148 Federal Register / Vol. 86, No. 1 / Monday, January 4, 2021 / Notices 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Nasdaq Marketplace Rule 5635 and NYSE 

American Company Guide Sections 712 and 713. 

5See Securities Exchange Act Release No. 34– 

88572 (April 6, 2020); 85 FR 20323 (April 10, 2020) 

(SR–NYSE–2020–30). (waiving certain requirements 

of Section 312.03 through June 30, 2020). See also 

Securities Exchange Act Release No. 89219 (July 2, 

2020); 85 FR 41640 (July 10, 2020) (SR–NYSE– 

2020–58) (extending the waiver through September 

30, 2020). See also Securities Exchange Act Release 

No. 90020 (September 28, 2020); 85 FR 62357 

(October 2, 2020) (SR–NYSE–2020–79) (extending 

the waiver through December 31, 2020). 

6For purposes of Section 312.03, Section 

312.04(e) provides that: ‘‘[a]n interest consisting of 

less than either five percent of the number of shares 

of common stock or five percent of the voting power 

outstanding of a company or entity shall not be 

considered a substantial interest or cause the holder 

of such an interest to be regarded as a substantial 

security holder.’’ 

are available at www.prc.gov, Docket 

Nos. MC2021–55 and CP2021–57. 

Joshua J. Hofer, 

Attorney, Federal Compliance. 

[FR Doc. 2020–29035 Filed 12–31–20; 8:45 am] 

BILLING CODE 7710–12–P 

POSTAL SERVICE 

International Product Change— 

International Priority Airmail, 

International Surface Air Lift, 

Commercial ePacket, Priority Mail 

Express International, Priority Mail 

International & First-Class Package 

International Service Agreement: 

Postal ServiceTM

ACTION: Notice. 

SUMMARY: The Postal Service gives 

notice of filing a request with the Postal 

Regulatory Commission to add an 

International Priority Airmail, 

International Surface Air Lift, 

Commercial ePacket, Priority Mail 

Express International, Priority Mail 

International & First-Class Package 

International Service contract to the list 

of Negotiated Service Agreements in the 

Competitive Product List in the Mail 

Classification Schedule. 

DATES: Date of notice: January 4, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Christopher C. Meyerson, (202) 268– 

7820. 

SUPPLEMENTARY INFORMATION: The 

United States Postal Service® hereby 

gives notice that, pursuant to 39 U.S.C. 

3642 and 3632(b)(3), on December 28, 

2020, it filed with the Postal Regulatory 

Commission a USPS Request to Add 

International Priority Airmail, 

International Surface Air Lift, 

Commercial ePacket, Priority Mail 

Express International, Priority Mail 

International & First-Class Package 

International Service Contract 2 to 

Competitive Product List. Documents 

are available at www.prc.gov, Docket 

Nos. MC2021–54 and CP2021–56. 

Joshua J. Hofer, 

Attorney, Federal Compliance. 

[FR Doc. 2020–29032 Filed 12–31–20; 8:45 am] 

BILLING CODE 7710–12–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90803; File No. SR–NYSE– 

2020–85] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change To 

Amend the NYSE Listed Company 

Manual To Revise the Shareholder 

Approval Requirements in Sections 

312.03 and 312.04 and the 

Requirements for Related Party 

Transactions in Section 314.00 

December 28, 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 

16, 2020, 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 

Sections 312.03, 312.04 and 314.00 of 

the NYSE Listed Company Manual 

(‘‘Manual’’). 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 

Paragraphs (b) and (c) of Sections 

312.03 of the Manual require listed 

companies to obtain shareholder 

approval prior to certain kinds of equity 

issuances. The Exchange believes that 

these requirements can make it 

unnecessarily difficult for listed 

companies to raise necessary capital in 

private placement transactions that are 

in the interests of the company and its 

shareholders. Consequently, the 

Exchange proposes to modify these 

provisions, bringing its shareholder 

approval requirements into closer 

alignment with those of Nasdaq and 

NYSE American,4 by providing listed 

companies with flexibility that exists 

under the rules of those other listing 

markets. The Exchange has waived 

certain requirements under Section 

312.03 to provide listed companies with 

greater flexibility to raise capital during 

the COVID–19 crisis.5 Among other 

things, the current proposal includes 

amendments that are identical in effect 

to the current waiver. The Exchange has 

observed that a significant number of 

companies have benefited from the 

flexibility provided by the waiver and 

has not observed any significant 

problems associated with companies’ 

completion of transactions permitted by 

the waiver. 

