Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Section 902.03 of the NYSE Listed Company Manual To Modify Listing and Annual Fees Applicable to Certain Warrants Listed by Foreign Companies, 72016-72018 [2021-27417]
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72016
Federal Register / Vol. 86, No. 241 / Monday, December 20, 2021 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–27419 Filed 12–17–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–621, OMB Control No.
3235–0672, (Electronic Data Collection
System); SEC File No. 270–625, OMB
Control No. 3235–0686, (Form TCR)]
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
khammond on DSKJM1Z7X2PROD with NOTICES
Extensions:
Electronic Data Collection System, Form
TCR
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit an extension for these
two current collections of information to
the Office of Management and Budget
for approval, and to consolidate both
collections of information within OMB
Control No. 3235–0672.
The Commission invites comment on
updates to its Electronic Data Collection
System database (the Database), which
will support information provided by
members of the public who would like
to file an online tip, complaint or
referral (TCR) to the Commission. The
Database will be a web based e-filed
dynamic report based on technology
that pre-populates and establishes a
series of questions based on the data
that the individual enters. The
individual will then complete specific
information on the subject(s) and nature
of the suspicious activity, using the data
elements appropriate to the type of
complaint or subject. The information
collection is voluntary. The public
interface to the Database will be
available using the agency’s website,
www.sec.gov. The Commission
estimates that it takes a complainant, on
average, 30 minutes to submit a TCR
through the Database. Based on the
receipt of an average of approximately
28,000 annual TCRs for the past three
fiscal years, the Commission estimates
19 17
CFR 200.30–3(a)(12).
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that the annual reporting burden is
14,000 hours.
The Commission further invites
comment on updates to Form TCR,
which is a hard copy form adopted by
the Commission in 2011.1 Form TCR
may be submitted by whistleblowers
who wish to provide information to the
Commission and its staff regarding
potential violations of the federal
securities laws. The Commission
estimates that it takes a whistleblower,
on average, one and one half hours to
complete Form TCR. Based on the
receipt of an average of approximately
560 annual Form TCR submissions for
the past three fiscal years, the
Commission estimates that the annual
reporting burden of Form TCR is 840
hours.
Written comments are invited on: (a)
Whether this collection of information
is necessary for the proper performance
of the functions of the agency, including
whether the information will have
practical utility; (b) the accuracy of the
agency’s estimate of the burden imposed
by the collection of information; (c)
ways to enhance the quality, utility, and
clarity of the information collected; and
(d) ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Consideration will be given to
comments and suggestions submitted in
writing within 60 days of this
publication. Please direct your written
comments to David Bottom, Director/
Chief Information Officer, Securities
and Exchange Commission, c/o John R.
Pezzullo, 100 F St. NE, Washington DC
20549; or send an email to: PRA_
Mailbox@sec.gov.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on December
1, 2021, New York Stock Exchange LLC
(‘‘NYSE’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
Dated: December 15, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–NYSE–2021–52; File No.
SR–NYSE–2021–52]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
Section 902.03 of the NYSE Listed
Company Manual To Modify Listing
and Annual Fees Applicable to Certain
Warrants Listed by Foreign Companies
December 14, 2021.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Section 902.03 of the NYSE Listed
Company Manual (the ‘‘Manual’’) to
modify the listing fees applicable to
warrants listed by foreign companies
whose listed ADRs represent multiple
shares or a fraction of a share. 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.
[FR Doc. 2021–27499 Filed 12–17–21; 8:45 am]
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.
BILLING CODE P
1 Implementation of the Whistleblower Provisions
of Section 21F of the Securities Exchange Act of
1934, Release No. 34–64545; File No. S7–33–10
(adopted May 25, 2011).
PO 00000
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1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Section 902.03 of the Manual sets
forth initial listing fees and annual fees
applicable to listed warrants. Initial
listing fees for warrants are charged on
a per warrant basis.
In many cases, foreign issuers list
their equity securities on the Exchange
in the form of American Depositary
Receipts (‘‘ADRs’’). In some instances, a
listed ADR will represent a single
underlying common share, but in other
cases the listed ADR will represent
multiple underlying common shares or
a fraction of an underlying common
share.
To the extent a company with listed
ADRs representing multiple underlying
common shares or a fraction of an
underlying common share seeks to list
warrants to purchase common shares,
this transaction could result in a
numerical discrepancy between the
number of warrants issued and the
number of ADRs that could be created
if those warrants were fully exercised.
For example: A company’s listed ADRs
each represent five underlying common
shares. The company issues and lists
five million warrants, each exercisable
for a single share. If the warrants are
fully exercised, this will result in the
issuance of five million shares. If those
shares are all converted into the listed
ADRs, the five million shares issued
would result in the creation of one
million ADRs.
