[Federal Register Volume 63, Number 83 (Thursday, April 30, 1998)]
[Notices]
[Pages 23821-23822]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-11448]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-39906; File No. SR-CHX-98-7]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the Chicago Stock Exchange, Inc. Regarding Maintenance
Standards and Listing Requirements
April 23, 1998.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on March 18, 1998, the
Chicago Stock Exchange, Incorporated (``CHX'' 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.
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\1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The Exchange proposes to amend Rules 14, 15, 16, 17 and 22 of
Article XXVIII and the interpretation and policy .01 of Rule 2 of
Article XXVIII. The Exchange further proposes to add interpretation and
policy .03 to Rule 2 of Article XXVIII. The proposed rule amendments
would clarify the requirements for listing and/or maintenance on the
CHX a security that is also listed on another primary market and modify
the maintenance and delisting standards regarding securities listed on
Tier II of the Exchange.
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
The proposed rule change relates to four listing issues: (i) Tier
II listing standards for stock warrants, (ii) listing application
requirements for securities that are listed or approved for listing on
certain other markets, (iii) delisting of a security for lack of
sufficient trading volume, and (iv) the elimination of certain
maintenance listing standards for securities currently listed on
certain other markets.
Tier II Stock Warrants. The exchange does not currently have
maintenance standards for stock warrants listed on Tier II of the
Exchange. The proposed rule change would require that, in the case of
Tier II stock warrants, the common stock of the company or other
security underlying the stock warrants meet the applicable Tier II
maintenance requirements. The proposed rule change would allow the
Exchange to delist stock warrants that did not have adequate
``backing'' of an underlying security.
Listing Application Requirements For Certain Securities Listed on
Other Markets. Currently, the Exchange may list a security of an issuer
that is listed or has been approved for listing on another primary
market. The proposed rule change would clarify that if the Exchange
chooses to list, under either Tier I or Tier II, a security listed or
approved for listing, within the past twelve months, on the New York
Stock Exchange (``NYSE''), the American Stock Exchange (``Amex''),
except for Emerging Company Marketplace
[[Page 23822]]
securities, or the Nasdaq National Market, the issuer shall not be
required to fulfill all the requirements for an original listing
application. Instead, the issuer shall only be required to submit to
the Exchange (1) a copy of the application for listing on the NYSE,
Amex or Nasdaq National Market, together with all supporting materials,
(2) a board resolution of the issuer authorizing listing on the
Exchange, (3) the issuer's Form 10-K, most recent three Form 10-Qs, and
most recent proxy statement (for non-IPOs), or the issuer's latest
registration statement and exhibits (for IPOs), (4) the required
listing fee, (5) an executed Exchange listing agreement, (6) evidence
of approval for listing by the NYSE, Amex or Nasdaq National Market,
(7) a specimen stock certificate, (8) the issuer's registration
statement filed under the Securities Exchange Act of 1934, and (9) a
Letter of Reliance authorizing the Exchange to process the application
and supporting materials as if addressed to the Exchange in lieu of an
original listing application.
Delisting For Lack of Sufficient Volume. Current Rule 22(c) of
Article XXVIII provides that Tier II listed issues will normally be
considered for delisting if the company fails to maintain a net worth
which is the greater of (i) 150% of the prior year's consolidated net
loss or (ii) $500,000 or when the volume of trading declines to a level
which will not support a listed market in the judgment of the Exchange
and its Committee on Floor Procedure. The proposed rule change would
eliminate the specific reference to volume of trading as vague and
unnecessary in light of the authority Rule 22(a) grants the Exchange to
delist Tier II securities.
Maintenance Listing Standards. Currently, Rules 14, 15, 16, 17 and
22 of Article XXVIII provide for certain maintenance standards that
Tier I and Tier II listed securities must meet in order to continue to
be listed on the Exchange. The proposed rule change would provide that
if a security that is listed on the Exchange is also listed on the
NYSE, Amex or Nasdaq National Market, as long as the security continues
to be listed on such other market, it shall not be required to meet
certain of the maintenance standards contained in the Exchange's
rules.\2\ This provision will avoid a situation where the Exchange
might be forced to delist a security that fails certain maintenance
tests, when it continues to meet the requirements of such other market.
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\2\ The proposal would exempt from the Exchange's quantitative
maintenance standards securities that are also listed on the NYSE,
Amex, or Nasdaq National Market. The quantitative maintenance
standards govern, for example, net tangible assets, the number of
public beneficial shareholders, and the market value of an issuer's
shares publicly held. The Commission notes that the proposed rule
change would not provide an exemption from the Exchange's corporate
governance and disclosure requirements for securities that maintain
a listing on the CHX and are otherwise listed on the NYSE, Amex, or
Nasdaq National Market.
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b)(5) \3\ of
the Act in that it is designed to promote just and equitable principles
of trade, to foster cooperation and coordination with persons
regulating securities transactions, 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.
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\3\ 15 U.S.C. 78f(b)(5).
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(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.
(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 date of publication of this notice in the
Federal Register or within such longer 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 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, 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, N.W., Washington, D.C. 20549.
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 person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 522, will be available for inspection and copying at the
Commission's Public Reference Room, 450 Fifth Street, N.W., Washington,
D.C. 20549. Copies of such filing will also be available for inspection
and copying at the principal office of the CHX. All submissions should
refer to File No. SR-CHX-98-7 and should be submitted May 21, 1998.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\4\
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\4\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-11448 Filed 4-29-98; 8:45 am]
BILLING CODE 8010-01-M
