Document ID: SEC-2007-1147-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: NYSE Arca, Inc.
Posted Date: 2007-08-16T04:00Z

[Federal Register: August 16, 2007 (Volume 72, Number 158)]
[Notices]               
[Page 46119-46121]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16au07-129]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56232; File No. SR-NYSEArca-2007-69]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change Relating to Adoption of Revised Initial and 
Continued Listing Standards for the Pilot Program Expiring on November 
30, 2007

August 9, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on July 23, 2007, NYSE Arca, Inc. (``NYSE Arca'' or ``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 substantially prepared by the Exchange. The Commission is 
publishing this notice to solicit comment on the proposed rule change 
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 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 Commission approved the current NYSE Arca initial and continued 
listings standards for the listing of common stock of operating 
companies as a six-month pilot program (``Pilot Program'').\3\ The 
Pilot Program was subsequently extended for an additional six months, 
until November 30, 2007.\4\ NYSE Arca is now proposing to amend the 
Pilot Program. The

[[Page 46120]]

proposed amended initial listing standard will exclude from 
qualification some companies that currently qualify to list but whose 
size or financial performance is not consistent with that of the kind 
of issuer NYSE Arca intends to list on the NYSE Arca Marketplace. The 
amendments to the continued listing standards will increase certain of 
the numerical requirements of common stock Continued Listing Standard 
One to set the continued listing requirements at a level that is more 
consistent with the proposed higher initial listing requirements. The 
text of the proposed rule change is available on the Exchange's Web 
site at http://www.nysearca.com, at the Exchange's Office of the Secretary, 

and at the Commission.
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    \3\ See Securities Exchange Act Release No. 54796 (November 20, 
2006), 71 FR 69166 (November 29, 2006) (SR-NYSEArca-2006-85).
    \4\ See Securities Exchange Act Release No. 55838 (May 31, 
2007), 72 FR 31642 (June 7, 2007) (SR-NYSEArca-2007-51).
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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 self-regulatory organization 
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
    The Commission approved the current NYSE Arca initial and continued 
listings standards for the listing of common stock of operating 
companies as a six-month Pilot Program. NYSE Arca subsequently extended 
the Pilot Program for an additional six months until November 30, 2007 
and now proposes to amend the Pilot Program. Based on its experience in 
the initial six-month period, NYSE Arca has concluded that the listing 
standards adopted under the Pilot Program would qualify many companies 
for listing that are much smaller than the minimum size it wishes to 
include in its target market. The proposed amended initial listing 
standard will exclude from qualification some companies that currently 
qualify to list but whose size or financial performance is not 
consistent with that of the kind of issuer NYSE Arca intends to list on 
the NYSE Arca Marketplace. The amendments to the continued listing 
standards will increase certain of the numerical requirements of common 
stock Continued Listing Standard One to set the continued listing 
requirements at a level that is more consistent with the proposed 
higher initial listing requirements.
    The current NYSE Arca listings standards require for initial 
listing that, at the time of initial listing, the listed class of 
common stock shall have: \5\
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    \5\ See NYSE Arca Equities Rule 5.2(c).
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     At least 1.1 million publicly held shares.
     A closing price per share of $5 or more.
     A minimum of 400 round lot shareholders.
    In addition, the requirements of one of Standards One, Two or Three 
below must be met:

Standard One

     The issuer of the security had annual income from 
continuing operations before income taxes of at least $1 million in the 
most recently completed fiscal year or in two of the last three most 
recently completed fiscal years.
     The market value of publicly held shares is at least $8 
million.
     The issuer of the security has stockholders' equity of at 
least $15 million.

Standard Two

     The issuer of the security has stockholders' equity of at 
least $30 million.
     The market value of publicly held shares is at least $18 
million.
     The issuer has a two-year operating history.

Standard Three

     The market value of publicly held shares is at least $20 
million.
     The issuer has:
    [cir] A market value of listed securities of at least $75 million 
(currently traded issuers must meet this requirement and the $5 closing 
price requirement for 90 consecutive trading days prior to applying for 
listing); or
    [cir] Total assets and total revenue of at least $75 million each 
for the most recently completed fiscal year or in each of two of the 
last three most recently completed fiscal years.
    NYSE Arca proposes to eliminate Standards One and Two and require 
all issuers to qualify under an amended version of existing Standard 
Three. The market value of publicly held shares requirement of Standard 
Three will be raised from $20 million to $45 million. All issuers will 
be required to meet the market value of listed shares alternative of 
Standard Three, which will be raised from $75 million to $150 million. 
In addition, the issuer of the security will be required to meet two of 
the following four conditions:
     Total assets of at least $75 million.
     Total revenues of at least $50 million for the most 
recently completed fiscal year.
     Stockholders' equity of at least $50 million.
     Positive pre-tax earnings in the most recently completed 
fiscal year.
    The other existing requirements of Standard Three will continue to 
be applied in their current form.
    NYSE Arca also proposes to amend Rule 5.5(b) to increase the 
numerical requirements of common stock Continued Listing Standard One 
as follows:
     The publicly held shares requirement is raised from 
750,000 to 1.1 million shares.
     The market value of publicly held shares requirement is 
raised from $5 million to $15 million.
    In addition, the stockholders' equity continued listing requirement 
will be raised from $10 million to $15 million.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Act,\6\ in general, and furthers the objectives of 
Section 6(b)(5) of the Act,\7\ in particular, in that it is designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, and to remove impediments to and perfect the mechanism of a 
free and open market and a national market system.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 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 on the proposed rule change were neither solicited 
nor received.

[[Page 46121]]

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 such 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-NYSEArca-2007-69 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2007-69. 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 available publicly. All 
submissions should refer to File Number SR-NYSEArca-2007-69 and should 
be submitted on or before September 6, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-16161 Filed 8-15-07; 8:45 am]

BILLING CODE 8010-01-P