Rule 425 60 Day Federal Register Notice

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Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–462, OMB Control No.
3235–0521]

lotter on DSK11XQN23PROD with NOTICES1

Proposed Collection; Comment
Request; Extension: Rule 425
Upon Written Request Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Notice is hereby given, that pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
Rule 425 (17 CFR 230.425) under the
Securities Act of 1933 (15 U.S.C. 77a et
seq.) requires the filing of certain
prospectuses and communications
under Rule 135 (17 CFR 230.135) and
Rule 165 (17 CFR 230.165) in
connection with business combination
transactions. The purpose of the rule is
to permit more oral and written
communications with shareholders
about tender offers, mergers and other
business combination transactions on a
more timely basis, so long as the written
communications are filed on the date of
first use. Approximately 5,370 issuers
file communications under Rule 425 at
an estimated 0.25 hours per response for
a total 1,343 annual burden hours (0.25
hours per response × 5,370 responses).
Written comments are invited on: (a)
whether this proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information will have practical utility;
(b) the accuracy of the agency’s estimate
of the burden imposed by the collection
of information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
techniques or other forms of information
technology. Consideration will be given
to comments and suggestions submitted
in writing within 60 days of this
publication by December 4, 2023.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information

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unless it displays a currently valid
control number.
Please direct your written comment to
David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington,
DC 20549 or send an email to: PRA_
[email protected].
Dated: September 28, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–21927 Filed 10–3–23; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98659; File No. SR–
NASDAQ–2023–022]

Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Order
Instituting Proceedings To Determine
Whether To Approve or Disapprove a
Proposed Rule Change To Create a
New, Non-Trading Limited Underwriter
Membership Class and Impose Related
Requirements for Principal
Underwriting Activity
September 29, 2023.

I. Introduction
On July 12, 2023, The Nasdaq Stock
Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to create a new, non-trading
limited underwriter membership class
and impose related requirements for
principal underwriting activity in
connection with a company applying for
initial listing on the exchange with a
transaction involving an underwriter.
The proposed rule change was
published for comment in the Federal
Register on July 31, 2023.3 On
September 12, 2023, pursuant to Section
19(b)(2) of the Exchange Act,4 the
Commission designated a longer period
within which to approve the proposed
rule change, disapprove the proposed
rule change, or institute proceedings to
determine whether to disapprove the
1 15

U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 97985
(July 25, 2023), 88 FR 49508 (July 31, 2023)
(‘‘Notice’’).
4 15 U.S.C. 78s(b)(2).
2 17

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proposed rule change.5 The Commission
has received no comment letters on the
proposed rule change. The Commission
is instituting proceedings pursuant to
Section 19(b)(2)(B) of the Act 6 to
determine whether to approve or
disapprove the proposed rule change.
II. Description of the Proposed Rule
Change
Nasdaq states in its proposal that it
recently issued an Equity Regulatory
Alert 7 that highlighted the important
role of underwriters as gatekeepers in
the initial public offerings (‘‘IPO’’)
process and the applicability of market
rules and the federal securities laws.8
Nasdaq states that notwithstanding the
important role of underwriters, the
Exchange does not currently require
underwriters of companies that are
going pubic on the Exchange to be
Exchange members.9
Nasdaq therefore is proposing to
amend its rules to create a new, limited
membership class for those
underwriters seeking only to perform
underwriting activity as the principal
underwriter on the Exchange 10 (and not
seeking access to trade via the Nasdaq
Market Center) and to require a
company applying for initial listing in
connection with a transaction involving
an underwriter to have a principal
5 See Securities Exchange Act Release No. 99366,
88 FR 63999 (September 18, 2023). The
Commission designated October 29, 2023, as the
date by which the Commission shall approve or
disapprove, or institute proceedings to determine
whether to approve or disapprove, the proposed
rule change.
6 15 U.S.C. 78s(b)(2)(B).
7 https://www.nasdaqtrader.com/MicroNews.
aspx?id=ERA2022-9.
8 Nasdaq also described that it had observed
instances in the Fall of 2022 of unusually high price
spikes immediately following the pricing of certain
IPOs on the Exchange, mostly with respect to smallcap companies whose offerings were less than $25
million. The IPOs that were the subject of these
extreme price spikes then experienced equally
dramatic price declines to a level at or below the
offering price. See Notice, supra note 3, 88 FR at
49509.
9 See Nasdaq General Rules, General 1, Section
1(b)(11) for the definition of ‘‘member’’ or ‘‘Nasdaq
Member’’.
10 Under the proposal ‘‘Principal underwriter’’ is
defined as having the same definition used in Rule
405 promulgated under the Securities Act of 1933
(‘‘Securities Act’’). Rule 405 under the Securities
Act states that the term principal underwriter
means an underwriter in privity of contract with the
issuer of the securities as to which he is
underwriter. Such definition provides that the term
‘‘issuer’’ in the definition of ‘‘principal
underwriter’’ has the meaning given in Sections
2(4) and 2(11) of the Securities Act. 17 CFR
230.405.

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