Self-Regulatory Organizations; New York Stock Exchange LLC; Order Approving Proposed Rule Change, Amending Section 907.00 of the Listed Company Manual (the “Manual”) To (i) Amend the Suite of Complimentary Products and Services That Are Offered to Certain Current and Newly Listed Companies, (ii) Update the Value of Complimentary Products and Services Offered to Listed Companies, and (iii) Provide That Complimentary Products and Services Would Also Be Offered to Companies That Transfer Their Listing to the Exchange From Another National Securities Exchange, 62584-62588 [2015-26336]
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62584
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securities; ETPs; or other exchangetraded securities from markets and other
entities that are members of ISG or with
which the Exchange has in place a
comprehensive surveillance sharing
agreement. FINRA, on behalf of the
Exchange, is able to access, as needed,
trade information for certain fixed
income securities, including corporate
debt securities and money market
instruments, held by the Fund reported
to FINRA’s TRACE.
(4) The Exchange has appropriate
rules to facilitate transactions in the
Shares during all trading sessions.
(5) Prior to the commencement of
trading, the Exchange will inform its
members in an Information Circular of
the special characteristics and risks
associated with trading the Shares.
Specifically, the Information Circular
will discuss the following: (a) The
procedures for purchases and
redemptions of Shares in Creation Units
(and that Shares are not individually
redeemable); (b) Nasdaq Rule 2111A,
which imposes suitability obligations on
Nasdaq members with respect to
recommending transactions in the
Shares to customers; (c) how and by
whom information regarding the
Intraday Indicative Value and the
Disclosed Portfolio is disseminated; (d)
the risks involved in trading the Shares
during the Pre-Market and Post-Market
Sessions when an updated Intraday
Indicative Value will not be calculated
or publicly disseminated; (e) the
requirement that members deliver a
prospectus to investors purchasing
newly issued Shares prior to or
concurrently with the confirmation of a
transaction; and (f) trading information.
(6) For initial and continued listing,
the Fund must be in compliance with
Rule 10A–3 under the Act.43
(7) At least 90% of the convertible
bonds, convertible preferred stocks, and
warrants in which the Fund invests, and
the equity securities into which these
securities may be converted, and also
preferred stocks (non-convertible) in
which the Fund invests, will be traded
on exchanges that are ISG members.
(8) The Fund may hold up to an
aggregate amount of 15% of its net
assets in illiquid assets.
(9) The Fund will only invest in bank
loans that have a par amount
outstanding of U.S. $100 million or
greater at the time the loan is originally
issued.
(10) The Fund will not enter into a
long or short position in high yield debt
securities with a par amount
outstanding of less than U.S. $100
million at the time of issuance of such
high yield debt securities, if upon
establishing such position, the total
value of such positions would represent
fifty percent or greater of the Fund’s net
assets. In addition, the Fund will not
invest in other types of high-yield debt
securities, such as asset-backed
securities.
(11) The Fund will not invest more
than 25% of the value of its total assets
in securities of issuers in any particular
industry.
(12) The Fund’s investments
(including investments in ETPs) will not
be utilized to seek to achieve a
leveraged return on the Fund’s net
assets.
(13) The Fund will not invest in
futures contracts, options, swaps, or
other derivative instruments.
(14) A minimum of 100,000 Shares
will be outstanding at the
commencement of trading on the
Exchange.
This approval order is based on all of
the Exchange’s representations,
including those set forth above and in
the Notice. The Commission notes that
the Fund and the Shares must comply
with the requirements of Nasdaq Rule
5735 to be listed and traded on the
Exchange.
For the foregoing reasons, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act 44 and the rules and
regulations thereunder applicable to a
national securities exchange.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Exchange Act,45
that the proposed rule change (SR–
NASDAQ–2015–095) be, and it hereby
is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.46
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–26323 Filed 10–15–15; 8:45 am]
BILLING CODE 8011–01–P
17 CFR 240.10A–3.
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[Release No. 34–76127; File No. SR–NYSE–
2015–36]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Order
Approving Proposed Rule Change,
Amending Section 907.00 of the Listed
Company Manual (the ‘‘Manual’’) To (i)
Amend the Suite of Complimentary
Products and Services That Are
Offered to Certain Current and Newly
Listed Companies, (ii) Update the
Value of Complimentary Products and
Services Offered to Listed Companies,
and (iii) Provide That Complimentary
Products and Services Would Also Be
Offered to Companies That Transfer
Their Listing to the Exchange From
Another National Securities Exchange
October 9, 2015.
I. Introduction
On August 11, 2015, 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 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to amend section 907.00 of the
listed company manual (‘‘Manual’’) to
amend the suite of complimentary
products and services that are offered to
certain current and newly listed
companies and update the value of
complimentary products and services
offered to listed companies. In addition,
the proposal would separate companies
that transfer their listing to the
Exchange from another national
securities exchange to a new category
and expand the complimentary
products and services offered to such
transfer companies. The proposed rule
change was published for comment in
the Federal Register on August 25,
2015.3 No comment letters were
received in response to the Notice. This
order approves the proposed rule
change.
II. Description of the Proposed Rule
Change
In December 2013, the Exchange
adopted a rule to expand the suite of
complimentary products and services
that it offers to certain current and
newly listed companies on the
Exchange.4 Under this rule, certain
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 75740
(August 19, 2015), 80 FR 51617 (‘‘Notice’’).
4 See Securities Exchange Act Release No. 70971
(Dec. 3, 2013), 78 FR 73905 (Dec. 9, 2013) (SR–
2 17
44 15
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(2).
46 17 CFR 200.30–3(a)(12).
45 15
43 See
SECURITIES AND EXCHANGE
COMMISSION
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companies currently listed on the
Exchange (‘‘Eligible Current Listings’’)
are offered a suite of complimentary
products and services that vary
depending on the number of shares of
common stock or other equity security
that a company has outstanding. The
Exchange presently offers a suite of
complimentary products and services to
(i) any U.S. company that lists common
stock on the Exchange for the first time
and any non-U.S. company that lists an
equity security on the Exchange under
Section 102.01 or 103.00 of the Manual
for the first time, regardless of whether
such U.S. or non-U.S. company
conducts an offering and (ii) any U.S. or
non-U.S. company emerging from a
bankruptcy, spinoff (where a company
lists new shares in the absence of a
public offering), or carve-out (where a
company carves out a business line or
division, which then conducts a
separate initial public offering)
(collectively, ‘‘Eligible New Listings’’).
