[Federal Register Volume 60, Number 100 (Wednesday, May 24, 1995)]
[Notices]
[Pages 27571-27572]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-12691]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35734; File No. SR-Amex-95-17]
Self-Regulatory Organizations; American Stock Exchange, Inc.;
Notice of Filing of Proposed Rule Change Regarding Depository
Eligibility Requirements
May 18, 1995.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), \1\ notice is hereby given that on May 16, 1995, the
American Stock Exchange, Inc. (``Amex'') 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
primarily by Amex. The Commission is publishing this notice to solicit
comments from interested persons.
\1\ 15 U.S.C. 78s(b)(1) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Amex proposes to adopt a rule which will set forth depository
eligibility requirements for issuers that apply to list their
securities on Amex.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, Amex 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.\2\
\2\ The Commission has modified the language in these sections.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
Under the proposed rule change, Amex will adopt a uniform
depository eligibility rule for issuers that desire to list their
securities on Amex. The uniform rule has been developed by the Legal
and Regulatory Subgroup of the U.S. working Committee of the Group of
Thirty in coordination with each of the national securities exchanges
and the National Association of Securities Dealers (``NASD''). It is
anticipated that each national securities exchange and the NASD will
file rule changes proposing adoption of depository eligibility
standards substantially similar to Amex's proposed rule and will seek
to make such changes effective contemporaneously with the effective
date of the transition from a five-day (``T+5'') to a three-day
(``T+3'') settlement cycle. The transition is set to occur June 7,
1995.\3\
\3\ Securities Exchange Act Release Nos. 33023 (October 6,
1993), 58 FR 52891 (adoption of Rule 15c6-1) and 34952 (November 9,
1994), 59 FR 59137 (change of effective date of Rule 15c6-1 from
June 1, 1995 to June 7, 1995).
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The proposed model depository eligibility rule is intended to
encourage issuers and underwriters to take the simple steps necessary
to make the issuers' securities depository eligible although it is
carefully structured so that it will not preclude from listing
idiosyncratic securities which cannot be made to meet all depositories'
requirements. The proposed rule will require that before any issue of
securities of a domestic issuer (excluding American Depository Receipts
for securities of a foreign issuer) is listed on Amex, Amex must have
received a representation from the issuer that a CUSIP number
identifying the securities has been included in the file of eligible
issues maintained by a securities depository registered as a clearing
agency under Section 17A of the Act.\4\ This requirement will not apply
to a security if the terms of such security cannot be reasonably
modified to meet the criteria for depository eligibility at all
securities depositories.
\4\ 15 U.S.C. 78q-1 (1988).
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The need of syndicate managers to monitor ``flipping'' also has
been recognized. As a result, the proposed rule change sets forth
additional requirements that must be met before a security will be
deemed to be ``depository eligible,'' as such term is used in Part IV,
Section 3, Rule 776 of the Amex rules (``book-entry settlement of
transactions rule'').\5\ The proposed rule specifies different
requirements for depository eligiblilty depending upon whether a new
issue is distributed by an underwriting syndicate before or after the
date a securities depository system is available for monitoring
repurchases of the distributed shares by syndicate members (``flipping
tracing system'').
\5\ Pursuant to Amex's book-entry settlement of transactions
rule, trades by a member in depository eligible securities generally
must be settled by book-entry through a securities depository.
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Currently, a flipping tracking system is being developed that will
include a securities depository service that (i) can be activated upon
the request of the managing underwriter for a period of time that the
managing underwriter specifies, (ii) in certain circumstances, will
require the delivering participant to provide to the depository
information sufficient to identify the seller of such shares as a
precondition to the processing of book-entry delivery instructions for
distributed shares, and (iii) will report to the managing underwriter
the identity of any other syndicate member or selling group member
whose customer(s) sold distributed shares (but will not report to the
managing underwriter the identity of such customer[s]) and, in certain
circumstances, will report to such syndicate member or selling group
member the identity of such customer(s). Prior to the availability of
[[Page 27572]] a flipping tracking system, the managing underwriter may
delay the date a security is deemed ``depository eligible'' for up to
three months after trading has commenced in the security. After the
availability of a flipping tracing system, a new issue will be deemed
to be depository eligible upon commencement of trading on Amex.
The proposed rule change is consistent with Section 6(b)(5) of the
Act \6\ in that it is designed 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. That proposed
rule change is designed to improve clearing and settlement practices in
the industry while reducing risk to investors.
\6\ 15 U.S.C. 78f(b)(5) (1988).
(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 thirty-five 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 ninety 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 Amex 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.
Amex has requested accelerated effectiveness of the proposed rule
change in order that the rule can become effective on June 7, 1995.\7\
\7\ Supra note 3 and accompanying text.
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. Persons making written submission
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 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. 552, will be available for inspection and copying in the
Commission's Public Reference Section, 450 5th Street, NW., Washington,
DC 20549. Copies of such filings will also be available for inspection
and copying at the principal office of Amex. All submissions should
refer to file number SR-Amex-95-17 and should be submitted by June 14,
1995.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\8\
\8\ 17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-12691 Filed 5-23-95; 8:45 am]
BILLING CODE 8010-01-M
