[Federal Register Volume 63, Number 212 (Tuesday, November 3, 1998)]
[Notices]
[Pages 59351-59353]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29339]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40605; File No. SR-NYSE-98-26]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change and Amendment No. 1 by the New
York Stock Exchange, Inc., Relating to Delisting of Securities
October 26, 1998.
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 October 9, 1998, the New York Stock Exchange, Inc. (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') a proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange.\3\
[[Page 59352]]
The Commission is publishing this notice to solicit comments on the
proposed rule change, as amended, from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ The proposal was originally submitted on August 24, 1998.
However, the proposed rule change was amended to make changes to the
proposed rule language and provide a greater basis for the proposed
rule change. See Letter from James E. Buck, Senior Vice President
and Secretary, NYSE, to Michael Walinskas, Deputy Associate
Director, Division of Market Regulation (``Division''), Commission,
dated October 7, 1998 (``Amendment No. 1''). Subsequently, the
Exchange agreed to make an additional technical change to its rule
language by replacing the phrase ``this Listed Company Manual'' with
``the Listed Company Manual'' in Rule 499.20(6). Telephone
conversation between N. Amy Bilbija, Counsel, NYSE, and Terri L.
Evans, Attorney, Division, Commission on October 22, 1998. Because
the Exchange requested immediate effectiveness under Section
19(b)(3)(A) of the Act, 15 U.S.C. 78s(b)(3)(A), the proposed rule
change is deemed filed as of the date of filing of Amendment No. 1.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The Exchange is proposing to conform NYSE Rule 499, governing the
suspension and delisting of securities, to the standards in Paragraph
802 of the Exchange's Listed Company Manual (``Manual''). The text of
the proposed rule change is as follows: new text is italicized and
deleted text is bracketed:
Suspension From Dealings or Removal From List by Action of the
Exchange
* * * * *
Rule 499. Securities admitted to the list may be suspended from
dealings or removed from the list at any time.
* * * Supplementary Material
.10 No change.
* * * * *
.20 NUMERICAL AND OTHER CRITERIA.--
* * * * *
The Exchange would normally give consideration to
suspending or removing from the list a security of a
company when:
1. [Number of shareholders is less than:] Number of 400; or
total stockholders is less than.
Number of total stockholders is less than [Holders of 1,200 and
100 shares or more (or of a unit of trading if less
than 100 shares)].
Average monthly trading volume (for most recent 12 100,000 shares.
months) is less than
The number of beneficial holders of stock held in the name of NYSE member organizations will be considered in
addition to holders of record.
2. Number of publicly-held shares* is less than........ 600,000**
*Shares held by directors, officers, or their immediate families and other concentrated holdings of 10% or
more are excluded in calculating the number of publicly-held shares.
**If the unit of trading is less than 100 shares, the requirement relating to the number of shares publicly
held shall be reduced proportionately.
3. Aggregate market value of publicly-held shares,* $8,000,000
subject to adjustment** depending on market conditions
is less than.
[, within the following limits
Maximum............................................ $5,000,000
Minimum............................................ $2,500,000]
* * * * * *
*
4. Aggregate market value of shares outstanding $12,000,000 [$8,000,000] and
(excluding treasury stock) is less than.
Average net income after taxes for past 3 years is less $600,000
than.
5. Net tangible assets available to common stock are $12,000,000 [$8,000,000] and
less than.
Average net income after taxes for past 3 years is less $600,000
than.
6. For companies that, on listing, demonstrated earning $25,000,000
power by meeting the listing standards requiring
minimum levels of adjusted net income, and for
companies that are currently valued on a ``cash flow''
basis, as described in Para. 102.01 of the Listed
Company Manual: Aggregate market value of shares
outstanding (excluding treasury stock) is less than.
And average adjusted net income for past 3 years is $6,500,000
less than.
{Renumber existing paragraphs 6 through 19 as 7 through 20,
respectively.}
.30-.50 No change.
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, 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
In File No. SR-NYSE-96-07 (the ``1996 Filing'') the NYSE proposed,
and the Commission approved, changes to Paragraph 802 of the Manual to
add a new continued listing standard for companies that list pursuant
to the Exchange's adjusted net income standard in Paragraph 102.01 of
the Manual, or that are currently valued on a cash flow basis.\4\ The
1996 Filing also raised certain other NYSE continued listing standards.
Specifically, the 1996 Filing added new delisting criteria for ``cash
flow'' companies, requiring that such companies have average adjusted
net income for the most recent three years of at least $6.5 million and
an aggregate market value of the company's shares of at least $25
million. That filing also: raised the continued listing criteria to $8
million in aggregate market value of publicly-held stock (from $5
million); raised the market value and net tangible asset tests, when
coupled with an earnings test, to $12 million (from $8 million); and
replaced the test that a company have at least 1,200 holders of at
least 100 shares with a new continued listing test that a company have
at least 1,200 total holders coupled with an average monthly trading
volume of at least 100,000 shares for the most recent 12 months. In
addition, the 1996 Filing added a stand-alone continued listing test
that a company have a minimum of 400 total stockholders regardless of
its trading volume.
---------------------------------------------------------------------------
\4\ See Exchange Act Release No. 37307 (June 12, 1996);
Amendment No. 1, supra note 3.
---------------------------------------------------------------------------
[[Page 59353]]
Those standards currently are in effect.\5\ The purpose of this
proposed rule change, as amended, is merely to conform Rule 499 to the
standards in effect as set forth in the Manual.\6\
---------------------------------------------------------------------------
\5\ See Amendment No. 1, supra note 3.
\6\ Currently pending before the Commission is a rule filing
proposing additional changes to, among other things, the Exchange's
continued listing standards, including Rule 499. See File No. SR-
NYSE-98-21. If approved by the Commission, those standards would
supersede the standards contained in this filing.
---------------------------------------------------------------------------
2. Statutory Basis
The Proposed rule change is consistent with Section 6(b)(5) of the
Act,\7\ because it is designed to prevent fraudulent and manipulative
acts and practices, to promote just and equitable principles of trade,
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.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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 comments on this 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
The proposed rule change is concerned solely with the
administration of the Exchange and therefore, has become effective
pursuant to Section 19(b)(3) of the Act \8\ and Rule 19b-4(e)(3)
thereunder.\9\ At any time within 60 days of the filing of such
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.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3).
\9\ 17 CFR 240.19b-4(e)(3).
---------------------------------------------------------------------------
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.
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 in the
Commission's Public Reference Room in Washington, DC. 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-98-26 and should
be submitted by November 24, 1998.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------
\10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-29339 Filed 11-2-98; 8:45 am]
BILLING CODE 8010-01-M
