Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Discontinue Its Policy of Requiring Listed Companies Whose Charters Contain Transfer Restrictions To Amend Their Charters To Include Language Specifying That Those Restrictions Do Not Apply to Public Market Transactions, 32611-32613 [E8-12797]
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Federal Register / Vol. 73, No. 111 / Monday, June 9, 2008 / Notices
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,7 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,8 in particular, in that it is
designed to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, 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
amendment is consistent with the
investor protection objectives of the Act
in that it provides for an adjustment to
list applicants’ historical financial
results that is consistent with other
adjustments already permitted under
the Exchange’s earnings standard and is
reasonable given the purpose of the
earnings standard, which is to
determine the suitability for listing of
companies on a forward-looking basis.
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.
mstockstill on PROD1PC66 with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change
does not: (i) Significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days after the date of
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) of the Act 9 and
subparagraph (f)(6) of Rule 19b–4
thereunder.10
U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(5).
9 15 U.S.C. 78s(b)(3)(A).
10 17 CFR 240.19b–4(f)(6).
18:05 Jun 06, 2008
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:
• 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
Number SR–NYSE–2008–43 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
11 17
CFR 240.19b–4(f)(6)(iii).
PO 00000
Frm 00064
Fmt 4703
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–12796 Filed 6–6–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
Sfmt 4703
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Discontinue
Its Policy of Requiring Listed
Companies Whose Charters Contain
Transfer Restrictions To Amend Their
Charters To Include Language
Specifying That Those Restrictions Do
Not Apply to Public Market
Transactions
June 2, 2008.
13 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
impact of the proposed rule on efficiency,
competition, and capital formation. 15 U.S.C. 78c(f).
Jkt 214001
Commission, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSE–2008–43. 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
Room. Copies of such filing also will be
available for inspection and copying at
the principal office of 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–2008–43 and should
be submitted on or before June 30, 2008.
[Release No. 34–57904; File No. SR–NYSE–
2008–40]
Electronic Comments
12 Id.
7 15
VerDate Aug<31>2005
A proposed rule change filed under
19b–4(f)(6) normally may not become
operative prior to 30 days after the date
of filing.11 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
Exchange has requested that the
Commission waive the 30-day preoperative delay and designate the
proposed rule change to become
operative upon filing.
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because the proposed rule change is
consistent with other adjustments the
Exchange makes when evaluating
applicants on a forward-looking, postIPO basis under the existing earnings
standard in Section 102.01C(I) of the
Listed Company Manual, and the
proposal will take effect as a Pilot
Program, allowing the Commission to
evaluate the suitability of the proposal
during the pilot period. The
Commission designates the proposal to
become effective and operative upon
filing.13
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 the furtherance of the
purposes of the Act.
32611
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
14 17
E:\FR\FM\09JNN1.SGM
CFR 200.30–3(a)(12).
09JNN1
32612
Federal Register / Vol. 73, No. 111 / Monday, June 9, 2008 / Notices
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on May 16,
2008, the New York Stock Exchange
LLC (‘‘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 substantially prepared by the
Exchange. The Exchange has designated
the proposed rule change as ‘‘noncontroversial’’ under Section
19(b)(3)(A)(iii) 3 of the Act and Rule
19b–4(f)(6) thereunder,4 which renders
the proposal effective upon filing with
the Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to
discontinue its policy of requiring listed
companies whose charters contain
transfer restrictions to amend their
charters to include language specifying
that those restrictions do not apply to
public market transactions.
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
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 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.
mstockstill on PROD1PC66 with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to
discontinue its policy of requiring listed
companies whose charters contain
transfer restrictions to amend their
charters to include language specifying
that those restrictions do not apply to
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
18:05 Jun 06, 2008
NYSE Transactions. Nothing in this Article
[ ] shall preclude the settlement of any
transaction entered into through the facilities
of the New York Stock Exchange or any other
national securities exchange or automated
inter-dealer quotation system. The fact that
the settlement of any transaction occurs shall
not negate the effect of any provision of this
Article [ ] and any transferee in such a
transaction shall be subject to all of the
provisions and limitations set forth in this
Article [ ].
The Exchange believes that it is
generally unproblematic for a company
listing at the time of its initial public
offering to amend its charter to insert
1 15
VerDate Aug<31>2005
public market transactions. The change
in policy will apply to companies listing
in connection with their initial public
offerings, as well as companies
transferring from other markets.
