[Federal Register Volume 59, Number 3 (Wednesday, January 5, 1994)]
[Notices]
[Pages 642-643]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-144]
[[Page Unknown]]
[Federal Register: January 5, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33400; File No. SR-NYSE-93-47]
Self-Regulatory Organizations; Filing of Proposed Rule Change by
the New York Stock Exchange, Inc. Relating to Listing Standards for
Non-U.S. Companies
December 29, 1993.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on December
16, 1993, the New York Stock Exchange, Inc. (``NYSE'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II and III below, which
Items have been prepared by the self-regulatory organization. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed modification to NYSE policy would amend Paragraph 103
of the NYSE Listed Company Manual (``Non-U.S. Companies'') to permit
non-U.S. issuers to distribute summary annual reports to U.S. holders,
under certain circumstances.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of and basis for the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in Sections A, B, and C below, of the
most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The proposed modification to policy recognizes an amendment,
adopted in 1990, to the U.K. Companies Act which permits issuers listed
on the London Stock Exchange to provide an option to holders of their
ordinary shares to receive a full annual report or a summary annual
report. The Companies Act sets forth the specific financial and
management information that must be contained in the summary reports.
The Companies Act, as amended, also requires that shareholders who
receive only the summary report be given the opportunity, at any time,
to obtain the full annual report from the company and that companies
must notify shareholders annually of this right and how the report
might be obtained. When the program was instituted in the U.K. in 1990,
shareholders received both reports and notice of the available option
with respect to future reports.
Certain U.K. issuers are now seeking permission from the NYSE to
provide holders of listed ADRs with summary reports in place of full
annual reports if the holders do not object. The proposed modification
to policy is necessary to grant permission since current policy
requires all listed companies to submit to shareholders an annual
report with financial information as detailed in Paragraph 203.01 of
the NYSE Listed Company Manual.
The creation of the summary annual reports in the U.K. was prompted
by two objectives: Potential cost savings to the company and the
ability to provide a more easily read document to retail holders. The
effort has been deemed successful in the U.K. since a majority of
shareholders now receive the summary reports.
The Exchange is proposing that the NYSE annual report requirements
be modified to allow holders of NYSE-listed non-U.S. securities to
receive summary annual reports if (i) this is the practice in the home
country and (ii) certain conditions are met.
Specifically, issuers proposing to provide summary annual reports
to ADR holders would be required to:
(a) provide ADR holders with an ongoing option to
(1) Receive the full annual report on demand, and
(2) Annually change their election (as in the U.K., U.S. ADR
holders would initially receive both reports and notice of the
available option with respect to future reports);
(b) Follow the specific dictates of home country law or business
practice with respect to the data presented;
(c) Include a U.S. GAAP reconciliation to the extent that such
reconciliation would be required in the full annual report.
This proposal would be consistent with the Exchange's policies for
non-U.S. companies which effectively allow these companies to follow
home country practice in such areas as interim reporting and corporate
governance. In addition, we believe the modification to policy would be
consistent with the SEC's posture toward non-U.S. companies of being
accommodating without compromising disclosure.
2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under section 6(b)(5) that an exchange have rules that are
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest.
B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties. However, the Exchange adopted this proposed rule change, in
part, in response to a petition from eight listed U.K. companies
requesting that the exchange allow them to use summary annual reports.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
Within 35 days of the publication of this notice in the Federal
Register or within such other period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve the proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549.
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for inspection and copying at the
Commission's Public Reference Section, 450 Fifth Street, NW.,
Washington, DC 20549. Copies of such filing will also be available for
inspection and copying at the principal office of the NYSE. All
submissions should refer to File No. SR-NYSE-93-47 and should be
submitted by January 26, 1994.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-144 Filed 1-4-94; 8:45 am]
BILLING CODE 8010-01-M
