[Federal Register Volume 86, Number 32 (Friday, February 19, 2021)]
[Notices]
[Pages 10379-10381]
[FR Doc No: 2021-03337]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91120; File No. SR-NYSE-2020-90]

Self-Regulatory Organizations; New York Stock Exchange LLC; Order
Instituting Proceedings To Determine Whether To Approve or Disapprove a
Proposed Rule Change To Amend the Requirement Applicable to Special
Purpose Acquisition Companies Upon Consummation of a Business
Combination Concerning Compliance With the Round Lot Shareholder
Requirement

February 12, 2021.

I. Introduction

    On October 27, 2020, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend its listing requirements applicable to
special purpose acquisition companies (``SPACs'' or ``Acquisition
Companies'') upon consummation of a business combination by allowing
such companies 15 calendar days following the closing of a business
combination to demonstrate compliance with the Exchange's round lot
shareholder requirement. The proposed rule change was published for
comment in the Federal Register on November 16, 2020.\3\ On December
21, 2020, pursuant to Section 19(b)(2) of the Act,\4\ the Commission
designated a longer period within which to approve the proposed rule
change, disapprove the proposed rule change, or institute proceedings
to determine whether to disapprove the proposed rule change to February
14, 2021.\5\ The Commission has received no comment letters on the
proposed rule change. The Commission is instituting proceedings
pursuant to Section 19(b)(2)(B) of the Act \6\ to determine whether to
approve or disapprove the proposed rule change.
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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. 90382 (November 9,
2020), 85 FR 73121 (``Notice'').
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 90739, 85 FR 85759
(December 29, 2020).
    \6\ 15 U.S.C. 78s(b)(2)(B).
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II. Description of the Proposed Rule Change

    An Acquisition Company or SPAC is a company whose business plan is
to complete an initial public offering and engage in a merger or
acquisition with one or more unidentified companies within a specific
period of time.\7\ NYSE's listing rules require, among other things, a
SPAC to deposit and retain at least 90% of the proceeds from its
initial public offering (``IPO'') in an escrow account, complete one or
more business combinations having an aggregate fair market value of at
least 80% of the value of the escrow account within 36 months of the
effectiveness of its IPO registration statement, and provide the public
shareholders, if a vote is held, who object to the business combination
with the right to convert their common stock into a pro rata share of
the funds held in escrow.\8\
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    \7\ See Securities Exchange Act Release No. 57785 (May 6, 2008),
73 FR 27597 (May 13, 2008) (SR-NYSE-2008-17) (adopting Section
102.06 of the Listed Company Manual (``Manual''). See also Notice,
supra note 3.
    \8\ See Section 102.06 of the Manual. Under Section 102.06 of
the Manual, if a vote is not held on the business combination the
company must provide all shareholders with the opportunity to redeem
all their shares into a pro rata share of the funds held in escrow
pursuant to Rule 13e-4 and Regulation 14E under the Securities
Exchange Act of 1934, which regulates issuer tender offers.
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    Following each business combination, the combined company is
subject to Section 801 and Section 802.01 of the Manual in its entirety
and will be required immediately to meet those requirements, which
include: (i) A price per share of at least $4.00; (ii) a global market
capitalization of at least $150,000,000; (iii) an aggregate market
value of publicly-held shares of at least $40,000,000; and (iv) the
requirements with respect to shareholders and publicly-held shares set
forth in Section 102.01A for companies listing in connection with an
initial public offering, including the round lot shareholder
requirement.\9\ If the combined company does not meet the requirements
of Sections 801 and 802.01 of the Manual following a business
combination, Section 802.01B of the Manual provides that a SPAC will be
promptly subject to suspension and delisting proceedings.
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    \9\ See Section 802.01B of the Manual. The applicable
requirement is 400 holders of round lots.
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    In its proposal, the Exchange stated that its existing rules
require that ``an Acquisition Company must satisfy all initial listing
requirements immediately upon consummation of its Business
Combination.'' \10\ The Exchange asserted, however, that Section
802.01B of the Manual does not provide a timetable for the company to
demonstrate that it satisfies those requirements. Accordingly, the
Exchange proposed to specify that if the SPAC demonstrates that it will
satisfy all requirements except the applicable round lot shareholder
requirement, then the SPAC will receive 15 calendar days following the
closing to demonstrate that it satisfied the applicable round lot
shareholder requirement immediately following the transaction's
closing.
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    \10\ See Notice, supra note 3, at 73122.
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    In addition, the Exchange stated that, when a listed SPAC
consummates its business combination, the Exchange also considers
whether the business combination gives rise to a ``back door listing''
as described in Section 703.08(E) of the Manual. If the resulting
company would not qualify for original listing, including by not
meeting the applicable distribution standards, the Exchange will
promptly initiate suspension and delisting of the SPAC. The Exchange
proposed to modify its rule in relation to business combinations that
give rise to a ``back door listing'' to specify that if the SPAC
demonstrates that it will satisfy all requirements except the
applicable round lot shareholder requirement, then the company will
receive 15 calendar days following the closing to demonstrate that it
satisfied the applicable round lot shareholder requirement immediately
following the transaction's closing.\11\
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    \11\ See proposed amendment to Section 802.01B of the Manual.
See also Notice, supra note 3, at 73122.
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    The Exchange stated that it determines compliance with the round
lot shareholder requirement at the time of a business combination by
reviewing a company's public disclosures and information provided by
the company about the transaction.\12\ According to the Exchange, if it
cannot determine compliance using public information, it will typically
request the company to provide additional information such as
registered shareholder lists from the company's transfer agent, data
from Cede & Co. about shares held in street name, or data from broker-
dealers and third parties that distribute information such as proxy
materials for the broker-dealers. If the company can provide
information demonstrating compliance before the business combination
closes,

