Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change Relating to the Adoption of Additional Initial Listing Standards for Special Purpose Acquisition Vehicles, 22191-22193 [E8-8912]
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Federal Register / Vol. 73, No. 80 / Thursday, April 24, 2008 / Notices
available publicly. All submissions
should refer to File Number SR–FINRA–
2008–011 and should be submitted on
or before May 15, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.41
Nancy M. Morris,
Secretary.
[FR Doc. E8–8872 Filed 4–23–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57685; File No. SR–
NASDAQ–2008–013]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing of Proposed Rule Change
Relating to the Adoption of Additional
Initial Listing Standards for Special
Purpose Acquisition Vehicles
April 18, 2008.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 14,
2008, The NASDAQ Stock Market LLC
(‘‘Nasdaq’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III below, which Items
have been prepared by Nasdaq. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
sroberts on PROD1PC70 with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The proposed rule change adopts
additional listing criteria that Nasdaq
proposes to apply when listing
acquisition vehicles. Nasdaq will
implement the proposed rule upon
approval.
The text of the proposed rule change
is below. Proposed new language is in
italics; proposed deletions are in
brackets.3
[IM–4300.] IM–4300–1. Use of
Discretionary Authority
No changes.
IM–4300–2. Listing of Companies Whose
Business Plan Is To Complete One or
More Acquisitions
Generally, Nasdaq will not permit the
initial or continued listing of a company
that has no specific business plan or
41 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Changes are marked to the rule text that appears
in the electronic manual of Nasdaq found at
https://nasdaq.complinet.com.
1 15
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16:51 Apr 23, 2008
Jkt 214001
that has indicated that its business plan
is to engage in a merger or acquisition
with an unidentified company or
companies.
However, in the case of a company
whose business plan is to complete an
initial public offering and engage in a
merger or acquisition with one or more
unidentified companies within a
specific period of time, Nasdaq will
permit the listing if the company meets
all applicable initial listing
requirements, as well as the conditions
described below.
(a) Gross proceeds from the initial
public offering must be deposited in a
trust account maintained by an
independent trustee, an escrow account
maintained by an ‘‘insured depository
institution,’’ as that term is defined in
Section 3(c)(2) of the Federal Deposit
Insurance Act or in a separate bank
account established by a registered
broker or dealer (collectively, a ‘‘deposit
account’’).
(b) Within 36 months of the
effectiveness of its IPO registration
statement, the company must complete
one or more business combinations
having an aggregate fair market value of
at least 80% of the value of the deposit
account (excluding any deferred
underwriters fees and taxes payable on
the income earned on the deposit
account) at the time of the agreement to
enter into the initial combination.
(c) Until the company has satisfied
the condition in paragraph (b) above,
each business combination must be
approved by a majority of the
company’s independent directors.
(d) Until the company has satisfied
the condition in paragraph (b) above,
each business combination must be
approved by a majority of the shares of
common stock voting at the meeting at
which the combination is being
considered.
Until the company completes a
business combination where all
conditions in paragraph (b) above are
met, the company must notify Nasdaq
on the appropriate form about each
proposed business combination.
Following each business combination,
the combined company must meet the
requirements for initial listing. If the
company does not meet the
requirements for initial listing following
a business combination or does not
comply with one of the requirements set
forth above, Nasdaq will issue a Staff
Determination under Rule 4804 to delist
the company’s securities.
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22191
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
Nasdaq 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 these statements
may be examined at the places specified
in Item IV below. Nasdaq has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
In the past, Nasdaq has applied its
discretionary authority under Rule 4300
to deny listing to companies whose
business plan is to complete an initial
public offering and engage in a
subsequent, unidentified merger or
acquisition (an ‘‘acquisition vehicle’’).4
However, Nasdaq has observed that a
number of such recent offerings have
included investor protections that serve
to mitigate Nasdaq’s past concerns about
listing such companies.5 As a result,
Nasdaq has reconsidered its prior policy
and determined to list acquisition
vehicles provided they do not otherwise
raise public interest concerns.6 In order
to provide transparency to that change
in policy, and to describe certain
additional criteria that Nasdaq will
require for acquisition vehicles, Nasdaq
proposes to adopt IM–4300–2, which
will set out criteria designed to afford
investors in acquisition vehicles
additional protection.
First, these companies must meet all
applicable initial listing requirements.
Thus, for initial listing, companies
seeking to list on the Nasdaq Global
Market must have a minimum market
value of listed securities of $75 million
and companies seeking to list on the
4 Nasdaq Rule 4300 provides Nasdaq with broad
discretionary authority over the initial and
continued listing of securities in order to maintain
the quality of and public confidence in its market,
to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles
of trade, and to protect investors and the public
interest, even though the securities meet all
enumerated criteria for initial or continued listing.
