Notice2024-20321
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change To Amend Section 102.01 of the NYSE Listed Company Manual To Provide That the Distribution Standard Therein Will Be Calculated on a Worldwide Basis
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
September 10, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 175 (Tuesday, September 10, 2024)</title>
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[Federal Register Volume 89, Number 175 (Tuesday, September 10, 2024)]
[Notices]
[Pages 73463-73465]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-20321]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100918; File No. SR-NYSE-2024-47]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change To Amend Section 102.01 of the
NYSE Listed Company Manual To Provide That the Distribution Standard
Therein Will Be Calculated on a Worldwide Basis
September 4, 2024.
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 August 22, 2024, New York Stock Exchange LLC (``NYSE'' 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 102.01 of the NYSE Listed
Company Manual to provide that the distribution standard therein will
be calculated on a worldwide basis. 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
Section 102.01A of the Manual sets forth the Exchange's minimum
initial listing requirements with respect to distribution for companies
seeking to list under the Exchange's ``domestic'' initial listing
standards. A note included in Section 102.01B (under the heading
``Calculations under the Distribution Criteria'') provides that, when
considering a listing application from a company organized under the
laws of Canada, Mexico or the United States (``North America''), the
Exchange will include all North American holders and North American
trading volume in applying the minimum stockholder and trading volume
requirements of Section 102.01A.
Notwithstanding the foregoing, the note included in Section 102.01B
also provides that, in connection with the listing of any issuer from
outside North America, the Exchange will have the discretion, but will
not be required, to consider holders and trading volume in the
company's home country market or primary trading market outside the
United States in determining whether a company is qualified for listing
under Section 102.01, provided such market is a regulated stock
exchange. The note specifies that, in exercising this discretion, the
Exchange would consider all relevant factors including: (i) whether the
information was derived from a reliable source, preferably either a
regulated securities market or a transfer agent that was subject to
governmental regulation; (ii) whether there existed efficient
mechanisms for the transfer of securities between the company's non-
U.S. trading market and the United States; and (iii) the number of
shareholders and the extent of trading in the company's securities in
the United States prior to the listing.
The Exchange proposes to amend the note in Section 102.01B under
the heading ``Calculations under the Distribution Criteria'' to provide
that, when considering a listing application from a company regardless
of whether the company is domestic or foreign, the Exchange will
include all holders on a global basis and worldwide trading volume in
applying the minimum stockholder and trading volume requirements of
Section 102.01A. As the discretion provided with respect to the
inclusion of non-U.S. holders and trading volume in the current rule
would no longer be relevant if there was no geographic limitation on
the
[[Page 73464]]
inclusion of holders or trading volume in meeting the standards, the
Exchange proposes to delete from the note the discussion of how that
discretion is currently applied.
It has been the Exchange's experience in recent years that non-U.S.
companies conducting their initial public offerings in the United
States will often seek to sell a significant portion of the offering in
the company's home market rather than in the United States. Such
companies and their underwriters have sometimes had difficulty placing
shares with a sufficient number of investors in North America to meet
the Exchange's domestic distribution standards and, in some instances,
companies have been unable to list on the Exchange because of the
restrictions imposed by the current NYSE rule. In some cases, this
means that these companies are lost to the U.S. capital markets, but in
other cases these companies are able to list on the Nasdaq Stock Market
(``Nasdaq''), as Nasdaq's distribution requirements do not include a
limitation comparable to that included in the NYSE's rule. The Exchange
believes that the proposed rule change will enable it to compete more
effectively for the listing of non-U.S. companies, as the rule change
would remove a significant competitive disadvantage faced by the
Exchange in competing with Nasdaq for the listing of these companies.
In addition to the competitive benefits described above, the
Exchange believes that the current rule reflects an understanding of
the functioning of the trading market for non-U.S. companies that is
inconsistent with the current reality. The current restrictions have
been in place for many years and do not reflect the speed and
reliability of links among global securities markets. Given the ease of
transfer of securities between different countries in the contemporary
securities markets, there is no reason why the holders of a listed
company's securities outside of North America cannot be active real
time participants in the trading market in the United States and that
foreign holders should be viewed as less valuable as a source of
liquidity in that market.
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)(5) of the Act,\5\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
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 because it 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)(5).
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The Exchange believes that the proposed rule change furthers the
objectives of Section 6(b)(5) in that it will promote competition for
the listing of non-U.S. companies by ensuring that the listing rules of
the major listing exchanges will function the same in their
consideration of shareholders and trading volume outside of North
America for purposes of initial listing requirements. In addition to
these competitive benefits, the Exchange believes that the current rule
reflects an understanding of how the trading market for non-U.S.
companies functions that is inconsistent with the current reality. The
current restrictions have been in place for many years and do not
reflect the speed and reliability of links among global securities
markets. Given the ease of transfer of securities between different
countries in the contemporary securities markets, there is no reason
why the holders of a listed company's securities outside of North
America cannot be active real time participants in the trading market
in the United States and that foreign holders should be viewed as less
valuable as a source of liquidity in that market. As such, the Exchange
believes that the proposal is consistent with the protection of
investors as it reflects appropriately the role played by shareholders
and trading activity in a company's home market in the development of a
liquid trading market in the United States in the securities of non-
U.S. listed companies.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that the proposal will not impose any burden
on competition that is not necessary or appropriate in furtherance of
the purposes of Section 6(b)(8) of the Act.\6\
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\6\ 15 U.S.C. 78f(b)(8).
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The Exchange believes that the proposal will not impose a burden on
intermarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act because the proposed rule change
is designed to increase the competition for listing of non-U.S.
companies by enabling the Exchange to compete more effectively with
Nasdaq for the listing of those companies, by conforming the Exchange's
treatment of shareholders and trading volume outside North America with
their treatment under Nasdaq listing rules.
The Exchange does not believe that the proposed rule change imposes
a burden on intra-market competition because the provisions will be
applied in the same manner to all listing applicants.
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
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) by order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
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#6d1f180108400e0200000803191e2d1e080e430a021b"><span class="__cf_email__" data-cfemail="7e0c0b121b531d1113131b100a0d3e0d1b1d50191108">[email protected]</span></a>. Please include
file number SR-NYSE-2024-47 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-2024-47. 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
[[Page 73465]]
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-2024-47 and should be submitted on
or before October 1, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-20321 Filed 9-9-24; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on September 10, 2024.
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