Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 40183 

13 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 Securities Exchange Act Release No. 809333 

(June 15, 2017), 82 FR 28200 (June 20, 

2017)(‘‘Notice’’). 

5See letter from James J. Angel, Associate 

Professor of Finance, Georgetown University, dated 

July 28, 2017. 

6See Securities Exchange Act Release No. 81309 

(August 3, 2017), 82 FR 37244 (August 9, 2017). 

7The Exchange filed Amendment No. 1 to the 

proposed rule change on July 28, 2017 and 

withdrew Amendment No. 1 on August 16, 2017. 

8 In Amendment No. 2, the Exchange, among 

other things, provides that a Designated Market 

Maker (‘‘DMM’’) can only use a trading price in a 

private placement market as a reference price and 

to facilitate a fair and orderly opening on the first 

day of trading in a security being listed under 

proposed Footnote (E) to Section 102.01(B) of the 

NYSE’s Listed Company Manual (‘‘non-IPO new 

listing’’) if the private placement market has had 

recent sustained history of trading prior to listing. 

If there is no recent sustained history of trading 

prior to listing in the private placement market, the 

proposal states that the DMM will consult with a 

financial advisor to the issuer of the security to 

establish a reference price pursuant to Exchange 

Rule 15 and facilitate a fair and orderly opening 

pursuant to Exchange Rule 104. Amendment No. 2, 

also amended the proposal to delete the proposed 

regulatory halt provision for an initial public 

offering so that the proposed new regulatory halt 

authority is only applicable to a security that is the 

subject of a non-IPO new listing. Amendment No 

2 also adds language to make clear that the 

regulatory halt authority for a non-IPO new listing 

will be terminated when the DMM opens the 

security for trading. The proposed new regulatory 

halt will, therefore, only apply during the preopening period on the first day of trading on the 

Exchange in a non-IPO new listing. 

9The Exchange has previously filed this proposal 

as SR–NYSE–2017–30. See Securities Exchange Act 

Release No. 80933 (June 15, 2017), 82 FR 28200 

(June 20, 2017) (SR–NYSE–2017–30). This 

Amendment No. 2 replaces and supersedes the 

original filing of SR–NYSE–2017–30 in its entirety. 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal office of 

FINRA. All comments received will be 

posted without change; the Commission 

does not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–FINRA–2017–027 and 

should be submitted on or before 

September 14, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2017–17910 Filed 8–23–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81440; File No. SR–NYSE– 

2017–30] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Amendment No. 2 to 

Proposed Rule Change To Amend 

Section 102.01B of the NYSE Listed 

Company Manual To Provide for the 

Listing of Companies That List Without 

a Prior Exchange Act Registration and 

That Are Not Listing in Connection 

With an Underwritten Initial Public 

Offering and Related Changes to Rules 

15, 104, and 123D 

August 18, 2017. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that, on June 13, 

2017, New York Stock Exchange LLC 

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

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. The proposed rule change 

was published for comment in the 

Federal Register on June 20, 2017.4 The 

Commission received one comment on 

the proposed rule change.5 On August 3, 

2017, the Commission extended the 

time period within which to approve 

the proposed rule change, disapprove 

the proposed rule change, or institute 

proceedings to determine whether to 

approve or disapprove the proposed 

rule change to September 18, 2017.6

The Exchange filed Amendment No. 2 

to the proposed rule change on August 

16, 2017, which amended and replaced 

the proposed rule change.7 The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change, as modified by Amendment No. 

2, from interested persons.8

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend: (i) 

Footnote (E) to Section 102.01B of the 

NYSE Listed Company Manual (the 

‘‘Manual’’) to modify the provisions 

relating to the qualification of 

companies listing without a prior 

Exchange Act registration; (ii) Rule 15 to 

add a Reference Price for when a 

security is listed under Footnote (E) to 

Section 102.01B; (iii) Rule 104 to 

specify DMM requirements when a 

security is listed under Footnote (E) to 

Section 102.01B and there has been no 

trading in the private market for such 

security; and (iv) Rule 123D to specify 

that the Exchange may declare a 

regulatory halt in a security that is the 

subject of an initial listing on the 

Exchange. The proposed rule change is 

available on the Exchange’s Web site 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: (i) 

