Notice2024-23417
Self-Regulatory Organizations; New York Stock Exchange LLC; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Amend Section 302.00 of the NYSE Listed Company Manual To Exempt Closed-End Funds Registered Under the Investment Company Act of 1940 From the Requirement To Hold Annual Shareholder Meetings
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 10, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 197 (Thursday, October 10, 2024)</title>
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[Federal Register Volume 89, Number 197 (Thursday, October 10, 2024)]
[Notices]
[Pages 82277-82281]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-23417]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101257; File No. SR-NYSE-2024-35]
Self-Regulatory Organizations; New York Stock Exchange LLC; Order
Instituting Proceedings To Determine Whether To Approve or Disapprove a
Proposed Rule Change To Amend Section 302.00 of the NYSE Listed Company
Manual To Exempt Closed-End Funds Registered Under the Investment
Company Act of 1940 From the Requirement To Hold Annual Shareholder
Meetings
October 4, 2024.
I. Introduction
On June 21, 2024, the New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Exchange Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to amend Section 302.00 of the
NYSE Listed Company Manual (``Manual'') to exempt closed-end funds
registered under the Investment Company Act of 1940 (``1940 Act'') \3\
from the requirement to hold annual shareholder meetings. The proposed
rule change was published for comment in the Federal Register on July
9, 2024.\4\ On August 21, 2024, pursuant to Section 19(b)(2) of the
Exchange Act,\5\ the Commission designated a longer period within which
to approve the proposed rule change, disapprove the proposed rule
change, or institute proceedings to determine whether to disapprove the
proposed rule change.\6\ The Commission is instituting proceedings
pursuant to Section 19(b)(2)(B) of the Exchange Act \7\ to determine
whether to approve or disapprove the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 80a-1 et seq.
\4\ See Securities Exchange Act Release No. 100460 (July 3,
2024), 89 FR 56447 (``Notice''). Comments on the proposed rule
change are available at: <a href="https://www.sec.gov/comments/sr-nyse-2024-35/srnyse202435.htm">https://www.sec.gov/comments/sr-nyse-2024-35/srnyse202435.htm</a>.
\5\ 15 U.S.C. 78s(b)(2).
\6\ See Securities Exchange Act Release No. 100790, 89 FR 68676
(Aug. 27, 2024). The Commission designated October 7, 2024, as the
date by which the Commission shall approve or disapprove, or
institute proceedings to determine whether to disapprove, the
proposed rule change.
\7\ 15 U.S.C. 78s(b)(2)(B).
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II. Description of the Proposed Rule Change
Section 102.04 of the Manual sets forth listing requirements for
closed-end
[[Page 82278]]
management investment companies registered under the 1940 Act
(``CEFs''). Section 302.00 of the Manual (``Section 302.00'') provides
that companies listing common stock or voting preferred stock and their
equivalents are required to hold an annual shareholders' meeting for
the holders of such securities during each fiscal year. Section 302.00
also sets forth certain exemptions from this annual shareholder meeting
requirement.\8\ CEFs listed on the Exchange are currently required to
comply with the Section 302.00 annual shareholder meeting requirement
and are not subject to an exemption. The Exchange proposes to amend
Section 302.00 to exempt CEFs listed under Section 102.04A of the
Manual from the requirement to hold an annual shareholder meeting.\9\
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\8\ Specifically, Section 302.00 exempts from this requirement
companies whose only securities listed on the Exchange are non-
voting preferred and debt securities, passive business organizations
(such as royalty trusts), or securities listed pursuant to NYSE Rule
5.2(j)(2) (Equity Linked Notes), Rule 5.2(j)(3) (Investment Company
Units), Rule 5.2(j)(4) (Index-Linked Exchangeable Notes), Rule
5.2(j)(5) (Equity Gold Shares), Rule 5.2(j)(6) (Equity-Index Linked
Securities, Commodity-Linked Securities, Currency-Linked Securities,
Fixed Income Index-Linked Securities, Futures-Linked Securities and
Multifactor Index-Linked Securities), Rule 5.2(j)(8) (Exchange-
Traded Fund Shares), Rule 8.100 (Portfolio Depositary Receipts),
Rule 8.200 (Trust Issued Receipts), Rule 8.201 (Commodity-Based
Trust Shares), Rule 8.202 (Currency Trust Shares), Rule 8.203
(Commodity Index Trust Shares), Rule 8.204 (Commodity Futures Trust
Shares), Rule 8.300 (Partnership Units), Rule 8.400 (Paired Trust
Shares), Rule 8.600 (Managed Fund Shares), Rule 8.601 (Active Proxy
Portfolio Shares), Rule 8.700 (Managed Trust Securities), and Rule
8.900 (Managed Portfolio Shares).
