Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Listed Company Manual To Clarify the Application of the Initial Listing Requirements to Common Equity Securities Issued in Exchange for a Listed Equity Investment Tracking Stock, 57783-57786 [2018-24984]
Download as PDF
<![CDATA[
Federal Register / Vol. 83, No. 222 / Friday, November 16, 2018 / Notices
although it reflected the rate increase in
the rate tables, it mistakenly failed to
update the rate referenced under the Fee
Cap Table, which table includes line
items for, among other things, AIM
Facilitation and Solicitation Contra
Orders. Accordingly, the Exchange
proposes to update the AIM Contra
Order rates in the Fee Cap Table from
$0.05 per contract to $0.07 per contract.
No substantive changes are being made
by the proposed rule change.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.4 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 5 requirements that the rules of
an exchange be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
The Exchange believes the proposed
rule change to update an inaccurate rate
under the Fee Cap Table will alleviate
potential confusion, thereby removing
impediments to and perfecting the
mechanism of a free and open market
and a national market system and
protecting investors and the public
interest. As noted above, the proposed
filing does not substantively change any
transaction fees, but merely corrects an
inadvertent oversight from a previous
rule filing.
amozie on DSK3GDR082PROD with NOTICES
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change does not address
competitive issues, but rather, as
discussed above, is merely intended to
correct an inadvertent marking omission
relating to a rate change made in a
83 FR 3834 (January 26, 2018) (SR–CBOE–2018–
007).
4 15 U.S.C. 78f(b).
5 15 U.S.C. 78f(b)(5).
VerDate Sep<11>2014
17:19 Nov 15, 2018
Jkt 247001
previous rule filing, which will alleviate
potential confusion.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any written
comments from members or other
interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 6 and paragraph (f) of Rule
19b–4 7 thereunder. At any time within
60 days of the filing of the proposed rule
change, the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission will institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CBOE–2018–072 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CBOE–2018–072. 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 the
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–CBOE–2018–072 and
should be submitted on or before
December 7, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–24980 Filed 11–15–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84566; File No. SR–NYSE–
2018–55]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend the
Listed Company Manual To Clarify the
Application of the Initial Listing
Requirements to Common Equity
Securities Issued in Exchange for a
Listed Equity Investment Tracking
Stock
November 9, 2018.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on November
2, 2018, New York Stock Exchange LLC
(‘‘NYSE’’ or the ‘‘Exchange’’) filed with
8 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.
1 15
6 15
7 17
PO 00000
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
Frm 00070
Fmt 4703
Sfmt 4703
57783
E:\FR\FM\16NON1.SGM
16NON1
57784
Federal Register / Vol. 83, No. 222 / Friday, November 16, 2018 / Notices
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
Listed Company Manual (the ‘‘Manual’’)
to clarify the application of the initial
listing requirements to common equity
securities issued in exchange for a listed
Equity Investment Tracking Stock. The
proposed rule change is available on the
Exchange’s website at www.nyse.com, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
amozie on DSK3GDR082PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Section 102.07 of the Manual sets
forth initial listing requirements
applicable to the listing of Equity
Investment Tracking Stocks. An Equity
Investment Tracking Stock is defined as
a class of common equity securities that
tracks on an unleveraged basis the
performance of an investment by the
issuer in the common equity securities
of a single other company listed on the
Exchange. An Equity Investment
Tracking Stock may track multiple
classes of common equity securities of
a single issuer, so long as all of those
classes have identical economic rights
and at least one of those classes is listed
on the Exchange.4
4 In order for an Equity Investment Tracking
Stock to qualify for initial listing, it must meet the
requirements of Sections 102.01A and 102.01B of
the Manual and the issuer of the Equity Investment
VerDate Sep<11>2014
17:19 Nov 15, 2018
Jkt 247001
The issuer of an Equity Investment
Tracking Stock may seek (by a
shareholder vote, exchange offer or
other legally permissible means) to
exchange outstanding shares of the
Equity Investment Tracking Stock for
newly issued shares of a non-tracking
stock class of common equity securities
pursuant to a specified exchange ratio.
