Federal Register / Vol. 65, No. 123 / Monday, June 26, 2000 / Notices 39459

8 17 CFR 200.30–3(a)(12).

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

2 17i CFR 240.19b–4.

3 In Amendment No. 1, the NYSE made technical

changes to the proposed rule text. See letter from

Daniel P. Odell, Assistant Secretary, NYSE, to

Nancy dSanow, Senior Special Counsel, Division of

Market Regulation, SEC, dated May 1, 2000

(‘‘Amendment No. 1’’).

4When the Exchange amended Section 802.01C

of the Manual in SR–NYSE–00–12, the Exchange

did not amend NYSE Rule 499 to reflect the

Continued

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing,

including whether the proposed rule 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 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 NASD. All

submissions should refer to the File No.

SR–NASD–00–20 and should be

submitted by July 17, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–16063 Filed 6–23–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42954; File No. SR–NYSE–

100–8]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of Proposed rule

Change and Amendment No. 1 Thereto

by the New York Stock Exchange, Inc.

Relating to the Exchange’s PrideBased Continued Listing Standards

June 19, 2000.

Pursuant to Section 19(b)(12) of the

Securities Exchange Act 1 of 1934

(‘‘Act’’), and Rule 19b–4 thereunder,2

notice is hereby given that on February

22, 2000, the New York Stock Exchange,

Inc. (‘‘NYSE’’ or ‘‘Exchange’’) filed with

the Securities and Exchange

Commission (‘‘SEC’’ or ‘‘Commission’’)

the proposed; rule change as described

in Items I, and II below, which Items

have been prepared by the Exchange.

On May 3, 2000, the Exchange

submitted Amendment No. 1 to the

proposed rule change.3 The Commission

is publishing this notice to solicit

comments on the proposed rule change,

as amended, from interested persons

and to grant accelerated approval to the

proposed rule change and Amendment

No. 1.

1. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change consists of

an amendment to Section 802.01C of the

Listed Company Manual (‘‘Manual’’) of

the Exchange and corresponding

changes to NYSE Rule 499. The text of

the proposed rule change, as amended,

is as follows. New text is italicized.

NYSE Listed Company Manual

Section 8

Suspension and Delisting

801.00 Policy

* * * * *

802.00 Continued Listing

802.01 Continued Listing Criteria

* * * * *

802.01C. Price Criteria

Average closing price of a security is

less than $1.00 over a consecutive 30-

trading-day period (D).

(D) Once notified, the company must

bring its average share price back above

$1.00 by the later of its subsequent

annual meeting date or six months

following receipt of the notification. If

this is the only criteria that makes the

company below the Exchange’s

continued listing standards, the

procedures outlined in Paras. 802.20

and 802.03 do not apply. The company

must, however, notify the Exchange,

within 10 business days of receipt of the

notification, of its intent to cure this

deficiency or be subject to suspension

and delisting procedures. In the event

that at the expiration of the cure period,

a $1.00 average share price over the

preceding 30 trading days is not

attained, the Exchange will commence

suspension and delisting procedures.

Notwithstanding the foregoing, if the

subject security is not the primary

trading common stock of the company

(e.g., a tracking stock or a preferred

class) or is a stock listed under the

Affiliated Company standard where the

parent remains in ‘‘control’’ as that term

is used in that standard, the Exchange

may determine whether to apply the

Price Criteria to such security after

evaluating the financial status of the

company and/or the parent/affiliated

company, as the case may be.

* * * * *

NYSE Rules

Delisting of Securities

Suspension From Dealings or Removal

From List by Action of the Exchange

The aim of the New York Stock

Exchange is to provide the foremost

auction market for securities of wellestablished companies in which there is

a broad public interest and ownership.

Rule 499.

* * * * *

.20 NUMERICAL AND OTHER

CRITERIA—WHEN A COMPANY

FALLS BELOW ANY OF THESE

CRITERIA, THE EXCHANGE MAY GIVE

CONSIDERATION TO ANY

DEFINITIVE ACTION THAT A

COMPANY WOULD PROPOSE TO

TAKE THAT WOULD BRING IT ABOVE

CONTINUED LISTING STANDARDS.

* * * * *

9. Average closing price of a security

is less than $1.00 over a consecutive 30

trading-day period. Once notified, the

company must bring its average share

price back above $1.00 by the later of its

subsequent annual meeting date or six

months following receipt of the

notification. If this is the only criteria

that makes the company below the

Exchange’s continued listing standards,

the procedures outlined in Paras. .50

and .60 of this Rule 499 do not apply.

The company must, however notify the

Exchange, within 10 business days of

receipt of the notification, of its intent

to cure this deficiency. In the event that

at the expiration of the cure period, a

$1.00 average share price over the

preceding 30 trading days is not

attained, the Exchange will commence

suspension and delisting procedures.

