Notice2024-30686
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Sections 902.02, 902.03 and 902.08 of the NYSE Listed Company Manual To Amend Initial Listing Fees and Certain of Its Annual Fees Applicable to Listed Issuers and Establish a Maximum Fee for Debt Securities and Structured Products
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 26, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 247 (Thursday, December 26, 2024)</title>
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[Federal Register Volume 89, Number 247 (Thursday, December 26, 2024)]
[Notices]
[Pages 105157-105160]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-30686]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101966; File No. SR-NYSE-2024-78]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Sections 902.02, 902.03 and 902.08 of the NYSE Listed Company
Manual To Amend Initial Listing Fees and Certain of Its Annual Fees
Applicable to Listed Issuers and Establish a Maximum Fee for Debt
Securities and Structured Products
December 18, 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 December 5, 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 Sections 902.02, 902.03 and 902.08
of the NYSE Listed Company Manual (the ``Manual') to (i) amend its
initial listing fee and certain of its annual fees charged to listed
issuers, and (ii) establish a maximum fee payable in a calendar year
for debt securities and structured products listed on the NYSE Bonds
platform. 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 its initial listing fee and certain
of its annual fees charged to listed issuers as set forth in Sections
902.02 and 902.03 of the Manual. The proposed changes will take effect
from the beginning of the calendar year commencing on January 1, 2025.
The Exchange currently charges a flat initial listing fee of
$300,000 the first time an issuer lists a class of common shares on the
Exchange. The Exchange proposes to increase this flat initial listing
fee by $25,000 from $300,000 to $325,000. Section 902.03 of the Manual
contains examples of how listing fees are calculated for certain
UPREITs, U.S. issuers and foreign private issuers. The Exchange
proposes to make conforming changes to these examples in Section 902.03
to reflect the new $325,000 flat initial listing fee.
The Exchange currently charges an annual fee of $0.001265 per share
for each of the following: a primary class of common shares (including
Equity Investment Tracking Stocks); each additional class of common
shares (including tracking stock); a primary class of preferred stock
(if no class of common shares is listed); each additional class of
preferred stock (whether primary class is common or preferred shares);
and each class of warrants or rights. The Exchange proposes to change
the per share annual fee for the foregoing classes of securities from
$0.001265 per share to $0.001285 per share.
[[Page 105158]]
The annual fee for a primary class of common shares (including
Equity Investment Tracking Stocks) and a primary class of preferred
stock (if no class of common shares is listed) is currently subject to
a minimum fee of $80,000 per year. The Exchange proposes to increase
the minimum fee for such securities from $80,000 per year to $82,000
per year.
The proposed increase in (i) the initial listing fee, (ii) the per
share rates for annual fees, and (iii) the minimum annual fee for a
primary class of equity or preferred stock reflects increases in the
costs the Exchange incurs in providing services to listed companies on
an ongoing basis, as well as increases in the costs of conducting its
related regulatory activities. As described below, the Exchange
proposes to make the aforementioned fee increases to better reflect the
Exchange's costs related to listing equity securities and the
corresponding value of such listing to companies.
The revised annual fees will be applied in the same manner to all
issuers with listed securities in the affected categories and the
Exchange believes that the changes will not disproportionately affect
any specific category of issuers.
