[Federal Register: February 27, 2007 (Volume 72, Number 38)]
[Notices]
[Page 8823-8825]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27fe07-151]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55314; File No. SR-NYSE-2007-17]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Provide That There Be No Initial Listing Fee Payable for Any Equity
Security, Structured Product or Closed-End Management Investment
Company That Transfers From Another National Securities Exchange
February 20, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on February 15, 2007, the New York Stock Exchange LLC (``Exchange'' or
``NYSE'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been substantially prepared by the Exchange.
The Exchange has designated this proposal as non-controversial under
Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6)
thereunder,\4\ which renders the proposed rule change effective upon
filing with the Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\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 amend Section 902.02 of its Listed Company
Manual (the ``Manual'') to provide that there shall be no initial
listing fee payable in connection with the transfer of any equity
securities, structured product, or closed-end management investment
company listed on another national securities exchange to the Exchange.
This fee waiver will not be applicable to the transfer of any class of
securities if the issuer's primary class of common stock remains listed
on another national securities exchange.
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 NYSE 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
[[Page 8824]]
that there shall be no initial listing fee applicable to the transfer
of any equity securities, structured product (defined as securities
listed under Sections 703.18, 703.19 and 703.21) or closed-end
management investment company listed on another national securities
exchange. This fee waiver will not be applicable to the transfer of any
class of securities if the issuer's primary class of common stock
remains listed on another national securities exchange.
Section 902.03 of the Manual currently provides that issuers
transferring the listing of their primary class of common shares from
any other national securities exchange are not required in connection
with such transfer to pay (i) initial listing fees or (ii) a one-time
special charge of $37,500 payable in connection with the listing of any
new class of common shares. In addition, Section 902.03 provides that
issuers transferring the listing of their primary class of common
shares from NYSE Arca to the Exchange are not required to pay Annual
Fees with respect to that primary class of common shares for the
remainder of the calendar year in which the transfer occurs. The
proposed rule change will move this text from Section 902.03 to Section
902.02 and extend the application of waivers of the initial listing fee
and one-time special charge to any other classes of equity securities
(i.e., preferred stock, warrants, units including equity securities,
and additional classes of common stock) transferred from another
national securities exchange, as well as to transfers of closed-end
management investment companies and structured products.
Issuers of securities that qualify for the proposed waiver of
initial listing fees will be subject to the same level of annual fees
and listing of additional shares fees as other NYSE issuers. The
proposed rule change will not affect the Exchange's commitment of
resources to its regulatory oversight of the listing process or its
regulatory programs. Specifically, companies that benefit from the
waiver will be reviewed for compliance with Exchange listing standards
in the same manner as any other company that applies to be listed on
the Exchange. The Exchange will conduct a full and independent review
of each issuer's compliance with the Exchange's listing standards.
The Exchange believes that the elimination of such fees in the case
of securities transferring from other national securities exchanges is
justified on several grounds. An issuer that already paid initial
listing fees to another national securities exchange when it became a
publicly traded company is reluctant to pay a second initial listing
fee to another listing venue, even if it concludes that the Exchange
offers the issuer and its investors superior services and market
quality. Even if an issuer concludes that the Exchange would provide a
superior market for its stock, the benefits of the transfer must
currently be weighed against the cost of initial inclusion. Since the
expected benefits of the transfer would be diffused among the issuers'
investors and realized over time, but the initial listing fees must be
paid by the issuer immediately, the Exchange is concerned that issuers
that stand to benefit may nevertheless opt to forgo a transfer. As
such, the Exchange believes that assessing the initial fees against
issuers that have already paid fees to list on another market imposes a
burden on the competition between exchange markets and markets other
than exchange markets, a competition that the Exchange believes is one
of the central goals of the national market system. This concern is
particularly great in light of the fact that the Commission has
approved the waiver of initial listing fees by Nasdaq with respect to
the listing of any security being transferred from another national
securities exchange.\5\
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\5\ See Securities Exchange Act Release No. 51004 (January 10,
1005), 70 FR 2917 (January 18, 2005) (order approving SR-NASD-2004-
140).
