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[Federal Register Volume 89, Number 239 (Thursday, December 12, 2024)]
[Notices]
[Pages 100587-100589]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-29149]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101837; File No. SR-NYSE-2024-70]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Section 902.02 of the NYSE Listed Company Manual To Establish a 
Flat Annual Listing Fee Payable by a Limited Partnership That Is At 
Least 40% Owned by Another Company Listed on the Exchange

December 6, 2024
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on November 26, 2024, New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Section 902.02 of the NYSE Listed 
Company Manual (the ``Manual') to establish a flat annual listing fee 
payable by a limited partnership that is at least 40% owned by another 
company listed on the Exchange. The proposed rule change is available 
on the Exchange's website at www.nyse.com, at the principal office of 
the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Section 902.02 of the Manual to 
establish the flat annual listing fee payable by a limited partnership 
that is at least 40% owned by another company listed on the Exchange 
(such limited partnership, an ``Affiliated Limited Partnership''). The 
proposed changes will take effect from the beginning of the calendar 
year commencing on January 1, 2025.
    All companies listed on the Exchange are obligated to pay annual 
listing fees. The annual fee for operating companies and limited 
partnerships is calculated on a per-share basis based on the number of 
shares issued and outstanding, subject to a minimum and maximum fee.
    Many limited partnerships listed on the Exchange are affiliated 
with another company listed on the Exchange.\4\ For example, the 
general partner of a listed limited partnership may be a wholly-owned 
subsidiary of a separate listed company. Similarly, a listed company 
may have a substantial ownership interest in the outstanding equity 
securities of a separate listed limited partnership. In such instances, 
there is generally overlap between the listed company and limited 
partnership in terms of managing personnel. Therefore, the Exchange 
experiences efficiencies in communicating with the issuers and 
servicing the two listings. However, under the Exchange's current fee 
schedule, the listed company and affiliated listed limited partnership 
are each separately subject to the full annual fee schedule as if they 
were unaffiliated issuers.
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    \4\ Where such affiliation exists, generally it is between a 
listed limited partnership and a listed operating company. In some 
instances, however, the affiliation is between two listed limited 
partnerships.
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    To address the cost savings that is experienced from servicing two 
affiliated listings, the Exchange proposes to amend Section 902.02 of 
the Manual to specify that where at least 40% of the outstanding equity 
interest in a listed limited partnership is owned, either directly or 
indirectly, by a separate listed company, the annual fee for the 
primary class of common shares listed by such affiliated limited 
partnership will be set at the minimum annual fee for a primary class 
of common shares in effect at that time, as such minimum annual fee is 
specified in Section 902.03 of the Manual.\5\ Similarly, the annual fee 
for any additional class of common shares listed by an affiliated 
limited partnership will be set at the minimum annual fee for an 
additional class of common shares in effect at that time, as such 
minimum fee is specified in Section 902.03 of the Manual.\6\ The 
aforementioned annual fee for a primary or additional class of common 
shares listed by an Affiliated Limited Partnership shall be referred to 
as the ``Affiliated Limited Partnership Annual Fee.'' The annual fee 
schedule applicable to the listed company that owns the equity interest 
in the affiliated listed limited partnership will remain unchanged.
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    \5\ Currently, such minimum fee is $80,000.
    \6\ Currently, such minimum fee is $20,000. In the Exchange's 
experience, generally a limited partnership lists only one class of 
common shares.
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    In order to qualify for the Affiliated Limited Partnership Annual 
Fee in any calendar year, the Exchange proposes that an issuer, other 
than a new listing, must submit satisfactory proof to the Exchange no 
later than the first trading day of such calendar year to demonstrate 
that it meets the ownership requirements specified above. In addition, 
the Exchange proposes that the Affiliated Limited Partnership Annual 
Fee will be applied to the annual fees payable with respect to the 
first partial year of listing by any newly-listed company that is able 
to demonstrate at the time of listing that it qualifies as an 
Affiliated Limited Partnership of a listed company.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with

[[Page 100588]]

