82420 Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Notices 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f)(1). 

14 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. 63239 

(November 3, 2010), 75 FR 68846. 

4See Letters from Floyd I. Wittlin and Ann F. 

Chamberlain, Bingham McCutchen LLP, dated 

November 22, 2010 (‘‘Bingham Letter’’); David Alan 

Miller, Managing Partner and Jeffrey M. Gallant, 

Partner, Graubard Miller, dated November 22, 2010 

(‘‘Graubard Letter’’); and Joel L. Rubinstein and 

Jonathan Rochwarger, McDermott Will & Emery, 

dated November 30, 2010 (‘‘McDermott Letter’’). 

5See Nasdaq IM–5101–2(e) and Nasdaq Rule 

5005(a)(34). 

6See Securities Exchange Act Release No. 58228 

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

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 

Pursuant to Section 19(b)(3)(A) of the 

Act 12 and Rule 19b–4(f)(1) 13

thereunder, the Exchange has 

designated this proposal as one that 

constitutes a stated policy, practice or 

interpretation with respect to the 

meaning, administration, or 

enforcement of an existing rule of the 

SRO, and therefore has become 

effective. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. 

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 e-mail to rulecomments@sec.gov. Please include File 

Number SR–PHLX–2010–180 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–PHLX–2010–180. This file 

number should be included on the 

subject line if e-mail 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 Web site (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 Web site 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. Copies of such filing 

also will be available for inspection and 

copying at the principal office of the 

Exchange. All comments received will 

be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

publicly available. All submissions 

should refer to File Number SR–PHLX– 

2010–180 and should be submitted on 

or before January 20, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–32891 Filed 12–29–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63607; File No. SR– 

NASDAQ–2010–137] 

Self-Regulatory Organizations, The 

NASDAQ Stock Market LLC; Order 

Approving Proposed Rule Change To 

Amend IM–5101–2 To Provide Special 

Purpose Acquisition Companies the 

Option To Hold a Tender Offer in Lieu 

of a Shareholder Vote on a Proposed 

Acquisition and Other Changes to the 

SPAC Listing Standards 

December 23, 2010. 

I. Introduction 

On October 22, 2010, 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 

provide special purpose acquisition 

companies (‘‘SPACs’’) an option to hold 

a tender offer in lieu of a shareholder 

vote on a proposed acquisition and to 

make certain other changes to the 

SPACs listing requirements as discussed 

below. The proposed rule change was 

published in the Federal Register on 

November 9, 2010.3 The Commission 

received three comment letters on the 

proposal.4 This order approves the 

proposed rule change. 

II. Description of the Proposal 

As discussed in more detail below, 

the Exchange is proposing to amend its 

listing rules to provide SPACs an option 

to hold a tender offer in lieu of a 

shareholder vote on a proposed 

acquisition, to require SPACs, trying to 

complete a business combination, that 

are not subject to the Commission’s 

proxy rules to conduct a tender offer 

allowing shareholders to redeem shares 

for cash and provide information similar 

to that provided under the 

Commission’s proxy rules and to amend 

the definition of public shareholder for 

purposes of the SPAC conversion rights 

to also exclude beneficial holders of 

more than 10% of the total shares 

outstanding, consistent with the 

Exchanges existing definition of Public 

Holder.5

SPACs are companies that raise 

capital in an initial public offering 

(‘‘IPO’’) to enter into future 

undetermined business combinations 

through mergers, capital stock 

exchanges, asset acquisitions, stock 

purchases, reorganizations or other 

similar business combinations with one 

or more operating businesses or assets. 

In the IPO, SPACs typically sell units 

consisting of one share of common stock 

and one or more warrants (or fraction of 

a warrant) to purchase common stock. 

The units are separable at some point 

after the IPO. Management of the SPAC 

typically receives a percentage of the 

equity at the outset and may be required 

to purchase additional shares in a 

private placement at the time of the IPO. 

Due to their unique structure, SPACs do 

not have any prior financial history like 

operating companies. In July 2008, the 

Commission approved Nasdaq rules to 

permit the listing of securities of 

SPACs.6 Prior to that time, the Exchange 


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7See Nasdaq IM–5101–2(a). 

8See Nasdaq IM–5101–2(b). 

9See Nasdaq IM–5101–2(d). 

10See Nasdaq IM–5101–2(e). 

11See proposed Nasdaq IM–5101–2(e). 

