Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Section 902.02 of the NYSE Listed Company Manual Concerning Pre-Revenue Companies That Can Qualify for Reduced Listing and Annual Fees, 35358-35360 [2020-12384]
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35358
Federal Register / Vol. 85, No. 111 / Tuesday, June 9, 2020 / Notices
recommendations for the proposed
information collection should be sent
within 30 days of publication of this
notice to (i) www.reginfo.gov/public/do/
PRAMain and (ii) David Bottom,
Director/Chief Information Officer,
Securities and Exchange Commission,
c/o Cynthia Roscoe, 100 F Street NE,
Washington, DC 20549, or by sending an
email to: PRA_Mailbox@sec.gov.
Dated: June 3, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–12392 Filed 6–8–20; 8:45 am]
BILLING CODE 8011–01–P
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88999; File No. SR–NYSE–
2020–42]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
Section 902.02 of the NYSE Listed
Company Manual Concerning PreRevenue Companies That Can Qualify
for Reduced Listing and Annual Fees
June 3, 2020.
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 May 21,
2020, New York Stock Exchange LLC
(‘‘NYSE’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
jbell on DSKJLSW7X2PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Section 902.02 of the NYSE Listed
Company Manual (the ‘‘Manual’’) to
modify the definition of a Pre-Revenue
Company contained in that rule. 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.
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 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.
1. Purpose
Section 902.02 of the Manual includes
a provision providing for modified
listing and annual fees for companies
that meet the definition of a PreRevenue Company set forth in that rule.
For purposes of this provision, a ‘‘PreRevenue Company’’ is a company
whose initial listing date is on or after
June 1, 2019, and which has not
recorded revenue in excess of $5 million
in either (i) the most recent completed
fiscal year prior to listing or (ii) during
the year of listing through the most
recently completed fiscal quarter before
the listing date.4
In adding the provisions specific to
Pre-Revenue Companies,5 the Exchange
noted that its Global Market
Capitalization Test (as set forth in
Section 102.01C of the Manual) allows
the Exchange to list companies that
have not yet recorded any significant
revenues, provided the issuer has at
least a $200 million global market
capitalization and meets the other
4 The Annual Fees of any company which
qualifies as a Pre-Revenue Company at the time of
listing will be calculated quarterly for the fiscal
quarter in which it lists and in each of the
succeeding 12 full fiscal quarters, at a rate of onefourth of the applicable Annual Fee rate. The total
fees (including Listing Fees and Annual Fees, but
excluding listing fees paid at the time of initial
listing) that may be billed to such an issuer during
this period will be subject to a $25,000 cap in the
fiscal quarter in which the issuer lists and in each
of the succeeding 12 full fiscal quarters. This fee
cap is subject to the same exclusions as apply in
relation to the $500,000 per year fee cap described
in the subsection of Section 902.02 entitled ‘‘Total
Maximum Fee Payable in a Calendar Year.’’ If there
are one or more fiscal quarters remaining in the
calendar year after the conclusion of the period
described herein, the issuer will, on a prorated
basis, be billed the regular Annual Fee subject to
the $500,000 total fee cap for the remainder of that
calendar year.
5 See Exchange Act Release No. 85961 (May 29,
2019), 84 FR 25856 (June 4, 2019 (SR–NYSE– 2019–
30).
PO 00000
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Fmt 4703
Sfmt 4703
requirements for listing. These
companies are typically engaged in
research and development (in many
cases they are biotechnology companies
focused on developing new drug
candidates) or are in the early stages of
commercialization of a product.
Generally, a company of this kind relies
primarily on the proceeds from its
initial public offering to fund its
operations. As such, the fees charged by
the Exchange represent a more
significant expense for these companies
than they do for other newly-listed
companies and in many cases these fees
are an impediment to the Exchange in
competing for the listing of these
companies. The adoption of the special
provisions applicable to Pre-Revenue
Companies was intended to address the
particular difficulties faced by PreRevenue Companies in being able to pay
the Exchange’s fees.