A discrepancy between the number of
warrants issued and the number of
ADRs post-conversion results in a very
different billing outcome than would be
the case for a company that lists its
common shares directly or lists ADRs
each of which represents a single
underlying common share. In those
cases, a listed company seeking to issue
warrants exercisable into one million
units of its listed equity security would
issue one million warrants, rather than
the five million warrants issued in the
example set forth above, and would
therefore pay only one-fifth of the initial
listing and annual fees for the warrant
listing as compared to the company
whose ADRs represent five underlying
common shares.
The Exchange proposes to amend
Section 902.03 to charge annual and
listing fees for warrants listed on ADRs
on an ADR-equivalent basis.
Specifically:
• Listing Fees for Warrants Relating
to Listed ADRs. If a listed company’s
primary listed security is an ADR and it
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lists warrants that are exercisable into
the equity security underlying such
ADRs, it will be charged initial listing
fees for the warrants adjusted to reflect
the maximum number of ADRs that
could be created upon exercise of such
warrants.
Example A: An issuer whose primary
listed security is an ADR representing
five shares of its common stock lists five
million warrants, each exercisable into
a single share of the common stock. The
issuer will be billed for listing fees for
one million warrants (i.e., adjusted to
reflect the number of ADRs that could
be created with five million shares).
Example B: An issuer whose primary
listed security is an ADR representing
one-fifth of a share of its common stock
lists one million warrants, each
exercisable into one share of the
common stock. The issuer will be billed
for initial listing and annual fees for five
million warrants (i.e., adjusted to reflect
the number of ADRs that could be
created with one million shares).4
• Annual Fees for Warrants Relating
to Listed ADRs. If a listed company’s
primary listed security is an ADR and it
lists warrants that are exercisable into
the equity security underlying such
ADRs, it will be charged annual fees for
the outstanding warrants adjusted to
reflect the maximum number of ADRs
that could be created upon exercise of
such warrants. Example: An issuer
whose primary listed security is an ADR
representing five shares of its common
stock, has a listed class of warrants each
exercisable into a single share of the
common stock, with five million
warrants outstanding. The issuer will be
billed for annual fees for one million
warrants (i.e., adjusted to reflect the
number of ADRs that could be created
with five million shares).
The proposed amendments to the
initial and annual fee provisions for
listed warrants would apply to all
warrants exercisable into common
shares that are issued by a listed
company whose primary listed security
is an ADR. In the case of a listed
company whose ADRs represent a
multiple (a fraction) of a common share,
the fees for any warrants issued by the
company that are exercisable into equity
securities underlying the ADR would be
based on an adjustment downward
(upward) of the number of warrants.5
4 Approximately 0.5% of the ADRs currently
listed on the Exchange represent fractional share
interests.
5 The Exchange notes that there is currently just
one warrant listed on the NYSE that is exercisable
into common stock underlying an ADR that is listed
on the NYSE. This listed ADR represents 10 shares
of the common stock.
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72017
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,6 in general, and
furthers the objectives of Section
6(b)(4) 7 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,8 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.
As a preliminary matter, the Exchange
competes for listings with other national
securities exchanges, and companies
can easily choose to list on, or transfer
to, those alternative venues. As a result,
the fees the Exchange can charge listed
companies are constrained by the fees
charged by its competitors and the
Exchange cannot charge prices in a
manner that would be unreasonable,
inequitable, or unfairly discriminatory.
The Exchange believes that the
proposal to charge listing fees for
warrants on an ADR-equivalent basis is
equitable and not unfairly
discriminatory because it would remove
the anomalous outcome that a company
whose listed ADRs represent multiple
underlying common shares must pay
higher fees for the listing of warrants
exercisable into its listed equity
securities than are paid by a company
whose common stock is listed directly
or whose listed ADRs represent a single
common share.
The Exchange recognizes that the
proposal would result in a differential
treatment of warrants issued by
companies with ADRs listed on the
Exchange from that of other issuers of
warrants, leading to lower bills in many
cases for the companies with listed
ADRs. However, the Exchange notes
that companies with listed ADRs that
represent multiple underlying shares (or
fractional shares) face unique
circumstances when deciding how to
structure their warrants. If those
companies want to market their
warrants in both their home market and
6 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
8 15 U.S.C. 78f(b)(5).
7 15
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Federal Register / Vol. 86, No. 241 / Monday, December 20, 2021 / Notices
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the United States, there are clear
advantages to the company and its
investors if the same security is issued
in both markets. In particular, selling
the same security avoids pricing
confusion and, by ensuring complete
fungibility, facilitates the movement of
warrants between the two markets in
aftermarket trading. As the ADRs would
not be traded in the home market and
might not be properly understood by
investors there, it is clear why a
company would make the decision to
issue warrants to purchase a single
common share in both markets rather
than selling warrants to purchase ADRs
in the US market and warrants to
purchase a single share in the home
market. While other categories of listed
companies may also sometimes choose
to issue warrants that are exercisable for
multiple listed common shares or a
fraction of a common share, their
reasons for doing so are not the same
unique market structural reasons that
cause foreign companies to do so when
their listed equity security is an ADR.
