Federal Register / Vol. 89, No. 197 / Thursday, October 10, 2024 / Notices 82277 

10 15 U.S.C. 78s(b)(3)(A)(iii). 

11 17 CFR 240.19b–4(f)(6). 

12 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change at least five business 

days prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

13 15 U.S.C. 78s(b)(2)(B). 14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 80a–1 et seq. 

4See Securities Exchange Act Release No. 100460 

(July 3, 2024), 89 FR 56447 (‘‘Notice’’). Comments 

on the proposed rule change are available at: 

https://www.sec.gov/comments/sr-nyse-2024-35/ 

srnyse202435.htm. 

5 15 U.S.C. 78s(b)(2). 

6See Securities Exchange Act Release No. 

100790, 89 FR 68676 (Aug. 27, 2024). The 

Commission designated October 7, 2024, as the date 

by which the Commission shall approve or 

disapprove, or institute proceedings to determine 

whether to disapprove, the proposed rule change. 

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

the clarity and transparency of the Fee 

Schedule and alleviate possible 

customer confusion that may arise from 

the inclusion of obsolete services. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 10 and Rule 

19b–4(f)(6) thereunder.11 Because the 

proposed rule change does not: (i) 

significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) become operative 

prior to 30 days from the date on which 

it was filed, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act and Rule 19b–4(f)(6)(iii) 

thereunder.12

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

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

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

NYSENAT–2024–27 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–NYSENAT–2024–27. 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 (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–NYSENAT–2024–27 and should be 

submitted on or before October 31, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

J. Matthew DeLesDernier, 

Deputy Secretary. 

[FR Doc. 2024–23416 Filed 10–9–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101257; File No. SR–NYSE– 

2024–35] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Order 

Instituting Proceedings To Determine 

Whether To Approve or Disapprove a 

Proposed Rule Change To Amend 

Section 302.00 of the NYSE Listed 

Company Manual To Exempt ClosedEnd Funds Registered Under the 

Investment Company Act of 1940 From 

the Requirement To Hold Annual 

Shareholder Meetings 

October 4, 2024. 

I. Introduction 

On June 21, 2024, the New York Stock 

Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Exchange 

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

proposed rule change to amend Section 

302.00 of the NYSE Listed Company 

Manual (‘‘Manual’’) to exempt closedend funds registered under the 

Investment Company Act of 1940 

(‘‘1940 Act’’) 3 from the requirement to 

hold annual shareholder meetings. The 

proposed rule change was published for 

comment in the Federal Register on July 

9, 2024.4 On August 21, 2024, pursuant 

to Section 19(b)(2) of the Exchange Act,5

the Commission designated a longer 

period within which to approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether to 

disapprove the proposed rule change.6

The Commission is instituting 

proceedings pursuant to Section 

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

determine whether to approve or 

disapprove the proposed rule change. 

II. Description of the Proposed Rule 

Change 

Section 102.04 of the Manual sets 

forth listing requirements for closed-end 


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8Specifically, Section 302.00 exempts from this 

requirement companies whose only securities listed 

on the Exchange are non-voting preferred and debt 

securities, passive business organizations (such as 

royalty trusts), or securities listed pursuant to NYSE 

Rule 5.2(j)(2) (Equity Linked Notes), Rule 5.2(j)(3) 

(Investment Company Units), Rule 5.2(j)(4) (IndexLinked Exchangeable Notes), Rule 5.2(j)(5) (Equity 

Gold Shares), Rule 5.2(j)(6) (Equity-Index Linked 

Securities, Commodity-Linked Securities, CurrencyLinked Securities, Fixed Income Index-Linked 

Securities, Futures-Linked Securities and 

Multifactor Index-Linked Securities), Rule 5.2(j)(8) 

(Exchange-Traded Fund Shares), Rule 8.100 

(Portfolio Depositary Receipts), Rule 8.200 (Trust 

Issued Receipts), Rule 8.201 (Commodity-Based 

Trust Shares), Rule 8.202 (Currency Trust Shares), 

Rule 8.203 (Commodity Index Trust Shares), Rule 

8.204 (Commodity Futures Trust Shares), Rule 

8.300 (Partnership Units), Rule 8.400 (Paired Trust 

Shares), Rule 8.600 (Managed Fund Shares), Rule 

8.601 (Active Proxy Portfolio Shares), Rule 8.700 

(Managed Trust Securities), and Rule 8.900 

(Managed Portfolio Shares). 

