Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Term “Related Party Transactions” Under Section 314.00 of the NYSE Listed Company Manual, 49064-49066 [2021-18802]
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49064
Federal Register / Vol. 86, No. 167 / Wednesday, September 1, 2021 / Notices
HISTORY:
additional 30-day opportunity to
comment.
The Questionnaire for Non-Sensitive
Positions, SF 85 is an information
collection completed by applicants for,
or incumbents of, Federal Government
civilian positions, or positions in
private entities performing work for the
Federal Government under contract.
The collection is used as the basis of
information for background
investigations to establish that such
persons are:
Suitable for employment or retention
in Federal employment in a low risk,
non-sensitive position, or fit for
employment or retention in Federal
employment in the excepted service
when the duties to be performed are
equivalent to a low risk, non-sensitive
position;
Fit to perform work on behalf of the
Federal Government pursuant to the
Government contract, when the duties
to be performed are equivalent to a low
risk, non-sensitive position;
Eligible for physical and logical
access to federally controlled facilities
or information systems, when the duties
to be performed by the individual are
equivalent to the duties performed by an
employee in a low risk, non-sensitive
position.
For applicants, the SF 85 is to be used
only after a conditional offer of
employment has been made. e-QIP
(Electronic Questionnaires for
Investigations Processing) is a webbased system application that houses
the SF 85. A variable in assessing
burden hours is the nature of the
electronic application. The electronic
application includes branching
questions and instructions which
provide for a tailored collection from
the respondent based on varying factors
in the respondent’s personal history.
The burden on the respondent is
reduced when the respondent’s personal
history is not relevant to particular
question, since the question branches,
or expands for additional details, only
for those persons who have pertinent
information to provide regarding that
line of questioning. Accordingly, the
burden on the respondent will vary
depending on whether the information
collection relates to the respondent’s
personal history.
OPM recommends renewal of the
form without any proposed changes,
except to underlying authorities, which
have been revised in the period since
the last renewal; the Privacy Act
Information Statement, to acknowledge
the transfer of background
investigations files from OPM to the
Defense Counterintelligence and
Security Agency; and the Purpose
PBGC–19, Office of General Counsel
Case Management System (last
published at 83 FR 6270 (February 13,
2018)).
[FR Doc. 2021–18918 Filed 8–31–21; 8:45 am]
BILLING CODE 7709–02–P
OFFICE OF PERSONNEL
MANAGEMENT
Notice of Submission for Renewal of a
Previously Approved Information
Collection: Questionnaire for NonSensitive Positions (SF 85)
Office of Personnel
Management.
ACTION: 30-Day notice and request for
comments.
AGENCY:
The Office of Personnel
Management (OPM), Suitability
Executive Agent Programs, is notifying
the general public and other federal
agencies that OPM proposes to request
the Office of Management and Budget
(OMB) to renew a previously-approved
information collection, Questionnaire
for Non-Sensitive Positions (SF 85).
DATES: Comments are encouraged and
will be accepted until October 1, 2021.
ADDRESSES: Interested persons are
invited to submit written comments on
the proposed information collection to
the Office of Information and Regulatory
Affairs, Office of Management Budget by
the following method: https://
www.regulations.gov. Follow the
instructions for submitting comments.
All submissions received must include
the agency name and docket number for
this document. The general policy for
comments and other submissions from
member of the public is to make these
submissions available for public
viewing at https://www.regulations.gov
as they are received without change,
including any personal identifiers or
contact information.
FOR FURTHER INFORMATION CONTACT: A
copy of this ICR, with applicable
supporting documentation, may be
obtained by contacting Christine
Bilunka, 724–738–1190, ext. 7400, or
the U.S. Office of Personnel
Management, Suitability Executive
Agent Programs, P.O. Box 699, Slippery
Rock, PA 16057, or sent by email to
SuitEA@opm.gov.
