The SEC recently adopted amendments to Rule 10b-18,1 a rule that provides issuers with a safe harbor from market manipulation liability under the federal securities laws. The amendments are intended to simplify and update the safe harbor provisions in light of market developments since the adoption of Rule 10b-18 in 1982.
The SEC also adopted new requirements that issuers disclose all issuer repurchases (both open market and private transactions), regardless of whether the repurchases are effected in accordance with the safe harbor rule. The purpose of these new requirements is to enhance the transparency of issuer stock repurchases and repurchase programs.
The SEC adopted both sets of rules substantially as proposed in December 2002.2 Among the most sig-nificant changes wrought by the new rules are the following:
- Block trades are no longer excluded from Rule 10b-18's volume limitations (with an exception for limited block purchases by smaller issuers).
- Rule 10b-18 will be at least partially available during the pendency of mergers, acquisitions and recapitalizations, subject to certain specific restrictions.
- The time during which Rule 10b-18 purchases may be made has been expanded for the most actively traded stocks, and limited after-hours trading will also be permitted.
- Issuers will now be required to disclose on a quarterly basis and in tabular form, all repurchases of any equity securities registered under Section 12 of the Exchange Act, with footnote disclosure of, among other things, the status of announced repurchase programs.
Overview of Current Rule 10b-18
What is the scope of Rule 10b-18?
Rule 10b-18 applies to bids for and purchases of an issuer's common stock by or for an issuer or an "affiliated purchaser" of an issuer.3 Purchases of any other type of security are not covered — even if related to the common stock (e.g., preferred stock, warrants, rights, convertible debt securities, options, or security futures products).4 The safe harbor excludes bids and purchases made during certain corporate events such as mergers, tender offers, and distributions that involve the issuer. The safe harbor does not confer absolute protection from all liability for purchases (e.g., purchases that are part of a plan or scheme to evade the federal securities laws) — even if made in technical compliance with the Rule.5 Rather, the safe harbor provides only that certain, specific provisions of the securities laws will not be considered to have been violated solely by reason of the manner, timing, price, or volume of such repurchases, provided the repurchases are made within the limitations of the Rule.
What are the conditions of Rule 10b-18?
Rule 10b-18 provides a safe harbor for purchases on a given day that satisfy the Rule's manner, timing, price, and volume conditions. Failure to meet any one of the four conditions will disqualify that day's pur-chases from the safe harbor.
Manner of Purchase Condition
To avoid the appearance of widespread trading in a security that could result if many brokers or dealers were used to purchase stock, Rule 10b-18 requires use of a single broker or dealer per day to bid for or purchase common stock. The "single broker or dealer" condition, however, applies only to Rule 10b-18 purchases that are "solicited" by or on behalf of the issuer. Accordingly, the issuer may purchase shares from more than one broker-dealer if the issuer does not solicit the transactions.6 Moreover, where an issuer engages a single coordinating broker-dealer to make its Rule 10b-18 purchases, the broker-dealer can make (consistent with the single broker or dealer condition) appropriate and customary arrangements with other broker-dealers, including exchange specialists and "two-dollar" brokers on exchange floors, to execute repurchases.
Timing Condition
The timing condition excludes from the safe harbor purchases at the opening and during the last half hour of trading because market activity at such times is considered to be a significant indicator of the direction of trading, the strength of demand, and the current market value of the security. So, if there is no independent opening transaction on a given trading day, the safe harbor would not be available that day.
Price Condition
The price condition specifies the highest price an issuer may bid or pay for its common stock. Although Rule 10b-18's specific current price limitations vary depending on whether the security is a "reported," "exchange-traded," "Nasdaq," or "other security" (as defined under the current Rule), and whether the bid or purchase is effected on an exchange, the price condition is generally intended to prevent the issuer from leading the market for the security by limiting the issuer to bidding for or purchasing its stock at a price that is no higher than the highest independent published bid or last independent transaction price. As such, the price condition uses an independent reference price that has not been set or influenced by the issuer but, instead, is based on independent market forces.
