Federal Register / Vol. 63, No. 88 /Thursday, May 7, 1998 / Notices 25255

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

10 In approving the proposal, the Commission has

considered the proposal’s impact on efficiency,

competition, and capital formation. The proposal

likely will provide the Commission with data

necessary to enable it to evaluate the impact of the

proposed PMM standards on the Nasdaq market

and market participants. 15 U.S.C. 78c(f).

11 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3The Exchange also submitted a technical

amendment to the proposed rule change to correct

typographical errors in the original filing. See Letter

from Michael D. Pierson, Senior Attorney,

Regulatory Policy, Exchange, to Jeffrey Schwartz,

Special Counsel, Division of Market Regulation,

Commission, dated April 28, 1998.

designed on the pilot’s proposed start

date of July 1, 1998. Under the onemonth look-back provision in the PMM

pilot program, Nasdaq will consider the

previous calendar month and the

current month to determine a market

maker’s continued PMM eligibility if the

market maker attained PMM status in a

security during the previous month, but

fails to meet the applicable thresholds

for the current month. Nasdaq

recognizes that once the pilot begins on

July 1, 1998, PMMs will not have the

ability to avail themselves of the onemonth look-back provision because

there will be no meaningful trading to

analyze prior to July 1, 1998. Thus, to

give PMMs the full benefit of the onemonth look-back period and to allow

market makers time to adjust their

trading activity to the new standards,

Nasdaq proposes to implement the new

standards so that no market maker that

is designated as a PMM when the pilot

begins on July 1, 1998, will lose its

PMM status—based on a failure to meet

the new PMM standards—until

September 3, 1998. Nasdaq believes,

and the Commission agrees, that it is

fair to give market makers this time to

make necessary adjustments to their

trading activity to help them maintain

their PMM designation, particularly

since PMM standards have been

suspended for more than a year and the

new PMM standards are more stringent

than the previous standards. The PMM

pilot, pursuant to Amendment No. 3,

would run until January 4, 1999.

The Commission finds good cause for

approving the extension of the

suspension of existing PMM standards

prior to the 30th day after the date of

publication of notice of filing thereof. It

could be disruptive to market making to

reintroduce outdated PMM standards

for a brief period prior to implementing

a new PMM pilot. Further, the current

PMM standards have been suspended

until May 1, 1998, at which time the old

PMM standards—which are not a

meaningful measure of a market maker’s

liquidity-providing activity—would be

used again to determine market makers’

PMM status. To ensure continuity in the

PMM standards and the regulation of

short selling activity, to maintain

orderly markets, and to avoid confusion,

it is necessary to continue the

suspension of the prior PMM standards

until the new standards are

implemented on July 1, 1998.

IV. Solicitation of Comments

Given the proposal’s complexity and

the Commission’s desire to give the

public sufficient time to consider the

proposal, the Commission hereby grants

Nasdaq’s request to extend the comment

period for the proposed rule changes, as

amended, to May 27, 1998. Interested

persons are invited to submit written

data, views, and arguments concerning

the foregoing, including whether the

proposed rule changes are consistent

with the Exchange Act. Persons making

written submissions should file six

copies thereof with the Secretary,

Securities and Exchange Commission,

450 Fifth Street, N.W., Washington, DC

20549. Copies of the submissions, 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–98–26 and should be

submitted by May 27, 1998.

V. Conclusion

It is therefore ordered, pursuant to

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

that Amendment No. 3 to the proposed

rule change, SR–NASD–98–26, which

extends, on an accelerated basis, the

suspension of the current PMM

standards to July 1, 1998, be and hereby

is approved.10

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.11

Jonathan G. Katz,

Secretary.

[FR Doc. 98–12142 Filed 5–6–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39934; File No. SR–PCX–

98–20]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Pacific Exchange, Inc. To Discontinue

the Exchange’s SCOR Marketplace

April 30, 1998.

Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Exchange Act’’) 1 and Rule 19b–4

thereunder,2 notice is hereby given that

on April 16, 1998, the Pacific Exchange,

Inc. (‘‘PCX’’ or ‘‘Exchange’’) filed with

the Securities and Exchange

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

the proposed rule change as described

in Items I, II and III below, which Items

have been prepared by the Exchange.3

The Exchange has designated this

proposal as one that does not

significantly affect the protection of

investors or the public interest, does not

impose any significant burden on

competition, and by its terms does not

become operative for 30 days after the

date of the filing. In addition, the

Exchange gave the Commission written

notice of its intent to file the proposed

rule change, along with a brief

description and text of the proposed

rule change, at least five business days

prior to the date of filing of the

proposed rule change. As a result, the

proposal is effective upon filing under

Exchange Act Section 19(b)(3)(A)(iii)

and Rule 19b–4(e)(6) thereunder. 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

The Exchange is proposing to

discontinue its Small Corporate Offering

Registration (‘‘SCOR’’) Marketplace and

to remove its rules on the SCOR

Marketplace from the Rules of the

Exchange. The text of the proposed rule

change is attached as Exhibit A.
25256 Federal Register / Vol. 63, No. 88 /Thursday, May 7, 1998 / Notices

4See Exchange Act Release No. 35628 (April 19,

1995) 60 FR 20787 (April 27, 1995) (order

approving SR–PSE–94–31); see also Exchange Act

Release No. 35636 (April 21, 1995) 60 FR 20781

(April 27, 1995) (order approving new listing fees

for SCOR Securities, SR–PSE–95–03). 5See note 3 above.

6 In reviewing this proposal, the Commission has

considered its impact on efficiency, competition,

and capital formation. The proposal likely will not

affect efficiency, competition, or capital formation

given that no securities are traded on the SCOR

Marketplace and none were likely to do so in the

near future. 15 U.S.C. 78c(f).

7 17 CFR 200.30–3(a)(12).

II. Self-Regulatory Organizations

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 on 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

Purpose

On April 19, 1995, the Commission

approved an Exchange proposal to

permit the Exchange to list and trade

SCOR securities, i.e., single classes of

common or preferred stock that were

issued pursuant to either Regulation A

(‘‘Reg. A’’) or Rule 504 under the

Securities Act of 1933 (‘‘Securities

Act’’).4 The proposal was approved as a

three-year pilot program, which expired

on April 19, 1998. At the time this

proposed rule change was filed with the

Commission, there were no SCOR

securities listed or traded on the

Exchange and there were no

applications pending for participation

in the SCOR program.

The SCOR Marketplace was created as

a secondary market for small companies

sponsoring direct public offerings

(DPOs), selling stock directly to

investors under federal Reg. A

standards, or state laws for SCOR issues.

These federal and state programs are

intended to help small businesses raise

public capital, without following the

rigorous filing and reporting

requirements normally applied to

securities offerings sponsored by larger

companies, and without the support of

a securities underwriter. Reg. A

offerings are limited to $5 million;

SCOR offerings to $1 million.

The Exchange was approached in

1992 by small business advocates who

believed that the two programs were not

being fully used, in part due to the

absence of a well regulated, liquid

secondary market for the trading of

SCOR and Reg. A stocks. At that time,

secondary market activity in these

offerings was limited to the Nasdaq

Bulletin Board, or to a single stock

broker (usually operating in the

sponsoring company’s hometown)

willing to keep a physical record of

potential buyers and sellers. The PCX

spend nearly three years working with

state and federal securities regulators to

develop the SCOR Marketplace, which

was approved by the Commission in

1995.5

From 1996 through the middle of

1997, 178 companies completed SCOR

or Reg. A offerings, according to

statistics complied by PCX staff. Many

of these firms contacted the PCX about

listing on the SCOR Marketplace. None,

however, completed the listing

application process at the Exchange,

and only a handful were listed by other

markets: two on the Nasdaq Small Cap

market, one on the Toronto Stock

Exchange, five on the OTC bulletin

board, and one on the Pink Sheets.

