[Federal Register Volume 61, Number 47 (Friday, March 8, 1996)]
[Notices]
[Pages 9515-9516]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5551]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36916; File No. SR-PSE-96-06]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change by the Pacific 
Stock Exchange Incorporated Relating to Distributing Interim Reports to 
Both Registered and Beneficial Shareholders

March 4, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), 15 U.S.C. Sec. 78s(b)(1), notice is hereby given that on 
February 22, 1996, the Pacific Stock Exchange Incorporated (``PSE'' 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. On March 1, 1996, the Exchange submitted Amendment No. 1 
to the proposed rule change.\1\ The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.

    \1\ See letter from Michael D. Pierson, PSE, to Jennifer Choi, 
Division of Market Regulations, SEC, dated February 29, 1996. In 
Amendment No. 1, the Exchange replaces the term ``shall'' with 
``should'' in the text of Commentary .03 to PSE Rule 3.3(t). This 
amendment makes the PSE's proposal consistent with those of the New 
York Stock Exchange and the American Stock Exchange. See Securities 
Exchange Act Release No. 35373 (Feb. 14, 1995), 60 FR 9709 (Feb. 21, 
1995); Securities Exchange Act Release No. 36541 (Nov. 30, 1995), 60 
FR 62921 (Dec. 7, 1995). In Amendment No. 1, the Exchange also makes 
a couple of grammatical changes to Commentary .01 and Commentary .02 
to PSE Rule 3.3(t).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to amend its rules to state that 
corporations that distribute interim reports to shareholders should 
distribute such reports to both registered and beneficial shareholders. 
The text of the proposed rule change is available at the Exchange and 
the Commission.

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 III 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 Exchange's Corporate Governance and Disclosure Policies 
currently provide for the disclosure to shareholders of quarterly 
reports and interim reports.\2\ The Exchange is proposing to adopt new 
Commentary .03 to Rule 3.3(t) to provide that any listed company that 
distributes interim financial reports should distribute such reports to 
both registered and beneficial shareholders. The commentary would 
further state that the financial reports that are subject to this rule 
are those that are voluntarily distributed by the company as part of 
its shareholder relations activities, and not the quarterly financial 
reports required to be filed with the Commission pursuant to Section 
13(a) and Section 15(d) of the Act. Although the distribution of 
interim reports will continue to be voluntary, if a corporation chooses 
to distribute interim reports to shareholders, it should distribute 
them to both registered and beneficial shareholders.

    \2\ See PSE Rule 3.3(t), Commentaries .01 and .02.
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    The purpose of the proposed rule change is to ensure equal 
treatment of record and beneficial shareholders in the distribution of 
interim financial reports. The proposal is consistent with a similar 
rule of the New York Stock 

[[Page 9516]]
Exchange, which based its rule change on the findings of various 
industry groups including the American Society of Corporate Secretaries 
and the Securities Industry Association.\3\

    \3\ See Securities Exchange Act Release No. 35373 (Feb. 14, 
1995), 60 FR 9709 (Feb. 21, 1995).
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2. Statutory Basis
    The basis under the Act for the proposed rule change is the 
requirement under Section 6(b)(5) that an Exchange have rules that are 
designed to promote just and equitable principles of trade, to remove 
impediments to, and perfect the mechanism of a free and open market 
and, in general, 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. 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 Exchange. All 
submissions should refer to File No. SR-PSE-96-06 and should be 
submitted by March 29, 1996.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange, and, in 
particular, with the requirements of section 6(b).\4\ 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 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 national market system, and in general, to 
protect investors and the public.

    \4\ 15 U.S.C. Sec. 78(b).
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    Although the Commission does not require public companies to 
distribute interim reports to shareholders, the Commission believes 
that it is appropriate for the Exchange to encourage its listed 
companies to provided equal treatment of record and beneficial 
shareholders in the distribution of reports.
    The Commission finds good cause for approving the proposed rule 
change prior to the thirtieth day after the date of publication of 
notice of filing thereof in the Federal Register. The Commission 
believes that accelerated approval is appropriate given the prior 
approval of similar proposals by the NYSE and the Amex \5\ and because 
the accelerated approval will allow the Exchange to encourage equal 
distribution of interim reports to record and beneficial shareholders 
as soon as practicable.

    \5\ See supra note 1.
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    Based on the above, the Commission finds that there is good cause, 
consistent with section 6(b)(5) of the Act, to accelerate approval of 
the amended proposed rule change.
    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\6\ that the proposed rule change (SR-PSE-96-06) is approved.

    \6\ 15 U.S.C. Sec. 78s(b)(2).
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    For the Commission, by the Division of Market Regulation, pursuant 
to delegated authority.\7\

    \7\ 17 CFR 299.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-5551 Filed 3-7-96; 8:45 am]
BILLING CODE 8010-01-M