```

[Federal Register Volume 89, Number 240 (Friday, December 13, 2024)]
[Notices]
[Pages 101064-101069]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-29334]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101844; File No. SR-NYSE-2024-47]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Amendment No. 1 and Order Instituting Proceedings 
To Determine Whether To Approve or Disapprove a Proposed Rule Change, 
as Modified by Amendment No. 1, To Amend Section 102.01 of the NYSE 
Listed Company Manual To Provide That the Stockholder Requirements Set 
Forth Therein Will Be Calculated on a Worldwide Basis When Listing a 
Company From Outside North America That Is Listing in Connection With 
Its Initial Public Offering and Is Not Listed on Any Other Regulated 
Stock Exchange

December 9, 2024.
    On August 22, 2024, 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 102.01 of the 
NYSE Listed Company Manual (``Manual'') to provide that the 
distribution standard therein would be calculated on a worldwide basis. 
The proposed rule change was published for comment in the Federal 
Register on September 10, 2024.\3\ The Commission has received no 
comment letters on the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 100918 (September 4, 
2024), 89 FR 73463 (September 10, 2024) (SR-NYSE-2024-47) 
(``Notice'').
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    On October 22, 2024, pursuant to Section 19(b)(2) of the Exchange 
Act,\4\ 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

[[Page 101065]]

disapprove the proposed rule change.\5\ On November 18, 2024, the 
Exchange filed Amendment No. 1 to the proposed rule change as described 
in Items I and II below, which Items have been prepared by the 
Exchange. Amendment No. 1 amended and replaced the proposed rule change 
as originally filed and superseded such filing in its entirety. The 
Commission is publishing this notice and order to solicit comments on 
the proposed rule change, as modified by Amendment No. 1, from 
interested persons and to institute proceedings under Section 
19(b)(2)(B) of the Exchange Act \6\ to determine whether to approve or 
disapprove the proposed rule change, as modified by Amendment No. 1.
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    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 101402, 89 FR 85574 
(Oct. 18, 2024). The Commission designated December 9, 2024, as the 
date by which the Commission shall approve or disapprove, or 
institute proceedings to determine whether to disapprove, the 
proposed rule change.
    \6\ 15 U.S.C. 78s(b)(2)(B).
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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 102.01 of the NYSE Listed 
Company Manual to provide that the distribution standards therein will 
be calculated on a worldwide basis when listing a company from outside 
North America and such company (i) is listing in connection with its 
initial public offering, and (ii) is not listed on any other regulated 
stock exchange. This Amendment No. 1 supersedes the original filing in 
its entirety. The changes to the original filing made in Amendment No. 
1 are described in the Purpose section below. 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 NYSE previously submitted a rule filing proposing to amend 
Section 102.01B to provide that the distribution standards in Section 
102.01A will be calculated on a worldwide basis when listing a company 
on the Exchange.\7\ The proposed rule change was published for comment 
in the Federal Register on September 10, 2024.\8\ This Amendment No. 1 
supersedes the original filing in its entirety.
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    \7\ See SR-NYSE-2024-47 (August 22, 2024).
    \8\ See Securities Exchange Act Release No. 100918 (September 4, 
2024), 89 FR 73463 (September 10, 2024) (SR-NYSE-2024-47).
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    Amendment No. 1 modifies the original proposal by providing that 
the proposed amendment to Section 102.01B would solely provide that the 
stockholder requirements set forth in Section 102.01A will be 
calculated on a worldwide basis when listing a company from outside 
North America and such company (i) is listing in connection with its 
initial public offering and, (ii) is not listed on any other regulated 
stock exchange. In addition, Amendment No. 1 proposes to amend Section 
102.01B to clarify that the discretion to include stockholders and 
trading volume from a company's home country or primary trading market 
outside North America in applying the applicable requirements of 
Section 102.01A is applicable only when the applicant issuer is listed 
on another regulated stock exchange. This Amendment No. 1 supersedes 
the original filing in its entirety.
