[Federal Register Volume 69, Number 71 (Tuesday, April 13, 2004)]
[Notices]
[Pages 19592-19593]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-8263]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49515; File No. SR-NYSE-2004-17]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by 
the New York Stock Exchange, Inc. Relating to the Listing of Income 
Deposit Securities (Sections 102.01C, 202.05 and 802.01B of the Listed 
Company Manual)

April 1, 2004.
    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 March 17, 2004, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. On March 29, 
2004, the Exchange amended the proposed rule change.\3\ The Exchange 
filed the proposed rule change pursuant to Section 19(b)(3)(A) of the 
Act \4\ and Rule 19b-4(f)(6) thereunder,\5\ which renders the proposal 
effective upon filing.\6\ The Commission is publishing this notice to 
solicit comments on the proposed rule change, as amended, from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Letter from Darla C. Stuckey, Corporate Secretary, NYSE, 
to Nancy J. Sanow, Assistant Director, Division of Market 
Regulation, Commission, dated March 26, 2004 (``Amendment No. 1''). 
In Amendment No. 1, the Exchange made certain changes to Section 7 
of the form 19b-4 and Section III of Exhibit 1 of the proposed rule 
change and confirmed that the original and continuing equity 
distribution standards set out in the Listed Company Manual Sections 
102.01A and 802.01A will be applied to units listed as income 
deposit securities.
    \4\ 15 U.S.C. 78s(b)(1).
    \5\ 17 CFR 240.19b-4.
    \6\ The NYSE asked the Commission to waive the five-day pre-
filing notice requirement and the 30-day operative delay. See Rule 
19b-4(f)(6)(iii). 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to amend the Listed Company Manual 
(``LCM'') Sections 102.01C, 202.05 and 802.01B to clarify that income 
deposit securities intended to be traded as a unit will, as a general 
matter, be listed if each of the component parts of the unit meets the 
applicable requirements for listing.

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 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
    The Exchange is considering the listing of units comprised of 
common stock and a debt security, sometimes referred to as income 
deposit securities (``IDS''). In contrast to a typical unit, an IDS 
unit can be expected to trade as a unit for an extended period of time, 
although holders can have certain rights to separate the IDS unit into 
its component parts (or to combine the components into an IDS).
    In order to provide clarity and transparency with respect to the 
listing standards applicable to IDS units, the Exchange is proposing to 
amend LCM Section 102.01C to clarify that each component of a unit must 
meet the applicable listing standards. A comparable amendment is 
proposed to LCM Section 802.01B with respect to applicable continued 
listing standards.
    Additionally, the Exchange is proposing an addition to LCM Section 
202.05 to specify publication requirements regarding any change in the 
terms of a listed unit, such as changes to the terms and conditions of 
any of the components or to the ratio of the components within the 
unit, and to specify that the issuer must provide current information 
in this regard on its website, or if it does not maintain a website, in 
its annual report to unit holders. Changes that should be publicized 
would include those resulting from a stock split or an automatic 
exchange of one or more components of the unit (e.g., as a result of a 
secondary offering of units). The issuer would be expected to provide 
public disclosure as soon as practicable regarding the nature and 
effective date of the change. For example, changes resulting from a 
stock split should be subject to prior disclosure, while changes with 
respect to original issue discount should be disclosed as soon as such 
information is available. Disclosure of this nature is appropriate to 
ensure that sufficient information regarding the attributes of IDS 
units is publicly available and readily accessible on a timely 
basis.\7\
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    \7\ The Commission notes that Amendment No. 1 also set forth the 
standards applicable to the units as a whole. See supra at footnote 
3.
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2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act,\8\ in general, and Section 6(b)(5) of the Act,\9\ in 
particular, in that it will promote just and equitable principles of 
trade; facilitate transactions in securities, remove impediments to and 
perfect the mechanisms of a free and open market and a national market 
system; and protect investors and the public interest.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 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

    Written comments on the proposed rule change were neither solicited 
nor received.

[[Page 19593]]

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

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) impose any significant burden on competition; and
    (iii) become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to Section 19(b)(3)(A) of the Act \10\ and 
Rule 19b-4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
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    The NYSE has asked the Commission to waive the five-day pre-filing 
notice requirement and the 30-day operative delay. The Commission 
believes waiving the five-day pre-filing notice requirement and the 30-
day operative delay is consistent with the protection of investors and 
the public interest. The Commission notes that it recently approved a 
similar proposal by the American Stock Exchange LLC (''Amex''), which 
the NYSE's proposal is based upon.\12\ The Amex proposal was published 
for comment and the Commission received no comments on it.\13\ Finally, 
the Commission does not believe the NYSE's proposal raises any new 
regulatory issues. For these reasons, the Commission designates the 
proposal to be effective and operative upon filing of the amended 
proposal with the Commission.\14\
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    \12\ See Securities Exchange Act Release No. 48666 (October 21, 
2003); 68 FR 61239 (October 27, 2003) (SR-Amex-2003-83).
    \13\ See id.
    \14\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the amended 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.\15\
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    \15\ Because the proposed rule change became effective on March 
29, 2004, the date on which Amendment No. 1 was filed, the 60-day 
abrogation period began on March 29, 2004.
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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. Comments may also be submitted electronically at the 
following e-mail address: [email protected]. All comment letters 
should refer to File No. SR-NYSE-2004-17. This file number should be 
included on the subject line if e-mail is used. To help the Commission 
process and review comments more efficiently, comments should be sent 
in hardcopy or by e-mail but not by both methods. 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 refer to File No. SR-NYSE-2004-17, and 
should be submitted by May 4, 2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-8263 Filed 4-12-04; 8:45 am]
BILLING CODE 8010-01-P