82 FR 16082 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change To Amend Section 102.01B of the NYSE Listed Company Manual To Modify the Requirements That Apply to Companies That List Without a Prior Exchange Act Registration and That Are Not Listing in Connection With an Underwritten Initial Public Offering
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 61 (March 31, 2017)
Federal Register Volume 82, Issue 61 (March 31, 2017)
| Page Range | 16082-16084 | |
| FR Document | 2017-06332 |
[Federal Register Volume 82, Number 61 (Friday, March 31, 2017)] [Notices] [Pages 16082-16084] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-06332] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80313; File No. SR-NYSE-2017-12] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change To Amend Section 102.01B of the NYSE Listed Company Manual To Modify the Requirements That Apply to Companies That List Without a Prior Exchange Act Registration and That Are Not Listing in Connection With an Underwritten Initial Public Offering March 27, 2017. 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 March 13, 2017, New York Stock Exchange LLC (``NYSE'' 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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Section 102.01B of the NYSE Listed Company Manual (the ``Manual'') to modify the provisions relating to the qualification of companies listing without a prior Exchange Act registration. The proposed rule change is available on the Exchange's Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Section 102.01B of the Manual to modify the provisions relating to the qualification of companies listing without a prior Exchange Act registration. Generally, the Exchange expects to list companies in connection with a firm commitment underwritten IPO, upon transfer from another market, or pursuant to a spin-off. Companies listing in connection with an IPO must demonstrate that they have $40 million in market value of publicly-held shares, while companies that are listing upon transfer from another exchange or the over-the counter market or pursuant to a spin-off must demonstrate that they have $100 million in market value of publicly-held shares. Section 102.01B currently recognizes that some companies that have not previously had their common equity securities registered under the Exchange Act, but which have sold common equity securities in a private placement, may wish to list their common equity securities on the Exchange at the time of effectiveness of a registration statement filed solely for the purpose of allowing existing shareholders to sell their shares.\4\ Footnote (E) of Section 102.01B provides that the Exchange will, on a case by case basis, exercise discretion to list such companies. In exercising this discretion, Footnote (E) provides that the Exchange will determine that such company has met the $100 million aggregate market value of publicly-held shares requirement based on a combination of both (i) an independent third-party valuation (a ``Valuation'') of the company and (ii) the most recent trading price for the company's common stock in a trading system for unregistered securities operated by a national securities exchange or a registered broker-dealer (a ``Private Placement Market''). The Exchange will attribute a market value of publicly-held shares to the company equal to the lesser of (i) the value calculable based on the Valuation and (ii) the value calculable based on the most recent trading price in a Private Placement Market. --------------------------------------------------------------------------- \4\ See NYSE Listed Company Manual, Section 102.01B, Footnote (E). --------------------------------------------------------------------------- Any Valuation used for purposes of Footnote (E) must be provided by an entity that has significant experience and demonstrable competence in the [[Page 16083]] provision of such valuations. The Valuation must be of a recent date as of the time of the approval of the company for listing and the evaluator must have considered, among other factors, the annual financial statements required to be included in the registration statement, along with financial statements for any completed fiscal quarters subsequent to the end of the last year of audited financials included in the registration statement. The Exchange will consider any market factors or factors particular to the listing applicant that would cause concern that the value of the company had diminished since the date of the Valuation and will continue to monitor the company and the appropriateness of relying on the Valuation up to the time of listing. In particular, the Exchange will examine the trading price trends for the stock in the Private Placement Market over a period of several months prior to listing and will only rely on a Private Placement Market price if it is consistent with a sustained history over that several month period evidencing a market value in excess of the Exchange's market value requirement. The Exchange may withdraw its approval of the listing at any time prior to the listing date if it believes that the Valuation no longer accurately reflects the company's likely market value. While Footnote (E) to Section 102.01B provides for a company listing upon effectiveness of a selling shareholder registration statement, it does not make any provision for a company listing in connection with the effectiveness of an Exchange Act registration statement in the absence of an IPO or other Securities Act registration. A company is able to become an Exchange Act registrant without a