Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Amendment No. 3 and Order Granting Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 3, To Amend Section 102.01B of the NYSE Listed Company Manual To Provide for the Listing of Companies That List Without a Prior Exchange Act Registration and That Are Not Listing in Connection With an Underwritten Initial Public Offering and Related Changes to Rules 15, 104, and 123D, 5650-5655 [2018-02501]
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5650
Federal Register / Vol. 83, No. 27 / Thursday, February 8, 2018 / Notices
The Commission is noticing a
recent Postal Service filing for the
Commission’s consideration concerning
negotiated service agreements. This
notice informs the public of the filing,
invites public comment, and takes other
administrative steps.
DATES: Comments are due: February 12,
2018.
ADDRESSES: Submit comments
electronically via the Commission’s
Filing Online system at https://
www.prc.gov. Those who cannot submit
comments electronically should contact
the person identified in the FOR FURTHER
INFORMATION CONTACT section by
telephone for advice on filing
alternatives.
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
SUMMARY:
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I. Introduction
II. Docketed Proceeding(s)
I. Introduction
The Commission gives notice that the
Postal Service filed request(s) for the
Commission to consider matters related
to negotiated service agreement(s). The
request(s) may propose the addition or
removal of a negotiated service
agreement from the market dominant or
the competitive product list, or the
modification of an existing product
currently appearing on the market
dominant or the competitive product
list.
Section II identifies the docket
number(s) associated with each Postal
Service request, the title of each Postal
Service request, the request’s acceptance
date, and the authority cited by the
Postal Service for each request. For each
request, the Commission appoints an
officer of the Commission to represent
the interests of the general public in the
proceeding, pursuant to 39 U.S.C. 505
(Public Representative). Section II also
establishes comment deadline(s)
pertaining to each request.
The public portions of the Postal
Service’s request(s) can be accessed via
the Commission’s website (https://
www.prc.gov). Non-public portions of
the Postal Service’s request(s), if any,
can be accessed through compliance
with the requirements of 39 CFR
3007.40.
The Commission invites comments on
whether the Postal Service’s request(s)
in the captioned docket(s) are consistent
with the policies of title 39. For
request(s) that the Postal Service states
concern market dominant product(s),
applicable statutory and regulatory
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requirements include 39 U.S.C. 3622, 39
U.S.C. 3642, 39 CFR part 3010, and 39
CFR part 3020, subpart B. For request(s)
that the Postal Service states concern
competitive product(s), applicable
statutory and regulatory requirements
include 39 U.S.C. 3632, 39 U.S.C. 3633,
39 U.S.C. 3642, 39 CFR part 3015, and
39 CFR part 3020, subpart B. Comment
deadline(s) for each request appear in
section II.
II. Docketed Proceeding(s)
1. Docket No(s).: CP2014–4; Filing
Title: USPS Notice of Change in Prices
Pursuant to Amendment to Parcel
Return Service Contract 5; Filing
Acceptance Date: February 1, 2018;
Filing Authority: 39 CFR 3015.5; Public
Representative: Christopher C. Mohr;
Comments Due: February 12, 2018.
2. Docket No(s).: MC2018–121 and
CP2018–164; Filing Title: USPS Request
to Add Priority Mail & First-Class
Package Service Contract 74 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: February 2, 2018;
Filing Authority: 39 U.S.C. 3642 and 39
CFR 3020.30 et seq.; Public
Representative: Timothy J. Schwuchow;
Comments Due: February 12, 2018.
3. Docket No(s).: MC2018–122 and
CP2018–165; Filing Title: USPS Request
to Add Parcel Select Contract 30 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: February 2, 2018;
Filing Authority: 39 U.S.C. 3642 and 39
CFR 3020.30 et seq.; Public
Representative: Christopher C. Mohr;
Comments Due: February 12, 2018.
This notice will be published in the
Federal Register.
Stacy L. Ruble,
Secretary.
[FR Doc. 2018–02545 Filed 2–7–18; 8:45 am]
BILLING CODE 7710–FW–P
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82627; File No. SR–NYSE–
2017–30]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Amendment No. 3 and Order
Granting Accelerated Approval of
Proposed Rule Change, as Modified by
Amendment No. 3, To Amend Section
102.01B of the NYSE Listed Company
Manual To Provide for the Listing of
Companies That List Without a Prior
Exchange Act Registration and That
Are Not Listing in Connection With an
Underwritten Initial Public Offering and
Related Changes to Rules 15, 104, and
123D
February 2, 2018.
I. Introduction
On June 13, 2017, New York Stock
Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) 1 of the Securities
Exchange Act of 1934 (‘‘Exchange
Act’’) 2 and Rule 19b–4 thereunder,3 a
proposed rule change to amend Section
102.01B of the NYSE Listed Company
Manual to modify the provisions
relating to the qualification of
companies listing without a prior
Exchange Act registration in connection
with an underwritten initial public
offering and amend Exchange rules to
address the opening procedures on the
first day of trading of such securities.
The proposal, as modified by
Amendment No. 3, would: (i) Eliminate
the requirement in Footnote (E) of
Section 102.01B (‘‘Footnote (E)’’) of the
Manual to have a private placement
market trading price if there is a
valuation from an independent thirdparty of $250 million in market value of
publicly-held shares; (ii) set forth
several factors indicating when the
independent third party providing the
valuation would not be deemed
‘‘independent’’ under Footnote (E); (iii)
amend NYSE Rule 15 to add a reference
price for when a security is listed under
Footnote (E); (iv) amend NYSE Rule 104
to specify Designated Market Maker
(‘‘DMM’’) requirements when
facilitating the opening of a security
listed under Footnote (E) when there
has been no sustained history of trading
in a private placement trading market
for such security; and (v) amend NYSE
Rule 123D to specify that the Exchange
may declare a regulatory halt prior to
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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opening a security that is the subject of
an initial pricing upon Exchange listing
and that has not, immediately prior to
such initial pricing, traded on another
national securities exchange or in the
over-the-counter market.
The proposed rule change was
published for comment in the Federal
Register on June 20, 2017.4 The
Commission received one comment in
response to the Original Notice.5 The
Exchange filed Amendment No. 1 to the
proposed rule change on July 28, 2017,
which, as noted below, was later
withdrawn. On August 3, 2017, the
Commission extended the time period
within which to approve the proposed
rule change, disapprove the proposed
rule change, or institute proceedings to
determine whether to approve or
disapprove the proposed rule change to
September 18, 2017.6
On August 16, 2017, the Exchange
withdrew Amendment No. 1 and filed
Amendment No. 2 to the proposed rule
change, which superseded and replaced
the proposed rule change in its
entirety.7 The Commission published
Amendment No. 2 for comment in the
Federal Register on August 24, 2017.8
The Commission received no comments
in response to this solicitation for
comments. On September 15, 2017, the
Commission instituted proceedings to
determine whether to approve or
disapprove the proposed rule change, as
modified by Amendment No. 2.9
Following the Order Instituting
Proceedings, the Commission received
one additional comment letter.10 On
December 8, 2017, the Exchange filed
Amendment No. 3 to the proposed rule
change, which superseded and replaced
the proposed rule change in its
entirety.11 On December 14, 2017, the
4 See Securities Exchange Act Release No. 80933
(June 15, 2017), 82 FR 28200 (June 20, 2017)
(‘‘Original Notice’’).
5 See letter to the Commission from James J.
Angel, Ph.D., CFA, Georgetown University, dated
July 28, 2017 (‘‘Angel Letter’’).
6 See Securities Exchange Act Release No. 81309
(August 3, 2017), 82 FR 37244 (August 9, 2017).
7 See Notice, infra note 8, at n. 8, which describe
the changes proposed in Amendment No. 2 from
the original proposal.
8 See Securities Exchange Act Release No. 81440
(August 18, 2017), 82 FR 40183 (August 24, 2017)
(‘‘Notice’’).
9 See Securities Exchange Act Release No. 81640
(September 15, 2017), 82 FR 44229 (September 21,
2017) (‘‘Order Instituting Proceedings’’).
10 See letter to Brent J. Fields, Commission, from
Cleary Gottlieb Steen & Hamilton LLP, dated
October 12, 2017 (‘‘Cleary Gottlieb Letter’’).
11 Amendment No. 3 revised the proposal to
eliminate the proposed changes to Footnote (E) that
would have allowed a company to list immediately
upon effectiveness of an Exchange Act registration
statement only, without any concurrent IPO or
Securities Act of 1933 (‘‘Securities Act’’)
registration. Except for removing this part of the
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Commission extended the time period
for approving or disapproving the
proposal for an additional 60 days until
February 15, 2018.12 The Commission is
publishing this notice to solicit
comment on Amendment No. 3 to the
proposed rule change from interested
persons, and is approving the proposed
rule change, as modified by Amendment
No. 3, on an accelerated basis.
II. Description of the Proposed Rule
Change, as Modified by Amendment
No. 3
1. Listing Standards
Generally, Section 102 of the Manual
sets forth the minimum numerical
standards for domestic companies, or
foreign private issuers that choose to
follow the domestic standards, to list
equity securities on the Exchange.