SUPPLEMENTARY INFORMATION: This
notice announces that OPM has
submitted to OMB a request for renewal
of a previously-approved information
collection, control number 3206–0261,
Questionnaire for Non-Sensitive
Positions (SF 85). The public has an
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SUMMARY:
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Statement, to make more clear that the
form may be used for investigations for
fitness for appointment to a position in
the excepted service. No other changes
are recommended at this time.
Ongoing assessments will occur to
ensure the SF 85 reflects and collects
pertinent information for the
investigative process and aligns with
governing policies, rules, and
regulations requiring use of this form.
The 60 day Federal Register Notice
was published on June 25, 2021 (86 FR
13524). No comments were received.
Analysis
Agency: Office of Personnel
Management, Suitability Executive
Agent Programs.
Title: Questionnaire for Non-Sensitive
Positions (SF 85).
OMB Number: 3206–0261.
Affected Public: Individuals.
Number of Respondents: 55,040.
Estimated Time per Respondent: 120
minutes.
Total Burden Hours: 110,080.
Office of Personnel Management.
Alexys Stanley,
Regulatory Affairs Analyst.
[FR Doc. 2021–18930 Filed 8–30–21; 11:15 am]
BILLING CODE 6325–66–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–92770; File No. SR–NYSE–
2021–43]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Amending the
Term ‘‘Related Party Transactions’’
Under Section 314.00 of the NYSE
Listed Company Manual
August 26, 2021.
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 August
19, 2021, 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 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).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
E:\FR\FM\01SEN1.SGM
01SEN1
Federal Register / Vol. 86, No. 167 / Wednesday, September 1, 2021 / Notices
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
provisions of Section 314.00 of the
NYSE Listed Company Manual
(‘‘Manual’’) in relation to the review and
approval of related party transactions.
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.
khammond on DSKJM1Z7X2PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Section 314.00 of the Manual
provides that a company’s audit
committee or another independent body
of the board of directors, shall conduct
a reasonable prior review and oversight
of all related party transactions for
potential conflicts of interest and will
prohibit such a transaction if it
determines it to be inconsistent with the
interests of the company and its
shareholders. For purposes of this rule,
the term ‘‘related party transaction’’
refers to transactions required to be
disclosed pursuant to Item 404 of
Regulation S–K under the Act (but
without applying the transaction value
threshold of that provision). In the case
of foreign private issuers, the term
‘‘related party transactions’’ refers to
transactions required to be disclosed
pursuant to Item 7.B of Form 20–F (but
without regard to the materiality
threshold of that provision).
Item 404 of Regulation S–K and Item
7.B of Form 20–F set forth the SEC’s
requirements for the disclosure of
related party transactions by domestic
issuers and foreign private issuers
respectively. Related party transaction
disclosures are required in a number of
SEC filings, including annual reports
and, in the case of domestic issuers,
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17:09 Aug 31, 2021
Jkt 253001
annual meeting proxy statements. Item
404 of Regulation S–K requires
disclosure of a related party transaction
when the amount involved in such
transaction exceeds $120,000.4 Item 7.B
of Form 20–F requires disclosure of
transactions that are ‘‘material to the
company or the related party, or any
transactions that are unusual in their
nature or conditions’’ and also of the
amount of outstanding loans (including
guarantees of any kind) made by the
company, its parent or any of its
subsidiaries to or for the benefit of a
related party. The Exchange proposes to
amend Section 314.00 to provide that
the review and approval requirement of
that rule will be applicable only to
transactions that are required to be
disclosed after taking into account the
transaction value and materiality
thresholds set forth in Item 404 of
Regulation S–K or Item 7.B of Form 20–
F, respectively, as applicable.
The Exchange recently amended
Section 314.00 to provide greater clarity
as to the types of transactions that were
specifically subject to review and
approval under the rule.5 In adopting
that amendment to Section 314.00, the
Exchange sought to create greater clarity
and certainty for issuers by specifying
that the transactions subject to review
would be those that were required to be
disclosed pursuant to Item 404 of
Regulation S–K or Form 20–F, Item 7.B,
as applicable. However, the Exchange
also specified in that amendment that
related party transactions would be
subject to review without regard to the
transaction value or materiality
thresholds included in the SEC’s
disclosure rules.