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The Exchange understands that the effect of this proposed rule
change will be to impose a lower level of listing fees on issuers that
transfer from another national securities exchange than on some other
issuers. In light of the fact that the Exchange will collect the same
level of annual fees and listing of additional shares fees from such
issuers, however, the Exchange believes that the difference does not
constitute an inequitable allocation of fees. In light of a
transferring issuer's prior payment to another market and the generally
lower burdens associated with reviewing a transferring issuer's
eligibility, the Exchange believes that eliminating initial fees for
transferring issuers is entirely consistent with an equitable
allocation of listing fees.
The Exchange does not expect the financial impact of this proposed
rule change to be material, either in terms of increased levels of
annual fees from transferring issuers or in terms of diminished initial
listing fee revenues. Quite simply, even with the proposed rule change
in place, the Exchange understands that a change in listing venue is a
major step for an issuer, and therefore the Exchange does not expect
that the number of issuers that transfer to the NYSE in a given time
frame will be sufficient to have a material effect on financial
resources.
2. Statutory Basis
The bases under the Act for this proposed rule change are: (i) The
requirement under Section 6(b)(4) \6\ that an exchange have rules that
provide for the equitable allocation of reasonable dues, fees and other
charges among its members and other persons using its facilities, and
(ii) the requirement under Section 6(b)(5) \7\ of the Act that an
exchange have rules that are designed to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and are not designed to permit unfair discrimination between
issuers. In light of a transferring issuer's prior payment to another
market, the Exchange believes that the proposed fee waiver does not
render the allocation of its listing fees inequitable or unfairly
discriminatory. The Exchange believes that the fee waiver will increase
competition among listing markets and will remove a competitive
disadvantage the Exchange currently has vis-[agrave]-vis Nasdaq, and is
therefore designed to perfect the mechanism of a free and open market.
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\6\ 15 U.S.C. 78f(b)(4).
\7\ 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 purposes of the 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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \8\ and subparagraph (f)(6) of Rule 19b-4
thereunder.\9\ Because the Exchange has designated the foregoing
proposed rule change as one that: (i) does not significantly affect the
protection of investors or the public interest; (ii) does not impose
any significant burden on competition; and (iii) does not become
operative for 30 days from the date on
[[Page 8825]]
which it was filed, 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) of the Act and Rule 19b-4(f)(6)(iii)
thereunder.\10\
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6).
\10\ The Exchange provided written notice to the Commission 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 filing, as required by Rule 19b-4(f)(6)(iii).
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The Exchange requests that the Commission waive the 30-day
operative delay specified in Rule 19b-4(f)(6)(iii).\11\ The Exchange
believes that the proposed amendment does not affect investors as it
simply waives a fee that is applicable to companies listing on the
Exchange. Moreover, Nasdaq has already instituted such a waiver and the
Exchange is at a competitive disadvantage as long as Nasdaq can list
transferring companies without the payment of original listing fees and
the Exchange cannot. Therefore, the Exchange believes that waiving the
30-day operative delay is consistent with the protection of investors
and the public interest.
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\11\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission has determined to waive the 30-day delay and allow
the proposed rule change to become operative immediately.\12\ The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
The proposed rule is substantially similar to provisions in Nasdaq's
Rules 4510(a) and 4520(a), which were previously approved by the
Commission.\13\
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\12\ For purposes only of waiving the operative delay of this
proposal, the Commission notes that it has considered the proposed
rule's impact on efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
\13\ See supra note 5.
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At any time within 60 days of the filing of the 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 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-2007-17 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-NYSE-2007-17. 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-2007-17 and should be submitted on or before March
20, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-3287 Filed 2-26-07; 8:45 am]
BILLING CODE 8010-01-P