concurrent public offering by filing a Form 10 or an annual report (such as a Form 10-K or Form 20-F) with the SEC. The Exchange believes that it is appropriate to list companies immediately upon effectiveness of an Exchange Act registration statement without a concurrent Securities Act registration provided the applicable company meets all other listing requirements. Consequently, the Exchange proposes to amend Footnote (E) to Section 102.01B to explicitly provide that it applies to companies listing upon effectiveness of an Exchange Act registration statement without a concurrent Securities Act registration, as well as to companies listing upon effectiveness of a selling shareholder registration statement. The Exchange notes that the requirement of Footnote (E) that the Exchange rely on recent Private Placement Market trading in addition to a Valuation may cause difficulties for certain companies that are otherwise clearly qualified for listing. Some companies that are clearly large enough to be suitable for listing on the Exchange do not have their securities traded at all on a Private Placement Market prior to going public. In other cases, the Private Placement Market trading is too limited to provide a reasonable basis for reaching conclusions about a company's qualification. Consequently, the Exchange proposes to amend Footnote (E) to provide an exception to the Private Placement Market trading requirement for companies with respect to which there is a recent Valuation available indicating at least $250 million in market value of publicly-held shares. A Valuation of at least two-and-a-half times the $100 million requirement provides a basis for concluding that the market value of the company's shares would meet the Valuation standard upon commencement of trading on the Exchange. In addition, the Exchange notes that any Valuation used for this purpose must be provided by an entity that has significant experience and demonstrable competence in the provision of such valuations. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) \5\ of the Act, in general, and furthers the objectives of Section 6(b)(5) of the Act,\6\ in particular in that it is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The proposed rule change would foster cooperation and coordination with persons engaged in clearing and settling transactions in securities, thereby facilitating such transactions. --------------------------------------------------------------------------- \5\ 15 U.S.C. 78f(b). \6\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The proposal to permit companies listing upon effectiveness of an Exchange Act registration statement without a concurrent public offering or Securities Act registration is designed to protect investors and the public interest, because such companies would be required to meet all of the same quantitative requirements met by other listing applicants. The proposal to amend Footnote (E) to Section 102.01B to allow companies to avail themselves of that provision without any reliance on Private Placement Market trading is designed to protect investors and the public interest because any company relying solely on a valuation to demonstrate compliance with the market value of publicly-held shares requirement would be required to demonstrate a market value of publicly-held shares of $250 million, rather than the $100 million that is generally applicable. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change would impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Exchange Act. Rather, the proposed rule change would increase competition for new listings by enabling companies to list that meet all quantitative requirements but are currently unable to list because of the methodology required by the currents rules to demonstrate their compliance. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove the proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be 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: [[Page 16084]] Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-NYSE-2017-12 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSE-2017-12. 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 Web site (http://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 Web site 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; the Commission does not 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-NYSE-2017-12 and should be submitted on or before April 21, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\7\ --------------------------------------------------------------------------- \7\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-06332 Filed 3-30-17; 8:45 am] BILLING CODE 8011-01-P
![16082 Federal Register / Vol. 82, No. 61 / Friday, March 31, 2017 / Notices
Electronic Comments SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s
COMMISSION Statement of the Purpose of, and the
• Use the Commission’s Internet Statutory Basis for, the Proposed Rule
comment form (http://www.sec.gov/ [Release No. 34–80313; File No. SR–NYSE– Change
rules/sro.shtml); or 2017–12]
1. Purpose
• Send an email to rule-comments@
sec.gov. Please include File Number SR– Self-Regulatory Organizations; New The Exchange proposes to amend
NASDAQ–2017–029 on the subject line. York Stock Exchange LLC; Notice of Section 102.01B of the Manual to
Filing of Proposed Rule Change To modify the provisions relating to the
Paper Comments Amend Section 102.01B of the NYSE qualification of companies listing
Listed Company Manual To Modify the without a prior Exchange Act
• Send paper comments in triplicate Requirements That Apply to registration.
