[Federal Register Volume 86, Number 1 (Monday, January 4, 2021)]
[Notices]
[Pages 148-152]
[FR Doc No: 2020-29020]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90803; File No. SR-NYSE-2020-85]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change To Amend the NYSE Listed
Company Manual To Revise the Shareholder Approval Requirements in
Sections 312.03 and 312.04 and the Requirements for Related Party
Transactions in Section 314.00

December 28, 2020.
    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 December 16, 2020, 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 Sections 312.03, 312.04 and 314.00
of the NYSE Listed Company Manual (``Manual''). 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
    Paragraphs (b) and (c) of Sections 312.03 of the Manual require
listed companies to obtain shareholder approval prior to certain kinds
of equity issuances. The Exchange believes that these requirements can
make it unnecessarily difficult for listed companies to raise necessary
capital in private placement transactions that are in the interests of
the company and its shareholders. Consequently, the Exchange proposes
to modify these provisions, bringing its shareholder approval
requirements into closer alignment with those of Nasdaq and NYSE
American,\4\ by providing listed companies with flexibility that exists
under the rules of those other listing markets. The Exchange has waived
certain requirements under Section 312.03 to provide listed companies
with greater flexibility to raise capital during the COVID-19
crisis.\5\ Among other things, the current proposal includes amendments
that are identical in effect to the current waiver. The Exchange has
observed that a significant number of companies have benefited from the
flexibility provided by the waiver and has not observed any significant
problems associated with companies' completion of transactions
permitted by the waiver.
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    \4\ See Nasdaq Marketplace Rule 5635 and NYSE American Company
Guide Sections 712 and 713.
    \5\ See Securities Exchange Act Release No. 34-88572 (April 6,
2020); 85 FR 20323 (April 10, 2020) (SR-NYSE-2020-30). (waiving
certain requirements of Section 312.03 through June 30, 2020). See
also Securities Exchange Act Release No. 89219 (July 2, 2020); 85 FR
41640 (July 10, 2020) (SR-NYSE-2020-58) (extending the waiver
through September 30, 2020). See also Securities Exchange Act
Release No. 90020 (September 28, 2020); 85 FR 62357 (October 2,
2020) (SR-NYSE-2020-79) (extending the waiver through December 31,
2020).
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Proposed Amendments to Section 312.03(b)
    Subject to an exception for early stage companies set forth
therein, Section 312.03(b) of the Manual requires shareholder approval
of certain issuances of common stock, or securities convertible into or
exercisable for common stock, to:
     A director, officer or substantial security holder \6\ of
the company (each