Section 102.01B of the Manual requires
a listed company to demonstrate at the
time of listing an aggregate market value
of publicly-held shares of either $40
million or $100 million, depending on
the type of listing.13 Section 102.01B
also states that, in these cases, the
Exchange relies on written
representations from the underwriter,
investment banker, or other financial
advisor, as applicable, with respect to
this valuation.14 While Footnote (E)
states that the Exchange generally
expects to list companies in connection
proposal, the remaining proposed amendments in
Amendment No. 3 are identical to those noticed for
comment in Amendment No. 2. Amendment No. 3
also contained a complete restated Form 19b–4
under the Exchange Act, which contained the same
discussions, statutory basis and other sections set
forth in Amendment No. 2, with slight
modifications to take into account the deleted
provision. Amendment No. 3 is available at: https://
www.sec.gov/comments/sr-nyse-2017-30/
nyse201730-2782322-161654.pdf.
12 See Securities Exchange Act Release No. 82332
(December 14, 2017), 82 FR 60442 (December 20,
2017).
13 Section 102.01B of the Manual states that a
company must demonstrate ‘‘an aggregate market
value of publicly-held shares of $40,000,000 for
companies that list either at the time of their initial
public offerings (‘‘IPO’’) (C) or as a result of spinoffs or under the Affiliated Company standard or,
for companies that list at the time of their Initial
Firm Commitment Underwritten Public Offering
(C), and $100,000,000 for other companies (D)(E).’’
Section 102.01B also requires a company to have a
closing price, or if listing in connection with an IPO
or Initial Firm Commitment Underwritten Public
Offering, an IPO or Initial Firm Commitment
Underwritten Public Offering price per share of at
least $4.00 at the time of initial listing.
14 See Section 102.01B, Footnote (C) of the
Manual, which states that for companies listing at
the time of their IPO or Initial Firm Commitment
Underwritten Public Offering, the Exchange will
rely on a written commitment from the underwriter
to represent the anticipated value of the company’s
offering. For spin-offs, the Exchange will rely on a
representation from the parent company’s
investment banker (or other financial advisor) in
order to estimate the market value based upon the
distribution ratio.
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5651
with a firm commitment underwritten
IPO, upon transfer from another market,
or pursuant to a spin-off, Section
102.01B of the Manual also
contemplates that companies that have
not previously had their common equity
securities registered under the Exchange
Act, but which have sold common
equity securities in a private placement,
may wish to list their common equity
securities on the Exchange at the time
of effectiveness of a registration
statement 15 filed solely for the purpose
of allowing existing shareholders to sell
their shares.16 Specifically, Footnote (E)
permits the Exchange, on a case by case
basis, to exercise discretion to list such
companies and provides that the
Exchange will determine that such a
company has met the $100 million
aggregate market value of publicly-held
shares requirement based on a
combination of both (i) an independent
third-party valuation (a ‘‘Valuation’’) 17
of the company and (ii) the most recent
trading price for the company’s common
stock in a trading system for
unregistered securities operated by a
national securities exchange or a
registered broker-dealer (a ‘‘Private
Placement Market’’).18 Under the
current rules, the Exchange will
attribute a market value of publicly-held
shares to the company equal to the
lesser of (i) the value calculable based
on the Valuation and (ii) the value
calculable based on the most recent
trading price in a Private Placement
Market.19
The Exchange proposed two changes
to Footnote (E). First, the Exchange
proposed to amend Footnote (E) to
provide that, in the absence of any
recent trading in a Private Placement
Market, the Exchange will determine
that a company has met its market value
of publicly-held shares requirement if
the company provides a recent
Valuation evidencing a market value of
15 The reference to a registration statement refers
to a registration statement effective under the
Securities Act.
16 See Section 102.01B, Footnote (E) of the
Manual.
17 See Section 102.01B, Footnote (E) of the
Manual, which sets forth specific requirements for
the Valuation. Among other factors, any Valuation
used for purposes of Footnote (E) must be provided
by an entity that has significant experience and
demonstrable competence in the provision of such
valuations.
18 Section 102.01B, Footnote (E) of the Manual
also sets forth specific factors for relying on a
Private Placement Market price, and states that the
Exchange will examine the trading price trends for
the stock in the Private Placement Market over a
period of several months prior to listing and will
only rely on such market if it is ‘‘consistent with
a sustained history [of trading] over that several
month period.’’
19 See Section 102.01B, Footnote (E) of the
Manual.
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publicly-held shares of at least $250
million.20 In proposing this change, the
Exchange expressed the view that the
current requirement of Footnote (E) to
rely on recent Private Placement Market
trading in addition to a Valuation may
cause difficulties for certain companies
that are otherwise clearly qualified for
listing.21 The Exchange stated that some
companies that are clearly large enough
to be suitable for listing on the Exchange
do not have their securities traded at all
on a Private Placement Market prior to
going public and, in other cases, the
Private Placement Market trading is too
limited to provide a reasonable basis for
reaching conclusions about a company’s
qualification.22 In proposing to adopt a
Valuation that must be at least two-anda-half times the $100 million
requirement of Section 102.01B of the
Manual, the Exchange stated that this
amount ‘‘will give a significant degree of
comfort that the market value of the
company’s shares will meet the [$100
million] standard upon commencement
of trading on the Exchange,’’
particularly because any such Valuation
‘‘must be provided by an entity that has
significant experience and demonstrable
competence in the provision of such
valuations.’’ 23
Second, the Exchange proposed to
further amend Footnote (E) by
establishing certain criteria that would
preclude a valuation agent from being
considered ‘‘independent’’ for purposes
of Footnote (E), which the Exchange
believes will provide a significant
additional guarantee of the
independence of any entity providing
such a Valuation.24 Specifically, the
Exchange proposed that a valuation
agent will not be deemed to be
independent if:
• At the time it provides such
Valuation, the valuation agent or any
affiliated person or persons beneficially
own in the aggregate as of the date of the
Valuation, more than 5% of the class of
20 See proposed Section 102.01B, Footnote (E) of
the Manual. The Commission notes that the Exhibit
5 to Amendment No. 3 contains the proposed rule
language. Any references herein to the proposed
rule language shall refer to the language available
in Exhibit 5 to Amendment No. 3, which is
available from the Exchange or on the
Commission’s website www.sec.gov. See also
Notice, supra note 8.
21 See Notice, supra note 8, at 40184.
22 See id.
23 Id. In its proposal, the Exchange stated that it
believed that it is unlikely that any Valuation
would reach a conclusion that was incorrect to the
degree necessary for a company using this provision
to fail to meet the $100 million requirement upon
listing, in particular because any Valuation used for
this purpose must be provided by an entity that has
significant experience and demonstrable
competence in the provision of such valuations. See
id.
24 See id.
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securities to be listed, including any
right to receive any such securities
exercisable within 60 days;
• The valuation agent or any affiliated
entity has provided any investment
banking services to the listing applicant
within the 12 months preceding the date
of the Valuation; 25 or
• The valuation agent or any affiliated
entity has been engaged to provide
investment banking services to the
listing applicant in connection with the
proposed listing or any related
financings or other related
transactions.26
2. Trading Rules
The Exchange also proposed to amend
Exchange Rules 15, 104 and 123D,
governing the opening of trading, to
specify procedures for the opening trade
on the day of initial listing of a company
that lists under the proposed
amendments to Footnote (E) and did not
have any recent trading in a Private
Placement Market.27
Rule 15(b) provides that a DMM will
publish a pre-opening indication 28
before a security opens if the opening
transaction on the Exchange is
anticipated to be at a price that
represents a change of more than the
‘‘Applicable Price Range,’’ 29 from a
specified ‘‘Reference Price.’’ 30 Rule
15(c)(1) specifies that the Reference
Price for a security (other than an
American Depository Receipt) would be
either (A) the security’s last reported
sale price on the Exchange; (B) the
security’s offering price in the case of an
IPO; or (C) the security’s last reported
sale price on the securities market from
25 For purposes of this provision, ‘‘investment
banking services’’ includes, without limitation,
acting as an underwriter in an offering for the
issuer; acting as a financial adviser in a merger or
acquisition; providing venture capital, equity lines
of credit, PIPEs (private investment, public equity
transactions), or similar investments; serving as
placement agent for the issuer; or acting as a
member of a selling group in a securities
underwriting. See proposed Section 102.01B,
Footnote (E) of the Manual.
26 See id.
27 See Notice, supra note 8, at 41085.
28 Rule 15(a) states that a pre-opening indication
will include the security and the price range within
which the opening price is anticipated to occur.
Pre-opening indications are published on the
Exchange’s proprietary data feeds and the securities
information processor (‘‘SIP’’). See Rule 15(a). The
Exchange may also publish order imbalance
information prior to the opening of a security. The
order imbalance information contains the price at
which opening interest may be executed in full. See
Rule 15(g).
29 See Rule 15(d) for a definition of ‘‘Applicable
Price Range.’’
30 Rule 15(b) also provides that a DMM will
publish a pre-opening indication if a security has
not opened by 10:00 a.m. Eastern Time. See Rule
15(c) for a definition of ‘‘Reference Price.’’
