Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, To Amend Section 802.01D of the NYSE Listed Company Manual Concerning the Suspension and Delisting of a Listed Company That Has Changed its Primary Business Focus, 31783-31785 [2024-08802]
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Federal Register / Vol. 89, No. 81 / Thursday, April 25, 2024 / Notices
certificate of service. Pursuant to rule 0–
5 under the Act, hearing requests should
state the nature of the writer’s interest,
any facts bearing upon the desirability
of a hearing on the matter, the reason for
the request, and the issues contested.
Persons who wish to be notified of a
hearing may request notification by
emailing the Commission’s Secretary at
Secretarys-Office@sec.gov.
The Commission:
Secretarys-Office@sec.gov. Applicants:
Wendy Ruberti, General Counsel, Sound
Point Capital Management, LP, 375 Park
Avenue, 33rd Floor, New York, NY
10152 with copies to Harry S. Pangas
and Philip T. Hinkle, Dechert LLP, 1900
K Street NW, Washington, DC 20006–
1110.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
Laura J. Riegel, Senior Counsel, or Lisa
Reid Ragen, Branch Chief, at (202) 551–
6825 (Division of Investment
Management, Chief Counsel’s Office).
For
Applicants’ representations, legal
analysis, and conditions, please refer to
Applicants’ fourth amended and
restated application, dated April 15,
2024, which may be obtained via the
Commission’s website by searching for
the file number at the top of this
document, or for an Applicant using the
Company name search field, on the
SEC’s EDGAR system.
The SEC’s EDGAR system may be
searched at https://www.sec.gov/edgar/
searchedgar/legacy/
companysearch.html. You may also call
the SEC’s Public Reference Room at
(202) 551–8090.
SUPPLEMENTARY INFORMATION:
For the Commission, by the Division of
Investment Management, under delegated
authority.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–08796 Filed 4–24–24; 8:45 am]
lotter on DSK11XQN23PROD with NOTICES1
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99992; File No. SR–NYSE–
2024–21]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Proposed Rule Change, as
Modified by Amendment No. 1, To
Amend Section 802.01D of the NYSE
Listed Company Manual Concerning
the Suspension and Delisting of a
Listed Company That Has Changed its
Primary Business Focus
April 19, 2024.
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 April 4,
2024, 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 and II below, which Items have
been prepared by the Exchange. On
April 17, 2024, the Exchange filed
Amendment No. 1, which supersedes
the original filing in its entirety. The
Commission is publishing this notice to
solicit comments on the proposed rule
change, as modified by Amendment No.
1, 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 802.01D of the NYSE Listed
Company Manual (‘‘Manual’’) to
provide the Exchange with discretion to
commence suspension and delisting
proceedings with respect to a listed
company that has changed its primary
business focus to a new area of business
that it was not engaged in at the time of
its original listing, or which was
immaterial to its operations at the time
of its original listing. The text of the
proposed rule change is set forth in
Exhibit 5. This Amendment No. 1 to
SR–NYSE–2024–21 replaces SR–NYSE–
2024–21 as originally filed and
supersedes such filing in its entirety.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.
1 15
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
4 See note 5 infra.
2 15
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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
This Amendment No. 1 to SR–NYSE–
2024–21 replaces SR–NYSE–2024–21 as
originally filed and supersedes such
filing in its entirety.5 Amendment No.1
amends the original filing to: (i) insert
a new sentence in the proposed new
paragraph in Section 802.01D stating
that the Exchange would focus its
analysis of a company’s suitability for
continued listing after a change in
operations on whether it would have
accepted the listed company for initial
listing if it had been engaged in its
modified business at the time of original
listing; (ii) amend the lead-in language
to Section 802.01D and the description
in the Purpose section of the filing to
include a parenthetical that specifies
that, instead of applying the procedures
outlined in Sections 802.02 and 802.03,
the Exchange will instead commence
immediate suspension and delisting
procedures if the individual paragraph
of Section 802.01D so specifies; (iii)
insert a sentence in the Purpose section
noting that the Exchange’s analysis of a
company’s change in business
operations will focus on the qualitative
aspects of the company’s suitability for
listing and will not entail an application
of the quantitative standards for initial
listing; (iv) amend the proposed new
paragraph of Section 802.01D under the
heading ‘‘Change in Primary Business
Focus’’ to clarify that the proposed
paragraph will apply only where the
company has changed its primary
business focus to a new area of business
that is ‘‘substantially different’’ from the
business it was engaged in at the time
of its original listing or, as provided in
the original filing, which was
immaterial to its operations at the time
of its original listing; (v) clarify that any
5 See
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Federal Register / Vol. 89, No. 81 / Thursday, April 25, 2024 / Notices
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suspension and delisting resulting from
a change in operations will be
undertaken in accordance with the
procedures set out in Section 804.00 of
the Manual; and (vi) make conforming
changes to the Statutory Basis section.
