Federal Register / Vol. 73, No. 188 / Friday, September 26, 2008 / Notices 55885 

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

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

17 15 U.S.C. 78s(b)(2). 

18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 58311 

(August 5, 2008), 73 FR 47994. 

4NYSE Euronext, the ultimate parent company of 

the Exchange, has agreed to acquire the Amex 

pursuant to an Agreement and Plan of Merger, 

dated as of January 17, 2008. The members of the 

Amex voted to approve the transaction on June 17, 

2008. No vote of the NYSE Euronext shareholders 

is required. After the closing of the Merger, the 

Amex will be renamed NYSE Alternext US LLC. 

The Commission further believes that 

the waiver of certain listing fees in 

connection with transfers to the NYSE 

from NYSE Alternext US after the 

closing of the Merger is consistent with 

the Act. The Commission notes that an 

issuer seeking to transfer to the 

Exchange has already paid initial listing 

fees to another national securities 

exchange when it became a publicly 

traded company. The Commission also 

notes that the Exchange does not expect 

the loss of initial listing fees to be 

material and has stated that the fee 

waiver will not affect the Exchange’s 

ability to finance its regulatory 

activities. In addition, after the calendar 

year of the transfer of the issuer’s 

security, the Exchange would assess 

annual fees and listing of additional 

shares fees from these issuers. Further, 

the Exchange believes that there will be 

lower burdens and costs associated with 

its review of issuers transferring from 

another national securities exchange 

and in conducting ongoing compliance 

activities with respect to such 

companies. The Commission notes that 

NYSE has stated that review of transfers 

from NYSE Alternext US will be less 

costly than for an unaffiliated entity, as 

the same regulatory staff on Amex (that 

will have been absorbed by NYSE 

Regulation) will have conducted a 

substantial review of an Amex company 

that NYSE Regulation will be able to 

rely upon as a baseline in qualifying the 

company for listing on the Exchange 

and in conducting ongoing compliance 

activities with respect to any such 

company. Therefore, the Commission 

believes it is not inequitable or unfair to 

provide for a waiver of initial and 

annual fees for a limited period of time 

after the merger is consummated. 

Notwithstanding this, the Commission 

expects that a full and independent 

review of compliance with the listing 

standards will be conducted for any 

company seeking to take advantage of 

the fee waiver, just as for any company 

that applies for listing on the Exchange. 

Further, the Commission expects the 

Exchange to maintain its commitment to 

resources to its regulatory oversight of 

the listing process and its ongoing 

compliance review of listed companies 

under its regulatory program. 

Based on the above, the Commission 

believes the proposed listing fees and 

listing fee waivers do not constitute an 

inequitable allocation of reasonable 

dues, fees, and other charges under 

Section 6(b)(4) of the Act,15 do not 

permit unfair discrimination between 

issuers under Section 6(b)(5) of the 

Act,16 and are otherwise consistent with 

the requirements of the Act. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,17 that the 

proposed rule change (SR–NYSE–2008– 

56) is hereby approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–22587 Filed 9–25–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58601; File No. SR–NYSE– 

2008–74] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Order 

Approving Proposed Rule Change To 

Enable the Exchange To Waive Annual 

Listing Fees for Securities Transferring 

From the Amex or NYSE Arca, Inc. 

September 19, 2008. 

I. Introduction 

On August 4, 2008, the New York 

Stock Exchange LLC (‘‘NYSE’’ or 

‘‘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 

waive annual listing fees for securities 

transferring to NYSE from the American 

Stock Exchange LLC (‘‘Amex’’) or NYSE 

Arca, Inc. (‘‘NYSE Arca’’). The proposed 

rule change was published in the 

Federal Register on August 15, 2008.3

The Commission received no comments 

on the proposal. This order approves the 

proposed rule change. 

II. Description of the Proposal 

The Exchange proposes to amend 

Section 902.02 of the Manual to provide 

that, with retroactive effect from January 

1, 2008, for issuers that transfer their 

primary class of common stock from 

Amex to the Exchange, there shall be no 

annual fee for the remainder of the 

calendar year in which the transfer 

occurs for the transferred common stock 

and any other class of securities of a 

company listed on the Amex. This 

proposed rule change (i) is conditioned 

on the consummation of NYSE 

Euronext’s acquisition of the Amex (the 

‘‘Merger’’),4 (ii) will not take effect until 

the date of consummation of the Merger, 

and (iii) will be of no further effect if the 

closing of the Merger does not take 

place by March 31, 2009. The 

amendment also provides that 

companies transferring the listing of 

their primary class of common stock 

from NYSE Arca to the Exchange (with 

respect to which the Exchange already 

waives annual fees for the first part year, 

pursuant to Section 902.02 of the 

Manual) will not be charged the 

prorated annual fee in the first year of 

listing for any other class of securities 

that is transferred in connection with 

the transfer of the common stock. 

