Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 68811 

40 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

tradingandmarkets@sec.gov or 202– 

551–5777. 

FICC reserves the right to not respond 

to any comments received. 

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 within such longer period 

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 

such 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– 

FICC–2023–014 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549. 

All submissions should refer to File 

Number SR–FICC–2023–014. 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 FICC and on DTCC’s website 

(dtcc.com/legal/sec-rule-filings). Do not 

include personal identifiable 

information in submissions; you should 

submit only information that you wish 

to make available publicly. We may 

redact in part or withhold entirely from 

publication submitted material that is 

obscene or subject to copyright 

protection. All submissions should refer 

to File Number SR–FICC–2023–014 and 

should be submitted on or before 

October 25, 2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.40

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–21938 Filed 10–3–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98665; File No. SR–NYSE– 

2023–09] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change To 

Amend the NYSE Listed Company 

Manual To Adopt Listing Standards for 

Natural Asset Companies 

September 29, 2023. 

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 

September 27, 2023, New York Stock 

Exchange LLC (the ‘‘Exchange’’ or 

‘‘NYSE’’) filed with the Securities and 

Exchange Commission (‘‘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 the 

NYSE Listed Company Manual 

(‘‘Manual’’) to adopt a new listing 

standard for the listing of Natural Asset 

Companies. 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 adopt a 

new subsection of Section 102 of the 

Manual (to be designated Section 

102.09) to permit the listing of common 

equity securities of Natural Asset 

Companies (or ‘‘NACs’’). 

For purposes of proposed Section 

102.09, a NAC is a corporation whose 

primary purpose is to actively manage, 

maintain, restore (as applicable), and 

grow the value of natural assets and 

their production of ecosystem services. 

In addition, where doing so is consistent 

with the company’s primary purpose, 

the company will seek to conduct 

sustainable revenue-generating 

operations. Sustainable operations are 

those activities that do not cause any 

material adverse impact on the 

condition of the natural assets under a 

NAC’s control and that seek to replenish 

the natural resources being used. The 

NAC may also engage in other activities 

that support community well-being, 

provided such activities are sustainable. 

Introduction to NACs 

The value of nature to life on earth is 

readily apparent. Healthy ecosystems 

produce clean air and water, foster 

biodiversity, regulate the climate, and 

provide the food on which our existence 

depends. For purposes of this proposal, 

the term ‘‘ecosystem’’ refers to specific 

entities (structures, functions, and 

components of the natural world) that 

produce ecosystem services. These and 

other benefits derived from ecosystems 

are called ecosystem services, and in 

aggregate, economists estimate their 

value at more than US$100 trillion 


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3Costanza et al (2014). Changes in the global 

value of ecosystem services, Global Environmental 

Change, 26, 152–158. Available at: https://doi.org/ 

10.1016/j.gloenvcha.2014.04.002. 

4 IPBES (2019). Global assessment report on 

biodiversity and ecosystem services of the 

Intergovernmental Science-Policy Platform on 

Biodiversity and Ecosystem Services. E. S. 

Brondizio, J. Settele, S. Dı ́az, and H. T. Ngo 

(editors). Available at: https://doi.org/10.5281/

zenodo.3831673. 

5 Global Sustainable Investment Alliance (2020). 

Global Sustainable Investment Review, 2020. 

Available at: http://www.gsi-alliance.org/wpcontent/uploads/2021/08/GSIR-20201.pdf. 

6The Commission has stated that a number of its 

disclosure rules may require disclosure related to 

climate change. Commission Guidance Regarding 

Disclosure Related to Climate Change, Release No. 

33–9106 (Feb. 2, 2010) 75 FR 6290 (Feb. 8, 2010). 

Also, the Commission’s Division of Corporation 

Finance recently reminded registrants that it 

selectively reviews filings to monitor and enhance 

compliance with applicable disclosure 

requirements. Available at: https://www.sec.gov/ 

corpfin/sample-letter-climate-change-disclosures. 

7 Deutz, A., Heal, G. M., Niu, R., Swanson, E., 

Townshend, T., Zhu, L., Delmar, A., Meghji, A., 

Sethi, S. A., and Tobinde la Puente, J. 2020. 

Financing Nature: Closing the global biodiversity 

financing gap. The Paulson Institute, The Nature 

Conservancy, and the Cornell Atkinson Center for 

Sustainability. Available at: https://

www.nature.org/en-us/what-we-do/our-insights/ 

reports/financing-nature-biodiversity-report/. 

8Boehm, S., K. Lebling, K. Levin, H. Fekete, J. 

Jaeger, R. Waite, A. Nilsson, J. Thwaites, R. Wilson, 

A. Geiges, C. Schumer, M. Dennis, K. Ross, S. 

Castellanos, R. Shrestha, N. Singh, M. Weisse, L. 

Lazer, L. Jeffery, L. Freehafer, E. Gray, L. Zhou, M. 

Gidden, and M. Gavin. 2021. State of Climate 

Action 2021: Systems Transformation Required to 

Limit Global Warming to 1.5 °C. Washington, DC: 

World Resources Institute: https://doi.org/10.46830/ 

wrirpt.21.00048. 

9Force for Good (2021). Capital as a Force for 

Good, 2021 Report. Available at: https://

www.forcegood.org/frontend/img/2021_report/pdf/ 

Funding_the_SDGs_and_a_Sustainable_

Future.pdf#toolbar=0 Chapter 2. 

dollars per year.3 Examples of 

ecosystem services include clean air, 

water supply, flood protection, 

productive soils for agriculture, climate 

stability, habitat for wildlife, among 

others. 

Despite a recognition that nature is 

immensely valuable, that value 

generally has not been included in the 

financial system. Public policy 

initiatives, like regulatory carbon 

markets, have made progress toward 

reflecting the true cost of industrial 

activities, but most environmental 

values remain uncaptured by financial 

reporting. Because financial markets do 

not include the positive and negative 

externalities related to nature’s 

consumption and production, 

ecosystem services are being degraded 

at alarming rates. Species extinction is 

proceeding at a pace never experienced 

in human history.4 Fresh water 

resources are being consumed and 

polluted. Agriculture is contributing to 

the loss of natural habitat and soil 

degradation. These are significant 

threats to life on earth and the economy. 

Recognizing the urgency and 

opportunity presented by these 

conditions, investors increasingly 

express a desire for investment vehicles 

that will permit them to express a 

sustainability thesis.5 Improvements in 

corporate disclosures,6 introduction of 

climate and nature-focused indices, and 

the development of ESG funds screening 

for preferred or prohibited factors have 

all expanded the accessibility of 

sustainable investing. Despite these 

advances, however, investors still 

express an unmet need for efficient, 

pure-play exposure to nature and 

climate. 

