Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Notices 46575 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 81470 

(August 23, 2017), 82 FR 41075 (‘‘Notice’’). 

4For the purposes of Section 146, the term 

‘‘Eligible New Listing’’ means: (i) Any U.S. 

company that lists common stock on the Exchange 

for the first time and any non-U.S. company that 

lists an equity security on the Exchange under 

Section 101 or 110 of the Company Guide for the 

first time, regardless of whether such U.S. or nonU.S. company conducts an offering; (ii) any U.S. or 

non- U.S. company that transfers its listing of 

common stock or equity securities, respectively, to 

the Exchange from another national securities 

exchange; and (iii) any U.S. or non-U.S. company 

emerging from a bankruptcy, spinoff (where a 

company lists new shares in the absence of a public 

offering), and carve-out (where a company carves 

out a business line or division, which then 

conducts a separate initial public offering). 

5See Section 146 of the Company Guide. 

6See Notice, supra note 3, at 41076. 

7See id. 

8See id. 

9 15 U.S.C. 78f. In approving this proposed rule 

change, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

10 15 U.S.C. 78f(b)(4). 

11 15 U.S.C. 78f(b)(5). 

12 15 U.S.C. 78f(b)(8). 

13See Notice, supra note 3, at 41076. 

14See Securities Exchange Act Release No. 77401 

(March 17, 2016), 81 FR 15585 (March 23, 2016) 

(SR–NYSEMKT–2016–12) (order approving the 

initial complimentary products and services 

provided by the Exchange to Eligible New Listings). 

15See Notice, supra note 3, at 41076. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81783; File No. SR– 

NYSEAMER–2017–05] 

Self-Regulatory Organizations; NYSE 

American LLC; Order Approving 

Proposed Rule Change To Amend the 

Complimentary Products and Services 

Available to Certain Eligible New 

Listings Pursuant to Section 146 of the 

NYSE American Company Guide 

September 29, 2017. 

I. Introduction 

On August 11, 2017, NYSE American 

LLC (the ‘‘Exchange’’ or ‘‘NYSE 

American’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

amend Section 146 of the NYSE 

American Company Guide (the 

‘‘Company Guide’’) to provide that 

companies initially listed on or after 

October 1, 2017 will not be eligible to 

receive corporate governance tools 

under the Exchange’s current services 

offering. The proposed rule change was 

published for comment in the Federal 

Register on August 29, 2017.3 No 

comment letters were received in 

response to the Notice. This order 

approves the proposed rule change. 

II. Description of the Proposed Rule 

Change 

The Exchange has proposed to amend 

Section 146 of the Company Guide to 

provide that companies initially listed 

on or after October 1, 2017 will not be 

eligible to receive the corporate 

governance tools described under the 

Exchange’s current services offering. 

As set forth in Section 146 of the 

Company Guide, the Exchange currently 

provides Eligible New Listings 4 with 

complimentary Web-hosting products 

and services (with a commercial value 

of approximately $16,000 annually), 

web-casting services (with a commercial 

value of approximately $6,500 

annually), whistleblower hotline 

services (with a commercial value of 

approximately $4,000 annually), news 

distribution products and services (with 

a commercial value of approximately 

$20,000 annually), and corporate 

governance tools (with a commercial 

value of approximately $15,000 

annually) for a period of 24 calendar 

months.5 According to the Exchange, 

companies that qualify as Eligible New 

Listings have generally not been 

interested in utilizing the corporate 

governance tools available as part of the 

Exchange’s services offering.6 The 

Exchange has therefore proposed to 

discontinue the corporate governance 

tools portion of its service offering for 

companies that list on or after October 

1, 2017.7 The Exchange proposal states, 

however, that any Eligible New Listing 

that lists prior to October 1, 2017 will 

continue to be able to access the 

corporate governance tools for a period 

of 24 months to the extent their 

eligibility permits under current Section 

146 of the Company Guide.8

III. Discussion and Commission 

Findings 

The Commission has carefully 

reviewed the proposed rule change and 

finds that it is consistent with the 

requirements of Section 6 of the Act.9

Specifically, the Commission finds that 

the proposal is consistent with Sections 

6(b)(4) 10 and 6(b)(5) of the Act 11 in 

particular, in that the proposed rule is 

designed to provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among Exchange 