a ``Related Party'' for purposes of Section 312.03(b));
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    \6\ For purposes of Section 312.03, Section 312.04(e) provides
that: ``[a]n interest consisting of less than either five percent of
the number of shares of common stock or five percent of the voting
power outstanding of a company or entity shall not be considered a
substantial interest or cause the holder of such an interest to be
regarded as a substantial security holder.''
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     a subsidiary, affiliate, or other closely related person
of a Related Party; or
     Any company or entity in which a Related Party has a
substantial direct or indirect interest.
    This prior shareholder approval is required if the number of shares
of common stock to be issued, or if the number of shares of common
stock into which the securities may be convertible or exercisable,
exceeds either 1% of the number of shares of common stock or 1% of the
voting power outstanding before the issuance. A limited exception to
these shareholder approval requirements permits cash sales relating to
no more than 5% of the number of shares of common stock or voting power
outstanding that meet a Minimum Price test set forth in the rule (the
``Minimum Price'').\7\ However, this exception may only be used if the
Related Party in question has Related Party status solely because it is
a substantial security holder of the company.
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    \7\ Section 312.04(i) defines the ``Minimum Price'' as follows:
``Minimum Price'' means a price that is the lower of: (i) The
Official Closing Price immediately preceding the signing of the
binding agreement; or (ii) the average Official Closing Price for
the five trading days immediately preceding the signing of the
binding agreement.
    Section 312.04(j) defines ``Official Closing Price'' as follows:
``Official Closing Price'' of the issuer's common stock means the
official closing price on the Exchange as reported to the
Consolidated Tape immediately preceding the signing of a binding
agreement to issue the securities. For example, if the transaction
is signed after the close of the regular session at 4:00 p.m.
Eastern Standard Time on a Tuesday, then Tuesday's official closing
price is used. If the transaction is signed at any time between the
close of the regular session on Monday and the close of the regular
session on Tuesday, then Monday's official closing price is used.
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    The Exchange proposes to amend Section 312.03(b) in several
respects.
     The Exchange proposes to modify the class of persons with
respect to which an issuance of common stock would require a listed
company to seek shareholder approval. Specifically, Section 312.03(b)
as amended would require prior shareholder approval for issuances of
common stock to directors, officers, and substantial securityholders
(``Related Party'') and would no longer require such approval for
issuances to such Related Parties' subsidiaries, affiliates or other
closely related persons or to entities in which a Related Party has a
substantial interest (except where a Related Party has a 5% or greater
interest in the counterparty, as described below). In making this
change, the Exchange is harmonizing its approach to the regulation of
issuances to related parties with that of Nasdaq and NYSE American, as
both of those markets focus their shareholder approval requirements
solely on the regulation of the Related Parties themselves and not on
closely related persons of Related Parties.
     As proposed to be amended, Section 312.03(b) would require
shareholder approval of cash sales to Related Parties (as such term is
defined in Section 312.03(b)) only if the price is less than the
Minimum Price. Accordingly, Section 312.03(b) would no longer require
shareholder approval of issuances in a cash sale that meet the Minimum
Price requirement to a Related Party where the number of shares of
common stock to be issued, or the number of shares of common stock into
which the securities may be convertible or exercisable, exceeds either
5% of the number of shares of common stock or 5% of the voting power
outstanding before the issuance. However, cash sales to Related Parties
that meet the Minimum Price requirement would be subject to the same
limitations as cash sales to all other investors under the proposed
amended Section 312.03(c), as described below. In addition, cash sales
relating to more than 1% of the issuer's common stock or voting power
prior to the issuance to a Related Party for prices below the Minimum
Price will continue to be subject to shareholder approval under Section
312.03(b) (this requirement is not included in the Nasdaq or NYSE
American rules).
     The Exchange proposes to require shareholder approval of
any transaction or series of related transactions in which any Related
Party has a 5% or greater interest (or such persons collectively have a
10% or greater interest), directly or indirectly, in the company or
assets to be acquired or in the consideration to be paid in the
transaction and the present or potential issuance of common stock, or
securities convertible into common stock, could result in an increase
in outstanding common shares of 5% or more. This proposed provision is
substantively identical to the only limitation placed specifically on
issuances to related parties in the Nasdaq and NYSE American rules. The
Exchange would also continue to require shareholder approval of any
sale of securities by a listed company to a Related Party in a
transaction, or series of transactions, whose proceeds will be used to
fund an acquisition of stock or assets of another company where such
Related Party has a direct or indirect interest in the company or
assets to be acquired or in the consideration to be paid for such
acquisition.
     The Exchange proposes to delete from Section 312.03(b) two
provisions that will no longer be relevant as they relate to
transactions that benefit from exemptions from shareholder approval
under current Section 312.03(b), but would be exempt from shareholder
approval under the general application of Section 312.03(b) as proposed
to be amended. These provisions relate to: (i) Cash sales meeting the
Minimum Price test and relating to no more than 5% of the number of
shares of common stock or 5% of the voting power outstanding before the
issuance to a Related Party where the Related Party involved in the
transaction is classified as such solely because such person is a
substantial security holder; and (ii) the Early Stage Company
exemption, to which the Exchange proposes to remove the reference from
Section 312.04 as it will no longer be needed. For the same reason, the
Exchange proposes to delete from Section 312.03(b) a sentence that
provides that the Early Stage Company exemption is not applicable to a
sale of securities by the listed company to any person subject to the
provisions of Section 312.03(b) in a transaction, or series of
transactions, whose proceeds will be used to fund an acquisition of
stock or assets of another company where such person has a direct or
indirect interest in the company or assets to be acquired or in the
consideration to be paid for such acquisition.
    The Exchange notes that Section 312.03(b) would continue to include
text stating that any sale of stock to an employee, director or service
provider is also subject to the equity compensation rules in Section
303A.08 of the Manual and stating that shareholder approval is required
if any of the subparagraphs of Section 312.03 require such approval,
notwithstanding that the transaction does not require approval under
Section 312.03(b) or one or more of the other subparagraphs.
    There would continue to be other significant protections for
shareholders with respect to a company's sales of securities. Firstly,
Section 314.00 of the Manual in its proposed amended form will provide
that transactions with related parties, such as those in which a
director, officer or substantial securityholder has an interest, must
be reviewed and approved by the company's audit committee or another
body of independent directors. Furthermore, there are other significant
protections under other paragraphs of Section 312.03, including a
requirement of shareholder approval for any sale for less than the
Minimum Price relating to 20% or more of the issuer's outstanding

