84434 Federal Register / Vol. 85, No. 248 / Monday, December 28, 2020 / Notices 

10 15 U.S.C. 78s(b)(2). 11 Id. 12 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 89875 

(September 15, 2020), 85 FR 59346 (‘‘Notice’’). 

4 IM–5101–2 imposes additional listing 

requirements on a company whose business plan is 

to complete an initial public offering (‘‘IPO’’) and 

engage in a merger or acquisition with one or more 

unidentified companies within a specific period of 

time (‘‘Acquisition Companies’’). 

5See Notice, supra note 3, 85 FR at 59347. As 

Nasdaq states in its rule proposal, the combined 

company would again have to satisfy all initial 

listing requirements at the time of the business 

combination. See IM–5101–2(d) and (e); Notice, 

supra note 3, 85 FR at 59347. If the Company does 

not meet the requirements for initial listing or does 

not comply with one of the requirements set forth 

in IM–5101–2, Nasdaq will issue a Staff Delisting 

Determination under Nasdaq Rule 5810 to delist the 

company’s securities. 

6See IM–5900–7(e). Specifically, within 36 

months of the effectiveness of its IPO registration 

statement, or such shorter period that the company 

specifies in its registration statement, the company 

must complete one or more business combinations 

having an aggregate fair market value of at least 

80% of the value of the deposit account (excluding 

any deferred underwriters fees and taxes payable on 

the income earned on the deposit account) at the 

time of the agreement to enter into the initial 

combination. See IM–5101–2(b). 

7See Notice, supra note 3, 85 FR at 59347. 

8See Notice, supra note 3, 85 FR at 59347. In 

particular, an Eligible Switch with a market 

capitalization less than $750 million receives the 

same package of services for the same two year term 

as an Eligible New Listing. But an Eligible Switch 

with a market capitalization of $750 million or 

more receives services with a higher total retail 

value than a comparably sized Eligible New Listing 

and will receive those services for four years 

instead of two years. See Notice, supra note 3, 85 

FR at 59347, n.8. 

9See Notice, supra note 3, 85 FR at 59347 (stating 

that in this scenario the company would not be 

listing on Nasdaq as an Acquisition Company). 

10See Notice, supra note 3, 85 FR at 59347. 

Nasdaq states that, otherwise, multiple markets 

would need to coordinate the removal of the 

company’s securities from one market, a change in 

the name and symbol of the securities, and the 

addition of securities to another market, which all 

occurs in conjunction with the closing of the 

business combination (itself a significant corporate 

event). See id. 

11See proposed IM 5900–7(a)(2). According to 

Nasdaq, in the event that the Acquisition Company 

terminates the business combination that was 

announced when it switched, it would not be 

eligible to receive services as an Eligible Switch 

functionalities of other exchanges. 

Accordingly, the Commission finds 

good cause, pursuant to Section 19(b)(2) 

of the Act,10 to approve the proposed 

rule change, as modified by Amendment 

No. 1, on an accelerated basis. 

VI. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,11 that the 

proposed rule change (SR–NYSE–2020– 

87), as modified by Amendment No. 1, 

be, and hereby is, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28522 Filed 12–23–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90729; File No. SR– 

NASDAQ–2020–060] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Order 

Approving a Proposed Rule Change, 

as Modified by Amendment No. 1, To 

Treat as an Eligible Switch, for 

Purposes of IM–5900–7, an Acquisition 

Company That Switches From NYSE to 

Nasdaq After Announcing a Business 

Combination 

December 18, 2020. 

I. Introduction 

On September 1, 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 

treat as an Eligible Switch, for purposes 

of IM–5900–7, an Acquisition Company 

that switches from the New York Stock 

Exchange (‘‘NYSE’’) to Nasdaq after 

announcing a business combination. On 

September 14, 2020, the Exchange filed 

Amendment No. 1 to the proposed rule 

change, which amended and replaced 

the proposed rule change in its entirety. 

The proposed rule change, as modified 

by Amendment No. 1, was published in 

the Federal Register on September 21, 

2020.3 The Commission received no 

comments on the proposal, as modified 

by Amendment No. 1. This order 

approves the proposed rule change, as 

modified by Amendment No. 1. 

