Notice2024-29149
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Section 902.02 of the NYSE Listed Company Manual To Establish a Flat Annual Listing Fee Payable by a Limited Partnership That Is At Least 40% Owned by Another Company Listed on the Exchange
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, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 89 Issue 239 (Thursday, December 12, 2024)</title>
</head>
<body><pre>
[Federal Register Volume 89, Number 239 (Thursday, December 12, 2024)]
[Notices]
[Pages 100587-100589]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-29149]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101837; File No. SR-NYSE-2024-70]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Section 902.02 of the NYSE Listed Company Manual To Establish a
Flat Annual Listing Fee Payable by a Limited Partnership That Is At
Least 40% Owned by Another Company Listed on the Exchange
December 6, 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 November 26, 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Section 902.02 of the NYSE Listed
Company Manual (the ``Manual') to establish a flat annual listing fee
payable by a limited partnership that is at least 40% owned by another
company listed on the Exchange. 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
The Exchange proposes to amend Section 902.02 of the Manual to
establish the flat annual listing fee payable by a limited partnership
that is at least 40% owned by another company listed on the Exchange
(such limited partnership, an ``Affiliated Limited Partnership''). The
proposed changes will take effect from the beginning of the calendar
year commencing on January 1, 2025.
All companies listed on the Exchange are obligated to pay annual
listing fees. The annual fee for operating companies and limited
partnerships is calculated on a per-share basis based on the number of
shares issued and outstanding, subject to a minimum and maximum fee.
Many limited partnerships listed on the Exchange are affiliated
with another company listed on the Exchange.\4\ For example, the
general partner of a listed limited partnership may be a wholly-owned
subsidiary of a separate listed company. Similarly, a listed company
may have a substantial ownership interest in the outstanding equity
securities of a separate listed limited partnership. In such instances,
there is generally overlap between the listed company and limited
partnership in terms of managing personnel. Therefore, the Exchange
experiences efficiencies in communicating with the issuers and
servicing the two listings. However, under the Exchange's current fee
schedule, the listed company and affiliated listed limited partnership
are each separately subject to the full annual fee schedule as if they
were unaffiliated issuers.
---------------------------------------------------------------------------
\4\ Where such affiliation exists, generally it is between a
listed limited partnership and a listed operating company. In some
instances, however, the affiliation is between two listed limited
partnerships.
---------------------------------------------------------------------------
To address the cost savings that is experienced from servicing two
affiliated listings, the Exchange proposes to amend Section 902.02 of
the Manual to specify that where at least 40% of the outstanding equity
interest in a listed limited partnership is owned, either directly or
indirectly, by a separate listed company, the annual fee for the
primary class of common shares listed by such affiliated limited
partnership will be set at the minimum annual fee for a primary class
of common shares in effect at that time, as such minimum annual fee is
specified in Section 902.03 of the Manual.\5\ Similarly, the annual fee
for any additional class of common shares listed by an affiliated
limited partnership will be set at the minimum annual fee for an
additional class of common shares in effect at that time, as such
minimum fee is specified in Section 902.03 of the Manual.\6\ The
aforementioned annual fee for a primary or additional class of common
shares listed by an Affiliated Limited Partnership shall be referred to
as the ``Affiliated Limited Partnership Annual Fee.'' The annual fee
schedule applicable to the listed company that owns the equity interest
in the affiliated listed limited partnership will remain unchanged.
---------------------------------------------------------------------------
\5\ Currently, such minimum fee is $80,000.
\6\ Currently, such minimum fee is $20,000. In the Exchange's
experience, generally a limited partnership lists only one class of
common shares.
---------------------------------------------------------------------------
In order to qualify for the Affiliated Limited Partnership Annual
Fee in any calendar year, the Exchange proposes that an issuer, other
than a new listing, must submit satisfactory proof to the Exchange no
later than the first trading day of such calendar year to demonstrate
that it meets the ownership requirements specified above. In addition,
the Exchange proposes that the Affiliated Limited Partnership Annual
Fee will be applied to the annual fees payable with respect to the
first partial year of listing by any newly-listed company that is able
to demonstrate at the time of listing that it qualifies as an
Affiliated Limited Partnership of a listed company.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with
[[Page 100588]]
Section 6(b) of the Act,\7\ in general, and furthers the objectives of
Section 6(b)(4) \8\ 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,\9\ 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.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4).
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that it is not unfairly discriminatory and
represents an equitable allocation of reasonable fees to amend Sections
902.02 to establish a fixed annual fee for Affiliated Limited
Partnerships.
The Proposed Changes Are Reasonable
The Exchange believes that the proposed changes to the annual fee
for Affiliated Limited Partnerships is reasonable. In that regard, the
Exchange notes that when a listed company owns a substantial equity
stake in a listed limited partnership there are typically efficiencies
experienced by the Exchange in terms of overlapping management and
board members. The Exchange notes that the proposed change will be fee-
neutral for some issuers (i.e., those that already pay only the minimum
annual fee) and will result in an annual fee reduction for other
issuers (i.e., those whose annual fee is higher than the minimum fee
under the current fee structure). However, because the Exchange
experiences similar costs savings as a result of efficiencies in
servicing the listing of affiliated limited partnerships, it believes
it is reasonable to establish a set annual fee (equal to the minimum
annual fee for a primary or additional class of equity securities then
in effect) for the Affiliated Limited Partnership.
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,\10\ 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.'' \11\
---------------------------------------------------------------------------
\10\ Securities Exchange Act Release No. 34-51808 (June 9,
2005); 70 FR 37496 (June 29, 2005) (``Regulation NMS'').
\11\ See Regulation NMS, 70 FR at 37499.
---------------------------------------------------------------------------
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
Affiliated Limited Partnership Annual Fee will enable the Exchange to
more effectively compete for limited partnership listings.
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 adoption of the Affiliated
Limited Partnership Annual Fee is equitable because it better reflects
the costs the Exchange incurs in servicing the listing of an Affiliated
Limited Partnership. As discussed above, the Exchange experiences
efficiencies in servicing the listing of an Affiliate Limited
Partnership in the form of streamlined communication with management
that it does not similarly experience with unaffiliated companies. The
Exchange therefore believes it is equitable to establish the Affiliated
Limited Partnership Annual Fee to reflect these efficiencies.
The Proposal Is Not Unfairly Discriminatory
The Exchange believes that the proposal is not unfairly
discriminatory. The proposed fee changes are not unfairly
discriminatory among issuers because it simply reflects the cost
savings experienced by a particular category of issuers in which
another listed company has a substantial ownership interest. 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.
[[Page 100589]]
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
Pursuant to Section 19(b)(3)(A)(ii) of the Act,\12\ and Rule 19b-
4(f)(2) thereunder \13\ the Exchange has designated this proposal as
establishing or changing a due, fee, or other charge imposed on any
person, whether or not the person is a member of the self-regulatory
organization, which renders the proposed rule change effective upon
filing. At any time within 60 days of the filing of the 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.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A)(ii).
\13\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
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#cebcbba2abe3ada1a3a3aba0babd8ebdabade0a9a1b8"><span class="__cf_email__" data-cfemail="93e1e6fff6bef0fcfefef6fde7e0d3e0f6f0bdf4fce5">[email protected]</span></a>. Please include
file number SR-NYSE-2024-70 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-2024-70. 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-2024-70 and should be
submitted on or before January 2, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------
\14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-29149 Filed 12-11-24; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on December 12, 2024.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.