48296 Federal Register / Vol. 82, No. 199 / Tuesday, October 17, 2017 / Notices 

73See Transaction Order, 81 FR at 93991–92. 

74 15 U.S.C. 78f(b)(1); 17 CFR 240.19b–4. 

75 15 U.S.C. 78f(b)(1). 

76See, e.g., ISE Order, 82 FR at 36505 (approving 

a prohibition on the use of regulatory fines, fees, or 

penalties to pay dividends). See also CBOE 

Demutualization Order, 75 FR at 30089 (approving 

CBOE Rule 2.51). 

77See BYX Notice, 82 FR at 42138; BZX Notice, 

82 FR at 42192; EDGA Notice, 82 FR at 42217; 

EDGX Notice, 82 FR at 42164. 

78See BYX Notice, 82 FR at 42139; BZX Notice, 

82 FR at 42192–93; EDGA Notice, 82 FR at 42218; 

EDGX Notice, 82 FR at 42165. 

79See proposed BYX Rules 1.1, 2.10, and 8.6; 

proposed BZX Rules 1.1, 2.10, and 8.6; proposed 

EDGA Rules 1.1, 2.10, and 8.6; proposed EDGX 

Rules 1.1, 2.10, and 8.6. The Exchanges also 

propose to move the prohibition on the use of 

regulatory revenues for non-regulatory purposes 

from the Current Bylaws to the rules. See supra 

note 70 and accompanying text. 

80 15 U.S.C. 78s(b)(2). 

81 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. 81102 

(July 7, 2017), 82 FR 32413 (‘‘Notice’’). 

4Amendment No. 1 amends the original filing to: 

(1) Correct a reference in the purpose section of the 

filing from a reference to Section 802.01 of the 

Manual to a reference to Sections 802.02 and 802.03 

of the Manual; (2) change the proposed continued 

listing holder requirement from 100 total holders to 

100 public holders; (3) provide that Subscription 

Receipts will be subject to immediate suspension 

and delisting proceedings (with no eligibility with 

respect to the procedures set forth in Sections 

802.02 and 802.03 of the Manual) in the event that 

at any time there are fewer than 100,000 publiclyheld shares or 100 public holders of the 

Subscription Receipts; and (4) make clear that 

Subscription Receipts convert into primary 

common stock of the listed company. When the 

Exchange filed Amendment No. 1 with the 

Commission, it also submitted Amendment No. 1 to 

the public comment file for SR–NYSE–2017–31 

(available at: https://www.sec.gov/comments/srnyse-2017-31/nyse201731.htm). 

5See Notice, supra note 3, at 32413. 

6See id. 

7See Amendment No. 1. 

8See Notice, supra note 3, at 32413. 

Exchanges will be subject to 

confidentiality restrictions.73

The Commission finds that the 

proposed process regarding 

amendments to the Proposed 

Certificates and Proposed Bylaws is 

consistent with Section 6(b)(1) of the 

Act, because it reflects the obligation of 

the Board to ensure compliance with the 

rule filing requirements under the Act. 

Additionally, the Commission finds 

these changes to be consistent with 

Section 19(b)(1) of the Act and Rule 

19b–4 thereunder,74 which require that 

a self-regulatory organization file with 

the Commission all proposed rules, as 

well as all proposed changes in, 

additions to, and deletions of its 

existing rules. These provisions clarify 

that amendments to the Proposed 

Certificates and Proposed Bylaws 

constitute proposed rule changes within 

the meaning of Section 19(b)(2) of the 

Act and Rule 19b–4 thereunder, and are 

subject to the filing requirements of 

Section 19 of the Act and the rules and 

regulations thereunder. 

