Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the New York Stock Exchange LLC Amending the Listed Company Manual To Mandate Listed Companies Become Eligible To Participate in a Direct Registration System, 33030-33032 [E6-8816]

Download as PDF 33030 Federal Register / Vol. 71, No. 109 / Wednesday, June 7, 2006 / Notices the Act 9 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. The Exchange believes that the proposed rule change is consistent with these objectives in that it enables the Exchange to further enhance the process by which securities are allocated. 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 Written comments were neither solicited nor received. rwilkins on PROD1PC63 with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (1) Significantly affect the protection of investors or the public interest; (2) impose any significant burden on competition; and (3) by its terms, become operative for 30 days from the date on which it was filed, 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) 10 of the Act and Rule 19b– 4(f)(6) thereunder. A proposed rule change filed under Rule 19b–4(f)(6) 11 normally may not become operative prior to 30 days after the date of filing. However, Rule 19b– 4(f)(6)(iii) 12 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The NYSE has requested that the Commission waive the 5-day pre-filing notice requirement and the 30-day operative delay, which would make the rule change effective and operative upon filing. The Commission believes that waiver of the 5-day pre-filing notice and the 30-day operative delay is consistent with the protection of U.S.C. 78f(b)(5). U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b–4(f)(6). 12 17 CFR 240.19b–4(f)(6)(iii). 10 15 17:54 Jun 06, 2006 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–2006–40 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSE–2006–40. This file number should be included on the 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 13 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). 9 15 VerDate Aug<31>2005 investors and the public interest.13 The Commission notes that such waiver would allow the Exchange to implement the proposed rule change immediately and thus to avoid any potential confusion in the class of membership governed by the rule. Accordingly, the Commission designates that the proposed rule change effective and operative upon filing with the Commission. 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. Jkt 208001 PO 00000 Frm 00118 Fmt 4703 Sfmt 4703 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 Exchange. 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–2006–40 and should be submitted on or before June 28, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.14 J. Lynn Taylor, Assistant Secretary. [FR Doc. E6–8800 Filed 6–6–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53912; File No. SR–NYSE– 2006–29] Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the New York Stock Exchange LLC Amending the Listed Company Manual To Mandate Listed Companies Become Eligible To Participate in a Direct Registration System May 31, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on May 6, 2006, the New York Stock Exchange LLC (‘‘NYSE’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change described in Items I, II, and III below, which items have been prepared primarily by the NYSE. The Commission is publishing this notice to solicit comments on the proposed rule change from interested parties. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The NYSE proposes to amend its Listed Company Manual (‘‘Manual’’) to mandate that all listed companies become eligible to participate in a Direct Registration System (‘‘DRS’’) administered by a clearing agency registered under Section 17A of the Act. 14 7 1 CFR 200.30–3(a)(12). 15 U.S.C. 78s(b)(1). E:\FR\FM\07JNN1.SGM 07JNN1 Federal Register / Vol. 71, No. 109 / Wednesday, June 7, 2006 / Notices 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 these statements.2 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The NYSE proposes to amend its Manual to mandate that all listed companies become eligible to participate in DRS administered by a clearing agency registered under Section 17A of the Act. A DRS is a system that allows an investor to establish either through the issuer’s transfer agent or through the investor’s broker-dealer a book-entry position in eligible securities on the books of the issuer and to electronically transfer her position between the transfer agent and the broker-dealer.3 DRS, therefore, allows an investor to have eligible securities registered in her name without having a certificate issued to her and to electronically transfer, thereby eliminating the risk and delays associated with the use of certificates, her securities to her broker-dealer in order to effect a transaction. In 1996 the NYSE amended its rules to permit companies to participate in DRS although such participation was voluntary.4 Approximately 649 issuers listed on the NYSE currently participate in DRS. In 2004, the Commission issued a concept release, Securities Transaction Settlement, discussing whether selfregulatory organizations (‘‘SROs’’) that rwilkins on PROD1PC63 with NOTICES 2 The Commission has modified portions of the text of the summaries prepared by the NYSE. 3 Currently, the only registered clearing agency operating a DRS is the Depository Trust Company (‘‘DTC’’). For a description of DRS and the DRS facilities administered by DTC, see Securities Exchange Act Release Nos. 37931 (November 7, 1996), 61 FR 58600 (November 15, 1996), [File No. SR–DTC–96–15] (order granting approval to establish DRS) and 41862 (September 10, 1999), 64 FR 51162 (September 21, 1999), [File No. SR–DTC– 99–16] (order approving implementation of the Profile Modification System). 