[Federal Register Volume 61, Number 114 (Wednesday, June 12, 1996)]
[Notices]
[Pages 29782-29783]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14812]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37279; File No. SR-PHLX-96-16]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the Philadelphia Stock Exchange Relating to Listing Standards
June 5, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. Sec. 78s(b)(1), notice is hereby given that on May
20, 1996, the Philadelphia Stock Exchange, Inc. (``PHLX'' 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, pursuant to Rule 19b-4 of the Act, proposes to revise
PHLX Rule 804(2) in order to correct a drafting error, which occurred
when the rule was originally adopted.\1\ The text of the proposed rule
change is as follows [new text is italicized; deleted text is
bracketed]:
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\1\ See Securities Exchange Act Release No. 34235 (June 17,
1994), 59 FR 32736 (June 24, 1994) (File No. SR-PHLX-93-31) (order
approving proposed rule change establishing new listing and
maintenance standards).
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Alternative Criteria for Listing-Tier I
PHLX Rule 804 No change.
(1) No change.
(2) At least 1,000,000 shares publicly held with at least [800
public shareholders if the issuer has between 500,000 and 1 million
shares publicly held, or at least] 400 public shareholders [if the
issuer has either (i) over 1 million shares publicly held or (ii) over
500,000 shares publicly held and average daily trading volume in excess
of 2,000 shares per day for a six month period preceding the date of
application].
(3)-(7) No change.
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 Section 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 June 1994, the Exchange adopted new listing criteria for equity
securities under a two tier approach.\2\ Tier I securities are listed
pursuant to Rule 803 or 804. Rule 803 is the main Tier I listing rule
whereas Rule 804 sets forth alternative criteria geared toward research
and development companies. Both Rule 803 and Rule 804 are based
substantially upon the Memorandum of Understanding (``MOU'') on the
uniform model marketplace exemption that had been approved by the
National Association of Securities Dealers, Inc. (``NASD'') and the
North American Securities Administrative Association, Inc.
(``NASAA'').\3\ Rule 804 was supposed to mirror Alternative 2 of the
MOU listing criteria, however, when it was drafted, subsection (2),
which sets forth the public float and public shareholder requirements,
incorrectly incorporated some of the language of the Alternative 1
public float/shareholder requirements. To date, the Exchange has not
listed any companies pursuant to the alternative criteria in Rule 804.
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\2\ Id.
\3\See Securities Act Release No. 6810 (Dec. 6, 1988)
(publicizing the release of the MOU).
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The proposed revision would require issuers that seek listing
pursuant to Rule 804 to show that there are at least 1,000,000 shares
publicly held and at least 400 public shareholders in the security.
This rule once revised would reflect the original intent of the
Exchange and the MOU.\4\
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\4\ The MOU between NASAA and the NASD contained the same
drafting error as the drafting error described herein. The MOU
incorrectly incorporated some of the language from Tier I public
float and public shareholder requirements into the Tier II
requirements. In the MOU between NASAA and the Exchange on October
12, 1994, the same error occurred.
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[[Page 29783]]
2. Statutory Basis
The proposed rule change is consistent with Section 6 of the Act in
general, and in particular, with Section 6(b)(5), in that it is
designed to promote just and equitable principles of trade, to prevent
fraudulent and manipulative acts and practices, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, as
well as to protect investors and the public interest by adopting
minimum standards for prospective issuers which show that the company
is appropriate for public trading.
B. Self-Regulatory Organization's Statement on Burden on Competition
The PHLX does not believe that the proposed rule change will impose
any inappropriate 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 either solicited or received.
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 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 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, 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 will also be available
for inspection and copying at the principal office of the Exchange. All
submissions should refer to File No. SR-PHLX-96-16 and should be
submitted by July 3, 1996.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-14812 Filed 6-11-96; 8:45 am]
BILLING CODE 8010-01-M