The Commission also finds that the 

prohibition on the use of regulatory fees 

or fines to fund non-regulatory purposes 

or to make distributions to the 

stockholder is consistent with Section 

6(b)(1) of the Act,75 because it is 

designed to further each Exchange’s 

ability to effectively comply with its 

statutory obligations and is designed to 

ensure that the regulatory authority of 

the Exchange is not improperly used.76

This restriction on the use of regulatory 

funds is intended to preclude each 

Exchange from using its authority to 

raise regulatory funds for the purpose of 

benefiting its stockholder.77

C. Related Rule Amendments 

Each Exchange proposes to amend its 

rules in conjunction with the changes in 

the Proposed Bylaws.78 Specifically, 

each Exchange proposes to update 

certain cross-references to the bylaws in 

its rules and to move certain definitions 

from the bylaws to the rules.79

The Commission finds that these 

proposed rule changes are consistent 

with the Act in that they are necessary 

to update cross-references and certain 

defined terms in the rules and would 

assist Exchange Members and the public 

in understanding the Exchanges’ rules. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,80 that the 

proposed rule changes (SR–BatsBYX– 

2017–19; SR–BatsBZX–2017–55; SR– 

BatsEDGA–2017–22; and SR– 

BatsEDGX–2017–35), each as modified 

by its respective Amendment No. 1, be, 

and hereby are, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.81

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–22387 Filed 10–16–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81856; File No. SR–NYSE– 

2017–31] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Amendment No. 1 and Order 

Granting Accelerated Approval of a 

Proposed Rule Change, as Modified by 

Amendment No. 1, To Amend the 

Listed Company Manual To Adopt 

Initial and Continued Listing Standards 

for Subscription Receipts 

October 11, 2017. 

I. Introduction 

On June 26, 2017, New York Stock 

Exchange LLC (‘‘NYSE’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) pursuant to Section 

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

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

amend the NYSE Listed Company 

Manual (‘‘Manual’’) to adopt initial and 

continued listing standards for 

Subscription Receipts. The proposed 

rule change was published for comment 

in the Federal Register on July 13, 

2017.3 On October 3, 2017, the 

Exchange submitted Amendment No. 1 

to the proposed rule change.4 The 

Commission is publishing this notice of 

Amendment No. 1 and approving the 

proposed rule change, as modified by 

Amendment No. 1, on an accelerated 

basis. 

II. Description of the Proposed Rule 

Change, as Modified by Amendment 

No. 1 

The Exchange has proposed to adopt 

initial and continued listing standards 

for the listing of Subscription Receipts. 

In its proposal, NYSE generally 

described the structure of Subscription 

Receipts and noted that Subscriptions 

Receipts have been used as a financing 

technique by Canadian public 

companies.5 According to the Exchange, 

Canadian companies typically use 

Subscription Receipts as a means of 

providing cash consideration in merger 

or acquisition transactions.6

Subscription Receipts are sold in a 

public offering that occurs after the 

execution of an acquisition agreement. 

The proceeds of the Subscription 

Receipt offering are held in a custody 

account and, if the related acquisition 

closes, the Subscription Receipt holders 

will have their Subscription Receipts 

converted into a specified number of 

shares of the primary listed class of 

common stock of the issuer.7 If the 

acquisition does not close, the 

Subscription Receipts are redeemed for 

their original purchase price plus any 

interest accrued on the custody account. 

The Exchange stated in its proposal 

that Subscription Receipts provide a 

contingent form of financing for an 

issuer that only becomes permanent if 

the specified acquisition is completed.8

In contrast, the Exchange noted that a 

company financing the cash 

consideration for an acquisition by 

means of a traditional equity or debt 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 82, No. 199 / Tuesday, October 17, 2017 / Notices 48297 

9See id. 

10See id. 

11For purposes of the initial and continued 

listing requirements for Subscription Receipts, 

shares 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. See proposed 

Sections 102.08 and 802.01B of the Manual. 

12See 15 U.S.C. 77a et seq. 

13 In adopting a continued listing requirement of 

100 public holders, the Exchange notes that this is 

similar to other exchange continued listing 

standards. See, e.g., NASDAQ Marketplace Rule 

5460(a)(4). See also Section 802.01D (providing 

continued listing standards for warrants, among 

other specialized securities). For purposes of the 

continued listing requirements for Subscription 

Receipts, ‘‘public holders’’ exclude holders that are 

directors, officers, or their immediate families and 

holders of other concentrated holdings of 10% or 

more. See proposed Section 802.01B of the Manual. 