Notwithstanding the foregoing, if the

subject security is not the primary

trading common stock of the company

(e.g., a tracking stock or a preferred

class) or is a stock listed under the

Affiliated Company standard where the

parent remains in ‘‘control’’ as that term

is used in that standard, the Exchange

may determine whether to apply the

Price Criteria to such security after

evaluating the financial status of the

company and/or the parent/affiliated

company, as the case may be.1

39460 Federal Register / Vol. 65, No. 123 / Monday, June 26, 2000 / Notices

corresponding changes. Accordingly, the Exchange

proposes to do so now. See Securities Exchange Act

Release No. 42671 (April 12, 2000), 65 FR 21227

(April 20, 2000).

5See Securities Exchange Act Release No. 42194

(December 1, 1999), 64 FR 69311 (December 10,

1999).

6For example, a company with a Class A

common stock trading at $30 and several tracking

stocks, one of which is below $1, would take the

position that it is inappropriate to apply the pricebased standard to this tracking stock because the

low price of that stock is not indicative of the

overall financial health and valuation of the

company. In addition, the Exchange believes that

delisting only the one low-priced security would

result in the company’s equity securities being

traded in multiple markets, a situation undesirable

to most issuers. 7 15 U.S.C. 78f(b)(5).

8 15 U.S.C. 78f(b)(5).

9 In approving this rule, the Commission has

considered its impact on efficiency, competition,

and capital formation. 15 U.S.C. 78c(f).

10 15 U.S.C. 78f(b)(5) and 78s(b)(2).

11 15 U.S.C. 78s(b)(2).

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

any comments it received on the

proposed rule change. The text of these

statements may be examined at the

places specified in Item III 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

The Exchange recently adopted and

revised a series of standards and

procedures regarding the continued

listing of securities for both domestic

and non-U.S. issuers.5 One of the new

standards is a price-based criterion of $1

over the span of 30 consecutive days.

Once a company triggers this standard,

it must re-establish its trading price

above $1 within the later of its next

annual meeting date or six months of

notification. The Exchange represents

that since the implementation of this

new standard, several issuers (both

listed and prospective) have questioned

whether the standard is applicable to

classes of securities other than the

company’s primary trading vehicle.6

Therefore, the Exchange proposes to

modify the price-based criteria so that

the Exchange will have the discretion to

determine whether the $1 standard is

applicable to all of an issuer’s listed

classes of securities. In making such a

determination, the Exchange would

evaluate the overall financial status of a

company, including the price of the

primary trading common stock and its

other listed securities.

2. Statutory Basis

The Exchange represents that the

proposed rule change is consistent with

the requirement under Section 6(b)(5)7

of the Act that an Exchange have rules

that are designed to promote just and

equitable principles of trade, to remove

impediments to, and perfect the

mechanism of a free and open market

and, in general, to protect investors and

the public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchanges does not believe that

the proposed rule change will 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. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning the foregoing,

including whether the proposed rule

change, as amended, is consistent with

the Act. 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–

0609. 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. 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 NYSE. All

submissions should refer to File No.

SR–NYSE–00–08 and should be

submitted by July 17, 2000.

IV. Commission’s Findings and Order

Granting Approval of Proposed Rule

Change

The Commission finds that the

proposed rule change, as amended, is

consistent with the requirements of the

Act and the rules and regulations

thereunder applicable to a national

securities exchange, and in particular,

with the requirements of Section

6(b)(5),8 because the proposed rule is

designed to promote just and equitable

principles of trade, to remove

impediments to, and perfect the

mechanism of a free and open market

and, in general, to protect investors and

the public interest.9

Specifically, the Commission believes

that the proposed rule change to the

Exchange’s price-based standard will

allow for a more appropriate application

of the criteria to classes of stock other

than a company’s primary trading stock

by allowing the Exchange to evaluate

the overall financial status of a company

before determining whether the $1

standard should apply. The Commission

further believes that the proposed rule

change, as amended, is consistent with

the Exchange’s obligation to remove

impediments to and perfect the

mechanism of a free and open market.

The Commission believes that the

proposed rule will increase the

Exchange’s ability to retain listings that

would otherwise not qualify under its

current price-based criteria.

The NYSE has requested that the

Commission find good cause for

approving the proposed rule change, as

amended, prior to the thirtieth day after

the date of publication of notice in the

Federal Register. The NYSE contends

that accelerated approval would enable

the Exchange to uniformly implement

the amendments to all affected listed

companies and not disadvantage those

possibly subject to the rule during the

full commentary period. The

Commission believes that it is

reasonable to grant accelerated approval

to allow the Exchange to uniformly

implement the amendments to all

affected listed companies at the same

time, thereby eliminating any confusion

or the possibility of inconsistent

application of the new rule.