In the period since the adoption of
that amendment, it has become clear to
the Exchange that the amended rule’s
exclusion of the applicable transaction
value and materiality thresholds is
inconsistent with the historical practice
of many listed companies, and has had
unintended consequences. The
Exchange has learned that many listed
companies have had a longstanding
understanding that they were required
to subject related party transactions to
the review process required by Section
314.00 only if such transactions
exceeded any applicable transaction
value or materiality thresholds in the
applicable SEC rules and therefore were
required to be disclosed. This approach
4 Item 404(c) separately sets forth the application
of Item 404 to promoters and certain control
persons. Item 404(d) separately sets forth the
application of Item 404 to smaller reporting
companies.
5 See Securities Exchange Act Release No. 91471
(April 2, 2021); 86 FR 18362 (April 8, 2021) (SR–
NYSE–2020–85).
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49065
is embodied in the written related party
transaction policies of many listed
companies and is typically a part of the
annual questionnaire completed by
directors and officers in connection
with the company’s annual meeting. By
not permitting the use of transaction
value and materiality thresholds, the
amendment to Section 314.00 has had
the unintended effect of disrupting the
normal course transactions of listed
companies. Because of the amendment,
many companies have been required to
adopt for the first time two separate
standards for related party
transactions—one for disclosure and
another for review and approval of
transactions. This has created a
significant compliance burden for
issuers with respect to small
transactions that are considered
immaterial for purposes of other
regulatory requirements. Furthermore,
the Exchange believes that the review
and approval of large numbers of
immaterial transactions is not an
effective use of the time of independent
directors who have many other timeconsuming oversight obligations with
respect to matters that are higher risk
and more material to the company.
The Exchange notes that domestic
listed companies are also required to
comply with the requirements of
Section 303A of the Manual with
respect to director independence,
including the bright line independence
tests set forth in Section 303A.02(b).
This proposal does not seek in any way
to modify listed companies’ obligation
to comply with the independence
requirements of Section 303A or listed
companies’ obligations to make
disclosures to the Exchange with respect
to their compliance with those
obligations.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b)(5) of the Act,6 in that it is
designed to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest and is
not designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
The Exchange believes that it is
consistent with the protection of
6 15
E:\FR\FM\01SEN1.SGM
U.S.C. 78f(b)(5).
01SEN1
49066
Federal Register / Vol. 86, No. 167 / Wednesday, September 1, 2021 / Notices
investors to amend Section 314.00 to
conform the related party transactions
that are subject to the review and
approval requirements of Section 314.00
to those transactions that are subject to
the applicable requirements of Item 404
of Regulation S–K and Item 7.B of Form
20–F. In adopting the applicable
provisions of Regulation S–K and Form
20–F, the SEC determined which related
party transactions must be publicly
disclosed. The Exchange believes it is
therefore consistent with the protection
of investors to apply the same standards
in determining which transactions
should be subject to review and
approval under Section 314.00. The
Exchange notes that the Nasdaq Stock
Market takes such an approach in its
rule with respect to the review of related
party transactions, which requires the
review of transactions subject to
disclosure under Item 404 of Regulation
S–K and Item 7.B of Form 20–F,
including the transaction value and
materiality thresholds of those
regulations.7
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
All companies listed on the NYSE
will be subject to the amended form of
Section 314.00. Therefore, the Exchange
does not believe that the proposed
amendment will have any meaningful
effect on the competition among issuers
listed on the Exchange.
khammond on DSKJM1Z7X2PROD with NOTICES
Intermarket Competition
The purpose of the proposed
amendment is to provide for an efficient
and transparent framework for the
review and approval of related party
transactions at all listed companies. As
such, it is focused solely on corporate
governance and is not intended to
confer any commercial or competitive
benefit on NYSE listed companies. In
addition, the proposal substantively
conforms Section 314.00 to the related
party transaction approval rule of
Nasdaq, the other primary listing venue
for operating companies in the United
States. For the foregoing reasons, the
Exchange does not believe that the
proposed amendment will have any
meaningful effect on intermarket
competition for the listing of operating
companies.
