[Federal Register Volume 65, Number 5 (Friday, January 7, 2000)]
[Notices]
[Pages 1212-1214]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-388]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-42304; File No. SR-NYSE-99-52]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the New York Stock Exchange,
Inc., Extending the Pilot Fee Structure Governing the Reimbursement of
Member Organizations for Costs Incurred in the Transmission of Proxy
and Other Shareholder Communication Materials
December 30, 1999.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 28, 1999, the New York Stock Exchange, Inc. (``Exchange''
or ``NYSE'') 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 Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The Exchange proposes to extend the effectiveness of the pilot fees
(``Pilot Fee Structure'') currently set forth in Exchange Rule 451,
``Transmission of Proxy Material,'' and Exchange Rule 465,
``Transmission of Interim Reports and Other Material,'' (collectively
the '`Rules''). The Rules provide guidelines for the reimbursement of
expenses by NYSE issuers to NYSE member organizations for the
processing and delivery of proxy materials and other issuer
communications to security holders whose securities are held in street
name. The Pilot Fee Structure is presently scheduled to expire on
January 3, 2000. The Exchange proposes to extend the Pilot Fee
Structure through February 15, 2000.
The text of the proposed rule change is available at the Office of
the Secretary, the Exchange, and at the Commission.
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 Exchange included statements
concerning the purpose of and basis for
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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 Exchange 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
As first adopted, the Pilot Fee Structure revised the Rules to
lower certain reimbursement guidelines, create incentive fees to
eliminate duplicative mailings, and establish a supplemental fee for
intermediaries that coordinate multiple nominees.\3\ The Pilot Fee
Structure has been modified and extended several times,\4\ most
recently by Commission order dated November 1, 1999.\5\
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\3\ See Securities Exchange Act Release No. 38406 (Mar. 14,
1997), 62 FR 13922 (Mar. 24, 1997). The Commission initially
approved the Pilot Fee Structure as a one-year pilot and designated
May 13, 1998, as the date of expiration.
\4\ See Securities Exchange Act Release Nos. 39672 (Feb. 17,
1998), 63 FR 9034 (Feb. 23, 1998) (order extending Pilot Fee
Structure through July 31, 1998, and lowering the rate of
reimbursement for mailing each set of initial proxies and annual
reports from $.55 to $.50); 40289 (July 31, 1998), 63 FR 45652 (Aug.
10, 1998) (order extending Pilot Fee Structure through October 31,
1998); 40621 (Oct. 30, 1998), 63 FR 60036 (Nov. 6, 1998) (order
extending Pilot Fee Structure through February 12, 1999); 41044
(Feb. 11, 1999), 64 FR 8422 (Feb. 19, 1999) (order extending Pilot
Fee Structure through March 15, 1999); 41177 (Mar. 16, 1999), 64 FR
14294 (Mar. 24, 1999) (order extending Pilot Fee Structure through
August 31, 1999); and 41669 (July 29, 1999), 64 FR 43007 (Aug. 6.
1999) (order extending Pilot Fee Structure through November 1,
1999).
\5\ See Securities Exchange Act Release No. 42086 (Nov. 1,
1999), 64 FR 60870 (Nov. 8, 1999) (order extending Pilot Fee
Structure through January 3, 2000).
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In June of 1999, the Exchange submitted a proposed rule change to
the Commission (``June Filing'') to further revise the Pilot Fee
Structure and extend its effectiveness through August 31, 2001.\6\ The
June Filing proposes to reduce the basic processing fee and nominee
coordination fee that NYSE member organizations and proxy distribution
intermediaries may recover in connection with the distribution of proxy
and shareholder communication materials to shareholders. The June
Filing also proposes to define the term ``nominee'' as it relates to
the calculation of the nominee coordination fee.
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\6\ See Securities Exchange Act Release No. 41549 (June 23,
1999), 64 FR 35229 (June 30, 1999).
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The Exchange believes that an extension of the Pilot Fee Structure
through February 15, 2000, will give the Commission additional time to
fully consider the June Filing without a lapse in the current Rules.
Absent an extension of the Pilot Fee Structure, the fees in effect
prior to the Pilot Fee Structure (i.e., the fees in effect prior to
March 14, 1997) would return to effectiveness after January 3, 2000.
The Exchange believes that such a result could be counterproductive and
cause confusion among NYSE member organizations and issuers, especially
given that the June Filing, proposing to extend the revised Pilot Fee
Structure through August 31, 2001, is still pending with the
Commission.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b)(4) of the Act \7\ in that it provides for the equitable
allocation of reasonable dues, fees, and other charges among its
members and other persons using its facilities. The Exchange further
believes that the proposed rule change satisfies the requirement under
Section 6(b)(5) \8\ that an exchange have rules that are designed to
prevent fraudulent and manipulative acts and practices; promote just
and equitable principles of trade; foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities; remove impediments to and perfect the mechanism of a free
and open market and a national market system; and, in general, protect
investors and the public interest.\9\
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\7\ 15 U.S.C. 78f(b)(4).
\8\ 15 U.S.C. 78f(b)(5).
\9\ In reviewing this proposal, the Commission has considered
its impact on efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes 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 the proposed rule change. The Exchange has not received any
unsolicited written comments from members or other interested parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
Because the foregoing proposed rule change: (1) does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) the Exchange provided the Commission with written notice of its
intent to file the proposed rule change at least five business days
prior to the filing date; the proposed rule change has become effective
pursuant to section 19(b)(3)(A) of the Exchange Act \10\ and rule 19b-
4(f)(6) \11\ thereunder.
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\10\ 15 U.S.C. 78S(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under rule 19b-4(f)(6) normally does
not become operative prior to 30 days after the date of filing.
However, rule 19b-4(f)(6)(iii) permits the Commission to designate such
shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission designate such shorter time period so that the proposed rule
change may become operative no later than January 3, 2000. The
immediate effectiveness would allow the current Pilot Fee Structure to
continue uninterrupted and would provide the Commission with additional
time to complete its review of the June Filing.
The Commission, consistent with the protection of investors and the
public interest, has determined to make the proposed rule change
operative immediately upon filing for the following reasons. The
proposed rule change extends the expiration date of the Pilot Fee
Structure from January 3, 2000, to February 15, 2000. The extension of
the Pilot Fee Structure will provide the Commission with the additional
time necessary to complete its review and evaluation of the June
Filing.
The Commission notes that unless the current expiration date of the
Pilot Fee Structure is extended, the reimbursement rates for proxy
materials distributed after January 3, 2000, will revert to those in
effect prior to March 14, 1997. The Commission believes that such a
result could be confusing and counterproductive, especially given that
the June Filing proposing to extend the Pilot Fee Structure through
August 31, 2001, is still pending with the Commission.
Based on the above reasons, the Commission believes it is
consistent with the protection of investors and the public interest
that the proposed rule
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change become operative immediately upon the date of filing, December
28, 1999. At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
Copies of the submissions, 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 persons, 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 in 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 Exchange. All
submissions should refer to File No. SR-NYSE-99-52 and should be
submitted by January 28, 2000.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-388 Filed 1-6-99; 8:45 am]
BILLING CODE 8010-01-M