    Section 102.01A of the Manual sets forth the Exchange's minimum 
initial listing requirements with respect to distribution for companies 
seeking to list under the Exchange's ``domestic'' initial listing 
standards. A note included in Section 102.01B (under the heading 
``Calculations under the Distribution Criteria'') provides that, when 
considering a listing application from a company organized under the 
laws of Canada, Mexico or the United States (``North America''), the 
Exchange will include all North American holders and North American 
trading volume in applying the minimum stockholder and trading volume 
requirements of Section 102.01A.
    Notwithstanding the foregoing, the note included in Section 102.01B 
also provides that, in connection with the listing of any issuer from 
outside North America, the Exchange will have the discretion, but will 
not be required, to consider holders and trading volume in the 
company's home country market or primary trading market outside the 
United States in determining whether a company is qualified for listing 
under Section 102.01, provided such market is a regulated stock 
exchange. The note specifies that, in exercising this discretion, the 
Exchange would consider all relevant factors including: (i) whether the 
information was derived from a reliable source, preferably either a 
regulated securities market or a transfer agent that was subject to 
governmental regulation; (ii) whether there existed efficient 
mechanisms for the transfer of securities between the company's non-
U.S. trading market and the United States; and (iii) the number of 
stockholders and the extent of trading in the company's securities in 
the United States prior to the listing.
    The Exchange proposes to amend the note in Section 102.01B under 
the heading ``Calculations under the Distribution Criteria'' to provide 
that, when considering a listing application from a company from 
outside North America when such company is listing in connection with 
its initial public offering and is not listed on any other regulated 
stock exchange, the Exchange will include all holders on a global basis 
in applying the minimum stockholder requirements of Section 102.01A. 
The Exchange notes that the trading volume provisions of Section 
102.01A are not relevant to the listing of a company from outside North 
America when such company is listing in connection with its initial 
public offering and is not listed on any other regulated stock 
exchange, as the trading volume requirements are only applicable in the 
case of a quotation listing or transfer or upon exchange of a common 
equity security for a listed Equity Investment Tracking Stock and not 
in the case of an initial public offering. In addition, the Exchange 
proposes to amend the existing text of Section 102.01B to clarify that 
the discretion to include stockholders and trading volume from a 
company's home country or primary trading market outside North America 
in applying the applicable requirements of Section 102.01A is 
applicable only when the applicant issuer is listed on another 
regulated stock exchange.
    It has been the Exchange's experience in recent years that non-U.S. 
companies conducting their initial public offerings in the United 
States will often seek to sell a significant portion of the offering in 
the company's home market rather than in the United States. Such 
companies and their underwriters have sometimes had difficulty placing 
shares

[[Page 101066]]

with a sufficient number of investors in North America to meet the 
Exchange's domestic distribution standards and, in some instances, 
companies have been unable to list on the Exchange because of the 
restrictions imposed by the current NYSE rule. In some cases, this 
means that these companies are lost to the U.S. capital markets, but in 
other cases these companies are able to list on the Nasdaq Stock Market 
(``Nasdaq''), as the text of Nasdaq's distribution requirements (as set 
forth in Nasdaq Stock Market Rule 5315(f)) do not include the type of 
restriction to North America set forth in Section 102.01. The Exchange 
believes that the proposed rule change will enable it to compete more 
effectively for the listing of non-U.S. companies, as the rule change 
would remove a significant competitive disadvantage faced by the 
Exchange in competing with Nasdaq for the listing of companies from 
outside North America that are listing in connection with an initial 
public offering and are not listed on any other regulated stock 
exchange.
    In addition to the competitive benefits described above, the 
Exchange believes that the current rule reflects an understanding of 
the functioning of the trading market for non-U.S. companies that is 
inconsistent with the current reality. The current restrictions have 
been in place for many years and do not reflect the speed and 
reliability of links that enable investors who hold securities in 
brokerage accounts in countries outside North America to trade in the 
U.S. listing markets. Given the ease of transfer of securities between 
different countries in the contemporary securities markets, there is no 
reason why the holders of a listed company's securities outside of 
North America cannot be active real time participants in the trading 
market in the United States and that foreign holders should be viewed 
as less valuable as a source of liquidity in that market. The Exchange 
notes that this is particularly relevant to the listing of a foreign 
company listed on the NYSE when it does not have an exchange listing in 
its home market, as the NYSE will be the only exchange trading market 
for such companies and any investor wishing to trade in such company's 
securities in a regulated exchange market will have to do so on the 
NYSE.