A. Securities Transferring From Amex 

The Exchange proposes to amend 

Section 902.02 of the Manual to grant 

companies transferring the listing of 

their primary class of common shares 

and any other class of securities to the 

Exchange from the Amex a waiver of the 

prorated annual listing fee that would 

normally be payable in connection with 

the first partial calendar year of listing 

on the Exchange. As noted in its 

proposal, the Exchange believes this is 

appropriate because companies 

transferring to the Exchange from the 

Amex will already have paid annual 

continued listing fees to the Amex for 

the calendar year in which they transfer. 

The Exchange further stated that since 

some companies may choose to transfer 

from the Amex to the Exchange in 

advance of the consummation of the 

acquisition, and such companies will be 

making their transfer decisions in 

expectation of the Merger, the Exchange 

believes that they should not be 

penalized for transferring before the 

closing date. Consequently, the 

Exchange believes that it is appropriate 

to apply the fee waiver retroactively to 

all companies that transfer to the 

Exchange from the Amex during the 

portion of the year in which the Merger 

is consummated prior to such 

consummation. 

In its proposal, the Exchange stated 

that this fee waiver is not unfairly 

discriminatory and does not constitute 

an inequitable allocation of fees, in 

particular because, after the Merger, 

NYSE Regulation, Inc. (‘‘NYSE 


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55886 Federal Register / Vol. 73, No. 188 / Friday, September 26, 2008 / Notices 

5 15 USC. 78f(b)(4). 

6 15 USC. 78f(b)(5). 

7 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rules’ impact on efficiency, competition, 

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

Regulation’’) will perform listed 

company regulation for both the 

Exchange and Amex, including a 

substantial review of companies upon 

original listing. Many of the regulatory 

staff who currently perform initial and 

continued listing reviews at the Amex 

will become employees of NYSE 

Regulation at the time of the Merger and 

will continue to perform the same 

duties with respect to Amex companies 

after the Merger. Companies transferring 

from Amex will be subjected to the 

same rigorous regulatory review as any 

other applicant for listing on the 

Exchange. However, the Exchange 

expects that, on average, the review of 

companies transferring from Amex to 

the Exchange will be less costly than the 

review of a transfer from an unaffiliated 

market, because the Amex listing 

regulatory staff that will have been 

absorbed by NYSE Regulation will 

already have performed a substantial 

review of any Amex listed company and 

NYSE Regulation will be able to rely on 

that prior work as a baseline in 

qualifying the company for listing on 

the Exchange and in conducting 

ongoing compliance activities with 

respect to those companies. 

The Exchange also believes that 

waiving, subject to consummation of the 

Merger, the prorated annual fees 

applicable to any Amex security 

transferred to the NYSE prior to the 

Merger is not unfairly discriminatory or 

an inequitable allocation of fees. In its 

proposal, the Exchange stated that the 

proposed fee waiver will not impact its 

ability to devote the same level of 

resources to its oversight of the 

companies that benefit from the waiver 

as it does for other listed companies or, 

more generally, impact its resource 

commitment to its regulatory oversight 

of the listing process or its regulatory 

programs. The Exchange notes that, after 

consummation of the Merger, the annual 

fee revenue paid by companies to the 

Amex prior to the Merger will be 

available to NYSE Regulation to finance 

its regulatory activities in relation to 

Amex-listed companies, regardless of 

whether such companies remain on 

NYSE Alternext US or have chosen to 

transfer their listing to the NYSE at 

some point during the year either before 

or after the Merger. The Exchange 

asserted that therefore collecting annual 

fees from companies upon transfer from 

the Amex to the NYSE would constitute 

a double billing of those companies for 

the regulatory expenses incurred by 

NYSE Regulation in relation to those 

companies during the year of transfer. 

