a filing as filers are generally unaware of the exact moment when a filing first becomes available to the public.

C. Proposal: Disclosure Regarding Why a Company Does Not Post Reports

• Five commenters (one company, two law firms and two professional associations) objected to the disclosure.⁴¹⁹ One law firm questioned the appropriateness to effectively impart a substantive requirement through a disclosure requirement.⁴²⁰ One professional association objected to this disclosure because it would have no informational value to investors and would merely add further boilerplate.⁴²¹ Further, the importance of this requirement to encourage same-day posting has been reduced as a result of the availability of real-time filings on the Commission's website. It would be helpful for the Commission to provide guidance as to what type of disclosure a company should provide when the company's policy is to post its filings on a same-day basis, but, for example, during one quarter it was unable to post the document for technical reasons until the next business day. It is also unclear whether, and for how long, missing the same-day posting standard on a single occasion would require a registrant to make this disclosure.

• Three small companies thought the proposed disclosure was punitive.⁴²²

D. Proposal: Disclosure of Company Internet Address

• Five commenters (one accounting firm and four companies) did not object to disclosure of a company's website address in their annual report.⁴²³ One commenter noted that many companies currently disclose this information in their reports, so there should not be any reason why a company would not want to provide it.⁴²⁴ The proposed disclosure should be useful to investors. However, another commenter, while not objecting to the disclosure, was not sure that the disclosure would significantly increase investor understanding of available sources of information.⁴²⁵

• Seven commenters (one accounting firm, one company, one law firm and four professional associations) did not object to the proposed disclosure, but thought the Commission should expressly provide that including a website address in a filing does not constitute incorporation by reference of any website information into the filing unless, and only to the extent of, information expressly incorporated by reference.⁴²⁶ Two of these commenters also supported requiring this disclosure in Securities Act registration statements.⁴²⁷ One of these commenters believed the disclosure would best be accomplished on the cover page of the Form 10-K.⁴²⁸ One commenter believed the Commission's position in footnote 75 of the proposing release is inconsistent.⁴²⁹ Another suggested the concern over incorporation by reference could be eliminated if the content of the Commission's position in footnote 75 is included in Regulation S-X and that position is extended to apply to references to company websites in other Commission filings.⁴³⁰ Also, the commenter noted that instead of the Commission's reference to inactive textual references, it favored a simple requirement that companies include a plain English statement that the website information is not incorporated by reference unless the company expressly incorporates such information.

• One professional association suggested that companies should have flexibility to direct investors to a website or specific page on the company's website maintained for investors rather than to the company's home page, or to a link to another site on which the company's filings can be accessed, such as the SEC's EDGAR filing site.⁴³¹

• One professional association suggested the Commission clarify that the mere fact that a statement is contained on a website does not create a duty to update that statement so long as the date of which the statement was originally made is clearly indicated, the statement was accurate on the date it was originally made and the company has not indicated to investors that they can rely on the statement as of any date after the date it was originally made.⁴³²

E. Proposal: Disclosure of Where Else Investors Can Access Reports

• Three commenters (two companies and one professional association) mentioned they did not object to the proposed disclosure.⁴³³

• Three commenters (one accounting firm and two professional associations) thought if the Commission agrees that hyperlinking to the Commission's EDGAR website would suffice for website access, this disclosure would be duplicative and unnecessary.⁴³⁴ One of these commenters thought that Item 101 of Regulation S-K should simply be amended to require companies that maintain websites but do not provide timely website access to their Exchange Act filings to inform investors that real-time copies of the filings can be accessed for no charge at www.sec.gov or, if the company chooses to identify them, at other websites.⁴³⁵

• One professional association thought it would be helpful to have staff familiar with various hyperlinks and vendors available by e-mail and at a toll-free telephone number during a six month phase-in period.⁴³⁶

F. Request for Comment: Costs of the Proposal

• Five commenters (one accounting firm, two companies, one institutional investor and one professional association) believed the proposal would result in no or minimal additional costs and would not be unduly burdensome to implement, particularly since the proposal is intended to apply only to accelerated filers.⁴³⁷ One professional association mentioned that the majority of respondents to its survey expected the proposal would incur no additional costs.⁴³⁸ Other respondents estimated expected additional costs from zero to $25,000 per year for staffing to administer the site.

• Thirty-five commenters (twenty-nine companies, one investor relations professional and five professional associations) mentioned that many companies already provide some version of this information, either through directly or through hyperlinking.⁴³⁹ One investor relations professional mentioned that over 90% of the 2,000 companies whose websites it hosts or manages already make such filings available essentially immediately upon filing.

G. Request for Comment: Whether the Disclosure Should be in Other Filings

• Five commenters (one accounting firm, three companies and one professional association) suggested or did not object to having the disclosure also be included in quarterly reports.⁴⁴⁰ According to one commenter, this would assist investors in determining the availability of information throughout the year, and companies should also be required to disclose their website address in Securities Act registration statements.⁴⁴¹ One commenter noted that while some companies will also put this disclosure in their annual report to shareholders, others will prefer not to in order to save space and printing costs.⁴⁴² Another company supported this disclosure in the annual report to shareholders and in earnings releases.⁴⁴³

• One company did not believe the disclosure is needed in other filings.⁴⁴⁴

H. Request for Comment: Whether the Disclosure Should Cover Website Access to All Company Filings

• Two companies supported requiring disclosure of whether a company provides website access to all of its Securities Act and Exchange Act filings.⁴⁴⁵ An additional commenter believed it is reasonable to require disclosure of whether access to all Exchange Act filings is provided.⁴⁴⁶ One institutional investor thought the proposal should also extend to proxy statements.⁴⁴⁷

• One professional association did not believe that a company should be required to disclose whether it provides access to all of its Exchange Act filings, but did not object to also requiring access to the proxy statement.⁴⁴⁸

I. Request for Comment: Proposed Exclusion of Smaller Issuers

• Nine commenters (two accounting firms, four companies and three professional associations) thought there is no meaningful reason to limit the proposal to accelerated filers.⁴⁴⁹ The utility of information about report access is likely to be greater for small issuers because their reports are less likely to be available online, their investors may be less sophisticated and knowledgeable about report availability and the issuer may have less resources to provide information in a timely manner in response to investor requests. One commenter thought the need to obtain timely information by investors outweighs the minimal incremental cost that may be associated with providing the information directly.⁴⁵⁰ One commenter thought that the ability to hyperlink to EDGAR obviates the need to differentiate "accelerated filers" because all registrants with a website could comply by hyperlinking to EDGAR.⁴⁵¹

• One professional association suggested the Commission consider extending the requirement to all reporting companies after evaluating initial experience with the requirement by accelerated filers.⁴⁵²

J. Request for Comment: Proposed Exclusion of Foreign Issuers

• Five commenters (one accounting firm, two companies, one institutional investor and one professional association) recommended extending the proposal to foreign issuers.⁴⁵³ According to many of these commenters, it would not be overly burdensome for foreign private issuers to comply with the proposed disclosure requirement.

• One foreign company supported the proposal because it would assure transparent and prompt information to the markets.⁴⁵⁴ Also, under Italian regulations, the commenter already is required to post all financial reports on its website the day of filing.

• One professional association suggested the Commission consider extending the requirement to all reporting companies after evaluating initial experience with the requirement by accelerated filers.⁴⁵⁵

• One accounting firm believed the decision to include foreign issuers should be the subject of a separate rule proposal.⁴⁵⁶

K. Eliminating the 24-hour Delay For the Commission's EDGAR Website

• Fifteen commenters (one institutional investor association, one attorney, twelve companies and one professional association) supported eliminating the 24-hour delay.⁴⁵⁷ Several of these commenters believed eliminating the delay would make it easier to comply with the proposal.

• One company had the following comments on eliminating the 24-hour delay:⁴⁵⁸

  • Removing the 24-hour delay should be addressed in a separate proposal.

  • Removing the 24-hour delay would greatly devalue the level one feed by competing with the Commission's level one feed customers. Normally, a devaluation of a product results in a commensurate reduction in price. The commenter questioned what level of price reduction could level one subscribers expect to receive.

  • The commenter questioned when the arrangement with EDGAR Online to provide the public with a free source of live filings would be terminated.

  • Eliminating the 24-hour delay would represent a major change in the Commission's EDGAR contract with its vendor and questioned when the Commission would put out a request for comment for a rebid of the contract.