II. Description of the Proposal 

Nasdaq proposes to modify IM–5900– 

7 to treat as an Eligible Switch under 

that rule any Acquisition Company 4

that both: (i) Switched its listing from 

NYSE to list on Nasdaq under IM–5101– 

2 after the company publicly announced 

that it entered into a binding agreement 

for a business combination; and (ii) 

subsequently satisfies the conditions in 

IM–5101–2(b) and lists on the Nasdaq 

Global or Global Select Markets, by 

meeting all listing requirements of one 

of these market tiers, in conjunction 

with that business combination.5

Currently, a company completing a 

business combination with a Nasdaqlisted Acquisition Company is eligible 

to receive services under IM–5900–7 

when it lists, by meeting the listing 

requirements on the Nasdaq Global or 

Global Select Market, in conjunction 

with a business combination that 

satisfies the conditions in IM–5101– 

2(b).6 According to Nasdaq, at this 

point, the Acquisition Company 

transitions to being an operating 

company and has a similar need as 

other companies for shareholder 

communication services, market 

analytic tools and market advisory tools. 

Nasdaq states that, for this purpose, the 

Acquisition Company is treated as an 

‘‘Eligible New Listing’’ under the rule, 

similar to a company listing in 

connection with its IPO.7

Additionally, under IM–5900–7, 

Nasdaq treats a company that switches 

its listing from NYSE to the Nasdaq 

Global or Global Select Market as an 

‘‘Eligible Switch’’ and, according to 

Nasdaq, offers such companies a 

package of services that can be more 

valuable than the package of services 

offered to Eligible New Listings.8

Nasdaq states that, under the current 

rule, an Acquisition Company listed on 

NYSE that switches to Nasdaq as an 

Acquisition Company would not receive 

any services when it switches, even if it 

has already announced its business 

combination, but would receive services 

as an Eligible New Listing when it 

completes a business combination that 

satisfies the requirements of IM–5101– 

2(b). However, if the company waits 

until it completes a business 

combination and then switches to 

Nasdaq, the company would receive 

services as an Eligible Switch.9

According to Nasdaq, removing the 

existing incentive for an Acquisition 

Company to delay switching its listing 

to Nasdaq until the time of its business 

combination will allow Nasdaq to 

process both the removal of the 

Acquisition Company and the 

simultaneous addition of the operating 

company, which will help ensure that 

the transaction is processed smoothly 

for the benefit of the company’s 

investors.10

Pursuant to the proposed rule change, 

Nasdaq proposes to treat as an Eligible 

Switch any company that switches its 

listing from NYSE and lists on Nasdaq 

under IM–5101–2 after the company has 

publicly announced that it entered into 

a binding agreement for a business 

combination and that subsequently 

satisfies the conditions in IM–5101–2(b) 

and lists on the Global or Global Select 

Market in conjunction with that 

business combination.11 Nasdaq states 


tkelley on DSKBCP9HB2PROD with NOTICES
Federal Register / Vol. 85, No. 248 / Monday, December 28, 2020 / Notices 84435 

under the proposed rule; however, if the 

Acquisition Company subsequently completes a 

different business combination it may be eligible to 

receive services as an Eligible New Listing as 

described in existing IM–5900–7(e). See Notice, 

supra note 3, 85 FR at 59347, n.9. 

12See Notice, supra note 3, 85 FR at 59347. 

13See Notice, supra note 3, 85 FR at 59347–48. 

14See Notice, supra note 3, 85 FR at 59348. 

15See Notice, supra note 3, 85 FR at 59348. 

16 15 U.S.C. 78f. In approving this proposed rule 

change, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

17 15 U.S.C. 78f(b)(4) and (5). 

18 15 U.S.C. 78f(b)(8). 

19See Notice, supra note 3, 85 FR at 59348. 

20See id. 

