Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Waive the Entry Fee and 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 Nasdaq, 17227-17230 [2021-06669]

Download as PDF Federal Register / Vol. 86, No. 61 / Thursday, April 1, 2021 / Notices Applicant’s Address: legalnotices@ fsinvestments.com. SECURITIES AND EXCHANGE COMMISSION FS Global Credit Opportunities FundT2 [811–23243] [Release No. 34–91421; File No. SR– NASDAQ–2021–012] Summary: Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. The applicant has transferred its assets to FS Global Credit Opportunities Fund, and on December 14, 2020 made a final distribution to its shareholders based on net asset value. Expenses of $587,027 incurred in connection with the reorganization were paid by the acquiring fund. Filing Date: The application was filed on February 24, 2021. Applicant’s Address: legalnotices@ fsinvestments.com. Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Waive the Entry Fee and 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 Nasdaq Man FRM Alternative Multi-Strategy Fund LLC [811–10083] Summary: Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On July 30, 2019, November 1, 2019, and July 14, 2020, applicant made liquidating distributions to its shareholders based on net asset value. Expenses of approximately $162,000 incurred in connection with the liquidation were paid by the applicant. Applicant also has retained $151,195.40 for the purpose of paying outstanding liquidation expenses. Filing Dates: The application was filed on December 11, 2020 and amended on March 4, 2021. Applicant’s Address: Karen.Spiegel@ srz.com. Putnam High Yield Trust [811–02796] jbell on DSKJLSW7X2PROD with NOTICES Summary: Applicant seeks an order declaring that it has ceased to be an investment company. The applicant has transferred its assets to Putnam High Yield Fund, and on May 8, 2017 made a final distribution to its shareholders based on net asset value. Expenses of $309,330 incurred in connection with the reorganization were paid by the applicant and the acquiring fund. Filing Date: The application was filed on February 2, 2021. Applicant’s Address: Bryan.Chegwidden@ropesgray.com. For the Commission, by the Division of Investment Management, pursuant to delegated authority. J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–06654 Filed 3–31–21; 8:45 am] 19:02 Mar 31, 2021 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 March 16, 2021, 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, 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 waive the Entry Fee and 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 Nasdaq. 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. 1 15 2 17 BILLING CODE 8011–01–P VerDate Sep<11>2014 March 26, 2021. Jkt 253001 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00116 Fmt 4703 Sfmt 4703 17227 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 Rules 5910 and 5920 to waive the Entry Fees and 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 Nasdaq. When an Acquisition Company consummates its business combination, it is typically the legal acquirer in the transaction and, provided it meets the continued listing standards applied in connection with a business combination by a listed Acquisition Company, it can remain listed on the Exchange.3 Following the business combination, the company is not required to pay any additional listing fees for any shares issued in connection with its business combination, so there are no listing fees payable in connection with a business combination between a Nasdaq-listed Acquisition Company and a company which is not listed on a national securities exchange where the Nasdaqlisted Acquisition Company is the acquirer in the transaction. Similarly, Nasdaq does not have any provision for charging prorated annual fees with respect to shares of currently listed companies issued during the course of a calendar year (such shares are reflected in the full year annual fee bill for the next subsequent calendar year). As such, there are no fees imposed upon the consummation of a business combination by a Nasdaq-listed Acquisition Company in which it is the surviving legal entity. By contrast, if a company that is not listed on Nasdaq or another national securities exchange merges with a Nasdaq-listed Acquisition Company and the non-listed company is the acquirer in the transaction, the nonlisted company is treated as a new listing and must pay the Entry Fees and the prorated All-Inclusive Annual Listing Fee, subject to certain credits.4 Nasdaq does not believe that this disparate treatment of two substantially identical transactions is appropriate. 3 Among the continued listing requirements applicable to an Acquisition Company under IM– 5101–2 is the requirement that the combined company must meet all initial listing requirements following a business combination. 