38616 Federal Register / Vol. 65, No. 120 / Wednesday, June 21, 2000 / Notices

8 17 CFR 200.30–3(a)(12).

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

3See Letter to Michael Walinskas, Deputy

Associate Director, Division of Market Regulation

(‘‘Division’’), Commission, from Michael J. Ryan,

Chief of Staff, Amex, dated September 24, 1999

(‘‘Amendment No. 1’’). In Amendment No. 1, Amex

proposes to amend Exchange Rule 18 instead of

rescinding the rule in its entirety, as proposed in

its initial filing, to provide that an issuer may

voluntarily withdraw a security from listing on the

Exchange upon written notice to the Exchange.

4See Letter to Marla Chidsey, Attorney, Division,

Commission, from Ivonne Lugo, Associate General

Counsel, Amex, dated February 2, 2000

(‘‘Amendment No. 2’’). In Amendment No. 2, Amex

proposes to require the issuer to comply with all

applicable state laws in effect in the state in which

it is incorporated prior to filing to delist from the

Amex. Amendment No. 2 also proposes to make

conforming amendments to the Amex Company

Guide Sections 1010 and 1011.

5Securities Exchange Act Release No. 42427

(February 15, 2000), 65 FR 9024.

6See 15 U.S.C. 781(d) and 17 CFR 240.12d2–2

describing how an issuer may delist from a national

securities exchange.

7The rule further states that the requirement of

written notice that must be met before an

application for delisting can be filed with the

Commission.

8 15 U.S.C. 78f.

9 In approving this rule, the Commission has

considered the proposed rule’s impact on

efficiency, competition, and capital formation. 15

U.S.C. 78c(f).

10 15 U.S.C. 78f(b)(5).

11See Market 2000 Report: An Examination of

Current Equity Market Developments, Division,

Commission, January, 1994, at 30.

12 Id. at 31.

13Securities Exchange Act Release No. 41634, 64

FR 40633 (July 27, 1999).

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. 552, will be

available for inspection and copying in

the Commission’s Public Reference

Room. Copies of such filing will also be

available for inspection and copying at

the principal office of the Amex. All

submissions should refer to File No.

SR–AMEX–99–45 and should be

submitted by July 12, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Jonathan G. Katz,

Deputy Secretary.

[FR Doc. 00–15617 Filed 6–20–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42928; File No. SR–Amex–

99–30]

Self-Regulatory Organizations;

American Stock Exchange LLC; Order

Approving Proposed Rule Change and

Amendments Nos. 1 and 2 Thereto

Amending Exchange Rule 18;

Withdrawal From Listing

June 13, 2000.

I. Introduction

On August 13, 1999, the American

Stock Exchange LLC (‘‘Amex’’ or

‘‘Exchange’’) submitted to the Securities

and Exchange Commission (‘‘SEC’’ or

‘‘Commission’’) pursuant to section

19(b)(1) of the Securities Exchange Act

of 1934 (‘‘Act’’),1 and Rule 19b–4

thereunder,2 a proposed rule change to

rescind Exchange Rule 18. On

September 28, 1999, the Amex

submitted Amendment No. 1 to the

proposed rule change.3 On February 3,

2000, the Amex submitted Amendment

No. 2 to the proposed rule change.4 The

proposed rule change, as amended by

Amendments Nos. 1 and 2, was

published for comment in the Federal

Register on February 23, 2000.5 The

Commission did not receive any

comment letters with respect to the

proposal. This order approves the

Exchange’s proposal, as amended.

II. Description of the Proposal

Amex Rule 18 currently requires an

issuer, prior to withdrawing a security

from listing on the Exchange, to file

with the Exchange a certified copy of a

resolution adopted by the board of

directors authorizing withdrawal from

listing and registration and explaining

the reasons for such withdrawal. The

Amex rule also provides that the

Exchange may require the issuer to send

to all registered holders of such security

a statement of the reasons for such

application, together with facts in

support thereof within at least fifteen

days prior to the filing of a delisting

application with the Commission.6

These Exchange Rule 18 requirements

must be met before an application for

delisting can be filed with the

Commission.

According to the Amex, Exchange

Rule 18 has not been applied in many

years with respect to issuers seeking to

voluntarily withdraw their securities

from the listing on the Exchange. The

Exchange believes Amex Rule 18

represents a needless restriction

imposing burdensome delays on an

issuer’s decision to delist. The Amex

stated that the proposed amendment to

Exchange Rule 18 will implement its

decision to eliminate obstacles and

delays for issuers seeking to voluntarily

withdraw their common stock from

listing on the Exchange. Under the

proposed amendments to Amex Rule 18,

an issuer will be able to voluntarily

withdraw a security from listing on the

Exchange upon written notice to the

Exchange, provided the issuer complies

with all applicable state laws in effect

in the state in which it is incorporated.7

III. Discussion

The Commission finds that the

proposed rule change, as amended, is

consistent with the requirements of

Section 6 of the Act 8 and the rules and

regulations thereunder applicable to a

national securities exchange.9 In

particular, the Commission finds the

proposed rule change is consistent with

Section 6(b)(5) of the Act 10 and which

requires, among other things, that the

rules of an exchange be designed to

prevent fraudulent and manipulative

acts and practices, to promote

impediments to and perfect the

mechanism of a free and open market,

and to protect investors and the public

interest.

