[Federal Register Volume 85, Number 126 (Tuesday, June 30, 2020)]
[Notices]
[Pages 39246-39251]
[FR Doc No: 2020-14013]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89148; File No. SR-NYSE-2019-67]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change, as Modified by Amendment No.
2, To Amend Chapter One of the Listed Company Manual To Modify the
Provisions Relating to Direct Listings

June 24, 2020.
    On December 11, 2019, New York Stock Exchange LLC (``NYSE'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) \1\ of the Securities
Exchange Act of 1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ a
proposed rule change to amend Chapter One of the Listed Company Manual
to modify the provisions relating to direct listings. On December 13,
2019, the Exchange filed Amendment No. 1 to the proposed rule change,
which amended and replaced the proposed rule change in its entirety.
The proposed rule change, as modified by Amendment No. 1, was published
for comment in the Federal Register on December 30, 2019.\4\ On
February 13, 2020, pursuant to Section 19(b)(2) of the Exchange Act,\5\
the Commission designated a longer period within which to either
approve the proposed rule change, disapprove the proposed rule change,
or institute proceedings to determine whether to disapprove the
proposed rule change.\6\ On March 26, 2020, the Commission instituted
proceedings to determine whether to approve or disapprove the proposed
rule change, as modified by Amendment No. 1.\7\ On June 22, 2020, the
Exchange filed Amendment No. 2 to the proposed rule change, which
superseded the proposed rule change as modified by Amendment No. 1, and
is described in Items I and II below, which Items have been prepared by
the Exchange. On June 24, 2020, the Commission extended the time period
for approving or disapproving the proposal for an additional 60
days.\8\ The Commission is publishing this notice to solicit comments
on the proposed rule change, as modified by Amendment No. 2, 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.
    \4\ See Securities Exchange Act Release No. 87821 (December 20,
2019), 84 FR 72065 (December 30, 2019) (``Notice''). Comments
received on the Notice are available on the Commission's website at:
https://www.sec.gov/comments/sr-nyse-2019-67/srnyse201967.htm.
    \5\ 15 U.S.C. 78s(b)(2).
    \6\ See Securities and Exchange Act Release No. 88190 (February
13, 2020), 85 FR 9891 (February 20, 2020).
    \7\ See Securities and Exchange Act Release No. 88485 (March 26,
2020), 85 FR 18292 (April 1, 2020).
    \8\ See Securities and Exchange Act Release No. 89147 (June 24,
2020).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to (1) amend Chapter One of the Listed
Company Manual (the ``Manual'') to modify the provisions relating to
direct listings to permit a primary offering in connection with a
direct listing and to specify how a direct listing qualifies for
initial listing if it includes both sales of securities by the company
and possible sales by selling shareholders, (2) modify the definition
of ``Direct Listing'' in Rule 1.1, (3) add a definition of Issuer
Direct Offering (``IDO'') Order to Rule 7.31 and describe how it would
participate in a Direct Listing Auction in Rule 7.35A, and (4) remove
references to Direct Listing Auctions from Rule 7.35C.\9\ 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.
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    \9\ The Exchange has previously filed a proposed rule change to
amend Chapter One of the Manual to modify the provisions related to
direct listings. See SR-NYSE-2019-67 and Amendment No. 1 to that
filing. Amendment No. 2 to SR-NYSE-2019-67 proposes to (1) delete
from the filing the proposed amendment to Section 102.01A proposing
to provide additional time under certain circumstances for companies
listing in connection with a direct listing to meet the initial
listing distribution standards and add provisions specifying how a
direct listing qualifies for listing if it includes both sales of
securities by the company and possible sales by selling
shareholders, (2) amend Exchange Rules to add the IDO Order and
describe how it would participate in a Direct Listing Auction for a
Primary Direct Floor Listing and remove references to Direct Listing
Auctions from Rule 7.35C. This Amendment No.2 to SR-NYSE-2019-67
replaces Amendment No. 1 to SR-NYSE-2019-67 as originally filed and
supersedes such filing in its entirety.
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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 (1) Chapter One of the Manual to
modify the provisions relating to direct listings to permit a primary
offering in connection with a direct listing and to specify how a
direct listing qualifies for initial listing if it includes both sales
of securities by the company and possible sales by selling
shareholders, (2) Rule 1.1 (Definitions) to modify the definition of
``Direct Listing,'' (3) Rules 7.31 (Orders and Modifiers) and 7.35A
(DMM-Facilitated Core Open and Trading Halt Auctions) to add a
definition of Issuer Direct Offering (``IDO'') Order and describe how
it would participate in a Direct Listing Auction, and (4) remove
references to Direct Listing Auctions in Rule 7.35C.\10\
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    \10\ Trading in all securities on the Exchange, including any
Direct Listing Auctions, is subject to the Pillar trading rules. The
term ``Direct Listing Auction'' is defined in Rule 7.35(a)(1)(E) to
mean a Core Open Auction for the first day of trading on the
Exchange of a security that is a Direct Listing. The term ``Core
Open Auction'' is defined in Rule 7.35(a)(1)(A) to mean the Auction
that opens trading at the beginning of the Core Trading Session, and
for Exchange-listed securities, the term ``Core Trading Session'' is
defined in Rule 7.34(a)(2)(B) to begin for each security with the
Core Open Auction, which can take place during Core Trading Hours
only, which, pursuant to Rule 1.1, begins at 9:30 a.m. Eastern Time
through 4:00 p.m. Eastern Time.
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Amendments to the Manual
    Section 102.01B of the Manual includes initial listing requirements
for a company that has not previously had its common equity securities
registered under the Act, to list its common equity securities on the
Exchange at the time of effectiveness of a registration statement filed
solely for the purpose of allowing existing shareholders to sell their
shares (a ``Selling Shareholder Direct Floor Listing'').\11\ To allow a
company to sell shares on its own behalf in connection with its initial
listing upon effectiveness of a registration statement, without a
traditional underwritten public offering, the Exchange proposes to
amend Section 102.01B. The proposed change would allow a company that
has not previously had its common equity securities registered under
the Act, to list its common equity securities on the Exchange at the
time of effectiveness of a registration statement pursuant to which the
company itself will sell

