[Federal Register Volume 89, Number 175 (Tuesday, September 10, 2024)]
[Notices]
[Pages 73463-73465]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-20321]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100918; File No. SR-NYSE-2024-47]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change To Amend Section 102.01 of the 
NYSE Listed Company Manual To Provide That the Distribution Standard 
Therein Will Be Calculated on a Worldwide Basis

September 4, 2024.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on August 22, 2024, New York Stock Exchange LLC (``NYSE'' 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.
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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 102.01 of the NYSE Listed 
Company Manual to provide that the distribution standard therein will 
be calculated on a worldwide basis. 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
    Section 102.01A of the Manual sets forth the Exchange's minimum 
initial listing requirements with respect to distribution for companies 
seeking to list under the Exchange's ``domestic'' initial listing 
standards. A note included in Section 102.01B (under the heading 
``Calculations under the Distribution Criteria'') provides that, when 
considering a listing application from a company organized under the 
laws of Canada, Mexico or the United States (``North America''), the 
Exchange will include all North American holders and North American 
trading volume in applying the minimum stockholder and trading volume 
requirements of Section 102.01A.
    Notwithstanding the foregoing, the note included in Section 102.01B 
also provides that, in connection with the listing of any issuer from 
outside North America, the Exchange will have the discretion, but will 
not be required, to consider holders and trading volume in the 
company's home country market or primary trading market outside the 
United States in determining whether a company is qualified for listing 
under Section 102.01, provided such market is a regulated stock 
exchange. The note specifies that, in exercising this discretion, the 
Exchange would consider all relevant factors including: (i) whether the 
information was derived from a reliable source, preferably either a 
regulated securities market or a transfer agent that was subject to 
governmental regulation; (ii) whether there existed efficient 
mechanisms for the transfer of securities between the company's non-
U.S. trading market and the United States; and (iii) the number of 
shareholders and the extent of trading in the company's securities in 
the United States prior to the listing.
    The Exchange proposes to amend the note in Section 102.01B under 
the heading ``Calculations under the Distribution Criteria'' to provide 
that, when considering a listing application from a company regardless 
of whether the company is domestic or foreign, the Exchange will 
include all holders on a global basis and worldwide trading volume in 
applying the minimum stockholder and trading volume requirements of 
Section 102.01A. As the discretion provided with respect to the 
inclusion of non-U.S. holders and trading volume in the current rule 
would no longer be relevant if there was no geographic limitation on 
the

[[Page 73464]]

inclusion of holders or trading volume in meeting the standards, the 
Exchange proposes to delete from the note the discussion of how that 
discretion is currently applied.
    It has been the Exchange's experience in recent years that non-U.S. 
companies conducting their initial public offerings in the United 
States will often seek to sell a significant portion of the offering in 
the company's home market rather than in the United States. Such 
companies and their underwriters have sometimes had difficulty placing 
shares with a sufficient number of investors in North America to meet 
the Exchange's domestic distribution standards and, in some instances, 
companies have been unable to list on the Exchange because of the 
restrictions imposed by the current NYSE rule. In some cases, this 
means that these companies are lost to the U.S. capital markets, but in 
other cases these companies are able to list on the Nasdaq Stock Market 
(``Nasdaq''), as Nasdaq's distribution requirements do not include a 
limitation comparable to that included in the NYSE's rule. The Exchange 
believes that the proposed rule change will enable it to compete more 
effectively for the listing of non-U.S. companies, as the rule change 
would remove a significant competitive disadvantage faced by the 
Exchange in competing with Nasdaq for the listing of these companies.
    In addition to the competitive benefits described above, the 
Exchange believes that the current rule reflects an understanding of 
the functioning of the trading market for non-U.S. companies that is 
inconsistent with the current reality. The current restrictions have 
been in place for many years and do not reflect the speed and 
reliability of links among global securities markets. Given the ease of 
transfer of securities between different countries in the contemporary 
securities markets, there is no reason why the holders of a listed 
company's securities outside of North America cannot be active real 
time participants in the trading market in the United States and that 
foreign holders should be viewed as less valuable as a source of 
liquidity in that market.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\4\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\5\ in particular, because 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 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 because it is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change furthers the 
objectives of Section 6(b)(5) in that it will promote competition for 
the listing of non-U.S. companies by ensuring that the listing rules of 
the major listing exchanges will function the same in their 
consideration of shareholders and trading volume outside of North 
America for purposes of initial listing requirements. In addition to 
these competitive benefits, the Exchange believes that the current rule 
reflects an understanding of how the trading market for non-U.S. 
companies functions that is inconsistent with the current reality. The 
current restrictions have been in place for many years and do not 
reflect the speed and reliability of links among global securities 
markets. Given the ease of transfer of securities between different 
countries in the contemporary securities markets, there is no reason 
why the holders of a listed company's securities outside of North 
America cannot be active real time participants in the trading market 
in the United States and that foreign holders should be viewed as less 
valuable as a source of liquidity in that market. As such, the Exchange 
believes that the proposal is consistent with the protection of 
investors as it reflects appropriately the role played by shareholders 
and trading activity in a company's home market in the development of a 
liquid trading market in the United States in the securities of non-
U.S. listed companies.

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

    The Exchange believes that the proposal will not impose any burden 
on competition that is not necessary or appropriate in furtherance of 
the purposes of Section 6(b)(8) of the Act.\6\
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    \6\ 15 U.S.C. 78f(b)(8).
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    The Exchange believes that the proposal will not impose a burden on 
intermarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act because the proposed rule change 
is designed to increase the competition for listing of non-U.S. 
companies by enabling the Exchange to compete more effectively with 
Nasdaq for the listing of those companies, by conforming the Exchange's 
treatment of shareholders and trading volume outside North America with 
their treatment under Nasdaq listing rules.
    The Exchange does not believe that the proposed rule change imposes 
a burden on intra-market competition because the provisions will be 
applied in the same manner to all listing applicants.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) by order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-NYSE-2024-47 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-2024-47. 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

[[Page 73465]]

only one method. The Commission will post all comments on the 
Commission's internet website (https://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-NYSE-2024-47 and should be submitted on 
or before October 1, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-20321 Filed 9-9-24; 8:45 am]
BILLING CODE 8011-01-P