[Federal Register Volume 69, Number 119 (Tuesday, June 22, 2004)]
[Proposed Rules]
[Pages 34860-34876]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-13965]



[[Page 34859]]

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Part III





Securities and Exchange Commission





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17 CFR Parts 232, 240, and 249



Removal From Listing and Registration of Securities Pursuant to Section 
12(d) of the Securities Exchange Act of 1934; Proposed Rule

  Federal Register / Vol. 69, No. 119 / Tuesday, June 22, 2004 / 
Proposed Rules  

[[Page 34860]]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 232, 240, and 249

[Release No. 34-49858; File No. S7-25-04]
RIN 3235-AJ04


Removal From Listing and Registration of Securities Pursuant to 
Section 12(d) of the Securities Exchange Act of 1934

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule.

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SUMMARY: The Securities and Exchange Commission (``Commission'') is 
proposing to streamline the procedures for removing from listing, and/
or withdrawing from registration, securities under Section 12(b) of the 
Securities Exchange Act of 1934 (``Exchange Act''). Specifically, the 
Commission is proposing amendments to its rules and Form 25 so that the 
Commission would no longer issue an order to remove a security from 
listing and/or registration on a national securities exchange. Instead, 
all issuers and national securities exchanges seeking to delist and 
deregister a security in accordance with the rules of an exchange and 
the Commission would file a Form 25 with the Commission. The Commission 
is also proposing to require exchanges to file the revised Form 25 as 
notice to the Commission under Section 19(d) of the Exchange Act. In 
addition, the Commission is proposing to require mandatory electronic 
filing of the revised Form 25. Finally, the Commission is proposing to 
exempt options and security futures from Section 12(d) of the Exchange 
Act. The proposed amendments would reduce the regulatory burdens on 
exchanges and issuers, and make more information on delisting and 
deregistration publicly available on one central database for the 
convenience of investors and other members of the public.

DATES: Comments should be submitted on or before July 22, 2004.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/proposed.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number S7-25-04 on the subject line; or
     Use the Federal eRulemaking Portal (http://www.regulations.gov). Follow the instructions for submitting comments.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.

All submissions should refer to File Number S7-25-04. This file number 
should be included on the subject line if e-mail is used. To help us 
process and review your comments more efficiently, please use only one 
method. The Commission will post all comments on the Commission's 
Internet Web site (http://www.sec.gov/rules/proposed.shtml). Comments 
are also available for public inspection and copying in the 
Commission's Public Reference Room, 450 Fifth Street, NW., Washington, 
DC 20549. All comments received will be posted without change; we do 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly.

FOR FURTHER INFORMATION CONTACT: Sharon Lawson, Senior Special Counsel, 
at (202) 942-0182, Susie Cho, Special Counsel, at (202) 942-0748, Lisa 
Jones, Special Counsel, at (202) 942-0063, and Ian Patel, Attorney, at 
(202) 942-0089, Division of Market Regulation; and Robert Plesnarski, 
Deputy Chief Counsel, at (202) 942-2900, Division of Corporation 
Finance; at the Securities and Exchange Commission, 450 Fifth Street, 
NW., Washington DC 20549.

SUPPLEMENTARY INFORMATION: The Commission is proposing to amend Rule 
101 of Regulation S-T, 17 CFR 232.101; and Rule 12d2-2, 17 CFR 
240.12d2-2, Form 25, 17 CFR Part 249.25, and Rule 19d-1, 17 CFR 
240.19d-1 under the Exchange Act.

I. Background
II. Need for Proposed Changes to Rule 12d2-2 and Form 25
III. Discussion
    A. Proposed Changes to Rule 12d2-2
    1. Exchange-Initiated Delisting and/or Withdrawal From Section 
12(b) Registration
    2. Issuer Voluntary Withdrawal From Listing and Section 12(b) 
Registration
    3. Effectiveness of Delisting and Withdrawal of Registration 
Under Section 12(b) Upon Filing the Form 25
    4. Delisting and/or Withdrawal From Section 12(b) Registration 
Pursuant to Certain Corporate Actions
    5. Deletions of Certain Provisions in Current Rule 12d2-2
    B. Proposed Changes to Form 25
    C. Filing of Form 25 To Serve as Notice Pursuant to Section 
19(d)
    D. Proposed Exemption of Options and Security Futures From 
Section 12(d)
    E. General Request for Comment
IV. Paperwork Reduction Act
V. Costs and Benefits of Proposed Amendments to Rule 12d2-2 and Form 
25
    A. Expected Benefits
    B. Expected Costs
VI. Regulatory Flexibility Act Certification
VII. Small Business Regulatory Enforcement Fairness Act
VIII. Consideration of Impact on the Economy, Burden on Competition, 
and Promotion of Efficiency, Competition, and Capital Formation
IX. Statutory Authority and Text of Proposed Rules

I. Background

    Section 12(a) of the Exchange Act \1\ makes it unlawful for any 
member, broker, or dealer to effect any transaction in any security 
(other than an exempted security) on a national securities exchange 
unless the security is registered on that exchange in accordance with 
the provisions of the Exchange Act and the rules thereunder. Section 
12(d) of the Exchange Act \2\ provides that a security registered with 
a national securities exchange may be withdrawn or stricken from 
listing and registration on an exchange in accordance with the rules of 
the exchange, and upon such terms as the Commission may deem necessary, 
upon application by the issuer or the exchange to the Commission.\3\
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    \1\ 15 U.S.C. 78l(a).
    \2\ 15 U.S.C. 78l(d).
    \3\ The Commission views a security's withdrawal to be the same 
as a security's termination of registration.
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    Rule 12d2-2 \4\ and Form 25 \5\ under the Exchange Act set forth 
the conditions and procedures under which a security may be delisted 
from a national securities exchange and withdrawn from registration 
under Section 12(b) of the Exchange Act. First, the Rule requires an 
exchange to file an application on Form 25 with the Commission as 
notification of the removal from listing and registration of a security 
where the entire security class is matured, redeemed, retired, or 
extinguished by operation of law.\6\

[[Page 34861]]

    Second, an exchange may strike a security from listing and 
registration under Rule 12d2-2, if: (1) trading in such security has 
been terminated pursuant to a rule of such exchange requiring such 
termination whenever the security is admitted to trading on another 
exchange; and (2) listing and registration of such security has become 
effective on such other exchange.\7\
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    \4\ 17 CFR 240.12d2-2. See Securities Exchange Act Release No. 
98 (February 12, 1935) (adopting Rule JD2, the predecessor to Rule 
12d2-2). Rule 12d2-2 was most recently amended in 1963. See 
Securities Exchange Act Release No. 7011 (February 5, 1963).
    \5\ 17 CFR 249.25. See Securities Exchange Act Release No. 4706 
(April 16, 1952).
    \6\ 17 CFR 240.12d2-2(a)(1)-(a)(4). The Form 25 provides the 
Commission with the name of the security to be removed from listing 
and registration, the effective date, which must be at least 10 days 
from the date the Form is filed with the Commission, and the date 
and type of event predicating the delisting and deregistration. 
However, where the security is being delisted pursuant to Rule 12d2-
2(a)(3), because the instruments representing the securities 
comprising the entire class have come to evidence, by operation of 
law or otherwise, other securities in substitution therefor, and a 
successor security is going to be admitted under the temporary 
exemption provided for by Rule 12a-5, 17 CFR 240.12a-5, the 
effective date of the Form 25 can only be on or after the date that 
the successor security has been removed from its exempt status. 17 
CFR 240.12d2-2(a)(1)-(a)(4).
    \7\ 17 CFR 240.12d2-2(b).
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    Third, an exchange may file a written application with the 
Commission to delist and deregister securities that have fallen below 
the exchange's listing standards.\8\ The Rule requires the Commission 
to grant the application unless the Commission, by written notice to 
the exchange, postpones the effective date for a period of not more 
than 60 days. The Commission may also order a hearing on the 
application to determine whether the exchange's application is in 
accordance with the exchange's rules or what terms the Commission 
should impose for the protection of investors. The Commission's 
Division of Market Regulation may approve delisting applications by 
delegated authority.\9\ Any person aggrieved by an action made by 
delegated authority may seek Commission review of the action.\10\ 
Thereafter, an aggrieved party may seek review in the U.S. Court of 
Appeals.\11\
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    \8\ 17 CFR 240.12d2-2(c).
    \9\ 17 CFR 200.30-3(a)(1).
    \10\ 17 CFR 201.430(a).
    \11\ 15 U.S.C. 78y.
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    Fourth, an issuer may file a written application under Rule 12d2-2 
with the Commission to voluntarily withdraw its security from listing 
on an exchange and registration under Section 12(b) in accordance with 
the rules of such exchange. The Commission publishes the issuer's 
application in the Federal Register for comment, and any interested 
person may submit to the Commission in writing all facts bearing upon 
whether the application to withdraw the security from listing and 
registration has been made in accordance with the rules of the exchange 
and what terms should be imposed by the Commission for the protection 
of investors. Prior to issuing an order, the Commission may also order 
a hearing on the matter and can impose such terms as necessary for the 
protection of investors.\12\ After expiration of the comment period, 
the Commission, pursuant to delegated authority, issues an order based 
on the application and any comments.\13\ As is the process with all 
decisions of the Commission made pursuant to delegated authority, an 
aggrieved party may petition the Commission for review of the delisting 
order and, thereafter, may seek review of the order in the U.S. Court 
of Appeals.\14\
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    \12\ 15 U.S.C. 78l; 17 CFR 240.12d2-2(d).
    \13\ 17 CFR 240. 12d2-2(d). See supra note.
    \14\ 15 U.S.C. 78y.
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    Finally, the Rule provides that within 30 days after the 
publication of any rule or regulation which substantially alters or 
adds to the obligations, or detracts from the rights, of an issuer of a 
security registered pursuant to application under Section 12(b) or (c) 
of the Exchange Act, or of its officers, directors, or security 
holders, or of persons soliciting or giving any proxy or consent or 
authorization with respect to such security, the issuer may file with 
the Commission a request that such registration shall expire.\15\ The 
issuer shall accompany such request with a written explanation of the 
reasons why the publication of such rule or regulation leads the issuer 
to make such request. Such registration shall expire immediately upon 
receipt of such request or immediately before such rule or regulation 
becomes effective, whichever date is later.
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    \15\ 17 CFR 240.12d2-2(f).
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II. Need for Proposed Changes to Rule 12d2-2 and Form 25

    Rule 12d2-2 under the Exchange Act was adopted at a time when 
delisting from an exchange had broad ramifications for shareholders, 
because of the lack of alternative markets. Indeed, early on, many 
exchange delistings were only approved after a hearing before the 
Commission.\16\
    Today, the delisting process has been delegated to the Commission's 
Division of Market Regulation, which approves delisting applications 
pursuant to its delegated authority.\17\ While delisting can still have 
a major impact on an issuer and its shareholders, under the current 
market structure, delisting on one market does not necessarily mean 
that shareholders would be unable to trade an issuer's securities in 
another market environment.
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    \16\ See e.g., Securities Exchange Act Release No. 1032 (January 
25, 1937); Securities Exchange Act Release No. 1549 (January 25, 
1938); Securities Exchange Act Release No. 1563 (February 3, 1938); 
Securities Exchange Act Release No. 3446 (June 12, 1943); and 
Securities Exchange Act Release No. 3519 (December 10, 1943).
    \17\ See e.g., Securities Exchange Act Release No. 48422 (August 
29, 2003); Securities Exchange Act Release No. 48297 (August 7, 
2003); and Securities Exchange Act Release No. 48291 (August 5, 
2003).
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    In the past several years, the number of delisting applications has 
been significant, placing burdens on exchanges and issuers. In 2002, 
there were a total of 862 delistings, with the Commission receiving 474 
Forms 25, 266 delisting applications from exchanges, and 62 voluntary 
delisting applications from issuers. In 2003, the Commission received a 
total of 799 delistings, which included 547 Forms 25, 190 delisting 
applications from exchanges, and 57 voluntary delisting applications 
from issuers. Although Rule 12d2-2 does not provide any procedures for 
persons to request a hearing on an exchange's delisting application or 
issuer's withdrawal application, the Commission has the discretion to 
order a hearing to determine whether the application to strike the 
security from listing and registration has been made in accordance with 
the rules of the exchange, or what terms should be imposed by the 
Commission for the protection of investors.\18\ In addition, Rule 12d2-
2(d) states that interested persons may submit written comments on an 
issuer's withdrawal application. However, the Commission rarely 
receives comments on issuer withdrawal applications. As noted above, 
the Commission, by delegated authority, approves the delisting 
applications that have been filed by exchanges and issuers.
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    \18\ 15 U.S.C. 78l(d); 17 CFR 240.12d2-2(c) and (d).
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    In addition to paperwork burdens on exchanges and issuers, the 
delisting process is decentralized and confusing to members of the 
public who seek information on the registration and deregistration of a 
security. For instance, an issuer who seeks to register a class of its 
securities under Section 12(b) of the Exchange Act, generally files a 
Form 8-A \19\ on the Commission's Electronic Data Gathering, Analysis, 
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[[Page 34862]]

