Notice2025-09404
Self-Regulatory Organizations; New York Stock Exchange LLC; 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 Sections 802.02 and 802.03 of the NYSE Listed Company Manual To Provide That the Exchange Will Not Review a Compliance Plan Submitted by a Listed Company That Is Below Compliance With a Continued Listing Standard if the Company Owes Any Unpaid Fees to the Exchange and Will Instead Commence Suspension and Delisting Procedures if Such Fees Are Not Paid in Full
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
May 27, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 100 (Tuesday, May 27, 2025)</title>
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[Federal Register Volume 90, Number 100 (Tuesday, May 27, 2025)]
[Notices]
[Pages 22385-22389]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-09404]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103088; File No. SR-NYSE-2024-44]
Self-Regulatory Organizations; New York Stock Exchange LLC;
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 Sections 802.02 and 802.03 of the NYSE Listed Company Manual To
Provide That the Exchange Will Not Review a Compliance Plan Submitted
by a Listed Company That Is Below Compliance With a Continued Listing
Standard if the Company Owes Any Unpaid Fees to the Exchange and Will
Instead Commence Suspension and Delisting Procedures if Such Fees Are
Not Paid in Full
May 20, 2025.
I. Introduction
On September 27, 2024, New York Stock Exchange LLC (``NYSE'' or the
``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 Sections 802.02 and
802.03 of the NYSE Listed Company Manual (``Manual'') to provide that
the Exchange (1) will not review a compliance plan submitted by a
domestic or non-U.S. listed company that is determined to be below
compliance with a continued listing standard unless the company has
paid in full all outstanding listing or annual fees due to the Exchange
and will commence suspension and delisting procedures in accordance
with Section 804.00 of the Manual if such fees are not paid in full by
the plan submission deadline; or (2) with respect to any unpaid fees
that have become due and payable since the commencement of its plan
period, if such fees are not paid in full at the time of any required
periodic review of such plan, will commence suspension and delisting
procedures in accordance with Section 804.00 of the Manual. The
proposed rule change was published for comment in the Federal Register
on October 16, 2024.\3\
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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. 101295 (Oct. 9,
2024), 89 FR 83527 (``Notice''). Comment letters on the proposed
rule change are available at: <a href="https://www.sec.gov/comments/sr-nyse-2024-44/srnyse202444.htm">https://www.sec.gov/comments/sr-nyse-2024-44/srnyse202444.htm</a>.
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On November 25, 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 disapprove the
proposed rule change.\5\ On January 13, 2025, the Commission issued an
order instituting proceedings under Section 19(b)(2) of the Exchange
Act \6\ to determine whether to approve or disapprove the proposed rule
change.\7\ On March 10, 2025, the Commission issued a notice of
designation of a longer period of time for Commission action on
proceedings to determine whether to approve or disapprove the proposed
rule change.\8\ On May 8, 2025, the Exchange filed Amendment No. 1 to
the proposed rule change, which supersedes the original filing in its
entirety.\9\ The Commission is publishing this notice to solicit
comments on the proposed rule change, as modified by Amendment No. 1,
from interested persons and is approving the proposed rule change, as
modified by Amendment No. 1, on an accelerated basis.
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\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 101738, 89 FR 95283
(Dec. 2, 2024). The Commission designated January 14, 2025, 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).
\7\ See Securities Exchange Act Release No. 102168, 90 FR 6037
(Jan. 17, 2025).
\8\ See Securities Exchange Act Release No. 102560, 90 FR 12187
(Mar. 14, 2025). The Commission designated June 13, 2025, as the
date by which the Commission shall either approve or disapprove the
proposed rule change.
