83 FR 2278 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Modify the Listing Requirements Related to Special Purpose Acquisition Companies Listing Standards To Reduce Round Lot Holders on Nasdaq Capital Market for Initial Listing From 300 to 150 and Eliminate Public Holders for Continued Listing From 300 to Zero, Require $5 Million in Net Tangible Assets for Initial and Continued Listing on Nasdaq Capital Market, and Impose a Deadline To Demonstrate Compliance With Initial Listing Requirements on All Nasdaq Markets Within 30 Days Following Each Business Combination
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 10 (January 16, 2018)
Federal Register Volume 83, Issue 10 (January 16, 2018)
| Page Range | 2278-2282 | |
| FR Document | 2018-00535 |
[Federal Register Volume 83, Number 10 (Tuesday, January 16, 2018)] [Notices] [Pages 2278-2282] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-00535] [[Page 2278]] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-82478; File No. SR-NASDAQ-2017-087] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Modify the Listing Requirements Related to Special Purpose Acquisition Companies Listing Standards To Reduce Round Lot Holders on Nasdaq Capital Market for Initial Listing From 300 to 150 and Eliminate Public Holders for Continued Listing From 300 to Zero, Require $5 Million in Net Tangible Assets for Initial and Continued Listing on Nasdaq Capital Market, and Impose a Deadline To Demonstrate Compliance With Initial Listing Requirements on All Nasdaq Markets Within 30 Days Following Each Business Combination January 9, 2018. I. Introduction On September 20, 2017, The NASDAQ Stock Market LLC (``Nasdaq'' 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 modify the listing requirements for Special Purpose Acquisition Companies (``SPACs'') \3\ listed on the Nasdaq Capital Market by reducing the number of round lot holders required for initial listing from 300 to 150, and eliminating the continued listing requirement for a minimum number of holders, which is also currently 300, that applies until the SPAC completes one or more business combinations.\4\ Nasdaq also proposes to require that a SPAC listed on the Nasdaq Capital Market maintain at least $5 million net tangible assets for initial and continued listing. Finally, Nasdaq is proposing to allow SPACs listed on any of its three listing tiers (Nasdaq Global Select, Nasdaq Global, and Nasdaq Capital Market) 30 days to demonstrate compliance with initial listing requirements following each business combination.\5\ --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ The Commission notes that throughout this order we have used the term ``SPAC'' or ``SPACs.'' These terms have the same meaning as ``Acquisition Company'' which is the term used by Nasdaq in its current proposed rule filing. \4\ See Nasdaq Rule IM-5101-2(b), and infra note 10 and accompanying text which describes the requirements for the value of the business combination(s). \5\ The Exchange also proposes to delete a duplicative paragraph from the rule text and alter the paragraphs formatting within certain provisions in order to enhance the rule's readability. See proposed rule text to Nasdaq Rule IM-5101-2 in Exhibit 5 to Nasdaq- 2017-087. --------------------------------------------------------------------------- The proposed rule change was published for comment in the Federal Register on October 11, 2017.\6\ On November 22, 2017, the Commission extended the time period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to approve or disapprove the proposed rule change, to January 9, 2018.\7\ The Commission received six comments on the proposal.\8\ This order institutes proceedings under Section 19(b)(2)(B) of the Act to determine whether to approve or disapprove the proposal. --------------------------------------------------------------------------- \6\ See Securities Exchange Act Release No. 81816 (October 4, 2017), 82 FR 47269 (``Notice''). \7\ See Securities Exchange Act Release No. 82142, 82 FR 56293 (November 28, 2017). \8\ See Letters to Brent J. Fields, Secretary, Commission, from Jeffrey M. Solomon, Chief Executive Officer, Cowen and Company, LLC, dated October 19, 2017 (``Cowen Letter''); Jeffrey P. Mahoney, General Counsel, Council of Institutional Investors, dated October 25, 2017 (``CII Letter''); Sean Davy, Managing Director, Capital Markets Division, SIFMA, dated October 31, 2017 (``SIFMA Letter''); Akin Gump Strauss Hauer & Feld LLP, dated November 1, 2017 (``Akin Gump Letter''); Steven Levine, Chief Executive Officer, EarlyBirdCapital, Inc., dated November 3, 2017 (``EarlyBird Letter''); and Christian O. Nagler and David A. Curtiss, Kirkland & Ellis LLP, dated November 9, 2017 (``Kirkland Letter''). --------------------------------------------------------------------------- II. Description of Proposal A. Background on SPACs A SPAC is a special purpose company whose business plan is to raise capital in an initial public offering (``IPO'') and, within a specific period of time, engage in a merger or acquisition with one or more unidentified companies. Among other things, a SPAC must keep 90% of the gross proceeds of its IPO in an escrow account through the date of a business combination.\9\ The SPAC must complete one or more business combinations, having an aggregate market value of at least 80% of the value of the deposit account at the time of the agreement to enter into the initial combination, within 36 months of the effectiveness of the IPO registration statement.\10\ Additionally, public shareholders who object to a business combination have the right to convert their common stock into a pro rata share of the funds held in escrow.\11\ Following each business combination the combined company must meet the Exchange's requirements for initial listing of an operating company, including the requirement to maintain a minimum of 300 holders.\12\ --------------------------------------------------------------------------- \9\ See Nasdaq Rule IM-5101-2(a). \10\ See Nasdaq Rule IM-5101-2(b). For purposes of this rule, in calculating the 80% value of the deposit account any deferred underwriter fees and taxes payable on the income earned on the deposit account are excluded. \11\ See Nasdaq Rule IM-5101-2(d) & Nasdaq Rule IM-5101-2(e). If a shareholder vote is taken however, under Nasdaq Rule IM-5101-2(d), the right of shareholders voting against a business combination to redeem their shares for cash may be subject to a limit established by the SPAC (that can be set no lower than 10% of the shares sold in the IPO). \12\ See Nasdaq Rule IM-5101-2(d) & Nasdaq Rule IM-5101-2(e) and Nasdaq Rules 5505(a)(3) and 5550(a)(3). --------------------------------------------------------------------------- B. Description of Proposed Changes to SPAC Listing Standards The Exchange has proposed to reduce the number of round lot holders required for SPACs initially listing on the Nasdaq Capital Market from 300 to 150.\13\ The Exchange also proposed to completely eliminate the current continued listing requirement that there be a minimum of 300 holders until such time as the SPAC completes one or more business combinations.