87668 Federal Register / Vol. 89, No. 213 / Monday, November 4, 2024 / Notices 

16 15 U.S.C. 78s(b)(3)(A). 

17 17 CFR 240.19b–4(f). 

18 17 CFR 200.30–3(a)(12). 

1Order Granting the New York Stock Exchange, 

Inc.’s (n/k/a the New York Stock Exchange LLC) 

Application for an Exemption Pursuant to Section 

36 of the Securities Exchange Act of 1934, Release 

No. 34–54766 (Nov. 16, 2006) [71 FR 67657 (Nov. 

22, 2006)]. 

2 15 U.S.C. 78mm. Section 36(a)(1) of the 

Exchange Act gives the Commission the authority 

to exempt any person, security or transaction or any 

class or classes of persons, securities or 

transactions, conditionally or unconditionally, from 

any Exchange Act provision by rule, regulation or 

order, to the extent that the exemption is necessary 

or appropriate in the public interest and consistent 

with the protection of investors. 

3 15 U.S.C. 78a et seq. 

4 17 CFR 240.0–12. Exchange Act Rule 0–12 sets 

forth the procedures for filing applications for 

orders for exemptive relief pursuant to Section 36. 

5 15 U.S.C. 78l(a). 

6See 2006 Exemption, supra note 1. See also 

Letter from Mary Yeager, New York Stock 

Exchange, to Jonathan G. Katz, Secretary, Securities 

and Exchange Commission, dated May 26, 2005 

(NYSE’s request for exemptive relief); Notice of an 

Application of the New York Stock Exchange, Inc. 

for an Exemption Pursuant to Section 36 of the 

Securities Exchange Act of 1934 and Request for 

Comment, Release No. 34–51998 (July 8, 2005) [70 

FR 40748 (July 14, 2005)]. 

7The NYSE’s application for exemptive relief is 

included as an Appendix to this release. 

8 15 U.S.C. 78l(b). 

9An exempted security may be traded on a 

national securities exchange absent Exchange Act 

registration. Section 3(a)(12) of the Exchange Act 

[15 U.S.C. 78c(a)(12)] defines exempted security to 

include securities such as government securities, 

municipal securities, various trust fund interests, 

pooled income fund interests and church plan 

interests. 

of the Act 16 and paragraph (f) of Rule 

19b–4 17 thereunder. At any time within 

60 days of the filing of the 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 will institute proceedings 

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– 

CboeBZX–2024–104 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-CboeBZX–2024–104. 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–CboeBZX–2024–104 and should be 

submitted on or before November 25, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–25535 Filed 11–1–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101468; File No. S7–2024– 

07] 

Notice of an Application of the New 

York Stock Exchange LLC for an 

Exemption Pursuant to Section 36 of 

the Securities Exchange Act of 1934 

and Request for Comment 

October 29, 2024. 

On April 12, 2024, the Securities and 

Exchange Commission (the 

‘‘Commission’’) received an application 

from the New York Stock Exchange LLC 

(the ‘‘NYSE’’) to amend an exemption 

granted to the NYSE on November 16, 

2006 (the ‘‘2006 Exemption’’) 1 pursuant 

to Section 36 2 of the Securities 

Exchange Act of 1934 (the ‘‘Exchange 

Act’’),3 in accordance with the 

procedures set forth in Exchange Act 

Rule 0–12.4 The 2006 Exemption 

granted exemptive relief from Section 

12(a) of the Exchange Act 5 to permit the 

NYSE’s members, brokers and dealers to 

trade debt securities not registered 

under the Exchange Act on the NYSE’s 

Automated Bond System, now known as 

‘‘NYSE Bonds,’’ subject to certain 

conditions. One of those conditions is 

that an issuer of the debt securities, or 

the issuer’s parent if the issuer is a 

wholly-owned subsidiary, have at least 

one class of common or preferred equity 

securities that is (i) registered under 

Section 12(b) of the Exchange Act and 

(ii) listed on the NYSE.6 The NYSE 

seeks to amend the 2006 Exemption by 

revising the condition that the class of 

listed common or preferred equity 

securities be listed on the NYSE. The 

NYSE requests that debt securities not 

registered under the Exchange Act be 

permitted to trade on NYSE Bonds if 

their issuer, or the issuer’s parent if the 

issuer is a wholly-owned subsidiary, has 

a class of common or preferred equity 

securities listed on any registered 

national securities exchange, not only 

the NYSE. All other terms of the 2006 

Exemption would remain in effect.7 We 

are publishing this notice to provide 

interested persons with an opportunity 

to comment. 

I. Background 

Section 12(a) of the Exchange Act 

provides in relevant part that it ‘‘shall 

be unlawful for any member, broker or 

dealer to effect any transaction in any 

security (other than an exempted 

security) on a national securities 

exchange unless a registration is 

effective as to such security for such 

exchange.’’ Section 12(b) 8 of the 

Exchange Act dictates how the 

registration referred to in Section 12(a) 

must be accomplished. Accordingly, all 

equity and debt securities that are not 

‘‘exempted securities’’ 9 or are not 

otherwise exempt from Exchange Act 

registration must be registered by the 

issuer under the Exchange Act before a 

member, broker or dealer may trade that 

class of securities on a national 

securities exchange. 


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10 15 U.S.C. 78l(g). 

11Section 12(g)(1) of the Exchange Act and Rule 

12g–1 [17 CFR 240.12g–1] promulgated thereunder 

require an issuer to register a class of equity 

securities if the issuer of the securities, at the end 

of its fiscal year, has more than $10,000,000 in total 

assets and a class of equity securities held by either 

2,000 persons or 500 persons who are not 

accredited investors. When Congress amended the 

Exchange Act in 1964 to add Section 12(g), it 

extended the registration requirement to specified 

equity securities that are not exchange-traded. No 

comparable provision was provided for debt 

securities that are not exchange-traded. 

12See discussion of Exchange Act Rule 3a12–11 

in the NYSE’s application for exemptive relief. See 

also Release Nos. 34–34922 (Nov. 1, 1994) [59 FR 

55342 (Nov. 7, 1994)], and 34–34139 (June 1, 1994) 

[59 FR 29398 (June 7, 1994)]. See also supra note 

1. 

13 17 CFR 240.3a12–11. Release No. 34–34922 

(Nov. 1, 1994) [59 FR 55342 (Nov. 7, 1994)]. 

14 15 U.S.C. 78h(a). 

15 15 U.S.C. 78n(a), (b) and (c). 