12See proposed Nasdaq IM–5101–2(d). 

13See proposed Nasdaq IM–5101–2(d). 

14See Bingham Letter. 

15See Nasdaq Rule 5635(a). 

16See Bingham Letter. 

17See Bingham Letter. 

18See Graubard Letter. 

did not list securities of companies 

without a specific business plan or that 

indicated that their plan was to engage 

in a merger or acquisition with 

unidentified companies. In addition to 

requiring securities of SPACs to meet 

the Exchange’s initial listing standards, 

Nasdaq’s rules provided additional 

investor protection standards to provide 

safeguards to shareholders who invest 

in SPAC securities. 

Currently, Nasdaq’s rules for listing 

securities of SPACs provide at least 90% 

of the proceeds raised in the IPO and 

any concurrent sale of equity securities 

must be placed in a trust account.7

Further, Nasdaq’s listing rules specify 

that within 36 months or such shorter 

time period as specified by the SPAC, 

the SPAC must complete one or more 

business combinations having an 

aggregative fair market value of at least 

80% of the value of the trust account.8

Until the SPAC has completed a 

business combination of at least 80% of 

the trust account value, the SPAC must, 

among other things, submit the business 

combination to a shareholder vote.9 Any 

public shareholders who vote against 

the business combination have a right to 

convert their shares of common stock 

into a pro rata share of the aggregate 

amount then in the trust account, if the 

business combination is approved and 

consummated.10

Nasdaq proposes three changes to the 

SPAC shareholder approval process. 

First, Nasdaq proposes to add an option 

for the SPAC to conduct a tender offer 

instead of a shareholder vote. Nasdaq 

proposes that until a SPAC has 

completed a business combination of at 

least 80% of the trust account value, if 

a shareholder vote on the business 

combination is not held for which the 

SPAC must file and furnish a proxy or 

information statement subject to 

Regulation 14A or 14C under the Act, in 

order to complete the business 

combination the SPAC must provide all 

shareholders with the opportunity to 

redeem all their shares for cash equal to 

their pro rata share of the aggregate 

amount then in the deposit account 

pursuant to Rule 13e–4 and Regulation 

14E under the Act.11 The SPAC must 

file tender offer documents with the 

Commission containing substantially 

the same information about the business 

combination and the redemption rights 

as required under Regulation 14A of the 

Act, which regulates proxy solicitations. 

Second, Nasdaq proposes to require 

that the shareholder vote provisions 

currently in the rule requiring the 

business combination to be approved by 

a majority of the shares voting at the 

meeting apply to shareholder votes 

where the SPAC must file and furnish 

a proxy or information statement subject 

to Regulation 14A or 14C under the Act 

in advance of the shareholder meeting.12

This part of the Exchange’s proposal, 

taken together with the tender offer 

provisions discussed above, in essence 

require a SPAC, not required by law to 

file and furnish a proxy or information 

statement subject to Regulation 14A or 

14C under the Act, to conduct a tender 

offer for shares in exchange for a pro 

rata share of the cash held in deposit in 

the trust account. As noted above, any 

issuer that elects to or is required to 

conduct a tender offer must comply 

with Rule 13e–4 and Regulation 14E 

under that Act, as well as file tender 

offer documents with the Commission 

containing substantially the same 

financial and other information about 

the business combination and 

redemption rights as would be required 

under the federal proxy rules in 

Regulation 14A of the Act. This 

provision will assure that investors will 

receive comparable information about a 

proposed business combination 

irrespective of whether the company is 

conducting a tender offer with or 

without a vote, or a shareholder vote 

that requires the issuer to file and 

furnish a proxy or information 

statement in compliance with the 

Commission’s proxy rules. 

