Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Dealings and Settlements, Rule 235, and Rule 236, Sections 204.12, 703.02, and 703.03 of the Listed Company Manual, 24062-24064 [2024-07219]
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Federal Register / Vol. 89, No. 67 / Friday, April 5, 2024 / Notices
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–CboeBZX–2024–023 and should be
submitted on or before April 26, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024–07217 Filed 4–4–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99871; File No. SR–NYSE–
2024–19]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
Dealings and Settlements, Rule 235,
and Rule 236, Sections 204.12, 703.02,
and 703.03 of the Listed Company
Manual
April 1, 2024.
khammond on DSKJM1Z7X2PROD with NOTICES
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 25,
2024, 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 and II 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
Dealings and Settlements, Rule 235, and
Rule 236, as well as Sections 204.12,
703.02 (part 2), and 703.03 of the Listed
Company Manual, to conform to
amendments to Rule 15c6–1(a) of the
Act to shorten the standard settlement
18 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
16:44 Apr 04, 2024
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
On March 6, 2023, the Commission
adopted amendments to Rule 15c6–1(a)
of the Act to shorten the standard
settlement cycle for most broker-dealer
transactions from T+2 to T+1.3
Accordingly, the Exchange proposes to
amend the rules identified below to
conform with the amendments to Rule
15c6–1(a) and reflect a standard
settlement cycle of T+1:
• Dealings and Settlements
• Rule 235 (Ex-Dividend, Ex-Rights)
• Rule 236 (Ex-Warrants)
• Section 204.12 of the Listed Company
Manual (Dividends and Stock
Distributions)
• Section 703.02 (part 2) of the Listed
Company Manual (Stock Split/Stock
Rights/Stock Dividend Listing
Process)
• Section 703.03 of the Listed Company
Manual (Short Term Rights Offerings
Relating to Listed Securities Listing
Process)
Proposed Rule Change
The Exchange proposes the following
changes to reflect a T+1 settlement
cycle.
• Under Dealings and Settlements,
Delivery Dates on Exchange Contracts
currently provides that a ‘‘Regular Way’’
contract for sale of securities is due on
3 See Securities Exchange Act Release No. 96930,
88 FR 13872 (March 6, 2023) (‘‘T+1 Adopting
Release’’).
1 15
VerDate Sep<11>2014
cycle for most broker-dealer transactions
from two business days after the trade
date (‘‘T+2’’) to one business day after
the trade date (‘‘T+1’’). 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.
Jkt 262001
PO 00000
Frm 00102
Fmt 4703
Sfmt 4703
the second business day following the
day of the contract. The Exchange
proposes to delete the word ‘‘second’’
from this rule to reflect settlement on
T+1, rather than T+2.4
• Current Rule 235 provides that
transactions in stocks shall be exdividend or ex-rights on the business
day preceding the record date fixed by
the corporation or the date of the closing
of transfer books. The Exchange
proposes to delete the phrase ‘‘the
business day preceding,’’ such that the
rule would provide that these
transactions would be ex-dividend or
ex-rights on the record date. The current
rule further provides that if the record
date or closing of transfer books occurs
upon a day other than a business day,
Rule 235 shall apply for the second
preceding business day. The Exchange
proposes to delete the word ‘‘second’’
from this portion of the rule to conform
to a T+1 settlement cycle.5
• Current Rule 236 provides that exwarrant trading will begin on the
business day preceding the date of
expiration of the warrants, expect that
when expiration occurs on a nonbusiness day, it will begin on the second
business day preceding expiration. To
conform with a T+1 settlement cycle,
the Exchange proposes to delete the
phrase ‘‘the business day preceding,’’
such that the rule would provide that
these transactions would be ex-warrants
on the date of expiration, and the word
‘‘second,’’ such that the rule would
provide for expiration on the business
day preceding expiration when
expiration occurs on a non-business
day.
• Current Section 204.12 of the Listed
Company Manual (Dividends and Stock
Distributions) requires the Exchange to
arrange for and give advance notice of
changes in dealings in the stock to an
‘‘ex-dividend’’ basis, which is generally
4 The Exchange further proposes to modify the
table that appears under Delivery Dates on
Exchange Contracts to delete the rows describing
‘‘Cash’’ delivery and ‘‘Seller’s Option’’ delivery, as
the Exchange discontinued non-regular way
settlement in 2017 and such options are no longer
offered. See Securities Exchange Act Release No.