9The Exchange lists closed-end management 

investment companies that have filed an election to 

be treated as a business development company 

under the 1940 Act (‘‘BDCs’’) under Section 

102.04B of the Manual. The Exchange is not 

proposing to exempt BDCs listed under Section 

102.04B of the Manual from the annual shareholder 

meeting requirement set forth in Section 302.00. 

10 15 U.S.C. 78s(b)(2)(B). 

11 Id. 

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

13See, e.g., Securities Exchange Act Release Nos. 

99238 (Dec. 26, 2023), 89 FR 113, 116 n.21 and 

accompanying text (Jan. 2, 2024) (SR–NYSE–2023– 

34) (Notice of Filing of Amendment No. 1 and 

Order Granting Accelerated Approval of Proposed 

Rule Change, as Modified by Amendment No. 1, 

Amending Sections 312.03(b) and 312.04 of the 

NYSE Listed Company Manual To Modify the 

Circumstances Under Which a Listed Company 

Must Obtain Shareholder Approval of a Sale of 

Securities Below the Minimum Price to a 

Substantial Security Holder of the Company); 

100816 (Aug. 26, 2024), 89 FR 70674, 70677–78 

nn.46–48 and accompanying text (Aug. 30, 2024) 

(SR–NASDAQ–2024–019) (Order Granting 

Approval of a Proposed Rule Change, to Rules 5605, 

5615 and 5810 To Amend Phase-In Schedules for 

Certain Corporate Governance Requirements and 

Applicability of Certain Cure Periods). 

14See id. 

15The Commission has stated that the right of 

shareholders to vote at an annual meeting is an 

essential and important one. See, e.g., Securities 

Exchange Act Release Nos. 86406 (July 18, 2019), 

84 FR 35431, 35432 (July 23, 2019) (SR–NYSE– 

2019–20) (Order Granting Approval of a Proposed 

Rule Change Amending Section 302 of the Listed 

Company Manual To Provide Exemptions for the 

Issuers of Certain Categories of Securities From the 

Obligation To Hold Annual Shareholders’ Meetings) 

(‘‘NYSE Order’’); 57268 (Feb. 4, 2008), 73 FR 7614, 

7616 (Feb. 8, 2008) (SR–Amex–2006–31) (Order 

Approving Proposed Rule Change, as Modified by 

Amendment Nos. 1, 2, and 3 Thereto, Relating to 

Annual Shareholder Meeting Requirements) 

(‘‘Amex Order’’). 16See, e.g., Amex Order at 7614; Securities 

Exchange Act Release No. 53578 (Mar. 30, 2006), 71 

FR 17532 (Apr. 6, 2006) (SR–NASD–2005–073) 

(Order Granting Approval of a Proposed Rule 

Change and Amendment Nos. 1 and 2 Thereto and 

Notice of Filing and Order Granting Accelerated 

Approval of Amendment No. 3 Thereto Relating to 

Rule 4350(e) To Amend the Annual Shareholder 

Meeting Requirement). 

17See NYSE Order at 35432; Amex Order at 7616. 

The Commission has also stated that where an 

exchange has exempted issuers of certain categories 

of securities from the exchange requirement to hold 

an annual meeting, such issuers would remain 

subject to any applicable state and federal securities 

laws that relate to annual meetings and may still be 

required to hold annual shareholder meetings in 

accordance with such state and federal securities 

laws. See id. In addition, such issuers would remain 

subject to state and federal securities laws that may 

require other types of shareholder meetings, such as 

special meetings of shareholders. See NYSE Order 

at 35432. The Commission has also stated that the 

exemptions apply only with respect to particular 

securities, and that if a company also lists other 

common stock or voting preferred stock, or their 

equivalent, such company must nevertheless hold 

an annual meeting for the holders of such securities 

during each fiscal year. See id. at 35433. 