\9\ Amendment No. 1 is available on the Commission's website at
<a href="https://www.sec.gov/comments/sr-nyse-2024-44/srnyse202444-599155-1740742.pdf">https://www.sec.gov/comments/sr-nyse-2024-44/srnyse202444-599155-1740742.pdf</a>. In Amendment No. 1, the Exchange amended the proposed
rule text to provide that: (i) the Exchange will disclose the amount
of any unpaid fees as of the date of the non-compliance letter and
the Exchange will not review and approve a plan unless all such
disclosed fees are paid in full; (ii) at the beginning of each
calendar fiscal quarter (or semi-annual period in the case of a
listed non-U.S. company) during the plan period, the Exchange will
disclose to the company the amount of all unpaid fees owed by the
company to the Exchange as of the end of the just-completed fiscal
quarter or semi-annual period, as applicable, and that, if the
company does not pay all of the disclosed outstanding fees within 45
days, the Exchange will commence suspension and delisting
procedures; and (iii) a company will not be deemed back into
compliance prior to the completion of its plan period unless it has
paid in full all of the disclosed outstanding fees and the Exchange
will initiate suspension and delisting procedures if the company has
not paid all of the disclosed outstanding fees as of the end of the
plan period. In addition, in Amendment No. 1, the Exchange added
further description to the proposal with respect to: (i) the work
undertaken by the Exchange in reviewing compliance plans under
Sections 802.02 and 802.03 of the Manual; (ii) why the proposed
requirement is not being imposed on companies that are non-compliant
with the requirements of Sections 802.01E or 802.01F of the Manual;
and (iii) the risk that companies that are delisted at the end of
the plan process may never pay outstanding fees owed to the
Exchange. See Amendment No. 1 at 4-5.
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II. Description of the Proposed Rule Change, as Modified by Amendment
No. 1
Currently, Sections 802.02 and 802.03 of the Manual provide that
when the Exchange identifies a domestic company subject to Section
802.02 of the Manual (``listed domestic company'') or a non-U.S.
company subject to Section 802.03 of the Manual (``listed non-U.S.
company'') as being below the continued listing criteria set forth in
Section 802.01 of the Manual (and the company is not able to otherwise
qualify under an original listing standard), the Exchange will notify
the company of such noncompliance by letter (the ``Non-Compliance
Letter'') \10\ and give the company an opportunity to provide the
Exchange with a plan (``plan'') advising the Exchange of definitive
action the company has taken, or is taking, that would bring it into
conformity with continued listing standards within 18 months.\11\ If a
company submits a plan pursuant to Sections 802.02 or 802.03 of the
Manual, it must identify specific quarterly milestones, in the case of
listed domestic companies, or semi-annual milestones, in the case of
listed non-U.S. companies, against which the Exchange will evaluate the
company's progress.\12\ A company has 45 days, in the case of listed
domestic companies, or 90 days, in the case of listed non-U.S.
companies, from receipt of the Non-Compliance Letter to submit its plan
to the Exchange for review (the ``plan submission deadline'').\13\
Otherwise, the Exchange will promptly initiate suspension and delisting
procedures in accordance with Section 804.00 of the Manual.\14\
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\10\ The Exchange's proposal adds the defined term ``Non-
Compliance Letter'' to the rule text. See Amendment No. 1 at 33, 35.
\11\ See Sections 802.02 and 802.03 of the Manual.
\12\ See id.
\13\ See id.
\14\ See id. The Exchange's proposal clarifies that such
suspension and delisting procedures are in accordance with Section
804.00 of the Manual. See Amendment No. 1 at 5 n.5.
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With respect to a plan submitted pursuant to Sections 802.02 or
802.03 of the Manual, Exchange staff will evaluate the plan, including
any supporting documentation, and determine whether the company has
made a reasonable demonstration in the plan of the company's ability to
come into conformity with the relevant continued
[[Page 22386]]
listing standards within 18 months.\15\ If the Exchange accepts the
plan, the Exchange will review the company for compliance with the plan
either quarterly, in the case of a listed domestic company, or semi-
annually, in the case of a listed non-U.S. company.\16\ If the Exchange
determines that the company has failed to meet the material aspects of
the plan or any quarterly or semi-annual milestones, as applicable, the
Exchange will review the circumstances and variance, and determine
whether the company remains able to come back into compliance or
whether such variance warrants commencement of suspension and delisting
procedures.\17\ In any event, a company that does not meet the
continued listing standards at the end of the 18 months will be subject
to the prompt initiation of suspension and delisting procedures in
accordance with Section 804.00 of the Manual.\18\
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\15\ See Sections 802.02 and 802.03 of the Manual. The Exchange
will make such determination within 45 days of receipt of the plan
and will promptly notify the company of its determination in
writing. See id.
\16\ See id. The Exchange will deem the plan period over prior
to the end of the 18 months if a company is able to demonstrate
returning to compliance with the applicable continued listing
standards, or achieving the ability to qualify under an original
listing standard, for a period of two consecutive quarters. See id.
\17\ See id. If the Exchange determines to proceed with
suspension and delisting procedures in accordance with Section
804.00 of the Manual, it may do so regardless of the company's
continued listing status at that time. See id.
\18\ See id. See also Amendment No. 1 at 6 n.6.
