Document ID: SEC-2008-1317-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2008-09-26T04:00Z

[Federal Register: September 26, 2008 (Volume 73, Number 188)]
[Notices]               
[Page 55888-55889]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26se08-99]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58598; File No. SR-NYSEArca-2008-78]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving 
Proposed Rule Change To Waive Annual Fees for Securities Transferring 
to NYSE Arca From NYSE Alternext US

September 19, 2008.

I. Introduction

    On July 23, 2008, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'') 
filed with 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 
waive annual listing fees for securities transferring to NYSE Arca from 
NYSE Alternext US after the closing of the purchase of the American 
Stock Exchange LLC (``Amex'') by NYSE Euronext (the ``Merger'').\3\ The 
proposed rule change was published in the Federal Register on August 
11, 2008.\4\

[[Page 55889]]

The Commission received no comments on the proposal. 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\ NYSE Euronext, the ultimate parent company of the Exchange, 
has agreed to acquire the Amex pursuant to an Agreement and Plan of 
Merger, dated as of January 17, 2008. After the closing of the 
Merger, the Amex will be renamed NYSE Alternext US LLC.
    \4\ See Securities Exchange Act Release No. 58297 (August 4, 
2008), 73 FR 46683.
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II. Description of the Proposal

    The Exchange proposes that securities transferring to NYSE Arca 
from NYSE Alternext US after the closing of the Merger will not be 
charged any prorated annual fee for the remainder of the year in which 
the Merger takes place. The fee waiver in the preceding sentence will 
be of no further effect if the closing of the Merger does not take 
place by March 31, 2009.
    The Exchange believes this proposed fee waiver does not render the 
allocation of its listing fees inequitable or unfairly discriminatory, 
in particular because, after the Merger, NYSE Regulation, Inc. (``NYSE 
Regulation'') will perform listed company regulation for both the 
Exchange and NYSE Alternext US, including a substantial review of 
companies upon original listing. The Exchange notes that many of the 
regulatory staff who currently perform initial and continued listing 
reviews at the Amex will become employees of NYSE Regulation at the 
time of the Merger and will continue to perform the same duties with 
respect to NYSE Alternext US securities after the Merger. The Exchange 
represents that securities transferring from NYSE Alternext US will be 
subjected to the same rigorous regulatory review as any other 
securities with respect to which an application for listing is made to 
the Exchange. However, the Exchange expects that, on average, the 
review of securities transferring from NYSE Alternext US to the 
Exchange will be less costly than the review of a transfer from an 
unaffiliated market, as the Amex listing regulatory staff that will 
have been absorbed by NYSE Regulation will already have performed a 
substantial review of any NYSE Alternext US-listed issuer, and NYSE 
Regulation will be able to rely on that prior work as a baseline in 
qualifying the issuer for listing on the Exchange and in conducting 
ongoing compliance activities with respect to any such issuer. In 
support of its proposal, the Exchange also notes that transferring 
issuers would have already paid annual continued listing fees to the 
Amex for the calendar year in which the transfer took place.

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 and, in 
particular, the requirements of section 6(b) of the Act and the rules 
and regulations thereunder. Specifically, the Commission finds that the 
proposal is consistent with sections 6(b)(4) \5\ and 6(b)(5) of the 
Act,\6\ which require that an exchange have rules that provide for the 
equitable allocation of reasonable dues, fees, and other charges among 
its members and other persons using its facilities, and are designed, 
among other things, 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, to protect investors and the 
public interest, and to not permit unfair discrimination between 
customers, issuers, brokers, or dealers.\7\
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    \5\ 15 U.S.C. 78f(b)(4).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rules' impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
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    National securities exchanges traditionally assess annual listing 
fees on listed companies at the beginning of the calendar year. When a 
company transfers to another marketplace, such annual fees are 
typically pro-rated by the new market for the remainder of the calendar 
year. Annual fees aid a listed market in, among other things, 
conducting its regulatory responsibilities to ensure compliance by 
listed companies with continued listing standards and other regulatory 
requirements. The Commission notes that an Amex issuer seeking to 
transfer to the Exchange has already paid annual continued listing fees 
to another national securities exchange for the calendar year in which 
it transferred. Further, the Commission recognizes that subsequent to 
the consummation of the Merger, both Amex as NYSE Alternext US and NYSE 
Arca will be under the same common ownership. The Commission also notes 
that the Exchange anticipates the review of securities transferring 
from NYSE Alternext US to be less costly than the review of a transfer 
from an unaffiliated market, because Amex listing regulatory staff that 
will be part of NYSE Regulation will continue to perform both initial 
and continued listing reviews. However, the Commission expects, and the 
Exchange has represented, that a rigorous and independent review of 
compliance with the listing standards will be conducted for any company 
seeking to take advantage of the fee waiver, just as for any company 
that lists on the Exchange. The Commission expects the Exchange to 
maintain its commitment of resources to its regulatory oversight of the 
listing process and its ongoing compliance review of listed companies 
under its regulatory program.
    In summary, for the reasons set forth above, including NYSE Arca's 
assertion that the same regulatory staff on Amex (that will have been 
absorbed by NYSE Regulation) will have conducted a substantial review 
of an Amex company that NYSE Regulation will be able to rely upon as a 
baseline in qualifying the company for listing on the Exchange and in 
conducting ongoing compliance activities with respect to any such 
company, the Commission believes it is not inequitable or unfair to 
provide for a waiver of annual fees for a limited period of time after 
the merger is consummated.
    Based on the above, the Commission believes the proposed fee waiver 
does not constitute an inequitable allocation of reasonable dues, fees, 
and other charges under section 6(b)(4) of the Act,\8\ does not permit 
unfair discrimination between issuers under section 6(b)(5) of the 
Act,\9\ and is otherwise consistent with the requirements of the Act.
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    \8\ 15 U.S.C. 78f(b)(4).
    \9\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-NYSEArca-2008-78) is hereby 
approved.
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    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-22655 Filed 9-25-08; 8:45 am]

BILLING CODE 8010-01-P