4 Securities Exchange Act Release No. 37937 (November 8, 1996), 61 FR 58728 (November 18, 1996), [File No. SR–NYSE–96–29]. VerDate Aug<31>2005 17:54 Jun 06, 2006 Jkt 208001 list securities should adopt rules to require issuers to participate in DRS.5 Subsequently, representations of the NYSE, the NASDAQ Stock Market, the American Stock Exchange, DTC, and the Securities Industry Association entered into discussions that resulted in the decision to propose a common approach that would require listed companies to become eligible to participate in DRS but would not require listed companies to participate in DRS.6 There is an expectation that requiring listed companies to be eligible to participate in DRS will accelerate the trend already evident among companies to participate in DRS. Under the proposed rule change, NYSE will impose its DRS eligibility requirement pursuant to proposed new Section 501.00 of the Manual.7 Proposed Section 501.00 does not specifically require that securities must be eligible for the DRS. Rather it requires listed companies’ securities to be eligible for a direct registration system operated by a clearing agency, as defined in Section 3(a)(23) of the Act,8 that is registered with the Commission pursuant to Section 17A(b)(2) of the Act. Therefore, while the DRS currently operated by DTC is currently the only DRS facility meeting the definition, Section 501.00 will provide issuers with the option of using another qualified DRS if one should exist in the future. In order to make a security DRSeligible, as currently operated by DTC, the issuer must have a transfer agent which is a DTC DRS Limited Participant.9 NYSE understands that the larger transfer agents serving NYSE’s listed company community are already eligible to participate in DRS. However, taking into account all the diverse issuers and transfer agents involved across all the markets that will be proposing similar rules regarding DRS eligibility, some transfer agents may 5 Securities Exchange Act Release No. 49405 (March 11, 2004), 69 FR 12922 (March 18, 2004), [File No. S7–13–04]. 6 NASDAQ Stock Market LLC and the American Stock Exchange LLC have also filed proposed rule changes with the Commission that would require certain listed companies securities DRS eligible. Securities Exchange Act Release Nos. 53913 (May 31, 2006) [File No. SR–NASDAQ–2006–008] and 53911 (May 31, 2006) [File No. SR–Amex–2006– 40]. NYSE expects that NYSE Arca will submit a similar rule filing in the near future. 7 The exact text of the NYSE prepared rule change is set forth in its filing which can be found at https://www.nyse.com/RegulationFrameset. 8 15 U.S.C. 78a. 9 DTC’s rules require that a transfer agent (including an issuer acting as its own transfer agent) acting for a company issuing securities in DRS must be a DRS Limited Participant. Securities Exchange Act Release No. 37931 (November 7, 1996), 61 FR 58600 (November 15, 1996), [File No. SR–DTC–96– 15]. PO 00000 Frm 00119 Fmt 4703 Sfmt 4703 33031 need to take steps to become eligible to participate in DRS, and some issuers may wish to change their transfer agent in connection with this process. In addition, NYSE has been notified that some issuers may need to amend their certificate of incorporation or by-laws to become DRS eligible. To allow sufficient time for any such necessary actions, NYSE proposes to impose the DRS eligibility requirement in two steps. Companies listing for the first time should have greater flexibility to conform to the eligibility requirements; therefore, proposed Section 501.00 would require all securities initially listing on NYSE on or after January 1, 2007, to be eligible for DRS at the time of listing. This provision does not extend to securities of companies (i) Which already have securities listed on the NYSE, (ii) which immediately prior to such listing had securities listed on another registered securities exchange in the U.S., or (iii) which are specifically permitted under NYSE’s rules to be and which are bookentry only.10 On and after January 1, 2008, all securities listed on the NYSE will be required to be eligible for DRS, again excepting those securities which are specifically permitted under NYSE rules to be and which are book-entry only. NYSE also proposes to amend Section 601.01 of the Manual (‘‘Exchange Approval of Transfer Agents and Registrars’’) to require that any issuer required to make a listed security eligible for DRS pursuant to proposed Section 501.00 must maintain a transfer agent for that security which is eligible either for DRS operated by DTC or by another registered clearing agency. In addition, the NYSE proposes to amend the transfer agent agreements in Section 906 of the Manual to require transfer agents for securities subject to proposed Section 501.00 to agree that they will at all times be eligible either for the DRS operated by DTC or by another registered clearing agency. 