Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Amending Section 303A.08 of the Listed Company Manual Relating to Shareholder Approval of Equity Compensation Plans, 25313-25315 [2019-11318]

Download as PDF Federal Register / Vol. 84, No. 105 / Friday, May 31, 2019 / Notices (B) Clearing Agency’s Statement on Burden on Competition ICC does not believe the proposed rule change would have any impact, or impose any burden, on competition. The proposed changes to ICC’s Stress Testing Framework will apply uniformly across all market participants. Therefore, ICC does not believe the proposed rule change imposes any burden on competition that is inappropriate in furtherance of the purposes of the Act. (C) Clearing Agency’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments relating to the proposed rule change have not been solicited or received. ICC will notify the Commission of any written comments received by ICC. 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 within such longer period 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 organization consents, the Commission will: (A) By order approve or disapprove such 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: khammond on DSKBBV9HB2PROD with NOTICES Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– ICC–2019–005 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549. All submissions should refer to File Number SR–ICC–2019–005. This file number should be included on the subject line if email is used. To help the Commission process and review your VerDate Sep<11>2014 16:42 May 30, 2019 Jkt 247001 comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (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 website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filings will also be available for inspection and copying at the principal office of ICE Clear Credit and on ICE Clear Credit’s website at https:// www.theice.com/clear-credit/regulation. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–ICC–2019–005 and should be submitted on or before June 21, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–11340 Filed 5–30–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–85937; File No. SR–NYSE– 2019–28] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Amending Section 303A.08 of the Listed Company Manual Relating to Shareholder Approval of Equity Compensation Plans May 24, 2019. 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 May 13, 2019, New York Stock Exchange LLC 15 17 PO 00000 CFR 200.30–3(a)(12). Frm 00083 Fmt 4703 Sfmt 4703 25313 (‘‘NYSE’’ 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 proposes to amend Section 303A.08 of the Listed Company Manual (the ‘‘Manual’’) to clarify the circumstances under which certain sales of a listed company’s securities will not be deemed to be equity compensation for purposes of that rule and to make a clarifying change in Section 312.04. The proposed rule change is available on the Exchange’s website 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 amend Section 303A.08 of the Manual to clarify the circumstances under which certain sales of a listed company’s securities will not be deemed to be equity compensation for purposes of that rule. Section 303A.08 provides that an ‘‘equity-compensation plan’’ is a plan or other arrangement that provides for the delivery of equity securities (either newly issued or treasury shares) of the listed company to any employee, director or other service provider as compensation for services. The adoption of an equity compensation plan under the rule—or any material revision to a plan—is subject to shareholder approval. However, Section 303A.08 E:\FR\FM\31MYN1.SGM 31MYN1 khammond on DSKBBV9HB2PROD with NOTICES 25314 Federal Register / Vol. 84, No. 105 / Friday, May 31, 2019 / Notices provides for certain exclusions from its definition of equity compensation plan, including for: Plans that merely allow employees, directors or other service providers to elect to buy shares on the open market or from the listed company for their current fair market value, regardless of whether: —The shares are delivered immediately or on a deferred basis; or —the payments for the shares are made directly or by giving up compensation that is otherwise due (for example, through payroll deductions). The Exchange has always interpreted the above provision with respect to the purchase of shares for fair market value as applying only when the securities are acquired directly from the company, either in the form of treasury shares or newly-issued shares. Plans that merely allow their participants to elect to buy shares on the open market do not give rise to any concern about diluting the economic interests of the company’s shareholders. For purposes of the above exclusion from the definition of equity compensation plan, the Exchange has always interpreted ‘‘current fair market value’’ as requiring that the price used be the most recent official