Self-Regulatory Organizations; New York Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to a Pilot Program Relating to Minimum Numerical Standards in Section 102.01A of the Listed Company Manual, 73501-73503 [E5-7181]
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Federal Register / Vol. 70, No. 237 / Monday, December 12, 2005 / Notices
The Commission finds that the
proposed rule change, as amended, is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a registered
securities association.6 In particular, the
Commission believes that the proposed
rule change, as amended, is consistent
with sections 15A(b)(2) and (6) of the
Act,7 which require, among other
things, that a national securities
association be so organized and have the
capacity to be able to carry out the
purposes of the Act and to comply and
enforce compliance with the provisions
of the Act, and that its rules be designed
to prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, and, in
general, to protect investors and the
public interest.
The Commission notes that the
proposed rule change, as amended,
provides holders of the Notes the same
rights and subjects them to the same
restrictions under Paragraphs C.1. and
C.2. of the Certificate that currently
apply to holders of Nasdaq’s 4.0%
Convertible Subordinated Notes due
2006, which are being retired.
Specifically, the holders will be entitled
to vote on all matters submitted to a
vote of the stockholders of Nasdaq. The
holders’ ability to vote is limited in
Paragraph C.2. of the Certificate, which
provides that holders of the Notes and
common stock cannot vote any shares
that they own excess of five percent of
the then-outstanding shares of stock
generally entitled to vote as of the
record date in respect of such matter.
Paragraph C.6.(b) of the Certificate,
however, gives Nasdaq’s Board of
Directors (‘‘Board’’) the authority to
exempt certain persons from the five
percent voting restriction. If the Board
grants such an exemption to any person,
then the holders would be permitted to
receive a similar exemption from the
voting restriction.8 The Board, however,
is not permitted to grant exemptions
from the five percent voting restriction
to any registered broker or dealer or an
affiliate thereof (‘‘Broker Affiliate’’).9
6 The
Commission has considered the proposed
rule’s impact on efficiency, competition and capital
formation. 15 U.S.C. 78c(f).
7 15 U.S.C. 78o–3(b)(2) and (6).
8 The Commission notes that, currently, one of
the holders is a Broker Affiliate. Nasdaq represented
in the Notice that if the Board were to consider
granting a waiver to any person, it would have to
consider that such action would trigger an
exemption for the holders that would be deemed
inconsistent with the provision in Paragraph C.6.
See Notice, supra note 5, at note 9.
9 Nasdaq has stated that the definition of ‘‘Broker
Affiliate’’ set forth in Paragraph C.6. includes a
broker or a dealer or an affiliate thereof. See Notice,
supra note 5, at note 11.
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The Commission believes that it would
be inconsistent with Nasdaq’s
Certificate for the Board to grant an
exemption from the five percent voting
restriction to any person if, as a
consequence, a Broker Affiliate received
a similar exemption.10
The Commission finds that, since this
proposal extends the same rights and
obligations under the Nasdaq Certificate
to certain new holders of the Notes, the
proposal is consistent with the Act. In
addition, the Commission believes that
the five percent voting restriction
should limit the ability of any entity,
particularly a registered broker or
dealer, from controlling Nasdaq.11
It is therefore ordered, pursuant to
section 19(b)(2) of the Act,12 that the
proposed rule change (File No. SR–
NASD–2005–099), as amended, be, and
hereby is, approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5–7195 Filed 12–9–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52887; File No. SR–NYSE–
2005–82]
Self-Regulatory Organizations; New
York Stock Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change and
Amendment No. 1 Thereto Relating to
a Pilot Program Relating to Minimum
Numerical Standards in Section
102.01A of the Listed Company Manual
December 5, 2005.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
10 Nasdaq states that, if in the future the Board
exempts any Broker Affiliate from the five percent
voting restriction, the holders of the Notes would
automatically receive the same percentage voting
rights or the highest percentage voting rights to
which their Notes and shares held entitled them at
the time. As noted, Paragraph C.6. prohibits the
Board from granting any exemption from the five
percent voting restriction to a Broker Affiliate.
Accordingly, the Board is not permitted to grant
such an exemption under its current authority and
any change to this authority would have to be filed
with, and approved by, the Commission pursuant
to Section 19(b) of the Act.
11 See Securities Exchange Act Release No. 42983
(June 26, 2000), 65 FR 41116 (July 3, 2000) (SR–
NASD–00–27).
12 15 U.S.C. 78s(b)(2).
