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, 32613-32615 [E8-12798]
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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
32614
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 20,
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 amend the
earnings standard of Section 102.01C(I)
of the Exchange’s Listed Company
Manual (‘‘Manual’’). The amendment
will enable the Exchange to adjust the
earnings of companies by reversing the
income statement effects for all periods
of any changes in fair value of financial
instruments classified as a liability
recorded by the company in earnings,
provided such financial instrument is
either being redeemed with the
proceeds of an offering occurring in
conjunction with the listing or
converted into or exercised for common
stock of the company at the time of
listing. The proposed amendment was
originally filed with the Commission as
a pilot program (‘‘Pilot Program’’),5
which has since expired and this filing
seeks to renew the Pilot Program for an
additional three months. The text of the
proposed rule changes 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.
mstockstill on PROD1PC66 with 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
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
1 15
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).
5 See Securities Exchange Act Release No. 56290
(August 20, 2007), 72 FR 49033 (August 27, 2007)
(SR–NYSE–2007–75).
2 17
VerDate Aug<31>2005
18:05 Jun 06, 2008
Jkt 214001
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 amend the
earnings standard of Section 102.01C(I)
of the Manual. The amendment will
enable the Exchange to adjust the
earnings of companies listing in
conjunction with an IPO by reversing
the income statement effects for all
periods of changes in fair value of
financial instruments classified as a
liability recorded by the company in
earnings, provided such financial
instrument is either being redeemed
with the proceeds of an offering
occurring in conjunction with the listing
or converted into or exercised for
common stock of the company at the
time of listing. The proposed
amendment was originally filed with
the Commission for a six month period
as a Pilot Program.6 The Pilot Program
has expired and this filing seeks to
renew the Pilot Program for an
additional three months.
Nonpublic companies engaging in
pre-IPO financings often raise capital
through the sale of preferred stock and
warrants to purchase preferred stock.
Preferred stock and preferred stock
warrants are also sometimes issued by
pre-IPO companies to service providers
in lieu of cash compensation. Typically,
at the time of the company’s IPO, the
preferred stock is converted into
common stock and the preferred stock
warrants are automatically exercised
and the underlying preferred stock is
converted into common stock of the
company. In some cases, companies
may also redeem some or all of the
outstanding preferred stock with a
portion of the proceeds from the IPO.
Some pre-IPO companies have
determined that they must record in
earnings changes in the fair value of
certain financial instruments classified
as liabilities. As the fair value of a preIPO company’s equity often increases as
the company gets closer to its IPO, many
companies have had to record
significant reductions in earnings
associated with increases in the fair
value of the preferred stock warrant
liability. In certain cases, the impact on
the company’s earnings as reported
under generally accepted accounting
principles (‘‘GAAP’’) of the preferred
stock liability causes otherwise
qualified companies to fail to qualify
under the Exchange’s earnings standard.
Under the Exchange’s current rules, the
Exchange cannot list these companies
even though the preferred stock warrant
liability will be extinguished at the time
of the IPO by conversion into common
stock or redemption out of the proceeds
of the IPO.
The Exchange believes that it is
appropriate to exclude the effects of
changes in fair value of a financial
instrument classified as a liability from
a company’s earnings where the
financial instrument is being retired at
the time of a company’s listing either
out of the proceeds of a concurrent
offering or by conversion into common
stock at the time of listing. The
Exchange believes that adjusting
company earnings for charges arising
out of the changes in fair value of
financial instruments that are retired
with the proceeds of an offering
occurring in conjunction with the listing
or converted into common stock at the
time of listing is consistent with the
adjustments that are currently permitted
under Section 102.01C for a number of
other nonrecurring charges to earnings
that are included in net income as
recorded under GAAP, such as the
exclusion of impairment charges on
long-lived assets, the exclusion of gains
and losses on sales of a subsidiary’s or
investee’s stock and the exclusion of inprocess purchased research and
development charges. The Exchange
also believes that this adjustment is
reasonable given the purpose of the
earnings standard, which is to
determine the suitability for listing of
companies on a forward-looking basis.
As with all companies listed on the
Exchange, the Financial Compliance
staff of NYSE Regulation will monitor
on an ongoing basis the compliance
with the Exchange’s continued listing
standards of any companies listed in
reliance upon the proposed amendment.
Such companies will be subject to
delisting if they are found at any time
to be below the Exchange’s continued
listing standards.
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
7 15
6 Id.
PO 00000
Frm 00067
8 15
Fmt 4703
Sfmt 4703
E:\FR\FM\09JNN1.SGM
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
09JNN1
Federal Register / Vol. 73, No. 111 / Monday, June 9, 2008 / Notices
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
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 pre9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
11 17 CFR 240.19b–4(f)(6)(iii).
12 Id.
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:
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–2008–44 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–2008–44. 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
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).
10 17
VerDate Aug<31>2005
operative 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.
Jkt 214001
PO 00000
Frm 00068
Fmt 4703
Sfmt 4703
32615
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–2008–44 and should
be submitted on or before June 27, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–12798 Filed 6–6–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57911; File No. SR–
NASDAQ–2008–043]
Self-Regulatory Organizations; the
NASDAQ Stock Market LLC; Notice of
Filing of Proposed Rule Change and
Amendment No. 1 Thereto To Amend
the Definition of ‘‘Non-Industry
Director’’ in the By-Laws of the
NASDAQ OMX Group, Inc. and the
NASDAQ Stock Market LLC
June 3, 2008.
