Notice2024-29334
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Amendment No. 1 and Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. 1, To Amend Section 102.01 of the NYSE Listed Company Manual To Provide That the Stockholder Requirements Set Forth Therein Will Be Calculated on a Worldwide Basis When Listing a Company From Outside North America That Is Listing in Connection With Its Initial Public Offering and Is Not Listed on Any Other Regulated Stock 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 13, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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[Federal Register Volume 89, Number 240 (Friday, December 13, 2024)]
[Notices]
[Pages 101064-101069]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-29334]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101844; File No. SR-NYSE-2024-47]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Amendment No. 1 and Order Instituting Proceedings
To Determine Whether To Approve or Disapprove a Proposed Rule Change,
as Modified by Amendment No. 1, To Amend Section 102.01 of the NYSE
Listed Company Manual To Provide That the Stockholder Requirements Set
Forth Therein Will Be Calculated on a Worldwide Basis When Listing a
Company From Outside North America That Is Listing in Connection With
Its Initial Public Offering and Is Not Listed on Any Other Regulated
Stock Exchange
December 9, 2024.
On August 22, 2024, 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 102.01 of the
NYSE Listed Company Manual (``Manual'') to provide that the
distribution standard therein would be calculated on a worldwide basis.
The proposed rule change was published for comment in the Federal
Register on September 10, 2024.\3\ The Commission has received no
comment letters on the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 100918 (September 4,
2024), 89 FR 73463 (September 10, 2024) (SR-NYSE-2024-47)
(``Notice'').
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On October 22, 2024, pursuant to Section 19(b)(2) of the Exchange
Act,\4\ 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
[[Page 101065]]
disapprove the proposed rule change.\5\ On November 18, 2024, the
Exchange filed Amendment No. 1 to the proposed rule change as described
in Items I and II below, which Items have been prepared by the
Exchange. Amendment No. 1 amended and replaced the proposed rule change
as originally filed and superseded such filing in its entirety. The
Commission is publishing this notice and order to solicit comments on
the proposed rule change, as modified by Amendment No. 1, from
interested persons and to institute proceedings under Section
19(b)(2)(B) of the Exchange Act \6\ to determine whether to approve or
disapprove the proposed rule change, as modified by Amendment No. 1.
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\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 101402, 89 FR 85574
(Oct. 18, 2024). The Commission designated December 9, 2024, as the
date by which the Commission shall approve or disapprove, or
institute proceedings to determine whether to disapprove, the
proposed rule change.
\6\ 15 U.S.C. 78s(b)(2)(B).
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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 standards therein will
be calculated on a worldwide basis when listing a company from outside
North America and such company (i) is listing in connection with its
initial public offering, and (ii) is not listed on any other regulated
stock exchange. This Amendment No. 1 supersedes the original filing in
its entirety. The changes to the original filing made in Amendment No.
1 are described in the Purpose section below. 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 NYSE previously submitted a rule filing proposing to amend
Section 102.01B to provide that the distribution standards in Section
102.01A will be calculated on a worldwide basis when listing a company
on the Exchange.\7\ The proposed rule change was published for comment
in the Federal Register on September 10, 2024.\8\ This Amendment No. 1
supersedes the original filing in its entirety.
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\7\ See SR-NYSE-2024-47 (August 22, 2024).
\8\ See Securities Exchange Act Release No. 100918 (September 4,
2024), 89 FR 73463 (September 10, 2024) (SR-NYSE-2024-47).
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Amendment No. 1 modifies the original proposal by providing that
the proposed amendment to Section 102.01B would solely provide that the
stockholder requirements set forth in Section 102.01A will be
calculated on a worldwide basis when listing a company from outside
North America and such company (i) is listing in connection with its
initial public offering and, (ii) is not listed on any other regulated
stock exchange. In addition, Amendment No. 1 proposes to amend Section
102.01B to clarify that the discretion to include stockholders and
trading volume from a company's home country or primary trading market
outside North America in applying the applicable requirements of
Section 102.01A is applicable only when the applicant issuer is listed
on another regulated stock exchange. This Amendment No. 1 supersedes
the original filing in its entirety.
