Self-Regulatory Organizations; NYSE American LLC; Order Approving Proposed Rule Change To Amend the Complimentary Products and Services Available to Certain Eligible New Listings Pursuant to Section 146 of the NYSE American Company Guide, 46575-46576 [2017-21415]

Download as PDF Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–81783; File No. SR– NYSEAMER–2017–05] Self-Regulatory Organizations; NYSE American LLC; Order Approving Proposed Rule Change To Amend the Complimentary Products and Services Available to Certain Eligible New Listings Pursuant to Section 146 of the NYSE American Company Guide September 29, 2017. I. Introduction On August 11, 2017, NYSE American LLC (the ‘‘Exchange’’ or ‘‘NYSE American’’) 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 146 of the NYSE American Company Guide (the ‘‘Company Guide’’) to provide that companies initially listed on or after October 1, 2017 will not be eligible to receive corporate governance tools under the Exchange’s current services offering. The proposed rule change was published for comment in the Federal Register on August 29, 2017.3 No comment letters were received in response to the Notice. This order approves the proposed rule change. II. Description of the Proposed Rule Change The Exchange has proposed to amend Section 146 of the Company Guide to provide that companies initially listed on or after October 1, 2017 will not be eligible to receive the corporate governance tools described under the Exchange’s current services offering. As set forth in Section 146 of the Company Guide, the Exchange currently provides Eligible New Listings 4 with complimentary Web-hosting products 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 81470 (August 23, 2017), 82 FR 41075 (‘‘Notice’’). 4 For the purposes of Section 146, the term ‘‘Eligible New Listing’’ means: (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 101 or 110 of the Company Guide for the first time, regardless of whether such U.S. or nonU.S. company conducts an offering; (ii) 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; and (iii) 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), and carve-out (where a company carves out a business line or division, which then conducts a separate initial public offering). ethrower on DSK3G9T082PROD with NOTICES 2 17 VerDate Sep<11>2014 19:52 Oct 04, 2017 Jkt 244001 and services (with a commercial value of approximately $16,000 annually), web-casting services (with a commercial value of approximately $6,500 annually), whistleblower hotline services (with a commercial value of approximately $4,000 annually), news distribution products and services (with a commercial value of approximately $20,000 annually), and corporate governance tools (with a commercial value of approximately $15,000 annually) for a period of 24 calendar months.5 According to the Exchange, companies that qualify as Eligible New Listings have generally not been interested in utilizing the corporate governance tools available as part of the Exchange’s services offering.6 The Exchange has therefore proposed to discontinue the corporate governance tools portion of its service offering for companies that list on or after October 1, 2017.7 The Exchange proposal states, however, that any Eligible New Listing that lists prior to October 1, 2017 will continue to be able to access the corporate governance tools for a period of 24 months to the extent their eligibility permits under current Section 146 of the Company Guide.8 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.9 Specifically, the Commission finds that the proposal is consistent with Sections 6(b)(4) 10 and 6(b)(5) of the Act 11 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 Section 6(b)(8) of the Act 12 in that it does not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. 5 See Section 146 of the Company Guide. Notice, supra note 3, at 41076. 7 See id. 8 See id. 9 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). 10 15 U.S.C. 78f(b)(4). 11 15 U.S.C. 78f(b)(5). 12 15 U.S.C. 78f(b)(8). 6 See PO 00000 Frm 00100 Fmt 4703 Sfmt 4703 46575 The Commission believes that it is consistent with the Act for the Exchange to modify its existing complimentary service offerings to no longer offer corporate governance tools to Eligible New Listings that list on or after October 1, 2017. The Exchange states that Eligible New Listings have generally not been interested in utilizing the corporate governance tools offered by the Exchange.13 The Commission believes it is reasonable and consistent with the Act for the Exchange to discontinue such services if it believes they are not being utilized. The Commission notes that the effect of the proposal is to reduce the commercial value of offerings to Eligible New Listings by $15,000 annually, which is the value of the corporate governance tools as currently set forth in Section 146 of the Company Guide. The value of the remaining offerings to Eligible New Listings will continue to remain transparent under Section 146 of the Company Guide. The Commission believes that by accurately describing in the Company Guide the current products and services available to listed companies and the current values of those products and services, the Exchange is maintaining transparency with respect to its rules and the fees applicable to such companies. This helps to ensure that individual listed companies are not given specially negotiated packages of products and services to list or remain listed that would raise unfair discrimination issues under the Act.14 Under the proposal, Eligible New Listings that list prior to October 1, 2017 will remain eligible to receive all the complimentary products and services currently provided by the Exchange, including the corporate governance tools. The Commission notes that Section 6(b)(5) of the Act does not require that all issuers be treated the same; rather, the Act requires that the rules of an exchange not unfairly discriminate between issuers. The Exchange states that it believes it is not unfairly discriminatory to continue to offer corporate governance tools to companies listed prior to October 1, 2017, as that benefit was part of the services offering that was available at the time of such companies’ initial listing and may have had some influence over their listing decisions.15 13 See Notice, supra note 3, at 41076. Securities Exchange Act Release No. 77401 (March 17, 2016), 81 FR 15585 (March 23, 2016) (SR–NYSEMKT–2016–12) (order approving the initial complimentary products and services provided by the Exchange to Eligible New Listings). 