2. Statutory Basis The statutory basis under the Act for this proposed rule change is the requirement under Section 6(b)(5) of the Act, which requires, among other things, that the rules of an exchange are designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in 10 Securities which the NYSE permits to be bookentry-only include all debt securities, securities issued pursuant to Section 703.19 of the Manual, and nonconvertible preferred stock. E:\FR\FM\07JNN1.SGM 07JNN1 33032 Federal Register / Vol. 71, No. 109 / Wednesday, June 7, 2006 / Notices regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest.11 NYSE believes that the proposed amendments to Sections 501.00, 601.01, and 906 of the Manual are consistent with its obligations under Section 6(b)(5) because issuers will be encouraged to use DRS, which should facilitate reducing the use of securities certificates and in turn should promote more efficient clearing and settling of securities transactions. B. Self-Regulatory Organization’s Statement on Burden on Competition The NYSE 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 The NYSE has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within thirty-five days of the date of publication of this notice in the Federal Register or within such longer period: (i) As the Commission may designate up to ninety 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 such proposed rule change or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. rwilkins on PROD1PC63 with NOTICES 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 11 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 17:54 Jun 06, 2006 Jkt 208001 Number SR–NYSE–2006–29 in the subject line. SUMMARY: The Federal Aviation Administration (FAA) announces that it is reviewing a proposed noise Paper Comments compatibility program that was • Send paper comments in triplicate submitted for Fresno Yosemite to Nancy M. Morris, Secretary, International Airport (FAT) under the Securities and Exchange Commission, provisions of 40 U.S.C. 47501 et seq. 100 F Street, NE., Washington, DC (the Aviation Safety and Noise 20549–1090. Abatement Act, hereinafter referred to as ‘‘the Act’’) and 14 CFR Part 150 by All submissions should refer to File city of Fresco, California. This program Number SR–NYSE–2006–29. This file was submitted subsequent to a number should be included on the subject line if e-mail is used. To help the determination by FAA that associated noise exposure maps submitted under Commission process and review your 14 CFR Part 150 for FAT were in comments more efficiently, please use only one method. The Commission will compliance with applicable post all comments on the Commission’s requirements, effective July 6, 2005 (70 FR 50437–50438). The proposed noise Internet Web site (https://www.sec.gov/ compatibility program will be approved rules/sro.shtml). Copies of the or disapproved on or before November submission, all subsequent 22, 2006. amendments, all written statements DATES: Effective Date: The effective date with respect to the proposed rule of the start of FAA’s review of the noise change that are filed with the compatibility program is May 26, 2006. Commission, and all written The public comment period ends July communications relating to the 25, 2006. proposed rule change between the Commission and any person, other than FOR FURTHER INFORMATION CONTACT: those that may be withheld from the Camille Garibaldi, Environmental public in accordance with the Protection Specialist, Federal Aviation provisions of 5 U.S.C. 552, will be Administration, Western Pacific Region, available for inspection and copying in San Francisco Airports District Office, the Commission’s Public Reference 831 Mitten Road, Suite 210, Burlingame, Section, 100 F Street, NE., Washington, CA 94010, Telephone (650) 876–2778 DC 20549. Copies of such filings also extension 613. Comments on the will be available for inspection and proposed noise compatibility program copying at the principal office of the should also be submitted to the above NYSE and on the NYSE’s Web site, office. https://www.nyse.com. All comments SUPPLEMENTARY INFORMATION: This received will be posted without change; notice announces that the FAA is the Commission does not edit personal reviewing a proposed noise identifying information from compatibility program for FAT, which submissions. You should submit only will be approved or disapproved on or information that you wish to make before November 22, 2006. This notice available publicly. All submissions also announces the availability of this should refer to File Number SR–NYSE– program for public review and 2006–29 and should be submitted on or comment. before June 28, 2006. An airport operator who has For the Commission by the Division of submitted noise exposure maps that are Market Regulation, pursuant to delegated found by FAA to be in compliance with authority.12 the requirements of Federal Aviation Jill M. Peterson, Regulations (FAR) Part 150, Assistant Secretary. promulgated pursuant to the Act, may submit a noise compatibility program [FR Doc. E6–8816 Filed 6–6–06; 8:45 am] for FAA approval which sets forth the BILLING CODE 8010–01–P measures the operator has taken or proposes to reduce existing nonDEPARTMENT OF TRANSPORTATION compatible uses and prevent the introduction of additional noncompatible uses. Federal Aviation Administration The FAA has formally received the Receipt of Noise Compatibility noise compatibility program for FAT, Program and Request for Review effective on May 26, 2006. The airport operator has requested that the FAA AGENCY: Federal Aviation review this material and that the noise Administration, DOT. mitigation measures, to be implemented ACTION: Notice. jointly by the airport and surrounding communities, be approved as a noise 12 17 CFR 200.30–3(a)(12). compatibility program under section PO 00000 Frm 00120 Fmt 4703 Sfmt 4703 E:\FR\FM\07JNN1.SGM 07JNN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 71, Number 109 (Wednesday, June 7, 2006)]
[Notices]
[Pages 33030-33032]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-8816]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53912; File No. SR-NYSE-2006-29]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the New York Stock Exchange LLC Amending the Listed Company 
Manual To Mandate Listed Companies Become Eligible To Participate in a 
Direct Registration System

