Self-Regulatory Organizations; New York Stock Exchange LLC; Order Approving Proposed Rule Change To Enable the Exchange To Waive Annual Listing Fees for Securities Transferring From the Amex or NYSE Arca, Inc., 55885-55887 [E8-22658]

Download as PDF jlentini on PROD1PC65 with NOTICES Federal Register / Vol. 73, No. 188 / Friday, September 26, 2008 / Notices The Commission further believes that the waiver of certain listing fees in connection with transfers to the NYSE from NYSE Alternext US after the closing of the Merger is consistent with the Act. The Commission notes that an issuer seeking to transfer to the Exchange has already paid initial listing fees to another national securities exchange when it became a publicly traded company. The Commission also notes that the Exchange does not expect the loss of initial listing fees to be material and has stated that the fee waiver will not affect the Exchange’s ability to finance its regulatory activities. In addition, after the calendar year of the transfer of the issuer’s security, the Exchange would assess annual fees and listing of additional shares fees from these issuers. Further, the Exchange believes that there will be lower burdens and costs associated with its review of issuers transferring from another national securities exchange and in conducting ongoing compliance activities with respect to such companies. The Commission notes that NYSE has stated that review of transfers from NYSE Alternext US will be less costly than for an unaffiliated entity, as the same regulatory staff on Amex (that will have been absorbed by NYSE Regulation) will have conducted a substantial review of an Amex company that NYSE Regulation will be able to rely upon as a baseline in qualifying the company for listing on the Exchange and in conducting ongoing compliance activities with respect to any such company. Therefore, the Commission believes it is not inequitable or unfair to provide for a waiver of initial and annual fees for a limited period of time after the merger is consummated. Notwithstanding this, the Commission expects that a full and independent review of compliance with the listing standards will be conducted for any company seeking to take advantage of the fee waiver, just as for any company that applies for listing on the Exchange. Further, the Commission expects the Exchange to maintain its commitment to resources to its regulatory oversight of the listing process and its ongoing compliance review of listed companies under its regulatory program. Based on the above, the Commission believes the proposed listing fees and listing fee waivers do not constitute an inequitable allocation of reasonable dues, fees, and other charges under Section 6(b)(4) of the Act,15 do not permit unfair discrimination between issuers under Section 6(b)(5) of the 15 15 U.S.C. 78f(b)(4). VerDate Aug<31>2005 18:07 Sep 25, 2008 Jkt 214001 Act,16 and are otherwise consistent with the requirements of the Act. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,17 that the proposed rule change (SR–NYSE–2008– 56) is hereby approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Florence E. Harmon, Acting Secretary. [FR Doc. E8–22587 Filed 9–25–08; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58601; File No. SR–NYSE– 2008–74] Self-Regulatory Organizations; New York Stock Exchange LLC; Order Approving Proposed Rule Change To Enable the Exchange To Waive Annual Listing Fees for Securities Transferring From the Amex or NYSE Arca, Inc. September 19, 2008. I. Introduction On August 4, 2008, the New York Stock Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 a proposed rule change to waive annual listing fees for securities transferring to NYSE from the American Stock Exchange LLC (‘‘Amex’’) or NYSE Arca, Inc. (‘‘NYSE Arca’’). The proposed rule change was published in the Federal Register on August 15, 2008.3 The Commission received no comments on the proposal. This order approves the proposed rule change. II. Description of the Proposal The Exchange proposes to amend Section 902.02 of the Manual to provide that, with retroactive effect from January 1, 2008, for issuers that transfer their primary class of common stock from Amex to the Exchange, there shall be no annual fee for the remainder of the calendar year in which the transfer occurs for the transferred common stock and any other class of securities of a company listed on the Amex. This 16 15 U.S.C. 78f(b)(5). U.S.C. 78s(b)(2). 18 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 58311 (August 5, 2008), 73 FR 47994. 