common stock or voting power prior to such issuance. This requirement
means that any economically dilutive transaction would be subject to
shareholder approval. In addition, any related party sale that gives
rise to a change of control would be subject to shareholder approval
under Section 312.03(d).
    The Exchange believes that the continuation of the important
limitations with respect to related party issuances as described above
(including the review of such transactions under Section 314.00 and the
continued application of the shareholder approval requirements with
respect to equity compensation set forth in Section 303A.08) would
continue to provide shareholders of NYSE listed companies with
protections in relation to issuances to related parties (including
Related Parties as such term is defined in Section 312.03(b) In
particular, the Exchange notes that the continued shareholder approval
requirement for cash sales to Related Parties relating to more than 1%
of the company's outstanding common stock that do not meet the Minimum
Price requirement is an important protection not provided by the Nasdaq
or NYSE American rules. The proposed amendments would make the
Exchange's rules for cash sales to related parties substantively
identical to those of Nasdaq and NYSE American for issuances that meet
the Minimum Price test and the Exchange believes that the long
experience of those other markets in applying those substantially
identical rules provides evidence that they provide an appropriate
level of investor protection.
Proposed Amendments to Section 312.03(c)
    Section 312.03(c) of the Manual requires shareholder approval of
any transaction relating to 20% or more of the company's outstanding
common stock or 20% of the voting power outstanding before such
issuance, but provides the following exceptions: (1) Any public
offering for cash; (2) any bona fide private financing involving a cash
sale of the company's securities that comply with the Minimum Price
requirement. As set forth in Section 312.04(g), a ``bona fide private
financing'' (``Bona Fide Private Financing'') refers to a sale in which
either:
     A registered broker-dealer purchases the securities from
the issuer with a view to the private sale of such securities to one or
more purchasers; or
     the issuer sells the securities to multiple purchasers,
and no one such purchaser, or group of related purchasers, acquires, or
has the right to acquire upon exercise or conversion of the securities,
more than 5% of the shares of the issuer's common stock or more than
five percent of the issuer's voting power before the sale.
    The Exchange proposes to replace the reference to ``bona fide
private financing'' in Section 312.03(c) with ``other financing (that
is not a public offering for cash) in which the company is selling
securities for cash.'' This change would eliminate the 5% limit for any
single purchaser participating in a transaction relying on the
exemption.\8\ In addition, as any sale to a broker-dealer under the
current Bona Fide Private Financing exception would also qualify for an
exception to shareholder approval under the proposed amended exemption,
there is no need to retain a separate provision for sales made to
broker-dealers. The Exchange also proposes to amend Section 312.03(c)
to provide that, if any of the proceeds of such a financing will be
paid in an acquisition and the securities generating such proceeds when
combined with any securities issued in connection with such acquisition
exceed either 20% of the number of shares of common stock or 20% of the
voting power outstanding before the issuance, then shareholder approval
is required. Finally, as the Bona Fide Private Financing term will no
longer be used in Section 312.03(c), the Exchange proposes to delete
the definition of that term in Section 312.04(g).
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    \8\ While the proposed amended exemption would not limit the
size of any transaction that meets the Minimum Price test, any such
transaction giving rise to a change of control will be subject to
shareholder approval under Section 312.03(d).
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    The Exchange notes that the proposed amendments to Section
312.03(c) do not change the rule as it relates to issuances in non-cash
transactions or in cash transactions for a price below the Minimum
Price. Instead, in replacing the Bona Fide Private Financing exception
with the revised exemption described in the immediately preceding
paragraph, the proposed amendment would only remove a limitation in the
Bona Fide Private Financing exception that limits the participation of
any single investor in a Minimum Price cash sale of more than 5% of the
shares or voting power. The Exchange believes that this change is
consistent with the protection of investors because the Minimum Price
requirement protects against a sale using the exception resulting in
economic dilution. Further, the separately applicable requirements of
Section 312.03(d) require that the shareholders approve any transaction
that would result in a change of control.
    The proposed amendments would make the Exchange's rules for cash
sales of securities that meet the Minimum Price test substantively
identical to those of Nasdaq and NYSE American and the Exchange
believes that the long experience of those other markets in applying
those substantially identical rules provides evidence that they provide
an appropriate level of investor protection.
Deletion of Section 312.03T
    Section 312.03T was adopted to provide temporary relief from
certain of the requirements of Section 312.03 during the COVID-19
pandemic. Section 312.03T was applicable by its terms through June 30,
2020. As that date has passed, the Exchange now proposes to delete
Section 312.03T in its entirety, as it is no longer applicable.
Amendment to Section 314.00
    In its current form, Section 314.00 provides that related party
transactions normally include transactions between officers, directors,
and principal shareholders and the company and that each related party
transaction is to be reviewed and evaluated by an appropriate group
within the listed company involved. The current rule further states
that, while the Exchange does not specify who should review related
party transactions, the Exchange believes that the Audit Committee or
another comparable body might be considered as an appropriate forum for
this task.
    The Exchange proposes to amend the first paragraph of Section
314.00.\9\ The proposed new rule text strengthens the rule in two
important respects:
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    \9\ The Second paragraph of Section 314.00 will be retained in
its entirety. It reads as follows:
    The Exchange will continue to review proxy statements and other
SEC filings disclosing related party transactions and where such
situations continue year after year, the Exchange will remind the
listed company of its obligation, on a continuing basis, to evaluate
each related party transaction and determine whether or not it
should be permitted to continue.
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     For purposes of Section 314.00, the term ``related party
transaction'' refers to transactions required to be disclosed pursuant
to Item 404 of Regulation S-K under the Securities Exchange Act. In the
case of foreign private issuers, the term ``related party
transactions'' refers to transactions required to be disclosed pursuant
to Form 20-F, Item 7.B.
     Related party transactions under the rule as amended must
be reviewed by either the company's audit committee or another
independent body of the board of directors and the audit committee or
such other body may prohibit such a transaction if it determines it to
be