May 31, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on May 6, 2006, the New York 
Stock Exchange LLC (``NYSE'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change described in Items 
I, II, and III below, which items have been prepared primarily by the 
NYSE. The Commission is publishing this notice to solicit comments on 
the proposed rule change from interested parties.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The NYSE proposes to amend its Listed Company Manual (``Manual'') 
to mandate that all listed companies become eligible to participate in 
a Direct Registration System (``DRS'') administered by a clearing 
agency registered under Section 17A of the Act.

[[Page 33031]]

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 these 
statements.\2\
---------------------------------------------------------------------------

    \2\ The Commission has modified portions of the text of the 
summaries prepared by the NYSE.
---------------------------------------------------------------------------

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The NYSE proposes to amend its Manual to mandate that all listed 
companies become eligible to participate in DRS administered by a 
clearing agency registered under Section 17A of the Act.
    A DRS is a system that allows an investor to establish either 
through the issuer's transfer agent or through the investor's broker-
dealer a book-entry position in eligible securities on the books of the 
issuer and to electronically transfer her position between the transfer 
agent and the broker-dealer.\3\ DRS, therefore, allows an investor to 
have eligible securities registered in her name without having a 
certificate issued to her and to electronically transfer, thereby 
eliminating the risk and delays associated with the use of 
certificates, her securities to her broker-dealer in order to effect a 
transaction. In 1996 the NYSE amended its rules to permit companies to 
participate in DRS although such participation was voluntary.\4\ 
Approximately 649 issuers listed on the NYSE currently participate in 
DRS.
---------------------------------------------------------------------------

    \3\ Currently, the only registered clearing agency operating a 
DRS is the Depository Trust Company (``DTC''). For a description of 
DRS and the DRS facilities administered by DTC, see Securities 
Exchange Act Release Nos. 37931 (November 7, 1996), 61 FR 58600 
(November 15, 1996), [File No. SR-DTC-96-15] (order granting 
approval to establish DRS) and 41862 (September 10, 1999), 64 FR 
51162 (September 21, 1999), [File No. SR-DTC-99-16] (order approving 
implementation of the Profile Modification System).
    \4\ Securities Exchange Act Release No. 37937 (November 8, 
1996), 61 FR 58728 (November 18, 1996), [File No. SR-NYSE-96-29].
---------------------------------------------------------------------------

    In 2004, the Commission issued a concept release, Securities 
Transaction Settlement, discussing whether self-regulatory 
organizations (``SROs'') that list securities should adopt rules to 
require issuers to participate in DRS.\5\ Subsequently, representations 
of the NYSE, the NASDAQ Stock Market, the American Stock Exchange, DTC, 
and the Securities Industry Association entered into discussions that 
resulted in the decision to propose a common approach that would 
require listed companies to become eligible to participate in DRS but 
would not require listed companies to participate in DRS.\6\ There is 
an expectation that requiring listed companies to be eligible to 
participate in DRS will accelerate the trend already evident among 
companies to participate in DRS.
---------------------------------------------------------------------------

    \5\ Securities Exchange Act Release No. 49405 (March 11, 2004), 
69 FR 12922 (March 18, 2004), [File No. S7-13-04].
    \6\ NASDAQ Stock Market LLC and the American Stock Exchange LLC 
have also filed proposed rule changes with the Commission that would 
require certain listed companies securities DRS eligible. Securities 
Exchange Act Release Nos. 53913 (May 31, 2006) [File No. SR-NASDAQ-
2006-008] and 53911 (May 31, 2006) [File No. SR-Amex-2006-40]. NYSE 
expects that NYSE Arca will submit a similar rule filing in the near 
future.
---------------------------------------------------------------------------

    Under the proposed rule change, NYSE will impose its DRS 
eligibility requirement pursuant to proposed new Section 501.00 of the 
Manual.\7\ Proposed Section 501.00 does not specifically require that 
securities must be eligible for the DRS. Rather it requires listed 
companies' securities to be eligible for a direct registration system 
operated by a clearing agency, as defined in Section 3(a)(23) of the 
Act,\8\ that is registered with the Commission pursuant to Section 
17A(b)(2) of the Act. Therefore, while the DRS currently operated by 
DTC is currently the only DRS facility meeting the definition, Section 
501.00 will provide issuers with the option of using another qualified 
DRS if one should exist in the future.
---------------------------------------------------------------------------

