Document ID: SEC-2008-0014-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; The NASDAQ Stock Market LLC et al.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change
Posted Date: 2008-01-04T05:00Z

[Federal Register: January 4, 2008 (Volume 73, Number 3)]
[Notices]               
[Page 900-902]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04ja08-56]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57062; File Nos. SR-NASDAQ-2007-101; SR-Amex-2007-142; 
SR-NYSE-2007-122; and SR-NYSEArca-2007-131]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC, The 
American Stock Exchange LLC, The New York Stock Exchange LLC, and NYSE 
Arca, Inc; Notice of Filing and Order Granting Accelerated Approval of 
Proposed Rule Changes To Extend the Deadline Until March 31, 2008 for 
Issuers To Become Compliant With Listing Requirements Concerning Direct 
Registration Programs

December 28, 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 December 26, 2007, The NASDAQ Stock Market LLC (``Nasdaq'') and The 
American Stock Exchange LLC (``Amex'') filed and on December 28, 2007, 
The New York Stock Exchange LLC (``NYSE'') and NYSE Arca (the four 
filers are collectively referred to as the ``Exchanges'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule changes as described in Items I, II, and III below, which items 
have been prepared substantially by the Exchanges. The Commission is 
publishing this notice and order to solicit comments on the proposed 
rule changes from interested persons and to approve the proposed rule 
changes on an accelerated basis.
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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 Organizations' Statement of the Terms of the 
Substance of the Proposed Rule Changes

    The Exchanges propose to extend the deadline until March 31, 2008, 
for listed issuers to become compliant with the requirement that their 
securities be made eligible to participate in a direct registration 
program. The Exchanges will implement the proposed rule changes upon 
approval by the Commission. The text of the Exchanges' proposed rule 
changes is available at http://nasdaq.complinet.com for Nasdaq's proposal; at http://www.amex.com for Amex's proposal; at http://

http://www.nyse.com/regulation/rules/1160561784294.html for NYSE's and NYSE 

Arca's proposals; and at the Commission's Public Reference Room.

[[Page 901]]

II. Self-Regulatory Organizations' Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In the filings with the Commission, the Exchanges included 
statements concerning the purpose of and basis for the proposed rule 
changes and discussed any comments they had received on the proposed 
rule changes. The text of these statements may be examined at the 
places specified in Item III below. The Exchanges have prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant aspects of such statements.

A. Self-Regulatory Organizations' Statements of the Purpose of, and 
Statutory Basis for, the Proposed Rule Changes

1. Purpose
    In August 2006, the Exchanges each adopted listing standards that 
require listed securities to be eligible to participate in a direct 
registration program, such as the Direct Registration System (``DRS'') 
administered by The Depository Trust Company (``DTC'').\3\ These 
listing standards became effective for new listed securities beginning 
on January 1, 2007, and are scheduled to become effective for all 
listed securities on January 1, 2008.
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    \3\ Securities Exchange Act Release No. 54288 (August 8, 2006), 
71 FR 47276 (August 16, 2006) (approving SR-NASDAQ-2006-008); 
Securities Exchange Act Release No. 54289 (August 8, 2006), 71 FR 
47278 (August 16, 2006) (approving SR-NYSE-2006-29); Securities 
Exchange Act Release No. 54290 (August 8, 2006), 71 FR 47262 (August 
16, 2006) (approving SR-AMEX-2006-40); Securities Exchange Act 
Release No. 54410 (September 7, 2006), 71 FR 54316 (September 14, 
2006) (approving SR-NYSEArca-2006-31).
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    Since adopting these listing standards, the number of issues that 
are not DRS eligible across these markets has declined from over 5,000 
in May 2007 to fewer than 1,000 as of December 14, 2007, and is 
expected to decline further before January 1, 2008. Nonetheless, there 
has been some confusion regarding the steps the listed companies need 
to complete to become compliant with these requirements. As a result, 
certain listed companies are still in the process of completing the 
necessary steps, which could include modifying their by-laws or having 
their boards take other actions, to become DRS eligible. In addition, 
in some cases, even though a listed company has completed all actions 
required to be taken by the company to become compliant, the company's 
transfer agent is still completing the process necessary for the 
transfer agent to facilitate the company's DRS eligibility.
    In order to assure that listed companies have adequate opportunity 
to comply with the listing standards that require listed securities to 
be eligible for inclusion in a direct registration program, each of the 
Exchanges is proposing to extend the effective date for its DRS 
eligibility requirement until March 31, 2008. The Exchanges believe 
that this short extension will allow those companies whose securities 
are not yet DRS eligible to become fully compliant with the listing 
standards and will avoid the investor confusion that could be caused by 
a number of companies temporarily not being in compliance with their 
Exchange's listing standards while they complete the DRS eligibility 
process.
2. Statutory Basis
    The Exchanges believe that the proposed rule changes are consistent 
with the provisions of section 6 of the Act \4\ in general and with 
section 6(b)(5) of the Act \5\ in particular in that the proposal is 
designed to prevent fraudulent and manipulative acts and practices, 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 changes extend the effective date of each Exchange's DRS 
eligibility requirement in order to facilitate a smooth transition for 
companies attempting to comply with the rules.
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    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchanges do not believe that the proposed rules change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended.

