Federal Register / Vol. 86, No. 29 / Tuesday, February 16, 2021 / Notices 9549 

22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Nasdaq proposed a similar rule change in May 

2020, which was withdrawn by Nasdaq on 

February, 1, 2021. Securities Exchange Act Release 

No. 89027 (June 8, 2020), 85 FR 35962 (June 12, 

2020) (SR–Nasdaq–2020–027). The Commission 

issued an Order Instituting Proceedings to 

Determine Whether to Approve or Disapprove this 

proposal. Securities Exchange Act Release No. 

89799 (September 9, 2020), 85 FR 57282 (September 

15, 2020). This revised proposal addresses the 

concerns raised by the Commission in its Order. 

4See Rule 5210(b) (‘‘Each Company applying for 

initial listing must be audited by an independent 

public accountant that is registered as a public 

accounting firm with the Public Company 

Accounting Oversight Board, as provided for in 

Section 102 of the Sarbanes-Oxley Act of 2002 [15 

U.S.C. 7212].’’) and Rule 5250(c)(3) (‘‘Each listed 

Company shall be audited by an independent 

public accountant that is registered as a public 

accounting firm with the Public Company 

Accounting Oversight Board, as provided for in 

Section 102 of the Sarbanes-Oxley Act of 2002 [15 

U.S.C. 7212].’’). 

5See Section 4100—Qualifications of 

Accountants, SEC Financial Reporting Manual 

(June 30, 2009), available at https://www.sec.gov/ 

corpfin/cf-manual/topic-4/. 

6See PCAOB Auditing Standard 1101.03—Audit 

Risk, available at https://pcaobus.org/Standards/ 

Auditing/Pages/AS1101.aspx. 

All submissions should refer to File 

Number SR–NYSE–2021–10. 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–2021–10, and 

should be submitted on or before March 

9, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–02991 Filed 2–12–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91089; File No. SR– 

NASDAQ–2021–007] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing of Proposed Rule Change To 

Adopt Additional Initial Listing Criteria 

for Companies Primarily Operating in 

Jurisdictions That Do Not Provide the 

PCAOB With the Ability To Inspect 

Public Accounting Firms 

February 9, 2021. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on February 

1, 2021, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to adopt 

additional initial listing criteria for 

companies primarily operating in 

jurisdictions that do not currently 

provide the PCAOB with the ability to 

inspect public accounting firms. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/nasdaq/rules, at the principal 

office of the Exchange, 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 

As described below, Nasdaq proposes 

to adopt additional initial listing criteria 

for companies primarily operating in 

jurisdictions that do not currently 

provide the Public Company 

Accounting Oversight Board (‘‘PCAOB’’) 

with the ability to inspect public 

accounting firms.3

Nasdaq rules 4 and federal securities 

laws 5 require a company’s financial 

statements included in its initial 

registration statement or annual report 

to be audited by an independent public 

accountant that is registered with the 

PCAOB. Company management is 

responsible for preparing the company’s 

financial statements and for establishing 

and maintaining disclosure controls and 

procedures and internal control over 

financial reporting. The company’s 

auditor, based on its independent audit 

of the evidence supporting the amounts 

and disclosures in the financial 

statements, expresses an opinion on 

whether the financial statements present 

fairly, in all material respects, the 

company’s financial position, results of 

operations and cash flows. ‘‘To form an 

appropriate basis for expressing an 

opinion on the financial statements, the 

auditor must plan and perform the audit 

to obtain reasonable assurance about 

whether the financial statements are free 

of material misstatement due to error or 

fraud.’’ 6

The auditor, in turn, is normally 

subject to inspection by the PCAOB, 


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7See Public Company Accounting Oversight 

Board, Public Companies that are Audit Clients of 

PCAOB-Registered Firms from Non-U.S. 

Jurisdictions where the PCAOB is Denied Access to 

Conduct Inspections (October 1, 2020), available at 

https://pcaobus.org/oversight/international/deniedaccess-to-inspections. 

8See SEC Chairman Jay Clayton, SEC Chief 

Accountant Wes Bricker and PCAOB Chairman 

William D. Duhnke III, Statement on the Vital Role 

of Audit Quality and Regulatory Access to Audit 

and Other Information Internationally—Discussion 

of Current Information Access Challenges with 

Respect to U.S.-listed Companies with Significant 

Operations in China (December 7, 2018), available 

at https://www.sec.gov/news/public-statement/ 

statement-vital-role-audit-quality-and-regulatoryaccess-audit-and-other (‘‘Positions taken by some 

foreign authorities currently prevent or significantly 

impair the PCAOB’s ability to inspect non-U.S. 

audit firms in certain countries, even though these 

firms are registered with the PCAOB.’’). On April 

21, 2020, these concerns were reiterated by the 

Chairman and the Chief Accountant of the 

Commission, along with the Chairman of the 

PCAOB and the Directors of the SEC Divisions of 

Corporation Finance and Investment Management. 

See SEC Chairman Jay Clayton, PCAOB Chairman 

William D. Duhnke III, SEC Chief Accountant Sagar 

Teotia, SEC Division of Corporation Finance 

Director William Hinman, SEC Division of 

Investment Management Director Dalia Blass, 

Emerging Market Investments Entail Significant 

Disclosure, Financial Reporting and Other Risks; 

Remedies are Limited (April 21, 2020), available at 

https://www.sec.gov/news/public-statement/ 

emerging-market-investments-disclosure-reporting. 

