[Federal Register Volume 89, Number 197 (Thursday, October 10, 2024)]
[Notices]
[Pages 82277-82281]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-23417]


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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 Closed-End 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 closed-end 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 80a-1 et seq.
    \4\ See 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).
    \6\ See 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).
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II. Description of the Proposed Rule Change

    Section 102.04 of the Manual sets forth listing requirements for 
closed-end

[[Page 82278]]

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\
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    \8\ Specifically, 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) (Index-Linked Exchangeable Notes), Rule 
5.2(j)(5) (Equity Gold Shares), Rule 5.2(j)(6) (Equity-Index Linked 
Securities, Commodity-Linked Securities, Currency-Linked 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).
    \9\ The 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.
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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.
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    \10\ 15 U.S.C. 78s(b)(2)(B).
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    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\
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    \11\ Id.
    \12\ 15 U.S.C. 78f(b)(5).
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    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\
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    \13\ See, 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).
    \14\ See id.
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    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\
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    \15\ The 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'').
    \16\ See, 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).
    \17\ See 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.
    \18\ See NYSE Order at 35433 n.20. See also infra note 27.
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    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\

[[Page 82279]]

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\
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    \19\ See Notice, supra note 4, at 56447.
    \20\ See id. at 56448.
    \21\ See id. at 56447.
    \22\ The term ``interested person'' is defined in Section 
2(a)(19) of the 1940 Act, 15 U.S.C. 80a-2(a)(19).
    \23\ See Notice, supra note 4, at 56447.
    \24\ See id. at 56447-48.
    \25\ See id. at 56448.
    \26\ See id.
    \27\ See 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.
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    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\
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    \28\ See, 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'').
    \29\ See, e.g., ICI Letter at 7-9; SIFMA et al Letter at 2-3.
    \30\ See, 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.
    \31\ See, e.g., ICI Letter at 1 and 9; SIFMA et al Letter at 2; 
Stradley Ronon Letter at 3.
    \32\ See, 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.
    \33\ See, 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.
    \34\ See, e.g., ICI Letter at 14-15; Federated Hermes Letter at 
2; Letter from George W. Morriss, dated July 31, 2024.
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    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,

[[Page 82280]]

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\
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    \35\ See, 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'').
    \36\ See, e.g., Schulte Letter at 2; Bulldog Letter at 1-2.
    \37\ See, e.g., Morris Kandinov Letter at 2-6; Saba Letter at 8-
9.
    \38\ See, e.g., Bebchuk & Jackson Letter at 5-7; Sit Letter at 
1-2; Letter from Thomas DeCapo, dated July 29, 2024.
    \39\ See, e.g., Working Group Letter at 3; Schulte Letter at 4.
    \40\ See, 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.
    \41\ See, 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.
    \42\ A 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.
    \43\ See, e.g., Working Group Letter at 5.
    \44\ See, e.g., Working Group Letter at 6; Saba Letter at 1, 2, 
and 7 n.20; Sit Letter at 2.
    \45\ See, e.g., Sit Letter at 2-3; Bebchuk & Jackson Letter at 
8-9.
    \46\ See, e.g., Working Group Letter at 5; Schulte Letter at 6-7 
and n.28; Saba Letter at 2.
    \47\ See, 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.
    \48\ See, e.g., Schulte Letter at 4; Saba Letter at 2; Bebchuk & 
Jackson Letter at 12.
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    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 NYSE-Listed 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.
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    \49\ 15 U.S.C. 78f(b)(5).
    \50\ See NYSE Order, supra note 15.
    \51\ See 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.
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    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.
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    \52\ Under 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 self-regulatory 
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.
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    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.
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    \53\ 15 U.S.C. 78f(b)(5).
    \54\ 15 U.S.C. 78s(b)(2)(B).
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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\
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    \55\ 15 U.S.C. 78f(b)(5).
    \56\ 17 CFR 240.19b-4.
    \57\ Section 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 self-regulatory organization. See Securities Acts Amendments of 
1975, Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 
75, 94th Cong., 1st Sess. 30 (1975).
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    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

    <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#7200071e175f111d1f1f171c0601320117115c151d04"><span class="__cf_email__" data-cfemail="681a1d040d450b0705050d061c1b281b0d0b460f071e">[email protected]</span></a>. Please include 
file number SR-NYSE-2024-35 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-2024-35. 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

[[Page 82281]]

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\
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    \58\ 17 CFR 200.30-3(a)(57).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-23417 Filed 10-9-24; 8:45 am]
BILLING CODE 8011-01-P


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