[Federal Register Volume 84, Number 160 (Monday, August 19, 2019)]
[Notices]
[Pages 42967-42971]
[FR Doc No: 2019-17694]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86651; File No. SR-NYSE-2019-14]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Amendment No. 1 and Order Granting Accelerated
Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To
Amend Section 703.18 of the Listed Company Manual To Permit the Listing
of Event-Based Contingent Value Rights and Make Other Changes to the
Listing Standards for Contingent Value Rights

August 13, 2019.

I. Introduction

    On April 25, 2019, New York Stock Exchange LLC (``NYSE'' or the
``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 Section 703.18 of the Exchange's Listed
Company Manual (``Manual'') to expand the circumstances under which a
contingent value right (``CVR'') may be listed on the Exchange and make
other changes to the listing standards for CVRs. The proposed rule
change was published for comment in the Federal Register on May 15,
2019.\3\ On August 8, 2019, the Exchange filed Amendment No. 1 to the
proposed rule change.\4\ The Commission received no comment letters on
the proposed rule change. The Commission is publishing this notice to
solicit comments on Amendment No. 1 from interested persons, and is
approving the proposed rule change, as modified by Amendment No. 1, on
an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 85812 (May 9, 2019),
84 FR 21861 (``Notice'').
    \4\ In Amendment No. 1, the Exchange revised the proposal to:
(1) Require public disclosure of all material terms of a CVR prior
to listing; (2) require public disclosure of an occurrence of any
event or events upon which a CVR payment is conditioned, or the
failure of such event or events to occur, in accordance with
Sections 202.05 and 202.06 of the Manual; (3) specify that the
Exchange will not list a CVR if, at the time of the proposed
listing, the issuer is below compliance with applicable listing
standards; (4) state that, in addition to its original proposal to
promptly delist any CVR when the issuer's common stock ceases to be
listed on a national securities exchange, the Exchange will also
promptly delist a CVR when the related equity security to which the
cash payment at maturity is tied is no longer listed on a national
security exchange; and (5) make technical, clarifying changes.
Amendment No. 1 is available at https://www.sec.gov/comments/sr-nyse-2019-14/srnyse201914-5944385-189087.pdf.
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II. Description of the Proposed Rule Change, as Modified by Amendment
No. 1

    Section 703.18 of the Manual currently provides only for the
listing of CVRs that are related to the price of an affiliate's equity
security (a ``Price-Based CVR'').\5\ The Exchange proposes to amend
Section 703.18 of the Manual to also provide for the listing of CVRs
based on the occurrence of a specified event or events related to the
business of the issuer or an affiliate of the issuer (an ``Event-Based
CVR''). As proposed by the Exchange, an Event-Based CVR would be
defined as an unsecured obligation of the issuer providing for a
possible cash payment, within a specified time period, upon the
occurrence of a specified event or events relating to the business of
the issuer of the CVR or an affiliate of such issuer.\6\ The Exchange
notes that, with the exception of the payment triggering event or
events, Event-Based CVRs are identical in structure to Price-Based
CVRs.\7\ The Exchange also proposes to amend Section 703.18 of the
Manual to make other changes to the listing standards for both Price-
Based and Event-Based CVRs, as described in more detail below.
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    \5\ Under Section 703.18 of the Manual, Price-Based CVRs are
defined as unsecured obligations of the issuer providing for a
possible cash payment at maturity based upon the price performance
of an affiliate's equity security.
    \6\ See proposed Section 703.18 of the Manual. See also
Amendment No. 1.
    \7\ See Notice, supra note 3, at 21862. See also proposed
Section 703.18 of the Manual.
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    According to the Exchange, Price-Based CVRs are generally
distributed to shareholders of an acquired company who are receiving
shares of the acquirer as acquisition consideration.\8\ The Price-Based
CVRs provide the acquiree's shareholders with some medium-term
protection against poor stock price performance of the shares of the
acquirer by guaranteeing them a specified cash payment if the
acquirer's average stock price is below a specified level at the time
of maturity of the Price-Based CVR.\9\ According to the Exchange,
Event-Based CVRs are also typically issued to the shareholders of an
acquired entity as consideration in an acquisition transaction.\10\
Event-Based CVRs entitle their holders to receive a specified cash
payment upon the occurrence of a specified event or events related to
the business of the issuer or an affiliate of the issuer prior to the
maturity date of the Event-Based CVR.\11\ The Event-Based CVR provides
the shareholders of the acquiree an additional interest in the medium-
term performance of the merged entity upon occurrence of its specified
event(s).\12\ Pursuant to the amended proposal, the Exchange would
require that all material terms of a Price-Based or Event-Based CVR be
publicly disclosed prior to listing a CVR.\13\
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    \8\ See Notice, supra note 3, at 21861.
    \9\ See id. at 21861-62.
    \10\ See id. at 21862.
    \11\ See id. See also Amendment No. 1.
    \12\ See Notice, supra note 3, at 21862, which also provides
examples of common Event-Based CVRs.
    \13\ See Amendment No. 1.
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    Section 703.18 of the Manual currently provides that the issuer of
a listed CVR must be an entity that has assets in excess of $100
million and meets the ``size and earnings'' requirements of Section 102
of the Manual. While the proposed rule change will retain the $100
million assets requirement for CVRs, the Exchange proposes to amend the
reference to the ``size and earnings requirements'' of Section 102 of
the Manual by specifying instead that the issuer must meet the
requirements of Sections 102.01B and 102.01C of the Manual.\14\ The
requirements of Section 102.01B of the Manual include the size
requirements for all newly-listed operating companies. In the case of
companies listing CVRs, Section 102.01B would require the company to
have an aggregate market value of publicly held shares of $100 million
\15\ and a $4.00 stock price.
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    \14\ See proposed Section 703.18(A) of the Manual.
    \15\ As noted by the Exchange, this is the same requirement that
currently applies to companies transferring from another national
securities exchange. See Notice, supra note 3, at 21862.
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    As for the requirement for the issuer of the CVR to also meet one
of the standards set forth in Section 102.01C of