See also Chairman Jay Clayton’s Statement at the 

SEC’s Emerging Markets Roundtable (July 9, 2020), 

available at https://www.sec.gov/news/publicstatement/clayton-emerging-markets-roundtable2020-07-09. 

9See Congress Passes Legislation to De-List 

Chinese Companies Unless U.S. Has Access to 

Audit Workpapers (December 2, 2020), available at 

https://sherman.house.gov/media-center/pressreleases/congress-passes-legislation-to-de-listchinese-companies-unless-us-has; see also SEC 

Chairman Jay Clayton, Statement after the 

Enactment of the Holding Foreign Companies 

Accountable Act (December 18, 2020), available at 

https://www.sec.gov/news/public-statement/ 

clayton-hfcaa-2020-12#_ftn5. 

10See Press Statement of Michael R. Pompeo, 

Secretary of State, New Nasdaq Restrictions 

Affecting Listing of Chinese Companies (June 4, 

2020), available at https://www.state.gov/newnasdaq-restrictions-affecting-listing-of-chinesecompanies/. 

11See President’s Working Group on Financial 

Markets: Report on Protecting United States 

Investors from Significant Risks from Chinese 

Companies (July 24, 2020), available at https://

home.treasury.gov/system/files/136/PWG-Reporton-Protecting-United-States-Investors-fromSignificant-Risks-from-Chinese-Companies.pdf. 

12See supra note 7. The PCAOB notes that ‘‘[t]he 

position taken by authorities in mainland China 

may in some circumstances cause a registered firm 

located in another jurisdiction to attempt to resist 

PCAOB inspection of public company audit work 

that the firm has performed relating to the 

company’s operations in mainland China. Only in 

mainland China and Hong Kong, however, is the 

position of the Chinese authorities effectively an 

obstacle to inspection of all, or nearly all, registered 

firms in the jurisdiction.’’ In addition, the PCAOB’s 

cooperative arrangement with the French audit 

authority expired in December 2019, preventing 

inspections of registered firms in France until a new 

arrangement is concluded. According to the 

PCAOB, it expects to enter into bilateral cooperative 

arrangements soon ‘‘that will permit the PCAOB to 

commence inspections in Belgium and resume 

inspections in France.’’ 

13See SEC Chairman Jay Clayton, PCAOB 

Chairman William D. Duhnke III, SEC Chief 

Accountant Sagar Teotia, SEC Division of 

Corporation Finance Director William Hinman, SEC 

Division of Investment Management Director Dalia 

Blass, Emerging Market Investments Entail 

which assesses compliance with PCAOB 

and SEC rules and professional 

standards in connection with the 

auditor’s performance of audits. 

According to the PCAOB, 

PCAOB inspections may result in the 

identification of deficiencies in one or more 

of an audit firm’s audits of issuers and/or in 

its quality control procedures which, in turn, 

can result in an audit firm carrying out 

additional procedures that should have been 

performed already at the time of the audit. 

Those procedures have sometimes led to the 

audited public company having to revise and 

refile its financial statements or its 

assessment of the effectiveness of its internal 

control over financial reporting. In addition, 

through the quality control remediation 

portion of the inspection process, inspected 

firms identify and implement practices and 

procedures to improve future audit quality.7

Nasdaq and investors rely on the work 

of auditors to provide reasonable 

assurances that the financial statements 

provided by a company are free of 

material misstatements. Nasdaq and 

investors further rely on the PCAOB’s 

critical role in overseeing the quality of 

the auditor’s work. The Chairman and 

the Chief Accountant of the 

Commission, along with the Chairman 

of the PCAOB, have raised concerns that 

national barriers on access to 

information can impede effective 

regulatory oversight of U.S.-listed 

companies with operations in certain 

countries, including the PCAOB’s 

inability to inspect the audit work and 

practices of auditors in those countries.8

Similar concerns have been expressed 

by Members of Congress,9 the State 

Department 10 and the President’s 

Working Group on Financial Markets.11

In particular, the PCAOB is currently 

prevented from inspecting the audit 

work and practices of PCAOB-registered 

auditors in Belgium, France, China and 

Hong Kong (to the extent their audit 

clients have operations in mainland 

China).12

Nasdaq shares these concerns and 

believes that accurate financial 

statement disclosure is critical for 

investors to make informed investment 

decisions. Nasdaq believes the lack of 

transparency from certain markets raises 

concerns about the accuracy of 

disclosures, accountability, and access 

to information, particularly when a 

company is based in a jurisdiction that 

does not provide the PCAOB with 

access to conduct inspections of public 

accounting firms that audit Nasdaqlisted companies (a ‘‘Restrictive 

Market’’). 

Nasdaq’s listing requirements include 

a number of criteria which, in the 

aggregate, are designed to ensure that a 

security listed on Nasdaq has sufficient 

liquidity and public interest to support 

a listing on a U.S. national securities 

exchange. These requirements are 

intended to ensure that there are 

sufficient shares available for trading to 

facilitate proper price discovery in the 

secondary market. Nasdaq believes that 

concerns about the accuracy of 

disclosures, accountability, and access 

to information can be compounded 

when a company from a Restrictive 

Market lists on Nasdaq through an 

initial public offering (‘‘IPO’’) or 

business combination with a small 

offering size or a low public float 

percentage because such companies 

may not attract market attention and 

develop sufficient public float, investor 

base, and trading interest to provide the 

depth and liquidity necessary to 

promote fair and orderly trading. As a 

result, the securities may trade 

infrequently, in a more volatile manner 

and with a wider bid-ask spread, all of 

which may result in trading at a price 

that may not reflect their true market 

value. In addition, foreign issuers are 

more likely to issue a portion of an 

offering to investors in their home 

country, which raises concerns that 

such investors will not contribute to the 

liquidity of the security in the U.S. 

secondary market. 