inconsistent with the interests of the company.\10\
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    \10\ The Exchange proposes to delete from Section 314.00 a
sentence that reads as follows: ``Following the review, the company
should determine whether or not a particular relationship serves the
best interests of the company and its shareholders and whether the
relationship should be continued or eliminated.'' This sentence is
no longer necessary, as the proposed amended rule gives the audit
committee or other independent body of the board the authority to
prohibit any related party transaction it reviews.
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the
Act,\11\ in general, and furthers the objectives of Section 6(b)(5) of
the Act,\12\ 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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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed amendments to Section
312.03(b) are designed to protect the public interest and the interests
of investors because there would continue to be other significant
protections for shareholders with respect to sales of securities to
related parties. Firstly, Section 314.00 of the Manual, as proposed to
be amended, will provide that related party transactions, such as those
in which a director, officer or substantial securityholder has an
interest, are required to be reviewed and approved by the issuer's
audit committee or another group of independent directors. Furthermore,
there are other significant protections under other paragraphs of
Section 312.03, including any sale relating to 20% or more of the
issuer's common stock or voting power immediately preceding this
issuance for less than the Minimum Price. This requirement means that
any economically dilutive transaction would be subject to shareholder
approval. The Exchange notes that Section 312.03(c) applies to any
transaction or series of related transactions, which provides
shareholders with further protection by ensuring that a company cannot
avoid the shareholder approval requirement by separating an overall
transaction into smaller separate transactions that would not
individually require shareholder approval. In addition, any related
party sale that gives rise to a change of control will be subject to
shareholder approval under Section 312.03(d). The Exchange believes
that the continuation of the important limitations with respect to
related party issuances as described above (including the review of
such transactions under Section 314.00 and the continued application of
the shareholder approval requirements with respect to equity
compensation set forth in Section 303A.08) would continue to provide
shareholders of NYSE listed companies with protections in relation to
issuances to related parties (including Related Parties as such term is
defined in Section 312.03(b)). In particular, the Exchange notes that
the continued shareholder approval requirement for cash sales to
Related Parties that relate to more than 1% of the company's
outstanding common stock or voting power and do not meet the Minimum
Price requirement is an important protection not provided by the Nasdaq
or NYSE American rules. The proposed amendments would make the
Exchange's rules for cash sales to related parties substantively
identical to those of Nasdaq and NYSE American for issuances that meet
the Minimum Price test and the Exchange believes that the long
experience of those other markets in applying those substantially
identical rules provides evidence that they provide an appropriate
level of investor protection.
    The Exchange believes that the proposed amendments to Section
312.03(c) are also designed to protect the public interest and the
interests of investors. The Exchange notes that the proposed amendments
to Section 312.03(c) do not change the rule as it relates to issuances
in non-cash transactions or to cash transactions for a price below the
Minimum Price. The sole purpose of the amendment is to remove an
arbitrary limitation in the Bona Fide Private Financing exception that
limits the participation of any single investor in a Minimum Price cash
sale to 5%. The Exchange believes that this change is consistent with
the protection of investors because the Minimum Price requirement
provides protection against economic dilution, while the separately
applicable requirements of Section 312.03(d) provide that shareholders
will have a vote on any transaction that would result in a change of
control. The proposed amendments would also make the Exchange's rules
for cash sales of securities that meet the Minimum Price test
substantively identical to those of Nasdaq and NYSE American and the
Exchange believes that the long experience of those other markets in
applying those substantially identical rules provides evidence that
they provide an appropriate level of investor protection.
    The Exchange believes that the proposed amendments to Section
314.00 are also designed to protect the public interest and the
interests of investors. By proposing to use the definition of a related
party transaction in SEC disclosure rules, the Exchange is providing
greater clarity to both issuers and investors as to when the rule must
be applied. By proposing to require that transactions subject to the
rule must be reviewed and approved by either the audit committee or
another body of independent directors, the Exchange is making the
requirement more explicit and preventing any listed issuer from giving
that role to any group that is not entirely made up of independent
directors.

