Federal Register / Vol. 86, No. 19 / Monday, February 1, 2021 / Notices 7759 

27See supra note 14 and accompanying text. 

28See supra notes 12–13 and accompanying text. 

29For example, SPACs listed on the Nasdaq 

Capital Market under the Market Value of Listed 

Securities Standard would be required to have at 

least 1,000,000 unrestricted publicly held shares, at 

least 300 round lot holders that hold unrestricted 

shares, a minimum market value of listed securities 

of $50 million, a minimum market value of 

unrestricted publicly held shares of at least $15 

million, and at least three registered and active 

market makers. See Nasdaq Rules 5505(a)–(b). See 

also Nasdaq Rules 5315(e)–(f) (Nasdaq Global Select 

Market) and 5405(a)–(b) (Nasdaq Global Market). 

The Commission understands that, although 

Nasdaq’s rules provide alternative standards to 

satisfy in lieu of the market value standards, SPACs 

typically list under the market value standard given 

that they have no prior operating history. 30Required Minimum Amount Approval Order, 

supra note 7, at 33111. See also supra note 7. 31See, e.g., New York Stock Exchange LLC 

(‘‘NYSE’’) Listed Company Manual Section 102.06. 

The Commission notes that NYSE’s initial listing 

standards for SPACs, which require an aggregate 

market value of $100 million and market value of 

publicly-held shares of $80 million, are generally 

higher than those on Nasdaq. See supra notes 17 

and 29. See also NYSE American LLC Company 

Guide Sections 102 and 119. 

32 15 U.S.C. 78s(b)(2). 33 17 CFR 200.30–3(a)(12). 

Required Minimum Amount is 

necessary to demonstrate genuine 

investor interest in the operating 

company to support an exchange listing, 

SPACs do not present a similar risk of 

circumventing the round lot holder 

requirement through share transfers for 

no value and that removing this 

requirement will not impact the 

protection of investors.27

Given the differences between SPACs 

and operating companies, including in 

their structure, and the rights of SPAC 

shareholders to convert or redeem their 

shares upon a business combination for 

a pro rata portion of the IPO proceeds 

maintained in a trust account, the 

Commission believes that it is 

reasonable and not unfairly 

discriminatory for the Exchange to 

exclude SPACs from the requirement to 

meet the Required Minimum Amount at 

the time of initial listing of the SPAC. 

Specifically, the Commission believes 

the Exchange has provided a reasonable 

basis for its proposal to differentiate 

SPACs from operating companies in 

terms of the requirement to comply with 

the Required Minimum Amount upon 

initial listing given that, in the 

Exchange’s experience, SPACs do not 

appear to present a similar risk of 

circumventing the round lot holder 

requirement through share transfers for 

no value. As the Exchange states in its 

proposal, typically the only investors 

holding shares in a SPAC prior to an 

IPO are its founders, whereas other 

round lot holders generally represent 

new investors, in contrast to the 

Exchange’s experience with operating 

companies.28

Further, the Exchange’s other initial 

listing requirements will remain 

applicable to SPACs at the time of their 

initial listing including, among other 

things, that round lot holders hold 

unrestricted shares and that SPACs will 

continue to meet the minimum number 

and market value of unrestricted 

publicly held shares requirements as 

well as the other listing requirements on 

the applicable market tier, in addition to 

the specific listing criteria applicable to 

SPACs.29 As the Commission stated 

when approving the Exchange’s 

amendments to exclude restricted 

securities from its calculation of a 

company’s publicly held shares, market 

value of publicly held shares, and round 

lot holders for purposes of qualifying 

the company’s securities for initial 

listing, the amendments ‘‘should allow 

the Exchange to more accurately 

determine whether a security has 

adequate distribution and liquidity and 

is thus suitable for listing and trading on 

the Exchange.’’ 30 In addition, all initial 

listing requirements apply to the 

combined company upon 

consummation of a business 

combination, which would include the 

Required Minimum Amount. The 

Commission therefore believes the 

Exchange’s current listing rules will 

continue to provide appropriate listing 

standards for SPAC securities, both 

prior to and after the completion of any 

business combination. Moreover, 

investors in SPACs will continue to 

have the ability to convert or redeem 

their shares for cash into a pro rata share 

of the amount in the trust account, 

pursuant to the provisions of Nasdaq 

Rules IM–5101–2(d) and (e). 

