Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the NYSE Listed Company Manual To Adopt a Requirement That Listed Foreign Private Issuers Must, at a Minimum, Submit a Form 6-K to the Securities and Exchange Commission Containing Semi-Annual Unaudited Financial Information, 9563-9566 [2016-03962]
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Federal Register / Vol. 81, No. 37 / Thursday, February 25, 2016 / Notices
increased coverage under the inflation
provision.5
The Board expressed concern that a
unilateral increase to the SIPA limit
could have unintended consequences,
particularly in light of the issue not
having been widely studied or
discussed. For example, increasing the
SIPA limit above the deposit insurance
limit could incentivize the movement of
funds to brokerage accounts as a savings
vehicle, an outcome not consistent with
the intent of SIPA.
Finally, the Board considered the
amount by which the limit of protection
for allowed cash claims would change if
adjusted for inflation. Under SIPA
Section 78fff–3(e)(1)(B), if the Board
determines that an adjustment is
appropriate, then $250,000 is to be
multiplied by
[t]he ratio of the annual value of the Personal
Consumption Expenditures Chain-Type Price
Index (or any successor index thereto),
published by the Department of Commerce,
for the calendar year preceding the year in
which such determination is made, to the
published annual value of such index for the
calendar year preceding the year in which
this subsection was enacted.
mstockstill on DSK4VPTVN1PROD with NOTICES
15 U.S.C. 78fff–3(e)(1)(B).6 Although
the amount of the inflation adjustment
need only be considered if the Board
determines to adjust the $250,000 for
inflation, see SIPA Section 78fff–3(e)(1),
that determination would be
meaningless if the adjustment resulted
in no change. This was the case on
January 1, 2011, when application of the
formula would have increased the limit
to the adjusted amount of $254,449.52.7
However, under SIPA Section 78fff–
3(e)(2), because the adjusted amount
must be rounded down to the nearest
$10,000 if it is not a multiple of $10,000,
the limit would have remained at
$250,000. Even if it had determined to
5 12 U.S.C. 1821(a)(1)(F)(i)(I). See Deposit
Insurance Regulations; Permanent Increase in
Standard Coverage Amount; Advertisement of
Membership; International Banking; Foreign Banks,
75 FR 49363 n.6 (Aug. 13, 2010).
6 Under SIPA Sections 78fff–3(d) and 78fff–
3(e)(1), the Board was required to adjust the
maximum cash advance, if at all, after December 31,
2010, but no later than January 1, 2011, and then,
could do so every 5 years thereafter. Thus, the fiveyear period after January 1, 2011, would occur in
2016. Under SIPA Section 78fff–3(e)(4), any
adjustment to the amount of the cash advance
would take effect on January 1 of the year
immediately after the year in which the adjustment
was made.
7 The calculation would be as follows: $250,000
multiplied by 1.017798—the ratio of 111.112 (the
annual value of the Price Index published by the
Department of Commerce for 2010, the calendar
year preceding the year in which the determination
was to be made), to 109.169 (the published annual
value of such index for 2009, the calendar year
preceding the year in which the subsection was
enacted)—equals $254,449.52.
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18:07 Feb 24, 2016
Jkt 238001
do so, the Board could not have
adjusted the amount.
Conclusion
A present-day application of the
formula would increase the limit by
$20,000.8 The Board weighed the
relevant factors against a potential
adjustment of $20,000. The Board
concluded that, on balance, in light of
the unprecedented break with the FDIC
limit that would result, with possibly
harmful consequences, and the absence
of evidence that an appreciable number
of investors would be benefitted, an
adjustment to the limit of protection for
cash claims was not appropriate.
Accordingly, the Board determined that
the standard maximum cash advance
amount should remain at $250,000 per
customer.’’
*
*
*
*
*
II. Date of Effectiveness and Timing for
Commission Action
Within thirty-five days of the date of
publication of this notice of the SIPC
Board’s determination in the Federal
Register, or within such longer period
(i) as the Commission may designate of
not more than ninety days after such
date if it finds such longer period to be
appropriate and publishes its reasons
for so finding or (ii) as to which SIPC
consents, the Commission shall:
(A) By order approve such
determination or
(B) Institute proceedings to determine
whether such determination should be
disapproved.
