Self-Regulatory Organizations; Long-Term Stock Exchange; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Dual Listing, 70582-70584 [2019-27588]
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Filing Materials Under Seal; Filing
Acceptance Date: December 16, 2019;
Filing Authority: 39 U.S.C. 3642, 39 CFR
3020.30 et seq., and 39 CFR 3015.5;
Public Representative: Christopher C.
Mohr; Comments Due: December 26,
2019.
This Notice will be published in the
Federal Register.
Ruth Ann Abrams,
Acting Secretary.
[FR Doc. 2019–27654 Filed 12–20–19; 8:45 am]
FOR FURTHER INFORMATION CONTACT:
Sean Robinson, 202–268–8405.
SUPPLEMENTARY INFORMATION: The
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2019, it filed with the Postal Regulatory
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are available at www.prc.gov, Docket
Nos. MC2020–79, CP2020–78.
Sean Robinson,
Attorney, Corporate and Postal Business Law.
BILLING CODE 7710–FW–P
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SUPPLEMENTARY INFORMATION: The
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gives notice that, pursuant to 39 U.S.C.
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2019, it filed with the Postal Regulatory
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SUMMARY:
Sean Robinson,
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[FR Doc. 2019–27566 Filed 12–20–19; 8:45 am]
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SUMMARY:
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87773; File No. SR–LTSE–
2019–04]
Self-Regulatory Organizations; LongTerm Stock Exchange; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change Relating to
Dual Listing
December 17, 2019.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on December
5, 2019, Long-Term Stock Exchange
(‘‘LTSE’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. 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
LTSE proposes to add two definitions
to Rule 1.160 to clarify the meaning of
two amended terms—LTSE-PrimaryListed Security and Non-LTSE-PrimaryListed Security—in the Rule 11 Series
(Trading Rules) in the context of an
exchange that provides for dually-listed
securities.
The text of the proposed rule change
is available at the Exchange’s website at
https://longtermstockexchange.com/, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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II. Self-Regulatory Organization’s
Statement on 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 self-regulatory organization 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 on the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The rules of the Exchange provide for
dual listings.4 The concept of dual
listing is not new. Companies have
dually listed their securities on NYSE
and Nasdaq,5 and more recently,
companies dual list their securities on a
foreign and U.S. exchange.6 One of the
reasons a company may dual list is to
commit to comply with a more stringent
regulatory regime, such as an exchange’s
listing standards.7 The Commission
recently approved LTSE Rule 14.425, in
which the Exchange enhanced its listing
standards to require companies that list
with the Exchange to adopt and publish
a Long-Term Stakeholder Policy, a
Long-Term Strategy Policy, a Long-Term
4 See
Rule 14.210 (Dually-Listed Securities).
Craig Karmin, Nasdaq Draws 6 Dual
Listings, Including H–P and Schwab, WALL ST. J.
(Jan. 13, 2004), https://www.wsj.com/articles/
SB107391401136003100.
6 Dual listing in the United States and a foreign
jurisdiction allows a company to more easily reach
a global set of investors and benefit from a
multitude of trading venues. See International
Investing, Sec. & Exch. Comm’n (Dec. 7, 2016),
available at https://www.sec.gov/reportspubs/
investor-publications/investorpubsininvesthtm.html
(‘‘Although most foreign stocks trade in the U.S.
markets as ADRs, some foreign companies list their
stock directly here as well as in their local market.
For example, some Canadian stocks that are listed
and trade on Canadian markets are also listed and
trade directly in U.S. markets, rather than as ADRs.
Some foreign companies list their securities in
multiple markets, which may include U.S.
markets.’’).
7 See Securities Exchange Act Release No. 50741
(Nov. 29, 2004), 69 FR 70296, 70298 (Dec. 3, 2004)
(‘‘Nasdaq believes issuers that become dually listed
voluntarily undertake a second set of regulations
and therefore demonstrate their commitment to
regulatory excellence.’’). See generally Cecilia
Caglio, et al., Going Public Abroad 3 (DERA,
Working Paper, Nov. 2013), available at https://
www.sec.gov/files/rsfi-wp2013-01.pdf (‘‘[G]oing
public in a market with more stringent securities
laws can also maximize proceeds by enabling the
issuing firm to credibly commit to greater ongoing
disclosure.’’).