Since adopting the provisions for PreRevenue Companies, the Exchange has
observed that some companies that
would otherwise qualify as a PreRevenue Company will have a single
revenue-generating event that is not
typical for a company at that stage in its
life cycle. An event of this nature
renders the company ineligible for PreRevenue Company status,
notwithstanding the fact that the
company has not previously generated
any material revenue and does not have
the prospect of generating any
meaningful additional revenue for the
foreseeable future. An example of this
sort of one-time revenue event that the
Exchange has observed is a one-time
licensing payment received by a
biotechnology company that is
otherwise fully engaged in precommercial research and development
activity and does not generate any
revenue in the ordinary course. The
Exchange believes that a company that
has this sort of event that is anomalous
given the nature of that company’s
business can still be the kind of
company for which the Pre-Revenue
Company provision was designed. Such
a company continues to face the same
challenges faced by a Pre-Revenue
Company. Consequently, the Exchange
now proposes to amend the definition of
a Pre-Revenue Company to provide that,
in determining whether a company
qualifies as a Pre-Revenue Company, the
Exchange will exclude from its
calculations any one-time non-recurring
revenue items.6
6 The determination of Pre-Revenue Company
status is made at the time of initial listing.
Therefore, there are no companies currently listed
that would benefit from the proposed modification
to the definition of Pre-Revenue Company.
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Federal Register / Vol. 85, No. 111 / Tuesday, June 9, 2020 / Notices
The Exchange does not expect there to
be a significant number of listings in
which this proposed revision of the
definition of a Pre-Revenue Company
would be applicable. Consequently, the
proposed rule change would not affect
the Exchange’s commitment of
resources to its regulatory oversight of
the listing process or its regulatory
programs.
jbell on DSKJLSW7X2PROD with NOTICES
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,7 in general, and
furthers the objectives of Section
6(b)(4) 8 of the Act, in particular, in that
it is designed to provide for the
equitable allocation of reasonable dues,
fees, and other charges. The Exchange
also believes that the proposed rule
change is consistent with Section 6(b)(5)
of the Act,9 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 Change is Reasonable
The Exchange operates in a highly
competitive marketplace for the listing
of equity securities. The Commission
has repeatedly expressed its preference
for competition over regulatory
intervention in determining prices,
products, and services in the securities
markets.
The Exchange believes that the evershifting market share among the
exchanges with respect to new listings
and the transfer of existing listings
between competitor exchanges
demonstrates that issuers can choose
different listing markets in response to
fee changes. Accordingly, competitive
forces constrain exchange listing fees.
Stated otherwise, changes to exchange
listing fees can have a direct effect on
the ability of an exchange to compete for
new listings and retain existing listings.
Given this competitive environment,
the Exchange believes that the proposed
fee waivers are reasonable because the
cost of paying initial listing fees and
Annual acts as a disincentive to listing
on the Exchange for companies that do
7 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
9 15 U.S.C. 78f(b)(5).
8 15
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35359
not yet generate significant recurring
revenues.
effect on the competition among issuers
listed on the Exchange.
The Proposal is an Equitable Allocation
of Fees
Intermarket Competition
The Exchange operates in a highly
competitive market in which issuers can
readily choose to list new securities on
other exchanges and transfer listings to
other exchanges if they deem fee levels
at those other venues to be more
favorable. Because competitors are free
to modify their own fees in response,
and because issuers may change their
listing venue, the Exchange does not
believe its proposed modification of the
definition of a Pre-Revenue Company
can impose any burden on intermarket
competition.
The Exchange believes that the
proposal is equitable as it is designed to
address an anomaly in the treatment of
companies that are similar in nature to
companies that meet the current
definition of a Pre-Revenue Company.
The Proposal is Not Unfairly
Discriminatory
The Exchange believes that the
proposal is not unfairly discriminatory
because the proposed waive is designed
solely to avoid the impact on a small
group of issuers of an anomalous fee
outcome arising from the manner in
which a one-time nonrecurring event
causes them to be treated differently for
fee purposes than companies that are
similar to them in every other respect.
Occasionally, a company will receive a
one-time non-recurring payment that
causes it to be ineligible for treatment as
a Pre-Revenue Company for fee
purposes, notwithstanding the fact that
it has not generated any recurring
stream of ordinary course revenue in the
past and does not expect to do so for the
foreseeable future. A company in this
situation is subject to the same ongoing
financial challenges as other companies
that meet the definition of a PreRevenue Company and the Exchange
believes that it is consistent with the
purpose of the modified listing fees for
a Pre-Revenue Company to modify the
definition of such a company to include
a company that would qualify but for
the existence of a one-time, nonrecurring revenue item.
Finally, the Exchange believes that it
is subject to significant competitive
forces, as described below in the
Exchange’s statement regarding the
burden on competition.
For the foregoing reasons, the
Exchange believes that the proposal is
consistent with the Act.
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.
Intramarket Competition.
