[Federal Register Volume 61, Number 114 (Wednesday, June 12, 1996)]
[Notices]
[Pages 29782-29783]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14812]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37279; File No. SR-PHLX-96-16]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Philadelphia Stock Exchange Relating to Listing Standards

June 5, 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 May 
20, 1996, the Philadelphia Stock Exchange, Inc. (``PHLX'' 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, pursuant to Rule 19b-4 of the Act, proposes to revise 
PHLX Rule 804(2) in order to correct a drafting error, which occurred 
when the rule was originally adopted.\1\ The text of the proposed rule 
change is as follows [new text is italicized; deleted text is 
bracketed]:
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    \1\ See Securities Exchange Act Release No. 34235 (June 17, 
1994), 59 FR 32736 (June 24, 1994) (File No. SR-PHLX-93-31) (order 
approving proposed rule change establishing new listing and 
maintenance standards).
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Alternative Criteria for Listing-Tier I

    PHLX Rule 804  No change.
    (1) No change.
    (2) At least 1,000,000 shares publicly held with at least [800 
public shareholders if the issuer has between 500,000 and 1 million 
shares publicly held, or at least] 400 public shareholders [if the 
issuer has either (i) over 1 million shares publicly held or (ii) over 
500,000 shares publicly held and average daily trading volume in excess 
of 2,000 shares per day for a six month period preceding the date of 
application].
    (3)-(7)  No change.

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 Section 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 June 1994, the Exchange adopted new listing criteria for equity 
securities under a two tier approach.\2\ Tier I securities are listed 
pursuant to Rule 803 or 804. Rule 803 is the main Tier I listing rule 
whereas Rule 804 sets forth alternative criteria geared toward research 
and development companies. Both Rule 803 and Rule 804 are based 
substantially upon the Memorandum of Understanding (``MOU'') on the 
uniform model marketplace exemption that had been approved by the 
National Association of Securities Dealers, Inc. (``NASD'') and the 
North American Securities Administrative Association, Inc. 
(``NASAA'').\3\ Rule 804 was supposed to mirror Alternative 2 of the 
MOU listing criteria, however, when it was drafted, subsection (2), 
which sets forth the public float and public shareholder requirements, 
incorrectly incorporated some of the language of the Alternative 1 
public float/shareholder requirements. To date, the Exchange has not 
listed any companies pursuant to the alternative criteria in Rule 804.
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    \2\ Id.
    \3\See Securities Act Release No. 6810 (Dec. 6, 1988) 
(publicizing the release of the MOU).
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    The proposed revision would require issuers that seek listing 
pursuant to Rule 804 to show that there are at least 1,000,000 shares 
publicly held and at least 400 public shareholders in the security. 
This rule once revised would reflect the original intent of the 
Exchange and the MOU.\4\
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    \4\ The MOU between NASAA and the NASD contained the same 
drafting error as the drafting error described herein. The MOU 
incorrectly incorporated some of the language from Tier I public 
float and public shareholder requirements into the Tier II 
requirements. In the MOU between NASAA and the Exchange on October 
12, 1994, the same error occurred.

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[[Page 29783]]

2. Statutory Basis
    The proposed rule change is consistent with Section 6 of the Act in 
general, and in particular, with Section 6(b)(5), in that it is 
designed to promote just and equitable principles of trade, to prevent 
fraudulent and manipulative acts and practices, 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, as 
well as to protect investors and the public interest by adopting 
minimum standards for prospective issuers which show that the company 
is appropriate for public trading.

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

    The PHLX does not believe that the proposed rule change will impose 
any inappropriate 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 either solicited or received.

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 longer 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, N.W., Washington, D.C. 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, N.W., 
Washington, D.C. 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-PHLX-96-16 and should be 
submitted by July 3, 1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-14812 Filed 6-11-96; 8:45 am]
BILLING CODE 8010-01-M