5 See
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Compensation Policy, a Long-Term
Board Policy and a Long-Term Investor
Policy (collectively, ‘‘Long-Term
Policies’’).8
Dually-Listed Securities as defined in
the Exchange Rule 14.210 refers to
securities that also are listed on another
national securities exchange registered
with the Commission under Section 6(a)
of the Act. Inasmuch as Dually-Listed
Securities, by virtue of already being
listed on another national securities
exchange are eligible to trade on each of
the registered national securities
exchanges under Unlisted Trading
Privileges (‘‘UTP’’), the primary benefit
to an issuer from such a dual listing
flows from its commitment to adhere to
the Exchange’s differentiated listing
standards, e.g., the Long-Term Policies.
The Long-Term Policies are intended to
better enable companies to focus on
long-term value creation, potentially
enhancing opportunities for capital
formation, including capital from longterm focused institutional investors and
index funds that have established longterm focused mandates.
The decision to offer companies the
option of dually listing is not aimed at
displacing the role of the primary listing
market in the opening and closing
auctions. Indeed, the Commission
recently noted the role of the primary
listing market in working with the
Nasdaq and NYSE to provide
transparency on how a closing price
would be determined if a systems or
technical issue prevented normal
exchange operations.9 In that approval
order, the Commission noted ‘‘that the
primary listing market’s closing price
for a security is relied upon by market
participants for a variety of reasons,
including, but not limited to,
calculation of index values, calculation
of the net asset value of mutual funds
and exchange-traded products, and the
price of derivatives that are based on the
security.’’ 10
To maintain the status quo and ensure
that dual listings do not interfere with
8 See Securities Exchange Act Release No. 86722
(Aug. 21, 2019), 84 FR 44952 (Aug. 27, 2019).
9 See Securities Exchange Act Release No. 78014
(June 8, 2016), 81 FR 38755 (June 14, 2016).
10 Id. at 38757. See also Research Note: Equity
Market Volatility on August 24, 2015, Sec. & Exch.
Comm’n (Dec. 2015), available at https://
www.sec.gov/marketstructure/research/equity_
market_volatility.pdf (discussing the impact of the
opening and re-opening process at the primary
listing market, noting that S&P Dow Jones Indices
LLP (‘‘S&P DJI’’) generally uses prices from only the
primary listing exchange for calculating index
values, including the S&P 500 Index that provides
the reference for triggering market-wide circuit
breakers and the that the price of the opening cross
on the primary listing exchange (if it occurs before
9:35) is used as a reference price for calculation of
the first Limit Up-Limit Down price bands of a
trading day).
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the primary listing market in various
market operations, including managing
the opening and closing auctions as well
as addressing intra-day auctions as a
result of market pauses or halts, the
Exchange proposes to amend the term
‘‘LTSE-listed security’’ as used
throughout the Rule 11 Series to ‘‘LTSEPrimary-Listed Security’’ and define it
in Rule 1.160 (Definitions) to mean ‘‘a
class of securities listed on the
Exchange for which the Exchange is the
primary listing market.’’ Likewise, the
Exchange proposes to amend the term
‘‘non-LTSE-listed security’’ as used
throughout the Rule 11 Series to ‘‘NonLTSE-Primary-Listed Security’’ and
define it in Rule 1.160 to mean ‘‘(i) any
UTP Security; and (ii) any Dually-Listed
Securities, as provided for in Rule
14.210, which are not LTSE-PrimaryListed Securities.’’ 11 These proposed
clarifications are already implemented
in part in the supplementary material to
Rule 14.210, which excludes the
applicability of various provisions in
Rule 11.282 (Regulatory Trading Halts)
to Dually-Listed Securities where LTSE
is not the primary listing market. In
reviewing the Rule 11 Series, the
Exchange observed that there are other
provisions in the Rule 11 Series that
would benefit from similar clarity in the
context of dual listings. In particular,
the provisions applicable to a Market
Maker’s request to withdraw quotations
in a security and terminate its
registration in a security as contained in
Rules 11.152(c)(1) and (e)(3), and in
Rule 11.153(a), pertain to activity for
LTSE-Primary-Listed Securities and are
proposed to be amended accordingly.
