82 FR 32022 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Amendment No. 2 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 2, to Amend Listing Standards for Special Purpose Acquisition Companies to Modify the Initial and Continued Distribution Requirements
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 131 (July 11, 2017)
Federal Register Volume 82, Issue 131 (July 11, 2017)
| Page Range | 32022-32024 | |
| FR Document | 2017-14430 |
[Federal Register Volume 82, Number 131 (Tuesday, July 11, 2017)] [Notices] [Pages 32022-32024] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-14430] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-81079; File No. SR-NYSE-2017-11] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Amendment No. 2 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 2, to Amend Listing Standards for Special Purpose Acquisition Companies to Modify the Initial and Continued Distribution Requirements July 5, 2017. I. Introduction On March 20, 2017, the New York Stock Exchange LLC (``NYSE'' or ``Exchange'') filed with the Securities and Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to amend listing standards for Special Purpose Acquisition Companies (``SPACs'') to modify the initial and continued distribution requirements, and to make other minor changes. The proposed rule change was published for comment in the Federal Register on April 6, 2017.\3\ The Commission received no comments on the proposal. On May 19, 2017, the Commission designated a longer period for Commission action until July 5, 2017.\4\ On May 23, 2017, NYSE filed Amendment No. 1 to the proposal. On June 19, 2017, NYSE withdrew Amendment No. 1 and filed Amendment No. 2 to, among other things, revise the proposed continued listing distribution standard from a requirement of 300 total stockholders to a requirement of 300 public stockholders.\5\ The Commission is publishing this notice of Amendment No. 2 and approving the proposed rule change, as modified by Amendment No. 2, on an accelerated basis. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ See Securities Exchange Act Release No. 80358 (March 31, 2017), 82 FR 16865 (April 6, 2017) (``Notice''). \4\ See Securities Exchange Act Release No. 80735 (May 19, 2017), 82 FR 24173 (May 25, 2017) (``Extension''). \5\ In Amendment No. 2, the Exchange replaced the proposal in its entirety. Amendment No. 2, in addition to changing the proposed distribution standard to 300 public stockholders, rather than 300 total stockholders as originally proposed, specifies that NYSE Listed Company Manual (``Manual'') Section 802.01A does not apply to SPACs, defines the term ``public stockholders,'' and corrects typographical errors. Text of Amendment No. 2 is available as a comment letter to this filing. --------------------------------------------------------------------------- II. Description of the Proposal, as Modified by Amendment No. 2 A. General Background on SPACs A SPAC is a special purpose company that raises capital in an initial public offering (``IPO'') to enter into future undetermined business combinations through mergers, capital stock exchanges, assets acquisitions, stock purchases, reorganizations or similar business combinations with one or more operating businesses or assets. The Exchange represented that in an IPO, a SPAC typically sells units consisting of one share of common stock and one or more warrants (or fraction of a warrant) to purchase common stocks. The units are separable at some point after the IPO. The Exchange also noted that management of the SPAC typically receives a percentage of the equity at the outset and may be required to purchase additional shares in a private placement at the time of the IPO. Due to their different structure, SPACs do not have any prior financial history, at the time of their listing, like operating companies. B. Proposed Changes to Round Lot Holders in Initial Listing Standards NYSE Manual Section 102.06 sets forth the initial listing standards that apply to SPACs.\6\ Currently, in order to list on the Exchange, a SPAC is required to meet, among other standards, initial distribution requirements including having at least 400 round lot holders.\7\ The Exchange proposes to lower the initial distribution requirements of round lot holders from 400 to 300 for a SPAC listing either in connection with an IPO or a transfer from another exchange or a quotation listing.\8\ --------------------------------------------------------------------------- \6\ The Commission notes that throughout this order we have used the term ``SPAC'' or ``SPACs'', but these terms have the same meaning as ``Acquisition Company'' or ``Acquisition Companies'' which are the terms used for listing, and continued listing, in Section 102.06 of the Manual. \7\ See NYSE Manual Section 102.01A. \8\ The other alternative distribution criteria that currently apply to transfers and quotation listings will remain unchanged but is being moved so that all the criteria for listing SPACs will be contained in Section 102.06 of the Manual. See Notice, supra note 3 and discussion below. --------------------------------------------------------------------------- C. Proposed Changes to Total Stockholders in Continued Listing Standards NYSE Manual Section 802.01B sets forth the continued listing standards that apply to SPACs. Currently, a SPAC is deemed below the continued listing standards if, among other things, the SPAC's total number of stockholders is less than 400. The Exchange proposes to change this continued distribution requirement to 300 public stockholders.