17 15 PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 55885 proposed rule change (i) is conditioned on the consummation of NYSE Euronext’s acquisition of the Amex (the ‘‘Merger’’),4 (ii) will not take effect until the date of consummation of the Merger, and (iii) will be of no further effect if the closing of the Merger does not take place by March 31, 2009. The amendment also provides that companies transferring the listing of their primary class of common stock from NYSE Arca to the Exchange (with respect to which the Exchange already waives annual fees for the first part year, pursuant to Section 902.02 of the Manual) will not be charged the prorated annual fee in the first year of listing for any other class of securities that is transferred in connection with the transfer of the common stock. A. Securities Transferring From Amex The Exchange proposes to amend Section 902.02 of the Manual to grant companies transferring the listing of their primary class of common shares and any other class of securities to the Exchange from the Amex a waiver of the prorated annual listing fee that would normally be payable in connection with the first partial calendar year of listing on the Exchange. As noted in its proposal, the Exchange believes this is appropriate because companies transferring to the Exchange from the Amex will already have paid annual continued listing fees to the Amex for the calendar year in which they transfer. The Exchange further stated that since some companies may choose to transfer from the Amex to the Exchange in advance of the consummation of the acquisition, and such companies will be making their transfer decisions in expectation of the Merger, the Exchange believes that they should not be penalized for transferring before the closing date. Consequently, the Exchange believes that it is appropriate to apply the fee waiver retroactively to all companies that transfer to the Exchange from the Amex during the portion of the year in which the Merger is consummated prior to such consummation. In its proposal, the Exchange stated that this fee waiver is not unfairly discriminatory and does not constitute an inequitable allocation of fees, in particular because, after the Merger, NYSE Regulation, Inc. (‘‘NYSE 4 NYSE Euronext, the ultimate parent company of the Exchange, has agreed to acquire the Amex pursuant to an Agreement and Plan of Merger, dated as of January 17, 2008. The members of the Amex voted to approve the transaction on June 17, 2008. No vote of the NYSE Euronext shareholders is required. After the closing of the Merger, the Amex will be renamed NYSE Alternext US LLC. E:\FR\FM\26SEN1.SGM 26SEN1 jlentini on PROD1PC65 with NOTICES 55886 Federal Register / Vol. 73, No. 188 / Friday, September 26, 2008 / Notices Regulation’’) will perform listed company regulation for both the Exchange and Amex, including a substantial review of companies upon original listing. Many of the regulatory staff who currently perform initial and continued listing reviews at the Amex will become employees of NYSE Regulation at the time of the Merger and will continue to perform the same duties with respect to Amex companies after the Merger. Companies transferring from Amex will be subjected to the same rigorous regulatory review as any other applicant for listing on the Exchange. However, the Exchange expects that, on average, the review of companies transferring from Amex to the Exchange will be less costly than the review of a transfer from an unaffiliated market, because the Amex listing regulatory staff that will have been absorbed by NYSE Regulation will already have performed a substantial review of any Amex listed company and NYSE Regulation will be able to rely on that prior work as a baseline in qualifying the company for listing on the Exchange and in conducting ongoing compliance activities with respect to those companies. The Exchange also believes that waiving, subject to consummation of the Merger, the prorated annual fees applicable to any Amex security transferred to the NYSE prior to the Merger is not unfairly discriminatory or an inequitable allocation of fees. In its proposal, the Exchange stated that the proposed fee waiver will not impact its ability to devote the same level of resources to its oversight of the companies that benefit from the waiver as it does for other listed companies or, more generally, impact its resource commitment to its regulatory oversight of the listing process or its regulatory programs. The Exchange notes that, after consummation of the Merger, the annual fee revenue paid by companies to the Amex prior to the Merger will be available to NYSE Regulation to finance its regulatory activities in relation to Amex-listed companies, regardless of whether such companies remain on NYSE Alternext US or have chosen to transfer their listing to the NYSE at some point during the year either before or after the Merger. The Exchange asserted that therefore collecting annual fees from companies upon transfer from the Amex to the NYSE would constitute a double billing of those companies for the regulatory expenses incurred by NYSE Regulation in relation to those companies during the year of transfer. VerDate Aug<31>2005 18:07 Sep 25, 2008 Jkt 214001 B. Securities Transferring From NYSE Arca Section 902.02 of the Manual currently provides that any company transferring the listing of its primary class of common equity securities from NYSE Arca to the Exchange will not