Proposed Amendments to Section 

312.03(b) 

Subject to an exception for early stage 

companies set forth therein, Section 

312.03(b) of the Manual requires 

shareholder approval of certain 

issuances of common stock, or securities 

convertible into or exercisable for 

common stock, to: 

• A director, officer or substantial 

security holder 6 of the company (each 

Federal Register / Vol. 86, No. 1 / Monday, January 4, 2021 / Notices 149 

7Section 312.04(i) defines the ‘‘Minimum Price’’ 

as follows: ‘‘Minimum Price’’ means a price that is 

the lower of: (i) The Official Closing Price 

immediately preceding the signing of the binding 

agreement; or (ii) the average Official Closing Price 

for the five trading days immediately preceding the 

signing of the binding agreement. 

Section 312.04(j) defines ‘‘Official Closing Price’’ 

as follows: ‘‘Official Closing Price’’ of the issuer’s 

common stock means the official closing price on 

the Exchange as reported to the Consolidated Tape 

immediately preceding the signing of a binding 

agreement to issue the securities. For example, if 

the transaction is signed after the close of the 

regular session at 4:00 p.m. Eastern Standard Time 

on a Tuesday, then Tuesday’s official closing price 

is used. If the transaction is signed at any time 

between the close of the regular session on Monday 

and the close of the regular session on Tuesday, 

then Monday’s official closing price is used. 

a ‘‘Related Party’’ for purposes of 

Section 312.03(b)); 

• a subsidiary, affiliate, or other 

closely related person of a Related Party; 

or 

• Any company or entity in which a 

Related Party has a substantial direct or 

indirect interest. 

This prior shareholder approval is 

required if the number of shares of 

common stock to be issued, or if the 

number of shares of common stock into 

which the securities may be convertible 

or exercisable, exceeds either 1% of the 

number of shares of common stock or 

1% of the voting power outstanding 

before the issuance. A limited exception 

to these shareholder approval 

requirements permits cash sales relating 

to no more than 5% of the number of 

shares of common stock or voting power 

outstanding that meet a Minimum Price 

test set forth in the rule (the ‘‘Minimum 

Price’’).7 However, this exception may 

only be used if the Related Party in 

question has Related Party status solely 

because it is a substantial security 

holder of the company. 

The Exchange proposes to amend 

Section 312.03(b) in several respects. 

• The Exchange proposes to modify 

the class of persons with respect to 

which an issuance of common stock 

would require a listed company to seek 

shareholder approval. Specifically, 

Section 312.03(b) as amended would 

require prior shareholder approval for 

issuances of common stock to directors, 

officers, and substantial securityholders 

(‘‘Related Party’’) and would no longer 

require such approval for issuances to 

such Related Parties’ subsidiaries, 

affiliates or other closely related persons 

or to entities in which a Related Party 

has a substantial interest (except where 

a Related Party has a 5% or greater 

interest in the counterparty, as 

described below). In making this 

change, the Exchange is harmonizing its 

approach to the regulation of issuances 

to related parties with that of Nasdaq 

and NYSE American, as both of those 

markets focus their shareholder 

approval requirements solely on the 

regulation of the Related Parties 

themselves and not on closely related 

persons of Related Parties. 

• As proposed to be amended, 

Section 312.03(b) would require 

shareholder approval of cash sales to 

Related Parties (as such term is defined 

in Section 312.03(b)) only if the price is 

less than the Minimum Price. 

Accordingly, Section 312.03(b) would 

no longer require shareholder approval 

of issuances in a cash sale that meet the 

Minimum Price requirement to a 

Related Party where the number of 

shares of common stock to be issued, or 

the number of shares of common stock 

into which the securities may be 

convertible or exercisable, exceeds 

either 5% of the number of shares of 

common stock or 5% of the voting 

power outstanding before the issuance. 

However, cash sales to Related Parties 

that meet the Minimum Price 

requirement would be subject to the 

same limitations as cash sales to all 

other investors under the proposed 

amended Section 312.03(c), as described 

below. In addition, cash sales relating to 

more than 1% of the issuer’s common 

stock or voting power prior to the 

issuance to a Related Party for prices 

below the Minimum Price will continue 

to be subject to shareholder approval 

under Section 312.03(b) (this 

requirement is not included in the 

Nasdaq or NYSE American rules). 

