Self-Regulatory Organizations; Long-Term Stock Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Modify and Expand the Package of Products and Services Provided to Companies and Clarify Existing Practice Under Rule 14.602, 72296-72300 [2021-27542]
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Federal Register / Vol. 86, No. 242 / Tuesday, December 21, 2021 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93786; File No. SR–BOX–
2021–14]
Self-Regulatory Organizations; BOX
Exchange LLC; Notice of Designation
of Longer Period for Commission
Action on Proceedings To Determine
Whether To Approve or Disapprove a
Proposed Rule Change, as Modified by
Amendment No. 1, in Connection With
the Proposed Establishment of BSTX
as a Facility of the Exchange
December 15, 2021.
On June 7, 2021, BOX Exchange LLC
(‘‘Exchange’’ or ‘‘BOX’’) 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
adopt rules in connection with the
establishment of BSTX LLC as a facility
of the Exchange. The proposed rule
change was published for comment in
the Federal Register on June 24, 2021.3
On August 3, 2021, pursuant to Section
19(b)(2) of the Act,4 the Commission
designated a longer period within which
to approve the proposed rule change,
disapprove the proposed rule change, or
institute proceedings to determine
whether to disapprove the proposed
rule change.5 On September 16, 2021,
the Exchange filed Amendment No. 1 to
the proposed rule change, which
replaced and superseded the proposed
rule change as originally filed.6 On
September 21, 2021, the Commission
published the proposed rule change, as
modified by Amendment No. 1, for
notice and comment and instituted
proceedings to determine whether to
approve or disapprove the proposed
rule change, as modified by Amendment
No. 1.7
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1 15
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 92206
(June 17, 2021), 86 FR 33402 (‘‘Notice’’). Comments
on the proposed rule change can be found at:
https://www.sec.gov/comments/sr-box-2021-14/
srbox202114.htm.
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 92556,
86 FR 43572 (August 9, 2021). The Commission
designated September 22, 2021, as the date by
which the Commission shall approve or disapprove,
or institute proceedings to determine whether to
approve or disapprove, the proposed rule change.
6 Amendment No. 1 is available on the
Commission’s website at: https://www.sec.gov/
comments/sr-box-2021-14/srbox202114-9251558250847.pdf.
7 See Securities Exchange Act Release No. 93094
(September 21, 2021), 86 FR 53365 (September 27,
2021).
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Section 19(b)(2) of the Act 8 provides
that, after initiating proceedings, the
Commission shall issue an order
approving or disapproving the proposed
rule change not later than 180 days after
the date of publication of notice of filing
of the proposed rule change. The
Commission may extend the period for
issuing an order approving or
disapproving the proposed rule change,
however, by not more than 60 days if
the Commission determines that a
longer period is appropriate and
publishes the reasons for such
determination. The proposed rule
change was published for notice and
comment in the Federal Register on
June 24, 2021.9 December 21, 2021 is
180 days from that date, and February
19, 2022 is 240 days from that date. The
Commission finds it appropriate to
designate a longer period within which
to issue an order approving or
disapproving the proposed rule change
so that it has sufficient time to consider
the proposed rule change. Accordingly,
the Commission, pursuant to Section
19(b)(2) of the Act,10 designates
February 19, 2022 as the date by which
the Commission shall either approve or
disapprove the proposed rule change, as
modified by Amendment No.1 (File No.
SR–BOX–2021–14).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–27541 Filed 12–20–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93787; File No. SR–LTSE–
2021–08]
Self-Regulatory Organizations; LongTerm Stock Exchange, Inc.; Notice of
Filing of a Proposed Rule Change To
Modify and Expand the Package of
Products and Services Provided to
Companies and Clarify Existing
Practice Under Rule 14.602
December 15, 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 December
2, 2021, Long-Term Stock Exchange,
Inc. (‘‘LTSE’’ or ‘‘Exchange’’) filed with
8 15
U.S.C. 78s(b)(2).
Notice, supra note 3.
10 15 U.S.C. 78s(b)(2).
11 17 CFR 200.30–3(a)(57).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
9 See
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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 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
The Exchange proposes to modify and
expand the package of products and
services provided to Companies under
LTSE Rule 14.602 and clarify existing
practice under Rule 14.602 with respect
to providing Company-specific web
pages on the Exchange’s website in
connection with listing on the
Exchange.
The text of the proposed rule change
is available at the Exchange’s website at
https://longtermstockexchange.com/, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement 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 these statements may be examined at
the places specified in Item IV below.
The self-regulatory organization has
prepared summaries, set forth in
Sections A, B, and C below, of the most
significant aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange offers complimentary
promotional services and listing
ceremonies under Rule 14.602 in
connection with a Company’s approval
for listing on the Exchange. The
promotional services are tailored to
meet the needs of the Company, and
allow the Company access to media
services that would support the creation
of press releases, articles, videos, and
podcasts featuring the Company and its
personnel.3 These promotional services
3 See Securities Exchange Act Release No. 91054
(February 3, 2021), 86 FR 8812 (February 9, 2021)
(SR–LTSE–2020–22) (regarding provision of
promotional services and listing ceremonies for
listed companies).
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also include assistance with distributing
such content on traditional and social
media platforms, including websites
operated by the Exchange.4 The
Exchange also proposes to amend Rule
14.602 to clarify existing practice with
respect to providing Company-specific
web pages on the Exchange’s website in
connection with listing on the
Exchange.
Under existing Rule 14.602, the
Exchange also offers each Company a
complimentary listing ceremony to
commemorate its listing on the
Exchange. A full suite of these
promotional services and listing
ceremonies are developed through the
Exchange’s affiliate company, LTSE
Services, Inc. (‘‘LTSE Services’’) 5 and
offered to each Company approved to
list on the Exchange. Some Companies
may choose to avail themselves of all
such services, whereas others may
choose only a subset of services or none.
Since Rule 14.602 was approved, two
companies have listed on LTSE.6 Based
on LTSE’s experience with offering the
services discussed above under Rule
14.602, in response to the need for
continued services to the listed
Companies and in light of the overall
competitive landscape, LTSE proposes
to offer additional products and services
consistent with LTSE’s objective of
promoting long-term value creation for
companies and their investors.7 Certain
4 Id. at 8812. Placing promotional content on the
Exchange’s website was explicitly contemplated by
the SR–LTSE–2020–22 filing. Generally, such
promotional services appear to be commonly
provided by other listing exchanges. See, e.g., The
NYSE Listed Company Network, New York Stock
Exchange LLC, available at https://www.nyse.com/
network (last visited December 2, 2021) (featuring
blog posts and videos about listed companies on
NYSE).
