Document ID: SEC-2020-1894-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2020-11-27T05:00Z

[Federal Register Volume 85, Number 229 (Friday, November 27, 2020)]
[Notices]
[Pages 76129-76131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26143]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90466; File No. SR-NYSE-2020-94]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change To Amend Section 907.00 of the 
Manual To Extend the Period of Time for the Entitlement of Certain 
Eligible Issuers To Receive Complimentary Products and Services Under 
That Rule

November 20, 2020.
    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 6, 2020, 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 amend Section 907.00 of the Manual to 
modify the entitlement of eligible issuers to complimentary products 
and services under that rule. 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.

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

1. Purpose
    Section 907.00 of the Manual sets forth complimentary products and 
services that issuers are entitled to receive in connection with their 
NYSE listing. The Exchange 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) to Eligible New 
Listings \4\ and Eligible Transfer Companies \5\ based on the following 
tiers: \6\
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    \4\ For the 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.

    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, 
webcasting, and news distribution products and services for a period 
of 24 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 24 calendar 
months.

    Currently, the Exchange provides all of the additional 
complimentary products and services to Eligible New Listings and 
Eligible Transfer Companies for a period of 24 months. The Exchange now 
proposes to extend this period for the additional services provided to 
Eligible New Listings and Eligible Transfer Companies from 24 months to 
48 months.\7\ The proposed amendment would be applicable to Eligible 
New Listings and Eligible Transfer Companies that list on or after the 
date of SEC approval of the proposal. The Exchange believes that this 
amendment would assist it in the competition for new listings, as well 
as in attracting transfers of issuers from other exchanges. The market 
for new

[[Page 76130]]

listings and for the retention and transfer of listed companies is 
intensely competitive and the provision of attractive service offerings 
is a significant aspect of that competition. The Exchange notes that 
the Nasdaq Stock Market, Inc. (``Nasdaq'') already provides four years 
of complimentary services to companies transferring from the NYSE to 
Nasdaq Global Market that have a market capitalization of at least $750 
million, while providing two years of services to other newly listed 
companies.\8\
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    \7\ Eligible New Listings and Eligible Transfer Companies will 
continue to be entitled to complimentary whistleblower services for 
24 months, as is the case with all eligible listed companies.
    \8\ See Nasdaq Marketplace Rules IM-5900-7.
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    The specific tools and services offered to Eligible New Listings 
and Eligible Transfer Companies as part of the complimentary offering 
limited to those categories of issuers under Section 907.00 are 
provided solely by third-party vendors. Issuers are not forced or 
required as a condition of listing to utilize the complimentary 
products and services available to them pursuant to Section 907.00 and 
some issuers have selected competing products and services. 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 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 Exchange also proposes to delete two separate passages of rule 
text that no longer have any substantive effect as they relate to 
entitlements that have ceased to be relevant as the periods of time for 
which they existed have ended.
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.\9\ 
Section 6(b)(4) \10\ 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) \11\ 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) \12\ 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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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4).
    \11\ 15 U.S.C. 78f(b)(5).
    \12\ 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. Notably, 
Nasdaq currently provides four years of complimentary services to NYSE 
companies with a market capitalization of at least $750 million 
transferring to Nasdaq Global Market.
    The Exchange does not believe that the proposal to extend the 
period for which it provides certain complimentary products and 
services to Eligible New Listings and Eligible Transfer Companies harms 
the market for the complimentary 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 New Listings and Eligible Transfer Companies as 
part of the complimentary offering limited to those categories of 
issuers 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 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.
    Further, the NYSE believes that it is appropriate to offer 
complimentary products and services for a longer period to Eligible New 
Listings and Eligible Transfer Companies that list after approval of 
this proposal than the period for which such products and services are 
provided to companies already listed on the NYSE. The purpose of the 
proposal is to attract future new listings and transfers and that this 
competitive purpose would not be served by providing the complimentary 
products and services for an extended period to companies that are 
already listed. In addition, the Exchange expects that companies that 
consider listing on the NYSE after the proposal is approved will take 
the enhanced offering into account when budgeting for their needs that 
are met by the complimentary products and services, while existing 
listed companies will have undertaken their financial planning on the 
basis of the current services offering and will not in any way be 
harmed by the proposed change. Based on the above, the Exchange 
believes that, upon approval of this proposal, the complimentary 
products and services will be equitably allocated among issuers as 
required by Section 6(b)(4) of the Act and the proposal does not 
unfairly discriminate among issuers as required by Section 6(b)(5) of 
the Act.
    The non-substantive changes to eliminate non-applicable history 
from the rule text will improve the rule's readability and thereby 
remove an impediment to a free and open market and a national market 
system and help to better protect investors.
    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 is regulatory responsibilities. 
The Exchange notes that no other company will be required to pay higher 
fees as a result 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

[[Page 76131]]

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 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 
extend the period for which it provides certain complimentary products 
and services to Eligible New Listings and Eligible Transfer 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 
New Listings and Eligible Transfer 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.
    Moreover, the number of companies eligible for the complimentary 
products and services for a longer period of time (i.e., companies 
newly listing on the NYSE) will be very small in comparison to the 
total number of companies that comprise the target market for the 
services (i.e., all public companies), so that there can be no 
competitively meaningful foreclosure of similar services offered by 
third parties if the proposed rule is approved.

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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2020-94 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-2020-94. 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-NYSE-2020-94 and should be submitted on 
or before December 18, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-26143 Filed 11-25-20; 8:45 am]
BILLING CODE 8011-01-P