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The Exchange proposes to amend Sections 802.02 and 802.03 of the
Manual to provide that the Exchange will not review a plan submitted by
a listed domestic company or listed non-U.S. company (each referred to
herein as a ``listed company'' and, together, ``listed companies'')
that the Exchange has identified as being below the continued listing
standards set forth in Section 802.01 of the Manual unless the company
has previously paid in full all listing or annual fees due to the
Exchange as of the date of the Non-Compliance Letter, as disclosed by
the Exchange in the Non-Compliance Letter.\19\ If the listed company is
below the continued listing standards and has not paid in full all
outstanding listing or annual fees disclosed in the Non-Compliance
Letter by the plan submission deadline, the Exchange will promptly
initiate suspension and delisting procedures in accordance with Section
804.00 of the Manual.\20\
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\19\ See Amendment No. 1 at 7.
\20\ See id.
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In addition, the Exchange proposes to amend Sections 802.02 and
802.03 of the Manual to provide that at the beginning of each quarterly
or semi-annual period, as applicable, the Exchange will disclose to the
listed company in writing the amount of all unpaid listing and annual
fees owed by the company to the Exchange as of the end of the just-
completed fiscal period.\21\ If the company does not pay in full all of
the outstanding fees disclosed therein within 45 days of the date of
such disclosure, the Exchange will promptly initiate suspension and
delisting procedures with respect to such company in accordance with
Section 804.00 of the Manual.\22\ In addition, a company will not be
deemed to be back in compliance prior to the completion of its plan
period unless it has paid in full all of the outstanding fees owed to
the Exchange as disclosed in the most recent quarterly or semi-annual
fee disclosure, as applicable, and the Exchange will promptly initiate
suspension and delisting procedures in accordance with Section 804.00
of the Manual if a company has not paid in full all of the outstanding
fees disclosed in the most recent disclosure as of the end of the plan
period.\23\
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\21\ See id.
\22\ See id.
\23\ See id.
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The Exchange states that the process of reviewing and analyzing
plans, and reviewing the periodic updates with respect to plans, is
resource-intensive and costly for the Exchange and requires significant
work by Exchange staff.\24\ The Exchange also states that, given the
significant amount of work required to review and analyze plans, as
well as to undertake the required quarterly or semi-annual review of
plans, the Exchange believes it is important to ensure that companies
that wish to have a plan accepted or continued by the Exchange have
paid all outstanding annual and listing fees by the plan submission
deadline or at the time of any required review of such plan.\25\ The
Exchange further states that the large majority of companies that
submit plans do so because they have fallen below compliance with the
global market capitalization and stockholders' equity requirement of
Section 802.01B of the Manual, which provides that a company will be
considered below compliance if its average global market capitalization
over a consecutive 30 trading-day period is less than $50,000,000 and,
at the same time, stockholders' equity is less than $50,000,000.\26\
The Exchange states that, in many cases, companies that are below
compliance with this requirement have limited liquidity and are often
delayed in paying their annual and listing fees.\27\
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\24\ See Notice at 83528. According to the Exchange, in
connection with an initial plan review and each subsequent periodic
update, the staff engages in a detailed review and analysis of the
company's filed financial and other disclosures, as well as
supplemental documentation submitted by the company in support of
the plan or to evidence progress in successful implementation of the
plan. According to the Exchange, the staff is required to become
deeply informed about the business and financial condition and the
prospects of the company, including any material risks faced by the
company. The Exchange states that, to achieve this level of
understanding, Exchange staff typically engages in multiple detailed
conversations with management in addition to the extensive
documentary review that is undertaken and that this process requires
significant expenditure of staff resources, including the
significant involvement of senior staff members. See Amendment No. 1
at 6.
\25\ See Notice at 83528.
\26\ See Amendment No. 1 at 6-7. See also Section 802.01B of the
Manual.
\27\ See Amendment No. 1 at 7. The Exchange states that, in its
experience, when these companies fail to regain compliance under a
plan and are subject to delisting, they have often not paid all
outstanding fees at the time of delisting and, in many such cases,
never pay their outstanding fees. See id.