4 Listing Rule IM–5900–1(b) provides for certain credits that benefit a non-Nasdaq company that lists in connection with its acquisition of a Nasdaq listed company. E:\FR\FM\01APN1.SGM 01APN1 17228 Federal Register / Vol. 86, No. 61 / Thursday, April 1, 2021 / Notices jbell on DSKJLSW7X2PROD with NOTICES 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. To address the existing disparity in fees Nasdaq proposes to modify the Rule 5900 Series to provide a waiver to the entry and annual fees otherwise owed by any company not listed on a national securities exchange that is listing upon closing of its acquisition of an Acquisition Company listed on Nasdaq. Specifically, Listing Rule IM–5900–4 currently includes a waiver of the prorated All-Inclusive Annual Listing Fee for any issuer that is not listed on a national securities exchange immediately prior to its initial listing on Nasdaq but is listing its Primary Equity Securities upon closing of its acquisition of a company listed on another national securities exchange pursuant to special rules for acquisition companies whose business plan is to complete one or more acquisitions. Nasdaq proposes to extend this waiver so that it will apply in cases where a company that is not itself listed on a national securities exchange immediately prior to its initial listing on the Exchange is listing upon the closing of its acquisition of an Acquisition Company which had a class of equity securities listed on Nasdaq prior to the closing of such acquisition. Listing Rule IM–5900–1(b) provides for certain credits that benefit a nonNasdaq company that lists in connection with its acquisition of a Nasdaq listed company.5 Nasdaq proposes to clarify that a company that received a waiver of the All-Inclusive Annual Listing Fee for the remainder of the calendar year in which the listing occurs, as described above, is not 5 Listing Rule IM–5900–1(b) provides that companies will receive a credit or waiver when a non-Nasdaq company completes a merger with a Nasdaq company and the non-Nasdaq company is the surviving entity and lists on Nasdaq. If the Nasdaq company previously paid its All-inclusive Annual Listing Fee, the surviving non-Nasdaq entity will, upon listing on Nasdaq, receive a credit for the All-Inclusive Annual Listing Fee previously paid by the Nasdaq company, prorated for the months remaining in the year after the merger. If the Nasdaq company has not paid its All-inclusive Annual Listing Fee for the year, the Nasdaq company will receive a waiver of the All-Inclusive Annual Listing Fee applicable to the months remaining in the year after the merger and must pay the remaining balance of its All-Inclusive Annual Listing Fee, representing the fee for the period it was listed. VerDate Sep<11>2014 19:02 Mar 31, 2021 Jkt 253001 eligible for any credits under Listing Rule IM–5900–1(b). Similarly, Listing Rules 5910(a)(7)(iii) (for companies listing on the Nasdaq Global and Global Select Markets) and 5920(a)(8)(iii) (for companies listing on the Nasdaq Capital Market) provide that the Entry Fees shall not be applicable with respect to any securities that are listed on another national securities exchange but not listed on Nasdaq, if the issuer of such securities is acquired by an unlisted company and, in connection with the acquisition, the unlisted company lists exclusively on the Nasdaq. The Exchange also proposes to extend this waiver so that it will apply in cases where a company that is not itself listed on a national securities exchange immediately prior to its initial listing on the Exchange is listing upon closing of its acquisition of an Acquisition Company which had a class of equity securities listed on Nasdaq prior to the closing of such acquisition. To that end, Nasdaq proposes to adopt Listing Rules 5910(a)(7)(v) (for companies listing on the Nasdaq Global and Global Select Markets) and 5920(a)(8)(v) (for companies listing on the Nasdaq Capital Market) to provide that the Entry Fees shall not be applicable with respect to any securities that are listed on Nasdaq by a previously unlisted company in connection with its acquisition of a company listed under IM–5101–2 (an acquisition company whose business plan is to complete one or more acquisitions). 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. Finally, Nasdaq proposes to update the title of Listing Rule IM–5900–4 to clarify its applicability, as modified by this proposed amendment and to identify the paragraphs of this rule with letters to improve its readability. Nasdaq also proposes to update Listing Rules 5910 and 5920 to make conforming and formatting changes. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,6 in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,7 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges 6 15 7 15 PO 00000 U.S.C. 78f(b). U.S.C. 78f(b)(4) and (5). Frm 00117 Fmt 4703 Sfmt 4703 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 charge prices in a manner that would be unreasonable, inequitable, or unfairly discriminatory. The Exchange believes that the proposed fee waivers are equitable as they are 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 eliminate a current distinction within the rules and 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 does not have any provision for charging the Entry Fees or the prorated All-Inclusive Annual Listing Fee with respect to shares of currently listed companies issued during the course of a calendar year (such shares are reflected in the full year annual fee bill for the next subsequent calendar year). As such, there are no fees billed in connection with the issuance of additional shares upon consummation of a business combination by a Nasdaqlisted Acquisition Company in which it is the surviving legal entity. By contrast, if a company that is not listed on Nasdaq or another national securities exchange merges with a Nasdaq-listed Acquisition Company and the nonlisted company is the acquirer in the transaction, the non-listed company is treated as a new listing and must pay the Entry Fees and the prorated AllInclusive Annual Listing Fee in relation to all shares issued and outstanding at the time of initial listing, subject to certain credits.8 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 8 Listing Rule IM–5900–1(b) provides for certain credits that benefit a non-Nasdaq company that lists in connection with its acquisition of a Nasdaq listed company. E:\FR\FM\01APN1.SGM 01APN1 jbell on DSKJLSW7X2PROD with NOTICES Federal Register / Vol. 86, No. 61 / Thursday, April 1, 2021 / Notices 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 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. Nasdaq believes that the proposed rule change to clarify that a company that received a waiver of the AllInclusive Annual Listing Fee for the remainder of the calendar year in which the listing occurs, as described above, is not eligible for any credits under Listing Rule IM–5900–1(b) does not change the substance of Listing Rule IM–5900–1(b) and protects investors and the public interest by clarifying the applicability of the rule and making it easier to understand. Finally, Nasdaq believes that the proposed rule change to identify paragraphs with letters and to update the title of Listing Rule IM–5900–4, to describe the applicability of this rule to waiver of certain annual fees ‘‘in Conjunction with a Non-Exchange Listed Issuer Business Combination with an Acquisition Company,’’ does not change the substance of this rule and protects investors and the public interest by clarifying the applicability of the rule and making it easier to understand. Similarly, Nasdaq believes that conforming and formatting changes to Listing Rules 5910 and 5920 do not change the substance of these rules and VerDate Sep<11>2014 19:02 Mar 31, 2021 Jkt 253001 protect investors and the public interest by making them easier to understand. 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. Nasdaq notes that the NYSE is its primary competitor for listing companies and that the NYSE has already adopted a waiver of its comparable listing fees in the scenarios similar to those covered in this proposal.9 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.10 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: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings 9 See Securities Exchange Act Release No. 89773 (September 4, 2020), 85 FR 55902 (September 10, 2020) (SR–NYSE–2020–40). 10 15 U.S.C. 78s(b)(3)(A)(ii). PO 00000 Frm 00118 Fmt 4703 Sfmt 4703 17229 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 rule-comments@ sec.gov. Please include File Number SR– NASDAQ–2021–012 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–2021–012. 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–2021–012 and should be submitted on or before April 22, 2021. E:\FR\FM\01APN1.SGM 01APN1 17230 Federal Register / Vol. 86, No. 61 / Thursday, April 1, 2021 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–06669 Filed 3–31–21; 8:45 am] BILLING CODE P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–91423; File No. SR– CboeBYX–2020–021] Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of Filing of Amendments No. 3 and No. 4, and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendments No. 3 and No. 4, To Introduce Periodic Auctions for the Trading of U.S. Equity Securities March 26, 2021. I. Introduction On July 17, 2020, Cboe BYX Exchange, Inc. (‘‘Exchange’’ or ‘‘BYX’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to introduce periodic auctions in U.S. equity securities. The proposed rule change was published for comment in the Federal Register on August 4, 2020.3 On September 10, 2020, pursuant to Section 19(b)(2) of the Exchange Act,4 the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.5 On October 27, 2020, the Exchange filed Amendment No. 1 to the proposed rule change, and on October 28, 2020 the Exchange filed Amendment No. 2 to the proposed rule change, which replaced in its entirety the proposed rule change as modified by Amendment No. 1. On October 30, 2020, the Commission noticed the filing of Amendment No. 2 and instituted proceedings under 11 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 89424 (July 29, 2020), 85 FR 47262. 