L. Transition Period

• Three commenters (one company, one institutional investor and one professional association) agreed with the transition period for the website access proposal.⁴⁵⁹

• Seven commenters (two professional associations and five companies) thought the proposal should only become effective after the 24-hour delay on EDGAR is removed.⁴⁶⁰

• One company thought that requiring same day posting would be a burden at this point and time, but that such a requirement within the next two years would not be an unreasonable expectation.⁴⁶¹

• One company urged the Commission to postpone its decision on the proposals until it had clarified its plans for future changes to the EDGAR filing system.⁴⁶²

V. Paperwork Reduction Act

• One company believed the Commission's estimate for preparing quarterly reports was too low.⁴⁶³ It estimated 400 total hours. The Commission's estimate of 1,720 hours for the annual report is more accurate. Also, instead of an estimate of 25% of work performed in-house versus 75% of work performed by outside advisors, the estimate should be 90% for in-house work and 10% for outside advisors. Another company suggested the Commission should consider whether and what percentage of public companies prepare reports using in-house personnel as opposed to outside consultants.⁴⁶⁴ The commenter mentioned it prepares over 95% of its reports by in-house personnel.

VI. Other Issues Raised by Commenters

• Fifty commenters (one academic, four accounting firms, seven professional associations, two institutional investors, one institutional investor association, thirty-two companies, one corporate executive and two law firms) supported additional requirements for earnings releases.⁴⁶⁵ Examples included the following:

  • Twenty-five commenters recommended that earnings releases or other standardized earnings information be filed with the Commission, such as on Form 8-K.⁴⁶⁶ One of these commenters noted that such an approach may delay earnings releases but that would be acceptable if the quality of earnings releases increased.⁴⁶⁷ An additional commenter recommended requiring earnings releases to be filed for those meeting the definition of accelerated filer.⁴⁶⁸ One professional association outlined the following benefits from requiring earnings information to be filed:⁴⁶⁹

    • It would recognize the importance of the current informal disclosure system that operates effectively to inform the marketplace.

    • It would enhance the attention and level of care companies bring to those disclosures because they know they will become part of the formal reporting system.

    • It would bring those disclosures into the formal reporting system where they are available electronically on a widespread basis.

    • It would allow market forces to dictate the timing and content of this disclosure and obviate the need to differentiate among public reporting companies based on their perceived ability or inability to meet more current disclosure requirements.

  • Eight commenters suggested requiring earnings releases to include a GAAP reconciliation or other measures to limit non-GAAP presentation.⁴⁷⁰

  • Twenty commenters thought the Commission (or a self regulatory organization) should consider issuing or promoting minimum requirements or guidelines on earnings releases.⁴⁷¹ These standards could recommend or require that companies provide a balance sheet, income statement, a statement of cash flows and a description of significant factors necessary to understand reported results. One of these commenters thought that if the adoption of such standards served to delay the timing of earnings releases, the trade-off between quality and speed would be justified.⁴⁷² Three commenters, however, objected to additional requirements on the contents of earnings releases or limiting what a registrant can include.⁴⁷³

    One professional association recommended shortening deadlines to 80 days for the annual report and 40 days for the quarterly report, provided that companies issue an earnings release that complies with minimum standards to be recommended by the National Investor Relations Institute and Financial Executives Institute.⁴⁷⁴ These guidelines would require, at a minimum, a balance sheet, an abbreviated plain English MD&A and a discussion of key drivers of earnings and material factors affecting financial condition. Another commenter suggested accelerating filing periods as proposed, but allowing a registrant to file within the existing periods if it submits earnings results on a Form 8-K by the accelerated deadline.⁴⁷⁵

  • Two commenters suggested that earnings releases be required to be posted on company websites.⁴⁷⁶

• Two commenters recommended a 30 day extension of the comment period.⁴⁷⁷

• Twelve commenters (one accounting firm, one attorney and ten companies) believed EDGAR should be revised to accept other document formats (e.g., MSWord and Excel, WordPerfect, Lotus and Adobe Acrobat), which would reduce the time and expense now devoted to "EDGARizing" filings.⁴⁷⁸ Many thought this change would be especially critical if the Commission accelerated filing deadlines as companies could more easily file themselves and the extra time outside service providers need to EDGARize reports would be reduced. Additional formats would also enhance readability of the reports.

• Five commenters (one company, one financial analyst, two institutional investors and one law firm) thought the Commission should consider requiring a quarterly report for the fourth fiscal quarter.⁴⁷⁹

• Six commenters (two companies, two law firms and two professional associations) requested the Commission revisit whether website posting is acceptable for purposes of Regulation FD.⁴⁸⁰ Also, two of these commenters also recommended revisiting the ability of companies to post prospectuses on their primary website to satisfy prospectus delivery requirements under the Securities Act.⁴⁸¹

• Nine commenters (six companies, one corporate executive and two professional associations) believed the Commission should explore ways to simplify and streamline current disclosure and accounting requirements.⁴⁸²

• One professional association asked for the ability to file EDGAR documents 24 hours a day, 7 days a week.⁴⁸³

• One academic thought that the U.S. continuous disclosure framework is lacking compared to other developed markets such as the European Community, Australia and Canada.⁴⁸⁴ The Commission's intention to propose additions to Form 8-K would not adequately remedy this deficiency.

• One company objected to accelerating delivery of the annual report to shareholders.⁴⁸⁵

• One company believed the Commission should institute as a matter of practice a black-out period during which no new guidance is provided between reporting period end and the related filing date.⁴⁸⁶ Another company suggested considering disclosure volume and due dates when establishing the effective dates of future proposals.⁴⁸⁷

• One individual offered the following additional rule-making suggestions:⁴⁸⁸

  • Mandatory electronic filing for Forms 3, 4 and 5 with two years' notice before the change takes effect. The current filing deadlines on these forms are adequate.

  • Mandatory electronic filing for Form 144 with current filing deadlines.

  • Stop allowing executives to delay reporting private sales of stock back to the company.

  • Examine Form 6-K filings for eventual accelerated reporting.

  • Require foreign issuers to file electronically via EDGAR.

• One individual believed companies should be required to include an "F" or other designation in their trading symbol to identify if they are incorporated off-shore.⁴⁸⁹

• One company believed that additional filings on Form 8-K should be avoided.⁴⁹⁰

• One professional association noted that not all investors have access to documents electronically.⁴⁹¹ Therefore, issuers should provide a short summary of information incorporated by reference and the filing date of the reports in their preliminary prospectuses or term sheets. This information should also be provided on their websites or the company should provide a direct link to their reports.

• One company believed that the auditor peer review should be replaced with an SEC division that reviews audit engagement documentation to ensure adherence to accounting and SEC standards.⁴⁹²

• One company urged the Commission to craft its guidance, releases and regulations in plain English.⁴⁹³ Registrants should also be afforded a reasonable period of time to comply with new disclosure mandates.

• One individual recommended that filings could not be made during the first 10-15 business days following period end to guarantee that accountants and other preparers have additional time to complete their work.⁴⁹⁴ Projections should also be prohibited during this period and perhaps also during the last 5-10 business days before period end. Another commenter did not think an audit report should be issued before 3.5 months after year end.⁴⁹⁵ Auditors should also be more involved in firm bookkeeping.