These other listing requirements, 

taken together, should continue to help 

ensure that SPACs are listed only if 

there will be a sufficient market, with 

adequate depth and liquidity and with 

sufficient investor interest to support an 

exchange listing, and will continue to 

provide investors the redemption 

feature. The Commission also notes that 

the Exchange’s proposal is consistent 

with SPAC listing standards on other 

listing exchanges that do not require 

round lot holders to hold unrestricted 

securities of a minimum market value 

amount.31 For the reasons discussed 

above, the Commission believes the 

Exchange’s proposal is consistent with 

the requirements of Section 6(b)(5) of 

the Act and with the maintenance of fair 

and orderly markets under the Act. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,32 that the 

proposed rule change, as modified by 

Amendment No. 1 (SR–NASDAQ–2020– 

069), be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.33

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–02010 Filed 1–29–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meetings 

TIME AND DATE: 2:00 p.m. on Thursday, 

February 4, 2021. 

PLACE: The meeting will be held via 

remote means and/or at the 

Commission’s headquarters, 100 F 

Street NE, Washington, DC 20549. 

STATUS: This meeting will be closed to 

the public. 

MATTERS TO BE CONSIDERED: 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the closed meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

In the event that the time, date, or 

location of this meeting changes, an 

announcement of the change, along with 

the new time, date, and/or place of the 

meeting will be posted on the 

Commission’s website at https://

www.sec.gov. 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) 

and (10) and 17 CFR 200.402(a)(3), 

(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and 

(a)(10), permit consideration of the 

scheduled matters at the closed meeting. 

The subject matter of the closed 

meeting will consist of the following 

topics: 

Institution and settlement of 

injunctive actions; 

Institution and settlement of 

administrative proceedings; 

Resolution of litigation claims; and 

Other matters relating to examinations 

and enforcement proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting agenda items that 

may consist of adjudicatory, 

examination, litigation, or regulatory 

matters. 

CONTACT PERSON FOR MORE INFORMATION: 

For further information; please contact 

Vanessa A. Countryman from the Office 

of the Secretary at (202) 551–5400. 

7760 Federal Register / Vol. 86, No. 19 / Monday, February 1, 2021 / Notices 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(iii). 

4 17 CFR 240.19b–4(f)(6). 

5Section 220.2 of Regulation T of the Board of 

Governors of the Federal Reserve System defines 

‘‘current market value’’ of a security as (1) 

throughout the day of the purchase or sale of a 

security, the security’s total cost of purchase or the 

net proceeds of its sale including any commissions 

charged; or (2) at any other time, the closing sale 

price of the security on the preceding business day, 

as shown by any regularly published reporting or 

quotation service. If there is no closing sale price, 

the creditor may use any reasonable estimate of the 

market value of the security as of the close of 

business on the preceding business day.’’ See 12 

CFR 220.2. The term ‘‘marking’’ value is often used 

to refer to the current market value for capital and 

margin purposes. The proposed rule change 

corrects the reference to Section 220.3 in the 

definition of current market value in Rule 10.3(a)(2) 

to be Section 220.2. 

6The Exchange notes the Options Clearing 

Corporation (‘‘OCC’’) calculates the daily margin 

requirements for Clearing Members’ options 

positions at OCC. The Exchange understands OCC 

intends to incorporate a corresponding change 

regarding the time at which the value of a series is 

determined into its procedures for calculating 

margin requirements. 

7See Rule 5.1(b)(2); see also closing times for ETF 

options, available at https://www.cboe.com/us/ 

options/market_statistics/symbol_reference/ 

?mkt=cone&underlying=1. 8The Exchange notes the daily margin 

requirements for all other ETF options that close at 

4:00 p.m. Eastern time are based on the closing 

trade at that time. 