Less liquid securities may be more 

susceptible to price manipulation, as a 

relatively small amount of trading 

activity can have an inordinate effect on 

market prices. The risk of price 

manipulation due to insider trading is 

more acute when a company principally 

administers its business in a Restrictive 

Market (a ‘‘Restrictive Market 

Company’’), particularly if a company’s 

financial statements contain undetected 

material misstatements due to error or 

fraud and the PCAOB is unable to 

inspect the company’s auditor to 

determine if it complied with PCAOB 

and SEC rules and professional 

standards in connection with its 

performance of audits. The risk to 

investors in such cases may be 

compounded because regulatory 

investigations into price manipulation, 

insider trading and compliance 

concerns may be impeded and investor 

protections and remedies may be 

limited in such cases due to obstacles 

encountered by U.S. authorities in 

bringing or enforcing actions against the 

companies and insiders.13


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Federal Register / Vol. 86, No. 29 / Tuesday, February 16, 2021 / Notices 9551 

Significant Disclosure, Financial Reporting and 

Other Risks; Remedies are Limited (April 21, 2020), 

available at https://www.sec.gov/news/publicstatement/emerging-market-investments-disclosurereporting; see also SEC Division of Corporation 

Finance, CF Disclosure Guidance: Topic No. 10: 

Disclosure Considerations for China-Based Issuers 

(November 23, 2020), available at https://

www.sec.gov/corpfin/disclosure-considerationschina-based-issuers. 

14Listing Rule 5101 provides Nasdaq with broad 

discretionary authority over the initial and 

continued listing of securities in Nasdaq in order 

to maintain the quality of and public confidence in 

its market, to prevent fraudulent and manipulative 

acts and practices, to promote just and equitable 

principles of trade, and to protect investors and the 

public interest. Nasdaq may use such discretion to 

deny initial listing, apply additional or more 

stringent criteria for the initial or continued listing 

of particular securities, or suspend or delist 

particular securities based on any event, condition, 

or circumstance that exists or occurs that makes 

initial or continued listing of the securities on 

Nasdaq inadvisable or unwarranted in the opinion 

of Nasdaq, even though the securities meet all 

enumerated criteria for initial or continued listing 

on Nasdaq. 

15See supra note 11 at 2. 

16See Public Company Accounting Oversight 

Board, Oversight: International (last accessed 

January 29, 2020), available at https://pcaobus.org/ 

oversight/international. 

17See supra note 7. 

18Rule 5005(a)(33) defines ‘‘Primary Equity 

Security’’ as ‘‘a Company’s first class of Common 

Stock, Ordinary Shares, Shares or Certificates of 

Beneficial Interest of Trust, Limited Partnership 

Interests or American Depositary Receipts (ADR) or 

Shares (ADS).’’ 

19Rule 5005(a)(17) defines ‘‘Firm Commitment 

Offering’’ as ‘‘an offering of securities by 

participants in a selling syndicate under an 

agreement that imposes a financial commitment on 

participants in such syndicate to purchase such 

securities.’’ 

20Rule 5005(a)(36) defines ‘‘Public Holders’’ as 

‘‘holders of a security that includes both beneficial 

holders and holders of record, but does not include 

any holder who is, either directly or indirectly, an 

Executive Officer, director, or the beneficial holder 

of more than 10% of the total shares outstanding.’’ 

21Rule 5005(a)(23) defines ‘‘Market Value’’ as 

‘‘the consolidated closing bid price multiplied by 

the measure to be valued (e.g., a Company’s Market 

Value of Publicly Held Shares is equal to the 

consolidated closing bid price multiplied by a 

Company’s Publicly Held Shares).’’ 

22Rule 5005(a)(22) defines ‘‘Listed Securities’’ as 

‘‘securities listed on Nasdaq or another national 

securities exchange.’’ 

23See Rule 5005(a)(45) (definition of 

‘‘Unrestricted Publicly Held Shares’’), Rule 

5005(a)(46) (definition of ‘‘Unrestricted 

Securities’’), and Rule 5005(a)(37) (definition of 

‘‘Restricted Securities’’). 

24See Rule 5405(b)(1)(C). 

Currently, Nasdaq may rely upon its 

discretionary authority provided under 

Rule 5101 14 to deny initial listing or to 

apply additional and more stringent 

criteria when Nasdaq is concerned that 

a small offering size for an IPO may not 

reflect the company’s initial valuation 

or ensure sufficient liquidity to support 

trading in the secondary market. Nasdaq 

is proposing to adopt new Rules 

5210(k)(i) and (ii) that would require a 

minimum offering size or public float 

for Restrictive Market Companies listing 

on Nasdaq in connection with an IPO or 

a business combination (as described in 

Rule 5110(a) or IM–5101–2). Nasdaq is 

also proposing to adopt a new Rule 

5210(k)(iii) to provide that Restrictive 

Market Companies would be permitted 

to list on the Nasdaq Global Select or 

Nasdaq Global Markets if they are listing 

in connection with a Direct Listing (as 

defined in IM–5315–1), but would not 

be permitted to list on the Nasdaq 

Capital Market, which has lower 

requirements for Unrestricted Publicly 

Held Shares, in connection with a Direct 

Listing. 