15 See Notice, supra note 3, at 41076. 14 See E:\FR\FM\05OCN1.SGM 05OCN1 ethrower on DSK3G9T082PROD with NOTICES 46576 Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Notices The Commission believes that the Exchange has provided a sufficient basis for its different treatment of Eligible New Listings that list prior to October 1, 2017 and that this portion of the Exchange’s proposal meets the requirements of the Act. In making this determination, the Commission notes that the provision of services under Section 146 of the Company Guide is for a limited duration and that the Exchange has provided a reasonable basis for deciding to treat Eligible New Listings that list prior to October 1, 2017 differently from other listed companies going forward. The Commission notes that at the time such companies listed, they had an expectation, if they intended to utilize the corporate governance tools, to be able to do so for the entire 24 month period as set forth in the current rule. To allow such companies listed prior to October 1, 2017 to finish utilizing corporate governance tools for any remainder of their 24 month period appears to be reasonable, equitable, and not unfairly discriminatory. In addition, the Commission notes that the October 1, 2017 date, to curtail the offering of corporate governance tools for Eligible New Listings that list on or after that date, was transparent and published for comment in advance of approval by the Commission in the order discussed herein. As noted above, the Commission received no comments on the proposal. Finally, the Commission has also previously approved proposals providing different services to newlylisted issuers, including those transferring their listing from another exchange, and has found this consistent with Sections 6(b)(4) and 6(b)(5) of the Act.16 Accordingly, the Commission finds that the proposed rule change is consistent with the requirements of the Act and, in particular, that the products and services provided under Section 146 of the Company Guide are equitably allocated among issuers consistent with Section 6(b)(4) of the Act, the proposed rule change does not unfairly discriminate among issuers consistent with Section 6(b)(5) of the Act, and the proposed rule change is appropriate and consistent with Section 6(b)(8) of the Act in that it does not impose any burden on competition not necessary or 16 See Securities Exchange Act Release Nos. 76127 (October 9, 2015), 80 FR 62584 (October 16, 2015) (order approving SR–NYSE–2015–36); 72669 (July 24, 2014), 79 FR 44234 (July 30, 2014) (order approving SR–NASDAQ–2014–058); 65963 (December 15, 2011), 76 FR 79262 (December 21, 2011) (order approving SR–NASDAQ–2011–122). VerDate Sep<11>2014 19:52 Oct 04, 2017 Jkt 244001 appropriate in furtherance of the purposes of the Act.17 IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,18 that the proposed rule change (SR–NYSEAMER– 2017–05), be, and hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–21415 Filed 10–4–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–81772; File No. SR–ISE– 2017–84] Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 716(c) on the Block Order Mechanism September 29, 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 that on September 18, 2017, Nasdaq ISE, LLC (‘‘ISE’’ 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 Rule 716(c) to more accurately describe the allocation methodology used in the Block Order Mechanism, add language regarding how the block execution price is determined, and describe the content of the broadcast message disseminated to members upon the entry of an order into the mechanism. The text of the proposed rule change is available on the Exchange’s Web site at www.ise.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 17 15 U.S.C. 78f(b)(4), (5), and (8). U.S.C. 78s(b)(2). 19 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 18 15 PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 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 Block Order Mechanism is a process by which a member can obtain liquidity for the execution of blocksized orders,3 defined as orders for fifty contracts or more.4 When an order is entered in the Block Order Mechanism, that order is exposed to members who are given an opportunity to respond with the prices and sizes at which they would be willing to trade with the block-sized order.5 The exposure period is designated by the Exchange via circular, but must be no less than 100 milliseconds and no more than 1 second.6 At the conclusion of the exposure period, either an execution will occur at a single block execution price,7 or the order will be cancelled.8 The purpose of the proposed rule change is to amend Rule 716(c) to more accurately describe the allocation methodology used in the Block Order Mechanism, add language regarding how the block execution price is determined, and describe the content of the broadcast message disseminated to members upon the entry of an order into the mechanism. The Exchange believes that these changes will increase transparency around the operation of the Block Order Mechanism to the benefit of members and market participants. Currently, Rule 716(c)(2)(ii) provides that Responses, quotes, and Professional 3 See Rule 716(c). Rule 716(a). 5 A ‘‘Response’’ is an electronic message that is sent by members in response to a broadcast message. See Rule 716(b). 6 See Supplementary Material .04 to Rule 716. 7 Responses and orders and quotes on the order book at the time the block order is executed that are priced better than the block execution price are executed at the block execution price. See Rule 716(c)(2)(i). 8 See Rule 716(c)(2). 4 See E:\FR\FM\05OCN1.SGM 05OCN1