Footnote (E) to Section 102.01B of the 

Manual to modify the provisions 

relating to the qualification of 

companies listing without a prior 

Exchange Act registration; (ii) Rule 15 to 

add a Reference Price for when a 

security is listed under Footnote (E) to 

Section 102.01B; (iii) Rule 104 to 

specify DMM requirements when a 

security is listed under Footnote (E) to 

Section 102.10B and there has been no 

trading in the private market for such 

security; and (iv) Rule 123D to specify 

that the Exchange may declare a 

regulatory halt in a security that is the 

subject of an initial listing on the 

Exchange.9

Amendments to Footnote (E) to Section 

102.01B 

Generally, the Exchange expects to 

list companies in connection with a firm 

commitment underwritten initial public 

offering (‘‘IPO’’), upon transfer from 

another market, or pursuant to a spinoff. Companies listing in connection 

with an IPO must demonstrate that they 

have $40 million in market value of 


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40184 Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 

10Shares held by directors, officers, or their 

immediate families and other concentrated holdings 

of 10 percent or more are excluded in calculating 

the number of publicly-held shares. 

publicly-held shares,10 while companies 

that are listing upon transfer from 

another exchange or the over-the 

counter market or pursuant to a spin-off 

must demonstrate that they have $100 

million in market value of publicly-held 

shares. 

Section 102.01B currently contains a 

provision under which the Exchange 

recognizes that some companies that 

have not previously had their common 

equity securities registered under the 

Exchange Act, but which have sold 

common equity securities in a private 

placement, may wish to list their 

common equity securities on the 

Exchange at the time of effectiveness of 

a registration statement filed solely for 

the purpose of allowing existing 

shareholders to sell their shares. 

Footnote (E) to Section 102.01B 

provides that the Exchange will, on a 

case by case basis, exercise discretion to 

list such companies. In exercising this 

discretion, Footnote (E) provides that 

the Exchange will determine that such 

company has met the $100 million 

aggregate market value of publicly-held 

shares requirement based on a 

combination of both (i) an independent 

third-party valuation (a ‘‘Valuation’’) of 

the company and (ii) the most recent 

trading price for the company’s common 

stock in a trading system for 

unregistered securities operated by a 

national securities exchange or a 

registered broker-dealer (a ‘‘Private 

Placement Market’’). The Exchange will 

attribute a market value of publicly-held 

shares to the company equal to the 

lesser of (i) the value calculable based 

on the Valuation and (ii) the value 

calculable based on the most recent 

trading price in a Private Placement 

Market. 

Any Valuation used for purposes of 

Footnote (E) must be provided by an 

entity that has significant experience 

and demonstrable competence in the 

provision of such valuations. The 

Valuation must be of a recent date as of 

the time of the approval of the company 

for listing and the evaluator must have 

considered, among other factors, the 

annual financial statements required to 

be included in the registration 

statement, along with financial 

statements for any completed fiscal 

quarters subsequent to the end of the 

last year of audited financials included 

in the registration statement. The 

Exchange will consider any market 

factors or factors particular to the listing 

applicant that would cause concern that 

the value of the company had 

diminished since the date of the 

Valuation and will continue to monitor 

the company and the appropriateness of 

relying on the Valuation up to the time 

of listing. In particular, the Exchange 

will examine the trading price trends for 

the stock in the Private Placement 

Market over a period of several months 

prior to listing and will only rely on a 

Private Placement Market price if it is 

consistent with a sustained history over 

that several month period evidencing a 

market value in excess of the Exchange’s 

market value requirement. The 

Exchange may withdraw its approval of 

the listing at any time prior to the listing 

date if it believes that the Valuation no 

longer accurately reflects the company’s 

likely market value. 

While Footnote (E) to Section 102.01B 

provides for a company listing upon 

effectiveness of a selling shareholder 

registration statement, it does not make 

any provision for a company listing in 

connection with the effectiveness of an 

Exchange Act registration statement in 

the absence of an IPO or other Securities 

Act registration. A company is able to 

become an Exchange Act registrant 

without a concurrent public offering by 

filing a Form 10 (or, in the case of a 

foreign private issuer, a Form 20–F) 

with the SEC. The Exchange believes 

that it is appropriate to list companies 

that wish to list immediately upon 

effectiveness of an Exchange Act 

registration statement without a 

concurrent Securities Act registration 

provided the applicable company meets 

all other listing requirements. 