18See NYSE Order at 35433 n.20. See also infra 

note 27. 19See Notice, supra note 4, at 56447. 20See id. at 56448. 

management investment companies 

registered under the 1940 Act (‘‘CEFs’’). 

Section 302.00 of the Manual (‘‘Section 

302.00’’) provides that companies listing 

common stock or voting preferred stock 

and their equivalents are required to 

hold an annual shareholders’ meeting 

for the holders of such securities during 

each fiscal year. Section 302.00 also sets 

forth certain exemptions from this 

annual shareholder meeting 

requirement.8 CEFs listed on the 

Exchange are currently required to 

comply with the Section 302.00 annual 

shareholder meeting requirement and 

are not subject to an exemption. The 

Exchange proposes to amend Section 

302.00 to exempt CEFs listed under 

Section 102.04A of the Manual from the 

requirement to hold an annual 

shareholder meeting.9

III. Proceedings To Determine Whether 

To Approve or Disapprove SR–NYSE– 

2024–35 and Grounds for Disapproval 

Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Exchange Act 10 to 

determine whether the proposed rule 

change should be approved or 

disapproved. Institution of proceedings 

is appropriate at this time in view of the 

legal and policy issues raised by the 

proposed rule change. Institution of 

proceedings does not indicate that the 

Commission has reached any 

conclusions with respect to any of the 

issues involved. 

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

Exchange Act,11 the Commission is 

providing notice of the grounds for 

disapproval under consideration. The 

Commission is instituting proceedings 

to allow for additional analysis of the 

proposed rule change’s consistency with 

the Exchange Act and, in particular, 

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

Act, which requires, among other 

things, that the rules of a national 

securities exchange be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest, and not be designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers.12

The development and enforcement of 

meaningful corporate governance 

exchange listing standards is of 

substantial importance to financial 

markets and the investing public, 

especially given investor expectations 

regarding the nature of companies that 

have achieved an exchange listing for 

their securities and the role of an 

exchange in overseeing its market and 

ensuring compliance with its listing 

standards.13 The corporate governance 

standards embodied in exchange listing 

standards play an important role in 

assuring that listed companies observe 

good governance practices.14

In particular, the Commission has 

consistently recognized the importance 

of the annual shareholder meeting 

requirement to the protection of 

investors and the public interest.15

Among other things, annual shareholder 

meetings allow the shareholders of a 

company the opportunity to elect 

directors and meet with, and engage, 

management to discuss company 

affairs.16 The Commission has 

recognized that, in limited 

circumstances, the exchange 

requirement to hold an annual 

shareholder meeting may not be 

necessary for certain issuers of specific 

types of securities where the holders of 

such securities do not directly 

participate as equity holders or vote in 

the annual election of directors or 

generally on the operations or policies 

of the listed company.17 However, when 

approving a prior Exchange proposal for 

specific exemptions from the annual 

shareholder meeting requirement, 

which included an exemption for 

exchange-traded funds (‘‘ETFs’’), the 

Commission expressly stated that CEFs 

are still required to hold annual 

meetings under Section 302.00.18

The Exchange states in support of its 

current proposal that there are 

significant differences between listed 

CEFs and listed operating companies 

that justify also exempting listed CEFs 

from the Exchange’s annual meeting 

requirement.19 In particular, the 

Exchange states that there are significant 

statutory protections under the 1940 Act 

provided to the shareholders of CEFs,20


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21See id. at 56447. 22The term ‘‘interested person’’ is defined in 

Section 2(a)(19) of the 1940 Act, 15 U.S.C. 80a– 

2(a)(19). 

23See Notice, supra note 4, at 56447. 

24See id. at 56447–48. 

25See id. at 56448. 

26See id. 

