Federal Register / Vol. 74, No. 64 / Monday, April 6, 2009 / Notices 15561 

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). 

5Nasdaq’s continued listing requirements relating 

to bid price are set forth in Rules 4310(c)(4), 

4320(e)(2)(E)(ii), 4450(a)(5), 4450(b)(4), and 

4450(h)(3) and the related compliance periods are 

set forth in Rules 4310(c)(8)(D), 4320(e)(2)(E)(ii), 

and 4450(e)(2). Nasdaq has proposed to reorganize 

and renumber these rules, effective April 13, 2009. 

See SR–NASDAQ–2009–018 (pending). Under these 

rules, a security is considered deficient if it fails to 

achieve at least a $1 closing bid price for a period 

of 30 consecutive business days. Once deficient, 

Capital Market issuers are provided one automatic 

180-day period to regain compliance. Thereafter, 

these issuers can receive an additional 180-day 

compliance period if they comply with all Capital 

Market initial inclusion requirements except bid 

price. Global Market issuers are also provided one 

automatic 180-day period to regain compliance, 

after which they can transfer to the Capital Market, 

if they comply with all Capital Market initial 

inclusion requirements except bid price, to take 

advantage of the second 180-day compliance 

period. A company can regain compliance by 

achieving a $1 closing bid price for a minimum of 

ten consecutive business days. 

6Nasdaq’s continued listing requirements relating 

to market value of publicly held shares are set forth 

in Rules 4310(c)(7), 4320(e)(5), 4450(a)(2), 

4450(b)(3) and 4450(h)(2) and the related 

compliance periods are set forth in Rules 

4310(c)(8)(B) and 4450(e)(1). Nasdaq has proposed 

to reorganize and renumber these rules, effective 

April 13, 2009. See SR–NASDAQ–2009–018 

(pending). Under these rules, a security is 

considered deficient if it fails to achieve the 

minimum market value of publicly held shares 

requirement for a period of 30 consecutive business 

days. Thereafter, companies have a compliance 

period of 90 calendar days to achieve compliance 

by meeting the applicable standard for a minimum 

of ten consecutive business days. 

7Securities Exchange Act Release No. 58809 

(October 17, 2008), 73 FR 63222 (October 23, 2008) 

(SR–NASDAQ–2008–082). One comment was 

submitted on this proposal by Alan F. Eisenberg, 

Executive Vice President, the Biotechnology 

Industry Organization. This comment supported the 

suspension and ‘‘any efforts by the Commission and 

NASDAQ to extend [the suspension], as necessary, 

beyond the termination date of January 16, 2009.’’ 

8See, e.g., Securities Exchange Act Release No. 

58588 (September 18, 2008), 73 FR 55174 

(September 24, 2008) (‘‘The Commission is aware 

of the continued potential of sudden and excessive 

fluctuations of securities prices and disruption in 

the functioning of the securities markets that could 

threaten fair and orderly markets. Given the 

importance of confidence in our financial markets 

as a whole, we have also become concerned about 

sudden and unexplained declines in the prices of 

securities. Such price declines can give rise to 

questions about the underlying financial condition 

of an issuer, which in turn can create a crisis of 

confidence without a fundamental underlying basis. 

This crisis of confidence can impair the liquidity 

and ultimate viability of an issuer, with potentially 

broad market consequences.’’) 

9Securities Exchange Act Release No. 59219 

(January 8, 2009), 74 FR 2640 (January 15, 2009) 

(SR–NASDAQ–2008–099). 

10 In this regard, Nasdaq notes that the New York 

Stock Exchange recently filed, on an immediately 

effective basis, a proposed rule change to adopt a 

similar suspension for its $1 price requirement, 

lasting until June 30, 2009. Securities Exchange Act 

Release No. 59510 (March 4, 2009), 74 FR 10636 

(March 11, 2009) (SR–NYSE–2009–21). 

