Document ID: SEC-2021-1829-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC
Posted Date: 2021-12-29T05:00Z

[Federal Register Volume 86, Number 247 (Wednesday, December 29, 2021)]
[Notices]
[Pages 74115-74119]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-28326]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93865; File No. SR-NYSE-2021-68]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change To Revise the Suite of 
Complimentary Products and Services Offered to Listed Companies

December 23, 2021.
    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 December 13, 2021, 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 revise the suite of complimentary products 
and services offered to listed companies pursuant to Section 902.07 
[sic] of the NYSE Listed Company Manual. 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.

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.

[[Page 74116]]

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

1. Purpose
Products and Services Currently Provided Under Section 907.00
    Section 907.00 of the NYSE Listed Company Manual sets forth 
complimentary products and services that issuers are entitled to 
receive in connection with their NYSE listing. The Exchange currently 
offers certain complimentary products and services and access to 
discounted third-party products and services through the NYSE Market 
Access Center to currently and newly listed issuers. The Exchange also 
provides complimentary market surveillance products and services (with 
a commercial value of approximately $55,000 annually), Web-hosting 
products and services (with a commercial value of approximately $16,000 
annually), Web-casting services (with a commercial value of 
approximately $6,500 annually), market analytics products and services 
(with a commercial value of approximately $30,000 annually), and news 
distribution products and services (with a commercial value of 
approximately $20,000 annually).
    The products and services are offered to Eligible New Listings \4\ 
and Eligible Transfer Companies \5\ based on the following tiers: \6\
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    \4\ For purposes of Section 907.00, the term ``Eligible New 
Listing'' means (i) any U.S. company that lists common stock on the 
Exchange for the first time and any non-U.S. company that lists an 
equity security on the Exchange under Section 102.01 or 103.00 of 
the Manual for the first time, regardless of whether such U.S. or 
non-U.S. company conducts an offering and (ii) any U.S. or non-U.S. 
company emerging from a bankruptcy, spinoff (where a company lists 
new shares in the absence of a public offering), and carve-out 
(where a company carves out a business line or division, which then 
conducts a separate initial public offering).
    \5\ For purposes of Section 907.00, the term ``Eligible Transfer 
Company'' means any U.S. or non-U.S. company that transfers its 
listing of common stock or equity securities, respectively, to the 
Exchange from another national securities exchange. For purposes of 
Section 907.00, an ``equity security'' means common stock or common 
share equivalents such as ordinary shares, New York shares, global 
shares, American Depository Receipts, or Global Depository Receipts.
    \6\ Section 907.00 provides for separate service entitlements 
for Acquisition Companies listed under Section 102.06 and the 
issuers of Equity Investment Tracking Stocks listed under Section 
102.07.
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    Tier A: For Eligible New Listings and Eligible Transfer Companies 
with a global market value of $400 million or more, in each case 
calculated as of the date of listing on the Exchange, the Exchange 
offers market surveillance, market analytics, Web-hosting, Web-casting, 
and news distribution products and services for a period of 48 calendar 
months.
    Tier B: For Eligible New Listings and Eligible Transfer Companies 
with a global market value of less than $400 million, in each case 
calculated as of the date of listing on the Exchange, the Exchange 
offers Web-hosting, market analytics, Web-casting, and news 
distribution products and services for a period of 48 calendar months.
    The products and services are offered to currently listed companies 
that meet the eligibility requirements (``Eligible Current Listings'') 
based on the following tiers:
    Tier One: The Exchange offers (i) a choice of market surveillance 
or market analytics products and services, and (ii) Web-hosting and 
Web-casting products and services to U.S. issuers that have 270 million 
or more total shares of common stock issued and outstanding in all 
share classes, including and in addition to Treasury shares, and non-
U.S. companies that have 270 million or more shares of an equity 
