[Federal Register Volume 75, Number 43 (Friday, March 5, 2010)]
[Notices]
[Pages 10336-10338]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-4659]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61609; File No. SR-NYSE-2010-13]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC To
Extend the Pilot Program in Relation to Certain of Its Continued
Listing Standards
March 1, 2010.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Exchange Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is
hereby given that, on February 25, 2010, New York Stock Exchange LLC
(the ``NYSE'' or the ``Exchange'') filed with the Securities and
Exchange Commission the proposed rule changes as described in Items I
and II below, which items have been prepared by the Exchange. The
Exchange has designated this proposal eligible for immediate
effectiveness pursuant to Rule 19b-4(f)(6) \4\ under the Exchange Act.
The Commission is publishing this notice to solicit comments on the
proposed rule changes 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.
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes extend [sic] until June 30, 2010, the
operation of an amendment to the continued listing requirements in
Section 802.01B of the Exchange's Listed Company Manual (the
``Manual'') that is currently in effect on a pilot program basis (the
``Pilot Program'').
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 NYSE proposes to extend until June 30, 2010, the Pilot Program
currently in effect in relation to the continued listing requirements
in Section 802.01B of the Manual.
Prior to the adoption of the Pilot Program,\5\ Section 802.01B(I)
of the Manual provided that any company that qualified to list under
the Earnings Test set out in Section 102.01C(I) or in Section
103.01B(I) (in the case of foreign private issuers) or pursuant to the
requirements set forth under the Assets and Equity Test set forth in
Section 102.01C(IV) or the ``Initial Listing Standard for Companies
Transferring from NYSE Arca'' (the ``NYSE Arca Transfer Standard'') set
forth in Section 102.01(C)(V) (the NYSE Arca Transfer Standard expired
by its terms on August 31, 2009) was considered to be below compliance
standards if such company's average global market capitalization over a
consecutive 30 trading-day period was less than $75 million and, at the
same time, total stockholders' equity was less than $75 million. Under
the Pilot Program, companies that listed under the initial listing
standards set forth in the immediately preceding sentence are
considered to be below compliance standards if average global market
capitalization over a consecutive 30 trading-day period is less than
$50 million and, at the same time, total stockholders' equity is less
than $50
[[Page 10337]]
million. The Pilot Program originally expired by its terms on October
31, 2009, but the Exchange extended its application for an additional
five months, until February 28, 2010.\6\ The Exchange now proposes to
extend the Pilot Program until June 30, 2010. The Exchange is
submitting a filing concurrently with this filing in which it proposes
to make the Pilot Program permanent.\7\ If the SEC approves that filing
prior to June 30, 2010, the Pilot Program will expire and the amendment
to Section 802.01B(I) will become permanent at that time.
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\5\ See Securities Exchange Act Release No. 59996 (May 28,
2009), 74 FR 26912 (June 4, 2009) (SR-NYSE-2009-48) (the ``Pilot
Program Notice'').
\6\ See Securities Exchange Act Release No. 60911 (November 2,
2009), 74 FR 57730 (November 9, 2010) (SR-NYSE-2009-109).
\7\ The Commission notes that on February 26, 2010, the Exchange
submitted a proposed rule change to make the Pilot Program
permanent. (See SR-NYSE-2010-15).
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For companies listed under the Earnings Test, the Pilot Program
returned continued listing requirements to those in place prior to the
adoption of the current requirements on June 9, 2005.\8\ Consequently,
prior to implementation of the Pilot Program, the Exchange had
considerable historical experience with the continued listing of
companies that had continued to trade on the Exchange with global
market capitalization and stockholders' equity each below $75 million
but greater than $50 million. In addition, the Exchange's experience
under the Pilot Program has been very positive, as only one of the
companies that was deemed back in compliance as a result of the
adoption of the Pilot Program has subsequently fallen below the
standard as amended by the Pilot Program as of the date of this filing
and only two additional companies have been newly identified as being
below the Pilot Program standard. Based on this experience, the
Exchange believes that companies that exceed the continued listing
standards as amended by the Pilot Program are suitable for continued
listing on the Exchange.
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\8\ See Securities Exchange Act Release No. 51813 (June 9,
2005), 70 FR 35484 (June 20, 2005) (SR-NYSE-2004-20). The Assets and
Equity Test set forth in Section 102.01C(IV) and the NYSE Arca
Transfer Standard set forth in Section 102.01C(V) were adopted
subsequent to this amendment.
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The Exchange believes that the continued listing standards as
amended by the Pilot Program are at least as stringent as those of any
other national securities exchange. Consequently, the Exchange believes
that the Pilot Program is consistent with the protection of investors
and the public interest and does not raise any novel regulatory issues.
In addition, the Exchange notes that the Commission stated in the Pilot
Program Notice \9\ that it believed that the continued listing
standards adopted under the Pilot Program met the requirements
established in Exchange Act Rule 3a51-1(a)(2)(ii) \10\ in that they
were reasonably related to the initial listing standards set forth in
paragraph (a)(20)(i)[sic] of Exchange Act Rule 3a51-1 (the ``Penny
Stock Rule'').\11\
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\9\ See the Pilot Program Notice at Note 5.
\10\ 17 CFR 240.a51-1(a)(2)(ii). [sic]
\11\ 17 CFR 240.a51-1. [sic]
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) \12\ of the Exchange Act, in general, and furthers
the objectives of Section 6(b)(5) \13\ of the Exchange Act in
particular in that it is designed to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, 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. The Exchange believes that
the proposed extension to the Pilot Program is consistent with the
investor protection objectives of the Exchange Act in that the
continued listing standards under the Pilot Program are set at a high
enough level that only companies that are suitable for continued
listing on the Exchange will exceed the standards.
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\12\ 15 U.S.C. 78f(b).
\13\ 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 Exchange Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) by its terms does not become operative for 30 days after the
date of this 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) \14\ of the Act and Rule 19b-4(f)(6)
thereunder.\15\
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to provide the Commission
with 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 fulfilled this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally
may not become operative prior to 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii) \17\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange requests that the
Commission waive the 30-day operative delay, as specified in Rule 19b-
4(f)(6)(iii),\18\ which would make the rule change operative upon
filing.
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\16\ Id.
\17\ 17 CFR 240.19b-4(f)(6)(iii).
\18\ Id.
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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 such waiver will allow the current Pilot Program to continue
without interruption. The Commission notes that the standards under the
Pilot Program are identical, for those companies qualifying under the
Earnings Test, to those in effect on the Exchange prior to the adoption
of the current standards in 2005.\19\ The NYSE represents that the
continued listing standards proposed under the Pilot Program are at
least as stringent as those of any other national securities exchange.
In addition, the Commission notes that the pilot period will allow the
NYSE and the Commission to continue to assess the new continued listing
standards. For these reasons, the Commission designates the proposed
rule change operative upon filing.\20\
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\19\ See Securities Exchange Act Release No. 51813 (June 9,
2005), 70 FR 35484 (June 20, 2005) (SR-NYSE-2004-20).
\20\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of such proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public
[[Page 10338]]
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 Exchange 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-2010-13 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-2010-13. 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 Web site viewing and printing 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-2010-13 and should be submitted on or before March 26, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-4659 Filed 3-4-10; 8:45 am]
BILLING CODE 8011-01-P