Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change To Adopt on a Permanent Basis a Pilot Program Which Allows the Exchange 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, 45509-45511 [E8-17891]
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Federal Register / Vol. 73, No. 151 / Tuesday, August 5, 2008 / Notices
necessary or appropriate in furtherance
of the purpose 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
The foregoing rule change has become
effective pursuant to section 19(b)(3) of
the Act 6 and Rule 19b–4(f)(2) 7
thereunder because it establishes or
changes a due, fee, or other charge
imposed on members by the NYSE.
At any time within 60 days of the
filing of such 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.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–17842 Filed 8–4–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58253; File No. SR–NYSE–
2008–57]
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–2008–64 on the
subject line.
Paper Comments
dwashington3 on PRODPC61 with NOTICES
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, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
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 publicly available. All
submissions should refer to File
Number SR–NYSE–2008–64 and should
be submitted on or before August 26,
2008.
• 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–2008–64. 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
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Proposed Rule Change To
Adopt on a Permanent Basis a Pilot
Program Which Allows the Exchange
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
July 30, 2008.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Exchange Act’’),1 and Rule 19b–4
thereunder,2 notice is hereby given that
on July 23, 2008, New York Stock
Exchange LLC (the ‘‘NYSE’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
changes as described in Items I, II, and
III below, which items have been
prepared by the Exchange. The
Commission is publishing this notice to
8 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
6 15
U.S.C. 78s(b)(3)(A).
7 17 CFR 19b–4(f)(2).
VerDate Aug<31>2005
14:19 Aug 04, 2008
1 15
Jkt 214001
PO 00000
Frm 00119
Fmt 4703
Sfmt 4703
45509
solicit comments on the proposed rule
changes from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to adopt on a
permanent basis an amendment to the
earnings standard of Section 102.01C(I)
of the Exchange’s Listed Company
Manual (the ‘‘Manual’’) which is
currently in force pursuant to a pilot
program (the ‘‘Pilot Program’’). 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 text of the proposed rule change
is available at https://www.nyse.com, the
NYSE, and 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 NYSE 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 initial public
offering (‘‘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
E:\FR\FM\05AUN1.SGM
05AUN1
dwashington3 on PRODPC61 with NOTICES
45510
Federal Register / Vol. 73, No. 151 / Tuesday, August 5, 2008 / Notices
converted into or exercised for common
stock of the company at the time of
listing. The proposed amendment was
originally implemented for a six-month
period as a Pilot Program.3 The Pilot
Program expired and was subsequently
renewed for an additional three months,
expiring on September 2, 2008.4
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
3 See Securities Exchange Act Release No. 55974
(July 6, 2007), 72 FR 37067 (June 28, 2007) (SR–
NYSE–2007–52). [sic]
4 See Securities Exchange Act Release No. 57905
(June 2, 2008), 73 FR 32613 (June 9, 2008) (SR–
NYSE–2008–43).
VerDate Aug<31>2005
14:19 Aug 04, 2008
Jkt 214001
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.
As the Exchange gains experience in
listing companies in reliance upon the
proposed amendment, we will continue
to carefully reevaluate its
appropriateness. If we become aware
that companies listed pursuant to the
proposed amendment have difficulty
complying with our continued listing
standards, we will inform the
Commission and discuss with the
Commission the desirability of the
continued use of the provision.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) 5 of the Exchange Act, in
general, and furthers the objectives of
Section 6(b)(5) of the Exchange Act,6 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
5 15
6 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00120
Fmt 4703
Sfmt 4703
objectives of the Exchange Act in that it
provides for an adjustment to listing
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 Exchange 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
Within 35 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
90 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 the 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 Exchange
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–2008–57 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.
E:\FR\FM\05AUN1.SGM
05AUN1
Federal Register / Vol. 73, No. 151 / Tuesday, August 5, 2008 / Notices
All submissions should refer to File
Number SR–NYSE–2008–57. 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, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of the 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–2008–57 and should
be submitted on or before August 26,
2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–17891 Filed 8–4–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58254; File No. SR–NYSE–
2008–58]
dwashington3 on PRODPC61 with NOTICES
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Proposed Rule Change To
Make Permanent a Pilot Program
Under Which the Exchange Excludes
From Its Earnings Standard Gains or
Losses From Extinguishment of Debt
Prior to Maturity
July 30, 2008.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Exchange Act’’),1 and Rule 19b–4
7 17
1 15
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
VerDate Aug<31>2005
14:19 Aug 04, 2008
thereunder,2 notice is hereby given that
on July 22, 2008, New York Stock
Exchange LLC (the ‘‘NYSE’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
changes as described in Items I, II, and
III below, which items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
changes from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to adopt on a
permanent basis an amendment to the
earnings standard of section 102.01C(I)
of the Exchange’s Listed Company
Manual (the ‘‘Manual’’) which is
currently in force pursuant to a pilot
program (the ‘‘Pilot Program’’). 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 text of the proposed rule change
is available at https://www.nyse.com, the
NYSE, and 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 NYSE 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
2 17
Jkt 214001
PO 00000
CFR 240.19b–4.
