Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Amex LLC Company Guide To Adopt Additional Criteria for Listing Special Purpose Acquisition Companies (SPACs) That Have Indicated That Their Business Plan Is To Engage in a Merger or Acquisition With an Unidentified Company or Companies, 74119-74121 [2010-30087]
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Federal Register / Vol. 75, No. 229 / Tuesday, November 30, 2010 / Notices
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 Web site 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
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at NSCC’s principal office and
NSCC’s Web site https://www.dtcc.com/
legal/rule_filings/nscc/2010.php. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submission should refer to File No. SR–
NSCC–2010–15 and should be
submitted within December 21, 2010
days after the date of publication.3
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010–30088 Filed 11–29–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
of the most significant parts of such
statements.
[Release No. 34–63366; File No. SR–
NYSEAmex–2010–103]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
Self-Regulatory Organizations; NYSE
Amex LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the NYSE
Amex LLC Company Guide To Adopt
Additional Criteria for Listing Special
Purpose Acquisition Companies
(SPACs) That Have Indicated That
Their Business Plan Is To Engage in a
Merger or Acquisition With an
Unidentified Company or Companies
November 23, 2010.
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 November
12, 2010, NYSE Amex LLC (‘‘Exchange’’
or ‘‘NYSE Amex’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
NYSE Amex LLC Company Guide (the
‘‘Guide’’) to adopt additional criteria for
listing companies that have indicated
that their business plan is to engage in
a merger or acquisition with an
unidentified company or companies (an
‘‘acquisition vehicle’’) and to provide
transparency to the criteria the
Exchange will apply in doing so. The
text of the proposed rule change is
available at the Exchange, the
Commission’s Public Reference Room,
and https://www.nyse.com.
jdjones on DSK8KYBLC1PROD with NOTICES
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,
1 15
3 17
CFR 200.30–3(a)(12).
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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1. Purpose
The Exchange proposes to amend the
Guide to adopt additional criteria for
listing companies that have indicated
that their business plan is to engage in
a merger or acquisition with an
acquisition vehicle.3 The Exchange has
permitted certain of such companies to
list on the Exchange under Initial
Listing Standards 3 or 4, which do not
require prior operating history, as long
as certain protections were provided to
investors in such companies.4 In order
to provide greater transparency to the
listing criteria that would be applicable
to such companies, the Exchange
proposes to adopt new Section 119 of
the Guide.5
First, these companies must meet all
applicable initial listing requirements.
Thus, for initial listing, companies
seeking to list on the Exchange must
meet NYSE Amex Initial Listing
Standard 3 or 4, which require, among
other things, a minimum market value
of listed securities of $50 million or $75
million, respectively.6 In addition, the
Exchange has determined to impose the
following additional criteria for listing a
company whose business plan is to
complete an initial public offering and
3 Section 101 of the Guide provides the Exchange
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.
4 As it does with any initial listing, the Exchange
will evaluate the reputation of the company’s
management pursuant to Section 101 of the Guide
in determining whether listing is appropriate.
5 New York Stock Exchange LLC (‘‘NYSE’’) and
The Nasdaq Stock Market also have adopted
standards for listing acquisition companies. See
NYSE Listed Company Manual Section 102.06,
Nasdaq IM–5101–2. Except where otherwise noted,
the new Section 119 standards are the same as
Nasdaq’s current standards. See infra notes 8
and 9.
6 See Section 101(c) and (d) of the Guide, which
sets forth these market capitalization standards as
well as other listing standards relating to aggregate
market value of publicly held shares, stock price,
distribution and other requirements. Note that given
the nature of these companies, they will not satisfy
the initial listing requirements of Initial Listing
Standards 1 and 2 because of the prior operating
history requirements of those standards. As noted
below, these companies will be required to satisfy
the initial listing requirements following
subsequent business combinations.