The proposed waiver will be available
to all similarly situated issuers on the
same basis. The Exchange does not
believe that the proposed modification
of the definition of a Pre-Revenue
Company will have any meaningful
PO 00000
Frm 00105
Fmt 4703
Sfmt 4703
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective
upon filing pursuant to Section
19(b)(3)(A) 10 of the Act and
subparagraph (f)(2) of Rule 19b–4 11
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
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) 12 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
10 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
12 15 U.S.C. 78s(b)(2)(B).
11 17
E:\FR\FM\09JNN1.SGM
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Federal Register / Vol. 85, No. 111 / Tuesday, June 9, 2020 / Notices
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSE–2020–42 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–2020–42. 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–NYSE–2020–42 and should
be submitted on or before June 30, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–12384 Filed 6–8–20; 8:45 am]
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #16253 and #16254;
Puerto Rico Disaster Number PR–00034]
Presidential Declaration Amendment of
a Major Disaster for the
Commonwealth of Puerto Rico
U.S. Small Business
Administration.
ACTION: Amendment 9.
AGENCY:
This is an amendment of the
Presidential declaration of a major
disaster for the Commonwealth of
Puerto Rico (FEMA—4473—DR), dated
01/16/2020.
Incident: Earthquakes.
Incident Period: 12/28/2019 and
continuing.
SUMMARY:
Issued on 06/02/2020.
Physical Loan Application Deadline
Date: 07/02/2020.
Economic Injury (EIDL) Loan
Application Deadline Date: 10/16/2020.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW, Suite 6050,
Washington, DC 20416, (202) 205–6734.
SUPPLEMENTARY INFORMATION: The notice
of the President’s major disaster
declaration for the Commonwealth of
Puerto Rico, dated 01/16/2020, is hereby
amended to extend the deadline for
filing applications for physical damages
as a result of this disaster to 07/02/2020.
All other information in the original
declaration remains unchanged.
DATES:
(Catalog of Federal Domestic Assistance
Number 59008)
Cynthia Pitts,
Acting Associate Administrator for Disaster
Assistance.
[FR Doc. 2020–12419 Filed 6–8–20; 8:45 am]
BILLING CODE 8026–03–P
SOCIAL SECURITY ADMINISTRATION
[Docket No. 2020–0025; Sequence No. 1;
OMB Control No. 0960–XXXX]
jbell on DSKJLSW7X2PROD with NOTICES
BILLING CODE 8011–01–P
Information Collection; Improving
Customer Experience (OMB Circular
A–11, Section 280 Implementation)
Social Security Administration.
Request for comments.
AGENCY:
ACTION:
As part of the
Administration’s commitment to
SUMMARY:
13 17
CFR 200.30–3(a)(12).
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23:08 Jun 08, 2020
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improving customer service delivery,
the following proposed Information
Collection Request ‘‘Improving
Customer Experience (OMB Circular A–
11, Section 280 Implementation)’’ is
pending at the Social Security
Administration. The Social Security
Administration will submit it to OMB
for approval under the Paperwork
Reduction Act (PRA) within 30 days
from the date of this notice.
DATES: Submit comments on or before:
July 9, 2020.
ADDRESSES: Submit comments
identified by Information Collection
0960–XXXX, Improving Customer
Experience (OMB Circular A–11,
Section 280 Implementation), by any of
the following methods:
• Federal eRulemaking portal:
https://www.regulations.gov. Follow the
instructions for submitting comments.
Comments submitted electronically,
including attachments to https://
www.regulations.gov, will be posted to
the docket unchanged.
• Mail: Social Security
Administration, OLCA, 3100 West High
Rise, 6401 Security Blvd. Baltimore,
MD. ATTN: Reports Clearance Director,
Improving Customer Experience (OMB
Circular A–11, Section 280
Implementation).
Instructions: Please submit comments
only and cite Information Collection
0960–XXXX, Improving Customer
Experience (OMB Circular A–11,
Section 280 Implementation) in all
correspondence related to this
collection. To confirm receipt of your
comment(s), please check
regulations.gov, approximately two-tothree business days after submission to
verify posting (except allow 30 days for
posting of comments submitted by
mail).
SUPPLEMENTARY INFORMATION:
Title: Improving Customer Experience
(OMB Circular A–11, Section 280
Implementation).
