Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To Amend Sections 802.02 and 802.03 of the NYSE Listed Company Manual To Provide That the Exchange Will Not Review a Compliance Plan Submitted by a Listed Company That Is Below Compliance With a Continued Listing Standard if the Company Owes Any Unpaid Fees to the Exchange and Will Instead Commence Suspension and Delisting Procedures if Such Fees Are Not Paid in Full, 22385-22389 [2025-09404]
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Federal Register / Vol. 90, No. 100 / Tuesday, May 27, 2025 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–103088; File No. SR–NYSE–
2024–44]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Amendment No. 1 and Order
Granting Accelerated Approval of a
Proposed Rule Change, as Modified by
Amendment No. 1, To Amend Sections
802.02 and 802.03 of the NYSE Listed
Company Manual To Provide That the
Exchange Will Not Review a
Compliance Plan Submitted by a
Listed Company That Is Below
Compliance With a Continued Listing
Standard if the Company Owes Any
Unpaid Fees to the Exchange and Will
Instead Commence Suspension and
Delisting Procedures if Such Fees Are
Not Paid in Full
May 20, 2025.
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I. Introduction
4 15
On September 27, 2024, New York
Stock Exchange LLC (‘‘NYSE’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Exchange Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to amend Sections 802.02 and
802.03 of the NYSE Listed Company
Manual (‘‘Manual’’) to provide that the
Exchange (1) will not review a
compliance plan submitted by a
domestic or non-U.S. listed company
that is determined to be below
compliance with a continued listing
standard unless the company has paid
in full all outstanding listing or annual
fees due to the Exchange and will
commence suspension and delisting
procedures in accordance with Section
804.00 of the Manual if such fees are not
paid in full by the plan submission
deadline; or (2) with respect to any
unpaid fees that have become due and
payable since the commencement of its
plan period, if such fees are not paid in
full at the time of any required periodic
review of such plan, will commence
suspension and delisting procedures in
accordance with Section 804.00 of the
Manual. The proposed rule change was
published for comment in the Federal
Register on October 16, 2024.3
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 101295
(Oct. 9, 2024), 89 FR 83527 (‘‘Notice’’). Comment
letters on the proposed rule change are available at:
https://www.sec.gov/comments/sr-nyse-2024-44/
srnyse202444.htm.
2 17
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On November 25, 2024, pursuant to
Section 19(b)(2) of the Exchange Act,4
the Commission designated a longer
period within which to approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether to
disapprove the proposed rule change.5
On January 13, 2025, the Commission
issued an order instituting proceedings
under Section 19(b)(2) of the Exchange
Act 6 to determine whether to approve
or disapprove the proposed rule
change.7 On March 10, 2025, the
Commission issued a notice of
designation of a longer period of time
for Commission action on proceedings
to determine whether to approve or
disapprove the proposed rule change.8
On May 8, 2025, the Exchange filed
Amendment No. 1 to the proposed rule
change, which supersedes the original
filing in its entirety.9 The Commission
is publishing this notice to solicit
comments on the proposed rule change,
Jkt 265001
U.S.C. 78s(b)(2).
Securities Exchange Act Release No.
101738, 89 FR 95283 (Dec. 2, 2024). The
Commission designated January 14, 2025, as the
date by which the Commission shall approve or
disapprove, or institute proceedings to determine
whether to disapprove, the proposed rule change.
6 15 U.S.C. 78s(b)(2).
7 See Securities Exchange Act Release No.
102168, 90 FR 6037 (Jan. 17, 2025).
8 See Securities Exchange Act Release No.
102560, 90 FR 12187 (Mar. 14, 2025). The
Commission designated June 13, 2025, as the date
by which the Commission shall either approve or
disapprove the proposed rule change.
9 Amendment No. 1 is available on the
Commission’s website at https://www.sec.gov/
comments/sr-nyse-2024-44/srnyse202444-5991551740742.pdf. In Amendment No. 1, the Exchange
amended the proposed rule text to provide that: (i)
the Exchange will disclose the amount of any
unpaid fees as of the date of the non-compliance
letter and the Exchange will not review and
approve a plan unless all such disclosed fees are
paid in full; (ii) at the beginning of each calendar
fiscal quarter (or semi-annual period in the case of
a listed non-U.S. company) during the plan period,
the Exchange will disclose to the company the
amount of all unpaid fees owed by the company to
the Exchange as of the end of the just-completed
fiscal quarter or semi-annual period, as applicable,
and that, if the company does not pay all of the
disclosed outstanding fees within 45 days, the
Exchange will commence suspension and delisting
procedures; and (iii) a company will not be deemed
back into compliance prior to the completion of its
plan period unless it has paid in full all of the
disclosed outstanding fees and the Exchange will
initiate suspension and delisting procedures if the
company has not paid all of the disclosed
outstanding fees as of the end of the plan period.
In addition, in Amendment No. 1, the Exchange
added further description to the proposal with
respect to: (i) the work undertaken by the Exchange
in reviewing compliance plans under Sections
802.02 and 802.03 of the Manual; (ii) why the
proposed requirement is not being imposed on
companies that are non-compliant with the
requirements of Sections 802.01E or 802.01F of the
Manual; and (iii) the risk that companies that are
delisted at the end of the plan process may never
pay outstanding fees owed to the Exchange. See
Amendment No. 1 at 4–5.
5 See
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22385
as modified by Amendment No. 1, from
interested persons and is approving the
proposed rule change, as modified by
Amendment No. 1, on an accelerated
basis.
II. Description of the Proposed Rule
Change, as Modified by Amendment
No. 1
Currently, Sections 802.02 and 802.03
of the Manual provide that when the
Exchange identifies a domestic
company subject to Section 802.02 of
the Manual (‘‘listed domestic
company’’) or a non-U.S. company
subject to Section 802.03 of the Manual
(‘‘listed non-U.S. company’’) as being
below the continued listing criteria set
forth in Section 802.01 of the Manual
(and the company is not able to
otherwise qualify under an original
listing standard), the Exchange will
notify the company of such
noncompliance by letter (the ‘‘NonCompliance Letter’’) 10 and give the
company an opportunity to provide the
Exchange with a plan (‘‘plan’’) advising
the Exchange of definitive action the
company has taken, or is taking, that
would bring it into conformity with
continued listing standards within 18
months.11 If a company submits a plan
pursuant to Sections 802.02 or 802.03 of
the Manual, it must identify specific
quarterly milestones, in the case of
listed domestic companies, or semiannual milestones, in the case of listed
non-U.S. companies, against which the
Exchange will evaluate the company’s
progress.12 A company has 45 days, in
the case of listed domestic companies,
or 90 days, in the case of listed non-U.S.
companies, from receipt of the NonCompliance Letter to submit its plan to
the Exchange for review (the ‘‘plan
submission deadline’’).13 Otherwise, the
Exchange will promptly initiate
suspension and delisting procedures in
accordance with Section 804.00 of the
Manual.14
With respect to a plan submitted
pursuant to Sections 802.02 or 802.03 of
the Manual, Exchange staff will evaluate
the plan, including any supporting
documentation, and determine whether
the company has made a reasonable
demonstration in the plan of the
company’s ability to come into
conformity with the relevant continued
10 The Exchange’s proposal adds the defined term
‘‘Non-Compliance Letter’’ to the rule text. See
Amendment No. 1 at 33, 35.