Additionally, the provisions in Rule
11.190 describing the handling of
market orders submitted before the open
of the Regular Market Session are
proposed to be amended in paragraphs
(a)(2)(E)(ii) and (f)(1) to distinguish
between the Auction process provided
for in Rule 11.350, which applies to
LTSE-Primary-Listed Securities, and the
Opening Process provided for in Rule
11.231, which applies to Non-LTSEPrimary-Listed Securities.12
Although Supplementary Material .01
to Rule 14.210 states that the Exchange
shall continue to honor the trade halt
authority of the primary listing market
under the CQ and CTA Plans or the UTP
11 ‘‘UTP Security’’ is defined in Rule 1.160 as
‘‘any security that is not listed on the Exchange, but
is traded on the Exchange pursuant to unlisted
trading privileges.’’ ‘‘Dually-Listed Securities,’’ as
provided for in Rule 14.210, means ‘‘a class of
securities that has been approved for listing on
another national securities exchange registered with
the Commission pursuant to Section 6(a) of the
Act.’’
12 The proposed rule change also would amend
the title of Rule 11.231.
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70583
Plan, as applicable, the proposed rule
change would amend Rule 11.281(a)(8)
to use the new proposed definitions in
place of the more generic LTSE-listed
and non-LTSE-listed securities rule text.
Similar amendments are proposed to
Rule 11.282(a)(1) and (a)(4) with respect
to Regulatory Trading Halts, with the
latter addressing, in addition, American
Depository Receipts (‘‘ADRs’’) that are
LTSE-Primary-Listed Securities.
Rule 11.330 describes various data
products to be offered by the Exchange,
and the proposed rule change would
amend paragraph (a)(1) to clarify that
the Auction Information to be provided
via the LTSE Web Platform pertains to
LTSE-Primary-Listed Securities. Lastly,
as previously noted above, Rule 11.350
governs how auctions are conducted on
the Exchange. To clarify that these
provisions apply to primary listed
securities, the term ‘‘LTSE-listed
security’’ is proposed to be replaced
with ‘‘LTSE-Primary-Listed Security’’ in
Rule 11.350 paragraphs (a)(1)(E)(i),
(a)(10)–(13), (c)(2), (c)(2)(B), (c)(2)(D),
(c)(2)(E), (c)(2)(F), (d)(2), (d)(2)(B),
(d)(2)(D), (e), (e)(2)(C), (f), (f)(1)(A),
(f)(2)(C)(iii), (f)(2)(E), (f)(3), (f)(3)(B)(ii),
and Supplementary Material .02.
In creating these two new definitions,
the Exchange desires to maintain the
definitions in Rule 1.160 in alphabetical
order. However, to maintain flexibility
to add or delete defined terms in the
future, the Exchange proposes to remove
specific cross-references to defined
terms throughout the rule book, while
keeping the cross-references to Rule
1.160, more generally.13 These proposed
changes would remove the crossreference to ‘‘Rule 1.160(m)’’ in Rule
14.202(h), and the 26 cross-references to
‘‘Rule 1.160(qq)’’ in Rules 14.207(b)(1)(2), 14.501(c), and 14.505(k), and in the
Supplementary Material to Rule 14.207.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the provisions of Section 6 of the Act,14
in general, and furthers the objectives of
Section 6(b)(5) of the Act,15 in
particular, in that it is designed to
prevent fraudulent and manipulative
acts and practices, promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, to remove
impediments to and perfect the
mechanisms of a free and open market
13 Very few of the definitions are cross-referenced
to Rule 1.160, and even fewer are done at the
paragraph or subparagraph level.
14 15 U.S.C. 78f.
15 15 U.S.C. 78f(b)(5).
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Federal Register / Vol. 84, No. 246 / Monday, December 23, 2019 / Notices
and a national market system and, in
general, to protect investors and the
public interest. In this respect, the
proposed rule change would help
ensure that issuers, investors and the
public more easily understand the
meaning and operation of the
Exchange’s trading rules as applied to
dually-listed securities.
IV. Solicitation of Comments
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Electronic 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:
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.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Paper Comments
• Send paper comments in triplicate
to Secretary Securities and Exchange
Commission, 100 F Street, NE,
Washington, DC 20549–1090.
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change
does not: (i) Significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative prior to 30 days from the date
on which it was filed, or such shorter
time as the Commission may designate,
if consistent with the protection of
investors and the public interest, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 16 and Rule 19b–
4(f)(6) thereunder.17
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 18 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
16 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
18 15 U.S.C. 78s(b)(2)(B).
