[Federal Register Volume 61, Number 167 (Tuesday, August 27, 1996)]
[Notices]
[Pages 44116-44117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21758]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37585; File No. SR-NYSE-96-25]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by New York Stock Exchange, Inc., Relating to the Listing 
Criteria for Equity-Linked Debt Securities

August 20, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on August 16, 1996, the New York Stock Exchange, Inc. filed with the 
Securities and Exchange Commission the proposed rule change as 
described in Items I and II 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The New York Stock Exchange, Inc. (``NYSE'' or ``Exchange'') is 
proposing amendments to its listing standards for Equity-Linked Debt 
Securities (``ELDS''). These listing standards are contained in Para. 
703.21 of its Listed Company Manual.

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

    (a) Purpose--ELDS are non-convertible debt securities of an issuer 
where the value of the debt is based, at least in part, on the value of 
another issuer's common stock or nonconvertible preferred stock (the 
``underlying security''). The Exchange's listing standards currently 
permit the listing of ELDS if, among other things, (i) the issuer has a 
minimum tangible net worth of $150 million and (ii) the original issue 
price of the ELDS, combined with all the issuer's other publicly-traded 
ELDS, does not exceed 25 percent of the issuer's net worth (the ``net 
worth standard'').
    The proposed rule change makes two amendments to the ELDS listing 
standards. First, the Exchange proposes to add an alternative net worth 
standard. Under the new test, a issuer with tangible net worth of at 
least $250 million would be able to issue ELDS without being subject to 
the limit that the ELDS be no more than 25 percent of the issuer's net 
worth. Issuers with a tangible net worth of at least $150 million, but 
less than $250 million, will still be subject to the 25 percent limit. 
This will provide the largest issuers with increased flexibility in 
their financing and capitalization planning.
    Second, with respect to the listing of ELDS linked to non-U.S. 
securities, the Exchange proposes to amend the definition of ``Relative 
U.S. Share Volume'' and to delete the definition of ``Relative ADR 
Volume.'' Specifically, the Exchange proposes collapsing these two 
definitions into a single definition of ``Relative U.S. Volume.'' The 
Exchange believes that this change is non-substantive and is proposed 
solely to clarify and simplify the rule.
    (b) 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 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 Exchange believes that 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.

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

    Within 35 days of the date of 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 such 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

[[Page 44117]]

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 in 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-NYSE-96-25 and 
should be submitted by September 17, 1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\3\
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    \3\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-21758 Filed 8-26-96; 8:45 am]
BILLING CODE 8010-01-M