[Federal Register Volume 73, Number 220 (Thursday, November 13, 2008)]
[Notices]
[Pages 67241-67243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-26894]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58900; File No. SR-NYSE-2008-105]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC To
Shorten the Time Period for Listed Companies To Issue a Press Release
After Receipt of Notification That the Company Is Noncompliant With the
Exchange's Price Test
November 5, 2008.
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 October 28, 2008, New York Stock Exchange, LLC (the
``NYSE'' or the ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'' or ``SEC'') the proposed rule change as
described in Items I and II 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\ 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 amend Section 802.01C of the Exchange's
Listed Company Manual (the ``Manual'') to provide that the Exchange
will require a U.S. company, upon receiving written notification that
it has fallen below the Exchange's $1.00 stock price requirement over a
30 trading-day average, to issue a press release within the same amount
of time as allotted by the SEC for the company to disclose such an
occurrence, but in any event no later than four business days after
receipt of notification from the Exchange, and will require a non-U.S.
company to issue a press release within 30 days of receiving written
notification from the Exchange that it has fallen below the Exchange's
$1.00 stock price requirement. The text of the proposed rule change is
available on the Exchange's Web site (http://www.nyse.com), at the
Exchange's Office of the Secretary, 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 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.
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 802.01C of the Manual to
provide that the Exchange will require a U.S. company, upon receiving
written notification that it has fallen below the Exchange's $1.00
stock price requirement over a 30 trading-day average, to issue a press
release within the same amount of time as allotted by the SEC for the
company to disclose such an occurrence, but in any event no later than
four business days after receipt of notice from the company. The
Exchange will require a non-U.S. company to issue a press release
within 30 days of receiving written notification from the Exchange that
it has fallen below the Exchange's $1.00 stock price requirement. By
doing so, the Exchange is conforming its requirements under Section
802.01C to the press release requirements in relation to other
notifications of events of noncompliance as set forth in Section 802.02
(for domestic companies) and Section 802.03 (for foreign private
issuers).\4\
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\4\ See Exchange Act Release No. 58487 (September 8, 2008), 73
FR 53303 (September 15, 2008) (SR-NYSE-2008-59). Nothing in this
proposal affects a company's obligations to disclose material news
in a timely fashion. See Section 202.05 of the Manual. There are
currently no companies that have received notifications from the
Exchange regarding non-compliance with the Exchange's stock price
continued listing requirements and that have not already issued the
required press release. As such, the revised time periods this
filing establishes for companies that are non-compliant under
Sections 802.01C (including foreign companies) will apply only to
those companies that receive a notice of non-compliance subsequent
to the submission of this filing.
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[[Page 67242]]
Currently, Section 802.01C of the Manual requires a U.S. company to
issue a press release within 45 days of receiving written notification
from the Exchange that it has fallen below the Exchange's stock price
requirement. Section 802.01C also provides that, if the company fails
to issue a press release by the deadline specified by the rule, the
Exchange will itself issue the requisite press release. However, SEC
rules require the company to file a Form 8-K giving notice of that
event within four business days of being notified by the Exchange.\5\
The Exchange believes that its own requirement is too long in light of
the much earlier public notice required by the Form 8-K rule and that
it is appropriate for the Exchange to issue a press release on the
subject itself if the company has not acted within the period provided
by Form 8-K and in any event no later than four business days after
receipt of notification from the Exchange. The Exchange notes that
companies that are incorporated in jurisdictions outside the United
States but that do not qualify as foreign private issuers are treated
as domestic companies for purposes of Section 802.01C.
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\5\ Item 3.01 of Form 8-K requires a registrant to file a Form
8-K within four business days of receipt of notice from the national
securities exchange that maintains the principal listing for any
class of the registrant's common equity that the registrant or such
class of the registrant's securities does not satisfy a rule or
standard for continued listing on the exchange.
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Currently, Section 802.01C of the Manual requires a non-U.S.
company to issue a press release within 90 days of receiving written
notification from the Exchange that it has fallen below the Exchange's
stock price requirement. Section 802.01C also provides that, if the
company fails to issue a press release by the deadline specified by the
rule, the Exchange will itself issue the requisite press release. While
foreign private issuers are not subject to the Form 8-K requirement
imposed on domestic issuers, the Exchange believes that 90 days is an
excessive period to give companies to make such a material disclosure.
Based on our experience with these companies, 30 days would be more
than sufficient. As such, the Exchange proposes to shorten from 90 to
30 days the period within which foreign private issuers must issue a
press release with regard to a notification by the Exchange of
noncompliance. If the issuer does not issue a press release within that
30 day period, the Exchange will do so.
While Section 802.01C establishes maximum time periods for the
issuance of press releases, the Exchange believes that companies should
issue their press releases concerning any notice of noncompliance they
receive from the Exchange as soon as possible after receipt of such
notification and should not wait until close to the end of the
permitted period before doing so.
2. Statutory Basis
The basis under the Securities Exchange Act of 1934 (the ``Act'')
\6\ for this proposed rule change is the requirement under Section
6(b)(5) \7\ that an Exchange have rules that are designed 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 and, in general, to protect investors and the public interest.
In particular, the Exchange believes that the proposed amendment
protects investors and the public interest by ensuring the prompt
disclosure of material information with respect to listed companies.
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\6\ 15 U.S.C. 78a et seq.
\7\ 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 purpose of the Exchange 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. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change: (i) Does not significantly affect
the protection of investors or the public interest; (ii) does not
impose any significant burden on competition; and (iii) does not become
operative for 30 days after the date of the filing, or such shorter
time as the Commission may designate if consistent with the protection
of investors and the public interest, the proposed rule change has
become effective pursuant to Section 19(b)(3)(A) of the Act \8\ and
Rule 19b-4(f)(6) thereunder.\9\
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6). Pursuant to Rule 19b-4(f)(6)(iii)
under the Act, the Exchange is required to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \10\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \11\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has requested that the Commission waive the 30-day operative delay.
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\10\ 17 CFR 240.19b-4(f)(6).
\11\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because it will allow the Exchange to immediately conform the press
release timing requirements for companies that are noncompliant with
the Exchange's $1.00 stock price test in Section 802.01C of the Manual
with the press release timing requirements in Sections 802.02 and
802.03 of the Manual that apply to companies that are noncompliant with
the Exchange's other continued listing standards.\12\ Because the
Commission recently approved these similar timing requirements in
Sections 802.02 and 802.03 of the Manual,\13\ the Commission believes
that the proposed rule change raises no new regulatory issues. The
Commission also notes that the prior changes to these other sections of
the Manual were subject to full notice and comment, and the Commission
received one comment in support of that proposal. Further, the
Commission notes that the proposed rule change will provide investors
with earlier press release notification that a company has fallen out
of compliance with the Exchange's stock price requirement and also
avoids any confusion for domestic companies by conforming the time
periods in the NYSE rules with current Commission requirements for the
filing of the Form 8-K. For these reasons, the Commission designates
that the proposed rule change become operative immediately upon
filing.\14\
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\12\ See continued listing standards in Section 802.01 of the
Manual.
\13\ See supra note 4.
\14\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate the rule change if it
appears to the Commission that such action is
[[Page 67243]]
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of the Act.
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-2008-105 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2008-105. 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 inspection and
copying in the Commission's Public Reference Room, on official business
days between the hours of 10 a.m. and 3 p.m. Copies of the filing also
will 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-2008-105 and should be submitted on or before December 4, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-26894 Filed 11-12-08; 8:45 am]
BILLING CODE 8011-01-P