Document ID: SEC-2012-1775-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE MKT LLC
Posted Date: 2012-11-02T04:00Z

[Federal Register Volume 77, Number 213 (Friday, November 2, 2012)]
[Notices]
[Pages 66207-66209]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-26859]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68117; File No. SR-NYSEMKT-2012-51]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Amending Sections 140 
and 141 of the NYSE MKT LLC Company Guide To Amend Annual Fees and 
Certain Other Listing Fees Included Therein and To Make Technical and 
Conforming Changes

October 26, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on October 16, 2012, NYSE MKT LLC (the ``Exchange'' or ``NYSE 
MKT'') 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 Exchange. 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\ 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 certain of the fees included in the 
NYSE MKT Company Guide and to make technical and conforming changes. 
The text of the proposed rule change is available on the Exchange's Web 
site 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 Sections 140 and 141 of its Company 
Guide to amend certain of the fees included therein and to make 
technical and conforming changes. The Exchange proposes to immediately 
reflect the proposed changes in the Company Guide, but not to implement 
the proposed changes until January 1, 2013.\3\
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    \3\ The Exchange has proposed changes to the Company Guide, as 
reflected in Exhibit 5 attached hereto, in a manner that would 
permit readers of the Company Guide to identify the changes that 
would be implemented on January 1, 2013.
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    The Exchange proposes to amend Section 140 of its Company Guide, 
which provides for Original Listing Fees. The Exchange proposes to 
increase the Original Listing Fee charged in connection with the 
listing of new shares of common stock or common stock equivalents, 
including securities issued by non-U.S. companies, for issuers with 
outstanding shares in excess of 15,000,000. The Original Listing Fee 
for such issuers would increase from $70,000 to $75,000.
    The Exchange also proposes to amend Section 141 of its Company 
Guide to increase its Annual Fees for stock issues as follows:
    (i) for issuers with 50,000,000 shares outstanding or less, the 
Annual Fee would be increased by $2,500 (or 9.1%), from $27,500 to 
$30,000;
    (ii) for issuers with 50,000,001 to 75,000,000 shares outstanding, 
the

[[Page 66208]]

