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Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Notices
on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below.
The self-regulatory organization has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
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1. Purpose The Exchange proposes to amend Rule 14.501d2Aiii to specify the process for enforcing compliance with the Long-Term Policies pursuant to LTSE Rule 14.425 under LTSE Rule Series 14.500.3 LTSE Rule 14.425a requires Companies to adopt and publish the following policies: A LongTerm Stakeholder Policy; a Long-Term Strategy Policy; a Long-Term Compensation Policy; a Long-Term Board Policy; and a Long-Term Investor Policy collectively, the Policies.
While Companies have flexibility to develop appropriate Policies for their businesses, each of the Policies must be consistent with the set of principles articulated in LTSE Rule 14.425b collectively, the Principles.4
Companies also are required to at least annually review their Policies, make them publicly available and free of charge on or through their websites, and provide related disclosures in certain filings with the Commission, as provided for in LTSE Rule 14.425c.
The Exchange enforces the provisions of LTSE Rule 14.425 by ensuring that each LTSE-listed issuer has addressed all of the elements enumerated in each of the Policies, consistent with the Principles, and has made the Polices publicly available without cost.5 A
number of rules in the Rulebook enable the Exchange to ensure such compliance. First, with respect to identification of a deficiency, LTSE Rule 14.500a provides that LTSE staff is responsible for identifying deficiencies that may lead to delisting. Additionally, LTSE Rule 14.410 requires a Company provide the Exchange with prompt notification after an Executive Officer of the Company becomes aware of any noncompliance by the Company with the LTSE Rule Series 14.400, which includes Rule 14.425. Second, the Exchange retains the authority to elicit 3 See LTSE Rule 14.001 The consequences of a failure to meet LTSEs listing standards are contained in the LTSE Rule Series 14.500..
4 See Securities Exchange Act Release No. 86722
August 21, 2019, 84 FR 44953 August 27, 2019
order approving proposed rule change to adopt LTSE Rule 14.425.
5 Id. at 44954.

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necessary information for reaching a deficiency determination, as LTSE Rule 14.207a1 provides that the Exchange may request any additional information or documentation, public or non-public, deemed necessary to make a determination regarding a Companys continued listing, and a Company may be denied continued listing if it fails to provide such information within a reasonable period of time.6
Third, LTSE Rule 14.501 sets forth the provisions regarding the Exchanges process for notifying Companies regarding different types of deficiencies and their corresponding consequences.
There are four types of Company deficiency notifications that the Exchange may issue pursuant to LTSE
Rule 14.501a: i Staff Delisting Determinations, which are notifications of deficiencies that, unless appealed, subject the Company to immediate suspension and delisting; ii notifications of deficiencies for which the Company may submit a plan of compliance for staff review; iii notifications of deficiencies for which a Company is entitled to an automatic cure or compliance period; and iv Public Reprimand Letters. LTSE Rule 14.501d identifies the deficiencies that fall within each of these four categories.7
The proposed rule change would amend LTSE Rule 14.501d2Aiii to specify that deficiencies relating to LTSE Rule 14.425 would include those for which a Company may submit a plan of compliance Plan of Compliance for staff review, similar to how other corporate governance rules are handled generally in LTSE Rule 14.501d2Aiii.8 The timeline for such a Plan of Compliance is governed by LTSE Rule 14.501d2C, which establishes that a Company has 45
calendar days to submit a plan to regain compliance. LTSE staff may extend this deadline for up to an additional 5
calendar days upon good cause shown and may request such additional information from the Company as is 6 In
addition, the Exchange plans to monitor Company compliance with Rule 14.425 annually and on an ad hoc basis.
7 LTSE Rule 14.501d provides that in case of a deficiency not specified in subparagraphs 14, LTSE staff will issue either a Staff Delisting Determination or a Public Reprimand Letter.
8 See, e.g., LTSE Rules 14.408a Meetings of Shareholders, 14.408c Quorum, 14.411Review of Related Party Transactions, 14.412 Shareholder Approval, 14.406 Code of Conduct, 14.407a4D Partner Meetings of Limited Partners, 14.407a4E Quorum of Limited Partnerships, 14.407a4G Related Party Transactions of Limited Partnerships, 14.413
Voting Rights, or 14.414 Internal Audit Function.
The proposed rule change also would remove two erroneous ors in LTSE Rule 14.501d2Aiii.

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necessary to make a determination regarding whether to grant such an extension. The Exchange believes that this time period appropriately balances the interests of the Exchange in ensuring compliance with its listing standards with the application of principles-based listing standards by the Company.9
The process for reviewing such a Plan of Compliance is set forth in LTSE Rule 14.501d2B and would be unchanged. Under this subparagraph B, LTSE may provide the Company with up to 180 days to regain compliance with certain exceptions, issue a Staff Delisting Determination letter, or issue a Public Reprimand Letter in accordance with LTSE Rule 14.501d4. As set forth in LTSE Rule 14.500a, a Public Reprimand Letter or Staff Delisting Determination, upon timely request by a Company, is subject to review by a Listings Review Committee, which will adjudicate the request in accordance with procedures and timelines set forth in LTSE Rules 14.502, 14.504 and 14.505.
LTSE Rule 14.425 provides Companies flexibility in developing what they believe to be appropriate Policies for their businesses; however, each of the required Policies must include certain minimum elements, and must be consistent with the Principles.
The Exchange has represented to the Commission that it will enforce the provisions of LTSE Rule 14.425 by ensuring that each Company has addressed all of the requirements enumerated for each of the prescribed Policies, that the Companys Policies are consistent with the Principles, and it has made the Policies publicly available without cost.10 Additionally, LTSE Rule 14.425c mandates that Companies annually review their Policies because the Exchange has anticipated that, over time, Companies may choose to or need to recalibrate their Policies with new objectives or initiatives, provided that the amended Policies continue to align with the Principles noted in LTSE Rule 9 Notwithstanding the mandated period to submit a Plan of Compliance and regain compliance under LTSE Rule 14.501d2, as set forth in LTSE Rule 14.501c and repeated in LTSE Rule 14.207b2, a listed Company that receives a notification of deficiency from the Exchange is required to make a public announcement by filing a Form 8K, where required by SEC rules, or by issuing a press release disclosing receipt of the notification and the Rules upon which the deficiency is based, and describing each specific basis and concern identified by the Exchange in reaching its determination that the Company does not meet the listing standard. For avoidance of doubt, a request for information by LTSE staff pursuant to LTSE Rule 14.207a1, absent a notification of deficiency, will not require a public announcement by the subject Company pursuant to LTSE Rules 14.501c or 14.207b2.
10 See supra note 4.

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