21 15 U.S.C. 78f(b)(5); see also Securities 

Exchange Act Release No. 65963 (December 15, 

2011), 76 FR 79262, 79266 (December 21, 2011) 

(approving NASDAQ–2011–122) (‘‘2011 Approval 

Order’’) (‘‘The Commission believes that NASDAQ 

has provided a sufficient basis for its different 

treatment of Eligible Switches and that this portion 

of NASDAQ’s proposal meets the requirements of 

the Act in that it reflects competition between 

exchanges, with NASDAQ offering discounts for 

transfers of listings from a competing exchange.’’). 

22See supra note 8 and accompanying text. 

23See supra note 11. 

24See Securities Exchange Act Release No. 79366 

(November 21, 2016), 81 FR 85663, 85665 

(November 28, 2016) (approving Nasdaq–2016–106) 

(‘‘2016 Approval Order’’) (citing Securities 

Exchange Act Release No. 65127 (August 12, 2011), 

76 FR 51449, 51452 (August 18, 2011) (approving 

NYSE–2011–20)). The Commission notes that the 

Exchange represents that no other company will be 

required to pay higher fees as a result of the 

proposal and that the proposal will have no impact 

on the resources available for its regulatory 

programs. See supra note 14 and accompanying 

text. 

that an Acquisition Company could 

only switch its listing to Nasdaq if it 

satisfies all of Nasdaq’s initial listing 

requirements. Nasdaq further states that 

the combined company would again 

have to satisfy all initial listing 

requirements at the time of the business 

combination.12 According to Nasdaq, as 

under existing rules, the Acquisition 

Company itself would not receive 

services as an Eligible Switch under the 

proposed rule and the services would 

only be available to the company upon 

completing its business combination 

and listing on the Nasdaq Global or 

Global Select Markets pursuant to the 

conditions described in IM–5900–7(e).13

Nasdaq represents that no other 

company will be required to pay higher 

fees as a result of the proposed 

amendments and that providing these 

services will have no impact on the 

resources available for its regulatory 

programs.14

Finally, Nasdaq states that it proposes 

non-substantive technical amendments 

to IM–5900–7. Specifically, Nasdaq 

states that it proposes to eliminate most 

of the description of the history of the 

rule from the rule text because it is no 

longer applicable to any companies. 

However, Nasdaq further states that it 

proposes to relocate to a new paragraph 

(g) and make minor non-substantive 

changes to the discussion about the 

2018 change to the services offered 

because some companies are still 

eligible to receive services under the 

rule in effect prior to the 2018 change. 

Nasdaq also proposes to renumber other 

paragraphs of the rule in order to 

improve the rule’s readability.15

III. Discussion and Commission’s 

Findings 

The Commission has carefully 

reviewed the proposed rule change and 

finds that it is consistent with the 

requirements of Section 6 of the Act.16

Specifically, the Commission believes 

the proposed rule change is consistent 

with the provisions of Sections 6(b)(4) 

and (5) of the Act,17 in particular, in that 

it is designed to provide for the 

equitable allocation of reasonable dues, 

fees, and other charges among Exchange 

members, issuers, and other persons 

using the Exchange’s facilities, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general to protect investors and the 

public interest and is not designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

Moreover, the Commission believes that 

the proposed rule change is consistent 

with Section 6(b)(8) of the Act 18 in that 

it does not impose any burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

The Commission believes that it is 

consistent with the Act for the Exchange 

to treat as an Eligible Switch, for 

purposes of IM–5900–7, an Acquisition 

Company that (i) switched its listing 

from NYSE to list on Nasdaq under IM– 

5101–2 after the company publicly 

announced that it entered into a binding 

agreement for a business combination; 

and (ii) subsequently satisfies the 

conditions in IM–5101–2(b) and lists on 

the Nasdaq Global or Global Select 

Markets in conjunction with that 

business combination. According to the 

Exchange, an Acquisition Company may 

reconsider its listing market following 

the public announcement of a business 

combination that is intended to satisfy 

the conditions in IM–5101–2(b) in 

connection with its rebranding and the 

launch of the operating company as a 

public company. Moreover, according to 

the Exchange, the consideration about 

whether to switch markets is roughly 

the same for an Acquisition Company 

that has publicly announced a business 

combination as it is for other companies 

that are considered Eligible Switches. 

