59476 Federal Register / Vol. 65, No. 194 / Thursday, October 5, 2000 / Notices

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

2 17 CFR 240.19b–4.

3See letter from Michael J. Ryan, Senior Vice

President, Chief of Staff, and Senior Legal Office,

Amex, to Alton Harvey, Office Chief, Division of

Market Regulation, Commission, dated September

20, 2000.

The Wachovia Funds and The Wachovia

Municipal Funds based on net asset

value. All expenses incurred in

connection with the reorganization were

paid by Wachovia Bank, N.A.,

applicant’s investment adviser.

Filing Date: The application was filed

on September 14, 2000.

Applicant’s Address: 3435 Stelzer

Road, Columbus, Ohio 43219–3035.

Dreyfus New York Insured Tax Exempt

Bond Fund [File No. 811–4884]; and

Dreyfus Asset Allocation Fund, Inc.

[File No. 811–7710]

Summary: Each applicant seeks an

order declaring that it has ceased to be

an investment company. On September

23, 1999, Dreyfus New York Insured Tax

Exempt Bond Fund transferred its assets

to General New York Municipal Bond

Fund, Inc., based on net asset value. On

the same date, Dreyfus Asset Allocation

Fund, Inc. transferred its assets to

Dreyfus LifeTime Portfolios, Inc.—

Growth and Income Portfolio, based on

net asset value. Expenses of $15,000 and

$35,000, respectively, incurred in

connection with the reorganizations

were paid by each applicant.

Filing Date: The applications were

filed on August 24, 2000.

Applicant’s Address: 200 Park

Avenue, New York, New York 10166.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–25590 Filed 10–4–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43371; File No. SR–Amex–

00–43]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the American Stock Exchange LLC

Amending Its Rules To Require

Companies to Publicly Disclose

Receipt of a Delisting Notice

September 27, 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

16, 2000, the American Stock Exchange

LLC (‘‘Amex’’ or ‘‘Exchange’’) filed with

the Securities and Exchange

Commission (‘‘Commission’’) a

proposed rule change to amend its rules

to require companies to publicly

disclose receipt of a written delisting

notice frame the Exchange. On

September 26, 2000, the Amex

submitted Amendment No. 1 to the

proposal to make certain technical

modifications.3 The proposal, as

amended, is described in Items I, II, and

III below, which Items have been

prepared by the Exchange. 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

It is currently the policy of the

Exchange whenever delivering a

delisting notice to a company whose

securities trade on the Exchange to

require the company to disclose the

receipt of such delisting notice in a

public announcement. The Exchange

proposes to codify the requirements of

this policy in its rules. Below is the text

of the proposed rule change. Proposed

new language appears in italics;

proposed deletions appear in brackets.

* * * * *

Sec. 401. OUTLINE OF EXCHANGE

DISCLOSURE POLICIES

The Exchange considers that the

conduct of a fair and orderly market

requires every listed company to make

available to the public information

necessary for informed investing and to

take reasonable steps to ensure that all

who invest in its securities enjoy equal

access to such information. In applying

this fundamental principle, the

Exchange has adopted the following

[six]seven specific policies concerning

disclosure, each of which is more fully

discussed (in a Question and Answer

format) in § 402:

(a)–(f) No change.

(g) Receipt of Written Delisting

Notice—A company is required to

publicly disclose that it has received a

written notice indicating that the

Exchange has determined to remove a

company’s securities from listing (or

unlisted trading) as a result of noncompliance with the continued listing

requirements. (See § 1010).

Sec. 402. EXPLANATION OF

EXCHANGE DISCLOSURE POLICIES

(a)–(f) No change.

(g) Receipt of Written Delisting Notice.

Q. What kinds of information should

be included in the public

announcement?

A. The public announcement must

indicate that the Exchange has

determined to remove the company’s

securities from listing (or unlisted

trading) and the reason(s) for the

determination. In order to assist the

company in the preparation of the

public announcement, Exchange staff

will provide the company with the

Section(s) upon which its determination

was based and a template for

disclosure.

