Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change To Amend the Listed Company Manual To Adopt Initial and Continued Listing Standards for Subscription Receipts, 32413-32415 [2017-14669]

Download as PDF Federal Register / Vol. 82, No. 133 / Thursday, July 13, 2017 / Notices 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–ISE– 2017–62, and should be submitted on or before August 3, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.30 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–14664 Filed 7–12–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–81102; File No. SR–NYSE– 2017–31] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change To Amend the Listed Company Manual To Adopt Initial and Continued Listing Standards for Subscription Receipts sradovich on DSK3GMQ082PROD with NOTICES July 7, 2017. 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 on June, 26, 2017, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘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. 30 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 17:41 Jul 12, 2017 Jkt 241001 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the Listed Company Manual (the ‘‘Manual’’) to adopt initial and continued listing standards for subscription receipts. 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to adopt initial and continued listing standards for the listing of subscription receipts (‘‘Subscription Receipts’’). Subscription Receipts are a financing technique that has been used for many years by Canadian public companies. Typically, Canadian companies use Subscription Receipts as a means of providing cash consideration in merger or acquisition transactions. Subscription Receipts are sold in a public offering that occurs after the execution of an acquisition agreement. The proceeds of the Subscription Receipt offering are held in a custody account and, if the related acquisition closes, the Subscription Receipt holders receive a specified number of shares of the issuer. If the acquisition does not close, then the Subscription Receipts are redeemed for their original purchase price plus any interest accrued on the custody account. The benefit of Subscription Receipts to the issuer is that they provide a contingent form of financing that only becomes permanent if the acquisition is completed. By contrast, a company financing the cash consideration for an acquisition by means of a traditional equity or debt offering is at risk of having incurred unnecessary dilution of its shareholders PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 32413 or indebtedness if the related acquisition fails to close. Subscription Receipts provide investors with flexibility to elect to invest in the postmerger company and not in the company in its pre-merger form. A number of Canadian issuers whose common stock is listed on the Exchange have approached the Exchange in recent years about the possibility of duallylisting on the Exchange Subscription Receipts that they planned to list in Canada. More recently, market participants have also inquired about the possibility of the use of Subscription Receipts as a fundraising alternative for U.S. domestic issuers. As a result of this interest, the Exchange is now proposing to adopt proposed Section 102.08 of the Manual as a listing standard for Subscription Receipts. The Exchange will list Subscription Receipts pursuant to proposed Section 102.08 only if they meet the following requirements: (a) The issuer must be an NYSE listed company that is not currently noncompliant with any applicable continued listing standard. (b) The proceeds of the Subscription Receipts offering are designated solely for use in connection with the consummation of a specified acquisition that is the subject of a binding acquisition agreement (the ‘‘Specified Acquisition’’). (c) The proceeds of the Subscription Receipts offering will be held in an interest-bearing custody account by an independent custodian. (d) The Subscription Receipts will promptly be redeemed for cash (i) at any time the Specified Acquisition is terminated, or (ii) if the Specified Acquisition does not close within twelve months from the date of issuance of the Subscription Receipts, or such earlier time as is specified in the operative agreements. If the Subscription Receipts are redeemed, the holders will receive cash payments equal to their proportion share of the funds in the custody account, including any interest earned on those funds. (e) If the Specified Acquisition is consummated, the holders of the Subscription Receipts will receive the shares of common stock for which their Subscription Receipts are exchangeable. (f) At the time of initial listing, the Subscription Receipts must have a price per share of at least $4.00, a minimum total market value of publicly-held shares of $100 million, 1,100,000 E:\FR\FM\13JYN1.SGM 13JYN1 sradovich on DSK3GMQ082PROD with NOTICES 32414 Federal Register / Vol. 82, No. 133 / Thursday, July 13, 2017 / Notices publicly-held shares 