the Manual, that section sets forth two financial standards, the
Earnings Test and the Global Market Capitalization Test. The Global
Market Capitalization Test, which was adopted subsequent to the
approval of Section 703.18 of the Manual, requires that an issuer have
$200 million in global market capitalization at the time of listing,
but includes no earnings criteria.\16\ In its proposal, the Exchange
stated that it believes that an issuer that meets the requirements of
the Global Market Capitalization Test is likely to be a substantial
company capable of meeting its financial obligations under the terms of
a listed CVR.\17\ According to the Exchange, most issuers currently
qualify for listing on the Exchange pursuant to the Global Market
Capitalization Test.\18\ The Earnings Test under Section 102.01C would
require the issuer of a CVR to have an aggregate amount of pre-tax
earnings over its last three fiscal years and specified amounts during
the last two most recent fiscal years.\19\
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    \16\ See Section 102.01C(II) of the Manual.
    \17\ See Notice, supra note 3, at 21862.
    \18\ See id.
    \19\ See Section 102.01C(I) of the Manual. The Earnings Test
requires that, subject to certain specified exclusions and
adjustments, an issuer have pre-tax earnings from continuing
operations of: (1) At least $10,000,000 in the aggregate for the
last three fiscal years, at least $2,000,000 in each of the last two
fiscal years, and a positive amount in each of the last three fiscal
years; or (2) at least $12,000,000 in the aggregate for the last
three fiscal years, at least $5,000,000 in the most recent fiscal
year, and at least $2,000,000 in the next most recent fiscal year.
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    Pursuant to the amended proposed rule change, the Exchange will not
list a CVR if, at the time of the proposed listing, the issuer of the
CVR has been deemed to be below compliance on an ongoing basis with the
listing standards of the national securities exchange where either the
equity security to whose price performance a Price-Based CVR is linked
or the issuer's common stock is listed.\20\ The amended proposed rule
change will also require the issuer of an Event-Based CVR to make
public disclosure, in accordance with the provisions of Sections 202.05
and 202.06 of the Manual, upon the occurrence of any event that must
occur as a condition to the issuer's obligation to make a cash payment
with respect to the CVR (or if such an event is deemed to have occurred
pursuant to the terms of the documents governing the CVR) or at any
such time as it becomes clear that a condition to the cash payment with
respect to the CVR has not been met as required by the documents
governing the terms of the CVR.\21\
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    \20\ See Amendment No. 1.
    \21\ See id.
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    Currently, Section 703.18 of the Manual also provides that a CVR
may be delisted when the related equity security to which the cash
payment at maturity is tied is delisted. To reflect the fact that the
delisting provision will now relate to both Price-Based CVRs and Event-
Based CVRs and that Event-Based CVRs are not tied to the performance of
a specific security, the Exchange proposes to modify this provision to
provide that a CVR will also be delisted when the issuer's common stock
ceases to be listed on a national securities exchange.\22\ Pursuant to
the proposed rule change, if either the related equity security to
which the cash payment at maturity is tied or the common stock of a CVR
issuer ceases to be listed on a national securities exchange, the CVR
will promptly be delisted and the Exchange will not have discretion to
continue listing the CVR.\23\
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    \22\ See id.
    \23\ See Notice, supra note 3, at 21862; Amendment No. 1.
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    Finally, the Exchange proposes to update a reference in Section
703.18 of the Manual to ``New York Stock Exchange, Inc.'' by replacing
it with a reference to ``New York Stock Exchange LLC,'' which is the
correct current legal entity name for the Exchange. In addition, the
Exchange proposes to add an introductory sentence prior to the
information circular form description contained in Section 703.18 of
the Manual. The Exchange represents that it intends to issue an
information circular as described in Section 703.18 of the Manual
immediately prior to the listing of any CVR, including any Event-Based
CVR to inform members and member organizations of the special
characteristics and risks of CVRs, as well as the suitability
requirements and other applicable rules.\24\
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    \24\ See Notice, supra note 3, at 21862.
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    The Exchange further represents that it will monitor activity in
CVRs, including Event-Based CVRs, to identify and deter any potential
improper trading activity in such securities and will adopt enhanced
surveillance procedures to enable it to monitor CVRs alongside the
common equity securities of the issuer or its affiliates, as
applicable.\25\ The Exchange also states that it will rely on its
existing trading surveillances, administered by the Exchange or the
Financial Industry Regulatory Authority (``FINRA'') on behalf of the
Exchange, which are designed to detect violations of Exchange rules and
applicable federal securities laws.\26\
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    \25\ See id.
    \26\ See id.
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III. Discussion and Commission Findings