The common stock issued in this
exchange may be of an already listed
class or it may consist of shares of a
class that is not currently listed on the
Exchange. However, the initial listing
standards for common stock set forth in
Section 102.01 of the Manual do not
currently specify the listing standards
applicable to a newly listed class of
common stock issued in exchange for an
Equity Investment Tracking Stock.
Therefore, the Exchange proposes to
amend Section 102.01 to clarify how the
new class of common stock will be
listed in such circumstances.
In light of the fact that there is a
predecessor security listed on the NYSE,
the Exchange believes that the listing of
a common stock in exchange for shares
of a listed Equity Investment Tracking
Stock is more similar to a listing upon
transfer from another exchange than it is
to an initial public offering. Specifically,
such an exchange is comparable to a
transfer in that in both cases the
Exchange is able to rely on the existence
of both historical trading information
and a liquid public trading market in
making its listing determination. As
such the Exchange proposes to apply to
such listings the initial listing standards
applicable to transfers. The Exchange
notes that the initial listing standards
for transfers and quotations are at least
as high as those for IPOs and are more
stringent in certain respects.
The Exchange proposes to amend
Section 102.01A of the Manual to
specify that such common equity
securities listed upon consummation of
an exchange for a listed Equity
Investment Tracking Stock will be
subject to the distribution requirements
set forth in that rule for transfer and
quotation listings. Section 102.01A
provides that a company listing in
connection with a transfer or quotation
listing must have at least 1.1 million
Tracking Stock must meet the Global Market
Capitalization Test set forth in Section 102.01C. The
Exchange will not list an Equity Investment
Tracking Stock if, at the time of the proposed
listing, the issuer of the equity tracked by the Equity
Investment Tracking Stock has been deemed below
compliance with the Exchange’s listing standards.
The issuer of the Equity Investment Tracking Stock
must own (directly or indirectly) at least 50% of
both the economic interest and voting power of all
of the outstanding classes of common equity
securities of the issuer whose equity is tracked by
the Equity Investment Tracking Stock.
PO 00000
Frm 00071
Fmt 4703
Sfmt 4703
publicly held shares 5 and meet one of
the following additional distribution
requirements:
• 400 shareholders of round lots (i.e.,
at least 100 shares); or
• 2,200 total stockholders together
with an average monthly trading volume
of at least 100,000 shares over the most
recent six months; or
• 500 total shareholders together with
an average monthly trading volume of at
least 1,000,000 shares over the most
recent 12 months.
Section 102.01B of the Manual
requires companies listing upon transfer
from another exchange to demonstrate
that they have $100 million in market
value of publicly held shares and a
closing share price of $4.00 per share.6
In applying these requirements to the
listing of a new class of common stock
in exchange for an Equity Investment
Tracking Stock, the Exchange proposes
to permit issuers to demonstrate their
compliance by reference to the trading
price and publicly-held shares
outstanding of the Equity Investment
Tracking Stock immediately prior to the
consummation of the exchange, basing
those calculations on the exchange ratio
between the two securities.7 The
Exchange believes this approach is
justified, as the market price for the
Equity Investment Tracking Stocking
immediately prior to the consummation
of the exchange will reflect the market’s
anticipation of the value of the common
stock into which it will be exchanged.
Any company listing its primary class
of common stock on the Exchange must
meet one of the two financial tests in
Section 102.01C of the Manual, the
Earnings Test or the Global Market
Capitalization Test. As the Earnings Test
is based solely on the issuer’s historical
financial statements, there are no issues
specific to issuers engaged in these sorts
of exchanges of Equity Investment
Tracking Stocks for common stock.
However, the Global Market
Capitalization Test requires the issuer to
demonstrate that it has $200 million in
global market capitalization. In meeting
this test, the Exchange proposes to
permit issuers to demonstrate their
5 Shares held by directors, officers, or their
immediate families and other concentrated holding
of 10 percent or more are excluded in calculating
the number of publicly-held shares wherever that
term is used throughout this proposal.
6 Companies listing in connection with an IPO are
required to have $40 million in market value of
publicly held shares.