5 As noted in the order approving LTSE as a
national securities exchange, LTSE maintains a
commercial relationship with LTSE Services to
leverage the company’s technological expertise to
support the Exchange’s software needs. See In the
Matter of the Application of Long Term Stock
Exchange, Inc.; for Registration as a National
Securities Exchange; Findings, Opinion, and Order
of the Commission, Securities Exchange Act Release
No. 85828 (May 10, 2019), 84 FR 21841, 21842 (May
15, 2019). LTSE Services also provides
communications and marketing services to the
Exchange.
6 See ‘‘The Long-Term Stock Exchange
Announces First Listing Commitments,’’ (June 24,
2021) available at: https://ltse.com/articles/asanatwilio-to-list-pr.
7 The products and services in the proposed rule
change would be comparable to provisions in the
Nasdaq Stock Market LLC (‘‘Nasdaq’’) Listing Rule
IM–5900–7 and the New York Stock Exchange
(‘‘NYSE’’) Listed Company Manual Section 907
(Products and Services Available to Issuers). For
example, under listings rule IM–5900–7 Nasdaq
offers certain listed companies investor relations
websites and market analytic tools. Similarly, NYSE
also offers market analytics and web hosting related
services under the NYSE Listed Company Manual
Section 907. LTSE’s proposed Company-specific
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of these products and services are being
offered to listed Companies on a
continual basis as long as they remain
listed on LTSE, while others are timelimited, being offered on a
complimentary basis for a
predetermined period, as further
described below. All such products and
services are optional for Companies.
The proposed rule change would amend
LTSE Rule 14.602 to include the
following additional products and
services:
(1) Ongoing Promotional Services
As noted above, LTSE currently offers
certain complimentary promotional
services to listed Companies in
connection with listing on the
Exchange. Specifically, LTSE provides
each listed Company with a dedicated
section on the Exchange’s website
featuring information about the
Company, including publicly available
data and links to each Company’s longterm policies.8 The proposed rule
change would clarify the inclusion of
such Company-specific web pages as
part of the Exchange’s offerings in
connection with listing on the Exchange
and offer these services on an ongoing
basis to listed Companies at no charge,
in a manner generally consistent with
what was done at the time of initial
listing. This ongoing offering would
ensure that information remains current
and relevant, by providing updated
Company-specific news, developments
and content. As is the case with the
current promotional services, all
updates to Company-specific web pages
on the Exchange’s website will be
managed by LTSE Services, subject to
review and approval by the Exchange
and the listed Company. These services
have a retail value of approximately
$5,000 per year.9
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capital markets insights and analytics
which are relevant to each listed
Company and its market sector.
Specifically, the capital markets reports
will include a summary evaluation of
the Company’s current investor base,
providing specific metrics analyzing the
Environmental, Social and Governance
(‘‘ESG’’) profile of each underlying
investor. Each report will highlight
investor behavior and provide insights
on their likely strategic priorities so that
Companies can better understand their
current status. The capital markets
reports have a retail value of
approximately $5,000 per year.10
(2) Capital Markets Reports
The Exchange has arranged for LTSE
Services to provide each listed
Company with complimentary capital
markets reports. The capital markets
reports will be issued periodically, at a
minimum one report each calendar year,
and will provide tailored investor and
(3) Capital Market Solutions
The Exchange has arranged for LTSE
Services to provide each listed
Company with up to one year of
complimentary Capital Market
Solutions (‘‘CM Solutions’’). The CM
Solutions has two components: (i) An
Investor Alignment Solution, and (ii)
the Long-Term Investor Platform
(‘‘LTIP’’). The Investor Alignment
Solution provides Companies with
detailed investor analytics and insights
into investor behavior to enable them to
evaluate the behaviors of select
investors and provide them with a
deeper understanding of the ESG
landscape and their positioning. For
each receiving Company, LTSE Services
analyzes the ESG profile of investors in
order to understand and identify
relevant sources of capital to aid the
Company in honing and achieving
strategic priorities. A highlyexperienced, multi-disciplinary team is
deployed to support this long-term
governance and capital markets strategy.
The Exchange believes that the Investor
Alignment Solution furthers the
Exchange’s goal of facilitating long-term
focus and value creation for companies
and investors.11 The Investor Alignment
Solution has a retail value of
approximately $150,000 per year.12
The LTIP is a software platform that
assists Companies in their efforts to
identify and support those shareholders
whose investments in the Company
have a long-term horizon and focus.
LTSE believes that Companies and their
web page updates are also geared towards
supporting engagement between Companies and
investors. LTSE’s proposed capital market reports
are Company-specific market analytic reports based
on LTSE Services’ proprietary data analytics and
insights.
8 See ‘‘Meet the Companies Listed on the LongTerm Stock Exchange,’’ available at: https://
ltse.com/companies (last visited December 2, 2021).
This content was initially posted to the Exchange’s
website in connection with dually listing two
companies on the Exchange on August 26, 2021.
9 This retail value is based on market rate
estimates by LTSE Services.
10 This retail value is based on market rate
estimates by LTSE Services.
11 LTSE Rule 14.425(a) requires Companies to
adopt and publish the following policies: A LongTerm Stakeholder Policy; a Long-Term Strategy
Policy; a Long-Term Compensation Policy; a LongTerm Board Policy; and a Long-Term Investor
Policy (collectively, the ‘‘Policies’’). Each of the
Policies must be consistent with the set of
principles articulated in LTSE Rule 14.425(b)
(collectively, the ‘‘Principles’’). These Policies and
Principles are a key differentiator for the Exchange.
12 This retail value reflects LTSE Services’ current
price list.
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long-term investors may mutually
benefit when the investors are registered
shareholders with the ownership of
shares listed on the records maintained
by the issuer or its transfer agent. Being
a registered shareholder provides a
direct relationship with the issuer and
facilitates the solicitation of proxies,
and the recording of proxy votes by
removing the intermediation provided
by (i) DTC’s nominee, Cede & Co., and
(ii) the DTC participant which owns a
pro rata interest in the ‘‘fungible bulk’’
of securities held at DTC.13 LTSE
believes that a direct relationship
between a Company and its investors
fosters alignment towards long-term
success. Additionally, shares registered
on the records of the issuer or its
transfer agent are not eligible for stock
loan to support short sales because the
broker is no longer the registered owner
of the shares and thus it is unable to
lend them to facilitate short selling.