Although there is significant demand 

to deploy financial capital toward 

sustainability, stewards of natural 

landscapes have often had little choice 

other than extractive development to 

fund their budgets or garner a return on 

investment. Capital flows directed to 

biodiversity conservation, renewable 

energy, regenerative agriculture, and 

other direct investments needed to 

facilitate a transition to a sustainable 

economy are insufficient due in part to 

the inability to transparently present the 

economic case to access these 

investment dollars based on traditional 

measures for financial performance. The 

financing gap for biodiversity is 

estimated between US$598 and US$824 

billion per year 7 and for climate change 

is estimated at over US$5 trillion per 

year,8 and likely an order of magnitude 

larger for the transition to a more 

sustainable, resilient, and equitable 

economy.9

Ending the overconsumption of and 

underinvestment in nature requires 

bringing natural assets into the financial 

mainstream. To that end, the Exchange 

proposes to adopt listing standards to 

introduce a new type of public company 

called a NAC, a new concept pioneered 

by Intrinsic Exchange Group Inc. 

(‘‘IEG’’). Founded in 2017, IEG is a 

private company structured as a 

corporation organized under the laws of 

the State of Delaware that advises public 

sector and private landowners on the 

creation of NAC structures and 

strategies. 

NACs will be corporations that hold 

the rights to the ecological performance 

(i.e., the value of natural assets and 

production of ecosystem services) 

produced by natural or working areas, 

such as national reserves or large-scale 

farmlands, and have the authority to 

manage the areas for conservation, 

restoration, or sustainable management. 

These rights can be licensed like other 

rights, including ‘‘run with the land’’ 

rights (such as mineral rights, water 

rights, or air rights), and NACs are 

expected to license these rights from 

sovereign nations or private 

landowners. 

Under the proposed amendments to 

the Manual, capital raised through an 

NYSE-listed NAC’s initial public 

offering or follow-on offerings must be 

used to implement the conservation, 

restoration, or sustainable management 

plans articulated in its prospectus, fund 

its ongoing operations, or otherwise 

fulfill its purpose to maximize 

ecological performance (i.e., the value of 

natural assets and the production of 

ecosystem services). While a core 

purpose of a NAC is to maximize 

ecological performance, under the 

proposed rules, a NAC would also be 

required to seek to conduct sustainable 

revenue-generating operations (e.g., ecotourism in a natural landscape or 

production of regenerative food crops in 

a working landscape) provided that 

such operations are consistent with the 

NAC’s charter and do not cause any 

material adverse impact on the 

condition of the natural assets under the 

NAC’s control and seek to replenish the 

natural resources being used. Therefore, 

all NACs are prohibited from directly or 

indirectly conducting unsustainable 

activities, such as mining, that lead to 

the degradation of the ecosystems it is 

trying to protect. In conducting its 

revenue-generating operations, a NAC 

could monetize ecosystem services that 

have markets (e.g., through the sale of 

carbon credits). All revenues and 

expenses would be reported in the 

financial statements of the NAC 

prepared under generally accepted 

accounting principles (‘‘GAAP’’) and 

filed with the SEC as part of the NAC’s 

required annual report on Form 10–K, 

20–F or 40–F, as applicable. In order to 

align the interests of local communities 

with the objectives of maximizing the 

value of natural assets and the 

production of ecosystem services, a 

NAC would also be able to use its funds 

for activities that support local 

community well-being (e.g., education, 

health), provided that such activities are 

sustainable. 

Because of the distinct purpose of a 

NAC (to protect and grow the natural 

assets under its management), the 

Exchange proposes to require NACs to 

publish on a periodic basis information 

on the ecological performance of the 

natural assets licensed to a NAC. This 

information will be presented in an 

Ecological Performance Report (an 

‘‘EPR’’). 

The EPR provides statistical 

information on the biophysical 

measures (e.g., tons of carbon, acre feet 


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10United Nations et al (2021). System of 

Environmental-Economic Accounting—Ecosystem 

Accounting. White cover publication, pre-edited 

text subject to official editing. Available at: https:// 

seea.un.org/ecosystem-accounting. 

11United Nations (2011). Guiding principles on 

business and human rights: Implementing the 

United Nations ‘‘Protect, Respect and Remedy’’ 

framework. Available at: https://www.ohchr.org/ 

sites/default/files/documents/publications/

guidingprinciplesbusinesshr_en.pdf. 

12United Nations et al (2021). System of 

Environmental-Economic Accounting—Ecosystem 

Accounting (SEEA EA). White cover publication, 

pre-edited text subject to official editing. Available 

at: https://seea.un.org/ecosystem-accounting. 

13Wiseman, J., Brasher, K (2008) Community 

wellbeing in an unwell world: trends, challenges, 

and possibilities. Journal of Public Health Policy, 

29: 353–366. 

of water produced), condition, and 

economic value of each of the ecosystem 

services produced by the natural assets 

managed by the NAC. This will allow 

investors to gauge the effectiveness of 

management. The information will be 

consistently produced and periodically 

reported, following best practices from 

accepted valuation methodologies, as 

outlined in the Reporting Framework (as 

defined below). 

The EPR produced by a NAC must 

follow IEG’s Ecological Performance 

Reporting Framework (the ‘‘Reporting 

Framework’’). The Framework, in turn, 

is based on the natural capital 

accounting standards established in the 

United Nations System of 

Environmental-Economic Accounting— 

Ecosystem Accounting Framework 

(‘‘SEEA EA’’).10 The EPR will measure, 

value, and report on the ecosystem 

services and natural assets managed by 

a NAC. Under the proposed 

amendments to the Manual, NACs will 

conduct a Technical Ecological 

Performance Study (‘‘Technical EP 

Study’’) annually, following the 

Reporting Framework. This Technical 

EP Study will generate the information 

used to prepare and publish the EPR. 

The EPR and Technical EP Study must 

be examined and attested to by a public 

accounting firm that is registered with 

the Public Company Accounting 

Oversight Board (‘‘PCAOB’’) and is 

independent from the NAC and NAC 

licensor, if applicable, under the 

independence standard set forth in Rule 

2–01 of Regulation S–X (‘‘Independent 

Reviewer’’). 

In addition to the GAAP financial 

statements required under SEC 

disclosure rules and the proposed EPR 

that would be derived from a Technical 

EP Study, NYSE proposes to require 

NACs to provide a number of unique 

website disclosures designed to provide 

transparency on the NAC’s social and 

environmental objectives. These include 

requiring NACs to adopt and publish an 

Environmental and Social Policy, a 

Biodiversity Policy, a Human Rights 

Policy, consistent with the United 

Nations Guiding Principles on Business 

and Human Rights,11 and an Equitable 

Benefit Sharing Policy. 