    \7\ The exact text of the NYSE prepared rule change is set forth 
in its filing which can be found at https://www.nyse.com/
RegulationFrameset.
    \8\ 15 U.S.C. 78a.
---------------------------------------------------------------------------

    In order to make a security DRS-eligible, as currently operated by 
DTC, the issuer must have a transfer agent which is a DTC DRS Limited 
Participant.\9\ NYSE understands that the larger transfer agents 
serving NYSE's listed company community are already eligible to 
participate in DRS. However, taking into account all the diverse 
issuers and transfer agents involved across all the markets that will 
be proposing similar rules regarding DRS eligibility, some transfer 
agents may need to take steps to become eligible to participate in DRS, 
and some issuers may wish to change their transfer agent in connection 
with this process. In addition, NYSE has been notified that some 
issuers may need to amend their certificate of incorporation or by-laws 
to become DRS eligible.
---------------------------------------------------------------------------

    \9\ DTC's rules require that a transfer agent (including an 
issuer acting as its own transfer agent) acting for a company 
issuing securities in DRS must be a DRS Limited Participant. 
Securities Exchange Act Release No. 37931 (November 7, 1996), 61 FR 
58600 (November 15, 1996), [File No. SR-DTC-96-15].
---------------------------------------------------------------------------

    To allow sufficient time for any such necessary actions, NYSE 
proposes to impose the DRS eligibility requirement in two steps. 
Companies listing for the first time should have greater flexibility to 
conform to the eligibility requirements; therefore, proposed Section 
501.00 would require all securities initially listing on NYSE on or 
after January 1, 2007, to be eligible for DRS at the time of listing. 
This provision does not extend to securities of companies (i) Which 
already have securities listed on the NYSE, (ii) which immediately 
prior to such listing had securities listed on another registered 
securities exchange in the U.S., or (iii) which are specifically 
permitted under NYSE's rules to be and which are book-entry only.\10\ 
On and after January 1, 2008, all securities listed on the NYSE will be 
required to be eligible for DRS, again excepting those securities which 
are specifically permitted under NYSE rules to be and which are book-
entry only.
---------------------------------------------------------------------------

    \10\ Securities which the NYSE permits to be book-entry-only 
include all debt securities, securities issued pursuant to Section 
703.19 of the Manual, and nonconvertible preferred stock.
---------------------------------------------------------------------------

    NYSE also proposes to amend Section 601.01 of the Manual 
(``Exchange Approval of Transfer Agents and Registrars'') to require 
that any issuer required to make a listed security eligible for DRS 
pursuant to proposed Section 501.00 must maintain a transfer agent for 
that security which is eligible either for DRS operated by DTC or by 
another registered clearing agency. In addition, the NYSE proposes to 
amend the transfer agent agreements in Section 906 of the Manual to 
require transfer agents for securities subject to proposed Section 
501.00 to agree that they will at all times be eligible either for the 
DRS operated by DTC or by another registered clearing agency.
2. Statutory Basis
    The statutory basis under the Act for this proposed rule change is 
the requirement under Section 6(b)(5) of the Act, which requires, among 
other things, that the rules of an exchange are designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in

[[Page 33032]]

regulating, clearing, settling, processing information with respect to, 
and facilitating transactions in securities, to remove impediments to 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public 
interest.\11\ NYSE believes that the proposed amendments to Sections 
501.00, 601.01, and 906 of the Manual are consistent with its 
obligations under Section 6(b)(5) because issuers will be encouraged to 
use DRS, which should facilitate reducing the use of securities 
certificates and in turn should promote more efficient clearing and 
settling of securities transactions.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    The NYSE 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

    The NYSE has neither solicited nor received written comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within thirty-five days of the date of publication of this notice 
in the Federal Register or within such longer period: (i) As the 
Commission may designate up to ninety 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 such 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, 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 Number SR-NYSE-2006-29 in the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2006-29. This file 
number should be included on the 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 Section, 100 F Street, 
NE., Washington, DC 20549. Copies of such filings also will be 
available for inspection and copying at the principal office of the 
NYSE and on the NYSE's Web site, https://www.nyse.com. 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-2006-29 and should be 
submitted on or before June 28, 2006.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
 [FR Doc. E6-8816 Filed 6-6-06; 8:45 am]
BILLING CODE 8010-01-P

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