February 3, 1999
RESPONSE OF THE OFFICE OF INTERNATIONAL CORPORATE FINANCE
DIVISION OF CORPORATION FINANCE
Re: CommScan LLC ("CommScan")
Incoming letter dated February 1, 1999
You have requested the Division's views with regard to the publication on your Internet web site of a list of institutions that have certified to CommScan that they are qualified institutional buyers, as defined in Securities Act Rule 144A(a)(1) (the "QIB List"). On the basis of the representations made in your incoming letter, it is the position of the Division that a seller and any person acting on its behalf may rely on the QIB List as a method for establishing a reasonable belief that a prospective purchaser is a qualified institutional buyer, provided that the information underlying the inclusion of an entity in the QIB List is as of a date within 16 months preceding the date of sale of securities in the case of a U.S. purchaser and within 18 months preceding such date of sale for a foreign purchaser. In reaching this position, the Division particularly notes the manner in which the QIB List will be complied and updated, as set forth in your letter. [*2]
Because this position is based upon the representations made in your letter, any different facts or conditions might require a different conclusion.
Sincerely,
Sandra Folsom Kinsey
Senior International Counsel
Office of International Corporate
Finance
INQUIRY-1:
February 1, 1999
Sandra Kinsey
Securities and Exchange Commission
Office of International Corporate Finance
450 5th Street NW
Washington D.C. 20549
Dear Sandra,
As more fully described in Securities and Exchange Commission Release No. 34-38360, Comm Scan owns and operates a communications system and provides software applications that connect the broker/dealer and regulatory organizations involved in the offering of securities. In an effort to provide greater efficiency to distribution participants, the NASD engaged CommScan to develop the NASDesk/Compliance Desk software system to facilitate electronic communication between lead managers and all syndicate members and the NASD's Corporate Financing Department. The SEC initially authorized the NASD to mandate member use of NASDesk/Compliance Desk pursuant to NASD Notice to Members 96-18 for the purpose of compliance with the Free-Riding and Withholding Interpretation. The SEC [*3] then approved the expansion of this system to provide electronic communications and database capability with respect to compliance with NASD and NYSE rules that implement SEC Regulation M.
As previously discussed with you and other representatives of the staff of the Office of International Corporate Finance, CommScan intends to create a list (the "QIB List") of institutions that have certified to CommScan that they are qualified institutional buyers as defined in Rule 144A. This list would be maintained on CommScan's Internet web site. Access to the QIB List will be limited to registered broker dealers. CommScan requests confirmation that a seller and any person acting on its behalf may rely on the QIB List described below, to determine whether an institution is a qualified institutional buyer.
The qualified institutional buyers included on the QIB List will be based upon questionnaires received by CommScan. Each institution will be required to submit a questionnaire providing support for their classification as a qualified institutional buyer. The questionnaire will conform to the requirements of the certifications under Rule 144A(d)(1)(iv). Upon receipt of a questionnaire completed [*4] in a manner that demonstrates on its face that the certifying institution is a qualified institutional buyer, its name will be added to the QIB List database together with the date as of which the information in the questionnaire was provided.
Institutions will be deleted from the QIB List if their most recent questionnaire becomes stale or if it is learned that such institution is no longer a qualified institutional buyer. CommScan will automatically delete an institution from the list if the most recent questionnaire provided by such institution is more than 16 months old in the case of a domestic institution or 18 months old in the case of a foreign institution. CommScan will also delete institutions from the list promptly upon the employees of CommScan responsible for the QIB List learning that such institution is no longer a qualified institutional buyer.
We appreciate your attention to this matter and look forward to receiving confirmation that the list of qualified institutional buyers prepare and published in the manner described above may be relied upon as a method of establishing a reasonable belief that a prospective purchaser is a qualified institutional buyer.
Sincerely,
[*5]
Thomas A. Fleming
President
RESPONSE OF THE OFFICE OF INTERNATIONAL CORPORATE FINANCE
DIVISION OF CORPORATION FINANCE
Re: CommScan LLC ("CommScan")
Incoming letter dated February 1, 1999
You have requested the Division's views with regard to the publication on your Internet web site of a list of institutions that have certified to CommScan that they are qualified institutional buyers, as defined in Securities Act Rule 144A(a)(1) (the "QIB List"). On the basis of the representations made in your incoming letter, it is the position of the Division that a seller and any person acting on its behalf may rely on the QIB List as a method for establishing a reasonable belief that a prospective purchaser is a qualified institutional buyer, provided that the information underlying the inclusion of an entity in the QIB List is as of a date within 16 months preceding the date of sale of securities in the case of a U.S. purchaser and within 18 months preceding such date of sale for a foreign purchaser. In reaching this position, the Division particularly notes the manner in which the QIB List will be complied and updated, as set forth in your letter. [*2]
Because this position is based upon the representations made in your letter, any different facts or conditions might require a different conclusion.
Sincerely,
Sandra Folsom Kinsey
Senior International Counsel
Office of International Corporate
Finance
INQUIRY-1:
February 1, 1999
Sandra Kinsey
Securities and Exchange Commission
Office of International Corporate Finance
450 5th Street NW
Washington D.C. 20549
Dear Sandra,
As more fully described in Securities and Exchange Commission Release No. 34-38360, Comm Scan owns and operates a communications system and provides software applications that connect the broker/dealer and regulatory organizations involved in the offering of securities. In an effort to provide greater efficiency to distribution participants, the NASD engaged CommScan to develop the NASDesk/Compliance Desk software system to facilitate electronic communication between lead managers and all syndicate members and the NASD's Corporate Financing Department. The SEC initially authorized the NASD to mandate member use of NASDesk/Compliance Desk pursuant to NASD Notice to Members 96-18 for the purpose of compliance with the Free-Riding and Withholding Interpretation. The SEC [*3] then approved the expansion of this system to provide electronic communications and database capability with respect to compliance with NASD and NYSE rules that implement SEC Regulation M.
As previously discussed with you and other representatives of the staff of the Office of International Corporate Finance, CommScan intends to create a list (the "QIB List") of institutions that have certified to CommScan that they are qualified institutional buyers as defined in Rule 144A. This list would be maintained on CommScan's Internet web site. Access to the QIB List will be limited to registered broker dealers. CommScan requests confirmation that a seller and any person acting on its behalf may rely on the QIB List described below, to determine whether an institution is a qualified institutional buyer.
The qualified institutional buyers included on the QIB List will be based upon questionnaires received by CommScan. Each institution will be required to submit a questionnaire providing support for their classification as a qualified institutional buyer. The questionnaire will conform to the requirements of the certifications under Rule 144A(d)(1)(iv). Upon receipt of a questionnaire completed [*4] in a manner that demonstrates on its face that the certifying institution is a qualified institutional buyer, its name will be added to the QIB List database together with the date as of which the information in the questionnaire was provided.
Institutions will be deleted from the QIB List if their most recent questionnaire becomes stale or if it is learned that such institution is no longer a qualified institutional buyer. CommScan will automatically delete an institution from the list if the most recent questionnaire provided by such institution is more than 16 months old in the case of a domestic institution or 18 months old in the case of a foreign institution. CommScan will also delete institutions from the list promptly upon the employees of CommScan responsible for the QIB List learning that such institution is no longer a qualified institutional buyer.
We appreciate your attention to this matter and look forward to receiving confirmation that the list of qualified institutional buyers prepare and published in the manner described above may be relied upon as a method of establishing a reasonable belief that a prospective purchaser is a qualified institutional buyer.
Sincerely,
[*5]
Thomas A. Fleming
President