[Federal Register Volume 60, Number 102 (Friday, May 26, 1995)]
[Notices]
[Pages 27996-27997]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-12925]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35740 ; File No. SR-PSE-95-14]
Self-Regulatory Organizations; The Pacific Stock Exchange,
Incorporated; Notice of Filing of Proposed Rule Change Regarding
Depository Eligibility Requirements
May 19, 1995.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on May 15, 1995, The Pacific
Stock Exchange, Incorporated (``PSE'') 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 PSE. The Commission is publishing this notice to solicit
comments from interested persons.
\1\15 U.S.C. Sec. 78s(b)(1) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
PSE proposes to adopt a rule which will set forth depository
eligibility requirements for issuers that apply to list their
securities on PSE.
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.\2\
\2\The Commission has modified the language in these sections.
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Self-Regultory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
Under the proposed rule change, PSE will adopt a uniform depository
eligibility rule for issuers that desire to list their securities on
PSE. 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 PSE'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 Releases 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 rule change will require domestic issuers to represent
to PSE before issues of securities are listed that the CUSIP numbers
identifying the securities have 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. In addition, the rule will not apply to
American Depository Receipts for securities of a foreign issuer.
\4\15 U.S.C. Sec. 78q-1 (1988).
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The proposed rule change sets forth additional requirements that
must be met before a security will be deemed to be ``depository
eligible'' within the meaning of PSE Rule 5.9(c)(4). The proposed rule
specifies different requirements for depository eligibility 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 tracking system'').
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 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 tracking system, a new issue will be deemed to be depository
eligible upon commencement of trading on PSE.
The proposed rule change is consistent with Section 6(b)(5) of the
Act\5\ in that it is designed to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities and to remove impediments to and perfect the mechanism of a
free and open market and a national market system.
\5\15 U.S.C. Sec. 78f(b)(5) (1988).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
PSE does not believe that the proposed rule change will 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
Written comments on the proposed rule change were neither solicited
nor received.
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 PSE 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.
PSE has requested accelerated effectiveness of the proposed rule
change in order that the rule can become effective on June 7, 1995.\6\
\6\Supra note 3 and accompanying text. [[Page 27997]]
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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. Sec. 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 PSE. All submissions
should refer to file number SR-PSE-95-14 and should be submitted by
June 15, 1995.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\7\
\7\17 CFR 200.30-3(a)(12) (1994).
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Jonathan G. Katz,
Secretary.
[FR Doc. 95-12925 Filed 5-25-95; 8:45 am]
BILLING CODE 8010-01-M
