Notice2022-22444
Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Amend Sections 140 and 141 of the NYSE American Company Guide To Waive Initial Listing Fees and Annual Listing Fees for the Remainder of the Year the Listing Occurs for an Issuer Listing Upon Closing of Its Acquisition of an Exchange-Listed Special Purpose Acquisition Company
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 17, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 199 (Monday, October 17, 2022)</title>
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[Federal Register Volume 87, Number 199 (Monday, October 17, 2022)]
[Notices]
[Pages 62910-62913]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-22444]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96021; File No. SR-NYSEAMER-2022-42]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Change To Amend Sections
140 and 141 of the NYSE American Company Guide To Waive Initial Listing
Fees and Annual Listing Fees for the Remainder of the Year the Listing
Occurs for an Issuer Listing Upon Closing of Its Acquisition of an
Exchange-Listed Special Purpose Acquisition Company
October 11, 2022.
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 September 30, 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 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\ 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 sections 140 and 141 of the NYSE
American Company Guide (``Company Guide'') to waive initial listing
fees and the prorated annual fee for the first partial year of listing
for any issuer that is not itself listed on a national securities
exchange immediately prior to its initial listing on the Exchange but
is listing a class of equity securities upon closing of its acquisition
of a special purpose acquisition company which had a class of equity
securities listed on the Exchange or another national securities
exchange prior to the closing of such acquisition. The proposed 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
The Exchange proposes to amend sections 140 and 141 of the Company
Guide to waive initial listing fees and the prorated annual fee for the
first partial year of listing for any issuer that is not itself listed
on a national securities exchange immediately prior to its initial
listing on the Exchange but is listing a class of equity securities
upon closing of its acquisition of a special purpose acquisition
company (``SPAC'') which had a class of equity securities listed on the
Exchange or another national securities exchange prior to the closing
of such acquisition.
When a SPAC consummates its business combination, the SPAC is
typically the legal acquirer in the transaction and, provided it meets
the initial listing standards applied in connection with a business
combination
[[Page 62911]]
by a listed SPAC, it can remain listed on the Exchange. Section 142(g)
of the Company Guide provides that a company listed pursuant to section
119 (``Listing of Companies Whose Business Plan is to Complete One or
More Acquisitions'') which remains listed on NYSE American upon
consummation of its business combination will not be subject to any
fees in relation to the issuance of any additional shares in connection
with (1) the consummation of the business combination or (2) a
transaction which is occurring at the same time as the business
combination with a closing contractually contingent on the consummation
of the business combination. The NYSE American- listed SPAC has already
been billed its annual fees for that calendar year and will not incur
any prorated annual fees for the issuance of additional shares.\4\
Similar to the treatment for fee purposes of a SPAC that is listed on
the Exchange and chooses to remain listed after its business
combination, a SPAC that is listed on another national securities
exchange and that chooses to transfer to NYSE American at the time of
its business combination is not subject to any initial listing fees or
annual fees for the first part year of listing on NYSE American. This
is because section 140 of the Company Guide provides that any company
listing any class of equity securities upon transfer from another
market will not be subject to any initial listing fees in connection
with such listing. Similarly, section 141 of the Company Guide provides
that issuers transferring the listing of their primary class of common
shares from another national securities exchange are not required to
pay annual fees with respect to that primary class of common shares or
any other class of securities transferred in conjunction therewith for
the remainder of the calendar year in which the transfer occurs.
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\4\ Such shares are reflected in the full-year annual fee bill
for the year after the business combination.
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By contrast to the above-described fee waivers, if a company that
is not listed on the Exchange or another national securities exchange
merges with a NYSE American-listed SPAC or a SPAC listed on another
national securities exchange and the non-listed company is the acquirer
in the transaction, the non-listed company is treated as a new listing
and must pay initial listing fees and prorated annual fees in relation
to all shares issued and outstanding at the time of initial listing.
To address this disparity between a NYSE American-listed SPAC or a
SPAC listed on another national securities exchange that is the
acquirer in a business combination and a business combination involving
a non-listed issuer where such issuer is the acquirer, the Exchange
proposes to amend section 140 of the Company Guide. Specifically, as
amended, section 140 would waive initial listing fees in cases where a
company that is not itself listed on a national securities exchange
immediately prior to its initial listing on the Exchange is listing a
class of equity securities upon closing of its acquisition of a SPAC
which had a class of equity securities listed on the Exchange or
another national securities exchange prior to the closing of such
acquisition. Similarly, the Exchange proposes to amend section 141 of
the Company Guide to waive with respect to any such company the
requirement to pay annual fees with respect to that primary class of
common shares or any other class of securities listed in conjunction
therewith for the remainder of the calendar year in which the listing
occurs. The Exchange believes the similar treatment of a NYSE American-
listed SPAC or a SPAC listed on another national securities exchange
that is the acquirer in a business combination and a business
combination involving a non-listed issuer where such issuer is the
acquirer is reasonable because the ultimate listed company is the same.
The Exchange believes that the differential treatment accorded to
business combinations where the NYSE American listed SPAC or SPAC
listed on another national securities exchange is legally acquired by
an unlisted company is anomalous. The decision whether to structure a
business combination with the SPAC as the legal acquirer rather than
the other party does not result in the listing of a substantively
different entity. Accordingly, the Exchange believes there is no basis
for charging fees purely on the basis of the structure of the business
combination chosen by the parties.
The Exchange notes that, in the case of a listing of a non-listed
company upon acquisition of a SPAC that was listed on another national
securities exchange, the SPAC would have paid initial listing fees and
annual fees for that calendar year to the other national securities
exchange. The Exchange believes the proposed waivers would therefore
enable NYSE American to better compete for the listing of non-listed
companies acquiring SPACs listed on other national securities exchanges
than it can currently, as the listing of the combined company would not
result in any fees under the rules of either of the other national
securities exchanges that list equity securities,\5\ thereby creating a
disincentive to listing on NYSE American. The Exchange believes that by
addressing these competitive concerns, the proposal is not unfairly
discriminatory.
