Document ID: SEC-2007-0186-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2007-02-07T05:00Z

[Federal Register: February 7, 2007 (Volume 72, Number 25)]
[Notices]               
[Page 5778-5779]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07fe07-161]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55198; File No. SR-NYSE-2006-116]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; Order 
Approving Proposed Rule Change Amending Annual Report Timely Filing 
Requirements

January 30, 2007.

I. Introduction

    On December 14, 2006, the New York Stock Exchange, Inc. (``NYSE'' 
or ``Exchange'') submitted to the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amend Section 802.01E of its Listed Company 
Manual (``Manual'') to end, as of December 31, 2007, the Exchange's 
discretion to continue the listing of certain companies that are twelve 
months late in filing their annual reports with the Commission. The 
proposed rule change was published for public comment in the Federal 
Register on December 28, 2006.\3\ The Commission received no comment 
letters regarding the proposed rule

[[Page 5779]]

change. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 54977 (December 20, 
2006), 71 FR 78249.
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II. Description of the Proposed Rule Change

    The Exchange proposes to amend Section 802.01E of the Manual to 
end, as of December 31, 2007, the Exchange's discretion to continue the 
listing of certain companies that are twelve or more months late in 
filing their annual reports \4\ with the Commission.
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    \4\ The term ``annual report'' used herein refers to the filing 
of Forms 10-K, 10-KSB, 20-F, 40-F or N-CSR.
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    Section 802.01E of the Manual provides that if a company fails to 
timely file a periodic annual report with the Commission, the Exchange 
will monitor the company and the status of the filing. If the company 
fails to file the annual report within six months from the filing due 
date, the Exchange may, in its sole discretion, allow the company's 
securities to be traded for up to an additional six-month period 
depending on the company's specific circumstances; but in any event if 
the company does not file its periodic annual report by the end of the 
one year period (``Initial Twelve-Month Period''), the Exchange will 
begin suspension and delisting procedures in accordance with the 
procedures in Section 804.00 of the Manual.
    Section 802.01E states that, in certain unique circumstances, a 
listed company that is delayed in filing its annual report beyond the 
Initial Twelve-Month Period may have a position in the market (relating 
to both the nature of its business and its very large publicly held 
market capitalization) such that its delisting from the Exchange would 
be significantly contrary to the national interest and the interests of 
public investors. In such a case, where the Exchange believes that the 
company remains suitable for listing given, among other factors,\5\ its 
relative financial health and compliance with the NYSE's quantitative 
and qualitative listing standards, and where there is a reasonable 
expectation that the company will be able to resume timely filings in 
the future, the Exchange may forebear, at its sole discretion, from 
commencing suspension and delisting, notwithstanding the company's 
failure to file within the time periods specified in Section 802.01E of 
the Manual.
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    \5\ See Section 802.01E of the Manual for a complete list of the 
factors that the Exchange must consider when determining whether to 
continue listing a company beyond the Initial Twelve-Month Period.
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    The Exchange has determined that it is unnecessary for the Exchange 
to retain the discretion to allow companies to continue to be listed 
beyond the Initial Twelve-Month Period after December 31, 2007. 
Therefore, under this proposed amendment, the Exchange's discretion to 
allow a company to continue to be listed beyond the Initial Twelve-
Month Period set forth in Section 802.01E of the Manual shall expire on 
December 31, 2007. If, prior to December 31, 2007, the Exchange had 
determined to continue listing a company beyond the Initial Twelve-
Month Period under the circumstances specified in Section 802.01E of 
the Manual as described above,\6\ and the company fails to file its 
periodic annual report by December 31, 2007, suspension and delisting 
procedures will commence in accordance with the procedures set out in 
Section 804.00 of the Manual.
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    \6\ See supra note 5 and accompanying text.
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III. Discussion

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange. In particular, 
the Commission finds that the proposed rule change is consistent with 
Section 6(b)(5) of the Act \7\ which requires an Exchange to have rules 
that are designed to promote just and equitable principles of trade, 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.\8\
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    \7\ 15 U.S.C. 78f(b)(5).
    \8\ In approving the proposed rule change, the Commission has 
considered its impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
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    Specifically, the Commission believes that eliminating the 
Exchange's discretion to continue the listing of certain companies that 
are twelve months late in filing their annual reports will encourage 
listed companies to file any late annual reports as quickly as 
practicable. This should benefit the public interest and protect 
investors by helping to assure that investors receive up to date 
financial information about listed companies. Eliminating the 
Exchange's discretion to not commence delisting of a company past the 
Initial 12 Month Period ensures that companies cannot continue to trade 
on the Exchange for extended periods of time without making publicly 
available their required annual reports.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\9\ that the proposed rule change (SR-NYSE-2006-116) is approved.
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    \9\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-1943 Filed 2-6-07; 8:45 am]

BILLING CODE 8010-01-P