shares in the opening auction on the first day of trading on the
Exchange (any such listing in which either (i) only the company itself
is selling shares in the opening auction on the first day of trading or
(ii) the company is selling shares and selling shareholders may also
sell shares in such opening auction, is referred to herein as a
``Primary Direct Floor Listing'').
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    \11\ Securities Exchange Act Release No. 82627 (February 2,
2018), 83 FR 5650 (February 8, 2018) (SR-NYSE-2017-30).
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    In considering the initial listing of a company in connection with
a Selling Shareholder Direct Floor Listing, Section 102.01B currently
provides that the Exchange will determine that such company has met the
applicable $100 million aggregate market value of publicly-held shares
requirement based on a combination of both (i) an independent third-
party valuation of the company (a ``Valuation'') and (ii) the most
recent trading price for the company's common stock in a trading system
for unregistered securities operated by a national securities exchange
or a registered broker-dealer (a ``Private Placement Market'').\12\ The
Exchange will attribute a market value of publicly-held shares to the
company equal to the lesser of (i) the value calculable based on the
Valuation and (ii) the value calculable based on the most recent
trading price in a Private Placement Market. Alternatively, in the
absence of any recent trading in a Private Placement Market, Section
102.01B provides that the Exchange will determine that such company has
met its market value of publicly-held shares requirement if the company
provides a Valuation evidencing a market value of publicly-held shares
of at least $250 million.
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    \12\ Section 102.01B currently provides (and the Exchange does
not propose to amend that provision) that any Valuation used for
this purpose in connection with a Selling Shareholder Direct Floor
Listing must be provided by an entity that has significant
experience and demonstrable competence in the provision of such
valuations. The Valuation must be of a recent date as of the time of
the approval of the company for listing and the evaluator must have
considered, among other factors, the annual financial statements
required to be included in the registration statement, along with
financial statements for any completed fiscal quarters subsequent to
the end of the last year of audited financials included in the
registration statement. The Exchange will consider any market
factors or factors particular to the listing applicant that would
cause concern that the value of the company had diminished since the
date of the Valuation and will continue to monitor the company and
the appropriateness of relying on the Valuation up to the time of
listing. In particular, the Exchange will examine the trading price
trends for the stock in the Private Placement Market over a period
of several months prior to listing and will only rely on a Private
Placement Market price if it is consistent with a sustained history
over that several month period evidencing a market value in excess
of the Exchange's market value requirement. The Exchange may
withdraw its approval of the listing at any time prior to the
listing date if it believes that the Valuation no longer accurately
reflects the company's likely market value.
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    In applying this requirement to a Primary Direct Floor Listing, the
Exchange is proposing the following:
     A company would qualify for listing in connection with a
Primary Direct Floor Listing if it will sell at least $100 million in
market value of shares in the opening auction.
     If a company will sell less than $100 million in market
value of shares in the opening auction, a company would qualify for
listing in connection with a Primary Direct Floor Listing if the
aggregate of the market value of publicly-held shares immediately prior
to listing together with the market value of shares the 4company will
sell in the opening auction totals at least $250 million with such
market value calculated using a price per share equal to the lowest
price of the price range established by the issuer in its registration
statement.\13\
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    \13\ For example, if the company is selling five million shares
in the opening auction and there are 45 million shares issued and
outstanding immediately prior to the listing that are eligible for
inclusion as publicly-held shares based on disclosure in the
company's registration statement, then the market value of publicly-
held shares will be calculated based on a combined total of 50
million shares. If the lowest price of the price range disclosed in
the company's registration statement is $10 per share, the Exchange
will attribute to the company a market value of publicly-held shares
of $500 million.
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    Officers, directors or owners of more than 10% of the company's
common stock prior to the opening auction may purchase shares sold by
the company in the opening auction, provided that such purchases are
not inconsistent with general anti-manipulation provisions, Regulation
M, and other applicable securities laws. In addition, in the same way
as for shares of a company listing following a traditional underwritten
IPO, such an insider owner may purchase shares sold by other
shareholders or sell its own shares in the opening auction and in
trading after the opening auction, to the extent not inconsistent with
general anti-manipulation provisions, Regulation M, and other
applicable securities laws. Except as proposed for Primary Direct Floor
Listings, shares held by these types of inside investors are not
included in calculations of publicly-held shares for purposes of
Exchange listing rules.\14\ The Exchange notes that such investors may
acquire in secondary market trades shares sold by the issuer in a
Primary Direct Floor Listing that were included when calculating
whether the issuer meets the market value of publicly-held shares
initial listing requirement. However, the Exchange believes that
because of the enhanced publicly-held shares requirement for a listing
in conjunction with a Primary Direct Floor Listing, which is much
higher than the Exchange's minimum $40 million requirement for a
traditional underwritten IPO, and the neutral nature of the opening
auction process, companies using a Primary Direct Floor Listing would
have an adequate public float and liquid trading market after the
completion of the opening auction.
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    \14\ Shares held by directors, officers, or their immediate
families and other concentrated holdings of 10 percent or more are
excluded in calculating the number of publicly-held shares under
NYSE listing standards.
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    Any company listing in connection with a Primary Direct Floor
Listing or a Selling Shareholder Direct Floor Listing would continue to
be subject to and meet all other applicable initial listing
requirements, including the requirements of Section 102.01A to have 400
shareholders of round lots and 1.1 million publicly-held shares
outstanding at the time of initial listing, and the requirement of
Section 102.01B to have a price per share of at least $4.00 at the time
of initial listing.
    In defining a Selling Shareholder Direct Listing in the proposed
amended rule text, the Exchange proposes to include additional text
specifying that the term Selling Shareholder Direct Listing is only
used for listings where the company is listing without a related
underwritten offering upon effectiveness of a registration statement
registering only the resale of shares sold by the company in earlier
private placements. This proposed added text is intended to clarify the
application of the existing rule and does not substantively change it.
Amendments to Exchange Rules
Amendment to Definition of ``Direct Listing''
    Rule 1.1(f) currently defines the term ``Direct Listing'' to mean a
security that is listed under Footnote (E) to Section 102.01B of the
Manual, which currently only permits a company to list its common
equity securities on the Exchange at the time of effectiveness of a
registration statement filed solely for the purpose of allowing
existing shareholders to sell their shares (i.e., a Selling Shareholder
Direct Floor Listing). Because, as described above, the Exchange
proposes to amend this Section of the Manual to describe both a Primary
Direct Floor Listing and a Selling Shareholder Direct Floor Listing,
the Exchange proposes to similarly amend Rule 1.1(f) to specify that a
Direct Listing can be either a ``Selling