81176 (July 20, 2017), 82 FR 34728 (July 26, 2017)
(SR–NYSE–2017–33) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change
To Eliminate Non-Regular Way Trading on the
Exchange).
5 The Exchange further proposes to delete the
parenthetical sentence at the end of Rule 235 as
obsolete, given that Rule 118 has been deleted from
the Exchange’s rulebook. See Securities Exchange
Act Release No. 76649 (December 15, 2015), 80 FR
79365 (December 21, 2015) (SR–NYSE–2015–60)
(Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Rule 13 To
Eliminate Good til Cancelled (‘‘GTC’’) Orders and
Stop Orders, and Make Conforming Changes to
Rules 49, 61, 70, 104, 109, 115A, 116, 118, 123,
123A, 123C, 123D, 1000, 1004 and 6140).
E:\FR\FM\05APN1.SGM
05APN1
Federal Register / Vol. 89, No. 67 / Friday, April 5, 2024 / Notices
khammond on DSKJM1Z7X2PROD with NOTICES
two business days prior to the record
date. The Exchange proposes to amend
Section 204.12 to provide that an ‘‘exdividend’’ basis would generally be on
the record date to reflect a T+1
settlement cycle.
• Current Section 703.02 (part 2) of
the Listed Company Manual (Stock
Split/Stock Rights/Stock Dividend
Listing Process) provides that a
distribution of less than 25% of a
company’s common stock is traded ‘‘ex’’
on and after the business day prior to
the record date based on the Exchange’s
two-day delivery rule, pursuant to
which contracts made on the Exchange
for the purchase and sale of securities
are generally settled by delivery on the
second business day after the contract is
made. Given the change to a T+1
settlement cycle, the Exchange proposes
to amend the first sentence of Section
703.02 (part 2) to reflect that a
distribution of less than 25% of a
company’s common stock is traded ‘‘ex’’
on the record date. The Exchange also
proposes to amend the second sentence
of Section 703.02 (part 2) to instead
refer to the Exchange’s one-day delivery
rule pursuant to which contracts made
on the Exchange for the purchase and
sale of securities are settled by delivery
on the business day after the contract is
made. Finally, the Exchange proposes to
amend the table in Section 703.02 (part
2) setting forth a schedule of record
dates and corresponding normal exdividend dates to reflect a shortened
T+1 settlement cycle.6
• Current Section 703.03 of the Listed
Company Manual (Short Term Rights
Offerings Relating to Listed Securities
Listing Process) provides that
registration under the Securities Act of
1933 of securities to be offered should
become effective at least six business
days prior to the record date so that a
listed security may trade ex-rights in a
normal fashion on the second business
day prior to the record date. The
Exchange proposes to amend Section
703.03 to provide that registration of
listed securities should become effective
at least six business days prior to the
record date in order for such securities
to be traded ex-rights on the record date.
6 The Exchange also proposes to add Juneteenth
National Independence Day (June 19) to the list of
holidays affecting ex-dividend dates set forth in
Section 703.02 (part 2). This proposed change
would ensure that Section 703.02 is consistent with
NYSE Rule 7.2, which sets forth the holidays on
which the Exchange is not open for business and
was amended in 2021 to include Juneteenth
National Independence Day. See Securities
Exchange Act Release No. 93183 (September 30,
2021), 86 FR 55068 (October 5, 2021) (SR–NYSE–
2021–56) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change To Amend
NYSE Rule 7.2).
VerDate Sep<11>2014
16:44 Apr 04, 2024
Jkt 262001
Implementation
The Exchange proposes that the
operative date of this proposed rule
change will be Tuesday, May 28, 2024,
which is the compliance date specified
in the T+1 Adopting Release, or such
later date as may be announced by the
Commission for compliance with the
amendments to Rule 15c6–1(a) set forth
in the T+1 Adopting Release.7 With the
implementation of the T+1 settlement
cycle and as described in the proposed
changes outlined above, the ex-dividend
date for ‘‘normal’’ distributions will be
the same business day as the record
date. Accordingly, the Exchange
proposes that Wednesday, May 29, 2024
would be the first date to which the
proposed rules described herein would
apply (i.e., the first record date to which
the new ex-dividend date rationale will
be applied). During the implementation
of the T+1 settlement cycle, the
Exchange proposes that the ex-dividend
dates will be as follows:
Record date
Ex-dividend date
May 24, 2024 ....................
