SECTION 4. TRANSITION RULES

FOR BROKERS FOR TRANSACTIONS OCCURRING IN 2002

.01 A broker that holds shares in a corporation that the broker reasonably believes, based on readily available information (including, for example, information from a clearing organization), has engaged in a transaction described in section 3.01 of this announcement must provide a letter to each actual owner of such shares that is not an exempt recipient (as defined in section 1.6043–4T(b)(6)) containing the language set forth in section 3.01 of this announcement. A broker that furnishes this letter to the actual owner satisfies the reporting requirements of section 1.6045–3T. The legend “Important Tax Return Document Enclosed” must appear in a bold and conspicuous manner on the out

side of the envelope containing the letter. The letter must be furnished to the actual owner on or before March 15, 2003.

.02 The broker must satisfy any other reporting obligations the broker may have with respect to the transaction. For example, the broker may be required under section 1.6045–1 of the regulations to report cash proceeds from the transaction on Form 1099–B.

.03 The broker is not required to send a letter under section 4.01 of this announcement to the actual owner if the broker furnishes Form 1099–B to the actual owner showing the amount of any cash and the fair market value as of the date of the transaction of the new shares and of any other property received by the actual owner in the transaction.

.04 For transactions occurring in 2002, provided the requirements of this section are satisfied, the broker is not required to file Form 1099–CAP with the Service with respect to the actual owners, or Form 1096 transmitting Form 1099–CAP. In addition, the broker is not required to furnish Form 1099–CAP to the actual owners of such shares.