Document ID: SEC-2006-0384-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Philadelphia Stock Exchange, Inc.
Posted Date: 2006-03-23T05:00Z

[Federal Register: March 23, 2006 (Volume 71, Number 56)]
[Notices]               
[Page 14769-14772]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23mr06-86]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53496; File No. SR-Phlx-2005-62]

 
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto 
Relating to Amending Exchange Delisting Rules To Conform to Recent 
Amendments to Commission Rules Regarding Removal From Listing and 
Withdrawal From Registration

March 16, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'')&thnsp\1\, and Rule 19b-4 \2\ thereunder, notice is hereby 
given that on October 25, 2006, the Philadelphia Stock Exchange, Inc. 
(``Phlx'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') the proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
by the Phlx. On January 4, 2006, Phlx filed Amendment No. 1 to the 
proposed rule change.\3\ The Commission is publishing this notice to 
solicit comments on the proposed rule change, as amended, from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, Phlx amended its rule text and the 
purpose section of the Exchange's Form 19b-4 to clarify the 
effective date of the proposed rule change and revised Phlx Rule 809 
to state that an issuer proposing to withdraw a security from 
listing on the Exchange must provide a copy of Form 25 to the 
Exchange upon filing with the Commission.

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[[Page 14770]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Phlx proposes to amend Phlx Rules 809 (Issuer Request for 
Removal and Delisting of Securities), 810 (Suspension and Delisting 
Policies Based on Exchange Findings), and 811 (Delisting Policies and 
Procedures) in view of the recent adoption by the Commission of 
amendments to its rules \4\ that would streamline the procedure for 
removing from listing, and withdrawing from registration, securities 
under Section 12(b) of the Act.\5\ The text of the proposed rule change 
is below. Proposed new language is italicized; proposed deletions are 
in [brackets].
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    \4\ See Securities Exchange Act Release No. 52029 (July 14, 
2005), 70 FR 42456 (July 22, 2005) (the ``Delisting Release''). 
Changes to Commission rules under the Act pursuant to the Delisting 
Release will not be operative until April 24, 2006.
    \5\ 15 U.S.C. 78s(b)(1).
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* * * * *

Rule 809

Issuer Request for Removal and Delisting of Securities

* * * * *
    The following will be the operative text of Rule 809 effective as 
of April 24, 2006:
    An issuer proposing to withdraw a security from listing on the 
Exchange shall submit the following:
    A certified copy of a resolution adopted by the Board of Directors 
of the issuer authorizing withdrawal from listing and registration and 
a statement setting forth in detail the reasons for the proposed 
withdrawal and the facts in support thereof.
    The issuer may be required to submit the proposed withdrawal to the 
security holders for their vote at a meeting for which proxies are 
solicited provided the stock is not also listed on another Exchange 
having similar requirements.
    An issuer proposing to withdraw a security from listing on the 
Exchange shall do so by electronically submitting to the Securities and 
Exchange Commission Form 25 via the EDGAR system in compliance with all 
of the requirements of Rule 12d2-2(c) under the Exchange Act, and shall 
simultaneously provide a copy of such Form 25 to the Exchange.
* * * * *

Rule 810

Suspension and Delisting Policies Based on Exchange Findings

* * * * *
    The following will be the operative text of Rule 810 effective as 
of April 24, 2006:
    (a) through (c)--No Change.
    Commentary:
    .01 An application by the Exchange to strike a security from 
listing and/or registration will be submitted to the Securities and 
Exchange Commission electronically on Form 25 via the EDGAR system, and 
a copy of the application on Form 25 will be promptly delivered to the 
issuer.
* * * * *

