[Federal Register Volume 86, Number 25 (Tuesday, February 9, 2021)]
[Notices]
[Pages 8812-8814]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-02592]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91054; File No. SR-LTSE-2020-22]


Self-Regulatory Organizations; Long-Term Stock Exchange, Inc.; 
Notice of Filing of Amendment No. 1 and Order Granting Accelerated 
Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To 
Adopt Rule 14.602 Related to Promotional Services and Listing 
Ceremonies for Listed Companies

February 3, 2021.

I. Introduction

    On December 10, 2020, Long-Term Stock Exchange, Inc. (``LTSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to adopt Rule 14.602 to provide for promotional 
services and listing ceremonies that will be offered by the Exchange in 
connection with a Company's approval for listing on the Exchange. The 
proposed rule change was published for comment in the Federal Register 
on December 28, 2020.\3\ On January 22, 2021, the Exchange filed 
Amendment No. 1 to the proposed rule change, which replaced and 
superseded the proposed rule change in its entirety.\4\ The Commission 
has received no comments on the proposed rule change. This order 
provides notice of the filing of Amendment No. 1 to the proposed rule 
change, and grants approval to the proposed rule change, as modified by 
Amendment No. 1, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 90731 (December 18, 
2020), 85 FR 84449 (December 28, 2020) (``Notice'').
    \4\ In Amendment No. 1 to the proposed rule change, the Exchange 
clarified that: (i) The proposed promotional services and listing 
ceremonies will be offered to Companies on or around the time of 
listing, in connection with listing on the Exchange; and (ii) that 
the Exchange will offer comparable promotional services and listing 
ceremonies of comparable value to each listed Company. Amendment No. 
1 is available on the Commission's website at https://www.sec.gov/comments/sr-ltse-2020-22/srltse202022-8274519-228078.pdf.
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II. Description of the Proposed Rule Change, as Modified by Amendment 
No. 1

    The Exchange proposes to adopt Rule 14.602 to provide for 
promotional services and listing ceremonies that will be offered by the 
Exchange in connection with a Company's \5\ approval for listing on the 
Exchange.\6\
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    \5\ ``Company'' means the issuer of a security listed or 
applying to list on the Exchange. For purposes of Chapter 14 of the 
LTSE Rules, the term ``Company'' includes an issuer that is not 
incorporated, such as, for example, a limited partnership. See LTSE 
Rule 14.002(a)(5).
    \6\ See Notice, supra note 3, at 84449.
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    Proposed LTSE Rule 14.602 states that in connection with a 
Company's approval for listing, the Exchange offers promotional 
services (including press releases, articles, videos, and podcasts) and 
invites the Company to participate in listing ceremonies.\7\ According 
to the Exchange, the promotional services would be tailored to meet the 
needs of the Company, and would allow the Company access to media 
services that would support the creation of press releases, articles, 
videos, and podcasts featuring the Company and its personnel.\8\ These 
promotional services also would include assistance with distributing 
such content on traditional and social media platforms, including 
websites operated by the Exchange.\9\ The Exchange states that a full 
suite of promotional services will be offered to each Company approved 
to list on the Exchange, and that some Companies may choose to avail 
themselves of all promotional services, whereas others may choose only 
a subset of services or none.\10\
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    \7\ See id.
    \8\ See id.
    \9\ See id.
    \10\ See id.
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    The Exchange further proposes to establish a listing ceremony to 
commemorate a Company becoming listed on the Exchange.\11\ While LTSE 
is only accepting dual-listings at the present time, the Exchange 
asserts that the decision of a Company to list on the Exchange and 
adopt ``Long-Term Policies'' consistent with LTSE Rule 14.425 is a 
significant event for which a listing ceremony would be 
appropriate.\12\ According to the Exchange, the listing ceremony would 
be comparable to ``ringing a bell'' by gathering Company and Exchange 
personnel to celebrate that the Company has listed on the Exchange.\13\ 
The Exchange states that because it does not have a trading floor or a 
market site, it will work with each Company to design and plan a 
listing ceremony that reflects the Company's values and mission, and 
that the ceremony may be conducted in person or remotely.\14\
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    \11\ See id.
    \12\ See id.
    \13\ See id. at 84450.
    \14\ See id. at 84449-50. In this regard, the Exchange states 
that the absence of a trading floor or dedicated market site allows 
the Exchange to be flexible in providing listing ceremonies that can 
be more inclusive in terms of the number of Company personnel who 
may attend and the location of the ceremony. See id. at 84450.
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    The Exchange anticipates that it will use an affiliate, LTSE 
Services, Inc. (``LTSE Services''), to, among other things, draft 
marketing content for review by the Exchange and the Company, produce 
and edit videos and podcasts, and coordinate listing ceremonies, 
whether done as in-person or remote events.\15\ LTSE maintains a 
commercial relationship with LTSE