Abstract: A modern, streamlined and
responsive customer experience means:
Raising government-wide customer
experience to the average of the private
sector service industry; developing
indicators for high-impact Federal
programs to monitor progress towards
excellent customer experience and
mature digital services; and providing
the structure (including increasing
transparency) and resources to ensure
customer experience is a focal point for
agency leadership.
This proposed information collection
activity provides a means to garner
customer and stakeholder feedback in
an efficient, timely manner in
accordance with the Administration’s
E:\FR\FM\09JNN1.SGM
09JNN1
]]>Agencies
[Federal Register Volume 85, Number 111 (Tuesday, June 9, 2020)]
[Notices]
[Pages 35358-35360]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-12384]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88999; File No. SR-NYSE-2020-42]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Section 902.02 of the NYSE Listed Company Manual Concerning Pre-
Revenue Companies That Can Qualify for Reduced Listing and Annual Fees
June 3, 2020.
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 May 21, 2020, New York Stock Exchange LLC (``NYSE'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I,
II, and III 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
The Exchange proposes to amend Section 902.02 of the NYSE Listed
Company Manual (the ``Manual'') to modify the definition of a Pre-
Revenue Company contained in that rule. 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
Section 902.02 of the Manual includes a provision providing for
modified listing and annual fees for companies that meet the definition
of a Pre-Revenue Company set forth in that rule. For purposes of this
provision, a ``Pre-Revenue Company'' is a company whose initial listing
date is on or after June 1, 2019, and which has not recorded revenue in
excess of $5 million in either (i) the most recent completed fiscal
year prior to listing or (ii) during the year of listing through the
most recently completed fiscal quarter before the listing date.\4\
---------------------------------------------------------------------------
\4\ The Annual Fees of any company which qualifies as a Pre-
Revenue Company at the time of listing will be calculated quarterly
for the fiscal quarter in which it lists and in each of the
succeeding 12 full fiscal quarters, at a rate of one-fourth of the
applicable Annual Fee rate. The total fees (including Listing Fees
and Annual Fees, but excluding listing fees paid at the time of
initial listing) that may be billed to such an issuer during this
period will be subject to a $25,000 cap in the fiscal quarter in
which the issuer lists and in each of the succeeding 12 full fiscal
quarters. This fee cap is subject to the same exclusions as apply in
relation to the $500,000 per year fee cap described in the
subsection of Section 902.02 entitled ``Total Maximum Fee Payable in
a Calendar Year.'' If there are one or more fiscal quarters
remaining in the calendar year after the conclusion of the period
described herein, the issuer will, on a prorated basis, be billed
the regular Annual Fee subject to the $500,000 total fee cap for the
remainder of that calendar year.
---------------------------------------------------------------------------
In adding the provisions specific to Pre-Revenue Companies,\5\ the
Exchange noted that its Global Market Capitalization Test (as set forth
in Section 102.01C of the Manual) allows the Exchange to list companies
that have not yet recorded any significant revenues, provided the
issuer has at least a $200 million global market capitalization and
meets the other requirements for listing. These companies are typically
engaged in research and development (in many cases they are
biotechnology companies focused on developing new drug candidates) or
are in the early stages of commercialization of a product. Generally, a
company of this kind relies primarily on the proceeds from its initial
public offering to fund its operations. As such, the fees charged by
the Exchange represent a more significant expense for these companies
than they do for other newly-listed companies and in many cases these
fees are an impediment to the Exchange in competing for the listing of
these companies. The adoption of the special provisions applicable to
Pre-Revenue Companies was intended to address the particular
difficulties faced by Pre-Revenue Companies in being able to pay the
Exchange's fees.
---------------------------------------------------------------------------
\5\ See Exchange Act Release No. 85961 (May 29, 2019), 84 FR
25856 (June 4, 2019 (SR-NYSE- 2019-30).
---------------------------------------------------------------------------
Since adopting the provisions for Pre-Revenue Companies, the
Exchange has observed that some companies that would otherwise qualify
as a Pre-Revenue Company will have a single revenue-generating event
that is not typical for a company at that stage in its life cycle. An
event of this nature renders the company ineligible for Pre-Revenue
Company status, notwithstanding the fact that the company has not
previously generated any material revenue and does not have the
prospect of generating any meaningful additional revenue for the
foreseeable future. An example of this sort of one-time revenue event
that the Exchange has observed is a one-time licensing payment received
by a biotechnology company that is otherwise fully engaged in pre-
commercial research and development activity and does not generate any
revenue in the ordinary course. The Exchange believes that a company
that has this sort of event that is anomalous given the nature of that
company's business can still be the kind of company for which the Pre-
Revenue Company provision was designed. Such a company continues to
face the same challenges faced by a Pre-Revenue Company. Consequently,
the Exchange now proposes to amend the definition of a Pre-Revenue
Company to provide that, in determining whether a company qualifies as
a Pre-Revenue Company, the Exchange will exclude from its calculations
any one-time non-recurring revenue items.\6\
---------------------------------------------------------------------------
\6\ The determination of Pre-Revenue Company status is made at
the time of initial listing. Therefore, there are no companies
currently listed that would benefit from the proposed modification
to the definition of Pre-Revenue Company.