7 See
Nasdaq Marketplace Rule 5630.
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17:09 Aug 31, 2021
Jkt 253001
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 Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 8 and Rule
19b–4(f)(6) thereunder.9 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, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 10 and Rule 19b–4(f)(6)
thereunder.11
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:
8 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
10 15 U.S.C. 78s(b)(3)(A).
11 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.
12 15 U.S.C. 78s(b)(2)(B).
9 17
PO 00000
Frm 00095
Fmt 4703
Sfmt 4703
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–
NYSE–2021–43 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–2021–43. 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–2021–43 and should
be submitted on or before September 22,
2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2021–18802 Filed 8–31–21; 8:45 am]
BILLING CODE 8011–01–P
13 17
E:\FR\FM\01SEN1.SGM
CFR 200.30–3(a)(12).
01SEN1
]]>Agencies
[Federal Register Volume 86, Number 167 (Wednesday, September 1, 2021)]
[Notices]
[Pages 49064-49066]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-18802]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92770; File No. SR-NYSE-2021-43]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Amending the Term ``Related Party Transactions'' Under Section 314.00
of the NYSE Listed Company Manual
August 26, 2021.
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 August 19, 2021, 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
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.
---------------------------------------------------------------------------
[[Page 49065]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the provisions of Section 314.00 of
the NYSE Listed Company Manual (``Manual'') in relation to the review
and approval of related party transactions. 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 314.00 of the Manual provides that a company's audit
committee or another independent body of the board of directors, shall
conduct a reasonable prior review and oversight of all related party
transactions for potential conflicts of interest and will prohibit such
a transaction if it determines it to be inconsistent with the interests
of the company and its shareholders. For purposes of this rule, the
term ``related party transaction'' refers to transactions required to
be disclosed pursuant to Item 404 of Regulation S-K under the Act (but
without applying the transaction value threshold of that provision). In
the case of foreign private issuers, the term ``related party
transactions'' refers to transactions required to be disclosed pursuant
to Item 7.B of Form 20-F (but without regard to the materiality
threshold of that provision).
Item 404 of Regulation S-K and Item 7.B of Form 20-F set forth the
SEC's requirements for the disclosure of related party transactions by
domestic issuers and foreign private issuers respectively. Related
party transaction disclosures are required in a number of SEC filings,
including annual reports and, in the case of domestic issuers, annual
meeting proxy statements. Item 404 of Regulation S-K requires
disclosure of a related party transaction when the amount involved in
such transaction exceeds $120,000.\4\ Item 7.B of Form 20-F requires
disclosure of transactions that are ``material to the company or the
related party, or any transactions that are unusual in their nature or
conditions'' and also of the amount of outstanding loans (including
guarantees of any kind) made by the company, its parent or any of its
subsidiaries to or for the benefit of a related party. The Exchange
proposes to amend Section 314.00 to provide that the review and
approval requirement of that rule will be applicable only to
transactions that are required to be disclosed after taking into
account the transaction value and materiality thresholds set forth in
Item 404 of Regulation S-K or Item 7.B of Form 20-F, respectively, as
applicable.
---------------------------------------------------------------------------
\4\ Item 404(c) separately sets forth the application of Item
404 to promoters and certain control persons. Item 404(d) separately
sets forth the application of Item 404 to smaller reporting
companies.
---------------------------------------------------------------------------
The Exchange recently amended Section 314.00 to provide greater
clarity as to the types of transactions that were specifically subject
to review and approval under the rule.\5\ In adopting that amendment to
Section 314.00, the Exchange sought to create greater clarity and
certainty for issuers by specifying that the transactions subject to
review would be those that were required to be disclosed pursuant to
Item 404 of Regulation S-K or Form 20-F, Item 7.B, as applicable.
