Exchange Acquisition Company


On Oct. 11, Nasdaq rule on special acquisition company listing.


  • Amend IM-5101-2 applicable to companies planning to complete IPO and engage
    in merger, acquisition with unidentified companies within 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 to demonstrate compliance, unique nature.
  • Limited number of retail investors interested, encouraged owners to hold shares.
  • Between IPO and consummation of business combination, value of an acquisition
    company is based primarily on value of the funds held in trust, or trades close to.
  • ETFs are similar, with lower listing requirements, only 50 required for continuing.
  • Explained proposal for a reduction in initial listing requirements, to 150 form 300.
  • Continued Listing Elimination
  • Removal of need to meet initial listing standards at time of business combination.
  • Acquisition company only exists briefly, so hard to obtain shareholder information.
  • Penny Stock Exemption
  • For Acquisition Companies to keep exemption at least $5mn in net tangible assets.
  • Nasdaq will monitor Acquisition Companies which fail their net tangible assets test.
  • Deadline
  • Specified that company must demonstrate that it meets initial listing requirements
    in 30 days, following the business combination, until now no timetable is included.
  • Effectiveness
  • Upon approval by SEC, comments on aspects are to be submitted by Nov. 1, 2017.
  • Nov. 2017 NYSE Parallel Rules
  • On Nov. 2, 2017, NYSE proposed a substantially identical rule to amend its manual.
  • Comments on the proposal requested due in 21 days from pending federal register.
  • Nov. 2017 SEC Nasdaq Filing,
  • On Nov. 22, 2017, SEC filed for a longer period for action, ending January 9, 2018.
  • Nov. 2017 Nasdaq Federal Register
  • On Nov. 28, 2017, SEC published for longer period for action in the federal register.
  • Nov. 2017 SEC NYSE Filing
  • On Nov. 30, 2017, SEC filed proposed rule, comment 21 days from federal register.
  • Dec. 2017 NYSE Federal Register
  • On Dec. 6, 2017, NYSE proposal issued in federal register, comment Dec. 27, 2017.
  • Jan. 2018 Determine if to Approve
  • On Jan. 9, 2018, SEC issued order to determine if to approve, for 21 day comment.
  • SEC cited legal and policy issues raised, importance of minimum number of holders.
  • Ensure listed companies have sufficient public float, investor base, trading interest.
  • Jan. 2018 Federal Register
  • On Jan. 16, 2018, SEC order published in federal register, comment by Feb. 6, 2018.
  • Jan. 2018 Extension Period
  • On Jan. 18, 2018 SEC designated a longer period to take action, until Mar. 6, 2018.
  • Mar. 2018 SEC Determination
  • On Mar. 5, 2018, SEC order to determine whether to approve or disapprove NYSE.
  • Comment in 21 days after federal register, with rebuttal comments due in 35 days.
  • Mar. 2018 Federal Register
  • On Mar. 9, 2018, SEC order on if to approve, in federal register, comment Mar. 30.
  • Apr. 2018 SEC Extension
  • On Apr. 6, 2018, SEC extended the period for action, from Apr. 9, to Jun. 8, 2018.
  • April 2018 Fed Reg Extension
  • On Apr. 12, 2018, SEC extended comment period to Jun. 8, in the federal register.
  • Jun. 1, 2018 SEC Extension
  • On Jun. 1, 2018, SEC extended period for action, from Jun. 8, to August 3, 2018.
  • Jun. 6, 2018 Fed Reg Extension
  • On Jun. 6, 2018, SEC federal register, extended period of action to Aug. 3, 2018.
  • Jun. 2018 Withdrawal
  • On Jun. 05, 2018 NASDAQ issued notice of withdrawal for proposed rule change.
  • Jun. 2018 Fed Reg Withdrawal
  • On Jun. 11, 2018, NASDAQ withdrawal of the notice, published in federal register.

Regulators NASDAQ; NYSE
Entity Types B/D; Exch
Reference 83 FR 27055, 6/11/2018; 83 FR 26331, 6/6/2018; 83 FR 15880, 4/12/2018; 83 FR 10530, 3/9/2018; SEC RF, 3/5/2018; SEC RF, 1/18/2018; 83 FR 2278, 1/16/2018; SEC RF, 1/9/2018; NYSE: 82 FR 57632, 12/6/2017; SEC RF, 11/30/2017; NYSE-2017-53, 11/2/2017; Nasdaq: 82 FR 56293, 11/28/2017; SEC RF, 11/22/2017; 82 FR 47269, 10/11/2017; NASDAQ-2017-087, 9/20/2017; 4/6/2018; 17 CFR 240.19b-4; 6/1/2018;
Functions Compliance; Financial; Legal; Operations; Trading; Treasury
Countries United States of America
Products Equity; ETFs; Issuance/IPO; Securities
Regions Am
Rule Type Proposed
Rule Date 10/11/2017
Effective Date 6/11/2018
Rule Id 35446
Linked to N/A
Report Issue 6/15/2018
Report Section US Investment

Last substantive update on 06/11/2018