Document ID: SEC-2022-1357-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE American, LLC
Posted Date: 2022-10-17T04:00Z

[Federal Register Volume 87, Number 199 (Monday, October 17, 2022)]
[Notices]
[Pages 62910-62913]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-22444]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96021; File No. SR-NYSEAMER-2022-42]

Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Change To Amend Sections 
140 and 141 of the NYSE American Company Guide To Waive Initial Listing 
Fees and Annual Listing Fees for the Remainder of the Year the Listing 
Occurs for an Issuer Listing Upon Closing of Its Acquisition of an 
Exchange-Listed Special Purpose Acquisition Company

October 11, 2022.
    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 September 30, 2022, NYSE American LLC (``NYSE American'' 
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 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\ 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 140 and 141 of the NYSE 
American Company Guide (``Company Guide'') to waive initial listing 
fees and the prorated annual fee for the first partial year of listing 
for any issuer that is not itself listed on a national securities 
exchange immediately prior to its initial listing on the Exchange but 
is listing a class of equity securities upon closing of its acquisition 
of a special purpose acquisition company which had a class of equity 
securities listed on the Exchange or another national securities 
exchange prior to the closing of such acquisition. The proposed 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 sections 140 and 141 of the Company 
Guide to waive initial listing fees and the prorated annual fee for the 
first partial year of listing for any issuer that is not itself listed 
on a national securities exchange immediately prior to its initial 
listing on the Exchange but is listing a class of equity securities 
upon closing of its acquisition of a special purpose acquisition 
company (``SPAC'') which had a class of equity securities listed on the 
Exchange or another national securities exchange prior to the closing 
of such acquisition.
    When a SPAC consummates its business combination, the SPAC is 
typically the legal acquirer in the transaction and, provided it meets 
the initial listing standards applied in connection with a business 
combination

[[Page 62911]]

by a listed SPAC, it can remain listed on the Exchange. Section 142(g) 
of the Company Guide provides that a company listed pursuant to section 
119 (``Listing of Companies Whose Business Plan is to Complete One or 
More Acquisitions'') which remains listed on NYSE American upon 
consummation of its business combination will not be subject to any 
fees in relation to the issuance of any additional shares in connection 
with (1) the consummation of the business combination or (2) a 
transaction which is occurring at the same time as the business 
combination with a closing contractually contingent on the consummation 
of the business combination. The NYSE American- listed SPAC has already 
been billed its annual fees for that calendar year and will not incur 
any prorated annual fees for the issuance of additional shares.\4\ 
Similar to the treatment for fee purposes of a SPAC that is listed on 
the Exchange and chooses to remain listed after its business 
combination, a SPAC that is listed on another national securities 
exchange and that chooses to transfer to NYSE American at the time of 
its business combination is not subject to any initial listing fees or 
annual fees for the first part year of listing on NYSE American. This 
is because section 140 of the Company Guide provides that any company 
listing any class of equity securities upon transfer from another 
market will not be subject to any initial listing fees in connection 
with such listing. Similarly, section 141 of the Company Guide provides 
that issuers transferring the listing of their primary class of common 
shares from another national securities exchange are not required to 
pay annual fees with respect to that primary class of common shares or 
any other class of securities transferred in conjunction therewith for 
the remainder of the calendar year in which the transfer occurs.
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    \4\ Such shares are reflected in the full-year annual fee bill 
for the year after the business combination.
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    By contrast to the above-described fee waivers, if a company that 
is not listed on the Exchange or another national securities exchange 
merges with a NYSE American-listed SPAC or a SPAC listed on another 
national securities exchange and the non-listed company is the acquirer 
in the transaction, the non-listed company is treated as a new listing 
and must pay initial listing fees and prorated annual fees in relation 
to all shares issued and outstanding at the time of initial listing.
    To address this disparity between a NYSE American-listed SPAC or a 
SPAC listed on another national securities exchange that is the 
acquirer in a business combination and a business combination involving 
a non-listed issuer where such issuer is the acquirer, the Exchange 
proposes to amend section 140 of the Company Guide. Specifically, as 
amended, section 140 would waive initial listing fees in cases where a 
company that is not itself listed on a national securities exchange 
immediately prior to its initial listing on the Exchange is listing a 
class of equity securities upon closing of its acquisition of a SPAC 
which had a class of equity securities listed on the Exchange or 
another national securities exchange prior to the closing of such 
acquisition. Similarly, the Exchange proposes to amend section 141 of 
the Company Guide to waive with respect to any such company the 
requirement to pay annual fees with respect to that primary class of 
common shares or any other class of securities listed in conjunction 
therewith for the remainder of the calendar year in which the listing 
occurs. The Exchange believes the similar treatment of a NYSE American-
listed SPAC or a SPAC listed on another national securities exchange 
that is the acquirer in a business combination and a business 
combination involving a non-listed issuer where such issuer is the 
acquirer is reasonable because the ultimate listed company is the same. 
The Exchange believes that the differential treatment accorded to 
business combinations where the NYSE American listed SPAC or SPAC 
listed on another national securities exchange is legally acquired by 
an unlisted company is anomalous. The decision whether to structure a 
business combination with the SPAC as the legal acquirer rather than 
the other party does not result in the listing of a substantively 
different entity. Accordingly, the Exchange believes there is no basis 
for charging fees purely on the basis of the structure of the business 
combination chosen by the parties.
    The Exchange notes that, in the case of a listing of a non-listed 
company upon acquisition of a SPAC that was listed on another national 
securities exchange, the SPAC would have paid initial listing fees and 
annual fees for that calendar year to the other national securities 
exchange. The Exchange believes the proposed waivers would therefore 
enable NYSE American to better compete for the listing of non-listed 
companies acquiring SPACs listed on other national securities exchanges 
than it can currently, as the listing of the combined company would not 
result in any fees under the rules of either of the other national 
securities exchanges that list equity securities,\5\ thereby creating a 
disincentive to listing on NYSE American. The Exchange believes that by 
addressing these competitive concerns, the proposal is not unfairly 
discriminatory.
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    \5\ See NYSE Listed Company Manual Section 902.02 and Nasdaq 
Marketplace Rule 5910(a)(7)(v).
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    The Exchange believes that the proposed rule change 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,\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)(1).
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The Proposed Change Is Reasonable
    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.
    Given this competitive environment, the Exchange believes that the 
proposed

