26912 Federal Register / Vol. 74, No. 106 / Thursday, June 4, 2009 / Notices 

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. 51813 

(June 9, 2005), 70 FR 35484 (June 20, 2005) (SR– 

NYSE–2004–20). The Assets and Equity Test set 

forth in Section 102.01C(IV) and the NYSE Arca 

Transfer Standard set forth in Section 102.01C(V) 

were adopted subsequent to this amendment. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59996; File No. SR–NYSE– 

2009–48] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by New York 

Stock Exchange LLC Amending the 

Exchange’s Continued Listing 

Standards on a Pilot Program Basis 

May 28, 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 May 12, 

2009, New York Stock Exchange LLC 

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

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. 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 

certain of the continued listing 

requirements in Section 802.01B of the 

Exchange’s Listed Company Manual 

(the ‘‘Manual’’) on a pilot program basis 

(the ‘‘Pilot Program’’) through October 

31, 2009. 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 

Section 802.01B(I) of the Manual 

provides that any company that 

qualified to list under the Earnings Test 

set out in Section 102.01C(I) or in 

Section 103.01B(I) (in the case of foreign 

private issuers) or pursuant to the 

requirements set forth under the Assets 

and Equity Test set forth in Section 

102.01C(IV) or the ‘‘Initial Listing 

Standard for Companies Transferring 

from NYSE Arca’’ set forth in Section 

102.01C(V) (the ‘‘NYSE Arca Transfer 

Standard’’) will be considered to be 

below compliance standards if average 

global market capitalization over a 

consecutive 30 trading-day period is 

less than $75 million and, at the same 

time, total stockholders’ equity is less 

than $75 million. The Exchange 

proposes to amend this requirement on 

a Pilot Program basis through October 

31, 2009, to provide that companies that 

listed under the initial listing standards 

set forth in the immediately preceding 

sentence will only be considered to be 

below compliance standards if average 

global market capitalization over a 

consecutive 30 trading-day period is 

less than $50 million and, at the same 

time, total stockholders’ equity is less 

than $50 million. For companies listed 

under the Earnings Test, this rule 

change returns continued listing 

requirements to those in place prior to 

the adoption of the current requirements 

on June 9, 2005.4 Companies that are 

below compliance with the current 

continued listing requirements will be 

deemed to have returned to compliance 

at the time of effectiveness of this filing, 

unless they are below the levels 

established under the Pilot Program. 

In 2005, when the Exchange 

effectively amended its continued 

listing standards for companies that 

listed under the Earnings test, there 

were very few companies that were 

below the requirements at that time and 

there was an expectation that very few 

companies would fall below compliance 

with those requirements for the then 

foreseeable future in light of relatively 

stable market and economic conditions. 

As such, the heightened continued 

listing standards were considered a 

reasonable response to the financial 

environment at that time and did not 

lead to any meaningful increase in the 

number of companies that fell below 

compliance. Conditions in the capital 

markets have changed considerably over 

the last year, with a dramatic decline in 

stock prices and market capitalizations 

of many listed companies and an 

increase in market volatility. As such, a 

far greater number of companies have 

fallen below the continued listing 

standards in the last eighteen months 

than at any time since the effective date 

of the amendment to the continued 

listing standards in 2005. Many 

companies have fallen below $75 

million in total market capitalization 

and it seems likely that the stock prices 

of many of these companies will have 

difficulty returning to their prerecession level for a considerable period 

of time. Consequently, the Exchange 

believes that a $50 million market 

capitalization requirement is more 

appropriate under current market 

conditions than the current $75 million 

requirement. 

Similarly, a large number of listed 

companies have recorded—or are 

expected to soon record—significant 

write downs in the value of their assets 

or significant impairment charges. It is 

reasonable to assume that it will take 

many of these companies a long time to 

raise their stockholders’ equity back to 

pre-recession levels. The Exchange 

notes that companies that list under the 

Earnings Test and the NYSE Arca 

Transfer Standard are not subject to any 

stockholders’ equity requirement at the 

time of initial listing, while companies 

that list under the Assets and Equity 

Test must demonstrate $50 million in 

stockholders’ equity. Yet, companies 

that listed under any of these standards 

that have suffered a significant 

diminution in market capitalization are 

required to have $75 million in 

stockholders’ equity to avoid becoming 

noncompliant or to cure an event of 

noncompliance, notwithstanding the 

fact that they were required to 

demonstrate a lower level of 

stockholders’ equity—or none at all—at 

the time of original listing. In light of 

that fact, the Exchange believes that a 

stockholders’ equity requirement of $50 

million is more appropriate as an 

element in its continued listing standard 

under current market conditions. 

