[Federal Register Volume 62, Number 237 (Wednesday, December 10, 1997)]
[Notices]
[Pages 65112-65113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32231]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39392; File No. SR-Amex-97-38]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the American Stock Exchange, Inc. Relating to the Exchange's 
Warrant Listing Guidelines

December 3, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934,\1\ notice is hereby given that on October 22, 1997, the American 
Stock Exchange, Inc. (``Amex'' or ``Exchange'') filed with the 
Securities Exchange 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.
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    \1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The American Stock Exchange, Inc. proposes to amend its Company 
Guide to revise its warrant listing guidelines. The text of the 
proposed rule change is available at the Office of the Secretary, the 
Amex and at 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 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Section 105 of the Amex Company Guide provides that the Exchange 
will not list warrants unless the underlying common stock is listed on 
either the Amex or the New York Stock Exchange and further provides 
that the Exchange will evaluate the warrant issuer's listing 
eligibility using the same financial and distribution guidelines as are 
applied to the listing of common stock. The Exchange believes that 
those criteria are unnecessarily high when applied to the listing of 
warrants. Warrants do not represent a new type of direct claim upon a 
company's assets or otherwise expose a company to financial risk. 
Accordingly, the original listing financial guidelines for common stock 
are not relevant to the listing of warrants and the Exchange proposes 
instead to list a warrant issue so long as the Company is in good 
standing on either the Amex or the NYSE, i.e., above the continued 
listing guidelines (a similar change was previously made to the 
Exchange's guidelines with respect to the listing of debt securities).
    Similarly, the original listing distribution guidelines for common 
stocks (either 1,000,000 shares/warrant

[[Page 65113]]

with at least 400 holders or 500,000 shares/warrants with at least 800 
holders) are too high when applied to warrants since warrants are a 
derivative security and their price discovery is less dependent upon 
such a high level of liquidity. Nonetheless, the Exchange recognizes 
that a minimum level of liquidity is necessary in an auction market 
environment. The Exchange presently lists a preferred stock issued by 
an Amex or NYSE listed company provided that there are at least 100,000 
shares outstanding and believes that this would also be an appropriate 
guideline for the listing of warrants. The Exchange also recognizes 
that for a specialist to continue to provide an auction market some 
minimal level of public float is necessary. Thus, the Amex is proposing 
that a warrant issue would become subject to delisting if its public 
float fell below 50,000. This too is the same guideline as is applied 
to preferred stock issues. These changes will provide the Exchange with 
greater flexibility in listing warrant issues and the Amex believes 
that the expanded opportunity for side-by-side trading of stocks and 
warrants will prove beneficial to the shareholders of exchange listed 
companies.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \2\ of the Act in general and furthers the objectives 
of Section 6(b)(5) \3\ in particular in that it is designed to promote 
just and equitable principles of trade, remove impediments to a free 
and open market and a national market system, and protect investors and 
the public interest.
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    \2\ 15 U.S.C. 78f(b).
    \3\ 15 U.S.C. 78f(b)(5).
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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 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 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 in the 
Commission's Public Reference Room in Washington, D.C. Copies of such 
filing will also be available for inspection and copying at the 
principal office of the Amex. All submissions should refer to the file 
number in the caption above and should be submitted by December 31, 
1997.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\4\
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    \4\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-32231 Filed 12-9-97; 8:45 am]
BILLING CODE 8010-01-M