11Nasdaq would continue to identify on its Web 

site and in its daily data feed to vendors those 

companies in a compliance period or in the 

hearings process as not satisfying the continued 

listing standards, unless the company regains 

compliance during the suspension. A company 

Continued 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59661; File No. SR– 

NASDAQ–2009–026] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Extend the 

Temporary Suspension of the 

Continued Listing Requirements 

Related to Bid Price and Market Value 

of Publicly Held Shares for Listing on 

the Nasdaq Stock Market Through July 

19, 2009 

March 31, 2009. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on March 

18, 2009, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by Nasdaq. Nasdaq has 

designated the proposed rule change as 

effecting a change described under Rule 

19b–4(f)(6) under the Act,4 which 

renders the proposal effective upon 

filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Nasdaq proposes to extend the 

temporary suspension of the application 

of the continued inclusion bid price and 

market value of publicly held shares 

requirements for listing on the Nasdaq 

Stock Market through July 19, 2009. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

Nasdaq 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. Nasdaq 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 

On October 16, 2008, Nasdaq filed a 

proposed rule change, which was 

immediately effective, to temporarily 

suspend the bid price 5 and market 

value of publicly held shares 6

continued listing requirements 

otherwise applicable to issuers of 

common stock, preferred stock, 

secondary classes of common stock, 

shares or certificates of beneficial 

interest of trusts, limited partnership 

interests, American Depositary Receipts, 

and their equivalents.7 This suspension 

was designed to provide temporary 

relief to companies from the application 

of these requirements during a period in 

which the financial markets face almost 

unprecedented turmoil, resulting in a 

crisis in investor confidence and 

concerns about the proper functioning 

of the securities markets.8 On December 

18, 2008, Nasdaq filed a proposed rule 

change to extend this suspension until 

April 19, 2009.9

Market conditions have not improved 

since the suspension began and, in fact, 

both the number of securities trading 

below $1 and the number of securities 

trading between $1 and $2 on Nasdaq 

has increased since the initial 

suspension. Nasdaq continues to believe 

that there was no fundamental change 

in the underlying business model or 

prospects for many of these companies, 

and that a decline in general investor 

confidence has resulted in depressed 

pricing for companies that otherwise 

remain suitable for continued listing. 

These same conditions continue to 

make it difficult for companies to 

successfully implement a plan to regain 

compliance with the price or market 

value of publicly held shares tests.10

Given these extraordinary market 

conditions, Nasdaq has determined that 

it is appropriate to continue the 

temporary suspension of the bid price 

and market value of publicly held 

shares requirements for an additional 

three months, until July 19, 2009. Under 

this proposal, companies would not be 

cited for new bid price or market value 

of publicly held shares deficiencies 

during the suspension period, and the 

time allowed to companies already in a 

compliance period or in the hearings 

process for bid price or market value of 

publicly held shares deficiencies would 

remain suspended with respect to those 

requirements.11 Following the 


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15562 Federal Register / Vol. 74, No. 64 / Monday, April 6, 2009 / Notices 

would continue to be subject to delisting for failure 

to comply with other listing requirements. 12Nasdaq would not consider the bid price or 

market value of publicly held shares for the period 

before or during the suspension with respect to a 

company that was not yet non-compliant with those 

requirements at the start of the suspension. 13For example, if a company was 120 days into 

its first 180-day compliance period for a bid price 

deficiency when the suspension first started and the 

company does not regain compliance during the 

suspension, the company would have sixty days 

remaining, starting on July 20, 2009, to regain 

compliance. The company may be eligible for the 

second 180-day compliance period if it satisfies the 

conditions for the second compliance period at the 

conclusion of the first compliance period. 

14As noted above, following the suspension, 

companies presently in the compliance process will 

remain at that same stage of the process. 

15 15 U.S.C. 78f. 

16 15 U.S.C. 78f(b)(5). 

17 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. 

18Securities Exchange Act Release No. 44857 

(September 27, 2001), 66 FR 50485 (October 3, 

2001) (SR–NASD–2001–61). 

19 15 U.S.C. 78s(b)(3)(A). 

20 17 CFR 240.19b–4(f)(6). 

temporary suspension, any new 

deficiencies with the bid price or market 

value of publicly held shares 

requirements would be determined 

using data starting on July 20, 2009.12

When the suspension expires, 

companies that were in a compliance 

period as of October 16, 2008, when the 

suspension first began, would receive 

the balance of any pending compliance 

periods in effect at the time of the initial 

suspension.13 Similarly, companies that 

were in the Hearings process prior to 

October 16, 2008, would resume in that 

process at the same stage they were in 

when the suspension first went into 

effect. Nasdaq will continue to monitor 

securities to determine if they regain 

compliance during the temporary 

suspension. 

