Self-Regulatory Organizations; Long-Term Stock Exchange, Inc.; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To Modify and Expand the Package of Products and Services Provided to Companies and Clarify Existing Practice Under Rule 14.602, 16800-16804 [2022-06186]
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Federal Register / Vol. 87, No. 57 / Thursday, March 24, 2022 / Notices
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–CboeBZX–2021–083 and
should be submitted on or before April
14, 2022.
V. Accelerated Approval of Proposed
Rule Change, as Modified by
Amendment No. 2
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The Commission finds good cause to
approve the proposed rule change, as
modified by Amendment No. 2, prior to
the thirtieth day after the date of
publication of notice of the filing of
Amendment No. 2 in the Federal
Register. According to the Exchange,
Amendment No. 2 supplements the
proposal by, among other things: (1)
Providing additional detail and
clarification regarding the Exchange’s
current and proposed treatment of a
Market Maker’s quoting obligations, (2)
correcting an inadvertent error in the
Exhibit 5, and (3) removing a
superfluous provision in the Exhibit 5 to
provide for additional clarity. The
Commission believes that Amendment
No. 2 provides additional accuracy and
clarity to the proposal and does not
raise any novel regulatory issues.
Accordingly, the Commission finds
good cause, pursuant to Section 19(b)(2)
of the Act,43 to approve the proposed
rule change, as modified by Amendment
No. 2, on an accelerated basis.
VI. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,44 that the
proposed rule change (SR–CboeBZX–
2021–083), as modified by Amendment
43 15
U.S.C. 78s(b)(2).
44 Id.
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No. 2 thereto, be, and it hereby is,
approved on an accelerated basis.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.45
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–06193 Filed 3–23–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–94476; File No. SR–
CboeBZX–2022–006]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of
Designation of a Longer Period for
Commission Action on a Proposed
Rule Change To List and Trade Shares
of the WisdomTree Bitcoin Trust Under
BZX Rule 14.11(e)(4), CommodityBased Trust Shares
March 18, 2022.
On January 25, 2022, Cboe BZX
Exchange, Inc. (‘‘BZX’’) 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 WisdomTree
Bitcoin Trust under BZX Rule
14.11(e)(4), Commodity-Based Trust
Shares. The proposed rule change was
published for comment in the Federal
Register on February 14, 2022.3 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 March 31, 2022.
The Commission is extending this 45day 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 May 15, 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–CboeBZX–
2022–006).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–06195 Filed 3–23–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–94465; File No. SR–LTSE–
2021–08]
Self-Regulatory Organizations; LongTerm Stock Exchange, Inc.; Notice of
Filing of Amendment No. 1 and Order
Granting Accelerated Approval of a
Proposed Rule Change, as Modified by
Amendment No. 1, To Modify and
Expand the Package of Products and
Services Provided to Companies and
Clarify Existing Practice Under Rule
14.602
March 18, 2022.
I. Introduction
On December 2, 2021, Long-Term
Stock Exchange, Inc. (‘‘LTSE’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
modify and expand the package of
products and services provided to
Companies and clarify existing practice
under Exchange Rule 14.602 with
respect to providing Company-specific
web pages on the Exchange’s website in
connection with listing on the
Exchange. The proposed rule change
was published for comment in the
Federal Register on December 21,
2021.3 On February 3, 2022, pursuant to
Section 19(b)(2) of the Act,4 the
5 Id.
6 17
45 17
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 94184
(Feb. 8, 2022), 87 FR 8318.
4 15 U.S.C. 78s(b)(2).
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CFR 200.30–3(a)(31).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 93787
(December 15, 2021), 86 FR 72296 (December 21,
2021) (‘‘Notice’’).
4 15 U.S.C. 78s(b)(2).
1 15
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Federal Register / Vol. 87, No. 57 / Thursday, March 24, 2022 / Notices
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 March 9,
2022, the Exchange filed Amendment
No. 1 to the proposed rule change,
which replaced and superseded the
proposed rule change in its entirety.6
The Commission has received no
comments on the proposed rule change.
This order provides notice of the filing
of Amendment No. 1 to the proposed
rule change, and grants approval to the
proposed rule change, as modified by
Amendment No. 1, on an accelerated
basis.
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II. Description of the Proposed Rule
Change, as Modified by Amendment
No. 1
The Exchange proposes to modify and
expand the package of products and
services provided to Companies and
clarify existing practice under Exchange
Rule 14.602 with respect to providing
Company-specific web pages on the
Exchange’s website in connection with
listing on the Exchange.7
Currently, in connection with a
Company’s approval for listing, the
Exchange offers complimentary
promotional services (including press
releases, articles, videos, and podcasts)
and invites the Company to participate
in listing ceremonies.8 According to
5 See Securities Exchange Act Release No. 94140
(January 19, 2022), 87 FR 7521 (February 9, 2022).
The Commission designated March 21, 2022, as the
date by which the Commission shall approve or
disapprove, or institute proceedings to determine
whether to disapprove, the proposed rule change.
6 In Amendment No. 1 to the proposed rule
change, the Exchange: (i) Removed provisions
related to a proposed optional credit for certain
products and services utilized by Companies prior
to listing on the Exchange; (ii) proposed timelines
for Companies (whether newly or currently listed
Companies) to exercise their option to request and
commence receiving certain complimentary
products and services offered by the Exchange; (iii)
added justification for offering such products and
services to currently listed Companies; and (iv)
made minor technical changes to improve the
clarity of the proposed rule change. Amendment
No. 1 is available on the Commission’s website at
https://www.sec.gov/comments/sr-ltse-2021-08/
srltse202108-20119645-272512.pdf.
7 See Amendment No. 1, supra note 6, at 3.
‘‘Company’’ means the issuer of a security listed or
applying to list on the Exchange. For purposes of
Chapter 14 of the LTSE Rules, the term ‘‘Company’’
includes an issuer that is not incorporated, such as,
for example, a limited partnership. See Exchange
Rule 14.002(a)(5).
