Federal Register / Vol. 85, No. 245 / Monday, December 21, 2020 / Notices 83121 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

on competition among brokers, as they 

will all continue to be subject to the 

same maximum fee schedule. For the 

same reason there will be no effect on 

the competition among issuers resulting 

from the proposed rule change, as all 

issuers will remain subject to the same 

maximum fee schedule as applied under 

the FINRA rule. As all of the issuers 

listed on all of the national securities 

exchanges are currently obligated to pay 

the same maximum fees under the 

current NYSE rules and FIRNA Rule 

2251, the proposal will also have no 

effect on the competition for listings 

among the national securities 

exchanges. For the foregoing reasons, 

the Exchange believes that the proposal 

does not impose any burden on 

competition that that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

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 not 

necessary or appropriate in furtherance 

of the purposes of the Act. All of the 

NYSE member organizations that are 

subject to the fee schedule in the current 

forms of Rules 451 and 465 are also 

subject to the identical provisions of 

FINRA Rule 2251. Consequently, the 

proposed rule change will have no effect 

on competition among brokers, as they 

will all continue to be subject to the 

same maximum fee schedule. For the 

same reason there will be no effect on 

the competition among issuers resulting 

from the proposed rule change, as all 

issuers will remain subject to the same 

maximum fee schedule as applied under 

the FINRA rule. As all of the issuers 

listed on all of the national securities 

exchanges are currently obligated to pay 

the same maximum fees under the 

current NYSE rules and FIRNA Rule 

2251, the proposal will also have no 

effect on the competition for listings 

among the national securities 

exchanges. For the foregoing reasons, 

the Exchange believes that the proposal 

does not impose any burden on 

competition that 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 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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or up to 90 days (i) as the 

Commission may designate if it finds 

such longer period to be appropriate 

and publishes its reasons for so finding 

or (ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be 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–2020–96 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–2020–96. 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–2020–96 and should 

be submitted on or before January 11, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28010 Filed 12–18–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90675; File No. SR– 

NYSEArca–2020–54] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of 

Amendment No. 1 and Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove a Proposed 

Rule Change, as Modified by 

Amendment No. 1, To Amend NYSE 

Arca Rule 5.3–E To Exempt Registered 

Investment Companies That List 

Certain Categories of the Securities 

Defined as Derivative and Special 

Purpose Securities Under NYSE Arca 

Rules From Having To Obtain 

Shareholder Approval Prior to the 

Issuance of Securities in Connection 

With Certain Acquisitions of the Stock 

or Assets of an Affiliated Company 

December 15, 2020. 

I. Introduction 

On August 28, 2020, NYSE Arca, Inc. 

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

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Act’’ or 

‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

amend NYSE Arca Rule 5.3–E 

(Corporate Governance and Disclosure 

Policies) to exempt certain categories of 

derivative and special purpose 

securities from the requirement to 

obtain shareholder approval prior to the 

issuance of securities in connection 

with certain acquisitions of the stock or 

assets of another company. The 

83122 Federal Register / Vol. 85, No. 245 / Monday, December 21, 2020 / Notices 

3See Securities Exchange Act Release No. 89834 

(September 11, 2020), 85 FR 58090 (‘‘Original 

Proposal’’). 

4 15 U.S.C. 78s(b)(2). 

5See Securities Exchange Act Release No. 90297, 

85 FR 70701 (November 5, 2020). The Commission 

designated December 16, 2020, as the date by which 

the Commission shall approve or disapprove, or 

institute proceedings to determine whether to 

disapprove, the proposed rule change. 

6 In Amendment No. 1, the Exchange: (1) 

Removed from the proposed rule text a condition 

that the proposed exemption from the Exchange’s 

shareholder approval requirement would apply 

only to a transaction that does not require 

shareholder approval under Rule 17a–8 (as defined 

herein); (2) removed the related discussion in the 

proposed rule change about why the Exchange 

believed it would have been appropriate to only 

exempt transactions that do not require shareholder 

approval under Rule 17a–8; (3) removed statements 

in its purpose section that incorrectly stated that 

Rule 17a–8 exempts the acquiring company from 

obtaining shareholder approval under certain 

conditions; (4) supplemented its discussion of why 

the Exchange believes it is appropriate to exempt 

an issuer of 1940 Act Securities (as defined herein) 

from obtaining shareholder approval in the context 

of a merger of affiliated companies in light of its 

revised discussion of Rule 17a–8’s shareholder 

approval requirements; and (5) made other 

clarifications, corrections, and technical changes. 

