Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change To Amend Section 312.03(b) of the NYSE Listed Company Manual To Modify the Circumstances Under Which a Listed Company Must Obtain Shareholder Approval of a Sale of Securities Below the Minimum Price to a Substantial Security Holder of the Company, 68675-68677 [2023-22038]

Download as PDF Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices I. Submitting Comments lotter on DSK11XQN23PROD with NOTICES1 A. Obtaining Information Please refer to Docket ID NRC–2023– 0079 when contacting the NRC about the availability of information for this action. You may obtain publicly available information related to this action by any of the following methods: • Federal Rulemaking website: Go to https://www.regulations.gov and search for Docket ID NRC–2023–0079. • NRC’s Agencywide Documents Access and Management System (ADAMS): You may obtain publicly available documents online in the ADAMS Public Documents collection at https://www.nrc.gov/reading-rm/ adams.html. To begin the search, select ‘‘Begin Web-based ADAMS Search.’’ For problems with ADAMS, please contact the NRC’s Public Document Room (PDR) reference staff at 1–800–397–4209, at 301–415–4737, or by email to PDR.Resource@nrc.gov. The draft SRP Section 15.0, Revision 4, ‘‘Introduction—Transient and Accident Analyses’’ is available in ADAMS under Accession No. ML22319A149. • NRC’s PDR: The PDR, where you may examine and order copies of publicly available documents, is open by appointment. To make an appointment to visit the PDR, please send an email to PDR.Resource@nrc.gov or call 1–800–397–4209 or 301–415– 4737, between 8 a.m. and 4 p.m. eastern time (ET), Monday through Friday, except Federal holidays. B. Submitting Comments The NRC encourages electronic comment submission through the Federal rulemaking website (https:// www.regulations.gov). Please include Docket ID NRC–2023–0079 in your comment submission. The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at https:// www.regulations.gov as well as enter the comment submissions into ADAMS. The NRC does not routinely edit comment submissions to remove identifying or contact information. If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment VerDate Sep<11>2014 20:21 Oct 03, 2023 Jkt 262001 68675 submissions available to the public or entering the comment into ADAMS. SECURITIES AND EXCHANGE COMMISSION II. Discussion [Release No. 34–98662; File No. SR–NYSE– 2023–34] On August 2, 2023, the NRC solicited comments on Draft NUREG 0800, ‘‘Standard Review Plan for the Review of Safety Analysis Reports for Nuclear Power Plants: LWR Edition,’’ Section 15.0, Revision 4, ‘‘Introduction— Transient and Accident Analyses.’’ The NRC sought comments on the proposed draft section revision of the Standard Review Plan (SRP), concerning the evaluation of the safety of a nuclear power plant that requires analyses of the plant’s responses to postulated equipment failures or malfunctions. The public comment period closed on October 2, 2023 (88 FR 50918). The NRC has decided to reopen the public comment period for this document for 30 days to allow more time for members of the public to develop and submit comments. Comments must be submitted no later than November 3, 2023. Comments received after this date will be considered, if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date. Dated: September 29, 2023. For the Nuclear Regulatory Commission. Gerond A. George, Chief, Licensing Project Branch, Division of Operating Reactors, Office of Nuclear Reactor Regulation. [FR Doc. 2023–22052 Filed 10–3–23; 8:45 am] BILLING CODE 7590–01–P RAILROAD RETIREMENT BOARD Sunshine Act Meetings TIME AND DATE: 10:00 a.m., October 11, 2023. Members of the public wishing to attend the meeting must submit a written request at least 24 hours prior to the meeting to receive dial-in information. All requests must be sent to SecretarytotheBoard@rrb.gov. STATUS: This meeting will be open to the public. MATTERS TO BE CONSIDERED: • Office of Legislative Affairs Update. CONTACT PERSON FOR MORE INFORMATION: Stephanie Hillyard, Secretary to the Board, (312) 751–4920. Authority: 5 U.S.C. 552b. PLACE: Dated: September 29, 2023. Stephanie Hillyard, Secretary to the Board. Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change To Amend Section 312.03(b) of the NYSE Listed Company Manual To Modify the Circumstances Under Which a Listed Company Must Obtain Shareholder Approval of a Sale of Securities Below the Minimum Price to a Substantial Security Holder of the Company September 29, 2023. 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 September 26, 2023, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Section 312.03(b) of the NYSE Listed Company Manual (‘‘Manual’’) to modify the circumstances under which a listed company must obtain shareholder approval of a sale of securities to a substantial security holder of the listed company. The text of the proposed rule change is set forth in Exhibit 5 attached [sic] hereto. The proposed rule change is available on the Exchange’s website at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, [FR Doc. 2023–22153 Filed 10–2–23; 11:15 am] 1 15 BILLING CODE 7905–01–P 2 17 PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 E:\FR\FM\04OCN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 04OCN1 68676 Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 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 lotter on DSK11XQN23PROD with NOTICES1 1. Purpose Section 312.04(e) of the Manual provides that an interest consisting of less than either five percent of the number of