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 changes
will conform the shareholder approval requirements of the NYSE to those
of Nasdaq and NYSE American in certain respects and therefore enhances
competition among listing exchanges. As all listed companies will be
subject to the same shareholder approval and related party transaction
approval requirements, the proposal does not impose any burden on
competition among listed issuers.

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 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSE-2020-85 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-2020-85. 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 the 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-2020-85 and should be submitted on
or before January 25, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-29020 Filed 12-31-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: December 29, 2005 (Volume 70, Number 249)]
[Notices]
[Page 77204]
[DOCID:fr29de05-99]

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SECURITIES AND EXCHANGE COMMISSION

[File No. 1-15196]

Issuer Delisting; Notice of Application of Provident Energy Trust
To Withdraw Its Trust Units, No Par Value, From Listing and
Registration on the American Stock Exchange LLC

December 22, 2005.
    On December 8, 2005, Provident Energy Trust, an Alberta Trust,
(``Issuer''), filed an application with the Securities and Exchange
Commission (``Commission''), pursuant to Section 12(d) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 12d2-2(d)
thereunder,\2\ to withdraw its trust units, no par value
(``Security''), from listing and registration on the American Stock
Exchange LLC (``Amex'').
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    \1\ 15 U.S.C. 78l(d).
    \2\ 17 CFR 240.12d2-2(d).
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    On October 11, 2005, the Board of Directors (``Board'') of the
Issuer unanimously approved a resolution to withdraw the Security from
listing on Amex and list the Security on the New York Stock Exchange,
Inc. (``NYSE''). The Issuer stated that the Board believes moving to
NYSE will provide greater access to capital markets, improve the
visibility and liquidity of the Security, and provide a platform for
anticipated future growth.
    The Issuer stated in its application that it has met the
requirements of Amex Rule 18 by complying with all applicable laws in
effect in the Province of Alberta, Canada, in which it is organized,
and by providing written notice of withdrawal to Amex.
    The Issuer's application relates solely to the withdrawal of the
Security from listing on Amex, and shall not affect its continued
listing on NYSE or its obligation to be registered under Section 12(b)
of the Act.\3\
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    \3\ 15 U.S.C. 781(b).
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    Any interested person may, on or before January 17, 2006, comment
on the facts bearing upon whether the application has been made in
accordance with the rules of Amex, and what terms, if any, should be
imposed by the Commission for the protection of investors. All comment
letters may be submitted by either of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/delist.shtml.
); or     Send an e-mail to<EMAIL_ADDRESS>Please include

