

[Federal Register: March 21, 2006 (Volume 71, Number 54)]
[Notices]               
[Page 14275-14278]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21mr06-131]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53494; File No. SR-NYSE-2005-72]

 
Self-Regulatory Organizations; New York 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) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on October 20, 2005, the New York Stock Exchange, Inc. 
(``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. On 
December 22, 2005, the Exchange filed Amendment No. 1 to the proposed 
rule change.\4\ The Commission is publishing this notice to solicit 
comments on the proposed rule change, as amended, from interested 
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ In Amendment No. 1, the Exchange made clarifying changes to 
Item 3 of the Exchange's Form 19b-4 and to Exhibit 1.
---------------------------------------------------------------------------

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

    The Exchange proposes to modify the Listed Company Manual 
requirements relating to delisting procedures. The proposed rule 
change, as amended, reflects modifications of the Exchange's delisting 
rules to conform to the requirements of recently adopted Commission 
Rule 12d2-2.\5\ The text of the proposed rule change is below. Proposed 
new language is in italics; proposed deletions are in [brackets].
---------------------------------------------------------------------------

    \5\ 17 CFR 240.12d2-2.
---------------------------------------------------------------------------

* * * * *

Listed Company Manual

* * * * *

[[Page 14276]]

804.00 Procedure for Delisting

* * * * *
    The following will be the operative text of Section 804.00 
effective as of April 24, 2006:
     If the Exchange staff should determine that a security be 
removed from the list, it will so notify the issuer in writing, 
describing the basis for such decision and the specific policy or 
criterion under which such action is to be taken. The Exchange will 
simultaneously (1) issue a press release disclosing the company's 
status and the basis for the Exchange's determination and (2) begin 
daily dissemination of ticker and information notices identifying the 
security's status, and include similar information on the Exchange's 
Web site.
     The notice to the issuer [shall] will also inform the 
issuer of its right to a review of the determination by a Committee of 
the Board of Directors of the Exchange [(a majority of the members of 
such Committee voting on each determination must be public Directors)], 
provided a written request for such a review is filed with the 
Secretary of the Exchange within ten business days after receiving the 
aforementioned notice. Such written request must state with specificity 
the grounds on which the issuer intends to challenge the determination 
of the Exchange staff, must indicate whether the issuer desires to make 
an oral presentation to the Committee, and must be accompanied or 
preceded by payment of a non-refundable appeal fee in the amount of 
$20,000.
     If the issuer does not request a review within the 
specified period, the Exchange [shall] will suspend trading in the 
security and [an application by the Exchange staff to] will file a Form 
25 with the Securities and Exchange Commission to strike the security 
from listing and furnish a copy of such [application shall be 
furnished] Form 25 to the issuer in accordance with Section 12 of the 
Securities Exchange Act of 1934 and the rules promulgated thereunder. 
Prior to filing a Form 25 with the Securities and Exchange Commission, 
the Exchange will give public notice of its final determination to 
remove the security from listing by issuing a press release and posting 
a notice on its Web site. Such notice will remain posted on the 
Exchange's Web site until the delisting is effective pursuant to 
Section 12 of the Securities Exchange Act of 1934 and the rules 
promulgated thereunder.
     If a review is requested, the review will be scheduled for 
the first Review Day which is at least 25 business days from the date 
the request for review is filed with the Secretary of the Exchange, 
unless the next subsequent Review Day must be selected to accommodate 
the Committee's schedule. [The chairman of the Committee will disclose 
to the company and the staff at the commencement of the review which of 
the industry Directors present will be voting on the matter, although 
all directors will be entitled to participate in the discussion.] The 
Committee's review and final decision [shall] will be based on oral 
argument (if any) and the written briefs and accompanying materials 
submitted by the parties. The company [shall] will not be permitted to 
argue grounds for reversing the staff's decision that are not 
identified in its request for review, however, the company may ask the 
Committee for leave to adduce additional evidence or raise arguments 
not identified in its request for review, if it can demonstrate that 
the proposed additional evidence or new arguments are material to its 
request for review and that there was reasonable ground for not 
