[Federal Register Volume 89, Number 200 (Wednesday, October 16, 2024)]
[Notices]
[Pages 83527-83529]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-23803]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101295; File No. SR-NYSE-2024-44]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change To Adopt a Provision That the 
Exchange Will Not Review a Compliance Plan Submitted by a Listed 
Company That Is Below Compliance With a Continued Listing Standard if 
the Company Owes Any Unpaid Fees to the Exchange and Will Instead 
Immediately Commence Suspension and Delisting Procedures if Such Fees 
Are Not Paid in Full

October 9, 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 27, 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, 
II, and III below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to adopt a provision that the Exchange will 
not review a compliance plan submitted by a listed company that is 
below compliance with a continued listing standard if the company owes 
any unpaid fees to the Exchange and will instead immediately commence 
suspension and delisting procedures if such fees are not paid in full 
by the plan submission deadline or at the time of any required periodic 
review of such plan. The text of the proposed rule change is set forth 
in Exhibit 5 attached hereto. 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
    Section 802.02 (``Evaluation and Follow-Up Procedures for Domestic 
Companies'') of the NYSE Listed Company Manual (``Manual'') provides 
that when the Exchange identifies a domestic listed company as being 
below certain continued listing criteria set forth in Section 802.01 of 
the Manual (and not able to otherwise qualify under an original listing 
standard), the Exchange will notify the company of such noncompliance 
by letter and provide the company with an opportunity to provide the 
Exchange with a plan (the ``Plan'') advising the Exchange of definitive 
action the company has taken, or is taking, that would bring it into 
conformity with continued listing standards within 18 months of receipt 
of the letter. Similarly, Section 802.03 (``Continued Listing--
Evaluation and Follow-up Procedures for Non-U.S. Companies'') sets 
forth provisions under which non-U.S. listed companies can submit a 
Plan to cure noncompliance with continued listing standards.
    If a company submits a Plan pursuant to Sections 802.02 or 802.03, 
it must identify specific quarterly or semi-annual milestones against 
which the Exchange will evaluate the company's progress. The company 
has 45 days (in the case of a domestic company subject to Section 
802.02) (the ``Domestic Plan Deadline'') or 90 days (in the case of a 
non-U.S. company subject to Section 802.03) (the ``Non-U.S. Plan 
Deadline'' and, together with the Domestic Plan Deadline, the ``Plan 
Deadline'') from the receipt of a letter from the Exchange identifying 
an event of noncompliance to submit its Plan to the Exchange for 
review; otherwise, suspension and delisting procedures will commence in 
accordance with Section 804.00 of the Manual. The Plan must demonstrate 
how the company will return to compliance with the applicable continued 
listing standard by the end of the Plan period. All companies 
submitting a Plan must include

[[Page 83528]]

