Document ID: SEC-2012-1706-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2012-10-16T04:00Z

[Federal Register Volume 77, Number 200 (Tuesday, October 16, 2012)]
[Notices]
[Pages 63404-63406]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-25321]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68017; File No. SR-NYSE-2012-47]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Section 902.02 of the New York Stock Exchange Listed Company 
Manual Regarding Waivers for Certain Listing Fees

October 9, 2012.
    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 25, 2012, 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. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Section 902.02 of the New York Stock 
Exchange Listed Company Manual.
    The text of the proposed rule change is available on the Exchange's 
Web site at www.nyse.com, at the principal office of the Exchange, and 
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 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Listed Company Manual and to 
implement the proposed changes immediately upon filing.
    The Exchange proposes to amend Section 902.02 of the Listed Company 
Manual, which currently provides, in part, that Listing Fees are waived 
for issuers (i) listing following emergence from bankruptcy; (ii) 
listing a class of stock that is not listed on a national securities 
exchange but is registered under the Securities Exchange Act of 1934 
(the ``Act''); or (iii) transferring the listing of any class of equity 
securities, any structured product or any closed-end fund from any 
other national securities exchange.
    The Exchange proposes to specify that waiver (i) would only be 
applicable to an issuer that is listing within 36 months following 
emergence from bankruptcy and that has not had a security listed on a 
national securities exchange during such period. In addition, the 
Exchange proposes to specify that waiver (ii) would only be applicable 
to an issuer that is relisting a class of stock that is registered 
under the Act that was delisted from a national securities exchange and 
only if such delisting was (a) within the previous 12 calendar months, 
and (b) due to the issuer's failure to file a required periodic 
financial report with the Commission or other appropriate regulatory 
authority.\3\ In addition to the substantive changes proposed herein 
for Section 902.02 of the Listed Company Manual, the Exchange also 
proposes certain non-substantive changes.\4\
---------------------------------------------------------------------------

    \3\ As a result, this waiver would no longer apply to an issuer 
listing a class of stock that is registered under the Act and (i) 
was delisted from a national securities exchange within the previous 
12 calendar months for a non-financial-reporting reason, (ii) was 
not listed on a national securities exchange within the previous 12 
calendar months, or (iii) is being listed on a national securities 
exchange for the first time. The Exchange notes that the NASDAQ 
Stock Market LLC (``NASDAQ'') similarly waives the ``entry'' and 
``application'' fees for issuers that were suspended and/or delisted 
from NASDAQ solely for their failure to file a required periodic 
financial report with the Commission or other appropriate regulatory 
authority. See NASDAQ IM-5900-5 (Waiver of Fees upon Relisting for 
Companies Removed for Late Filings). The Exchange is not proposing 
any changes to waiver (iii) to Listing Fees.
    \4\ First, the Exchange proposes to remove obsolete text that 
provides that, with retroactive effect from January 1, 2008, issuers 
transferring the listing of their primary class of common shares 
from NYSE Alternext US (which is now known as NYSE MKT LLC (``NYSE 
MKT'')) are not required to pay Annual Fees with respect to that 
primary class of common shares or any other class of securities 
transferred in conjunction therewith for the remainder of the 
calendar year in which the transfer occurs. Instead, the Exchange 
proposes to include the reference to NYSE MKT with an existing 
reference to NYSE Arca, Inc. (``NYSE Arca'') that similarly provides 
that issuers transferring the listing of their primary class of 
common shares from NYSE Arca are not required to pay Annual Fees 
with respect to that primary class of common shares or any other 
class of securities transferred in conjunction therewith for the 
remainder of the calendar year in which the transfer occurs. The 
Exchange proposes to relocate the combined NYSE Arca and NYSE MKT 
reference under the ``Annual Fees'' subheading of Section 902.02 of 
the Listed Company Manual, where it is more appropriate. Second, the 
Exchange proposes that, instead of using an asterisk to mark the 
text that provides that none of the Listing Fee waivers are 
applicable to the transfer of any class of securities if the 
issuer's primary class of common stock remains listed on another 
national securities exchange, such text would be moved within the 
main body of text describing the waivers. Additionally, ``transfer'' 
would be changed to ``listing,'' which would more accurately 
describe the process. Finally, the Exchange proposes to correct a 
cross-reference to the one-time special charge payable in connection 
with the listing of any new class of common shares. The reference 
currently states that the special charge is $37,500, but the actual 
amount is $50,000, as provided in Section 902.03, under ``Listing 
Fee Schedule.'' See Securities Exchange Act Release No. 60868 
(October 22, 2009), 74 FR 55883 (October 29, 2009) (SR-NYSE-2009-
83).
---------------------------------------------------------------------------