_______________________

1	The comment letter was submitted by a group led by Professor Grundfest and joined by the following law firms: Wilson Sonsini Goodrich & Rosati Professional Corporation; Brobeck, Phleger & Harrison LLP; Cooley Godward LLP; Covington & Burling; Fenwick & West LLP; Gray Care Ware & Friedenrich LLP; Morrison & Foerster LLP; Munger, Tolles & Olson LLP; Orrick, Herrington & Sutcliffe LLP; and Venture Law Group, a Professional Corporation.
2	AFL-CIO; AIMR; Choi; CII; Delphi; Dow; EDGAR Online; Fidelity; Goll; Griffin; ICI; Maverick; Microsoft; Schulke; Siebel; Steinberg; TIAA-CREF; T. Rowe Price; United Tech; VI Tech.
3	CII.
4	AIMR.
5	AFL-CIO; Delphi.
6	TIAA-CREF.
7	VI Tech.
8	Schulke.
9	T. Rowe Price.
10	EDGAR Online.
11	ICI.
12	Fidelity.
13	A&P; AFG; AIA; AIG; Am. Safety; Amerada; AOS; Arris; Associated; AT&T; Aztar; Bartells; Beisser; Bennett; BioReliance; BONY; Bowater; Brown; Capitol Federal; Cendant; CFC; Chevron Phillips; ChevronTexaco; CHS; Community Bankshares; CNA Financial; CNA Surety; Compass; Concurrent; Conway; Crescent; CRI; Cross Country; Dean; Dial; Diamond; Electronics for Imaging - Graves; Electronics for Imaging - Miller; Electronics for Imaging - Ritchie; Enterprise; FIAC; First Capital; First Mutual - Easterlin; First Mutual - Mandery; First Mutual - Stenslie; First Mutual - Valaas; First Tennessee; Flora; FPL; GAFRI; Gibson; Global Preferred; GrandSouth; Great Plains; Greenberg; Harper; HealthSouth; Heritage Bank; Heritage Financial; Hubbard; Hurlbutt; IBC; IFLC; IMA; Infonet; Jacobs; Janet; JD Edwards; Kerr; Krakauer; Lawrence; LeBoeuf; Liberty Media; Loews; M&M; M&T; Marathon; Massey; Michael McDonald; McGuireWoods; MedImmune; Melman; Mercury; Navistar; NeoMagic; Northern Border; NUI; Paccar; Phillips; Pinnacle; Pitney; Progress; PTC; Reardon; Reed Smith; Republic; Robbins; Rock; Rouse; Schwab; Sempra; Shearman; Sinclair; Somanetics; Sotheby's; Sovereign; Spherix; Standard; StarTek; Stewart; Storagetek; Stowell; Tetra; Thacher; Toro; TriQuint; Troutman; Union Planters; UniSource; USB; Valero; Veritas; Vick; Vlasek; Weatherford; Weiss; Wild Oats; Wilson; Wyrick.
14	A&P; AFG; Amerada; Arris; Associated; CFC; CHS; Conway; CRI; Cross Country; Deloitte; EEI; Electronics for Imaging - Graves; Enterprise; First Capital; FirstEnergy; First Mutual - Easterlin; First Mutual - Mandery; First Mutual Stenslie; First Mutual - Valaas; GAFRI; Gibson; Global Preferred; H&R Block; HealthSouth; Heritage Bank; Heritage Financial; Hubbard; IBC; ILFC; IMC; JC Penney; JD Edwards; Kerr; Kimball; M&M; Melvin; Navistar; Northern Border; NUI; PG&E; Pitney; Progress; Sempra; Sinclair; Stewart; Storagetek; SunTrust; Tetra; Toro; Triarc; Troutman; UniSource; USB; Valero; Vlasek; Washington Mutual; Wyrick.
15	ABA; AIA; Caremark; HealthSouth; NYSBA; Perkins; Thacher; UbiquiTel; US Unwired; Valero.
16	PWC.
17	Dean.
18	Kerr.
19	ABA; David Abbott; Abbott Laboratories; ACCA; ACLI; AEP; AFLAC; AFP; AICPA; Air Products; Alex. Brown; Allegheny; Allstate; Am. Bankers Assoc.; Anchor; AOL; Armstrong; ASCS; Ashland; Astoria; Baldwin; Bank of America; BDMP; BDO; Bertram; Bond; BRT; Cabot; Capital One; Caremark; CCBN; CDR; CH Energy; Chubb; Ciesielski; Cigna; Cinergy; Clancy; Cleary; Clifford Chance; Coca-Cola; Comcast; Commercial; Computer Sciences; Constellation; Cook; Corning; Crawford; Crowe; CSX; Davey; Dechert; Dell; Deloitte; Detwiler; Dollar; Dorchester; E&Y; EEI; Eli Lilly; Emerson; FEI; FirstEnergy; Foley; Forest City; Grant Thornton; Grundfest; H&R Block; Halliburton; Harrah's Hibernia; Horizon; IMC; Imperial; Intel; Iomega; JC Penney; Jefferson; Jones; JPMorgan Chase; Kellogg; Kimball; Kodak; KPMG; Lamar; Locke; Long; Lorne; MacDermid; MAMSI; Markel; McDonald's; McMillan; MDU; Mellon; Melvin; Merck; Merrill Lynch; Monsanto; NAREC; NAREIT; NIRI; Nortel; Nucor; NYCBA; NYSBA; Papa John's; Parexel; PepsiCo; Pepsi Bottling; Perkins; Perma-Fix; Pfizer; PG&E; Pharmacia; PPL; Primedia; Principal; Provident; PWC; Roxanne Reardon; Robert Reed; S&C; SAES; SBC; Scana; Scholastic; SCI; SIA; Sidley; Smith; Southern Co; Southern Union; Sun Trust; Technitrol; Timpson; Toys R Us; Triarc; Trover; TXU; Ubiquitel; UnionBanCal; Unum; US Unwired; USS; UST; Valmont; Washington Mutual; Wells Fargo; Western; Williams; XTO; Zygo.
20	BRT.
21	S&C.
22	JC Penney; S&C.
23	Electronics for Imaging - Graves; Mellon.
24	ABA; AIG; Air Products; Allstate; Amerada; Associated; AT&T; Bartells; BDO; BioReliance; Caremark; Cendant; ChevronTexaco; Cleary; Deloitte; Dell; Dial; EEI; FirstEnergy; First Tennessee; Flora; Forest City; Gibson; Grant Thornton; Halliburton; Hibernia; Hurlbutt; IBC; IMA; Jacobs; JD Edwards; KPMG; Lawrence; LeBoeuf; Liberty Media; Lorne; M&T; MacDermid; Marathon; MedImmune; NAREIT; Nucor; NYCBA; Papa John's; Perkins; PG&E; Pharmacia; Pitney; PTC; PWC; Patrick Reardon; Rock; Schwab; Smith; Somanetics; Southern Co; Storagetek; Thacher; Toro; Triarc; Troutman; UniSource; USB; UST; Vick; Weiss; Western.
25	Amerada; BioReliance; FirstEnergy; Grant Thornton; Halliburton; Hurlbutt; Jacobs; KPMG; LeBoeuf; PG&E; PTC; PWC; Patrick Reardon; Somanetics; Thacher; Toro; UniSource; Weiss.
26	Amerada; Grant Thornton; Halliburton; KPMG; LeBoeuf; PG&E; PTC; Patrick Reardon; Toro; UniSource; Weiss.
27	Bartells; Smith.
28	Bartells.
29	Air Products; Jacobs; JD Edwards.
30	JD Edwards; Liberty Media.
31	Jacobs; Lawrence.
32	Lawrence.
33	Ashland; Bank of America; CCBN; CH Energy; Cinergy; Constellation; CSX; Dollar; FEI; MAMSI; McDonald's; MDU; Pfizer; Pharmacia; PPL; Smith; Wells Fargo.
34	CCBN.
35	CH Energy.
36	McDonald's
37	Constellation; CSX.
38	Ashland.
39	Intel.
40	AFLAC; AOL; Clifford Chance; Detwiler; Kodak; Long; Standard; USB; USS.
41	AEP; AOL; Clifford Chance; Long; Standard; USS.
42	Kodak.
43	Detwiler.
44	USB.
45	AFLAC.