16See Release No. 34–43873 (Jan. 23, 2001) [66 

FR 8131 (Jan. 29, 2001)] (Order Approving File No. 

SR–NASD–99–65). 

17See Release No. 34–101121 (Sept. 20, 2024) [89 

FR 78930 (Sept. 26, 2024)] (Order Approving File 

No. SR–FINRA–2024–004). 

18See supra note 1 at 67658. 

19For a description of the undertakings, see the 

NYSE’s application for exemptive relief, Appendix 

at 3. 

20See supra note 1 at 67659. 

21See https://www.nyse.com/products/bonds. 

22See the NYSE’s application for exemptive 

relief, Appendix at 1. 

23The 2006 Exemption defines ‘‘debt security’’ as 

any security that, if the class of securities were 

listed on the NYSE, would be listed under Sections 

102.03 or 103.05 of the NYSE’s Listed Company 

Manual. Under this definition, a debt security does 

not include any security that, if the class of 

securities were listed on the NYSE, would be listed 

under Sections 703.19 or 703.21 of the NYSE’s 

Listed Company Manual. A debt security also does 

not include any security that is defined as an 

‘‘equity security’’ under Section 3(a)(11) of the 

Exchange Act [15 U.S.C. 78c(a)(11)]. The references 

to Section 102.03, 103.05, 703.19 and 703.21 of the 

NYSE’s Listed Company Manual are to those 

sections as in effect on January 31, 2005. The 

proposed exemptive order would not change this 

definition. 

24 15 U.S.C. 77a. 

25 15 U.S.C. 78l(b). 

26 15 U.S.C. 78qA. 

At the same time, brokers or dealers 

who trade debt securities other than on 

a national securities exchange may trade 

debt securities regardless of whether the 

issuer registered that class of debt under 

the Exchange Act. This is the case 

because, while the Exchange Act 

requires issuers to register certain equity 

securities that are not traded on a 

national securities exchange, it does not 

require issuers to register debt securities 

that are not traded on a national 

securities exchange. In particular, 

Section 12(g) 10 of the Exchange Act, the 

only Exchange Act provision other than 

Section 12(a) to impose an affirmative 

Exchange Act registration requirement, 

requires the registration of equity 

securities only.11

As the Commission has stated in the 

past, this disparate regulatory treatment 

between debt securities traded on an 

exchange versus ‘‘over-the-counter’’ 

(‘‘OTC’’) may have negatively and 

unnecessarily affected the structure and 

development of the debt markets.12

Therefore, the Commission has taken 

steps to mitigate the effects of such 

disparate treatment. For example, in 

1994, to reduce existing regulatory 

distinctions between exchange-traded 

debt securities and debt securities that 

trade in the OTC market, the 

Commission adopted Exchange Act Rule 

3a12–11.13 Rule 3a12–11 provides for 

the automatic effectiveness of Form 8– 

A registration statements for exchangetraded debt securities, exempts 

exchange-traded debt from the 

borrowing restrictions under section 

8(a) of the Exchange Act,14 and exempts 

exchange-traded debt from certain proxy 

and information statement requirements 

under sections 14(a), (b) and (c) of the 

Exchange Act.15

As another example, in 2002, the 

Commission approved the Financial 

Industry Regulatory Authority’s 

(‘‘FINRA’’) rules for the Transaction 

Reporting and Compliance Engine 

(‘‘TRACE’’) to, among other things, 

improve price transparency in the 

corporate bond market.16 Since 2002, 

FINRA has increased transparency in 

the corporate bond market through 

TRACE by, most recently, reducing the 

15-minute reporting timeframe for 

transactions reported to FINRA’s 

TRACE system to one minute.17

The Commission stated that granting 

the 2006 Exemption ‘‘will serve the 

public interest by minimizing 

unnecessary regulatory disparity and 

promoting competition’’ between the 

corporate debt security markets.18 The 

2006 Exemption required the following 

conditions in order for debt securities 

not registered under the Exchange Act 

to trade on NYSE Bonds: (1) that the 

offer and sale of the debt securities 

traded on what is now NYSE Bonds be 

registered under the Securities Act; (2) 

that the issuer of the debt securities (or 

its parent if the issuer is a whollyowned subsidiary) have at least one 

class of equity securities registered 

under Section 12(b) the Exchange Act 

and listed on the NYSE; (3) that the 

transfer agent for the debt securities be 

registered under Section 17A of the 

Exchange Act; (4) that the trust 

indenture for the debt security be 

qualified under the Trust Indenture Act 

of 1939; (5) that the NYSE comply with 

the undertakings set forth in its 

exemptive application to distinguish 

between debt securities registered under 

Section 12(b) of the Exchange Act and 

listed on the NYSE and debt securities 

trading pursuant to the exemptive 

order; 19 and (6) that the NYSE would 

delist a class of debt securities that is 

listed on the NYSE as of the date of the 

order only if the issuer of that class of 

debt security did not object to the 

delisting of those securities.20

The NYSE posts on its website a list 

of the bonds that can be traded on the 

NYSE Bonds platform.21 As of October 

2024, this list contained over 8,000 

securities. In its application, the NYSE 

states that, of the bonds that can be 

traded on the NYSE Bonds platform, the 

listed bonds total more than 1,000 

securities and represent a notional value 

of about $464 billion, and the unlisted 

bonds total more than 7,000 securities 

and represent a notional value of about 

$840 billion.22

II. Summary of the Application 

In its application, the NYSE requests 

that we amend one of the conditions in 

the 2006 Exemption. That exemption 

permits the NYSE to trade debt 

securities 23 not registered under 

Section 12(b) of the Exchange Act on 

NYSE Bonds subject to certain 

conditions. One of those conditions 

requires that an issuer, or the issuer’s 

parent if the issuer is a wholly-owned 

subsidiary, have at least one class of 

common or preferred equity securities 

that is (i) registered under Section 12(b) 

of the Exchange Act and (ii) listed on 

the NYSE. The NYSE asks the 

Commission to amend item (ii) to 

require that an issuer have at least one 

class of preferred or common equity 

securities that is listed on any registered 

national security exchange, not just the 

NYSE. All other conditions of the 2006 

Exemption, including item (i), would 

remain the same. Specifically, debt 

securities traded on NYSE Bonds would 

be required to meet the following 

conditions: 

(a) The issuer of the debt security has 

registered the offer and sale of such 

security under the Securities Act of 

1933; 24

(b) The issuer of the debt security or 

the issuer’s parent company if the issuer 

is a wholly-owned subsidiary, has at 

least one class of common or preferred 

equity securities registered under 

Section 12(b) 25 of the Exchange Act and 

listed on a registered national security 

exchange; 

(c) The transfer agent of the debt 

security is registered under Section 

17A 26 of the Exchange Act; 


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27 15 U.S.C. 77aaa–77bbbb. 