11 See Sections 802.02 and 802.03 of the Manual.
12 See id.
13 See id.
14 See id. The Exchange’s proposal clarifies that
such suspension and delisting procedures are in
accordance with Section 804.00 of the Manual. See
Amendment No. 1 at 5 n.5.
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listing standards within 18 months.15 If
the Exchange accepts the plan, the
Exchange will review the company for
compliance with the plan either
quarterly, in the case of a listed
domestic company, or semi-annually, in
the case of a listed non-U.S. company.16
If the Exchange determines that the
company has failed to meet the material
aspects of the plan or any quarterly or
semi-annual milestones, as applicable,
the Exchange will review the
circumstances and variance, and
determine whether the company
remains able to come back into
compliance or whether such variance
warrants commencement of suspension
and delisting procedures.17 In any
event, a company that does not meet the
continued listing standards at the end of
the 18 months will be subject to the
prompt initiation of suspension and
delisting procedures in accordance with
Section 804.00 of the Manual.18
The Exchange proposes to amend
Sections 802.02 and 802.03 of the
Manual to provide that the Exchange
will not review a plan submitted by a
listed domestic company or listed nonU.S. company (each referred to herein as
a ‘‘listed company’’ and, together,
‘‘listed companies’’) that the Exchange
has identified as being below the
continued listing standards set forth in
Section 802.01 of the Manual unless the
company has previously paid in full all
listing or annual fees due to the
Exchange as of the date of the NonCompliance Letter, as disclosed by the
Exchange in the Non-Compliance
Letter.19 If the listed company is below
the continued listing standards and has
not paid in full all outstanding listing or
annual fees disclosed in the NonCompliance Letter by the plan
submission deadline, the Exchange will
promptly initiate suspension and
delisting procedures in accordance with
Section 804.00 of the Manual.20
In addition, the Exchange proposes to
amend Sections 802.02 and 802.03 of
15 See Sections 802.02 and 802.03 of the Manual.
The Exchange will make such determination within
45 days of receipt of the plan and will promptly
notify the company of its determination in writing.
See id.
16 See id. The Exchange will deem the plan
period over prior to the end of the 18 months if a
company is able to demonstrate returning to
compliance with the applicable continued listing
standards, or achieving the ability to qualify under
an original listing standard, for a period of two
consecutive quarters. See id.
17 See id. If the Exchange determines to proceed
with suspension and delisting procedures in
accordance with Section 804.00 of the Manual, it
may do so regardless of the company’s continued
listing status at that time. See id.
18 See id. See also Amendment No. 1 at 6 n.6.
19 See Amendment No. 1 at 7.
20 See id.
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the Manual to provide that at the
beginning of each quarterly or semiannual period, as applicable, the
Exchange will disclose to the listed
company in writing the amount of all
unpaid listing and annual fees owed by
the company to the Exchange as of the
end of the just-completed fiscal
period.21 If the company does not pay
in full all of the outstanding fees
disclosed therein within 45 days of the
date of such disclosure, the Exchange
will promptly initiate suspension and
delisting procedures with respect to
such company in accordance with
Section 804.00 of the Manual.22 In
addition, a company will not be deemed
to be back in compliance prior to the
completion of its plan period unless it
has paid in full all of the outstanding
fees owed to the Exchange as disclosed
in the most recent quarterly or semiannual fee disclosure, as applicable, and
the Exchange will promptly initiate
suspension and delisting procedures in
accordance with Section 804.00 of the
Manual if a company has not paid in
full all of the outstanding fees disclosed
in the most recent disclosure as of the
end of the plan period.23
The Exchange states that the process
of reviewing and analyzing plans, and
reviewing the periodic updates with
respect to plans, is resource-intensive
and costly for the Exchange and requires
significant work by Exchange staff.24
The Exchange also states that, given the
significant amount of work required to
review and analyze plans, as well as to
undertake the required quarterly or
semi-annual review of plans, the
Exchange believes it is important to
ensure that companies that wish to have
a plan accepted or continued by the
Exchange have paid all outstanding
annual and listing fees by the plan
submission deadline or at the time of
any required review of such plan.25 The
21 See
id.
id.
23 See id.
24 See Notice at 83528. According to the
Exchange, in connection with an initial plan review
and each subsequent periodic update, the staff
engages in a detailed review and analysis of the
company’s filed financial and other disclosures, as
well as supplemental documentation submitted by
the company in support of the plan or to evidence
progress in successful implementation of the plan.
According to the Exchange, the staff is required to
become deeply informed about the business and
financial condition and the prospects of the
company, including any material risks faced by the
company. The Exchange states that, to achieve this
level of understanding, Exchange staff typically
engages in multiple detailed conversations with
management in addition to the extensive
documentary review that is undertaken and that
this process requires significant expenditure of staff
resources, including the significant involvement of
senior staff members. See Amendment No. 1 at 6.
25 See Notice at 83528.
22 See
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Exchange further states that the large
majority of companies that submit plans
do so because they have fallen below
compliance with the global market
capitalization and stockholders’ equity
requirement of Section 802.01B of the
Manual, which provides that a company
will be considered below compliance if
its average global market capitalization
over a consecutive 30 trading-day
period is less than $50,000,000 and, at
the same time, stockholders’ equity is
less than $50,000,000.26 The Exchange
states that, in many cases, companies
that are below compliance with this
requirement have limited liquidity and
are often delayed in paying their annual
and listing fees.27
The Exchange states that listed
companies are already required by
Exchange rules to pay fees, as set forth
in Section 902.00 et seq. of the
Manual 28 and their listing
agreements,29 and the Exchange
currently has the authority under
Section 802.01D of the Manual to delist
companies for violations of their
agreements with the Exchange,
including their listing agreements.30
The Exchange states that while these
provisions already give the Exchange
authority to delist companies that do
not pay their fees, the Exchange believes
that it is desirable to have a transparent
and uniform process for the delisting of
companies that are delinquent in paying
their fees and seeking to avail
themselves of the plan process under
Sections 802.02 or 802.03 of the
26 See Amendment No. 1 at 6–7. See also Section
802.01B of the Manual.
27 See Amendment No. 1 at 7. The Exchange
states that, in its experience, when these companies
fail to regain compliance under a plan and are
subject to delisting, they have often not paid all
outstanding fees at the time of delisting and, in
many such cases, never pay their outstanding fees.
See id.
28 The listing fees and annual fees for all
categories of listed securities are set forth in Section
902.00 et seq. of the Manual. See Notice at 83528
n.4.
29 The Exchange states that the NYSE listing
agreement includes an agreement by the listing
applicant to ‘‘pay when due all fees associated with
its listing of securities on the Exchange, in
accordance with the Exchange’s rules.’’ Notice at
83528. See also NYSE Listing Agreement for
Domestic Company Equity Securities available at:
https://www.nyse.com/publicdocs/nyse/listing/
Domestic_Co_Listing_Agreement.pdf.
30 See Notice at 83528. Section 802.01D of the
Manual provides that the Exchange may in its sole
discretion subject a company to the procedures
outlined in Sections 802.02 and 802.03 of the
Manual if the company, its transfer agent, or
registrar, violates any of its, or their, listing or other
agreements with the Exchange. In addition, Section
802.01D of the Manual provides that the Exchange
is not limited by the criteria set forth in the rule
and ‘‘[o]ther factors which may lead to a company’s
delisting include . . . [a] breach by the company of
the terms of its listing agreement.’’