\9\ In connection with the amendment, the Exchange proposes to define ``public stockholders'' to exclude holders that are directors, officers, or their immediate families and holders of other concentrated holdings of 10% or more.\10\ --------------------------------------------------------------------------- \9\ See Amendment No. 2, supra note 5 and accompanying text. As with the initial standards, the alternative shareholder and other distribution continued listing standards will remain unchanged. \10\ The Exchange represents that it primarily relies on the beneficial ownership disclosure included in the issuers' registration statements and annual meeting proxy statements in calculating publicly held shares and public stockholders, but also refers to other SEC filings where appropriate and its determinations are made in accordance with Rule 13d-3 under the Act. The Exchange stated that this is its practice under all of its rules where these calculations must be made. The Exchange also stated that this is the practice of NYSE MKT and the Exchange believes that its approach is generally consistent with that of the NASDAQ Stock Market. --------------------------------------------------------------------------- D. Technical Changes The Exchange also has proposed four technical changes to its initial and continued listing standards on SPACs. First, the Exchange proposed to consolidate the SPAC initial listing standards in Section 102.06 of the Manual, rather than referring to Section 102.01A of the Manual, which applies for operating companies. Second, the Exchange proposed to move a sentence in Section 102.06 of the Manual that details the minimum price per share for a SPAC at the time of initial listing from the end to the beginning of the same paragraph. Third, the Exchange proposed to delete an incorrect reference to footnote (A) that is included following the aggregate market value requirement in Section 102.06 of the Manual.\11\ Finally, the Exchange proposed to add language to the continued listing criteria applicable to SPACs set forth in Section 801.01B of the Manual clarifying that the distribution standards in Section [[Page 32023]] 802.01A of the Manual do not apply to SPACs. \12\ --------------------------------------------------------------------------- \11\ The Exchange also proposes correct two instances of a typographical error included in the original filing by adding a second ``or'' to the phrase ``Number of holders of 100 shares or more or of a unit of trading. . .'' in Section 102.06 of the Manual. See Amendment No. 2. \12\ The Exchange represented that the proposed rule change would not affect the status of NYSE listed securities under Rule 3a51-1(a) of the Act (``Penny Stock Rule'')1 because the proposed standards will satisfy the requirements of Rule 3a51-1(a)(2) under the Act.1 While the proposed requirements do not include a requirement that newly-listed SPACs have at least $5 million in stockholders' equity as required by Rule 3a51-1(a)(2)(i)(A)(1) under the Act,1 the Exchange represented that the current requirement for a SPAC to place at least 90% of its offering proceeds in trust upon consummation of its IPO would ensure that all SPACs meet the Penny Stock Rule's requirement. To be considered for listing, the Exchange requires SPACs to demonstrate, among other things, an aggregate market value of $100,000,000 and a market value of publicly-held shares of $80,000,000. See NYSE Listed Company Manual Sections 102.06. --------------------------------------------------------------------------- III. Solicitation of Comments on Amendment No. 2 Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether Amendment No. 2 is consistent with the Act. Comments may be submitted by any of the following methods: 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-2017-11 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSE-2017-11. 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 will also 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 publicly available. All submissions should refer to File Number SR-NYSE-2017-11 and should be submitted on or before August 1, 2017. IV. Discussion and Commission's Findings The Commission has carefully reviewed the proposed rule change, as modified by Amendment No. 2, and finds that it is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange and, in particular, the requirements of Section 6(b) of the Act and the rules and regulations thereunder.