security issued and outstanding in the U.S., each calculated annually 
as of September 30 \7\ of the preceding year.
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    \7\ A U.S. issuer or non-U.S. company that has the requisite 
number of shares outstanding on September 30 will begin (or 
continue, as the case may be) to receive the suite of complimentary 
products and services for which it is eligible as of the following 
January 1. In the event that a U.S. issuer or non-U.S. company 
completes a corporate action between October 1 and December 31 that 
increases the number of shares it has outstanding, the Exchange will 
calculate its outstanding shares as of December 31 and determine 
whether it has become eligible to receive Tier One or Tier Two 
services. If eligible, the Exchange will offer such services as of 
the immediately succeeding January 1.
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    Tier Two: At each such issuer's election, the Exchange offers a 
choice of either: (1) Market analytics; or (2) Web-hosting and Web-
casting products to:
    (1) U.S. issuers that have 160 million to 269,999,999 total shares 
of common stock issued and outstanding in all share classes, including 
and in addition to Treasury shares, calculated annually as of September 
30 \8\ of the preceding year; and
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    \8\ Id.
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    (2) non-U.S. companies that have 160 million to 269,999,999 shares 
of an equity security issued and outstanding in the U.S., calculated 
annually as of September 30 \9\ of the preceding year.
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    \9\ Id.
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    In addition to the foregoing, the Exchange provides all listed 
issuers with complimentary access to whistleblower hotline services 
(with a commercial value of approximately $4,000 annually) for a period 
of 24 calendar months.
Proposed Amendments to Section 907.00
    The Exchange proposes to amend Section 907.00. Once the amendments 
described herein are approved, Eligible Current Listings will be 
entitled on a prorated annual basis to a new suite of products and 
services starting on the first day of the first calendar month after 
the approval date for the proposed amendments.\10\ Eligible New 
Listings and Eligible Transfer Companies will receive the proposed new 
suite of products and services if they list on or after the date this 
proposal is approved by the SEC.\11\
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    \10\ The current form of Section 907.00 will remain in the 
Manual and be applicable to Eligible Current Listings for the period 
beginning January 1, 2022 through the end of the calendar month in 
which these proposed amendments are approved. During that period, 
Eligible Current Listings will be entitled to receive the annual 
suite of products and services currently set forth in Section 
907.00, on a prorated basis. Eligible New Listings and Eligible 
Transfer Companies that list prior to approval of the proposed 
amendments will be entitled to the suite of products and services 
for which they are eligible under Section 907.00 in its current 
form.
    \11\ Id.
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    Issuers are not required as a condition of listing to utilize the 
complimentary products and services available to them pursuant to 
Section 907.00 and issuers may decide to contract themselves for other 
products and services. Companies receiving products and services as 
Eligible New Listings or Eligible Transfer Companies \12\ that list 
before the operative date will continue to be eligible to receive the 
products and services for which they are eligible under the rule as in 
effect before that date.
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    \12\ The Exchange is not proposing to change the definitions of 
Eligible New Listings and Eligible Transfer Companies.
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Modified List of Products and Services
    The Exchange proposes to amend the suite of products and services 
provided under Section 907.00. As amended, the suite of available 
products and services would be as follows: Market intelligence (with a 
maximum commercial value of approximately $50,000 annually), market 
analytics (with a maximum commercial value of approximately $30,000 
annually), board of directors platform (with a maximum commercial value 
of approximately $40,000 annually), virtual event platform (with a 
maximum commercial value of approximately $30,000 annually), 
environmental, social and governance tools (collectively ``ESG'') (with 
a maximum commercial value of approximately $30,000 annually), Web-