\9\ The Exchange lists closed-end management investment
companies that have filed an election to be treated as a business
development company under the 1940 Act (``BDCs'') under Section
102.04B of the Manual. The Exchange is not proposing to exempt BDCs
listed under Section 102.04B of the Manual from the annual
shareholder meeting requirement set forth in Section 302.00.
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III. Proceedings To Determine Whether To Approve or Disapprove SR-NYSE-
2024-35 and Grounds for Disapproval Under Consideration
The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Exchange Act \10\ to determine whether the proposed
rule change should be approved or disapproved. Institution of
proceedings is appropriate at this time in view of the legal and policy
issues raised by the proposed rule change. Institution of proceedings
does not indicate that the Commission has reached any conclusions with
respect to any of the issues involved.
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\10\ 15 U.S.C. 78s(b)(2)(B).
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Pursuant to Section 19(b)(2)(B) of the Exchange Act,\11\ the
Commission is providing notice of the grounds for disapproval under
consideration. The Commission is instituting proceedings to allow for
additional analysis of the proposed rule change's consistency with the
Exchange Act and, in particular, with Section 6(b)(5) of the Exchange
Act, which requires, among other things, that the rules of a national
securities exchange be designed to prevent fraudulent and manipulative
acts and practices, to promote just and equitable principles of trade,
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 not be designed to permit unfair
discrimination between customers, issuers, brokers, or dealers.\12\
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\11\ Id.
\12\ 15 U.S.C. 78f(b)(5).
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The development and enforcement of meaningful corporate governance
exchange listing standards is of substantial importance to financial
markets and the investing public, especially given investor
expectations regarding the nature of companies that have achieved an
exchange listing for their securities and the role of an exchange in
overseeing its market and ensuring compliance with its listing
standards.\13\ The corporate governance standards embodied in exchange
listing standards play an important role in assuring that listed
companies observe good governance practices.\14\
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\13\ See, e.g., Securities Exchange Act Release Nos. 99238 (Dec.
26, 2023), 89 FR 113, 116 n.21 and accompanying text (Jan. 2, 2024)
(SR-NYSE-2023-34) (Notice of Filing of Amendment No. 1 and Order
Granting Accelerated Approval of Proposed Rule Change, as Modified
by Amendment No. 1, Amending Sections 312.03(b) and 312.04 of the
NYSE Listed Company Manual To Modify the Circumstances Under Which a
Listed Company Must Obtain Shareholder Approval of a Sale of
Securities Below the Minimum Price to a Substantial Security Holder
of the Company); 100816 (Aug. 26, 2024), 89 FR 70674, 70677-78
nn.46-48 and accompanying text (Aug. 30, 2024) (SR-NASDAQ-2024-019)
(Order Granting Approval of a Proposed Rule Change, to Rules 5605,
5615 and 5810 To Amend Phase-In Schedules for Certain Corporate
Governance Requirements and Applicability of Certain Cure Periods).
\14\ See id.
