[Federal Register Volume 61, Number 167 (Tuesday, August 27, 1996)]
[Notices]
[Pages 44116-44117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21758]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37585; File No. SR-NYSE-96-25]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by New York Stock Exchange, Inc., Relating to the Listing
Criteria for Equity-Linked Debt Securities
August 20, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on August 16, 1996, the New York Stock Exchange, Inc. filed with the
Securities and Exchange 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).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The New York Stock Exchange, Inc. (``NYSE'' or ``Exchange'') is
proposing amendments to its listing standards for Equity-Linked Debt
Securities (``ELDS''). These listing standards are contained in Para.
703.21 of its Listed Company Manual.
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
(a) Purpose--ELDS are non-convertible debt securities of an issuer
where the value of the debt is based, at least in part, on the value of
another issuer's common stock or nonconvertible preferred stock (the
``underlying security''). The Exchange's listing standards currently
permit the listing of ELDS if, among other things, (i) the issuer has a
minimum tangible net worth of $150 million and (ii) the original issue
price of the ELDS, combined with all the issuer's other publicly-traded
ELDS, does not exceed 25 percent of the issuer's net worth (the ``net
worth standard'').
The proposed rule change makes two amendments to the ELDS listing
standards. First, the Exchange proposes to add an alternative net worth
standard. Under the new test, a issuer with tangible net worth of at
least $250 million would be able to issue ELDS without being subject to
the limit that the ELDS be no more than 25 percent of the issuer's net
worth. Issuers with a tangible net worth of at least $150 million, but
less than $250 million, will still be subject to the 25 percent limit.
This will provide the largest issuers with increased flexibility in
their financing and capitalization planning.
Second, with respect to the listing of ELDS linked to non-U.S.
securities, the Exchange proposes to amend the definition of ``Relative
U.S. Share Volume'' and to delete the definition of ``Relative ADR
Volume.'' Specifically, the Exchange proposes collapsing these two
definitions into a single definition of ``Relative U.S. Volume.'' The
Exchange believes that this change is non-substantive and is proposed
solely to clarify and simplify the rule.
(b) Basis--The basis under the Act for the proposed rule change is
the requirement under Section 6(b)(5) that an exchange have rules that
are designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, 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, and, in general, to protect investors and the public interest.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that 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 not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.
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. 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
[[Page 44117]]
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 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-NYSE-96-25 and
should be submitted by September 17, 1996.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\3\
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\3\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-21758 Filed 8-26-96; 8:45 am]
BILLING CODE 8010-01-M