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17 17
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• 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–
LTSE–2019–04 on the subject line.
All submissions should refer to File
Number SR–LTSE–2019–04. 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 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.
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–LTSE–2019–04 and should
be submitted on or before January 13,
2020.
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2019–27588 Filed 12–20–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87771; File No. SR–ICEEU–
2019–019]
Self-Regulatory Organizations; ICE
Clear Europe Limited; Notice of Filing
of Proposed Rule Change Relating to
the ICE Clear Europe Collateral and
Haircut Policy and Collateral and
Haircut Procedures
December 17, 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 December
4, 2019, ICE Clear Europe Limited (‘‘ICE
Clear Europe’’ or the ‘‘Clearing House’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule changes described in
Items I, II, and III below, which Items
have been prepared primarily by ICE
Clear Europe. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
ICE Clear Europe proposes to adopt a
new Collateral and Haircut Policy (the
‘‘Revised Policy’’) to replace the existing
Collateral and Haircut Policy (the
‘‘Existing Policy’’) and to adopt new
Collateral and Haircut Procedures (the
‘‘Collateral Procedures’’). The revisions
would not involve any changes to the
ICE Clear Europe Clearing Rules or
Procedures.3
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission, ICE
Clear Europe 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. ICE
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Capitalized terms used but not defined herein
have the meanings specified in the ICE Clear
Europe Clearing Rules (the ‘‘Rules’’).
1 15
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]]>Agencies
[Federal Register Volume 84, Number 246 (Monday, December 23, 2019)]
[Notices]
[Pages 70582-70584]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27588]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87773; File No. SR-LTSE-2019-04]
Self-Regulatory Organizations; Long-Term Stock Exchange; Notice
of Filing and Immediate Effectiveness of Proposed Rule Change Relating
to Dual Listing
December 17, 2019.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on December 5, 2019, Long-Term Stock Exchange (``LTSE'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II below, which Items have been prepared by the self-regulatory
organization. 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\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
LTSE proposes to add two definitions to Rule 1.160 to clarify the
meaning of two amended terms--LTSE-Primary-Listed Security and Non-
LTSE-Primary-Listed Security--in the Rule 11 Series (Trading Rules) in
the context of an exchange that provides for dually-listed securities.
The text of the proposed rule change is available at the Exchange's
website at https://longtermstockexchange.com/, at the principal office
of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement on 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 self-regulatory organization
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 on the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The rules of the Exchange provide for dual listings.\4\ The concept
of dual listing is not new. Companies have dually listed their
securities on NYSE and Nasdaq,\5\ and more recently, companies dual
list their securities on a foreign and U.S. exchange.\6\ One of the
reasons a company may dual list is to commit to comply with a more
stringent regulatory regime, such as an exchange's listing
standards.\7\ The Commission recently approved LTSE Rule 14.425, in
which the Exchange enhanced its listing standards to require companies
that list with the Exchange to adopt and publish a Long-Term
Stakeholder Policy, a Long-Term Strategy Policy, a Long-Term
[[Page 70583]]
Compensation Policy, a Long-Term Board Policy and a Long-Term Investor
Policy (collectively, ``Long-Term Policies'').\8\
---------------------------------------------------------------------------
\4\ See Rule 14.210 (Dually-Listed Securities).
\5\ See Craig Karmin, Nasdaq Draws 6 Dual Listings, Including H-
P and Schwab, Wall St. J. (Jan. 13, 2004), https://www.wsj.com/articles/SB107391401136003100.
\6\ Dual listing in the United States and a foreign jurisdiction
allows a company to more easily reach a global set of investors and
benefit from a multitude of trading venues. See International
Investing, Sec. & Exch. Comm'n (Dec. 7, 2016), available at https://www.sec.gov/reportspubs/investor-publications/investorpubsininvesthtm.html (``Although most foreign stocks trade
in the U.S. markets as ADRs, some foreign companies list their stock
directly here as well as in their local market. For example, some
Canadian stocks that are listed and trade on Canadian markets are
also listed and trade directly in U.S. markets, rather than as ADRs.
Some foreign companies list their securities in multiple markets,
which may include U.S. markets.'').
