58136 Federal Register / Vol. 65, No. 188 / Wednesday, September 27, 2000 / Notices

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

2 17 CFR 240.19b–4.

3Securities Exchange Act Release No. 42803 (July

31, 2000), 65 FR 48262.

4OPM owners that elect to upgrade to a regular

membership within 240 days would be entitled to

pay on a monthly basis for 12 months. Program

participants who are delinquent in their installment

payments by more than sixty days would forfeit all

payments made to date and their seats would revert

to OPM status. After 240 days from Program

effectiveness, an OPM owner would be required to

pay a lump sum payment of $36,000 at the time of

election.

5At that time, the Exchange could consider

changing the terms of the Program, including

raising the cost of upgrading an OPM seat. The

Commission notes and the Exchange acknowledges

that it would be required to file a proposed rule

change with the Commission pursuant to Section

19(b) of the Act if it decides to extend or make any

changes to the Program. Telephone call between

Ivonne Lugo, Assistant General Counsel, Amex, and

Sonia Patton, Attorney, Division of Market

Regulation (‘‘Division’’), Commission, on July 13,

2000.

6 15 U.S.C. 78f(b).

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

8 In approving this rule change, the Commission

has considered the proposal’s impact on efficiency,

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

9 15 U.S.C. 78s(b)(2).

10 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3Securities Exchange Act Release No. 43013 (July

13, 2000), 65 FR 43386.

4The Commission believes these provisions

should be invoked by the Exchange only under

circumstances that would be consistent with the

public interest. Since investors rightfully presume

that the companies listed on the Amex meet the

quantitative and qualitative guidelines, these

provisions should not be used by the Exchange as

a way to permit issuers to bypass the numerical

requirements for listing. The Commission would be

concerned to find the Amex routinely approving

listing for issuers that have not met the quantitative

guidelines.

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a

proposed rule change creating an

options principal membership seat

upgrade program. The proposed rule

change was published for comment in

the Federal Register on August 7, 2000.3

The Commission received no comments

on the proposal. This order approves the

proposal.

II. Description of the Proposal

The Exchange believes that the recent

increase in the number of securities

listed on the Exchange, especially

options and Exchange-traded funds, has

led to a greater demand for specialists

and brokers to handle the increased

volume. Specialists and brokers are

required to be regular members of the

Exchange. To accommodate the growing

need for more specialists and brokers,

the Exchange has proposed a voluntary

Options Principal Membership (‘‘OPM’’)

Seat Upgrade Program (‘‘Program’’),

with the potential for upgrading 203

options principal memberships into

regular memberships.

The one-time fee to upgrade an OPM

membership to a regular membership

under the proposed Program will be

$30,000 or $36,000, depending on

whether the OPM owner elects to

participate in the Program within 120

days of the effective date of the

Program.4

The Program would be in effect for 18

months. At the end of the 18 month

period, the Program would terminate

unless the Exchange elects to continue

it.5 Fund proceeds, less administrative

costs to the Exchange, would be

distributed equally to regular seat

owners of record at the time of

distribution (excluding regular seat

owners who upgraded their OPM seats).

Interest on fund deposits would accrue

to the regular members.

III. Discussion

The Commission finds that the

proposed rule change is consistent with

the Act and the rules and regulations

under the Act applicable to a national

securities exchange and, in particular,

the requirements of Section 6(b) of the

Act.6 Specifically, the Commission finds

that the proposed rule change is

consistent with Section 6(b)(5),7 in that

it is designed to facilitate securities

transactions and to remove

impediments to and perfect the

mechanism of a free and open market.8

The Commission believes that the

proposed rule change will enable the

Exchange to respond to the growing

demand for more specialists and brokers

to handle increased volume on the

Exchange, which should help to

facilitate securities transactions and

remove impediments to a free and open

market. In addition, the Commission

believes the Program may help to

enhance the depth and liquidity of the

Amex market by bringing additional

capital and market participants to the

trading floor. Finally, the Commission

believes that the Program should assist

public customers in getting better

executions of their orders by providing

them with additional firms through

which orders to the Amex can be

routed.

IV. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,9 that the

proposed rule change (SR–Amex–00–

36) is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.10

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–24733 Filed 9–26–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43308; File No. SR-Amex00–12]

Self-Regulatory Organizations; Order

Approving Proposed Rule Change by

the American Stock Exchange LLC

Relating to Procedures for the Review

of Initial Listing Decisions

September 20, 2000.

I. Introduction

On February 28, 2000, the American

Stock Exchange LLC (‘‘Amex’’ or

‘‘Exchange’’) filed with 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

relating to procedures for the review of

initial listing determinations. The

proposed rule change was published for

comment in the Federal Register on July

13, 2000.3 This order approves the

proposed rule change.

II. Description of the Proposal

Amex original listing criteria, set forth

in Part 1 of the Amex Company Guide,

provide quantitative and qualitative

criteria for the original listing of

securities on the Exchange. Section 101

of the Amex Company Guide currently

provides that the approval of a listing

application is a matter solely within the

discretion of the Exchange. Thus, the

Exchange currently has the discretion to

list the securities of an applicant that

may not satisfy each of the listing

guidelines and to deny the listing of an

applicant’s securities that do satisfy

those guidelines.4

Proposed Part 12 codifies the

procedures for the review of Amex Staff

listing determinations by a

subcommittee of the Committee on

Securities (as defined in Section 1204)

and also sets forth the procedures with

respect to appeals from the

subcommittee to the Amex Adjudicatory

Council (as defined in Section 1205) or

the Amex Board of Governors. Under

Federal Register / Vol. 65, No. 188 / Wednesday, September 27, 2000 / Notices 58137

5The Amex will not charge a hearing fee to

appeal the Exchange Staff’s listing determination.

