Document ID: SEC-2008-1345-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2008-10-02T04:00Z

[Federal Register: October 2, 2008 (Volume 73, Number 192)]
[Notices]               
[Page 57397-57399]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02oc08-124]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58649; File No. SR-NYSE-2008-82]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change, 
as Modified by Amendment No. 1, To Modify Its Policy With Respect to 
Legal Opinions in Connection With Listings of Securities

September 25, 2008.
    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 9, 2008, New York Stock Exchange LLC (``NYSE'' or 
``the Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I, 
II, and III below, which Items have been prepared by the Exchange. On 
September 21, 2008, the Exchange filed Amendment No. 1 to the proposed 
rule change.\3\ The Commission is publishing this notice, as amended, 
to solicit comments on the proposal from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the Exchange made technical, non-
substantive corrections to Exhibits 3 and 5.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of 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 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 III below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant aspects of such 
statements.

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 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 III below. The Exchange 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
    The Exchange proposes to amend the Manual by removing the 
provisions throughout Chapter Seven that require issuers to supply 
opinions of counsel to the Exchange in connection with any initial 
listing application or supplemental listing application.\4\
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    \4\ This filing deletes references to the opinion of counsel 
requirements from the ``Reference Guide For Subsequent Listing 
Applications'' section at the front of the Manual and replaces them 
with a requirement (i) furnish the Exchange with copies of opinions 
of counsel filed in connection with recent public offerings or (ii) 
if no opinions of counsel exist, provide to the Exchange a 
certificate of good standing from the company's jurisdiction of 
incorporation. In addition, the filing makes the same modification 
to the following sections of the Manual: 702.04 (Supporting 
Documents); 703.01 (part 2) (General Information); 703.02 (part 3) 
(Stock Split/Stock Rights/Stock Dividend Listing Process); 703.03 
(Short Term Rights Offerings Relating to Listed Securities Listing 
Process); 703.04 (Public Offerings and Private Placement of Common 
Stock Listing Process); 703.05 (Preferred Stock Offerings Listing 
Process); 703.06 (Debt Securities Offerings Listing Process); 703.07 
(Reserves for Convertible Securities Listing Process); 703.08 
(Mergers, Acquisitions and Other Business Combinations Listing 
Process); 703.09 (Stock Option, Stock Purchase and Other 
Remuneration Plans Listing Process); 703.10 (Technical Original 
Listing Process); 703.11 (Supplemental Listing Process); 703.12 
(Warrants Listing Standards); 703.13 (``Special Stocks'' Listing 
Process (Stocks Which Have Periodic Increases in Conversion Rate 
Into Common Stock)); 703.14 (Voting Trust Certificate Listing 
Process); and 903.01 (Format of Original Listing Application).

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[[Page 57398]]

