Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Sections 102.01 and 103.00 of the Exchange's Listed Company Manual To Permit the Consideration of Stockholders and Trading Volume in the Company's Home Country Market or Primary Trading Market Outside the United States, Provided Such Market is a Regulated Stock Exchange, When Determining the Qualification for Initial Listing Under Section 102.01 of a Company From Outside North America, 65028-65030 [2012-26143]
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65028
Federal Register / Vol. 77, No. 206 / Wednesday, October 24, 2012 / Notices
allocate and reallocate a Fund’s assets
among multiple Subadvisors; (iv)
monitor and evaluate the performance
of Subadvisors; and (v) implement
procedures reasonably designed to
ensure that the Subadvisors comply
with each Fund’s investment objective,
policies and restrictions.
11. No trustee or officer of the Trust,
or of a Fund, or director or officer of the
Advisor, will own directly or indirectly
(other than through a pooled investment
vehicle that is not controlled by such
person) any interest in a Subadvisor,
except for (a) ownership of interests in
the Advisor or any entity that controls,
is controlled by, or is under common
control with the Advisor; or (b)
ownership of less than 1% of the
outstanding securities of any class of
equity or debt of a publicly traded
company that is either a Subadvisor or
an entity that controls, is controlled by,
or is under common control with a
Subadvisor.
12. Each Fund will disclose in its
registration statement the Aggregate Fee
Disclosure.
13. In the event the Commission
adopts a rule under the Act providing
substantially similar relief to that in the
order requested in the application, the
requested order will expire on the
effective date of that rule.
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that October 5,
2012, New York Stock Exchange LLC
(‘‘NYSE’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Kevin M. O’Neill,
Deputy Secretary.
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.
[FR Doc. 2012–26163 Filed 10–23–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
wreier-aviles on DSK5TPTVN1PROD with
[Release No. 34–68065; File No. SR–NYSE–
2012–52]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Amending
Sections 102.01 and 103.00 of the
Exchange’s Listed Company Manual
To Permit the Consideration of
Stockholders and Trading Volume in
the Company’s Home Country Market
or Primary Trading Market Outside the
United States, Provided Such Market is
a Regulated Stock Exchange, When
Determining the Qualification for Initial
Listing Under Section 102.01 of a
Company From Outside North America
October 18, 2012.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Sections 102.01 and 103.00 of the
Exchange’s Listed Company Manual
(the ‘‘Manual’’) to permit the
consideration of stockholders and
trading volume in the company’s home
country market or primary trading
market outside the United States,
provided such market is a regulated
stock exchange, when determining the
qualification for initial listing under
Section 102.01 of a company from
outside North America. The text of the
proposed rule change is available on the
Exchange’s Web site at www.nyse.com,
at the principal office of the Exchange,
and at the Commission’s Public
Reference Room.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Sections 102.01 and 103.00 of the
Manual to permit the consideration of
stockholders and trading volume in the
company’s home country market or
primary trading market outside the
United States, provided such market is
a regulated stock exchange, when
determining the qualification for initial
2 15
1 15
U.S.C. 78s(b)(1).
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U.S.C. 78a.
CFR 240.19b–4.
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listing under Section 102.01 of a
company from outside North America.
Section 102.01A of the Manual sets
forth the Exchange’s minimum initial
listing requirements with respect to
distribution for companies seeking to
list under the Exchange’s ‘‘domestic’’
initial listing standards.4 A note
included in Section 102.01B provides
that, when considering a listing
application from a company organized
under the laws of Canada, Mexico or the
United States (‘‘North America’’), the
Exchange will include all North
American holders and North American
trading volume in applying the
minimum stockholder and trading
volume requirements of Section
102.01A. By comparison, Section 103.00
specifies that, when a company from
outside North America seeks to list
under the domestic criteria in Section
102.01B, the Exchange will consider
only stockholders and trading volume in
the United States.
