[Federal Register Volume 66, Number 194 (Friday, October 5, 2001)]
[Notices]
[Pages 51083-51084]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-24979]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44886; File No. SR-NYSE-2001-37]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the New York Stock Exchange, 
Inc. Extending the Pilot Regarding Shareholder Approval of Stock Option 
Plans Through January 11, 2002

September 28, 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 September 26, 2001, 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, II, 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-2.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange proposes to extend, until January 11, 2002, the 
effectiveness of the amendments to Sections 312.01, 312.03 and 312.04 
of the Exchange's Listed Company Manual with respect to the definition 
of a ``broadly-based'' stock option plan, which amendments were 
approved by the Commission on a pilot basis (the ``Pilot'') on June 4, 
1999.\3\ The Pilot was subsequently amended on March 30, 2001.\4\
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    \3\ Securities Exchange Act Release No. 41479, 64 FR 31667 (June 
11, 2001).
    \4\ Securities Exchange Act Release No. 44141, 66 FR 18334 
(April 6, 2001) (``2000 Extension Request'').
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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 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
    On July 13, 2000, the Exchange filed a proposed rule change seeking 
to extend the effectiveness of the Pilot until September 30, 2003.\5\ 
Following receipt of comments from interested parties and the SEC 
staff, on January 19, 2001, the Exchange amended the 2000 Extension 
Request to shorten the three-year extension request to one year and to 
amend the definition of ``broadly based'' under the Exchange's rule. 
While the 2000 Extension Request was under consideration, the 
Commission extended the Pilot to provide the Commission and the 
Exchange with additional time to review and evaluate comment 
letters.\6\ ON March 30, 2001 the Commission approved the 2000 
Extension Request on a pilot basis until September 30, 2001.\7\
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    \5\ See Securities Exchange Act Release No. 43111 (August 2, 
2000), 65 FR 49046 (August 10, 2000).
    \6\ Securities Exchange Act Releases Nos. 43329 (October 2, 
2000), 65 FR 5883 (October 2, 2000); 43647 (November 30, 2000), 65 
FR 77407 (December 11, 2000); and 44018 (February 28, 2001), 66 FR 
13821 (March 7, 2001).
    \7\ See note 4 supra.
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    The Exchange proposes to further extend the effectiveness of the 
Pilot until January 11, 2002 to provide additional time to evaluate the 
issues presented by the Pilot.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(5) of the Act,\8\ which requires, among other things, 
that an Exchange have rules 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 not received written comments on 
the proposed rule change.

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

    Because the 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 as 
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) of the Act \9\ and Rule 19b-
4(f)(6) \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 or such shorter time as designated by the Commission.
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    A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally 
does not become operative prior to 30 days after the date of filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\13\ to Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and public interest. The Exchange seeks to have 
the proposed rule change become operative on or before September 30, 
2001, in order to allow the Pilot to continue in effect on an 
uninterrupted basis.
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    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission, consistent with the protection of investors and the 
public interest, has determined to make the proposed rule change 
operative as of the date of this order through January 11, 2002. The 
extension of the Pilot will

[[Page 51084]]

provide the Commission with additional time to review and evaluate the 
Extension Proposal.
    The Commission notes that unless the Pilot is extended, the Pilot 
will expire and the provisions of Sections 312.01, 312.03, and 312.04 
of the Exchange's Listed Company Manual that were amended in the Pilot 
will revert to those in effect prior to June 4, 1999. The Commission 
believes that such a result could lead to confusion.
    The Commission recognizes that the Pilot has generated many comment 
letters from commenters that do not support the NYSE's definition of 
``broadly based'' stock option plans. The proposed rule change merely 
extends the duration of the Pilot for only a short period of time and 
does not deal with the substantive issues presented by the Pilot 
itself. The Commission believes that the Pilot should be extended 
immediately not only to prevent confusion but also to allow the 
Commission, the Exchange and other market participants to continue to 
consider the issues involved.\14\
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    \14\ The Commission notes that on December 5, 2000 the Nasdaq 
Stock Market, Inc. (``Nasdaq'') solicited comment from its members 
and investors on the NYSE Task Force's dilution standard. Nasdaq 
received approximately 275 comment letters on the NYSE dilution 
proposal, which it is currently considering.
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    Based on these reasons, the Commission believes that it is 
consistent with the protection of investors and the public interest 
that the proposed rule change become operative as of the date of this 
order through January 11, 2002. 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 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 pubic 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 
above-mentioned self-regulatory organization. All submissions should 
refer to the File No. SR-NYSE-2001-37 and should be submitted by 
October 26, 2001.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-24979 Filed 10-4-01; 8:45 am]
BILLING CODE 8010-01-M