Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Arca, Inc. To Discontinue Its Policy of Requiring Legal Opinions in Connection With Listings of Securities, 51033-51035 [E8-20063]
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Federal Register / Vol. 73, No. 169 / Friday, August 29, 2008 / Notices
mstockstill on PROD1PC66 with NOTICES
securities in a public offering for their
own benefit or use such securities to
reward persons who are in a position to
direct future business to firms, and
industry insiders, including FINRA
member firms and their associated
persons, do not take advantage of their
insider position to purchase new issues
for their own benefit at the expense of
public customers. Because of these
controls, FINRA believes that the Rule
plays an important part in maintaining
investor confidence in the capital
raising and IPO process.
The Rule was originally adopted in
2003, replacing NASD IM–2110–1 (the
Free-Riding and Withholding
Interpretation) in its entirety.6 The Rule
was subject to extensive input from the
industry and other interested persons
during a four-year rulemaking process,
and FINRA believes that there is broad
support for it. The Rule provides
necessary predictability and certainty in
support of capital formation. Based on
FINRA’s experience, the Rule is
achieving its purpose and is
significantly easier than NASD IM–
2110–1 for FINRA member firms and
the investing public to understand and
follow. Among other things, FINRA has
seen a significant reduction in the
number of interpretive and exemptive
issues that have arisen with respect to
the IPO allocation process since the
Rule became effective. There is no
Incorporated NYSE Rule equivalent to
the Rule.7
For the reasons discussed above,
FINRA proposed to transfer NASD Rule
2790 to the Consolidated FINRA
Rulebook in substantially the same
form. As part of this transfer, FINRA
proposed minor changes to the Rule to
reflect the registration of the NASDAQ
Stock Market LLC (‘‘NASDAQ’’) as a
national securities exchange. The Rule
currently refers to the NASDAQ Global
Market because at the time the Rule was
adopted, references to the listing
standards of a national securities
exchange did not include NASDAQ’s
Global Market. Since NASDAQ
completed its registration as a national
securities exchange, the references to
6 See Securities Exchange Act Release No. 48701
(October 24, 2003), 68 FR 62126 (October 31, 2003)
(Order Approving File No. SR–NASD–99–60); see
also NASD Notice to Members 03–79 (December
2003) (SEC Approves New Rule 2790 (Restrictions
on the Purchase and Sale of IPOs of Equity
Securities); Replaces Free-Riding and Withholding
Interpretation).
7 Incorporated NYSE Rules only apply to FINRA
members who are also members of the NYSE. All
FINRA members are subject to existing NASD rules.
See Note 5, supra. Thus, the movement of a rule
that existed only the NASD rulebook but was not
an Incorporated NYSE Rule into the Consolidated
FINRA Rulebook does not create any new
obligations for FINRA members.
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51033
the NASDAQ Global Market in the Rule
are no longer necessary. In addition,
FINRA proposed certain minor,
technical changes to the Rule.
FINRA represented that it would
announce the effective date of the
proposed rule change in a Regulatory
Notice to be published no later than 60
days following Commission approval of
the proposed rule change.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–20084 Filed 8–28–08; 8:45 am]
III. Summary of Comments
[Release No. 34–58413; File No. SR–NYSE
Arca–2008–84]
The Commission received one
comment letter on the proposal.8 The
commenter urged that FINRA amend the
proposal to except FINRA members that
are not underwriters from the Rule.
FINRA has considered the comment and
determined that it is not germane to the
proposal in that the comment relates to
the substantive requirements of the Rule
which FINRA did not propose to change
other than in minor, technical ways.
IV. Discussion and Findings
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act, and the rules and regulations
thereunder that are applicable to a
national securities association.9 In
particular, the Commission believes that
the proposed rule change is consistent
with the provisions of Section 15A(b)(6)
of the Act,10 which requires, among
other things, that FINRA rules be
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, and, in general, to protect
investors and the public interest. The
Commission notes that it has previously
approved the Rule,11 and the proposal
merely moves the Rule nearly verbatim
from the NASD rulebook to the
Consolidated FINRA Rulebook. The
Commission believes that the move
proposed in this filing is primarily
ministerial and only aids FINRA
members in complying with existing
obligations.