7 In making listing qualification determinations,
the Exchange will rely generally on information
with respect to a company’s shares outstanding,
publicly-held shares and the exchange ratio as most
recently disclosed in an SEC filing, but reserves the
right to adjust those numbers if there have been
significant changes in those numbers since the most
recent SEC disclosure.
E:\FR\FM\16NON1.SGM
16NON1
Federal Register / Vol. 83, No. 222 / Friday, November 16, 2018 / Notices
compliance by reference to the trading
price and shares outstanding of the
Equity Investment Tracking Stock prior
to the consummation of the exchange,
basing those calculations on the
exchange ratio between the two
securities.8 The Exchange believes this
approach is justified for the same
reasons set forth above with respect to
the stock price and publicly-held shares
requirements.
amozie on DSK3GDR082PROD with NOTICES
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Exchange Act,9 in
general, and furthers the objectives of
Section 6(b)(5) of the Exchange Act,10 in
particular in that it is designed to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, 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 and is not designed to
permit unfair discrimination between
customers, issuers, brokers, or dealers.
The proposal to apply the same initial
listing standards to the listing of a new
common stock issued in exchange for an
Equity Investment Tracking Stock as are
applied to transfers and quotation
listings is designed to protect investors
and the public interest because the
applicable standards are the most
stringent standards applied to the listing
of common equities on the Exchange.
The proposal to use the trading price
and shares outstanding of the Equity
Investment Tracking Stock immediately
prior to the exchange, as adjusted by the
exchange ratio, in conducting its initial
listing analysis will provide the
Exchange with relevant information
about the characteristics of the trading
market for the issuer’s securities which
will be predictive of the market for the
8 Section 102.01C provides, that, in considering
the listing under the Global Market Capitalization
Test of current publicly-traded companies, the
Exchange will require such companies to meet the
minimum $200 million global market capitalization
requirement and maintain a closing price of at least
$4 per share in each case for a period of at least
90 consecutive trading days prior to receipt of
clearance to make application to list on the
Exchange and will also consider whether the
company’s business prospects and operating results
indicate that the company’s market capitalization
value is likely to be sustained or increase over time.
The proposed rule text clarifies that these
requirements will be applicable to the listing of a
common stock issued in exchange for an Equity
Investment Tracking Stock.
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
VerDate Sep<11>2014
17:19 Nov 15, 2018
Jkt 247001
common stock into which the Equity
Investment Tracking Stock will be
exchanged. As such, this information
will be helpful to the Exchange in
making its initial listing determination.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The sole
purpose of the proposal is to clarify the
application of the initial listing
requirements to common equity
securities issued in exchange for a listed
Equity Investment Tracking Stock. As
such, the Exchange does not believe the
proposal imposes any burden on
competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 11 and Rule
19b–4(f)(6) thereunder.12 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 13 of the Act to
determine whether the proposed rule
11 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
13 15 U.S.C. 78s(b)(2)(B).
12 17
PO 00000
Frm 00072
Fmt 4703
Sfmt 4703
57785
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSE–2018–55 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSE–2018–55. 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–2018–55, and
should be submitted on or before
December 7, 2018.
E:\FR\FM\16NON1.SGM
16NON1
57786
Federal Register / Vol. 83, No. 222 / Friday, November 16, 2018 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–24984 Filed 11–15–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release Nos. 33–10573; 34–84574; File No.
265–28]
Investor Advisory Committee Meeting
Securities and Exchange
Commission.
ACTION: Notice of meeting of Securities
and Exchange Commission Dodd-Frank
Investor Advisory Committee.
AGENCY:
The Securities and Exchange
Commission Investor Advisory
Committee, established pursuant to
Section 911 of the Dodd-Frank Wall
Street Reform and Consumer Protection
Act of 2010, is providing notice that it
will hold a public meeting. The public
is invited to submit written statements
to the Committee.
DATES: The meeting will be held on
Thursday, December 13, 2018 from 9:00
a.m. until 3:00 p.m. (ET). Written
statements should be received on or
before December 13, 2018.