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Federal Register / Vol. 75, No. 229 / Tuesday, November 30, 2010 / Notices
jdjones on DSK8KYBLC1PROD with NOTICES
engage in a subsequent, unidentified
merger or acquisition: 7
(a) At least 90% of the gross proceeds
from the initial public offering and any
concurrent sale by the company of
equity securities 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 8 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 initial public offering
registration statement, or such shorter
period that the company specifies in its
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 underwriter’s 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.
(e) Until the company has satisfied
the condition in paragraph (b) above,
public shareholders voting against a
business combination must have the
right to convert their shares of common
stock into a pro rata share of the
aggregate amount then in the deposit
account (net of taxes payable and
amounts distributed to management for
working capital purposes) if the
business combination is approved and
consummated. A company may
establish a limit (set no lower than 10%
of the shares sold in the initial public
7 These criteria originally were derived from
protections the Exchange has observed built into
recent transactions and Rule 419 under the
Securities Act of 1933, 17 CFR 230.419. See supra
n. 3 and Securities Exchange Act Release No. 57685
(April 18, 2008), 73 FR 22191 at n. 8 (April 24,
2008) (SR–NASDAQ–2008–013). Rule 419(b)(2)(vi),
17 CFR 230.419(b)(2)(vi), permits the registrant to
receive up to 10 percent of the proceeds remaining
after payment of underwriting commissions,
underwriting expenses and permitted dealer
allowances, exclusive of interest or dividends, as
those proceeds are deposited into the escrow or
trust account.
8 12 U.S.C. 1813(c)(2).
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Jkt 223001
offering) as to the maximum number of
shares with respect to which any
shareholder, together with any affiliate
of such shareholder or any person with
whom such shareholder is acting as a
‘‘group’’ (as such term is used in
Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 9), may exercise such conversion
rights. For these purposes, ‘‘public
shareholder’’ would be defined to
exclude officers and directors of the
company, the company’s sponsor, the
founding shareholders of the company,
any family member or affiliate of any of
the foregoing persons, and other
concentrated holdings of 10% or
more.10 The Exchange proposes to
define ‘‘family member’’ as a person’s
spouse, parents, children and siblings,
whether by blood, marriage or adoption,
or anyone residing in such person’s
home.11
The Exchange 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, the Exchange
will require that the company meet the
initial listing requirements upon
conclusion of the transaction 12 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
9 15
U.S.C. 78m(d) and 78n(d).
currently excludes a beneficial holder
of more than 10% of the total shares outstanding
from its definition of ‘‘Public Holders’’ in Nasdaq’s
general listing rules. See Nasdaq Rule 5005(a)(34).
However, Nasdaq does not exclude concentrated
holders from its definition of ‘‘public Shareholder’’
in its acquisition vehicle rule (IM–5101–2) but has
proposed to do so by defining public Shareholder
to exclude the beneficial holder of more than 10%
of the total shares outstanding. See Securities
Exchange Act Release No. 63239 (November 3,
2010), 75 FR 68846 (November 9, 2010) (SR–
NASDAQ–2010–137). The NYSE’s acquisition
company rule excludes concentrated holdings of
10% or more in calculating the number of publiclyheld shares. See Section 102.06(A) of the NYSE
Listed Company Manual. Similarly, the Exchange
proposes to exclude concentrated holdings of 10%
or more in calculating the number of publicly-held
shares in proposed Section 119(e).
11 The Guide does not currently define the term
‘‘family member.’’ The Exchange proposes to adopt
the definition of ‘‘Family Member’’ used in Nasdaq’s
Rules. See Nasdaq Rule 5005(a)(17) (referencing
Nasdaq Rule 5605(a)(2)) and IM–
5101–2.
12 Companies will not be required to pay a new
listing fee in connection with such a review.
However, if there is a change of legal entity in
connection with the business combination, the
company will have to pay an original listing fee
($7,500). See Section 142(d) of the Guide. If
additional shares are issued in the transaction, the
company will pay initial listing fees on those
shares. See Section 142(a) of the Guide.
