7022 Federal Register / Vol. 73, No. 25 / Wednesday, February 6, 2008 / Notices 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 56976 

(December 17, 2007), 72 FR 73055. 

4 15 U.S.C. 78f(b)(5). 

5 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

6 15 U.S.C. 78s(b)(2). 

7 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

‘‘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 

reduce from six months to three months 

the period for which the average global 

market capitalization of companies 

seeking to list on the Exchange must 

exceed the levels established by the 

Exchange’s ‘‘pure valuation/revenue’’

test contained in Section 102.01C of the 

Exchange’s Listed Company Manual 

(the ‘‘Manual’’). On December 14, 2007, 

the Exchange filed Amendment No. 1 to 

the proposed rule change. The proposed 

rule change, as modified by Amendment 

No. 1, was published for comment in 

the Federal Registeron December 26, 

2007.3 The Commission received no 

comments on the proposal. This order 

approves the proposed rule change, as 

amended. 

II. Description of the Proposal 

Section 102.01C of the Exchange’s 

Manual requires companies listing 

under the Exchange’s ‘‘pure valuation/ 

revenue’’ test to have a global market 

capitalization of $750 million. In the 

case of companies listing other than in 

connection with an initial public 

offering or a spin-off or upon emergence 

from bankruptcy, Section 102.01C 

provides that the market capitalization 

valuation will be determined on the 

basis of a six-month average. 

The Exchange now proposes to reduce 

from six months to three months the 

period over which prospective 

companies seeking to list on the 

Exchange must have had an average 

global market capitalization that meets 

the required level of $750 million. In 

addition, the Exchange proposes to 

amend the rule to specify that in 

considering the suitability for listing of 

a company pursuant to this standard, 

the Exchange will consider whether the 

company’s business prospects and 

operating results indicate that the 

company’s market capitalization value 

is likely to be sustained or increase over 

time. 

III. Discussion 

After careful review, the Commission 

finds that the proposed rule change, as 

amended, is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange and, in 

particular, with Section 6(b)(5) of the 

Act,4 which requires, among other 

things, that the rules of a national 

securities exchange be 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.5

The Commission notes that the 

proposed rule change does not change 

the quantitative global market 

capitalization requirement under the 

Exchange’s ‘‘pure valuation/revenue’’

test. This requirement will remain at 

$750 million global market 

capitalization. Rather, the Exchange is 

shortening the time period over which 

the average global market capitalization 

of a prospective listed company must 

meet this level. The Commission notes 

that the proposed rule change requires 

the Exchange to look not only at the 

average three month market 

capitalization of the company but to 

also consider whether the company’s 

market capitalization is likely to be 

sustained or increase over time based on 

the company’s business prospects and 

operation results. The Commission 

therefore believes that the proposed rule 

change may allow the earlier listing of 

companies, but at the same time, it is 

designed to ensure that the Exchange 

does not list companies on the basis of 

a market capitalization valuation that is 

unlikely to be sustained. In this regard, 

the Commission expects that the 

Exchange will scrutinize companies to 

ensure that it will only list companies 

that should be able to continue to meet 

the market capitalization standard. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,6 that the 

proposed rule change (SR–NYSE–2007–

98), as modified by Amendment No. 1, 

be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E8–2073 Filed 2–5–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–57236; File No. SR–NYSE–

2008–03] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change to 

Rescind Rule 97 (Limitation on 

Member’s Trading Because of Block 

Positioning) 

January 30, 2008. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on January 

11, 2008, the New York Stock Exchange 

LLC (‘‘NYSE’’ or ‘‘Exchange’’) 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 substantially prepared by the 

Exchange. 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 

NYSE proposes to rescind NYSE Rule 

97 (Limitation on Member’s Trading 

Because of Block Positioning). The text 

of the proposed rule change is available 

at NYSE, 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, 

NYSE included statements concerning 

the purpose of, and basis for, the 

proposed rule change. The text of these 

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 aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Through this filing, the Exchange 

seeks to rescind Exchange Rule 97. 

Exchange Rule 97 prevents a member 

organization that holds a long position 

in a security that resulted from a block 

transaction with a customer from 


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Federal Register / Vol. 73, No. 25 / Wednesday, February 6, 2008 / Notices 7023 

3See Securities Exchange Act Release No. 46566 

(September 27, 2002), 67 FR 62278 (October 4, 

2002) (SR–NYSE–2001–24). 

4See Securities Exchange Act Release No. 56024 

(July 6, 2007), 72 FR 38643 (July 13, 2007) (SR–

NYSE–2007–61). 

5 17 CFR 242.600(b)(30)(ii) and 17 CFR 

242.611(b)(6). 