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,12 that the
proposed rule change (File No. SR–
FINRA–2008–025) be, and hereby is,
approved.
8 See
Note 4, supra.
approving this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
10 15 U.S.C. 78o–3(b)(6).
11 See Note 6, supra.
12 15 U.S.C. 78s(b)(2).
9 In
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BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by NYSE
Arca, Inc. To Discontinue Its Policy of
Requiring Legal Opinions in
Connection With Listings of Securities
August 22, 2008.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that, on August
8, 2008, NYSE Arca, Inc. (‘‘NYSE Arca’’
or the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice
and order to solicit comments on the
proposal from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NYSE Arca, through its wholly-owned
subsidiary NYSE Arca Equities, Inc.
(‘‘NYSE Arca Equities’’), proposes to
discontinue its practice of requiring the
delivery of an opinion of counsel in
connection with any application to list
securities on the Exchange. In lieu
thereof, the Exchange will require
companies to (i) furnish the Exchange
with copies of opinions of counsel filed
in connection with recent public
offerings or private placements or (ii) if
no opinions of counsel exist, provide to
the Exchange a certificate of good
standing from the company’s
jurisdiction of incorporation. In
addition, the Exchange is discontinuing
its policy of requiring an opinion of
counsel to the effect that the company
is in compliance with all of the
Exchange’s corporate governance
requirements at the time of listing and,
in lieu thereof, will require that
companies provide a revised form of
initial written affirmation evidencing
13 17
CFR 200.30–3(a)(12).
78s(b)(1).
217 CFR 240.19b–4.
115 U.S.C.
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Federal Register / Vol. 73, No. 169 / Friday, August 29, 2008 / Notices
their compliance with the applicable
corporate governance requirements.3
The text of the proposed rule change is
available on the Exchange’s Web site
(https://www.nyse.com), at the
Exchange’s Office of the Secretary, and
at the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item III 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
mstockstill on PROD1PC66 with NOTICES
The Exchange proposes to
discontinue its practice of requiring the
delivery of an opinion of counsel in
connection with any application to list
securities on the Exchange. In lieu
thereof, the Exchange will require
companies to (i) furnish the Exchange
with copies of opinions of counsel filed
in connection with recent public
offerings or private placements or (ii) if
no opinions of counsel exist, provide to
the Exchange a certificate of good
standing from the company’s
jurisdiction of incorporation. In
addition, the Exchange is discontinuing
its policy of requiring an opinion of
counsel to the effect that the company
is in compliance with all of the
Exchange’s corporate governance
requirements at the time of listing and,
in lieu thereof, will require that
companies provide a revised form of
initial written affirmation evidencing
their compliance with the applicable
corporate governance requirements.
3 See Exhibit 3 to this filing, which includes the
revised initial and annual written affirmation (Rule
5.3—Corporate Governance and Disclosure Policies)
marked to show changes from the initial written
affirmation previously used by the Exchange. The
Commission notes that pursuant to the General
Instructions for Form 19b–4, if any form, report, or
questionnaire is referred to in a proposed rule
change, then the form, report, or questionnaire must
be attached and shall be considered as part of the
proposed rule change. See Securities Exchange Act
Release No. 50486 (October 4, 2004), 69 FR 60287
(October 8, 2004).
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The Exchange has had a longstanding
policy of requiring the delivery of an
opinion of counsel addressed to the
Exchange in connection with each
application to list securities, including
applications to list additional shares of
a previously listed class.4 The Exchange
believes that its opinion requirement is
duplicative of several safeguards that
now exist to protect investors in listed
securities. In particular, an issuer’s
independent auditor reviews the
issuance of securities as part of its
annual audit. Additionally, the
underwriters of securities sold in a
public offering receive legal opinions as
to the validity of the issuance of the
securities they purchase, as well as
performing their own due diligence on
the company and the securities.