\13\ Specifically, the Commission finds that the proposal is consistent with Sections 6(b)(5) of the Act,\14\ in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and in general, to protect investors and the public interest; and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \13\ 15 U.S.C. 78f. In approving this proposed rule change, the Commission has considered the proposed rule change's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). \14\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The development and enforcement of adequate listing standards governing the initial and continued distribution of securities on an exchange is an activity of critical importance to financial markets and the investing public. Listing standards, among other things, serve as a means for an exchange to screen issuers and to provide listed status only to bona fide companies that have, or in the case of an IPO, will have, sufficient public float, investor base, and trading interest to provide the depth and liquidity necessary to promote fair and orderly markets. Adequate listing standards are especially important given the expectations of investors regarding exchange trading and the imprimatur of listing on a particular market. Once a security has been distributed, maintenance criteria allow an exchange to monitor the status and trading characteristics of that security to ensure that the security continues to meet the exchange's standards for market depth and liquidity so that fair and orderly markets can be maintained. As noted above, SPACs are companies that raise capital in IPOs, with the purpose of purchasing existing operating companies or assets within a certain time frame. One of the important investor protection safeguards incorporated into the Exchange's listing standards for SPACs is the right of public shareholders \15\ to convert their shares for a pro rata share of the cash held in the trust account, provided that the business combination is approved and consummated.\16\ The Exchange noted that the securities of SPACs typically have a trading price very close to their liquidation value. The Exchange stated its belief that due to this trading characteristic, liquidity and market efficiency concerns relevant to listed operating companies do not arise to the same degree. --------------------------------------------------------------------------- \15\ Section 801.01B of the Manual defines public shareholders would exclude holders that are directors, officers, or their immediate families and holders of other concentrated holdings of 10% or more. \16\ See NYSE Listed Company Manual Sections 102.06(b). If a shareholder vote is not held on a Business Combination for which the company must file and furnish a proxy or information statement subject to Regulation 14A or 14C under the Act, the company must provide all shareholders with the opportunity to redeem all their shares for cash equal to their pro rata share of the aggregate amount then in the deposit account, pursuant to Rule 13e-4 under the Act (which regulates issuer tender offers). See NYSE Listed Company Manual Sections 102.06(c). --------------------------------------------------------------------------- The Exchange proposes to amend the initial and continued distribution requirement for a SPAC listing. For initial distribution, either in connection with an IPO or a transfer from another exchange or a quotation listing, the Exchange proposes to lower the round lot holders requirement from at least 400 round lot holders to at least 300 round lot holders. For continued distribution, the Exchange proposes to change the stockholders requirement from 400 total stockholders to 300 public stockholders. The Commission notes that Nasdaq Capital Market has similar distribution requirements, and unlike the stockholders of many operating companies, public stockholders of a SPAC have a cash conversion right in certain limited circumstances related to the SPAC's business combination.\17\ The Commission has previously stated that the conversion right is an important part of the investor protection mechanism for SPAC stockholders. --------------------------------------------------------------------------- \17\ If the tender offer option is used all shareholders must be provided an opportunity to redeem their shares for cash. See note 16, supra. --------------------------------------------------------------------------- In support of its proposal, the Exchange stated that the stockholder [[Page 32024]] requirements are important because the existence of a significant number of stockholders can be an indicia of a liquid trading market which helps to support price discovery. The Exchange further represented, in contrast to operating companies, that the securities of a SPAC trade very close to their liquidation value. The Exchange concludes that because the pricing of a SPAC is related to its liquidation value there is less reliance on stockholder requirements when listing SPACs, as opposed to operating companies, to assure appropriate price discovery. The Commission believes that the conversion right and the nature of SPAC securities pricing support the proposed amendment to treat securities of SPACs and operating companies differently. In approving the NYSE's proposal, the Commission notes that we are doing so only in the narrow context of SPACs based on the NYSE's representations that the added liquidity