Rule 811

Delisting Policies and Procedures

* * * * *
    The following will be the operative text of Rule 811 effective as 
of April 24, 2006:
    (a) through (f)--No Change.
    (g) At the conclusion of the hearing the Committee will present its 
findings to the Board of Governors so that a final determination can be 
made. Such decision shall be final. If the Committee or the Board 
determines that the security of the issuer should be removed from 
listing, an application shall be submitted by the Exchange to the 
Securities and Exchange Commission (``Commission'') to strike the 
security from listing and registration and a copy of such application 
shall be furnished to the issuer in accordance with Section 12 of the 
Exchange Act and the rules promulgated thereunder. If the decision is 
that the security should not be removed from listing, the issuer will 
receive a notice to that effect from the Exchange.
    An application by the Exchange to strike a security from listing 
and/or registration will be submitted to the Commission electronically 
on Form 25 via the EDGAR system, and a copy of the application on Form 
25 will be promptly delivered to the issuer.
    The actions required to be taken by the Exchange and issuers to 
strike a security from listing and/or registration [for routine reason, 
such as redemption, maturity and retirement, is] are set forth in Rule 
12d2-2[(a)] and Rule 19d-1 promulgated under the Exchange Act.
    The relevant portions of [the] Section 12 of the Exchange Act and 
Rules promulgated thereunder pertaining to the suspension, removal or 
withdrawal of registration/and or listing of securities [for all other 
reasons], and the timing thereof are summarized below:
    (1) [SEC authorization for w]Withdrawal of registration and/or 
striking for certain corporate events from listing of Exchange listed 
security--Section 12(d) of the Exchange Act and Rule 12d2-d(a) 
thereunder;
    (2) suspension of trading by Exchange--Rule 12d2-1 under the 
Exchange Act;
    (3) application of Exchange to strike security from listing and or/
registration and notice provisions--Rule 12d2-2 (a) and (b) [(c) and 
(e)] under the Exchange Act;[ or]
    (4) application of issuer to withdraw from listing and registration 
and notice provisions--Rule 12d2-2([d) and (e]c) under the Exchange 
Act[.];
    (5) timing and effectiveness of application by issuer or Exchange 
to strike a security from listing and/or registration--Rule 12d2-2(d) 
under the Exchange Act; or
    (6) exemption of certain standardized options and futures products 
from Section 12(d) of the Act--Rule 12d2-2(e).
    In appropriate circumstances, when the Exchange is considering 
delisting because a company no longer meets the requirements for 
continued listing, a company may[, with the consent of the Exchange,] 
file a delisting application electronically on Form 25 via the EDGAR 
system, and shall no fewer than ten days prior to filing Form 25 
provide written notice to the Exchange, provided that it states in its 
application that it [is no longer eligible for continued listing on the 
Exchange] has complied with the rules of the Exchange and the 
requirements of Rule 12d2-2(c) under the Exchange Act governing the 
voluntary withdrawal of the class of securities from listing and 
registration on the Exchange.\6\
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    \6\ Phlx intends to amend its rule text to clarify that an 
issuer that is below the continued listing policies and standards of 
the Exchange and seeks to voluntarily apply to withdraw a class of 
securities from listing must disclose that it is no longer eligible 
for continued listing in its statement of material facts relating to 
the reason for withdrawal from listing, its public press release, 
and its Web site notice. Telephone conversation between Jurij 
Trypupenko, Director, Phlx, and Ronesha A. Butler, Special Counsel, 
Division of Market Regulation, Commission, on March 15, 2006.
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    Pursuant to this rule, the Exchange will provide public notice of 
its final determination to remove a security from listing and/or 
registration by issuing a press release and posting a notice on its web 
site. Such notice will be disseminated no fewer than ten days before 
the delisting becomes effective pursuant to paragraph (d)(1) of Rule 
12d2-2 under the Exchange Act, and will remain posted on the web site 
until the delisting is effective.
* * * * *

[[Page 14771]]