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The Exchange states that listed companies are already required by
Exchange rules to pay fees, as set forth in Section 902.00 et seq. of
the Manual \28\ and their listing agreements,\29\ and the Exchange
currently has the authority under Section 802.01D of the Manual to
delist companies for violations of their agreements with the Exchange,
including their listing agreements.\30\ The Exchange states that while
these provisions already give the Exchange authority to delist
companies that do not pay their fees, the Exchange believes that it is
desirable to have a transparent and uniform process for the delisting
of companies that are delinquent in paying their fees and seeking to
avail themselves of the plan process under Sections 802.02 or 802.03 of
the
[[Page 22387]]
Manual.\31\ The Exchange also states that the proposal will help the
Exchange to ensure that it has sufficient resources to fund its
regulatory activities related to the review and approval and the
ongoing monitoring of plans submitted by companies that are below
continued listing standards.\32\
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\28\ The listing fees and annual fees for all categories of
listed securities are set forth in Section 902.00 et seq. of the
Manual. See Notice at 83528 n.4.
\29\ The Exchange states that the NYSE listing agreement
includes an agreement by the listing applicant to ``pay when due all
fees associated with its listing of securities on the Exchange, in
accordance with the Exchange's rules.'' Notice at 83528. See also
NYSE Listing Agreement for Domestic Company Equity Securities
available at: <a href="https://www.nyse.com/publicdocs/nyse/listing/Domestic_Co_Listing_Agreement.pdf">https://www.nyse.com/publicdocs/nyse/listing/Domestic_Co_Listing_Agreement.pdf</a>.
\30\ See Notice at 83528. Section 802.01D of the Manual provides
that the Exchange may in its sole discretion subject a company to
the procedures outlined in Sections 802.02 and 802.03 of the Manual
if the company, its transfer agent, or registrar, violates any of
its, or their, listing or other agreements with the Exchange. In
addition, Section 802.01D of the Manual provides that the Exchange
is not limited by the criteria set forth in the rule and ``[o]ther
factors which may lead to a company's delisting include . . . [a]
breach by the company of the terms of its listing agreement.''
\31\ See Amendment No. 1 at 8.
\32\ See Notice at 83528.
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III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change, as modified by Amendment No. 1, is consistent with the
requirements of the Exchange Act and the rules and regulations
thereunder applicable to a national securities exchange.\33\ In
particular, the Commission finds that the proposed rule change, as
modified by Amendment No. 1, is consistent with Section 6(b)(5) of the
Exchange Act,\34\ which requires, among other things, that the rules of
an 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; and Section 6(b)(7) of
the Exchange Act,\35\ which requires, among other things, that the
rules of an exchange provide a fair procedure for the prohibition or
limitation by the exchange of any person with respect to access to
services offered by the exchange.
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\33\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\34\ 15 U.S.C. 78f(b)(5).
\35\ 15 U.S.C. 78f(b)(7).
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The development and enforcement of meaningful listing standards
\36\ for an exchange 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.\37\ 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.\38\
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\36\ The Commission notes that this reference to ``listing
standards'' is referring to both initial and continued listing
standards.
\37\ Adequate listing standards, by promoting fair and orderly
markets, are consistent with Section 6(b)(5) of the Exchange Act, in
that they are, among other things, designed to prevent fraudulent
and manipulative acts and practices, promote just and equitable
principles of trade, and protect investors and the public interest.
See, e.g., Securities Exchange Act Release No. 100816 (Aug. 26,
2024), 89 FR 70674, 70677 n.47 (Aug. 30, 2024) (SR-NASDAQ-2024-019).
\38\ See, e.g., Securities Exchange Act Release Nos. 101271
(Oct. 7, 2024), 89 FR 82652, 82653 n.23 and accompanying text (Oct.
11, 2024) (SR-NASDAQ-2024-029) (Order Granting Approval of a
Proposed Rule Change, as Modified by Amendment No. 2, to Modify the
Application of Bid Price Compliance Periods); 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) (stating that ``[a]dequate
standards are especially important given the expectations of
investors regarding exchange trading and the imprimatur of listing
on a particular market'' and that ``[o]nce a security has been
approved for initial listing, maintenance criteria allow an exchange
to monitor the status and trading characteristics of that issue . .
. so that fair and orderly markets can be maintained'').
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Sections 802.02 and 802.03 of the Manual set forth specific
procedures for listed companies that are identified as being below the
Exchange's continued listing criteria, including procedures for
companies to submit a plan to regain compliance.\39\ The Commission has
stated that such rules enhance investor protection by ensuring that
companies that fail to satisfy the continued listing criteria are
identified, reviewed, and then subjected to specified delisting
procedures.\40\
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\39\ See Sections 802.02 and 802.03 of the Manual.
\40\ See, e.g., Securities Exchange Act Release No. 41502 (June
9, 1999), 64 FR 32588, 32594 (June 17, 1999) (SR-NYSE-99-13).