---------------------------------------------------------------------------
[[Page 35359]]
The Exchange does not expect there to be a significant number of
listings in which this proposed revision of the definition of a Pre-
Revenue Company would be applicable. Consequently, the proposed rule
change would not affect the Exchange's commitment of resources to its
regulatory oversight of the listing process or its regulatory programs.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\7\ in general, and furthers the
objectives of Section 6(b)(4) \8\ of the Act, in particular, in that it
is designed to provide for the equitable allocation of reasonable dues,
fees, and other charges. The Exchange also believes that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\9\ 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.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4).
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Proposed Change is Reasonable
The Exchange operates in a highly competitive marketplace for the
listing of equity securities. The Commission has repeatedly expressed
its preference for competition over regulatory intervention in
determining prices, products, and services in the securities markets.
The Exchange believes that the ever-shifting market share among the
exchanges with respect to new listings and the transfer of existing
listings between competitor exchanges demonstrates that issuers can
choose different listing markets in response to fee changes.
Accordingly, competitive forces constrain exchange listing fees. Stated
otherwise, changes to exchange listing fees can have a direct effect on
the ability of an exchange to compete for new listings and retain
existing listings.
Given this competitive environment, the Exchange believes that the
proposed fee waivers are reasonable because the cost of paying initial
listing fees and Annual acts as a disincentive to listing on the
Exchange for companies that do not yet generate significant recurring
revenues.
The Proposal is an Equitable Allocation of Fees
The Exchange believes that the proposal is equitable as it is
designed to address an anomaly in the treatment of companies that are
similar in nature to companies that meet the current definition of a
Pre-Revenue Company.
The Proposal is Not Unfairly Discriminatory
The Exchange believes that the proposal is not unfairly
discriminatory because the proposed waive is designed solely to avoid
the impact on a small group of issuers of an anomalous fee outcome
arising from the manner in which a one-time nonrecurring event causes
them to be treated differently for fee purposes than companies that are
similar to them in every other respect. Occasionally, a company will
receive a one-time non-recurring payment that causes it to be
ineligible for treatment as a Pre-Revenue Company for fee purposes,
notwithstanding the fact that it has not generated any recurring stream
of ordinary course revenue in the past and does not expect to do so for
the foreseeable future. A company in this situation is subject to the
same ongoing financial challenges as other companies that meet the
definition of a Pre-Revenue Company and the Exchange believes that it
is consistent with the purpose of the modified listing fees for a Pre-
Revenue Company to modify the definition of such a company to include a
company that would qualify but for the existence of a one-time, non-
recurring revenue item.
Finally, the Exchange believes that it is subject to significant
competitive forces, as described below in the Exchange's statement
regarding the burden on competition.
For the foregoing reasons, the Exchange believes that the proposal
is consistent with the Act.
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.
Intramarket Competition.
The proposed waiver will be available to all similarly situated
issuers on the same basis. The Exchange does not believe that the
proposed modification of the definition of a Pre-Revenue Company will
have any meaningful effect on the competition among issuers listed on
the Exchange.
Intermarket Competition
The Exchange operates in a highly competitive market in which
issuers can readily choose to list new securities on other exchanges
and transfer listings to other exchanges if they deem fee levels at
those other venues to be more favorable. Because competitors are free
to modify their own fees in response, and because issuers may change
their listing venue, the Exchange does not believe its proposed
modification of the definition of a Pre-Revenue Company can impose any
burden on intermarket competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \10\ of the Act and subparagraph (f)(2) of Rule
19b-4 \11\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(2).
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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) \12\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\12\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
[[Page 35360]]
Send an email to [email protected]. Please include
File Number SR-NYSE-2020-42 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-2020-42. 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-NYSE-2020-42 and should be submitted on
or before June 30, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-12384 Filed 6-8-20; 8:45 am]
BILLING CODE 8011-01-P
