Self-Regulatory Organizations; New York Stock Exchange LLC; Order Granting Approval of Proposed Rule Change Amending Section 907.00 of the NYSE Listed Company Manual To Adjust the Timing of Entitlements to Complimentary Products and Services for Special Purpose Acquisition Companies, 76403-76406 [2016-26490]
Download as PDF
<![CDATA[
Federal Register / Vol. 81, No. 212 / Wednesday, November 2, 2016 / Notices
This file number should be included on
the subject line if email 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
10:00 a.m. and 3:00 p.m. Copies of these
filings 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–
NYSEArca–2016–101 and should be
submitted on or before November 23,
2016. Rebuttal comments should be
submitted by December 7, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Brent J. Fields,
Secretary.
[FR Doc. 2016–26405 Filed 11–1–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79187; File No. SR–NYSE–
2016–58]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Order
Granting Approval of Proposed Rule
Change Amending Section 907.00 of
the NYSE Listed Company Manual To
Adjust the Timing of Entitlements to
Complimentary Products and Services
for Special Purpose Acquisition
Companies
October 28, 2016.
I. Introduction
On August 26, 2016, New York Stock
Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to amend Section 907.00 of the
NYSE Listed Company Manual
(‘‘Manual’’) to adjust the timing of
entitlements to certain complimentary
products and services for special
purpose acquisition companies. The
proposed rule change was published in
the Federal Register on September 13,
2016.3 The Commission received no
comments on the proposal. This order
grants approval of the proposed rule
change.
II. Description of the Proposal
The Exchange proposed to amend
Section 907.00 of the Manual to adjust
the timing of certain entitlements to
complimentary products and services
for special purpose acquisition
companies (‘‘SPACs’’) under that rule.
In its filing, the Exchange stated that a
SPAC is a special purpose company
formed for the purpose of effecting a
merger, capital stock exchange, asset
acquisition, stock purchase,
reorganization, or similar business
combination with one or more operating
businesses or assets.4 The Exchange
further stated that to qualify for initial
listing, a SPAC must meet the
requirements of Sections 102.01A 5 and
102.06 of the Manual. Section 102.06 of
the Manual provides that the Exchange
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 78782
(September 7, 2016), 81 FR 62937 (September 13,
2016) (‘‘Notice’’).
4 Id. at 62938.
5 Section 102.01A sets forth the minimum share
distribution criteria for listing, and requires that
companies listing in connection with an initial
public offering have at least 400 holders of 100
shares or more and at least 1,100,000 publicly held
shares.
sradovich on DSK3GMQ082PROD with NOTICES
2 17
19 17
CFR 200.30–3(a)(57).
VerDate Sep<11>2014
17:18 Nov 01, 2016
Jkt 241001
PO 00000
Frm 00073
Fmt 4703
Sfmt 4703
76403
will consider on a case-by-case basis the
appropriateness for listing of SPACs that
conduct an initial public offering of
which at least 90% of the proceeds,
together with the proceeds of any other
concurrent sales of the SPAC’s equity
securities, will be held in a trust
account controlled by an independent
custodian until consummation of a
business combination in the form of a
merger, capital stock exchange, asset
acquisition, stock purchase,
reorganization, or similar business
combination with one or more operating
businesses or assets with a fair market
value equal to at least 80% of the net
assets held in trust (a ‘‘Business
Combination’’ or the ‘‘Business
Combination Condition’’).6
As set forth in Section 907.00 of the
Manual, the Exchange offers
complimentary products and services
for a period of 24 calendar months from
the date of initial listing to a category of
listed companies defined as ‘‘Eligible
New Listings.’’ 7 Under the current rule,
Eligible New Listings are defined as: (i)
Any U.S. company that lists common
stock on the Exchange for the first time
and any non-U.S. company that lists an
equity security on the Exchange under
Section 102.01 or 103.00 of the Manual
for the first time, regardless of whether
such U.S. or non-U.S. company
conducts an offering; and (ii) any U.S.
or non-U.S. company emerging from a
bankruptcy, spinoff (where a company
lists new shares in the absence of a
public offering), and carve-out (where a
company carves out a business line or
division, which then conducts a
separate initial public offering).
Currently, pursuant to Section 907.00
of the Manual, Eligible New Listings are
eligible for services as either a Tier A or
Tier B company.8 Under Tier A, for
6 See Notice, supra note 3, at 62938. Section
102.06 also provides, among other things, that the
SPAC must be liquidated if no Business
Combination has been consummated within a
specified time period not to exceed three years, and
that the Exchange will promptly commence
delisting procedures with respect to any SPAC that
fails to consummate its Business Combination
within (i) the time period specified by its
constitutive documents or by contract or (ii) three
years, whichever is shorter.
7 Under Section 907.00 of the Manual the
Exchange also offers certain complimentary
products and services to ‘‘Eligible Current Listings’’
that satisfy the requirements of that Section as well
as other products and services that all listed issuers
are eligible to receive.