Furthermore, such direct registration
also avoids the fees paid by Companies
to broker-dealers for the distribution of
their proxy materials to beneficial
owners.14
The primary means by which
shareholders become registered owners
is through the Direct Registration
System (‘‘DRS’’) operated by DTC.15 In
particular, LTSE Rule 14.208 (Direct
Registration Program) requires that all
securities listed on the Exchange (except
securities which are book-entry only, or
certain foreign issuers) must be eligible
for a Direct Registration Program
operated by a clearing agency registered
under Section 17A of the Act.16
13 See Concept Release on the U.S. Proxy System,
75 FR 42981, at 42986 (proposed July 22, 2010) for
a discussion of the differences in the proxy system
between registered owners and beneficial owners.
14 Id. at 42995 (‘‘One of the most persistent
concerns that has been expressed to the
Commission’s staff, particularly by issuers, involves
the structure and size of fees charged for the
distribution of proxy materials to beneficial
owners’’). See also, Enhanced Reporting of Proxy
Votes by Registered Management Investment
Companies; Reporting of Executive Compensation
Votes by Institutional Investment Managers,
Securities Exchange Act Release No. 93169
(September 29, 2021), 86 FR 57478, 57503
(proposed December 14, 2021), (noting the
importance of transparency in the proxy voting
process for investors, issuers, analysts and proxy
advisory firms and aligning incentives of corporate
executives and investors).
15 Registered owners can hold their securities
either in certificated form or in uncertificated form
(i.e., book entry) form, such as uncertificated
securities held through the DRS. See Transfer Agent
Regulations, Securities Exchange Act Release No.
76743 (December 22, 2015), 80 FR 81947, 81957
(proposed 12/31/2015).
16 DTCC is the only registered clearing agency
offering a Direct Registration Program. See
Securities Transactions Settlement, Securities
Exchange Act Release No. 49405 (March 11, 2004),
69 FR 12921, 12932 (proposed March 18, 2004)
(‘‘The culmination of these efforts is the
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The LTIP is a platform that provides
Companies with a means to upload and
effectively manage and utilize their
registered shareholder data received
from their transfer agent. For example,
the LTIP allows Companies to more
easily track, analyze and utilize
registered shareholder data in support of
their investor relations, strategic
initiatives, board review and governance
functions.17 Additionally, as part of the
LTIP, LTSE Services will assist
Companies with methods of outreach to
and education of existing or potential
investors regarding the process for
becoming a registered shareholder,
including the need for an investor to
work with their broker-dealer to
complete a submission to the DRS
Profile System maintained by the
DTC.18 The LTIP Solution has a retail
value of approximately $150,000 per
year if purchased on an individual
basis.19
Listed Companies will have the
option to receive CM Solutions on a
complimentary basis for a one-year
term. Any Company that has already
received CM Solutions prior to listing
on the Exchange will have the option of
an up to one-year credit for such
services (or combination of a credit and
complimentary services, depending on
the length of the prior subscription)
(referred to collectively as ‘‘the
complimentary one-year period’’).20 The
one-year credit for such Companies is
intended to provide them with the same
general benefit as Companies that do not
utilize CM Solutions prior to listing.
Listed Companies may avail themselves
of the complimentary one-year period at
any time for a continuous one-year
period after listing. Listed Companies
may elect to receive either the Investor
Alignment Solution, the LTIP or both
during this complimentary one-year
period. However, these services cannot
be utilized during separate one-year
establishment of the Direct Registration System
(‘‘DRS’’), which is operated by DTC’’).
17 The registered shareholder information in LTIP
is proprietary to the Company and viewable only
by the Company and its authorized agents.
18 Any outreach to existing or potential investors
is entirely at the discretion of the Company and will
be conducted exclusively by the Company; no
personnel from LTSE Services or LTSE will have
any role in communicating with investors on behalf
of the Company. The LTIP also will, based on
customer demand, provide a means for the
Company to communicate with registered
shareholders who choose to participate on the
Company’s LTIP account.
19 This retail value reflects LTSE Services’ current
price list.
20 If a Company purchased less than 12 months
of CM Solutions prior to listing, the Company will
have a credit for the number of months of CM
Solutions purchased prior to listing and receive CM
Solutions for the remainder of the one-year period
on a complimentary basis.
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periods on a complimentary or credit
basis. Currently listed Companies will
become eligible for the complimentary
CM Solutions upon the effectiveness of
this proposed rule change. If a listed
Company ceases to be listed on the
Exchange, the complimentary services
will end as of the date of de-listing, even
if less than a one-year period.
If they elect to utilize the one-year
credit, listed Companies that received
CM Solutions prior to listing would no
longer be eligible for the one year of
complimentary CM Solutions that listed
Companies that were not prior
subscribers of such services may choose
to utilize. Similarly, if Companies
purchased less than 12 months of CM
Solutions prior to listing and elected to
be credited for those months after listing
and receive CM Solutions on a
complimentary basis for the remainder
of the one-year period. [sic] Such
Companies would not be eligible for an
additional one year of complimentary
CM Solutions.
The Exchange believes that offering
the capital markets reports, CM
Solutions and ongoing promotional
services, as described above, will serve
as meaningful tools for supporting longterm value creation for Companies and
their investors. However, Companies are
not required to use these services as a
condition of listing and they may
choose not to avail themselves of any of
these services or a subset at their
discretion. At the end of the one-year
complimentary period for CM Solutions,
Companies may choose to renew these
services on a contractual basis with
LTSE Services and pay for them in
regular course, or discontinue them. The
capital markets reports and ongoing
promotional services can be
discontinued at the Company’s
discretion at any time. If a listed
Company chooses to discontinue any of
these services, there would be no effect
on the Company’s continued listing on
the Exchange. LTSE notes that no listed
Company will be required to pay higher
fees as a result of the proposed
amendments and represents that
providing the proposed services will
have no impact on the resources
available for its regulatory programs.
