Document ID: SEC-2009-1579-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by New York Stock Exchange LLC To Extend the Pilot Program in Relation to Certain of Its Continued Listing Standards
Posted Date: 2009-11-09T05:00Z

[Federal Register: November 9, 2009 (Volume 74, Number 215)]
[Notices]               
[Page 57730-57732]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09no09-99]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60911; File No. SR-NYSE-2009-109]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC To 
Extend the Pilot Program in Relation to Certain of Its Continued 
Listing Standards

November 2, 2009.

    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Exchange Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is 
hereby given that, on October 30, 2009, New York Stock Exchange LLC 
(``NYSE'' or the ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule

[[Page 57731]]

change as described in Items I and II below, which items have been 
prepared by the Exchange. The Exchange has designated this proposal 
eligible for immediate effectiveness pursuant to Rule 19b-4(f)(6) \4\ 
under the Exchange Act. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend until February 28, 2010, the 
operation of an amendment to the continued listing requirements in 
Section 802.01B of the Exchange's Listed Company Manual (the 
``Manual'') that is currently in effect on a pilot program basis (the 
``Pilot Program''). The Exchange also proposes to remove from Section 
102.01C of the Manual references to the ``Initial Listing Standard for 
Companies Transferring from NYSE Arca,'' as it has ceased to be 
operative.
    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 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. 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
    Prior to the adoption of the Pilot Program,\5\ Section 802.01B(I) 
of the Manual provided that any company that qualified to list under 
the Earnings Test set out in Section 102.01C(I) or in Section 
103.01B(I) (in the case of foreign private issuers) or pursuant to the 
requirements set forth under the Assets and Equity Test set forth in 
Section 102.01C(IV) or the ``Initial Listing Standard for Companies 
Transferring from NYSE Arca'' (the ``NYSE Arca Transfer Standard'') set 
forth in Section 102.01(C)(V) was considered to be below compliance 
standards if such company's average global market capitalization over a 
consecutive 30 trading-day period was less than $75 million and, at the 
same time, total stockholders' equity was less than $75 million. Under 
the Pilot Program, companies that listed under the initial listing 
standards set forth in the immediately preceding sentence are 
considered to be below compliance standards if average global market 
capitalization over a consecutive 30 trading-day period is less than 
$50 million and, at the same time, total stockholders' equity is less 
than $50 million. The Pilot Program expires by its terms on October 31, 
2009, and the Exchange now proposes to extend its application for an 
additional five months, until February 28, 2010.
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    \5\ See Securities Exchange Act Release No. 59996 (May 28, 
2009), 74 FR 26912 (June 4, 2009) (SR-NYSE-2009-48) (the ``Pilot 
Program Notice'').
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    For companies listed under the Earnings Test, the Pilot Program 
returned continued listing requirements to those in place prior to the 
adoption of the current requirements on June 9, 2005.\6\ Consequently, 
prior to implementation of the Pilot Program, the Exchange had 
considerable historical experience with the continued listing of 
companies that had continued to trade on the Exchange with global 
market capitalization and stockholders' equity each below $75 million 
but greater than $50 million. In addition, the Exchange's experience 
under the Pilot Program has been very positive, as none of the 
companies that were [sic] deemed back in compliance as a result of the 
adoption of the Pilot Program have [sic] subsequently fallen below the 
standard as amended by the Pilot program as of the date of this filing. 
Based on this experience, the Exchange believes that companies that 
exceed the continued listing standards as amended by the Pilot Program 
are suitable for continued listing on the Exchange.
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    \6\ See Securities Exchange Act Release No. 51813 (June 9, 
2005), 70 FR 35484 (June 20, 2005) (SR-NYSE-2004-20). The Assets and 
Equity Test set forth in Section 102.01C(IV) and the NYSE Arca 
Transfer Standard set forth in Section 102.01C(V) were adopted 
subsequent to this amendment.
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    The Exchange notes that the continued listing standards as amended 
by the Pilot Program are still higher than those of any other national 
securities exchange. Consequently, the Exchange believes that the Pilot 
Program is consistent with the protection of investors and the public 
interest and does not raise any novel regulatory issues. In addition, 
the Exchange notes that the Commission stated in the Pilot Program 
Notice \7\ that it believed that the continued listing standards 
adopted under the Pilot Program met the requirements established in 
Exchange Act Rule 3a51-1(a)(2)(ii) \8\ in that [sic] were reasonably 
related to the initial listing standards set forth in paragraph 
(a)(20)(i) of Exchange Act Rule 3a51-1 (the ``Penny Stock Rule'').\9\
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    \7\ See the Pilot Program Notice at Note 5.
    \8\ 17 CFR 240.a51-1(a)(2)(ii).
    \9\ 17 CFR 240.a51-1.
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    The NYSE Arca Transfer Standard explicitly provided for the 
transfer of companies from NYSE Arca to the Exchange on or before 
August 31, 2009. As that date has passed, the Exchange is deleting the 
standard from Section 102.01(C) of the Manual. The reference to the 
NYSE Arca Transfer Standard in Section 802.01B is retained, as it 
continues to be relevant because it indicates which continued listing 
standard will be applied to companies that originally listed under the 
NYSE Arca Transfer Standard. A parenthetical has been added to Section 
802.01B to indicate that the NYSE Arca Transfer Standard is no longer 
operative.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \10\ of the Exchange Act, in general, and furthers 
the objectives of Section 6(b)(5) \11\ of the Exchange Act in 
particular in that it is designed 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 Exchange believes that 
the proposed extension to the Pilot Program is consistent with the 
investor protection objectives of the Exchange Act in that the 
continued listing standards under the Pilot Program are set at a high 
enough level that only companies that are suitable for continued 
listing on the Exchange will exceed the standards. The deletion of the 
NYSE Arca Transfer Standard is not a substantive change, as that 
standard was not operative after August 31, 2009.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).

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[[Page 57732]]

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 Exchange 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

    Because the foregoing proposed rule change: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) by its terms does not become operative for 30 days after the 
date of this filing, 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) \12\ of the Act and Rule 19b-4(f)(6) 
thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to provide the Commission 
with written notice 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 the date of filing of the 
proposed rule change, or such shorter time as designated by the 
Commission. The Exchange has fulfilled this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally 
may not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) \15\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange requests that the 
Commission waive the 30-day operative delay, as specified in Rule 19b-
4(f)(6)(iii),\16\ which would make the rule change operative upon 
filing.
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    \14\ Id.
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ Id.
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because such waiver will allow the current Pilot Program to continue 
without interruption. The Commission notes that the standards under the 
Pilot Program are identical, for those companies qualifying under the 
Earnings Test, to those in effect on the Exchange prior to the adoption 
of the current standards in 2005.\17\ The NYSE represents that the 
continued listing standards proposed under the Pilot Program are higher 
than similar standards currently in place on other exchanges. In 
addition, the Commission notes that the pilot period will allow the 
NYSE and the Commission to continue to assess the new continued listing 
standards. Finally, the Commission notes that the deletion of the NYSE 
Arca Transfer Standard from Section 102.01C is not a substantive 
change, as that standard is no longer operative. For these reasons, the 
Commission designates the proposed rule change operative upon 
filing.\18\
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    \17\ See Securities Exchange Act Release No. 51813 (June 9, 
2005), 70 FR 35484 (June 20, 2005) (SR-NYSE-2004-20).
    \18\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such 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 Exchange 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-2009-109 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2009-109. 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, on official business 
days between the hours of 10 a.m. and 3 p.m. 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-2009-109 and should be submitted on or before November 30, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-26877 Filed 11-6-09; 8:45 am]

BILLING CODE 8011-01-P