Retrieval (``EDGAR'') system.\20\ At present, no further information 
about changes to a security's Section 12(b) registration status is 
required to be filed on EDGAR.\21\ Thus, while a search of current 
issuers on EDGAR may show what looks like an effective Form 8-A 
registration statement indicating that a class of securities currently 
is registered under Section 12, the Commission may have issued an order 
approving the delisting and deregistration of the security. However, 
the delisting order, though publicly available, is not available on 
EDGAR.
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    \19\ Form 8-A may be used for registration pursuant to Exchange 
Act Section 12(b) or 12(g) of any class of securities of any issuer 
which is required to file reports pursuant to Section 13 or 15(d) of 
the Exchange Act or pursuant to an order exempting the exchange on 
which the issuer has securities listed from registration as a 
national securities exchange. Small business issuers may use Form 
10-SB to register a class of securities under Section 12(b) or 
12(g). 17 CFR 249.210b. Form 10 is the general form used for 
registration pursuant to Section 12(b) or 12(g) by an issuer 
ineligible to use Form 8-A or 10-SB. 17 CFR 249.210. Foreign private 
issuers may use Form 20F to register a class of securities under 
Section 12(b) or 12(g). 17 CFR 249.220f.
    \20\ EDGAR is the electronic data gathering, analysis and 
retrieval system of the Commission that enables registered companies 
and other persons to file their securities documents with the 
Commission in an electronic format.
    \21\ The Commission notes that currently the filing of Form 25 
on EDGAR is voluntary and not required. See infra note and 
accompanying text.
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    The exchange delisting process differs from the procedures 
applicable to the delisting of securities from The Nasdaq Stock Market, 
Inc. (``Nasdaq''). Section 12(d) of the Exchange Act does not apply to 
the National Association of Securities Dealers, Inc. (``NASD''), 
because the NASD is not a registered national securities exchange. 
Instead, the NASD delists securities solely pursuant to its rules that 
have been approved under Section 19(b) of the Exchange Act.\22\ After 
such a security has been delisted, the NASD files the notice of its 
determination to the Commission pursuant to Section 19(d) of the 
Exchange Act \23\ and Rule 19d-1 under the Exchange Act.\24\
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    \22\ 15 U.S.C. 78s(b).
    \23\ 15 U.S.C. 78s(d).
    \24\ 17 CFR 240.19d-1. Section 19(d) of the Act, 15 U.S.C. 
78s(d), and Rule 19d-1 thereunder, 17 CFR 240.19d-1, provide that a 
self-regulatory organization (``SRO'') shall file with the 
Commission a notice of, among other things, any final disciplinary 
actions, denials, bars, or limitations respecting membership, 
association, participation, or access to services.
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    A delisting determination by the NASD is reviewable upon appeal to 
the Commission.\25\ Under Rule 420(c) of the Commission's Rules of 
Practice, filing an application for review with the Commission shall 
not operate as a stay of the NASD's delisting determination, unless the 
Commission orders a stay pursuant to a motion of the applicant or on 
the Commission's own motion.\26\ The Commission's review of the 
delisting determination proceeds under Section 19(f) of the Exchange 
Act.\27\ In general, on review of the NASD's action, the Commission 
determines whether the specific grounds on which the action is based 
exist in fact, whether such action is in accordance with applicable 
NASD rules, and whether those rules are, and were applied, consistent 
with the purpose of the federal securities laws.\28\ Moreover, the 
Commission has stated that the NASD's primary consideration in 
determining whether to remove a security must be the interests of 
prospective investors.\29\ An issuer may voluntarily terminate its 
listing upon written notice to Nasdaq.\30\ An issuer that has been 
delisted by the NASD may be able to, but is not required to, terminate 
its registration under Section 12(g) of the Exchange Act \31\ by filing 
Form 15 with the Commission.\32\ This filing also immediately suspends 
the issuer's duty to file reports under Sections 13\33\ and 15(d)\34\ 
of the Exchange Act.\35\
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    \25\ Under Section 19(d)(2), any action for which an SRO is 
required to file notice under Section 19(d)(1) is subject to review 
by the appropriate regulatory agency, on its own motion, or upon 
application by any person aggrieved thereby.
    \26\ 17 CFR 201.420(c).
    \27\ 15 U.S.C. 78s(f).
    \28\ See e.g., Prairie Pacific Energy Corp., Securities Exchange 
Act Release No. 37919A (November 6, 1996).
    \29\ See DBH Capital Group, Inc., Securities Exchange Act 
Release No. 37069 (April 5, 1996).
    \30\ See NASD Rule 4480(b).
    \31\ 15 U.S.C. 78l(g).
    \32\ Note, however, that upon removal from Nasdaq, an issuer is 
not required to file a Form 15. If, for example, it wishes to be 
quoted on the OTC Bulletin Board, it likely would remain registered 
under Section 12(g). NASD Rule 6510 requires an issuer to be 
``required to file reports pursuant to Sections 13 or 15(d) of the 
Exchange Act'' as a condition to being eligible to be quoted on the 
OTC Bulletin Board. An issuer subject solely to reporting 
requirements under Section 15(d) may have its reporting requirement 
automatically suspended under Section 15(d), notwithstanding the 
issuer's continued voluntary filing of reports, and therefore not be 
eligible to be quoted on the OTC Bulletin Board. See 15 U.S.C. 
78o(d). Therefore, upon removal from Nasdaq, there is no assurance 
that any public notice is made available through any filing with the 
Commission.
    \33\ 15 U.S.C. 78m.
    \34\ 15 U.S.C. 78o(d).
    \35\ The duty to file reports pursuant to Section 15(d) of the 
Exchange Act is automatically suspended for any fiscal year except 
the first fiscal year if, at the beginning of the fiscal year, the 
securities of each class to which the registration statement relates 
are held of record by less than three hundred persons. 15 U.S.C. 
78o(d). Such suspension occurs automatically pursuant to the 
statute, and therefore is not dependent on the filing of a Form 15. 
However, pursuant to Rule 12h-3 under the Exchange Act, an issuer's 
duty to report under Section 15(d) may be immediately suspended by 
filing of a Form 15 if at that time (e.g., during the fiscal year 
the issuer has less than 300 security holders) the issuer meets the 
requirements of that rule. 17 CFR 240.12h-3.
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III. Discussion

    The Commission proposes to amend Rule 12d2-2, Rule 19d-1, and Form 
25 under the Exchange Act, and Rule 101 \36\ of Regulation S-T. Under 
the proposal, exchanges and issuers would follow the rules of the 
applicable national securities exchange regarding the delisting of 
securities, after which the exchange or issuer would file the Form 25 
with the Commission to remove the security from listing and/or withdraw 
it from registration under Section 12(b) of the Exchange Act and Rule 
12d2-2 thereunder.\37\ In addition, the Commission is proposing to 
exempt standardized options and security futures from the delisting and 
withdrawal from registration procedures set forth in Section 12(d) of 
the Exchange Act and Rule 12d2-2. Finally, under the proposal, revised 
Form 25 would provide notice to the Commission under Section 19(d)(1) 
and Rule 19d-1 under the Exchange Act of a denial of access to services 
of the Exchange.\38\
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    \36\ 17 CFR 232.101.
    \37\ See infra notes 67 through 77 and accompanying text for a 
discussion on the effectiveness of delisting and/or withdrawal of 
registration under Section 12(b) upon the filing of the revised Form 
25.
    \38\ 15 U.S.C. 78s(d)(1); 17 CFR 240.19d-1.
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    The proposed amendments would, in general, reduce the regulatory 
burdens on exchanges and issuers that exist under the current 
regulatory process. The proposal would also make more information on 
delisting and deregistration publicly available on one central 
database, EDGAR, for the convenience of investors and other members of 
the public.\39\ The changes being proposed for delisting exchange-
listed securities, while not identical, would make the procedure 
similar to that in place today for delisting securities approved for 
inclusion on Nasdaq. The Commission believes that the proposal would 
make the delisting process for exchange-listed securities more 
transparent and efficient, and that the proposal's requirements are 
necessary for the protection of investors. The Commission also believes 
that the proposal would reduce uncertainty to issuers, exchanges, and 
the public as to the timing and status of a security because delisting 
and deregistration would be accomplished by the electronic filing of 
revised Form 25, instead of by Commission order.\40\
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    \39\ If, however, an issuer continues to be registered under 
Section 12(g) of the Exchange Act after no longer listing on an 
exchange, an issuer would not file a Form 15 and therefore a Form 15 
would not be available on EDGAR.
    \40\ While the delisting will be effective 10 days after filing 
Form 25, the deregistration will occur 90 days after the filing of 
the Form, with limited exceptions to this as discussed below. See 
infra notes 67-77 and accompanying text.

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[[Page 34863]]

A. Proposed Changes to Rule 12d2-2

1. Exchange-Initiated Delisting and/or Withdrawal From Section 12(b) 
Registration
    An involuntary delisting is where the issuer falls below, or has 
violated, exchange listing standards, and is initiated by the exchange 
rather than the issuer. For an exchange-initiated delisting, current 
Rule 12d2-2 requires an exchange to file an application with the 
Commission to delist and deregister an issuer's security. The security 
is not delisted until the Commission issues an order granting the 
application.\41\ The Commission is proposing to permit an exchange to 
delist and/or withdraw from registration a security, in accordance with 
its rules, by filing an application on Form 25. The delisting of the 
security would be effective 10 days after Form 25 is filed with the 
Commission. The withdrawal from registration would occur 90 days after 
the filing of the Form.\42\
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    \41\ See supra notes 8-11 and accompanying text.
    \42\ See infra notes 67 through 77 and accompanying text.
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    Because the Commission is proposing that exchanges may delist and/
or withdraw from Section 12(b) registration a security by filing a Form 
25, rather than by Commission order, it is important for the exchange 
delisting and/or withdrawal process to be fair. Accordingly, the 
Commission is proposing that Rule 12d2-2 provide that the rules of the 
exchange \43\ require the following: (1) Notice to the issuer of the 
exchange's decision to delist its securities; (2) an opportunity for 
appeal to the national securities exchange's board of directors, or to 
a committee designated by the board; and (3) public notice of the 
exchange's final determination to delist the security, via a press 
release and posting on the exchange's Web site no fewer than 10 days 
before the delisting becomes effective.\44\ Proposed Rule 12d2-2 also 
provides that public notice must remain posted on an exchange's Web 
site until the delisting is effective. It is the Commission's 
understanding that, among the seven national securities exchanges that 
trade stocks,\45\ only two have not set forth in their rules specific 
procedures regarding notice to the issuer of the exchange's decision to 
delist its securities.\46\
    The first two proposed requirements for exchange rules are 
consistent with the requirements of Sections 6(b)(7) and 6(d)(2) of the 
Exchange Act.\47\ Section 6(b)(7) requires that the rules of an 
exchange provide, among other things, a fair procedure for the 
prohibition or limitation by the exchange of any person with respect to 
access to services offered by the exchange.\48\ Moreover, the 
Commission notes that exchanges are already required under Section 
6(d)(2) to notify the issuer of, and give the issuer an opportunity to 
be heard upon, the specific grounds for delisting and withdrawal from 
registration and keep a record.\49\ Further, such determination by the 
exchange must be supported by a statement setting forth the specific 
grounds on which the delisting and withdrawal from registration is 
based.\50\ The exchanges' rules are currently required to comply with 
this Exchange Act provision. While the proposed amendments do not 
require exchanges to adopt new rules to comply with the requirements of 
the Exchange Act, to the extent that an exchange's rules do not 
currently comply with these statutory requirements, the exchange would 
have to amend its rules.
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    \43\ Any change or addition to an exchange's rules must be filed 
with the Commission pursuant to Section 19(b) of the Exchange Act. 
15 U.S.C. 78s(b).
    \44\ Proposed Rule 12d2-2(b). The Commission also notes that 
Rule 17a-1(b) would require the exchange to keep a copy of all 
documents made or received by it in the course of its business and 
in the conduct of its self-regulatory activity for a period of not 
less than five years. This would include retention of material in 
the course of a delisting. 17 CFR 240.17a-1.
    \45\ These national securities exchanges include: American Stock 
Exchange LLC (``Amex''); Boston Stock Exchange, Inc. (``BSE''); 
Chicago Stock Exchange, Inc. (``CHX''); National Stock Exchange, 
Inc. (``NSX''); Pacific Exchange Inc. (``PCX''); Philadelphia Stock 
Exchange, Inc. (``Phlx''); and New York Stock Exchange, Inc. 
(``NYSE'').
    \46\ See Chapter XXVII, Section 1, of the BSE Rules; NSX By-
laws, Article 4, Section 3.1, which only contain general statements 
on the ability of the BSE and NSX to delist securities listed on 
their respective markets. If the changes proposed herein are 
ultimately adopted, the BSE and NSX would have to submit rule 
proposals under Section 19(b) of the Act to conform their delisting 
rules to the notice requirements.
    \47\ 15 U.S.C. 78f(b)(7) and (d)(2).
    \48\ 15 U.S.C. 78f(b)(7).
    \49\ 15 U.S.C. 78f(d)(2).
    \50\ Id.
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    The proposed requirement that exchange rules \51\ provide public 
notice of the exchange's final delisting determination at least 10 days 
before the delisting becomes effective is designed to better inform the 
public of delistings.\52\ The proposed 10-day public notice requirement 
is based on the present requirements of Rule 12d2-2. As previously 
noted, Rule 12d2-2(a) currently requires that the Form 25 be effective 
not less than 10 days following the date on which the Form 25 is filed 
with the Commission.\53\ In addition, Rule 12d2-2(c) states that a 
national securities exchange may file a delisting application, in 
accordance with its rules, on a date specified in the application that 
must be not less than 10 days after it is filed with the 
Commission.\54\
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    \51\ The Commission would expect to delay the effectiveness of 
proposed Rule 12d2-2, if adopted, to give the exchanges adequate 
time to submit proposed rule changes, pursuant to Section 19(b) of 
the Exchange Act, to conform their delisting procedures, as 
necessary, to this and other proposed requirements.
    \52\ In addition, for issuer-initiated withdrawals from listing 
and registration, exchanges also would be required to provide public 
notice via posting on their Web sites, as discussed below. See infra 
note 61 and accompanying text.
    \53\ 17 CFR 240.12d2-2(a).
    \54\ 17 CFR 240.12d2-2(c).
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    The Commission believes that 10 days is sufficient time for any 
interested parties, in response to the anticipated delisting, to take 
action as permitted under state and federal law. Further, during the 
10-day period following the filing of Form 25, any interested person 
may, prior to the effectiveness of delisting, submit to the Commission 
in writing any comments it has on the delisting and/or deregistration, 
including whether the application has been made in accordance with the 
rules of the exchange, and what terms should be imposed by the 
Commission for the protection of investors. The Commission will 
continue to have the authority, pursuant to Section 12(d) of the 
Exchange Act, to impose any terms the Commission may deem necessary for 
the protection of investors, as well as, to postpone the effectiveness 
of the delisting and/or deregistration.\55\ The 10-day notice would 
provide an opportunity for the Commission to impose such conditions or 
delay the delisting and/or deregistration prior to it becoming 
effective. Finally, any delisting determination by an exchange is 
reviewable upon appeal to the Commission.\56\ Thus, any person 
aggrieved by the exchange's decision would be able to petition the 
Commission for review of such decision,\57\ and then appeal the 
Commission's decision to the U.S. Court of Appeals.\58\
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    \55\ 15 U.S.C. 78l(d). See also proposed Rule 12d2-2(d)(3).
    \56\ See supra note . Under Rule 420(c) of the Commission's 
Rules of Practice, filing an application for review with the 
Commission shall not operate as a stay of the exchange's delisting 
determination, unless the Commission orders a stay pursuant to a 
motion of the applicant or on the Commission's own motion. 17 CFR 
201.420(c). The Commission's review of the delisting determination 
proceeds under Section 19(f) of the Exchange Act. 15 U.S.C. 78s(f).
    \57\ 15 U.S.C. 78s(d).
    \58\ 15 U.S.C. 78y.
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    The Commission seeks comment on the proposed requirements for 
exchange delisting rules. Specifically, comment is