3 and 400 holders of round lots (i.e., 100 securities). (g) The sale of the Subscription Receipts and the issuance of the common stock of the issuer in exchange for the Subscription Receipts must both be registered under the Securities Act. The Exchange proposes to amend Section 802.01B to include continued listing standards applicable to Subscription Receipts listed under proposed Section 102.08. The Exchange will consider initiating suspension and delisting procedures when the number of publicly-held shares is less than 100,000 or the number of holders is less than 100. In addition, Subscription Receipts will be subject to immediate suspension and delisting if (i) the total market capitalization of the Subscription Receipts is below $15 million over 30 consecutive trading days (ii) the related common equity security ceases to be listed or (iii) the issuer announces that the Specified Acquisition has been terminated. An issuer of Subscription Receipts will not be eligible to follow the procedures outlined in Section 802.01 [sic] with respect to these criteria, and any such security will be subject to delisting procedures as set forth in Section 804. In addition to the foregoing, Subscription Receipts will be subject to potential delisting for all of the reasons generally applicable to operating companies under Section 802.01. The Exchange notes that an issuer of Subscription Receipts may be subject to delisting at the time of closing of the related acquisition pursuant to the ‘‘backdoor listing’’ provisions of Section 703.08(E) of the Manual. The Exchange proposes to amend Section 202.06 of the Manual to provide that whenever it halts trading in a security of a listed company pending dissemination of material news or implements any other required regulatory trading halt, the Exchange will also halt trading in any listed Subscription Receipt that is exchangeable by its terms into the common stock of such company. The Exchange will monitor activity in Subscription Receipts to identify and deter any potential improper trading activity in such securities and will adopt enhanced surveillance procedures to enable it to monitor Subscription Receipts alongside the common equity securities into which they are convertible. Additionally, the Exchange 3 For purposes of the initial and continued listing requirements for Subscription Receipts, shares held by directors, officers, or their immediate families and other concentrated holdings of 10 percent or more are excluded in calculating the number of publicly-held shares. VerDate Sep<11>2014 17:41 Jul 12, 2017 Jkt 241001 will rely on its existing trading surveillances, administered by the Exchange, or the Financial Industry Regulatory Authority (‘‘FINRA’’) on behalf of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws.4 Section 902.06 of the Manual sets forth listing fees for ‘‘short-term’’ securities, i.e., securities with a life of seven years or less. As Subscription Receipts listed under proposed Section 102.08 would have a maximum life of 12 months, they would fall under Section 802.01B by its terms. For the avoidance of doubt, the Exchange proposes to amend Section 902.06 to make it explicit that it will apply to Subscription Receipts. The Exchange also proposes to amend Section 902.06 to remove a reference to the annual fees charged prior to January 1, 2017, as that reference is now irrelevant. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Exchange Act,5 in general, and furthers the objectives of Section 6(b)(5) of the Exchange Act,6 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 listing standard is consistent with Section 6(b)(5) of the Exchange Act in that it contains requirements in relation to the listing of Subscription Receipts that provide adequate protections for investors and the public interest. In particular, the Exchange believes that investors are significantly protected by the requirements in the proposed rule that: (i) The proceeds of the Subscription Receipt offering must be held in an interest-bearing custody account controlled by an independent custodian pending consummation of the Specified Acquisition, (ii) the custody 4 FINRA conducts cross-market surveillances on behalf of the Exchange pursuant to a regulatory services agreement. The Exchange is responsible for FINRA’s performance under this regulatory services agreement. 5 15 U.S.C. 78f(b). 6 15 U.S.C. 78f(b)(5). PO 00000 Frm 00099 Fmt 4703 Sfmt 4703 account must be liquidated and the funds distributed pro rata to the Subscription Receipt holders if the Specified Acquisition is not consummated within 12 months, and (iii) any interest earned on the custody account must be distributed pro rata to the Subscription Receipt holders upon such liquidation. The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest in that it will facilitate the listing and trading of an additional type of security and that will enhance competition among market participants, to the benefit of investors and the marketplace. The Exchange believes that the proposed amendment to the fees set forth in Section 902.06 of the Manual is consistent with Section 6(b)(4) 7 of the Exchange Act, in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges and is not designed to permit unfair discrimination among its members and issuers and other persons using its facilities. The proposed fees are the same as those applicable to other similar short-term securities as currently applied under Section 902.06. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act. The purpose of the proposed rule is to enhance competition by providing issuers and investors with an additional type of listed security that is not currently available on any domestic listing exchange and, as such, the Exchange does not believe it imposes any burden 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 Within 45 days of the date of publication of this notice in the Federal Register or up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory 7 15 E:\FR\FM\13JYN1.SGM U.S.C. 78f(b)(4). 13JYN1 Federal Register / Vol. 82, No. 133 / Thursday, July 13, 2017 / Notices organization consents, the Commission will: (A) By order approve or disapprove the proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. 2017–31, and should be submitted on or before August 3, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Eduardo A. Aleman, Assistant Secretary. IV. Solicitation of Comments [FR Doc. 2017–14669 Filed 7–12–17; 8:45 am] 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: BILLING CODE 8011–01–P Electronic Comments SECURITIES AND EXCHANGE COMMISSION [Release No. 34–81093; File No. SR–BX– 2017–030] Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the SPY Pilot Program Paper Comments sradovich on DSK3GMQ082PROD with NOTICES • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSE–2017–31 on the subject line. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on June 29, 2017, NASDAQ BX, Inc. (‘‘BX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘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. • 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–2017–31. 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 (http://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– VerDate Sep<11>2014 17:41 Jul 12, 2017 Jkt 241001 July 7, 2017. I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change The Exchange proposes to extend for another twelve (12) month time period the pilot program to eliminate position limits for options on the SPDR® S&P 500® exchange-traded fund (‘‘SPY ETF’’ or ‘‘SPY’’),3 which list and trade under the symbol SPY (‘‘SPY Pilot Program’’). The text of the proposed rule change is available on the Exchange’s Web site at http://nasdaqbx.cchwallstreet.com/, at the principal office of the Exchange, and at the Commission’s Public Reference Room. CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 ‘‘SPDR®,’’ ‘‘Standard & Poor’s®,’’ ‘‘S&P®,’’ ‘‘S&P 500®,’’ and ‘‘Standard & Poor’s 500’’ are registered trademarks of Standard & Poor’s Financial Services LLC. The SPY ETF represents ownership in the SPDR S&P 500 Trust, a unit investment trust that generally corresponds to the price and yield performance of the SPDR S&P 500 Index. PO 00000 8 17 1 15 Frm 00100 Fmt 4703 Sfmt 4703 32415 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 aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to amend the Supplementary Material at the end of Chapter III, Section 7 (Position Limits) to extend the current pilot which expires on July 12, 2017 for an additional twelve (12) month time period to July 12, 2018 (‘‘Extended Pilot’’). This filing does not propose any substantive changes to the SPY Pilot Program. In proposing to extend the SPY Pilot Program, the Exchange reaffirms its consideration of several factors that supported the original proposal of the SPY Pilot Program, including (1) the availability of economically equivalent products and their respective position limits; (2) the liquidity of the option and the underlying security; (3) the market capitalization of the underlying security and the related index; (4) the reporting of large positions and requirements surrounding margin; and (5) the potential for market on close volatility. With this proposal, the Exchange submits the SPY report to the Commission, which report reflects, during the time period from May 2016 through May 2017, the trading of standardized SPY options with no position limits consistent with option exchange provisions.4 The report was prepared in the manner specified in the Exchange’s prior rule filing extending the SPY Pilot Program.5 The Exchange notes that it is unaware of any problems created by the SPY Pilot Program and does not foresee any as a result of the proposed extension. The proposed extension will allow the Exchange and the Commission additional time to 4 The report is attached as Exhibit 3 [sic]. Securities Exchange Act Release No. 78125 (June 22, 2016), 81 FR 42009 (June 28, 2016) (SR– BX–2016–030). 5 See E:\FR\FM\13JYN1.SGM 13JYN1