Shareholder Direct Floor Listing'' or a ``Primary Direct Floor
Listing.''
Amendment to Rules 7.31, 7.35A, and 7.35C
    The Exchange proposes to amend Rules 7.31 and 7.35A to add a new
order type and describe how that new order type would participate in a
Direct Listing Auction if a company chooses to list its common equity
securities on the Exchange pursuant to a Primary Direct Floor Listing.
    Currently, under Rule 7.35A, a Direct Listing Auction operates
similarly to an IPO Auction, including that the Exchange does not
disseminate Auction Imbalance Information \15\ and a Designated Market
Maker (``DMM'') may not effect the auction electronically.\16\ In
addition, Rule 7.35A establishes how to determine the Indication
Reference Price for a security that is a Direct Listing \17\ and a
requirement for the DMM facilitating the opening on the first day of
trading of a Direct Listing.\18\
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    \15\ See Rule 7.35(c)(3).
    \16\ See Rule 7.35A(c)(1)(C).
    \17\ See Rule 7.35A(d)(2)(A)(iv). Under Rule 7.35A(d), the
Indication Reference Price is used by the DMM to determine whether a
pre-opening indication would be required under that Rule. Currently,
for a security that is a Direct Listing that has had recent
sustained trading in a Private Placement Market prior to listing,
the Indication Reference Price is most recent transaction price in
that market or, if none, a price determined by the Exchange in
consultation with a financial advisor to the issuer of such
security.
    \18\ See Rule 7.35A(g)(1). Under Rule 7.35A(g), in addition to
the DMM's responsibility for determining the Auction Price for Core
Open Auction and selecting an Auction Price at which all better-
priced orders on the side of any imbalance can be satisfied, a DMM
facilitating the opening on the first day of trading of a Direct
Listing that has not had recent sustained history of trading in a
Private Placement prior to listing, is required to consult with a
financial advisor to the issuer of such security in order to effect
a fair and orderly opening of such security.
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    Because a company would be offering shares in a Primary Direct
Floor Listing, the Exchange proposes to modify the procedures for a
Direct Listing Auction that would be used for a Primary Direct Floor
Listing. These procedures would be applicable to any Primary Direct
Floor Listing, as defined in Section 102.01B of the Manual. As
proposed, to sell its shares in such an Auction, a company would use a
proposed new order type, the IDO Order. As further proposed, a Primary
Direct Floor Listing could be effected only if (i) the Auction Price
would be within the price range specified by the company in its
effective registration statement, and (ii) the full quantity of the IDO
Order, i.e., the shares that the company seeks to sell in the Primary
Direct Floor Listing, can be sold within that price range. In addition,
all better-priced sell orders would need to be satisfied in such
Auction as required by Rule 7.35A(g), and the shares being sold by the
company would have priority over at-priced orders.\19\ Consistent with
current rules, a Direct Listing Auction for a Primary Direct Floor
Listing must be effected manually by the DMM, and, as provided for in
Rule 7.35A(g), the DMM would be responsible for determining an Auction
Price, provided that such price must be within the price range
specified in the effective registration statement.
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    \19\ Pursuant to Rule 7.35(a)(5), the Auction Price is the price
at which an Auction is conducted. A sell order is ``better-priced''
if it is priced lower than the Auction Price, and includes all sell
Market Orders and Market-on-Open (``MOO'') Orders. See Rule
7.35(a)(5)(A). A sell order is ``at-priced'' if it is priced equal
to the Auction Price. See Rule 7.35(a)(5)(B).
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    To effect these changes, the Exchange proposes to amend Rule
7.31(c)(1) to add new subparagraph (D) to describe the Issuer Direct
Offering Order, which would also be referred to as an ``IDO Order.''
\20\ As proposed, an IDO Order would be a Limit Order to sell that is
to be traded only in a Direct Listing Auction for a Primary Direct
Floor Listing. The Exchange also proposes that:
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    \20\ The IDO Order would be an Auction-Only Order. An Auction-
Only Order is a Limit or Market Order that is to be traded only in
an auction pursuant to the Rule 7.35 Series (for Auction-Eligible
Securities) or routed pursuant to Rule 7.34 (for UTP Securities).
See Rule 7.31(c). Rule 7.31(c)(1) specifies the Auction-Only Orders
that are available for a Core Open Auction or Trading Halt Auction.
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     Only one IDO Order may be entered on behalf of the issuer
and only one member organization may enter an IDO Order on behalf of an
issuer (proposed Rule 7.31(c)(1)(D)(i)); \21\
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    \21\ Because an IDO Order would not be entered by the DMM, the
Exchange proposes to amend the last sentence Rule 7.31(c) to add the
IDO Order to the list of order types not available to the DMM. The
amended sentence would provide (new text italicized): ``MOO, MOC,
LOC, IDO, and Closing IO Orders are not available to DMMs.''
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     the limit price of the IDO Order must be equal to the
lowest price of the price range established by the issuer in its
effective registration statement (``Primary Direct Floor Listing
Auction Price Range'') (proposed Rule 7.31(c)(1)(D)(ii));
     the IDO Order must be for the quantity of shares offered
by the issuer, as disclosed in the prospectus in the effective
registration statement (proposed Rule 7.31(c)(1)(D)(iii));
     an IDO Order may not be cancelled or modified (proposed
Rule 7.31(c)(1)(D)(iv)); and
     an IDO Order must be executed in full in the Direct
Listing Auction (proposed Rule 7.31(c)(1)(D)(v)).
    Next, the Exchange proposes to amend Rule 7.35A to establish
additional requirements for a DMM conducting a Direct Listing Auction
for a Primary Direct Floor Listing.
    First, the Exchange proposes that the Indication Reference Price
applicable to a security that is a Primary Direct Floor Listing would
be the lowest price of the price range established by the issuer in its
effective registration statement. In a Primary Direct Floor Listing, a
company would be issuing new shares and would be required to establish
a price range for such securities in its effective registration
statement. Because the Exchange proposes that a Primary Direct Floor
Listing could not open below the lowest price of such price range, the
Exchange proposes that the Indication Reference Price for such security
would be the lowest price of that price range.\22\ To effect this
change, the Exchange proposes to amend Rule 7.35A(d)(2)(A) to add new
subparagraph (v) that would provide that, for a security that is a
Primary Direct Floor Listing, the Indication Reference Price would be
the lowest price of the Primary Direct Floor Listing Auction Price
Range.
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    \22\ For example, if the Primary Direct Floor Listing Auction
Price Range is $10.00 to $20.00, the Indication Reference Price
would be $10.00.
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    Second, the Exchange proposes to amend Rule 7.35A(g) regarding the
Auction Price that the DMM is responsible for determining. As noted
above, the Exchange proposes that a Primary Direct Floor listing must
open at a price within the Primary Direct Floor Listing Auction Price
Range, as set forth in the effective registration statement issued by
the company. In addition, the Exchange proposes that such Auction would
be conducted only if the IDO Order and all better-priced sell orders
can be satisfied at such price. To effect such changes, proposed Rule
7.35A(g)(2) would provide that a DMM would not conduct a Direct Listing
Auction for a Primary Direct Floor Listing if:
     The Auction Price would be below the lowest price or above
the highest price of the Primary Direct Floor Listing Auction Price
Range (proposed Rule 7.35A(g)(2)(A)); \23\ or
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    \23\ For example, if the Primary Direct Floor Listing Auction
Price Range is $10.00 to $20.00, the Direct Listing Auction would
not be conducted at a price below $10.00 or above $20.00.
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     there is insufficient buy interest to satisfy both the IDO
Order and all better-priced sell orders in full (proposed Rule
7.35A(g)(2)(B)).
    Because the DMM is responsible for determining the Auction Price,
these proposed rule changes would make the DMM responsible for
determining

