Document ID: SEC-2007-0382-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2007-03-14T04:00Z

[Federal Register: March 14, 2007 (Volume 72, Number 49)]
[Notices]               
[Page 11925-11927]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14mr07-110]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55421; File No. SR-NYSE-2007-19]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change To Waive Certain Listing Fees

March 8, 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 22, 2007, the New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been substantially prepared by the 
Exchange. The Commission is publishing this notice to solicit comment 
on the proposed rule change from interested persons.
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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 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 applicable to (i) any company listing upon emergence from 
bankruptcy, or (ii) any company listing its primary class of common 
stock that is not listed on a national securities exchange but is 
registered under the Act. The amendment will also apply a separate cap 
for a limited period on fees payable by companies listing upon 
emergence from bankruptcy. If approved by the Commission, the 
amendments contained in this proposal will be applied retroactively as 
of the date of this filing.
    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, 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 Exchange 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 that there shall be no initial listing fee applicable to:
     Any company listing following emergence from bankruptcy; 
\3\ or
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    \3\ The Exchange interprets ``listing following emergence from 
bankruptcy'' to mean that the company lists at the same time it 
emerges from bankruptcy. Telephone conversation between John Carey, 
Assistant General Counsel, NYSE, and Nathan Saunders, Special 
Counsel, Division of Market Regulation, Commission, March 6, 2007.
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     Any company listing its primary class of common stock that 
is not listed on a national securities exchange but is registered under 
the Act.
    The amendment will also apply a separate cap for a limited period 
on fees

[[Page 11926]]

payable by companies listing upon emergence from bankruptcy. If 
approved by the Commission, the amendments contained in this proposal 
will be applied retroactively as of the date of this filing.
    Section 902.02 currently provides a cap of $500,000 for all fees 
(including both initial listing fees and annual fees) payable by any 
issuer during a calendar year. Under the proposed amendment, the total 
fees payable by an issuer that lists upon emergence from bankruptcy 
will be subject to a separate fee cap. Annual fees for any such issuer 
will be calculated quarterly for the fiscal quarter in which such 
issuer lists and in each of the succeeding 12 full fiscal quarters, at 
a rate of one-fourth of the applicable annual fee rate. The total fees 
(including initial listing fees and annual fees) that may be billed to 
such issuer during this period will be subject to a $25,000 cap in the 
fiscal quarter in which the issuer lists and in each of the succeeding 
12 full fiscal quarters. This fee cap will subject to the same 
exclusions that apply in relation to the $500,000 per year fee cap 
described in Section 902.02 under the heading ``Total Maximum Fee 
Payable in a Calendar Year.'' If there are one or more fiscal quarters 
remaining in the year after the conclusion of the period described in 
this paragraph, the issuer will, on a prorated basis, be billed the 
regular annual fee subject to the $500,000 total fee cap for the 
remainder of that year.
    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 
waivers 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.
    In the case of companies listing upon emergence from bankruptcy, 
the Exchange believes that the initial listing fee waiver and proposed 
separate fee cap are justified by such companies' unique circumstances. 
Companies emerging from bankruptcy are typically not raising any new 
capital at the time of listing, so the payment of initial listing fees 
is more burdensome than for companies that are listing upon an initial 
public offering. Also, because of the desire in bankruptcy proceedings 
to ensure that creditors are paid as much as possible, such companies 
are much more sensitive to both the initial and continued costs 
associated with listing. It is frequently difficult for such companies 
to assess what those costs are going to be until quite close to their 
emergence from bankruptcy, as the number of shares that will be issued 
(and therefore the related listing fees) are a significant variable in 
the negotiation of the bankruptcy settlement. As (a) bankrupt companies 
face unique challenges in the listing process, (b) the number of 
companies that will benefit from the fee waiver and lower fee cap 
applicable to bankrupt companies will be very limited, and (c) the fee 
cap will apply only to a three-year transitional period, the Exchange 
does not believe that the treatment this proposal would afford to 
bankrupt companies constitutes an inequitable or unfairly 
discriminatory allocation of fees.
    The Exchange anticipates that a significant percentage of potential 
listings of companies that have a registered class of common stock but 
that are not currently listed on a national securities exchange will be 
formerly listed companies that were delisted as a result of a failure 
to timely file annual reports with the Commission. These are companies 
that were otherwise in good standing with the Exchange or with another 
national securities exchange, but fell behind on their reporting 
obligations under the Act because their auditors or the Commission 
required restatements of their financial statements. These companies 
will re-list on the Exchange as soon as their filings are up to date. 
The Exchange believes that waiving initial listing fees for these 
companies is appropriate and does not constitute an inequitable or 
unfairly discriminatory allocation of fees, as such companies had 
previously paid initial listing fees to the Exchange or to another 
national securities exchange, and to make them pay these fees again 
would further penalize them unnecessarily.
    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. A very limited number of companies are qualified 
and seek to list on the Exchange that are either emerging from 
bankruptcy or have a registered class of common stock but are not 
currently listed on another market. Accordingly, 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 the requirement under Section 6(b)(4) \4\ of the Act 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 the requirement under Section 6(b)(5) 
\5\ of 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 that are not designed to permit unfair 
discrimination between issuers. In light of the unique circumstances of 
companies emerging from bankruptcy and the likelihood that many 
companies listing that have a registered class of common stock but are 
not listed on another market will be previously listed companies 
delisted as late filers, the Exchange believes that the proposed fee 
waiver does not render the allocation of its listing fees inequitable 
or unfairly discriminatory.
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    \4\ 15 U.S.C. 78f(b)(4).
    \5\ 15 U.S.C. 78f(b)(5).
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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 on the proposed rule change were neither solicited 
nor received.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding, or (ii) as to 
which the Exchange consents, the Commission will:
    (A) By order approve the proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing,

[[Page 11927]]

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 Number SR-NYSE-2007-19 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-2007-19. 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 the 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-2007-19 and should be submitted on or before April 4, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-4587 Filed 3-13-07; 8:45 am]

BILLING CODE 8010-01-P