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 Phlx 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 Phlx 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 purpose of the proposed rule change is to conform the 
Exchange's Rules 809, 810, and 811 to the Commission's recent actions 
regarding streamlining the procedures for removing from listing, and 
withdrawing from registration, securities under Section 12(d) of the 
Act.
    On July 14, 2005, the Commission published the Delisting Release 
making changes to the Commission's rules governing removal from listing 
and registration and instituting electronic submission of Form 25.\7\ 
In the Delisting Release, the Commission, among other things, adopted 
amendments to Rules 12d2-2 and 19d-1 under the Act and Form 25 
thereunder,\8\ to indicate that national securities exchanges and 
issuers that seek to delist and/or deregister securities under Section 
12(d) of the Act will do so by electronically filing Form 25 via the 
Commission's Electronic Data Gathering, Analysis, and Retrieval 
(``EDGAR'') system.\9\
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    \7\ See Securities Exchange Act Release No. 52029 (July 14, 
2005), 70 FR 42456 (July 22, 2005).
    \8\ 17 CFR 240.12d2-2, 17 CFR 240.19d-1, and 17 CFR Part 249.25. 
The Exchange likewise adopted amendments to Rule 101 of Regulation 
S-T, 17 CFR 232.101.
    \9\ To permit the EDGAR system to differentiate between a Form 
25 filed by exchanges and by issuers, the Commission established 
that a Form 25 filed by exchanges would have the EDGAR submission 
type of 25-NSE and a Form 25 filed by issuers would have the EDGAR 
submission type of 25.
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    Phlx Rule 811 (Delisting Policies and Procedures) currently 
establishes a procedure for the Exchange to delist a company that is 
below the Exchange's continued listing criteria (and not able to 
otherwise qualify under an initial listing standard), which includes an 
opportunity for a company to come into compliance, provision of notice 
of the Exchange staff's decision to delist, and opportunity for a 
company to appeal the decision to a committee designated by the 
Exchange's board of directors; and indicates that the Exchange will 
follow Section 12(d) of the Act and Commission Rule 12d2-2.
    The Exchange proposes changes to Phlx Rule 811 to conform it to the 
Delisting Release. The proposed changes to Phlx Rule 811 include 
language modifications that: indicate that applications by the Exchange 
to strike a security from listing and/or registration will be submitted 
on Form 25 via EDGAR, and a copy will be promptly delivered to the 
issuer; add a reference to Commission Rule 19d-1 under the Act in terms 
of the Exchange and issuers following the procedures established in 
Commission Rule 19d-1 along with Commission Rule 12d2-2 under the Act; 
expand and modify references to Commission Rule 12d2-2 so that they are 
commensurate with the Delisting Release; and provide for public notice 
of the Exchange's final determination to remove a security from listing 
and/or registration by issuing a press release and posting a notice on 
its web site for the requisite period of time. The proposed changes to 
Phlx Rule 811 also relate to the exemption of certain standardized 
options and futures products from Section 12(d) of the Act.
    Phlx Rule 810 (Suspension and Delisting Policies Based on Exchange 
Findings) currently provides that if an issuer cannot demonstrate 
proper listing compliance it will be subject to delisting procedures 
pursuant to Phlx Rule 811; and that if the entire outstanding amount of 
a class, issue or series is retired through payment at maturity or 
through redemption, reclassification or otherwise, the Exchange may 
give notice to the SEC on Form 25. The Exchange proposes a change to 
clarify that Form 25 will be electronically filed via EDGAR, in 
compliance with the Delisting Release.
    Phlx Rule 809 (Issuer Request for Removal and Delisting of 
Securities) currently provides that if an issuer desires to withdraw a 
security from listing it must, among other things, provide a certified 
copy of a resolution adopted by the Board of Directors of the issuer 
authorizing withdrawal from listing and registration and a statement 
setting forth in detail the reasons for the proposed withdrawal and the 
facts in support thereof. The Exchange proposes to clarify that for 
such requests an issuer shall use Form 25 electronically filed via 
Edgar in compliance with all of the requirements of Commission Rule 
12d2-2(c) under the Act for such requests, in compliance with the 
Delisting Release.
    The Exchange believes that the proposed changes conform its rules 
to the Delisting Release and streamline the process for delisting and/
or deregistration.
2. Statutory Basis
    The Exchange believes that its proposal, as amended, is consistent 
with Section 6(b) of the Act \10\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act \11\ in particular, in that it 
is designed to promote just and equitable principles of trade, to 
remove impediments to and to perfect the mechanism of a free and open 
market and a national market system and, in general, to protect 
investors and the public interest.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Phlx does not believe that the proposed rule change, as 
amended, will impose any burden on competition 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

    No written comments were either solicited or 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 Phlx consents, the Commission will:
    (A) By order approve such 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, 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

[[Page 14772]]

     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-Phlx-2005-62 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-Phlx-2005-62. 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 Phlx.
    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-Phlx-2005-62 
and should be submitted on or before April 13, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-4183 Filed 3-22-06; 8:45 am]

BILLING CODE 8010-01-P