    The Commission finds that the proposed rule change, as modified by
Amendment No. 1, 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. Specifically, the
Commission finds that the proposal is consistent with Section 6(b)(5)
of the Act,\27\ which requires that an exchange have rules designed to,
among other things, prevent fraudulent and manipulative acts and
practices, remove impediments to and perfect the mechanisms of a free
and open market and a national market system, protect investors and the
public interest, and not permit unfair discrimination between
customers, issuers, brokers, or dealers.\28\
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    \27\ 15 U.S.C. 78f(b)(5).
    \28\ In approving this proposed rule change, the Commission
notes that it has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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    The development and enforcement of adequate standards governing the
initial and continued listing 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 will have sufficient public float, investor
base, and trading interest to provide the depth and liquidity necessary
to promote fair and orderly markets. Meaningful listing standards are
especially important given the expectations of investors regarding the
nature of securities that have achieved an exchange listing and the
role of an exchange in overseeing and assuring compliance with its
listing standards. 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.
    CVRs are typically used as consideration offered to the
shareholders of the target company in a business combination
transaction, such as a merger or an exchange offer. As described above,
the Exchange has proposed to adopt listing standards for Event-Based
CVRs as well as modify the standards currently applicable to Price-
Based CVRs. CVRs have unique

characteristics that combine features of debt, equity, and securities
derivative instruments.\29\ The Commission believes that the Exchange's
proposal to establish listing criteria for Event-Based CVRs should
adequately address the unique concerns raised by the listing of such
securities and should help to ensure that only substantial companies
capable of meeting their financial obligations can list such CVRs on
the Exchange, thereby protecting investors and the public interest
consistent with the Act. The Commission further believes that, for many
of the same reasons as noted for Event-Based CVRs, the Exchange's
proposed revisions to its current listing criteria applicable to Price-
Based CVRs are consistent with the Act and the protection of investors.
The proposal, as discussed below, should also aid the Exchange in
maintaining fair and orderly markets for CVRs and preventing fraudulent
and manipulative acts and practices.
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    \29\ See Securities Exchange Act Release No. 28072 (May 30,
1990), 55 FR 23166 (June 6, 1990) (SR-NYSE-90-15) (order approving
original listing standards for CVRs on the Exchange).
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    The Exchange's proposed quantitative listing standards should help
to ensure that only substantial companies capable of meeting their
financial obligations issue Event-Based CVRs.\30\ This is important in
light of the contingent financial obligations created by these
instruments, and should serve to protect investors and the public
interest by ensuring that the companies listing Event-Based CVRs on the
Exchange are of substantial size, which can help to indicate such
companies have sufficient financial means to meet their settlement
obligations. Specifically, an issuer of an Event-Based CVR must have
assets in excess of $100 million, $100 million in market value of
publicly-held shares,\31\ a price per share of at least $4.00,\32\ and
$200 million in global market capitalization at the time of listing or,
in the alternative, it meets the Earnings Test in Section 102.01C of
the Manual.\33\ Taken together, the Commission believes these criteria
are important for an issuer to meet to in order to list an Event-Based
CVR on the Exchange, as well as for the listing of Price-based CVRs. In
addition, as with Price-Based CVRs, an Event-Based CVR issue must have
at least one million CVRs outstanding, at least 400 holders, a minimum
life of one year, and at least $4 million market value.\34\ While the
distribution and liquidity standards applicable to CVRs can help to
ensure there should be adequate depth, liquidity, and investor interest
to support an exchange listing, the issuer requirements will provide
some minimum level of indicia that the issuer of a CVR should be able
to meet any future payment obligations to shareholders of Event-Based,
as well as Price-Based, CVRs pursuant to the applicable CVR agreement.
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    \30\ An issuer must also comply with the corporate governance
requirements of either the Exchange or the national securities
exchange where its common stock or equity security is listed.
    \31\ See Section 102.01B of the Manual.
    \32\ See id.
    \33\ See Section 102.01C of the Manual. See also supra note 19