28See the NYSE’s application for exemptive 

relief, Appendix at 3. 

29The NYSE states that it would distinguish debt 

securities ‘‘listed’’ on NYSE Bonds from those 

‘‘traded’’ on NYSE Bonds in the following manner: 

(1) The NYSE would uniquely identify ‘‘listed’’ and 

‘‘traded’’ debt securities on the NYSE Bonds Bond 

Directory located on the NYSE’s website; (2) The 

NYSE would also make such information available 

on the NYSE Bonds Security Master File on a daily 

basis through ICE Data Services (‘‘IDS’’); and (3) 

The NYSE would publish a Trader Update to notify 

members and member organizations each time a 

debt security becomes available to trade on NYSE 

Bonds. 

30 In its application for exemptive relief, the 

NYSE states that the third-party bond issue tracking 

service it currently uses is IDS. It also states in its 

application that it would use information from IDS 

and FactSet to comply with NYSE Listing Manual 

Rule 1401. 

31See the NYSE’s application for exemptive 

relief, Appendix at 6. 

32As stated in NYSE’s application for exemptive 

relief, ATSs typically offer dealers on their 

platforms a ‘‘last look’’ to an otherwise firm price, 

which allows the dealer to review the posted price 

prior to any execution. The ‘‘last look’’ allows the 

dealer to reject the order if the price is no longer 

advantageous. NYSE states that this practice ‘‘can 

create a false sense of liquidity in the market.’’ See 

the NYSE’s application for exemptive relief, 

Appendix at 6. 

33FINRA members generally are required to 

report transactions in corporate bonds to TRACE as 

soon as practicable but no later than 15 minutes 

from the time of execution. See FINRA Rule 

6730(a)(1). FINRA publicly disseminates 

information on the transactions reported to TRACE 

immediately upon receipt. See FINRA Rule 6750(a). 

34See the NYSE’s application for exemptive 

relief, Appendix at 7. 

(d) The trust indenture for the debt 

security is qualified under the Trust 

Indenture Act of 1939; 27

(e) The NYSE has complied with the 

undertakings (see below) set forth in its 

exemptive application to distinguish 

between debt securities registered under 

Section 12(b) of the Exchange Act and 

listed on the NYSE and debt securities 

trading pursuant to this requested 

exemptive relief; and 

(f) The NYSE will delist a class of 

debt securities that were listed on the 

NYSE as of November 16, 2006 only if 

the issuer of such class of debt securities 

does not object to the delisting of those 

securities. 

The NYSE states that it would 

continue to comply with the 

undertakings that are a condition of the 

2006 Exemption in connection with its 

current request.28 Specifically, in its 

application the NYSE states that it 

would continue to: 

(a) Provide definitions of ‘‘listed’’ debt 

securities and ‘‘traded’’ debt securities 

on NYSE Bonds and on the NYSE’s 

website; 

(b) Identify on NYSE Bonds and on 

the NYSE’s website whether a particular 

debt security is ‘‘listed’’ or ‘‘traded’’; 29

(c) Directly provide members and 

member organizations notification prior 

to the date that trading of the debt 

securities commences on NYSE Bonds 

to clarify the distinction between 

‘‘listed’’ debt securities and ‘‘traded’’ 

debt securities and to provide 

notification that eligible debt securities 

will be traded on NYSE Bonds; 

(d) Issue a press release upon 

approval of this exemption request 

stating that ‘‘listed’’ debt securities 

would trade alongside ‘‘traded’’ debt 

securities on NYSE Bonds; and 

(e) Obtain corporate action 

information from a third-party bond 

issue tracking service for debt securities 

covered by this request.30

The NYSE states that the current 

regulatory landscape puts the NYSE at 

a competitive disadvantage vis-a`-vis 

Alternative Trading Systems (‘‘ATSs’’), 

which are permitted to trade any 

corporate bond that is currently 

available to trade in the secondary 

market.31 NYSE states that NYSE Bonds 

is the only regulated platform for 

corporate bonds that offers firm prices 

that are live and executable versus what 

it describes as ‘‘subject pricing’’ on 

ATSs.32 NYSE also states that NYSE 

Bonds, in contrast to the OTC bond 

markets, disseminates both last sale 

prices as they occur on NYSE Bonds 

exclusive of any mark-ups, mark-downs, 

or other charges, and bid and ask 

quotations. In addition, the NYSE states 

that such market data is accessible 

instantaneously on NYSE Bonds.33 The 

NYSE further states that it is not aware 

of any comparable level of transparency 

that exists currently elsewhere for 

corporate bond trading.34

Section 36 of the Exchange Act grants 

the Commission the authority to 

‘‘conditionally or unconditionally 

exempt any person, security, or 

transaction, or any class or classes of 

persons, securities, or transactions, from 

any provision or provisions of [the 

Exchange Act] or of any rule or 

regulation thereunder, to the extent that 

such exemption is necessary or 

appropriate in the public interest, and is 

consistent with the protection of 

investors.’’ 

In order to facilitate investor 

protection, we propose the following 

additional condition: the NYSE will 

ensure daily monitoring of delistings of 

equity securities of each issuer whose 

debt securities are listed for trading on 

NYSE Bonds or, if the issuer of the debt 

securities is a wholly-owned subsidiary, 

equity securities of the issuer’s parent 

company. The Commission 

preliminarily believes that this 

condition will help protect investors by 

facilitating appropriate monitoring and 

timely handling of equity security 

delistings for each issuer whose debt 

securities are listed for trading on NYSE 

Bonds or, if the issuer of the debt 

securities is a wholly-owned subsidiary, 

equity securities of the issuer’s parent 

company. 

III. Request for Comment 

We request and encourage any 

interested person to submit comments 

regarding the NYSE’s application, 

including whether the request should be 

granted. In particular, we solicit 

comment on the following questions: 

1. Is the scope of the requested 

exemption appropriate? If not, please 

explain and provide examples of an 

appropriate scope. 

2. Please describe how the requested 

exemption would or would not protect 

investors and the public interest. For 

example, would investors lose access to 

any material information? 

3. Please describe how the requested 

exemption would or would not help to 

maintain fair and orderly markets. 