\14\ In support of this proposal, as set forth in more detail in the Notice, Nasdaq states that SPACs often have difficulty demonstrating compliance with these initial and continued listing standards. Based on conversations with market participants, Nasdaq believes this is due to the unique nature of SPACs, and asserts that this limits the number of interested retail investors and encourages owners to hold their shares until an acquisition is announced, which can be as long as three years after the IPO. Nasdaq believes that these same features limit the benefit to investors of having a shareholder requirement, the purpose of which, according to Nasdaq, is ``to help ensure that a stock has an investor following and liquid market necessary for trading.'' \15\ Among other things, Nasdaq asserted that ``the potential for distorted prices occurring as a result of there being few shareholders or illiquidity is less of a concern for [a SPAC's] investors'' because, in the period prior to the business [[Page 2279]] combination, ``the value of [a SPAC] is based primarily on the value of the funds it held in trust,'' and ``shareholders have the right to redeem their shares for a pro rata share of that trust in conjunction with the business combination.'' \16\ As a result, according to Nasdaq, SPACs generally ``have historically traded close to the value in the trust, even when they have had few shareholders, which suggests that their lack of shareholders has not resulted in distorted prices and the associated concerns.'' \17\ Nasdaq notes that SPACs ``must undergo a transformative transaction within 36 months of listing, at which time they must meet all listing requirements, including the shareholder requirement.'' \18\ In Nasdaq's view, ``[t]his provides an additional protection to shareholders, assuring that any liquidity issues are only temporary.'' \19\ Finally, Nasdaq observes that ``it can be difficult for a company, once listed, to obtain evidence demonstrating the number of its shareholders because many accounts are held in street name'' and that this process ``is particularly burdensome for [SPACs] because most operating expenses are typically borne by the [SPAC's] sponsors due to the requirement that the gross proceeds of the initial public offering remain in the trust account until the closing of the business combination.'' \20\ --------------------------------------------------------------------------- \13\ See proposed rule text to Nasdaq Rule 5505(a)(3) in Exhibit 5 to Nasdaq-2017-087. \14\ See proposed rule text to Nasdaq Rule 5550(a)(3) in Exhibit 5 to Nasdaq-2017-087. Nasdaq Rule 5550(a)(3) currently requires 300 public holders for continued listing of a primary equity security listed on Nasdaq Capital Markets. ``Public Holders'' is defined to mean holders of a security that includes both beneficial holders and holders of record, but does not include any holder who is, either directly or indirectly, an executive officer, director, or the beneficial holder of more than 10% of the total shares outstanding. See Nasdaq Rule 5005(a)(35). \15\ See Notice at 47269. \16\ See Notice at 47269. See also, supra note 11, that refer to possible limits on the amount of shares that can be redeemed on a pro rata basis. \17\ See Notice at 47269. \18\ See Notice at 47269-70. \19\ See Notice at 47270. \20\ Id. --------------------------------------------------------------------------- The Exchange also proposed to add a new requirement for SPACs to list, and remain listed, on the Nasdaq Capital Market that would require SPACs to maintain at least $5 million in net tangible assets.\21\ This requirement is being proposed by Nasdaq as an alternative exception to the Commission's penny stock rule, Rule 3a51-1 under the Act, because Nasdaq's proposed changes to the minimum number of holders would result in SPACs listed on the Nasdaq Capital Market no longer qualifying for the current penny stock rule exception that requires listed companies to have 300 round lot holders.\22\ The $5 million net tangible assets requirement is an alternative exception to the penny stock rule, and ``Nasdaq believes that all [SPACs] currently listed satisfy this alternative.'' \23\ The Exchange stated that it will monitor listed SPACs for compliance with this requirement and, to assist broker-dealers in complying with the penny stock rule, will publish on Nasdaq's website a daily list of any SPAC that no longer meets the net tangible assets requirement, and which does not satisfy any other penny stock exception. Further, if a SPAC does not meet the net tangible assets requirement, the Exchange would initiate delisting proceedings under the Nasdaq Rule 5800 Series.\24\ --------------------------------------------------------------------------- \21\ Net Tangible Assets is defined as total assets less intangible assets and liabilities. See proposed Nasdaq Rule IM-5101- 2(f). Under the proposal, if a company is listed prior to approval of the Exchange's proposal it will not need to satisfy this net tangible asset requirement if it has a least 300 public holders. \22\ Rule 15g-1 through 15g-9 under the Act impose certain disclosure and additional requirements on brokers and dealers when effecting transactions in penny stocks. See 17 CFR 240.15g-1 to 15g- 9. Rule 3a51-1 includes an exception from the definition of penny stock for securities registered on a national securities exchange that has initial listing standards, among others, that requires at least 300 round lot holders. Rule 3a51-1 also has an exception from the penny stock definition if a company has $5 million in net tangible assets. See 17 CFR 240.3a51-1(a) and 17 CFR 240.3a51-1(g). \23\ See Notice at 47270 in footnote 16. \24\ The SPAC is able to request review of the Staff Delisting Determination which would allow it to remain listed for a maximum of 180 calendar days. See Nasdaq Rule 5815. The Exchange states that this limitation will only allow for a SPAC to remain listed for a short period of time and that the process would provide notice to the public. See Notice at 47271. --------------------------------------------------------------------------- Finally, the Exchange proposed to add a requirement, applicable to all of its listing tiers (Nasdaq Global Select, Nasdaq Global, and Nasdaq Capital Market),that a listed SPAC must demonstrate that it meets all initial listing requirements within 30 days following each business combination. The Exchange notes that, under its existing rules, following a business combination with a SPAC, ``the resulting company must satisfy all initial listing requirements.'' \25\ The Exchange takes the position that ``[t]he rule does not provide a timetable for the company to demonstrate that it satisfies those requirements,'' so ``Nasdaq proposes to codify that a company must demonstrate that it meets the initial listing requirements within 30 days following a business combination.'' \26\ If the SPAC has not demonstrated that it meets all of the initial listing requirements within 30 days following a business combination, then Nasdaq staff would issue a Delisting Determination under the Nasdaq Rule 5800 Series.\27\ --------------------------------------------------------------------------- \25\ See Notice at 47271. See also Nasdaq Rule IM-5101-2 (d). \26\ See Notice at 47271. \27\ See Notice at 47271. Nasdaq also proposed other non- substantive changes in its proposal. See also supra note 5. --------------------------------------------------------------------------- III. Summary of Comments The Commission received six comment letters on the proposal.\28\ Five commenters expressed support for the proposed rule change,\29\ and one commenter did not.\30\ --------------------------------------------------------------------------- \28\ See supra note 8. \29\ See Cowan Letter at 1; CII Letter at 4; SIFMA Letter at 2; Akin Gump Letter at 3; EarlyBird Letter at 1; Kirkland Letter at 1. \30\ See CII Letter at 1 (requesting more fulsome information and analysis on both proposed holder changes and the proposal to adopt as a listing standard the net tangible assets penny stock exemption). --------------------------------------------------------------------------- The commenters supporting the proposed rule change generally discussed the importance of SPACs as an alternative to a traditional IPO as a path for a company to go public,\31\ and expressed the view that the proposal would reduce burdens on SPACs and facilitate their ability to go public, without undermining investor protections.\32\ With respect to the proposed changes to the required minimum number of holders, two commenters indicated that reducing these requirements would lessen the costs and administrative burdens on SPACs, which operate with limited funds not held in escrow, to monitor the number of holders.\33\ Two commenters asserted that SPACs generally are marketed to institutions, and not retail investors, so that the proposed changes would not harm retail investors.