Notice2023-27157
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Sections 902.02 and 902.03 of the NYSE Listed Company Manual To Amend Its Initial Listing Fee and Certain of Its Annual Fees
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
December 12, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 237 (Tuesday, December 12, 2023)</title>
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[Federal Register Volume 88, Number 237 (Tuesday, December 12, 2023)]
[Notices]
[Pages 86181-86183]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-27157]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99091; File No. SR-NYSE-2023-49]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Sections 902.02 and 902.03 of the NYSE Listed Company Manual To
Amend Its Initial Listing Fee and Certain of Its Annual Fees
December 6, 2023.
Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 1, 2023, New York Stock Exchange LLC (``NYSE'' or the
``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 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\ 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 902.02 and 902.03 of the
NYSE Listed Company Manual (the ``Manual') to amend its initial listing
fee and certain of its annual fees charged to listed issuers. 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
[[Page 86182]]
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 initial listing fee and certain
of its annual fees charged to listed issuers as set forth in Sections
902.02 and 902.03 of the Manual. The proposed changes will take effect
from the beginning of the calendar year commencing on January 1, 2024.
The Exchange currently charges a flat initial listing fee of
$295,000 the first time an issuer lists a class of common shares on the
Exchange. The Exchange proposes to increase this flat initial listing
fee by $5,000 from $295,000 to $300,000. Section 902.03 of the Manual
contains examples of how listing fees are calculated for certain
UPREITs, U.S. issuers and foreign private issuers. The Exchange
proposes to make conforming changes to these examples in Section 902.03
to reflect the new $300,000 flat initial listing fee.
The Exchange currently charges an annual fee of $0.001215 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
$0.001215 per share to $0.001265 per share.
The proposed increase in the initial listing fee and the per share
rates for 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
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.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with section 6(b) of the Act,\3\ in general, and furthers the
objectives of section 6(b)(4) \4\ 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,\5\ 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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\3\ 15 U.S.C. 78f(b).
\4\ 15 U.S.C. 78f(b)(4).
\5\ 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 sections
902.02 and 902.03 to increase the initial listing fee and 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 initial
listing fee and the 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 expanding the NYSE Institute, whose focus includes
providing thought leadership and advocacy on behalf of listed
companies.
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,\6\ 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.'' \7\
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\6\ Securities Exchange Act Release No. 34-51808 (June 9, 2005);
70 FR 37496 (June 29, 2005) (``Regulation NMS'').
\7\ 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 initial listing fee and 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
Sections 902.02 and 902.03 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 initial
listing fee and annual fees for equity securities are equitable because
they do not change the existing framework for such fees, but simply
increase the amount of the flat initial listing fee and per unit annual
fee 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 the initial
listing fee or 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.
[[Page 86183]]
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. 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 is effective upon filing pursuant to
section 19(b)(3)(A) \8\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \9\ thereunder, because it establishes a due, fee, or other charge
imposed by the Exchange.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 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) \10\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\10\ 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="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#057770696028666a6868606b7176457660662b626a73"><span class="__cf_email__" data-cfemail="146661787139777b7979717a6067546771773a737b62">[email protected]</span></a>. Please include
file number SR-NYSE-2023-49 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-NYSE-2023-49. 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="https://www.sec.gov/rules/sro.shtml">https://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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-NYSE-2023-49 and should be
submitted on or before January 2, 2024.
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. 2023-27157 Filed 12-11-23; 8:45 am]
BILLING CODE 8011-01-P
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