[[Page 34864]]

requested on whether the Commission should require exchanges to have 
any other provisions in their delisting procedures. For example, should 
exchange rules allow investors or the public an additional opportunity 
to comment on the proposed withdrawal of securities from listing and/or 
registration on the exchange before the withdrawal becomes effective 
upon filing the Form 25? The Commission also requests comment as to 
whether the filing of Form 25 with the Commission on EDGAR, together 
with the dissemination by press release and Web site posting, of an 
exchange-initiated delisting is sufficient public notice. In addition, 
the Commission requests comment on the proposed timeline for exchange-
initiated delistings, and whether the 10-day notice prior to 
effectiveness of the delisting is sufficient for investors or other 
interested parties to pursue any remedies available to them.
    Finally, the Commission requests comment on the proposal's impact 
on aggrieved parties' rights to a review of an exchange's delisting 
decision. In particular, the Commission requests comment on the impact 
on an aggrieved party of having to petition the Commission for review 
of an exchange's delisting decision, rather then petition the 
Commission for review of action made by delegated authority, before 
seeking review in the U.S. Court of Appeals.
2. Issuer Voluntary Withdrawal From Listing and Section 12(b) 
Registration
    The Commission is also proposing to amend the requirements for 
issuers that wish to withdraw a security from listing and/or 
registration from a national securities exchange. Currently, Rule 12d2-
2 requires an issuer to file an application with the Commission to 
withdraw its securities from listing and registration on an exchange. 
The Commission publishes the application for comment. The issuer 
delisting is not effective until the Commission issues an order. The 
Commission is proposing to permit an issuer to withdraw its securities 
from listing and/or registration by filing an application on Form 25. 
The delisting of the security would be effective 10 days after Form 25 
is filed with the Commission. The withdrawal from registration would 
occur 90 days after the filing of the Form.\59\
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    \59\ See infra notes 77 through 92 and and accompanying text.
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    In addition, the Commission is proposing to amend Rule 12d2-2 to 
require issuers to make the following representations on Form 25: (1) 
That the issuer has complied with the applicable exchange's rules for 
delisting and applicable state laws; (2) that the issuer has submitted 
written notification of its intent to withdraw its security from the 
exchange, including a statement setting forth a description of the 
security involved together with a statement of all material facts 
relating to the reasons for filing such application for withdrawal or 
striking from listing and registration; and (3) that the issuer has 
issued public notice of its intent to delist from the exchange, and/or 
withdraw from Section 12(b) registration, its security, via a press 
release and, if it has a publicly accessible Web site, posting such 
notice on that Web site.\60\ The proposed amendments would require the 
issuer to publish such notice no fewer than 10 days before the issuer's 
application for delisting on Form 25 becomes effective. Any 
notification by an issuer on its Web site would be required to remain 
posted until the delisting on Form 25 has become effective.
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    \60\ Proposed Rule 12d2-2(c).
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    The proposed amendments would require the issuer to submit its 
written notification to the exchange of its intention to withdraw its 
security from listing and registration no fewer than 10 days before the 
issuer files the Form 25 with the Commission. In addition, the 
exchange, upon notification by an issuer, would be required to post on 
its Web site the issuer's intent to withdraw its securities from 
listing and registration,\61\ and to leave such notice posted on its 
Web site until the delisting is effective. The proposed public 
notification requirements for the issuer and exchange would replace the 
current requirement that the Commission publish notice of an issuer's 
proposed delisting and eliminate a formal comment process.
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    \61\ Proposed Rule 12d2-2(c)(2).
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    The first two proposed requirements for issuers voluntarily 
delisting and/or deregistering their securities are based upon existing 
requirements of Rule 12d2-2. Specifically, Rule 12d2-2(d) states that 
an issuer may file an application to withdraw its security from listing 
and registration on an exchange in accordance with the rules of such 
exchange.\62\ In addition, current Rule 12d2-2(e) provides that an 
application by an issuer to withdraw from listing shall describe the 
security involved and state all material facts relating to the reasons 
for filing the delisting application.\63\ The proposed requirement that 
an issuer publish notice of its determination to withdraw from listing 
and registration is designed to provide investors with timely 
information with respect to a pending delisting.
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    \62\ 17 CFR 240.12d2-2(d).
    \63\ 17 CFR 240.12d2-2(e).
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    The Commission proposes that written notification to the exchange 
and public posting on an exchange Web site occur at least 10 days 
before an issuer files Form 25. Because delisting would not become 
effective until 10 days after filing of the Form 25, the effect of the 
proposed amendment is that public notice on an exchange Web site would 
be posted at least 20 days before an issuer voluntary delisting becomes 
effective. Public dissemination by the issuer would be required 10 days 
before the application for delisting on Form 25 becomes effective. The 
Commission believes that 20 days is sufficient time to allow exchanges 
to make the necessary system changes in preparation for removing the 
security from being quoted on the listed market in anticipation of the 
issuer filing the Form 25 to delist its securities.\64\ In addition the 
Commission believes that the minimum 10 day issuer public notification 
period provides sufficient time for any interested parties, in response 
to the anticipated delisting, to submit to the Commission in writing 
any comments it has on the delisting and/or deregistration, sell their 
security, or take any other action as permitted under state and federal 
law. Further, as noted earlier with respect to exchange-initiated 
delistings, the Commission would continue to have the authority, 
pursuant to Section 12(d) of the Exchange Act, to impose any terms as 
the Commission may deem necessary for the protection of investors, as 
well as the ability to postpone the effectiveness of the delisting and/
or the deregistration. The proposed public notice would provide an 
opportunity for the Commission to impose such conditions or delay the 
delisting and/or deregistration.\65\
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    \64\ The Commission notes that the exchanges can monitor 
issuers' filings on EDGAR. In addition, if an exchange wishes to be 
informed directly of when the issuer files the revised From 25, it 
can adopt a rule requiring listed companies to give notice to the 
exchange upon filing of the revised Form 25.
    \65\ 15 U.S.C. 78l(d). See also proposed Rule 12d2-2(d)(3).
---------------------------------------------------------------------------

    The Commission requests comment on the proposed requirements for 
issuers that seek to voluntarily withdraw their securities from listing 
and registration. For example, should exchange rules allow investors or 
the public an additional opportunity to comment on the proposed 
withdrawal of securities from listing and registration

[[Page 34865]]

on the exchange before the withdrawal becomes effective 10 days after 
filing Form 25? The Commission also solicits comment on the elimination 
of the existing formal solicitation of comment process after 
publication of notice by the Commission of a proposed issuer 
delisting.\66\
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    \66\ The Commission notes that it seldom receives comments on 
delisting applications. Thus far in 2004, the Commission has 
received 1 comment on the delisting application of GB Holdings, 
Inc., and 14 comments on the delisting application of The Ohio Art 
Company (``Ohio Art''). Ohio Art also submitted a letter to the 
Commission in response to questions from Commission staff on the 
application. See Securities Exchange Act Release No. 49553 (April 
12, 2004) (order granting the application of GB Holdings, Inc. to 
withdraw its notes from listing and registration on the Amex); see 
Securities Exchange Act Release No. 49336 (February 27, 2004) 
(notice of application of The Ohio Art Company to withdraw its 
common stock from listing and registration on the Amex). In 2003, 
the Commission received one written comment on a delisting 
application filed with the Commission. See Securities Exchange Act 
Release No. 47248 (January 24, 2003) (order granting the application 
of HSBC Bank, PLC to withdraw its notes from listing on the NYSE). 
In 2002, the Commission received three written comments on delisting 
applications filed with the Commission. See Securities Exchange Act 
Release Nos. 46503 (September 16, 2002) (order granting the 
application of the PCX to strike from listing and registration the 
common stock of One Mile, Inc.), 46700 (October 21, 2002) (order 
granting the application of KBK Capital Corp. to withdraw its common 
stock from listing on the PCX), and 46699 (October 21, 2002) (order 
granting the application of KBK Capital Corp. to withdraw its common 
stock from listing on the Amex). In 2001, the Commission did not 
receive any written comments on a delisting application. 
Furthermore, the Commission has not in recent years, imposed any 
conditions on the delisting applications it approved.
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    The proposal would permit an issuer to voluntarily withdraw a 
security from listing on an exchange by filing a Form 25 on EDGAR, 
which would be effective 10 days after filing. Because the Commission 
would no longer issue an order, aggrieved parties would no longer be 
able to seek review in the U.S. Court of Appeals. The Commission 
requests comment on whether Rule 12d2-2 should permit aggrieved parties 
to petition the Commission for review of the delisting. The Commission 
also requests comment as to whether issuers should be required to 
disseminate publicly their intent to withdraw the security from listing 
and registration, and whether dissemination by press release and Web 
site posting is sufficient public notice. In this regard, the 
Commission is also requesting comment on whether such public 
dissemination by press release and/or posting on an issuer's publicly 
assessable Web site should be an SRO rule requirement adopted pursuant 
to Section 19(b) of the Act, rather than a requirement under proposed 
Rule 12d2-2. The Commission also requests comment on the proposed 
timeline for issuer-initiated delistings. Is the requirement of notice 
to the exchange 10 days before an issuer files the Form 25 sufficient? 
Further, is the minimum 10-day notice period to the public, which 
begins once the issuer has filed a Form 25, sufficient? Finally, 
comment is requested as to whether the Commission should impose any 
other additional conditions to ensure investor protection.
3. Effectiveness of Delisting and Withdrawal of Registration Under 
Section 12(b) Upon Filing the Form 25
    As noted above, the Commission proposes that the application on 
Form 25 to delist a class of securities from a national securities 
exchange be effective 10 days after filing Form 25 with the 
Commission.\67\ With respect to deregistration, the Commission proposes 
that the withdrawal from Section 12(b) registration be effective 90 
days after filing Form 25 or such shorter period as the Commission may 
determine.\68\ For purposes of Section 12(b) under the Exchange Act, a 
class of securities would no longer be considered listed on a national 
securities exchange 10 days after the filing of Form 25 with the 
Commission, even though the withdrawal of a security's registration 
under Section 12(b) is effective at a later time. Further, as discussed 
below, upon the filing of Form 25, an issuer's duty to file reports 
under Section 13(a) of the Exchange Act, which arises from the 
registration of a class of securities under Section 12(b), would be 
suspended upon the effective date of a delisting, even though the 
Section 12(b) withdrawal from registration would be effective at a 
later time. The Commission believes that this approach would give 
issuers and investors certainty as to the effective date of the 
delisting and withdrawal from registration under Section 12(b), and 
under the circumstances described below, would allow issuers to suspend 
reporting under Section 13(a) at the time of delisting. Issuers would, 
however, have to comply with all other Exchange Act requirements that 
arise from Section 12(b) registration until such registration is 
withdrawn.\69\ The Commission solicits comments on this approach.
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    \67\ See proposed Rule 12d2-2(d)(1).
    \68\ It would be in the Commission's sole discretion to shorten 
the 90-day time period, as the Commission deems necessary and 
appropriate for the protection of investors.
    \69\ These continuing requirements include, for example, 
Sections 13(e), 14(a) and 14(d) of the Exchange Act (proxy and 
tender offer rules). 15 U.S.C. 78m(e), 78n(a), and 78n(d).
---------------------------------------------------------------------------