5 In addition, while some of Nasdaq’s past denials
were based, in part, upon concerns surrounding the
underwriter or sponsor of the company, Nasdaq has
observed that the underwriters and sponsors of
recent offerings do not raise similar concerns.
6 As it does with any initial listing, Nasdaq will
evaluate the reputation of the company’s sponsors
and underwriters pursuant to Nasdaq Rule 4300 in
determining whether listing is appropriate.
E:\FR\FM\24APN1.SGM
24APN1
22192
Federal Register / Vol. 73, No. 80 / Thursday, April 24, 2008 / Notices
Nasdaq Capital Market must have a
minimum market value of listed
securities of $50 million.7 In addition,
Nasdaq has determined to impose the
following additional criteria for listing a
company whose business plan is to
complete an initial public offering and
engage in a subsequent, unidentified
merger or acquisition: 8
(a) Gross proceeds from the initial
public offering must be deposited in a
trust account maintained by an
independent trustee, an escrow account
maintained by an ‘‘insured depository
institution,’’ as that term is defined in
Section 3(c)(2) of the Federal Deposit
Insurance Act or in a separate bank
account established by a registered
broker or dealer (collectively, a ‘‘deposit
account’’).
(b) Within 36 months of the
effectiveness of its IPO registration
statement, the company must complete
one or more business combinations
having an aggregate fair market value of
at least 80% of the value of the deposit
account (excluding any deferred
underwriters fees and taxes payable on
the income earned on the deposit
account) at the time of the agreement to
enter into the initial combination.
(c) Until the company has satisfied
the condition in paragraph (b) above,
each business combination must be
approved by a majority of the
company’s independent directors.
(d) Until the company has satisfied
the condition in paragraph (b) above,
each business combination must be
approved by a majority of the shares of
common stock voting at the meeting at
which the combination is being
considered.
Nasdaq will also review such a
company in connection with each
acquisition to assure that it remains
appropriate to continue to list the
company. In that regard, Nasdaq will
require that the company meet the
initial listing requirements upon
conclusion of the transaction 9 and will
conduct a regulatory review of any
individuals that become newly involved
with the company as a result of the
transaction. If the company does not
sroberts on PROD1PC70 with NOTICES
7 Nasdaq
Rules 4310(c)(2)(B) and 4420(c). Note
that given the nature of these companies, they will
not satisfy the alternative initial listing
requirements because of the income and operating
history requirements of those standards. If the
company chooses to list a unit, then Rule
4310(c)(10) or 4420(h) would also be applicable. As
noted below, these companies will be required to
satisfy the initial listing requirements following
subsequent business combinations.
8 These criteria were derived from protections
Nasdaq has observed built into recent transactions
and Rule 419 under the Securities Act of 1933, 17
CFR 230.419.
9 Companies will not be required to pay a new
listing fee in connection with such a review.
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16:15 Apr 23, 2008
Jkt 214001
meet the requirements for initial listing
following a business combination or
does not comply with one of the
requirements set forth above, Nasdaq
will issue a Staff Determination under
Rule 4804 to delist the company’s
securities.10
2. Statutory Basis
Nasdaq believes that the proposed
rule change is consistent with the
provisions of Section 6 of the Act,11 in
general and with Sections 6(b)(5) of the
Act,12 in particular. Section 6(b)(5)
requires, among other things, that a
registered national securities exchange’s
rules must be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, and, in general, to
protect investors and the public interest.
The proposed rule change is consistent
with these requirements in that it
imposes additional requirements on
acquisition vehicles, which are designed
to protect investors and the public
interest and prevent fraudulent and
manipulative acts and practices on the
part of acquisition vehicles and their
promoters.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Nasdaq does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as amended.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
10 The Commission notes acquisition companies
listed on Nasdaq would need to meet the applicable
Nasdaq’s continued listing standards. See
Telephone conversation between Steve L. Kuan,
Special Counsel, Division of Trading and Markets,
Commission and Arnold Golub, Associate General
Counsel, Nasdaq, on April 4, 2008. For example,
acquisition companies that list on the Nasdaq
Global Market would need to meet the Global
Market continued listing standards in Nasdaq Rule
4450. Further, the Commission notes that units
would need to meet the listing standards in Nasdaq
Rule 4310(c)(10), which requires all component
parts to meet the applicable initial and continued
listing standards.
11 15 U.S.C. 78f.
12 15 U.S.C. 78f(b)(5).
