Document ID: SEC-2022-1673-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC
Posted Date: 2022-12-28T05:00Z

[Federal Register Volume 87, Number 248 (Wednesday, December 28, 2022)]
[Notices]
[Pages 79912-79914]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-28197]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96556; File No. SR-NYSE-2022-57]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Increase Certain Annual Listing Fee Set Forth in Section 902.03 of the 
NYSE Listed Company Manual

December 21, 2022.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on December 16, 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, 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 902.03 of the NYSE Listed 
Company Manual (the ``Manual'') to amend certain of its annual fees 
charged to listed issuers. 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 certain of its annual fees charged 
to listed issuers as set forth in Section 902.03 of the Manual. The 
proposed changes will take effect from the beginning of the calendar 
year commencing on January 1, 2023. The proposed increases in the 
annual fees reflect increases in the costs the Exchange incurs in 
providing services to listed companies on an ongoing basis, as well as 
increases in the costs of conducting its related regulatory activities. 
As described below, the Exchange proposes to make the proposed fee 
increases to better reflect the Exchange's costs related to listing 
equity securities and the corresponding value of such listing to 
companies.
    The annual fee for each class of equity security listed on the 
Exchange is equal to the greater of the minimum fee or the fee 
calculated on a per share basis.
    The Exchange currently charges an annual fee of $0.00117 per share 
for each of the following: a primary class of common shares (including 
Equity Investment Tracking Stocks); each additional class of common 
shares (including tracking stock); a primary class of preferred stock 
(if no class of common shares is listed); each additional class of 
preferred stock (whether primary class is common or preferred shares); 
and each class of warrants or rights. The Exchange proposes to change 
the per share annual fee for the foregoing classes of securities from 
$0.00117 per share to $0.001215 per share.
    The current minimum annual fee for a primary class of common shares 
(including Equity Investment Tracking Stocks) or a primary class of 
preferred stock (if no class of common shares is listed) is $74,000. 
The Exchange proposes to change this minimum annual fee from $74,000 to 
$80,000.
    Notwithstanding the fact that the Exchange proposes to increase the 
per share fee rate applicable to all classes of equity securities set 
forth in Section 902.03, the Exchange does not propose to increase the 
minimum annual fees charged for additional classes of common shares 
(including tracking stocks), preferred stocks that are not the primary 
listed equity security, or warrants or rights. The Exchange believes 
that the benefits issuers receive in connection with those listings are 
consistent with the current minimum fee levels, as those types of 
listings do

[[Page 79913]]

not generally entitle issuers to the types of services provided in 
connection with a primary common stock listing or primary preferred 
stock listing and the Exchange has therefore not incurred the same 
level of cost increase associated with them. In addition, their issuers 
generally also have a primary common stock listing on the Exchange that 
will be subject to the increased minimum annual fee of $80,000 and the 
Exchange believes that this increased minimum fee is sufficient to 
encompass any increases in minimum costs associated with any such 
issuer.
    The revised annual fees will be applied in the same manner to all 
issuers with listed securities in the affected categories and the 
Exchange believes that the changes will not disproportionately affect 
any specific category of issuers.
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 Exchange believes that it is not unfairly discriminatory and 
represents an equitable allocation of reasonable fees to amend Section 
902.03 to increase the annual fees for the various categories of equity 
securities as set forth above because of the increased costs incurred 
by the Exchange since it established the current rates.
The Proposed Changes Are Reasonable
    The Exchange believes that the proposed changes to its annual fee 
schedule are reasonable. In that regard, the Exchange notes that its 
general costs to support its listed companies have increased, including 
due to price inflation. The Exchange also continues to expand and 
improve the services it provides to listed companies. Specifically, the 
Exchange has (among other things) increased expenditure on listed 
companies and the value of an NYSE listing by: making improvements to 
NYSE Connect, an online service that provides listed companies with 
access to in-depth information to better understand the trading of 
their securities; increasing the value of products and services 
available to qualified listed companies under Section 907.00 of the 
Manual; \7\ and launching the NYSE Institute, whose focus includes 
providing thought leadership and advocacy on behalf of listed 
companies.
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    \7\ See Securities Exchange Act Release No. 94222 (February 10, 
2022); 87 FR 8886 (February 16, 2022) (SR-NYSE-2021-68).
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    The Exchange operates in a highly competitive marketplace for the 
listing of the various categories of securities affected by the 
proposed annual fee adjustments. 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,\8\ 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.'' \9\
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    \8\ Release No. 34-51808 (June 9, 2005); 70 FR 37496 (June 29, 
2005).
    \9\ 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 adoption of the proposed 
increase to the annual fees for various categories of 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 Exchange proposes to make the aforementioned fee increases in 
Section 902.03 to better reflect the value of such listing to issuers.
    Notwithstanding the fact that the Exchange proposes to increase the 
per share fee rate applicable to all classes of equity securities set 
forth in Section 902.03, the Exchange does not propose to increase the 
minimum annual fees charged for additional classes of common shares 
(including tracking stocks), preferred stocks that are not the primary 
listed equity security, or warrants or rights. The Exchange believes 
that the benefits issuers receive in connection with those listings are 
consistent with the current minimum fee levels, as those types of 
listings do not generally entitle issuers to the types of services 
provided in connection with a primary common stock listing or primary 
preferred stock listing and the Exchange has therefore not incurred the 
same level of cost increase associated with them. In addition, their 
issuers generally also have a primary common stock listing on the 
Exchange that will be subject to the increased minimum annual fee of 
$80,000 and the Exchange believes that this increased minimum fee is 
sufficient to encompass any increases in minimum costs associated with 
any such issuer.
The Proposal Is an Equitable Allocation of Fees
    The Exchange believes its proposal equitably allocates its fees 
among its market participants.
    The Exchange believes that the proposed amendments to the annual 
fees for equity securities are equitable because they do not change the 
existing framework for such fees, but simply increase the amount of 
certain of the minimum fees and per unit rates to reflect increased 
operating costs. Similarly, as the fee structure remains effectively 
unchanged apart from the proposed increases in the rates paid by all 
issuers, the changes to annual fees for equity securities neither 
target nor will they have a disparate impact on any particular category 
of issuer.
The Proposal Is Not Unfairly Discriminatory
    The Exchange believes that the proposal is not unfairly 
discriminatory. The proposed fee changes are not unfairly 
discriminatory among issuers of primary classes of common shares 
(including Equity Investment Tracking Stocks) because the same 
increases will apply to all such issuers. The Exchange does not propose 
to increase the minimum annual fees charged for additional classes of 
common shares (including tracking stocks), preferred stocks that are 
not the primary listed equity security, or warrants or rights. For the 
reasons described above under

[[Page 79914]]

the heading ``The Proposed Changes are Reasonable,'' the Exchange 
believes that this is not unfairly discriminatory to the issuers of 
primary classes of common shares (including Equity Investment Tracking 
Stocks).
    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.
    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, and because issuers may change their chosen 
listing venue, the Exchange does not believe its proposed fee change 
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 has become effective upon filing pursuant 
to Section 19(b)(3)(A) \10\ of the Act and paragraph (f) thereunder. At 
any time within 60 days of the filing of the 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.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
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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-2022-57 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-2022-57. 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-2022-57 and should be submitted on 
or before January 18, 2023.

    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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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-28197 Filed 12-27-22; 8:45 am]
BILLING CODE 8011-01-P