Notice2026-02805
Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change Proposes To Modify the Definition of “Reverse Merger” Set Forth in Section 101(e) of the NYSE American Company Guide
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Published
February 12, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 29 (Thursday, February 12, 2026)</title>
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[Federal Register Volume 91, Number 29 (Thursday, February 12, 2026)]
[Notices]
[Pages 6704-6707]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-02805]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104790; File No. SR-NYSEAMER-2026-06]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Change Proposes To
Modify the Definition of ``Reverse Merger'' Set Forth in Section 101(e)
of the NYSE American Company Guide
February 9, 2026.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on January 30, 2026, NYSE American LLC (``NYSE American'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to modify the definition of ``Reverse
Merger'' set forth in Section 101(e) of the NYSE American Company Guide
(``Company Guide''). The proposed rule change is available on the
Exchange's website at <a href="http://www.nyse.com">www.nyse.com</a>, at the principal office of the
Exchange.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
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 those 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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is proposing to modify the definition of a ``Reverse
Merger'' in Section 101(e) of the Company Guide \4\ to exclude the
securities of a special purpose acquisition company, as that term is
defined in Item 1601(b) of Regulation S-K (``SPAC''),\5\ which was
previously listed on a national securities exchange, and is listing in
connection with a de-SPAC transaction, as that term is defined in Item
1601(a) of Regulation S-K (``de-SPAC transaction''), in connection with
an effective 1933 Securities Act registration statement (``Registration
Statement''). The effect of these changes will be to treat a de-SPAC
transaction by such SPAC trading in the over-the-counter (``OTC'')
market in the same way as a de-SPAC transaction with a listed SPAC and,
in each case, subject these transactions to the same rules applicable
to an initial public offering.\6\
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\4\ Section 101(e) defines a ``Reverse Merger'' as ``any
transaction whereby an operating company becomes an Exchange Act
reporting company by combining directly or indirectly with a shell
company which is an Exchange Act reporting company, whether through
a reverse merger, exchange offer, or otherwise.'' However, the
definition currently excludes from being a Reverse Merger ``the
acquisition of an operating company by a listed company which
qualified for initial listing under Section 119.''
\5\ The term special purpose acquisition company (SPAC) means a
company that has:
(1) Indicated that its business plan is to:
(i) Conduct a primary offering of securities that is not subject
to the requirements of Sec. 230.419 of this chapter (Rule 419 under
the Securities Act);
(ii) Complete a business combination, such as a merger,
consolidation, exchange of securities, acquisition of assets,
reorganization, or similar transaction, with one or more target
companies within a specified time frame; and
(iii) Return proceeds from the offering and any concurrent
offering (if such offering or concurrent offering intends to raise
proceeds) to its security holders if the company does not complete a
business combination, such as a merger, consolidation, exchange of
securities, acquisition of assets, reorganization, or similar
transaction, with one or more target companies within the specified
time frame; or
(2) Represented that it pursues or will pursue a special purpose
acquisition company strategy. 17 CFR 229.1601.
\6\ An OTC SPAC can also structure its de-SPAC transaction such
that the operating company, and not the SPAC, is the surviving
entity. In a transaction structured in this manner, the de-SPAC
transaction would not be subject to the Reverse Merger Requirement
because the listing applicant is a new registrant and not the OTC
traded entity. The proposed rule change will therefore also align
the treatment of these various structures.