May 28, 2024 ....................
May 29, 2024 ....................
May 23, 2024.
May 24, 2024.
May 29, 2024.
A record date of Friday, May 24, 2024
would be a date prior to the effective
date of the amendments to Rule 15c6–
1(a) of the Act to shorten the standard
settlement cycle for most broker-dealer
transactions from T+2 to T+1.8 The
rules described above would apply to
this record date in their current form
and, thus, the ‘‘ex-dividend date’’ would
be the first business day preceding the
record date or Thursday, May 23, 2024.
Monday, May 27, 2024 is Memorial Day,
which is an Exchange holiday;
accordingly, there would be no record
date on a holiday. A record date of
Tuesday, May 28, 2024 would also fall
under the Exchange’s current rules, and
the first business day preceding such
record date would be Friday, May 24,
2024. On Wednesday, May 29, 2024, the
proposed rules described above would
apply, such that, for the record date of
May 29, 2024, the ‘‘ex-dividend date’’
would be the same business day.
The Exchange will issue a Trader
Notice regarding the implementation of
the proposed rule change and T+1
settlement cycle, which date would
correspond with the industry-led
transition to a T+1 standard settlement,
and the compliance date of the
Commission’s amendment of Rule
15c6–1(a) of the Act to require standard
settlement no later than T+1.
7 See
8 See
PO 00000
note 3, supra.
note 3, supra.
Frm 00103
Fmt 4703
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,9 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,10 in particular, because it is
designed to prevent fraudulent and
manipulative acts and practices,
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 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.
In particular, the proposed rule
change would amend the Exchange’s
rules to reflect a standard settlement
cycle of T+1, in support of the industryled initiative to shorten the settlement
cycle to one business day. Moreover, the
proposed rule change is consistent with
the Commission’s amendments to Rule
15c6–1(a) of the Act to require standard
settlement no later than T+1. The
Exchange believes that the proposed
rule change would provide regulatory
certainty to facilitate the industry-led
move to a T+1 settlement cycle. The
Exchange further believes that, by
shortening the time period for
settlement of most securities
transactions, the proposed rule change
would protect investors and the public
interest by reducing the number of
unsettled trades in the clearance and
settlement system at any given time,
thereby reducing the risk inherent in
settling securities transactions to
clearing corporations, their members,
and public investors.
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
proposed change is not designed to
address any competitive issue, but
rather to support the industry’s
transition to a T+1 regular-way
settlement cycle in conformity with the
Commission’s amendment of Rule
15c6–1(a). The proposed change amends
the Exchange’s rules pertaining to
securities settlement, which rules would
apply uniformly to all contracts for the
purchase or sale of a security (other than
exempted securities) that provide for
payment of funds and delivery of
securities that occur on the Exchange or
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
10 15
Sfmt 4703
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Federal Register / Vol. 89, No. 67 / Friday, April 5, 2024 / Notices
other self-regulatory organizations, and
is intended to facilitate the industrywide transition to a T+1 settlement
cycle. The Exchange also believes that
the proposed rule change will serve to
promote clarity and consistency in its
rules, thereby reducing burdens on the
marketplace and facilitating investor
protection. Accordingly, the Exchange
believes that the proposed changes do
not impose any burden on competition
other than that necessary to implement
the amendments to Rule 15c6–1(a) of
the Act as set forth in the T+1 Adopting
Release.11
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
Because the foregoing proposed rule
change does not:
(i) significantly affect the protection of
investors or the public interest;
(ii) impose any significant burden on
competition; and
(iii) become operative for 30 days
from the date on which it was filed, or
such shorter time as the Commission
may designate, it has become effective
pursuant to Section 19(b)(3)(A) of the
Act and Rule 19b–4(f)(6) thereunder.
At any time within 60 days of the
filing of the 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.