10 Nasdaq
PO 00000
Frm 00122
Fmt 4703
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requirements set forth above, the
Exchange would commence delisting
proceedings under Section 1010 to
delist the company’s securities; the
company would not be eligible to follow
the procedures to cure deficiencies
outlined in Section 1009 of the Guide.13
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,14 in general, and furthers the
objectives of Section 6(b)(5) of the Act,15
in particular, in that it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, 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. The Exchange believes
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. The Exchange also notes that
the provision of conversion rights for
public shareholders that oppose a
business combination offers investor
protection and is consistent with SEC
Rule 419.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
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. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 16 and Rule 19b–4(f)(6) 17
thereunder because the proposal does
not: (i) Significantly affect the
protection of investors or the public
13 This aspect of the proposed rule change is
based on Section 802.01B of the NYSE Listed
Company Manual.
14 15 U.S.C. 78f(b).
15 15 U.S.C. 78f(b)(5).
16 15 U.S.C. 78s(b)(3)(A).
17 17 CFR 240.19b–4(f)(6).
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jdjones on DSK8KYBLC1PROD with NOTICES
Federal Register / Vol. 75, No. 229 / Tuesday, November 30, 2010 / Notices
interest; (ii) impose any significant
burden on competition; and (iii) by its
terms, become operative for 30 days
from the date on which it was filed, or
such shorter time as the Commission
may designate if consistent with the
protection of investors and the public
interest, provided that the Exchange has
given the Commission notice of its
intent to file the proposed rule change,
along with a brief description and text
of the proposed rule change, at least five
business days prior to the date of filing
of the proposed rule change, or such
shorter time as designated by the
Commission.18
A proposed rule change filed under
Rule 19b–4(f)(6) normally may not
become operative prior to 30 days after
the date of filing. However, Rule 19b–
4(f)(6)(iii) 19 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has requested that the
Commission waive the 30-day operative
delay period.
The Commission believes that waiver
of the 30-day operative delay period is
consistent with the protection of
investors and the public interest.
Specifically, the Commission notes that
the proposal is substantially identical to
Nasdaq’s listing standards for special
purpose acquisition companies
(‘‘SPACs’’) and raises no new or novel
regulatory issues. The Commission
notes that the proposal differs from
Nasdaq’s rules in three respects. First,
the proposal’s definition of ‘‘public
shareholder’’ would exclude any person
with concentrated holdings of 10% or
more. The Commission notes that this
proposed definition is consistent with
the Exchange’s current definition.20
Second, the proposal would include a
definition of ‘‘family member.’’ The
Commission notes that while the term
‘‘family member’’ is used in Nasdaq’s
SPAC rules, it is not specifically defined
in those rules because it is defined
elsewhere in Nasdaq’s rules. The
definition of ‘‘family member’’ in the
Exchange’s proposal, however, is
identical to the definition of ‘‘family
member’’ as defined in Nasdaq’s rules
and referenced in Nasdaq’s SPAC listing
standards.21 Finally, the proposal would
specify that SPACs that do not meet the
Exchange’s initial listing standards
following a business combination or
that do not comply with one of the
SPAC listing standards in proposed
Section 119 of the Guide would not be
eligible to follow the cure procedures in
Section 1009 of the Guide, which allows
listed companies up to 18 months to
cure certain continued listing standards
deficiencies. Instead, under the
proposal, the Exchange would
immediately commence delisting
proceedings pursuant to Section 1010 of
the Guide. The Commission notes that
this proposal is identical to NYSE’s
listing standards for SPACs and helps to
ensure that a SPAC unable to meet
listing standards will not remain listed
for an extended period of time.22
Accordingly, based on the above, the
Commission designates, consistent with
the protection of investors and public
interest, that the proposed rule change
be operative upon filing.23
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.24
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–NYSEAmex–2010–103 on
the subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NYSEAmex–2010–103.