Amendment No. 1 is available on the Commission’s 

website at https://www.sec.gov/rules/sro/ 

nysearca.htm. 

7 15 U.S.C. 78s(b)(2)(B). 

8The Exchange proposes to exempt the following 

categories of derivative and special purpose 

securities: securities listed pursuant to Rules 5.2– 

E(h) (Unit Investment Trusts), 5.2–E(j)(3) 

(Investment Company Units), 5.2–E(j)(8) (ExchangeTraded Fund Shares), 8.100–E (Portfolio Depositary 

Receipts), 8.600–E (Managed Fund Shares), 8.601– 

E (Active Proxy Portfolio Shares) and 8.900–E 

(Managed Portfolio Shares) (collectively, the ‘‘1940 

Act Securities’’). Each of the aforementioned 

categories of derivative and special purpose 

securities are issued by an entity organized under 

the Investment Company Act of 1940 (the ‘‘1940 

Act’’). 

9 17 CRF 270.17a–8. 

10Approximately 88% of securities listed on the 

Exchange are issued by investment companies 

registered under the 1940 Act. 

11 17 CRF 270.17a–8. 

12The Exchange notes that the proposing releases 

for Rule 17a–8 specifically contemplated that, in 

certain circumstances, the price paid may deviate 

from a fund’s net asset value due to adjustments for 

tax purposes. See Investment Company Act Release 

No. 25259 at Footnote 26. 

proposed rule change was published for 

comment in the Federal Register on 

September 17, 2020.3 On October 30, 

2020, pursuant to Section 19(b)(2) of the 

Exchange Act,4 the Commission 

designated a longer period within which 

to approve the proposed rule change, 

disapprove the proposed rule change, or 

institute proceedings to determine 

whether to disapprove the proposed 

rule change.5 On December 1, 2020, the 

Exchange filed Amendment No. 1 to the 

proposed rule change, which 

superseded the proposed rule change as 

originally filed.6 The Commission has 

received no comments on the proposed 

rule change. The Commission is 

publishing this notice and order to 

solicit comments on the proposed rule 

change, as modified by Amendment No. 

1, from interested persons, and to 

institute proceedings pursuant to 

Section 19(b)(2)(B) of the Exchange Act 7

to determine whether to approve or 

disapprove the proposed rule change, as 

modified by Amendment No. 1. 

II. The Exchange’s Description of the 

Proposed Rule Change, as Modified by 

Amendment No. 1 

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 

NYSE Arca Rule 5.3–E(d)(9) requires 

issuers to obtain shareholder approval 

in connection with the acquisition of 

the stock or assets of another company, 

in the following circumstances: 

(i) If any director, officer, or 

substantial shareholder of the listed 

company has a 5% or greater interest (or 

such persons collectively have a 10% or 

greater interest), directly or indirectly, 

in the company or assets to be acquired 

or in the consideration to be paid in the 

transaction (or series of related 

transactions) and the present or 

potential issuance of common stock, or 

securities convertible into or exercisable 

for common stock, could result in an 

increase in outstanding common shares 

or voting power of 5% or more; or 

(ii) where the present or potential 

issuance of common stock, or securities 

convertible into or exercisable for 

common stock (other than in a public 

offering for cash), could result in an 

increase in outstanding common shares 

of 20% or more or could represent 20% 

or more of the voting power outstanding 

before the issuance of such stock or 

securities. 

The Exchange proposes to exempt 

issuers of certain categories of derivative 

and special purpose securities 8 from 

having to comply with this requirement 

when they issue securities in 

connection with the acquisition of the 

stock or assets of an affiliated company. 