Finally, Nasdaq proposes to exclude 

beneficial holders of more than 10% of 

the total outstanding SPAC shares from 

those public shareholders entitled to 

receive conversion rights under 

paragraph (d) of IM–5101–2. According 

to Nasdaq, when it originally adopted 

the SPAC rules, Nasdaq intended to 

have the public shareholder exclusions 

closely mirror the defined term ‘‘Public 

Holders’’ as well as exclude certain 

categories specific to SPACs. However, 

the definition of public shareholder 

under the SPAC rules did not exclude 

beneficial holders of more than 10% of 

the total shares outstanding while the 

definition of Public Holders excludes 

this group. Nasdaq is amending the 

SPAC rules to ensure consistency 

between these two rules.13

III. Summary of Comments 

The Commission received three 

comments supporting the proposal. One 

commenter stated that the proposal 

‘‘would represent a major step toward 

elimination of the abuses that have 

plagued the shareholder voting process 

relating to acquisitions by SPACS while 

continuing to enable shareholders to 

make a fully informed voting decision 

on proposed acquisitions by SPACs.’’ 14

While the three commenters support 

the proposal, they believed that Nasdaq 

should propose to change its 

shareholder approval rule in Nasdaq 

Rule 5635, which, among other things, 

require that a Nasdaq listed issuer 

obtain shareholder approval to issue 

securities in connection with an 

acquisition where the number of shares 

of common stock to be issued is equal 

to or more than 20% of the number of 

shares outstanding prior to the 

issuance.15 One commenter believed 

that ‘‘adoption of the proposed change to 

Rule IM–5101–2 will not be sufficient to 

encourage SPACs to list on Nasdaq’’ and 

anticipated that ‘‘the proposed rule 

change, standing alone, will have no 

practical effect.’’ 16 The commenter 

stated that the value of the target for a 

SPAC is generally greater than the 

amount in the SPAC’s trust account, and 

thus, the SPAC would need to issue 

additional shares at the time of the 

business combination to raise capital.17

According to the commenter, the greater 

number of shares issued, the lesser the 

dilutive impact of the founders’ shares 

and the warrants. The commenter 

argues that any protection provided by 

Nasdaq’s shareholder approval 

requirements is unnecessary since 

under Nasdaq’s proposal, shareholders 

not subject to a vote are able to ‘‘vote 

with their feet’’ and get their investment 

back through the tender offer process. 

Accordingly, the commenter urged 

Nasdaq to exempt SPACs from Nasdaq’s 

shareholder approval requirements in 

Rule 5635. 

Another commenter stated that 

because ‘‘SPACs are often unable to 

determine with accuracy the amount of 

funds that will be required to pay 

shareholders that ultimately elect to 

convert their shares into cash, the funds 

held in the trust account are typically 

not used as consideration to effect the 

acquisition transaction.’’ 18 As a result, 

this commenter stated that SPACs often 

use stock as consideration for the 

business combination and cash in the 

trust account is used to redeem 

shareholders and possibly finance the 

operations of the target. As a result, the 

securities issued to do a business 


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19See McDermott Letter. 

20See Section IV, infra. 

21See Bingham Letter. 

22See Graubard Letter. 

23 15 U.S.C. 78f(b)(5). 

24 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rules’ impact on efficiency, competition, 

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

25See 17 CFR 230.419. Rule 419 applies to blank 

check companies issuing penny stock as defined 

under rule 3a51–1(a)(2) of the Act. See 17 CFR 

240.3a51–1(a)(2). 

26The Commission also noted, among other 

things, that the requirement that a majority of the 

independent directors approve a business 

combination should also help to ensure that a 

business combination is entered into by the SPAC 

after a fair and impartial decision. See 

IM–5101–2(c). This provision will continue to 

apply to all SPAC business combinations whether 

approved through a shareholder vote or conducted 

through a tender offer under the new provisions 

being adopted in this order. 

27See proposed Nasdaq IM–5101–2(e). 28See Section III, supra. As noted above, while 

generally supportive of the proposal, the 

commenters raised concerns that Nasdaq’s proposal 

does not go far enough. 

combination almost always represent 

more than 20% of the outstanding 

shares before the business combination. 

This commenter views the tender offer 

proposal providing even greater 

participation for shareholders then a 

vote alone under Nasdaq Rule 5635 

since in the tender offer situation 

shareholders can receive their money 

back and therefore, believes that there 

should be an exception to the voting 

requirements in Nasdaq’s rules. 

Another commenter noted that most 

‘‘SPAC business combination 

transactions involve the issuance by the 

SPAC of a significant number of shares, 

which typically triggers one or more 

shareholder approval requirements of 

Rule 5635.’’ 19 This commenter believes 

that by having the ability to redeem 

their shares and ‘‘vote with their feet’’, 

shareholders do not need the additional 

protection of Nasdaq Rule 5635. The 

commenter also notes that the 

shareholder vote requirement currently 

in the SPAC rules has resulted in 

greenmail 20 tactics that the rule filing is 

meant to address, and that without an 

exception to the shareholder approval 

requirements the potential for greenmail 

to continue and other delays caused by 

the vote can narrow the pool of quality 

acquisition targets for the SPAC which 

would be contrary to shareholder 

interests. 