whether the Direct Listing Auction can proceed. If there is
insufficient buy interest and the DMM cannot price the Auction and
satisfy the IDO Order as required by this proposed rule, the Direct
Listing Auction would not proceed and such security would not begin
trading. If a Direct Listing Auction cannot be conducted, the Exchange
would notify market participants via Trader Update that the Primary
Direct Floor Listing has been cancelled and any orders for that
security that have been entered on the Exchange, including the IDO
Order, would be cancelled back to the entering firms.
    Third, the Exchange proposes that when the limit price of the IDO
Order (which is already required to be at the lowest price in Primary
Direct Floor Listing Price Range) is equal to the Auction Price, i.e.,
an at-priced IDO Order, the IDO Order would have priority over other
orders at that price. As noted above, under Rule 7.35A(g), all better-
priced interest is guaranteed to participate in the opening auction for
a Primary Direct Floor Listing. If the IDO Order is better-priced,
i.e., if the Direct Listing Auction is priced above the limit price of
the IDO Order, the IDO Order would be a better-priced order guaranteed
to participate in such Auction. However, under Rule 7.35A(h)(2), at-
priced orders are not guaranteed to participate in an Auction and are
allocated as provided for in Rule 7.35A(h)(2)(A)-(D). Because an IDO
Order must be executed in full in order for the DMM to conduct the
Direct Listing Auction, the Exchange does not believe that an at-priced
IDO Order should be subject to the allocation process specified in Rule
7.35A(h)(2) because it may result in a partial execution of the IDO
Order. Providing priority to an at-priced IDO Order would increase the
potential for the IDO Order to be executed in full, and therefore for
the Primary Direct Floor Listing to proceed. To effect such change, the
Exchange proposes new subparagraph (4) in Rule 7.35A(h), regarding
Auction Allocation, to provide that an IDO Order would be guaranteed to
participate in the Direct Listing Auction at the Auction Price and that
if the limit price of the IDO Order is equal to the Auction Price, the
IDO Order would have priority at that price.
    Fourth, unlike a Direct Listing Auction for a Selling Shareholder
Direct Floor Listing, the registration statement for a Primary Direct
Floor Listing would include a price range within which the company
anticipates selling shares it is offering. Accordingly, Rules
7.35A(d)(2)(A)(iv) \24\ and 7.35A(g)(1) \25\ are not applicable to a
Primary Direct Floor Listing and the Exchange proposes to provide that
the requirements of those Rules would be applicable only to a Selling
Shareholder Direct Floor Listing by amending the text of those Rules to
replace the term ``Direct Listing'' with the term ``Selling Shareholder
Direct Floor Listing.''
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    \24\ Rule 7.35A(d)(2)(A)(iv) currently provides what the
Indication Reference Price will be ``for a security that is a Direct
Listing that has had recent sustained trading in a Private Placement
Market prior to listing, the most recent transaction price in that
market or, if none, a price determined by the Exchange in
consultation with a financial advisor to the issuer of such
security.''
    \25\ Rule 7.35A(g)(1) currently provides: ``When facilitating
the opening on the first day of trading of a Direct Listing that has
not had recent sustained history of trading in a Private Placement
prior to listing, the DMM will consult with a financial advisor to
the issuer of such security in order to effect a fair and orderly
opening of such security.'' The Exchange proposes a non-substantive
amendment to Rule 7.35A(g)(1) to add the word ``Market'' after
``Private Placement.''
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    The Exchange further notes that any services provided by a
financial advisor to the issuer of a security listing in connection
with a Selling Shareholder Direct Floor Listing or a Primary Direct
Floor Listing (the ``financial advisor'') and the DMM assigned to that
security must provide such services in a manner that is consistent with
all federal securities laws, including Regulation M and other anti-
manipulation requirements. For example, when a financial advisor
provides a consultation to the Exchange as required by Rule
7.35A(d)(2)(A)(iv), when the DMM consults with a financial advisor as
required by Rule 7.35A(g)(1), or when a financial advisor otherwise
assists or consults with the DMM as to pricing or opening of trading in
Selling Shareholder Direct Floor Listing or Primary Direct Floor
Listing, the financial advisor and DMM will not act inconsistent with
Regulation M,\26\ and other anti-manipulation provisions of the federal
securities laws, or Exchange Rule 2020.\27\ The Exchange has retained
the Financial Industry Regulatory Authority, Inc. (``FINRA'') pursuant
to a regulatory services agreement to monitor such compliance with
Regulation M and other anti-manipulation provisions of the federal
securities laws and Rule 2020.\28\ To promote clarity and transparency
in Exchange rules regarding the consultation requirements of Rules
7.35A(d)(2)(A)(iv) and 7.35A(g)(1), the Exchange proposes to add
Commentary .10 to Rule 7.35A to provide:
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    \26\ For example, in connection with the Selling Shareholder
Direct Floor Listing of Spotify Technology S.A, the Commission's
Division of Trading and Markets provided a no-action letter relating
to Regulation M that discussed, in part, the role of the financial
advisor and the DMM in such listing. See Letter from Josephine J.
Tao, Assistant Director, Division of Trading and Markets, United
States Securities and Exchange Commission to Ms. Dana G. Fleischman,
Latham & Watkins LLP, dated March 23, 2018, available here: https://www.sec.gov/divisions/marketreg/mr-noaction/2018/spotify-technology-032318-regm.pdf.
    \27\ Exchange Rule 2020, which is identical to FINRA Rule 2020,
provides that ``[n]o member or member organization shall effect any
transaction in, or induce the purchase or sale of, any security by
means of any manipulation, deceptive or other fraudulent device or
contrivance'' (``Rule 2020'').
    \28\ The Exchange expects to issue regulatory guidance in
connection with a company conducting a Primary Direct Floor Listing.
Such regulatory guidance would include a reminder to member
organizations that activities in connection with a Primary Direct
Floor Listing, like activities in connection with other listings,
must be conducted in a manner not inconsistent with Regulation M and
other anti-manipulation provisions of the federal securities laws
and Exchange Rule 2020.

    In connection with a Selling Shareholder Direct Floor Listing,
the financial advisor to the issuer of the security being listed
(``financial advisor'') and the DMM assigned to such security are
reminded that any consultation that the financial advisor provides
to the Exchange as required by paragraph (d)(2)(A)(iv) of this Rule
and any consultation between the DMM and financial advisor as
required by paragraph (g)(1) of this Rule are to be conducted in a
manner that is consistent with the federal securities laws,
---------------------------------------------------------------------------
including Regulation M and other anti-manipulation requirements.