Finally, the NAC will be required 

under applicable SEC rules to disclose 

all material information about its license 

with a natural asset owner (including 

any material amendments to the license 

over time) in the registration statement 

filed in connection with its IPO and in 

its subsequent periodic SEC filings. 

Relationship Between the NYSE and 

IEG 

The Exchange and IEG have entered 

into an agreement pursuant to which 

IEG has granted the Exchange an 

exclusive license in the United States to 

use the Reporting Framework in 

connection with the listing of NACs on 

the Exchange (although the Reporting 

Framework will remain proprietary to 

IEG). Under the terms of the agreement, 

the Exchange has acquired a small 

minority interest in IEG and one seat on 

IEG’s board of directors. IEG has agreed 

to seek to identify and develop NACs for 

listing on the Exchange, in addition to 

marketing the listing and trading of 

NACs on the Exchange and providing 

training with respect to the NAC 

structure and the Reporting Framework 

to NYSE personnel and currently listed 

and potential listed NACs. IEG will be 

entitled to a share of the revenues 

generated by the Exchange from the 

listing and trading of NACs on the 

NYSE. 

While IEG will seek to promote the 

listing of NACs on the NYSE, the 

determination of the suitability for 

listing of any applicant NACs will solely 

be made by the staff of NYSE Regulation 

and IEG will have no role in the listing 

qualification process. In evaluating a 

NAC for listing, the staff of NYSE 

Regulation intends to follow the same 

procedure it utilizes in qualifying 

operating companies. NYSE Regulation 

staff will review disclosures contained 

in a NAC’s registration statement and its 

audited financial statements to ensure 

that the NAC satisfies applicable 

quantitative, qualitative and corporate 

governance listing standards. On a 

continued listing basis, NYSE 

Regulation staff will review a NAC’s 

periodic reports filed with the 

Commission as well as public disclosure 

to ensure that a NAC continues to meet 

applicable listing standards. 

Definitions of Key Terms Used in This 

Proposal, in the Context of a NAC 

Unless otherwise stated, this 

document utilizes the definitions of the 

United Nations’ System of 

Environmental-Economic Accounting— 

Ecosystem Accounting (‘‘SEEA EA’’).12

In addition, there are terms unique to 

Natural Asset Companies, defined 

below: 

Community Well-being—Refers to the 

combination of social, economic, 

environmental, cultural, and political 

conditions of individuals and their 

communities as essential for them to 

flourish and fulfil their potential.13

Ecological Performance—The value of 

natural assets and the production of 

ecosystem services. 

Ecological Performance Report—A 

report with statistical information on 

the ecological performance of a NAC, 

including sections with data on (i) 

Natural Production, (ii) Natural Assets, 

and (iii) Underlying Asset Condition. 

The EPR is unique to NACs and will be 

provided in addition to traditional 

financial statements. 

• Natural Production Section—A 

section of the EPR that provides 

information on the annual flows of 

ecosystem services managed by a NAC. 

• Natural Assets Section—A section 

of the EPR that provides information on 

the net present value of natural assets 

producing ecosystem services managed 

by a NAC. 

• Underlying Asset Condition 

Section—A section of the EPR that 

provides biophysical information on the 

extent and condition of the ecosystems 

being managed by the NAC. 

Ecological Performance Rights—The 

rights to the value of natural assets and 

the production or ecosystem services in 

a designated area, including the 

authority to manage the area. These 

rights are granted to a NAC, from a 

natural asset owner, as provided 

through a license agreement. 

Ecosystem Service Valuation—The 

assignation of an economic value to an 

ecosystem service using one of many 

valuation methodologies accepted 

today. 

IEG Ecological Performance Reporting 

Framework—IEG has developed a 

specific framework for NACs to derive 

and report on ecosystem service values 

and on the quality of the natural assets 

being managed. In addition, the 

Reporting Framework defines the 

components and structure of the EPR to 

ensure the values are reported 

transparently and consistently. 

Independent Reviewer—A public 

accounting firm registered with the 

PCAOB independent of a NAC and, 

where applicable, a NAC’s licensor. 

Local Communities—refers to groups 

of people—including indigenous 


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14The text of the Framework is included [sic] in 

Exhibit 3 to this filing. 

15The Exchange notes that it will be important for 

NACs in their offering materials and subsequent 

public disclosure documents to be clear in 

distinguishing the rights to the land ownership and 

geographic area from the rights to the ecological 

performance and to clearly specify, where 

appropriate, the limits of the NAC’s rights as an 

owner or licensee. 

peoples and other local groups—who 

have direct ties to and derive livelihood 

or cultural values from the area to 

which the NAC holds the license. 

Natural Assets—A statistical 

representation of ecosystems for 

accounting purposes that defines them 

as productive units of ecosystem 

services. The term ‘‘Natural Assets’’ is 

equivalent to SEEA EA’s term 

‘‘ecosystem assets.’’ Natural assets can 

be monetized directly or indirectly. Like 

traditional assets, they have economic 

value and are expected to provide future 

streams of benefits. In the singular form, 

the term refers to an ecosystem type 

(e.g., a delineated forest). 

Natural Asset Companies (NACs)— 

Corporations that hold the rights to the 

ecological performance of a defined area 

and have the authority to manage the 

areas for conservation, restoration, or 

sustainable management. 

Sustainable Activities—From an 

ecological perspective, activities that do 

not cause any material adverse impact 

on the condition of ecosystems, and that 

seek to replenish the natural resources 

being used. 

Unsustainable Activities—From an 

ecological perspective, activities that 

cause material adverse impact on the 

condition of ecosystems, and extract 

resources without replenishing them. 

The IEG Reporting Framework 

IEG has developed a Reporting 

Framework for NACs to measure and 

value natural assets and define how the 

EPR should be structured to ensure 

transparency, robustness, and 

consistency in the reporting of values 

and other statistical information 

disclosed. 

The Reporting Framework to be used 

by NACs is based on the standards 

developed in SEEA EA. SEEA EA 

provides the most comprehensive 

guidance on natural capital accounting 

and is of particular relevance to the 

valuation of NACs due to its spatial 

approach and its focus on measuring 

and reporting on the ecosystem services 

produced by ecosystems. 