    Notwithstanding the proposal to amend Rule 12d2-2 and Form 25 so 
that delisting on Form 25 is effective 10 days after filing Form 25 
with the Commission, there are instances in which the Commission may 
find it necessary or appropriate for the protection of investors to 
delay the effectiveness of delisting and/or deregistration of a class 
of security. As such, the Commission is proposing to amend Rule 12d2-
2(d) to provide that, the Commission may, by written notice to the 
exchange or issuer, postpone effectiveness of a deregistration to 
determine whether the Form 25 to deregister the class of securities has 
been or would be filed in accordance with the rules of the exchange, 
and whether any terms or conditions should be imposed by the Commission 
for the protection of investors.\70\ This proposed provision retains 
the Commission's current authority under Section 12(d) of the Exchange 
Act to impose any terms as necessary for the protection of investors 
before the deregistration becomes effective.
    The Commission is also proposing under Rule 12d2-2(d) that, if an 
action under Section 12 of the Exchange Act to suspend the effective 
date of, or revoke, the registration of a class of securities, 
commences against an issuer at any time while the securities are 
registered under Section 12(b), the securities would remain registered 
under Section 12 until the final determination of such proceeding, or 
until the Commission otherwise determines to suspend the effective date 
of, or revoke, the registration of a class of securities.\71\ The 
Commission believes this provision would be important to preserve its 
ability to commence a proceeding pursuant to Section 12 of the Exchange 
Act, because such proceeding may only be brought with regard to a class 
of securities registered pursuant to Section 12 of the Exchange Act. 
The Commission further believes that the

[[Page 34866]]

proposed 90-day delay \72\ prior to the withdrawal of registration of a 
class of securities under Section 12(b) would give the Commission 
sufficient time to initiate proceedings, as necessary, pursuant to 
Section 12 of the Exchange Act.
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    \70\ For example, the Commission, pursuant to Section 19(d)(2), 
15 U.S.C. 78s(d)(2), may, on its own motion, review an exchange's 
determination to delist the security and/or withdraw a class of 
securities from registration under Section 12(b), as a denial of 
access to exchange services.
    \71\ For example, under Section 12(j) of the Exchange Act, the 
Commission is authorized, by order, as it deems necessary or 
appropriate for the protection of investors to deny, to suspend the 
effective date of, to suspend for a period not exceeding twelve 
months, or to revoke the registration of a security, if the 
Commission finds, on the record after notice and opportunity for 
hearing, that the issuer of such security has failed to comply with 
any provision of this title, or the rules and regulations 
thereunder. 15 U.S.C. 78l(j).
    \72\ We note that the proposed provision is similar to the 
procedures applicable to Section 12(g) registered securities as 
provided under Section 12(g)(4) of the Exchange Act. 15 U.S.C. 
78l(g)(4) (``Registration of any class of security pursuant to this 
subsection shall be terminated in ninety days, or such shorter 
period as the Commission may determine * * *''.).
---------------------------------------------------------------------------

    To preclude an issuer from using the 90-day delay period to 
circumvent its reporting obligations under Section 13(a) of the 
Exchange Act \73\ and the rules and regulations thereunder, the 
Commission is proposing that, if, following the effective date of 
delisting a security, the Commission, an exchange, or an issuer delays 
the Form 25's effective date for the security's withdrawal from 
registration under Section 12(b), the issuer, within 60 days of such 
delay, would be required to file with the Commission any reports that 
would have been required under Section 13(a) had the Form 25 not been 
filed.\74\ The issuer would also be required to file timely any 
subsequent reports required under Section 13(a) for the duration of the 
delay. The Commission believes that providing an issuer 60 days after 
any action to delay a security's withdrawal from registration would 
give issuers adequate time to become current in its reports as required 
by Section 13(a). This requirement also is designed to ensure that the 
filing of the Form 25 cannot be used by issuers to inappropriately 
suspend their reporting obligations for a temporary period of time. The 
Commission believes that the 60-day reporting requirement also would be 
beneficial to investors and the public in that, during the time that a 
security's withdrawal from registration is delayed, investors and the 
public would be able to continue to track an issuer's financial status 
without missing a fiscal quarter of reporting information.\75\ The 
Commission requests comment, however, as to whether there should be 
specific instances in which an issuer or an exchange may withdraw Form 
25 after it has been filed on EDGAR.
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    \73\ 15 U.S.C. 78m(a).
    \74\ Proposed Rule 12d2-2(d)(5).
    \75\ The 60-day time period is similar to the time period 
provided in Rule 12g-4(b) regarding the deregistration of a class of 
equity securities under Section 12(g) of the Exchange Act.
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    An issuer whose reporting responsibilities under Section 13(a) of 
the Exchange Act are suspended for a class of securities under proposed 
Rule 12d2-2(d)(5)\76\ would, nevertheless, be required to file any 
reports that an issuer with such a class of securities registered under 
Section 12 of the Exchange Act would be required to file under Section 
13(a) if such class of securities: (1) Is registered under Section 
12(g) of the Exchange Act; or (2) would be registered, or would be 
required to be registered, under Section 12(g) but for the exemption 
from registration under Section 12(g) of the Exchange Act by Section 
12(g)(2)(A)\77\ of the Exchange Act.
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    \76\ For purposes of proposed Rule 12d2-2, the period of such 
suspension would include the 60 day grace period described under 
proposed Rule 12d2-2(d)(5).
    \77\ See Section 12(g)(2)(A) of the Exchange Act, which states 
that the provisions of Exchange Act Section 12(g)(1) shall not apply 
to `` security listed and registered on a national securities 
exchange.'' 15 U.S.C. 78l(g)(2)(A). During the Section 13(a) 
reporting suspension contemplated by proposed Rule 12d2-2(d)(5), an 
issuer's class of securities would not be listed on a national 
securities exchange for purposes of Section 12 of the Exchange Act. 
The class of securities would, however, continue to be registered 
under Section 12(b) of the Exchange Act for the duration of the 
Section 13(a) reporting suspension or until the Commission otherwise 
determines.
---------------------------------------------------------------------------

    Similarly, an issuer whose reporting responsibilities under Section 
13(a) of the Exchange Act are suspended under proposed Rule 12d2-
2(d)(5) would, nevertheless, be required to file any reports that would 
be required under Section 15(d) of the Exchange Act but for the fact 
that the reporting obligations are: (1) suspended for a class of 
securities under proposed Rule 12d2-2(d)(5); and (2) suspended, 
terminated, or otherwise absent under Section 12(g) of the Exchange 
Act. The reporting responsibilities of an issuer under Section 15(d) of 
the Exchange Act shall continue until the issuer is required to file 
reports under Section 13(a) or the issuer's reporting responsibilities 
under Section 15(d) are otherwise suspended.
    The goal of the reporting framework contemplated above is designed 
to ensure that an issuer with reporting responsibilities under Section 
13(a) of the Exchange Act that are suspended under proposed Rule 12d2-
2(d)(5) would continue to file any reports under Section 13(a) or 
Section 15(d) that would be required if the class of securities 
delisted under proposed Rule 12d2-2 was no longer registered under 
Section 12(b) of the Exchange Act. The Commission seeks comment on 
whether the framework outlined above accomplishes this goal.
    The Commission also seeks comment generally on the proposed 
provisions regarding the effectiveness of delisting and withdrawal of 
registration under Section 12(b).
4. Delisting and/or Withdrawal From Section 12(b) Registration Pursuant 
to Certain Corporate Actions
    Proposed Rule 12d2-2 would retain the current requirement that an 
exchange file Form 25 to strike a security from listing and 
registration following certain corporate actions. As noted earlier, 
these circumstances are where the entire security class is matured, 
redeemed, retired, or extinguished by operation of law.\78\ In 
addition, proposed Rule 12d2-2 would be modified to indicate that if a 
security is delisted pursuant to paragraph (a)(3) of Rule 12d2-2 and a 
national securities exchange intends to admit a successor security to 
trading, in accordance with Rule 12a-5 under the Exchange Act, the 
effective date of the Form 25, as set forth in proposed Rule 12d2-
2(d)(1), shall not be earlier than the date the successor security is 
removed from its exempt status.\79\ This is consistent with the current 
treatment of successor securities, in which the Form 25 for delisting 
and deregistering the original security can only be made effective 
after the successor security has been removed from its exempt 
status.\80\ The Commission seeks comment on the proposal to retain the 
current requirement that an exchange file Form 25 to strike a security 
from listing and registration following certain corporate actions, 
including the proposal that the delisting shall not be effective until 
after the successor security is removed from its exempt status.
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    \78\ See 17 CFR 240.12d2-2(a)(1)-(4).
    \79\ See supra note 6; see also proposed Rule 12d2-2(d)(8).
    \80\ Exchanges generally do not file the Form 25 until the 
successor security has actually been removed from its exempt status. 
The Commission would expect the exchanges to continue this practice 
under the proposed rule language.
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5. Deletions of Certain Provisions in Current Rule 12d2-2
    Current Rule 12d2-2 provides that an exchange may strike a security 
from listing and registration if: (1) Trading in such security has been 
terminated pursuant to a rule of such exchange requiring such 
termination whenever the security is admitted to trading on another 
exchange; and (2) listing and registration of such security has become 
effective on such other exchange.\81\ The Commission proposes to 
eliminate this provision from the amended Rule. The Commission believes 
that the provision may raise competitive concerns, as it could be 
construed as a limitation on an issuer's right to list its securities 
on multiple exchanges. The Commission seeks comment on the proposed

[[Page 34867]]

elimination of paragraph (b) from Rule 12d2-2.
---------------------------------------------------------------------------

    \81\ 17 CFR 240.12d2-2(b).
---------------------------------------------------------------------------

    In addition, current Rule 12d2-2(f) provides that, within 30 days 
of the publication of any rule or regulation which substantially alters 
or adds to the obligations, or detracts from the rights, of an issuer 
of a security registered under Section 12(b) or (c) of the Exchange 
Act, or of its officers, directors, or security holders, or of persons 
soliciting or giving any proxy or consent or authorization with respect 
to such security, an issuer may file with the Commission a request that 
its registration expire. Such registration shall expire immediately 
upon receipt of such request or immediately before such rule or 
regulation becomes effective, whichever date is later.\82\
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    \82\ 17 CFR 240.12d2-2(f).
---------------------------------------------------------------------------

    The Commission proposes to eliminate this paragraph, as it is an 
obscure provision that has rarely been utilized. Indeed, the Commission 
is aware of the paragraph being invoked only once since the adoption of 
the 1975 Exchange Act amendments.\83\ The Commission is concerned that 
the provision could potentially conflict with its proposal because 
paragraph (f) would immediately deregister an issuer's securities upon 
filing a request with the Commission without following the proposed 
procedures and timeframes for delisting and/or withdrawal from 
registration. Such a result would not serve the public interest and 
would be unfair to public shareholders. The elimination of this 
provision would ensure that issuers would have to follow exchange rules 
to delist and/or deregister their securities.\84\ The Commission also 
believes that the proposed Rule 12d2-2 would clarify that a security no 
longer required to be registered must still comply with the delisting 
provisions of Rule 12d2-2, because the rule would permit an issuer to 
file Form 25 to solely delist its securities.\85\ The Commission asks 
for comment, however, as to its proposal to eliminate paragraph (f) 
from the Rule.
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    \83\ The Options Clearing Corporation used the provision to 
deregister securities in response to the Commission adopting new 
exemptions for standardized options under the Securities Act of 1933 
and the Exchange Act. See Securities Exchange Act Release No. 47082 
(December 23, 2002), 68 FR 188 (January 2, 2003). Form 25 was 
unavailable because it discusses delisting and deregistration: The 
OCC, however, only wished to deregister the options. The Commission 
is proposing to amend Form 25 to cover delisting and/or 
deregistration to avoid this problem in the future. Accordingly, the 
provision would no longer be necessary.
    \84\ Issuers should note that Section 12(a) of the Exchange Act 
requires the effective registration of a class of securities (other 
than an exempted security) on an exchange as a prerequisite to 
trading on such exchange. The provisions of this subsection shall 
not apply with respect to a security futures product traded on a 
national securities exchange.
    \85\ See id., and supra note 83. See also proposed Rule 12d2-
2(c).
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B. Proposed Changes to Form 25