ADDRESSES: The meeting will be held in
Multi-Purpose Room LL–006 at the
Commission’s headquarters, 100 F
Street NE, Washington, DC 20549. The
meeting will be webcast on the
Commission’s website at www.sec.gov.
Written statements may be submitted by
any of the following methods:
SUMMARY:
amozie on DSK3GDR082PROD with NOTICES
Electronic Statements
D Use the Commission’s internet
submission form (https://www.sec.gov/
rules/other.shtml); or
D Send an email message to rulescomments@sec.gov. Please include File
No. 265–28 on the subject line; or
Paper Statements
D Send paper statements to Brent J.
Fields, Secretary, Securities and
Exchange Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
No. 265–28. This file number should be
included on the subject line if email is
used. To help us process and review
your statement more efficiently, please
use only one method.
Statements also will be available for
website viewing and printing in the
Commission’s Public Reference Room,
100 F Street NE, Room 1503,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. All statements
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.
FOR FURTHER INFORMATION CONTACT:
Marc Oorloff Sharma, Chief Counsel,
Office of the Investor Advocate, at (202)
551–3302, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549.
SUPPLEMENTARY INFORMATION: The
meeting will be open to the public,
except during that portion of the
meeting reserved for an administrative
work session during lunch. Persons
needing special accommodations to take
part because of a disability should
notify the contact person listed in the
section above entitled FOR FURTHER
INFORMATION CONTACT.
The agenda for the meeting includes:
Welcome remarks; a discussion
regarding disclosures on human capital
(which may include a recommendation
from the Investor as Owner
subcommittee); a discussion regarding
disclosures on sustainability and
environmental, social, and governance
(ESG) topics; a discussion regarding
unpaid arbitration awards;
subcommittee reports; and a nonpublic
administrative work session during
lunch.
Dated: November 9, 2018.
Brent J. Fields,
Secretary.
CFR 200.30–3(a)(12).
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84568; File No. SR–ISE–
2018–92]
Self-Regulatory Organizations; Nasdaq
ISE, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend General 8 of
the Exchange’s Rules
November 9, 2018.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on October
29, 2018, Nasdaq ISE, LLC (‘‘ISE’’ or
‘‘Exchange’’) filed with the Securities
VerDate Sep<11>2014
17:19 Nov 15, 2018
2 17
Jkt 247001
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00073
Fmt 4703
Sfmt 4703
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
General 8 of the Exchange’s Rules, as
described below.
The text of the proposed rule change
is available on the Exchange’s website at
https://ise.cchwallstreet.com/, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
[FR Doc. 2018–25019 Filed 11–15–18; 8:45 am]
1 15
14 17
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
The Exchange proposes to amend
General 8 of its Rules, which govern the
provision by the Exchange of colocation,
connectivity, and direct connectivity
services and related products, and
which set forth the fees that the
Exchange charges for those products
and services, to: (1) Clarify that all of the
products and services set forth in
General 8 are shared among the Nasdaq
Inc. affiliated exchanges—The Nasdaq
Stock Market LLC, Nasdaq BX, Inc.,
Nasdaq PHLX LLC, Nasdaq ISE, LLC,
Nasdaq MRX, LLC, and Nasdaq GEMX,
LLC (collectively, the ‘‘Nasdaq, Inc.
Exchanges’’)—meaning that a firm need
only purchase these products and
services once to be able to use them to
connect to all of the Nasdaq, Inc.