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which the security is being transferred
to the Exchange.31
The Exchange proposed to amend
Rule 15(c)(1) to add new sub-paragraph
(D) to specify the Reference Price for a
security that is listed under Footnote
(E). The Exchange proposed that if such
security has had recent sustained
trading in a Private Placement Market
prior to listing, the Reference Price in
such scenario would be the most recent
transaction price in that market or, if no
such sustained trading has occurred, the
Reference Price used would be a price
determined by the Exchange in
consultation with a financial advisor to
the issuer of such security.32
Rule 104(a)(2) provides that the DMM
has a responsibility for facilitating
openings and reopenings for each of the
securities in which the DMM is
registered as required under Exchange
rules, which includes supplying
liquidity as needed. The Exchange
proposed to amend Rule 104(a)(2) to
require the DMM to consult with the
issuer’s financial advisor when
facilitating the opening on the first day
of trading of a security that is listing
under Footnote (E) and that has not had
recent sustained history of trading in a
Private Placement Market prior to
listing, in order to effect a fair and
orderly opening of such security.33
The Exchange stated that it believes
that such a financial advisor would have
an understanding of the status of
ownership of outstanding shares in the
company and would have been working
with the issuer to identify a market for
the securities upon listing.34 As a result,
it believes such financial advisor would
be able to provide input to the DMM
regarding expectations of where such a
new listing should be priced, based on
pre-listing selling and buying interest
and other factors that would not be
available to the DMM through other
sources.35
31 See
Rule 15(c)(1).
proposed Rule 15(c)(1)(D).
33 See proposed Rule 104(a)(2). The Exchange
stated that this requirement is based in part on
Nasdaq Rule 4120(c)(9), which requires that a new
listing on Nasdaq that is not an IPO have a financial
advisor willing to perform the functions performed
by an underwriter in connection with pricing an
IPO on Nasdaq. See Notice, supra note 8, at 40185.
34 See Notice, supra note 8, at 40185.
35 See id. The Exchange noted that despite the
proposed obligation to consult with the financial
advisor, the DMM would remain responsible for
facilitating the opening of trading of such security,
and the opening of such security must take into
consideration the buy and sell orders available on
the Exchange’s book. See id. Accordingly, the
Exchange stated that just as a DMM is not bound
by an offering price in an IPO, and will open such
a security at a price dictated by the buying and
selling interest entered on the Exchange in that
security, a DMM would not be bound by the input
32 See
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In its proposal, the Exchange stated
that the proposed amendments to both
Rule 15 and Rule 104 are designed to
provide DMMs with information to
assist them in meeting their obligations
to open a new listing under the
proposed amended text of Footnote
(E).36
The Exchange further proposed to
amend its rules to provide authority to
declare a regulatory halt for a non-IPO
new listing. As proposed, Rule 123D(d)
would provide that the Exchange may
declare a regulatory halt in a security
that is the subject of an initial pricing
on the Exchange and that has not been
listed on a national securities exchange
or traded in the over-the-counter market
pursuant to FINRA Form 211
immediately prior to the initial
pricing.37 In addition, proposed Rule
123D(d) would provide that this
regulatory halt would be terminated
when the DMM opens the security.38
The Exchange stated its belief that it
would be consistent with the protection
of investors and the public interest for
the Exchange, as a primary listing
exchange, to have the authority to
declare a regulatory halt for a security
that is the subject of a non-IPO listing
because it would ensure that a new
listing that is not the subject of an IPO
could not be traded before the security
opens on the Exchange.39
III. Summary of Comments
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The Commission received two
comments on the proposed rule
change.40 Both commenters supported
the proposal.
One commenter urged the
Commission to approve the proposal
he or she receives from the financial advisor. See
id. at 40185–86.
36 See id. at 40186.
37 See proposed Rule 123D(d). The Exchange
proposed to renumber current subsection (d) of
Rule 123D as subsection (e). See proposed Rule
123D(e).
38 See proposed Rule 123D(d). The Exchange
stated that proposed Rule 123D(d) is based in part
on (i) Nasdaq Rule 4120(c)(9), which provides that
the process for halting and initial pricing of a
security that is the subject of an IPO on Nasdaq is
also available for the initial pricing of any other
security that has not been listed on a national
securities exchange or traded in the over-thecounter market immediately prior to the initial
public offering, provided that a broker-dealer
serving in the role of financial advisor to the issuer
of the securities being listed is willing to perform
the functions under Nasdaq Rule 4120(c)(7)(B) that
are performed by an underwriter with respect to an
initial public offering; and (ii) Nasdaq Rule
4120(c)(8)(A), which provides that such halt
condition shall be terminated when the security is
released for trading on Nasdaq. See Notice, supra
note 8, at 40186.
39 See Notice, supra note 8, at 40186.
40 See Angel Letter, supra note 5, and Cleary
Gottlieb Letter, supra note 10.
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promptly and without further delay.41
This commenter stated the belief that
there is no public interest served in
excluding the listing of a large company
with many investors that does not need
to raise additional capital through an
IPO.42 The commenter further stated
that in determining whether a company
is large enough to meet the listing
standards, if a company were to trade at
a market capitalization far below the
thresholds, the harm would be to the
Exchange’s reputation, not to the
investing public.43 The commenter
further discussed concerns about how
NYSE will open the market for a
security under the proposal when there
is no reliable previous price or offering
price.44 The commenter stated that if
NYSE gets the ‘‘offering price ‘wrong,’
the secondary market trading will
quickly find the market price at which
supply equals demand within a few
minutes if not a few seconds.’’ 45
The other commenter also supported
the proposal.46 The commenter stated
that, in terms of the lack of an offering
price or price range for the securities,
the factors that typically underpin the
price determination in an IPO are all
publicly available, such as knowledge of
‘‘comparable public companies and the
trading prices of their shares and the
corresponding financial metrics of the
new issuer.’’ 47 The commenter also
stated that, in any case, ‘‘the opening
price will be quickly adjusted through
normal market forces.’’ 48 Further, the
commenter also did not believe that the
lack of information on the number of
shares that will likely be made available
for sale was an issue because although
the ‘‘absence of a certain block of shares
offered at the outset necessarily creates
greater uncertainty . . . , that concern
seems to be reasonably mitigated by the
practical reality that an issuer is
unlikely to incur the cost—both out of
pocket and in management time—of
undertaking an exchange listing without
41 See
Angel Letter, supra note 5, at 1.
id. at 2.
43 See id. at 3.
44 See id.
45 Id.
46 See Cleary Gottlieb Letter, supra note 10,
submitted in response to the Order Instituting
Proceedings. Several of the comments from this
commenter focused on the Exchange’s proposal to
allow a company to list on the Exchange
immediately upon effectiveness of an Exchange Act
registration statement without any concurrent
Securities Act registration. In Amendment No. 3,
the Exchange removed this aspect of its proposal
from its proposed rule change. Therefore, those
comments that related solely to the deleted portion
of the Exchange proposal are not relevant to the
amended proposal. See Amendment No. 3, supra
note 11.
47 Cleary Gottlieb Letter, supra note 10, at 3.
48 Id.
42 See
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5653
having sounded out its shareholders
about their general interest in possibly
selling shares.’’ 49
IV. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change, as
modified by Amendment No. 3, is
consistent with the requirements of the
Exchange Act and the rules and
regulations thereunder applicable to a
national securities exchange.50 In
particular, the Commission finds that
the proposed rule change, as modified
by Amendment No. 3, is consistent with
Section 6(b)(5) of the Exchange Act,51
which requires, among other things, that
the rules of a national securities
exchange be 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. Section 6(b)(5) of the
Exchange Act 52 also requires that the
rules of an exchange not be designed to
permit unfair discrimination between
customers, issuers, brokers, or dealers.
The Commission has consistently
recognized the importance of exchange
listing standards. Among other things,
such listing standards help ensure that
exchange listed companies will have
sufficient public float, investor base,
and trading interest to provide the depth
and liquidity necessary to promote fair
and orderly markets.53
The Exchange has stated that it
typically expects a company to list in
49 Id.
50 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).
51 15 U.S.C. 78f(b)(5).
52 Id.
53 The Commission has stated in approving
exchange listing requirements that the development
and enforcement of adequate standards governing
the listing of securities on an exchange is an activity
of critical importance to the financial markets and
the investing public. In addition, once a security
has been approved for initial listing, maintenance
criteria allow an exchange to monitor the status and
trading characteristics of that issue to ensure that
it continues to meet the exchange’s standards for
market depth and liquidity so that fair and orderly
markets can be maintained. See, e.g., Securities
Exchange Act Release Nos. 81856 (October 11,
2017), 82 FR 48296, 48298 (October 17, 2017) (SR–
NYSE–2017–31); 81079 (July 5, 2017), 82 FR 32022,
32023 (July 11, 2017) (SR–NYSE–2017–11). The
Commission notes that, in general, adequate listing
standards, by promoting fair and orderly markets,
are consistent with Section 6(b)(5) of the Exchange
Act, in that they are, among other things, designed
to prevent fraudulent and manipulative acts and
practices, promote just and equitable principles of
trade and protect investors and the public interest.
