Document ID: SEC-2021-1002-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2021-07-20T04:00Z

[Federal Register Volume 86, Number 136 (Tuesday, July 20, 2021)]
[Notices]
[Pages 38389-38391]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-15340]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92405; File No. SR-NYSEArca-2021-56]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE 
Arca Equities Listing Fee Schedule

July 14, 2021.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on June 30, 2021, NYSE Arca, Inc. (``NYSE Arca'' 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 the NYSE Arca Equities listing fee 
schedule to modify the initial listing fees for equity securities and 
warrants and adopt fee provisions specific to groups of three or more 
listed REITs under common control. 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
Initial Listing Fees
    NYSE Arca charges initial listing fees for the listing of common 
stock, preferred stock and warrants of operating companies based on the 
number of shares of the issuer outstanding at the time of initial 
listing (or, in the case of listed foreign private issuers, the number 
of shares outstanding in the United States), based on the following 
current schedule:

Up to and including 30 million shares outstanding--$100,000
More than 30 million shares outstanding up to and including 50 million 
shares outstanding--$125,000
More than 50 million shares outstanding--$150,000

    The Exchange proposes to reduce the initial fee levels to the 
following:

Up to and including 30 million shares outstanding--$55,000
More than 30 million shares outstanding up to and including 50 million 
shares outstanding--$60,000
More than 50 million shares outstanding--$75,000

    The Exchange believes that these proposed fee levels are more 
consistent

[[Page 38390]]

with its actual costs in processing listing applications than those 
charged under the current fee schedule.
REIT Group Fee Discount
    The Exchange proposes to provide group discounts for listings of 
common stock, preferred stock and warrants where three or more real 
estate investment trusts (``REITs'') are listed on the Exchange and are 
externally managed by the same entity or entities under common control.
    Initial Listing Fee Discount: As proposed, if substantially all of 
the operations of three or more REITs that list in the same calendar 
year are externally managed by the same entity or by entities under 
common control, the initial listing fees payable by such REITs will be 
capped at an aggregate of $165,000 (the ``REIT Group Cap''), to be 
divided among such issuers in proportion to the shares they list at the 
time of initial listing. The applicability of the REIT Group Cap to 
REITs listed during a calendar year will be determined at the end of 
such calendar year. If a REIT is entitled to a reduced listing fee 
under the REIT Group Cap, such REIT will be entitled to receive a 
credit against the following calendar year's annual fee and, where 
applicable, annual fees payable in subsequent calendar years.
    Annual Fee Discount: As proposed, if substantially all of the 
operations of each of a group of three or more listed REITs are 
externally managed by the same entity or by entities under common 
control, each REIT in the group will receive a 50% discount on the 
applicable Annual Fees in relation to any year or portion of a year for 
which the common management relationship continues in existence.\4\
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    \4\ The following is the Annual Fee schedule for common stock 
and preferred stock:
    Up to and including 10 million shares--$30,000
    More than 10 million shares up to and including 100 million 
shares--$30,000 plus $0.000375 per share above 10 million
    More than 100 million shares--$85,0000
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    A limited number of publicly traded REITs have their operations 
externally managed by another entity pursuant to a management 
agreement. Typically, the REIT itself does not have any direct 
employees. Rather, the external manager is entirely responsible for 
managing and staffing the operations of the company, in return for 
management fees and the reimbursement of expenses as set forth in the 
management agreement. In a limited number of cases, a single entity or 
affiliated entities may externally manage more than one REIT. As an 
incentive for all the REITs in such a group to list on the Exchange and 
to reflect the efficiencies described below, the Exchange believes that 
it is appropriate to offer a group discount on initial listing fees and 
annual fees when there are at least three REITs under common 
management.
    The Exchange believes that the proposed initial and annual fee 
discounts for a group of three or more REITs that are under common 
control is equitable and is not unfairly discriminatory, as there are 
meaningful efficiencies for the Exchange in dealing with the same 
external management team for multiple REITs. The resources the Exchange 
expects to expend when dealing with a single external manager in 
processing the new listing of multiple REITs in a single calendar year 
or with respect to the ongoing client service and compliance review of 
multiple REITS under common control are significantly less than would 
be the case for a REIT that is not part of such a group, so the 
Exchange believes the proposed discount is appropriate.
    The Exchange notes that the New York Stock Exchange provides an 
annual fee discount for REITs that are externally managed by the same 
entity or by entities under common control.\5\
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    \5\ See Section 902.03A of the NYSE Listed Company Manual.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\6\ in general, and furthers the 
objectives of Section 6(b)(4) \7\ 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,\8\ 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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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange operates in a highly competitive marketplace for the 
listing of equity securities. The Commission has repeatedly expressed 
its preference for competition over regulatory intervention in 
determining prices, products, and services in the securities markets.
    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.
    The Exchange believes that the proposed modification to the initial 
listing fee schedule is equitable and is not unfairly discriminatory as 
it will be applied to all listing applicants in a consistent and 
transparent manner and is being proposed for the purpose of aligning 
initial listing fees more closely with the Exchange's actual costs in 
processing new listings.
    The Exchange believes that the proposed initial and annual fee 
discounts for a group of three or more REITs that are under common 
control is equitable and is not unfairly discriminatory, as there are 
meaningful efficiencies for the Exchange in dealing with the same 
external management team for multiple REITs. The resources the Exchange 
expects to expend when dealing with a single external manager in 
processing the new listing multiple REITs in a single calendar year or 
with respect to the ongoing client service and compliance review of 
multiple REITS under common control are significantly less than would 
be the case for a REIT that is not part of such a group, so the 
Exchange believes the proposed discount is appropriate.
    The Exchange does not expect the proposed rule changes would affect 
the Exchange's commitment of resources to its regulatory programs.

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.
    Intramarket Competition: All operating companies listing on the 
Exchange will be eligible to avail themselves of the proposed modified 
initial fee schedule. Therefore, the Exchange does not believe that the 
proposed changes to the initial listing fee schedule will have any 
meaningful effect on the competition among issuers listed on the 
Exchange. The purpose of the proposed group discount for REITs under 
common external management is

[[Page 38391]]

recognize the significant efficiencies the Exchange experiences in 
dealing with a common manager for multiple issuers. As only a small 
percentage of listed companies are expected to qualify for the proposed 
discount, the Exchange does not believe that it 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 in response, and 
because issuers may change their listing venue, the Exchange does not 
believe its proposed fee changes can impose any burden on intermarket 
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. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \9\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \10\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such 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 shall institute proceedings under 
Section 19(b)(2)(B) \11\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \11\ 15 U.S.C. 78s(b)(2)(B).
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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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File No. SR-NYSEArca-2021-56 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 No. NYSEArca-2021-56. 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 (http://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 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File No. NYSEArca-2021-56, and should be submitted on 
or before August 10, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-15340 Filed 7-19-21; 8:45 am]
BILLING CODE 8011-01-P