14Sections 802.02 and 802.03 of the Manual set 

forth procedures for listed companies to submit a 

plan, which must be approved by the Exchange, to 

bring the listed company into conformity with a 

continued listing standard within eighteen months 

of receiving a letter of non-compliance. As noted 

above, an issuer of Subscription Receipts will not 

be eligible to utilize the procedures in Sections 

802.02 or 802.03 of the Manual to submit a plan of 

compliance and instead will be subject to the 

procedures in Section 804 of the Manual. 

15Section 804 of the Manual sets forth the 

applicable due process procedures, including 

appeal rights, for the suspension and delisting of 

the securities of a listed company. 

16See Notice, supra note 3, at 32414. 

17See id. 

18See Amendment No. 1. See also Section 802.01 

of the Manual (providing the continued listing 

criteria for capital or common stock listed on 

NYSE). 

19See Notice, supra note 3, at 32414. 

20See id. 

21See id. 

offering is at risk of having incurred 

unnecessary dilution of its shareholders 

or indebtedness if the related 

acquisition fails to close.9 The Exchange 

further noted that Subscription Receipts 

provide investors with flexibility to 

elect to invest in the post-merger 

company and not in the company in its 

pre-merger form. 

The Exchange has proposed the 

following initial listing standards for 

Subscription Receipts: 10

(a) At the time of initial listing, the 

Subscription Receipts must have a price 

per share of at least $4.00, a minimum 

total market value of publicly-held 

shares of $100 million, 1,100,000 

publicly-held shares,11 and 400 holders 

of round lots (i.e., 100 securities). 

(b) The issuer must be an NYSE listed 

company that is not currently noncompliant with any applicable 

continued listing standard. 

(c) The proceeds of the Subscription 

Receipts offering must be designated 

solely for use in connection with the 

consummation of a specified acquisition 

that is the subject of a binding 

acquisition agreement (the ‘‘Specified 

Acquisition’’). 

(d) The proceeds of the Subscription 

Receipts offering must be held in an 

interest-bearing custody account by an 

independent custodian. 

(e) The Subscription Receipts must 

promptly be redeemable for cash (i) at 

any time the Specified Acquisition is 

terminated, or (ii) if the Specified 

Acquisition does not close within 

twelve months from the date of issuance 

of the Subscription Receipts, or such 

earlier time as is specified in the 

operative agreements. If the 

Subscription Receipts are redeemed, the 

holders must receive cash payments 

equal to their proportionate share of the 

funds in the custody account, including 

any interest earned on those funds. 

(f) If the Specified Acquisition is 

consummated, the holders of the 

Subscription Receipts must receive the 

shares of common stock for which their 

Subscription Receipts are exchangeable. 

(g) The sale of the Subscription 

Receipts and the issuance of the 

common stock of the issuer in exchange 

for the Subscription Receipts must both 

be registered under the Securities Act of 

1933.12

The Exchange has also proposed to 

amend Section 802.01B of the Manual to 

include continued listing standards 

applicable to Subscription Receipts 

listed under proposed Section 102.08 of 

the Manual. In its filing, as modified by 

Amendment No. 1, the Exchange 

proposed to immediately initiate 

suspension and delisting procedures 

when: (i) The number of publicly-held 

shares is less than 100,000; (ii) the 

number of public holders is less than 

100; 13 (iii) the total market 

capitalization of the Subscription 

Receipts is below $15 million over 30 

consecutive trading days; (iv) the related 

common equity security ceases to be 

listed; or (v) the issuer announces that 

the Specified Acquisition has been 

terminated. 

