SEC Amends Rule 12g3-2(b) Exemption

On March 21, the U.S. Securities and Exchange Commission ("SEC") voted to adopt a new rule enabling foreign private issuers ("FPIs") to use a trading volume benchmark, instead of the traditional headcount of U.S. shareholders, to determine eligibility to deregister a class of equity securities and terminate their reporting obligations under the Securities Exchange Act of 1934 ("Exchange Act").¹ Rule 12g3-2(b) ("Rule") was also amended to make it possible for FPIs that terminate their reporting obligations under new Rule 12h-6 to be immediately eligible for exemption under the Rule.²

The Rule provides an exemption from registration under Section 12(g) of the Exchange Act for FPIs that submit to the SEC on a current basis certain materials required by the Rule. The purpose of the Rule is to give investors access to certain information regarding the issuer to allow them to become knowledgeable about the issuer. If not for the exemption provided by Rule 12g3-2(b), FPIs with