Furthermore, a legal opinion as to the
legality of the issuance of the securities
being registered is delivered to the SEC
in connection with the filing of any
registration statement. Accordingly, the
Exchange proposes to end its policy of
requiring legal opinions in connection
with listing applications, including
applications to list additional shares of
a previously listed class. Through its
standard condition letter, the Exchange
will require issuers to (i) furnish the
Exchange with copies of opinions of
counsel filed in connection with recent
public offerings or private placements or
(ii) if no opinions of counsel exist,
provide to the Exchange a certificate of
good standing from the company’s
jurisdiction of incorporation.5
The Exchange notes that the
Commission approved a rule filing by
the American Stock Exchange (the
‘‘Amex’’) in 2000 to eliminate opinion
requirements from the Amex Company
Guide under the same conditions NYSE
4 The required opinion relates to: The legality and
valid existence of the issuer; the issuer’s
qualification to do business in jurisdictions other
than its jurisdiction of incorporation; the validity of
authorization and issuance of the securities;
whether the securities are fully paid and nonassessable; the validity of the securities; any
government orders or proceedings that are a
prerequisite to the issuance of the securities;
whether registration of the securities is required;
whether such registration has occurred; and that the
company is in compliance with the Exchange’s
corporate governance listing requirements.
5 The Exchange will also put companies on notice
of this requirement by including a reference to it
in the list of required documentation in connection
with listing applications presented on its Web site
and the checklist of required documentation sent
out to listing applicants. See the revised list of
required documentation included in Exhibit 3
hereto. The Exchange has significantly revised and
shortened the section of its Web site dealing with
the listing application process, primarily by
deleting text that relates to procedures that are no
longer in use and have not been for some time. In
revising the Web site, the Exchange has not changed
its listing policies or procedures in any way that is
not disclosed elsewhere in this filing.
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Arca is proposing in this filing.6
Additionally, to the Exchange’s
knowledge, Nasdaq does not require
legal opinions in connection with new
listings. As such, the Exchange believes
that it is appropriate to conform its
listing procedure in this regard to those
of its direct competitors. In doing so, the
Exchange will avoid the possibility of
any competitive harm arising out of the
imposition of this additional burden on
issuers.
No other major exchange requires as
a condition to listing an opinion with
respect to the issuer’s compliance with
the exchange’s corporate governance
requirements. The Exchange believes
that it has two different sources of
assurance that, at the time of initial
listing, a company is in compliance
with the Exchange’s corporate
governance requirements. First, the
company provides a listing application
executed by an authorized officer of the
company in which it affirms that, at the
time of filing the application, it has
‘‘read and understood the Exchange’s
Listings Rule, and fully believes itself to
be in compliance with, and, if approved
for listing, intends to continue to be in
compliance with, the Exchange’s listing
and corporate governance rules and
requirements, as amended.’’ Second, the
Company provides a written affirmation
at the time of listing that it is in
compliance with the Exchange’s board
and audit committee independence
requirements. The Exchange intends to
amend the written affirmation so that it
includes affirmations of compliance
with the Exchange’s nominating and
compensation committee independence
requirements and thereby
comprehensively covers the Exchange’s
corporate governance requirements. The
revised affirmation is included in
Exhibit 3 to the filing.7 The Exchange
believes that the affirmation in the
listing application and the written
affirmation provide sufficient evidence
of a company’s compliance with the
corporate governance requirements at
the time of listing and that requiring a
corporate governance opinion is
unnecessary.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the objectives of section 6 8 of the Act
in general and furthers the objectives of
section 6(b)(5),9 in particular, in that it
is designed to promote just and
6 See Securities Exchange Act Release No. 42539
(March 17, 2000), 65 FR 15672 (March 23, 2000)
(SR–Amex–99–39).
7 See note 3, supra.
8 15 U.S.C. 78f.
9 15 U.S.C. 78f(b)(5).
