Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Listing Rule IM-5900-4 To Waive the All-Inclusive Annual Listing Fee for Any Company Not Listed on a National Securities Exchange That Is Listing Upon Closing of Its Acquisition of a Special Purpose Acquisition Company Listed on Another National Securities Exchange, 45720-45722 [2020-16372]
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Federal Register / Vol. 85, No. 146 / Wednesday, July 29, 2020 / Notices
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–
NYSECHX–2020–22 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–NYSECHX–2020–22. 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–NYSECHX–2020–22 and
should be submitted on or before
August 19, 2020.
VerDate Sep<11>2014
17:23 Jul 28, 2020
Jkt 250001
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–16376 Filed 7–28–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–89386; File No. SR–
NASDAQ–2020–039]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
Listing Rule IM–5900–4 To Waive the
All-Inclusive Annual Listing Fee for
Any Company Not Listed on a National
Securities Exchange That Is Listing
Upon Closing of Its Acquisition of a
Special Purpose Acquisition Company
Listed on Another National Securities
Exchange
July 23, 2020.
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 July 9,
2020, 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Listing Rule IM–5900–4 to waive the
All-Inclusive Annual Listing Fee for any
company not listed on a national
securities exchange that is listing upon
closing of its acquisition of a special
purpose acquisition company listed on
another national securities exchange.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/nasdaq/rules, at the principal
office of the Exchange, and at the
Commission’s Public Reference Room.
PO 00000
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
Frm 00147
Fmt 4703
Sfmt 4703
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 proposes to amend Listing
Rule IM–5900–4 to waive the AllInclusive Annual Listing Fee for any
company not listed on a national
securities exchange that is listing upon
closing of its acquisition of a special
purpose acquisition company
(‘‘Acquisition Company’’) listed on
another national securities exchange.
When an Acquisition Company
consummates its business combination,
it may choose a new listing venue for its
post-business combination existence as
an operating company. In most such
cases, the Acquisition Company is the
legal acquirer in the business
combination transaction and thus the
company transferring its listing to
Nasdaq is the same entity as was listed
on the other national securities
exchange prior to the acquisition (i.e.,
the Acquisition Company). When an
Acquisition Company that is the legal
acquirer transfers its listing to Nasdaq
following the business combination, the
first All-Inclusive Annual Listing Fee is
waived. Specifically, Listing Rule IM–
5900–4 provides that ‘‘Nasdaq has
determined to waive for the year of
transfer the All-Inclusive Annual Listing
Fee applicable to the year such transfer
is made in the case of securities that
. . . are listed on a national securities
exchange but not listed on Nasdaq, if
the issuer of such securities transfers
their listing exclusively to Nasdaq.’’
However, in fulfilling the
requirements for an Acquisition
Company to complete an acquisition
under applicable exchange rules,
occasionally the Acquisition Company
is not the legal acquirer in the business
combination and, instead, the business
combination is structured so that the
Acquisition Company is acquired by the
operating company. Under the current
E:\FR\FM\29JYN1.SGM
29JYN1
Federal Register / Vol. 85, No. 146 / Wednesday, July 29, 2020 / Notices
Nasdaq rules, a company listing in
connection with its acquisition of an
Acquisition Company listed on another
national securities exchange would not
benefit from a similar waiver of listing
fees.
To address this disparity, Nasdaq
proposes to amend the fee waiver
provisions of Listing Rule IM–5900–4.
Specifically, the Exchange proposes to
extend to any company that is not listed
immediately prior to listing its class of
primary equity securities upon closing
of its acquisition of an Acquisition
Company listed on another national
securities exchange the benefits similar
to those provided by Listing Rule IM–
5900–4 that waives for companies
transferring their securities from another
exchange the requirement to pay the
All-Inclusive Annual Listing Fee with
respect to that class of primary equity
securities or any other securities
transferred in conjunction therewith for
the remainder of the calendar year in
which the transfer occurs. The decision
whether to structure a business
combination with the Acquisition
Company as the legal acquirer rather
than the other party does not result in
the listing of a substantively different
entity. Accordingly, the Exchange
believes there is no basis for charging
fees purely on the basis of the structure
of the business combination chosen by
the parties. The Exchange does not
expect there to be a significant number
of listings in which this proposed fee
waiver will be applicable.