8 The Commission previously found that
providing these services and products to companies
in different tiers is consistent with the Act,
explaining that ‘‘[w]hile not all issuers receive the
same level of services, NYSE has stated that trading
volume and market activity are related to the level
of services that the listed companies would use in
the absence of the complimentary services
arrangements’’ and that ‘‘the criteria for satisfying
E:\FR\FM\02NON1.SGM
Continued
02NON1
76404
Federal Register / Vol. 81, No. 212 / Wednesday, November 2, 2016 / Notices
sradovich on DSK3GMQ082PROD with NOTICES
Eligible New Listings with a global
market value of $400 million or more,
calculated as of the date of listing on the
Exchange, the Exchange offers market
surveillance products and services (with
a commercial value of approximately
$55,000 annually), market analytics
products and services (with a
commercial value of approximately
$30,000 annually), web-hosting
products and services (with a
commercial value of approximately
$16,000 annually), web-casting products
and services (with a commercial value
of approximately $6,500 annually),
corporate governance tools (with a
commercial value of approximately
$50,000 annually), and news
distribution products and services (with
a commercial value of approximately
$20,000 annually) for a period of 24
calendar months from the date of listing.
Under Tier B, for Eligible New Listings
with a global market value of less than
$400 million, calculated as of the date
of listing on the Exchange, the Exchange
offers web-hosting products and
services (with a commercial value of
approximately $16,000 annually),
market analytics products and services
(with a commercial value of
approximately $30,000 annually), webcasting products and services (with a
commercial value of approximately
$6,500 annually), corporate governance
tools (with a commercial value of
approximately $50,000 annually), and
news distribution products and services
(with a commercial value of
approximately $20,000 annually) for a
period of 24 calendar months from the
date of listing.9
Notwithstanding the foregoing,
however, if an Eligible New Listing
begins to use a particular product or
service provided for under Section
907.00 within 30 days of its initial
listing date, the complimentary period
begins on the date of first use.
The Exchange has now proposed to
amend Section 907.00 of the Manual to
provide that a SPAC will no longer be
deemed to be an Eligible New Listing at
the time of its initial listing, and instead
will be deemed to be an Eligible New
Listing at such time as it has completed
the Business Combination Condition, if
it remains listed thereafter on the
Exchange. Thus, under the proposal, a
the tiers are the same for all issuers.’’ See Securities
Exchange Act Release No. 65127 (August 12, 2011),
76 FR 51449, 51452 (August 18, 2011) (approving
NYSE–2011–20) (‘‘NYSE 2011 Order’’).
9 The Exchange noted that it does not propose to
make any changes in its filing to the values of the
various services provided to eligible listed
companies discussed above, which values are
specified in Section 907.00 of the Manual. See
Notice, supra note 3, at 62938.
VerDate Sep<11>2014
17:18 Nov 01, 2016
Jkt 241001
SPAC will no longer be eligible to
receive complimentary products and
services under Section 907.00 as an
Eligible New Listing at the time of its
initial listing, but will instead be
entitled to receive such products and
services if and when it meets the
Business Combination Condition. A
SPAC that remains listed on the
Exchange after meeting the Business
Combination Condition will be entitled
to the complimentary products and
services under Section 907.00 as an
Eligible New Listing for a period of 24
months from the date on which it meets
the Business Combination Condition.
Notwithstanding the foregoing,
however, if such a company begins to
use a particular product or service
provided for under Section 907.00
within 30 days of meeting the Business
Combination Condition, the
complimentary period for that product
or service will begin on the date of first
use.
III. Discussion and Commission’s
Findings
The Commission has carefully
reviewed the proposed rule change and
finds that it is consistent with the
requirements of Section 6 of the Act.10
Specifically, the Commission believes it
is consistent with the provisions of
Sections 6(b)(4) and (5) of the Act, 11 in
particular, in that it is designed to
provide for the equitable allocation of
reasonable dues, fees, and other charges
among Exchange members, issuers, and
other persons using the Exchange’s
facilities, and is not designed to permit
unfair discrimination between
customers, issuers, brokers, or dealers.
Moreover, the Commission believes that
the proposed rule change is consistent
with Section 6(b)(8) of the Act 12 in that
it does not impose any burden on
competition not necessary or
appropriate in furtherance of the
purposes of the Act.
The Commission believes that it is
consistent with the Act for the Exchange
to adjust the timing of when SPACs are
eligible to receive complimentary
products and services under Section
907.00 of the Manual as Eligible New
Listings from the time of initial listing
to the time that it completes a Business
Combination Condition. The Exchange
represented that SPACs are unlikely to
utilize these complimentary products
and services at the time of initial listing,
but would likely find these products
10 15 U.S.C. 78f. In approving this proposed rule
change, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
11 15 U.S.C. 78f(b)(4) and (5).
12 15 U.S.C. 78f(b)(8).