6This exemption would be available only when: 

(1) The firm has acquired a proprietary position as 

a result of a previous block facilitation for a 

customer; (2) the facilitation trade during the last 

20 minutes of trading would cause the firm to trade 

through a better priced offer on another market, 

such that the firm is obligated by Regulation NMS 

Rule 611 to send proprietary ISOs when it 

facilitates the customer’s order; (3) the customer has 

declined better-priced ISO executions; and (4) the 

better-priced offers in away markets are such that 

NYSE Rule 97 would prohibit the firm from sending 

a proprietary buy order. See NYSE Information 

Memo 07–67 (July 6, 2007). 

7 17 CFR 240.10b–5. 

8 15. U.S.C. 78i(a). 

9See e-mail from Gillian Rowe, Senior Counsel, 

NYSE, to Jennifer Dodd, Special Counsel, Division 

of Trading and Markets, Commission, dated January 

29, 2008. 

10 15 U.S.C. 78f(b). 

11 15 U.S.C. 78f(b)(5). 

12 15 U.S.C. 78k–1(a)(1). 

effecting, within twenty minutes of the 

close of trading on the Exchange, a 

purchase on a ‘‘plus’’ tick in that 

security at a price higher than the 

lowest price at which any block was 

acquired in a previous transaction on 

that day, if the person responsible for 

the entry of such order to purchase the 

security had knowledge of the block 

position. 

The Exchange has from time to time 

reviewed the applicability of the rule 

and made amendments in an attempt to 

maintain the rule’s relevance as the 

nature of trading has significantly 

evolved over the years. Notwithstanding 

those efforts, the Exchange believes that 

the practical application of the rule in 

today’s market no longer addresses the 

concerns that prompted its 

implementation. The Exchange 

therefore proposes to rescind Exchange 

Rule 97 in its entirety. 

Background 

Exchange Rule 97 focuses on the 

trading of member organizations while 

they hold positions in a security as a 

result of a block transaction with 

customer(s). The rule was originally 

adopted to address concerns that a 

member organization might engage in 

manipulative practices by attempting to 

‘‘mark-up’’ the price of a stock to enable 

the position acquired in the course of 

block positioning to be liquidated at a 

profit, or to maintain the market at the 

price at which the position was 

acquired. 

In 2002, the rule was amended to 

narrow the scope of the prohibitions 

solely to transactions executed within 

the last twenty minutes of the trading 

day, and to provide exceptions to the 

rule for member organizations that 

establish information barriers and for 

certain hedging transactions.3 The 

rationale behind the rule change was to 

limit the rule’s ‘‘tick’’ restriction to the 

most sensitive part of the trading day 

(where it was thought that manipulation 

was most likely to occur so that the 

member firm could unwind its position 

at the opening of trading the next day). 

The implementation of Regulation 

NMS in March 2007 necessitated an 

additional amendment to the rule in 

July 2007 to create an exemption to 

resolve a conflict between compliance 

with Rule 97 and Regulation NMS.4

Specifically, if during the last 20 

minutes of trading a member 

organization facilitates a customer order 

that trades through protected bids or 

offers, and in compliance with Rules 

600(b)(30)(ii) and 611(b)(6) of 

Regulation NMS,5 the member 

organization simultaneously routes 

proprietary intermarket sweep orders to 

execute against the full displayed size of 

any protected quotation in that security 

(‘‘ISO facilitation’’), the ISO facilitation 

could violate Rule 97 if the ISO orders 

would trade on a plus tick, at a price 

above the lowest facilitation price. In 

essence, the implementation of 

Regulation NMS required firms to 

choose between violating Regulation 

NMS or violating Rule 97. The 

exemption to Rule 97 was added so that 

when facilitating a customer order that 

would otherwise require a member 

organization to either violate Rule 97 or 

trade through protected quotations, 

member organizations can comply with 

their Regulation NMS obligations 

without also violating Rule 97.6

Rescision of Rule 97 

NYSE states that this proposed 

rescision of the rule highlights the 

extent to which trading has changed and 

how the operation of Rule 97 hinders 

the ability of member organizations to 

legitimately conduct their business and 

facilitate their customers’ orders. Today, 

compliance with Regulation NMS 

means that the liquidation of a block 

position typically occurs on many 

different market centers. Additionally, 

the Exchange believes that, in active and 

volatile market conditions, incremental 

movements of a penny or more occur 

almost instantaneously, lessening the 

ability to influence the closing price of 

a security. 

Rule 97 was established at a time 

when the majority of block transactions 

were executed on the Exchange. 

However, in the present competitive 

trading environment, there are now 

many other venues available for market 

participants to effect block position 

transactions without the strictures of 

such a rule. The Exchange believes that, 

in order to encourage consistency 

throughout the industry with respect to 

the execution of block positions and to 

encourage market participants to 

continue to effect their block 

transactions on the Exchange, Rule 97 

should be rescinded. NYSE represents 

that NYSE Regulation, Inc. will 

continue to surveil in NYSE-listed 

securities for possible manipulative 

activity, including marking the close, 

which could be in violation of federal 

securities laws or Exchange Rules, 

including Rule 10b–5 under the Act,7

section 9(a) of the Act,8 and Exchange 

Rules 476(a) and 435.9

2. Statutory Basis 

NYSE believes that the proposed rule 

change is consistent with Section 6(b) of 

the Act,10 in general, and the 

requirement in Section 6(b)(5) of the 

Act,11 in particular, that the rules of an 

exchange are, among other things, 

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. NYSE asserts that the 

proposed rule change also is designed to 

support the principles of section 

11A(a)(1)12 in that it seeks to assure 

economically efficient execution of 

securities transactions, and make it 

practicable for brokers to execute 

investors’ orders in the best market. 