The Exchange proposes to amend
Sections 102.01B and 103.00 to provide
that, in connection with the listing of
any issuer from outside North America,
the Exchange will have the discretion,
but will not be required, to consider
holders and trading volume in the
company’s home country market or
primary trading market outside the
United States in determining whether a
company is qualified for listing under
Section 102.01, provided such market is
a regulated stock exchange.5 The
proposed amended rule text specifies
that, in exercising this discretion, the
Exchange would consider all relevant
factors including: (i) Whether the
information was derived from a reliable
source, preferably either a regulated
securities market or a transfer agent that
was subject to governmental regulation;
(ii) whether there existed efficient
4 While Section 102.01 makes reference to
‘‘domestic’’ companies, Section 103.00 specifies
that non-U.S. companies can qualify for listing
under either the ‘‘domestic’’ standards set forth in
Section 102.01 or the Alternate Listing Standards
for foreign companies set forth in Section 103.
5 Consistent with the existing text of Section
102.01B, in the case of a security that would list as
an American Depositary Receipt (‘‘ADR’’), the
Exchange would adjust share data so that the
company’s shareholders and trading volume would
be analyzed on an ADR-equivalent basis. For
example, assume that a Mexican company has
ADRs trading in the United States and ordinary
shares trading in Mexico, with each ADR
representing 10 ordinary shares. If the company
were to apply to list its U.S.-traded ADRs on the
NYSE, the Exchange would divide the Mexican
share volume by 10 in determining whether the
combined ADR/share volume meets the
requirements of the listing criteria. For Companies
that have multiple series of shares or ADR’s the
Exchange will include the volume only in the
specific ordinary shares and overlying ADRs that
would be listed on the exchange.
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Federal Register / Vol. 77, No. 206 / Wednesday, October 24, 2012 / Notices
mechanisms for the transfer of securities
between the company’s non-U.S. trading
market and the United States; and (iii)
the number of shareholders and the
extent of trading in the company’s
securities in the United States prior to
the listing.
The Exchange notes that it has been
its experience that where there is a
liquid market for a company’s securities
in its home country or primary trading
market and where it is relatively easy to
transfer securities between the home
country or primary trading market and
the United States, a liquid trading
market can develop quickly on the
Exchange even if there are relatively few
U.S. holders at the time of original
listing. Brazil is an example of a country
whose companies sometimes list on the
Exchange without a concurrent U.S.
initial public offering and where a
liquid trading market quickly develops
in the United States.
Currently, the only option for listing
qualification available to a company
from outside North America which is
unable to comply with the U.S.-only
distribution requirements of Section
102.01B 6 [sic] is to qualify under the
Alternate Listing Standards for foreign
companies set forth in Section 103. The
Alternate Listing Standards were
adopted at a time when the listing of
foreign companies on U.S. exchanges
was still relatively uncommon. At that
time, the Exchange’s domestic listing
standards required applicants to have
2,000 round lot holders in the United
States, or, in the case of North American
companies, within North America. As
stated in Section 103.00, the Exchange
recognized that the domestic
distribution requirements then in effect
were ‘‘a major obstacle for many large
non-U.S. companies which otherwise
fulfill many times over the normal size
and earnings requirements for listing on
the Exchange.’’ As the Alternate Listing
Standards were designed for the listing
of large foreign companies with a large
shareholder base and an exchange
listing in their home country, the 5,000
worldwide round lot holder
requirement of Section 103.01 was not
unduly burdensome. However, since the
adoption of the Alternate Listing
Standards there have been two
significant changes. First, the NYSE
amended its distribution standards in
Section 102.01B 7 [sic] so that
companies listing under the domestic
standards typically now list on the basis
of a 400 round lot holder requirement.
6 The Commission notes that Section 102.01A of
the Exchange’s Listed Company Manual contains
the distribution requirements.
7 See id.
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Consequently, the disparity between the
5,000 round lot holder requirement of
the Alternate Listing Standards and the
current domestic distribution
requirements is far greater than when
the Alternate Listing Standards were
initially adopted. Second, many of the
foreign companies which now apply to
list are significantly smaller than the
large foreign companies for which the
Alternate Listing Standards were
designed. Consequently, the significant
disparity between the domestic and
international shareholder requirements
is further highlighted by the fact that
many of the smaller foreign companies
now seeking to list on the Exchange
have far fewer shareholders than was
typical for the large companies for
which the international distribution
requirements were designed.
