Exchange Acquisition Company
On Oct. 11, Nasdaq issued listing rules special acquisition companies.
- Amend IM-5101-2 applicable to companies planning to complete IPO and engage
in merger, acquisition with unidentified companies within a specific period of time.
- Four Proposals
- To reduce number of round-lot holders required for initial listing from 300 to 150.
- Eliminated continued listing shareholder requirement while subject to IM-5101-2.
- Require Acquisition Company listed, to keep at least $5mn in net tangible assets.
- Deadline to demonstrate compliance all initial listing requirements, including 300,
400, and 450 round-lot shareholder on Nasdaq Capital, Global, and Global Select.
- Shareholder Requirement
- Acquisition Companies have difficulty demonstrating compliance, unique nature.
- Limits number of retail investors interested, encouraged owners to hold shares.
- Between IPO and consummation of business combination, value of Acquisition
Company is based primarily on value of the funds held in trust, trades close to.
- ETFs are similar, listing requirements are lower, only 50 required for continuing.
- That is why has proposed decreasing initial listing requirement to 150 form 300.
- Continued Listing Elimination
- Removed need to meet initial listing standards at time of business combination.
- Acquisition Company only exists briefly, hard to obtain shareholder information.
- Penny Stock Exemption
- For Acquisition Companies to keep exemption at least $5mn net tangible assets.
- Nasdaq will monitor Acquisition Companies that fail the net tangible assets test.
- To specify company must demonstrate that it meets initial listing requirements
in 30 days following business combination, until now no timetable is included.
- Upon approval by SEC, comments on aspects to be submitted by Nov. 1, 2017.
- Nov. 2017 NYSE Parallel Rules
- On Nov. 2, 2017, NYSE proposed substantial identical rule to amend its manual.
- Comments on the proposal requested, in 21 days from pending federal register.
||NYSE: NYSE-2017-053, 11/2/2017; Nasdaq: 82 FR 47269, 10/11/2017; NASDAQ-2017-087, 9/20/2017
||Compliance; Financial; Legal; Operations; Trading; Treasury
||United States of America
||Equity; ETFs; Issuance/IPO; Securities
Last substantive update on 11/05/2017