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[[Page 6705]]
Reverse Merger Rule
Under Section 101(e), a security issued by a company formed by a
Reverse Merger is eligible for initial listing only if it satisfies
additional listing conditions, including, among other requirements,
that the combined entity has, immediately preceding the filing of the
initial listing application:
(i) traded for at least one year in the U.S. over-the-counter
market, on another national securities exchange or on a regulated
foreign exchange following the consummation of the Reverse Merger and
(i) in the case of a domestic issuer, has filed with the Commission a
Form 8-K containing all of the information required by Item 2.01(f) of
Form 8-K, including all required audited financial statements, after
the consummation of the Reverse Merger, or (ii) in the case of a
foreign private issuer, has filed all of the information described in
(i) above on Form 20-F;
(ii) maintained a closing stock price equal to the stock price
requirement applicable to the initial listing standard under which the
Reverse Merger Company is qualifying to list for a sustained period of
time, but in no event for less than 30 of the most recent 60 trading
days prior to the filing of the initial listing application; and
(iii) filed with the Commission all required reports since the
consummation of the Reverse Merger, including the filing of at least
one annual report containing all required audited financial statements
for a full fiscal year commencing on a date after the date of filing
with the Commission of the filing described in (i) above (the
requirements set forth in (i)-(iii) are referred to as the ``Reverse
Merger Requirement'').
Section 101(e) defines a ``Reverse Merger'' as a transaction
whereby an operating company becomes an Exchange Act reporting company
by combining with a shell company. While a SPAC is a shell company, the
rule specifically excludes from the definition of a Reverse Merger the
acquisition of an operating company by a company qualified for listing
under the Exchange's listing standard for SPACs set forth in Section
119 of the Company Guide.
The Reverse Merger rule also provides an exception for a company
that lists in connection with a firm commitment underwritten public
offering where the gross proceeds to the company will be at least $40
million. The Reverse Merger Requirement was designed to prevent an
operating company from becoming an Exchange Act reporting company in a
so-called ``backdoor registration'' \7\ and immediately accessing
public markets without any of the vetting from investors and/or
underwriters that companies typically undergo when they perform a
traditional IPO. Moreover, in these transactions, the newly public
company typically is not required to file a 1933 Act registration
statement, which is subject to SEC Staff review.
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\7\ See former Commissioner Aguilar speech: Facilitating Real
Capital Formation, citing release No. 33-8587, (July 15, 2005) [70
FR 42233] (stating that ``These transactions generally take one of
two forms: In the most common type of transaction, a ``reverse
merger,'' the private business merges into the shell company, with
the shell company surviving and the former shareholders of the
private business controlling the surviving entity. In another common
type of transaction, a ``back door registration,'' the shell company
merges into the formerly private company, with the formerly private
company surviving and the shareholders of the shell company becoming
shareholders of the surviving entity.'').
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The Commission recently adopted new rules to align the legal
obligations of companies in de-SPAC transactions with those in
traditional IPOs and mandated additional disclosures for both SPAC IPOs
and de-SPAC transactions (the ``SPAC Release'').\8\ In the SPAC Release
the Commission explained that ``[w]hile structured as an M&A
transaction, the de-SPAC transaction also is the functional equivalent
of the private target company's IPO, because it results in the target
company becoming part of a combined company that is a reporting company
and provides the private target company with access to cash proceeds
that the SPAC had previously raised from the public.'' \9\
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\8\ Securities Exchange Act Release No. 99418 (January 24,
2024), 89 FR 14158 (February 26, 2024). In the SPAC Release the
Commission also adopted a definition for a ``de-SPAC transaction''
that the Exchange Staff proposes to utilize. See 17 CFR 229.1601
(Item 1601 of Regulation S-K): ``The term de-SPAC transaction means
a business combination, such as a merger, consolidation, exchange of
securities, acquisition of assets, reorganization, or similar
transaction, involving a special purpose acquisition company and one
or more target companies (contemporaneously, in the case of more
than one target company).''
\9\ SPAC Release at 14160.
