[Federal Register Volume 85, Number 59 (Thursday, March 26, 2020)]
[Notices]
[Pages 17136-17138]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-06303]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88441; File No. SR-NYSE-2020-21]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Suspend Until June 30, 2020 the Application of Its Continued Listing 
Requirement With Respect to Global Market Capitalization

March 20, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 19, 2020, New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. 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\ 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 suspend until June 30, 2020 the 
application of its continued listing requirement that companies must 
maintain an average global market capitalization over a consecutive 30 
trading-day period of at least $15 million (the ``Market Capitalization 
Standard''). The proposed rule change is available on the Exchange's 
website at www.nyse.com, at the principal office of the Exchange, and 
at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The U.S. and global equities markets have experienced unprecedented 
market-wide declines as a result of the ongoing spread of COVID-19. As 
a consequence, since the commencement of the current market turbulence 
in the last week of February 2020, the Exchange has experienced an 
unusually high number (as compared to historical levels) of listed 
companies that are in imminent danger of immediate suspension and 
delisting under Section 802.01B of the Manual for failure to comply 
with the Market Capitalization Standard.\3\
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    \3\ Section 802.01B of the Manual states that ``the Exchange 
will promptly initiate suspension and delisting procedures with 
respect to a company (including the issuer of an Equity Investment 
Tracking Stock) that is listed under any financial standard set out 
in Sections 102.01C or 103.01B if a company is determined to have 
average global market capitalization over a consecutive 30 trading-
day period of less than $15,000,000, regardless of the original 
standard under which it listed. A company is not eligible to follow 
the procedures outlined in Sections 802.02 and 802.03 with respect 
to this criterion.''
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    In response to the conditions described above, the Exchange 
proposes

[[Page 17137]]

to suspend, until June 30, 2020, the application of the Market 
Capitalization Standard. The extreme volatility and the precipitous 
decline in trading prices of many securities experienced in the U.S. 
and global equities markets could lead to a high number of securities 
being immediately suspended from trading and delisted during a short 
period of highly volatile markets. The proposed suspension of the 
Market Capitalization Standard until June 30, 2020 will provide 
temporary relief to these companies and their shareholders in response 
to these extraordinary market conditions.
    Currently, when a company is identified as being noncompliant with 
the Market Capitalization Standard, trading in its securities is 
immediately suspended and the company is subject to delisting. Such a 
company that is noncompliant with the Market Capitalization Standard is 
not eligible to submit a plan to regain compliance pursuant to Sections 
802.02 and 802.03 of the Manual. However, while its securities are 
suspended from trading, such company may appeal its delisting to a 
Committee of the Board of Directors of the Exchange. The proposed 
suspension of the Market Capitalization Standard will not affect the 
status of any company that has been formally notified for noncompliance 
with the Market Capitalization Standard and is currently in the 
Exchange's delisting appeal process prior to the date of this filing.
    Instead, under the proposed suspension of the Exchange's Market 
Capitalization Standard, companies would not be notified of new events 
of noncompliance with the Market Capitalization Standard during the 
suspension period.\4\ Following the temporary rule suspension, any new 
events of noncompliance with the Exchange's Market Capitalization 
Standard would be determined based on a consecutive 30 trading-day 
period commencing on or after July 1, 2020.
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    \4\ A company would continue to be subject to delisting for 
failure to comply with other listing requirements.
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    The Exchange would be able to implement the proposed rule change 
immediately upon effectiveness of this proposed rule change.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\5\ in general, and furthers the objectives of Section 6(b)(5) of 
the Act,\6\ in particular, in that it is designed to prevent fraudulent 
and manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in 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 the public 
interest and the interests of investors, and because it is not designed 
to permit unfair discrimination between customers, issuers, brokers, or 
dealers.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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    As a result of uncertainty related to the ongoing spread of the 
COVID-19 virus, the prices of securities listed on U.S. exchanges are 
experiencing rapid and significant declines. The proposed rule change 
is designed to reduce uncertainty regarding the ability of certain 
companies to remain listed on the NYSE during the current highly 
unusual market conditions, thereby protecting investors, facilitating 
transactions in securities, and removing an impediment to a free and 
open market. All companies listed on the Exchange that fall below the 
Market Capitalization Standard as of the time of filing of this 
proposal would be eligible to take advantage of the proposed suspension 
of the Market Capitalization Standard.

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

    The Exchange does not believe that the proposed rule change would 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed rule change is 
not designed to address any competitive issues but rather is designed 
to reduce uncertainty for certain companies and their shareholders 
regarding the ability of certain securities to remain listed on the 
NYSE during the current highly unusual market conditions.

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 Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Commission has waived the five business day notification requirement 
for this proposed rule change.
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    A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally 
does not become operative for 30 days after the date of the filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\12\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposed 
rule change may become operative immediately upon filing.
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Exchange stated that the proposed rule change is designed to 
respond to the unprecedented uncertainty and resulting market declines 
related to the global spread of the COVID-19 virus. In support of its 
request to waive the 30-day operative delay, the Exchange stated that 
the markets have already triggered four Level 1 Market Wide Circuit 
Breaker Halts in one week, which is unprecedented. According to the 
Exchange, given the ongoing uncertainty relating to the global spread 
of the COVID-19 virus, the Exchange has no way of knowing whether there 
will be additional market declines that would result in large numbers 
of companies unexpectedly falling below the Market Capitalization 
Standard in the immediate future. The Exchange stated that if that were 
to occur, such companies would be subject to immediate suspension and 
delisting. The proposal would suspend, until June 30, 2020, the 
application of the Market Capitalization Standard for all listed 
companies that fall below this standard on or after the effective date 
of this filing. The Exchange stated that waiver of the 30-day operative 
delay would avoid the immediate suspension and delisting of companies 
falling below the

[[Page 17138]]

Market Capitalization Standard as of a result of these unprecedented 
market conditions, and reduce the level of uncertainty of listed 
issuers and their investors with respect to their continued listing 
status. For these reasons, the Commission believes that waiver of the 
30-day operative delay is consistent with the protection of investors 
and the public interest. Accordingly, the Commission hereby waives the 
30-day operative delay and designates the proposal operative upon 
filing.\13\
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    \13\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule change's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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) \14\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \14\ 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-NYSE-2020-21 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2020-21. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (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 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 10:00 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSE-2020-21, and should be submitted on 
or before April 16, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-06303 Filed 3-25-20; 8:45 am]
 BILLING CODE 8011-01-P