U.S. Securities & Exchange Commission, Room 2110, Stop O-4, 6432 General Green Way, Alexandria, VA 22312-2413

D -- ADP Contact, David Copenhafer, (202) 942-8800. The Securities and Exchange Commission (SEC) is publishing this second Request for Information (RFI) from companies and individuals with experience, capabilities of interests relating to the SEC's electronic filing system known as EDGAR. The need for this second RFI arises from SEC wishes to supplement the thoughtful and helpful comments received in response to the first request, and as a result of recent SEC discussions held internally, with industry and academic experts, and with the Congress. This request solicits comment on several potential EDGAR system architectures, the characteristics of which are described below. Comment is solicited not just from a technical point of view, or from the perspective of potential bidders, but also from filers and the many users of SEC disclosure information as well. Comment on the legal and commercial implications of each architecture are also sought. Respondents should note that their comments will be considered public information by the SEC, and that the SEC will not be able to honor any requests for comments to be kept confidential. This notice, as published in the Commerce Business Daily, cannot accommodate drawings of the architectures being considered. Respondents who wish to make reference to the SEC's diagrams depicting the interrelationships among the various elements of the system can secure copies from the SEC's World Wide Web site (http://www.sec.gov) or by requesting them at the address shown at the bottom of this notice. Brief descriptions of each of what the SEC considers the principal models under consideration are provided below. The order of presentation is not intended to convey any preference for one approach over another. All models also assume the SEC will retain its Internet site and continue to offer the current level of EDGAR document dissemination service (one day delay and FTP bulk download capability.) I. Evolve the Current Model: A. All filings come to the SEC for receipt and acceptance; B. Filings are disseminated, as received, through a single, high volume, high speed, high reliability, commercial point of distribution; C. The Commission requests comment on three possible dissemination pricing structures: (1) Subscriber pricing based upon the cost and agreed-upon rate of return of a privatized, single point of dissemination similar to the approach used currently; (2) Alternatively, the SEC could ask for and accept a bid from a vendor offering the lowest cost to subscribers based upon a bid, fixed schedule of prices. Comment is sought on appropriate duration of such a contract (e.g., 1, 2, or 3 years.); (3) As a third alternative within this first model, the SEC could bring the first tier disseminator ``in house'' and have it paid by the SEC. The SEC would establish the price of each of the services offered to the second tier and would apply revenues to offset a variety of system costs (assuming the establishment of a suitable mechanism to permit the agency to retain such revenues.); D. Document structure would evolve from the current ASCII-SGML structure. The first addition would be to permit attached, standardized, image files of a specified maximum size. Later changes would move toward a richer text format which would not impose any undue burdens on the filer, the SEC, or the dissemination and public viewing structures. This richer text would probably be achieved through the addition of certain, allowable HTML commands or possibly through conversion of PDF format. The SEC might limit by rule the type of information that would be permitted to be filed inside an image file. Issuers would also be free to enhance the electronic information they distribute to shareholders and investors; E. Contracting would be done through separate contracts for: 1) Receipt and Acceptance, and 2) Dissemination. The fundamental advantages of this first model and its variants are: 1) it preserves the existing financial investment in SEC systems, 2) it allows for needed (albeit slow, evolutionary) changes for solving the image and document format concerns; 3) it minimizes ``end to end'' costs of the system (i.e., for all parties) in the short term in that it does not require any significant new investment on the part of filers, the SEC, disseminators or document users. Long term cost-benefits of this option are not clear. The disadvantages of the first model are: 1) filers are still faced with the cost and difficulty of having to convert their documentss to ASCII; 2) ASCII is retained throughout the system, and information users are denied (for the immediate future) a more attractive document; and 3) financing alternative 3 would require the SEC to invest in the design, construction and operation of the first tier dissemination capability. II. Multiple Dissemination Points Model: A. Receipt and Acceptance would remain as described in architecture I above; B. The approach to dissemination would be modified such that the SEC would disseminate EDGAR data to possibly three, high speed, high volume, high reliability, commercial distribution points instead of one. These disseminators would sell Level I and Level II services to large end users and resellers; C. The disseminators would be selected through a bid process; D. Each disseminator would have a separate contract, and would pay the SEC either an agreed-upon fixed fee or possibly a percentage of revenues derived from the sale of EDGAR data. One advantage of Model II beyond those stated for Model I is that the dissemination process may be improved as a result of competition among multiple depositories/disseminators. Its disadvantage is that the SEC might be required to slightly enhance its current dissemination capabilities to handle three recipients instead of one. III. Single Depository Filing and Dissemination Point Model: A. Filers would have a choice of