[Federal Register Volume 77, Number 181 (Tuesday, September 18, 2012)]
[Notices]
[Pages 57625-57627]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-22963]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67846; File No. SR-NYSE-2012-44]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change Amending Section 907.00 of the 
Listed Company Manual, Which Describes Certain Complimentary Products 
and Services that are Offered to Certain Issuers

September 12, 2012.

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on August 30, 2012, New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') filed 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 Exchange. 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\ 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 907.00 of the Listed Company 
Manual (the ``Manual''), which describes certain complimentary products 
and services that are offered to certain issuers. 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 Section 907.00 of the Manual, which 
describes certain complimentary products and services that are offered 
to certain issuers.
Background
    Section 907.00 of the Manual sets forth certain complimentary 
products and services that are offered to certain currently and newly 
listed issuers. These products and services are developed or delivered 
by NYSE or by a third party for use by NYSE-listed companies. Some of 
these products are commercially available from such third-party 
vendors. All listed issuers receive some complimentary products and 
services through the NYSE Market Access Center. Certain tiers of 
currently listed issuers and newly listed issuers receive additional 
products and services.
Expand Definition of Newly Listed Issuer
    Under Section 907.00, a newly listed issuer is defined as a U.S. 
issuer conducting an initial public offering (``IPO'') or an issuer 
emerging from a bankruptcy, spinoff (where a company lists new shares 
in the absence of a public offering), or carve-out (where a company 
carves out a business line or division, which then conducts a separate 
IPO), but does not include an issuer that transfers its listing from 
another U.S. exchange.\3\
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    \3\ See Securities Exchange Act Release No. 65127 (Aug. 12, 
2011), 76 FR 51449, 51450 n. 13 (Aug. 18, 2011) (SR-NYSE-2011-20).
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    The Exchange proposes to broaden the definition of newly listed 
issuer to mean any U.S. company listing common stock on the Exchange 
for the first time, and any non-U.S. company \4\ listing an equity 
security \5\ on the Exchange under Section 102.01 or 103.00 of the 
Manual for the first time, regardless of whether such U.S. or non-U.S. 
company conducts an offering; the definition would continue to exclude 
any issuer that transfers its listing from another U.S. securities 
exchange.\6\ Under the proposed rule change, the definition of ``newly 
listed issuer'' also would mean any U.S. or non-U.S. company emerging 
from a bankruptcy, spinoff (where a company lists new shares in the 
absence of a public offering), and carve-out (where a company carves 
out a business line or division, which then conducts a separate initial 
public offering).
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    \4\ For purposes of the Manual, the terms ``Foreign Private 
Issuer'' and ``non-U.S. company'' have the same meaning and are 
defined in accordance with the Commission's definition of foreign 
private issuer set out in Rule 3b-4(c) of the Securities Exchange 
Act of 1934, as amended (the ``Act''). See Section 103.00 of the 
Manual. Strictly for ease of reference and to use a less technical 
term, the Exchange proposes to amend the text of Section 907.00 to 
refer to ``non-U.S. companies'' rather than ``Foreign Private 
Issuers.'' This aspect of the proposed rule change does not result 
in any substantive change in the entities eligible under Section 
907.00.
    \5\ In some instances, a non-U.S. company may not list its 
common stock on the Exchange; rather, such company may have its 
common stock listed on a foreign market and list some other type of 
security on the Exchange, such as American Depository Receipts 
(``ADRs''). Thus, to qualify for the products and services under 
Section 907.00, the Exchange would require the non-U.S. company to 
list an ``equity security'' on the Exchange, which would be defined 
to mean common stock or common share equivalents such as ordinary 
shares, New York shares (a type of share used by Canadian 
companies), global shares, ADRs, or Global Depository Receipts. Each 
of these types of shares has been used by non-U.S. companies when 
listing on the Exchange. The definition of ``equity security'' would 
be added to Section 907.00. The Exchange proposes to make conforming 
amendments throughout Section 907.00 to change specific references 
to ADRs to the broader term ``equity security.''
    \6\ The current text of Section 907.00 states that the 
definition of ``newly listed issuer'' excludes an issuer that 
transfers its listing from another exchange. In a prior filing, the 
Exchange's stated that the exclusion applied to transfers from a 
national securities exchange, i.e., another U.S. securities 
exchange. See supra note 3. For greater clarity, the text of the 
Section 907.00 would be amended to provide specifically that a 
transfer from a U.S. securities exchange would be excluded from the 
definition of newly listed issuers. The Exchange does not believe 
that such issuers need the services offered to newly listed issuers 
because they already have been trading in U.S. capital markets. 
Rather, issuers that transfer from another U.S. exchange may qualify 
for the products and services offered to currently listed issuers 
under Section 907.00.
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Changes to Tier One and Tier Two for Currently Listed Issuers
    Currently, the Exchange has two tiers of products and services that 
are available to currently listed issuers. Under Tier One, the Exchange 
offers market surveillance and Web-hosting products and services to 
U.S. issuers that have 270 million or more total shares of common stock 
issued and outstanding in all share classes, including and in addition 
to Treasury shares, and Foreign Private Issuers that have 270 million 
or more in ADRs issued and outstanding, each calculated annually as of 
December 31 of the preceding year. Under Tier Two, at each such 
issuer's election, the Exchange offers either market analytics or Web-
hosting products and services to U.S. issuers that have 160 million to 
269,999,999 total shares of common stock issued and outstanding in all 
share classes, including and in addition