Consequently, the Exchange proposes to 

amend Footnote (E) to Section 102.01B 

to explicitly provide that it applies to 

companies listing upon effectiveness of 

an Exchange Act registration statement 

without a concurrent Securities Act 

registration as well as to companies 

listing upon effectiveness of a selling 

shareholder registration statement. 

The Exchange notes that the 

requirement of Footnote (E) that the 

Exchange should rely on recent Private 

Placement Market trading in addition to 

a Valuation may cause difficulties for 

certain companies that are otherwise 

clearly qualified for listing. Some 

companies that are clearly large enough 

to be suitable for listing on the Exchange 

do not have their securities traded at all 

on a Private Placement Market prior to 

going public. In other cases, the Private 

Placement Market trading is too limited 

to provide a reasonable basis for 

reaching conclusions about a company’s 

qualification. Consequently, the 

Exchange proposes to amend Footnote 

(E) to provide an exception to the 

Private Placement Market trading 

requirement for companies with respect 

to which there is a recent Valuation 

available indicating at least $250 

million in market value of publicly-held 

shares. Adopting a requirement that the 

Valuation must be at least two-and-ahalf times the $100 million requirement 

will give a significant degree of comfort 

that the market value of the company’s 

shares will meet the standard upon 

commencement of trading on the 

Exchange. The Exchange notes that it is 

unlikely that any Valuation would reach 

a conclusion that was incorrect to the 

degree necessary for a company using 

this provision to fail to meet the $100 

million requirement upon listing, in 

particular because any Valuation used 

for this purpose must be provided by an 

entity that has significant experience 

and demonstrable competence in the 

provision of such valuations. 

The Exchange proposes to further 

amend Footnote (E) by providing that a 

valuation agent will not be deemed to be 

independent if: 

• At the time it provides such 

valuation, the valuation agent or any 

affiliated person or persons beneficially 

own in the aggregate as of the date of the 

valuation, more than 5% of the class of 

securities to be listed, including any 

right to receive any such securities 

exercisable within 60 days. 

• The valuation agent or any affiliated 

entity has provided any investment 

banking services to the listing applicant 

within the 12 months preceding the date 

of the valuation. For purposes of this 

provision, ‘‘investment banking 

services’’ includes, without limitation, 

acting as an underwriter in an offering 

for the issuer; acting as a financial 

adviser in a merger or acquisition; 

providing venture capital, equity lines 

of credit, PIPEs (private investment, 

public equity transactions), or similar 

investments; serving as placement agent 

for the issuer; or acting as a member of 

a selling group in a securities 

underwriting. 

• The valuation agent or any affiliated 

entity has been engaged to provide 

investment banking services to the 

listing applicant in connection with the 

proposed listing or any related 

financings or other related transactions. 

The Exchange believes that this 

proposed new requirement will provide 

a significant additional guarantee of the 

independence of any entity providing a 

Valuation for purposes of Footnote (E). 

The proposed amendments would 

enable the Exchange to compete for 

listings of companies that the Exchange 

believes would be able to list on the 

Nasdaq Stock Market (‘‘Nasdaq’’) but 

would not be able to list on the NYSE 

under its current rules. Nasdaq’s initial 


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11Rules 15, 115A, and 123D specify the 

procedures for opening securities on the Exchange. 

