69594 Federal Register / Vol. 65, No. 223 / Friday, November 17, 2000 / Notices

4 15 U.S.C. 78o(b)(6).

5 17 CFR 240.19b–4(f)(6). 6 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3See Securities Exchange Act Release No. 43383

(September 28, 2000), 65 FR 59480.

(h) of Rule 10332, Schedule of Fees in

Customer Disputes, which relate solely

to Rule 10334, and renumber Rules

10205 and 10332 accordingly.

2. Statutory Basis

NASD Dispute Resolution believes

that the proposed rule change is

consistent with the provisions of

Section 15A(b)(6) of the Act,4 which

requires, among other things, that the

Association’s rules must be designed to

prevent fraudulent and manipulative

acts and practices, to promote just and

equitable principles of trade, and, in

general, to protect investors and the

public interest. NASD Dispute

Resolution believes that accelerating the

expiration date of Rule 10334 will serve

the public interest by eliminating an

unnecessary, redundant Code provision

that confuses parties and results in

needless expenditure of NASD Dispute

Resolution resources.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

NASD Dispute Resolution does not

believe that the proposed rule change

will result in any burden on

competition that is not necessary or

appropriate in furtherance of the

purposes of the Act, as amended.

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.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The proposed rule change has been

filed by the Association as a ‘‘noncontroversial’’ rule change under Rule

19b–4(f)(6) under the Act.5

Consequently, 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 until December 31, 2000, more

than 30 days from November 3, 2000,

the date on which it was filed, and the

NASD provided the Commission with

written notice of its intent to file the

proposed rule change at least five days

prior to the filing date, it has become

effective pursuant to Section 19(b)(3)(A)

of the Act and Rule 19b–4(f)(6)

thereunder. At any time within 60 days

of this filing, the Commission may

summarily abrogate this proposal 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

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 NASD. All

submissions should refer to File No.

SR–NASD–00–65 and should be

submitted December 8, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–29444 Filed 11–16–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43536; File No. SR–NASD–

00–48]

Self-Regulatory Organizations; Order

Granting Approval of Proposed Rule

Change by the National Association of

Securities Dealers, Inc. Requiring

Public Disclosure of Receipt of a

Delisting Notice

November 9, 2000.

I. Introduction

On August 10, 2000, the National

Association of Securities Dealers Inc.

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

wholly owned subsidiary, the Nasdaq

Stock Market, Inc. (‘‘Nasdaq’’), filed

with the Securities and Exchange

Commission (‘‘Commission’’ or ‘‘SEC’’),

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 that would

require an issuer to publicly disclose the

receipt of a delisting notice for failure to

comply with Nasdaq’s continued listing

requirements. Notice of the proposed

rule change appeared in the Federal

Register on October 5, 2000.3 The

Commission received no comments on

the proposed rule change. This order

approves the proposed rule change.

II. Description of the Proposal

Nasdaq proposes to amend Rule

4815(b) and IM 4120–2, ‘‘Disclosure of

Written Notice of Staff Determination,’’

to require an issuer to make a public

announcement through the news media

disclosing the receipt of a written staff

determination to prohibit continued

listing requirements (‘‘Staff

Determination’’) and the rule(s) upon

which the Staff Determination was

based. The proposal also requires the

public announcement to be make as

promptly as possible, but not more than

seven calendar days following the

receipt of the Staff Determination.

Additionally, the proposal provides that

if the public announcement is not made

by the issuer within the time allotted,

trading of its securities shall be halted,

even if the issuer appeals the Staff

Determination as set forth in Rule 4820.

If the issuer fails to made the public

announcement by the time that the

Listings Qualification Panel issues its

decision, that decision will also

determine whether to delist the issuer’s

securities for failure to make the public

announcement.

According to Nasdaq, the proposed

rule change is designed to require a

Nasdaq issuer to publicly disclose the

receipt of a written delisting notice for

failure to comply with the continued

listing requirements. Since Nasdaq does

not currently have such a requirement,

some Nasdaq issuers publicly disclose

the receipt of a Staff Determination

while other issuers do not make the

disclosure. In this regard, Nasdaq

proposes that the public announcement

shall not only disclose the receipt of a

Staff Determination, but shall also

indicate the Marketplace Rule(s) upon

which it was based.

Furthermore, Nasdaq proposes that an

issuer be required to make the public

announcement as promptly as possible,

but not more than seven calendar days

following the receipt of the Staff

Federal Register / Vol. 65, No. 223 / Friday, November 17, 2000 / Notices 69595

4 In approving this proposal, the Commission has

considered the proposed rule’s impact on

efficiency, competition and capital formation. 15

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

5 15 U.S.C. 78o–3(b)(6).

6 Id.

7 Id.

8 Id.

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

10 17 CFR 200.30–3(a)(12).

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

2The American Stock Exchange, Inc. filed a

similar proposed rule change SR–Amex–00–46. See

Securities Exchange Act Release No. 43419 (Oct. 6,

2000), 65 FR 61206 (Oct. 16, 2000).

3Amendment No. 1 changed the section under

which the proposed rule change was filed from

Section 19(b)(3) to Section 19(b)(2) of the Act and

made other technical changes. See Letter from

Edward Knight, Executive Vice President and Chief

Legal Officer, Nasdaq, to Katherine A. England,

Assistant Director, Division of Market Regulation

(‘‘Division’’), SEC (Oct. 2, 2000).