Frm 00121
Fmt 4703
Sfmt 4703
45511
enable the Exchange to adjust the
earnings of companies for purposes of
its pre-tax earnings standard by
excluding gains or losses recognized in
connection with the extinguishment of
debt prior to its maturity. The
adjustment will relate only to gains or
losses incurred in the three-year period
under examination for purposes of the
earnings standard. The proposed
amendment was originally implemented
for a six-month period as a Pilot
Program.3 The Pilot Program expired
and was subsequently renewed for an
additional three months, expiring on
September 2, 2008.4
Prior to the promulgation of
Statement of Financial Accounting
Standards No. 145 (‘‘SFAS No. 145’’) in
2002, Financial Accounting Standards
Board Statement No. 4 (‘‘FASB No. 4’’)
required that gains and losses from the
extinguishment of debt prior to its
maturity that were included in the
determination of net income be
aggregated and, if material, classified as
an extraordinary item, net of related
income tax effect. SFAS No. 145
rescinded FASB No. 4 and, as a result,
gains or losses in connection with the
extinguishment of debt prior to its
maturity are now generally included in
the calculation of operating earnings
under generally accepted accounting
principles (‘‘GAAP’’). As a result, some
companies that would not otherwise be
qualified to list may qualify as a result
of the inclusion in pre-tax income of
gains from the extinguishment of debt
prior to its maturity. In addition, some
prospective listed companies whose
operating earnings would have met the
requirements of the Exchange’s pre-tax
earnings test prior to 2002 are now not
qualified to list as they are required to
include losses from the extinguishment
of debt prior to its maturity in pre-tax
income. In the Exchange’s experience,
these gains and losses are primarily
noncash in nature. The gains generally
represent the accelerated accrual of
original issue discount, while the losses
generally represent the remaining
unamortized portion of costs incurred at
the time of initial borrowing.
The Exchange believes that it is
appropriate to return to its pre-2002
approach of excluding gains and losses
from debt extinguishment from pre-tax
earnings as calculated for purposes of its
earnings standard. The purpose of the
earnings standard is to determine the
suitability for listing of companies on a
3 See Exchange Act Release No. 55974 (July 6,
2007), 72 FR 37067 (June 28, 2007) (SR–NYSE–
2007–52). [sic]
4 See Exchange Act Release No. 57903 (June 2,
2008), 73 FR 32610 (June 9, 2008) (SR–NYSE–2008–
43).
E:\FR\FM\05AUN1.SGM
05AUN1
]]>Agencies
[Federal Register Volume 73, Number 151 (Tuesday, August 5, 2008)]
[Notices]
[Pages 45509-45511]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-17891]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58253; File No. SR-NYSE-2008-57]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change To Adopt on a Permanent Basis
a Pilot Program Which Allows the Exchange 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
July 30, 2008.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is
hereby given that on July 23, 2008, New York Stock Exchange LLC (the
``NYSE'' or the ``Exchange'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule changes as described
in Items I, II, and III below, which items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule changes from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to adopt on a permanent basis an amendment to
the earnings standard of Section 102.01C(I) of the Exchange's Listed
Company Manual (the ``Manual'') which is currently in force pursuant to
a pilot program (the ``Pilot Program''). 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 text of the proposed rule change is available at https://
www.nyse.com, the NYSE, and 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 NYSE 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 initial
public offering (``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
[[Page 45510]]
converted into or exercised for common stock of the company at the time
of listing. The proposed amendment was originally implemented for a
six-month period as a Pilot Program.\3\ The Pilot Program expired and
was subsequently renewed for an additional three months, expiring on
September 2, 2008.\4\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 55974 (July 6,
2007), 72 FR 37067 (June 28, 2007) (SR-NYSE-2007-52). [sic]
\4\ See Securities Exchange Act Release No. 57905 (June 2,
2008), 73 FR 32613 (June 9, 2008) (SR-NYSE-2008-43).
---------------------------------------------------------------------------
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.
As the Exchange gains experience in listing companies in reliance
upon the proposed amendment, we will continue to carefully reevaluate
its appropriateness. If we become aware that companies listed pursuant
to the proposed amendment have difficulty complying with our continued
listing standards, we will inform the Commission and discuss with the
Commission the desirability of the continued use of the provision.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) \5\ of the Exchange Act, in general, and furthers the
objectives of Section 6(b)(5) of the Exchange Act,\6\ 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 Exchange Act
in that it provides for an adjustment to listing 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.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Exchange 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
Within 35 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 90 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 the 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 Exchange 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-2008-57 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.
[[Page 45511]]
All submissions should refer to File Number SR-NYSE-2008-57. 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, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the 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-2008-57 and should be
submitted on or before August 26, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-17891 Filed 8-4-08; 8:45 am]
BILLING CODE 8010-01-P
