Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 5515 Which Governs the Listing of Warrants on the Nasdaq Capital Market To Replace the Current Requirement That a Warrant Have 400 Round-Lot Holders With a Revised Requirement of 100 Holders That Are Both Public Holders and Round-Lot Holders, 69444-69446 [2019-27212]
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69444
Federal Register / Vol. 84, No. 243 / Wednesday, December 18, 2019 / Notices
among national securities exchanges.
Accordingly, the Exchange does not
believe its proposed fee change imposes
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 82 and paragraph (f) of Rule
19b–4 83 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:
khammond on DSKJM1Z7X2PROD with NOTICES
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–2019–111 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–2019–111. 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–CBOE–2019–111, and
should be submitted on or before
January 8,2020.
5, 2019, The Nasdaq Stock Market LLC
(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘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.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.84
J. Matthew DeLesDernier,
Assistant Secretary.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2019–27194 Filed 12–17–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87726; File No. SR–
NASDAQ–2019–092]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Amend
Exchange Rule 5515 Which Governs
the Listing of Warrants on the Nasdaq
Capital Market To Replace the Current
Requirement That a Warrant Have 400
Round-Lot Holders With a Revised
Requirement of 100 Holders That Are
Both Public Holders and Round-Lot
Holders
December 12, 2019.
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 December
84 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
82 15
U.S.C. 78s(b)(3)(A).
83 17 CFR 240.19b–4(f).
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Exchange Rule 5515 which governs the
listing of warrants on the Nasdaq
Capital Market. Specifically, Nasdaq
proposes to replace the current
requirement that a warrant have 400
Round-Lot Holders with a revised
requirement of 100 Holders that are both
Public Holders and Round-Lot Holders,
which is substantially similar to a longstanding requirement for listing
warrants on the NYSE American
Exchange.
The text of the proposed rule change
is available on the Exchange’s website at
https://nasdaq.cchwallstreet.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
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
Nasdaq Exchange Rule 5515 governs
the initial listing of warrants on the
Nasdaq Capital Market. Among the
requirements for listing warrants on the
Nasdaq Capital Market is that each
warrant to be listed must have 400
Round-Lot Holders.3 The corresponding
3 Specifically, Rule 5515(a) currently provides
that for initial listing on the Nasdaq Capital Market,
‘‘rights, warrants and put warrants (that is,
instruments that grant the holder the right to sell
to the issuing company a specified number of
E:\FR\FM\18DEN1.SGM
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Federal Register / Vol. 84, No. 243 / Wednesday, December 18, 2019 / Notices
khammond on DSKJM1Z7X2PROD with NOTICES
rule of the NYSE American Market is
Section 105 of the NYSE American
Company Guide, which requires that
each warrant to be listed must have 100
public warrantholders.
Prior to 2010, Nasdaq did not have a
holder requirement for listing warrants
on the Nasdaq Capital Market. In 2010,
Nasdaq adopted a round lot holder
requirement for the initial listing of
warrants on the Nasdaq Capital Market
to help ensure that warrants listed on
the Nasdaq Capital Market had adequate
distribution and a liquid trading
market.4 At the time, Nasdaq
determined to adopt the same 400 round
lot holder requirement as applied to list
warrants on the Nasdaq Global Market.
In most instances, the requirements
for the Nasdaq Capital Market are lower
than those of the Nasdaq Global Market.
In addition, Nasdaq has positioned the
Nasdaq Capital Market tier to compete
for companies that otherwise may list
on the NYSE American exchange.
Accordingly, Nasdaq has determined to
modify its minimum holder requirement
to list warrants on the Nasdaq Capital
Market so that it is lower than the
requirement for the Nasdaq Global
Market and substantially similar to the
requirement for NYSE American.5
Specifically, Nasdaq proposes to adopt
the standard of 100 Holders that are
both Public Holders 6 and Round-Lot
shares of the Company’s common stock, at a
specified price until a specified period of time)
must meet the following requirements: (1) At least
400,000 issued; (2) The underlying security must be
listed on Nasdaq or be a Covered Security; (3) At
least three registered and active Market Makers; and
(4) In the case of warrants, at least 400 Round Lot
Holders (except that this requirement will not apply
to the listing of rights or warrants in connection
with the initial firm commitment underwritten
public offering of such warrants).’’
