[Federal Register: April 27, 2006 (Volume 71, Number 81)]
[Notices]
[Page 24879-24881]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27ap06-85]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53685; File No. SR-NYSE-2005-72]
Self-Regulatory Organizations; New York Stock Exchange, Inc. (n/
k/a New York Stock Exchange LLC); Order Granting Approval of a Proposed
Rule Change and Amendment No. 1 Thereto and Notice of Filing and Order
Granting Accelerated Approval of Amendment No. 2 Thereto To Amend
Exchange Delisting Rules To Conform to Recent Amendments to Commission
Rules Regarding Removal From Listing and Withdrawal From Registration
April 20, 2006.
I. Introduction
On October 20, 2005, the New York Stock Exchange, Inc. (n/k/a New
York Stock Exchange LLC) (``NYSE'' or ``Exchange'') filed with the
Securities and Exchange Commission (``SEC'' or ``Commission''),
pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to
amend Exchange delisting rules to conform to recent amendments to
Commission rules regarding removal from listing and withdrawal from
registration. On December 22, 2005, NYSE filed Amendment No. 1 to the
proposed rule change.\3\ The proposed rule change, as amended, was
published for comment in the Federal Register on March 13, 2006.\4\ No
comments were received regarding the proposal. On April 11, 2006, the
Exchange filed Amendment No. 2 to the proposed rule change.\5\ This
order approves the proposed rule change, as amended, publishes notice
of Amendment No. 2 to the proposed rule change, and grants accelerated
approval to Amendment No. 2.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ In Amendment No. 1, the Exchange made clarifying changes to
Item 3 of the Exchange's Form 19b-4 and to Exhibit 1.
\4\ See Securities Exchange Act Release No. 53398 (March 2,
2006), 71 FR 12738.
\5\ In Amendment No. 2, the Exchange made typographical changes
to the proposed rule text of Section 806.02 (Removal from List Upon
Request of Company) of the NYSE Listed Company Manual that were
intended to clarify that the Exchange's proposed new requirement
that a company provide a copy of the Form 25 to the Exchange
simultaneously with the filing of such Form 25 with the Commission
is a new requirement and is not part of the requirements of Rule
12d2-2(c) under the Act.
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II. Description of the Proposed Rule Change
Section 12 of the Act \6\ and Rule 12d2-2 thereunder \7\ (``SEC
Rule 12d2-2'') govern the process for the delisting and deregistration
of securities listed on national securities exchanges. Recent
amendments to SEC Rule 12d2-2 (``amended SEC Rule 12d2-2'') and other
Commission rules require the electronic filing of revised Form 25 on
the Commission's Electronic Data Gathering, Analysis, and Retrieval
(``EDGAR'') system by exchanges and issuers for all delistings, other
than delistings of standardized options and securities futures, which
are exempted.\8\
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\6\ 15 U.S.C. 78l.
\7\ 17 CFR 240.12d2-2.
\8\ See Securities Exchange Act Release No. 52029 (July 14,
2005), 70 FR 42456 (July 22, 2005).
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In the case of exchange-initiated delistings, amended SEC Rule
12d2-2(b) states that a national securities exchange may file an
application on Form 25 to strike a class of securities from listing
and/or withdraw the registration of such securities, in accordance with
its rules, if the rules of such exchange, at a minimum, provide for:
\9\
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\9\ See also Form 8-K (Item 3.01. Notice of Delisting or Failure
to Satisfy a Continued Listing Rule or Standard; Transfer of
Listing), which sets forth disclosure requirements for issuers that
do not satisfy listing standards.
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(i) Notice to the issuer of the exchange's decision to delist its
securities;
(ii) An opportunity for appeal to the exchange's board of
directors, or to a committee designated by the board; and
(iii) Public notice of the national securities exchange's final
determination to remove the security from listing and/or registration,
by issuing a press release and posting notice on its Web site. Public
notice must be disseminated no fewer than 10 days before the delisting
becomes effective pursuant to amended SEC Rule 12d2-2(d)(1), and must
remain posted on its Web site until the delisting is effective.
The Exchange proposes to amend sections 804.00 and 806.02 of the
Exchange's Listed Company Manual. With respect to the above
requirements set forth in amended SEC Rule 12d2-2(b), NYSE rules
currently provide the requisite issuer notice as well as an opportunity
for appeal to a committee designated by the Board.\10\ NYSE rules do
not currently provide for the mandated public notice, and accordingly
the Exchange is proposing changes to section 804.00 of the NYSE Listed
Company Manual to provide that
[[Page 24880]]
prior to filing the Form 25 with the Commission to withdraw a security
from listing and registration, the Exchange will give public notice of
its final determination to delist the security by issuing a press
release and posting a notice on its Web site. Such notice would remain
posted on the Exchange's Web site until the delisting is effective.
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\10\ See section 804.00 (Procedure for Delisting) of the NYSE
Listed Company Manual.
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In the case of an issuer-initiated delisting, the NYSE is retaining
section 806.02 of the NYSE Listed Company Manual that currently
provides that an issuer may delist a security after its board approves
the action and the issuer furnishes the Exchange with a copy of the
board resolution authorizing such delisting certified by the secretary
of the issuer. The Exchange's proposal would clarify that the issuer
must comply with all of the requirements of amended SEC Rule 12d2-2(c)
and thereafter file a Form 25 with the Commission to withdraw its
security from listing and registration. The Exchange's proposal would
also add a new requirement that the issuer must file a copy of Form 25
with the Exchange immediately after submitting the Form 25 with the
Commission.
In addition to the proposed changes to comply with amended SEC Rule
12d2-2, the Exchange proposes to amend section 804.00 to delete
references therein to ``public Directors'' and ``industry Directors,''
as these terms relate to a historical governance structure of the
Exchange that no longer exists.
III. Discussion
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange \11\ and, in
particular, the requirements of section 6 of the Act.\12\ Specifically,
as discussed below, the Commission finds that the proposal is
consistent with section 6(b)(5) of the Act,\13\ which requires, in
part, that the rules of an exchange be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in regulating, clearing, settling, and 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. Further, as noted in more
detail below, the changes being adopted by the Exchange meet the
requirements of amended SEC Rule 12d2-2.
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\11\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
\12\ 15 U.S.C. 78f.
\13\ 15 U.S.C. 78f(b)(5).
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A. Exchange Delisting
Amended SEC Rule 12d2-2(b) states that a national securities
exchange may file an application on Form 25 to strike a class of
securities from listing and/or withdraw the registration of such
securities, in accordance with its rules, if the rules of such
exchange, at a minimum, provide for notice to the issuer of the
exchange's decision to delist, opportunity for appeal, and public
notice of the exchange's final determination to delist. The Commission
believes that the Exchange's current rules and proposal comply with the
dictates of amended SEC Rule 12d2-2(b).
NYSE rules currently provide for the requisite issuer notice as
well as an opportunity for appeal to a committee designated by the
Board. Specifically, if the Exchange staff should determine to delist a
security, it will notify the issuer in writing of the basis of its
determination. Such notice will inform the issuer that the issuer may
appeal staff delisting determinations to a committee of the Board of
Directors of the Exchange.\14\ In addition, the proposed rule change
will provide for public notice of the Exchange's final determination to
remove the security from listing and/or registration. This should
ensure that investors have adequate notice of an exchange delisting and
is consistent with the protection of investors under section 6(b)(5) of
the Act.\15\
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\14\ See Section 804.00 of the NYSE Listed Company Manual.
\15\ 15 U.S.C. 78f(b)(5).
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B. Issuer Voluntary Delisting
In the case of an issuer-initiated delisting, section 806.02 of the
NYSE Listed Company Manual currently provides that an issuer may delist
a security after its board approves the action and the issuer furnishes
the Exchange with a copy of the board resolution authorizing such
delisting certified by the secretary of the issuer. The Exchange's
proposal would clarify that the issuer must comply with all of the
requirements of amended SEC Rule 12d2-2(c) and thereafter file a Form
25 with the Commission to withdraw its security from listing and
registration. The Commission believes that the amendments will fully
inform issuers of the requirements for voluntary delisting of their
securities under NYSE rules and federal securities laws.
The proposal also sets forth a new requirement not in amended SEC
Rule 12d2-2 that would require the issuer to notify the Exchange that
it has filed Form 25 with the Commission contemporaneously with such
filing. This requirement will allow the Exchange to be fully informed
of the actual filing of a Form 25 and be prepared to take timely action
to delist the security in accordance with the filing of the Form.\16\
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\16\ The Commission notes that current section 807.00 of the
NYSE Listed Company Manual, which the Exchange is retaining in its
rules, provides in part that where a company falls below continued
listing standards, the Exchange will permit the company to
voluntarily transfer its listing. During this transition, the
Exchange will daily disseminate ticker and information notices
identifying the security's status and will include similar
information on the Exchange's Web site.
In addition, amended SEC Rule 12d2-2(c)(2)(iii) requires a
company seeking voluntary delisting to publish notice of its
intention, along with its reasons for delisting, via a press release
and Web site. In such cases, the Commission expects that a company
below Exchange continued listing standards, in complying with
amended SEC Rule 12d2-2(c)(2)(iii), would disclose in its public
notice that it has fallen below continued listing standards,
including the specific listing policies and standards which it does
not comply with, and is voluntarily delisting from the Exchange.
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C. Accelerated Approval of Amendment No. 2
Pursuant to section 19(b)(2) of the Act,\17\ the Commission may not
approve any proposed rule change, or amendment thereto, prior to the
30th day after the date of publication of notice of the filing thereof,
unless the Commission finds good cause for so doing and publishes its
reasons for so finding. The Commission hereby finds good cause for
approving Amendment No. 2 to the proposal, prior to the 30th day after
publishing notice of Amendment No. 2 in the Federal Register. The
revisions made to the proposal in Amendment No. 2 are typographical
changes clarifying that the Exchange's proposed requirement that a
company provide a copy of the Form 25 to the Exchange simultaneously
with the filing of such Form with the Commission is a new requirement
and is not part of the requirements of amended SEC Rule 12d2-2(c). This
was the intent of the provision as originally proposed. The Commission
believes that accelerating Amendment No. 2 is appropriate because these
revisions are clarifying and do not raise new regulatory issues.
Accordingly, pursuant to Section
[[Page 24881]]
19(b)(2) of the Act,\18\ the Commission finds good cause to approve
Amendment No. 2 prior to the thirtieth day after notice of the
Amendment is published in the Federal Register.
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\17\ 15 U.S.C. 78s(b)(2).
\18\ Id.
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning Amendment No. 2, including whether Amendment No. 2
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 No. SR-NYSE-2005-72 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2005-72. 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 such
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-2005-72 and should be submitted on or before May
18, 2006.
V. Conclusion
It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\19\ that the proposed rule change (File No. SR-NYSE-2005-72), as
amended, is approved, and Amendment No. 2 to the proposed rule change
is hereby granted accelerated approval.
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\19\ Id.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6-6320 Filed 4-26-06; 8:45 am]
BILLING CODE 8010-01-P