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

2 15 U.S.C. 78s. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release No. 90768 

(December 22, 2020), 85 FR 85807 (December 29, 

2020) (SR–NYSE–2019–67) (Order Setting Aside 

Action by Delegated Authority and Approving a 

Proposed Rule Change, as Modified by Amendment 

No. 2, to Amend Chapter One of the Listed 

Company Manual to Modify the Provisions Relating 

to Direct Listings) (the ‘‘Approval Order’’). 

5 Id. 

6The Exchange notes that references in this rule 

filing 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. In addition, as explained in 

more detail below, the Exchange proposes that the 

20% threshold be calculated based on the 

maximum offering price set forth in the registration 

fee table, consistent with the Instruction to 

paragraph (a) of Securities Act Rule 430A. 

7As discussed further below, the Exchange 

proposes to define the ‘‘Primary Direct Floor Listing 

Auction Price Range’’ as the price range that 

includes 20% below the lowest price and 20% 

above the highest price of the Issuer Price Range. 

SECURITIES AND EXCHANGE 

COMMISSION 

Release No. 34–94708; File No. SR– 

NYSE–2022–14] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change To 

Modify Certain Pricing Limitations for 

Securities Listed on the Exchange 

Pursuant to a Primary Direct Floor 

Listing 

April 13, 2022. 

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 April 7, 

2022, New York Stock Exchange LLC 

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

the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

the proposed rule change as described 

in Items I, II, and III below, which Items 

have been prepared by the selfregulatory 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 modify 

certain pricing limitations for securities 

listed on the Exchange pursuant to a 

Primary Direct Floor Listing. 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 recently amended 

Chapter One of the Listed Company 

Manual (the ‘‘Manual’’) to modify the 

provisions relating to direct listings to 

permit a primary offering in connection 

with a direct listing and to specify how 

a direct listing qualifies for initial listing 

if it includes both sales of securities by 

the company and possible sales by 

selling shareholders (a ‘‘Primary Direct 

Floor Listing’’).4 The Exchange also 

adopted Rule 7.31(c)(1)(D) defining the 

Issuer Direct Offering (‘‘IDO’’) Order for 

use by a company that wishes to sell its 

shares through a Primary Direct Floor 

Listing and modified Rule 7.35A to 

describe how the IDO Order would 

participate in a Direct Listing Auction, 

establish additional requirements for a 

DMM conducting a Direct Listing 

Auction for a Primary Direct Floor 

Listing, and specify how the Indication 

Reference Price would be determined 

for a security to be opened in a Direct 

Listing.5 Currently, under Rule 

7.35A(g)(2), the DMM will not conduct 

a Direct Listing Auction for a Primary 

Direct Floor Listing if (i) the Auction 

Price would be outside of the price 

range specified by the company in its 

effective registration statement (the 

‘‘Price Range Limitation’’) 6 and (ii) if 

there is insufficient interest to satisfy 

both the IDO Order and all better-priced 

sell orders in full. 

The Exchange now proposes to 

modify the Price Range Limitation to 

provide that a Direct Listing Auction for 

a Primary Direct Floor Listing may be 

conducted if the Auction Price is 

outside of the price range established by 

the company in its effective registration 

statement (the ‘‘Issuer Price Range’’) but 

is either (i) at or above the price that is 

20% below the lowest price or at or 

below the price that is 20% above the 

highest price of the Issuer Price Range 7

or (ii) above the price that is 20% above 

the highest price of the Issuer Price 

Range. The Exchange proposes that a 

Direct Listing Auction for a Primary 

Direct Floor Listing could proceed in 

these circumstances provided that the 

issuer has certified to the Exchange and 

publicly disclosed that: (i) It does not 

expect that the Auction Price would 

materially change the issuer’s previous 

disclosure in its effective registration 

statement; (ii) the price range in the 

preliminary prospectus included in the 

effective registration statement is a bona 

fide price range in accordance with Item 

501(b)(3) of Regulation S–K; and (iii) 

such registration statement contains a 

sensitivity analysis explaining how the 

issuer’s plans would change if the actual 

proceeds from the offering differ from 

the amount assumed in the price range 

established by the issuer in its effective 

registration statement. 

Background 

The Exchange believes that, while 

many companies are interested in 

alternatives to the traditional initial 

public offering (‘‘IPO’’), companies and 

their advisors may be reluctant to use 

the Primary Direct Floor Listing under 

current Exchange rules because of 

concerns about the Price Range 

Limitation. 

One potential benefit of a Primary 

Direct Floor Listing 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, the initial sale price in a 

Primary Direct Floor Listing 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, the Commission noted 

in the Approval Order that: 

[B]ecause the price of securities issued by 

a company in a Primary Direct Floor Listing 

will be determined based on market interest 

and the matching of buy and sell orders, 

Primary Direct Floor Listings will provide an 

alternative way to price securities offerings 

that may better reflect prices in the 

aftermarket, and thus may allow for 

efficiencies in IPO pricing and 


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8See Approval Order, 85 FR at 85816–17 

(footnote omitted). 

9See, e.g., Approval Order, 85 FR at 85816, n. 

113. 