46	ACCA; AFP; AICPA; Alex. Brown; Air Products; Am. Bankers Assoc.; ASCS; BDO; BRT; Chubb; Ciesielski; Cigna; Cleary; Coca-Cola; Comcast; Commercial; Crawford; Deloitte; Dell; E&Y; Eli Lilly; Halliburton; Harrah's; Hibernia; Iomega; JPMorgan Chase; Kodak; KPMG; Lamar; Locke; MacDermid; Markel; Mellon; Merck; Merrill Lynch; Michael McDonald; Monsanto; NAREC; NAREIT; Nucor; NYCBA; NYSBA; Perkins; Provident; S&C; SBC; Scholastic; SIA; Sidley; Southern Co; Southern Union; Toys R Us; TXU; UnionBanCal; UniSource; UST; Valmont; Washington Mutual.
47	BRT.
48	Crawford; Iomega; NYSBA; S&C.
49	ACCA; AFP; AICPA; Alex. Brown; Air Products; Am. Bankers Assoc.; BDO; Chubb; Ciesielski; Cleary; Coca-Cola; Comcast; Commercial; Deloitte; Dell; E&Y; Eli Lilly; Halliburton; Harrah's; Hibernia; JPMorgan Chase; Kodak; KPMG; Lamar; Locke; MacDermid; Markel; Mellon; Merck; Merrill Lynch; Michael McDonald; Monsanto; NAREC; NAREIT; Nucor; NYCBA; Perkins; Provident; Scholastic; SIA; Sidley; Southern Co; Southern Union; Toys R Us; TXU; UniSource; UST; Valmont; Washington Mutual.
50	Monsanto.
51	NIRI.
52	ASCS.
53	Cigna; SBC; UnionBanCal.
54	UnionBanCal.
55	SBC.
56	Bertram; Cook; Detwiler; Long.
57	Long.
58	Bertram.
59	Cook.
60	Detwiler.
61	AFLAC; AICPA; Ashland; Bank of America; BDO; Capital One; CCBN; CH Energy; Chubb; Clancy; Cleary; Commercial; Constellation; Crowe; Deloitte; Dell; Dollar; E&Y; Hibernia; Iomega; Jefferson; Jones; JPMorgan Chase; KPMG; Lamar; MacDermid; Merrill Lynch; Michael McDonald; MDU; Merck; Navistar; NYCBA; Perkins; Phillips; Provident; PWC; Scholastic; Smith; Southern Co; Sovereign; TriQuint; TXU; UnionBanCal; USB; Washington Mutual.
62	ACCA; AFP; Air Products; Am. Bankers Assoc.; ASCS; Ashland; BRT; Cigna; Cinergy; Coca-Cola; Comcast; Crawford; CSX; Eli Lilly; FEI; Halliburton; Harrah's; Intel; Kodak; Locke; Markel; McDonald's; Mellon; NAREC; NAREIT; NIRI; NYSBA; Pfizer; Pharmacia; S&C; SBC; SIA; Sidley; Southern Union; Toys R Us; UST; Wells Fargo.
63	FEI.
64	BRT.
65	ACCA; Air Products; Am. Bankers Assoc.; Ashland; Cinergy; Coca-Cola; Comcast; Crawford; Eli Lilly; Halliburton; Harrah's; Kodak; Locke; Markel; McDonald's; Mellon; NAREC; NAREIT; NYSBA; Pharmacia; S&C; SBC; SIA; Sidley; Southern Union; UST; Wells Fargo.
66	Toys R Us.
67	ASCS.
68	AFP; Cigna; Intel; Pfizer.
69	CSX.
70	NIRI.
71	PWC.
72	Southern Union.
73	Dow.
74	AFL-CIO; AIMR; AOL; Armstrong; Bond; CCBN; CII; Coca-Cola; Comcast; CSX; Delphi; Dow; EDGAR Online; FEI; IMC; Maverick; McDonald's; Parexel; PepsiCo; Pfizer; Pharmacia; SBC; Schulke; TIAA-CREF; T. Rowe Price; UnionBanCal; VI Tech.
75	ACCA; AEP; AICPA; ASCS; Astoria; BDO; Cinergy; Coca-Cola; Computer Sciences; Fidelity; ICI; JPMorgan Chase; KPMG; Marathon; MDU; PPL; Perma-Fix; PG&E; Phillips; Republic; S&C; SCI; Sidley; Toys R Us; UniSource; XTO.
76	PepsiCo.
77	Dow.
78	AIMR.
79	AEP; ASCS; CII; Dow.
80	Griffin.
81	Alex. Brown; Ciesielski.
82	ABA; AIA; Allstate; Arris; Bartells; BDO; Capitol Federal; Caremark; ChevronTexaco; Chubb; Clifford Chance; Computer Sciences; Conway; CRI; Eli Lilly; Gibson; HealthSouth; Hibernia; Hubbard; Hurlbutt; Infonet; Jacobs; Loews; Lorne; M&T; MacDermid; Mellon; Melman; Melvin; MDU; Papa John's; Smith; Sotheby's; Storagetek; Technitrol; TXU; Weiss; Zygo.
83	HealthSouth.
84	ACCA; BDMP; Arris; Merrill Lynch.
85	ABA; ACCA; BioReliance; Compass; Commercial; Constellation; Dollar; Emerson; First Mutual - Valaas; Greenberg; Hubbard; IBC; IFLC; Kellogg; Kimball; Liberty Media; M&T; Mellon; Melvin; Merck; NYCBA; Pitney; Scana; TriQuint; Union Planters; USS; Wild Oats; Wyrick.
86	Smith.
87	ABA.
88	AFLAC; Gibson; IFLC; NUI; Reed Smith; TXU; Zygo.
89	TXU.
90	NUI.
91	ACCA; Clifford Chance; CRI; LeBoeuf; MedImmune; Mercury; Storagetek.
92	BRT.
93	Arris; CCBN; CDR; CNA Financial; CNA Surety; Global Preferred; Loews; UnumProvident.
94	CDR.
95	UnumProvident.
96	CFC; Computer Sciences; FirstEnergy; Halliburton; NAREC; Pinnacle; Reed Smith; Sovereign; Union Planters; XTO.
97	FEI.
98	ABA; ASCS; Compass; Computer Sciences; Global Preferred; Grundfest; JC Penney; MacDermid; NAREIT; PTC; Reed Smith; Sempra; Troutman; Weiss.
99	BioReliance; Jacobs; MDU; PWC; Patrick Reardon.
100	PWC.
101	Caremark.
102	BDO.
103	Papa John's.
104	AFL-CIO; AIMR; Bertram; CII; Delphi; Dow; Microsoft; TIAA-CREF.
105	CII.
106	Microsoft.
107	Maverick.
108	A&P; ABA; Abbott Laboratories; ACCA; AEP; AFG; AFLAC; AFP; AIA; AICPA; AIG; Allegheny; Amerada; Am. Safety; Armstrong; Anchor; AOS; Arris; ASCS; Ashland; Associated; Astoria; AT&T; Aztar; Baldwin; Bank of America; Bartells; BDMP; BDO; Beisser; BioReliance; BONY; Bowater; Brown; BRT; Cabot; Capitol Federal; Caremark; CDR; Cendant; CFC; Chevron Phillips; ChevronTexaco; CHS; Chubb; Cleary; Clifford Chance; CNA Financial; CNA Surety; Comcast; Commercial; Compass; Computer Sciences; Concurrent; Conway; Crawford; Crescent; Cross Country; Crowe; Dean; Deloitte; Dell; Diamond; E&Y; EEI; Electronics for Imaging - Graves; Electronics for Imaging - Miller; Electronics for Imaging - Ritchie; Eli Lilly; Emerson; Enterprise; FIAC; FirstEnergy; First Tennessee; Flora; Foley; Forest City; FPL; GAFRI; Gibson; Global Preferred; Grant Thornton; Great Plains; Greenberg; Grundfest; H&R Block; Halliburton; Harrah's; HealthSouth; Heritage Bank; Hibernia; Horizon; Hubbard; Hurlbutt; IBC; IFLC; IMA; IMC; Infonet; Iomega; Jacobs; JC Penney; JD Edwards; Jefferson; Jones; Kellogg; Kerr; Kimball; Kodak; KPMG; Krakauer; Lawrence; LeBoeuf; Liberty Media; Locke; Loews; Lorne; M&T; MacDermid; Marathon; Markel; Massey; Merck; Mercury; Michael McDonald; McGuireWoods; MedImmune; Mellon; Melman; Melvin; Merrill Lynch; Monsanto; Navistar; NeoMagic; NAREC; NAREIT; NIRI; Nortel; Northern Border; Nucor; NUI; NYCBA; NYSBA; Paccar; Papa John's; Parexel; PepsiCo; Perkins; Perma-Fix; PG&E; Pharmacia; Pinnacle; Pitney; Primedia; Principal; Progress; Provident; PTC; PWC; Patrick Reardon; Reed Smith; Republic; Robbins; Rock; Rouse; S&C; Scana; Schwab; SCI; Sempra; Shearman; SIA; Sidley; Sinclair; Sotheby's; Southern Co; Southern Union; Sovereign; Spherix; Stewart; Storagetek; Stowell; SunTrust; Technitrol; Tetra; Thacher; Toro; Toys R Us; Triarc; Troutman; Trover; TXU; UbiquiTel; Union Planters; UniSource; UnumProvident; USB; USS; UST; US Unwired; Valero; Vick; Vlasek; Washington Mutual; Weatherford; Weiss; Western; Wild Oats; Williams; Wilson; Wyrick; XTO; Zygo.
