[Federal Register Volume 65, Number 203 (Thursday, October 19, 2000)]
[Notices]
[Pages 62781-62783]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-26802]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43429; File No. SR-NYSE-00-42]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by New York Stock Exchange, Inc. 
Extending the Pilot Fee Structure Governing the Reimbursement of Member 
Organizations for Costs Incurred in the Transmission of Proxy and Other 
Shareholder Communications Materials

October 10, 2000.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ (the ``Act'') and Rule 19b-4 thereunder,\2\ notice is 
hereby given that on October 10, 2000, the New York Stock Exchange, 
Inc. (``Exchange'' or ``NYSE'') 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 NYSE. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.

[[Page 62782]]

I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The NYSE is proposing to extend the pilot fee structure (``Pilot 
Fee Structure'') regarding Exchange Rules 451 and 465 (``Rules'').\3\ 
Among other things, the Rules establish guidelines for the 
reimbursement of expenses by NYSE issuers to NYSE member organizations 
for the processing of proxy materials and other issuer communications 
(collectively, ``Material'') with respect to security holders whose 
securities are held in street name. The Pilot Fee Structure is 
scheduled to expire on October 10, 2000. NYSE proposes to extend the 
pilot through November 20, 2000.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ The text of Rule 451 also is included at Para. 402.10(A) of 
the Exchange's Listed Company Manual.
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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 NYSE included statement 
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 IV below. The NYSE 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
    Among other things, the Pilot Fee Structure lowers certain 
guidelines concerning the reimbursement of fees for the distribution of 
Material, creates incentive fees to eliminate duplicative mailings, and 
establishes a supplemental fee for intermediates that coordinate 
multiple nominees. The proposed rule change would extend the Pilot Fee 
Structure termination date from October 10, 2000, to November 20, 2000.
    An extension of the Pilot Fee Structure's termination date will 
give the Commission additional time to consider the pilot fees as well 
as the proposed nominee coordination fee,\4\ without a lapse in the 
current rules. Absent an extension of the Pilot Fee Structure's 
termination date, the fees in effect prior to the pilot program would 
return to effectiveness after October 10, 2000, creating confusion in 
the market.
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    \4\ The Exchange submitted a proposed rule change to set forth 
the minimum functions that an intermediary is expected to perform to 
recover the nominee coordination fee. See Securities Exchange Act 
Release No. 43159 (August 16, 2000), 65 FR 51384 (August 23, 2000).
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2. Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b)(4) \5\ of the Act, which requires an exchange's rules 
to provide for the equitable allocation of reasonable dues, fees and 
other charges among its members and other persons using its facilities. 
In addition, the Exchange believes that the proposed rule change is 
consistent with section 6(b)(5) \6\ of the Act, which requires that an 
exchange have rules that are 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, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest.
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    \5\ 15 U.S.C. 78f(b)(4).
    \6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule changes does not 
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

    NYSE has not solicited, and does not intend to solicit, comments on 
the proposed rule change. NYSE has not received any unsolicited 
comments from members or other interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    Because the foregoing proposed rule change: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) does not become operative for 30 days from the date of filing, 
or such shorter time that the Commission may designate if consistent 
with the protection of investors and the public interest, the proposed 
rule change has become effective pursuant to section 19(b)(3)(A)\7\ of 
the Act and Rule 19b-4(f)(6) \8\ thereunder.\9\
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    \7\ 15 U.S.C 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ As required under Rule 19b-4(f)(6)(iii), the Exchange 
provided the Commission with written notice of its intent to file 
the proposed rule change.
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    A proposed rule change filed under rule 19b-4(f)(6) may not become 
operative prior to 30 days after the date of filing. However, Rule 19b-
4(f)(6)(iii) permits the Commission to designate a shorter time if such 
action is consistent with the protection of investors and the public 
interest. NYSE seeks to have the proposed rule change become operative 
on or before October 10, 2000, in order to allow the Pilot Fee 
Structure to continue in effect on an uninterrupted basis.
    The Commission, consistent with the protection of investors and the 
public interest, has determined to make the proposed rule change 
operative immediately through November 20, 2000. This extension of the 
Pilot Fee Structure will provide the Commission with additional time to 
review and evaluate the pilot fees as well as the proposed nominee 
coordination fee components.
    The Commission notes that unless the current expiration date of the 
Pilot Fee Structure is extended, the reimbursement rates for Material 
distributed after October 10, 2000, will revert to those in effect 
prior to March 14, 1997. The Commission believes that such a result 
could be confusing and counterproductive.
    Based on these reasons, the Commission believes that it is 
consistent with the protection of investors and the public interest 
that the proposed rule change become operative immediately through 
November 20, 2000. At any time within 60 days of the filing of the 
proposed rule change, the Commission may summarily abrogate such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

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

[[Page 62783]]

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-00-42 and should be 
submitted by November 9, 2000.

    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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Jonathan G. Katz,
Secretary.
[FR Doc. 00-26802 Filed 10-18-00; 8:45 am]
BILLING CODE 8010-01-M