IEG adopted SEEA EA as the 

accounting standard for the 

measurement and valuation of natural 

assets and ecosystem services, with 

some minor adaptations to ensure that 

the natural asset valuations of NACs 

provide comprehensive, 

understandable, consistent, robust, and 

transparent information to investors and 

other users of the companies EPR. The 

Reporting Framework includes 

specifications on how to apply SEEA EA 

to report on the annual performance of 

NACs. In particular, the Reporting 

Framework sets up NACs to report the 

Total Economic Value (‘‘TEV’’) of 

natural assets, which is in line with the 

recommendations of the British 

Standard for natural capital accounting 

(BS 8632) for financial organizations 

and the ISO Standard 14008. 

Given that NACs are designed to 

manage and grow the value of natural 

assets and the production of ecosystem 

services—a NAC’s activities are not well 

captured solely by traditional financial 

reporting standards like GAAP/IFRS, as 

most ecosystem services are not 

monetized today. To account for and 

capture the value of the non-monetized 

ecosystem services, NACs will be 

required to conduct an annual 

Technical EP Study, adhering to IEG’s 

Reporting Framework, in order to 

prepare their EPR. The Reporting 

Framework defines: 

• the steps to characterize, measure 

and value the ecosystem service and 

natural asset values in a Technical EP 

Study, and 

• the components and structure of the 

EPR including guidance to compile its 

sections, to ensure transparency, 

robustness, and consistency in the 

reporting of information about the 

natural assets. 

The Reporting Framework (which 

provides instructions for the preparation 

of the EPR) will be publicly accessible 

on nyse.com.14

The Exchange, in consultation with 

IEG, will have sole authority to 

determine whether and how to propose 

amendments to the Reporting 

Framework from time to time. Any 

proposed change to the Reporting 

Framework will have the effect of a 

change to an Exchange rule and will 

therefore be filed by the Exchange with 

the Commission pursuant to Section 

19(b) of the Act. Additionally, the 

Exchange will maintain on nyse.com a 

publicly-accessible copy of of the 

Reporting Framework. 

Proposed Listing Rules 

Required Corporate Documents 

1. Charter 

Each NAC must file its charter as an 

exhibit to its registration statement. As 

a condition to initial listing, the NYSE 

proposes to require a NAC’s charter to 

state the following: 

1. The purpose of the company is to 

actively manage, maintain, restore (as 

applicable), and grow the value of 

natural assets and their production of 

ecosystem services. In addition, where 

doing so is consistent with the 

company’s primary purpose, the 

company will seek to conduct 

sustainable revenue-generating 

operations. Sustainable operations are 

those activities that do not cause any 

material adverse impact on the 

condition of the natural assets under its 

control, and that seek to replenish the 

natural resources being used. The 

sustainability of the revenue-generating 

operations will be determined based on 

the impacts of their activities on the 

condition metrics, and where 

applicable, on any capacity-to-produce 

indicators reported by a NAC in its EPR. 

Condition metrics should not show 

degradation as a result of these activities 

and capacity-to-produce indicators 

should be moving to a rate where 

resource extraction is less than resource 

replenishment. The NAC may also 

engage in other activities that support 

community well-being, provided such 

activities are sustainable. 

2. NAC funds (including any proceeds 

from the sale of the company’s 

securities at any time) must be used 

primarily to meet the NAC’s operational 

needs to fulfill its purpose. In addition, 

funds may be used to support 

community well-being, provided such 

activities are sustainable. 

3. The NAC will be prohibited from 

engaging directly or indirectly in 

unsustainable activities. These are 

defined as activities that cause any 

material adverse impact on the 

condition of the natural assets under its 

control, and that extract resources 

without replenishing them (including, 

but not limited to, traditional fossil fuel 

development, mining, unsustainable 

logging, or perpetuating industrial 

agriculture). The NAC will be 

prohibited from using its funds to 

finance such unsustainable activities. 

If any of the foregoing provisions of 

the NAC’s charter are eliminated or 

materially amended in a manner that is 

inconsistent with their required form at 

any time, the NAC will be subject to 

delisting from the NYSE. 

2. License Agreements 

NACs will acquire the ecological 

performance rights of a designated area 

by entering into an agreement with the 

natural asset owner (e.g., a 

governmental entity or private 

landowner) to obtain a license with 

respect to such rights.15 The Exchange 

proposes that all material terms of the 


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16The ESMS should be consistent with generally 

accepted international standards, such as the ‘‘IFC 

Performance Standard 1: Assessment and 

Management of Environmental and Social Risks and 

Impacts.’’ 

17United Nations (2011). Guiding Principles on 

Business and Human Rights: Implementing the 

United Nations ‘‘Protect, Respect and Remedy’’ 

Framework. Available at: https://www.ohchr.org/ 

documents/publications/guidingprinciples

businesshr_en.pdf. 

applicable license agreement be 

publicly disclosed in the NAC’s 

periodic filings consistent with SEC 

rules. At minimum, the NAC will be 

required to disclose the following 

information about any license 

agreement: 

a. Term: At the time of initial listing, 

the term of any license agreement must 

be a minimum of ten years from the date 

of closing of the NAC’s initial public 

offering (the Exchange expects that most 

license agreements will have terms 

significantly longer than ten years and, 

in some cases, may be perpetual); 

b. Scope: The specific natural assets 

and ecosystem services covered by the 

license agreement; 

c. License Payments: The amount and 

terms of any ongoing payments due 

from the licensee to the licensor; 

d. Modification Provisions: The 

circumstances under which a license 

agreement may be modified and the 

procedures for effecting any such 

modification; 

e. Termination Provisions: The 

circumstances under which a license 

agreement may be terminated, including 

the rights and obligations of all parties 

to the license agreement, and the 

procedures for effecting any such 

termination. 

The proposed rule would specify that 

any NAC whose license is terminated or 

materially breached by either party 

would be subject to delisting. 

3. NAC Policies 

Proposed Section 102.09 of the 

Manual provides that a NAC seeking to 

list on the NYSE must adopt the 

following written polices (collectively, 

the ‘‘NAC Policies’’) and post them on 

its website by the earlier of the date that 

the NAC’s initial public offering closes 

or five business days following the 

NAC’s initial listing date: 

1. An Environmental and Social 

Policy that articulates the objectives and 

principles that will guide the NAC to 

achieve sound environmental and social 

performance. Such policy must include 

requirements to conduct a process of 

environmental and social assessment, 

and establish, as soon as practicable 

after listing, an Environmental and 

Social Management System (‘‘ESMS’’).16

The ESMS should be designed to: 

(i) Identify and assess environmental 

and social risks and impacts, 

(ii) Identify measures to avoid, 

minimize and mitigate the negative risks 

and impacts, and 

(iii) Promote improved environmental 

and social performance. 