to Secretary, Securities and Exchange Companies That List Without a Prior Generally, the Exchange expects to
Commission, 100 F Street NE., Exchange Act Registration and That list companies in connection with a firm
Washington, DC 20549–1090. Are Not Listing in Connection With an commitment underwritten IPO, upon
Underwritten Initial Public Offering transfer from another market, or
All submissions should refer to File
pursuant to a spin-off. Companies
Number SR–NASDAQ–2017–029. This March 27, 2017. listing in connection with an IPO must
file number should be included on the Pursuant to Section 19(b)(1) 1 of the demonstrate that they have $40 million
subject line if email is used. To help the Securities Exchange Act of 1934 (the in market value of publicly-held shares,
Commission process and review your ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 while companies that are listing upon
comments more efficiently, please use notice is hereby given that, on March transfer from another exchange or the
only one method. The Commission will 13, 2017, New York Stock Exchange over-the counter market or pursuant to
post all comments on the Commission’s LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed a spin-off must demonstrate that they
Internet Web site (http://www.sec.gov/ with the Securities and Exchange have $100 million in market value of
rules/sro.shtml). Copies of the Commission (the ‘‘Commission’’) the publicly-held shares.
submission, all subsequent proposed rule change as described in Section 102.01B currently recognizes
amendments, all written statements Items I, II, and III below, which Items that some companies that have not
with respect to the proposed rule have been prepared by the self- previously had their common equity
change that are filed with the regulatory organization. The securities registered under the Exchange
Commission, and all written Commission is publishing this notice to Act, but which have sold common
communications relating to the solicit comments on the proposed rule equity securities in a private placement,
proposed rule change between the change from interested persons. may wish to list their common equity
Commission and any person, other than securities on the Exchange at the time
I. Self-Regulatory Organization’s
those that may be withheld from the of effectiveness of a registration
Statement of the Terms of Substance of
public in accordance with the statement filed solely for the purpose of
the Proposed Rule Change
provisions of 5 U.S.C. 552, will be allowing existing shareholders to sell
The Exchange proposes to amend their shares.4 Footnote (E) of Section
available for Web site viewing and Section 102.01B of the NYSE Listed 102.01B provides that the Exchange
printing in the Commission’s Public Company Manual (the ‘‘Manual’’) to will, on a case by case basis, exercise
Reference Room, 100 F Street NE., modify the provisions relating to the discretion to list such companies. In
Washington, DC 20549, on official qualification of companies listing exercising this discretion, Footnote (E)
business days between the hours of without a prior Exchange Act provides that the Exchange will
10:00 a.m. and 3:00 p.m. Copies of the registration. The proposed rule change determine that such company has met
filing also will be available for is available on the Exchange’s Web site the $100 million aggregate market value
inspection and copying at the principal at www.nyse.com, at the principal office of publicly-held shares requirement
office of the Exchange. All comments of the Exchange, and at the based on a combination of both (i) an
received will be posted without change; Commission’s Public Reference Room. independent third-party valuation (a
the Commission does not edit personal ‘‘Valuation’’) of the company and (ii) the
II. Self-Regulatory Organization’s
identifying information from most recent trading price for the
Statement of the Purpose of, and
submissions. You should submit only Statutory Basis for, the Proposed Rule company’s common stock in a trading
information that you wish to make Change system for unregistered securities
available publicly. All submissions operated by a national securities
should refer to File Number SR– In its filing with the Commission, the exchange or a registered broker-dealer (a
NASDAQ–2017–029 and should be self-regulatory organization included ‘‘Private Placement Market’’). The
submitted on or before April 21, 2017. statements concerning the purpose of, Exchange will attribute a market value
and basis for, the proposed rule change of publicly-held shares to the company
For the Commission, by the Division of and discussed any comments it received equal to the lesser of (i) the value
Trading and Markets, pursuant to delegated on the proposed rule change. The text calculable based on the Valuation and
authority.37 of those statements may be examined at (ii) the value calculable based on the
Eduardo A. Aleman, the places specified in Item IV below. most recent trading price in a Private
sradovich on DSK3GMQ082PROD with NOTICES
Assistant Secretary. The Exchange has prepared summaries, Placement Market.