8 See Exchange Rule 14.602; Amendment No. 1,
supra note 6, at 6–7. See also Release No. 91054
(February 3, 2021), 86 FR 8812 (February 9, 2021)
(SR–LTSE–2020–22) (Notice of Filing of
Amendment No. 1 and Order Granting Accelerated
Approval of a Proposed Rule Change, as Modified
by Amendment No. 1, To Adopt Rule 14.602
Related to Promotional Services and Listing
Ceremonies for Listed Companies). Each Company
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LTSE, as part of these promotional
services, the Exchange 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.9 The Exchange first
proposes to clarify under Exchange Rule
14.602 that such Company-specific web
pages are included as part of the
Exchange’s complimentary promotional
services in connection with listing on
the Exchange.10 The Exchange also
proposes to 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.11 The Exchange states that these
ongoing promotional services could be
discontinued at the Company’s
discretion at any time.12 According to
the Exchange, these services have a
retail value of approximately $5,000 per
year.13
Next, the Exchange proposes to
provide each listed Company with
complimentary ‘‘Capital Market
Reports’’ on an ongoing basis.14 The
Exchange states that these Capital
Market Reports would provide tailored
investor and capital markets insights
and analytics that are relevant to each
listed Company and its market sector,
including a summary evaluation of the
Company’s current institutional investor
base that provides specific metrics
analyzing the Environmental, Social,
and Governance (‘‘ESG’’) profile of each
underlying institutional investor, and
would highlight investor behavior and
provide insights on their likely strategic
priorities so that Companies can better
may elect whether or not to receive these services
or whether or not to participate in any listing
ceremonies. See Exchange Rule 14.602.
9 See Amendment No. 1, supra note 6, at 6–7.
Exchange Rule 14.425(a) requires Companies to
adopt and publish various ‘‘Long-Term Policies,’’
which must be consistent with certain principles
articulated in Exchange Rule 14.425(b). See id. at
9 n.12.
10 See proposed Exchange Rule 14.602(a);
Amendment No. 1, supra note 6, at 6–7.
11 See proposed Exchange Rule 14.602(b);
Amendment No. 1, supra note 6, at 6–7. According
to the Exchange, as is the case with the current
promotional services, all updates to Companyspecific web pages on the Exchange’s website
would be managed by an affiliate, LTSE Services,
Inc. (‘‘LTSE Services’’), subject to review and
approval by the Exchange and the listed Company.
See Amendment No. 1, supra note 6, at 5, 7.
12 See Amendment No. 1, supra note 6, at 12.
13 See id. at 7. The Exchange states that this retail
value is based on market rate estimates by LTSE
Services. See id. at 7 n.10.
14 See proposed Exchange Rule 14.602(b);
Amendment No. 1, supra note 6, at 7. These Capital
Markets Reports would be provided by LTSE
Services. See Amendment No. 1, supra note 6, at
7.
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16801
understand their current status.15 The
Capital Markets Reports would be
issued periodically, at a minimum of
one report and at most four reports each
calendar year.16 The Exchange states
that the Capital Markets Reports could
be discontinued at the Company’s
discretion at any time.17 According to
the Exchange, an annual subscription to
the Capital Markets reports has a retail
value of approximately $5,000 per year
on a flat fee basis, regardless of the
number of reports issued.18
Lastly, the Exchange proposes to
provide each listed Company with up to
one year of complimentary Capital
Market Solutions (‘‘CM Solutions’’).19
According to the Exchange, CM
Solutions has two components: (i) The
Investor Alignment Solution; and (ii)
the Long-Term Investor Platform
(‘‘LTIP’’).20
The Exchange states that the Investor
Alignment Solution would provide
recipient Companies with detailed
institutional 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, with
LTSE Services analyzing the ESG profile
of institutional investors in order to
understand and identify relevant
sources of capital to aid the Company in
honing and achieving strategic
priorities, deploying a highlyexperienced, multi-disciplinary team to
support this long-term governance and
capital markets strategy.21 According to
the Exchange, the Investor Alignment
Solution has a retail value of
approximately $150,000 per year.22
The Exchange states that the LTIP is
a platform that would provide listed
Companies with a means to upload and
effectively manage and use their
registered shareholder data received
from their transfer agent.23 Registered
shareholders are listed directly on the
records of an issuer or the issuer’s
15 See
Amendment No. 1, supra note 6, at 7–8.
id. at 7.
17 See id. at 12.
18 See id. at 8. The Exchange states that this retail
value is based on market rate estimates by LTSE
Services. See id. at 8 n.11.
19 See proposed Exchange Rule 14.602(b);
Amendment No. 1, supra note 6, at 8. CM Solutions
would be provided by LTSE Services. See id.
Amendment No. 1, supra note 6, at 8.
20 See id. Amendment No. 1, supra note 6, at 8.
21 See id. at 8–9.
22 See id. at 9. The Exchange states this retail
value reflects LTSE Services’ current price list. See
id. at 9 n.13.
23 See id. at 10.
16 See
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Federal Register / Vol. 87, No. 57 / Thursday, March 24, 2022 / Notices
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transfer agent under their own names.24
Because their ownership of shares is
listed on records maintained by the
issuer or its transfer agent, registered
shareholders have a direct relationship
with the issuer.25 Relatedly, Exchange
Rule 14.208 requires that (subject to
certain exceptions) all securities listed
on the Exchange must be eligible for a
‘‘Direct Registration Program’’ operated
by a clearing agency registered under
Section 17A of the Act,26 defined as any
program by a Company (directly or
through its transfer agent) whereby a
shareholder may have securities
registered in the shareholder’s name on
the books of the Company or its transfer
agent without the need for a physical
certificate to evidence ownership.27 In
this regard, the Exchange states that the
primary means by which shareholders
become registered shareholders is
through the Direct Registration System
(‘‘DRS’’) operated by the Depository
Trust Company (‘‘DTC’’).28
According to the Exchange, the LTIP
would allow Companies to more easily
track, analyze, and utilize registered
shareholder data in support of their
investor relations, strategic initiatives,
board review, and governance
functions.29 As part of the LTIP, the
Exchange states that LTSE Services
would also 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 brokerdealer to complete a submission to the
‘‘DRS Profile System’’ maintained by the
DTC.30 According to the Exchange, the
LTIP has a retail value of approximately
$150,000 per year if purchased on an
individual basis.31
24 See Securities Exchange Act Release No. 76743
(December 22, 2015), 80 FR 81947, 81957
(December 31, 2015) (File No. S7–27–15).