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
22 See
18 The
Exchange has satisfied the five-day prefiling notice requirement.
19 17 CFR 240.19b–4(f)(6)(iii).
20 See Section 102 of the Guide; see also supra
note 10.
21 See supra note 11.
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15:13 Nov 29, 2010
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supra note 13.
purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
24 15 U.S.C. 78s(b)(3)(C).
23 For
PO 00000
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Sfmt 4703
74121
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 Web site 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
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 you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEAmex–2010–103 and should be
submitted on or before December 21,
2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.25
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010–30087 Filed 11–29–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63364; File No. SR–BX–
2010–078]
Self-Regulatory Organizations;
NASDAQ OMX BX; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Extending the Pilot
Period for Boston Options Exchange
To Receive Inbound Routes of Orders
From Nasdaq Options Services
November 23, 2010.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that, on
November 17, 2010, NASDAQ OMX BX
(the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II,
25 17
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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]]>Agencies
[Federal Register Volume 75, Number 229 (Tuesday, November 30, 2010)]
[Notices]
[Pages 74119-74121]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-30087]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63366; File No. SR-NYSEAmex-2010-103]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE
Amex LLC Company Guide To Adopt Additional Criteria for Listing Special
Purpose Acquisition Companies (SPACs) That Have Indicated That Their
Business Plan Is To Engage in a Merger or Acquisition With an
Unidentified Company or Companies
November 23, 2010.
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 November 12, 2010, NYSE Amex LLC (``Exchange'' or ``NYSE Amex'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the self-regulatory organization. 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 Substance
of the Proposed Rule Change
The Exchange proposes to amend the NYSE Amex LLC Company Guide (the
``Guide'') to adopt additional criteria for listing companies that have
indicated that their business plan is to engage in a merger or
acquisition with an unidentified company or companies (an ``acquisition
vehicle'') and to provide transparency to the criteria the Exchange
will apply in doing so. The text of the proposed rule change is
available at the Exchange, the Commission's Public Reference Room, and
https://www.nyse.com.
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 the Guide to adopt additional
criteria for listing companies that have indicated that their business
plan is to engage in a merger or acquisition with an acquisition
vehicle.\3\ The Exchange has permitted certain of such companies to
list on the Exchange under Initial Listing Standards 3 or 4, which do
not require prior operating history, as long as certain protections
were provided to investors in such companies.\4\ In order to provide
greater transparency to the listing criteria that would be applicable
to such companies, the Exchange proposes to adopt new Section 119 of
the Guide.\5\
---------------------------------------------------------------------------
\3\ Section 101 of the Guide provides the Exchange 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.
\4\ As it does with any initial listing, the Exchange will
evaluate the reputation of the company's management pursuant to
Section 101 of the Guide in determining whether listing is
appropriate.
\5\ New York Stock Exchange LLC (``NYSE'') and The Nasdaq Stock
Market also have adopted standards for listing acquisition
companies. See NYSE Listed Company Manual Section 102.06, Nasdaq IM-
5101-2. Except where otherwise noted, the new Section 119 standards
are the same as Nasdaq's current standards. See infra notes 8 and 9.
---------------------------------------------------------------------------
First, these companies must meet all applicable initial listing
requirements. Thus, for initial listing, companies seeking to list on
the Exchange must meet NYSE Amex Initial Listing Standard 3 or 4, which
require, among other things, a minimum market value of listed
securities of $50 million or $75 million, respectively.\6\ In addition,
the Exchange has determined to impose the following additional criteria
for listing a company whose business plan is to complete an initial
public offering and
[[Page 74120]]
engage in a subsequent, unidentified merger or acquisition: \7\
---------------------------------------------------------------------------
\6\ See Section 101(c) and (d) of the Guide, which sets forth
these market capitalization standards as well as other listing
standards relating to aggregate market value of publicly held
shares, stock price, distribution and other requirements. Note that
given the nature of these companies, they will not satisfy the
initial listing requirements of Initial Listing Standards 1 and 2
because of the prior operating history requirements of those
standards. As noted below, these companies will be required to
satisfy the initial listing requirements following subsequent
business combinations.
