Document ID: SEC-2009-0982-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by New York Stock Exchange LLC To Extend Its Suspension ofits Dollar Stock Price Continued Listing Standard to July 31, 2009
Posted Date: 2009-07-16T04:00Z

[Federal Register: July 16, 2009 (Volume 74, Number 135)]
[Notices]               
[Page 34606-34608]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16jy09-86]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60273; File No. SR-NYSE-2009-64]

 
 Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC To 
Extend Its Suspension of its Dollar Stock Price Continued Listing 
Standard to July 31, 2009

July 9, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby 
given that on July 2, 2009, New York Stock Exchange LLC (the ``NYSE'' 
or the ``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The Exchange 
has designated this proposal eligible for immediate effectiveness 
pursuant to Rule 19b-4(f)(6) \3\ under the Exchange Act. 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.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend through July 31, 2009, the 
suspension of the application of its price criteria for capital and 
common stock set forth in Section 802.01C of the Exchange's Listed 
Company Manual (the ``Manual'').\4\
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    \4\ The Commission notes that the suspension period under this 
filing commenced at the time that the proposed rule change was filed 
on July 2, 2009 and will continue through July 31, 2009.
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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 these statements may be examined at 
the places specified in Item IV below. The NYSE 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
    From mid-2008 through the first quarter of 2009, the U.S. and 
global equities markets experienced extreme volatility and a 
precipitous decline in trading prices of many securities. As a 
consequence of these market conditions, the Exchange experienced an 
unusually high number (as compared to historical levels) of listed 
companies having stock prices that either fell below the Exchange's 
$1.00 price requirement for capital and common stock set forth in 
Section 802.01C of the Manual (i.e., the average closing price of their 
stock has fallen below $1.00 over a consecutive 30 trading day period) 
(the NYSE's ``dollar price continued listing standard'').\5\ In 
response, the Exchange suspended the application of the dollar price 
continued listing standard until June 30, 2009.\6\ This suspension 
provided temporary relief to companies in response to the extreme 
volatility and a precipitous decline in trading prices of many 
securities experienced in the U.S. and global equities markets, which 
the Commission had acknowledged constituted a threat to the fair and 
orderly functioning of the securities markets and could lead to a 
crisis of confidence among investors regarding the viability of 
companies whose stock prices have declined significantly.\7\
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    \5\ Section 802.01C provides that a company will be considered 
to be below compliance standards if the average closing price of a 
security as reported on the consolidated tape is less than $1.00 
over a consecutive 30 trading day period. Once notified, the company 
must bring its share price and average share price back above $1.00 
by six months following receipt of the notification. A company is 
not eligible to follow the cure procedures outlined in Sections 
802.02 and 802.03 with respect to this criteria. The company must, 
however, notify the Exchange, within 10 business days of receipt of 
the notification, of its intent to cure this deficiency or be 
subject to suspension and delisting procedures. In the event that at 
the expiration of the six-month cure period, both a $1.00 share 
price and a $1.00 average share price over the preceding 30 trading 
days are not attained, the Exchange will commence suspension and 
delisting procedures. Notwithstanding the foregoing, if a company 
determines that, if necessary, it will cure the price condition by 
taking an action that will require approval of its shareholders, it 
must so inform the Exchange in the above referenced notification, 
must obtain the shareholder approval by no later than its next 
annual meeting, and must implement the action promptly thereafter. 
The price condition will be deemed cured if the price promptly 
exceeds $1.00 per share, and the price remains above the level for 
at least the following 30 trading days.
    \6\ See Securities Exchange Act Release No. 59510 (March 4, 
2009), 74 FR 10636 (March 11, 2009) (SR-NYSE-2009-21).
    \7\ See, e.g., Securities Exchange Act Release No. 58588 
(September 18, 2008), 73 FR 55174 (September 24, 2008) (``The 
Commission is aware of the continued potential of sudden and 
excessive fluctuations of securities prices and disruption in the 
functioning of the securities markets that could threaten fair and 
orderly markets. Given the importance of confidence in our financial 
markets as a whole, we have also become concerned about sudden and 
unexplained declines in the prices of securities. Such price 
declines can give rise to questions about the underlying financial 
condition of an issuer, which in turn can create a crisis of 
confidence without a fundamental underlying basis. This crisis of 
confidence can impair the liquidity and ultimate viability of an 
issuer, with potentially broad market consequences.'').
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    Since the initial suspension of the Exchange's dollar price 
continued listing standard, market conditions have improved somewhat 
and a significant number of companies have cured their noncompliance 
with that standard. However, major market indices have recovered only a 
fraction of their losses and are still significantly below the levels 
of the first half of 2008.

[[Page 34607]]

Consequently, there are still a significantly larger number of listed 
companies that are below compliance with the dollar price continued 
listing standard than the historical norm. As such, the Exchange 
proposes to extend the period of the suspension by an additional month, 
through July 31, 2009. The Exchange believes that doing so will 
potentially enable a number of companies that are currently below 
compliance with the dollar price continued listing standard, but 
otherwise suitable for auction market trading, to regain compliance, as 
has been the case with a significant number of companies during the 
initial period of the suspension.
    Under the proposed extended suspension of the Exchange's dollar 
price continued listing standard, companies will not be notified of new 
events of noncompliance with that standard during the suspension 
period. Companies that were in a compliance period at the time of 
commencement of the suspension \8\ will still be deemed to have 
regained compliance during the rule suspension period if, at the 
expiration of their respective six-month cure periods established prior 
to the commencement of the rule suspension, they have a $1.00 closing 
share price on the last trading day of the period and a $1.00 average 
share price based on the preceding 30 trading days. In addition, any 
company that was in a compliance period at the time of commencement of 
the rule suspension can return to compliance if on July 31, 2009, such 
company has a $1.00 closing share price and a $1.00 average share price 
based on the 30 trading days preceding the end of such month.\9\ Any 
company that was in a compliance period at the time of commencement of 
the rule suspension that does not regain compliance during the 
suspension period will recommence its compliance period upon 
reinstitution of the dollar price continued listing standard and 
receive the remaining balance of its compliance period.\10\ Following 
the temporary rule suspension, any new events of noncompliance with the 
Exchange's dollar price continued listing standard will be determined 
based on a consecutive 30 trading-day period commencing on August 1, 
2009.
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    \8\ The Exchange notes that there are not currently any 
companies in the Exchange's delisting appeal process whose stock is 
continuing to trade on the Exchange that have been sent a delisting 
notification for noncompliance with the dollar price continued 
listing standard. The Exchange also notes that it is continuing to 
identify companies in a compliance period as below compliance with 
the dollar price continued listing standard, including by continuing 
to append an indicator to the company's stock ticker to identify it 
as being below compliance with that standard and including the 
company on a list of companies that are below compliance with that 
standard posted to the Exchange's Web site, unless the company 
regains compliance during the suspension. A company will continue to 
be subject to delisting for failure to comply with other listing 
requirements.
    \9\ A company will continue to be subject to delisting for 
failure to comply with other listing requirements.
    \10\ For example, if a company was four months into its 
compliance period for noncompliance with the dollar price continued 
listing standard when the suspension started and the company does 
not regain compliance during the suspension, the company will have 
an additional two months starting on August 1, 2009, to regain 
compliance.
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    The proposed extended suspension of the Exchange's dollar price 
continued listing standard will enable companies to remain listed in 
the current difficult market conditions with the prospect of a future 
recovery in their stock prices enabling them to comply with the 
applicable listing requirements upon the standard's reinstatement. 
During the period between now and July 31, 2009, the Exchange will 
consider whether it is appropriate to propose further revisions to 
these requirements.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \11\ of the Securities Exchange Act of 1934 (the 
``Act''),\12\ in general, and furthers the objectives of Section 
6(b)(5) \13\ of the Act in particular in that it is designed to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in regulating, clearing, settling, 
processing information with respect to, and facilitating transactions 
in securities, 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. The proposed rule change is 
designed to remove uncertainty regarding the ability of certain 
companies to remain listed on the NYSE during the current highly 
unusual market conditions, thereby protecting investors, facilitating 
transactions in securities, and removing an impediment to a free and 
open market.
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    \11\ 15 U.S.C. 78f(b).
    \12\ See 15 U.S.C. 78a.
    \13\ 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 Exchange Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action
    Because the proposed rule change: (i) Does not significantly affect 
the protection of investors or the public interest; (ii) does not 
impose any significant burden on competition; and (iii) does not become 
operative for 30 days after the date of the filing, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest, the proposed rule change has 
become effective pursuant to Section 19(b)(3)(A) of the Act \14\ and 
Rule 19b-4(f)(6) thereunder.\15\
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(6). Pursuant to Rule 19b-4(f)(6)(iii) 
under the Act, the Exchange is required to give the Commission 
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 filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Commission has determined to waive this requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \16\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \17\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has requested that the Commission waive the 30-day operative delay.
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    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because it will allow NYSE to extend, through July 31, 2009, the 
temporary suspension of its $1.00 price continued listing requirement 
for capital and common stock. The Commission notes that the extension 
of the temporary suspension will continue to provide certain companies 
with temporary relief from receiving a non-compliance or delisting 
notification, or from being delisted, and will provide some additional 
time to allow companies to regain compliance after the market 
volatility and conditions experienced earlier this year and last fall. 
The Commission notes that this action is temporary in nature, and that 
following the suspension, companies currently in

[[Page 34608]]

the compliance period will resume at the same stage and receive the 
remaining balance of its compliance period if they remain non-compliant 
with these standards. For these reasons, the Commission designates that 
the proposed rule change become operative immediately upon filing.\18\
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    \18\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate the 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 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-2009-64 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-NYSE-2009-64. 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, on official business 
days between the hours of 10 am and 3 pm. Copies of the 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 
available publicly. All submissions should refer to File Number SR-
NYSE-2009-64 and should be submitted on or before August 6, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-16859 Filed 7-15-09; 8:45 am]

BILLING CODE 8010-01-P