[Federal Register Volume 64, Number 37 (Thursday, February 25, 1999)]
[Notices]
[Page 9370]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-4634]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41055; File No. SR-NYSE-98-40]
Self-Regulatory Organizations; Order Approving Proposed Rule
Change by the New York Stock Exchange, Inc. Permanently Approving a
Pilot Program Amending Paragraph 902.02 of the Exchange's Listed
Company Manual to Reduce Initial Listing Fees Under Certain
Circumstances
February 16, 1999.
I. Introduction
On November 20, 1998, the New York Stock Exchange, Inc. (``NYSE''
or ``Exchange'') submitted to 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 establishing a pilot program to amend paragraph
902.02 of the Exchange's Listed Company Manual (``Manual'') and seeking
permanent approval of the pilot program. Paragraph 902.02 of the Manual
contains the schedule of current listing fees for companies listing
securities on the Exchange.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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The proposed rule change was published for comment in the Federal
Register on November 30, 1998.\3\ The Commission received no comments
on the proposal. This order approves the proposal.
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\3\ See Securities Exchange Act Release No. 40698 (November 20,
1998), 63 FR 65833 (Notice of filing and order granting partial
accelerated approval to the proposed rule change establishing a
pilot program to reduce initial listings fees under certain
circumstances. The pilot program expires on February 19, 1999.).
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II. Description of Proposal
The proposed rule change amends the listed company fee schedule,
set forth in Paragraph 902.02 of the Manual, as it applies to certain
business combinations. Specifically, the Exchange seeks to adopt a
reduced fee structure for mergers between an NYSE-listed company and a
non-NYSE listed company (not including ``back door listings'' pursuant
to paragraph 703.08(E) of the Manual).
The Exchange proposes to reduce the basic initial listing fee such
that the fee is 25% of the applicable basic initial listing fee for the
above specified listings that occur within 12 months of the merger.
However, if the merger and subsequent listing occur within 12 months of
the initial listing of the NYSE-listed company, the Exchange proposes
to reduce the basic initial listing fee for the merged entity to the
lesser of (a) 25% of the applicable basic initial listing fee for the
merged entity; or (b) the full applicable basic initial listing fee for
the merged entity less the fee already paid by the NYSE-listed company
at the time of its initial listing.
III. Discussion
The Commission finds that the proposed rule change is consistent
with the requirements of the Act \4\ and the rules and regulations
thereunder applicable to a national securities exchange, and in
particular, with the provisions of Sections 6 \5\ and 11A of the
Act.\6\ More specifically, the Commission believes that the proposed
rule change is consistent with Sections 6(b)(4) \7\ and
11A(a)(1)(C)(ii) of the Act.\8\ Section 6(b)(4) requires that the rules
of an exchange assure the equitable allocation of reasonable dues,
fees, and other charges among members, issuers, and other persons using
its facilities. In Section 11A(a)(1)(C)(ii) of the Act, Congress found
that it is in the public interest and appropriate for the protection of
investors and the maintenance of fair and orderly markets to assure
fair competition among exchange markets, and between exchange markets
and markets other than exchange markets.
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\4\ In permanently approving the pilot, the Commission
considered the pilot's impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).
\5\ 15 U.S.C. 78f.
\6\ 15 U.S.C. 78k-1.
\7\ 15 U.S.C. 78F(b)(4)
\8\ 15 U.S.C. 78k-1(a)(1)(C)(ii).
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The Commission believes that, by reducing initial listing fees
under certain circumstances, the proposal may ease the financial
burdens of merger transactions with Exchange-listed issuers, thus
facilitating capital formation. The Commission also believes that the
proposed reduction in listing fees, which applies to all similarly
situated issuers, may increase competition for listings between market
centers. For the foregoing reasons, the Commissions finds that the
NYSE's proposal is consistent with the Act.
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\9\ that the proposed rule change (SR-NYSE-98-40) is approved.
\9\ 15 U.S.C. 78s(b)(2).
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For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 99-4634 Filed 2-24-99; 8:45 am]
BILLING CODE 8010-01-M