2. A Biodiversity Policy that 

articulates a commitment to achieving 

no net loss, and where possible a net 

positive impact on biodiversity. The 

Biodiversity Policy should be based on 

the mitigation hierarchy, a planning and 

management approach for addressing 

impacts to biodiversity and ecosystem 

services through avoidance, 

minimization, restoration, and 

offsetting. 

3. A Human Rights Policy that 

articulates a commitment to human 

rights, consistent with the United 

Nations Guiding Principles on Business 

and Human Rights,17 including a 

commitment to recognize and respect 

people’s rights in accordance with 

customary, national, and international 

human rights laws, in particular those of 

indigenous peoples. 

4. An Equitable Benefit Sharing Policy 

that articulates the NAC’s commitment 

for sharing benefits with local 

communities. A NAC must include in 

its license agreement with the licensor 

a provision requiring the licensor to 

comply with the applicable terms of the 

Equitable Benefit Sharing Policy. 

The Equitable Benefit Sharing Policy 

must require an equitable benefit 

sharing arrangement for the distribution 

of shares of the NAC’s common stock to 

local communities (i.e., those who have 

direct ties to and derive livelihood or 

cultural values from the applicable 

area). The NAC’s common stock 

distribution must be completed no later 

than the time of closing of the NAC’s 

IPO and must meet the following 

requirements at a minimum: 

• If the NAC has entered into a 

license agreement with respect to public 

lands, shares representing at least 50% 

of the shares of the NAC’s outstanding 

shares as of the closing of the IPO must 

be distributed to local communities. 

• If the NAC has entered into a 

license agreement with respect to 

private lands, shares representing at 

least 5% of the shares of the NAC 

outstanding as of the closing of the IPO 

must be distributed to local 

communities. 

The foregoing distributions of shares 

of common stock may be placed in a 

trust or equivalent structure, for the 

benefit of the intended beneficiaries. 

Any trust (or equivalent) holding shares 

of the NAC for this purpose must be 

under the majority control of trustees 

that are fully independent of both the 

NAC and, where applicable, the 

licensor, and/or be representative of the 

intended beneficiaries. 

The Equitable Benefit Sharing Policy 

must provide that the NAC will (a) 

deposit its cash and other financial 

assets in accounts with a bank custodian 

regulated by the U.S. Office of the 

Comptroller of the Currency (an 

‘‘Authorized Bank’’); and (b) include in 

its license agreement a provision 

requiring the licensor to place any 

shares of the NAC it owns in the 

custody of an Authorized Bank and 

deposit the proceeds from any NAC 

share sales by the licensor and any 

distributions received from the NAC in 

accounts with an Authorized Bank, 

pending the distribution of such assets 

in a manner consistent with the NAC’s 

Equitable Benefit Sharing Policy. 

The NAC must review the adequacy 

of the Equitable Benefit Sharing Policy 

at least annually and publish on its 

website a detailed description of its 

activities in accordance with such 

policy (the ‘‘Annual EBS Report’’) no 

later than 90 days after the end of each 

fiscal year. 

The Annual EBS Report must be 

examined by an Independent Reviewer 

(the ‘‘EBS Independent Reviewer’’) and 

be accompanied by an examination 

level report (i.e., reasonable assurance) 

regarding the NAC and, if applicable, 

the licensor, in accordance with the 

Equitable Benefits Sharing Policy during 

the applicable fiscal period, including a 

review of the accounts maintained by 

the NAC and the licensor at Authorized 

Banks, in accordance with the PCAOB 

or AICPA’s attestation standards. 

The NAC’s accordance with the 

requirements of its Equitable Benefits 

Sharing Policy must be reviewed 

periodically either by (i) a committee 

consisting solely of directors who meet 

the independence requirements of 

Section 303A of the Manual or (ii) the 

NAC’s independent directors acting as a 

group. Such committee or the 

independent directors, as the case may 

be, must meet for this purpose at least 

annually and such meeting must 

include an executive session in which 

management does not participate and a 

discussion with the EBS Independent 

Reviewer at which management must 

not be present. 

4. Ecological Performance Report 

Proposed Section 102.09 will provide 

that, prior to its initial listing, the NAC 

must make publicly available an EPR 

that has been prepared consistent with 

the Reporting Framework. The 

Reporting Framework (including 

instructions for the preparation of the 


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EPR and templates for the EPR) will be 

posted on nyse.com and is attached 

hereto [sic] as Exhibit 3. NACs will 

conduct a Technical EP Study annually, 

following the Reporting Framework, 

which will generate the information 

used to prepare and publish the EPR. 

Both the Technical EP Study and EPR 

must be examined by an Independent 

Reviewer annually. The EPR must be 

accompanied by an examination level 

report (i.e., reasonable assurance) 

prepared by such Independent Reviewer 

in accordance with the PCAOB or 

AICPA’s attestation standards. 

Quantitative and Corporate Governance 

Listing Rules 

To qualify for listing as a NAC, an 

applicant issuer would be required to 

meet the quantitative listing 

requirements applicable to the listing of 

common equities of operating 

companies as set forth in Sections 

102.01(A), (B), and (C) of the Manual. 

Proposed Section 102.09(G) would 

provide that listed NACs would be 

subject to all of the continued listing 

requirements that are applicable to 

operating companies listed under 

Sections 102 and 103 of the Manual. 

Audit Committee 

As described above, a listed NAC 

would be subject to all of the corporate 

governance requirements set forth in 

Section 303A.00, including the 

requirement of Section 303A.06 that a 

company must have an independent 

audit committee and the provisions of 

Section 303A.07 setting forth additional 

requirements for the audit committee. 

The Exchange proposes to amend 

Section 303A.07 to establish additional 

responsibilities specific to the audit 

committee of a NAC. As proposed, 

Section 303A.07 would require that (in 

addition to the requirements of Section 

303A.07(b)), the NAC’s audit committee 

charter must address the following: 

1. That the audit committee’s purpose 

includes assisting board oversight of (1) 

the integrity of the NAC’s EPR, (2) the 

qualifications and independence of the 

Independent Reviewer and (3) the 

performance of the Independent 

Reviewer. 

2. The audit committee of the NAC 

must: 

(i) at least annually, obtain and review 

a report by the Independent Reviewer 

describing: the Independent Reviewer’s 

internal quality-control procedures; any 

material issues raised by the most recent 

internal quality-control review, or peer 

review, of the Independent Reviewer, or 

by any inquiry or investigation by 

governmental or professional 

authorities, within the preceding five 

years, respecting one or more 

independent audits carried out by the 

Independent Reviewer, and any steps 

taken to deal with any such issues; and 

(to assess the Independent Reviewer’s 

independence) all relationships between 

the Independent Reviewer and the NAC. 

