82 FR 46575 - Self-Regulatory Organizations; NYSE American LLC; Order Approving Proposed Rule Change To Amend the Complimentary Products and Services Available to Certain Eligible New Listings Pursuant to Section 146 of the NYSE American Company Guide

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 192 (October 5, 2017)

Page Range		46575-46576
FR Document		2017-21415
Federal Register, Volume 82 Issue 192 (Thursday, October 5, 2017)
[Federal Register Volume 82, Number 192 (Thursday, October 5, 2017)]
[Notices]
[Pages 46575-46576]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-21415]



[[Page 46575]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81783; File No. SR-NYSEAMER-2017-05]


Self-Regulatory Organizations; NYSE American LLC; Order Approving 
Proposed Rule Change To Amend the Complimentary Products and Services 
Available to Certain Eligible New Listings Pursuant to Section 146 of 
the NYSE American Company Guide

September 29, 2017.

I. Introduction

    On August 11, 2017, NYSE American LLC (the ``Exchange'' or ``NYSE 
American'') filed with the Securities and Exchange Commission 
(``Commission'') pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amend Section 146 of the NYSE American Company 
Guide (the ``Company Guide'') to provide that companies initially 
listed on or after October 1, 2017 will not be eligible to receive 
corporate governance tools under the Exchange's current services 
offering. The proposed rule change was published for comment in the 
Federal Register on August 29, 2017.\3\ No comment letters were 
received in response to the Notice. This order approves the proposed 
rule change.
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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. 81470 (August 23, 
2017), 82 FR 41075 (``Notice'').
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II. Description of the Proposed Rule Change

    The Exchange has proposed to amend Section 146 of the Company Guide 
to provide that companies initially listed on or after October 1, 2017 
will not be eligible to receive the corporate governance tools 
described under the Exchange's current services offering.
    As set forth in Section 146 of the Company Guide, the Exchange 
currently provides Eligible New Listings \4\ with complimentary Web-
hosting products and services (with a commercial value of approximately 
$16,000 annually), web-casting services (with a commercial value of 
approximately $6,500 annually), whistleblower hotline services (with a 
commercial value of approximately $4,000 annually), news distribution 
products and services (with a commercial value of approximately $20,000 
annually), and corporate governance tools (with a commercial value of 
approximately $15,000 annually) for a period of 24 calendar months.\5\ 
According to the Exchange, companies that qualify as Eligible New 
Listings have generally not been interested in utilizing the corporate 
governance tools available as part of the Exchange's services 
offering.\6\ The Exchange has therefore proposed to discontinue the 
corporate governance tools portion of its service offering for 
companies that list on or after October 1, 2017.\7\ The Exchange 
proposal states, however, that any Eligible New Listing that lists 
prior to October 1, 2017 will continue to be able to access the 
corporate governance tools for a period of 24 months to the extent 
their eligibility permits under current Section 146 of the Company 
Guide.\8\
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    \4\ For the purposes of Section 146, the term ``Eligible New 
Listing'' means: (i) Any U.S. company that lists common stock on the 
Exchange for the first time and any non-U.S. company that lists an 
equity security on the Exchange under Section 101 or 110 of the 
Company Guide for the first time, regardless of whether such U.S. or 
non-U.S. company conducts an offering; (ii) any U.S. or non- U.S. 
company that transfers its listing of common stock or equity 
securities, respectively, to the Exchange from another national 
securities exchange; and (iii) any U.S. or non-U.S. company emerging 
from a bankruptcy, spinoff (where a company lists new shares in the 
absence of a public offering), and carve-out (where a company carves 
out a business line or division, which then conducts a separate 
initial public offering).
    \5\ See Section 146 of the Company Guide.
    \6\ See Notice, supra note 3, at 41076.
    \7\ See id.
    \8\ See id.
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III. Discussion and Commission Findings

