71160 Federal Register / Vol. 65, No. 230 / Wednesday, November 29, 2000 / Notices

70 15 U.S.C. 78s(b)(2).

71 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3The National Association of Securities Dealers,

Inc., through its wholly owned subsidiary The

Nasdaq Stock Market, Inc., filed a similar proposed

rule change (SR–NASD–00–50). See Securities

Exchange Act Release No. 43420 (Oct. 6, 2000), 65

FR 61011 (Oct. 13, 2000).

4The Amex filed its proposed rule change on

August 16, 2000. On September 29, 2000, the Amex

filed Amendment No. 1 that entirely replaced the

original rule filing. See Letter from Michael J. Ryan,

Senior Vice President, Chief of Staff and Senior

Legal Officer, Amex, to Katherine A. England,

Assistant Director, Division of Market Regulation

(‘‘Division’’), Commission (September 29, 2000)

(‘‘Amendment No. 1’’). In Amendment No. 1, the

Amex also designated SR–Amex–00–46 as a

proposed rule change under Section 19(b)(2) of the

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

5Securities Exchange Act Release No. 43419 (Oct.

6, 2000), 65 FR 61206 (Oct. 16, 2000).

6Amendment No. 2 made a minor technical

change to the proposal. See Letter from Claudia

Crowley, Assistant General Counsel, Amex, to

Florence Harmon, Esq., Senior Special Counsel,

Division, SEC (Oct. 10, 2000). Because the

amendment is technical, it does not need to be

published for comment.

7The Commission believes that this activity is not

appropriate under Section 5 of the Securities Act

of 1933. See 15 U.S.C. 77e.

8 15 U.S.C. 78f(b).

9 15 U.S.C. 78f(b)(5).

10 In approving the proposal, the Commission has

considered the rule’s impact on efficiency,

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

11 15 U.S.C. 78s(b)(2).

12 17 CFR 200.30–3(a)(12).

the principal office of the Amex. All

submissions should refer to file number

SR–Amex–99–27 and should be

submitted by December 20, 2000.

VI. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,70 that the

proposed rule change (SR–Amex–99–

27), as amended, is approved. The

approved margin requirements shall

become effective the earlier of February

27, 2001 or such date the Exchange

represents in writing to the Commission

that the Exchange is prepared to fully

implement and monitor the approved

margin requirements.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.71

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–30378 Filed 11–28–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43588; File No. SR–Amex–

00–46]

Self-Regulatory Organizations; Order

Approving a Proposed Rule Change by

the American Stock Exchange LLC

Adopting Commentary to Section 713

that Defines ‘‘Public Offering’’ for

Purposes of Shareholder Approval

Rules

November 17, 2000.

On August 16, 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 3

adopting commentary to Section 713

that defines ‘‘Public Offering’’ for

purposes of shareholder approval rules.4

The proposed rule change was noticed

in the Federal Register.5 On October 13,

2000, the Amex filed Amendment No. 2

to the proposed rule change.6 No

comments were received on the

proposed rule change. This order

approves the proposed rule change, as

amended.

I. Background

Section 713 of the Amex Company

Guide requires 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. The

Exchange proposes to adopt

Commentary .01 to Section 713, to

clarify the definition of ‘‘public

offering’’ for issuers and interested

parties. According to the Amex, a

number of issuers have recently

inquired as to whether certain large,

below-market offerings were ‘‘public

offerings’’ because the transactions were

registered with the Commission prior to

closing the transactions.7 The Exchange

notes that historically, for purposes of

assessing the applicability of the

shareholder approval rules, it has

interpreted ‘‘public offering’’ as a

broadly distributed, registered offering

based on a firm commitment

underwriting. Conversely, the Exchange

does not consider a transaction to be a

‘‘public offering’’ for these purposes

when the transaction is of limited

distribution and/or is not based on a

firm commitment underwriting, even if

the offering was registered. Because the

offerings described above had limited

distributions and, in some cases,

offerees that were pre-determined by the

issuer, the Exchange believes that these

transactions were not ‘‘public offerings’’

for purposes of the shareholder approval

rules.

The Amex expects that proposed

Commentary .01 will help to ensure

issuer understanding of how Amex

determines whether a transaction is a

‘‘public offering’’ for purposes of

shareholder approval rules. The

proposed Commentary identifies a

number of factors that will be

considered in establishing the existence

of a ‘‘public offering.’’ Such factors

include the type of offering; the

marketing of the offering; the extent of

the offering’s distribution; the offering

price; and the extent to which the issuer

controls the offering and its distribution.

Decisions as to whether a transaction is

a ‘‘public offering’’ for purposes of these

rules will be based on the facts and

circumstances surrounding each

particular transaction.

II. Discussion

The Commission finds that the

proposed rule change is consistent with

Section 6(b) of the Act 8 in general, and

furthers the objectives of Section

6(b)(5) 9 in particular, in that it is

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.10 The

Commission believes that the proposed

Commentary to Section 713 is designed

to educate issuers and other interested

parties as to how the Exchange defines

a ‘‘public offering’’ and ensure that

issuers recognize which transactions

require shareholder approval under the

Exchange’s rules, thus promoting just

and equitable principles of trade and

protecting investors and the public

interest.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,11 that the

proposal, SR–Amex–00–46, as

amended, be and hereby is approved.

For the Commission, by the Division of

Market Regualtion, pursuant to delegated

authority.12

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–30381 Filed 11–28–00; 8:45 am]

BILLING CODE 8010–01–M