Document ID: SEC-2009-0162-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Alternext US LLC
Posted Date: 2009-02-04T05:00Z

[Federal Register: February 4, 2009 (Volume 74, Number 22)]
[Notices]               
[Page 6077-6079]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04fe09-92]                         

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59304; File No. SR-NYSEALTR-2009-02]

 
Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by NYSE Alternext US LLC To Revise Its Listing Fees

January 27, 2009.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on January 8, 2009, NYSE Alternext US LLC (``NYSE 
Alternext'' or the ``Exchange'') filed with the Securities and Exchange 
Commission the proposed rule changes 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 changes from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 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 revise its listing fees. The text of the 
proposed rule change is available on the Exchange's Web site at (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 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 these statements may be examined at 
the places specified in Item IV below. NYSE Alternext 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
    Following the October 2008 acquisition by NYSE Euronext of NYSE 
Alternext's predecessor entity, the American Stock Exchange, NYSE 
Euronext management reexamined NYSE Alternext's listing fees in light 
of the cost of providing services to listed companies on an ongoing 
basis and the fees charged by competitor exchanges. In particular, the 
Exchange notes that it is now providing listed companies with a suite 
of services similar to services provided to listed companies by the New 
York Stock Exchange (``NYSE''), which is also a subsidiary of NYSE 
Euronext. These services, which the Exchange has either already begun 
providing or will roll out in early 2009, include: A daily summary of 
trading activity in a listed company's stock delivered at the end of 
each trading day to the company's executives (``market focus 
reports''); a summary of relevant market information delivered each 
morning with analysis of what may happen in the equity markets that 
day; access to NYSENet, which is a web-based system that provides 
listed companies with easy access to detailed trading data updated 
intraday on a real-

[[Page 6078]]

time basis; and eGovDirect.com, a secure web-based system enabling 
companies to submit certifications to the Exchange electronically. To 
recoup the cost of providing these services and, more generally, in 
response to increased costs in its continuing service and regulatory 
programs, the Exchange proposes to make a number of changes to its 
listing fees.
    The Exchange proposes to amend its initial listing fees for common 
stock or common stock equivalents. The initial listing fees set forth 
in Section 140 of the Exchange's Company Guide for issuances of (i) 
less than five million shares will be increased from $40,000 to 
$50,000, (ii) five million to 10 million shares will be increased from 
$50,000 to $55,000, (iii) 10,000,001 shares to 15 million shares will 
be increased from $55,000 to $60,000 and (iv) in excess of 15 million 
shares will be increased from $65,000 to $70,000. The Exchange 
currently charges a nonrefundable $5,000 application fee in connection 
with a company's initial listing on the Exchange. The Exchange proposes 
to eliminate this application fee \4\ and notes that, as a consequence, 
any company paying the increased initial listing fee in connection with 
the listing of five million shares or more at the time of first listing 
on the Exchange will not pay a higher aggregate fee to the Exchange as 
the initial listing fee increase of $5,000 is offset by the elimination 
of the application fee.\5\ The Exchange also notes that the proposed 
minimum initial listing fee of $50,000 for up to five million shares is 
the same as the Nasdaq Capital Market minimum fee for issuances of up 
to 15 million shares, while the proposed maximum fee of $70,000 for 
more than 15 million shares is less than the $75,000 maximum initial 
listing fee charged by Nasdaq Capital Market for listing in excess of 
15 million shares.\6\ As such, the Exchange believes that the proposed 
amended initial listing fees are competitive with those of other 
markets. In addition, the Exchange believes that it is appropriate to 
charge companies different amounts based on the number of shares 
listed, as the Exchange provides different levels of services to 
companies based on their size. For example, only larger companies are 
provided with the market focus reports described above.
---------------------------------------------------------------------------