the File Number 1-15196 or;

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-9303.

All submissions should refer to File Number 1-15196. This file number
should be included on the subject line if e-mail is used. To help us
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/delist.shtml). Comments are

also available for public inspection and copying in the Commission's
Public Reference Room. All comments received will be posted without
change; we do not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly.
    The Commission, based on the information submitted to it, will
issue an order granting the application after the date mentioned above,
unless the Commission determines to order a hearing on the matter.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\4\
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    \4\ 17 CFR 200.30-3(a)(1).
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Jonathan G. Katz,
Secretary.
[FR Doc. E5-8051 Filed 12-28-05; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 77, Number 158 (Wednesday, August 15, 2012)]
[Notices]
[Pages 49035-49037]
[FR Doc No: 2012-19986]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67635; File No. SR-NYSEMKT-2012-34]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Relating to Amendments
to the NYSE Amex Options Fee Schedule Regarding a Rebate for Order Flow
Providers, an Increase in the Service Fee Applicable to Market Makers,
and a Fee for Market Maker Executions of SPY Options

August 9, 2012.
    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 July 31, 2012, 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 proposes to [sic] amend the NYSE Amex
Options Fee Schedule to (i) Establish a rebate for Order Flow Providers
(``OFPs'') \4\ based on the average daily volume (``ADV'') of Customer
\5\ Electronic Complex Orders \6\ executed by an OFP on the Exchange;
(ii) increase the service fee applicable to NYSE Amex Options Market
Makers \7\ that have reached the monthly Market Maker fee cap, from
$0.05 per contract to $0.10 per contract for executions of Electronic
Complex Orders; and (iii) establish a fee of $0.10 per contract for
NYSE Amex Options Market Maker executions of SPY options as part of an
Electronic Complex Order. The text of the proposed rule 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.
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    \4\ An OFP is any ATP Holder that submits, as agent, orders to
the Exchange. See Rule 900.2NY(57).
    \5\ The term ``Customer'' means an individual or organization
that is not a broker-dealer. See Rule 900.2NY(18).
    \6\ See Rule 980NY.
    \7\ References herein to Market Makers include Specialists and
e-Specialists. See Rule 900.2NY(76). See also Rule 927.4NY.
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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 the Fee Schedule to (i) Establish a
rebate for OFPs based on the ADV of Customer Electronic Complex Orders
executed by an OFP on the Exchange; (ii) increase the service fee
applicable to NYSE Amex Options Market Makers that have reached the
monthly Market Maker fee cap, from $0.05 per contract to $0.10 per
contract for executions of Electronic Complex Orders; and (iii)
establish a fee of $0.10 per contract for NYSE Amex Options Market
Maker executions of SPY options as part of an Electronic Complex Order.
The Exchange proposes to implement these changes on August 1, 2012.
    The Exchange proposes to establish a rebate for OFPs based on the
ADV of Customer Electronic Complex Orders

executed by an OFP on the Exchange. An OFP would be required to execute
an ADV of at least 35,000 contracts of Customer Electronic Complex
Orders to qualify for the rebate. The proposed volume tiers and the
corresponding per contract rebate would be as follows: \8\
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    \8\ The Exchange proposes that the highest rebate amount
achieved by an OFP for the calendar month would apply retroactively
to all Customer Electronic Complex Orders executed by the OFP during
such calendar month.