10Securities 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. The 

Exchange proposes to require that companies 

selling shares through a Primary Direct Floor 

Listing will register securities by specifying the 

quantity of shares registered and not a maximum 

offering amount. 

11Sensitivity analysis disclosure may include, 

but is not limited to, use of proceeds; balance sheet 

and capitalization; and the company’s liquidity 

position after the offering. A company could state, 

for example: ‘‘We will apply the net proceeds from 

this offering first to repay all borrowings under our 

credit facility and then, to the extent of any 

proceeds remaining, to general corporate purposes.’’ 

12See Compliance & Disclosure Interpretation of 

Securities Act Rules #227.03 at https://

www.sec.gov/corpfin/securities-act-rules. 

allocation. . . . The opening auction in a 

Primary Direct Floor Listing provides for a 

different price discovery method for IPOs 

which may reduce the spread between IPO 

price and subsequent market trades, a 

potential benefit to existing and potential 

investors.8

A successful IPO of shares requires 

sufficient investor interest. If an offering 

cannot be completed due to lack of 

investor interest, a company is likely to 

receive negative publicity, and the 

offering may be delayed or cancelled. 

The Price Range Limitation—which is 

imposed on a Primary Direct Floor 

Listing but not on an IPO—increases the 

probability of a failed offering because 

it contemplates there also being too 

much investor interest. In other words, 

if investor interest is greater than the 

company and its advisors anticipated, 

an offering would need to be delayed or 

cancelled. 

As the Commission has noted with 

respect to traditional firm commitment 

underwritten offerings, the IPO price, 

which is 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.9

The Exchange believes that the price 

range in a company’s effective 

registration statement for a Primary 

Direct Floor Listing is similarly 

determined by the company and its 

advisors and, therefore, there may be 

instances of offerings where the price 

determined by the Direct Listing 

Auction would exceed the highest price 

of the price range in the company’s 

effective registration statement. 

As described above, under current 

Exchange Rules, the DMM would not 

conduct a Direct Listing Auction for a 

security subject to a Primary Direct 

Floor Listing if the Auction Price 

determined is above the highest price of 

the price range established by the issuer 

in its effective registration statement. In 

this case, the offering would be 

cancelled or postponed until the 

company amends its effective 

registration statement. At a minimum, 

such a delay could expose the company 

to risks associated with changing 

investor sentiment in the event of an 

adverse market event. As a result, the 

Exchange believes that companies may 

be reluctant to use this alternative 

method of going public despite its 

expected potential benefits because of 

the restrictions of the Price Range 

Limitation. 

Proposed Rule Change 

In light of the above, the Exchange 

proposes to modify the Price Range 

Limitation such that a Direct Listing 

Auction for a Primary Direct Floor 

Listing could proceed even if the 

Auction Price is at or above the price 

that is 20% below the lowest price of 

the Issuer Price Range and at or below 

the price that is 20% above the highest 

price of such price range. Specifically, 

the Exchange proposes that the DMM 

could conduct the Direct Listing 

Auction, provided all other necessary 

conditions are satisfied, even if the 

Auction Price is outside of the Issuer 

Price Range, if the Auction Price would 

not be more than 20% below the lowest 

price or more than 20% above the 

highest price of such range and the 

company has, in its effective registration 

statement, specified the quantity of 

shares registered, as permitted by 

Securities Act Rule 457.10 The Exchange 

further proposes that a Direct Listing 

Auction could proceed if the Auction 

Price is a price that is greater than 20% 

above the highest price of the Issuer 

Price Range, provided that all other 

necessary conditions are satisfied, and 

the company has, in its effective 

registration statement, specified the 

quantity of shares registered, as 

permitted by Securities Act Rule 457. 

The Exchange also proposes that the 

20% threshold be calculated based on 

the maximum offering price set forth in 

the registration fee table, consistent with 

the Instruction to paragraph (a) of 

Securities Act Rule 430. 

When the Auction Price is either (i) 

outside of the Issuer Price Range but not 

more than 20% above or below such 

price range, or (ii) greater than 20% 

above the highest price of the Issuer 

Price Range, the Exchange proposes that 

the Direct Listing Auction would not 

proceed unless the company has 

publicly disclosed and certified to the 

Exchange that (i) the company does not 

expect that such offering price would 

materially change the company’s 

previous disclosure in its effective 

registration statement; (ii) the price 

range in the preliminary prospectus 

included in the effective registration 

statement is a bona fide price range in 

accordance with Item 501(b)(3) of 

Regulation S–K; and (iii) the company’s 

registration statement contains a 

sensitivity analysis explaining how the 

company’s plans would change if the 

actual proceeds from the offering differ 

from the amount assumed in the price 

range established by the issuer in its 

effective registration statement.11 In 

such cases, the Exchange also proposes 

to provide the issuer with the 

opportunity to provide any necessary 

additional disclosures that are 

dependent on the price of the offering 

so that any such disclosures would be 

available to investors prior to the 

completion of the offering. Thus, the 

Exchange proposes that a Direct Listing 

Auction for a Primary Direct Floor 

Listing would not take place until the 

issuer confirms to the Exchange that no 

additional disclosures are required 

under federal securities laws based on 

the Auction Price determined by the 

DMM. 