III. Notice of the Determination of the
SIPC Board Not To Adjust the Standard
Maximum Cash Advance Amount for
Inflation
Effective January 1, 2016, the Board of
Directors of the Securities Investor
Protection Corporation determined that
an inflation adjustment to the standard
8 The $20,000 is arrived at as follows: $250,000
multiplied by 1.08763 which is the ratio of 108.763
(the annual value of the Price Index published by
the Department of Commerce for calendar year
2014), to 100.000 (the published annual value of the
index for 2009, the calendar year preceding the year
in which subsection 78fff–3(e)(1)(B) was enacted)
which equals $271,907.50. Rounded down to
$270,000, the adjusted limit reflects an increase of
$20,000 from the $250,000 limit. Because the
determination is to be made for the calendar year
2016, the annual value of the Price Index to be used
is for the ‘‘calendar year preceding the year in
which such determination is made,’’ namely, the
year 2015. However, the 2015 annual value was not
available until after the end of the year. This
calculation therefore was conditioned on the
assumption of no unexpected dramatic rise in
inflation in calendar year 2015. See https://
www.bea.gov/iTable/iTable.cfm?ReqID
=9&step=1#reqid=9&step=3&isuri
=1&904=2009&903=64&906=a&905
=2015&910=x&911=0.
PO 00000
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9563
maximum cash advance amount, as
defined in section 9(d) of the Securities
Investor Protection Act, 15 U.S.C. 78fff–
3(d), would not be appropriate for the
five-year period beginning on January 1,
2017. Accordingly, the Board
determined that the standard maximum
cash advance amount should remain at
$250,000 per customer, effective January
1, 2017 and for the five years
immediately thereafter.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Dated: February 22, 2016.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–04022 Filed 2–24–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77198; File No. SR–NYSE–
2016–12]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Amending the
NYSE Listed Company Manual To
Adopt a Requirement That Listed
Foreign Private Issuers Must, at a
Minimum, Submit a Form 6–K to the
Securities and Exchange Commission
Containing Semi-Annual Unaudited
Financial Information
February 19, 2016.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’),2 and Rule 19b–4 thereunder,3
notice is hereby given that on February
5, 2016, New York Stock Exchange LLC
(‘‘NYSE’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
NYSE Listed Company Manual (the
‘‘Manual’’) to adopt a requirement that
listed foreign private issuers must, at a
minimum, submit a Form 6–K to the
Securities and Exchange Commission
(‘‘SEC’’) containing semi-annual
9 17
CFR 200.30–3(f)(3).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
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Federal Register / Vol. 81, No. 37 / Thursday, February 25, 2016 / Notices
unaudited financial information.4 The
proposed rule change is available on the
Exchange’s Web site at www.nyse.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
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
mstockstill on DSK4VPTVN1PROD with NOTICES
1. Purpose
The Exchange proposes to amend the
Manual to adopt a requirement that
listed foreign private issuers must, at a
minimum, submit a Form 6–K to the
SEC containing semi-annual unaudited
financial information.
Any listed company that is a domestic
issuer is required by SEC rules to file a
quarterly report on Form 10–Q within a
specified period after the end of each of
the company’s first, second and third
fiscal quarters. The Form 10–Q contains
unaudited financial information with
respect to the most recently completed
fiscal quarter. However, listed
companies that are foreign private
issuers 5 are not subject to any
comparable SEC requirement with
respect to interim financial reporting.6
4 See footnote 6 below for a description of
information that foreign private issuers are
currently required to furnish to the SEC on a Form
6–K under the provisions of General Instruction B
to Form 6–K.
5 Exchange Act Rule 3b–4 defines a foreign
private issuer as any issuer incorporated or
organized under the laws of a foreign country,
except an issuer meeting both of the following
conditions: (i) More than 50 percent of the
outstanding voting securities of the issuer are
directly or indirectly held of record by residents of
the United States; and (ii) any one of the following:
(a) the majority of the executive officers or directors
of the issuer are United States citizens or residents;
or (b) more than 50 percent of the assets of the
issuer are located in the United States; or (c) the
business of the issuer is administered principally in
the United States.