------------------------------------------------------------------------
                                                 Rebate per contract for
                                                 all customer electronic
                                                      complex orders
  Customer electronic complex order ADV tiers      (retroactive to the
                                                  first contract traded
                                                    during the month)
------------------------------------------------------------------------
35,000 to 49,999...............................                    $0.04
50,000 to 69,999...............................                     0.06
70,000 to 109,999..............................                     0.08
110,000 and greater............................                     0.10
------------------------------------------------------------------------

    In addition to this proposed rebate, the Exchange proposes to amend
the rate for the incremental service fee charged to NYSE Amex Options
Market Makers that have reached the monthly fee cap for their
executions of Electronic Complex Orders. Currently, and as described in
endnote 5 to the Fee Schedule, NYSE Amex Options Market Maker fees are
aggregated and capped at $350,000 per month. An incremental service fee
of $0.01 per contract applies for NYSE Amex Options Market Maker volume
executed in excess of 3,500,000 contracts per month. However, the
incremental service fee is $0.05 for an execution of an Electronic
Complex Order. The Exchange is proposing to increase this incremental
service fee for Electronic Complex Order executions from $0.05 per
contract to $0.10 per contract.
    The Exchange is also proposing to implement a fee of $0.10 per
contract for any NYSE Amex Options Market Maker executions of SPY
options as part of an Electronic Complex Order. NYSE Amex Options
Market Makers that execute Electronic Complex Orders in options other
than SPY would continue to pay the existing transaction charges, as
provided in the Fee Schedule.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act, in general, and furthers the objectives
of Section 6(b)(4) of the Act,\9\ in particular, because it provides
for the equitable allocation of reasonable dues, fees, and other
charges among its members and issuers and other persons using its
facilities and does not unfairly discriminate between customers,
issuers, brokers or dealers.
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    \9\ 15 U.S.C. 78f(b)(4).
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    The proposal to establish a tiered rebate for OFPs that execute the
requisite ADV of Customer Electronic Complex Orders on the Exchange is
reasonable because it is designed to attract additional Customer
Electronic Complex Order volume to the Exchange, which would benefit
all participants by offering greater price discovery, increased
transparency and an increased opportunity to trade on the Exchange.
Additionally, the Exchange believes that the rates proposed for the
rebate are reasonable because they would incentivize OFPs to submit
Customer Electronic Complex Orders to the Exchange and would result in
a rebate that is reasonably related to an exchange's market quality
that is associated with higher volumes. The Exchange also believes that
the proposed thresholds for the tiers are reasonable because they will
reward OFPs with a greater rebate when they bring a larger number of
orders to the Exchange. The Exchange also believes that retroactively
applying the highest rebate amount achieved by an OFP to all Customer
Electronic Complex Orders executed by the OFP during the calendar month
is reasonable because it will increase the incentive for OFPs to
achieve a higher tier. Moreover, the Exchange believes that the
proposed rebate is equitable and not unfairly discriminatory because it
will be available to all OFPs that execute Customer Electronic Complex
Orders on the Exchange on an equal and non-discriminatory basis. The
Exchange also believes that the proposed rebate is reasonable because
it is not new or novel. Instead, the Exchange understands that at least
two other option exchanges currently offer a rebate specifically for
Customer Complex Order volume.\10\
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    \10\ For example, the International Securities Exchange
(``ISE'') Schedule of Fees provides that a rebate of $0.32 per
contract per leg will apply to Priority Customer Complex orders in
the Select Symbols (excluding SPY) that trade with non-Priority
Customer orders in the ISE Complex Order book; provided, however,
that a greater rebate shall apply to an ISE Member during a calendar
month that achieves a certain ADV of Priority Customer Complex Order
contracts executed during the calendar month, as follows: if the ISE
Member achieves an ADV of 75,000 Priority Customer Complex Order
contracts, the rebate amount shall be $0.33 per contract per leg; if
the ISE Member achieves an ADV of 125,000 Priority Customer Complex
Order contracts, the rebate amount shall be $0.34 per contract per
leg; and if the ISE Member achieves an ADV of 250,000 Priority
Customer Complex Order contracts, the rebate amount shall be $0.35
per contract per leg. Similar to the Exchange's proposal, the
highest rebate amount achieved by the ISE Member for a calendar
month applies retroactively to all contracts executed by the ISE
Member during such month. See endnote 3 [sic] of the ISE Schedule of
Fees. Similarly, NASDAQ OMX PHLX (``PHLX'') provides a rebate for
Customer Complex Orders. See Section I, Part B of the PHLX Pricing
Schedule.
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    The Exchange believes that the proposal to increase the capped NYSE
Amex Market Maker service fee from $0.05 to $0.10 for executions of
Electronic Complex Orders is reasonable because the capped NYSE Amex
Options Market Maker would still be incentivized to continue to trade
sufficient volume once it has achieved the fee cap, thereby lowering
the effective rate for its executions over the course of the month.
Specifically, the Exchange believes that the proposed new rate is
reasonable because, among other things, the new rate would be factored
into an NYSE Amex Options Market Maker's overall transaction costs,
including the rebate proposed herein for Customer Electronic Complex
Order executions. The Exchange also believes that the proposed new rate
is reasonable because the anticipated increase in Customer Electronic
Complex Order volume that would result from the proposed rebate will
directly benefit capped NYSE Amex Options Market Makers, as they will
have an increased opportunity to trade. The Exchange believes that the
increased opportunity to trade reasonably balances the proposed
increase in the service fee, which would continue to be less than the
rate that the NYSE Amex Options Market Maker