Q. When must the public

announcement be made?

A. The public announcement must be

made as promptly as possible, but no

more than seven calendar days

following the company’s receipt of the

written notice from the Exchange. The

Exchange notes that companies should

not construe the seven calendar day

time frame as a safe harbor for

disclosure.

Q. What steps must be taken before

the public announcement is made?

A. The public announcement must be

provided to Amex’s StockWatch

Department at (212) 306–8383 (phone),

(212) 306–1488 (facsimile) and Listing

Qualifications Department at (212) 858–

5267 (phone), (212) 858–4780

(facsimile) prior to public

dissemination.

Q. What action may the Exchange

take if a company fails to make a public

announcement indicating that the

Exchange has determined to remove the

company’s securities from listing (or

unlisted trading)?

A. Failure by a company to make the

required public announcement will

result in the institution of a trading halt

in the company’s securities until the

announcement is made, even if the

company appeals the determination as

provided for under Section 1010. If the

company fails to make the

announcement by the time that the

Adjudicatory Council issues its

decision, that decision will also

determine whether to delist the

company’s securities for failure to make

the public announcement.

Q. Does Section 1010(b) relieve the

company of its disclosure obligations

under the federal securities laws?

A. No. Section 1010(b) does not

relieve the company of its obligation to

make a materiality assessment of the

pending delisting action as it may relate

to the disclosure requirements of the

federal securities laws, nor should it be

construed as providing a safe harbor

under the federal securities laws. The

Exchange suggests that the company

consult with corporate/securities

counsel in assessing its disclosure

Federal Register / Vol. 65, No. 194 / Thursday, October 5, 2000 / Notices 59477

*Notification may be provided to Amex’s

StockWatch Department at (212) 306–8383

(telephone), (212) 306–1488 (facsimile), and Listing

Qualifications Department at (212) 858–5267

(telephone), (212) 858–4780 (facsimile). 4 15 U.S.C. 78f(b)(5).

obligations under the federal securities

laws.

* * * * *

Sec. 1010. DELISTING PROCEDURES

Whenever the Exchange determines

that it is appropriate to consider

removing a security from listing (or from

unlisted trading) for other than routine

reasons (such as redemptions,

maturities, etc.), it will follow, insofar as

practicable, the following procedures:

(a) No change.

(b) If, after such conference, the

Exchange determines that the security

should be removed, it will notify the

company in writing, indicating the basis

for such decision and the specific

delisting policies and guidelines under

which action will be taken. Such notice

will also inform the company that it

may appeal to the Board of Governors of

the Exchange, or such committee or

committees as the Board may authorize,

and request a hearing. A company shall

make a public announcement through

the news media that it has received such

notice, including the specific policies

and guidelines upon which the

determination was based. Prior to the

release of the public announcement, the

company shall provide such disclosure

to Amex’s StockWatch and Listing

Qualifications Departments.* The

public announcement shall be made as

promptly as possible, but not more than

seven calendar days following receipt of

the written notice from the Exchange.

(c)–(h) No change.

* * * * *

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

The Exchange presently has a policy

of requiring any company whose

securities are listed on the Exchange (or

trade on the Exchange pursuant to

unlisted trading privileges) to publicly

disclose its receipt from the Exchange of

a written delisting notice for failure to

comply with the Exchange’s continued

listing guidelines. The purpose of the

proposed rule change is to codify this

policy in order to protect present and

potential investors in the securities of

such a company.

