[Federal Register Volume 65, Number 36 (Wednesday, February 23, 2000)]
[Notices]
[Pages 9024-9025]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-4220]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42427; File No. SR-Amex-99-30]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change and Amendments Thereto by the American Stock Exchange LLC 
Amending Exchange Rule 18, Withdrawal From Listing

February 15, 2000.
    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 13, 1999, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I, II, and III below, which Items have been prepared by the 
Exchange. On October 1, 1999, the Amex submitted Amendment No. 1 to the 
proposed rule change.\3\ On February 3, 2000, the Amex submitted 
Amendment No. 2 to the proposed rule change.\4\ 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.
    \3\ See Letter to Michael Walinskas, Deputy Associate Director, 
Division of Market Regulation, Commission, from Michael J. Ryan, 
Chief of Staff, Amex, dated September 24, 1999 (``Amendment No. 
1''). In Amendment No. 1, Amex proposes to amend Exchange Rule 18 
instead of rescinding the rule in its entirety, as proposed in its 
initial filing, to provide that an issuer may voluntarily withdraw a 
security from listing on the Exchange upon written notice to the 
Exchange.
    \4\ See Letter to Marla Chidsey, Attorney, Division of Market 
Regulation, Commission, from Ivonne Lugo, Assistant General Counsel, 
Amex, dated February 2, 2000 (``Amendment No. 2''). In Amendment No. 
2, Amex proposes to require the issuer to comply with all applicable 
state laws in effect in the state in which it is incorporated prior 
to filing to delist from the Amex. Amendment No. 2 also proposes to 
make conforming amendments to the Amex Company Guide Section 1010 
and 1011, conveying the requirements of the amended Exchange Rule 
18.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange proposes to amend Exchange Rule 18, Withdrawal from 
Listings. The Exchange believes that Exchange Rule 18 is inconsistent 
with the Commission's increasing emphasis on enhancing competition and 
merely represents a needless restriction imposing burdensome delays on 
an issuer's decision to delist. 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 Amex 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 Amex has prepared summaries, set forth in Sections 
A, B, and C below, of the most significant aspects of such statement.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    Exchange Rule 18 currently requires an issuer, prior to withdrawing 
a security from listing, to file with the Exchange a certified copy of 
a resolution adopted by the board of directors authorizing withdrawal 
from listing and registration and explaining the reasons for such 
withdrawal. The rule also provides that the exchange may, if it 
disagrees with the stated reasons for such withdrawal, require the 
issuer to send to all registered holders of such security a statement 
of the reasons for such application, together with facts in support 
thereof within at least fifteen (15) days prior to the filing of a 
delisting application with the Commission. These Exchange Rule 18 
requirements must be met before an application for delisting can be 
filed with the Commission.
    According to the Amex, Exchange Rule 18 has not been applied in 
many years with respect to issuers seeking to voluntarily withdraw 
their common stocks from listing on the Exchange. The Exchange believes 
Rule 18 is inconsistent with the Commission's increasing emphasis on 
enhancing competition and merely represents a needless restriction 
imposing burdensome delays on an issuer's decision to delist.
    In its Market 2000 Report,\5\ the Commission criticized the 
anticompetitive nature of New York Stock Exchange (``NYSE'') Rule 500 
and Exchange Rule 18 when it contrasted these Rules to the NASD's rules 
for Nasdaq/NMS issuers which allow an issuer to terminate its Nasdaq/
NMS designation voluntarily, upon written notice to the NASD. The 
Commission stated, ``(t)he stands embodied in Rule 500 * * * represents 
a barrier to delisting that is too onerous, and the standards embodied 
in Amex Exchange Rule 18 are too vague.'' The Commission found no 
justification for the stringent approval requirements built into NYSE 
Rule 500 and Exchange Rule 18, given the current similarities in 
standards between the NYSE and Nasdaq/NMS markets.
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    \5\ Division of Market Regulation, United States Securities and 
Exchange Commission, Market 2000--An Examination of Current Equity 
Market Developments 30-31 (January 1994).
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    In its comment letters to the Commission (January 6, 1999 and July 
7, 1999), on the NYSE's proposal to modify Rule 500, and the latest 
Commission approved modifications to NYSE Rule 500, the NASD expressed 
its commitment to eliminating barriers to competition that no longer 
benefit investors, issuers and other market participants. U.S. markets 
should compete for listings solely on their market quality and enhanced 
value-added services to shareholders and issuers. In keeping with the 
NASD's commitment, and the Commission's increasing emphasis on 
enhancing competition in the securities industry, the Exchange proposes 
amending Exchange Rule 18 and the references to the Rule in its Company 
Guide.
    The proposed amendment to Exchange Rule 18 will implement the 
Exchange's decision to eliminate obstacles and delays for issuers 
seeking to voluntarily withdraw their common stock from listing on the 
Exchange. Under new proposed Rule 18, issuers will be able to 
voluntarily withdraw a security from listing on the Exchange upon 
written notice to the Exchange, provided the issuer complies with all 
applicable state laws in effect in the state in which it is 
incorporated.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\6\ in general, and furthers the 
objectives of Section 6(b)(5),\7\ in particular, in that it is designed 
to prevent fraudulent and manipulative acts and practices; promote just 
and equitable principles of trade; remove impediments to and perfect 
the mechanism of a free and open market and a national market system; 
protect investors and the public interest; and is not designed to 
permit unfair discrimination between customers, issuers, brokers and 
dealers.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change will not impose 
any burden on competition that is not

[[Page 9025]]

necessary or appropriate in furtherance of the purpose 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 any written 
comments 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 Exchange 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, including whether the proposed rule 
change, as amended, 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 20549-0609. 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. Copies of such 
filing will also be available for inspection and copying at the 
principal office of the Amex. All submissions should refer to File No. 
SR-Amex-99-30 and should be submitted by March 15, 2000.

For the Commission by the Division of Market Regulation, pursuant to 
delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-4220 Filed 2-22-00; 8:45 am]
BILLING CODE 8010-01-M