[Federal Register Volume 65, Number 164 (Wednesday, August 23, 2000)]
[Notices]
[Pages 51382-51384]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-21438]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43151; File No. SR-NYSE-00-35]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by New York Stock Exchange, Inc., 
Extending the Pilot Fee Structure Governing the Reimbursement of Member 
Organizations for Costs Incurred in the Transmission of Proxy and Other 
Shareholder Communication Materials

August 14, 2000.
    Pursuant to section 19(b)(1) of the Securities Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on August 11, 2000, the New York Stock Exchange, Inc. 
(``Exchange'' or ``NYSE'') 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. 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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[[Page 51383]]

I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The NYSE is proposing to extend the effectiveness of the pilot fee 
structure (``Pilot Fee Structure'') currently set forth in the Exchange 
Rule 451, ``Transmission of Proxy Material,'' and Exchange Rule 465, 
``Transmission of Interim Reports and Other Material'' (``Rules'').\3\ 
Among other things, the Rules establish guidelines for the 
reimbursement of expenses by NYSE issuers to NYSE member organizations 
for the processing of proxy materials and other issuer communications 
(collectively, ``Materials'') with respect to security holders whose 
securities are held in street name. The current pilot period regarding 
the Rules is scheduled to expire on September 1, 2000. NYSE proposes 
extending the Pilot Fee Structure through October 10, 2000.
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    \3\ The text of NYSE Rule 451 also is included at Para 402.10(A) 
of the Exchange's Listed Company Manual and the Exchange will make 
conforming changes to that paragraph.
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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 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 signficiant aspect of such 
statements.

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

1. Purpose
    Among other things, the Pilot Fee Structure lowers certain 
guidelines concerning the reimbursement of fees for the distribution of 
Materials, creates incentive fee to eliminate duplicative mailings, and 
establishes a supplemental fee for intermediaries that coordinate 
multiple nominees. \4\ The Pilot Fee Structure has been modified and 
extended several times,\5\ most recently by Commission order dated 
February 16, 2000.\6\. The present proposed rule change would extend 
the Pilot Fee Structure to October 10, 2000.
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    \4\ See Securities Exchange Act Release No. 38406 (March 14, 
1997), 62 FR 13922 (March 24, 1997). The Commission initially 
approved the Pilot Fee Structure as a one-year pilot, and designated 
May 13, 1998, as the date of expiration.
    \5\ See Securities Exchange Act Release Nos. 39672 (February 17, 
1998) 63 FR 9034 (February 23, 1998) (order extending Pilot Fee 
Structure through July 31, 1998, and lowering the rate of 
reimbursement for mailing each set of initial proxies and annual 
reports from $.55 to $.50); 40289 (July 31, 1998), 63 FR 42652 
(August 10, 1998) (order extending Pilot Fee Structure through 
October 31, 1998); 40621 (October 30, 1998), 63 FR 60036 (November 
6, 1998) (order extending Pilot Fee Structure through February 12, 
1999); 41044 (February 11, 1999), 64 FR 8422 (February 19, 1999) 
(order extending Pilot Fee Structure through March 15, 1999); 41177 
(March 16, 1999), 64 FR 14294 (March 24, 1999) (order extending 
Pilot Fee Structure through August 31, 1999); 41669 (July 29, 1999), 
64 FR 43007 (August 6, 1999) (order extending Pilot Fee Structure 
through November 1, 1999); 42086 (November 1, 1999), 64 FR 60870 
(November 8, 1999) (order extending Pilot Fee Structure through 
January 3, 2000); and 42304 (December 30, 1999), 65 FR 1212 (January 
7, 2000) (order extending Pilot Fee Structure through February 15, 
2000).
    \6\ See Securities Exchange Act Release No. 42433, 65 FR 10133, 
65 FR 10137 (February 25, 2000).
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    The Exchange believes that an extension of the Pilot Fee Structure 
will give the Commission additional time to consider the pilot program 
without a lapse in the current rules. Absent an extension of the Pilot 
Fee Structure, the fees in effect prior to the pilot program would 
return to effectiveness after September 1, 2000, creating confusion in 
the market.
2. Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b)(4) \7\ of the Act, which requires an exchange's rules 
to provide for the equitable allocation of reasonable dues, fees and 
other charges among its members and other persons using its facilities. 
In addition, the Exchange believes that the proposed rule change is 
consistent with section 6(b)(5) \8\ of the Act, which requires an 
exchange's rules to be 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.
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    \7\ 15 U.S.C. 78f(b)(4).
    \8\ 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 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

    NYSE has not solicited, and does not intend to solicit, comments on 
the proposed rule change. NYSE has not received any unsolicited 
comments from members of other interested parties.

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

    Because the foregoing proposed rule change: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) does not become operative for 30 days from the date of filing, 
or such shorter time that the Commission may designate if consistent 
with the protection of investors and the public interest, the proposed 
rule change has become effective pursuant to section 19(b)(3)(A) \9\ of 
the Act and Rule 19b-\10\ thereunder.\11\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ As required under Rule 19b-4(f)(6)(iii), the Exchange 
provided the Commission with written notice of its intent to file 
the proposed rule change at least five business days prior to the 
filing date.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. NYSE seeks to have the proposed rule 
change become operative on or before September 1, 2000 to allow the 
Pilot Fee Structure to continue in effect on an uninterrupted basis.
    The Commission, consistent with the protection of investors and the 
public interest, has determined to make the proposed rule change 
operative immediately through October 10, 2000. This extension of the 
Pilot Fee Structure will provide the Commission with additional time to 
review and evaluate the Pilot Fee Structure.
    The Commission notes that unless the current expiration date of the 
Pilot Fee Structure is extended, the reimbursement rate for proxy 
material distributed after September 1, 2000, will revert to those in 
effect prior to March 14, 1997. The Commission believes that such a 
result could be confusing and counterproductive.
    In addition, the Commission notes that the NYSE has filed a 
proposal to

[[Page 51384]]

amend the current Pilot Fee Structure.\12\ By extending the current 
Pilot Fee Structure, the Commission will be able to fully consider, and 
solicit comment from interested persons regarding, the proposed amended 
Pilot Fee Structure.
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    \12\ See File No. SR-NYSE-00-36.
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    Based on these reason, the Commission believes that it is 
consistent with the protection of investors and the public interest 
that the proposed rule change become operative on immediately through 
October 10, 2000. At any time within 60 days of the filing of the 
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.

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, N.W., Washington, D.C. 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 pay 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 
NYSE. All submissions should refer to file No. SR-NSYE-00-35 and should 
be submitted by September 13, 2000.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFT 200.30-3(a)(12).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-21438 Filed 8-22-00; 8:45 am]
BILLING CODE 8010-10-M