Federal Register / Vol. 89, No. 2 / Wednesday, January 3, 2024 / Notices 425 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 98532 

(Sept. 26, 2023) 88 FR 67852. 

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

5See Securities Exchange Act Release No. 98860, 

88 FR 77647 (Nov. 13, 2023). The Commission 

designated December 31, 2023 as the date by which 

the Commission shall approve or disapprove, or 

institute proceedings to determine whether to 

disapprove, the proposed rule change. 

6Comments received on the proposed rule change 

are available at: https://www.sec.gov/comments/srcboebzx-2023-063/srcboebzx2023063.htm. 

7 15 U.S.C. 78s(b)(2)(B). 

8For a full description of all aspects of the 

proposed rule change, please see the Notice, supra 

note 3. 

9 17 CFR 240.3a51–1(g). 

10See 17 CFR 240.3a51–1(g). A company seeking 

to qualify under only the Market Value of Listed 

Securities Standard would, among other things, also 

be required to maintain for 90 consecutive trading 

days the market value of its listed securities at $50 

million and the $2 price requirement prior to 

applying to list under the alternative standard. See 

proposed Exchange Rule 14.9(b)(2)(B). Under the 

Market Value of Listed Securities Standard, a 

company would need to achieve, among other 

things: (A) market value of listed securities of at 

least $50 million (current publicly traded issuers 

must meet this requirement and the price 

requirement for 90 consecutive trading days prior 

to applying for listing if qualifying to list only 

under the market value of listed securities 

standard); (B) stockholders’ equity of at least $4 

million; and (C) market value of publicly held 

shares of at least $15 million. The Exchange 

proposes to revise Rule 14.9(b)(2)(B) in order to 

make it consistent with the proposal. In particular, 

Rule 14.9(b)(2)(B)(i) would be revised to delete the 

specific reference to $4 bid price requirement, since 

an issuer seeking to initially list its securities under 

the Market Value of Listed Securities Standard 

using the proposed alternative price requirement 

would have to maintain a closing price of at least 

$2 per share for 90 consecutive trading days. 

11See Exchange Rule 14.9(b)(2)(A). 

12See Exchange Rule 14.9(b)(2)(C). 

13See proposed Exchange Rule 14.9(b)(2)(B). 

14The Exchange states that the proposed rule 

adopts the 15-month requirement to assure 

consistency with the timing requirements contained 

in Exchange Act Rule 3a51–1(g). 

of an affidavit or, for lawyers, a 

certificate of service. Pursuant to rule 0– 

5 under the Act, hearing requests should 

state the nature of the writer’s interest, 

any facts bearing upon the desirability 

of a hearing on the matter, the reason for 

the request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

emailing the Commission’s Secretary at 

Secretarys-Office@sec.gov. 

ADDRESSES: The Commission: 

Secretarys-Office@sec.gov. Applicants: 

Matthew Bogart matthew.bogart@

abcarval.com, Kenneth Young 

ken.young@dechert.com, William J. 

Bielefeld william.bielefeld@

dechert.com, and Matthew Barsamian 

matthew.barsamian@dechert.com. 

FOR FURTHER INFORMATION CONTACT: 

Priscilla Dao, Senior Counsel, or Robert 

Shapiro, Assistant Director, at (202) 

551–6825 (Division of Investment 

Management, Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: For 

Applicants’ representations, legal 

analysis, and conditions, please refer to 

Applicants’ second amended and 

restated application, dated September 

15, 2023, which may be obtained via the 

Commission’s website by searching for 

the file number at the top of this 

document, or for an Applicant using the 

Company name search field, on the 

SEC’s EDGAR system. 

The SEC’s EDGAR system may be 

searched at http://www.sec.gov/edgar/ 

searchedgar/legacy/ 

companysearch.html. You may also call 

the SEC’s Public Reference Room at 

(202) 551–8090. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Christina Z. Milnor, 

Assistant Secretary. 