109	Capital One; Cinergy; Constellation; CSX; Dollar; FEI; Intel; Lamar; MAMSI; MDU; Pfizer; Phillips; PPL; UnionBanCal; Wells Fargo.
110	Long.
111	ASCS.
112	A&P; ABA; ACCA; ACLI; AEP; AFG; AFLAC; AFP; AICPA; AIG; Air Products; Allegheny; Amerada; Am. Safety; Anchor; AOS; Armstrong; ASCS; Associated; Astoria; AT&T; BDO; Beisser; BONY; Bowater; Brown; Cabot; Capitol Federal; Caremark; Cendant; CFC; Chubb; Cleary; Clifford Chance; Chevron Phillips; ChevronTexaco; Cigna; CNA Financial; CNA Surety; Coca-Cola; Comcast; Commercial; Compass; Computer Sciences; Concurrent; Crawford; Crescent; Cross Country; Crowe; Dean; Deloitte; Dell; Diamond; E&Y; EEI; Eli Lilly; Emerson; Enterprise; FIAC; FirstEnergy; First Tennessee; Foley; Forest City; FPL; Global Preferred; Grant Thornton; Great Plains; Greenberg; Grundfest; H&R Block; HealthSouth; Heritage Bank; Heritage Financial; Hibernia; Horizon; Hubbard; IFLC; IMA; IMC; Infonet; Iomega; Jacobs; JC Penney; JD Edwards; Jefferson; JPMorgan Chase; Jones; IBC; Kerr; Kimball; Kodak; KPMG; LeBoeuf; Locke; Loews; Lorne; M&T; MacDermid; Marathon; Massey; McGuireWoods; MedImmune; Mellon; Melvin; Merck; Mercury; Merrill Lynch; Monsanto; NAREC; NAREIT; Navistar; Nortel; Northern Border; Nucor; NYCBA; NYSBA; Paccar; Papa John's; Parexel; Pepsi Bottling; PepsiCo; Perkins; PG&E; Pharmacia; Pinnacle; Pitney; Primedia; Principal; Progress; Provident; PTC; PWC; Reed Smith; Republic; Rouse; S&C; SBC; Scana; Schwab; SCI; Sempra; Shearman; SIA; Sidley; Sinclair; Somanetics; Sotheby's; Southern Co; Southern Union; Sovereign; Spherix; Standard; Stewart; Storagetek; Stowell; SunTrust; Technitrol; Tetra; Thacher; Toro; Toys R Us; Triarc; Troutman; TXU; Union Partners; UniSource; USB; USS; UST; Valero; Veritas; Vick; Washington Mutual; Weatherford; Wild Oats; Williams; Wyrick; XTO; Zygo.
113	Ashland; Bank of America; BRT; Capital One; CH Energy; Cinergy; Constellation; CSX; Dollar; FEI; Lamar; MAMSI; MDU; Pfizer; Phillips; PPL; UnionBanCal; Wells.
114	Long.
115	ASCS.
116	A&P; ABA; AIG; BDO; Beisser; Cendant; CNA Financial; CNA Surety; Commercial; Crowe; Deloitte; FirstEnergy; H&R Block; Hibernia; Janet; Jefferson; Liberty Media; Massey; Melvin; PWC; Rock; Schwab; Sidley; Spherix; Tetra; Thacher; UniSource; UST; Vlasek; Weatherford.
117	FEI; Merck.
118	Beisser.
119	AIA; AIG; Astoria; Caremark; CFC; Chevron Phillips; Chubb; Cinergy; Commercial; Deloitte; E&Y; EEI; Eli Lilly; Grundfest; Hibernia; Hubbard; IFLC; Iomega; Kerr; Lamar; LeBoeuf; Mellon; NAREC; Navistar; Nucor; Phillips; PTC; Reed Smith; Republic; Scana; SCI; Sempra; SIA; Sidley; Sinclair; Southern Union; Sovereign; SunTrust; UnionBanCal; USB; USS; Washington Mutual; XTO.
120	BDO; Grundfest; Horizon; Liberty Media; Lorne.
121	AEP; AICPA; KPMG.
122	Enterprise.
123	Dow.
124	TIAA-CREF.
125	Microsoft.
126	Choi.
127	Goll.
128	A&P; ABA; Abbot Laboratories; ACCA; ACLI; AEP; AFG; AFLAC; AICPA; AIG; Allegheny; Am. Bankers Assoc.; Amerada; Armstrong; Arris; ASCS; Associated; Astoria; AT&T; Bank of America; BDMP; BDO; BioReliance; BONY; BRT; Cabot; Capital One; Caremark; CFC; Chevron Phillips; ChevronTexaco; CHS; Chubb; Cinergy; Cleary; Clifford Chance; CNA Financial; CNA Surety; Coca-Cola; Comcast; Compass; Computer Sciences; Constellation; Conway; Corning; Crawford; Crescent; CRI; Crowe; Dean; Deloitte; Diamond; Dollar; E&Y; EEI; Electronics for Imaging - Graves; Eli Lilly; Emerson; FEI; FIAC; FirstEnergy; First Tennessee; Forest City; FPL; GAFRI; Grant Thornton; Great Plains; Greenberg; Grundfest; H&R Block; Halliburton; Harper; Harrah's; HealthSouth; IBC; IFLC; IMA; IMC; Intel; Iomega; Jacobs; JD Edwards; Jefferson; JPMorgan Chase; Kerr; Kimball; Kodak; KPMG; LeBoeuf; Lamar; Locke; Loews; Liberty Media; M&T; Marathon; Markel; Massey; McGuireWoods; MDU; MedImmune; Mellon; Melman; Mercury; Merrill Lynch; Monsanto; NAREC; NAREIT; Navistar; NIRI; Northern Border; Nucor; NYCBA; NYSBA; Paccar; Papa John's; Pepsi Bottling; PepsiCo; Perkins; PG&E; Phillips; Pinnacle; Pitney; Principal; Progress; PTC; PWC; Rouse; S&C; SBC; Scholastic; Schwab; Sempra; Shearman; SIA; Sidley; Sinclair; Southern Co; Southern Union; Sovereign; Standard; Stewart; Stowell; SunTrust; Technitrol; Thacher; Toro; Triarc; TriQuint; Troutman; Trover; TXU; Union Planters; UniSource; USB; USS; UST; Valero; Valmont; Veritas; Washington Mutual; Weatherford; Wells Fargo; Western; Williams; Wyrick; XTO.
129	AICPA.
130	AICPA; BDO; NAREIT.
131	ABA; Abbott Laboratories; AEP; AICPA; Allegheny; Bank of America; BDMP; BioReliance; BRT; Capital One; Caremark; Cinergy; Cleary; Coca-Cola; Compass; Computer Sciences; Constellation; Crescent; Dean; Deloitte; E&Y; EEI; Emerson; FirstEnergy; First Tennessee; Forest City; FPL; Global Preferred; Great Plains; Grundfest; IBC; IFLC; IMA; Intel; Jefferson; JPMorgan Chase; Kodak; KPMG; LeBoeuf; Locke; M&T; Marathon; McGuireWoods; MDU; MedImmune; Mellon; Merrill Lynch; Monsanto; NAREC; Northern Border; Paccar; Perkins; PG&E; Phillips; Pitney; Principal; PWC; Rouse; Scana; Shearman; Sovereign; Stewart; SunTrust; Toro; Troutman; TXU; UnionBanCal; Union Partners; UniSource; USB; USS; UST; Veritas; Washington Mutual; Wells Fargo; Williams.
132	Dow.
133	Papa John's.
134	NIRI.
135	ASCS.
136	ABA; Grundfest.
137	ABA; ACLI; AEP; AFLAC; AIG; Anchor; Armstrong; Astoria; BioReliance; BONY; Chevron Phillips; ChevronTexaco; Chubb; Cigna; CNA Financial; CNA Surety; Commercial; Crawford; Crescent; Cross Country; Dean; Deloitte; Diamond; E&Y; Eli Lilly; HealthSouth; Hubbard; JC Penney; Liberty Media; Markel; MDU; Melman; Melvin; Mercury; NAREC; NAREIT; Northern Border; PespiCo; PG&E; PWC; Sinclair; Sovereign; Spherix; Triarc; TXU; UniSource; Washington Mutual; Western; XTO.
