Document ID: SEC-2008-1135-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2008-08-15T04:00Z

[Federal Register: August 15, 2008 (Volume 73, Number 159)]
[Notices]               
[Page 47994-47996]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15au08-101]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58311; File No. SR-NYSE-2008-74]

 
Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by New York Stock Exchange LLC To Enable the Exchange To Waive 
Annual Listing Fees for Securities Transferring From the Amex or NYSE 
Arca, Inc.

August 5, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby 
given that, on August 4, 2008, 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 prepared by the 
Exchange. 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\ 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 provide that, with retroactive effect from 
January 1, 2008, there shall be no annual fee payable to the Exchange 
for the remainder of the calendar year in which the transfer occurs for 
any class of securities of a company listed on the American Stock 
Exchange (the ``Amex'') that transfers the listing of its primary class 
of common shares to the Exchange. This proposed rule change (i) is 
conditioned on the consummation of NYSE Euronext's acquisition of the 
Amex (the ``Merger''), (ii) will not take effect until the date of 
consummation of the Merger, and (iii) will be of no further effect if 
the closing of the Merger does not take place by March 31, 2009. The 
amendment also provides that companies transferring the listing of 
their primary class of common stock from NYSE Arca, Inc. (``NYSE 
Arca'') to the Exchange (with respect to which the Exchange already 
waives annual fees for the first part year) will not be charged the 
prorated annual fee in the first year of listing for any class of 
securities that is transferred in connection with the transfer of the 
common stock.

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
    The Exchange proposes to amend Section 902.02 of the Manual to 
provide that, with retroactive effect from January 1, 2008, there shall 
be no annual fee payable to the Exchange for the remainder of the 
calendar year in which the transfer occurs for any class of securities 
of a company listed on the Amex that transfers the listing of its 
primary class of common shares to the Exchange. This proposed rule 
change (i) is conditioned on the consummation of Merger, (ii) will not 
take effect until the date of consummation of the Merger, and (iii) 
will be of no further effect if the closing of the Merger does not take 
place by March 31, 2009. The amendment also provides that companies 
transferring the listing of

[[Page 47995]]

