54444 Federal Register / Vol. 73, No. 183 / Friday, September 19, 2008 / Notices 

9See Section II, Description of the Proposal, 

supra. 

10See also note 8 supra. The Commission notes 

that once listed, the company would have to 

comply with the continued listing standards like 

other companies. The NYSE has not proposed any 

changes to the continued listing standards for 

companies listing under the provisions approved 

herein. See Section 802 of the Manual. 

11 15 U.S.C. 78s(b)(2). 

12 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. 

4See Securities Exchange Act Release No. 58533 

(September 12, 2008) (SR–FINRA–2008–036). 

recognizing these limitations, the 

Commission agrees with the Exchange 

that consideration of both of these 

values should provide the Exchange 

with an estimation of a company’s 

market value that supports listing the 

company on the Exchange. In addition, 

the proposed rule is designed to ensure 

that the Valuation is reliable by 

providing that the Valuation must be 

provided by an entity that has 

significant experience and demonstrable 

competence in providing valuations of 

companies, and must be of a recent date 

as of the time of the approval of the 

company for listing. Further, by 

assuming a market value equal to the 

lesser of the Valuation and a value based 

on the most recent Private Placement 

Market trading, the Exchange will be 

using the more conservative estimate of 

a company’s market value. 

In addition, the Commission notes 

that companies listing under this 

alternative provision will be required to 

meet higher market value standards. 

Specifically, companies will have to 

meet the $100 million transfer market 

value requirement, rather than the $60 

million IPO requirement of Section 

102.01B. Further, companies will be 

required to meet global market 

capitalization standards in Section 

102.01C of the Manual that are 20% 

higher than the normal standards.9

The Commission notes that it expects 

the vast majority of companies to 

continue to list in connection with a 

firm commitment underwritten IPO, 

upon transfer from another market, or 

pursuant to a spin-off, and that this 

proposed alternative standard will be 

used by the Exchange at its discretion. 

In particular, in accordance with the 

terms of the proposed rule, the 

Exchange will apply this standard only 

for the very narrow category of 

companies that are seeking to list their 

common equity securities on the 

Exchange without an underwritten 

offering at the time of effectiveness of a 

registration statement registering only 

the resale of shares sold by the company 

in earlier private placements. Further, 

the Commission expects the Exchange 

to utilize its discretion only after 

thorough consideration and evaluation 

of the specific company and all relevant 

factors. Specifically, the proposed rule 

change requires the Exchange to 

consider the appropriateness of relying 

on Private Placement Market trading in 

light of the price trends for the stock 

over a period of several months and 

only rely on a Private Placement Market 

price if consistent with a sustained 

history evidencing a market value in 

excess of the listing requirement. In 

relying on such Private Placement 

Market, the Commission expects the 

NYSE to consider the trading 

characteristics of the stock, including its 

trading volume and price volatility over 

a sustained period of time. In addition, 

in relying on the Valuation, the 

Exchange must consider any market 

factors or factors particular to the listing 

applicant that would cause concern that 

the value of the company had 

diminished since the date of Valuation 

and continue to monitor the company 

and the appropriateness of relying on 

the Valuation up until the time of 

listing. The Commission expects that 

where these factors indicate that the 

value calculated may not be an accurate 

estimation of a company’s market value, 

the Exchange will use its discretion to 

determine not to list such company 

pursuant to the proposed provisions. In 

general, the Commission expects that 

the Exchange will deny listing to any 

company seeking to list pursuant to the 

proposed rule change if the Exchange 

determines that the listing of any such 

company is not in the interests of the 

Exchange or the public interest. 

The Commission also notes that 

companies listing pursuant to the new 

proposed provision will still be required 

to meet the IPO distribution 

requirements of Section 102.01A of the 

Manual, i.e., that the company have 400 

beneficial holders of round lots of 100 

shares and 1,100,000 publicly held 

shares. The Commission believes that 

these existing provisions will continue 

to help ensure that the company has the 

requisite liquidity for listing on the 

Exchange.10 The Exchange’s reliance on 

the transfer agent for assurance that the 

holder requirement is met, and on the 

disclosure in the company’s registration 

statement for assurance that the publicly 

held shares requirement is met, will 

ensure that these important liquidity 

requirements are verified before a 

company may qualify for listing. 

For the reasons set forth above, the 

Commission finds that the proposed 

rule change is consistent with the Act. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,11 that the 

proposed rule change (SR–NYSE–2008– 

68) be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–21944 Filed 9–18–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58549; File No. SR–NYSE– 

2008–80] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change and 

Amendment No. 1 Thereto Conforming 

Certain NYSE Rules to Changes to 

NYSE Incorporated Rules Recently 

Filed by the Financial Industry 

Regulatory Authority, Inc. 