In addition to the difficulty many
foreign listing applicants experience in
meeting the distribution requirements
under the Alternate Listing Standards, it
has also been the Exchange’s experience
in recent years that many foreign
companies that apply to list on the
NYSE are able to meet the financial
requirements to list under one or more
of the domestic listing standards, but are
not large enough to meet the market
capitalization and financial
requirements of the Alternate Listing
Standards. The proposed amendments
address this anomaly, as they would
permit the listing of foreign companies
which meet one of the domestic
financial listing standards and which,
while they would not meet any of the
domestic distribution standards based
solely on shareholders or trading
volume in the United States, would be
able to meet those requirements on the
basis of their aggregate shareholder base
and trading volume in both the United
States and the company’s home country
market or primary trading market
outside the United States, provided
such market is a regulated stock
exchange.
The Exchange notes that the Nasdaq
Global Market requires applicants for
initial listing to have 400 round lot
holders, but do not specify that this
requirement can only be met on the
basis of holders in the United States.8
Consequently, the Nasdaq Global
Market has the discretion to qualify
companies on the basis of their
8 See Nasdaq Marketplace Rule 5405(a). The
Exchange also notes that Nasdaq Marketplace Rule
5215(b) provides that, when listing an ADR, the
underlying security will be considered when
determining annual income from continuing
operations, publicly held shares, market value of
publicly held shares, stockholders’ equity, round lot
or public holders, operating history, market value
of listed securities, and total assets and total
revenue.
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65029
worldwide holders. The Exchange also
notes that its distribution standards as
amended would continue to be as
stringent as, or more stringent than,
those of other listing markets.9
Consequently, the Exchange does not
believe that the proposed amendments
raise any novel regulatory issues or give
rise to any investor protection concerns.
Section 103.00 contains the following
text:
Domestic listing requirements call for
minimum distribution of a company’s
shares within the United States, or in
the case of North American companies,
within North America. This is a major
obstacle for many large non-U.S.
companies which otherwise fulfill many
times over the normal size and earnings
requirements for listing on the
Exchange. The principal Alternate
Listing Standards focus on worldwide
rather than U.S. or North American
distribution of a non-U.S. company’s
shares.
As the foregoing would no longer be
accurate after adoption of the proposed
amendments, the Exchange proposes to
delete this text in its entirety.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) 10 of the Securities
Exchange Act of 1934 (the ‘‘Act’’) 11 in
general, and furthers the objectives of
Section 6(b)(5) of the Act,12 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
amendments are consistent with the
protection of investors and the public
interest because the Exchange’s holders
and trading volume requirements exist
to ensure that there will be a liquid
trading market in a listing applicant’s
stock and the factors the Exchange will
consider in exercising its discretion to
include in its calculations shareholders
and trading volume from the company’s
home country market or primary trading
market will enable the Exchange to
exercise this discretion only in cases
where the Exchange is comfortable that
a liquid trading market will develop on
9 See
note 8 supra.
U.S.C. 78f(b).
11 15 U.S.C. 78a.
12 15 U.S.C. 78f(b)(5).
10 15
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Federal Register / Vol. 77, No. 206 / Wednesday, October 24, 2012 / Notices
the NYSE after listing. In that regard, the
Exchange notes that the proposed
amendment is consistent with the
concern underlying its distribution
standards that there should be a liquid
trading market for NYSE listed
securities, as it has been its experience
that where there is a liquid market for
a company’s securities in its home
country or primary trading market and
where it is relatively easy to transfer
securities between the home country or
primary trading market and the United
States, a liquid trading market can
develop quickly on the Exchange even
if there are relatively few U.S. holders
at the time of original listing.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 13 and Rule 19b–4(f)(6) 14
thereunder because the proposal does
not: (i) Significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) by its
terms, become operative for 30 days
from the date on which it was filed.15
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend 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.16
13 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
15 In addition, Rule 19b–4(f)(6)(iii) requires the
Exchange to give the Commission written notice of
the Exchange’s 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 filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
16 15 U.S.C. 78s(b)(3)(C).