[FR Doc. 2023–28867 Filed 1–2–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99247; File No. SR– 

CboeBZX–2023–063] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove a Proposed 

Rule Change To Adopt an Alternative 

to the Minimum $4 Price Requirement 

for Companies Seeking To List Tier II 

Securities on the Exchange 

December 27, 2023. 

On September 19, 2023, Cboe BZX 

Exchange, Inc. (‘‘BZX’’ or the 

‘‘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 

adopt an alternative to the minimum $4 

price requirement for companies 

seeking to list Tier II securities on the 

Exchange. The proposed rule change 

was published for comment in the 

Federal Register on October 2, 2023.3

On November 6, 2023, pursuant to 

Section 19(b)(2) of the Act,4 the 

Commission designated a longer period 

within which to approve the proposed 

rule change, disapprove the proposed 

rule change, or institute proceedings to 

determine whether to disapprove the 

proposed rule change.5 The Commission 

received two comments letters on the 

proposed rule change.6 This order 

institutes proceedings under Section 

19(b)(2)(B) of the Act 7 to determine 

whether to approve or disapprove the 

proposed rule change. 

I. Summary of the Proposed Rule 

Change 8

The Exchange proposes to adopt an 

alternative to the current minimum $4 

price requirement for companies 

seeking to list securities on Tier II of the 

Exchange that are excluded from the 

definition of a ‘‘penny stock’’ under 

Exchange Act Rule 3a51–1(g) (the 

‘‘Penny Stock Rule’’).9 Specifically, 

under proposed Exchange Rule 

14.9(b)(1)(A)(ii), a company whose 

security maintains a $2 or $3 closing 

price for at least five consecutive 

business days prior to approval would 

qualify for listing as a Tier II security, 

if among other things, it meets the net 

tangible assets or average revenue tests 

of the alternative penny stock exclusion 

set forth in Exchange Act Rule 3a51– 

1(g) 10 and meets all existing listing 

standards except for the $4 price 

requirement. Such a company must 

instead have a minimum $3 price if it 

qualifies under the $5 million equity 11

or $750,000 net income alternatives 12 or 

a minimum $2 price if it qualifies under 

the $50 million market value of listed 

securities alternative.13 In addition, a 

company qualifying under the proposed 

standard must have either: (a) net 

tangible assets in excess of $2 million, 

if the company has been in continuous 

operation for at least three years; or (b) 

net tangible assets in excess of $5 

million, if the company has been in 

continuous operation for less than three 

years; or (c) average revenue of at least 

$6 million for the last three years. For 

this purpose, net tangible assets or 

revenue must be demonstrated on the 

company’s most recently filed audited 

financial statements, satisfying the 

requirements of the Commission, and 

which are dated less than 15 months 

prior to the date of listing.14

As proposed under new Interpretation 

and Policies .01(a) to Exchange Rule 

14.9, an Exchange-listed security could 

become subject to the Penny Stock Rule 

following initial listing if it no longer 

meets the tangible assets or average 

revenue tests of the alternative 

exclusion and does not qualify for 

another exclusion under the penny 

stock rules. Further, unlike securities 

listed under the Exchange’s existing 

initial standards, which have a blanket 

exclusion from the Penny Stock Rule, 

broker-dealers that effect recommended 

transactions in securities that originally 

qualified for listing under the 

Exchange’s alternative price standard 

would, among other things, under 

Exchange Act Rule 3a51–1(g), need to 


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426 Federal Register / Vol. 89, No. 2 / Wednesday, January 3, 2024 / Notices 

15The Exchange believes that the other exclusion 

most likely to be implicated would be Rule 3a51– 

1(d), 17 CFR 240.3a51–1(d), which provides an 

exclusion from the definition of a penny stock for 

a security with a minimum bid price of $5. 

However, the Exchange states that if a Company 

obtains a $4 minimum bid price at a time when it 

meets all other initial listing requirements, the 

Exchange would no longer consider the company as 

having listed under the proposed alternative 

standard. 

16See proposed Interpretations and Policies .01(a) 

to Exchange Rule 14.9. 

17See id. 