LTSE also represents that no
confidential trading or regulatory
information generated or received by the
Exchange will be shared with LTSE
Services or leveraged for the provision
of its products and services.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
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the provisions of Section 6 of the Act,21
in general, and furthers the objectives of
Section 6(b)(4) of the Act,22 in
particular, in that it is designed to
provide for the equitable allocation of
reasonable dues, fees, and other charges
among the Exchange’s members and
issuers and other persons using its
facilities. The Exchange also believes
that the proposed rule change is
consistent with Section 6(b)(5) of the
Act 23 in that it is not designed to permit
unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange believes that it is fair
and reasonable to offer products and
services to companies. The Exchange
believes that the existing U.S. exchange
listing market for operating companies
is essentially a duopoly with the vast
majority of operating companies listed
on U.S. securities exchanges listing on
the New York Stock Exchange (‘‘NYSE’’)
or Nasdaq Stock Market LLC
(‘‘Nasdaq’’). The Exchange faces
competition from NYSE and Nasdaq as
a new entrant into the exchange listing
market, and believes that offering such
products and services to companies
would enhance the value proposition
for listing, allow the Exchange to more
effectively attract companies to list on
the Exchange and retain its listings. The
Exchange believes that to the extent the
Exchange’s listing program is
successful, it will provide a competitive
alternative, which will thereby benefit
companies and investors, and remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, consistent
with the protection of investors and the
public interest. Other exchanges also
acknowledge the competition in the
market for listing services and they
compete, in part, by offering products
and services to companies.24 Like other
exchanges, LTSE also believes that it is
fair and reasonable to offer
complimentary services to attract and
retain listings as part of this
competition. LTSE believes offering the
proposed capital markets reports and
CM Solutions promote just and
equitable principles of trade and
protects investors and the public
interest by enhancing companies’
engagement with shareholders for the
21 15
U.S.C. 78f.
U.S.C. 78f(b)(4).
23 15 U.S.C. 78f(b)(5).
24 See, Securities Exchange Act Release No. 90955
(January 19, 2021), 86 FR 7155, 7157 (January 26,
2021) (noting that ‘‘Nasdaq faces competition in the
market for listing services, and competes, in part,
by offering valuable services to companies. Nasdaq
believes that it is reasonable to offer complimentary
services to attract and retain listings as part of this
competition.’’).
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purpose of long-term value creation.
These services are also a reflection of
the Exchange’s differentiated listing
standards, which are explicitly designed
to promote long-term focus and value
creation,25 and are central to LTSE’s
mission of reducing short-termism in
the capital markets.26
Similarly, LTSE believes that offering
Company-specific web page updates, as
described above, to listed Companies
promotes just and equitable principles
of trade and protects investors and the
public interest by providing a
supplementary outlet for information
regarding Company developments to
stakeholders.
The Exchange believes that its
proposed rule change is fair and not
unfairly discriminatory because the
products and services will be offered
equally and on the same terms and
conditions to all similarly situated listed
Companies, i.e., those that received the
CM Solutions prior to listing versus
those that had not, on the same terms
and conditions. Thus, listed Companies
that were pre-existing customers of CM
Solutions will be treated the same as
each other, while all listed Companies
that had not received CM Solutions
prior to listing will be provided the
same one-year complimentary CM
Solutions to be utilized at their
discretion. The Exchange also
recognizes the potential for unfair
discrimination between Companies that
were subscribers of CM Solutions prior
to listing and listed Companies that
were not, given that the prior
subscribers may not wish to utilize an
additional complimentary year of such
service upon listing. Thus, the Exchange
believes that a credit for one year of
services for prior subscribers of CM
Solutions will promote parity with
Companies who elect to receive these
complimentary services only after
listing on the Exchange. The one-year
credit ensures that both sets of
companies receive one year’s worth of
complimentary CM Solutions. The
scope of products and services provided
by the Exchange ultimately will depend
on which products and services the
Company selects insofar as these are
optional for each Company.
LTSE represents, and this proposed
rule change will help ensure, that
individual listed Companies are not
given specially negotiated packages of
products or services to list, or remain
listed, which the Commission has
25 See Policies and Principles noted in LTSE Rule
14.425.
26 See Securities Exchange Act Release No. 86722
(August 21, 2019), 84 FR 44953 (August 27, 2019)
(order approving proposed rule change to adopt
LTSE Rule 14.425).
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72299
previously stated would raise unfair
discrimination issues under the
Exchange Act.27
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will result in
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. To the
contrary, and as discussed in the
Statutory Basis section, LTSE believes
that the proposed rule change will
enhance competition by facilitating
LTSE’s listing program which will allow
the Exchange to provide companies
with another listing option, thereby
promoting intermarket competition
between exchanges in furtherance of the
principles of Section 11A(a)(1) of the
Act 28 in that it is designed to promote
fair competition between exchange
markets by offering a new listing market
to compete with Nasdaq and NYSE. As
noted above, LTSE faces competition in
the market for listing services, and aims
to compete by offering valuable services
to companies. The proposed rule change
reflects that competition, but does not
impose any burden on the competition
with other exchanges. Other exchanges
can also offer similar services to
companies,29 thereby increasing
competition to the benefit of those
companies and their stakeholders.
Moreover, as a dual listing venue, LTSE
expects to face competition from
existing exchanges because companies
have a choice to list their securities
solely on a primary listing venue.
Consequently, the degree to which
LTSE’s products and services could
impose any burden on intermarket
competition is extremely limited, and
LTSE does not believe that such
offerings would impose any burden on
competing venues that is not necessary
or appropriate in furtherance of the
purposes of the Act.
LTSE also does not believe that the
proposed rule change will result in any
burden on intramarket competition
since LTSE will offer the products and
services on the same terms and
conditions to similarly situated
companies. Listed Companies that were
pre-existing customers of CM Solutions
will have the option of utilizing the oneyear credit on the same terms as each
other, while all listed Companies that
27 See Securities Exchange Act Release No. 79366,
81 FR 85663, 85665 (November 21, 2016) (citing
Securities Exchange Act Release No. 65127 (August
12, 2011), 76 FR 51449, 51452 (August 18, 2011)
(approving NYSE–2011–20)).
28 15 U.S.C. 78k–1(a)(1).
29 See Nasdaq Listing Rule IM–5900–7 and NYSE
Listed Company Manual Section 907.
E:\FR\FM\21DEN1.SGM
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72300
Federal Register / Vol. 86, No. 242 / Tuesday, December 21, 2021 / Notices
had not received CM Solutions prior to
listing will be provided the same oneyear complimentary CM Solutions to be
utilized at their discretion.