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Frm 00068
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Sfmt 4703
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 such 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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–Nasdaq–2008–013 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090
All submissions should refer to File
Number SR–Nasdaq–2008–013. This file
number should be included on the
subject line if e-mail 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 (https://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 inspection and copying in
the Commission’s Public Reference
Room, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 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; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
E:\FR\FM\24APN1.SGM
24APN1
Federal Register / Vol. 73, No. 80 / Thursday, April 24, 2008 / Notices
you wish to make available publicly. All
submissions should refer to File
Number SR–Nasdaq–2008–013 and
should be submitted on or before May
15, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–8912 Filed 4–23–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57682; File No. SR–NYSE–
2008–29]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
NYSE Rule 92(c)(3)
April 17, 2008.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on April 11,
2008, the New York Stock Exchange
LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been substantially prepared by the
Exchange. The Exchange has designated
the proposed rule change as a ‘‘noncontroversial’’ rule change pursuant to
section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(6) thereunder,4 which renders
the proposed rule change effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
sroberts on PROD1PC70 with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to extend the
operative date of NYSE Rule 92(c)(3)
from May 14, 2008 to March 31, 2009.
There is no new rule text.
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
Exchange included statements
concerning the purpose of, and basis for,
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
the proposed rule change. The text of
these 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 aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange is proposing to extend
the delayed operative date of NYSE Rule
92(c)(3) from May 14, 2008 to March 31,
2009. The Exchange believes that this
extension is necessary to allow it, and
the Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’), sufficient
time to assess their respective rules
concerning trading ahead, for the
purpose of harmonizing these rules, and
to make any necessary changes to
achieve a standardized industry
practice.
Background
On July 5, 2007, the Commission
approved amendments to NYSE Rule 92
to permit riskless principal trading at
the Exchange.5 These amendments were
filed, in part, to begin the process of
harmonizing NYSE Rule 92 and
FINRA’s so-called ‘‘Manning Rule.’’ 6 In
connection with these amendments, the
Exchange implemented NYSE Rule
92(c)(3), which permits Exchange
member organizations to submit riskless
principal orders to the Exchange, but
requires them to submit a report of the
execution of the facilitated order to a
designated Exchange database.
Exchange member organizations must
also submit to the same database, within
such time frame and in such format as
the Exchange may from time to time
require, an electronic report containing
data elements sufficient to provide an
electronic link of the execution of the
facilitated order to all of the underlying
orders.
For purposes of NYSE Rule 92(c)(3),
the Exchange informed its member
organizations that when executing
riskless principal transactions, they
must submit order execution reports to
the Exchange’s Front End Systemic
Capture (‘‘FESC’’) database, linking the
execution of the riskless principal order
on the Exchange to the specific
underlying orders. The information
provided must be sufficient for both
member firms and the Exchange to
13 17
1 15
VerDate Aug<31>2005
16:15 Apr 23, 2008
5 See Securities Exchange Act Release No. 56017
(July 5, 2007), 72 FR 38110 (July 12, 2007) (SR–
NYSE–2007–21).
6 See NASD Rule 2111 and IM–2110–2.
Jkt 214001
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22193
reconstruct in a time-sequenced manner
all orders, including allocations to the
underlying orders, with respect to
which a member organization is
claiming the riskless principal
exception.
Because the rule change required both
the Exchange and its member
organizations to make certain changes to
their trading and order management
systems, the NYSE filed for immediate
effectiveness to delay to May 14, 2008
the operative date of the NYSE Rule
92(c)(3) requirements, including
submitting end-of-day allocation reports
for riskless principal transactions and
using the riskless principal account type
indicator.7
Request for Extension
The Exchange has been working
diligently to develop its FESC database
to accept riskless principal order types
and the underlying batch orders. As part
of this process, the Exchange has been
in contact with its member
organizations regarding how to program
their respective systems to meet the new
reporting requirements. It has become
evident, however, that the differences
between the NYSE and FINRA reporting
systems for riskless principal
transactions is causing member
organizations that trade at the Exchange
and in other markets to have to make
challenging programming changes in
order to comply with disparate
reporting requirements.
For example, Exchange member
organizations have informed the
Exchange that they often do not know
to which market center an order will be
routed until the time of entry, and that
determination is often made
electronically. These firms have advised
the NYSE that it is not possible for them
to implement by May 14, 2008 the
required changes that will enable them
to choose among multiple market
centers for routing a riskless principal
order and yet also meet the differing
reporting standards.
Because the Exchange and FINRA are
in the process of fully harmonizing their
respective rules, including reviewing
the possibilities for a uniform reporting
standard for riskless principal
transactions, the Exchange believes that
at this stage, it would be premature to
require firms to meet the FESC reporting
requirements.