[[Page 62912]]

fee waivers are reasonable because the cost of paying initial listing 
fees and the first part year of annual fees to the NYSE American acts 
as a disincentive to listing on the Exchange.
The Proposal Is an Equitable Allocation of Fees
    The Exchange believes that the proposed fee waivers are equitable 
because they avoid an anomalous fee outcome arising from the manner in 
which a SPAC business combination has been structured.
The Proposal Is Not Unfairly Discriminatory
    The Exchange believes that the proposal is not unfairly 
discriminatory, because the proposed waivers are solely intended to 
avoid the impact on a limited group of issuers of an anomalous fee 
outcome arising from the manner in which a SPAC business combination 
has been structured. Section 142 of the Company Guide includes a 
specific waiver of all listing fees for the issuance of shares by a 
NYSE American-listed SPAC which remains listed upon consummation of its 
business combination in relation to the issuance of any additional 
shares in connection with (1) the consummation of the business 
combination or (2) a transaction which is occurring at the same time as 
the business combination with a closing contractually contingent on the 
consummation of the business combination. The NYSE American-listed SPAC 
has already been billed its annual fees for that calendar year and will 
not incur any prorated fees for the issuance of additional shares.\9\ 
By contrast, if a company that is not listed on the Exchange or another 
national securities exchange merges with a NYSE American-listed SPAC 
and the non-listed company is the acquirer in the transaction, the non-
listed company is treated as a new listing and must pay initial listing 
fees and prorated annual fees in relation to all shares issued and 
outstanding at the time of initial listing.
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    \9\ Such shares are reflected in the full-year annual fee bill 
for the year after the business combination.
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    A SPAC is a shell company with no business operations. 
Consequently, the parties to a business combination between a SPAC and 
an operating company have significant flexibility in how they choose to 
structure the business combination, including in determining which 
entity will be the legal acquirer. The Exchange is proposing to amend 
its fee structure to reflect the incidental nature of the resulting 
SPAC business combination and to avoid treating companies undergoing 
similar business combinations disparately. By contrast to a SPAC 
business combination, there are typically more significant limitations 
on the ability of the parties to a merger between two operating 
companies to make decisions about which entity will be the acquirer, 
including, for example, the desire to maintain the acquirer's SEC 
registration and concerns about how to present the combined entity to 
the market. As such, it is much more likely that the listing fee 
implications of how the transaction is structured would be a major 
consideration for the parties to a SPAC business combination than would 
be the case in a merger between two operating companies. As the 
implications of the proposed fee waivers for decisions relating to the 
transaction structures utilized by unlisted companies listing in 
connection with the acquisition of a SPAC are typically greater than 
for other companies listing in conjunction with merger transactions, 
the proposed waivers are not unfairly discriminatory.
    The Exchange notes that, in the case of a listing of a non-listed 
company upon acquisition of a SPAC that was listed on another national 
securities exchange, the SPAC would have paid initial listing fees and 
annual fees for that calendar year to the other national securities 
exchange. The Exchange believes the proposed waivers would therefore 
enable NYSE American to better compete for the listing of non-listed 
companies acquiring SPACs listed on other national securities exchanges 
than it can currently, as the listing of the combined company would not 
result in any fees under the rules of either of the other national 
securities exchanges that list equity securities,\10\ thereby creating 
a disincentive to listing on NYSE American. The Exchange believes that 
by addressing these competitive concerns, the proposal is not unfairly 
discriminatory.
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    \10\ See note 5 supra.
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    Finally, the Exchange believes that it is subject to significant 
competitive forces, as described below in the Exchange's statement 
regarding the burden on competition.
    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.
Intramarket Competition
    The proposed waiver will be available to all similarly situated 
issuers on the same basis. The proposed waiver will address an 
anomalous discrepancy in fee treatment between business combinations of 
SPACs listed on the Exchange and companies that are not listed on a 
national securities exchange based solely on which entity is the legal 
survivor in the transaction. The Exchange does not believe that the 
proposed waivers 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 
change can impose any burden on intermarket competition.
    The Exchange notes that, in the case of a listing of a non-listed 
company upon acquisition of a SPAC that was listed on another national 
securities exchange, the SPAC would have paid initial listing fees and 
annual fees for that calendar year to the other national securities 
exchange. The Exchange believes the proposed waivers would therefore 
enable NYSE American to better compete for the listing of non-listed 
companies acquiring SPACs listed on other national securities exchanges 
than it can currently, as the listing of the combined company would not 
result in any fees under the rules of either of the other national 
securities exchanges that list equity securities, thereby creating a 
disincentive to listing on NYSE American.

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) \11\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \12\

[[Page 62913]]

thereunder, because it establishes a due, fee, or other charge imposed 
by the Exchange.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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) \13\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \13\ 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-NYSEAMER-2022-42 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-NYSEAMER-2022-42. 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-NYSEAMER-2022-42, and should be 
submitted on or before November 7, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-22444 Filed 10-14-22; 8:45 am]
BILLING CODE 8011-01-P