[Federal Register Volume 73, Number 188 (Friday, September 26, 2008)]
[Notices]
[Pages 55888-55889]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-22655]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58598; File No. SR-NYSEArca-2008-78]
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving
Proposed Rule Change To Waive Annual Fees for Securities Transferring
to NYSE Arca From NYSE Alternext US
September 19, 2008.
I. Introduction
On July 23, 2008, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to
waive annual listing fees for securities transferring to NYSE Arca from
NYSE Alternext US after the closing of the purchase of the American
Stock Exchange LLC (``Amex'') by NYSE Euronext (the ``Merger'').\3\ The
proposed rule change was published in the Federal Register on August
11, 2008.\4\
[[Page 55889]]
The Commission received no comments on the proposal. This order
approves the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ NYSE Euronext, the ultimate parent company of the Exchange,
has agreed to acquire the Amex pursuant to an Agreement and Plan of
Merger, dated as of January 17, 2008. After the closing of the
Merger, the Amex will be renamed NYSE Alternext US LLC.
\4\ See Securities Exchange Act Release No. 58297 (August 4,
2008), 73 FR 46683.
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II. Description of the Proposal
The Exchange proposes that securities transferring to NYSE Arca
from NYSE Alternext US after the closing of the Merger will not be
charged any prorated annual fee for the remainder of the year in which
the Merger takes place. The fee waiver in the preceding sentence will
be of no further effect if the closing of the Merger does not take
place by March 31, 2009.
The Exchange believes this proposed fee waiver does not render the
allocation of its listing fees inequitable or unfairly discriminatory,
in particular because, after the Merger, NYSE Regulation, Inc. (``NYSE
Regulation'') will perform listed company regulation for both the
Exchange and NYSE Alternext US, including a substantial review of
companies upon original listing. The Exchange notes that many of the
regulatory staff who currently perform initial and continued listing
reviews at the Amex will become employees of NYSE Regulation at the
time of the Merger and will continue to perform the same duties with
respect to NYSE Alternext US securities after the Merger. The Exchange
represents that securities transferring from NYSE Alternext US will be
subjected to the same rigorous regulatory review as any other
securities with respect to which an application for listing is made to
the Exchange. However, the Exchange expects that, on average, the
review of securities transferring from NYSE Alternext US to the
Exchange will be less costly than the review of a transfer from an
unaffiliated market, as the Amex listing regulatory staff that will
have been absorbed by NYSE Regulation will already have performed a
substantial review of any NYSE Alternext US-listed issuer, and NYSE
Regulation will be able to rely on that prior work as a baseline in
qualifying the issuer for listing on the Exchange and in conducting
ongoing compliance activities with respect to any such issuer. In
support of its proposal, the Exchange also notes that transferring
issuers would have already paid annual continued listing fees to the
Amex for the calendar year in which the transfer took place.
III. Discussion
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange and, in
particular, the requirements of section 6(b) of the Act and the rules
and regulations thereunder. Specifically, the Commission finds that the
proposal is consistent with sections 6(b)(4) \5\ and 6(b)(5) of the
Act,\6\ which require that an exchange have rules that provide for the
equitable allocation of reasonable dues, fees, and other charges among
its members and other persons using its facilities, and are designed,
among other things, to promote just and equitable principles of trade,
to remove impediments to and perfect the mechanism of a free and open
market and a national market system, to protect investors and the
public interest, and to not permit unfair discrimination between
customers, issuers, brokers, or dealers.\7\
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\5\ 15 U.S.C. 78f(b)(4).
\6\ 15 U.S.C. 78f(b)(5).
\7\ In approving this proposed rule change, the Commission notes
that it has considered the proposed rules' impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
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National securities exchanges traditionally assess annual listing
fees on listed companies at the beginning of the calendar year. When a
company transfers to another marketplace, such annual fees are
typically pro-rated by the new market for the remainder of the calendar
year. Annual fees aid a listed market in, among other things,
conducting its regulatory responsibilities to ensure compliance by
listed companies with continued listing standards and other regulatory
requirements. The Commission notes that an Amex issuer seeking to
transfer to the Exchange has already paid annual continued listing fees
to another national securities exchange for the calendar year in which
it transferred. Further, the Commission recognizes that subsequent to
the consummation of the Merger, both Amex as NYSE Alternext US and NYSE
Arca will be under the same common ownership. The Commission also notes
that the Exchange anticipates the review of securities transferring
from NYSE Alternext US to be less costly than the review of a transfer
from an unaffiliated market, because Amex listing regulatory staff that
will be part of NYSE Regulation will continue to perform both initial
and continued listing reviews. However, the Commission expects, and the
Exchange has represented, that a rigorous and independent review of
compliance with the listing standards will be conducted for any company
seeking to take advantage of the fee waiver, just as for any company
that lists on the Exchange. The Commission expects the Exchange to
maintain its commitment of resources to its regulatory oversight of the
listing process and its ongoing compliance review of listed companies
under its regulatory program.
In summary, for the reasons set forth above, including NYSE Arca's
assertion that the same regulatory staff on Amex (that will have been
absorbed by NYSE Regulation) will have conducted a substantial review
of an Amex company that NYSE Regulation will be able to rely upon as a
baseline in qualifying the company for listing on the Exchange and in
conducting ongoing compliance activities with respect to any such
company, the Commission believes it is not inequitable or unfair to
provide for a waiver of annual fees for a limited period of time after
the merger is consummated.
Based on the above, the Commission believes the proposed fee waiver
does not constitute an inequitable allocation of reasonable dues, fees,
and other charges under section 6(b)(4) of the Act,\8\ does not permit
unfair discrimination between issuers under section 6(b)(5) of the
Act,\9\ and is otherwise consistent with the requirements of the Act.
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\8\ 15 U.S.C. 78f(b)(4).
\9\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion
It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\10\ that the proposed rule change (SR-NYSEArca-2008-78) is hereby
approved.
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\10\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-22655 Filed 9-25-08; 8:45 am]
BILLING CODE 8010-01-P