I. Definition of Restrictive Market 

Nasdaq proposes to adopt a new 

definition of Restrictive Market in Rule 

5005(a)(37) to define a Restrictive 

Market as a jurisdiction that does not 

provide the PCAOB with access to 

conduct inspections of public 

accounting firms that audit Nasdaqlisted companies. This is similar to the 

President’s Working Group on Financial 

Markets definition of ‘‘Non-Cooperating 

Jurisdictions,’’ which observed that: 

Certain jurisdictions, however, do not 

currently provide the PCAOB with the ability 

to inspect public accounting firms, including 

sufficient access to conduct inspections and 

investigations of audits of public companies, 

or otherwise do not cooperate with U.S. 

regulators (‘‘Non-Cooperating Jurisdictions,’’ 

or ‘‘NCJs’’). The PCAOB has been unable to 

fulfill its statutory mandate under SarbanesOxley to inspect audit firms in NCJs, 

including those in China, potentially 

exposing investors in U.S. capital markets to 

significant risks. The PCAOB has been 

unable to fulfill this mandate meaningfully 

with respect to audit firms based in China for 

more than a decade.15

The PCAOB maintains a map of 

where it can and cannot conduct 

oversight activities on its website.16 In 

addition, the PCAOB publishes a list 

identifying the public companies for 

which a PCAOB-registered public 

accounting firm signed and issued an 

audit report and is located in a 

jurisdiction where obstacles to PCAOB 

inspections exist.17

Nasdaq will consider a company’s 

business to be principally administered 

in a Restrictive Market if: (i) The 

company’s books and records are 

located in that jurisdiction; (ii) at least 

50% of the company’s assets are located 

in such jurisdiction; or (iii) at least 50% 

of the company’s revenues are derived 

from such jurisdiction. Nasdaq also 

proposes to renumber the remainder of 

Rule 5005(a) to ensure consistency in its 

rulebook. 

For example, Company X’s books and 

records could be located in Country Y, 

which is not a Restrictive Market, while 

90% of its revenues are derived from 

operations in Country Z, which is a 

Restrictive Market. If Company X 

applies to list its Primary Equity 

Security on Nasdaq in connection with 

an IPO, Nasdaq would consider 

Company X’s business to be principally 

administered in Country Z, and 

Company X would therefore be subject 

to the proposed additional requirements 

applicable to a Restrictive Market 

Company. Conversely, Company A’s 

books and records could be located in 

Country B, which is a Restrictive 

Market, but 90% of its revenues are 

derived from Country C, which is not a 

Restrictive Market. Nasdaq would 

consider Company A’s business to be 

principally administered in Country B, 

and Company A would therefore be 

subject to the proposed additional 

requirements applicable to a Restrictive 

Market Company. 

II. Minimum Offering Size or Public 

Float Percentage for an IPO 

As proposed, Rule 5210(k)(i) would 

require a company that is listing its 

Primary Equity Security 18 on Nasdaq in 

connection with its IPO, and that 

principally administers its business in a 

Restrictive Market, to offer a minimum 

amount of securities in a Firm 

Commitment Offering 19 in the U.S. to 

Public Holders 20 that: (a) Will result in 

gross proceeds to the company of at 

least $25 million; or (b) will represent 

at least 25% of the company’s postoffering Market Value 21 of Listed 

Securities,22 whichever is lower. For 

example, Company X is applying to list 

on Nasdaq Global Market. Company X 

principally administers its business in a 

Restrictive Market and its post-offering 

Market Value of Listed Securities is 

expected to be $75,000,000. Since 25% 

of $75,000,000 is $18,750,000, which is 

lower than $25,000,000, it would be 

eligible to list under the proposed rule 

based on a Firm Commitment Offering 

in the U.S. to Public Holders of at least 

$18,750,000. However, Company X 

would also need to comply with the 

other applicable listing requirements of 

the Nasdaq Global Market, including a 

Market Value of Unrestricted Publicly 

Held Shares 23 of at least $8 million.24

In contrast, Company Y, which also 

principally administers its business in a 

Restrictive Market, is applying to list on 

the Nasdaq Global Select Market and its 

post-offering Market Value of Listed 

Securities is expected to be 

$200,000,000. Since 25% of 


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25See Rule 5315(f)(2)(C). 

26Two of these companies were considered to be 

principally administered in a Restrictive Market 

because they had at least 50% of the company’s 

assets located in a Restrictive Market and 37 met 

the definition because they had at least 50% of the 

company’s revenues derived from a Restrictive 

Market. 

27See Rule 5315(f)(2)(C). 

28See Rule 5505(b)(3)(C). 

$200,000,000 is $50,000,000, which is 

higher than $25,000,000, it would be 

eligible to list under the proposed rule 

based on a Firm Commitment Offering 

in the U.S. to Public Holders that will 

result in gross proceeds of at least 

$25,000,000. However, Company Y 

would also need to comply with the 

other applicable listing requirements of 

the Nasdaq Global Select Market, 

including a Market Value of 

Unrestricted Publicly Held Shares of at 

least $45 million.25

The Exchange believes that the 

proposal to require a Restrictive Market 

Company conducting an IPO to offer a 

minimum amount of securities in the 

U.S. to Public Holders in a Firm 

Commitment Offering will provide 

greater support for the company’s price, 

as determined through the offering, and 

will help assure that there will be 

sufficient liquidity, U.S. investor 

interest and distribution to support 

price discovery once a security is listed. 