Agencies

[Federal Register Volume 82, Number 133 (Thursday, July 13, 2017)]
[Notices]
[Pages 32413-32415]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-14669]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81102; File No. SR-NYSE-2017-31]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change To Amend the Listed Company 
Manual To Adopt Initial and Continued Listing Standards for 
Subscription Receipts

July 7, 2017.
    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 on 
June, 26, 2017, New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Listed Company Manual (the 
``Manual'') to adopt initial and continued listing standards for 
subscription receipts. 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to adopt initial and continued listing 
standards for the listing of subscription receipts (``Subscription 
Receipts'').
    Subscription Receipts are a financing technique that has been used 
for many years by Canadian public companies. Typically, Canadian 
companies use Subscription Receipts as a means of providing cash 
consideration in merger or acquisition transactions. Subscription 
Receipts are sold in a public offering that occurs after the execution 
of an acquisition agreement. The proceeds of the Subscription Receipt 
offering are held in a custody account and, if the related acquisition 
closes, the Subscription Receipt holders receive a specified number of 
shares of the issuer. If the acquisition does not close, then the 
Subscription Receipts are redeemed for their original purchase price 
plus any interest accrued on the custody account. The benefit of 
Subscription Receipts to the issuer is that they provide a contingent 
form of financing that only becomes permanent if the acquisition is 
completed. By contrast, a company financing the cash consideration for 
an acquisition by means of a traditional equity or debt offering is at 
risk of having incurred unnecessary dilution of its shareholders or 
indebtedness if the related acquisition fails to close. Subscription 
Receipts provide investors with flexibility to elect to invest in the 
post-merger company and not in the company in its pre-merger form.
    A number of Canadian issuers whose common stock is listed on the 
Exchange have approached the Exchange in recent years about the 
possibility of dually-listing on the Exchange Subscription Receipts 
that they planned to list in Canada. More recently, market participants 
have also inquired about the possibility of the use of Subscription 
Receipts as a fundraising alternative for U.S. domestic issuers. As a 
result of this interest, the Exchange is now proposing to adopt 
proposed Section 102.08 of the Manual as a listing standard for 
Subscription Receipts.
    The Exchange will list Subscription Receipts pursuant to proposed 
Section 102.08 only if they meet the following requirements:
    (a) The issuer must be an NYSE listed company that is not currently 
non-compliant with any applicable continued listing standard.
    (b) The proceeds of the Subscription Receipts offering are 
designated solely for use in connection with the consummation of a 
specified acquisition that is the subject of a binding acquisition 
agreement (the ``Specified Acquisition'').
    (c) The proceeds of the Subscription Receipts offering will be held 
in an interest-bearing custody account by an independent custodian.
    (d) The Subscription Receipts will promptly be redeemed for cash 
(i) at any time the Specified Acquisition is terminated, or (ii) if the 
Specified Acquisition does not close within twelve months from the date 
of issuance of the Subscription Receipts, or such earlier time as is 
specified in the operative agreements. If the Subscription Receipts are 
redeemed, the holders will receive cash payments equal to their 
proportion share of the funds in the custody account, including any 
interest earned on those funds.
    (e) If the Specified Acquisition is consummated, the holders of the 
Subscription Receipts will receive the shares of common stock for which 
their Subscription Receipts are exchangeable.
    (f) At the time of initial listing, the Subscription Receipts must 
have a price per share of at least $4.00, a minimum total market value 
of publicly-held shares of $100 million, 1,100,000

[[Page 32414]]

publicly-held shares \3\ and 400 holders of round lots (i.e., 100 
securities).
---------------------------------------------------------------------------

    \3\ For purposes of the initial and continued listing 
requirements for Subscription Receipts, shares held by directors, 
officers, or their immediate families and other concentrated 
holdings of 10 percent or more are excluded in calculating the 
number of publicly-held shares.
---------------------------------------------------------------------------