4. Would the requested exemption 

impact competition between exchanges 

and the OTC markets for trading in 

corporate bonds? If so, please describe 

the impact on competition, and how 

this impact would occur. 

5. Would the requested exemption 

increase the transparency of the public 

debt markets? If so, please describe the 

kind of transparency it would foster. 

6. Increased trading on the NYSE 

Bonds platform that might follow from 

the requested exemption would result in 

greater dissemination of last sale prices 

as they occur on NYSE Bonds exclusive 

of any mark-ups, mark-downs, or other 

charges, and bid and ask quotations. To 

what extent would the information 

disseminated by NYSE Bonds and, in 

particular, the pre-trade information 

improve overall market quality in the 

corporate bond market in terms of 

access to information, liquidity or other 

factors? 

7. Would the requested exemption 

impact competition between national 

securities exchanges? If so, explain how. 

8. Would issuers be more or less 

likely to issue debt securities to trade on 

NYSE Bonds in accordance with this 

exemptive relief? 

9. Are there differences between 

issuers, in terms of industry, 

capitalization or other characteristics, 

who list their equity securities on the 

NYSE and those who list their equity 

securities on other registered national 

securities exchanges? If so, are there any 

such differences that warrant not 

expanding the 2006 Exemption as 

requested? 


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35See the NYSE’s application for exemptive 

relief, Appendix at 3. 

10. Are there differences between the 

listing standards for equity securities 

among national securities exchanges 

that warrant not expanding the 2006 

Exemption as requested? 

11. The current condition requiring 

the issuer of the debt security to have 

at least one class of common or 

preferred equity securities registered 

under Section 12(b) of the Exchange Act 

and listed on the NYSE was designed to 

assure that the issuer of debt securities 

has a significant and continuous listing 

(and oversight) relationship with the 

NYSE. Does the loss of such a direct 

relationship with the issuer under the 

requested exemption warrant not 

expanding the 2006 Exemption as 

requested? 

12. Are there particular listing 

standards for an issuer’s listed securities 

the presence of which should be a 

condition for expanding the 2006 

Exemption? 

13. Any new or amended listing 

standards must be filed with the 

Commission, meet the statutory 

standard and comply with Rule 19b–4, 

and be approved by the Commission. 

Would approving this request affect the 

incentives of each of the national 

securities exchanges, including the 

NYSE, to maintain or change its listing 

standards? 

14. Are there differences between 

exchange-traded debt securities and 

debt securities traded in the OTC market 

broadly or on ATSs in particular that 

have developed since 2006 that warrant 

not expanding the 2006 Exemption as 

requested? 

15. Are there any implications or 

concerns that may arise because NYSE 

members would be able to trade a debt 

security of an issuer that is not subject 

to the rules of the NYSE (even with 

respect to its equity securities) and 

where the NYSE has no formal listing 

agreement with the issuer, and the 

issuer’s equity securities are listed on a 

national securities exchange other than 

the NYSE? 

16. Should we condition the 

requested exemption on any additional 

listing standards on any exchange where 

the issuer’s securities are listed? 

17. Are the conditions sufficiently 

designed so that investors are 

appropriately protected? 

18. Is the undertaking regarding the 

use of corporate action information from 

a third party bond issue tracking service 

adequate to provide the NYSE and its 

members with sufficient information 

regarding corporate actions relevant to 

debt securities traded on NYSE Bonds? 

Is such undertaking sufficient for NYSE 

to ascertain compliance with the 

requirements of NYSE Rule 1401, on 

initial and continued trading? If not, 

what additional information or 

measures would be appropriate? Should 

any such additional information or 

measures be required as an additional 

condition of the exemption? 

19. Should the provision of corporate 

action information provided by a thirdparty bond issue tracking service to the 

NYSE and its members be a condition 

of the exemption? 

20. Should we require additional 

conditions to the requested exemption if 

any of the events identified in the 

information to be provided by the thirdparty bond issue tracking service to the 

NYSE were to occur? 

21. The NYSE states that it would 

continue to ‘‘[i]dentify on NYSE Bonds 

and on the NYSE’s website whether a 

particular debt security is ‘‘listed’’ or 

‘‘traded’’ and the NYSE explains the 

manner in which it would do so.35

Should the NYSE also be required to 

identify the exchanges where the equity 

securities of its NYSE Bond issuers are 

listed? If so, should this identification 

be required as a condition of the 

exemptive order? 

22. Should we add the proposed 

condition that the NYSE ensure daily 

monitoring of delistings of equity 

securities of each issuer whose debt 

securities are listed for trading on NYSE 

Bonds or, if the issuer of the debt 

securities is a wholly-owned subsidiary, 

equity securities of the issuer’s parent 

company? Would that condition help to 

ensure compliance with the requested 

exemption and timely handling of an 

event of delisting of such equity 

securities? 

23. Should we make any other 

modifications to the existing conditions 

or add any other conditions? 

24. Would the requested change to the 

listing condition impact any of the other 

conditions to the exemption? If so, 

which condition or conditions, and 

why? 

25. Would there be any adverse 

consequences to market participants if 

we granted this exemption as requested? 

Comments should be received on or 

before December 4, 2024. Comments 

may be submitted by any of the 

following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/exorders.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number S7– 

2024–07 on the subject line. 

Paper Comments 

• Send paper comments to Vanessa 

A. Countryman, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE, Washington, DC 20549–1090. 

All submissions should refer to File 

Number S7–2024–07. 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/exorders.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the notice that are filed 

with the Commission, and all written 

communications relating to the notice 

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. 

For further information, you may 

contact Ingram Weber, Special Counsel, 

Office of Rulemaking, at (202) 551– 

3430, in the Division of Corporation 

Finance or Justin Pica, Assistant 

Director, at (202) 551–7476, in the 

Division of Trading and Markets; U.S. 

Securities and Exchange Commission, 

100 F Street NE, Washington, DC 20549. 

By the Commission. 

Dated: October 29, 2024. 

Sherry R. Haywood, 

Assistant Secretary. 

Appendix: The New York Stock 

Exchange LLC’s Application for an 

Exemption Pursuant to Section 36 of the 

Exchange Act 

Appendix 

April 12, 2024 

Vanessa Countryman 

Secretary 

Securities and Exchange Commission 

100 F Street NE 

Washington, DC 20549–1090 

Dear Ms. Countryman: 


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

2 15 U.S.C. 78a. 

3 15 U.S.C. 78l(a). 