Currently, companies that transfer their
listing to the Exchange are offered
complimentary products and services
on the same terms as Eligible Current
Listings.
The Exchange proposes to amend
Section 907.00 of the Manual to (i)
amend the suite of complimentary
products and services that are offered to
Eligible Current Listings and Eligible
New Listings, (ii) update the value of
complimentary products and services
offered to such companies, and (iii)
provide that any U.S. or non-U.S.
company that transfers its listing of
common stock or equity securities,
respectively, to the Exchange from
another national securities exchange
(‘‘Eligible Transfer Companies’’) would
be eligible to receive an enhanced
package of complimentary products and
services comparable to the package
offered to Eligible New Listings, with
the exception of corporate governance
tools.5
The Exchange proposes to update the
approximate commercial value of the
following offerings to Eligible Current
Listings, Eligible New Listings, and
Eligible Transfer Companies: Market
surveillance products and services from
$45,000 to $55,000 per annum,
corporate governance tools from $20,000
to $50,000 per annum, web-hosting
products and services from a range of
$12,000–16,000 to $16,000 per annum,
market analytics products and services
from $20,000 to $30,000 per annum, and
NYSE–2013–68) (‘‘December 2013 Approval
Order’’).
5 Eligible transfers currently receive
complimentary products and services, if eligible,
under the ‘‘currently listed issuers’’ category.
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news distribution products and services
from $10,000 to $20,000 per annum.
The Exchange also proposes to include
web-casting services (with a commercial
value of approximately $6,500 annually)
as a separate category of complimentary
products and services offered to certain
issuers.6 In addition, the Exchange
proposes to add whistleblower hotline
services (with a commercial value of
approximately $4,000 annually) to the
list of services that it offers to all listed
companies for a period of 24 months.
The whistleblower hotline services will
replace data room services and virtual
investor relation tools (with a
commercial value of $15,000–$20,000)
as complimentary products offered to all
listed issuers.
Currently, all listed issuers receive
some complimentary products and
services through NYSE Market Access
Center. The Exchange also offers
Eligible Current Listings a suite of
products and services, varying based on
the number of shares such companies
have issued and outstanding. Eligible
Current Listings that have at least 270
million shares issued and outstanding
(‘‘Tier One Eligible Current Listing’’) are
presently offered (i) a choice of market
surveillance, corporate governance tools
and advisory services or market
analytics products and services and (ii)
web-hosting products and services, on a
complimentary basis. Eligible Current
Listings that have between 160 million
and up to 270 million shares issued and
outstanding (‘‘Tier Two Eligible Current
Listing’’) are presently offered a choice
of market analytics, corporate
governance tools, or web-hosting
products and services. The Exchange
proposes to amend Section 907.00 to
delete corporate governance tools and
advisory services from the suite of
products offered to a Tier One Eligible
Current Listing and corporate
governance tools from the suite of
products offered to a Tier Two Eligible
Current Listing. In both cases, the
proposed rule replaces the deleted
service with web-casting products and
services.
The Exchange currently offers Eligible
New Listings different products and
services based on such companies’
global market value. Eligible New
Listings with a global market value of
$400 million or more (each a ‘‘Tier A
Eligible New Listing’’) are presently
offered web-hosting and news
6 The web-hosting product offered by the
Exchange provides eligible issuers with a Web site
containing business content that can be viewed by
investors. Web-casting services enable companies to
host interactive web-casts to communicate with
investors. Eligible companies will receive four
interactive web-casts each year.
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distribution products and services for a
period of 24 months and either (i)
market surveillance products and
services for a period of 12 calendar
months from the date of listing or (ii) a
choice of market analytics products and
services or corporate governance tools
for a period of 24 calendar months from
the date of listing. Eligible New Listings
with a global market value of less than
$400 million (each a ‘‘Tier B Eligible
New Listing’’) are presently offered webhosting and news distribution products
and services for a period of 24 months
from the date of listing. The Exchange
proposes to amend Section 907.00 to
offer 24 months each of market
analytics, market surveillance products,
web-hosting, web-casting, corporate
governance tools, and news distribution
products and services to Tier A Eligible
New Listings. Accordingly, the
Exchange proposes to delete text from
Section 907.00 that discusses providing
market surveillance products and
services for only 12 months, as well as
the option for continuing such services
at the end of the initial 12 month
period. The proposed rule further
amends Section 907.00 to offer 24
months of web-casting, market
analytics, and corporate governance
tools to Tier B Eligible New Listings, in
addition to the currently-offered webhosting and news distribution products.
Pursuant to the proposed rule change,
Eligible Transfer Companies would be
offered a package of complimentary
products and services that are similar to
Eligible New Listings, with one
exception.7 The one difference between
the packages is that the Exchange will
not offer corporate governance tools to
Eligible Transfer Companies, while
Eligible New Listings will receive this
service.
Regarding the timing of
complimentary products and services,
the proposed rule amends Section
907.00 to specify that if an Eligible New
Listing or Eligible Transfer Company
7 As noted above, the Exchange proposes to offer
Eligible Transfer Companies a package of
complimentary products and services comparable
to the package that it offers to Eligible New Listings.
Therefore, the Exchange proposes to utilize the
same metric, i.e., global market value, to determine
eligibility for each designation so as to avoid
confusion. Currently, transfer companies may
receive complimentary products and services if
they qualify to be designated as an Eligible Current
Listing, such designation being based on the
number of outstanding shares of a company’s equity
securities. Under the proposed rule change, Eligible
Transfer Companies with a global market value of
$400 million or more will be eligible to receive a
suite of complimentary products and services
valued at $127,500 per year for two years and
Eligible Transfer Companies with a global market
value of less than $400 million will be eligible to
receive a suite of complimentary products and
services valued at $72,500 per year for two years.
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begins using a particular service within
30 days after the date of listing, the
complimentary period begins on such
date of first use. In all other instances,
the complimentary period begins on the
listing date.
In addition to the foregoing, the
Exchange proposes making several
changes to its rule to reflect a change in
terminology. The proposed rule change
amends Section 907.00 to change the
terms ‘‘newly listed issuer’’ and
‘‘currently listed issuers’’ to ‘‘Eligible
New Listing’’ and ‘‘Eligible Current
Listings,’’ respectively. The Exchange
also proposes to amend Section 907.00
to include a definition of Eligible
Transfer Companies.8 Accordingly,
since Eligible Transfer Companies
would be a separate category of issuer
under the proposed rule, the Exchange
stated in its filing that it does not
believe there could be any inference that
a transfer company would be included
in the definition of an Eligible New
Listing. Therefore, the Exchange
proposes to delete the exception for
companies that are transferring their
listing from another national securities
exchange from the current definition of
newly listed issuers, which would be
renamed Eligible New Listing under the
proposed rule.