    Finally, the Exchange proposes to amend Rule 7.35C to remove
references to Direct Listing Auctions. Rule 7.35C sets forth the
procedures for the Exchange to facilitate an Auction for one or more
securities if a DMM cannot facilitate an Auction under Rules 7.35A or
7.35B and specifies how such Exchange-facilitated Auctions would
function, including for a Direct Listing Auction. Because of the
importance of the DMM to a Direct Listing Auction, the Exchange
proposes that if a DMM is unable to manually facilitate a Direct
Listing Auction, the Exchange would not proceed with either a Selling
Shareholder Direct Floor Listing or a Primary Direct Floor Listing. To
effect this change, the Exchange proposes to amend Rule 7.35C(a) to
specify that the Exchange would not facilitate a Direct Listing Auction
and amend Rules 7.35C(a)(3), (b)(1), and (b)(3) to delete references to
a Direct Listing Auction.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Exchange Act,\29\ in general, and furthers the
objectives of Section 6(b)(5) of the Exchange Act,\30\ in particular 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.
---------------------------------------------------------------------------

    \29\ 15 U.S.C. 78f(b).
    \30\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed amendment to the Manual is
consistent with the protection of investors. The proposal would require
that a company in a Primary Direct Floor Listing (1) sell at least $100
million of its listed securities in the opening auction, or (2) have an
aggregate market value of publicly-held shares immediately prior to
listing together with the market value of shares the company sells in
the opening auction total at least $250 million, with such market value
calculated using a price per share equal to the lowest price of the
price range established by the issuer in its registration statement.
The Exchange notes that a company may list on the NYSE in connection
with its initial public offering with a market value of publicly-held
shares of $40 million and that, in the Exchange's experience in listing
IPOs, a liquid trading market develops after listing for issuers with a
much smaller value of publicly-held shares than the Exchange
anticipates would exist after the opening auction in a Primary Direct
Floor listing under the proposed market value of publicly-held shares
requirements. Consequently, the Exchange believes that these
requirements would provide that any company conducting a Primary Direct
Floor Listing would be of a suitable size for Exchange listing and that
there would be sufficient liquidity for the security to be suitable for
auction market trading.
    Officers, directors or owners of more than 10% of the company's
common stock prior to the opening auction may purchase shares sold by
the company in the opening auction, in the event that such purchases
are not inconsistent with general anti-manipulation provisions,
Regulation M, and other applicable securities laws. In addition, in the
same way as for shares of a company listing following a traditional
underwritten IPO, such an insider owner may purchase shares sold by
other shareholders or sell its own shares in the opening auction and in
trading after the opening auction, to the extent not inconsistent with
general anti-manipulation provisions, Regulation M, and other
applicable securities laws. Except as proposed for Primary Direct Floor
Listings, shares held by these types of inside investors are not
included in calculations of publicly-held shares for purposes of
Exchange listing rules. The Exchange notes that after initial listing
such investors may acquire in secondary market trades shares sold by
the issuer in a Primary Direct Floor Listing that were included when
calculating that issuer's compliance with the market value of publicly-
held shares initial listing requirement. However, the Exchange believes
that because of the enhanced publicly-held shares requirement for a
listing in conjunction with a Primary Direct Floor Listing, which is
much higher than the Exchange's minimum $40 million requirement for a
traditional underwritten IPO, and the neutral nature of the opening
auction process, companies using a Primary Direct Floor Listing will
have an adequate public float and liquid trading market after the
completion of the opening auction.
    The Exchange believes that the proposed amendments to Exchange
Rules to amend the definition of Direct Listing and Rules 7.31 and
7.35A to describe how an IDO Order would participate in a Direct
Listing Auction for a Primary Direct Floor Listing would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because they would guarantee that, if the
Direct Listing Auction for a Primary Direct Floor Listing occurs, all
shares offered by the company would participate.
    Unlike an IPO, a company undergoing a Primary Direct Floor Listing
would not have an underwriter to guarantee that a specified number of
shares would be sold by the company within a price range established in
the company's effective registration statement. To ensure that the
Direct Listing Auction is conducted consistent with an issuer's
effective registration statement, the Exchange proposes that the Direct
Listing Auction for a Primary Direct Floor Listing under Section
102.01B of the Manual, would not proceed unless the quantity of shares
specified in the IDO Order would be sold in such Auction within a price
range specified by the company in its registration statement. This
certainty would be effected in two ways. First, the proposed IDO Order
would be required to be equal to the total number of shares disclosed
as being offered by the company in the prospectus included in the
effective registration statement filed in connection with its listing.
If the IDO Order cannot be satisfied in full, then the Direct Listing
Auction would not proceed. Second, the Direct Floor Auction for a
Primary Direct Floor Listing would be required to be priced within the
range established by the company in its effective registration
statement.
    The Exchange further believes that these proposed changes would
remove impediments to and perfect the mechanism of a free and open
market and a national market system because they are designed to
function seamlessly with the existing process for a DMM-facilitated
Direct Listing Auction, including the requirement that such Auction be
facilitated manually by a DMM, the process for publishing pre-opening
indications, and the requirement that all better-priced sell orders are
guaranteed to participate in such Auction. In addition, the proposed
changes are designed to protect investors and the public interest
because they would provide an opportunity for the Primary Direct Floor
Listing to proceed so that the issuer's securities can be listed and
begin trading on the secondary market. Accordingly, the Exchange
believes that it would be consistent with this goal for an at-priced
IDO Order, which must be satisfied in full, to have priority over other
at-priced orders if the limit price of the IDO Order is equal to the
Auction Price. Proposed Rule 7.35A(h)(4) would eliminate the potential
for a partial execution of the IDO Order and provide greater
opportunity for the IDO Order to be executed in full, thus allowing the
Direct Listing Auction to proceed.
    The Exchange believes the proposed amendments to Rule 7.35C would
remove impediments to and perfect the mechanism of a fair and orderly
market and a national market system because the Exchange believes that
having the DMM manually facilitate a Direct Listing Auction would
promote a fair and orderly auction process for such an Auction.
Therefore, if the DMM is unavailable to facilitate such Direct Listing
Auction manually, the Exchange would not proceed with facilitating a
Direct Listing Auction for either a Selling Shareholder Direct Floor
Listing or a Primary Direct Floor Listing.

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 amendments
would not impose any burden on competition, but would rather increase
competition by

providing new pathways for companies to access the public markets.

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. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as modified by Amendment No. 2, 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-2019-67 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-2019-67. 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-2019-67, and should be submitted on
or before July 21, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
---------------------------------------------------------------------------

    \31\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-14013 Filed 6-29-20; 8:45 am]
BILLING CODE 8011-01-P


              Supporting Statement for a Request for OMB Review
                       Under the Paperwork Reduction Act

1. 	IDENTIFICATION OF THE INFORMATION COLLECTION

	1(a) 	Title and Number of the Information Collection

                                                                         Title:
Assessment of Environmental Performance Standards and Ecolabels for Federal Procurement
                                                                   EPA ICR No.:
2516.01
                                                               OMB Control No.:
2070-NEW
                                                                 Docket ID No.:
EPA-HQ-OPPT-2014-0838

	1(b) 	Short Characterization/Abstract

      On November 27, 2013, EPA issued for public comment Draft Guidelines for Product Environmental Performance Standards and Ecolabels for Voluntary Use in Federal Procurement; see Attachments 5 and 6. As stated in the Federal Register notice (78 FR 70938; see Attachment 3), EPA's goal in developing these Guidelines is to create a "transparent, fair, and consistent approach to selecting product environmental performance standards and ecolabels to support the Agency's mission and federal sustainable acquisition mandates." The fundamental aim of the Guidelines is to establish a cross-sector framework to be used in recognizing non-governmental environmental standards (and consequently, environmentally preferable products meeting these standards) for use in federal procurement.

      The draft Guidelines include four sections:

      1. Guidelines for the Process for Developing Standards refers to the procedures used to develop, maintain, and update an environmental standard.