Nasdaq believes that extending the 

temporary suspension will permit 

companies to continue focusing on 

running their businesses, rather than 

satisfying market-based requirements 

that are largely beyond their control in 

the current environment. Moreover, this 

extension will allow investors to buy 

shares of some of these lower-priced 

securities without fear that the company 

will receive a delisting notification or be 

delisted in the very near term.14 Nasdaq 

will continue to monitor market 

conditions and consider whether it is 

appropriate to further extend the 

suspension. 

2. Statutory Basis 

Nasdaq believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,15 in 

general and with Section 6(b)(5) of the 

Act,16 in particular in that it is designed 

to prevent fraudulent and manipulative 

acts and practices, 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 

proposed rule change is designed to 

remove uncertainty regarding the ability 

of companies to remain listed on 

Nasdaq during this especially turbulent 

market environment, thereby protecting 

investors, facilitating transactions in 

securities, and removing an impediment 

to a free and open market. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Nasdaq does not believe that the 

proposed rule change will result in 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 

While written comments were not 

solicited about the proposed extension, 

there was one comment submitted by 

the Biotechnology Industry 

Organization on the original suspension 

of the bid price and market value of 

publicly held shares requirements, 

which supported the extension. That 

comment is described in footnote 6, 

above. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The proposed rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) of the Act and paragraph 

(f)(6) of Rule 19b–4 thereunder, in that 

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; provided the selfregulatory organization has given 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.17

Nasdaq believes that the proposed 

extension of the temporary suspension 

does not significantly affect the 

protection of investors or the public 

interest as it is a temporary measure 

designed to respond to extraordinary 

market conditions. Nasdaq also believes 

that the proposed extension of the 

temporary suspension will help protect 

investors and the public interest by 

allowing the management of listed 

companies to focus more on the 

successful operation of their businesses 

than on responding to market 

conditions that are entirely 

unpredictable at the present time and 

often completely out of the control of 

the company’s management. Further, 

Nasdaq has previously imposed a 

similar temporary suspension following 

the events of September 11, 2001, when 

there were also extraordinary market 

conditions.18 As such, Nasdaq believes 

that it is appropriate to file this proposal 

for immediate effectiveness pursuant to 

Section 19(b)(3)(A) 19 and Rule 19b– 

4(f)(6).20

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 

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 rulecomments@sec.gov. Please include File 

Number SR–NASDAQ–2009–026 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. 


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Federal Register / Vol. 74, No. 64 / Monday, April 6, 2009 / Notices 15563 

21 17 CFR 200.30–3(a)(12). 

1 15 U.S.C.78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4On March 30, 2009, the Exchange withdrew 

Amendment No. 1. 

5Amendment No. 2 to SR–NYSE–2009–25 

replaces the original filing in its entirety. References 

to Amendment No. 1 in Amendment No. 2 should 

be read as Amendment No. 2. Telephone call 

between Nancy Burke-Sanow, Division of Trading 

and Markets, Commission, and Clare Saperstein, 

Managing Director, NYSE, March 30, 2009. 

6See Securities Exchange Act Release No. 58461 

(September 4, 2008), 73 FR 52710 (September 10, 

2008) (SR–FINRA–2008–033); Securities Exchange 

Act Release No. 58514 (September 11, 2008), 73 FR 

54190 (September 18, 2008) (SR–FINRA–2008–039); 

Securities Exchange Act Release No. 58643 

(September 25, 2008), 73 FR 57174 (October 1, 

2008) (SR–FINRA–2008–021, –022, –026, –028, 

–029); Securities Exchange Act Release No. 58660 

(September 26, 2008), 73 FR 57393 (October 2, 

2008) (SR–FINRA–2008–027); Securities Exchange 

Act Release No. 58661 (September 26, 2008), 73 FR 

57395 (October 2, 2008) (SR–FINRA–2008–030); 

and Securities Exchange Act Release No. 59097 

(December 12, 2008), 73 FR 78412 (December 22, 

2008) (SR–FINRA–2008–057). See also FINRA 

Regulatory Notice 08–57, October 16, 2008. 