Consequently, LTSE does not believe
that the proposal will impose any
burden on intramarket competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the Exchange consents,
the Commission shall: (a) By order
approve or disapprove such proposed
rule change, or (b) institute proceedings
to determine whether the proposed rule
change should be 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:
jspears on DSK121TN23PROD with NOTICES1
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–
LTSE–2021–08 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–LTSE–2021–08. 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
VerDate Sep<11>2014
18:02 Dec 20, 2021
Jkt 256001
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–LTSE–2021–08, and should
be submitted on or before January 11,
2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.30
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–27542 Filed 12–20–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93790; File No. SR–
NYSEArca–2021–89]
Register on November 3, 2021.3 The
Commission has received no comments
on the proposed rule change.
Section 19(b)(2) of the Act 4 provides
that within 45 days of the publication of
notice of the filing of a proposed rule
change, or within such longer period up
to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the self-regulatory organization
consents, the Commission shall either
approve the proposed rule change,
disapprove the proposed rule change, or
institute proceedings to determine
whether the proposed rule change
should be disapproved. The 45th day
after publication of the notice for this
proposed rule change is December 18,
2021. The Commission is extending this
45-day time period.
The Commission finds that it is
appropriate to designate a longer period
within which to take action on the
proposed rule change so that it has
sufficient time to consider the proposed
rule change and any comments
received. Accordingly, pursuant to
Section 19(b)(2) of the Act,5 the
Commission designates February 1,
2022, as the date by which the
Commission shall either approve or
disapprove, or institute proceedings to
determine whether to disapprove, the
proposed rule change (File No. SR–
NYSEArca–2021–89).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–27545 Filed 12–20–21; 8:45 am]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Designation of a
Longer Period for Commission Action
on a Proposed Rule Change To List
and Trade Shares of the Bitwise
Bitcoin ETP Trust Under NYSE Arca
Rule 8.201–E
December 15, 2021.
On October 14, 2021, NYSE Arca, Inc.
(‘‘NYSE Arca’’) 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
list and trade shares of the Bitwise
Bitcoin ETP Trust under NYSE Arca
Rule 8.201–E (Commodity-Based Trust
Shares). The proposed rule change was
published for comment in the Federal
30 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00098
Fmt 4703
Sfmt 4703
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Securities Act of 1933 Release No. 33–
11014/December 15, 2021; Securities
Exchange Act of 1934 Release No. 34–
93785/December 15, 2021]
Order Approving Public Company
Accounting Oversight Board Budget
and Annual Accounting Support Fee
for Calendar Year 2022
The Sarbanes-Oxley Act of 2002, as
amended (the ‘‘Sarbanes-Oxley Act’’),1
established the Public Company
Accounting Oversight Board (‘‘PCAOB’’
3 See Securities Exchange Act Release No. 93445
(Oct. 28, 2021), 86 FR 60695.
4 15 U.S.C. 78s(b)(2).
5 Id.
6 17 CFR 200.30–3(a)(31).
1 15 U.S.C. 7201 et seq.
E:\FR\FM\21DEN1.SGM
21DEN1
]]>Agencies
[Federal Register Volume 86, Number 242 (Tuesday, December 21, 2021)]
[Notices]
[Pages 72296-72300]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-27542]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93787; File No. SR-LTSE-2021-08]
Self-Regulatory Organizations; Long-Term Stock Exchange, Inc.;
Notice of Filing of a Proposed Rule Change To Modify and Expand the
Package of Products and Services Provided to Companies and Clarify
Existing Practice Under Rule 14.602
December 15, 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 December 2, 2021, Long-Term Stock Exchange, Inc. (``LTSE'' or
``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 Exchange. 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\ 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 modify and expand the package of products
and services provided to Companies under LTSE Rule 14.602 and clarify
existing practice under Rule 14.602 with respect to providing Company-
specific web pages on the Exchange's website in connection with listing
on the Exchange.
The text of the proposed rule change is available at the Exchange's
website at https://longtermstockexchange.com/, at the principal office
of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement 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 these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in Sections A, B, and C below, of the
most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange offers complimentary promotional services and listing
ceremonies under Rule 14.602 in connection with a Company's approval
for listing on the Exchange. The promotional services are tailored to
meet the needs of the Company, and allow the Company access to media
services that would support the creation of press releases, articles,
videos, and podcasts featuring the Company and its personnel.\3\ These
promotional services
[[Page 72297]]
also include assistance with distributing such content on traditional
and social media platforms, including websites operated by the
Exchange.\4\ The Exchange also proposes to amend Rule 14.602 to clarify
existing practice with respect to providing Company-specific web pages
on the Exchange's website in connection with listing on the Exchange.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 91054 (February 3,
2021), 86 FR 8812 (February 9, 2021) (SR-LTSE-2020-22) (regarding
provision of promotional services and listing ceremonies for listed
companies).
\4\ Id. at 8812. Placing promotional content on the Exchange's
website was explicitly contemplated by the SR-LTSE-2020-22 filing.
Generally, such promotional services appear to be commonly provided
by other listing exchanges. See, e.g., The NYSE Listed Company
Network, New York Stock Exchange LLC, available at https://www.nyse.com/network (last visited December 2, 2021) (featuring blog
posts and videos about listed companies on NYSE).
---------------------------------------------------------------------------
Under existing Rule 14.602, the Exchange also offers each Company a
complimentary listing ceremony to commemorate its listing on the
Exchange. A full suite of these promotional services and listing
ceremonies are developed through the Exchange's affiliate company, LTSE
Services, Inc. (``LTSE Services'') \5\ and offered to each Company
approved to list on the Exchange. Some Companies may choose to avail
themselves of all such services, whereas others may choose only a
subset of services or none.
---------------------------------------------------------------------------
\5\ As noted in the order approving LTSE as a national
securities exchange, LTSE maintains a commercial relationship with
LTSE Services to leverage the company's technological expertise to
support the Exchange's software needs. See In the Matter of the
Application of Long Term Stock Exchange, Inc.; for Registration as a
National Securities Exchange; Findings, Opinion, and Order of the
Commission, Securities Exchange Act Release No. 85828 (May 10,
2019), 84 FR 21841, 21842 (May 15, 2019). LTSE Services also
provides communications and marketing services to the Exchange.