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
stockholders 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 from
outside North America when such company is listing in connection with
its initial public offering and is not listed on any other regulated
stock exchange, the Exchange will include all holders on a global basis
in applying the minimum stockholder requirements of Section 102.01A.
The Exchange notes that the trading volume provisions of Section
102.01A are not relevant to the listing of a company from outside North
America when such company is listing in connection with its initial
public offering and is not listed on any other regulated stock
exchange, as the trading volume requirements are only applicable in the
case of a quotation listing or transfer or upon exchange of a common
equity security for a listed Equity Investment Tracking Stock and not
in the case of an initial public offering. In addition, the Exchange
proposes to amend the existing text of Section 102.01B to clarify that
the discretion to include stockholders and trading volume from a
company's home country or primary trading market outside North America
in applying the applicable requirements of Section 102.01A is
applicable only when the applicant issuer is listed on another
regulated stock exchange.
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
[[Page 101066]]
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 the text of Nasdaq's distribution requirements (as set
forth in Nasdaq Stock Market Rule 5315(f)) do not include the type of
restriction to North America set forth in Section 102.01. 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 companies from
outside North America that are listing in connection with an initial
public offering and are not listed on any other regulated stock
exchange.
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 that enable investors who hold securities in
brokerage accounts in countries outside North America to trade in the
U.S. listing 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. The Exchange
notes that this is particularly relevant to the listing of a foreign
company listed on the NYSE when it does not have an exchange listing in
its home market, as the NYSE will be the only exchange trading market
for such companies and any investor wishing to trade in such company's
securities in a regulated exchange market will have to do so on the
NYSE.
The Exchange notes that a large majority of the companies from
outside North America that list on the NYSE do so in the form of
American Depositary Receipts (``ADRs''). Section 102.01B currently
includes a statement that, for securities that trade in the format of
ADRs, volume in the ordinary shares will be adjusted to be on an ADR-
equivalent basis. It has also long been the practice of the Exchange to
adopt this same approach to include holders of ordinary shares on an
ADR-equivalent basis in calculating the compliance of companies with
the stockholder requirements of Section 102.01A. The Exchange intends
to continue that practice in applying the proposed amended form of
Section 102.01B. The Exchange believes that this approach is
appropriate in light of the speed and ease with which shares can be
deposited into an ADR facility to create new ADRs (and withdrawn from
such ADR facility), which makes an issuer's ordinary shares essentially
fungible with its ADRs for trading purposes. The Exchange notes that
the fact that some investors may hold shares directly rather than in
the form of ADRs is especially unlikely to reduce liquidity in the ADR
market on the NYSE in cases where there is no regulated exchange market
in the company's home jurisdiction to compete for liquidity and trading
volume.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\9\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\10\ 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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\9\ 15 U.S.C. 78f(b).
\10\ 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 stockholders outside of North America for purposes of
initial listing requirements with respect to the listing of companies
from outside North America when such companies are listing in
connection with an initial public offering and are not listed on any
other regulated stock exchange. 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 that enable investors who hold
securities in brokerage accounts in countries outside North America to
trade in the U.S. listing markets. Given the ease of transfer of
securities between different countries in the contemporary securities
markets, there is no reason why, in the case of a company from outside
North America that lists on the NYSE in connection with an initial
public offering and that does not have any other regulated exchange
market, the holders of such 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 stockholders
and trading activity by stockholders located outside North America in
the development of a liquid trading market in the United States in the
securities of non-U.S. listed companies that do not have any regulated
exchange market other than the NYSE.
