81 FR 90893 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Section 902.04 of the NYSE Listed Company Manual

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 241 (December 15, 2016)

Page Range		90893-90895
FR Document		2016-30079

Federal Register, Volume 81 Issue 241 (Thursday, December 15, 2016)

[Federal Register Volume 81, Number 241 (Thursday, December 15, 2016)]
[Notices]
[Pages 90893-90895]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2016-30079]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79515; File No. SR-NYSE-2016-80]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Amending Section 902.04 of the NYSE Listed Company Manual

December 9, 2016.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'' or ``Exchange Act'') \2\ and Rule 19b-4 thereunder,\3\
notice is hereby given that, on November 30, 2016, New York Stock
Exchange LLC (``NYSE'' or ``Exchange'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change as
described in Items I, II, and III below, which Items have been prepared
by the self-regulatory organization. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

The Exchange proposes to amend Section 902.04 of the NYSE Listed
Company Manual (the ``Manual'') to adopt a fee discount for issuers
that list 20 or more closed-end funds on the Exchange. The proposed
rule change is available on the Exchange's Web site 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
The Exchange proposes to amend Section 902.04 of the Manual to
adopt a fee discount for issuers that list 20 or more closed-end funds
on the Exchange. The proposed new discount will take effect on January
1, 2017. Currently, fund families that list between three and 14
closed-end funds receive a 5% discount off the calculated Annual Fee
for each fund listed, and those with 15 or more listed closed-end funds
receive a discount of 15%.\4\ Aggregate Annual Fees for any fund family
are capped at $1,000,000 in any given year.
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\4\ Closed-end funds are charged Annual Fees at a rate of
$0.001025 per share.
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Currently, a small number of fund families benefit from the
$1,000,000 fee cap. In most cases, fund families that benefit from the
cap have a significant number of funds listed on the Exchange

[[Page 90894]]

and would otherwise have paid fees far in excess of $1,000,000.
Therefore, the effective discount they receive to their uncapped fees
typically exceeds 50%.
There are a number of other, smaller fund families that have 20 or
more funds listed on the Exchange whose aggregate fees approach but do
not exceed $1,000,000 and who therefore do not benefit from the cap.
Consequently, those fund families pay fees at a far higher effective
fee rate than is paid by those fund families whose fees are capped. The
purpose of the proposed 50% discount is to significantly reduce this
disparity.
The Exchange believes that a reduction in the effective fee rate
paid by fund families that have 20 or more listed funds, but do not
benefit from the cap, would create an incentive for them to initiate
new funds, increasing competition in the industry. In particular, the
Exchange believes that the proposed amendment may create an incentive
for fund families to create a greater number of smaller funds than is
currently the case, as smaller funds are particularly concerned about
limiting their operating costs.
The Exchange believes that it is not unfairly discriminatory to
provide a greater discount for fund families listing more than [sic] 20
funds than for smaller fund families, as a significant amount of the
costs of conducting the Exchange's regulatory activities and providing
client services with respect to a fund family are fixed costs and,
consequently, the cost to the Exchange of servicing any incremental
fund are smaller when that fund is part of a larger fund family than
when it is part of a smaller fund family.
The Exchange does not believe that the proposed fee discount will
have any effect on its ability to fund its regulatory activities.
The Exchange also proposes to amend Section 902.04 to remove
obsolete references to fee levels that are no longer applicable.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Exchange Act,\5\ in general, and furthers the
objectives of Sections 6(b)(4) \6\ of the Exchange Act, in particular,
in that it is designed to provide for the equitable allocation of
reasonable dues, fees, and other charges and is not designed to permit
unfair discrimination among its members and issuers and other persons
using its facilities. The Exchange also believes that the proposed rule
change is consistent with Section 6(b)(5) of the Exchange Act, 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.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that the proposed rule change is consistent
with Sections 6(b)(4) and 6(b)(5) of the Exchange Act in that it
represents an equitable allocation of fees and does not unfairly
discriminate among listed companies. In particular, the Exchange
believes the proposal represents an equitable allocation of fees and is
not unfairly discriminatory because it would create an effective fee
rate for a group of smaller fund families that is more consistent with
the effective fee rate paid by larger fund families that benefit from
the fee cap provision of the rule. The proposed amendment would also
promote competition, as it would lower the costs of operating a fund
for many issuers and will therefore incentivize those issuers to create
new funds.
The Exchange believes that it is not unfairly discriminatory to
provide a greater discount for fund families listing more than [sic] 20
funds than for smaller fund families, as a significant amount of the
costs of conducting the Exchange's regulatory activities and providing
client services with respect to a fund family are fixed costs and,
consequently, the cost to the Exchange of servicing any incremental
fund are smaller when that fund is part of a larger fund family than
when it is part of a smaller fund family.