It has been the Exchange’s experience
that listed companies occasionally
change the focus of their operations
from the business they were engaged in
at the time of initial listing to a business
line that is completely unrelated or that
was not material at the time of its
original listing. The Exchange is
concerned that, in such circumstances,
investors who acquired the company’s
stock prior to this change in operations
(including, in many cases, in connection
with the company’s initial public
offering) may have made their
investment decision based on the
company’s disclosure about its original
business and might not have made their
investment if they had been aware of
how the company would change. In
addition, a wholesale change in
business operations may give rise to a
concern about the suitability for listing
of the company had it been in engaged
in that line of business at the time of its
application for listing. The Exchange
notes that, in some circumstances, there
has been significant downward price
movement subsequent to such a change
in business focus, which resulted in
significant investor losses and an
inability to meet exchange continued
listing standards.6
In light of the foregoing, the Exchange
proposes to amend Section 802.01D of
the Manual (‘‘Other Criteria’’) to include
a new paragraph (‘‘Change in Primary
Business Focus’’) providing that the
Exchange may in its sole discretion
subject a listed company to immediate
suspension and delisting in accordance
with the procedures set forth in Section
804.00 of the Manual if that listed
company has changed its primary
business focus to a new area of business
that it was not engaged in at the time of
its original listing or which was
immaterial to its operations at the time
of its original listing. If the Exchange
becomes aware of such a change in the
company’s primary business focus, the
Exchange’s Staff would conduct a
thorough assessment of the company’s
suitability for continued listing in light
of such change. The Exchange would
6 For example, Bit Brother, a company listed on
Nasdaq, initially focused on selling tea products but
ultimately changed its business line to crypto. After
three reverse splits, one of which was quite large
(1000:1), the company was still unable to regain
sustained compliance with listing standards. The
stock was delisted from Nasdaq in February 2024.
See https://www.wsj.com/finance/stocks/as-tradingfrenzies-grip-penny-stocks-criticism-of-nasdaqgrows-8bd4118b (Feb 23, 2024).
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18:54 Apr 24, 2024
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focus its analysis on whether it would
have accepted the listed company for
initial listing if it had been engaged in
its modified business at the time of
original listing. The Exchange notes that
this analysis will focus on the
qualitative aspects of the company’s
suitability for listing and will not entail
an application of the quantitative
standards for initial listing. For
example, the Exchange would, where
appropriate, take into consideration
other changes that may have occurred in
connection with the change in the
company’s primary business focus,
including, but not limited to, changes in
the management, board of directors,
voting power, ownership, and financial
structure of the company. The Exchange
acknowledges that seeking to suspend
and delist a company’s stock under this
revised rule would be an extraordinary
action. The Exchange therefore
anticipates seldom relying on this new
discretionary authority, and only after
thorough analysis of all relevant facts
and circumstances.
The lead-in to Section 802.01D
provides that if any of the factors set
forth in 802.01D apply to a listed
company, the Exchange may in its sole
discretion subject the company to the
procedures outlined in Paras. 802.02
and 802.03, which provide
noncompliant companies with an
opportunity to cure their deficiencies.
The Exchange proposes to add a
parenthetical to this lead-in language to
specify that, instead of applying the
procedures outlined in Paras. 802.02
and 802.03, the Exchange will instead
commence immediate suspension and
delisting procedures if the individual
paragraph of Section 802.01D so
specifies). This proposed parenthetical
provision in the lead-in to Section
802.01D will make the lead-in
consistent with the Exchange’s proposal
to include a provision in the proposed
new paragraph of that rule providing
that any listed company that is deemed
to be unsuitable for continued listing
because of a change of business
operations will be subject to immediate
suspension and delisting procedures.