In order to provide investors with the

greatest protection possible, the

Exchange believes that a company’s

public announcement of pending

delisting should not only disclose the

receipt of a written notice from the

Exchange, but also indicate upon which

section(s) of the Amex Company Guide

the determination to delist has been

based. The Exchange believes that

requiring companies to disclose to

investors which specific listing

guideline(s) a company has failed to

meet will better enable investors to

make informed decisions regarding the

advisability of making or maintaining

investments in the securities of such

company. The Exchange additionally

proposes that a company be required to

make public its announcement

regarding the pending delisting as

promptly as possible, but not more than

seven calendar days following its

receipt of the written delisting notice

from the Exchange. The Amex believes

that the proposed seven-day time frame

is consistent with its current policy and

that such time frame would provide the

subject company with sufficient

opportunity to prepare its public

announcement and also ensure that

investors receive the information in a

timely manner. If a company fails to

disclose the receipt of a written

delisting notice under the proposed

requirement, trading of its securities

shall be halted until the announcement

has been made, even if the company

appeals the underlying delisting

determination as provided for under

Section 1010. In this regard, the

Exchange proposes that, if the company

has failed to make the required

announcement before the Adjudicatory

Council issues its decision with regard

to the company’s appeal, such decision

by the Adjudicatory Council whether to

delist the company’s securities may also

be based on the company’s failure to

make the public announcement.

2. Statutory Basis

The Exchange believes that the

proposed rule change, whose purpose is

to ensure that investors be notified

when the Exchange has determined to

delist a company’s securities for noncompliance with the continued listing

guidelines, is consistent with the

provisions of Section 6(b)(5) of the Act 4

which requires that an exchange have

rules that are, in general, designed to

protect investors and the public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Amex believes that the proposed

rule change will not impose any burden

on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received from

Members, Participants, or Others

Written comments were neither

solicited nor received with respect to

the proposed rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 days of the date of

publication of this notice in the Federal

Register or within such longer period (i)

as the Commission may designate up to

90 days of such date if it finds such

longer period to be appropriate and

publishes its reasons for so findingse

450 or (ii) as to which the self-regulatory

organization consents, the Commission

will:

A. By order approve such proposed

rule change, or

B. Institute proceedings to determine

whether the proposed rule change

should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing,

including whether the proposed rule

change 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

59478 Federal Register / Vol. 65, No. 194 / Thursday, October 5, 2000 / Notices

5 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4

3See letter from Jeffrey S. Davis, Assistant

General Counsel, Nasdaq, to Katherine England,

Assistant Director, Division of Market Regulation,

Commission dated September 20, 2000. The current

suspension and extension would expire on

September 30, 2000. See Securities Exchange Act

Release No. 42219 (December 9, 1999), 64 FR 70753

(December 17, 1999).

4 15 U.S.C. 78j(a).

5 17 CFR 240.10a–1.

6A short sale is a sale of a security which the

seller does not own or any sale which is

consummated by the delivery of a security

borrowed by, or for the account of, the seller. To

determine whether a sale is a short sale, members

must adhere to the definition of a ‘‘short sale’’

contained in Rule 3b–3 of the Exchange Act, which

is incorporated into Nasdaq’s short sale rule by

NASD Rule 3350(k)(1).

7See Securities Exchange Act Release No. 34277

(June 29, 1994), 59 FR 34885 (July 7, 1994) (‘‘Short

Sale Rule Approval Order’’).

8See supra, note 3.

9See NASD Rule 3350(c)(2)–(8). The Rule also

provides that a member not currently registered as

a Nasdaq market maker in a security, and that has

acquired the security while acting in the capacity

of a block positioner shall be deemed to own such

security for the purposes of the Short Sale Rule,

notwithstanding that such member may not have a

net long position in such security if and to the

extent that such member’s short position in such

security is subject to one or more offsetting

positions created in the course of bona fide

arbitrage, risk arbitrage, or bona fide hedge

activities. In addition, the NASD has recognized

that SEC staff interpretations to Rule 10a–1 under

the Exchange Act dealing with the liquidation of

index arbitrage positions and an ‘‘international

equalizing exemptions’’ are equally applicable to

the NASD’s short sale rule. See NASD Rule 3350(f).

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 number

SR–Amex–00–43 and should be

submitted by October 26, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–25594 Filed 10–04–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43368; File No. SR–NASD–

98–26]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval to Amendment

No. 9 to a Proposed Rule Change by

the National Association of Securities

Dealers, Inc. To Institute, on a Pilot

Basis, New Primary Nasdaq Market

Maker Standards for Nasdaq National

Market Securities

September 27, 2000.