12Nasdaq operates an automated IPO opening 

process, which is described in Nasdaq Rule 

4120(c)(8). In contrast to the NYSE, which has 

DMMs to facilitate the opening of trading, for an 

IPO, Nasdaq requires that the underwriter of the 

IPO perform specified functions, including (i) 

notifying Nasdaq that the security is ready to trade; 

(ii) determining whether an IPO should be 

postponed; and (iii) selecting price bands for 

purposes of applying Nasdaq’s automated price 

validation test. Nasdaq Rule 4120(c)(9) requires that 

if a new listing does not have an underwriter, the 

issuer must have a financial advisor willing to 

perform the above-described functions. The 

functions that the underwriter/financial advisor 

performs on Nasdaq as described in Rule 4120(c)(8) 

are not applicable to the Exchange. The Exchange 

opening process does not have a concept of ‘‘price 

bands’’ because, as described in Rule 115A, market 

orders and limit orders priced better than the 

opening price are guaranteed to participate in the 

IPO opening. In addition, because the Exchange 

does not conduct an automated opening process, 

the DMM functions as an independent financial 

expert responsible for facilitating the opening of 

trading to ensure a fair and orderly opening. 

listing rules do not explicitly address 

how Nasdaq determines compliance 

with its initial listing market 

capitalization requirements by private 

companies seeking to list upon 

effectiveness of a selling shareholder 

registration statement or Exchange Act 

registration without a concurrent 

underwritten public offering. However, 

over an extended period of time Nasdaq 

has listed a number of previously 

private companies in conjunction with 

the effectiveness of a selling shareholder 

registration statement without an 

underwritten offering. In light of this 

precedent and the absence of any 

Nasdaq rule provision explicitly 

limiting the ability of a company to 

qualify for listing without a public 

offering or prior public market price, the 

Exchange believes that Nasdaq would 

take the position that it could also list 

a previously private company upon 

effectiveness of an Exchange Act 

registration statement without a 

concurrent public offering. Therefore, 

the Exchange believes that its proposed 

amendment would permit it to compete 

on equal terms with Nasdaq for the 

listing of companies seeking to list in 

either of these circumstances. 

The Exchange believes that it is 

important to have a transparent and 

consistent approach to determining 

compliance with applicable market 

capitalization requirements by 

previously private companies seeking to 

list without a public offering and that 

Footnote (E) to Section 102.01B as 

amended would provide such a 

mechanism. In the absence of the 

proposed amendments, companies 

listing upon effectiveness of an 

Exchange Act registration statement 

would have no means of listing on the 

NYSE, while the Exchange believes that 

Nasdaq would interpret its own rules as 

enabling it to list a company under 

those circumstances. As such, the 

proposed amendment would address a 

significant competitive disadvantage 

faced by the NYSE, while also providing 

certain companies with an alternative 

listing venue where none currently 

exists. 

Proposed Amendments to NYSE Rules 

The Exchange proposes to amend its 

rules governing the opening of trading 

to specify procedures for the opening 

trade on the day of initial listing of a 

company that lists under the amended 

provisions of Footnote (E) to Section 

102.01B of the Manual and that did not 

have recent sustained history of trading 

in a Private Placement Market before 

listing on the Exchange. The Exchange 

proposes that the issuer must retain a 

financial advisor to provide specified 

functions, as described below. 

Rule 15 

Rule 15(b) provides that a designated 

market maker (‘‘DMM’’) will publish a 

pre-opening indication either (i) before 

a security opens if the opening 

transaction on the Exchange is 

anticipated to be at a price that 

represents a change of more than the 

‘‘Applicable Price Range,’’ as specified 

in Rule 15(d), from a specified 

‘‘Reference Price,’’ as specified in Rule 

15(c), or (ii) if a security has not opened 

by 10:00 a.m. Eastern Time. Rule 

15(c)(1) specifies the Reference Price for 

a security other than an American 

Depository Receipt, which would be 

either (A) the security’s last reported 

sale price on the Exchange; (B) the 

security’s offering price in the case of an 

IPO; or (C) the security’s last reported 

sale price on the securities market from 

which the security is being transferred 

to the Exchange, on the security’s first 

day of trading on the Exchange. 

The Exchange proposes to amend 

Rule 15(c)(1) to add new sub-paragraph 

(D) to specify the Reference Price for a 

security that is listed under Footnote (E) 

to Section 102.01B of the Manual. As 

proposed, if such security has had 

recent sustained trading in a Private 

Placement Market prior to listing, the 

Reference Price in such scenario would 

be the most recent transaction price in 

that market or, if none, a price 

determined by the Exchange in 

consultation with a financial advisor to 

the issuer of such security. 