Volume Condition
The volume condition limits the amount of securities an issuer may repurchase in the market in a single day. The volume condition is designed to prevent an issuer from dominating the market for its securities through substantial purchasing activity. Under the current volume condition, an issuer may effect daily pur-chases in an amount up to 25% of the average daily trading volume (ADTV) in its shares (the "25% volume limitation").7
The volume limitation does not include an issuer's block purchases.8 The Rule defines a "block" as a quan-tity of stock that either: (i) has a purchase price of $200,000 or more; or (ii) is at least 5,000 shares and has a purchase price of at least $50,000; or (iii) is at least 20 round lots of the security and totals 150% or more of the trading volume for that security or, in the event that trading volume data is unavailable, is at least 20 round lots of the security and totals at least one-tenth of one percent (.001) of the outstanding shares of the security, exclusive of any shares owned by any affiliate.
The definition further provides that a block does not include any amount a broker or dealer, acting for its own account, has accumulated for the purpose of selling to the issuer or affiliated purchaser, if the issuer knows or has reason to know that such amount was accumulated for such purpose. The definition also excludes any amount that a broker or dealer has sold short to the issuer, if the issuer knows or has reason to know that the sale was a short sale.
The Amendments to the Safe Harbor
Do the amendments change the types of securities that may be purchased under Rule 10b-18's safe harbor?
For the most part, no. Although the SEC did not make any substantive changes to the scope of the Rule, the SEC clarified that the safe harbor is available for repurchases of all common equity securities (i.e., an issuer's common stock or an equivalent interest, including a unit of beneficial interest in a trust or limited partnership or a depository share), while also revising the definition of "Rule 10b-18 purchase." Thus, as revised, "Rule 10b-18 purchase" means a purchase (or any bid or limit order that would effect such purchase) of an issuer's common stock (or an equivalent interest, including a unit of beneficial interest in a trust or limited partnership or a depository share) by or for the issuer or any affiliated purchaser.
What is the availability of Rule 10b-18 once a merger, acquisition, or similar transaction involving a recapitalization is announced?
The SEC originally proposed to amend the definition of "Rule 10b-18 purchase" to clarify that the current exclusion from the safe harbor for purchases effected "pursuant to a merger, acquisition, or similar transaction involving a recapitalization" (an "M&A Transaction") would include purchases effected any time during the period from public announcement of the M&A Transaction until the completion of the transaction. According to the SEC, once a merger or acquisition is announced, an issuer has considerable incentive to support or raise the market price of its stock in order to facilitate the deal. After considering comments received on this issue, the SEC determined that it was not necessary to exclude from the safe harbor all issuer repurchase activity following the announcement of an M&A Transaction. Instead, as adopted, the merger exclusion will apply to purchases that are effected during the period from the time of public announcement of an M&A Transac-tion until the earlier of the completion of the transaction or the completion of the vote by target shareholders (including any post-vote election period and any period where the market price of a security will be a factor in determining the consideration to be paid pursuant to an M&A Transaction),9 with the following important exceptions:
- The exclusion will not extend to transactions in which the consideration is solely cash and there is no valuation period.
- The exclusion will allow ordinary Rule 10b-18 purchases to be effected after the announcement of an M&A Transaction (other than during any Regulation M restricted period10 for M&A Transactions involving "distributions") so long as the total amount of the issuer's Rule 10b-18 purchases effected on any single day does not exceed the lesser of 25% of the security's four-week ADTV or the issuer's average daily Rule 10b-18 purchases during the three full calendar months preceding the date of the announcement of the M&A Transaction.11
- The issuer may effect block purchases (other than during any Regulation M restricted period) provided that the issuer does not exceed the average size and frequency of block purchases effected pursuant to paragraph (b)(4) of Rule 10b-18 during the three full calendar months preceding the date of the announcement of such transaction.12
Is the manner of Rule 10b-18 purchases affected by the amendments?
No. The amendments do not change the single broker or dealer condition.
Are there any changes to the current price limitations under 10b-18?
Yes. Rule 10b-18's current price limitations vary depending on the market for the security. As amended, Rule 10b-18 will now apply a uniform price limitation, regardless of the market in which the security trades. Rule 10b-18 purchases will only be permitted at a price that does not exceed the highest independent bid or the last independent transaction price, whichever is higher, quoted or reported in the consolidated system (i.e., regardless of where the securities are traded). For securities that are not quoted or reported in the consolidated system, the issuer will need to look at the highest independent bid or the last independent transaction price, whichever is higher, displayed and disseminated on any national securities exchange or on any inter-dealer quotation system (as defined in Exchange Act Rule 15c2-11(e)(2)) that displays at least two independent priced quotations for the security. For all other securities, the issuer will need to look to the highest independent bid obtained from three independent dealers.