adducing such evidence or identifying such issues earlier. This section 
[shall] will not, however, (i) authorize a company to seek to file a 
reply brief in support of its request for review or (ii) be deemed to 
limit the staff's response to a request for review to the issues raised 
in the request for review. Upon review of a properly supported request, 
the Committee may in its sole discretion permit new arguments or 
additional evidence to be raised before the Committee. Following such 
event, the Committee may, as it deems appropriate, (i) itself decide 
the matter, or (ii) remand the matter to the staff for further review. 
Should the Committee remand the matter to the staff, the Committee will 
instruct the staff to (i) give prompt consideration to the matter, and, 
(ii) complete its review and inform the Committee of its conclusions no 
later than seven (7) days before the first Review Day which is at least 
25 business days from the date the matter is remanded to the staff.
     A request for review will ordinarily stay the suspension 
of the subject security pending the review, but the Exchange staff may 
immediately suspend from trading any security pending review should it 
determine that such immediate suspension is necessary or appropriate in 
the public interest, for the protection of investors, or to promote 
just and equitable principles of trade.
     Promptly following receipt of a request for review and the 
appeal fee, the Exchange's Office of the General Counsel will notify 
the issuer and the Exchange staff of the scheduled Review Day and the 
briefing schedule. The schedule will be set by the Office of the 
General Counsel so as to provide the Committee adequate time to review 
materials submitted to it, with the remaining time split so as to 
afford the issuer and the Exchange staff substantially equal periods 
for the submission of a brief by the issuer and a responsive brief by 
the Exchange staff. Each party must submit its brief and any 
accompanying materials to both its counterparty and to the Office of 
the General Counsel of the Exchange, and must do so by means calculated 
to ensure the party's submission reaches both the Office of the General 
Counsel and the counterparty at or prior to the deadline specified in 
the briefing schedule.
     The Committee, in its sole discretion upon written motion 
of either party or upon its own motion, may extend any of the time 
periods specified above. The Committee in its sole discretion may 
permit the parties to make oral presentations on their Review Day in 
accordance with such procedures as the Committee may specify at the 
time. If the Committee denies a request by either party to make an oral 
presentation, its reason for doing so must be included in its written 
decision on the review, which decision is provided to all parties. 
Document discovery and depositions will not be permitted.
     If the Committee decides that the security of the issuer 
should be removed from listing, the Exchange [shall] will (i) suspend 
trading in the security as soon as practicable [and an application 
shall be submitted by the Exchange to] , (ii) file a Form 25 with the 
Securities and Exchange Commission to strike the security from listing 
and registration and (iii) furnish a copy of such [application shall be 
furnished] Form 25 to the issuer in accordance with Section 12 of the 
Securities Exchange Act of 1934 and the rules promulgated thereunder. 
Prior to filing the Form 25 with the Securities and Exchange 
Commission, the Exchange will give public notice of its final 
determination to remove the security from listing by issuing a press 
release and posting a notice on its web site. Such notice will remain 
posted on the Exchange's web site until the delisting is effective 
pursuant to Section 12 of the Securities Exchange Act of 1934 and the 
rules promulgated thereunder. If the Committee decides that the 
security should not be removed from listing, the

[[Page 14277]]

issuer will receive from the Exchange a notice to that effect.
* * * * *

806.02 Removal from List Upon Request of Company

* * * * *
    The following will be the operative text of Section 806.02 
effective as of April 24, 2006:
    An issuer may delist a security from the Exchange after its board 
approves the action and the issuer (i) furnishes the Exchange with a 
copy of the Board resolution authorizing such delisting certified by 
the secretary of the issuer and (ii) complies with all of the 
requirements of Rule 12d2-2(c) under the Securities Exchange Act of 
1934. The issuer [may] must thereafter file [an application] a Form 25 
with the Securities and Exchange Commission to withdraw the security 
from listing on the Exchange and from registration under the Securities 
Exchange Act of 1934. The company must provide a copy of such Form 25 
to the Exchange simultaneously with its filing with the Securities and 
Exchange Commission. If an issuer delists a class of stock from the 
Exchange pursuant to this [Rule] Section 806.02, but does not delist 
other classes of listed securities, the Exchange will give 
consideration to delisting one or more of such other classes.
* * * * *