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14 17
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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 email to rulecomments@sec.gov. Please include File
Number SR–NYSE–2012–52 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NYSE–2012–52. This file
number should be included on the
subject line if email 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 Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 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
available publicly. All submissions
should refer to File Number SR–NYSE–
2012–52 and should be submitted on or
before November 14, 2012.
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–26143 Filed 10–23–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68066; File No. SR–
NYSEMKT–2012–52]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending Rule 17—
Equities To Add a New Paragraph
(c)(3) Addressing the Authority of the
Exchange or Archipelago Securities
LLC To Cancel Orders When a
Technical or Systems Issue Occurs
and To Describe the Operation of an
Error Account for Arca Securities
October 18, 2012.
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 October
10, 2012, NYSE MKT LLC (the
‘‘Exchange’’ or ‘‘NYSE MKT’’) 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 self-regulatory
organization. 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
Rule 17—Equities by adding a new
paragraph (c)(3) that addresses the
authority of the Exchange or
Archipelago Securities LLC (‘‘Arca
Securities’’) to cancel orders when a
technical or systems issue occurs and to
describe the operation of an error
account for Arca Securities. The text of
the proposed rule change is available on
the Exchange’s Web site at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
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]]>Agencies
[Federal Register Volume 77, Number 206 (Wednesday, October 24, 2012)]
[Notices]
[Pages 65028-65030]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-26143]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68065; File No. SR-NYSE-2012-52]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Amending Sections 102.01 and 103.00 of the Exchange's Listed Company
Manual To Permit the Consideration of Stockholders and Trading Volume
in the Company's Home Country Market or Primary Trading Market Outside
the United States, Provided Such Market is a Regulated Stock Exchange,
When Determining the Qualification for Initial Listing Under Section
102.01 of a Company From Outside North America
October 18, 2012.
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 October 5, 2012, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 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 amend Sections 102.01 and 103.00 of the
Exchange's Listed Company Manual (the ``Manual'') to permit the
consideration of stockholders and trading volume in the company's home
country market or primary trading market outside the United States,
provided such market is a regulated stock exchange, when determining
the qualification for initial listing under Section 102.01 of a company
from outside North America. The text of the proposed rule change is
available on the Exchange's Web site at www.nyse.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Sections 102.01 and 103.00 of the
Manual to permit the consideration of stockholders and trading volume
in the company's home country market or primary trading market outside
the United States, provided such market is a regulated stock exchange,
when determining the qualification for initial listing under Section
102.01 of a company from outside North America.
Section 102.01A of the Manual sets forth the Exchange's minimum
initial listing requirements with respect to distribution for companies
seeking to list under the Exchange's ``domestic'' initial listing
standards.\4\ A note included in Section 102.01B provides that, when
considering a listing application from a company organized under the
laws of Canada, Mexico or the United States (``North America''), the
Exchange will include all North American holders and North American
trading volume in applying the minimum stockholder and trading volume
requirements of Section 102.01A. By comparison, Section 103.00
specifies that, when a company from outside North America seeks to list
under the domestic criteria in Section 102.01B, the Exchange will
consider only stockholders and trading volume in the United States.
---------------------------------------------------------------------------
\4\ While Section 102.01 makes reference to ``domestic''
companies, Section 103.00 specifies that non-U.S. companies can
qualify for listing under either the ``domestic'' standards set
forth in Section 102.01 or the Alternate Listing Standards for
foreign companies set forth in Section 103.