25 See Securities Exchange Act Release No. 62495
(July 14, 2010), 75 FR 42981, 42985 (June 22, 2010)
(File No. S7–14–10).
26 See Amendment No. 1, supra note 6, at 10.
27 See Exchange Rule 14.002(a)(8).
28 See Amendment No. 1, supra note 6, at 10.
29 See id. at 10–11. The Exchange states that
registered shareholder information in LTIP is
proprietary to the Company and viewable only by
the Company and its authorized agents. See id. at
11 n.18.
30 See id. at 11. The Exchange states that any
outreach to existing or potential investors would be
entirely at the discretion of the Company and
would be conducted exclusively by the Company,
and that no personnel from LTSE Services or the
Exchange would have any role in communicating
with investors on behalf of the Company. Based on
customer demand, the LTIP would also provide a
means for a Company to communicate with
registered shareholders who choose to participate
via the Company’s LTIP account. See id. at 11 n.19.
31 See id. at 11. The Exchange states that this
retail value reflects LTSE Services’ current price
list. See id. at 11 n.20.
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The Exchange proposes that newly
and currently listed Companies would
have the option of receiving CM
Solutions on a complimentary basis for
a continuous one-year term.32 A newly
listed Company that wishes to receive
the complimentary CM Solutions would
be required to request and commence
receiving the CM Solutions within 90
days of its initial listing date.33 A
currently listed Company that wishes to
receive the complimentary CM
Solutions would be required to request
and commence receiving the CM
Solutions within 90 days of the
effectiveness of this proposed rule
change.34 The start date for the
continuous complimentary one-year
period for both newly and currently
listed Companies would begin on the
date of first use by a Company, subject
to the 90-day periods noted above, as
applicable.35 At the end of the one-year
complimentary period for CM Solutions,
Companies could choose to renew these
services on a contractual basis with
LTSE Services and pay for them in the
regular course, or discontinue them.36 If
a Company ceases to be listed on the
Exchange, the complimentary CM
Solutions would end as of the date of
de-listing, even if less than a one-year
period has elapsed.37
The Exchange states that Companies
are not required to use the products and
services proposed above as a condition
of listing, and may choose not to avail
themselves of any of these products and
services or only a subset of them.38 If a
listed Company chooses to discontinue
receiving any of these products or
services, the Exchange states that there
would be no effect on the Company’s
continued listing on the Exchange.39
Moreover, the Exchange represents that
no listed Company will be required to
pay higher fees as a result of this
proposed rule change; that providing
the proposed products and services will
have no impact on the resources
available for the Exchange’s regulatory
programs; and 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.40
III. Discussion and Commission
Findings
The Commission has carefully
reviewed the proposed rule change, as
modified by Amendment No. 1, and
finds that it is consistent with the
requirements of Section 6 of the Act.41
Specifically, the Commission finds that
the proposal is consistent with Sections
6(b)(4) 42 and 6(b)(5) of the Act 43 in
particular, in that the proposed rule is
designed to provide for the equitable
allocation of reasonable dues, fees, and
other charges among Exchange
members, issuers, and other persons
using the Exchange’s facilities, and is
not designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers. Moreover,
the Commission finds that the proposal
is consistent with Section 6(b)(8) of the
Act 44 in that it does not impose any
burden on competition not necessary or
appropriate in furtherance of the
purposes of the Act.
The Exchange proposes to modify and
expand the package of products and
services provided to Companies and
clarify existing practice under Exchange
Rule 14.602 with respect to providing
Company-specific web pages on the
Exchange’s website in connection with
listing on the Exchange. The
Commission believes that by describing
and clarifying in its Rules the
complimentary products and services
available to listed Companies, the
Exchange is adding greater transparency
to its rules and the fees applicable to
such Companies.45 This will help to
ensure that individual listed Companies
are not given specially negotiated
packages of products and services to list
40 See
id. at 12–13.
U.S.C. 78f. In approving this proposed rule
change, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
42 15 U.S.C. 78f(b)(4).
43 15 U.S.C. 78f(b)(5).
44 15 U.S.C. 78f(b)(8).
45 The Commission views complimentary
products and services provided by exchanges to
listed companies as a discount on the ultimate
listing fees paid by such companies. See, e.g.,
Securities Exchange Act Release Nos. 91054
(February 3, 2021), 86 FR 8812 (February 9, 2021)
(order approving SR–LTSE–2020–22); 81872
(October 13, 2017), 82 FR 48733 (October 19, 2017)
(order approving SR–IEX–2017–20); 65127 (August
12, 2011), 76 FR 51449 (August 18, 2011) (order
approving SR–NYSE–2011–20); and 65963
(December 15, 2011), 76 FR 79262 (December 21,
2011) (order approving SR–NASDAQ–2011–122).
41 15
32 See proposed Exchange Rule 14.602(b)(2);
Amendment No. 1, supra note 6, at 11. The
Exchange states that 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 basis. See Amendment No. 1, supra
note 6, at 12.
33 See proposed Exchange Rule 14.602(b)(2)(a);
Amendment No. 1, supra note 6, at 11.
34 See proposed Exchange Rule 14.602(b)(2)(b);
Amendment No. 1, supra note 6, at 11.
35 See proposed Exchange Rule 14.602(b)(2);
Amendment No. 1, supra note 6, at 11.
36 See Amendment No. 1, supra note 6, at 12.
37 See id.
38 See id.
39 See id.
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or remain listed that would raise unfair
discrimination issues under the Act.