(describing the requirements of the Earnings Test); proposed Section
703.18(A) of the Manual.
    \34\ See Section 703.18(B) of the Manual.
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    The Commission recognizes that the current quantitative standards
for Price-Based CVRs require the company issuing the CVR to meet the
NYSE earnings requirements in order to list a CVR. While earnings at
the time of listing of a CVR can provide an indication that a company
should be able to meet its financial obligations on the CVR in the
future, the Commission recognizes that earnings may not necessarily be
the only indicia that illustrates that a company can meet its
obligations under the terms of the CVR. Given that most listed
companies now initially list on the Exchange using the Global Market
Capitalization Test, that the Commission has found that such standards
are consistent with the Act, and that the Exchange is retaining the
requirement that the issuer of a CVR have assets in excess of $100
million and must meet the requirements set forth in Section 102.01B of
the Manual,\35\ the Commission believes it is reasonable for the
Exchange to allow CVRs to be listed by companies that meet these new
requirements.
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    \35\ See text accompanying supra notes 14-15 (describing these
requirements as applicable to CVRs).
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    The Exchange also will not list a CVR if, at the time of the
proposed listing, the issuer of the CVR has been deemed to be below
compliance on an ongoing basis with the listing standards of the
national securities exchange where either the equity security to whose
price performance a Price-Based CVR is linked or the issuer's common
stock is listed.\36\ The Commission believes that this is consistent
with the protection of investors and the public interest pursuant to
Section 6(b)(5) of the Act in that it would not permit a CVR to be
listed on the Exchange if the listed company was below compliance, and
therefore, potentially subject to delisting, on the national securities
exchange where its common stock, or equity security linked to the CVR,
was listed.\37\ Finally, as with Price-Based CVRs, Event-Based CVRs may
be delisted when the aggregate market value of the publicly-held CVR is
less than $1,000,000 and will be promptly delisted if either the
related equity security to which the cash payment at maturity is tied
\38\ or the issuer's common stock ceases to be listed on a national
securities exchange.\39\ The Commission believes this latter
requirement is important and consistent with the protection of
investors and the public interest in that it ensures that the issuer of
a CVR is meeting the continued quantitative and qualitative listing
standards of a national securities exchange on an ongoing basis while
the CVR is traded on the Exchange.
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    \36\ See Amendment No. 1. The issuer of a CVR also has to comply
with the corporate governance requirements of the national
securities exchange where its common stock or equity security is
listed. An issuer of a CVR may not be below compliance with these
corporate governance standards (as well as the quantitative
continued listing standards) for its common stock or equity security
on the national securities exchange where such security is listed at
the time of the listing of the CVR. This should provide additional
protections for investors in both Event-Based and Price-Based CVRs.
    \37\ This is similar to existing listing requirements for other
types of securities. See, e.g., Sections 102.07 (listing standards
for Equity Investment Tracking Stocks) and 102.08 (listing standards
for Subscription Receipts) of the Manual.
    \38\ The Commission notes that the reference in this delisting
provision to the related equity security to which the cash payment
at maturity is tied applies primarily to Price-Based CVRs since an
Event-Based CVR is tied to an event rather than the market price of
another listed equity security.
    \39\ See Section 703.18 of the Manual; Amendment No. 1.
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    In addition, the proposed rule change would require that, prior to
listing a Price-Based or Event-Based CVR, an issuer be required to
publicly disclose all material terms of the CVR.\40\ The proposed rule
change would also require the issuer of an Event-Based CVR to make
public disclosure upon the occurrence of any event that must occur as a
condition to the issuer's obligation to make a cash payment with
respect to the CVR (or if such an event is deemed to have occurred
pursuant to the terms of the documents governing the CVR) or at any
such time as it becomes clear that a condition to the cash payment with
respect to the CVR has not been met as required by the documents
governing the terms of the CVR.\41\ The Commission believes that these
disclosure requirements should help to protect investors and the public
interest by ensuring that investors have sufficient information to make
investment decisions relating to CVRs. The Commission further believes
that the requirement to publicly disclose whether a specified event has
occurred