[FR Doc. 2017–06333 Filed 3–30–17; 8:45 am] set forth in sections A, B, and C below, Any Valuation used for purposes of
BILLING CODE 8011–01–P
of the most significant parts of such Footnote (E) must be provided by an
statements. entity that has significant experience
and demonstrable competence in the
1 15 U.S.C. 78s(b)(1).
2 15 U.S.C. 78a. 4 See NYSE Listed Company Manual, Section
37 17 CFR 200.30–3(a)(12). 3 17 CFR 240.19b–4. 102.01B, Footnote (E).
VerDate Sep<11>2014 16:31 Mar 30, 2017 Jkt 241001 PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 E:\FR\FM\31MRN1.SGM 31MRN1](https://thefederalregister.org/doc/82_FR_16143/page/1.svg)
![16084 Federal Register / Vol. 82, No. 61 / Friday, March 31, 2017 / Notices
Electronic Comments SECURITIES AND EXCHANGE concerning the purpose of and basis for
COMMISSION the proposed rule change and discussed
• Use the Commission’s Internet any comments it received on the
comment form (http://www.sec.gov/ [Release No. 34–80316; File No. SR–ISE–
2017–28]
proposed rule change. The text of these
rules/sro.shtml); or statements may be examined at the
• Send an email to rule-comments@ Self-Regulatory Organizations; places specified in Item IV below. The
sec.gov. Please include File Number SR– International Securities Exchange, Exchange has prepared summaries, set
NYSE–2017–12 on the subject line. LLC; Notice of Filing and Immediate forth in sections A, B, and C below, of
Effectiveness of Proposed Rule the most significant aspects of such
Paper Comments Change To Delay the Implementation statements.
• Send paper comments in triplicate of Functionality Associated With A. Self-Regulatory Organization’s
to Secretary, Securities and Exchange Stock-Option Orders Statement of the Purpose of, and
Commission, 100 F Street NE., March 27, 2017. Statutory Basis for, the Proposed Rule
Washington, DC 20549–1090. Pursuant to Section 19(b)(1) of the Change
All submissions should refer to File Securities Exchange Act of 1934 1. Purpose
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
Number SR–NYSE–2017–12. This file Today, ISE accepts complex orders,
notice is hereby given that on March 21,
number should be included on the including Stock-Option Orders that
2017, the International Securities
subject line if email is used. To help the Exchange, LLC (‘‘ISE’’ or ‘‘Exchange’’) contain a stock component. Today,
Commission process and review your filed with the Securities and Exchange complex orders, including Stock-Option
comments more efficiently, please use Commission (‘‘SEC’’ or ‘‘Commission’’) Orders, are permitted to: (1) Leg into the
only one method. The Commission will the proposed rule change as described regular market where they may trade
post all comments on the Commission’s in Items I and II below, which Items against bids and offers for the individual
Internet Web site (http://www.sec.gov/ have been prepared by the Exchange. legs pursuant to Rule 722(b)(3)(ii) and
rules/sro.shtml). Copies of the ISE filed the proposal pursuant to (iii) (‘‘legging’’); 6 or (2) execute against
submission, all subsequent Section 19(b)(3)(A)(iii) of the Act 3 and another order within the complex order
amendments, all written statements Rule 19b–4(f)(6) thereunder.4 The book.
with respect to the proposed rule Commission is publishing this notice to The Exchange proposes to delay the
change that are filed with the solicit comments on the proposed rule implementation of legging functionality
Commission, and all written change from interested persons. for Stock-Option Orders in connection
communications relating to the with a migration to the INET platform.