\34\ Another commenter expressed the view that it can be difficult for SPACs to meet the existing minimum number of holders requirements ``due to the high demand from institutional investors in the IPO allocation process.'' \35\ Two commenters believed that, given the unique characteristics of SPACs (e.g., the requirement to complete a business combination within a specified time period, the right of shareholders to a pro rata share of the funds held in escrow, and the tendency to hold shares until a business combination is announced), the minimum number of holder [[Page 2280]] requirements did not provide significant investor protection benefits.\36\ --------------------------------------------------------------------------- \31\ See Cowan Letter at 1; SIFMA Letter at 2 (stating 20 percent of public offerings in the first three quarters of 2017 came from SPACs); EarlyBird Letter at 1; Kirkland Letter at 1. \32\ See SIFMA Letter at 2; EarlyBird Letter at 1; Akin Gump Letter at 3. \33\ See SIFMA Letter at 3 (stating the proposed change would ``reduce costs and burdens on [SPACs]'' which ``have limited funds not held in escrow''); Akin Gump Letter at 2 (arguing the holder requirement ``creates significant administrative burden on SPACs'' which are ``operating with limited funds outside of the trust account''). \34\ See Cowen Letter at 1 and EarlyBird Letter at 1. \35\ See Akin Gump Letter at 2. \36\ See SIFMA Letter at 3 (stating the pro rata right to funds held in the escrow account, the limited amount of time that the SPAC has to complete a business combination and the unique trading fundamentals indicate why a lower or no holder requirement should be required). See also Akin Gump Letter at 2 (asserting that ``SPAC investors have further protection from illiquidity because a SPAC must undergo a business combination within the allotted time period or liquidate and return the pro rata share of the trust assets to public investors.''). --------------------------------------------------------------------------- Two commenters specifically supported the $5 million net tangible assets requirement, noting that this requirement should help SPACs avoid being designated a ``penny stock.'' \37\ One commenter noted the proposal by Nasdaq to publish a daily list of SPACs that do not meet the requirement for an exception to the penny stock rules will ensure proper notice is provided to market participants.\38\ --------------------------------------------------------------------------- \37\ See SIFMA Letter at 4; and Akin Gump Letter at 3. \38\ See Akin Gump Letter at 3. --------------------------------------------------------------------------- Finally, three of the commenters supporting the proposed rule change also specifically supported the proposal to establish a 30-day period for a listed SPAC to demonstrate compliance with initial listing requirements following a business combination.\39\ One commenter believed that this ``strikes a balance of providing the company with necessary time to manage its limited resources while protecting investors in the same way [Nasdaq] protects investors in operating companies that are conducting their initial public offerings.'' \40\ Another commenter expressed the view that the 30-day compliance period ``would be important to allow [SPACs] time to satisfy the listing requirements after the closing of an initial business combination,'' given ``the uncertainty in stock ownership that redemption elections can bring.'' \41\ --------------------------------------------------------------------------- \39\ See SIFMA Letter at 4; Akin Gump Letter at 3; Kirkland Letter at 1. \40\ See SIFMA Letter at 4. \41\ See Kirkland Letter at 1. --------------------------------------------------------------------------- One commenter did not support the proposed rule change, noting that ``it does not provide sufficient information for us to make a determination as to whether our members and the capital markets would benefit from the proposed rule changes.'' \42\ Areas where this commenter believed more evidence was necessary include: (1) The assertion that price distortions or illiquidity are a lesser concern for SPACs; (2) the analysis that SPACs trade close to the redemption value of the assets held in trust; (3) the number of companies constrained by existing listing standards; and (4) the difficulties demonstrating compliance with existing listing standards, including determining the number of holders.\43\ --------------------------------------------------------------------------- \42\ See CII Letter at 1. \43\ See CII Letter at 2. This commenter specifically indicated, however, that it did support the proposal to allow listed companies 30 days to demonstrate compliance with the initial listing standards after the consummation of the SPAC's business combination. --------------------------------------------------------------------------- IV. Proceedings To Determine Whether To Approve or Disapprove SR- NASDAQ-2017-087 and Ground for Disapproval Under Consideration The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act to determine whether the proposal should be approved or disapproved.\44\ Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposal, as discussed below. Institution of disapproval proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. --------------------------------------------------------------------------- \44\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- Pursuant to Section 19(b)(2)(B) of the Act, the Commission is providing notice of the grounds for disapproval under consideration. The Commission is instituting proceedings to allow for additional analysis and input concerning the proposed rule change's consistency with the Act \45\ and, in particular, with Section 6(b)(5) of the Act, which requires, among other things, that the rules of a national securities exchange be 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 free and open market and a national market system, and, in general, to protect investors and the public interest.\46\ --------------------------------------------------------------------------- \45\ 15 U.S.C. 78f(b)(5). \46\ Id. --------------------------------------------------------------------------- The Commission has consistently recognized the importance of the minimum number of holders and other similar requirements in exchange listing standards.\47\ Among other things, such listing standards help ensure that exchange listed companies have sufficient public float, investor base, and trading interest to provide the depth and liquidity necessary to promote fair and orderly markets.\48\ --------------------------------------------------------------------------- \47\ For example, the Commission has repeatedly stated in approving exchange listing requirements, including Nasdaq's original SPAC listing standards, that the development and enforcement of adequate standards governing the listing of securities on an exchange is an activity of critical importance to financial markets and the investing public. See e.g., Securities Exchange Act Release No. 57785 (May 6, 2008), 73 FR 27597 (May 13, 2008) (stating also that the distribution standards, which include exchange holder requirements, ``. . . should help to ensure that the [SPACs] securities have sufficient public float, investor base, and liquidity to promote fair and orderly markets''); Securities Exchange Act Release No. 58228 (July 25, 2008), 73 FR 44794 (July 31, 2008). \48\ Id. The Commission has further stated that once a security has been approved for initial listing, maintenance criteria allow an exchange to monitor the status and trading characteristics of that issue to ensure that it continues to meet the exchange's standards for market depth and liquidity so that fair and orderly markets can be maintained. See e.g., Securities Exchange Act Release No. 57785 (May 6, 2008), 73 FR 27597 (May 13, 2008) also stating that the continued listing