Do the amendments modify the volume condition's treatment of block purchases?
Yes. Under the current volume condition, an issuer's block purchases are not subject to Rule 10b-18's 25% volume limitation and the shares purchased by the issuer in block transactions are excluded when calculat-ing the stock's four-week ADTV. This means that, under the current Rule 10b-18, an issuer can purchase an unlimited amount of its securities if purchased in block size.
The SEC proposed to eliminate the block exception altogether. After considering the numerous comments opposing that move, the SEC adopted the proposed amendments relating to the volume condition's treatment of block purchases, with some modifications in response to comments received. Under the amended volume condition, to qualify for the safe harbor, an issuer's total volume of Rule 10b-18 purchases effected on any single day must not exceed 25% of the ADTV in its security, computed on a basis that includes any block-size purchases by or on behalf of the issuer in both the numerator and the denominator (the four-week ADTV) of that computation.
In view of commenters' concerns that eliminating the block exception would adversely affect issuers with moderate or low average daily trading volumes that historically have relied heavily on block purchases to implement their repurchase programs, the amended Rule will permit issuers to make (within the safe harbor) one block purchase per week, provided that the issuer does not make any other Rule 10b-18 purchases on that day. Thus, alternatively, once each week the issuer may purchase one block of its common stock in lieu of purchasing under the 25% volume limitation for that day. However, shares purchased by the issuer relying on this amended block exception may not be included when calculating the stock's four-week ADTV under the Rule. However, the amended block exception does not include any amount of securities that a broker or dealer, acting as principal, has accumulated for the purpose of selling to the issuer, if the issuer knows or has reason to know that such amount was accumulated for such purpose.
Do the amendments modify the Rule's time of purchase condition?
Yes. The amendments expand the safe harbor's timing condition to allow issuers whose securities are more liquid and, thus, less susceptible to manipulation to stay in the market longer. As adopted, limitations on purchases at the close would vary (i.e., either 10 or 30 minutes before the scheduled close of trading) depending on the security's ADTV value and public float value.
To qualify for the safe harbor, issuers of securities having an ADTV value of $1 million or more and a public float value of $150 million or more13 may not bid for or purchase their securities during the last 10 minutes before the scheduled close of the primary trading session (i.e., the 9:30 a.m. — 4:00 p.m. price dis-covery session) in the principal market for the security, and during the last 10 minutes before the scheduled close of the primary trading session in the market where the purchase is made.14 Issuers of all other eligible securities (i.e., those having an ADTV value of less than $1 million or a public float value of less than $150 million) may not bid for or purchase their securities during the last 30 minutes before the scheduled close of the primary trading session in the principal market for the security, and during the last 30 minutes before the scheduled close of the primary trading session in the market where the purchase is made.
The safe harbor will continue to preclude an issuer from being the opening (regular way) purchase reported in the consolidated system.
Do the amendments to Rule 10b-18 address riskless principal transactions?
Yes. The amendments modify the "Rule 10b-18 purchase" definition to clarify that purchases for the issuer include riskless principal transactions.15
How do the amendments affect after-hours trading sessions?
The amendments extend the safe harbor to issuer repurchases effected after-hours (while the consolidated system is still open) and that are effected at prices that do not exceed the lower of the closing price of the primary trading session in the principal market for the security and any lower bids or sale prices subsequently reported in the consolidated system by other markets. These purchases, of course, would still need to comply with the other three conditions of the safe harbor, with the following modifications:
- As amended, Rule 10b-18 permits an issuer to use a broker or dealer for its after-hours Rule 10b-18 purchases that is different from the broker or dealer that it used during normal trading hours.
- As amended, Rule 10b-18 precludes the issuer from effecting a Rule 10b-18 purchase as the opening transaction of the after-hours trading session, but permits the issuer to repurchase until the termination of the period in which last sale prices are reported in the consolidated system.
- The Rule's volume calculation would carry over from the regular trading session.
Does the Rule 10b-18 safe harbor apply to issuer repurchases effected in markets outside of the United States?
No. Because the safe harbor was created based on the manner in which the securities markets operate in the U.S., the SEC does not believe currently that a workable rule could be created for universal application both inside and outside of the U.S., without unnecessarily complicating or undermining the utility of the safe harbor.
Do the amendments affect how Rule 10b-18 applies following a market-wide trading suspension?