Because the continued listing 

standards proposed under the Pilot 

Program are the same as those that were 

previously in place for companies that 

listed under the Earnings Test, the 

Exchange has considerable experience 

with the continued listing of companies 

that have continued to trade on the 

Exchange with global market 

capitalization and stockholders’ equity 

Federal Register / Vol. 74, No. 106 / Thursday, June 4, 2009 / Notices 26913 

5 17 CFR 240.a51–1(a). The Commission notes 

that the listing standards of the Exchange are no 

longer included in the ‘‘grandfather’’ exception. See 

Securities Exchange Act Release No. 57785 (May 6, 

2008), 73 FR 27597 (May 13, 2008) (SR–NYSE– 

2008–17). As a result of losing this exception, the 

Exchange is required to satisfy the requirements of 

Exchange Act Rule 3a51–1(a)(2). The Commission 

believes that the continued listing standards to be 

adopted under the Pilot Program meet the 

requirements established in Exchange Act Rule 

3a51–1(a)(2)(ii) in that they are reasonably related 

to the initial listing standards set forth in paragraph 

(a)(2)(i) of Exchange Act Rule 3a51–1. The 

Commission notes that the $50 million in total 

stockholders’ equity requirement contained in the 

Pilot Program exceeds the $5 million contained in 

Exchange Act Rule 3a51–1(a)(2)(i)(A). The 

Commission further notes that the $50 million in 

average global market capitalization over a 30 

trading-day period is reasonably related to the $50 

million in market value of listed securities for 90 

consecutive days prior to initial listing contained in 

Exchange Act Rule 3a51–1(a)(2)(i)(A). 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(5). 

8 15 U.S.C. 78s(b)(3)(A). 

9 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. 

10 17 CFR 240.19b–4(f)(6). 

11 17 CFR 240.19b–4(f)(6)(iii). 

12See Securities Exchange Act Release No. 51813 

(June 9, 2005), 70 FR 35484 (June 20, 2005) (SR– 

NYSE–2004–20). 

each below $75 million, but without 

triggering the continued listing standard 

proposed under the Pilot Program. 

Based on that experience, the Exchange 

believes that companies that exceed the 

proposed continued listing standard are 

suitable for continued listing on the 

Exchange. The Exchange notes that (i) 

under the Earnings Test, companies can 

list on the basis of positive sustained 

earnings history and a $60 million IPO 

public float ($100 million for a transfer), 

(ii) under the Assets and Equity Test, 

companies can list on the basis of $150 

million in global market capitalization, 

$75 million in total assets and $50 

million in total stockholders equity and 

a $60 million IPO public float ($100 

million for a transfer) and (iii) under the 

NYSE Arca Transfer Standard, 

companies can list on the basis of $75 

million in global market capitalization 

and $20 million in aggregate market 

value of publicly-held shares, with no 

minimum requirement as to 

stockholders’ equity. Any significant 

diminution in the market capitalization 

of a company listing under any of these 

standards that did not have significant 

stockholders’ equity could quickly lead 

to such company being below 

compliance. The Exchange believes that 

continued listing standards need to be 

established at a level that appropriately 

corresponds to initial listing standards 

in the context of current market and 

economic conditions, so that companies 

do not move rapidly from initial listing 

qualification to being below 

compliance. The Exchange believes that 

the proposed continued listing 

standards under the Pilot Program will 

achieve this objective, given the current 

financial environment. 

The Exchange notes that the 

continued listing standards to be 

adopted under the Pilot Program are 

higher than those of any other national 

securities exchange. Consequently, the 

Exchange believes that the Pilot 

Program is consistent with the 

protection of investors and the public 

interest and does not raise any novel 

regulatory issues. In addition, because 

the continued listing standards under 

the Pilot Program are the same as those 

that were in place on January 8, 2004, 

the adoption of the Pilot Program does 

not affect the status of NYSE listed 

securities under Exchange Act Rule 

3a51–1(a) (the ‘‘Penny Stock Rule’’).5

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) 6 of the Act, in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act,7 in particular in that it is 

designed 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 

Exchange believes that the proposed 

amendment is consistent with the 

investor protection objectives of the Act 

in that the proposed continued listing 

standards are set at a high enough level 

that only companies that are suitable for 

continued listing on the Exchange will 

exceed the requirements of the 

continued listing standards. 

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 

Because 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, the proposed rule change has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 8 and Rule 19b– 

4(f)(6) thereunder.9

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 10 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6)(iii) 11

permits the Commission to 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. 

The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest 

because it will allow NYSE to 

immediately implement, on a pilot 

basis, new continued listing standards. 