      2. Guidelines for the Environmental Effectiveness of the Standards refers to the criteria in the environmental standard or ecolabel that support the claim of environmental preferability.

      3. Guidelines for Conformity Assessment refers to the procedures and practices by which products are assessed for conformity to the requirements specified by standards and ecolabeling programs.

      4. Guidelines for Management of Ecolabeling Programs refers to the organizational and management practices of an ecolabeling program.

      EPA has responded to public comments and released a new version of the Guidelines at http://www.epa.gov/draftGuidelines/responses.html. The majority of public comments supported EPA undertaking -- with key external entity and stakeholder participation -- additional work to further refine the Guidelines and test a potential approach to assessing standards and ecolabels. Therefore, in this next phase of work, EPA has contracted with Resolve to convene a coordinating Governance Committee, product category-specific multi-stakeholder panels, and an independent assessment entity, Industrial Economics, to develop and pilot test an approach in three sectors.

      EPA has chosen the following three purchase categories to pilot in 2016: furniture, building flooring, and building paints/coatings. An additional to-be-determined product category may be addressed depending upon available resources and other considerations.

      These sectors were chosen because they meet some or all of the following criteria:
 Potentially significant environmental and/or human health impact (based on lifecycle assessments and hazard and risk assessments)
 Opportunity for environmental and/or human health improvement through private sector standards/ecolabels;
 Significant volume of federal purchases; and
 Current federal sustainable acquisition mandates in the category are limited, out-of-date, and/or could be augmented with private sector standards.

2. 	NEED FOR AND USE OF THE COLLECTION

	2(a) 	Need/Authority for the Collection

	EPA is engaging in this collection pursuant to the authority in the Pollution Prevention Act (42 U.S.C.A. section 13103(b)(11); see Attachment 1) which requires EPA to "Identify opportunities to use Federal procurement to encourage source reduction" and section 12(d) of the "National Technology Transfer and Advancement Act of 1995" (15 U.S.C. 272 note; hereinafter "the NTTAA;" see Attachment 2), which requires Federal agencies to "use technical standards that are developed or adopted by voluntary consensus standards bodies, using such technical standards as a means to carry out policy objectives or activities." Federal agencies need this assessment per the Guidelines to determine which, among sometimes dozens of private sector standards within a single purchase category, are appropriate and effective in meeting federal procurement goals and mandates.

      Federal agencies must comply with the following sustainability-related purchasing mandates:
 Section 3(i)(iii) of Executive Order 13693 (Planning for Federal Sustainability in the Next Decade) (March 19, 2015);
 Section 6002 of the Resource Conservation and Recovery Act;
 Section 9002 of the Farm Security and Rural Investment Act of 2002;
 The Energy Policy Act; and
 The Federal Acquisition Regulation (FAR), including FAR Part 23 (Environment, Energy and Water Efficiency, Renewable Energy Technologies, Occupational Safety, and Drug-Free Workplace) (see http://www.whitehouse.gov/omb/procurement_index_green).

      Via the NTTAA, Congress required Federal agencies to "use technical standards that are developed or adopted by voluntary consensus standards bodies, using such technical standards as a means to carry out policy objectives or activities," except when an agency determines that such use "is inconsistent with applicable law or otherwise impractical." Office of Management and Budget (OMB) Circular A-119 (titled "Federal Participation in the Development and Use of Voluntary Consensus Standards and in Conformity Assessment Activities") reaffirms Federal agency use of non-governmental standards in procurement.

      While Federal purchasing policy is clear for the several standards and ecolabels that are listed in statute, regulation, or Executive Order, the lack of independently assessed information about and federal guidance on using other product environmental performance standards and ecolabels often results in an inconsistent approach by Federal purchasers and confusion and uncertainty for vendors and manufacturers.

	2(b) 	Practical Utility/Users of the Data

	As envisioned by EPA and supported by public comment, it would not be practical for individual procurement officers or even individual federal agencies to assess and make determinations regarding which standards and ecolabels are appropriate and effective in meeting federal procurement goals and mandates. Therefore, EPA is proposing to test an approach that could serve government-wide interest in assessing and selecting standards and ecolabels to support the aforementioned environmentally preferable purchasing goals and mandates in a fair, transparent, and consistent manner based on agreed upon guidelines and independent assessment.

	The guidelines to be used for assessing standards and ecolabels include criteria for both the process by which standards and ecolabels are developed and managed and the effectiveness of the standards and ecolabels in protecting environmental and human health. Some of this information can be collected by reading the standard; other aspects need to be collected via assessment tools and/or interviews.

3. 	NON-DUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA

	3(a) 	Non-duplication

	There has been no other effort to systematically collect such comprehensive information about standards and ecolabels. Additionally, where public sources of data are available, they will be consulted in lieu of asking respondents to do so.

      3(b) 	Public Notice Required Prior to ICR submission to OMB

	EPA provided a 60-day public notice and comment period that ended on May 18, 2015 (80 FR 14372, March 19, 2015). EPA received comments from nine respondents during the comment period. The respondents were: Business and Institutional Furniture Manufacturers Association (BIFMA); Forest Stewardship Council US; Forest Stewardship Council; NSF International; Sustainable Forestry Initiative, Inc.; SCS Global Services; TUV Rheinland; UL LLC; and World Wildlife Fund. Copies of the comments that EPA received are found in Docket ID Number EPA-HQ-OPPT-2014-0838. A copy of EPA's response to the comments is included as Attachment 7.

	3(c) 	Consultations

	In 2011 and 2012, EPA and the General Services Administration (GSA) convened several listening sessions to solicit input regarding the Federal Government's role in sustainability. A number of sessions were held following the release of the National Academy of Sciences report "Sustainability and the U.S. EPA." Other sessions were held under the auspices of the Interagency Workgroup established by GSA per section 13 of Executive Order 13514.

      EPA heard some common themes from suppliers, manufacturers, environmental organizations, multi-stakeholder bodies, regulatory partners, standards development organizations, ecolabel programs, and others. Key points included: (1) The desire for greater clarity in the marketplace regarding standards and ecolabels and (2) the opportunity to leverage the Federal Government's purchasing power toward sustainability goals.

	The Interagency Workgroup developed an initial set of draft Guidelines and contracted with Big Room Inc. (developers of www.EcoLabelIndex.com) to test the feasibility and appropriateness of the draft Guidelines. Big Room Inc. conducted a survey of a subset of government and non-governmental (less than nine) environmental performance standards and ecolabel developers. Based on the results of the study and external stakeholder input, EPA revised the draft Guidelines and released them for public comment in November 2013.