standards for SPACs, which include the holder requirements, protect investors and promote fair and orderly markets. --------------------------------------------------------------------------- Nasdaq proposes to lower the minimum number of holders required for initial listing of a SPAC from 300 to 150, and to eliminate the continued listing requirement to have a minimum number of holders until the SPAC completes a business acquisition. In support of its proposal, Nasdaq asserts that SPACs often have difficulty demonstrating compliance with the minimum number of holders requirements because many accounts are held in street name, so that this information must be obtained from broker-dealers and other third parties. Nasdaq states that this effort is particularly burdensome for SPACs because most of the expenses incurred in determining the number of holders must be borne by the SPAC's sponsors. The Commission notes that the vast majority of shares of most listed companies are held in street name, and it is not clear from Nasdaq's proposal how the burdens on SPACs in determining the number of holders are different than for listed companies generally, other than the fact that the SPAC's sponsor bears most of the costs. In addition, as noted by a commenter, it is not clear from Nasdaq's proposal the extent to which SPACs actually have had difficulties complying with the existing minimum number of holders requirements.\49\ --------------------------------------------------------------------------- \49\ See supra note 43. --------------------------------------------------------------------------- Nasdaq also takes the position that the benefits of the minimum number of holders requirements are less with SPACs because their value is based primarily on the value of the funds held in trust. Nasdaq notes that SPACs historically have traded close to the value of the funds held in trust, and concludes that a lack of shareholders has not resulted in distorted prices and the associated concerns. The Commission, however, does not believe it is clear from Nasdaq's proposal how these historic trading patterns bear on the role of the minimum number of holders requirements in maintaining fair and orderly markets, particularly since [[Page 2281]] Nasdaq's observations were made while the current minimum number of holder requirements were in place. Finally, Nasdaq proposes to allow a listed SPAC an additional 30 days following a business combination to demonstrate compliance with all initial listing standards, including the holder requirement. Nasdaq acknowledges that, following a business combination, the SPAC should meet all applicable listing requirements for operating companies, including the requirement to maintain a minimum of 300 holders on an initial and continued basis. Nasdaq takes the position that it is proposing the 30-day transition period because the current rule ``does not provide a timetable'' for the SPAC to demonstrate compliance. The Commission notes that initial listing standards, absent an explicit exception, apply upon initial listing. Further, the Commission notes that, because the same number of holders today (i.e., 300) applies to SPACs listed on Nasdaq before and after a business combination,\50\ the issue of a post-combination transition period has not been raised. Nasdaq proposes to eliminate the continued listing requirement for SPACs, so that a listed SPAC with very few holders may need to have at least 300 holders a short time after a business combination. The Commission does not believe it is clear from Nasdaq's proposal that such a structure is workable, or how a listed SPAC would ensure it is in a position to sufficiently increase its number of holders. --------------------------------------------------------------------------- \50\ The Commission recognizes that the initial holder requirement is 300 round lot holders while the continued listing requirement is 300 public holders. Therefore, when a SPAC transitions to listing as an operating company after a business combination, it should have at least 300 public holders, many of which may also be round lot holders. --------------------------------------------------------------------------- V. Commission's Solicitation of Comments The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal. In particular, the Commission invites the written views of interested persons concerning whether the proposal is consistent with Section 6(b)(5), or any other provision of the Act, or the rules and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b-4, any request for an opportunity to make an oral presentation.\51\ --------------------------------------------------------------------------- \51\ Section 19(b)(2) of the Exchange Act, as amended by the Securities Act Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the Commission flexibility to determine what type of proceeding--either oral or notice and opportunity for written comments--is appropriate for consideration of a particular proposal by a self-regulatory organization. See Securities Act Amendments of 1975, Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). --------------------------------------------------------------------------- Interested persons are invited to submit written data, views, and arguments regarding whether the proposal should be approved or disapproved by February 6, 2018. Any person who wishes to file a rebuttal to any other person's submission must file that rebuttal by February 20, 2018. The Commission asks that commenters address the sufficiency of the Exchange's statements in support of the proposal which are set forth in the Notice, in addition to any other comments they may wish to submit about the proposed rule change. In particular, the Commission seeks comment, including where relevant, any specific data, statistics, or studies, on the following: 1. Would the proposal ensure that a sufficient liquid market exists for the shares of SPACs on the Nasdaq Capital Market? Why or why not? 2. Without any continued listing holder requirement, would the shares of SPACs still trade close to their redemption value, as the Exchange has stated? If yes, would that trading pattern continue after an announcement of a business combination? 3. Without any continued listing holder requirement, could shares of SPACs be more prone to manipulation, either post-IPO or at the time of the business combination announcement (but before consummation of the business combination)? 4. Has the Exchange demonstrated with specific data, analysis, and studies that the shares of SPACs trade consistently as stated in the proposal, and does the analysis support the proposed reductions in the holder initial and continued listing standards? If not, what data should be reviewed and analyzed? For example, in the Exchange's examination of SPACs that were below the continued public holder listing requirement, how few shareholders did these SPACs have? 5. The Exchange asserted that it is time consuming and burdensome for a SPAC to obtain a list of shareholders to demonstrate the number of holders, because many shares are held in street name with broker- dealers. The Commission notes that the process of obtaining number of shareholders is similar for all listed companies. Do commenters think SPACs are particularly burdened by this process and the costs? Is the fact the costs are usually borne by the sponsors relevant? 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-NASDAQ-2017-087 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-2017-087. 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 (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 website viewing and printing in the Commission's Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; 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-NASDAQ-2017-087 and should be submitted on or before February 6, 2018. [[Page 2282]] For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\52\ --------------------------------------------------------------------------- \52\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-00535 Filed 1-12-18; 8:45 am] BILLING CODE 8011-01-P