Finally, two more additional 

comments were raised by the 

commenters. First, the Bingham Letter 

suggests Nasdaq’s rule be amended to 

make clear that the SPAC founders’ 

shares can be excluded from the pro rata 

calculation used to determine the per 

share redemption price in those cases 

where the sponsor has agreed not to 

exercise their redemption rights.21

Second, the Graubard Letter states that 

Nasdaq should be allowed to amend its 

rule to permit it to list securities of 

SPACs with smaller size by eliminating 

the 2 year operating history in one of its 

Capital Market initial listing 

requirements.22 In support of this, the 

commenter notes that all the other 

protections for SPACs in Nasdaq’s rules 

would apply and that this would 

recognize the current market 

environment for smaller offerings. 

IV. Discussion and Findings 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange and, in particular, the 

requirements of Section 6(b) of the Act 

and the rules and regulations 

thereunder. Specifically, the 

Commission finds that the proposal is 

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

Act,23 which requires that an exchange 

have rules designed, among other 

things, 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, to protect 

investors and the public interest, and to 

not permit unfair discrimination 

between customers, issuers, brokers, or 

dealers.24

The development and enforcement of 

adequate standards governing the initial 

and continued listing of securities on an 

exchange is an activity of critical 

importance to financial markets and the 

investing public. Listing standards, 

among other things, serve as a means for 

an exchange to screen issuers and to 

provide listed status only to bona fide 

companies that have or, in the case of 

an IPO, will have sufficient public float, 

investor base, and trading interest to 

provide the depth and liquidity 

necessary to promote fair and orderly 

markets. Adequate standards are 

especially important given the 

expectations of investors regarding 

exchange trading and the imprimatur of 

listing on a particular market. Once a 

security has been approved for initial 

listing, maintenance criteria allow an 

exchange to monitor the status and 

trading characteristics of that issue to 

ensure that it continues to meet the 

exchange’s standards for market depth 

and liquidity so that fair and orderly 

markets can be maintained. 

As noted above, SPACs are companies 

that raise capital in IPOs, with the 

purpose of purchasing operating 

companies or assets within a certain 

time frame. Because of their unique 

structure, and the fact that at the outset 

investors will not know the ultimate 

business of the company similar to a 

blank check company, the Commission 

approved Nasdaq listing standards for 

SPACs that were similar in some 

respects to the investor protection 

measures contained in Rule 419 under 

the Securities Act of 1933.25 One of the 

important investor protection 

safeguards, as noted above, is the ability 

of public shareholders to convert their 

shares for a pro rata share of the cash 

held in the trust account if they vote 

against a business combination. In 

approving this provision, the 

Commission noted that the conversion 

rights will help to ensure that public 

shareholders who disagree with 

management’s decision with respect to 

a business combination have adequate 

remedies.26

As noted by Nasdaq in its rule filing, 

however, there have been certain abuses 

as a result of the vote requirement. 

According to Nasdaq, hedge funds and 

other activist investors would acquire 

an interest in a SPAC and use their 

ability to vote against a proposed 

acquisition as leverage to obtain 

additional consideration not available to 

other shareholders. In its filing, Nasdaq 

refers to these abuses as ‘‘greenmail’’ and 

is now proposing to add an option for 

the SPAC to conduct a tender offer 

instead of a shareholder vote. As 

described above, under the proposal the 

SPAC must provide all shareholders 

with the opportunity to redeem all their 

shares for cash equal to their pro rata 

share of the aggregate amount then in 

the deposit account pursuant to Rule 

13e–4 and Regulation 14E under the 

Act.27 The SPAC must file tender offer 

documents with the Commission 

containing substantially the same 

information about the business 

combination and the redemption rights 

as required under the Federal proxy 

solicitation rules. According to Nasdaq 

this is the same outcome available to 

public shareholders who vote against 

the acquisition pursuant to Nasdaq’s 

existing rule and will allow 

shareholders to ‘‘vote with their feet’’ if 

they oppose a proposed acquisition by 

the SPAC while preventing activist 

shareholders from denying shareholders 

the benefit of the transaction. 