Over the last several years,

Commission staff has express concerns

regarding the potentially anticompetitive effects of certain rules

adopted by self-regulatory organizations

(‘‘SROs’’), such as Amex Rule 18.11 The

Commission encouraged the Amex to

revise the standards a company must

comply with prior to voluntarily

delisting its securities from the Amex.12

The Commission believes that the

exchanges should provide a listed

company with a reasonable opportunity

to move to another market if it so

desires, thereby increasing competition

among the markets. For example, on

July 21, 1999, the Commission approved

a proposed rule change to revise New

York Stock Exchange’s (‘‘NYSE’’) Rule

500 to simplify the procedures a NYSElisted company must follow to

voluntarily delist its securities from the

NYSE.13 The Commission believes that

the proposed amendments to Amex

Rule 18 should similarly eliminate

obstacles and delays for issuers seeking

to delist their securities voluntarily from

the Amex.

Furthermore, the voluntary delisting

procedures proposed by the Amex in

the amended proposal represent a

significant and positive change over the

current delisting process and

requirements in the Amex’s rules.

Specifically, the Commission believes

that the proposed requirement that a

listed company simply submit written

Federal Register / Vol. 65, No. 120 / Wednesday, June 21, 2000 / Notices 38617

14As discussed above, the revision of Amex Rule

18 eliminates requirements for Amex issuers that

were imposed by Amex Rule 18. Issuers wanting to

voluntarily delist would still be required to comply

with Section 12 of the Act, which provides notice

and an opportunity for public comment. See supra

note 6.

15 15 U.S.C. 78f(b)(5).

16 15 U.S.C. 78s(b)(2).

17 17 CFR 200.30–3(a)(12).

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii).

4A member that has its electronic interface with

the Exchange through a service provider may be

exempted from this requirement if such service

provider conducts successful tests with the

Exchange on behalf of the firms its services, if the

member conducts successful point-to-point testing

with the service provider by a time to be designated

by the Exchange, and if the Exchange agrees that no

further testing is necessary.

notice to the Amex that it wants to

delist provided that it has followed all

applicable state laws in effect in the

state in which it is incorporated should

ensure compliance with investor

protections codified in relevant state

statutes while still significantly

streamlining the delisting process on the

Amex.14 As a result, because the

proposed amendments to Amex Rule 18

ease the existing restrictions on Amexlisted companies that wish to

voluntarily delist their securities from

the Exchange while continuing to

ensure compliance with applicable state

laws, the Commission believes that the

Amex’s proposed revisions to Amex

Rule 18, as amended, are consistent

with the requirements of Section 6(b)(5)

of the Act 15 that requires the rules of

the Exchange to further the protection of

investors and public interest.

IV. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,16 that the

proposed rule change (SR–Amex–99–

30), including amendments Nos. 1 and

2, is approved.

By the Commission, for the Division of

Market Regulation, pursuant to delegated

authority.17

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–15619 Filed 6–20–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42943; File No. SR–CBOE–

00–20]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Chicago Board Options Exchange,

Incorporated, Amending Its Rules to

Mandate Decimal Pricing Testing

June 14, 2000.

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 May 24,

2000, the Chicago Board Options

Exchange, Incorporated (‘‘CBOE’’ 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 CBOE. The CBOE has

designated this proposal as one

concerned solely with the

administration of the CBOE under

Section 19(b)(3)(A)(iii) of the Act,3

which renders the proposal effective

upon filing with the Commission. 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 CBOE proposed to amend its

rules to mandate that member firms test

computer systems in order to ensure

preparedness for the industry’s

conversion to decimal pricing.

The text of the proposed rule change

is available upon request from the CBOE

or the Commission.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filling with the Commission, the

Exchange included statements

concerning the purpose of and basis for

the proposed rule change and discussed

any comments it received regarding 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 the securities industry prepares for

the conversion to decimal pricing, it

will be necessary for various

constituents of the securities industry to

test their computer systems in order to

avoid widespread problems. The CBOE,

in cooperation with the Commission

and other self-regulatory organizations,

has been working toward a successful

transition to decimal pricing. The

purpose of the proposed rule change is

to require CBOE member firms to

participate in tests of computer systems

designed to prepare for the industry’s

conversion to decimal pricing.

The proposed rule change would

create new CBOE Rule 15.12 to require

CBOE members to participate in the

testing of computer systems in a manner

and frequency to be prescribed by the

Exchange. It is the CBOE’s

understanding that other self-regulatory

organizations, including the National

Association of Securities Dealers, Inc.,

the New York Stock Exchange, Inc., and

the American Stock Exchange LLC, are

also proposing rule changes to require

testing by their members in connection

with the industry’s conversion to

decimal pricing.

The Securities Industry Association

has undertaken to coordinate industrywide computer testing to ensure that the

securities industry is adequately

prepared to convert to decimal pricing.

Industry constituents to participate in

the testing will include, among others,

national securities exchanges, registered

clearing corporations, data processors,

and broker-dealers. Several industrywide tests have been planned, the first

of which took place in April 2000.

The CBOE will employ its new Rule

15.12 to require that its members

participate in these tests. CBOE Rule

15.12 further provides that any firm

having an electronic interface with the

Exchange would be required to conduct

point-to-point testing with the

Exchange. Point-to-point testing refers

to tests conducted between two entities,

in this case a member having an

electronic interface and the Exchange.4

Under the proposal, the Exchange

would require member firms to

participate in industry-wide testing to

the extent such firms can be

accommodated by the testing schedule.

The Exchange would exercise its

authority under CBOE Rule 15.12 to the

extent it deems that the participation of

particular members in the testing is

important, and to the extent those

members would otherwise not

voluntarily choose to participate.

The proposed rule change would also

allow the CBOE to require members to

file reports with the CBOE concerning

the required tests in the manner and

frequency determined by the Exchange.

A member subject to CBOE Rule 15.12

who failed to participate in the

manadatory tests or who failed to file

any required reports, would be subject

to disciplinary action pursuant to

Chapter XVII of the Exchange’s rules.

The Exchange believes that it

currently has the authority, without the