138	ABA; Abbott Laboratories; AEP; AICPA; AIG; BDO; Brown; BRT; ChevronTexaco; Coca-Cola; Crescent; Dean; Dechert; Deloitte; Dow; Eli Lilly; Grant Thornton; HealthSouth; Infonet; Jacobs; Kodak; KPMG; Locke; Loews; Marathon; NIRI; Nucor; PepsiCo; Perkins; Perma-Fix; Primedia; PTC; PWC; Reed Smith; Republic; Shearman; Sidley; Southern Union; Stewart; Triarc; Valero; Weiss; Western.
139	Grant Thornton.
140	ABA; AFLAC; Ashland; Baldwin; Cleary; Computer Sciences; Halliburton; Hurlbutt; IFLC; JC Penney; Jones; Marathon; Perkins; PG&E; PWC; Schwab; SIA; Sidley; Triarc; UnionBanCal; UniSource.
141	AEP; AIA; ASCS; BioReliance; Chevron Phillips; ChevronTexaco; Chubb; Diamond; E&Y; Electronics for Imaging - Miller; Electronics for Imaging - Ritchie; Grundfest; HealthSouth; Iomega; Janet; JC Penney; Mercury; Melvin; NAREIT; XTO.
142	ASCS.
143	Progress.
144	ABA; BDO; CFC; Cleary; CNA Financial; CNA Surety; Deloitte; FEI; Horizon; IMA; JC Penney; Liberty Media; Massey; Mercury; Papa John's; TXU; UbiquiTel; UST; US Unwired; VI Tech; XTO.
145	ABA; AICPA; AOL; AT&T; Cendant; Clifford Chance; Corning; Crescent; Deloitte; EEI; IFLC; IMC; KPMG; Liberty Media; McMillan; NAREIT; PWC; Rouse; Sempra; UniSource.
146	UniSource.
147	AOL.
148	AICPA; ASCS; KPMG; Liberty Media; Merck; Pharmacia; Shearman; Southern Union; USS; Valero.
149	Brown; Caremark; Deloitte; Grundfest; KPMG; Liberty Media; NYCBA; PWC; XTO.
150	Caremark; XTO.
151	AOS; Deloitte; Global Preferred; Kodak; Liberty Media; NAREC; NAREIT; Reed Smith; Rouse; Troutman.
152	Armstrong; Eli Lilly; Mellon; UniSource.
153	Amerada; Chubb; CNA Financial; CNA Surety; FirstEnergy; Kodak; Trover; Williams.
154	AFLAC; Dow; FEI; Kellogg; Paccar; Toro; Valero.
155	Am. Bankers Assoc.; Anchor.
156	ASCS; JPMorgan Chase; NYCBA; Roxanne Reardon.
157	Horizon; UbiquiTel; US Unwired.
158	Dean.
159	ASCS.
160	Am. Bankers. Assoc.
161	ABA; Cook; Dial; Foley; Halliburton; HealthSouth; Hubbard; Infonet; JC Penney; Lorne; PepsiCo; Schwab; Sidley; Troutman; UniSource; USS.
162	Griffin.
163	Armstrong; ASCS; Cleary; CSX; Deloitte; Dow; E&Y; McGuireWoods; NAREIT; NYSBA; Nucor; Pharmacia; PWC; Triarc; USS; XTO.
164	AICPA; Deloitte; KPMG; USS.
165	MacDermid.
166	Maverick.
167	ABA; ACLI; AFLAC; AICPA; Air Products; Allegheny; Anchor; Baldwin; BDO; Caremark; CDR; Comcast; Computer Sciences; Crawford; Dechert; Dorchester; E&Y; EEI; Grant Thornton; Grundfest; Halliburton; Harper; Harrah's; HealthSouth; Hibernia; Intel; Jefferson; KPMG; Lorne; NAREC; Maverick; McGuireWoods; Melvin; Papa John's; Pepsi Bottling; PepsiCo; Perma-Fix; PG&E; PWC; SCI; Southern Union; Stewart; Triarc; T. Rowe Price; UnumProvident; UST; Western; Wild Oats.
168	Alex. Brown; CCBN; Ciesielski; MAMSI; Williams.
169	Horizon; UbiquiTel; US Unwired.
170	Comcast; PepsiCo.
171	PepsiCo.
172	ABA.
173	NIRI.
174	ASCS.
175	ABA; ASCS; BDO; Dorchester; Intel; Maverick; Southern Union; Williams.
176	CFR.
177	Caremark; Lorne.
178	AEP; AIA; Am. Bankers Assoc.; AFLAC; Chubb; Cleary; Corning; Dollar; Dow; Eli Lilly; HealthSouth; JC Penney; Kimball; Kodak; M&T; Microsoft; Pfizer; Primedia; PWC; Standard; SunTrust; Thacher; USS; UST; XTO.
179	AEP; AIA; Am. Bankers Assoc.; Chubb; Cleary; Corning; Dollar; Dow; Eli Lilly; JC Penney; Kimball; Kodak; M&T; Microsoft; Pfizer; Primedia; Standard; SunTrust; Thacher; USS; XTO.
180	AICPA; E&Y; KPMG; Lorne.
181	E&Y.
182	Deloitte; Primedia.
183	ABA.
184	AEP.
185	AEP; Am. Bankers Assoc.; Astoria; Bank of America; CFC; Corning; Deloitte; Emerson; Foley; Intel; Kellogg; Long; Nucor; NYCBA; Southern Co; Southern Union; S&C; SIA; SunTrust; Wyrick; XTO.
186	Astoria; Long.
187	Wyrick.
188	AEP.
189	Crowe.
190	PWC.
191	ASCS; BioReliance; Dollar; Dow; MacDermid; Maverick; McGuireWoods; Pfizer; Technitrol; UniSource; Wild Oats.
192	Dow; Lamar; Loews; PepsiCo; Principal.
193	Lamar; Loews; PepsiCo; Principal.
194	GAFRI; Melman; NAREIT.
195	Air Products; ACCA; AFG; AFLAC; AIG; Allegheny; Amerada; ASCS; BioReliance; BONY; Capital One; Cendant; Cleary; Clifford Chance; Constellation; Crowe; Dell; EEI; Electronics for Imaging - Miller; Electronics for Imaging - Ritchie; Emerson; First Tennessee; Forest City; Great Plains; Greenberg; Halliburton; Hibernia; IFLC; IMC; Imperial; JPMorgan Chase; Kodak; Locke; Markel; Mellon; Navistar; Nucor; Pepsi Bottling; PepsiCo; Perkins; Pfizer; Pitney; Reed Smith; Scana; Shearman; Southern Union; Standard; Technitrol; Thacher; Triarc; TriQuint; Troutman; Union Planters; XTO.
196	Allegheny; EEI; Thacher.
197	AEP; ASCS; BioReliance; Dow; IFLC; Greenberg; PepsiCo; Southern Union; USS.
198	A&P; AEP; Allstate; BDO; Chubb; CHS; Commercial; Compass; Crawford; E&Y; HealthSouth; JC Penney; Kerr; KPMG; Locke; Melman; Merrill Lynch; Phillips; PWC; S&C; Southern Co; SunTrust; USS; Valero.
199	A&P.
200	E&Y.
201	A&P; ABA; ACCA; AICPA; ASCS; BioReliance; Capital One; Capitol Federal; CFC; Chevron Phillips; Chubb; CHS; Commercial; Concurrent; Constellation; Crawford; Cross Country; Dean; Deloitte; Diamond; Electronics for Imaging - Graves; Electronics for Imaging - Miller; Electronics for Imaging - Ritchie; Eli Lilly; Global Preferred; Greenberg; Grundfest; Halliburton; HealthSouth; Heritage Financial; IBC; IMC; Iomega; JC Penney; JD Edwards; JPMorgan Chase; Kodak; KPMG; McDonald's; Mercury; Merrill Lynch; Nucor; Papa John's; Pepsi Bottling; Perkins; Phillips; Pitney; PPL; Progress; Rouse; S&C; Scana; SCI; Shearman; Sinclair; Standard; Stowell; Technitrol; Tetra; Toro; UnionBanCal; USS; Veritas; Washington Mutual; Wild Oats; Williams; Wilson; Zygo.
202	ASCS; BRT.
203	AFL-CIO; AIMR; Delphi; Dow; TIAA-CREF.
204	Dow.
205	Technitrol; VI Tech.
206	Chubb.
207	ASCS.
208	Dollar.
209	UnionBanCal.
210	HealthSouth.
211	Deloitte.
212	Halliburton.
213	Dean.
214	Southern Union.
215	Sinclair.
216	Allstate.
217	NeoMagic.
218	Heritage.
219	Nucor.
220	Troutman.
221	BRT.
222	CRI.