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:
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–2024–19. 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–2024–19 and should be
submitted on or before April 26, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024–07219 Filed 4–4–24; 8:45 am]
BILLING CODE 8011–01–P
khammond on DSKJM1Z7X2PROD with 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–2024–19 on the subject line.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99873; File No. SR–
NYSENAT–2024–12]
Self-Regulatory Organizations; NYSE
National, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Rule 7.4
April 1, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 25,
2024, NYSE National, Inc. (‘‘NYSE
National’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II 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
Rule 7.4 (Ex-Dividend or Ex-Right
Dates) to conform to amendments to
Rule 15c6–1(a) of the Act to shorten the
standard settlement cycle for most
broker-dealer transactions from two
business days after the trade date
(‘‘T+2’’) to one business day after the
trade date (‘‘T+1’’). The proposed rule
change is available on the Exchange’s
website at www.nyse.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
1 15
11 See
note 3, supra.
VerDate Sep<11>2014
16:44 Apr 04, 2024
12 17
Jkt 262001
PO 00000
CFR 200.30–3(a)(12).
Frm 00104
Fmt 4703
Sfmt 4703
2 17
E:\FR\FM\05APN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
05APN1
]]>Agencies
[Federal Register Volume 89, Number 67 (Friday, April 5, 2024)]
[Notices]
[Pages 24062-24064]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-07219]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99871; File No. SR-NYSE-2024-19]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Dealings and Settlements, Rule 235, and Rule 236, Sections
204.12, 703.02, and 703.03 of the Listed Company Manual
April 1, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on March 25, 2024, 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 and II
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 Dealings and Settlements, Rule 235,
and Rule 236, as well as Sections 204.12, 703.02 (part 2), and 703.03
of the Listed Company Manual, to conform to amendments to Rule 15c6-
1(a) of the Act to shorten the standard settlement cycle for most
broker-dealer transactions from two business days after the trade date
(``T+2'') to one business day after the trade date (``T+1''). The
proposed rule change is available on the Exchange's website at
www.nyse.com, at the principal office of the Exchange, and at the
Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
On March 6, 2023, the Commission adopted amendments to Rule 15c6-
1(a) of the Act to shorten the standard settlement cycle for most
broker-dealer transactions from T+2 to T+1.\3\ Accordingly, the
Exchange proposes to amend the rules identified below to conform with
the amendments to Rule 15c6-1(a) and reflect a standard settlement
cycle of T+1:
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 96930, 88 FR 13872
(March 6, 2023) (``T+1 Adopting Release'').
Dealings and Settlements
Rule 235 (Ex-Dividend, Ex-Rights)
Rule 236 (Ex-Warrants)
Section 204.12 of the Listed Company Manual (Dividends and
Stock Distributions)
Section 703.02 (part 2) of the Listed Company Manual (Stock
Split/Stock Rights/Stock Dividend Listing Process)
Section 703.03 of the Listed Company Manual (Short Term Rights
Offerings Relating to Listed Securities Listing Process)
Proposed Rule Change
The Exchange proposes the following changes to reflect a T+1
settlement cycle.
Under Dealings and Settlements, Delivery Dates on Exchange
Contracts currently provides that a ``Regular Way'' contract for sale
of securities is due on the second business day following the day of
the contract. The Exchange proposes to delete the word ``second'' from
this rule to reflect settlement on T+1, rather than T+2.\4\
---------------------------------------------------------------------------
\4\ The Exchange further proposes to modify the table that
appears under Delivery Dates on Exchange Contracts to delete the
rows describing ``Cash'' delivery and ``Seller's Option'' delivery,
as the Exchange discontinued non-regular way settlement in 2017 and
such options are no longer offered. See Securities Exchange Act
Release No. 81176 (July 20, 2017), 82 FR 34728 (July 26, 2017) (SR-
NYSE-2017-33) (Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To Eliminate Non-Regular Way Trading on the
Exchange).