![2278 Federal Register / Vol. 83, No. 10 / Tuesday, January 16, 2018 / Notices
SECURITIES AND EXCHANGE requirements following each business of the funds held in escrow.11 Following
COMMISSION combination.5 each business combination the
The proposed rule change was combined company must meet the
[Release No. 34–82478; File No. SR–
published for comment in the Federal Exchange’s requirements for initial
NASDAQ–2017–087] Register on October 11, 2017.6 On listing of an operating company,
November 22, 2017, the Commission including the requirement to maintain a
Self-Regulatory Organizations; The extended the time period within which minimum of 300 holders.12
NASDAQ Stock Market LLC; Order to approve the proposed rule change,
disapprove the proposed rule change, or B. Description of Proposed Changes to
Instituting Proceedings To Determine
institute proceedings to determine SPAC Listing Standards
Whether To Approve or Disapprove a
Proposed Rule Change To Modify the whether to approve or disapprove the The Exchange has proposed to reduce
Listing Requirements Related to proposed rule change, to January 9, the number of round lot holders
Special Purpose Acquisition 2018.7 The Commission received six required for SPACs initially listing on
Companies Listing Standards To comments on the proposal.8 This order the Nasdaq Capital Market from 300 to
Reduce Round Lot Holders on Nasdaq institutes proceedings under Section 150.13 The Exchange also proposed to
Capital Market for Initial Listing From 19(b)(2)(B) of the Act to determine completely eliminate the current
300 to 150 and Eliminate Public whether to approve or disapprove the continued listing requirement that there
Holders for Continued Listing From proposal. be a minimum of 300 holders until such
300 to Zero, Require $5 Million in Net II. Description of Proposal time as the SPAC completes one or more
Tangible Assets for Initial and business combinations.14 In support of
Continued Listing on Nasdaq Capital A. Background on SPACs this proposal, as set forth in more detail
Market, and Impose a Deadline To A SPAC is a special purpose company in the Notice, Nasdaq states that SPACs
Demonstrate Compliance With Initial whose business plan is to raise capital often have difficulty demonstrating
Listing Requirements on All Nasdaq in an initial public offering (‘‘IPO’’) and, compliance with these initial and
Markets Within 30 Days Following within a specific period of time, engage continued listing standards. Based on
Each Business Combination in a merger or acquisition with one or conversations with market participants,
more unidentified companies. Among Nasdaq believes this is due to the
January 9, 2018. other things, a SPAC must keep 90% of unique nature of SPACs, and asserts that
I. Introduction the gross proceeds of its IPO in an this limits the number of interested
escrow account through the date of a retail investors and encourages owners
On September 20, 2017, The business combination.9 The SPAC must to hold their shares until an acquisition
NASDAQ Stock Market LLC (‘‘Nasdaq’’ complete one or more business is announced, which can be as long as
or ‘‘Exchange’’) filed with the Securities combinations, having an aggregate three years after the IPO. Nasdaq
and Exchange Commission market value of at least 80% of the value believes that these same features limit
(‘‘Commission’’), pursuant to Section of the deposit account at the time of the the benefit to investors of having a
19(b)(1) of the Securities Exchange Act agreement to enter into the initial shareholder requirement, the purpose of
of 1934 (‘‘Act’’) 1 and Rule 19b–4 combination, within 36 months of the which, according to Nasdaq, is ‘‘to help
thereunder,2 a proposed rule change to effectiveness of the IPO registration ensure that a stock has an investor
modify the listing requirements for statement.10 Additionally, public following and liquid market necessary
Special Purpose Acquisition Companies shareholders who object to a business for trading.’’ 15 Among other things,
(‘‘SPACs’’) 3 listed on the Nasdaq combination have the right to convert Nasdaq asserted that ‘‘the potential for
Capital Market by reducing the number their common stock into a pro rata share distorted prices occurring as a result of
of round lot holders required for initial there being few shareholders or
listing from 300 to 150, and eliminating 5 The Exchange also proposes to delete a
illiquidity is less of a concern for [a
the continued listing requirement for a duplicative paragraph from the rule text and alter SPAC’s] investors’’ because, in the
the paragraphs formatting within certain provisions
minimum number of holders, which is in order to enhance the rule’s readability. See period prior to the business
also currently 300, that applies until the proposed rule text to Nasdaq Rule IM–5101–2 in
SPAC completes one or more business Exhibit 5 to Nasdaq–2017–087. 11 See Nasdaq Rule IM–5101–2(d) & Nasdaq Rule
combinations.4 Nasdaq also proposes to 6 See Securities Exchange Act Release No. 81816 IM–5101–2(e). If a shareholder vote is taken
(October 4, 2017), 82 FR 47269 (‘‘Notice’’). however, under Nasdaq Rule IM–5101–2(d), the
require that a SPAC listed on the 7 See Securities Exchange Act Release No. 82142, right of shareholders voting against a business
Nasdaq Capital Market maintain at least 82 FR 56293 (November 28, 2017). combination to redeem their shares for cash may be
$5 million net tangible assets for initial 8 See Letters to Brent J. Fields, Secretary, subject to a limit established by the SPAC (that can
and continued listing. Finally, Nasdaq is Commission, from Jeffrey M. Solomon, Chief be set no lower than 10% of the shares sold in the
Executive Officer, Cowen and Company, LLC, dated IPO).
proposing to allow SPACs listed on any 12 See Nasdaq Rule IM–5101–2(d) & Nasdaq Rule
October 19, 2017 (‘‘Cowen Letter’’); Jeffrey P.
of its three listing tiers (Nasdaq Global Mahoney, General Counsel, Council of Institutional IM–5101–2(e) and Nasdaq Rules 5505(a)(3) and
Select, Nasdaq Global, and Nasdaq Investors, dated October 25, 2017 (‘‘CII Letter’’); 5550(a)(3).
Capital Market) 30 days to demonstrate Sean Davy, Managing Director, Capital Markets 13 See proposed rule text to Nasdaq Rule
compliance with initial listing Division, SIFMA, dated October 31, 2017 (‘‘SIFMA 5505(a)(3) in Exhibit 5 to Nasdaq–2017–087.
Letter’’); Akin Gump Strauss Hauer & Feld LLP, 14 See proposed rule text to Nasdaq Rule
dated November 1, 2017 (‘‘Akin Gump Letter’’); 5550(a)(3) in Exhibit 5 to Nasdaq–2017–087.
1 15 U.S.C. 78s(b)(1). Steven Levine, Chief Executive Officer, Nasdaq Rule 5550(a)(3) currently requires 300
2 17 CFR 240.19b–4. EarlyBirdCapital, Inc., dated November 3, 2017 public holders for continued listing of a primary
daltland on DSKBBV9HB2PROD with NOTICES
3 The Commission notes that throughout this (‘‘EarlyBird Letter’’); and Christian O. Nagler and equity security listed on Nasdaq Capital Markets.
order we have used the term ‘‘SPAC’’ or ‘‘SPACs.’’ David A. Curtiss, Kirkland & Ellis LLP, dated ‘‘Public Holders’’ is defined to mean holders of a
These terms have the same meaning as ‘‘Acquisition November 9, 2017 (‘‘Kirkland Letter’’). security that includes both beneficial holders and
Company’’ which is the term used by Nasdaq in its 9 See Nasdaq Rule IM–5101–2(a). holders of record, but does not include any holder
current proposed rule filing. 10 See Nasdaq Rule IM–5101–2(b). For purposes who is, either directly or indirectly, an executive
4 See Nasdaq Rule IM–5101–2(b), and infra note of this rule, in calculating the 80% value of the officer, director, or the beneficial holder of more
10 and accompanying text which describes the deposit account any deferred underwriter fees and than 10% of the total shares outstanding. See
requirements for the value of the business taxes payable on the income earned on the deposit Nasdaq Rule 5005(a)(35).
combination(s). account are excluded. 15 See Notice at 47269.