18The security would have to meet the $4 bid 

price requirement contained in proposed Exchange 

Rule 14.9(b)(1)(A)(i). In addition, proposed Rule 

14.9(b)(2)(B) requires a company qualifying only 

under the Market Value of Listed Securities 

requirement to satisfy that requirement and the 

price requirement for 90 consecutive trading days 

prior to applying for listing. Such a company would 

have to achieve a $4 bid price for 90 consecutive 

trading days and a $4 closing price for five days, 

although these periods may overlap. 

19See Exchange Rule 11.23(a)(3). As provided in 

Exchange Rule 11.23(c)(2)(B), ‘‘[f]or a BZX-listed 

corporate security, the Closing Auction price will 

be the BZX Official Closing Price. In the event that 

there is no Closing Auction for a BZX-listed 

corporate security, the BZX Official Closing Price 

will be the price of the Final Last Sale Eligible 

Trade. See Exchange Rule 11.23(a)(9) for the 

definition of ‘‘Final Last Sale Eligible Trade.’’ 

20See proposed Interpretations and Policies 

.01(b) to Exchange Rule 14.9. The Exchange states 

that it will work with FINRA to adopt surveillance 

procedures to monitor securities listed under the 

proposed alternative as they approach $4. See 

Notice, supra note 3, at 67853. According to the 

Exchange, these procedures will be designed to 

identify anomalous trading that could be indicative 

of potential manipulation of the price. See id. 

21See proposed Interpretations and Policies 

.01(b) to Exchange Rule 14.9. 

22See Exchange Rule 14.2. See also Notice, supra 

note 3, at 67854. 

23 15 U.S.C. 78s(b)(2)(B). 

24 Id. 

25 15 U.S.C. 78f(b)(5). 

26 15 U.S.C. 78f(b)(8). 

27The Commission has stated in approving 

exchange listing requirements that the development 

and enforcement of adequate standards governing 

the listing of securities on an exchange is an activity 

of critical importance to the financial markets and 

the investing public. In addition, 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. See, e.g., Securities 

Exchange Act Release No. 91947 (May 19, 2021), 86 

FR 28169 (May 25, 2021) (SR–NASDAQ–2020–057); 

Securities Exchange Act Release Nos. 90768 (Dec. 

22, 2020), 85 FR 85807, 85811 n.55 (Dec. 29, 2020) 

(SR–NYSE–2019–67) (‘‘NYSE 2020 Order’’); 82627 

review current financial statements of 

the issuer to verify that it meets the 

applicable net tangible assets or average 

revenue test, have a reasonable basis for 

believing they remain accurate, and 

preserve copies of those financial 

statements as part of its records. As 

provided in proposed Interpretation and 

Policies .01 to Rule 14.9, in order to 

assist brokers’ and dealers’ compliance 

with the requirements of the Penny 

Stock Rule, the Exchange would 

monitor companies listed under the 

proposed alternative and publish a list 

of any company that initially listed 

under that requirement, which does not 

then meet the requirements of Exchange 

Act Rule 3a51–1(g), described above, or 

any of the other exclusions from being 

a penny stock contained in Rule 3a51– 

1.15 Such list would be updated on a 

daily basis.16

If a company initially lists its security 

with a bid price below $4 under the 

alternative requirement contained in 

Rule 14.9(b)(1)(A)(ii), but subsequently 

achieves a $4 closing price for at least 

five consecutive business days and, at 

the same time, satisfies all other initial 

listing criteria, it would no longer be 

considered as having listed under the 

alternative requirement and the 

Exchange would notify the Company 

that it has qualified for listing under the 

price requirement contained in Rule 

14.9(b)(1)(A)(i).17 If a security obtains a 

$4 closing price, the Exchange would 

determine whether the security meets 

all other initial listing requirements for 

Tier II securities, including both the 

quantitative and qualitative 

requirements.18 If the security meets all 

initial Tier II listing requirements, it 

would satisfy the requirements for the 

exclusion contained in Rule 3a51– 

1(a)(2) and would no longer be 

monitored by the Exchange for 

compliance with the other exclusions 

from the definition of a penny stock. 