Agencies

[Federal Register Volume 82, Number 192 (Thursday, October 5, 2017)]
[Notices]
[Pages 46575-46576]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-21415]



[[Page 46575]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81783; File No. SR-NYSEAMER-2017-05]


Self-Regulatory Organizations; NYSE American LLC; Order Approving 
Proposed Rule Change To Amend the Complimentary Products and Services 
Available to Certain Eligible New Listings Pursuant to Section 146 of 
the NYSE American Company Guide

September 29, 2017.

I. Introduction

    On August 11, 2017, NYSE American LLC (the ``Exchange'' or ``NYSE 
American'') 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 146 of the NYSE American Company 
Guide (the ``Company Guide'') to provide that companies initially 
listed on or after October 1, 2017 will not be eligible to receive 
corporate governance tools under the Exchange's current services 
offering. The proposed rule change was published for comment in the 
Federal Register on August 29, 2017.\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. 81470 (August 23, 
2017), 82 FR 41075 (``Notice'').
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    The Exchange has proposed to amend Section 146 of the Company Guide 
to provide that companies initially listed on or after October 1, 2017 
will not be eligible to receive the corporate governance tools 
described under the Exchange's current services offering.
    As set forth in Section 146 of the Company Guide, the Exchange 
currently provides Eligible New Listings \4\ with complimentary Web-
hosting products and services (with a commercial value of approximately 
$16,000 annually), web-casting services (with a commercial value of 
approximately $6,500 annually), whistleblower hotline services (with a 
commercial value of approximately $4,000 annually), news distribution 
products and services (with a commercial value of approximately $20,000 
annually), and corporate governance tools (with a commercial value of 
approximately $15,000 annually) for a period of 24 calendar months.\5\ 
According to the Exchange, companies that qualify as Eligible New 
Listings have generally not been interested in utilizing the corporate 
governance tools available as part of the Exchange's services 
offering.\6\ The Exchange has therefore proposed to discontinue the 
corporate governance tools portion of its service offering for 
companies that list on or after October 1, 2017.\7\ The Exchange 
proposal states, however, that any Eligible New Listing that lists 
prior to October 1, 2017 will continue to be able to access the 
corporate governance tools for a period of 24 months to the extent 
their eligibility permits under current Section 146 of the Company 
Guide.\8\
---------------------------------------------------------------------------

    \4\ For the purposes of Section 146, the term ``Eligible New 
Listing'' means: (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 101 or 110 of the 
Company Guide for the first time, regardless of whether such U.S. or 
non-U.S. company conducts an offering; (ii) 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; and (iii) 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), and carve-out (where a company carves 
out a business line or division, which then conducts a separate 
initial public offering).
    \5\ See Section 146 of the Company Guide.
    \6\ See Notice, supra note 3, at 41076.
    \7\ See id.
    \8\ See id.
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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.\9\ Specifically, the Commission finds that the proposal is 
consistent with Sections 6(b)(4) \10\ and 6(b)(5) of the Act \11\ 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 Section 
6(b)(8) of the Act \12\ in that it does not impose any burden on 
competition not necessary or appropriate in furtherance of the purposes 
of the Act.
---------------------------------------------------------------------------

