Document ID: SEC-2013-1458-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2013-08-15T04:00Z

[Federal Register Volume 78, Number 158 (Thursday, August 15, 2013)]
[Notices]
[Pages 49785-49787]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-19783]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70155; File No. SR-NYSE-2013-57]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending Section 902.03 of the Listed Company Manual To Specify How the 
Initial Application Fee Is Treated for Certain Issuers That Do Not 
Immediately List a Security for Which They Already Paid an Initial 
Application Fee

August 9, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on July 31, 2013, New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. 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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend Section 902.03 of the Listed Company 
Manual (the ``Manual'') to specify how the Initial Application Fee is 
treated for certain issuers that do not immediately list a security for 
which they already paid an Initial Application Fee. In addition to the 
substantive changes proposed herein, the Exchange also proposes to make 
certain non-substantive changes to Section 902.03. The text of the 
proposed rule change is available on the Exchange's Web site 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Section 902.03 of the Manual to 
specify how the Initial Application Fee is treated for certain issuers 
that do not immediately list a security for which they already paid an 
Initial Application Fee. In addition to the substantive changes 
proposed herein, the Exchange also proposes to make certain non-
substantive changes to Section 902.03.
Background
    Section 902.03 of the Manual provides for an Initial Application 
Fee of $25,000 that is charged to an issuer that applies to list 
certain securities on the Exchange.\3\
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    \3\ See Securities Exchange Act Release No. 68470 (December 19, 
2012), 77 FR 76116 (December 26, 2012) (SR-NYSE-2012-68). Certain 
issuers are not required to pay an Initial Application Fee. See 
Section 902.03.
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    An issuer applying to list a security on the Exchange is subject to 
a preliminary free confidential review by NYSE Regulation, Inc. 
(``NYSER''), in which NYSER determines the issuer's qualification for 
listing. As set forth in Section 702.02 of the Manual, if NYSER 
determines in connection with this preliminary confidential review that 
the issuer is qualified for listing, the issuer is informed that it has 
been cleared as eligible to list and that the Exchange will accept a 
formal Original Listing Application from the issuer. It is the 
Exchange's practice to notify the issuer of its eligibility clearance 
and the conditions to its listing by means of a letter (the ``pre-
clearance'' letter).\4\
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    \4\ The Exchange has submitted a rule filing to the SEC that 
would revise the sections of the Manual describing the listing 
application process and would delete Section 702.02. However, new 
Sections 104.00 and 702.00 will describe the eligibility clearance 
process in a manner that is substantively the same as that provided 
in this filing. See 34-69565 (May 13, 2013), 78 FR 29165 (May 17, 
2013) (SR-NYSE-2013-33). See also 34-69878 (June 27, 2013) 
(extending until August 15, 2013 the Commission's time to take 
action on the listing application filing).
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    For an issuer subject to the Initial Application Fee, payment of 
the Initial Application Fee is a prior condition to eligibility 
clearance being granted. As a practical matter, the Exchange 
anticipates that an issuer would pay the Initial Application Fee after 
NYSER has completed its preliminary confidential review and has 
determined that the issuer is eligible to submit a formal Original 
Listing Application, but before

[[Page 49786]]

