66822 Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Notices 

13 15 U.S.C. 78s(b)(2)(B). 

14 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4An Investment Management Entity is a listed 

company that manages private investment vehicles 

not registered under the Investment Company Act. 

5An ‘‘Eligible Portfolio Company’’ of an 

Investment Management Entity is a company in 

which the Investment Management Entity has 

owned at least 20% of the common stock on a 

continuous basis since prior to that company’s 

initial listing. 

6The current rule provides that, for years prior to 

calendar 2019, the Investment Management Entity 

Group Fee Discount is based on both annual and 

listing fees paid in the applicable year and, for 

calendar 2019 and subsequent years, the discount 

is based only on annual fees. 

under Section 19(b)(2)(B) 13 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

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 Number SR– 

NYSEARCA–2018–80 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–NYSEARCA–2018–80. 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 website (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 website 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. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSEARCA–2018–80 and 

should be submitted on or before 

January 17, 2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–27988 Filed 12–26–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84854; File No. SR–NYSE– 

2018–61] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Amending 

Section 902.02 of the NYSE Listed 

Company Manual To Modify the 

Investment Management Entity Group 

Fee Discount 

December 19, 2018. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on December 

7, 2018, 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, II, and III below, which Items 

have been prepared by the selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Section 902.02 of the NYSE Listed 

Company Manual (the ‘‘Manual’’) to 

modify the Investment Management 

Entity Group Fee Discount. The 

proposed rule change is available on the 

Exchange’s website 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Section 902.02 of the Manual 

provides for a fee discount applicable 

only to an Investment Management 

Entity 4 and its Eligible Portfolio 

Companies 5 (the ‘‘Investment 

Management Entity Group Fee 

Discount’’). The Investment 

Management Entity Group Fee Discount 

is subject to a maximum aggregate 

discount of $500,000 in any given year 

(the ‘‘Maximum Discount’’) distributed 

among the Investment Management 

Entity and each of its Eligible Portfolio 

Companies in proportion to their 

respective eligible fee obligations in 

such year.6 In addition to benefiting 

from the Investment Management Entity 

Group Fee Discount, the Investment 

Management Entity and each of the 

Eligible Portfolio Companies continue to 

have fees capped by the applicable 

company’s individual Total Maximum 

Fee of $500,000. 

Currently, the Investment 

Management Entity Group Fee Discount 

is as follows: 

• A 30% discount on all eligible fees 

of an Investment Management Entity 

and each of its Eligible Portfolio 

Companies in any year in which the 

Investment Management Entity has two 

Eligible Portfolio Companies, subject to 

the Maximum Discount. 

• a 50% discount on all eligible fees 

of an Investment Management Entity 

and each of its Eligible Portfolio 

Companies in any year in which the 

Investment Management Entity has 

three or more Eligible Portfolio 

Companies, subject to the Maximum 

Discount. 


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Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Notices 66823 

7See Securities Exchange Act Release No. 79582 

(December 16, 2016), 81 FR 93976 (December 22, 

2016) (SR–NYSE–2016–70). 

8See Note 14 infra. [sic] 

9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(4). 

11 15 U.S.C. 78f(b)(5). 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f)(2). 

14 15 U.S.C. 78s(b)(2)(B). 

The Exchange proposes to modify the 

Investment Management Entity Group 

Fee Discount effective January 1, 2019. 

For calendar 2019 and all calendar years 

thereafter, the Investment Management 

Entity Group Fee Discount will be a 

50% discount on all annual fees of an 

Investment Management Entity and 

each of its Eligible Portfolio Companies 

in any year in which the Investment 

Management Entity has one or more 

Eligible Portfolio Companies, subject to 

the Maximum Discount. 

The Exchange established the 

Investment Management Entity Group 

Fee Discount 7 because, in the 

Exchange’s experience, an Investment 

Management Entity puts high-quality 

and experienced management teams in 

place at its portfolio companies prior to 

listing and the Investment Management 

Entity continues to provide significant 

support to those companies after listing. 

Consequently, those companies require 

lower levels of support from the NYSE’s 

business and Regulation groups to assist 

them in navigating the initial and 

continued listing process and the 

Exchange devotes significantly smaller 

staff resources to those companies on 

average than to the typical newly-listed 

company that is not controlled prior to 

listing by an Investment Management 

Entity. The Exchange believed that it 

was reasonable to share some of the cost 

savings derived from its relationship 

with an Investment Management Entity 

with the Investment Management Entity 

and its listed portfolio companies. 

The Exchange now believes that it is 

appropriate to adjust the discount by 

providing it where there is a single 

listed portfolio company and to provide 

the discount at a fixed 50% level (rather 

than the current 30% and 50% tiers 

based on the number of Eligible 

Portfolio Companies), because the 

Exchange has observed that the 

reduction in work load and expense it 

experiences due to the relationship of 

an Eligible Portfolio Company to the 

Investment Management Entity are 

proportionally the same with respect to 

each Eligible Portfolio Company 

regardless of how many other Eligible 

Portfolio Companies there may be. 

Accordingly, the Exchange believes it is 

reasonable to provide a single tier 

discount without regard to the number 

of Eligible Portfolio Companies an 

Investment Management Entity may 

have. The Exchange also notes that the 

proposed amendment is substantially 

similar to a fee discount provided by 

NASDAQ 8 and therefore will enable the 

Exchange to better compete for the 

listing of eligible companies. 

The Exchange does not expect the 

reduction in revenues associated with 

the proposed fee change to be 

substantial or to have any effect on its 

ability to appropriately fund its 

regulatory program. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,9 in general, and 

furthers the objectives of Section 

6(b)(4) 10 of the Act, in particular, in that 

it is designed to provide for the 

equitable allocation of reasonable dues, 

fees, and other charges. The Exchange 

also believes that the proposed rule 

change is consistent with Section 6(b)(5) 

of the Act,11 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 and is not designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange believes that it is not 

unfairly discriminatory and represents 

an equitable allocation of reasonable 

fees to amend the Investment 

Management Entity Group Discount as 

set forth in this proposal, as the 

amended discount provision better 

reflects the benefits the Exchange 

derives from the relationship between 

and Investment Management Entity and 

its Eligible Portfolio Companies, as 

described in more detail above. 

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 designed to 

ensure that the fees charged by the 

Exchange accurately reflect the services 

provided and benefits realized by listed 

companies. The market for listing 

services is extremely competitive. Each 

listing exchange has a different fee 

schedule that applies to issuers seeking 

to list securities on its exchange. Issuers 

have the option to list their securities on 

these alternative venues based on the 

fees charged and the value provided by 

each listing. Because issuers have a 

choice to list their securities on a 

different national securities exchange, 

the Exchange does not believe that the 

proposed fee changes impose a 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 foregoing rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) 12 of the Act and 

subparagraph (f)(2) of Rule 19b–4 13

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

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) 14 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

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 Number SR– 

NYSE–2018–61 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. 


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66824 Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Notices 

15 17 CFR 200.30–3(a)(12). 

1 15 U.S.C.78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See current Rule 1.1(b), defining Allied Person. 

5See Securities Exchange Act Release No. 58549 

(September 15, 2008), 73 FR 54444 (September 19, 

2008) (SR–NYSE–2008–80) (Notice). 

6See Securities Exchange Act Release No. 84724 

(December 6, 2018), 83 FR 63960 (December 12, 

2018) (SR–NYSEAmer–2018–54) (Notice). 

7See Securities Exchange Act Release No. 58533 

(September 12, 2008), 73 FR 54652 (September 22, 

2008) (SR–FINRA–2008–036) (Order). 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(5). 

All submissions should refer to File 

Number SR–NYSE–2018–61. 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 website (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 website 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. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSE–2018–61 and should 

be submitted on or before January 17, 

2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–28006 Filed 12–26–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84857; File No. SR– 

NYSEARCA–2018–97] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change of Amendments to Delete 

References to the Term ‘‘Allied Person’’ 

From Exchange Rules 

December 19, 2018. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19bd–4 thereunder,3

notice is hereby given that, on December 

18, 2018, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes amendments 

to delete references to the term ‘‘allied 

person’’ from Exchange rules. The 

proposed rule change is intended to 

harmonize Exchange rules with the 

rules of the Exchange’s affiliates and the 

Financial Regulatory Authority, Inc. 

(‘‘FINRA’’) and thus promote 

consistency within the securities 

industry. The proposed rule change is 

available on the Exchange’s website 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

rules to delete the term ‘‘allied person’’ 

from its rules. The ‘‘allied person’’ 

designation is a regulatory category 

based on a person’s control of an OTP 

Firm or ETP Holder.4 The Exchange’s 

affiliate New York Stock Exchange LLC 

(the ‘‘NYSE’’) no longer has allied 

members.5 More recently, another 

affiliate of the Exchange, NYSE 

American LLC (‘‘NYSE American’’), 

deleted the term ‘‘allied member’’ from 

its rules.6 FINRA has also deleted the 

term from its Incorporated NYSE Rules.7

In order to harmonize with the rules of 

the NYSE, NYSE American and FINRA, 

the Exchange accordingly proposes to 

delete reference to ‘‘allied person’’ from 

the following Exchange rules: Rule 

1.1(c), Rule 1.1(qq), Rule 1.1(aaa), Rule 

2.14, Rule 2.21, Rule 2.23, Commentary 

.01, Rule 2.24, Commentary .01, Rule 

3.2, Rule 4.2–O(a), Rule 4.2–O(b), Rule 

4.2–O(e), Rule 4.2–O(g), Rule 4.2–O(h), 

Rule 4.16–O(b), Rule 4.16–O(c), Rule 

4.16–O(d), Rule 6.2–O, Rule 9.1–O(c), 

Rule 9.2–O(c), Commentary .01, Rule 

9.3–O(b), Rule 9.6–O(a), Rule 4.3–E(a), 

Rule 4.3–E(b), Rule 4.3–E(e), Rule 4.3– 

E(h), Rule 4.3–E(i), Rule 4.15–E(b), Rule 

4.15–E(c), Rule 4.15–E(d), Rule 7.3–E, 

Rule 9.1–E(c), Rule 9.2–E(c), 

Commentary .01, Rule 9.3–E(b) and Rule 

9.6–E(a). The Exchange also proposes to 

delete Rule 1.1(b), which defines the 

term allied person, in its entirety. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),8 in general, and furthers the 

objectives of Section 6(b)(5),9 in 

particular, because 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 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 rule change will harmonize its 

rules with NYSE, NYSE American and 

FINRA rules, thus assisting ETP 

Holders, OTP Holders and OTP Firms in 

complying with those rules and thereby 

enhancing regulatory efficiency. In 

addition, the Exchange believes that 

providing greater harmonization 

between the Exchange and NYSE, NYSE 

American and FINRA rules would result 


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