Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Section 902.05 of the NYSE Listed Company Manual To Establish a Cap on Listing Fees Billed When a Structured Product Is Issued as a Dividend, 53805-53807 [2022-18857]
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Federal Register / Vol. 87, No. 169 / Thursday, September 1, 2022 / Notices
Commission disagrees. As discussed
above, on average broker-dealer
members with lower Excess Net Capital
amounts present higher risk exposures
to NSCC relative to their capital
levels.107 Additionally, the Commission
understands that NSCC considered
several additional risks faced by its
members, both qualitative and
quantitative, in determining its
proposed capital requirements, which
the Commission believes demonstrate
the reasonableness of the proposed
minimum capital requirements, as
discussed above in Section III.A.i.108
Regarding U.S. and non-U.S. banks and
trust companies, the proposal will set
the minimum capital requirements
based on standards and measures used
by banking regulators. Regarding nonU.S. broker-dealers and for all other
types of members, the proposal would
eliminate conditional and discretionary
minimum capital requirements in favor
of establishing objective minimum
capital requirements. Therefore, the
Commission concludes the proposal is
reasonably designed to establish
objective, risk-based, and publicly
disclosed criteria for participation.
For the reasons described above, the
Commission finds that the Proposed
Rule Change is consistent with Rule
17Ad–22(e)(18) under the Act.109
IV. Conclusion
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On the basis of the foregoing, the
Commission finds that the Proposed
Rule Change is consistent with the
requirements of the Act and in
particular with the requirements of
Section 17A of the Act 110 and the rules
and regulations promulgated
thereunder.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act 111 that
proposed rule change SR–NSCC–2021–
016, be, and hereby is, approved.112
inaccurate assertion that self-clearing includes
proprietary trading firms only, while clears on
behalf of others refers to agency firms only. Rather,
both types of members could be engaged in both
proprietary and customer trading.
107 See supra note 54 and accompanying text.
108 See supra note 72. See also Notice of Filing,
supra note 3, at 74196; and NSCC Response Letter,
supra note 19, at 2 (noting that while members may
not routinely experience issues related to legal,
operational, or cyber risks, these issues can arise,
possibly without advance warning, and, as such,
they are considered a critical part of the ongoing
credit risks that members present to NSCC and that
NSCC must manage).
109 Id.
110 15 U.S.C. 78q–1.
111 15 U.S.C. 78s(b)(2).
112 In approving the Proposed Rule Change, the
Commission considered its impact on efficiency,
competition, and capital formation. 15 U.S.C. 78c(f).
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.113
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–18861 Filed 8–31–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–95613; No. SR–NYSE–
2022–38]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
Section 902.05 of the NYSE Listed
Company Manual To Establish a Cap
on Listing Fees Billed When a
Structured Product Is Issued as a
Dividend
August 26, 2022.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on August
22, 2022, New York Stock Exchange
LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Section 902.05 of the NYSE Listed
Company Manual (the ‘‘Manual’’) to
establish a cap on listing fees billed
when a structured product is issued as
a dividend.4 The proposed rule change
is available on the Exchange’s website at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
113 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
4 The Exchange originally filed to amend the
Manual on August 16, 2022 (SR–NYSE–2022–33)
and withdrew such filing on August 22, 2022.
1 15
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53805
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Section 902.05 of the Manual sets
forth initial listing fees and annual fees
applicable to structured products listed
under Section 703.18, the equity criteria
set out in Section 703.19, and Section
703.21, and traded on the equity floor of
the Exchange. The term ‘‘retail debt
securities’’ refers to debt securities that
are listed under the equity criteria set
out in Section 703.19 and traded on the
equity floor of the Exchange. Subject to
certain limitations set forth in the rule,
issuers must pay listing fees for
structured products at a per share rate
using the following tiered fee structure:
• For an issuance up to and including
two million shares, the rate is $0.01475
per share;
• For an issuance over two million
shares and up to and including four
million shares, the rate is $0.0074 per
share;
• For an issuance over four million
shares and up to and including 300
million shares, the rate is $0.0035 per
share;
• For an issuance over 300 million
shares, the rate is $0.0019 per share.