Proposed Interpretations and Policies 

.01(a) to Exchange Rule 14.9 would 

remind brokers and dealers that the list 

published by the Exchange is only an 

aid and that the Penny Stock Rule 

imposes specific obligations on brokers 

and dealers with respect to transactions 

in penny stocks. Proposed Interpretation 

and Policy .01(b) to Exchange Rule 14.9 

provides that the proposed alternative 

price test will be based on the BZX 

Official Closing Price 19 in the security. 

The Exchange also proposes that the 

required closing price must be achieved 

for at least five consecutive business 

days before approval of the listing 

application.20 The Exchange may 

extend the minimum five-day 

compliance period required to satisfy 

these tests based on any fact or 

circumstance, including the margin of 

compliance, the trading volume, the 

trend of the security’s price, or 

information or concerns raised by other 

regulators concerning the trading of the 

security.21 The Exchange states that 

requiring the minimum $2 or $3 closing 

price to be maintained for a period of 

five days (as opposed to one day) should 

reduce the risk that some might attempt 

to manipulate or otherwise artificially 

inflate the closing price in order to 

allow a security to qualify for listing. In 

addition, the Exchange represents that it 

will exercise its discretionary authority 

to deny initial listing if there are 

particular concerns about a company, 

such as its ability to maintain 

compliance with continued listing 

standards or if there are other public 

interest concerns.22

II. Proceedings To Determine Whether 

To Approve or Disapprove SR– 

CboeBZX–2023–063 and Grounds for 

Disapproval Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Act 23 to determine 

whether the proposed rule change 

should be approved or disapproved. 

Institution of proceedings is appropriate 

at this time in view of the legal and 

policy issues raised by the proposal. 

Institution of proceedings does not 

indicate that the Commission has 

reached any conclusions with respect to 

any of the issues involved. Rather, as 

described below, the Commission seeks 

and encourages interested persons to 

provide additional comment on the 

proposed rule change. 

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

Act,24 the Commission is providing 

notice of the grounds for disapproval 

under consideration. The Commission is 

instituting proceedings to allow for 

additional analysis of, and input from 

commenters with respect to, the 

consistency of the proposal with 

Sections 6(b)(5) 25 and 6(b)(8) 26 of the 

Act. Section 6(b)(5) of the Act requires 

that the rules of a national securities 

exchange be 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 and, in 

general, to protect investors and the 

public interest, and not be designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

Section 6(b)(8) of the Act requires that 

the rules of a national securities 

exchange not impose any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

The Commission has consistently 

recognized the importance of exchange 

listing standards. Among other things, 

such listing standards help ensure that 

exchange-listed companies will have 

sufficient public float, investor base, 

and trading interest to provide the depth 

and liquidity necessary to promote fair 

and orderly markets.27 Under the 


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Federal Register / Vol. 89, No. 2 / Wednesday, January 3, 2024 / Notices 427 

(Feb. 2, 2018), 83 FR 5650, 5653 n.53 (Feb. 8, 2018) 

(SRNYSE–2017–30) (‘‘NYSE 2018 Order’’); 81856 

(Oct. 11, 2017), 82 FR 48296, 48298 (Oct. 17, 2017) 

(SR–NYSE–2017–31); 81079 (July 5, 2017), 82 FR 

32022, 32023 (July 11, 2017) (SR–NYSE–2017–11). 

The Commission has stated that adequate listing 

standards, by promoting fair and orderly markets, 

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

Act, in that they are, among other things, designed 

to prevent fraudulent and manipulative acts and 

practices, promote just and equitable principles of 

trade, and protect investors and the public interest. 

See, e.g., NYSE 2020 Order, 85 FR at 85811 n.55; 

NYSE 2018 Order, 83 FR at 5653 n.53; Securities 

Exchange Act Release Nos. 87648 (Dec. 3, 2019), 84 

FR 67308, 67314 n.42 (Dec. 9, 2019) (SR–NASDAQ– 

2019–059); 88716 (Apr. 21, 2020), 85 FR 23393, 

23395 n.22 (Apr. 27, 2020) (SR–NASDAQ–2020– 

001). 

