
[Federal Register Volume 79, Number 179 (Tuesday, September 16, 2014)]
[Notices]
[Pages 55517-55519]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-22004]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73071; File No. SR-NYSE-2014-49]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Proposing To Amend Section 107.03 of the Listed Company Manual To 
Provide That No Security Shall Be Approved for Listing on the Exchange 
That is Delinquent in Its Filing Obligation With the Securities and 
Exchange Commission

September 10, 2014.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on August 28, 2014, New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the self-regulatory 
organization. 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\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to [sic] The text of the proposed rule change 
is available on the Exchange's Web site at www.nyse.com, at the 
principal office of the Exchange, 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 self-regulatory organization 
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 those 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 parts 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 107.03 of the Manual to 
provide that no security shall be approved for listing on the Exchange 
that is delinquent in its filing obligation with the Commission. The 
Exchange adopted Section 107.03 of the Manual to codify its 
longstanding practice of requiring that issuers provide investors with 
current and complete financial and corporate information prior to the 
date on which such issuer seeks to list a security.\4\ Currently, 
Section 107.03 states that no security shall be approved for listing on 
the Exchange if the issuer has not for the 12 months immediately 
preceding the date of listing filed on a timely basis all periodic 
reports required to be filed with the Commission. While this 
requirement furthers the Exchange's goal of requiring adequate current 
disclosure, the Exchange believes that Section 107.03 could currently 
be read to impose requirements upon issuers that the Exchange did not 
intend and that go beyond the Exchange's practices it intended to 
embody in the rule. Accordingly, the Exchange proposes to amend Section 
107.03 to clarify how it will evaluate an issuer's compliance with 
Commission reporting requirements as it relates to approving such 
issuer for listing on the Exchange.
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    \4\ See Securities Exchange Act Release No. 70218 (August 15, 
2013), 78 FR 51788 (August 21, 2013) (SR-NYSE-2013-33).
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    In its current form, the language of Section 107.03 precludes the 
listing of any company that has failed to timely file any of its 
periodic reports with the SEC in the 12 months prior to the listing 
approval date, even if that company was current in its filings as of 
the date of its listing application. This would preclude the Exchange 
from listing a security if its issuer had been late--even by a de 
minimis amount--in filing just one of its required periodic reports 
during the preceding 12 months. The Exchange believes this outcome 
would, in certain instances, be disproportionately punitive in 
comparison to the infraction and would not provide any meaningful 
investor protection benefits. In particular, the Exchange generally 
does not believe that there is any investor protection benefit to be 
derived from conditioning an issuer's listing on the timely filing of a 
Form 10-Q when the

[[Page 55518]]

issuer has subsequently filed an annual report for a fiscal year 
including the period covered by that Form 10-Q. For these reasons, the 
Exchange now believes it is more appropriate to state that a security 
will not be approved for listing on the Exchange if its issuer is 
delinquent in its filing obligation with the Commission.
    The Exchange proposes to take a two pronged approach to determining 
whether an issuer is delinquent in its filing obligations. First, the 
Exchange will in every case deem an issuer to be delinquent and will 
not authorize such issuer for listing if it has not filed an annual 
report (on Forms 10-K, 20-F, 40-F or N-CSR) for its most recent fiscal 
year end and all subsequent quarterly reports (on Form 10-Q) by the 
date it seeks to list on the Exchange. Second, the Exchange will 
undertake a qualitative review of an issuer's past (i.e. prior to its 
annual report for its most recent fiscal year) compliance with the 
Commission's reporting requirements. If, in the course of that review, 
the Exchange learns that an issuer has failed to file one or more 
historical annual or quarterly reports (each such report an ``omitted 
filing''), it will create a rebuttable presumption that the Exchange 
will deem the issuer to be delinquent in its filing obligations with 
the Commission and therefore will not approve the issuer for listing. 
Notwithstanding the foregoing, the Exchange, in its sole discretion, 
may decide that an omitted filing is not a bar to listing if it is 
satisfied that (i) there is evidence that the Commission does not 
intend to take action against the issuer as a result of the company's 
failure to submit such omitted filing or (ii) a sufficient period of 
filing compliance has passed since the due date of the omitted filing 
that the information required to be included in such omitted filing 
would be of little relevance to investors at the time of listing.\5\
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    \5\ While the period of elapsed time that the Exchange would 
consider to be sufficient will vary from case to case, the Exchange 
expects it to be a minimum of two years and potentially longer 
depending on the facts and circumstances surrounding a particular 
issuer.
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    The Exchange believes that, as amended, Section 107.03 will still 
provide investors with a sufficient level of protection. Under the 
proposed rule, issuers will still be required to have filed their most 
recent annual report and all subsequent quarterly reports. Further, 
historical non-compliance with the Commission's filing requirements 
will serve as a bar to listing in the absence of the mitigating factors 
described above. Lastly, the Exchange's proposed amendment to Section 
107.03 of the Manual is comparable to Nasdaq Stock Market (``Nasdaq'') 
Rule 5210(e).
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act, in general, and furthers the objectives 
of Sections 6(b)(5) of the Act, in particular, in that it is designed 
to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, 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. 
The Exchange believes that the proposed amendment is consistent with 
the investor protection objectives of Section 6(b)(5) because issuers 
under the proposed amended rule will still be required to provide 
investors with current and complete financial and corporate information 
prior to having their securities authorized for listing on the 
Exchange. Further, looking back more than twelve months at an issuer's 
filing compliance will enhance investor protection. Moreover, the 
proposed amendment will foster cooperation and coordination with 
persons engaged in regulating transactions in securities by harmonizing 
the Exchange's listing requirements in this regard with those of 
Nasdaq.

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. The proposed rule change is 
applicable to all issuers applying to list their securities on the 
Exchange and is comparable to the Nasdaq requirement. Accordingly, the 
Exchange does not believe that the proposed change would impose any 
burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

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)(iii) of the Act \6\ and Rule 19b-4(f)(6) thereunder.\7\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on 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.\8\
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    \6\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \7\ 17 CFR 240.19b-4(f)(6).
    \8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's 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 the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Commission deems this requirement to have been met.
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    A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\10\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest.
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    \9\ 17 CFR 240.19b-(f)(6).
    \10\ 17 CFR 240.19b-4(f)(6)(iii).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend 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. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \11\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \11\ 15 U.S.C. 78s(b)(2)(B).
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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 email to rule-comments@sec.gov. Please include 
File

[[Page 55519]]

Number SR-NYSE-2014-49 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2014-49. This file 
number should be included on the subject line if email 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 Web site viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE., Washington, 
DC 20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. 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-2014-49 and should be 
submitted on or before October 7, 2014.

    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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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2014-22004 Filed 9-15-14; 8:45 am]
BILLING CODE 8011-01-P


