[Federal Register Volume 59, Number 70 (Tuesday, April 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8628]
[[Page Unknown]]
[Federal Register: April 12, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33864; International Series Release No. 646; File No.
SR-Amex-94-04]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the American Stock Exchange, Inc. Relating to Foreign Listing
Standards
April 5, 1994.
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 February
23, 1994, the American Stock Exchange, Inc. (``Amex'' 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 Exchange is proposing to amend Section 110 of the Company Guide
to allow non-U.S. issuers to provide their U.S. shareholders with
summary annual reports under certain circumstances. The following is
the text of the proposed rule change, with italics representing the
language to be added:
Section 110. Securities of Foreign Companies * * *
(d) Disclosure--The Exchange will require the company to: (i)
furnish to American shareholders an English language version of its
annual financial statements and all other materials regularly
provided to other shareholders, and (ii) publish, at least semi-
annually, an English language version of its interim financial
statements. In addition, the Exchange will permit non-U.S. issuers
to follow home country practices regarding the distribution of
annual reports to shareholders, if, at a minimum, shareholders (i)
are provided at least summary annual reports and (ii) have the
ability, upon request, to receive a complete annual report, and the
financial information contained in the summary annual report is
reconciled to U.S. generally accepted accounting principles to the
extent that such reconciliation would be required in the full annual
report.
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 propose 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 1990 the U.K. Companies Act was amended to permit issuers listed
on the London Stock Exchange to provide holders of their ordinary
shares with an option to receive either a full annual report or a
summary annual report. The U.K. Companies Act sets forth the specific
financial and management information that must be contained in the
summary reports, and 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 amendments first became effective, shareholders
received both reports and notice of the available option with respect
to future reports.
The purpose of the amendments was to provide: (1) Potential cost
savings to issuers, and (2) a more easily read document to retail
holders. A majority of U.K. shareholders now receive the summary
reports, and the amendments are viewed as successful.
Certain U.K. issuers would now like to provide U.S. holders of
listed ADRs with summary reports in place of full annual reports if the
holders do not object. The Commission recently approved a New York
Stock Exchange (``NYSE'') rule change which allows non-U.S. issuers
which are NYSE-listed to mail summary annual reports to U.S. share/ADR
holders in lieu of the full annual report, if permitted by home country
practice.\1\
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\1\See Securities Exchange Act Release No. 33661, International
Series Release No. 637 (February 23, 1994), 59 FR 10028 (March 2,
1994).
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The Exchange is proposing to similarly amend Section 110 of the
Exchange's Company Guide, which is comparable to the NYSE provision
described above. Section 110 currently allows the Exchange to consider
the laws, customs and practices of the country where a non-U.S. issuer
is domiciled in evaluating the listing eligibility of a company whose
corporate structure or practices are inconsistent with specified rules
which apply to domestic companies, but requires that a full annual
report be provided to all U.S. share/ADR holders.
Under the proposed amendment, a U.S. holder would initially receive
both reports and then be provided with an ongoing option to receive
either report.\2\ The summary report would set forth such financial and
other information as is required by home country law and would be
required to include a U.S. GAAP reconciliation to the same extent as
would be required in the full annual report. The change would have no
impact on the issuer's existing annual and semi-annual SEC reporting
obligations.
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\2\The Commission notes that, although the U.K. Companies Act
requires that shareholders initially receive both reports, the
language of the proposed Amex rule permits non-U.S. issuers to
follow home country practices, which may not contain this
requirement.
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The proposed amendment is consistent with the Exchange's existing
policies with respect to non-U.S. companies, which permits such
companies to follow home country practice in such areas as interim
reporting and corporate governance.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the Act
in general and furthers the objectives of Section 6(b)(5) in particular
in that it is designed to foster cooperation and coordination with
persons engaged in regulating transactions in securities and to protect
investors and the public interest.
B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change will impose no 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 solicited or received with respect to 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-94-04 and should be
submitted by [insert date 21 days from date of publication].
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-8628 Filed 4-11-94; 8:45 am]
BILLING CODE 8010-01-M