4 Securities Exchange Act Release No. 61594
(February 25, 2010), 75 FR 9982 (March 4, 2010)
(SR–NASDAQ–2010–024).
5 In considering this change, Nasdaq compared
the trading quality of warrants listed on Nasdaq
with that of warrants listed on NYSE American. The
study reviewed trading during 2019 for warrants
listed as of January 1, 2019, and included factors
such as average daily volume executed, average
quoted and effective spreads, and volatility. While
it is difficult to draw conclusions given the small
universe of data (only six warrants were listed on
NYSE American as of January 1, 2019, and warrants
on both markets did not trade on a large number
of days) and other differences between the
exchanges in market structure and listing
requirements, based on this review, in Nasdaq’s
opinion, there was no evidence indicating that
trading quality in warrants listed on NYSE
American under its current listing standard was
worse than those of warrants listed on Nasdaq
under its standard. Additionally, Nasdaq is
unaware that NYSE American has taken adverse
action against a warrant or an issuer of such warrant
listed under Section 105 of the NYSE American
Company Guide based on the quantitative listing
standards in question.
6 Nasdaq Rule 5005(a)(36) defines Public Holders
as ‘‘holders of a security that includes both
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16:40 Dec 17, 2019
Jkt 250001
Holders,7 which is substantially similar
to (but could be more stringent than) the
NYSE American 100 public
warrantholders requirement.8 Nasdaq is
proposing no changes to Nasdaq’s other
initial listing requirements for warrants
on the Nasdaq Capital Market, nor is
Nasdaq proposing changes to Nasdaq’s
continued listing standards for
warrants.9
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,10 in general, and furthers the
objectives of Section 6(b)(5) of the Act,11
in particular, in that it is designed 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.
Specifically, Nasdaq believes this
proposed rule change removes an
impediment to a free and open system
by enabling Nasdaq to compete with
NYSE American for the listing of a
broader scope of warrants and
simultaneously by offering issuers of
such warrants an additional listing
option. Nasdaq further believes that it
does so without impacting the
protection of investors or the public
interest because, in Nasdaq’s opinion,
the quantitative standards at issue have
been applied by NYSE American for
many years without harm.
beneficial holders and holders of record, but does
not include any holder who is, either directly or
indirectly, an Executive Officer, director, or the
beneficial holder of more than 10% of the total
shares outstanding.’’
7 Nasdaq Rule 5005(a)(40) defines a Round Lot
Holder as ‘‘a holder of a Normal Unit of Trading of
Unrestricted Securities. The number of beneficial
holders will be considered in addition to holders
of record.’’
8 The proposed Nasdaq requirement could be
more stringent than the NYSE American
requirement because the Nasdaq rule would require
that the holders be both Public Holders and Round
Lot Holders, and would exclude holders of
restricted securities, whereas the NYSE American
rule only requires that they be public holders.
9 Nasdaq notes that Section 105 of the NYSE
American Company Guide also provides
requirements around warrant exercise provisions
when a company has the right to reduce the
exercise price of its warrants. Similar to these NYSE
American requirements, Nasdaq believes that its
rules also require a company with such a right to
comply with any applicable tender offer regulatory
provisions under the federal securities laws and to
publicly disclose material information such as the
reduction of the warrant exercise price. Nasdaq
intends to file a subsequent rule filing to provide
transparency to this.