[[Page 74117]]

hosting and Web-casting products and services (with a maximum 
commercial value of approximately $25,000 annually), and news 
distribution products and services (with a maximum commercial value of 
approximately $20,000 annually).\13\
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    \13\ The proposed rule amendments do not refer to these products 
and services being provided through the Exchange's Market Access 
Center, as is the case in the comparable description in the current 
rule. This does not reflect any change in the nature of the services 
to be provided or how issuers will access those services. The Market 
Access Center concept was simply a way of identifying the entire 
suite of available products and services and promoting their 
availability to issuers. The Exchange no longer emphasizes this 
approach in communicating with issuers about the products and 
services and therefore proposes to remove the reference to the 
Market Access Center from Section 907.00.
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    The proposed services offering includes market intelligence, rather 
than market surveillance in the current rule. This change reflects a 
change over time in the scope of the types of service packages offered 
by the service providers from whom the Exchange purchases these 
services. Historically, those packages were generally limited to 
providing surveillance services, which consisted of monitoring an 
issuer's larger shareholders and how the size of their holdings changed 
over time. These service providers now also provide additional 
information that is intended to track investors'' views about an issuer 
and how those views change over time. As this additional service is 
included in the package provided to listed companies, the Exchange 
believes it is appropriate to reflect that fact by changing the 
terminology from market surveillance to market intelligence. The small 
decrease in the value attributed to this service is a result of pricing 
competition in a highly competitive market for these services.
    The current rule treats Web-hosting and Web-casting services as two 
separate items in the suite of available services, while the proposed 
rule amendments aggregate them as a single option. The Exchange is 
making this change in response to developments over time in how its 
service providers package their service offerings, as service providers 
now market these two services together rather than separately. The 
aggregate value of Web-hosting and Web-casting services would increase 
slightly due to increased prices charged by service providers.
    In certain cases, the proposed rule amendments adopt a different 
approach from the current rule in how it gives companies the ability to 
choose the services they receive. The current rule is structured to 
give listed companies a choice among the various service categories, 
where choosing a particular service requires the company to forego 
another service category entirely (for example, a company with Tier One 
eligibility can choose either market surveillance or market analytics 
products and services but cannot receive both). The proposed rule 
amendments adopt a more flexible approach for: (i) Eligible New 
Listings and Eligible Transfers that qualify for Tier A; and (ii) 
currently listed companies that qualify for Tier One. In these cases, 
companies will be eligible to choose different levels of services from 
the different categories, subject to a maximum overall value of 
services used. The Exchange believes that this approach will provide 
companies with appropriate flexibility in choosing the types and levels 
of service that best meet their needs, while providing that all 
qualified companies within a tier are entitled to receive the same 
dollar value of services.
Amended Offering for Eligible New Listings and Eligible Transfers
    The proposed amended offering of products and services for Eligible 
New Listings and Eligible Transfers would be as follows:
    Tier A: For a period of 48 calendar months, Eligible New Listings 
and Eligible Transfer Companies that list on the Exchange after 
approval of these amendments with a global market value of $400 million 
or more, in each case calculated as of the date of listing on the 
Exchange, the Exchange offers products and services with a maximum 
combined commercial value of approximately $125,000 annually, 
consisting of (i) Web-hosting and Web-casting products and services and 
(ii) news distribution products and services and (iii) a selection from 
among a suite of products and services, including market intelligence, 
market analytics, board of directors platform, virtual event platform, 
or ESG products and services.
    Tier B: For a period of 48 calendar months, Eligible New Listings 
and Eligible Transfer Companies that list on the Exchange after 
approval of these amendments with a global market value of less than 
$400 million, in each case calculated as of the date of listing on the 
Exchange, the Exchange offers (i) Web-hosting and Web-casting products 
and services; (ii) market analytics; and (iii) news distribution 
products and services.
    The methodology used for determining global market value under the 
proposed amended rule for an Eligible New Listing or Eligible Transfer 
Company would be the same as is used under the current rule.
Amended Offering for Currently Listed Companies
    The proposed amended offering of products and services for Eligible 
Current Listings would be as follows:
    Tier One: For U.S. issuers that have 270 million or more total 
shares of common stock issued and outstanding in all share classes, 
including and in addition to Treasury shares, and non-U.S. companies 
that have 270 million or more shares of an equity security issued and 
outstanding in the U.S., each calculated annually as of September 30 of 
the preceding year, the Exchange would offer products and services with 
a maximum combined commercial value of approximately $75,000 annually, 
consisting of (i) Web-hosting and Web-casting products and services and 
(ii) a selection from among a suite of products and services, including 
market intelligence, market analytics, board of directors platform, 
virtual event platform, or ESG products and services.
    Tier Two: At each issuer's election, the Exchange would offer a 
choice of: (i) Market analytics; (ii) Web-hosting and Web-casting 
products; or (iii) virtual event platform to:
    (1) U.S. issuers that have 160 million to 269,999,999 total shares 
of common stock issued and outstanding in all share classes, including 
and in addition to Treasury shares, calculated annually as of September 
30 of the preceding year; and
    (2) non-U.S. companies that have 160 million to 269,999,999 shares 
of an equity security issued and outstanding in the U.S., calculated 
annually as of September 30 of the preceding year.
    The methodology used in determining the number of shares issued and 
outstanding for purposes of eligibility for Tier One or Tier Two would 
be the same as under the current rule.
Proposal To Adjust Entitlements of Currently Listed Companies After 
January 1
    The Exchange proposes to grant enhanced eligibility for products 
and services under Section 907.00 to companies that become eligible 
during the course of a calendar year. In the event that a U.S. issuer 
or non-U.S. company completes a corporate action during the course of a 
calendar year for which its eligibility for services is being 
determined and that corporate action increases the number of shares it 
has outstanding, the Exchange would calculate its outstanding shares 
immediately after such corporate action and determine whether it has 
become eligible to receive Tier One or Tier Two

