Question: Section 15(d) of the Exchange Act provides an automatic suspension of the periodic reporting obligation as to any fiscal year (except for the fiscal year in which the registration statement became effective) if an issuer has fewer than 300 security holders of record at the beginning of such fiscal year. In contrast, Rule 12h-3 permits a company to suspend its reporting obligation under Section 15(d) if the requirements of the rule are met at any time during the fiscal year. Is a Form 15 required to be filed under Rule 12h-3 as a condition of the suspension?
Answer: Because situations exempted by Rule 12h-3 (e.g., there are fewer than 300 security holders of record in the middle of a fiscal year) do not meet the literal test of Section 15(d), Rule 12h-3 requires the filing of Form 15 as a condition of the suspension. By contrast, under Rule 15d-6, if an issuer has fewer than 300 security holders of record at the beginning of the fiscal year, a Form 15 should be filed to notify the Commission of such suspension, but the suspension is granted by statute and is not contingent on filing the Form 15. [September 30, 2008]
Question 153.02
Question: A company’s obligation to file periodic reports was automatically suspended under Section 15(d) for fiscal year 2007 because the class of securities at issue was held by less than 300 record holders on the first day of the company’s fiscal year. Subsequently, on the first day of fiscal year 2010, the number of record holders exceeded 300, and as a result, the company’s obligation to file periodic reports under section 15(d) “revived.” What is the first report due for this company?
Answer: The first report due will be a Form 10-K for the previous fiscal year (fiscal year 2009). This position is consistent with the “look back” provision of Rule 12h-3(e), which provides that a company that suspends its reporting obligation under Rule 12h-3, but subsequently has that reporting obligation “revived,” must begin reporting again under Section 15(d) by filing a Form 10-K for its previous fiscal year. Similarly, a company that must file a registration statement on Form 10 to register a class of securities under Section 12(g) must include financial statements for its previous fiscal year. [September 30, 2008]
Question 153.03
Question: Can a company suspend its reporting obligations under Section 15(d) with respect to “the fiscal year within which such registration statement became effective”?
Answer: No. A company must always file the Form 10-K for the fiscal year in which the registration statement is declared effective. The Form 10- K is required regardless of whether the company suspends its reporting obligation under Section 15(d) or Rule 12h-3. [September 30, 2008]
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