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00093
Fmt 4703
Sfmt 4703
69445
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 not
necessary or appropriate in furtherance
of the purposes of the Act. To the
contrary, the Exchange believes the
proposed rule change is pro-competitive
in that it permits competition for more
issuers of warrants. Today, there is no
such competition because such issuers
are not eligible for listing on Nasdaq.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing 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 for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(iii) of the Act 12 and Rule
19b–4(f)(6) thereunder.13
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 14 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 15
permits the Commission to designate a
shorter time if such action is consistent
with the protection of investors and the
public interest. The Exchange has asked
the Commission to waive the 30-day
operative delay so that the Exchange
may allow the issuer of a warrant
currently affected by the existing rule
the opportunity to list on Nasdaq. The
Exchange notes that its proposal is
based on an existing NYSE American
rule and, in its view, the proposal does
not raise new issues that are
inconsistent with the protection of
investors and the public interest.
The Commission believes that waiver
of the operative delay is appropriate
because the proposed warrant holder
12 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change at least five business
days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
14 17 CFR 240.19b–4(f)(6).
15 17 CFR 240.19b–4(f)(6)(iii).
13 17
E:\FR\FM\18DEN1.SGM
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69446
Federal Register / Vol. 84, No. 243 / Wednesday, December 18, 2019 / Notices
requirement is substantially similar to
the rules of another national securities
exchange.16 For these reasons, the
Commission believes that waiver of the
30-day operative delay is consistent
with the protection of investors and the
public interest. Therefore, the
Commission hereby waives the
operative delay and designates the
proposal as operative upon filing.17
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 shall institute proceedings
to determine whether the proposed rule
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:
khammond on DSKJM1Z7X2PROD with NOTICES
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–
NASDAQ–2019–092 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–NASDAQ–2019–092. 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
16 See
also supra note 9.
17 For purposes only of waiving the 30-day
operative delay, the Commission also has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
VerDate Sep<11>2014
16:40 Dec 17, 2019
Jkt 250001
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–NASDAQ–2019–092 and
should be submitted on or before
January 8, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–27212 Filed 12–17–19; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration # 16220 and # 16221;
PENNSYLVANIA Disaster Number PA–
00103]
Administrative Declaration of a
Disaster for the Commonwealth of
Pennsylvania
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
This is a notice of an
Administrative declaration of a disaster
for the Commonwealth of Pennsylvania
dated 12/11/2019.
Incident: Severe Storms and High
Winds.
Incident Period: 10/31/2019 through
11/01/2019.
DATES: Issued on 12/11/2019.
Physical Loan Application Deadline
Date: 02/10/2020.
Economic Injury (EIDL) Loan
Application Deadline Date: 09/11/2020.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
SUMMARY:
18 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00094
Fmt 4703
Sfmt 4703
U.S. Small Business Administration,
409 3rd Street SW, Suite 6050,
Washington, DC 20416, (202) 205–6734.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
Administrator’s disaster declaration,
applications for disaster loans may be
filed at the address listed above or other
locally announced locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties: Erie.
Contiguous Counties:
Pennsylvania: Crawford, Warren.
New York: Chautauqua.
Ohio: Ashtabula.
The Interest Rates are:
Percent
For Physical Damage:
Homeowners with Credit Available Elsewhere ......................
Homeowners without Credit
Available Elsewhere ..............
Businesses with Credit Available Elsewhere ......................
Businesses
without
Credit
Available Elsewhere ..............
Non-Profit Organizations with
Credit Available Elsewhere ...
Non-Profit Organizations without Credit Available Elsewhere .....................................
For Economic Injury:
Businesses & Small Agricultural
Cooperatives without Credit
Available Elsewhere ..............
Non-Profit Organizations without Credit Available Elsewhere .....................................
3.000
1.500
7.750
3.875
2.750
2.750
3.875
2.750
The number assigned to this disaster
for physical damage is 16220 B and for
economic injury is 16221 0.
The States which received an EIDL
Declaration # are Pennsylvania, New
York, Ohio.
(Catalog of Federal Domestic Assistance
Number 59008)
Christopher Pilkerton,
Acting Administrator.