the Exchange stated that no further information would be required.
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    \12\ NYSE states, for example, that the merger agreement may
result in the Acquisition Company issuing a round lot of shares to
more than 400 holders of the target of the business combination at
closing.
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    However, the Exchange asserted that in some cases it can be
difficult for a company to obtain evidence demonstrating the number of
shareholders that the company has or will have following a business
combination. The Exchange stated that shareholders in a SPAC may redeem
or tender their shares until just before the time of the business
combination, and the SPAC may not know how many shareholders will
choose to redeem until very close to the consummation of the business
combination. The Exchange stated that this could impact its ability to
determine compliance before the business combination closes, in cases
where the number of round lot shareholders is close to the applicable
requirement.
    Accordingly, for a SPAC that has demonstrated that it will satisfy
all of the initial listing requirements except for the round lot
shareholder requirement before consummating the business combination
(including the initial listing standards that are applicable in the
event that the business combination gives rise to a ``back door
listing''), the Exchange has proposed to allow the SPAC 15 calendar
days after the closing of the business combination to demonstrate that
it also complied with the round lot requirement at the time of the
business combination. The Exchange stressed that under its proposal a
SPAC must still demonstrate that it satisfied the round lot shareholder
requirement immediately following the business combination, and that
the proposal merely would give the SPAC 15 calendar days to provide
evidence that it did.
    The Exchange stated that the proposal ``balances the burden placed
on the Acquisition Company to obtain accurate shareholder information
for the new entity and the need to ensure that a company that does not
satisfy the initial listing requirements following a Business
Combination enters the delisting process promptly.'' \13\ The Exchange
further stated that if the company does not evidence compliance within
the proposed time period, Exchange staff would immediately commence
suspension and delisting proceedings with respect to the company.
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    \13\ The Exchange stated that shareholders of the SPAC would be
harmed if NYSE issued a delisting determination at a time when the
company did, in fact, satisfy all initial listing requirements but
could not yet provide proof.
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III. Proceedings To Determine Whether To Approve or Disapprove SR-NYSE-
2020-90 and Grounds for Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \14\ to determine whether the proposed rule
change should be approved or disapproved. Institution of such
proceedings is appropriate at this time in view of the legal and policy
issues raised by the proposed rule change. Institution of proceedings
does not indicate that the Commission has reached any conclusions with
respect to any of the issues involved.
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    \14\ 15 U.S.C. 78s(b)(2)(B).
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    Pursuant to Section 19(b)(2)(B) of the Act,\15\ the Commission is
providing notice of the grounds for disapproval under consideration.
The Commission is instituting proceedings to allow for additional
analysis of the proposed rule change's consistency with the Act, and in
particular, 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 a free and open market and a national market
system, and, in general, to protect investors and the public interest;
and are not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.'' \16\