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Federal Register / Vol. 73, No. 169 / Friday, August 29, 2008 / Notices
equitable principles of trade, to remove
impediments, and to perfect the
mechanism of, a free and open market
and a national market system, and, in
general, to protect investors and the
public interest. The proposed
amendment specifically seeks to remove
impediments to and perfect the
mechanisms of a free and open market
by conforming the Exchange’s listing
procedures to those of Nasdaq and the
Amex, thereby eliminating any
competitive disadvantage the Exchange
may suffer as a result of imposing a legal
opinion requirement with respect to
securities listings. In addition, the
Exchange’s procedures will continue to
protect the interests of investors by
imposing requirements that will ensure
that listed companies are duly and
validly organized and in good standing
in their jurisdiction of incorporation.
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 on the proposed
rule change were neither solicited nor
received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The proposed rule change has taken
effect upon filing pursuant to section
19(b)(3)(A) of the Act.10
The Exchange asserts that the
proposed rule change (i) will not
significantly affect the protection of
investors or the public interest, (ii) will
not impose any significant burden on
competition, and (iii) will not become
operative for 30 days after the date of
this filing, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest.
The Exchange provided the
Commission with written notice of its
intent to file the proposed rule change,
along with a brief description and text
of the proposed rule change, at least five
business days prior to the date of the
filing of the proposed rule change as
required by Rule 19b–4(f)(6).11
At any time within 60 days of the
filing of the proposed rule change, the
10 15
11 17
U.S.C. 78s(b)(3)(A).
C.F.R. 240.19b–4(f)(6).
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17:32 Aug 28, 2008
Jkt 214001
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:
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–NYSEArca–2008–84 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–NYSEArca–2008–84. 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 self-regulatory
organization. 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–
NYSEArca–2008–84 and should be
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51035
submitted on or before September 19,
2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–20063 Filed 8–28–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58420; File No. SR–Phlx–
2008–62]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by the
Philadelphia Stock Exchange, Inc.
Relating to the Exchange’s Fee
Schedule Concerning Complex Orders
August 25, 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 August
22, 2008, the Philadelphia Stock
Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III, below, which Items
have been prepared by the Phlx. 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 Phlx, pursuant to section 19(b)(1)
of the Act 3 and Rule 19b–4 thereunder,4
proposes to amend its option fee
schedule by establishing that certain
fees would not be assessed on contracts
that are executed electronically as part
of a Complex Order 5 on the Exchange’s
electronic trading platform for options,
Phlx XL,6 and that contract volume
thresholds applicable to certain
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(1).
4 17 CFR 240.19b–4.
5The Exchange recently filed, and the
Commission approved, a proposed rule change with
the Commission to automate the process for
handling and executing complex orders. See
Securities Exchange Act Release No. 58361 (August
14, 2008) (SR–Phlx–2008–50) (‘‘Approval Order’’).
A Complex Order is composed of two or more
option components and is priced as a single order
(a ‘‘Complex Order Strategy’’) on a net debit or net
credit basis.
6 See Securities Exchange Act Release No. 50100
(July 27, 2004), 69 FR 46612 (August 3, 2004) (SR–
Phlx–2003–59).
1 15
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]]>Agencies
[Federal Register Volume 73, Number 169 (Friday, August 29, 2008)]
[Notices]
[Pages 51033-51035]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-20063]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58413; File No. SR-NYSE Arca-2008-84]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NYSE Arca, Inc. To Discontinue
Its Policy of Requiring Legal Opinions in Connection With Listings of
Securities
August 22, 2008.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that, on August 8, 2008, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice and order to solicit comments on
the proposal 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
NYSE Arca, through its wholly-owned subsidiary NYSE Arca Equities,
Inc. (``NYSE Arca Equities''), proposes to discontinue its practice of
requiring the delivery of an opinion of counsel in connection with any
application to list securities on the Exchange. In lieu thereof, the
Exchange will require companies to (i) furnish the Exchange with copies
of opinions of counsel filed in connection with recent public offerings
or private placements or (ii) if no opinions of counsel exist, provide
to the Exchange a certificate of good standing from the company's
jurisdiction of incorporation. In addition, the Exchange is
discontinuing its policy of requiring an opinion of counsel to the
effect that the company is in compliance with all of the Exchange's
corporate governance requirements at the time of listing and, in lieu
thereof, will require that companies provide a revised form of initial
written affirmation evidencing
[[Page 51034]]
their compliance with the applicable corporate governance
requirements.\3\ 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.
