Voglio sapere a riguardo di…

jbell on DSKJLSW7X2PROD with NOTICES

Federal Register / Vol. 86, No. 39 / Tuesday, March 2, 2021 / Notices guarantee that a specified number of shares would be sold by the company at a price consistent with disclosure in the companys effective registration statement. This certainty would be effected in two ways. First, the proposed CDL Order would be required to be equal to the total number of shares disclosed as being offered by the company in the prospectus included in the effective registration statement filed in connection with its listing. The Nasdaq Halt Cross would only occur if all of the shares in this market order could be executed. Second, the Nasdaq Halt Cross would be required to occur at a price per share that is within the price range disclosed by the issuer in its effective registration statement. Nasdaq further believes that these proposed changes would remove impediments to and perfect the mechanism of a free and open market and a national market system because they are designed to function seamlessly with the existing process for the Nasdaq Halt Cross, including dissemination of information about the expected price.
Nasdaq believes that the CDL Order and related clarifications will clearly define the method by which the issuer participates in the opening auction, to prevent the issuer from being in a position to improperly influence the price discovery process, and to design an auction that is otherwise consistent with the disclosures in the registration statement. Specifically, the CDL Order entered on the companys behalf could not be executed at a price below the low end or above the high end of the price range in the companys effective registration statement and, as a market order, the full quantity of shares in the CDL Order would have to be executed in the opening auction. In addition, the CDL Order cannot be modified and the financial advisor to the company will be unable to reschedule the offering once it begins. As such, Nasdaq believes that the proposed process provides reasonable assurance that the opening auction and subsequent trading promote fair and orderly markets and that the proposed rules are designed to prevent manipulative acts and practices, and protect investors and the public interest in accordance with Section 6b5 of the Exchange Act.
Nasdaq believes that it is consistent with the protection of investors and the public interest to require that in the case of a Direct Listing with a Capital Raise, 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 postpone and reschedule the offering as described in Rule 4120c8A

VerDate Sep<11>2014

17:11 Mar 01, 2021

Jkt 253001

because Nasdaq would determine that the security is ready to trade when Nasdaq believes, based on the available information, that a reasonable volume of securities will cross on the initial trade to minimize the immediate price volatility following the initial pricing.
Nasdaq also believes that its ability to consult the financial advisor to the issuer is consistent with the protection of investors because the financial advisor would be expected to gather relevant information in connection with the Direct Listing with a Capital Raise by engaging in certain price discovery activities with potential buyers and sellers and such information could be shared with Nasdaq. Nasdaq believes that as part of their regular activities as full-service broker-dealer, such firms capital markets and sales and trading desk personnel may contact or be contacted by potential investors and current holders of the securities subject to the Nasdaq Halt Cross in the normal course of their activities and may, in that capacity, inform and educate interested persons regarding the company and obtain information regarding pre-listing buying and selling interest in such securities including with regard to price, volume and timing expectations, which information may also be provided to Nasdaq in order to support an effective price discovery process by Nasdaq.
Nasdaq notes that, as described above, Nasdaq will be able to postpone and reschedule the offering only if there is insufficient buy interest to satisfy the CDL Order, and all other market orders, as required by this proposed rule, or if the actual price calculated by the Cross is outside the price range established by the issuer in its effective registration statement.
Nasdaq also believes that it is consistent with the protection of investors and the public interest to remind financial advisors in a Direct Listing, including Direct Listings with a Capital Raise, that activities in connection with the listing must be conducted in a manner that is consistent with the federal securities laws, including Regulation M and other antimanipulation requirements.
Nasdaq believes that the proposed rule change to modify the fourth tiebreaker used in calculating the Current Reference Price disseminated in the Nasdaq Order Imbalance Indicator and the price at which the Nasdaq Halt Cross will occur, protects investors and the public interest. For a Direct Listing, in using the Halt Cross to initiate the initial trading in the companys securities, the Current Reference Price and price at which the Nasdaq Halt
PO 00000

Frm 00081

Fmt 4703

Sfmt 4703

12249

Cross will occur may be based on the most recent transaction price in a Private Placement Market where the security has had recent sustained trading in such a market over several months; otherwise the price will be determined by the Exchange in consultation with a financial advisor to the issuer. For an IPO, however, the fourth tie-breaker used in calculating the Current Reference Price, is the price that is closest to the Issuers Initial Public Offering Price. Because a Direct Listing with a Capital Raise is similar to an IPO in that the company sells securities in the offering, the proposed rule change provides that the forth tiebreaker in calculating the Current Reference Price for such security is the lowest price of the price range disclosed by the issuer in its effective registration statement, which is the minimum price at which the Halt Cross will occur.
Finally, while a commenter expressed concerns that that the expansion of direct listings would compound problems that shareholders face in tracing their share purchases to a registration statement,29 the Commission has previously considered and rejected these concerns.30 In that regard, the Commission has determined that investor protection concerns relating to tracing challenges are not unique to direct listings, including where the company itself would sell shares in the opening auction on the first day of trading on the Exchange in addition to, or instead of, facilitating sales by selling shareholders Primary Direct Floor Listing, and stated that it did not expect any such tracing challenges in this context to be of such magnitude as to render the proposal inconsistent with the Act. 31 On the other hand, the Commission found that allowing a Primary Direct Floor Listing will provide benefits to existing and potential investors relative to firm 29 See Letter from Jeffrey P. Mahoney, General Counsel, Council of Institutional Investors to Secretary, Securities and Exchange Commission October 8, 2020, available at https www.sec.gov/
comments/sr-nasdaq-2020-057/srnasdaq20200577888884-224228.pdf. See also Letter from Jeffrey P.
Mahoney, General Counsel, Council of Institutional Investors to Secretary, Securities and Exchange Commission January 13, 2021, available at https
www.sec.gov/comments/sr-nasdaq-2020-057/
srnasdaq2020057-8241868-227781.pdf.
30 Securities Exchange Act Release No. 89684
August 26, 2020, 85 FR 54454 September 1, 2020
approval by delegated authority of SRNYSE
201967. On December 22, 2020, the Commission issued an order setting aside the action by delegated authority and approving the proposed rule change.
Securities Exchange Act Release No. 90768
December 22, 2020, 85 FR 85807 December 29, 2020 the NYSE Approval.
31 NYSE Approval at 85816.

E:FRFM02MRN1.SGM

02MRN1