Yes. On September 23, 1999, in order to facilitate liquidity in the trading session following a market-wide trading suspension, or circuit breaker, the SEC modified the Rule's timing condition to permit issuer purchases at the reopening and during the last half-hour prior to the scheduled close of trading (or at the next day's opening if a market-wide trading suspension was in effect at the scheduled close of trading).16 During such a trading session, all other Rule 10b-18 conditions continue to apply to issuer purchases. The amend-ments further modify these alternative conditions by increasing the current 25% volume limitation to 100% of the ADTV for that security.17
Disclosure Changes
In the final Rules, the SEC stated that it believes that the information about how much common stock an issuer has repurchased is important and useful to investors, and, accordingly, it expanded the periodic disclosure requirements of reporting issuers to include specific information regarding repurchase activity by issuers and their affiliates.
What information must be disclosed and how must the information be disclosed?
The SEC has amended Regulations S-K and S-B, and Forms 10-Q, 10-QSB, 10-K, 10-KSB, 20-F, and N-CSR to require periodic disclosure of all issuer repurchases of shares or other units of any class of an issuer's equity securities that is registered by the issuer pursuant to Section 12 of the Exchange Act. This disclosure requirement is independent of the Rule 10b-18 safe harbor, as it includes disclosure of all repurchases regard-less of their status within the Rule 10b-18 safe harbor and regardless of whether the purchases are made in the open market or privately negotiated. The new disclosure will be required to be presented in tabular form, disclosing monthly repurchases during the most recent quarter (or, in the case of closed-end mutual funds, semi-annual period and, in the case of foreign private issuers, fiscal year18), including:
- The total number of shares (or units) purchased (reported on a rolling-month basis);
- The average price paid per share;
- The number of shares (or units) purchased as part of a publicly announced repurchase plan or program; and
- The maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs.
The modifications, as proposed, would also have required disclosure in the chart of the identity of all broker-dealers used to make issuer repurchases. Swayed by comments arguing that disclosure of a broker-dealer's identity is an unnecessary disclosure of confidential information with informational advantages to other market participants, the SEC deleted any requirement that issuers disclose the identity of the broker-dealers used to effect the repurchase of the issuer's securities.
How do the amendments affect disclosure of publicly announced repurchase programs?
The tabular disclosure must include the following footnote disclosure about publicly announced repurchase plans or programs:
- The date of announcement of the plan or program;
- The share or dollar amount approved;
- The expiration date (if any) of the plan or program;
- Each plan or program that has expired during the period covered by the table; and
- Each plan or program that the issuer has determined to terminate prior to expiration, or under which the issuer does not intend to make further purchases.
The rule, as proposed, would have required additional footnote disclosure of each plan or program under which the issuer had not completed purchases during the period covered by the table, and whether the issuer still intended to purchase under that plan. However, given comments received opposing potentially mislead-ing disclosure regarding an issuer's future repurchase intent, the SEC dropped this requirement from the final rule.
What about repurchases not made pursuant to public announcement?
The table also must include footnotes that briefly disclose the nature of purchases made other than pursu-ant to a publicly announced repurchase plan or program. These types of purchases include, for example, open market and privately negotiated purchases, issuer tender offers and purchases made by the issuer upon another person's exercise of outstanding put rights.
What are the new disclosure requirements for closed-end mutual funds?
Closed-end funds will provide the required disclosure semi-annually on Form N-CSR. Currently, closed-end funds are required to disclose information regarding privately negotiated repurchases of their securities on Form N-23C-1 not later than the tenth day of the calendar month following the month in which the purchase occurs.
The SEC is eliminating the current requirement for closed-end funds to disclose information regarding privately negotiated repurchases of their securities on Form N-23C-1. The SEC felt that disclosure on both Form N-23C-1 and N-CSR was duplicative and an unnecessary regulatory burden for closed-end funds.19
Form N-SAR, the semi-annual reporting form for registered investment companies, will continue to require closed-end funds to disclose the aggregate number of shares and net consideration paid for all repurchases and redemptions of their common and preferred stock during the semi-annual reporting period.
Timing Issues
The amendments to Rule 10b-18 become effective on December 17, 2003.