27See id. When justifying its prior proposal to 

exempt NYSE-Listed ETFs from the annual 

shareholder meeting requirement of Section 302.00, 

the Exchange stated, among other things, that the 

net asset value (‘‘NAV’’) of such products is 

determined by the market price of each fund’s 

underlying securities or other reference asset; and 

that because shareholders can value their 

investments in such products on an ongoing basis, 

the Exchange believes that there is less need for 

such shareholders to engage management at an 

annual meeting. See Securities Exchange Act 

Release No. 85889 (May 17, 2019), 84 FR 23815, 

23816 (May 23, 2019) (SR–NYSE–2019–20) (Notice 

of Filing of Proposed Rule Change Amending 

Section 302 of the Listed Company Manual To 

Provide Exemptions for the Issuers of Certain 

Categories of Securities From the Obligation To 

Hold Annual Shareholders’ Meetings). See also 

NYSE Order at 35432. 

28See, e.g., Letters from Paul G. Cellupica, 

General Counsel, and Kevin Ercoline, Assistant 

General Counsel, Investment Company Institute, 

dated July 30, 2024 (‘‘ICI Letter’’); Investment 

Adviser Association, Securities Industry and 

Financial Markets Association (‘‘SIFMA’’), SIFMA’s 

Asset Management Group, and Insured Retirement 

Institute, dated July 30, 2024 (‘‘SIFMA et al Letter’’); 

Bruce Leto and Sara Crovitz, Stradley Ronon 

Stevens & Young, LLP, dated July 30, 2024 

(‘‘Stradley Ronon Letter’’); Joseph V. Amato, 

President and Chief Investment Officer, Equities, 

Neuberger Berman Group LLC, dated July 30, 2024 

(‘‘Neuberger Berman Letter’’); John McCann, 

Managing Director, Associate General Counsel, 

Teachers Insurance and Annuity Association of 

America (‘‘TIAA’’) and TIAA’s asset management 

affiliate Nuveen, LLC, dated July 30, 2024 (‘‘TIAA 

Letter’’); George F. Magera, General Counsel, 

Federated Hermes, Inc., dated July 31, 2024 

(‘‘Federated Hermes Letter’’). 

29See, e.g., ICI Letter at 7–9; SIFMA et al Letter 

at 2–3. 

30See, e.g., ICI Letter at 9–13; Letter Type A at 

https://www.sec.gov/comments/sr-nyse-2024-35/ 

srnyse202435.htm; Federated Hermes Letter at 1. 

31See, e.g., ICI Letter at 1 and 9; SIFMA et al 

Letter at 2; Stradley Ronon Letter at 3. 

32See, e.g., ICI Letter at 2–3, 17–24; Neuberger 

Berman Letter at 1–2; Federated Hermes Letter at 

1–2; Stradley Ronon Letter at 1–2; TIAA Letter at 

2. 

33See, e.g., ICI Letter at 13–14; Neuberger Berman 

Letter at 1–2; Federated Hermes Letter at 1–2; 

Stradley Ronon Letter at 2; TIAA Letter at 2. 

34See, e.g., ICI Letter at 14–15; Federated Hermes 

Letter at 2; Letter from George W. Morriss, dated 

July 31, 2024. 

35See, e.g., Letters from Paul N. Roth, Founding 

Partner Emeritus, Of Counsel, Schulte Roth & Zabel 

LLP, dated July 30, 2024 (‘‘Schulte Letter’’); Michael 

D’Angelo, Saba Capital Management, LP, dated July 

30, 2024 (‘‘Saba Letter’’); Profs. Lucian A. Bebchuk, 

Harvard Law School, and Robert J. Jackson, Jr., NYU 

School of Law, dated July 30, 2024 (‘‘Bebchuk & 

Jackson Letter’’); Profs. Daniel J. Taylor, The 

Wharton School, Edwin Hu, UVA School of Law, 

Robert Bishop, Duke School of Law, Bradford Levy, 

Chicago Booth School of Business, Shiva Rajgopal, 

Columbia Business School, and Jonathan Zytnick, 

Georgetown University Law Center, on behalf of the 

Working Group on Market Efficiency and Investor 

Protection in Closed-End Funds, dated July 30, 

2024 (‘‘Working Group Letter’’); Bryce A. Doty, 

Senior Portfolio Manager, Sit Investment 

Associates, dated July 29, 2024 (‘‘Sit Letter’’); 

Phillip Goldstein, Managing Partner, Bulldog 

Investors, LLP, dated July 30, 2024 (‘‘Bulldog 

Letter’’); Aaron T. Morris, Partner, Morris 

Kandinov, dated July 29, 2024 (‘‘Morris Kandinov 

Letter’’); John Y. Park, dated July 29, 2024 (‘‘Park 

Letter’’). 