and price discovery that additional shareholders can provide to the market place is less important in the context of a SPAC due to the price discovery issues noted above. As NYSE also notes in its filing, once the SPAC becomes an operating company it will have to meet the higher 400 round lot holder requirement to remain listed and the 400 total stockholders continued listing standard requirement, which is the same standard for any operating company. As noted earlier, the Exchange proposed to make a number of technical amendments. The Commission finds these technical changes should clarify the Exchange's rules, as well as help to avoid confusion on which continued distribution standards apply, and are consistent with the requirements of the Act. Based on the foregoing, the Commission finds that the proposed changes to SPAC listing standards are consistent with the requirements of the Act. V. Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 2 The Commission finds good cause, pursuant to Section 19(b)(2) of the Act,\18\ for approving the proposed rule change, as modified by Amendment No. 2, prior to the 30th day after publication of Amendment No. 2 in the Federal Register. Amendment No. 2 revises the proposed continued listing distribution standards from a requirement of 300 total stockholders to a requirement of 300 public stockholders, specifies that Section 802.01A does not apply to SPACs, defines the term ``public stockholders'', and corrects typographical errors. The Commission notes that the other changes proposed in the rule change are not being amended and was subject to a full notice-and-comment period and no comments were received.\19\ The revisions in Amendment No. 2 align the proposal more closely to Nasdaq Capital Market with respect to the public stockholders continued distribution requirement and definition of the term, adds clarity to the proposal, and does not raise any novel regulatory concerns. Accordingly, the Commission finds that good cause exists to approve the proposal, as modified by Amendment No. 2, on an accelerated basis. --------------------------------------------------------------------------- \18\ 15 U.S.C. 78s(b)(2). \19\ See note 6, supra. --------------------------------------------------------------------------- VI. Conclusion It is therefore ordered that pursuant to Section 19(b)(2) of the Act \20\ that the proposed rule change, as modified by Amendment No. 2, (SR-NYSE-2017-11) be, and hereby is, approved. --------------------------------------------------------------------------- \20\ Id. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. \21\ Eduardo A. Aleman, Assistant Secretary. --------------------------------------------------------------------------- \21\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- [FR Doc. 2017-14430 Filed 7-10-17; 8:45 am] BILLING CODE 8011-01-P
![32022 Federal Register / Vol. 82, No. 131 / Tuesday, July 11, 2017 / Notices
www.prc.gov, Docket Nos. MC2017–154, publishing this notice of Amendment C. Proposed Changes to Total
CP2017–218. No. 2 and approving the proposed rule Stockholders in Continued Listing
Stanley F. Mires,
change, as modified by Amendment No. Standards
2, on an accelerated basis.
Attorney, Federal Compliance. NYSE Manual Section 802.01B sets
[FR Doc. 2017–14421 Filed 7–10–17; 8:45 am] II. Description of the Proposal, as forth the continued listing standards
BILLING CODE 7710–12–P Modified by Amendment No. 2 that apply to SPACs. Currently, a SPAC
A. General Background on SPACs is deemed below the continued listing
standards if, among other things, the
SECURITIES AND EXCHANGE A SPAC is a special purpose company SPAC’s total number of stockholders is
COMMISSION that raises capital in an initial public less than 400. The Exchange proposes to
[Release No. 34–81079; File No. SR–NYSE– offering (‘‘IPO’’) to enter into future change this continued distribution
2017–11] undetermined business combinations requirement to 300 public
through mergers, capital stock stockholders.9 In connection with the
Self-Regulatory Organizations; New exchanges, assets acquisitions, stock amendment, the Exchange proposes to
York Stock Exchange LLC; Notice of purchases, reorganizations or similar define ‘‘public stockholders’’ to exclude
Filing of Amendment No. 2 and Order business combinations with one or more holders that are directors, officers, or
Granting Accelerated Approval of a operating businesses or assets. The their immediate families and holders of
Proposed Rule Change, as Modified by Exchange represented that in an IPO, a other concentrated holdings of 10% or
Amendment No. 2, to Amend Listing SPAC typically sells units consisting of more.10
Standards for Special Purpose one share of common stock and one or
Acquisition Companies to Modify the more warrants (or fraction of a warrant) D. Technical Changes
Initial and Continued Distribution to purchase common stocks. The units
Requirements The Exchange also has proposed four
are separable at some point after the
technical changes to its initial and
July 5, 2017. IPO. The Exchange also noted that
management of the SPAC typically continued listing standards on SPACs.