13 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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73501
23, 2005, the New York Stock Exchange,
Inc. (‘‘NYSE’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the NYSE. On
December 1, 2005, NYSE filed
Amendment No. 1 to the proposed rule
change.3 NYSE has filed the proposal as
a ‘‘non-controversial’’ rule change
pursuant to section 19(b)(3)(A) of the
Act 4 and Rule 19b–4(f)(6) 5 thereunder,
which renders the proposed rule change
effective upon filing with the
Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change,
as amended, from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The NYSE is proposing to amend, on
a six-month pilot program basis (the
‘‘Pilot Program’’), to expire on May 31,
2006, section 102.01A of the Exchange’s
Listed Company Manual (the ‘‘Manual’’)
regarding the minimum numerical
listing standards.6 The text of the
proposed rule change is available on the
NYSE’s Web site (https://www.nyse.com),
at the principal office of the NYSE, and
at the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
NYSE included statements concerning
the purpose of, and basis for, the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. The NYSE has
prepared summaries, set forth in
sections A, B, and C below, of the most
significant aspects of such statements.
3 In Amendment No. 1, NYSE made a technical
change to Exhibit 5 (text of the proposed rule
change). The correction to Exhibit 5 does not make
any changes to the current initial listing
distribution criteria for companies listing in
connection with a transfer or quotation, but only
adds missing rule text that was inadvertently
excluded in the filing submitted by the Exchange
on November 23, 2005.
4 15 U.S.C. 78s(b)(3)(A).
5 17 CFR 240.19b–4(f)(6).
6 Telephone conversation between Florence
Harmon, Senior Special Counsel, Division of
Market Regulation, Commission, and Annemarie
Tierney, Assistant General Counsel, NYSE, on
December 2, 2005 (clarifying that the pilot program
expires on May 31, 2006).
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Federal Register / Vol. 70, No. 237 / Monday, December 12, 2005 / Notices
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
introduce a Pilot Program to amend
certain of its minimum numerical
standards for the listing of domestic
equity securities on the NYSE. Section
102.01A of the Manual sets out
minimum initial requirements for size
and volume that must be met in order
for a company to be listed. Currently,
companies that are listing in
conjunction with an initial public
offering are required to demonstrate that
there are at least 2,000 or more round
lot holders 7 of the security to be listed
in order to be authorized to list. If a
company cannot confirm that it satisfies
the 2,000 round lot holder threshold
prior to the date that trading
commences, the security is ineligible for
listing.
The Exchange states that it is
increasingly being approached by
companies that are ultimately unable to
list due to special circumstances that
result in the company’s inability to
satisfy the 2,000 round lot holder
requirement prior to commencement of
trading. For example, companies listing
following emergence from bankruptcy
and companies affiliated with a
currently listed company that were
created in conjunction with a private
placement or similar transaction
generally do not meet the round lot
holder threshold unless the company
conducts a public offering
simultaneously with listing. To
accommodate the listing of these types
of companies absent a public offering,
the Exchange proposes to adopt
alternative round lot holder distribution
standards for affiliated companies and
companies listing upon emergence from
bankruptcy so that these types of
companies will be eligible to list if they
can demonstrate that they have at least
400 round lot holders prior to
commencement of trading. The
additional distribution criteria for
number of publicly held shares and
aggregate market value of publicly held
shares that are set forth in section 102A
of the Manual are not proposed to be
amended.
7 A ‘‘round lot’’ is a trading unit equivalent to 100
shares (or an otherwise defined unit of trading).
Telephone conversation between Florence Harmon,
Senior Special Counsel, Division of Market
Regulation, Commission, and Annemarie Tierney,
Assistant General Counsel, NYSE, on December 2,
2005.
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2. Statutory Basis
The Exchange believes that the basis
under the Act for the Pilot Program is
the requirement under section 6(b)(5) 8
that an exchange have rules that are
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to remove impediments to, and
perfect the mechanism of a free and
open market 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 Pilot Program 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
The Exchange has neither solicited
nor received written comments on the
proposed Pilot Program.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change, as amended: (1) Does not
significantly affect the protection of
investors or the public interest; (2) does
not impose any significant burden on
competition; and (3) by its terms does
not become operative for 30 days after
the date of this filing, or such shorter
time as the Commission may designate
if consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to section
19(b)(3)(A) 9 of the Act and Rule 19b–
4(f)(6) thereunder.10
The Exchange requests that the
Commission waive the 30-day operative
delay, as specified in Rule 19b–
4(f)(6)(iii),11 and designate the proposed
rule change to become operative
immediately so that the Exchange can
implement its Pilot Program relating to
minimum numerical initial listing
standards to facilitate listings by limited
categories of companies that meet the
8 15
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(3)(A).