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Manual.31 The Exchange also states that
the proposal will help the Exchange to
ensure that it has sufficient resources to
fund its regulatory activities related to
the review and approval and the
ongoing monitoring of plans submitted
by companies that are below continued
listing standards.32
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change, as
modified by Amendment No. 1, is
consistent with the requirements of the
Exchange Act and the rules and
regulations thereunder applicable to a
national securities exchange.33 In
particular, the Commission finds that
the proposed rule change, as modified
by Amendment No. 1, is consistent with
Section 6(b)(5) of the Exchange Act,34
which requires, among other things, that
the rules of an exchange be designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, 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 not be designed to
permit unfair discrimination between
customers, issuers, brokers, or dealers;
and Section 6(b)(7) of the Exchange
Act,35 which requires, among other
things, that the rules of an exchange
provide a fair procedure for the
prohibition or limitation by the
exchange of any person with respect to
access to services offered by the
exchange.
The development and enforcement of
meaningful listing standards 36 for an
exchange is of critical importance to
financial markets and the investing
public. Among other things, such listing
standards help ensure that exchangelisted companies will have sufficient
public float, investor base, and trading
interest to provide the depth and
liquidity to promote fair and orderly
markets.37 Meaningful listing standards
31 See
Amendment No. 1 at 8.
Notice at 83528.
33 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
34 15 U.S.C. 78f(b)(5).
35 15 U.S.C. 78f(b)(7).
36 The Commission notes that this reference to
‘‘listing standards’’ is referring to both initial and
continued listing standards.
37 Adequate listing standards, by promoting fair
and orderly markets, are consistent with Section
6(b)(5) of the Exchange Act, in that they are, among
other things, designed to prevent fraudulent and
manipulative acts and practices, promote just and
equitable principles of trade, and protect investors
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32 See
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also are important given investor
expectations regarding the nature of
securities that have achieved an
exchange listing, and the role of an
exchange in overseeing its market and
assuring compliance with its listing
standards.38
Sections 802.02 and 802.03 of the
Manual set forth specific procedures for
listed companies that are identified as
being below the Exchange’s continued
listing criteria, including procedures for
companies to submit a plan to regain
compliance.39 The Commission has
stated that such rules enhance investor
protection by ensuring that companies
that fail to satisfy the continued listing
criteria are identified, reviewed, and
then subjected to specified delisting
procedures.40
The Exchange proposes to require
listed companies that have been
identified to be below the Exchange’s
continued listing standards and are
submitting a plan to regain compliance
under Sections 802.02 and 802.03 of the
Manual to pay any unpaid listing or
annual fees due to the Exchange prior to
the Exchange expending resources to
initially review a plan, periodically
review a plan, or deem a company has
and the public interest. See, e.g., Securities
Exchange Act Release No. 100816 (Aug. 26, 2024),
89 FR 70674, 70677 n.47 (Aug. 30, 2024) (SR–
NASDAQ–2024–019).
38 See, e.g., Securities Exchange Act Release Nos.
101271 (Oct. 7, 2024), 89 FR 82652, 82653 n.23 and
accompanying text (Oct. 11, 2024) (SR–NASDAQ–
2024–029) (Order Granting Approval of a Proposed
Rule Change, as Modified by Amendment No. 2, to
Modify the Application of Bid Price Compliance
Periods); 88716 (Apr. 21, 2020), 85 FR 23393 (Apr.
27, 2020) (SR–NASDAQ–2020–001) (Order
Approving a Proposed Rule Change To Modify the
Delisting Process for Securities With a Bid Price at
or Below $0.10 and for Securities That Have Had
One or More Reverse Stock Splits With a
Cumulative Ratio of 250 Shares or More to One
Over the Prior Two-Year Period); 88389 (Mar. 16,
2020), 85 FR 16163 (Mar. 20, 2020) (SR–NASDAQ–
2019–089) (Notice of Filing of Amendment No. 1
and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment
No. 1, To Amend Rule 5815 To Preclude Stay
During Hearing Panel Review of Staff Delisting
Determinations in Certain Circumstances). See also
Securities Exchange Act Release No. 81856 (Oct. 11,
2017), 82 FR 48296, 48298 (Oct. 17, 2017) (SR–
NYSE–2017–31) (Notice of Filing of Amendment
No. 1 and Order Granting Accelerated Approval of
a Proposed Rule Change, as Modified by
Amendment No. 1, To Amend the Listed Company
Manual To Adopt Initial and Continued Listing
Standards for Subscription Receipts) (stating that
‘‘[a]dequate standards are especially important
given the expectations of investors regarding
exchange trading and the imprimatur of listing on
a particular market’’ and that ‘‘[o]nce a security has
been approved for initial listing, maintenance
criteria allow an exchange to monitor the status and
trading characteristics of that issue . . . so that fair
and orderly markets can be maintained’’).
39 See Sections 802.02 and 802.03 of the Manual.
40 See, e.g., Securities Exchange Act Release No.
41502 (June 9, 1999), 64 FR 32588, 32594 (June 17,
1999) (SR–NYSE–99–13).
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22387
demonstrated a return to compliance
under a plan. The Exchange will
disclose to these listed companies the
amount of all unpaid listing and annual
fees in the Non-Compliance Letter and
at the beginning of the quarterly or
semi-annual review period, as
applicable. The Exchange also proposes
that it will commence suspension and
delisting procedures if such companies
fail to pay the disclosed fees in full
within a certain time period following
such disclosure. The Exchange states
that Exchange staff must undertake a
significant amount of resource-intensive
and costly work in initially and
periodically reviewing and analyzing
plans submitted by noncompliant
companies pursuant to Sections 802.02
and 802.03 of the Manual.41 The
Commission finds that the Exchange’s
proposal, as modified by Amendment
No. 1, will further the purposes of
Section 6(b)(5) of the Exchange Act by,
among other things, protecting investors
and the public interest by helping to
ensure the Exchange has sufficient
resources to fund its regulatory
activities relating to the review,
approval, and ongoing monitoring of
plans submitted by listed companies
subject to Sections 802.02 and 802.03 of
the Manual and seeking to regain
compliance with continued listing
standards.42 Moreover, although
Sections 802.01D and 902.00 of the
Manual provide the Exchange with
existing authority to delist companies
that fail to pay their listing or annual
fees,43 the proposal will provide greater
transparency to listed companies about
how the Exchange will handle unpaid
fees in circumstances where companies
seek to use or are using a compliance
plan under Sections 802.02 and 802.03
of the Manual.
The Commission finds that proposed
rule change is also consistent with the
requirement of Section 6(b)(5) of the
Exchange Act 44 that the rules of a
national securities exchange not be
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers. It is
reasonable for the Exchange to limit its
proposal to listed companies that are
below continued listing standards and
are subject to the procedures in Sections
802.02 and 802.03 of the Manual. As
discussed above, the Exchange states
that many of the listed companies that
submit plans pursuant to Sections
802.02 and 802.03 of the Manual do so
because they have fallen below
41 See
supra note 24 and accompanying text.
supra note 32.
43 See supra notes 28–30 and accompanying text.
44 15 U.S.C. 78f(b)(5).
