Federal Register / Vol. 86, No. 123 / Wednesday, June 30, 2021 / Notices 34815 

20 17 CFR 240.19b–4(f)(6). 

21 17 CFR 240.19b–4(f)(6)(iii). 

22For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 23 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 20 normally does not 

become operative prior to 30 days after 

the date of filing. However, Rule 19b– 

4(f)(6)(iii) 21 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange has asked the Commission to 

waive the 30-day operative delay so that 

the proposed rule change may become 

operative immediately upon filing. The 

Exchange states that waiver of the 

operative delay would be consistent 

with the protection of investors and the 

public interest because it would enable 

the Exchange to clarify its rule text 

without delay while continuing to 

maintain the Exchange’s existing rules 

designating Legging Orders for last 

priority. For this reason, and because 

the proposed rule change does not raise 

any novel regulatory issues, the 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest. Accordingly, the 

Commission hereby waives the 30-day 

operative delay and designates the 

proposed rule change as operative upon 

filing.22

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. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

change should be approved or 

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– 

BOX–2021–16 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–BOX–2021–16. 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, on official business 

days between the hours of 10:00 a.m. 

and 3:00 p.m., located at 100 F Street 

NE, Washington, DC 20549. 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. 

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–BOX–2021–16 and should 

be submitted on or before July 21, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–13915 Filed 6–29–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92256; File No. SR– 

NASDAQ–2021–045] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing of Proposed Rule Change To 

Modify Certain Pricing Limitations for 

Companies Listing in Connection With 

a Direct Listing Primary Offering 

June 24, 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 June 11, 

2021, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ or the ‘‘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 modify 

certain pricing limitations for 

companies listing in connection with a 

Direct Listing primary offering in which 

the company will sell shares itself in the 

opening auction on the first day of 

trading on Nasdaq. 

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. 


jbell on DSKJLSW7X2PROD with NOTICES
34816 Federal Register / Vol. 86, No. 123 / Wednesday, June 30, 2021 / Notices 

3A Direct Listing with a Capital Raise includes 

situations where either: (i) Only the company itself 

is selling shares in the opening auction on the first 

day of trading; or (ii) the company is selling shares 

and selling shareholders may also sell shares in 

such opening auction. 

4See Securities Exchange Act Release No. 91947 

(May 19, 2021), 86 FR 28169 (May 25, 2021) (the 

‘‘Approval Order’’). 

5References in this proposal to the price range 

established by the issuer in its effective registration 

statement are to the price range disclosed in the 

prospectus in such registration statement. 

Separately, as explained in more details below, 

Nasdaq proposes to prescribe that the 20% 

threshold will be calculated using the high end of 

the price range in the prospectus at the time of 

effectiveness and may be measured from either the 

high end (in the case of an increase in the price) 

or low end (in the case of a decrease in the price) 

of that range. 6See Rule 4120(c)(9)(B). 

7See Approval Order, 86 FR at 28177. 

8See Approval Order, footnote 91. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Nasdaq recently adopted Listing Rule 

IM–5315–2 to permit a company to list 

in connection with a primary offering in 

which the company will sell shares 

itself in the opening auction on the first 

day of trading on the Exchange (a 

‘‘Direct Listing with a Capital Raise’’); 3

created a new order type (the ‘‘CDL 

Order’’), which is used during the 

Nasdaq Halt Cross (the ‘‘Cross’’) for the 

shares offered by the company in a 

Direct Listing with a Capital Raise; and 

established requirements for 

disseminating information, establishing 

the opening price and initiating trading 

through the Cross in a Direct Listing 

with a Capital Raise.4 For a Direct 

Listing with a Capital Raise, Nasdaq 

rules currently require that the actual 

price calculated by the Cross be at or 

above the lowest price and at or below 

the highest price of the price range 

established by the issuer in its effective 

registration statement (the ‘‘Pricing 

Range Limitation’’). 

Nasdaq now proposes to modify the 

Pricing Range Limitation such that a 

Direct Listing with a Capital Raise can 

be executed in the Cross at a price that 

is at or above the price that is 20% 

below the lowest price and at or below 

the price that is 20% above the highest 

price of the price range established by 

the issuer in its effective registration 

statement.5 In addition, Nasdaq 

proposes to modify the Pricing Range 

Limitation such that a Direct Listing 

with a Capital Raise can be executed in 

the Cross at a price above the price that 

is 20% above the highest price of such 

price range, provided that the company 

has certified to Nasdaq that such price 

would not materially change the 

company’s previous disclosure in its 

effective registration statement. Nasdaq 

also proposes to make related 

conforming changes. 

Listing Rule IM–5315–2 requires that 

securities listing in connection with a 

Direct Listing with a Capital Raise must 

begin trading on Nasdaq following the 

initial pricing through the Cross, which 

is described in Rules 4120(c)(9) and 

4753. Rule 4120(c)(9) requires that in 

the case of a Direct Listing with a 

Capital Raise, for purposes of releasing 

securities for trading on the first day of 

listing, Nasdaq, in consultation with the 

financial advisor to the issuer, will 

make the determination of whether the 

security is ready to trade. 

Currently, in the case of the Direct 

Listing with a Capital Raise, a security 

is not released for trading by Nasdaq 

unless the actual price calculated by the 

Cross is at or above the lowest price and 

at or below the highest price of the price 

range established by the issuer in its 

effective registration statement.6

Specifically, under Rule 4120(c)(9)(B) 

Nasdaq shall release the security for 

trading only if: (i) All market orders will 

be executed in the Cross; and (ii) the 

actual price calculated by the Cross 

complies with the Pricing Range 

Limitation. 

If there is insufficient buy interest to 

satisfy the CDL Order and all other 

market orders, as required by the rule, 

or if the actual price calculated by the 

Cross is outside the price range 

established by the issuer in its effective 

registration statement, the Cross would 

not proceed and such security would 

not begin trading. Nasdaq shall 

postpone and reschedule the offering 

only if either or both such conditions 

are not met. In such event, because the 

Cross cannot be conducted, the 

Exchange would postpone and 

reschedule the offering and notify 

market participants via a Trader Update 

that the Direct Listing with a Capital 

Raise scheduled for that date has been 

cancelled and any orders for that 

security that have been entered on the 

Exchange would be cancelled back to 

the entering firms. 

Proposed Change to Rule 4120(c)(9) 

While many companies are interested 

in alternatives to the traditional IPOs, 

based on conversations with companies 

and their advisors Nasdaq believes that 

there may be a reluctance to use the 

existing Direct Listing with a Capital 

Raise rules because of concerns about 

the Pricing Range Limitation. 

One potential benefit of a Direct 

Listing with a Capital Raise as an 

alternative to a traditional IPO is that it 

could maximize the chances of more 

efficient price discovery of the initial 

public sale of securities for issuers and 

investors. Unlike an IPO where the 

offering price is informed by 

underwriter engagement with potential 

investors to gauge interest in the 

offering, but ultimately decided through 

negotiations between the issuer and the 

underwriters for the offering, in a Direct 

Listing with a Capital Raise the initial 

sale price is determined based on 

market interest and the matching of buy 

and sell orders in an auction open to all 

market participants. In that regard, in 

the Approval Order the Commission 

stated that: 

The opening auction in a Direct Listing 

with a Capital Raise provides for a different 

price discovery method for IPOs which may 

reduce the spread between the IPO price and 

subsequent market trades, a potential benefit 

to existing and potential investors. In this 

way, the proposed rule change may result in 

additional investment opportunities while 

providing companies more options for 

becoming publicly traded.7

A successful initial public offering of 

shares requires sufficient investor 

interest. If an offering cannot be 

completed due to lack of investor 

interest, there is likely to be a 

substantial amount of negative publicity 

for the company and the offering may be 

delayed or cancelled. The Pricing Range 

Limitation imposed on a Direct Listing 

with a Capital Raise (but not on a 

traditional IPO) increases the 

probability of such a failed offering 

because the offering cannot proceed 

without some delay not only for the lack 

of investor interest, but also if investor 

interest is greater than the company and 

its advisors anticipated. In the Approval 

Order, the Commission noted a frequent 

academic observation of traditional firm 

commitment underwritten offerings that 

the IPO price, established through 

negotiation between the underwriters 

and the issuer, is often lower than the 

price that the issuer could have 

obtained for the securities, based on a 

comparison of the IPO price to the 

closing price on the first day of trading.8

Nasdaq believes that the price range in 

a company’s effective registration 

statement for a Direct Listing with a 

Capital Raise would similarly be 

determined by the company and its 

advisors and, therefore, there may be 

instances of offerings where the price 

determined by the Nasdaq opening 

auction will exceed the highest price of 

the price range in the company’s 

effective registration statement. 