be charged any annual fees in connection with the first partial year of listing on the Exchange. The Exchange proposes to extend the NYSE Arca annual fee waiver to the prorated annual fees that would otherwise be payable with respect to any other class of securities that an issuer is transferring to the Exchange from NYSE Arca in conjunction with its transfer of its common stock, for the remainder of the calendar year in which the transfer occurs. The Exchange believes this waiver is appropriate in light of the fact that the Exchange and NYSE Arca share a common parent and, without the waiver, NYSE Euronext would be collecting two separate annual fees in relation to such securities. In addition, the same staff from NYSE Regulation are responsible for compliance review of all securities listed on both markets and their prior experience with any securities transferring from NYSE Arca will significantly lessen the burden and costs associated with continued compliance review of those securities once they have been transferred to the NYSE. Specifically, the Exchange believes that the proposed fee waiver will not impact its ability to devote the same level of resources to its oversight of the companies that benefit from the waiver as it does for other listed companies or, more generally, impact its resource commitment to its regulatory oversight of the listing process or its regulatory programs. III. Discussion The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange and, in particular, the requirements of Section 6(b) of the Act and the rules and regulations thereunder. Specifically, the Commission finds that the proposal is consistent with Sections 6(b)(4) 5 and 6(b)(5) of the Act,6 which require that an exchange have rules that provide for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities, and are designed, among other things, to promote just and equitable 5 15 6 15 PO 00000 USC. 78f(b)(4). USC. 78f(b)(5). Frm 00076 Fmt 4703 Sfmt 4703 principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, to protect investors and the public interest, and to not permit unfair discrimination between customers, issuers, brokers, or dealers.7 National securities exchanges traditionally assess annual listing fees on listed companies at the beginning of the calendar year. When a company transfers to another marketplace, such annual fees are typically pro-rated by the new market for the remainder of the calendar year. Annual fees aid a listed market in, among other things, conducting its regulatory responsibilities to ensure compliance by listed companies with continued listing standards and other regulatory requirements. The Commission has carefully examined the fee waiver in light of NYSE’s ongoing regulatory responsibilities as to the transferred companies and, for the reasons set forth below, has determined that the proposed limited annual fee waiver is consistent with the Act. The Commission notes that an Amex or NYSE Arca issuer seeking to transfer to the Exchange has already paid annual continued listing fees to another national securities exchange for the calendar year in which it transferred. Further, the Commission recognizes that subsequent to the consummation of the Merger, both Amex as NYSE Alternext US, NYSE Arca, and NYSE will be under the same common ownership. The Commission also notes that the Exchange anticipates the review of securities transferring from Amex to be less costly than the review of a transfer from an unaffiliated market, because Amex listing regulatory staff that will be part of NYSE Regulation will continue to perform both initial and continued listing reviews. In addition, the Commission notes that the same staff from NYSE Regulation are responsible for compliance review of all securities listed on both NYSE and NYSE Arca, and the Exchange asserted that this will significantly lessen the burden and costs associated with continued compliance review of NYSE Arca transfers. The Commission further believes that the application of the waiver to companies transferring to the NYSE from Amex prior to the Merger, occurring only upon consummation of the Merger, is not unfairly discriminatory and does not constitute 7 In approving this proposed rule change, the Commission notes that it has considered the proposed rules’ impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). E:\FR\FM\26SEN1.SGM 26SEN1 jlentini on PROD1PC65 with NOTICES Federal Register / Vol. 73, No. 188 / Friday, September 26, 2008 / Notices an inequitable allocation of fees. The Commission notes that the Exchange has represented that after consummation of the Merger, the annual fee revenue paid by companies to the Amex prior to the Merger will be available to NYSE Regulation to finance its regulatory activities in relation to Amex-listed companies, regardless of whether such companies remain on NYSE Alternext US or have chosen to transfer their listing to the NYSE at some point during the year either before or after the Merger. Since the retroactive effect is conditioned