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
and services useful if they remain listed
after they meet the Business
Combination Condition.13 The
Exchange explained that at the time of
initial listing, SPACs are typically not
focused on their stock price and
investor relations to the same degree as
operating companies.14 The Exchange
stated that the complimentary products
and services provided to Eligible New
Listings under Section 907.00 are
targeted in large part toward the marketdriven concerns of newly-listed
operating companies, and are therefore
less useful to SPACs that have not met
the Business Combination Condition.15
The Exchange stated that a SPAC that
has met the Business Combination
Condition, on the other hand, is
similarly situated to a newly-formed
publicly-traded operating company.16
Therefore, the Exchange said that it
believes that the complimentary
products and services provided to
Eligible New Listings under Section
907.00 will be as relevant and attractive
to a SPAC that has met the Business
Combination Condition as to the newlylisted operating companies that are
generally eligible for those services.17
In addition, the Exchange stated that
in many cases SPACs will consider
transferring to a new listing venue at the
time they meet the Business
Combination Condition, and that the
proposed rule change will enable the
Exchange to compete for the retention of
these companies by offering them a
package of complimentary products and
services that assist their transition to
becoming a publicly listed operating
company for the first time.18
The Exchange also stated that it
recognizes that not all SPACs will meet
the Business Combination Condition
and that some listed SPACs will
therefore never become eligible for the
additional complimentary products and
services provided to Eligible New
Listings under Section 907.00 that
would be provided to an otherwise
similarly qualified operating company
that is newly-listed on the Exchange.19
However, the Exchange reiterated that,
given the specific characteristics of the
SPAC structure, the complimentary
products and services provided to
Eligible New Listings under Section
907.00 are generally not of any
13 See
Notice, supra note 3, at 62938–39.
at 62938. The Exchange stated in its filing
that SPACs raise money on a one-time basis and
typically trade at a price that is very close to their
liquidation value. Id.
15 Id.
16 Id.
17 Id.
18 Id. at 62939.
19 Id.
14 Id.
E:\FR\FM\02NON1.SGM
02NON1
Federal Register / Vol. 81, No. 212 / Wednesday, November 2, 2016 / Notices
particular value to a SPAC prior to
meeting the Business Combination
Condition, and the Exchange therefore
believes that those SPACs that never
meet the Business Combination
Condition and therefore never qualify
for these additional products and
services provided to Eligible New
Listings under Section 907.00 will not
suffer any meaningful detriment as a
consequence.20
As noted in the previous order
approving Section 907.00 of the Manual,
Section 6(b)(5) of the Act does not
require that all issuers be treated the
same; rather, the Act requires that the
rules of an Exchange not unfairly
discriminate between issuers.21 In its
proposal, the Exchange has made
representations that reasonably justify
treating a SPAC that decides to continue
to list on the Exchange after meeting the
Business Combination Condition similar
to a newly-listed operating company.
The Commission further notes that a
SPAC that completes the Business
Combination Condition will be
receiving the same package of services
as an Eligible New Listing and that it
will not be receiving any additional
benefits or services by virtue of the
proposed rule change. The Commission
notes that the rule proposal delays the
timing of the additional complimentary
products and services offered to an
Eligible New Listing to the time the
SPAC becomes an operating company.
Up until that time, the listed SPAC is
treated like any other currently listed
company in that it would receive the
complimentary products and services
that all listed companies receive, and
could also receive additional products
and services if it so qualifies under the
provisions for Eligible Current
Listings.22 The proposal does not alter
these other services that a SPAC could
receive when initially listed.
The Commission has previously
found that the package of
complimentary products and services
offered to Eligible New Listings is
equitably allocated among issuers
consistent with Section 6(b)(4) of the
Act and that describing the values of the
products and services adds greater
transparency to the Exchange’s rules
sradovich on DSK3GMQ082PROD with NOTICES
20 Id.
21 15 U.S.C. 78f(b)(5); see also NYSE 2011 Order,
supra note 8, at 51452.
22 See Section 907.00 of the Manual; see also
NYSE 2011 Order, supra note 8, at 51450. Under
Section 907.00, all listed companies receive
complimentary services through the Exchange’s
Market Access Center as well as 24 months of
complimentary access to whistleblower hotline
services. See Securities Exchange Act Release No.
76127 (October 9, 2015), 80 FR 62584 (October 16,
2015) (approving NYSE–2015–36) (‘‘NYSE 2015
Order’’).
VerDate Sep<11>2014
17:18 Nov 01, 2016
Jkt 241001
and to the fees applicable to such
companies.23 The Commission also
previously noted that describing in the
Manual the products and services
available to listed companies and their
associated values will ensure that
individual listed companies are not
given specially negotiated packages of
products or services to list or remain
listed that would raise unfair
discrimination issues under the Act.24
Based on the foregoing, the
Commission believes that the Exchange
has provided a sufficient basis for
adjusting the timing of when SPACs are
eligible to qualify for additional
complimentary products and services,
as an Eligible New Listing under Section
907.00 of the Manual, from the time of
the SPAC’s initial listing to the time that
a SPAC meets the Business Combination
Condition, and that this change does not
unfairly discriminate among issuers and
is therefore consistent with the Act. For
similar reasons, and as the value of the
services offered are not changing, only
the timing of when such services are
provided to a SPAC, we find that the
proposal is consistent with Section
6(b)(4) of the Act.