The Exchange also proposes to amend
the first paragraph of Section 907.00 of
the Manual to specify that it will offer
certain complimentary products and
services, and access to discounted thirdparty products and services through the
NYSE Market Access Center to both
currently and newly listed issuers,
whereas previously it stated such
services were only offered to currently
listed issuers.
While the Exchange will implement
the proposed rule upon approval, any
Eligible New Listing that listed on the
Exchange prior to approval of the
proposed rule will continue to receive
services under the terms of the current
rule. Therefore, for as long as any
Eligible New Listing is receiving
services under the terms of Section
907.00 of the Manual as currently in
effect, the Exchange will maintain a link
to such section in the Introductory Note
to Section 907.00.
With respect to Eligible Current
Listings, to the extent that the Exchange
has already paid a third-party provider
(prior to approval) for corporate
governance services to an Eligible
Current Listing, such complimentary
8 For purposes of this Section 907.00, the term
‘‘Eligible Transfer Company’’ means any U.S. or
non-U.S. company that transfers its listing of
common stock or equity securities, respectively, to
the Exchange from another national securities
exchange.
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service will continue until the payments
run out. Once any pre-approval
payments run out, such services will be
discontinued. The Exchange expects all
corporate governance services to
Eligible Current Listings to be
completely discontinued no later than
early 2016.
The specific products and services
offered by the Exchange will be
developed by the Exchange or by thirdparty vendors. In its filing, the Exchange
represented that NYSE Governance
Services 9 will offer and develop the
corporate governance tools, but will not
provide any other service related to the
proposed rule. NYSE Governance
Services is an entity that is owned by
the Exchange’s parent company that
provides corporate governance, risk and
compliance services to its clients,
including companies listed on the
Exchange. According to the Exchange,
companies that are offered these
products are under no obligation to
accept them and a company’s listing on
the Exchange is not conditioned upon
acceptance of any product or service.
Moreover, the Exchange represents that,
from time to time, companies elect to
purchase products and services from
other vendors at their own expense
rather than accepting comparable
products and services offered by the
Exchange.
III. Discussion and Commission
Findings
The Commission has carefully
reviewed the proposed rule change and
finds that it is consistent with the
requirements of Section 6 of the Act.10
Specifically, the Commission finds that
the proposal is consistent with Sections
6(b)(4) 11 and (5) of the Act 12 in
particular, in that the proposed rule is
designed to provide for the equitable
9 In its filing, NYSE stated its belief that NYSE
Governance Services is not a ‘‘facility’’ of the
Exchange as defined in 15 U.S.C. 78c(a)(2), and
noted that its proposed rule change is being filed
with the Commission under Section 19(b)(2) of the
Act because it relates to services offered in
connection with a listing on the Exchange. See
Notice supra note 3. The Commission notes that the
definition of a ‘‘facility’’ of an exchange is broad
under the Act, and ‘‘includes its premises, tangible
or intangible property whether on the premises or
not, any right to the use of such premises or
property or any service thereof for the purpose of
effecting or reporting a transaction on an exchange
. . . and any right of the exchange to the use of any
property or service.’’ The Commission further notes
that any determination as to whether a service or
other product is a facility of an exchange requires
an analysis of the particular facts and
circumstances.
10 15 U.S.C. 78f. 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).
11 15 U.S.C. 78f(b)(4).
12 15 U.S.C. 78f(b)(4) and (5).
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allocation of reasonable dues, fees, and
other charges among Exchange
members, issuers, and other persons
using the Exchange’s facilities, and is
not designed to permit unfair
discrimination between customers,
issuers, brokers or dealers. Moreover,
the Commission believes that the
proposed rule change is consistent with
6(b)(8) of the Act 13 in that it does not
impose any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act.
As described above, the Exchange
proposes to alter the complimentary
products and services it offers
companies. Specifically, the Exchange
proposes to (i) remove corporate
governance tools and advisory services
for Tier One companies, (ii) remove
corporate governance tools for Tier Two
companies, (iii) expand the services
provided to Tier A Eligible New Listings
to include all of the services listed, as
described above, for a period of 24
months, not just provide a choice of
services, (iv) expand the services
provided to Tier B Eligible New Listings
to include market analytics and
corporate governance tools, (v) offer
Eligible Transfer Companies the same
products and services offered to Eligible
New Listings, except for corporate
governance tools,14 (vi) provide webcasting to Tier One, Tier Two, Tier A,
and Tier B companies, and (vii) replace
data room services and virtual investor
relation tools available to all issuers
annually with a whistleblower hotline
for a period of 24 months.
The Commission believes that it is
consistent with the Act for the Exchange
to revise the products and services it
offers to companies. The Exchange has
represented that the corporate
governance services are not as helpful to
more established companies as they are
to newly listed companies and that webcasting may be more useful to them.15
According to the Exchange, the
corporate governance products currently
offered to Eligible Current Listings are
in low demand. The Exchange believes
replacing such offerings with webcasting would be more beneficial to
listed companies who utilize this
service in connection with quarterly
earnings releases. The Commission
believes that, based on NYSE’s
representations, replacing a little13 15
U.S.C. 78f(b)(8).
the Exchange is proposing to offer
Eligible Transfer Companies a package of
complimentary benefits similar to the benefits
offered to Eligible New Listings, the Exchange also
proposes using the same metric, i.e., global market
value, to determine eligibility for certain products
and services.
15 See Notice, supra note 3.
14 Because
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utilized service by companies already
listed with one that could help
companies communicate better with
shareholders is reasonable and
consistent with Section 6(b)(5) of the
Act.