closing price on the Exchange. For the avoidance of doubt, the Exchange now proposes to include in Section 303A.08 text specifying how the fair market value of the issuer’s common stock should be calculated for this purpose. ‘‘Fair market value’’ will be defined as the most recent official closing price on the Exchange, as reported to the Consolidated Tape, at the time of the issuance of the securities. For example, if the securities are issued after the close of the regular session at 4:00 p.m. Eastern Standard Time on a Tuesday, then Tuesday’s official closing price will be used. If the securities are issued at any time between the close of the regular session on Monday and the close of the regular session on Tuesday, then Monday’s official closing price will be used. The proposed definition of fair market value under Section 303A.08 is modeled on the definition of ‘‘Official Closing Price’’ set forth in Section 312.04(j), as such definition is proposed to be amended by this filing (as discussed below).3 However, the definitions differ in one material respect. The Official Closing Price as defined in Section 312.04(j) (as proposed to be amended) when used in calculating whether a 3 See Securities Exchange Act Release No. 85374 (SR–NYSE–2018–54) (March 20, 2019); 84 FR 11354 (March 26, 2019). VerDate Sep<11>2014 16:42 May 30, 2019 Jkt 247001 transaction qualifies for an applicable exemption from the shareholder approval requirements of Sections 312.03(b) and (c) is defined as the most recent official closing price on the Exchange, as reported to the Consolidated Tape, at the time of the signing of a binding agreement to issue the securities. By comparison, ‘‘fair market value’’ for purposes of Section 303A.08 will be the most recent official closing price on the Exchange, as reported to the Consolidated Tape, at the time of the issuance of the securities themselves, rather than most recently reported at the time of the signing of the binding agreement. In particular, issuers may issue shares in lieu of cash at the election of participants in a deferred compensation arrangement because the exclusion from the definition of equity compensation plan applies to plans that allow employees, directors and service providers to elect to buy shares from the listed company for their current fair market value regardless of whether the shares are issued immediately or on a deferred basis. Arrangements of this type are common and they are appropriate as they are primarily designed to ensure that the issuances under the deferred compensation arrangement are not economically dilutive to the other shareholders at the time of such issuance. For example, a director compensation plan may require its participants to defer receipt of a portion of their director fees until the director retires from the board. Such arrangements may provide that an individual director can elect to receive shares in lieu of the deferred cash compensation, with the number of shares to which such director is entitled representing the number of shares whose fair market value at the time of issuance equals the amount of the deferred compensation. Because any economic dilution to the issuer’s shareholders would be incurred at the time of the deferred issuance, requiring that the shares are issued for fair market value measured at the time of issuance of the shares rather than at the time the company incurs the obligation ensures that the issuance is not economically dilutive. The Exchange also proposes to clarify the definition of ‘‘Official Closing Price’’ used in Section 312.04(j) of the Manual. That provision currently reads in relevant part as follows: ‘‘Official Closing Price’’ of the issuer’s common stock means the official closing price on the Exchange as reported to the Consolidated Tape immediately preceding the signing of a binding agreement to issue the securities. PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 As amended, the provision will read as follows: ‘‘Official Closing Price’’ of the issuer’s common stock means the most recent official closing price on the Exchange, as reported to the Consolidated Tape, at the time of the signing of a binding agreement to issue the securities. The purpose of this amendment is simply to clarify the meaning of the provision and it is not intended to have any substantive effect. In addition, the Exchange proposes to correct a typographical error in Section 312.04(j) by replacing the word ‘‘if’’ with the word ‘‘of’’ in the last full line of that provision. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Exchange Act,4 in general, and furthers the objectives of Section 6(b)(5) of the Exchange Act,5 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 proposed definition of ‘‘fair market value’’ for purposes of Section 303A.08 protects investors and the public interest because it harmonizes the calculation of market value under Section 303A.08 with the Official Closing Price definition set forth in Section 312.04(j) (as amended by this proposal) and used for purposes of calculating the qualification of transactions for price-based exemptions from the shareholder approval requirements under Sections 312.03(b) and (c). The proposed definition of ‘‘fair market value’’ is consistent with the Exchange’s interpretation of that provision since the original adoption of the rule. As discussed above, the proposed definition of ‘‘fair market value’’ for purposes of Section 303A.08 differs in one respect from the definition of Official Closing Price in Section 312.04(j) (as amended by this proposal), in that the official closing price used is the most recent official closing price on the Exchange, as reported to the Consolidated Tape, at the time of 4 5 15 U.S.C. 78f(b). 15 U.S.C. 78f(b)(5). E:\FR\FM\31MYN1.SGM 31MYN1 Federal Register / Vol. 84, No. 105 / Friday, May 31, 2019 / Notices issuance of the securities rather than at the time of entry into a binding agreement. This distinction is necessary to accommodate the Exchange’s longstanding interpretation under Section 303A.08 that the issuance of shares in lieu of cash at the election of participants in a deferred compensation arrangement is not subject to shareholder approval under Section 303A.08 if the number of shares issued in lieu of cash compensation is based on the fair market value of the shares at the time of issuance. Arrangements of this type are common and they are protective of investors as they are designed to ensure that the issuances under the deferred compensation arrangement are not economically dilutive to the other shareholders at the time of such issuance. The proposed amendments to Section 312.04(j) simply clarify the rule text and has [sic] no substantive effect. IV. Solicitation of Comments 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 Act. The proposed rule change would simply clarify the applicable rule to ensure that it will be applied in a manner that is consistent with the Exchange’s long standing interpretation of that rule. As such, the amendment is neither intended to, nor expected to, impose any burden on competition. The proposed amendments to Section 312.04(j) clarify the rule text and have no substantive effect. All submissions should refer to File Number SR–NYSE–2019–28. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (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 website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NYSE–2019–28, and should be submitted on or before June 21, 2019. khammond on DSKBBV9HB2PROD with NOTICES 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 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. VerDate Sep<11>2014 16:42 May 30, 2019 Jkt 247001 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: • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSE–2019–28 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. Frm 00085 Fmt 4703 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–11318 Filed 5–30–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments PO 00000 25315 Sfmt 4703 [Release No. 34–85944; File No. SR–FICC– 2019–001] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Approving a Proposed Rule Change To Amend the GSD and MBSD Methodology Documents and the MBSD Clearing Rules May 24, 2019. I. Introduction On April 5, 2019, Fixed Income Clearing Corporation (‘‘FICC’’) 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 proposed rule change SR–FICC–2019–001. The proposed rule change was published for comment in the Federal Register on April 23, 2019.3 The Commission did not receive any comment letters on the proposed rule change. For the reasons discussed below, the Commission is approving the proposed rule change. II. Description of the Proposed Rule Change 4 FICC proposes to amend the GSD Methodology Document—GSD Initial Market Risk Margin Model (‘‘GSD QRM Methodology Document’’) 5 and the MBSD Methodology and Model Operations Document—MBSD 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 Securities Exchange Act Release No. 85676 (April 17, 2019), 84 FR 16921 (April 23, 2019) (SR– FICC–2019–001) (‘‘Notice’’). 4 Capitalized terms used herein and not defined shall have the meaning assigned to such terms in the FICC Government Securities Division (‘‘GSD’’) Rulebook (‘‘GSD Rules’’) and the FICC MortgageBacked Securities Division (‘‘MBSD,’’ and together with GSD, the ‘‘Divisions’’) Clearing Rules (‘‘MBSD Rules’’), as applicable, available at https:// www.dtcc.com/legal/rules-and-procedures.aspx. 5 FICC filed the GSD QRM Methodology Document as a confidential exhibit in the rule filing and advance notice for GSD sensitivity VaR. See Securities Exchange Act Release No. 83362 (June 1, 2018), 83 FR 26514 (June 7, 2018) (SR–FICC–2018– 001) (‘‘GSD Approval Order’’) and Securities Exchange Act Release No. 83223 (May 11, 2018), 83 FR 23020 (May 17, 2018) (SR–FICC–2018–801) (‘‘GSD Advance Notice’’). 6 1 15 E:\FR\FM\31MYN1.SGM 31MYN1