Moreover, the Commission notes the
Exchange’s representations that the
proposed complimentary products and
services will be offered to all listed
Companies on the same terms and
conditions without differentiation.46 In
this respect, the Commission notes that
the Exchange would offer all currently
and newly listed Companies
complimentary periodic Capital Markets
Reports and Company-specific web page
updates on the Exchange’s website on
an ongoing basis.47 All currently and
newly listed Companies would also be
provided the same one-year term of
complimentary CM Solutions to be
utilized at their discretion, provided
such complimentary services are
requested and commenced within the
90-day periods noted above, as
applicable.48 According to the
Exchange, these 90-day opt-in periods
for newly and currently listed
Companies offer them sufficient
flexibility and autonomy in requesting
and commencing receiving CM
Solutions.49 The Commission believes
that these timeframes would provide
only a short window of time to allow
companies to avail themselves of these
complimentary products and services,
and notes that these timeframes would
only be available to Companies that
have already determined to list or are
already listed on the Exchange.50
Accordingly, the Commission believes
that the proposed rule change, as
modified by Amendment No. 1, is
consistent with the requirements of the
Act and, in particular, that the services
are equitably allocated among issuers
consistent with Section 6(b)(4) of the
Act,51 and the rule does not unfairly
discriminate between issuers consistent
with Section 6(b)(5) of the Act.52
The Commission also acknowledges
that the Exchange is responding to
competitive pressures in the market for
listings in making this proposal.
Specifically, according to LTSE, the
Exchange expects to face competition as
a new entrant in the market for
exchange listings, and it believes the
complimentary products and services
that it proposes to offer to listed
companies will facilitate LTSE’s ability
to attract and retain listings.53 In
addition, the Exchange states that
46 See
Amendment No. 1, supra note 6, at 15–16.
proposed Exchange Rule 14.602(b)(1).
48 See Amendment No. 1, supra note 6, at 15.
49 See id. at 11–12.
50 The Commission expects the Exchange to track
the start (and end) date of each free service.
51 15 U.S.C. 78f(b)(4).
52 15 U.S.C. 78f(b)(5).
53 See Amendment No. 1, supra note 6, at 13–15.
47 See
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comparable complimentary products
and services are already provided by
other listing exchanges.54 Accordingly,
the Commission believes that the
proposed rule change, as modified by
Amendment No. 1, reflects the current
competitive environment for exchange
listings among national securities
exchanges, and is appropriate and
consistent with Section 6(b)(8) of the
Act.55
IV. Solicitation of Comments on
Amendment No. 1
Interested persons are invited to
submit written data, views, and
arguments concerning whether
Amendment No. 1 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 No. 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 No.
SR–LTSE–2021–08. The file numbers
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 such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
54 See id. at 16–17. See also New York Stock
Exchange LLC Listed Company Manual Section 907
and The Nasdaq Stock Market LLC Rule IM–5900–
7.
55 15 U.S.C. 78f(b)(8).
PO 00000
Frm 00100
Fmt 4703
Sfmt 4703
16803
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 publicly available. All
submissions should refer to File No.
SR–LTSE–2021–08 and should be
submitted on or before April 14, 2022.
V. Accelerated Approval of Proposed
Rule Change, as Modified by
Amendment No. 1
The Commission finds good cause to
approve the proposed rule change, as
modified by Amendment No. 1, prior to
the thirtieth day after the date of
publication of notice of the amended
proposal in the Federal Register. As
discussed above, in Amendment No. 1,
the Exchange: (i) Removed provisions
related to a proposed optional credit for
certain products and services utilized by
Companies prior to listing on the
Exchange; (ii) proposed timelines for
Companies (whether newly or currently
listed Companies) to exercise their
option to request and commence
receiving certain complimentary
products and services offered by the
Exchange; (iii) added justification for
offering such products and services to
currently listed Companies; and (iv)
made minor technical changes to
improve the clarity of the proposed rule
change. The Commission believes that
these changes will help to ensure that
individual listed Companies are not
given specially negotiated packages of
products and services to list or remain
listed, as well as to ensure that the
services are equitably allocated among
issuers consistent with Section 6(b)(4) of
the Act 56 and that the proposed rule
change does not unfairly discriminate
between issuers consistent with Section
6(b)(5) of the Act.57 In addition,
Amendment No. 1 does not alter any
substantive provisions of the remaining
parts of the proposed rule change from
what is set forth in the Notice, which
was subject to a full comment period.
Accordingly, the Commission finds
good cause, pursuant to Section 19(b)(2)
of the Act,58 to approve the proposed
rule change, as modified by Amendment
No. 1, on an accelerated basis.
VI. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,59 that the
proposed rule change (SR–LTSE–2021–
08), as modified by Amendment No. 1,
56 15
U.S.C. 78f(b)(4).
U.S.C. 78f(b)(5).
58 15 U.S.C. 78s(b)(2).
59 15 U.S.C. 78s(b)(2).
57 15
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Federal Register / Vol. 87, No. 57 / Thursday, March 24, 2022 / Notices
be, and hereby is, approved on an
accelerated basis.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.60
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–06186 Filed 3–23–22; 8:45 am]
BILLING CODE 8011–01–P
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–94473; File No. SR–
NASDAQ–2022–022]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
General 3, Rule 1002, Qualifications of
Exchange Members and Associated
Persons; Registration of Branch
Offices and Designation of Office of
Supervisory Jurisdiction
March 18, 2022.
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 March 8,
2022, The Nasdaq Stock Market LLC
(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘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.
khammond on DSKJM1Z7X2PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
General 3, Rule 1002, Qualifications of
Exchange Members and Associated
Persons; Registration of Branch Offices
and Designation of Office of Supervisory
Jurisdiction.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/nasdaq/rules, 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
Exchange included statements
concerning the purpose of and basis for
60 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Sep<11>2014
17:39 Mar 23, 2022
Jkt 256001
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
1. Purpose
The Exchange proposes to amend
General 3, Rule 1002, Qualifications of
Exchange Members and Associated
Persons; Registration of Branch Offices
and Designation of Office of Supervisory
Jurisdiction. Specifically, General 3,
Rule 1002(b) provides for ineligibility of
certain persons for Membership or
Association. General 3, Rule 1002(b)(2)
provides,
Subject to such exceptions as may be
explicitly provided elsewhere in the Rules,
no person shall become associated with a
Member, continue to be associated with a
Member, or transfer association to another
Member, if such person fails or ceases to
satisfy the qualification requirements
established by the Rules, or if such person is
or becomes subject to a statutory
disqualification; and no broker or dealer shall
be admitted to membership, and no Member
shall be continued in membership, if any
person associated with it is ineligible to be
an Associated Person under this subsection.