Consequently, the proposed rule change
would not affect the Exchange’s
commitment of resources to its
regulatory oversight of the listing
process or its regulatory programs.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,3 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act,4 in particular, in that it
provides for the equitable allocation of
reasonable dues, fees and other charges
among members and issuers and other
persons using any facility, and is not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
As a preliminary matter, Nasdaq
competes for listings with other national
securities exchanges and companies can
easily choose to list on, or transfer to,
those alternative venues. As a result, the
fees Nasdaq can charge listed companies
are constrained by the fees charged by
its competitors and Nasdaq cannot
3 15
4 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
VerDate Sep<11>2014
17:23 Jul 28, 2020
Jkt 250001
charge prices in a manner that would be
unreasonable, inequitable, or unfairly
discriminatory.
The Exchange believes that the
proposed fee waivers are equitable as it
being implemented to avoid an
anomalous fee outcome arising from the
manner in which an Acquisition
Company business combination has
been structured.
The Exchange believes that the
proposal is not unfairly discriminatory,
because the proposed waivers are
intended to avoid the impact on a small
group of issuers of an anomalous fee
outcome arising from the manner in
which an Acquisition Company
business combination has been
structured. Nasdaq also notes that such
waiver is not intended to provide these
issuers with any benefit that would
place them in a more favorable position
than other newly-listed companies,
including specifically other previously
unlisted companies that list upon
completion of an acquisition of a
company listed on Nasdaq.5 An
Acquisition Company is a shell
company with no business operations.
Consequently, the parties to a business
combination between an Acquisition
Company and an operating company
have significant flexibility in how they
choose to structure the business
combination, including in determining
which entity will be the legal acquirer.
Accordingly, the Exchange is
proposing to amend its fee structure to
reflect the incidental nature of the
resulting Acquisition Company business
combination and to avoid treating
companies undergoing similar business
combinations disparately.
By contrast to an Acquisition
Company business combination, there
are typically more significant
limitations on the ability of the parties
to a merger between two operating
companies to make decisions about
which entity will be the acquirer,
including, for example, the desire to
maintain the acquirer’s SEC registration
and concerns about how to present the
combined entity to the market. As such,
it is much more likely that the listing fee
implications of how the transaction is
structured would be a major
consideration for the parties to an
Acquisition Company business
combination than would be the case in
a merger between two operating
companies. As the implications of the
proposed fee waivers for decisions
relating to the transaction structures
5 Listing Rule IM–5900–1 provides for certain
credits that benefit a non-Nasdaq company that lists
in connection with its acquisition of a Nasdaq listed
company.
PO 00000
Frm 00148
Fmt 4703
Sfmt 4703
45721
utilized by unlisted companies listing in
connection with the acquisition of an
Acquisition Company are typically
greater than for other companies listing
in conjunction with merger transactions,
the proposed waivers are not unfairly
discriminatory.
For the foregoing reasons, the
Exchange believes that the proposal is
consistent with the Act.
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.
The proposed waiver will be available
to all similarly situated issuers on the
same basis. The Exchange does not
believe that the proposed waivers will
have any meaningful effect on the
competition among issuers listed on the
Exchange.
The Exchange operates in a highly
competitive market in which issuers can
readily choose to list new securities on
other exchanges and transfer listings to
other exchanges if they deem fee levels
at those other venues to be more
favorable. Because competitors are free
to modify their own fees in response,
and because issuers may change their
listing venue, the Exchange does not
believe its proposed fee change can
impose any burden on intermarket
competition.
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
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act 6 and Rule 19b–
4(f)(2) 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 shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
6 15
7 17
E:\FR\FM\29JYN1.SGM
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
29JYN1
45722
Federal Register / Vol. 85, No. 146 / Wednesday, July 29, 2020 / Notices
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:
• 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–2020–039 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–2020–039. 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
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NASDAQ–2020–039 and should be
submitted on or before August 19, 2020.
17:23 Jul 28, 2020
[FR Doc. 2020–16372 Filed 7–28–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
VerDate Sep<11>2014
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
J. Matthew DeLesDernier,
Assistant Secretary.
Jkt 250001
[Release No. 34–89387; File No. SR–
NYSEARCA–2020–67]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Rule 7.37–E To
Add the Data Source for MEMX
July 23, 2020.
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 July 14,
2020, NYSE Arca, Inc. (‘‘NYSE Arca’’ 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
The Exchange proposes to amend
Rule 7.37–E to update the Exchange’s
source of data feeds from MEMX LLC
(‘‘MEMX’’) for purposes of order
handling, order execution, order
routing, and regulatory compliance. 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.
