Document ID: SEC-2010-0387-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2010-03-12T05:00Z

[Federal Register: March 12, 2010 (Volume 75, Number 48)]
[Notices]               
[Page 11970-11972]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12mr10-175]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61657; File No. SR-NYSE-2010-15]

 
Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by New York Stock Exchange LLC Making Permanent the Exchange's 
Pilot Program With Respect to Its Continued Listing Standards

March 5, 2010.
    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 February 26, 2010, New York Stock Exchange LLC (``NYSE'' 
or the ``Exchange'') filed

[[Page 11971]]

with the Securities and Exchange Commission (the ``Commission'') the 
proposed rule change as described in Items I, II, and III 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.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to make permanent an amendment to the 
continued listing requirements in Section 802.01B of the Exchange's 
Listed Company Manual (the ``Manual'') that is currently in effect on a 
pilot program basis (the ``Pilot Program''). 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Prior to the adoption of the Pilot Program,\4\ Section 802.01B(I) 
of the Manual provided 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'' (the ``NYSE Arca Transfer Standard'') set 
forth in Section 102.01(C)(V) (the NYSE Arca Transfer Standard expired 
by its terms on August 31, 2009) was considered to be below compliance 
standards if such company's average global market capitalization over a 
consecutive 30 trading-day period was less than $75 million and, at the 
same time, total stockholders' equity was less than $75 million. Under 
the Pilot Program, companies that listed under the initial listing 
standards set forth in the immediately preceding sentence are 
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. The Pilot Program originally expired by its terms on 
October 31, 2009, but the Exchange extended its application for an 
additional five months, until February 28, 2010.\5\ NYSE has filed an 
immediately effective proposed rule change to extend for a further four 
months, until June 30, 2010.\6\ The Exchange now proposes to make the 
Pilot Program permanent.
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    \4\ See Securities Exchange Act Release No. 59996 (May 28, 
2009), 74 FR 26912 (June 4, 2009) (SR-NYSE-2009-48) (the ``Pilot 
Program Notice'').
    \5\ See Securities Exchange Act Release No. 60911 (November 2, 
2009), 74 FR 57730 (November 9, 2010) (SR-NYSE-2009-109).
    \6\ See SR-NYSE-2010- . [sic] The Commission notes that this 
proposal was noticed for comment in Securities Exchange Act Release 
No. 61609 (March 1, 2010) (SR-NYSE-2010-13).
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    For companies listed under the Earnings Test, the Pilot Program 
returned continued listing requirements to those in place prior to the 
adoption of the current requirements on June 9, 2005.\7\ Consequently, 
prior to implementation of the Pilot Program, the Exchange had 
considerable historical experience with the continued listing of 
companies that had continued to trade on the Exchange with global 
market capitalization and stockholders' equity each below $75 million 
but greater than $50 million. In addition, the Exchange's experience 
under the Pilot Program has been very positive, as only one of the 
companies that was deemed back in compliance as a result of the 
adoption of the Pilot Program has subsequently fallen below the 
standard as amended by the Pilot Program as of the date of this filing 
and only two additional companies have been newly identified as being 
below the Pilot Program standard. Based on this experience, the 
Exchange believes that companies that exceed the continued listing 
standards as amended by the Pilot Program are suitable for continued 
listing on the Exchange.
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    \7\ See 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.
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    The Exchange believes that the continued listing standards as 
amended by the Pilot Program are at least as stringent as 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, the Exchange notes that the Commission stated in the Pilot 
Program Notice \8\ that it believed that the continued listing 
standards adopted under the Pilot Program met the requirements 
established in Exchange Act Rule 3a51-1(a)(2)(ii) \9\ in that they were 
reasonably related to the initial listing standards set forth in 
paragraph (a)(20(i)[sic] of Exchange Act Rule 3a51-1 (the ``Penny Stock 
Rule'').\10\
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    \8\ See the Pilot Program Notice at Note 5. [sic]
    \9\ 17 CFR 240.a51-1(a)(2)(ii). [sic]
    \10\ 17 CFR 240.a51-1. [sic]
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \11\ of the Act, in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\12\ 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, 
and is not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers. The Exchange believes that the proposed 
permanent adoption of the Pilot Program is consistent with the investor 
protection objectives of the Act in that the continued listing 
standards under the Pilot Program are set at a high enough level that 
only companies that are suitable for continued listing on the Exchange 
will exceed the standards.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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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.

[[Page 11972]]

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 longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve the 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 rule-comments@sec.gov. Please include 
File Number SR-NYSE-2010-15 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-2010-15. 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 Web site 
viewing and printing in the Commission's Public Reference Section, on 
official business days between the hours of 10 a.m. and 3 p.m. Copies 
of the filing will also 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-2010-15 and should be submitted on or before April 
2, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-5299 Filed 3-11-10; 8:45 am]
BILLING CODE 8011-01-P