[Federal Register Volume 64, Number 151 (Friday, August 6, 1999)]
[Notices]
[Pages 43007-43009]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20301]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41669; File No. SR-NYSE-99-35]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the New York Stock Exchange,
Inc., Extending the Pilot Fee Structure Governing the Reimbursement of
Member Organizations for Costs Incurred in the Transmission of Proxy
and Other Shareholder Communication Material
July 29, 1999.
Pursuant to Section 19(b)(1) of the Securities Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 27, 1999, the New York Stock Exchange, Inc. (the ``Exchange''
or ``NYSE'') 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 Exchange. 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 Exchange proposes to extend the effectiveness of the pilot fees
(``Pilot Fee Structure'') currently set forth in Exchange Rule 4512,
``Transmission of Proxy Material,'' and Exchange Rule 465,
``Transmission of Interim Reports and Other Material,'' (collectively
the ``Rules''). The rules provide guidelines for the reimbursement of
expenses by NYSE issuers to NYSE member organizations for the
processing and delivery of proxy materials and other issuer
communications to security holders whose securities are held in street
name. The Pilot Fee Structure is presently scheduled to expire on
August 31, 1999. The Exchange proposes to extend the Pilot Fee
Structure through November 1, 1999.
The text of the proposed rule change is available at the Office of
the Secretary, the Exchange, and at 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 Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed
[[Page 43008]]
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 Exchange 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
1. Purpose
As first adopted, the Pilot Fee Structure revised the Rules to
lower certain reimbursement guidelines, create incentive fees to
eliminate duplicative mailings, and establish a supplemental fee for
intermediaries that coordinate multiple nominees.\3\ The Pilot Fee
Structure has been modified and extended several times,\4\ most
recently by Commission order dated March 16, 1999.\5\
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\3\ See Securities Exchange Act Release No. 38406 (Mar. 14,
1997), 62 FR 13922 (Mar. 24, 1997). The Commission initially
approved the Pilot Fee Structure as a one-year pilot, and designated
May 13, 1998, as the date of expiration.
\4\ See Securities Exchange Act Release Nos. 39672 (Feb. 17,
1998), 63 FR 9034 (Feb. 23, 1998) (order extending Pilot Fee
Structure through July 31, 1998, and lowering the rate of
reimbursement for mailing each set of initial proxies and annual
reports from $.55 to $.50) 40289 (July 31, 1998), 63 FR 42652 (Aug.
10, 1998) (order extending Pilot Fee Structure through October 31,
1998); 40621 (Oct. 30, 1998), 63 FR 60036 (Nov. 6, 1998) (order
extending Pilot Fee Structure through February 12, 1999); and 41044
(Feb. 11, 1999), 64 FR 8422 (Feb. 19, 1999) (order extending Pilot
Fee Structure through March 15, 1999).
\5\ See Securities Exchange Act Release No. 41177 (Mar. 16,
1999), 64 FR 14294 (Mar. 24, 1999)
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The Exchange recently submitted a proposed rule change to the
Commission (``June Filing'') to further revise the Pilot Fee Structure
and extend its effectiveness through August 31, 2001.\6\ The June
Filing proposes to reduce the basic processing fee and nominee
coordination fee that NYSE member organizations and proxy distribution
intermediaries may recover in connection with the distribution of proxy
and shareholder communication materials to shareholders. The June
Filing also proposes to define the term ``nominee'' as it relates to
the calculation of the nominee coordination fee. Because the issues
presented by the June Filing are important and likely to impact many
market participants, the Commission provided a 60 day public comment
period for the June Filing, ending August 30, 1999.
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\6\ See Securities Exchange Act Release No. 41549 (June 23,
1999), 64 FR 35229 (June 30, 1999).
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The Exchange believes that an extension of the Pilot Fee Structure
through November 1, 1999, will give the Commission additional time to
fully consider the June Filing and the public comment letters regarding
the June Filing, without a lapse in the current Rules. Absent an
extension of the Pilot Fee Structure, the fees in effect prior to the
Pilot Fee Structure (i.e., the fees in effect prior to March 14, 1997)
would return to effectiveness after August 31, 1999. The Exchange
believes that such a result could be counterproductive and cause
confusion among NYSE member organizations and issuers, especially given
that the June filing, proposing to extend the revised Pilot Fee
Structure through August 31, 2001, is still pending with the
Commission.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
section 6(b)(4) of the Act \7\ in that it provides for the equitable
allocation of reasonable dues, fees, and other charges among its
members and other persons using its facilities. The Exchange further
believes that the proposed rule change satisfies the requirements under
section 6(b)(5) \8\ that an exchange have rules that are designed to
prevent fraudulent and manipulative acts and practices; promote just
and equitable principles of trade; foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities; remove impediments to and perfect the mechanism of a free
and open market and a national market system; and, in general, protect
investors and the public interest.
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\7\ 15 U.S.C. 78f(b)(4).
\7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes 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 Statements 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 the 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
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) by its terms, does not become operative for 30 days after the date
of the filing;\9\ and the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with text
of the proposal, at least five business days prior to the filing date;
the proposed rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) \11\ thereunder.
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\9\ Although the proposed rule change seeking to extend the
Pilot Fee Structure through November 1, 1999, is considered
effective upon filing, it will not become operative until August 31,
1999, which is more than 30 days after the date of filing (July 27,
1999).
\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
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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, including whether the proposed rule
change is consistent with the Act. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW, Washington DC 20549-0609.
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 persons, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C., will be available for inspection and copying in the
Commission's Public Reference Section, 450 Fifth Street, NW,
Washington, DC 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-99-35 and should be
submitted by August 27, 1999.
[[Page 43009]]
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-20301 Filed 8-5-99; 8:45 am]
BILLING CODE 8010-01-M