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)(5)
of the Act 8 in particular, 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,
7 15
8 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00071
Fmt 4703
Sfmt 4703
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 it is consistent
with the protection of investors to
amend Section 802.01D to provide the
Exchange with the discretion to
immediately commence suspension and
delisting procedures in accordance with
Section 804.00 of the Manual with
respect to a listed company that has
changed its primary business focus to a
new area of business that it was not
engaged in at the time of its original
listing or which was immaterial to its
operations at the time of its original
listing. The Exchange notes that
investors who acquired the company’s
stock prior to this change in operations
(including, in many cases, in connection
with the company’s initial public
offering) may have made their
investment decision based on the
company’s disclosure about its original
business and might not have made their
investment if they had been aware of
how the company would change. In
addition, the Exchange is concerned
that a listed company may change its
business operations to a line of business
that would have given rise to a concern
about the suitability for listing of the
company had it been in engaged in that
line of business at the time of its
application for listing. The Exchange
notes that taking delisting action in such
cases would be discretionary and that
the Exchange would undertake such
action only after a careful analysis of the
company’s suitability for continued
listing, taking into account all relevant
factors, including, but not limited to,
changes in the management, board of
directors, voting power, ownership, and
financial structure of the company. In
making these determinations, the
Exchange would focus its analysis on
whether it would have accepted the
listed company for initial listing if it
had been engaged in its modified
business at the time of original listing.
The Exchange notes that this analysis
will focus on the qualitative aspects of
the company’s suitability for listing and
will not entail an application of the
quantitative standards for initial listing.
The proposed inclusion of new
parenthetical language in the lead-in to
Section 802.01D makes that lead-in
consistent with the proposed new
paragraph with respect to a company’s
change in business, as it provides that
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Federal Register / Vol. 89, No. 81 / Thursday, April 25, 2024 / Notices
he Exchange can immediately suspend
and delist a company under Section
802.01D where the applicable paragraph
of the rule so provides, as is the case
with the proposed new provision with
respect to changes in business
operations.
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 notes that there are several
listing venues and that any company
that the Exchange deemed unsuitable
for continued listing under the proposed
rule could apply for listing on one or
more other 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, as modified
by Amendment No. 1, or
(B) institute proceedings to determine
whether the proposed rule change as
modified by Amendment No. 1, should
be disapproved.
IV. Solicitation of Comments
lotter on DSK11XQN23PROD with NOTICES1
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change, as modified by Amendment No.
1, 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–2024–21. 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–2024–21 and should be
submitted on or before May 16, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–08802 Filed 4–24–24; 8:45 am]
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CFR 200.30–3(a)(12).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99994; File No. 4–820]
Options Price Reporting Authority;
Order Instituting Proceedings To
Determine Whether To Approve or
Disapprove a Proposed Amendment
To Modify Section 5.2(c)(iii) of the
OPRA Plan Relating to Dissemination
of Exchange Proprietary Data
Information
April 19, 2024.
I. Introduction
On November 8, 2023, the Cboe BZX
Exchange, Inc. (‘‘BZX Options’’), Cboe
Exchange, Inc. (‘‘Cboe Options’’), Cboe
C2 Exchange, Inc. (‘‘C2 Options’’), and
Cboe EDGX Exchange, Inc. (‘‘EDGX
Options’’) (collectively, the ‘‘Sponsors’’
or ‘‘Cboe’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
a proposed amendment to the Plan for
Reporting of Consolidated Options Last
Sale Reports and Quotation Information
(‘‘OPRA Plan’’). The proposed
amendment was published for comment
in the Federal Register on January 22,
2024.1
This order institutes proceedings,
under Rule 608(b)(2)(i) of Regulation
NMS,2 to determine whether to approve
or disapprove the proposed amendment
or to approve the proposed amendment
with any changes or subject to any
conditions the Commission deems
necessary or appropriate after
considering public comment.
II. Proceedings To Determine Whether
To Approve or Disapprove the
Proposed Amendment
The Commission is instituting
proceedings pursuant to Rule
608(b)(2)(i) of Regulation NMS,3 and
Rules 700 and 701 of the Commission’s
Rules of Practice,4 to determine whether
to approve or disapprove the proposed
amendment or to approve the proposed
amendment with any changes or subject
to any conditions the Commission
deems necessary or appropriate. The
Commission is instituting proceedings
to have sufficient time to consider the
issues raised by proposed amendment,
including comments received.
1 See Options Price Reporting Authority; Notice
of Filing of Proposed Amendment to Modify
Section 5.2(c)(iii) of the OPRA Plan Relating to
Dissemination of Exchange Proprietary Data
Information, Securities Exchange Act Release No.
99345 (Jan. 16, 2024), 89 FR 3963 (Jan. 22, 2024)
(‘‘Notice’’). Comments received in response to the
Notice can be found on the Commission’s website
at https://www.sec.gov/comments/4-820/4-820.htm.
2 17 CFR 242.608(b)(2)(i).
3 Id.
4 17 CFR 201.700; 17 CFR 201.701.