The Commission notes that the new 

continued listing standards will apply 

to companies qualified to list under: (i) 

the Earnings Test set out in Section 

102.01C(I) or in Section 103.01B(I); (ii) 

the Assets and Equity Test set forth in 

Section 102.01C(IV); or (iii) the ‘‘Initial 

Listing Standards for Companies 

Transferring from NYSE Arca’’ as set 

forth in Section 102.01C(V). The 

Commission also notes that the 

standards being adopted under the Pilot 

Program are identical, for those 

companies qualifying under the 

Earnings Test, to those in effect on the 

Exchange prior to the adoption of the 

current standards in 2005.12 The 

Commission further notes that the 

continued listing standards proposed 

under the Pilot Program are higher than 

similar standards currently in place on 

other exchanges. In addition, the 

Commission notes that these continued 

listing standards are being adopted on a 

pilot basis and absent a proposed rule 

change by NYSE to either extend the 

pilot period or make these changes 

permanent, the new listing standards 

will expire after October 31, 2009. The 

pilot period will allow the NYSE and 

26914 Federal Register / Vol. 74, No. 106 / Thursday, June 4, 2009 / Notices 

13For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. 15 U.S.C. 78c(f). 14 17 CFR 200.30–3(a)(12). 

the Commission to assess how the lower 

standards have worked should the 

NYSE wish to extend the pilot. For 

these reasons, the Commission 

designates that the proposed rule 

change become operative immediately 

upon filing.13

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–NYSE–2009–48 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2009–48. 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–NYSE– 

2009–48 and should be submitted on or 

before June 25, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–12998 Filed 6–3–09; 8:45 am] 

BILLING CODE 8010–01–P 

DEPARTMENT OF STATE 

[Public Notice 6651] 

U.S. Department of State Advisory 

Committee on Private International 

Law: Working Group I of the United 

Nations Commission on International 

Trade Law (UNCITRAL) Model Law on 

Procurement of Goods, Construction 

and Services 

A study group of the Advisory 

Committee reviews and provides 

comments on an initiative by the United 

Nations Commission for International 

Trade Law (UNCITRAL) to revise the 

1994 UNCITRAL Model Law on 

Procurement of Goods, Construction 

and Services (Model Procurement Law), 

and it’s Guide to Enactment, available at 

http://www.uncitral.org/uncitral/en/ 

uncitral_texts/ 

procurement_infrastructure/ 

1994Model.html. The UNCITRAL Model 

Procurement Law is not intended to be 

applied by the United States, but it is 

cited and relied upon in many other 

nations as a model procurement code. 

The UNCITRAL Working Group, 

tasked with making recommendations 

for an updated model law, has focused 

on new practices and technological 

developments; in particular, those 

resulting from the use of electronic 

communications in public procurement. 

These topics have included the use of 

electronic means of communication in 

the procurement process, publication of 

procurement-related information, the 

procurement technique known as the 

electronic reverse auction, abnormally 

low tenders, and the method of 

contracting known as framework 

agreements. The Working Group also 

decided that the Model Law and the 

Guide should take into account the 

question of conflicts of interest. In this 

regard, the United Nations Convention 

Against Corruption, which entered into 

force in December 2005, specifically 

calls for anti-corruption measures in 

procurement to address conflicts of 

interest. See also Report of Working 

Group I (Procurement A/CN.9/668) on 

the work of its fifteenth session (New 

York, 2–6 February 2009) available at 

http://www.uncitral.org/uncitral/en/ 

commission/working_groups/ 

1Procurement.html. 

It is possible that a revised model 

procurement law will be presented for 

final review by UNCITRAL in 2009. The 

issue has been placed on the agenda of 

the Commission for its June 29–July 17 

session in Vienna. The UNCITRAL 

Working Group has recommended that 

the Model Law be considered for 

adoption by UNCITRAL in advance of 

the completion of an updated Guide to 

Enactment. UNCITRAL has also 

scheduled a Working Group meeting 

from May 26th through 29th, 2009, to 

work on the recommendations. 

In order to assist the U.S. Delegation 

at the Annual UNCITRAL Commission 

meeting in July, a public meeting to 

review and discuss the current status of 

the proposed reforms will be held on 

June 17, 2009. 

Time and Place: The public meeting 

will take place at The George 

Washington University Law School, 

Dean Conference room, 2000 H Street, 

NW., Washington, DC on June 17, 2009 

from 10 a.m. to 12 noon EDT. 

Public Participation: Comments may 

be submitted prior to or after the 

meeting to the Office of Private 

International Law, U.S. Department of 

State, 2430 E Street, NW., Washington, 

DC 20037–2851, attn: Michael Dennis, 

or by facsimile to 202–776–8482, or by 

electronic e-mail to 

DennisMJ@State.gov. Persons wishing to 

attend the meeting should call Trisha 

Smeltzer at 202–776–8423 or contact by 

e-mail at SmeltzerTK@state.gov. Any 

requests for reasonable accommodations 

should be made as soon as possible; 

requests made after June 10th will be 

considered but might not be possible to 

fill. 

Dated: May 20, 2009. 

Michael Dennis, 

Attorney-Adviser, Office of Private 

International Law, Department of State. 

[FR Doc. E9–12944 Filed 6–3–09; 8:45 am] 

BILLING CODE 7410–08–P