4See Exchange Act Release No. 54766 (November 

16, 2006), 71 FR 67657 (November 22, 2006) (Order 

Granting the New York Stock Exchange Inc.’s (n/k/ 

a the New York Stock Exchange LLC) Application 

for an Exemption Pursuant to Section 36 of the 

Securities Exchange Act of 1934) (the ‘‘2006 

Exemption’’). See also Letter from Mary Yeager, 

New York Stock Exchange, to Jonathan G. Katz, 

Secretary, Securities and Exchange Commission, 

dated May 26, 2005 (NYSE’s request for exemptive 

relief). 

5See Securities Exchange Act Release No. 55496 

(March 20, 2007), 72 FR 14631 (March 28, 2007) 

(SR–NYSE–2006–37) (Order Granting Accelerated 

Approval of Proposed Rule Change Relating to the 

Establishment of NYSE Bonds). 

6 15 U.S.C. 77a. 

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

8 15 U.S.C. 78qA. 

9 If the Commission grants exemptive relief from 

Section 12(a), members, brokers and dealers would 

be able to trade on the NYSE eligible debt securities 

that have not been registered under Section 12(b), 

which prescribes the procedures for an issuer’s 

registration of a security and the information 

required to be submitted. Similarly, the Exchange 

would no longer need to comply with the 

provisions of Section 12(d) regarding the 

certification of listing and registration of debt 

securities. 

10 15 U.S.C. 77aaa–77bbbb. 

11The NYSE will distinguish debt securities 

‘‘listed’’ on NYSE Bonds from those ‘‘traded’’ on 

NYSE Bonds in the following manner: (1) The 

Exchange will uniquely identify ‘‘listed’’ and 

‘‘traded’’ debt securities on the NYSE Bonds Bond 

Directory located on the NYSE’s website; (2) The 

Exchange will also make such information available 

on the NYSE Bonds Security Master File on a daily 

basis through ICE Data Services (‘‘IDS’’); and (3) 

The Exchange will publish a Trader Update to 

notify members and member organizations each 

time a debt security becomes available to trade on 

NYSE Bonds. 12See NYSE Rules 1400 and 1401. 

The New York Stock Exchange LLC (the 

‘‘Exchange’’ or ‘‘NYSE’’) requests that the 

Securities and Exchange Commission (the 

‘‘Commission’’) amend a single term of 

previously granted exemptive relief to permit 

Exchange members and member 

organizations to trade certain debt securities 

that are not registered under Section 12(b) 1

of the Securities Exchange Act of 1934 (the 

‘‘Exchange Act’’).2

Background/Exemptive Relief Requested 

Section 12(a) 3 of the Exchange Act 

provides that it shall be unlawful for any 

‘‘member, broker, or dealer to effect any 

transaction in any security (other than an 

exempted security) on a national securities 

exchange unless a registration is effective as 

to such security for such exchange.’’ 

In 2006, the Commission granted 

exemptive relief from Section 12(a) of the 

Exchange Act to permit Exchange members 

and member organizations to trade 

unregistered debt securities on the NYSE’s 

Automated Bond System (ABS),4 now known 

as ‘‘NYSE Bonds.’’ 5

The 2006 Exemption is limited to debt 

securities of an issuer, or a wholly-owned 

subsidiary of an issuer, with at least one class 

of common or preferred equity securities that 

is (i) registered under Section 12(b) of the 

Exchange Act and (ii) listed on the NYSE. 

The Exchange now asks the Commission to 

amend this single limitation. As amended, 

unregistered debt securities could be traded 

on NYSE Bonds if their issuer (or their 

issuer’s parent) had a class of common or 

preferred equity listed on any registered 

national securities exchange, not just the 

NYSE. All other terms of the 2006 Exemption 

would remain in effect. 

More specifically, if the Commission were 

to grant the Exchange’s request, in order for 

an unregistered debt security to be traded on 

NYSE Bonds, the debt security would have 

to meet the following conditions: 

(a) The issuer of the debt securities 

registered the offer and sale of that class of 

debt securities under the Securities Act of 

1933, as amended (the ‘‘1933 Act’’); 6

(b) The issuer of the debt securities or the 

issuer’s parent, if the issuer is a whollyowned subsidiary, has at least one class of 

common or preferred equity securities 

registered under Section 12(b) 7 of the 

Exchange Act and listed on any registered 

national securities exchange; 

(c) The transfer agent for the debt securities 

is registered under Section 17A 8 of the 

Exchange Act; 9

(d) The trust indenture for the debt security 

is qualified under the Trust Indenture Act of 

1939,10

(e) The NYSE has complied with the 

undertakings (see below) set forth in its 

exemptive application to distinguish between 

debt securities registered under Section 12(b) 

of the Exchange Act and listed on the NYSE 

and debt securities trading pursuant to this 

requested exemptive relief; and 

(f) The NYSE will delist a class of debt 

securities that were listed on the NYSE as of 

November 16, 2006 only if the issuer of such 

class of debt securities does not object to the 

delisting of those securities. 

In connection with the 2006 Exemption, 

the Exchange undertook that it would take or 

had taken a number of specified steps. The 

Exchange undertakes that it will continue to 

provide this same information in connection 

with this request. Specifically, the NYSE will 

continue to: 

(a) Provide definitions of ‘‘listed’’ debt 

securities and ‘‘traded’’ debt securities on 

NYSE Bonds and on the NYSE’s website; 

(b) Identify on NYSE Bonds and on the 

NYSE’s website whether a particular debt 

security is ‘‘listed’’ or ‘‘traded’’; 11

(c) The NYSE will directly provide 

members and member organizations 

notification prior to the date that trading of 

the debt securities commences on NYSE 

Bonds to clarify the distinction between 

‘‘listed’’ debt securities and ‘‘traded’’ debt 

securities and to provide notification that 

eligible debt securities will be traded on 

NYSE Bonds; 

(d) Issue a press release upon approval of 

this exemption request stating that ‘‘listed’’ 

debt securities would trade alongside 

‘‘traded’’ debt securities on NYSE Bonds; and 

(e) Obtain corporate action information 

from IDS for debt securities covered by this 

request. 

With respect to undertaking (e), IDS, an 

affiliate of the Exchange, is a bond issue 

tracking service that provides the NYSE a 

customized on-line reference for corporate 

actions relevant to bonds. The tracking 

system provides information and data 

electronically to the NYSE, and provides: 

• Notification of calls (redemptions) of 

traded bonds, 

• Notification of tender offers for traded 

bonds, 

• Notice of defaults in payment of interest 

on traded bonds, 

• Notice of consent solicitations for traded 

bonds, and 

• Notice of corporate actions for traded 

bonds (includes tender offers, issuer name 

changes, CUSIP number changes). 