    \4\ The Exchange proposes to make conforming changes to Section 
144 of the Company guide to eliminate references to the application 
processing fee.
    \5\ The Exchange notes that companies listing less than five 
million shares at the time of initial listing will be charged an 
initial listing fee that is $10,000 higher than is currently the 
case, giving rise to a net fee increase of $5,000 after taking into 
account the elimination of the application processing fee. In 
addition, the Exchange notes that companies that have previously 
listed a class of stock or warrants on the Exchange that are listing 
an additional class of securities would not have been required to 
pay the application processing fee in connection with the listing of 
the second class.
    \6\ The initial listing fee for issuers listing less than five 
million shares is increasing by $10,000, while the fees for the 
other tiers are increasing by just $5,000. The Exchange believes 
that this larger increase is necessary to cover the costs of 
regulatory review and use of operational resources which are 
essentially fixed in relation to any new listing regardless of the 
company's size.
---------------------------------------------------------------------------

    The Exchange notes that it is extremely difficult to establish 
listing fee schedules on the basis of market capitalization as stock 
prices are inherently volatile. As a consequence, all of the major 
national securities exchanges use the number of shares outstanding as a 
proxy for a company's size in establishing fee schedules, as, much of 
the time, the number of shares a company has outstanding provides a 
reasonable guide as to its size.
    Section 140 provides for a $5,000 application processing fee 
payable in connection with the initial listing of a class of bonds of 
an issuer that does not have another class of securities listed on the 
Exchange. The Exchange proposes to eliminate this fee.
    Section 140 currently provides that, in the case of non-U.S. 
issuers listed on foreign stock exchanges, the fee, including the one-
time, non-refundable application-processing fee of $5,000, is $40,000. 
The Exchange proposes to conform the initial listing fees charged to 
non-U.S. companies to those charged to domestic companies. The Exchange 
believes it is appropriate to charge these non-U.S. companies as much 
as other companies as they receive the same level of service from the 
Exchange and therefore are as costly to service on an ongoing basis as 
any other company of similar size. Accordingly, the Exchange believes 
that by charging non-U.S. companies the same fees as domestic companies 
it will be providing for a more equitable allocation of reasonable 
dues, fees and other charges among its members, issuers and other 
persons using its facilities.
    Section 141 of the Company Guide currently provides that issuers 
must pay a minimum annual fee of $27,500 if the issuer has 50 million 
shares or less outstanding. If the issuer has from 50,000,001 to 75 
million shares outstanding, the current annual fee is $32,500. If the 
issuer has in excess of 75 million shares outstanding, the current 
annual fee is $34,000. The Exchange proposes to retain the minimum 
annual fee of $27,500 for issuers with 50 million shares or less 
outstanding. Therefore, issuers with 50 million shares or less 
outstanding will not be subject to any annual fee increase for 2009. 
With effect from January 1, 2010, the Exchange proposes to increase the 
annual fee for issuers that have between 50,000,001 and 75 million 
shares outstanding from $32,500 to $36,500 and for issuers with in 
excess of 75 million shares outstanding the annual fee will be raised 
from $34,000 to $40,000. As of the date of approval of this rule 
filing, issuers will be required to pay a supplemental annual fee equal 
to the difference between the amount they would pay in 2009 based on 
the current annual fee rates and the amount they would be required to 
pay if the 2010 annual fee rates were in place on January 1, 2009. As 
with initial listing fees, the Exchange notes that larger companies 
receive more services from the Exchange and it is therefore justifiable 
to charge them higher annual fees to recoup the related expenses. For 
example, only larger companies are provided with the market focus 
reports described above.
    Sections 140 and 146 of the Company Guide contain provisions that 
grant the Board of Directors of the Exchange the discretion to defer, 
waive or rebate all or any part of the initial listing fee payable in 
connection with any listing of securities. Section 142(g) grants the 
Board of Directors the same discretion to defer, waive or rebate all or 
any part of the fees payable for the listing of additional shares. The 
Exchange proposes to eliminate these provisions in Sections 140 and 
142(g) and to eliminate Section 146 in its entirety. The Exchange has 
not exercised this discretion recently and has concluded that it is no 
longer relevant to its strategy going forward.
    The Exchange proposes to amend Section 142 of the Company Guide by 
(i) increasing from $60,000 to $65,000 the maximum fee per issuer for 
listing additional shares in a calendar year, which is the maximum 
imposed by Nasdaq Capital Market and Nasdaq Global Market, and (ii) 
increasing from $2,000 to $2,500 the fee charged in connection with a 
company changing its name or ticker symbol, which is also the fee 
charged by Nasdaq Capital Market and Nasdaq Global Market for changes 
of this nature. The Exchange also proposes to amend Section 142 to 
adopt a fee of $7,500 for technical original listings (``Technical 
Original Listings'') and reverse stock splits. The Exchange will apply 
the proposed $7,500 application fee for a Technical Original Listing if 
the change in the company's status is technical in nature and the