---------------------------------------------------------------------------
\3\ See Exhibit 3 to this filing, which includes the revised
initial and annual written affirmation (Rule 5.3--Corporate
Governance and Disclosure Policies) marked to show changes from the
initial written affirmation previously used by the Exchange. The
Commission notes that pursuant to the General Instructions for Form
19b-4, if any form, report, or questionnaire is referred to in a
proposed rule change, then the form, report, or questionnaire must
be attached and shall be considered as part of the proposed rule
change. See Securities Exchange Act Release No. 50486 (October 4,
2004), 69 FR 60287 (October 8, 2004).
---------------------------------------------------------------------------
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item III 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 practice of requiring the
delivery of an opinion of counsel in connection with any application to
list securities on the Exchange. In lieu thereof, the Exchange will
require companies to (i) furnish the Exchange with copies of opinions
of counsel filed in connection with recent public offerings or private
placements or (ii) if no opinions of counsel exist, provide to the
Exchange a certificate of good standing from the company's jurisdiction
of incorporation. In addition, the Exchange is discontinuing its policy
of requiring an opinion of counsel to the effect that the company is in
compliance with all of the Exchange's corporate governance requirements
at the time of listing and, in lieu thereof, will require that
companies provide a revised form of initial written affirmation
evidencing their compliance with the applicable corporate governance
requirements.
The Exchange has had a longstanding policy of requiring the
delivery of an opinion of counsel addressed to the Exchange in
connection with each application to list securities, including
applications to list additional shares of a previously listed class.\4\
The Exchange believes that its opinion requirement is duplicative of
several safeguards that now exist to protect investors in listed
securities. In particular, an issuer's independent auditor reviews the
issuance of securities as part of its annual audit. Additionally, the
underwriters of securities sold in a public offering receive legal
opinions as to the validity of the issuance of the securities they
purchase, as well as performing their own due diligence on the company
and the securities. Furthermore, a legal opinion as to the legality of
the issuance of the securities being registered is delivered to the SEC
in connection with the filing of any registration statement.
Accordingly, the Exchange proposes to end its policy of requiring legal
opinions in connection with listing applications, including
applications to list additional shares of a previously listed class.
Through its standard condition letter, the Exchange will require
issuers to (i) furnish the Exchange with copies of opinions of counsel
filed in connection with recent public offerings or private placements
or (ii) if no opinions of counsel exist, provide to the Exchange a
certificate of good standing from the company's jurisdiction of
incorporation.\5\
---------------------------------------------------------------------------
\4\ The required opinion relates to: The legality and valid
existence of the issuer; the issuer's qualification to do business
in jurisdictions other than its jurisdiction of incorporation; the
validity of authorization and issuance of the securities; whether
the securities are fully paid and non-assessable; the validity of
the securities; any government orders or proceedings that are a
prerequisite to the issuance of the securities; whether registration
of the securities is required; whether such registration has
occurred; and that the company is in compliance with the Exchange's
corporate governance listing requirements.
\5\ The Exchange will also put companies on notice of this
requirement by including a reference to it in the list of required
documentation in connection with listing applications presented on
its Web site and the checklist of required documentation sent out to
listing applicants. See the revised list of required documentation
included in Exhibit 3 hereto. The Exchange has significantly revised
and shortened the section of its Web site dealing with the listing
application process, primarily by deleting text that relates to
procedures that are no longer in use and have not been for some
time. In revising the Web site, the Exchange has not changed its
listing policies or procedures in any way that is not disclosed
elsewhere in this filing.