[[Page 57626]]

to Treasury shares. Tier Two products and services also are offered to 
Foreign Private Issuers that have 160 million to 269,999,999 in ADRs 
issued and outstanding, each calculated annually as of December 31 of 
the preceding year.
    The Exchange has determined that using December 31 as the date of 
qualification is not optimal because it provides issuers with too 
little notice of their qualification for Tier One or Tier Two. The 
Exchange has determined that it would be preferable to determine 
issuers' qualifications as of September 30 of the preceding year. Thus, 
for example, shortly after September 30, 2012, the Exchange would run 
the calculations for each issuer and determine which are eligible for 
Tier One or Tier Two for calendar year 2013, and so notify the 
qualifying issuers.\7\ Qualifying issuers then would have nearly three 
months to select from the available services in their tier for the 
following calendar year, and non-qualifying issuers would have 
additional time to budget and plan for obtaining the services elsewhere 
should they so wish. The Exchange also proposes that for non-U.S. 
companies, the measurement of shares of an equity security would mean 
shares issued and outstanding in the U.S.
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    \7\ The Exchange notes that the proposed rule change may not be 
in effect prior to September 30, 2012; however, the Exchange 
believes that there will be sufficient time following approval of 
the proposed rule change to notify qualifying issuers.
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    With respect to Tier One offerings, the Exchange proposes to permit 
a Tier One issuer to choose market analytics products and services as 
an alternative to market surveillance products and services. Some 
issuers would prefer to receive the former. Web-hosting products and 
services would continue to be offered to Tier One issuers.
Change to Tier A Offering
    Tiers A and B describe the products and services available to newly 
listed issuers. Tier A includes issuers with a global market value of 
$400 million or more based on the public offering price. Tier B 
includes issuers with a global market value of less than $400 million 
based on the public offering price.
    With one exception, the specified products and services for newly 
listed issuers are offered for 24 months after listing, at which time 
the issuers may be eligible for the Tier One or Tier Two products and 
services offered to existing issuers. The exception is market 
surveillance products and services, which currently are offered to Tier 
A issuers for the initial 12 months after listing. Under the current 
Manual, those issuers would not be eligible to receive the market 
surveillance products and services for the next 12 months, until they 
qualified for Tier One status at the end of the 24-month period 
following listing. The Exchange proposes to eliminate that 12-month gap 
by amending Section 907.00 to provide that if, at the end of the 12-
month period following a new listing, an issuer that has selected 
market surveillance products and services meets the qualifications of a 
Tier One issuer, then such issuer may continue to receive such services 
for an additional 12 months. This amendment would assure that there is 
no break in the offering of market surveillance products and services 
to otherwise qualified issuers.
    The Exchange also proposes to amend the text that refers to global 
market value based on public offering price. As noted above, some 
listed companies may not conduct a public offering in connection with 
listing. For example, non-U.S. companies that are already listed on a 
foreign exchange may not conduct a public offering in connection with 
listing in the U.S. markets for the first time on the Exchange. The 
Exchange proposes to add text to Section 907.00 that would provide that 
if a newly listed issuer does not conduct a public offering, then its 
global market value will be determined by the Exchange at the time of 
listing for purposes of determining whether the issuer qualifies for 
Tier A or B.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\8\ in general, and Section 
6(b)(4) of the Act,\9\ in particular, in that it is designed to provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members and issuers and other persons using its 
facilities. The Exchange also believes that the proposed rule change is 
consistent with Section 6(b)(5) of the Act \10\ in that it is not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4).
    \10\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that it is reasonable to offer complimentary 
products and services to attract new listings, retain currently listed 
issuers, and respond to competitive pressures. The Exchange faces 
competition in the market for listing services, and it competes in part 
by improving the quality of the services that it offers to listed 
companies. By offering products and services on a complimentary basis 
and ensuring that it is offering the services most valued by its listed 
issuers, NYSE will improve the quality of the services that listed 
companies receive.
    With respect to the change to the definition of newly listed 
issuer, the Exchange believes that a non-U.S. company that is listing 
an equity security for the first time on the Exchange, or is emerging 
from a bankruptcy, spinoff, or carve-out, is similarly situated to a 
U.S. issuer conducting an IPO or emerging from a bankruptcy, spinoff, 
or carve-out, and should be eligible to receive the same products and 
services from the NYSE Market Access Center as those U.S. issuers do. 
The proposed rule change would result in a more reasonable and 
equitable allocation of the listing benefits received in return for a 
non-U.S. company's listing fees \11\ and would not be unfairly 
discriminatory because all similarly situated non-U.S. companies that 
list an equity security on the Exchange as described above would be 
eligible (other than transfers from another U.S. securities exchange). 
The Exchange also believes that amending the text of Section 907.00 to 
refer to listing on the Exchange for the first time, rather than the 
specific offerings that may occur in conjunction with the listing would 
make the coverage of the Section sufficiently broad to account for 
different types of offerings that may occur in connection with a new 
listing. The Exchange believes that defining the term ``equity 
security,'' would make the coverage of the Section sufficiently broad 
to account for different types of securities. The Exchange believes 
that the text of Section 907.00 would be more transparent if it is 
[sic] specifically referenced the exclusion of issuers transferring 
from another U.S. securities exchange, as had been noted in a prior 
filing.\12\
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    \11\ Listing fees for non-U.S. companies are set forth in 
Section 902.03 of the Manual.
    \12\ See supra note 3.
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    With respect to the changes to Tier One, the Exchange believes that 
it is reasonable, equitable, and not unfairly discriminatory to allow 
issuers that qualify under this tier to choose whether they receive 
market surveillance or market analytics products and services.
    With respect to changing the qualification date from December 31 to 
September 30 of the preceding year, the Exchange believes that it is 
reasonable, equitable, and not unfairly discriminatory to provide 
issuers with greater advance notice of their qualification (or non-
qualification) for

