[Federal Register Volume 89, Number 4 (Friday, January 5, 2024)]
[Notices]
[Pages 817-819]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-29006]
[[Page 817]]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99256; File No. SR-NYSEAMER-2023-64]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Change To Adopt New
Section 145a of the NYSE American Company Guide
December 29, 2023.
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 December 21, 2023, NYSE American LLC (``NYSE American'' or the
``Exchange'') 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to adopt new Section 145a of the NYSE
American Company Guide (the ``Company Guide'') to implement a flat
original listing and annual fee for Acquisition Companies (as defined
below). 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 Exchange proposes to adopt new Section 145a of the Company
Guide to implement a flat original listing and annual fee for companies
that are listed on the Exchange pursuant to Sec. 119 (Listing of
Companies Whole Business Plan is to Complete One or More Acquisitions)
of the Company Guide (``Acquisition Companies''). The proposed changes
will take effect from the beginning of the calendar year commencing on
January 1, 2024.
The Exchange currently charges Acquisition Companies original and
annual listing fees based on a tiered fee schedule that is applicable
to companies listing equity securities on the Exchange. The original
and annual listing fees are calculated based on shares outstanding.\3\
Commencing January 1, 2024, the Exchange proposes to charge Acquisition
Companies a flat original and annual listing fee of $85,000.
---------------------------------------------------------------------------
\3\ See Sec. 140 (Original Listing Fees) and Sec. 141 (Annual
Fees) of the Company Guide. The Exchange currently charges original
and annual listing fees on a tiered basis, based on the number of
shares outstanding. With respect to original listing fees, issuers
currently pay $50,000 if they have less than 5,000,000 shares
outstanding, $55,000 if they have 5,000,000 to 10,000,000 shares
outstanding, $60,000 if they have 10,000,001 to 15,000,000 shares
outstanding and $75,000 if they have in excess of 15,000,000 shares
outstanding. With respect to annual listing fees, issuers currently
pay $55,000 if they have 50,000,000 shares or less outstanding and
$75,000 if they have in excess of 50,000,000 shares outstanding.
---------------------------------------------------------------------------
The Exchange proposes to make this change to better reflect the
value of such listing to Acquisition Companies. In particular, the
Exchange believes it is reasonable to apply a flat original and annual
listing fee for Acquisition Companies because the value of the listing
for an Acquisition Company, given the limited scope of operation
(unlike operating companies) and the requirement to engage in a merger
or acquisition with one or more unidentified companies within 36 months
of the effectiveness of the Acquisition Company's IPO registration
statement, is substantially similar regardless of the number of shares
the Acquisition Company has outstanding.
As revised, all Acquisition Companies listed on the Exchange would
pay the same original and annual listing fee and will pay a higher fee
under the proposed flat fee than under the current rate. The Exchange
believes that the adoption of a flat initial and annual fee for
Acquisition Companies of $85,000 is not unfairly discriminatory because
the value of the listing to an Acquisition Company is substantially
similar regardless of the number of shares that an Acquisition Company
has outstanding. In addition, the Exchange believes that it is not
unfairly discriminatory for Acquisition Companies to pay a higher
original and annual listing fee than is paid by other companies listing
on the Exchange. Due to the substantial increase in new listings of
Acquisition Companies on the Exchange over the last several years, the
Exchange has devoted additional resources to review Acquisition Company
IPOs, post-listing shareholder meeting requests, and subsequent
business combination transactions. In particular, the Exchange notes
that business combination transactions have become increasingly complex
and require greater levels of analysis. Historically, many Acquisition
Companies seeking to list on the Exchange have shares outstanding that
placed them in the upper tiers of the current original listing fee
structure. Therefore, the Exchange believes that adopting a flat
original listing fee will represent an increase that is directly
proportional to the resources devoted to Acquisition Companies.
In adopting a flat original and annual listing fee for Acquisition
Companies, the Exchange notes that it is mirroring the fee structure in
place on the New York Stock Exchange and the Nasdaq Stock Market (which
charges Acquisition Companies the same flat entry and annual listing
fee regardless of whether such Acquisition Company is listed on the
Nasdaq Global Select, Nasdaq Global or Nasdaq Capital Market). The
Exchange believes it is appropriate to align its fee structure for
Acquisition Companies with the fee structure in place on other national
securities exchanges, even if the proposed fee structure results in
Acquisition Companies paying higher entry or annual listing fees than
they do currently. To that end, the Exchange notes that its proposed
fee and fee structure for Acquisition Companies is comparable to that
of other exchanges in that (i) the value of a listing to an Acquisition
Company is the same regardless of the exchange on which it is listed,
and (ii) no exchange provides Acquisition Companies with complimentary
services (unlike certain categories of operating companies). Therefore,
the Exchange believes it is appropriate for its fee structure to be
[[Page 818]]
aligned with the fee structures in place on other listing venues.\4\
---------------------------------------------------------------------------
\4\ See, for example, Section 902.11 of the NYSE Listed Company
Manual and Nasdaq Rules 5910(a)(1)(B), 5910(b)(2)(F), 5920(a)(1)(B)
and 5920(b)(2)(G). The Exchange notes that Acquisition Companies
listed on the New York Stock Exchange pay a flat initial and annual
fee of $85,000.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\5\ in general, and furthers the
objectives of Section 6(b)(4) \6\ of the Act, in particular, in that it
is designed to provide for the equitable allocation of reasonable dues,
fees, and other charges. The Exchange also believes that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\7\ 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
and is not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(4).
\7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that it is not unfairly discriminatory and
represents an equitable allocation of reasonable fees to adopt new Sec.
145a of the Company Guide to enact a flat original and annual listing
fee for Acquisition Companies.
The Exchange believes that the proposed changes to its original and
annual fees for Acquisition Companies are reasonable. The Exchange
operates in a highly competitive marketplace for the listing of
Acquisition Companies. The Commission has repeatedly expressed its
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. Specifically,
in Regulation NMS,\8\ the Commission highlighted the importance of
market forces in determining prices and SRO revenues and, also,
recognized that current regulation of the market system ``has been
remarkably successful in promoting market competition in its broader
forms that are most important to investors and listed companies.'' \9\
---------------------------------------------------------------------------
\8\ Release No. 34-51808 (June 9, 2005); 70 FR 37496 (June 29,
2005).
\9\ See Regulation NMS, 70 FR at 37499.
---------------------------------------------------------------------------
The Exchange believes that the ever-shifting market share among the
exchanges with respect to new listings and the transfer of existing
listings between competitor exchanges demonstrates that issuers can
choose different listing markets in response to fee changes.
Accordingly, competitive forces constrain exchange listing fees. Stated
otherwise, changes to exchange listing fees can have a direct effect on
the ability of an exchange to compete for new listings and retain
existing listings.
The Exchange believes the proposed change to apply a flat original
and annual listing fee for all Acquisition Companies is reasonable, and
not unfairly discriminatory, because the value of the listing to an
Acquisition Company, and the Exchange's costs in regulating and
supporting the listing of an Acquisition Company, is substantially
similar regardless of the number of shares that an Acquisition Company
has outstanding. As revised, all Acquisition Companies listed on the
Exchange would pay the same original and annual listing fee and will
pay a higher fee under the proposed flat fee than under the current
rate. The Exchange believes that the adoption of a flat initial and
annual fee for Acquisition Companies is not unfairly discriminatory
because the value of the listing to an Acquisition Company is
substantially similar regardless of the number of shares that an
Acquisition Company has outstanding. In addition, the Exchange believes
that it is not unfairly discriminatory for Acquisition Companies to pay
a higher original and annual listing fee of $85,000 than is paid by
other companies listing on the Exchange. Due to the substantial
increase in new listings of Acquisition Companies on the Exchange over
the last several years, the Exchange has devoted additional resources
to review Acquisition Company IPOs, post-listing shareholder meeting
requests, and subsequent business combination transactions. In
particular, the Exchange notes that business combination transactions
have become increasingly complex and require greater levels of
analysis. Historically, many Acquisition Companies seeking to list on
the Exchange have shares outstanding that placed them in the upper
tiers of the current original listing fee structure. Therefore, the
Exchange believes that adopting a flat original listing fee of $85,000
will represent an increase that is proportional to the resources
devoted to Acquisition Companies.
Pricing for the listing of similar securities on other national
securities exchanges was also considered, and, for the reasons
discussed above in the Purpose section, the Exchange believes that the
proposed flat original and annual listing fee is reasonable given the
competitive landscape.
For the foregoing reasons, the Exchange believes that the proposal
is consistent with the Act.
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 Act. The market for listing
services is extremely competitive and listed companies may freely
choose alternative venues. For this reason, the Exchange does not
believe the proposed rule change will result in any burden on
competition for listings. The Exchange also does not believe that the
proposed rule change will have any meaningful impact on competition
among listed companies because all similarly situated companies will be
charged the same fee.
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 has become effective upon filing pursuant
to Section 19(b)(3)(A) \10\ of the Act and paragraph (f) thereunder. At
any time within 60 days of the filing of the 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.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78s(b)(3)(A).
---------------------------------------------------------------------------
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-NYSEAMER-2023-64 on the subject line.
[[Page 819]]
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-NYSEAMER-2023-64. 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 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-NYSEAMER-2023-64 and should be submitted on or
before January 26, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Christina Z. Milnor,
Assistant Secretary.
[FR Doc. 2023-29006 Filed 1-4-24; 8:45 am]
BILLING CODE 8011-01-P