Effective February 17, 2006, the minimum transaction value triggering a Hart-Scott-Rodino filing will increase from $53.1 million to $56.7 million based on changes in the United States Gross National Product, as required by the 2001 amendments. This change is the second such indexing under the 2001 amendments. In a separate announcement, the Federal Trade Commission issued a revised Hart-Scott-Rodino Form, changing the base year for revenue reporting from 1997 to 2002.

Indexing: Lowest Threshold Increases from $53.1 Million to $56.7 Million

When Congress amended the Hart-Scott-Rodino (HSR) Act in 2001, it required the Federal Trade Commission (FTC) to revise the jurisdictional thresholds annually, beginning in 2005, based on changes in the United States Gross National Product. The second such indexing will become effective on February 17, 2006. 71 Fed. Reg. 2943 (Jan. 18, 2006). In the HSR Regulations, the FTC has inserted the words "as adjusted" in each regulation that must be indexed. All of the "adjusted" regulations are set forth in the following chart:

Summary Chart of HSR Indexing

2001 HSR Provision

New Indexed Amount

Citation

$50 million jurisdictional threshold

$56.7 million

15 USC § 7A(a)(2)(B)(i)

$200 million jurisdictional threshold

$226.8 million

15 USC § 7A(a)(2)(A)

Size-of-person test
  • $10 million size-of person test

$11.3 million

15 USC § 7A(a)(2)(B)(ii)(i)
  • $100 million sizeof- person test

$113.4 million

15 USC § 7A(a)(2)(B)(ii)(i)

Notification thresholds
  • $50 million

$56.7 million

16 CFR § 801.1(h)(1)
  • $100 million

$113.4 million

16 CFR § 801.1(h)(2)
  • $500 million

$567.0 million

16 CFR § 801.1(h)(3)

25% of shares if valued over $1 billion

25% of shares if valued over $1,134 million

16 CFR § 801.1(h)(4)

50% of shares if valued over $50 million

50% of shares if valued over $56.7 million

16 CFR § 801.1(h)(5)

Filing fee
  • $50 million transaction

$56.7 million [fee = $45,000]

15 USC § 18a note 3(b)(1)
  • $100 million transaction

$113.4 million [fee = $125,000]

15 USC § 18a note 3(b)(2)
  • $500 million transaction

$567.0 million

[fee = $280,000]

15 USC § 18a note 3(b)(3)

Size-of-person test in formation of new entities if value less than $200 million:

Less than $226.8 Million

16 CFR § 801.40
  • $100 million
  • $113.4 million

    • 16 CFR § 801.50
    • $10 million
  • $11.3 million
    		•  

    Exempt acquisition of foreign assets:

    		  

    16 CFR § 802.50
    • Sales in or into the U.S. $50 million or Less
  • $56.7 million or less
    		•  
    • Transaction $200 million or less and
  • $226.8 million or less and
    		•  
    • Aggregate sales in/into US of both parties less than $110 million
  • $124.7 million or less
    		•  
    • Aggregate assets in US of both parties valued less than $110 million
  • $124.7 million or less
    		•  

    Exempt acquisition of foreign securities

    		  

    16 CFR § 802.51
    • Value of U.S. assets and sales in/into U.S. each $50 million or less
  • $56.7 million or less
    		•  
    • Transaction $200 million or less and
  • $226.8 million or less and
    		•  
    • Aggregate sales in/into US of both parties less than $110 million
  • $124.7 million or less
    		•  
    • Aggregate assets in US of both parties valued less than $110 million
  • $124.7 million or less
    		•  

    Amount of Filing Fees Unchanged

    The filing fees will not change, but the transaction value that triggers each fee will be indexed with the new jurisdictional thresholds:

    2001 HSR Provision

    New Indexed Threshold

    Filing Fee Amount

    $50 million value of transaction

    $56.7 million

    $ 45,000

    $100 million value of transaction

    $113.4 million

    $125,000

    $500 million value of transaction

    $567.0 million

    $280,000

    Revised HSR Report Form with 2002 Base Year

    On December 30, 2005, the FTC issued a revised HSR Notification and Report Form that requires all filers to use the 2002 North American Industry Classification System (NAICS), rather than the 1997 NAICS. 70 Fed. Reg. 77312 (Dec. 30, 2005). The base year for reporting revenues will change from 1997 to 2002, but there will be a 30 day grace period to allow filing parties to make the transition to the new base year. During the transition period, which will end on January 30, 2006, filers may elect to use either the 1997 or 2002 NAICS, but all parties filing in connection with a particular transaction must use the same base year and, if reporting overlapping revenues, the same NAICS codes for the overlapping revenues.

    The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.