Agencies

[Federal Register Volume 84, Number 105 (Friday, May 31, 2019)]
[Notices]
[Pages 25313-25315]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-11318]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85937; File No. SR-NYSE-2019-28]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change Amending Section 303A.08 of 
the Listed Company Manual Relating to Shareholder Approval of Equity 
Compensation Plans

May 24, 2019.
    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 May 13, 2019, New York Stock Exchange LLC (``NYSE'' 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 proposes to amend Section 303A.08 of the Listed 
Company Manual (the ``Manual'') to clarify the circumstances under 
which certain sales of a listed company's securities will not be deemed 
to be equity compensation for purposes of that rule and to make a 
clarifying change in Section 312.04. The proposed rule change is 
available on the Exchange's website 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 amend Section 303A.08 of the Manual to 
clarify the circumstances under which certain sales of a listed 
company's securities will not be deemed to be equity compensation for 
purposes of that rule.
    Section 303A.08 provides that an ``equity-compensation plan'' is a 
plan or other arrangement that provides for the delivery of equity 
securities (either newly issued or treasury shares) of the listed 
company to any employee, director or other service provider as 
compensation for services. The adoption of an equity compensation plan 
under the rule--or any material revision to a plan--is subject to 
shareholder approval. However, Section 303A.08

[[Page 25314]]

provides for certain exclusions from its definition of equity 
compensation plan, including for:
    Plans that merely allow employees, directors or other service 
providers to elect to buy shares on the open market or from the listed 
company for their current fair market value, regardless of whether:

--The shares are delivered immediately or on a deferred basis; or
--the payments for the shares are made directly or by giving up 
compensation that is otherwise due (for example, through payroll 
deductions).

    The Exchange has always interpreted the above provision with 
respect to the purchase of shares for fair market value as applying 
only when the securities are acquired directly from the company, either 
in the form of treasury shares or newly-issued shares. Plans that 
merely allow their participants to elect to buy shares on the open 
market do not give rise to any concern about diluting the economic 
interests of the company's shareholders.
    For purposes of the above exclusion from the definition of equity 
compensation plan, the Exchange has always interpreted ``current fair 
market value'' as requiring that the price used be the most recent 
official closing price on the Exchange. For the avoidance of doubt, the 
Exchange now proposes to include in Section 303A.08 text specifying how 
the fair market value of the issuer's common stock should be calculated 
for this purpose. ``Fair market value'' will be defined as the most 
recent official closing price on the Exchange, as reported to the 
Consolidated Tape, at the time of the issuance of the securities. For 
example, if the securities are issued after the close of the regular 
session at 4:00 p.m. Eastern Standard Time on a Tuesday, then Tuesday's 
official closing price will be used. If the securities are issued at 
any time between the close of the regular session on Monday and the 
close of the regular session on Tuesday, then Monday's official closing 
price will be used.
    The proposed definition of fair market value under Section 303A.08 
is modeled on the definition of ``Official Closing Price'' set forth in 
Section 312.04(j), as such definition is proposed to be amended by this 
filing (as discussed below).\3\ However, the definitions differ in one 
material respect. The Official Closing Price as defined in Section 
312.04(j) (as proposed to be amended) when used in calculating whether 
a transaction qualifies for an applicable exemption from the 
shareholder approval requirements of Sections 312.03(b) and (c) is 
defined as the most recent official closing price on the Exchange, as 
reported to the Consolidated Tape, at the time of the signing of a 
binding agreement to issue the securities. By comparison, ``fair market 
value'' for purposes of Section 303A.08 will be the most recent 
official closing price on the Exchange, as reported to the Consolidated 
Tape, at the time of the issuance of the securities themselves, rather 
than most recently reported at the time of the signing of the binding 
agreement.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 85374 (SR-NYSE-2018-
54) (March 20, 2019); 84 FR 11354 (March 26, 2019).
---------------------------------------------------------------------------