An issuer of Subscription Receipts 

will not be eligible to follow the 

procedures outlined in Sections 802.02 

and 802.03 of the Manual with respect 

to these criteria,14 and any such security 

will be subject to delisting procedures 

as set forth in Section 804 of the 

Manual.15 The Exchange also stated that 

Subscription Receipts will be subject to 

potential delisting for all of the reasons 

generally applicable to operating 

companies under Section 802.01 of the 

Manual.16 The Exchange further noted 

in its proposal that an issuer of 

Subscription Receipts may be subject to 

delisting at the time of closing of the 

related acquisition pursuant to the 

‘‘backdoor listing’’ provisions of Section 

703.08(E) of the Manual.17 Further, if 

the Specified Acquisition is 

consummated, as noted above, the 

Subscription Receipts convert into the 

primary listed class of common stock of 

the issuer, which will thereafter be 

subject to all of the continued listing 

requirements applicable to a primary 

class of common stock listed on 

NYSE.18

The Exchange also has proposed to 

amend Section 202.06 of the Manual to 

provide that whenever it halts trading in 

a security of a listed company pending 

dissemination of material news or 

implements any other required 

regulatory trading halt, the Exchange 

will also halt trading in any listed 

Subscription Receipt that is 

exchangeable by its terms into the 

common stock of such company.19

The Exchange represented that it will 

monitor activity in Subscription 

Receipts to identify and deter any 

potential improper trading activity in 

such securities and will adopt enhanced 

surveillance procedures to enable it to 

monitor Subscription Receipts alongside 

the common equity securities into 

which they are convertible.20

Additionally, the Exchange states that it 

will rely on its existing trading 

surveillances, administered by the 

Exchange or the Financial Industry 

Regulatory Authority (‘‘FINRA’’) on 

behalf of the Exchange, which are 

designed to detect violations of 

Exchange rules and applicable federal 

securities law. 

Finally, the Exchange has proposed to 

apply the listing fees for ‘‘short-term’’ 

securities (i.e., securities with a life of 

seven years or less), set forth in Section 

902.06 of the Manual, to Subscription 

Receipts because these securities, as 

noted above, will be short-term 

securities that have a maximum term of 

twelve months.21 The Exchange has 

therefore proposed to amend Section 

902.06 of the Manual to make it explicit 

that it will apply to Subscription 

Receipts. Finally, the Exchange 

proposes to amend Section 902.06 of the 

Manual to remove a reference to the 

annual fees charged prior to January 1, 

2017, as that reference is now irrelevant. 

III. Discussion and Commission 

Findings 

The Commission finds that the 

proposed rule change, as modified by 

Amendment No. 1, is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange and, in particular, the 

requirements of Section 6(b) of the Act 

and the rules and regulations 


sradovich on DSK3GMQ082PROD with NOTICES
48298 Federal Register / Vol. 82, No. 199 / Tuesday, October 17, 2017 / Notices 

22 15 U.S.C. 78f(b)(5). 

23 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rules’ impact on efficiency, competition, 

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

24For purposes of the initial and continued 

listing requirements for Subscription Receipts, 

shares 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. See proposed 

Sections 102.08 and 802.01B of the Manual. 

25See Sections 102.01A and 102.01B of the 

Manual. 

26Because the issuer of the Subscription Receipt 

is already listing its primary common stock on the 

Exchange, it must comply with the continued 

listing standards for capital and common stock as 

well as the corporate governance requirements 

applicable to listed companies. 

27For purposes of the continued listing 

requirements for Subscription Receipts, ‘‘public 

holders’’ exclude holders that are directors, officers, 

or their immediate families and holders of other 

concentrated holdings of 10% or more. See 

proposed Section 802.01B of the Manual. 

28The Commission notes that an issuer of 

Subscription Receipts will not be eligible to follow 

the evaluation and follow-up procedures outlined 

in Sections 802.02 and 802.03 of the Manual with 

respect to these criteria, and any such security will 

be subject to delisting procedures as set forth in 

Section 804 of the Manual. 