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 Exchange included statements 
concerning the purpose of, and basis for, the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange 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 804.00 (``Procedure for 
Delisting'') and Section 806.02 (``Removal from List Upon Request of 
Company'') of the Exchange's Listed Company Manual. The proposed 
amendments are intended to comply with the Commission's instruction in 
the adopting release for Commission Rule 12d2-2 \6\ requiring each 
national securities exchange to have rules designed to meet the 
requirements of Commission Rule 12d2-2 and to make initial filings of 
such proposed rule changes with the Commission no later than October 
20, 2005. The text of the proposed amendments provides that the revised 
procedures required by such amendments would be operative as of April 
24, 2006.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 52029 (July 14, 
2005), 70 FR 42456 (July 22, 2005).
---------------------------------------------------------------------------

    Commission Rule 12d2-2(b) \7\ allows a national securities exchange 
to file a Form 25 to strike a class of securities from listing in 
accordance with its rules, if the rules of such exchange, at a minimum, 
provide for:
---------------------------------------------------------------------------

    \7\ 17 CFR 240.12d2-2(b).
---------------------------------------------------------------------------

     Notice to the issuer of the exchange's decision to delist 
its securities;
     An opportunity for appeal to the exchange's board of 
directors, or to a committee designated by the board; and
     Public notice of the exchange's final determination to 
remove the security from listing by issuing a press release and posting 
notice on its web site. Such notice must be disseminated no fewer than 
10 days before the delisting becomes effective pursuant to Commission 
Rule 12d2-2(d)(1) \8\ and must remain posted until the delisting is 
effective.
---------------------------------------------------------------------------

    \8\ 17 CFR 240.12d2-2(d)(1).
---------------------------------------------------------------------------

    The proposed amendment to Section 804.00 provides that, before 
filing a Form 25 with the Commission in connection with the delisting 
of a security, the Exchange would give public notice of its final 
determination to delist the security by issuing a press release and 
posting a notice on its Web site. The notice would remain posted on the 
Exchange's Web site until the delisting is effective pursuant to 
Commission Rule 12d2-2(d)(1), i.e., 10 days after filing of the Form 25 
unless the Commission acts to delay its effectiveness. Because Section 
804.00 currently requires the Exchange to notify the issuer of the 
delisting decision and provides the issuer with a right to appeal that 
determination to a committee of the Exchange's board of directors, the 
Exchange believes that it does not need to make any other amendments to 
Section 804.00 to comply with Commission Rule 12d2-2(b).
    The proposed amendment to Section 806.02 provides that any issuer 
wishing to voluntarily delist a security from the Exchange must comply 
with all of the requirements of Commission Rule 12d2-2(c) \9\ and must 
furnish the Exchange with a copy of the Form 25 filed in connection 
with the delisting simultaneously with its filing with the Commission.
---------------------------------------------------------------------------

    \9\ 17 CFR 240.12d2-2(c).
---------------------------------------------------------------------------

    In addition to the proposed changes to comply with Commission 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.
2. Statutory Basis
    The Exchange believes that the basis under the Act for the proposed 
rule change, as amended, is the requirement under Section 6(b)(5) \10\ 
that an exchange have rules that are 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.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change, as 
amended, 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

    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 Exchange 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

[[Page 14278]]

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     Send an e-mail to rule-comments@sec.gov. Please include 

File Number SR-NYSE-2005-72 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-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 the 
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 April 
11, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
[FR Doc. 06-2753 Filed 3-16-06; 4:15 pm]

BILLING CODE 8010-01-P
