Document ID: SEC-2009-1528-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; New York Stock Exchange LLC; Order Approving Proposed Rule Change Amending Its Initial Listing Fees for Operating Companies
Posted Date: 2009-10-29T04:00Z

[Federal Register: October 29, 2009 (Volume 74, Number 208)]
[Notices]               
[Page 55883-55884]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29oc09-122]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60868; File No. SR-NYSE-2009-83]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; Order 
Approving Proposed Rule Change Amending Its Initial Listing Fees for 
Operating Companies

October 22, 2009.

I. Introduction

    On August 26, 2009, 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 amending its schedule of initial listing fees for 
operating companies. The proposed rule change was published in the 
Federal Register on September 17, 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. 60644 (September 10, 
2009), 74 FR 47842 (hereinafter referred to as ``Notice'').
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II. Description of the Proposal

    The Exchange proposes to amend its initial listing fees for 
operating companies as set forth in Section 902.03 of the Listed 
Company Manual, with retroactive application to any initial listing of 
new classes of securities on or after the date August 26, 2009. 
Currently, companies initially listing a new class of securities on the 
Exchange pay $0.0048 per share for up to and including 75 million 
shares, $0.00375 per share for any additional shares over 75 million 
shares up to and including 300 million shares, and $0.0019 per share 
for any additional shares over 300 million shares. Additionally, the 
first time an issuer lists a class of common shares, the issuer is 
subject to an additional one-time special charge of $37,500. The 
current minimum and maximum listing fees applicable to an issuer that 
lists a class of common shares the first time on the Exchange are 
$150,000 and $250,000, respectively, which includes the one-time 
special charge of $37,500.
    The Exchange proposes to replace the current listing fee schedule 
with a flat rate initial listing fee of $0.0032 per share with respect 
to shares listed at the time a class of common shares is first listed 
on the Exchange.\4\ NYSE further proposes to increase the one-time 
special charge from $37,500 to $50,000. Finally, the Exchange proposes 
to maintain the maximum initial listing fee of $250,000, but decrease 
the minimum initial listing fee from $150,000 to $125,000.\5\
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    \4\ Under the proposal, initial listing fees for the following 
types of listings will also be charged at a rate of $0.0032 per 
share: (i) At the time it first lists, an issuer lists one or more 
classes of preferred stock or warrants, whether or not common shares 
are also listed at that time; and (ii) once listed, an issuer lists 
a new class of preferred stock or warrants.
    \5\ In it filing, the Exchange states that the proposed increase 
to the one-time special charge is intended to offset a portion of 
the reduction in listing fee revenue attributable to the proposed 
lower listing fee per share and proposed lower minimum listing fee.
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    Because the current listing fee schedule applied to both new 
listings and additional listings, the Exchange has proposed to create a 
new category for the listing of additional shares (the ``Listing of 
Additional Shares Fee Schedule''). In its filing, the Exchange states 
that the current fee schedule will remain unchanged for the listing of 
additional shares of a class of previously listed securities.\6\ 
Consistent with its current approach, the Exchange will include the 
shares with respect to which the company paid fees at the time of the 
initial listing of that class in calculating the fees for additional 
shares pursuant to the Listing of Additional Shares Fee Schedule. As 
noted above, the fees for listing additional shares will not be changed 
under the proposal. However, the Exchange is proposing to make certain 
non-substantive and clarifying changes to the Listing of Additional 
Shares Fee Schedule which includes a new example to explain how the 
additional listing fees are calculated.
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    \6\ See Notice, supra note 3.
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III. Discussion and Commission's Findings

    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. 
Specifically, the Commission finds that the proposal is consistent with 
Sections 6(b)(4) and (b)(5) of the Act,\7\ which require, among other 
things, that the rules of an exchange (i) provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and issuers and other persons using its facilities, and (ii) 
are not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \7\ 15 U.S.C. 78f(b)(4) and (b)(5).
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    According to the Exchange, the lower initial listing fees will 
enable the Exchange to compete more effectively on a cost basis with 
other securities exchanges for listings of companies undertaking 
initial public offerings. Particularly, the Exchange states that 
smaller companies that have historically listed on the Exchange now 
qualify for listing under the recently adopted Assets and Equity Test 
\8\ and many of these companies would benefit from the lower minimum 
initial listing fee.
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    \8\ See Securities Exchange Act Release No. 58934 (November 12, 
2008), 73 FR 69708 (November 19, 2008) (SR-NYSE-2008-98).
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    Additionally, the Exchange represents that under the proposal no 
company will pay higher initial listing fees, and companies whose fees 
are not limited by the $250,000 maximum will pay a reduced initial 
listing fee. The Exchange asserts that although companies that are 
subject to the $250,000 maximum fee under both the current and the 
proposed fee schedule would not benefit from a reduction in fees, this 
is appropriate because these companies already benefit from a lower 
effective listing fee per share than other companies. As noted

[[Page 55884]]

above, the tiered fee structure charges less per share for the number 
of shares being issued above certain limits.
    Finally, the Exchange believes that the listing fees, as amended, 
should be retroactively applied to any new classes of common or 
preferred equity securities and warrants listed on or after August 26, 
2009, as it will enable companies to benefit from any applicable 
reduction in listing fees without having to delay their listing until 
after Commission approval solely for the purpose of benefitting from 
the fee reduction.
    Based on the above, the Commission believes that the Exchange's 
proposed rule change provides for the equitable allocation of 
reasonable dues, fees, and other charges among issuers, in that it 
applies uniformly to all new classes of common or preferred equity 
securities and warrants. The Commission also believes that the proposal 
does not unfairly discriminate between issuers as all companies will be 
subject to the same fee schedule. Further, the Commission notes that 
despite the fact that the one time special charge for new issues will 
be universal and the flat rate is higher than currently exists on a per 
share basis as compared to some of the current tiered fees, no company 
will pay higher initial listing fees under the revised listing fee 
schedule because the maximum fees are staying the same and some 
companies will actually benefit from a reduced initial listing fee. The 
Commission notes that the Exchange has represented that despite these 
reductions, the Exchange will continue to have sufficient revenue to 
continue to adequately fund its regulatory activities.
    Finally, the Commission believes it is appropriate that the 
proposed listing fees, as amended, be applied retroactively to any new 
classes of common or preferred equity securities and warrants listed on 
or after August 26, 2009, as no company will be subject to increased 
fees as a result of the proposal. Further, it will allow companies that 
have listed new classes of securities after the date of filing of this 
proposed rule change to benefit from any applicable reduction in 
initial listing fees. The Commission also notes that the changes, 
including the retroactive effect, were published for notice and comment 
in the Federal Register and we did not receive any comments.
    For the foregoing reasons, the Commission finds that the proposed 
rule change is consistent with the Act.\9\
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    \9\ 15 U.S.C. 78f(b)(4). In approving the proposed rule change, 
the Commission has considered the proposed rule's impact in 
efficiency, competition and capital formation. See 15 U.S.C. 78c(f).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-NYSE-2009-83) be, and it 
hereby is, approved.
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    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-26026 Filed 10-28-09; 8:45 am]

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