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In particular, the Commission has consistently recognized the
importance of the annual shareholder meeting requirement to the
protection of investors and the public interest.\15\ Among other
things, annual shareholder meetings allow the shareholders of a company
the opportunity to elect directors and meet with, and engage,
management to discuss company affairs.\16\ The Commission has
recognized that, in limited circumstances, the exchange requirement to
hold an annual shareholder meeting may not be necessary for certain
issuers of specific types of securities where the holders of such
securities do not directly participate as equity holders or vote in the
annual election of directors or generally on the operations or policies
of the listed company.\17\ However, when approving a prior Exchange
proposal for specific exemptions from the annual shareholder meeting
requirement, which included an exemption for exchange-traded funds
(``ETFs''), the Commission expressly stated that CEFs are still
required to hold annual meetings under Section 302.00.\18\
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\15\ The Commission has stated that the right of shareholders to
vote at an annual meeting is an essential and important one. See,
e.g., Securities Exchange Act Release Nos. 86406 (July 18, 2019), 84
FR 35431, 35432 (July 23, 2019) (SR-NYSE-2019-20) (Order Granting
Approval of a Proposed Rule Change Amending Section 302 of the
Listed Company Manual To Provide Exemptions for the Issuers of
Certain Categories of Securities From the Obligation To Hold Annual
Shareholders' Meetings) (``NYSE Order''); 57268 (Feb. 4, 2008), 73
FR 7614, 7616 (Feb. 8, 2008) (SR-Amex-2006-31) (Order Approving
Proposed Rule Change, as Modified by Amendment Nos. 1, 2, and 3
Thereto, Relating to Annual Shareholder Meeting Requirements)
(``Amex Order'').
\16\ See, e.g., Amex Order at 7614; Securities Exchange Act
Release No. 53578 (Mar. 30, 2006), 71 FR 17532 (Apr. 6, 2006) (SR-
NASD-2005-073) (Order Granting Approval of a Proposed Rule Change
and Amendment Nos. 1 and 2 Thereto and Notice of Filing and Order
Granting Accelerated Approval of Amendment No. 3 Thereto Relating to
Rule 4350(e) To Amend the Annual Shareholder Meeting Requirement).
\17\ See NYSE Order at 35432; Amex Order at 7616. The Commission
has also stated that where an exchange has exempted issuers of
certain categories of securities from the exchange requirement to
hold an annual meeting, such issuers would remain subject to any
applicable state and federal securities laws that relate to annual
meetings and may still be required to hold annual shareholder
meetings in accordance with such state and federal securities laws.
See id. In addition, such issuers would remain subject to state and
federal securities laws that may require other types of shareholder
meetings, such as special meetings of shareholders. See NYSE Order
at 35432. The Commission has also stated that the exemptions apply
only with respect to particular securities, and that if a company
also lists other common stock or voting preferred stock, or their
equivalent, such company must nevertheless hold an annual meeting
for the holders of such securities during each fiscal year. See id.
at 35433.
\18\ See NYSE Order at 35433 n.20. See also infra note 27.
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The Exchange states in support of its current proposal that there
are significant differences between listed CEFs and listed operating
companies that justify also exempting listed CEFs from the Exchange's
annual meeting requirement.\19\ In particular, the Exchange states that
there are significant statutory protections under the 1940 Act provided
to the shareholders of CEFs,\20\
[[Page 82279]]
including requirements with respect to the election of directors by CEF
shareholders,\21\ a requirement that directors who are not ``interested
persons'' \22\ comprise at least 40% of the board,\23\ requirements
that certain specified material matters be approved by a majority of
the directors who are not ``interested persons,'' \24\ and requirements
that certain specified material matters be approved by the
shareholders.\25\ The Exchange states that there are no parallel legal
protections for the shareholders of public operating companies.\26\ The
Exchange also states that all of the categories of investment companies
for which the Exchange has listing standards other than CEFs are
already exempt from the annual shareholder meeting requirement of
Section 302.00 (such exempted investment companies, ``NYSE-Listed
ETFs'').\27\
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\19\ See Notice, supra note 4, at 56447.