on consummation of the Merger, the fee waiver recognizes that these regulatory efficiencies will only occur upon that event. The Commission also notes that the fee waiver is for a limited time, applicable to the remainder of the calendar year in which the transfer occurs. Annual fees for both Amex and NYSE Arca transfers will continue to be assessed after the initial pro-rated annual fee waiver. The limited period of the fee waiver helps to ensure that that NYSE will have adequate fees to continue compliance and oversight of its listing program. In summary, based on the reasons set forth above, including NYSE’s assertions that (i) the same regulatory staff on both Amex (that will have been absorbed by NYSE Regulation) and NYSE Regulation will have conducted a substantial review of an Amex or NYSE Arca company that NYSE Regulation will be able to rely upon as a baseline in qualifying the company for both listing on the Exchange and in conducting ongoing compliance activities with respect to any such company; and (ii) the retroactive effect for Amex transfers will only occur if the Merger is consummated, the Commission believes it is not inequitable or unfair to provide for a waiver of annual fees for a limited period of time. The Commission expects, and the Exchange has represented, that a rigorous and independent review of compliance with the listing standards will be conducted for any company seeking to take advantage of the fee waiver, just as for any company that lists on the Exchange. In addition, the Commission expects the Exchange to maintain its commitment of resources to its regulatory oversight of the listing process and its ongoing compliance review of listed companies under its regulatory program. Based on the above, the Commission believes the proposed fee waiver does not constitute an inequitable allocation of reasonable dues, fees, and other charges under Section 6(b)(4) of the VerDate Aug<31>2005 18:07 Sep 25, 2008 Jkt 214001 Act,8 does not permit unfair discrimination between issuers under Section 6(b)(5) of the Act,9 and is otherwise consistent with the requirements of the Act. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,10 that the proposed rule change (SR–NYSE–2008– 74) is hereby approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Florence E. Harmon, Acting Secretary. [FR Doc. E8–22658 Filed 9–25–08; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58596; File No. SR– NYSEArca–2008–98] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Arca, Inc., Amending NYSE Arca Equities Rule 7.35 Governing Auctions September 19, 2008. Pursuant to section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on September 15, 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 and II below, which Items have been prepared by the Exchange. 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 NYSE Arca Equities Rule 7.35(c) and (e) to permit the Exchange to conduct a Market Order Auction and a Closing Auction in all exchange listed ‘‘Derivative Securities Products’’ as defined by NYSE Arca Equities Rule 7.34(a)(4)(A). 8 15 U.S.C. 78f(b)(4). U.S.C. 78f(b)(5). 10 15 U.S.C. 78s(b)(2). 11 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 9 15 PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 55887 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 those 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 parts 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 NYSE Arca Equities Rule 7.35(c) and (e) to permit the Exchange to conduct a Market Order Auction and a Closing Auction in all exchange listed ‘‘Derivative Securities Products’’ as defined by NYSE Arca Equities Rule 7.34(a)(4)(A). Currently NYSE Arca Equities Rule 7.35(c) states that the Exchange will conduct a Market Order Auction in (i) exchange-listed securities for which the Corporation is the primary market; (ii) all exchange-listed exchange traded funds; and (iii) NYSE listed securities subject to a sub-penny trading condition. Similarly, NYSE Arca Equities Rule 7.35(e) states that the Exchange will conduct a Closing Auction in (i) exchange-listed securities for which the Corporation is the primary market; (ii) all exchange-listed exchange traded funds; and (iii) NYSE listed securities subject to a sub-penny trading condition. The Exchange proposes to expand subpart (ii) in both Rules by replacing the term ‘‘exchange-listed exchange traded funds’’ with the term ‘‘exchange-listed Derivative Securities Products’’ as that term is defined in NYSE Arca Equities Rule 7.34(a)(4)(A). The Exchange believes this rule change will foster increased liquidity by expanding the type of securities eligible for Market Order and Closing auctions. This proposed amendment is also consistent with Rules 4752 and 4754 of the Nasdaq Stock Market, L.L.C. (‘‘Nasdaq’’), which do not limit the securities or products that may be traded in the opening and closing auctions. 2. Statutory Basis The proposed rule change is consistent with section 6(b) of the Act E:\FR\FM\26SEN1.SGM 26SEN1