223	A&P; ABA; ACLI; AEP; AFG; AFLAC; AFP; AIG; Amerada; Am. Bankers Assoc.; Am. Safety; Ashland; Associated; Astoria; Aztar; BioReliance; BONY; CNA Surety; Coca-Cola; Commercial; Compass; Concurrent; Conway; Crescent; Dell; Dial; E&Y; EEI; FIAC; FirstEnergy; Global Preferred; Grundfest; Hibernia; Horizon; Hubbard; IBC; IMC; Intel; JC Penney; Jefferson; Kellogg; Kerr; Kimball; KPMG; Liberty Media; Locke; Loews; MacDermid; Massey; MedImmune; Mercury; Navistar; NAREC; NAREIT; NIRI; Northern Border; NYCBA; Papa John's; Perkins; Pitney; Primedia; Provident; PTC; PWC; Rouse; Scana; Sidley; Sotheby's; Sovereign; Storagetek; Stowell; Tetra; Thacher; Toro; Trover; Triarc; UniSource; USB; USS; Valero; Veritas; Washington Mutual; Wild Oats; Wyrick; XTO.
224	Cinergy, Dollar; FEI.
225	AEP.
226	Southern Union; Stowell; Wyrick.
227	A&P; AEP; AFLAC; AFP; CFC; CNA Surety; Commercial; Deloitte; E&Y; H&R Block; Navistar; NYCBA; Troutman; Wild Oats.
228	FEI; Intel.
229	ABA; AEP; AFG; AFLAC; AICPA; Allstate; Arris; Astoria; BioReliance; BONY; Capital One; CNA Surety; Commercial; Conway; Dean; Deloitte; Dollar; EEI; FirstEnergy; Greenberg; Harrah's; Horizon; IMA; IMC; Intel; JC Penney; KPMG; Liberty Media; Locke; Massey; MedImmune; Melman; Mercury; Reed Smith; Rock; Scana; Sotheby's; Sovereign; Technitrol; Thacher; Triarc; UbiquiTel; UniSource; USS; US Unwired; Valero; Vlasek; Wyrick.
230	Arris.
231	Mercury.
232	AFLAC; Community Bankshares; E&Y; FIAC; First Capital; GrandSouth; H&R Block; HealthSouth; Heritage; Liberty Media; Nucor; Sotheby's; Southern Union; Toro; Triarc; Troutman; USS; Wyrick.
233	ASCS.
234	AFG; Am. Bankers Assoc.; BioReliance; Commercial; HealthSouth.
235	HealthSouth; Southern Union.
236	HealthSouth; Kellogg; Locke; Southern Union.
237	Capitol Federal; CFC; Marathon; Republic.
238	Phillips.
239	AIMR; Maverick.
240	Wild Oats.
241	AEP; AFLAC; ASCS; Coca-Cola; Comcast; Dow; E&Y; Intel; LeBoeuf; McGuireWoods; NYSBA; PepsiCo; PWC; Southern Co; Technitrol.
242	AIMR; Maverick; PWC.
243	AEP; ASCS; Dow; E&Y; Smith; USS.
244	Smith.
245	Triarc.
246	AEP; Comcast; Dow; E&Y: Eli Lilly; HealthSouth.
247	Dow.
248	E&Y.
249	Air Products.
250	NYCBA.
251	AEP; AICPA; Air Products; AOL; AOS; ASCS; BioReliance; Caremark; Cleary; Comcast; Crowe; Deloitte; Dow; E&Y; Eli Lilly; HealthSouth; KPMG; McGuireWoods; NYCBA; PWC; Technitrol; Triarc; XTO.
252	AICPA; Corning; E&Y; KPMG; McMillan.
253	Delphi.
254	ABA; Caremark; Comcast; Commercial; Dow; Chevron Phillips; FEI; Forest City; MacDermid; Markel; Monsanto; NYCBA; PWC; Technitrol; Troutman; Wyrick; XTO.
255	EDGAR Online; USS.
256	Dow.
257	Troutman.
258	AFL-CIO; Corning; Crowe; KPMG; Maverick; McGuireWoods; NAREC; NAREIT; NYSBA; Triarc; Williams.
259	Maverick.
260	ABA; AEP; BioReliance; Cleary; EEI; Forest City; Grant Thornton; Grundfest; HealthSouth; JC Penney; Kodak; Liberty Media; Loews; Lorne; Melman; NAREIT, Union Planters; USS; Valero.
261	HealthSouth.
262	Grant Thornton.
263	Dechert; Western.
264	Western.
265	AFP; KPMG; Western.
266	Crowe.
267	Cleary.
268	ABA; AICPA; Baldwin; BDO; Caremark; Ciesielski; Community Bankshares; Davey; Dorchester; First Capital; Foley; GrandSouth; Grant Thornton; Grundfest; Melman; NYCBA; NYSBA; PWC; Shearman; Southern Union; Thacher; USS.
269	Grundfest.
270	ABA.
271	Melman; PWC; Thacher.
272	NYSBA.
273	Community Bankshares; First Capital; GrandSouth.
274	NYCBA; Southern Union.
275	NYCBA.
276	Foley.
277	Grant Thornton.
278	Davey.
279	USS.
280	AICPA; BDO.
281	BDO.
282	AICPA.
283	AICPA; Am. Bankers Assoc.; Arris; Baldwin; BDMP; Ciesielski; E&Y; HealthSouth; Jones; KPMG; Melman; NAREC; NYSBA; Perkins; Thacher; Triarc; Troutman.
284	Arris.
285	Triarc.
286	Troutman.
287	Baldwin; E&Y; KPMG.
288	KPMG.
289	BDMP.
290	NAREC.
291	Jones.
292	Am. Bankers Assoc.
293	Baldwin.
294	Baldwin.
295	Horizon; Ubiquitel; US Unwired.
296	Ubiquitel; US Unwired.
297	E&Y.
298	Roxanne Reardon.
299	AFL-CIO; AIMR; NAREIT.
300	ABA; AICPA.
301	ABA.
302	Dow; FEI; Loews; Shearman.
303	USS.
304	Schulke.
305	Griffin.
306	Am. Bankers Assoc.; Baldwin; BDMP; CNA Surety; Conway; FIAC; First Mutual - Easterlin, First Mutual - Mandery, First Mutual - Stenslie; First Mutual - Valaas; Gibson; Grundfest; Harper; Heritage Bank; Heritage Financial; IMA; Jones; M&M; NeoMagic; NIRI; Perkins; Robbins; Sidley; StarTek; Thacher; Vick.
307	ABA; Arris; BDMP; Beisser; Corning; Greenberg; Grundfest; Horizon; Jones; Krakauer; NIRI; Perkins; Shearman; Troutman; UbiquiTel; UniSource; USS; US Unwired.
308	PWC.
309	Mellon.
310	Community Bankshares; First Capital; GrandSouth.
311	Am. Bankers Assoc.; Anchor; Associated; BDMP; Compass; FIAC; First Capital; Gibson; IBC; Provident; PWC; SunTrust; Thacher; Troutman; Union Planters; Washington Mutual.
312	Associated.
313	BDMP.
314	ACLI; AFLAC; AIA; Allstate; Am. Safety; CFC; CNA Financial; CNA Surety; GAFRI; Jefferson; Mercury; Robert Reed; Troutman.
315	ACLI.
316	Global Preferred.
317	NAREC; NAREIT; Rouse.
318	Scana; Troutman.
319	Marathon; Phillips.
320	HealthSouth.
321	David Abbott.
322	Imperial; Nortel.
323	Imperial.
324	Nortel.
325	SAES.
326	AIMR; Brown; Chevron Phillips; Comcast; Deloitte; Dow; Kodak; Krakauer; Markel; Maverick; SBC.
327	Dow.
328	AICPA; E&Y; IMA; KPMG; PWC.
329	PWC.
330	E&Y.
331	Cleary; NYCBA.
332	ABA; AICPA; E&Y; KPMG; Troutman.
333	E&Y; AICPA.
334	Troutman.
335	ABA.
336	KPMG.
337	ABA; KPMG.
338	ABA.
339	NAREIT.
340	BioReliance.
341	USS.
342	McGuireWoods.
343	Wyrick.
344	Corning; TIAA-CREF; VI Tech.
345	FEI.
346	Abbott Laboratories; AEP; Alex. Brown; Allstate; ASCS; Astoria; BDO; BRT; Cabot; CDR; Ciesielski; Dollar; Emerson; Forest City; Grundfest; IMC; JC Penney; KPMG; McGuireWoods; Merrill Lynch; Nucor; NYSBA; Parexel; Principal; S&C; Sidley; Southern Co; Technitrol; Trover; TXU; Williams; XTO.
347	BRT.
348	Allstate; Astoria; Cabot; CDR; Dollar; Forest City; Grundfest; IMC; McGuireWoods; Merrill Lynch; Parexel; Principal; Southern Co; Williams; XTO.
349	Grundfest.
350	Abbot Laboratories; BDO; Emerson; Merrill Lynch; NYSBA; Technitrol; TXU.
351	NYSBA.
352	Nucor.
353	ASCS.
354	Trover.
355	S&C.
356	AEP.
357	Alex. Brown; Ciesielski.