    The Exchange notes that a large majority of the companies from 
outside North America that list on the NYSE do so in the form of 
American Depositary Receipts (``ADRs''). Section 102.01B currently 
includes a statement that, for securities that trade in the format of 
ADRs, volume in the ordinary shares will be adjusted to be on an ADR-
equivalent basis. It has also long been the practice of the Exchange to 
adopt this same approach to include holders of ordinary shares on an 
ADR-equivalent basis in calculating the compliance of companies with 
the stockholder requirements of Section 102.01A. The Exchange intends 
to continue that practice in applying the proposed amended form of 
Section 102.01B. The Exchange believes that this approach is 
appropriate in light of the speed and ease with which shares can be 
deposited into an ADR facility to create new ADRs (and withdrawn from 
such ADR facility), which makes an issuer's ordinary shares essentially 
fungible with its ADRs for trading purposes. The Exchange notes that 
the fact that some investors may hold shares directly rather than in 
the form of ADRs is especially unlikely to reduce liquidity in the ADR 
market on the NYSE in cases where there is no regulated exchange market 
in the company's home jurisdiction to compete for liquidity and trading 
volume.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\9\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\10\ in particular, because it 
is designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest 
and because it is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change furthers the 
objectives of Section 6(b)(5) in that it will promote competition for 
the listing of non-U.S. companies by ensuring that the listing rules of 
the major listing exchanges will function the same in their 
consideration of stockholders outside of North America for purposes of 
initial listing requirements with respect to the listing of companies 
from outside North America when such companies are listing in 
connection with an initial public offering and are not listed on any 
other regulated stock exchange. In addition to these competitive 
benefits, the Exchange believes that the current rule reflects an 
understanding of how the trading market for non-U.S. companies 
functions that is inconsistent with the current reality. The current 
restrictions have been in place for many years and do not reflect the 
speed and reliability of links that enable investors who hold 
securities in brokerage accounts in countries outside North America to 
trade in the U.S. listing markets. Given the ease of transfer of 
securities between different countries in the contemporary securities 
markets, there is no reason why, in the case of a company from outside 
North America that lists on the NYSE in connection with an initial 
public offering and that does not have any other regulated exchange 
market, the holders of such company's securities outside of North 
America cannot be active real time participants in the trading market 
in the United States and that foreign holders should be viewed as less 
valuable as a source of liquidity in that market. As such, the Exchange 
believes that the proposal is consistent with the protection of 
investors as it reflects appropriately the role played by stockholders 
and trading activity by stockholders located outside North America in 
the development of a liquid trading market in the United States in the 
securities of non-U.S. listed companies that do not have any regulated 
exchange market other than the NYSE.
    The Exchange believes it is appropriate to limit its proposed 
amendment to companies from outside North America listing in connection 
with an initial public offering that do not have any other regulated 
listing market other than the NYSE, as the absence of any alternative 
regulated exchange market for investors in those companies ensures that 
trading liquidity in their securities is concentrated on the NYSE 
market. The current rule does not allow the Exchange to include 
stockholders outside of North America in determining compliance with 
the stockholder distribution requirements of Section 102.01A by a 
company from outside North America that does not have a regulated 
listing exchange market outside North America, which makes it more 
difficult for those companies to meet the distribution requirements. By 
contrast, the current rule text already provides a more flexible 
approach to meeting the stockholder distribution requirements for 
companies that have a regulated listing exchange in their home markets, 
so the difficulty in meeting the current requirements addressed by this 
proposal is specific to companies where

[[Page 101067]]

the NYSE is the company's sole regulated exchange market. Consequently, 
the Exchange believes it is not discriminatory to limit the scope of 
the current proposal to companies from outside North America that do 
not have another regulated exchange market, as the current rule already 
provides a means for those companies from outside North America that do 
have another regulated exchange market to include stockholders outside 
North America when meeting the stockholder distribution requirements.

