Document ID: SEC-2019-1750-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE American LLC
Posted Date: 2019-11-21T05:00Z

[Federal Register Volume 84, Number 225 (Thursday, November 21, 2019)]
[Notices]
[Pages 64377-64379]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25210]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87555; File No. SR-NYSEAMER-2019-49]

Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Amending 
Its Annual Listing Fees for Equity Securities

November 15, 2019.
    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 November 4, 2019, 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 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 its annual listing fees for equity 
securities. 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 its annual listing fees for equities 
set forth in Section 141 of the NYSE American Company Guide (the 
``Company Guide'') with effect from the beginning of the calendar year 
commencing on January 1, 2020. These amendments only reflect changes in 
the amounts charged on an annual basis for listed securities and do not 
reflect any change in the services provided to the issuer in connection 
with such listing.
    Currently, the annual fee schedule in relation to any listed issue 
of equity securities is as follows: $45,000 for issues of 50 million 
shares or fewer; $60,000 for issues of more than 50 million shares and 
not more than 75 million shares; and $70,000 for issues with in excess 
of 75 million shares outstanding. The Exchange proposes to increase the 
annual fee for issues of 50 million shares or fewer from $45,000 to 
$50,000. In addition, it proposes to charge $70,000 for all issues with 
more than 50 million shares outstanding (i.e., an increase of $10,000 
for issues with more than 50 million shares and not more than 75 
million shares outstanding and no increase with respect to any issue 
with more than 75 million shares outstanding).
    The Exchange proposes to make the aforementioned fee increases in 
Section 141 to reflect increases in the cost of servicing listings and 
conducting the required associated regulatory oversight. The revised 
fees will be applied in the same manner to all issuers and the changes 
will not disproportionately affect any specific category of issuers. 
The Exchange believes that it is appropriate to adopt a two-tier annual

[[Page 64378]]

listing fee schedule rather than the current three-tier approach is 
equitable [sic] because the Exchange has observed that the costs 
associated with servicing the listings of issuers in the two current 
higher tiers are generally very similar and the proposed merging of 
those tiers therefore better aligns the fee structure with the costs 
associated with listing those issuers.
    The Exchange also proposes to remove from Section 141 several 
references to fee provisions that are no longer relevant, as those fee 
rates are no longer applicable.

2. Statutory Basis

    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\4\ in general, and furthers the 
objectives of Section 6(b)(4) \5\ 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,\6\ 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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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
    \6\ 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 equity securities. 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, 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.'' \7\
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    \7\ 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 small increase to the 
annual fees for equity securities represents a reasonable attempt to 
address the Exchange's increased costs in servicing these listings 
while continuing to attract and retain listings.
The Proposal Is an Equitable Allocation of Fees
    The Exchange believes its proposal equitably allocates its fees 
among its market participants. Adopting a two-tier annual listing fee 
schedule rather than the current three-tier approach is equitable 
because the Exchange has observed that the costs associated with 
servicing the listings of issuers in the two current higher tiers are 
generally very similar and the proposed merging of those tiers 
therefore better aligns the fee structure with the costs associated 
with listing those issuers.
The Proposal Is Not Unfairly Discriminatory
    The Exchange believes that the proposal is 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.
    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.
    The proposed removal of text relating to fees that are no longer 
applicable is ministerial in nature and has no substantive effect.
    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 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 changes 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) \8\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \9\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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

[[Page 64379]]

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) \10\ of the Act to 
determine whether the proposed rule change should be approved or 
disapproved.
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    \10\ 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 rule-comments@sec.gov. Please include 
File Number SR-NYSEAMER-2019-49 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-2019-49. 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; 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-NYSEAMER-2019-49 and should 
be submitted on or before December 12, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-25210 Filed 11-20-19; 8:45 am]
 BILLING CODE 8011-01-P