Document ID: SEC-2009-0630-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Arca, Inc. That Suspends NYSE Arca's Stock Price Continued Listing Standard
Posted Date: 2009-05-08T04:00Z

[Federal Register: May 8, 2009 (Volume 74, Number 88)]
[Notices]               
[Page 21730-21732]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08my09-114]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59854; File No. SR-NYSEArca-2009-29]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NYSE Arca, Inc. That Suspends 
NYSE Arca's Stock Price Continued Listing Standard

May 1, 2009.
    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 April 17, 2009, NYSE Arca, Inc. (``NYSE Arca'' 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 
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, through its wholly-owned subsidiary NYSE Arca 
Equities, Inc. (``NYSE Arca Equities''), proposes to amend its rules 
governing NYSE Arca, LLC (also referred to as the ``NYSE Arca 
Marketplace'') by suspending through June 30, 2009, the application of 
its price criteria for capital and common stock set forth in NYSE Arca 
Equities Rule 5.5(b)(2).The text of the proposed rule change is 
available at the Exchange, the Commission's Public Reference Room, and 
http://www.nyse.com.

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
    In recent months, the U.S. and global equities markets have 
experienced extreme volatility and a precipitous decline in trading 
prices of many securities. In response to these unusual market 
conditions, the NYSE and NASDAQ have suspended the application of their 
respective dollar price continued listing requirements.\3\ NYSE Arca 
proposes to suspend through June 30, 2009, its own dollar price 
requirement as set forth in NYSE Arca Equities Rule 5.5(b)(2). This 
proposed suspension will provide 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.\4\
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    \3\ See Securities Exchange Act Release No. 59510 (March 4, 
2009), 74 FR 10636 (March 11, 2009) (SR-NYSE-2009-21), which 
suspends the NYSE's dollar price continued listing requirement set 
forth in Section 802.01C of the Listed Company Manual through [sic] 
June 30, 2009 (the ``NYSE Amendment''). See Securities Exchange Act 
Release 58809 (October 17, 2008), 73 FR 63222 (October 23, 2008) 
(SR-NASDAQ-2008-082) for the suspension of NASDAQ's bid price and 
market value of publicly held shares through January 16, 2009 (the 
``NASDAQ Amendment''). See, also, Securities Exchange Act Release 
59219 (January 8, 2009), 74 FR 2640 (January 15, 2009), extending 
the application of the NASDAQ Amendment to April 19, 2009. See, 
also, SR-NASDAQ-2009-026 (filed March 18, 2009), proposing to 
further extend the application of the NASDAQ Amendment through July 
19, 2009. NASDAQ's continued listing requirements relating to bid 
price are set forth in NASAQ Marketplace Rules 4310(c)(4), 
4320(e)(2)(E)(ii), 4450(a)(5), 4450(b)(4), and 4450(h)(3) and the 
related compliance periods are set forth in NASDAQ Marketplace Rules 
4310(c)(8)(D), 4320(e)(2)(E)(ii), and 4450(e)(2). NASDAQ's continued 
listing requirements relating to market value of publicly held 
shares are set forth in NASDAQ Marketplace Rules 4310(c)(7), 
4320(e)(5), 450(a)(2), 4450(b)(3) and 4450(h)(2) and the related 
compliance periods are set forth in Rules 4310(c)(8)(B) and 
4450(e)(1).
    \4\ 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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    Under the proposed suspension of the Exchange's stock price 
continued listing standard, companies will not be notified of new 
events of noncompliance with the price requirement during the 
suspension period. Companies that are in a compliance period at the 
time of commencement of the suspension \5\ will still be deemed to have 
regained compliance during the rule suspension period if, at the 
expiration of their respective six-month cure periods

[[Page 21731]]

