[Federal Register Volume 60, Number 25 (Tuesday, February 7, 1995)]
[Notices]
[Pages 7251-7252]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2969]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35308; File No. SR-PHLX-94-69]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the Philadelphia Stock Exchange, Inc. Relating to a One Year
Pilot Program for the Trading, Comparison, Clearing, Settling, Listing,
and Delisting of Municipal Securities
January 31, 1995.
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
20, 1994, the Philadelphia Stock Exchange, Inc. (``PHLX'' or
Exchange'') filed with the Securities and Exchange Commission (``SEC''
or 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 PHLX proposes to amend its rules to establish a one year pilot
program allowing the Exchange to list and trade municipal securities.
Specifically, the PHLX proposes to (1) amend PHLX Rules 132, ``Dealings
Outside the Exchange in Securities Dealt in on the Exchange,'' 501,
``Specialist Appointment,'' 803, ``Criteria for Listing--Tier I,'' and
810, ``Suspension and Delisting Policies Based on Exchange Findings;''
and (2) add PHLX Rule 309, ``Municipal Securities,'' to provide
requirements for trading, comparison, settlement, clearing and listing
and delisting of municipal securities.
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 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
The purpose of the proposed rule change is to amend PHLX Rules 132,
501, 803 and 810 and to add PHLX Rule 309 to initiate a one year pilot
program for trading, comparison, clearance, settlement and listing and
delisting of municipal securities. Under proposed PHLX Rule 803(c)(5),
a municipal issuer may list municipal securities having an aggregate
market value and principal amount of at least twenty million dollars
($20,000,000) provided there are at least one hundred (100) public
beneficial holders and the issue is rated as investment grade by at
least one nationally recognized rating service.
Proposed PHLX Rule 810(d) requires the delisting of the debt
securities of a non-listed issuer when the issue no longer has at least
a market value or principal amount outstanding of at least half a
million dollars ($500,000), fails to be held by at least fifty (50)
public [[Page 7252]] beneficial owners of record or is no longer
investment grade rated by at least one nationally recognized rating
service.\1\
\1\Although the PHLX believes that proposed PHLX Rule 810(d)
will apply primarily to municipal securities, it may also apply to
the debt of issuers whose equities are not listed on the Exchange.
Telephone conversation between Murray L. Ross, Secretary, PHLX, and
Yvonne Fraticelli, Staff Attorney, Options Branch, Division of
Market Regulation, Commission, on January 20, 1995.
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The Exchange proposes to assign any municipal security it lists to
a specialist\2\ and to trade municipal securities in accordance with
all PHLX regulations otherwise applicable to the trading of securities
on the equities trading floor of the Exchange, except that pursuant to
proposed PHLX Rule 132(d)(17) municipal securities shall be exempt from
the provisions of the Exchange's off-board trading rule. Under proposed
PHLX Rule 309, municipal securities will be compared, settled and
cleared in accordance with the applicable regulations of the MSRB. The
PHLX believes that Exchange listing of municipal securities will allow
public investors to have an alternative to the over-the-counter market
to trade municipal debt securities.
\2\In this regard, the Exchange intends to require specialist
units applying for appointment and registration in municipal
securities to be in compliance with the Municipal Securities
Rulemaking Board (``MSRB'') G-3 regulations regarding municipal
securities principals and representatives. The National Association
of Securities Dealers (``NASD'') has authority to enforce MSRB rules
for listed municipal securities. The PHLX enforcement in this regard
will not preempt or limit in any manner the NASD's authority to act
in this area.
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The PHLX states that the proposed rule change is based on Section
6(b)(5) of the Act in that it is designed to further promote the
mechanism of a free and open market and to protect investors and the
public interest.
B. Self-Regulatory Organization's Statement on Burden on Competition
The PHLX does not believe that the proposed rule change will impose
any inappropriate burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
No written comments were either solicited or received.
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 PHLX consents, the Commission will:
(A) By order approve such 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, N.W., Washington, D.C. 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 Section, 450 Fifth Street, N.W.,
Washington, D.C. Copies of such filing also will be available for
inspection and copying at the principal office of the PHLX. All
submissions should refer to File No. SR-PHLX-94-69 and should be
submitted by February 28, 1995.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\3\
\3\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-2969 Filed 2-6-95; 8:45 am]
BILLING CODE 8010-01-M