The Exchange has a long-standing
policy of prohibiting the inclusion by
any listed company in its charter of
restrictions on transfers of the
company’s equity securities. Typically
such provisions purport to enable the
company to void transactions involving
the transfer of the company’s shares to
purchasers who are designated
prohibited holders. A purchaser is
generally deemed to be a prohibited
holder because it owns more than a
specified threshold amount of the
company’s equity securities, or will do
so if the prohibited transaction is
consummated. Companies impose
transfer restrictions for a variety of
reasons, but they are most commonly
found in the context of (i) real estate
investment trusts (‘‘REITs’’) that wish to
avoid losing their REIT status on the
basis that a shareholder owns more than
5% of the company’s common equity or
(ii) companies recently emerged from
bankruptcy whose net operating loss
(‘‘NOL’’) assets may be impaired as a
result of changes in ownership levels by
any shareholder owning more than 5%
of the common equity securities. The
charter will typically provide that the
company will have the right to seize any
shares bought by a prohibited purchaser
and place them in trust to be sold for the
benefit of that prohibited purchaser. The
Exchange is generally not concerned
with the application of this type of
arrangement as it does not affect the
finality of the sale as it relates to the
seller. However, the Exchange is
concerned if the language of the charter
may be read as giving the company the
ability to unwind the transaction or
prohibit sellers from transferring to any
willing purchaser in Exchange
transactions. To that end, the Exchange
requires companies that have transfer
restrictions in their charters to include
the following provision:
Jkt 214001
PO 00000
Frm 00065
Fmt 4703
Sfmt 4703
the Exchange’s required language, as
such companies are typically closely
held and can easily amend the charter
by written consent prior to listing.
However, to the Exchange’s knowledge,
none of the other national securities
exchanges impose such a requirement
and, as a consequence, a company
transferring from another market will
typically need to secure a vote from its
public shareholders to amend the
charter. As an accommodation, the
Exchange allows transferring companies
to list on the basis of a commitment to
have a vote with respect to adding the
required language to the charter at the
company’s next scheduled annual
meeting. Companies are frequently
uncomfortable with this requirement, as
they believe it is confusing to
shareholders and is unnecessary from a
practical standpoint. As such, the
Exchange believes the continuation of
this policy by it represents a barrier to
effective competition with other markets
that do not apply such a policy.
The Exchange has reviewed its
transfer restrictions policy and
concluded that it is no longer necessary
in light of the structure of the modern
securities markets. Because all exchange
transactions are between anonymous
street name accounts, it is impossible
for a listed company to identify in
advance a proposed transferee as a
prohibited holder and block the
transaction in advance of its execution.
The company will only become aware of
such a transfer when the purchaser files
a Form 13D or 13G, at which time the
company may exercise any right it may
have to seize the shares and sell them.
Notwithstanding the language contained
in certain charters to the effect that
prohibited transfers are ‘‘void,’’ the
Exchange does not believe that it is
feasible for a listed company to require
the unwinding of a prohibited transfer.5
As such, the Exchange does not believe
that requiring companies to include in
their charters language specifying that
any transfer restrictions do not apply to
public market transactions provides any
meaningful or necessary protection to
sellers and believes that it is appropriate
to discontinue this policy. The
Exchange believes that discontinuing
this policy will not result in any
substantially greater likelihood that
companies will be able to cause the
unwinding of public market
transactions in their equity securities.
While it may be less burdensome in
5 The Exchange expresses no opinion as to the
legal enforceability of transfer restriction provisions
in company charters, which is a matter of the law
of the jurisdiction of incorporation of the company
in question.
E:\FR\FM\09JNN1.SGM
09JNN1
Federal Register / Vol. 73, No. 111 / Monday, June 9, 2008 / Notices
many cases for companies undertaking
an IPO to comply with the existing
policy than is the case for companies
that are already public, the Exchange
believes that it is appropriate to end the
policy with respect to all companies
including IPOs, as it believes that the
policy is unnecessary for the reasons
stated above and it places the Exchange
at a potential competitive disadvantage
to other markets that do not impose
such a requirement on companies listing
at the time of their IPO.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,6 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,7 in particular, in that it is
designed to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, 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
change in policy will particularly
promote competition among exchanges,
as it will eliminate a potential
impediment to the transfer of the listing
of certain companies from other markets
to the Exchange.