Consequently, while the proposal does
result in a different treatment of foreign
companies with listed ADRs in a very
limited circumstance, the Exchange
believes that this proposed difference in
treatment is not unfairly discriminatory.
The Exchange also notes that foreign
companies with listed ADRs would not
always pay lower fees on warrants if
this proposal was adopted. Rather, the
issuer would always pay fees on an
ADR-equivalent basis, which would
result in lower fees if the listed ADR
represents multiple common shares and
higher fees if it represents a fractional
common share.
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 not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed modified warrant listing and
annual fee for issuers whose listed
ADRs represent multiple underlying
common shares will be applicable to all
similarly situated issuers on the same
basis.
The Exchange does not believe that
the proposed amended fees will have
any meaningful effect on the
competition among issuers listed on the
Exchange. 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
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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 fee change 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) 9 of the Act and
subparagraph (f)(2) of Rule 19b–4 10
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) 11 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
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSE–2021–52 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.
9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
11 15 U.S.C. 78s(b)(2)(B).
All submissions should refer to File
Number SR–NYSE–2021–52. 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–2021–52 and should
be submitted on or before January 10,
2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–27417 Filed 12–17–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93777; File No. SR–ISE–
2021–26]
Self-Regulatory Organizations; Nasdaq
ISE, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend ISE’s Pricing
Schedule at Options 7, Section 1,
General Provisions
December 14, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
10 17
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CFR 200.30–3(a)(12).
20DEN1
]]>Agencies
[Federal Register Volume 86, Number 241 (Monday, December 20, 2021)]
[Notices]
[Pages 72016-72018]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-27417]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-NYSE-2021-52; File No. SR-NYSE-2021-52]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Section 902.03 of the NYSE Listed Company Manual To Modify
Listing and Annual Fees Applicable to Certain Warrants Listed by
Foreign Companies
December 14, 2021.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on December 1, 2021, New York Stock Exchange LLC (``NYSE'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the 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 902.03 of the NYSE Listed
Company Manual (the ``Manual'') to modify the listing fees applicable
to warrants listed by foreign companies whose listed ADRs represent
multiple shares or a fraction of a share. 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.
[[Page 72017]]
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
Section 902.03 of the Manual sets forth initial listing fees and
annual fees applicable to listed warrants. Initial listing fees for
warrants are charged on a per warrant basis.
In many cases, foreign issuers list their equity securities on the
Exchange in the form of American Depositary Receipts (``ADRs''). In
some instances, a listed ADR will represent a single underlying common
share, but in other cases the listed ADR will represent multiple
underlying common shares or a fraction of an underlying common share.
To the extent a company with listed ADRs representing multiple
underlying common shares or a fraction of an underlying common share
seeks to list warrants to purchase common shares, this transaction
could result in a numerical discrepancy between the number of warrants
issued and the number of ADRs that could be created if those warrants
were fully exercised. For example: A company's listed ADRs each
represent five underlying common shares. The company issues and lists
five million warrants, each exercisable for a single share. If the
warrants are fully exercised, this will result in the issuance of five
million shares. If those shares are all converted into the listed ADRs,
the five million shares issued would result in the creation of one
million ADRs.
A discrepancy between the number of warrants issued and the number
of ADRs post-conversion results in a very different billing outcome
than would be the case for a company that lists its common shares
directly or lists ADRs each of which represents a single underlying
common share. In those cases, a listed company seeking to issue
warrants exercisable into one million units of its listed equity
security would issue one million warrants, rather than the five million
warrants issued in the example set forth above, and would therefore pay
only one-fifth of the initial listing and annual fees for the warrant
listing as compared to the company whose ADRs represent five underlying
common shares.
The Exchange proposes to amend Section 902.03 to charge annual and
listing fees for warrants listed on ADRs on an ADR-equivalent basis.
Specifically:
Listing Fees for Warrants Relating to Listed ADRs. If a
listed company's primary listed security is an ADR and it lists
warrants that are exercisable into the equity security underlying such
ADRs, it will be charged initial listing fees for the warrants adjusted
to reflect the maximum number of ADRs that could be created upon
exercise of such warrants.
Example A: An issuer whose primary listed security is an ADR
representing five shares of its common stock lists five million
warrants, each exercisable into a single share of the common stock. The
issuer will be billed for listing fees for one million warrants (i.e.,
adjusted to reflect the number of ADRs that could be created with five
million shares).