The Commission also believes that it
is consistent with the Act for the
Exchange to allow the complimentary
period for a particular service as an
Eligible New Listing to begin on the date
of first use if a SPAC that has met the
Business Combination Condition begins
to use the service within 30 days after
the date of meeting the Business
Combination Condition. The Exchange
stated in its filing that, in its experience,
it can take companies a period of time
to review and complete necessary
contracts and training for the
complimentary products and services
under Section 907.00 following their
becoming eligible for those services and
that allowing this modest 30 day period,
if the company needs it, will help to
ensure that the company will have the
benefit of the full period permitted
under the rule to actually use the
services, thereby enabling companies to
receive the full intended benefit.25 The
Commission notes that Section 907.00
currently allows an Eligible New Listing
to begin using services within 30 days
of its initial listing date.26 As noted in
the NYSE 2015 Order, the Commission
believes that this would provide only a
short window of additional time to
allow companies to finalize their
contracts for the complimentary
products and services. The Commission
23 See
NYSE 2011 Order, supra note 8, at 51452.
24 Id.
25 See
26 See
PO 00000
Notice, supra note 3, at 62939.
NYSE 2015 Order, supra note 22.
Frm 00075
Fmt 4703
Sfmt 4703
76405
notes that under the proposed rule this
additional 30 day window would only
be available to SPACs that have
determined to remain listed on the
Exchange after meeting the Business
Combination Condition and thereby
treats such SPACs, at the time they
qualify for listing as an operating
company, the same as other newlylisted companies that qualify as Eligible
New Listings under Section 907.00.27
The Commission believes that the
Exchange is responding to competitive
pressures in the market for listings in
making this proposal. Specifically, the
Exchange has represented that in many
cases, SPACs will consider transferring
to a new listing venue at the time they
meet the Business Combination
Condition, and that the proposed rule
change would enable it to compete for
the retention of these companies by
offering them a package of
complimentary products and services
that assist their transition to being a
publicly listed operating company for
the first time.28 Further, the
Commission notes that other exchanges
have filed similar rule changes with
respect to the timing of complimentary
services offered to SPACs under their
rules,29 and the Commission has
recently approved one such rule
change.30 The Commission also notes
that nothing in the Exchange’s rules
requires a SPAC to remain listed on the
Exchange after it meets the Business
Combination Condition and that such
company is free to list on other markets.
Accordingly, the Commission believes
that the proposed rule reflects the
current competitive environment for
exchange listings among national
securities exchanges, and is appropriate
and consistent with Section 6(b)(8) of
the Act.31
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,32 that the
proposed rule change (SR–NYSE–2016–
58) be, and it hereby is, approved.
27 The Commission expects the Exchange to track
the start (and end) date of each free service.
28 See Notice, supra note 3, at 56722.
29 See Securities Exchange Act Release No. 78586
(August 16, 2016), 81 FR 56720 (August 22, 2016)
(SR–NYSEMKT–2016–62) and Securities Exchange
Act Release No. 79025 (October 3, 2016), 81 FR
69881 (October 7, 2016) (SR–NASDAQ–2016–106).
30 See Securities Exchange Act Release No. 79056
(October 6, 2016), 81 FR 70449 (October 12, 2016)
(approving NYSEMKT–2016–62).
31 15 U.S.C. 78f(b)(8).
32 15 U.S.C. 78s(b)(2).
E:\FR\FM\02NON1.SGM
02NON1
76406
Federal Register / Vol. 81, No. 212 / Wednesday, November 2, 2016 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.33
Brent J. Fields,
Secretary.
[FR Doc. 2016–26490 Filed 11–1–16; 8:45 am]
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #14911 and #14912]
North Carolina Disaster Number NC–
00081
U.S. Small Business
Administration.
ACTION: Amendment 8.
BILLING CODE 8011–01–P
AGENCY:
SMALL BUSINESS ADMINISTRATION
SUMMARY:
[Disaster Declaration #14921 and #14922]
South Carolina Disaster Number SC–
00040
U.S. Small Business
Administration.
ACTION: Amendment 3.
AGENCY:
This is an amendment of the
Presidential declaration of a major
disaster for the State of South Carolina
(FEMA–4286–DR), dated 10/14/2016.
Incident: Hurricane Matthew.
Incident Period: 10/04/2016 and
continuing.
Effective Date: 10/25/2016.
Physical Loan Application Deadline
Date: 12/13/2016.
EIDL Loan Application Deadline Date:
07/12/2017.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: The notice
of the Presidential disaster declaration
for the State of South Carolina, dated
10/14/2016 is hereby amended to
include the following areas as adversely
affected by the disaster:
Primary Counties: (Physical Damage and
Economic Injury Loans): Berkeley,
Charleston, Chesterfield
Contiguous Counties: (Economic Injury
Loans Only):
South Carolina: Lancaster
North Carolina: Union
All other information in the original
declaration remains unchanged.
sradovich on DSK3GMQ082PROD with NOTICES
SUMMARY:
(Catalog of Federal Domestic Assistance
Number 59008)
BILLING CODE 8025–01–P
All other information in the original
declaration remains unchanged.
(Catalog of Federal Domestic Assistance
Number 59008)
Lisa Lopez-Suarez,
Acting Associate Administrator for Disaster
Assistance.