The tracking system does not provide 

notification of changes in trustees, obligors or 

transfer agents with respect to traded debt 

securities. NYSE receives this information 

electronically from IDS on a daily basis. IDS 

independently obtains, researches and 

organizes the information. The NYSE does 

not itself verify the information provided by 

IDS. 

NYSE currently has rules that set forth the 

requirements for trading unlisted debt 

securities on NYSE Bonds.12 Rule 1400 

provides: 

‘‘The term Debt Securities includes only 

securities that, if they were to be listed on the 

NYSE, would be listed under Sections 102.03 

or 103.05 of the NYSE’s Listed Company 

Manual; provided, however, that such 

securities shall not include any security that 

is defined as an ‘‘equity security’’ under 

Section 3(a)(11) of the Exchange Act. 

For the avoidance of doubt, note that the 

term Debt Securities does not include a 

security that, if listed on the NYSE, would 

have been listed under Section 703.19 of the 

NYSE’s Listed Company Manual or any 

equity-linked debt securities listed under 

Rule 5P. The references in this Rule to 

Sections 102.03, 103.05, and 703.19 of the 

NYSE’s Listed Company Manual are to those 

sections as in effect on January 31, 2005.’’ 

Rule 1401 specifies that only Debt 

Securities with an outstanding market value 

or principal amount of at least $5 million 

will be permitted to be traded by NYSE 

members and member organizations. Rule 

1401 also specifies that trading in Debt 

Securities will be suspended if (a) the 

outstanding aggregate market value or 

principal amount of the Debt Securities has 

fallen to less than $1,000,000, or (b) the Debt 

Securities either (1) no longer qualify for a 

statutory exemption from the registration 

requirements of Section 12(b) of the 

Exchange Act, or (2) may no longer be traded 

by NYSE members or member organizations 

on an unregistered basis pursuant to the 2006 

Exemption. 

In order to ensure that Debt Securities have 

at least $5,000,000 in aggregate market value 

or principal amount at the time trading 

commences, as required under Rule 1401(1), 

the NYSE, as it currently does, will review 

two existing corporate bond issue databases 

(IDS and FactSet) that provide issue size 

information for the preponderance of 

corporate bonds. 

To monitor the $1,000,000 suspension 

threshold, as required under Rule 1401(2), 


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13See 2006 Exemption, supra note 4, at 67658. 

14 17 CFR 240.3a12–11. The Commission, among 

other things, exempted debt securities listed on a 

national securities exchange from Sections 14(a), 

14(b) and 14(c) of the Exchange Act. 15 U.S.C. 

78n(a), (b) and (c). 

15See 2006 Exemption, supra note 4, at 67659. 

16See supra note 5. 

17See Kevin McPartland, Is the Corporate Bond 

E-Trading Drought Over?, Greenwich Associates 

(2023). 

18 Id. 

19One instance in which this transparency may 

be lost is when a company with both listed equity 

and debt is merged or reorganizes with another 

company. The successor may list its stock on the 

Exchange but leave its debt in a now wholly-owned 

subsidiary, which may seek to delist its debt to 

avoid separate Section 13 reporting requirements. 

Once delisted from the Exchange, the debt is traded 

only OTC, and the Exchange believes that investors 

lose the benefit of the transparency provided by the 

real time reporting of quotations and trades on the 

Exchange. 

the NYSE will generally utilize, as it 

currently does, IDS’ tracking system to 

monitor partial redemptions and tender 

offers. The most prevalent reason for 

outstanding principal amounts to fall below 

$1 million is when an issuer commences a 

partial redemption of the bonds resulting in 

a smaller amount of bonds outstanding and 

by extension, a drop in the aggregate market 

value or principal amount to below the 

$1,000,000 threshold. 

The NYSE intends to provide an 

opportunity for NYSE members and member 

organizations to trade all eligible debt 

securities. Once eligible debt securities are 

identified, the NYSE will notify NYSE 

members and member organizations that 

such debt securities are eligible to be traded 

on NYSE Bonds through Trader Updates and 

postings on the NYSE website. Debt 

securities that would be ineligible for trading 

include convertible debt securities, debt 

securities that were listed under Section 

703.19 of the NYSE’s Listed Company 

Manual, debt issued by listed company 

subsidiaries that are not wholly-owned, and 

foreign government debt. 

Discussion 

The NYSE believes that increased 

exchange trading of debt securities will have 

substantial benefits to market participants in 

the form of greater transparency around 

pricing and issuer information. The 

regulatory structure around trading of debt 

securities, however, has not sufficiently 

incentivized trading on a regulated national 

securities exchange. Presently, all equity and 

debt securities that are not ‘‘exempted 

securities’’ or are not otherwise exempt from 

Exchange Act registration must be registered 

by the issuer under the Exchange Act before 

a member, broker or dealer may trade that 

class of securities on a national securities 

exchange. By contrast, brokers or dealers who 

trade debt securities in the over-the-counter, 

or OTC, market may trade debt securities 

regardless of whether the issuer registered 

that class of debt under the Exchange Act. In 

fact, debt securities traded OTC need not 

even be issued by reporting companies. 

The Commission has taken a number of 

steps over the years to address its view ‘‘that 

this disparate regulatory treatment may have 

negatively and unnecessarily affected the 

structure and development of the debt 

markets.’’ 13 In 1994, the Commission 

adopted Exchange Act Rule 3a12–11 to 

‘‘reduce regulatory distinctions between 

exchange-traded debt securities required to 

be registered under Section 12 of the 

Exchange Act and bonds traded over-thecounter for which such registration is not 

required.’’ 14

The Commission has also sought to 

increase the level of transparency in the 

public debt markets. In this regard, the 

National Association of Securities Dealers, 

Inc. (‘‘NASD’’), now the Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’), 

introduced TRACE (Trade Reporting and 

Compliance Engine) to bring transparency to 

the bond market by providing 

comprehensive, real-time access to bond 

price information. Introduced in 2002, 

TRACE captures and disseminates 

consolidated information on secondary 

market transactions in publicly traded 

TRACE-eligible securities—representing all 

OTC market activity in these bonds. 

