Document ID: SEC-2012-1594-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE MKT LLC
Posted Date: 2012-09-27T04:00Z

[Federal Register Volume 77, Number 188 (Thursday, September 27, 2012)]
[Notices]
[Pages 59442-59444]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-23766]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67907; File No. SR-NYSEMKT-2012-45]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Amending Sections 
1203(a) and 1205(b) of the NYSE MKT Company Guide (``Company Guide'') 
To Increase the Fees Applicable to Issuers Requesting Review of a 
Determination To Limit or Prohibit the Continued Listing of Their 
Securities on the Exchange

September 21, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on September 7, 2012, NYSE MKT LLC (``NYSE MKT'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II and III below, which 
Items have been prepared by the self-regulatory organization. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Sections 1203(a) and 1205(b) of the 
NYSE MKT Company Guide (``Company Guide'') to increase the fees 
applicable to issuers requesting review of a determination to limit or 
prohibit the continued listing of their securities on the Exchange. The 
text of the proposed rule change is available on the Exchange's Web 
site at www.nyse.com, at the principal office of the Exchange, and at 
the Commission's Public Reference Room.

[[Page 59443]]

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 those 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 parts of such statements.

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

1. Purpose
    Part 12 of the Company Guide provides that issuers may request a 
written or oral hearing to review a determination by the staff of NYSE 
Regulation, Inc. (the ``Staff'') to limit or prohibit the continued 
listing of their securities. A Listing Qualifications Panel (the 
``Panel'') comprised of at least two, but generally three, members of 
the NYSE Amex Committee on Securities (the ``Committee'') conducts the 
hearing. Currently, Section 1203(a) of the Company Guide provides that 
the fee charged to the issuer for a written hearing is $4,000, and the 
fee for an oral hearing is $5,000. Issuers may also request a review of 
a Panel decision by the Committee as a whole. The Committee as a whole 
considers the written record and, in its discretion, may hold 
additional oral hearings. Currently, Section 1205(b) of the Company 
Guide provides that the fee for the Committee's review is $5,000. The 
Exchange last increased the delisting appeal fees in March 2004.\3\
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    \3\ See Securities Exchange Act Release No. 49344 (March 1, 
2004), 69 FR 10773 (March 8, 2004) (SR-Amex-2003-111).
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    The Exchange believes that the fees should be increased at this 
time because the costs incurred in preparing for and conducting appeals 
have increased significantly since the fees were last revised in 2004.
    The Exchange believes that the costs of an appeal typically far 
exceed the current permitted fees. In the case of both written hearings 
and oral hearings, as well as all appeals heard by the Committee as a 
whole, these costs include the utilization of NYSE Regulation staff 
resources to prepare for appeals, including the drafting of written 
submissions, the time devoted to the coordination of appeals by staff 
from NYSE Euronext's Office of the Corporate Secretary and Legal 
Department, and the time spent by attorneys in the Legal Department in 
their role as counsel to the Committee. In addition, in both written 
and oral hearings, as well as appeals heard by the Committee as a 
whole, the Exchange incurs expenses in relation to the copying and 
mailing of documents and other miscellaneous expenses. In the case of 
oral hearings by a Panel or the Committee as a whole, the Exchange also 
incurs the additional cost of engaging a court reporter and utilizes 
Exchange staff and other resources in hosting the oral hearing at the 
offices of the Exchange.
    All of the foregoing expenses have increased since 2004, but 
another significant factor is that, in many cases, appeals have become 
more complicated and contentious since the fees were last modified. 
Consequently, NYSE Regulation staff devote more time now to a typical 
appeal than was historically the case, including more involvement by 
NYSE Regulation senior management and attorneys within NYSE Regulation. 
Furthermore, in response to the increasing complexity of appeals, NYSE 
Regulation has in recent times engaged outside counsel in connection 
with appeals more frequently than was historically the case. 
Accordingly, the Exchange proposes to increase the fees for Panel 
hearings to $8,000 for a written hearing and $10,000 for an oral 
hearing and for Committee appeals to $10,000. The text of the proposed 
amendments to Sections 1203.(a) [sic] and 1205(b) will specify that the 