Accordingly, to provide the Exchange
and FINRA the time necessary to review
their respective rules and to develop a
harmonized rule set that would apply
7 See Securities Exchange Act Release No. 56968
(December 14, 2007), 72 FR 72432 (December 20,
2007) (SR–NYSE–2007–114).
E:\FR\FM\24APN1.SGM
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]]>Agencies
[Federal Register Volume 73, Number 80 (Thursday, April 24, 2008)]
[Notices]
[Pages 22191-22193]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-8912]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57685; File No. SR-NASDAQ-2008-013]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing of Proposed Rule Change Relating to the Adoption of
Additional Initial Listing Standards for Special Purpose Acquisition
Vehicles
April 18, 2008.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 14, 2008, The NASDAQ Stock Market LLC (``Nasdaq'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I, II, and III below, which Items
have been prepared by Nasdaq. The Commission is publishing this notice
to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The proposed rule change adopts additional listing criteria that
Nasdaq proposes to apply when listing acquisition vehicles. Nasdaq will
implement the proposed rule upon approval.
The text of the proposed rule change is below. Proposed new
language is in italics; proposed deletions are in brackets.\3\
---------------------------------------------------------------------------
\3\ Changes are marked to the rule text that appears in the
electronic manual of Nasdaq found at https://nasdaq.complinet.com.
---------------------------------------------------------------------------
[IM-4300.] IM-4300-1. Use of Discretionary Authority
No changes.
IM-4300-2. Listing of Companies Whose Business Plan Is To Complete One
or More Acquisitions
Generally, Nasdaq will not permit the initial or continued listing
of a company that has no specific business plan or that has indicated
that its business plan is to engage in a merger or acquisition with an
unidentified company or companies.
However, in the case of a company whose business plan is to
complete an initial public offering and engage in a merger or
acquisition with one or more unidentified companies within a specific
period of time, Nasdaq will permit the listing if the company meets all
applicable initial listing requirements, as well as the conditions
described below.
(a) Gross proceeds from the initial public offering must be
deposited in a trust account maintained by an independent trustee, an
escrow account maintained by an ``insured depository institution,'' as
that term is defined in Section 3(c)(2) of the Federal Deposit
Insurance Act or in a separate bank account established by a registered
broker or dealer (collectively, a ``deposit account'').
(b) Within 36 months of the effectiveness of its IPO registration
statement, the company must complete one or more business combinations
having an aggregate fair market value of at least 80% of the value of
the deposit account (excluding any deferred underwriters fees and taxes
payable on the income earned on the deposit account) at the time of the
agreement to enter into the initial combination.
(c) Until the company has satisfied the condition in paragraph (b)
above, each business combination must be approved by a majority of the
company's independent directors.
(d) Until the company has satisfied the condition in paragraph (b)
above, each business combination must be approved by a majority of the
shares of common stock voting at the meeting at which the combination
is being considered.
Until the company completes a business combination where all
conditions in paragraph (b) above are met, the company must notify
Nasdaq on the appropriate form about each proposed business
combination. Following each business combination, the combined company
must meet the requirements for initial listing. If the company does not
meet the requirements for initial listing following a business
combination or does not comply with one of the requirements set forth
above, Nasdaq will issue a Staff Determination under Rule 4804 to
delist the company's securities.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, Nasdaq 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 these statements may be examined at the places specified in
Item IV below. Nasdaq has prepared summaries, set forth in Sections A,
B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
In the past, Nasdaq has applied its discretionary authority under
Rule 4300 to deny listing to companies whose business plan is to
complete an initial public offering and engage in a subsequent,
unidentified merger or acquisition (an ``acquisition vehicle'').\4\
However, Nasdaq has observed that a number of such recent offerings
have included investor protections that serve to mitigate Nasdaq's past
concerns about listing such companies.\5\ As a result, Nasdaq has
reconsidered its prior policy and determined to list acquisition
vehicles provided they do not otherwise raise public interest
concerns.\6\ In order to provide transparency to that change in policy,
and to describe certain additional criteria that Nasdaq will require
for acquisition vehicles, Nasdaq proposes to adopt IM-4300-2, which
will set out criteria designed to afford investors in acquisition
vehicles additional protection.
---------------------------------------------------------------------------
\4\ Nasdaq Rule 4300 provides Nasdaq with broad discretionary
authority over the initial and continued listing of securities in
order to maintain the quality of and public confidence in its
market, to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, and to protect
investors and the public interest, even though the securities meet
all enumerated criteria for initial or continued listing.
\5\ In addition, while some of Nasdaq's past denials were based,
in part, upon concerns surrounding the underwriter or sponsor of the
company, Nasdaq has observed that the underwriters and sponsors of
recent offerings do not raise similar concerns.