PO 00000
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
Frm 00149
Fmt 4703
Sfmt 4703
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to update and
amend the use of data feeds table in
Rule 7.37–E, which sets forth on a
market-by-market basis the specific
securities information processor (‘‘SIP’’)
and proprietary data feeds that the
Exchange utilizes for the handling,
execution, and routing of orders, and for
performing the regulatory compliance
checks related to each of those
functions. Specifically, the Exchange
proposes to amend the table in Rule
7.37–E(d) to specify that, with respect to
MEMX, the Exchange will receive the
SIP feed as its primary source of data for
order handling, order execution, order
routing, and regulatory compliance. The
Exchange will not have a secondary
source for data from MEMX.
The Exchange proposes that this
proposed rule change would be
operative on the day that MEMX
launches operations as an equities
exchange, which is currently expected
on September 4, 2020.4
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the Act,5
in general, and furthers the objectives of
Section 6(b)(5),6 in particular, because it
is 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
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
its proposal to amend the table in Rule
7.37–E(d) to update the data feed source
for MEMX will ensure that Rule 7.37–
E correctly identifies and publicly states
on a market-by-market basis all of the
specific securities information processor
and proprietary data feeds that the
Exchange utilizes for the handling,
execution, and routing of orders, and for
performing the regulatory compliance
checks for each of those functions. The
proposed rule change also removes
4 See https://memx.com/memx-timeline-updatelaunch-set-for-september-4th/.
5 15 U.S.C. 78f(b).
6 15 U.S.C. 78f(b)(5).
E:\FR\FM\29JYN1.SGM
29JYN1
]]>Agencies
[Federal Register Volume 85, Number 146 (Wednesday, July 29, 2020)]
[Notices]
[Pages 45720-45722]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16372]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-89386; File No. SR-NASDAQ-2020-039]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Listing Rule IM-5900-4 To Waive the All-Inclusive Annual Listing
Fee for Any Company Not Listed on a National Securities Exchange That
Is Listing Upon Closing of Its Acquisition of a Special Purpose
Acquisition Company Listed on Another National Securities Exchange
July 23, 2020.
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 July 9, 2020, 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 Listing Rule IM-5900-4 to waive the
All-Inclusive Annual Listing Fee for any company not listed on a
national securities exchange that is listing upon closing of its
acquisition of a special purpose acquisition company listed on another
national securities exchange.
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, 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 proposes to amend Listing Rule IM-5900-4 to waive the All-
Inclusive Annual Listing Fee for any company not listed on a national
securities exchange that is listing upon closing of its acquisition of
a special purpose acquisition company (``Acquisition Company'') listed
on another national securities exchange.
When an Acquisition Company consummates its business combination,
it may choose a new listing venue for its post-business combination
existence as an operating company. In most such cases, the Acquisition
Company is the legal acquirer in the business combination transaction
and thus the company transferring its listing to Nasdaq is the same
entity as was listed on the other national securities exchange prior to
the acquisition (i.e., the Acquisition Company). When an Acquisition
Company that is the legal acquirer transfers its listing to Nasdaq
following the business combination, the first All-Inclusive Annual
Listing Fee is waived. Specifically, Listing Rule IM-5900-4 provides
that ``Nasdaq has determined to waive for the year of transfer the All-
Inclusive Annual Listing Fee applicable to the year such transfer is
made in the case of securities that . . . are listed on a national
securities exchange but not listed on Nasdaq, if the issuer of such
securities transfers their listing exclusively to Nasdaq.''
However, in fulfilling the requirements for an Acquisition Company
to complete an acquisition under applicable exchange rules,
occasionally the Acquisition Company is not the legal acquirer in the
business combination and, instead, the business combination is
structured so that the Acquisition Company is acquired by the operating
company. Under the current
[[Page 45721]]
Nasdaq rules, a company listing in connection with its acquisition of
an Acquisition Company listed on another national securities exchange
would not benefit from a similar waiver of listing fees.