The Exchange believes that the 

additional requirements to permit a 

Direct Listing Auction to take place at 

an Auction Price that is outside of the 

Issuer Price Range (whether it is at or 

within the Primary Direct Floor Listing 

Auction Price Range or above the 

highest price of such price range), as 

proposed, would provide sufficient 

disclosures to allow investors to 

evaluate whether to participate in the 

Direct Listing Auction for a Primary 

Direct Floor Listing, including the 

opportunity to see how changes in share 

price may impact the company’s 

disclosures. 

The Exchange believes that its 

proposal with respect to the Price Range 

Limitation for a Primary Direct Floor 

Listing 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.12

The Exchange believes such guidance 

would also allow for deviation of greater 

than 20% above the highest price of the 

price range in a company’s registration, 

provided that such change would not 

materially change the previous 


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disclosure. Accordingly, the Exchange 

believes that a company listing in 

connection with a Primary Direct Floor 

Listing could specify the quantity of 

shares registered, as permitted by 

Securities Act Rule 457, and, if an 

auction prices outside of the disclosed 

price range, use a Rule 424(b) 

prospectus, rather than a post-effective 

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) 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 disclosures, in each 

case assuming the number of shares 

issued is not increased from the number 

of shares disclosed in the prospectus. 

Given that, as proposed, there may be 

a Primary Direct Floor Listing that could 

price outside of the price range of the 

company’s effective registration 

statement and that there may be no 

upper limit above which the Direct 

Listing Auction could not proceed, the 

Exchange proposes to support price 

discovery transparency by providing 

readily available, real time pricing 

information to investors. Specifically, 

the DMM’s pre-opening indications for 

a security to be opened in a Direct 

Listing Auction for a Primary Direct 

Floor Listing would continue to be 

published via the securities information 

processor (‘‘SIP’’) and proprietary data 

feeds. The Exchange would also make 

the Indication Reference Price available, 

free of charge, on a public website (such 

as www.nyse.com) on the day such 

Auction is anticipated to take place. 

In addition, to protect investors and 

enhance disclosure in connection with 

a Primary Direct Floor Listing, the 

Exchange proposes to adopt certain 

requirements for member organizations 

with respect to Primary Direct Floor 

Listings. Specifically, the Exchange 

proposes to require member 

organizations to provide to a customer, 

before that customer places an order to 

participate in the Direct Listing Auction 

for a Primary Direct Floor Listing, a 

notice describing the mechanics of 

pricing a security subject to a Direct 

Listing Auction for a Primary Direct 

Floor Listing, including information 

regarding the availability of pre-opening 

indications via the SIP and proprietary 

data feeds and the location of the public 

website where the Exchange will 

disseminate information relating to the 

Indication Reference Price. 

The Exchange further proposes to 

distribute, at least one business day 

prior to the commencement of trading of 

a security listing in connection with a 

Primary Direct Floor Listing, a 

regulatory bulletin that describes any 

special characteristics of the offering 

and the Exchange rules that apply to the 

pricing of a Primary Direct Floor Listing. 

The regulatory bulletin would also 

include information about the notice 

that member organizations would be 

required to provide customers, as 

proposed, and remind member 

organizations of their obligations 

pursuant to the Exchange rules that: 

• Require member organizations to 

use reasonable diligence in regard to the 

opening and maintenance of every 

account, to know (and retain) the 

essential facts concerning every 

customer and concerning the authority 

of each person acting on behalf of such 

customer (Rule 2090); and 

• Require member organizations in 

recommending transactions for a 

security subject to a Direct Listing 

Auction for a Primary Direct Floor 

Listing to have a reasonable basis to 

believe that: (i) The recommendation is 

suitable for a customer given reasonable 

inquiry concerning the customer’s 

investment objectives, financial 

situation, needs, and any other 

information known by such member 

organizations, and (ii) the customer can 

evaluate the special characteristics, and 

is able to bear the financial risks, of an 

investment in such security (Rule 2111). 

These member organization 

requirements are intended to remind 

members of their obligations to ‘‘know 

their customers’’ and would also serve 

to increase transparency regarding the 

pricing mechanisms applicable to a 

Primary Direct Floor Listing and help 

provide investors with sufficient price 

discovery information. 

For each Primary Direct Floor Listing, 

the Exchange proposes that its 

regulatory bulletin would also inform 

market participants that the Auction 

Price could be up to 20% below the 

lowest price of the price range in the 

company’s effective registration 

statement and specify what that price is. 

The Exchange’s regulatory bulletin 

would also indicate whether there is a 

price range outside of which the Direct 

Listing Auction for the Primary Direct 

Floor Listing could not proceed, based 

on the company’s certification as 

described above. 

Amendments to the Manual 

Section 102.01B(E) of the Manual 

provides that companies may be listed 

on the Exchange through a Primary 

Direct Floor Listing. More specifically, a 

company that has not previously had its 

common equity securities registered 

under the Act may list its common 

equity securities on the Exchange 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. A Primary 

Direct Listing is any such listing in 

which 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. 