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

    The Exchange believes that the proposal will not impose any burden 
on competition that is not necessary or appropriate in furtherance of 
the purposes of Section 6(b)(8) of the Act.\11\
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    \11\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    The Exchange believes that the proposal will not impose a burden on 
intermarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act because the proposed rule change 
is designed to increase the competition for listing of non-U.S. 
companies by enabling the Exchange to compete more effectively with 
Nasdaq for the listing of companies outside North America that are not 
listed on any other regulated stock exchange. The proposal ensures that 
the Exchange's treatment of stockholders outside North America for 
purposes of its stockholder requirements will be substantively the same 
as Nasdaq's treatment of comparable issuers.
    The Exchange believes it is appropriate to limit its proposed 
amendment to companies from outside North America listing in connection 
with an initial public offering that do not have any other regulated 
listing market other than the NYSE, as the absence of any alternative 
regulated exchange market for investors in those companies ensures that 
trading liquidity in their securities is concentrated on the NYSE 
market. The current rule does not allow the Exchange to include 
stockholders outside of North America in determining compliance with 
the stockholder distribution requirements of Section 102.01A by a 
company from outside North America that does not have a regulated 
listing exchange market outside North America, which makes it more 
difficult for those companies to meet the distribution requirements. By 
contrast, the current rule text already provides a more flexible 
approach to meeting the stockholder distribution requirements for 
companies that have a regulated listing exchange in their home markets, 
so the difficulty in meeting the current requirements addressed by this 
proposal is specific to companies where the NYSE is the company's sole 
regulated exchange market. Consequently, the Exchange does not believe 
that the proposed rule change imposes a burden on intra-market 
competition.

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

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

III. Proceedings To Determine Whether To Approve or Disapprove SR-NYSE-
2024-47, as Modified by Amendment No. 1, and Grounds for Disapproval 
Under Consideration

    The Commission is instituting proceedings pursuant to Section 
19(b)(2)(B) of the Exchange Act \12\ to determine whether the proposed 
rule change, as modified by Amendment No. 1, 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, 
as discussed below. 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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    \12\ 15 U.S.C. 78s(b)(2)(B).
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    Pursuant to Section 19(b)(2)(B) of the Exchange Act,\13\ 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.\14\
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    \13\ Id.
    \14\ 15 U.S.C. 78f(b)(5).
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    The development and enforcement of meaningful exchange listing 
standards is of critical importance to financial markets and the 
investing public. Among other things, such listing standards help 
ensure that exchange-listed companies will have sufficient public 
float, investor base, and trading interest to provide the depth and 
liquidity to promote fair and orderly markets. Meaningful listing 
standards also are important given investor expectations regarding the 
nature of securities that have achieved an exchange listing, and the 
role of an exchange in overseeing its market and assuring compliance 
with its listing standards.\15\
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    \15\ See, e.g., Securities Exchange Act Release Nos. 88716 (Apr. 
21, 2020), 85 FR 23393 (Apr. 27, 2020) (SR-NASDAQ-2020-001) (Order 
Approving a Proposed Rule Change To Modify the Delisting Process for 
Securities With a Bid Price at or Below $0.10 and for Securities 
That Have Had One or More Reverse Stock Splits With a Cumulative 
Ratio of 250 Shares or More to One Over the Prior Two-Year Period); 
88389 (Mar. 16, 2020), 85 FR 16163 (Mar. 20, 2020) (SR-NASDAQ-2019-
089) (Notice of Filing of Amendment No. 1 and Order Granting 
Accelerated Approval of a Proposed Rule Change, as Modified by 
Amendment No. 1, To Amend Rule 5815 To Preclude Stay During Hearing 
Panel Review of Staff Delisting Determinations in Certain 
Circumstances). See also Securities Exchange Act Release No. 81856 
(Oct. 11, 2017), 82 FR 48296, 48298 (Oct. 17, 2017) (SR-NYSE-2017-
31) (Notice of Filing of Amendment No. 1 and Order Granting 
Accelerated Approval of a Proposed Rule Change, as Modified by 
Amendment No. 1, To Amend the Listed Company Manual To Adopt Initial 
and Continued Listing Standards for Subscription Receipts).
