Self-Regulatory Organizations; New York Stock Exchange LLC; Order Approving of a Proposed Rule Change To Amend the Shareholder Voting Requirement Set Forth in Section 312.07 of the NYSE Listed Company Manual, 67507-67509 [2021-25755]
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Federal Register / Vol. 86, No. 225 / Friday, November 26, 2021 / Notices
to negotiated service agreement(s). The
request(s) may propose the addition or
removal of a negotiated service
agreement from the market dominant or
the competitive product list, or the
modification of an existing product
currently appearing on the market
dominant or the competitive product
list.
Section II identifies the docket
number(s) associated with each Postal
Service request, the title of each Postal
Service request, the request’s acceptance
date, and the authority cited by the
Postal Service for each request. For each
request, the Commission appoints an
officer of the Commission to represent
the interests of the general public in the
proceeding, pursuant to 39 U.S.C. 505
(Public Representative). Section II also
establishes comment deadline(s)
pertaining to each request.
The public portions of the Postal
Service’s request(s) can be accessed via
the Commission’s website (https://
www.prc.gov). Non-public portions of
the Postal Service’s request(s), if any,
can be accessed through compliance
with the requirements of 39 CFR
3011.301.1
The Commission invites comments on
whether the Postal Service’s request(s)
in the captioned docket(s) are consistent
with the policies of title 39. For
request(s) that the Postal Service states
concern market dominant product(s),
applicable statutory and regulatory
requirements include 39 U.S.C. 3622, 39
U.S.C. 3642, 39 CFR part 3030, and 39
CFR part 3040, subpart B. For request(s)
that the Postal Service states concern
competitive product(s), applicable
statutory and regulatory requirements
include 39 U.S.C. 3632, 39 U.S.C. 3633,
39 U.S.C. 3642, 39 CFR part 3035, and
39 CFR part 3040, subpart B. Comment
deadline(s) for each request appear in
section II.
jspears on DSK121TN23PROD with NOTICES1
II. Docketed Proceeding(s)
1. Docket No(s).: MC2022–21 and
CP2022–23; Filing Title: USPS Request
to Add Priority Mail & First-Class
Package Service Contract 209 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: November 19, 2021;
Filing Authority: 39 U.S.C. 3642, 39 CFR
3040.130 through 3040.135, and 39 CFR
3035.105; Public Representative:
Kenneth R. Moeller; Comments Due:
November 30, 2021.
1 See Docket No. RM2018–3, Order Adopting
Final Rules Relating to Non-Public Information,
June 27, 2018, Attachment A at 19–22 (Order No.
4679).
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This Notice will be published in the
Federal Register.
Erica A. Barker,
Secretary.
[FR Doc. 2021–25831 Filed 11–24–21; 8:45 am]
BILLING CODE 7710–FW–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
34421; 812–15258]
Bow River Capital Evergreen Fund, et
al.
November 19, 2021.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice.
AGENCY:
Notice of an application under section
6(c) of the Investment Company Act of
1940 (the ‘‘Act’’) for an exemption from
sections 18(a)(2), 18(c) and 18(i) of the
Act, under sections 6(c) and 23(c) of the
Act for an exemption from rule 23c–3
under the Act, for an order pursuant to
section 17(d) of the Act and rule 17d–
1 under the Act.
Summary of Application: Applicants
request an order to permit certain
registered closed-end investment
companies to issue multiple classes of
shares and to impose asset-based
distribution and/or service fees and
early withdrawal charges (‘‘EWCs’’).
Applicants: Bow River Capital
Evergreen Fund (the ‘‘Initial Fund’’),
and Bow River Asset Management LLC
(the ‘‘Adviser’’).
Filing Dates: The application was
filed on August 25, 2021, and amended
on October 12, 2021, and November 5,
2021.
Hearing or Notification of Hearing: An
order granting the requested relief will
be issued unless the Commission orders
a hearing. Interested persons may
request a hearing on any application by
emailing the SEC’s Secretary at
Secretarys-Office@sec.gov and serving
the relevant applicant with a copy of the
request by email, if an email address is
listed for the relevant applicant below,
or personally or by mail, if a physical
address is listed for the relevant
applicant below.
