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Staff Updates 1934 Act Interpretive Guidance

The SEC's Division of Corporation Finance has updated its compliance and disclosure interpretations with respect to 1934 Act sections 12, 13 and 15. The new and revised interpretations are dated September 30 and October 8, 2008.

The staff advised that a company that has voluntarily registered a class of equity securities under section 12(g) may not later cease to file periodic and current reports without first deregistering the securities under the 1934 Act.

A company may not file periodic and current reports without first registering the offer and sale of securities under the 1933 Act or a class of securities under the 1934 Act. If a company's reporting obligation was suspended or terminated, the SEC's EDGAR system will continue to accept 1934 Act reports that are filed on a temporary basis, but the company must disclose on the cover of its Form 10-K or 20-F that it is a voluntary filer.

A company that files a section 12(g) registration statement on Form 10, Form 20-F or Form 8-A may not delay the effectiveness to a date after the 60-day period specified in section 12(g). The staff advised that the only way to delay or to prevent its effectiveness is to withdraw the section 12(g) registration statement before the effective date. A withdrawal is not permitted if the company is required to register a class of equity securities under section 12(g). A company can withdraw a section 12(g) registration statement prior to the date of effectiveness but must do so by the business day before the date of effectiveness.

Once a company's Form 10 registration statement that was registered under section 12(g) becomes effective, the company is subject to the 1934 Act reporting obligations even if the staff has selected the registration statement for review or if the review is not completed at the time of effectiveness.

The staff described a scenario in which a company plans to form a liquidating trust as part of a plan of liquidation and dissolution and to transfer its remaining assets to the trust. The interests in the trust will be distributed to the company's security holders. In order to receive a no-action position that would relieve a liquidating trust from having to register interests under section 12(g), a company must first file a certificate of dissolution with the proper state authorities. The certificate of dissolution must be filed and effective before the staff will issue relief from section 12(g).

The lack of trading and an inability to locate a sufficient number of shareholders are not a sufficient basis for receiving a section 12(h) exemption for a section 12(g) registered company. The staff added that section 12(h) does not provide any exemptive relief for periodic reports that are delinquent.

The guidance notes that in order to rely on the section 15(d) automatic reporting suspension, an issuer must post-effectively deregister any remaining unsold securities from all existing Form S-3 and Form S-8 registration statements prior to filing the Form 10-K for the prior fiscal year. The staff noted that otherwise, the Form 10-K would serve as a post-effective amendment which would render the automatic suspension in section 15(d) unavailable.

A company that is subject to section 15(d) may not delay the due date or avoid filing a quarterly or annual report by filing a Form 8-A at or after the end of the fiscal quarter or the fiscal year, but prior to the due date of the applicable report. Form 8-A explicitly provides that a company that is subject to section 15(d) with respect to a fiscal year cannot do so, according to the guidance.

A partnership should file a Form 10-K in the fiscal year in which its Form 11 went effective, even if the selling efforts did not begin until the next fiscal year.