[Federal Register Volume 76, Number 72 (Thursday, April 14, 2011)]
[Notices]
[Pages 21086-21087]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-9050]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64287; File No. SR-NYSE-2011-15]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change to NYSE Rule 1401 To Modify
the Initial Trading Market Value for Debt Securities
April 8, 2011.
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 April 1, 2011, the 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
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\ 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 NYSE Rule 1401 to modify the initial
trading market value requirements for Debt Securities from $10,000,000
to $5,000,000. The text of the proposed rule change is available at the
Exchange, the Commission's Public Reference Room, and http://www.nyse.com, and on the Commission's Web site at http://www.sec.gov.
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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The NYSE proposes to amend NYSE Rule 1401 to modify the initial
trading market value requirements for Debt Securities from $10,000,000
to $5,000,000.
NYSE Rule 1400 and 1401 set forth requirements for trading Debt
Securities. The term ``Debt Securities'' includes any unlisted note,
bond, debenture or evidence of indebtedness that is: (1) Statutorily
exempt from the registration requirements of Section 12(b) of the
Securities Exchange Act of 1934 (the ``Act''), or (2) eligible to be
traded under a Commission exemptive order.\3\ Currently, NYSE Rule 1401
requires that Debt Securities traded on the NYSE must have an
outstanding aggregate market value or principal amount of no less than
$10,000,000 on the date that trading commences.
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\3\ See NYSE Rule 1401 and Securities Exchange Act Release No.
54766 (November 16, 2006), 71 FR 67657 (November 22, 2006). Under
the exemptive order, among other things, the issuer of the debt
security must have at least one class of common or preferred equity
security listed on the Exchange. Further, for purposes of NYSE Rule
1400(2), the term Debt Securities includes only securities that, if
they were to be listed on the NYSE, would be listed under Sections
102.03 or 103.05 of the NYSE's Listed Company Manual, except that
such securities do not include any security that is defined as an
``equity security'' under Section 3(a)(11) of the Act. The term Debt
Securities also does not include a security that, if listed on the
NYSE, would have been listed under Sections 703.19 or 703.21 of the
NYSE's Listed Company Manual. See NYSE Rule 1400.
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The Exchange proposes to reduce the required initial outstanding
aggregate market value to $5,000,000. There are numerous corporate
retail note programs offered by well-known issuers whose equity
securities are listed on the Exchange, such as General Electric, DOW
Chemical, Goldman Sachs and Caterpillar, that involve issuances of
$5,000,000 or more but less than $10,000,000 in principal.\4\ However,
such issuances may not be traded on the NYSE under current NYSE Rule
1401. The Exchange believes that setting the minimum initial aggregate
market value at $5,000,000 would expand the number of Debt Securities
that could be traded on the Exchange's platform, thereby
[[Page 21087]]
offering investors in such securities greater transparency and choice
with respect to secondary market trading.
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\4\ Examples of debt securities issuances in the $5-10 million
range include GE 4.85 8/15/14 CUSIP 36966RHE9, DOW 5.35 6/15/2013
CUSIP 26054LEG4; GS 5.50 5/15/2019 CUSIP 38141E6C8; CAT 5.85 2/15/
2028 CUSIP 14912HJP6.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Securities Exchange Act of 1934 (the ``Act''),\5\ in
general, and furthers the objectives of Section 6(b)(5) of the Act,\6\
in particular, in that it is 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 a national market system, and, in
general, to protect investors and the public interest. The Exchange
believes the proposed rule changes are consistent with these principles
in that they seek to expand the number of Debt Securities that can be
traded on the NYSE, thereby benefiting investors with increased
transparency and choice with respect to secondary market trading.
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\5\ 15 U.S.C. 78f(b).
\6\ 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
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 such 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 e-mail to [email protected]. Please include
File Number SR-NYSE-2011-15 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-2011-15. 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, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such 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 No. SR-NYSE-2011-15 and should be
submitted on or before May 5, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-9050 Filed 4-13-11; 8:45 am]
BILLING CODE 8011-01-P