In addition, the Exchange believes
that it is appropriate to expand the suite
of complimentary products and services
it offers to Tier A and Tier B Eligible
New Listings, because such companies
are listing on the Exchange for the first
time and frequently have greater needs
with respect to developing their
corporate governance and shareholder
outreach capabilities.16 Moreover, the
Exchange has represented that it faces
competition in the market for listing
services.17 As part of this competition,
the Exchange seeks to entice Nasdaqlisted companies to transfer their listing
to the Exchange. The Exchange
competes in part by improving the
quality of the services that it offers to
listed companies. NYSE believes that
offering transfers from Nasdaq a similar
package to that currently offered to
NYSE listed companies transferring to
Nasdaq, as well as new listings on
Nasdaq, should enhance its ability to
compete for listings. According to the
Exchange, by offering products and
services on a complimentary basis and
ensuring that it is offering the services
most valued by its listed issuers, it
improves the quality of the services that
listed companies receive.18
Accordingly, the Commission believes
that the proposed rule reflects the
current competitive environment for
exchange listings among national
securities exchanges, and is appropriate
and consistent with Section 6(b)(8) of
the Act.19 Further, by extending the
provision of certain complementary
services (as listed above) to Tier A and
Tier B Eligible New Listings to 24
months and by entitling Eligible
Transfer Companies to receive these
products and services, other than
corporate governance tools, on similar
terms as Eligible New Listings, the
proposed change enables the Exchange
to better compete for new listings.
Moreover, the Commission believes
that it is appropriate for the Exchange to
offer varying services to different
categories of issuers. The Commission
has previously found that the tiers
originally established under the
corporate products and services rule
was consistent with the Act.20 The
16 See
id.
id.
18 See id.
19 15 U.S.C. 78f(b)(8).
20 See Securities Exchange Act Release No. 65127
(Aug. 12, 2011), 76 FR 51449 (Aug. 18, 2011) (SR–
17 See
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18:54 Oct 15, 2015
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Commission further found that the
changes approved in the December 2013
Approval Order expanding the
complimentary products and services
offered to some tiers but not others was
also justified, in part, based on the
different-sized companies within each
tier and the amount of services they
needed.21 According to the Exchange,
the current proposal to expand the
products and services available to Tier
A and Tier B Eligible New Listings
should ease the transition of companies
becoming public for the first time.22 In
addition, as stated by the Exchange, it
competes with Nasdaq for listings and
further, that Nasdaq offers similar
products and services to new listings,
including transfers.23
As noted above, under the proposal,
while newly listed companies and
transfers will receive similar services
there is one exception involving
corporate governance tools (valued at
$50,000) which newly listed companies
will receive but not transfers. NYSE
argues that this approach is consistent
with the changes being proposed for
currently listed companies in that in the
Exchange’s experience these tools are
not as useful for already established
companies and as a result are in low
demand by such listed companies.
Based on these representations, the
Commission does not believe that the
exception for transfers violates the
unfair discrimination standard under
Section 6(b)(5) of the Act and appears to
provide equal treatment among
established companies, whether
currently listed or transferring. The
Commission notes that all listed
companies will continue to receive
some level of free services, including
the addition of the whistleblower
hotline services being approved in this
order. The Commission also notes that
within each tier all issuers receive the
exact same package of services. The
approval of this proposal, including the
updated dollar values and specific
services provided within each tier, will
therefore help to ensure that individual
listed companies are not given specially
NYSE–2011–20) (‘‘Approval Order’’). In particular,
the Approval Order states that while not all issuers
receive the same level of services, NYSE has stated
that trading volume and market activity are related
to the level of services that the listed companies
would use in the absence of complimentary
arrangements. The Commission found, among other
things, that ‘‘. . . the products and services and
their commercial value are equitably allocated
among issuers consistent with Section 6(b)(4) of the
Act, and the rule does not unfairly discriminate
between issuers consistent with Section 6(b)(5) of
the Act.’’ See Approval Order, 76 FR at 51452.
21 See December 2013 Approval Order, supra note
4.
22 See Notice, supra note 3.
23 See id.
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62587
negotiated packages of products and
services to list or remain listed which
would raise unfair discrimination issues
under the Act. The Commission also
believes that it is reasonable, and in fact
required by Section 19(b) of the Act,
that the Exchange amend its rule to
update the commercial values of the
products it offers to Eligible Current
Listings, Eligible Transfer Companies,
and Eligible New Listings.24 This
provides greater transparency to
Exchange’s rules and the fees, and the
value of free products and services,
applicable to listed companies.
The Commission also believes that it
is consistent with the Act for the
Exchange to allow the complimentary
period for a particular service offered to
Eligible New Listings and Eligible
Transfer Companies to begin on the date
of first use if a company begins to use
the service within 30 days after the date
of listing. According to the Exchange,
companies listing on the Exchange for
the first time often require a period of
time after listing to complete the
contracting and training process with
vendors providing the complimentary
products and services.25 Therefore,
many companies are not able to begin
using the suite of products offered to
them immediately on the date of
listing.26 The Commission notes that
this proposed change is substantially
similar to Nasdaq Rule IM–5900–7,
which also allows a company to begin
using services within 30 days of
listing.27 As noted in the Nasdaq Order,
the Commission believes that this
change would provide only a short
window of additional time to allow
companies to finalize their contracts for
the complimentary products and
services, and that this additional time
would only be available to companies
that have already determined to list on
the Exchange.28
Based on the factors noted above, the
Commission continues to believe that
NYSE’s products and services, and their
commercial value, are equitably
allocated among issuers, consistent with
Section 6(b)(4) of the Act.29 The
24 We would expect the Exchange, consistent with
Section 19(b) of the Act, to periodically update the
value of products and services offered should they
change. This would help to provide transparency to
listed companies on the value of the free services
they receive and the actual costs associated with
listing on the Exchange.
25 See Notice, supra note 3.
26 See id.
27 See Securities Exchange Act Release No. 72669
(July 24, 2014), 79 FR 44234 (July 30, 2014)
(approving Nasdaq–2014–058) (‘‘Nasdaq Order’’).
28 The Commission expects the Exchange to track
the start (and end) date of each free service.
29 15 U.S.C. 78f(b)(4).
E:\FR\FM\16OCN1.SGM
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62588
Federal Register / Vol. 80, No. 200 / Friday, October 16, 2015 / Notices
Commission also continues to believe
that the rule does not unfairly
discriminate between issuers, consistent
with Section 6(b)(5) of the Act.30
Finally, the Commission believes that
the proposal does not impose any
burden on competition not necessary or
appropriate in furtherance of the
purposes of the Act, consistent with
Section 6(b)(8) of the Act.31
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,32 that the
proposed rule change (SR–NYSE–2015–
36), be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.33
Brent J. Fields,
Secretary.
[FR Doc. 2015–26336 Filed 10–15–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–76120; File No. SR–BATS–
2015–83]
Self-Regulatory Organizations; BATS
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Related to Fees for Use
of BATS Exchange, Inc.
October 9, 2015.
srobinson on DSK5SPTVN1PROD with NOTICES
Pursuant to the provisions of Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 notice is hereby given that
on October 1, 2015, BATS Exchange,
Inc. (the ‘‘Exchange’’ or ‘‘BATS’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II and III below, which Items
have been prepared by the Exchange.