42 See
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compliance with the global market
capitalization and stockholders’ equity
requirement of Section 802.01B of the
Manual. The Exchange states that these
companies often have limited liquidity
and are delayed in paying their annual
and listing fees, and when they fail to
regain compliance under the plan and
are delisted, many times they never pay
their outstanding fees.45 Moreover, as
discussed, above, the Exchange states
that the process of reviewing and
analyzing plans and reviewing the
periodic updates with respect to plans
pursuant to Sections 802.02 and 802.03
is resource-intensive and costly for the
Exchange.46 In addition, while Sections
802.01E and 802.01F of the Manual also
provide for compliance periods to allow
listed companies to come back into
compliance with certain other Exchange
rules, the Exchange states that it does
not, nor does it expect to, expend a
similar amount of effort in reviewing
and approving compliance plans under
these provisions.47 Accordingly, the
proposal focuses on companies that are
below listing standards and have unpaid
fees outstanding in circumstances in
which the Exchange can reasonably
expect to devote greater resources
relating to the company coming back
into compliance with listing standards
and where the Exchange faces a greater
risk of fees remaining unpaid.
The Commission further believes the
proposed rule change, as modified by
Amendment No. 1, is consistent with
Section 6(b)(7) of the Exchange Act 48 in
45 See
supra notes 26–27 and accompanying text.
supra note 24 and accompanying text.
47 See Amendment No. 1 at 7–9. In particular,
Section 802.01E (SEC Annual and Quarterly Report
Timely Filing Criteria) applies to a listed company
that incurs a late filing delinquency by failing to
timely file certain reports with the Commission and
provides that such companies may be granted a
compliance period of up to 12 months from the
extended due date of the delayed filing. Section
802.01F of the Manual (Noncompliance with
Section 303A.14 (Erroneously Awarded
Compensation)) applies to a listed issuer that is not
compliant with the ‘‘clawback requirements’’
relating to erroneously awarded compensation and
provides a process for an issuer to come back into
compliance with Exchange rules that is similar to
the process set forth in Section 802.01E of the
Manual. With respect to both rules, the Exchange
states that it does not expend a similar amount of
effort in reviewing and approving compliance
periods to that required in reviewing plans for
quantitative non-compliance pursuant to Sections
802.02 and 802.03 of the Manual because the issues
involved are generally narrower and more technical
in nature and do not require a review of a
compliance plan that encompasses all of a
company’s business and financial condition. The
Exchange also states that, with respect to Section
802.01E, companies that are delayed in filing their
periodic reports are often in good financial health
and do not present significant risks of quantitative
non-compliance or of being delisted without paying
their outstanding fees. See id.
48 15 U.S.C. 78f(b)(7).
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46 See
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that it provides a fair procedure for the
prohibition or limitation by the
Exchange of any person with respect to
access to services offered. A listed
company whose securities are subject to
prompt suspension and delisting under
the proposal will still be able to seek
review of a delisting determination from
the Committee for Review of the Board
of Directors of the Exchange as set forth
in Section 804.00 of the Manual.
Further, the Exchange will provide
notice of unpaid fees by disclosing in
writing the amount of all unpaid listing
and annual fees owed by a company to
the Exchange in the Non-Compliance
Letter and prior to any quarterly or
semi-annual review of a plan, and the
company will then have a reasonable
period of time to pay such unpaid fees
prior to the Exchange commencing
suspension and delisting procedures.
Accordingly, the Exchange’s process for
review of a delisting determination will
continue to provide a fair procedure for
the review of delisting determinations
in accordance with Section 6(b)(7) of the
Exchange Act.
For the reasons discussed above, the
Commission finds that this proposed
rule change, as modified by Amendment
No. 1, is consistent with the
requirements of the Exchange Act.49
IV. Solicitation of Comments on
Amendment No. 1 to the Proposed Rule
Change
Interested persons are invited to
submit written data, views, and
arguments concerning whether the
proposed rule change, as modified by
Amendment No. 1, is consistent with
the Exchange Act. Comments may be
submitted by any of the following
methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
NYSE–2024–44 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–2024–44. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
49 The comment letters received on the proposal
were generally supportive. See Letters from Melody
Aina Maryann Brand, dated November 30, 2024;
Elizabeth Slator, dated January 13, 2025.
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Sfmt 4703
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–2024–44, and should be
submitted on or before June 17, 2025.
V. Accelerated Approval of Proposed
Rule Change, as Modified by
Amendment No. 1
The Commission finds good cause to
approve the proposed rule change, as
modified by Amendment No. 1, prior to
the thirtieth day after the date of
publication of notice of the filing of
Amendment No. 1 in the Federal
Register. The changes in Amendment
No. 1 provide greater clarity to the rule
text and additional explanation to the
proposal. In particular, the changes in
Amendment No. 1 provide that the
Exchange will disclose in writing the
amount of all unpaid listing and annual
fees owed by a company to the
Exchange in the Non-Compliance Letter
and prior to any quarterly or semiannual review of a plan, and that a
company will have a specific period of
time to pay such unpaid fees prior to the
Exchange commencing suspension and
delisting procedures. These changes
provide greater clarity to how the
Exchange will implement the proposal
and help ensure that listed companies
receive adequate notice of the fees due
to the Exchange prior to the Exchange
commencing suspension and delisting
procedures. In addition, Amendment
No. 1 further describes the work
undertaken by the Exchange in
E:\FR\FM\27MYN1.SGM
27MYN1
Federal Register / Vol. 90, No. 100 / Tuesday, May 27, 2025 / Notices
reviewing compliance plans under
Sections 802.02 and 802.03 of the
Manual and the risks relating to
companies being delisted at the end of
the plan process without paying
outstanding fees owed to the Exchange.
These changes help to explain why the
proposed requirements are focused on
listed companies subject to Sections
802.02 and 802.03 of the Manual and
are not being imposed on other
companies not subject to such
provisions. The changes to the rule text
and additional information in
Amendment No. 1 assist the
Commission in evaluating the
Exchange’s proposal and in determining
that it is consistent with the Exchange
Act. Accordingly, the Commission finds
good cause, pursuant to Section 19(b)(2)
of the Exchange Act,50 to approve the
proposed rule change, as modified by
Amendment No. 1, on an accelerated
basis.
VI. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Exchange Act,51
that the proposed rule change (SR–
NYSE–2024–44), as modified by
Amendment No. 1, be, and it hereby is,
approved on an accelerated basis.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.52
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025–09404 Filed 5–23–25; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–103094; File No. SR–
FINRA–2025–002]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Designation
of Longer Period for Commission
Action on Proposed Rule Change To
Adopt FINRA Rule 6152 (Disclosure of
Order Execution Information for NMS
Stocks)
proposed rule change to adopt FINRA
Rule 6152 (Disclosure of Order
Execution Information for NMS Stocks)
to require members to submit their order
execution reports for NMS stocks to
FINRA for publication on the FINRA
website. The proposed rule change was
published for comment in the Federal
Register on April 11, 2025.3
Section 19(b)(2) of the Act 4 provides
that, within 45 days of the publication
of notice of the filing of a proposed rule
change, or within such longer period up
to 90 days as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or as to which the
self-regulatory organization consents,
the Commission shall either approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether the
proposed rule change should be
disapproved. The 45th day after
publication of the notice for this
proposed rule change is May 26, 2025.
The Commission is extending this 45day time period.
The Commission finds that it is
appropriate to designate a longer period
within which to take action on the
proposed rule change so that it has
sufficient time to consider the proposed
rule change and the comments received.