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\5\ See NYSE Listed Company Manual Section 902.02 and Nasdaq
Marketplace Rule 5910(a)(7)(v).
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The Exchange believes that the proposed rule change would not
affect the Exchange's commitment of resources to its regulatory
oversight of the listing process or its regulatory programs.
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)(1).
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The Proposed Change Is Reasonable
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.
Given this competitive environment, the Exchange believes that the
proposed
[[Page 62912]]
fee waivers are reasonable because the cost of paying initial listing
fees and the first part year of annual fees to the NYSE American acts
as a disincentive to listing on the Exchange.
The Proposal Is an Equitable Allocation of Fees
The Exchange believes that the proposed fee waivers are equitable
because they avoid an anomalous fee outcome arising from the manner in
which a SPAC business combination has been structured.
The Proposal Is Not Unfairly Discriminatory
The Exchange believes that the proposal is not unfairly
discriminatory, because the proposed waivers are solely intended to
avoid the impact on a limited group of issuers of an anomalous fee
outcome arising from the manner in which a SPAC business combination
has been structured. Section 142 of the Company Guide includes a
specific waiver of all listing fees for the issuance of shares by a
NYSE American-listed SPAC which remains listed upon consummation of its
business combination in relation to the issuance of any additional
shares in connection with (1) the consummation of the business
combination or (2) a transaction which is occurring at the same time as
the business combination with a closing contractually contingent on the
consummation of the business combination. The NYSE American-listed SPAC
has already been billed its annual fees for that calendar year and will
not incur any prorated fees for the issuance of additional shares.\9\
By contrast, if a company that is not listed on the Exchange or another
national securities exchange merges with a NYSE American-listed SPAC
and the non-listed company is the acquirer in the transaction, the non-
listed company is treated as a new listing and must pay initial listing
fees and prorated annual fees in relation to all shares issued and
outstanding at the time of initial listing.
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\9\ Such shares are reflected in the full-year annual fee bill
for the year after the business combination.
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A SPAC is a shell company with no business operations.
Consequently, the parties to a business combination between a SPAC and
an operating company have significant flexibility in how they choose to
structure the business combination, including in determining which
entity will be the legal acquirer. The Exchange is proposing to amend
its fee structure to reflect the incidental nature of the resulting
SPAC business combination and to avoid treating companies undergoing
similar business combinations disparately. By contrast to a SPAC
business combination, there are typically more significant limitations
on the ability of the parties to a merger between two operating
companies to make decisions about which entity will be the acquirer,
including, for example, the desire to maintain the acquirer's SEC
registration and concerns about how to present the combined entity to
the market. As such, it is much more likely that the listing fee
implications of how the transaction is structured would be a major
consideration for the parties to a SPAC business combination than would
be the case in a merger between two operating companies. As the
implications of the proposed fee waivers for decisions relating to the
transaction structures utilized by unlisted companies listing in
connection with the acquisition of a SPAC are typically greater than
for other companies listing in conjunction with merger transactions,
the proposed waivers are not unfairly discriminatory.
The Exchange notes that, in the case of a listing of a non-listed
company upon acquisition of a SPAC that was listed on another national
securities exchange, the SPAC would have paid initial listing fees and
annual fees for that calendar year to the other national securities
exchange. The Exchange believes the proposed waivers would therefore
enable NYSE American to better compete for the listing of non-listed
companies acquiring SPACs listed on other national securities exchanges
than it can currently, as the listing of the combined company would not
result in any fees under the rules of either of the other national
securities exchanges that list equity securities,\10\ thereby creating
a disincentive to listing on NYSE American. The Exchange believes that
by addressing these competitive concerns, the proposal is not unfairly
discriminatory.
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\10\ See note 5 supra.
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Finally, the Exchange believes that it is subject to significant
competitive forces, as described below in the Exchange's statement
regarding the burden on competition.
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.
Intramarket Competition
The proposed waiver will be available to all similarly situated
issuers on the same basis. The proposed waiver will address an
anomalous discrepancy in fee treatment between business combinations of
SPACs listed on the Exchange and companies that are not listed on a
national securities exchange based solely on which entity is the legal
survivor in the transaction. The Exchange does not believe that the
proposed waivers 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
change can impose any burden on intermarket competition.
The Exchange notes that, in the case of a listing of a non-listed
company upon acquisition of a SPAC that was listed on another national
securities exchange, the SPAC would have paid initial listing fees and
annual fees for that calendar year to the other national securities
exchange. The Exchange believes the proposed waivers would therefore
enable NYSE American to better compete for the listing of non-listed
companies acquiring SPACs listed on other national securities exchanges
than it can currently, as the listing of the combined company would not
result in any fees under the rules of either of the other national
securities exchanges that list equity securities, thereby creating a
disincentive to listing on NYSE American.
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) \11\ of the Act and subparagraph (f)(2) of Rule
19b-4 \12\
[[Page 62913]]
thereunder, because it establishes a due, fee, or other charge imposed
by the Exchange.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 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) \13\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\13\ 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#0e7c7b626b236d6163636b607a7d4e7d6b6d20696178"><span class="__cf_email__" data-cfemail="1c6e697079317f7371717972686f5c6f797f327b736a">[email protected]</span></a>. Please include
File Number SR-NYSEAMER-2022-42 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 Number SR-NYSEAMER-2022-42. 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 Number SR-NYSEAMER-2022-42, and should be
submitted on or before November 7, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-22444 Filed 10-14-22; 8:45 am]
BILLING CODE 8011-01-P
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