[Federal Register Volume 61, Number 91 (Thursday, May 9, 1996)]
[Notices]
[Pages 21215-21216]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11624]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37165; File No. SR-Amex-96-15]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the American Stock Exchange,
Inc. Relating to the Listing of Hybrid Securities
May 3, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on April 26, 1996, 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 and II 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 is proposing to amend Section 107A of the Amex Company
Guide to conform the Exchange's listing criteria for hybrid securities
to those of the New York Stock Exchange (``NYSE'').
The text of the proposed rule change is available at the Exchange
and the Commission.
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.
[[Page 21216]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
In March 1990, the Commission approved the adoption of Section 107
of the Amex Company Guide containing guidelines for listing securities
that have features common to both equity and debt securities, yet do
not fit within the traditional definitions of such securities.\2\
Sometimes referred to as ``hybrids,'' these securities can take a
variety of forms. For example, the Exchange has listed under Section
107 a zero coupon intermediate term note, which at maturity returns the
face amount of the note plus a percentage of the appreciation, if any,
in a well known index such as the S&P 500, or a debt security with a
relatively high fixed return, but whose value at maturity is linked to
the performance of an unrelated common stock.
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\2\ See Securities Exchange Act Release No. 27753 (Mar. 1,
1990), 55 FR 8626 (Mar. 8, 1990).
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Section 107A currently specifies the minimum issuer qualifications,
the minimum public distribution and aggregate market value of the
security and other criteria to assist the Exchange in its case by case
review and determination of the suitability of each security prior to
its approval for listing.
The Exchange now proposes to conform its listing criteria for
hybrid securities to those of the NYSE by eliminating the current
requirements of Section 107A that require a certain minimum redemption
price and only allow cash settlement of covered instruments if settled
in U.S. dollars.
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) in particular in
that it is designed to promote just and equitable principles of trade
and to protect investors and the public interest in that it conforms
the Exchange's listing standards for hybrid securities to those of the
NYSE.
B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not 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
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
Because the foregoing proposed rule change: (1) does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
(3) does not become operative for 30 days from April 26, 1996, the date
on which it was filed, and the Exchange provided the Commission with
written notice of its intent to file the proposed rule change at least
five business days prior to the filing date, it has become effective
pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(e)(6)
thereunder.\4\
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\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(e)(6).
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The Commission notes that although it is reasonable for the
Exchange to remove the affected provisions as mandatory listing
standards,\5\ proposals that deviate from these standards might raise
novel or significant regulatory issues that would require a proposed
rule change to list the product.\6\
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\5\ The affected provisions currently prevent the listing of (1)
any cash settled product settled in any currency other than U.S.
dollars or (2) any product that had a mandatory redemption price of
less than three dollars.
\6\ See Securities Exchange Act Release No. 27753 (Mar. 1,
1990), 55 FR 8626 (Mar. 8, 1990) (order approving File-No. SR-Amex-
89-29). For example, a stock index-linked note that was payable in a
foreign currency would raise important regulatory issues among which
might include the need to address appropriate product term and risk
disclosure, customer suitability, and settlement procedures.
Accordingly, the Commission expects the Amex to consult with it on
the need to file a Section 19(b) rule change to list a product with
such terms under the Rule 107A listing standards.
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
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. Sec. 552, will be available for inspection and copying at
the Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
submissions should refer to File No. SR-Amex-96-15 and should be
submitted by May 30, 1996.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-11624 Filed 5-8-96; 8:45 am]
BILLING CODE 8010-01-M
