49286 Federal Register / Vol. 62, No. 182 / Friday, September 19, 1997 / Notices

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

2 17 CFR 240.19b–4.

3Securities Exchange Act Release No. 38825 (July

9, 1997), 62 FR 38180 (July 16, 1997).

4See Letter from Michele R. Weisbaum, Associate

General Counsel, Phlx, to David Sieradzki,

Attorney, SEC (July 17, 1997) (‘‘Amendment No.

1’’). In Amendment No. 1, the Phlx added a new

subsection (9) to Rule 803(e) requiring that

currency, currency index and stock index warrants

be cash-settled in U.S. dollars.

5Pub. L. 104–290, Stat. 3416 (1996).

6 15 U.S.C. 77s.

7Securities Exchange Act Release No. 38728,

Securities Act Release No. 7422 (June 10, 1997), 62

FR 32705 (June 17, 1997).

8See Amendment No. 1, supra note 4. These

provisions are substantially similar to sections 106

(b) and (c) of the Amex Company Guide.

9This provision is substantially similar to section

107 and, by reference, section 101(b) of the Amex

Company Guide.

10These provisions are substantially similar to

section 1003 (b)(iii) and (e) of the Amex Company

Guide.

11 15 U.S.C. 78f.

12 15 U.S.C. 78f(b) (5).

13 In approving these rules, the Commission has

considered the proposed rules’ impact on

efficiency, competition, and capital formation, 15

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

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39053; File No. SR–Phlx–

97–29]

Self-Regulatory Organizations; Order

Granting Approval to Proposed Rule

Change and Notice of Filing and Order

Granting Accelerated Approval to

Amendment No. 1 Thereto, by the

Philadelphia Stock Exchange, Inc.

Relating to Tier I Listing Standards

September 11, 1997.

I. Introduction

On June 25, 1997, the Philadelphia

Stock Exchange, Inc. (‘‘Phlx’’ 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

amend its Tier I listing standards.

The proposed rule change was

published in the Federal Register on

July 16, 1997.3 No comments were

received on the proposal. On July 22,

1997, the Phlx submitted Amendment

No. 1 to the proposed rule change.4 This

order approves the proposal, as

amended, and solicits comment on

Amendment No. 1.

II. Description of the Proposal

In October, 1996, the National

Securities Markets Improvement Act of

1996 5 was signed into law. Among

other provisions, the law amended

section 18 of the Securities Act of 1933

(‘‘Securities Act’’) 6 to provide for

exclusive federal registration for

‘‘covered securities’’ which are those

securities listed on the New York Stock

Exchange (‘‘NYSE’’), American Stock

Exchange (‘‘Amex’’) or the National

Market System of the Nasdaq Stock

Market (‘‘Nasdaq/NMS’’) or on any other

national securities exchange designated

by the Commission to have substantially

similar listing standards to those

markets. On March 31, 1997, the Phlx

petitioned the Commission to adopt a

rule that would find Phlx Tier I listing

standards to be substantially similar to

those of the NYSE, Amex or Nasdaq/

NMS and, therefore, entitle its listed

Tier I securities to be considered

covered securities.

The Commission recently proposed

Rule 146(b) under section 18 of the

Securities Act, which would designate

certain securities as ‘‘covered

securities’’ for purposes of this federal

registration scheme.7 In order for the

Commission to designate the Phlx’s Tier

I securities as covered securities,

however, it must first determine that its

Tier I listing and maintenance standards

are substantially similar to those of

either the NYSE, Amex or Nasdaq/NMS.

The Commission has noted that it

preliminarily believes that the Phlx’s

Tier I standards differ in three areas

from those of the NYSE, Amex, or

Nasdaq/NMS. By this filing, the Phlx is

amending its rules to make them

substantially similar to those of the

Amex in those three specified areas as

set forth below.

First, Phlx Rule 803(e) is being

amended to adopt additional listing

standards for index warrants, currency

warrants and currency index warrants.

New subsection (2) requires that

warrants have a term of between one

and five years from the date of issuance.