The Commission notes that the 

commenters are supportive of this 

proposal and believe that the change 

should help to eliminate the abuses that 

have occurred in relation to the voting 

process on acquisitions by SPACs.28

Nasdaq’s rule would retain the option to 


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29See proposed Nasdaq IM–5101–2(e). 

30See proposed Nasdaq IM–5101–2(d). 

31See Nasdaq Rule 5005(a)(34). 

hold a shareholder vote, and provide 

SPACs with a tender offer option, so 

long as the tender offer is consistent 

with Federal securities laws. Further, 

shareholders’ right to redeem their 

shares would be preserved under either 

scenario. The Commission further notes 

that irrespective of whether a SPACs 

business combination is achieved 

through a tender offer or shareholder 

vote, shareholders, under Nasdaq’s rule, 

will receive comparable financial and 

other information about the business 

combination and the redemption rights. 

In summary, the Commission believes 

that shareholders who are not in favor 

of a business combination should 

continue to have an adequate remedy 

under Nasdaq’s proposal if they disagree 

with management’s decision with 

respect to a business combination, and 

that the Nasdaq’s SPAC rules will 

continue to have safeguards to address 

investor protection, while at the same 

time allowing the greenmail abuses 

noted by Nasdaq to be addressed. Based 

on the above, the Commission finds that 

this proposal is consistent with the 

requirements of the Act and in 

particular the investor protection 

standards under Section 6(b)(5) of the 

Act. 

Nasdaq is also proposing to add 

language to existing provision IM–5101– 

2(d) which concerns the shareholder 

voting requirements applicable to 

business combinations. Under this 

change if a SPAC holds a shareholder 

vote to approve a business combination, 

the provisions, only apply where the 

SPAC must file and furnish a proxy or 

information statement subject to 

Regulation 14A or 14C under the Act in 

advance of the shareholder meeting. 

This change, viewed together with the 

changes discussed above allowing a 

SPAC to do a business combination 

through a tender offer rather than a 

shareholder vote, basically ensures that 

certain SPACs that are not required 

under the federal securities laws to 

comply with the Commission’s proxy 

solicitation rules when soliciting 

proxies, will have to follow the tender 

offer provisions under Nasdaq’s rules. 

Under this provision, the tender offer 

documents are specifically required to 

contain substantially the same financial 

and other information about the 

business combination and redemption 

rights as would be required under the 

proxy rules in Regulation 14A of the 

Act.29 The Commission notes that this 

proposal would clarify the manner in 

which a shareholder vote is held and 

the information that would be required 

by the SPAC to send to shareholders. 

Further, it ensures that all investors will 

be receiving the same information about 

a proposed business combination 

whether it is holding a vote and 

required by law to follow the proxy 

rules or conducting a tender offer under 

the conditions set forth in Nasdaq’s 

rules. This provision also does not 

preclude a SPAC that does not have to 

comply with the federal proxy rules 

when soliciting proxies from having a 

shareholder vote, but just ensures, 

through the tender offer process, that 

the SPAC will be required to provide 

comparable information. Based on the 

above, the Commission finds that this 

portion of the proposal is consistent 

with the requirements of the Act, and in 

particular, the investor protections 

requirements under Section 6(b)(5) of 

the Act. 

Finally, Nasdaq proposes to amend 

language in the SPAC rules to also 

include beneficial holders of more than 

10% of the total outstanding SPAC 

shares to the groups of shareholders that 

are not entitled to convert their shares 

on a pro rata basis for cash if they vote 

against a business combination.30 The 

SPAC definition was originally drafted, 

according to Nasdaq, to mirror the 

‘‘Public Holder’’ definition under 

Nasdaq rules in addition to excluding 

other groups from having conversion 

rights such as the sponsors and 

founding shareholders. The Commission 

notes that the proposed change in the 

definition is consistent with Nasdaq’s 

definition of ‘‘Public Holders,’’ which 

also excludes from its definition ‘‘the 

beneficial holder of more than 10% of 

the total shares outstanding.’’ 31 This 

will ensure consistency with the two 

rules and according to Nasdaq is 

consistent with its original intent. Based 

on this and the existing definition under 

Nasdaq’s rules, the Commission, finds 

that this proposal is consistent with the 

requirements of the Act. 