Hearing requests should be received
by the Commission by 5:30 p.m. on
December 14, 2021, and should be
accompanied by proof of service on
applicants, in the form of an affidavit or,
for lawyers, a certificate of service.
Pursuant to rule 0–5 under the Act,
hearing requests should state the nature
of the writer’s interest, any facts bearing
upon the desirability of a hearing on the
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matter, the reason for the request, and
the issues contested. Persons who wish
to be notified of a hearing may request
notification by emailing the
Commission’s Secretary.
Secretary, U.S. Securities
and Exchange Commission, 100 F Street
NE, Washington, DC 20549–1090;
Applicants: 205 Detroit Street, Suite
800, Denver, CO 80206.
ADDRESSES:
Lisa
Reid Ragen, Branch Chief, at (202) 551–
6825 (Division of Investment
Management, Chief Counsel’s Office).
FOR FURTHER INFORMATION CONTACT:
For
Applicants’ representations, legal
analysis, and condition, please refer to
Applicants’ application, dated
November 5, 2021, which may be
obtained via the Commission’s website
by searching for the file number, using
the Company name box, at https://
www.sec.gov/search/search.htm, or by
calling (202) 551–8090.
SUPPLEMENTARY INFORMATION:
For the Commission, by the Division of
Investment Management, under delegated
authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–25722 Filed 11–24–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93629; File No. SR–NYSE–
2021–53]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Order
Approving of a Proposed Rule Change
To Amend the Shareholder Voting
Requirement Set Forth in Section
312.07 of the NYSE Listed Company
Manual
November 19, 2021.
I. Introduction
On September 15, 2021, New York
Stock Exchange LLC (‘‘NYSE’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend Section 312.07 of the NYSE
Listed Company Manual (‘‘Manual’’) to
address the calculation of votes cast
where shareholder approval is required.
The proposed rule change was
published for comment in the Federal
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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67508
Federal Register / Vol. 86, No. 225 / Friday, November 26, 2021 / Notices
Register on October 5, 2021.3 The
Commission received no comment
letters on the proposed rule change.
This order approves the proposed rule
change.
II. Description of the Proposal
jspears on DSK121TN23PROD with NOTICES1
The Exchange proposes to amend
Section 312.07 of the Manual to address
the calculation of ‘‘votes cast’’ when a
matter requires shareholder approval,
particularly as the calculation relates to
abstention votes.4 Section 312.07 of the
Manual currently provides that where
shareholder approval is a prerequisite to
the listing of any additional or new
securities of a listed company, or where
any matter requires shareholder
approval, the minimum vote which will
constitute shareholder approval for such
purposes is defined as approval by a
majority of votes cast on a proposal in
a proxy bearing on the particular
matter.5 The Exchanges states that the
text of Section 312.07 of the Manual
does not specifically address a listed
company’s treatment of abstentions in
the company’s calculation of votes cast
by shareholders.6 However, the
Exchange states that it has historically
advised companies that abstentions
should be treated as votes cast for
purposes of Section 312.07 of the
Manual.7 According to the Exchange,
under that approach a proposal is
deemed approved under Section 312.07
of the Manual only if the votes in favor
of the proposal exceed the aggregate of
the votes cast against the proposal plus
abstentions.8 The Exchange states that
its current treatment of abstentions has
caused confusion among listed
companies because the corporate laws
of many states, including Delaware,
allow companies to include in their
governing documents that votes cast for
purposes of a shareholder vote includes
yes and no votes—but not abstentions—
such that a proposal succeeds if the
3 See Securities Exchange Act Release No. 93192
(September 29, 2021), 86 FR 55071 (‘‘Notice’’).
4 See Notice, supra note 3, 86 FR 55072.
5 According to the Exchange, shareholder
approval is required for equity compensation plans
under Sections 303A.08 of the Manual
(‘‘Shareholder Approval of Equity Compensation
Plans’’) and in the specific situations set out in
312.03 of the Manual (‘‘Shareholder Approval’’).