The Exchange believes it is appropriate to limit its proposed
amendment to companies from outside North America listing in connection
with an initial public offering that do not have any other regulated
listing market other than the NYSE, as the absence of any alternative
regulated exchange market for investors in those companies ensures that
trading liquidity in their securities is concentrated on the NYSE
market. The current rule does not allow the Exchange to include
stockholders outside of North America in determining compliance with
the stockholder distribution requirements of Section 102.01A by a
company from outside North America that does not have a regulated
listing exchange market outside North America, which makes it more
difficult for those companies to meet the distribution requirements. By
contrast, the current rule text already provides a more flexible
approach to meeting the stockholder distribution requirements for
companies that have a regulated listing exchange in their home markets,
so the difficulty in meeting the current requirements addressed by this
proposal is specific to companies where
[[Page 101067]]
the NYSE is the company's sole regulated exchange market. Consequently,
the Exchange believes it is not discriminatory to limit the scope of
the current proposal to companies from outside North America that do
not have another regulated exchange market, as the current rule already
provides a means for those companies from outside North America that do
have another regulated exchange market to include stockholders outside
North America when meeting the stockholder distribution requirements.
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.\11\
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\11\ 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 companies outside North America that are not
listed on any other regulated stock exchange. The proposal ensures that
the Exchange's treatment of stockholders outside North America for
purposes of its stockholder requirements will be substantively the same
as Nasdaq's treatment of comparable issuers.
The Exchange believes it is appropriate to limit its proposed
amendment to companies from outside North America listing in connection
with an initial public offering that do not have any other regulated
listing market other than the NYSE, as the absence of any alternative
regulated exchange market for investors in those companies ensures that
trading liquidity in their securities is concentrated on the NYSE
market. The current rule does not allow the Exchange to include
stockholders outside of North America in determining compliance with
the stockholder distribution requirements of Section 102.01A by a
company from outside North America that does not have a regulated
listing exchange market outside North America, which makes it more
difficult for those companies to meet the distribution requirements. By
contrast, the current rule text already provides a more flexible
approach to meeting the stockholder distribution requirements for
companies that have a regulated listing exchange in their home markets,
so the difficulty in meeting the current requirements addressed by this
proposal is specific to companies where the NYSE is the company's sole
regulated exchange market. Consequently, the Exchange does not believe
that the proposed rule change imposes a burden on intra-market
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. Proceedings To Determine Whether To Approve or Disapprove SR-NYSE-
2024-47, as Modified by Amendment No. 1, and Grounds for Disapproval
Under Consideration
The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Exchange Act \12\ to determine whether the proposed
rule change, as modified by Amendment No. 1, 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,
as discussed below. 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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\12\ 15 U.S.C. 78s(b)(2)(B).
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Pursuant to Section 19(b)(2)(B) of the Exchange Act,\13\ 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.\14\
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\13\ Id.
\14\ 15 U.S.C. 78f(b)(5).
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The development and enforcement of meaningful exchange listing
standards is of critical importance to financial markets and the
investing public. Among other things, such listing standards help
ensure that exchange-listed companies will have sufficient public
float, investor base, and trading interest to provide the depth and
liquidity to promote fair and orderly markets. Meaningful listing
standards also are important given investor expectations regarding the
nature of securities that have achieved an exchange listing, and the
role of an exchange in overseeing its market and assuring compliance
with its listing standards.\15\
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\15\ See, e.g., Securities Exchange Act Release Nos. 88716 (Apr.