their primary class of common stock from NYSE Arca to the Exchange 
(with respect to which the Exchange already waives annual fees for the 
first part year) will not be charged the prorated annual fee in the 
first year of listing for any class of securities that is transferred 
in connection with the transfer of the common stock.
    NYSE Euronext, the ultimate parent company of the Exchange, has 
agreed to acquire the Amex pursuant to an Agreement and Plan of Merger, 
dated as of January 17, 2008. It is currently anticipated that the 
acquisition will be consummated during the third quarter of 2008.\3\ In 
connection with the acquisition, the Exchange anticipates that some 
Amex-listed companies that qualify for listing on the Exchange may 
choose to transfer their listing to the Exchange. Consequently, subject 
to consummation of the Merger, the Exchange proposes to amend Section 
902.02 of the Manual to grant companies transferring the listing of 
their primary class of common shares and any other class of securities 
to the Exchange from the Amex a waiver of the prorated annual listing 
fee that would normally be payable in connection with the first partial 
calendar year of listing on the Exchange. The Exchange believes this is 
appropriate as companies transferring to the Exchange from the Amex 
will already have paid annual continued listing fees to the Amex for 
the calendar year in which they transfer. Some companies may choose to 
transfer from the Amex to the Exchange in advance of the consummation 
of the acquisition. As such companies will be making their transfer 
decisions in expectation of the Merger, the Exchange believes that they 
should not be penalized for transferring before the closing date. 
Consequently, the Exchange believes that it is appropriate to apply the 
fee waiver retroactively to all companies that transfer to the Exchange 
from the Amex during the portion of the year in which the Merger is 
consummated prior to such consummation.
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    \3\ The members of the Amex voted to approve the transaction on 
June 17, 2008. No vote of the NYSE Euronext shareholders is 
required. The sole remaining condition to the consummation of the 
transaction is the approval by the Division of Trading and Markets 
of certain rule filings in connection with the Merger that have been 
submitted by the NYSE and Amex. After the Merger, the Amex will be 
renamed NYSE Alternext U.S. LLC. The rule text included in Exhibit 5 
reflects this name change.
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    The Exchange believes this fee waiver is not unfairly 
discriminatory and does not constitute an inequitable allocation of 
fees, in particular because, after the Merger, NYSE Regulation, Inc. 
(``NYSE Regulation'') will perform listed company regulation for both 
the Exchange and NYSE Alternext U.S., including a substantial review of 
companies upon original listing. Many of the regulatory staff who 
currently perform initial and continued listing reviews at the Amex 
will become employees of NYSE Regulation at the time of the Merger and 
will continue to perform the same duties with respect to NYSE Alternext 
U.S. companies after the Merger. Companies transferring from NYSE 
Alternext U.S. will be subjected to the same rigorous regulatory review 
as any other applicant for listing on the Exchange. However, the 
Exchange expects that, on average, the review of companies transferring 
from NYSE Alternext U.S. to the Exchange will be less costly than the 
review of a transfer from an unaffiliated market, as the Amex listing 
regulatory staff that will have been absorbed by NYSE Regulation will 
already have performed a substantial review of any NYSE Alternext U.S. 
listed company and NYSE Regulation will be able to rely on that prior 
work as a baseline in qualifying the company for listing on the 
Exchange and in conducting ongoing compliance activities with respect 
to those companies.
    The Exchange also believes that waiving, subject to consummation of 
the Merger, the prorated annual fees applicable to any Amex security 
transferred to the NYSE prior to the Merger is not unfairly 
discriminatory or an inequitable allocation of fees. Specifically, the 
Exchange believes that the proposed fee waiver will not impact its 
ability to devote the same level of resources to its oversight of the 
companies that benefit from the waiver as it does for other listed 
companies or, more generally, impact its resource commitment to its 
regulatory oversight of the listing process or its regulatory programs. 
The Exchange notes that, after consummation of the Merger, the annual 
fee revenue paid by companies to the Amex prior to the Merger will be 
available to NYSE Regulation to finance its regulatory activities in 
relation to Amex-listed companies, regardless of whether such companies 
remain on NYSE Alternext U.S. or have chosen to transfer their listing 
to the NYSE at some point during the year either before or after the 
Merger. As such, collecting annual fees from companies upon transfer 
from the Amex to the NYSE would constitute a double billing of those 
companies for the regulatory expenses incurred by NYSE Regulation in 
relation to those companies during the year of transfer.
    Section 902.02 currently provides that any company transferring the 
listing of its primary class of common equity securities from NYSE Arca 
to the Exchange will not be charged any annual fees in connection with 
the first partial year of listing on the Exchange. Consistent with the 
Exchange's proposed approach to waiving annual fees for all securities 
transferred from NYSE Alternext U.S. concurrent with the transfer of an 
issuer's common stock, the Exchange proposes to extend the fee waiver 
described in the immediately preceding sentence to the prorated annual 
fees that would otherwise be payable with respect to any other class of 
securities that an issuer is transferring to the Exchange from NYSE 
Arca in conjunction with its transfer of its common stock. The Exchange 
believes this waiver is appropriate in light of the fact that the 
Exchange and NYSE Arca share a common parent and, without the waiver, 
NYSE Euronext would be collecting two separate annual fees in relation 
to such securities. In addition, the same staff from NYSE Regulation 
are responsible for compliance review of all securities listed on both 
markets and their prior experience with any securities transferring 
from NYSE Arca will significantly lessen the burden and costs 
associated with continued compliance review of those securities once 
they have been transferred to the NYSE. Specifically, the Exchange 
believes that the proposed fee waiver will not impact its ability to 
devote the same level of resources to its oversight of the companies 
that benefit from the waiver as it does for other listed companies or, 
more generally, impact its resource commitment to its regulatory 
oversight of the listing process or its regulatory programs.
2. Statutory Basis
    The basis under the Exchange Act for this proposed rule change is 
the requirement under Section 6(b)(5) \4\ that an Exchange have rules 
that are designed to promote just and equitable principles of trade, 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 fee waiver does not render the allocation of its listing fees 
inequitable or unfairly discriminatory because it is simply a 
recognition of the fact that companies transferring their listing from 
NYSE Alternext U.S. or NYSE Arca will already have paid fees

[[Page 47996]]

to another exchange which, in the case of NYSE Arca, is currently under 
common ownership with the Exchange, and, in the case of NYSE Alternext 
U.S. will, upon consummation of the acquisition, be under the same 
ownership as the Exchange. The Exchange believes that the fee waiver is 
not unfairly discriminatory and does not constitute an inequitable 
allocation of fees because the same regulatory staff will review 
securities on all three markets and the Exchange will therefore benefit 
from regulatory efficiencies arising out of NYSE Regulation's prior 
examination of any companies that transfer. The Exchange believes that 
the application of the waiver to companies transferring to the NYSE 
from Amex prior to the Merger is not unfairly discriminatory and does 
not constitute an inequitable allocation of fees because the annual fee 
revenue collected by the Amex from these companies will be available to 
NYSE Regulation to finance its regulatory oversight of those companies 
after the Merger.
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    \4\ 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 purpose of the Exchange 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 e-mail to rule-comments@sec.gov. Please include File 
Number SR-NYSE-2008-74 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-2008-74. 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 will 
also be available for inspection and copying at the principal office of 
the NYSE. 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-2008-74 and should be submitted by September 5, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-18893 Filed 8-14-08; 8:45 am]

BILLING CODE 8010-01-P