---------------------------------------------------------------------------

    As discussed above, Section 102.01A of the Manual sets forth the 
Exchange's distribution criteria for issuers seeking to list under the 
Exchange's initial listing standards for the common equity securities 
of domestic companies.\16\ The Exchange also lists applicants that are 
foreign private issuers \17\ under Section 102.01 of the Manual where 
such applicants are qualified to list thereunder.\18\
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    \16\ A company seeking to list under the Exchange's domestic 
company equity listing standards would be required to meet 
additional minimum initial listing requirements, including minimum 
aggregate market value of publicly-held shares, minimum closing 
price (or offering price) per share, and minimum financial standards 
as set forth in Section 102.01 of the Manual.
    \17\ ``Foreign private issuer'' and ``non-U.S. company'' have 
the same meaning and are defined in accordance with the Commission's 
definition of foreign private issuer set out in Rule 3b-4(c) of the 
Exchange Act. See Section 103.00 of the Manual.
    \18\ See Section 101.01 of the Manual. If a foreign private 
issuer applicant does not meet all of the requirements for the 
listing of common equity securities applicable to domestic issuers 
under Section 102.01 of the Manual, the Exchange will consider 
whether the applicant qualifies for listing under the quantitative 
listing standards for the listing of equity securities of non-U.S. 
companies set forth in Section 103.01 of the Manual. See id.
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    Pursuant to Section 102.01A of the Manual, an issuer (other than a 
company listing in connection with a transfer or quotation or upon 
exchange of a common equity security for a listed

[[Page 101068]]

Equity Investment Tracking Stock \19\) wishing to list an equity 
security must have, among other things, at least 400 holders \20\ of 
100 shares or more (or of a unit of trading if less than 100 shares) 
and a minimum of 1,100,000 publicly held shares.\21\ Section 102.01B of 
the Manual includes an explanation of how the distribution criteria set 
forth in Section 102.01A of the Manual are applied. Among other things, 
Section 102.01B of the Manual currently provides that when listing a 
company from outside North America (i.e., Canada, Mexico or the United 
States), the Exchange may, in its discretion, consider holders and 
trading volume in the company's home country or primary trading market 
outside the United States in applying the applicable distribution 
listing standards under Section 102.01A of the Manual, provided that 
such market is a regulated stock exchange. Section 102.01B of the 
Manual further specifies that, in exercising this discretion, the 
Exchange will consider all relevant factors including: (i) whether the 
information is derived from a reliable source, preferably either a 
government-regulated securities market or a transfer agent that is 
subject to governmental regulation; (ii) whether there exist efficient 
mechanisms for the transfer of securities between the company's non-
U.S. trading market and the United States; and (iii) the number of 
shareholders and the extent of trading in the company's securities in 
the United States prior to the listing.\22\
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    \19\ An ``Equity Investment Tracking Stock'' is defined in 
Section 102.07 of the Manual. The initial listing requirements 
relating to a company listing in connection with a transfer or 
quotation or upon exchange of a common equity security for a listed 
Equity Investment Tracking Stock remain unchanged by the Exchange's 
proposed rule change because such companies would not be listing in 
connection with an initial public offering. See supra Section II.A.
    \20\ The number of beneficial holders of stock held in the name 
of Exchange member organizations will be considered in addition to 
holders of record. The Exchange will make any necessary check of 
such holdings. See Section 102.01A(A) of the Manual.
    \21\ If the unit of trading is less than 100 shares, the 
requirements relating to number of publicly-held shares shall be 
reduced proportionately. Shares held by directors, officers, or 
their immediate families and other concentrated holdings of 10 
percent or more are excluded in calculating the number of publicly-
held shares. See Section 102.01A(B) of the Manual.
    \22\ Section 102.01B of the Manual provides that, when 
considering a listing application from a company organized under the 
laws of North America, the Exchange will include all North American 
holders and North American trading volume in applying the minimum 
stockholder and trading volume requirements of Section 102.01A. The 
Exchange does not propose to amend this provision.