36See, e.g., Schulte Letter at 2; Bulldog Letter at 

1–2. 37See, e.g., Morris Kandinov Letter at 2–6; Saba 

Letter at 8–9. 38See, e.g., Bebchuk & Jackson Letter at 5–7; Sit 

Letter at 1–2; Letter from Thomas DeCapo, dated 

July 29, 2024. 39See, e.g., Working Group Letter at 3; Schulte 

Letter at 4. 40See, e.g., Bebchuk & Jackson Letter at 5–6; Park 

Letter; Letters from 1607 Capital Partners, LLC, 

dated July 30, 2024 (‘‘1607 Letter’’); Jon Fenn, dated 

July 16, 2024. 41See, e.g., Bebchuk & Jackson Letter at 7–8; 

Working Group Letter at 3; Letters from Ronald 

Mass, Chief Investment Officer, Almitas Capital, 

dated July 30, 2024, at 2; Andrew Gadlin, dated July 

30, 2024. 42A commenter stated that the current annual 

shareholder meeting mechanism has both a direct 

effect (e.g., replacing existing fund directors) and 

indirect effect (e.g., the fear of potential 

replacement gives incumbent CEF directors 

incentive to avoid underperformance altogether); 

and that approval of NYSE’s proposal would 

produce two types of entrenchment costs from the 

elimination of these direct and indirect effects. See 

Bebchuk & Jackson Letter at 7–8 and 10–11. 

43See, e.g., Working Group Letter at 5. 

44See, e.g., Working Group Letter at 6; Saba Letter 

at 1, 2, and 7 n.20; Sit Letter at 2. 

45See, e.g., Sit Letter at 2–3; Bebchuk & Jackson 

Letter at 8–9. 

46See, e.g., Working Group Letter at 5; Schulte 

Letter at 6–7 and n.28; Saba Letter at 2. 