The Exchange now proposes to adopt
a cap on listing fees in relation to
structured products issued as a
dividend. As proposed, listing fees on
structured products issued as a
dividend would be capped at $150,000
per issuance. The Exchange notes that
the issuer in such cases is not receiving
any cash or other consideration and
would therefore not be generating any
funds out of which it could pay the
listing fees, as would be the case if it
sold the securities. Therefore, the
Exchange believes it is reasonable to
apply a lower fee cap than is applied
when structured products are sold in a
capital raising transaction, as is more
usually the case. The Exchange notes
that the Manual already contains a
similar $150,000 cap on listing fees for
shares of common stock issued in
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Federal Register / Vol. 87, No. 169 / Thursday, September 1, 2022 / Notices
connection with a stock split or stock
dividend.5
The Exchange proposes to remove
from Section 902.05 the reference to the
fact that the fees set forth in that rule are
applicable to securities listed under
Section 703.21. Section 703.21 formerly
set forth listing standards for the listing
of equity-linked debt securities.
However, the Exchange has reorganized
its rules, so that its listing standards for
equity-linked debt securities (now call
equity linked notes or ‘‘ELNs’’) are now
set forth in Rule 5.2(j)(2) rather than
Section 703.21 and Section 703.21 is
reserved.6 As such, the reference to
Section 703.21 in Section 902.05 is no
longer relevant and should be deleted.
The Exchange notes that it does not
currently have any listed ELNs and that
it would have to adopt fees prior to
listing any ELNs under Rule 5.2(j)(2). If
the Exchange concludes that the
appropriate fees for ELNs under Rule
5.2(j)(2) would be different from those
provided for structured products under
Section 902.05, the filing proposing
such fees would set forth the Exchange’s
reasons for believing that this difference
was not inequitable or unfairly
discriminatory.
The Exchange also proposes to
remove from Section 902.05 references
to the annual fees that were applicable
prior to 2019, as that fee is no longer
relevant.
2. Statutory Basis
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The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,7 in general, and
furthers the objectives of Section
6(b)(4) 8 of the Act, in particular, in that
it is designed to provide for the
equitable allocation of reasonable dues,
fees, and other charges. The Exchange
also believes that the proposed rule
change is consistent with Section 6(b)(5)
of the Act,9 in that it is designed to
promote just and equitable principles of
5 See Securities Exchange Act Release No. 52463
(September 16, 2005); 70 FR 55933 (September 23,
2005) (SR–NYSE–2005–35) (notice of the proposal
to adopt this approach with respect to stock splits).
See also Securities Exchange Act Release No. 52696
(October 28, 2005); 70 FR 66881 (November 3, 2005)
(SR–NYSE–2005–35) (approval of the adoption of
this approach with respect to stock splits).
6 See Securities Exchange Act Release No. 84351
(October 3, 2018); 83 FR 50980 (October 10, 2018)
(SR–NYSE–2018–30) (among other things, deleting
Section 703.21). See also Securities Exchange Act
Release No. 80214 (March 10, 2017); 82 FR 14050
(March 16, 2017) (SR–NYSE–2016–44) (among
other things, adopting Rule 5.2(j)(2) for the listing
of ELNs; Rule 5.2(j)(2) is substantially the same as
the listing standard for ELNs set forth in NYSE Arca
Equities Rule 5.2(j)(2)).
7 15 U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(4).
9 15 U.S.C. 78f(b)(5).
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trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest and is not designed to
permit unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange believes that the
proposal to cap listing fees for structure
products issued as a dividend at
$150,000 per issuance is equitable and
not unfairly discriminatory. The
Exchange notes that the issuer in such
cases is not receiving any cash or other
consideration and would therefore not
be generating any funds out of which it
could pay the listing fees, as would be
the case if it sold the securities.
Therefore, the Exchange believes it is
reasonable to apply a lower fee cap than
is applied when structured products are
sold in a capital raising transaction, as
is more usually the case. The Exchange
notes that the Manual already contains
a similar $150,000 cap on listing fees for
shares of common stock issued in
connection with a stock split or stock
dividend.
The removal from Section 902.05 of
the reference to the fact that the fees set
forth in that rule are applicable to
securities listed under Section 703.21 is
not inequitable or unfairly
discriminatory, as it reflects the fact that
ELNs are now listed under Rule 5.2(j)(2)
rather than Section 703.21. As such, the
reference to Section 703.21 in Section
902.05 is no longer relevant and should
be deleted. The Exchange notes that it
does not currently have any listed ELNs
and that it would have to adopt fees
prior to listing any ELNs under Rule
5.2(j)(2). If the Exchange concludes that
the appropriate fees for ELNs under
Rule 5.2(j)(2) would be different from
those provided for structured products
under Section 703.21 [sic], the filing
proposing such fees would set forth the
Exchange’s reasons for believing that
this difference was not inequitable or
unfairly discriminatory.
The removal of the references to
annual fees applied before 2019 has no
substantive effect, as that fee is no
longer applied by its terms.