quarterly financial projections, details related to any strategic 
initiatives the company plans to complete, and market performance 
support. Exchange staff will evaluate the Plan, including any 
additional documentation that supports the Plan, and make a 
determination as to whether the company has made a reasonable 
demonstration in the Plan of an ability to come into conformity with 
the relevant standard(s) within 18 months. The Exchange will make such 
determination within 45 days of receipt of the proposed Plan, and will 
promptly notify the company of its determination in writing.
    If the Exchange accepts the Plan, the Exchange will review the 
company for compliance with the Plan on either a quarterly basis (in 
the case of a domestic company) or a semi-annual basis (in the case of 
a non-U.S. company). If the company fails to meet the material aspects 
of the Plan or any of the quarterly or semi-annual milestones, the 
Exchange will review the circumstances and variance, and determine 
whether such variance warrants commencement of suspension and delisting 
procedures. Should the Exchange determine to proceed with suspension 
and delisting procedures in accordance with Section 804.00, it may do 
so regardless of the company's continued listing status at that time. 
The Exchange will deem the Plan period over prior to the end of the 18 
months if a company is able to demonstrate returning to compliance with 
the applicable continued listing standards, or achieves the ability to 
qualify under an original listing standard, for a period of two 
consecutive quarters. In any event, a company that does not meet 
continued listing standards at the end of the 18-month period, will be 
subject to the prompt initiation of suspension and delisting procedures 
in accordance with Section 804.00.
    The Exchange staff has to undertake a significant amount of work in 
reviewing and analyzing each Plan submitted by a noncompliant company. 
In addition, the review of quarterly or semi-annual updates with 
respect to each Plan requires significant additional work by Exchange 
staff. Given the significant work required to review and analyze Plans, 
as well as to undertake the required quarterly or semi-annual review 
with respect to a Plan, the Exchange believes it is especially 
important to ensure that companies that wish to have a Plan accepted or 
continued by the Exchange have paid all outstanding annual and listing 
fees (as set forth in the Manual in Section 902.00 et seq.\4\) prior to 
the acceptance of a Plan or any required periodic review of such Plan. 
As such, the Exchange proposes to amend Sections 802.02 and 802.03 of 
the Manual to provide that a listed company seeking acceptance of a 
Plan must pay all outstanding annual and listing fees to the Exchange 
by the Plan Deadline and that failure to do so will result in the 
immediate commencement of suspension and delisting proceedings in 
accordance with Section 804.00. Similarly, the Exchange proposes to 
amend Sections 802.02 and 802.03 to provide that a Plan will be 
truncated and immediate suspension and delisting procedures will 
commence if the listed company has not paid all outstanding annual and 
listing fees to the Exchange at the time of any quarterly or semi-
annual review of such Plan.
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    \4\ The listing fees and annual fees for all categories of 
listed securities are set forth in Section 902.00 et seq.
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    Section 802.01D of the Manual provides that the Exchange may in its 
sole discretion subject a listed company to the procedures outlined in 
Sections 802.02 and 802.03 (or commence immediate suspension and 
delisting procedures) if the company has ``violated'' any of its 
agreements with the Exchange or in the event of a ``breach by the 
company of the terms of its listing agreement.'' The Exchange notes 
that the NYSE listing agreement includes an agreement by the listing 
applicant to ``pay when due all fees associated with its listing of 
securities on the Exchange, in accordance with the Exchange's rules.''
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\5\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act \6\ in particular, in that it 
is designed to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest 
and is not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes the proposed rule change furthers the 
protection of investors in that it will help the Exchange to ensure 
that it has sufficient resources to fund its regulatory activities 
relating to the review and approval and the ongoing monitoring of Plans 
submitted by companies that are below continued listing standards.
    The Exchange does not believe that the proposed requirement is 
unfairly discriminatory as it would only require listed companies to 
pay fees that were already due and payable and ensure payment of those 
fees in connection with a process that is resource-intensive and costly 
for the Exchange. In addition, the Exchange notes that Section 802.03 
provides non-U.S. companies with 90 days from the receipt of notice of 
non-compliance to submit a Plan to the Exchange, while Section 802.02 
provides domestic companies with only a 45-day period to do so. In 
addition, Section 802.03 subjects non-U.S. companies to a semi-annual 
review during any ongoing Plan process, while Section 802.02 subjects 
domestic companies to a quarterly review process. In light of this 
existing distinction in the rules, the Exchange believes it is not 
discriminatory to give non-compliant non-U.S. companies a period to pay 
overdue fees in connection with any initial Plan acceptance or 
continuing Plan review that is consistent with the provisions 
applicable to non-U.S. companies set forth in Section 802.03 rather 
than the provisions applicable to domestic companies set forth in 
Section 802.02.
    The Exchange believes that the proposal is consistent with Section 
6(b)(7) of the Act,\7\ in that it provides a fair procedure for the 
prohibition or limitation by the Exchange of the continued listing of 
listed companies. Specifically, the Exchange believes it is fair to 
require listed companies to pay all outstanding listing and annual fees 
before the Exchange approves a Plan or required periodic review of a 
Plan, as listed companies are already required by Exchange rules (as 
set forth in Section 902.00 et seq.) and their listing agreements to 
pay these fees when due and the Exchange has the authority under 
Section 802.01D to delist companies for violations of their agreements 
with the Exchange, including their listing agreements. In addition, the 
Exchange notes that the Plan acceptance and periodic review process 
requires significant incremental work on the part of Exchange staff.
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    \7\ 15 U.S.C. 78f(b)(7).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose

[[Page 83529]]

any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange notes that the 
proposed amendments would simply require listed companies to pay fees 
to the Exchange that were already due and payable under applicable 
Exchange rules and the issuer's listing agreement. Specifically, the 
Exchange believes it is fair to require listed companies to pay all 
outstanding listing and annual fees before the Exchange approves a Plan 
or required periodic review of a Plan, as listed companies are already 
required by Exchange rules (as set forth in Section 902.00 et seq.) and 
their listing agreements to pay these fees when due and the Exchange 
has the authority under Section 802.01D to delist companies for 
violations of their agreements with the Exchange, including their 
listing agreements. In addition, the Exchange notes that the Plan 
acceptance and periodic review process requires significant incremental 
work on the part of Exchange staff.
    As the proposal would not result in any change in the cost of a 
listing on the Exchange, the Exchange does not believe that it imposes 
any additional burden on competition.

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

    <bullet> Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#87f5f2ebe2aae4e8eaeae2e9f3f4c7f4e2e4a9e0e8f1"><span class="__cf_email__" data-cfemail="3042455c551d535f5d5d555e4443704355531e575f46">[email protected]</span></a>. Please include 
file number SR-NYSE-2024-44 on the subject line.

Paper Comments

    <bullet> Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to file number SR-NYSE-2024-44. 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-NYSE-2024-44 and should be 
submitted on or before November 6, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-23803 Filed 10-15-24; 8:45 am]
BILLING CODE 8011-01-P


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