\6\ As it does with any initial listing, Nasdaq will evaluate
the reputation of the company's sponsors and underwriters pursuant
to Nasdaq Rule 4300 in determining whether listing is appropriate.
---------------------------------------------------------------------------
First, these companies must meet all applicable initial listing
requirements. Thus, for initial listing, companies seeking to list on
the Nasdaq Global Market must have a minimum market value of listed
securities of $75 million and companies seeking to list on the
[[Page 22192]]
Nasdaq Capital Market must have a minimum market value of listed
securities of $50 million.\7\ In addition, Nasdaq has determined to
impose the following additional criteria for listing a company whose
business plan is to complete an initial public offering and engage in a
subsequent, unidentified merger or acquisition: \8\
---------------------------------------------------------------------------
\7\ Nasdaq Rules 4310(c)(2)(B) and 4420(c). Note that given the
nature of these companies, they will not satisfy the alternative
initial listing requirements because of the income and operating
history requirements of those standards. If the company chooses to
list a unit, then Rule 4310(c)(10) or 4420(h) would also be
applicable. As noted below, these companies will be required to
satisfy the initial listing requirements following subsequent
business combinations.
\8\ These criteria were derived from protections Nasdaq has
observed built into recent transactions and Rule 419 under the
Securities Act of 1933, 17 CFR 230.419.
---------------------------------------------------------------------------
(a) Gross proceeds from the initial public offering must be
deposited in a trust account maintained by an independent trustee, an
escrow account maintained by an ``insured depository institution,'' as
that term is defined in Section 3(c)(2) of the Federal Deposit
Insurance Act or in a separate bank account established by a registered
broker or dealer (collectively, a ``deposit account'').
(b) Within 36 months of the effectiveness of its IPO registration
statement, the company must complete one or more business combinations
having an aggregate fair market value of at least 80% of the value of
the deposit account (excluding any deferred underwriters fees and taxes
payable on the income earned on the deposit account) at the time of the
agreement to enter into the initial combination.
(c) Until the company has satisfied the condition in paragraph (b)
above, each business combination must be approved by a majority of the
company's independent directors.
(d) Until the company has satisfied the condition in paragraph (b)
above, each business combination must be approved by a majority of the
shares of common stock voting at the meeting at which the combination
is being considered.
Nasdaq will also review such a company in connection with each
acquisition to assure that it remains appropriate to continue to list
the company. In that regard, Nasdaq will require that the company meet
the initial listing requirements upon conclusion of the transaction \9\
and will conduct a regulatory review of any individuals that become
newly involved with the company as a result of the transaction. If the
company does not meet the requirements for initial listing following a
business combination or does not comply with one of the requirements
set forth above, Nasdaq will issue a Staff Determination under Rule
4804 to delist the company's securities.\10\
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\9\ Companies will not be required to pay a new listing fee in
connection with such a review.
\10\ The Commission notes acquisition companies listed on Nasdaq
would need to meet the applicable Nasdaq's continued listing
standards. See Telephone conversation between Steve L. Kuan, Special
Counsel, Division of Trading and Markets, Commission and Arnold
Golub, Associate General Counsel, Nasdaq, on April 4, 2008. For
example, acquisition companies that list on the Nasdaq Global Market
would need to meet the Global Market continued listing standards in
Nasdaq Rule 4450. Further, the Commission notes that units would
need to meet the listing standards in Nasdaq Rule 4310(c)(10), which
requires all component parts to meet the applicable initial and
continued listing standards.
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2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\11\ in general and with
Sections 6(b)(5) of the Act,\12\ in particular. Section 6(b)(5)
requires, among other things, that a registered national securities
exchange's rules must be designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. The proposed rule change is consistent with these
requirements in that it imposes additional requirements on acquisition
vehicles, which are designed to protect investors and the public
interest and prevent fraudulent and manipulative acts and practices on
the part of acquisition vehicles and their promoters.
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\11\ 15 U.S.C. 78f.
\12\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date 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 such 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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-Nasdaq-2008-013 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090
.All submissions should refer to File Number SR-Nasdaq-2008-013. This
file number should be included on the subject line if e-mail 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 (https://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 inspection
and copying in the Commission's Public Reference Room, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 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; the Commission does
not edit personal identifying information from submissions. You should
submit only information that
[[Page 22193]]
you wish to make available publicly. All submissions should refer to
File Number SR-Nasdaq-2008-013 and should be submitted on or before May
15, 2008.
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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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-8912 Filed 4-23-08; 8:45 am]
BILLING CODE 8010-01-P