\20\ See id. at 56448.
\21\ See id. at 56447.
\22\ The term ``interested person'' is defined in Section
2(a)(19) of the 1940 Act, 15 U.S.C. 80a-2(a)(19).
\23\ See Notice, supra note 4, at 56447.
\24\ See id. at 56447-48.
\25\ See id. at 56448.
\26\ See id.
\27\ See id. When justifying its prior proposal to exempt NYSE-
Listed ETFs from the annual shareholder meeting requirement of
Section 302.00, the Exchange stated, among other things, that the
net asset value (``NAV'') of such products is determined by the
market price of each fund's underlying securities or other reference
asset; and that because shareholders can value their investments in
such products on an ongoing basis, the Exchange believes that there
is less need for such shareholders to engage management at an annual
meeting. See Securities Exchange Act Release No. 85889 (May 17,
2019), 84 FR 23815, 23816 (May 23, 2019) (SR-NYSE-2019-20) (Notice
of Filing of Proposed Rule Change Amending Section 302 of the Listed
Company Manual To Provide Exemptions for the Issuers of Certain
Categories of Securities From the Obligation To Hold Annual
Shareholders' Meetings). See also NYSE Order at 35432.
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The Commission received comments supporting the proposal.\28\ Some
commenters stated that Congress adopted the 1940 Act protections
referenced by NYSE in lieu of an annual shareholder meeting
requirement.\29\ Some commenters agreed with NYSE that 1940 Act
requirements, such as those pertaining to director elections, directors
who are not ``interested persons,'' and matters that require
shareholder vote, protect CEF investors; \30\ and some stated that the
1940 Act requirements rendered NYSE's annual shareholder meeting
requirement ``superfluous.'' \31\ Some commenters also claimed that
certain investors exploit the current annual shareholder meeting
requirement for their own gain--for example, by launching a proxy
campaign to change a CEF's management and/or investment strategy, to
conduct tender offers, or to liquidate the CEF altogether.\32\ These
commenters stated that annual meetings allow a minority investor to
have an outsized influence over the CEF that results in harm to long-
term retail investors in the CEF and disincentivizes the creation of
new listed CEFs.\33\ Some commenters also stated that annual
shareholder meetings are costly to CEFs and that retail investor
engagement at such meetings is limited, and concluded that the burden
of the annual shareholder meeting requirement outweighs any potential
benefits.\34\
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\28\ See, e.g., Letters from Paul G. Cellupica, General Counsel,
and Kevin Ercoline, Assistant General Counsel, Investment Company
Institute, dated July 30, 2024 (``ICI Letter''); Investment Adviser
Association, Securities Industry and Financial Markets Association
(``SIFMA''), SIFMA's Asset Management Group, and Insured Retirement
Institute, dated July 30, 2024 (``SIFMA et al Letter''); Bruce Leto
and Sara Crovitz, Stradley Ronon Stevens & Young, LLP, dated July
30, 2024 (``Stradley Ronon Letter''); Joseph V. Amato, President and
Chief Investment Officer, Equities, Neuberger Berman Group LLC,
dated July 30, 2024 (``Neuberger Berman Letter''); John McCann,
Managing Director, Associate General Counsel, Teachers Insurance and
Annuity Association of America (``TIAA'') and TIAA's asset
management affiliate Nuveen, LLC, dated July 30, 2024 (``TIAA
Letter''); George F. Magera, General Counsel, Federated Hermes,
Inc., dated July 31, 2024 (``Federated Hermes Letter'').
\29\ See, e.g., ICI Letter at 7-9; SIFMA et al Letter at 2-3.
\30\ See, e.g., ICI Letter at 9-13; Letter Type A at <a href="https://www.sec.gov/comments/sr-nyse-2024-35/srnyse202435.htm">https://www.sec.gov/comments/sr-nyse-2024-35/srnyse202435.htm</a>; Federated
Hermes Letter at 1.
\31\ See, e.g., ICI Letter at 1 and 9; SIFMA et al Letter at 2;
Stradley Ronon Letter at 3.
\32\ See, e.g., ICI Letter at 2-3, 17-24; Neuberger Berman
Letter at 1-2; Federated Hermes Letter at 1-2; Stradley Ronon Letter
at 1-2; TIAA Letter at 2.
\33\ See, e.g., ICI Letter at 13-14; Neuberger Berman Letter at
1-2; Federated Hermes Letter at 1-2; Stradley Ronon Letter at 2;
TIAA Letter at 2.
\34\ See, e.g., ICI Letter at 14-15; Federated Hermes Letter at
2; Letter from George W. Morriss, dated July 31, 2024.
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The Commission also received comments opposing the proposal.\35\
Some commenters stated that the 1940 Act requirements referenced by the
Exchange were adopted in addition to the Exchange's pre-existing annual
shareholder meeting requirement, rather than in lieu of it,\36\ and
some stated that the 1940 Act requirements are not a substitute for
annual shareholder meetings.\37\ Some commenters stated that CEFs are
fundamentally different from other registered investment companies,
including NYSE-Listed ETFs.\38\ In particular, commenters stated that
CEFs commonly trade at a discount to NAV,\39\ and claimed that the
inability of CEF investors to redeem shares at NAV makes CEF investors
more vulnerable to actions by CEF management.\40\ Commenters stated
that, in light of these unique features of CEFs, annual meetings are an
important tool to discipline CEF management.\41\ Commenters also stated
that elimination of NYSE's annual shareholder meeting requirement would
harm CEF investors by reducing opportunities for shareholder activism
(or the threat of such activism); \42\ further entrenching CEF
management; \43\ potentially increasing CEFs' discounts to NAV; \44\
and effectively disenfranchising CEF investors due to the infrequency
with which shareholder meetings would be required under the 1940 Act
\45\ and the difficulty for shareholders to requisition special
meetings.\46\ Commenters also described other benefits of annual
shareholder meetings to CEF investors, such as providing
accountability,
[[Page 82280]]
transparency, and a forum for shareholders to voice concerns; \47\ and
expressed concern with the removal of a right (required annual
shareholder meetings) that shareholders may have relied upon when
investing in CEFs.\48\
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\35\ See, e.g., Letters from Paul N. Roth, Founding Partner
Emeritus, Of Counsel, Schulte Roth & Zabel LLP, dated July 30, 2024
(``Schulte Letter''); Michael D'Angelo, Saba Capital Management, LP,
dated July 30, 2024 (``Saba Letter''); Profs. Lucian A. Bebchuk,
Harvard Law School, and Robert J. Jackson, Jr., NYU School of Law,
dated July 30, 2024 (``Bebchuk & Jackson Letter''); Profs. Daniel J.
Taylor, The Wharton School, Edwin Hu, UVA School of Law, Robert
Bishop, Duke School of Law, Bradford Levy, Chicago Booth School of
Business, Shiva Rajgopal, Columbia Business School, and Jonathan
Zytnick, Georgetown University Law Center, on behalf of the Working
Group on Market Efficiency and Investor Protection in Closed-End
Funds, dated July 30, 2024 (``Working Group Letter''); Bryce A.
Doty, Senior Portfolio Manager, Sit Investment Associates, dated
July 29, 2024 (``Sit Letter''); Phillip Goldstein, Managing Partner,
Bulldog Investors, LLP, dated July 30, 2024 (``Bulldog Letter'');
Aaron T. Morris, Partner, Morris Kandinov, dated July 29, 2024
(``Morris Kandinov Letter''); John Y. Park, dated July 29, 2024
(``Park Letter'').
\36\ See, e.g., Schulte Letter at 2; Bulldog Letter at 1-2.
\37\ See, e.g., Morris Kandinov Letter at 2-6; Saba Letter at 8-
9.