• The Exchange proposes to require 

shareholder approval of any transaction 

or series of related transactions in which 

any Related Party 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 and the 

present or potential issuance of common 

stock, or securities convertible into 

common stock, could result in an 

increase in outstanding common shares 

of 5% or more. This proposed provision 

is substantively identical to the only 

limitation placed specifically on 

issuances to related parties in the 

Nasdaq and NYSE American rules. The 

Exchange would also continue to 

require shareholder approval of any sale 

of securities by a listed company to a 

Related Party in a transaction, or series 

of transactions, whose proceeds will be 

used to fund an acquisition of stock or 

assets of another company where such 

Related Party has a direct or indirect 

interest in the company or assets to be 

acquired or in the consideration to be 

paid for such acquisition. 

• The Exchange proposes to delete 

from Section 312.03(b) two provisions 

that will no longer be relevant as they 

relate to transactions that benefit from 

exemptions from shareholder approval 

under current Section 312.03(b), but 

would be exempt from shareholder 

approval under the general application 

of Section 312.03(b) as proposed to be 

amended. These provisions relate to: (i) 

Cash sales meeting the Minimum Price 

test and relating to no more than 5% of 

the number of shares of common stock 

or 5% of the voting power outstanding 

before the issuance to a Related Party 

where the Related Party involved in the 

transaction is classified as such solely 

because such person is a substantial 

security holder; and (ii) the Early Stage 

Company exemption, to which the 

Exchange proposes to remove the 

reference from Section 312.04 as it will 

no longer be needed. For the same 

reason, the Exchange proposes to delete 

from Section 312.03(b) a sentence that 

provides that the Early Stage Company 

exemption is not applicable to a sale of 

securities by the listed company to any 

person subject to the provisions of 

Section 312.03(b) in a transaction, or 

series of transactions, whose proceeds 

will be used to fund an acquisition of 

stock or assets of another company 

where such person has a direct or 

indirect interest in the company or 

assets to be acquired or in the 

consideration to be paid for such 

acquisition. 

The Exchange notes that Section 

312.03(b) would continue to include 

text stating that any sale of stock to an 

employee, director or service provider is 

also subject to the equity compensation 

rules in Section 303A.08 of the Manual 

and stating that shareholder approval is 

required if any of the subparagraphs of 

Section 312.03 require such approval, 

notwithstanding that the transaction 

does not require approval under Section 

312.03(b) or one or more of the other 

subparagraphs. 

There would continue to be other 

significant protections for shareholders 

with respect to a company’s sales of 

securities. Firstly, Section 314.00 of the 

Manual in its proposed amended form 

will provide that transactions with 

related parties, such as those in which 

a director, officer or substantial 

securityholder has an interest, must be 

reviewed and approved by the 

company’s audit committee or another 

body of independent directors. 

Furthermore, there are other significant 

protections under other paragraphs of 

Section 312.03, including a requirement 

of shareholder approval for any sale for 

less than the Minimum Price relating to 

20% or more of the issuer’s outstanding 

150 Federal Register / Vol. 86, No. 1 / Monday, January 4, 2021 / Notices 

8While the proposed amended exemption would 

not limit the size of any transaction that meets the 

Minimum Price test, any such transaction giving 

rise to a change of control will be subject to 

shareholder approval under Section 312.03(d). 

9The Second paragraph of Section 314.00 will be 

retained in its entirety. It reads as follows: 

The Exchange will continue to review proxy 

statements and other SEC filings disclosing related 

party transactions and where such situations 

continue year after year, the Exchange will remind 

the listed company of its obligation, on a continuing 

basis, to evaluate each related party transaction and 

determine whether or not it should be permitted to 

continue. 

common stock or voting power prior to 

such issuance. This requirement means 

that any economically dilutive 

transaction would be subject to 

shareholder approval. In addition, any 

related party sale that gives rise to a 

change of control would be subject to 

shareholder approval under Section 

312.03(d). 

The Exchange believes that the 

continuation of the important 

limitations with respect to related party 

issuances as described above (including 

the review of such transactions under 

Section 314.00 and the continued 

application of the shareholder approval 

requirements with respect to equity 

compensation set forth in Section 

303A.08) would continue to provide 

shareholders of NYSE listed companies 

with protections in relation to issuances 

to related parties (including Related 

Parties as such term is defined in 

Section 312.03(b) In particular, the 

Exchange notes that the continued 

shareholder approval requirement for 

cash sales to Related Parties relating to 

more than 1% of the company’s 

outstanding common stock that do not 

meet the Minimum Price requirement is 

an important protection not provided by 

the Nasdaq or NYSE American rules. 