\7\ See Securities Exchange Act Release No. 50741 (Nov. 29,
2004), 69 FR 70296, 70298 (Dec. 3, 2004) (``Nasdaq believes issuers
that become dually listed voluntarily undertake a second set of
regulations and therefore demonstrate their commitment to regulatory
excellence.''). See generally Cecilia Caglio, et al., Going Public
Abroad 3 (DERA, Working Paper, Nov. 2013), available at https://www.sec.gov/files/rsfi-wp2013-01.pdf (``[G]oing public in a market
with more stringent securities laws can also maximize proceeds by
enabling the issuing firm to credibly commit to greater ongoing
disclosure.'').
\8\ See Securities Exchange Act Release No. 86722 (Aug. 21,
2019), 84 FR 44952 (Aug. 27, 2019).
---------------------------------------------------------------------------
Dually-Listed Securities as defined in the Exchange Rule 14.210
refers to securities that also are listed on another national
securities exchange registered with the Commission under Section 6(a)
of the Act. Inasmuch as Dually-Listed Securities, by virtue of already
being listed on another national securities exchange are eligible to
trade on each of the registered national securities exchanges under
Unlisted Trading Privileges (``UTP''), the primary benefit to an issuer
from such a dual listing flows from its commitment to adhere to the
Exchange's differentiated listing standards, e.g., the Long-Term
Policies. The Long-Term Policies are intended to better enable
companies to focus on long-term value creation, potentially enhancing
opportunities for capital formation, including capital from long-term
focused institutional investors and index funds that have established
long-term focused mandates.
The decision to offer companies the option of dually listing is not
aimed at displacing the role of the primary listing market in the
opening and closing auctions. Indeed, the Commission recently noted the
role of the primary listing market in working with the Nasdaq and NYSE
to provide transparency on how a closing price would be determined if a
systems or technical issue prevented normal exchange operations.\9\ In
that approval order, the Commission noted ``that the primary listing
market's closing price for a security is relied upon by market
participants for a variety of reasons, including, but not limited to,
calculation of index values, calculation of the net asset value of
mutual funds and exchange-traded products, and the price of derivatives
that are based on the security.'' \10\
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\9\ See Securities Exchange Act Release No. 78014 (June 8,
2016), 81 FR 38755 (June 14, 2016).
\10\ Id. at 38757. See also Research Note: Equity Market
Volatility on August 24, 2015, Sec. & Exch. Comm'n (Dec. 2015),
available at https://www.sec.gov/marketstructure/research/equity_market_volatility.pdf (discussing the impact of the opening
and re-opening process at the primary listing market, noting that
S&P Dow Jones Indices LLP (``S&P DJI'') generally uses prices from
only the primary listing exchange for calculating index values,
including the S&P 500 Index that provides the reference for
triggering market-wide circuit breakers and the that the price of
the opening cross on the primary listing exchange (if it occurs
before 9:35) is used as a reference price for calculation of the
first Limit Up-Limit Down price bands of a trading day).
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To maintain the status quo and ensure that dual listings do not
interfere with the primary listing market in various market operations,
including managing the opening and closing auctions as well as
addressing intra-day auctions as a result of market pauses or halts,
the Exchange proposes to amend the term ``LTSE-listed security'' as
used throughout the Rule 11 Series to ``LTSE-Primary-Listed Security''
and define it in Rule 1.160 (Definitions) to mean ``a class of
securities listed on the Exchange for which the Exchange is the primary
listing market.'' Likewise, the Exchange proposes to amend the term
``non-LTSE-listed security'' as used throughout the Rule 11 Series to
``Non-LTSE-Primary-Listed Security'' and define it in Rule 1.160 to
mean ``(i) any UTP Security; and (ii) any Dually-Listed Securities, as
provided for in Rule 14.210, which are not LTSE-Primary-Listed
Securities.'' \11\ These proposed clarifications are already
implemented in part in the supplementary material to Rule 14.210, which
excludes the applicability of various provisions in Rule 11.282
(Regulatory Trading Halts) to Dually-Listed Securities where LTSE is
not the primary listing market. In reviewing the Rule 11 Series, the
Exchange observed that there are other provisions in the Rule 11 Series
that would benefit from similar clarity in the context of dual
listings. In particular, the provisions applicable to a Market Maker's
request to withdraw quotations in a security and terminate its
registration in a security as contained in Rules 11.152(c)(1) and
(e)(3), and in Rule 11.153(a), pertain to activity for LTSE-Primary-
Listed Securities and are proposed to be amended accordingly.