[FR Doc. 2016–26395 Filed 11–1–16; 8:45 am]
BILLING CODE 8025–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #14925 and #14926]
Lisa Lopez-Suarez,
Acting Associate Administrator for Disaster
Assistance.
[FR Doc. 2016–26393 Filed 11–1–16; 8:45 am]
This is an amendment of the
Presidential declaration of a major
disaster for the State of North Carolina
(FEMA—4285—DR), dated 10/10/2016.
Incident: Hurricane Matthew.
Incident Period: 10/04/2016 and
continuing.
Effective Date: 10/24/2016.
Physical Loan Application Deadline
Date: 12/09/2016.
EIDL Loan Application Deadline Date:
07/10/2017.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: The notice
of the Presidential disaster declaration
for the State of North Carolina, dated
10/10/2016 is hereby amended to
include the following areas as adversely
affected by the disaster:
Primary Counties: (Physical Damage and
Economic Injury Loans): Lee,
Moore, Wake.
Contiguous Counties: (Economic Injury
Loans Only): North Carolina:
Durham, Granville, Montgomery,
Randolph.
Florida Disaster Number FL–00121
U.S. Small Business
Administration.
ACTION: Amendment 2.
AGENCY:
This is an amendment of the
Presidential declaration of a major
SUMMARY:
33 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
17:18 Nov 01, 2016
Jkt 241001
PO 00000
Frm 00076
Fmt 4703
Sfmt 4703
disaster for the State of Florida (FEMA–
4283–DR), dated 10/17/2016.
Incident: Hurricane Matthew.
Incident Period: 10/03/2016 and
continuing.
Effective Date: 10/24/2016.
Physical Loan Application Deadline
Date: 12/16/2016.
EIDL Loan Application Deadline Date:
07/17/2017.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: The notice
of the Presidential disaster declaration
for the State of Florida, dated 10/17/
2016 is hereby amended to include the
following areas as adversely affected by
the disaster:
Primary Counties: (Physical Damage and
Economic Injury Loans):
Duval
Contiguous Counties: (Economic Injury
Loans Only):
Florida: Baker, Nassau
All other information in the original
declaration remains unchanged.
(Catalog of Federal Domestic Assistance
Number 59008)
Lisa Lopez-Suarez,
Acting Associate Administrator for Disaster
Assistance.
[FR Doc. 2016–26394 Filed 11–1–16; 8:45 am]
BILLING CODE 8025–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #14923 and #14924]
Georgia Disaster Number GA–00081
U.S. Small Business
Administration.
ACTION: Amendment 1.
AGENCY:
This is an amendment of the
Presidential declaration of a major
disaster for the State of Georgia
(FEMA—4284—DR), dated 10/17/2016.
Incident: Hurricane Matthew.
Incident Period: 10/04/2016 through
10/15/2016.
EFFECTIVE DATE: 10/24/2016.
Physical Loan Application Deadline
Date: 12/16/2016.
EIDL Loan Application Deadline Date:
07/17/2017.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
SUMMARY:
E:\FR\FM\02NON1.SGM
02NON1
]]>Agencies
[Federal Register Volume 81, Number 212 (Wednesday, November 2, 2016)]
[Notices]
[Pages 76403-76406]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-26490]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-79187; File No. SR-NYSE-2016-58]
Self-Regulatory Organizations; New York Stock Exchange LLC; Order
Granting Approval of Proposed Rule Change Amending Section 907.00 of
the NYSE Listed Company Manual To Adjust the Timing of Entitlements to
Complimentary Products and Services for Special Purpose Acquisition
Companies
October 28, 2016.
I. Introduction
On August 26, 2016, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend Section 907.00 of the NYSE Listed Company
Manual (``Manual'') to adjust the timing of entitlements to certain
complimentary products and services for special purpose acquisition
companies. The proposed rule change was published in the Federal
Register on September 13, 2016.\3\ The Commission received no comments
on the proposal. This order grants approval of the proposed rule
change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 78782 (September 7,
2016), 81 FR 62937 (September 13, 2016) (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposal
The Exchange proposed to amend Section 907.00 of the Manual to
adjust the timing of certain entitlements to complimentary products and
services for special purpose acquisition companies (``SPACs'') under
that rule. In its filing, the Exchange stated that a SPAC is a special
purpose company formed for the purpose of effecting a merger, capital
stock exchange, asset acquisition, stock purchase, reorganization, or
similar business combination with one or more operating businesses or
assets.\4\ The Exchange further stated that to qualify for initial
listing, a SPAC must meet the requirements of Sections 102.01A \5\ and
102.06 of the Manual. Section 102.06 of the Manual provides that the
Exchange will consider on a case-by-case basis the appropriateness for
listing of SPACs that conduct an initial public offering of which at
least 90% of the proceeds, together with the proceeds of any other
concurrent sales of the SPAC's equity securities, will be held in a
trust account controlled by an independent custodian until consummation
of a business combination in the form of a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization, or similar
business combination with one or more operating businesses or assets
with a fair market value equal to at least 80% of the net assets held
in trust (a ``Business Combination'' or the ``Business Combination
Condition'').\6\
---------------------------------------------------------------------------
\4\ Id. at 62938.