    The Exchange does not expect the financial impact of this proposed 
rule change to be material in terms of the level of Listing Fees 
collected from issuers on the Exchange. Specifically, the Exchange 
anticipates that only a very limited number of issuers will be 
qualified and seek to list on the Exchange that are eligible to qualify 
for the waivers, as amended. Accordingly, the Exchange believes that 
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 Section 6(b) of the Act,\5\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act,\6\ in particular, because it 
provides for the equitable allocation of reasonable dues, fees, and 
other charges among its members, issuers and other persons using its 
facilities and does not unfairly discriminate between customers, 
issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that it is reasonable to waive the Listing 
Fees for an issuer within 36 months following emergence from 
bankruptcy, so long as such issuer has not had a security listed

[[Page 63405]]

on a national securities exchange during such period, because this will 
incentivize such issuers to list their security on the Exchange, which 
will result in increased transparency and liquidity with respect to the 
issuer's security, thereby benefiting investors. In this regard, the 
Exchange notes that the issuer, like all other listing applicants, 
would be required to satisfy the Exchange's listings standards as well 
as the other governance requirements and standards that the Exchange 
requires of issuers listed on the Exchange. Accordingly, the Exchange 
believes that it is in the public's interest, and the interest of the 
issuer, to provide an opportunity for the increased transparency and 
liquidity that is attendant with listing on the Exchange and therefore 
that it is reasonable to waive the Listing Fees for such issuers. The 
Exchange believes that the number of additional issuers that will 
qualify for this waiver, as proposed, will be limited. The Exchange 
also believes that limiting the waiver to 36 months following emergence 
from bankruptcy is reasonable because, in the Exchange's opinion, it is 
a period of time that is sufficient for the issuer to proceed with its 
reorganization and meet the Exchange's qualifications for listing.
    The Exchange also believes that it is reasonable to limit the 
waiver to issuers that have emerged from bankruptcy but have not yet 
had a security listed on a national securities exchange during such 
period because, if an issuer has already listed its security post-
emergence, it has already exposed itself to the requirements and 
transparency associated with listing on a national securities exchange, 
which is what the Exchange is incentivizing by waiving the Listing 
Fees. The Exchange also believes that this is equitable and not 
unfairly discriminatory because the goal of the waiver is to 
incentivize listing, and the transparency and public benefits (e.g., 
increased liquidity) that is attendant therewith. Accordingly, these 
goals would already be achieved for an issuer that has already listed 
on another national securities exchange post-emergence, and to waive 
the Listing Fees would therefore be inconsistent with the waiver's 
purpose.
    The Exchange also believes that it is reasonable to provide a 
waiver of the Listing Fees to an issuer listing a class of stock that 
is registered under the Act that was delisted from a national 
securities exchange if such delisting was (a) within the previous 12 
calendar months, and (b) due to the issuer's failure to file a required 
periodic financial report with the Commission or other appropriate 
regulatory authority. When the current Listing Fee waiver was added, 
the Exchange anticipated that a significant percentage of potential new 
listings of companies that had a registered class of common stock but 
that were not currently listed on a national securities exchange would 
relate to formerly listed companies that were delisted as a result of a 
failure to timely file annual reports with the Commission.\7\ The 
Exchange anticipated that these would be companies that were otherwise 
in good standing with the Exchange or another national securities 
exchange, but that fell behind on their Act reporting because their 
auditors or the Commission required restatements of their financial 
statements and that these companies would relist on the Exchange (or 
another national securities exchange) as soon as their filings were up 
to date.\8\ When proposed, the Exchange believed that it was 
appropriate to waive initial listing fees for these companies and that 
such a waiver did not constitute an inequitable or unfairly 
discriminatory allocation of fees because such companies would have 
previously paid initial listing fees to the Exchange or another 
national securities exchange, and that to make them pay these fees 
again would further penalize them unnecessarily.\9\
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 55742 (May 10, 
2007), 72 FR 27893 (May 17, 2007) (SR-NYSE-2007-19).
    \8\ Id.
    \9\ Id.
---------------------------------------------------------------------------