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Federal Register / Vol. 83, No. 27 / Thursday, February 8, 2018 / Notices
connection with a firm commitment
underwritten IPO, upon transfer from
another market, or pursuant to a spinoff.54 The Exchange listing standards
currently contain a provision, approved
in 2008, that gives the Exchange
discretion to list companies upon
effectiveness of a registration statement
under the Securities Act that is filed
solely for the purpose of allowing
existing shareholders to resell shares
they obtained in earlier private
placements if such companies can
evidence $100 million of publicly held
shares based on the lesser amount from
a Valuation provided by an independent
third party or the price in a Private
Placement Market.55
As noted above, the Exchange has
proposed to provide an alternative in
cases where there is not sufficient
Private Placement Market trading to
establish a reliable price. The Exchange
has also proposed additional standards
concerning the independence of the
third party agent providing the
Valuation.
The Commission believes that the
proposed rule change will provide a
means for a category of companies with
securities that have not previously been
traded on a public market and that are
listing only upon effectiveness of a
selling shareholder registration
statement, without a related
underwritten offering, and without
recent trading in a Private Placement
Market, to list on the Exchange. In
particular, for such companies that
otherwise meet NYSE’s listing
standards,56 the proposed rule change
54 See
Notice, supra note 8, at 40183.
to the Exchange, companies listing
their securities upon a selling shareholder
registration statement have sold securities in one or
more private placements and do not wish to raise
cash in an offering at the time of listing, unlike a
company listing in conjunction with its IPO.
Because the Exchange believed such companies
meeting all other listing standards should not be
barred from listing, the Exchange proposed
Footnote (E) to the listing standards which the
Commission approved in 2008. In proposing
Footnote (E) in 2008, the Exchange stated that with
such companies, there is no public trading market
to rely on to evaluate whether the company meets
the market value standard as with a company
transferring from another market, nor is there a
public offering whose price would provide the basis
for a letter of the type typically provided by
underwriters for companies listing in conjunction
with an IPO. See Section 102.01B, Footnote (E);
Securities Exchange Act Release No. 58550
(September 15, 2008), 73 FR 54442, 54442–43
(September 19, 2008) (SR–NYSE–2008–68) (‘‘NYSE
2008 Order’’). See also notes 18–19 supra and
accompanying text, describing the requirements in
current rule to be able to rely on a Private
Placement Market.
56 Companies listing upon an effective
registration statement would have to meet the
distribution requirements set forth in Section
102.01A (i.e., that the company have 400 beneficial
holders of round lots of 100 shares and 1,100,000
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55 According
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will provide that, in the absence of any
recent trading in a Private Placement
Market, the Exchange will determine
that such company has met its market
value of publicly-held shares
requirement if the company provides a
Valuation from an independent third
party evidencing a market value of
publicly-held shares of at least $250
million. According to the Exchange,
‘‘[a]dopting a requirement that the
Valuation must be at least two-and-ahalf times the $100 million requirement
will give a significant degree of comfort
that the market value of the company’s
shares will meet the standard upon
commencement of trading on the
Exchange.’’ 57 The Commission believes
that requiring a company that does not
have a recent and sustained history of
trading of its securities in a Private
Placement Market to provide a
Valuation of at least $250 million
should provide the Exchange with a
reasonable level of assurance that the
company’s market value supports listing
on the Exchange and the maintenance of
fair and orderly markets thereby
protecting investors and the public
interest in accordance with Section
6(b)(5) of the Exchange Act.
Exchange rules also seek to ensure
that the Valuation is reliable by
requiring it to be provided by an
independent third party that has
significant experience and demonstrable
competence in providing valuations of
companies.58 The proposed rule change
establishes additional independence
criteria, pursuant to which the valuation
agent will not be ‘‘independent’’ if the
valuation agent, or any affiliated person,
owns in the aggregate more than 5% of
the securities to be listed,59 or has
provided investment banking services to
the company in the 12 months prior to
the Valuation or in connection with the
listing.60 The Commission believes that,
publicly-held shares), the requirements of Section
102.01B (which includes a $4.00 price requirement
at the time of initial listing), and one of the financial
standards set forth in Section 102.01C of the
Manual (i.e., the Earnings Test or the Global Market
Capitalization Test), as well as comply with all
other applicable NYSE rules, including the
corporate governance requirements.
57 See Notice, supra note 8, at 40184. Further, in
approving Footnote (E) in 2008, the Commission
recognized that ‘‘the most recent trading price in a
Private Placement Market may be an imperfect
indication as to the value of a security upon listing,
in part because the Private Placement Markets
generally do not have the depth and liquidity and
price discovery mechanisms found on public
trading markets.’’ NYSE 2008 Order, supra note 55,
at 54443.
58 See Footnote (E) for additional requirements for
the Exchange to be able to rely on the Valuation.
59 This calculation of ownership will include any
right to receive such securities exercisable within
60 days.
60 See supra notes 24–26, and accompanying text.
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consistent with Section 6(b)(5) of
Exchange Act and the protection of
investors, these new independence
requirements should help to ensure that
the Valuation is reliable.61
The Exchange also has proposed to
amend certain of its procedures to
address how the DMM is to establish the
Reference Price in connection with the
opening, on the first day of trading, of
a security listed under Footnote (E).62
Specifically, for a security with
sustained trading in a Private Placement
Market, the Reference Price will be the
most recent transaction price in that
market; otherwise the Reference Price
will be determined by the Exchange in
consultation with a financial advisor to
the issuer. The DMM will also be
required to consult with the financial
advisor to the issuer where there is no
recent sustained history of trading in
order to effect a fair and orderly opening
of such security.63 The Commission
believes that the proposed changes
should help establish a reliable
Reference Price, and provide additional
information to the DMM, and thereby
facilitate the opening by the DMM,
when trading first commences on the
Exchange for certain securities not listed
in connection with an underwritten
IPO, and should help to promote fair
and orderly markets. The Commission
believes these changes, consistent with
Section 6(b)(5) of the Exchange Act, are
reasonably designed to protect investors
and the public interest and promote just
and equitable principles of trade for the
opening of securities listed under the
new standards.
Finally, the Exchange has proposed
that it be permitted to declare a
regulatory halt in certain securities that
are the subject of an initial pricing on
the Exchange, and have not been listed
on an exchange or quoted in an over61 The Commission also notes that companies
listing pursuant to the new proposed provision will
be required to meet the distribution requirements of
Section 102.01A of the Manual, the requirements of
Section 102.01(B) of the Manual, and one of the
financial standards in Section 102.01C of the
Manual, which are the same requirements that
apply to most equity listings on the Exchange. See
note 56, supra.
62 Under Rule 15 a DMM is required to publish
a pre-opening indication before a security opens if
the opening transaction on the Exchange is
anticipated to be at a price that represents a change
of more than the ‘‘Applicable Price Range’’ from a
specified Reference Price. Under Rule 15, for
example, the ‘‘Applicable Price Range’’ for
determining whether to publish a pre-opening
indication is 5% for securities with a Reference
Price over $3.00.
63 In its proposal, the Exchange stated that such
‘‘financial advisor would be able to provide input
to the DMM regarding expectations of where such
a new listing should be priced, based on pre-listing
selling and buying interest and other factors that
would not be available to the DMM through other
sources.’’ See Notice, supra note 8, at 40185.
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Federal Register / Vol. 83, No. 27 / Thursday, February 8, 2018 / Notices
the-counter quotation medium
immediately prior thereto. Such
regulatory halt will be terminated when
the DMM opens the security, and is for
the limited purpose of precluding other
markets from trading a security until the
Exchange has completed the initial
pricing process. The Commission
believes this proposed change also
should facilitate the initial opening by
the DMM of certain securities not listed
in connection with an underwritten
IPO, and thereby promote fair and
orderly markets and the protection of
investors.64
For the reasons set forth above, the
Commission finds that the proposed
rule change, as modified by Amendment
No. 3, is consistent with the Exchange
Act.
V. Solicitation of Comments on
Amendment No. 3
Interested persons are invited to
submit written data, views, and
arguments concerning whether
Amendment No. 3 is consistent with the
Exchange 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 email to rule-comments@
sec.gov. Please include File Number SR–
NYSE–2017–30 on the subject line.
Paper Comments
daltland on DSKBBV9HB2PROD with NOTICES
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE, Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSE–2017–30. 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 website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
64 The proposed regulatory halt allows the
Exchange to have a similar opening procedure for
securities listed pursuant to Footnote (E) as an IPO
security under Section 12(f) of the Exchange Act
and Rule 12f–2, since such securities raise similar
issues in terms of initial pricing on the first day of
trading. See 15 U.S.C. 78l(f); 17 CFR 240.12f–2.
Similar to unlisted trading privilege rules that
prevent other exchanges from trading an IPO
security until the primary listing market has
reported the first opening trade, the regulatory halt
will allow the DMM to complete the initial pricing
and open the security before other markets can
trade.