[FR Doc. 2019–27241 Filed 12–17–19; 8:45 am]
BILLING CODE 8026–03–P
DEPARTMENT OF STATE
[Public Notice 10965]
Department of State Performance
Review Board Members
In accordance with section 4314(c)(4)
of 5 United States Code, the Department
of State has appointed the following
individuals to the Department of State
Performance Review Board for Senior
Executive Service members:
E:\FR\FM\18DEN1.SGM
18DEN1
]]>Agencies
[Federal Register Volume 84, Number 243 (Wednesday, December 18, 2019)]
[Notices]
[Pages 69444-69446]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27212]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87726; File No. SR-NASDAQ-2019-092]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Amend Exchange Rule 5515 Which Governs the Listing of Warrants on
the Nasdaq Capital Market To Replace the Current Requirement That a
Warrant Have 400 Round-Lot Holders With a Revised Requirement of 100
Holders That Are Both Public Holders and Round-Lot Holders
December 12, 2019.
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 December 5, 2019, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Exchange Rule 5515 which governs the
listing of warrants on the Nasdaq Capital Market. Specifically, Nasdaq
proposes to replace the current requirement that a warrant have 400
Round-Lot Holders with a revised requirement of 100 Holders that are
both Public Holders and Round-Lot Holders, which is substantially
similar to a long-standing requirement for listing warrants on the NYSE
American Exchange.
The text of the proposed rule change is available on the Exchange's
website at https://nasdaq.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
Nasdaq Exchange Rule 5515 governs the initial listing of warrants
on the Nasdaq Capital Market. Among the requirements for listing
warrants on the Nasdaq Capital Market is that each warrant to be listed
must have 400 Round-Lot Holders.\3\ The corresponding
[[Page 69445]]
rule of the NYSE American Market is Section 105 of the NYSE American
Company Guide, which requires that each warrant to be listed must have
100 public warrantholders.
---------------------------------------------------------------------------
\3\ Specifically, Rule 5515(a) currently provides that for
initial listing on the Nasdaq Capital Market, ``rights, warrants and
put warrants (that is, instruments that grant the holder the right
to sell to the issuing company a specified number of shares of the
Company's common stock, at a specified price until a specified
period of time) must meet the following requirements: (1) At least
400,000 issued; (2) The underlying security must be listed on Nasdaq
or be a Covered Security; (3) At least three registered and active
Market Makers; and (4) In the case of warrants, at least 400 Round
Lot Holders (except that this requirement will not apply to the
listing of rights or warrants in connection with the initial firm
commitment underwritten public offering of such warrants).''
---------------------------------------------------------------------------
Prior to 2010, Nasdaq did not have a holder requirement for listing
warrants on the Nasdaq Capital Market. In 2010, Nasdaq adopted a round
lot holder requirement for the initial listing of warrants on the
Nasdaq Capital Market to help ensure that warrants listed on the Nasdaq
Capital Market had adequate distribution and a liquid trading
market.\4\ At the time, Nasdaq determined to adopt the same 400 round
lot holder requirement as applied to list warrants on the Nasdaq Global
Market.
---------------------------------------------------------------------------
\4\ Securities Exchange Act Release No. 61594 (February 25,
2010), 75 FR 9982 (March 4, 2010) (SR-NASDAQ-2010-024).
---------------------------------------------------------------------------
In most instances, the requirements for the Nasdaq Capital Market
are lower than those of the Nasdaq Global Market. In addition, Nasdaq
has positioned the Nasdaq Capital Market tier to compete for companies
that otherwise may list on the NYSE American exchange. Accordingly,
Nasdaq has determined to modify its minimum holder requirement to list
warrants on the Nasdaq Capital Market so that it is lower than the
requirement for the Nasdaq Global Market and substantially similar to
the requirement for NYSE American.\5\ Specifically, Nasdaq proposes to
adopt the standard of 100 Holders that are both Public Holders \6\ and
Round-Lot Holders,\7\ which is substantially similar to (but could be
more stringent than) the NYSE American 100 public warrantholders
requirement.\8\ Nasdaq is proposing no changes to Nasdaq's other
initial listing requirements for warrants on the Nasdaq Capital Market,
nor is Nasdaq proposing changes to Nasdaq's continued listing standards
for warrants.\9\
---------------------------------------------------------------------------
\5\ In considering this change, Nasdaq compared the trading
quality of warrants listed on Nasdaq with that of warrants listed on
NYSE American. The study reviewed trading during 2019 for warrants
listed as of January 1, 2019, and included factors such as average
daily volume executed, average quoted and effective spreads, and
volatility. While it is difficult to draw conclusions given the
small universe of data (only six warrants were listed on NYSE
American as of January 1, 2019, and warrants on both markets did not
trade on a large number of days) and other differences between the
exchanges in market structure and listing requirements, based on
this review, in Nasdaq's opinion, there was no evidence indicating
that trading quality in warrants listed on NYSE American under its
current listing standard was worse than those of warrants listed on
Nasdaq under its standard. Additionally, Nasdaq is unaware that NYSE
American has taken adverse action against a warrant or an issuer of
such warrant listed under Section 105 of the NYSE American Company
Guide based on the quantitative listing standards in question.