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 is in a compliance period at the time of 
commencement of the rule suspension can return to compliance during the 
suspension if at the end of any calendar month during the suspension 
such company has a $1.00 closing share price on the last trading day of 
such month and a $1.00 average share price based on the 30 trading days 
preceding the end of such month.\6\ Any company that is 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 stock price continued 
listing standard and receive the remaining balance of its compliance 
period.\7\ Following the temporary rule suspension, any new events of 
noncompliance with the Exchange's stock price continued listing 
standard would be determined based on a consecutive 30 trading-day 
period commencing on July 1, 2009.
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    \5\ The Exchange notes that there is currently one company in a 
compliance period for noncompliance with the dollar price 
requirement and there are not currently any companies in the 
Exchange's delisting appeal process that have been sent a delisting 
notification for noncompliance with the dollar price continued 
listing requirement. The Exchange also notes that it would continue 
to identify companies in a compliance period as below compliance for 
price, including by continuing to append an indicator to the 
company's stock ticker to identify it as being below compliance for 
price and including the company on a list of companies that are 
below compliance for price posted to the Exchange's Web site, unless 
the company regains compliance during the suspension. A company 
would continue to be subject to delisting for failure to comply with 
other listing requirements.
    \6\ A company would continue to be subject to delisting for 
failure to comply with other listing requirements.
    \7\ For example, if a company is four months into its compliance 
period for noncompliance with the price continued listing standard 
when the suspension starts and the company does not regain 
compliance during the suspension, the company would have an 
additional two months starting on July 1, 2009, to regain 
compliance.
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    The proposed suspension of the Exchange's price continued listing 
requirement 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 standards' reinstatement. During the period 
between now and June 30, 2009, the Exchange will consider whether it is 
appropriate to propose further revisions to its continued listing 
requirements.
    The Exchange notes that this filing is based on a NYSE filing, 
pursuant to which the NYSE responded to the current market conditions 
by temporarily suspending its dollar price continued listing 
requirements through [sic] June 30, 2009.\8\ The NYSE dollar price test 
(as set forth in Section 802.01C of the Listed Company Manual) is 
identical to NYSE Arca's price test set forth in NYSE Arca Equities 
Rule 5.5(b)(2).
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    \8\ The Commission notes that NYSE suspended its dollar price 
continued listing requirement until June 30, 2009, not through June 
30, 2009. Accordingly, as stated in NYSE's filing, following the 
temporary suspension, any new events of noncompliance with the 
NYSE's stock price continued listing standard will be determined 
based on a consecutive 30 trading-day period commencing on June 30, 
2009. See NYSE Amendment, supra note 3. In contrast, NYSE Arca's 
suspension will be through June 30, 2009, and following the 
temporary rule suspension, any new events of noncompliance with the 
Exchange's stock price continued listing standard would be 
determined based on a consecutive 30 trading-day period commencing 
on July 1, 2009.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \9\ of the Act, in general, and furthers the 
objectives of Section 6(b)(5) of the Act \10\\\ 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 NYSE Arca 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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    \9\ 15 U.S.C. 78f(b).
    \10\ 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

    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

    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 \11\ and 
Rule 19b-4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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 Exchange has satisfied this requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \13\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \14\ 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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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 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 Arca to immediately implement a temporary 
measure, through June 30, 2009, to suspend its $1.00 price continued 
listing requirement to respond to recent market volatility and 
conditions. The Commission notes that this will provide certain 
companies with immediate relief from receiving a non-compliance or 
delisting notification, or from being delisted, as a result of the 
current market conditions. The Commission notes that this action is 
temporary in nature, and that following the suspension, companies 
currently in the compliance period will resume at the same stage and 
receive the remaining balance of their compliance periods if they 
remain non-compliant with these standards. This will ensure that the 
temporary suspension addresses the concerns to companies and investors 
caused by the current market conditions, and that may result in a 
company's securities becoming non-compliant with the $1.00 price 
requirement, or unable to cure such a deficiency, due to these market 
conditions. The Commission also notes that the proposed rule change is 
substantially similar to the recent Nasdaq and NYSE filings to suspend 
their respective $1.00 price continued listing requirements, and thus, 
raises no new regulatory issues.\15\ For these reasons, the Commission 
designates that

[[Page 21732]]

the proposed rule change become operative immediately upon filing.\16\
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    \15\ See supra note 3.
    \16\ 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 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-2009-29 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-NYSEArca-2009-29. 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 a.m. and 3 p.m. 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-2009-29 and should be submitted on or before 
May 29, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-10689 Filed 5-7-09; 8:45 am]

BILLING CODE 8010-01-P