The proposed amendments would make 

the Exchange’s rules for cash sales to 

related parties substantively identical to 

those of Nasdaq and NYSE American for 

issuances that meet the Minimum Price 

test and the Exchange believes that the 

long experience of those other markets 

in applying those substantially identical 

rules provides evidence that they 

provide an appropriate level of investor 

protection. 

Proposed Amendments to Section 

312.03(c) 

Section 312.03(c) of the Manual 

requires shareholder approval of any 

transaction relating to 20% or more of 

the company’s outstanding common 

stock or 20% of the voting power 

outstanding before such issuance, but 

provides the following exceptions: (1) 

Any public offering for cash; (2) any 

bona fide private financing involving a 

cash sale of the company’s securities 

that comply with the Minimum Price 

requirement. As set forth in Section 

312.04(g), a ‘‘bona fide private 

financing’’ (‘‘Bona Fide Private 

Financing’’) refers to a sale in which 

either: 

• A registered broker-dealer 

purchases the securities from the issuer 

with a view to the private sale of such 

securities to one or more purchasers; or 

• the issuer sells the securities to 

multiple purchasers, and no one such 

purchaser, or group of related 

purchasers, acquires, or has the right to 

acquire upon exercise or conversion of 

the securities, more than 5% of the 

shares of the issuer’s common stock or 

more than five percent of the issuer’s 

voting power before the sale. 

The Exchange proposes to replace the 

reference to ‘‘bona fide private 

financing’’ in Section 312.03(c) with 

‘‘other financing (that is not a public 

offering for cash) in which the company 

is selling securities for cash.’’ This 

change would eliminate the 5% limit for 

any single purchaser participating in a 

transaction relying on the exemption.8

In addition, as any sale to a brokerdealer under the current Bona Fide 

Private Financing exception would also 

qualify for an exception to shareholder 

approval under the proposed amended 

exemption, there is no need to retain a 

separate provision for sales made to 

broker-dealers. The Exchange also 

proposes to amend Section 312.03(c) to 

provide that, if any of the proceeds of 

such a financing will be paid in an 

acquisition and the securities generating 

such proceeds when combined with any 

securities issued in connection with 

such acquisition exceed either 20% of 

the number of shares of common stock 

or 20% of the voting power outstanding 

before the issuance, then shareholder 

approval is required. Finally, as the 

Bona Fide Private Financing term will 

no longer be used in Section 312.03(c), 

the Exchange proposes to delete the 

definition of that term in Section 

312.04(g). 

The Exchange notes that the proposed 

amendments to Section 312.03(c) do not 

change the rule as it relates to issuances 

in non-cash transactions or in cash 

transactions for a price below the 

Minimum Price. Instead, in replacing 

the Bona Fide Private Financing 

exception with the revised exemption 

described in the immediately preceding 

paragraph, the proposed amendment 

would only remove a limitation in the 

Bona Fide Private Financing exception 

that limits the participation of any 

single investor in a Minimum Price cash 

sale of more than 5% of the shares or 

voting power. The Exchange believes 

that this change is consistent with the 

protection of investors because the 

Minimum Price requirement protects 

against a sale using the exception 

resulting in economic dilution. Further, 

the separately applicable requirements 

of Section 312.03(d) require that the 

shareholders approve any transaction 

that would result in a change of control. 

The proposed amendments would 

make the Exchange’s rules for cash sales 

of securities that meet the Minimum 

Price test substantively identical to 

those of Nasdaq and NYSE American 

and the Exchange believes that the long 

experience of those other markets in 

applying those substantially identical 

rules provides evidence that they 

provide an appropriate level of investor 

protection. 

Deletion of Section 312.03T 

Section 312.03T was adopted to 

provide temporary relief from certain of 

the requirements of Section 312.03 

during the COVID–19 pandemic. 

Section 312.03T was applicable by its 

terms through June 30, 2020. As that 

date has passed, the Exchange now 

proposes to delete Section 312.03T in its 

entirety, as it is no longer applicable. 

Amendment to Section 314.00 

In its current form, Section 314.00 

provides that related party transactions 

normally include transactions between 

officers, directors, and principal 

shareholders and the company and that 

each related party transaction is to be 

reviewed and evaluated by an 

appropriate group within the listed 

company involved. The current rule 

further states that, while the Exchange 

does not specify who should review 

related party transactions, the Exchange 

believes that the Audit Committee or 

another comparable body might be 

considered as an appropriate forum for 

this task. 