shares of common stock or five percent of the voting power outstanding of a company or entity shall not be considered a substantial interest or cause the holder of such an interest to be regarded as a substantial security holder. Section 312.03(b)(i) of the Manual provides that shareholder approval is required prior to the issuance of common stock, or of securities convertible into or exercisable for common stock, in any transaction or series of related transactions, to a director, officer or substantial security holder of the company if the number of shares of common stock to be issued, or if the number of shares of common stock into which the securities may be convertible or exercisable, exceeds either one percent of the number of shares of common stock or one percent of the voting power outstanding before the issuance. The Manual provides an exception to the shareholder approval requirement if such transaction is a cash sale for a price that is at least the Minimum Price. Section 312.04(h) defines the Minimum Price as a price that is the lower of: (i) the Official Closing Price immediately preceding the signing of the binding agreement; or (ii) the average Official Closing Price for the five trading days immediately preceding the signing of the binding agreement. Section 312.04(i) defines the ‘‘Official Closing Price’’ of an issuer’s common stock as the official closing price on the Exchange as reported to the Consolidated Tape immediately preceding the signing of a binding agreement to issue the securities.3 Certain NYSE listed companies are significantly dependent on their ability to regularly raise additional capital to fund their operations or acquire new assets. For example, pre-revenue stage biotechnology companies regularly seek additional capital to fund their research 3 For example, if the transaction is signed after the close of the regular session at 4:00 p.m. Eastern Standard Time on a Tuesday, then Tuesday’s official closing price is used. If the transaction is signed at any time between the close of the regular session on Monday and the close of the regular session on Tuesday, then Monday’s official closing price is used. VerDate Sep<11>2014 20:21 Oct 03, 2023 Jkt 262001 and development activities and real estate investment trusts seek to fund the acquisition of new properties by selling equity securities in private placements or direct registered sales priced at a small discount to the prevailing market price. It is the Exchange’s understanding that, in many cases, existing shareholders of the listed company are willing purchasers of securities in such circumstances, as they already understand the company’s business and have a positive view of its future prospects. Sales to existing shareholders can also be advantageous to both the issuer and the shareholders because of the speed with which a direct sale to an existing shareholder can be completed if no shareholder approval is required. However, the benefits of low transaction costs and speed of execution that typically exist when conducting these transactions with existing shareholders face countervailing factors if the counterparty is deemed to be a substantial securityholder for purposes of Section 312.03(b)(i). In such cases, to mitigate potential conflicts of interest, Exchange rules require that any sale below the Minimum Price can relate to no more than one per cent of the shares of common stock or one percent of the voting power outstanding before the issuance. Any such transaction that relates to more than one per cent of the common stock is subject to shareholder approval, which imposes significant delay and additional costs on the issuer, thereby often making the sale impracticable. This one percent limitation is therefore a significant restriction on the ability of an NYSE listed company to raise capital from its existing shareholders. Notably, the NYSE is the only listing exchange in the United States that has such a limitation in its rules and NYSE companies are therefore at a disadvantage in raising additional capital when compared to their peers listed on other national securities exchanges. The Exchange believes there are significant benefits from the protection provided to a listed company’s investors by the shareholder approval requirements in Section 312.03(b)(i) when a purchaser of the securities in a transaction is an officer or director or other control person of the company. In such cases, the potential exists for a related party purchaser to use their influence within the company to obtain superior terms from the company to the detriment of the company’s shareholders as a whole. However, the current definition of substantial security holder used in the rule also applies to passive holders of a company’s common PO 00000 Frm 00118 Fmt 4703 Sfmt 4703 stock who have no board or management representation and who may have acquired their position in the company entirely through secondary market trades. The Exchange believes that transactions with these kinds of passive holders do not give rise to the potential conflicts of interest in the determination of transaction terms that exist where the purchaser has a role in the listed company’s board or management. In light of the foregoing, the Exchange proposes to amend Section 312.03(b)(i) to limit its application to related parties whose interest in the company is not passive in nature. As proposed, Section 312.03(b)(i) would be limited in application to sales to a director, officer, controlling shareholder or member of a control group or any other substantial security holder of the company that has an affiliated