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Federal Register / Vol. 86, No. 39 / Tuesday, March 2, 2021 / Notices Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change, as modified by Amendment No. 1, from interested persons.

SECURITIES AND EXCHANGE
COMMISSION
Release No. 3491205; File No. SR
NASDAQ2020057

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, To Allow Companies To List in Connection With a Direct Listing With a Primary Offering in Which the Company Will Sell Shares Itself in the Opening Auction on the First Day of Trading on Nasdaq and To Explain How the Opening Transaction for Such a Listing Will Be Effected February 24, 2021.

On September 4, 2020, The Nasdaq Stock Market LLC Nasdaq or the Exchange filed with the Securities and Exchange Commission Commission, pursuant to Section 19b1 of the Securities Exchange Act of 1934 Act 1 and Rule 19b4
thereunder,2 a proposed rule change to allow companies to list in connection with a primary offering in which the company will sell shares itself in the opening auction on the first day of trading on the Exchange and to explain how the opening transaction for such a listing will be effected. The proposed rule change was published for comment in the Federal Register on September 21, 2020.3 On November 4, 2020, pursuant to Section 19b2 of the Act,4
the Commission designated a longer period within which to either approve or disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.5 On December 17, 2020, the Commission instituted proceedings under Section 19b2B of the Act 6 to determine whether to approve or disapprove the proposed rule change.7
On February 22, 2021, the Exchange filed Amendment No. 1 to the proposed rule change, which superseded the proposed rule change as originally filed, and is described in Items I and II below, which Items have been prepared by the 1 15

U.S.C. 78sb1.
CFR 240.19b4.
3 See Securities Exchange Act Release No. 89878
September 15, 2020, 85 FR 59349 September 21, 2020. Comments received on the proposal are available on the Commissions website at: https
www.sec.gov/comments/sr-nasdaq-2020-057/
srnasdaq2020057.htm.
4 15 U.S.C. 78sb2.
5 See Securities Exchange Act Release No. 90331
November 4, 2020, 85 FR 71708 November 10, 2020.
6 15 U.S.C. 78sb2B.
7 See Securities Exchange Act Release No. 90717
December 17, 2020, 85 FR 84025 December 23, 2020.

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I. Self-Regulatory Organizations Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to allow companies to list in connection with a primary offering in which the company will sell shares itself in the opening auction on the first day of trading on Nasdaq and to explain how the opening transaction for such a listing will be effected.
The text of the proposed rule change is available on the Exchanges website at https listingcenter.nasdaq.com/
rulebook/nasdaq/rules, at the principal office of the Exchange, and at the Commissions Public Reference Room.
II. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange 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 these 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 aspects of such statements.
A. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Nasdaq is filing this amendment to SRNASDAQ2020057 8 in order to: i Require for the security to be released for trading that the actual price calculated by the cross be at or above the lowest price and at or below the highest price of the price range established by the issuer in its effective registration statement; ii provide that the fourth tie-breaker used in calculating the Current Reference Price is the price that is closest to the lowest price of the price range disclosed by the issuer in its effective registration statement; iii provide that for purposes 8 Securities Exchange Act Release No. 89878
September 15, 2020, 85 FR 59349 September 21, 2020 the Initial Proposal. The Commission issued an Order Instituting Proceedings to Determine Whether To Approve or Disapprove the Initial Proposal. See Securities Exchange Act Release No. 90717 December 17, 2020, 85 FR
84025 December 23, 2020 the OIP.

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of qualifying a security under the Listing Rules Nasdaq will calculate the value of shares, and determine whether the company has met the applicable Market Value of Unrestricted Publicly Held Shares, bid price and market capitalization requirements, using a price per share equal to the lowest price in the price range disclosed by the issuer in its effective registration statement; iv provide that notwithstanding the provisions of Rule 4120c8A, Nasdaq, in consultation with the financial advisor to the issuer, will make the determination of whether the security is ready to trade and whether to reschedule the offering as described in Rule 4120c8A; and make minor technical changes to improve the clarity of this proposal.
Nasdaq believes that this amendment addresses the issues raised by the Commission in the OIP.9 This amendment supersedes and replaces the Initial Proposal in its entirety.
Nasdaq proposes to i adopt Listing Rule IM53152 to permit a company to list in connection with a primary offering in which the company will sell shares itself in the opening auction on the first day of trading on the Exchange a Direct Listing with a Capital Raise; 10 ii amend Rule 4702 to add a new order type the Company Direct Listing Order, which will be used during the Nasdaq Halt Cross for the shares offered by the company in a Direct Listing with a Capital Raise; and iii amend Rules 4120c9, 4753a3
and 4753b2 to establish requirements for disseminating information, establishing the opening price and initiating trading through the Nasdaq Halt Cross in a Direct Listing with a Capital Raise.
Proposed Listing Rule IM53152
Listing Rule IM53151 provides additional initial listing requirements for listing a company that has not previously had its common equity securities registered under the Act on the Nasdaq Global Select Market at the time of effectiveness of a registration statement filed solely for the purpose of allowing existing shareholders to sell their shares a Direct Listing. To 9 Following approval of this proposed rule change Nasdaq intends to file a separate proposal with the Commission that will seek to modify the process for a Direct Listing with a Capital Raise so that it would operate in a manner similar to the Initial Proposal and will seek to address the remaining issues raised in the OIP.
10 A Direct Listing with a Capital Raise includes situations where either: i Only the company itself is selling shares in the opening auction on the first day of trading; or ii the company is selling shares and selling shareholders may also sell shares in such opening auction.

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