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–2024–21 on the subject line.
31785
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]]>Agencies
[Federal Register Volume 89, Number 81 (Thursday, April 25, 2024)]
[Notices]
[Pages 31783-31785]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-08802]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99992; File No. SR-NYSE-2024-21]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change, as Modified by Amendment No.
1, To Amend Section 802.01D of the NYSE Listed Company Manual
Concerning the Suspension and Delisting of a Listed Company That Has
Changed its Primary Business Focus
April 19, 2024.
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 April 4, 2024, 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 and
II below, which Items have been prepared by the Exchange. On April 17,
2024, the Exchange filed Amendment No. 1, which supersedes the original
filing in its entirety. The Commission is publishing this notice to
solicit comments on the proposed rule change, as modified by Amendment
No. 1, 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 802.01D of the NYSE Listed
Company Manual (``Manual'') to provide the Exchange with discretion to
commence suspension and delisting proceedings with respect to a listed
company that has changed its primary business focus to a new area of
business that it was not engaged in at the time of its original
listing, or which was immaterial to its operations at the time of its
original listing. The text of the proposed rule change is set forth in
Exhibit 5. This Amendment No. 1 to SR-NYSE-2024-21 replaces SR-NYSE-
2024-21 as originally filed and supersedes such filing in its
entirety.\4\
---------------------------------------------------------------------------
\4\ See note 5 infra.
---------------------------------------------------------------------------
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
This Amendment No. 1 to SR-NYSE-2024-21 replaces SR-NYSE-2024-21 as
originally filed and supersedes such filing in its entirety.\5\
Amendment No.1 amends the original filing to: (i) insert a new sentence
in the proposed new paragraph in Section 802.01D stating that the
Exchange would focus its analysis of a company's suitability for
continued listing after a change in operations on whether it would have
accepted the listed company for initial listing if it had been engaged
in its modified business at the time of original listing; (ii) amend
the lead-in language to Section 802.01D and the description in the
Purpose section of the filing to include a parenthetical that specifies
that, instead of applying the procedures outlined in Sections 802.02
and 802.03, the Exchange will instead commence immediate suspension and
delisting procedures if the individual paragraph of Section 802.01D so
specifies; (iii) insert a sentence in the Purpose section noting that
the Exchange's analysis of a company's change in business operations
will focus on the qualitative aspects of the company's suitability for
listing and will not entail an application of the quantitative
standards for initial listing; (iv) amend the proposed new paragraph of
Section 802.01D under the heading ``Change in Primary Business Focus''
to clarify that the proposed paragraph will apply only where the
company has changed its primary business focus to a new area of
business that is ``substantially different'' from the business it was
engaged in at the time of its original listing or, as provided in the
original filing, which was immaterial to its operations at the time of
its original listing; (v) clarify that any
[[Page 31784]]
suspension and delisting resulting from a change in operations will be
undertaken in accordance with the procedures set out in Section 804.00
of the Manual; and (vi) make conforming changes to the Statutory Basis
section.
---------------------------------------------------------------------------
\5\ See SR-NYSE-2024-21 (April 4, 2024).
---------------------------------------------------------------------------
It has been the Exchange's experience that listed companies
occasionally change the focus of their operations from the business
they were engaged in at the time of initial listing to a business line
that is completely unrelated or that was not material at the time of
its original listing. The Exchange is concerned that, in such
circumstances, investors who acquired the company's stock prior to this
change in operations (including, in many cases, in connection with the
company's initial public offering) may have made their investment
decision based on the company's disclosure about its original business
and might not have made their investment if they had been aware of how
the company would change. In addition, a wholesale change in business
operations may give rise to a concern about the suitability for listing
of the company had it been in engaged in that line of business at the
time of its application for listing. The Exchange notes that, in some
circumstances, there has been significant downward price movement
subsequent to such a change in business focus, which resulted in
significant investor losses and an inability to meet exchange continued
listing standards.\6\
---------------------------------------------------------------------------
\6\ For example, Bit Brother, a company listed on Nasdaq,
initially focused on selling tea products but ultimately changed its
business line to crypto. After three reverse splits, one of which
was quite large (1000:1), the company was still unable to regain
sustained compliance with listing standards. The stock was delisted
from Nasdaq in February 2024. See https://www.wsj.com/finance/stocks/as-trading-frenzies-grip-penny-stocks-criticism-of-nasdaq-grows-8bd4118b (Feb 23, 2024).