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 Exchange Act. The proposed rule
change is designed to provide a group of smaller issuers of closed-end
funds with an effective fee rate that is closer to the effective rate
charged to larger issuers that benefit from the rule's fee cap
provision. The market for listing services is extremely competitive.
Each listing exchange has a different fee schedule that applies to
issuers seeking to list securities on its exchange. Issuers have the
option to list their securities on these alternative venues based on
the fees charged and the value provided by each listing. Because
issuers have a choice to list their securities on a different national
securities exchange, the Exchange does not believe that the proposed
fee change imposes a burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

No written comments were solicited or received with respect to the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \7\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \8\ thereunder, because it establishes a due, fee, or other charge
imposed by the Exchange.
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \9\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\9\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

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

Electronic Comments

Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSE-2016-80 on the subject line.

Paper Comments

Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2016-80. This file

[[Page 90895]]

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 Web site (http://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 Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSE-2016-80, and should be
submitted on or before January 5, 2017.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2016-30079 Filed 12-14-16; 8:45 am]
BILLING CODE 8011-01-P

90894 Federal Register / Vol. 81, No. 241 / Thursday, December 15, 2016 / Notices

and would otherwise have paid fees far that the proposed rule change is venues based on the fees charged and
in excess of $1,000,000. Therefore, the consistent with Section 6(b)(5) of the the value provided by each listing.
effective discount they receive to their Exchange Act, in particular in that it is Because issuers have a choice to list
uncapped fees typically exceeds 50%. designed to promote just and equitable their securities on a different national
There are a number of other, smaller principles of trade, to foster cooperation securities exchange, the Exchange does
fund families that have 20 or more and coordination with persons engaged not believe that the proposed fee change
funds listed on the Exchange whose in regulating, clearing, settling, imposes a burden on competition.
aggregate fees approach but do not processing information with respect to,
C. Self-Regulatory Organization’s
exceed $1,000,000 and who therefore do and facilitating transactions in
Statement on Comments on the
not benefit from the cap. Consequently, securities, to remove impediments to
Proposed Rule Change Received From
those fund families pay fees at a far and perfect the mechanism of a free and
Members, Participants, or Others
higher effective fee rate than is paid by open market and a national market
those fund families whose fees are system, and, in general, to protect No written comments were solicited
capped. The purpose of the proposed investors and the public interest. or received with respect to the proposed
50% discount is to significantly reduce The Exchange believes that the rule change.
this disparity. proposed rule change is consistent with III. Date of Effectiveness of the
The Exchange believes that a Sections 6(b)(4) and 6(b)(5) of the Proposed Rule Change and Timing for
reduction in the effective fee rate paid Exchange Act in that it represents an Commission Action
by fund families that have 20 or more equitable allocation of fees and does not
listed funds, but do not benefit from the unfairly discriminate among listed The foregoing rule change is effective
cap, would create an incentive for them companies. In particular, the Exchange upon filing pursuant to Section
to initiate new funds, increasing believes the proposal represents an 19(b)(3)(A) 7 of the Act and
competition in the industry. In equitable allocation of fees and is not subparagraph (f)(2) of Rule 19b–4 8
particular, the Exchange believes that unfairly discriminatory because it thereunder, because it establishes a due,
the proposed amendment may create an would create an effective fee rate for a fee, or other charge imposed by the
incentive for fund families to create a group of smaller fund families that is Exchange.
more consistent with the effective fee At any time within 60 days of the
greater number of smaller funds than is
rate paid by larger fund families that filing of such proposed rule change, the
currently the case, as smaller funds are
benefit from the fee cap provision of the Commission summarily may
particularly concerned about limiting
rule. The proposed amendment would temporarily suspend such rule change if
their operating costs.
The Exchange believes that it is not also promote competition, as it would it appears to the Commission that such
unfairly discriminatory to provide a lower the costs of operating a fund for action is necessary or appropriate in the
greater discount for fund families listing many issuers and will therefore public interest, for the protection of
more than [sic] 20 funds than for incentivize those issuers to create new investors, or otherwise in furtherance of
funds. the purposes of the Act. If the
smaller fund families, as a significant
The Exchange believes that it is not Commission takes such action, the
amount of the costs of conducting the
unfairly discriminatory to provide a Commission shall institute proceedings
Exchange’s regulatory activities and
greater discount for fund families listing under Section 19(b)(2)(B) 9 of the Act to
providing client services with respect to
more than [sic] 20 funds than for determine whether the proposed rule
a fund family are fixed costs and,
smaller fund families, as a significant change should be approved or
consequently, the cost to the Exchange
amount of the costs of conducting the disapproved.
of servicing any incremental fund are
smaller when that fund is part of a Exchange’s regulatory activities and IV. Solicitation of Comments
larger fund family than when it is part providing client services with respect to
a fund family are fixed costs and, Interested persons are invited to
of a smaller fund family. submit written data, views, and
The Exchange does not believe that consequently, the cost to the Exchange
of servicing any incremental fund are arguments concerning the foregoing,
the proposed fee discount will have any including whether the proposed rule
effect on its ability to fund its regulatory smaller when that fund is part of a
larger fund family than when it is part change is consistent with the Act.
activities. Comments may be submitted by any of
The Exchange also proposes to amend of a smaller fund family.
the following methods:
Section 902.04 to remove obsolete B. Self-Regulatory Organization’s
references to fee levels that are no Electronic Comments
Statement on Burden on Competition
longer applicable. • Use the Commission’s Internet
The Exchange does not believe that
2. Statutory Basis comment form (http://www.sec.gov/
the proposed rule change will impose
rules/sro.shtml); or
The Exchange believes that the any burden on competition that is not • Send an email to rule-comments@
proposed rule change is consistent with necessary or appropriate in furtherance sec.gov. Please include File Number SR–
Section 6(b) of the Exchange Act,5 in of the purposes of the Exchange Act. NYSE–2016–80 on the subject line.
general, and furthers the objectives of The proposed rule change is designed to
Sections 6(b)(4) 6 of the Exchange Act, provide a group of smaller issuers of Paper Comments
in particular, in that it is designed to closed-end funds with an effective fee • Send paper comments in triplicate
provide for the equitable allocation of rate that is closer to the effective rate to Brent J. Fields, Secretary, Securities
reasonable dues, fees, and other charges charged to larger issuers that benefit and Exchange Commission, 100 F Street
rmajette on DSK2TPTVN1PROD with NOTICES