The Exchange has designated the
proposed rule change as one
establishing or changing a member due,
fee, or other charge imposed by the
Exchange under Section 19(b)(3)(A)(ii)
of the Act 3 and Rule 19b–4(f)(2)
thereunder,4 which renders the
proposed rule change effective upon
filing with the Commission. The
Commission is publishing this notice to
30 15
U.S.C. 78f(b)(5).
U.S.C. 78f(b)(8).
32 15 U.S.C. 78s(b)(2).
33 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
31 15
VerDate Sep<11>2014
18:54 Oct 15, 2015
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange filed a proposal to
amend the fee schedule applicable to
Members 5 and non-members of the
Exchange pursuant to BATS Rules
15.1(a) and (c).
The text of the proposed rule change
is available at the Exchange’s Web site
at www.batstrading.com, 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
Exchange 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 these
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
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to modify the
fee schedule applicable to the
Exchange’s options platform (‘‘BATS
Options’’) effective immediately, in
order to: (i) Increase the fees for certain
logical ports; and (ii) provide for
separate fees based upon the number of
logical ports utilized.
A logical port represents a port
established by the Exchange within the
Exchange’s system for trading and
billing purposes. Each logical port
established is specific to a Member or
non-member and grants that Member or
non-member the ability to operate a
specific application, such as FIX order
entry or PITCH data receipt. The
Exchange’s Multicast PITCH data feed is
available from two primary feeds,
identified as the ‘‘A feed’’ and the ‘‘C
feed’’, which contain the same
information but differ only in the way
such feeds are received. The Exchange
also offers two redundant fees,
5 The term ‘‘Member’’ is defined as ‘‘any
registered broker or dealer that has been admitted
to membership in the Exchange.’’ See Exchange
Rule 1.5(n).
Jkt 238001
PO 00000
Frm 00076
Fmt 4703
Sfmt 4703
identified as the ‘‘B feed’’ and the ‘‘D
feed.’’ The Exchange also offers a bulkquoting interface which allows Users 6
of BATS Options to submit and update
multiple bids and offers in one message
through logical ports enabled for bulkquoting.7 The bulk-quoting application
for BATS Options is a particularly
useful feature for Users that provide
quotations in many different options.
Logical ports, including Multicast
PITCH Spin Server and GRP ports,
which are used to request and receive a
retransmission of data from the
Exchange, are currently subject to a fee
of $400 per month per port and ports
with bulk quoting capabilities are
charged $1,500 per month per port.
These fees are set and do not currently
vary based on the number of ports
purchased. In addition, logical port fees
are limited to logical ports in the
Exchange’s primary data center and no
logical port fees are assessed for
redundant secondary data center ports.
The Exchange assesses the monthly per
logical port fees for all of a Member and
non-Member’s logical ports.
The Exchange now proposes to
increase the fees for logical ports
(including Multicast PITCH Spin Server
and GRP ports) from $400 per port per
month to $550 per port per month for
the first five ports. Multicast PITCH
Spin Server Ports and GRP Ports would
now be subject to a fee of $550 per
month for a set of primary ports (A or
C feed). The Exchange will continue to
offer for free the ports necessary to
receive the Exchange’s redundant
Multicast ‘‘B feed’’ and ‘‘D feed’’, as
well as all ports made available in the
Exchange’s secondary data center.
Accordingly, this proposal only applies
to ports used to receive an Exchange
primary Multicast PITCH feeds at the
Exchange’s primary data center. Other
than as described below, the Exchange
does not propose to amend the monthly
fee for ports with bulk quoting
capabilities.
Where a User subscribes to more than
five ports, the Exchange proposes to
charge for each port in excess of five
$650 per logical port per month and
$2,000 per month for logical ports with
bulk quoting capabilities. For example,
if a User subscribes to seven logical
ports, it would pay $550 per port per
month for ports one through five and
6 A User on BATS Options is either a member of
BATS Options or a sponsored participant who is
authorized to obtain access to the Exchange’s
system pursuant to BATS Rule 11.3.
7 See Securities Exchange Act Release Nos. 65133
(August 15, 2011), 76 FR 52032 (August 19, 2011)
(SR–BATS–2011–029) and 65307 (September 9,
2011), 76 FR 57092 (September 15, 2011) (SR–
BATS–2011–034).
E:\FR\FM\16OCN1.SGM
16OCN1
]]>Agencies
[Federal Register Volume 80, Number 200 (Friday, October 16, 2015)]
[Notices]
[Pages 62584-62588]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-26336]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-76127; File No. SR-NYSE-2015-36]
Self-Regulatory Organizations; New York Stock Exchange LLC; Order
Approving Proposed Rule Change, Amending Section 907.00 of the Listed
Company Manual (the ``Manual'') To (i) Amend the Suite of Complimentary
Products and Services That Are Offered to Certain Current and Newly
Listed Companies, (ii) Update the Value of Complimentary Products and
Services Offered to Listed Companies, and (iii) Provide That
Complimentary Products and Services Would Also Be Offered to Companies
That Transfer Their Listing to the Exchange From Another National
Securities Exchange
October 9, 2015.
I. Introduction
On August 11, 2015, 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 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend section 907.00 of the listed company
manual (``Manual'') to amend the suite of complimentary products and
services that are offered to certain current and newly listed companies
and update the value of complimentary products and services offered to
listed companies. In addition, the proposal would separate companies
that transfer their listing to the Exchange from another national
securities exchange to a new category and expand the complimentary
products and services offered to such transfer companies. The proposed
rule change was published for comment in the Federal Register on August
25, 2015.\3\ No comment letters were received in response to the
Notice. This order approves the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 75740 (August 19,
2015), 80 FR 51617 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change
In December 2013, the Exchange adopted a rule to expand the suite
of complimentary products and services that it offers to certain
current and newly listed companies on the Exchange.\4\ Under this rule,
certain
[[Page 62585]]
companies currently listed on the Exchange (``Eligible Current
Listings'') are offered a suite of complimentary products and services
that vary depending on the number of shares of common stock or other
equity security that a company has outstanding. The Exchange presently
offers a suite of complimentary products and services to (i) any U.S.
company that lists common stock on the Exchange for the first time and
any non-U.S. company that lists an equity security on the Exchange
under Section 102.01 or 103.00 of the Manual for the first time,
regardless of whether such U.S. or non-U.S. company conducts an
offering and (ii) any U.S. or non-U.S. company emerging from a
bankruptcy, spinoff (where a company lists new shares in the absence of
a public offering), or carve-out (where a company carves out a business
line or division, which then conducts a separate initial public
offering) (collectively, ``Eligible New Listings''). Currently,
companies that transfer their listing to the Exchange are offered
complimentary products and services on the same terms as Eligible
Current Listings.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 70971 (Dec. 3,
2013), 78 FR 73905 (Dec. 9, 2013) (SR-NYSE-2013-68) (``December 2013
Approval Order'').