Additionally, the provisions in Rule 11.190 describing the handling of
market orders submitted before the open of the Regular Market Session
are proposed to be amended in paragraphs (a)(2)(E)(ii) and (f)(1) to
distinguish between the Auction process provided for in Rule 11.350,
which applies to LTSE-Primary-Listed Securities, and the Opening
Process provided for in Rule 11.231, which applies to Non-LTSE-Primary-
Listed Securities.\12\
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\11\ ``UTP Security'' is defined in Rule 1.160 as ``any security
that is not listed on the Exchange, but is traded on the Exchange
pursuant to unlisted trading privileges.'' ``Dually-Listed
Securities,'' as provided for in Rule 14.210, means ``a class of
securities that has been approved for listing on another national
securities exchange registered with the Commission pursuant to
Section 6(a) of the Act.''
\12\ The proposed rule change also would amend the title of Rule
11.231.
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Although Supplementary Material .01 to Rule 14.210 states that the
Exchange shall continue to honor the trade halt authority of the
primary listing market under the CQ and CTA Plans or the UTP Plan, as
applicable, the proposed rule change would amend Rule 11.281(a)(8) to
use the new proposed definitions in place of the more generic LTSE-
listed and non-LTSE-listed securities rule text. Similar amendments are
proposed to Rule 11.282(a)(1) and (a)(4) with respect to Regulatory
Trading Halts, with the latter addressing, in addition, American
Depository Receipts (``ADRs'') that are LTSE-Primary-Listed Securities.
Rule 11.330 describes various data products to be offered by the
Exchange, and the proposed rule change would amend paragraph (a)(1) to
clarify that the Auction Information to be provided via the LTSE Web
Platform pertains to LTSE-Primary-Listed Securities. Lastly, as
previously noted above, Rule 11.350 governs how auctions are conducted
on the Exchange. To clarify that these provisions apply to primary
listed securities, the term ``LTSE-listed security'' is proposed to be
replaced with ``LTSE-Primary-Listed Security'' in Rule 11.350
paragraphs (a)(1)(E)(i), (a)(10)-(13), (c)(2), (c)(2)(B), (c)(2)(D),
(c)(2)(E), (c)(2)(F), (d)(2), (d)(2)(B), (d)(2)(D), (e), (e)(2)(C),
(f), (f)(1)(A), (f)(2)(C)(iii), (f)(2)(E), (f)(3), (f)(3)(B)(ii), and
Supplementary Material .02.
In creating these two new definitions, the Exchange desires to
maintain the definitions in Rule 1.160 in alphabetical order. However,
to maintain flexibility to add or delete defined terms in the future,
the Exchange proposes to remove specific cross-references to defined
terms throughout the rule book, while keeping the cross-references to
Rule 1.160, more generally.\13\ These proposed changes would remove the
cross-reference to ``Rule 1.160(m)'' in Rule 14.202(h), and the 26
cross-references to ``Rule 1.160(qq)'' in Rules 14.207(b)(1)-(2),
14.501(c), and 14.505(k), and in the Supplementary Material to Rule
14.207.
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\13\ Very few of the definitions are cross-referenced to Rule
1.160, and even fewer are done at the paragraph or subparagraph
level.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\14\ in general, and
furthers the objectives of Section 6(b)(5) of the Act,\15\ in
particular, in that it is designed to prevent fraudulent and
manipulative acts and practices, promote just and equitable principles
of trade, to foster cooperation and coordination with persons engaged
in facilitating transactions in securities, to remove impediments to
and perfect the mechanisms of a free and open market
[[Page 70584]]
and a national market system and, in general, to protect investors and
the public interest. In this respect, the proposed rule change would
help ensure that issuers, investors and the public more easily
understand the meaning and operation of the Exchange's trading rules as
applied to dually-listed securities.
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\14\ 15 U.S.C. 78f.
\15\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change does not: (i) Significantly affect
the protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, it has become effective pursuant to
Section 19(b)(3)(A) of the Act \16\ and Rule 19b-4(f)(6)
thereunder.\17\
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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \18\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\18\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-LTSE-2019-04 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-LTSE-2019-04. 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 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. 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-LTSE-2019-04 and should be submitted on
or before January 13, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2019-27588 Filed 12-20-19; 8:45 am]
BILLING CODE 8011-01-P