4Securities Exchange Act Release No. 43420 (Oct.

6, 2000), 65 FR 61011 (Oct. 13, 2000).

5Amendment No. 2 made a minor technical

change to the interpretation. See Letter from Arnold

P. Golub, Senior Attorney, Nasdaq, to Katherine A.

England, Assistant Director, Division, SEC (Oct. 11,

2000). Because the amendment is technical, it does

not need to be published for comment.

Determination. Nasdaq believes this

time frame will provide an issuer with

a sufficient opportunity to prepare a

public announcement while also

ensuring that investors receive

information in a timely manner. If an

issuer fails to disclose the receipt of a

Staff Determination, trading of its

securities will be halted until the

disclosure is made, even if the issuer

appeals to the Listings Qualifications

Panel, as provided for under

Marketplace Rule 4820. If an issuer fails

to make the public announcement by

the time the Listing Qualification Panel

issues its decision, that decision will

also determine whether to delist an

issuer’s securities for failure to make the

public announcement.

III. Discussion

The Commission finds the proposed

rule change is consistent with the Act

and the rules and regulations

promulgated thereunder.4 Specifically,

the Commission finds that approval of

the proposed rule change is consistent

with Section 15A(b)(6) 5 of the Act.

Section 15A(b)(6) 6 requires that the

rules of a registered national securities

association be designed to prevent

fraudulent and manipulative acts and

practices, promote just and equitable

principles of trade, foster cooperation

and coordination with persons engaged

in regulating, clearing, settling,

processing information with respect to,

and facilitating transactions in

securities, remove impediments to and

perfect the mechanism of a free and

open market and a national market

system, and in general, protect investors

and the public interest.

Specifically, the Commission finds

that the proposal to amend NASD Rule

4815 to require that an issuer make a

public announcement through the news

media to disclose the receipt of a Staff

Determination to prohibit continued

listing of the issuer’s securities as a

result of the issuer’s failure to comply

with the continued listing requirements

is consistent with Section 15A(b)(6) 7

because it will provide notice to

investors that Nasdaq has determined to

delist an issuer’s securities for noncompliance with Nasdaq’s continued

listing requirements, and the Rules

upon which the Staff Determination was

based. Such information should serve to

protect present and future investors in

an issuer’s securities by providing them

with this information as promptly as

possible, and not more than seven

calendar days following the receipt of a

Staff Determination for failure to

comply with continued listing

requirements. Nasdaq believes, and the

Commission agrees, that requiring

public announcement of this

information as promptly as possible, but

not more than seven calendar days from

receipt of the Staff Determination,

allows a reasonable timeframe for the

issuer to prepare an announcement,

while ensuring that investors receive the

information in a timely manner. The

Commission believes that investors

should have the benefit of knowing that

an issuer has failed to meet Nasdaq’s

continued listing requirements and the

Rules upon which the Staff

Determination is based, and therefore

finds the provision that trading of an

issuer’s securities, if an issuer fails to

disclose receipt of a Staff Determination,

will be halted until the disclosure is

made, even if the issuer appeals to the

Listing Qualifications Panel, to be

reasonable and consistent with the Act.

Finally, the Commission believes that

the proposal should benefit investors

because it will ensure that all Nasdaq

issuers publicly disclose the receipt of

a Staff Determination in both a timely

and uniform manner, as opposed to the

current situation whereby some issuers

voluntarily make the disclosure while

others do not.

IV. Conclusion

For the above reasons, the

Commission finds that the proposed

rule change is consistent with the

provisions of the Act, in general, and

with Section 15A(b)(6),8 in particular.

It Is Therefore Ordered, pursuant to

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

proposed rule change (SR–NASD–00–

48), be and hereby is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.10

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–29445 Filed 11–16–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43549; File No. SR–NASD–

00–50]

Self-Regulatory Organizations; Order

Approving a Proposed Rule Change by

the National Association of Securities

Dealers, Inc. Relating to the Definition

of ‘‘Public Offering’’ for Purposes of

Nasdaq’s Shareholder Approval Rules

November 13, 2000.

On August 11, 2000, The National

Association of Securities Dealers, Inc.

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

wholly owned subsidiary, The Nasdaq

Stock Marker, Inc. (‘‘Nasdaq’’) 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 a proposed rule change

regarding the adoption of interpretive

material defining ‘‘Public Offering’’ for

purposes of Nasdaq’s shareholder

approval rules.2 On October 4, 2000, the

Nasdaq filed Amendment No. 1 to the

proposed rule change.3 The proposed

rule change was noticed in the Federal

Register.4 On October 13, 2000, the

NASD filed Amendment No. 2 to the

proposed rule change.5 No comments

were submitted on the proposed rule

change. This order approves the

proposed rule change, as amended.

I. Background

Nasdaq rules require shareholder

approval for stock issuances of 20

percent or more of an issuer’s total

shares outstanding, offered at less than

the greater of book or market value. The

applicable rules further provide,

however, that shareholder approval is

not required for a ‘‘public offering,’’

although that term is not defined in the

rules. Recently, a number of issuers

have inquired as to whether certain

large, below-market offerings were