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![Federal Register / Vol. 83, No. 10 / Tuesday, January 16, 2018 / Notices 2279
combination, ‘‘the value of [a SPAC] is tangible assets requirement is an III. Summary of Comments
based primarily on the value of the alternative exception to the penny stock
funds it held in trust,’’ and rule, and ‘‘Nasdaq believes that all The Commission received six
‘‘shareholders have the right to redeem [SPACs] currently listed satisfy this comment letters on the proposal.28 Five
their shares for a pro rata share of that alternative.’’ 23 The Exchange stated that commenters expressed support for the
trust in conjunction with the business it will monitor listed SPACs for proposed rule change,29 and one
combination.’’ 16 As a result, according compliance with this requirement and, commenter did not.30
to Nasdaq, SPACs generally ‘‘have to assist broker-dealers in complying The commenters supporting the
historically traded close to the value in with the penny stock rule, will publish proposed rule change generally
the trust, even when they have had few discussed the importance of SPACs as
on Nasdaq’s website a daily list of any
shareholders, which suggests that their an alternative to a traditional IPO as a
SPAC that no longer meets the net
lack of shareholders has not resulted in
tangible assets requirement, and which path for a company to go public,31 and
distorted prices and the associated
does not satisfy any other penny stock expressed the view that the proposal
concerns.’’ 17 Nasdaq notes that SPACs
‘‘must undergo a transformative exception. Further, if a SPAC does not would reduce burdens on SPACs and
transaction within 36 months of listing, meet the net tangible assets facilitate their ability to go public,
at which time they must meet all listing requirement, the Exchange would without undermining investor
requirements, including the shareholder initiate delisting proceedings under the protections.32 With respect to the
requirement.’’ 18 In Nasdaq’s view, Nasdaq Rule 5800 Series.24 proposed changes to the required
‘‘[t]his provides an additional protection Finally, the Exchange proposed to add minimum number of holders, two
to shareholders, assuring that any a requirement, applicable to all of its commenters indicated that reducing
liquidity issues are only temporary.’’ 19 listing tiers (Nasdaq Global Select, these requirements would lessen the
Finally, Nasdaq observes that ‘‘it can be Nasdaq Global, and Nasdaq Capital costs and administrative burdens on
difficult for a company, once listed, to Market),that a listed SPAC must SPACs, which operate with limited
obtain evidence demonstrating the demonstrate that it meets all initial funds not held in escrow, to monitor the
number of its shareholders because number of holders.33 Two commenters
listing requirements within 30 days
many accounts are held in street name’’ asserted that SPACs generally are
and that this process ‘‘is particularly following each business combination.
The Exchange notes that, under its marketed to institutions, and not retail
burdensome for [SPACs] because most investors, so that the proposed changes
operating expenses are typically borne existing rules, following a business
combination with a SPAC, ‘‘the would not harm retail investors.34
by the [SPAC’s] sponsors due to the Another commenter expressed the view
requirement that the gross proceeds of resulting company must satisfy all
initial listing requirements.’’ 25 The that it can be difficult for SPACs to meet
the initial public offering remain in the
Exchange takes the position that ‘‘[t]he the existing minimum number of
trust account until the closing of the
rule does not provide a timetable for the holders requirements ‘‘due to the high
business combination.’’ 20
The Exchange also proposed to add a company to demonstrate that it satisfies demand from institutional investors in
new requirement for SPACs to list, and those requirements,’’ so ‘‘Nasdaq the IPO allocation process.’’ 35 Two
remain listed, on the Nasdaq Capital proposes to codify that a company must commenters believed that, given the
Market that would require SPACs to demonstrate that it meets the initial unique characteristics of SPACs (e.g.,
maintain at least $5 million in net listing requirements within 30 days the requirement to complete a business
tangible assets.21 This requirement is following a business combination.’’ 26 If combination within a specified time
being proposed by Nasdaq as an the SPAC has not demonstrated that it period, the right of shareholders to a pro
alternative exception to the meets all of the initial listing rata share of the funds held in escrow,
Commission’s penny stock rule, Rule requirements within 30 days following and the tendency to hold shares until a
3a51–1 under the Act, because Nasdaq’s business combination is announced),
a business combination, then Nasdaq
proposed changes to the minimum the minimum number of holder
staff would issue a Delisting
number of holders would result in
SPACs listed on the Nasdaq Capital Determination under the Nasdaq Rule
28 See supra note 8.
Market no longer qualifying for the 5800 Series.27 29 See Cowan Letter at 1; CII Letter at 4; SIFMA
current penny stock rule exception that Letter at 2; Akin Gump Letter at 3; EarlyBird Letter
requires listed companies to have 300 the definition of penny stock for securities at 1; Kirkland Letter at 1.
registered on a national securities exchange that has 30 See CII Letter at 1 (requesting more fulsome
round lot holders.22 The $5 million net initial listing standards, among others, that requires information and analysis on both proposed holder
at least 300 round lot holders. Rule 3a51–1 also has changes and the proposal to adopt as a listing
16 See Notice at 47269. See also, supra note 11,
an exception from the penny stock definition if a standard the net tangible assets penny stock
that refer to possible limits on the amount of shares company has $5 million in net tangible assets. See exemption).
that can be redeemed on a pro rata basis. 17 CFR 240.3a51–1(a) and 17 CFR 240.3a51–1(g). 31 See Cowan Letter at 1; SIFMA Letter at 2
17 See Notice at 47269.
23 See Notice at 47270 in footnote 16.
18 See Notice at 47269–70.
(stating 20 percent of public offerings in the first
24 The SPAC is able to request review of the Staff three quarters of 2017 came from SPACs); EarlyBird
19 See Notice at 47270.
Delisting Determination which would allow it to Letter at 1; Kirkland Letter at 1.
20 Id.
remain listed for a maximum of 180 calendar days. 32 See SIFMA Letter at 2; EarlyBird Letter at 1;
21 Net Tangible Assets is defined as total assets
See Nasdaq Rule 5815. The Exchange states that Akin Gump Letter at 3.
less intangible assets and liabilities. See proposed this limitation will only allow for a SPAC to remain 33 See SIFMA Letter at 3 (stating the proposed
Nasdaq Rule IM–5101–2(f). Under the proposal, if listed for a short period of time and that the process change would ‘‘reduce costs and burdens on
daltland on DSKBBV9HB2PROD with NOTICES
a company is listed prior to approval of the would provide notice to the public. See Notice at
Exchange’s proposal it will not need to satisfy this [SPACs]’’ which ‘‘have limited funds not held in
47271. escrow’’); Akin Gump Letter at 2 (arguing the holder
net tangible asset requirement if it has a least 300 25 See Notice at 47271. See also Nasdaq Rule IM–
public holders. requirement ‘‘creates significant administrative
22 Rule 15g–1 through 15g–9 under the Act 5101–2 (d). burden on SPACs’’ which are ‘‘operating with
impose certain disclosure and additional
26 See Notice at 47271. limited funds outside of the trust account’’).
27 See Notice at 47271. Nasdaq also proposed 34 See Cowen Letter at 1 and EarlyBird Letter
requirements on brokers and dealers when effecting
transactions in penny stocks. See 17 CFR 240.15g– other non-substantive changes in its proposal. See at 1.