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 May 12,
2008, The NASDAQ Stock Market LLC
(the ‘‘NASDAQ Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been substantially prepared by the
NASDAQ Exchange. On May 28, 2008,
the NASDAQ Exchange filed
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\09JNN1.SGM
09JNN1
]]>Agencies
[Federal Register Volume 73, Number 111 (Monday, June 9, 2008)]
[Notices]
[Pages 32613-32615]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-12798]
-----------------------------------------------------------------------
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
[[Page 32614]]
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on May 20, 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 amend the earnings standard of Section
102.01C(I) of the Exchange's Listed Company Manual (``Manual''). The
amendment will enable the Exchange to adjust the earnings of companies
by reversing the income statement effects for all periods of any
changes in fair value of financial instruments classified as a
liability recorded by the company in earnings, provided such financial
instrument is either being redeemed with the proceeds of an offering
occurring in conjunction with the listing or converted into or
exercised for common stock of the company at the time of listing. The
proposed amendment was originally filed with the Commission as a pilot
program (``Pilot Program''),\5\ which has since expired and this filing
seeks to renew the Pilot Program for an additional three months. The
text of the proposed rule changes 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.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 56290 (August 20,
2007), 72 FR 49033 (August 27, 2007) (SR-NYSE-2007-75).
---------------------------------------------------------------------------
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 amend the earnings standard of Section
102.01C(I) of the Manual. The amendment will enable the Exchange to
adjust the earnings of companies listing in conjunction with an IPO by
reversing the income statement effects for all periods of changes in
fair value of financial instruments classified as a liability recorded
by the company in earnings, provided such financial instrument is
either being redeemed with the proceeds of an offering occurring in
conjunction with the listing or converted into or exercised for common
stock of the company at the time of listing. The proposed amendment was
originally filed with the Commission for a six month period as a Pilot
Program.\6\ The Pilot Program has expired and this filing seeks to
renew the Pilot Program for an additional three months.
---------------------------------------------------------------------------
\6\ Id.
---------------------------------------------------------------------------
Nonpublic companies engaging in pre-IPO financings often raise
capital through the sale of preferred stock and warrants to purchase
preferred stock. Preferred stock and preferred stock warrants are also
sometimes issued by pre-IPO companies to service providers in lieu of
cash compensation. Typically, at the time of the company's IPO, the
preferred stock is converted into common stock and the preferred stock
warrants are automatically exercised and the underlying preferred stock
is converted into common stock of the company. In some cases, companies
may also redeem some or all of the outstanding preferred stock with a
portion of the proceeds from the IPO.
Some pre-IPO companies have determined that they must record in
earnings changes in the fair value of certain financial instruments
classified as liabilities. As the fair value of a pre-IPO company's
equity often increases as the company gets closer to its IPO, many
companies have had to record significant reductions in earnings
associated with increases in the fair value of the preferred stock
warrant liability. In certain cases, the impact on the company's
earnings as reported under generally accepted accounting principles
(``GAAP'') of the preferred stock liability causes otherwise qualified
companies to fail to qualify under the Exchange's earnings standard.
Under the Exchange's current rules, the Exchange cannot list these
companies even though the preferred stock warrant liability will be
extinguished at the time of the IPO by conversion into common stock or
redemption out of the proceeds of the IPO.
The Exchange believes that it is appropriate to exclude the effects
of changes in fair value of a financial instrument classified as a
liability from a company's earnings where the financial instrument is
being retired at the time of a company's listing either out of the
proceeds of a concurrent offering or by conversion into common stock at
the time of listing. The Exchange believes that adjusting company
earnings for charges arising out of the changes in fair value of
financial instruments that are retired with the proceeds of an offering
occurring in conjunction with the listing or converted into common
stock at the time of listing is consistent with the adjustments that
are currently permitted under Section 102.01C for a number of other
nonrecurring charges to earnings that are included in net income as
recorded under GAAP, such as the exclusion of impairment charges on
long-lived assets, the exclusion of gains and losses on sales of a
subsidiary's or investee's stock and the exclusion of in-process
purchased research and development charges. The Exchange also believes
that this adjustment is reasonable given the purpose of the earnings
standard, which is to determine the suitability for listing of
companies on a forward-looking basis.
As with all companies listed on the Exchange, the Financial
Compliance staff of NYSE Regulation will monitor on an ongoing basis
the compliance with the Exchange's continued listing standards of any
companies listed in reliance upon the proposed amendment. Such
companies will be subject to delisting if they are found at any time to
be below the Exchange's continued listing standards.
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
[[Page 32615]]
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.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b).
\8\ 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
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
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\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 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.\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 pre-operative delay and designate the
proposed rule change to become operative upon filing.
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\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ 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 the proposed rule change is consistent with other adjustments
the Exchange makes when evaluating applicants on a forward-looking,
post-IPO 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\
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\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).
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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-2008-44 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-2008-44. 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-2008-44 and should be submitted on or before June 27, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-12798 Filed 6-6-08; 8:45 am]
BILLING CODE 8010-01-P