\5\ Section 102.01A sets forth the minimum share distribution
criteria for listing, and requires that companies listing in
connection with an initial public offering have at least 400 holders
of 100 shares or more and at least 1,100,000 publicly held shares.
\6\ See Notice, supra note 3, at 62938. Section 102.06 also
provides, among other things, that the SPAC must be liquidated if no
Business Combination has been consummated within a specified time
period not to exceed three years, and that the Exchange will
promptly commence delisting procedures with respect to any SPAC that
fails to consummate its Business Combination within (i) the time
period specified by its constitutive documents or by contract or
(ii) three years, whichever is shorter.
---------------------------------------------------------------------------
As set forth in Section 907.00 of the Manual, the Exchange offers
complimentary products and services for a period of 24 calendar months
from the date of initial listing to a category of listed companies
defined as ``Eligible New Listings.'' \7\ Under the current rule,
Eligible New Listings are defined as: (i) Any U.S. company that lists
common stock on the Exchange for the first time and any non-U.S.
company that lists an equity security on the Exchange under Section
102.01 or 103.00 of the Manual for the first time, regardless of
whether such U.S. or non-U.S. company conducts an offering; and (ii)
any U.S. or non-U.S. company emerging from a bankruptcy, spinoff (where
a company lists new shares in the absence of a public offering), and
carve-out (where a company carves out a business line or division,
which then conducts a separate initial public offering).
---------------------------------------------------------------------------
\7\ Under Section 907.00 of the Manual the Exchange also offers
certain complimentary products and services to ``Eligible Current
Listings'' that satisfy the requirements of that Section as well as
other products and services that all listed issuers are eligible to
receive.
---------------------------------------------------------------------------
Currently, pursuant to Section 907.00 of the Manual, Eligible New
Listings are eligible for services as either a Tier A or Tier B
company.\8\ Under Tier A, for
[[Page 76404]]
Eligible New Listings with a global market value of $400 million or
more, calculated as of the date of listing on the Exchange, the
Exchange offers market surveillance products and services (with a
commercial value of approximately $55,000 annually), market analytics
products and services (with a commercial value of approximately $30,000
annually), web-hosting products and services (with a commercial value
of approximately $16,000 annually), web-casting products and services
(with a commercial value of approximately $6,500 annually), corporate
governance tools (with a commercial value of approximately $50,000
annually), and news distribution products and services (with a
commercial value of approximately $20,000 annually) for a period of 24
calendar months from the date of listing. Under Tier B, for Eligible
New Listings with a global market value of less than $400 million,
calculated as of the date of listing on the Exchange, the Exchange
offers web-hosting products and services (with a commercial value of
approximately $16,000 annually), market analytics products and services
(with a commercial value of approximately $30,000 annually), web-
casting products and services (with a commercial value of approximately
$6,500 annually), corporate governance tools (with a commercial value
of approximately $50,000 annually), and news distribution products and
services (with a commercial value of approximately $20,000 annually)
for a period of 24 calendar months from the date of listing.\9\
---------------------------------------------------------------------------
\8\ The Commission previously found that providing these
services and products to companies in different tiers is consistent
with the Act, explaining that ``[w]hile not all issuers receive the
same level of services, NYSE has stated that trading volume and
market activity are related to the level of services that the listed
companies would use in the absence of the complimentary services
arrangements'' and that ``the criteria for satisfying the tiers are
the same for all issuers.'' See Securities Exchange Act Release No.
65127 (August 12, 2011), 76 FR 51449, 51452 (August 18, 2011)
(approving NYSE-2011-20) (``NYSE 2011 Order'').
\9\ The Exchange noted that it does not propose to make any
changes in its filing to the values of the various services provided
to eligible listed companies discussed above, which values are
specified in Section 907.00 of the Manual. See Notice, supra note 3,
at 62938.
---------------------------------------------------------------------------
Notwithstanding the foregoing, however, if an Eligible New Listing
begins to use a particular product or service provided for under
Section 907.00 within 30 days of its initial listing date, the
complimentary period begins on the date of first use.
The Exchange has now proposed to amend Section 907.00 of the Manual
to provide that a SPAC will no longer be deemed to be an Eligible New
Listing at the time of its initial listing, and instead will be deemed
to be an Eligible New Listing at such time as it has completed the
Business Combination Condition, if it remains listed thereafter on the
Exchange. Thus, under the proposal, a SPAC will no longer be eligible
to receive complimentary products and services under Section 907.00 as
an Eligible New Listing at the time of its initial listing, but will
instead be entitled to receive such products and services if and when
it meets the Business Combination Condition. A SPAC that remains listed
on the Exchange after meeting the Business Combination Condition will
be entitled to the complimentary products and services under Section
907.00 as an Eligible New Listing for a period of 24 months from the
date on which it meets the Business Combination Condition.
Notwithstanding the foregoing, however, if such a company begins to use
a particular product or service provided for under Section 907.00
within 30 days of meeting the Business Combination Condition, the
complimentary period for that product or service will begin on the date
of first use.