---------------------------------------------------------------------------
The Exchange proposes to amend Section 907.00 of the Manual to (i)
amend the suite of complimentary products and services that are offered
to Eligible Current Listings and Eligible New Listings, (ii) update the
value of complimentary products and services offered to such companies,
and (iii) provide that any U.S. or non-U.S. company that transfers its
listing of common stock or equity securities, respectively, to the
Exchange from another national securities exchange (``Eligible Transfer
Companies'') would be eligible to receive an enhanced package of
complimentary products and services comparable to the package offered
to Eligible New Listings, with the exception of corporate governance
tools.\5\
---------------------------------------------------------------------------
\5\ Eligible transfers currently receive complimentary products
and services, if eligible, under the ``currently listed issuers''
category.
---------------------------------------------------------------------------
The Exchange proposes to update the approximate commercial value of
the following offerings to Eligible Current Listings, Eligible New
Listings, and Eligible Transfer Companies: Market surveillance products
and services from $45,000 to $55,000 per annum, corporate governance
tools from $20,000 to $50,000 per annum, web-hosting products and
services from a range of $12,000-16,000 to $16,000 per annum, market
analytics products and services from $20,000 to $30,000 per annum, and
news distribution products and services from $10,000 to $20,000 per
annum. The Exchange also proposes to include web-casting services (with
a commercial value of approximately $6,500 annually) as a separate
category of complimentary products and services offered to certain
issuers.\6\ In addition, the Exchange proposes to add whistleblower
hotline services (with a commercial value of approximately $4,000
annually) to the list of services that it offers to all listed
companies for a period of 24 months. The whistleblower hotline services
will replace data room services and virtual investor relation tools
(with a commercial value of $15,000-$20,000) as complimentary products
offered to all listed issuers.
---------------------------------------------------------------------------
\6\ The web-hosting product offered by the Exchange provides
eligible issuers with a Web site containing business content that
can be viewed by investors. Web-casting services enable companies to
host interactive web-casts to communicate with investors. Eligible
companies will receive four interactive web-casts each year.
---------------------------------------------------------------------------
Currently, all listed issuers receive some complimentary products
and services through NYSE Market Access Center. The Exchange also
offers Eligible Current Listings a suite of products and services,
varying based on the number of shares such companies have issued and
outstanding. Eligible Current Listings that have at least 270 million
shares issued and outstanding (``Tier One Eligible Current Listing'')
are presently offered (i) a choice of market surveillance, corporate
governance tools and advisory services or market analytics products and
services and (ii) web-hosting products and services, on a complimentary
basis. Eligible Current Listings that have between 160 million and up
to 270 million shares issued and outstanding (``Tier Two Eligible
Current Listing'') are presently offered a choice of market analytics,
corporate governance tools, or web-hosting products and services. The
Exchange proposes to amend Section 907.00 to delete corporate
governance tools and advisory services from the suite of products
offered to a Tier One Eligible Current Listing and corporate governance
tools from the suite of products offered to a Tier Two Eligible Current
Listing. In both cases, the proposed rule replaces the deleted service
with web-casting products and services.
The Exchange currently offers Eligible New Listings different
products and services based on such companies' global market value.
Eligible New Listings with a global market value of $400 million or
more (each a ``Tier A Eligible New Listing'') are presently offered
web-hosting and news distribution products and services for a period of
24 months and either (i) market surveillance products and services for
a period of 12 calendar months from the date of listing or (ii) a
choice of market analytics products and services or corporate
governance tools for a period of 24 calendar months from the date of
listing. Eligible New Listings with a global market value of less than
$400 million (each a ``Tier B Eligible New Listing'') are presently
offered web-hosting and news distribution products and services for a
period of 24 months from the date of listing. The Exchange proposes to
amend Section 907.00 to offer 24 months each of market analytics,
market surveillance products, web-hosting, web-casting, corporate
governance tools, and news distribution products and services to Tier A
Eligible New Listings. Accordingly, the Exchange proposes to delete
text from Section 907.00 that discusses providing market surveillance
products and services for only 12 months, as well as the option for
continuing such services at the end of the initial 12 month period. The
proposed rule further amends Section 907.00 to offer 24 months of web-
casting, market analytics, and corporate governance tools to Tier B
Eligible New Listings, in addition to the currently-offered web-hosting
and news distribution products.
Pursuant to the proposed rule change, Eligible Transfer Companies
would be offered a package of complimentary products and services that
are similar to Eligible New Listings, with one exception.\7\ The one
difference between the packages is that the Exchange will not offer
corporate governance tools to Eligible Transfer Companies, while
Eligible New Listings will receive this service.
---------------------------------------------------------------------------
\7\ As noted above, the Exchange proposes to offer Eligible
Transfer Companies a package of complimentary products and services
comparable to the package that it offers to Eligible New Listings.
Therefore, the Exchange proposes to utilize the same metric, i.e.,
global market value, to determine eligibility for each designation
so as to avoid confusion. Currently, transfer companies may receive
complimentary products and services if they qualify to be designated
as an Eligible Current Listing, such designation being based on the
number of outstanding shares of a company's equity securities. Under
the proposed rule change, Eligible Transfer Companies with a global
market value of $400 million or more will be eligible to receive a
suite of complimentary products and services valued at $127,500 per
year for two years and Eligible Transfer Companies with a global
market value of less than $400 million will be eligible to receive a
suite of complimentary products and services valued at $72,500 per
year for two years.
---------------------------------------------------------------------------
Regarding the timing of complimentary products and services, the
proposed rule amends Section 907.00 to specify that if an Eligible New
Listing or Eligible Transfer Company
[[Page 62586]]
begins using a particular service within 30 days after the date of
listing, the complimentary period begins on such date of first use. In
all other instances, the complimentary period begins on the listing
date.