Section 102.01B(E) of the Manual also 

provides that, with respect to a Primary 

Direct Floor Listing, the Exchange will 

deem a company to have met the 

applicable aggregate market value of 

publicly-held shares requirement if the 

company will sell at least $100,000,000 

in market value of shares in the 

Exchange’s opening auction on the first 

day of trading on the Exchange. The 

Manual further provides that, where a 

company is conducting a Primary Direct 

Floor Listing and will sell shares in the 

opening auction with a market value of 

less than $100,000,000, the Exchange 

will determine that such company has 

met its market-value of publicly-held 

shares requirement if the aggregate 

market value of the shares the company 

will sell in the opening auction on the 

first day of trading and the shares that 

are publicly held immediately prior to 

the listing is at least $250,000,000 with 

such market value calculated using a 

price per share equal to the lowest price 

of the price range established by the 

issuer in its registration statement. 

To effect the changes to the Price 

Range Limitation described above and 

facilitate the possibility of a Direct 

Listing Auction for a Primary Direct 

Floor Listing pricing up to 20% below 

the price range disclosed in an issuer’s 

effective registration statement, the 

Exchange proposes to modify Section 

102.01B(E) of the Manual to provide 

that the Exchange would calculate the 

market value of such company’s shares 

using a price per share equal to the 

lowest price of the price range 

established by the issuer in its 

registration statement, minus an amount 

equal to 20% of the highest price 

included in such price range, which 

will be referred to as the ‘‘Primary 

Direct Floor Listing Minimum Price.’’ 

As noted above, the Exchange proposes 

that a company listing its securities on 

the Exchange pursuant to a Primary 

Direct Floor Listing must have specified 

the quantity of shares registered, as 

permitted by Securities Act Rule 457, in 

its effective registration statement. 

Accordingly, the Exchange further 


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proposes to amend Section 102.01B(E) 

to include this requirement. 

Amendments To Exchange Rules 

To implement the changes to the Price 

Range Limitation described above, the 

Exchange also proposes the following 

changes to Rules 7.31 and 7.35A. 

Proposed Changes to Rule 7.31 

The Exchange proposes to modify 

Rule 7.31(c)(1)(D), which defines the 

IDO Order. Rule 7.31(c)(1)(D) currently 

provides that an IDO Order is a Limit 

Order to sell that is to be traded only in 

a Direct Listing Auction for a Primary 

Direct Floor Listing, and Rule 

7.31(c)(1)(D)(ii) currently provides that 

the limit price of an IDO Order must be 

equal to the lowest price of the price 

range established by the issuer in its 

effective registration statement. The 

Exchange proposes to modify Rule 

7.31(c)(1)(D)(ii) to provide that the limit 

price of an IDO Order would be equal 

to the lowest price of the ‘‘Primary 

Direct Floor Listing Auction Price 

Range’’ and to redefine the ‘‘Primary 

Direct Floor Listing Auction Price 

Range’’ as 20% below the lowest price 

and 20% above the highest price of the 

price range established by the issuer in 

its effective registration statement. The 

Exchange also proposes to define 

‘‘Issuer Price Range’’ as the price range 

established by the issuer in its effective 

registration statement. Thus, Rule 

7.31(c)(1)(D)(ii), as modified, would 

facilitate the proposed changes to the 

Price Range Limitation by providing 

that the limit price of an IDO Order 

would be equal to the price that is 20% 

below the lowest price of the Issuer 

Price Range. 

The Exchange further proposes to 

specify in Rule 7.31(c)(D)(ii) that, for 

purposes of determining the Primary 

Direct Floor Listing Price Range, the 

20% threshold would be calculated 

based on the maximum offering price 

set forth in the registration fee table, 

consistent with the Instruction to 

paragraph (a) of Securities Act Rule 

430A. 

Proposed Changes to Rule 7.35A 

Rule 7.35A sets forth rules pertaining 

to Core Open Auctions and Trading Halt 

Auctions facilitated by a DMM. Rule 

7.35A(d) sets forth Exchange rules 

relating to pre-opening indications 

published by a DMM in connection with 

a DMM-facilitated auction. This Rule 

currently provides that a pre-opening 

indication will include the security and 

the price range within which the 

Auction Price is anticipated to occur 

and that a pre-opening indication— 

including for a Direct Listing Auction 

for a Primary Direct Floor Listing—will 

be published via the securities 

information processor and proprietary 

data feeds. 

Rule 7.35A(d)(2)(A) and the 

subparagraphs thereunder describe the 

Indication Reference Price for a security 

to be opened in a DMM-facilitated 

auction. The Exchange proposes to 

amend Rule 7.35A(d)(2)(A)(v), which 

currently provides that, for a security 

that is a Primary Direct Floor Listing, 

the Indication Reference Price will be 

the lowest price of the Primary Direct 

Floor Listing Auction Price Range. To 

effect the proposed requirement 

described above that the Exchange 

disseminate the Indication Reference 

Price on a public website, the Exchange 

proposes to add this requirement to 

Rule 7.35A(d)(2)(A)(v). The Exchange 

also notes that, based on the proposed 

revision to the definition of Primary 

Direct Floor Listing Auction Price Range 

in Rule 7.31(c)(1)(D)(ii), the Indication 

Reference Price for a Primary Direct 

Floor Listing would be the price that is 

20% below the lowest price of the Issuer 

Price Range, consistent with the 

proposed changes to the Price Range 

Limitation described above. 

Next, the Exchange proposes to 

modify Rule 7.35A(g)(2), which 

specifies the circumstances under 

which a DMM may not conduct a Direct 

Listing Auction for a Primary Direct 

Floor Listing. Structurally, the Exchange 

proposes to amend Rule 7.35A(g)(2) 

such that the rule would specify 

requirements for a Direct Listing 

Auction for a Primary Direct Floor 

Listing to proceed, rather than 

specifying circumstances under which a 

DMM would not conduct a Direct 

Listing Auction for a Primary Direct 

Floor Listing. 

Rule 7.35A(g)(2)(A) currently 

provides that the DMM will not conduct 

a Direct Listing Auction for a Primary 

Direct Floor Listing if the Auction Price 

would be below the lowest price or 

above the highest price of the Primary 

Direct Floor Listing Auction Price 

Range. The Exchange proposes to 

modify this rule to specify that the 

Auction Price for a Direct Listing 

Auction for a Primary Direct Floor 

Listing may not be lower than the 

lowest price of the Primary Direct Floor 

Listing Auction Price Range. The 

Exchange notes that, based on the 

proposed revision to the definition of 

Primary Direct Floor Listing Auction 

Price Range in Rule 7.31(c)(1)(D)(ii), 

Rule 7.35A(g)(2)(A) would thus provide 

that the Auction Price for a Direct 

Listing Auction for a Primary Direct 

Listing would not be more than 20% 

below the lowest price of the Issuer 

Price Range, consistent with the 

proposed changes to the Price Range 

Limitation outlined above. 

To effect the proposed changes 

described above that would permit the 

DMM to conduct a Direct Listing 

Auction for a Primary Direct Floor 

Listing when the Auction Price is either 

(i) at or within the Primary Direct Floor 

Listing Price Range but outside of the 

Issuer Price Range, or (ii) above the 

highest price of the Primary Direct Floor 

Listing Auction Price Range, the 

Exchange proposes to amend Rule 

7.35A(g)(2)(B) to provide that the Direct 

Listing Auction could proceed in such 

circumstances if the issuer has 

previously certified to the Exchange and 

publicly disclosed that: 

• The issuer does not expect that the 

Auction Price would materially change 

its previous disclosure in its effective 

registration statement (proposed Rule 

7.35A(g)(2)(B)(i)(a)); 

• The price range in the preliminary 

prospectus included in the effective 

registration statement is a bona fide 

price range in accordance with Item 

501(b)(3) of Regulation S–K (proposed 

Rule 7.35A(g)(2)(B)(i)(b)); and 

• The registration statement contains 

a sensitivity analysis explaining how 

the issuer’s plans would change if the 

actual proceeds from the offering differ 

from the amount assumed in the price 

range established by the issuer in its 

effective registration statement 

(proposed Rule 7.35A(g)(2)(B)(i)(c)). 

Proposed Rule 7.35A(g)(2)(B)(ii) 

would further provide that, when the 

Auction Price determined by the DMM 

is at or within the Primary Direct Floor 

Listing Auction Price Range but outside 

of the Issuer Price Range or is above the 

highest price of the Primary Direct Floor 

Listing Auction Price Range, the issuer 

would be required to confirm to the 

Exchange that no additional disclosures 

are required under the federal securities 

laws based on such price. This proposed 

change would permit issuers to comply 

with their disclosure obligations under 

federal securities laws and provide 

investors with access to the requisite 

disclosures before the offering would 

proceed, as detailed above. Upon 

receiving confirmation from the issuer 

that any such obligations have been met, 

the Exchange would relay that 

information to the DMM to proceed 

with the Direct Listing Auction. 

Finally, the Exchange proposes to add 

new subparagraph (C) under Rule 

7.35A(g)(2). Proposed Rule 

7.35A(g)(2)(C)(i) would reflect the 

requirement set forth in current Rule 

7.35A(g)(2)(B) that the DMM may not 

conduct a Direct Listing Auction for a 

Primary Direct Floor Listing if there is 


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

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

15See Compliance & Disclosure Interpretation of 

Securities Act Rules #227.03, supra note 12. The 

Exchange also notes that, in a recent speech, SEC 

Chair Gary Gensler emphasized that an overarching 

principle of regulation is that like activities ought 

to be treated alike. See https://www.sec.gov/news/ 

speech/gensler-healthy-markets-association

conference-120921 (‘‘Gensler Speech’’). 

insufficient buy interest to satisfy both 

the IDO Order and all better-priced sell 

orders in full. The Exchange does not 

propose to change this requirement, 

other than adding clarifying text to 

specify that such orders would be 

satisfied at the Auction Price. 