1 to 15g–9. Rule 3a51–1 includes an exception from also supra note 5. 35 See Akin Gump Letter at 2.
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![2280 Federal Register / Vol. 83, No. 10 / Tuesday, January 16, 2018 / Notices
requirements did not provide significant demonstrating compliance with existing exchange listed companies have
investor protection benefits.36 listing standards, including determining sufficient public float, investor base,
Two commenters specifically the number of holders.43 and trading interest to provide the depth
supported the $5 million net tangible and liquidity necessary to promote fair
assets requirement, noting that this IV. Proceedings To Determine Whether
and orderly markets.48
requirement should help SPACs avoid To Approve or Disapprove SR– Nasdaq proposes to lower the
being designated a ‘‘penny stock.’’ 37 NASDAQ–2017–087 and Ground for minimum number of holders required
One commenter noted the proposal by Disapproval Under Consideration for initial listing of a SPAC from 300 to
Nasdaq to publish a daily list of SPACs The Commission is instituting 150, and to eliminate the continued
that do not meet the requirement for an proceedings pursuant to Section listing requirement to have a minimum
exception to the penny stock rules will 19(b)(2)(B) of the Act to determine number of holders until the SPAC
ensure proper notice is provided to whether the proposal should be completes a business acquisition. In
market participants.38 approved or disapproved.44 Institution support of its proposal, Nasdaq asserts
Finally, three of the commenters of such proceedings is appropriate at that SPACs often have difficulty
supporting the proposed rule change this time in view of the legal and policy demonstrating compliance with the
also specifically supported the proposal issues raised by the proposal, as minimum number of holders
to establish a 30-day period for a listed discussed below. Institution of requirements because many accounts
SPAC to demonstrate compliance with disapproval proceedings does not are held in street name, so that this
initial listing requirements following a indicate that the Commission has information must be obtained from
business combination.39 One reached any conclusions with respect to broker-dealers and other third parties.
commenter believed that this ‘‘strikes a any of the issues involved. Nasdaq states that this effort is
balance of providing the company with Pursuant to Section 19(b)(2)(B) of the particularly burdensome for SPACs
necessary time to manage its limited Act, the Commission is providing notice because most of the expenses incurred
resources while protecting investors in of the grounds for disapproval under in determining the number of holders
the same way [Nasdaq] protects consideration. The Commission is must be borne by the SPAC’s sponsors.
investors in operating companies that instituting proceedings to allow for The Commission notes that the vast
are conducting their initial public additional analysis and input majority of shares of most listed
offerings.’’ 40 Another commenter concerning the proposed rule change’s companies are held in street name, and
expressed the view that the 30-day consistency with the Act 45 and, in it is not clear from Nasdaq’s proposal
compliance period ‘‘would be important particular, with Section 6(b)(5) of the how the burdens on SPACs in
to allow [SPACs] time to satisfy the Act, which requires, among other determining the number of holders are
listing requirements after the closing of things, that the rules of a national different than for listed companies
an initial business combination,’’ given securities exchange be designed to generally, other than the fact that the
‘‘the uncertainty in stock ownership that prevent fraudulent and manipulative SPAC’s sponsor bears most of the costs.
redemption elections can bring.’’ 41 acts and practices, to promote just and In addition, as noted by a commenter,
One commenter did not support the equitable principles of trade, to remove it is not clear from Nasdaq’s proposal
proposed rule change, noting that ‘‘it impediments to and perfect the the extent to which SPACs actually have
does not provide sufficient information mechanism of free and open market and had difficulties complying with the
for us to make a determination as to a national market system, and, in existing minimum number of holders
whether our members and the capital general, to protect investors and the requirements.49
markets would benefit from the public interest.46 Nasdaq also takes the position that the
proposed rule changes.’’ 42 Areas where The Commission has consistently benefits of the minimum number of
this commenter believed more evidence recognized the importance of the holders requirements are less with
was necessary include: (1) The assertion minimum number of holders and other SPACs because their value is based
that price distortions or illiquidity are a similar requirements in exchange listing primarily on the value of the funds held
lesser concern for SPACs; (2) the standards.47 Among other things, such in trust. Nasdaq notes that SPACs
analysis that SPACs trade close to the listing standards help ensure that historically have traded close to the
redemption value of the assets held in value of the funds held in trust, and
trust; (3) the number of companies 43 See CII Letter at 2. This commenter specifically concludes that a lack of shareholders
constrained by existing listing indicated, however, that it did support the proposal has not resulted in distorted prices and
standards; and (4) the difficulties to allow listed companies 30 days to demonstrate
compliance with the initial listing standards after
the associated concerns. The
the consummation of the SPAC’s business Commission, however, does not believe
36 See SIFMA Letter at 3 (stating the pro rata right
combination. it is clear from Nasdaq’s proposal how
to funds held in the escrow account, the limited
amount of time that the SPAC has to complete a
44 15 U.S.C. 78s(b)(2)(B).
these historic trading patterns bear on
45 15 U.S.C. 78f(b)(5).
business combination and the unique trading the role of the minimum number of
46 Id.
fundamentals indicate why a lower or no holder holders requirements in maintaining fair
47 For example, the Commission has repeatedly
requirement should be required). See also Akin and orderly markets, particularly since
Gump Letter at 2 (asserting that ‘‘SPAC investors stated in approving exchange listing requirements,
have further protection from illiquidity because a including Nasdaq’s original SPAC listing standards,
48 Id. The Commission has further stated that
SPAC must undergo a business combination within that the development and enforcement of adequate
the allotted time period or liquidate and return the standards governing the listing of securities on an once a security has been approved for initial listing,
pro rata share of the trust assets to public exchange is an activity of critical importance to maintenance criteria allow an exchange to monitor
investors.’’). financial markets and the investing public. See e.g., the status and trading characteristics of that issue
daltland on DSKBBV9HB2PROD with NOTICES
37 See SIFMA Letter at 4; and Akin Gump Letter Securities Exchange Act Release No. 57785 (May 6, to ensure that it continues to meet the exchange’s
2008), 73 FR 27597 (May 13, 2008) (stating also that standards for market depth and liquidity so that fair
at 3.