or failed to occur should help to protect investors and prevent
fraudulent manipulative acts and practices by ensuring that investors
and market participants will have access to important information
needed to trade, and make investment decisions in, the CVRs and that
such information will be publicly available to all investors at the
same time. Notification to the Exchange, as required by Section 202.06
of the Manual, will also provide the Exchange with the information
necessary for it to determine whether a temporary trading halt may be
appropriate for an Event-Based or Price-Based CVR in order to ensure
fair and orderly markets.\42\
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    \40\ See Amendment No. 1.
    \41\ See id.
    \42\ Section 202.06 of the Manual, among other things, requires
notification by listed companies to the Exchange at least 10 minutes
before a material news announcement if such announcement is made
between 7:00 a.m. and 4:00 p.m. so the Exchange can consider whether
trading in the security should be temporarily halted.
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    Under the Exchange's proposal, Event-based CVRs are defined as an
unsecured obligation of the issuer providing for a possible cash
payment upon the occurrence of a specified event or events related to
the business of the issuer or an affiliate of the issuer. The
Commission believes that requiring that the CVR to be related to the
business of the issuer or an affiliate of the issuer is an essential
requirement that ensures that the company will have the information
necessary to determine if the required events have occurred or not
occurred within any required time frames under the terms of the CVR and
make timely required public disclosure.\43\
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    \43\ The Commission notes that under the Exchange's rules,
Price-Based CVRs are similarly related to the performance of an
affiliate's equity security.
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    Moreover, the Exchange's proposed rule for listing Event-Based CVRs
also addresses the additional regulatory concerns raised by these
products. Like other financial products with unique features trading on
the Exchange, Event-Based CVRs combine features of debt, equity, and
securities derivative instruments. Consequently, this product may be
more complex than straight stock, bond, or equity warrants. In this
filing, the Exchange has proposed to distribute an information circular
apprising member firms of the special characteristics, risks, and
suitability obligations associated with Event-Based CVRs.\44\ The
Commission believes distribution of this information circular will help
to alert members to the special disclosure and suitability obligations
that apply to Event-Based CVRs and that are relevant in making
recommendations for investors to purchase such securities.\45\
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    \44\ See Notice, supra note 3, at 21862; infra, note 45. See
also proposed Section 703.18 of the Manual.
    \45\ In particular, the circular states, among other things,
that it is suggested that transactions in CVRs be recommended only
to investors whose accounts have been approved for options trading
and that members making recommendations in CVRs should make a
determination that the customer has such knowledge and experience in
financial matters that the customer may reasonably be expected to be
capable of evaluating the risks and special characteristics, and is
financially able to bear the risks, of a recommendation to invest in
CVRs. These requirements, among others set forth in the circular,
should help to ensure that members recommend transactions only to
those customers with an understanding of the risks attendant to the
trading of Event-Based CVRs. The Commission notes that the
information circular will be in the same form as the one the
Exchange currently distributes in connection with Price-Based CVRs.
See proposed Section 703.18 of the Manual.
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    The Exchange will also monitor activity in Event-Based CVRs to
identify and deter any potential improper trading activity in such
securities and will adopt enhanced surveillance procedures to enable it
to monitor Event-Based CVRs alongside the common equity securities of
the issuer or its affiliates, as applicable. Since news and information
concerning a company and its primary equity security or common stock
can have an impact on the company's Event-Based CVRs, this enhanced
surveillance should help to monitor the trading activity in the Event-
Based CVRs.\46\ To the extent the common equity security is traded on
another national securities exchange, these procedures are expected to
ensure proper coordination. The Commission believes that these
safeguards and standards should help to ensure that the listing, and
continued listing, of any Event-Based CVRs on the Exchange (as well as
Price-Based CVRs under the revised listing standards) will be
consistent with investor protection, the public interest, and the
maintenance of fair and orderly markets. In this regard, the Commission
expects the Exchange to thoroughly review any potential listing of
Event-Based CVRs, as well as Price-Based CVRs, to ensure that its
listing standards have been met and continue to be met, as well as to
monitor trading in the Event-Based and Priced-Based CVRs and related
common stock or equity security of the issuer.
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    \46\ As noted above, the Exchange will also rely on its existing
trading surveillances, administered by the Exchange or FINRA on
behalf of the Exchange, which are designed to detect violations of
Exchange rules and applicable federal securities laws.
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    Based on the above, the Commission believes the proposed rule
change is reasonable and should provide for the listing of Event-Based
CVRs, with baseline investor protection and other standards. The
Commission believes, as discussed above, that the Exchange has
developed sufficient standards to allow the listing of Event-Based CVRs
on the Exchange and finds the proposal consistent with the requirements
set forth under the Act, and in particular, Section 6(b)(5). For
similar reasons, the Commission finds that the revised standards for
Price-Based CVRs are also consistent with the Act.\47\
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    \47\ 15 U.S.C. 78s(b)(4) and (b)(5). The Commission further
believes that the Exchange's proposal to update a reference in the
rule text and make other conforming changes to Section 703.18 of the
Manual is consistent with the Act in that it will enhance the
clarity of the proposed rule and thereby reduce potential investor
confusion.
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IV. Solicitation of Comments on Amendment No. 1 to the Proposed Rule
Change