III. Discussion and Commission's Findings
The Commission has carefully reviewed the proposed rule change and
finds that it is consistent with the requirements of Section 6 of the
Act.\10\ Specifically, the Commission believes it is consistent with
the provisions of Sections 6(b)(4) and (5) of the Act, \11\ in
particular, in that it is designed to provide for the equitable
allocation of reasonable dues, fees, and other charges among Exchange
members, issuers, and other persons using the Exchange's facilities,
and is not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers. Moreover, the Commission believes that
the proposed rule change is consistent with Section 6(b)(8) of the Act
\12\ in that it does not impose any burden on competition not necessary
or appropriate in furtherance of the purposes of the Act.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f. In approving this proposed rule change, the
Commission has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
\11\ 15 U.S.C. 78f(b)(4) and (5).
\12\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
The Commission believes that it is consistent with the Act for the
Exchange to adjust the timing of when SPACs are eligible to receive
complimentary products and services under Section 907.00 of the Manual
as Eligible New Listings from the time of initial listing to the time
that it completes a Business Combination Condition. The Exchange
represented that SPACs are unlikely to utilize these complimentary
products and services at the time of initial listing, but would likely
find these products and services useful if they remain listed after
they meet the Business Combination Condition.\13\ The Exchange
explained that at the time of initial listing, SPACs are typically not
focused on their stock price and investor relations to the same degree
as operating companies.\14\ The Exchange stated that the complimentary
products and services provided to Eligible New Listings under Section
907.00 are targeted in large part toward the market-driven concerns of
newly-listed operating companies, and are therefore less useful to
SPACs that have not met the Business Combination Condition.\15\ The
Exchange stated that a SPAC that has met the Business Combination
Condition, on the other hand, is similarly situated to a newly-formed
publicly-traded operating company.\16\ Therefore, the Exchange said
that it believes that the complimentary products and services provided
to Eligible New Listings under Section 907.00 will be as relevant and
attractive to a SPAC that has met the Business Combination Condition as
to the newly-listed operating companies that are generally eligible for
those services.\17\
---------------------------------------------------------------------------
\13\ See Notice, supra note 3, at 62938-39.
\14\ Id. at 62938. The Exchange stated in its filing that SPACs
raise money on a one-time basis and typically trade at a price that
is very close to their liquidation value. Id.
\15\ Id.
\16\ Id.
\17\ Id.
---------------------------------------------------------------------------
In addition, the Exchange stated that in many cases SPACs will
consider transferring to a new listing venue at the time they meet the
Business Combination Condition, and that the proposed rule change will
enable the Exchange to compete for the retention of these companies by
offering them a package of complimentary products and services that
assist their transition to becoming a publicly listed operating company
for the first time.\18\
---------------------------------------------------------------------------
\18\ Id. at 62939.
---------------------------------------------------------------------------
The Exchange also stated that it recognizes that not all SPACs will
meet the Business Combination Condition and that some listed SPACs will
therefore never become eligible for the additional complimentary
products and services provided to Eligible New Listings under Section
907.00 that would be provided to an otherwise similarly qualified
operating company that is newly-listed on the Exchange.\19\ However,
the Exchange reiterated that, given the specific characteristics of the
SPAC structure, the complimentary products and services provided to
Eligible New Listings under Section 907.00 are generally not of any
[[Page 76405]]
particular value to a SPAC prior to meeting the Business Combination
Condition, and the Exchange therefore believes that those SPACs that
never meet the Business Combination Condition and therefore never
qualify for these additional products and services provided to Eligible
New Listings under Section 907.00 will not suffer any meaningful
detriment as a consequence.\20\
---------------------------------------------------------------------------
\19\ Id.
\20\ Id.
---------------------------------------------------------------------------
As noted in the previous order approving Section 907.00 of the
Manual, Section 6(b)(5) of the Act does not require that all issuers be
treated the same; rather, the Act requires that the rules of an
Exchange not unfairly discriminate between issuers.\21\ In its
proposal, the Exchange has made representations that reasonably justify
treating a SPAC that decides to continue to list on the Exchange after
meeting the Business Combination Condition similar to a newly-listed
operating company. The Commission further notes that a SPAC that
completes the Business Combination Condition will be receiving the same
package of services as an Eligible New Listing and that it will not be
receiving any additional benefits or services by virtue of the proposed
rule change. The Commission notes that the rule proposal delays the
timing of the additional complimentary products and services offered to
an Eligible New Listing to the time the SPAC becomes an operating
company. Up until that time, the listed SPAC is treated like any other
currently listed company in that it would receive the complimentary
products and services that all listed companies receive, and could also
receive additional products and services if it so qualifies under the
provisions for Eligible Current Listings.\22\ The proposal does not
alter these other services that a SPAC could receive when initially
listed.
---------------------------------------------------------------------------
\21\ 15 U.S.C. 78f(b)(5); see also NYSE 2011 Order, supra note
8, at 51452.