and is not designed to permit unfair from the rule’s fee cap provision. The NE., Washington, DC 20549–1090.
discrimination among its members and market for listing services is extremely All submissions should refer to File
issuers and other persons using its competitive. Each listing exchange has a Number SR–NYSE–2016–80. This file
facilities. The Exchange also believes different fee schedule that applies to
issuers seeking to list securities on its 7 15 U.S.C. 78s(b)(3)(A).
5 15 U.S.C. 78f(b). exchange. Issuers have the option to list 8 17 CFR 240.19b–4(f)(2).
6 15 U.S.C. 78f(b)(4). their securities on these alternative 9 15 U.S.C. 78s(b)(2)(B).

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Federal Register / Vol. 81, No. 241 / Thursday, December 15, 2016 / Notices 90895

number should be included on the 30, 2016, Bats BZX Exchange, Inc. (the June 30, 2017, and to provide revised
subject line if email is used. To help the ‘‘Exchange’’ or ‘‘BZX’’) filed with the dates for adding replacement issues to
Commission process and review your Securities and Exchange Commission the Pilot Program. The Exchange
comments more efficiently, please use (‘‘Commission’’) the proposed rule proposes that any Pilot Program issues
only one method. The Commission will change as described in Items I, II and III that have been delisted may be replaced
post all comments on the Commission’s below, which Items have been prepared on the second trading day following
Internet Web site (http://www.sec.gov/ by the Exchange. The Exchange has January 1, 2017. The replacement issues
rules/sro.shtml). Copies of the designated this proposal as a ‘‘non- will be selected based on trading
submission, all subsequent controversial’’ proposed rule change activity for the most recent six month
amendments, all written statements pursuant to Section 19(b)(3)(A) of the period excluding the month
with respect to the proposed rule Act 3 and Rule 19b–4(f)(6)(iii) immediately preceding the replacement
change that are filed with the thereunder,4 which renders it effective (i.e., beginning June 1, 2016, and ending
Commission, and all written upon filing with the Commission. The November 30, 2016).
communications relating to the Commission is publishing this notice to The Exchange represents that the
proposed rule change between the solicit comments on the proposed rule Exchange has the necessary system
Commission and any person, other than change from interested persons. capacity to continue to support
those that may be withheld from the operation of the Penny Pilot. The
I. Self-Regulatory Organization’s Exchange believes the benefits to public
public in accordance with the
Statement of the Terms of Substance of customers and other market participants
provisions of 5 U.S.C. 552, will be
the Proposed Rule Change who will be able to express their true
available for Web site viewing and
printing in the Commission’s Public The Exchange filed a proposal to prices to buy and sell options have been
Reference Room, 100 F Street NE., extend through June 30, 2017, the Penny demonstrated to outweigh the increase
Washington, DC 20549 on official Pilot Program (‘‘Penny Pilot’’) in options in quote traffic.
business days between the hours of classes in certain issues (‘‘Pilot
Program’’) previously approved by the 2. Statutory Basis
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for Commission.5 The text of the proposed The Exchange believes that its
inspection and copying at the principal rule change is available at the proposal is consistent with the
office of the Exchange. All comments Exchange’s Web site at requirements of the Act and the rules
received will be posted without change; www.batstrading.com, at the principal and regulations thereunder that are
the Commission does not edit personal office of the Exchange, and at the applicable to a national securities
identifying information from Commission’s Public Reference Room. exchange, and, in particular, with the
submissions. You should submit only requirements of Section 6(b) of the Act.6
II. Self-Regulatory Organization’s
information that you wish to make Statement of the Purpose of, and In particular, the proposal is consistent
available publicly. All submissions Statutory Basis for, the Proposed Rule with Section 6(b)(5) of the Act 7 because
should refer to File Number SR–NYSE– Change it would promote just and equitable
2016–80, and should be submitted on or principles of trade, remove
before January 5, 2017. In its filing with the Commission, the impediments to, and perfect the
Exchange included statements mechanism of, a free and open market
For the Commission, by the Division of concerning the purpose of and basis for
Trading and Markets, pursuant to delegated and a national market system. The
authority.10
the proposed rule change and discussed Exchange believes that the Pilot
any comments it received on the Program promotes just and equitable
Eduardo A. Aleman,
proposed rule change. The text of these principles of trade by enabling public
Assistant Secretary. statements may be examined at the
[FR Doc. 2016–30079 Filed 12–14–16; 8:45 am]
customers and other market participants
places specified in Item IV below. The to express their true prices to buy and
BILLING CODE 8011–01–P Exchange has prepared summaries, set sell options. Accordingly, the Exchange
forth in Sections A, B, and C below, of believes that the proposal is consistent
the most significant parts of such with the Act because it will allow the
SECURITIES AND EXCHANGE statements.
COMMISSION Exchange to extend the Pilot Program
A. Self-Regulatory Organization’s prior to its expiration on December 31,
[Release No. 34–79523; File No. SR– Statement of the Purpose of, and 2016. The Exchange notes that this
BatsBZX–2016–84)
Statutory Basis for, the Proposed Rule proposal does not propose any new
Self-Regulatory Organizations; Bats Change policies or provisions that are unique or
BZX Exchange, Inc.; Notice of Filing unproven, but instead relates to the
1. Purpose continuation of an existing program that
and Immediate Effectiveness of a
Proposed Rule Change to Rule 21.5 of The purpose of this filing is to extend operates on a pilot basis.
Bats BZX Exchange, Inc. To Extend the Penny Pilot, which was previously
approved by the Commission, through B. Self-Regulatory Organization’s
Through June 30, 2017, the Penny Pilot Statement on Burden on Competition
Program in Options Classes in Certain 3 15 U.S.C. 78s(b)(3)(A). The Exchange does not believe that
Issues 4 17 CFR 240.19b–4(f)(6)(iii). the proposed rule change will impose
5 The rules of BZX Options, including rules
December 9, 2016. any burden on competition that is not
applicable to BZX Options’ participation in the
Pursuant to Section 19(b)(1) of the necessary or appropriate in furtherance
rmajette on DSK2TPTVN1PROD with NOTICES

Penny Pilot, were approved on January 26, 2010.
Securities Exchange Act of 1934 (the See Securities Exchange Act Release No. 61419 of the purposes of the Act. In this
‘‘Act’’),1 and Rule 19b–4 thereunder,2 (January 26, 2010), 75 FR 5157 (February 1, 2010) regard, the Exchange notes that the rule
notice is hereby given that on November (SR–BATS–2009–031). BZX Options commenced change is being proposed in order to
operations on February 26, 2010. The Penny Pilot
was most recently extended for BZX Options
continue the Pilot Program, which is a
10 17 CFR 200.30–3(a)(12). through December 31, 2016. See Securities
1 15 U.S.C. 78s(b)(1). 6 15 U.S.C. 78f(b).
Exchange Act Release No. 78032 (June 10, 2016), 81
2 17 CFR 240.19b–4. FR 39307 (June 16, 2016) (SR–BatsBZX–2016–23). 7 15 U.S.C. 78f(b)(5).

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Document Created: 2016-12-15 01:11:04
Document Modified: 2016-12-15 01:11:04

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		81 FR 90893