29See, e.g., Section 802.01D of the Manual 

(providing the continued listing standards for 

certain types of specialized securities, including 

warrants). 

thereunder. Specifically, the 

Commission finds that the proposal is 

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

Act,22 which requires that an exchange 

have rules designed to, among other 

things, promote just and equitable 

principles of trade, remove 

impediments to an perfect the 

mechanisms of a free and open market 

and a national market system, protect 

investors and the public interest, and 

not permit unfair discrimination 

between customers, issuers, brokers, or 

dealers.23

The development and enforcement of 

adequate standards governing the initial 

and continued listing of securities on an 

exchange is an activity of critical 

importance to financial markets and the 

investing public. Listing standards, 

among other things, serve as a means for 

an exchange to screen issuers and to 

provide listed status only to bona fide 

companies that have or will have 

sufficient public float, investor base, 

and trading interest to provide the depth 

and liquidity necessary to promote fair 

and orderly markets. Adequate 

standards are especially important given 

the expectations of investors regarding 

exchange trading and the imprimatur of 

listing on a particular market. Once a 

security has been approved for initial 

listing, maintenance criteria allow an 

exchange to monitor the status and 

trading characteristics of that issue to 

ensure that it continues to meet the 

exchange’s standards for market depth 

and liquidity so that fair and orderly 

markets can be maintained. 

Subscription Receipts, as discussed 

by the Exchange in its proposal, are a 

financing technique to fund a Specified 

Acquisition. As NYSE noted in its filing, 

an issuer could sell equity securities to 

fund an acquisition, but if the 

acquisition doesn’t close, investors will 

still experience dilution in their 

holdings. Subscription Receipts allow 

investors the right to invest in the 

common stock of the listed company 

upon consummation of a Specified 

Acquisition. If the deal is not 

consummated within a short time frame 

of 12 months or less, the Subscription 

Receipt holders receive their pro rata 

share of the offering proceeds plus 

interest. In this sense, Subscription 

Receipts could be viewed as a security 

with characteristics of both equity and 

debt and are similar, but not identical 

to, other contingent securities with a 

right to receive common stock, such as 

warrants. At the time investors purchase 

a Subscription Receipt they will also 

have information about the Specified 

Acquisition and are making a decision 

to purchase stock in the listed postacquisition company. 

To address these unique 

characteristics, as discussed in more 

detail below, the Exchange has 

proposed to adopt new Section 102.08 

to list Subscription Receipts, and 

specified continued listing standards. 

The proposed standards would permit 

NYSE to list, and continue to list, 

Subscription Receipts that meet specific 

criteria, including market value, 

distribution, and price requirements, 

which should help to ensure that the 

Subscription Receipts have sufficient 

public float, investor base, and liquidity 

to promote fair and orderly markets. In 

addition, issuers of Subscription 

Receipts would have to comply with 

other investor protection criteria in 

order to list Subscription Receipts, such 

as, among others, holding proceeds in a 

custodial account controlled by an 

independent custodian and providing 

shareholders with cash redemption 

rights should the Specified Acquisition 

be terminated or not close within 12 

months. 

The Commission believes that the 

proposed initial and continued listing 

standards for Subscription Receipts are 

consistent with the requirements of the 

Act, including the protection of 

investors and the promotion of fair and 

orderly markets. 