Nasdaq believes there is a risk that 

substantial participation by foreign 

investors in an offering, combined with 

insiders retaining significant ownership, 

does not promote sufficient investor 

base and trading interest to support 

trading in the secondary market. The 

risk to U.S. investors is compounded 

when a company is located in a 

Restrictive Market due to restrictions on 

the PCAOB’s ability to inspect the audit 

work and practices of auditors in those 

countries, which may be accompanied 

by limitations on the ability of U.S. 

regulators to conduct investigations or 

bring or enforce actions against the 

company and non-U.S. persons. As a 

result, there are increased concerns 

about the accuracy of disclosures, 

accountability and access to 

information. 

Further, the Exchange has observed 

that Restrictive Market Companies 

listing on Nasdaq in connection with an 

IPO with an offering size below $25 

million or public float ratio below 25% 

have a high rate of compliance 

concerns. Nasdaq believes that these 

concerns may be mitigated by the 

company conducting a Firm 

Commitment Offering of at least $25 

million or 25% of the company’s postoffering Market Value of Listed 

Securities, whichever is lower. Firm 

Commitment Offerings typically involve 

a book building process that helps to 

generate an investor base and trading 

interest that promotes sufficient depth 

and liquidity to help support fair and 

orderly trading on the Exchange. Such 

offerings also typically involve more 

due diligence by the broker-dealer than 

would be done in connection with a 

best-efforts offering, which helps to 

ensure that third parties subject to U.S. 

regulatory oversight are conducting 

significant due diligence on the 

company, its registration statement and 

its financial statements. The Exchange 

believes that the proposal will help 

ensure that Restrictive Market 

Companies seeking to list on the 

Exchange have sufficient investor base 

and public float to support fair and 

orderly trading on the Exchange. 

In developing the Proposal, Nasdaq 

analyzed the data behind its 

observations. An analysis of initial 

public offerings from January 1, 2015 to 

September 30, 2020, found that 113 

Restrictive Market companies listed on 

Nasdaq through an IPO and 39 of such 

companies would not have qualified 

under proposed Rule 5210(k)(i) because 

they had offering amounts of $25 

million or less.26 Of those, 20, or 51%, 

were cited for a compliance issue, a 

significantly higher rate than other 

Restrictive Market Companies (16%). 

During the period from January 1, 

2015 to September 30, 2020, 84 

Restrictive Market Companies had a 

ratio of offering size to Market Value of 

Listed Securities of 25% or less. Of 

these, 25, or 30%, failed to comply with 

one or more listing standards after 

listing, which is a significantly higher 

non-compliance rate than other foreign 

companies (11%) and other Restrictive 

Market Companies (21%) that had such 

listings. In some cases, when the ratio 

of offering size to Market Value of Listed 

Securities is low there may be concerns 

about whether there are sufficient freely 

tradable shares to meet investor 

demand. 

Lastly, during the period from January 

1, 2015 to September 30, 2020, 35 

Restrictive Market Companies would 

not have qualified under either 

proposed Rule 5210(k)(i)(a) or (b). Of 

these companies, 18 were cited for a 

compliance concern. 

III. Minimum Market Value of Publicly 

Held Shares for a Business 

Combination 

Nasdaq believes that a business 

combination, as described in Rule 

5110(a) or IM–5101–2, involving a 

Restrictive Market Company presents 

similar risks to U.S. investors as IPOs of 

Restrictive Market Companies. 

However, such a business combination 

would typically not involve an offering. 

Therefore, Nasdaq proposes to adopt a 

new Rule 5210(k)(ii) that would impose 

a similar new requirement as applicable 

to IPOs, but would reflect that the 

listing would not typically be 

accompanied by an offering. 

Specifically, proposed Rule 5210(k)(ii) 

would require the listed company to 

have a minimum Market Value of 

Unrestricted Publicly Held Shares 

following the business combination 

equal to the lesser of: (a) $25 million; or 

(b) 25% of the post-business 

combination entity’s Market Value of 

Listed Securities. 

For example, Company A is currently 

listed on the Nasdaq Capital Market and 

plans to acquire a company that 

principally administers its business in a 

Restrictive Market, in accordance with 

IM–5101–2. Following the business 

combination, Company A intends to 

transfer to the Nasdaq Global Select 

Market. Company A expects the postbusiness combination entity to have a 

Market Value of Listed Securities of 

$250,000,000. Since 25% of 

$250,000,000 is $62,500,000, which is 

higher than $25,000,000, to qualify for 

listing on the Nasdaq Global Select 

Market the post-business combination 

entity must have a minimum Market 

Value of Unrestricted Publicly Held 

Shares of at least $25,000,000. However, 

Company A would also need to comply 

with the other applicable listing 

requirements of the Nasdaq Global 

Select Market, including a Market Value 

of Unrestricted Publicly Held Shares of 

at least $45,000,000.27

In contrast, Company B is currently 

listed on Nasdaq Capital Market and 

plans to combine with a non-Nasdaq 

entity that principally administers its 

business in a Restrictive Market, 

resulting in a change of control as 

defined in Rule 5110(a), whereby the 

non-Nasdaq entity will become the 

Nasdaq-listed company. Following the 

change of control, Company B expects 

the listed company to have a Market 

Value of Listed Securities of 

$50,000,000. Since 25% of $50,000,000 

is $12,500,000, which is lower than 

$25,000,000, the listed company must 

have a minimum Market Value of 

Unrestricted Publicly Held Shares 

following the change of control of at 

least $12,500,000. However, the 

company would also need to comply 

with the other applicable listing 

requirements of the Nasdaq Capital 

Market, including a Market Value of 

Unrestricted Publicly Held Shares of at 

least $5 million.28


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29See Rule 5005(a)(34). 30See IM–5315–1(a)(1). 31See IM–5315–1(a)(1) (Nasdaq Global Select 

Market) and IM–5405–1(a)(1) (Nasdaq Global 

Market). 32See IM–5315–1(b). 33See IM–5405–1(a)(2) (Nasdaq Global Market). 