Accordingly, pursuant to Section
19(b)(2) of the Act,5 the Commission
designates July 10, 2025, as the date by
which the Commission shall approve or
disapprove, or institute proceedings to
determine whether to disapprove, the
proposed rule change (File No. SR–
FINRA–2025–002).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025–09410 Filed 5–23–25; 8:45 am]
BILLING CODE 8011–01–P
khammond on DSK9W7S144PROD with NOTICES
May 20, 2025.
On April 2, 2025, the Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) 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
50 15
U.S.C. 78s(b)(2).
U.S.C. 78s(b)(2).
52 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
51 15
VerDate Sep<11>2014
17:22 May 23, 2025
Jkt 265001
3 See Securities Exchange Act Release No. 102781
(April 7, 2025), 90 FR 15485 (April 11, 2025).
Comments received on the proposed rule change
are available at: https://www.sec.gov/comments/srfinra-2025-002/srfinra2025002.htm.
4 15 U.S.C. 78s(b)(2).
5 15 U.S.C. 78s(b)(2).
6 17 CFR 200.30–3(a)(31).
PO 00000
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Fmt 4703
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22389
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–103081; File No. SR–
SAPPHIRE–2025–24]
Self-Regulatory Organizations; MIAX
Sapphire, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Extend the Options
Regulatory Fee Sunset Date From May
31, 2025 to December 31, 2025
May 20, 2025.
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 May 14,
2025, MIAX Sapphire, LLC (‘‘MIAX
Sapphire’’ or ‘‘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 Exchange. 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 is filing a proposal to
amend the MIAX Sapphire Options
Exchange Fee Schedule (the ‘‘Fee
Schedule’’) relating to the Options
Regulatory Fee (‘‘ORF’’) to extend the
current sunset date of May 31, 2025 to
December 31, 2025.
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxglobal.com/markets/
us-options/all-options-exchanges/rulefilings, at MIAX Sapphire’s principal
office, and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
E:\FR\FM\27MYN1.SGM
27MYN1
]]>Agencies
[Federal Register Volume 90, Number 100 (Tuesday, May 27, 2025)]
[Notices]
[Pages 22385-22389]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-09404]
[[Page 22385]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103088; File No. SR-NYSE-2024-44]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Amendment No. 1 and Order Granting Accelerated
Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To
Amend Sections 802.02 and 802.03 of the NYSE Listed Company Manual To
Provide That the Exchange Will Not Review a Compliance Plan Submitted
by a Listed Company That Is Below Compliance With a Continued Listing
Standard if the Company Owes Any Unpaid Fees to the Exchange and Will
Instead Commence Suspension and Delisting Procedures if Such Fees Are
Not Paid in Full
May 20, 2025.
I. Introduction
On September 27, 2024, New York Stock Exchange LLC (``NYSE'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Exchange Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to amend Sections 802.02 and
802.03 of the NYSE Listed Company Manual (``Manual'') to provide that
the Exchange (1) will not review a compliance plan submitted by a
domestic or non-U.S. listed company that is determined to be below
compliance with a continued listing standard unless the company has
paid in full all outstanding listing or annual fees due to the Exchange
and will commence suspension and delisting procedures in accordance
with Section 804.00 of the Manual if such fees are not paid in full by
the plan submission deadline; or (2) with respect to any unpaid fees
that have become due and payable since the commencement of its plan
period, if such fees are not paid in full at the time of any required
periodic review of such plan, will commence suspension and delisting
procedures in accordance with Section 804.00 of the Manual. The
proposed rule change was published for comment in the Federal Register
on October 16, 2024.\3\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 101295 (Oct. 9,
2024), 89 FR 83527 (``Notice''). Comment letters on the proposed
rule change are available at: https://www.sec.gov/comments/sr-nyse-2024-44/srnyse202444.htm.
---------------------------------------------------------------------------
On November 25, 2024, pursuant to Section 19(b)(2) of the Exchange
Act,\4\ the Commission designated a longer period within which to
approve the proposed rule change, disapprove the proposed rule change,
or institute proceedings to determine whether to disapprove the
proposed rule change.\5\ On January 13, 2025, the Commission issued an
order instituting proceedings under Section 19(b)(2) of the Exchange
Act \6\ to determine whether to approve or disapprove the proposed rule
change.\7\ On March 10, 2025, the Commission issued a notice of
designation of a longer period of time for Commission action on
proceedings to determine whether to approve or disapprove the proposed
rule change.\8\ On May 8, 2025, the Exchange filed Amendment No. 1 to
the proposed rule change, which supersedes the original filing in its
entirety.\9\ The Commission is publishing this notice to solicit
comments on the proposed rule change, as modified by Amendment No. 1,
from interested persons and is approving the proposed rule change, as
modified by Amendment No. 1, on an accelerated basis.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 101738, 89 FR 95283
(Dec. 2, 2024). The Commission designated January 14, 2025, as the
date by which the Commission shall approve or disapprove, or
institute proceedings to determine whether to disapprove, the
proposed rule change.
\6\ 15 U.S.C. 78s(b)(2).
\7\ See Securities Exchange Act Release No. 102168, 90 FR 6037
(Jan. 17, 2025).
\8\ See Securities Exchange Act Release No. 102560, 90 FR 12187
(Mar. 14, 2025). The Commission designated June 13, 2025, as the
date by which the Commission shall either approve or disapprove the
proposed rule change.
\9\ Amendment No. 1 is available on the Commission's website at
https://www.sec.gov/comments/sr-nyse-2024-44/srnyse202444-599155-1740742.pdf. In Amendment No. 1, the Exchange amended the proposed
rule text to provide that: (i) the Exchange will disclose the amount
of any unpaid fees as of the date of the non-compliance letter and
the Exchange will not review and approve a plan unless all such
disclosed fees are paid in full; (ii) at the beginning of each
calendar fiscal quarter (or semi-annual period in the case of a
listed non-U.S. company) during the plan period, the Exchange will
disclose to the company the amount of all unpaid fees owed by the
company to the Exchange as of the end of the just-completed fiscal
quarter or semi-annual period, as applicable, and that, if the
company does not pay all of the disclosed outstanding fees within 45
days, the Exchange will commence suspension and delisting
procedures; and (iii) a company will not be deemed back into
compliance prior to the completion of its plan period unless it has
paid in full all of the disclosed outstanding fees and the Exchange
will initiate suspension and delisting procedures if the company has
not paid all of the disclosed outstanding fees as of the end of the
plan period. In addition, in Amendment No. 1, the Exchange added
further description to the proposal with respect to: (i) the work
undertaken by the Exchange in reviewing compliance plans under
Sections 802.02 and 802.03 of the Manual; (ii) why the proposed
requirement is not being imposed on companies that are non-compliant
with the requirements of Sections 802.01E or 802.01F of the Manual;
and (iii) the risk that companies that are delisted at the end of
the plan process may never pay outstanding fees owed to the
Exchange. See Amendment No. 1 at 4-5.