the ``pre-clearance'' letter has been issued. To enable an issuer to 
make an informed decision about whether to submit an Initial 
Application Fee, promptly after making a determination that an issuer 
is eligible to list but subject to the payment of the Initial 
Application Fee, the Exchange shall inform such issuer in writing that 
it is entitled to receive a clearance letter upon payment of the 
Initial Application Fee.\5\
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    \5\ The purpose of this notification is to assure any such 
issuer that it will not have to pay a non-refundable Initial 
Application Fee subject to any risk that it will not subsequently 
receive a clearance letter.
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    The Initial Application Fee is applied toward the applicable 
Listing Fees for an issuer that lists on the Exchange. If an issuer 
pays an Initial Application Fee in connection with the application to 
list a security but does not immediately list such security, the issuer 
is not required to pay an additional Initial Application Fee if it 
subsequently lists such security, so long as (i) the issuer has a 
registration statement regarding such security on file with the 
Commission, or, (ii) if the issuer has withdrawn its registration 
statement, the issuer refiles a registration statement regarding such 
security within 12 months of the date of such withdrawal.
    The Initial Application Fee is non-refundable. It is designed to 
allow the Exchange to recover, in part, the costs associated with 
processing and evaluating an issuer's application, irrespective of 
whether the relevant issuance qualifies for listing or whether such 
issuer decides to list on the Exchange, and to provide a disincentive 
for impractical applications by issuers.\6\
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    \6\ See Securities Exchange Act Release No. 68470 (December 19, 
2012), 77 FR 76116 (December 26, 2012) (SR-NYSE-2012-68).
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Emerging Growth Companies and Foreign Private Issuers
    As noted above, if an issuer pays an Initial Application Fee in 
connection with the application to list a security but does not 
immediately list such security, the issuer is not required to pay an 
additional Initial Application Fee if it subsequently lists such 
security, so long as:
    (i) The issuer has a registration statement regarding such security 
on file with the Commission, or,
    (ii) if the issuer withdrew its registration statement, the issuer 
refiled a registration statement regarding such security within 12 
months of the date of such withdrawal.
    The Exchange proposes to amend Section 902.03 of the Manual to add 
two additional circumstances in which an issuer will not be required to 
pay a subsequent Initial Application Fee, in order to address issuers 
that do not file a publicly-available registration statement with the 
Commission. Specifically, pursuant to Section 6(e) of the Securities 
Act of 1933 (the ``Securities Act''),\7\ an ``emerging growth company'' 
(as defined in Section 2(a)(19) of the Securities Act \8\ and Section 
3(a)(80) of the Act \9\) may submit a draft registration statement to 
the Commission for confidential, nonpublic review. Additionally, a 
foreign private issuer (as defined in Rule 3b-4(c) under the Act \10\) 
is also eligible to submit a draft registration statement as an 
emerging growth company or pursuant to a nonpublic submission policy of 
the Commission's Division of Corporation Finance.\11\
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    \7\ 15 U.S.C. 77f(e). See Section 106 of the Jumpstart Our 
Business Startups Act (the ``JOBS Act''), available at http://www.gpo.gov/fdsys/pkg/BILLS-112hr3606enr/pdf/BILLS-112hr3606enr.pdf.
    \8\ 15 U.S.C. 77b(a)(19).
    \9\ 15 U.S.C. 78c(a)(80).
    \10\ 17 CFR 240.3b-4(c).
    \11\ The policy is available at http://www.sec.gov/divisions/corpfin/internatl/nonpublicsubmissions.htm.
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    The Exchange proposes to add two additional provisions that specify 
that, if an issuer pays an Initial Application Fee in connection with 
the application to list a security but does not immediately list such 
security, and the issuer is an emerging growth company and/or foreign 
private issuer and has submitted a draft registration statement to the 
Commission for confidential, nonpublic review pursuant to Section 6(e) 
of the Securities Act or the foreign issuer nonpublic submission policy 
of the Commission's Division of Corporation Finance (a ``Confidential 
Submission''), the issuer will not be required to pay an additional 
Initial Application Fee if it subsequently lists a security, so long 
as:
    (a) the issuer has submitted to the Commission through the 
Commission's electronic submission system a Confidential Submission 
within the previous 120 days (for purposes of this rule, a ``Current 
Confidential Submission'') and the issuer provides evidence of such 
Current Confidential Submission to the Exchange; or
    (b) if the Confidential Submission has ceased to be a Current 
Confidential Submission, then, within 12 months of the date such 
Confidential Submission ceased to be a Current Confidential Submission 
the issuer resubmits a Confidential Submission regarding such security 
and the issuer provides evidence of such Confidential Submission to the 
Exchange, or publicly files a registration statement regarding such 
security.
Non-Substantive Change
    In addition to the substantive changes proposed herein, the 
Exchange also proposes non-substantive changes to remove obsolete text 
from Section 902.03 of the Manual (i) stating that the Initial 
Application Fee became effective January 1, 2013, and (ii) referring to 
payment of Listing Fees for a security that transfers from another 
market.\12\ Additionally, the Exchange proposes to specify that, as is 
the case today, the Initial Application is non-refundable.
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    \12\ As provided in Section 902.02 of the Listed Company Manual, 
an issuer is not required to pay Listing Fees in connection with 
transferring the listing of any class of equity securities, any 
structured product or any closed-end fund from any other national 
securities exchange.
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    The Exchange notes that the proposed change is not otherwise 
intended to address any other issues surrounding Initial Application 
Fees and that the Exchange is not aware of any problems that issuers 
would have in complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\13\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\14\ in 
particular, because it provides for the equitable allocation of 
reasonable dues, fees, and other charges among its members, issuers and 
other persons using its facilities and does not unfairly discriminate 
between customers, issuers, brokers or dealers.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(4) and (5).
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    Generally, the Exchange believes that the proposed change is 
reasonable because it will ensure that a company that submits a 
confidential, nonpublic, draft registration statement to the Commission 
for review but does not immediately list the security, for which it has 
paid an Initial Application Fee will be treated the same as an issuer 
that has filed a public registration statement. The proposed rule 
change is reasonable because it protects issuers entitled to avail 
themselves of the ability to make a Confidential Submission by ensuring 
that they are not required to pay the Initial Application Fee twice.
    The Exchange also believes that the proposed change is equitable 
and not unfairly discriminatory because it will maintain the 
effectiveness of an already-paid Initial Application Fee for an issuer 
that submits a confidential, nonpublic draft registration statement to 
the Commission for review, but does not

