[Federal Register Volume 63, Number 229 (Monday, November 30, 1998)]
[Notices]
[Pages 65833-65834]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-31817]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-40698; File No. SR-NYSE-98-40]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Partial Accelerated Approval to Proposed Rule Change by the 
New York Stock Exchange, Inc. Instituting a Pilot Program to Amend 
Paragraph 902.02 of the Exchange's Listed Company Manual and Requesting 
Permanent Approval of the Pilot Program

November 20, 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 November 20, 1998, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by the NYSE. The 
Commission is publishing this notice and order to solicit comments on 
the proposed rule change from interested persons and to grant 
accelerated approval to the portion of the proposed rule change 
instituting a three-month pilot program pending the Commission's review 
of the proposed rule change.
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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 Exchange proposes to implement a three-month pilot program (the 
``Pilot'') to amend Paragraph 902.02 of the Exchange's Listed Company 
Manual (the ``Manual''). In addition, the Exchange seeks permanent 
approval of the proposed amendments to Paragraph 902.02 of the Manual. 
Paragraph 902.02 of the Manual contains the schedule of current listing 
fees for companies listing securities on the Exchange.
    The text of the proposed rule change is available at the Office of 
the Secretary, NYSE 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 NYSE 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

[[Page 65834]]

in Item III below. The NYSE 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 proposed rule change amends the listed company fee schedule, 
set forth in Paragraph 902.02 of the Manual, as it applies to certain 
business combinations. Specifically, the Exchange seeks to adopt a 
reduced fee structure for mergers between an NYSE-listed company and a 
non-NYSE listed company, other than for those considered to be ``back 
door listings'' pursuant to Paragraph 703.08(E) of the Manual.
    The Exchange proposes to reduce the basic initial listing fee such 
that the fee is 25% of the applicable basic initial listing fee for the 
above specified listings that occur within 12 months of the merger. 
However, if the merger and subsequent listing occur within 12 months of 
the initial listing of the NYSE-listed company, the Exchange proposes 
to reduce the basic initial listing fee for the merged entity to the 
lesser of (a) 25% of the applicable basic initial listing fee for the 
merged entity; or (b) the full applicable basic initial listing fee for 
the merged entity less the fee already paid by the NYSE-listed company 
at the time of its initial listing.
2. Statutory Basis
    The basis under the Act for the proposed rule change is the 
requirement under Section 6(b)(4) \3\ that an exchange have rules that 
provide for the equitable allocation of reasonable dues, fees and other 
charges among its members and issuers and other persons using its 
facilities.
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    \3\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
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 neither solicited nor received written comments on 
the proposed rule change.

III. 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 at 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 NYSE. All submissions should 
refer to File No. SR-NYSE-98-40 and should be submitted by December 21, 
1998.

IV. 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.

V. Commission's Findings and Order Granting Partial 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 of the Act.\4\ More 
specifically, the Commission believes that the portion of the proposed 
rule change dealing with the three-month pilot is consistent with 
section 6(b)(4) of the Act \5\ which requires that the rules of an 
exchange assure the equitable allocation of reasonable dues, fees, and 
other charges among members, issuers, and other persons using its 
facilities.\6\ The Commission believes that the proposal may ease the 
financial burdens of merger transactions with Exchange-listed issuers, 
thus facilitating capital formation and competition among exchanges and 
other markets.
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    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(4).
    \6\ In approving the three-month pilot, the Commission has 
considered the pilot's impact on efficiency, competition, and 
capital formation. 15 U.S.C. 78c(f).
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    The Commission finds good cause for approving the three-month pilot 
prior to the thirtieth day after the date of publication of notice 
thereof in the Federal Register. This accelerated approval will permit 
Exchange-listed issuers to take advantage of the Exchange's initial 
listing fee reduction program on an expedited basis while the 
Commission undertakes a more exhaustive review of the proposal. 
Accordingly, the Commission believes that good cause exists, consistent 
with section 6(b)(5) and section 19(b)(2) of the Act, to grant 
accelerated approval to the three-month pilot.\7\ The Commission notes, 
however, that approval of the pilot should not suggest a predisposition 
regarding the ultimate approval of the proposal on a permanent basis.
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    \7\ 15 U.S.C. 78f(b)(5) and 78s(b)(2).
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    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\8\ that the proposed rule change (SR-NYSE-98-40) is approved on an 
accelerated basis until February 19, 1999.
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    \8\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-31817 Filed 11-27-98; 8:45 am]
BILLING CODE 8010-01-M