See Id. The Exchange also notes that Item 21(b) of
Schedule 14A requires companies soliciting proxies
to disclose the method by which votes will be
counted, including the treatment and effect of
abstentions and broker non-votes under applicable
state law as well as the company’s charter and
bylaw provisions. See Id.
6 See Notice, supra note 3, at 55072.
7 See Id.
8 See Id.
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votes in favor exceed the votes cast
against.9
To avoid further confusion, the
Exchange proposes to amend Section
312.07 to provide that with respect to a
matter that requires shareholder
approval subject to the minimum vote
required for such shareholder approval
under Section 312.07, a company must
calculate the votes cast in accordance
with its own governing documents and
any applicable state law.10 The
Exchange believes that this treatment of
abstentions will avoid any
complications engendered among
issuers and shareholders when different
voting standards are applied under the
Exchange rule, a company’s governing
documents, and/or applicable state
laws.11
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange.12 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,13 which requires,
among other things, that the rules of a
national securities exchange be
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, 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
are not designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
The Exchange is proposing to amend
Section 312.07 of the Manual to make
clear how to calculate the votes cast
when any matter requires shareholder
approval to be approved by a majority
of votes cast under Section 312.07,
particularly to address the calculation as
it relates to abstention votes. As
described above, the Exchange is
9 See Id. The Exchange added that, consistent
with those state laws, many public companies have
bylaws indicating that abstentions are not treated as
votes cast. See Id.
10 See Id. The Exchange notes that while Nasdaq
is silent on the treatment of abstentions in its rules,
Nasdaq published a FAQ stating that companies
must calculate voting in accordance with their own
governing documents and applicable state law. See
Id.
11 See Id.
12 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
13 15 U.S.C. 78f(b)(5).
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proposing to amend Section 312.07 of
the Manual to provide that for purposes
of calculating shareholder approval, a
company must calculate the votes cast
in accordance with its governing
documents and any applicable state
law.14 The Exchange’s proposal, as it
states in its filing, does not prescribe a
particular way to calculate votes cast
under Section 312.07 of the Manual but
rather allows a listed company to rely
on its governing documents and state
law and is a change from the Exchange’s
historical interpretation on how to
calculate abstentions for purposes of
votes cast under Section 312.07 of the
Manual. While the proposed
amendment to Section 312.07 of the
Manual does not address the treatment
of abstentions explicitly, the
Commission believes the proposed
changes to Section 312.07 of the Manual
provides clear guidance to a listed
company that the company’s own
governing documents and the state law
applicable to such listed company must
govern the way that a company
calculates votes cast on a matter for
purposes of meeting the minimum vote
requirements under the Exchange’s rule.
As such, the proposed rule language
will make clear that the listed
company’s own governing documents
and applicable state law also will
govern how a listed company should
count abstentions. As a result, the
Commission believes that the proposed
amendment is consistent with Section
6(b)(5) of the Act because it will add
clarity to the Exchange’s rules and help
eliminate any confusion about what
authority governs the treatment of votes
cast in general and abstentions in
particular, including the possibility that
the Exchange’s own guidance about the
treatment of abstentions might conflict
with the treatment of abstentions under
the listed company’s governing
documents or state law applicable to
such listed company.
Finally, by setting forth in the
Exchange’s rules that corporate
documents and applicable state law
should be relied on by all listed
companies and shareholders in
determining how votes cast are
calculated, including the treatment of
abstentions, for purposes of determining
whether a matter meets the minimum
vote requirements (i.e., ‘‘a majority of
votes cast’’) of Section 312.07, the
proposal should provide transparency to
14 The Exchange noted that Nasdaq has an FAQ
that is also consistent with this approach. See supra
note 10.
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Federal Register / Vol. 86, No. 225 / Friday, November 26, 2021 / Notices
market participants consistent with the
Act.15
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,16 that the
proposed rule change (SR–NYSE–2021–
53) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–25755 Filed 11–24–21; 8:45 am]
BILLING CODE 8011–01–P
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93633; File No. SR–
EMERALD–2021–41]
Self-Regulatory Organizations; MIAX
Emerald, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Its Fee
Schedule
November 19, 2021.