After reviewing the foregoing report and 

the Independent Reviewer’s work 

throughout the year, the audit 

committee will be in a position to 

evaluate the Independent Reviewer’s 

qualifications, performance, and 

independence. This evaluation should 

include the review and evaluation of the 

lead partner of the Independent 

Reviewer. In making its evaluation, the 

audit committee should take into 

account the opinions of management 

and the NAC’s internal auditors (or 

other personnel responsible for the 

internal audit function). In addition to 

assuring the regular rotation of the lead 

partner responsible for the EPR Review, 

the audit committee should further 

consider whether, in order to assure 

continuing independence of the 

Independent Reviewer, there should be 

regular rotation of the firm undertaking 

the EPR Review itself. The audit 

committee should present its 

conclusions with respect to the 

Independent Reviewer to the full board 

and meet to review and discuss the 

NAC’s annual EPR. Meetings may be 

telephonic if permitted under applicable 

corporate law; polling of audit 

committee members, however, is not 

permitted in lieu of meetings. 

(ii) meet separately, periodically, with 

management and the Independent 

Reviewer to discuss the EPR and the 

conduct of the EPR Review. To perform 

its oversight functions most effectively, 

the audit committee must have the 

benefit of separate sessions with 

management and the Independent 

Reviewer. These separate sessions may 

be more productive than joint sessions 

in surfacing issues warranting 

committee attention. 

(iii) review with the Independent 

Reviewer any problems in the conduct 

of their review or difficulties and 

management’s response. The audit 

committee must regularly review with 

the Independent Reviewer any 

difficulties the Independent Reviewer 

encountered in the course of its review, 

including any restrictions on the scope 

of the Independent Reviewer’s activities 

or on access to requested information, 

and any significant disagreements with 

management. 

(iv) set clear hiring policies for 

employees or former employees of the 

Independent Reviewer. Employees or 

former employees of the Independent 

Reviewer may be valuable additions to 

the NAC’s management. Such 

individuals’ familiarity with the 

business, and personal rapport with the 

employees, may be attractive qualities 

when filling a key opening. However, 

the audit committee should set hiring 

policies taking into account the 

pressures that may exist for personnel of 

the Independent Reviewer consciously 

or subconsciously seeking a job with the 

NAC they review. 

(v) report regularly to the board of 

directors with respect to the preparation 

of the EPR and the performance of the 

Independent Reviewer. The audit 

committee should review with the full 

board any issues that arise with respect 

to the quality or integrity of the EPR or 

the performance and independence of 

the Independent Reviewer. 

Material News 

A NAC will be required to 

immediately disclose, pursuant to the 

Exchange’s immediate release policy set 

forth in Sections 202.05 and 202.06 of 

the Manual, any event (e.g., a forest fire) 

that is anticipated to have a material 

adverse effect with respect to any of the 

criteria included in the EPR. As soon 

thereafter as possible, the NAC must 

disclose in a Form 8–K or Form 6–K, as 

applicable, its estimates of the changes 

to the previously presented EPR of such 

event. 

Periodic Publication of EPR and 

Occurrence of a Late EPR Delinquency 

Each year after initial listing, a NAC 

must publish on its public website an 

EPR that has been prepared consistent 

with the Reporting Framework. The 

Technical EP Study and EPR must be 

examined by the Independent Reviewer. 

The EPR must be accompanied by an 

examination level report prepared by 

such Independent Reviewer in 

accordance with the PCAOB or AICPA’s 

attestation standards. The EPR must 

cover the same fiscal periods as the 

audited financial statements included in 

the NAC’s annual report on Form 10–K, 

Form 20–F, or Form 40–F, as applicable. 

The NAC should utilize its best efforts 

to publish its annual EPR no later than 

the filing of its annual report on Form 

10–K, Form 20–F, or Form 40–F, as 

applicable. In the event that the annual 

EPR is not completed by the filing due 

date of the NAC’s annual report on 

Form 10–K, Form 20–F, or Form 40–F, 

as applicable, such annual EPR is 

required to be published no later than 

180 days after the end of the fiscal year 

to which such annual EPR relates (the 

‘‘NAC EPR Due Date’’ and the failure of 

a listed NAC to timely publish its 

annual EPR, a ‘‘NAC Late EPR 

Delinquency’’). In the event that the 


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

company is unable to file its Form 10– 

K, Form 20–F, or Form 40–F, as 

applicable, by the NAC EPR Due Date, 

the company should not delay the 

publication of its EPR, but rather should 

publish its EPR on or before that date. 

Upon the occurrence of a NAC Late 

EPR Delinquency, the Exchange will 

promptly send written notification (the 

‘‘NAC Late EPR Delinquency 

Notification’’) to an affected NAC of the 

procedures set forth below. Within five 

days of the date of the NAC Late EPR 

Delinquency Notification, the company 

will be required to (a) contact the 

Exchange to discuss the status of the 

delinquent annual EPR (the ‘‘Delinquent 

NAC EPR’’) and (b) issue a press release 

disclosing the occurrence of the NAC 

Late EPR Delinquency, the reason for 

the NAC Late EPR Delinquency, and, if 

known, the anticipated date such NAC 

Late EPR Delinquency will be cured via 

the publication of the Delinquent NAC 

EPR. If the company has not issued the 

required press release within five days 

of the date of the NAC Late EPR 

Delinquency Notification, the Exchange 

will issue a press release stating that the 

company has incurred a NAC Late EPR 

Delinquency and providing a 

description thereof. 

NAC Non-Reliance Event 

In the event that a NAC concludes 

that its previously issued EPR should no 

longer be relied upon because of an 

error in such EPR (a ‘‘NAC NonReliance Event,’’ and the disclosure of 

such NAC Non-Reliance Event, a ‘‘NAC 

Non-Reliance Disclosure’’), it will be 

required to comply with the NAC Late 

EPR Delinquency Notification 

procedures set forth above. If the NAC 

does not publish an amended EPR 

within 60 days of the issuance of the 

NAC Non-Reliance Disclosure (an 

‘‘Extended NAC Non-Reliance 

Disclosure Event’’ and, together with a 

NAC Late EPR Delinquency, a ‘‘NAC 

Reporting Delinquency’’) for purposes of 

the cure periods described below a NAC 

Reporting Delinquency will be deemed 

to have occurred on the date of original 

issuance of the NAC Non-Reliance 

Disclosure. If the Exchange believes that 

a NAC is unlikely to publish the 

amended EPR within 60 days after a 

NAC Non-Reliance Disclosure or that 

the errors giving rise to such NAC NonReliance Disclosure are particularly 

severe in nature, the Exchange may, in 

its sole discretion, determine earlier 

than 60 days that the applicable NAC 

has incurred a NAC Publication 

Delinquency as a result of such NAC 

Non-Reliance Disclosure. 