[[Page 8813]]

Services to leverage the company's technological expertise to support 
the Exchange's software needs,\16\ and LTSE Services also provides 
communications and marketing services to the Exchange.\17\
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    \15\ See id. at 84450 n.6.
    \16\ See Securities Exchange Act Release No. 85828 (May 10, 
2019), 84 FR 21841, 21842 (May 15, 2019) (File No. 10-234) (In the 
Matter of the Application of Long Term Stock Exchange, Inc.; for 
Registration as a National Securities Exchange; Findings, Opinion, 
and Order of the Commission).
    \17\ See Notice, supra note 3, at 84450 n.6.
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    The Exchange states that its proposed provisions regarding listing 
ceremonies would be comparable to provisions in New York Stock Exchange 
LLC (``NYSE'') Listed Company Manual Section 106.03,\18\ though 
tailored to address the fact that a Company listing on LTSE may be a 
public company and therefore is already trading on the Exchange (as 
well as other national securities exchanges).\19\ Moreover, the 
Exchange asserts that its listing ceremonies would be more inclusive, 
as LTSE does not plan to limit listing ceremonies to a particular 
physical location or solely to a Company's directors and officers.\20\
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    \18\ See NYSE Listed Company Manual Section 106.03 (``The 
Exchange invites the company's directors and officers to participate 
in listing ceremonies on the first day of trading. . . . The 
Exchange has a public relations area which will coordinate the 
publicity for the event including picture taking on the trading 
floor.'').
    \19\ See Notice, supra note 3, at 84450.
    \20\ The Exchange states that it believes the Company should 
determine where such ceremonies should take place and who should 
participate in the ceremonies. See id.
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    In addition, the Exchange represents that if it expands the menu of 
promotional services offered, or elects to provide new products or 
services to listed Companies, the Exchange will incorporate such 
changes in a new proposed rule change.\21\
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    \21\ See id. at 84449 n.4
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III. Discussion and Commission Findings