    Currently, Form 25 is only filed by an exchange as notification to 
the Commission of the removal of a security from listing and 
registration pursuant to paragraph (a) of Rule 12d2-2, which only deals 
with situations where the entire class of the security has been 
matured, redeemed, retired, or its rights extinguished by operation of 
law.\86\ Exchanges may file Form 25 on EDGAR or may submit paper copies 
of the Form to the Commission.\87\ In addition, exchange and issuer 
delisting applications filed with the Commission, pursuant to Rule 
12d2-2(c) and (d), are currently submitted in paper only and cannot be 
filed on EDGAR. To simplify the delisting and deregistration process, 
the Commission proposes that Form 25 be amended so that its use can be 
expanded to include delistings initiated by either the issuer or an 
exchange. Accordingly, under the proposal, Form 25 would replace the 
paper application currently filed by either an exchange or issuer to 
delist and deregister securities under current Rule 12d2-2(c) and (d) 
of the Exchange Act, and eliminate the need for the Commission to issue 
an approval order to grant the exchange's or issuer's request to delist 
and deregister the security.
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    \86\ See supra note 6 and accompanying text.
    \87\ The proposal to permit the voluntary filing of Form 25 
through EDGAR was adopted by the Commission as part of the 
Regulation S-T amendments. See Securities Exchange Act Release No. 
45922 (May 14, 2002), 67 FR 36678 (May 24, 2002).
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    Rule 12d2-2, as amended, would require exchanges and issuers to 
follow the rules of the exchange regarding the delisting and 
deregistration of securities, after which the exchange or issuer would 
file the amended Form 25 to notify the Commission of the delisting and/
or deregistration of a security under Section 12(d). The Commission is 
proposing to amend Form 25 to require the exchange or issuer to provide 
the Commission with the name of the issuer of the security, the name of 
the exchange where such security is listed and registered, the address 
of the issuer, and a description of the security. This is similar to 
information currently provided on the existing Form 25. Finally, on 
revised Form 25, the exchange or issuer would check a box to designate 
the rule provision of Rule 12d2-2 relied upon to strike the security 
from listing and/or registration under Section 12(d) of the Exchange 
Act.
    The proposed instructions to Form 25 would provide that the Form 
must be filed on EDGAR. Further, as noted above, exchanges and issuers 
would be required to file Form 25, instead of filing in paper with the 
Commission, and the Commission would no longer issue approval orders 
for exchange and issuer delistings and deregistrations. The Commission 
believes that requiring exchange and issuers to file one form, the 
revised Form 25, on EDGAR would substantially reduce paperwork burdens 
for exchanges and issuers. Further, mandatory filing on EDGAR is 
designed to ensure that all current information on the registration 
status of an issuer is available on EDGAR. Because exchanges and 
issuers have access to EDGAR, the Commission believes it would not be 
burdensome for them to file electronically. Moreover, this change would 
be beneficial to the public by providing a complete representation of 
the issuer's registration status, which, as noted above, is not 
currently available on the EDGAR system.
    To effectuate mandatory electronic filing of the revised Form 25, 
the Commission proposes to amend Regulation S-T.\88\ Currently, Rule 
101(b)(9) of Regulation S-T \89\ permits, but does not require, 
electronic filing of Form 25 on EDGAR. The Commission is proposing to 
eliminate this provision, because it is proposing mandatory electronic 
filing of Form 25. Rule 101(c)(9) of Regulation S-T,\90\ which 
specifies that Exchange Act filings submitted to the Commission's 
Division of Market Regulation, except for Form 25, shall not be 
submitted in electronic format, would remain unchanged. In addition, 
the Commission is proposing an amendment to Regulation S-T to add new 
paragraph (a)(1)(ix) to make the filing of Form 25 on EDGAR 
mandatory.\91\ The Commission solicits comment as to whether filing of 
Form 25 on EDGAR should be mandatory.
---------------------------------------------------------------------------

    \88\ 17 CFR 232.10 through 232.601. Regulation S-T is the 
general regulation governing EDGAR filing. In addition to Regulation 
S-T, filers must submit electronic documents in accordance with the 
EDGAR filing manual.
    \89\ 17 CFR 232.101(b)(9).
    \90\ 17 CFR 232.101(c)(9).
    \91\ Rule 101(a) of Regulation S-T specifies filings that are 
required to be submitted in electronic format. 17 CFR 232.101(a).
---------------------------------------------------------------------------

    Form 25 currently becomes effective at the opening of business on 
such date as specified by the exchange, which must be no fewer than 10 
days following the date on which Form 25 is filed with the Commission. 
The Commission is

[[Page 34868]]

proposing that the delisting of a security be effective 10 days after 
the filing of revised Form 25 with the Commission, and removal from 
registration under Section 12(b) be effective 90 days after filing of 
the Form 25.\92\
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    \92\ See discussion of proposed Rule 12d2-2(d) regarding the 
effectiveness of delisting and/or deregistration under Section 12(b) 
of the Exchange Act upon the filing of the proposed revised Form 25, 
supra notes 67-77 and accompanying text.
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    Currently, Form 25 does not include general instructions as to its 
use and effectiveness. Therefore, the Commission is proposing to 
include general instructions to the revised Form 25 to provide further 
guidance to the exchanges and issuers on the use and effectiveness of 
the Form. The proposed general instructions reiterate many of the 
regulatory requirements proposed in the amended rule provisions that 
are discussed in this release, including, but not limited to, Rule 19d-
1 notices, mandatory electronic filing on EDGAR, delayed effectiveness 
of a security's withdrawal of registration under Section 12(b), and 
suspension of duty to file reports under Section 13(a) immediately upon 
the filing of the Form 25. The proposed amendments to Form 25 also 
would instruct issuers to determine whether they have additional 
reporting requirements under Section 12(g) and reporting obligations 
pursuant to Section 15(d) of the Exchange Act upon filing of the Form. 
The Commission believes that the proposed instructions to the revised 
Form would help provide clarity and guidance to issuers, investors and 
the public about the rules' requirements, including the effective dates 
for delisting and deregistration upon filing the Form 25.
    The Commission seeks comment on the proposed Form 25 effective date 
of ten days after the filing of the Form. In this regard, commenters 
should consider, as discussed above, that the Commission is proposing 
that exchanges and issuers provide public notice of the determination 
to delist and/or deregister the security at least 10 days before the 
effective date of delisting on Form 25. In addition, the Commission is 
proposing that an exchange post public notice on its Web site of an 
issuer's intent to delist and/or deregister a class of securities at 
least 20 days before the effective date of delisting on Form 25. The 
Commission also requests comment on the new proposed format and content 
of the Form 25, including the proposed general instructions. 
Specifically, commenters should consider whether there are any 
additional instructions that should be included in the Form.
    On March 16, 2004, the Commission adopted amendments to Form 8-K, 
including, among other items, a new Form 8-K item that would require an 
issuer to disclose the delisting of a class of its securities from an 
exchange.\93\ If the Commission adopts the Form 25 amendments described 
in this release, the delisting of a company's securities from an 
exchange would trigger both a Form 25 filing requirement and Form 8-K 
filing requirement. The Commission seeks to eliminate any unnecessary 
duplication in required public disclosure about exchange-initiated 
delistings if it adopts the Form 25 amendments. Therefore, the 
Commission solicits comment on whether it should eliminate the Form 8-K 
disclosure requirement regarding exchange-initiated delistings if it 
adopts the amendments proposed in this release.\94\
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    \93\ See Item 3.01 of Securities Act Release No. 8400 (March 16, 
2004), 69 FR 15594 (March 25, 2004) (adopting amendments to Form 8-
K).
    \94\ The Form 8-K item addresses both exchange-initiated 
delistings as well as delistings initiated by a national securities 
association. The proposals in this release would create a filing 
obligation under Form 25 at the time of delisting in the case of 
exchange-initiated delistings. This filing obligation would be in 
addition to the Form 8-K obligation. Because there is no form 
comparable to Form 25 in the case of a delisting initiated by a 
national securities association, for example, a delisting from the 
Nasdaq National Market, that portion of the Form 8-K item would be 
retained. Reports on Form 8-K regarding issuer-initiated delistings 
would not be affected by these proposals because the triggering 
event for Form 8-K is not concurrent with the delisting of the 
securities. See id.
---------------------------------------------------------------------------

    In responding to this request for comment, please consider the fact 
that the Form 8-K amendments require an issuer to file a Form 8-K 
disclosing two separate events related to the delisting process at two 
different points in time. An issuer first would have to file a Form 8-K 
if it received notice from the national securities exchange or national 
securities association that maintains the principal listing for a class 
of the registrant's common equity to the effect that the issuer or a 
class of the issuer's securities does not satisfy a rule or standards 
of the exchange or association for continued listing. The issuer would 
have to file a second Form 8-K at the time a class of its securities 
actually has been delisted from or by the exchange or association.\95\ 
Is there a benefit to requiring issuers to disclose both of these 
events in the same type of filing (i.e., Form 8-K) rather than having 
the first event disclosed in a Form 8-K and the second event disclosed 
only in a Form 25?
---------------------------------------------------------------------------

    \95\ See supra note 93. With respect to voluntary delistings 
initiated by the issuer, only one Form 8-K would have to be filed at 
the time the issuer has taken definitive action to cause the listing 
or quotation of a class of its common equity to be withdrawn or 
terminated from the exchange or association.
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C. Filing of Form 25 To Serve as Notice Pursuant to Section 19(d)

    The Commission further proposes that revised Form 25 serve as 
notice from the exchange to the Commission under Section 19(d) of the 
Exchange Act,\96\ and Rule 19d-1 thereunder.\97\ Rule 19d-1 provides 
that an exchange shall file with the Commission a notice of, among 
other things, any final disciplinary actions, denials, bars, or 
limitations respecting membership, association, participation, or 
access to services.\98\ Currently, the exchanges do not typically file 
Section 19(d) notices when they delist a security, because the actual 
delisting of the security does not occur until ordered by the 
Commission. Therefore, the Commission, not the exchange, takes the 
final action of delisting the security.
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    \96\ 15 U.S.C. 78s(d).
    \97\ 17 CFR 240.19d-1.
    \98\ These delisting decisions are reviewable by the Commission 
under Section 19(d)(2) of the Exchange Act because they have been 
considered by the Commission to be a denial of access to services 
offered by the SRO. 15 U.S.C. 78s(d)(2). See e.g., Healthtech Int'l 
Inc., 70 S.E.C. 2337 (1999). If, in any proceeding to review an 
exchange's delisting decision, the Commission finds that the 
specific grounds on which such denial of access exist in fact, that 
the denial of access is in accordance with the rules of the 
exchange, and that such rules are, and were applied in a manner 
consistent with the Exchange Act, the Commission shall dismiss the 
proceeding. 15 U.S.C. 78s(f).
---------------------------------------------------------------------------

    Because the Commission is proposing to cease issuing orders 
granting approval of exchanges' delisting applications, the exchanges 
would be required to file notices under Rule 19d-1 of any final 
delisting decisions of the exchange as denials of access to exchange 
services. To avoid imposing additional paperwork burdens on the 
exchanges, however, the Commission is proposing that the filing of 
revised Form 25 by an exchange constitute adequate notice pursuant to 
Section 19(d) of the Exchange Act.\99\
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    \99\ The revised Form 25 would require the exchange to attach a 
copy of its delisting decision. In its delisting decision, the 
exchange must make findings as to the specific grounds on which such 
denial of access to exchange services is based. 15 U.S.C. 78s(f).
---------------------------------------------------------------------------

    In connection with this proposal, the Commission is also proposing 
to amend Rule 19d-1 to add new paragraphs (j) and (k). Under new 
paragraph (j) to Rule 19d-1, any exchange for which the Commission is 
the appropriate regulatory agency that delists a security pursuant to 
Section 12(d) of the Exchange Act and Rule 12d2-2 would be required to 
file a notice with the Commission on revised Form 25 in accordance with 
new paragraph (k) of

[[Page 34869]]

Rule 19d-1. New paragraph (k) of Rule 19d-1 would require the exchange 
to attach a copy of its delisting determination to revised Form 25 and 
file Form 25 with the attachment on EDGAR.
    The Commission seeks comment on the appropriateness of considering 
the filing of the Form 25 with the attached exchange delisting decision 
as notice to the Commission pursuant to Section 19(d) of the Exchange 
Act.

