Federal Register / Vol. 60, No. 70 / Wednesday, April 12, 1995 / Notices 18649

4 15 U.S.C. 78q–1(b)(3)(F) (1988).

1 15 U.S.C. 78s(b)(1) (1988).

2 17 CFR 240.19b–4 (1994).

3Letter from Robert G. Britz, Senior Vice

President, New Listings & Client Service, NYSE, to

Sharon Lawson, Assistant Director, Division of

Market Regulation, SEC, dated January 27, 1995

(‘‘Amendment No. 1’’). Amendment No. 1 is further

described at note 11, infra. Letter from J. Paul

Wyciskala, Managing Director, Financial

Continued

participation in the conversion process

was not made mandatory.

The conversion service permits GSCC

to compare, convert, and net, prior to

the U.S. Treasury auction, trades

between members in Treasury note and

bond issues that have been executed on

the basis of the current market yield.

GSCC members submit to GSCC trade

data for yield trades with the price field

blank. GSCC compares the trade on the

basis of the yield. At the time of

conversion, GSCC calculates the

assumed coupon rate based on the par

weighted average yield of trades

compared by GSCC in each CUSIP

adjusted down to the nearest 1⁄8%.

GSCC then uses the assumed coupon

rate to convert yield trades to priced

trades based on the U.S. Treasury

standard conversion formula.

Each day until the coupon rate is set

and publicly available, GSCC

recalculates the assumed coupon rate

for the issue, converts new yield trades

to priced trades, and adjusts the prices

of previously converted, compared, and

netted yield trades. During the preauction period, GSCC calucates the

clearing fund contribution and the

forward mark allocation for

participating and nonparticipating

members. On the day of the auction,

final price data is submitted to GSCC. At

that time, the trades are compared and

netted on a final price basis.

GSC believes that participation in the

yield-to-price conversion process is

important for a netting member and for

the settlement process in general

because otherwise a netting member’s

when-issued trades do not have GSCC’s

guarantee of settlement until auction

date. Because of this, since October

1992, GSCC has not admitted an entity

into netting system membership unless

the applicant has agreed to participate

in the yield-to-price process at the time

of commencement of participation in

the netting system. Currently, only one

netting member still is not participating

in the conversion process, and it is

anticipated that it will commence

participation in the yield-to-price

process by the end of this year.

As a result, participation in the yieldto-price conversion process by netting

members will now be mandatory.

However, there may be temporary

situations, for example when an entity

commences its participation in the

netting system, in which there are

operational or other considerations that

render participation in the yield-to-price

conversion process difficult for a

member. In such circumstances, GSCC

will retain the ability to temporarily

exempt such member from the

requirement to participate in the yieldto-price conversion process. For GSCC’s

protection, however, GSCC will

calculate such member’s clearing fund

deposit and forward mark allocation

payment obligations as if it were

participating in the yield-to-price

conversion process.

II. Discussion

Section 17A(b)(3)(F) of the Act 4

provides that the rules of a clearing

agency must promote the prompt and

accurate clearance and settlement of

securities transactions and to assure the

safeguarding of securities and funds in

GSCC’s custody or under GSCC’s

control. In the first order temporarily

approving GSCC’s yield-to-price

conversion service, the Commission

found that such service was consistent

with Section 17A(b)(3)(F) in that it

extended the benefits of GSCC’s

centralized automated netting system to

netting members that execute yield

trades. The Commission further stated

that the service reduces netting

members’ exposure to the risk arising

from contraparty default prior to the

settlement of the transaction by

allowing GSCC to interpose itself

between the parties to a trade and

guarantee performance of each netting

member’s obligation sooner.

In the order permanently approving

GSCC’s yield-to-price conversion

service, the Commission noted its

potential concern about the interplay

between voluntary submission of

compared trades for GSCC netting and

the potential financial exposure to

GSCC and its members resulting from

the exclusion of those trades from

GSCC’s netting operation. The

Commission further encouraged GSCC

to reconsider the appropriateness for

netting members to withhold from the

netting operation yield trades that were

compared. GSCC delayed making the

netting of such trades mandatory

because some GSCC members needed to

make further operational changes to

accommodate mandatory netting of

trades compared through the yield-toprice conversion system. Currently, only

one member is not participating in the

conversion process, and GSCC

anticipates that such member will

commence participation in the yield-toprice process by the end of this year.