The commenters also urge the 

Commission to permit Nasdaq to change 

its rules to exempt from the shareholder 

approval requirements in Nasdaq Rule 

5635, SPACs that issue 20% or more of 

their outstanding shares to achieve an 

acquisition. As summarized above, the 

commenters believe that the proposed 

changes allowing a tender offer option 

to avoid ‘‘greenmail’’ situations will not 

be effective if there is a separate 

shareholder approval requirement for 

issuances of 20% or more of the SPACs 

common stock since most SPACs issue 

a large number of shares when 

conducting a business combination. The 

Commission notes that the instant 

proposal centers on the approval of 

shareholders with respect to a business 

combination and the recourse a 

shareholder may have should the 

shareholder disapprove the business 

combination. Nasdaq’s shareholder 

approval rules, on the other hand, are 

stand alone requirements that are meant 

to address different issues such as 

dilution of existing shareholders by the 

issuance of additional shares. While the 

commenters have attempted to address 

some of the concerns arguing that the 

shareholders don’t need the further 

protection of a vote since shareholders 

in a SPAC will be fully aware of their 

redemption rights through disclosure 

and that dilution is not a concern since 

the SPAC must complete business 

combinations with a target having a fair 

market value of at least 80% of the value 

of the trust account, the Commission is 

not convinced that these factors alone 

adequately address the concerns 

underlying the shareholder approval 

rules. 

In conclusion, the Commission notes 

that it has long recognized that the 

Exchange’s shareholder approval 

requirements provide important 

protections to shareholders of listed 

companies from certain corporate 

transactions. These protections are 

central to a shareholder owning shares 

in a Nasdaq listed issuer. Based on this, 

the Commission is not prepared to state 

that a shareholder vote is unnecessary 

in situations where certain disclosures 

are made or there is only a possibility 

the issuance may not cause dilution. 

Any such determination would raise 

significant issues that would have to be 

fully considered by the Commission and 

published for public comment, and may 

raise issues that could potentially go 

beyond the listing of SPACs. The 

Commission further notes that since the 

Exchange has not proposed to change 

the shareholder approval rule at this 

time, that topic is not before the 

Commission and does not need to be 

separately considered at this time. 

Moreover, the commenters indicated 

that issuing additional shares is not a 

requirement, but rather a typical 

business practice for SPACs. The 

Commission notes, for example, that 

SPACs could seek out business 

combinations with a fair market value 

consistent with the value of the SPAC’s 

trust account and possibly avoid the 

issuance of additional shares to trigger 

Nasdaq Rule 5635. 

As to the two remaining comments, 

that the Nasdaq rule language should be 

amended to permit founders shares from 

being excluded from the pro rate 

calculation and that the Nasdaq listing 

rules should be amended to permit the 


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32 15 U.S.C. 78s(b)(2). 

33 17 CFR. 200.30–3(a)(12). 

listing of smaller sized SPACs, the 

Commission notes that Nasdaq has not 

proposed such changes. As to the 

suggestion on the language concerning 

the pro rata calculation, the Commission 

notes that the current language states 

that the pro rata amount is calculated 

based on the aggregate amount in the 

deposit account. It is unclear if founders 

share funds are typically deposited in 

the deposit account. If they are, then it 

is possible a clarification may be helpful 

that the value of the founders shares and 

founders warrants should not be used in 

calculating the pro rata amount owed 

the shareholders in cases where the 

founders agree not to exercise their 

redemption rights. Nasdaq may wish to 

examine this issue further to see if a rule 

filing is necessary to clarify the issue. 

Finally, as to the suggestion that 

Nasdaq’s initial listing standards be 

changed to accommodate the listing of 

smaller sized SPACs, the Commission 

notes that such SPACS can currently 

trade in the over-the-counter market. 

Any change to permit smaller sized 

SPACs to trade on Nasdaq would have 

to be separately proposed and 

considered and could only be approved 

if such a proposal was found to be 

consistent with the requirements of the 

Act. 

V. Conclusion 

Based on the foregoing, the 

Commission finds the proposal is 

consistent with the requirements of the 

Act. It is therefore ordered, pursuant to 

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

proposed rule change (SR–NASDAQ– 

2010–137) is hereby approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.33

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–32904 Filed 12–29–10; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

[Public Notice: 7237] 

The Secretary of State’s International 

Council on Women’s Business 

Leadership 

AGENCY: Department of State. 

ACTION: Notice of intent to establish an 

advisory committee. 

The Secretary of State announces an 

intent to establish the International 

Council on Women’s Business 

Leadership, in accordance with the 

Federal Advisory Committee Act. 

