Document ID: SEC-2005-0247-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange, Inc.
Posted Date: 2005-11-16T05:00Z

[Federal Register: November 16, 2005 (Volume 70, Number 220)]
[Notices]               
[Page 69617-69619]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16no05-133]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52760; File No. SR-NYSE-2005-75]

 
Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Notice of Filing of Proposed Rule Change Relating to Section 802.01E of 
the Listed Company Manual

November 10, 2005.
    Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'' or ``Exchange Act'') \2\ and Rule 19b-4 thereunder,\3\ 
notice is hereby given that on October 26, 2005, the New York Stock 
Exchange, Inc. (``Exchange'' or ``NYSE'') filed with the Securities and 
Exchange Commission (``Commission'' or ``SEC'') the proposed rule 
change as described in Items I, II, and III below, which items have 
been prepared by the Exchange. 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\ 15 U.S.C. 78a.
    \3\ 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 proposed rule filing reflects amendments to the Listed Company 
Manual procedures applicable to companies that fail to file in a timely 
manner their annual report required by the Act. The text of the 
proposed rule change is set forth below. Additions are in italics and 
deletions are in brackets.

Listed Company Manual

* * * * *
802.00 Continued Listing Criteria
* * * * *
802.01E SEC Annual Report Timely Filing Criteria
    A company that fails to file its annual report (Forms 10-K, 10-KSB, 
20-F, 40-F or N-CSR) with the SEC in a timely manner will be subject to 
the following procedures: Once the Exchange identifies that a company 
has failed to file a timely periodic annual report with the SEC by the 
later of (a) the date that

[[Page 69618]]

the annual report was required to be filed with the SEC by the 
applicable form or (b) if a Form 12b-25 was timely filed with the SEC, 
the extended filing due date for the annual report, the Exchange will 
notify the company in writing of [its status] the procedures set forth 
below. For purposes of this [Para.] Section 802.01E, the later of these 
two dates will be referred to as the ``Filing Due Date.''
    Within five days of receipt of this notification, the company will 
be required to (a) contact the Exchange to discuss the status of the 
annual report filing, and (b) [if it has not already done so,] issue a 
press release disclosing the status of the filing, noting the delay, 
the reason for the delay and the anticipated filing date, if known. If 
the company has not [fails to] issued [this] the required press release 
[in a timely manner] by the fifth day following receipt of this 
notification, the Exchange will itself issue a press release stating 
that the company has failed to timely file its annual report with the 
SEC.
    During the [nine] six-month period from the Filing Due Date, the 
Exchange will monitor the company and the status of the filing, 
including through contact with the company, until the annual report is 
filed. If the company fails to file the annual report within [nine] 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 [three] six-month trading period depending on the company's 
specific circumstances. If the Exchange determines that an additional 
trading period of up to [three] six months is not appropriate, 
suspension and delisting procedures will commence in accordance with 
the procedures set out in [Para.] Section 804.00 of the Listed Company 
Manual. A company is not eligible to follow the procedures outlined in 
[Paras.] Sections 802.02 and 802.03 with respect to this criteria.
    In determining whether an additional up to [three] six-month 
trading period is appropriate, the Exchange will consider the 
likelihood that the filing can be made during the additional period, as 
well as the company's general financial status, based on information 
provided by a variety of sources, including the company, its audit 
committee, its outside auditors, the staff of the SEC and any other 
regulatory body. The Exchange strongly encourages companies to provide 
ongoing disclosure on the status of the annual report filing to the 
market through press releases, and will also take the frequency and 
detail of such information into account in determining whether an 
additional [three] six-month trading period is appropriate.
    If the Exchange determines that an additional up to [three] six-
month trading period is appropriate and the company fails to file its 
periodic annual report by the end of the additional period, suspension 
and delisting procedures will, subject to the provisions below, 
commence in accordance with the procedures set out in [Para.] Section 
804.00. In certain unique circumstances, a listed company that is 
delayed in filing its annual report beyond the twelve-month period 
described above because its financial statements have not yet been 
completed 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 case, when the Exchange believes that the 
company remains suitable for listing given:
    1. Its continuing compliance with applicable quantitative and 
qualitative listing standards;
    2. Its continued ability to meet current debt obligations and 
adequately finance operations;
    3. Its progress, as reported to the Exchange, in completing its 
financial statements;
    4. Whether it has been publicly transparent on its status, issuing 
press releases regarding its progress in completing its financial 
statements and providing other information regarding its financial 
status; and
    5. The reasonable expectation that the company will be able to 
resume timely filings in the future,
the Exchange, in its sole discretion, may determine to allow the listed 
company to continue listing beyond the twelve-month period. The 
Exchange will advise the SEC of, and publish on the NYSE's website, any 
such determination.
    The Exchange will reevaluate such determination once every three 
months. If the Exchange reaffirms its decision to allow trading to 
continue, the Exchange will advise the SEC of, and publish on the 
NYSE's website, that reaffirmation.
    Note that, regardless of the procedures described above, if, at any 
time, the Exchange deems it necessary or appropriate in the public 
interest or for the protection of investors, trading in any security 
can be suspended immediately, and[,] the Exchange will follow [in 
accordance with] the procedures set out in [Para.] Section 804.00[, 
application made to the SEC] to delist the security.
* * * * *