Agencies

[Federal Register Volume 73, Number 188 (Friday, September 26, 2008)]
[Notices]
[Pages 55885-55887]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-22658]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58601; File No. SR-NYSE-2008-74]


Self-Regulatory Organizations; New York Stock Exchange LLC; Order 
Approving Proposed Rule Change To Enable the Exchange To Waive Annual 
Listing Fees for Securities Transferring From the Amex or NYSE Arca, 
Inc.

September 19, 2008.

I. Introduction

    On August 4, 2008, the New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to waive annual listing fees for securities 
transferring to NYSE from the American Stock Exchange LLC (``Amex'') or 
NYSE Arca, Inc. (``NYSE Arca''). The proposed rule change was published 
in the Federal Register on August 15, 2008.\3\ The Commission received 
no comments on the proposal. This order approves the proposed rule 
change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 58311 (August 5, 
2008), 73 FR 47994.
---------------------------------------------------------------------------

II. Description of the Proposal

    The Exchange proposes to amend Section 902.02 of the Manual to 
provide that, with retroactive effect from January 1, 2008, for issuers 
that transfer their primary class of common stock from Amex to the 
Exchange, there shall be no annual fee for the remainder of the 
calendar year in which the transfer occurs for the transferred common 
stock and any other class of securities of a company listed on the 
Amex. This proposed rule change (i) is conditioned on the consummation 
of NYSE Euronext's acquisition of the Amex (the ``Merger''),\4\ (ii) 
will not take effect until the date of consummation of the Merger, and 
(iii) will be of no further effect if the closing of the Merger does 
not take place by March 31, 2009. The amendment also provides that 
companies transferring the listing of their primary class of common 
stock from NYSE Arca to the Exchange (with respect to which the 
Exchange already waives annual fees for the first part year, pursuant 
to Section 902.02 of the Manual) will not be charged the prorated 
annual fee in the first year of listing for any other class of 
securities that is transferred in connection with the transfer of the 
common stock.
---------------------------------------------------------------------------

    \4\ NYSE Euronext, the ultimate parent company of the Exchange, 
has agreed to acquire the Amex pursuant to an Agreement and Plan of 
Merger, dated as of January 17, 2008. The members of the Amex voted 
to approve the transaction on June 17, 2008. No vote of the NYSE 
Euronext shareholders is required. After the closing of the Merger, 
the Amex will be renamed NYSE Alternext US LLC.
---------------------------------------------------------------------------

A. Securities Transferring From Amex

    The Exchange proposes to amend Section 902.02 of the Manual to 
grant companies transferring the listing of their primary class of 
common shares and any other class of securities to the Exchange from 
the Amex a waiver of the prorated annual listing fee that would 
normally be payable in connection with the first partial calendar year 
of listing on the Exchange. As noted in its proposal, the Exchange 
believes this is appropriate because companies transferring to the 
Exchange from the Amex will already have paid annual continued listing 
fees to the Amex for the calendar year in which they transfer. The 
Exchange further stated that since some companies may choose to 
transfer from the Amex to the Exchange in advance of the consummation 
of the acquisition, and such companies will be making their transfer 
decisions in expectation of the Merger, the Exchange believes that they 
should not be penalized for transferring before the closing date. 
Consequently, the Exchange believes that it is appropriate to apply the 
fee waiver retroactively to all companies that transfer to the Exchange 
from the Amex during the portion of the year in which the Merger is 
consummated prior to such consummation.
    In its proposal, the Exchange stated that this fee waiver is not 
unfairly discriminatory and does not constitute an inequitable 
allocation of fees, in particular because, after the Merger, NYSE 
Regulation, Inc. (``NYSE

[[Page 55886]]