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 

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 

Within 35 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 


pwalker on PROD1PC71 with NOTICES
7024 Federal Register / Vol. 73, No. 25 / Wednesday, February 6, 2008 / Notices 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5See Securities Exchange Act Release No. 47671 

(April 11, 2003), 68 FR 19048 (April 17, 2003) (SR–

NYSE–2002–11) (‘‘Original Order’’). 

6See Securities Exchange Act Release No. 47992 

(June 5, 2003), 68 FR 35047 (June 11, 2003) (SR–

NYSE–2003–19) (delaying the implementation date 

for portable phones from on or about May 1, 2003 

to no later than June 23, 2003). 

7See Securities Exchange Act Release Nos. 48919 

(December 12, 2003), 68 FR 70853 (December 19, 

2003) (SR–NYSE–2003–38) (extending the Pilot for 

an additional six months ending on June 16, 2004); 

49954 (July 1, 2004), 69 FR 41323 (July 8, 2004) 

(SR–NYSE–2004–30) (extending the Pilot for an 

additional five months ending on November 30, 

2004); 50777 (December 1, 2004), 69 FR 71090 

(December 8, 2004) (SR–NYSE–2004–67) (extending 

the Pilot for an additional four months ending 

March 31, 2005); 51464 (March 31, 2005), 70 FR 

17746 (April 7, 2005) (SR–NYSE–2005–20) 

(extending the Pilot for additional four months 

ending July 31, 2005); 52188 (August 1, 2005), 70 

FR 46252 (August 9, 2005) (SR–NYSE–2005–53) 

(extending the Pilot for an additional four months 

ending January 31, 2006); 53277 (February 13, 

2006), 71 FR 8877 (February 21, 2006) (SR–NYSE–

2006–03) (extending the Pilot for an additional six 

months ending July 31, 2006); 54276 (August 4, 

2006), 71 FR 45885 (August 10, 2006) (SR–NYSE–

2006–55) (extending the Pilot for an additional six 

months ending January 31, 2007); and 55218 

(January 31, 2007), 72 FR 6025 (February 8, 2007) 

(SR–NYSE–2007–05) (extending the Pilot for an 

additional twelve months ending January 31, 2008). 

Also, the Exchange has incorporated RCMMs into 

the Pilot and subsequently amended the Pilot to 

allow RCMMs to use an Exchange authorized and 

provided portable telephone on the Exchange Floor 

to call to and receive calls from their upstairs 

offices, the upstairs offices of their clearing firm, 

and their booth locations on the Exchange Floor. 

longer period to be appropriate and 

publishes its reasons for so finding, or 

(ii) as to which NYSE consents, the 

Commission will: 

(A) By order approve 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 rulecomments@sec.gov. Please include File 

Number SR–NYSE–2008–03 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2008–03. 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, 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 offices 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–2008–03 and should 

be submitted on or before February 27, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E8–2075 Filed 2–5–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–57249; File No. SR–NYSE–

2008–10] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Rule 36 (Communication Between 

Exchange and Exchange Members’

Offices) 

January 31, 2008. 

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 January 

30, 2008, 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 substantially prepared by the 

Exchange. The Exchange filed the 

proposed rule change pursuant to 

section 19(b)(3)(A) of the Act 3 and Rule 

19b–4(f)(6) thereunder,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 

The Exchange seeks to extend its 

current portable phone pilot (the 

‘‘Pilot’’) operating pursuant to Exchange 

Rule 36 from its scheduled January 31, 

2008 expiration date to April 30, 2008. 

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 

Exchange included statements 

concerning the purpose of, and basis for, 

the proposed rule change. The text of 

these 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 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 seeks to extend the 

Pilot operating pursuant to Exchange 

Rule 36 from the Pilot’s scheduled 

January 31, 2008 expiration date to 

April 30, 2008. Pursuant to the Pilot, 

Floor brokers and Registered 

Competitive Market Makers (‘‘RCMM’’) 

are permitted to use an Exchange 

authorized and provided portable 

telephone on the Exchange Floor 

provided certain conditions are met. 

Background 

The Commission originally approved 

the Pilot to be implemented for a sixmonth period 5 beginning no later than 

June 23, 2003.6 Since the inception of 

the Pilot, the Exchange has extended the 

Pilot eight times, with the current Pilot 

expiring on January 31, 2008.7 Exchange 


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