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    \15\ Id.
    \16\ 15 U.S.C. 78f(b)(5).
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    The Commission has consistently recognized the importance of the
minimum number of holders and other similar requirements in exchange
listing standards. Among other things, such listing standards help
ensure that exchange listed securities have sufficient public float,
investor base, and trading interest to provide the depth and liquidity
necessary to promote fair and orderly markets.\17\
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    \17\ See, e.g., Securities Exchange Act Release Nos. 57785 (May
6, 2008), 73 FR 27597 (May 13, 2008) (SR-NYSE-2008-17) (stating that
the distribution standards, which includes exchange holder
requirements ``. . . should help to ensure that the [SPAC's]
securities have sufficient public float, investor base, and
liquidity to promote fair and orderly markets''); 58228 (July 25,
2008), 73 FR 44794 (July 31, 2008) (SR-Nasdaq-2008-013) (approving a
proposal to adopt listing standards for SPACs); and 86117 (June 14,
2018), 84 FR 28879 (June 20, 2018) (SR-NYSE-2018-46) (disapproving a
proposal to reduce the minimum number of public holders continued
listing requirement applicable to SPACs from 300 to 100).
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    As discussed above, the Exchange proposed to provide a SPAC 15
calendar days following the closing of a business combination to
demonstrate that it satisfied the applicable round lot holder
requirement immediately following the closing. The Exchange asserted
that it can be difficult for a SPAC to obtain evidence demonstrating
the number of holders it will have following the business combination
because SPAC shareholders have the right to redeem or tender their
shares until just before the time of such business combination. The
Exchange, however, has provided no data or other evidence to support
its position that SPACs have particular difficulties demonstrating
compliance with the minimum number of holders requirements. For
example, the Exchange has not provided any data showing the extent to
which SPACs have been unable to meet the applicable minimum number of
holders requirement immediately following the business combination, or
the extent to which this was due to last minute redemptions by SPAC
shareholders. The Exchange also has provided no data or other evidence
showing how long it has taken SPACs that have been unable to meet the
applicable minimum number of holders requirement, whether or not due to
last minute shareholder redemptions, to come into compliance with such
requirements.
    Further, the Exchange has not explained how providing a SPAC an
additional 15 days following the closing of the business combination
simply to demonstrate that it complied with the applicable minimum
number of holders requirement immediately following the closing, would
address the substantive compliance concerns associated with last minute
shareholder redemptions by SPACs that are close to the minimum
requirement. The Exchange also has not addressed the risk that, by
waiting for SPACs to demonstrate compliance with the minimum number of
holders requirements until after the closing of the business
combination, non-compliant companies could be listed on the Exchange
despite not meeting initial listing standards or those relating to a
``back door listing,'' and have their securities continue to trade
until the delisting process has been completed. As a result, a SPAC
could complete a business combination and very soon thereafter be
subject to delisting proceedings, and during such time its securities
may trade with a number of holders that is substantially less than the
required minimum. The Exchange has not addressed the impact this could
have on SPAC shareholders and other market participants, or explained
why subjecting them to these risks is