The Exchange proposes to amend the 

first paragraph of Section 314.00.9 The 

proposed new rule text strengthens the 

rule in two important respects: 

• For purposes of Section 314.00, the 

term ‘‘related party transaction’’ refers 

to transactions required to be disclosed 

pursuant to Item 404 of Regulation S– 

K under the Securities Exchange Act. In 

the case of foreign private issuers, the 

term ‘‘related party transactions’’ refers 

to transactions required to be disclosed 

pursuant to Form 20–F, Item 7.B. 

• Related party transactions under the 

rule as amended must be reviewed by 

either the company’s audit committee or 

another independent body of the board 

of directors and the audit committee or 

such other body may prohibit such a 

transaction if it determines it to be 

Federal Register / Vol. 86, No. 1 / Monday, January 4, 2021 / Notices 151 

10The Exchange proposes to delete from Section 

314.00 a sentence that reads as follows: ‘‘Following 

the review, the company should determine whether 

or not a particular relationship serves the best 

interests of the company and its shareholders and 

whether the relationship should be continued or 

eliminated.’’ This sentence is no longer necessary, 

as the proposed amended rule gives the audit 

committee or other independent body of the board 

the authority to prohibit any related party 

transaction it reviews. 

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

12 15 U.S.C. 78f(b)(5). 

inconsistent with the interests of the 

company.10

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the 

Act,11 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,12

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 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 the public interest 

and the interests of investors, and 

because it is not designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange believes that the 

proposed amendments to Section 

312.03(b) are designed to protect the 

public interest and the interests of 

investors because there would continue 

to be other significant protections for 

shareholders with respect to sales of 

securities to related parties. Firstly, 

Section 314.00 of the Manual, as 

proposed to be amended, will provide 

that related party transactions, such as 

those in which a director, officer or 

substantial securityholder has an 

interest, are required to be reviewed and 

approved by the issuer’s audit 

committee or another group of 

independent directors. Furthermore, 

there are other significant protections 

under other paragraphs of Section 

312.03, including any sale relating to 

20% or more of the issuer’s common 

stock or voting power immediately 

preceding this issuance for less than the 

Minimum Price. This requirement 

means that any economically dilutive 

transaction would be subject to 

shareholder approval. The Exchange 

notes that Section 312.03(c) applies to 

any transaction or series of related 

transactions, which provides 

shareholders with further protection by 

ensuring that a company cannot avoid 

the shareholder approval requirement 

by separating an overall transaction into 

smaller separate transactions that would 

not individually require shareholder 

approval. In addition, any related party 

sale that gives rise to a change of control 

will be subject to shareholder approval 

under Section 312.03(d). The Exchange 

believes that the continuation of the 

important limitations with respect to 

related party issuances as described 

above (including the review of such 

transactions under Section 314.00 and 

the continued application of the 

shareholder approval requirements with 

respect to equity compensation set forth 

in Section 303A.08) would continue to 

provide shareholders of NYSE listed 

companies with protections in relation 

to issuances to related parties (including 

Related Parties as such term is defined 

in Section 312.03(b)). In particular, the 

Exchange notes that the continued 

shareholder approval requirement for 

cash sales to Related Parties that relate 

to more than 1% of the company’s 

outstanding common stock or voting 

power and do not meet the Minimum 

Price requirement is an important 

protection not provided by the Nasdaq 

or NYSE American rules. The proposed 

amendments would make the 

Exchange’s rules for cash sales to related 

parties substantively identical to those 

of Nasdaq and NYSE American for 

issuances that meet the Minimum Price 

test and the Exchange believes that the 

long experience of those other markets 

in applying those substantially identical 

rules provides evidence that they 

provide an appropriate level of investor 

protection. 

The Exchange believes that the 

proposed amendments to Section 

312.03(c) are also designed to protect 

the public interest and the interests of 

investors. The Exchange notes that the 

proposed amendments to Section 

312.03(c) do not change the rule as it 

relates to issuances in non-cash 

transactions or to cash transactions for 

a price below the Minimum Price. The 

sole purpose of the amendment is to 

remove an arbitrary limitation in the 

Bona Fide Private Financing exception 

that limits the participation of any 

single investor in a Minimum Price cash 

sale to 5%. The Exchange believes that 

this change is consistent with the 

protection of investors because the 

Minimum Price requirement provides 

protection against economic dilution, 

while the separately applicable 

requirements of Section 312.03(d) 

provide that shareholders will have a 

vote on any transaction that would 

result in a change of control. The 

proposed amendments would also make 

the Exchange’s rules for cash sales of 

securities that meet the Minimum Price 

test substantively identical to those of 

Nasdaq and NYSE American and the 

Exchange believes that the long 

experience of those other markets in 

applying those substantially identical 

rules provides evidence that they 

provide an appropriate level of investor 

protection. 