As explained above, under the 

existing rule a security subject to a 


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Federal Register / Vol. 86, No. 123 / Wednesday, June 30, 2021 / Notices 34817 

9Securities Act Rule 457 permits issuers to 

register securities either by specifying the quantity 

of shares registered, pursuant to Rule 457(a), or the 

proposed maximum aggregate offering amount. 

Nasdaq expects that companies selling shares 

through a Direct Listing with a Capital Raise will 

register securities by specifying the quantity of 

shares registered and not a maximum offering 

amount. See also Compliance & Disclosure 

Interpretation of Securities Act Rules #227.03 at 

https://www.sec.gov/divisions/corpfin/guidance/ 

securitiesactrules-interps.htm. 

10Trader alert is an industry wide subscription 

based free service provided by Nasdaq. 11See Listing Rules 5005(a)(23) and 5005(a)(45). 

Direct Listing with a Capital Raise 

cannot be released for trading by Nasdaq 

if the actual price calculated by the 

Cross is above the highest price of the 

price range established by the issuer in 

its effective registration statement. In 

this case, Nasdaq would have to cancel 

or postpone the offering until the 

company amends its effective 

registration statement. At a minimum, 

such a delay exposes the company to 

market risk of changing investor 

sentiment in the event of an adverse 

market event. In addition, as explained 

above, the determination of the public 

offering price of a traditional IPO is not 

subject to limitations similar to the 

Pricing Range Limitation for a Direct 

Listing with a Capital Raise, which, in 

Nasdaq’s view, could make companies 

reluctant to use this alternative method 

of going public despite its expected 

potential benefits. 

Accordingly, Nasdaq proposes to 

modify the Pricing Range Limitation 

such that in the case of the Direct 

Listing with a Capital Raise, a security 

shall not be released for trading by 

Nasdaq unless the actual price at which 

the Cross would occur is at or above the 

price that is 20% below the lowest price 

of the price range established by the 

issuer in its effective registration 

statement and at or below the price that 

is 20% above the highest price of the 

price range. In other words, Nasdaq 

would release the security for trading, 

provided all other necessary conditions 

are satisfied, even if the actual price 

calculated by the Cross is outside the 

price range established by the issuer in 

its effective registration statement; 

provided however that the actual price 

cannot be more than 20% below the 

lowest price or more than 20% above 

the highest price of such range; and the 

company specified the quantity of 

shares registered, as permitted by 

Securities Act Rule 457, as explained 

below. In addition, there would be no 

limitation on releasing the security for 

trading at a price above the price that is 

20% above the highest price of the price 

range established by the issuer in its 

effective registration statement if the 

company has certified to Nasdaq that 

such offering price would not materially 

change the company’s previous 

disclosure in its effective registration 

statement. 

Nasdaq believes that this approach is 

consistent with SEC Rule 430A and 

question 227.03 of the SEC Staff’s 

Compliance and Disclosure 

Interpretations, which generally allow a 

company to price a public offering 20% 

outside of the disclosed price range 

without regard to the materiality of the 

changes to the disclosure contained in 

the company’s registration statement.9

Nasdaq believes such guidance also 

allows deviation above the price range 

beyond the 20% threshold if such 

change or deviation does not materially 

change the previous disclosure. 