The repurchase disclosure required in Forms 10-Q, 10-QSB, 10-K, and 10-KSB must appear in reports filed on these forms for periods ending on or after March 15, 2004. Accordingly, an issuer with a December 31 fiscal year-end would include this new disclosure in the Form 10-Q it files for the first quarter of 2004. Disclosure now required in Form 20-F must appear in reports filed for fiscal years ending on or after Decem-ber 15, 2004. As to Form N-CSR, the new disclosure requirements must appear in reports filed for periods ending on or after June 15, 2004.
This Securities Law Advisory is published by Alston & Bird LLP (www.alston.com) to provide a summary of significant develop-ments to our clients and friends. It is intended to be informational and does not constitute legal advice regarding any specific situation. This material may also be considered advertising under applicable court rules.
Footnotes
1. See Final Rule: Purchases of Certain Equity Securities by the Issuer and Others, Securities Act Rel. No. 33-8335, Exchange Act Rel. No. 34-48766, Investment Co. Act Rel. No. IC-26252, http://www.sec.gov/rules/final/33-8335.htm (Nov. 10, 2003).
2. See Proposed Rule: Rule 10b-18 and Purchases of Certain Equity Securities by the Issuer and Others, Securities Act Rel. No. 33-8160, Exchange Act Rel. No. 34-46980, Investment Co. Act Rel. No. IC-25845, http://www.sec.gov/rules/proposed/33-8160.htm (Dec. 18, 2002); Alston & Bird LLP Securities Law Advisory, "SEC Proposes Issuer Stock Repurchase Amendments," http://www.alston.com/articles/Issuer%20Stock%20Repurchase%20Amendments.pdf (Dec. 19, 2002).
3. "Affiliated purchaser" is defined in current Rule 10b-18(a)(3). Under the amendments, the safe harbor would continue to apply to affiliated purchasers.
4. The safe harbor also is not available for repurchases of stock using forward contracts or accelerated share repurchase programs. Nor is the safe harbor available for the writing of puts, purchases of calls, or purchases of stock upon exercise of puts and calls.
5. For example, as the SEC noted in 1982 when adopting Rule 10b-18, "Rule 10b-18 confers no immunity from possible Rule 10b-5 liability where the issuer engages in repurchases while in possession of favorable, material nonpublic information concerning its securities." See Final Rule: Purchases of Certain Equity Securities by the Issuer and Others; Adoption of Safe Harbor, Exchange Act Rel. No. 34-19244, 47 FR 53333-01 (Nov. 17, 1982).
6. An issuer must evaluate whether a transaction is "solicited" by or on behalf of an issuer, depending on the facts and circumstances of each case. Although Rule 10b-18 does not define "solicitation," the SEC has indicated that it would not consider the disclosure and announcement of a repurchase program alone as necessarily causing a subsequent purchase to be deemed "solicited" by or on behalf of an issuer.
7. Trading volume is defined generally as the average daily trading volume reported to the consolidated transaction reporting system or to the NASD for the security in the four calendar weeks preceding the week that the Rule 10b-18 purchase or bid is to be effected. This applies to reported securities, exchange-traded securities, and Nasdaq securities. For any other security (e.g., OTC Bulletin Board and Pink Sheet securities), the volume of purchases on a single day may not exceed one round lot or, on that day plus the preceding five business days, 1/20th of one percent (0.0005) of the outstanding shares of the security.
8. An issuer's block purchases also are not included in determining the stock's average daily trading volume.
9. In this regard, the safe harbor would be available after a shareholder vote is completed in instances where the only pending issue is regulatory approval or other action that could not influence the market price of the issuer's security.
10. In the case of a distribution involving a merger, acquisition, or exchange offer, Regulation M's restricted period begins on the day the proxy solicitation or offering materials are first disseminated to security holders, and ends upon the completion of the distribution (i.e., the time of the shareholder vote or the expiration of the exchange offer), and includes any post-vote valuation or election period. In addition, Rule 14e-5 under the Exchange Act prohibits purchases or arrangements to purchase securities that are the subject of an exchange offer, or a security immediately convertible into or exchangeable for those securities, from the time of public announcement until the expiration of the exchange offer.