6 The Exchange notes that General Instruction B
to Form 6–K requires foreign private issuers to
furnish on a Form 6–K whatever information, not
required to be furnished on Form 40–F or
previously furnished, such issuer (i) makes or is
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18:07 Feb 24, 2016
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The Exchange understands that
financial reporting practices in other
countries may differ from those in the
United States and that it is often not the
case that foreign companies issue
interim financial information on a
quarterly basis. However, it is the
Exchange’s experience that almost all
listed foreign private issuers issue
interim financial information on at least
a semi-annual basis. The Exchange
believes that this practice is essential for
the protection of investors, as annual
financial disclosure is too infrequent to
enable investors to make informed
investment decisions, especially as that
information ages in the latter part of the
disclosure cycle.
Given the importance of the practice
of foreign private issuer listed
companies reporting mid-year results,
the Exchange believes that it is desirable
to make this practice mandatory. Doing
so will ensure that the practice is
uniform among all listed foreign private
issuers and also enables the Exchange to
apply its compliance procedures for
companies that are late in their periodic
reporting to listed foreign private issuers
that fail to disclose semi-annual
financial information on a timely basis.
Consequently, the Exchange proposes
to adopt new Section 203.03 of the
Manual which would provide that each
listed foreign private issuer must, at a
minimum, submit to the SEC a Form 6–
K that includes (i) an interim balance
sheet as of the end of its second fiscal
quarter and (ii) a semi-annual income
statement that covers its first two fiscal
quarters. This Form 6–K would be
required to be submitted no later than
six months following the end of the
company’s second fiscal quarter. The
required to make public pursuant to the law of the
jurisdiction of its domicile or in which it is
incorporated or organized, or (ii) files or is required
to file with a stock exchange on which its securities
are traded and which was made public by that
exchange, or (iii) distributes or is required to
distribute to its security holders. The information
required to be furnished pursuant to (i), (ii) or (iii)
above is that which is material with respect to the
issuer and its subsidiaries concerning: Changes in
business; changes in management or control;
acquisitions or dispositions of assets; bankruptcy or
receivership; changes in registrant’s certifying
accountants; the financial condition and results of
operations; material legal proceedings; changes in
securities or in the security for registered securities;
defaults upon senior securities; material increases
or decreases in the amount outstanding of securities
or indebtedness; the results of the submission of
matters to a vote of security holders; transactions
with directors, officers or principal security
holders; the granting of options or payment of other
compensation to directors or officers; and any other
information which the registrant deems of material
importance to security holders. As a result of (i)
through (iii) above, foreign private issuers could be
required to provide the information required under
proposed Section 203.03 of the Manual more
frequently than semi-annually.
PO 00000
Frm 00146
Fmt 4703
Sfmt 4703
financial information included in the
Form 6–K would be required to be
presented in English, but would not be
required to be reconciled to U.S. GAAP.
The Exchange’s intention in adopting
proposed Section 203.03 is solely to
establish a minimum interim reporting
regime applicable to all listed foreign
private issuers. The Exchange is not
seeking to discourage companies from
providing more expansive or more
frequent interim financial information
and proposed Section 203.03 would not
relieve companies of the obligation to
comply with any reporting obligations
they may have under the requirements
of Form 6–K or home country law or
regulation. In addition, the Exchange
proposes to amend Section 802.01E of
the Manual to subject listed foreign
private issuers that have not timely filed
the required Form 6–K to the same
compliance procedures as are applied to
listed companies that are late in filing
their annual report or Form 10–Q. A
failure to file the required Form 6–K
within the period specified by proposed
Section 203.03 would constitute a Late
Filing Delinquency under Section
802.01E. As with any other Late Filing
Delinquency under that rule, a company
that was delayed in filing its Form 6–K
would have an initial six months
compliance period within which to file
the Form 6–K and any subsequently due
Form 20–F or Form 6–K. If the company
did not file all required filings during
that initial six month period, Exchange
staff would have the discretion to
provide an additional compliance
period of up to six months. Any
company that failed to become timely
with its filing obligations within the
compliance periods provided under the
rule (including, in the case of a
company that receives the maximum 12month cure period, the Form 6–K
including the semi-annual data for the
first six months of the subsequent fiscal
year) would be subject to delisting.
The Exchange proposes to make
Section 203.03 effective beginning with
any fiscal year beginning on or after July
1, 2015. This means that the earliest
semi-annual period with respect to
which a company would be required to
furnish a Form 6–K under the proposed
rule would have ended on December 31,
2015.7
The Exchange also proposes to amend
Section 103.00 of the Manual to clarify
that, notwithstanding the provision in
that section that allows listed foreign
private issuers to follow home country
7 The Commission notes that this means that the
any listed company would have at least until June
30, 2016 to file the Form 6–K, with the required
semi-annual data, under the new rule.