For purposes of statutory
disqualification, as such term is defined
in Section 3(a)(39) of the Act,3 the
Exchange proposes to specifically define
the terms ‘‘person associated with a
member’’ and ‘‘associated person’’ to
align those terms with FINRA’s ByLaws. FINRA defines the terms ‘‘person
associated with a member’’ or
‘‘associated person of a member’’ at
paragraph (ee) of Article I, Definitions,
of those By-Laws.4 Nasdaq currently
defines an ‘‘Associated Person’’ within
General 3, Section 1011(b) to mean any
partner, officer, director, or branch
3 15
U.S.C. 78c(a)(39).
By-Law Article I(ee) provides, ‘‘person
associated with a member’’ or ‘‘associated person of
a member’’ means: (1) A natural person who is
registered or has applied for registration under the
Rules of the Corporation; (2) a sole proprietor,
partner, officer, director, or branch manager of a
member, or other natural person occupying a
similar status or performing similar functions, or a
natural person engaged in the investment banking
or securities business who is directly or indirectly
controlling or controlled by a member, whether or
not any such person is registered or exempt from
registration with FINRA under these By-Laws or the
Rules of the Corporation; and (3) for purposes of
Rule 8210, any other person listed in Schedule A
of Form BD of a member.
4 FINRA
PO 00000
Frm 00101
Fmt 4703
Sfmt 4703
manager of a Member or Applicant (or
person occupying a similar status or
performing similar functions), any
person directly or indirectly controlling,
controlled by, or under common control
with such Member or Applicant, or any
employee of such Member or Applicant,
except that any person associated with
a Member or Applicant whose functions
are solely clerical or ministerial shall
not be included in the meaning of such
term for purposes of the Rules.
At this time, Nasdaq proposes to
adopt FINRA’s definitions of ‘‘person
associated with a member’’ and
‘‘associated person’’ as provided within
FINRA By-Law Article I(ee), for
purposes of statutory disqualification,
within new Nasdaq General 3, Rule
1002(b)(2)(A). As proposed, General 3,
Rule 1002(b)(2)(A) would provide,
For purposes of ‘‘statutory
disqualification’’ as such term is defined in
Section 3(a)(39) of the Exchange Act the
terms ‘‘person associated with a member’’
and ‘‘associated person’’ shall mean (1) a
natural person who is registered or has
applied for registration under the Rules of the
Exchange; (2) a sole proprietor, partner,
officer, director, or branch manager of a
member, or other natural person occupying a
similar status or performing similar
functions, or a natural person engaged in the
investment banking or securities business
who is directly or indirectly controlling or
controlled by a member, whether or not any
such person is registered or exempt from
registration with the Exchange under its
Rules; and (3) for purposes of Nasdaq General
5, Rule 8210, any other person listed in
Schedule A of Form BD of a member.
By defining the terms ‘‘person
associated with a member’’ and
‘‘associated person’’ substantively
identical 5 to FINRA, for purposes of
statutory disqualification, the Exchange
would align its application of statutory
disqualification with FINRA’s process.
This proposal would avoid potentially
different outcomes for members of both
FINRA and Nasdaq with respect to
ineligibility for membership and
association.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,6 in general, and furthers the
objectives of Section 6(b)(5) of the Act,7
in particular, in that it is designed to
promote just and equitable principles of
trade and to protect investors and the
public interest. The Exchange’s proposal
to adopt FINRA’s definitions of ‘‘person
5 References to ‘‘Corporation’’ within FINRA ByLaw Article I(ee) were amended to ‘‘Exchange’’ and
references to ‘‘By-Laws and Rules of FINRA’’ were
amended to reference Nasdaq’s Rules.
6 15 U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(5).
E:\FR\FM\24MRN1.SGM
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]]>Agencies
[Federal Register Volume 87, Number 57 (Thursday, March 24, 2022)]
[Notices]
[Pages 16800-16804]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-06186]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-94465; File No. SR-LTSE-2021-08]
Self-Regulatory Organizations; Long-Term Stock Exchange, Inc.;
Notice of Filing of Amendment No. 1 and Order Granting Accelerated
Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To
Modify and Expand the Package of Products and Services Provided to
Companies and Clarify Existing Practice Under Rule 14.602
March 18, 2022.
I. Introduction
On December 2, 2021, Long-Term Stock Exchange, Inc. (``LTSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to modify and expand the package of products and
services provided to Companies and clarify existing practice under
Exchange Rule 14.602 with respect to providing Company-specific web
pages on the Exchange's website in connection with listing on the
Exchange. The proposed rule change was published for comment in the
Federal Register on December 21, 2021.\3\ On February 3, 2022, pursuant
to Section 19(b)(2) of the Act,\4\ the
[[Page 16801]]
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 March 9, 2022, the Exchange filed Amendment No. 1 to the
proposed rule change, which replaced and superseded the proposed rule
change in its entirety.\6\ The Commission has received no comments on
the proposed rule change. This order provides notice of the filing of
Amendment No. 1 to the proposed rule change, and grants approval to the
proposed rule change, as modified by Amendment No. 1, on an accelerated
basis.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 93787 (December 15,
2021), 86 FR 72296 (December 21, 2021) (``Notice'').
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 94140 (January 19,
2022), 87 FR 7521 (February 9, 2022). The Commission designated
March 21, 2022, as the date by which the Commission shall approve or
disapprove, or institute proceedings to determine whether to
disapprove, the proposed rule change.
\6\ In Amendment No. 1 to the proposed rule change, the
Exchange: (i) Removed provisions related to a proposed optional
credit for certain products and services utilized by Companies prior
to listing on the Exchange; (ii) proposed timelines for Companies
(whether newly or currently listed Companies) to exercise their
option to request and commence receiving certain complimentary
products and services offered by the Exchange; (iii) added
justification for offering such products and services to currently
listed Companies; and (iv) made minor technical changes to improve
the clarity of the proposed rule change. Amendment No. 1 is
available on the Commission's website at https://www.sec.gov/comments/sr-ltse-2021-08/srltse202108-20119645-272512.pdf.