The Exchange believes that the 

proposed amendments to Section 314.00 

are also designed to protect the public 

interest and the interests of investors. 

By proposing to use the definition of a 

related party transaction in SEC 

disclosure rules, the Exchange is 

providing greater clarity to both issuers 

and investors as to when the rule must 

be applied. By proposing to require that 

transactions subject to the rule must be 

reviewed and approved by either the 

audit committee or another body of 

independent directors, the Exchange is 

making the requirement more explicit 

and preventing any listed issuer from 

giving that role to any group that is not 

entirely made up of independent 

directors. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change would impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed rule changes will conform the 

shareholder approval requirements of 

the NYSE to those of Nasdaq and NYSE 

American in certain respects and 

therefore enhances competition among 

listing exchanges. As all listed 

companies will be subject to the same 

shareholder approval and related party 

transaction approval requirements, the 

proposal does not impose any burden 

on competition among listed issuers. 

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 

152 Federal Register / Vol. 86, No. 1 / Monday, January 4, 2021 / Notices 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Unless otherwise specified, capitalized terms 

used in this rule filing are defined as set forth in 

the Compliance Rule. 

4See Securities Exchange Act Release No. 90223 

(October 19, 2020), 85 FR 67576 (October 23, 2020) 

(‘‘Allocation Exemptive Order’’). 

5Section 1.1 of the CAT NMS Plan defines an 

‘‘Allocation Report’’ as ‘‘a report made to the 

Central Repository by an Industry Member that 

identifies the Firm Designated ID for any account(s), 

including subaccount(s), to which executed shares 

are allocated and provides the security that has 

been allocated, the identifier of the firm reporting 

the allocation, the price per share of shares 

allocated, the side of shares allocated, the number 

of shares allocated to each account, and the time of 

the allocation; provided for the avoidance of doubt, 

any such Allocation Report shall not be required to 

be linked to particular orders or executions.’’ 

(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–2020–85 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–2020–85. 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–2020–85 and should 

be submitted on or before January 25, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–29020 Filed 12–31–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90808; File No. SR–MEMX– 

2020–16] 

Self-Regulatory Organizations; MEMX 

LLC; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend Rules 4.5 and 4.7 

Regarding the National Market System 

Plan Governing the Consolidated Audit 

Trail 

December 28, 2020. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on December 

18, 2020, MEMX LLC (‘‘MEMX’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. 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 is filing with the 

Commission a proposed rule change to 

amend Exchange Rules 4.5 and 4.7, each 

a part of the Exchange’s compliance rule 

(‘‘Compliance Rule’’) regarding the 

National Market System Plan Governing 

the Consolidated Audit Trail (the ‘‘CAT 

NMS Plan’’ or ‘‘Plan’’),3 to be consistent 

with a conditional exemption granted 

by the Commission from certain 

allocation reporting requirements set 

forth in Sections 6.4(d)(ii)(A)(1) and (2) 

of the CAT NMS Plan (‘‘Allocation 

Exemption’’).4 The text of the proposed 

rule change is provided in Exhibit 5. 

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 

Exchange 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. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this proposed rule 

change is to amend Exchange Rules 4.5 

and 4.7, each a part of the Exchange’s 

Compliance Rule, to be consistent with 

the Allocation Exemption. The 

Commission granted the relief 

conditioned upon the Participants’ 

adoption of Compliance Rules that 

implement the alternative approach to 

reporting allocations to the Central 

Repository described in the Allocation 

Exemption (referred to as the 

‘‘Allocation Alternative’’). 

(1) Request for Exemptive Relief 

Pursuant to Section 6.4(d)(ii)(A) of the 

CAT NMS Plan, each Participant must, 

through its Compliance Rule, require its 

Industry Members to record and report 

to the Central Repository, if the order is 

executed, in whole or in part: (1) An 

Allocation Report; 5 (2) the SROAssigned Market Participant Identifier 

of the clearing broker or prime broker, 

if applicable; and the (3) CAT-Order-ID 

of any contra-side order(s). Accordingly, 

the Exchange and the other Participants 

implemented Compliance Rules that 

require their Industry Members that are 

executing brokers to submit to the 

Central Repository, among other things, 

Allocation Reports and the SROAssigned Market Participant Identifier