Employee Benefit Plan Exemptive Rules Under Section 16 of the Securities Exchange Act of 1934

SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 240

[Release Nos. 34-37261; 35-26525; IC-21998] RIN 3235-AB14

Employee Benefit Plan Exemptive Rules Under Section 16 of the Securities Exchange Act of 1934

AGENCY: Securities and Exchange Commission.

ACTION: Extension of phase-in period for rule 16b-3.

SUMMARY: The Commission today is extending the phase-in period for compliance with the substantive conditions of new Rule 16b-3 regarding employee benefit plan transactions under the Securities Exchange Act of 1934.

DATES: Effective June 14, 1996. The phase-in period for compliance with new Sec. 240.16b-3, which previously has been extended to September 1, 1996, is extended until November 1, 1996.

FOR FURTHER INFORMATION CONTACT: Anne M. Krauskopf, Office of the Chief Counsel, Division of Corporation Finance, at (202) 942-2900.

SUPPLEMENTARY INFORMATION: On February 8, 1991, the Commission adopted comprehensive revisions to the rules under section 16 1 of the Securities Exchange Act of 1934 (“Exchange Act”).2 The new regulatory scheme generally became effective on May 1, 1991, but a 16 month phase-in period was provided with respect to specified rules affecting employee benefit plans, in order to give registrants ample time to review the rule changes and amend their plans accordingly.3 The Adopting Release provided that registrants could continue to rely on the exemptions from section 16(b) of the Exchange Act 4 afforded by former Rules 16a-8(b),5 16a-8(g)(3),6 and 16b-3 7 after May 1, 1991, but would be required to adopt the substantive conditions of new Rule 16b-3 8 by September 1, 1992.9

[1] 15 U.S.C. 78p (1988).

[2] 15 U.S.C. 78a et seq. (1988).

[3] Exchange Act Release No. 28869 (February 8, 1991) (56 FR 7242) (“Adopting Release”). See Section VII of the Adopting Release for transition provisions generally and Section VII.C for transition provisions relating to employee benefit plans.

[4] 15 U.S.C. 78p(b).

[5] 17 CFR 240.16a-8(b).

[6] 17 CFR 240.16a-8(g)(3).

[7] 17 CFR 240.16b-3 (1990).

[8] 17 CFR 240.16b-3 (1991).

[9] The phase-in period applies only to the exemption from section 16(b), not to the revised reporting requirements under section 16(a) that became effective on May 1, 1991 and the further revisions adopted today.

The Rule 16b-3 phase-in period was extended until September 1, 1996, or such different date as set by the Commission, pending completion of further rulemaking under section 16 with regard to employee benefit plans.10 The amendments to the rules under section 16 adopted today, which become effective August 15, 1996, complete this rulemaking effort.11 While new Rule 16b-3 becomes available for issuers that wish to use it on August 15, 1996, the phase-in period for Rule 16b-3 is extended until November 1, 1996.12

Consistent with the transition provisions adopted today, current Rule 16b-3 and former Rules 16a-8(b), 16a-8(g) and 16b-3 will remain available for transactions effected prior to November 1, 1996.

[10] Exchange Act Release No. 36063 (August 7, 1995) (60 FR 40994).

[11] Exchange Act Release No. 34-37260, Section VII.

[12] When an issuer adopts a plan that complies with new Rule 16b-3 or converts one of its existing plans to the new rule, all plans must be converted, provided that any transaction between an issuer and its officers or directors that occurs outside the scope of a formal plan or pursuant to a plan that permits only the issuance of cash-only instruments may rely on new Rule 16b-3 without triggering this conversion requirement.

Dated: May 31, 1996.

By the Commission.

Jonathan G. Katz, Secretary.

[FR Doc. 96-14185 Filed 6-13-96; 8:45 am]

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