| Release No. 34-16421 December 12, 1979
Applications For Extension Of Unlisted Trading Privileges
ACTION: Final rule amendment.SUMMARY: The Commission is amending Rules 12f-1 and 12f-3 17 CFR §§240.12f-1, f-3 under the Securities Exchange Act of 1934 (the "Act") to conform the text to those rules to Section 12(f) of the Act, as amended by the Securities Acts Amendments of 1975. Rule 12f-1 sets forth the items of information required to be filed by a national securities exchange in applying for unlisted trading privileges in a security pursuant to Section 12(f) of the Act. Rule 12f-3 sets forth items of information required to be filed by an interested person in applying for the termination or suspension of unlisted trading privileges in a particular security. EFFECTIVE DATE: 30 days after publication in the Federal Register FOR FURTHER INFORMATION CONTACT: Curt H. Mueller, Office of the General Counsel Securities and Exchange Commission Washington, D.C. 20549 (202) 272-2448. SUPPLEMENTARY INFORMATION: Rule 12f-1 requires a national securities exchange, in applying to the Commission for unlisted trading privileges in a security pursuant to Section 12(f) of the Act,
1 to include in its application information concerning, among other things, the public distribution and volume of public trading of such security in the geographical vicinity of the applicant exchange.
2 The rule also requires an exchange to furnish in its application "any other information which is deemed pertinent to the question of whether the * * * extension of unlisted trading privileges in a security is necessary or appropriate in the public interest or for the protection of investors."
3 Rule 12f-3(a) requires an interested person, in applying for the termination or suspension of unlisted trading privileges in a security pursuant to Section 12(f)(4) of the Act,
4 to set forth, among other things, in its application "information in the applicants possession, and the sources thereof, with respect to * * * the extent of public distribution of such security in the vicinity of such exchange and the geographical area which is deemed to constitute such vicinity."
5 Since the Commissions last amendments to Rules 12f-1 and 12f-3 in 1955,
6 Congress has twice amended Section 12(f) of the Act. First, in 1964, Congress deleted the "geographical vicinity" standard which had, in part, governed the grant of unlisted trading privileges, and required instead that the Commission simply find the grant of unlisted trading privileges to be "necessary or appropriate in the public interest or for the protection of investors."
7 Second, in the Securities Acts Amendments of 1975,
8 Congress replaced the "necessary or appropriate" standard with the requirement that the Commission find the extension of unlisted trading privileges to be "consistent with the maintenance of fair and orderly markets and the protection of investors."
9 In view of these statutory changes, the Commission is amending Rules 12f-1 and 12f-3 so that the procedural filing requirements of those rules reflect the current standards set forth in Section 12(f) of the Act. Accordingly, the Commission is amending Rules 12f-1 and 12f-3 to delete the requirement that information concerning the distribution or trading volume of a security in the "geographical vicinity" of an exchange be furnished in applications for the extension, termination or suspension of unlisted trading privileges. In addition, the Commission is amending Rule 12f-1 by deleting the requirement that an applicant exchange set forth information bearing on whether the grant of unlisted trading privileges is "necessary or appropriate in the public interest or for the protection of investors." Instead, Rule 12f-1 is amended to require an applicant exchange to furnish any other information addressing whether the grant of unlisted trading privileges would be "consistent with the maintenance of fair and orderly markets and the protection of investors." Finally, the Commission is amending Rule 12f-1 to require that an exchange set forth in its application for unlisted trading privileges in a particular security (1) the name of each exchange on which such security is listed or admitted to unlisted trading privileges, and (2) whether transactions in such security are reported in the consolidated transaction reporting system established pursuant to Rule 17a-15 under the Act. The Commission finds, in accordance with 5 U.S.C. §553(b)(A) of the Administrative Procedure Act, that the foregoing action relates solely to agency organization, procedure, or practice and that notice and public procedures in accordance with 5 U.S.C. §553(b) are not necessary. Further, in accordance with Section 23(a)(2) of the Securities Exchange Act, 15 U.S.C. 78w(a)(2), the Commission perceives no impediment to competition arising from adoption of these procedural rule amendments. AMENDMENTS Accordingly, the Commission, acting pursuant to the Securities Exchange Act, and particularly Sections 12(f) and 23 thereof, 15 U.S.C. 78(f) and 78w, adopts these amendments to Rules 12f-1 and 12f-3 17 C.F.R. §240.12f-1, 12f-3 effective 30 days after publication in the Federal Register. Part 240 of Title 17 of the Code of Federal Regulations is amended as follows: Section 240.12f-1 is revised to read as follows: §240.12f-1: Applications for permission to extend unlisted trading privileges. (a) An application may be made to the Commission by any national securities exchange for the extension of unlisted trading privileges to any security, pursuant to section 12(f). One copy of such application, executed by a duly authorized officer of the exchange, shall be filed and shall set forth: (1) Name of issuer; (2) Title of security; (3) The name of each national securities exchange, if any, on which such security is listed or admitted to unlisted trading privileges; and (4) Whether last sale information concerning such security is reported in the consolidated transaction reporting system established pursuant to §240.17a-15 (Rule 17a-15 under the Act); and (5) Any other information which is deemed pertinent to the question of whether the continuation or extension of unlisted trading privileges in such security is consistent with the maintenance of fair and orderly markets and the protection of investors. Paragraph (a)(8) of §240.12f-13 is revised to read as follows: §240.12f-3 Termination or suspension of unlisted trading privileges.