Although one company applied to list

its SCOR securities on the PCX, it later

withdrew its application.

Accordingly, the Exchange has

determined, after careful consideration,

to discontinue its SCOR Marketplace.

Basis

The Exchange believes that the

proposal is consistent with Section 6(b)

of the Exchange Act, in general, and

Section 6(b)(5), in particular, in that it

is designed to facilitate transactions in

securities, promote just and equitable

principles of trade, and to protect

investors and The public interest. The

Exchange does not believe that the

proposal will affect the protection of

investors or the public interest because

no securities are currently listed or

traded under the SCOR Marketplace. In

addition, the Exchange does not believe

that discontinuing the program will

impose any burden on competition

because the rule change will not

establish any new rules or requirements.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will 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 on the proposed

rule change were neither solicited nor

received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The foregoing rule change shall

become operative 30 days after the date

of filing, pursuant to subparagraph

(e)(6)(iii) of Exchange Act Rule 19b–4.

At any time within 60 days of the date

of filing of such proposed rule change,

the Commission may summarily

abrogate the 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 Exchange Act.6

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 Exchange

Act. Persons making written

submissions should file six copies

thereof with the Secretary, Securities

and Exchange Commission, 450 Fifth

Street, N.W., Washington DC 20549.

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 Exchange. All

submissions should refer to File No.

SR–PCX–98–20 and should be

submitted by May 28, 1998.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.7
Federal Register / Vol. 63, No. 88 /Thursday, May 7, 1998 / Notices 25257

8Proposed new text is italicized, deleted text is

bracketed.

Jonathan G. Katz,

Secretary.

Exhibit A

Text of the Proposed Rule Change 8

RULE 3

LISTINGS

¶ 356 General Provisions and

Definitions

Rule 3.1(a). No change.

Rule 3.1(b) Definitions. The

following terms used in Rules 3.2

through 3.5 shall, unless otherwise

indicated, have the meanings herein

specified:

* * * * *

[(14) The term ‘‘Small Corporate

Offering Registration Securities’’

(‘‘SCOR Securities’’) means a single

class of an issuer that has been

designated as common stock and/or

preferred stock issued pursuant to:

(i) Regulation A under the Securities

Act of 1933 (‘‘Securities Act’’) and using

the prescribed form as applicable; or

(ii) Rule 504 under the Securities Act

and using Form U–7 of the North

American Securities Administrators

Association (‘‘NASAA’’) (or state

variation of such form with

substantially similar requirements).

(15) Once SCOR Securities have been

accepted for listing on the Exchange, all

securities of that class shall be

considered to be SCOR Securities for

purposes of this rule 3.1(b)(14), except

those securities of the class that are

subject to restrictions (i.e., securities

restricted pursuant to federal or state

securities laws, by any other law, by

agreement, or in any other manner) that

make them ineligible for trading on the

Exchange.]

* * * * *

¶ 3567 Applications to List

Rule 3.2(a) No change.

* * * * *

Listing Requirements

General

Rule 3.2(b) The Exchange has a

[multi-tiered] two-tier listing structure.

Any security listed pursuant to this Rule

3.2, paragraphs (c) through (j), and any

equity option listed in accordance with

Rule 3.6 and any index product listed in

accordance with Rules 7 or 8 shall be

designated as a Tier I security except for

any security listed under Tier II [or

SCOR] listing requirements; provided,

however, that a security that is

convertible into or carries a right to

subscribe to purchase common stock

will be a Tier II security unless the

common stock into which it is

convertible qualifies for inclusion under

the Tier I designation. Furthermore, in

cases where a company’s security does

not qualify for inclusion under the Tier

I designation, yet the security is listed

or has been approved for listing on

either the New York Stock Exchange

(‘‘NYSE’’), American Stock Exchange

(‘‘AMEX’’) (except for so-called ‘‘ECM’’

securities), or NASDAQ National Market

System (‘‘NASDAQ/NMS’’), the

Exchange may list such security under

Tier II in reliance upon the listing

requirements of the applicable exchange

(or association).