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II. Description of the Proposed Rule Change, as Modified by Amendment
No. 1
Currently, Sections 802.02 and 802.03 of the Manual provide that
when the Exchange identifies a domestic company subject to Section
802.02 of the Manual (``listed domestic company'') or a non-U.S.
company subject to Section 802.03 of the Manual (``listed non-U.S.
company'') as being below the continued listing criteria set forth in
Section 802.01 of the Manual (and the company is not able to otherwise
qualify under an original listing standard), the Exchange will notify
the company of such noncompliance by letter (the ``Non-Compliance
Letter'') \10\ and give the company an opportunity to provide the
Exchange with a plan (``plan'') advising the Exchange of definitive
action the company has taken, or is taking, that would bring it into
conformity with continued listing standards within 18 months.\11\ If a
company submits a plan pursuant to Sections 802.02 or 802.03 of the
Manual, it must identify specific quarterly milestones, in the case of
listed domestic companies, or semi-annual milestones, in the case of
listed non-U.S. companies, against which the Exchange will evaluate the
company's progress.\12\ A company has 45 days, in the case of listed
domestic companies, or 90 days, in the case of listed non-U.S.
companies, from receipt of the Non-Compliance Letter to submit its plan
to the Exchange for review (the ``plan submission deadline'').\13\
Otherwise, the Exchange will promptly initiate suspension and delisting
procedures in accordance with Section 804.00 of the Manual.\14\
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\10\ The Exchange's proposal adds the defined term ``Non-
Compliance Letter'' to the rule text. See Amendment No. 1 at 33, 35.
\11\ See Sections 802.02 and 802.03 of the Manual.
\12\ See id.
\13\ See id.
\14\ See id. The Exchange's proposal clarifies that such
suspension and delisting procedures are in accordance with Section
804.00 of the Manual. See Amendment No. 1 at 5 n.5.
---------------------------------------------------------------------------
With respect to a plan submitted pursuant to Sections 802.02 or
802.03 of the Manual, Exchange staff will evaluate the plan, including
any supporting documentation, and determine whether the company has
made a reasonable demonstration in the plan of the company's ability to
come into conformity with the relevant continued
[[Page 22386]]
listing standards within 18 months.\15\ If the Exchange accepts the
plan, the Exchange will review the company for compliance with the plan
either quarterly, in the case of a listed domestic company, or semi-
annually, in the case of a listed non-U.S. company.\16\ If the Exchange
determines that the company has failed to meet the material aspects of
the plan or any quarterly or semi-annual milestones, as applicable, the
Exchange will review the circumstances and variance, and determine
whether the company remains able to come back into compliance or
whether such variance warrants commencement of suspension and delisting
procedures.\17\ In any event, a company that does not meet the
continued listing standards at the end of the 18 months will be subject
to the prompt initiation of suspension and delisting procedures in
accordance with Section 804.00 of the Manual.\18\
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\15\ See Sections 802.02 and 802.03 of the Manual. The Exchange
will make such determination within 45 days of receipt of the plan
and will promptly notify the company of its determination in
writing. See id.
\16\ See id. The Exchange will deem the plan period over prior
to the end of the 18 months if a company is able to demonstrate
returning to compliance with the applicable continued listing
standards, or achieving the ability to qualify under an original
listing standard, for a period of two consecutive quarters. See id.
\17\ See id. If the Exchange determines to proceed with
suspension and delisting procedures in accordance with Section
804.00 of the Manual, it may do so regardless of the company's
continued listing status at that time. See id.
\18\ See id. See also Amendment No. 1 at 6 n.6.
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The Exchange proposes to amend Sections 802.02 and 802.03 of the
Manual to provide that the Exchange will not review a plan submitted by
a listed domestic company or listed non-U.S. company (each referred to
herein as a ``listed company'' and, together, ``listed companies'')
that the Exchange has identified as being below the continued listing
standards set forth in Section 802.01 of the Manual unless the company
has previously paid in full all listing or annual fees due to the
Exchange as of the date of the Non-Compliance Letter, as disclosed by
the Exchange in the Non-Compliance Letter.\19\ If the listed company is
below the continued listing standards and has not paid in full all
outstanding listing or annual fees disclosed in the Non-Compliance
Letter by the plan submission deadline, the Exchange will promptly
initiate suspension and delisting procedures in accordance with Section
804.00 of the Manual.\20\
---------------------------------------------------------------------------
\19\ See Amendment No. 1 at 7.
\20\ See id.
---------------------------------------------------------------------------
In addition, the Exchange proposes to amend Sections 802.02 and
802.03 of the Manual to provide that at the beginning of each quarterly
or semi-annual period, as applicable, the Exchange will disclose to the
listed company in writing the amount of all unpaid listing and annual
fees owed by the company to the Exchange as of the end of the just-
completed fiscal period.\21\ If the company does not pay in full all of
the outstanding fees disclosed therein within 45 days of the date of
such disclosure, the Exchange will promptly initiate suspension and
delisting procedures with respect to such company in accordance with
Section 804.00 of the Manual.\22\ In addition, a company will not be
deemed to be back in compliance prior to the completion of its plan
period unless it has paid in full all of the outstanding fees owed to
the Exchange as disclosed in the most recent quarterly or semi-annual
fee disclosure, as applicable, and the Exchange will promptly initiate
suspension and delisting procedures in accordance with Section 804.00
of the Manual if a company has not paid in full all of the outstanding
fees disclosed in the most recent disclosure as of the end of the plan
period.\23\
---------------------------------------------------------------------------
\21\ See id.
\22\ See id.
\23\ See id.
---------------------------------------------------------------------------
The Exchange states that the process of reviewing and analyzing
plans, and reviewing the periodic updates with respect to plans, is
resource-intensive and costly for the Exchange and requires significant
work by Exchange staff.\24\ The Exchange also states that, given the
significant amount of work required to review and analyze plans, as
well as to undertake the required quarterly or semi-annual review of
plans, the Exchange believes it is important to ensure that companies
that wish to have a plan accepted or continued by the Exchange have
paid all outstanding annual and listing fees by the plan submission
deadline or at the time of any required review of such plan.\25\ The
Exchange further states that the large majority of companies that
submit plans do so because they have fallen below compliance with the
global market capitalization and stockholders' equity requirement of
Section 802.01B of the Manual, which provides that a company will be
considered below compliance if its average global market capitalization
over a consecutive 30 trading-day period is less than $50,000,000 and,
at the same time, stockholders' equity is less than $50,000,000.\26\
The Exchange states that, in many cases, companies that are below
compliance with this requirement have limited liquidity and are often
delayed in paying their annual and listing fees.\27\
---------------------------------------------------------------------------
\24\ See Notice at 83528. According to the Exchange, in
connection with an initial plan review and each subsequent periodic
update, the staff engages in a detailed review and analysis of the
company's filed financial and other disclosures, as well as
supplemental documentation submitted by the company in support of
the plan or to evidence progress in successful implementation of the
plan. According to the Exchange, the staff is required to become
deeply informed about the business and financial condition and the
prospects of the company, including any material risks faced by the
company. The Exchange states that, to achieve this level of
understanding, Exchange staff typically engages in multiple detailed
conversations with management in addition to the extensive
documentary review that is undertaken and that this process requires
significant expenditure of staff resources, including the
significant involvement of senior staff members. See Amendment No. 1
at 6.
\25\ See Notice at 83528.
\26\ See Amendment No. 1 at 6-7. See also Section 802.01B of the
Manual.
\27\ See Amendment No. 1 at 7. The Exchange states that, in its
experience, when these companies fail to regain compliance under a
plan and are subject to delisting, they have often not paid all
outstanding fees at the time of delisting and, in many such cases,
never pay their outstanding fees. See id.