34For example, the Nasdaq Global Select Market 

and Nasdaq Global Market require a company to 

have at least 1,250,000 and 1.1 million Unrestricted 

Publicly Held Shares, respectively, and a Market 

Value of Unrestricted Publicly Held Shares of at 

least $45 million and $8 million, respectively. In 

contrast, the Nasdaq Capital Market requires a 

company to have at least 1 million Unrestricted 

Publicly Held Shares and a Market Value of 

Unrestricted Publicly Held Shares of at least $5 

million. 

Market Value of Unrestricted Publicly 

Held Shares excludes securities subject 

to resale restrictions from the 

calculation of Publicly Held Shares 

because securities subject to resale 

restrictions are not freely transferrable 

or available for outside investors to 

purchase and therefore do not truly 

contribute to a security’s liquidity upon 

listing. Nasdaq believes that requiring 

the post-business combination entity to 

have a minimum Market Value of 

Unrestricted Publicly Held Shares of at 

least $25 million or 25% of its Market 

Value of Listed Securities, whichever is 

lower, would help to provide an 

additional assurance that there are 

sufficient freely tradable shares and 

investor interest to support fair and 

orderly trading on the Exchange when 

the target company principally 

administers its business in a Restrictive 

Market. Nasdaq believes that this will 

help mitigate the unique risks that 

Restrictive Market Companies present to 

U.S. investors due to restrictions on the 

PCAOB’s ability to inspect the audit 

work and practices of auditors in those 

countries, which create concerns about 

the accuracy of disclosures, 

accountability and access to 

information. 

Nasdaq found that out of seven 

business combinations involving 

Restrictive Market Companies from 

2015 through September 30, 2020, five 

would not have qualified under 

proposed Rule 5210(k)(ii). All five of 

these companies have been cited for a 

deficiency after the completion of their 

business combination. Of the two 

business combinations involving 

Restrictive Market Companies that 

would have qualified under proposed 

Rule 5210(k)(ii), one was cited for a 

compliance concern. As such, Nasdaq 

believes that a business combination, as 

described in Nasdaq Rule 5110(a) or 

IM–5101–2, involving a Restrictive 

Market Company presents similar risks 

to U.S. investors as an IPO of a 

Restrictive Market Company and, 

therefore, believes it is appropriate to 

apply similar thresholds to postbusiness combination entities to ensure 

that a company listing through a 

business combination would have 

satisfied equivalent standards that apply 

to an IPO. 

IV. Direct Listings of Restrictive Market 

Companies 

Nasdaq proposes to adopt Rule 

5210(k)(iii) to provide that a Restrictive 

Market Company would be permitted to 

list on the Nasdaq Global Select Market 

or Nasdaq Global Market in connection 

with a Direct Listing (as defined in IM– 

5315–1), provided that the company 

meets all applicable listing requirements 

for the Nasdaq Global Select Market and 

the additional requirements of IM– 

5315–1, or the applicable listing 

requirements for the Nasdaq Global 

Market and the additional requirements 

of IM–5405–1. However, such 

companies would be not be permitted to 

list on the Nasdaq Capital Market in 

connection with a Direct Listing 

notwithstanding the fact that such 

companies may meet the applicable 

initial listing requirements for the 

Nasdaq Capital Market and the 

additional requirements of IM–5505–1. 

Direct Listings are currently required 

to comply with enhanced listing 

standards pursuant to IM–5315–1 

(Nasdaq Global Select Market) and IM– 

5405–1 (Nasdaq Global Market). If a 

company’s security has had sustained 

recent trading in a Private Placement 

Market,29 Nasdaq may attribute a 

Market Value of Unrestricted Publicly 

Held Shares equal to the lesser of (i) the 

value calculable based on a Valuation 30

and (ii) the value calculable based on 

the most recent trading price in the 

Private Placement Market.31 Nasdaq 

believes that the price from such 

sustained trading in the Private 

Placement Market for the company’s 

securities is predictive of the price in 

the market for the common stock that 

will develop upon listing of the 

securities on Nasdaq and that qualifying 

a company based on the lower of such 

trading price or the Valuation helps 

assure that the company satisfies 

Nasdaq’s requirements. 

Nasdaq may require a company listing 

on the Nasdaq Global Select Market that 

has not had sustained recent trading in 

a Private Placement Market to satisfy the 

applicable Market Value of Unrestricted 

Publicly Held Shares requirement and 

provide a Valuation evidencing a 

Market Value of Publicly Held Shares of 

at least $250,000,000.32 For a company 

that has not had sustained recent 

trading in a Private Placement Market 

and that is applying to list on the 

Nasdaq Global Market, Nasdaq will 

generally require the company to 

provide a Valuation that demonstrates a 

Market Value of Listed Securities and 

Market Value of Unrestricted Publicly 

Held Shares that exceeds 200% of the 

otherwise applicable requirement.33

Nasdaq believes that in the absence of 

recent sustained trading in the Private 

Placement Market, the requirement to 

demonstrate a Market Value of Publicly 

Held Shares of at least $250 million for 

a company seeking to list on Nasdaq 

Global Select Market, or that the 

company exceeds 200% of the 

otherwise applicable price-based 

requirement for a company seeking to 

list on Nasdaq Global Market, helps 

assure that the company satisfies 

Nasdaq’s requirement by imposing a 

standard that is more than double the 

otherwise applicable standard. 