38 See Akin Gump Letter at 3. the distribution standards, which include exchange and orderly markets can be maintained. See e.g.,
holder requirements, ‘‘. . . should help to ensure Securities Exchange Act Release No. 57785 (May 6,
39 See SIFMA Letter at 4; Akin Gump Letter at 3;
that the [SPACs] securities have sufficient public 2008), 73 FR 27597 (May 13, 2008) also stating that
Kirkland Letter at 1. float, investor base, and liquidity to promote fair the continued listing standards for SPACs, which
40 See SIFMA Letter at 4.
and orderly markets’’); Securities Exchange Act include the holder requirements, protect investors
41 See Kirkland Letter at 1. and promote fair and orderly markets.
Release No. 58228 (July 25, 2008), 73 FR 44794
42 See CII Letter at 1. (July 31, 2008). 49 See supra note 43.
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![2282 Federal Register / Vol. 83, No. 10 / Tuesday, January 16, 2018 / Notices
For the Commission, by the Division of (b) the accuracy of the agency’s estimate hours) is prepared by the issuer for a
Trading and Markets, pursuant to delegated of the burden imposed by the collection total annual reporting burden of 247,107
authority.52 of information; (c) ways to enhance the hours (118.12 hours per response x
Eduardo A. Aleman, quality, utility, and clarity of the 2,092 responses).
Assistant Secretary. information collected; and (d) ways to Written comments are invited on: (a)
[FR Doc. 2018–00535 Filed 1–12–18; 8:45 am] minimize the burden of the collection of Whether this proposed collection of
BILLING CODE 8011–01–P information on respondents, including information is necessary for the proper
through the use of automated collection performance of the functions of the
techniques or other forms of information agency, including whether the
SECURITIES AND EXCHANGE technology. Consideration will be given information will have practical utility;
COMMISSION to comments and suggestions submitted (b) the accuracy of the agency’s estimate
in writing within 60 days of this of the burden imposed by the collection
[SEC File No. 270–609, OMB Control
No.3235–706] publication. of information; (c) ways to enhance the
An agency may not conduct or quality, utility, and clarity of the
Proposed Collection; Comment sponsor, and a person is not required to information collected; and (d) ways to
Request respond to, a collection of information minimize the burden of the collection of
unless it displays a currently valid information on respondents, including
Upon Written Request Copies Available control number. through the use of automated collection
From: Securities and Exchange Please direct your written comment to techniques or other forms of information
Commission, Office of FOIA Services, Pamela Dyson, Director/Chief technology. Consideration will be given
100 F Street NE, Washington, DC Information Officer, Securities and to comments and suggestions submitted
20549–2736. Exchange Commission, c/o Remi Pavlik- in writing within 60 days of this
Extension: Simon, 100 F Street NE, Washington, publication.
Form ABS–EE. DC 20549 or send an email to: PRA_ An agency may not conduct or
Mailbox@sec.gov. sponsor, and a person is not required to
Notice is hereby given that, pursuant
Dated: January 9, 2018. respond to, a collection of information
to the Paperwork Reduction Act of 1995
Eduardo A. Aleman, unless it displays a currently valid
(44 U.S.C. 3501 et seq.), the Securities
control number.
and Exchange Commission Assistant Secretary.
Please direct your written comment to
(‘‘Commission’’) is soliciting comments [FR Doc. 2018–00499 Filed 1–12–18; 8:45 am]
Pamela Dyson, Director/Chief
on the collection of information BILLING CODE 8011–01–P Information Officer, Securities and
summarized below. The Commission Exchange Commission, c/o Remi Pavlik-
plans to submit this existing collection Simon, 100 F Street NE, Washington,
of information to the Office of SECURITIES AND EXCHANGE
DC 20549 or send an email to: PRA_
Management and Budget for extension COMMISSION
Mailbox@sec.gov.
and approval. [SEC File No. 270–61, OMB Control No.
Form ABS–EE (17 CFR 249.1401) is Dated: January 9, 2018.
3235–0073]
filed by asset-backed issuers to provide Eduardo A. Aleman,
asset-level information for registered Proposed Collection; Comment Assistant Secretary.
offerings of asset-backed securities at Request [FR Doc. 2018–00501 Filed 1–12–18; 8:45 am]
the time of securitization and on an BILLING CODE 8011–01–P
ongoing basis required by Item 1111(h) Upon Written Request Copies Available
of Regulation AB (17 CFR 229.1111(h)). From: Securities and Exchange
The purpose of the information Commission, Office of FOIA Services, SECURITIES AND EXCHANGE
collected on Form ABS–EE is to 100 F Street NE, Washington, DC COMMISSION
implement the disclosure requirements 20549–2736.
[SEC File No. 270–125, OMB Control No.
of Section 7(c) of the Securities Act of Extension: 3235–0104]
1933 (15 U.S.C. 77g(c)) to provide Form S–3.
information regarding the use of Notice is hereby given that, pursuant Proposed Collection; Comment
representations and warranties in the to the Paperwork Reduction Act of 1995 Request
asset-backed securities markets. We (44 U.S.C. 3501 et seq.), the Securities Upon Written Request Copies Available
estimate that approximately 13,374 and Exchange Commission From: Securities and Exchange
securitizers will file Form ABS–EE (‘‘Commission’’) is soliciting comments Commission, Office of FOIA Services,
annually at estimated 170,089 burden on the collection of information 100 F Street NE, Washington, DC
hours per response. In addition, we summarized below. The Commission 20549–2736.
estimate that 25% of the 50.87152 hours plans to submit this existing collection
per response (12.71788 hours) is carried of information to the Office of Extension:
internally by the securitizers for a total Management and Budget for extension Form 3.
annual reporting burden of 170,089 and approval. Notice is hereby given that pursuant,
hours (12.71788 hours per response x Form S–3 (17 CFR 239.13) is a short to the Paperwork Reduction Act of 1995
13,374 responses). form registration statement used by (44 U.S.C. 3501 et seq.), the Securities
Written comments are invited on: (a) domestic issuers to register a public and Exchange Commission
daltland on DSKBBV9HB2PROD with NOTICES
Whether the proposed collection of offering of their securities under the (‘‘Commission’’) is soliciting comments
information is necessary for the proper Securities Act of 1933 (15 U.S.C. 77a et on the collections of information
performance of the functions of the seq.). Form S–3 takes approximately summarized below. The Commission
agency, including whether the 472.49 hours per response and is filed plans to submit this existing collection
information will have practical utility; by approximately 2,092 issuers of information to the Office of
annually. We estimate that 25% of the Management and Budget for extension
52 17 CFR 200.30–3(a)(12). 472.49 hours per response (118.12 and approval.
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Document Created: 2018-01-13 02:02:17
Document Modified: 2018-01-13 02:02:17
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