[Federal Register Volume 65, Number 111 (Thursday, June 8, 2000)]
[Notices]
[Pages 36488-36489]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-14448]



[[Page 36488]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42863; File No. SR-NYSE-99-30]


Self-Regulatory Organizations; New York Stock Exchange Inc., 
Order Approving Proposed Rule Change and Amendment Nos. 1, 2, and 3 
Relating to NYSE's Procedures for Delisting a Security and Related 
Issuer Appeals

May 30, 2000.

I. Introduction

    On June 23, 1999, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``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 amend its procedures for delisting a security 
and the accompanying appeals process available to the issuer. The 
Exchange submitted Amendment No. 1 to its proposal on December 27, 
1999,\3\ Amendment No. 2 on March 9, 2000,\4\ and Amendment No. 3 on 
March 26, 2000.\5\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from James E. Buck, Senior Vice President and 
Secretary, NYSE, to Richard Strasser, Assistant Director, Division 
of Market Regulation (``Division''), Commission, dated December 21, 
1999 (``Amendment No. 1'').
    \4\ See letter from James E. Buck, Senior Vice President and 
Secretary, NYSE, to Richard Strasser, Assistant Director, Division, 
Commission, dated March 7, 2000 (``Amendment No. 2'').
    \5\ See letter from James E. Buck, Senior Vice President and 
Secretary, NYSE, to Belinda Blaine, Associate Director, Division, 
Commission, dated March 23, 2000 (``Amendment No. 3'').
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    The proposed rule change, as amended, was published for comment in 
the Federal Register on April 20, 2000.\6\ No comments were received on 
the proposal. This order approves the proposal, as amended.
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    \6\ Securities Exchange Act Release No. 42689 (April 13, 2000), 
65 FR 21230.
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II. Description of the Proposal

    The Exchange is proposing to modify the Exchange's procedures for 
delisting a security and related issuer appeals. The Exchange proposes 
to amend its process by changing the composition of the Committee for 
Review of the Exchange's Board of Directors, which hears delisting 
appeals by issuers, to consist of its Public Directors and one of its 
Industry Directors and by allowing the Committee to meet by telephone 
without seeking the permission of the Chairman of the Board.
    The Exchange also proposes to issue a press release disclosing the 
status of a company that the Exchange has determined should be removed 
from the list, along with the rationale for that determination. In 
addition, the Exchange is proposing to append an identifier suffix to 
the ticker symbols of securities that have been determined by Exchange 
staff to warrant suspension and delisting. The Exchange would also 
append an identifier suffix during a transition by a listing company 
that falls below the continued listing criteria to another market.
    Finally, in a change that the Exchange believes will address both 
timing and the anomaly of hearing an issuer's listing appeal after the 
suspension in trading, the appeal would also generally stay the 
suspension of trading. Reviews would be conducted on the next monthly 
review day, which is at least 25 business days from the date the 
issuer's request for review is filed with the Exchange.
    Specifically, with regard to the changes to the appeal process and 
the implementation of a press release requirement, the Exchange 
proposes to amend its Listed Company Manual (``Manual'') and NYSE Rule 
499 as follows:
    1. Implement a press release process triggered by a staff decision 
to suspend and delist security;
    2. Clarify that a request for appeal would stay the suspension 
unless the staff determines that a stay is contrary to the interest of 
the public and investors;
    3. Specify that issuers can request to appear before the Committee 
for Review and that the Committee may grant or deny such request, 
provided that an explicit rationale for a denial is provided;
    4. Shorten the time periods relating to the appeal process such 
that (a) the issuer must notify the Exchange of its intent to appeal 
within ten business days of receiving notice that the Exchange staff 
has determined that its security should be delisted and (b) written 
submissions must be served within seventeen business days from the date 
the issuer received notice of its right to a review; and
    5. Clarify that counterparty service is the responsibility of each 
party (not the Exchange's Office of the General Counsel) and that such 
service must be made in the same manner as service on the Office of the 
General Counsel.

III. Discussion

    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.\7\ 
Specifically, the Commission believes the proposal is consistent with 
the Section 6(b)(5) \8\ requirements that the rules of an exchange be 
designed to promote just and equitable principles of trade, to remove 
impediments to and perfect the mechanisms of a free and open market and 
a national market system, and in general, to protect investors and the 
public.
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    \7\ In approving this rule change, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that the proposal strikes a reasonable 
balance between the Exchange's obligation to protect investors and 
their confidence in the market, with its parallel obligation to perfect 
the mechanism of a free and open market, by providing investors with 
notice when a company is being considered for delisting by the Exchange 
by issuing a press release and appending a suffix to the security. The 
Commission believes that some investors may consider the NYSE's intent 
to delist a security from the Exchange an important factor in their 
investment decision. The proposed rule change allows investors to 
consider this factor while continuing to allow the securities to be 
traded on the Exchange pending the listed company's appeal.
    The Commission also believes that the proposal provides fair 
procedures for issuers, while giving the Exchange the ability to delist 
an issuer that has failed to meet the Exchange's standards for 
continued listing. The Commission believes that the proposed appeals 
process is fair to issuers because it would allow companies to appeal 
suspension decisions, require written denials for oral appeals, and 
generally allow companies to trade on the NYSE pending their appeal. 
The Commission believes this process should ensure that the issuer's 
concerns are heard, yet eliminate unreasonable delays between the time 
that a company is identified as not meeting the continued listing 
requirements and the suspension of its securities from trading.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\9\ that the proposed rule change (SR-NYSE-99-30) is approved, as 
amended.
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    \9\ 15 U.S.C. 78s(b)(2).


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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-14448 Filed 6-7-00; 8:45 am]
BILLING CODE 8010-01-M