Thus, companies listing in connection 

with a Direct Listing on the Nasdaq 

Global or Global Select Market tiers are 

already subject to enhanced listing 

requirements and Nasdaq believes it is 

appropriate to permit Restrictive Market 

Companies to list through a Direct 

Listing on the Nasdaq Global Select 

Market or Nasdaq Global Market. On the 

other hand, while companies listing in 

connection with a Direct Listing on the 

Capital Market are also subject to 

enhanced listing requirements, Nasdaq 

does not believe that these enhanced 

requirements are sufficient to overcome 

concerns regarding sufficient liquidity 

and investor interest to support fair and 

orderly trading on the Exchange with 

respect to Restrictive Market 

Companies.34 Nasdaq believes that 

Restrictive Market Companies present 

unique risks to U.S. investors due to 

restrictions on the PCAOB’s ability to 

inspect the audit work and practices of 

auditors in those countries, which 

create concerns about the accuracy of 

disclosures, accountability and access to 

information. Therefore, Nasdaq believes 

that precluding a Restrictive Market 

Company from listing through a Direct 

Listing on the Capital Market will help 

to ensure that the company has 

sufficient public float, investor base, 

and trading interest likely to generate 

depth and liquidity necessary to 

promote fair and orderly trading on the 

secondary market. 

V. Conclusion 

Nasdaq believes that the U.S. capital 

markets can provide Restrictive Market 

Companies with access to additional 

capital to fund ground-breaking research 

and technological advancements. 

Further, such companies provide U.S. 

investors with opportunities to diversify 

their portfolio by providing exposure to 


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9554 Federal Register / Vol. 86, No. 29 / Tuesday, February 16, 2021 / Notices 

35See supra note 8. 

36 15 U.S.C. 78f(b). 

37 15 U.S.C. 78f(b)(5). 

38Securities Exchange Act Release No. 65708 

(November 8, 2011), 76 FR 70799 (November 15, 

2011) (approving SR–Nasdaq–2011–073 adopting 

additional listing requirements for companies 

applying to list after consummation of a ‘‘reverse 

merger’’ with a shell company). 

39 Id at 70802. 40See supra note 6. 

41See In the Matter of Tassaway, Inc., Securities 

Exchange Act Release No. 11291, 1975 WL 160383; 

45 SEC 706 (March 13, 1975). 

Restrictive Markets. However, as 

discussed above, Nasdaq believes that 

Restrictive Market Companies present 

unique potential risks to U.S. investors 

due to restrictions on the PCAOB’s 

ability to inspect the audit work and 

practices of auditors in those countries, 

which create concerns about the 

accuracy of disclosures, accountability 

and access to information.35 Nasdaq 

believes that the proposed rule changes 

will help to ensure that Restrictive 

Market Companies have sufficient 

investor base and public float to support 

fair and orderly trading on the 

Exchange. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,36 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,37

in particular, in that it is 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. Further, the Exchange 

believes that this proposal is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Commission has previously 

opined on the importance of meaningful 

listing standards for the protection of 

investors and the public interest.38 In 

particular, the Commission stated: 

Among other things, listing standards 

provide the means for an exchange to screen 

issuers that seek to become listed, and to 

provide listed status only to those that are 

bona fide companies with sufficient public 

float, investor base, and trading interest 

likely to generate depth and liquidity 

sufficient to promote fair and orderly 

markets. Meaningful listing standards also 

are important given investor expectations 

regarding the nature of securities that have 

achieved an exchange listing, and the role of 

an exchange in overseeing its market and 

assuring compliance with its listing 

standards.39

Nasdaq believes that requiring a 

minimum offering size or public float 

percentage for Restrictive Market 

Companies seeking to list on Nasdaq 

through an IPO or business combination 

will ensure that a security to be listed 

on Nasdaq has adequate liquidity, 

distribution and U.S. investor interest to 

support fair and orderly trading in the 

secondary market, which will reduce 

trading volatility and price 

manipulation, thereby protecting 

investors and the public interest. 

Similarly, Nasdaq believes that 

permitting Restrictive Market 

Companies to list on Nasdaq Global 

Select Market or Nasdaq Global Market, 

rather than the Nasdaq Capital Market, 

in connection with a Direct Listing will 

ensure that such companies satisfy more 

rigorous listing requirements, including 

the minimum amount of Publicly Held 

Shares and Market Value of Publicly 

Held Shares, which will help to ensure 

that the security has sufficient public 

float, investor base, and trading interest 

likely to generate depth and liquidity 

sufficient to promote fair and orderly 

trading, thereby protecting investors and 

the public interest. 

While the proposal applies only to 

Restrictive Market Companies, the 

Exchange believes that the proposal is 

not designed to permit unfair 

discrimination among companies 

because Nasdaq believes that Restrictive 

Market Companies present unique 

potential risks to U.S. investors due to 

restrictions on the PCAOB’s ability to 

inspect the audit work and practices of 

auditors in those countries, which 

create concerns about the accuracy of 

disclosures, accountability and access to 

information. 