D. Proposed Exemption of Options and Security Futures From Section 
12(d)

    Finally, the Commission proposes to exempt standardized options and 
security futures products from Section 12(d) of the Exchange Act and 
the requirements of Rule 12d2-2.\100\ Standardized options and 
securities futures products are exempt from Sections 12(a) and 12(g) of 
the Exchange Act.\101\ Nevertheless, the options exchanges have 
continued to file applications under Rule 12d2-2 to delist options, and 
the Commission has issued orders approving such delistings. Because the 
Commission has never applied the requirements of Section 12(d) and Rule 
12d2-2 under the Exchange Act to security futures products and does not 
believe that the requirements for delisting securities being proposed 
today would provide investors in options with any protections, the 
Commission is proposing to explicitly exempt these products from the 
requirements of the Rule.
---------------------------------------------------------------------------

    \100\ In conjunction with this release, the Commission is 
issuing an order to exempt temporarily standardized options and 
security futures from Rule 12d2-2 under the Exchange Act. See 
Securities Exchange Act Release No. 49859 (June 15, 2004). See also 
proposed Rule 12d2-2(e).
    \101\ See infra note 104.
---------------------------------------------------------------------------

    When Congress enacted the Commodity Futures Modernization Act of 
2000 (``CFMA''),\102\ it excluded security futures products traded on a 
national securities exchange from the requirement to register under 
Section 12(a) of the Exchange Act.\103\ In addition, the Commission 
exempted by rule security futures products from Section 12(g), if 
traded on a national securities exchange and cleared by a clearing 
agency that is registered as a clearing agency under Section 17A of the 
Exchange Act or exempt from registration under Section 17A(b)(7).\104\ 
Although the CFMA did not explicitly exempt security futures products 
from the requirements of Section 12(d) or Rule 12d2-2 under the 
Exchange Act, the Commission has not applied the requirements under 
those provisions to security futures exchanges and is today proposing 
to make clear that security futures products are not subject to those 
requirements.
---------------------------------------------------------------------------

    \102\ Pub. L. No. 106-554, 114 Stat. 2763.
    \103\ 15 U.S.C. 78l(a).
    \104\ See Securities Act Release No. 8171 (December 23, 2002), 
68 FR 188 (January 2, 2003).
---------------------------------------------------------------------------

    Accordingly, the Commission is proposing new paragraph (e) to Rule 
12d2-2 to exempt from Section 12(d) of the Exchange Act, and Rule 12d2-
2 thereunder, standardized options, as defined in Rule 9b-1(a)(4) under 
the Exchange Act,\105\ that are issued by a clearing agency registered 
under Section 17A of the Exchange Act \106\ and traded on a national 
securities exchange registered pursuant to Section 6(a) of the Exchange 
Act.\107\ Proposed new paragraph (e) to Rule 12d-2 would also exempt 
from Section 12(d) \108\ and Rule 12d2-2 any security futures products 
that are traded on a national securities exchange. The Commission seeks 
comment on the proposed exemption of standardized options and security 
futures products from Section 12(d) of the Exchange Act and Rule 12d2-2 
thereunder.
---------------------------------------------------------------------------

    \105\ 17 CFR 240.9b-1(a)(4).
    \106\ 15 U.S.C. 78q-1.
    \107\ 15 U.S.C. 78f(a).
    \108\ 15 U.S.C. 78l(d).
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E. General Request for Comment

    The Commission requests comment on the proposed amendments to Rule 
12d2-2 Form 25, Rule 19d-1, and Regulation S-T, suggestions for 
additions to the proposal, and comment on other matters that might have 
an effect on the proposal contained in this release. In particular, the 
Commission requests comment on whether the proposal will enhance market 
efficiency without jeopardizing investor protection. Commenters may 
also wish to address whether there should be additional exchange or 
Commission requirements to ensure adequate investor protection in the 
delisting process.

IV. Paperwork Reduction Act

    Rule 12d2-2 and Form 25, which the Commission is proposing to 
amend, contain ``collection of information'' requirements within the 
meaning of the Paperwork Reduction Act of 1995 (``PRA'').\109\ The 
title of the affected information collection is the Form 25, as 
required and under Rule 12d2-2 (OMB Control No. 3235-0080).
---------------------------------------------------------------------------

    \109\ 44 U.S.C. 3501 et. seq.
---------------------------------------------------------------------------

    Compliance with the proposed amendments would be mandatory. The 
information required by the proposed amendments would not be kept 
confidential by the Commission. An agency may not conduct or sponsor, 
and a person is not required to respond to, a collection of information 
unless it displays a currently valid control number. The Commission has 
submitted the revisions to the collections of information to the Office 
of Management and Budget (``OMB'') for review in accordance with 44 
U.S.C. 3507(d) and 5 CFR 1320.11.
    Form 25, as contemplated by the proposed amendments, would be used 
by both issuers and exchanges to delist a class of securities from a 
national securities exchange, and withdraw its registration under 
Section 12(b) of the Act. This form enables the Commission to receive 
organized information relating to a company planning to delist its 
class of securities from a national securities exchange and withdraw 
from registration under Section 12(b) of the Exchange Act. In addition, 
the amended Form 25 would serve as notice from the exchange to the 
Commission under Section 19(d) of the Exchange Act.
    The Commission estimates that the current combined burden under 
Rule 12d2-2 is 851 burden hours per year. This estimate is based on 
exchange and issuer activity in 2003. In 2003, exchanges filed 544 
Forms 25 per year at one burden hour per form. The exchanges filed 190 
delisting applications at one burden hour per application; of those 
applications, 104 were filed to delist equity securities and 86 were 
filed to delist options. In 2003, 57 issuers voluntarily delisted their 
securities by filling out delisting applications, which, for issuers, 
take on average, two burden hours per application.
    If adopted, the amended Rule 12d2-2 would require issuers that 
voluntarily delist their securities to file a Form 25, which takes one 
burden hour, rather than a voluntary delisting application, which, for 
issuers, takes two burden hours. The amended Rule would also exempt 
standardized options and security futures products from the Rule 
entirely. Assuming that 57 issuers voluntarily delist their securities, 
this change would reduce the total burden hours incurred by issuers 
from 114 hours to 57 hours. In addition, the Commission estimates that 
the proposed exemption for standardized options and security futures 
products would lower the total burden hours incurred by exchanges from 
190 hours to 104 hours.\110\ As a result of this reduction,

[[Page 34870]]

the combined estimated burden under a revised Rule 12d2-2 would be 705 
hours.
---------------------------------------------------------------------------

    \110\ No data is available with respect to how many exchanges 
currently use EDGAR to file Form 25. However, the Commission 
believes that requiring Form 25 to be filed on EDGAR will not change 
the amount of time required to complete Form 25.
---------------------------------------------------------------------------

    The Commission is soliciting comment on the expected PRA effects of 
the proposed rule amendments. In particular, the Commission solicits 
comment on the accuracy of our revised burden hour estimates expected 
to result from the proposed amendments. The Commission further requests 
comment on whether the proposed changes to the collection of 
information are necessary for the proper performance of the 
Commission's functions, including whether the information garnered will 
have practical utility. In addition, the Commission solicits comment on 
whether there are ways to enhance the quality, utility, and clarity of 
the information to be collected. The Commission further solicits 
comment on whether there are ways to minimize the burden of information 
collection on those who respond, including through the use of automated 
collection techniques or other forms of information technology. 
Finally, the Commission solicits comment on whether the proposed 
amendments will have any effects on any other collection of information 
not previously identified in this section.
    Comments on the collection of information requirements and expected 
effects, should be submitted to the Office of Management and Budget, 
Attention: Desk Officer for the Securities and Exchange Commission, 
Office of Information and Regulatory Affairs, Washington, DC 20503. 
Commenters should also send a copy of the comments to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609, with reference to File No. S7-25-04. 
Requests for materials submitted to OMB by the Commission with regard 
to these collections of information should be in writing, refer to File 
No. S7-25-04 and be submitted to the Securities and Exchange 
Commission, Records Management, Office of Filings and Information 
Services. OMB must make a decision concerning the affected collections 
of information between 30 and 60 days after publication of the release. 
Consequently, in order to ensure that the comments achieve their full 
effect, commenters should submit them to OMB within 30 days of this 
release's publication.

V. Costs and Benefits of Proposed Amendments to Rule 12d2-2 and Form 25

    Rule 12d2-2 under the Exchange Act currently contemplates different 
procedural instructions based on the reason for a delisting. Generally, 
when an exchange decides to delist a class of securities because the 
rights associated with such security have been redeemed or 
extinguished, the exchange usually files a Form 25 in paper with the 
Commission. When an exchange intends to delist a class of securities as 
required under its rules, it must file an application in paper with the 
Commission to delist, and the Commission must issue an order approving 
the delisting. If an issuer of a class of securities intends to 
voluntarily delist, it must file an application in paper with the 
Commission to voluntarily delist the class of securities from an 
exchange, after which the Commission must issue an order approving the 
delisting. Exchange-initiated delistings and Forms 25 submitted by 
exchanges cannot be deemed effective less than ten days after filing 
with the Commission.\111\ As for issuer-initiated delisting, there is 
no specific period for approval specified in the Rule, but the 
application for delisting must be noticed for comment in the Federal 
Register, typically for a period of 15 business days.
---------------------------------------------------------------------------

    \111\ 17 CFR 240.12d2-2.
---------------------------------------------------------------------------

    The proposed amendments to Rule 12d2-2 and the Form 25 would 
simplify the deregistration and delisting requirements under the 
Exchange Act. The amendments would require both exchanges and issuers 
seeking to delist and deregister a class of securities to file the Form 
25 with the Commission on EDGAR. The application to delist a class of 
securities on Form 25 would be effective 10 days after filing with the 
Commission.\112\ However, withdrawal from Section 12(b) registration 
obligations would not be effective until 90 days after the Form 25 is 
filed. In addition, the Commission would no longer issue orders 
approving a delisting. Instead, the revised Form 25 with an attached 
exchange delisting decision would constitute adequate notice under 
Section 19(d) of the Exchange Act.
---------------------------------------------------------------------------

    \112\ The Commission receives comments on delisting applications 
infrequently and has not, in recent years, imposed any conditions on 
the delisting applications it approved. See supra note 66.
---------------------------------------------------------------------------

    The proposed amendments would also revise Rule 12d2-2 to specify 
the delisting requirements with which exchanges and issuers must 
comply. First, the Rule would require that each exchange have adequate 
delisting rules relating to notification to the issuer of a delisting, 
review and appeal of an exchange's delisting decision, and 
dissemination of notice of a delisting. This provision would include a 
requirement that the exchange give public notice of its decision to 
delist a class of securities, via a press release and posting on a Web 
site, no fewer than 10 days before the delisting on Form 25 becomes 
effective. In addition, the Rule would mandate that both issuers and 
exchanges follow these rules. Finally, the Rule would require that a 
delisting issuer certify that it has complied with applicable delisting 
rules of the exchange and state laws, submitted written notification to 
the exchange of its decision to delist at least 10 days before it files 
Form 25, and has widely disseminated notice of the delisting of its 
class of securities. Finally, the proposed rule would exclude options 
and securities futures from the delisting requirements, as amended, in 
the Rule.

A. Expected Benefits

    The proposed amendments will benefit issuers, exchanges, and 
investors. The use of Form 25 for all delistings should provide a 
uniform method of delisting a class of securities. In addition, the use 
of EDGAR as a method of filing the Form 25 should make information 
contained in Commission filings easily available to issuers, exchanges, 
and the investing public, without any corresponding increase in the 
time required for issuers to complete the Form 25. The electronic 
format of the information should facilitate research and data analysis 
and the use of EDGAR will facilitate more efficient storage, retrieval 
and analysis of delisting information. Quicker access to this 
information should not only facilitate review of the information, but 
also enhance the Commission's ability to study and address issues that 
relate to this information.
    The proposed amendments to Rule 12d2-2 should provide clarity to 
both issuers and exchanges. The requirement that all exchanges have 
specified rules relating to the delisting process would clarify the 
issues that both issuers and exchanges must address before filing a 
Form 25. Requiring issuers to certify that they have in fact followed 
the necessary steps in the delisting process would serve as a reminder 
to delisting issuers of the necessary procedures, and provide the 
public with adequate notice that a delisting has been properly 
effected.

[[Page 34871]]

    In addition, the proposed amendments, by exempting standardized 
options and security futures products from Rule 12d2-2, should 
eliminate the time exchanges currently spent filing applications to 
delist these products. The proposed amendments should also promote the 
comparable regulatory treatment of options and security futures. The 
exemption for standardized options and security futures should also 
provide clarity to market participants.