21, 2020), 85 FR 23393 (Apr. 27, 2020) (SR-NASDAQ-2020-001) (Order
Approving a Proposed Rule Change To Modify the Delisting Process for
Securities With a Bid Price at or Below $0.10 and for Securities
That Have Had One or More Reverse Stock Splits With a Cumulative
Ratio of 250 Shares or More to One Over the Prior Two-Year Period);
88389 (Mar. 16, 2020), 85 FR 16163 (Mar. 20, 2020) (SR-NASDAQ-2019-
089) (Notice of Filing of Amendment No. 1 and Order Granting
Accelerated Approval of a Proposed Rule Change, as Modified by
Amendment No. 1, To Amend Rule 5815 To Preclude Stay During Hearing
Panel Review of Staff Delisting Determinations in Certain
Circumstances). See also Securities Exchange Act Release No. 81856
(Oct. 11, 2017), 82 FR 48296, 48298 (Oct. 17, 2017) (SR-NYSE-2017-
31) (Notice of Filing of Amendment No. 1 and Order Granting
Accelerated Approval of a Proposed Rule Change, as Modified by
Amendment No. 1, To Amend the Listed Company Manual To Adopt Initial
and Continued Listing Standards for Subscription Receipts).
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As discussed above, Section 102.01A of the Manual sets forth the
Exchange's distribution criteria for issuers seeking to list under the
Exchange's initial listing standards for the common equity securities
of domestic companies.\16\ The Exchange also lists applicants that are
foreign private issuers \17\ under Section 102.01 of the Manual where
such applicants are qualified to list thereunder.\18\
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\16\ A company seeking to list under the Exchange's domestic
company equity listing standards would be required to meet
additional minimum initial listing requirements, including minimum
aggregate market value of publicly-held shares, minimum closing
price (or offering price) per share, and minimum financial standards
as set forth in Section 102.01 of the Manual.
\17\ ``Foreign private issuer'' and ``non-U.S. company'' have
the same meaning and are defined in accordance with the Commission's
definition of foreign private issuer set out in Rule 3b-4(c) of the
Exchange Act. See Section 103.00 of the Manual.
\18\ See Section 101.01 of the Manual. If a foreign private
issuer applicant does not meet all of the requirements for the
listing of common equity securities applicable to domestic issuers
under Section 102.01 of the Manual, the Exchange will consider
whether the applicant qualifies for listing under the quantitative
listing standards for the listing of equity securities of non-U.S.
companies set forth in Section 103.01 of the Manual. See id.
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Pursuant to Section 102.01A of the Manual, an issuer (other than a
company listing in connection with a transfer or quotation or upon
exchange of a common equity security for a listed
[[Page 101068]]
Equity Investment Tracking Stock \19\) wishing to list an equity
security must have, among other things, at least 400 holders \20\ of
100 shares or more (or of a unit of trading if less than 100 shares)
and a minimum of 1,100,000 publicly held shares.\21\ Section 102.01B of
the Manual includes an explanation of how the distribution criteria set
forth in Section 102.01A of the Manual are applied. Among other things,
Section 102.01B of the Manual currently provides that when listing a
company from outside North America (i.e., Canada, Mexico or the United
States), the Exchange may, in its discretion, consider holders and
trading volume in the company's home country or primary trading market
outside the United States in applying the applicable distribution
listing standards under Section 102.01A of the Manual, provided that
such market is a regulated stock exchange. Section 102.01B of the
Manual further specifies that, in exercising this discretion, the
Exchange will consider all relevant factors including: (i) whether the
information is derived from a reliable source, preferably either a
government-regulated securities market or a transfer agent that is
subject to governmental regulation; (ii) whether there exist 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.\22\
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\19\ An ``Equity Investment Tracking Stock'' is defined in
Section 102.07 of the Manual. The initial listing requirements
relating to a company listing in connection with a transfer or
quotation or upon exchange of a common equity security for a listed
Equity Investment Tracking Stock remain unchanged by the Exchange's
proposed rule change because such companies would not be listing in
connection with an initial public offering. See supra Section II.A.
\20\ The number of beneficial holders of stock held in the name
of Exchange member organizations will be considered in addition to
holders of record. The Exchange will make any necessary check of
such holdings. See Section 102.01A(A) of the Manual.
