Self-Regulatory Organizations; New York Stock Exchange LLC; Order Approving Proposed Rule Change To Clarify Amendments to “Other Securities” Initial Listing Standards, 80490-80491 [E8-31052]
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Federal Register / Vol. 73, No. 251 / Wednesday, December 31, 2008 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59139; File No. SR–NYSE–
2008–109]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Order
Approving Proposed Rule Change To
Clarify Amendments to ‘‘Other
Securities’’ Initial Listing Standards
December 22, 2008.
I. Introduction
On October 31, 2008, New York Stock
Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to amend Section 703.19 of the
Exchange’s Listed Company Manual
(the ‘‘Manual’’), the Exchange’s initial
listing standards for ‘‘Other Securities.’’
The proposed rule change was
published in the Federal Register on
November 19, 2008.3 The Commission
received no comments on the proposal.
This order approves the proposed rule
change.
II. Description of the Proposal
The Exchange proposed to amend
Section 703.19 of the Manual 4 to state
that companies whose securities that are
not listed on the Exchange and wish to
list securities under Section 703.19
must meet one of the Exchange’s
financial original listing standards for
equity listings, but need not meet any of
the other initial listing requirements set
forth in Section One of the Manual.
Currently, a company who wishes to
list securities on the NYSE but whose
securities do not fall under the
traditional listing standards for common
stock, preferred stock, debt securities,
warrants, or under parts of the Manual,
may list such securities under Section
703.19 of the Manual. In order to list
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 58928
(November 10, 2008), 73 FR 69706 (‘‘Notice’’).
4 Section 703.19 was adopted to provide the
Exchange with the flexibility to list securities that
could not be readily categorized under the
Exchange’s traditional listing standards for common
and preferred stocks, debt securities and warrants.
Section 703.19 was intended to provide flexibility
to enable the Exchange to consider the listing of
new securities on a case-by-case basis, in light of
the suitability of the issue for auction market
trading. Section 703.19 is not intended to
accommodate the listing of securities that raise
significant new regulatory issues, which would
require a separate filing with the Commission. See
Securities Exchange Act Release No. 28217 (July 18,
1990) 55 FR 30056 (July 24, 1990) (SR–NYSE–90–
30).
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2 17
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17:41 Dec 30, 2008
Jkt 217001
these securities, they must meet the
following criteria. First, if the company
currently has securities listed on NYSE,
the company must be in good standing.5
If the company does not have securities
listed on NYSE, the company must meet
the initial common stock listing
standards set forth in Sections 102.01 to
102.03 and 103.01 to 103.05 of the
Manual. Second, equity securities must
have at least (1) One million securities
outstanding; (2) 400 holders; and (3) $4
million in market value and debt
securities must have a minimum public
market value of $4 million.
The Exchange proposes to change the
requirement for companies that do not
have securities listed on NYSE to meet
the Exchange’s initial common stock
listing standards as set forth in Sections
102.01 to 102.03 and 103.01 to 103.05
of the Manual. As proposed, such
companies must meet one of the
financial standards in Section 102.01C
and for foreign companies, Section
103.01B.
The Exchange also proposes to
remove the sub-heading ‘‘Earnings/Net
Tangible Assets’’ from the second
paragraph of Section 703.19.
III. Discussion and Commission’s
Findings
The Commission has carefully
reviewed the proposed rule change and
finds that it is consistent with the
requirements of Section 6 of the Act 6
and the rules and regulations
thereunder applicable to a national
securities exchange.7 In particular, the
Commission finds that the proposal is
consistent with Section 6(b)(5) of the
Act,8 which requires, among other
things, that the Exchange’s rules be
designed to promote just and equitable
principles of trade, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest.
The development and enforcement of
adequate standards governing the initial
listing of securities on an exchange is an
activity of critical importance to
financial markets and the investing
public. Listing standards, among other
things, serve as a means for an exchange
to screen issuers and to provide listed
status only to bona fide companies that
5 See Section 703.19 of the Manual. If the
company is an affiliate of a NYSE-listed company,
the NYSE-listed company must be in good standing.
6 15 U.S.C. 78f.
7 In approving this proposed rule change the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
8 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00130
Fmt 4703
Sfmt 4703
have sufficient public float, investor
base, and trading interest to provide the
depth and liquidity necessary to
promote fair and orderly markets.