I. Introduction receives a percentage of the equity at the First, the Exchange proposed to
outset and may be required to purchase consolidate the SPAC initial listing
On March 20, 2017, the New York
Stock Exchange LLC (‘‘NYSE’’ or additional shares in a private placement standards in Section 102.06 of the
‘‘Exchange’’) filed with the Securities at the time of the IPO. Due to their Manual, rather than referring to Section
and Exchange Commission different structure, SPACs do not have 102.01A of the Manual, which applies
(‘‘Commission’’), pursuant to Section any prior financial history, at the time for operating companies. Second, the
19(b)(1) of the Securities Exchange Act of their listing, like operating Exchange proposed to move a sentence
of 1934 (‘‘Act’’) 1 and Rule 19b–4 companies. in Section 102.06 of the Manual that
thereunder,2 a proposed rule change to details the minimum price per share for
amend listing standards for Special B. Proposed Changes to Round Lot a SPAC at the time of initial listing from
Purpose Acquisition Companies Holders in Initial Listing Standards the end to the beginning of the same
(‘‘SPACs’’) to modify the initial and paragraph. Third, the Exchange
NYSE Manual Section 102.06 sets
continued distribution requirements, proposed to delete an incorrect
forth the initial listing standards that
and to make other minor changes. The apply to SPACs.6 Currently, in order to reference to footnote (A) that is included
proposed rule change was published for list on the Exchange, a SPAC is required following the aggregate market value
comment in the Federal Register on to meet, among other standards, initial requirement in Section 102.06 of the
April 6, 2017.3 The Commission distribution requirements including Manual.11 Finally, the Exchange
received no comments on the proposal. having at least 400 round lot holders.7 proposed to add language to the
On May 19, 2017, the Commission The Exchange proposes to lower the continued listing criteria applicable to
designated a longer period for SPACs set forth in Section 801.01B of
initial distribution requirements of
Commission action until July 5, 2017.4 the Manual clarifying that the
round lot holders from 400 to 300 for a
On May 23, 2017, NYSE filed distribution standards in Section
SPAC listing either in connection with
Amendment No. 1 to the proposal. On
an IPO or a transfer from another
June 19, 2017, NYSE withdrew 9 See Amendment No. 2, supra note 5 and
exchange or a quotation listing.8
Amendment No. 1 and filed accompanying text. As with the initial standards,
Amendment No. 2 to, among other the alternative shareholder and other distribution
total stockholders as originally proposed, specifies continued listing standards will remain unchanged.
things, revise the proposed continued that NYSE Listed Company Manual (‘‘Manual’’) 10 The Exchange represents that it primarily relies
listing distribution standard from a Section 802.01A does not apply to SPACs, defines on the beneficial ownership disclosure included in
requirement of 300 total stockholders to the term ‘‘public stockholders,’’ and corrects the issuers’ registration statements and annual
a requirement of 300 public typographical errors. Text of Amendment No. 2 is meeting proxy statements in calculating publicly
available as a comment letter to this filing. held shares and public stockholders, but also refers
stockholders.5 The Commission is 6 The Commission notes that throughout this
to other SEC filings where appropriate and its
order we have used the term ‘‘SPAC’’ or ‘‘SPACs’’, determinations are made in accordance with Rule
1 15 U.S.C. 78s(b)(1). but these terms have the same meaning as 13d-3 under the Act. The Exchange stated that this
2 17 CFR 240.19b–4. ‘‘Acquisition Company’’ or ‘‘Acquisition is its practice under all of its rules where these
3 See Securities Exchange Act Release No. 80358 Companies’’ which are the terms used for listing, calculations must be made. The Exchange also
mstockstill on DSK30JT082PROD with NOTICES
(March 31, 2017), 82 FR 16865 (April 6, 2017) and continued listing, in Section 102.06 of the stated that this is the practice of NYSE MKT and
(‘‘Notice’’). Manual. the Exchange believes that its approach is generally
4 See Securities Exchange Act Release No. 80735 7 See NYSE Manual Section 102.01A. consistent with that of the NASDAQ Stock Market.