28 17 CFR 201.700(b)(3). 

29See id. 

30See id. 

31 17 CFR 240.19b–4. 

32Section 19(b)(2) of the Act, as amended by the 

Securities Acts Amendments of 1975, Public Law 

94–29 (Jun. 4, 1975), grants to the Commission 

flexibility to determine what type of proceeding— 

either oral or notice and opportunity for written 

comments—is appropriate for consideration of a 

particular proposal by a self-regulatory 

organization. See Securities Acts Amendments of 

1975, Senate Comm. on Banking, Housing & Urban 

Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 

(1975). 33 17 CFR 200.30–3(a)(57). 

proposed rule change, shares subject to 

resale restrictions (‘‘Restricted 

Securities’’) are counted in the 

calculations of the company’s publicly 

held shares, market value of publicly 

held shares, and round lot holder. The 

Commission believes that a company’s 

publicly held shares, market value of 

publicly held shares, and the number of 

round lot holders are indicators of the 

liquidity of its shares. To the extent 

Restricted Securities are counted when 

calculating a company’s publicly held 

shares, market value of publicly held 

shares, and round lot holders, the 

company’s shares could be less liquid, 

potentially making them more 

susceptible to price manipulation. 

Under the Commission’s Rules of 

Practice, the ‘‘burden to demonstrate 

that a proposed rule change is 

consistent with the [Exchange Act] and 

the rules and regulations issued 

thereunder . . . is on the [SRO] that 

proposed the rule change.’’ 28 The 

description of a proposed rule change, 

its purpose and operation, its effect, and 

a legal analysis of its consistency with 

applicable requirements must all be 

sufficiently detailed and specific to 

support an affirmative Commission 

finding,29 and any failure of an SRO to 

provide this information may result in 

the Commission not having a sufficient 

basis to make an affirmative finding that 

a proposed rule change is consistent 

with the Exchange Act and the 

applicable rules and regulations.30 The 

Commission is instituting proceedings 

to allow for additional consideration 

and comment on the issues raised 

herein. 

III. Procedure: Request for Written 

Comments 

The Commission requests that 

interested persons provide written 

submissions of their data, views, and 

arguments with respect to the issues 

identified above, as well as any other 

concerns they may have with the 

proposal. In particular, the Commission 

invites the written views of interested 

persons concerning whether the 

proposed rule change is consistent with 

the Exchange Act and the rules and 

regulations thereunder. 

Although there do not appear to be 

any issues relevant to approval or 

disapproval that would be facilitated by 

an oral presentation of data, views, and 

arguments, the Commission will 

consider, pursuant to Rule 19b–4 under 

the Act,31 any request for an 

opportunity to make an oral 

presentation.32

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposed rule change should be 

approved or disapproved by January 24, 

2024. Any person who wishes to file a 

rebuttal to any other person’s 

submission must file that rebuttal by 

February 7, 2024. 

Comments may be submitted by any 

of the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

CboeBZX–2023–063 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–CboeBZX–2023–063. 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 (https://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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–CboeBZX–2023–063 and Should be 

submitted by January 24, 2024. Rebuttal 

comments should be submitted by 

February 7, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.33

Christina Z. Milnor, 

Assistant Secretary. 

[FR Doc. 2023–28868 Filed 1–2–24; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

[Docket No. FAA–2023–1114] 

Agency Information Collection 

Activities: Requests for Comments; 

Clearance of Renewed Approval of 

Information Collection: Noise 

Certification Standards for Subsonic 

Jet Airplanes and Subsonic Transport 

Category Large Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice and request for 

comments. 

SUMMARY: In accordance with the 

Paperwork Reduction Act of 1995, FAA 

invites public comments about our 

intention to request the Office of 

Management and Budget (OMB) 

approval to renew an information 

collection. The Federal Register Notice 

with a 60-day comment period soliciting 

comments on the following collection of 

information was published on May 8, 

2023. 

DATES: Written comments should be 

submitted by February 2, 2024. 


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