For the foregoing reasons, the
Exchange believes that the proposal is
consistent with the Act.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
PO 00000
Frm 00097
Fmt 4703
Sfmt 4703
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed fee cap will be applicable to
all similarly situated issuers on the
same basis.
The Exchange does not believe that
the proposed fee cap will have any
meaningful effect on the competition
among issuers listed on the Exchange.
The Exchange operates in a highly
competitive market in which issuers can
readily choose to list new securities on
other exchanges and transfer listings to
other exchanges if they deem fee levels
at those other venues to be more
favorable.
Because competitors are free to
modify their own fees in response, and
because issuers may change their listing
venue, the Exchange does not believe its
proposed fee change can impose any
burden on intermarket competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective
upon filing pursuant to Section
19(b)(3)(A) 10 of the Act and
subparagraph (f)(2) of Rule 19b–4 11
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 12 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
10 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
12 15 U.S.C. 78s(b)(2)(B).
11 17
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Federal Register / Vol. 87, No. 169 / Thursday, September 1, 2022 / Notices
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSE–2022–38 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.
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All submissions should refer to File
Number SR–NYSE–2022–38. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSE–2022–38, and
should be submitted on or before
September 22, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–18857 Filed 8–31–22; 8:45 am]
BILLING CODE 8011–01–P
13 17
CFR 200.30–3(a)(12).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–95615; File No. SR–DTC–
2021–017]
Self-Regulatory Organizations; The
Depository Trust Company; Order
Approving of Proposed Rule Change
To Enhance Capital Requirements and
Make Other Changes
August 26, 2022.
I. Introduction
On December 13, 2021, The
Depository Trust Company Corporation
(‘‘DTC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
proposed rule change SR–DTCC–2021–
017 (the ‘‘Proposed Rule Change’’)
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder.2
The Proposed Rule Change was
published for comment in the Federal
Register on December 29, 2021.3 On
January 26, 2022, pursuant to Section
19(b)(2) of the Act,4 the Commission
designated a longer period within which
to approve, disapprove, or institute
proceedings to determine whether to
approve or disapprove the Proposed
Rule Change.5 On March 23, 2022, the
Commission instituted proceedings to
determine whether to approve or
disapprove the Proposed Rule Change.6
On June 23, 2022, the Commission
designated a longer period for
Commission action on the proceedings
to determine whether to approve or
disapprove the Proposed Rule Change.7
The Commission has received
comments regarding the substance of
the Proposed Rule Change.8 For the
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 93854
(December 22, 2021), 86 FR 74122 (December 29,
2021) (File No. SR–DTC–2021–017) (‘‘Notice of
Filing’’).
4 15 U.S.C. 78s(b)(2).
5 Securities Exchange Act Release No. 94067
(January 26, 2022), 87 FR 5548 (February 1, 2022)
(SR–DTC–2021–017).
6 Securities Exchange Act Release No. 94495
(March 23, 2022), 87 FR 18451 (March 30, 2022)
(SR–DTC–2021–017).
7 Securities Exchange Act Release No. 95143
(June 23, 2022), 87 FR 38786 (June 29, 2022) (SR–
DTC–2021–017).
8 The Commission received one comment letter
that does not bear on the Proposed Rule Change.
The comment is available at https://www.sec.gov/
comments/sr-dtc-2021-017/srdtc2021017.htm.
Since the proposed changes contained in this
Proposed Rule Change are similar to changes
proposed simultaneously by DTC’s affiliates,
National Securities Clearing Corporation and Fixed
Income Clearing Corporation, the Commission has
considered all public comments received on the
proposals regardless of whether the comments are
submitted to the Proposed Rule Change or to the
proposals filed by DTC’s affiliates.
2 17
PO 00000
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53807
reasons discussed below, the
Commission is approving the Proposed
Rule Change.9
II. Description of the Proposed Rule
Change
DTC proposes to amend its Rules to
(A) increase the capital requirements
applicable to its participants,10 (B)
revise its credit risk monitoring system,
and (C) make certain other clarifying,
technical, and supplementary changes
to implement changes (A) and (B).
A. Changes to DTC’s Capital
Requirements for Participants
i. U.S. Participants
U.S. Broker-Dealer Participants: DTC
proposes to increase its minimum
excess net capital requirements for its
U.S. broker-dealer participants.
Currently, U.S. broker-dealer
participants are required to maintain a
minimum amount of not less than
$500,000 in excess net capital over the
greater of (i) the minimum capital
requirement imposed on it pursuant to
Exchange Act Rule 15c3–1,11 or (ii) such
higher minimum capital requirement
imposed by the registered brokerdealer’s designated examining
authority.12 DTC proposes to increase
the minimum excess net capital
(‘‘Excess Net Capital’’) 13 requirements
U.S. broker-dealer participants to $1
million.