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Federal Register / Vol. 81, No. 37 / Thursday, February 25, 2016 / Notices
practice in lieu of complying with the
Exchange’s interim reporting
requirements applicable to domestic
companies, all listed foreign private
issuers will be required to disclose
interim financial information in a Form
6–K on a semi-annual basis in
compliance with proposed Section
203.03.
mstockstill on DSK4VPTVN1PROD with NOTICES
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) 8 of the Act, in general, and
furthers the objectives of Section 6(b)(5)
of the Act,9 in particular in that it is
designed to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest and is
not designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers. The
Exchange believes that the proposed
amendment is consistent with the
investor protection objectives of Section
6(b)(5) because it is designed to ensure
that listed companies provide timely
financial information that is necessary
to enable investors to make informed
investment decisions. The Exchange
believes that the proposed amendment
does not unfairly discriminate among
issuers, as, while it establishes a semiannual reporting requirement for foreign
private issuers that is different from the
quarterly reporting to which domestic
issuers are subject, this difference is
consistent with the differential
requirements imposed by the SEC. In
addition, while a small number of
companies will have less than six
months from the date of effectiveness of
the proposed rule to submit their first
required semi-annual report, the
Exchange does not believe that this is
unfairly discriminatory as the period
available to those companies will not be
significantly less than six months and
will be adequate to enable them to meet
the proposed [sic].
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purpose of the Act. The proposed
rule change is designed to mandate that
foreign private issuer listed companies
must, at a minimum, provide semiannual financial information. As almost
all NYSE-listed foreign private issuers
already provide this information and
Nasdaq listed companies are already
subject to a comparable rule, the
Exchange does not expect the rule
change to have any significant impact
on competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 10 and Rule
19b–4(f)(6) thereunder.11 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 12 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b4(f)(6)(iii),13 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposal may become operative
immediately upon filing. The Exchange
stated that requiring semi-annual
reporting of summary financial
information by listed foreign private
issuers is consistent with the protection
of investors and the public interest since
it will ensure that investors have access
to information that is necessary for them
to make informed decisions about
investments in those companies. The
Commission believes that the proposed
rule change will not be unduely
10 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
12 17 CFR 240.19b–4(f)(6).
13 17 CFR 240.19b–4(f)(6)(iii).
11 17
8 15
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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9565
burdensome on foreign private issuers
as the Exchange states in its filing that
most, if not all, effected companies
already provide such information on a
voluntary basis. Therefore, the
Commission believes that the new rule
should help to ensure that investors will
have, or continue to have, the necessary
information to make informed
investments decisions for all listed
foreign private issuers. In addition,
concerning the proposed changes on
continued listing for filing
delinquencies under Section 802.01E of
the Manual, treating Exchange listed
foreign private issuers that fail to timely
file semi-annual reports under the new
rule similarly to listed domestic issuers
that fail to file timely interim reports
will help to ensure that investors have
information necessary to assess the
company and support continued trading
on the Exchange.14 Based on the above,
the Commission believes that waiving
the 30-day operative delay is consistent
with the protection of investors and the
public interest. Therefore, the
Commission hereby waives the
operative delay and designates the
proposed rule change operative upon
filing.15
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 16 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
14 See NYSE Listed Company Manual Section
802.01E.
15 For the purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
16 15 U.S.C. 78s(b)(2)(B).
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Federal Register / Vol. 81, No. 37 / Thursday, February 25, 2016 / Notices
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSE–2016–12 on the subject line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
[Release No. 34–77181; File No. SR–EDGX–
2016–03]
• 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–2016–12. 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 Web site (https://www.sec.gov/
rules/sro.shtml). 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 Web site 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
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–NYSE–
2016–12 and should be submitted on or
before March 17, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Brent J. Fields,
Secretary.
[FR Doc. 2016–03962 Filed 2–24–16; 8:45 am]
mstockstill on DSK4VPTVN1PROD with NOTICES
BILLING CODE 8011–01–P
Self-Regulatory Organizations; EDGX
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change to Rules 8.15, Imposition
of Fines for Minor Violation(s) of Rules,
and 25.3, Penalty for Minor Rule
Violations, Amending the Exchange’s
Minor Rule Violation Plan
February 19, 2016.