Accordingly, the Commission believes

that it is appropriate to make

participation in the yield-to-price

conversion process mandatory. By

including more trades in GSCC’s netting

system, the proposal furthers Section

17A’s goals of prompt and accurate

clearance of securities transactions.

Inclusion of more member trades within

GSCC’s guarantee and margin

requirements is consistent with Section

17A’s goals of assurance of the

safeguarding of securities and funds in

GSCC’s custody or under GSCC’s

control. Thus, the Commission believes

that the proposed rule change is

consistent with Section 17A(b)(3)(F).

Conclusion

For the reasons stated above, the

Commission finds that the proposed

rule change is consistent with Section

17A of the Act.

It is therefore ordered, pursuant to

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

proposed rule change (SR–GSCC–94–08)

be and hereby is approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–8924 Filed 4–11–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35571; File No. SR–NYSE–

95–01]

Self-Regulatory Organizations; New

York Stock Exchange, Inc.; Order

Approving Proposed Rule Change

Relating to Domestic Listing Standards

April 5, 1995.

I. Introduction

On January 18, 1995, the New York

Stock Exchange, Inc. (‘‘NYSE’’ or

‘‘Exchange’’) submitted to 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 to

amend its domestic listing standards.

The proposed rule change was

published for comment in Securities

Exchange Act Release No. 35301

(January 31, 1995), 60 FR 7245

(February 7, 1995). On February 2, and

April 5, 1995, the Exchange submitted

to the Commission Amendment Nos. 1

and 2 to the proposed rule change. Each

of these amendments made a single,

non-substantive change to clarify the

language of the original filing and are

incorporated into the discussion below.3
18650 Federal Register / Vol. 60, No. 70 / Wednesday, April 12, 1995 / Notices

Compliance, to Sharon Lawson, Assistant Director,

Division of Market Regulation, SEC, dated April 5,

1995 (‘‘Amendment No. 2’’). Amendment No. 2 is

further described at note 10, infra.

4Letter from Joseph R. Hardiman, President,

NASD, to Jonathan G. Katz, Secretary, SEC, dated

March 3, 1995 (‘‘NASD Letter’’).

5Letter from James E. Buck, Senior Vice President

and Secretary, NASD, to Jonathan G. Katz,

Secretary, SEC, dated March 17, 1995 (‘‘NYSE

Letter’’).

6 In deciding whether to approve the listing of an

equity security, the NYSE also takes qualitative

factors into consideration. These factors include

whether the company is a going concern or a

successor thereto, the degree of national interest in

the company, the character of the market for its

products, its relative stability and position in its

industry.

7 In determining the number of holders for the

above distribution standards, the NYSE considers

both beneficial and record owners.

8Shares held by directors, officers or their

immediate families and other concentrated holdings

of 10% or more are excluded from the public float.

Additionally, if the unit of trading is less than 100

shares, the requirement relating to the number of

publicly-held shares will be reduced

proportionately.

9Paragraph 102.01 of the Listed Company Manual

provides for an adjustment to the aggregate market

value standard whenever the NYSE’s Composite

Index is below 55.06. Because the value of the

Composite Index has remained substantially higher

than 55.06 in recent years, no adjustment has been

necessary. The Exchange proposal would make a

conforming change in Paragraph 102.01 to provide

that any such adjustment would be made to the new

$40 million aggregate market value standard.

10Amendment No. 2 amended Exhibit A to the

NYSE’s original filing, which set forth the text of

the proposed rule change, to make it clear that the

NYSE would consider both beneficial and record

owners for purposes of determining whether the

alternative shareholder distribution standard has

been satisfied.

11Amendment No. 1 corrected Exhibit A to the

NYSE’s original filing, which set forth the text of

the proposed rule change, by deleting the word

‘‘net’’ in the phrase ‘‘net revenues’’ as used in the

alternate demonstrated earnings power standard.

This inaccuracy did not appear, however, in the

text of Securities Exchange Act release No. 35301

(January 31, 1995), 60 FR 7245 (February 7, 1995),

which published the proposal for comment.

12See NASD letter, supra, note 4.

13See NYSE letter, supra, note 5.

14NYSE Rule 500 generally requires that an

issuers’s proposed withdrawal from listing on the

NYSE be approved by the holders of 662⁄3% of the

outstanding security without the objection of more

than 10% of the individual holders thereof.

15 15 U.S.C. 78f(b) (5) and (8) and 78k–

1(a)(1)(C)(ii) (1988).

The Commission received one

comment letter from the National

Association of Securities Dealers, Inc.

(‘‘NASD’’) 4 and one letter from the

NYSE responding to the NASD’s

comments.5 This order approves the

proposed rule change, including

Amendment Nos. 1 and 2.

II. Overview of Proposal

A. Background

Paragraph 102.01 of the NYSE’s Listed

Company Manual sets forth the

standards for domestic companies that

want to list their equity securities on the

Exchange. These standards require

applicants to satisfy the following

minimum numerical criteria.6 First, the

company must have at least 2,200 total

stockholders, together with an average

monthly trading volume of 100,000

shares for the most recent six months,

or 2,000 round-lot holders.7 Second, at

least 1.1 million shares of the

company’s stock must be publicly held.8

Third, the aggregate market value of the

publicly held shares must be at least $18

million. In this regard, Paragraph 102.01

of the Exchange’s Listed Company

Manual states that, while the NYSE

places greater emphasis on market

value, an additional measure of size is

$18 million in net tangible assets.

Fourth, the company must have

demonstrated earning power such that

its income before federal income taxes

and under competitive conditions must

equal or exceed (a) $2.5 million in the

latest fiscal year and $2 million in each

of the preceding two fiscal years or (b)

$4.5 million in the most recent fiscal

year and an aggregate of $6.5 million for

the last three fiscal years, with all three

years being profitable.

b. Proposed Amendments

The Exchange proposes to amend

Paragraph 102.01 to make four changes

to its existing numerical criteria. The

first two amendments would increase

the existing numerical criteria for the

aggregate market value of both publicly

held shares and net tangible assets from

$18 million to $40 million.9 The third

amendment would adopt an alternate

shareholder distribution standard for

companies whose shares are very

actively traded. Specifically, a company

with an average monthly trading volume

of one million shares for the most recent

12 months could qualify for listing with

500 total stockholders.10

Finally, the proposed amendments

would adopt an alternate demonstrated

earnings power standard for companies

that have a market capitalization of at

least $500 million and revenues of at

least $200 million in their most recent

fiscal year.11 Under this alternative,

such companies could qualify for listing

if their adjusted net income, as defined

below, is positive for each of the last

three fiscal years and not less than $25

million in the aggregate for such period.

For purposes of the proposed

amendment to Paragraph 102.01,

‘‘adjusted net income’’ would be

calculated by removing from reported

net income (before preferred dividends)

the effects of all items whose cash

effects are investing or financing cash

flows as determined pursuant to

Paragraph 28(b) of the Financial

Accounting Standards Board’s

Statement of Financial Accounting

Standards No. 95, ‘‘Statement of Cash

Flows’’ (‘‘FASB Statement No. 95’’),

subject to the limitations noted below.

Examples of such items include

depreciation, amortization of goodwill

and gains or losses on sales of property,

plant and equipment. In contrast to

FASB Statement No. 95, however, the

proposed rule change would limit the

adjustment for the following items to

reversing the amount charged or

credited in determining net income for

that period: (a) Discontinued operations;

(b) the cumulative effect of an

accounting change; (c) an extraordinary

item; and (d) the gain or loss on

extinguishment of debt.

III. Comments Received by the

Commission

The Commission received one

comment letter from NASD 12 and one

letter from the NYSE supporting its

proposal and addressing the NASD’s

comments.13

The NASD stated that it had no

comment on the substance of the

NYSE’s listing amendments, but that the

proposed rule change would pose

‘‘substantial anti-competitive concerns

for The Nasdaq Stock Market’’

(‘‘Nasdaq’’) if NYSE Rule 500 were left

in place. NYSE Rule 500 contains the

shareholder approval requirements that

an issuer needs to satisfy before it can

voluntarily withdraw its securities from

listing on the NYSE.14 In this context,

the NASD noted that approval of the

NYSE’s proposed rule change would

allow the NYSE to solicit a broader

range of companies listed on Nasdaq

notwithstanding that Rule 500 would

‘‘make it difficult, if not impossible, for

Nasdaq to seek listings from among a

potentially enlarged universe of NYSElisted companies.’’ Finally, the NASD

stated its belief that ‘‘expanding the

NYSE listing standards without

eliminating the anti-competitive effect

of NYSE Rule 500 is contrary to a free

and open market and the national

market system, and imposes a burden

on competition that is not otherwise

justified or in furtherance of the

purposes of the Exchange Act’’ in

violation of Sections 6(b)(5) and (8) and

11A(a)(1)(C)(ii) of the Act.15

Accordingly, the NASD requested that

the Commission require the elimination

of the NYSE shareholder approval

requirements under Rule 500 before

approving the NYSE’s alternative listing

standards.
Federal Register / Vol. 60, No. 70 / Wednesday, April 12, 1995 / Notices 18651

16 15 U.S.C. 78f(b) (1988 and Supp. V 1993).

17See Securities Exchange Act Release No. 20649

(February 13, 1984), 49 FR 6587 (February 22,

1984).

18The Supplementary Material to Rule 499 states

that although the Exchange has adopted certain

guidelines, ‘‘. . .The Exchange is not limited by

what is set forth under the heading ‘Numerical and

Other Criteria.’ Rather, it may make an appraisal of,

Continued

In its comment letter, the NYSE

asserted that Rule 500 is not related to

its pending proposal and that Rule 500

would not affect issuers that list under

the proposal any differently from issuers

listing under existing requirements. The

NYSE also claimed that, if the proposal

were adopted, the proposal were

adopted, the NYSE would continue to

have the highest listing requirements

among all domestic equities markets.

IV. Discussion

A. Introduction

After careful consideration of the

comments received, the Commission

finds that the proposed rule change is

consistent with the requirements of

Section 6(b).16 In particular, the

Commission believes the proposal is

consistent with the Section 6(b)(5)

requirements that the rules of an

exchange be designed to promote just

and equitable principles of trade, to

prevent fraudulent and manipulative

acts, and, in general, to protect investors

and the public interest; and are not

designed to permit unfair

discrimination between issuers. The

Commission also finds that the proposal

is consistent with the requirements of

Section 6(b)(8) that the rules of an

exchange not impose any burden on

competition not necessary or

appropriate in furtherance of the

purpose of the Act.

B. Background

The development and enforcement of

adequate standards governing the initial

and continued listing of securities on an

exchange is an activity of critical

importance to financial markets and the

investing public. Listing standards serve

as a means for an exchange to screen

issuers and to provide listed status only

to bona fide companies with sufficient

public float, investor base, and trading

interest to ensure that the market for a

company’s stock has the depth and

liquidity necessary to maintain fair and

orderly markets. Adequate standards are

especially important given the

expectations of investors regarding

exchange trading and the imprimatur of

listing on a particular market. Once a

security has been approved for initial

listing, maintenance criteria allow an

exchange to monitor the status and

trading characteristics of that issue to

ensure that it continues to meet the

exchange’s standards for market depth

and liquidity so that fair and orderly

markets can be maintained.

For the reasons set forth below, the

Commission believes that the proposed

rule change will provide the NYSE with

greater flexibility in determining which

equity securities warrant inclusion in its

market, without compromising the

effectiveness of the Exchange’s listing

standards, and that the standards do not

pose a burden on competition among

markets.