Adequate standards are especially
important given the expectations of
investors regarding exchange trading
and the imprimatur of listing on a
particular market.
Under the proposal, companies with
securities that are not listed on NYSE
and who wish to list securities under
Section 703.19 must now meet one of
four financial listing standards under
Section 102.01C of the Manual.9 Under
the proposal, companies who are foreign
private issuers must meet one of three
financial listing standards under Section
103.01B of the Manual.10 The Exchange
represented that it has not imposed the
other standards in Sections 102.01 to
102.03 or Sections 103.01 to 103.05, as
the Exchange has applied these other
standards to the common stock.
The Commission notes that, as
proposed, the numerical listing
standards under proposed Section
703.19 would be similar to the
numerical listing standards for ‘‘other
securities’’ on other exchanges.11 The
Commission also notes that the
proposed change would apply only for
companies whose securities are not
otherwise listed on the Exchange. In
addition, the Commission notes that
Section 703.19 currently provides
public float and distribution listing
standards.
Furthermore, the Commission
believes that the proposal to remove the
obsolete sub-heading ‘‘Earnings/Net
Tangible Assets’’ from Section 703.19
should eliminate any potential
confusion.
The Commission believes the
proposed rule change is reasonable and
should continue to provide for the
listing of securities with sufficient depth
and liquidity to maintain fair and
orderly markets. Accordingly, the
Commission believes that the changes
are consistent with the requirements of
the Act.
9 Section 102.01C of the Manual lists four
different financial standards for companies to
qualify for listing on the Exchange: (1) Earnings
Test; (2) Valuation/Revenue Test; (3) Affiliated
Company Test; or (4) Assets and Equity Test.
10 Section 103.05B of the Manual lists three
different financial standards for companies who are
foreign private issuers to qualify for listing on the
Exchange: (1) Earnings Test; (2) Valuation/Revenue
Test; or (3) Affiliated Company Test.
11 See e.g., Nasdaq Marketplace Rule 4420(f),
Section 107 of the Amex Company Guide, and
NYSE Arca Rule 5.2(j)(1).
E:\FR\FM\31DEN1.SGM
31DEN1
Federal Register / Vol. 73, No. 251 / Wednesday, December 31, 2008 / Notices
III. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,12 that the
proposed rule change (SR–NYSE–2008–
109) be, and it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–31052 Filed 12–30–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59143; File No. SR–NYSE–
2008–135]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by New York
Stock Exchange LLC To Extend to
March 27, 2009, the Operative Date of
New York Stock Exchange Rule 2
Requirement That NYSE-Only Member
Organizations Apply for and Be
Approved as a Member of the Financial
Industry Regulatory Authority, Inc.
December 22, 2008.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on December
22, 2008, New York Stock Exchange
LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory 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
pwalker on PROD1PC71 with NOTICES
The Exchange proposes to extend to
March 27, 2009, the operative date of
New York Stock Exchange (‘‘NYSE’’ or
the ‘‘Exchange’’) Rule 2 requirement
that NYSE-only member organizations
apply for and be approved as a member
of the Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’).
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
13 17
17:41 Dec 30, 2008
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in Sections A, B, and C below,
of the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange is proposing to extend
to March 27, 2009, the grace period for
NYSE-only member organizations to
apply for and be approved as a FINRA
member, as required by NYSE Rule 2.
In connection with the consolidation
of NASD and NYSE Regulation member
firm regulation operations into FINRA,
which closed on July 30, 2007, the
Exchange amended NYSE Rule 2 to
require NYSE member organizations to
also be FINRA members.4 In connection
with those rule changes, the
Commission approved a 60-day grace
period within which NYSE-only
member organizations must apply for
and be approved for FINRA
membership. In that rule filing, NYSEonly member organizations were
defined as those member organizations
that were not NASD members as of the
date of the closing of the FINRA
transaction. This grace period began on
October 12, 2007, the date of
Commission approval of the Exchange’s
rule filing. In furtherance of the
consolidation, FINRA adopted NASD
IM–1013–1 to enable eligible NYSE
member organizations to become FINRA
members though an expedited process
(the ‘‘FINRA Waive-in application
process’’).5
At the close of the 60-day grace
period, all but two of the former NYSEonly member organizations had applied
for and been approved as FINRA
members. On December 12, 2007, the
Exchange filed for an extension of the
grace period to June 30, 2008 for those
4 See Securities Exchange Act Release No. 34–
56654 (Oct. 12, 2007), 72 FR 59129 (Oct. 18, 2007)
(SR–NYSE–2007–67).
