Document ID: SEC-2005-0351-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange, Inc.
Posted Date: 2005-12-12T05:00Z

[Federal Register: December 12, 2005 (Volume 70, Number 237)]
[Notices]               
[Page 73501-73503]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12de05-102]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52887; File No. SR-NYSE-2005-82]

 
Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
and Amendment No. 1 Thereto Relating to a Pilot Program Relating to 
Minimum Numerical Standards in Section 102.01A of the Listed Company 
Manual

December 5, 2005.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on November 23, 2005, the New York Stock Exchange, Inc. (``NYSE'' 
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 prepared by the NYSE. On December 1, 
2005, NYSE filed Amendment No. 1 to the proposed rule change.\3\ NYSE 
has filed the proposal as a ``non-controversial'' rule change pursuant 
to section 19(b)(3)(A) of the Act \4\ and Rule 19b-4(f)(6) \5\ 
thereunder, which renders the proposed rule change effective upon 
filing with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change, as amended, from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, NYSE made a technical change to Exhibit 
5 (text of the proposed rule change). The correction to Exhibit 5 
does not make any changes to the current initial listing 
distribution criteria for companies listing in connection with a 
transfer or quotation, but only adds missing rule text that was 
inadvertently excluded in the filing submitted by the Exchange on 
November 23, 2005.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 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 NYSE is proposing to amend, on a six-month pilot program basis 
(the ``Pilot Program''), to expire on May 31, 2006, section 102.01A of 
the Exchange's Listed Company Manual (the ``Manual'') regarding the 
minimum numerical listing standards.\6\ The text of the proposed rule 
change is available on the NYSE's Web site (http://www.nyse.com), at 

the principal office of the NYSE, and at the Commission's Public 
Reference Room.
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    \6\ Telephone conversation between Florence Harmon, Senior 
Special Counsel, Division of Market Regulation, Commission, and 
Annemarie Tierney, Assistant General Counsel, NYSE, on December 2, 
2005 (clarifying that the pilot program expires on May 31, 2006).
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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 NYSE 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.

[[Page 73502]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange is proposing to introduce a Pilot Program to amend 
certain of its minimum numerical standards for the listing of domestic 
equity securities on the NYSE. Section 102.01A of the Manual sets out 
minimum initial requirements for size and volume that must be met in 
order for a company to be listed. Currently, companies that are listing 
in conjunction with an initial public offering are required to 
demonstrate that there are at least 2,000 or more round lot holders \7\ 
of the security to be listed in order to be authorized to list. If a 
company cannot confirm that it satisfies the 2,000 round lot holder 
threshold prior to the date that trading commences, the security is 
ineligible for listing.
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    \7\ A ``round lot'' is a trading unit equivalent to 100 shares 
(or an otherwise defined unit of trading). Telephone conversation 
between Florence Harmon, Senior Special Counsel, Division of Market 
Regulation, Commission, and Annemarie Tierney, Assistant General 
Counsel, NYSE, on December 2, 2005.
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    The Exchange states that it is increasingly being approached by 
companies that are ultimately unable to list due to special 
circumstances that result in the company's inability to satisfy the 
2,000 round lot holder requirement prior to commencement of trading. 
For example, companies listing following emergence from bankruptcy and 
companies affiliated with a currently listed company that were created 
in conjunction with a private placement or similar transaction 
generally do not meet the round lot holder threshold unless the company 
conducts a public offering simultaneously with listing. To accommodate 
the listing of these types of companies absent a public offering, the 
Exchange proposes to adopt alternative round lot holder distribution 
standards for affiliated companies and companies listing upon emergence 
from bankruptcy so that these types of companies will be eligible to 
list if they can demonstrate that they have at least 400 round lot 
holders prior to commencement of trading. The additional distribution 
criteria for number of publicly held shares and aggregate market value 
of publicly held shares that are set forth in section 102A of the 
Manual are not proposed to be amended.
2. Statutory Basis
    The Exchange believes that the basis under the Act for the Pilot 
Program is the requirement under section 6(b)(5) \8\ that an exchange 
have rules that are designed to prevent fraudulent and manipulative 
acts and practices, to promote just and equitable principles of trade, 
to remove impediments to, and perfect the mechanism of a free and open 
market and, in general, to protect investors and the public interest.
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    \8\ 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 Pilot Program 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

    The Exchange has neither solicited nor received written comments on 
the proposed Pilot Program.

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

    Because the foregoing proposed rule change, as amended: (1) Does 
not significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) by its terms does not become operative for 30 days after the 
date of this 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) \9\ of the Act and Rule 19b-4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6). Rule 19b-4(f)(6)(iii) under the Act 
requires the self-regulatory organization to provide the Commission 
written notice of its intent to file the proposed rule change at 
least five business days (or such shorter time as designated by the 
Commission) before doing so. NYSE has requested that the Commission 
waive the five-day pre-filing notice requirement. The Commission 
waives the five-day pre-filing notice requirement.
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    The Exchange requests that the Commission waive the 30-day 
operative delay, as specified in Rule 19b-4(f)(6)(iii),\11\ and 
designate the proposed rule change to become operative immediately so 
that the Exchange can implement its Pilot Program relating to minimum 
numerical initial listing standards to facilitate listings by limited 
categories of companies that meet the Exchange's current listing 
standards other than the round lot holder threshold. The Commission 
notes that the Exchange states that the proposed round lot holder 
threshold for affiliated companies and companies emerging from 
bankruptcy is substantially similar to the listing threshold utilized 
by The Nasdaq Stock Market \12\ and the American Stock Exchange 
LLC.\13\ The Commission believes that waiving the 30-day operative 
delay is consistent with the protection of investors and the public 
interest and designates the proposal to be effective and operative upon 
filing with the Commission.\14\
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    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ See NASD Rule 4420.
    \13\ See Section 102(a) of the Amex Company Guide.
    \14\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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.\15\
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    \15\ The effective date of the original proposed rule is 
November 23, 2005. The effective date of Amendment No. 1 is December 
1, 2005. For purposes of calculating the 60-day period within which 
the Commission may summarily abrogate the proposed rule change under 
section 19(b)(3)(C) of the Act, the Commission considers the period 
to commence on December 1, 2005, the date on which NYSE submitted 
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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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 No. SR-NYSE-2005-82 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-9303.
    All submissions should refer to File Number SR-NYSE-2005-82. This 
file number should be included on the

[[Page 73503]]

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. Copies of such filing also will be available for 
inspection and copying at the principal office of the NYSE.
    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-2005-82 
and should be submitted on or before January 3, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
 [FR Doc. E5-7181 Filed 12-9-05; 8:45 am]

BILLING CODE 8010-01-P