Pursuant to 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 February
10, 2016, EDGX Exchange, Inc. (‘‘EDGX’’
or the ‘‘Exchange’’) 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
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is proposing to amend
Rules 8.15 and 25.3 to amend the
Exchange’s Minor Rule Violation Plan.
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.
1 15
17 17
CFR 200.30–3(a)(12).
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18:07 Feb 24, 2016
2 17
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PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00148
Fmt 4703
Sfmt 4703
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Rule 8.15 applicable to the Exchange’s
equity platform (‘‘EDGX Equities’’) to
remove the $2,500 penalty limitation
contained in Rule 8.15(a) in order to
modify the permissible penalties for
minor rule violations with respect to
Rule 25.3 applicable to the EDGX
options platform (‘‘EDGX Options’’) and
to allow the Exchange the discretion to
impose penalties in excess of $2,500
under both the EDGX Equities and
EDGX Options Minor Rule Violation
Plans. The proposal further provides
that only fines that do not exceed $2,500
will not be reported. Fines that exceed
$2,500 will continue to be publicly
reported by the Exchange 3 and reported
as final in compliance with SEC Rule
19d–1(c).4
Further, the Exchange proposes to
amend the EDGX Options Minor Rule
Violation Plan penalty schedule
contained in Rule 25.3(d)—for
violations of Rule 22.6(d) regarding
Market Makers maintaining continuous
bids and offers—to aggregate violations
of Rule 22.6(d) that occur in a single
month of a rolling 24-month period and
sanction such aggregated violations as a
single offense. The proposed amended
penalty schedule is substantially similar
to International Securities Exchange
(‘‘ISE’’) Rule 1614(d)(11) Minor Rule
Violation Plan penalties for continuous
options quotation violations. In addition
to these changes, the Exchange proposes
to make minor non-substantive changes
to conform to the Rules of BATS
Exchange, Inc., specifically by
capitalizing the term ‘‘rule’’ in Rule 8.15
and by adding the words ‘‘and Policy’’
to Interpretation and Policy .01.
Removal of Penalty Limitation
Rule 25.3 states that the Exchange
may proceed under the Minor Rule
Violation Plan pursuant to the
procedures set forth in Rule 8.15
applicable to EDGX Equities. Currently,
Rule 8.15(a) states that the Exchange
may impose a fine ‘‘not to exceed
$2,500’’ for a minor rule violation.
Because existing Rule 25.3 recommends
the imposition of penalties in excess of
$2,500 in certain circumstances, the
3 As set forth in Interpretation and Policy .01 to
Rule 8.11, except as provided in Rule 8.15(a), the
staff shall cause details regarding all formal
disciplinary actions where a final decision has been
issued to be published on a Web site maintained by
the Exchange.
4 17 CFR 240.19d–1(c).
E:\FR\FM\25FEN1.SGM
25FEN1
]]>Agencies
[Federal Register Volume 81, Number 37 (Thursday, February 25, 2016)]
[Notices]
[Pages 9563-9566]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-03962]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77198; File No. SR-NYSE-2016-12]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Amending the NYSE Listed Company Manual To Adopt a Requirement That
Listed Foreign Private Issuers Must, at a Minimum, Submit a Form 6-K to
the Securities and Exchange Commission Containing Semi-Annual Unaudited
Financial Information
February 19, 2016.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on February 5, 2016, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the NYSE Listed Company Manual (the
``Manual'') to adopt a requirement that listed foreign private issuers
must, at a minimum, submit a Form 6-K to the Securities and Exchange
Commission (``SEC'') containing semi-annual
[[Page 9564]]
unaudited financial information.\4\ The proposed rule change is
available on the Exchange's Web site at www.nyse.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
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\4\ See footnote 6 below for a description of information that
foreign private issuers are currently required to furnish to the SEC
on a Form 6-K under the provisions of General Instruction B to Form
6-K.
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the Manual to adopt a requirement
that listed foreign private issuers must, at a minimum, submit a Form
6-K to the SEC containing semi-annual unaudited financial information.
