[Federal Register Volume 66, Number 43 (Monday, March 5, 2001)]
[Notices]
[Pages 13364-13365]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-5247]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43993; File No. SR-NYSE-01-03]


Self-Regulatory Organizations: Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change by the New York 
Stock Exchange, Inc. To Amend Supplementary Material to Rules 451 and 
465 Concerning Householding

February 22, 2001.
    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 February 7, 2001, 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 and II 
below, which Items have been prepared by the Exchange. On February 14, 
2001, the NYSE submitted Amendment No. 1 to the proposed rule 
change.\3\ The Commission is publishing this notice to solicit comments 
on the proposed rule change, as amended, from interested persons.

I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Letter from Darla C. Stuckey, Assistant Secretary, NYSE, to 
Nancy J. Sanow, Assistant Director, Division of Market Regulation, 
SEC, dated February 12, 2001 (``Amendment No. 1''). In Amendment No. 
1, the Exchange corrected an error in the purpose section of the 
Form 19b-4 filing.
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    Many listed company proxy statements and annual reports are mailed 
to beneficial holders of the company's stock by brokerage firms. The 
practice of sending only one proxy statement or annual report to 
multiple beneficial holders with a single address is known as 
``householding.'' A newly effective Commission rule now permits 
householding by implied consent with certain appropriate safeguards.\4\ 
The Exchange proposes to amend its own rules to align them with the 
Commission's recent amendments.\5\ The NYSE's proposal would permit 
members to household annual reports, interim reports, proxy statements 
and other material so long as they comply with applicable Commission 
rules, including Rule 14b-1 and under the Act.\6\
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    \4\ See Securities Act Release No. 7912 (October 27, 2000), 65 
FR 65736 (November 2, 2000) (``Householding Release'').
    \5\ Id.
    \6\ 17 CFR 240.14b-1.
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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 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 III 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
    Rules of the Commission and the Exchange require member 
organizations

[[Page 13365]]

to mail to all beneficial holders the issuer's annual report and the 
issuer's proxy statement prior to a stockholders' meeting. Currently, 
Exchange rules permit member organizations to mail one copy of such 
material to multiple beneficial owners that have the same address so 
long as each beneficial owner consents thereto in writing. The practice 
of sending only one set of materials to multiple beneficial holders 
with a single address is known as ``householding.''
    The Commission recently adopted amendments to its rules to permit 
companies and intermediaries to satisfy their delivery requirements for 
proxy statements, information statements and annual reports with 
respect to two or more beneficial owners sharing the same address by 
delivering a single copy of the documents to those beneficial owners so 
long as certain conditions are met including consent.\7\ Accordingly, 
the Exchange proposes to amend its own rules to conform to the recently 
amended Commission rules. Therefore, Supplementary Material to NYSE 
Rules 451 and 465 is proposed to be amended to specify that member 
organizations may household proxy statements, annual reports, interim 
reports and other material provided they do so in compliance with the 
applicable Commission rules.
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    \7\ See note 4 supra.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b)(5) \8\ the Act, which requires, among other things, 
that the rules of an exchange 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 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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    \8\ 15 U.S.C. 78f(b)(5).
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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, 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 NYSE. All submissions should refer to File No. 
SR-NYSE-01-03 and should be submitted by March 26, 2001.

IV. Commission's Findings and Order Granting Accelerated Approval 
of Proposed Rule Change

    The Commission finds that the proposed rule change, as amended, is 
consistent with the Act and the rules and regulations thereunder 
applicable to a national securities exchange,\9\ and in particular the 
requirements of section 6(b)(5) of the Act.\10\ Specifically, the 
Commission finds that the Exchange's proposal to permit householding of 
annual reports, proxy statements, interim reports and other materials 
consistent with Commission rules promotes just and equitable of trade 
by eliminating conflicting regulatory obligations for NYSE members. The 
Commission notes that while the current NYSE rule permits householding, 
the NYSE requires its members to get consent in writing from beneficial 
owners. The Commission's recent amendments to Rule 14b-1 \11\ under the 
Act permits householding on an implied consent basis if certain 
conditions are met. Thus, as a result of this proposal, NYSE rules will 
conform to the Commission's requirements and NYSE members will be able 
to receive the benefits provided by householding to an even greater 
extent by utilizing implied consent. These benefits include reducing 
the amount of duplicative information that beneficial owners receive 
and lowering the printing and mailing costs for companies.
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    \9\ In approving this proposal, the Commission has considered 
its impact on efficiency, competition, and capital formation. 15 
U.S.C. 78c(f).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ 17 CFR 240.14b-1.
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    The Commission finds good cause to approve the proposal prior to 
the thirtieth day after the date of publication of notice of the filing 
in the Federal Register. By accelerating effectiveness of the 
Exchange's rule proposal, NYSE members will be able to utilize the new 
householding rule for the current proxy season. In addition, the 
Commission notes that it recently solicited comment from interested 
persons on its rule amendments \12\ and considered the comments 
received when adopting the final rules.\13\ Accordingly, the Commission 
believes that good cause exists, consistent with sections 6(b)(5) \14\ 
and 19(b)(2) \15\ of the Act to approve the proposed rule change on an 
accelerated basis.
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    \12\ See Securities Act Release No. 7767 (November 4, 1999), 64 
FR 62548 (November 16, 1999) (proposing release).
    \13\ See Householding Release.
    \14\ 15 U.S.C. 78f(b)(5).
    \15\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It Is Therefore Ordered, pursuant to section 19(b)(2) of the Act, 
\16\ that the amended proposed rule change (SR-NYSE-01-03) is hereby 
approved.
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    \16\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-5247 Filed 3-2-01; 8:45 am]
BILLING CODE 8010-01-M