(Article from Registered Funds Regulatory Update, July 2024)
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The NYSE filed an Application with the SEC pursuant to Rule 19b-4 under the Exchange Act to amend Section 302.00 of the NYSE Listed Company Manual. Section 302.00 of the Manual requires CEFs listed on NYSE to hold an annual shareholder meeting every fiscal year. The proposed amendments would exempt NYSE-listed CEFs from the annual shareholder meeting requirement.
Although the Investment Company Act requires shareholder approval for various matters, it does not require CEFs to hold annual shareholder meetings. The Application states that NYSE believes that it is appropriate to exempt CEFs from the annual shareholder meeting requirements of Section 302.00 since the Investment Company Act provides “significant statutory protections” to CEF shareholders, which are not available to shareholders of public operating companies. The Application also notes that all other types of investment companies registered under the Investment Company Act and listed on NYSE are exempt from the annual shareholder meeting requirements, and NYSE believes the proposed changes are consistent with the protection of investors and the public interest.
The proposed rule change is subject to comment until July 30, 2024. The SEC will issue an order to approve or disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved within 45 days after such notice is published in the Federal Register, or within such longer period (up to 90 days, as the SEC may designate if it finds such longer period to be appropriate or as to which NYSE consents).
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Amending Section 302.00 of the NYSE Listed Company Manual To Exempt Closed-End Funds Registered Under the Investment Company Act of 1940 From the Requirement To Hold Annual Shareholder Meetings,
Release No. 34-100460 (July 9, 2024), available at: https://www.govinfo.gov/content/pkg/FR-2024-07-09/pdf/2024-15037.pdf.