U.S. Bank and Trust Company
Participants: For members who are U.S.
banks or U.S. trust companies who are
also banks,14 DTC proposes to (1)
change the capital measure from equity
capital to common equity tier 1 capital
9 Capitalized terms not defined herein are defined
in Rules, By-Laws and Organization Certificate
(‘‘Rules’’), available at https://www.dtcc.com/∼/
media/Files/Downloads/legal/rules/dtc_rules.pdf.
10 DTC states that these capital requirements have
not been updated in over 20 years. See Notice of
Filing, supra note 3, at 74122.
11 17 CFR 240.15c3–1.
12 See Section 1(b) of the Policy Statements on the
Admission of Participants and Pledgees (the ‘‘Policy
Statement’’) of the Rules, supra note 9. See also,
Section 1(h)(ii) of Rule 3 of the Rules, supra note
9.
13 DTC proposes to define ‘‘Excess Net Capital’’ as
the net capital greater than the minimum required,
as calculated in accordance with the broker-dealer’s
regulatory and/or statutory requirements.
14 For U.S. trust companies who are not banks,
DTC is not changing its existing capital requirement
of $2 million. DTC treats U.S. trust companies that
are banks and non-banks differently because they
present different risks based on the attendant risks
of their business activities, with trust companies
engaging in banking activities (e.g., receiving
deposits and making loans) being subject to greater
risks than trust companies that limit their activities
to trust activities (e.g., acting as a trustee, other
fiduciary or transfer agent/registrar). See Notice of
Filing, supra note 3, at 74125.
E:\FR\FM\01SEN1.SGM
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]]>Agencies
[Federal Register Volume 87, Number 169 (Thursday, September 1, 2022)]
[Notices]
[Pages 53805-53807]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-18857]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95613; No. SR-NYSE-2022-38]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Section 902.05 of the NYSE Listed Company Manual To Establish a
Cap on Listing Fees Billed When a Structured Product Is Issued as a
Dividend
August 26, 2022.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on August 22, 2022, New York Stock Exchange LLC (``NYSE'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Section 902.05 of the NYSE Listed
Company Manual (the ``Manual'') to establish a cap on listing fees
billed when a structured product is issued as a dividend.\4\ The
proposed rule change is available on the Exchange's website at
www.nyse.com, at the principal office of the Exchange, and at the
Commission's Public Reference Room.
---------------------------------------------------------------------------
\4\ The Exchange originally filed to amend the Manual on August
16, 2022 (SR-NYSE-2022-33) and withdrew such filing on August 22,
2022.
---------------------------------------------------------------------------
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
Section 902.05 of the Manual sets forth initial listing fees and
annual fees applicable to structured products listed under Section
703.18, the equity criteria set out in Section 703.19, and Section
703.21, and traded on the equity floor of the Exchange. The term
``retail debt securities'' refers to debt securities that are listed
under the equity criteria set out in Section 703.19 and traded on the
equity floor of the Exchange. Subject to certain limitations set forth
in the rule, issuers must pay listing fees for structured products at a
per share rate using the following tiered fee structure:
For an issuance up to and including two million shares,
the rate is $0.01475 per share;
For an issuance over two million shares and up to and
including four million shares, the rate is $0.0074 per share;
For an issuance over four million shares and up to and
including 300 million shares, the rate is $0.0035 per share;
For an issuance over 300 million shares, the rate is
$0.0019 per share.
The Exchange now proposes to adopt a cap on listing fees in
relation to structured products issued as a dividend. As proposed,
listing fees on structured products issued as a dividend would be
capped at $150,000 per issuance. The Exchange notes that the issuer in
such cases is not receiving any cash or other consideration and would
therefore not be generating any funds out of which it could pay the
listing fees, as would be the case if it sold the securities.
Therefore, the Exchange believes it is reasonable to apply a lower fee
cap than is applied when structured products are sold in a capital
raising transaction, as is more usually the case. The Exchange notes
that the Manual already contains a similar $150,000 cap on listing fees
for shares of common stock issued in
[[Page 53806]]
connection with a stock split or stock dividend.\5\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 52463 (September 16,
2005); 70 FR 55933 (September 23, 2005) (SR-NYSE-2005-35) (notice of
the proposal to adopt this approach with respect to stock splits).
