Document ID: SEC-2009-0352-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes:  New York Stock Exchange LLC
Posted Date: 2009-03-17T04:00Z

[Federal Register: March 17, 2009 (Volume 74, Number 50)]
[Notices]               
[Page 11391-11392]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17mr09-71]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59559; File No. SR-NYSE-2009-03]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; Order 
Approving Proposed Rule Change To Adopt Listing Fees for Securities 
Listed Under Section 703.21 and 703.22 and Traded on NYSE Bonds

March 11, 2009.

I. Introduction

    On January 9, 2009, the 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 to modify the listing fees for securities that are 
listed under the Exchange's Listed Company Manual (``Manual'') Sections 
703.21 and 703.22 and are traded on NYSE Bonds. The proposed rule 
change was published for comment in the Federal Register on February 4, 
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. 59313 (January 28, 
2009), 74 FR 6067.
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II. Description of the Proposal

    Currently, securities listed on the NYSE pursuant to Sections 
703.21 (Equity-Linked Debt Securities) and 703.22 of the Manual (Equity 
Index-Linked Securities, Commodity-Linked Securities and Currency-
Linked Securities) and traded on NYSE Bonds are subject to the fees set 
forth in Section 902.09 of the Manual.\4\ Section 902.09 establishes 
various levels of fees based on the number of shares outstanding, with 
a minimum initial listing fee of $5,000 (for one million securities or 
fewer) and a maximum initial listing fee of $45,000 (for over 15 
million securities). The minimum annual listing fee under Section 
902.09 is $10,000 (for 6 million securities or fewer), and the maximum 
annual listing fee is $55,000 (for more than 50 million securities).
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    \4\ The Exchange recently added securities listed under Sections 
703.21 and 703.22 and traded on NYSE Bonds to those securities 
subject to the fees set forth in Section 902.09. See Securities 
Exchange Act Release No. 58599 (September 19, 2008), 73 FR 55883 
(September 26, 2008) (SR-NYSE-2008-56).
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    The Exchange proposes to establish a new section, proposed Section 
902.10, in the Manual establishing fees payable in connection with the 
listing of securities that are listed under Section 703.21 and Section 
703.22 and are traded on NYSE Bonds.\5\ Under proposed Section 902.10, 
the initial listing fee for securities listed under Sections 703.21 and 
703.22 and traded on NYSE Bonds will be a flat fee of $5,000 and the 
annual fee will be a flat fee of $5,000, regardless of the number of 
securities outstanding.
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    \5\ The proposed rule change also amends Section 902.09 to 
remove references to the securities that will be subject to the fees 
under proposed Section 902.10.
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    The Exchange stated that it is adopting a low level of listing fees 
for these securities because it believes doing so will make an exchange 
listing attractive in connection with offerings where listing is not 
crucial to a successful marketing of the securities. The Exchange notes 
that, in order to be listed on NYSE Bonds, a security must have a 
$1,000 denomination, and typically, index-linked securities and equity-
linked securities with $1,000 denominations are marketed to 
institutional investors rather than retail investors. Because these 
purchasers are less concerned that securities they invest in should 
have an exchange listing, the Exchange notes that these securities are 
generally not listed on a national securities exchange. In addition, 
the Exchange notes that securities listed on NYSE Bonds do not have the 
benefit of a Designated Market Maker and, as such, the Exchange incurs 
lower regulatory and administrative costs in connection with such 
securities than would be the case with floor-traded securities. For the 
reasons noted above, the Exchange asserts that the proposed fees are 
set at a level that reflects the lower costs incurred by the Exchange 
in connection with the trading of securities on NYSE Bonds than on the 
equities trading floor, while remaining attractive to issuers for whom 
an exchange listing is not crucial.

III. Discussion

    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 
and, in particular, the requirements of Section 6(b) of the Act \6\ and 
the rules and regulations thereunder. Specifically, the Commission 
finds that the proposal is consistent with Sections 6(b)(4) \7\ and 
6(b)(5) \8\ of the Act, which require 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 are designed, among other things, to promote just and equitable 
just and equitable principles of trade, to remove impediments to, and 
perfect the mechanism of, a free and open market and a national market 
system, to protect investors and the public interest, and are not 
designed to permit unfair discrimination between customers, issuers, 
brokers or dealers.\9\
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
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    The Commission believes that the new fees set forth for securities 
listed under Sections 703.21 and 703.22 of the Manual and traded on 
NYSE Bonds are consistent with the Act. The Commission notes that the 
adoption of new Section 902.10 will not result in any issuer paying 
higher initial listing fees, as the proposed flat initial listing fee 
of $5,000 is the same as the current minimum charged under Section 
902.09. Accordingly, most issuers will

[[Page 11392]]

pay less than would currently be the case under Section 902.09. 
Similarly, all issuers will be subject to lower annual fees, as the 
proposed flat rate of $5,000 is less than the current minimum of 
$10,000 charged under Section 902.09. The Commission notes that the 
Exchange represents that, since it added securities listed under 
Sections 703.21 and 703.22 and traded on NYSE Bonds to Section 902.09 
of the Manual,\10\ the Exchange has not listed any such securities, and 
therefore no issuers have been charged those higher fees.\11\ The 
Commission also notes that the Exchange has stated that it incurs lower 
regulatory and administrative costs in connection with such securities 
and that the proposed fees are set at a level that reflects these lower 
costs. Therefore, the Commission expects that the reduced fees should 
not affect the Exchange's ability to finance its regulatory activities. 
Based on the above, the Commission believes the proposed fee changes 
meet the statutory standards \12\ that exchange rules provide for an 
equitable allocation of reasonable dues, fees and other charges among 
issuers, and do not unfairly discriminate between issuers.
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    \10\ See supra note 4.
    \11\ See e-mail from John Carey, Chief Counsel--U.S. Equities, 
NYSE, to Sara Hawkins, Special Counsel, Division of Trading and 
Markets, Commission, dated March 9, 2009.
    \12\ See Sections 6(b)(4) and 6(b)(5) of the Act, 15 U.S.C. 
78f(b)(4) and 78f(b)(5).
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    For the reasons set forth above, the Commission finds that the 
proposed rule change is consistent with the Act.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\13\ that the proposed rule change (SR-NYSE-2009-03) be, and hereby 
is, approved.
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    \13\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-5717 Filed 3-16-09; 8:45 am]

BILLING CODE 8011-01-P