would pay if it was not capped. In this regard, the Exchange believes
that the proposed rate is reasonable because it would continue to
incentivize NYSE Amex Options Market Makers to trade sufficient volume
to achieve the fee cap. The Exchange believes that this aspect of the
proposed rule change is equitable and not unfairly discriminatory
because it will apply to all capped NYSE Amex Options Market Makers on
an equal and non-discriminatory basis.
    The Exchange believes that the proposal to charge $0.10 per
contract to all NYSE Amex Options Market Makers that execute SPY
options as part of an Electronic Complex Order is reasonable because
the rate is set at a level that the Exchange believes may attract
greater Market Maker participation in the Exchange's Complex Order Book
for SPY options. Additionally, the Exchange notes that NYSE Amex
Options Market Makers will continue to be assessed Marketing Charges
when they execute SPY options as part of an Electronic Complex Order
where the contra party is a Customer. The Marketing Charges for SPY
options are currently $0.25 per contract, which, when coupled with the
proposed $0.10 per contract rate, results in a $0.35 per contract
charge. This all-in cost is reasonable because it is comparable to what
other participants on the Exchange will pay under the proposal, ranging
from $0.20 per contract for firms trading electronically to $0.43 per
contract for non-NYSE Amex Options Market Makers trading
electronically. In this regard, the fee is equitable and not unfairly
discriminatory, particularly when considering the quoting obligations
that NYSE Amex Options Market Makers must satisfy. The Exchange notes
that Market Maker quotes establish the Exchange's best bid and best
offer, which serve as an important price discovery tool for
participants that enter Complex Orders into the Exchange's Complex
Order Book. Accordingly, the Exchange believes that the proposed change
is reasonable, equitable and not unfairly discriminatory. The Exchange
also believes that the proposed rule change is equitable and not
unfairly discriminatory because it will apply to all NYSE Amex Options
Market Makers on an equal and non-discriminatory basis.
    For these reasons, the Exchange believes that the entire proposal
is reasonable, equitable and not unfairly discriminatory. Finally, the
Exchange notes that it operates in a highly competitive market in which
market participants can readily favor competing venues if they deem fee
levels at a particular venue to be excessive. In such an environment,
the Exchange must continually review, and consider adjusting, its fees
and credits to remain competitive with other exchanges. For the reasons
described above, the Exchange believes that the proposed rule change
reflects this competitive environment.

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.

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) \11\ of the Act and subparagraph (f)(2) of Rule
19b-4 \12\ thereunder, because it establishes a due, fee, or other
charge imposed by NYSE MKT.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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 public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.

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_ADDRESS>Please include
File Number SR-NYSEMKT-2012-34 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEMKT-2012-34. 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 Section, 100 F Street
NE., Washington, DC 20549-1090 on official business days between the
hours of 10 a.m. and 3 p.m. Copies of the filing will also be available
for inspection and copying at the Exchange's principal office and on
its Internet Web site at www.nyse.com. 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-2012-34 and should be submitted
on or before September 5, 2012.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-19986 Filed 8-14-12; 8:45 am]
BILLING CODE 8011-01-P