Dated: January 28, 2021. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2021–02155 Filed 1–28–21; 11:15 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90990; File No. SR–CBOE– 

2021–006] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Relating To Amend the 

Definition of ‘‘Current Market Value’’ for 

Purposes of Calculating Margin 

Requirements for Certain Options 

January 26, 2021. 

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 January 

14, 2021, 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 

Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A)(iii) of 

the Act 3 and Rule 19b–4(f)(6) 

thereunder.4 The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to amend 

the definition of ‘‘current market value’’ 

for purposes of calculating margin 

requirements for certain options. The 

text of the proposed rule change is 

provided below. 

(additions are italicized; deletions are 

[bracketed]) 

* * * * * 

Rules of Cboe Exchange, Inc. 

* * * * * 

Rule 10.3. Margin Requirements 

(a) Definitions. For purposes of this Rule, 

the following terms shall have the meanings 

specified below. 

(1) No change. 

(2) The term ‘‘current market value’’ is as 

defined in Section 220.[3]2 of Regulation T 

of the Board of Governors of the Federal 

Reserve System. At any other time, in the 

case of options, stock index warrants, 

currency index warrants and currency 

warrants, it shall mean the closing price of 

that series of options or warrants on the 

Exchange on any day with respect to which 

a determination of current market value is 

made, except in the case of certain index and 

ETF options determined by the Exchange, it 

shall be based on quotes for that series of 

options on the Exchange 15 minutes prior to 

the close of trading on any day with respect 

to which a determination of current market 

value is made. In the case of other securities, 

it shall mean the preceding business day’s 

closing price as shown by any regularly 

published reporting or quotation service. If 

there is no closing price or quotes, as 

applicable, on the option or on another 

security, a TPH organization may use a 

reasonable estimate of the current market 

value of the security as of the close of 

business or as of 15 minutes prior to the 

closing of trading, respectively, on the 

preceding business day. 

* * * * * 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/CBOELegal

RegulatoryHome.aspx), at the 

Exchange’s Office of the Secretary, and 

at the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend the 

definition of ‘‘current market value’’ 

with respect to certain ETF options for 

purposes of calculating margin 

requirements. Rule 10.3(a)(2) currently 

defines the term ‘‘current market value’’ 

as follows: 

The term ‘‘current market value’’ is as 

defined in Section 220.3 of Regulation T of 

the Board of Governors of the Federal 

Reserve System. At any other time, in the 

case of options, stock index warrants, 

currency index warrants and currency 

warrants, it shall mean the closing price of 

that series of options or warrants on the 

Exchange on any day with respect to which 

a determination of current market value is 

made, except in the case of certain index 

options determined by the Exchange, it shall 

be based on quotes for that series of options 

on the Exchange 15 minutes prior to the close 

of trading on any day with respect to which 

a determination of current market value is 

made. In the case of other securities, it shall 

mean the preceding business day’s closing 

price as shown by any regularly published 

reporting or quotation service. If there is no 

closing price or quotes, as applicable, on the 

option or on another security, a TPH 

organization may use a reasonable estimate of 

the current market value of the security as of 

the close of business or as of 15 minutes prior 

to the closing of trading, respectively, on the 

preceding business day.5

Rule 10.3 and other Rules in Chapter 

10 of the Exchange’s Rulebook describe 

how margin requirements are calculated 

for market participants’ positions in 

options (and certain other securities), 

including strategy-based margin and 

customer portfolio margin requirements, 

which requirements are generally based 

on the current market value of the 

option series. These requirements are 

determined on a daily basis for market 

participants’ securities accounts that 

hold options positions.6 Currently, 43 

ETF options that are listed for trading 

on the Exchange close for trading at 4:15 

p.m. Eastern time.7 Therefore, daily 

margin requirements for those options 

are currently based on the closing trade 

prices of those options series at that 

time.8