\38\ See, e.g., Bebchuk & Jackson Letter at 5-7; Sit Letter at
1-2; Letter from Thomas DeCapo, dated July 29, 2024.
\39\ See, e.g., Working Group Letter at 3; Schulte Letter at 4.
\40\ See, e.g., Bebchuk & Jackson Letter at 5-6; Park Letter;
Letters from 1607 Capital Partners, LLC, dated July 30, 2024 (``1607
Letter''); Jon Fenn, dated July 16, 2024.
\41\ See, e.g., Bebchuk & Jackson Letter at 7-8; Working Group
Letter at 3; Letters from Ronald Mass, Chief Investment Officer,
Almitas Capital, dated July 30, 2024, at 2; Andrew Gadlin, dated
July 30, 2024.
\42\ A commenter stated that the current annual shareholder
meeting mechanism has both a direct effect (e.g., replacing existing
fund directors) and indirect effect (e.g., the fear of potential
replacement gives incumbent CEF directors incentive to avoid
underperformance altogether); and that approval of NYSE's proposal
would produce two types of entrenchment costs from the elimination
of these direct and indirect effects. See Bebchuk & Jackson Letter
at 7-8 and 10-11.
\43\ See, e.g., Working Group Letter at 5.
\44\ See, e.g., Working Group Letter at 6; Saba Letter at 1, 2,
and 7 n.20; Sit Letter at 2.
\45\ See, e.g., Sit Letter at 2-3; Bebchuk & Jackson Letter at
8-9.
\46\ See, e.g., Working Group Letter at 5; Schulte Letter at 6-7
and n.28; Saba Letter at 2.
\47\ See, e.g., 1607 Letter; Letters from Andrew Park on behalf
of the Americans for Financial Reform Education Fund, dated July 30,
2024, at 2-3; Michael Foster, dated July 16, 2024; James Gould,
dated Aug. 6, 2024.
\48\ See, e.g., Schulte Letter at 4; Saba Letter at 2; Bebchuk &
Jackson Letter at 12.
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The Commission has concerns about whether NYSE's proposal to exempt
CEFs listed under Section 102.04A of the Manual from the annual
shareholder meeting requirement set forth in Section 302.00 is designed
to protect investors and the public interest, as required by Section
6(b)(5) of the Exchange Act.\49\ Although the Commission previously
approved a similar exemption for NYSE-Listed ETFs,\50\ there are
important differences between CEFs and ETFs. Shares of CEFs often trade
at prices that are less than, or at a ``discount'' to, the funds' NAV
per share. In contrast, while ETFs may trade at a discount, it is often
to a much lesser degree than CEFs.\51\ Due to these circumstances,
shareholders of CEFs may have an interest in expressing their views at
annual shareholder meetings.
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\49\ 15 U.S.C. 78f(b)(5).
\50\ See NYSE Order, supra note 15.
\51\ See Securities Act Release No. 10695, Investment Company
Act Release No. 33646, S7-15-18 (Sept. 25, 2019), 84 FR 57162, 57165
(Oct. 24, 2019) (Exchange-Traded Funds Final Rule) (``The
combination of the creation and redemption process with secondary
market trading in ETF shares and underlying securities provides
arbitrage opportunities that are designed to help keep the market
price of ETF shares at or close to the NAV per share of the ETF.'').
See also supra note 27.