    The Exchange continues to believe that a waiver for issuers that 
were delisted for financial reporting reasons is reasonable because, 
except for the non-compliance with the financial reporting requirement, 
such issuers would otherwise be in good standing at the time of 
delisting from a listing standards perspective and would have already 
paid a fee for listing on the Exchange or another national securities 
exchange. The Exchange also believes that limiting the waiver to 12 
months after delisting is reasonable because the waiver would apply to 
issuers that were delisted within a relatively recent time frame.
    The Exchange noted, when the current waivers to the Listing Fee 
were adopted, that there could be an initial listing on the Exchange of 
a company that was trading in the over-the-counter market immediately 
prior to listing and that was not previously delisted as a result of a 
failure to timely file annual reports with the Commission.\10\ The 
Exchange believed that very few of these companies could meet the 
Exchange's listing requirements and, therefore, the Exchange expected 
the number of such listings and the related loss of fee revenue to be 
immaterial.\11\
---------------------------------------------------------------------------

    \10\ Id. at n. 5.
    \11\ Id. In this regard, the Exchange notes that there have been 
a number of such issuances. For example, to date in 2012 five 
issuers have availed themselves of this waiver by listing securities 
on the Exchange that were not previously listed on a national 
securities exchange and, therefore, had not previously paid initial 
listing fees.
---------------------------------------------------------------------------

    The Exchange believes that the changes proposed to this aspect of 
the waiver, such that it would no longer apply to issuers that were 
delisted for reasons other than financial reporting, is equitable and 
not unfairly discriminatory because these other issuers would not have 
been in good standing at the time of delisting from a listing standards 
perspective and such lack of good standing would be due to reasons 
other than for financial reporting. Similarly, the Exchange believes 
that it is equitable and not unfairly discriminatory to charge Listing 
Fees to issuers that are registered under the Act but not previously 
listed on a national securities exchange because such issuers would not 
have previously paid listing fees.
    The Exchange also believes that this aspect of the proposed change 
is equitable and not unfairly discriminatory because, in addition to 
applying equally to all issuers whose securities are listed on the 
Exchange, it would differentiate between those issuers whose securities 
are delisted solely for financial reporting reasons and those issuers 
whose securities were delisted for other reasons or were not previously 
listed on a national securities exchange. In this regard, the Exchange 
believes that these issuers would not be unfairly penalized if they are 
required to pay Listing Fees.
    Overall, the Exchange believes that instances of these waivers 
being granted to issuers that apply to list on the Exchange will be 
relatively rare. Accordingly, the Exchange does not anticipate that it 
will experience any meaningful diminution in revenue as a result of the 
proposed waivers and therefore does not believe that the proposed 
waivers would in any way negatively affect its ability to continue to 
adequately fund its regulatory program or the services the Exchange 
provides to issuers.
    Additionally, the Exchange believes that the non-substantive 
changes that are proposed, which are technical and conforming changes, 
are reasonable because they will ensure that the proposed substantive 
changes are incorporated in a clear and accurate manner. These changes 
are also

[[Page 63406]]

equitable and not unfairly discriminatory because they will benefit all 
issuers and all other readers of the Listed Company Manual.

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

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \12\ of the Act thereunder, because it establishes 
a due, fee, or other charge imposed by NYSE.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend 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:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2012-47 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-2012-47. This file 
number should be included on the subject line if email 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 Web site viewing and 
printing in the Commission's Public Reference Section, 100 F Street 
NE., Washington, DC 20549-1090, on official business days between 10:00 
a.m. and 3:00 p.m.. Copies of the filing will also be available for Web 
site viewing and printing at the NYSE's principal office and on its 
Internet Web site at www.nyse.com. 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-2012-47 and should be submitted on or before 
November 6, 2012.
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-25321 Filed 10-15-12; 8:45 am]
BILLING CODE 8011-01-P