Document ID: SEC-2008-0972-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2008-07-14T04:00Z

[Federal Register: July 14, 2008 (Volume 73, Number 135)]
[Notices]               
[Page 40415-40416]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14jy08-137]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58109; File No. SR-NYSEArca-2008-47]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change To Waive Retroactively as of June 24, 2008, 
Certain Initial Listing Fees for Companies Transferring the Listing of 
Their Securities From Any Other National Securities Exchange

July 7, 2008.
    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 June 24, 2008, 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 comments on the proposal 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 Exchange, through its wholly-owned subsidiary NYSE Arca 
Equities, Inc. (``NYSE Arca Equities''), proposes to waive initial 
listing fees for companies transferring the listing of their equity 
securities from any other national securities exchange. The proposed 
fee waiver would be applied retroactively to any companies that apply 
to list after the date of initial submission of this filing. The text 
of the proposed rule change is available at the Exchange's principal 
office, 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 Exchange 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 Exchange 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 Exchange proposes to waive initial listing fees for companies 
transferring the listing of their securities from any other national 
securities exchange. The waiver will apply to all classes of 
securities. The Exchange had previously waived initial listing fees in 
these circumstances for all companies that transferred from the New 
York Stock Exchange (``NYSE'') at any time or from Nasdaq Stock Market 
(``Nasdaq'') or the American Stock Exchange prior to December 31, 2007, 
or had applied to list prior to that date.\3\ The proposed amendment 
brings the Exchange's fee policy in line with those of the NYSE and 
Nasdaq,\4\ both of which currently provide fee waivers to companies 
transferring from the other national securities exchanges. The proposed 
fee waiver would be applied retroactively to any companies that apply 
to list after the date of initial submission of this filing.
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    \3\ See Securities Exchange Act Release No. 54007 (June 16, 
2006), 71 FR 36155 (June 23, 2006) (SR-PCX-2006-16).
    \4\ See Section 902.02 of the NYSE Listed Company Manual and 
Nasdaq Marketplace Rule IM-4500-4.
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    Issuers of securities that qualify for the proposed waiver of 
initial listing fees will be subject to the same level of annual fees 
and listing of additional shares fees as other NYSE Arca issuers. The 
proposed rule change will not affect the Exchange's commitment of 
resources to its regulatory oversight of the listing process or its 
regulatory programs. Specifically, companies that benefit from the 
waiver will be reviewed for compliance with the Exchange initial and 
continued listing standards in the same manner as any other company 
that applies to be listed on the Exchange. The Exchange will conduct a 
full and independent review of each issuer's compliance with the 
Exchange's initial listing standards.
    The Exchange believes that the elimination of such fees in the case 
of securities transferring from other national securities exchanges is 
justified on several grounds. An issuer that already paid initial 
listing fees to another national securities exchange when it became a 
publicly traded company is reluctant to pay a second initial listing 
fee to another listing venue, even if it concludes that the Exchange 
offers the issuer and its investors superior services and market 
quality. Even if an issuer concludes that the Exchange would provide a 
superior market for its stock, the benefits of the transfer must 
currently be weighed against the cost of initial inclusion. Since the 
expected benefits of the transfer would be diffused among the issuers' 
investors and realized over time, but the initial listing fees must be 
paid by the issuer immediately, the Exchange is concerned that issuers 
that stand to benefit may nevertheless opt to forgo a transfer. As 
such, the Exchange believes that assessing the initial fees against 
issuers that have already paid fees to list on another market imposes a 
burden on the competition between exchange markets and markets other 
than exchange markets, a competition that the Exchange believes is one 
of the central goals of the national market system. This concern is 
particularly great in light of the fact that the Commission has 
approved the waiver of initial listing fees by Nasdaq with respect to 
the listing of any security being transferred from another national 
securities exchange.\5\
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    \5\ See Securities Exchange Act Release No. 51004 (January 10, 
2005), 70 FR 2917 (January 18, 2005) (SR-NASD-2004-140).
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    The Exchange understands that the effect of this proposed rule 
change will be to impose a lower level of listing fees

[[Page 40416]]

on issuers that transfer from another national securities exchange than 
on some other issuers. In light of the fact that the Exchange will 
collect the same level of annual fees and listing of additional shares 
fees from such issuers, however, the Exchange believes that the 
difference does not constitute an inequitable allocation of fees. In 
light of a transferring issuer's prior payment to another market and 
the generally lower burdens associated with reviewing a transferring 
issuer's eligibility, the Exchange believes that eliminating initial 
fees for transferring issuers is entirely consistent with an equitable 
allocation of listing fees. The Exchange will maintain a rigorous 
regulatory review process with respect to the initial listing 
qualification of listing applicants transferring from other markets.
    The Exchange does not expect the financial impact of this proposed 
rule change to be material, either in terms of increased levels of 
annual fees from transferring issuers or in terms of diminished initial 
listing fee revenues. Quite simply, even with the proposed rule change 
in place, the Exchange understands that a change in listing venue is a 
major step for an issuer, and therefore the Exchange does not expect 
that the number of issuers that transfer to NYSE Arca in a given time 
frame will be sufficient to have a material effect on financial 
resources.
    The Exchange will apply the proposed fee waiver retroactively as of 
the date of initial submission of this rule filing. The Exchange 
believes that this retroactive effect is necessary and justified 
because Nasdaq currently operates such a waiver and the Exchange is 
therefore at a competitive disadvantage vis-[agrave]-vis Nasdaq until 
the Exchange has such a waiver in place. Giving the waiver retroactive 
effect will therefore have the immediate effect of promoting 
competition between the Exchange and Nasdaq and alleviating the 
Exchange's current competitive disadvantage.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 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 promote just and equitable 
principles of trade, to remove impediments, and to perfect the 
mechanism of, a free and open market and a national market system, and, 
in general, to protect investors and the public interest. In light of a 
transferring issuer's prior payment to another market, the Exchange 
believes that the proposed fee waiver does not render the allocation of 
its listing fees inequitable or unfairly discriminatory. The Exchange 
believes that the fee waiver will increase competition among listing 
markets and will remove a competitive disadvantage the Exchange 
currently has vis-[agrave]-vis the other national securities exchanges, 
and it is therefore designed to perfect the mechanism of a free and 
open market.
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    \6\ 15 U.S.C. 78f.
    \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.

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-2008-47 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2008-47. 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-2008-47 and should 
be submitted on or before August 4, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-15885 Filed 7-11-08; 8:45 am]

BILLING CODE 8010-01-P