B. Securities Transferring From NYSE 

Arca 

Section 902.02 of the Manual 

currently provides that any company 

transferring the listing of its primary 

class of common equity securities from 

NYSE Arca to the Exchange will not be 

charged any annual fees in connection 

with the first partial year of listing on 

the Exchange. The Exchange proposes to 

extend the NYSE Arca annual fee 

waiver to the prorated annual fees that 

would otherwise be payable with 

respect to any other class of securities 

that an issuer is transferring to the 

Exchange from NYSE Arca in 

conjunction with its transfer of its 

common stock, for the remainder of the 

calendar year in which the transfer 

occurs. The Exchange believes this 

waiver is appropriate in light of the fact 

that the Exchange and NYSE Arca share 

a common parent and, without the 

waiver, NYSE Euronext would be 

collecting two separate annual fees in 

relation to such securities. In addition, 

the same staff from NYSE Regulation are 

responsible for compliance review of all 

securities listed on both markets and 

their prior experience with any 

securities transferring from NYSE Arca 

will significantly lessen the burden and 

costs associated with continued 

compliance review of those securities 

once they have been transferred to the 

NYSE. Specifically, the Exchange 

believes that the proposed fee waiver 

will not impact its ability to devote the 

same level of resources to its oversight 

of the companies that benefit from the 

waiver as it does for other listed 

companies or, more generally, impact its 

resource commitment to its regulatory 

oversight of the listing process or its 

regulatory programs. 

III. Discussion 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange and, in particular, the 

requirements of Section 6(b) of the Act 

and the rules and regulations 

thereunder. Specifically, the 

Commission finds that the proposal is 

consistent with Sections 6(b)(4) 5 and 

6(b)(5) of the Act,6 which require that an 

exchange have rules that provide for the 

equitable allocation of reasonable dues, 

fees, and other charges among its 

members and other persons using its 

facilities, and are designed, among other 

things, 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, to protect 

investors and the public interest, and to 

not permit unfair discrimination 

between customers, issuers, brokers, or 

dealers.7

National securities exchanges 

traditionally assess annual listing fees 

on listed companies at the beginning of 

the calendar year. When a company 

transfers to another marketplace, such 

annual fees are typically pro-rated by 

the new market for the remainder of the 

calendar year. Annual fees aid a listed 

market in, among other things, 

conducting its regulatory 

responsibilities to ensure compliance by 

listed companies with continued listing 

standards and other regulatory 

requirements. The Commission has 

carefully examined the fee waiver in 

light of NYSE’s ongoing regulatory 

responsibilities as to the transferred 

companies and, for the reasons set forth 

below, has determined that the 

proposed limited annual fee waiver is 

consistent with the Act. 

The Commission notes that an Amex 

or NYSE Arca issuer seeking to transfer 

to the Exchange has already paid annual 

continued listing fees to another 

national securities exchange for the 

calendar year in which it transferred. 

Further, the Commission recognizes that 

subsequent to the consummation of the 

Merger, both Amex as NYSE Alternext 

US, NYSE Arca, and NYSE will be 

under the same common ownership. 

The Commission also notes that the 

Exchange anticipates the review of 

securities transferring from Amex to be 

less costly than the review of a transfer 

from an unaffiliated market, because 

Amex listing regulatory staff that will be 

part of NYSE Regulation will continue 

to perform both initial and continued 

listing reviews. In addition, the 

Commission notes that the same staff 

from NYSE Regulation are responsible 

for compliance review of all securities 

listed on both NYSE and NYSE Arca, 

and the Exchange asserted that this will 

significantly lessen the burden and costs 

associated with continued compliance 

review of NYSE Arca transfers. 

The Commission further believes that 

the application of the waiver to 

companies transferring to the NYSE 

from Amex prior to the Merger, 

occurring only upon consummation of 

the Merger, is not unfairly 

discriminatory and does not constitute 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 73, No. 188 / Friday, September 26, 2008 / Notices 55887 

8 15 U.S.C. 78f(b)(4). 

9 15 U.S.C. 78f(b)(5). 

10 15 U.S.C. 78s(b)(2). 

11 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. 

an inequitable allocation of fees. The 

Commission notes that the Exchange 

has represented that after 

consummation of the Merger, the annual 

fee revenue paid by companies to the 

Amex prior to the Merger will be 

available to NYSE Regulation to finance 

its regulatory activities in relation to 

Amex-listed companies, regardless of 

whether such companies remain on 

NYSE Alternext US or have chosen to 

transfer their listing to the NYSE at 

some point during the year either before 

or after the Merger. Since the retroactive 

effect is conditioned on consummation 

of the Merger, the fee waiver recognizes 

that these regulatory efficiencies will 

only occur upon that event. 

