

[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