10 17 CFR 240.19b–4(f)(6). Rule 19b–4(f)(6)(iii)
under the Act requires the self-regulatory
organization to provide the Commission written
notice of its intent to file the proposed rule change
at least five business days (or such shorter time as
designated by the Commission) before doing so.
NYSE has requested that the Commission waive the
five-day pre-filing notice requirement. The
Commission waives the five-day pre-filing notice
requirement.
11 17 CFR 240.19b–4(f)(6)(iii).
9 15
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Exchange’s current listing standards
other than the round lot holder
threshold. The Commission notes that
the Exchange states that the proposed
round lot holder threshold for affiliated
companies and companies emerging
from bankruptcy is substantially similar
to the listing threshold utilized by The
Nasdaq Stock Market 12 and the
American Stock Exchange LLC.13 The
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest and designates the
proposal to be effective and operative
upon filing with the Commission.14
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.15
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
No. SR–NYSE–2005–82 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–9303.
All submissions should refer to File
Number SR–NYSE–2005–82. This file
number should be included on the
12 See
13 See
NASD Rule 4420.
Section 102(a) of the Amex Company
Guide.
14 For purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
15 The effective date of the original proposed rule
is November 23, 2005. The effective date of
Amendment No. 1 is December 1, 2005. For
purposes of calculating the 60-day period within
which the Commission may summarily abrogate the
proposed rule change under section 19(b)(3)(C) of
the Act, the Commission considers the period to
commence on December 1, 2005, the date on which
NYSE submitted Amendment No. 1. See 15 U.S.C.
78s(b)(3)(C).
E:\FR\FM\12DEN1.SGM
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Federal Register / Vol. 70, No. 237 / Monday, December 12, 2005 / Notices
subject line if e-mail is used. To help the
Commission 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 (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room. Copies of such filing also will be
available for inspection and copying at
the principal office of the NYSE.
All comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–NYSE–2005–82 and should
be submitted on or before January 3,
2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.16
Jonathan G. Katz,
Secretary.
[FR Doc. E5–7181 Filed 12–9–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52891; File No. SR–NYSE–
2005–83]
Self-Regulatory Organizations; New
York Stock Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change and
Amendment Nos. 1 and 2 Thereto
Relating to Amendments to the
Exchange’s Certificate of
Incorporation, Constitution and Rules
to Allow Limited Liability Companies to
Become Members and Related
Changes to the Exchange’s 2005 Price
List
December 5, 2005.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
16 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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17:51 Dec 09, 2005
Jkt 208001
28, 2005, the New York Stock Exchange,
Inc. (‘‘NYSE’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. On
December 1, 2005, the Exchange filed
Amendment No. 1 to the proposed rule
change.3 On December 5, 2005, the
Exchange filed Amendment No. 2 to the
proposed rule change.4 The Exchange
has designated this proposal as ‘‘noncontroversial’’ pursuant to section
19(b)(3)(A) of the Act,5 and Rule 19b–
4(f)(6) thereunder,6 which renders the
proposed rule change effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change, as amended, from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes (i) to amend
the Exchange’s Constitution to allow
limited liability companies (‘‘LLCs’’) to
become members of the Exchange, (ii) a
related amendment to the Exchange’s
Certificate of Incorporation, (iii) an
amendment to Exchange Rule 301 to
implement the admission to
membership of LLCs under certain
limited circumstances in order to
facilitate estate planning by individual
members, and (iv) an amendment to the
Exchange’s 2005 Price List to reflect an
application fee to be charged to new
LLC members and to waive the
Exchange’s transfer fee payable in
connection with the transfer of a leased
seat, if the new lease is entered into
solely as a result of a transfer to an LLC
pursuant to proposed Exchange Rule
301(e). Under the proposed rule change,
transfers of LLC membership interests
would be prohibited other than transfers
(i) to Family Members,7 (ii) to grantor
3 See Form 19b–4 dated December 1, 2005
(‘‘Amendment No. 1’’). In Amendment No. 1, the
Exchange (i) modified the Purpose section to match
the proposed rule text; (ii) amended the proposed
changes to the Exchange Certificate of Incorporation
and included a description of such proposed
changes in the Purpose section; and (iii) made
technical changes.