New subsection (3) imposes a minimum

public distribution and market value

requirement of 1,000,000 warrants with

at least 400 public warrant holders and

a minimum aggregate market value of

$4,000,000. Finally, new subsection (9)

requires that index warrants, currency

warrants and currency index warrants

be cash-settled in U.S. dollars.8

Second, the pre-tax income

requirement for issuers of ‘‘other

securities’’ in Rule 803(f)(2) is increased

from $100,000 in three of the four prior

fiscal years to $750,000 in its last fiscal

year or in two of its last three fiscal

years.9 Other securities are hybrid

securities which have features common

to both equity and debt securities, yet

do not fit within the traditional

definitions of either.

Finally, Exchange Rule 810(a), which

contains the maintenance standards for

Tier I securities, is amended to add

maintenance standards for bonds, notes

and debentures. The proposed Rule

requires that debt securities maintain an

aggregate market value or principal

amount of bonds that are publicly held

of $400,000 and requires the issuer to be

able to meet its obligations in the listed

debt securities. Also, for any debt

security convertible into a listed equity

security, the debt security will be

reviewed when the underlying equity

security is delisted and will be delisted

when the underlying equity security is

no longer subject to real-time trade

reporting in the United States. In

addition, if common stock is delisted for

violation of any of the corporate

governance criteria in Exchange Rules

812 through 899, the Exchange also will

delist any listed debt securities

convertible into the common stock.10

III. Discussion

The Commission finds that the

proposed rule change is consistent with

the requirements of the Act and the

rules and regulations thereunder

applicable to a national securities

exchange, and, in particular, the

requirements of section 6 11 and the

rules and regulation thereunder.

Specifically, the Commission finds that

the proposed rule change is consistent

with the section 6(b)(5) 12 requirement

that the rules of an exchange be

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.13

The Commission believes that the

amendments to the Phlx’s listing and

maintenance standards should protect

investors in a number of ways. First, the

addition of minimum distribution and

aggregate market value requirements to

the listing standards for currency,

currency index and stock index

warrants will help to ensure the depth

and liquidity of the market for warrants

listed on the Exchange. In addition,

limiting the term of maturity of these

products to no greater than five years

should protect investors from the credit

risk of the issuer’s ability to pay at the

expiration of the warrant term. Second,

increasing the pre-tax income

requirement for issuers of ‘‘other

securities’’ will protect investors by

increasing the minimum financial

requirements for issuers of ‘‘other

securities,’’ thus reducing the likelihood

of default. Third, the addition of

maintenance requirements for bonds,

notes and debentures protects investors
Federal Register / Vol. 62, No. 182 / Friday, September 19, 1997 / Notices 49287

14 15 U.S.C. 78s(b)(2).

15 17 CFR 200.30–3(a) (12).

by helping to ensure that issuers of such

securities continue to meet minimum

financial standards and maintain the

ability to make interest and principal

payments as they come due. Finally, the

review of a convertible bond when the

underlying security is delisted and the

requirement that convertible debt be

automatically delisted if the underlying

security is delisted for violation of

corporate governance rules will help to

ensure that issuers will be unable to

avoid the effect of a delisting of an

equity security by continuing to list a

bond convertible into the delisted

security.

The Commission finds good cause for

approving Amendment No. 1 to the

proposed rule change prior to the

thirtieth day after the date of

publication of notice of filing thereof in

the Federal Register. Amendment No. 1

does not change the nature of the

proposal, but merely codifies a current

Exchange practice of requiring that

currency, currency index and stock

index warrants be cash-settled in U.S.

dollars. Further, the Commission notes

that the original proposal was published

for the full 21-day comment period and

no comments were received by the

Commission. Accordingly, the

Commission believes it is consistent

with sections 19(b)(2) and 6(b)(5) of the

Act to approve Amendment No. 1 to the

Exchange’s proposal on an accelerated

basis.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning Amendment No.

1. Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW.,

Washington, DC 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

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 at

the Commission’s Public Reference

Room. 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–Phlx–97–29 and should be

submitted by October 10, 1997.

