Document ID: SEC-2017-0814-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2017-05-19T04:00Z

[Federal Register Volume 82, Number 96 (Friday, May 19, 2017)]
[Notices]
[Pages 23123-23125]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-10132]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80677; File No. SR-NYSE-2017-20]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change Amending Its Listing Standard 
for Special Purpose Acquisition Companies To Change Shareholder Vote 
Requirement for the Approval of a Business Combination

May 15, 2017.
    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 May 1, 2017, 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 its listing standard for Acquisition 
Companies (``ACs'') to change its shareholder vote requirement for the 
approval of a Business Combination. 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 its listing standard for Acquisition 
Companies (or ``ACs'') as set forth in Section 102.06 of the NYSE 
Listed Company Manual (the ``Manual'') to change its shareholder vote 
requirement for the approval of a Business Combination.
    An AC (typically known in the marketplace as a special purpose 
acquisition company or ``SPAC'') is a special purpose company formed 
for the purpose of effecting a merger, capital stock exchange, asset 
acquisition, stock purchase, reorganization or similar business 
combination with one or more operating businesses or assets with a fair 
market value equal to at least 80% of the net assets of the AC held in 
trust (net of amounts disbursed to management for working capital 
purposes and excluding the amount of any deferred underwriting discount 
held in trust) (a ``Business Combination'').
    Section 102.06 subjects any AC listed on the NYSE to the following 
requirements (among others):
     If the AC holds a shareholder vote on a Business 
Combination, it must be approved by a majority of the votes cast by 
public shareholders \4\ at the shareholder meeting at which the 
Business Combination is being considered;
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    \4\ Shares held by directors, officers, or their immediate 
families and other concentrated holding of 10 percent or more are 
excluded in calculating the number of publicly-held shares.
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     if a shareholder vote on a Business Combination is held, 
each public shareholder voting against the Business Combination will 
have the right to convert its shares of common stock into a pro rata 
share of the aggregate amount then on deposit in the trust account (net 
of taxes payable, and amounts disbursed to management for working 
capital purposes), provided that the Business Combination is approved 
and consummated; \5\
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    \5\ An AC can establish a limit (set no lower than 10% of the 
shares sold in the AC's IPO) as to the maximum number of shares with 
respect to which any public shareholder, together with any affiliate 
of such shareholder or any person with whom such shareholder is 
acting as a ``group'' (as such term is used in Sections 13(d) and 
14(d) of the Exchange Act) may exercise conversion rights;

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[[Page 23124]]

     if a shareholder vote is not held on a Business 
Combination for which the company must file and furnish a proxy or 
information statement subject to Regulation 14A or 14C under the 
Exchange Act, the company must provide all shareholders with the 
opportunity to redeem all their shares for cash equal to their pro rata 
share of the aggregate amount then in the deposit account (net of taxes 
payable, and amounts disbursed to management for working capital 
purposes), pursuant to Rule 13e-4 and Regulation 14E under the Exchange 
Act, which regulates issuer tender offers; and
     the AC will be liquidated if no Business Combination has 
been consummated within a specified time period not to exceed three 
years.
    The Exchange proposes to amend Section 102.06 by modifying its 
requirement that a shareholder vote approving a Business Combination be 
approved by a majority of the votes cast by public shareholders. The 
proposed amended rule would require approval by a majority of all votes 
cast on the proposal, rather than just votes cast by public 
shareholders. The Exchange notes that the proposed revision to the 
voting requirements would conform the NYSE's rule to the comparable 
requirements under the SPAC listing standards of the NASDAQ Stock 
Market and NYSE MKT.\6\ Harmonizing the Exchange's requirements with 
those of the other listing markets will enable it to compete more 
effectively for the listing of ACs. The Exchange believes that the 
proposed amended rule would be consistent with the protection of 
investors, as any investor who voted against a proposed Business 
Combination would continue to have the right to require the company to 
redeem such investor's shares for cash if the Business Combination was 
consummated.
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    \6\ See NASDAQ IM 5101-2 and Section 119 of the MKT Company 
Guide.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\7\ in general, and furthers the 
objectives of Section 6(b)(5) \8\ of the Act, 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.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed amended rule is consistent 
with the protection of investors because as any investor [sic] who 
voted against a proposed Business Combination would continue to have 
the right to require the company to redeem such investor's shares for 
cash if the Business Combination was consummated. In addition, the 
Exchange notes that the proposed revision to the voting requirements 
would conform the NYSE's rules to the comparable requirements under the 
SPAC listing standards of the NASDAQ Stock Market and NYSE MKT. 
Harmonizing the Exchange's requirements with those of the other listing 
markets will enable it to compete more effectively for the listing of 
ACs.

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 that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed rule change is 
designed to harmonize the Exchange's requirements with respect to the 
listing of ACs with those of the other listing exchanges and will 
therefore increase competition for the listing of ACs by making the 
Exchange a more attractive listing venue.

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-2017-20 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-2017-20. 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 such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; 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-2017-20 and should be 
submitted on or before June 9, 2017.

[[Page 23125]]

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-10132 Filed 5-18-17; 8:45 am]
 BILLING CODE 8011-01-P