revised fees will only be applicable to issuers that initially submit 
their hearing request on or after September 17, 2012. The current fees 
will remain in effect for any hearing requests submitted before that 
date.
    While the Exchange does not expect that the proposed revised fees 
would cover all of its costs associated with the appeal process, the 
proposed revised fees would cover a much larger portion of those costs 
than the current appeal fees. In that regard, the Exchange notes that, 
while the proposed fees would be twice the amount of the current fees, 
they would be consistent with or lower than the appeal fees of other 
national securities exchanges, depending on the process that the other 
national securities exchange uses. For example, Section 804.00 of the 
NYSE Listed Company Manual provides that a listed company must pay a 
$20,000 fee in connection with a delisting appeal.
    The Exchange also believes that the proposed fee increases are 
consistent with the provision by the Exchange of a fair procedure for 
companies to challenge a delisting determination. In particular, the 
Exchange believes that the proposed amended fees should not deter 
listed issuers from availing [sic] of their due process rights to 
appeal Exchange delisting determinations because the increased fees 
will still be set at a level that will be affordable for listed 
companies.
2. Statutory Basis
    Securities Exchange Act of 1934 (the ``Act''),\4\ in general, and 
furthers the objectives of Section 6(b)(5) of the Act,\5\ in 
particular, in that it is 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 a national market system, and, in 
general, to protect investors and the public interest.
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    \4\ 15 U.S.C. 78a.
    \5\ 15 U.S.C. 78f(b)(5).
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    Specifically, the proposed fee increases are consistent with the 
investor protection objectives of Section 6(b)(5) in that they are 
designed to provide adequate resources for appropriate preparation for 
and conduct of Panel hearings and Committee appeals, which help to 
assure that the Exchange's continued listing standards are properly 
enforced and investors in companies subject to delisting are protected.
    In addition, the Exchange believes that the proposed rule change is 
consistent with Section 6(b)(4) of the Act \6\ in that it provides for 
the equitable allocation of reasonable dues, fees and other charges 
among members and issuers and other persons using its facilities. In 
particular, the Exchange notes that the proposed fee increases 
constitute a reasonable allocation of fees under Section 6(b)(4) 
because: (i) Even after the proposed increases, the Exchange's appeal 
fees will still only partially cover its actual costs of conducting 
appeals; and (ii) the Exchange only charges appeal fees to companies 
that make an appeal.
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    \6\ 15 U.S.C. 78f(b)(4).
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    The Exchange also believes that the proposed fee increases are 
consistent with Section 6(b)(7) of the Act \7\ in that the proposed 
fees are in accordance with the provisions of Section 6(d) of the 
Act,\8\ and in general, are consistent with the provision by the 
Exchange of a fair procedure for the prohibition or limitation by the 
exchange of any

[[Page 59444]]

person with respect to access to services offered by the Exchange. In 
particular, the Exchange believes that the proposed amended fees should 
not deter listed issuers from availing [sic] of their due process 
rights to appeal Exchange delisting determinations because the 
increased fees will still be set a level that will be affordable for 
listed companies.
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    \7\ 15 U.S.C. 78f(b)(7).
    \8\ 15 U.S.C. 78f(d).
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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

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \9\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \10\ thereunder, because it establishes a due, fee, or other charge 
imposed by NYSE MKT.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such 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 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 email to rule-comments@sec.gov. Please include 
File Number SR-NYSEMKT-2012-45 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-NYSEMKT-2012-45. This 
file number should be included on the subject line if email 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 Web site viewing and 
printing 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 publicly available. All 
submissions should refer to File Number SR-NYSEMKT-2012-45 and should 
be submitted on or before October 18, 2012.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-23766 Filed 9-26-12; 8:45 am]
BILLING CODE 8011-01-P