(a) * * * (8) A brief statement of the information in the applicants possession, and the sources thereof, with respect to (i) the extent of public trading in such security on such exchange, and (ii) the character of trading in such security on such exchange. By the Commission. SEC_CODE_REF_0090001192884
1Sections 12(f) (1),(2) of the Act, 15 U.S.C. 78(f)(1),(2), provide that: (f)(1) Notwithstanding the foregoing provisions of this section, any national securities exchange, subject to the terms and conditions hereinafter set forth-
(A) may continue unlisted trading privileges to which a security had been admitted on such exchange prior to July 1, 1964; (B) upon application to and approval of such application by the Commission, may extend unlisted trading privileges to any security listed and registered on any other national securities exchange; and (C) upon application to and approval of such application by the Commission, may extend unlisted trading privileges to any security registered pursuant to section 12 of this title or which would be required to be so registered except for the exemption from registration provided in subsection (g)(2)(B) or (g)(2)(G) of that section. If an extension of unlisted trading privileges to a security is based upon its listing and registration on another national securities exchange, such privileges shall continue in effect only so long as such security remains listed and registered on a national securities exchange.
(2) No application pursuant to this subsection shall be approved unless the Commission finds, after notice and opportunity for hearing, that the extension of unlisted trading privileges pursuant to such application is consistent with the maintenance of fair and orderly markets and the protection of investors. In considering an application for the extension of unlisted trading privileges to a security not listed and registered on a national securities exchange, the Commission shall, among other matters, take account of the public trading activity in such security, the character of such trading, the impact of such extension on the existing markets for such securities, and the desirability of removing impediments to and the progress that has been made toward the development of a national market system and shall not grant any such application if any rule of the national securities exchange making application under this subsection would unreasonably impair the ability of any dealer to solicit or effect transactions in such security for his own account, or would unreasonably restrict competition among dealers in such security or between such dealers acting in that capacity of market makers who are specialists and such dealers who are not specialists.
4Section 12(f)(4) of the Act, 15 U.S.C. 78(f)(4), provides that:
(4) On the application of the issuer of any security for which unlisted trading privileges on any exchange have been continued or extended pursuant to this subsection, or of any broker or dealer who makes or creates a market for such security, or of any other person having a bona fide interest in the question of termination or suspension of such unlisted trading privileges, or on its own motion, the Commission shall by order terminate, or suspend for a period not exceeding twelve months, such unlisted trading privileges for such security if the Commission finds, after appropriate notice and opportunity for hearing, that such termination or suspension is necessary or appropriate in the public interest or for the protection of investors.
6Securities Exchange Act Release No. 5221 (August 31, 1955), 20 F.R. 6701 (September 13, 1955).
7Securities Acts Amendments of 1964, Pub. L. No. 88-467, §3(b), 78 Stat. 565-566. Prior to 1964, Section 12(f), required applicants for unlisted trading privileges to: establish to the satisfaction of the Commission that there exists in the vicinity of such exchange sufficiently widespread public distribution of such security and sufficient public trading activity therein to render the extension of unlisted trading privileges * * * necessary or appropriate in the public interest or for the protection of investors. Pub. L. No. 621, §1, 49 Stat. 1375.
8Pub. L. No. 94-29 (June 4, 1975).
9Section 12(f)(2), 15 U.S.C. 78I(f)(2). |
