Federal Register / Vol. 85, No. 245 / Monday, December 21, 2020 / Notices 83113 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 89897 

(September 16, 2020), 85 FR 59574. 

4 15 U.S.C. 78s(b)(2). 

5See Securities Exchange Act Release No. 90340, 

85 FR 71704 (November 10, 2020). 

6 15 U.S.C. 78s(b)(2)(B). 

7See Securities Exchange Act Release No. 58228 

(July 25, 2008), 73 FR 44794 (July 31, 2008) 

(adopting the predecessor to IM–5101–2). 

8See Nasdaq IM–5101–2(a). 

9See Nasdaq IM–5101–2(b). 

10See Nasdaq IM–5101–2(d). If a shareholder vote 

on the business combination is held, public 

shareholders voting against a business combination 

must have the right to convert their shares of 

common stock into a pro rata share of the aggregate 

amount then in the escrow account (net of taxes 

payable and amounts distributed to management for 

working capital purposes) if the business 

combination is approved and consummated. Id. If 

a shareholder vote on the business combination is 

not held, the company must provide all 

shareholders with the opportunity to redeem their 

shares for cash equal to their pro rata share of the 

aggregate amount then in the deposit account (net 

of taxes payable and amounts distributed to 

management for working capital purposes). See 

Nasdaq IM–5101–2(e). 

11See Nasdaq IM–5101–2(d). 

12Nasdaq has three listing tiers, each of which 

require, among other things, a company to have a 

minimum number of shareholders in order to 

initially list on the Exchange. See Nasdaq Rule 

5315(f)(1) (on Global Select, an issuer must have at 

least 550 Total Holders with a minimum average 

monthly trading volume over the prior 12 months, 

2,200 Total Holders, or 450 Round Lot Holders with 

50% of holders holding Unrestricted Securities); 

Nasdaq Rule 5405(a)(3) (on Global, an issuer must 

have at least 400 Round Lot Holders with 50% of 

holders holding Unrestricted Securities); and 

Continued 

1. Docket No(s).: CP2020–183; Filing 

Title: Notice of the United States Postal 

Service of Filing Modification One to 

International Priority Airmail, 

Commercial ePacket, Priority Mail 

Express International, Priority Mail 

International & First-Class Package 

International Service with Reseller 

Contract 1 Negotiated Service 

Agreement; Filing Acceptance Date: 

December 15, 2020; Filing Authority: 39 

U.S.C. 3642, 39 CFR 3040.130 through 

3040.135, and 39 CFR 3035.105; Public 

Representative: Jennaca D. Upperman; 

Comments Due: December 23, 2020. 

2. Docket No(s).: CP2020–190; Filing 

Title: Notice of the United States Postal 

Service of Filing Modification One to 

International Priority Airmail, 

Commercial ePacket, Priority Mail 

Express International, Priority Mail 

International & First-Class Package 

International Service Contract 6 

Negotiated Service Agreement; Filing 

Acceptance Date: December 15, 2020; 

Filing Authority: 39 U.S.C. 3642, 39 CFR 

3040.130 through 3040.135, and 39 CFR 

3035.105; Public Representative: 

Jennaca D. Upperman; Comments Due: 

December 23, 2020. 

3. Docket No(s).: MC2021–47 and 

CP2021–49; Filing Title: USPS Request 

to Add International Priority Airmail, 

International Surface Air Lift, 

Commercial ePacket, Priority Mail 

Express International, Priority Mail 

International & First-Class Package 

International Service Contract 1 to 

Competitive Product List and Notice of 

Filing Materials Under Seal; Filing 

Acceptance Date: December 15, 2020; 

Filing Authority: 39 U.S.C. 3642, 39 CFR 

3040.130 through 3040.135, and 39 CFR 

3035.105; Public Representative: 

Jennaca D. Upperman; Comments Due: 

December 23, 2020. 

This Notice will be published in the 

Federal Register. 

Erica A. Barker, 

Secretary. 

[FR Doc. 2020–28133 Filed 12–18–20; 8:45 am] 

BILLING CODE 7710–FW–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90682; File No. SR– 

NASDAQ–2020–062] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Order 

Instituting Proceedings To Determine 

Whether To Approve or Disapprove a 

Proposed Rule Change To Amend 

Listing Rules Applicable to Special 

Purpose Acquisition Companies 

Whose Business Plan Is To Complete 

One or More Business Combinations 

December 16, 2020. 

I. Introduction 

On September 3, 2020, 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 

amend its listing rules to permit 

companies whose business plan is to 

complete one or more business 

combinations (‘‘SPACs’’ or ‘‘Acquisition 

Companies’’) 15 calendar days following 

the closing of a business combination to 

demonstrate that the SPAC has satisfied 

the applicable round lot shareholder 

requirement. The proposed rule change 

was published for comment in the 

Federal Register on September 22, 

2020.3 On November 4, 2020, pursuant 

to Section 19(b)(2) of the Exchange 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 

December 21, 2020.5 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. 

