[Federal Register Volume 59, Number 3 (Wednesday, January 5, 1994)]
[Notices]
[Pages 642-643]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-144]


[[Page Unknown]]

[Federal Register: January 5, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33400; File No. SR-NYSE-93-47]

 

Self-Regulatory Organizations; Filing of Proposed Rule Change by 
the New York Stock Exchange, Inc. Relating to Listing Standards for 
Non-U.S. Companies

December 29, 1993.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on December 
16, 1993, the New York Stock Exchange, Inc. (``NYSE'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II and III below, which 
Items have been prepared by the self-regulatory organization. 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 proposed modification to NYSE policy would amend Paragraph 103 
of the NYSE Listed Company Manual (``Non-U.S. Companies'') to permit 
non-U.S. issuers to distribute summary annual reports to U.S. holders, 
under certain circumstances.

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 self-regulatory organization 
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 self-regulatory organization 
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
    The proposed modification to policy recognizes an amendment, 
adopted in 1990, to the U.K. Companies Act which permits issuers listed 
on the London Stock Exchange to provide an option to holders of their 
ordinary shares to receive a full annual report or a summary annual 
report. The Companies Act sets forth the specific financial and 
management information that must be contained in the summary reports.
    The Companies Act, as amended, also requires that shareholders who 
receive only the summary report be given the opportunity, at any time, 
to obtain the full annual report from the company and that companies 
must notify shareholders annually of this right and how the report 
might be obtained. When the program was instituted in the U.K. in 1990, 
shareholders received both reports and notice of the available option 
with respect to future reports.
    Certain U.K. issuers are now seeking permission from the NYSE to 
provide holders of listed ADRs with summary reports in place of full 
annual reports if the holders do not object. The proposed modification 
to policy is necessary to grant permission since current policy 
requires all listed companies to submit to shareholders an annual 
report with financial information as detailed in Paragraph 203.01 of 
the NYSE Listed Company Manual.
    The creation of the summary annual reports in the U.K. was prompted 
by two objectives: Potential cost savings to the company and the 
ability to provide a more easily read document to retail holders. The 
effort has been deemed successful in the U.K. since a majority of 
shareholders now receive the summary reports.
    The Exchange is proposing that the NYSE annual report requirements 
be modified to allow holders of NYSE-listed non-U.S. securities to 
receive summary annual reports if (i) this is the practice in the home 
country and (ii) certain conditions are met.
    Specifically, issuers proposing to provide summary annual reports 
to ADR holders would be required to:
    (a) provide ADR holders with an ongoing option to
    (1) Receive the full annual report on demand, and
    (2) Annually change their election (as in the U.K., U.S. ADR 
holders would initially receive both reports and notice of the 
available option with respect to future reports);
    (b) Follow the specific dictates of home country law or business 
practice with respect to the data presented;
    (c) Include a U.S. GAAP reconciliation to the extent that such 
reconciliation would be required in the full annual report.
    This proposal would be consistent with the Exchange's policies for 
non-U.S. companies which effectively allow these companies to follow 
home country practice in such areas as interim reporting and corporate 
governance. In addition, we believe the modification to policy would be 
consistent with the SEC's posture toward non-U.S. companies of being 
accommodating without compromising disclosure.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under section 6(b)(5) 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.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change 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

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from members or other interested 
parties. However, the Exchange adopted this proposed rule change, in 
part, in response to a petition from eight listed U.K. companies 
requesting that the exchange allow them to use summary annual reports.

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

    Within 35 days of the publication of this notice in the Federal 
Register or within such other period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve the proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW., 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 at the 
Commission's Public Reference Section, 450 Fifth Street, NW., 
Washington, DC 20549. 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-93-47 and should be 
submitted by January 26, 1994.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-144 Filed 1-4-94; 8:45 am]
BILLING CODE 8010-01-M