The Exchange currently charges a flat $25,000 initial listing fee
for (i) all securities that list under the debt standard in Section
703.19 of the Manual and trade on NYSE Bonds, and (ii) all debt
securities that list under Sections 102.03 and 103.05 of the Manual and
trade on NYSE Bonds (such securities described in items (i) and (ii),
collectively, ``NYSE Bonds Securities''). The Exchange charges annual
fees for NYSE Bonds Securities on a tiered basis (from $25,000 to
$100,000) according to the number of such securities listed and traded
on the NYSE Bonds platform.\4\ The Exchange now proposes to adopt an
overall cap of $100,000 on the initial and annual fees that may be paid
by an issuer of NYSE Bonds Securities in any calendar year. The
Exchange notes that issuers will frequently issue NYSE Bonds Securities
from various wholly-owned financing subsidiaries. Therefore, for
purposes of calculating the fee cap, the Exchange will aggregate
listing fees for NYSE Bonds Securities of an issuer and its wholly-
owned subsidiaries.\5\
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\4\ The fee schedule contained in Section 902.08 of the Manual
applies only to NYSE Bonds Securities that trade on the NYSE Bonds
platform. Securities that list under the equity standards of Section
703.19 are subject to the fee schedule contained in Section 902.05
of the Manual.
\5\ The Exchange will determine that an issuer is a wholly-owned
subsidiary of an affiliated issuer based on the offering documents
for the applicable bond issuance.
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The Exchange notes that companies frequently issue several series
of NYSE Bonds Securities at the same time. For example, as part of a
single offering, a company may issue debt securities of different
series with varying maturities (ex. 5-year, 10-year, 20-year or 30-
year). In the Exchange's experience, there are efficiencies in (i)
qualifying for listing multiple series of NYSE Bonds Securities of the
same issuer, and (ii) servicing such listings on an ongoing basis.
Because of these efficiencies, the Exchange believes it is appropriate
to establish a maximum fee of $100,000 payable by an issuer of NYSE
Bonds Securities in any calendar year.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\6\ in general, and furthers the
objectives of Section 6(b)(4) \7\ 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,\8\ in that
it is designed to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest
and is not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(4).
\8\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that it is not unfairly discriminatory and
represents an equitable allocation of reasonable fees to amend Sections
902.02 and 902.03 to (i) increase the initial listing fee and annual
fees for the various categories of equity securities, and (ii) increase
the minimum annual fee for a primary class of common equity or
preferred stock because of the increased costs incurred by the Exchange
since it established the current rates. The Exchange believes that it
is not unfairly discriminatory and represents an equitable allocation
of reasonable fees to amend Sections 902.08 to establish a maximum fee
cap payable in any calendar year by an issuer of NYSE Bonds Securities
because the Exchange experiences efficiencies is qualifying and
servicing the listing of multiple series of bonds of the same issuer
(or a wholly-owned subsidiary of such issuer). Currently, there are
more than 170 issuers of NYSE Bonds Securities and the substantial
majority of those issuers will not see their fees change as a result of
the proposed maximum fee cap. No issuer will see an increase in its
listing fees for NYSE Bonds Securities.
The Proposed Changes Are Reasonable
The Exchange believes that the proposed changes to its initial
listing fee and the annual fee schedule (including the minimum fee) are
reasonable. In that regard, the Exchange notes that its general costs
to support its listed companies have increased, including due to price
inflation. The Exchange also continues to expand and improve the
services it provides to listed companies. Specifically, the Exchange
has (among other things) increased expenditure on listed companies and
the value of an NYSE listing by increasing programming for listed
companies and enhancing its conference space which can be utilized by
listed companies.
The Exchange believes that it is reasonable to establish a maximum
fee cap payable in any calendar year by an issuer of NYSE Bonds
Securities because there are efficiencies in listing multiple series of
bonds of the same issuer (or a wholly-owned subsidiary of such issuer).
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,\9\ 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.'' \10\
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\9\ Securities Exchange Act Release No. 34-51808 (June 9, 2005);
70 FR 37496 (June 29, 2005) (``Regulation NMS'').
\10\ See Regulation NMS, 70 FR 37499.
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The Exchange believes that the ever-shifting market share among the
exchanges with respect to new listings and the transfer of existing
listings between competitor exchanges demonstrates that issuers can
choose different listing markets in response to
[[Page 105159]]
fee changes. Accordingly, competitive forces constrain exchange listing
fees. Stated otherwise, changes to exchange listing fees can have a
direct effect on the ability of an exchange to compete for new listings
and retain existing listings.