Regulation'') will perform listed company regulation for both the 
Exchange and Amex, including a substantial review of companies upon 
original listing. Many of the regulatory staff who currently perform 
initial and continued listing reviews at the Amex will become employees 
of NYSE Regulation at the time of the Merger and will continue to 
perform the same duties with respect to Amex companies after the 
Merger. Companies transferring from Amex will be subjected to the same 
rigorous regulatory review as any other applicant for listing on the 
Exchange. However, the Exchange expects that, on average, the review of 
companies transferring from Amex to the Exchange will be less costly 
than the review of a transfer from an unaffiliated market, because the 
Amex listing regulatory staff that will have been absorbed by NYSE 
Regulation will already have performed a substantial review of any Amex 
listed company and NYSE Regulation will be able to rely on that prior 
work as a baseline in qualifying the company for listing on the 
Exchange and in conducting ongoing compliance activities with respect 
to those companies.
    The Exchange also believes that waiving, subject to consummation of 
the Merger, the prorated annual fees applicable to any Amex security 
transferred to the NYSE prior to the Merger is not unfairly 
discriminatory or an inequitable allocation of fees. In its proposal, 
the Exchange stated that the proposed fee waiver will not impact its 
ability to devote the same level of resources to its oversight of the 
companies that benefit from the waiver as it does for other listed 
companies or, more generally, impact its resource commitment to its 
regulatory oversight of the listing process or its regulatory programs. 
The Exchange notes that, after consummation of the Merger, the annual 
fee revenue paid by companies to the Amex prior to the Merger will be 
available to NYSE Regulation to finance its regulatory activities in 
relation to Amex-listed companies, regardless of whether such companies 
remain on NYSE Alternext US or have chosen to transfer their listing to 
the NYSE at some point during the year either before or after the 
Merger. The Exchange asserted that therefore collecting annual fees 
from companies upon transfer from the Amex to the NYSE would constitute 
a double billing of those companies for the regulatory expenses 
incurred by NYSE Regulation in relation to those companies during the 
year of transfer.

B. Securities Transferring From NYSE Arca

    Section 902.02 of the Manual currently provides that any company 
transferring the listing of its primary class of common equity 
securities from NYSE Arca to the Exchange will not be charged any 
annual fees in connection with the first partial year of listing on the 
Exchange. The Exchange proposes to extend the NYSE Arca annual fee 
waiver to the prorated annual fees that would otherwise be payable with 
respect to any other class of securities that an issuer is transferring 
to the Exchange from NYSE Arca in conjunction with its transfer of its 
common stock, for the remainder of the calendar year in which the 
transfer occurs. The Exchange believes this waiver is appropriate in 
light of the fact that the Exchange and NYSE Arca share a common parent 
and, without the waiver, NYSE Euronext would be collecting two separate 
annual fees in relation to such securities. In addition, the same staff 
from NYSE Regulation are responsible for compliance review of all 
securities listed on both markets and their prior experience with any 
securities transferring from NYSE Arca will significantly lessen the 
burden and costs associated with continued compliance review of those 
securities once they have been transferred to the NYSE. Specifically, 
the Exchange believes that the proposed fee waiver will not impact its 
ability to devote the same level of resources to its oversight of the 
companies that benefit from the waiver as it does for other listed 
companies or, more generally, impact its resource commitment to its 
regulatory oversight of the listing process or its regulatory programs.

III. Discussion

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange and, in 
particular, the requirements of Section 6(b) of the Act and the rules 
and regulations thereunder. Specifically, the Commission finds that the 
proposal is consistent with Sections 6(b)(4) \5\ and 6(b)(5) of the 
Act,\6\ which require that an exchange have rules that provide for the 
equitable allocation of reasonable dues, fees, and other charges among 
its members and other persons using its facilities, and are designed, 
among other things, to promote just and equitable principles of trade, 
to remove impediments to and perfect the mechanism of a free and open 
market and a national market system, to protect investors and the 
public interest, and to not permit unfair discrimination between 
customers, issuers, brokers, or dealers.\7\
---------------------------------------------------------------------------