Section 6(b) of the Act,\7\ in general, and furthers the objectives of 
Section 6(b)(4) \8\ of the Act, in particular, in that it is designed 
to provide for the equitable allocation of reasonable dues, fees, and 
other charges. The Exchange also believes that the proposed rule change 
is consistent with Section 6(b)(5) of the Act,\9\ in that it is 
designed to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest 
and is not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that it is not unfairly discriminatory and 
represents an equitable allocation of reasonable fees to amend Sections 
902.02 to establish a fixed annual fee for Affiliated Limited 
Partnerships.
The Proposed Changes Are Reasonable
    The Exchange believes that the proposed changes to the annual fee 
for Affiliated Limited Partnerships is reasonable. In that regard, the 
Exchange notes that when a listed company owns a substantial equity 
stake in a listed limited partnership there are typically efficiencies 
experienced by the Exchange in terms of overlapping management and 
board members. The Exchange notes that the proposed change will be fee-
neutral for some issuers (i.e., those that already pay only the minimum 
annual fee) and will result in an annual fee reduction for other 
issuers (i.e., those whose annual fee is higher than the minimum fee 
under the current fee structure). However, because the Exchange 
experiences similar costs savings as a result of efficiencies in 
servicing the listing of affiliated limited partnerships, it believes 
it is reasonable to establish a set annual fee (equal to the minimum 
annual fee for a primary or additional class of equity securities then 
in effect) for the Affiliated Limited Partnership.
    The Exchange operates in a highly competitive marketplace for the 
listing of the various categories of securities affected by the 
proposed annual fee adjustments. The Commission has repeatedly 
expressed its preference for competition over regulatory intervention 
in determining prices, products, and services in the securities 
markets. Specifically, in Regulation NMS,\10\ the Commission 
highlighted the importance of market forces in determining prices and 
SRO revenues and, also, recognized that current regulation of the 
market system ``has been remarkably successful in promoting market 
competition in its broader forms that are most important to investors 
and listed companies.'' \11\
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    \10\ Securities Exchange Act Release No. 34-51808 (June 9, 
2005); 70 FR 37496 (June 29, 2005) (``Regulation NMS'').
    \11\ See Regulation NMS, 70 FR at 37499.
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    The Exchange believes that the ever-shifting market share among the 
exchanges with respect to new listings and the transfer of existing 
listings between competitor exchanges demonstrates that issuers can 
choose different listing markets in response to fee changes. 
Accordingly, competitive forces constrain exchange listing fees. Stated 
otherwise, changes to exchange listing fees can have a direct effect on 
the ability of an exchange to compete for new listings and retain 
existing listings.
    Given this competitive environment, the adoption of the proposed 
Affiliated Limited Partnership Annual Fee will enable the Exchange to 
more effectively compete for limited partnership listings.
The Proposal Is an Equitable Allocation of Fees
    The Exchange believes its proposal equitably allocates its fees 
among its market participants.
    The Exchange believes that the proposed adoption of the Affiliated 
Limited Partnership Annual Fee is equitable because it better reflects 
the costs the Exchange incurs in servicing the listing of an Affiliated 
Limited Partnership. As discussed above, the Exchange experiences 
efficiencies in servicing the listing of an Affiliate Limited 
Partnership in the form of streamlined communication with management 
that it does not similarly experience with unaffiliated companies. The 
Exchange therefore believes it is equitable to establish the Affiliated 
Limited Partnership Annual Fee to reflect these efficiencies.
The Proposal Is Not Unfairly Discriminatory
    The Exchange believes that the proposal is not unfairly 
discriminatory. The proposed fee changes are not unfairly 
discriminatory among issuers because it simply reflects the cost 
savings experienced by a particular category of issuers in which 
another listed company has a substantial ownership interest. Further, 
the Exchange operates in a competitive environment and its fees are 
constrained by competition in the marketplace. Other venues currently 
list all of the categories of securities covered by the proposed fees 
and if a company believes that the Exchange's fees are unreasonable it 
can decide either not to list its securities or to list them on an 
alternative venue.
    For the foregoing reasons, the Exchange believes that the proposal 
is consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed rule change is 
designed to ensure that the fees charged by the Exchange accurately 
reflect the services provided and benefits realized by listed 
companies. The market for listing services is extremely competitive. 
Each listing exchange has a different fee schedule that applies to 
issuers seeking to list securities on its exchange. Issuers have the 
option to list their securities on these alternative venues based on 
the fees charged and the value provided by each listing. Because 
issuers have a choice to list their securities on a different national 
securities exchange, the Exchange does not believe that the proposed 
fee changes impose a burden on competition.
Intramarket Competition
    The proposed amended fees will be charged to all listed issuers on 
the same basis. The Exchange does not believe that the proposed amended 
fees will have any meaningful effect on the competition among issuers 
listed on the Exchange.
Intermarket Competition
    The Exchange operates in a highly competitive market in which 
issuers can readily choose to list new securities on other exchanges 
and transfer listings to other exchanges if they deem fee levels at 
those other venues to be more favorable. Because competitors are free 
to modify their own fees, and because issuers may change their chosen 
listing venue, the Exchange does not believe its proposed fee change 
can impose any burden on intermarket competition.

[[Page 100589]]

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Pursuant to Section 19(b)(3)(A)(ii) of the Act,\12\ and Rule 19b-
4(f)(2) thereunder \13\ the Exchange has designated this proposal as 
establishing or changing a due, fee, or other charge imposed on any 
person, whether or not the person is a member of the self-regulatory 
organization, which renders the proposed rule change effective upon 
filing. 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.
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    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \13\ 17 CFR 240.19b-4.
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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 [email protected]. Please include 
file number SR-NYSE-2024-70 on the subject line.

Paper Comments

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

All submissions should refer to file number SR-NYSE-2024-70. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for website viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE, 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-NYSE-2024-70 and should be 
submitted on or before January 2, 2025.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-29149 Filed 12-11-24; 8:45 am]
BILLING CODE 8011-01-P
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