---------------------------------------------------------------------------
Since Rule 14.602 was approved, two companies have listed on
LTSE.\6\ Based on LTSE's experience with offering the services
discussed above under Rule 14.602, in response to the need for
continued services to the listed Companies and in light of the overall
competitive landscape, LTSE proposes to offer additional products and
services consistent with LTSE's objective of promoting long-term value
creation for companies and their investors.\7\ Certain of these
products and services are being offered to listed Companies on a
continual basis as long as they remain listed on LTSE, while others are
time-limited, being offered on a complimentary basis for a
predetermined period, as further described below. All such products and
services are optional for Companies. The proposed rule change would
amend LTSE Rule 14.602 to include the following additional products and
services:
---------------------------------------------------------------------------
\6\ See ``The Long-Term Stock Exchange Announces First Listing
Commitments,'' (June 24, 2021) available at: https://ltse.com/articles/asana-twilio-to-list-pr.
\7\ The products and services in the proposed rule change would
be comparable to provisions in the Nasdaq Stock Market LLC
(``Nasdaq'') Listing Rule IM-5900-7 and the New York Stock Exchange
(``NYSE'') Listed Company Manual Section 907 (Products and Services
Available to Issuers). For example, under listings rule IM-5900-7
Nasdaq offers certain listed companies investor relations websites
and market analytic tools. Similarly, NYSE also offers market
analytics and web hosting related services under the NYSE Listed
Company Manual Section 907. LTSE's proposed Company-specific web
page updates are also geared towards supporting engagement between
Companies and investors. LTSE's proposed capital market reports are
Company-specific market analytic reports based on LTSE Services'
proprietary data analytics and insights.
---------------------------------------------------------------------------
(1) Ongoing Promotional Services
As noted above, LTSE currently offers certain complimentary
promotional services to listed Companies in connection with listing on
the Exchange. Specifically, LTSE provides each listed Company with a
dedicated section on the Exchange's website featuring information about
the Company, including publicly available data and links to each
Company's long-term policies.\8\ The proposed rule change would clarify
the inclusion of such Company-specific web pages as part of the
Exchange's offerings in connection with listing on the Exchange and
offer these services on an ongoing basis to listed Companies at no
charge, in a manner generally consistent with what was done at the time
of initial listing. This ongoing offering would ensure that information
remains current and relevant, by providing updated Company-specific
news, developments and content. As is the case with the current
promotional services, all updates to Company-specific web pages on the
Exchange's website will be managed by LTSE Services, subject to review
and approval by the Exchange and the listed Company. These services
have a retail value of approximately $5,000 per year.\9\
---------------------------------------------------------------------------
\8\ See ``Meet the Companies Listed on the Long-Term Stock
Exchange,'' available at: https://ltse.com/companies (last visited
December 2, 2021). This content was initially posted to the
Exchange's website in connection with dually listing two companies
on the Exchange on August 26, 2021.
\9\ This retail value is based on market rate estimates by LTSE
Services.
---------------------------------------------------------------------------
(2) Capital Markets Reports
The Exchange has arranged for LTSE Services to provide each listed
Company with complimentary capital markets reports. The capital markets
reports will be issued periodically, at a minimum one report each
calendar year, and will provide tailored investor and capital markets
insights and analytics which are relevant to each listed Company and
its market sector. Specifically, the capital markets reports will
include a summary evaluation of the Company's current investor base,
providing specific metrics analyzing the Environmental, Social and
Governance (``ESG'') profile of each underlying investor. Each report
will highlight investor behavior and provide insights on their likely
strategic priorities so that Companies can better understand their
current status. The capital markets reports have a retail value of
approximately $5,000 per year.\10\
---------------------------------------------------------------------------
\10\ This retail value is based on market rate estimates by LTSE
Services.
---------------------------------------------------------------------------
(3) Capital Market Solutions
The Exchange has arranged for LTSE Services to provide each listed
Company with up to one year of complimentary Capital Market Solutions
(``CM Solutions''). The CM Solutions has two components: (i) An
Investor Alignment Solution, and (ii) the Long-Term Investor Platform
(``LTIP''). The Investor Alignment Solution provides Companies with
detailed investor analytics and insights into investor behavior to
enable them to evaluate the behaviors of select investors and provide
them with a deeper understanding of the ESG landscape and their
positioning. For each receiving Company, LTSE Services analyzes the ESG
profile of investors in order to understand and identify relevant
sources of capital to aid the Company in honing and achieving strategic
priorities. A highly-experienced, multi-disciplinary team is deployed
to support this long-term governance and capital markets strategy. The
Exchange believes that the Investor Alignment Solution furthers the
Exchange's goal of facilitating long-term focus and value creation for
companies and investors.\11\ The Investor Alignment Solution has a
retail value of approximately $150,000 per year.\12\
---------------------------------------------------------------------------
\11\ LTSE Rule 14.425(a) requires Companies to adopt and publish
the following policies: A Long-Term Stakeholder Policy; a Long-Term
Strategy Policy; a Long-Term Compensation Policy; a Long-Term Board
Policy; and a Long-Term Investor Policy (collectively, the
``Policies''). Each of the Policies must be consistent with the set
of principles articulated in LTSE Rule 14.425(b) (collectively, the
``Principles''). These Policies and Principles are a key
differentiator for the Exchange.
\12\ This retail value reflects LTSE Services' current price
list.
---------------------------------------------------------------------------
The LTIP is a software platform that assists Companies in their
efforts to identify and support those shareholders whose investments in
the Company have a long-term horizon and focus. LTSE believes that
Companies and their
[[Page 72298]]
long-term investors may mutually benefit when the investors are
registered shareholders with the ownership of shares listed on the
records maintained by the issuer or its transfer agent. Being a
registered shareholder provides a direct relationship with the issuer
and facilitates the solicitation of proxies, and the recording of proxy
votes by removing the intermediation provided by (i) DTC's nominee,
Cede & Co., and (ii) the DTC participant which owns a pro rata interest
in the ``fungible bulk'' of securities held at DTC.\13\ LTSE believes
that a direct relationship between a Company and its investors fosters
alignment towards long-term success. Additionally, shares registered on
the records of the issuer or its transfer agent are not eligible for
stock loan to support short sales because the broker is no longer the
registered owner of the shares and thus it is unable to lend them to
facilitate short selling. Furthermore, such direct registration also
avoids the fees paid by Companies to broker-dealers for the
distribution of their proxy materials to beneficial owners.\14\
---------------------------------------------------------------------------
\13\ See Concept Release on the U.S. Proxy System, 75 FR 42981,
at 42986 (proposed July 22, 2010) for a discussion of the
differences in the proxy system between registered owners and
beneficial owners.