4 15 U.S.C. 78s(b)(2). 5 See Securities Exchange Act Release No. 89820, 85 FR 57891 (September 16, 2020). The Commission designated November 2, 2020 as the date by which the Commission shall approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change. jbell on DSKJLSW7X2PROD with NOTICES 1 15 VerDate Sep<11>2014 19:02 Mar 31, 2021 Jkt 253001 Section 19(b)(2)(B) of the Exchange Act 6 to determine whether to approve or disapprove the proposed rule change.7 On January 26, 2021, the Commission designated a longer period for Commission action on the proposed rule change.8 On February 10, 2021, the Exchange filed Amendment No. 3 to the proposed rule change, which amended and superseded the proposed rule change as modified by Amendment No. 2. On March 18, 2021, the Exchange filed Amendment No. 4 to the proposed rule change, which amended the proposed rule change as modified by Amendment No. 3.9 The Commission has received comment letters on the proposed rule change, including a response by the Exchange.10 The Commission is publishing this notice to solicit comments on Amendments No. 3 and No. 4 from interested persons and is approving the proposed rule change, as modified by Amendments No. 3 and No. 4, on an accelerated basis. II. The Exchange’s Description of the Proposed Rule Change, as Modified by Amendments No. 3 and No. 4 In its filing with the Commission and subsequent letter responding to comments, 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 Amendment No. 3 to SR–CboeBYX– 2020–021 amends and replaces in its entirety the proposal as originally submitted on July 17, 2020 and amended pursuant to Amendment No. 1 6 15 U.S.C. 78s(b)(2)(B). Securities Exchange Act Release No. 90288, 85 FR 70678 (November 5, 2020). 8 See Securities Exchange Act Release No. 90993, 86 FR 7753 (February 1, 2021) (designating April 1, 2021 as the date by which the Commission shall approve or disapprove the proposal). 9 All of the amendments to the proposed rule change, including Amendments No. 3 and No. 4, can be can be found on the Commission’s website at: https://www.sec.gov/comments/sr-cboebyx-2020021/srcboebyx2020021.htm. 10 Comments on the proposed rule change, including the Exchange’s response, can be found on the Commission’s website at: https://www.sec.gov/ comments/sr-cboebyx-2020-021/ srcboebyx2020021.htm. 7 See PO 00000 Frm 00119 Fmt 4703 Sfmt 4703 on October 27, 2020 and Amendment No. 2 on October 28, 2020. Amendment No. 4 to SR–CboeBYX–2020–021 partially amends the proposal as modified by Amendment No. 3. The purpose of the proposed rule change is to introduce periodic auctions for the trading of U.S. equity securities (‘‘Periodic Auctions’’).11 As proposed, Periodic Auctions of one hundred milliseconds would be conducted throughout the course of the trading day when there are matching buy and sell Periodic Auction Orders, as defined below, that are available to trade in such an auction. Periodic Auctions would not interrupt trading in the continuous market, and would be price forming auctions that are executed at the price level that maximizes the total number of shares in both the auction book and the continuous market that are executed in the auction. The Exchange’s parent company, Cboe Global Markets, Inc. (‘‘Cboe’’), has been a global leader in the implementation of periodic auctions, and currently runs the largest periodic auction book for the trading of European equities. The proposed Periodic Auctions that the Exchange would implement are based on the model that Cboe offers to clients in Europe, with targeted changes to adapt this model for the U.S. equities market. The Exchange believes that its implementation of Periodic Auctions would enhance the ability for investors to source liquidity in all equity securities traded on the Exchange. As discussed below, this includes both equity securities that trade in lower volume (i.e., ‘‘thinlytraded securities’’) where liquidity is naturally more scarce, but also more actively traded securities, including where available liquidity may be diminished due to increased volatility or other market conditions.12 Today, U.S. equities market participants are largely limited to two significant liquidity events where orders are pooled and executed at a single point in time—i.e., the opening and closing auctions. During the rest of the trading day, liquidity may be more limited, particularly for market participants that are seeking to trade larger orders. As proposed, Periodic Auctions would offer a new price forming auction that could be utilized 11 The term ‘‘Periodic Auction’’ shall mean an auction conducted pursuant to Proposed Rule 11.25. See Proposed Rule 11.25(a)(4). 12 As discussed in the following section, while Periodic Auctions would be available in all securities traded on the Exchange, the Exchange believes that this trading mechanism would be particularly valuable for securities that trade in lower volume and consequently suffer from wider spreads and less liquidity displayed in the public markets. E:\FR\FM\01APN1.SGM 01APN1