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 November
8, 2021, MIAX Emerald, LLC (‘‘MIAX
Emerald’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
jspears on DSK121TN23PROD with NOTICES1
The Exchange is filing a proposal to
amend the MIAX Emerald Fee Schedule
(the ‘‘Fee Schedule’’).
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings/emerald, at MIAX’s principal
office, and at the Commission’s Public
Reference Room.
15 Shareholders should have access to a
company’s governing documents that indicate how
abstentions are treated under the applicable voting
standard, such as articles of incorporation and
bylaws, as they are required to be filed as exhibits
under Item 601 of Regulation S–K for domestic
issuers and under Form 20–F for foreign private
issuers. See also supra note 5 and Item 21 of
Schedule 14A that applies to domestic issuers.
16 Id.
17 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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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
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
1. Purpose
The Exchange proposes to (i) amend
the Fee Schedule to amend the
exchange groupings of options
exchanges within the routing fee table
in Section 1(b) of the Fee Schedule, Fees
for Customer Orders Routed to another
Options Exchange; and (ii) make a
minor, non-substantive edit to correct a
typographical error. The Exchange
initially filed this proposal on October
27, 2021 (SR–EMERALD–2021–35) and
withdrew such filing on November 8,
2021. The Exchange proposes to
implement the fee change effective
November 8, 2021.
Currently, the Exchange assesses
routing fees based upon (i) the origin
type of the order, (ii) whether or not it
is an order for standard option classes
in the Penny Interval Program 3 (‘‘Penny
classes’’) or an order for standard option
classes which are not in the Penny
Interval Program (‘‘Non-Penny classes’’)
(or other explicitly identified classes),
and (iii) to which away market it is
being routed. This assessment practice
is identical to the routing fees
assessment practice currently utilized
by the Exchange’s affiliates, Miami
International Securities Exchange, LLC
(‘‘MIAX’’) and MIAX PEARL, LLC
(‘‘MIAX Pearl’’). This is also similar to
the methodology utilized by the Cboe
BZX Exchange, Inc. (‘‘Cboe BZX
Options’’), a competing options
exchange, in assessing routing fees.
Cboe BZX Options has exchange
3 See Securities Exchange Act Release No. 88993
(June 2, 2020), 85 FR 35145 (June 8, 2020) (SR–
EMERALD–2020–05) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change
To Amend Exchange Rule 510, Minimum Price
Variations and Minimum Trading Increments, To
Conform the Rule to Section 3.1 of the Plan for the
Purpose of Developing and Implementing
Procedures Designed To Facilitate the Listing and
Trading of Standardized Options).
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67509
groupings in its fee schedule, similar to
those of the Exchange, whereby several
exchanges are grouped into the same
category, dependent upon the order’s
origin type and whether it is a Penny or
Non-Penny class.4
As a result of conducting a periodic
review of the current transaction fees
and rebates charged by away markets,
the Exchange has determined to amend
the exchange groupings of options
exchanges within the routing fee table to
better reflect the associated costs of
routing customer orders to those options
exchanges for execution.5 In particular,
the Exchange proposes to amend the
exchange groupings in the first row of
the table identified as, ‘‘Routed, Priority
Customer, Penny Program,’’ to relocate
Nasdaq BX Options from the first row of
the table to the second, also identified
as, ‘‘Routed, Priority Customer, Penny
Program.’’ The impact of this proposed
change will be that the routing fee for
Priority Customer orders in the Penny
Program that are routed to Nasdaq BX
Options will increase from $0.15 to
$0.65. The purpose of the proposed rule
change is to adjust the routing fee for
certain orders routed to Nasdaq BX
Options to reflect the associated costs
for that routed execution.
Next, the Exchange proposes to
amend the exchange groupings in the
third row of the table, identified as
‘‘Routed, Priority Customer, Non-Penny
Program,’’ to relocate Nasdaq BX
Options from the third row of the table
to the fourth, also identified as,
‘‘Routed, Priority Customer, Non-Penny
Program.’’ The impact of this proposed
change will be that the routing fee for
Priority Customer orders in the NonPenny Program that are routed to
Nasdaq BX Options will increase from
$0.15 to $1.00. The purpose of the
proposed rule change is to adjust the
routing fee for certain orders routed to
Nasdaq BX Options to reflect the
associated costs for that routed
execution.