---------------------------------------------------------------------------
The Exchange states that listed companies are already required by
Exchange rules to pay fees, as set forth in Section 902.00 et seq. of
the Manual \28\ and their listing agreements,\29\ and the Exchange
currently has the authority under Section 802.01D of the Manual to
delist companies for violations of their agreements with the Exchange,
including their listing agreements.\30\ The Exchange states that while
these provisions already give the Exchange authority to delist
companies that do not pay their fees, the Exchange believes that it is
desirable to have a transparent and uniform process for the delisting
of companies that are delinquent in paying their fees and seeking to
avail themselves of the plan process under Sections 802.02 or 802.03 of
the
[[Page 22387]]
Manual.\31\ The Exchange also states that the proposal will help the
Exchange to ensure that it has sufficient resources to fund its
regulatory activities related to the review and approval and the
ongoing monitoring of plans submitted by companies that are below
continued listing standards.\32\
---------------------------------------------------------------------------
\28\ The listing fees and annual fees for all categories of
listed securities are set forth in Section 902.00 et seq. of the
Manual. See Notice at 83528 n.4.
\29\ The Exchange states that the NYSE listing agreement
includes an agreement by the listing applicant to ``pay when due all
fees associated with its listing of securities on the Exchange, in
accordance with the Exchange's rules.'' Notice at 83528. See also
NYSE Listing Agreement for Domestic Company Equity Securities
available at: https://www.nyse.com/publicdocs/nyse/listing/Domestic_Co_Listing_Agreement.pdf.
\30\ See Notice at 83528. Section 802.01D of the Manual provides
that the Exchange may in its sole discretion subject a company to
the procedures outlined in Sections 802.02 and 802.03 of the Manual
if the company, its transfer agent, or registrar, violates any of
its, or their, listing or other agreements with the Exchange. In
addition, Section 802.01D of the Manual provides that the Exchange
is not limited by the criteria set forth in the rule and ``[o]ther
factors which may lead to a company's delisting include . . . [a]
breach by the company of the terms of its listing agreement.''
\31\ See Amendment No. 1 at 8.
\32\ See Notice at 83528.
---------------------------------------------------------------------------
III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change, as modified by Amendment No. 1, is consistent with the
requirements of the Exchange Act and the rules and regulations
thereunder applicable to a national securities exchange.\33\ In
particular, the Commission finds that the proposed rule change, as
modified by Amendment No. 1, is consistent with Section 6(b)(5) of the
Exchange Act,\34\ which requires, among other things, that the rules of
an exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, 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 not be designed to permit unfair discrimination
between customers, issuers, brokers, or dealers; and Section 6(b)(7) of
the Exchange Act,\35\ which requires, among other things, that the
rules of an exchange provide a fair procedure for the prohibition or
limitation by the exchange of any person with respect to access to
services offered by the exchange.
---------------------------------------------------------------------------
\33\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\34\ 15 U.S.C. 78f(b)(5).
\35\ 15 U.S.C. 78f(b)(7).
---------------------------------------------------------------------------
The development and enforcement of meaningful listing standards
\36\ for an exchange is of critical importance to financial markets and
the investing public. Among other things, such listing standards help
ensure that exchange-listed companies will have sufficient public
float, investor base, and trading interest to provide the depth and
liquidity to promote fair and orderly markets.\37\ Meaningful listing
standards also are important given investor expectations regarding the
nature of securities that have achieved an exchange listing, and the
role of an exchange in overseeing its market and assuring compliance
with its listing standards.\38\
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\36\ The Commission notes that this reference to ``listing
standards'' is referring to both initial and continued listing
standards.
\37\ Adequate listing standards, by promoting fair and orderly
markets, are consistent with Section 6(b)(5) of the Exchange Act, in
that they are, among other things, designed to prevent fraudulent
and manipulative acts and practices, promote just and equitable
principles of trade, and protect investors and the public interest.
See, e.g., Securities Exchange Act Release No. 100816 (Aug. 26,
2024), 89 FR 70674, 70677 n.47 (Aug. 30, 2024) (SR-NASDAQ-2024-019).
\38\ See, e.g., Securities Exchange Act Release Nos. 101271
(Oct. 7, 2024), 89 FR 82652, 82653 n.23 and accompanying text (Oct.
11, 2024) (SR-NASDAQ-2024-029) (Order Granting Approval of a
Proposed Rule Change, as Modified by Amendment No. 2, to Modify the
Application of Bid Price Compliance Periods); 88716 (Apr. 21, 2020),
85 FR 23393 (Apr. 27, 2020) (SR-NASDAQ-2020-001) (Order Approving a
Proposed Rule Change To Modify the Delisting Process for Securities
With a Bid Price at or Below $0.10 and for Securities That Have Had
One or More Reverse Stock Splits With a Cumulative Ratio of 250
Shares or More to One Over the Prior Two-Year Period); 88389 (Mar.
16, 2020), 85 FR 16163 (Mar. 20, 2020) (SR-NASDAQ-2019-089) (Notice
of Filing of Amendment No. 1 and Order Granting Accelerated Approval
of a Proposed Rule Change, as Modified by Amendment No. 1, To Amend
Rule 5815 To Preclude Stay During Hearing Panel Review of Staff
Delisting Determinations in Certain Circumstances). See also
Securities Exchange Act Release No. 81856 (Oct. 11, 2017), 82 FR
48296, 48298 (Oct. 17, 2017) (SR-NYSE-2017-31) (Notice of Filing of
Amendment No. 1 and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment No. 1, To Amend the
Listed Company Manual To Adopt Initial and Continued Listing
Standards for Subscription Receipts) (stating that ``[a]dequate
standards are especially important given the expectations of
investors regarding exchange trading and the imprimatur of listing
on a particular market'' and that ``[o]nce a security has been
approved for initial listing, maintenance criteria allow an exchange
to monitor the status and trading characteristics of that issue . .
. so that fair and orderly markets can be maintained'').
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Sections 802.02 and 802.03 of the Manual set forth specific
procedures for listed companies that are identified as being below the
Exchange's continued listing criteria, including procedures for
companies to submit a plan to regain compliance.\39\ The Commission has
stated that such rules enhance investor protection by ensuring that
companies that fail to satisfy the continued listing criteria are
identified, reviewed, and then subjected to specified delisting
procedures.\40\
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\39\ See Sections 802.02 and 802.03 of the Manual.
\40\ See, e.g., Securities Exchange Act Release No. 41502 (June
9, 1999), 64 FR 32588, 32594 (June 17, 1999) (SR-NYSE-99-13).
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The Exchange proposes to require listed companies that have been
identified to be below the Exchange's continued listing standards and
are submitting a plan to regain compliance under Sections 802.02 and
802.03 of the Manual to pay any unpaid listing or annual fees due to
the Exchange prior to the Exchange expending resources to initially
review a plan, periodically review a plan, or deem a company has
demonstrated a return to compliance under a plan. The Exchange will
disclose to these listed companies the amount of all unpaid listing and
annual fees in the Non-Compliance Letter and at the beginning of the
quarterly or semi-annual review period, as applicable. The Exchange
also proposes that it will commence suspension and delisting procedures
if such companies fail to pay the disclosed fees in full within a
certain time period following such disclosure. The Exchange states that
Exchange staff must undertake a significant amount of resource-
intensive and costly work in initially and periodically reviewing and
analyzing plans submitted by noncompliant companies pursuant to
Sections 802.02 and 802.03 of the Manual.\41\ The Commission finds that
the Exchange's proposal, as modified by Amendment No. 1, will further
the purposes of Section 6(b)(5) of the Exchange Act by, among other
things, protecting investors and the public interest by helping to
ensure the Exchange has sufficient resources to fund its regulatory
activities relating to the review, approval, and ongoing monitoring of
plans submitted by listed companies subject to Sections 802.02 and
802.03 of the Manual and seeking to regain compliance with continued
listing standards.\42\ Moreover, although Sections 802.01D and 902.00
of the Manual provide the Exchange with existing authority to delist
companies that fail to pay their listing or annual fees,\43\ the
proposal will provide greater transparency to listed companies about
how the Exchange will handle unpaid fees in circumstances where
companies seek to use or are using a compliance plan under Sections
802.02 and 802.03 of the Manual.