    Exchange rules have long required the delivery of an opinion of 
counsel addressed to the Exchange in connection with each application 
to list securities, including applications to list additional shares of 
a previously listed class.\5\ The Exchange believes that its opinion 
requirement is duplicative of several safeguards that now exist to 
protect investors in listed securities. In particular, an issuer's 
independent auditor reviews the issuance of securities as part of its 
annual audit. Additionally, the underwriters of securities sold in a 
public offering receive legal opinions as to the validity of the 
issuance of the securities they purchase, as well as performing their 
own due diligence on the company and the securities. Furthermore, a 
legal opinion as to the legality of the issuance of the securities 
being registered is delivered to the SEC in connection with the filing 
of any registration statement. Accordingly, the Exchange proposes to 
end its policy of requiring legal opinions in connection with listing 
applications, including applications to list additional shares of a 
previously listed class. In lieu of the existing opinion requirements, 
the Exchange will require issuers to (i) furnish the Exchange with 
copies of opinions of counsel filed in connection with recent public 
offerings or (ii) if no opinions of counsel exist, provide to the 
Exchange a certificate of good standing from the company's jurisdiction 
of incorporation.\6\
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    \5\ In connection with the listing of equity securities, 
including rights, warrants, preferred stock, options, etc., the 
required opinion (as set forth in Section 702.04) relates to: (i) 
The legality of organization of the company; (ii) the authorization 
of the issuance of the securities for which listing application is 
made; (iii) the validity of such securities; (iv) whether shares 
are, or will be when issued, fully-paid and non-assessable; (v) 
whether shareholders are personally liable under the laws of the 
jurisdiction in which the company is organized and the jurisdiction 
in which its principal place of business is located; (vi) the date 
and nature of any order or proceeding of any Federal or State 
regulatory authority prerequisite to issuance of any unissued 
securities covered by the application and, if such steps have not 
been completed, the present status thereof; (vii) whether the shares 
require registration under the Federal securities laws and, if so, a 
statement that the shares are so registered; and (viii) if counsel, 
any partner of such counsel, or any member of a firm rendering the 
opinion is a director or officer of the company, that fact is 
required to be disclosed in the opinion.
    In the case of debt securities, Section 703.06(G) requires an 
opinion of counsel addressing: (i) The legality of organization of 
the company; (ii) the authorization by the Board of Directors, in 
accordance with Exchange policy, of the issuance and listing of the 
securities for which the listing application is made; (iii) the 
validity of such securities; qualification of the indenture under 
the Trust Indenture Act of 1939; and (iv) effectiveness of 
registration of the securities under the Securities Act of 1933, or, 
if not registered, the reasons why not.
    \6\ The Exchange will also put companies on notice of this 
requirement by including a reference to it in the checklist of 
required documentation sent out to listing applicants and included 
on the Exchange's Web site. See the revised list of required 
documentation included in Exhibit 3.
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    The Exchange notes that the Commission approved a rule filing by 
the American Stock Exchange (the ``Amex'') in 2000 to eliminate opinion 
requirements from the Amex Company Guide under the same conditions the 
Exchange is proposing in this filing.\7\ Additionally, to the 
Exchange's knowledge, Nasdaq does not require legal opinions in 
connection with new listings. As such, the Exchange believes that it is 
appropriate to conform its listing procedure in this regard with those 
of its direct competitors. In doing so, the Exchange will avoid the 
possibility of any competitive harm arising out of the imposition of 
this additional burden on issuers.
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    \7\ See Securities Exchange Act Release No. 42539 (March 17, 
2000), 65 FR 15672 (March 23, 2000) (SR-Amex-99-39).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 \8\ of the Act in general and furthers 
the objectives of Section 6(b)(5) \9\ in particular, in that it is 
designed to promote just and equitable principles of trade, to remove 
impediments, and to perfect the mechanism of, a free and open market 
and a national market system, and, in general, to protect investors and 
the public interest. The proposed amendment specifically seeks to 
remove impediments to and perfect the mechanisms of a free and open 
market by conforming the Exchange's listing procedures to those of 
Nasdaq and the Amex, thereby eliminating any competitive disadvantage 
the Exchange may suffer as a result of imposing a legal opinion 
requirement with respect to securities listings. In addition, the 
Exchange's procedures will continue to protect the interests of 
investors by imposing requirements that will ensure that listed 
companies are duly and validly organized and in good standing in their 
jurisdiction of incorporation.
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    \8\ 15 U.S.C. 78f.
    \9\ 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

    Written comments on the proposed rule change were neither solicited 
nor received.

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

    The proposed rule change has taken effect upon filing pursuant to 
Section 19(b)(3)(A) of the Act.\10\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
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    The Exchange asserts that the proposed rule change (i) will not 
significantly affect the protection of investors or the public 
interest, (ii) will not impose any significant burden on competition, 
and (iii) will not become operative for 30 days after the date of this 
filing, or such shorter time as the Commission may designate if 
consistent with the protection of investors and the public interest.
    The Exchange provided the Commission with 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 the filing of the proposed rule change as required by 
Rule 19b-4(f)(6).\11\
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    \11\ 17 C.F.R. 240.19b-4(f)(6).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate 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:

[[Page 57399]]

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-2008-82 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2008-82. 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, 100 F Street, NE., Washington, DC 
20549, 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 self-regulatory organization. 
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-2008-82 
and should be submitted on or before October 23, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-23193 Filed 10-1-08; 8:45 am]

BILLING CODE 8011-01-P