including requirements with respect to 

the election of directors by CEF 

shareholders,21 a requirement that 

directors who are not ‘‘interested 

persons’’ 22 comprise at least 40% of the 

board,23 requirements that certain 

specified material matters be approved 

by a majority of the directors who are 

not ‘‘interested persons,’’ 24 and 

requirements that certain specified 

material matters be approved by the 

shareholders.25 The Exchange states that 

there are no parallel legal protections for 

the shareholders of public operating 

companies.26 The Exchange also states 

that all of the categories of investment 

companies for which the Exchange has 

listing standards other than CEFs are 

already exempt from the annual 

shareholder meeting requirement of 

Section 302.00 (such exempted 

investment companies, ‘‘NYSE-Listed 

ETFs’’).27

The Commission received comments 

supporting the proposal.28 Some 

commenters stated that Congress 

adopted the 1940 Act protections 

referenced by NYSE in lieu of an annual 

shareholder meeting requirement.29

Some commenters agreed with NYSE 

that 1940 Act requirements, such as 

those pertaining to director elections, 

directors who are not ‘‘interested 

persons,’’ and matters that require 

shareholder vote, protect CEF 

investors; 30 and some stated that the 

1940 Act requirements rendered NYSE’s 

annual shareholder meeting 

requirement ‘‘superfluous.’’ 31 Some 

commenters also claimed that certain 

investors exploit the current annual 

shareholder meeting requirement for 

their own gain—for example, by 

launching a proxy campaign to change 

a CEF’s management and/or investment 

strategy, to conduct tender offers, or to 

liquidate the CEF altogether.32 These 

commenters stated that annual meetings 

allow a minority investor to have an 

outsized influence over the CEF that 

results in harm to long-term retail 

investors in the CEF and disincentivizes 

the creation of new listed CEFs.33 Some 

commenters also stated that annual 

shareholder meetings are costly to CEFs 

and that retail investor engagement at 

such meetings is limited, and concluded 

that the burden of the annual 

shareholder meeting requirement 

outweighs any potential benefits.34

The Commission also received 

comments opposing the proposal.35

Some commenters stated that the 1940 

Act requirements referenced by the 

Exchange were adopted in addition to 

the Exchange’s pre-existing annual 

shareholder meeting requirement, rather 

than in lieu of it,36 and some stated that 

the 1940 Act requirements are not a 

substitute for annual shareholder 

meetings.37 Some commenters stated 

that CEFs are fundamentally different 

from other registered investment 

companies, including NYSE-Listed 

ETFs.38 In particular, commenters stated 

that CEFs commonly trade at a discount 

to NAV,39 and claimed that the inability 

of CEF investors to redeem shares at 

NAV makes CEF investors more 

vulnerable to actions by CEF 

management.40 Commenters stated that, 

in light of these unique features of CEFs, 

annual meetings are an important tool to 

discipline CEF management.41

Commenters also stated that elimination 

of NYSE’s annual shareholder meeting 

requirement would harm CEF investors 

by reducing opportunities for 

shareholder activism (or the threat of 

such activism); 42 further entrenching 

CEF management; 43 potentially 

increasing CEFs’ discounts to NAV; 44

and effectively disenfranchising CEF 

investors due to the infrequency with 

which shareholder meetings would be 

required under the 1940 Act 45 and the 

difficulty for shareholders to requisition 

special meetings.46 Commenters also 

described other benefits of annual 

shareholder meetings to CEF investors, 

such as providing accountability, 


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47See, e.g., 1607 Letter; Letters from Andrew Park 

on behalf of the Americans for Financial Reform 

Education Fund, dated July 30, 2024, at 2–3; 

Michael Foster, dated July 16, 2024; James Gould, 

dated Aug. 6, 2024. 

48See, e.g., Schulte Letter at 4; Saba Letter at 2; 

Bebchuk & Jackson Letter at 12. 

49 15 U.S.C. 78f(b)(5). 

50See NYSE Order, supra note 15. 

51See Securities Act Release No. 10695, 

Investment Company Act Release No. 33646, S7– 

15–18 (Sept. 25, 2019), 84 FR 57162, 57165 (Oct. 

24, 2019) (Exchange-Traded Funds Final Rule) 

(‘‘The combination of the creation and redemption 

process with secondary market trading in ETF 

shares and underlying securities provides arbitrage 

opportunities that are designed to help keep the 

market price of ETF shares at or close to the NAV 

per share of the ETF.’’). See also supra note 27. 

52Under the Commission’s Rules of Practice, the 

‘‘burden to demonstrate that a proposed rule change 

is consistent with the Exchange Act and the rules 

and regulations issued thereunder . . . is on the 

self-regulatory organization that proposed the rule 

change.’’ 17 CFR 201.700(b)(3). The description of 

a proposed rule change, its purpose and operation, 

its effect, and a legal analysis of its consistency with 

applicable requirements must all be sufficiently 

detailed and specific to support an affirmative 

Commission finding, and any failure of a selfregulatory organization to provide this information 

may result in the Commission not having a 

sufficient basis to make an affirmative finding that 

a proposed rule change is consistent with the 

Exchange Act and the applicable rules and 

regulations. Id. 

53 15 U.S.C. 78f(b)(5). 

54 15 U.S.C. 78s(b)(2)(B). 

55 15 U.S.C. 78f(b)(5). 

56 17 CFR 240.19b–4. 

57Section 19(b)(2) of the Exchange Act, as 

amended by the Securities Acts Amendments of 

1975, Public Law 94–29 (June 4, 1975), grants to the 

Commission flexibility to determine what type of 

proceeding—either oral or notice and opportunity 

for written comments—is appropriate for 

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

Amendments of 1975, Senate Comm. on Banking, 

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

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

transparency, and a forum for 

shareholders to voice concerns; 47 and 

expressed concern with the removal of 

a right (required annual shareholder 

meetings) that shareholders may have 

relied upon when investing in CEFs.48

The Commission has concerns about 

whether NYSE’s proposal to exempt 

CEFs listed under Section 102.04A of 

the Manual from the annual shareholder 

meeting requirement set forth in Section 

302.00 is designed to protect investors 

and the public interest, as required by 

Section 6(b)(5) of the Exchange Act.49

Although the Commission previously 

approved a similar exemption for NYSEListed ETFs,50 there are important 

differences between CEFs and ETFs. 