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\41\ See supra note 24 and accompanying text.
\42\ See supra note 32.
\43\ See supra notes 28-30 and accompanying text.
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The Commission finds that proposed rule change is also consistent
with the requirement of Section 6(b)(5) of the Exchange Act \44\ that
the rules of a national securities exchange not be designed to permit
unfair discrimination between customers, issuers, brokers, or dealers.
It is reasonable for the Exchange to limit its proposal to listed
companies that are below continued listing standards and are subject to
the procedures in Sections 802.02 and 802.03 of the Manual. As
discussed above, the Exchange states that many of the listed companies
that submit plans pursuant to Sections 802.02 and 802.03 of the Manual
do so because they have fallen below
[[Page 22388]]
compliance with the global market capitalization and stockholders'
equity requirement of Section 802.01B of the Manual. The Exchange
states that these companies often have limited liquidity and are
delayed in paying their annual and listing fees, and when they fail to
regain compliance under the plan and are delisted, many times they
never pay their outstanding fees.\45\ Moreover, as discussed, above,
the Exchange states that the process of reviewing and analyzing plans
and reviewing the periodic updates with respect to plans pursuant to
Sections 802.02 and 802.03 is resource-intensive and costly for the
Exchange.\46\ In addition, while Sections 802.01E and 802.01F of the
Manual also provide for compliance periods to allow listed companies to
come back into compliance with certain other Exchange rules, the
Exchange states that it does not, nor does it expect to, expend a
similar amount of effort in reviewing and approving compliance plans
under these provisions.\47\ Accordingly, the proposal focuses on
companies that are below listing standards and have unpaid fees
outstanding in circumstances in which the Exchange can reasonably
expect to devote greater resources relating to the company coming back
into compliance with listing standards and where the Exchange faces a
greater risk of fees remaining unpaid.
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\44\ 15 U.S.C. 78f(b)(5).
\45\ See supra notes 26-27 and accompanying text.
\46\ See supra note 24 and accompanying text.
\47\ See Amendment No. 1 at 7-9. In particular, Section 802.01E
(SEC Annual and Quarterly Report Timely Filing Criteria) applies to
a listed company that incurs a late filing delinquency by failing to
timely file certain reports with the Commission and provides that
such companies may be granted a compliance period of up to 12 months
from the extended due date of the delayed filing. Section 802.01F of
the Manual (Noncompliance with Section 303A.14 (Erroneously Awarded
Compensation)) applies to a listed issuer that is not compliant with
the ``clawback requirements'' relating to erroneously awarded
compensation and provides a process for an issuer to come back into
compliance with Exchange rules that is similar to the process set
forth in Section 802.01E of the Manual. With respect to both rules,
the Exchange states that it does not expend a similar amount of
effort in reviewing and approving compliance periods to that
required in reviewing plans for quantitative non-compliance pursuant
to Sections 802.02 and 802.03 of the Manual because the issues
involved are generally narrower and more technical in nature and do
not require a review of a compliance plan that encompasses all of a
company's business and financial condition. The Exchange also states
that, with respect to Section 802.01E, companies that are delayed in
filing their periodic reports are often in good financial health and
do not present significant risks of quantitative non-compliance or
of being delisted without paying their outstanding fees. See id.
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The Commission further believes the proposed rule change, as
modified by Amendment No. 1, is consistent with Section 6(b)(7) of the
Exchange Act \48\ in that it provides a fair procedure for the
prohibition or limitation by the Exchange of any person with respect to
access to services offered. A listed company whose securities are
subject to prompt suspension and delisting under the proposal will
still be able to seek review of a delisting determination from the
Committee for Review of the Board of Directors of the Exchange as set
forth in Section 804.00 of the Manual. Further, the Exchange will
provide notice of unpaid fees by disclosing in writing the amount of
all unpaid listing and annual fees owed by a company to the Exchange in
the Non-Compliance Letter and prior to any quarterly or semi-annual
review of a plan, and the company will then have a reasonable period of
time to pay such unpaid fees prior to the Exchange commencing
suspension and delisting procedures. Accordingly, the Exchange's
process for review of a delisting determination will continue to
provide a fair procedure for the review of delisting determinations in
accordance with Section 6(b)(7) of the Exchange Act.
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\48\ 15 U.S.C. 78f(b)(7).
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For the reasons discussed above, the Commission finds that this
proposed rule change, as modified by Amendment No. 1, is consistent
with the requirements of the Exchange Act.\49\
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\49\ The comment letters received on the proposal were generally
supportive. See Letters from Melody Aina Maryann Brand, dated
November 30, 2024; Elizabeth Slator, dated January 13, 2025.
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IV. Solicitation of Comments on Amendment No. 1 to the Proposed Rule
Change
Interested persons are invited to submit written data, views, and
arguments concerning whether the proposed rule change, as modified by
Amendment No. 1, is consistent with the Exchange 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-2024-44 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-2024-44. 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-2024-44, and should be
submitted on or before June 17, 2025.
V. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment No. 1
The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 1, prior to the thirtieth day
after the date of publication of notice of the filing of Amendment No.
1 in the Federal Register. The changes in Amendment No. 1 provide
greater clarity to the rule text and additional explanation to the
proposal. In particular, the changes in Amendment No. 1 provide that
the Exchange will disclose in writing the amount of all unpaid listing
and annual fees owed by a company to the Exchange in the Non-Compliance
Letter and prior to any quarterly or semi-annual review of a plan, and
that a company will have a specific period of time to pay such unpaid
fees prior to the Exchange commencing suspension and delisting
procedures. These changes provide greater clarity to how the Exchange
will implement the proposal and help ensure that listed companies
receive adequate notice of the fees due to the Exchange prior to the
Exchange commencing suspension and delisting procedures. In addition,
Amendment No. 1 further describes the work undertaken by the Exchange
in
[[Page 22389]]
reviewing compliance plans under Sections 802.02 and 802.03 of the
Manual and the risks relating to companies being delisted at the end of
the plan process without paying outstanding fees owed to the Exchange.
These changes help to explain why the proposed requirements are focused
on listed companies subject to Sections 802.02 and 802.03 of the Manual
and are not being imposed on other companies not subject to such
provisions. The changes to the rule text and additional information in
Amendment No. 1 assist the Commission in evaluating the Exchange's
proposal and in determining that it is consistent with the Exchange
Act. Accordingly, the Commission finds good cause, pursuant to Section
19(b)(2) of the Exchange Act,\50\ to approve the proposed rule change,
as modified by Amendment No. 1, on an accelerated basis.
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\50\ 15 U.S.C. 78s(b)(2).
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VI. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\51\ that the proposed rule change (SR-NYSE-2024-44), as
modified by Amendment No. 1, be, and it hereby is, approved on an
accelerated basis.
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\51\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\52\
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\52\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-09404 Filed 5-23-25; 8:45 am]
BILLING CODE 8011-01-P