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Moreover, the Commission has concerns with the sufficiency of the
Exchange's analysis and whether the Exchange has met its burden to
demonstrate that its proposal is consistent with the Exchange Act.\52\
The Exchange states that NYSE-Listed ETFs are already exempt from the
annual shareholder meeting requirement of Section 302.00. However, the
Exchange does not discuss or explain the differences between NYSE-
Listed ETFs and CEFs, which differences, as discussed above, may result
in investor protection concerns for CEF shareholders with respect to
eliminating the right to an annual shareholder meeting that may not be
present for NYSE-Listed ETFs' shareholders. For example, the Exchange
does not discuss whether the fact that CEF shares may trade at a large
discount to NAV would raise any investor protection concerns with
eliminating the annual shareholder meeting requirement. The Exchange
also does not discuss the extent to which CEF investors participate in,
and benefit from, annual shareholder meetings, such that eliminating
the annual shareholder meeting requirement may raise investor
protection concerns. In addition, while the Exchange discusses how
certain requirements set forth in the 1940 Act are designed to protect
CEF investors and the public interest, the Exchange does not discuss
how its specific proposal to exempt CEFs from the Exchange's
longstanding annual shareholder meeting requirement--and any resulting
loss of benefits to CEF investors of annual shareholder meetings--would
be designed to protect CEF investors and the public interest.
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\52\ Under the Commission's Rules of Practice, the ``burden to
demonstrate that a proposed rule change is consistent with the
Exchange Act and the rules and regulations issued thereunder . . .
is on the self-regulatory organization that proposed the rule
change.'' 17 CFR 201.700(b)(3). The description of a proposed rule
change, its purpose and operation, its effect, and a legal analysis
of its consistency with applicable requirements must all be
sufficiently detailed and specific to support an affirmative
Commission finding, and any failure of a self-regulatory
organization to provide this information may result in the
Commission not having a sufficient basis to make an affirmative
finding that a proposed rule change is consistent with the Exchange
Act and the applicable rules and regulations. Id.
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As a result, the Commission believes there are questions as to
whether the proposal is consistent with Section 6(b)(5) of the Exchange
Act \53\ and its requirement, among other things, that the rules of a
national securities exchange be designed to protect investors and the
public interest. For this reason, it is appropriate to institute
proceedings pursuant to Section 19(b)(2)(B) of the Exchange Act \54\ to
determine whether the proposal should be approved or disapproved.
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\53\ 15 U.S.C. 78f(b)(5).
\54\ 15 U.S.C. 78s(b)(2)(B).
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IV. Procedure: Request for Written Comments
The Commission requests that interested persons provide written
submissions of their data, views, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposed rule change
is consistent with Section 6(b)(5) of the Exchange Act \55\ or any
other provision of the Exchange Act, or the rules and regulations
thereunder. Although there do not appear to be any issues relevant to
approval or disapproval that would be facilitated by an oral
presentation of data, views, and arguments, the Commission will
consider, pursuant to Rule 19b-4 under the Exchange Act,\56\ any
request for an opportunity to make an oral presentation.\57\
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\55\ 15 U.S.C. 78f(b)(5).
\56\ 17 CFR 240.19b-4.
\57\ Section 19(b)(2) of the Exchange Act, as amended by the
Securities Acts Amendments of 1975, Public Law 94-29 (June 4, 1975),
grants to the Commission flexibility to determine what type of
proceeding--either oral or notice and opportunity for written
comments--is appropriate for consideration of a particular proposal
by a self-regulatory organization. See Securities Acts Amendments of
1975, Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No.
75, 94th Cong., 1st Sess. 30 (1975).
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Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change should be approved
or disapproved by October 31, 2024. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
November 14, 2024. The Commission asks that commenters address the
sufficiency of the Exchange's statements in support of the proposal, in
addition to any other comments they may wish to submit about the
proposed rule change. 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#7200071e175f111d1f1f171c0601320117115c151d04"><span class="__cf_email__" data-cfemail="681a1d040d450b0705050d061c1b281b0d0b460f071e">[email protected]</span></a>. Please include
file number SR-NYSE-2024-35 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-2024-35. 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
[[Page 82281]]
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-2024-35 and should be submitted on or before October 31, 2024.
Rebuttal comments should be submitted by November 14, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\58\
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\58\ 17 CFR 200.30-3(a)(57).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-23417 Filed 10-9-24; 8:45 am]
BILLING CODE 8011-01-P
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