September 15, 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 

September 5, 2008, 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 self-regulatory organization. On 

September 11, 2008, the Exchange filed 

Amendment No. 1. 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 to amend 

certain New York Stock Exchange 

(‘‘NYSE’’ or the ‘‘Exchange’’) Rules to 

conform with proposed amendments to 

certain NYSE Incorporated Rules 

(defined below) recently filed by the 

Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) 4 to reduce 

regulatory duplication and relieve firms 

that are members of both FINRA and the 

Exchange of conflicting or unnecessary 

regulatory burdens in the interim period 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 73, No. 183 / Friday, September 19, 2008 / Notices 54445 

5Pursuant to Rule 17d–2 under the Securities 

Exchange Act of 1934, as amended (the ‘‘Exchange 

Act’’), NYSE, NYSE Regulation, Inc., and NASD 

entered into an agreement (the ‘‘Agreement’’) to 

reduce regulatory duplication for firms that are 

members of FINRA and also members of NYSE on 

or after July 30, 2007 (‘‘Dual Members’’), by 

allocating to FINRA certain regulatory 

responsibilities for selected NYSE rules. The 

Agreement includes a list of all of those NYSE and 

NASD rules for which FINRA has assumed 

regulatory responsibilities (‘‘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 those 

NYSE rules that FINRA has incorporated into its 

rulebook (the ‘‘NYSE Incorporated 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; File No. 

SR–NASD–2007–054). Paragraph 2(b) of the 17d–2 

Agreement sets forth procedures regarding 

proposed changes by either NYSE or FINRA to the 

substance of any of the Common Rules. 

6For more detail, see Securities Exchange Act 

Release No. 58103 (July 3, 2008), 73 FR 40403 (July 

14, 2008) (SR–FINRA–2008–036). 

7The Exchange recognizes that the proposed 

amendments to NYSE Rules 404, 412, 446 and 

345(a) will remove these Rules from their status as 

Common Rules under the 17d–2 Agreement. 

Notwithstanding, FINRA will continue to provide 

regulatory services to the Exchange with respect to 

these Rules pursuant to the existing Regulatory 

Services Agreement, dated July 30, 2007, by and 

among FINRA, the Exchange and NYSE Regulation, 

Inc. 

8 15 U.S.C. 78f(b)(5). 

9 15 U.S.C. 78s(b)(3)(A)(iii). 

10 17 CFR 240.19b–4(f)(6). 

prior to completion of a consolidated 

FINRA rulebook. 

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, NASD and NYSE 

Regulation, Inc. consolidated their 

member firm regulation operations into 

a combined organization, FINRA.5 As 

noted above, pursuant to its new 

regulatory responsibilities, FINRA 

recently filed proposed amendments to 

certain NYSE Incorporated Rules (and 

applicable Rule Interpretations). The 

NYSE hereby proposes to amend its 

version of these same rules to conform 

to the proposed changes filed by FINRA. 

The amendments proposed by FINRA 

fall into the following categories: 6

• Replacing the term ‘‘allied member’’ 

with the newly defined category of 

‘‘principal executive’’, and making 

corresponding technical changes as 

needed, in NYSE Incorporated Rules 2, 

2A, 311–313, 321, 342, 345, 345A, 346, 

351–354, 401, 405, 407–410, 414, 424, 

431, 435, 440F, 440G, 477, 704, 705, 

723, 724 and 791. 

• Repositioning and consolidating 

certain NYSE Incorporated Rules. In 

order to consolidate all ‘‘Buy-In’’ 

requirements and procedures into one 

rule, FINRA proposes to reposition 

NYSE Incorporated Rule 283 and 285– 

290 as supplementary material in NYSE 

Incorporated Rule 282, and to make 

conforming changes to NYSE 

Incorporated Rule 134. FINRA also 

proposes to move certain provisions of 

NYSE Incorporated Rule 407 to 

Common Rule 346. 

• Deleting NYSE Incorporated Rules 

that are obsolete or no longer applicable, 

including Rules 311(h) and 436. 

• Eliminating certain provisions of 

NYSE Incorporated Rules that do not 

have a corresponding NASD equivalent, 

and therefore are deemed unnecessary 

rules, including the training 

requirements and registration for 

‘‘securities trader’’ under Rule 345, Rule 

345(b) and Rule 346(c). 

• Additional amendments to further 

harmonize certain NYSE and NASD 

Rules, including NYSE Incorporated 

Rules 342.13(a), 346(e), 346.10, 351.13, 

352(c) and (d), and 408(a). In order to 

further harmonize NYSE Incorporated 

Rule 282 with NASD’s 11000 Rule 

Series, FINRA also proposes to add as 

supplementary material the substance of 

NYSE Rule 140 and provisions from 

NASD Rule 11810. 

• Deleting NYSE Incorporated Rules 

that are substantively duplicative of 

existing NASD Rules and procedures, 

including Rules 404, 412 and 446. 