---------------------------------------------------------------------------
Current Rule 235 provides that transactions in stocks
shall be ex-dividend or ex-rights on the business day preceding the
record date fixed by the corporation or the date of the closing of
transfer books. The Exchange proposes to delete the phrase ``the
business day preceding,'' such that the rule would provide that these
transactions would be ex-dividend or ex-rights on the record date. The
current rule further provides that if the record date or closing of
transfer books occurs upon a day other than a business day, Rule 235
shall apply for the second preceding business day. The Exchange
proposes to delete the word ``second'' from this portion of the rule to
conform to a T+1 settlement cycle.\5\
---------------------------------------------------------------------------
\5\ The Exchange further proposes to delete the parenthetical
sentence at the end of Rule 235 as obsolete, given that Rule 118 has
been deleted from the Exchange's rulebook. See Securities Exchange
Act Release No. 76649 (December 15, 2015), 80 FR 79365 (December 21,
2015) (SR-NYSE-2015-60) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change To Amend Rule 13 To Eliminate
Good til Cancelled (``GTC'') Orders and Stop Orders, and Make
Conforming Changes to Rules 49, 61, 70, 104, 109, 115A, 116, 118,
123, 123A, 123C, 123D, 1000, 1004 and 6140).
---------------------------------------------------------------------------
Current Rule 236 provides that ex-warrant trading will
begin on the business day preceding the date of expiration of the
warrants, expect that when expiration occurs on a non-business day, it
will begin on the second business day preceding expiration. To conform
with a T+1 settlement cycle, the Exchange proposes to delete the phrase
``the business day preceding,'' such that the rule would provide that
these transactions would be ex-warrants on the date of expiration, and
the word ``second,'' such that the rule would provide for expiration on
the business day preceding expiration when expiration occurs on a non-
business day.
Current Section 204.12 of the Listed Company Manual
(Dividends and Stock Distributions) requires the Exchange to arrange
for and give advance notice of changes in dealings in the stock to an
``ex-dividend'' basis, which is generally
[[Page 24063]]
two business days prior to the record date. The Exchange proposes to
amend Section 204.12 to provide that an ``ex-dividend'' basis would
generally be on the record date to reflect a T+1 settlement cycle.
Current Section 703.02 (part 2) of the Listed Company
Manual (Stock Split/Stock Rights/Stock Dividend Listing Process)
provides that a distribution of less than 25% of a company's common
stock is traded ``ex'' on and after the business day prior to the
record date based on the Exchange's two-day delivery rule, pursuant to
which contracts made on the Exchange for the purchase and sale of
securities are generally settled by delivery on the second business day
after the contract is made. Given the change to a T+1 settlement cycle,
the Exchange proposes to amend the first sentence of Section 703.02
(part 2) to reflect that a distribution of less than 25% of a company's
common stock is traded ``ex'' on the record date. The Exchange also
proposes to amend the second sentence of Section 703.02 (part 2) to
instead refer to the Exchange's one-day delivery rule pursuant to which
contracts made on the Exchange for the purchase and sale of securities
are settled by delivery on the business day after the contract is made.
Finally, the Exchange proposes to amend the table in Section 703.02
(part 2) setting forth a schedule of record dates and corresponding
normal ex-dividend dates to reflect a shortened T+1 settlement
cycle.\6\
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\6\ The Exchange also proposes to add Juneteenth National
Independence Day (June 19) to the list of holidays affecting ex-
dividend dates set forth in Section 703.02 (part 2). This proposed
change would ensure that Section 703.02 is consistent with NYSE Rule
7.2, which sets forth the holidays on which the Exchange is not open
for business and was amended in 2021 to include Juneteenth National
Independence Day. See Securities Exchange Act Release No. 93183
(September 30, 2021), 86 FR 55068 (October 5, 2021) (SR-NYSE-2021-
56) (Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Amend NYSE Rule 7.2).
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Current Section 703.03 of the Listed Company Manual (Short
Term Rights Offerings Relating to Listed Securities Listing Process)
provides that registration under the Securities Act of 1933 of
securities to be offered should become effective at least six business
days prior to the record date so that a listed security may trade ex-
rights in a normal fashion on the second business day prior to the
record date. The Exchange proposes to amend Section 703.03 to provide
that registration of listed securities should become effective at least
six business days prior to the record date in order for such securities
to be traded ex-rights on the record date.
Implementation
The Exchange proposes that the operative date of this proposed rule
change will be Tuesday, May 28, 2024, which is the compliance date
specified in the T+1 Adopting Release, or such later date as may be
announced by the Commission for compliance with the amendments to Rule
15c6-1(a) set forth in the T+1 Adopting Release.\7\ With the
implementation of the T+1 settlement cycle and as described in the
proposed changes outlined above, the ex-dividend date for ``normal''
distributions will be the same business day as the record date.