\6\ Nasdaq Rule 5005(a)(36) defines Public Holders as ``holders
of a security that includes both beneficial holders and holders of
record, but does not include any holder who is, either directly or
indirectly, an Executive Officer, director, or the beneficial holder
of more than 10% of the total shares outstanding.''
\7\ Nasdaq Rule 5005(a)(40) defines a Round Lot Holder as ``a
holder of a Normal Unit of Trading of Unrestricted Securities. The
number of beneficial holders will be considered in addition to
holders of record.''
\8\ The proposed Nasdaq requirement could be more stringent than
the NYSE American requirement because the Nasdaq rule would require
that the holders be both Public Holders and Round Lot Holders, and
would exclude holders of restricted securities, whereas the NYSE
American rule only requires that they be public holders.
\9\ Nasdaq notes that Section 105 of the NYSE American Company
Guide also provides requirements around warrant exercise provisions
when a company has the right to reduce the exercise price of its
warrants. Similar to these NYSE American requirements, Nasdaq
believes that its rules also require a company with such a right to
comply with any applicable tender offer regulatory provisions under
the federal securities laws and to publicly disclose material
information such as the reduction of the warrant exercise price.
Nasdaq intends to file a subsequent rule filing to provide
transparency to this.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\10\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\11\ in particular, in that it is designed 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. Specifically, Nasdaq believes this proposed rule change
removes an impediment to a free and open system by enabling Nasdaq to
compete with NYSE American for the listing of a broader scope of
warrants and simultaneously by offering issuers of such warrants an
additional listing option. Nasdaq further believes that it does so
without impacting the protection of investors or the public interest
because, in Nasdaq's opinion, the quantitative standards at issue have
been applied by NYSE American for many years without harm.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. To the contrary, the Exchange
believes the proposed rule change is pro-competitive in that it permits
competition for more issuers of warrants. Today, there is no such
competition because such issuers are not eligible for listing on
Nasdaq.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing 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 for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \12\ and Rule
19b-4(f)(6) thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A)(iii).
\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \14\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \15\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay so that
the Exchange may allow the issuer of a warrant currently affected by
the existing rule the opportunity to list on Nasdaq. The Exchange notes
that its proposal is based on an existing NYSE American rule and, in
its view, the proposal does not raise new issues that are inconsistent
with the protection of investors and the public interest.
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\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiver of the operative delay is
appropriate because the proposed warrant holder
[[Page 69446]]
requirement is substantially similar to the rules of another national
securities exchange.\16\ For these reasons, the Commission believes
that waiver of the 30-day operative delay is consistent with the
protection of investors and the public interest. Therefore, the
Commission hereby waives the operative delay and designates the
proposal as operative upon filing.\17\
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\16\ See also supra note 9.
\17\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule 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 [email protected]. Please include
File Number SR-NASDAQ-2019-092 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-NASDAQ-2019-092. 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-NASDAQ-2019-092 and should be submitted
on or before January 8, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
\18\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-27212 Filed 12-17-19; 8:45 am]
BILLING CODE 8011-01-P
