
[Federal Register Volume 82, Number 84 (Wednesday, May 3, 2017)]
[Notices]
[Pages 20643-20645]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-08901]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80542; File No. SR-NYSE-2017-18]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Adopt an Annual Fee Cap for Acquisition Companies

April 27, 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 April 14, 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, 
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 adopt an annual fee cap for Acquisition 
Companies. 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 adopt an annual fee cap for Acquisition 
Companies.
    Acquisition Companies (commonly referred to in the marketplace as 
``special purpose acquisition companies'' or ``SPACs'') are listed 
pursuant to Section 102.06 of the NYSE Listed Company Manual (the 
``Manual''). Acquisition Companies typically sell units in their 
initial public offering, consisting of a common equity security and a 
whole or fractional warrant to purchase common stock.\4\ Holders of 
Acquisition Company units typically have the right to separate the 
units shortly after the IPO and the Exchange lists the common equity 
securities and the warrants (in addition to the units) upon separation.
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    \4\ The number of warrants included in the units sold in an 
Acquisition Company IPO varies. Sometimes there is a warrant to 
purchase one common share included as part of each unit. Recently 
the units sold in some Acquisition Company IPOs have included a 
fractional warrant to purchase a share. In order to exercise these 
fractional warrants or trade them separate from the units, an 
investor would need to acquire sufficient warrants to be able to 
exercise them for whole numbers of shares.
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    Currently, Section 902.11 of the Manual specifies that the common 
shares listed as part of an Acquisition Company unit offering are 
subject to the annual fee schedule for common stock set forth in 
Section 902.03 of the Manual and the warrants are subject to the annual 
fee schedule set forth in Section 902.06 for short-term warrants to 
purchase equity securities.\5\ The Exchange proposes to retain this 
annual fee structure, but proposes to establish a limit of $85,000 on 
the aggregate of all annual fees payable by an Acquisition Company with 
respect to its listed common shares and warrants in any calendar year.
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    \5\ Section 902.03 requires listed companies to pay annual fees 
of $0.00105 per share for common stock, subject to a minimum of 
$59,500. Section 902.06 requires a fee of $0.00105 per warrant, 
subject to a $5,000 annual cap. All of the fees payable on both a 
company's common stock and warrants are subject to the overall 
annual cap on listing fees of $500,000 set forth in Section 902.02.
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    An Acquisition Company's listing often lasts for a brief period of 
time. Under the Acquisition Company structure, the company's charter 
provides that it must either enter into a business combination within a 
specified limited period of time (typically two years or less, but no 
longer than three years is permitted under Section 102.06) or return 
the funds held in trust to the company's shareholders and dissolve the 
company. Acquisition Company business combinations do not always result 
in a continued listing of the post-business combination entity, as the 
resultant entity may be a private company or list on another exchange 
or the Acquisition Company may be acquired by another company that is 
already listed. In contrast to an Acquisition Company, an operating 
company that lists on the Exchange will typically remain listed for 
many years.
    Acquisition Companies do not have the same right to receive 
services from the Exchange under Section 907.00 as operating companies 
do. An Acquisition Company is not deemed eligible for the services 
provided to an Eligible New Listing at the time of its initial listing, 
but becomes eligible for those services at such time as it has 
completed one or more business combinations having an aggregate fair 
market value of at least 80% of the value of the trust account as 
specified in Section 102.06 if it remains listed after meeting that 
requirement. As discussed above, many Acquisition Companies either 
liquidate or do not remain listed after their business combination is 
consummated.

[[Page 20644]]

Consequently, many Acquisition Companies would never become eligible 
for services under Section 907.00.\6\ Consequently, the Exchange 
believes it is reasonable to limit the amount of annual fees a listed 
Acquisition Company must pay, as the ineligibility of Acquisition 
Companies to receive services under Section 907.00 means that the cost 
of servicing an Acquisition Company listing would be generally lower 
than the cost to the Exchange of servicing the listing of an operating 
company of comparable size.
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    \6\ Moreover, an Acquisition Company that remains listed after 
its business combination will be subject to the higher annual fees 
charged to operating companies commencing with its first full year 
of listing after consummation of its business combination.
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    The Exchange does not expect the financial impact of the proposed 
amendment to be material in terms of the level of listing fees 
collected from issuers on the Exchange. Specifically, the Exchange 
notes that Acquisition Companies represent a relatively small number of 
potential listings and therefore anticipates that only a limited number 
of Acquisition Companies will list. In addition, the Exchange does not 
anticipate that the annual fees payable by all Acquisition Companies 
would exceed the proposed cap, so the reduction in revenue would not be 
relevant to all listed Acquisition Companies. Accordingly, the Exchange 
believes that the proposed rule change will not impact the Exchange's 
resource commitment to its regulatory oversight of the listing process 
or its regulatory programs.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Exchange Act,\7\ in general, and furthers the 
objectives of Sections 6(b)(4) \8\ of the Exchange Act, in particular, 
in that it is designed to provide for the equitable allocation of 
reasonable dues, fees, and other charges and is not designed to permit 
unfair discrimination among its members and issuers and other persons 
using its facilities. The Exchange also believes that the proposed rule 
change is consistent with Section 6(b)(5) of the Exchange 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.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed rule change is consistent 
with Sections 6(b)(4) and 6(b)(5) of the Exchange Act in that it 
represents an equitable allocation of fees and does not unfairly 
discriminate among listed companies. In particular, the Exchange notes 
that the proposed amendment is not unfairly discriminatory as 
Acquisition Companies frequently have a much shorter period of listing 
on the Exchange than operating companies and they are ineligible to 
receive services from the Exchange that are generally available to 
newly-listed operating companies.

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 limit the amount a listed Acquisition Company pays in 
annual listing fees and should therefore increase competition for 
Acquisition Company listings 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

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \9\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \10\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \11\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \11\ 15 U.S.C. 78s(b)(2)(B).
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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-2017-18 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-2017-18. 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-2017-18 and should be 
submitted on or before May 24, 2017.


[[Page 20645]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-08901 Filed 5-2-17; 8:45 am]
 BILLING CODE 8011-01-P