11. This latter calculation is different from ADTV, as defined in amended Rule 10b-18 (a)(1).
12. For example, if the daily average amount of an issuer's Rule 10b-18 purchases over the course of the three full calendar months prior to the merger announcement is 10,000 shares per day, and 25% of the security's four-week ADTV is 20,000 shares per day, then the issuer could purchase up to 10,000 shares per day during the post-announcement period. Accordingly, if the issuer did not make any Rule 10b-18 purchases during the three-month period, it would not be permitted to make any Rule 10b-18 purchases during the post-announcement period. In addition, if an issuer made block purchases within the safe harbor (pursuant to paragraph (b)(4) of the amended Rule 10b-18) over the course of the three full calendar months prior to the announcement of a merger or other covered transaction, then the issuer can make block purchases within the safe harbor with the same average size and frequency during the post-announcement period. For example, if a thinly traded issuer purchases three blocks over the course of the three full calendar months prior to a merger announcement (an average of one block per month) and the average block size was 7,800 shares, then the issuer will be able to purchase a block no larger than 7,800 shares each month during the post-announcement period (subject to other applicable restrictions). If the issuer did not make any block purchases under the amended block exception during the three-month period, the issuer could not utilize the amended block exception during the post-announcement period.
13. The timing amendment incorporates Regulation M's standards and methods of calculating ADTV and public float value. Under Regulation M, issuers with a security that has an ADTV value of $1 million or more and a public float value of $150 million or more are excluded from Rule 101 of Regulation M under its "actively-traded securities" exception. In calculating the dollar value of ADTV, any reasonable and verifiable method may be used. For example, it may be derived from multiplying the number of shares by the price in each trade, or from multiplying each day's total volume of shares by the closing price on that day. Public float value (i.e., the aggregate market value of common equity securities held by non-affiliates of the issuer) is to be determined in the manner set forth on the front page of Form 10-K, even if the issuer of such securities is not required to file on Form 10-K. For reporting issuers, the public float value should be taken from the issuer's most recent on Form 10-K or based upon more recent information made available by the issuer.
14. This means that an issuer may not purchase in any market during the specified periods.
15. The definition of "riskless principal transaction" can be found at amended Rule 10b-18(a)(12).
16. See Final Rule: Purchases of Certain Equity Securities by the Issuer and Others, Exchange Act Rel. No. 34-41905, http://www.sec.gov./rules/final/34-41905.htm (Sep. 23, 1999).
17. On September 14, 2001, the SEC issued an "Emergency Order Pursuant to Section 12(k)(2) of the Exchange Act Taking Temporary Action to Respond to Market Developments." Commission Notice:Emergency Order Pursuant to Section 12(k)(2) of the Securities Exchange Act of 1934 Taking Temporary Action To Respond To Market Developments, Exchange Act Rel. No. 44791, http://www.sec.gov./rules/other/34-44791.htm (Sep. 14, 2001). This Emergency Order temporarily modified certain SEC rules and regulations governing issuer stock repurchases for an initial five-day period beginning September 17, 2001 and ending September 21, 2001. The SEC extended the period for an additional five days, ending on September 28. See Commission Order: Order Extending Emergency Order Pursuant to Section 12(k)(2) of the Securities Exchange Act of 1934 Taking Temporary Action To Respond to Market Developments, Exchange Act Rel. No. 34-44827, http://www.sec.gov./rules/other/34-44827.htm (Sep. 21, 2001). On September 28, the SEC used its exemptive authority under Section 36 of the Exchange Act to temporarily modify certain conditions of Rule 10b-18 for issuers that repurchased their own common stock during the period October 1-12, 2001. See Exemptive Order Pursuant to Section 36(a)(1) of the Securities Exchange Act of 1934 Issuing Exemptive Relief to Respond to Market Developments, Exchange Act Rel. No. 34-44874, http://www.sec.gov./rules/other/34-44874.htm (Sep. 28, 2001). In the event that there is another "market emergency" that does not fit within the meaning of a "market-wide trading suspension" (as defined under amended Rule 10b-18(a)(7)), as was the case with the events following September 11, the SEC would have the same emergency and exemptive authority as described above (i.e., under Sections 12(k)(2) and 36(a)(1) of the Exchange Act) to modify the safe harbor conditions as it deems necessary.
18. For foreign private issuers, the disclosure provided should relate to the issuer's securities in ordinary share form, whether the issuer has repurchased the shares themselves or depositary receipts that represent the shares, and the price and other data presented should be based on the currency used in the issuer's primary financial statements.
19. With the elimination of Form N-23C-1, the Commission adopted a conforming technical amendment to Rule 23c-1(a)(11), under the Investment Company Act, that previously required a closed-end fund to file a copy of any written solicitation to purchase securities under the rule sent or given during the prior month by or on behalf of the fund to 10 or more persons together with Form N-23C-1.