Shares of CEFs often trade at prices that 

are less than, or at a ‘‘discount’’ to, the 

funds’ NAV per share. In contrast, while 

ETFs may trade at a discount, it is often 

to a much lesser degree than CEFs.51

Due to these circumstances, 

shareholders of CEFs may have an 

interest in expressing their views at 

annual shareholder meetings. 

Moreover, the Commission has 

concerns with the sufficiency of the 

Exchange’s analysis and whether the 

Exchange has met its burden to 

demonstrate that its proposal is 

consistent with the Exchange Act.52 The 

Exchange states that NYSE-Listed ETFs 

are already exempt from the annual 

shareholder meeting requirement of 

Section 302.00. However, the Exchange 

does not discuss or explain the 

differences between NYSE-Listed ETFs 

and CEFs, which differences, as 

discussed above, may result in investor 

protection concerns for CEF 

shareholders with respect to eliminating 

the right to an annual shareholder 

meeting that may not be present for 

NYSE-Listed ETFs’ shareholders. For 

example, the Exchange does not discuss 

whether the fact that CEF shares may 

trade at a large discount to NAV would 

raise any investor protection concerns 

with eliminating the annual shareholder 

meeting requirement. The Exchange also 

does not discuss the extent to which 

CEF investors participate in, and benefit 

from, annual shareholder meetings, 

such that eliminating the annual 

shareholder meeting requirement may 

raise investor protection concerns. In 

addition, while the Exchange discusses 

how certain requirements set forth in 

the 1940 Act are designed to protect 

CEF investors and the public interest, 

the Exchange does not discuss how its 

specific proposal to exempt CEFs from 

the Exchange’s longstanding annual 

shareholder meeting requirement—and 

any resulting loss of benefits to CEF 

investors of annual shareholder 

meetings—would be designed to protect 

CEF investors and the public interest. 

As a result, the Commission believes 

there are questions as to whether the 

proposal is consistent with Section 

6(b)(5) of the Exchange Act 53 and its 

requirement, among other things, that 

the rules of a national securities 

exchange be designed to protect 

investors and the public interest. For 

this reason, it is appropriate to institute 

proceedings pursuant to Section 

19(b)(2)(B) of the Exchange Act 54 to 

determine whether the proposal should 

be approved or disapproved. 

IV. Procedure: Request for Written 

Comments 

The Commission requests that 

interested persons provide written 

submissions of their data, views, and 

arguments with respect to the issues 

identified above, as well as any other 

concerns they may have with the 

proposal. In particular, the Commission 

invites the written views of interested 

persons concerning whether the 

proposed rule change is consistent with 

Section 6(b)(5) of the Exchange Act 55 or 

any other provision of the Exchange 

Act, or the rules and regulations 

thereunder. Although there do not 

appear to be any issues relevant to 

approval or disapproval that would be 

facilitated by an oral presentation of 

data, views, and arguments, the 

Commission will consider, pursuant to 

Rule 19b–4 under the Exchange Act,56

any request for an opportunity to make 

an oral presentation.57

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposed rule change should be 

approved or disapproved by October 31, 

2024. Any person who wishes to file a 

rebuttal to any other person’s 

submission must file that rebuttal by 

November 14, 2024. The Commission 

asks that commenters address the 

sufficiency of the Exchange’s statements 

in support of the proposal, in addition 

to any other comments they may wish 

to submit about the proposed rule 

change. Comments may be submitted by 

any of the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

NYSE–2024–35 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–2024–35. 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 (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 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 89, No. 197 / Thursday, October 10, 2024 / Notices 82281 

58 17 CFR 200.30–3(a)(57). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4Through its Fixed Income and Data Services 

(‘‘FIDS’’) (previously ICE Data Services) business, 

Intercontinental Exchange, Inc. (‘‘ICE’’) operates the 

MDC. The Exchange and NYSE American LLC, 

NYSE Arca, Inc., NYSE Chicago, Inc. and NYSE 

National, Inc. (together, the ‘‘Affiliate SROs’’) are 

indirect subsidiaries of ICE. 