\7\ These criteria originally were derived from protections the
Exchange has observed built into recent transactions and Rule 419
under the Securities Act of 1933, 17 CFR 230.419. See supra n. 3 and
Securities Exchange Act Release No. 57685 (April 18, 2008), 73 FR
22191 at n. 8 (April 24, 2008) (SR-NASDAQ-2008-013). Rule
419(b)(2)(vi), 17 CFR 230.419(b)(2)(vi), permits the registrant to
receive up to 10 percent of the proceeds remaining after payment of
underwriting commissions, underwriting expenses and permitted dealer
allowances, exclusive of interest or dividends, as those proceeds
are deposited into the escrow or trust account.
---------------------------------------------------------------------------
(a) At least 90% of the gross proceeds from the initial public
offering and any concurrent sale by the company of equity securities
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 \8\ or in a separate bank account
established by a registered broker or dealer (collectively, a ``deposit
account'').
---------------------------------------------------------------------------
\8\ 12 U.S.C. 1813(c)(2).
---------------------------------------------------------------------------
(b) Within 36 months of the effectiveness of its initial public
offering registration statement, or such shorter period that the
company specifies in its 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 underwriter's 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.
(e) Until the company has satisfied the condition in paragraph (b)
above, public shareholders voting against a business combination must
have the right to convert their shares of common stock into a pro rata
share of the aggregate amount then in the deposit account (net of taxes
payable and amounts distributed to management for working capital
purposes) if the business combination is approved and consummated. A
company may establish a limit (set no lower than 10% of the shares sold
in the initial public offering) as to the maximum number of shares with
respect to which any shareholder, together with any affiliate of such
shareholder or any person with whom such shareholder is acting as a
``group'' (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the ``Act'') \9\), may exercise such
conversion rights. For these purposes, ``public shareholder'' would be
defined to exclude officers and directors of the company, the company's
sponsor, the founding shareholders of the company, any family member or
affiliate of any of the foregoing persons, and other concentrated
holdings of 10% or more.\10\ The Exchange proposes to define ``family
member'' as a person's spouse, parents, children and siblings, whether
by blood, marriage or adoption, or anyone residing in such person's
home.\11\
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\9\ 15 U.S.C. 78m(d) and 78n(d).
\10\ Nasdaq currently excludes a beneficial holder of more than
10% of the total shares outstanding from its definition of ``Public
Holders'' in Nasdaq's general listing rules. See Nasdaq Rule
5005(a)(34). However, Nasdaq does not exclude concentrated holders
from its definition of ``public Shareholder'' in its acquisition
vehicle rule (IM-5101-2) but has proposed to do so by defining
public Shareholder to exclude the beneficial holder of more than 10%
of the total shares outstanding. See Securities Exchange Act Release
No. 63239 (November 3, 2010), 75 FR 68846 (November 9, 2010) (SR-
NASDAQ-2010-137). The NYSE's acquisition company rule excludes
concentrated holdings of 10% or more in calculating the number of
publicly-held shares. See Section 102.06(A) of the NYSE Listed
Company Manual. Similarly, the Exchange proposes to exclude
concentrated holdings of 10% or more in calculating the number of
publicly-held shares in proposed Section 119(e).
\11\ The Guide does not currently define the term ``family
member.'' The Exchange proposes to adopt the definition of ``Family
Member'' used in Nasdaq's Rules. See Nasdaq Rule 5005(a)(17)
(referencing Nasdaq Rule 5605(a)(2)) and IM- 5101-2.