---------------------------------------------------------------------------
The Exchange proposes to amend Sections 102.01B and 103.00 to
provide that, in connection with the listing of any issuer from outside
North America, the Exchange will have the discretion, but will not be
required, to consider holders and trading volume in the company's home
country market or primary trading market outside the United States in
determining whether a company is qualified for listing under Section
102.01, provided such market is a regulated stock exchange.\5\ The
proposed amended rule text specifies that, in exercising this
discretion, the Exchange would consider all relevant factors including:
(i) Whether the information was derived from a reliable source,
preferably either a regulated securities market or a transfer agent
that was subject to governmental regulation; (ii) whether there existed
efficient
[[Page 65029]]
mechanisms for the transfer of securities between the company's non-
U.S. trading market and the United States; and (iii) the number of
shareholders and the extent of trading in the company's securities in
the United States prior to the listing.
---------------------------------------------------------------------------
\5\ Consistent with the existing text of Section 102.01B, in the
case of a security that would list as an American Depositary Receipt
(``ADR''), the Exchange would adjust share data so that the
company's shareholders and trading volume would be analyzed on an
ADR-equivalent basis. For example, assume that a Mexican company has
ADRs trading in the United States and ordinary shares trading in
Mexico, with each ADR representing 10 ordinary shares. If the
company were to apply to list its U.S.-traded ADRs on the NYSE, the
Exchange would divide the Mexican share volume by 10 in determining
whether the combined ADR/share volume meets the requirements of the
listing criteria. For Companies that have multiple series of shares
or ADR's the Exchange will include the volume only in the specific
ordinary shares and overlying ADRs that would be listed on the
exchange.
---------------------------------------------------------------------------
The Exchange notes that it has been its experience that where there
is a liquid market for a company's securities in its home country or
primary trading market and where it is relatively easy to transfer
securities between the home country or primary trading market and the
United States, a liquid trading market can develop quickly on the
Exchange even if there are relatively few U.S. holders at the time of
original listing. Brazil is an example of a country whose companies
sometimes list on the Exchange without a concurrent U.S. initial public
offering and where a liquid trading market quickly develops in the
United States.
Currently, the only option for listing qualification available to a
company from outside North America which is unable to comply with the
U.S.-only distribution requirements of Section 102.01B \6\ [sic] is to
qualify under the Alternate Listing Standards for foreign companies set
forth in Section 103. The Alternate Listing Standards were adopted at a
time when the listing of foreign companies on U.S. exchanges was still
relatively uncommon. At that time, the Exchange's domestic listing
standards required applicants to have 2,000 round lot holders in the
United States, or, in the case of North American companies, within
North America. As stated in Section 103.00, the Exchange recognized
that the domestic distribution requirements then in effect were ``a
major obstacle for many large non-U.S. companies which otherwise
fulfill many times over the normal size and earnings requirements for
listing on the Exchange.'' As the Alternate Listing Standards were
designed for the listing of large foreign companies with a large
shareholder base and an exchange listing in their home country, the
5,000 worldwide round lot holder requirement of Section 103.01 was not
unduly burdensome. However, since the adoption of the Alternate Listing
Standards there have been two significant changes. First, the NYSE
amended its distribution standards in Section 102.01B \7\ [sic] so that
companies listing under the domestic standards typically now list on
the basis of a 400 round lot holder requirement. Consequently, the
disparity between the 5,000 round lot holder requirement of the
Alternate Listing Standards and the current domestic distribution
requirements is far greater than when the Alternate Listing Standards
were initially adopted. Second, many of the foreign companies which now
apply to list are significantly smaller than the large foreign
companies for which the Alternate Listing Standards were designed.
Consequently, the significant disparity between the domestic and
international shareholder requirements is further highlighted by the
fact that many of the smaller foreign companies now seeking to list on
the Exchange have far fewer shareholders than was typical for the large
companies for which the international distribution requirements were
designed.
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\6\ The Commission notes that Section 102.01A of the Exchange's
Listed Company Manual contains the distribution requirements.
\7\ See id.