The Exchange believes that treating the 

company as an Eligible Switch would 

provide an incentive to the company to 

list on Nasdaq.19 In addition, the 

Exchange believes that in most 

instances involving an Acquisition 

Company that has announced a business 

combination, the operating company 

plays a significant role in deciding 

where to list the combined company. 

The Exchange asserts, accordingly, it is 

not unfair to treat an Acquisition 

Company that has announced a business 

combination differently from one that 

has not yet made such an 

announcement.20

As noted in the Commission’s 

previous order approving IM–5900–7, 

Section 6(b)(5) of the Act does not 

require that all issuers be treated the 

same; rather, the Act requires that the 

rules of an Exchange not unfairly 

discriminate between issuers.21 The 

Commission believes that the Exchange 

has reasonably justified treating an 

Acquisition Company transferring its 

listing from NYSE under the 

circumstances described above as an 

Eligible Switch and that it reflects the 

competition between the exchanges, 

with the Exchange offering a more 

valuable package of services for 

transfers of listings from a competing 

exchange.22 The Commission further 

notes that such companies will be 

receiving the same package of services 

as any other Eligible Switch and will 

not be receiving any additional benefits 

or services by virtue of the proposed 

rule change. In addition, the 

Commission notes that if the 

Acquisition Company terminates its 

announced business combination, it 

would not be eligible to receive services 

as an Eligible Switch, but the 

Acquisition Company may be eligible to 

receive services as an Eligible New 

Listing if it subsequently completes a 

different business combination.23

The Commission also believes that 

describing in the Exchange’s rules the 

products and services available to listed 

companies and their associated values 

will ensure that individual listed 

companies, including Acquisition 

Companies, are not given specially 

negotiated packages of products or 

services to list, or remain listed, that 

would raise unfair discrimination issues 

under the Act.24 The Commission has 

previously found that the package of 

complimentary services offered to 

Eligible New Listings and Eligible 

Switches is equitably allocated among 

issuers consistent with Section 6(b)(4) of 

the Act and that describing the values 


tkelley on DSKBCP9HB2PROD with NOTICES
84436 Federal Register / Vol. 85, No. 248 / Monday, December 28, 2020 / Notices 

25See 2016 Order, supra note 24, 81 FR at 85665; 

2011 Approval Order, supra note 21, 76 FR at 

79266. 

26See supra note 10 and accompanying text. 

27See supra note 11 and accompanying text. 

28As Nasdaq states in its filing, ‘‘[o]f course an 

Acquisition Company could only switch its listing 

to Nasdaq if it satisfies all of Nasdaq’s initial listing 

requirements. In addition, the combined company 

would again have to satisfy all initial listing 

requirements at the time of the business 

combination.’’ Notice, supra note 3, 85 FR at 59347. 

29 15 U.S.C. 78f(b)(8). 

30 15 U.S.C. 78f(b)(5). 

31 15 U.S.C. 78s(b)(2). 

32 17 CFR 200.30–3(a)(12). 

of the services adds greater transparency 

to the Exchange’s rules and to the fees 

applicable to such companies.25 Based 

on the foregoing, the Commission 

believes that the Exchange has provided 

a sufficient basis for treating as an 

Eligible Switch, for purposes of IM– 

5900–7, an Acquisition Company that 

switches from NYSE to Nasdaq after 

announcing a business combination and 

satisfies the conditions in IM–5101–2(b) 

and lists on the Nasdaq’s Global or 

Global Select Markets by meeting all 

listing requirements and that this 

change does not unfairly discriminate 

among issuers and is therefore 

consistent with Section 6(b)(5) of the 

Act. For similar reasons, and as the 

value of services offered to an Eligible 

Switch is not changing, only whether 

certain Acquisition Companies are 

treated as an Eligible Switch instead of 

an Eligible Listing, the Commission 

believes that the proposal is consistent 

with Section 6(b)(4) of the Act. 