Nasdaq and investors rely on the work 

of auditors to provide reasonable 

assurances that the financial statements 

provided by a company are free of 

material misstatements. The PCAOB 

states that ‘‘[r]easonable assurance is 

obtained by reducing audit risk to an 

appropriately low level through 

applying due professional care, 

including obtaining sufficient 

appropriate audit evidence.’’ 40 Nasdaq 

believes that the PCAOB’s inability to 

inspect the audit work and practices of 

auditors in certain countries weakens 

the assurance that the auditor obtained 

sufficient appropriate audit evidence to 

express its opinion on a company’s 

financial statements, and decreases 

confidence that the auditor complied 

with PCAOB and SEC rules and 

professional standards in connection 

with the auditor’s performance of 

audits. Nasdaq believes that without 

reasonable assurances from an auditor 

that a company’s financial statements 

and related disclosures are free from 

material misstatements, there is a risk 

that a company that would otherwise 

not have qualified to list on Nasdaq may 

satisfy Nasdaq’s listing standards by 

presenting financial statements that 

contain undetected material 

misstatements. In In the Matter of the 

Tassaway, Inc., the Commission 

observed that 

Though exclusion from the system may hurt 

existing investors, primary emphasis must be 

placed on the interests of prospective future 

investors. The latter group is entitled to 

assume that the securities in the system meet 

the system’s standards. Hence the presence 

in NASDAQ of non-complying securities 

could have a serious deceptive effect.41

The proposed rule change would 

provide greater assurances to investors 

that a company truly meets Nasdaq’s 

financial listing requirements by 

imposing heightened listing criteria on 

a company that principally administers 

its business in a Restrictive Market, 

thereby preventing fraudulent and 

manipulative acts, protecting investors 

and promoting the public interest. 

In addition, securities of Restrictive 

Market Companies may not develop 

sufficient public float, investor base, 

and trading interest to provide the depth 

and liquidity necessary to promote fair 

and orderly trading, resulting in a 

security that is illiquid. Nasdaq is 

concerned because illiquid securities 

may trade infrequently, in a more 

volatile manner and with a wider bidask spread, all of which may result in 

trading at a price that may not reflect 

their true market value. 

Less liquid securities also may be 

more susceptible to price manipulation, 

as a relatively small amount of trading 

activity can have an inordinate effect on 

market prices. Price manipulation is a 

particular concern when insiders retain 

a significant ownership portion of the 

company. The risk of price 

manipulation due to insider trading is 

more acute when a company principally 

administers its business in a Restrictive 

Market and management lacks 

familiarity or experience with U.S. 

securities laws. Therefore, Nasdaq 

believes that it is not unfairly 

discriminatory to treat Restrictive 

Market Companies differently under 

this proposal because it will help ensure 

that securities of a Restrictive Market 

Company listed on Nasdaq have 

sufficient public float, investor base, 

and trading interest to provide the depth 

and liquidity necessary to promote fair 

and orderly markets, thereby promoting 

investor protection and the public 

interest. 


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Federal Register / Vol. 86, No. 29 / Tuesday, February 16, 2021 / Notices 9555 

42 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(a). 

4 17 CFR 240.19b–4(f)(4)(ii). 

5Capitalized terms used but not defined herein 

have the meanings specified in the ICE Clear 

Europe Clearing Rules (the ‘‘Rules’’). 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule changes will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. While the 

proposed rule changes will apply only 

to companies primarily operating in 

Restrictive Markets, Nasdaq and the SEC 

have identified specific concerns with 

such companies that make the 

imposition of additional initial listing 

criteria on such companies appropriate 

to enhance investor protection, which is 

a central purpose of the Act. Any impact 

on competition, either among listed 

companies or between exchanges, is 

incidental to that purpose. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the Exchange consents, the Commission 

shall: (a) By order approve or 

disapprove such proposed rule change, 

or (b) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change 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 rule-comments@

sec.gov. Please include File Number SR– 

NASDAQ–2021–007 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–2021–007. 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–2021–007 and 

should be submitted on or before March 

9, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.42

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–02993 Filed 2–12–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91091; File No. SR–ICEEU– 

2021–003] 

Self-Regulatory Organizations; ICE 

Clear Europe Limited; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Amendments to the ICE Clear Europe 

Delivery Procedures. 

February 9, 2021. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on February 

2, 2021, ICE Clear Europe Limited (‘‘ICE 

Clear Europe’’ or the ‘‘Clearing House’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule changes described in 

Items I, II and III below, which Items 

have been prepared by ICE Clear 

Europe. ICE Clear Europe filed the 

proposed rule change pursuant to 

Section 19(b)(3)(A) of the Act 3 and Rule 

19b–4(f)(4)(ii) 4 thereunder, such that 

the proposed rule was immediately 

effective upon filing with the 

Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

The principal purpose of the 

proposed amendments is for ICE Clear 

Europe to amend its Delivery 

Procedures (the ‘‘Delivery Procedures’’) 

to add a new Section 11 and a new Part 

GG to address delivery relating to the 

ICE Futures Abu Dhabi Murban Crude 

Oil Futures Contracts (the ‘‘ICE Murban 

Crude Oil Futures Contracts’’ or the 

‘‘Contracts’’).5

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, ICE 

Clear Europe 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. ICE 

Clear Europe has prepared summaries, 

set forth in sections (A), (B), and (C) 

below, of the most significant aspects of 

such statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

(a) Purpose 

ICE Clear Europe is proposing to 

amend its Delivery Procedures to add a 

new Section 11 and a new Part GG to 

address delivery relating to the ICE 

Murban Crude Oil Futures Contracts. 

The Contracts will be traded on ICE 

Futures Abu Dhabi and cleared by ICE 

Clear Europe. 

New Part GG would set out the 

delivery specifications and procedures 

for deliveries of Murban crude oil under 

the ICE Murban Crude Oil Futures 


khammond on DSKJM1Z7X2PROD with NOTICES