Similarly, FINRA proposes limiting 

application of NYSE Incorporated Rule 

345(a) to securities lending 

representatives and supervisors only, 

since registered representatives and 

their supervisors are already addressed 

by NASD Rule 1031. For these 

particular proposed changes, the 

Exchange proposes to amend NYSE 

Rules 404, 412, 446 and 345(a) to 

incorporate by reference the applicable 

NASD Rules that will be applied by 

FINRA going forward.7

The Exchange proposes to amend its 

version of the above-referenced NYSE 

Incorporated Rules to conform to 

FINRA’s proposed rule changes. The 

Exchange proposes that the operative 

date of the proposed rule changes be the 

same as the operative date of FINRA’s 

proposed amendments to the NYSE 

Incorporated Rules and Rule 

Interpretations. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with and 

furthers the objectives of Section 

6(b)(5) 8 of the Act, in that it is designed 

to prevent fraudulent and manipulative 

practices, to promote just and equitable 

principles of trade, to remove 

impediments to, and perfect the 

mechanisms 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 rule changes will provide 

greater harmonization between NYSE 

Incorporated Rules and NASD Rules of 

similar purpose, resulting in less 

burdensome and more efficient 

regulatory compliance for their 

members. Where proposed amendments 

do not entirely conform to existing 

NYSE Incorporated or NASD Rules or 

address a provision without a direct 

counterpart, the Exchange believes the 

standards the proposed amendments 

establish further the objectives of the 

Exchange Act by providing greater 

regulatory clarity and relieving 

unnecessary regulatory burdens in the 

interim period until a Consolidated 

Rulebook is completed. 

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 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 9 and Rule 

19b–4(f)(6) thereunder.10 Because the 


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54446 Federal Register / Vol. 73, No. 183 / Friday, September 19, 2008 / Notices 

11 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6)(iii) requires the Exchange to give the 

Commission written notice of the Exchange’s 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 the pre-filing requirement. 

12 17 CFR 240.19b–4(f)(6). 

13 17 CFR 240.19b–4(f)(6)(iii). 

14For 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). 

15 15 U.S.C. 78s(b)(3)(C). For purposes of 

calculating the 60-day period within which the 

Commission may summarily abrogate the proposal, 

the Commission considers the period to commence 

on September 11, 2008, the date on which the 

Exchange submitted Amendment No. 1. 

16 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. 80a–1. 

proposed rule change does not: (i) 

Significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) become operative 

prior to 30 days from the date on which 

it was filed, 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 and Rule 19b–4(f)(6)(iii) 

thereunder.11

A proposed rule change filed under 

Rule 19b–4(f)(6) 12 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii), 13 the 

Commission may 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 so that the proposed 

rule change may become operative 

pursuant to Section 19(b)(3)(A) and Rule 

19b–4(f)(6) at the same time that 

FINRA’s proposed amendments become 

operative. 

The purpose of the proposed rule 

change is to conform NYSE Rules to 

FINRA’s proposed amendments to 

certain NYSE Incorporated Rules, in 

furtherance of the consolidation of the 

member firm regulations functions of 

NYSE Regulation and FINRA. NYSE 

requests that the operative date of the 

proposed rule change be the same as the 

operative date of FINRA’s proposal in 

order to ensure that the NYSE Rules 

maintain their status as Common Rules 

under the 17d–2 Agreement. As 

provided in paragraph 2(b) of the 

Agreement, FINRA and NYSE will, 

absent a disagreement about the 

substance of a proposed rule change to 

one of the Common Rules, promptly 

propose conforming changes to ensure 

that such rules continue to be Common 

Rules under the Agreement. For this 

reason, the Commission designates that 

the proposed rule change has become 

operative as of September 12, 2008.14

At any time within 60 days of the 

filing of the 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 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act.15

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–2008–80 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, Station Place, 100 F Street, 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2008–80. 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 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 publicly available. All 

submissions should refer to File 

Number SR–NYSE–2008–80 and should 

be submitted on or before October 10, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–21948 Filed 9–18–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58518; File No. SR– 

NYSEArca–2008–94] 

Self-Regulatory Organizations; Notice 

of Filing of Proposed Rule Change by 

NYSE Arca, Inc. Amending NYSE Arca 

Equities Rules 5.1(b)(14) and 5.2(j)(2) 

To Permit the Listing of ELNs That Are 

Linked to Securities Issued by 

Companies Registered Under the 

Investment Company Act of 1940 

Date: September 11, 2008. 

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

Securities Exchange Act of 1934 1 (the 

‘‘Exchange Act’’) and Rule 19b–4 

thereunder,2 notice is hereby given that 

on August 25, 2008, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ or ‘‘Exchange’’), through 

its wholly owned subsidiary, NYSE 

Arca Equities, Inc. (‘‘NYSE Arca 

Equities’’), 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 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 

The Exchange proposes to amend 

NYSE Arca Equities Rule 5.1(b)(14), the 

Exchange’s definition of Equity-Linked 

Notes (‘‘ELNs’’), and NYSE Arca 

Equities Rule 5.2(j)(2), the Exchange’s 

listing standards for ELNs, to permit the 

listing of ELNs that are linked to 

securities that are issued by companies 

registered under the Investment 

Company Act of 1940 (‘‘1940 Act’’) 3


jlentini on PROD1PC65 with NOTICES