(May 19, 2017), 82 FR 24173 (May 25, 2017) 8 The other alternative distribution criteria that 11 The Exchange also proposes correct two
(‘‘Extension’’). currently apply to transfers and quotation listings instances of a typographical error included in the
5 In Amendment No. 2, the Exchange replaced the will remain unchanged but is being moved so that original filing by adding a second ‘‘or’’ to the phrase
proposal in its entirety. Amendment No. 2, in all the criteria for listing SPACs will be contained ‘‘Number of holders of 100 shares or more or of a
addition to changing the proposed distribution in Section 102.06 of the Manual. See Notice, supra unit of trading. . .’’ in Section 102.06 of the
standard to 300 public stockholders, rather than 300 note 3 and discussion below. Manual. See Amendment No. 2.
VerDate Sep<11>2014 18:01 Jul 10, 2017 Jkt 241001 PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 E:\FR\FM\11JYN1.SGM 11JYN1](https://thefederalregister.org/doc/82_FR_32153/page/1.svg)
![32024 Federal Register / Vol. 82, No. 131 / Tuesday, July 11, 2017 / Notices
requirements are important because the stockholders’’, and corrects the Federal Register on May 25, 2017.3
existence of a significant number of typographical errors. The Commission On June 21, 2017, the Exchange filed
stockholders can be an indicia of a notes that the other changes proposed in Amendment No. 1 to the proposed rule
liquid trading market which helps to the rule change are not being amended change.4 The Commission has not
support price discovery. The Exchange and was subject to a full notice-and- received any comments on the proposed
further represented, in contrast to comment period and no comments were rule change. This order approves the
operating companies, that the securities received.19 The revisions in proposed rule change, as modified by
of a SPAC trade very close to their Amendment No. 2 align the proposal Amendment No. 1.
liquidation value. The Exchange more closely to Nasdaq Capital Market
concludes that because the pricing of a II. The Description of the Proposed
with respect to the public stockholders
SPAC is related to its liquidation value Rule Change, as Modified by
continued distribution requirement and
there is less reliance on stockholder Amendment No. 1 5
definition of the term, adds clarity to the
requirements when listing SPACs, as proposal, and does not raise any novel The Exchange proposes to list and
opposed to operating companies, to regulatory concerns. Accordingly, the trade shares (‘‘Shares’’) of the
assure appropriate price discovery. Commission finds that good cause exists GraniteShares Gold Trust (‘‘Trust’’)
The Commission believes that the to approve the proposal, as modified by under NYSE Arca Equities Rule 8.201.6
conversion right and the nature of SPAC Amendment No. 2, on an accelerated NYSE Arca Equities Rule 8.201 governs
securities pricing support the proposed basis. the listing and trading, or trading
amendment to treat securities of SPACs pursuant to unlisted trading privileges
and operating companies differently. In VI. Conclusion of Commodity-Based Trust Shares on
approving the NYSE’s proposal, the It is therefore ordered that pursuant to the Exchange.7
Commission notes that we are doing so Section 19(b)(2) of the Act 20 that the The investment objective of the Trust
only in the narrow context of SPACs proposed rule change, as modified by will be for the Shares to reflect the
based on the NYSE’s representations Amendment No. 2, (SR–NYSE–2017–11) performance of the price of gold, less
that the added liquidity and price be, and hereby is, approved. the expenses and liabilities of the Trust.
discovery that additional shareholders The Trust will issue Shares which
For the Commission, by the Division of
can provide to the market place is less Trading and Markets, pursuant to delegated represent units of fractional undivided
important in the context of a SPAC due authority. 21 beneficial interest in and ownership of
to the price discovery issues noted the Trust.
Eduardo A. Aleman,
above. As NYSE also notes in its filing, The Sponsor of the Trust is
Assistant Secretary.
once the SPAC becomes an operating GraniteShares LLC, a Delaware limited
company it will have to meet the higher [FR Doc. 2017–14430 Filed 7–10–17; 8:45 am]
liability company. The Bank of New
400 round lot holder requirement to BILLING CODE 8011–01–P
York Mellon is the trustee of the Trust
remain listed and the 400 total (‘‘Trustee’’) 8 and ICBC Standard Bank
stockholders continued listing standard
requirement, which is the same SECURITIES AND EXCHANGE 3 See Securities Exchange Act Release No. 80730
standard for any operating company. As COMMISSION (May 19, 2017), 82 FR 24180 (‘‘Notice’’).
