Document ID: SEC-2021-1822-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC
Posted Date: 2021-12-29T05:00Z

[Federal Register Volume 86, Number 247 (Wednesday, December 29, 2021)]
[Notices]
[Pages 74198-74201]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-28252]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93862; File No. SR-NYSE-2021-76]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change To Amend the NYSE Listed 
Company Manual To Amend Certain of Its Listing and Annual Fees

December 22, 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 December 20, 2021, 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 Sections 902.02, 902.03 and 902.11 
of the NYSE Listed Company Manual (the ``Manual'') to amend certain of 
its listing fees. 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 certain of its listing fees set 
forth in Chapter 9 of the Manual. Changes to initial listing fees will 
take effect immediately and changes to annual fees will take effect 
from the beginning of the calendar year commencing on January 1, 2022. 
The proposed amendments only reflect changes in the amounts charged for 
the initial listing of securities and on an annual basis thereafter and 
do not reflect any change in the services provided to the issuer in 
connection with such listing.
    Currently, when an issuer first lists a class of common shares 
(i.e., when an issuer lists a class of common shares and has no other 
class of common shares listed on the Exchange at the time of such 
listing), the Exchange charges listing fees for such class at a rate of 
$0.004 per share, subject to a minimum and maximum fee of $150,000 and 
$295,000, respectively. The Exchange also charges a one-time special 
fee of $50,000 which is included in the minimum and maximum fee. The 
Exchange proposes to replace the per share fee with a flat fee of 
$295,000 when an issuer first lists a class of common shares and 
eliminate the special one-time charge and minimum and maximum fee 
levels. The Exchange proposes to make conforming changes throughout 
Sections 902.02 and 902.03 of the Manual to eliminate references to the 
special one-time charge and the minimum and maximum listing fees. As 
the one-time charge is currently included in the maximum initial 
listing fee of $295,000 and all companies will be paying the maximum 
fee as a flat fee going forward, the Exchange is proposing to eliminate 
the one-time charge.\4\ The Exchange also proposes to: (i) Revise the 
rules in several places to

[[Page 74199]]