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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 website 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 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.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSE–2017–30, and
should be submitted on or before March
1, 2018.
VI. Accelerated Approval of Proposed
Rule Change, as Modified by
Amendment No. 3
The Commission finds good cause to
approve the proposed rule change, as
modified by Amendment No. 3, prior to
the thirtieth day after the date of
publication of the notice of Amendment
No. 3 in the Federal Register. The
Commission notes that the proposed
rule change, as modified by Amendment
No. 3 remains identical to the version
published for notice and comment on
August 24, 2017,65 except for the
proposed deletion described above,66
and that the only comments the
Commission received on this proposed
rule change were in support of the
proposal. The Commission also has
found that the proposal, as modified by
Amendment No. 3, is consistent with
the Exchange Act for the reasons
discussed herein. Accordingly, the
Commission finds good cause for
approving the proposed rule change, as
modified by Amendment No. 3, on an
accelerated basis, pursuant to Section
19(b)(2) of the Exchange Act.67
VII. Conclusion
It is Therefore Ordered, pursuant to
Section 19(b)(2) of the Exchange Act,68
that the proposed rule change (SR–
NYSE–2017–30), as modified by
65 See
Notice, supra note 8.
note 11, supra.
67 15 U.S.C. 78s(b)(2).
68 Id.
66 See
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5655
Amendment No. 3 thereto, be, and
hereby is, approved on an accelerated
basis.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.69
Brent J. Fields,
Secretary.
[FR Doc. 2018–02501 Filed 2–7–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82623; File No. SR–IEX–
2018–01]
Self-Regulatory Organizations;
Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Modify the
Default Handling of Market Orders
Entered With a Time-in-Force of DAY
February 2, 2018.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on January
22, 2018, the Investors Exchange LLC
(‘‘IEX’’ or the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II and III
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
Pursuant to the provisions of Section
19(b)(1) under the Securities Exchange
Act of 1934 (‘‘Act’’),4 and Rule 19b–4
thereunder,5 Investors Exchange LLC
(‘‘IEX’’ or ‘‘Exchange’’) is filing with the
Securities and Exchange Commission
(‘‘Commission’’) a proposed rule change
to modify the default handling of market
orders 6 entered with a time-in-force of
DAY.7 The Exchange has designated
this rule change as ‘‘non-controversial’’
under Section 19(b)(3)(A) of the Act 8
and provided the Commission with the
notice required by Rule 19b–4(f)(6)
thereunder.9 The text of the proposed
69 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
4 15 U.S.C. 78s(b)(1).
5 17 CRF 240.19b–4.
6 See Rule 11.190(a)(2).
7 See Rule 11.190(c)(3).
8 15 U.S.C. 78s(b)(3)(A).
9 17 CFR 240.19b–4.
1 15
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]]>Agencies
[Federal Register Volume 83, Number 27 (Thursday, February 8, 2018)]
[Notices]
[Pages 5650-5655]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-02501]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82627; File No. SR-NYSE-2017-30]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Amendment No. 3 and Order Granting Accelerated
Approval of Proposed Rule Change, as Modified by Amendment No. 3, To
Amend Section 102.01B of the NYSE Listed Company Manual To Provide for
the Listing of Companies That List Without a Prior Exchange Act
Registration and That Are Not Listing in Connection With an
Underwritten Initial Public Offering and Related Changes to Rules 15,
104, and 123D
February 2, 2018.
I. Introduction
On June 13, 2017, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) \1\ of the Securities
Exchange Act of 1934 (``Exchange Act'') \2\ and Rule 19b-4
thereunder,\3\ a proposed rule change to amend Section 102.01B of the
NYSE Listed Company Manual to modify the provisions relating to the
qualification of companies listing without a prior Exchange Act
registration in connection with an underwritten initial public offering
and amend Exchange rules to address the opening procedures on the first
day of trading of such securities. The proposal, as modified by
Amendment No. 3, would: (i) Eliminate the requirement in Footnote (E)
of Section 102.01B (``Footnote (E)'') of the Manual to have a private
placement market trading price if there is a valuation from an
independent third-party of $250 million in market value of publicly-
held shares; (ii) set forth several factors indicating when the
independent third party providing the valuation would not be deemed
``independent'' under Footnote (E); (iii) amend NYSE Rule 15 to add a
reference price for when a security is listed under Footnote (E); (iv)
amend NYSE Rule 104 to specify Designated Market Maker (``DMM'')
requirements when facilitating the opening of a security listed under
Footnote (E) when there has been no sustained history of trading in a
private placement trading market for such security; and (v) amend NYSE
Rule 123D to specify that the Exchange may declare a regulatory halt
prior to
[[Page 5651]]
opening a security that is the subject of an initial pricing upon
Exchange listing and that has not, immediately prior to such initial
pricing, traded on another national securities exchange or in the over-
the-counter market.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
The proposed rule change was published for comment in the Federal
Register on June 20, 2017.\4\ The Commission received one comment in
response to the Original Notice.\5\ The Exchange filed Amendment No. 1
to the proposed rule change on July 28, 2017, which, as noted below,
was later withdrawn. On August 3, 2017, the Commission extended the
time period within which to approve the proposed rule change,
disapprove the proposed rule change, or institute proceedings to
determine whether to approve or disapprove the proposed rule change to
September 18, 2017.\6\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 80933 (June 15,
2017), 82 FR 28200 (June 20, 2017) (``Original Notice'').
\5\ See letter to the Commission from James J. Angel, Ph.D.,
CFA, Georgetown University, dated July 28, 2017 (``Angel Letter'').
\6\ See Securities Exchange Act Release No. 81309 (August 3,
2017), 82 FR 37244 (August 9, 2017).
---------------------------------------------------------------------------
On August 16, 2017, the Exchange withdrew Amendment No. 1 and filed
Amendment No. 2 to the proposed rule change, which superseded and
replaced the proposed rule change in its entirety.\7\ The Commission
published Amendment No. 2 for comment in the Federal Register on August
24, 2017.\8\ The Commission received no comments in response to this
solicitation for comments. On September 15, 2017, the Commission
instituted proceedings to determine whether to approve or disapprove
the proposed rule change, as modified by Amendment No. 2.\9\ Following
the Order Instituting Proceedings, the Commission received one
additional comment letter.\10\ On December 8, 2017, the Exchange filed
Amendment No. 3 to the proposed rule change, which superseded and
replaced the proposed rule change in its entirety.\11\ On December 14,
2017, the Commission extended the time period for approving or
disapproving the proposal for an additional 60 days until February 15,
2018.\12\ The Commission is publishing this notice to solicit comment
on Amendment No. 3 to the proposed rule change from interested persons,
and is approving the proposed rule change, as modified by Amendment No.
3, on an accelerated basis.
---------------------------------------------------------------------------
\7\ See Notice, infra note 8, at n. 8, which describe the
changes proposed in Amendment No. 2 from the original proposal.
\8\ See Securities Exchange Act Release No. 81440 (August 18,
2017), 82 FR 40183 (August 24, 2017) (``Notice'').
\9\ See Securities Exchange Act Release No. 81640 (September 15,
2017), 82 FR 44229 (September 21, 2017) (``Order Instituting
Proceedings'').
\10\ See letter to Brent J. Fields, Commission, from Cleary
Gottlieb Steen & Hamilton LLP, dated October 12, 2017 (``Cleary
Gottlieb Letter'').
\11\ Amendment No. 3 revised the proposal to eliminate the
proposed changes to Footnote (E) that would have allowed a company
to list immediately upon effectiveness of an Exchange Act
registration statement only, without any concurrent IPO or
Securities Act of 1933 (``Securities Act'') registration. Except for
removing this part of the proposal, the remaining proposed
amendments in Amendment No. 3 are identical to those noticed for
comment in Amendment No. 2. Amendment No. 3 also contained a
complete restated Form 19b-4 under the Exchange Act, which contained
the same discussions, statutory basis and other sections set forth
in Amendment No. 2, with slight modifications to take into account
the deleted provision. Amendment No. 3 is available at: https://www.sec.gov/comments/sr-nyse-2017-30/nyse201730-2782322-161654.pdf.
\12\ See Securities Exchange Act Release No. 82332 (December 14,
2017), 82 FR 60442 (December 20, 2017).