person who is an officer or director of the company. For purposes of determining the existence of a control group, the Exchange proposes to rely on the filings on Form 13D or 13G disclosing the existence of a group as defined in Exchange Act Rule 13D–5. The Exchange proposes to amend Section 312.04 to include a new definition for purposes of Section 312.03, providing that a ‘‘control group’’ means a group as defined in Exchange Act Rule 13D–5 that controls the listed company. The Exchange notes that any listed company selling securities in a private placement that does not meet the Minimum Price requirement to a passive investor will remain subject to the shareholder approval requirement of Section 312.03(c) if such transaction relates to 20 percent or more of the issuer’s common stock. In addition, any such transaction would remain subject to shareholder approval under Section 312.03(e) if it resulted in a change of control. Finally, the Exchange notes that Section 312.03(b)(i) as proposed to be amended would continue to provide a significant protection to shareholders against conflicts of interest in sales of securities to related parties and that no other listing venue has such a protection in its rules. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,4 in general, and furthers the objectives of Section 6(b)(5) of the Act 5 in particular, in that it is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged 4 15 5 15 E:\FR\FM\04OCN1.SGM U.S.C. 78f(b). U.S.C. 78f(b)(5). 04OCN1 Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 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 proposed amended Section 312.03(b)(i) is consistent with the protection of investors and the public interest. Specifically, the amended rule continues to provide for shareholder approval of below-market sales of securities to related parties of a listed company where a potential conflict of interest exists that related parties could use their influence within the company to obtain superior terms from the company to the detriment of the company’s shareholders as a whole. The proposed rule only modifies the existing rule to permit sales to passive investors with respect to whom the Exchange believes that the potential for such selfdealing does not exist. The Exchange believes that the proposed amendment would promote competition among listing venues by removing a limitation on capital raising by listed companies that does not exist for their peers on other listing exchanges. 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 that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that the proposed amendment increases competition among listing venues by removing a limitation on capital raising by listed companies that does not exist for their peers on other listing exchanges. lotter on DSK11XQN23PROD with NOTICES1 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 Within 45 days of the date of publication of this notice in the Federal Register 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 VerDate Sep<11>2014 20:21 Oct 03, 2023 Jkt 262001 the self-regulatory organization consents, the Commission will: (A) by order approve or disapprove the proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. 68677 submitted on or before October 25, 2023. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Sherry R. Haywood, Assistant Secretary. 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: [FR Doc. 2023–22038 Filed 10–3–23; 8:45 am] 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–2023–34 on the subject line. Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Suspension of and Order Instituting Proceedings To Determine Whether To Approve or Disapprove Proposed Rule Change To Amend Its Fee Schedule Related to Physical Port Fees 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–2023–34. 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 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. All submissions should refer to file number SR–NYSE–2023–34 and should be September 29, 2023. PO 00000 Frm 00119 Fmt 4703 Sfmt 4703 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–98652; File No. SR– CboeEDGA–2023–015] I. Introduction On September 1, 2023, Cboe EDGA Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGA’’) 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 (File Number SR– CboeEDGA–2023–015) to amend its fee schedule to increase the monthly fee for 10 gigabit (‘‘Gb’’) physical ports. The proposed rule change was immediately effective upon filing with the Commission pursuant to Section 19(b)(3)(A) of the Act.3 The proposed rule change was published for comment in the Federal Register on September 20, 2023.4 Pursuant to Section 19(b)(3)(C) of the Act,5 the Commission is hereby: (1) temporarily suspending the proposed rule change; and (2) instituting proceedings to determine whether to approve or disapprove the proposed rule change. II. Background and Description of the Proposed Rule Change The Exchange proposes to amend its fee schedule. The Exchange proposes to increase the monthly fee for 10 Gb 6 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). A proposed rule change may take effect upon filing with the Commission if it is designated by the exchange as ‘‘establishing or changing a due, fee, or other charge imposed by the self-regulatory organization on any person, whether or not the person is a member of the self-regulatory organization.’’ 15 U.S.C. 78s(b)(3)(A)(ii). 4 See Securities Exchange Act Release No. 98394 (September 14, 2023), 88 FR 64947 (‘‘Notice’’). 5 15 U.S.C. 78s(b)(3)(C). 1 15 E:\FR\FM\04OCN1.SGM 04OCN1