4 See Partial Amendment dated December 5, 2005
(‘‘Amendment No. 2’’). In Amendment No. 2, the
Exchange (i) clarified the purpose section to match
the proposed rule text; (ii) made changes to the
Exchange’s 2005 Price List; (iii) deleted a paragraph
in Section III of Exhibit 1; and (iv) made technical
changes.
5 15 U.S.C. 78s(b)(3)(A).
6 17 CFR 240.19b–4(1)(6).
7 For purposes of proposed Exchange Rule 301(e),
the term ‘‘Family Member’’ means, with respect to
any person, such person’s spouse, domestic partner,
children, stepchildren, grandchildren, parents,
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73503
retained annuity trusts (‘‘GRATs’’)
established for estate and tax planning
purposes, (iii) by distribution of such
interest by the trustee of each such a
trust to any one or more of its
beneficiaries (including a trust for the
benefit of any one or more of them), or
(iv) by gift or bequest, outright or in
trust, by any such beneficiary, the
donees and legatees of any such
beneficiary or their donees and legatees,
in each case subject to certain additional
limitations.
The text of the proposed rule change
is available on the Exchange’s Web site
(https://www.nyse.com), at the
Exchange’s Office of the Secretary, and
at the Commission’s Public Reference
Room.
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
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Amendment to Exchange Constitution
and Certificate of Incorporation
At the Exchange’s annual membership
meeting on April 7, 2005, the members
voted to amend the Exchange’s
Constitution to allow LLCs to be
members of the Exchange in order to
facilitate estate planning by individual
members. The Exchange’s Constitution
currently restricts membership to
natural persons. This restriction has had
the effect of limiting members from
being able to include memberships in
estate planning.
The proposed amendment would
allow members to place their seats into
LLCs, allowing them to advance estateplanning objectives. The proposed
amendment is also intended to prevent
aggregation of control through LLCs, to
maximize accountability, and to
facilitate regulation and administration
to the greatest extent possible.
parents-in-law, grandparents, brothers, sisters,
uncles, aunts, cousins, nephews and nieces.
E:\FR\FM\12DEN1.SGM
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]]>Agencies
[Federal Register Volume 70, Number 237 (Monday, December 12, 2005)]
[Notices]
[Pages 73501-73503]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-7181]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52887; File No. SR-NYSE-2005-82]
Self-Regulatory Organizations; New York Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
and Amendment No. 1 Thereto Relating to a Pilot Program Relating to
Minimum Numerical Standards in Section 102.01A of the Listed Company
Manual
December 5, 2005.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on November 23, 2005, the New York Stock Exchange, Inc. (``NYSE''
or ``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the NYSE. On December 1,
2005, NYSE filed Amendment No. 1 to the proposed rule change.\3\ NYSE
has filed the proposal as a ``non-controversial'' rule change pursuant
to section 19(b)(3)(A) of the Act \4\ and Rule 19b-4(f)(6) \5\
thereunder, which renders the proposed rule change effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change, as amended, from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ In Amendment No. 1, NYSE made a technical change to Exhibit
5 (text of the proposed rule change). The correction to Exhibit 5
does not make any changes to the current initial listing
distribution criteria for companies listing in connection with a
transfer or quotation, but only adds missing rule text that was
inadvertently excluded in the filing submitted by the Exchange on
November 23, 2005.
\4\ 15 U.S.C. 78s(b)(3)(A).
\5\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The NYSE is proposing to amend, on a six-month pilot program basis
(the ``Pilot Program''), to expire on May 31, 2006, section 102.01A of
the Exchange's Listed Company Manual (the ``Manual'') regarding the
minimum numerical listing standards.\6\ The text of the proposed rule
change is available on the NYSE's Web site (https://www.nyse.com), at
the principal office of the NYSE, and at the Commission's Public
Reference Room.
---------------------------------------------------------------------------
\6\ Telephone conversation between Florence Harmon, Senior
Special Counsel, Division of Market Regulation, Commission, and
Annemarie Tierney, Assistant General Counsel, NYSE, on December 2,
2005 (clarifying that the pilot program expires on May 31, 2006).
---------------------------------------------------------------------------
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the NYSE included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The NYSE has prepared summaries, set forth in sections
A, B, and C below, of the most significant aspects of such statements.
[[Page 73502]]
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 introduce a Pilot Program to amend
certain of its minimum numerical standards for the listing of domestic
equity securities on the NYSE. Section 102.01A of the Manual sets out
minimum initial requirements for size and volume that must be met in
order for a company to be listed. Currently, companies that are listing
in conjunction with an initial public offering are required to
demonstrate that there are at least 2,000 or more round lot holders \7\
of the security to be listed in order to be authorized to list. If a
company cannot confirm that it satisfies the 2,000 round lot holder
threshold prior to the date that trading commences, the security is
ineligible for listing.