Exchanges to which the firm is
otherwise entitled to connect, and to
receive the third party services and
market data feeds that it is otherwise
entitled to receive; and (2) make other
E:\FR\FM\16NON1.SGM
16NON1
]]>Agencies
[Federal Register Volume 83, Number 222 (Friday, November 16, 2018)]
[Notices]
[Pages 57783-57786]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-24984]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84566; File No. SR-NYSE-2018-55]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the Listed Company Manual To Clarify the Application of the
Initial Listing Requirements to Common Equity Securities Issued in
Exchange for a Listed Equity Investment Tracking Stock
November 9, 2018.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on November 2, 2018, New York Stock Exchange LLC (``NYSE'' or the
``Exchange'') filed with
[[Page 57784]]
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I, II, and III below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Listed Company Manual (the
``Manual'') to clarify the application of the initial listing
requirements to common equity securities issued in exchange for a
listed Equity Investment Tracking Stock. The proposed rule change is
available on the Exchange's website at www.nyse.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
Section 102.07 of the Manual sets forth initial listing
requirements applicable to the listing of Equity Investment Tracking
Stocks. An Equity Investment Tracking Stock is defined as a class of
common equity securities that tracks on an unleveraged basis the
performance of an investment by the issuer in the common equity
securities of a single other company listed on the Exchange. An Equity
Investment Tracking Stock may track multiple classes of common equity
securities of a single issuer, so long as all of those classes have
identical economic rights and at least one of those classes is listed
on the Exchange.\4\
---------------------------------------------------------------------------
\4\ In order for an Equity Investment Tracking Stock to qualify
for initial listing, it must meet the requirements of Sections
102.01A and 102.01B of the Manual and the issuer of the Equity
Investment Tracking Stock must meet the Global Market Capitalization
Test set forth in Section 102.01C. The Exchange will not list an
Equity Investment Tracking Stock if, at the time of the proposed
listing, the issuer of the equity tracked by the Equity Investment
Tracking Stock has been deemed below compliance with the Exchange's
listing standards. The issuer of the Equity Investment Tracking
Stock must own (directly or indirectly) at least 50% of both the
economic interest and voting power of all of the outstanding classes
of common equity securities of the issuer whose equity is tracked by
the Equity Investment Tracking Stock.
---------------------------------------------------------------------------
The issuer of an Equity Investment Tracking Stock may seek (by a
shareholder vote, exchange offer or other legally permissible means) to
exchange outstanding shares of the Equity Investment Tracking Stock for
newly issued shares of a non-tracking stock class of common equity
securities pursuant to a specified exchange ratio. The common stock
issued in this exchange may be of an already listed class or it may
consist of shares of a class that is not currently listed on the
Exchange. However, the initial listing standards for common stock set
forth in Section 102.01 of the Manual do not currently specify the
listing standards applicable to a newly listed class of common stock
issued in exchange for an Equity Investment Tracking Stock. Therefore,
the Exchange proposes to amend Section 102.01 to clarify how the new
class of common stock will be listed in such circumstances.
In light of the fact that there is a predecessor security listed on
the NYSE, the Exchange believes that the listing of a common stock in
exchange for shares of a listed Equity Investment Tracking Stock is
more similar to a listing upon transfer from another exchange than it
is to an initial public offering. Specifically, such an exchange is
comparable to a transfer in that in both cases the Exchange is able to
rely on the existence of both historical trading information and a
liquid public trading market in making its listing determination. As
such the Exchange proposes to apply to such listings the initial
listing standards applicable to transfers. The Exchange notes that the
initial listing standards for transfers and quotations are at least as
high as those for IPOs and are more stringent in certain respects.
The Exchange proposes to amend Section 102.01A of the Manual to
specify that such common equity securities listed upon consummation of
an exchange for a listed Equity Investment Tracking Stock will be
subject to the distribution requirements set forth in that rule for
transfer and quotation listings. Section 102.01A provides that a
company listing in connection with a transfer or quotation listing must
have at least 1.1 million publicly held shares \5\ and meet one of the
following additional distribution requirements:
---------------------------------------------------------------------------
\5\ Shares held by directors, officers, or their immediate
families and other concentrated holding of 10 percent or more are
excluded in calculating the number of publicly-held shares wherever
that term is used throughout this proposal.
---------------------------------------------------------------------------
400 shareholders of round lots (i.e., at least 100
shares); or
2,200 total stockholders together with an average monthly
trading volume of at least 100,000 shares over the most recent six
months; or
500 total shareholders together with an average monthly
trading volume of at least 1,000,000 shares over the most recent 12
months.