Agencies

[Federal Register Volume 86, Number 61 (Thursday, April 1, 2021)]
[Notices]
[Pages 17227-17230]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-06669]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91421; File No. SR-NASDAQ-2021-012]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Waive the Entry Fee and 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 Nasdaq

March 26, 2021.
    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 March 16, 2021, 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, 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\ 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 waive the Entry Fee and 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 Nasdaq.
    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 Rules 5910 and 5920 to waive the 
Entry Fees and 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 Nasdaq.
    When an Acquisition Company consummates its business combination, 
it is typically the legal acquirer in the transaction and, provided it 
meets the continued listing standards applied in connection with a 
business combination by a listed Acquisition Company, it can remain 
listed on the Exchange.\3\ Following the business combination, the 
company is not required to pay any additional listing fees for any 
shares issued in connection with its business combination, so there are 
no listing fees payable in connection with a business combination 
between a Nasdaq-listed Acquisition Company and a company which is not 
listed on a national securities exchange where the Nasdaq-listed 
Acquisition Company is the acquirer in the transaction. Similarly, 
Nasdaq does not have any provision for charging prorated annual fees 
with respect to shares of currently listed companies issued during the 
course of a calendar year (such shares are reflected in the full year 
annual fee bill for the next subsequent calendar year). As such, there 
are no fees imposed upon the consummation of a business combination by 
a Nasdaq-listed Acquisition Company in which it is the surviving legal 
entity. By contrast, if a company that is not listed on Nasdaq or 
another national securities exchange merges with a Nasdaq-listed 
Acquisition Company and the non-listed company is the acquirer in the 
transaction, the non-listed company is treated as a new listing and 
must pay the Entry Fees and the prorated All-Inclusive Annual Listing 
Fee, subject to certain credits.\4\
---------------------------------------------------------------------------

    \3\ Among the continued listing requirements applicable to an 
Acquisition Company under IM-5101-2 is the requirement that the 
combined company must meet all initial listing requirements 
following a business combination.
    \4\ Listing Rule IM-5900-1(b) provides for certain credits that 
benefit a non-Nasdaq company that lists in connection with its 
acquisition of a Nasdaq listed company.
---------------------------------------------------------------------------

    Nasdaq does not believe that this disparate treatment of two 
substantially identical transactions is appropriate.

[[Page 17228]]

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. To address the existing disparity in fees Nasdaq 
proposes to modify the Rule 5900 Series to provide a waiver to the 
entry and annual fees otherwise owed by any company not listed on a 
national securities exchange that is listing upon closing of its 
acquisition of an Acquisition Company listed on Nasdaq.
    Specifically, Listing Rule IM-5900-4 currently includes a waiver of 
the prorated All-Inclusive Annual Listing Fee for any issuer that is 
not listed on a national securities exchange immediately prior to its 
initial listing on Nasdaq but is listing its Primary Equity Securities 
upon closing of its acquisition of a company listed on another national 
securities exchange pursuant to special rules for acquisition companies 
whose business plan is to complete one or more acquisitions. Nasdaq 
proposes to extend this waiver so that it will apply in cases where a 
company that is not itself listed on a national securities exchange 
immediately prior to its initial listing on the Exchange is listing 
upon the closing of its acquisition of an Acquisition Company which had 
a class of equity securities listed on Nasdaq prior to the closing of 
such acquisition.
    Listing Rule IM-5900-1(b) provides for certain credits that benefit 
a non-Nasdaq company that lists in connection with its acquisition of a 
Nasdaq listed company.\5\ Nasdaq proposes to clarify that a company 
that received a waiver of the All-Inclusive Annual Listing Fee for the 
remainder of the calendar year in which the listing occurs, as 
described above, is not eligible for any credits under Listing Rule IM-
5900-1(b).
---------------------------------------------------------------------------

    \5\ Listing Rule IM-5900-1(b) provides that companies will 
receive a credit or waiver when a non-Nasdaq company completes a 
merger with a Nasdaq company and the non-Nasdaq company is the 
surviving entity and lists on Nasdaq. If the Nasdaq company 
previously paid its All-inclusive Annual Listing Fee, the surviving 
non-Nasdaq entity will, upon listing on Nasdaq, receive a credit for 
the All-Inclusive Annual Listing Fee previously paid by the Nasdaq 
company, prorated for the months remaining in the year after the 
merger. If the Nasdaq company has not paid its All-inclusive Annual 
Listing Fee for the year, the Nasdaq company will receive a waiver 
of the All-Inclusive Annual Listing Fee applicable to the months 
remaining in the year after the merger and must pay the remaining 
balance of its All-Inclusive Annual Listing Fee, representing the 
fee for the period it was listed.
---------------------------------------------------------------------------