Proposed Rule 7.35A(g)(2)(C)(ii) 

would set forth an additional 

requirement that must be satisfied 

before the DMM could conduct a Direct 

Listing Auction for a Primary Direct 

Floor Listing. This proposed change 

would reflect the proposed 

requirements described above regarding 

the regulatory bulletin to be distributed 

by the Exchange. Proposed Rule 

7.35A(g)(2)(C)(ii) would provide that the 

DMM would not proceed with a Direct 

Listing Auction for a Primary Direct 

Floor Listing until it has been notified 

by the Exchange that the additional 

conditions set forth in new Commentary 

.20 to Rule 7.35A have been satisfied. 

Proposed Commentary .20 to Rule 7.35A 

would provide that the Direct Listing 

Auction for a Primary Direct Floor 

Listing for a security may not be 

conducted until the Exchange has 

notified the DMM that, at least one 

business day prior to the 

commencement of trading in such 

security, the Exchange has distributed a 

regulatory bulletin describing any 

special characteristics of the offering 

and the Exchange rules that apply to the 

pricing of the Primary Direct Floor 

Listing; the obligations of member 

organizations pursuant to Exchange 

Rules 2090 and 2111; and the 

requirement that a member organization 

provide its customers with a notice with 

information regarding the Direct Listing 

Auction for a Primary Direct Floor 

Listing. This proposed change would (i) 

facilitate the requirements described 

above to provide member organizations 

with sufficient information so that they 

may in turn inform their customers, (ii) 

remind member organizations of their 

obligations to ‘‘know their customers,’’ 

(iii) increase transparency around the 

pricing mechanisms of a Primary Direct 

Floor Listing, and (iv) help provide 

investors with sufficient price discovery 

information. 

Proposed Rule 7.35A(g)(2)(C)(iii) 

would provide that the DMM would not 

conduct a Direct Listing Auction for a 

Primary Direct Floor Listing if the 

Auction Price is outside of the Issuer 

Price Range and the issuer has not 

satisfied the conditions set forth in 

proposed Rules 7.35A(g)(2)(B)(i) and 

(ii). The Exchange proposes this rule to 

reinforce that a Direct Listing Auction 

for a Primary Direct Floor Listing could 

not proceed in these circumstances 

unless the issuer has made the requisite 

disclosures described in proposed Rule 

7.35A(g)(2)(B). 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Exchange Act,13 in 

general, and furthers the objectives of 

Section 6(b)(5) of the Exchange Act,14 in 

particular, in that it is designed to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, 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 is not designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange believes that the 

proposed modification of the Price 

Range Limitation would promote just 

and equitable principles of trade, 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and 

protect investors and the public interest 

because the proposed approach is 

similar to the pricing of an IPO, where 

the issuer is permitted to price outside 

of the price range disclosed in its 

effective registration statement in 

accordance with the SEC Staff’s 

guidance, as described above.15

Specifically, the Exchange believes that 

it is reasonable to permit the Direct 

Listing Auction for a Primary Direct 

Floor Listing to proceed if the Auction 

Price is at or within the Primary Direct 

Floor Listing Auction Price Range—that 

is, as low as 20% below the lowest price 

of the Issuer Price Range or as high as 

20% above the highest price of such 

price range—because a company listing 

in connection with a Primary Direct 

Floor Listing could specify the quantity 

of shares registered, as permitted by 

Securities Act Rule 457, and, when the 

Auction Price is outside of the disclosed 

price range, use a Rule 424(b) 

prospectus, rather than a post-effective 

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) there is a 

deviation above the price range beyond 

the 20% 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. 

In addition, in the event that the 

Auction Price is within the Primary 

Direct Floor Listing Auction Price Range 

but outside of the Issuer Price Range or 

is higher than the highest price of the 

Primary Direct Floor Listing Auction 

Price Range (i.e., above the price that is 

20% above the highest price of the 

Issuer Price Range), the Exchange 

proposes that the Direct Listing Auction 

for a Primary Direct Floor Listing could 

still proceed, but would not be 

conducted until the issuer has met 

disclosure requirements that would help 

provide investors with additional 

information regarding the offering, 

including a requirement that the issuer’s 

effective registration statement contain a 

sensitivity analysis explaining how the 

issuer’s plans would change if the actual 

proceeds from the Primary Direct Floor 

Listing are lower or higher than the 

amount assumed by the price range set 

forth in the registration statement. The 

Exchange also proposes to require that 

an issuer must have confirmed to the 

Exchange that no additional disclosures 

are required under the federal securities 

laws based on the Auction Price 

determined. The issuer would thus have 

the opportunity to provide any 

necessary additional disclosures that are 

dependent on the price of the offering 

prior to the completion of the offering. 

Accordingly, the Exchange believes that 

this proposed change is designed to 

promote just and equitable principles of 

trade and to remove impediments to and 

perfect the mechanism of a free and 

open market because it would allow an 

offering to proceed under certain 

circumstances when the Auction Price 

is outside of the Issuer Price Range— 

including where investor interest is 

greater than the company and its 

advisors anticipated (thereby promoting 

capital formation)—while protecting 

investors by requiring that a company 

listing shares through a Primary Direct 

Floor Listing make applicable 

disclosures under the federal securities 

laws. 