In general, the requirement to obtain 

shareholder approval prior to the 

issuance of securities in connection 

with certain acquisitions of the stock or 

asset of another company is designed to 

give existing shareholders a vote on the 

issuance of stock that may dilute their 

voting or economic rights. The 

Exchange notes that NYSE Arca Rule 

5.3–E(d)(9) is also intended to give 

shareholders a vote on transactions 

where a director, officer, or substantial 

shareholder of the listed company has a 

significant interest in the company or 

assets to be acquired or the 

consideration to be paid and therefore 

may benefit from the transaction. Due to 

the unique nature of 1940 Act Securities 

as well as Rule 17a–8 9 (Mergers of 

affiliated companies) under the 1940 

Act (‘‘Rule 17a–8’’), the Exchange 

believes that these concerns are limited 

with respect to the holders of such 

securities. Therefore, the Exchange 

believes it is appropriate to exempt 

issuers of 1940 Act Securities from 

having to obtain shareholder approval 

under Exchange rules which can be both 

time consuming and expensive. 

The Exchange believes that the 

potential economic dilution concerns 

sometimes associated with a large share 

issuance are unlikely to be present 

when an issuer of a 1940 Act Security 

issues shares in connection with the 

acquisition of the stock or assets of an 

affiliated company. As described above, 

the proposed exemption will only apply 

to issuers of derivative and special 

purpose securities organized under the 

1940 Act.10 Rule 17a–8 exempts such 

issuers from prohibitions under the 

1940 Act on certain transactions with 

affiliated persons, provided that, in 

connection with the merger with an 

affiliated investment company, the 

board of directors, including a majority 

of the directors that are not interested 

persons, affirmatively determine that (i) 

participation in the merger is in the best 

interest of their respective investment 

company, and (ii) the interests of their 

shareholders will not be diluted as a 

result of the transaction.11 Because the 

board of directors must make an 

affirmative determination that the 

merger is not dilutive to existing 

shareholders, the shares issued by the 

acquiring investment company are 

issued at a price equal to the fund’s net 

asset value.12 While the Exchange notes 

that the shares are issued at a fund’s net 

asset value when the fund is registered, 

the requirements of Rule 17a–8 also 

protect against dilution when the fund 

to be acquired is unregistered. 

Specifically, Rule 17a–8(a)(2)(iii) 

requires that where a fund is acquiring 

Federal Register / Vol. 85, No. 245 / Monday, December 21, 2020 / Notices 83123 

13See Investment Company Act Release No. 

25259 at Section II(A)(2)(a): ‘‘Should the 

outstanding voting securities of the fund that will 

survive the merger also be required to approve the 

merger?’’ 

14 15 U.S.C. 78f(b). 

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

the assets of an unregistered fund, the 

board have procedures in place for the 

valuation of assets. Such procedures 

must include procedures that provide 

for a report to be prepared by an 

independent evaluator to provide a 

valuation for assets to be acquired. 

The Exchange believes that the same 

provisions of Rule 17a–8 that protect 

against economic dilution also provide 

safeguards for existing shareholders 

when the transaction involves a 

director, officer, or substantial 

shareholder of the listed company that 

has a significant interest in the company 

or assets to be acquired or the 

consideration to be paid and therefore 

may benefit from the transaction. 

Because the board must make an 

affirmative decision that the transaction 

is in the best interest of its shareholders 

and that the transaction will not result 

in economic dilution for existing 

shareholders, there is reduced concern 

that existing shareholders will be 

disenfranchised as a result of the 

Exchange’s proposed exemption. 

Under Rule 17a–8 shareholders of 

funds being acquired by an affiliated 

company have the opportunity to vote 

on the proposed merger unless certain 

conditions are met. However, Rule 17a– 

8 does not require the acquiring fund 

(i.e., the fund issuing shares in the 

merger) to obtain the approval of its 

shareholders. When the Securities and 

Exchange Commission (the 

‘‘Commission’’) proposed amendments 

to Rule 17a–8, it specifically sought 

comment on whether the outstanding 

voting securities of the fund that will 

survive the merger should also be 

required to approve the merger.13

Importantly, the Commission ultimately 

did not include a requirement of 

approval of shareholders of an acquiring 

fund in its final rule. 

Given that the Commission’s rules do 

not require an issuer of 1940 Act 

Securities to obtain shareholder 

approval in the context of a merger of 

affiliated companies, the Exchange 

believes it is appropriate to exempt such 

issuers of 1940 Act Securities from 

having to comply with NYSE Arca Rule 

5.3–E(d)(9). 