B. Expected Costs

    The Commission expects that the changes described above should 
streamline the delisting process and may result in a net reduction in 
the current costs borne by issuers and exchanges. No detrimental 
effects to investors are expected.
    The filing of Form 25 will impose costs on exchanges and issuers. 
Both exchanges and issuers would be required to spend time filling out 
Form 25 in connection with a delisting. In addition, exchanges may 
incur costs associated with the maintenance of EDGAR capabilities. 
However, the Form 25 is expected to be less time consuming than the 
method currently used to initiate a delisting; therefore, the 
administrative time burden associated with delisting would likely be 
lower than that of the current practice associated with delisting. With 
respect to EDGAR facilities, it is our understanding that the exchanges 
already have EDGAR capabilities. In addition, the costs associated with 
maintaining the technological facilities necessary to file Form 25 on 
EDGAR should be insignificant.
    The proposed requirement that an issuer that wishes to voluntarily 
delist represent on Form 25 that it has taken the steps necessary to 
comply with exchange rules and has provided adequate notice to the 
public, would impose costs on delisting issuers in the form of the time 
associated with completing the Form 25. The Commission believes, 
however, that issuers already bear this cost, as they are currently 
required to file a delisting application with the Commission. In fact, 
the proposed amendments should reduce the cost to issuers by 
eliminating the delisting application and replacing it with the revised 
Form 25. Currently, delisting applications are not granted until the 
Commission issues an order delisting and deregistering the class of 
securities, which may impose additional requirements on issuers until 
the order is issued by the Commission; however, a delisting on revised 
Form 25 would be effective 10 days after filing with the Commission. In 
addition, while the actual deregistration under Section 12(b) would not 
occur generally until 90 days later, an issuer's duty to file reports 
under Section 13(a) as a result of the Section 12(b) registration would 
be suspended upon the effective date of the delisting. Currently, an 
issuer must file such reports until the Commission issues its order to 
delist the security.
    In addition, the amendments to Rule 12d2-2 may impose costs on 
exchanges. The codification of the required delisting procedures may 
impose on exchanges a duty to change their rules. While most exchanges 
already require some of the proposed delisting requirements, some 
exchanges' rules would need to be changed. For example, not all of the 
stock exchanges currently have in their rules specific procedures 
regarding notice to the issuer of the exchange's decision to delist a 
class of securities. Therefore, the proposal would likely impose, on 
some exchanges, a cost associated with codifying the proposed 
notification requirement.
    Finally, the proposed amendments to Rule 12d2-2 could impose costs 
on exchanges relating to the review of delistings upon appeal to the 
Commission. Currently, any person aggrieved by a Commission action made 
by delegated authority may seek Commission review of the action. 
Accordingly, when the Commission issues an order striking a class of 
securities from listing and registration by delegated authority,\113\ 
an aggrieved party may petition the Commission for review of the 
delisting order. Thereafter, an aggrieved party may seek review in the 
U.S. Court of Appeals.\114\
---------------------------------------------------------------------------

    \113\ 17 CFR 200.30-3(a)(1).
    \114\ 15 U.S.C. 78y. An aggrieved party must petition the 
Commission for review of action made by delegated authority before 
seeking judicial review. 17 CFR 201.430(c).
---------------------------------------------------------------------------

    The proposal would result in a review process that is more like 
that associated with the delisting of Nasdaq securities, where an 
aggrieved party can appeal the NASD's delisting decision to the 
Commission as a denial of access, and the Commission must review the 
decision on a de novo basis. Under this process, the Commission 
requires the NASD to file a response to an appeal by the aggrieved 
party. The Commission's decision can be appealed to the U.S. Court of 
Appeals.
    The proposed amendments to Rule 12d2-2 would similarly require 
parties aggrieved by an exchange's delisting decision to appeal the 
decision to the Commission before going to the U.S. Court of Appeals. 
An exchange whose delisting decision was appealed would have to respond 
to an appeal, which would require the exchange to incur costs. Because 
the Commission is required to review petitions filed under Section 
19(d) of the Exchange Act, aggrieved parties could determine to avail 
themselves of the Commission appeal process more frequently. Thus 
exchanges may have to respond more often to such appeals if the 
proposed amendments to the delisting process are adopted. The 
Commission solicits comment on these potential costs. In addition, the 
Commission solicits comment as to whether the procedures for appeal of 
exchange delisting decisions would impose additional costs on aggrieved 
parties.

VI. Regulatory Flexibility Act Certification

    The Commission hereby certifies, pursuant to 5 U.S.C. Sec.  605(b), 
that the proposed amendments to Rule 12d2-2, if adopted, would not have 
a significant economic impact on a substantial number of small 
entities. The proposed amendments to Rule 12d2-2 would apply only to 
national securities exchanges and certain issuers of securities.
    Under Sec.  240.0-10(e) of the Act,\115\ an exchange is a ``small 
entity'' if it has been exempted from the reporting requirements of 
Section 240.11Aa3-1 of the Act,\116\ and is not affiliated with any 
person that is not a ``small business'' or ``small organization,'' as 
defined under Sec.  240.0-10 of the Act.\117\ The Commission has 
determined that none of the national securities exchanges are ``small 
entities'' because none have been exempted from Section 240.11Aa3-1 of 
the Act.
---------------------------------------------------------------------------

    \115\ 17 CFR 240.0-10(e).
    \116\ 17 CFR 240.11Aa3-1.
    \117\ 17 CFR 240.0-10(a).
---------------------------------------------------------------------------

    Under Sec.  240.0-10(a) of the Act,\118\ an issuer is a ``small 
entity'' if, on the last day of its most recent fiscal quarter, it had 
total assets of $5 million or less. Based on listing standards of the 
national securities exchanges, the number of companies that could 
potentially qualify as ``small entities'' under Sec.  240.0-10 of the 
Act \119\ represents an insubstantial percentage of the total number of 
companies listed on the national securities exchanges. All but two 
exchanges have listing standards that exceed this definition of a small 
entity. These issuers represent both an insubstantial percentage of all 
listed companies and an insubstantial

[[Page 34872]]

percentage of all issuers that are delisted and deregistered in any 
given year.
---------------------------------------------------------------------------

    \118\ 17 CFR 240.0-10(a).
    \119\ 17 CFR 240.0-10.
---------------------------------------------------------------------------

    The proposed amendment would permit issuers and exchanges to delist 
a class of securities using the Form 25 on EDGAR system, which should 
take less time, and be less costly, to complete than an application to 
delist. Therefore, while the Commission believes that some small 
issuers could be affected by the proposed amendment, the Commission 
does not believe that the proposed amendments would have a significant 
economic impact on a substantial number of small entities.
    The Commission encourages written comments regarding this 
certification. The Commission requests that commenters describe the 
nature of any impact on small entities and provide empirical data to 
support the extent of the impact.

VII. Small Business Regulatory Enforcement Fairness Act

    For purposes of the Small Business Regulatory Enforcement Fairness 
Act of 1996, or ``SBREFA,'' \120\ the Commission must advise the Office 
of Management and Budget as to whether the proposed regulation 
constitutes a ``major'' rule. Under SBREFA, a rule is considered 
``major'' where, if adopted, it results or is likely to result in:
---------------------------------------------------------------------------

    \120\ Pub. L. 104-121, Title II, 110 Stat. 857 (1996) (codified 
in various sections of 5 U.S.C., 15 U.S.C., and as a note to 5 
U.S.C. 601).
---------------------------------------------------------------------------

     An annual effect on the economy of $100 million or more 
(either in the form of an increase or a decrease);
     A major increase in costs or prices for consumers or 
individual industries; or
     Significant adverse effect on competition, investment, or 
innovation.
    If a rule is ``major,'' its effectiveness will generally be delayed 
for 60 days pending Congressional review. The Commission requests 
comment on the potential impact of the proposed regulation on the 
economy on an annual basis. Commenters are requested to provide 
empirical data and other factual support for their view to the extent 
possible.

VIII. Consideration of Impact on the Economy, Burden on Competition, 
and Promotion of Efficiency, Competition, and Capital Formation

    Section 3(f) of the Exchange Act \121\ requires the Commission, 
whenever it engages in rulemaking that requires it to consider or 
determine if an action is necessary or appropriate in the public 
interest, to consider if the action will promote efficiency, 
competition, and capital formation. Section 23(a)(2) of the Exchange 
Act \122\ requires the Commission, in making rules under the Exchange 
Act, to consider the impact that any such rule would have on 
competition. Section 23(a)(2) of the Exchange Act prohibits the 
Commission from adopting any rule that would impose a burden on 
competition not necessary or appropriate in furtherance of the purposes 
of the Exchange Act.
---------------------------------------------------------------------------

    \121\ 15 U.S.C. 78c(f).
    \122\ 15 U.S.C. 78w(a)(2).
---------------------------------------------------------------------------

    The Commission believes that the proposal would promote efficiency 
by streamlining the delisting and deregistration process. The proposed 
amendments establish one form that must be filled out for all 
delistings, whether voluntary or involuntary. As proposed to be 
revised, the Form 25 would inform the Commission and the public that a 
security previously traded on an exchange is no longer traded, and 
would enable the Commission to verify that a delisting has occurred in 
accordance with the rules of the exchange.
    Furthermore, the proposed amendments, by exempting standardized 
options and security futures products from Rule 12d-2, are expected to 
promote the comparable regulatory treatment of options and security 
futures. The proposed exemption for standardized options and security 
futures products would also provide clarity to market participants.
    The Commission does not believe that the proposed amendments would 
have any anti-competitive effects. Nor is the Commission aware of any 
impact on capital formation that would result from the proposed 
amendments. The Commission requests comment on whether the proposed 
amendments, if adopted, would affect competition, efficiency and 
capital formation. Commenters are requested to provide empirical data 
and other factual support for their views to the extent possible.

IX. Statutory Authority and Text of Proposed Rules

    Pursuant to the Exchange Act and particularly Sections 3(b), 12(d), 
and 23(a) thereof, 15 U.S.C. 78c, 78l, and 78w(a), the Commission is 
proposing amendments to Sec.  232.101, Sec.  240.12d2-2, Sec.  240.19d-
1, and Form 25 (referenced in 17 CFR 249.25) of Chapter II of Title 17 
of the Code of Federal Regulations in the manner set forth below. The 
Commission is also proposing the amendments to Sec.  232.101 pursuant 
to the Securities Act of 1933, and particularly Sections 6, 7, 10, and 
19(a) thereof, 15 U.S.C. 77f, 77g, 77h, 77j, and 77s(a).

List of Subjects

17 CFR Part 232

    Administrative practice and procedure, Confidential business 
information, Reporting and recordkeeping requirements, Securities.

17 CFR Part 240

    Issuers, Reporting and recordkeeping requirements, Securities.

17 CFR Part 249

    Reporting and recordkeeping requirements, Securities.

Text of Proposed Rule Amendments

    For the reasons set out in the preamble, the Commission proposes to 
amend Title 17, Chapter II of the Code of Federal Regulations as 
follows.

PART 232--REGULATION S-T--GENERAL RULES AND REGULATIONS FOR 
ELECTRONIC FILINGS

    1. The authority citation for part 232 continues to read in part as 
follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 77sss(a), 
78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll(d), 79t(a), 80a-8, 80a-
29, 80a-30 and 80a-37.
* * * * *
    2. Section 232.101 is amended by:
    a. Removing the word ``and'' at the end of paragraph (a)(1)(vii);
    b. Removing the period at the end of paragraph (a)(1)(viii), and in 
its place adding a semicolon;
    c. Removing the period at the end of paragraph (a)(1)(ix) and in 
its place adding ``; and'';
    d. Adding paragraph (a)(1)(x);
    e. Removing the word ``and'' at the end of paragraph (b)(7);
    f. Removing ``; and'' at the end of paragraph (b)(8) and in its 
place adding a period; and
    f. Removing paragraph (b)(9).
    The addition reads as follows:


Sec.  232.101  Mandated electronic submissions and exceptions.

    (a) * * *
    (1) * * *
    (x) Form 25 (Sec.  249.25 of this chapter).
* * * * *

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 
1934

    1. The authority citation for part 240 continues to read in part as 
follows:


    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 
78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 
78w, 78x, 78ll, 78mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-
3, 80b-

[[Page 34873]]

4, 80b-11, and 7201 et seq.; and 18 U.S.C. 1350, unless otherwise 
noted.

* * * * *
    2. Section 240.12d2-2 is amended by:
    a. Removing the authority citation following Sec.  240.12d2-2;
    b. Adding a ``Preliminary Note'' before paragraph (a);
    c. Revising the introductory text of paragraph (a), paragraphs 
(a)(4), (b), (c), (d), and (e); and
    d. Removing paragraph (f).
    The addition and revisions read as follows:


Sec.  240.12d2-2  Removal from listing and registration.

