Document ID: SEC-2009-1000-0001
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 Lower Its Market Capitalization Continued Listing Standard
Posted Date: 2009-07-20T04:00Z

[Federal Register: July 20, 2009 (Volume 74, Number 137)]
[Notices]               
[Page 35220-35221]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20jy09-88]                         

[[Page 35220]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60305; File No. SR-NYSE-2009-66]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC To 
Lower Its Market Capitalization Continued Listing Standard

July 14, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby 
given that on July 2, 2009, New York Stock Exchange, LLC (the ``NYSE'' 
or the ``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 Exchange. The Exchange 
has designated this proposal eligible for immediate effectiveness 
pursuant to Rule 19b-4(f)(6) \3\ under the Exchange Act. The Commission 
is publishing this notice to solicit comments 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.
    \3\ 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 permanently lower its market 
capitalization continued listing standard set forth in Section 802.01B 
of the Exchange's Listed Company Manual (the ``Manual'') from $25 
million to $15 million. 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
    In response to the unusual market conditions over the last twelve 
months, the Exchange previously adopted a policy (by means of an 
immediately effective rule filing \4\) providing that, through April 
22, 2009, its average global market capitalization continued listing 
standard will apply only to companies (including limited partnerships 
and real estate investment trusts (``REITs'')) whose average global 
market capitalization over a consecutive 30 trading-day period falls 
below $15 million.\5\ In a subsequent filing, the Exchange extended the 
period for which it temporarily lowered its market capitalization 
continued listing standard, so that the lower standard is currently in 
place through June 30, 2009.\6\ The Exchange now proposes to make 
permanent this lowering of its market capitalization continued listing 
standard (including as it applies to limited partnerships and REITs).
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    \4\ See Securities Exchange Act Release No. 59299 (January 27, 
2009), 74 FR 5709 (January 30, 2009) (SR-NYSE-2009-06).
    \5\ Section 802.01B of the Manual provides that the Exchange 
will promptly delist any company (including limited partnerships and 
REITs) if it is determined that the company has an average global 
market capitalization over a consecutive 30 trading-day period of 
less than $25 million, regardless of the original listing standard 
under which it listed. A company is not eligible to utilize the cure 
procedures set forth in Sections 802.02 and 802.03 with respect to 
this criterion and instead is immediately subject to the Exchange's 
delisting procedures set forth in Section 804 of the Manual.
    \6\ See Securities Exchange Act Release No. 59510 (March 4, 
2009), 74 FR 10636 (March 11, 2009) (SR-NYSE-2009-21).
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    The Exchange notes that it adopted its $25 million average global 
market capitalization requirement as recently as 2004--at a time when 
stock prices were far higher than they are currently--and that the 
requirement prior to that date was $15 million.\7\ In addition, the 
temporary lowering of the standard through June 30, 2009, has provided 
the Exchange with more recent experience with the continued listing of 
companies whose average global market capitalization exceeds $15 
million but is lower than $25 million. This experience has made the 
Exchange comfortable allowing the continued listing of companies that 
have a market capitalization above $15 million but below $25 million, 
because the Exchange's experience has been that, where these companies 
are otherwise in compliance with all of the Exchange's other 
qualitative and quantitative continued listing standards, they remain 
viable enterprises and suitable for auction market trading. The 
Exchange also notes that, unlike with the Exchange's other quantitative 
listing standards, Section 802.01B does not provide companies with any 
period of time to take steps to attempt to regain compliance with the 
standard. The Exchange further notes that its continued listing 
standards after permanent adoption of the $15 million market 
capitalization continued listing standard will continue to be at least 
as stringent as those of any other national securities exchange. 
Consequently, the Exchange believes that the proposed amendment is 
consistent with the protection of investors and the public interest and 
does not raise any novel regulatory issues. In addition, the proposed 
amendment does not affect the status of NYSE listed securities under 
Securities Exchange Act Rule 3a51-1(a) (the ``Penny Stock Rule''),\8\\\ 
as the Exchange's initial listing standards satisfy the requirements of 
Rule 3a51-1(a)(2)(i) \9\ and the continued listing standards as amended 
are reasonably related to those initial listing standards, as required 
by 3a51-1(a)(2)(ii).\10\ In particular, the $15 million market 
capitalization continued listing standard is reasonably related to (i) 
the market value of listed securities of $50 million for 90 consecutive 
days prior to applying for listing initial listing requirement of Rule 
3a51-1(a)(2)(i)(A)(2) \11\ and (ii) the market value of listed 
securities of $50 million initial listing requirement of Rule 3a51-
1(a)(2)(i)(B).\12\
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    \7\ See Securities Exchange Act Release No. 49154 (January 29, 
2004), 69 FR 5633 (February 5, 2004) (SR-NYSE-2003-43).
    \8\ 17 CFR 240.a51-1(a). [sic]
    \9\ 17 CFR 240.a51-1(a)(2)(i). [sic]
    \10\ 17 CFR 240.a51-1(a)(2)(ii). [sic]
    \11\ 3a51-1(a)(2)(i)(A)(2). [sic]
    \12\ Rule 3a51-1(a)(2)(i)(B).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \13\ of the Securities Exchange Act of 1934 (the 
``Act''),\14\ in general, and furthers the objectives of Section 
6(b)(5) \15\ 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

[[Page 35221]]

open market and a national market system, and, in general, to protect 
investors and the public interest. The NYSE's continued listing 
requirements as amended by the proposed rule change remain at least as 
stringent as those of any other national securities exchange and, 
consequently, the proposed amendment is consistent with the protection 
of investors and the public interest.
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    \13\ 15 U.S.C. 78f(b).
    \14\ See 15 U.S.C. 78a.
    \15\ 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 Exchange 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 proposed rule change: (i) Does not significantly affect 
the protection of investors or the public interest; (ii) does not 
impose any significant burden on competition; and (iii) does not become 
operative for 30 days after the date of the 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) of the Act \16\ and 
Rule 19b-4(f)(6) thereunder.\17\
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    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 17 CFR 240.19b-4(f)(6). Pursuant to Rule 19b-4(f)(6)(iii) 
under the Act, the Exchange is required to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of 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 Commission has determined to waive this requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \18\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \19\ 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.
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    \18\ 17 CFR 240.19b-4(f)(6).
    \19\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because the proposal will return the Exchange's market capitalization 
continued listing standard to the same level that it was in 2004 to $15 
million.\20\ In addition, the Commission notes that the $15 million 
market capitalization standard, which immediately subjects a company 
failing to meet this standard to the Exchange's delisting procedures in 
Section 804 of the Manual, is at least as stringent as the continued 
listing requirements of another national securities exchange.\21\ For 
these reasons, the Commission believes that the proposed rule change 
does not raise any new regulatory issues. Accordingly, the Commission 
designates that the proposed rule change become operative immediately 
upon filing.\22\
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    \20\ See supra note 7.
    \21\ See The NASDAQ Stock Market LLC Rule 5450.
    \22\ 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. 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 the 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 Exchange 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-2009-66 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-2009-66. 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, on official business 
days between the hours of 10 a.m. and 3 p.m. Copies of the 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-
NYSE-2009-66 and should be submitted on or before August 10, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
Florence E. Harmon,
Deputy Secretary.
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    \23\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E9-17139 Filed 7-17-09; 8:45 am]

BILLING CODE 8010-01-P