---------------------------------------------------------------------------
\7\ A ``round lot'' is a trading unit equivalent to 100 shares
(or an otherwise defined unit of trading). Telephone conversation
between Florence Harmon, Senior Special Counsel, Division of Market
Regulation, Commission, and Annemarie Tierney, Assistant General
Counsel, NYSE, on December 2, 2005.
---------------------------------------------------------------------------
The Exchange states that it is increasingly being approached by
companies that are ultimately unable to list due to special
circumstances that result in the company's inability to satisfy the
2,000 round lot holder requirement prior to commencement of trading.
For example, companies listing following emergence from bankruptcy and
companies affiliated with a currently listed company that were created
in conjunction with a private placement or similar transaction
generally do not meet the round lot holder threshold unless the company
conducts a public offering simultaneously with listing. To accommodate
the listing of these types of companies absent a public offering, the
Exchange proposes to adopt alternative round lot holder distribution
standards for affiliated companies and companies listing upon emergence
from bankruptcy so that these types of companies will be eligible to
list if they can demonstrate that they have at least 400 round lot
holders prior to commencement of trading. The additional distribution
criteria for number of publicly held shares and aggregate market value
of publicly held shares that are set forth in section 102A of the
Manual are not proposed to be amended.
2. Statutory Basis
The Exchange believes that the basis under the Act for the Pilot
Program is the requirement under section 6(b)(5) \8\ that an exchange
have rules that are designed to prevent fraudulent and manipulative
acts and practices, to promote just and equitable principles of trade,
to remove impediments to, and perfect the mechanism of a free and open
market and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed Pilot Program 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
The Exchange has neither solicited nor received written comments on
the proposed Pilot Program.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change, as amended: (1) Does
not significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) by its terms does not become operative for 30 days after the
date of this filing, or such shorter time as the Commission may
designate if consistent with the protection of investors and the public
interest, the proposed rule change has become effective pursuant to
section 19(b)(3)(A) \9\ of the Act and Rule 19b-4(f)(6) thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6). Rule 19b-4(f)(6)(iii) under the Act
requires the self-regulatory organization to provide the Commission
written notice of its intent to file the proposed rule change at
least five business days (or such shorter time as designated by the
Commission) before doing so. NYSE has requested that the Commission
waive the five-day pre-filing notice requirement. The Commission
waives the five-day pre-filing notice requirement.
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The Exchange requests that the Commission waive the 30-day
operative delay, as specified in Rule 19b-4(f)(6)(iii),\11\ and
designate the proposed rule change to become operative immediately so
that the Exchange can implement its Pilot Program relating to minimum
numerical initial listing standards to facilitate listings by limited
categories of companies that meet the Exchange's current listing
standards other than the round lot holder threshold. The Commission
notes that the Exchange states that the proposed round lot holder
threshold for affiliated companies and companies emerging from
bankruptcy is substantially similar to the listing threshold utilized
by The Nasdaq Stock Market \12\ and the American Stock Exchange
LLC.\13\ The Commission believes that waiving the 30-day operative
delay is consistent with the protection of investors and the public
interest and designates the proposal to be effective and operative upon
filing with the Commission.\14\
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\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ See NASD Rule 4420.
\13\ See Section 102(a) of the Amex Company Guide.
\14\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.\15\
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\15\ The effective date of the original proposed rule is
November 23, 2005. The effective date of Amendment No. 1 is December
1, 2005. For purposes of calculating the 60-day period within which
the Commission may summarily abrogate the proposed rule change under
section 19(b)(3)(C) of the Act, the Commission considers the period
to commence on December 1, 2005, the date on which NYSE submitted
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File No. SR-NYSE-2005-82 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-9303.
All submissions should refer to File Number SR-NYSE-2005-82. This
file number should be included on the
[[Page 73503]]
subject line if e-mail is used. To help the Commission 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
(https://www.sec.gov/rules/sro.shtml). Copies of the submission, all
subsequent amendments, all written statements with respect to the
proposed rule change that are filed with the Commission, and all
written communications relating to the proposed rule change between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for inspection and copying in the Commission's Public
Reference Room. Copies of such filing also will be available for
inspection and copying at the principal office of the NYSE.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-NYSE-2005-82
and should be submitted on or before January 3, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. E5-7181 Filed 12-9-05; 8:45 am]
BILLING CODE 8010-01-P