make clear that the $295,000 flat fee is applicable only when an issuer 
lists a class of common shares and has no other class of common shares 
listed on the Exchange at the time of such listing and (ii) modify 
examples of how to calculate listing fees which are included in Section 
902.03 to reflect the effect on those examples of the proposed flat 
initial listing fee. The Exchange also proposes to add text to Section 
902.03 to note that the fees for Investment Company Units, 
streetTRACKS[supreg] Gold Shares, Currency Trust Shares, and Commodity 
Trust Shares are set forth in Section 902.07.
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    \4\ The first time an issuer lists an Equity Investment Tracking 
Stock (as defined in Section 102.07) that is the issuer's only class 
of common equity securities listed on the Exchange, the fee is a 
fixed amount of $100,000, which amount includes the special charge 
of $50,000. The proposed amendment would remove the reference to the 
inclusion of the $50,000 special charge from the fee provision in 
relation to Equity Investment Tracking Stocks, as a separate fee for 
those securities and the concept will no longer exist elsewhere in 
the rules.
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    In addition, the Exchange proposes to change the annual fee set 
forth in Section 902.03 of the Manual from $0.00113 per share to 
$0.00117 per share for each of the following: A primary class of common 
shares (including Equity Investment Tracking Stocks); each additional 
class of common shares (including tracking stock); a primary class of 
preferred stock (if no class of common shares is listed); each 
additional class of preferred stock (whether primary class is common or 
preferred shares); and each class of warrants. In addition, the minimum 
annual fee will be increased from $71,000 to $74,000 for each of (i) a 
primary class of common shares (including Equity Investment Tracking 
Stocks) and (ii) a primary class of preferred stock (if no class of 
common shares is listed). The proposed increase in the per share rates 
and the minimum fees reflect increases in the costs the Exchange incurs 
in providing services to listed companies on an ongoing basis, as well 
as increases in the costs of conducting its related regulatory 
activities. The Exchange does not propose to increase the minimum 
annual fees charged for additional classes of common shares (including 
tracking stocks), preferred stocks that are not the primary listed 
equity security, or warrants. The Exchange believes that the benefits 
issuers receive in connection with those listings are consistent with 
the current minimum fee levels, as those types of listings do not 
generally entitle issuers to the types of services provided in 
connection with a primary common stock listing or primary preferred 
stock listing and the Exchange has therefore not incurred the same 
level of cost increase associated with them.
    Section 902.03 includes a paragraph describing the application of 
the initial listing fee as currently in effect in the situation where a 
listed real estate investment trust (``REIT'') is structured as an 
umbrella partnership real estate investment trust (``UPREIT'') and the 
operating partnership through which the REIT holds its assets is also 
listed on the Exchange. In such cases, the initial listing fees are 
applied to those two issuers on a combined basis at the time of initial 
listing and the bill is divided between the two issuers so that the 
REIT will be billed an amount equal to the same percentage of the 
minimum or maximum fee amount as the REIT's ownership interest in the 
operating partnership represents of the total equity of the operating 
partnership. Consistent with the adoption of a flat initial listing fee 
of $295,000, the Exchange proposes to provide that the REIT will be 
billed an amount equal to the same percentage of the $295,000 flat fee 
as the REIT's ownership interest in the operating partnership 
represents of the total equity of the operating partnership.
    Section 902.11 of the Manual currently provides for the application 
to an Acquisition Company's common shares and warrants of annual fees 
that are the same as fees for common shares set forth in Section 902.03 
(with an aggregate annual limit of $85,000) and the fees set forth in 
Section 902.06 applicable to the warrants. The Exchange proposes to 
replace these fees for Acquisition Companies with a flat annual fee of 
$85,000 for calendar years starting on or after January 1, 2022. The 
flat annual fee would cover both an Acquisition Company's common shares 
and warrants, if any. Accordingly, an Acquisition Company's common 
shares and warrants will no longer be subject to the separate annual 
fee schedules applicable to those classes of securities in Sections 
902.03 and 902.06 of the Manual, respectively.
    The Exchange proposes to make the aforementioned fee increases in 
Section 902.03 to better reflect the value of such listing to issuers. 
In particular, the Exchange believes it is reasonable to apply a flat 
fee when an issuer first lists a class of common shares as the value to 
the issuer to listing are the same regardless of the number of shares 
the issuer has outstanding. The Exchange notes that the substantial 
majority of issuers that have recently listed on the Exchange paid the 
$295,000 maximum fee under the Exchange's current fee structure. 
Therefore, the adoption of a $295,000 flat initial listing fee will not 
result in an initial fee increase for most issuers. While some issuers 
would pay a higher initial listing fee under the proposed flat fee than 
under the current rate, the Exchange believes that this increase is not 
unfairly discriminatory, as the resources the Exchange expends in 
connection with the initial listing of those companies are typically 
consistent with the resources the Exchange expends on many companies 
that are already subject to the $295,000 maximum fee.
    In addition, the Exchange observes that many issuers may not know 
their share structure or how many shares will ultimately be outstanding 
at the time they are considering whether to list on the Exchange. 
Therefore, the Exchange believes that adopting a flat initial fee and 
eliminating the special one-time charge will provide prospective 
issuers with greater transparency on the costs associated with 
initially listing on the Exchange.
    The revised annual fees will be applied in the same manner to all 
issuers with listed securities in the affected categories and the 
changes will not disproportionately affect any specific category of 
issuers.
    The proposed adoption of a flat annual fee for Acquisition 
Companies is in response to issuer feedback. Most Acquisition Companies 
issue a unit that contains a common share and fraction of a warrant. In 
most cases, the current fee schedules result in Acquisition Companies 
paying an annual fee equal to the existing $85,000 maximum. Adoption of 
a flat $85,000 annual fee for an Acquisition Company's common shares 
and warrants, if any, will therefore not result in an annual fee 
increase for most Acquisition Companies and will have the benefit of 
making the fee level easier to implement.
    The proposed rule changes would not affect the Exchange's 
commitment of resources to its regulatory oversight of the listing 
process, or its regulatory programs.
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. 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

[[Page 74200]]