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. The 
text of these statements may be examined at the places specified in 
item IV below and is set forth in sections A, B, and C below.

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

1. Purpose
    The Exchange recently approved section 802.01E of the NYSE's Listed 
Company Manual which codifies the Exchange's procedures relating to 
situations where companies fail to satisfy the Commission's filing 
requirements for annual reports on Forms 10-K, 10-KSB, 20-F, 40-F, or 
N-CSR in a timely manner.
    Section 802.01E currently provides that if a company fails to 
timely file a periodic annual report with the SEC, the Exchange will 
monitor the company and the status of the filing. If the company fails 
to file the annual report within nine 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 three-month trading 
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, the Exchange will begin suspension and 
delisting procedures in accordance with the procedures in section 
804.00.
    The Exchange believes that there are certain unique listed 
companies that have a position in the market (relating to both the 
nature of their business and their very large publicly-held market 
capitalization) such that their delisting from the Exchange would be 
significantly contrary to the national interest and the interests of 
public investors, notwithstanding a delay in an annual report filing 
that extended beyond one year.
    The Exchange is, therefore, proposing to amend section 802.01E to 
provide that, for these certain unique companies that remain suitable 
for listing given their relative financial health and compliance with 
the NYSE's quantitative and qualitative listing standards, and with 
respect to which there is a reasonable expectation that the company 
will be able to resume timely filings in the future, the

[[Page 69619]]

Exchange may forebear, at its sole discretion, from commencing 
suspension and delisting, notwithstanding their failure to file within 
the time periods specified in section 802.01E. The Exchange will advise 
the SEC of, and publish on the NYSE's Web site, any such determination. 
In addition, the Exchange will reevaluate such determination once every 
three months and, if the Exchange reaffirms its decision to allow 
trading to continue, the Exchange will advise the SEC of, and publish 
on the NYSE's website, that reaffirmation.
    In all such cases, Exchange staff will continue to hold regular 
discussions and meetings with the company's management, directors, 
regulators and advisors to monitor the status of the annual report 
filing, as well as the company's compliance with the NYSE's other 
qualitative and quantitative requirements, and to determine whether to 
allow the company to continue to trade despite the continued failure to 
file an annual report with the SEC. In addition, in order to provide 
investors with appropriate notice that companies have failed to file 
their annual reports with the SEC in a timely manner, the Exchange will 
continue to monitor and disseminate transparent information on the 
failure of such companies to file their annual report with the SEC, 
including through appending an ``.LF'' indicator in the financial 
status field of the company's ticker symbol and distributing that 
information via the low speed ticker and through our data stream to 
market data vendors.
    The NYSE also maintains an up to date list of companies that are 
late in filing their annual reports with the SEC on our Web site at 
http://www.nyse.com. Additionally, each NYSE listed company has a 

unique data page on the site and, when applicable, this page indicates 
that the company is considered a late filer.
    With respect to all companies subject to section 802.01E, the 
Exchange is also proposing to (i) shorten the initial monitoring period 
for companies that miss their Filing Due Date from nine to six months 
and (ii) lengthen from three to six months the additional period that 
the Exchange may grant companies prior to the commencement of 
suspension and delisting procedures. In addition, the Exchange is 
proposing minor amendments to section 802.01E to clarify the 
requirements regarding procedures for press releases relating to late 
filings.\4\
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    \4\ The Commission notes that the Exchange is clarifying the 
type of information that must be included in the press release.
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2. Statutory Basis
    The basis under the Exchange Act for this proposed rule change is 
the requirement under section 6(b)(5) \5\ 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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    \5\ 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

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

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 NYSE consents, the Commission will:
    A. By order approve the 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 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-2005-75 on the subject line.

Paper Comments

    Send paper comments in triplicate to Jonathan G. Katz, Secretary, 
Securities and Exchange Commission, 100 F Street, NE., Washington, DC 
20549-9303. All submissions should refer to File Number SR-NYSE-2005-
75. 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. 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-2005-75 and should be submitted on or before 
December 7, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 05-22777 Filed 11-10-05; 4:38 pm]

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