[Federal Register Volume 75, Number 48 (Friday, March 12, 2010)]
[Notices]
[Pages 11970-11972]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-5299]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61657; File No. SR-NYSE-2010-15]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by New York Stock Exchange LLC Making Permanent the Exchange's
Pilot Program With Respect to Its Continued Listing Standards
March 5, 2010.
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 February 26, 2010, New York Stock Exchange LLC (``NYSE''
or the ``Exchange'') filed
[[Page 11971]]
with the Securities and Exchange Commission (the ``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the self-regulatory organization. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C.78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 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 proposes to make permanent an amendment to the
continued listing requirements in Section 802.01B of the Exchange's
Listed Company Manual (the ``Manual'') that is currently in effect on a
pilot program basis (the ``Pilot Program''). The text of the proposed
rule change is available at the Exchange, 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 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
Prior to the adoption of the Pilot Program,\4\ Section 802.01B(I)
of the Manual provided that any company that qualified to list under
the Earnings Test set out in Section 102.01C(I) or in Section
103.01B(I) (in the case of foreign private issuers) or pursuant to the
requirements set forth under the Assets and Equity Test set forth in
Section 102.01C(IV) or the ``Initial Listing Standard for Companies
Transferring from NYSE Arca'' (the ``NYSE Arca Transfer Standard'') set
forth in Section 102.01(C)(V) (the NYSE Arca Transfer Standard expired
by its terms on August 31, 2009) was considered to be below compliance
standards if such company's average global market capitalization over a
consecutive 30 trading-day period was less than $75 million and, at the
same time, total stockholders' equity was less than $75 million. Under
the Pilot Program, companies that listed under the initial listing
standards set forth in the immediately preceding sentence are
considered to be below compliance standards if average global market
capitalization over a consecutive 30 trading-day period is less than
$50 million and, at the same time, total stockholders' equity is less
than $50 million. The Pilot Program originally expired by its terms on
October 31, 2009, but the Exchange extended its application for an
additional five months, until February 28, 2010.\5\ NYSE has filed an
immediately effective proposed rule change to extend for a further four
months, until June 30, 2010.\6\ The Exchange now proposes to make the
Pilot Program permanent.
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\4\ See Securities Exchange Act Release No. 59996 (May 28,
2009), 74 FR 26912 (June 4, 2009) (SR-NYSE-2009-48) (the ``Pilot
Program Notice'').
\5\ See Securities Exchange Act Release No. 60911 (November 2,
2009), 74 FR 57730 (November 9, 2010) (SR-NYSE-2009-109).
\6\ See SR-NYSE-2010- . [sic] The Commission notes that this
proposal was noticed for comment in Securities Exchange Act Release
No. 61609 (March 1, 2010) (SR-NYSE-2010-13).
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For companies listed under the Earnings Test, the Pilot Program
returned continued listing requirements to those in place prior to the
adoption of the current requirements on June 9, 2005.\7\ Consequently,
prior to implementation of the Pilot Program, the Exchange had
considerable historical experience with the continued listing of
companies that had continued to trade on the Exchange with global
market capitalization and stockholders' equity each below $75 million
but greater than $50 million. In addition, the Exchange's experience
under the Pilot Program has been very positive, as only one of the
companies that was deemed back in compliance as a result of the
adoption of the Pilot Program has subsequently fallen below the
standard as amended by the Pilot Program as of the date of this filing
and only two additional companies have been newly identified as being
below the Pilot Program standard. Based on this experience, the
Exchange believes that companies that exceed the continued listing
standards as amended by the Pilot Program are suitable for continued
listing on the Exchange.
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\7\ See Securities Exchange Act Release No. 51813 (June 9,
2005), 70 FR 35484 (June 20, 2005) (SR-NYSE-2004-20). The Assets and
Equity Test set forth in Section 102.01C(IV) and the NYSE Arca
Transfer Standard set forth in Section 102.01C(V) were adopted
subsequent to this amendment.
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The Exchange believes that the continued listing standards as
amended by the Pilot Program are at least as stringent as those of any
other national securities exchange. Consequently, the Exchange believes
that the Pilot Program is consistent with the protection of investors
and the public interest and does not raise any novel regulatory issues.
In addition, the Exchange notes that the Commission stated in the Pilot
Program Notice \8\ that it believed that the continued listing
standards adopted under the Pilot Program met the requirements
established in Exchange Act Rule 3a51-1(a)(2)(ii) \9\ in that they were
reasonably related to the initial listing standards set forth in
paragraph (a)(20(i)[sic] of Exchange Act Rule 3a51-1 (the ``Penny Stock
Rule'').\10\
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\8\ See the Pilot Program Notice at Note 5. [sic]
\9\ 17 CFR 240.a51-1(a)(2)(ii). [sic]
\10\ 17 CFR 240.a51-1. [sic]
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) \11\ of the Act, 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,
and is not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers. The Exchange believes that the proposed
permanent adoption of the Pilot Program is consistent with the investor
protection objectives of the Act in that the continued listing
standards under the Pilot Program are set at a high enough level that
only companies that are suitable for continued listing on the Exchange
will exceed the standards.
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\11\ 15 U.S.C. 78f(b).
\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.
[[Page 11972]]
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve the proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the 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-NYSE-2010-15 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-2010-15. 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 Web site
viewing and printing in the Commission's Public Reference Section, on
official business days between the hours of 10 a.m. and 3 p.m. Copies
of the filing will also 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-2010-15 and should be submitted on or before April
2, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-5299 Filed 3-11-10; 8:45 am]
BILLING CODE 8011-01-P