II. Description of the Proposed Rule 

Change 

A 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 Nasdaq listing 

rules, among other things, require a 

SPAC to keep at least 90% of the 

proceeds from its initial public offering 

in an escrow account,8 and to complete 

one or more business combinations 

having an aggregate fair market value of 

at least 80% of the value of the escrow 

account within a specified period of 

time.9 Following each business 

combination, the combined company 

must meet the requirements for initial 

listing on Nasdaq.10 If the combined 

company does not meet the initial 

listing requirements following a 

business combination, Nasdaq staff will 

issue a Staff Delisting Determination 

under Nasdaq Rule 5810.11

In its proposal, Nasdaq acknowledges 

that its existing rules require that, 

‘‘following each business combination’’ 

with a SPAC, the resulting company 

must satisfy all initial listing 

requirements. Nasdaq asserts, however, 

that the rule does not provide a 

timetable for the company to 

demonstrate that it satisfies those 

requirements. Accordingly, Nasdaq 

proposes to modify the rule to specify 

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.12

83114 Federal Register / Vol. 85, No. 245 / Monday, December 21, 2020 / Notices 

Nasdaq Rule 5505(a)(3) (on Capital, an issuer must 

have at least 300 Round Lot Holders with at least 

50% of holders holding Unrestricted Securities. 

13Nasdaq states, for example, that the merger 

agreement may result in the Acquisition Company 

issuing a round lot of shares to more than 300 

holders of the target of the business combination at 

closing. 

14The Exchange notes that SPACs are unlike 

other newly listing companies which do not face 

redemptions and are not already listed and trading 

at the time they must demonstrate compliance. 

15The Exchange also takes the position that 

shareholders of the SPAC would be harmed if 

Nasdaq issued a delisting determination at a time 

when the company did, in fact, satisfy all initial 

listing requirements but could not yet provide 

proof. 

16The Exchange has also proposed to eliminate 

a duplicative paragraph and add a new subsection 

enumeration to its existing rule. 

17 15 U.S.C. 78s(b)(2)(B). 

18 Id. 

19 15 U.S.C. 78f(b)(5). 

20See, 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). 

Nasdaq states that it ordinarily 

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.13 According to 

Nasdaq, 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 brokerdealers. If the company can provide 

information demonstrating compliance 

before the business combination closes, 

Nasdaq states that no further 

information would be required. 

However, Nasdaq asserts that it has 

observed that in some cases it can be 

difficult for a company to obtain 

evidence demonstrating the number of 

shareholders that it has or will have 

following a business combination. 

Nasdaq notes 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.14 Nasdaq states 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, Nasdaq proposes 

to allow the SPAC 15 calendar days 

after the closing of the business 

combination, if necessary, to 

demonstrate that it also complied with 

the round lot requirement at the time of 

the business combination. Nasdaq 

stresses that the 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. Nasdaq believes 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.’’ 15 Nasdaq 

notes that if the company does not 

evidence compliance within the 

proposed time period, Nasdaq staff 

would issue a delisting determination, 

which the company could then appeal 

to an independent hearings panel.16

III. Proceedings To Determine Whether 

To Approve or Disapprove SR– 

NASDAQ–2020–062 and Grounds for 

Disapproval Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Act 17 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. 

Pursuant to Section 19(b)(2)(B) of the 

Act,18 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.’’ 19

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.20

As discussed above, the Exchange is 

proposing 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 

asserts 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 

Federal Register / Vol. 85, No. 245 / Monday, December 21, 2020 / Notices 83115 

21Rule 700(b)(3), Commission Rules of Practice, 

17 CFR 201.700(b)(3). 

22See id. 

23Section 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). 

24 17 CFR 200.30–3(a)(57). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

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, noncompliant companies could be listed on 

the Exchange despite not meeting initial 

listing standards, 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.’’ 21 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.22

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.23

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposal should be approved or 

disapproved by January 11, 2021. Any 

person who wishes to file a rebuttal to 

any other person’s submission must file 

that rebuttal by January 25, 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 rule-comments@

sec.gov. Please include File Number SR– 

NASDAQ–2020–062 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–2020–062. 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–NASDAQ–2020–062 and 

should be submitted by January 11, 

2021. Rebuttal comments should be 

submitted by January 25, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28066 Filed 12–18–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90676; File No. SR–CBOE– 

2020–114] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Relating To Amend Its 

Fees Schedule 

December 15, 2020. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on December 

1, 2020, Cboe Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘Cboe Options’’) filed 

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons.