Document ID: SEC-2022-1653-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE American, LLC
Posted Date: 2022-12-23T05:00Z

[Federal Register Volume 87, Number 246 (Friday, December 23, 2022)]
[Notices]
[Pages 79024-79026]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-27910]

[[Page 79024]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96530; File No. SR-NYSEAMER-2022-56]

Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Change to Increase 
Certain Annual Fees Set Forth in Section 141 of the NYSE American 
Company Guide

December 19, 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 13, 2022, NYSE American LLC (``NYSE American'' 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 141 of the NYSE American 
Company Guide (the ``Company Guide') to amend its annual fees charged 
to issuers of listed equity securities. 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 its annual fees charged to issuers 
of listed equity securities as set forth in Section 141 of the Company 
Guide. The proposed changes will take effect from the beginning of the 
calendar year commencing on January 1, 2023.
    The Exchange currently charges an annual fee of $50,000 to issuers 
with 50 million or fewer shares outstanding and an annual fee of 
$70,000 to issuers with more than 50 million shares outstanding. The 
Exchange proposes to increase the annual fee for issuers with 50 
million or fewer shares outstanding to $55,0000 [sic], and to increase 
the annual fee for issuers with more than 50 million shares outstanding 
to $75,000.
    The proposed increase in the annual fee rates reflects 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 aforementioned fee increases to better reflect the 
Exchange's costs related to listing equity securities and the 
corresponding value of such listing to companies.
    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.
    The Exchange also proposes to remove from Section 141 text 
referring to fee rates that are no longer applied as this reference is 
no longer relevant.
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 
141 to increase the annual fees for listed 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 American 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; and launching the NYSE Institute, whose 
focus includes providing thought leadership and advocacy on behalf of 
listed companies. The Exchange notes that companies listed on both the 
New York Stock Exchange and NYSE American all benefit from the 
foregoing services.
    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,\7\ 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.'' \8\
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    \7\ Release No. 34-51808 (June 9, 2005); 70 FR 37496 (June 29, 
2005).
    \8\ See Regulation NMS, 70 FR at 37499.

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[[Page 79025]]

    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 an 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 141 to better reflect the value of such listing to issuers.
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 fees to reflect increased operating costs. Similarly, as 
the fee structure remains effectively unchanged apart from 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 of equity securities.
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 operating company equity securities 
because the same fee schedule will apply to all such issuers. The 
Exchange does not propose to increase the minimum annual fees charged 
for any of the various classes of derivative securities products, 
closed end funds, bonds, or warrants for which annual fees are also set 
forth in Section 141. The Exchange believes that this is not unfairly 
discriminatory to the issuers of operating company equity securities as 
the benefits the issuers of these other classes of securities receive 
in connection with their listings are consistent with the current fee 
levels paid by those issuers. This is because those types of listings 
do not generally benefit to the same extent from services provided by 
the Exchange as do issuers of operating company equity securities.
    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) \9\ 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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    \9\ 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-NYSEAMER-2022-56 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-NYSEAMER-2022-56. 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

[[Page 79026]]

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-NYSEAMER-2022-56 and should 
be submitted on or before January 13, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-27910 Filed 12-22-22; 8:45 am]
BILLING CODE 8011-01-P