Rule 104 

Rule 104(a)(2) provides that the DMM 

has a responsibility for facilitating 

openings and reopenings for each of the 

securities in which the DMM is 

registered as required under Exchange 

rules, which includes supplying 

liquidity as needed.11 The Exchange 

proposes to amend Rule 104(a)(2) to 

specify the role of a financial adviser to 

an issuer that is listing under Footnote 

(E) to Section 102.01B of the Manual 

and that has not had recent sustained 

history of trading in a Private Placement 

Market prior to listing. 

As described above, an issuer that 

seeks to list under Footnote (E) to 

Section 102.01B and that does not have 

any recent Private Market Placement 

trading would be required to have a 

financial advisor in connection with 

such listing. The Exchange proposes 

that the DMM would be required to 

consult with such financial advisor 

when facilitating the open of trading of 

the first day of trading of such listing. 

This requirement is based in part on 

Nasdaq Rule 4120(c)(9), which requires 

that a new listing on Nasdaq that is not 

an IPO have a financial advisor willing 

to perform the functions performed by 

an underwriter in connection with 

pricing an IPO on Nasdaq.12

The Exchange believes that such a 

financial advisor would have an 

understanding of the status of 

ownership of outstanding shares in the 

company and would have been working 

with the issuer to identify a market for 

the securities upon listing. Such 

financial advisor would be able to 

provide input to the DMM regarding 

expectations of where such a new listing 

should be priced, based on pre-listing 

selling and buying interest and other 

factors that would not be available to 

the DMM through other sources. 

To effect this change, the Exchange 

proposes to amend Rule 104(a)(3) to 

provide that when facilitating the 

opening on the first day of trading of a 

security that is listed under Footnote (E) 

to Section 102.01B of the Manual and 

that has not had recent sustained history 

of trading in a Private Placement Market 

prior to listing, the DMM would be 

required to consult with a financial 

advisor to the issuer of such security in 

order to effect a fair and orderly opening 

of such security. 

Notwithstanding the proposed 

obligation to consult with the financial 

advisor, the DMM would remain 

responsible for facilitating the opening 

of trading of such security, and the 

opening of such security must take into 

consideration the buy and sell orders 

available on the Exchange’s book in 

connection. Accordingly, just as a DMM 

is not bound by an offering price in an 

IPO, and will open such a security at a 


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13The Exchange proposes to re-number current 

Rule 123D(d) as Rule 123D(e). 

14The Exchange believes that the correct cross 

reference should be to Nasdaq Rule 4120(c)(8)(B). 

Nasdaq Rule 4120(c)(8) specifies Nasdaq procedures 

for how it conducts its crossing trade following a 

trading halt declared for an IPO on Nasdaq, 

including the role of an underwriter in determining 

when an IPO may be released for trading. 

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

16 15 U.S.C. 78f(b)(5). 

price dictated by the buying and selling 

interest entered on the Exchange in that 

security, a DMM would not be bound by 

the input he or she receives from the 

financial advisor. 

Rule 123D 

The Exchange further proposes to 

amend its rules to provide authority to 

declare a regulatory halt for a new 

listing that is not the subject of an IPO. 

As proposed, Rule 123D(d) would 

provide that the Exchange may declare 

a regulatory halt in a security that is the 

subject of an initial pricing on the 

Exchange of a security that has not been 

listed on a national securities exchange 

or traded in the over-the-counter market 

pursuant to FINRA Form 211 (‘‘OTC 

market’’) immediately prior to the initial 

pricing.13 Proposed Rule 123D(d) would 

further provide that this regulatory halt 

would be terminated when the DMM 

opens the security. 

Proposed Rule 123D(d) is based in 

part on Nasdaq Rule 4120(c)(9), which 

provides that the process for halting and 

initial pricing of a security that is the 

subject of an IPO on Nasdaq is also 

available for the initial pricing of any 

other security that has not been listed 

on a national securities exchange or 

traded in the OTC market immediately 

prior to the initial public offering, 

provided that a broker-dealer serving in 

the role of financial advisor to the issuer 

of the securities being listed is willing 

to perform the functions under Rule 

4120(c)(7)(B) that are performed by an 

underwriter with respect to an initial 

public offering.14 Proposed Rule 

123D(d) is also based in part on Nasdaq 

Rule 4120(c)(8)(A), which provides that 

such halt condition shall be terminated 

when the security is released for trading 

on Nasdaq. 