5 See Securities Exchange Act Release No. 34–
56653 (Oct. 12, 2007), 72 FR 59127 (Oct. 18, 2007)
(SR–NASD–2007–56).
12 15
VerDate Aug<31>2005
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
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Fmt 4703
Sfmt 4703
80491
two firms.6 On June 30, 2008, the
Exchange filed for another extension of
the grace period to December 31, 2008.7
In that filing, the Exchange noted that
those two firms had unique member
qualification issues and were ineligible
to participate in the FINRA Waive-in
application process. As of December 19,
2008, one of those two firms has been
approved as a FINRA member. With
respect to the other firm, because the
Exchange is working on a rule filing to
amend Rule 2 to permit a broker dealer
to be an NYSE member organization
without a FINRA membership, the
Exchange believes that the grace period
should be further extended so that the
remaining firm does not have to reapply for Exchange membership if the
proposed change to Rule 2 is approved.
Accordingly, the NYSE proposes to
extend the grace period to March 27,
2009 for the firm that was an NYSE
member organization as of July 30, 2007,
but not a FINRA member.
2. Statutory Basis
The basis under the Act for this
proposed rule change is the requirement
under Section 6(b)(5) 8 that an Exchange
have rules that are designed to promote
just and equitable principles of trade, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system and, in
general, to protect investors and the
public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
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
The foregoing rule change is being
filed for immediate effectiveness
pursuant to Section 19(b)(3)(A) 9 of the
6 See Securities Exchange Act Release No. 34–
56953 (Dec. 12, 2007), 72 FR 71990 (Dec. 19, 2007)
(SR–NYSE–2007–115).
7 See Securities Exchange Act Release No. 34–
58096 (July 3, 2008), 73 FR 39764 (July 10, 2008)
(SR–NYSE–2008–54).
8 15 U.S.C. 78f(b)(5).
9 15 U.S.C. 78s(b)(3)(A).
E:\FR\FM\31DEN1.SGM
31DEN1
]]>Agencies
[Federal Register Volume 73, Number 251 (Wednesday, December 31, 2008)]
[Notices]
[Pages 80490-80491]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-31052]
[[Page 80490]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59139; File No. SR-NYSE-2008-109]
Self-Regulatory Organizations; New York Stock Exchange LLC; Order
Approving Proposed Rule Change To Clarify Amendments to ``Other
Securities'' Initial Listing Standards
December 22, 2008.
I. Introduction
On October 31, 2008, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend Section 703.19 of the Exchange's Listed
Company Manual (the ``Manual''), the Exchange's initial listing
standards for ``Other Securities.'' The proposed rule change was
published in the Federal Register on November 19, 2008.\3\ The
Commission received no comments on the proposal. This order approves
the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 58928 (November 10,
2008), 73 FR 69706 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposal
The Exchange proposed to amend Section 703.19 of the Manual \4\ to
state that companies whose securities that are not listed on the
Exchange and wish to list securities under Section 703.19 must meet one
of the Exchange's financial original listing standards for equity
listings, but need not meet any of the other initial listing
requirements set forth in Section One of the Manual.
---------------------------------------------------------------------------
\4\ Section 703.19 was adopted to provide the Exchange with the
flexibility to list securities that could not be readily categorized
under the Exchange's traditional listing standards for common and
preferred stocks, debt securities and warrants. Section 703.19 was
intended to provide flexibility to enable the Exchange to consider
the listing of new securities on a case-by-case basis, in light of
the suitability of the issue for auction market trading. Section
703.19 is not intended to accommodate the listing of securities that
raise significant new regulatory issues, which would require a
separate filing with the Commission. See Securities Exchange Act
Release No. 28217 (July 18, 1990) 55 FR 30056 (July 24, 1990) (SR-
NYSE-90-30).