Accordingly, Nasdaq believes that a 

company listing in connection with a 

Direct Listing with a Capital Raise can 

specify the quantity of shares registered, 

as permitted by Securities Act Rule 457, 

and, when an auction prices outside of 

the disclosed price range, use a Rule 

424(b) prospectus, rather than a posteffective amendment, when either (i) the 

20% threshold noted in Rule 430A is 

not exceeded, regardless of the 

materiality or non-materiality of 

resulting changes to the registration 

statement disclosure that would be 

contained in the Rule 424(b) prospectus, 

or (ii) when there is a deviation above 

the price range beyond the 20% 

threshold noted in Rule 430A if such 

deviation would not materially change 

the previous disclosure, in each case 

assuming the number of shares issued is 

not increased from the number of shares 

disclosed in the prospectus. Consistent 

with the Commission’s Staff guidance 

on Rule 430A, Nasdaq proposes to 

prescribe that this 20% threshold will 

be calculated using the high end of the 

price range in the prospectus at the time 

of effectiveness and may be measured 

from either the high end (in the case of 

an increase in the price) or low end (in 

the case of a decrease in the price) of 

that range. 

Finally, given that, as proposed, there 

may be a Direct Listing with a Capital 

Raise that could price outside the price 

range of the company’s effective 

registration statement and that there 

may be no upside limit above which the 

Cross could not proceed, in each 

instance of a Direct Listing with a 

Capital Raise, Nasdaq will issue an 

industry wide trader alert 10 to inform 

the market participants that the auction 

could price up to 20% below the lowest 

price of the price range in the 

company’s effective registration 

statement and specify what that price is. 

Nasdaq will also indicate in such trader 

alert whether or not there is an upside 

limit above which the Cross could not 

proceed, based on the company’s 

certification, as described above. If there 

is no upside limit, Nasdaq will caution 

the market participants about the use of 

market orders explaining that unlike a 

limit order a market order can be 

executed at any price determined by the 

Cross. 

Proposed Conforming Changes to 

Listing Rule IM–5315–2 

Listing Rule IM–5315–2 allows a 

company that has not previously had its 

common equity securities registered 

under the Act to list its common equity 

securities on the Nasdaq Global Select 

Market at the time of effectiveness of a 

registration statement pursuant to which 

the company itself will sell shares in the 

opening auction on the first day of 

trading on the Exchange. 

Listing Rule IM–5315–2 provides that 

in determining whether a company 

listing in connection with a Direct 

Listing with a Capital Raise satisfies the 

Market Value of Unrestricted Publicly 

Held Shares 11 for initial listing on the 

Nasdaq Global Select Market, the 

Exchange will deem such company to 

have met the applicable requirement if 

the amount of the company’s 

Unrestricted Publicly Held Shares 

before the offering along with the 

market value of the shares to be sold by 

the company in the Exchange’s opening 

auction in the Direct Listing with a 

Capital Raise is at least $110 million (or 

$100 million, if the company has 

stockholders’ equity of at least $110 

million). 

Listing Rule IM–5315–2 further 

provides that, for this purpose, the 

Market Value of Unrestricted Publicly 

Held Shares will be calculated using a 

price per share equal to the lowest price 

of the price range disclosed by the 

issuer in its effective registration 

statement. 

Because Nasdaq proposes to allow the 

opening auction to price up to 20% 

below the lowest price of the price range 

established by the issuer in its effective 

registration statement, Nasdaq proposes 

to make a conforming change to Listing 

Rule IM–5315–2 to provide that the 

price used to determine such company’s 

compliance with the Market Value of 

Unrestricted Publicly Held Shares is the 

price per share equal to the price that is 

20% below the lowest price of the price 

range disclosed by the issuer in its 

effective registration statement as this is 

the minimum price at which the 

company could qualify to be listed. 

Nasdaq will determine that the 

company has met the applicable bid 


jbell on DSKJLSW7X2PROD with NOTICES
34818 Federal Register / Vol. 86, No. 123 / Wednesday, June 30, 2021 / Notices 

12See Listing Rules 5315(f)(1), (e)(1) and (2), 

respectively. Rule 5315(f)(1) requires a security to 

have: (A) At least 550 total holders and an average 

monthly trading volume over the prior 12 months 

of at least 1,100,000 shares per month; or (B) at least 

2,200 total holders; or (C) a minimum of 450 round 

lot holders and at least 50% of such round lot 

holders must each hold unrestricted securities with 

a market value of at least $2,500. 

