[Federal Register Volume 76, Number 176 (Monday, September 12, 2011)]
[Notices]
[Pages 56244-56246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-23169]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65264; File No. SR-NYSE-2011-44]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Amending Section 501.00 of the Listed Company Manual To Expand the
Waiver Provision To Apply to Foreign Issuers
September 6, 2011.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on August 22, 2011, New York
Stock Exchange LLC (``NYSE'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change described in Items
I and II below, which items have been prepared primarily by NYSE.\2\
NYSE filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) and Rule 19b-4(f)(6) thereunder so that the proposed
rule change was effective upon filing with the Commission.\3\ The
Commission is publishing this notice to solicit
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comments on the proposed rule change from interested parties.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ The text of the proposed rule change is attached as Exhibit
5 to NYSE's filing, which is available at http://www.nyse.com.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii) and 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
NYSE proposes to amend Section 501.00 of the NYSE's Listed Company
Manual (``Manual'') to expand the waiver provision so that it applies
to all ``foreign issuers'' that otherwise qualify for the waiver rather
than just to ``foreign private issuers.''
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, 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. NYSE has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of these
statements.\4\
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\4\ The Commission has modified the text of the summaries
prepared by NYSE.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Section 501.00 of the Manual provides that all securities listed on
NYSE (with the exception of securities which are specifically permitted
to be book-entry only) must be eligible for a direct registration
system (``DRS'') operated by a securities depository.\5\ When Section
501.00 was initially adopted, NYSE recognized that the laws or
regulations of certain foreign countries might make it impossible for
companies or listing applicants incorporated in those countries to
comply with the DRS eligibility requirement of Section 501.00.
Consequently, the current rule contains a provision providing that NYSE
would waive the application of Section 501.00 to any listed company
that is a ``foreign private issuer'' \6\ that submits to NYSE a letter
from an independent home country counsel certifying that a home country
law or regulation prohibits such compliance. NYSE now proposes to amend
the waiver provision to extend its application to all ``foreign
issuers'' as that term is used in Securities Exchange Act Rule 3b-4,\7\
rather than only to ``foreign private issuers.'' NYSE believes this
amendment is necessary because the same legal or regulatory impediments
to DRS eligibility exist for a ``foreign issuer'' that is incorporated
in a foreign jurisdiction but that does not qualify for ``foreign
private issuer'' status exists for a ``foreign private issuer''
incorporated in the same jurisdiction that is currently eligible to use
the waiver provision in Section 501.00. Absent this extension of the
scope of the waiver provision, the DRS eligibility requirement would
render it impossible for a ``foreign issuer'' to list if it was not a
``foreign private issuer'' but was incorporated in a foreign
jurisdiction whose law or regulation made compliance with Section
501.00 impossible.
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\5\ Section 501.01 of the Manual provides that a ``securities
depository'' means a clearing agency, as defined in Section 3(a)(23)
of the Securities Exchange Act of 1934, that is registered with the
Securities and Exchange Commission pursuant to Section 17A(b)(2) of
that Act.
\6\ The term ``foreign private issuer'' as used in Section
501.00 has the meaning set forth in Securities Exchange Act Rule 3b-
4. Under Rule 3b-4, the term ``foreign private issuer'' means any
foreign issuer other than a foreign government except for an issuer
meeting the following conditions as of the last business day of its
most recently completed second fiscal quarter: (a) More than 50
percent of the issuer's outstanding voting securities are directly
or indirectly held of record by residents of the United States and
(b) Any of the following: (i) the majority of the executive officers
or directors are United States citizens or residents; (ii) more than
50 percent of the assets of the issuer are located in the United
States; or (iii) the business of the issuer is administered
principally in the United States.
\7\ For purposes of Securities Exchange Act Rule 3b-4, the term
``foreign issuer'' means any issuer which is a foreign government, a
national of any foreign country, or a corporation or other
organization incorporated or organized under the laws of any foreign
country.
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NYSE rules provide limited exemptions with respect to corporate
governance practices and interim earnings reporting for ``foreign
private issuers.'' \8\ NYSE does not intend to expand the scope of such
relief to ``foreign issuers'' that do not qualify for ``foreign private
issuer'' status. However, NYSE believes that the proposed amendment to
Section 501.00 is appropriate in light of the specific and discrete
problem faced by ``foreign issuers'' that are not ``foreign private
issuers'' but that are prohibited by home country law or regulation
from becoming DRS eligible.
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\8\ Section 103.00 of the Manual.
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) \9\ of the
Act of 1934, in general, and furthers the objectives of Section 6(b)(5)
of the Act,\10\ in particular in that it is 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, 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. NYSE believes that the
proposed amendment is also consistent with the investor protection
objectives of the Act in that it will provide a very limited exception
to the DRS eligibility requirement of Section 501.00 that will be
available only to ``foreign issuers'' that provide a letter from home
country counsel certifying that compliance with that requirement is
prohibited by home country law or regulation.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
NYSE 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
No written comments relating to the proposed rule change have been
solicited or received. NYSE will notify the Commission of any written
comments received by NYSE.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
NYSE has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\
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) by its terms, does not
become operative for 30 days after the date of the filing, 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)(iii) of the
Act \13\ and Rule 19b-4(f)(6) thereunder.
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\11\ 15 U.S.C. 78(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(6).
\13\ 15 U.S.C. 78(b)(3)(A)(iii).
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A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally
does not
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become operative prior to 30 days after the date of the filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\15\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. NYSE has requested
that the Commission waive the 30-day delayed operative date so that the
proposed rule change may take effect upon filing with the Commission
pursuant to Section 19(b)(3)(A) and Rule 19b-4(f)(6) thereunder and
also become operative on the same date. NYSE believes that the waiver
of the 30-day operative delay is consistent with the protection of
investors and the public interest because the proposed change is of a
limited scope consistent with relief currently applicable to foreign
private issuers and because it would facilitate a prompt listing of
securities on NYSE that may otherwise be subject to conflicts based on
the listing company's home country law or regulation.\16\
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\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
\16\ NYSE's justification for the waiver of the 30-day operative
delay was modified in part based on a telephone call with John
Carey, Chief Counsel, NYSE, and Susan Petersen, Special Counsel,
Commission (September 2, 2011).
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The Commission has determined that waiving the 30-day operative
delay of NYSE's proposal is consistent with the protection of investors
and the public interest because we concur with NYSE's assessment that
the amendment is of a limited scope consistent with relief currently
applicable to foreign private issuers and that it would facilitate a
prompt listing of securities on NYSE that may otherwise be subject to
conflicts based on the listing company's home country law or
regulation.\17\ Accordingly, the Commission waives the 30-day operative
delay requirement and designates the proposed rule change to be
operative upon filing with the Commission.
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\17\ For purposes only of waiving the 30-day operative delay,
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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At any time within sixty days of the filing of such 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.
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 [email protected]. Please include
File Number SR-NYSE-2011-44 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2011-44. 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 Web site viewing and
printing in the Commission's Public Reference Section, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 p.m. Copies of such filings also will be available for
inspection and copying at the principal office of NYSE and on NYSE's
Web site, http://www.nyse.com. 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-2011-44 and should be submitted on or before
October 3, 2011.
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-23169 Filed 9-9-11; 8:45 am]
BILLING CODE 8011-01-P