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change, as Modified by Amendment
No. 3
1. Listing Standards
Generally, Section 102 of the Manual sets forth the minimum
numerical standards for domestic companies, or foreign private issuers
that choose to follow the domestic standards, to list equity securities
on the Exchange. Section 102.01B of the Manual requires a listed
company to demonstrate at the time of listing an aggregate market value
of publicly-held shares of either $40 million or $100 million,
depending on the type of listing.\13\ Section 102.01B also states that,
in these cases, the Exchange relies on written representations from the
underwriter, investment banker, or other financial advisor, as
applicable, with respect to this valuation.\14\ While Footnote (E)
states that the Exchange generally expects to list companies in
connection with a firm commitment underwritten IPO, upon transfer from
another market, or pursuant to a spin-off, Section 102.01B of the
Manual also contemplates that companies that have not previously had
their common equity securities registered under the Exchange Act, but
which have sold common equity securities in a private placement, may
wish to list their common equity securities on the Exchange at the time
of effectiveness of a registration statement \15\ filed solely for the
purpose of allowing existing shareholders to sell their shares.\16\
Specifically, Footnote (E) permits the Exchange, on a case by case
basis, to exercise discretion to list such companies and provides that
the Exchange will determine that such a company has met the $100
million aggregate market value of publicly-held shares requirement
based on a combination of both (i) an independent third-party valuation
(a ``Valuation'') \17\ of the company and (ii) the most recent trading
price for the company's common stock in a trading system for
unregistered securities operated by a national securities exchange or a
registered broker-dealer (a ``Private Placement Market'').\18\ Under
the current rules, the Exchange will attribute a market value of
publicly-held shares to the company equal to the lesser of (i) the
value calculable based on the Valuation and (ii) the value calculable
based on the most recent trading price in a Private Placement
Market.\19\
---------------------------------------------------------------------------
\13\ Section 102.01B of the Manual states that a company must
demonstrate ``an aggregate market value of publicly-held shares of
$40,000,000 for companies that list either at the time of their
initial public offerings (``IPO'') (C) or as a result of spin-offs
or under the Affiliated Company standard or, for companies that list
at the time of their Initial Firm Commitment Underwritten Public
Offering (C), and $100,000,000 for other companies (D)(E).'' Section
102.01B also requires a company to have a closing price, or if
listing in connection with an IPO or Initial Firm Commitment
Underwritten Public Offering, an IPO or Initial Firm Commitment
Underwritten Public Offering price per share of at least $4.00 at
the time of initial listing.
\14\ See Section 102.01B, Footnote (C) of the Manual, which
states that for companies listing at the time of their IPO or
Initial Firm Commitment Underwritten Public Offering, the Exchange
will rely on a written commitment from the underwriter to represent
the anticipated value of the company's offering. For spin-offs, the
Exchange will rely on a representation from the parent company's
investment banker (or other financial advisor) in order to estimate
the market value based upon the distribution ratio.
\15\ The reference to a registration statement refers to a
registration statement effective under the Securities Act.
\16\ See Section 102.01B, Footnote (E) of the Manual.
\17\ See Section 102.01B, Footnote (E) of the Manual, which sets
forth specific requirements for the Valuation. Among other factors,
any Valuation used for purposes of Footnote (E) must be provided by
an entity that has significant experience and demonstrable
competence in the provision of such valuations.
\18\ Section 102.01B, Footnote (E) of the Manual also sets forth
specific factors for relying on a Private Placement Market price,
and states that the Exchange will examine the trading price trends
for the stock in the Private Placement Market over a period of
several months prior to listing and will only rely on such market if
it is ``consistent with a sustained history [of trading] over that
several month period.''
\19\ See Section 102.01B, Footnote (E) of the Manual.
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The Exchange proposed two changes to Footnote (E). First, the
Exchange proposed to amend Footnote (E) to provide that, in the absence
of any recent trading in a Private Placement Market, the Exchange will
determine that a company has met its market value of publicly-held
shares requirement if the company provides a recent Valuation
evidencing a market value of
[[Page 5652]]
publicly-held shares of at least $250 million.\20\ In proposing this
change, the Exchange expressed the view that the current requirement of
Footnote (E) to rely on recent Private Placement Market trading in
addition to a Valuation may cause difficulties for certain companies
that are otherwise clearly qualified for listing.\21\ The Exchange
stated that some companies that are clearly large enough to be suitable
for listing on the Exchange do not have their securities traded at all
on a Private Placement Market prior to going public and, in other
cases, the Private Placement Market trading is too limited to provide a
reasonable basis for reaching conclusions about a company's
qualification.\22\ In proposing to adopt a Valuation that must be at
least two-and-a-half times the $100 million requirement of Section
102.01B of the Manual, the Exchange stated that this amount ``will give
a significant degree of comfort that the market value of the company's
shares will meet the [$100 million] standard upon commencement of
trading on the Exchange,'' particularly because any such Valuation
``must be provided by an entity that has significant experience and
demonstrable competence in the provision of such valuations.'' \23\
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\20\ See proposed Section 102.01B, Footnote (E) of the Manual.
The Commission notes that the Exhibit 5 to Amendment No. 3 contains
the proposed rule language. Any references herein to the proposed
rule language shall refer to the language available in Exhibit 5 to
Amendment No. 3, which is available from the Exchange or on the
Commission's website www.sec.gov. See also Notice, supra note 8.
\21\ See Notice, supra note 8, at 40184.
\22\ See id.
\23\ Id. In its proposal, the Exchange stated that it believed
that it is unlikely that any Valuation would reach a conclusion that
was incorrect to the degree necessary for a company using this
provision to fail to meet the $100 million requirement upon listing,
in particular because any Valuation used for this purpose must be
provided by an entity that has significant experience and
demonstrable competence in the provision of such valuations. See id.
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Second, the Exchange proposed to further amend Footnote (E) by
establishing certain criteria that would preclude a valuation agent
from being considered ``independent'' for purposes of Footnote (E),
which the Exchange believes will provide a significant additional
guarantee of the independence of any entity providing such a
Valuation.\24\ Specifically, the Exchange proposed that a valuation
agent will not be deemed to be independent if:
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\24\ See id.
---------------------------------------------------------------------------
At the time it provides such Valuation, the valuation
agent or any affiliated person or persons beneficially own in the
aggregate as of the date of the Valuation, more than 5% of the class of
securities to be listed, including any right to receive any such
securities exercisable within 60 days;
The valuation agent or any affiliated entity has provided
any investment banking services to the listing applicant within the 12
months preceding the date of the Valuation; \25\ or
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\25\ For purposes of this provision, ``investment banking
services'' includes, without limitation, acting as an underwriter in
an offering for the issuer; acting as a financial adviser in a
merger or acquisition; providing venture capital, equity lines of
credit, PIPEs (private investment, public equity transactions), or
similar investments; serving as placement agent for the issuer; or
acting as a member of a selling group in a securities underwriting.
See proposed Section 102.01B, Footnote (E) of the Manual.
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The valuation agent or any affiliated entity has been
engaged to provide investment banking services to the listing applicant
in connection with the proposed listing or any related financings or
other related transactions.\26\
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\26\ See id.
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2. Trading Rules
The Exchange also proposed to amend Exchange Rules 15, 104 and
123D, governing the opening of trading, to specify procedures for the
opening trade on the day of initial listing of a company that lists
under the proposed amendments to Footnote (E) and did not have any
recent trading in a Private Placement Market.\27\
---------------------------------------------------------------------------
\27\ See Notice, supra note 8, at 41085.
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Rule 15(b) provides that a DMM will publish a pre-opening
indication \28\ before a security opens if the opening transaction on
the Exchange is anticipated to be at a price that represents a change
of more than the ``Applicable Price Range,'' \29\ from a specified
``Reference Price.'' \30\ Rule 15(c)(1) specifies that the Reference
Price for a security (other than an American Depository Receipt) would
be either (A) the security's last reported sale price on the Exchange;
(B) the security's offering price in the case of an IPO; or (C) the
security's last reported sale price on the securities market from which
the security is being transferred to the Exchange.\31\
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\28\ Rule 15(a) states that a pre-opening indication will
include the security and the price range within which the opening
price is anticipated to occur. Pre-opening indications are published
on the Exchange's proprietary data feeds and the securities
information processor (``SIP''). See Rule 15(a). The Exchange may
also publish order imbalance information prior to the opening of a
security. The order imbalance information contains the price at
which opening interest may be executed in full. See Rule 15(g).
\29\ See Rule 15(d) for a definition of ``Applicable Price
Range.''
\30\ Rule 15(b) also provides that a DMM will publish a pre-
opening indication if a security has not opened by 10:00 a.m.
Eastern Time. See Rule 15(c) for a definition of ``Reference
Price.''
\31\ See Rule 15(c)(1).
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The Exchange proposed to amend Rule 15(c)(1) to add new sub-
paragraph (D) to specify the Reference Price for a security that is
listed under Footnote (E). The Exchange proposed that if such security
has had recent sustained trading in a Private Placement Market prior to
listing, the Reference Price in such scenario would be the most recent
transaction price in that market or, if no such sustained trading has
occurred, the Reference Price used would be a price determined by the
Exchange in consultation with a financial advisor to the issuer of such
security.\32\
---------------------------------------------------------------------------
\32\ See proposed Rule 15(c)(1)(D).
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Rule 104(a)(2) provides that the DMM has a responsibility for
facilitating openings and reopenings for each of the securities in
which the DMM is registered as required under Exchange rules, which
includes supplying liquidity as needed. The Exchange proposed to amend
Rule 104(a)(2) to require the DMM to consult with the issuer's
financial advisor when facilitating the opening on the first day of
trading of a security that is listing under Footnote (E) and that has
not had recent sustained history of trading in a Private Placement
Market prior to listing, in order to effect a fair and orderly opening
of such security.\33\
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\33\ See proposed Rule 104(a)(2). The Exchange stated that this
requirement is based in part on Nasdaq Rule 4120(c)(9), which
requires that a new listing on Nasdaq that is not an IPO have a
financial advisor willing to perform the functions performed by an
underwriter in connection with pricing an IPO on Nasdaq. See Notice,
supra note 8, at 40185.