The Commission’s 2006 Exemption was 

another step to ‘‘serve the public interest by 

minimizing unnecessary regulatory disparity 

and promoting competition.’’ 15 Pursuant to 

the 2006 Exemption, the Exchange currently 

lists on its NYSE Bonds platform more than 

1,000 CUSIPs, representing a notional value 

of about $464 billion, and trades more than 

7,000 CUSIPs, representing a notional value 

of about $840 billion. The Exchange believes 

that its present request will further increase 

exchange trading of debt securities to the 

benefit of investors and other market 

participants. 

NYSE Bonds 

NYSE Bonds is an electronic order-driven 

matching system 16 for fixed income 

securities to which Exchange members and 

member organizations subscribe and through 

which they enter and match customer bond 

orders on a strict price and time priority 

basis. The system provides member 

subscribers with access to the order book in 

each bond which displays orders and in the 

time sequence received. Completed, lockedin trades are submitted to the clearing 

corporation (i.e., Depository Trust Clearing 

Corporation) with calculated accrued 

interest. NYSE Bonds centralizes bond 

trading and publishes a real-time bond data 

feed to NYSE Bonds customers and 

subscribers that reflects all orders in time 

sequence on the NYSE Bonds order book. 

NYSE Bonds is an order-driven system and, 

therefore, the Exchange does not disseminate 

any information on a particular bond if there 

are no orders entered on the order book for 

such bond. 

NYSE Bonds primarily serves the ‘‘smalllot’’ corporate bond market. Small-lot bond 

buyers and sellers are primarily individuals, 

bank trust accounts, and small institutions. 

In addition, bond dealers use NYSE Bonds to 

offset so-called ‘‘tail-end’’ bond positions 

acquired in the course of large-lot trading. 

NYSE Bonds is the only system that provides 

the public with real-time disclosure of 

quotations and trade prices, exclusive of 

mark-ups/mark-downs, commissions, or 

other charges. 

Growth in electronic trading of corporate 

bonds has been noteworthy. It has been 

decades in the making, but electronic trading 

in corporate bonds has made notable inroads 

in a market known for its low-tech ways. In 

November 2023, 45% of US investment-grade 

bond volume was traded electronically.17

During that month, the average daily notional 

volume traded grew 13% year over year to 

$43 billion, with $18.8 billion of corporate 

bonds trading electronically, representing an 

18% growth from November of 2022.18 The 

vast majority of those electronic transactions 

occur on Alternative Trading Systems 

(‘‘ATSs’’), which are permitted to trade any 

corporate bond that is currently available to 

trade in the secondary market. This universe 

of bonds represents approximately 62,000 

CUSIPs with a notional value of over $10 

trillion. The current regulatory landscape not 

only puts NYSE Bonds at a competitive 

disadvantage to the ATSs, it also puts 

investors at a disadvantage given that NYSE 

Bonds is the only regulated platform for 

corporate bonds that offers firm prices that 

are live and executable versus subject pricing 

on ATSs which can create a false sense of 

liquidity in the market. ATSs typically offer 

dealers on their platforms a ‘‘last look’’ to an 

otherwise firm price, which allows the dealer 

to review the posted price prior to any 

execution. The ‘‘last look’’ allows the dealer 

to reject the order if the price is no longer 

advantageous. On the contrary, all prices on 

NYSE Bonds are live and executable and are 

matched based on price/time priority 

automatically by the matching engine. 

In addition, the Exchange believes that 

investors in debt securities are adversely 

impacted by the competitive constraints on 

exchanges trading debt securities. In contrast 

to OTC markets trading debt securities, the 

Exchange’s bond market disseminates both 

last sale prices as they occur on the Exchange 

exclusive of any mark-ups, mark-downs, or 

other charges, and bid and ask quotations. 

This market data is available through some 

400,000 market data displays providing 

subscribers—primarily securities firms and 

financial institutions—with direct 

instantaneous access to this information, 

throughout each trading day. The Exchange 

is not aware of any comparable level of 

transparency—trade prices, quotations, and 

speed of availability for corporate bond 

prices—that exists currently elsewhere. This 

transparency is absent when a bond delists 

from, or is not traded on, the Exchange.19

Bond Issue Information 

The Exchange believes that increasing the 

universe of unregistered debt securities that 

may be traded on the Exchange will have 

significant benefits to market participants. 

First, the Exchange’s proposal will not result 

in any loss of debt security or issuer 

information to investors for the following 

reasons: The Exchange is only requesting 

exemptive relief with respect to the trading 

by Exchange members and member 

organization of debt securities issued by 

companies listed on a national securities 


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20 15 U.S.C. 78o(d) (2000). 

21 17 CFR 240.12g5–1. 

22 17 CFR 240.12b–3. Rule 12b–3 requires that 

wherever the title of securities is required to be 

stated one shall also indicate ‘‘the type and general 

character of the securities. . . .’’ For funded debt, 

issuers are required to state the following: the rate 

of interest, the maturity date (or dates for serial 

issues), an indication if the payment of principal or 

interest is contingent, a brief indication of the 

priority of the issue, and, if the issue is convertible, 

a statement to that effect. 

23 15 U.S.C. 78a. 

24See Gary Gensler, ‘‘ ‘‘The Name’s Bond:’’ 

Remarks at City Week’’ (April 26, 2022), available 

at https://www.sec.gov/news/speech/gensler-namesbond-042622. 

25 Id. 

exchange and their wholly-owned 

subsidiaries. All such issuers are already 

subject to the requirements of Section 13 of 

the Exchange Act, and thus information 

about an issuer will be available to investors, 

even in the absence of an Exchange Act 

registration requirement for the debt 

securities of these issuers or their whollyowned subsidiaries. 

Only debt securities that are registered 

under the 1933 Act would be eligible to be 

traded by NYSE members and member 

organizations on NYSE Bonds. Additionally, 

under Section 15(d) of the Exchange Act, 

issuers not required to register their debt 

securities under Section 12 of the Exchange 

Act are subject to Section 13 reporting 

requirements for the fiscal year following the 

effective date of a registration statement filed 

under the 1933 Act.20 Issuers must continue 

to file such reports so long as they have a 

class of securities with at least 300 ‘‘holders 

of record’’ as defined under Exchange Act 

Rule 12g5–1.21 Therefore, with respect to 

eligible debt securities that have been issued 

by the wholly-owned subsidiary of a listed 

company, that wholly-owned subsidiary may 

or may not itself be currently subject to the 

requirements of Section 15(d) or Section 13 

of the Exchange Act. 