\14\ Id. at 42995 (``One of the most persistent concerns that
has been expressed to the Commission's staff, particularly by
issuers, involves the structure and size of fees charged for the
distribution of proxy materials to beneficial owners''). See also,
Enhanced Reporting of Proxy Votes by Registered Management
Investment Companies; Reporting of Executive Compensation Votes by
Institutional Investment Managers, Securities Exchange Act Release
No. 93169 (September 29, 2021), 86 FR 57478, 57503 (proposed
December 14, 2021), (noting the importance of transparency in the
proxy voting process for investors, issuers, analysts and proxy
advisory firms and aligning incentives of corporate executives and
investors).
---------------------------------------------------------------------------
The primary means by which shareholders become registered owners is
through the Direct Registration System (``DRS'') operated by DTC.\15\
In particular, LTSE Rule 14.208 (Direct Registration Program) requires
that all securities listed on the Exchange (except securities which are
book-entry only, or certain foreign issuers) must be eligible for a
Direct Registration Program operated by a clearing agency registered
under Section 17A of the Act.\16\
---------------------------------------------------------------------------
\15\ Registered owners can hold their securities either in
certificated form or in uncertificated form (i.e., book entry) form,
such as uncertificated securities held through the DRS. See Transfer
Agent Regulations, Securities Exchange Act Release No. 76743
(December 22, 2015), 80 FR 81947, 81957 (proposed 12/31/2015).
\16\ DTCC is the only registered clearing agency offering a
Direct Registration Program. See Securities Transactions Settlement,
Securities Exchange Act Release No. 49405 (March 11, 2004), 69 FR
12921, 12932 (proposed March 18, 2004) (``The culmination of these
efforts is the establishment of the Direct Registration System
(``DRS''), which is operated by DTC'').
---------------------------------------------------------------------------
The LTIP is a platform that provides Companies with a means to
upload and effectively manage and utilize their registered shareholder
data received from their transfer agent. For example, the LTIP allows
Companies to more easily track, analyze and utilize registered
shareholder data in support of their investor relations, strategic
initiatives, board review and governance functions.\17\ Additionally,
as part of the LTIP, LTSE Services will assist Companies with methods
of outreach to and education of existing or potential investors
regarding the process for becoming a registered shareholder, including
the need for an investor to work with their broker-dealer to complete a
submission to the DRS Profile System maintained by the DTC.\18\ The
LTIP Solution has a retail value of approximately $150,000 per year if
purchased on an individual basis.\19\
---------------------------------------------------------------------------
\17\ The registered shareholder information in LTIP is
proprietary to the Company and viewable only by the Company and its
authorized agents.
\18\ Any outreach to existing or potential investors is entirely
at the discretion of the Company and will be conducted exclusively
by the Company; no personnel from LTSE Services or LTSE will have
any role in communicating with investors on behalf of the Company.
The LTIP also will, based on customer demand, provide a means for
the Company to communicate with registered shareholders who choose
to participate on the Company's LTIP account.
\19\ This retail value reflects LTSE Services' current price
list.
---------------------------------------------------------------------------
Listed Companies will have the option to receive CM Solutions on a
complimentary basis for a one-year term. Any Company that has already
received CM Solutions prior to listing on the Exchange will have the
option of an up to one-year credit for such services (or combination of
a credit and complimentary services, depending on the length of the
prior subscription) (referred to collectively as ``the complimentary
one-year period'').\20\ The one-year credit for such Companies is
intended to provide them with the same general benefit as Companies
that do not utilize CM Solutions prior to listing. Listed Companies may
avail themselves of the complimentary one-year period at any time for a
continuous one-year period after listing. Listed Companies may elect to
receive either the Investor Alignment Solution, the LTIP or both during
this complimentary one-year period. However, these services cannot be
utilized during separate one-year periods on a complimentary or credit
basis. Currently listed Companies will become eligible for the
complimentary CM Solutions upon the effectiveness of this proposed rule
change. If a listed Company ceases to be listed on the Exchange, the
complimentary services will end as of the date of de-listing, even if
less than a one-year period.
---------------------------------------------------------------------------
\20\ If a Company purchased less than 12 months of CM Solutions
prior to listing, the Company will have a credit for the number of
months of CM Solutions purchased prior to listing and receive CM
Solutions for the remainder of the one-year period on a
complimentary basis.
---------------------------------------------------------------------------
If they elect to utilize the one-year credit, listed Companies that
received CM Solutions prior to listing would no longer be eligible for
the one year of complimentary CM Solutions that listed Companies that
were not prior subscribers of such services may choose to utilize.
Similarly, if Companies purchased less than 12 months of CM Solutions
prior to listing and elected to be credited for those months after
listing and receive CM Solutions on a complimentary basis for the
remainder of the one-year period. [sic] Such Companies would not be
eligible for an additional one year of complimentary CM Solutions.
The Exchange believes that offering the capital markets reports, CM
Solutions and ongoing promotional services, as described above, will
serve as meaningful tools for supporting long-term value creation for
Companies and their investors. However, Companies are not required to
use these services as a condition of listing and they may choose not to
avail themselves of any of these services or a subset at their
discretion. At the end of the one-year complimentary period for CM
Solutions, Companies may choose to renew these services on a
contractual basis with LTSE Services and pay for them in regular
course, or discontinue them. The capital markets reports and ongoing
promotional services can be discontinued at the Company's discretion at
any time. If a listed Company chooses to discontinue any of these
services, there would be no effect on the Company's continued listing
on the Exchange. LTSE notes that no listed Company will be required to
pay higher fees as a result of the proposed amendments and represents
that providing the proposed services will have no impact on the
resources available for its regulatory programs. LTSE also represents
that no confidential trading or regulatory information generated or
received by the Exchange will be shared with LTSE Services or leveraged
for the provision of its products and services.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with
[[Page 72299]]
the provisions of Section 6 of the Act,\21\ in general, and furthers
the objectives of Section 6(b)(4) of the Act,\22\ in particular, in
that it is designed to provide for the equitable allocation of
reasonable dues, fees, and other charges among the Exchange's members
and issuers and other persons using its facilities. The Exchange also
believes that the proposed rule change is consistent with Section
6(b)(5) of the Act \23\ in that it is not designed to permit unfair
discrimination between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\21\ 15 U.S.C. 78f.