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The Exchange proposes to require listed companies that have been
identified to be below the Exchange's continued listing standards and
are submitting a plan to regain compliance under Sections 802.02 and
802.03 of the Manual to pay any unpaid listing or annual fees due to
the Exchange prior to the Exchange expending resources to initially
review a plan, periodically review a plan, or deem a company has
demonstrated a return to compliance under a plan. The Exchange will
disclose to these listed companies the amount of all unpaid listing and
annual fees in the Non-Compliance Letter and at the beginning of the
quarterly or semi-annual review period, as applicable. The Exchange
also proposes that it will commence suspension and delisting procedures
if such companies fail to pay the disclosed fees in full within a
certain time period following such disclosure. The Exchange states that
Exchange staff must undertake a significant amount of resource-
intensive and costly work in initially and periodically reviewing and
analyzing plans submitted by noncompliant companies pursuant to
Sections 802.02 and 802.03 of the Manual.\41\ The Commission finds that
the Exchange's proposal, as modified by Amendment No. 1, will further
the purposes of Section 6(b)(5) of the Exchange Act by, among other
things, protecting investors and the public interest by helping to
ensure the Exchange has sufficient resources to fund its regulatory
activities relating to the review, approval, and ongoing monitoring of
plans submitted by listed companies subject to Sections 802.02 and
802.03 of the Manual and seeking to regain compliance with continued
listing standards.\42\ Moreover, although Sections 802.01D and 902.00
of the Manual provide the Exchange with existing authority to delist
companies that fail to pay their listing or annual fees,\43\ the
proposal will provide greater transparency to listed companies about
how the Exchange will handle unpaid fees in circumstances where
companies seek to use or are using a compliance plan under Sections
802.02 and 802.03 of the Manual.
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\41\ See supra note 24 and accompanying text.
\42\ See supra note 32.
\43\ See supra notes 28-30 and accompanying text.
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The Commission finds that proposed rule change is also consistent
with the requirement of Section 6(b)(5) of the Exchange Act \44\ that
the rules of a national securities exchange not be designed to permit
unfair discrimination between customers, issuers, brokers, or dealers.
It is reasonable for the Exchange to limit its proposal to listed
companies that are below continued listing standards and are subject to
the procedures in Sections 802.02 and 802.03 of the Manual. As
discussed above, the Exchange states that many of the listed companies
that submit plans pursuant to Sections 802.02 and 802.03 of the Manual
do so because they have fallen below
[[Page 22388]]
compliance with the global market capitalization and stockholders'
equity requirement of Section 802.01B of the Manual. The Exchange
states that these companies often have limited liquidity and are
delayed in paying their annual and listing fees, and when they fail to
regain compliance under the plan and are delisted, many times they
never pay their outstanding fees.\45\ Moreover, as discussed, above,
the Exchange states that the process of reviewing and analyzing plans
and reviewing the periodic updates with respect to plans pursuant to
Sections 802.02 and 802.03 is resource-intensive and costly for the
Exchange.\46\ In addition, while Sections 802.01E and 802.01F of the
Manual also provide for compliance periods to allow listed companies to
come back into compliance with certain other Exchange rules, the
Exchange states that it does not, nor does it expect to, expend a
similar amount of effort in reviewing and approving compliance plans
under these provisions.\47\ Accordingly, the proposal focuses on
companies that are below listing standards and have unpaid fees
outstanding in circumstances in which the Exchange can reasonably
expect to devote greater resources relating to the company coming back
into compliance with listing standards and where the Exchange faces a
greater risk of fees remaining unpaid.
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\44\ 15 U.S.C. 78f(b)(5).
\45\ See supra notes 26-27 and accompanying text.
\46\ See supra note 24 and accompanying text.
\47\ See Amendment No. 1 at 7-9. In particular, Section 802.01E
(SEC Annual and Quarterly Report Timely Filing Criteria) applies to
a listed company that incurs a late filing delinquency by failing to
timely file certain reports with the Commission and provides that
such companies may be granted a compliance period of up to 12 months
from the extended due date of the delayed filing. Section 802.01F of
the Manual (Noncompliance with Section 303A.14 (Erroneously Awarded
Compensation)) applies to a listed issuer that is not compliant with
the ``clawback requirements'' relating to erroneously awarded
compensation and provides a process for an issuer to come back into
compliance with Exchange rules that is similar to the process set
forth in Section 802.01E of the Manual. With respect to both rules,
the Exchange states that it does not expend a similar amount of
effort in reviewing and approving compliance periods to that
required in reviewing plans for quantitative non-compliance pursuant
to Sections 802.02 and 802.03 of the Manual because the issues
involved are generally narrower and more technical in nature and do
not require a review of a compliance plan that encompasses all of a
company's business and financial condition. The Exchange also states
that, with respect to Section 802.01E, companies that are delayed in
filing their periodic reports are often in good financial health and
do not present significant risks of quantitative non-compliance or
of being delisted without paying their outstanding fees. See id.