Telephone conservation between Michael Cavalier,

Associate General Counsel, Amex, and Susie Cho,

Attorney, Division of Market Regulation

(‘‘Division’’), Commission, April 19, 2000.

6The Amex Adjudicatory Council, is established

by the Amex Board pursuant to Article II, Section

6 of the Amex Constitution. The Council consists

of six individuals, all of whom are nominated by

the Amex Nominating Committee and elected by

the regular and options principal members voting

together as a single class. Three of the Council’s

members are Floor Governors and three are Public

Governors.

7The Amex will not charge a hearing fee to

appeal the Subcommittee’s determination.

Telephone conservation between Michael Cavalier,

Associate General Counsel, Amex, and Susie Cho,

Attorney, Division, Commission, April 19, 2000.

8See Section 1206(c).

9The Commission notes that any applicant

aggrieved by a final action of the Amex may apply

for review to the Commission in accordance with

Section 19 of the Act.

10Although members of the Amex Staff may

waive their rights under Section 1211, the

Commission expects that the record on review will

include all of the information used as the basis for

the Amex’s decision.

11 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).

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

13See NASD 4800 Series Rules.

14Securities Exchange Act Release No. 41367

(May 13, 1999), 64 FR 25942.

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

16 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

Section 1202, the Exchange will notify

applicants of a decision to deny a

application, citing the specific

quantitative or qualitative standards in

Part 1 of the Amex Company Guide that

were not met. The Exchange will notify

the applicant that, upon request, the

applicant will be provided an

opportunity for a hearing under these

procedures. An applicant may request a

written or oral hearing within 7 days of

the date of the Staff’s determination to

deny the application.5 Section 1203

specifies written materials that the

applicant may submit in connection

with a hearing.

Section 1204 provides that all

hearings will be conducted before a

subcommittee of the Committee on

Securities (‘‘Subcommittee’’) consisting

of at least two persons. Following the

hearing, the Subcommittee must issue a

written decision (‘‘Subcommittee

Decision’’) citing specific grounds for

the Subcommittee’s determination. The

Subcommittee will promptly provide its

decision to the applicant and will also

provide notice that the applicant may

request review by the Adjudicatory

Council 6 within 15 days of the date of

the Subcommittee Decision.7 The

applicant will also be notified that the

Adjudicatory Council may call for

review of the Subcommittee Decision

within 45 days, at the request of one or

more of the Council’s members, as

provided in Section 1205.

The Adjudicatory Council will

consider the written record and can

hold additional hearings. It may also

recommend that the Amex Board

consider the matter. The Adjudicatory

Council will set forth specific grounds

for its decision and provide notice that

the Amex Board may call the decision

for review at any time before its next

meeting which is at least 15 days after

the decision. If the Amex Board

conducts a discretionary review, the

applicant will be provided with a

written decision affirming, modifying,

reversing, or remanding the

Adjudicatory Council’s decision.8 The

Board’s decision constitutes final action

of the Exchange and will take

immediate effect unless it specifies to

the contrary.9

Section 1207 describes the documents

included in the written record. Section

1208 provides for the maintenance of

the written record of review, as well as

any documents excluded from the

written record.

Section 1211 prohibits the Amex Staff

or an applicant from making any

communication relevant to the merits of

a proceeding with anyone who is

participating in or advising in the

consideration of a matter unless the

applicant and the appropriate Amex

Staff have been provided notice and an

opportunity to participate in the

communication. The Exchange

currently expects that Amex Staff

generally will waive their rights under

this provisions in the interest of

providing a non-adversarial business

forum for listing decisions.10

III. Discussion

The Commission finds that the

Exchange’s proposal is consistent with

the requirements of Section 6 of the

Act,11 and furthers the objectives of

Section 6(b)(5) 12 in particular because it

is designed to prevent fraudulent and

manipulative acts and practices, to

promote just and equitable principles of

trade, to foster cooperation and

coordination with persons engaged in

regulating, clearing, settling, processing

information with respect to, and

facilitating transactions in securities,

and, in general, to protect investors and

the public interest.

The Commission believes that the

proposed rule change, by establishing

procedures for the review of initial

listing determinations, will provide

clarity and transparency to issuers

concerning the Amex’s decisionmaking

process. The new rules require the

Exchange to notify applicants of a

decision to deny listing and set forth the

specific grounds for the determination

at each level of review.

The proposed rules also provide a fair

and independent review for issuers,

with provisions detailing the

maintenance of the record on review

and prohibiting communications

outside of the official proceeding. The

Commission further notes that the

proposed rules are modeled on the

Nasdaq listing process.13 Similar to the

rules proposed herein, the rules of the

National Association of Securities

Dealers, Inc. codify the procedures for

the review of initial listing

determinations.14

IV. Conclusion

For the reasons discussed above, the

Commission finds that the proposal is

consistent with the Act and the rules

and regulations thereunder.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,15 that the

proposed rule change, SR–Amex–00–12,

be and hereby is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.16

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–24735 Filed 9–26–00; 8:45 am]

BILLING CODE 8010–10–M

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COMMISSION

[Release No. 34–43309; File No. SR–NYSE–

00–37]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the New York Stock Exchange, Inc.

Rescinding Parts of, or the Entire Text

of, Exchange Rule 112A.10, Rule

321.25, Rule 392, Rule 393 and Rule

395, Which Reference Rescinded

Exchange Rule 390 or Off-Board

Trading Restrictions

September 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 August

17, 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, II, and III below, which Items

have been prepared by the Exchange.

The Commission is publishing this