The Exchange also believes that the 

proposed change is designed to promote 

investor protection because the 

Exchange would support price 

discovery transparency by providing 

readily available, real time pricing 

information to investors by 


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16The Exchange believes that it would be 

appropriate to permit Market Orders and MOO 

Orders (as defined in Rules 7.31(a)(1) and 

7.31(c)(1)(B)) to participate in a Direct Listing 

Auction for a Primary Direct Floor Listing, given the 

safeguards provided by the pre-opening indication 

process. Although Market Orders and MOO Orders 

are unpriced orders, the Exchange believes that 

Market Orders and MOO Orders that participate in 

a Direct Listing Auction for a Primary Direct Listing 

would not be subject to extreme price volatility due 

to the DMM’s role in refining pre-opening 

indications and determining the Auction Price, as 

well as the DMM’s obligation under Rule 7.35A(g) 

to fill all better-priced interest. Moreover, investors 

submitting Market Orders and MOO Orders would 

have the benefit of readily available, real time 

pricing information to inform their decision to 

participate in the Auction. The Exchange also notes 

that data from IPOs (which are not subject to the 

Price Range Limitation) that took place in the last 

six calendar months indicates that MOOs made up 

a significant portion of opening auction volume and 

thus believes that allowing MOOs to participate in 

a Direct Listing Auction for a Primary Direct Floor 

Listing could encourage investor participation. 

17See Compliance & Disclosure Interpretation of 

Securities Act Rules #227.03, supra note 12. 18See Gensler Speech, supra note 15. 

disseminating pre-opening indications 

via the SIP and proprietary data feeds 

and publishing the Indication Reference 

Price on a public website on the day on 

which the Direct Listing Auction for a 

Primary Direct Floor Listing is 

anticipated to take place. Market 

participants would thus have ready 

access to up-to-date pricing information 

leading up to a Direct Listing Auction 

for a Primary Direct Floor Listing. 

In particular, the Exchange believes 

that making pre-opening indications 

readily available to market participants 

would provide price transparency to the 

market in connection with Primary 

Direct Floor Listings. Pre-opening 

indications, which are based on the 

DMM’s assessment of interest eligible to 

participate in the Direct Listing Auction 

for a Primary Direct Floor Listing, 

would provide notice of when price 

volatility has subsided and price 

equilibrium has been met with respect 

to the orders that wish to participate in 

such Auction. In addition, Exchange 

rules establishing pre-opening 

indication procedures already include 

requirements such as that set forth in 

Rule 7.35A(d)(4)(D), which provides 

that the DMM must wait for certain 

minimum specified periods after 

publishing a pre-opening indication and 

before opening a security. As the table 

below shows, the DMMs in the Selling 

Shareholder Direct Floor Listings that 

took place in 2020 and 2021 indicated 

very tight and reliable anticipated 

opening price ranges irrespective of the 

amount of time between the last 

indication and opening auction: 

Date of direct listing auction Symbol Last pre-opening indication Auction price Time elapsed between last pre-opening indication and auction 

open 

9/30/2020 .................................. PLTR 9.95–10.05 10 10 minutes, 19 seconds. 

9/30/2020 .................................. ASAN 26.75–27 27 2 minutes, 24 seconds. 

3/10/2021 .................................. RBLX 64.25–64.75 64.5 3 minutes, 2 seconds. 

5/19/2021 .................................. SQSP 47.5–48 48 2 minutes, 31 seconds. 

5/26/2021 .................................. ZIP 19.75–20.25 20 16 minutes, 29 seconds. 

9/29/2021 .................................. WRBY 54–54.5 54.05 12 minutes, 31 seconds. 

The Exchange thus believes that its 

existing pre-opening indication process 

provides significant investor protection 

measures based on the judgment 

applied by the DMM in refining the 

anticipated price range of a security to 

be opened in a Direct Listing Auction as 

appropriate and in determining that the 

price has reached stability, such that the 

Direct Listing Auction should 

proceed.16

The Exchange believes that its 

proposal to issue a regulatory bulletin as 

outlined above would promote just and 

equitable principles of trade, remove 

impediments to and perfect the 

mechanism of a free and open market, 

and promote investor protection 

because it would provide member 

organizations with the necessary 

information to share with their 

customers regarding the Primary Direct 

Floor Listing. Specifically, the proposed 

regulatory bulletin would be distributed 

at least one business day prior to the 

commencement of trading in a security 

to be listed in connection with a Direct 

Listing Auction for a Primary Direct 

Floor Listing and would describe any 

special characteristics of the offering, as 

well as the Exchange Rules that apply 

to the pricing of a Direct Listing Auction 

for a Primary Direct Floor Listing. The 

regulatory bulletin would inform 

prospective participants in the Direct 

Listing Auction that the Auction Price 

could be up to 20% below the lowest 

price of the Issuer Price Range (and 

specify what that price is) and indicate 

whether there is a price range outside of 

which the Direct Listing Auction for a 

Primary Direct Floor Listing could not 

proceed based on the company’s 

certification as described above. The 

Exchange also believes that the 

regulatory bulletin would further the 

protection of investors by reminding 

member organizations of their 

obligations pursuant to Exchange Rules 

2090 and 2111 to ‘‘know their 

customers,’’ providing member 

organizations and their customers with 

information regarding the pricing 

mechanism of a Direct Listing Auction 

for a Primary Direct Floor Listing, and 

helping investors receive sufficient 

price discovery information. 