Accordingly, the Commission finds

good cause, consistent with Sections

6(b)(5) and 19(b)(2) of the Act,10 to

approve the proposed rule change, as

amended, on an accelerated basis.

It Is Therefore Ordered, pursuant to

Section 19(b)(2) of the Act,11 that the

proposed rule change (SR–NYSE–00–

08), as amended, is hereby approved on

an accelerated basis.

Federal Register / Vol. 65, No. 123 / Monday, June 26, 2000 / Notices 39461

12 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).

4Securities Exchange Act Release No. 42360 (Jan.

28, 2000), 65 FR 5003 (Feb. 2, 2000).

5Securities Exchange Act Release No. 42685

(Apr. 13, 2000), 65 FR 21046 (Apr. 19, 2000).

6Securities Exchange Act Release No. 42914

(June 8, 2000), 65 FR 38010 (June 19, 2000).

7 15 U.S.C. 78f(b).

8 15 U.S.C. 78f(b)(5).

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.12

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–16026 Filed 6–23–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42960; File No. SR–NYSE–

00–26]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the New

York Stock Exchange, Inc., Creating

New Rule 438 Mandating Decimal

Pricing Testing and Rescinding Rule

437 Relating to Year 2000 Testing

June 20, 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 June 14,

2000, the New York Stock Exchange,

Inc. (‘‘NYSE’’ 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 NYSE. The

NYSE has designated this proposal as

one concerned solely with the

administration of the NYSE 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 proposal consists of the adoption

of new NYSE Rule 438 (‘‘Participation

in Decimal Conversion Testing’’) and

the rescission of NYSE Rule 437

(‘‘Participation in Year 2000 Testing’’).

The text of the proposed rule change is

available upon request from the NYSE

or 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

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

On January 28, 2000, the Commission

issued an order (‘‘January 28 Order’’) 4

requiring the NYSE, the other national

securities exchanges, and the National

Association of Securities Dealers, Inc.

(the ‘‘Participants’’) to take certain steps

necessary to facilitate a safe and orderly

transition to decimal pricing in the

United States securities markets. The

initial phase-in date of this process was

originally scheduled for July 3, 2000.

In order to prepare for the

implementation of decimal pricing

industry-wide, the Commission’s

January 28 Order required, among other

things, that the Participants jointly

submit a ‘‘Decimals Implementation

Plan’’ by April 14, 2000. The

Commission additionally required each

Participant to submit by April 28, 2000,

such proposed rule changes as would be

necessary to administer the Decimals

Implementation Plan.

On April 13, 2000, the Commission

suspended by order 5 the deadlines

prescribed by the January 28 Order and

solicited public comment on the

feasibility of several alternatives for

implementing decimal trading

(including the possibility of trading

exchange-listed securities in penny or

nickel increments by September 4,

2000). On June 8, 2000, the Commission

subsequently issued an order 6 directing

the securities markets to begin phasing

in decimal pricing no later than

September 5, 2000.

In order to assist and coordinate the

efforts of the NYSE’s membership to

ensure a smooth transition to

decimalization, new NYSE Rule 438

authorizes the Exchange to require

members and member organizations, in

a manner and frequency to be

prescribed by the Exchange, to

participate in decimal pricing testing.

The Exchange is prepared to adjust its

testing and implementation dates in

accordance with Commission directives.

NYSE Rule 438.10 provides the

Exchange authority to exempt either

individual or categories of members and

member organizations from some or all

of the testing requirements. Further,

NYSE rule 438.20 requires members and

member organizations to maintain

adequate documentation of such tests as

may be required, including results of

those tests, which must be made

available to the Exchange for

examination. NYSE rule 438.30

provides that the rule shall expire

automatically upon the full

implementation of decimal pricing.

In addition to creating the foregoing

new rule, the Exchange proposes to

delete NYSE Rule 437, authorizing the

Exchange to require the membership’s

participation in testing related to

potential computer problems associated

with the year 2000 date change. Further

testing in this regard is no longer

necessary.

2. Statutory Basis

The NYSE believes proposed NYSE

Rule 438, which is designed to

authorize the Exchange to require its

members and member organizations, in

a manner and frequency prescribed by

the Exchange, to participate in testing of

computer systems in preparation for the

implementation of decimal pricing, is

consistent with Section 6(b) of the Act 7

in general and furthers the objectives of

Section 6(b)(5) 8 in particular in that it

is designed to promote just and

equitable principles of trade, to remove

impediments to and to 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 does not believe that

the proposed rule change will 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.