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The Commission further believes the proposed rule change, as
modified by Amendment No. 1, is consistent with Section 6(b)(7) of the
Exchange Act \48\ in that it provides a fair procedure for the
prohibition or limitation by the Exchange of any person with respect to
access to services offered. A listed company whose securities are
subject to prompt suspension and delisting under the proposal will
still be able to seek review of a delisting determination from the
Committee for Review of the Board of Directors of the Exchange as set
forth in Section 804.00 of the Manual. Further, the Exchange will
provide notice of unpaid fees by disclosing in writing the amount of
all unpaid listing and annual fees owed by a company to the Exchange in
the Non-Compliance Letter and prior to any quarterly or semi-annual
review of a plan, and the company will then have a reasonable period of
time to pay such unpaid fees prior to the Exchange commencing
suspension and delisting procedures. Accordingly, the Exchange's
process for review of a delisting determination will continue to
provide a fair procedure for the review of delisting determinations in
accordance with Section 6(b)(7) of the Exchange Act.
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\48\ 15 U.S.C. 78f(b)(7).
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For the reasons discussed above, the Commission finds that this
proposed rule change, as modified by Amendment No. 1, is consistent
with the requirements of the Exchange Act.\49\
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\49\ The comment letters received on the proposal were generally
supportive. See Letters from Melody Aina Maryann Brand, dated
November 30, 2024; Elizabeth Slator, dated January 13, 2025.
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IV. Solicitation of Comments on Amendment No. 1 to the Proposed Rule
Change
Interested persons are invited to submit written data, views, and
arguments concerning whether the proposed rule change, as modified by
Amendment No. 1, is consistent with the Exchange 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#f381869f96de909c9e9e969d8780b3809690dd949c85"><span class="__cf_email__" data-cfemail="b0c2c5dcd59dd3dfddddd5dec4c3f0c3d5d39ed7dfc6">[email protected]</span></a>. Please include
file number SR-NYSE-2024-44 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-2024-44. 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-2024-44, and should be
submitted on or before June 17, 2025.
V. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment No. 1
The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 1, prior to the thirtieth day
after the date of publication of notice of the filing of Amendment No.
1 in the Federal Register. The changes in Amendment No. 1 provide
greater clarity to the rule text and additional explanation to the
proposal. In particular, the changes in Amendment No. 1 provide that
the Exchange will disclose in writing the amount of all unpaid listing
and annual fees owed by a company to the Exchange in the Non-Compliance
Letter and prior to any quarterly or semi-annual review of a plan, and
that a company will have a specific period of time to pay such unpaid
fees prior to the Exchange commencing suspension and delisting
procedures. These changes provide greater clarity to how the Exchange
will implement the proposal and help ensure that listed companies
receive adequate notice of the fees due to the Exchange prior to the
Exchange commencing suspension and delisting procedures. In addition,
Amendment No. 1 further describes the work undertaken by the Exchange
in
[[Page 22389]]
reviewing compliance plans under Sections 802.02 and 802.03 of the
Manual and the risks relating to companies being delisted at the end of
the plan process without paying outstanding fees owed to the Exchange.
These changes help to explain why the proposed requirements are focused
on listed companies subject to Sections 802.02 and 802.03 of the Manual
and are not being imposed on other companies not subject to such
provisions. The changes to the rule text and additional information in
Amendment No. 1 assist the Commission in evaluating the Exchange's
proposal and in determining that it is consistent with the Exchange
Act. Accordingly, the Commission finds good cause, pursuant to Section
19(b)(2) of the Exchange Act,\50\ to approve the proposed rule change,
as modified by Amendment No. 1, on an accelerated basis.
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\50\ 15 U.S.C. 78s(b)(2).
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VI. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\51\ that the proposed rule change (SR-NYSE-2024-44), as
modified by Amendment No. 1, be, and it hereby is, approved on an
accelerated basis.
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\51\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\52\
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\52\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-09404 Filed 5-23-25; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on May 27, 2025.
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.