consistent with the protection of investors and the public interest,
and the other requirements of Section 6(b)(5) of the Act.
    Under the Commission's Rules of Practice, the ``burden to
demonstrate that a proposed rule change is consistent with the Exchange
Act and the rules and regulations issued thereunder . . . is on the
self-regulatory organization [`SRO'] that proposed the rule change.''
\18\ The description of a proposed rule change, its purpose and
operation, its effect, and a legal analysis of its consistency with
applicable requirements must all be sufficiently detailed and specific
to support an affirmative Commission finding, and any failure of an SRO
to provide this information may result in the Commission not having a
sufficient basis to make an affirmative finding that a proposed rule
change is consistent with the Exchange Act and the applicable rules and
regulations.\19\
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    \18\ Rule 700(b)(3), Commission Rules of Practice, 17 CFR
201.700(b)(3).
    \19\ See id.
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    For these reasons, the Commission believes it is appropriate to
institute proceedings pursuant to Section 19(b)(2)(B) of the Act to
determine whether the proposal should be approved or disapproved.

IV. Procedure: Request for Written 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.\20\
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    \20\ Section 19(b)(2) of the 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).
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    Interested persons are invited to submit written data, views, and
arguments regarding whether the proposal should be approved or
disapproved by March 12, 2021. Any person who wishes to file a rebuttal
to any other person's submission must file that rebuttal by March 26,
2021. The Commission asks that commenters address the sufficiency of
the Exchange's statements in support of the proposal, in addition to
any other comments they may wish to submit about the proposed rule
change.
    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-2020-90 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-2020-90. 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-2020-90 and should be submitted by
March 12, 2021. Rebuttal comments should be submitted by March 26,
2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(57).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2021-03337 Filed 2-18-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 81, Number 186 (Monday, September 26, 2016)]
[Notices]
[Pages 66049-66050]
[FR Doc No: 2016-23110]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

[Docket No. USCG-2010-0164]

National Boating Safety Advisory Council

AGENCY: Coast Guard, DHS.

ACTION: Notice of Federal Advisory Committee meeting.

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SUMMARY: The National Boating Safety Advisory Council and its
Subcommittees will meet on October 20, 21 and 22, 2016, in Arlington,
VA, to discuss issues relating to recreational boating safety. These
meetings will be open to the public.

DATES: The National Boating Safety Advisory Council will meet on
Thursday, October 20, 2016, from 8:00 a.m. to 2:30 p.m. and on
Saturday, October 22, 2016 from 9:00 a.m. to 12:00 p.m. The Boats and
Associated Equipment Subcommittee will meet on October 20, 2016, from
2:45 p.m. to 5:00 p.m. The Prevention through People Subcommittee will
meet on October 21, 2016, from 8:30 a.m. to 11:45 a.m. The Recreational
Boating Safety Strategic Planning Subcommittee will meet on October 21,
2016, from 1:00 p.m. to 5:00 p.m. Please note that these meetings may
conclude early if the National Boating Safety Advisory Council has
completed all business.

ADDRESSES: All meetings will be held in the Ballroom of the Holiday Inn
Arlington (http://www.hiarlington.com), 4610 N Fairfax Drive,
Arlington, VA 22203.
    For information on facilities or services for individuals with
disabilities or to request special assistance at the meeting, contact
the individual listed in the FOR FURTHER INFORMATION CONTACT section
below as soon as possible.
    Instructions: To facilitate public participation, we are inviting
public comment on the issues to be considered by the Council as listed
in the ``Agenda'' section below. Written comments for distribution to
Council members must be submitted no later than October 1, 2016, if
Council review is desired prior to the meeting. You must include
``Department of Homeland Security'' and the docket number USCG-2010-
0164. Written comments may also be submitted using the Federal
eRulemaking Portal at http://www.regulations.gov. For technical
difficulties, contact the individual listed in the FOR FURTHER
INFORMATION CONTACT section below. Comments received will be posted
without alteration at http://www.regulations.gov, including any
personal information provided. You may review a Privacy Act notice
regarding the Federal Docket Management System in the March 24, 2005,
issue of the Federal Register (70 FR 15086).
    Docket Search: For access to the docket to read documents or
comments related to this notice, go to http://www.regulations.gov
insert USCG-2010-0164 in the ``Search'' box, press Enter, then click
the item you wish to view.