The Commission also notes that the 

fee waiver is for a limited time, 

applicable to the remainder of the 

calendar year in which the transfer 

occurs. Annual fees for both Amex and 

NYSE Arca transfers will continue to be 

assessed after the initial pro-rated 

annual fee waiver. The limited period of 

the fee waiver helps to ensure that that 

NYSE will have adequate fees to 

continue compliance and oversight of 

its listing program. 

In summary, based on the reasons set 

forth above, including NYSE’s 

assertions that (i) the same regulatory 

staff on both Amex (that will have been 

absorbed by NYSE Regulation) and 

NYSE Regulation will have conducted a 

substantial review of an Amex or NYSE 

Arca company that NYSE Regulation 

will be able to rely upon as a baseline 

in qualifying the company for both 

listing on the Exchange and in 

conducting ongoing compliance 

activities with respect to any such 

company; and (ii) the retroactive effect 

for Amex transfers will only occur if the 

Merger is consummated, the 

Commission believes it is not 

inequitable or unfair to provide for a 

waiver of annual fees for a limited 

period of time. The Commission 

expects, and the Exchange has 

represented, that a rigorous and 

independent review of compliance with 

the listing standards will be conducted 

for any company seeking to take 

advantage of the fee waiver, just as for 

any company that lists on the Exchange. 

In addition, the Commission expects the 

Exchange to maintain its commitment of 

resources to its regulatory oversight of 

the listing process and its ongoing 

compliance review of listed companies 

under its regulatory program. 

Based on the above, the Commission 

believes the proposed fee waiver does 

not constitute an inequitable allocation 

of reasonable dues, fees, and other 

charges under Section 6(b)(4) of the 

Act,8 does not permit unfair 

discrimination between issuers under 

Section 6(b)(5) of the Act,9 and is 

otherwise consistent with the 

requirements of the Act. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,10 that the 

proposed rule change (SR–NYSE–2008– 

74) is hereby approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–22658 Filed 9–25–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58596; File No. SR– 

NYSEArca–2008–98] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NYSE 

Arca, Inc., Amending NYSE Arca 

Equities Rule 7.35 Governing Auctions 

September 19, 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 15, 2008, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ 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. 

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 7.35(c) and (e) 

to permit the Exchange to conduct a 

Market Order Auction and a Closing 

Auction in all exchange listed 

‘‘Derivative Securities Products’’ as 

defined by NYSE Arca Equities Rule 

7.34(a)(4)(A). 

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 Exchange proposes to amend 

NYSE Arca Equities Rule 7.35(c) and (e) 

to permit the Exchange to conduct a 

Market Order Auction and a Closing 

Auction in all exchange listed 

‘‘Derivative Securities Products’’ as 

defined by NYSE Arca Equities Rule 

7.34(a)(4)(A). 

Currently NYSE Arca Equities Rule 

7.35(c) states that the Exchange will 

conduct a Market Order Auction in (i) 

exchange-listed securities for which the 

Corporation is the primary market; (ii) 

all exchange-listed exchange traded 

funds; and (iii) NYSE listed securities 

subject to a sub-penny trading 

condition. Similarly, NYSE Arca 

Equities Rule 7.35(e) states that the 

Exchange will conduct a Closing 

Auction in (i) exchange-listed securities 

for which the Corporation is the primary 

market; (ii) all exchange-listed exchange 

traded funds; and (iii) NYSE listed 

securities subject to a sub-penny trading 

condition. The Exchange proposes to 

expand subpart (ii) in both Rules by 

replacing the term ‘‘exchange-listed 

exchange traded funds’’ with the term 

‘‘exchange-listed Derivative Securities 

Products’’ as that term is defined in 

NYSE Arca Equities Rule 7.34(a)(4)(A). 

The Exchange believes this rule 

change will foster increased liquidity by 

expanding the type of securities eligible 

for Market Order and Closing auctions. 

This proposed amendment is also 

consistent with Rules 4752 and 4754 of 

the Nasdaq Stock Market, L.L.C. 

(‘‘Nasdaq’’), which do not limit the 

securities or products that may be 

traded in the opening and closing 

auctions. 

2. Statutory Basis 

The proposed rule change is 

consistent with section 6(b) of the Act 


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