Document ID: SEC-2009-1291-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by New York Stock Exchange LLC to Modify the Cure Provisions Under Its Dollar Stock Price Continued Listing Standard
Posted Date: 2009-09-09T04:00Z

[Federal Register: September 9, 2009 (Volume 74, Number 173)]
[Notices]               
[Page 46474-46476]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09se09-104]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60612; File No. SR-NYSE-2009-88]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC to 
Modify the Cure Provisions Under Its Dollar Stock Price Continued 
Listing Standard

September 2, 2009.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Exchange Act'') \2\ and Rule 19b-4

[[Page 46475]]

thereunder,\3\ notice is hereby given that, on August 21, 2009, New 
York Stock Exchange LLC (the ``NYSE'' or the ``Exchange'') filed with 
the Securities and Exchange Commission the proposed rule changes as 
described in Items I and II below, which items have been prepared by 
the Exchange. The Exchange has designated this proposal eligible for 
immediate effectiveness pursuant to Rule 19b-4(f)(6) \4\ under the Act. 
The Commission is publishing this notice to solicit comments on the 
proposed rule changes 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.
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to modify the cure provisions under the 
dollar stock price continued listing standard set forth in Section 
802.01C of the Exchange's Listed Company Manual (the ``Manual'').
    The text of the proposed rule change is available on the Exchange's 
Web site (http://www.nyse.com), at the Exchange's Office of the 
Secretary and at the Commission's Public Reference room.

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 these statements may be examined at 
the places specified in Item IV below. The NYSE 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
    Under Section 802.01C of the Manual, a listed company is below 
compliance with the Exchange's stock price continued listing standard 
if the average closing price of its stock has fallen below $1.00 over a 
consecutive 30 trading day period) (the NYSE's ``dollar price continued 
listing standard''). Once notified, the company must bring its share 
price and average share price back above $1.00 by six months following 
receipt of the notification. A company is not eligible to follow the 
cure procedures outlined in Sections 802.02 and 802.03 with respect to 
the dollar stock price continued listing standard. The company must, 
however, notify the Exchange, within 10 business days of receipt of the 
notification, of its intent to cure this deficiency or be subject to 
suspension and delisting procedures. In order to cure an event of 
noncompliance under the dollar price continued listing standard, an 
issuer must have a $1.00 closing share price on the last trading day of 
its six-month cure period and a $1.00 average closing share price over 
the 30 trading-day period ending on the last trading day in the six-
month cure period. If the issuer fails to regain compliance in this 
manner, the Exchange will commence suspension and delisting procedures 
promptly after the expiration of the cure period.\5\
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    \5\ Additionally, Section 802.01C provides that if a company 
determines that, if necessary, it will cure the price condition by 
taking an action that will require approval of its shareholders, it 
must so inform the Exchange in the above referenced notification, 
must obtain the shareholder approval by no later than its next 
annual meeting, and must implement the action promptly thereafter. 
The price condition will be deemed cured if the price promptly 
exceeds $1.00 per share, and the price remains above the level for 
at least the following 30 trading days.
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    Due to the extreme volatility in the equity markets in the earlier 
part of 2009, the Exchange suspended the application of the dollar 
price continued listing standard until June 30, 2009.\6\ The suspension 
of the dollar price continued listing standard was subsequently 
extended to July 31, 2009.\7\ Under the suspension, any company that 
was in a compliance period at the time of commencement of the rule 
suspension could return to compliance if such company had a $1.00 
closing share price on the last trading day of any calendar month 
during the suspension and a $1.00 average closing share price based on 
the 30 trading days preceding the end of such month. The Exchange now 
proposes to amend Section 802.01C to provide that this provision will 
become a permanent aspect of the rule after the expiration of the 
suspension period on July 31, 2009. Going forward, a company that has 
been notified by the Exchange that it is below compliance with the 
dollar price continued listing standard can regain compliance prior to 
the end of its six-month cure period if on the last trading day of any 
calendar month during that period the company has a closing share price 
of at least $1.00 and has an average closing share price of at least 
$1.00 over the 30 trading day period ending on the last trading day of 
that month. It has been the Exchange's experience that most companies 
that have utilized this early cure provision during the period of the 
suspension have subsequently remained in compliance with the dollar 
stock price continued listing standard. Consequently, the Exchange no 
longer believes that there is any regulatory benefit to be derived from 
limiting companies to curing an event of noncompliance with the dollar 
price continued listing standard only at the very end of the six-month 
cure period. The Exchange believes that allowing companies to cure on 
the last trading day of any month during the cure period will not 
contribute to the retention of companies that are unsuitable for 
continued listing. The Exchange also believes that Nasdaq takes a 
similar approach to the proposed amendment in the cure provisions of 
its dollar price continued listing standard \8\ and, consequently, the 
Exchange does not believe that the proposed amendment raises any novel 
regulatory issues. The NYSE retains the right to delist a company at 
any time if it determines that doing so is in the public interest.
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    \6\ See Securities Exchange Act Release No. 59510 (March 4, 
2009), 74 FR 10636 (March 11, 2009)(SR-NYSE-2009-21).
    \7\ See Securities Exchange Act Release No. 60273 (July 9, 
2009), 74 FR 34606 (July 16, 2009) (SR-NYSE-2009-64. [sic]
    \8\ See Nasdaq Marketplace Rule 5810(a)(3)(A), under which a 
company which is below compliance with Nasdaq's $1.00 price 
requirement can regain compliance at any time during the 180-day 
compliance period by meeting the standard for any 10 consecutive 
trading days during the compliance period.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \9\ of the Act in general, and furthers the 
objectives of Section 6(b)(5) \10\ of the Act 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 proposed rule change is similar to an existing rule of Nasdaq and 
consequently does not raise any novel regulatory issues. Furthermore, 
companies that will qualify to cure their dollar price continued 
listing standard noncompliance under the proposed amendment will have 
maintained an

[[Page 46476]]

average closing price of at least $1.00 for 30 consecutive trading 
days, which evidences those companies' suitability for continued 
listing.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 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

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing 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 for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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 five-day pre-filing requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \13\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6) \14\ 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 because 
the Exchange believes that: (i) Doing so will avoid potential confusion 
and inconsistent treatment of companies that could arise if the 
Exchange was unable to apply this provision on August 31, after having 
applied such a provision during the temporary suspension period, and 
then doing so again on September 30 after the filing becomes operative, 
(ii) such a waiver will allow the Exchange to implement a standard 
substantially similar to that in place at Nasdaq, and (iii) the 
Commission has previously published for public comment the temporary 
suspension of the dollar price continued listing standard (which 
included the same early cure provision as proposed in this filing) and 
received no comments.
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6).
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    The Commission believes that waiving the 30-day operative delay 
\15\ is consistent with the protection of investors and the public 
interest. As noted by the NYSE, the proposal was previously published 
for comment and implemented during the temporary suspension of the 
dollar price continued listing standard.\16\ The Commission received no 
comments on this change. In addition, the proposal will avoid confusion 
as to the applicable compliance period and is not inconsistent with how 
NASDAQ applies its compliance period. For these reasons, the Commission 
believes it is appropriate to waive the 30-day operative delay, 
allowing the proposed rule change to become operative upon filing.
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    \15\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \16\ See supra notes 6-7.
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    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.

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-2009-88 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-2009-88. 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-2009-88 and should be 
submitted on or before September 30, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-21646 Filed 9-8-09; 8:45 am]

BILLING CODE 8010-01-P