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The Exchange 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, the Exchange will require that the
company meet the initial listing requirements upon conclusion of the
transaction \12\ 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, the Exchange would
commence delisting proceedings under Section 1010 to delist the
company's securities; the company would not be eligible to follow the
procedures to cure deficiencies outlined in Section 1009 of the
Guide.\13\
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\12\ Companies will not be required to pay a new listing fee in
connection with such a review. However, if there is a change of
legal entity in connection with the business combination, the
company will have to pay an original listing fee ($7,500). See
Section 142(d) of the Guide. If additional shares are issued in the
transaction, the company will pay initial listing fees on those
shares. See Section 142(a) of the Guide.
\13\ This aspect of the proposed rule change is based on Section
802.01B of the NYSE Listed Company Manual.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\14\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\15\ in particular, in that it is designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, 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. The
Exchange believes 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. The Exchange also
notes that the provision of conversion rights for public shareholders
that oppose a business combination offers investor protection and is
consistent with SEC Rule 419.
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\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
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. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \16\ and Rule 19b-4(f)(6) \17\ thereunder
because the proposal does not: (i) Significantly affect the protection
of investors or the public
[[Page 74121]]
interest; (ii) impose any significant burden on competition; and (iii)
by its terms, become operative for 30 days from the date on which it
was filed, or such shorter time as the Commission may designate if
consistent with the protection of investors and the public interest,
provided that the Exchange has given the Commission notice of its
intent to file the proposed rule change, along with a brief description
and text of the proposed rule change, at least five business days prior
to the date of filing of the proposed rule change, or such shorter time
as designated by the Commission.\18\
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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f)(6).
\18\ The Exchange has satisfied the five-day pre-filing notice
requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii) \19\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay period.
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\19\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiver of the 30-day operative delay
period is consistent with the protection of investors and the public
interest. Specifically, the Commission notes that the proposal is
substantially identical to Nasdaq's listing standards for special
purpose acquisition companies (``SPACs'') and raises no new or novel
regulatory issues. The Commission notes that the proposal differs from
Nasdaq's rules in three respects. First, the proposal's definition of
``public shareholder'' would exclude any person with concentrated
holdings of 10% or more. The Commission notes that this proposed
definition is consistent with the Exchange's current definition.\20\
Second, the proposal would include a definition of ``family member.''
The Commission notes that while the term ``family member'' is used in
Nasdaq's SPAC rules, it is not specifically defined in those rules
because it is defined elsewhere in Nasdaq's rules. The definition of
``family member'' in the Exchange's proposal, however, is identical to
the definition of ``family member'' as defined in Nasdaq's rules and
referenced in Nasdaq's SPAC listing standards.\21\ Finally, the
proposal would specify that SPACs that do not meet the Exchange's
initial listing standards following a business combination or that do
not comply with one of the SPAC listing standards in proposed Section
119 of the Guide would not be eligible to follow the cure procedures in
Section 1009 of the Guide, which allows listed companies up to 18
months to cure certain continued listing standards deficiencies.
Instead, under the proposal, the Exchange would immediately commence
delisting proceedings pursuant to Section 1010 of the Guide. The
Commission notes that this proposal is identical to NYSE's listing
standards for SPACs and helps to ensure that a SPAC unable to meet
listing standards will not remain listed for an extended period of
time.\22\ Accordingly, based on the above, the Commission designates,
consistent with the protection of investors and public interest, that
the proposed rule change be operative upon filing.\23\
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\20\ See Section 102 of the Guide; see also supra note 10.
\21\ See supra note 11.
\22\ See supra note 13.
\23\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.\24\
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\24\ 15 U.S.C. 78s(b)(3)(C).
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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-NYSEAmex-2010-103 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEAmex-2010-103. 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 Web site
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 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 you wish to make
available publicly. All submissions should refer to File Number SR-
NYSEAmex-2010-103 and should be submitted on or before December 21,
2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
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\25\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010-30087 Filed 11-29-10; 8:45 am]
BILLING CODE 8011-01-P