13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(5). 

15https://www.sec.gov/divisions/corpfin/ 

guidance/securitiesactrules-interps.htm. 

price and market capitalization 

requirements based on the same per 

share price. 

Any company listing in connection 

with a Direct Listing with a Capital 

Raise would continue to be subject to, 

and required to meet, all other 

applicable initial listing requirements, 

including the requirements to have the 

applicable number of shareholders and 

at least 1,250,000 Unrestricted Publicly 

Held Shares outstanding at the time of 

initial listing, and the requirement to 

have a price per share of at least $4.00 

at the time of initial listing.12

Proposed Conforming Changes to Rules 

4753(a)(3)(A) and 4753(b)(2) 

Nasdaq proposes to amend Rules 

4753(a)(3)(A) and 4753(b)(2) to conform 

the requirements for disseminating 

information and establishing the 

opening price through the Cross in a 

Direct Listing with a Capital Raise to the 

proposed amendment to allow the 

opening auction to price as much as 

20% below the lowest price of the price 

range established by the issuer in its 

effective registration statement. 

Specifically, Nasdaq proposes 

changes to Rules 4753(a)(3)(A) and 

4753(b)(2) to make adjustments to the 

calculation of the Current Reference 

Price, which is disseminated in the 

Nasdaq Order Imbalance Indicator, in 

the case of a Direct Listing with a 

Capital Raise and for how the price at 

which the Cross will execute. These 

rules currently provide that where there 

are multiple prices that would satisfy 

the conditions for determining a price, 

the fourth tie-breaker for a Direct Listing 

with a Capital Raise is the price that is 

closest to the lowest price of the price 

range disclosed by the issuer in its 

effective registration statement. 

To conform these rules to the 

modification of the Pricing Range 

Limitation change, as described above, 

Nasdaq proposes to modify the fourth 

tie-breaker for a Direct Listing with a 

Capital Raise, to use the price closest to 

the price that is 20% below the lowest 

price of the price range disclosed by the 

issuer in its effective registration 

statement. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,13 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,14

in particular, in that it is designed 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. 

Nasdaq believes that the proposed 

amendment to modify the Pricing Range 

Limitation is consistent with the 

protection of investors because this 

approach is not substantively different 

from pricing of an IPO where an issuer 

is permitted to price outside of the price 

range disclosed by the issuer in its 

effective registration statement in 

accordance with the SEC’s Staff 

guidance, as described above. 

Specifically, Nasdaq believes that a 

company listing in connection with a 

Direct Listing with a Capital Raise can 

specify the quantity of shares registered, 

as permitted by Securities Act Rule 457, 

and, when an auction prices outside of 

the disclosed price range, use a Rule 

424(b) prospectus, rather than a posteffective amendment, when either (i) the 

20% threshold noted in Rule 430A is 

not exceeded, regardless of the 

materiality or non-materiality of 

resulting changes to the registration 

statement disclosure that would be 

contained in the Rule 424(b) prospectus, 

or (ii) when there is a deviation above 

the price range beyond the 20% 

threshold noted in Rule 430A if such 

deviation would not materially change 

the previous disclosure, in each case 

assuming the number of shares issued is 

not increased from the number of shares 

disclosed in the prospectus. As a result, 

Nasdaq will allow the Cross to take 

place as low as 20% below the lowest 

price of the price range disclosed by the 

issuer in its effective registration 

statement, but no lower, and so this is 

the minimum price at which the 

company could be listed. In addition, to 

better inform investors and market 

participants, Nasdaq will issue an 

industry wide trader alert to inform the 

participants that the auction could price 

up to 20% below the lowest price of the 

price range in the company’s effective 

registration statement and specify what 

that price is. Nasdaq will also indicate 

in such trader alert whether or not there 

is an upside limit above which the Cross 

could not proceed, based on the 

company’s certification, as described 

above. If there is no upside limit, 

Nasdaq will caution the market 

participants about the use of market 

orders explaining that unlike a limit 

order a market order can be executed at 

any price determined by the Cross. 