Any listed company that is a domestic issuer is required by SEC
rules to file a quarterly report on Form 10-Q within a specified period
after the end of each of the company's first, second and third fiscal
quarters. The Form 10-Q contains unaudited financial information with
respect to the most recently completed fiscal quarter. However, listed
companies that are foreign private issuers \5\ are not subject to any
comparable SEC requirement with respect to interim financial
reporting.\6\ The Exchange understands that financial reporting
practices in other countries may differ from those in the United States
and that it is often not the case that foreign companies issue interim
financial information on a quarterly basis. However, it is the
Exchange's experience that almost all listed foreign private issuers
issue interim financial information on at least a semi-annual basis.
The Exchange believes that this practice is essential for the
protection of investors, as annual financial disclosure is too
infrequent to enable investors to make informed investment decisions,
especially as that information ages in the latter part of the
disclosure cycle.
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\5\ Exchange Act Rule 3b-4 defines a foreign private issuer as
any issuer incorporated or organized under the laws of a foreign
country, except an issuer meeting both of the following conditions:
(i) More than 50 percent of the outstanding voting securities of the
issuer are directly or indirectly held of record by residents of the
United States; and (ii) any one of the following: (a) the majority
of the executive officers or directors of the issuer are United
States citizens or residents; or (b) more than 50 percent of the
assets of the issuer are located in the United States; or (c) the
business of the issuer is administered principally in the United
States.
\6\ The Exchange notes that General Instruction B to Form 6-K
requires foreign private issuers to furnish on a Form 6-K whatever
information, not required to be furnished on Form 40-F or previously
furnished, such issuer (i) makes or is required to make public
pursuant to the law of the jurisdiction of its domicile or in which
it is incorporated or organized, or (ii) files or is required to
file with a stock exchange on which its securities are traded and
which was made public by that exchange, or (iii) distributes or is
required to distribute to its security holders. The information
required to be furnished pursuant to (i), (ii) or (iii) above is
that which is material with respect to the issuer and its
subsidiaries concerning: Changes in business; changes in management
or control; acquisitions or dispositions of assets; bankruptcy or
receivership; changes in registrant's certifying accountants; the
financial condition and results of operations; material legal
proceedings; changes in securities or in the security for registered
securities; defaults upon senior securities; material increases or
decreases in the amount outstanding of securities or indebtedness;
the results of the submission of matters to a vote of security
holders; transactions with directors, officers or principal security
holders; the granting of options or payment of other compensation to
directors or officers; and any other information which the
registrant deems of material importance to security holders. As a
result of (i) through (iii) above, foreign private issuers could be
required to provide the information required under proposed Section
203.03 of the Manual more frequently than semi-annually.
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Given the importance of the practice of foreign private issuer
listed companies reporting mid-year results, the Exchange believes that
it is desirable to make this practice mandatory. Doing so will ensure
that the practice is uniform among all listed foreign private issuers
and also enables the Exchange to apply its compliance procedures for
companies that are late in their periodic reporting to listed foreign
private issuers that fail to disclose semi-annual financial information
on a timely basis.
Consequently, the Exchange proposes to adopt new Section 203.03 of
the Manual which would provide that each listed foreign private issuer
must, at a minimum, submit to the SEC a Form 6-K that includes (i) an
interim balance sheet as of the end of its second fiscal quarter and
(ii) a semi-annual income statement that covers its first two fiscal
quarters. This Form 6-K would be required to be submitted no later than
six months following the end of the company's second fiscal quarter.
The financial information included in the Form 6-K would be required to
be presented in English, but would not be required to be reconciled to
U.S. GAAP. The Exchange's intention in adopting proposed Section 203.03
is solely to establish a minimum interim reporting regime applicable to
all listed foreign private issuers. The Exchange is not seeking to
discourage companies from providing more expansive or more frequent
interim financial information and proposed Section 203.03 would not
relieve companies of the obligation to comply with any reporting
obligations they may have under the requirements of Form 6-K or home
country law or regulation. In addition, the Exchange proposes to amend
Section 802.01E of the Manual to subject listed foreign private issuers
that have not timely filed the required Form 6-K to the same compliance
procedures as are applied to listed companies that are late in filing
their annual report or Form 10-Q. A failure to file the required Form
6-K within the period specified by proposed Section 203.03 would
constitute a Late Filing Delinquency under Section 802.01E. As with any
other Late Filing Delinquency under that rule, a company that was
delayed in filing its Form 6-K would have an initial six months
compliance period within which to file the Form 6-K and any
subsequently due Form 20-F or Form 6-K. If the company did not file all
required filings during that initial six month period, Exchange staff
would have the discretion to provide an additional compliance period of
up to six months. Any company that failed to become timely with its
filing obligations within the compliance periods provided under the
rule (including, in the case of a company that receives the maximum 12-
month cure period, the Form 6-K including the semi-annual data for the
first six months of the subsequent fiscal year) would be subject to
delisting.
