Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the American Stock Exchange, Inc. Relating to Foreign Listing Standards

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-33864; International Series Release No. 646; File No.

SR-Amex-94-04]

Self-Regulatory Organizations; Notice of Filing of Proposed Rule

Change by the American Stock Exchange, Inc. Relating to Foreign Listing

Standards

April 5, 1994.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on February

23, 1994, the American Stock Exchange, Inc. (``Amex'' or ``Exchange'')

filed with the Securities and Exchange Commission (``Commission'') the

proposed rule change as described in Items I, II and III below, which

Items have been prepared by the self-regulatory organization. The

Commission is publishing this notice to solicit comments on the

proposed rule change from interested persons.

I. Self-Regulatory Organization's Statement of the Terms of

Substance of the Proposed Rule Change

The Exchange is proposing to amend Section 110 of the Company Guide

to allow non-U.S. issuers to provide their U.S. shareholders with

summary annual reports under certain circumstances. The following is

the text of the proposed rule change, with italics representing the

language to be added:

Section 110. Securities of Foreign Companies * * *

(d) Disclosure--The Exchange will require the company to: (i)

furnish to American shareholders an English language version of its

annual financial statements and all other materials regularly

provided to other shareholders, and (ii) publish, at least semi-

annually, an English language version of its interim financial

statements. In addition, the Exchange will permit non-U.S. issuers

to follow home country practices regarding the distribution of

annual reports to shareholders, if, at a minimum, shareholders (i)

are provided at least summary annual reports and (ii) have the

ability, upon request, to receive a complete annual report, and the

financial information contained in the summary annual report is

reconciled to U.S. generally accepted accounting principles to the

extent that such reconciliation would be required in the full annual

report.

II. Self-Regulatory Organization's Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, the self-regulatory organization

included statements concerning the propose of and basis for the

proposed rule change and discussed any comments it received on the

proposed rule change. The text of these statements may be examined at

the places specified in Item IV below. The self-regulatory organization

has prepared summaries, set forth in Sections A, B, and C below, of the

most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule Change

1. Purpose

In 1990 the U.K. Companies Act was amended to permit issuers listed

on the London Stock Exchange to provide holders of their ordinary

shares with an option to receive either a full annual report or a

summary annual report. The U.K. Companies Act sets forth the specific

financial and management information that must be contained in the

summary reports, and requires that shareholders who receive only the

summary report be given the opportunity, at any time, to obtain the

full annual report from the company and that companies must notify

shareholders annually of this right and how the report might be

obtained. When the amendments first became effective, shareholders

received both reports and notice of the available option with respect

to future reports.

The purpose of the amendments was to provide: (1) Potential cost

savings to issuers, and (2) a more easily read document to retail

holders. A majority of U.K. shareholders now receive the summary

reports, and the amendments are viewed as successful.

Certain U.K. issuers would now like to provide U.S. holders of

listed ADRs with summary reports in place of full annual reports if the

holders do not object. The Commission recently approved a New York

Stock Exchange (``NYSE'') rule change which allows non-U.S. issuers

which are NYSE-listed to mail summary annual reports to U.S. share/ADR

holders in lieu of the full annual report, if permitted by home country

practice.\1\

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\1\See Securities Exchange Act Release No. 33661, International

Series Release No. 637 (February 23, 1994), 59 FR 10028 (March 2,

1994).

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The Exchange is proposing to similarly amend Section 110 of the

Exchange's Company Guide, which is comparable to the NYSE provision

described above. Section 110 currently allows the Exchange to consider

the laws, customs and practices of the country where a non-U.S. issuer

is domiciled in evaluating the listing eligibility of a company whose

corporate structure or practices are inconsistent with specified rules

which apply to domestic companies, but requires that a full annual

report be provided to all U.S. share/ADR holders.

Under the proposed amendment, a U.S. holder would initially receive

both reports and then be provided with an ongoing option to receive

either report.\2\ The summary report would set forth such financial and

other information as is required by home country law and would be

required to include a U.S. GAAP reconciliation to the same extent as

would be required in the full annual report. The change would have no

impact on the issuer's existing annual and semi-annual SEC reporting

obligations.

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\2\The Commission notes that, although the U.K. Companies Act

requires that shareholders initially receive both reports, the

language of the proposed Amex rule permits non-U.S. issuers to

follow home country practices, which may not contain this

requirement.

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The proposed amendment is consistent with the Exchange's existing

policies with respect to non-U.S. companies, which permits such

companies to follow home country practice in such areas as interim

reporting and corporate governance.

2. Statutory Basis

The proposed rule change is consistent with Section 6(b) of the Act

in general and furthers the objectives of Section 6(b)(5) in particular

in that it is designed to foster cooperation and coordination with

persons engaged in regulating transactions in securities and to protect

investors and the public interest.

B. Self-Regulatory Organization's Statement on Burden on Competition

The proposed rule change will impose no burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed

Rule Change Received from Members, Participants or Others

No written comments were solicited or received with respect to the

proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing

for Commission Action

Within 35 days of the publication of this notice in the Federal

Register or within such other period (i) as the Commission may

designate up to 90 days of such date if it finds such longer period to

be appropriate and publishes its reasons for so finding or (ii) as to

which the self-regulatory organization consents, the Commission will:

(A) By order approve the proposed rule change, or

(B) Institute proceedings to determine whether the proposed rule

change should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to submit written data, views and

arguments concerning the foregoing. Persons making written submissions

should file six copies thereof with the Secretary, Securities and

Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549.

Copies of the submission, all subsequent amendments, all written

statements with respect to the proposed rule change that are filed with

the Commission, and all written communications relating to the proposed

rule change between the Commission and any person, other than those

that may be withheld from the public in accordance with the provisions

of 5 U.S.C. Sec. 552, will be available for inspection and copying at

the Commission's Public Reference Section, 450 Fifth Street, NW.,

Washington, DC 20549. Copies of such filing will also be available for

inspection and copying at the principal office of the Amex. All

submissions should refer to File No. SR-Amex-94-04 and should be

submitted by [insert date 21 days from date of publication].

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-8628 Filed 4-11-94; 8:45 am]

BILLING CODE 8010-01-M