A listing under the Tier I designation

generally signifies that the company has

achieved maturity and high status in its

industry in terms of assets, earnings and

shareholder interest and acceptance.

The Tier II designation is limited,

except for specific circumstances as

discussed above, to the listing of

common stock, preferred stock, bonds

and debentures, and warrants. A listing

under the Tier II designation generally

signifies that the company has limited

commercial operations, lower

capitalization, and lacks a demonstrated

earnings history. [Any security listed

under the SCOR listing requirements

constitute a third tier, however, solely

for purposes of the application of

‘‘exchange listing’’ exemptions

applicable to ‘‘issuer’’ transactions

under the securities laws of the various

states and territories of the United

States, SCOR securities are not deemed

to be ‘‘listed’’ on the Exchange.]

* * * * *

Designation of Tier I Securities Initial

Listing Requirements

Common Stock—Select Market

Companies

Rule 3.2(c) No change.

* * * * *

Basic Listing Requirements

* * * * *

No change.

Alternate Listing Requirements

* * * * *

No change.

Preferred Stock and Similar Issues

Rule 3.2(d) No change.

* * * * *

Bonds and Debentures

Rule 3.2(e) No change.

* * * * *

Warrants

Rule 3.2(f) No change.

* * * * *

Contingent Value Rights (‘‘CVRs’’)

Rule 3.2(g) No change.

* * * * *

Unit Investment Trusts (‘‘UTs’’)

Rule 3.2(h) No change.

* * * * *

Limited Partnerships

Rule 3.2(i) No change.

* * * * *

Other Securities

Rule 3.2(j)(1) No change.

* * * * *

Paragraphs (k) through (m). Reserved.

Designation of Tier II Securities

Initial Listing Requirements

Common Stock—Development Stage

Companies

Rule 3.2(n) No change.

* * * * *

Basic Listing Requirements

No change.

* * * * *

Alternate Listing Requirements

No change.

* * * * *

Rule 3.2(o) No change.

* * * * *

Bonds and Debentures

Rules 3.2(p) No change.

* * * * *

Warrants

Rule 3.2(q) No change.

* * * * *

[Rule 3.2(r)—Deleted]

Paragraphs (r), (s) and (t). Reserved.

* * * * *

¶ 3573 Corporate Governance and

Disclosure Policies

Rule 3.3. The Exchange shall require

that specific corporate governance and

disclosure policies be established by

domestic issuers of any equity security

listed pursuant to Rule 3.2. The

Exchange, however, will not require an

issuer of such security under [either] the

Tier II [or SCOR] designation[s] to

comply with the provision for an audit

committee as set forth in this Rule

3.3(b).

* * * * *

Corporate Governance

Rule 3.3(a) No change.

* * * * *
25258 Federal Register / Vol. 63, No. 88 /Thursday, May 7, 1998 / Notices

9This fee schedule was part of a previous

Exchange rule filing. See Exchange Act Release No.

35636 (April 21, 1995) 60 FR 20781 (April 27, 1995)

(order approving new listing fees for SCOR

Securities, SR–PSE–95–03).

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

2 17 CFR 240.19b–4.

3 In Amendment No. 1, the PHLX proposes to

amend its filing so that the position limits for the

European Currency Unit will be 200,000 contracts

on the same side of the market, rather than 100,000

contracts, as originally proposed. In addition, in

Amendment No. 1, the PHLX agrees that it will

consult with the Commission, prior to the

conversion to the Euro on January 1, 1999, to

determine whether a Rule 19b–4 filing is necessary.

Rule 3.3(b) No change.

* * * * *

Rule 3.3(c) No change.

* * * * *

Rule 3.3(d) No change.

* * * * *

Rule 3.3(e) No change.

* * * * *

Rule 3.3(f) No change.

* * * * *

Rule 3.3(g) No change.

