Document ID: SEC-2007-0294-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2007-02-27T05:00Z

[Federal Register: February 27, 2007 (Volume 72, Number 38)]
[Notices]               
[Page 8823-8825]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27fe07-151]                         

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55314; File No. SR-NYSE-2007-17]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Provide That There Be No Initial Listing Fee Payable for Any Equity 
Security, Structured Product or Closed-End Management Investment 
Company That Transfers From Another National Securities Exchange

February 20, 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 15, 2007, the New York Stock Exchange LLC (``Exchange'' or 
``NYSE'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been substantially prepared by the Exchange. 
The Exchange has designated this proposal as non-controversial under 
Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) 
thereunder,\4\ which renders the proposed rule change effective upon 
filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

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 its Listed Company 
Manual (the ``Manual'') to provide that there shall be no initial 
listing fee payable in connection with the transfer of any equity 
securities, structured product, or closed-end management investment 
company listed on another national securities exchange to the Exchange. 
This fee waiver will not be 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.
    The text of the proposed rule change is available on the Exchange's 
Web site (http://www.nyse.com), at the Exchange's Office of the 

Secretary, 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 NYSE 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
    The Exchange proposes to amend Section 902.02 of the Manual to 
provide

[[Page 8824]]

that there shall be no initial listing fee applicable to the transfer 
of any equity securities, structured product (defined as securities 
listed under Sections 703.18, 703.19 and 703.21) or closed-end 
management investment company listed on another national securities 
exchange. This fee waiver will not be 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.
    Section 902.03 of the Manual currently provides that issuers 
transferring the listing of their primary class of common shares from 
any other national securities exchange are not required in connection 
with such transfer to pay (i) initial listing fees or (ii) a one-time 
special charge of $37,500 payable in connection with the listing of any 
new class of common shares. In addition, Section 902.03 provides that 
issuers transferring the listing of their primary class of common 
shares from NYSE Arca to the Exchange are not required to pay Annual 
Fees with respect to that primary class of common shares for the 
remainder of the calendar year in which the transfer occurs. The 
proposed rule change will move this text from Section 902.03 to Section 
902.02 and extend the application of waivers of the initial listing fee 
and one-time special charge to any other classes of equity securities 
(i.e., preferred stock, warrants, units including equity securities, 
and additional classes of common stock) transferred from another 
national securities exchange, as well as to transfers of closed-end 
management investment companies and structured products.
    Issuers of securities that qualify for the proposed waiver of 
initial listing fees will be subject to the same level of annual fees 
and listing of additional shares fees as other NYSE issuers. 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 
waiver 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.
    The Exchange believes that the elimination of such fees in the case 
of securities transferring from other national securities exchanges is 
justified on several grounds. An issuer that already paid initial 
listing fees to another national securities exchange when it became a 
publicly traded company is reluctant to pay a second initial listing 
fee to another listing venue, even if it concludes that the Exchange 
offers the issuer and its investors superior services and market 
quality. Even if an issuer concludes that the Exchange would provide a 
superior market for its stock, the benefits of the transfer must 
currently be weighed against the cost of initial inclusion. Since the 
expected benefits of the transfer would be diffused among the issuers' 
investors and realized over time, but the initial listing fees must be 
paid by the issuer immediately, the Exchange is concerned that issuers 
that stand to benefit may nevertheless opt to forgo a transfer. As 
such, the Exchange believes that assessing the initial fees against 
issuers that have already paid fees to list on another market imposes a 
burden on the competition between exchange markets and markets other 
than exchange markets, a competition that the Exchange believes is one 
of the central goals of the national market system. This concern is 
particularly great in light of the fact that the Commission has 
approved the waiver of initial listing fees by Nasdaq with respect to 
the listing of any security being transferred from another national 
securities exchange.\5\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 51004 (January 10, 
1005), 70 FR 2917 (January 18, 2005) (order approving SR-NASD-2004-
140).
---------------------------------------------------------------------------

    The Exchange understands that the effect of this proposed rule 
change will be to impose a lower level of listing fees on issuers that 
transfer from another national securities exchange than on some other 
issuers. In light of the fact that the Exchange will collect the same 
level of annual fees and listing of additional shares fees from such 
issuers, however, the Exchange believes that the difference does not 
constitute an inequitable allocation of fees. In light of a 
transferring issuer's prior payment to another market and the generally 
lower burdens associated with reviewing a transferring issuer's 
eligibility, the Exchange believes that eliminating initial fees for 
transferring issuers is entirely consistent with an equitable 
allocation of listing fees.
    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. Quite simply, even with the proposed rule change 
in place, the Exchange understands that a change in listing venue is a 
major step for an issuer, and therefore the Exchange does not expect 
that the number of issuers that transfer to the NYSE in a given time 
frame will be sufficient to have a material effect on financial 
resources.
2. Statutory Basis
    The bases under the Act for this proposed rule change are: (i) The 
requirement under Section 6(b)(4) \6\ 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 
(ii) the requirement under Section 6(b)(5) \7\ of the 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 are not designed to permit unfair discrimination between 
issuers. In light of a transferring issuer's prior payment to another 
market, the Exchange believes that the proposed fee waiver does not 
render the allocation of its listing fees inequitable or unfairly 
discriminatory. The Exchange believes that the fee waiver will increase 
competition among listing markets and will remove a competitive 
disadvantage the Exchange currently has vis-[agrave]-vis Nasdaq, and is 
therefore designed to perfect the mechanism of a free and open market.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b)(4).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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 were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A) of the Act \8\ and subparagraph (f)(6) of Rule 19b-4 
thereunder.\9\ Because the Exchange has designated the foregoing 
proposed rule change as one that: (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 from the date on

[[Page 8825]]

which it was filed, 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 and Rule 19b-4(f)(6)(iii) 
thereunder.\10\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ The Exchange provided written notice to the Commission 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 filing, as required by Rule 19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    The Exchange requests that the Commission waive the 30-day 
operative delay specified in Rule 19b-4(f)(6)(iii).\11\ The Exchange 
believes that the proposed amendment does not affect investors as it 
simply waives a fee that is applicable to companies listing on the 
Exchange. Moreover, Nasdaq has already instituted such a waiver and the 
Exchange is at a competitive disadvantage as long as Nasdaq can list 
transferring companies without the payment of original listing fees and 
the Exchange cannot. Therefore, the Exchange believes that waiving the 
30-day operative delay is consistent with the protection of investors 
and the public interest.
---------------------------------------------------------------------------

    \11\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    The Commission has determined to waive the 30-day delay and allow 
the proposed rule change to become operative immediately.\12\ The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
The proposed rule is substantially similar to provisions in Nasdaq's 
Rules 4510(a) and 4520(a), which were previously approved by the 
Commission.\13\
---------------------------------------------------------------------------

    \12\ For purposes only of waiving the operative delay of this 
proposal, the Commission notes that it has considered the proposed 
rule's impact on efficiency, competition, and capital formation. See 
15 U.S.C. 78c(f).
    \13\ See supra note 5.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate 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 e-mail to rule-comments@sec.gov. Please include 

File No. SR-NYSE-2007-17 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-NYSE-2007-17. 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 such 
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-2007-17 and should be submitted on or before March 
20, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-3287 Filed 2-26-07; 8:45 am]

BILLING CODE 8010-01-P