members, issuers, and other persons 

using the Exchange’s facilities, and is 

not designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. Moreover, 

the Commission believes that the 

proposed rule change is consistent with 

Section 6(b)(8) of the Act 12 in that it 

does not impose any burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

The Commission believes that it is 

consistent with the Act for the Exchange 

to modify its existing complimentary 

service offerings to no longer offer 

corporate governance tools to Eligible 

New Listings that list on or after October 

1, 2017. The Exchange states that 

Eligible New Listings have generally not 

been interested in utilizing the 

corporate governance tools offered by 

the Exchange.13 The Commission 

believes it is reasonable and consistent 

with the Act for the Exchange to 

discontinue such services if it believes 

they are not being utilized. The 

Commission notes that the effect of the 

proposal is to reduce the commercial 

value of offerings to Eligible New 

Listings by $15,000 annually, which is 

the value of the corporate governance 

tools as currently set forth in Section 

146 of the Company Guide. The value 

of the remaining offerings to Eligible 

New Listings will continue to remain 

transparent under Section 146 of the 

Company Guide. The Commission 

believes that by accurately describing in 

the Company Guide the current 

products and services available to listed 

companies and the current values of 

those products and services, the 

Exchange is maintaining transparency 

with respect to its rules and the fees 

applicable to such companies. This 

helps to ensure that individual listed 

companies are not given specially 

negotiated packages of products and 

services to list or remain listed that 

would raise unfair discrimination issues 

under the Act.14

Under the proposal, Eligible New 

Listings that list prior to October 1, 2017 

will remain eligible to receive all the 

complimentary products and services 

currently provided by the Exchange, 

including the corporate governance 

tools. The Commission notes that 

Section 6(b)(5) of the Act does not 

require that all issuers be treated the 

same; rather, the Act requires that the 

rules of an exchange not unfairly 

discriminate between issuers. The 

Exchange states that it believes it is not 

unfairly discriminatory to continue to 

offer corporate governance tools to 

companies listed prior to October 1, 

2017, as that benefit was part of the 

services offering that was available at 

the time of such companies’ initial 

listing and may have had some 

influence over their listing decisions.15


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46576 Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Notices 

16See Securities Exchange Act Release Nos. 

76127 (October 9, 2015), 80 FR 62584 (October 16, 

2015) (order approving SR–NYSE–2015–36); 72669 

(July 24, 2014), 79 FR 44234 (July 30, 2014) (order 

approving SR–NASDAQ–2014–058); 65963 

(December 15, 2011), 76 FR 79262 (December 21, 

2011) (order approving SR–NASDAQ–2011–122). 

17 15 U.S.C. 78f(b)(4), (5), and (8). 

18 15 U.S.C. 78s(b)(2). 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Rule 716(c). 

4See Rule 716(a). 

5A ‘‘Response’’ is an electronic message that is 

sent by members in response to a broadcast 

message. See Rule 716(b). 

6See Supplementary Material .04 to Rule 716. 

7Responses and orders and quotes on the order 

book at the time the block order is executed that 

are priced better than the block execution price are 

executed at the block execution price. See Rule 

716(c)(2)(i). 

8See Rule 716(c)(2). 

The Commission believes that the 

Exchange has provided a sufficient basis 

for its different treatment of Eligible 

New Listings that list prior to October 

1, 2017 and that this portion of the 

Exchange’s proposal meets the 

requirements of the Act. In making this 

determination, the Commission notes 

that the provision of services under 

Section 146 of the Company Guide is for 

a limited duration and that the 

Exchange has provided a reasonable 

basis for deciding to treat Eligible New 

Listings that list prior to October 1, 2017 

differently from other listed companies 

going forward. The Commission notes 

that at the time such companies listed, 

they had an expectation, if they 

intended to utilize the corporate 

governance tools, to be able to do so for 

the entire 24 month period as set forth 

in the current rule. To allow such 

companies listed prior to October 1, 

2017 to finish utilizing corporate 

governance tools for any remainder of 

their 24 month period appears to be 

reasonable, equitable, and not unfairly 

discriminatory. In addition, the 

Commission notes that the October 1, 

2017 date, to curtail the offering of 

corporate governance tools for Eligible 

New Listings that list on or after that 

date, was transparent and published for 

comment in advance of approval by the 

Commission in the order discussed 

herein. As noted above, the Commission 

received no comments on the proposal. 

Finally, the Commission has also 

previously approved proposals 

providing different services to newlylisted issuers, including those 

transferring their listing from another 

exchange, and has found this consistent 

with Sections 6(b)(4) and 6(b)(5) of the 

Act.16

Accordingly, the Commission finds 

that the proposed rule change is 

consistent with the requirements of the 

Act and, in particular, that the products 

and services provided under Section 

146 of the Company Guide are equitably 

allocated among issuers consistent with 

Section 6(b)(4) of the Act, the proposed 

rule change does not unfairly 

discriminate among issuers consistent 

with Section 6(b)(5) of the Act, and the 

proposed rule change is appropriate and 

consistent with Section 6(b)(8) of the 

Act in that it does not impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act.17

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,18 that the 

proposed rule change (SR–NYSEAMER– 

2017–05), be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–21415 Filed 10–4–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81772; File No. SR–ISE– 

2017–84] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Rule 716(c) on 

the Block Order Mechanism 

September 29, 2017. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on 

September 18, 2017, Nasdaq ISE, LLC 

(‘‘ISE’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II, 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Rule 716(c) to more accurately describe 

the allocation methodology used in the 

Block Order Mechanism, add language 

regarding how the block execution price 

is determined, and describe the content 

of the broadcast message disseminated 

to members upon the entry of an order 

into the mechanism. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at www.ise.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 

Exchange 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 these 

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 aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Block Order Mechanism is a 

process by which a member can obtain 

liquidity for the execution of blocksized orders,3 defined as orders for fifty 

contracts or more.4 When an order is 

entered in the Block Order Mechanism, 

that order is exposed to members who 

are given an opportunity to respond 

with the prices and sizes at which they 

would be willing to trade with the 

block-sized order.5 The exposure period 

is designated by the Exchange via 

circular, but must be no less than 100 

milliseconds and no more than 1 

second.6 At the conclusion of the 

exposure period, either an execution 

will occur at a single block execution 

price,7 or the order will be cancelled.8

The purpose of the proposed rule 

change is to amend Rule 716(c) to more 

accurately describe the allocation 

methodology used in the Block Order 

Mechanism, add language regarding 

how the block execution price is 

determined, and describe the content of 

the broadcast message disseminated to 

members upon the entry of an order into 

the mechanism. The Exchange believes 

that these changes will increase 

transparency around the operation of 

the Block Order Mechanism to the 

benefit of members and market 

participants. 

Currently, Rule 716(c)(2)(ii) provides 

that Responses, quotes, and Professional 


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