\22\ See Section 907.00 of the Manual; see also NYSE 2011 Order,
supra note 8, at 51450. Under Section 907.00, all listed companies
receive complimentary services through the Exchange's Market Access
Center as well as 24 months of complimentary access to whistleblower
hotline services. See Securities Exchange Act Release No. 76127
(October 9, 2015), 80 FR 62584 (October 16, 2015) (approving NYSE-
2015-36) (``NYSE 2015 Order'').
---------------------------------------------------------------------------
The Commission has previously found that the package of
complimentary products and services offered to Eligible New Listings is
equitably allocated among issuers consistent with Section 6(b)(4) of
the Act and that describing the values of the products and services
adds greater transparency to the Exchange's rules and to the fees
applicable to such companies.\23\ The Commission also previously noted
that describing in the Manual the products and services available to
listed companies and their associated values will ensure that
individual listed companies are not given specially negotiated packages
of products or services to list or remain listed that would raise
unfair discrimination issues under the Act.\24\
---------------------------------------------------------------------------
\23\ See NYSE 2011 Order, supra note 8, at 51452.
\24\ Id.
---------------------------------------------------------------------------
Based on the foregoing, the Commission believes that the Exchange
has provided a sufficient basis for adjusting the timing of when SPACs
are eligible to qualify for additional complimentary products and
services, as an Eligible New Listing under Section 907.00 of the
Manual, from the time of the SPAC's initial listing to the time that a
SPAC meets the Business Combination Condition, and that this change
does not unfairly discriminate among issuers and is therefore
consistent with the Act. For similar reasons, and as the value of the
services offered are not changing, only the timing of when such
services are provided to a SPAC, we find that the proposal is
consistent with Section 6(b)(4) of the Act.
The Commission also believes that it is consistent with the Act for
the Exchange to allow the complimentary period for a particular service
as an Eligible New Listing to begin on the date of first use if a SPAC
that has met the Business Combination Condition begins to use the
service within 30 days after the date of meeting the Business
Combination Condition. The Exchange stated in its filing that, in its
experience, it can take companies a period of time to review and
complete necessary contracts and training for the complimentary
products and services under Section 907.00 following their becoming
eligible for those services and that allowing this modest 30 day
period, if the company needs it, will help to ensure that the company
will have the benefit of the full period permitted under the rule to
actually use the services, thereby enabling companies to receive the
full intended benefit.\25\ The Commission notes that Section 907.00
currently allows an Eligible New Listing to begin using services within
30 days of its initial listing date.\26\ As noted in the NYSE 2015
Order, the Commission believes that this would provide only a short
window of additional time to allow companies to finalize their
contracts for the complimentary products and services. The Commission
notes that under the proposed rule this additional 30 day window would
only be available to SPACs that have determined to remain listed on the
Exchange after meeting the Business Combination Condition and thereby
treats such SPACs, at the time they qualify for listing as an operating
company, the same as other newly-listed companies that qualify as
Eligible New Listings under Section 907.00.\27\
---------------------------------------------------------------------------
\25\ See Notice, supra note 3, at 62939.
\26\ See NYSE 2015 Order, supra note 22.
\27\ The Commission expects the Exchange to track the start (and
end) date of each free service.
---------------------------------------------------------------------------
The Commission believes that the Exchange is responding to
competitive pressures in the market for listings in making this
proposal. Specifically, the Exchange has represented that in many
cases, SPACs will consider transferring to a new listing venue at the
time they meet the Business Combination Condition, and that the
proposed rule change would enable it to compete for the retention of
these companies by offering them a package of complimentary products
and services that assist their transition to being a publicly listed
operating company for the first time.\28\ Further, the Commission notes
that other exchanges have filed similar rule changes with respect to
the timing of complimentary services offered to SPACs under their
rules,\29\ and the Commission has recently approved one such rule
change.\30\ The Commission also notes that nothing in the Exchange's
rules requires a SPAC to remain listed on the Exchange after it meets
the Business Combination Condition and that such company is free to
list on other markets. Accordingly, the Commission believes that the
proposed rule reflects the current competitive environment for exchange
listings among national securities exchanges, and is appropriate and
consistent with Section 6(b)(8) of the Act.\31\
---------------------------------------------------------------------------
\28\ See Notice, supra note 3, at 56722.
\29\ See Securities Exchange Act Release No. 78586 (August 16,
2016), 81 FR 56720 (August 22, 2016) (SR-NYSEMKT-2016-62) and
Securities Exchange Act Release No. 79025 (October 3, 2016), 81 FR
69881 (October 7, 2016) (SR-NASDAQ-2016-106).
\30\ See Securities Exchange Act Release No. 79056 (October 6,
2016), 81 FR 70449 (October 12, 2016) (approving NYSEMKT-2016-62).
\31\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\32\ that the proposed rule change (SR-NYSE-2016-58) be, and it
hereby is, approved.
---------------------------------------------------------------------------
\32\ 15 U.S.C. 78s(b)(2).
[[Page 76406]]
---------------------------------------------------------------------------
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
---------------------------------------------------------------------------
\33\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Brent J. Fields,
Secretary.
[FR Doc. 2016-26490 Filed 11-1-16; 8:45 am]
BILLING CODE 8011-01-P