    The Commission has carefully reviewed the proposed rule change and 
finds that it is consistent with the requirements of Section 6 of the 
Act.\9\ Specifically, the Commission finds that the proposal is 
consistent with Sections 6(b)(4) \10\ and 6(b)(5) of the Act \11\ in 
particular, in that the proposed rule is designed to provide for the 
equitable allocation of reasonable dues, fees, and other charges among 
Exchange members, issuers, and other persons using the Exchange's 
facilities, and is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers. Moreover, the Commission 
believes that the proposed rule change is consistent with Section 
6(b)(8) of the Act \12\ in that it does not impose any burden on 
competition not necessary or appropriate in furtherance of the purposes 
of the Act.
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    \9\ 15 U.S.C. 78f. 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).
    \10\ 15 U.S.C. 78f(b)(4).
    \11\ 15 U.S.C. 78f(b)(5).
    \12\ 15 U.S.C. 78f(b)(8).
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    The Commission believes that it is consistent with the Act for the 
Exchange to modify its existing complimentary service offerings to no 
longer offer corporate governance tools to Eligible New Listings that 
list on or after October 1, 2017. The Exchange states that Eligible New 
Listings have generally not been interested in utilizing the corporate 
governance tools offered by the Exchange.\13\ The Commission believes 
it is reasonable and consistent with the Act for the Exchange to 
discontinue such services if it believes they are not being utilized. 
The Commission notes that the effect of the proposal is to reduce the 
commercial value of offerings to Eligible New Listings by $15,000 
annually, which is the value of the corporate governance tools as 
currently set forth in Section 146 of the Company Guide. The value of 
the remaining offerings to Eligible New Listings will continue to 
remain transparent under Section 146 of the Company Guide. The 
Commission believes that by accurately describing in the Company Guide 
the current products and services available to listed companies and the 
current values of those products and services, the Exchange is 
maintaining transparency with respect to its rules and the fees 
applicable to such companies. This helps to ensure that individual 
listed companies are not given specially negotiated packages of 
products and services to list or remain listed that would raise unfair 
discrimination issues under the Act.\14\
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    \13\ See Notice, supra note 3, at 41076.
    \14\ See Securities Exchange Act Release No. 77401 (March 17, 
2016), 81 FR 15585 (March 23, 2016) (SR-NYSEMKT-2016-12) (order 
approving the initial complimentary products and services provided 
by the Exchange to Eligible New Listings).
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    Under the proposal, Eligible New Listings that list prior to 
October 1, 2017 will remain eligible to receive all the complimentary 
products and services currently provided by the Exchange, including the 
corporate governance tools. The Commission notes that Section 6(b)(5) 
of the Act does not require that all issuers be treated the same; 
rather, the Act requires that the rules of an exchange not unfairly 
discriminate between issuers. The Exchange states that it believes it 
is not unfairly discriminatory to continue to offer corporate 
governance tools to companies listed prior to October 1, 2017, as that 
benefit was part of the services offering that was available at the 
time of such companies' initial listing and may have had some influence 
over their listing decisions.\15\
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    \15\ See Notice, supra note 3, at 41076.

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[[Page 46576]]

    The Commission believes that the Exchange has provided a sufficient 
basis for its different treatment of Eligible New Listings that list 
prior to October 1, 2017 and that this portion of the Exchange's 
proposal meets the requirements of the Act. In making this 
determination, the Commission notes that the provision of services 
under Section 146 of the Company Guide is for a limited duration and 
that the Exchange has provided a reasonable basis for deciding to treat 
Eligible New Listings that list prior to October 1, 2017 differently 
from other listed companies going forward. The Commission notes that at 
the time such companies listed, they had an expectation, if they 
intended to utilize the corporate governance tools, to be able to do so 
for the entire 24 month period as set forth in the current rule. To 
allow such companies listed prior to October 1, 2017 to finish 
utilizing corporate governance tools for any remainder of their 24 
month period appears to be reasonable, equitable, and not unfairly 
discriminatory. In addition, the Commission notes that the October 1, 
2017 date, to curtail the offering of corporate governance tools for 
Eligible New Listings that list on or after that date, was transparent 
and published for comment in advance of approval by the Commission in 
the order discussed herein. As noted above, the Commission received no 
comments on the proposal. Finally, the Commission has also previously 
approved proposals providing different services to newly-listed 
issuers, including those transferring their listing from another 
exchange, and has found this consistent with Sections 6(b)(4) and 
6(b)(5) of the Act.\16\
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    \16\ See Securities Exchange Act Release Nos. 76127 (October 9, 
2015), 80 FR 62584 (October 16, 2015) (order approving SR-NYSE-2015-
36); 72669 (July 24, 2014), 79 FR 44234 (July 30, 2014) (order 
approving SR-NASDAQ-2014-058); 65963 (December 15, 2011), 76 FR 
79262 (December 21, 2011) (order approving SR-NASDAQ-2011-122).
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    Accordingly, the Commission finds that the proposed rule change is 
consistent with the requirements of the Act and, in particular, that 
the products and services provided under Section 146 of the Company 
Guide are equitably allocated among issuers consistent with Section 
6(b)(4) of the Act, the proposed rule change does not unfairly 
discriminate among issuers consistent with Section 6(b)(5) of the Act, 
and the proposed rule change is appropriate and consistent with Section 
6(b)(8) of the Act in that it does not impose any burden on competition 
not necessary or appropriate in furtherance of the purposes of the 
Act.\17\
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    \17\ 15 U.S.C. 78f(b)(4), (5), and (8).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\18\ that the proposed rule change (SR-NYSEAMER-2017-05), be, and 
hereby is, approved.
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    \18\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-21415 Filed 10-4-17; 8:45 am]
BILLING CODE 8011-01-P
46576 Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Notices

The Commission believes that the appropriate in furtherance of the II. Self-Regulatory Organization’s
Exchange has provided a sufficient basis purposes of the Act.17 Statement of the Purpose of, and
for its different treatment of Eligible Statutory Basis for, the Proposed Rule
IV. Conclusion
New Listings that list prior to October Change
1, 2017 and that this portion of the It is therefore ordered, pursuant to In its filing with the Commission, the
Exchange’s proposal meets the Section 19(b)(2) of the Act,18 that the Exchange included statements
requirements of the Act. In making this proposed rule change (SR–NYSEAMER– concerning the purpose of and basis for
determination, the Commission notes 2017–05), be, and hereby is, approved. the proposed rule change and discussed
that the provision of services under For the Commission, by the Division of any comments it received on the
Section 146 of the Company Guide is for Trading and Markets, pursuant to delegated proposed rule change. The text of these
a limited duration and that the authority.19 statements may be examined at the
Exchange has provided a reasonable Eduardo A. Aleman, places specified in Item IV below. The
basis for deciding to treat Eligible New Assistant Secretary. Exchange has prepared summaries, set
Listings that list prior to October 1, 2017 [FR Doc. 2017–21415 Filed 10–4–17; 8:45 am] forth in sections A, B, and C below, of
differently from other listed companies BILLING CODE 8011–01–P
the most significant aspects of such
going forward. The Commission notes statements.
that at the time such companies listed, A. Self-Regulatory Organization’s
they had an expectation, if they SECURITIES AND EXCHANGE Statement of the Purpose of, and
intended to utilize the corporate COMMISSION Statutory Basis for, the Proposed Rule
governance tools, to be able to do so for Change
the entire 24 month period as set forth [Release No. 34–81772; File No. SR–ISE–
in the current rule. To allow such 1. Purpose
2017–84]
companies listed prior to October 1, The Block Order Mechanism is a
2017 to finish utilizing corporate Self-Regulatory Organizations; Nasdaq process by which a member can obtain
governance tools for any remainder of ISE, LLC; Notice of Filing and liquidity for the execution of block-
their 24 month period appears to be Immediate Effectiveness of Proposed sized orders,3 defined as orders for fifty
reasonable, equitable, and not unfairly Rule Change To Amend Rule 716(c) on contracts or more.4 When an order is
discriminatory. In addition, the the Block Order Mechanism entered in the Block Order Mechanism,
Commission notes that the October 1, that order is exposed to members who
September 29, 2017.
2017 date, to curtail the offering of are given an opportunity to respond
corporate governance tools for Eligible Pursuant to Section 19(b)(1) of the with the prices and sizes at which they
New Listings that list on or after that Securities Exchange Act of 1934 would be willing to trade with the
date, was transparent and published for (‘‘Act’’),1 and Rule 19b–4 thereunder,2 block-sized order.5 The exposure period
comment in advance of approval by the notice is hereby given that on is designated by the Exchange via
Commission in the order discussed September 18, 2017, Nasdaq ISE, LLC circular, but must be no less than 100
herein. As noted above, the Commission (‘‘ISE’’ or ‘‘Exchange’’) filed with the milliseconds and no more than 1
Securities and Exchange Commission second.6 At the conclusion of the
received no comments on the proposal.
(‘‘Commission’’) the proposed rule exposure period, either an execution
Finally, the Commission has also
change as described in Items I and II, will occur at a single block execution
previously approved proposals
below, which Items have been prepared price,7 or the order will be cancelled.8
providing different services to newly-
by the Exchange. The Commission is The purpose of the proposed rule
listed issuers, including those
publishing this notice to solicit change is to amend Rule 716(c) to more
transferring their listing from another comments on the proposed rule change accurately describe the allocation
exchange, and has found this consistent from interested persons. methodology used in the Block Order
with Sections 6(b)(4) and 6(b)(5) of the Mechanism, add language regarding
Act.16 I. Self-Regulatory Organization’s
how the block execution price is
Accordingly, the Commission finds Statement of the Terms of Substance of
determined, and describe the content of
that the proposed rule change is the Proposed Rule Change the broadcast message disseminated to
consistent with the requirements of the The Exchange proposes to amend members upon the entry of an order into
Act and, in particular, that the products Rule 716(c) to more accurately describe the mechanism. The Exchange believes
and services provided under Section the allocation methodology used in the that these changes will increase
146 of the Company Guide are equitably Block Order Mechanism, add language transparency around the operation of
allocated among issuers consistent with regarding how the block execution price the Block Order Mechanism to the
Section 6(b)(4) of the Act, the proposed is determined, and describe the content benefit of members and market
rule change does not unfairly of the broadcast message disseminated participants.
discriminate among issuers consistent to members upon the entry of an order Currently, Rule 716(c)(2)(ii) provides
with Section 6(b)(5) of the Act, and the into the mechanism. that Responses, quotes, and Professional
proposed rule change is appropriate and The text of the proposed rule change 3 See Rule 716(c).
consistent with Section 6(b)(8) of the is available on the Exchange’s Web site 4 See Rule 716(a).
Act in that it does not impose any at www.ise.com, at the principal office 5 A ‘‘Response’’ is an electronic message that is
burden on competition not necessary or of the Exchange, and at the
ethrower on DSK3G9T082PROD with NOTICES

sent by members in response to a broadcast
Commission’s Public Reference Room. message. See Rule 716(b).
16 See Securities Exchange Act Release Nos. 6 See Supplementary Material .04 to Rule 716.
7 Responses and orders and quotes on the order
76127 (October 9, 2015), 80 FR 62584 (October 16, 17 15 U.S.C. 78f(b)(4), (5), and (8). book at the time the block order is executed that
2015) (order approving SR–NYSE–2015–36); 72669 18 15
(July 24, 2014), 79 FR 44234 (July 30, 2014) (order U.S.C. 78s(b)(2). are priced better than the block execution price are
19 17 CFR 200.30–3(a)(12).
approving SR–NASDAQ–2014–058); 65963 executed at the block execution price. See Rule
1 15 U.S.C. 78s(b)(1). 716(c)(2)(i).
(December 15, 2011), 76 FR 79262 (December 21,
2011) (order approving SR–NASDAQ–2011–122). 2 17 CFR 240.19b–4. 8 See Rule 716(c)(2).

VerDate Sep<11>2014 19:52 Oct 04, 2017 Jkt 244001 PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 E:\FR\FM\05OCN1.SGM 05OCN1
Document Created: 2017-10-05 00:53:21
Document Modified: 2017-10-05 00:53:21
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		82 FR 46575