Nasdaq believes that the Commission 

Staff has already concluded that such 

pricing is appropriate for a company 

conducting an initial public offering 

notwithstanding it being outside of the 

range stated in an effective registration 

statement, and investors have become 

familiar with this approach at least 

since the Commission Staff last revised 

Compliance and Disclosure 

Interpretation 227.03 in January 2009.15

Nasdaq believes that the proposed 

amendments to Listing Rule IM–5315–2 

and Rules 4753(a)(3)(A) and 4753(b)(2) 

to conform these rules to the 

modification of the Pricing Range 

Limitation is consistent with the 

protection of investors. These 

amendments would simply substitute 

Nasdaq’s reliance on the price equal to 

the lowest price of the price range 

disclosed by the issuer in its effective 

registration statement to the price that is 

20% below such lowest price. In the 

case of Listing Rule IM–5315–2, a 

company listing in connection with a 

Direct Listing with a Capital Raise 

would still need to meet all applicable 

initial listing requirements based on the 

price that is 20% below the lowest price 

of the price range disclosed by the 

issuer in its effective registration 

statement. In the case of the Rules 

4753(a)(3)(A) and 4753(b)(2) such price, 

which is the minimum price at which 

the Cross will occur, will serve as the 

fourth tie-breaker where there are 

multiple prices that would satisfy the 

conditions for determining the auction 

price, as described above. 

Nasdaq also believes that the 

proposal, by eliminating an impediment 

to companies using a Direct Listing with 

a Capital Raise, will help removing 

potential impediments to free and open 

markets consistent with Section 6(b)(5) 

of the Exchange Act while also 

supporting capital formation. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed amendments would not 

impose any burden on competition, but 

would rather increase competition. 

Nasdaq believes that allowing listing 

venues to improve their rules enhances 

competition among exchanges. Nasdaq 

also believes that this proposed change 

will give issuers interested in this 


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Federal Register / Vol. 86, No. 123 / Wednesday, June 30, 2021 / Notices 34819 

16 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Rules 1.1E(m) (definition of ETP) & (n) 

(definition of ETP Holder). 

pathway to access the capital markets 

additional flexibility in becoming a 

public company, and in that way 

promote competition among service 

providers, such as underwriters and 

other advisors, to such companies. 

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 

will: (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–2021–045 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–2021–045. 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 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. 

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–2021–045, and 

should be submitted on or before July 

21, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–13916 Filed 6–29–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92254; File No. SR– 

NYSEAMER–2021–31] 

Self-Regulatory Organizations; NYSE 

American LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Rule 7.31E To 

Add a Retail Order Modifier and the 

NYSE American Equities Price List and 

Fee Schedule To Cross Reference the 

Retail Order Modifier 

June 24, 2021. 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on June 21, 

2021, NYSE American LLC (‘‘NYSE 

American’’ or ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. 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 amend its 

rules to add new subparagraph (i)(4) to 

Rule 7.31E and amend the NYSE 

American Equities Price List and Fee 

Schedule. The proposed rule change is 

available on the Exchange’s website at 

www.nyse.com, 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 

self-regulatory organization 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 those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

rules to add new subparagraph (i)(4) to 

Rule 7.31E (Orders and Modifiers) to 

add a description of a Retail Order 

modifier and to amend the Price List to 

add a cross-reference to Rule 7.31E(i)(4). 

Proposed Rule Change 

The Exchange proposes to amend 

Rule 7.31E to add new subparagraph 

(i)(4) to provide for ETP Holders 4 to 

designate an order with a retail modifier 

(‘‘Retail Order’’). An order designated as 

a ‘‘Retail Order’’ pursuant to proposed 

Rule 7.31E(i)(4) would be eligible for the 

Retail Order Rates specified on the 

Exchange’s Price List. 

Proposed Modifier for ‘‘Retail Orders’’ 

To define ‘‘Retail Orders,’’ the 

Exchange proposes to amend Rule 7.31E 

(Orders and Modifiers) to add a new 

subsection (i)(4), titled ‘‘Retail 

Modifier’’ to establish requirements for 

Retail Orders on the Exchange. These 

requirements are based on the 

requirements to enter orders with 

‘‘retail’’ modifiers for purposes of rates 


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