[Federal Register Volume 59, Number 210 (Tuesday, November 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27038]
[[Page Unknown]]
[Federal Register: November 1, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34890; File No. SR-Amex-94-34]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by American Stock Exchange, Inc. Relating to the Listing of
Entities Resulting From Limited Partnership Rollups
October 25, 1994.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. Sec. 78s(b)(1), notice is hereby given that on
September 6, 1994, the American Stock Exchange, Inc. (``Amex'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') 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 Amex is proposing to adopt Section 126 to the Company Guide to
allow the listing of entities resulting from limited partnership rollup
transactions under specified conditions and to impose certain corporate
governance standards on limited partnerships. The text of the proposed
rule follows (italics reflects proposed additions to the Rules):
Sec. 126 LIMITED PARTNERSHIPS--No security issued in a limited
partnership rollup transaction (as defined by Section 14(h) of the
Exchange Act), shall be eligible for listing unless (i) the rollup
transactions was conducted in accordance with procedures designed to
protect the rights of limited partners as provided in Section 6(b)(9)
of the Exchange Act, as it may from time to time be amended and (ii) a
broker-dealer which is a member of a national securities association
subject to Section 15A(b)(12) of the Exchange Act participates in the
rollup transaction. The applicant shall further provide the Exchange
with an opinion of counsel that the rollup transaction was conducted in
accordance with the procedures established by such association.
Each limited partnership listed on the Exchange shall have a
corporate general partner or co-counsel partner which must satisfy the
independent director and audit committee requirements of Section 121.
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
In December 1993, Congress adopted the Rollup Reform Act of 1993 to
regulate limited partnership rollups. The Rollup Reform Act amended
Section 6 of the Securities Exchange Act of 1934 (``Exchange Act'') to
provide that the rules of an exchange must prohibit the listing of a
rollup security unless ``the transaction was conducted in accordance
with procedures designed to protect the rights of limited partners.''
Section 6(b)(9) of the Exchange Act further specifies certain
procedures which would protect limited partners' rights.
In accordance with Section 6(b) of the Exchange Act, the Exchange
is proposing to adopt a new Section 126 to the Company Guide which
would condition the listing of securities issued in a rollup
transaction upon satisfaction of the criteria set forth in Section
6(b)(9) of the Exchange Act. The new section would also provide that a
broker-dealer which is a member of the NASD must participate in the
rollup transaction, and that the issuer should provide the Exchange
with an opinion of counsel confirming that the rollup was in fact
conducted in accordance with NASD procedures. This will enable the
Exchange to rely upon the regulatory scheme adopted by the NASD (and
recently approved by the Commission) to govern the listing of rollups.
In addition, the Exchange is proposing to amend Section 126 to
require that limited partnerships have at least one corporate general
partner, or co-general partner, which would have to satisfy the
Exchange's independent director and audit committee requirements (at
least two independent directors, and an audit committee, a majority of
whose members must be independent directors). The NASD has a similar
rule, while the NYSE has a similar policy.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Exchange Act in general and furthers the objectives of Section 6(b)(5)
in particular in that it will prevent fraudulent and manipulative acts,
promote just and equitable principles of trade and protect investors
and the public interest since it will prohibit the listing of any
securities resulting from an unfair rollup transaction and will impose
enhanced corporate governance standards for limited partnerships.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
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 neither solicited nor received written comments on
the proposed rule change.
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. Sec. 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 Amex. All
submissions should refer to File No. SR-Amex-94-34 and should be
submitted by November 22, 1994.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 94-27038 Filed 10-31-94; 8:45 am]
BILLING CODE 8010-01-M
