[Federal Register Volume 73, Number 135 (Monday, July 14, 2008)]
[Notices]
[Pages 40415-40416]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-15885]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58109; File No. SR-NYSEArca-2008-47]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change To Waive Retroactively as of June 24, 2008,
Certain Initial Listing Fees for Companies Transferring the Listing of
Their Securities From Any Other National Securities Exchange
July 7, 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 June 24, 2008, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been substantially prepared by the Exchange. The Commission is
publishing this notice to solicit comments on the proposal from
interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange, through its wholly-owned subsidiary NYSE Arca
Equities, Inc. (``NYSE Arca Equities''), proposes to waive initial
listing fees for companies transferring the listing of their equity
securities from any other national securities exchange. The proposed
fee waiver would be applied retroactively to any companies that apply
to list after the date of initial submission of this filing. The text
of the proposed rule change is available at the Exchange's principal
office, the Commission's Public Reference Room, and http://www.nyse.com.
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 IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to waive initial listing fees for companies
transferring the listing of their securities from any other national
securities exchange. The waiver will apply to all classes of
securities. The Exchange had previously waived initial listing fees in
these circumstances for all companies that transferred from the New
York Stock Exchange (``NYSE'') at any time or from Nasdaq Stock Market
(``Nasdaq'') or the American Stock Exchange prior to December 31, 2007,
or had applied to list prior to that date.\3\ The proposed amendment
brings the Exchange's fee policy in line with those of the NYSE and
Nasdaq,\4\ both of which currently provide fee waivers to companies
transferring from the other national securities exchanges. The proposed
fee waiver would be applied retroactively to any companies that apply
to list after the date of initial submission of this filing.
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\3\ See Securities Exchange Act Release No. 54007 (June 16,
2006), 71 FR 36155 (June 23, 2006) (SR-PCX-2006-16).
\4\ See Section 902.02 of the NYSE Listed Company Manual and
Nasdaq Marketplace Rule IM-4500-4.
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Issuers of securities that qualify for the proposed waiver of
initial listing fees will be subject to the same level of annual fees
and listing of additional shares fees as other NYSE Arca issuers. The
proposed rule change will not affect the Exchange's commitment of
resources to its regulatory oversight of the listing process or its
regulatory programs. Specifically, companies that benefit from the
waiver will be reviewed for compliance with the Exchange initial and
continued listing standards in the same manner as any other company
that applies to be listed on the Exchange. The Exchange will conduct a
full and independent review of each issuer's compliance with the
Exchange's initial listing standards.
The Exchange believes that the elimination of such fees in the case
of securities transferring from other national securities exchanges is
justified on several grounds. An issuer that already paid initial
listing fees to another national securities exchange when it became a
publicly traded company is reluctant to pay a second initial listing
fee to another listing venue, even if it concludes that the Exchange
offers the issuer and its investors superior services and market
quality. Even if an issuer concludes that the Exchange would provide a
superior market for its stock, the benefits of the transfer must
currently be weighed against the cost of initial inclusion. Since the
expected benefits of the transfer would be diffused among the issuers'
investors and realized over time, but the initial listing fees must be
paid by the issuer immediately, the Exchange is concerned that issuers
that stand to benefit may nevertheless opt to forgo a transfer. As
such, the Exchange believes that assessing the initial fees against
issuers that have already paid fees to list on another market imposes a
burden on the competition between exchange markets and markets other
than exchange markets, a competition that the Exchange believes is one
of the central goals of the national market system. This concern is
particularly great in light of the fact that the Commission has
approved the waiver of initial listing fees by Nasdaq with respect to
the listing of any security being transferred from another national
securities exchange.\5\
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\5\ See Securities Exchange Act Release No. 51004 (January 10,
2005), 70 FR 2917 (January 18, 2005) (SR-NASD-2004-140).
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The Exchange understands that the effect of this proposed rule
change will be to impose a lower level of listing fees
[[Page 40416]]
on issuers that transfer from another national securities exchange than
on some other issuers. In light of the fact that the Exchange will
collect the same level of annual fees and listing of additional shares
fees from such issuers, however, the Exchange believes that the
difference does not constitute an inequitable allocation of fees. In
light of a transferring issuer's prior payment to another market and
the generally lower burdens associated with reviewing a transferring
issuer's eligibility, the Exchange believes that eliminating initial
fees for transferring issuers is entirely consistent with an equitable
allocation of listing fees. The Exchange will maintain a rigorous
regulatory review process with respect to the initial listing
qualification of listing applicants transferring from other markets.
The Exchange does not expect the financial impact of this proposed
rule change to be material, either in terms of increased levels of
annual fees from transferring issuers or in terms of diminished initial
listing fee revenues. Quite simply, even with the proposed rule change
in place, the Exchange understands that a change in listing venue is a
major step for an issuer, and therefore the Exchange does not expect
that the number of issuers that transfer to NYSE Arca in a given time
frame will be sufficient to have a material effect on financial
resources.
The Exchange will apply the proposed fee waiver retroactively as of
the date of initial submission of this rule filing. The Exchange
believes that this retroactive effect is necessary and justified
because Nasdaq currently operates such a waiver and the Exchange is
therefore at a competitive disadvantage vis-[agrave]-vis Nasdaq until
the Exchange has such a waiver in place. Giving the waiver retroactive
effect will therefore have the immediate effect of promoting
competition between the Exchange and Nasdaq and alleviating the
Exchange's current competitive disadvantage.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\6\ in general, and
furthers the objectives of Section 6(b)(5) of the Act,\7\ in
particular, in that it is designed to promote just and equitable
principles of trade, to 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. In light of a
transferring issuer's prior payment to another market, the Exchange
believes that the proposed fee waiver does not render the allocation of
its listing fees inequitable or unfairly discriminatory. The Exchange
believes that the fee waiver will increase competition among listing
markets and will remove a competitive disadvantage the Exchange
currently has vis-[agrave]-vis the other national securities exchanges,
and it is therefore designed to perfect the mechanism of a free and
open market.
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\6\ 15 U.S.C. 78f.
\7\ 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
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-NYSEArca-2008-47 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-2008-47. 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 (http://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 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-NYSEArca-2008-47 and should
be submitted on or before August 4, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-15885 Filed 7-11-08; 8:45 am]
BILLING CODE 8010-01-P