[[Page 49787]]

immediately list the security, on the same general terms as is 
currently applicable to an issuer that publicly files its registration 
statement.
    The Exchange believes that the proposed non-substantive changes are 
reasonable because they will ensure that the description of the Initial 
Application Fee is clear and accurate. These changes are also equitable 
and not unfairly discriminatory because they will benefit all issuers 
and all other readers of the Manual.

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 change is 
designed to specify how the Initial Application Fee is treated for an 
issuer that submits a confidential, nonpublic draft registration 
statement to the Commission for review, but does not immediately list 
the security. Additionally, the proposed rule change does not impose a 
burden on competition because it ensures that companies that avail 
themselves of the ability to make a Confidential Submission are treated 
the same as issuers that file a public registration statement for 
purposes of the Initial Application Fee. Therefore, there is no 
disincentive to make a Confidential Submission as opposed to publicly 
filing a registration statement.

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

    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 for 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 \15\ and Rule 19b-
4(f)(6) thereunder.\16\
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 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 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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    The Exchange has requested that the Commission waive the 30-day 
operative delay so that the proposal may become operative immediately 
upon filing. The Commission believes that waiving the 30-day operative 
delay is consistent with the protection of investors and the public 
interest. Doing so will allow the Exchange to immediately specify in 
its rules how the Initial Application Fee is treated for an issuer that 
makes a Confidential Submission with respect to a security but does not 
immediately list the security, which is similar to the current 
treatment for public filers for purposes of paying the Initial 
Application Fee. Therefore, the Commission hereby waives the 30-day 
operative delay and designates the proposal operative upon filing.\17\
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    \17\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) of the Act \18\ to determine whether the proposed 
rule change should be approved or disapproved.
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    \18\ 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-NYSE-2013-57 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2013-57. 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 Web site (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 Web site viewing and 
printing in the Commission's Public Reference Room at 100 F Street NE., 
Washington, DC 20549-1090 on official business days between the hours 
of 10:00 a.m. and 3:00 p.m. Copies of such 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-
NYSE-2013-57, and should be submitted on or before September 5, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-19783 Filed 8-14-13; 8:45 am]
BILLING CODE 8011-01-P