Agencies

[Federal Register Volume 88, Number 191 (Wednesday, October 4, 2023)]
[Notices]
[Pages 68675-68677]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-22038]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98662; File No. SR-NYSE-2023-34]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change To Amend Section 312.03(b) of 
the NYSE Listed Company Manual To Modify the Circumstances Under Which 
a Listed Company Must Obtain Shareholder Approval of a Sale of 
Securities Below the Minimum Price to a Substantial Security Holder of 
the Company

September 29, 2023.
    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 September 26, 2023, New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 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 312.03(b) of the NYSE Listed 
Company Manual (``Manual'') to modify the circumstances under which a 
listed company must obtain shareholder approval of a sale of securities 
to a substantial security holder of the listed company. The text of the 
proposed rule change is set forth in Exhibit 5 attached [sic] hereto. 
The proposed rule change is available on the Exchange's website at 
www.nyse.com, at the principal office of the Exchange, and at the 
Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below,

[[Page 68676]]

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 312.04(e) of the Manual provides that an interest 
consisting of less than either five percent of the number of shares of 
common stock or five percent of the voting power outstanding of a 
company or entity shall not be considered a substantial interest or 
cause the holder of such an interest to be regarded as a substantial 
security holder.
    Section 312.03(b)(i) of the Manual provides that shareholder 
approval is required prior to the issuance of common stock, or of 
securities convertible into or exercisable for common stock, in any 
transaction or series of related transactions, to a director, officer 
or substantial security holder of the company if the number of shares 
of common stock to be issued, or if the number of shares of common 
stock into which the securities may be convertible or exercisable, 
exceeds either one percent of the number of shares of common stock or 
one percent of the voting power outstanding before the issuance.
    The Manual provides an exception to the shareholder approval 
requirement if such transaction is a cash sale for a price that is at 
least the Minimum Price. Section 312.04(h) defines the Minimum Price as 
a price that is the lower of: (i) the Official Closing Price 
immediately preceding the signing of the binding agreement; or (ii) the 
average Official Closing Price for the five trading days immediately 
preceding the signing of the binding agreement. Section 312.04(i) 
defines the ``Official Closing Price'' of an issuer's common stock as 
the official closing price on the Exchange as reported to the 
Consolidated Tape immediately preceding the signing of a binding 
agreement to issue the securities.\3\
---------------------------------------------------------------------------

    \3\ For example, if the transaction is signed after the close of 
the regular session at 4:00 p.m. Eastern Standard Time on a Tuesday, 
then Tuesday's official closing price is used. If the transaction is 
signed at any time between the close of the regular session on 
Monday and the close of the regular session on Tuesday, then 
Monday's official closing price is used.
---------------------------------------------------------------------------