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The Exchange notes that the Commission approved a rule filing by
the American Stock Exchange (the ``Amex'') in 2000 to eliminate opinion
requirements from the Amex Company Guide under the same conditions NYSE
Arca is proposing in this filing.\6\ Additionally, to the Exchange's
knowledge, Nasdaq does not require legal opinions in connection with
new listings. As such, the Exchange believes that it is appropriate to
conform its listing procedure in this regard to those of its direct
competitors. In doing so, the Exchange will avoid the possibility of
any competitive harm arising out of the imposition of this additional
burden on issuers.
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\6\ See Securities Exchange Act Release No. 42539 (March 17,
2000), 65 FR 15672 (March 23, 2000) (SR-Amex-99-39).
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No other major exchange requires as a condition to listing an
opinion with respect to the issuer's compliance with the exchange's
corporate governance requirements. The Exchange believes that it has
two different sources of assurance that, at the time of initial
listing, a company is in compliance with the Exchange's corporate
governance requirements. First, the company provides a listing
application executed by an authorized officer of the company in which
it affirms that, at the time of filing the application, it has ``read
and understood the Exchange's Listings Rule, and fully believes itself
to be in compliance with, and, if approved for listing, intends to
continue to be in compliance with, the Exchange's listing and corporate
governance rules and requirements, as amended.'' Second, the Company
provides a written affirmation at the time of listing that it is in
compliance with the Exchange's board and audit committee independence
requirements. The Exchange intends to amend the written affirmation so
that it includes affirmations of compliance with the Exchange's
nominating and compensation committee independence requirements and
thereby comprehensively covers the Exchange's corporate governance
requirements. The revised affirmation is included in Exhibit 3 to the
filing.\7\ The Exchange believes that the affirmation in the listing
application and the written affirmation provide sufficient evidence of
a company's compliance with the corporate governance requirements at
the time of listing and that requiring a corporate governance opinion
is unnecessary.
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\7\ See note 3, supra.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of section 6 \8\ of the Act in general and furthers
the objectives of section 6(b)(5),\9\ in particular, in that it is
designed to promote just and
[[Page 51035]]
equitable principles of trade, to remove impediments, and to perfect
the mechanism of, a free and open market and a national market system,
and, in general, to protect investors and the public interest. The
proposed amendment specifically seeks to remove impediments to and
perfect the mechanisms of a free and open market by conforming the
Exchange's listing procedures to those of Nasdaq and the Amex, thereby
eliminating any competitive disadvantage the Exchange may suffer as a
result of imposing a legal opinion requirement with respect to
securities listings. In addition, the Exchange's procedures will
continue to protect the interests of investors by imposing requirements
that will ensure that listed companies are duly and validly organized
and in good standing in their jurisdiction of incorporation.
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\8\ 15 U.S.C. 78f.
\9\ 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 on the proposed rule change were neither solicited
nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The proposed rule change has taken effect upon filing pursuant to
section 19(b)(3)(A) of the Act.\10\
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\10\ 15 U.S.C. 78s(b)(3)(A).
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The Exchange asserts that the proposed rule change (i) will not
significantly affect the protection of investors or the public
interest, (ii) will not impose any significant burden on competition,
and (iii) will not become operative for 30 days after the date of this
filing, or such shorter time as the Commission may designate if
consistent with the protection of investors and the public interest.
The Exchange provided the Commission with written notice of its
intent to file the proposed rule change, along with a brief description
and text of the proposed rule change, at least five business days prior
to the date of the filing of the proposed rule change as required by
Rule 19b-4(f)(6).\11\
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\11\ 17 C.F.R. 240.19b-4(f)(6).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
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-NYSEArca-2008-84 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-NYSEArca-2008-84. 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 self-regulatory
organization. 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-
NYSEArca-2008-84 and should be submitted on or before September 19,
2008.
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\12\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-20063 Filed 8-28-08; 8:45 am]
BILLING CODE 8010-01-P