Accordingly, the Exchange proposes that Wednesday, May 29, 2024 would
be the first date to which the proposed rules described herein would
apply (i.e., the first record date to which the new ex-dividend date
rationale will be applied). During the implementation of the T+1
settlement cycle, the Exchange proposes that the ex-dividend dates will
be as follows:
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\7\ See note 3, supra.
------------------------------------------------------------------------
Record date Ex-dividend date
------------------------------------------------------------------------
May 24, 2024.............................. May 23, 2024.
May 28, 2024.............................. May 24, 2024.
May 29, 2024.............................. May 29, 2024.
------------------------------------------------------------------------
A record date of Friday, May 24, 2024 would be a date prior to the
effective date of the amendments to Rule 15c6-1(a) of the Act to
shorten the standard settlement cycle for most broker-dealer
transactions from T+2 to T+1.\8\ The rules described above would apply
to this record date in their current form and, thus, the ``ex-dividend
date'' would be the first business day preceding the record date or
Thursday, May 23, 2024. Monday, May 27, 2024 is Memorial Day, which is
an Exchange holiday; accordingly, there would be no record date on a
holiday. A record date of Tuesday, May 28, 2024 would also fall under
the Exchange's current rules, and the first business day preceding such
record date would be Friday, May 24, 2024. On Wednesday, May 29, 2024,
the proposed rules described above would apply, such that, for the
record date of May 29, 2024, the ``ex-dividend date'' would be the same
business day.
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\8\ See note 3, supra.
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The Exchange will issue a Trader Notice regarding the
implementation of the proposed rule change and T+1 settlement cycle,
which date would correspond with the industry-led transition to a T+1
standard settlement, and the compliance date of the Commission's
amendment of Rule 15c6-1(a) of the Act to require standard settlement
no later than T+1.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\9\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\10\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
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 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.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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In particular, the proposed rule change would amend the Exchange's
rules to reflect a standard settlement cycle of T+1, in support of the
industry-led initiative to shorten the settlement cycle to one business
day. Moreover, the proposed rule change is consistent with the
Commission's amendments to Rule 15c6-1(a) of the Act to require
standard settlement no later than T+1. The Exchange believes that the
proposed rule change would provide regulatory certainty to facilitate
the industry-led move to a T+1 settlement cycle. The Exchange further
believes that, by shortening the time period for settlement of most
securities transactions, the proposed rule change would protect
investors and the public interest by reducing the number of unsettled
trades in the clearance and settlement system at any given time,
thereby reducing the risk inherent in settling securities transactions
to clearing corporations, their members, and public investors.
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 proposed change is not
designed to address any competitive issue, but rather to support the
industry's transition to a T+1 regular-way settlement cycle in
conformity with the Commission's amendment of Rule 15c6-1(a). The
proposed change amends the Exchange's rules pertaining to securities
settlement, which rules would apply uniformly to all contracts for the
purchase or sale of a security (other than exempted securities) that
provide for payment of funds and delivery of securities that occur on
the Exchange or
[[Page 24064]]
other self-regulatory organizations, and is intended to facilitate the
industry-wide transition to a T+1 settlement cycle. The Exchange also
believes that the proposed rule change will serve to promote clarity
and consistency in its rules, thereby reducing burdens on the
marketplace and facilitating investor protection. Accordingly, the
Exchange believes that the proposed changes do not impose any burden on
competition other than that necessary to implement the amendments to
Rule 15c6-1(a) of the Act as set forth in the T+1 Adopting Release.\11\
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\11\ See note 3, supra.
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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
Because the foregoing proposed rule change does not:
(i) significantly affect the protection of investors or the public
interest;
(ii) impose any significant burden on competition; and
(iii) become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) of the Act and Rule
19b-4(f)(6) thereunder.
At any time within 60 days of the filing of the 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.
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-2024-19 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-2024-19. 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-2024-19 and should be
submitted on or before April 26, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-07219 Filed 4-4-24; 8:45 am]
BILLING CODE 8011-01-P