FOR FURTHER INFORMATION CONTACT: Mr. Jeff Ludwig, Alternate Designated
Federal Officer of the National Boating Safety Advisory Council,
telephone<PHONE_NUMBER>, or at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Notice of this meeting is given under the
Federal Advisory Committee Act (Title 5, U.S.C., Appendix). Congress
established the National Boating Safety Advisory Council in the Federal
Boat Safety Act of 1971 (Pub. L. 92-75). The National Boating Safety
Advisory Council currently operates under the authority of 46 U.S.C.
13110 and 46 U.S.C. 4302(c). The latter requires the Secretary of
Homeland Security and the Commandant of the Coast Guard by delegation
to consult with the National Boating Safety Advisory Council in
prescribing regulations for recreational vessels and associated
equipment and on other major safety matters.

Meeting Agenda

    The agenda for the National Boating Safety Advisory Council meeting
is as follows:

Thursday, October 20, 2016

    (1) Opening remarks and presentation of awards to outgoing members.
    (2) Receipt and discussion of the following reports:
    (a) Chief, Office of Auxiliary and Boating Safety, Update on the
Coast Guard's implementation of National Boating Safety Advisory
Council Resolutions and Recreational Boating Safety Program report.
    (b) Alternate Designated Federal Officer's report concerning
Council administrative and logistical matters.
    (3) Presentations on the following:
    (a) Distracted Driving.

    (b) Human Performance in Investigations.
    (c) Human Factors Analysis and Classification System.
    (4) Subcommittee Session: Boats and Associated Equipment
Subcommittee.
    Issues to be discussed include alternatives to pyrotechnic visual
distress signals; grant projects related to boats and associated
equipment; and updates to 33 CFR 181 ``Manufacturer Requirements'' and
33 CFR 183 ``Boats and Associated Equipment.''
    (5) Public comment period.
    (6) Meeting Recess.

Friday, October 21, 2016

    The day will be dedicated to Subcommittee sessions:
    (1) Prevention Through People Subcommittee.
    Issues to be discussed include paddlesports participation, overview
of State boating Safety programs, and licensing requirements for on-
water boating safety instruction providers.
    (2) Recreational Boating Safety Strategic Planning Subcommittee.
    Issues to be discussed include progress on implementation of the
2012-2016 Strategic Plan, and development of the 2017-2021 Strategic
Plan.

Saturday, October 22, 2016

    The full Council will resume meeting.
    (1) Receipt and Discussion of the Boats and Associated Equipment,
Prevention through People and The Recreational Boating Safety Strategic
Planning Subcommittee reports.
    (2) Discussion of any recommendations to be made to the Coast
Guard.
    (3) Public comment period.
    (4) Voting on any recommendations to be made to the Coast Guard.
    (5) Adjournment of meeting.
    There will be a comment period for the National Boating Safety
Advisory Council members and a comment period for the public after each
report presentation, but before each is voted on by the Council. The
Council members will review the information presented on each issue,
deliberate on any recommendations presented in the Subcommittees'
reports, and formulate recommendations for the Department's
consideration.
    The meeting agenda and all meeting documentation can be found at:
http://homeport.uscg.mil/NBSAC. Alternatively, you may contact Mr. Jeff
Ludwig as noted in the FOR FURTHER INFORMATION CONTACT section above.
    Public comments or questions will be taken throughout the meeting
as the Council discusses the issues and prior to deliberations and
voting. There will also be a public comment period at the end of the
meeting. Speakers are requested to limit their comments to 3 minutes.
Please note that the public comment period may end before the period
allotted, following the call for comments. Contact the individual
listed in the FOR FURTHER INFORMATION CONTACT section above to register
as a speaker.

    Dated: September 20, 2016.
Verne B. Gifford, Jr.,
Captain, U.S. Coast Guard, Director of Inspections and Compliance.
[FR Doc. 2016-23110 Filed 9-23-16; 8:45 am]
 BILLING CODE 9110-04-P