In addition to the foregoing, the Exchange proposes making several
changes to its rule to reflect a change in terminology. The proposed
rule change amends Section 907.00 to change the terms ``newly listed
issuer'' and ``currently listed issuers'' to ``Eligible New Listing''
and ``Eligible Current Listings,'' respectively. The Exchange also
proposes to amend Section 907.00 to include a definition of Eligible
Transfer Companies.\8\ Accordingly, since Eligible Transfer Companies
would be a separate category of issuer under the proposed rule, the
Exchange stated in its filing that it does not believe there could be
any inference that a transfer company would be included in the
definition of an Eligible New Listing. Therefore, the Exchange proposes
to delete the exception for companies that are transferring their
listing from another national securities exchange from the current
definition of newly listed issuers, which would be renamed Eligible New
Listing under the proposed rule.
---------------------------------------------------------------------------
\8\ For purposes of this Section 907.00, the term ``Eligible
Transfer Company'' means any U.S. or non-U.S. company that transfers
its listing of common stock or equity securities, respectively, to
the Exchange from another national securities exchange.
---------------------------------------------------------------------------
The Exchange also proposes to amend the first paragraph of Section
907.00 of the Manual to specify that it will offer certain
complimentary products and services, and access to discounted third-
party products and services through the NYSE Market Access Center to
both currently and newly listed issuers, whereas previously it stated
such services were only offered to currently listed issuers.
While the Exchange will implement the proposed rule upon approval,
any Eligible New Listing that listed on the Exchange prior to approval
of the proposed rule will continue to receive services under the terms
of the current rule. Therefore, for as long as any Eligible New Listing
is receiving services under the terms of Section 907.00 of the Manual
as currently in effect, the Exchange will maintain a link to such
section in the Introductory Note to Section 907.00.
With respect to Eligible Current Listings, to the extent that the
Exchange has already paid a third-party provider (prior to approval)
for corporate governance services to an Eligible Current Listing, such
complimentary service will continue until the payments run out. Once
any pre-approval payments run out, such services will be discontinued.
The Exchange expects all corporate governance services to Eligible
Current Listings to be completely discontinued no later than early
2016.
The specific products and services offered by the Exchange will be
developed by the Exchange or by third-party vendors. In its filing, the
Exchange represented that NYSE Governance Services \9\ will offer and
develop the corporate governance tools, but will not provide any other
service related to the proposed rule. NYSE Governance Services is an
entity that is owned by the Exchange's parent company that provides
corporate governance, risk and compliance services to its clients,
including companies listed on the Exchange. According to the Exchange,
companies that are offered these products are under no obligation to
accept them and a company's listing on the Exchange is not conditioned
upon acceptance of any product or service. Moreover, the Exchange
represents that, from time to time, companies elect to purchase
products and services from other vendors at their own expense rather
than accepting comparable products and services offered by the
Exchange.
---------------------------------------------------------------------------
\9\ In its filing, NYSE stated its belief that NYSE Governance
Services is not a ``facility'' of the Exchange as defined in 15
U.S.C. 78c(a)(2), and noted that its proposed rule change is being
filed with the Commission under Section 19(b)(2) of the Act because
it relates to services offered in connection with a listing on the
Exchange. See Notice supra note 3. The Commission notes that the
definition of a ``facility'' of an exchange is broad under the Act,
and ``includes its premises, tangible or intangible property whether
on the premises or not, any right to the use of such premises or
property or any service thereof for the purpose of effecting or
reporting a transaction on an exchange . . . and any right of the
exchange to the use of any property or service.'' The Commission
further notes that any determination as to whether a service or
other product is a facility of an exchange requires an analysis of
the particular facts and circumstances.
---------------------------------------------------------------------------
III. Discussion and Commission Findings
The Commission has carefully reviewed the proposed rule change and
finds that it is consistent with the requirements of Section 6 of the
Act.\10\ Specifically, the Commission finds that the proposal is
consistent with Sections 6(b)(4) \11\ and (5) of the Act \12\ in
particular, in that the proposed rule is designed to provide for the
equitable allocation of reasonable dues, fees, and other charges among
Exchange members, issuers, and other persons using the Exchange's
facilities, and is not designed to permit unfair discrimination between
customers, issuers, brokers or dealers. Moreover, the Commission
believes that the proposed rule change is consistent with 6(b)(8) of
the Act \13\ in that it does not impose any burden on competition not
necessary or appropriate in furtherance of the purposes of the Act.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f. 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).
\11\ 15 U.S.C. 78f(b)(4).
\12\ 15 U.S.C. 78f(b)(4) and (5).
\13\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
As described above, the Exchange proposes to alter the
complimentary products and services it offers companies. Specifically,
the Exchange proposes to (i) remove corporate governance tools and
advisory services for Tier One companies, (ii) remove corporate
governance tools for Tier Two companies, (iii) expand the services
provided to Tier A Eligible New Listings to include all of the services
listed, as described above, for a period of 24 months, not just provide
a choice of services, (iv) expand the services provided to Tier B
Eligible New Listings to include market analytics and corporate
governance tools, (v) offer Eligible Transfer Companies the same
products and services offered to Eligible New Listings, except for
corporate governance tools,\14\ (vi) provide web-casting to Tier One,
Tier Two, Tier A, and Tier B companies, and (vii) replace data room
services and virtual investor relation tools available to all issuers
annually with a whistleblower hotline for a period of 24 months.
---------------------------------------------------------------------------
\14\ Because the Exchange is proposing to offer Eligible
Transfer Companies a package of complimentary benefits similar to
the benefits offered to Eligible New Listings, the Exchange also
proposes using the same metric, i.e., global market value, to
determine eligibility for certain products and services.
---------------------------------------------------------------------------
The Commission believes that it is consistent with the Act for the
Exchange to revise the products and services it offers to companies.
The Exchange has represented that the corporate governance services are
not as helpful to more established companies as they are to newly
listed companies and that web-casting may be more useful to them.\15\
According to the Exchange, the corporate governance products currently
offered to Eligible Current Listings are in low demand. The Exchange
believes replacing such offerings with web-casting would be more
beneficial to listed companies who utilize this service in connection
with quarterly earnings releases. The Commission believes that, based
on NYSE's representations, replacing a little-
[[Page 62587]]
utilized service by companies already listed with one that could help
companies communicate better with shareholders is reasonable and
consistent with Section 6(b)(5) of the Act.
---------------------------------------------------------------------------
\15\ See Notice, supra note 3.