I. Self-Regulatory Organization’s
proposed rule change between the INET is the proprietary core technology
Statement of the Terms of Substance of
Commission and any person, other than utilized across Nasdaq’s global markets
the Proposed Rule Change
those that may be withheld from the and utilized on The NASDAQ Options
The Exchange proposes to delay the Market LLC (‘‘NOM’’), NASDAQ PHLX
public in accordance with the implementation of functionality
provisions of 5 U.S.C. 552, will be LLC (‘‘Phlx’’) and NASDAQ BX, Inc.
associated with Stock-Option Orders 5 (‘‘BX’’) (collectively, ‘‘Nasdaq
available for Web site viewing and in connection with a system migration Exchanges’’). The migration of ISE to the
printing in the Commission’s Public to Nasdaq INET technology. Nasdaq INET architecture would result
Reference Room, 100 F Street NE., The text of the proposed rule change in higher performance, scalability, and
Washington, DC 20549 on official is available on the Exchange’s Web site more robust architecture. With this
business days between the hours of at www.ise.com, at the principal office system migration, the Exchange intends
10:00 a.m. and 3:00 p.m. Copies of the of the Exchange, and at the to adopt certain trading functionality
filing also will be available for Commission’s Public Reference Room. currently utilized at Nasdaq Exchanges.7
inspection and copying at the principal II. Self-Regulatory Organization’s The Exchange desires to delay the
office of the Exchange. All comments Statement of the Purpose of, and implementation of the legging
received will be posted without change; Statutory Basis for, the Proposed Rule functionality for Stock-Option Orders
the Commission does not edit personal Change on INET at this time and rollout this
identifying information from functionality within one year of the date
In its filing with the Commission, the
submissions. You should submit only of the filing of this proposal. The
Exchange included statements
information that you wish to make Exchange is staging the re-platform to
available publicly. All submissions 1 15 U.S.C. 78s(b)(1). provide maximum benefit to its
should refer to File Number SR–NYSE– 2 17 CFR 240.19b–4. Members while also ensuring a
2017–12 and should be submitted on or 3 15 U.S.C. 78s(b)(3)(A)(iii). successful rollout. This delay in
before April 21, 2017. 4 17 CFR 240.19b–4(f)(6).
implementing the legging functionality
5 A stock-option order is an order to buy or sell
For the Commission, by the Division of
for Stock-Option Orders will provide
a stated number of units of an underlying stock or
Trading and Markets, pursuant to delegated a security convertible into the underlying stock
the Exchange additional time to test and
authority.7 (‘‘convertible security’’) coupled with the purchase implement this functionality on the
or sale of options contract(s) on the opposite side INET platform.
Eduardo A. Aleman, of the market representing either (A) the same
sradovich on DSK3GMQ082PROD with NOTICES
Assistant Secretary. number of units of the underlying stock or
6 Supplementary Material .02 to Rule 722 also
convertible security, or (B) the number of units of
[FR Doc. 2017–06332 Filed 3–30–17; 8:45 am] the underlying stock necessary to create a delta contains provisions relevant to the legging of Stock-
BILLING CODE 8011–01–P neutral position, but in no case in a ratio greater Option Orders specifically.
7 See Securities Exchange Act Release No. 80075
than eight-to-one (8.00), where the ratio represents
the total number of units of the underlying stock (February 21, 2017), 82 FR 11975 (February 27,
or convertible security in the option leg to the total 2017) (SR–ISE–2017–02) (Notice of Filing of
number of units of the underlying stock or Proposed Rule Change to Amend Various Rules in
convertible security in the stock leg. See ISE Rule Connection with a System Migration to Nasdaq
7 17 CFR 200.30–3(a)(12). 722(a)(2). INET Technology).
VerDate Sep<11>2014 16:31 Mar 30, 2017 Jkt 241001 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 E:\FR\FM\31MRN1.SGM 31MRN1](https://thefederalregister.org/doc/82_FR_16143/page/3.svg)
Document Created: 2017-03-31 01:37:44
Document Modified: 2017-03-31 01:37:44
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 82 FR 16082 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR