[Federal Register Volume 67, Number 109 (Thursday, June 6, 2002)]
[Notices]
[Pages 39089-39090]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-14204]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45995; File No. SR-NYSE-2002-20]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of a Proposed Rule Change by the New York 
Stock Exchange, Inc. Relating to the Initial Listing Fees for an 
Additional Class of Common Stock

May 29, 2002.
    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 May 24, 2002, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change 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, and to approve the 
proposed rule change on an accelerated basis.
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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 proposes to amend Section 902.02 of the NYSE Listed 
Company Manual (``LCM'') to provide that, at the time an issuer lists 
an additional class of common stock on the NYSE, the listed company 
will be charged a fixed initial listing fee of $5,000 for that class 
instead of the per-share initial listing fee under the current original 
listing fee schedule. Presently, Section 902.02 of the LCM provides 
that only tracking stocks of a listed company are charged a flat 
initial listing fee of $5,000.

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. The 
text of these statements may be examined at the places specified in 
Item III 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 amend Section 902.02 of the LCM to provide 
that when an issuer lists an additional class of common stock, it will 
be charged a flat initial listing fee of $5,000 for the additional 
class in lieu of the per-share fee schedule. Currently, Section 902.02 
of the LCM specifies that only tracking stocks of a listed company are 
charged a flat initial listing fee of $5,000.
    In 2000, in response to listed companies' desires to utilize 
tracking stocks to achieve strategic and financial goals, the Exchange 
adopted the $5,000 flat initial listing fee for tracking stocks.\3\ 
Since adopting this flat fee for the initial listing of tracking 
stocks, the Exchange has noted that, from time to time, its listed 
companies issue additional classes of common stock other than tracking 
stocks. Because a tracking stock is itself an additional class of 
common stock, the Exchange has found it difficult to justify a material 
distinction in the initial listing fees between tracking stocks and 
other kinds of additional classes of common stock. In the Exchange's 
view, additional classes of common stock should be entitled to benefit 
from the same flat $5,000 initial listing fee as is applicable to 
tracking stocks. The Exchange therefore believes that by broadening 
Section 902.02 of the LCM to apply to any additional class of common 
stock of a listed company, the Exchange will be in a position to be 
more competitive and responsive to alternate capitalization structures, 
including tracking stocks and other additional classes of common stock.
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    \3\ See Securities Exchange Act Release No. 43164 (August 16, 
2000), 65 FR 51387 (August 23, 2000) (SR-NYSE-00-15) (noting that 
tracking stocks are categories of common stocks of an issuer that 
are intended to track the value of a portion of the issuer's 
business).
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    The Exchange would like to clarify that the flat fee applies only 
when the additional class of common stock is first listed on the NYSE. 
The Exchange believes that the proposal is consistent with the 
treatment that has been afforded to tracking stocks, which are assessed 
fees under the regular fee schedules for both continuing annual fees 
and for the initial fees chargeable when issuing additional shares of 
an already listed class of stock.
2. Statutory Basis
    The Exchange believes that this proposed rule change is consistent 
with Section 6(b)(5) of the Act,\4\ which provides that an exchange 
have rules that are designed to prevent fraudulent and manipulative 
acts and practices, to promote just and equitable principles of trade, 
to remove impediments to, and perfect the mechanism of a free and open 
market and, in general, to protect investors and the public interest.
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    \4\ 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

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

III. 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

[[Page 39090]]

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. Copies of such filing will also be available for 
inspection and copying at the principal office of the NYSE. All 
submissions should refer to the File No. SR-NYSE-2002-20 and should be 
submitted by June 27, 2002.

IV. Commission's Finding and Order Granting Accelerated Approval of a 
Proposed Rule Change

    The Commission finds that the proposed rule change is consistent 
with the requirements of Sections 6 of the Act \5\ and the rules and 
regulations thereunder applicable to a national securities exchange. 
Specifically, the Commission believes that the proposal is consistent 
with Section 6(b)(4) of the Act,\6\ because it provides for the 
equitable allocation of reasonable dues, fees and other charges among 
its members and other persons using its facilities.\7\
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    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(4).
    \7\ In approving this proposal, the Commission has considered 
its impact on efficiency, competition, and capital formation. 15 
U.S.C. 78c(f).
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    The Commission finds that the NYSE's proposed flat fee of $5,000 to 
issuers for an additional class of common stock is reasonable and 
equitable in that it allows other classes of common stock, in addition 
to tracking stocks, to benefit from a fixed initial listing fee in lieu 
of a per-share initial fee schedule. The Commission also believes that 
the proposal is consistent with the treatment that has been afforded to 
tracking stocks, a type of additional class of common stock, and should 
help the Exchange to be more competitive and responsive to alternate 
capitalization structures of its listed companies.
    The NYSE has requested that the Commission find good cause for 
approving the proposed rule change prior to the thirtieth day after the 
date of publication of notice in the Federal Register to enable its 
listed companies engaged in transactions to benefit from the broadened 
flat fee for the listing of an additional class of common stock as 
quickly as possible. The Commission agrees that the approval of this 
request would enable issuers to promptly benefit from the proposed rule 
change. As noted above, the Commission has previously approved an 
initial flat fee of $5,000 for tracking stocks, a class of common 
stock, and therefore finds this proposal substantially similar, and 
consistent with the prior NYSE filing.\8\ Accordingly, the Commission 
finds good cause for approving the proposed rule change prior to the 
thirtieth day after the date of publication of notice in the Federal 
Register.
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    \8\ See note 3, supra.
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\9\ that the proposed rule change (SR-NYSE-2002-20) is hereby 
approved on an accelerated basis.
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    \9\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-14204 Filed 6-5-02; 8:45 am]
BILLING CODE 8010-01-U