\21\ If the unit of trading is less than 100 shares, the
requirements relating to number of publicly-held shares shall be
reduced proportionately. Shares held by directors, officers, or
their immediate families and other concentrated holdings of 10
percent or more are excluded in calculating the number of publicly-
held shares. See Section 102.01A(B) of the Manual.
\22\ Section 102.01B of the Manual provides that, when
considering a listing application from a company organized under the
laws of 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. The
Exchange does not propose to amend this provision.
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The Exchange proposes to amend its domestic company equity listing
standards as set forth in Section 102.01B to provide that when listing
a company from outside North America that is listing in connection with
its initial public offering and is not listed on another regulated
stock exchange, the Exchange will include all holders on a global basis
in applying the minimum stockholder requirements set forth in Section
102.01A. In connection with this proposed change, the Exchange also
proposes to amend Section 102.01B to add language to clarify that the
current rule text describing how the distribution criteria set forth in
Section 102.01A are applied to companies from outside North America
would apply when listing a company from outside North America that is
already listed on another regulated stock exchange.\23\
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\23\ Section 102.01B of the Manual provides that for securities
that trade in the form of ADRs, volume in the ordinary shares will
be adjusted to be on an ADR-equivalent basis. The Exchange
represents that it has also long been the practice of the Exchange
to adopt this same approach to include holders of ordinary shares on
an ADR-equivalent basis in calculating the compliance of companies
with the stockholder requirements of Section 102.01A and that the
Exchange intends to continue that practice in applying the proposed
amended form of Section 102.01B.
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The Commission has concerns about whether the Exchange's proposal
is designed to protect investors and the public interest, as required
by Section 6(b)(5) of the Exchange Act. The Exchange's proposal would
loosen the application of the minimum stockholder requirements for the
initial listing of companies from outside North America that are
listing in connection with an initial public offering and are not
listed on another regulated stock exchange, where these companies are
listing pursuant to the listing standards applicable to domestic
companies' equity securities. The Commission has concerns about whether
such companies, if they qualify for initial listing based on
distribution criteria that includes a significant number of holders
located outside of the United States, would have sufficient public
float, investor base, and trading interest to provide the depth and
liquidity to promote fair and orderly markets on the Exchange.
The Exchange states that the current rule ``do[es] not reflect the
speed and reliability of links that enable investors who hold
securities in brokerage accounts in countries outside North America to
trade in the U.S. listing markets.'' The Exchange further states that
``[g]iven the ease of transfer of securities between 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.''
However, the Exchange does not clearly explain or provide evidence as
to what efficient mechanisms exist for the transfer of securities held
in brokerage accounts outside of North America and whether and how
securities held in such brokerage accounts would contribute to the
depth and liquidity of the domestic market for a company's shares.
As a result, the Commission believes there are questions as to
whether the proposal, as modified by Amendment No. 1, is consistent
with Section 6(b)(5) of the Exchange Act \24\ 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 \25\ to determine whether the proposal,
as modified by Amendment No. 1, should be approved or disapproved.
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\24\ 15 U.S.C. 78f(b)(5).
\25\ 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, as modified by Amendment No. 1. 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 \26\ 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,\27\ any request for an opportunity to make an oral
presentation.\28\
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\26\ 15 U.S.C. 78f(b)(5).
\27\ 17 CFR 240.19b-4.
\28\ 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
[[Page 101069]]
proposed rule change, as modified by Amendment No. 1, should be
approved or disapproved by January 3, 2025. Any person who wishes to
file a rebuttal to any other person's submission must file that
rebuttal by January 17, 2025. 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#d9abacb5bcf4bab6b4b4bcb7adaa99aabcbaf7beb6af"><span class="__cf_email__" data-cfemail="3143445d541c525e5c5c545f4542714254521f565e47">[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 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 January 3, 2025. Rebuttal comments should be
submitted by January 17, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
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\29\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(57).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-29334 Filed 12-12-24; 8:45 am]
BILLING CODE 8011-01-P
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