The Exchange proposes to make Section 203.03 effective beginning
with any fiscal year beginning on or after July 1, 2015. This means
that the earliest semi-annual period with respect to which a company
would be required to furnish a Form 6-K under the proposed rule would
have ended on December 31, 2015.\7\
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\7\ The Commission notes that this means that the any listed
company would have at least until June 30, 2016 to file the Form 6-
K, with the required semi-annual data, under the new rule.
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The Exchange also proposes to amend Section 103.00 of the Manual to
clarify that, notwithstanding the provision in that section that allows
listed foreign private issuers to follow home country
[[Page 9565]]
practice in lieu of complying with the Exchange's interim reporting
requirements applicable to domestic companies, all listed foreign
private issuers will be required to disclose interim financial
information in a Form 6-K on a semi-annual basis in compliance with
proposed Section 203.03.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) \8\ of the Act, in general, and furthers the
objectives of Section 6(b)(5) of the Act,\9\ in particular in that it
is designed to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest
and is not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers. The Exchange believes that the proposed
amendment is consistent with the investor protection objectives of
Section 6(b)(5) because it is designed to ensure that listed companies
provide timely financial information that is necessary to enable
investors to make informed investment decisions. The Exchange believes
that the proposed amendment does not unfairly discriminate among
issuers, as, while it establishes a semi-annual reporting requirement
for foreign private issuers that is different from the quarterly
reporting to which domestic issuers are subject, this difference is
consistent with the differential requirements imposed by the SEC. In
addition, while a small number of companies will have less than six
months from the date of effectiveness of the proposed rule to submit
their first required semi-annual report, the Exchange does not believe
that this is unfairly discriminatory as the period available to those
companies will not be significantly less than six months and will be
adequate to enable them to meet the proposed [sic].
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purpose of the Act. The proposed rule change is
designed to mandate that foreign private issuer listed companies must,
at a minimum, provide semi-annual financial information. As almost all
NYSE-listed foreign private issuers already provide this information
and Nasdaq listed companies are already subject to a comparable rule,
the Exchange does not expect the rule change to have any significant
impact on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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\10\ 15 U.S.C. 78s(b)(3)(A)(iii).
\11\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\13\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Exchange stated that
requiring semi-annual reporting of summary financial information by
listed foreign private issuers is consistent with the protection of
investors and the public interest since it will ensure that investors
have access to information that is necessary for them to make informed
decisions about investments in those companies. The Commission believes
that the proposed rule change will not be unduely burdensome on foreign
private issuers as the Exchange states in its filing that most, if not
all, effected companies already provide such information on a voluntary
basis. Therefore, the Commission believes that the new rule should help
to ensure that investors will have, or continue to have, the necessary
information to make informed investments decisions for all listed
foreign private issuers. In addition, concerning the proposed changes
on continued listing for filing delinquencies under Section 802.01E of
the Manual, treating Exchange listed foreign private issuers that fail
to timely file semi-annual reports under the new rule similarly to
listed domestic issuers that fail to file timely interim reports will
help to ensure that investors have information necessary to assess the
company and support continued trading on the Exchange.\14\ Based on the
above, the Commission believes that waiving the 30-day operative delay
is consistent with the protection of investors and the public interest.
Therefore, the Commission hereby waives the operative delay and
designates the proposed rule change operative upon filing.\15\
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\12\ 17 CFR 240.19b-4(f)(6).
\13\ 17 CFR 240.19b-4(f)(6)(iii).
\14\ See NYSE Listed Company Manual Section 802.01E.
\15\ For the purposes only of waiving the 30-day operative
delay, the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \16\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\16\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
[[Page 9566]]
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSE-2016-12 on the subject line.
Paper Comments
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-2016-12. 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 Web site (https://www.sec.gov/rules/sro.shtml). 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 Web site 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
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSE-2016-12 and should be
submitted on or before March 17, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-03962 Filed 2-24-16; 8:45 am]
BILLING CODE 8011-01-P