As described above, the Exchange 

only proposes to exempt issuers of 1940 

Act Securities from having to comply 

with NYSE Arca Rule 5.3–E(d)(9) if they 

are issuing shares to acquire the stock or 

assets of an affiliated company. 

Notwithstanding the proposed 

exemption, the Exchange notes that 

other provisions of Exchange rules or 

the 1940 Act may require shareholder 

approval and will still apply. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Exchange Act,14 in 

general, and furthers the objectives of 

Section 6(b)(5) of the Exchange Act,15 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 and is not designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange believes that the 

proposed amendment is consistent with 

the protection of investors, as the 

unique nature of 1940 Act Securities, as 

well as protections afforded by Rule 

17a–8, means that (i) there is little risk 

of economic dilution to existing 

shareholders as a result of an issuance 

of shares by an issuer of 1940 Act 

Securities in connection with the 

acquisition of the stock or assets of an 

affiliated company, and (ii) existing 

shareholders are unlikely to be 

disenfranchised as a result of a Rule 

17a–8-compliant transaction that 

involves a director, officer, or 

substantial shareholder of the listed 

company that has a significant interest 

in the company or assets to be acquired 

or the consideration to be paid. 

The Exchange further believes its 

proposal is consistent with the 

protection of investors because its 

proposal is limited to issuers of 

derivative and special purpose 

securities that are organized under the 

1940 Act. In the case of a merger of 

affiliated investment companies, the 

board of directors of each investment 

company, including a majority of the 

directors that are not interested persons 

of the respective investment company, 

must affirmatively determine that (i) 

participation in the merger is in the best 

interest of their respective investment 

company, and (ii) the interests of their 

shareholders will not be diluted as a 

result of the transaction. Because the 

interests of shareholders in such a 

transaction cannot be diluted, shares 

issues by one investment company to 

acquire the stock or assets of an 

affiliated investment company are 

issued at a price equal to the acquiring 

fund’s net asset value. Because of the 

safeguards embedded in Rule 17a–8, as 

described above, the Exchange also 

believes that there are reduced concerns 

about economic dilution when the 

transaction involves a merger with an 

affiliate unregistered fund. 

The Exchange believes that the same 

provisions of Rule 17a–8 that protect 

against economic dilution also provide 

safeguards for existing shareholders 

when the transaction involves a 

director, officer, or substantial 

shareholder of the listed company that 

has a significant interest in the company 

or assets to be acquired or the 

consideration to be paid and therefore 

may benefit from the transaction. 

Because the board must make an 

affirmative decision that the transaction 

is in the best interest of its shareholders 

and that the transaction will not result 

in economic dilution for existing 

shareholders, the is reduced concern 

that existing shareholders will be 

disenfranchised as a result of the 

Exchange’s proposed exemption. 

Rule 17a–8 proscribes when 

shareholder approval is required in the 

context of a merger of affiliated 

companies. Although shareholders of 

the company being acquired have a right 

to vote on the merger under certain 

circumstances, Rule 17a–8 does not 

require the shareholders of the acquiring 

company to approve the transaction. 

Accordingly, the Exchange believes it is 

appropriate to exempt issuers of 1940 

Act Securities from the requirements of 

NYSE Arca Rule 5.3–E(d)(9) in this 

same limited circumstance. 

Notwithstanding the proposed 

exemption described above, the 

Exchange notes that other provisions of 

Exchange rules or the 1940 Act may 

require shareholder approval and will 

still apply. 

The Exchange believes it is not 

unfairly discriminatory to offer the 

exemption only to issuers of 1940 Act 

Securities completing a merger with an 

affiliated company, as opposed to all 

issuers of derivative and special 

purpose securities, because only 1940 

Act Securities are subject to the 

requirements of the 1940 Act which 

offer the protections against dilution 

and self-dealing described herein. 

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 amendment will not impose 

83124 Federal Register / Vol. 85, No. 245 / Monday, December 21, 2020 / Notices 

16 15 U.S.C. 78s(b)(2)(B). 

17 Id. 

18 15 U.S.C. 78f(b)(5). 

19See supra note 6. 

20Rule 700(b)(3), Commission Rules of Practice, 

17 CFR 201.700(b)(3). 

21See id. 

22See id. 

23 15 U.S.C. 78s(b)(2)(B). 