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The Exchange stated that it believes that such a financial advisor
would have an understanding of the status of ownership of outstanding
shares in the company and would have been working with the issuer to
identify a market for the securities upon listing.\34\ As a result, it
believes such financial advisor would be able to provide input to the
DMM regarding expectations of where such a new listing should be
priced, based on pre-listing selling and buying interest and other
factors that would not be available to the DMM through other
sources.\35\
---------------------------------------------------------------------------
\34\ See Notice, supra note 8, at 40185.
\35\ See id. The Exchange noted that despite the proposed
obligation to consult with the financial advisor, the DMM would
remain responsible for facilitating the opening of trading of such
security, and the opening of such security must take into
consideration the buy and sell orders available on the Exchange's
book. See id. Accordingly, the Exchange stated that just as a DMM is
not bound by an offering price in an IPO, and will open such a
security at a price dictated by the buying and selling interest
entered on the Exchange in that security, a DMM would not be bound
by the input he or she receives from the financial advisor. See id.
at 40185-86.
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[[Page 5653]]
In its proposal, the Exchange stated that the proposed amendments
to both Rule 15 and Rule 104 are designed to provide DMMs with
information to assist them in meeting their obligations to open a new
listing under the proposed amended text of Footnote (E).\36\
---------------------------------------------------------------------------
\36\ See id. at 40186.
---------------------------------------------------------------------------
The Exchange further proposed to amend its rules to provide
authority to declare a regulatory halt for a non-IPO new listing. As
proposed, Rule 123D(d) would provide that the Exchange may declare a
regulatory halt in a security that is the subject of an initial pricing
on the Exchange and that has not been listed on a national securities
exchange or traded in the over-the-counter market pursuant to FINRA
Form 211 immediately prior to the initial pricing.\37\ In addition,
proposed Rule 123D(d) would provide that this regulatory halt would be
terminated when the DMM opens the security.\38\ The Exchange stated its
belief that it would be consistent with the protection of investors and
the public interest for the Exchange, as a primary listing exchange, to
have the authority to declare a regulatory halt for a security that is
the subject of a non-IPO listing because it would ensure that a new
listing that is not the subject of an IPO could not be traded before
the security opens on the Exchange.\39\
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\37\ See proposed Rule 123D(d). The Exchange proposed to
renumber current subsection (d) of Rule 123D as subsection (e). See
proposed Rule 123D(e).
\38\ See proposed Rule 123D(d). The Exchange stated that
proposed Rule 123D(d) is based in part on (i) Nasdaq Rule
4120(c)(9), which provides that the process for halting and initial
pricing of a security that is the subject of an IPO on Nasdaq is
also available for the initial pricing of any other security that
has not been listed on a national securities exchange or traded in
the over-the-counter market immediately prior to the initial public
offering, provided that a broker-dealer serving in the role of
financial advisor to the issuer of the securities being listed is
willing to perform the functions under Nasdaq Rule 4120(c)(7)(B)
that are performed by an underwriter with respect to an initial
public offering; and (ii) Nasdaq Rule 4120(c)(8)(A), which provides
that such halt condition shall be terminated when the security is
released for trading on Nasdaq. See Notice, supra note 8, at 40186.
\39\ See Notice, supra note 8, at 40186.
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III. Summary of Comments
The Commission received two comments on the proposed rule
change.\40\ Both commenters supported the proposal.
---------------------------------------------------------------------------
\40\ See Angel Letter, supra note 5, and Cleary Gottlieb Letter,
supra note 10.
---------------------------------------------------------------------------
One commenter urged the Commission to approve the proposal promptly
and without further delay.\41\ This commenter stated the belief that
there is no public interest served in excluding the listing of a large
company with many investors that does not need to raise additional
capital through an IPO.\42\ The commenter further stated that in
determining whether a company is large enough to meet the listing
standards, if a company were to trade at a market capitalization far
below the thresholds, the harm would be to the Exchange's reputation,
not to the investing public.\43\ The commenter further discussed
concerns about how NYSE will open the market for a security under the
proposal when there is no reliable previous price or offering
price.\44\ The commenter stated that if NYSE gets the ``offering price
`wrong,' the secondary market trading will quickly find the market
price at which supply equals demand within a few minutes if not a few
seconds.'' \45\
---------------------------------------------------------------------------
\41\ See Angel Letter, supra note 5, at 1.
\42\ See id. at 2.
\43\ See id. at 3.
\44\ See id.
\45\ Id.
---------------------------------------------------------------------------
The other commenter also supported the proposal.\46\ The commenter
stated that, in terms of the lack of an offering price or price range
for the securities, the factors that typically underpin the price
determination in an IPO are all publicly available, such as knowledge
of ``comparable public companies and the trading prices of their shares
and the corresponding financial metrics of the new issuer.'' \47\ The
commenter also stated that, in any case, ``the opening price will be
quickly adjusted through normal market forces.'' \48\ Further, the
commenter also did not believe that the lack of information on the
number of shares that will likely be made available for sale was an
issue because although the ``absence of a certain block of shares
offered at the outset necessarily creates greater uncertainty . . . ,
that concern seems to be reasonably mitigated by the practical reality
that an issuer is unlikely to incur the cost--both out of pocket and in
management time--of undertaking an exchange listing without having
sounded out its shareholders about their general interest in possibly
selling shares.'' \49\
---------------------------------------------------------------------------
\46\ See Cleary Gottlieb Letter, supra note 10, submitted in
response to the Order Instituting Proceedings. Several of the
comments from this commenter focused on the Exchange's proposal to
allow a company to list on the Exchange immediately upon
effectiveness of an Exchange Act registration statement without any
concurrent Securities Act registration. In Amendment No. 3, the
Exchange removed this aspect of its proposal from its proposed rule
change. Therefore, those comments that related solely to the deleted
portion of the Exchange proposal are not relevant to the amended
proposal. See Amendment No. 3, supra note 11.
\47\ Cleary Gottlieb Letter, supra note 10, at 3.
\48\ Id.
\49\ Id.
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IV. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change, as modified by Amendment No. 3, is consistent with the
requirements of the Exchange Act and the rules and regulations
thereunder applicable to a national securities exchange.\50\ In
particular, the Commission finds that the proposed rule change, as
modified by Amendment No. 3, is consistent with Section 6(b)(5) of the
Exchange Act,\51\ which requires, among other things, that the rules of
a national securities exchange be 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. Section 6(b)(5)
of the Exchange Act \52\ also requires that the rules of an exchange
not be designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
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\50\ 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).
\51\ 15 U.S.C. 78f(b)(5).
\52\ Id.
---------------------------------------------------------------------------
The Commission has consistently recognized the importance of
exchange listing standards. Among other things, such listing standards
help ensure that exchange listed companies will have sufficient public
float, investor base, and trading interest to provide the depth and
liquidity necessary to promote fair and orderly markets.\53\
---------------------------------------------------------------------------
\53\ The Commission has stated in approving exchange listing
requirements that the development and enforcement of adequate
standards governing the listing of securities on an exchange is an
activity of critical importance to the financial markets and the
investing public. In addition, once a security has been approved for
initial listing, maintenance criteria allow an exchange to monitor
the status and trading characteristics of that issue to ensure that
it continues to meet the exchange's standards for market depth and
liquidity so that fair and orderly markets can be maintained. See,
e.g., Securities Exchange Act Release Nos. 81856 (October 11, 2017),
82 FR 48296, 48298 (October 17, 2017) (SR-NYSE-2017-31); 81079 (July
5, 2017), 82 FR 32022, 32023 (July 11, 2017) (SR-NYSE-2017-11). The
Commission notes that, in general, adequate listing standards, by
promoting fair and orderly markets, are consistent with Section
6(b)(5) of the Exchange Act, in that they are, among other things,
designed to prevent fraudulent and manipulative acts and practices,
promote just and equitable principles of trade and protect investors
and the public interest.
---------------------------------------------------------------------------
The Exchange has stated that it typically expects a company to list
in
[[Page 5654]]
connection with a firm commitment underwritten IPO, upon transfer from
another market, or pursuant to a spin-off.\54\ The Exchange listing
standards currently contain a provision, approved in 2008, that gives
the Exchange discretion to list companies upon effectiveness of a
registration statement under the Securities Act that is filed solely
for the purpose of allowing existing shareholders to resell shares they
obtained in earlier private placements if such companies can evidence
$100 million of publicly held shares based on the lesser amount from a
Valuation provided by an independent third party or the price in a
Private Placement Market.\55\
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\54\ See Notice, supra note 8, at 40183.