---------------------------------------------------------------------------
In addition, the Exchange believes that it is appropriate to expand
the suite of complimentary products and services it offers to Tier A
and Tier B Eligible New Listings, because such companies are listing on
the Exchange for the first time and frequently have greater needs with
respect to developing their corporate governance and shareholder
outreach capabilities.\16\ Moreover, the Exchange has represented that
it faces competition in the market for listing services.\17\ As part of
this competition, the Exchange seeks to entice Nasdaq-listed companies
to transfer their listing to the Exchange. The Exchange competes in
part by improving the quality of the services that it offers to listed
companies. NYSE believes that offering transfers from Nasdaq a similar
package to that currently offered to NYSE listed companies transferring
to Nasdaq, as well as new listings on Nasdaq, should enhance its
ability to compete for listings. According to the Exchange, by offering
products and services on a complimentary basis and ensuring that it is
offering the services most valued by its listed issuers, it improves
the quality of the services that listed companies receive.\18\
Accordingly, the Commission believes that the proposed rule reflects
the current competitive environment for exchange listings among
national securities exchanges, and is appropriate and consistent with
Section 6(b)(8) of the Act.\19\ Further, by extending the provision of
certain complementary services (as listed above) to Tier A and Tier B
Eligible New Listings to 24 months and by entitling Eligible Transfer
Companies to receive these products and services, other than corporate
governance tools, on similar terms as Eligible New Listings, the
proposed change enables the Exchange to better compete for new
listings.
---------------------------------------------------------------------------
\16\ See id.
\17\ See id.
\18\ See id.
\19\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
Moreover, the Commission believes that it is appropriate for the
Exchange to offer varying services to different categories of issuers.
The Commission has previously found that the tiers originally
established under the corporate products and services rule was
consistent with the Act.\20\ The Commission further found that the
changes approved in the December 2013 Approval Order expanding the
complimentary products and services offered to some tiers but not
others was also justified, in part, based on the different-sized
companies within each tier and the amount of services they needed.\21\
According to the Exchange, the current proposal to expand the products
and services available to Tier A and Tier B Eligible New Listings
should ease the transition of companies becoming public for the first
time.\22\ In addition, as stated by the Exchange, it competes with
Nasdaq for listings and further, that Nasdaq offers similar products
and services to new listings, including transfers.\23\
---------------------------------------------------------------------------
\20\ See Securities Exchange Act Release No. 65127 (Aug. 12,
2011), 76 FR 51449 (Aug. 18, 2011) (SR-NYSE-2011-20) (``Approval
Order''). In particular, the Approval Order states that while not
all issuers receive the same level of services, NYSE has stated that
trading volume and market activity are related to the level of
services that the listed companies would use in the absence of
complimentary arrangements. The Commission found, among other
things, that ``. . . the products and services and their commercial
value are equitably allocated among issuers consistent with Section
6(b)(4) of the Act, and the rule does not unfairly discriminate
between issuers consistent with Section 6(b)(5) of the Act.'' See
Approval Order, 76 FR at 51452.
\21\ See December 2013 Approval Order, supra note 4.
\22\ See Notice, supra note 3.
\23\ See id.
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As noted above, under the proposal, while newly listed companies
and transfers will receive similar services there is one exception
involving corporate governance tools (valued at $50,000) which newly
listed companies will receive but not transfers. NYSE argues that this
approach is consistent with the changes being proposed for currently
listed companies in that in the Exchange's experience these tools are
not as useful for already established companies and as a result are in
low demand by such listed companies. Based on these representations,
the Commission does not believe that the exception for transfers
violates the unfair discrimination standard under Section 6(b)(5) of
the Act and appears to provide equal treatment among established
companies, whether currently listed or transferring. The Commission
notes that all listed companies will continue to receive some level of
free services, including the addition of the whistleblower hotline
services being approved in this order. The Commission also notes that
within each tier all issuers receive the exact same package of
services. The approval of this proposal, including the updated dollar
values and specific services provided within each tier, will therefore
help to ensure that individual listed companies are not given specially
negotiated packages of products and services to list or remain listed
which would raise unfair discrimination issues under the Act. The
Commission also believes that it is reasonable, and in fact required by
Section 19(b) of the Act, that the Exchange amend its rule to update
the commercial values of the products it offers to Eligible Current
Listings, Eligible Transfer Companies, and Eligible New Listings.\24\
This provides greater transparency to Exchange's rules and the fees,
and the value of free products and services, applicable to listed
companies.
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\24\ We would expect the Exchange, consistent with Section 19(b)
of the Act, to periodically update the value of products and
services offered should they change. This would help to provide
transparency to listed companies on the value of the free services
they receive and the actual costs associated with listing on the
Exchange.
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The Commission also believes that it is consistent with the Act for
the Exchange to allow the complimentary period for a particular service
offered to Eligible New Listings and Eligible Transfer Companies to
begin on the date of first use if a company begins to use the service
within 30 days after the date of listing. According to the Exchange,
companies listing on the Exchange for the first time often require a
period of time after listing to complete the contracting and training
process with vendors providing the complimentary products and
services.\25\ Therefore, many companies are not able to begin using the
suite of products offered to them immediately on the date of
listing.\26\ The Commission notes that this proposed change is
substantially similar to Nasdaq Rule IM-5900-7, which also allows a
company to begin using services within 30 days of listing.\27\ As noted
in the Nasdaq Order, the Commission believes that this change would
provide only a short window of additional time to allow companies to
finalize their contracts for the complimentary products and services,
and that this additional time would only be available to companies that
have already determined to list on the Exchange.\28\
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\25\ See Notice, supra note 3.
\26\ See id.
\27\ See Securities Exchange Act Release No. 72669 (July 24,
2014), 79 FR 44234 (July 30, 2014) (approving Nasdaq-2014-058)
(``Nasdaq Order'').
\28\ The Commission expects the Exchange to track the start (and
end) date of each free service.
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Based on the factors noted above, the Commission continues to
believe that NYSE's products and services, and their commercial value,
are equitably allocated among issuers, consistent with Section 6(b)(4)
of the Act.\29\ The
[[Page 62588]]
Commission also continues to believe that the rule does not unfairly
discriminate between issuers, consistent with Section 6(b)(5) of the
Act.\30\ Finally, the Commission believes that the proposal does not
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act, consistent with Section 6(b)(8)
of the Act.\31\
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\29\ 15 U.S.C. 78f(b)(4).
\30\ 15 U.S.C. 78f(b)(5).
\31\ 15 U.S.C. 78f(b)(8).
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V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\32\ that the proposed rule change (SR-NYSE-2015-36), be, and
hereby is, approved.
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\32\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
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\33\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-26336 Filed 10-15-15; 8:45 am]
BILLING CODE 8011-01-P