Given this competitive environment, the adoption of the proposed
increase to the initial listing fee and annual fees for various
categories of equity securities represents a reasonable attempt to
address the Exchange's increased costs in servicing these listings
while continuing to attract and retain listings. The establishment of a
maximum fee cap payable in a calendar year by issuers of NYSE Bonds
Securities represents a reasonable attempt to accurately reflect the
Exchange's costs in listing and servicing such securities.
The Exchange proposes to make the aforementioned fee increases in
Sections 902.02, 902.03 and 903.08 to better reflect the value of such
listing to issuers.
The Proposal Is an Equitable Allocation of Fees
The Exchange believes its proposal equitably allocates its fees
among its market participants.
The Exchange believes that the proposed amendments to the initial
listing fee and annual fees for equity securities are equitable because
they do not change the existing framework for such fees, but simply
increase the amount of the flat initial listing fee, minimum annual
fee, and per unit annual fee to reflect increased operating costs.
Similarly, as the fee structure remains effectively unchanged apart
from the proposed increases in the rates paid by all issuers, the
changes to the initial listing fee or annual fees for equity securities
neither target nor will they have a disparate impact on any particular
category of issuer.
The Exchange believes that the proposed maximum fee cap for issuers
of NYSE Bonds Securities is equitable because the work required to list
a bond does not increase on a proportional basis for each additional
series of bonds that are listed on the Exchange. There are efficiencies
in listing multiple series of bonds and the Exchange believes that its
proposed fee cap is an equitable reflection of such 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 of operating company equity securities
because the same fee schedule will apply to all such issuers and the
proposed fee cap will be available to all issuers. Further, the
Exchange operates in a competitive environment and its fees are
constrained by competition in the marketplace. Other venues currently
list all of the categories of securities covered by the proposed fees
and if a company believes that the Exchange's fees are unreasonable it
can decide either not to list its securities or to list them on an
alternative venue.
For the foregoing reasons, the Exchange believes that the proposal
is consistent with the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change is
designed to ensure that the fees charged by the Exchange accurately
reflect the services provided and benefits realized by listed
companies. The market for listing services is extremely competitive.
Each listing exchange has a different fee schedule that applies to
issuers seeking to list securities on its exchange. Issuers have the
option to list their securities on these alternative venues based on
the fees charged and the value provided by each listing. Because
issuers have a choice to list their securities on a different national
securities exchange, the Exchange does not believe that the proposed
fee changes impose a burden on competition.
Intramarket Competition
The proposed amended fees will be charged to all listed issuers on
the same basis. The Exchange does not believe that the proposed amended
fees will have any meaningful effect on the competition among issuers
listed on the Exchange.
Intermarket Competition
The Exchange operates in a highly competitive market in which
issuers can readily choose to list new securities on other exchanges
and transfer listings to other exchanges if they deem fee levels at
those other venues to be more favorable. Because competitors are free
to modify their own fees, and because issuers may change their chosen
listing venue, the Exchange does not believe its proposed fee change
can impose any burden on intermarket competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Pursuant to Section 19(b)(3)(A)(ii) of the Act,\11\ and Rule 19b-
4(f)(2) thereunder \12\ 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.
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\11\ 15 U.S.C. 78s(b)(3)(A)(ii).
\12\ 17 CFR 240.19b-4.
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#9ceee9f0f9b1fff3f1f1f9f2e8efdceff9ffb2fbf3ea"><span class="__cf_email__" data-cfemail="a2d0d7cec78fc1cdcfcfc7ccd6d1e2d1c7c18cc5cdd4">[email protected]</span></a>. Please include
file number SR-NYSE-2024-78 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-2024-78. 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
[[Page 105160]]
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-2024-78 and should be submitted on
or before January 16, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-30686 Filed 12-23-24; 8:45 am]
BILLING CODE 8011-01-P
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