\55\ According to the Exchange, companies listing their
securities upon a selling shareholder registration statement have
sold securities in one or more private placements and do not wish to
raise cash in an offering at the time of listing, unlike a company
listing in conjunction with its IPO. Because the Exchange believed
such companies meeting all other listing standards should not be
barred from listing, the Exchange proposed Footnote (E) to the
listing standards which the Commission approved in 2008. In
proposing Footnote (E) in 2008, the Exchange stated that with such
companies, there is no public trading market to rely on to evaluate
whether the company meets the market value standard as with a
company transferring from another market, nor is there a public
offering whose price would provide the basis for a letter of the
type typically provided by underwriters for companies listing in
conjunction with an IPO. See Section 102.01B, Footnote (E);
Securities Exchange Act Release No. 58550 (September 15, 2008), 73
FR 54442, 54442-43 (September 19, 2008) (SR-NYSE-2008-68) (``NYSE
2008 Order''). See also notes 18-19 supra and accompanying text,
describing the requirements in current rule to be able to rely on a
Private Placement Market.
---------------------------------------------------------------------------
As noted above, the Exchange has proposed to provide an alternative
in cases where there is not sufficient Private Placement Market trading
to establish a reliable price. The Exchange has also proposed
additional standards concerning the independence of the third party
agent providing the Valuation.
The Commission believes that the proposed rule change will provide
a means for a category of companies with securities that have not
previously been traded on a public market and that are listing only
upon effectiveness of a selling shareholder registration statement,
without a related underwritten offering, and without recent trading in
a Private Placement Market, to list on the Exchange. In particular, for
such companies that otherwise meet NYSE's listing standards,\56\ the
proposed rule change will provide that, in the absence of any recent
trading in a Private Placement Market, the Exchange will determine that
such company has met its market value of publicly-held shares
requirement if the company provides a Valuation from an independent
third party evidencing a market value of publicly-held shares of at
least $250 million. According to the Exchange, ``[a]dopting a
requirement that the Valuation must be at least two-and-a-half times
the $100 million requirement will give a significant degree of comfort
that the market value of the company's shares will meet the standard
upon commencement of trading on the Exchange.'' \57\ The Commission
believes that requiring a company that does not have a recent and
sustained history of trading of its securities in a Private Placement
Market to provide a Valuation of at least $250 million should provide
the Exchange with a reasonable level of assurance that the company's
market value supports listing on the Exchange and the maintenance of
fair and orderly markets thereby protecting investors and the public
interest in accordance with Section 6(b)(5) of the Exchange Act.
---------------------------------------------------------------------------
\56\ Companies listing upon an effective registration statement
would have to meet the distribution requirements set forth in
Section 102.01A (i.e., that the company have 400 beneficial holders
of round lots of 100 shares and 1,100,000 publicly-held shares), the
requirements of Section 102.01B (which includes a $4.00 price
requirement at the time of initial listing), and one of the
financial standards set forth in Section 102.01C of the Manual
(i.e., the Earnings Test or the Global Market Capitalization Test),
as well as comply with all other applicable NYSE rules, including
the corporate governance requirements.
\57\ See Notice, supra note 8, at 40184. Further, in approving
Footnote (E) in 2008, the Commission recognized that ``the most
recent trading price in a Private Placement Market may be an
imperfect indication as to the value of a security upon listing, in
part because the Private Placement Markets generally do not have the
depth and liquidity and price discovery mechanisms found on public
trading markets.'' NYSE 2008 Order, supra note 55, at 54443.
---------------------------------------------------------------------------
Exchange rules also seek to ensure that the Valuation is reliable
by requiring it to be provided by an independent third party that has
significant experience and demonstrable competence in providing
valuations of companies.\58\ The proposed rule change establishes
additional independence criteria, pursuant to which the valuation agent
will not be ``independent'' if the valuation agent, or any affiliated
person, owns in the aggregate more than 5% of the securities to be
listed,\59\ or has provided investment banking services to the company
in the 12 months prior to the Valuation or in connection with the
listing.\60\ The Commission believes that, consistent with Section
6(b)(5) of Exchange Act and the protection of investors, these new
independence requirements should help to ensure that the Valuation is
reliable.\61\
---------------------------------------------------------------------------
\58\ See Footnote (E) for additional requirements for the
Exchange to be able to rely on the Valuation.
\59\ This calculation of ownership will include any right to
receive such securities exercisable within 60 days.
\60\ See supra notes 24-26, and accompanying text.
\61\ The Commission also notes that companies listing pursuant
to the new proposed provision will be required to meet the
distribution requirements of Section 102.01A of the Manual, the
requirements of Section 102.01(B) of the Manual, and one of the
financial standards in Section 102.01C of the Manual, which are the
same requirements that apply to most equity listings on the
Exchange. See note 56, supra.
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The Exchange also has proposed to amend certain of its procedures
to address how the DMM is to establish the Reference Price in
connection with the opening, on the first day of trading, of a security
listed under Footnote (E).\62\ Specifically, for a security with
sustained trading in a Private Placement Market, the Reference Price
will be the most recent transaction price in that market; otherwise the
Reference Price will be determined by the Exchange in consultation with
a financial advisor to the issuer. The DMM will also be required to
consult with the financial advisor to the issuer where there is no
recent sustained history of trading in order to effect a fair and
orderly opening of such security.\63\ The Commission believes that the
proposed changes should help establish a reliable Reference Price, and
provide additional information to the DMM, and thereby facilitate the
opening by the DMM, when trading first commences on the Exchange for
certain securities not listed in connection with an underwritten IPO,
and should help to promote fair and orderly markets. The Commission
believes these changes, consistent with Section 6(b)(5) of the Exchange
Act, are reasonably designed to protect investors and the public
interest and promote just and equitable principles of trade for the
opening of securities listed under the new standards.
---------------------------------------------------------------------------
\62\ Under Rule 15 a DMM is required to publish a pre-opening
indication before a security opens if the opening transaction on the
Exchange is anticipated to be at a price that represents a change of
more than the ``Applicable Price Range'' from a specified Reference
Price. Under Rule 15, for example, the ``Applicable Price Range''
for determining whether to publish a pre-opening indication is 5%
for securities with a Reference Price over $3.00.
\63\ In its proposal, the Exchange stated that such ``financial
advisor would be able to provide input to the DMM regarding
expectations of where such a new listing should be priced, based on
pre-listing selling and buying interest and other factors that would
not be available to the DMM through other sources.'' See Notice,
supra note 8, at 40185.
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Finally, the Exchange has proposed that it be permitted to declare
a regulatory halt in certain securities that are the subject of an
initial pricing on the Exchange, and have not been listed on an
exchange or quoted in an over-
[[Page 5655]]
the-counter quotation medium immediately prior thereto. Such regulatory
halt will be terminated when the DMM opens the security, and is for the
limited purpose of precluding other markets from trading a security
until the Exchange has completed the initial pricing process. The
Commission believes this proposed change also should facilitate the
initial opening by the DMM of certain securities not listed in
connection with an underwritten IPO, and thereby promote fair and
orderly markets and the protection of investors.\64\
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\64\ The proposed regulatory halt allows the Exchange to have a
similar opening procedure for securities listed pursuant to Footnote
(E) as an IPO security under Section 12(f) of the Exchange Act and
Rule 12f-2, since such securities raise similar issues in terms of
initial pricing on the first day of trading. See 15 U.S.C. 78l(f);
17 CFR 240.12f-2. Similar to unlisted trading privilege rules that
prevent other exchanges from trading an IPO security until the
primary listing market has reported the first opening trade, the
regulatory halt will allow the DMM to complete the initial pricing
and open the security before other markets can trade.
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For the reasons set forth above, the Commission finds that the
proposed rule change, as modified by Amendment No. 3, is consistent
with the Exchange Act.
V. Solicitation of Comments on Amendment No. 3
Interested persons are invited to submit written data, views, and
arguments concerning whether Amendment No. 3 is consistent with the
Exchange 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 email to [email protected]. Please include
File Number SR-NYSE-2017-30 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2017-30. 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 website (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 website 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 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSE-2017-30, and should be submitted on
or before March 1, 2018.
VI. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment No. 3
The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 3, prior to the thirtieth day
after the date of publication of the notice of Amendment No. 3 in the
Federal Register. The Commission notes that the proposed rule change,
as modified by Amendment No. 3 remains identical to the version
published for notice and comment on August 24, 2017,\65\ except for the
proposed deletion described above,\66\ and that the only comments the
Commission received on this proposed rule change were in support of the
proposal. The Commission also has found that the proposal, as modified
by Amendment No. 3, is consistent with the Exchange Act for the reasons
discussed herein. Accordingly, the Commission finds good cause for
approving the proposed rule change, as modified by Amendment No. 3, on
an accelerated basis, pursuant to Section 19(b)(2) of the Exchange
Act.\67\
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\65\ See Notice, supra note 8.
\66\ See note 11, supra.
\67\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------
VII. Conclusion
It is Therefore Ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\68\ that the proposed rule change (SR-NYSE-2017-30), as
modified by Amendment No. 3 thereto, be, and hereby is, approved on an
accelerated basis.
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\68\ Id.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\69\
---------------------------------------------------------------------------
\69\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2018-02501 Filed 2-7-18; 8:45 am]
BILLING CODE 8011-01-P