C. Self-Regulatory Organizations' Statement on Comments on the Proposed 
Rule Changes Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, 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 Numbers SR-NASDAQ-2007-101, SR-Amex-2007-142; SR-NYSE-2007-122; 
and SR-NYSEArca-2007-131 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Numbers SR-NASDAQ-2007-101, SR-
Amex-2007-142, SR-NYSE-2007-122, and SR-NYSEArca-2007-131. These file 
numbers 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 changes that are 
filed with the Commission, and all written communications relating to 
the proposed rule changes 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 each Exchange's 
filing also will be available for inspection and copying at the 
principal office of the submitting 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 Numbers SR-NASDAQ-2007-101; 
SR-Amex-2007-142; SR-NYSE-2007-122; and SR-NYSEArca-2007-131 and should 
be submitted on or before January 25, 2008.

[[Page 902]]

IV. Commission's Findings and Order Granting Accelerated Approval of 
the Proposed Rule Changes

    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.\6\ 
In particular, the Commission finds that the proposed rule changes are 
consistent with section 6(b)(5) of the Act, which requires that an 
exchange have rules designed, among other things, to promote 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, and 
in general to protect investors and the public interest. The process by 
which a company makes its securities DRS eligible in order to be in 
compliance with the Exchanges' listing requirements requires 
coordination between the company, its transfer agent, and DTC. That 
process may have been confusing to some issuers or their transfer 
agents, particularly those that were unfamiliar with DRS. Therefore, 
the Commission finds that approval of the Exchanges' proposals that 
provide a short extension of the effective date of the Exchanges' DRS 
eligibility listing requirements and that in turn should allow 
companies and their transfer agents the additional time needed to 
complete the necessary steps to make the companies' securities DRS 
eligible is consistent with section 6(b)(5) of the Act.
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    \6\ In approving this rule change, 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).
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    Furthermore, the Commission finds good cause to approve the 
proposed rule changes prior to the thirtieth day after the date of 
publication of the notice of filing because by approving the extension 
of the effective date for the listing standards requiring the 
securities of listed companies to be DRS eligible from January 1, 2008, 
to March 31, 2008, sufficient additional time should be provided to 
those companies whose securities are not yet DRS eligible to become 
fully compliant with the listing standards and should help to avoid 
possible confusion that could result if a number of companies were 
temporarily not in compliance with their Exchange's listing standards.

V. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\7\ that the proposed rule changes (SR-Nasdaq-2007-101; SR-Amex-
2007-142; SR-NYSE-2007-122; and SR-NYSEArca-2007-131) be and hereby are 
approved on an accelerated basis.
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    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E7-25595 Filed 1-3-08; 8:45 am]

BILLING CODE 8011-01-P