Document ID: SEC-2007-0396-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: NYSE Arca, Inc.
Posted Date: 2007-03-16T04:00Z

[Federal Register: March 16, 2007 (Volume 72, Number 51)]
[Notices]               
[Page 12651-12653]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16mr07-113]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55430; File No. SR-NYSEArca-2007-24]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change To Waive Certain Listing Fees

March 8, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on February 28, 2007, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange''), 
through its wholly owned subsidiary, NYSE Arca Equities, Inc., 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 substantially prepared by the Exchange. The Commission 
is publishing this notice to solicit comment 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 its listing fees to provide that 
there shall be no initial listing fee applicable to (i) Any company 
listing upon emergence from bankruptcy, or (ii) any company listing its 
primary class of common stock that is not listed on a national 
securities exchange but is registered under the Act.
    The text of the proposed rule change is available on the Exchange's 
Web site (http://www.nysearca.com), at the Exchange's Office of the 

Secretary, and

[[Page 12652]]

at the Commission's Public Reference Room.

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 IV 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 its listing fee schedule to provide 
that there shall be no initial listing fee applicable to:
     Any company listing following emergence from 
bankruptcy;\3\ or
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    \3\ The Exchange interprets ``listing following emergence from 
bankruptcy'' to mean that the company lists at the same time it 
emerges from bankruptcy. Telephone conversation between John Carey, 
Assistant General Counsel, NYSE, and Nathan Saunders, Special 
Counsel, Division of Market Regulation, Commission, March 6, 2007.
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     Any company listing its primary class of common stock that 
is not listed on a national securities exchange but is registered under 
the Act.
    If approved by the Commission, the amendments contained in this 
proposal will be applied retroactively as of the date of this filing.
    The proposed rule change will not affect the Exchange's commitment 
of resources to its regulatory oversight of the listing process or its 
regulatory programs. Specifically, companies that benefit from the 
waivers will be reviewed for compliance with Exchange listing standards 
in the same manner as any other company that applies to be listed on 
the Exchange. The Exchange will conduct a full and independent review 
of each issuer's compliance with the Exchange's listing standards.
    In the case of companies listing upon emergence from bankruptcy, 
the Exchange believes that the initial listing fee waiver is justified 
by such companies' unique circumstances. Companies emerging from 
bankruptcy are typically not raising any new capital at the time of 
listing, so the payment of initial listing fees is more burdensome than 
for companies that are listing upon an initial public offering. Also, 
because of the desire in bankruptcy proceedings to ensure that 
creditors are paid as much as possible, such companies are much more 
sensitive to the costs associated with listing. It is frequently 
difficult for such companies to assess what those costs are going to be 
until quite close to their emergence from bankruptcy, as the number of 
shares that will be issued (and therefore the related listing fees) are 
a significant variable in the negotiation of the bankruptcy settlement. 
As bankrupt companies face unique challenges in the listing process and 
the number of companies that will benefit from the fee waiver will be 
very limited, the Exchange does not believe that the treatment this 
proposal would afford to bankrupt companies constitutes an inequitable 
or unfairly discriminatory allocation of fees.
    The Exchange anticipates that a significant percentage of potential 
listings of companies that have a registered class of common stock but 
that are not currently listed on a national securities exchange will be 
formerly listed companies that were delisted as a result of a failure 
to timely file annual reports with the Commission. These are companies 
that were otherwise in good standing with a national securities 
exchange, but fell behind on their reporting obligations under the Act 
because their auditors or the Commission required restatements of their 
financial statements. These companies will re-list on the Exchange as 
soon as their filings are up to date. The Exchange believes that 
waiving initial listing fees for these companies is appropriate and 
does not constitute an inequitable or unfairly discriminatory 
allocation of fees, as such companies had previously paid initial 
listing fees to the Exchange or to another national securities 
exchange, and to make them pay these fees again would further penalize 
them unnecessarily.
    The Exchange does not expect the financial impact of this proposed 
rule change to be material, either in terms of increased levels of 
annual fees from transferring issuers or in terms of diminished initial 
listing fee revenues. A very limited number of companies are qualified 
and seek to list on the Exchange that are either emerging from 
bankruptcy or have a registered class of common stock but are not 
currently listed on another market. Accordingly, the proposed rule 
change will not impact the Exchange's resource commitment to its 
regulatory oversight of the listing process or its regulatory programs.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirement under Section 6(b)(4) \4\ of the Act that an 
exchange have rules that provide for the equitable allocation of 
reasonable dues, fees and other charges among its members and other 
persons using its facilities and the requirement under Section 6(b)(5) 
\5\ of Act that an exchange have rules that are designed to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system and that are not designed to permit unfair 
discrimination between issuers. In light of the unique circumstances of 
companies emerging from bankruptcy and the likelihood that many 
companies listing that have a registered class of common stock but are 
not listed on another market will be previously listed companies 
delisted as late filers, the Exchange believes that the proposed fee 
waiver does not render the allocation of its listing fees inequitable 
or unfairly discriminatory.
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    \4\ 15 U.S.C. 78f(b)(4).
    \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

    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

    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 Exchange 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,

[[Page 12653]]

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 e-mail to rule-comments@sec.gov. Please include 

File Number SR-NYSEArca-2007-24 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-NYSEArca-2007-24. 
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 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-NYSEArca-2007-24 and should be submitted on or before 
April 6, 2007.

    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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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-4786 Filed 3-15-07; 8:45 am]

BILLING CODE 8010-01-P