[[Page 6079]]

shareholders of the original company receive or retain a share-for-
share interest in the new company without any change in their equity 
position or rights. For example, a change in a company's state of 
incorporation or a reincorporation or formation of a holding company 
that replaces a listed company would be considered a Technical Original 
Listing.\7\ The $7,500 application fee will also apply to a reverse 
stock split. The Technical Original Listing fee will replace the 
current $5,000 fee for ``substitution listings'' set forth in Section 
142(d). The Technical Original Listing fee is intended to apply only to 
those events that would have previously been subject to the 
substitution listing fee. The Exchange has changed the fee's name and 
provided more detail as to when it is applicable in order to better 
inform companies as to when it is applicable and to conform to the 
comparable rule of the NYSE.\8\ Nasdaq Capital Market and Nasdaq Global 
Market have a fee set at the same $7,500 level for ``substitution 
listing events,'' which is applicable in the same circumstances as the 
Technical Original Listing fee.\9\ The Exchange believes that the 
increases in the various fees charged under Section 142 referenced in 
this paragraph are justified by the increasing cost of providing 
services to companies and in particular the cost of the Exchange's 
utilization of staff operational resources in making changes required 
by the events giving rise to the applicable fees. The Exchange also 
notes that the increased fees are set at the same level as those of 
Nasdaq Capital Market and Nasdaq Global Market and are therefore 
reasonable in light of the charges imposed by competitor exchanges. The 
Exchange is amending the language of Section 142 to state that the fees 
in that section apply to non-U.S. companies. As the fees in Section 142 
have always applied to non-U.S. companies, this amendment is simply a 
clarification and not a substantive change.
---------------------------------------------------------------------------

    \7\ Minor technical amendments are being made to Rule 142(e) to 
reflect the fact that reincorporations will be explicitly included 
in the categories of events subject to the proposed Technical 
Original Listing fee.
    \8\ See Section 902.03 of the NYSE Listed Company Manual.
    \9\ See Nasdaq Marketplace Rules 4510(f) (for the Nasdaq Global 
Market fee) and 4520(e) (for the Nasdaq Capital Market fee).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 \10\ of the Act in general and Section 
6(b)(4) of the Act \11\ in particular, in that it is designed to 
provide for the equitable allocation of reasonable dues, fees and other 
charges among its members and other persons using its facilities. The 
Exchange believes that the proposal does not constitute an inequitable 
allocation of dues, fees and other charges as the proposed fees are set 
at levels that are competitive with those already in place at Nasdaq 
Capital Market and Nasdaq Global Market and, to the extent different 
levels of fees are charged to companies of different sizes, the 
differential fees are reasonable in light of the different levels of 
service devoted to companies based on their size. Accordingly, the 
Exchange believes that the proposal provides for an equitable 
allocation of reasonable dues, fees and other charges among its 
members, issuers and other persons using its facilities.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f.
    \11\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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 purpose of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

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 self-regulatory organization 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, 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-NYSEALTR-2009-02 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-NYSEALTR-2009-02. 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, 100 F Street, 
NE., Washington, DC 20549, on official business days between the hours 
of 10 a.m. and 3 p.m. Copies of such filing will also 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 No. SR-NYSEALTR-2009-02 and should be 
submitted on or before February 25, 2009.
---------------------------------------------------------------------------

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

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-2250 Filed 2-3-09; 8:45 am]

BILLING CODE 8011-01-P