Document ID: SEC-2018-0555-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC
Posted Date: 2018-04-09T04:00Z

[Federal Register Volume 83, Number 68 (Monday, April 9, 2018)]
[Notices]
[Pages 15187-15189]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-07113]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82985; File No. SR-NYSE-2018-11]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Fees Charged in Connection With the Filing of Supplemental 
Listing Applications in Connection With the Issuance of Convertible 
Securities

April 3, 2018.
    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 March 22, 2018, 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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend its fees charged in connection with 
the filing of listing applications in relation to the issuance of 
securities convertible into or exchangeable or exercisable for 
additional securities of a listed class of common stock. 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its fees charged in connection with 
the filing of listing applications in relation to the issuance of 
securities convertible into or exchangeable or exercisable for 
additional securities of a listed class of common stock (``Convertible 
Securities'').
    A listed company is required to submit a supplemental listing 
application (``SLAP'') prior to any issuance of Convertible Securities. 
Each time a listed company submits a SLAP in connection with the 
issuance of Convertible Securities, it must pay the minimum fee of 
$10,000 provided for by Section 902.03 of the Manual. The Exchange, 
however, does not charge any

[[Page 15188]]

listing fees with respect to the common shares issuable upon 
conversion, exchange or exercise of such securities at the time of 
submission of the required SLAP. Rather, Section 902.02 of the Manual 
provides that the listed company will be charged at the end of the 
calendar year [sic] for any such common shares that are issued that 
year.\4\
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    \4\ The Commission notes that Section 902.02 of the NYSE Listed 
Company Manual (``Manual'') states that with respect to shares that 
are not issued at the time of listing, such as for Convertible 
Securities, listing fees will accrue on these securities as of the 
date of issuance and such accrued listing fees will be billed at the 
beginning of the following year along with the issuer's annual fees. 
See Section 902.02 of the Manual (``Timing of Listing Fees for 
Subsequent Issuances'').
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    The Exchange has noted that it is not unusual for a listed company 
to enter into a number of different transactions in which it issues 
Convertible Securities. Each such transaction requires the submission 
of a SLAP, and the payment of the $10,000 minimum SLAP fee, incurring a 
significant fee expense even where the transactions covered by the 
SLAPs are immaterial in size.
    The Exchange proposes to amend Section 902.03 to limit the fee 
expense to listed companies. Under the proposed amendment, a $10,000 
SLAP fee will be billed with respect to the first SLAP solely in 
connection with the issuance of securities convertible into or 
exchangeable or exercisable for additional securities of a listed class 
that is submitted by a listed issuer in each calendar quarter. No 
additional SLAP fee will be billed for any other SLAP solely in 
connection with the issuance of securities convertible into or 
exchangeable or exercisable for additional securities of a listed class 
that is submitted during the rest of that calendar quarter.
    The Exchange does not expect that the reduction in fee revenue 
associated with this proposed amendment will have any effect on its 
ability to finance its regulatory program.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\5\ in general, and furthers the 
objectives of Section 6(b)(4) \6\ of the Act, in particular, in that it 
is designed to provide for the equitable allocation of reasonable dues, 
fees, and other charges and is not designed to permit unfair 
discrimination among its members and issuers and other persons using 
its facilities. The Exchange also believes that the proposed rule 
change is consistent with Section 6(b)(5) of the Act,\7\ 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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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
    \7\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change is consistent 
with Sections 6(b)(4) and 6(b)(5) of the Exchange Act in that it 
represents an equitable allocation of fees and does not unfairly 
discriminate among listed companies. In particular, the Exchange 
believes that the proposed amendment is not unfairly discriminatory 
because it will be applied the same to all listed companies submitting 
SLAPs in connection with the issuance of Convertible Securities. The 
Exchange also notes that listed companies will be charged per share 
listing fees with respect to any shares of common stock issued upon 
conversion, exchange or exercise of the Convertible Securities, thereby 
ensuring that the fees associated with a Convertible Securities 
transaction will be reflective of the size of the transaction.

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 
will not impose any burden competition as its sole purpose is to 
provide a limited relief from the listing fees a company incurs when it 
issues Convertible Securities in a series of separate transactions 
during a calendar quarter.

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) \8\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \9\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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) \10\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \10\ 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 [email protected]. Please include 
File Number SR-NYSE-2018-11 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-2018-11. 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

[[Page 15189]]

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 such 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 Number SR-NYSE-2018-11, and should be 
submitted on or before April 30, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-07113 Filed 4-6-18; 8:45 am]
 BILLING CODE 8011-01-P