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Tier One and Tier Two services, providing such issuers with additional 
time to plan and budget accordingly. The Exchange also believes that 
stating in the text of Section 907.00 that (i) the measurement of 
shares of an equity security for non-U.S. companies is limited to 
shares issued and outstanding in the U.S., and (ii) the Exchange will 
determine global market value for newly listed issuers that do not 
conduct a public offering in connection with the listing would provide 
greater clarity in the Exchange's rules, and as such is reasonable.
    With respect to the change to Tier A, the Exchange believes that it 
is reasonable, equitable, and not unfairly discriminatory to offer 
market surveillance products and services throughout the 24-month 
period following listing, rather than just the initial 12 months, in 
order to eliminate the interruption in service that would otherwise 
occur for issuers that would qualify for Tier One status as existing 
issuers at the end of the 24-month period.
    The Exchange further notes that the proposed rule change is 
equitable and not unfairly discriminatory because the criteria for 
satisfying the tiers are the same for all similarly situated issuers. 
Issuers are not forced or required to utilize the complimentary 
products and services as a condition of listing. All issuers will 
continue to receive some level of free services.

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

    Within 45 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 or disapprove 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 email to [email protected]. Please include 
File Number SR-NYSE-2012-44 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-2012-44. 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 (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, 100 F Street 
NE., Washington, DC 20549-1090, on official business days between 10 
a.m. and 3 p.m.. Copies of the filing will also be available for 
inspection and copying at the NYSE's principal office and on its 
Internet Web site at www.nyse.com. 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-2012-44 and should be submitted on or before 
October 9, 2012.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-22963 Filed 9-17-12; 8:45 am]
BILLING CODE 8011-01-P