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change, as Modified by Amendment
No. 1
The Exchange proposes to modify and expand the package of products
and services provided to Companies and clarify existing practice under
Exchange Rule 14.602 with respect to providing Company-specific web
pages on the Exchange's website in connection with listing on the
Exchange.\7\
---------------------------------------------------------------------------
\7\ See Amendment No. 1, supra note 6, at 3. ``Company'' means
the issuer of a security listed or applying to list on the Exchange.
For purposes of Chapter 14 of the LTSE Rules, the term ``Company''
includes an issuer that is not incorporated, such as, for example, a
limited partnership. See Exchange Rule 14.002(a)(5).
---------------------------------------------------------------------------
Currently, in connection with a Company's approval for listing, the
Exchange offers complimentary promotional services (including press
releases, articles, videos, and podcasts) and invites the Company to
participate in listing ceremonies.\8\ According to LTSE, as part of
these promotional services, the Exchange 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.\9\ The Exchange first
proposes to clarify under Exchange Rule 14.602 that such Company-
specific web pages are included as part of the Exchange's complimentary
promotional services in connection with listing on the Exchange.\10\
The Exchange also proposes to 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.\11\ The Exchange states
that these ongoing promotional services could be discontinued at the
Company's discretion at any time.\12\ According to the Exchange, these
services have a retail value of approximately $5,000 per year.\13\
---------------------------------------------------------------------------
\8\ See Exchange Rule 14.602; Amendment No. 1, supra note 6, at
6-7. See also Release No. 91054 (February 3, 2021), 86 FR 8812
(February 9, 2021) (SR-LTSE-2020-22) (Notice of Filing of Amendment
No. 1 and Order Granting Accelerated Approval of a Proposed Rule
Change, as Modified by Amendment No. 1, To Adopt Rule 14.602 Related
to Promotional Services and Listing Ceremonies for Listed
Companies). Each Company may elect whether or not to receive these
services or whether or not to participate in any listing ceremonies.
See Exchange Rule 14.602.
\9\ See Amendment No. 1, supra note 6, at 6-7. Exchange Rule
14.425(a) requires Companies to adopt and publish various ``Long-
Term Policies,'' which must be consistent with certain principles
articulated in Exchange Rule 14.425(b). See id. at 9 n.12.
\10\ See proposed Exchange Rule 14.602(a); Amendment No. 1,
supra note 6, at 6-7.
\11\ See proposed Exchange Rule 14.602(b); Amendment No. 1,
supra note 6, at 6-7. According to the Exchange, as is the case with
the current promotional services, all updates to Company-specific
web pages on the Exchange's website would be managed by an
affiliate, LTSE Services, Inc. (``LTSE Services''), subject to
review and approval by the Exchange and the listed Company. See
Amendment No. 1, supra note 6, at 5, 7.
\12\ See Amendment No. 1, supra note 6, at 12.
\13\ See id. at 7. The Exchange states that this retail value is
based on market rate estimates by LTSE Services. See id. at 7 n.10.
---------------------------------------------------------------------------
Next, the Exchange proposes to provide each listed Company with
complimentary ``Capital Market Reports'' on an ongoing basis.\14\ The
Exchange states that these Capital Market Reports would provide
tailored investor and capital markets insights and analytics that are
relevant to each listed Company and its market sector, including a
summary evaluation of the Company's current institutional investor base
that provides specific metrics analyzing the Environmental, Social, and
Governance (``ESG'') profile of each underlying institutional investor,
and would highlight investor behavior and provide insights on their
likely strategic priorities so that Companies can better understand
their current status.\15\ The Capital Markets Reports would be issued
periodically, at a minimum of one report and at most four reports each
calendar year.\16\ The Exchange states that the Capital Markets Reports
could be discontinued at the Company's discretion at any time.\17\
According to the Exchange, an annual subscription to the Capital
Markets reports has a retail value of approximately $5,000 per year on
a flat fee basis, regardless of the number of reports issued.\18\
---------------------------------------------------------------------------
\14\ See proposed Exchange Rule 14.602(b); Amendment No. 1,
supra note 6, at 7. These Capital Markets Reports would be provided
by LTSE Services. See Amendment No. 1, supra note 6, at 7.
\15\ See Amendment No. 1, supra note 6, at 7-8.
\16\ See id. at 7.
\17\ See id. at 12.
\18\ See id. at 8. The Exchange states that this retail value is
based on market rate estimates by LTSE Services. See id. at 8 n.11.
---------------------------------------------------------------------------
Lastly, the Exchange proposes to provide each listed Company with
up to one year of complimentary Capital Market Solutions (``CM
Solutions'').\19\ According to the Exchange, CM Solutions has two
components: (i) The Investor Alignment Solution; and (ii) the Long-Term
Investor Platform (``LTIP'').\20\
---------------------------------------------------------------------------
\19\ See proposed Exchange Rule 14.602(b); Amendment No. 1,
supra note 6, at 8. CM Solutions would be provided by LTSE Services.
See id. Amendment No. 1, supra note 6, at 8.
\20\ See id. Amendment No. 1, supra note 6, at 8.
---------------------------------------------------------------------------
The Exchange states that the Investor Alignment Solution would
provide recipient Companies with detailed institutional 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, with
LTSE Services analyzing the ESG profile of institutional investors in
order to understand and identify relevant sources of capital to aid the
Company in honing and achieving strategic priorities, deploying a
highly-experienced, multi-disciplinary team to support this long-term
governance and capital markets strategy.\21\ According to the Exchange,
the Investor Alignment Solution has a retail value of approximately
$150,000 per year.\22\
---------------------------------------------------------------------------
\21\ See id. at 8-9.
\22\ See id. at 9. The Exchange states this retail value
reflects LTSE Services' current price list. See id. at 9 n.13.