    \5\ 15 USC. 78f(b)(4).
    \6\ 15 USC. 78f(b)(5).
    \7\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rules' impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    National securities exchanges traditionally assess annual listing 
fees on listed companies at the beginning of the calendar year. When a 
company transfers to another marketplace, such annual fees are 
typically pro-rated by the new market for the remainder of the calendar 
year. Annual fees aid a listed market in, among other things, 
conducting its regulatory responsibilities to ensure compliance by 
listed companies with continued listing standards and other regulatory 
requirements. The Commission has carefully examined the fee waiver in 
light of NYSE's ongoing regulatory responsibilities as to the 
transferred companies and, for the reasons set forth below, has 
determined that the proposed limited annual fee waiver is consistent 
with the Act.
    The Commission notes that an Amex or NYSE Arca issuer seeking to 
transfer to the Exchange has already paid annual continued listing fees 
to another national securities exchange for the calendar year in which 
it transferred. Further, the Commission recognizes that subsequent to 
the consummation of the Merger, both Amex as NYSE Alternext US, NYSE 
Arca, and NYSE will be under the same common ownership. The Commission 
also notes that the Exchange anticipates the review of securities 
transferring from Amex to be less costly than the review of a transfer 
from an unaffiliated market, because Amex listing regulatory staff that 
will be part of NYSE Regulation will continue to perform both initial 
and continued listing reviews. In addition, the Commission notes that 
the same staff from NYSE Regulation are responsible for compliance 
review of all securities listed on both NYSE and NYSE Arca, and the 
Exchange asserted that this will significantly lessen the burden and 
costs associated with continued compliance review of NYSE Arca 
transfers.
    The Commission further believes that the application of the waiver 
to companies transferring to the NYSE from Amex prior to the Merger, 
occurring only upon consummation of the Merger, is not unfairly 
discriminatory and does not constitute

[[Page 55887]]

an inequitable allocation of fees. The Commission notes that the 
Exchange has represented that after consummation of the Merger, the 
annual fee revenue paid by companies to the Amex prior to the Merger 
will be available to NYSE Regulation to finance its regulatory 
activities in relation to Amex-listed companies, regardless of whether 
such companies remain on NYSE Alternext US or have chosen to transfer 
their listing to the NYSE at some point during the year either before 
or after the Merger. Since the retroactive effect is conditioned on 
consummation of the Merger, the fee waiver recognizes that these 
regulatory efficiencies will only occur upon that event.
    The Commission also notes that the fee waiver is for a limited 
time, applicable to the remainder of the calendar year in which the 
transfer occurs. Annual fees for both Amex and NYSE Arca transfers will 
continue to be assessed after the initial pro-rated annual fee waiver. 
The limited period of the fee waiver helps to ensure that that NYSE 
will have adequate fees to continue compliance and oversight of its 
listing program.
    In summary, based on the reasons set forth above, including NYSE's 
assertions that (i) the same regulatory staff on both Amex (that will 
have been absorbed by NYSE Regulation) and NYSE Regulation will have 
conducted a substantial review of an Amex or NYSE Arca company that 
NYSE Regulation will be able to rely upon as a baseline in qualifying 
the company for both listing on the Exchange and in conducting ongoing 
compliance activities with respect to any such company; and (ii) the 
retroactive effect for Amex transfers will only occur if the Merger is 
consummated, the Commission believes it is not inequitable or unfair to 
provide for a waiver of annual fees for a limited period of time. The 
Commission expects, and the Exchange has represented, that a rigorous 
and independent review of compliance with the listing standards will be 
conducted for any company seeking to take advantage of the fee waiver, 
just as for any company that lists on the Exchange. In addition, the 
Commission expects the Exchange to maintain its commitment of resources 
to its regulatory oversight of the listing process and its ongoing 
compliance review of listed companies under its regulatory program.
    Based on the above, the Commission believes the proposed fee waiver 
does not constitute an inequitable allocation of reasonable dues, fees, 
and other charges under Section 6(b)(4) of the Act,\8\ does not permit 
unfair discrimination between issuers under Section 6(b)(5) of the 
Act,\9\ and is otherwise consistent with the requirements of the Act.
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    \8\ 15 U.S.C. 78f(b)(4).
    \9\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-NYSE-2008-74) is hereby 
approved.
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    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-22658 Filed 9-25-08; 8:45 am]
BILLING CODE 8010-01-P