---------------------------------------------------------------------------
Currently, a company who wishes to list securities on the NYSE but
whose securities do not fall under the traditional listing standards
for common stock, preferred stock, debt securities, warrants, or under
parts of the Manual, may list such securities under Section 703.19 of
the Manual. In order to list these securities, they must meet the
following criteria. First, if the company currently has securities
listed on NYSE, the company must be in good standing.\5\ If the company
does not have securities listed on NYSE, the company must meet the
initial common stock listing standards set forth in Sections 102.01 to
102.03 and 103.01 to 103.05 of the Manual. Second, equity securities
must have at least (1) One million securities outstanding; (2) 400
holders; and (3) $4 million in market value and debt securities must
have a minimum public market value of $4 million.
---------------------------------------------------------------------------
\5\ See Section 703.19 of the Manual. If the company is an
affiliate of a NYSE-listed company, the NYSE-listed company must be
in good standing.
---------------------------------------------------------------------------
The Exchange proposes to change the requirement for companies that
do not have securities listed on NYSE to meet the Exchange's initial
common stock listing standards as set forth in Sections 102.01 to
102.03 and 103.01 to 103.05 of the Manual. As proposed, such companies
must meet one of the financial standards in Section 102.01C and for
foreign companies, Section 103.01B.
The Exchange also proposes to remove the sub-heading ``Earnings/Net
Tangible Assets'' from the second paragraph of Section 703.19.
III. Discussion and Commission's Findings
The Commission has carefully reviewed the proposed rule change and
finds that it is consistent with the requirements of Section 6 of the
Act \6\ and the rules and regulations thereunder applicable to a
national securities exchange.\7\ In particular, the Commission finds
that the proposal is consistent with Section 6(b)(5) of the Act,\8\
which requires, among other things, that the Exchange's rules be
designed to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general, to protect investors and the
public interest.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f.
\7\ In approving this proposed rule change the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The development and enforcement of adequate standards governing the
initial listing of securities on an exchange is an activity of critical
importance to financial markets and the investing public. Listing
standards, among other things, serve as a means for an exchange to
screen issuers and to provide listed status only to bona fide companies
that have sufficient public float, investor base, and trading interest
to provide the depth and liquidity necessary to promote fair and
orderly markets. Adequate standards are especially important given the
expectations of investors regarding exchange trading and the imprimatur
of listing on a particular market.
Under the proposal, companies with securities that are not listed
on NYSE and who wish to list securities under Section 703.19 must now
meet one of four financial listing standards under Section 102.01C of
the Manual.\9\ Under the proposal, companies who are foreign private
issuers must meet one of three financial listing standards under
Section 103.01B of the Manual.\10\ The Exchange represented that it has
not imposed the other standards in Sections 102.01 to 102.03 or
Sections 103.01 to 103.05, as the Exchange has applied these other
standards to the common stock.
---------------------------------------------------------------------------
\9\ Section 102.01C of the Manual lists four different financial
standards for companies to qualify for listing on the Exchange: (1)
Earnings Test; (2) Valuation/Revenue Test; (3) Affiliated Company
Test; or (4) Assets and Equity Test.
\10\ Section 103.05B of the Manual lists three different
financial standards for companies who are foreign private issuers to
qualify for listing on the Exchange: (1) Earnings Test; (2)
Valuation/Revenue Test; or (3) Affiliated Company Test.
---------------------------------------------------------------------------
The Commission notes that, as proposed, the numerical listing
standards under proposed Section 703.19 would be similar to the
numerical listing standards for ``other securities'' on other
exchanges.\11\ The Commission also notes that the proposed change would
apply only for companies whose securities are not otherwise listed on
the Exchange. In addition, the Commission notes that Section 703.19
currently provides public float and distribution listing standards.
---------------------------------------------------------------------------
\11\ See e.g., Nasdaq Marketplace Rule 4420(f), Section 107 of
the Amex Company Guide, and NYSE Arca Rule 5.2(j)(1).
---------------------------------------------------------------------------
Furthermore, the Commission believes that the proposal to remove
the obsolete sub-heading ``Earnings/Net Tangible Assets'' from Section
703.19 should eliminate any potential confusion.
The Commission believes the proposed rule change is reasonable and
should continue to provide for the listing of securities with
sufficient depth and liquidity to maintain fair and orderly markets.
Accordingly, the Commission believes that the changes are consistent
with the requirements of the Act.
[[Page 80491]]
III. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\12\ that the proposed rule change (SR-NYSE-2008-109) be, and it
hereby is, approved.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------
\13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-31052 Filed 12-30-08; 8:45 am]
BILLING CODE 8011-01-P