C. The Proposed Alternative Listing

Standards

As discussed above, the NYSE

currently requires a company to meet

rigorous standards regarding, among

other things, its investor base and its

public float before qualifying for listing.

The Commission agrees with the NYSE,

however, that there are bona fide

companies that do not meet these

measures but that nonetheless have

sufficient investor interest to ensure that

the market for the company’s stock has

the depth and liquidity appropriate for

auction market trading.

In particular, the Commission

believes that it is reasonable for the

NYSE to list companies with 500

stockholders given that such companies

must have an average monthly trading

volume of one million shares, which

amount is ten times the normal monthly

trading volume currently required by

the Exchange under one of its

stockholder distribution listing

standards for domestic equities. This

higher trading volume standard will

ensure that listed companies with a

smaller shareholder base should

nevertheless have sufficient interest to

support a liquid market.

Additionally, the Commission

believes that the proposed alternative to

the existing demonstrated earnings

power standard, which is based on net

income adjusted for the cash effects of

investing or financing cash flows, is

adequate to ensure that the NYSE lists

only bona fide issuers. First, only

companies that have a market

capitalization of at least $500 million

and revenues of at least $200 million in

their most recent fiscal year are eligible

to use the alternative net income

standard to satisfy demonstrated

earnings power. These threshold

requirements, taken together with the

actual alternative standard requiring

adjusted net income to be positive for

the last three fiscal years and not less

than $25 million in the aggregate for

such period, should ensure that such

companies are of sufficient size and

substance so as not to compromise the

reasonable expectations of investors

regarding the companies that are eligible

to trade on the NYSE. Second, the other

listing requirements including number

of stockholders and publicly held shares

as well as the increased aggregate

market value and tangible net assets

standard will apply to all listed

companies including those utilizing the

alternative demonstrated earning power

criteria. As a result of these

requirements, the Exchange’s domestic

listing standards will continue to

provide only for the listing of securities

with a sufficient investor base to

maintain fair and orderly markets and

the listing of companies that are viable,

going concerns with substantial

aggregate market value or tangible net

assets.

Third, the alternative standard to

demonstrated earning power using net

income adjusted for the cash effects of

investing or financing cash flows is

based, with certain exceptions, on FAST

Statement No. 95, which sets forth a

uniform accounting standard for

calculation of cash flows. Although the

proposal limits certain adjustments to

net income that are not included in

FASB Statement No. 95, the specific

limitations are set forth in the NYSE’s

listing criteria. Accordingly, the NYSE

can apply the standard uniformly and

companies will be able to know with

certainly whether or not they can meet

the alternative demonstrated earnings

power test based on net income (as

adjusted for the cash effects of investing

or financing cash flows).

Finally, the Commission agrees with

the NYSE’s proposal to increase the

aggregate market value and net tangible

assets requirements from $18 million to

$40 million. These requirements have

not been updated since 1984.17 This

substantial increase significantly

upgrades the NYSE’s listing criteria and

should offer further assurances that the

current amendments do not weaken the

high standards that a listing on the

NYSE has traditionally represented.

D. Maintenance Criteria

The NYSE’s proposal does not contain

separate continued listing standards for

the newly proposed initial listing

standards. Instead, the NYSE has

indicated that, in reviewing companies

for continued listing under such

standards, it would rely on its broad

authority to duelist companies set forth

in Exchange Rule 499, which states that

securities admitted to the list may be

suspended from dealings or removed

from the list at any time.18 Further, the
18652 Federal Register / Vol. 60, No. 70 / Wednesday, April 12, 1995 / Notices

and determine on an individual basis, the

suitability for continued listing of an issue in light

of all pertinent facts whenever it deems such action

appropriate, even though a security meets or fails

to meet any enumerated criteria.’’

19Letter from Robert G. Britz, Senior Vice

President, New Listings & Client Service, to Sharon

Lawson, Assistant Director, Division of Market

Regulation, SEC, dated February 28, 1995 and letter

from J. Paul Wyciskala, Managing Director,

Financial Compliance, to Sharon Lawson, Assistant

Director, Division of Market Regulation, SEC, dated

March 21, 1995.