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    The Exchange proposes to amend its domestic company equity listing 
standards as set forth in Section 102.01B to provide that when listing 
a company from outside North America that is listing in connection with 
its initial public offering and is not listed on another regulated 
stock exchange, the Exchange will include all holders on a global basis 
in applying the minimum stockholder requirements set forth in Section 
102.01A. In connection with this proposed change, the Exchange also 
proposes to amend Section 102.01B to add language to clarify that the 
current rule text describing how the distribution criteria set forth in 
Section 102.01A are applied to companies from outside North America 
would apply when listing a company from outside North America that is 
already listed on another regulated stock exchange.\23\
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    \23\ Section 102.01B of the Manual provides that for securities 
that trade in the form of ADRs, volume in the ordinary shares will 
be adjusted to be on an ADR-equivalent basis. The Exchange 
represents that it has also long been the practice of the Exchange 
to adopt this same approach to include holders of ordinary shares on 
an ADR-equivalent basis in calculating the compliance of companies 
with the stockholder requirements of Section 102.01A and that the 
Exchange intends to continue that practice in applying the proposed 
amended form of Section 102.01B.
---------------------------------------------------------------------------

    The Commission has concerns about whether the Exchange's proposal 
is designed to protect investors and the public interest, as required 
by Section 6(b)(5) of the Exchange Act. The Exchange's proposal would 
loosen the application of the minimum stockholder requirements for the 
initial listing of companies from outside North America that are 
listing in connection with an initial public offering and are not 
listed on another regulated stock exchange, where these companies are 
listing pursuant to the listing standards applicable to domestic 
companies' equity securities. The Commission has concerns about whether 
such companies, if they qualify for initial listing based on 
distribution criteria that includes a significant number of holders 
located outside of the United States, would have sufficient public 
float, investor base, and trading interest to provide the depth and 
liquidity to promote fair and orderly markets on the Exchange.
    The Exchange states that the current rule ``do[es] not reflect the 
speed and reliability of links that enable investors who hold 
securities in brokerage accounts in countries outside North America to 
trade in the U.S. listing markets.'' The Exchange further states that 
``[g]iven the ease of transfer of securities between countries in the 
contemporary securities markets, there is no reason why the holders of 
a listed company's securities outside of North America cannot be active 
real time participants in the trading market in the United States.'' 
However, the Exchange does not clearly explain or provide evidence as 
to what efficient mechanisms exist for the transfer of securities held 
in brokerage accounts outside of North America and whether and how 
securities held in such brokerage accounts would contribute to the 
depth and liquidity of the domestic market for a company's shares.
    As a result, the Commission believes there are questions as to 
whether the proposal, as modified by Amendment No. 1, is consistent 
with Section 6(b)(5) of the Exchange Act \24\ 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 \25\ to determine whether the proposal, 
as modified by Amendment No. 1, should be approved or disapproved.
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    \24\ 15 U.S.C. 78f(b)(5).
    \25\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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, as modified by Amendment No. 1. 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 \26\ 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,\27\ any request for an opportunity to make an oral 
presentation.\28\
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    \26\ 15 U.S.C. 78f(b)(5).
    \27\ 17 CFR 240.19b-4.
    \28\ 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).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views, and 
arguments regarding whether the

[[Page 101069]]

proposed rule change, as modified by Amendment No. 1, should be 
approved or disapproved by January 3, 2025. Any person who wishes to 
file a rebuttal to any other person's submission must file that 
rebuttal by January 17, 2025. The Commission asks that commenters 
address the sufficiency of the Exchange's statements in support of the 
proposal, in addition to any other comments they may wish to submit 
about the proposed rule change. Comments may be submitted by any of the 
following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-NYSE-2024-47 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-2024-47. 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-2024-47 and should be 
submitted on or before January 3, 2025. Rebuttal comments should be 
submitted by January 17, 2025.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\29\
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    \29\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(57).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-29334 Filed 12-12-24; 8:45 am]
BILLING CODE 8011-01-P
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