Document ID: SEC-2021-1220-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2021-09-10T04:00Z

[Federal Register Volume 86, Number 173 (Friday, September 10, 2021)]
[Notices]
[Pages 50748-50750]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19509]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92876; File No. SR-NYSE-2021-45]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change Proposing To Adopt Listing 
Standards for Subscription Warrants Issued by a Company Organized 
Solely for the Purpose of Identifying an Acquisition Target

September 3, 2021.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on August 24, 2021, New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the NYSE Listed Company Manual 
(``Manual'') to adopt a new listing standard for the listing of 
Subscription Warrants. 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to adopt a new subsection of Section 102 of 
the Manual (to be designated Section 102.09) to permit the listing of 
Subscription Warrants. For purposes of proposed Section 102.09 a 
Subscription Warrant is a warrant issued by a company organized solely 
for the purpose of identifying an acquisition target and exercisable 
into the common stock of such company upon entry into a binding 
agreement with respect to such acquisition.
Initial Listing Standards for Subscription Warrants
    The Exchange will list Subscription Warrants subject to the 
following requirements:
    (i) The issuer of the Subscription Warrants must be a company 
formed solely for the purpose of issuing the Subscription Warrants and 
consummating the acquisition of one or more operating businesses or 
assets with a value (calculated at the time of entry into the 
acquisition agreement) equal to at least 80% of the aggregate exercise 
price of the Subscription Warrants (an ``Acquisition'').
    (ii) For a transaction to qualify as an Acquisition, the resultant 
entity must qualify for initial listing on the Exchange and the 
acquisition agreement must provide that the transaction will be 
consummated only if the resultant entity will be listed on the Exchange 
or another national securities exchange.
    (iii) At the time of initial listing, the Subscription Warrants 
must: (A) Have an aggregate exercise price of at least $250 million; 
(B) have at least 1,100,000 publicly held Subscription Warrants 
outstanding, with an aggregate exercise price of at least $200 million; 
(C) have at least 400 holders of round lots; (D)

[[Page 50749]]

have an exercise price per share of common stock of at least $10.00; 
and (D) expire in no more than 10 years. For purposes of proposed 
Section 102.09, public holders of Subscription Warrants do not include 
those held by directors, officers, or their immediate families and 
other concentrated holdings of 10 percent.
    (iv) The Subscription Warrants may not be fully exercisable for 
common stock of a company until after such company enters into a 
binding agreement with respect to the Acquisition and may not limit the 
ability of holders to exercise such warrants in full prior to the 
closing of such Acquisition.
    (v) The proceeds of the exercise of the Subscription Warrants will 
be held in an interest-bearing custody account controlled by an 
independent custodian, pending the closing of such Acquisition.
    (vi) The shares of common stock issued upon exercise of the 
Subscription Warrants will promptly be redeemed by the issuer of such 
Subscription Warrants for cash (A) upon termination of the acquisition 
agreement; or (B) if the Acquisition does not close within twelve 
months from the date of exercise of the Subscription Warrants, or such 
earlier time as is specified in the operative agreements. If the shares 
issuable upon exercise of the Subscription Warrants are redeemed, the 
holders will receive cash payments equal to their proportional share of 
the funds in the custody account, including any interest earned on 
those funds.
    (vii) The sale of the Subscription Warrants and the issuance of the 
common stock of the issuer in exchange for the Subscription Warrants 
must both be registered under the Securities Act.
    (viii) The issuer of the Subscription Warrants will be subject to 
the same corporate governance requirements under Section 303A hereof as 
an issuer of listed common stock.
    (ix) the Acquisition must be approved by a majority of the 
independent directors of the issuer of the Subscription Warrants.
Continued Listing Standards for Subscription Warrants
    The Exchange will immediately initiate suspension and delisting 
procedures of an issuer's Subscription Warrants if:
     The number of publicly-held Subscription Warrants is fewer 
than 100,000;
     the number of public holders of such Subscription Warrants 
is fewer than 100; or
     the total market capitalization of such Subscription 
Warrants is below $15 million over 30 consecutive trading days.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(5) of the Act,\4\ 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.
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    \4\ 15 U.S.C. 78f(b)(5).
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    Furthermore, the Exchange believes that the proposed listing 
standard is consistent with Section 6(b)(5) of the Act in that it 
contains requirements in relation to the listing of Subscription 
Warrants that provide adequate protections for investors and the public 
interest. In particular:
     The Subscription Warrants may not be fully exercisable for 
common stock of a company until after such company enters into a 
binding agreement with respect to the Acquisition and may not limit the 
ability of holders to exercise such warrants in full prior to the 
closing of such Acquisition.
     The proceeds of the exercise of the Subscription Warrants 
will be held in an interest-bearing custody account controlled by an 
independent custodian, pending the closing of such Acquisition.
     The shares of common stock issued upon exercise of the 
Subscription Warrants will promptly be redeemed by the issuer of such 
Subscription Warrants for cash (A) upon termination of the acquisition 
agreement; or (B) if the Acquisition does not close within twelve 
months from the date of exercise of the Subscription Warrants, or such 
earlier time as is specified in the operative agreements. If the shares 
issuable upon exercise of the Subscription Warrants are redeemed, the 
holders will receive cash payments equal to their proportional share of 
the funds in the custody account, including any interest earned on 
those funds.
    The proposed rule change is designed to perfect the mechanism of a 
free and open market and, in general, to protect investors and the 
public interest in that it will facilitate the listing and trading of 
an additional type of security and that will enhance competition among 
market participants, to the benefit of investors and the marketplace.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed rule would be 
available in a non-discriminatory way to any company satisfying its 
requirements, as well as all other applicable NYSE listing 
requirements. In addition, the Exchange faces competition for listings 
but the proposed rule change does not impose any burden on the 
competition with other exchanges; any competing exchange could 
similarly adopt rules to allow the listing of Subscription Warrants.

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-2021-45 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange

[[Page 50750]]

Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2021-45. 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 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. 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-2021-45, and should be submitted on 
or before October 1, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-19509 Filed 9-9-21; 8:45 am]
BILLING CODE 8011-01-P