---------------------------------------------------------------------------
The Exchange states that the LTIP is a platform that would provide
listed Companies with a means to upload and effectively manage and use
their registered shareholder data received from their transfer
agent.\23\ Registered shareholders are listed directly on the records
of an issuer or the issuer's
[[Page 16802]]
transfer agent under their own names.\24\ Because their ownership of
shares is listed on records maintained by the issuer or its transfer
agent, registered shareholders have a direct relationship with the
issuer.\25\ Relatedly, Exchange Rule 14.208 requires that (subject to
certain exceptions) all securities listed on the Exchange must be
eligible for a ``Direct Registration Program'' operated by a clearing
agency registered under Section 17A of the Act,\26\ defined as any
program by a Company (directly or through its transfer agent) whereby a
shareholder may have securities registered in the shareholder's name on
the books of the Company or its transfer agent without the need for a
physical certificate to evidence ownership.\27\ In this regard, the
Exchange states that the primary means by which shareholders become
registered shareholders is through the Direct Registration System
(``DRS'') operated by the Depository Trust Company (``DTC'').\28\
---------------------------------------------------------------------------
\23\ See id. at 10.
\24\ See Securities Exchange Act Release No. 76743 (December 22,
2015), 80 FR 81947, 81957 (December 31, 2015) (File No. S7-27-15).
\25\ See Securities Exchange Act Release No. 62495 (July 14,
2010), 75 FR 42981, 42985 (June 22, 2010) (File No. S7-14-10).
\26\ See Amendment No. 1, supra note 6, at 10.
\27\ See Exchange Rule 14.002(a)(8).
\28\ See Amendment No. 1, supra note 6, at 10.
---------------------------------------------------------------------------
According to the Exchange, the LTIP would allow Companies to more
easily track, analyze, and utilize registered shareholder data in
support of their investor relations, strategic initiatives, board
review, and governance functions.\29\ As part of the LTIP, the Exchange
states that LTSE Services would also 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.\30\
According to the Exchange, the LTIP has a retail value of approximately
$150,000 per year if purchased on an individual basis.\31\
---------------------------------------------------------------------------
\29\ See id. at 10-11. The Exchange states that registered
shareholder information in LTIP is proprietary to the Company and
viewable only by the Company and its authorized agents. See id. at
11 n.18.
\30\ See id. at 11. The Exchange states that any outreach to
existing or potential investors would be entirely at the discretion
of the Company and would be conducted exclusively by the Company,
and that no personnel from LTSE Services or the Exchange would have
any role in communicating with investors on behalf of the Company.
Based on customer demand, the LTIP would also provide a means for a
Company to communicate with registered shareholders who choose to
participate via the Company's LTIP account. See id. at 11 n.19.
\31\ See id. at 11. The Exchange states that this retail value
reflects LTSE Services' current price list. See id. at 11 n.20.
---------------------------------------------------------------------------
The Exchange proposes that newly and currently listed Companies
would have the option of receiving CM Solutions on a complimentary
basis for a continuous one-year term.\32\ A newly listed Company that
wishes to receive the complimentary CM Solutions would be required to
request and commence receiving the CM Solutions within 90 days of its
initial listing date.\33\ A currently listed Company that wishes to
receive the complimentary CM Solutions would be required to request and
commence receiving the CM Solutions within 90 days of the effectiveness
of this proposed rule change.\34\ The start date for the continuous
complimentary one-year period for both newly and currently listed
Companies would begin on the date of first use by a Company, subject to
the 90-day periods noted above, as applicable.\35\ At the end of the
one-year complimentary period for CM Solutions, Companies could choose
to renew these services on a contractual basis with LTSE Services and
pay for them in the regular course, or discontinue them.\36\ If a
Company ceases to be listed on the Exchange, the complimentary CM
Solutions would end as of the date of de-listing, even if less than a
one-year period has elapsed.\37\
---------------------------------------------------------------------------
\32\ See proposed Exchange Rule 14.602(b)(2); Amendment No. 1,
supra note 6, at 11. The Exchange states that 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 basis. See Amendment No. 1, supra note 6, at 12.
\33\ See proposed Exchange Rule 14.602(b)(2)(a); Amendment No.
1, supra note 6, at 11.
\34\ See proposed Exchange Rule 14.602(b)(2)(b); Amendment No.
1, supra note 6, at 11.
\35\ See proposed Exchange Rule 14.602(b)(2); Amendment No. 1,
supra note 6, at 11.
\36\ See Amendment No. 1, supra note 6, at 12.
\37\ See id.
---------------------------------------------------------------------------
The Exchange states that Companies are not required to use the
products and services proposed above as a condition of listing, and may
choose not to avail themselves of any of these products and services or
only a subset of them.\38\ If a listed Company chooses to discontinue
receiving any of these products or services, the Exchange states that
there would be no effect on the Company's continued listing on the
Exchange.\39\ Moreover, the Exchange represents that no listed Company
will be required to pay higher fees as a result of this proposed rule
change; that providing the proposed products and services will have no
impact on the resources available for the Exchange's regulatory
programs; and 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.\40\
---------------------------------------------------------------------------
\38\ See id.
\39\ See id.
\40\ See id. at 12-13.
---------------------------------------------------------------------------
III. Discussion and Commission Findings
The Commission has carefully reviewed the proposed rule change, as
modified by Amendment No. 1, and finds that it is consistent with the
requirements of Section 6 of the Act.\41\ Specifically, the Commission
finds that the proposal is consistent with Sections 6(b)(4) \42\ and
6(b)(5) of the Act \43\ in particular, in that the proposed rule is
designed to provide for the equitable allocation of reasonable dues,
fees, and other charges among Exchange members, issuers, and other
persons using the Exchange's facilities, and is not designed to permit
unfair discrimination between customers, issuers, brokers, or dealers.
Moreover, the Commission finds that the proposal is consistent with
Section 6(b)(8) of the Act \44\ in that it does not impose any burden
on competition not necessary or appropriate in furtherance of the
purposes of the Act.
---------------------------------------------------------------------------
\41\ 15 U.S.C. 78f. In approving this proposed rule change, the
Commission has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
\42\ 15 U.S.C. 78f(b)(4).
\43\ 15 U.S.C. 78f(b)(5).