Proposed Rule 123D(d) would provide 

authority for the Exchange to declare a 

regulatory halt for a security that is 

having its initial listing on the 

Exchange, is not an IPO, and has not 

been listed on a national securities 

exchange or traded in the OTC market 

immediately prior to the initial pricing 

(‘‘non-IPO listing’’). The Exchange does 

not propose to include the last clause of 

Nasdaq Rule 4120(c)(9) in proposed 

Rule 123D(d). Rather, as described 

above, the Exchange proposes to address 

the role of a financial advisor to an 

issuer in specified circumstances in 

Rule 104(a)(3). 

The Exchange believes that it would 

be consistent with the protection of 

investors and the public interest for the 

Exchange, as a primary listing exchange, 

to have the authority to declare a 

regulatory halt for a security that is the 

subject of a non-IPO listing because it 

would ensure that a new listing that is 

not the subject of an IPO could not be 

traded before the security opens on the 

Exchange. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) 15 of the Act, in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act,16 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 

proposed rule change would foster 

cooperation and coordination with 

persons engaged in clearing and settling 

transactions in securities, thereby 

facilitating such transactions. 

The proposal to permit companies 

listing upon effectiveness of an 

Exchange Act registration statement 

without a concurrent public offering or 

Securities Act registration is designed to 

protect investors and the public interest, 

because such companies will be 

required to meet all of the same 

quantitative requirements met by other 

listing applicants. The proposal to 

amend Footnote (E) to Section 102.01B 

of the Manual to allow companies to 

avail themselves of that provision 

without any reliance on Private 

Placement Market trading is designed to 

protect investors and the public interest 

because any company relying solely on 

a valuation to demonstrate compliance 

with the market value of publicly-held 

shares requirement will be required to 

demonstrate a market value of publiclyheld shares of $250 million, rather than 

the $100 million that is generally 

applicable. The proposal to include a 

definition of valuation agent 

independence in Footnote (E) is 

consistent with the protection of 

investors, as it ensures that any entity 

providing a Valuation for purposes of 

Footnote (E) will have a significant level 

of independence from the listing 

applicant. 

The Exchange believes that the 

proposed amendments to Rules 15 and 

104 would remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system because the proposed rule 

changes would specify requirements 

relating to the opening of a trading of a 

security that would be listed under the 

proposed amended text of Footnote (E) 

to Section 102.01B of the Manual. The 

proposed amendments to Exchange 

rules are designed to provide DMMs 

with information to assist them in 

meeting their obligations to open a new 

listing under the amended provisions of 

the Manual. Rule 15 would be amended 

to specify the Reference Price that the 

DMM would use for purposes of 

determining whether a pre-opening 

indication is required and Rule 104 

would be amended to provide that the 

DMM will consult with a financial 

advisor when facilitating the opening of 

a security that is listed under Footnote 

(E) to Section 102.01B of the Manual 

and that has not had recent sustained 

history of trading in a Private Placement 

Market prior to listing. 

The Exchange believes that the 

proposed amendments to Rule 123D to 

provide authority to declare a regulatory 

halt in a security that is the subject of 

a non-IPO listing would remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system because it 

would provide the Exchange with 

authority to halt trading across all 

markets for a security that has not 

previously listed on the Exchange, but 

for which a regulatory halt would 

promote fair and orderly markets. The 

proposed rule change would also align 

halt rule authority among primary 

listing exchanges. The Exchange further 

believes that having the authority to 

declare a regulatory halt for a security 

that is the subject of a non-IPO listing 

is consistent with the protection of 

investors and the public interest and 

would promote fair and orderly markets 

by helping to protect against volatility 

in pricing and initial trading of 

unseasoned securities. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed amendment to Footnote 

(E) to Section 102.01B of the Manual 

will impose any burden on competition 

that is not necessary or appropriate in 

furtherance of the purpose of the 


rmajette on DSKBCKNHB2PROD with NOTICES
Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 40187 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 79474 

(December 6, 2016), 81 FR 89543. 

