[Federal Register: February 6, 2008 (Volume 73, Number 25)]
[Notices]
[Page 7021-7022]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06fe08-95]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57239; File No. SR-NYSE-2007-98]
Self-Regulatory Organizations; New York Stock Exchange LLC; Order
Approving Proposed Rule Change, as Modified by Amendment No. 1 Thereto,
To Reduce From Six Months to Three Months the Period for Which a
Company's Average Global Market Capitalization Must Exceed the Levels
Established by the Exchange's Pure Valuation/Revenue Test
January 30, 2008.
I. Introduction
On October 29, 2007, the New York Stock Exchange LLC (``NYSE'' or
[[Page 7022]]
``Exchange'') filed with the Securities and Exchange Commission
(``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 reduce from six months to three months the
period for which the average global market capitalization of companies
seeking to list on the Exchange must exceed the levels established by
the Exchange's ``pure valuation/revenue'' test contained in Section
102.01C of the Exchange's Listed Company Manual (the ``Manual''). On
December 14, 2007, the Exchange filed Amendment No. 1 to the proposed
rule change. The proposed rule change, as modified by Amendment No. 1,
was published for comment in the Federal Registeron December 26,
2007.\3\ The Commission received no comments on the proposal. This
order approves the proposed rule change, as amended.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 56976 (December 17,
2007), 72 FR 73055.
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II. Description of the Proposal
Section 102.01C of the Exchange's Manual requires companies listing
under the Exchange's ``pure valuation/revenue'' test to have a global
market capitalization of $750 million. In the case of companies listing
other than in connection with an initial public offering or a spin-off
or upon emergence from bankruptcy, Section 102.01C provides that the
market capitalization valuation will be determined on the basis of a
six-month average.
The Exchange now proposes to reduce from six months to three months
the period over which prospective companies seeking to list on the
Exchange must have had an average global market capitalization that
meets the required level of $750 million. In addition, the Exchange
proposes to amend the rule to specify that in considering the
suitability for listing of a company pursuant to this standard, the
Exchange will consider whether the company's business prospects and
operating results indicate that the company's market capitalization
value is likely to be sustained or increase over time.
III. Discussion
After careful review, the Commission finds that the proposed rule
change, as amended, is consistent with the requirements of the Act and
the rules and regulations thereunder applicable to a national
securities exchange and, in particular, with Section 6(b)(5) of the
Act,\4\ which requires, among other things, that the rules of a
national securities exchange be designed to prevent fraudulent and
manipulative acts and practices, 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.\5\
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\4\ 15 U.S.C. 78f(b)(5).
\5\ In approving this proposed rule change, 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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The Commission notes that the proposed rule change does not change
the quantitative global market capitalization requirement under the
Exchange's ``pure valuation/revenue'' test. This requirement will
remain at $750 million global market capitalization. Rather, the
Exchange is shortening the time period over which the average global
market capitalization of a prospective listed company must meet this
level. The Commission notes that the proposed rule change requires the
Exchange to look not only at the average three month market
capitalization of the company but to also consider whether the
company's market capitalization is likely to be sustained or increase
over time based on the company's business prospects and operation
results. The Commission therefore believes that the proposed rule
change may allow the earlier listing of companies, but at the same
time, it is designed to ensure that the Exchange does not list
companies on the basis of a market capitalization valuation that is
unlikely to be sustained. In this regard, the Commission expects that
the Exchange will scrutinize companies to ensure that it will only list
companies that should be able to continue to meet the market
capitalization standard.
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\6\ that the proposed rule change (SR-NYSE-2007-98), as modified by
Amendment No. 1, be, and hereby is, approved.
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\6\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-2073 Filed 2-5-08; 8:45 am]
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