24Section 19(b)(2) of the Exchange Act, as 

amended by the Securities Act Amendments of 

1975, Pub. L. 94–29 (June 4, 1975), grants the 

Commission flexibility to determine what type of 

proceeding—either oral or notice and opportunity 

for written comments—is appropriate for 

consideration of a particular proposal by a selfregulatory organization. See Securities Act 

Amendments of 1975, Senate Comm. on Banking, 

Housing & Urban Affairs, S. Rep. No. 75, 94th 

Cong., 1st Sess. 30 (1975). 

25See supra note 6. 

any burden on competition, as they 

simply propose to offer 1940 Act 

Securities a limited exemption for the 

Exchange’s shareholder approval rule in 

a specific circumstance where the 

Exchange believes there is a low risk of 

dilution to existing shareholders. 

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. Proceedings To Determine Whether 

To Approve or Disapprove SR– 

NYSEArca–2020–54, as Modified by 

Amendment No. 1, and Grounds for 

Disapproval Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Exchange Act 16 to 

determine whether the proposed rule 

change, as modified by Amendment No. 

1, should be approved or disapproved. 

Institution of such proceedings is 

appropriate at this time in view of the 

legal and policy issues raised by the 

proposed rule change. Institution of 

proceedings does not indicate that the 

Commission has reached any 

conclusions with respect to any of the 

issues involved. Rather, as described 

below, the Commission seeks and 

encourages interested persons to 

provide comments on the proposed rule 

change to inform the Commission’s 

analysis of whether to approve or 

disapprove the proposal. 

Pursuant to Section 19(b)(2)(B) of the 

Exchange Act,17 the Commission is 

providing notice of the grounds for 

disapproval under consideration. The 

Commission is instituting proceedings 

to allow for additional analysis of the 

proposed rule change’s consistency with 

the Exchange Act, and, in particular, 

with Section 6(b)(5) of the Exchange 

Act, 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.18

As discussed above, the Exchange is 

proposing to exempt issuers of 

registered investment companies that 

list certain categories of derivative and 

special purpose securities, including 

ETFs, from the requirement to obtain 

shareholder approval prior to 

substantial issuances of securities in 

connection with the acquisition of stock 

or assets of an affiliated company. The 

Exchange conditions its proposed 

exemption on, among other things, the 

transaction complying with Rule 17a–8 

under the Investment Company Act of 

1940, which requires that the board of 

directors of each company participating 

in such a merger determine that 

participation in the merger is in the best 

interests of the company and that the 

interests of the company’s shareholders 

will not be diluted as a result of the 

merger. In its Original Proposal, 

however, the Exchange erroneously 

described Rule 17a–8 as exempting an 

acquiring company from its shareholder 

approval requirements subject to certain 

conditions, when in fact that provision 

only applies to the non-surviving 

acquired company, and the Exchange 

justified its proposal in part on that 

misunderstanding. On December 1, 

2020, the Exchange filed Amendment 

No. 1 that replaced and superseded its 

Original Proposal, and attempted to 

correct the erroneous description of 

Rule 17a–8.19 The Exchange also made 

related changes to its proposed rule text 

and justification. Given the filing of this 

recent amendment, the Commission is 

seeking additional public comment on 

the proposed rule change in order to 

determine whether it is consistent with 

the requirements of Section 6(b)(5) of 

the Act. 

The Commission notes that, under the 

Commission’s Rules of Practice, the 

‘‘burden to demonstrate that a proposed 

rule change is consistent with the 

Exchange Act and the rules and 

regulations thereunder . . . is on the 

self-regulatory organization [‘SRO’] that 

proposed the rule change.’’ 20 The 

description of a proposed rule change, 

its purpose and operation, its effect, and 

a legal analysis of its consistency with 

applicable requirements must all be 

sufficiently detailed and specific to 

support an affirmative Commission 

finding,21 and any failure of an SRO to 

provide this information may result in 

the Commission not having sufficient 

basis to make an affirmative finding that 

a proposed rule change is consistent 

with the Exchange Act and the 

applicable rule and regulations.22

For these reasons, the Commission 

believes it is appropriate to institute 

proceedings pursuant to Section 

19(b)(2)(B) of the Exchange Act 23 to 

determine whether the proposal should 

be approved or disapproved. 

