[Federal Register Volume 59, Number 70 (Tuesday, April 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8628]


[[Page Unknown]]

[Federal Register: April 12, 1994]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-33864; International Series Release No. 646; File No. 
SR-Amex-94-04]

 

Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the American Stock Exchange, Inc. Relating to Foreign Listing 
Standards

April 5, 1994.
    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 February 
23, 1994, the American Stock Exchange, Inc. (``Amex'' 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 Exchange is proposing to amend Section 110 of the Company Guide 
to allow non-U.S. issuers to provide their U.S. shareholders with 
summary annual reports under certain circumstances. The following is 
the text of the proposed rule change, with italics representing the 
language to be added:
    Section 110. Securities of Foreign Companies * * *

    (d) Disclosure--The Exchange will require the company to: (i) 
furnish to American shareholders an English language version of its 
annual financial statements and all other materials regularly 
provided to other shareholders, and (ii) publish, at least semi-
annually, an English language version of its interim financial 
statements. In addition, the Exchange will permit non-U.S. issuers 
to follow home country practices regarding the distribution of 
annual reports to shareholders, if, at a minimum, shareholders (i) 
are provided at least summary annual reports and (ii) have the 
ability, upon request, to receive a complete annual report, and the 
financial information contained in the summary annual report is 
reconciled to U.S. generally accepted accounting principles to the 
extent that such reconciliation would be required in the full annual 
report.

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 propose 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
    In 1990 the U.K. Companies Act was amended to permit issuers listed 
on the London Stock Exchange to provide holders of their ordinary 
shares with an option to receive either a full annual report or a 
summary annual report. The U.K. Companies Act sets forth the specific 
financial and management information that must be contained in the 
summary reports, and 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 amendments first became effective, shareholders 
received both reports and notice of the available option with respect 
to future reports.
    The purpose of the amendments was to provide: (1) Potential cost 
savings to issuers, and (2) a more easily read document to retail 
holders. A majority of U.K. shareholders now receive the summary 
reports, and the amendments are viewed as successful.
    Certain U.K. issuers would now like to provide U.S. holders of 
listed ADRs with summary reports in place of full annual reports if the 
holders do not object. The Commission recently approved a New York 
Stock Exchange (``NYSE'') rule change which allows non-U.S. issuers 
which are NYSE-listed to mail summary annual reports to U.S. share/ADR 
holders in lieu of the full annual report, if permitted by home country 
practice.\1\
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    \1\See Securities Exchange Act Release No. 33661, International 
Series Release No. 637 (February 23, 1994), 59 FR 10028 (March 2, 
1994).
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    The Exchange is proposing to similarly amend Section 110 of the 
Exchange's Company Guide, which is comparable to the NYSE provision 
described above. Section 110 currently allows the Exchange to consider 
the laws, customs and practices of the country where a non-U.S. issuer 
is domiciled in evaluating the listing eligibility of a company whose 
corporate structure or practices are inconsistent with specified rules 
which apply to domestic companies, but requires that a full annual 
report be provided to all U.S. share/ADR holders.
    Under the proposed amendment, a U.S. holder would initially receive 
both reports and then be provided with an ongoing option to receive 
either report.\2\ The summary report would set forth such financial and 
other information as is required by home country law and would be 
required to include a U.S. GAAP reconciliation to the same extent as 
would be required in the full annual report. The change would have no 
impact on the issuer's existing annual and semi-annual SEC reporting 
obligations.
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    \2\The Commission notes that, although the U.K. Companies Act 
requires that shareholders initially receive both reports, the 
language of the proposed Amex rule permits non-U.S. issuers to 
follow home country practices, which may not contain this 
requirement.
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    The proposed amendment is consistent with the Exchange's existing 
policies with respect to non-U.S. companies, which permits such 
companies to follow home country practice in such areas as interim 
reporting and corporate governance.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the Act 
in general and furthers the objectives of Section 6(b)(5) in particular 
in that it is designed to foster cooperation and coordination with 
persons engaged in regulating transactions in securities and to protect 
investors and the public interest.

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

    The proposed rule change will impose no burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received from Members, Participants or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

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. Sec. 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 Amex. All 
submissions should refer to File No. SR-Amex-94-04 and should be 
submitted by [insert date 21 days from date of publication].

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-8628 Filed 4-11-94; 8:45 am]
BILLING CODE 8010-01-M