The Staff of the Commission in a 

Compliance and Disclosure 

Interpretation has indicated that pricing 

up to 20% below the lowest price and 

at a price above the highest price of the 

price range set forth in the company’s 

effective registration statement is 

appropriate for a company conducting 

an IPO, notwithstanding that the price 

would be outside of the range stated in 

the company’s effective registration. The 

Exchange believes that investors have 

become familiar with this approach at 

least since the Staff last revised 

Compliance and Disclosure 

Interpretation 227.03 in January 2009.17

Accordingly, the Exchange believes that 

allowing Direct Listing Auctions in 

connection with a Primary Direct Floor 

Listing to similarly price up to 20% 

below the lowest price and at a price 

above the highest price of the price 

range in the company’s effective 

registration statement would be 

consistent with both Chair Gensler’s 

recent call to treat ‘‘like cases alike’’ 18

and the protection of investors. 

The Exchange also believes that the 

proposed changes to the Manual are 

consistent with the protection of 

investors. Specifically, the proposed 

change to Section 102.01B(E) to specify 

that a company offering securities for 

sale in connection with a Primary Direct 

Floor Listing must register securities by 

specifying the quantity of shares 

registered, as permitted by Securities 

Act Rule 457(a), would promote 

investor protection because it would 

provide certainty regarding the number 

of shares available in connection with 

the Primary Direct Floor Listing, even if 

the Auction Price of such shares may be 

outside of the price range specified in 

the issuer’s effective registration 

statement. The Exchange also believes 

that the proposed change to Section 


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23306 Federal Register / Vol. 87, No. 75 / Tuesday, April 19, 2022 / Notices 

19 17 CFR 200.30–3(a)(12). 

102.01B(E) to reflect that the market 

value calculation of a company’s shares 

would be based on a price per share 

equal to the lowest price of the price 

range established by the issuer in its 

registration statement, less an amount 

equal to 20% of the highest price 

included in such price range, is 

consistent with the protection of 

investors because it would not modify 

any other applicable listing 

requirements and would update the 

Manual to align with the proposed 

changes to the Price Range Limitation 

described herein. 

Finally, the Exchange believes that its 

proposed changes with respect to the 

Price Range Limitation would remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system because 

they would not change the existing 

process for a DMM-facilitated Direct 

Listing Auction for a Primary Direct 

Floor Listing, but would eliminate a 

potential impediment to companies 

considering a Primary Direct Floor 

Listing, thereby encouraging capital 

formation. In addition, the proposed 

changes are designed to protect 

investors and the public interest 

because they would provide an 

expanded opportunity for a Primary 

Direct Floor Listing to proceed so that 

the issuer’s securities can be listed and 

begin trading on the secondary market. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change would impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Rather, the 

proposed change would increase 

competition by continuing to facilitate 

new pathways for companies to access 

the public markets. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

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 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 self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

the 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– 

NYSE–2022–14 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–NYSE–2022–14. 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–NYSE–2022–14, and 

should be submitted on or before May 

10, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–08281 Filed 4–18–22; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

[Public Notice: 11716] 

Biennial Review Under the United 

States-Singapore Memorandum of 

Intent on Environmental Cooperation 

ACTION: Notice of a biennial review 

under the Memorandum of Intent 

between the United States of America 

and the Republic of Singapore on 

Cooperation in Environmental Matters, 

and request for comments. 

SUMMARY: The U.S. Department of State 

is providing notice that the United 

States and Singapore intend to hold a 

biennial review under the Memorandum 

of Intent between the United States of 

America and the Republic of Singapore 

on Cooperation in Environmental 

Matters (MOI) on April 21, 2022. The 

purpose of the meeting is to review the 

results of environmental cooperation 

under the MOI guided by the 2020–2021 

Plan of Action (POA). The United States 

and Singapore also expect to approve a 

new 2022–2023 POA. The meeting’s 

public session will be held on April 21, 

2022, at 9:15 p.m. via teleconference. 

The U.S. Department of State invites 

interested organizations and members of 

the public to attend the virtual public 

session, and to submit in advance 

written comments or suggestions 

regarding implementation of the POA, 

and any issues that should be discussed 

at the meeting. If you would like to 

attend the virtual public session, please 

notify Brian Bedell at the email address 

listed below under the heading 

ADDRESSES. Specific sign-in instructions 

will be provided several days in 

advance of the virtual public session to 

those who request to attend. Please 

include your full name and any 

organization or group you represent. In 

preparing comments, submitters are 

encouraged to refer to: 

• 2020–2021 POA, https://2017- 

2021.state.gov/remarks-and-releasesbureau-of-oceans-and-internationalenvironmental-and-scientific-affairs/ 

2020-2021-plan-of-action-forenvironmental-cooperation-under-theunited-states-singapore-memorandumof-intent-on-environmental-cooperation/ 

index.html. 


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