[Federal Register Volume 63, Number 212 (Tuesday, November 3, 1998)]
[Notices]
[Pages 59351-59353]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29339]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-40605; File No. SR-NYSE-98-26]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 by the New 
York Stock Exchange, Inc., Relating to Delisting of Securities

October 26, 1998.
    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 October 9, 1998, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange.\3\

[[Page 59352]]

The Commission is publishing this notice to solicit comments on the 
proposed rule change, as amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ The proposal was originally submitted on August 24, 1998. 
However, the proposed rule change was amended to make changes to the 
proposed rule language and provide a greater basis for the proposed 
rule change. See Letter from James E. Buck, Senior Vice President 
and Secretary, NYSE, to Michael Walinskas, Deputy Associate 
Director, Division of Market Regulation (``Division''), Commission, 
dated October 7, 1998 (``Amendment No. 1''). Subsequently, the 
Exchange agreed to make an additional technical change to its rule 
language by replacing the phrase ``this Listed Company Manual'' with 
``the Listed Company Manual'' in Rule 499.20(6). Telephone 
conversation between N. Amy Bilbija, Counsel, NYSE, and Terri L. 
Evans, Attorney, Division, Commission on October 22, 1998. Because 
the Exchange requested immediate effectiveness under Section 
19(b)(3)(A) of the Act, 15 U.S.C. 78s(b)(3)(A), the proposed rule 
change is deemed filed as of the date of filing of Amendment No. 1.
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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 conform NYSE Rule 499, governing the 
suspension and delisting of securities, to the standards in Paragraph 
802 of the Exchange's Listed Company Manual (``Manual''). The text of 
the proposed rule change is as follows: new text is italicized and 
deleted text is bracketed:

Suspension From Dealings or Removal From List by Action of the 
Exchange

* * * * *
    Rule 499. Securities admitted to the list may be suspended from 
dealings or removed from the list at any time.

* * * Supplementary Material

    .10 No change.
* * * * *

.20 NUMERICAL AND OTHER CRITERIA.--

* * * * *

The Exchange would normally give consideration to
 suspending or removing from the list a security of a
 company when:
1. [Number of shareholders is less than:] Number of      400; or
 total stockholders is less than.
Number of total stockholders is less than [Holders of    1,200 and
 100 shares or more (or of a unit of trading if less
 than 100 shares)].
  Average monthly trading volume (for most recent 12     100,000 shares.
months) is less than
  The number of beneficial holders of stock held in the name of NYSE member organizations will be considered in
addition to holders of record.
2. Number of publicly-held shares* is less than........  600,000**
  *Shares held by directors, officers, or their immediate families and other concentrated holdings of 10% or
more are excluded in calculating the number of publicly-held shares.
  **If the unit of trading is less than 100 shares, the requirement relating to the number of shares publicly
held shall be reduced proportionately.
3. Aggregate market value of publicly-held shares,*      $8,000,000
 subject to adjustment** depending on market conditions
 is less than.
[, within the following limits
    Maximum............................................  $5,000,000
    Minimum............................................  $2,500,000]
*                  *                  *                  *                  *                  *
                                                        *
4. Aggregate market value of shares outstanding          $12,000,000 [$8,000,000] and
 (excluding treasury stock) is less than.
Average net income after taxes for past 3 years is less  $600,000
 than.
5. Net tangible assets available to common stock are     $12,000,000 [$8,000,000] and
 less than.
Average net income after taxes for past 3 years is less  $600,000
 than.
6. For companies that, on listing, demonstrated earning  $25,000,000
 power by meeting the listing standards requiring
 minimum levels of adjusted net income, and for
 companies that are currently valued on a ``cash flow''
 basis, as described in Para. 102.01 of the Listed
 Company Manual: Aggregate market value of shares
 outstanding (excluding treasury stock) is less than.
And average adjusted net income for past 3 years is      $6,500,000
 less than.

{Renumber existing paragraphs 6 through 19 as 7 through 20, 
respectively.}
    .30-.50    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 Exchange 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 Exchange 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 File No. SR-NYSE-96-07 (the ``1996 Filing'') the NYSE proposed, 
and the Commission approved, changes to Paragraph 802 of the Manual to 
add a new continued listing standard for companies that list pursuant 
to the Exchange's adjusted net income standard in Paragraph 102.01 of 
the Manual, or that are currently valued on a cash flow basis.\4\ The 
1996 Filing also raised certain other NYSE continued listing standards. 
Specifically, the 1996 Filing added new delisting criteria for ``cash 
flow'' companies, requiring that such companies have average adjusted 
net income for the most recent three years of at least $6.5 million and 
an aggregate market value of the company's shares of at least $25 
million. That filing also: raised the continued listing criteria to $8 
million in aggregate market value of publicly-held stock (from $5 
million); raised the market value and net tangible asset tests, when 
coupled with an earnings test, to $12 million (from $8 million); and 
replaced the test that a company have at least 1,200 holders of at 
least 100 shares with a new continued listing test that a company have 
at least 1,200 total holders coupled with an average monthly trading 
volume of at least 100,000 shares for the most recent 12 months. In 
addition, the 1996 Filing added a stand-alone continued listing test 
that a company have a minimum of 400 total stockholders regardless of 
its trading volume.
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    \4\ See Exchange Act Release No. 37307 (June 12, 1996); 
Amendment No. 1, supra note 3.

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[[Page 59353]]

Those standards currently are in effect.\5\ The purpose of this 
proposed rule change, as amended, is merely to conform Rule 499 to the 
standards in effect as set forth in the Manual.\6\
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    \5\ See Amendment No. 1, supra note 3.
    \6\ Currently pending before the Commission is a rule filing 
proposing additional changes to, among other things, the Exchange's 
continued listing standards, including Rule 499. See File No. SR-
NYSE-98-21. If approved by the Commission, those standards would 
supersede the standards contained in this filing.
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2. Statutory Basis
    The Proposed rule change is consistent with Section 6(b)(5) of the 
Act,\7\ because it is designed to prevent fraudulent and manipulative 
acts and practices, to promote just and equitable principles of trade, 
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.
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    \7\ 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 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 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

    The proposed rule change is concerned solely with the 
administration of the Exchange and therefore, has become effective 
pursuant to Section 19(b)(3) of the Act \8\ and Rule 19b-4(e)(3) 
thereunder.\9\ At any time within 60 days of the filing of such 
proposed rule change, the Commission may summarily abrogate such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.
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    \8\ 15 U.S.C. 78s(b)(3).
    \9\ 17 CFR 240.19b-4(e)(3).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. 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. 552, will be available for inspection and copying in the 
Commission's Public Reference Room in Washington, DC. Copies of such 
filing will also be available for inspection and copying at the 
principal office of the NYSE.
    All submissions should refer to File No. SR-NYSE-98-26 and should 
be submitted by November 24, 1998.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-29339 Filed 11-2-98; 8:45 am]
BILLING CODE 8010-01-M