7The current FINRA rulebook consists of three 

sets of rules: (1) NASD Rules, (2) rules and rule 

interpretations incorporated from the NYSE 

(‘‘FINRA Incorporated NYSE Rules’’) (together, 

referred to as the ‘‘Transitional Rulebook’’), and (3) 

consolidated FINRA Rules. The FINRA 

Incorporated NYSE Rules apply only to those 

members of FINRA that are also members of the 

NYSE (‘‘Dual Members’’), while the consolidated 

FINRA Rules apply to all FINRA members. For 

more information about the FINRA rulebook 

consolidation process, see FINRA Information 

Notice, March 12, 2008 (Rulebook Consolidation 

Process). 

8Pursuant to Rule 17d–2 under the Act, NYSE, 

NYSER and NASD entered into an agreement (the 

‘‘Agreement’’) to reduce regulatory duplication for 

Dual Members by allocating to FINRA regulatory 

responsibility for certain NYSE and NASD Rules 

(the ‘‘Common Rules’’). See Securities Exchange 

Act Release No. 56148 (July 26, 2007), 72 FR 42146 

(August 1, 2007) (Notice of Filing and Order 

Approving and Declaring Effective a Plan for the 

Allocation of Regulatory Responsibilities). The 

Common Rules include the FINRA Incorporated 

NYSE Rules. See Securities Exchange Act Release 

No. 56147 (July 26, 2007), 72 FR 42166 (August 1, 

2007) (Notice of Filing and Order Granting 

Accelerated Approval of Proposed Rule Change to 

Incorporate Certain NYSE Rules Relating to Member 

Firm Conduct) (SR–NASD–2007–054). Paragraph 

2(b) of the Agreement sets forth procedures 

regarding proposed changes by either NYSE or 

FINRA to the substance of any of the Common 

Rules. 

All submissions should refer to File 

Number SR–NASDAQ–2009–026. 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– 

NASDAQ–2009–026 and should be 

submitted on or before April 27, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–7631 Filed 4–3–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59655; File No. SR–NYSE– 

2009–25] 

Self-Regulatory Organizations; Notice 

of Filing of Proposed Rule Change by 

New York Stock Exchange LLC, as 

Modified by Amendment No. 2, 

Changing Certain NYSE Rules and 

Rule Interpretations To Harmonize 

Them With Changes to Corresponding 

Rules Recently Filed by the Financial 

Industry Regulatory Authority, Inc. 

March 30, 2009. 

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 March 9, 

2009, New York Stock Exchange LLC 

(‘‘NYSE’’ or the ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’ or 

‘‘SEC’’) the proposed rule change as 

described in Items I, II, and III below, 

which Items have been prepared by the 

self-regulatory organization. On March 

27, 2009, the Exchange filed 

Amendment No. 1 to the proposed rule 

change, which was withdrawn.4 On 

March 30, 2009, the Exchange filed 

Amendment No. 2 to the proposed rule 

change.5 The Commission is publishing 

this notice to solicit comments on the 

proposed rule change, as amended, from 

interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes changes to 

certain NYSE Rules and Rule 

Interpretations, retroactively effective to 

December 15, 2008, to harmonize them 

with changes to corresponding rules 

recently filed by the Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’) 

and approved by the Commission or 

submitted for immediate effectiveness.6

FINRA filed the rule changes as part of 

its effort to develop a new consolidated 

rulebook for its members (the 

‘‘Consolidated FINRA Rulebook’’).7 The 

text of the proposed rule change is 

available at the Exchange, the 

Commission’s Public Reference Room, 

and http://www.nyse.com. 

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 

On July 30, 2007, the National 

Association of Securities Dealers, Inc. 

(‘‘NASD’’) and NYSE Regulation, Inc. 

(‘‘NYSER’’) consolidated their member 

firm regulation operations into a 

combined organization, FINRA.8 As 

discussed in more detail below, FINRA 

recently filed, and the Commission 

approved, changes to certain NASD and 

FINRA Incorporated NYSE Rules and 

adopted a number of Consolidated 

FINRA Rules to replace other NASD and 

FINRA Incorporated NYSE Rules. The 

effective date for the FINRA rule 

changes was December 15, 2008. 

To reduce regulatory duplication, the 

Exchange proposes to harmonize NYSE 

Rules with the recently approved 

FINRA rule changes by deleting certain 

NYSE Rules and Rule Interpretations 

and replacing them with rules that are 


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