    \9\ 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).
    \10\ 15 U.S.C. 78f(b)(4).
    \11\ 15 U.S.C. 78f(b)(5).
    \12\ 15 U.S.C. 78f(b)(8).
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    The Commission believes that it is consistent with the Act for the 
Exchange to modify its existing complimentary service offerings to no 
longer offer corporate governance tools to Eligible New Listings that 
list on or after October 1, 2017. The Exchange states that Eligible New 
Listings have generally not been interested in utilizing the corporate 
governance tools offered by the Exchange.\13\ The Commission believes 
it is reasonable and consistent with the Act for the Exchange to 
discontinue such services if it believes they are not being utilized. 
The Commission notes that the effect of the proposal is to reduce the 
commercial value of offerings to Eligible New Listings by $15,000 
annually, which is the value of the corporate governance tools as 
currently set forth in Section 146 of the Company Guide. The value of 
the remaining offerings to Eligible New Listings will continue to 
remain transparent under Section 146 of the Company Guide. The 
Commission believes that by accurately describing in the Company Guide 
the current products and services available to listed companies and the 
current values of those products and services, the Exchange is 
maintaining transparency with respect to its rules and the fees 
applicable to such companies. This helps to ensure that individual 
listed companies are not given specially negotiated packages of 
products and services to list or remain listed that would raise unfair 
discrimination issues under the Act.\14\
---------------------------------------------------------------------------

    \13\ See Notice, supra note 3, at 41076.
    \14\ See Securities Exchange Act Release No. 77401 (March 17, 
2016), 81 FR 15585 (March 23, 2016) (SR-NYSEMKT-2016-12) (order 
approving the initial complimentary products and services provided 
by the Exchange to Eligible New Listings).
---------------------------------------------------------------------------

    Under the proposal, Eligible New Listings that list prior to 
October 1, 2017 will remain eligible to receive all the complimentary 
products and services currently provided by the Exchange, including the 
corporate governance tools. The Commission notes that Section 6(b)(5) 
of the Act does not require that all issuers be treated the same; 
rather, the Act requires that the rules of an exchange not unfairly 
discriminate between issuers. The Exchange states that it believes it 
is not unfairly discriminatory to continue to offer corporate 
governance tools to companies listed prior to October 1, 2017, as that 
benefit was part of the services offering that was available at the 
time of such companies' initial listing and may have had some influence 
over their listing decisions.\15\
---------------------------------------------------------------------------

    \15\ See Notice, supra note 3, at 41076.

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[[Page 46576]]

    The Commission believes that the Exchange has provided a sufficient 
basis for its different treatment of Eligible New Listings that list 
prior to October 1, 2017 and that this portion of the Exchange's 
proposal meets the requirements of the Act. In making this 
determination, the Commission notes that the provision of services 
under Section 146 of the Company Guide is for a limited duration and 
that the Exchange has provided a reasonable basis for deciding to treat 
Eligible New Listings that list prior to October 1, 2017 differently 
from other listed companies going forward. The Commission notes that at 
the time such companies listed, they had an expectation, if they 
intended to utilize the corporate governance tools, to be able to do so 
for the entire 24 month period as set forth in the current rule. To 
allow such companies listed prior to October 1, 2017 to finish 
utilizing corporate governance tools for any remainder of their 24 
month period appears to be reasonable, equitable, and not unfairly 
discriminatory. In addition, the Commission notes that the October 1, 
2017 date, to curtail the offering of corporate governance tools for 
Eligible New Listings that list on or after that date, was transparent 
and published for comment in advance of approval by the Commission in 
the order discussed herein. As noted above, the Commission received no 
comments on the proposal. Finally, the Commission has also previously 
approved proposals providing different services to newly-listed 
issuers, including those transferring their listing from another 
exchange, and has found this consistent with Sections 6(b)(4) and 
6(b)(5) of the Act.\16\
---------------------------------------------------------------------------

    \16\ See Securities Exchange Act Release Nos. 76127 (October 9, 
2015), 80 FR 62584 (October 16, 2015) (order approving SR-NYSE-2015-
36); 72669 (July 24, 2014), 79 FR 44234 (July 30, 2014) (order 
approving SR-NASDAQ-2014-058); 65963 (December 15, 2011), 76 FR 
79262 (December 21, 2011) (order approving SR-NASDAQ-2011-122).
---------------------------------------------------------------------------

    Accordingly, the Commission finds that the proposed rule change is 
consistent with the requirements of the Act and, in particular, that 
the products and services provided under Section 146 of the Company 
Guide are equitably allocated among issuers consistent with Section 
6(b)(4) of the Act, the proposed rule change does not unfairly 
discriminate among issuers consistent with Section 6(b)(5) of the Act, 
and the proposed rule change is appropriate and consistent with Section 
6(b)(8) of the Act in that it does not impose any burden on competition 
not necessary or appropriate in furtherance of the purposes of the 
Act.\17\
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    \17\ 15 U.S.C. 78f(b)(4), (5), and (8).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\18\ that the proposed rule change (SR-NYSEAMER-2017-05), be, and 
hereby is, approved.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-21415 Filed 10-4-17; 8:45 am]
BILLING CODE 8011-01-P
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