[[Page 74118]]

services. If eligible, the Exchange would offer such services for the 
remainder of that calendar year, with such eligibility commencing as of 
the beginning of the following calendar month.
Period of Eligibility for Whistleblower Services
    The Exchange currently provides all listed issuers with 
complimentary access to whistleblower hotline services (with a 
commercial value of approximately $4,000 annually) for a period of 24 
calendar months. The Exchange proposes to extend this period of 
eligibility to 48 months.
    The specific tools and services offered to Eligible New Listings 
and Eligible Transfer Companies and eligible currently listed companies 
as part of the complimentary offering limited to those categories of 
issuers under Section 907.00 are provided solely by third-party 
vendors. In deciding which complimentary products and services to 
provide, the NYSE considers the quality of competing products and 
services and the needs of its listed issuers in selecting the vendors. 
The NYSE may change vendors from time to time based on this ongoing 
review of the products and services provided by current vendors and its 
willingness to change vendors is consistent with competition for vendor 
services.
    The Exchange does not believe that the proposed rule change would 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. In this regard, NYSE notes 
that it may choose to use multiple vendors for the same type of product 
or service. The NYSE also notes that, from time to time, issuers elect 
to purchase products and services from other vendors at their own 
expense instead of accepting the products and services described above 
offered by the Exchange.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Securities Exchange Act of 1934 (the ``Act'') 
generally.\14\ Section 6(b)(4) \15\ requires that exchange rules 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its members and issuers and other persons using the 
facilities of an exchange. Section 6(b)(5) \16\ requires, among other 
things, that exchange rules promote just and equitable principles of 
trade and that they are not designed to permit unfair discrimination 
between issuers, brokers, or dealers. Section 6(b)(8) \17\ prohibits 
any exchange rule from imposing any burden on competition that is not 
necessary or appropriate in furtherance of the purposes of the Act.
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    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(4).
    \16\ 15 U.S.C. 78f(b)(5).
    \17\ 15 U.S.C. 78f(b)(8).
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    The NYSE faces competition in the market for listing services, and 
competes, in part, by offering valuable services to companies. The 
Exchange believes that it is reasonable to offer complimentary services 
to attract and retain listings as part of this competition.
    The Exchange does not believe that the proposal to modify the suite 
of complimentary products and services it provides to eligible listed 
companies harms the market for those products and services in a way 
that constitutes a burden on competition or an inequitable allocation 
of fees or fails to promote just and equitable principles of trade, in 
a manner inconsistent with the Act. The specific tools and services 
offered to eligible listed companies as part of the complimentary 
offering under Section 907.00 are provided solely by third-party 
vendors. As noted above, issuers are not required to utilize the 
complimentary products and services and some issuers have selected 
competing products and services. The NYSE believes that its 
consideration of quality and the needs of its listed issuers in 
selecting the vendors and its willingness to change vendors is 
consistent with competition for vendor services. In this regard, the 
NYSE notes that it may choose to use multiple vendors for the same type 
of product or service. The NYSE also notes that, from time to time, 
issuers elect to purchase products and services from other vendors at 
their own expense instead of accepting the products and services 
described above offered by the Exchange.
    The proposed rule amendments make a number of adjustments in the 
types and levels of products and services provided to companies. Those 
adjustments are minor in nature and generally reflect changes in which 
the service providers on which the Exchange relies package their 
products and services. Nor is there any significant change in the 
overall value of the services to which any company would be entitled. 
Consequently, the Exchange believes that the proposed amendments to the 
available products and services, and the terms on which they are 
offered, represent an equitable allocation of the services provided 
under the rule and is not unfairly discriminatory.
    The proposed rule amendments provide that (i) Eligible New Listings 
and Eligible Transfers that qualify for Tier A; and (ii) currently 
listed companies that qualify for Tier One will, in each case, be 
eligible to choose different levels of services from the different 
categories subject to a maximum overall value of services used. The 
Exchange believes that this approach is not unfairly discriminatory as 
it simply provides companies with appropriate flexibility in choosing 
the types and levels of service that best meet their needs while 
ensuring that all qualified companies within a tier are entitled to 
receive the same dollar value of services.
    The proposed rule amendments provide for the ability of companies 
to qualify for Tier One or Tier Two services during the course of a 
calendar year and receive those services on a prorated basis for the 
balance of that calendar year. As these companies would only become 
eligible if they met the same shares outstanding requirements as 
companies that were already receiving the services of the applicable 
tier, the Exchange believes that this proposed amendment represents an 
equitable allocation of the services provided under the rule and is not 
unfairly discriminatory.
    Finally, the Exchange also believes it is reasonable to balance its 
need to remain competitive with other listing venues, while at the same 
time ensuring adequate revenue to meet its regulatory responsibilities. 
The Exchange notes that no other company will be required to pay higher 
fees because of this proposal, and it represents that providing the 
proposed services will have no impact on the resources available for 
its regulatory programs.

