Document ID: SEC-2022-1162-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC
Posted Date: 2022-09-01T04:00Z

[Federal Register Volume 87, Number 169 (Thursday, September 1, 2022)]
[Notices]
[Pages 53805-53807]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-18857]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95613; No. SR-NYSE-2022-38]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Section 902.05 of the NYSE Listed Company Manual To Establish a 
Cap on Listing Fees Billed When a Structured Product Is Issued as a 
Dividend

August 26, 2022.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on August 22, 2022, 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 Section 902.05 of the NYSE Listed 
Company Manual (the ``Manual'') to establish a cap on listing fees 
billed when a structured product is issued as a dividend.\4\ 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.
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    \4\ The Exchange originally filed to amend the Manual on August 
16, 2022 (SR-NYSE-2022-33) and withdrew such filing on August 22, 
2022.
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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
    Section 902.05 of the Manual sets forth initial listing fees and 
annual fees applicable to structured products listed under Section 
703.18, the equity criteria set out in Section 703.19, and Section 
703.21, and traded on the equity floor of the Exchange. The term 
``retail debt securities'' refers to debt securities that are listed 
under the equity criteria set out in Section 703.19 and traded on the 
equity floor of the Exchange. Subject to certain limitations set forth 
in the rule, issuers must pay listing fees for structured products at a 
per share rate using the following tiered fee structure:
     For an issuance up to and including two million shares, 
the rate is $0.01475 per share;
     For an issuance over two million shares and up to and 
including four million shares, the rate is $0.0074 per share;
     For an issuance over four million shares and up to and 
including 300 million shares, the rate is $0.0035 per share;
     For an issuance over 300 million shares, the rate is 
$0.0019 per share.
    The Exchange now proposes to adopt a cap on listing fees in 
relation to structured products issued as a dividend. As proposed, 
listing fees on structured products issued as a dividend would be 
capped at $150,000 per issuance. The Exchange notes that the issuer in 
such cases is not receiving any cash or other consideration and would 
therefore not be generating any funds out of which it could pay the 
listing fees, as would be the case if it sold the securities. 
Therefore, the Exchange believes it is reasonable to apply a lower fee 
cap than is applied when structured products are sold in a capital 
raising transaction, as is more usually the case. The Exchange notes 
that the Manual already contains a similar $150,000 cap on listing fees 
for shares of common stock issued in

[[Page 53806]]

connection with a stock split or stock dividend.\5\
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    \5\ See Securities Exchange Act Release No. 52463 (September 16, 
2005); 70 FR 55933 (September 23, 2005) (SR-NYSE-2005-35) (notice of 
the proposal to adopt this approach with respect to stock splits). 
See also Securities Exchange Act Release No. 52696 (October 28, 
2005); 70 FR 66881 (November 3, 2005) (SR-NYSE-2005-35) (approval of 
the adoption of this approach with respect to stock splits).
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    The Exchange proposes to remove from Section 902.05 the reference 
to the fact that the fees set forth in that rule are applicable to 
securities listed under Section 703.21. Section 703.21 formerly set 
forth listing standards for the listing of equity-linked debt 
securities. However, the Exchange has reorganized its rules, so that 
its listing standards for equity-linked debt securities (now call 
equity linked notes or ``ELNs'') are now set forth in Rule 5.2(j)(2) 
rather than Section 703.21 and Section 703.21 is reserved.\6\ As such, 
the reference to Section 703.21 in Section 902.05 is no longer relevant 
and should be deleted. The Exchange notes that it does not currently 
have any listed ELNs and that it would have to adopt fees prior to 
listing any ELNs under Rule 5.2(j)(2). If the Exchange concludes that 
the appropriate fees for ELNs under Rule 5.2(j)(2) would be different 
from those provided for structured products under Section 902.05, the 
filing proposing such fees would set forth the Exchange's reasons for 
believing that this difference was not inequitable or unfairly 
discriminatory.
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    \6\ See Securities Exchange Act Release No. 84351 (October 3, 
2018); 83 FR 50980 (October 10, 2018) (SR-NYSE-2018-30) (among other 
things, deleting Section 703.21). See also Securities Exchange Act 
Release No. 80214 (March 10, 2017); 82 FR 14050 (March 16, 2017) 
(SR-NYSE-2016-44) (among other things, adopting Rule 5.2(j)(2) for 
the listing of ELNs; Rule 5.2(j)(2) is substantially the same as the 
listing standard for ELNs set forth in NYSE Arca Equities Rule 
5.2(j)(2)).
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    The Exchange also proposes to remove from Section 902.05 references 
to the annual fees that were applicable prior to 2019, as that fee is 
no longer relevant.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\7\ in general, and furthers the 
objectives of Section 6(b)(4) \8\ 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,\9\ 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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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposal to cap listing fees for 
structure products issued as a dividend at $150,000 per issuance is 
equitable and not unfairly discriminatory. The Exchange notes that the 
issuer in such cases is not receiving any cash or other consideration 
and would therefore not be generating any funds out of which it could 
pay the listing fees, as would be the case if it sold the securities. 
Therefore, the Exchange believes it is reasonable to apply a lower fee 
cap than is applied when structured products are sold in a capital 
raising transaction, as is more usually the case. The Exchange notes 
that the Manual already contains a similar $150,000 cap on listing fees 
for shares of common stock issued in connection with a stock split or 
stock dividend.
    The removal from Section 902.05 of the reference to the fact that 
the fees set forth in that rule are applicable to securities listed 
under Section 703.21 is not inequitable or unfairly discriminatory, as 
it reflects the fact that ELNs are now listed under Rule 5.2(j)(2) 
rather than Section 703.21. As such, the reference to Section 703.21 in 
Section 902.05 is no longer relevant and should be deleted. The 
Exchange notes that it does not currently have any listed ELNs and that 
it would have to adopt fees prior to listing any ELNs under Rule 
5.2(j)(2). If the Exchange concludes that the appropriate fees for ELNs 
under Rule 5.2(j)(2) would be different from those provided for 
structured products under Section 703.21 [sic], the filing proposing 
such fees would set forth the Exchange's reasons for believing that 
this difference was not inequitable or unfairly discriminatory.
    The removal of the references to annual fees applied before 2019 
has no substantive effect, as that fee is no longer applied by its 
terms.
    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 not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed fee cap will be 
applicable to all similarly situated issuers on the same basis.
    The Exchange does not believe that the proposed fee cap will have 
any meaningful effect on the competition among issuers listed on the 
Exchange. 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 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

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \10\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \11\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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) \12\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \12\ 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:

[[Page 53807]]

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-2022-38 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-2022-38. 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 Number SR-NYSE-2022-38, and should be submitted on 
or before September 22, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-18857 Filed 8-31-22; 8:45 am]
BILLING CODE 8011-01-P