[Federal Register Volume 65, Number 243 (Monday, December 18, 2000)]
[Notices]
[Pages 79147-79148]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-32115]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43700; File No. SR-NYSE-00-48]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the New York Stock Exchange, 
Inc. To Reduce the Maximum Original Listing Fee and To Impose a New 
Allocation Fee on Exchange Specialists

December 11, 2000.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and rule 19b-4 \2\ thereunder, notice hereby is given 
that on November 29, 2000, the New York Stock Exchange, Inc. (``NYSE'' 
or ``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule chanve as described in items I, II, 
and III 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1)
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statements of the Terms of 
Substance of the Proposed Rule Change

    The NYSE proposes to reduce the maximum original listing fee 
applicable to companies listing on the Exchanged and to recapture the 
lost revenue through an allocation fee imposed on Exchange specialists. 
The proposed rule change is available at the principal office of the 
NYSE and at the Commission's Public Reference Room.\3\
---------------------------------------------------------------------------

    \3\ According to the NYSE, the proposed specialist allocation 
fee would not appear in the NYSE's rules or price list. Therefore, 
with respect to this part of the filing, there is no proposed rule 
text as such. The NYSE will notify affected members of the new fee 
via an information circular. Telephone conversation between James F. 
Duffy, Senior Vice President and Associate General Counsel, NYSE, 
and Michael Gaw, Attorney-Adviser, Division of Market Regulation, 
Commission, on December 11, 2000.
---------------------------------------------------------------------------

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 NYSE included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received regarding the proposed rule change. 
The text of these statements may be examined at the places specified in 
Item IV below. The NYSE has prepared summaries set forth in Sections A, 
B, and C below, of the most significant aspects of such statements.

[[Page 79148]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose.
    Original listing fees are levied on the number of shares issued and 
outstanding at the time of listing plus a one time special charge of 
$36,800 for a newly listed company. Currently, the NYSE caps original 
listing fees at $500,000. To accommodate prospective listed companies 
with a lower maximum fee while continuing to maintain revenue at a 
level suitable to support the Exchange's programs, the NYSE is 
proposing to reduce the original listing fee cap to $250,000.\4\
---------------------------------------------------------------------------

    \4\ The reduced maximum original listing fee will be reflected 
in an amendment to Sections 902.02 (domestic companies) and 902.04 
(non-U.S. companies) of the NYSE Listed Company Manual.
---------------------------------------------------------------------------

    The reduction in listing fee revenues resulting from reduction of 
the maximum listing fee will be offset in total by implementation of a 
new Specialist Allocation Fee. Newly listed companies are allocated to 
a specialist unit through the Exchange's allocation process. 
Specialists apply for the allocation of new listings, and, upon 
listing, companies have the choice of one of two options for allocation 
of their security. The first option is to authorize the Exchange's 
Allocation Committees to determine who will be the company's 
specialist. Under the second option, the Allocation Committee selects a 
pool of between three to five specialists from those who have applied, 
and the listing company then interviews each of the candidates to 
determine who will be its specialist.
    The new Specialist Allocation Fee will be levied on the specialist 
unit that has been selected, under either option one or option two, to 
be the specialist for the new listing. The fee will be equal to the 
difference between the original listing fee calculated under the new 
$250,000 cap and the fee that would have been applicable under a 
$500,000 cap. Accordingly, the Specialist Allocation Fee itself will be 
a maximum of $250,000. The following examples demonstrate how this fee 
will be applied in different circumstances:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Company A:
  Shares Outstanding.....................  100 million
  Calculated Fee Based on Per Share Rate.  $417,100
  Listed Company Original Fee (Capped)...  $250,000
  Specialized Allocation Fee.............  $167,100
Company B:
  Shares Outstanding.....................  50 million
  Calculated Fee Based on Per Share Rate.  $242,100
  Listed Company Original Fee (Capped)...  $242,000
  Specialized Allocation Fee.............  $0
Company C:
  Shares Outstanding.....................  130 million
  Calculated Fee Based on Per Share Rate.  $522,100
  Listed Company Original Fee (Capped)...  $250,000
  Specialized Allocation Fee.............  $250,100
------------------------------------------------------------------------

    Both the reduction in the listing fee cap and the new Specialist 
Allocation Fee will be implemented January 1, 2000.
2. Statutory Basis
    The NYSE believes that the basis under the Act for the proposed 
rule change is the requirement under Section 6(b)(4) \5\ that an 
exchange have rules that provide for the equitable allocation of 
reasonable dues, fees, and other charges among its members and issuers 
and other persons using its facilities.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement of Burden on Competition

    The NYSE does not believe that the proposed rule change would 
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 the Proposed Rule Change 
Rreceived From Members, Participants, or Others

    The NYSE has neither solicited nor received comments on 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 on filing pursuant 
to Section 19(b)(3)(A) of the Act \6\ and subparagraph (f)(6) of Rule 
19b-4 under the Act.\7\ Pursuant thereto the rule change may become 
operative 30 days after November 29, 2000, the date of filing. At any 
time within 60 days of filing, the Commission may summarily abrogate 
such rule change if it appears to the Commission that such action is 
necessary or appropriate in the public interest, for the protection of 
investors, or otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 19b-4(f)(6).
---------------------------------------------------------------------------

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. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington DC 20549-0609. 
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 at the 
Commission's Public Reference Room. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
Exchange. All submissions should refer to File No. SR-NYSE-00-48 and 
should be submitted by January 8, 2001.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12)

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-32115 Filed 12-15-00; 8:45 am]
BILLING CODE 8010-01-M