4 In Amendment No. 1, the Exchange: (1) Clarified
noted earlier, the Exchange proposed to
[Release No. 34–81077; File No. SR– the process for Authorized Participants to surrender
make a number of technical Baskets of Shares; and (2) provided additional
amendments. The Commission finds NYSEArca–2017–55]
information regarding which futures exchanges are
these technical changes should clarify members of the Intermarket Surveillance Group
Self-Regulatory Organizations; NYSE
the Exchange’s rules, as well as help to (‘‘ISG’’).’’ Amendment No. 1 is available at: https://
Arca, Inc.; Order Approving a www.sec.gov/comments/sr-nysearca-2017-55/
avoid confusion on which continued
Proposed Rule Change, as Modified by nysearca201755-1818378-154146.pdf. Amendment
distribution standards apply, and are No. 1 is not subject to notice and comment because
Amendment No. 1 Thereto, To List and
consistent with the requirements of the it is a technical amendment that does not materially
Trade Shares of the GraniteShares
Act. Based on the foregoing, the alter the substance of the proposed rule change or
Gold Trust Under NYSE Arca Equities raise any novel regulatory issues.
Commission finds that the proposed
Rule 8.201 5 A more detailed description of the Trust and the
changes to SPAC listing standards are Shares, as well as investment risks, creation and
consistent with the requirements of the July 5, 2017. redemption procedures, NAV calculation,
Act. availability of information and fees, among other
I. Introduction things, is included in the Registration Statement,
V. Accelerated Approval of Proposed infra note 6.
Rule Change, as Modified by On March 8, 2017, NYSE Arca, Inc. 6 On January 3, 2017, the Trust submitted to the
Amendment No. 2 (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed Commission its draft registration statement on Form
with the Securities and Exchange S–1 (‘‘Registration Statement’’) under the Securities
The Commission finds good cause, Commission (‘‘Commission’’), pursuant Act of 1933 (15 U.S.C. 77a).
pursuant to Section 19(b)(2) of the to Section 19(b)(1) of the Securities 7 A ‘‘Commodity-Based Trust Share’’ is a security
Act,18 for approving the proposed rule (a) that is issued by a trust that holds a specified
Exchange Act of 1934 (‘‘Act’’) 1 and Rule commodity deposited with the trust; (b) that is
change, as modified by Amendment No. 19b–4 thereunder,2 a proposed rule issued by such trust in a specified aggregate
2, prior to the 30th day after publication change to list and trade shares minimum number in return for a deposit of a
of Amendment No. 2 in the Federal (‘‘Shares’’) of the GraniteShares Gold quantity of the underlying commodity; and (c) that,
Register. Amendment No. 2 revises the when aggregated in the same specified minimum
Trust (‘‘Trust’’) under NYSE Arca number, may be redeemed at a holder’s request by
proposed continued listing distribution
mstockstill on DSK30JT082PROD with NOTICES
Equities Rule 8.201. The proposed rule such trust which will deliver to the redeeming
standards from a requirement of 300 change was published for comment in holder the quantity of the underlying commodity.
total stockholders to a requirement of See NYSE Arca Equities Rule 8.201(c)(1).
300 public stockholders, specifies that 19 See note 6, supra.
8 The Trustee is responsible for the day-to-day
Section 802.01A does not apply to 20 Id.
administration of the Trust. The responsibilities of
the Trustee include (1) processing orders for the
SPACs, defines the term ‘‘public 21 17 CFR 200.30–3(a)(12). creation and redemption of Baskets; (2)
1 15 U.S.C. 78s(b)(1). coordinating with the Custodian the receipt and
18 15 U.S.C. 78s(b)(2). 2 17 CFR 240.19b–4. delivery of gold transferred to, or by, the Trust in
VerDate Sep<11>2014 18:01 Jul 10, 2017 Jkt 241001 PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 E:\FR\FM\11JYN1.SGM 11JYN1](https://thefederalregister.org/doc/82_FR_32153/page/3.svg)
Document Created: 2018-11-14 10:21:24
Document Modified: 2018-11-14 10:21:24
| 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 32022 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR