[Federal Register Volume 82, Number 72 (Monday, April 17, 2017)]
[Notices]
[Pages 18189-18191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-07639]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80433; File No. SR-NYSEMKT-2017-19]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Amending Certain of the 
Initial and Annual Listing Fee Provisions Included in the NYSE MKT 
Company Guide

April 11, 2017.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on March 31, 2017, NYSE MKT LLC (the ``Exchange'' or ``NYSE 
MKT'') filed with the Securities and Exchange Commission (the 
``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 certain of the initial and annual 
listing fee provisions included in the NYSE MKT Company Guide (the 
``Company Guide''). The proposed 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 certain of the initial and annual 
listing fee provisions included in the Company Guide.
    The Exchange proposes to amend Section 140 to provide an exemption 
from the initial listing fees for any company listing within 36 months 
of emergence from bankruptcy and that has not had a security listed on 
a national securities exchange during such period. The Exchange 
believes that it is reasonable to waive the initial listing fees for an 
issuer listing within 36 months following emergence from bankruptcy, so 
long as such issuer has not had a security listed on a national 
securities exchange during such period, because this will incentivize 
such issuers to list their security on the Exchange, which will result 
in increased transparency and liquidity with respect to the issuer's 
security, thereby benefiting investors. In this regard, the Exchange 
notes that the issuer, like all other listing applicants, would be 
required to satisfy the Exchange's listings standards as well as the 
other governance requirements and standards that the Exchange requires 
of issuers listed on the Exchange. The Exchange believes that limiting 
the waiver to 36 months following emergence from bankruptcy is 
reasonable because, in the Exchange's opinion, it is a period of time 
that is sufficient for the issuer to proceed with its reorganization 
and meet the Exchange's qualifications for listing.
    The Exchange proposes to amend Section 141 to provide a waiver of 
annual fees in relation to the first part year of a company's listing 
if the company is transferring its listing from another national 
securities exchange. The Exchange notes that companies transferring in 
mid-year will already have paid listing fees for that year to the 
exchange on which they were previously listed and that the double 
payment the Exchange's prorated annual fee imposes on them imposes a 
significant financial burden and acts as a disincentive to 
transferring.
    The Exchange does not expect the financial impact of these two 
proposed amendments to be material in terms of the level of listing 
fees collected from issuers on the Exchange. Specifically, the Exchange 
anticipates that only a very limited number of issuers will be 
qualified and seek to list on the Exchange that are eligible to qualify 
for

[[Page 18190]]

the waivers. Accordingly, the Exchange believes that the proposed rule 
change will not impact the Exchange's resource commitment to its 
regulatory oversight of the listing process or its regulatory programs.
2. Statutory Basis
    The Exchange believes that each of the proposed amendments is 
consistent with Section 6(b) of the Exchange Act,\4\ in general, and 
furthers the objectives of Sections 6(b)(4) \5\ of the Exchange Act, in 
particular, in that they are 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 
each of the proposed amendments is consistent with Section 6(b)(5) of 
the Exchange Act, in particular in that each of them 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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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that it is reasonable to waive the initial 
listing fees for an issuer within 36 months following emergence from 
bankruptcy, so long as such issuer has not had a security listed on a 
national securities exchange during such period, because this will 
incentivize such issuers to list their security on the Exchange, which 
will result in increased transparency and liquidity with respect to the 
issuer's security, thereby benefiting investors. In this regard, the 
Exchange notes that the issuer, like all other listing applicants, 
would be required to satisfy the Exchange's listings standards as well 
as the other governance requirements and standards that the Exchange 
requires of issuers listed on the Exchange. Accordingly, the Exchange 
believes that it is in the public's interest, and the interest of the 
issuer, to provide an opportunity for the increased transparency and 
liquidity that is attendant with listing on the Exchange and therefore 
that it is reasonable to waive the Listing Fees for such issuers. The 
Exchange believes that the number of additional issuers that will 
qualify for this waiver, as proposed, will be limited. The Exchange 
also believes that limiting the waiver to 36 months following emergence 
from bankruptcy is reasonable because, in the Exchange's opinion, it is 
a period of time that is sufficient for the issuer to proceed with its 
reorganization and meet the Exchange's qualifications for listing.
    The Exchange also believes that it is reasonable to limit the 
waiver to issuers that have emerged from bankruptcy but have not yet 
had a security listed on a national securities exchange during such 
period because, if an issuer has already listed its security post-
emergence, it has already exposed itself to the requirements and 
transparency associated with listing on a national securities exchange, 
which is what the Exchange is incentivizing by waiving the initial 
listing fees. The Exchange also believes that this is equitable and not 
unfairly discriminatory because the goal of the waiver is to 
incentivize listing, and the transparency and public benefits (e.g., 
increased liquidity) that is attendant therewith. Accordingly, these 
goals would already be achieved for an issuer that has already listed 
on another national securities exchange post-emergence, and to waive 
the initial listing fees would therefore be inconsistent with the 
waiver's purpose.
    The Exchange believes that the proposed waiver of the annual fees 
for the first partial year of listing for a company transferring from 
another exchange 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. The Exchange 
believes that the proposed waiver is not unfairly discriminatory with 
respect to companies that are already listed or companies that are not 
transferring from another exchange at the time of initial listing, 
because it is narrowly designed to address the fact that companies 
transferring from other markets have already paid annual listing fees 
at their predecessor market and would otherwise have an unusually large 
aggregate listing fee burden in their first partial year of listing. 
The Exchange also expects the effect of the proposed waiver to be 
small, as it is limited to the first part year of a transfer company's 
listing and a relatively small number of companies transfer to the 
Exchange in any year.
    Overall, the Exchange believes that instances of these waivers 
being granted to issuers that apply to list on the Exchange will be 
relatively rare. Accordingly, the Exchange does not anticipate that it 
will experience any meaningful diminution in revenue as a result of the 
proposed waivers and therefore does not believe that the proposed 
waivers would in any way negatively affect its ability to continue to 
adequately fund its regulatory program or the services the Exchange 
provides to issuers.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that either of the proposed 
amendments will impose any burden on competition that is not necessary 
or appropriate in furtherance of the purposes of the Exchange Act. The 
proposed amendment to Section 140 is designed to encourage companies 
emerging from bankruptcy to list as soon as possible, providing 
investors with a transparent and liquid market in which to trade those 
companies' stocks. The proposed amendment to Section 141 is designed to 
enable all companies transferring from any other national securities 
exchange to benefit from a waiver with respect to annual fees for their 
first partial year of listing to offset the annual fees they will 
already have paid for that year on their predecessor exchange. The 
market for listings 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) \6\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \7\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 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

[[Page 18191]]

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) \8\ of the Act to determine whether the proposed rule 
change should be approved or disapproved.
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    \8\ 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 [email protected]. Please include 
File Number SR-NYSEMKT-2017-19 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-NYSEMKT-2017-19. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet 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-NYSEMKT-2017-19, and should 
be submitted on or before May 8, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-07639 Filed 4-14-17; 8:45 am]
BILLING CODE 8011-01-P