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 Proposed Change Is Reasonable
    The Exchange operates in a highly competitive marketplace for the 
listing of the various categories of securities affected by the 
proposed initial and 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,\8\ 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.'' \9\
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    \8\ Release No. 34-51808 (June 9, 2005); 70 FR 37496 (June 29, 
2005).
    \9\ 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 a flat initial 
listing fee and small increase to the annual fees for various 
categories of equity securities represent a reasonable attempt to 
address the Exchange's increased costs in servicing these listings 
while continuing to attract and retain listings.
    The Exchange proposes to make the aforementioned fee increases in 
Section 902.03 to better reflect the value of such listing to issuers. 
In particular, the Exchange believes it is reasonable to apply a flat 
fee when an issuer first lists a class of common shares as the value to 
the issuer to listing are the same regardless of the number of shares 
the issuer has outstanding. The Exchange notes that the substantial 
majority of issuers that have recently listed on the Exchange paid the 
$295,000 maximum fee under the Exchange's current fee structure. 
Therefore, the adoption of a $295,000 flat initial listing fee will not 
result in an initial fee increase for most issuers. While some issuers 
would pay a higher initial listing fee under the proposed flat fee than 
under the current rate, the Exchange believes that this increase is not 
unfairly discriminatory, as the resources the Exchange expends in 
connection with the initial listing of those companies are typically 
consistent with the resources the Exchange expends on many companies 
that are already subject to the $295,000 maximum fee. As the one-time 
charge is currently included in the maximum initial listing fee of 
$295,000 and all companies will be paying the current maximum fee as a 
flat fee going forward, the Exchange proposes to eliminate the one-time 
charge.
    The Exchange does not propose to increase the minimum annual fees 
charged for additional classes of common shares (including tracking 
stocks), preferred stocks that are not the primary listed equity 
security, or warrants. The Exchange believes that the benefits issuers 
receive in connection with those listings are consistent with the 
current minimum fee levels, as those types of listings do not generally 
entitle issuers to the types of services provided in connection with a 
primary common stock listing or primary preferred stock listing.
    The proposed adoption of a flat annual fee for Acquisition 
Companies is in response to issuer feedback. Most Acquisition Companies 
issue a unit that contains a common share and fraction of a warrant. In 
most cases, the current fee schedules result in Acquisition Companies 
paying an annual fee equal to the existing $85,000 maximum. Adoption of 
a flat $85,000 annual fee for an Acquisition Company's common shares 
and warrants, if any, will therefore not result in an annual fee 
increase for most Acquisition Companies and will have the benefit of 
making the fee level easier to implement. The Exchange does not provide 
Acquisition Companies with many of the services provided to listed 
companies that are operating companies until after their business 
combination is completed. Accordingly, the Exchange does not believe it 
is appropriate to increase annual fees for Acquisition Companies at 
this time.
The Proposal Is an Equitable Allocation of Fees
    The Exchange believes its proposal equitably allocates its fees 
among its market participants.
    The Exchange believes it is equitable to apply a flat fee when an 
issuer first lists a class of common shares. Under current rules, 
because of the existing minimum and maximum initial listing fees, the 
effective per-share initial listing fee is different for almost every 
issuer. Applying a flat initial listing fee to each issuer, therefore, 
equitably allocates fees among issuers.
    The Exchange believes that the proposed amendments to the annual 
fees for equity securities are equitable because they do not change the 
existing framework for such fees, but simply increase certain of the 
minimum fees and per unit rates by a small amount to reflect increased 
operating costs. Similarly, as the fee structure remains effectively 
unchanged apart from small increases in the rates paid by all issuers, 
the changes to annual fees for equity securities neither target nor 
will they have a disparate impact on any particular category of issuer.
    The Exchange believes it is equitable to apply a flat initial 
listing fee to all Acquisition Companies. In most cases, the current 
fee schedules result in Acquisition Companies paying an annual fee 
equal to the existing $85,000 maximum. Adoption of a flat $85,000 
annual fee for an Acquisition Company's common shares and warrants, if 
any, will therefore not result in an annual fee increase for most 
Acquisition Companies and will have the benefit of making the fee level 
easier to implement.
The Proposal Is Not Unfairly Discriminatory
    The Exchange believes that the proposal is not unfairly 
discriminatory. The proposed fee changes are not unfairly 
discriminatory because the same fee schedule will apply to all listed 
issuers. 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

[[Page 74201]]

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 in response, 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.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or up to 90 days (i) as the Commission may designate 
if it finds such longer period to be appropriate and publishes its 
reasons for so finding or (ii) as to which the self-regulatory 
organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-2021-76 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-2021-76. 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 
10:00 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 Number SR-NYSE-2021-76 and should be 
submitted on or before January 19, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-28252 Filed 12-28-21; 8:45 am]
BILLING CODE 8011-01-P