    Similarly, Listing Rules 5910(a)(7)(iii) (for companies listing on 
the Nasdaq Global and Global Select Markets) and 5920(a)(8)(iii) (for 
companies listing on the Nasdaq Capital Market) provide that the Entry 
Fees shall not be applicable with respect to any securities that are 
listed on another national securities exchange but not listed on 
Nasdaq, if the issuer of such securities is acquired by an unlisted 
company and, in connection with the acquisition, the unlisted company 
lists exclusively on the Nasdaq. The Exchange also proposes to extend 
this waiver so that it will apply in cases where a company that is not 
itself listed on a national securities exchange immediately prior to 
its initial listing on the Exchange is listing upon closing of its 
acquisition of an Acquisition Company which had a class of equity 
securities listed on Nasdaq prior to the closing of such acquisition. 
To that end, Nasdaq proposes to adopt Listing Rules 5910(a)(7)(v) (for 
companies listing on the Nasdaq Global and Global Select Markets) and 
5920(a)(8)(v) (for companies listing on the Nasdaq Capital Market) to 
provide that the Entry Fees shall not be applicable with respect to any 
securities that are listed on Nasdaq by a previously unlisted company 
in connection with its acquisition of a company listed under IM-5101-2 
(an acquisition company whose business plan is to complete one or more 
acquisitions).
    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.
    Finally, Nasdaq proposes to update the title of Listing Rule IM-
5900-4 to clarify its applicability, as modified by this proposed 
amendment and to identify the paragraphs of this rule with letters to 
improve its readability. Nasdaq also proposes to update Listing Rules 
5910 and 5920 to make conforming and formatting changes.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\6\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\7\ 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.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 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 they are 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 eliminate 
a current distinction within the rules and 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 does not have any provision for charging the Entry Fees or the 
prorated All-Inclusive Annual Listing Fee with respect to shares of 
currently listed companies issued during the course of a calendar year 
(such shares are reflected in the full year annual fee bill for the 
next subsequent calendar year). As such, there are no fees billed in 
connection with the issuance of additional shares upon consummation of 
a business combination by a Nasdaq-listed Acquisition Company in which 
it is the surviving legal entity. By contrast, if a company that is not 
listed on Nasdaq or another national securities exchange merges with a 
Nasdaq-listed Acquisition Company and the non-listed company is the 
acquirer in the transaction, the non-listed company is treated as a new 
listing and must pay the Entry Fees and the prorated All-Inclusive 
Annual Listing Fee in relation to all shares issued and outstanding at 
the time of initial listing, subject to certain credits.\8\
---------------------------------------------------------------------------

    \8\ Listing Rule IM-5900-1(b) provides for certain credits that 
benefit a non-Nasdaq company that lists in connection with its 
acquisition of a Nasdaq listed company.
---------------------------------------------------------------------------

    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

[[Page 17229]]

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 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.
    Nasdaq believes that the proposed rule change to clarify that a 
company that received a waiver of the All-Inclusive Annual Listing Fee 
for the remainder of the calendar year in which the listing occurs, as 
described above, is not eligible for any credits under Listing Rule IM-
5900-1(b) does not change the substance of Listing Rule IM-5900-1(b) 
and protects investors and the public interest by clarifying the 
applicability of the rule and making it easier to understand.
    Finally, Nasdaq believes that the proposed rule change to identify 
paragraphs with letters and to update the title of Listing Rule IM-
5900-4, to describe the applicability of this rule to waiver of certain 
annual fees ``in Conjunction with a Non-Exchange Listed Issuer Business 
Combination with an Acquisition Company,'' does not change the 
substance of this rule and protects investors and the public interest 
by clarifying the applicability of the rule and making it easier to 
understand. Similarly, Nasdaq believes that conforming and formatting 
changes to Listing Rules 5910 and 5920 do not change the substance of 
these rules and protect investors and the public interest by making 
them easier to understand.
    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. Nasdaq notes 
that the NYSE is its primary competitor for listing companies and that 
the NYSE has already adopted a waiver of its comparable listing fees in 
the scenarios similar to those covered in this proposal.\9\
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 89773 (September 4, 
2020), 85 FR 55902 (September 10, 2020) (SR-NYSE-2020-40).
---------------------------------------------------------------------------

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.\10\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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-2021-012 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-2021-012. 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-2021-012 and should be submitted 
on or before April 22, 2021.


[[Page 17230]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-06669 Filed 3-31-21; 8:45 am]
BILLING CODE P
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