At the time of initial listing, the 

Subscription Receipts must have a price 

per share of at least $4.00, a minimum 

total market value of publicly-held 

shares of $100 million, 1,100,000 

publicly-held shares,24 and 400 holders 

of round lots (i.e., 100 securities). The 

Commission notes that the distribution 

criteria is the same that currently 

applies to the listing of common stock 

in connection with an initial public 

offering under NYSE listing rules and 

that the $100 million market value of 

publicly-held shares requirement is 

similar to the requirements for other 

initial listing of securities on the 

Exchange.25 The Commission believes 

that these standards should help ensure 

that a sufficient market, with adequate 

depth and liquidity, exists for the initial 

listing of Subscription Receipts.26

Similarly, the Commission believes 

the Exchange’s proposed continued 

listing standards for Subscription 

Receipts are consistent with the 

requirements of the Act and the 

protection of investors. Under the 

amended proposal, the Exchange will 

immediately initiate suspension and 

delisting procedures when (i) the 

number of publicly-held shares is less 

than 100,000, (ii) the number of public 

holders is less than 100,27 (iii) the total 

market capitalization of the 

Subscription Receipts is below $15 

million over 30 consecutive trading 

days, (iv) the related common equity 

security ceases to be listed, or (v) the 

issuer announces that the Specified 

Acquisition has been terminated.28 In 

addition, Subscription Receipts will be 

subject to potential delisting for all of 

the reasons generally applicable to 

operating companies, including those 

outlined in Section 802.01D of the 

Manual, which discusses the factors and 

criteria that may result in delisting, and 

may also be subject to delisting at the 

time of closing of the related acquisition 

pursuant to the backdoor listing 

provisions of Section 703.08 of the 

Manual. The Commission notes the 

application of the backdoor listing 

provision will help to ensure that 

companies that would not otherwise 

qualify for original listing on the 

Exchange could not list, for example, by 

merging with a listed company. 

The Commission believes that these 

standards, taken together, should help 

ensure that a sufficient market, with 

adequate depth and liquidity, exists for 

the continued listing of Subscription 

Receipts and are similar to the 

continued listing standards for other 

securities that have similar 

characteristics.29 The Commission also 

notes that once the Specified 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 82, No. 199 / Tuesday, October 17, 2017 / Notices 48299 

30See Section 802.01 of the Manual. See also 

Amendment No. 1. 

31See 15 U.S.C. 77a et seq. 

32As noted above, the Exchange will also rely on 

its existing trading surveillances, administered by 

the Exchange or FINRA on behalf of the Exchange, 

which are designed to detect violations of Exchange 

rules and applicable federal securities laws. 

33 15 U.S.C. 78f(b)(4). 

34 15 U.S.C. 78s(b)(4) and (b)(5). 

Acquisition has occurred and a 

Subscription Receipt is converted to 

common stock, that common stock is 

subject to the continued listing 

requirements for capital or common 

stock in Section 802.01of the Manual.30

In addition to the quantitative listing 

requirements proposed for Subscription 

Receipts, the proposed initial and 

continued listing standards also include 

additional protections for Subscription 

Receipt holders. For example, the issuer 

of Subscription Receipts must be an 

NYSE listed company that is not 

currently non-compliant with any 

applicable continued listing standard 

and must continue to be listed on the 

Exchange throughout the time the 

Subscription Receipts are traded on the 

Exchange. The proposed rules also 

provide that whenever the Exchange 

halts trading in a security of a listed 

company pending dissemination of 

material news or implements any other 

required regulatory trading halt, the 

Exchange will also halt trading in any 

listed Subscription Receipt that is 

exchangeable by its terms into the 

common stock of such company. 

The Commission believes that these 

additional requirements should protect 

investors and the public interest, 

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

Act, by assuring that information with 

respect to the listed company issuing 

the Subscription Receipts is publicly 

available and that the issuing company 

is meeting all continued listing 

standards, including corporate 

governance requirements, of the 

Exchange. In addition, these 

requirements should help assure that 

the Exchange has a listing relationship 

with, and direct access to information 

from, the issuer of the Subscription 

Receipts. Among other things, this 

direct relationship the Exchange has 

with the listed company issuing the 

Subscription Receipts will help to 

ensure that the Exchange will receive 

information in a timely manner to halt 

trading in the Subscription Receipts 

when there is a material news, or other 

regulatory, trading halt imposed on the 

common stock, and other securities, of 

the listed company. 

There are additional protections for 

investors in the proposed standards. 