The 1933 Act registration statements 

themselves supply much of the relevant 

information needed by the bond markets and 

investors. Indeed, for the most part, the 

Exchange Act registration Form 8–A simply 

incorporates by reference the information 

found in the 1933 Act registration statement. 

The 1933 Act registration statement also 

contains a much more detailed and relevant 

description of the debt issue than is required 

by Rule 12b–3 of the Exchange Act.22 The 

description contained in the term sheet of the 

registration statement provides the 

information necessary to trade that issue— 

whether on an exchange or OTC. The issue 

description contained in the Form 8–A 

registration statement does not provide the 

information needed to trade bonds. 

Most of the other disclosure items required 

in connection with debt securities arise with 

respect to Forms 8–K, 10–Q and 10–K. These 

forms would continue to be filed by eligible 

listed companies and, where required by 

Sections 15(d) or 13 under the Exchange Act, 

by eligible wholly-owned subsidiaries, 

regardless of whether the debt securities are 

registered under the Exchange Act. Item 2.04 

of Form 8–K requires disclosure of any 

triggering event, such as a default, that 

accelerates or increases a direct financial 

obligation. Item 3.03 of Form 8–K requires 

disclosure of any material modification to the 

rights of security holders. Item 601(b)(4) of 

Regulation S–K (required to be included in 

10–Ks and 10–Qs) discusses the definition of 

the rights of debt holders. Part II—Item 3(a) 

of Form 10–Q requires that, to the extent that 

the registrant has not previously disclosed 

such information on Form 8–K, the registrant 

must provide information regarding defaults 

in the payment of principal, interest, sinking 

fund, etc., ‘‘with respect to any indebtedness 

of the registrant or any of its significant 

subsidiaries exceeding 5 percent of the total 

assets of the registrant and its consolidated 

subsidiaries . . .’’ (emphasis added). Thus, 

the Form 10–Q requires disclosure of defaults 

in the payment of principal, interest, sinking 

fund, etc. for any bonds of the registrant, 

irrespective of whether such bonds are 

exchange-listed or not. 

If, as described above, a wholly-owned 

subsidiary ceases to provide Exchange Act 

reports itself, much of the information that 

had been provided by the wholly-owned 

subsidiary will be provided instead by the 

wholly-owned subsidiary’s listed parent 

company in its own Exchange Act reports. 

The listed parent company, however, will not 

be required to list and describe the debt 

securities issued by the wholly-owned 

subsidiary on the cover page of its own 

annual report on Form 10–K or to include as 

an exhibit to its own Forms 10–K or 10–Q the 

exhibits that would have been required to be 

filed by the wholly-owned subsidiary 

pursuant to Item 601(b)(4) of Regulation S– 

K (relating to creation of a new class of 

securities or indebtedness or the 

modification of existing rights of security 

holders). 

There are also a variety of databases 

providing bond information, including 

information regarding the listing and/or 

trading location of a bond. A few examples 

of these database services include Standard 

& Poor’s Market Intelligence, the Mergent 

Bond Record, APEX, Bloomberg and the 

Commission’s EDGAR internet service, 

among other services. In addition, the 

Exchange’s own bond issue directory is 

available on the Exchange’s website and 

carries the description of each listed bond 

issue, including bonds currently exempt from 

Exchange Act registration requirements, such 

as Tennessee Valley Authority bonds. 

Most notably, of course, OTC bond trading 

functions without the information obtained 

as a result of Exchange Act registration. OTC 

bond trading relies on the information 

disclosed in the 1933 Act registration 

statement and the indentures filed under the 

Trust Indenture Act, including amendments 

to the indenture affecting the rights of 

bondholders. 

In addition to helping ensure that investors 

have access to current information about debt 

securities traded on the Exchange, the 

NYSE’s present request will have additional 

benefits. First, the request will increase 

competition by allowing more exchanges to 

provide a trading venue for debt securities 

which will, in turn, likely increase trading 

volume and liquidity of debt securities. This 

will provide investors and market 

participants with greater pricing 

transparency for bonds traded on the 

Exchange. In granting an exemption pursuant 

to Section 36 of the Exchange Act, the 

Commission must consider whether the 

requested exemption is ‘‘necessary or 

appropriate in the public interest, and is 

consistent with the protection of 

investors.’’ 23 For the reasons discussed 

herein, the Exchange believes its requested 

relief meets this standard. If granted, 

investors will have corporate information 

about the issuer of debt securities, there will 

be increased numbers of trading venues for 

debt securities, and the resulting growth in 

trading will provide market participants with 

greater pricing transparency. 

Conclusion 

The Exchange believes that its request to 

amend a single term of the 2006 Exemption 

to permit unregistered debt securities to be 

traded on NYSE Bonds if their issuer (or their 

issuer’s parent) had a class of common or 

preferred equity listed on any registered 

national securities exchange will further the 

Commission’s goals of improving 

transparency in the bond market while also 

providing sufficient safeguards for the 

investing public. In remarks at City Week, 

Chair Gensler outlined targeted initiatives to 

improve transparency, resiliency, integrity, 

and access in fixed-income markets.24

‘‘Together, through driving greater 

transparency, modernizing rule sets for 

electronified platforms, and enhancing 

financial resiliency, we can help investors 

and issuers in the bond markets get the same 

benefits as many other parts of our capital 

markets,’’ said Gensler.25 Pre-trade 

transparency in particular has been identified 

as a key area for improvement in the fixed 

income markets. 

As noted above, the Commission has 

already shown its willingness to lessen the 

opaqueness in the bond market by providing 

exemptive relief to the Exchange pursuant to 

which the Exchange currently trades debt 

securities of issuers that are listed on NYSE 

and such issuers’ wholly-owned subsidiaries. 

By extending this exemption to allow 

Exchange members and member 

organizations to trade debt securities of 

issuers that are listed on any national 

securities exchange and such issuers’ whollyowned subsidiaries would further remove 

unnecessary and anti-competitive barriers to 

exchange trading of debt securities. In 

addition, trading of such debt securities on 

NYSE Bonds would provide market 

participants trading such securities, as well 

as the owners of such securities, much 

greater levels of price transparency than is 

currently available. Accordingly, we urge the 

Commission to use its exemptive power to 

remove the requirement that debt securities 

of non-NYSE-listed equity issuers and their 

wholly-owned subsidiaries be registered 

under the Exchange Act in order to be traded 

on the Exchange. 

Sincerely, 

Hope M. Jarkowski 

[FR Doc. 2024–25558 Filed 11–1–24; 8:45 am] 

BILLING CODE P 


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