    Interested persons are invited to submit written data, views, and
arguments concerning whether Amendment No. 1 is consistent with the
Act. Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSE-2019-14 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2019-14. 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 the filing also will be available for inspection
and copying at the principal

office of the Exchange. All comments received will be posted without
change. Persons submitting comments are cautioned that we do not redact
or edit personal identifying information from comment submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-NYSE-2019-14,
and should be submitted on or before September 9, 2019.

V. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment No. 1

    The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 1, prior to the thirtieth day
after the date of publication of notice of the filing of Amendment No.
1 in the Federal Register. As discussed above, in Amendment No. 1, the
Exchange revised the proposal to: (1) Require public disclosure of all
material terms of a CVR prior to listing; (2) require public disclosure
of an occurrence of any event or events upon which a CVR payment is
conditioned, or the failure of such event or events to occur, in
accordance with Sections 202.05 and 202.06 of the Manual; (3) specify
that the Exchange will not list a CVR if, at the time of the proposed
listing, the issuer is below compliance with applicable listing
standards; (4) state that, in addition to its original proposal to
promptly delist any CVR when the issuer's common stock ceases to be
listed on a national securities exchange, the Exchange will also
promptly delist a CVR when the related equity security to which the
cash payment at maturity is tied is no longer listed on a national
security exchange; and (5) make technical, clarifying changes.
    The Commission believes that Amendment No. 1 does not raise any
novel regulatory issues or make any significant substantive changes to
the original proposal, which was subject to a full notice and comment
period during which no comments were received. Rather, Amendment No. 1
strengthens the original proposal by requiring additional public
disclosure of important information in connection with an Exchange-
listed CVR, which will increase transparency to investors in CVRs and
provide the Exchange with the information necessary to determine when a
temporary trading halt in an Event-Based CVR may be appropriate in
order to better maintain a fair and orderly market. Amendment No. 1
also provides additional specificity regarding the circumstances in
which the Exchange will not permit the listing of a CVR, or will delist
a CVR, which will provide additional protections for potential
investors in CVRs. The Commission also believes that Amendment No. 1
provides additional accuracy, clarity, and justification to the
proposal, thereby facilitating the Commission's ability to make the
findings set forth above to approve the proposal. Accordingly, the
Commission finds good cause, pursuant to Section 19(b)(2) of the
Act,\48\ to approve the proposed rule change, as modified by Amendment
No. 1, on an accelerated basis.
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    \48\ 15 U.S.C. 78s(b)(2).
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VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\49\ that the proposed rule change (SR-NYSE-2019-14), as modified
by Amendment No. 1, be, and hereby is, approved on an accelerated
basis.
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    \49\ 15 U.S.C. 78s(b)(2).
    \50\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\50\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-17694 Filed 8-16-19; 8:45 am]
 BILLING CODE 8011-01-P