	Additionally, under 5 CFR 1320.8(d)(1), OMB requires agencies to consult with potential ICR respondents and data users about specific aspects of ICRs before submitting an ICR to OMB for review and approval. In accordance with this regulation, EPA submitted questions to nine parties via e-mail. The individuals contacted were:

	Mark Rossolo, UL<EMAIL_ADDRESS>            Jessica Evans, NSF<EMAIL_ADDRESS>           	Mark Petruzzi, Green Seal<EMAIL_ADDRESS>	Brad Miller, BIFMA<EMAIL_ADDRESS>	Dean Thompson, Resilient Floor Coverings<EMAIL_ADDRESS>	Bridgett Luther, Cradle to Cradle<EMAIL_ADDRESS>	Robert Frisbee, Green Electronics Council<EMAIL_ADDRESS>	Steve Mawn, ASTM<EMAIL_ADDRESS>	Anne Calas, ANSI<EMAIL_ADDRESS>
	EPA received one response to its solicitation for consultations. Copies of EPA's consultation e-mail to the above potential respondents, and of the response that EPA received, are included in Attachment 8.

	3(d) 	Effects of Less Frequent Collection

	This pilot effort will inform the frequency of information collection appropriate for Federal procurement needs. It is likely that the frequency of information collection will be dependent upon 1) future business models for collection (e.g., if there is a greater reliance on the private sector's conformity assessment infrastructure versus federal sponsorship/funding of assessments), 2) the speed of market transformation toward sustainability in particular sectors, and 3) changes in standards and ecolabel trends in particular sectors.

	3(e) 	General Guidelines

	The information collection activities discussed in this ICR comply with all regulatory guidelines under 5 CFR 1320.5(d)(2).

      3(f) 	Confidentiality

	It is not expected that any information collected in this ICR will involve confidential business or trade secret information.

	3(g) 	Sensitive Questions

	The information collection activities discussed in this document do not involve any sensitive questions.

4.	THE RESPONDENTS AND THE INFORMATION REQUESTED

	4(a) 	Respondents/NAICS Codes

      Respondents will be standards development organizations, ecolabel programs, and certification entities that have product environmental performance standards and/or ecolabels that (1) cover one or more of the three (3) identified product categories; and (2) could be considered for use in United States federal procurement per Executive Order 13693, FAR 23.103, and U.S. government standards policy, as a part of the pilot project.

      EPA has chosen the following three (3) purchase categories to pilot in 2015  -  furniture, building flooring, and building paints/coatings. An additional to-be-determined sector may be piloted, depending upon available resources and other considerations.

      NAICS codes:

      Furniture, for example:
      337122 Nonupholstered Wood Household Furniture Manufacturing
		337121 Upholstered Household Furniture Manufacturing
      337124 Metal Household Furniture Manufacturing
      337211 Wood Office Furniture Manufacturing
            337214 Office Furniture (except Wood) Manufacturing
            337127 Institutional Furniture Manufacturing
	Flooring, for example:
		314110 Carpet and Rug Mills
		238330 Flooring Contractors
		321918 Other Millwork (including Flooring)
		326199 All Other Plastics Product Manufacturing
		327120 Clay Building Material and Refractories Manufacturing
	Paints/Coatings, for example:
		325510 Paint and Coating Manufacturing

      These sectors were chosen because they meet some or all of the following criteria:
 Potentially significant environmental and/or human health impact (based on lifecycle assessments and hazard and risk assessments)
 Opportunity for environmental and/or human health improvement through private sector standards/ecolabels;
 Significant volume of federal purchases; and
 Current federal sustainable acquisition mandates in the category are limited, out-of-date, and/or could be augmented with private sector standards.

      4(b) 	Information Requested

      Respondents will:
 Self-assess per product-category specific checklists based on EPA's draft Guidelines for Product Environmental Performance Standards and Ecolabels, and
 Participate in a follow-up interview(s), as necessary, with an Independent Assessment Entity.

5. 	THE INFORMATION COLLECTED - AGENCY ACTIVITIES, COLLECTION
	METHODOLOGY, AND INFORMATION MANAGEMENT

	This section provides information on the Agency activities that correspond with each piece of information collected, data management, small business burden, and collection schedules.

	5(a) 	Agency Activities

	EPA will be contracting with an entity (or entities) to convene the multi-stakeholder panels charged with developing the checklists by which standards and ecolabels will be independently assessed. EPA subject matter experts will participate in the multi-stakeholder panels (one per panel), which will follow consensus decision-making approaches.

	5(b) 	Collection Methodology and Management

	An independent assessment entity, Industrial Economics, has been subcontracted by EPA's contractor, Resolve, to manage the information collection per internationally recognized conformity assessment protocols (e.g., ISO, ANSI).

	5(c) 	Small Entity Flexibility

	It is expected that some of the participants in the pilot effort will be small standards development and ecolabel program entities. The pilot shall be designed to minimize respondent burden while obtaining sufficient and accurate information. In addition, given the voluntary nature of the collection, it is expected that respondents will participate only if the benefits of participation (greater access to the federal marketplace) outweigh the information collection burden.

	5(d) 	Collection Schedule

	Collection of information for the pilot program is anticipated to be completed by the end of 2016. The need for and timing of future collection of information will be determined, in consultation with other federal agencies and the public, following the pilot.

6. 	ESTIMATING THE BURDEN AND COST OF THE COLLECTION

      6(a) 	Estimating Respondent Burden and Cost

      Table 1 presents the estimated respondent burden hours and costs associated with the information collection activities under this ICR. EPA based its burden estimates on a survey of a subset of government and non-governmental (less than 9) environmental performance standards and ecolabel developers. The survey respondents were contacted for an interview following the survey and were asked how long it had taken them to complete the survey. Two respondents took as little as 30 minutes to complete the survey, seven respondents took 2-6 hours, two respondents took 16 hours, and one respondent (who covered three different ecolabels in its responses) took 50-60 hours. The average time spent per ecolabel on completing the survey was 8.5 hours.

      The average burden is estimated to be 8.5 hours per response. This estimate is based on the length of time needed to complete an assessment. Only standard development organizations and ecolabels who volunteer for assessment will be included in the pilot program. For each of the four product categories, EPA expects 5 respondents to volunteer to complete the assessment. Each respondent is expected to provide up to 2 responses. For the four product categories, there is an estimated total burden of 340 hours.

      In order to estimate total respondent cost associated with this ICR, wages for managerial and professional/technical labor were taken from the Bureau of Labor Statistics (BLS) Employer Costs for Employee Compensation (ECEC) data, for December 2013, for manufacturing industries. The cost of fringe benefits such as paid leave and insurance, specific to each labor category, are taken from the same ECEC series. Fringe benefits as a percent of wages are calculated separately for each labor category. For example, for December 2013, the average wage rate for professional/technical labor was $39.70, the average fringe benefit was $21.14. Fringe benefits as a percent of wages were $21.14/$39.70, or approximately 53.3 percent.

      An additional loading factor of 17 percent is applied to wages to account for overhead. This approach is used for consistency with Office of Pollution Prevention and Toxics economic analyses for two major rulemakings: Wage Rates for Economic Analyses of the Toxics Release Inventory Program (2002), and the Revised Economic Analysis for the Amended Inventory Update Rule: Final Report (2002). This overhead loading factor is added to the benefits loading factor, and the total is then applied to the base wage to derive the fully loaded wage. For example, the December 2013 fully loaded wage for professional/technical labor is $39.70 x (1+0.532494 + 0.17) = $67.59.