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. As noted above, the Exchange 
faces competition in the market for listing services, and competes, in 
part, by offering valuable services to companies. The proposed rule 
change reflects that competition, but it does not impose any burden on 
the competition with other exchanges. Rather, the Exchange believes the 
proposed changes will enhance competition for listings, as it will 
increase the competition for new listings and the listing of companies 
that are currently listed on other exchanges. Other exchanges can also 
offer similar services to companies, thereby

[[Page 74119]]

increasing competition to the benefit of those companies and their 
shareholders. Accordingly, the Exchange does not believe the proposed 
rule change will impose any burden on competition that is not necessary 
or appropriate in furtherance of the purposes of the Act.
    In addition, the Exchange does not believe that the proposal to 
modify the suite of complimentary products and services it provides to 
eligible listed companies will impose any burden on competition that is 
not necessary or appropriate in furtherance of the purposes of the Act. 
In this regard, the NYSE notes that the specific tools and services 
offered to eligible listed companies as part of the complimentary 
offering limited to those categories of issuers under Section 907.00 
are provided solely by third-party vendors. In addition, the NYSE may 
choose to use multiple vendors for the same type of product or service. 
The NYSE also notes that currently listed and newly listed companies 
would not be required to accept the offered products and services from 
the NYSE, and an issuer's receipt of an NYSE listing is not conditioned 
on the issuer's acceptance of such products and services. In addition, 
the NYSE notes that, from time to time, issuers elect to purchase 
products and services from other vendors at their own expense instead 
of accepting the products and services described above offered by the 
Exchange.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or up to 90 days (i) as the Commission may designate 
if it finds such longer period to be appropriate and publishes its 
reasons for so finding or (ii) as to which the self-regulatory 
organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSE-2021-68 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-2021-68. 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 (https://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-2021-68 and should be 
submitted on or before January 19, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
 [FR Doc. 2021-28326 Filed 12-28-21; 8:45 am]
 BILLING CODE 8011-01-P