Easing of Rules on Tender Offers Sought : Securities: The SEC proposes exemptions for foreign entities from some U.S. registration requirements.

Federal securities regulators proposed rule changes Tuesday that would make it easier to include U.S. stockholders in tender offers for their holdings in foreign securities.

The Securities and Exchange Commission voted to seek public comment on proposed changes that would exempt foreign entities from some U.S. registration requirements to encourage them to extend offers for shares to American holders.

Under current rules, for U.S. shareholders to be included in a tender or shareholders’ rights offering on a foreign company, the offers must comply completely with U.S. rules.

That can lead to significant costs and delay. SEC Chairman Richard C. Breeden said that since U.S. shareholders usually make up only a small fraction of total shareholders, “it has resulted in numerous foreign companies simply excluding U.S. shareholders from any such offering.”

“So long as U.S. shareholders do not represent a sufficiently large share of total corporate ownership . . . the ‘exclude-the-Americans’ approach has been widely utilized,” he said.

That cuts American shareholders out of potentially lucrative deals during a takeover battle and other transactions.

The planned change would allow, for example, a British company making a tender offer for the shares of another British company to extend the offer to U.S. shareholders--who might make up only 3% of the shareholders--by furnishing the required British takeover disclosure documents.

The exemption from U.S. disclosure documents would be limited to cases where U.S. holders made up less than 10% of shareholders.