    Certain NYSE listed companies are significantly dependent on their 
ability to regularly raise additional capital to fund their operations 
or acquire new assets. For example, pre-revenue stage biotechnology 
companies regularly seek additional capital to fund their research and 
development activities and real estate investment trusts seek to fund 
the acquisition of new properties by selling equity securities in 
private placements or direct registered sales priced at a small 
discount to the prevailing market price. It is the Exchange's 
understanding that, in many cases, existing shareholders of the listed 
company are willing purchasers of securities in such circumstances, as 
they already understand the company's business and have a positive view 
of its future prospects. Sales to existing shareholders can also be 
advantageous to both the issuer and the shareholders because of the 
speed with which a direct sale to an existing shareholder can be 
completed if no shareholder approval is required. However, the benefits 
of low transaction costs and speed of execution that typically exist 
when conducting these transactions with existing shareholders face 
countervailing factors if the counterparty is deemed to be a 
substantial securityholder for purposes of Section 312.03(b)(i). In 
such cases, to mitigate potential conflicts of interest, Exchange rules 
require that any sale below the Minimum Price can relate to no more 
than one per cent of the shares of common stock or one percent of the 
voting power outstanding before the issuance. Any such transaction that 
relates to more than one per cent of the common stock is subject to 
shareholder approval, which imposes significant delay and additional 
costs on the issuer, thereby often making the sale impracticable. This 
one percent limitation is therefore a significant restriction on the 
ability of an NYSE listed company to raise capital from its existing 
shareholders. Notably, the NYSE is the only listing exchange in the 
United States that has such a limitation in its rules and NYSE 
companies are therefore at a disadvantage in raising additional capital 
when compared to their peers listed on other national securities 
exchanges.
    The Exchange believes there are significant benefits from the 
protection provided to a listed company's investors by the shareholder 
approval requirements in Section 312.03(b)(i) when a purchaser of the 
securities in a transaction is an officer or director or other control 
person of the company. In such cases, the potential exists for a 
related party purchaser to use their influence within the company to 
obtain superior terms from the company to the detriment of the 
company's shareholders as a whole. However, the current definition of 
substantial security holder used in the rule also applies to passive 
holders of a company's common stock who have no board or management 
representation and who may have acquired their position in the company 
entirely through secondary market trades. The Exchange believes that 
transactions with these kinds of passive holders do not give rise to 
the potential conflicts of interest in the determination of transaction 
terms that exist where the purchaser has a role in the listed company's 
board or management.
    In light of the foregoing, the Exchange proposes to amend Section 
312.03(b)(i) to limit its application to related parties whose interest 
in the company is not passive in nature. As proposed, Section 
312.03(b)(i) would be limited in application to sales to a director, 
officer, controlling shareholder or member of a control group or any 
other substantial security holder of the company that has an affiliated 
person who is an officer or director of the company. For purposes of 
determining the existence of a control group, the Exchange proposes to 
rely on the filings on Form 13D or 13G disclosing the existence of a 
group as defined in Exchange Act Rule 13D-5. The Exchange proposes to 
amend Section 312.04 to include a new definition for purposes of 
Section 312.03, providing that a ``control group'' means a group as 
defined in Exchange Act Rule 13D-5 that controls the listed company.
    The Exchange notes that any listed company selling securities in a 
private placement that does not meet the Minimum Price requirement to a 
passive investor will remain subject to the shareholder approval 
requirement of Section 312.03(c) if such transaction relates to 20 
percent or more of the issuer's common stock. In addition, any such 
transaction would remain subject to shareholder approval under Section 
312.03(e) if it resulted in a change of control. Finally, the Exchange 
notes that Section 312.03(b)(i) as proposed to be amended would 
continue to provide a significant protection to shareholders against 
conflicts of interest in sales of securities to related parties and 
that no other listing venue has such a protection in its rules.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\4\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act \5\ in particular, in that it 
is designed to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged

[[Page 68677]]

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 
proposed amended Section 312.03(b)(i) is consistent with the protection 
of investors and the public interest. Specifically, the amended rule 
continues to provide for shareholder approval of below-market sales of 
securities to related parties of a listed company where a potential 
conflict of interest exists that related parties could use their 
influence within the company to obtain superior terms from the company 
to the detriment of the company's shareholders as a whole. The proposed 
rule only modifies the existing rule to permit sales to passive 
investors with respect to whom the Exchange believes that the potential 
for such self-dealing does not exist. The Exchange believes that the 
proposed amendment would promote competition among listing venues by 
removing a limitation on capital raising by listed companies that does 
not exist for their peers on other listing exchanges.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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 that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange believes that 
the proposed amendment increases competition among listing venues by 
removing a limitation on capital raising by listed companies that does 
not exist for their peers on other listing exchanges.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register 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 will:
    (A) by order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-NYSE-2023-34 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-2023-34. 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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-NYSE-2023-34 and should be 
submitted on or before October 25, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-22038 Filed 10-3-23; 8:45 am]
BILLING CODE 8011-01-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.