However, the Exchange also specified in that amendment that related
party transactions would be subject to review without regard to the
transaction value or materiality thresholds included in the SEC's
disclosure rules.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 91471 (April 2,
2021); 86 FR 18362 (April 8, 2021) (SR-NYSE-2020-85).
---------------------------------------------------------------------------
In the period since the adoption of that amendment, it has become
clear to the Exchange that the amended rule's exclusion of the
applicable transaction value and materiality thresholds is inconsistent
with the historical practice of many listed companies, and has had
unintended consequences. The Exchange has learned that many listed
companies have had a longstanding understanding that they were required
to subject related party transactions to the review process required by
Section 314.00 only if such transactions exceeded any applicable
transaction value or materiality thresholds in the applicable SEC rules
and therefore were required to be disclosed. This approach is embodied
in the written related party transaction policies of many listed
companies and is typically a part of the annual questionnaire completed
by directors and officers in connection with the company's annual
meeting. By not permitting the use of transaction value and materiality
thresholds, the amendment to Section 314.00 has had the unintended
effect of disrupting the normal course transactions of listed
companies. Because of the amendment, many companies have been required
to adopt for the first time two separate standards for related party
transactions--one for disclosure and another for review and approval of
transactions. This has created a significant compliance burden for
issuers with respect to small transactions that are considered
immaterial for purposes of other regulatory requirements. Furthermore,
the Exchange believes that the review and approval of large numbers of
immaterial transactions is not an effective use of the time of
independent directors who have many other time-consuming oversight
obligations with respect to matters that are higher risk and more
material to the company.
The Exchange notes that domestic listed companies are also required
to comply with the requirements of Section 303A of the Manual with
respect to director independence, including the bright line
independence tests set forth in Section 303A.02(b). This proposal does
not seek in any way to modify listed companies' obligation to comply
with the independence requirements of Section 303A or listed companies'
obligations to make disclosures to the Exchange with respect to their
compliance with those obligations.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b)(5) of the Act,\6\ 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.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that it is consistent with the protection of
[[Page 49066]]
investors to amend Section 314.00 to conform the related party
transactions that are subject to the review and approval requirements
of Section 314.00 to those transactions that are subject to the
applicable requirements of Item 404 of Regulation S-K and Item 7.B of
Form 20-F. In adopting the applicable provisions of Regulation S-K and
Form 20-F, the SEC determined which related party transactions must be
publicly disclosed. The Exchange believes it is therefore consistent
with the protection of investors to apply the same standards in
determining which transactions should be subject to review and approval
under Section 314.00. The Exchange notes that the Nasdaq Stock Market
takes such an approach in its rule with respect to the review of
related party transactions, which requires the review of transactions
subject to disclosure under Item 404 of Regulation S-K and Item 7.B of
Form 20-F, including the transaction value and materiality thresholds
of those regulations.\7\
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\7\ See Nasdaq Marketplace Rule 5630.
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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.
Intramarket Competition
All companies listed on the NYSE will be subject to the amended
form of Section 314.00. Therefore, the Exchange does not believe that
the proposed amendment will have any meaningful effect on the
competition among issuers listed on the Exchange.
Intermarket Competition
The purpose of the proposed amendment is to provide for an
efficient and transparent framework for the review and approval of
related party transactions at all listed companies. As such, it is
focused solely on corporate governance and is not intended to confer
any commercial or competitive benefit on NYSE listed companies. In
addition, the proposal substantively conforms Section 314.00 to the
related party transaction approval rule of Nasdaq, the other primary
listing venue for operating companies in the United States. For the
foregoing reasons, the Exchange does not believe that the proposed
amendment will have any meaningful effect on intermarket competition
for the listing of operating companies.
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 Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\
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\8\ 15 U.S.C. 78s(b)(3)(A)(iii).
\9\ 17 CFR 240.19b-4(f)(6).
\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 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) \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
Send an email to [email protected]. Please include
File Number SR-NYSE-2021-43 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-2021-43. 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-2021-43 and should be submitted on
or before September 22, 2021.
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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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2021-18802 Filed 8-31-21; 8:45 am]
BILLING CODE 8011-01-P