V. Conclusion

It is therefore ordered, pursuant to

section 19(b)(2) of the Act,14 that the

proposed rule change (SR–Phlx–97–29)

is approved, as amended.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.15

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–24864 Filed 9–18–97; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

Region IV Jacksonville, Florida

District; Advisory Council Meeting,

Public Meeting

The U.S. Small Business

Administration Jacksonville, Florida

District Advisory Council will hold a

public meeting from 12:00 p.m. to 2:00

p.m., October 9, 1997, at the District

Office conference room, 7825

Baymeadows Way, Suite 100–B,

Jacksonville, Florida, to discuss such

matters as may be presented by

members, staff of the U.S. Small

Business Administration, or others

present.

For further information, write or call

Claudia D. Taylor, U.S. Small Business

Administration, 7825 Baymeadows

Way, Suite 100–B, Jacksonville, Florida

32256–7504, telephone (904) 443–1933.

Dated: September 12, 1997.

Eugene Carlson,

Associate Administrator, Office of

Communications & Public Liaison.

[FR Doc. 97–24889 Filed 9–18–97; 8:45 am]

BILLING CODE 8025–01–U–M

SMALL BUSINESS ADMINISTRATION

Region I Advisory Council Meeting;

Public Meeting

The U.S. Small Business

Administration Region I Advisory

Council, located in the geographical

area of Augusta, Maine, will hold a

public meeting at 9:30am on Tuesday,

September 23, 1997, in the Edmund S.

Muskie Federal Building, Room 512, 40

Western Avenue, Augusta, Maine, to

discuss such matters as may be

presented by members, staff of the U.S.

Small Business Administration, or

others present.

For further information, write or call

Mr. Roy Perry, District Director, U.S.

Small Business Administration, 40

Western Avenue, Augusta, Maine,

04330, telephone number 207–622–

8242.

Eugene Carlson,

Associate Administrator, Office of

Communication & Public Liaison.

[FR Doc. 97–24888 Filed 9–18–97; 8:45 am]

BILLING CODE 8025–01–U

OFFICE OF THE UNITED STATES

TRADE REPRESENTATIVE

Notice of Meeting of the Industry

Sector Advisory Committee for

Electronics and Instrumentation (ISAC

5)

AGENCY: Office of the United States

Trade Representative.

ACTION: Notice of meeting.

SUMMARY: The Industry Sector Advisory

Committee for Electronics and

Instrumentation (ISAC 5) will hold a

meeting on October 15, 1997 from 9:00

a.m. to 2:00 p.m. The meeting will be

open to the public from 9:15 a.m. to 9:45

a.m. and closed to the public from 9:00

a.m. to 9:15 a.m. and 9:45 a.m. to 2:00

p.m.

DATES: The meeting is scheduled for

October 15, 1997, unless otherwise

notified.

ADDRESSES: The meeting will be held at

the Department of Commerce in Room

1863, located at 14th Street and

Constitution Avenue, NW., Washington,

DC, unless otherwise notified.

FOR FURTHER INFORMATION CONTACT:

Margaret Donnelly, Department of

Commerce, 14th St. and Constitution

Ave., NW., Washington, DC 20230, (202)

482–5466 or Bill Daley, Office of the

United States Trade Representative, 600

17th St. NW., Washington, DC 20508,

(202) 395–6120.

SUPPLEMENTARY INFORMATION: The ISAC

5 will hold a meeting on October 15,

1997 from 9:00 a.m. to 2:00 p.m. The

meeting will include a review and

discussion of current issues which

influence U.S. trade policy. Pursuant to

section 2155(f)(2) of Title 19 of the

United States Code and Executive Order

11846 of March 27, 1975, the Office of

the U.S. Trade Representative has

determined that part of this meeting in

will be concerned with matters the

disclosure of which would seriously

compromise the development by the

United States Government of trade

policy, priorities, negotiating objectives

or bargaining positions with respect to

the operation of any trade agreement

and other matters arising in connection

with the development, implementation

and administration of the trade policy of

the United States. During the discussion