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.
mstockstill on PROD1PC66 with NOTICES
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.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change
does not: (i) Significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days after the date of
filing, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
6 15
7 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
VerDate Aug<31>2005
18:05 Jun 06, 2008
Jkt 214001
public interest, the proposed rule
change has become effective pursuant to
Section 19(b)(3)(A) of the Act 8 and
subparagraph (f)(6) of Rule 19b–4
thereunder.9
A proposed rule change filed under
19b–4(f)(6) normally may not become
operative prior to 30 days after the date
of filing.10 However, Rule 19b–
4(f)(6)(iii) 11 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has requested that the
Commission waive the 30-day preoperative delay and designate the
proposed rule change to become
operative upon filing.
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because eliminating the NYSE’s
longstanding transfer restrictions policy
should not have any effect on the
settlement of public market transactions
on the Exchange. The Commission
designates the proposal to become
effective and operative upon filing.12
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 the furtherance of the
purposes of the Act.
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
Number SR–NYSE–2008–40 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
8 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
10 17 CFR 240.19b–4(f)(6)(iii).
11 Id.
12 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
impact of the proposed rule on efficiency,
competition, and capital formation. 15 U.S.C. 78c(f).
9 17
PO 00000
Frm 00066
Fmt 4703
Sfmt 4703
32613
Commission, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSE–2008–40. 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
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 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–2008–40 and should
be submitted on or before June 30, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–12797 Filed 6–6–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57905; File No. SR–NYSE–
2008–44]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Adjust the
Earnings of Companies for Purposes
of Its Earnings Standard by Reversing
the Income Statement Effects of
Changes in Fair Value of Financial
Instruments Extinguished at the Time
of Listing on a Three Month Pilot Basis
June 2, 2008.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
13 17
E:\FR\FM\09JNN1.SGM
CFR 200.30–3(a)(12).
09JNN1
]]>Agencies
[Federal Register Volume 73, Number 111 (Monday, June 9, 2008)]
[Notices]
[Pages 32611-32613]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-12797]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57904; File No. SR-NYSE-2008-40]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Discontinue Its Policy of Requiring Listed Companies Whose Charters
Contain Transfer Restrictions To Amend Their Charters To Include
Language Specifying That Those Restrictions Do Not Apply to Public
Market Transactions
June 2, 2008.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 32612]]
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 16, 2008, the New York Stock Exchange LLC (``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 substantially prepared by the Exchange.
The Exchange has designated the proposed rule change as ``non-
controversial'' under Section 19(b)(3)(A)(iii) \3\ of the Act and Rule
19b-4(f)(6) thereunder,\4\ which renders the proposal effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to discontinue its policy of requiring listed
companies whose charters contain transfer restrictions to amend their
charters to include language specifying that those restrictions do not
apply to public market transactions.
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 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 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
The Exchange proposes to discontinue its policy of requiring listed
companies whose charters contain transfer restrictions to amend their
charters to include language specifying that those restrictions do not
apply to public market transactions. The change in policy will apply to
companies listing in connection with their initial public offerings, as
well as companies transferring from other markets.
The Exchange has a long-standing policy of prohibiting the
inclusion by any listed company in its charter of restrictions on
transfers of the company's equity securities. Typically such provisions
purport to enable the company to void transactions involving the
transfer of the company's shares to purchasers who are designated
prohibited holders. A purchaser is generally deemed to be a prohibited
holder because it owns more than a specified threshold amount of the
company's equity securities, or will do so if the prohibited
transaction is consummated. Companies impose transfer restrictions for
a variety of reasons, but they are most commonly found in the context
of (i) real estate investment trusts (``REITs'') that wish to avoid
losing their REIT status on the basis that a shareholder owns more than
5% of the company's common equity or (ii) companies recently emerged
from bankruptcy whose net operating loss (``NOL'') assets may be
impaired as a result of changes in ownership levels by any shareholder
owning more than 5% of the common equity securities. The charter will
typically provide that the company will have the right to seize any
shares bought by a prohibited purchaser and place them in trust to be
sold for the benefit of that prohibited purchaser. The Exchange is
generally not concerned with the application of this type of
arrangement as it does not affect the finality of the sale as it
relates to the seller. However, the Exchange is concerned if the
language of the charter may be read as giving the company the ability
to unwind the transaction or prohibit sellers from transferring to any
willing purchaser in Exchange transactions. To that end, the Exchange
requires companies that have transfer restrictions in their charters to
include the following provision:
NYSE Transactions. Nothing in this Article [ ] shall preclude
the settlement of any transaction entered into through the
facilities of the New York Stock Exchange or any other national
securities exchange or automated inter-dealer quotation system. The
fact that the settlement of any transaction occurs shall not negate
the effect of any provision of this Article [ ] and any transferee
in such a transaction shall be subject to all of the provisions and
limitations set forth in this Article [ ].