    The Commission has carefully reviewed the proposed rule change, as 
modified by Amendment No. 1, and finds that it is consistent with the 
requirements of Section 6 of the Act.\22\ Specifically, the Commission 
finds that the proposal is consistent with Sections 6(b)(4) \23\ and 
6(b)(5) of the Act \24\ in particular, in that the proposed rule is 
designed to provide for the equitable allocation of reasonable dues, 
fees, and other charges among Exchange members, issuers, and other 
persons using the Exchange's facilities, and is not designed to permit 
unfair discrimination between customers, issuers, brokers, or dealers. 
Moreover, the Commission finds that the proposal is consistent with 
Section 6(b)(8) of the Act \25\ in that it does not impose any burden 
on competition not necessary or appropriate in furtherance of the 
purposes of the Act.
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    \22\ 15 U.S.C. 78f. In approving this proposed rule change, the 
Commission has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \23\ 15 U.S.C. 78f(b)(4).
    \24\ 15 U.S.C. 78f(b)(5).
    \25\ 15 U.S.C. 78f(b)(8).
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    The Exchange argues that it is fair and reasonable to offer 
promotional services and listing ceremonies to Companies on or around 
the time of listing, in connection with listing on the Exchange, given 
that LTSE expects to face competition from NYSE and the Nasdaq Stock 
Market LLC (``Nasdaq'') as a new entrant into the exchange listing 
market.\26\ The Exchange asserts that offering promotional services and 
listing ceremonies for Companies listing on the Exchange would allow 
the Exchange to more effectively attract Companies to list on LTSE.\27\ 
The Exchange contends that to the extent its listing program is 
successful, it will provide a competitive alternative that will thereby 
benefit companies and investors, and remove impediments to and perfect 
the mechanism of a free and open market and a national market system, 
consistent with the protection of investors and the public 
interest.\28\
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    \26\ See Notice, supra note 3, at 84450; Amendment No. 1, supra 
note 4, at 6. The Exchange maintains that the existing U.S. exchange 
listing market for operating companies is ``essentially a duopoly,'' 
with the vast majority of operating companies listed on U.S. 
securities exchanges listing on NYSE or Nasdaq. See Notice, supra 
note 3, at 84450.
    \27\ See id.
    \28\ See id.
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    The Exchange also argues that its proposal to offer promotional 
services and listing ceremonies for listed Companies is fair and not 
unfairly discriminatory because the promotional services and listing 
ceremonies will be offered to all listed Companies on the same terms 
and conditions without differentiation.\29\ The Exchange further states 
that it will offer comparable promotional services and listing 
ceremonies of comparable value to each listed Company.\30\ According to 
the Exchange, the scope of promotional services and listing ceremonies 
provided by the Exchange to each Company ultimately will depend on 
which services the Company selects, insofar as these are optional 
services for the Company.\31\
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    \29\ See id.
    \30\ See Amendment No. 1, supra note 4, at 7.
    \31\ See Notice, supra note 3, at 84450.
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    Finally, the Exchange argues that the proposed rule change, as 
modified by Amendment No. 1, will not result in any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act.\32\ The Exchange asserts that the proposal will 
enhance competition by facilitating LTSE's listing program, which will 
allow the Exchange to provide companies with another listing option, 
thereby promoting intermarket competition between exchanges by offering 
a new listing market to compete with NYSE and Nasdaq.\33\ The Exchange 
states that, as a dual listing venue, LTSE expects to face competition 
from existing exchanges because companies have a choice to list their 
securities solely on a primary listing venue.\34\ Consequently, the 
Exchange contends that the degree to which its promotional services and 
listing ceremonies could impose any burden on intermarket competition 
is extremely limited.\35\ In addition, the Exchange argues that the 
proposed rule change, as modified by Amendment No. 1, will not result 
in any burden on intramarket competition, either, since LTSE will offer 
the promotional services and listing ceremonies for all listed 
Companies on the same terms and conditions without differentiation.\36\
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    \32\ See id.
    \33\ See id.
    \34\ See id.
    \35\ See id.
    \36\ See id.
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    The Commission believes that the proposed rule change, as amended, 
is appropriate and consistent with the Act. The Commission believes 
that by describing in its Rules the promotional services and listing 
ceremonies available to listed Companies, the Exchange is adding 
greater transparency to its rules and the fees applicable to such 
Companies.\37\ This will help to ensure that individual listed 
Companies are not given specially negotiated packages of products and 
services to list or remain listed that would raise unfair 
discrimination issues under the Act. In this regard, the Commission 
also notes the Exchange's representation that the proposed promotional 
services and listing ceremonies will be offered to Companies only on or 
around the time of listing, in connection with listing on

[[Page 8814]]