    Preliminary Note: The filing of the Form 25 (Sec.  249.25 of this 
chapter) by an issuer relates solely to the withdrawal of a class of 
securities from listing on a national securities exchange and/or from 
registration under section 12(b) of the Act (15 U.S.C. 78l(b)), and 
shall not affect its obligation to be registered under section 12(g) of 
the Act (15 U.S.C. 78l(g)), and/or reporting obligations under section 
15(d) of the Act (15 U.S.C. 78o(d)).
    (a) A national securities exchange must file with the Commission an 
application on Form 25 (17 CFR 249.25) to strike a class of securities 
from listing on a national securities exchange and/or registration 
under section 12(b) of the Act within a reasonable time after the 
national securities exchange is reliably informed that any of the 
following conditions exist with respect to such a security:
    (1) * * *
    (4) All rights pertaining to the entire class of the security have 
been extinguished; provided, however, that where such an event occurs 
as a result of an order of a court or other governmental authority, the 
order shall be final, all applicable appeal periods shall have expired, 
and no appeals shall be pending.
    (b) In cases not provided for in paragraph (a) of this section, a 
national securities exchange may file an application on Form 25 to 
strike a class of securities from listing and/or withdraw registration, 
in accordance with its rules, if the rules of such exchange, at a 
minimum, provide:
    (1) Notice to the issuer of the exchange's decision to delist its 
securities;
    (2) An opportunity for appeal to the national securities exchange's 
board of directors, or to a committee designated by the board; and
    (3) Public notice of the national securities exchange's final 
determination to remove the security from listing and/or registration, 
by issuing a press release and posting notice on its Web site. Public 
notice under this paragraph shall be disseminated no fewer than 10 days 
before the delisting on Form 25 becomes effective pursuant to paragraph 
(d)(1) of this section, and must remain posted on its Web site until 
the delisting is effective.
    (c) The issuer of a class of securities listed on a national 
securities exchange and/or registered under section 12(b) of the Act 
may file an application on Form 25 to notify the Commission of its 
withdrawal of such security from listing on such national securities 
exchange and its intention to withdraw the securities from registration 
under section 12(b) of the Act. An issuer filing Form 25 under this 
paragraph must represent on the Form 25 that the following requirements 
have been met:
    (1) The issuer has complied with all applicable laws in effect in 
the state in which it is incorporated and with the national securities 
exchange's rules governing an issuer's voluntary withdrawal of a class 
of securities from listing and/or registration;
    (2) The issuer has provided written notice to the national 
securities exchange of its determination to withdraw the class of 
securities from listing and/or registration on such exchange, which 
sets forth a description of the security involved together with a 
statement of all material facts relating to the reasons for withdrawal 
from listing and/or registration, no fewer than 10 days before the 
issuer files an application on Form 25 with the Commission. The 
national securities exchange must provide notice on its Web site of the 
issuer's intent to delist and/or withdraw from section 12(b) 
registration its securities upon such notification by the issuer, and 
such notice shall remain posted on its Web site until the delisting on 
Form 25 is effective pursuant to paragraph (d)(1) of this section;
    (3) The issuer has published notice of its intention to withdraw 
its class of securities from listing and/or registration from the 
national securities exchange, along with its reasons for such 
withdrawal, via a press release and, if it has a publicly accessible 
Web site, posting such notice on that Web site, no fewer than 10 days 
before the issuer's application for delisting on Form 25 becomes 
effective. Any notice provided on an issuer's Web site under this 
paragraph shall remain available until the delisting on Form 25 has 
become effective pursuant to paragraph (d)(1) of this section. If the 
issuer filing Form 25 under this paragraph has not arranged for listing 
and/or registration on another national securities exchange or for 
quotation of its security in a quotation medium (as defined in Sec.  
240.15c2-11), then the press release and posting on the Web site must 
contain this information.
    (d) (1) An application on Form 25 to strike a class of securities 
from listing on a national securities exchange will become effective 10 
days after Form 25 is filed with the Commission.
    (2) An application on Form 25 to withdraw the registration of a 
class of securities under section 12(b) of the Act will be considered 
effective 90 days, or such shorter period as the Commission may 
determine, after filing with the Commission.
    (3) The Commission may, however, by written notice to the exchange 
or issuer, postpone the effectiveness of deregistration to determine 
whether the application on Form 25 to strike the security from 
registration under section 12(b) of the Act has been made in accordance 
with the rules of the exchange, or what terms should be imposed by the 
Commission for the protection of investors.
    (4) Nothwithstanding paragraph (d)(2) of this section, whenever the 
Commission commences a proceeding against an issuer under section 12 of 
the Act prior to the withdrawal of the registration of a class of 
securities, such security will remain registered under section 12(b) of 
the Act until the final decision of such proceeding or until the 
Commission otherwise determines to suspend the effective date of, or 
revoke, the registration of a class of securities.
    (5) An issuer's duty to file any reports under section 13(a) of the 
Act (15 U.S.C. 78m(a)) and the rules and regulations thereunder solely 
because of such security's registration under section 12(b) of the Act 
will be suspended upon the effective date for the delisting pursuant to 
paragraph (d)(1) of this section. If, following the effective date of 
delisting on Form 25, the Commission, an exchange, or an issuer delays 
the withdrawal of a security's registration under section 12(b) of the 
Act, an issuer shall, within 60 days of such delay, file any reports 
that would have been required under section 13(a) of the Act and the 
rules and regulations thereunder, had the Form 25 not been filed. The 
issuer also shall timely file any subsequent reports required under 
section 13(a) of the Act for the duration of the delay.
    (6) An issuer whose reporting responsibilities under section 13(a) 
of the Act are suspended for a class of securities under paragraph 
(d)(5) of this section is, nevertheless, required to file any reports 
that an issuer with such a

[[Page 34874]]

class of securities registered under section 12 of the Act would be 
required to file under section 13(a) of the Act if such class of 
securities:
    (i) Is registered under section 12(g) of the Act (15 U.S.C. 
78l(g)); or
    (ii) Would be registered, or would be required to be registered, 
under section 12(g) of the Act but for the exemption from registration 
under section 12(g) of the Act provided by section 12(g)(2)(A) of the 
Act.
    (7) (i) An issuer whose reporting responsibilities under section 
13(a) of the Act are suspended under paragraph (d)(5) of this section 
is, nevertheless, required to file any reports that would be required 
under section 15(d) of the Act (15 U.S.C. 78o(d)) but for the fact that 
the reporting obligations are:
    (A) Suspended for a class of securities under paragraph (d)(5) of 
this section; and
    (B) Suspended, terminated, or otherwise absent under section 12(g) 
of the Act.
    (ii) The reporting responsibilities of an issuer under section 
15(d) of the Act shall continue until the issuer is required to file 
reports under section 13(a) of the Act or the issuer's reporting 
responsibilities under section 15(d) of the Act are otherwise 
suspended.
    (8) In the event removal is being effected under paragraph (a)(3) 
of this section and the national securities exchange has admitted or 
intends to admit a successor security to trading under the temporary 
exemption provided for by Sec.  240.12a-5, the effective date of the 
Form 25, as set forth in paragraph (d)(1) of this section, shall not be 
earlier than the date the successor security is removed from its exempt 
status.
    (e) The following are exempt from section 12(d) of the Act (15 
U.S.C. 78l(d)) and the provisions of this section:
    (1) Any standardized option, as defined in Sec.  240.9b-1, that is:
    (i) Issued by a clearing agency registered under section 17A of the 
Act (15 U.S.C. 78q-1); and
    (ii) Traded on a national securities exchange registered pursuant 
to section 6(a) of the Act (15 U.S.C. 78f(a)); and
    (2) Any security futures product that is:
    (i) Traded on a national securities exchange registered under 
section 6(a) of the Act (15 U.S.C. 77f(a)) or on a national securities 
association registered pursuant to section 15A(a) of the Act (15 U.S.C. 
78o-3(a)); and
    (ii) Cleared by a clearing agency registered as a clearing agency 
pursuant to section 17A of the Act (15 U.S.C. 78q-1) or is exempt from 
registration under section 17A(b)(7) of the Act.
    3. Section 240.19d-1 is amended by:
    a. Removing the authority citation at the end of Sec.  240.19d-1;
    b. Adding an undesignated center heading after paragraph (i);
    c. Adding paragraph (j);
    d. Adding an undesignated center heading after paragraph (j); and
    e. Adding paragraph (k).
    The additions read as follows:


Sec.  240.19d-1  Notices by self-regulatory organizations of final 
disciplinary actions, denials, bars, or limitations respecting 
membership, association, participation, or access to services, and 
summary suspensions.

* * * * *

Notice of Limitation or Prohibition of Access to Services by Delisting 
of Security

    (j) Any national securities exchange for which the Commission is 
the appropriate regulatory agency that delists a security pursuant to 
section 12(d) of the Act (15 U.S.C. 78l(d)), and Sec.  240.12d2-2 must 
file a notice with the Commission in accordance with paragraph (k) of 
this section.

Contents of Notice Required by Paragraph (j)

    (k) The national securities exchange shall file notice pursuant to 
paragraph (j) of this section on Form 25 (Sec.  249.25 of this 
chapter). Form 25 shall serve as notification to the Commission of such 
limitation or prohibition of access to services. The national 
securities exchange must attach a copy of its delisting determination 
to Form 25 and file Form 25 with the attachment on EDGAR.

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

    1. The authority citation for part 249 continues to read in part as 
follows:


    Authority: 15 U.S.C. 78a et seq. and 7201 et seq.; and 18 U.S.C. 
1350 unless otherwise noted.
* * * * *
    2. Section 249.25 and Form 25 are revised to read as follows:


Sec.  249.25  Form 25, for notification of removal from listing and/or 
registration.

    This form shall be used by registered national securities exchanges 
and issuers for notification of removal of a class of securities from 
listing on a national securities exchange and/or withdrawal of 
registration under section 12(b) of the Act (15 U.S.C. 78l(b)).

    Note: The text of Form 25 does not, and this amendment will not, 
appear in the Code of Federal Regulations.

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[[Page 34876]]

General Instructions

    1. This form is required by Rule 12d2-2 (17 CFR 240.12d2-2) of the 
General Rules and Regulations under the Securities Exchange Act of 1934 
(``Exchange Act'').
    2. Exchanges: Attach the delisting determination to this Form 25 to 
serve as the required Notice pursuant to Exchange Act Rule 19d-1 (17 
CFR 240.19d-1). Form 25 and the attached Notice will be considered 
compliance with the provisions of Rule 19d-1 as applicable.
    3. The Form 25 and any attachments must be filed electronically on 
the EDGAR database.
    4. The removal of the class of securities from listing on the 
exchange shall be effective 10 days after filing the Form 25.
    5. The withdrawal of registration of a class of securities 
registered under Section 12(b) of the Exchange Act shall take effect in 
90 days, or such shorter period as the Commission may determine, after 
the exchange or issuer files a Form 25 with the Commission.
    6. For purposes of Section 12 of the Exchange Act, a class of 
securities shall no longer be considered listed on a national 
securities exchange upon the effective date of delisting even though 
the withdrawal of registration is effective at a later time.
    7. The issuer's duty to file any reports under Section 13(a) of the 
Exchange Act and the rules and regulations thereunder as a result of 
the security's registration under Section 12(b) of the Exchange Act 
shall be suspended upon the effective date of the delisting. If, 
following the effective date of delisting, the withdrawal of 
registration under Section 12(b) is delayed by the Commission, an 
exchange, or an issuer, the issuer shall, within 60 days of such delay, 
file any reports that would have been required under Section 13(a) and 
the rules and regulations thereunder, had the Form 25 not been filed. 
The issuer will also file any subsequent reports required under Section 
13(a) for the duration of the delay.
    8. An issuer whose reporting responsibilities under Section 13(a) 
of the Exchange Act are suspended for a class of securities under Rule 
12d2-2(d)(5) is, nevertheless, required to file any reports that an 
issuer with such a class of securities registered under Section 12 of 
the Exchange Act would be required to file under Section 13(a) if such 
class of securities: (1) is registered under Section 12(g) of the 
Exchange Act; or (2) would be registered, or would be required to be 
registered, under Section 12(g) of the Exchange Act but for the 
exemption from registration under Section 12(g) provided by Section 
12(g)(2)(A) of the Exchange Act.
    9. An issuer whose reporting responsibilities under Section 13(a) 
of the Exchange Act are suspended under Rule 12d2-2(d)(5) is, 
nevertheless, required to file any reports that would be required under 
Section 15(d) of the Exchange Act but for the fact that the reporting 
obligations are: (1) Suspended for a class of securities under Rule 
12d2-2(d)(5); and (2) suspended, terminated, or otherwise absent under 
Section 12(g) of the Exchange Act. The reporting responsibilities of an 
issuer under Section 15(d) of the Exchange Act shall continue until the 
issuer is required to file reports under Section 13(a) of the Exchange 
Act or the issuer's reporting responsibilities under Section 15(d) are 
otherwise suspended.
    10. Issuers should determine if they have additional registration 
and reporting requirements under Section 12(g) of the Exchange Act and 
reporting obligations pursuant to Section 15(d) of the Exchange Act 
upon the filing of Form 25.
    11. In any case where the Commission has commenced a proceeding 
under Section 12 of the Exchange Act prior to the withdrawal of the 
registration of a class of securities becoming effective, such security 
will remain registered under Section 12(b) of the Exchange Act until 
the final decision of such proceeding, or until the Commission 
otherwise determines to suspend the effective date of, or revoke, the 
registration of a class of securities.
    12. In the event removal is being effected under paragraph (a)(3) 
of Rule 12d2-2 and the national securities exchange has admitted or 
intends to admit a successor security to trading under the temporary 
exemption provided for by Exchange Act Rule 12a-5 (17 CFR 240.12a-5) 
the Form 25 shall be filed with the Commission in a manner that ensures 
that the delisting does not become effective until the successor 
security is removed from its exempt status.

    By the Commission.

    Dated: June 15, 2004.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-13965 Filed 6-21-04; 8:45 am]
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