Section 102.01B of the Manual requires companies listing upon
transfer from another exchange to demonstrate that they have $100
million in market value of publicly held shares and a closing share
price of $4.00 per share.\6\ In applying these requirements to the
listing of a new class of common stock in exchange for an Equity
Investment Tracking Stock, the Exchange proposes to permit issuers to
demonstrate their compliance by reference to the trading price and
publicly-held shares outstanding of the Equity Investment Tracking
Stock immediately prior to the consummation of the exchange, basing
those calculations on the exchange ratio between the two securities.\7\
The Exchange believes this approach is justified, as the market price
for the Equity Investment Tracking Stocking immediately prior to the
consummation of the exchange will reflect the market's anticipation of
the value of the common stock into which it will be exchanged.
---------------------------------------------------------------------------
\6\ Companies listing in connection with an IPO are required to
have $40 million in market value of publicly held shares.
\7\ In making listing qualification determinations, the Exchange
will rely generally on information with respect to a company's
shares outstanding, publicly-held shares and the exchange ratio as
most recently disclosed in an SEC filing, but reserves the right to
adjust those numbers if there have been significant changes in those
numbers since the most recent SEC disclosure.
---------------------------------------------------------------------------
Any company listing its primary class of common stock on the
Exchange must meet one of the two financial tests in Section 102.01C of
the Manual, the Earnings Test or the Global Market Capitalization Test.
As the Earnings Test is based solely on the issuer's historical
financial statements, there are no issues specific to issuers engaged
in these sorts of exchanges of Equity Investment Tracking Stocks for
common stock. However, the Global Market Capitalization Test requires
the issuer to demonstrate that it has $200 million in global market
capitalization. In meeting this test, the Exchange proposes to permit
issuers to demonstrate their
[[Page 57785]]
compliance by reference to the trading price and shares outstanding of
the Equity Investment Tracking Stock prior to the consummation of the
exchange, basing those calculations on the exchange ratio between the
two securities.\8\ The Exchange believes this approach is justified for
the same reasons set forth above with respect to the stock price and
publicly-held shares requirements.
---------------------------------------------------------------------------
\8\ Section 102.01C provides, that, in considering the listing
under the Global Market Capitalization Test of current publicly-
traded companies, the Exchange will require such companies to meet
the minimum $200 million global market capitalization requirement
and maintain a closing price of at least $4 per share in each case
for a period of at least 90 consecutive trading days prior to
receipt of clearance to make application to list on the Exchange and
will also consider whether the company's business prospects and
operating results indicate that the company's market capitalization
value is likely to be sustained or increase over time. The proposed
rule text clarifies that these requirements will be applicable to
the listing of a common stock issued in exchange for an Equity
Investment Tracking Stock.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Exchange Act,\9\ in general, and furthers the
objectives of Section 6(b)(5) of the Exchange Act,\10\ in particular in
that it is designed to promote just and equitable principles of trade,
to foster cooperation and coordination with persons engaged in
regulating, clearing, settling, processing information with respect to,
and facilitating transactions in securities, 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 and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers. The proposal to apply the same
initial listing standards to the listing of a new common stock issued
in exchange for an Equity Investment Tracking Stock as are applied to
transfers and quotation listings is designed to protect investors and
the public interest because the applicable standards are the most
stringent standards applied to the listing of common equities on the
Exchange. The proposal to use the trading price and shares outstanding
of the Equity Investment Tracking Stock immediately prior to the
exchange, as adjusted by the exchange ratio, in conducting its initial
listing analysis will provide the Exchange with relevant information
about the characteristics of the trading market for the issuer's
securities which will be predictive of the market for the common stock
into which the Equity Investment Tracking Stock will be exchanged. As
such, this information will be helpful to the Exchange in making its
initial listing determination.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The sole purpose of the
proposal is to clarify the application of the initial listing
requirements to common equity securities issued in exchange for a
listed Equity Investment Tracking Stock. As such, the Exchange does not
believe the proposal imposes any burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \13\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NYSE-2018-55 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2018-55. 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-2018-55, and should be submitted on
or before December 7, 2018.
[[Page 57786]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------
\14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-24984 Filed 11-15-18; 8:45 am]
BILLING CODE 8011-01-P