the Exchange,\38\ and not on an ongoing basis.
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    \37\ The Commission views complimentary products and services 
provided by exchanges to listed companies as a discount on the 
ultimate listing fees paid by such companies. See, e.g., Securities 
Exchange Act Release Nos. 81872 (October 13, 2017), 82 FR 48733 
(October 19, 2017) (order approving SR-IEX-2017-20); 65127 (August 
12, 2011), 76 FR 51449 (August 18, 2011) (order approving SR-NYSE-
2011-20); and 65963 (December 15, 2011), 76 FR 79262 (December 21, 
2011) (order approving SR-NASDAQ-2011-122).
    \38\ See Amendment No. 1, supra note 4, at 6.
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    Moreover, the Commission notes the Exchange's representations that 
the proposed promotional services and listing ceremonies will be 
offered to all listed Companies on the same terms and conditions 
without differentiation,\39\ and that the Exchange will offer 
comparable promotional services and listing ceremonies of comparable 
value to each listed Company.\40\ Accordingly, the Commission believes 
that the proposed rule change, as modified by Amendment No. 1, is 
consistent with the requirements of the Act and, in particular, that 
the services are equitably allocated among issuers consistent with 
Section 6(b)(4) of the Act,\41\ and the rule does not unfairly 
discriminate between issuers consistent with Section 6(b)(5) of the 
Act.\42\ The Commission also notes that the Exchange has represented 
that if it expands the menu of promotional services offered, or elects 
to provide new products or services to listed Companies, the Exchange 
will incorporate such changes in a new proposed rule change.\43\
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    \39\ See Notice, supra note 3, at 84450.
    \40\ See Amendment No. 1, supra note 4, at 7.
    \41\ 15 U.S.C. 78f(b)(4).
    \42\ 15 U.S.C. 78f(b)(5).
    \43\ See Notice, supra note 3, at 84449 n.4.
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    The Commission also believes that the Exchange is responding to 
competitive pressures in the market for listings in making this 
proposal. Specifically, the Exchange stated in its proposal that it 
expects to face competition as a new entrant in the market for exchange 
listings, and that it believes the promotional services and listing 
ceremonies that it proposes to offer to listed companies will 
facilitate LTSE's ability to attract and retain listings.\44\ In 
particular, the Exchange maintains that it expects to face significant 
competition from NYSE and Nasdaq for listings, and that comparable 
offerings of promotional services and listing ceremonies are already 
provided by NYSE.\45\ Accordingly, the Commission believes that the 
proposed rule reflects the current competitive environment for exchange 
listings among national securities exchanges, and is appropriate and 
consistent with Section 6(b)(8) of the Act.\46\
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    \44\ See id. at 84450.
    \45\ See id. at 84449 n.5; id. at 84450. See also NYSE Listed 
Company Manual Section 106.03.
    \46\ 15 U.S.C. 78f(b)(8).
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IV. Solicitation of Comments on Amendment No. 1

    Interested persons are invited to submit written data, views, and 
arguments concerning whether Amendment No. 1 is consistent with the 
Act. Comments may be submitted by any of the following methods:

Electronic Comments

    <bullet> Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#7301061f165e101c1e1e161d0700330016105d141c05"><span class="__cf_email__" data-cfemail="1b696e777e36787476767e756f685b687e78357c746d">[email protected]</span></a>. Please include 
File No. SR-LTSE-2020-22 on the subject line.

Paper Comments

    <bullet> 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 No. SR-LTSE-2020-22. The file 
numbers 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 such 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 publicly available. All submissions 
should refer to File No. SR-LTSE-2020-22 and should be submitted on or 
before March 2, 2021.

V. Accelerated Approval of Proposed Rule Change, as Modified by 
Amendment No. 1

    The Commission finds good cause to approve the proposed rule 
change, as modified by Amendment No. 1, prior to the thirtieth day 
after the date of publication of notice of the amended proposal in the 
Federal Register. As discussed above, in Amendment No. 1, the Exchange 
clarified that: (i) The proposed promotional services and listing 
ceremonies will be offered to Companies on or around the time of 
listing, in connection with listing on the Exchange; and (ii) that the 
Exchange will offer comparable promotional services and listing 
ceremonies of comparable value to each listed Company. The Commission 
believes that these clarifications will help to ensure that individual 
listed Companies are not given specially negotiated packages of 
products and services to list or remain listed, as well as to ensure 
that the services are equitably allocated among issuers consistent with 
Section 6(b)(4) of the Act \47\ and that the rule does not unfairly 
discriminate between issuers consistent with Section 6(b)(5) of the 
Act.\48\ Accordingly, the Commission finds good cause, pursuant to 
Section 19(b)(2) of the Act,\49\ to approve the proposed rule change, 
as modified by Amendment No. 1, on an accelerated basis.
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    \47\ 15 U.S.C. 78f(b)(4).
    \48\ 15 U.S.C. 78f(b)(5).
    \49\ 15 U.S.C. 78s(b)(2).
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VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\50\ that the proposed rule change (SR-LTSE-2020-22), as modified 
by Amendment No. 1, be, and hereby is, approved on an accelerated 
basis.
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    \50\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\51\
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    \51\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-02592 Filed 2-8-21; 8:45 am]
BILLING CODE 8011-01-P


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