* * * * *

Rule 3.3(h) No change.

* * * * *

Paragraphs (i) through (s). Reserved.

Disclosure Policies

Rule 3.3(t) No change.

* * * * *

¶3579 Suspension of Issuer

Withdrawal from Listing

Rule 3.4(a). No change.

Rule 3.4(b). No change.

¶3585 Maintenance Requirements

and Delisting Procedures

Rule 3.5(a). No change.

* * * * *

Tier I Securities

Maintenance Requirements

Common Stock—Select Market

Companies

Rule 3.5(b) No change.

* * * * *

Preferred Stock and Similar Issues

Rule 3.5(c) No change.

* * * * *

Bonds and Debentures

Rule 3.5(d) No change.

* * * * *

Warrants

Rule 3.5(e) No change.

* * * * *

Contingent Value Rights (‘‘CVRs’’)

Rule 3.5(f) No change.

Unit Investment Trusts (‘‘UITs’’)

* * * * *

Rule 3.5(g) No change.

* * * * *

Paragraphs (h) through (l). Reserved.

Tier II Securities

Maintenance Requirements

Common Stock—Development Stage

Companies

Rule 3.5(m) No change.

* * * * *

Preferred Stock and Similar Issues

Rule 3.5(n) No change.

* * * * *

Bonds and Debentures

Rule 3.5(o) No change.

* * * * *

Warrants

Rule 3.5(p). No change.

* * * * *

Paragraphs (q) and (r). Reserved.

[Rule 3.5(r)—Deleted]

Other Reasons for Suspending or

Delisting

Rule 3.5(s) No change.

* * * * *

Delisting Procedures

Rule 3.5(t) No change.

* * * * *

Options

¶ 3591

Rule 3.6 No change.

Rule 3.6(a) No change.

* * * * *

Rule 3.6(b) No change.

* * * * *

Rule 3.6(c) No change.

* * * * *

Rule 3.6(d) No change.

* * * * *

* * * * *

¶3598 Withdrawal of Approval of

Underlying Securities

Rule 3.7(a). No change.

* * * * *

Rule 3.7(b). No change.

* * * * *

[SCOR Marketplace 9

Original Listings

The Original Listing fees are fixed fees

and issuers are not charged by the

number of shares being listed.

Common Stock—$5,000.00

Preferred Stock—$5,000.00

Processing Fee

*Per Original Listing Application—

$500.00

Name Change—$250.00

Change in Par Value—$250.00

* This is a fixed charge for the review of

potential listings and is non-refundable.

Issues approved for listing may have this

charge credited toward the original listing

fee.

Substitution of Original Listing

Per Application: Fixed charge of

$750.00

Substitution may occur as a result of

a change in state of incorporation,

reincorporation under laws of same

state, a reverse stock split,

recapitalizations, or similar events.

Listing of Additional Shares

Per Application: $.0025 per share

Minimum charge of $500.00

Maximum charge of $2,500.00

Maximum charge of $5,000.00 per

annum

Annual Maintenance Fee

For one issue—$1,000.00

For each additional issue—$500.00

Payable January of each year

following listing.

Conversion Fee

Conversion from the SCOR Marketplace

to Tiers I or II.

Common Stock—$15,000.00

[FR Doc. 98–12143 Filed 5–6–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39940; International Series

Release No. 1131; File No. SR–PHLX–98–

17]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of Proposed

Rule Change by the Philadelphia Stock

Exchange, Inc., Relating to Listing and

Trading Options on the European

Currency Unit

April 30, 1998.

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 April 6,

1998, the Philadelphia Stock Exchange

(‘‘PHLX’’ or ‘‘Exchange’’) filed with the

Securities and Exchange Commission

(‘‘SEC’’ or ‘‘Commission’’) the proposed

rule change as described in Items I and

II below, which Items have been

prepared by the PHLX. On April 27,

1998, the Exchange filed Amendment

No. 1 to the proposed rule change.3 The