20 In this regard, the Commission believes it is

significant that, pursuant to Rule 19c–3 under the

Act, 17 CFR 240.19c–3 (1994), NASD market

makers still will be able to trade the NYSE’s newly

listed securities.

21 In its comments, the NASD stated its belief

‘‘that expanding the NYSE listing standards without

eliminating the anticompetitive effect of Rule 500

is contrary to a free and open market and national

market system, and imposes a burden on

competition that is not otherwise justified or in

furtherance of the purposes of the Exchange Act.’’

As support for such statement, the NASD cited,

among other sections of the Act, Section

11A(1)(C)(ii), which sets forth the finding by

Congress that it is in the public interest and

appropriate for the protection of investors and the

maintenance of fair and orderly markets to assure

fair competition between exchange markets and

markets other than exchange markets. To the extent

the alternate listing standards allow the NYSE to

compete for listings of other market centers, it will

assure fair competition between exchange markets

and other markets consistent with Section 11A of

the Act.

22See Division of Market Regulation, SEC,

‘‘Market 2000, An Examination of Current Equity

Market Developments’’ (January 1994) at 30 and 31

(‘‘The standards embodied in Rule

500 * * * represent a barrier to delisting that is

too onerous, * * * Accordingly, the Division

recommends that the NYSE submit a proposed rule

change to modify the requirements of NYSE Rule

500. * * * The new standards should rely on a

determination by an issuer’s board of directors

rather than shareholder approval. For example, the

new standards could require approval by the board

of directors and a majority of the independent

directors, or it could require a review of the

delisting decision by the board’s audit

committee.’’).

23The Commission notes that the alternative

listing standards increase the classes of companies

that are eligible for listing on the NYSE based upon

objective, numerical criteria that are reasonably

related to the purposes underlying the NYSE’s

listing standards. As such, the Commission finds,

in accordance with Section 6(b)(5) of the Act, that

these standards do not discriminate unfairly

between issuers.

24See Securities Exchange Act Release No. 35123

(December 20, 1994), 59 FR 66692 (December 28,

1994) (amending Rule 19b–4 to expedite the process

by which proposed rule changes of self-regulatory

organizations are filed and become effective).

NYSE has stated that, in monitoring

companies listed under the proposed

alternative standards, companies that

subsequently fall substantially below

those standards would be considered for

relisting. In addition the NYSE also

would consider factors for continued

listing such as: trading volume; the

number of publicly held shares; the

aggregate market value of publicly-held

shares; the inability to meet current debt

obligations or adequately Finance

operations; or an abnormally low selling

price or volume of trading. The

Commission believes that the authority

in Rule 499, in addition to the NYSE’s

clarifications on continued listing under

the new standards, gives the NYSE

sufficient flexibility to adequately

monitor companies listed under the

alternative standards being adopted

herein and delist such companies where

appropriate.

Nevertheless, the NYSE has indicated

its intention to develop specific

continued listing criteria that correlate

to the alternative initial listing

standards.19 The Commission believes

this will be useful to the NYSE in

monitoring such companies to ensure

continued depth and liquidity. In

addition, in light of the increase in the

initial listing criteria for aggregate

market value of shares outstanding and

tangible net assets from $18 million to

$40 million, the Commission believes

that the Exchange should consider

updating its continued listing standards

for these criteria, which are currently set

at $8 million.

E. Burden on Competition

The NASD believes the Commission

should disapprove the NYSE’s alternate

listing standards unless the NYSE first

rescinds its Rule 500 because, in the

NASD’s view, the proposal, when

coupled with Rule 500, limits

competition for listings. The direct

effect of the NYSE’s proposal, however,

will be to increase the number of

companies eligible for NYSE listing.

Accordingly, the proposal actually will

increase competition for new listings

between the NYSE and other selfregulatory organizations. The

Commission believes that such an

increase in competition, on balance,

would benefit the securities markets.20

In addition, the NYSE’s changes are

relatively modest in scope. The NASD

has not presented any evidence to

indicate that the new requirements will

broaden significantly the pool of Nasdaq

companies that will become eligible for

an NYSE listing under the new

standards. Indeed, the NASD comment

letter states that already ‘‘most of

Nasdaq’s largest companies choose to

freely remain on Nasdaq rather than

switch to the NYSE.’’ The NASD has not

indicated how the NYSE proposal

would change this situation.