Cure Periods for NAC Publication 

Delinquencies 

During the six-month period from the 

date of the NAC Publication 

Delinquency (the ‘‘Initial NAC EPR Cure 

Period’’), the Exchange will monitor the 

company and the status of the 

Delinquent NAC EPR, including through 

contact with the company, until the 

NAC Publication Delinquency is cured. 

If the company fails to cure the NAC 

Publication Delinquency within the 

Initial NAC EPR Cure Period, the 

Exchange may, in the Exchange’s sole 

discretion, allow the company’s 

securities to be traded for up to an 

additional six-month period (the 

‘‘Additional NAC EPR Cure Period’’) 

depending on the company’s specific 

circumstances. If the Exchange 

determines that an Additional NAC EPR 

Cure Period is not appropriate, 

suspension and delisting procedures 

will commence in accordance with the 

procedures set out in Section 804.00 of 

the Listed Company Manual. A NAC 

will not be eligible to follow the 

procedures outlined in Sections 802.02 

and 802.03 with respect to these criteria. 

In determining whether an Additional 

NAC EPR Cure Period after the 

expiration of the Initial NAC EPR Cure 

Period is appropriate, the Exchange will 

consider the likelihood that the 

Delinquent NAC EPR can be published 

during the Additional NAC EPR Cure 

Period. The Exchange strongly 

encourages companies to provide 

ongoing disclosure on the status of the 

Delinquent NAC EPR to the market 

through press releases and will also take 

the frequency and detail of such 

information into account in determining 

whether an Additional NAC EPR Cure 

Period is appropriate. If the Exchange 

determines that an Additional NAC EPR 

Cure Period is appropriate, and the 

company fails to publish the Delinquent 

NAC EPR by the end of such Additional 

NAC EPR Cure Period, suspension and 

delisting procedures will commence 

immediately in accordance with the 

procedures set out in Section 804.00. In 

no event will the Exchange continue to 

trade a NAC’s securities if that company 

has failed to cure its NAC EPR 

Delinquency on the date that is twelve 

months after the applicable NAC EPR 

Due Date. 

Filing Delinquencies and NAC EPR 

Delinquencies Are Treated Separately 

For purposes of Section 802.01E, 

NACs will also be subject to the 

provisions with respect to delinquencies 

in filing periodic reports as set forth in 

that rule (a ‘‘Filing Delinquency’’). A 

Filing Delinquency is a separate event of 

noncompliance from a NAC Publication 

Delinquency. Consequently, a NAC can 

be deemed to have cured a Filing 

Delinquency while remaining 

noncompliant due to an ongoing NAC 

Publication Delinquency or vice versa. 

Components and Form of the 

Statements 

The EPR published by NYSE-listed 

NACs will consists of three components: 

(1) Natural Production Section, (2) 

Natural Assets Section and (3) 

Underlying Asset Condition Section. 

The process for conducting a 

Technical EP Study and the 

requirements for preparing an EPR are 

contained in the Reporting Framework 

which is attached hereto [sic] as Exhibit 

3. NACs must conduct a Technical EP 

Study and prepare and publish an EPR 

that complies with the Reporting 

Framework, in each case on an annual 

basis. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b)(5) of the Act,18 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 proposed listing standard for 

NACs is consistent with the protection 

of investors and the public interest 

because, among other things, it includes 

rigorous quantitative financial 

requirements and corporate governance 

requirements. Specifically, the proposed 

listing standard requires NACs to meet 

the same quantitative initial and 

continued listing standards as are 

applied to operating companies listed 

on the NYSE. In addition, NACs would 

be subject, without exception, to all of 

the other rules applicable to NYSE 

listed operating companies. 

The proposed rule change is designed 

to perfect the mechanism of a free and 

open market in that it will facilitate the 

listing and trading of an additional type 

of security and will therefore enhance 

competition among market participants, 

to the benefit of investors and the 

marketplace. There is significant and 

growing interest in investing in asset 


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classes that are consistent with the 

objective of protecting and improving 

the environment. The Exchange believes 

that the listing of NACs will provide 

investors with an investment vehicle 

that meets this demand. The Exchange 

also believes that the development of 

NACs will provide a source of funding 

to maintain and restore natural assets. 

The charter provisions each NAC 

would be required to adopt under the 

proposed rule are also consistent with 

the protection of investors and the 

public interest because they are 

designed to ensure that the NAC 

conducts its operations in a manner 

consistent with the ecological and 

socially equitable goals that would 

motivate investors when investing in 

the NAC. Specifically, these proposed 

charter requirements would include the 

following provisions: 

• The purpose of the company is to 

actively manage, maintain, restore (as 

applicable), and grow the value of 

natural assets and their production of 

ecosystem services. In addition, where 

doing so is consistent with the 

company’s primary purpose, the 

company will seek to conduct 

sustainable revenue-generating 

operations. Sustainable operations are 

those activities that do not cause any 

material adverse impact on the 

condition of the natural assets under its 

control, and that seek to replenish the 

natural resources being used. The 

sustainability of the revenue-generating 

operations will be determined based on 

the impacts of their activities on the 

condition metrics, and where 

applicable, on any capacity-to-produce 

indicators reported by a NAC in its EPR. 

Condition metrics should not show 

degradation as a result of these activities 

and capacity-to-produce indicators 

should be moving to a rate where 

resource extraction is less than resource 

replenishment. The NAC may also 

engage in other activities that support 

community well-being, provided such 

activities are sustainable. 

• NAC funds (including any proceeds 

from the sale of the company’s 

securities at any time) must be used 

primarily to meet the NAC’s operational 

needs to fulfill its purpose. In addition, 

funds may be used to support 

community well-being, provided such 

activities are sustainable. 

• The NAC will be prohibited from 

engaging directly or indirectly in 

unsustainable activities. These are 

defined as activities that cause any 

material adverse impact on the 

condition of the natural assets under its 

control, and that extract resources 

without replenishing them (including, 

but not limited to, traditional fossil fuel 

development, mining, unsustainable 

logging, or perpetuating industrial 

agriculture). The NAC will be 

prohibited from using its funds to 

finance such unsustainable activities. 

If any of the foregoing provisions of 

the NAC’s charter are eliminated or 

materially amended in a manner that is 

inconsistent with their required form at 

any time, the NAC will be subject to 

delisting from the NYSE. 

Similarly, the various policies that the 

NAC would be required to adopt and 

publicize (including an Environmental 

and Social Policy, a Biodiversity Policy, 

a Human Rights Policy, and an 

Equitable Benefits Sharing Policy) 

would protect investors by establishing 

clear standards that the NAC must abide 

by in seeking to address its stated 

ecological and social goals. 