      The average cost per response is $617.78. This cost is calculated by dividing the average burden of 8.5 hours per response by 4.25 hours of managerial labor and 4.25 hours of professional/technical labor.

Table 1. Estimated Burden and Cost to Respondents
                              Product Categories
                             Number of Respondents
                            Response per respondent
                 Total Burden and Wage Rate by Labor Category
                             Total Burden (Hours)
                               Total Cost ($)[1]

                                  Managerial
                                   Technical

                                     Hours
                                   Wage ($)
                                     Hours
                                   Wage ($)

Furniture
                                       5
                                       2
                                     4.25
                                    $77.77
                                     4.25
                                    $67.59
                                      85
                                                                      $6,177.80
Building Flooring
                                       5
                                       2
                                     4.25
                                    $77.77
                                     4.25
                                    $67.59
                                      85
                                                                      $6,177.80
Building Paints/ Coatings
                                       5
                                       2
                                     4.25
                                    $77.77
                                     4.25
                                    $67.59
                                      85
                                                                      $6,177.80
Other Category
                                       5
                                       2
                                     4.25
                                    $77.77
                                     4.25
                                    $67.59
                                      85
                                                                      $6,177.80
Total
                                      20
                                      --
                                      --
                                      --
                                      --
                                      --
                                      340
                                                                     $24,711.20
[1]Total Cost is calculated by multiplying burden hours by the wage rate for each labor category and summing across labor categories, and then multiplying by total number of responses.

	6(b) 	Estimating Agency Burden and Cost

	Table 2 presents the estimated Agency burden hours and costs associated with the information collection activities under this ICR. EPA based its burden estimates on previous Agency efforts in convening multi-stakeholder groups and developing environmentally preferable purchasing guidance. In addition, EPA's contractor statement of work for this effort has been negotiated and awarded at this level of effort.

	Agency wage rate data used to calculate labor costs were gathered from the U.S. Office of Personnel Management Salary Table 2013-DCB, for a GS-14, step 5, employee in the Washington, D.C. area. A loading factor of 1.6 was applied to the base rate to arrive at the 2013 loaded salary of $190,781 per year. The hourly wage rate was computed by dividing the loaded wage by 2,080 hours, the hours associated with a full time employee. This loaded hourly wage rate of $91.72 was used in calculations of Agency cost.

Table 2. Estimated Burden and Cost to Agency
                              Collection Activity
                              EPA Burden (Hours)
                                 EPA Costs ($)
Develop sector specific assessment tools/checklists based on draft guidelines
                                     3,000
                                   $275,160
Issue assessment tool/checklist to applicant SDOs and ecolabel programs (respondents)
                                      50
                                    $4,586
Follow up with respondents via phone interviews
                                      250
                                    $22,930
Prepare analysis and report of the assessment results
                                      400
                                    $36,688
Determine if/how to recognize conforming standards and ecolabels
                                      300
                                    $27,516
                                                                          Total
                                     4,000
                                   $366,880

	6(c) 	Bottom Line Burden Hours and Cost Tables

 Respondent Tally

	Table 3 summarizes the total annual estimated respondent burden and cost. These estimates represent the average burden in any given year over the three years covered by this ICR. However, the assessment tool and its respective results are only expected to be conducted once over the three-year period.

Table 3. Total Annual Estimated Respondent Burden and Cost Summary
                          Total Number of Respondents
                                 Burden Hours
                                  Annual Cost
                                      20
                                      340
                                  $24,711.20

 Agency Tally

	Table 4 summarizes the total annual estimated Agency burden and cost (including contractor cost). These estimates represent the average burden in any given year over the three years covered by this ICR. However, the assessment tool and its respective results are only expected to be conducted once over the three-year period.

Table 4. Total Annual Estimated Agency Burden and Cost Summary
                                 Burden Hours
                                  Annual Cost
                                     4,000
                                   $366,880

	6(d) 	Reasons for Change in Burden

	Since this is a new ICR, a discussion of change in burden is not applicable.

      6(e) 	Burden Statement

      The annual public burden for this collection of information is estimated to be 8.5 hours per response. Burden is defined in 5 CFR 1320.3(b). An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control number for this information collection appears above. The OMB control numbers for EPA's regulations in title 40 of the CFR, after appearing in the Federal Register, are listed in 40 CFR part 9 and included on the related collection instrument or form, if applicable.

	The Agency has established a public docket for this ICR under Docket ID No. EPA-HQ-OPPT-2014-0838, which is available for online viewing at http://www.regulations.gov, or in-person viewing at the Pollution Prevention and Toxics Docket in the EPA Docket Center (EPA/DC). The EPA/DC Public Reading Room is located in the EPA West Building, Room 3334, 1301 Constitution Ave., N.W., Washington, DC. The EPA/DC Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the EPA/DC Public Reading Room is<PHONE_NUMBER>, and the telephone number for the Pollution Prevention and Toxics Docket is<PHONE_NUMBER>.

	You may submit comments regarding the Agency's need for this information, the accuracy of the provided burden estimates and any suggested methods for minimizing respondent burden, including the use of automated collection techniques. Comments may be submitted to EPA electronically through http://www.regulations.gov or by mail to: EPA Docket Center, Environmental Protection Agency, Mail Code 28221T, 1200 Pennsylvania Ave., NW, Washington, DC 20460.  You can also send comments to OMB, addressed to "OMB Desk Officer for EPA" and referencing OMB Control No. 2070-NEW (EPA ICR No. 2511.01) via email to<EMAIL_ADDRESS>Include docket ID No. EPA-HQ-OPPT-2014-0838 and OMB control number 2070-NEW (EPA ICR No. 2516.01) in any correspondence.

7. 	ATTACHMENTS TO THE SUPPORTING STATEMENT

Attachments to the supporting statement are available in the public docket established for this ICR under docket identification number EPA - HQ - OPPT-2014-0838. The attachments are available for online viewing at http://www.regulations.gov or otherwise accessed as described in section 6(e) of the supporting statement.

Attachment 1:	Pollution Prevention Act, 42 U.S.C. 13101 et seq.

Attachment 2:	National Technology Transfer and Advancement Act of 1995, 15 U.S.C. 3701 et seq.

Attachment 3:	Federal Register Notice, November 27, 2013, "Draft Guidelines for
			Product Environmental Performance Standards and Ecolabels for
			Voluntary Use in Federal Procurement" (78 FR 70938)

Attachment 4:	Federal Register Notice, February 27, 2014, "Draft Guidelines for Product
			Environmental Performance Standards and Ecolabels for Voluntary Use in
			Federal Procurement" (79 FR 11102)

Attachment 5:	Final Pilot Assessment Criteria

Attachment 6:	Information Collection Instrument

Attachment 7:	Copies of Public Comments and EPA's Response to Comments

Attachment 8:	Copy of EPA's Consultation E-mail to Potential Respondents and Copy of Response that EPA Received