Next, the Exchange proposes to
amend the exchange groupings in the
sixth row of the table identified as,
‘‘Routed, Public Customer that is not a
Priority Customer, Non-Penny
Program,’’ to relocate Nasdaq ISE from
4 See Cboe U.S. Options Fee Schedules, BZX
Options, effective August 2, 2021, ‘‘Fee Codes and
Associated Fees,’’ at https://www.cboe.com/us/
options/membership/fee_schedule/bzx/.
5 Nasdaq BX established a Customer Taker fee of
$0.46 in Penny Classes and $0.65 in Non-Penny
Classes. See Securities Exchange Act Release No.
91473 (April 5, 2021), 86 FR 18562 (April 9, 2021)
(SR–BX–2021–009). Nasdaq BX recently increased
the Customer Taker fee in Non-Penny Classes from
$0.65 to $0.79. See Securities Exchange Act Release
No. 93121 (September 24, 2021), 86 FR 54259
(September 30, 2021) (SR–BX–2021–040).
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]]>Agencies
[Federal Register Volume 86, Number 225 (Friday, November 26, 2021)]
[Notices]
[Pages 67507-67509]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-25755]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93629; File No. SR-NYSE-2021-53]
Self-Regulatory Organizations; New York Stock Exchange LLC; Order
Approving of a Proposed Rule Change To Amend the Shareholder Voting
Requirement Set Forth in Section 312.07 of the NYSE Listed Company
Manual
November 19, 2021.
I. Introduction
On September 15, 2021, New York Stock Exchange LLC (``NYSE'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend Section 312.07 of the NYSE Listed Company
Manual (``Manual'') to address the calculation of votes cast where
shareholder approval is required. The proposed rule change was
published for comment in the Federal
[[Page 67508]]
Register on October 5, 2021.\3\ The Commission received no comment
letters on the proposed rule change. This order approves the proposed
rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 93192 (September 29,
2021), 86 FR 55071 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposal
The Exchange proposes to amend Section 312.07 of the Manual to
address the calculation of ``votes cast'' when a matter requires
shareholder approval, particularly as the calculation relates to
abstention votes.\4\ Section 312.07 of the Manual currently provides
that where shareholder approval is a prerequisite to the listing of any
additional or new securities of a listed company, or where any matter
requires shareholder approval, the minimum vote which will constitute
shareholder approval for such purposes is defined as approval by a
majority of votes cast on a proposal in a proxy bearing on the
particular matter.\5\ The Exchanges states that the text of Section
312.07 of the Manual does not specifically address a listed company's
treatment of abstentions in the company's calculation of votes cast by
shareholders.\6\ However, the Exchange states that it has historically
advised companies that abstentions should be treated as votes cast for
purposes of Section 312.07 of the Manual.\7\ According to the Exchange,
under that approach a proposal is deemed approved under Section 312.07
of the Manual only if the votes in favor of the proposal exceed the
aggregate of the votes cast against the proposal plus abstentions.\8\
The Exchange states that its current treatment of abstentions has
caused confusion among listed companies because the corporate laws of
many states, including Delaware, allow companies to include in their
governing documents that votes cast for purposes of a shareholder vote
includes yes and no votes--but not abstentions--such that a proposal
succeeds if the votes in favor exceed the votes cast against.\9\
---------------------------------------------------------------------------
\4\ See Notice, supra note 3, 86 FR 55072.
\5\ According to the Exchange, shareholder approval is required
for equity compensation plans under Sections 303A.08 of the Manual
(``Shareholder Approval of Equity Compensation Plans'') and in the
specific situations set out in 312.03 of the Manual (``Shareholder
Approval''). See Id. The Exchange also notes that Item 21(b) of
Schedule 14A requires companies soliciting proxies to disclose the
method by which votes will be counted, including the treatment and
effect of abstentions and broker non-votes under applicable state
law as well as the company's charter and bylaw provisions. See Id.