The NASD, in effect, is asking the

Commission to disapprove a procompetitive proposal because it believes

that another rule of the NYSE creates an

anticompetitive barrier to delisting from

the NYSE.21 While the Commission is

mindful of the competitive

consequences of NYSE Rule 500 and

believes those issues should be explored

further, 22 the Commission does not

believe that the current NYSE listing

standards should be frozen in place

pending such examination. As a

practical matter, the immediate effect of

this proposal will be to increase

competition for listing, which the

Commission believes is in the best

interest of the securities markets and

consistent with the Act. 23 The broader

question of whether delisting standards

should be revised is a separate matter

that should be considered

independently. Moreover, such separate

consideration is consistent with the

Commission’s commitment to expedite

the processing of rule filings whenever

possible. 24

V. Conclusion

In summary, based upon the analysis

set forth above, the Commission

believes this rule change will not

weaken the high standards for listing on

the NYSE. Further, following this

change, the Exchange’s domestic listing

standards will continue to provide only

for the listing of securities with a

sufficient investor base to maintain fair

and orderly markets. Accordingly, the

Commission believes that this rule

change adequately protects investors

and the public interest.

The Commission further believes that

these new standards will provide the

NYSE with greater flexibility in

determining which equity securities

warrant inclusion in its market. Such

flexibility will increase competition for

new listings between the NYSE and

other self-regulatory organizations. The

Commission believes that this increase

in competition will benefit the

securities markets. Accordingly, the

Commission does not believe that the

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.

Finally, the Commission declines to

condition its approval on the NYSE’s

elimination of its Rule 500. While the

Commission recognizes the potentially

anti-competitive effect of Rule 500 and

urges the NYSE to consider

modifications thereto, the Commission

believes that approval of the NYSE’s

proposal is in the best interest of, and

will actually foster competition among,

the securities markets. The Commission

believes that the benefits of such

competition should not be delayed

pending the resolution of the Rule 500

issues.
Federal Register / Vol. 60, No. 70 / Wednesday, April 12, 1995 / Notices 18653

25 15 U.S.C. 78s(b)(2) (1988).

26 17 CFR 200.30-3(a)(12) (1994).

1According to the proxy statement filed with the

Commission by applicant in connection with the

reorganization, the board of trustees considered that

combining applicant with the Acquiring Fund

could produce economies of scale which may be

reflected in reduced costs per share. In addition, the

board of trustees concluded that the reorganization

would allow applicant’s shareholders to become

affiliated with a fund with similar investment

objectives and greater net assets.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,25 that the

proposed rule change (SR–NYSE–95–

01), including Amendments Nos. 1 and

2, is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.26

[FR Doc. 95–8996 Filed 4–11–95; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–20990; 811–0071]

Commonwealth Investment Trust;

Notice of Application

April 6, 1995.

AGENCY: Securities and Exchange

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

ACTION: Notice of Application for

Deregistration under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANT: Commonwealth Investment

Trust.

RELEVANT ACT SECTION: Section 8(f).

SUMMARY OF APPLICATION: Applicant

seeks an order declaring that it has

ceased to be an investment company.

FILING DATE: The application was filed

on March 24, 1995.

HEARING OR NOTIFICATION OF HEARING: An

order granting the application will be

issued unless the SEC orders a hearing.

Interested persons may request a

hearing by writing to the SEC’s

Secretary and serving applicant with a

copy of the request, personally or by

mail. Hearing requests should be

received by the SEC by 5:30 p.m. on

May 1, 1995, and should be

accompanied by proof of service on

applicant, in the form of an affidavit or,

for lawyers, a certificate of service.

Hearing requests should state the nature

of the writer’s interest, the reason for the

request, and the issues contested.