These include that all the proceeds of 

the Subscription Receipts offering must 

be designated solely for use in 

connection with the consummation of a 

Specified Acquisition pursuant to a 

definitive acquisition agreement, the 

material terms of which would be 

subject to disclosure. Additionally, the 

proceeds of the Subscription Receipts 

offering must also be held in an interestbearing custody account by an 

independent custodian and holders will 

promptly redeem the Subscription 

Receipts for cash, equal to the holder’s 

proportionate share of the funds in the 

custody account plus any interest 

earned, at any time the Specified 

Acquisition is terminated or if the 

Specified Acquisition does not close 

within twelve months from the date of 

issuance of the Subscription Receipts 

(or such earlier time as specified in the 

operative agreements). If the Specified 

Acquisition is consummated, the 

holders of the Subscription Receipts 

will receive the shares of common stock 

for which their Subscription Receipts 

are exchangeable. Finally, the listing 

standards specifically state and remind 

issuers that the sale of Subscription 

Receipts and the issuance of the 

common stock of the issuer in exchange 

for the Subscription Receipts must both 

be registered under the Securities Act of 

1933.31 This is important because 

shareholders, at the time they purchase 

a Subscription Receipt, are making an 

investment decision to also purchase 

the common stock of the merged listed 

company should the Specified 

Acquisition be consummated, within 

twelve months or such shorter specified 

time period. Therefore, it is important to 

have registration and disclosure under 

the Securities Act of both the 

Subscription Receipt and the related 

common stock. Based on the above, the 

Commission believes that specifically 

setting forth the Securities Act 

registration requirements in the NYSE 

rules for listing Subscription Receipts is 

consistent with the requirements of 

Section 6(b)(5) of the Act to further 

investor protection and the public 

interest. 

The Exchange will also monitor 

activity in Subscription Receipts to 

identify and deter any potential 

improper trading activity in such 

securities and will adopt enhanced 

surveillance procedures to enable it to 

monitor Subscription Receipts alongside 

the common equity securities into 

which they are convertible. Since the 

Subscription Receipts are related to, and 

represent an interest in, the common 

stock of the post-acquisition listed 

company, this enhanced surveillance 

should help to monitor the trading 

activity in both the issuer’s listed 

common stock and the Subscription 

Receipts.32

The Commission believes that these 

safeguards and standards should help to 

ensure that the listing, and continued 

listing, of any Subscription Receipts on 

NYSE will be consistent with investor 

protection, the public interest, and the 

maintenance of fair and orderly markets. 

In this regard, the Commission expects 

NYSE to thoroughly review any 

potential listing of Subscription 

Receipts to ensure that its listing 

standards have been met and continue 

to be met, as well as to monitor trading 

in the Subscription Receipts and related 

common stock of the issuer. Based on 

the foregoing, the Commission finds that 

the proposed initial and continued 

listing standards are consistent with the 

Act. 

Finally, the Commission believes that 

the proposed fees set forth in Section 

902.06 of the Manual are consistent 

with Section 6(b)(4) of the Act,33 in 

particular, in that they are designed to 

provide for the equitable allocation of 

reasonable dues, fees, and other charges, 

and are not designed to permit unfair 

discrimination among the Exchange’s 

members, issuers, and other persons 

using its facilities. The Commission 

notes that the proposed fees are the 

same as the fees applicable to similar 

short term securities under Rule 902.06 

of the Manual. 

Based on the above, the Commission 

believes the proposed rule change, as 

amended, is reasonable and should 

provide for the listing of Subscription 

Receipts, with baseline investor 

protection and other standards. The 

Commission believes, as discussed 

above, that NYSE has developed 

sufficient standards to allow the listing 

of Subscription Receipts on the 

Exchange, and finds the proposal 

consistent with the requirements set 

forth under the Act, and in particular, 

Sections (6)(b)(4) and 6(b)(5).34

IV. Solicitation of Comments on 

Amendment No. 1 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether Amendment No. 1 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 


sradovich on DSK3GMQ082PROD with NOTICES
48300 Federal Register / Vol. 82, No. 199 / Tuesday, October 17, 2017 / Notices 

35 15 U.S.C. 78s(b)(2). 

36 15 U.S.C. 78s(b)(2). 

37 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. 81483 

(August 25, 2017), 82 FR 41457. 