To address this disparity, Nasdaq proposes to amend the fee waiver
provisions of Listing Rule IM-5900-4. Specifically, the Exchange
proposes to extend to any company that is not listed immediately prior
to listing its class of primary equity securities upon closing of its
acquisition of an Acquisition Company listed on another national
securities exchange the benefits similar to those provided by Listing
Rule IM-5900-4 that waives for companies transferring their securities
from another exchange the requirement to pay the All-Inclusive Annual
Listing Fee with respect to that class of primary equity securities or
any other securities transferred in conjunction therewith for the
remainder of the calendar year in which the transfer occurs. The
decision whether to structure a business combination with the
Acquisition Company as the legal acquirer rather than the other party
does not result in the listing of a substantively different entity.
Accordingly, the Exchange believes there is no basis for charging fees
purely on the basis of the structure of the business combination chosen
by the parties. The Exchange does not expect there to be a significant
number of listings in which this proposed fee waiver will be
applicable. Consequently, the proposed rule change would not affect the
Exchange's commitment of resources to its regulatory oversight of the
listing process or its regulatory programs.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\3\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\4\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees and other charges
among members and issuers and other persons using any facility, and is
not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
---------------------------------------------------------------------------
\3\ 15 U.S.C. 78f(b).
\4\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
As a preliminary matter, Nasdaq competes for listings with other
national securities exchanges and companies can easily choose to list
on, or transfer to, those alternative venues. As a result, the fees
Nasdaq can charge listed companies are constrained by the fees charged
by its competitors and Nasdaq cannot charge prices in a manner that
would be unreasonable, inequitable, or unfairly discriminatory.
The Exchange believes that the proposed fee waivers are equitable
as it being implemented to avoid an anomalous fee outcome arising from
the manner in which an Acquisition Company business combination has
been structured.
The Exchange believes that the proposal is not unfairly
discriminatory, because the proposed waivers are intended to avoid the
impact on a small group of issuers of an anomalous fee outcome arising
from the manner in which an Acquisition Company business combination
has been structured. Nasdaq also notes that such waiver is not intended
to provide these issuers with any benefit that would place them in a
more favorable position than other newly-listed companies, including
specifically other previously unlisted companies that list upon
completion of an acquisition of a company listed on Nasdaq.\5\ An
Acquisition Company is a shell company with no business operations.
Consequently, the parties to a business combination between an
Acquisition Company and an operating company have significant
flexibility in how they choose to structure the business combination,
including in determining which entity will be the legal acquirer.
---------------------------------------------------------------------------
\5\ Listing Rule IM-5900-1 provides for certain credits that
benefit a non-Nasdaq company that lists in connection with its
acquisition of a Nasdaq listed company.
---------------------------------------------------------------------------
Accordingly, the Exchange is proposing to amend its fee structure
to reflect the incidental nature of the resulting Acquisition Company
business combination and to avoid treating companies undergoing similar
business combinations disparately.
By contrast to an Acquisition Company business combination, there
are typically more significant limitations on the ability of the
parties to a merger between two operating companies to make decisions
about which entity will be the acquirer, including, for example, the
desire to maintain the acquirer's SEC registration and concerns about
how to present the combined entity to the market. As such, it is much
more likely that the listing fee implications of how the transaction is
structured would be a major consideration for the parties to an
Acquisition Company business combination than would be the case in a
merger between two operating companies. As the implications of the
proposed fee waivers for decisions relating to the transaction
structures utilized by unlisted companies listing in connection with
the acquisition of an Acquisition Company are typically greater than
for other companies listing in conjunction with merger transactions,
the proposed waivers are not unfairly discriminatory.
For the foregoing reasons, the Exchange believes that the proposal
is consistent with the Act.
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.
The proposed waiver will be available to all similarly situated
issuers on the same basis. The Exchange does not believe that the
proposed waivers will have any meaningful effect on the competition
among issuers listed on the Exchange.
The Exchange operates in a highly competitive market in which
issuers can readily choose to list new securities on other exchanges
and transfer listings to other exchanges if they deem fee levels at
those other venues to be more favorable. Because competitors are free
to modify their own fees in response, and because issuers may change
their listing venue, the Exchange does not believe its proposed fee
change can impose any burden on intermarket competition.
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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \6\ and Rule 19b-4(f)(2) \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 shall institute proceedings to determine whether
the proposed rule should be approved or disapproved.
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\6\ 15 U.S.C. 78s(b)(3)(A)(ii).
\7\ 17 CFR 240.19b-4(f)(2).
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[[Page 45722]]
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-2020-039 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-2020-039. 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 submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NASDAQ-2020-039 and should be submitted on or before
August 19, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-16372 Filed 7-28-20; 8:45 am]
BILLING CODE 8011-01-P