Nature and Purpose: The Council will 

provide advice and assistance in the 

formulation of U.S. policy, positions, 

proposals and strategies for multilateral 

and bilateral negotiations, business 

outreach and commercial diplomacy, 

particularly pertaining to the economic 

empowerment of women for global 

economic prosperity where the State 

Department has the lead negotiating 

authority. The objective of the Council 

is to bring to the United States 

Government a source of expertise, 

knowledge and insight not available 

within the Department or elsewhere in 

the government on these issues. 

Other information: It is anticipated 

that the Council will meet at least once 

a year and at such other times and 

places as are required to fulfill the 

objectives of the Council. The 

Department of State affirms that the 

advisory committee is necessary and in 

the public interest. 

For further information, please 

contact: Nancy Smith-Nissley at (202) 

647–1682. 

Dated: December 20, 2010. 

Lorraine Hariton 

Special Representative, Office of Commercial 

& Business Affairs, U.S. Department of State. 

[FR Doc. 2010–32884 Filed 12–29–10; 8:45 am] 

BILLING CODE 4710–07–P 

OFFICE OF THE UNITED STATES 

TRADE REPRESENTATIVE 

2011 Special 301 Review: Identification 

of Countries Under Section 182 of the 

Trade Act of 1974: Request for Public 

Comment and Announcement of 

Public Hearing 

AGENCY: Office of the United States 

Trade Representative. 

ACTION: Action: Request for written 

submissions from the public and 

announcement of public hearing. 

SUMMARY: Section 182 of the Trade Act 

of 1974 (Trade Act) (19 U.S.C. 2242) 

requires the United States Trade 

Representative (USTR) to identify 

countries that deny adequate and 

effective protection of intellectual 

property rights (IPR) or deny fair and 

equitable market access to U.S. persons 

who rely on intellectual property 

protection. (The provisions of Section 

182 are commonly referred to as the 

‘‘Special 301’’ provisions of the Trade 

Act.). The USTR is required to 

determine which, if any, of these 

countries should be identified as 

Priority Foreign Countries. Acts, 

policies, or practices that are the basis 

of a country’s identification as a Priority 

Foreign Country can be subject to the 

procedures set out in sections 301–305 

of the Trade Act. 

In addition, USTR has created a 

‘‘Priority Watch List’’ and ‘‘Watch List’’ 

to assist the Administration in pursuing 

the goals of the Special 301 provisions. 

Placement of a trading partner on the 

Priority Watch List or Watch List 

indicates that particular problems exist 

in that country with respect to IPR 

protection, enforcement, or market 

access for persons relying on 

intellectual property. Trading partners 

placed on the Priority Watch List are the 

focus of increased bilateral attention 

concerning the problem areas. 

USTR chairs an interagency team that 

reviews information from many sources, 

and that consults with and makes 

recommendations to the USTR on issues 

arising under Special 301. Written 

submissions from interested persons are 

a key source of information for the 

Special 301 review process. In 2011, 

USTR through the Special 301 

Committee will conduct a public 

hearing as part of the review process. 

USTR is hereby requesting written 

submissions from the public concerning 

foreign countries’ acts, policies, or 

practices that are relevant to the 

decision on whether a particular trading 

partner should be identified as a priority 

foreign country under Section 182 of the 

Trade Act or placed on the Priority 

Watch List or Watch List. Interested 

parties, including foreign governments, 

who want to testify at the public hearing 

must submit a request to testify at the 

hearing and a short hearing statement. 

The deadlines for these procedures are 

set out below. 

DATES: The schedule for the 2011 

Special 301 review is set forth below. 

Tuesday, February 15, 2011 (by 5 

p.m.)—For interested parties, except 

for foreign governments: Submit 

written comments, requests to testify 

at the Special 301 Public Hearing, and 

hearing statements. 

Tuesday, February 22, 2011 (by 5 

p.m.)—For foreign governments: 

Submit written comments, requests to 

testify at the Special 301 Public 

Hearing, and hearing statements. 

Wednesday, March 2, 2011—Special 

301 Committee Public Hearing for 

interested parties, including 

representatives of foreign 

governments, will be held at the 

offices of USTR, 1724 F Street, NW., 

Washington, DC 20508. Any change 

in the date or location of the hearing 

will be announced on http:// 

www.ustr.gov. 

On or about April 30, 2011—In 

accordance with statutory 


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