Document ID: SEC-2022-1572-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC
Posted Date: 2022-12-06T05:00Z

[Federal Register Volume 87, Number 233 (Tuesday, December 6, 2022)]
[Notices]
[Pages 74681-74683]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-26439]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96408; File No. SR-NYSE-2022-54]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Listed Company Manual Section 302.00

November 30, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on November 21, 2022, 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 and II 
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\ 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 Listed Company Manual Section 302.00 
to exclude Exchange-Traded Fund Shares listed pursuant to Rule 
5.2(j)(8) from the obligation to hold annual shareholders' meetings. 
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
    The Exchange proposes to amend Listed Company Manual Section 302.00 
to exclude Exchange-Traded Fund Shares listed pursuant to Rule 
5.2(j)(8) from the obligation to hold annual shareholders' meetings. 
Exchange-Traded Fund shares are Derivative Securities Products \3\ 
permitted to operate in reliance on Rule 6c-11 (``Rule 6c-11'') under 
the Investment Company Act of 1940 (``1940 Act'').\4\
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    \3\ The term ``Derivative Securities Product'' is defined in 
Rule 1.1(k) to mean a security that meets the definition of 
``derivative securities product'' in Rule 19b4(e) under the Exchange 
Act. 17 CFR 240.19b-4(e).
    \4\ See Release Nos. 33-10695; IC-33646; File No. S7-15-18 
(Exchange-Traded Funds) (September 25, 2019), 84 FR 57162 (October 
24, 2019).
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    Listed Company Manual Section 302.00 provides that companies 
listing common stock or voting preferred stock and their equivalents 
are required to hold an annual shareholders' meeting for the holders of 
such securities during each fiscal year. Listed Company Manual Section 
302.00 currently exempts, among other securities, Exchange-Traded Funds 
(``ETFs'') listed under Rule 5.2-(j)(3) (Investment Company Units) or 
Commentary .01 to Rule 8.600 (Managed Fund Shares) and other derivative 
securities from the Exchange's annual shareholder meeting requirement.
    The Exchange proposes to amend Section 302.00 of the Listed Company 
Manual to add Exchange-Traded Fund Shares listed pursuant to Rule 
5.2(j)(8) to the list of securities for which the requirements of 
Section 302.00 regarding annual shareholders' meetings do not apply. 
The proposed change is based on, and would align Section 302.00 of the 
Listed Company Manual with, NYSE Arca Rule 5.3-E(e), which

[[Page 74682]]

exempts Exchange-Traded Fund Shares listed under NYSE Arca Rule 5.2-
E(j)(8), from the shareholder/annual meeting requirements. NYSE Rule 
5.2(j)(8) and NYSE Arca Rule 5.2-E(j)(8) are substantially similar.\5\
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    \5\ See Securities Exchange Act Release No. 91029 (February 1, 
2021), 86 FR 8420, 8424 (February 5, 2021) (SR-NYSE-2020-86) (Order 
Approving a Proposed Rule Change To Adopt NYSE Rule 5.2(j)(8) 
Governing the Listing and Trading of Exchange-Traded Fund Shares).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(5) of the Exchange Act,\6\ in that it is designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in 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.
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    \6\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposal to amend Listed Company 
Manual Section 302.00 to include Exchange-Traded Fund Shares listed 
pursuant to Rule 5.2(j)(8) among the securities exempted from the 
annual shareholders' meeting requirement is designed to prevent 
fraudulent and manipulative acts and practices and to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system because such securities, like ETFs and other 
derivative securities currently exempted from the requirements of 
Listed Company Manual Section 302.00, would remain subject to the same 
requirements currently applicable to other 1940 Act-registered 
investment company securities (e.g., Investment Company Units, Managed 
Fund Shares, and Portfolio Depositary Receipts). As noted, the proposed 
change is based on NYSE Arca Rule 5.3-E(e), which exempts Exchange-
Traded Fund Shares listed under the listing standards for such products 
under NYSE Arca Rule 5.2-E(j)(8) (Exchange-Traded Fund Shares), from 
substantially similar requirements with respect to annual meetings. The 
proposed change would thus make Listed Company Manual Section 302.00 
consistent with NYSE Arca Rule 5.3-E(e), resulting in similar treatment 
of ETFs permitted to operate in reliance on Rule 6c-11 under the 1940 
Act across affiliated exchanges for purposes of the annual meeting 
requirement.

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

    In accordance with Section 6(b)(8) of the Act,\7\ the Exchange 
believes that the proposed rule change would not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. The Exchange believes that the proposed rule 
change would facilitate the listing and trading of Exchange-Traded Fund 
Shares listed pursuant to Rule 5.2(j)(8) on the Exchange, thereby 
enhancing competition among both market participants and listing 
venues, to the benefit of investors and the marketplace.
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    \7\ 15 U.S.C. 78f(b)(8).
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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 Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\ 
Because the proposed rule change does not: (i) significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6)(iii) thereunder.\11\
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    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing.
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    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes that waiver of the operative delay is 
consistent with the protection of investors and the public interest 
because it will allow the Exchange to promptly provide its listed ETFs 
the same exemption from annual meeting requirements that currently 
applies to ETFs listed on NYSE Arca. Accordingly, the Commission hereby 
waives the 30-day operative delay and designates the proposal operative 
upon filing.\14\
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    \14\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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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) \15\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \15\ 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-NYSE-2022-54 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-2022-54. 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/

[[Page 74683]]

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-2022-54 and should be 
submitted on or before December 27, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-26439 Filed 12-5-22; 8:45 am]
BILLING CODE 8011-01-P