\44\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
The Exchange proposes to modify and expand the package of products
and services provided to Companies and clarify existing practice under
Exchange Rule 14.602 with respect to providing Company-specific web
pages on the Exchange's website in connection with listing on the
Exchange. The Commission believes that by describing and clarifying in
its Rules the complimentary products and services available to listed
Companies, the Exchange is adding greater transparency to its rules and
the fees applicable to such Companies.\45\ This will help to ensure
that individual listed Companies are not given specially negotiated
packages of products and services to list
[[Page 16803]]
or remain listed that would raise unfair discrimination issues under
the Act.
---------------------------------------------------------------------------
\45\ The Commission views complimentary products and services
provided by exchanges to listed companies as a discount on the
ultimate listing fees paid by such companies. See, e.g., Securities
Exchange Act Release Nos. 91054 (February 3, 2021), 86 FR 8812
(February 9, 2021) (order approving SR-LTSE-2020-22); 81872 (October
13, 2017), 82 FR 48733 (October 19, 2017) (order approving SR-IEX-
2017-20); 65127 (August 12, 2011), 76 FR 51449 (August 18, 2011)
(order approving SR-NYSE-2011-20); and 65963 (December 15, 2011), 76
FR 79262 (December 21, 2011) (order approving SR-NASDAQ-2011-122).
---------------------------------------------------------------------------
Moreover, the Commission notes the Exchange's representations that
the proposed complimentary products and services will be offered to all
listed Companies on the same terms and conditions without
differentiation.\46\ In this respect, the Commission notes that the
Exchange would offer all currently and newly listed Companies
complimentary periodic Capital Markets Reports and Company-specific web
page updates on the Exchange's website on an ongoing basis.\47\ All
currently and newly listed Companies would also be provided the same
one-year term of complimentary CM Solutions to be utilized at their
discretion, provided such complimentary services are requested and
commenced within the 90-day periods noted above, as applicable.\48\
According to the Exchange, these 90-day opt-in periods for newly and
currently listed Companies offer them sufficient flexibility and
autonomy in requesting and commencing receiving CM Solutions.\49\ The
Commission believes that these timeframes would provide only a short
window of time to allow companies to avail themselves of these
complimentary products and services, and notes that these timeframes
would only be available to Companies that have already determined to
list or are already listed on the Exchange.\50\ Accordingly, the
Commission believes that the proposed rule change, as modified by
Amendment No. 1, is consistent with the requirements of the Act and, in
particular, that the services are equitably allocated among issuers
consistent with Section 6(b)(4) of the Act,\51\ and the rule does not
unfairly discriminate between issuers consistent with Section 6(b)(5)
of the Act.\52\
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\46\ See Amendment No. 1, supra note 6, at 15-16.
\47\ See proposed Exchange Rule 14.602(b)(1).
\48\ See Amendment No. 1, supra note 6, at 15.
\49\ See id. at 11-12.
\50\ The Commission expects the Exchange to track the start (and
end) date of each free service.
\51\ 15 U.S.C. 78f(b)(4).
\52\ 15 U.S.C. 78f(b)(5).
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The Commission also acknowledges that the Exchange is responding to
competitive pressures in the market for listings in making this
proposal. Specifically, according to LTSE, the Exchange expects to face
competition as a new entrant in the market for exchange listings, and
it believes the complimentary products and services that it proposes to
offer to listed companies will facilitate LTSE's ability to attract and
retain listings.\53\ In addition, the Exchange states that comparable
complimentary products and services are already provided by other
listing exchanges.\54\ Accordingly, the Commission believes that the
proposed rule change, as modified by Amendment No. 1, reflects the
current competitive environment for exchange listings among national
securities exchanges, and is appropriate and consistent with Section
6(b)(8) of the Act.\55\
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\53\ See Amendment No. 1, supra note 6, at 13-15.
\54\ See id. at 16-17. See also New York Stock Exchange LLC
Listed Company Manual Section 907 and The Nasdaq Stock Market LLC
Rule IM-5900-7.
\55\ 15 U.S.C. 78f(b)(8).
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IV. Solicitation of Comments on Amendment No. 1
Interested persons are invited to submit written data, views, and
arguments concerning whether Amendment No. 1 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 No. 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 No. SR-LTSE-2021-08. The file
numbers 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 such 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 publicly available. All submissions
should refer to File No. SR-LTSE-2021-08 and should be submitted on or
before April 14, 2022.
V. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment No. 1
The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 1, prior to the thirtieth day
after the date of publication of notice of the amended proposal in the
Federal Register. As discussed above, in Amendment No. 1, the Exchange:
(i) Removed provisions related to a proposed optional credit for
certain products and services utilized by Companies prior to listing on
the Exchange; (ii) proposed timelines for Companies (whether newly or
currently listed Companies) to exercise their option to request and
commence receiving certain complimentary products and services offered
by the Exchange; (iii) added justification for offering such products
and services to currently listed Companies; and (iv) made minor
technical changes to improve the clarity of the proposed rule change.
The Commission believes that these changes will help to ensure that
individual listed Companies are not given specially negotiated packages
of products and services to list or remain listed, as well as to ensure
that the services are equitably allocated among issuers consistent with
Section 6(b)(4) of the Act \56\ and that the proposed rule change does
not unfairly discriminate between issuers consistent with Section
6(b)(5) of the Act.\57\ In addition, Amendment No. 1 does not alter any
substantive provisions of the remaining parts of the proposed rule
change from what is set forth in the Notice, which was subject to a
full comment period. Accordingly, the Commission finds good cause,
pursuant to Section 19(b)(2) of the Act,\58\ to approve the proposed
rule change, as modified by Amendment No. 1, on an accelerated basis.
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\56\ 15 U.S.C. 78f(b)(4).
\57\ 15 U.S.C. 78f(b)(5).
\58\ 15 U.S.C. 78s(b)(2).
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VI. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\59\ that the proposed rule change (SR-LTSE-2021-08), as modified
by Amendment No. 1,
[[Page 16804]]
be, and hereby is, approved on an accelerated basis.
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\59\ 15 U.S.C. 78s(b)(2).
\60\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\60\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-06186 Filed 3-23-22; 8:45 am]
BILLING CODE 8011-01-P