Persons may request notification of a

hearing by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 5th

Street, N.W., Washington, D.C. 20549.

Applicant, 101 Federal Street, Boston,

Massachusetts 02110.

FOR FURTHER INFORMATION CONTACT:

Elaine M. Boggs, Staff Attorney, at (202)

942–0572, or C. David Messman, Branch

Chief, at (202) 942–0564 (Division of

Investment Management, Office of

Investment Company Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee at the SEC’s

Public Reference Branch.

Applicant’s Representations

1. Applicant is an open-end

management investment company that

was organized as a business trust under

the laws of Massachusetts. On October

29, 1940, applicant registered under the

Act as an investment company. To the

best knowledge of applicant, a

registration statement to register its

shares under the Securities Act of 1933

was initially filed on or about October

19, 1938. Applicant’s initial public

offering commenced in 1938.

2. On October 27, 1993, applicant’s

board of trustees approved an agreement

and plan of reorganization (the ‘‘Plan’’)

between applicant and Eaton Vance

Stock Fund, a registered open-end

management investment company (the

‘‘Acquiring Fund’’).1

3. On December 8, 1993, applicant

filed definitive proxy materials with the

SEC and mailed such proxy materials to

its shareholders. On December 15, 1993,

applicant’s shareholders approved the

reorganization.

4. Pursuant to the Plan, on December

20, 1993, applicant transferred all, or

substantially all, of its assets to the

Acquiring Fund in exchange for shares

of the Acquiring Fund. Immediately

thereafter, applicant distributed pro rata

to its shareholders the shares it received

from the Acquiring Fund in the

reorganization. On December 17, 1993,

applicant had 439,017.095 shares

outstanding, having an aggregate net

asset value of $8,346,241.30 and a per

share net asset value of $19.01.

5. Expenses incurred in connection

with the reorganization were

approximately $38,291 and were paid

by applicant’s investment adviser,

Invesco Management & Research, Inc.

6. There are no securityholders to

whom distributions in complete

liquidation of their interests have not

been made. Applicant has no debts or

other liabilities that remain outstanding.

Applicant is not a party to any litigation

or administrative proceeding.

7. Applicant’s legal existence under

Massachusetts law has been terminated.

8. Applicant is not now engaged, nor

does it propose to engage, in any

business activities other than those

necessary for the winding up of its

affairs.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–8926 Filed 4–11–95; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF STATE

[Public Notice 2188]

Advisory Committee to the United

States Section of the Inter-American

Tropical Tuna Commission

The Advisory Committee to the

United States Section of the InterAmerican Tropical Tuna Commission

(IATTC) will meet on April 26, 1995,

from 9:30 a.m. to 12 noon in the

Conference Room of the National

Marine Fisheries Service Science

Center, 8604 La Jolla Shores Drive, La

Jolla, California. The meeting will

discuss the 1994 fishing year, the status

of the tuna and dolphin stocks of the

eastern Pacific Ocean, and

developments affecting the fishery since

the last annual meeting of the

Commission. The meeting will be open

to the public.

The Advisory Committee will also

meet in an afternoon session on April

26, 1995, beginning at 1:30 p.m. This

session will not be open to the public

inasmuch as the discussion will involve

classified matters pertaining to the

United States negotiating position to be

taken at the Annual Meeting of the

Inter-American Tropical Tuna

Commission to be held in La Jolla,

California, June 13–15, 1995. The

members of the Advisory Committee

will examine various options for the

U.S. negotiating position at this

meeting, and these considerations must

necessarily involve review of classified

matters. Accordingly, the determination

has been made to close the afternoon

session pursuant to section 10(d) of the

Federal Advisory Committee Act, 5

U.S.C. App. 2, and 5 U.S.C. 552b(c)(1)

and (c)(9).

Requests for further information on

the meeting should be directed to Mr.

Brian S. Hallman, Deputy Director,

Office of Marine Conservation (OES/

OMC), Room 7820, U.S. Department of

State, Washington, DC 20520–7818. Mr.

Hallman can be reached by telephone

on (202) 647–2335 or by FAX (202) 736–

7350.