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

5 15 U.S.C. 78s(b)(2). 

6 17 CFR 200.30–3(a)(31). 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSE–2017–31 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2017–31. 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 will also be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

publicly available. All submissions 

should refer to File Number SR–NYSE– 

2017–31 and should be submitted on or 

before November 7, 2017. 

V. Accelerated Approval of Proposed 

Rule Change, as Modified by 

Amendment No. 1 

The Commission finds good cause to 

approve the proposed rule change, as 

modified by Amendment No. 1, prior to 

the 30th day after the date of 

publication of the notice of Amendment 

No. 1 in the Federal Register. As noted 

above, in Amendment No. 1, the 

Exchange amended the original filing to 

correct an incorrect reference to the 

Manual in the purpose section of the 

filing, replace the proposed continued 

listing standard of 100 total holders 

with 100 public holders, add two 

additional continued listing standards— 

the 100,000 publicly-held shares 

requirement and the 100 public holder 

requirement—to the immediate 

suspension and delisting proceeding 

provisions of Section 804 of the Manual, 

and provide a clarification that all 

Subscription Receipts convert into 

primary common stock of the issuer. 

The Commission notes that the 

revisions in Amendment No. 1 provide 

additional clarity and specificity to the 

proposal and do not raise any novel 

regulatory concerns. In addition, the 

changes to the continued listing 

standards strengthen the proposal and 

are consistent with investor protection. 

Finally, the Commission notes that the 

majority of the original proposal was not 

modified and was subject to a full 

notice-and-comment period, and no 

comments were received. Accordingly, 

the Commission finds that good cause 

exists to approve the proposal, as 

modified by Amendment No. 1, on an 

accelerated basis, pursuant to Section 

19(b)(2) of the Act.35

VI. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,36 that the 

proposed rule change (SR–NYSE–2017– 

31), as modified by Amendment No. 1 

thereto, be, and hereby is, approved on 

an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.37

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–22408 Filed 10–16–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81853; File No. SR–CBOE– 

2017–057] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Designation of 

Longer Period for Commission Action 

on Proposed Rule Change To Amend 

Interpretation and Policy .07 of 

Exchange Rule 4.11, Position Limits, 

To Increase the Position Limits for 

Options on Certain ETFs 

October 11, 2017. 

On August 15, 2017, Chicago Board 

Options Exchange, Incorporated (the 

‘‘Exchange’’ or ‘‘CBOE’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

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

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

amend Interpretation and Policy .07 of 

Exchange Rule 4.11, Position Limits, to 

increase the position limits for options 

on the following exchange traded funds 

and exchange traded notes: iShares 

China Large-Cap ETF, iShares MSCI 

EAFE ETF, iShares MSCI Emerging 

Markets ETF, iShares Russell 2000 ETF, 

iShares MSCI Brazil Capped ETF, 

iShares 20+ Year Treasury Bond Fund 

ETF, iPath S&P 500 VIX Short-Term 

Futures ETN, PowerShares QQQ Trust, 

and iShares MSCI Japan ETF. The 

proposed rule change was published for 

comment in the Federal Register on 

August 31, 2017.3 The Commission 

received no comments regarding the 

proposal. 

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

that within 45 days of the publication of 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day for this filing 

is October 15, 2017. 

The Commission is extending the 45- 

day time period for Commission action 

on the proposed rule change. The 

Commission finds that it is appropriate 

to designate a longer period within 

which to take action on the proposed 

rule change so that it has sufficient time 

to consider the proposed rule change. 

Accordingly, pursuant to Section 

19(b)(2) of the Act 5 and for the reasons 

stated above, the Commission 

designates November 29, 2017, as the 

date by which the Commission should 

either approve or disapprove, or 

institute proceedings to determine 

whether to disapprove, the proposed 

rule change (File No. SR–CBOE–2017– 

057). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–22390 Filed 10–16–17; 8:45 am] 

BILLING CODE 8011–01–P 


sradovich on DSK3GMQ082PROD with NOTICES