\6\ See Notice, supra note 3, at 55072.
\7\ See Id.
\8\ See Id.
\9\ See Id. The Exchange added that, consistent with those state
laws, many public companies have bylaws indicating that abstentions
are not treated as votes cast. See Id.
---------------------------------------------------------------------------
To avoid further confusion, the Exchange proposes to amend Section
312.07 to provide that with respect to a matter that requires
shareholder approval subject to the minimum vote required for such
shareholder approval under Section 312.07, a company must calculate the
votes cast in accordance with its own governing documents and any
applicable state law.\10\ The Exchange believes that this treatment of
abstentions will avoid any complications engendered among issuers and
shareholders when different voting standards are applied under the
Exchange rule, a company's governing documents, and/or applicable state
laws.\11\
---------------------------------------------------------------------------
\10\ See Id. The Exchange notes that while Nasdaq is silent on
the treatment of abstentions in its rules, Nasdaq published a FAQ
stating that companies must calculate voting in accordance with
their own governing documents and applicable state law. See Id.
\11\ See Id.
---------------------------------------------------------------------------
III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\12\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\13\ which
requires, among other things, that the rules of a national securities
exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, 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 are not designed to permit unfair discrimination
between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\12\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange is proposing to amend Section 312.07 of the Manual to
make clear how to calculate the votes cast when any matter requires
shareholder approval to be approved by a majority of votes cast under
Section 312.07, particularly to address the calculation as it relates
to abstention votes. As described above, the Exchange is proposing to
amend Section 312.07 of the Manual to provide that for purposes of
calculating shareholder approval, a company must calculate the votes
cast in accordance with its governing documents and any applicable
state law.\14\ The Exchange's proposal, as it states in its filing,
does not prescribe a particular way to calculate votes cast under
Section 312.07 of the Manual but rather allows a listed company to rely
on its governing documents and state law and is a change from the
Exchange's historical interpretation on how to calculate abstentions
for purposes of votes cast under Section 312.07 of the Manual. While
the proposed amendment to Section 312.07 of the Manual does not address
the treatment of abstentions explicitly, the Commission believes the
proposed changes to Section 312.07 of the Manual provides clear
guidance to a listed company that the company's own governing documents
and the state law applicable to such listed company must govern the way
that a company calculates votes cast on a matter for purposes of
meeting the minimum vote requirements under the Exchange's rule. As
such, the proposed rule language will make clear that the listed
company's own governing documents and applicable state law also will
govern how a listed company should count abstentions. As a result, the
Commission believes that the proposed amendment is consistent with
Section 6(b)(5) of the Act because it will add clarity to the
Exchange's rules and help eliminate any confusion about what authority
governs the treatment of votes cast in general and abstentions in
particular, including the possibility that the Exchange's own guidance
about the treatment of abstentions might conflict with the treatment of
abstentions under the listed company's governing documents or state law
applicable to such listed company.
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\14\ The Exchange noted that Nasdaq has an FAQ that is also
consistent with this approach. See supra note 10.
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Finally, by setting forth in the Exchange's rules that corporate
documents and applicable state law should be relied on by all listed
companies and shareholders in determining how votes cast are
calculated, including the treatment of abstentions, for purposes of
determining whether a matter meets the minimum vote requirements (i.e.,
``a majority of votes cast'') of Section 312.07, the proposal should
provide transparency to
[[Page 67509]]
market participants consistent with the Act.\15\
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\15\ Shareholders should have access to a company's governing
documents that indicate how abstentions are treated under the
applicable voting standard, such as articles of incorporation and
bylaws, as they are required to be filed as exhibits under Item 601
of Regulation S-K for domestic issuers and under Form 20-F for
foreign private issuers. See also supra note 5 and Item 21 of
Schedule 14A that applies to domestic issuers.
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IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\16\ that the proposed rule change (SR-NYSE-2021-53) be, and hereby
is, approved.
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\16\ Id.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-25755 Filed 11-24-21; 8:45 am]
BILLING CODE 8011-01-P
