Document ID: SEC-2021-0801-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Long-Term Stock Exchange
Posted Date: 2021-06-03T04:00Z

[Federal Register Volume 86, Number 105 (Thursday, June 3, 2021)]
[Notices]
[Pages 29818-29820]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-11612]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92055; File No. SR-LTSE-2021-03]

Self-Regulatory Organizations; Long-Term Stock Exchange; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to a Temporary Reduction in the Initial Listing Fee

May 27, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on May 18, 2021, Long-Term Stock Exchange (``LTSE'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and 
II, 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

    LTSE proposes a rule change to temporarily reduce by half the 
schedule of Initial Listing Fees for issuers' Primary Equity Securities 
on LTSE in light of the competitive market for listings and the ongoing 
disruptions caused by the global COVID-19 pandemic.\3\ The Initial 
Listing fees would revert to their prior levels beginning on January 1, 
2022.
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    \3\ The Exchange originally filed to establish a fee schedule of 
listing fees for issuers of primary equity securities on January 22, 
2020 (SR-LTSE-2020-02). On January 30, 2020, SR-LTSE-2020-02 was 
withdrawn and replaced by SR-LTSE-2020-03. See Securities Exchange 
Act Release No. 88133 (February 6, 2020), 85 FR 8048 (February 12, 
2020).
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    The text of the proposed rule change is available at the Exchange's 
website at https://longtermstockexchange.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 these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
has prepared summaries, set forth in Sections A, B, and C below, of the 
most significant aspects of such statements.

A. Self-Regulatory Organization's Statement on the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange is filing this proposed rule change to amend Rule 
14.601 to temporarily reduce by half the schedule of Initial Listing 
Fees for issuers' Primary Equity Securities on LTSE in light of the 
competitive market for listings and the ongoing disruptions caused by 
the global COVID-19 pandemic.\4\ The Initial Listing fees would revert 
to their prior levels beginning on January 1, 2022.
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    \4\ ``Primary Equity Security'' means a Company's first class of 
Common Stock, Ordinary Shares, Shares or Certificates of Beneficial 
Interest of Trust, Limited Partnership Interests or American 
Depositary Receipts (``ADRs'') or Shares (``ADSs''). See Rule 
14.002(a)(24).
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1. Initial Listing Fee
    The Initial Listing Fee in LTSE Rule 14.601(a)(1) is determined 
based on the market capitalization of the Company when it lists on the 
Exchange.\5\
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    \5\ See supra note 3.
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    The amount of such fee is set forth in the fee table LTSE Rule 
14.601(a)(3). The Initial Listing Fee is prorated based on the number 
of trading days in the year remaining at the time of a Company's 
initial listing.\6\ The proposed rule change would reduce the Initial 
Listing Fee in each listing tier for the remainder of 2021 by 50% while 
also retaining the proration calculation as set forth in the Rule.\7\ 
Thus, for example, a Company with market capitalization up to $1 
billion listing on LTSE on May 31, 2021, would have an Initial Listing 
Fee of $44,642.50 ($75,000 x 150/252).\8\ Prior to the proposed rule 
change, the Initial Listing Fee would have been $89,285.00 ($150,000 x 
150/252).
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    \6\ See LTSE Rule 14.601(a)(1)(iv).
    \7\ The Annual Listing Fee, which would be assessed for calendar 
year 2022 for a Company listing on LTSE in 2021, is not affected by 
the proposed rule change.
    \8\ May 31, 2021 is the 150th trading day out of a total of 252 
trading days in calendar year 2021.
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    Beginning January 1, 2022, the Initial Listing Fees and Annual 
Listing Fees would revert to the levels as originally adopted in Rule 
14.601.\9\
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    \9\ See supra note 3.
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    The Exchange believes that it is appropriate to temporarily reduce 
the listing fees amount by half for the remainder of 2021. The market 
for listings is highly competitive and the Exchange believes that a 
temporary

[[Page 29819]]

reduction in fees is appropriate at this time as the Exchange is 
attracting new listings. The Exchange does not believe that the 
proposed temporary reduction in its Initial Listing Fees will have any 
adverse impact on the amount of funds available for its regulatory 
program.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the requirements of Section 6(b) of the Act \10\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \11\ 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. The Exchange also believes that 
the proposed rule change is consistent with the requirements of Section 
6(b)(5) of the Act \12\ because 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 and dealers.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4).
    \12\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the temporary reduction for the 
remainder of 2021 of the Initial Listing Fee is reasonable in view of 
the highly competitive market for listings and the disruptions faced by 
Companies as a result of the global COVID-19 pandemic. The benefits to 
a Company, its shareholders and stakeholders from pursuing long-term 
value creation were discussed extensively in the background and 
rationale for LTSE's Long-Term Policies.\13\ While LTSE believes that 
the current environment reinforces the importance for a Company to 
demonstrate its commitment to long-termism and the Long-Term Policies 
set forth in Rule 14.425, the Exchange also believes that a temporary 
reduction in fees is appropriate in the current economic environment. 
The proposed rule change applies the reduction in fees equitably in 
that all price tiers are reduced by 50% and the reduced Initial Listing 
Fee is available to all Companies that elect to list on LTSE in 
calendar year 2021.
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    \13\ See Securities Exchange Act Release No. 86327 (July 8, 
2019), 84 FR 33293 (July 12, 2019).
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    Additionally, the Exchange operates in a highly competitive market 
for the listing of Primary Equity Securities. The Commission has 
repeatedly expressed its preference for competition over regulatory 
intervention in determining prices, products, and services in the 
securities markets. A temporary reduction in price contributes to the 
competitive marketplace. The Exchange believes therefore that the 
proposed rule change supports an open market and the national market 
system, and is consistent with the public interest.

B. Self-Regulatory Organization's Statement on Burden on Competition

    LTSE does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed rule change would 
establish a temporary reduction in the schedule of Initial Listing 
Fees.
    The market for listing services is highly competitive. Each listing 
exchange has a different fee 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 rule change imposes a 
burden on competition.
    Intramarket Competition. The proposed rule change would establish a 
temporarily-reduced Initial Listing Fee that will be charged to all 
Companies listing on LTSE on the same basis. The Exchange does not 
believe that the proposed, temporary 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 
securities on other exchanges and transfer listings to other exchanges 
if they deem fee levels at those other venues to be more favorable. 
Consequently, the Exchange does not believe the proposed rule change 
will impose any burden on intermarket competition in a manner that is 
not necessary or appropriate in furtherance of the purposes of the Act. 
The Exchange also notes that other listing venues adjust their fees 
from time to time.\14\
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    \14\ See, e.g., Securities Exchange Act Release No. 90519 
(November 25, 2020), 85 FR 77324 (December 1, 2020) (Nasdaq's Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change To 
Modify Certain Annual Listing Fees).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) \15\ of the Act and paragraph (f) of Rule 19b-4 \16\ 
thereunder. 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 to 
determine whether the proposed rule change should be approved or 
disapproved.
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(2).
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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 rule-comments@sec.gov. Please include 
File No. SR-LTSE-2021-03 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 No. SR-LTSE-2021-03. 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

[[Page 29820]]

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 No. SR-LTSE-
2021-03, and should be submitted on or before June 24, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-11612 Filed 6-2-21; 8:45 am]
BILLING CODE 8011-01-P