358	ACLI; AICPA; AFP; Armstrong; AOL; Bond; Bowater; Cleary; CNA Financial; CNA Surety; Comcast; Deloitte; E&Y; FirstEnergy; JC Penney; Jefferson; Halliburton; Horizon; Kimball; Kodak; KPMG; Mellon; NAREIT; Navistar; NYCBA; Pfizer; Primedia; PWC; Scana; SIA; Sovereign; UbiquiTel; UnionBanCal; United Tech; USS; US Unwired.
359	Kimball.
360	E&Y; KPMG.
361	AICPA; Deloitte.
362	Mellon.
363	Scana.
364	PWC.
365	Armstrong; SIA.
366	UnionBanCal.
367	AFP; NAREIT.
368	ACLI.
369	Navistar; Primedia.
370	JC Penney.
371	AOL.
372	Horizon; UbiquiTel; US Unwired.
373	Bond; NYCBA.
374	NYCBA.
375	Cleary; Mellon.
376	ABA.
377	FIAC.
378	TechBooks.
379	AFP; AIA; AIMR; Allstate; AOL; AOS; Armstrong; ASCS; Beisser; BDO; Brown; BRT; CCBN; CFC; CII; Constellation; Cook; Cross Country; CSX; Deloitte; Delphi; Dollar; Dow; EDGAR Online; Eli Lilly; First Tennessee; Forest City; Grant Thornton; Hibernia; ICI; IMA; Imperial; Jacobs; Jefferson; Kimball; Kodak; MAMSI; Massey; Maverick; NeoMagic; NIRI; NUI; Perma-Fix; Pharmacia; PPL; Principal; Provident; SAES; Scana; Sovereign; Standard; Steinberg; Storagetek; SunTrust; TIAA-CREF; UnionBanCal; United Tech; UnumProvident; USS; XTO.
380	NIRI.
381	ASCS.
382	Dow.
383	AIMR.
384	AFG; Allegheny; Aztar; Caremark; Chevron Phillips; Compass; Commercial; Community Bankshares; EEI; Electronics for Imaging - Miller; Electronic for Imaging - Ritchie; Emerson; First Capital; GrandSouth; JC Penney; LeBoeuf; Marathon; MDU; Pinnacle; Sinclair; Somanetics.
385	Allegheny; EEI; Emerson.
386	Allegheny; Compass; Commercial; EEI; Pinnacle; Sinclair.
387	Compass.
388	Aztar.
389	AFG; Caremark; Community Bankshares; First Capital; GrandSouth; IBC; JC Penney; M&T; Marathon; MDU.
390	Community Bankshares; First Capital; GrandSouth.
391	AFG; LeBoeuf; Somanetics.
392	LeBoeuf; Somanetics.
393	ABA; ACCA; AEP; AFLAC; Air Products; Am. Bankers Assoc.; Amerada; Ashland; Baldwin; Bank of America; Capital One; CHS; Chubb; Cigna; Cleary; CNA Financial; CNA Surety; Comcast; Commercial; Dell; E&Y: FEI; FirstEnergy; FPL; HealthSouth; Halliburton; IBC; Intel; JPMorgan Chase; Kerr; M&T; Markel; McDonald's; McGuireWoods; Mellon; Merrill Lynch; Microsoft; NAREC; NAREIT; Navistar; NYCBA; NYSBA; PepsiCo; PG&E; Progress; PWC; Patrick Reardon; Reed Smith; Rock; Rouse; S&C; SBC; Southern Co; StarTek; Technitrol; Union Planters; UniSource; UST; Valmont; VI Tech.
394	Chubb; Cigna; Compass; IBC; Intel; M&T; Markel; Patrick Reardon; Rouse; SBC; VI Tech.
395	NAREIT.
396	HealthSouth.
397	CHS.
398	ABA; ASCS.
399	Capital One.
400	Mellon.
401	ASCS.
402	Reed Smith.
403	IMA.
404	UniSource.
405	ABA; NYSBA.
406	NYSBA.
407	PWC.
408	Caremark.
409	ABA; AEP; AFLAC; Air Products; Amerada; Am. Bankers Assoc.; ASCS; Cleary; CNA Financial; CNA Surety; Dell; FEI; FirstEnergy; FPL; Halliburton; Navistar; JPMorgan Chase; Merrill Lynch; NAREC; PepsiCo; Progress; StarTek; Technitrol; UniSource; Valmont..
410	NAREC.
411	Ashland; HealthSouth; Kerr; PWC; Union Planters.
412	ABA.
413	NYCBA.
414	Bank of America; Chevron Phillips; LeBoeuf; SBC.
415	AFG; Mellon.
416	SNL.
417	Microsoft.
418	ABA.
419	ABA; Comcast; LeBoeuf; McGuireWoods; NYSBA.
420	McGuireWoods.
421	ABA.
422	Community Bankshares; First Capital; GrandSouth.
423	Comcast; Dow; MDU; Principal; PWC.
424	Dow.
425	PWC.
426	ABA; ASCS; Caremark; NYCBA; NYSBA; PWC; S&C.
427	ASCS; PWC.
428	Caremark.
429	S&C.
430	ABA.
431	ABA.
432	ABA.
433	Dow; EEI; MDU.
434	ABA; NYSBA; PWC.
435	ABA.
436	ASCS.
437	ASCS; Dow; Hibernia; PWC; TIAA-CREF.
438	ASCS.
439	Allegheny; Allstate; Amerada; Am. Bankers Assoc.; ASCS; Baldwin; Brown; CCBN; Constellation; CSX; Dean; Dow; EEI; FEI; Forest City; FPL; HealthSouth; Intel; Kimball; McDonald's; Mellon; Merrill Lynch; Jefferson; NeoMagic; NIRI; PepsiCo; Principal; Perma-Fix; Provident; Scana; Southern Co; Storagetek; UnionBanCal; UnumProvident; XTO.
440	ASCS; Dow; PWC; UnionBanCal; USS.
441	Dow.
442	ASCS.
443	USS.
444	Dollar.
445	Comcast; Dow.
446	PWC.
447	TIAA-CREF.
448	ASCS.
449	ABA; ASCS; Comcast; Deloitte; Dow; HealthSouth; IMA; PWC; USS.
450	Dow.
451	ABA.
452	NYCBA.
453	ASCS; Comcast; Deloitte; Dow; TIAA-CREF.
454	SAES.
455	NYCBA.
456	PWC.
457	ASCS; Caremark; CII; Commercial; Compass; Dollar; Eli Lilly; FPL; Kimball; IBC; M&T; McDonald's; Patrick Reardon; Sinclair; XTO.
458	GSI.
459	Comcast; FEI; TIAA-CREF.
460	ACCA; Dollar; Emerson; M&T; NAREIT; PG&E; UST.
461	Southern Co.
462	TechBooks.
463	PPL.
464	Southern Union.
465	ABA; AEP; AFLAC; Bank of America; Capital One; Caremark; Chubb; Comcast; Deloitte; Dell; Dow; E&Y; EDGAR Online; Eli Lilly; FEI; Fidelity; Grundfest; ICI; IMA; Intel; JC Penney; JPMorgan Chase; Kellogg; KPMG; MacDermid; Melvin; Merrill Lynch; NAREC; NAREIT; NIRI; Nucor; Papa John's; PTC; PepsiCo; Primedia; PWC; S&C; Scana; Schwab; Shearman; SIA; Southern Co; Southern Union; TIAA-CREF; Trover; Union Planters; USS; Valmont; XTO; Zygo.
466	ABA; AFLAC; Bank of America; Caremark; Comcast; Deloitte; EDGAR Online; Eli Lilly; FEI; Grundfest; ICI; Intel; Kellogg; MacDermid; Merrill Lynch; Nucor; PWC; Scana; SIA; Southern Co; Southern Union; TIAA-CREF; Trover; XTO; Zygo.
467	Southern Co.
468	JPMorgan Chase.
469	ABA.
470	ABA; FEI; Fidelity; ICI; NAREC; Papa John's; SIA; TIAA-CREF.
471	AEP; AFLAC; Chubb; Deloitte; E&Y; Eli Lilly; FEI; KPMG; JC Penney; MacDermid; NAREIT; Papa John's; PepsiCo; Primedia; Schwab; Shearman; SIA; Trover; USS; Valmont.
472	E&Y.
473	ABA; AEP; Scana.
474	NIRI.
475	ABA.
476	AFLAC; NAREC.
477	ABA; Mercury.
478	Clancy; Coca-Cola; Constellation; E&Y; Emerson; Markel; McDonald's; Patrick Reardon; Rock; SBC; Sinclair; Sovereign.
479	Alex. Brown; Caremark; Ciesielski; Clifford Chance; T. Rowe Price.
480	ABA; Allstate; McGuireWoods; Mellon; NAREIT; Reed Smith.
481	NAREIT; Reed Smith.
482	AOL; Corning; Dial; FEI; IMA; Lawrence; Liberty Media; United Tech; XTO.
483	ASCS.
484	Steinberg.
485	Pepsi Bottling.
486	United Tech.
487	Armstrong.
488	Schulke.
489	Flora.
490	MacDermid.
491	AIMR.
492	NUI.
493	MDU.
494	Bennett.
495	Timpson.

http://www.sec.gov/rules/extra/33-8089summary.htm