
[Federal Register: September 15, 2008 (Volume 73, Number 179)]
[Notices]               
[Page 53303-53304]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15se08-124]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58487; File No. SR-NYSE-2008-59]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; Order 
Approving Proposed Rule Change To Reduce the Period Within Which 
Companies Must Issue a Press Release After the Exchange Notifies Them 
That They Are Noncompliant With Exchange Listing Requirements

September 8, 2008.

I. Introduction

    On July 22, 2008, the New York Stock Exchange LLC (``NYSE'' or 
``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 the period within which companies must 
issue a press release after the Exchange notifies them that they are 
noncompliant with Exchange listing requirements. The proposed rule 
change was published for comment in the Federal Register on August 4, 
2008.\3\ The Commission received one comment in support of the 
proposal.\4\ This order approves the proposed rule change.
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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. 58235 (July 28, 
2008), 73 FR 45262.
    \4\ See email from R. Cameron Brewer, dated August 23, 2008.
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II. Description of the Proposal

    Section 802.02 of the NYSE's Listed Company Manual (the ``Manual'') 
currently requires a U.S. company to issue a press release within 45 
days of receiving written notification from the Exchange that it has 
fallen below the Exchange's continued listing standards. This section 
further provides that if the company fails to issue the press release 
during the allotted 45 days, the Exchange will issue the requisite 
press release. Similarly, Section 802.03 of the Manual currently 
requires a non-U.S. company to issue a press release within 90 days of 
receiving written notification from the Exchange that it has fallen 
below the Exchange's listing standards. In addition, if the company 
fails to issue the press release during the allotted time, the Exchange 
will issue the required press release.
    The Exchange proposes to amend Section 802.02 of the Manual to 
provide that a U.S. company must disclose receipt of written 
notification that it has fallen below the Exchange's listing standards 
by issuing a press release within the amount of time allotted by the 
SEC for companies to disclose such an occurrence, but in any event, no 
later than four business days after receipt of notification from the 
Exchange.\5\ Further, the amended rule would provide that the Exchange 
will issue a press release on the subject itself if the company has not 
acted within this allotted period. The Exchange notes that Commission 
rules currently require companies to file a Form 8-K within four 
business days of being notified by the Exchange that it does not 
satisfy a rule or standard for continued listing on the Exchange.\6\ 
The Exchange, therefore, believes that the current time period in its 
own rules of 45 days is too long in light of the much earlier public 
notice required by the Form 8-K rule.
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    \5\ The Exchange notes that companies that are incorporated in 
jurisdictions outside the United States but that do not qualify as 
foreign private issuers are treated as domestic companies for 
purposes of Section 802.02.
    \6\ Item 3.01 of Form 8-K requires a registrant to file a Form 
8-K within four business days of receipt of notice from the national 
securities exchange that maintains the principal listing for any 
class of the registrant's common equity that the registrant or such 
class of the registrant's securities does not satisfy a rule or 
standard for continued listing on the exchange.
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    The Exchange also proposes to amend Section 802.03 of the Manual to 
require a non-U.S. company to issue a press release within 30 days of 
receiving written notification that it has fallen below the Exchange's 
listing standard. Further, if the company does not issue a press 
release within that 30-day period, the Exchange will do so. The 
Exchange notes that, while foreign private issuers are not subject to 
the Form 8-K requirement imposed on domestic issuers, the Exchange 
believes that 90 days is an excessive period to give companies to make 
such a material disclosure. As such, the Exchange proposes to reduce 
from 90 days to 30 days the period within which foreign private issuers 
must issue a press release with regard to a notification by the 
Exchange of noncompliance with Exchange listing standards.

III. Discussion

    After careful review, the Commission finds that the proposed rule 
change is

[[Page 53304]]

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,\7\ 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.\8\
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    \7\ 15 U.S.C. 78f(b)(5).
    \8\ 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 believes that it is appropriate for the NYSE to 
align the timing requirement in Section 802.02 of the Manual for 
issuance of a press release when a company has received notice that it 
has fallen below the Exchange's continued listing standards with the 
Commission's timing requirement for providing notification of such 
event on the Form 8-K. The Commission believes that this change will 
ensure that a company issues a press release no later than the date it 
is currently required to file a Form 8-K providing notice of such 
event. The Commission notes that the amended rule provides that the 
company must issue a press release within the time period allotted by 
SEC rules, but in any event, no longer than four business days after 
notification. The Commission believes that reducing the time period 
from 45 days to 4 days within which companies must issue a press 
release is consistent with the protection of investors and the public 
interest because it will provide investors with earlier press release 
notification that the company has fallen out of compliance with 
Exchange listing requirements and avoids any confusion by conforming 
the time periods in the NYSE rules with current Commission 
requirements.
    Further, the Commission believes that it is appropriate for the 
NYSE to reduce from 90 days to 30 days the period within which non-U.S. 
companies must issue a press release regarding a notification by the 
Exchange of noncompliance with the Exchange's listing standards. The 
Commission believes that this change should still allow companies 
sufficient time to make the required disclosure, while at the same time 
providing investors with a more timely notification of important news 
that the company does not satisfy a rule or standard for continued 
listing on the Exchange. The Commission notes that non-U.S. companies 
that do not qualify as foreign private issuers would have to comply 
with the amended disclosure for domestic companies pursuant to Section 
802.02.\9\
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    \9\ See supra note 5.
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    The Commission also believes that it is appropriate for the 
Exchange to issue a press release itself in the event that a company 
has not acted within the new time periods required by this proposed 
rule change. This will ensure that investors are provided notification 
of a company's non-compliance in a timely fashion, regardless of a 
company's failure to meet the timing requirements of these rules. The 
Commission notes that the existing rule being amended herein did allow 
the Exchange to make such disclosure under the longer time periods. 
This proposal will permit a continuation of this authority, but with 
the updated time periods.\10\
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    \10\ The Commission also notes that nothing in this proposal 
affects a company's obligations to disclose material news in a 
timely fashion. See Section 202.05 of the Manual.
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    For the reasons set forth above, the Commission finds that the 
proposed rule change is consistent with the Act.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-NYSE-2008-59) be, and hereby 
is, approved.
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    \11\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-21332 Filed 9-12-08; 8:45 am]

BILLING CODE 8010-01-P