filing directly, at no cost other than existing filing fees, with the SEC in ASCII, or through an approved depository which would accept documents in a number of native word processing formats for which a fee could be charged; B. The depository would convert the documents it received to ASCII for official transmission to the SEC; C. The SEC would provide the depository with a copy of every ASCII file received directly from a registered entity; D. (1) Within one variant of Model III, the SEC would provide an acceptance message to the depository service upon SEC acceptance of a filing in order to let the service know the document was available for dissemination. (2) Within a second variant, the depository would assume the responsibility for official acceptance, in which case, no acceptance message would be necessary; E. The depository would be responsible for all dissemination outside of the SEC's Internet offering and would recover the cost of its document conversions and dissemination services through dissemination fees and through fees to filers; F. One criterion used to select the single depository would be the duration of the contract. By keeping the contract duration short, the depository would remain under competitive pressure to keep prices low and to remain innovative. Advantages of Model III are: 1) it offers filers a new, and possibly lower cost, option for having filings converted to ASCII; 2) having an approved, commercial entity involved in document conversion to ASCII might stimulate efforts to improve ASCII conversions generally; 3) it achieves an efficiency in the dissemination structure in that the point of document receipt is also the first point of commercial dissemination for all documents except those received directly from filers by the SEC; 4) adopting a privatized depository structure would enable the SEC to respond more quickly and effectively to changes in technology beneficial to the filers in meeting their document preparation and submissions needs; 5) a final advantage may lie with the fact that the depository could supplement the standard ASCII dissemination stream with native word processing documents. Disadvantages of this third model are that: 1) it requires an investment to construct a new (somewhat duplicative) system ``front end'' to serve as the receipt point for the thousands of EDGAR filers. (The SEC might experience some cost savings to the extent it could reduce the size of its own front end requirements-although it would still have to receive and accept every filing.); 2) during the contract period, there would be no competition within this structure. This would be mitigated by keeping the contract period as short as possible. IV. Multiple Depositories Model: A. All aspects of this model are as described above in model number III, with the exception that there would be multiple depositories which would compete for document conversion and dissemination business; B. The SEC would provide copies of the ASCII files it received directly from registrants to each of the depositories for their use in providing dissemination services; C. The multiple depositories would be directed to create an acceptable dissemination strategy. This could possibly be achieved by having the depositories create a single, physical database for dissemination purposes. Alternatively, they could each disseminate their separate inventories through a single point of interconnection which would serve the wholesale subscriber community, but would not maintain a separate dissemination database. Comment is sought on these and other approaches. The primary advantages of Model IV, in addition to those stated for Model III, are: 1) it creates competition among the depositories to the extent that depositories, under certain circumstances, would be willing to pay issuers to file with them; and 2) the filing community would have not only a new document conversion alternative, it would also benefit from the competition which will take place among the depositories for possible value-added services unrelated to SEC filing. Disadvantages are: 1) the dissemination structure is complicated by the fact that documents are held by several recipients. Respondents are asked to examine all aspects of each model and any internal variants and provide the SEC with their views of the perceived ``advantages'' and ``disadvantages'' stated for each model. The Commission requests comment on whether it should provide EDGAR filings on a real-time basis or continue its current dissemination activities on a day-delayed basis. Comments should address policy and technical issues. Should the operators of the depositories described in Models III and IV be required to offer at no charge via the Internet the raw filings they receive for conversion? Issues of liability with respect to document conversions are another area where respondents are asked to focus their comments. Rating each model from 1 through 5, with 5 signifying the highest rating, would also assist the agency in its deliberations. Finally, the SEC again asks for alteratives to ASCII which: 1) facilitate filer document preparation and submission; 2) assist the SEC with storing and word searching filings; and 3) are easily handled and displayed by the dissemination and document viewing communities. Comments should be received by the SEC by January 22, 1996. All responses will be reviewed, and the submitter will be added to the bidders' list. Comments will be placed in the SEC's Public Reference Room at the SEC headquarters building located at 450 5th Street, N.W. in Washington, D.C. No telephone inquiries will be accepted. In addition to the mailing address provided below, the SEC will accept electronic comments directed via Internet e-mail to: webtech@sec.gov. MAILING ADDRESS FOR RESPONSES: U.S. Securities and Exchange Commission, Office of Information Technology, EDGAR RFI-2/MS 0-4, 6432 General Green Way, Alexandria, VA 22312. (008)

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