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

5See Securities Exchange Act Release No. 79781, 

82 FR 6669 (January 19, 2017). 

6 15 U.S.C. 78s(b)(2). 

7See Securities Exchange Act Release No. 80864, 

82 FR 26966 (June 12, 2017). 

8See letter from Albert J. Kim, Vice President and 

Associate General Counsel, CHX, dated August 8, 

2017, available at: https://www.sec.gov/comments/ 

sr-chx-2016-20/chx201620-2198847-160378.pdf. 

9 17 CFR 200.30 3(a)(12). 

10See Securities Exchange Act Release No. 81366, 

82 FR 38734 (August 15, 2017). 

11 17 CFR 201.431. 

Exchange Act. Rather, the proposed rule 

change will increase competition for 

new listings by enabling companies to 

list that meet all quantitative 

requirements but are currently unable to 

list because of the methodology required 

by the current rules to demonstrate their 

compliance. 

As noted above, Nasdaq’s listing rules 

do not include explicit limitations 

applicable to the listing of companies in 

these circumstances. Additionally, 

Nasdaq has listed previously private 

companies upon effectiveness of a 

selling shareholder registration 

statement without a concurrent 

underwritten offering on several 

occasions in the past. In light of this 

precedent and the absence of any 

Nasdaq rule provision explicitly 

limiting the ability of a company to 

qualify for listing without a public 

offering or prior public market price, the 

Exchange believes that Nasdaq would 

take the position that it could also list 

a previously private company upon 

effectiveness of an Exchange Act 

registration statement without a 

concurrent public offering. As such, the 

proposed amendment to Footnote (E) to 

Section 102.01B of the Manual would 

increase competition by enabling the 

NYSE to compete with Nasdaq for these 

listings. 

The Exchange does not believe that 

the proposed amendments to its Rule 

Book will impose any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Exchange Act. 

Specifically, the Exchange believes that 

the changes are not related to 

competition, but rather are designed to 

promote fair and orderly markets in a 

manner that is consistent with the 

protection of investors and the public 

interest. The proposed changes do not 

impact the ability of any market 

participant or trading venue to compete. 

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. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change, as modified by Amendment No. 

2, 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–2017–30 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–2017–30. 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 Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–NYSE– 

2017–30 and should be submitted on or 

beforeSeptember 14, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2017–17922 Filed 8–23–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81435/August 18, 2017] 

Securities Exchange Act of 1934; 

Order Scheduling Filing of Statements 

on Review in the Matter of the Chicago 

Stock Exchange, Inc. for an Order 

Granting the Approval of Proposed 

Rule Change Regarding the 

Acquisition of CHX Holdings, Inc. by 

North America Casin Holdings, Inc. 

(File No. SR–CHX–2016–20) 

On December 2, 2016, the Chicago 

Stock Exchange, Inc. (‘‘CHX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Exchange Act’’)1 and Rule 

19b–4 thereunder,2 a proposed rule 

change in connection with the 

acquisition of CHX Holdings, Inc. by 

North America Casin Holdings, Inc. The 

proposed rule change was published for 

comment in the Federal Register on 

December 12, 2016.3 On January 12, 

2017, proceedings were instituted under 

Section 19(b)(2)(B) of the Exchange Act 4

to determine whether to approve or 

disapprove the proposed rule change.5

On June 6, 2017, pursuant to Section 

19(b)(2) of the Exchange Act,6 a longer 

period was designated for Commission 

action on proceedings to determine 

whether to disapprove the proposed 

rule change.7 On August 7, 2017, the 

Exchange filed Amendment No. 1 to the 

proposed rule change.8 On August 9, 

2017, the Division of Trading and 

Markets, for the Commission pursuant 

to delegated authority,9 approved the 

proposed rule change, as modified by 

Amendment No. 1.10

Pursuant to Commission Rule of 

Practice 431,11 the Commission is 

reviewing the delegated action and the 

August 9, 2017 order is stayed. 

Accordingly, it is ordered, pursuant to 

Commission Rule of Practice 431, that 

by September 17, 2017, any party or 


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