In addition, the Exchange believes 

that the examination conducted by the 

Independent Reviewer with respect to 

the initial and periodic EPR published 

by each NAC are consistent with 

investor protection and the public 

interest because they are designed to 

ensure that such EPR is prepared in a 

manner that is consistent with the 

requirements of the Reporting 

Framework. Further, this thorough 

independent expert examination of each 

NAC’s EPR will protect investors by 

providing significant assurance as to the 

reliability of that EPR. The proposal 

would also amend Section 802.01E of 

the Manual to create non-compliance 

and delisting procedures for NACs that 

fail to timely publish their EPR. The 

proposed requirements for the audit 

committee of the NAC to oversee the 

preparation of the EPR and the 

performance of the Independent 

Reviewer are consistent with the 

protection of investors as they will help 

assure the accuracy and completeness of 

the EPR and the quality of the 

Independent Reviewer’s review. 

Similarly, as is the case with all listed 

companies, NACs would be required to 

immediately disclose pursuant to the 

Exchange’s immediate release policy set 

forth in Sections 202.05 and 202.06 of 

the Manual any material event, 

including any event that is anticipated 

to have a material adverse effect with 

respect to any of the criteria included in 

the EPR (e.g., a forest fire). It is therefore 

in the interests of investors to have a 

rigorous rule to address delinquencies 

with respect to disclosures and to 

require immediate disclosure of material 

events. 

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. A listing 

under the proposed rule would be 

available in a non-discriminatory way to 

any company satisfying its 

requirements, as well as all other 

applicable NYSE listing requirements. 

In addition, the Exchange faces 

competition for listings but the 

proposed rule change does not impose 

any burden on the competition with 

other exchanges; any competing 

exchange could similarly adopt rules to 

allow the listing of NACs. 

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 within such longer period 

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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

NYSE–2023–09 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–2023–09. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 


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19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5Securities Exchange Act Release No. 61439 

(January 28, 2010), 75 FR 5831 (February 4, 2010) 

(SR–CBOE–2009–087) (‘‘Approval Order’’). The 

initial pilot period was set to expire on March 28, 

2011, which date was added to the rules in 2010. 

See Securities Exchange Act Release No. 61676 

(March 9, 2010), 75 FR 13191 (March 18, 2010) (SR– 

CBOE–2010–026). 

6See Securities Exchange Act Release Nos. 64110 

(March 23, 2011), 76 FR 17463 (March 29, 2011) 

(SR–CBOE–2011–024); 66701 (March 30, 2012), 77 

FR 20673 (April 5, 2012) (SR–CBOE–2012–027); 

68145 (November 2, 2012), 77 FR 67044 (November 

8, 2012) (SR–CBOE–2012–102); 70752 (October 24, 

2013), 78 FR 65023 (October 30, 2013) (SR–CBOE– 

2013–099); 73460 (October 29, 2014), 79 FR 65464 

(November 4, 2014) (SR–CBOE–2014–080); 77742 

(April 29, 2016), 81 FR 26857 (May 4, 2016) (SR– 

CBOE–2016–032); 80443 (April 12, 2017), 82 FR 

18331 (April 18, 2017) (SR–CBOE–2017–032); 

83175 (May 4, 2018), 83 FR 21808 (May 10, 2018) 

Continued 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–NYSE–2023–09 and should be 

submitted on or before October 25, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–22041 Filed 10–3–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98637; File No. SR–CBOE– 

2023–057] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Extend the Operation 

of Its Flexible Exchange Options 

(‘‘FLEX Options’’) Pilot Program 

Regarding Permissible Exercise 

Settlement Values for FLEX Index 

Options 

September 28, 2023. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on 

September 28, 2023, Cboe Exchange, 

Inc. (the ‘‘Exchange’’ or ‘‘Cboe 

Options’’) filed with the Securities and 

Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange filed the 

proposal as a ‘‘non-controversial’’ 

proposed rule change pursuant to 

Section 19(b)(3)(A)(iii) of the Act 3 and 

Rule 19b–4(f)(6) thereunder.4 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 

Cboe Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to extend 

the operation of its Flexible Exchange 

Options (‘‘FLEX Options’’) pilot 

program regarding permissible exercise 

settlement values for FLEX Index 

Options. The text of the proposed rule 

change is provided below. 

(additions are italicized; deletions are 

[bracketed]) 

* * * * * 

Rules of Cboe Exchange, Inc. 

* * * * * 

Rule 4.21. Series of FLEX Options 

(a) No change. 

(b) Terms. When submitting a FLEX Order 

for a FLEX Option series to the System, the 

submitting FLEX Trader must include one of 

each of the following terms in the FLEX 

Order (all other terms of a FLEX Option 

series are the same as those that apply to 

non-FLEX Options), provided that a FLEX 

Index Option with an index multiplier of one 

may not be the same type (put or call) and 

may not have the same exercise style, 

expiration date, settlement type, and exercise 

price as a non-FLEX Index Option overlying 

the same index listed for trading (regardless 

of the index multiplier of the non-FLEX 

Index Option), which terms constitute the 

FLEX Option series: 

(1)–(4) No change. 

(5) settlement type: 

(A) No change. 

(B) FLEX Index Options. FLEX Index 

Options are settled in U.S. dollars, and may 

be: 

(i) No change. 

(ii) p.m.-settled (with exercise settlement 

value determined by reference to the reported 

level of the index derived from the reported 

closing prices of the component securities), 

except for a FLEX Index Option that expires 

on any business day that falls on or within 

two business days of a third Friday-of-themonth expiration day for a non-FLEX Option 

(other than a QIX option) may only be a.m.- 

settled; however, for a pilot period ending 

the earlier of [November 6, 2023] May 6, 2024 

or the date on which the pilot program is 

approved on a permanent basis, a FLEX 

Index Option with an expiration date on the 

third-Friday of the month may be p.m.- 

settled; 

(iii)–(iv) No change. 

* * * * * 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/

CBOELegalRegulatoryHome.aspx), at 

the Exchange’s Office of the Secretary, 

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 

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 

On January 28, 2010, the Securities 

and Exchange Commission (the 

‘‘Commission’’) approved a Cboe 

Options rule change that, among other 

things, established a pilot program 

regarding permissible exercise 

settlement values for FLEX Index 

Options.5 The Exchange has extended 

the pilot period numerous times, which 

is currently set to expire on the earlier 

of November 6, 2023 or the date on 

which the pilot program is approved on 

a permanent basis.6 The purpose of this 


lotter on DSK11XQN23PROD with NOTICES1