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In addition to the difficulty many foreign listing applicants
experience in meeting the distribution requirements under the Alternate
Listing Standards, it has also been the Exchange's experience in recent
years that many foreign companies that apply to list on the NYSE are
able to meet the financial requirements to list under one or more of
the domestic listing standards, but are not large enough to meet the
market capitalization and financial requirements of the Alternate
Listing Standards. The proposed amendments address this anomaly, as
they would permit the listing of foreign companies which meet one of
the domestic financial listing standards and which, while they would
not meet any of the domestic distribution standards based solely on
shareholders or trading volume in the United States, would be able to
meet those requirements on the basis of their aggregate shareholder
base and trading volume in both the United States and the company's
home country market or primary trading market outside the United
States, provided such market is a regulated stock exchange.
The Exchange notes that the Nasdaq Global Market requires
applicants for initial listing to have 400 round lot holders, but do
not specify that this requirement can only be met on the basis of
holders in the United States.\8\ Consequently, the Nasdaq Global Market
has the discretion to qualify companies on the basis of their worldwide
holders. The Exchange also notes that its distribution standards as
amended would continue to be as stringent as, or more stringent than,
those of other listing markets.\9\ Consequently, the Exchange does not
believe that the proposed amendments raise any novel regulatory issues
or give rise to any investor protection concerns.
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\8\ See Nasdaq Marketplace Rule 5405(a). The Exchange also notes
that Nasdaq Marketplace Rule 5215(b) provides that, when listing an
ADR, the underlying security will be considered when determining
annual income from continuing operations, publicly held shares,
market value of publicly held shares, stockholders' equity, round
lot or public holders, operating history, market value of listed
securities, and total assets and total revenue.
\9\ See note 8 supra.
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Section 103.00 contains the following text:
Domestic listing requirements call for minimum distribution of a
company's shares within the United States, or in the case of North
American companies, within North America. This is a major obstacle for
many large non-U.S. companies which otherwise fulfill many times over
the normal size and earnings requirements for listing on the Exchange.
The principal Alternate Listing Standards focus on worldwide rather
than U.S. or North American distribution of a non-U.S. company's
shares.
As the foregoing would no longer be accurate after adoption of the
proposed amendments, the Exchange proposes to delete this text in its
entirety.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) \10\ of the Securities Exchange Act of 1934 (the
``Act'') \11\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\12\ 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 amendments are consistent with the protection of investors
and the public interest because the Exchange's holders and trading
volume requirements exist to ensure that there will be a liquid trading
market in a listing applicant's stock and the factors the Exchange will
consider in exercising its discretion to include in its calculations
shareholders and trading volume from the company's home country market
or primary trading market will enable the Exchange to exercise this
discretion only in cases where the Exchange is comfortable that a
liquid trading market will develop on
[[Page 65030]]
the NYSE after listing. In that regard, the Exchange notes that the
proposed amendment is consistent with the concern underlying its
distribution standards that there should be a liquid trading market for
NYSE listed securities, as it has been its experience that where there
is a liquid market for a company's securities in its home country or
primary trading market and where it is relatively easy to transfer
securities between the home country or primary trading market and the
United States, a liquid trading market can develop quickly on the
Exchange even if there are relatively few U.S. holders at the time of
original listing.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78a.
\12\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \13\ and Rule 19b-4(f)(6) \14\ thereunder
because the proposal does not: (i) Significantly affect the protection
of investors or the public interest; (ii) impose any significant burden
on competition; and (iii) by its terms, become operative for 30 days
from the date on which it was filed.\15\
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6).
\15\ In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to
give the Commission written notice of the Exchange's 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 filing of the proposed rule change, or such shorter time as
designated by the Commission. The Exchange has satisfied this
requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend 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.\16\
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\16\ 15 U.S.C. 78s(b)(3)(C).
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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 email to rule-comments@sec.gov. Please include
File Number SR-NYSE-2012-52 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2012-52. This file
number should be included on the subject line if email 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 Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 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 available publicly. All
submissions should refer to File Number SR-NYSE-2012-52 and should be
submitted on or before November 14, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-26143 Filed 10-23-12; 8:45 am]
BILLING CODE 8011-01-P