Annual Fee would be increased by $3,500 (or 9.6%), from $36,500 to 
$40,000; and
    (iii) for issuers with shares outstanding in excess of 75,000,000, 
the Annual Fee would be increased by $5,000 (or 12.5%), from $40,000 to 
$45,000.
    The Exchange also proposes certain non-substantive changes. 
Specifically, the Exchange proposes to remove the asterisks and 
accompanying text that states that the Annual Fees are applicable as of 
January 1, 2010 because this text is obsolete and unnecessary.
    The proposed changes to the Company Guide are intended to increase 
the overall revenue that the Exchange collects relating to listings 
from the issuers described above and to add clarity to the Company 
Guide. The Exchange's Original Listing Fees and Annual Fees have not 
been increased since 2009.\4\ The increased revenue will help to offset 
the costs related to such listings and the resulting value that such 
listings provide to the issuers. The Exchange's costs related to 
listings include, but are not limited to, rulemaking initiatives, 
listing administration processes, issuer services, and administration 
of other regulatory functions related to listing. The proposed change 
is not otherwise intended to address any other problem, and the 
Exchange is not aware of any significant problem that the affected 
issuers would have in complying with the proposed change.
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    \4\ See Securities Exchange Act Release No. 59560 (Mar. 11, 
2009), 74 FR 11392 (Mar. 17, 2009) (SR-NYSEALTR-2009-02).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Securities Exchange Act of 1934 (the 
``Act''),\5\ in general, and furthers the objectives of Section 6(b)(4) 
of the Act,\6\ in particular, because it provides for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members, issuers, and other persons using its facilities and does not 
unfairly discriminate between customers, issuers, brokers, or 
dealers.\7\
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
    \7\ The Commission notes that Section 6(b)(5) of the Act 
contains the provision that states rules of an exchange ``are not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.'' See 15 U.S.C. 78f(b)(5).
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    The Exchange believes that amending Section 140 of the Company 
Guide to increase the Original Listing Fee for issuers with outstanding 
shares in excess of 15,000,000 and amending Section 141 of the Company 
Guide to increase the Annual Fees is reasonable because the resulting 
fees would help to offset the Exchange's costs related to listings. The 
fee increases also would reflect the value that listings provide to the 
issuers, and the Exchange does not believe the increases to be 
material. In this regard, the Exchange notes that it has not recently 
increased these fees, but continually enhances and upgrades the level 
of service it provides in the listings area, including with respect to 
technology, compliance, and other regulatory matters related to 
listings.\8\ The Exchange's costs with respect to listings include, but 
are not limited to, rulemaking initiatives, listing administration 
processes, issuer services, and administration of other regulatory 
functions related to listing. The Exchange believes that the proposed 
changes are reasonable because the increased fees would be used by the 
Exchange to offset, in part, these costs. As such, the Exchange 
believes that the proposed fee changes would have no negative impact on 
its ability to continue to adequately fund its regulatory program or 
the services the Exchange provides to issuers. In addition, the 
Exchange believes that the proposed fee increases are reasonable 
because the Exchange's Original Listing Fees and Annual Fees would 
still remain lower than a listing tier on at least one other 
exchange.\9\
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    \8\ See supra note 4.
    \9\ For example, the entry fees for NASDAQ Global Market range 
from $125,000 to $225,000, and the annual fees range from $35,000 to 
$99,500. See NASDAQ Rules 5910(a)(1) and 5910(c)(1).
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    The Exchange also believes that the proposed Original Listing Fee 
increase for issuers with outstanding shares in excess of 15,000,000 is 
equitable and not unfairly discriminatory because the Exchange wants to 
continue to incentivize small and large issuers that are qualified to 
list on the Exchange to do so, and not raising the Original Listing 
Fees for smaller issuers will help maintain that incentive, as such 
issuers generally are more cost-conscious. The Exchange does not 
believe the proposed increase in the Original Listing Fee for issuers 
with outstanding shares in excess of 15,000,000 will be a disincentive 
to list on the Exchange or unfairly discriminatory because it is the 
same as the entry fee charged by another national securities exchange 
for such issuers.\10\ As such, this fee increase would allow the 
Exchange to remain competitive with other exchanges.
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    \10\ See NASDAQ Rule 5920(a)(1). NASDAQ and other exchanges also 
have differential entry fees based on total shares outstanding. For 
example, the listing fees for the New York Stock Exchange LLC 
(``NYSE'') increase as the total number of shares outstanding at 
time of listing increases. See NYSE Listed Company Manual, Section 
902.03.
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    The Exchange believes that the proposed increases in Annual Fees 
also are equitably allocated and not unfairly discriminatory because 
all issuers will pay an increased amount in a narrow range of $2,500-
$5,000 (or 9.1% to 12.5%) based on total shares outstanding.\11\ By way 
of comparison, another exchange's last annual fee increase ranged from 
0% to 16.7% across its various tiers based on total shares 
outstanding.\12\ The Exchange believes that having slightly higher 
Annual Fee increases for issuers with more shares outstanding and a 
slightly higher fee increase in this instance is equitable and not 
unfairly discriminatory because such issuers generally have a larger 
number of shareholders that benefit from the liquidity and transparency 
that the continued listing offers.
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    \11\ Like NYSE MKT, other exchanges also have differential 
annual fees based on shares outstanding. See NASDAQ Rule 5910(c); 
NYSE Listed Company Manual, Section 902.03; and NYSE Arca Equities, 
Inc. Schedule of Fees and Charges for Exchange Services, available 
at www.nyse.com/pdfs/NYSEArca_Listing_Fees.pdf.
    \12\ See Securities Exchange Act Release No. 61669 (Mar. 5, 
2010), 75 FR 11958 (Mar. 12, 2010) (SR-NASDAQ-2009-081). The 
Exchange further notes that NASDAQ Rules 5910(c)(2), 5910(d)(5), and 
5920(c)(4) provide NASDAQ with the discretion to waive all or part 
of the annual listing fees.
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    The Exchange believes its tiered fee structure, with issuers with 
more total shares outstanding paying relatively higher Original Listing 
Fees and Annual Fees, is equitable and not unfairly discriminatory. 
Total shares outstanding provides a simple, objective, and efficient 
metric to take into account the relative size of issuers so that the 
Exchange can continue to incentivize listing by both large and small 
qualified companies; other exchanges also use such a metric.\13\ Total 
shares outstanding also is a metric within each issuer's control that 
provides predictability with respect to fees and does not subject such 
fees to the volatility of the market or other market or general 
economic events outside the issuer's control (e.g., the average number 
of shares traded per day).
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    \13\ See supra notes 10 and 11.
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    The Exchange further notes that it operates in a highly competitive 
market in which issuers can readily favor competing venues. In such an 
environment, the Exchange must continually review, and consider 
adjusting, its fees and services to remain competitive with other 
exchanges. For the reasons described above, the Exchange believes that 
the proposed

[[Page 66209]]

rule change reflects this competitive environment.
    Additionally, the Exchange believes that the non-substantive 
changes that are proposed, which are technical and conforming changes, 
are reasonable because they will result in the removal of unnecessary 
and obsolete text from the Company Guide. These changes are also 
equitable and not unfairly discriminatory because they will benefit all 
issuers and all other readers of the Company Guide.

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.

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) \14\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \15\ thereunder, because it establishes a due, fee, or other 
charge imposed by the NYSE MKT.
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 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.

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 Number SR-NYSEMKT-2012-51 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEMKT-2012-51. 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 Web site (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 Web site viewing and 
printing in the Commission's Public Reference Section, 100 F Street 
NE., Washington, DC 20549-1090, on official business days between 10:00 
a.m. and 3:00 p.m. Copies of the filing will also be available for 
inspection and copying at the NYSE's principal office and on its 
Internet Web site at www.nyse.com. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-NYSEMKT-2012-51 and should be submitted on or before 
November 23, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-26859 Filed 11-1-12; 8:45 am]
BILLING CODE 8011-01-P