Example B: An issuer whose primary listed security is an ADR
representing one-fifth of a share of its common stock lists one million
warrants, each exercisable into one share of the common stock. The
issuer will be billed for initial listing and annual fees for five
million warrants (i.e., adjusted to reflect the number of ADRs that
could be created with one million shares).\4\
---------------------------------------------------------------------------
\4\ Approximately 0.5% of the ADRs currently listed on the
Exchange represent fractional share interests.
---------------------------------------------------------------------------
Annual Fees for Warrants Relating to Listed ADRs. If a
listed company's primary listed security is an ADR and it lists
warrants that are exercisable into the equity security underlying such
ADRs, it will be charged annual fees for the outstanding warrants
adjusted to reflect the maximum number of ADRs that could be created
upon exercise of such warrants. Example: An issuer whose primary listed
security is an ADR representing five shares of its common stock, has a
listed class of warrants each exercisable into a single share of the
common stock, with five million warrants outstanding. The issuer will
be billed for annual fees for one million warrants (i.e., adjusted to
reflect the number of ADRs that could be created with five million
shares).
The proposed amendments to the initial and annual fee provisions
for listed warrants would apply to all warrants exercisable into common
shares that are issued by a listed company whose primary listed
security is an ADR. In the case of a listed company whose ADRs
represent a multiple (a fraction) of a common share, the fees for any
warrants issued by the company that are exercisable into equity
securities underlying the ADR would be based on an adjustment downward
(upward) of the number of warrants.\5\
---------------------------------------------------------------------------
\5\ The Exchange notes that there is currently just one warrant
listed on the NYSE that is exercisable into common stock underlying
an ADR that is listed on the NYSE. This listed ADR represents 10
shares of the common stock.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\6\ in general, and furthers the
objectives of Section 6(b)(4) \7\ 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,\8\ 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).
\7\ 15 U.S.C. 78f(b)(4).
\8\ 15 U.S.C. 78f(b)(5).
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As a preliminary matter, the Exchange competes for listings with
other national securities exchanges, and companies can easily choose to
list on, or transfer to, those alternative venues. As a result, the
fees the Exchange can charge listed companies are constrained by the
fees charged by its competitors and the Exchange cannot charge prices
in a manner that would be unreasonable, inequitable, or unfairly
discriminatory.
The Exchange believes that the proposal to charge listing fees for
warrants on an ADR-equivalent basis is equitable and not unfairly
discriminatory because it would remove the anomalous outcome that a
company whose listed ADRs represent multiple underlying common shares
must pay higher fees for the listing of warrants exercisable into its
listed equity securities than are paid by a company whose common stock
is listed directly or whose listed ADRs represent a single common
share.
The Exchange recognizes that the proposal would result in a
differential treatment of warrants issued by companies with ADRs listed
on the Exchange from that of other issuers of warrants, leading to
lower bills in many cases for the companies with listed ADRs. However,
the Exchange notes that companies with listed ADRs that represent
multiple underlying shares (or fractional shares) face unique
circumstances when deciding how to structure their warrants. If those
companies want to market their warrants in both their home market and
[[Page 72018]]
the United States, there are clear advantages to the company and its
investors if the same security is issued in both markets. In
particular, selling the same security avoids pricing confusion and, by
ensuring complete fungibility, facilitates the movement of warrants
between the two markets in aftermarket trading. As the ADRs would not
be traded in the home market and might not be properly understood by
investors there, it is clear why a company would make the decision to
issue warrants to purchase a single common share in both markets rather
than selling warrants to purchase ADRs in the US market and warrants to
purchase a single share in the home market. While other categories of
listed companies may also sometimes choose to issue warrants that are
exercisable for multiple listed common shares or a fraction of a common
share, their reasons for doing so are not the same unique market
structural reasons that cause foreign companies to do so when their
listed equity security is an ADR. Consequently, while the proposal does
result in a different treatment of foreign companies with listed ADRs
in a very limited circumstance, the Exchange believes that this
proposed difference in treatment is not unfairly discriminatory.
The Exchange also notes that foreign companies with listed ADRs
would not always pay lower fees on warrants if this proposal was
adopted. Rather, the issuer would always pay fees on an ADR-equivalent
basis, which would result in lower fees if the listed ADR represents
multiple common shares and higher fees if it represents a fractional
common share.
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 not necessary or appropriate in
furtherance of the purposes of the Act. The proposed modified warrant
listing and annual fee for issuers whose listed ADRs represent multiple
underlying common shares will be applicable to all similarly situated
issuers on the same basis.
The Exchange does not believe that the proposed amended fees will
have any meaningful effect on the competition among issuers listed on
the Exchange. 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 fee change 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) \9\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \10\ thereunder, because it establishes a due, fee, or other charge
imposed by the Exchange.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 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) \11\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\11\ 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-2021-52 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-2021-52. 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-2021-52 and should be submitted on
or before January 10, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-27417 Filed 12-17-21; 8:45 am]
BILLING CODE 8011-01-P