The Exchange believes that it is generally unproblematic for a
company listing at the time of its initial public offering to amend its
charter to insert the Exchange's required language, as such companies
are typically closely held and can easily amend the charter by written
consent prior to listing. However, to the Exchange's knowledge, none of
the other national securities exchanges impose such a requirement and,
as a consequence, a company transferring from another market will
typically need to secure a vote from its public shareholders to amend
the charter. As an accommodation, the Exchange allows transferring
companies to list on the basis of a commitment to have a vote with
respect to adding the required language to the charter at the company's
next scheduled annual meeting. Companies are frequently uncomfortable
with this requirement, as they believe it is confusing to shareholders
and is unnecessary from a practical standpoint. As such, the Exchange
believes the continuation of this policy by it represents a barrier to
effective competition with other markets that do not apply such a
policy.
The Exchange has reviewed its transfer restrictions policy and
concluded that it is no longer necessary in light of the structure of
the modern securities markets. Because all exchange transactions are
between anonymous street name accounts, it is impossible for a listed
company to identify in advance a proposed transferee as a prohibited
holder and block the transaction in advance of its execution. The
company will only become aware of such a transfer when the purchaser
files a Form 13D or 13G, at which time the company may exercise any
right it may have to seize the shares and sell them. Notwithstanding
the language contained in certain charters to the effect that
prohibited transfers are ``void,'' the Exchange does not believe that
it is feasible for a listed company to require the unwinding of a
prohibited transfer.\5\ As such, the Exchange does not believe that
requiring companies to include in their charters language specifying
that any transfer restrictions do not apply to public market
transactions provides any meaningful or necessary protection to sellers
and believes that it is appropriate to discontinue this policy. The
Exchange believes that discontinuing this policy will not result in any
substantially greater likelihood that companies will be able to cause
the unwinding of public market transactions in their equity securities.
While it may be less burdensome in
[[Page 32613]]
many cases for companies undertaking an IPO to comply with the existing
policy than is the case for companies that are already public, the
Exchange believes that it is appropriate to end the policy with respect
to all companies including IPOs, as it believes that the policy is
unnecessary for the reasons stated above and it places the Exchange at
a potential competitive disadvantage to other markets that do not
impose such a requirement on companies listing at the time of their
IPO.
---------------------------------------------------------------------------
\5\ The Exchange expresses no opinion as to the legal
enforceability of transfer restriction provisions in company
charters, which is a matter of the law of the jurisdiction of
incorporation of the company in question.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\6\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\7\ in particular, in that it
is designed to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, 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 change in policy will
particularly promote competition among exchanges, as it will eliminate
a potential impediment to the transfer of the listing of certain
companies from other markets to the Exchange.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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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.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change does not: (i) Significantly affect
the protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days after the date of 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) of the Act \8\ and subparagraph (f)(6) of Rule
19b-4 thereunder.\9\
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under 19b-4(f)(6) normally may not
become operative prior to 30 days after the date of filing.\10\
However, Rule 19b-4(f)(6)(iii) \11\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day pre-operative delay and designate the
proposed rule change to become operative upon filing.
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\10\ 17 CFR 240.19b-4(f)(6)(iii).
\11\ Id.
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because eliminating the NYSE's longstanding transfer restrictions
policy should not have any effect on the settlement of public market
transactions on the Exchange. The Commission designates the proposal to
become effective and operative upon filing.\12\
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\12\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the impact of the proposed rule on
efficiency, competition, and capital formation. 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 the furtherance of the purposes of the Act.
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-2008-40 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2008-40. 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 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 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-2008-40 and should be submitted on or before June 30, 2008.
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\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-12797 Filed 6-6-08; 8:45 am]
BILLING CODE 8010-01-P