    In particular, issuers may issue shares in lieu of cash at the 
election of participants in a deferred compensation arrangement because 
the exclusion from the definition of equity compensation plan applies 
to plans that allow employees, directors and service providers to elect 
to buy shares from the listed company for their current fair market 
value regardless of whether the shares are issued immediately or on a 
deferred basis. Arrangements of this type are common and they are 
appropriate as they are primarily designed to ensure that the issuances 
under the deferred compensation arrangement are not economically 
dilutive to the other shareholders at the time of such issuance. For 
example, a director compensation plan may require its participants to 
defer receipt of a portion of their director fees until the director 
retires from the board. Such arrangements may provide that an 
individual director can elect to receive shares in lieu of the deferred 
cash compensation, with the number of shares to which such director is 
entitled representing the number of shares whose fair market value at 
the time of issuance equals the amount of the deferred compensation. 
Because any economic dilution to the issuer's shareholders would be 
incurred at the time of the deferred issuance, requiring that the 
shares are issued for fair market value measured at the time of 
issuance of the shares rather than at the time the company incurs the 
obligation ensures that the issuance is not economically dilutive.
    The Exchange also proposes to clarify the definition of ``Official 
Closing Price'' used in Section 312.04(j) of the Manual. That provision 
currently reads in relevant part as follows:
    ``Official Closing Price'' of the issuer's common stock means the 
official closing price on the Exchange as reported to the Consolidated 
Tape immediately preceding the signing of a binding agreement to issue 
the securities.
    As amended, the provision will read as follows:
    ``Official Closing Price'' of the issuer's common stock means the 
most recent official closing price on the Exchange, as reported to the 
Consolidated Tape, at the time of the signing of a binding agreement to 
issue the securities.
    The purpose of this amendment is simply to clarify the meaning of 
the provision and it is not intended to have any substantive effect.
    In addition, the Exchange proposes to correct a typographical error 
in Section 312.04(j) by replacing the word ``if'' with the word ``of'' 
in the last full line of that provision.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Exchange Act,\4\ in general, and furthers the 
objectives of Section 6(b)(5) of the Exchange Act,\5\ 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.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The proposed definition of ``fair market value'' for purposes of 
Section 303A.08 protects investors and the public interest because it 
harmonizes the calculation of market value under Section 303A.08 with 
the Official Closing Price definition set forth in Section 312.04(j) 
(as amended by this proposal) and used for purposes of calculating the 
qualification of transactions for price-based exemptions from the 
shareholder approval requirements under Sections 312.03(b) and (c). The 
proposed definition of ``fair market value'' is consistent with the 
Exchange's interpretation of that provision since the original adoption 
of the rule.
    As discussed above, the proposed definition of ``fair market 
value'' for purposes of Section 303A.08 differs in one respect from the 
definition of Official Closing Price in Section 312.04(j) (as amended 
by this proposal), in that the official closing price used is the most 
recent official closing price on the Exchange, as reported to the 
Consolidated Tape, at the time of

[[Page 25315]]

issuance of the securities rather than at the time of entry into a 
binding agreement. This distinction is necessary to accommodate the 
Exchange's longstanding interpretation under Section 303A.08 that the 
issuance of shares in lieu of cash at the election of participants in a 
deferred compensation arrangement is not subject to shareholder 
approval under Section 303A.08 if the number of shares issued in lieu 
of cash compensation is based on the fair market value of the shares at 
the time of issuance. Arrangements of this type are common and they are 
protective of investors as they are designed to ensure that the 
issuances under the deferred compensation arrangement are not 
economically dilutive to the other shareholders at the time of such 
issuance.
    The proposed amendments to Section 312.04(j) simply clarify the 
rule text and has [sic] no substantive effect.

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 Act. The proposed rule change 
would simply clarify the applicable rule to ensure that it will be 
applied in a manner that is consistent with the Exchange's long 
standing interpretation of that rule. As such, the amendment is neither 
intended to, nor expected to, impose any burden on competition. The 
proposed amendments to Section 312.04(j) clarify the rule text and have 
no substantive effect.

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 
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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSE-2019-28 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-2019-28. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (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 website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of such filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSE-2019-28, and should be submitted on 
or before June 21, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-11318 Filed 5-30-19; 8:45 am]
BILLING CODE 8011-01-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.