Notice2021-15340
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Arca Equities Listing Fee Schedule
Primary source
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Published
July 20, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 136 (Tuesday, July 20, 2021)</title>
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[Federal Register Volume 86, Number 136 (Tuesday, July 20, 2021)]
[Notices]
[Pages 38389-38391]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-15340]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92405; File No. SR-NYSEArca-2021-56]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE
Arca Equities Listing Fee Schedule
July 14, 2021.
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 June 30, 2021, NYSE Arca, Inc. (``NYSE Arca'' 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 the NYSE Arca Equities listing fee
schedule to modify the initial listing fees for equity securities and
warrants and adopt fee provisions specific to groups of three or more
listed REITs under common control. The proposed rule change is
available on the Exchange's website at <a href="http://www.nyse.com">www.nyse.com</a>, 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
Initial Listing Fees
NYSE Arca charges initial listing fees for the listing of common
stock, preferred stock and warrants of operating companies based on the
number of shares of the issuer outstanding at the time of initial
listing (or, in the case of listed foreign private issuers, the number
of shares outstanding in the United States), based on the following
current schedule:
Up to and including 30 million shares outstanding--$100,000
More than 30 million shares outstanding up to and including 50 million
shares outstanding--$125,000
More than 50 million shares outstanding--$150,000
The Exchange proposes to reduce the initial fee levels to the
following:
Up to and including 30 million shares outstanding--$55,000
More than 30 million shares outstanding up to and including 50 million
shares outstanding--$60,000
More than 50 million shares outstanding--$75,000
The Exchange believes that these proposed fee levels are more
consistent
[[Page 38390]]
with its actual costs in processing listing applications than those
charged under the current fee schedule.
REIT Group Fee Discount
The Exchange proposes to provide group discounts for listings of
common stock, preferred stock and warrants where three or more real
estate investment trusts (``REITs'') are listed on the Exchange and are
externally managed by the same entity or entities under common control.
Initial Listing Fee Discount: As proposed, if substantially all of
the operations of three or more REITs that list in the same calendar
year are externally managed by the same entity or by entities under
common control, the initial listing fees payable by such REITs will be
capped at an aggregate of $165,000 (the ``REIT Group Cap''), to be
divided among such issuers in proportion to the shares they list at the
time of initial listing. The applicability of the REIT Group Cap to
REITs listed during a calendar year will be determined at the end of
such calendar year. If a REIT is entitled to a reduced listing fee
under the REIT Group Cap, such REIT will be entitled to receive a
credit against the following calendar year's annual fee and, where
applicable, annual fees payable in subsequent calendar years.
Annual Fee Discount: As proposed, if substantially all of the
operations of each of a group of three or more listed REITs are
externally managed by the same entity or by entities under common
control, each REIT in the group will receive a 50% discount on the
applicable Annual Fees in relation to any year or portion of a year for
which the common management relationship continues in existence.\4\
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\4\ The following is the Annual Fee schedule for common stock
and preferred stock:
Up to and including 10 million shares--$30,000
More than 10 million shares up to and including 100 million
shares--$30,000 plus $0.000375 per share above 10 million
More than 100 million shares--$85,0000
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A limited number of publicly traded REITs have their operations
externally managed by another entity pursuant to a management
agreement. Typically, the REIT itself does not have any direct
employees. Rather, the external manager is entirely responsible for
managing and staffing the operations of the company, in return for
management fees and the reimbursement of expenses as set forth in the
management agreement. In a limited number of cases, a single entity or
affiliated entities may externally manage more than one REIT. As an
incentive for all the REITs in such a group to list on the Exchange and
to reflect the efficiencies described below, the Exchange believes that
it is appropriate to offer a group discount on initial listing fees and
annual fees when there are at least three REITs under common
management.
The Exchange believes that the proposed initial and annual fee
discounts for a group of three or more REITs that are under common
control is equitable and is not unfairly discriminatory, as there are
meaningful efficiencies for the Exchange in dealing with the same
external management team for multiple REITs. The resources the Exchange
expects to expend when dealing with a single external manager in
processing the new listing of multiple REITs in a single calendar year
or with respect to the ongoing client service and compliance review of
multiple REITS under common control are significantly less than would
be the case for a REIT that is not part of such a group, so the
Exchange believes the proposed discount is appropriate.
The Exchange notes that the New York Stock Exchange provides an
annual fee discount for REITs that are externally managed by the same
entity or by entities under common control.\5\
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\5\ See Section 902.03A of the NYSE Listed Company Manual.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\6\ in general, and furthers the
objectives of Section 6(b)(4) \7\ 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,\8\ 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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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(4).
\8\ 15 U.S.C. 78f(b)(5).
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The Exchange operates in a highly competitive marketplace for the
listing of equity securities. The Commission has repeatedly expressed
its preference for competition over regulatory intervention in
determining prices, products, and services in the securities markets.
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.
The Exchange believes that the proposed modification to the initial
listing fee schedule is equitable and is not unfairly discriminatory as
it will be applied to all listing applicants in a consistent and
transparent manner and is being proposed for the purpose of aligning
initial listing fees more closely with the Exchange's actual costs in
processing new listings.
The Exchange believes that the proposed initial and annual fee
discounts for a group of three or more REITs that are under common
control is equitable and is not unfairly discriminatory, as there are
meaningful efficiencies for the Exchange in dealing with the same
external management team for multiple REITs. The resources the Exchange
expects to expend when dealing with a single external manager in
processing the new listing multiple REITs in a single calendar year or
with respect to the ongoing client service and compliance review of
multiple REITS under common control are significantly less than would
be the case for a REIT that is not part of such a group, so the
Exchange believes the proposed discount is appropriate.
The Exchange does not expect the proposed rule changes would affect
the Exchange's commitment of resources to 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 that is not necessary or appropriate
in furtherance of the purposes of the Act.
Intramarket Competition: All operating companies listing on the
Exchange will be eligible to avail themselves of the proposed modified
initial fee schedule. Therefore, the Exchange does not believe that the
proposed changes to the initial listing fee schedule will have any
meaningful effect on the competition among issuers listed on the
Exchange. The purpose of the proposed group discount for REITs under
common external management is
[[Page 38391]]
recognize the significant efficiencies the Exchange experiences in
dealing with a common manager for multiple issuers. As only a small
percentage of listed companies are expected to qualify for the proposed
discount, the Exchange does not believe that it 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 in response, and
because issuers may change their listing venue, the Exchange does not
believe its proposed fee changes 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 is effective upon filing pursuant to
Section 19(b)(3)(A) \9\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \10\ thereunder, because it establishes a due, fee, or other charge
imposed by the Exchange.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(2).
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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) \11\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\11\ 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
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#9be9eef7feb6f8f4f6f6fef5efe8dbe8fef8b5fcf4ed"><span class="__cf_email__" data-cfemail="acded9c0c981cfc3c1c1c9c2d8dfecdfc9cf82cbc3da">[email protected]</span></a>. Please include
File No. SR-NYSEArca-2021-56 on the subject line.
Paper Comments
<bullet> 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 No. NYSEArca-2021-56. 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 (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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 No. NYSEArca-2021-56, and should be submitted on
or before August 10, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-15340 Filed 7-19-21; 8:45 am]
BILLING CODE 8011-01-P
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