    (g) The sale of the Subscription Receipts and the issuance of the 
common stock of the issuer in exchange for the Subscription Receipts 
must both be registered under the Securities Act.
    The Exchange proposes to amend Section 802.01B to include continued 
listing standards applicable to Subscription Receipts listed under 
proposed Section 102.08. The Exchange will consider initiating 
suspension and delisting procedures when the number of publicly-held 
shares is less than 100,000 or the number of holders is less than 100. 
In addition, Subscription Receipts will be subject to immediate 
suspension and delisting if (i) the total market capitalization of the 
Subscription Receipts is below $15 million over 30 consecutive trading 
days (ii) the related common equity security ceases to be listed or 
(iii) the issuer announces that the Specified Acquisition has been 
terminated. An issuer of Subscription Receipts will not be eligible to 
follow the procedures outlined in Section 802.01 [sic] with respect to 
these criteria, and any such security will be subject to delisting 
procedures as set forth in Section 804.
    In addition to the foregoing, Subscription Receipts will be subject 
to potential delisting for all of the reasons generally applicable to 
operating companies under Section 802.01. The Exchange notes that an 
issuer of Subscription Receipts may be subject to delisting at the time 
of closing of the related acquisition pursuant to the ``backdoor 
listing'' provisions of Section 703.08(E) of the Manual.
    The Exchange proposes to amend Section 202.06 of the Manual to 
provide that whenever it halts trading in a security of a listed 
company pending dissemination of material news or implements any other 
required regulatory trading halt, the Exchange will also halt trading 
in any listed Subscription Receipt that is exchangeable by its terms 
into the common stock of such company.
    The Exchange will monitor activity in Subscription Receipts to 
identify and deter any potential improper trading activity in such 
securities and will adopt enhanced surveillance procedures to enable it 
to monitor Subscription Receipts alongside the common equity securities 
into which they are convertible. Additionally, the Exchange will rely 
on its existing trading surveillances, administered by the Exchange, or 
the Financial Industry Regulatory Authority (``FINRA'') on behalf of 
the Exchange, which are designed to detect violations of Exchange rules 
and applicable federal securities laws.\4\
---------------------------------------------------------------------------

    \4\ FINRA conducts cross-market surveillances on behalf of the 
Exchange pursuant to a regulatory services agreement. The Exchange 
is responsible for FINRA's performance under this regulatory 
services agreement.
---------------------------------------------------------------------------

    Section 902.06 of the Manual sets forth listing fees for ``short-
term'' securities, i.e., securities with a life of seven years or less. 
As Subscription Receipts listed under proposed Section 102.08 would 
have a maximum life of 12 months, they would fall under Section 802.01B 
by its terms. For the avoidance of doubt, the Exchange proposes to 
amend Section 902.06 to make it explicit that it will apply to 
Subscription Receipts.
    The Exchange also proposes to amend Section 902.06 to remove a 
reference to the annual fees charged prior to January 1, 2017, as that 
reference is now irrelevant.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Exchange Act,\5\ in general, and furthers the 
objectives of Section 6(b)(5) of the Exchange Act,\6\ 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.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed listing standard is 
consistent with Section 6(b)(5) of the Exchange Act in that it contains 
requirements in relation to the listing of Subscription Receipts that 
provide adequate protections for investors and the public interest. In 
particular, the Exchange believes that investors are significantly 
protected by the requirements in the proposed rule that: (i) The 
proceeds of the Subscription Receipt offering must be held in an 
interest-bearing custody account controlled by an independent custodian 
pending consummation of the Specified Acquisition, (ii) the custody 
account must be liquidated and the funds distributed pro rata to the 
Subscription Receipt holders if the Specified Acquisition is not 
consummated within 12 months, and (iii) any interest earned on the 
custody account must be distributed pro rata to the Subscription 
Receipt holders upon such liquidation.
    The proposed rule change is designed to perfect the mechanism of a 
free and open market and, in general, to protect investors and the 
public interest in that it will facilitate the listing and trading of 
an additional type of security and that will enhance competition among 
market participants, to the benefit of investors and the marketplace.
    The Exchange believes that the proposed amendment to the fees set 
forth in Section 902.06 of the Manual is consistent with Section 
6(b)(4) \7\ of the Exchange Act, in particular, in that it is designed 
to provide for the equitable allocation of reasonable dues, fees, and 
other charges and is not designed to permit unfair discrimination among 
its members and issuers and other persons using its facilities. The 
proposed fees are the same as those applicable to other similar short-
term securities as currently applied under Section 902.06.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Exchange Act. The purpose of the 
proposed rule is to enhance competition by providing issuers and 
investors with an additional type of listed security that is not 
currently available on any domestic listing exchange and, as such, the 
Exchange does not believe it imposes any burden 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

    Within 45 days of the date of publication of this notice in the 
Federal Register or up to 90 days (i) as the Commission may designate 
if it finds such longer period to be appropriate and publishes its 
reasons for so finding or (ii) as to which the self-regulatory

[[Page 32415]]

organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2017-31 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-2017-31. 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 (http://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-2017-31, and should be 
submitted on or before August 3, 2017.
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    \8\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-14669 Filed 7-12-17; 8:45 am]
 BILLING CODE 8011-01-P