---------------------------------------------------------------------------
In light of the foregoing, the Exchange proposes to amend Section
802.01D of the Manual (``Other Criteria'') to include a new paragraph
(``Change in Primary Business Focus'') providing that the Exchange may
in its sole discretion subject a listed company to immediate suspension
and delisting in accordance with the procedures set forth in Section
804.00 of the Manual if that listed company has changed its primary
business focus to a new area of business that it was not engaged in at
the time of its original listing or which was immaterial to its
operations at the time of its original listing. If the Exchange becomes
aware of such a change in the company's primary business focus, the
Exchange's Staff would conduct a thorough assessment of the company's
suitability for continued listing in light of such change. The Exchange
would focus its analysis on whether it would have accepted the listed
company for initial listing if it had been engaged in its modified
business at the time of original listing. The Exchange notes that this
analysis will focus on the qualitative aspects of the company's
suitability for listing and will not entail an application of the
quantitative standards for initial listing. For example, the Exchange
would, where appropriate, take into consideration other changes that
may have occurred in connection with the change in the company's
primary business focus, including, but not limited to, changes in the
management, board of directors, voting power, ownership, and financial
structure of the company. The Exchange acknowledges that seeking to
suspend and delist a company's stock under this revised rule would be
an extraordinary action. The Exchange therefore anticipates seldom
relying on this new discretionary authority, and only after thorough
analysis of all relevant facts and circumstances.
The lead-in to Section 802.01D provides that if any of the factors
set forth in 802.01D apply to a listed company, the Exchange may in its
sole discretion subject the company to the procedures outlined in
Paras. 802.02 and 802.03, which provide noncompliant companies with an
opportunity to cure their deficiencies. The Exchange proposes to add a
parenthetical to this lead-in language to specify that, instead of
applying the procedures outlined in Paras. 802.02 and 802.03, the
Exchange will instead commence immediate suspension and delisting
procedures if the individual paragraph of Section 802.01D so
specifies). This proposed parenthetical provision in the lead-in to
Section 802.01D will make the lead-in consistent with the Exchange's
proposal to include a provision in the proposed new paragraph of that
rule providing that any listed company that is deemed to be unsuitable
for continued listing because of a change of business operations will
be subject to immediate suspension and delisting procedures.
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)(5) of the Act \8\ in particular, 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)(5).
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The Exchange believes it is consistent with the protection of
investors to amend Section 802.01D to provide the Exchange with the
discretion to immediately commence suspension and delisting procedures
in accordance with Section 804.00 of the Manual with respect to a
listed company that has changed its primary business focus to a new
area of business that it was not engaged in at the time of its original
listing or which was immaterial to its operations at the time of its
original listing. The Exchange notes that investors who acquired the
company's stock prior to this change in operations (including, in many
cases, in connection with the company's initial public offering) may
have made their investment decision based on the company's disclosure
about its original business and might not have made their investment if
they had been aware of how the company would change. In addition, the
Exchange is concerned that a listed company may change its business
operations to a line of business that would have given rise to a
concern about the suitability for listing of the company had it been in
engaged in that line of business at the time of its application for
listing. The Exchange notes that taking delisting action in such cases
would be discretionary and that the Exchange would undertake such
action only after a careful analysis of the company's suitability for
continued listing, taking into account all relevant factors, including,
but not limited to, changes in the management, board of directors,
voting power, ownership, and financial structure of the company. In
making these determinations, the Exchange would focus its analysis on
whether it would have accepted the listed company for initial listing
if it had been engaged in its modified business at the time of original
listing. The Exchange notes that this analysis will focus on the
qualitative aspects of the company's suitability for listing and will
not entail an application of the quantitative standards for initial
listing.
The proposed inclusion of new parenthetical language in the lead-in
to Section 802.01D makes that lead-in consistent with the proposed new
paragraph with respect to a company's change in business, as it
provides that
[[Page 31785]]
he Exchange can immediately suspend and delist a company under Section
802.01D where the applicable paragraph of the rule so provides, as is
the case with the proposed new provision with respect to changes in
business operations.
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 notes that
there are several listing venues and that any company that the Exchange
deemed unsuitable for continued listing under the proposed rule could
apply for listing on one or more other 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, as
modified by Amendment No. 1, or
(B) institute proceedings to determine whether the proposed rule
change as modified by Amendment No. 1, 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, as modified by Amendment No. 1, is consistent with the Act.
Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-NYSE-2024-21 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-2024-21. 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-2024-21 and should be
submitted on or before May 16, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-08802 Filed 4-24-24; 8:45 am]
BILLING CODE 8011-01-P