5See Securities Exchange Act Release No. 99165 

(December 13, 2023), 88 FR 87832 (December 19, 

2023) (SR–NYSE–2023–48). 

6For purposes of the Exchange’s colocation 

services, a ‘‘User’’ means any market participant 

that requests to receive colocation services directly 

from the Exchange. See Securities Exchange Act 

Release No. 76008 (September 29, 2015), 80 FR 

60190 (October 5, 2015) (SR–NYSE–2015–40). As 

specified in the Fee Schedule, a User that incurs 

colocation fees for a particular colocation service 

pursuant thereto would not be subject to colocation 

fees for the same colocation service charged by 

NYSE American LLC, NYSE Arca, Inc., NYSE 

Chicago, Inc. and NYSE National, Inc. (together, the 

‘‘Affiliate SROs’’). Each Affiliate SRO has submitted 

substantially the same proposed rule change to 

propose the changes described herein. See SR– 

NYSEAMER–2024–59, SR–NYSEARCA–2024–81, 

SR–NYSECHX–2024–30, and SR–NYSENAT–2024– 

27. 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 

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–2024–35 and should be 

submitted on or before October 31, 

2024. Rebuttal comments should be 

submitted by November 14, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.58

J. Matthew DeLesDernier, 

Deputy Secretary. 

[FR Doc. 2024–23417 Filed 10–9–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101248; File No. SR–NYSE– 

2024–61] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend the 

Connectivity Fee Schedule 

October 4, 2024. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on 

September 20, 2024, 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 and II 

below, which Items have been prepared 

by the self-regulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

Connectivity Fee Schedule (‘‘Fee 

Schedule’’) to delete the currently-filed 

‘‘Optic Low Latency Circuit—1 Gb’’ 

service as obsolete. The proposed rule 

change is available on the Exchange’s 

website at www.nyse.com, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

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

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend the 

Connectivity Fee Schedule (‘‘Fee 

Schedule’’) to delete the currently-filed 

‘‘Optic Low Latency Circuit—1 Gb’’ 

service as obsolete. 

In 2023, the Exchange filed to amend 

the Fee Schedule to add several ‘‘FIDS 

Circuits’’ available at the Mahwah, New 

Jersey data center (‘‘MDC’’),4 including 

Optic Low Latency Circuits in 1 Gb, 10 

Gb, and 40 Gb sizes.5

Since that time, no Users 6 have opted 

to utilize the 1 Gb Optic Low Latency 

Circuit. Some market participants have 

informed the Exchange that the 1 Gb 

size of the Optic Low Latency Circuit is 

too small for their needs. Because there 

is no customer demand for the 1 Gb 

Optic Low Latency Circuit, the 

Exchange proposes to discontinue the 

service as obsolete. 

General 

The proposed changes would not 

apply differently to distinct types or 

sizes of market participants; rather, they 

would apply to all Users equally. As is 

currently the case, the Fee Schedule 

would be applied uniformly to all Users. 

The proposed changes are not intended 

to address any other issues and the 

Exchange is not aware of any problems 

that Users would have in complying 

with the proposed change. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,7 in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act,8 in particular, because it is 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

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 because it is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Exchange believes that 

discontinuing offering the 1 Gb Optic 

Low Latency Circuit would perfect the 

mechanisms of a free and open market 

and a national market system and, in 

general, protect investors and the public 

interest. Demand for the 1 Gb Optic Low 

Latency Circuit is non-existent and 

there are currently no customers that 

subscribe to the service. The Exchange 

does not expect demand to rebound 

given customers’ assessment that the 1 

Gb-size of the circuit is too small for 

their needs. Removing references to the 

fees for this obsolete service from the 

Fee Schedule would make the Fee 

Schedule easier to read, understand, 

and administer. 

The Exchange believes that the 

proposed rule change does not 

significantly affect the protection of 

investors or the public interest. The 

proposed rule change would delete an 

obsolete service from the Fee Schedule, 


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