See also Securities Exchange Act Release No. 52696 (October 28,
2005); 70 FR 66881 (November 3, 2005) (SR-NYSE-2005-35) (approval of
the adoption of this approach with respect to stock splits).
---------------------------------------------------------------------------
The Exchange proposes to remove from Section 902.05 the reference
to the fact that the fees set forth in that rule are applicable to
securities listed under Section 703.21. Section 703.21 formerly set
forth listing standards for the listing of equity-linked debt
securities. However, the Exchange has reorganized its rules, so that
its listing standards for equity-linked debt securities (now call
equity linked notes or ``ELNs'') are now set forth in Rule 5.2(j)(2)
rather than Section 703.21 and Section 703.21 is reserved.\6\ As such,
the reference to Section 703.21 in Section 902.05 is no longer relevant
and should be deleted. The Exchange notes that it does not currently
have any listed ELNs and that it would have to adopt fees prior to
listing any ELNs under Rule 5.2(j)(2). If the Exchange concludes that
the appropriate fees for ELNs under Rule 5.2(j)(2) would be different
from those provided for structured products under Section 902.05, the
filing proposing such fees would set forth the Exchange's reasons for
believing that this difference was not inequitable or unfairly
discriminatory.
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\6\ See Securities Exchange Act Release No. 84351 (October 3,
2018); 83 FR 50980 (October 10, 2018) (SR-NYSE-2018-30) (among other
things, deleting Section 703.21). See also Securities Exchange Act
Release No. 80214 (March 10, 2017); 82 FR 14050 (March 16, 2017)
(SR-NYSE-2016-44) (among other things, adopting Rule 5.2(j)(2) for
the listing of ELNs; Rule 5.2(j)(2) is substantially the same as the
listing standard for ELNs set forth in NYSE Arca Equities Rule
5.2(j)(2)).
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The Exchange also proposes to remove from Section 902.05 references
to the annual fees that were applicable prior to 2019, as that fee is
no longer relevant.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\7\ in general, and furthers the
objectives of Section 6(b)(4) \8\ of the Act, in particular, in that it
is designed to provide for the equitable allocation of reasonable dues,
fees, and other charges. The Exchange also believes that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\9\ in that
it is designed to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest
and is not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4).
\9\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposal to cap listing fees for
structure products issued as a dividend at $150,000 per issuance is
equitable and not unfairly discriminatory. The Exchange notes that the
issuer in such cases is not receiving any cash or other consideration
and would therefore not be generating any funds out of which it could
pay the listing fees, as would be the case if it sold the securities.
Therefore, the Exchange believes it is reasonable to apply a lower fee
cap than is applied when structured products are sold in a capital
raising transaction, as is more usually the case. The Exchange notes
that the Manual already contains a similar $150,000 cap on listing fees
for shares of common stock issued in connection with a stock split or
stock dividend.
The removal from Section 902.05 of the reference to the fact that
the fees set forth in that rule are applicable to securities listed
under Section 703.21 is not inequitable or unfairly discriminatory, as
it reflects the fact that ELNs are now listed under Rule 5.2(j)(2)
rather than Section 703.21. As such, the reference to Section 703.21 in
Section 902.05 is no longer relevant and should be deleted. The
Exchange notes that it does not currently have any listed ELNs and that
it would have to adopt fees prior to listing any ELNs under Rule
5.2(j)(2). If the Exchange concludes that the appropriate fees for ELNs
under Rule 5.2(j)(2) would be different from those provided for
structured products under Section 703.21 [sic], the filing proposing
such fees would set forth the Exchange's reasons for believing that
this difference was not inequitable or unfairly discriminatory.
The removal of the references to annual fees applied before 2019
has no substantive effect, as that fee is no longer applied by its
terms.
For the foregoing reasons, the Exchange believes that the proposal
is consistent with the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposed fee cap will be
applicable to all similarly situated issuers on the same basis.
The Exchange does not believe that the proposed fee cap will have
any meaningful effect on the competition among issuers listed on the
Exchange. The Exchange operates in a highly competitive market in which
issuers can readily choose to list new securities on other exchanges
and transfer listings to other exchanges if they deem fee levels at
those other venues to be more favorable.
Because competitors are free to modify their own fees in response,
and because issuers may change their listing venue, the Exchange does
not believe its proposed fee change can impose any burden on
intermarket competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \10\ of the Act and subparagraph (f)(2) of Rule
19b-4 \11\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \12\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\12\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
[[Page 53807]]
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NYSE-2022-38 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2022-38. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSE-2022-38, and should be submitted on
or before September 22, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-18857 Filed 8-31-22; 8:45 am]
BILLING CODE 8011-01-P
