Update: The NYSE has withdrawn the proposed rule change.

On January 15, 2016, the NYSE issued a proposed rule change that would amend Sections 902.02 and 902.03 of its Listed Company Manual to change the initial listing fees and total annual fees applicable to issuers that list tracking stock on the NYSE. The proposal would also amend Section 907.00 of the Listed Company Manual to exclude issuers whose only listed class of equity security is tracking stock from certain complimentary products and services currently offered to listed issuers.

For this purpose, the NYSE describes tracking stock as a class of common stock of an issuer that is:

The proposed rule change requires SEC approval.

Under current Section 902.03, an issuer must pay the following fees the first time it lists a class of common shares on the NYSE:

Currently, minimum and maximum listing fees of $125,000 and $250,000, respectively, apply the first time an issuer lists a class of common shares on the NYSE (these include the one-time charge of $50,000).

Under the proposed rule change, issuers whose only equity security listed on the NYSE is a tracking stock would be subject to a fixed initial listing fee (including the one-time charge) of $100,000.

Under current Section 902.03, an issuer must pay an annual fee for each class or series of security listed on the NYSE. An issuer's primary class of common shares is subject to a minimum annual fee of $52,500, and is based on the number of shares issued and outstanding, currently charged at a rate of $0.001025 per share. Each additional class of common shares, including tracking stock, is currently subject to a minimum annual fee of $20,000, and is otherwise subject to the same per share rate as for the primary class of common shares.

Currently, Section 902.02 caps the total fees that an issuer may pay to the NYSE in a calendar year to $500,000 (Total Maximum Fee). The proposed rule change would establish a separate maximum annual fee of $200,000 for the listing of any tracking stock, regardless of whether the issuer has another class of equity security listed on the NYSE (Total Maximum Tracking Stock Fee). Further, any fees an issuer pays for the listing of a tracking stock would also count toward its Total Maximum Fee. The proposal would also amend Section 902.03 to clarify that the annual fee rates paid in relation to a primary class of equity securities apply in the case of a tracking stock that is an issuer's only listed common equity security.

Current Section 907.00 sets out certain complimentary products and services that are offered to certain listed issuers. The proposed rule change would exclude issuers of tracking stock from receiving these products and services, unless those issuers are entitled to them in connection with their listing of another class of equity securities. The proposal states the NYSE's belief that the services offered in Section 907.00 are less desirable to issuers of tracking stock, and that these issuers would prefer to pay lower fees instead of receiving the services.

To learn more about the listing requirements for the NYSE and other exchanges, see Practice Note, Selecting a US Securities Exchange.