Further, the Exchange asserts that its 

proposal removes an incentive for an 

Acquisition Company to wait until the 

consummation of a business 

combination to change listing exchanges 

if it would like to receive the more 

valuable package of services, which 

otherwise makes it more difficult to 

process the listing determinations 

smoothly.26 As noted above, under the 

proposal the Acquisition Company will 

be treated as an Eligible Switch only in 

connection with the business 

combination that was announced prior 

to the transfer of its listing to Nasdaq.27

Therefore, the proposal appears to be 

narrowly crafted and does not permit 

the company to be treated as an Eligible 

Switch indefinitely should the 

announced business combination be 

terminated. Based on the above, the 

Commission believes that the proposal 

should remove impediments to the 

operation of a free and open market and 

protect investors and the public interest, 

consistent with Section 6(b)(5) of the 

Act. 

The Exchange has also stated that the 

proposal would provide an incentive for 

a company to list on Nasdaq given that 

companies often reconsider their listing 

market at the time of a public 

announcement to a business 

combination in connection with its 

rebranding and the launch of the 

operating company. As noted above, the 

Commission also believes that the 

Exchange is responding to competitive 

pressures in the market for listings in 

making this proposal. The Exchange 

states in its proposal that it faces 

competition in the market for listing 

services and the Commission 

understands that the Exchange 

competes, in part, by offering 

complimentary services to companies. 

Specifically, the Exchange is offering a 

more valuable listing package of 

complementary services to Acquisition 

Companies that transfer from NYSE at 

the time that they announce a business 

combination, and later satisfy the 

conditions in IM–5901–2(b) and all the 

initial listing requirements at the time of 

the business combination to list on the 

Nasdaq Global or Global Select 

Markets,28 to attract new listings. 

Accordingly, the Commission believes 

that the proposed rule reflects the 

current competitive environment for 

exchange listings among national 

securities exchanges, and is appropriate 

and consistent with Section 6(b)(8) of 

the Act.29

Finally, the Commission finds that it 

is consistent with Section 6(b)(5) of the 

Act 30 for the Exchange to make various 

technical and conforming revisions to 

facilitate clarity of its Rules. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,31 that the 

proposed rule change, as modified by 

Amendment No. 1 (SR–NASDAQ–2020– 

060), be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.32

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28518 Filed 12–23–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. PA–56; File No. S7–21–20] 

Privacy Act of 1974; System of 

Records 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Rescindment of system of record 

notice. 

SUMMARY: Pursuant to the Privacy Act of 

1974 (5 U.S.C. 552a) and Office of 

Management and Budget (OMB) 

Circular No. A–108, the Securities and 

Exchange Commission (Commission or 

SEC) proposes to rescind four existing 

systems of records. The Notice of 

Rescindment identifies the system of 

records, explains why the SORN is 

being rescinded, and provides an 

account of what will happen to the 

records previously maintained in the 

system. 

DATES: The rescindments will become 

effective on February 8, 2021. 

ADDRESSES: 

Comments may be submitted by any 

of the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/submitcomments.htm); or 

• Send an email to rule-comments@

sec.gov. Please include File Number S7– 

21–20 on the subject line. 

Paper Comments 

Send paper comments in triplicate to 

Vanessa A. Countryman, Secretary, U.S. 

Securities and Exchange Commission, 

100 F Street NE, Washington, DC 

20549–1090. All submissions should 

refer to S7–21–20. This file number 

should be included on the subject line 

if email is used. To help 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/other.shtml). 

Comments are also 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 a.m. and 3 p.m. All 

comments received will be posted 

without change; we do not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. 

FOR FURTHER INFORMATION CONTACT: 

Ronnette McDaniel, Privacy and 

Information Assurance Branch Chief, 

202–551–7200 or privacyhelp@sec.gov. 

SUPPLEMENTARY INFORMATION: Four 

systems were identified for rescindment 

from the SEC’s Privacy Act systems of 

records inventory. The SORNs were 

identified for rescindment because they 

are duplicative, and covered by another 

SEC system of records. OMB requires 

that each agency provide assurance that 

systems of records do not duplicate any 

existing agency or government-wide 

systems of records. A description of 


tkelley on DSKBCP9HB2PROD with NOTICES