IV. Procedure: Request for Written 

Comments 

The Commission requests that 

interested persons provide written 

submissions of their views, data, and 

arguments with respect to the issues 

identified above, as well as any other 

concerns they may have with the 

proposal. In particular, the Commission 

invites the written views of interested 

persons concerning whether the 

proposed rule change, as modified by 

Amendment No. 1, is consistent with 

Section 6(b)(5) or any other provision of 

the Exchange Act, or the rules and 

regulations thereunder. Although there 

do not appear to be any issues relevant 

to approval or disapproval that would 

be facilitated by an oral presentation of 

views, data, and arguments, the 

Commission will consider, pursuant to 

Rule 19b–4, any request for an 

opportunity to make an oral 

presentation.24

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposed rule change, as modified by 

Amendment No. 1, should be approved 

or disapproved by January 11, 2021. 

Any person who wishes to file a rebuttal 

to any other person’s submission must 

file that rebuttal by January 25, 2021. 

The Commission asks that 

commenters address the sufficiency of 

the Exchange’s statements in support of 

the proposal, which are set forth in 

Amendment No. 1,25 in addition to any 

other comments they may wish to 

submit about the proposed rule change. 

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–2020–54 on the subject line. 

Federal Register / Vol. 85, No. 245 / Monday, December 21, 2020 / Notices 83125 

26 17 CFR 200.30–3(a)(12) and 17 CFR 200.30– 

3(a)(57). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4All references to ETP Holders in connection 

with this proposed fee change include Market 

Makers. 

5See Securities Exchange Act Release No. 89607 

(August 18, 2020), 85 FR 52179 (August 24, 2020) 

(SR–NYSEArca–2020–75). 

6See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(File No. S7–10–04) (Final Rule) (‘‘Regulation 

NMS’’). 

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–2020–54. 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–2020–54 and 

should be submitted on or before 

January 11, 2021. Rebuttal comments 

should be submitted by January 25, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28008 Filed 12–18–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting; Cancellation 

FEDERAL REGISTER CITATION OF PREVIOUS

ANNOUNCEMENT: 85 FR 81258, December 

15, 2020. 

PREVIOUSLY ANNOUNCED TIME AND DATE OF

THE MEETING: Thursday, December 17, 

2020 at 3:00 p.m. 

CHANGES IN THE MEETING: The Closed 

Meeting scheduled for Thursday, 

December 17, 2020 at 3:00 p.m., has 

been cancelled. 

CONTACT PERSON FOR MORE INFORMATION: 

For further information; please contact 

Vanessa A. Countryman from the Office 

of the Secretary at (202) 551–5400. 

Dated: December 17, 2020. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2020–28243 Filed 12–17–20; 4:15 pm] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90668; File No. SR– 

NYSEARCA–2020–107] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the NYSE Arca 

Equities Fees and Charges 

December 15, 2020. 

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 

3, 2020, NYSE Arca, Inc. (‘‘NYSE Arca’’ 

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 self-regulatory 

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 the 

NYSE Arca Equities Fees and Charges 

(‘‘Fee Schedule’’) to adjust the credits 

applicable to a step up tier for ETP 

Holders adding liquidity in Round Lots 

and Odd Lots in Tapes A, B and C 

securities with a per share price below 

$1.00. The Exchange proposes to 

implement the fee changes effective 

December 3, 2020. 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 the 

Fee Schedule to adjust the credits 

applicable to a step up tier for ETP 

Holders 4 adding liquidity in Round 

Lots and Odd Lots in Tapes A, B and C 

securities with a per share price below 

$1.00. 

The proposed changes are intended to 

address an inadvertent mistake 

regarding the level of credits applicable 

to the step up tier adopted by the 

Exchange in August 2020.5

The Exchange proposes to implement 

the fee changes effective December 3, 

2020. 

Background 

The Exchange operates in a highly 

competitive market. The Commission 

has repeatedly expressed its preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, the 

Commission highlighted the importance 

of market forces in determining prices 

and SRO revenues and, also, recognized 

that current regulation of the market 

system ‘‘has been remarkably successful 

in promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 6

While Regulation NMS has enhanced 

competition, it has also fostered a 

‘‘fragmented’’ market structure where 

trading in a single stock can occur 

across multiple trading centers. When