Document ID: SEC-2010-0097-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; New York Stock Exchange LLC; Order Approving Proposed Rule Change Amending Its Listing Fees for Structured Products
Posted Date: 2010-01-19T05:00Z

[Federal Register Volume 75, Number 11 (Tuesday, January 19, 2010)]
[Notices]
[Pages 2899-2900]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-821]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61333; File No. SR-NYSE-2009-117]

Self-Regulatory Organizations; New York Stock Exchange LLC; Order 
Approving Proposed Rule Change Amending Its Listing Fees for Structured 
Products

January 12, 2010.

I. Introduction

    On November 19, 2009, New York Stock Exchange LLC (``NYSE'' 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

[[Page 2900]]

amending its maximum fee for structured products. The proposed rule 
change was published in the Federal Register on December 8, 2009.\3\ 
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\ See Securities Exchange Act Release No. 61091 (December 1, 
2009), 74 FR 64797 (hereinafter referred to as ``Notice'').
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II. Description of the Proposal

    The Exchange proposes to apply a maximum listing fee in any 
calendar year (including initial and annual listing fees) of $500,000 
in connection with the listing under Section 902.05 of the Listed 
Company Manual (the ``Manual'') of any individual issuance of 
securities, with retroactive application to any securities listed on or 
after the date of November 19, 2009. Currently, Section 902.05 sets 
forth listing fees applicable to securities traded on the equity floor 
of the Exchange and listed under Section 703.18, the equity criteria 
set out in Section 703.19, and Section 703.21. Additionally, Section 
902.05 provides that issuers of ``retail debt securities'' are subject 
to an annual maximum aggregate listing fee of $500,000 for all retail 
debt securities issued in a calendar year. Further, under Section 
902.02 of the Manual, companies are subject to the maximum of $500,000 
per issuer for initial and annual fees payable on listed equity 
securities. Under Sections 902.02 and 902.05, the total maximum fee of 
$500,000 billable to an issuer in a calendar year under the fee cap in 
Section 902.02 includes all annual fees billed to an issuer for listed 
retail debt securities. However, securities listed under Section 
902.05, other than retail debt securities, are not subject to the 
maximum fees set forth in Section 902.02 or any maximum fee established 
in Section 902.05.
    The Exchange proposes to establish a maximum fee in any calendar 
year (including both initial and annual listing fees) per issuance 
listed under Section 902.05 of $500,000. In the Notice, the Exchange 
stated that by applying a maximum fee, the Exchange would rectify an 
anomaly under the Exchange's fee structure, whereby issuers of 
securities listed under Section 902.05 (other than retail debt 
securities), could pay fees in excess of $500,000, while the fees for 
all other categories of securities would be capped. The Exchange 
further represented in its filing that it did not believe that any 
revenue it would forego as a result of the proposed fee cap would 
negatively affect its ability to fund its regulatory program.

III. Discussion and Commission's Findings

    After careful review, 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. 
Specifically, the Commission finds that the proposal is consistent with 
Sections 6(b)(4) and (b)(5) of the Act,\4\ which require, among other 
things, that the rules of an exchange (i) provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and issuers and other persons using its facilities, and (ii) 
are not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \4\ 15 U.S.C. 78f(b)(4) and (b)(5).
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    As noted above, the NYSE fee cap for structured products listed 
under Section 902.05 of the Manual applies to any individual issuance 
of securities. This is in contrast to the $500,000 maximum total fee 
billed to an issuer for generally all listed equity issuances in a 
calendar year.\5\ According to the Exchange, it is appropriate to have 
a separate fee cap for each individual issuance of structured products, 
as many companies list multiple new classes of structured products 
within a calendar year, requiring the repeated utilization of the 
Exchange's operational and regulatory resources to a degree that is not 
normally the case with respect to equity securities subject to the cap 
under Section 902.02. Particularly, the Exchange states that no company 
will pay a higher initial or annual listing fees in connection with the 
listing of structured products as a result of the proposed amendment 
and some companies will pay less if their fees in relation to an 
individual structured product would exceed $500,000 in the absence of 
the proposed cap.
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    \5\ See Section 902.02 of the Manual.
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    Finally, the Exchange believes that the application of the maximum 
listing fee, as proposed, should be retroactively applied to any 
securities listed on or after November 19, 2009, as it will enable 
companies to benefit from the proposed fee cap without having to delay 
their listing until after Commission approval solely for the purpose of 
benefitting from the fee reduction.
    Based on the above, the Commission believes that the Exchange's 
proposed rule change provides for the equitable allocation of 
reasonable dues, fees, and other charges among issuers, in that it 
applies uniformly to all companies listing structured products. The 
Commission also believes that the proposal does not unfairly 
discriminate between issuers as all companies will be subject to the 
same fee schedule. While the Commission recognizes that the fee cap 
proposal for structured products is applied per issuance, unlike the 
aggregated fee cap for all equity securities in Section 902.02, the 
Exchange has provided a reasonable justification for that difference 
and therefore, we find that it meets the requirements under Sections 
6(b)4 and 6(b)(5) of the Act. The Commission notes that the proposal 
caps the maximum amount payable by issuers for the listing of 
structured products. The Commission further notes that the Exchange has 
represented that despite any reduction, the Exchange will continue to 
have sufficient revenue to continue to adequately fund its regulatory 
activities. Finally, the Commission believes that the proposed maximum 
listing fees for structured products is appropriate and, as proposed by 
the Exchange, can be applied retroactively to any securities listed on 
or after November 19, 2009, because no company will be subject to 
increased fees as a result of the proposal and as noted above, some 
companies may pay less than currently required under the existing fees. 
Further, it will allow companies that have listed new classes of 
securities after the date of filing of this proposed rule change to 
benefit from any applicable reduction in listing fees. The Commission 
also notes that the change, including the retroactive effect, was 
published for notice and comment in the Federal Register and we did not 
receive any comments.
    For the foregoing reasons, the Commission finds that the proposed 
rule change is consistent with the Act.\6\
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    \6\ 15 U.S.C. 78f(b)(4). In approving the proposed rule change, 
the Commission has considered the proposed rule's impact in 
efficiency, competition and capital formation. See 15 U.S.C. 78c(f).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (SR-NYSE-2009-117) be, and it 
hereby is, approved.
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    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-821 Filed 1-15-10; 8:45 am]
BILLING CODE 8011-01-P