\22\ 15 U.S.C. 78f(b)(4).
\23\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that it is fair and reasonable to offer
products and services to companies. The Exchange believes that the
existing U.S. exchange listing market for operating companies is
essentially a duopoly with the vast majority of operating companies
listed on U.S. securities exchanges listing on the New York Stock
Exchange (``NYSE'') or Nasdaq Stock Market LLC (``Nasdaq''). The
Exchange faces competition from NYSE and Nasdaq as a new entrant into
the exchange listing market, and believes that offering such products
and services to companies would enhance the value proposition for
listing, allow the Exchange to more effectively attract companies to
list on the Exchange and retain its listings. The Exchange believes
that to the extent the Exchange's listing program is successful, it
will provide a competitive alternative, which will thereby benefit
companies and investors, and remove impediments to and perfect the
mechanism of a free and open market and a national market system,
consistent with the protection of investors and the public interest.
Other exchanges also acknowledge the competition in the market for
listing services and they compete, in part, by offering products and
services to companies.\24\ Like other exchanges, LTSE also believes
that it is fair and reasonable to offer complimentary services to
attract and retain listings as part of this competition. LTSE believes
offering the proposed capital markets reports and CM Solutions promote
just and equitable principles of trade and protects investors and the
public interest by enhancing companies' engagement with shareholders
for the purpose of long-term value creation. These services are also a
reflection of the Exchange's differentiated listing standards, which
are explicitly designed to promote long-term focus and value
creation,\25\ and are central to LTSE's mission of reducing short-
termism in the capital markets.\26\
---------------------------------------------------------------------------
\24\ See, Securities Exchange Act Release No. 90955 (January 19,
2021), 86 FR 7155, 7157 (January 26, 2021) (noting that ``Nasdaq
faces competition in the market for listing services, and competes,
in part, by offering valuable services to companies. Nasdaq believes
that it is reasonable to offer complimentary services to attract and
retain listings as part of this competition.'').
\25\ See Policies and Principles noted in LTSE Rule 14.425.
\26\ See Securities Exchange Act Release No. 86722 (August 21,
2019), 84 FR 44953 (August 27, 2019) (order approving proposed rule
change to adopt LTSE Rule 14.425).
---------------------------------------------------------------------------
Similarly, LTSE believes that offering Company-specific web page
updates, as described above, to listed Companies promotes just and
equitable principles of trade and protects investors and the public
interest by providing a supplementary outlet for information regarding
Company developments to stakeholders.
The Exchange believes that its proposed rule change is fair and not
unfairly discriminatory because the products and services will be
offered equally and on the same terms and conditions to all similarly
situated listed Companies, i.e., those that received the CM Solutions
prior to listing versus those that had not, on the same terms and
conditions. Thus, listed Companies that were pre-existing customers of
CM Solutions will be treated the same as each other, while all listed
Companies that had not received CM Solutions prior to listing will be
provided the same one-year complimentary CM Solutions to be utilized at
their discretion. The Exchange also recognizes the potential for unfair
discrimination between Companies that were subscribers of CM Solutions
prior to listing and listed Companies that were not, given that the
prior subscribers may not wish to utilize an additional complimentary
year of such service upon listing. Thus, the Exchange believes that a
credit for one year of services for prior subscribers of CM Solutions
will promote parity with Companies who elect to receive these
complimentary services only after listing on the Exchange. The one-year
credit ensures that both sets of companies receive one year's worth of
complimentary CM Solutions. The scope of products and services provided
by the Exchange ultimately will depend on which products and services
the Company selects insofar as these are optional for each Company.
LTSE represents, and this proposed rule change will help ensure,
that individual listed Companies are not given specially negotiated
packages of products or services to list, or remain listed, which the
Commission has previously stated would raise unfair discrimination
issues under the Exchange Act.\27\
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\27\ See Securities Exchange Act Release No. 79366, 81 FR 85663,
85665 (November 21, 2016) (citing Securities Exchange Act Release
No. 65127 (August 12, 2011), 76 FR 51449, 51452 (August 18, 2011)
(approving NYSE-2011-20)).
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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
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. To the contrary,
and as discussed in the Statutory Basis section, LTSE believes that the
proposed rule change will enhance competition by facilitating LTSE's
listing program which will allow the Exchange to provide companies with
another listing option, thereby promoting intermarket competition
between exchanges in furtherance of the principles of Section 11A(a)(1)
of the Act \28\ in that it is designed to promote fair competition
between exchange markets by offering a new listing market to compete
with Nasdaq and NYSE. As noted above, LTSE faces competition in the
market for listing services, and aims to compete by offering valuable
services to companies. The proposed rule change reflects that
competition, but does not impose any burden on the competition with
other exchanges. Other exchanges can also offer similar services to
companies,\29\ thereby increasing competition to the benefit of those
companies and their stakeholders. Moreover, as a dual listing venue,
LTSE expects to face competition from existing exchanges because
companies have a choice to list their securities solely on a primary
listing venue. Consequently, the degree to which LTSE's products and
services could impose any burden on intermarket competition is
extremely limited, and LTSE does not believe that such offerings would
impose any burden on competing venues that is not necessary or
appropriate in furtherance of the purposes of the Act.
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\28\ 15 U.S.C. 78k-1(a)(1).
\29\ See Nasdaq Listing Rule IM-5900-7 and NYSE Listed Company
Manual Section 907.
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LTSE also does not believe that the proposed rule change will
result in any burden on intramarket competition since LTSE will offer
the products and services on the same terms and conditions to similarly
situated companies. Listed Companies that were pre-existing customers
of CM Solutions will have the option of utilizing the one-year credit
on the same terms as each other, while all listed Companies that
[[Page 72300]]
had not received CM Solutions prior to listing will be provided the
same one-year complimentary CM Solutions to be utilized at their
discretion. Consequently, LTSE does not believe that the proposal will
impose any burden on intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission shall: (a) By order approve
or disapprove such proposed rule change, or (b) institute proceedings
to determine whether the proposed rule change should be 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 [email protected]. Please include
File Number SR-LTSE-2021-08 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-LTSE-2021-08. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change. Persons submitting
comments are cautioned that we do not redact or edit personal
identifying information from comment submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-LTSE-2021-08, and should be
submitted on or before January 11, 2022.
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\30\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\30\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-27542 Filed 12-20-21; 8:45 am]
BILLING CODE 8011-01-P
