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Comment letter to the SEC
April 5, 2004
United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Attention: Jonathan G. Katz, Secretary
Via e-mail: rule-comments@sec.gov
Re: File Number S7-14-04; Mandated Electronic Filing for Form ID
Ladies and Gentlemen:
The American Society of Corporate Secretaries, Inc. (ASCS) is a professional
association founded in 1946, serving more than 3,000 issuers. Job responsibilities
of our members include working with corporate boards of directors and senior
management regarding corporate governance; assuring issuer compliance with securities
regulations and listing requirements; and coordinating activities with shareholders
such as proxy voting for the annual meeting of shareholders and negotiation
of shareholder proposals. The majority of ASCS members are attorneys.
We thank the Commission and Staff for the opportunity to respond to the request
for comments on the proposed rule and form amendments to mandate the electronic
filing of Form ID. The Society supports the Commission's efforts to automate
the filing of the Form ID. However, while the electronic filing of Form ID can
facilitate the more efficient transmission and processing of the information
Form ID requires, which is the stated intent of the proposed rule, we see some
practical difficulty with the proposals.
The proposed requirement to notarize a document would be overly burdensome
to multinational corporations. A person often is out of the country at the time
he or she is elected or promoted to a position requiring filings. It would be
very burdensome to contact that person who may then have to find a U.S. embassy,
for example. New filers would have to expend more time and effort in obtaining
their codes, particularly new filers who reside, or are traveling, outside of
the United States. The definition and process of "notarization" can
differ between countries. The proposed amendments appear to address only the
notarization process in the United States. Should this requirement be enacted,
it would be helpful to clarify what would constitute "notarization"
outside the United States.
In addition, the proposed requirement to fax a notarized confirming document
authenticating the electronically filed Form ID would not appear to be an effective
safeguard in assuring the authenticity of the Form ID. Notarization is not a
guarantee against fraud. Any individual who intends to fraudulently obtain EDGAR
access codes could appear before a notary public under the guise of a false
identity and have the notary witness his or her signature. The notarization
itself could be fraudulent.
The proposal is not specific regarding the Staff's concerns about fraud prevention.
The current process of requiring a new filer to fax a Form ID does not require
any additional authentication. Actual experience with fraudulent filings might
indicate the most effective safeguards. Since we do not know what problems experience
has uncovered, we question whether further authentication is necessary, or if
it is, that notarization is the best method. Given the burdens of notarization,
perhaps other methods could be explored.
We believe that hardship exemptions should be available for Forms ID where
the new filer is in a situation where access codes must be obtained for an imminent
filing and the new filer temporarily does not have Internet access. Hardship
exemptions should be considered where the SEC's EDGAR Filer Management website
is temporarily unavailable.
Many filers rely on registrants or filing agents to submit filings to the SEC
on their behalf. Please clarify that under the proposal these filings can be
submitted by a filing agent pursuant to a power of attorney and whose signature
would need to be notarized.
Please call me if you have any questions concerning the comments in this letter.
Thank you.
Cordially,
American Society of Corporate Secretaries
Securities Law Committee
Carol C. Hayes
By: Carol C. Hayes
(404) 676-5622
| cc: |
Margaret Foran
Kathleen A. Gibson
David Smith
Susan Ellen Wolf |
Society of Corporate Secretaries and Governance Professionals
521 Fifth Avenue New York NY 10175
212-681-2000 - Fax 212-681-2005
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