On September 20, 2000, the National

Association of Securities Dealers, Inc.

(‘‘NASD’’ or ‘‘Association’’), through its

wholly-owned subsidiary, the Nasdaq

Stock Market, Inc. (‘‘Nasdaq’’),

submitted to the Securities and

Exchange Commission (‘‘SEC’’ or

‘‘Commission’’), pursuant to Section

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

of 1934 (‘‘Exchange Act’’) 1 and Rule

19b–4 thereunder,2 a proposed rule

change to: (1) Continue to suspend the

current PMM standards until June 30,

2001; and (2) extend the NASD’s Short

Sale Rule pilot until June 30, 2001

(‘‘Amendment No. 9’’).3

Amendment No. 9 to the proposed

rule change, SR–NASD–96–28, is

described in Items I and II below, which

Items have been prepared by the NASD.

The Commission is publishing this

notice and order to solicit comments on

Amendment No. 9 from interested

persons and to approve the amendment

on an accelerated basis.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

In the current amendment, Nasdaq is

proposing to extend the Short Sale Rule

pilot and the suspension of the existing

PMM standards from September 30,

2000 until June 30, 2001. The proposed

rule language, as amended, follows.

Additions are italicized; deletions are

bracketed.

NASD Rule 3350

(a)–(k) No Changes.

(l) This Rule shall be in effect until

[September 30, 2000] June 30, 2001.

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

NASD 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 NASD 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) Background on the NASD’s Short

Sale Rule

Section 10(a) of the Exchange Act 4

gives the Commission plenary authority

to regulate short sales of securities

registered on a national securities

exchange, as needed to protect

investors. Although the Commission has

regulated short sales since 1938, that

regulation has been limited to short

sales of exchange-listed securities. In

1992, Nasdaq, believing that short-sale

regulation is important to the orderly

operation of securities markets,

proposed a short sale rule for trading of

its National Market securities that

incorporates the protections provided

by Rule 10a–1 of the Exchange Act.5 On

June 29, 1994, the Commission

approved the NASD’s short sale rule,

Rule 3350 (‘‘Short Sale Rule’’),

applicable to short sales 6 in Nasdaq

National Market (‘‘NNM’’) securities on

an eighteen-month pilot basis through

March 5, 1996.7 The NASD and the

Commission have extended NASD Rule

3350 numerous times, most recently,

until September 30, 2000.8

Nasdaq’s short-sale rule employs a

‘‘bid’’ test rather than a tick test because

Nasdaq trades are not necessarily

reported to the tape in chronological

order. Nasdaq’s short sale rule prohibits

short-sales at or below the inside bid

when the current inside bid is below the

previous inside bid. Nasdaq calculates

the inside bid from all market makers in

the security (including bids on

exchanges trading Nasdaq securities on

an unlisted trading privileges basis), and

disseminates symbols to denote whether

the current inside bid is an ‘‘up-bid’’ or

a ‘‘down-bid.’’ To effect a ‘‘legal’’ shortsale on a down-bid, the short-sale must

be executed at a price at least 1⁄16th

above the current inside bid. The rule is

in effect from 9:30 a.m. E.T. until 4 p.m.

E.T. each trading day.

To reduce the compliance burdens on

its members, Nasdaq’s short sale rule

also incorporates seven exemptions

contained in Rule 10a–1 under the

Exchange Act that are relevant to

trading on Nasdaq.9 In addition, in an

effort to not constrain the legitimate

hedging needs of options market

markers, the NASD’s short sale rule

contains a limited exception for

standardized options market makers.

The Rule also contains an exemption for

warrant market makers similar to the

one available for options market makers.

(2) Background on the NASD’s Primary

Market Maker Standards

To ensure that market maker activities

that provide liquidity and continuity to

the market are not adversely constrained

when the short sale rule is involved,