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As described above, Section 101(e) already excludes a de-SPAC
transaction by a currently listed SPAC from the definition of a Reverse
Merger, as do the comparable rules of other exchanges.\10\ This
exception was premised on the fact that the Exchange initially listed
the SPAC knowing it would seek to conduct a de-SPAC transaction, and
investors invested with that knowledge and with the benefit of the
additional disclosure and redemption possibilities that come at the
time of the de-SPAC transaction, and so it would be inconsistent to
require the company to delist and trade in the OTC market at the time
it completes the very transaction it was formed to pursue. The Exchange
believes that modifying this definition to also exclude other de-SPAC
transactions, involving SPACs which were previously listed on a
national securities exchange, from the rule is similarly reasonable
where the de-SPAC is listing in connection with an effective
Registration Statement. The Commission treats a de-SPAC transaction as
the functional equivalent of an IPO; \11\ and given the proposed
requirement that a de-SPAC transaction occurs in connection with an
effective Registration Statement, such transaction is subject to a
level of investor protection, rigorous disclosure requirements, and SEC
review similar to that of an IPO. Accordingly, prior to the closing of
the de-SPAC transaction, SPAC shareholders will have an opportunity to
review an effective Registration Statement which would allow them to
make an informed decision whether to remain a shareholder of the
surviving company after the business combination or redeem their shares
prior to the de-SPAC transaction. Similarly, a company conducting a
firm commitment underwritten offering is also currently excluded from
the Reverse Merger rules, because such an offering involves an
underwriter and requires a Registration Statement, which includes
issuer disclosure and can be reviewed by the Commission. Thus, the
Exchange believes that regardless of where the SPAC is trading, a
company listing on the Exchange in connection with a de-SPAC
transaction involving a SPAC, which was previously listed on a national
securities exchange and provides its public shareholders the
opportunity to redeem or tender their shares in connection with the de-
SPAC transaction in exchange for a pro rata share of the IPO proceeds
and concurrent sale by the company of equity securities; in connection
with an effective Registration Statement should be excluded from the
Reverse Merger Requirement.\12\
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\10\ See e.g., NYSE Listed Company Manual Section 102.01F
(``However, a Reverse Merger does not include the acquisition of an
operating company by a listed company which qualified for initial
listing as an acquisition company under Section 102.06.'').
\11\ See footnote 8 above.
\12\ Following its IPO, a SPAC places all or substantially all
of the IPO proceeds into a trust or escrow account. The SPAC
typically registers its shares and warrants under Section 12(b) of
the Securities Exchange Act of 1934 and lists the units (typically
consisting of a common share and a fraction of a warrant) for
trading on a national securities exchange. Next, the SPAC seeks to
identify a target company for a de-SPAC transaction within the time
frame specified in its governing documents. If the SPAC does not
complete a de-SPAC transaction within that time frame, it may seek
an extension (often requiring approval from its shareholders) or
dissolve and liquidate. SPAC shareholders typically also have a
redemption right in connection with any votes to extend the duration
of the SPAC. The Exchange generally expects that an OTC trading
SPAC, which was previously listed on a national securities exchange,
will retain the investor protection features it had at the time of
its IPO, including providing its public shareholders the opportunity
to redeem or tender their shares in connection with the de-SPAC
transaction in exchange for a pro rata share of the IPO proceeds and
concurrent sale by the company of equity securities. See e.g.,
Section 119 of the Company Guide. (``At least 90% of the gross
proceeds from the initial public offering and any concurrent sale by
the company of equity securities must be deposited in a trust
account . . .'')
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[[Page 6706]]
To effect this change, the Exchange proposes to modify Section
102(e) to revise the existing de-SPAC exclusion from the definition of
a Reverse Merger to exclude any de-SPAC transaction, as that term is
defined in Item 1601(a) of Regulation S-K, involving a SPAC, which is
listed or was previously listed on a national securities exchange and
provides its public shareholders the opportunity to redeem or tender
their shares in connection with the de-SPAC transaction in exchange for
a pro rata share of the IPO proceeds and concurrent sale by the company
of equity securities; where the company is listing in connection with
an effective Registration Statement.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\13\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \14\ in particular, in that it
is designed to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest,
by excluding the securities of certain OTC-trading SPACs listing in
connection with a de-SPAC transaction in connection with an
Registration Statement, as described above, from the definition of a
Reverse Merger. Based on the unique characteristics of a de-SPAC
transaction, the proposed change will align the requirements for
listing a de-SPAC transaction with those for listing an IPO, consistent
with the treatment by the Commission in other contexts, eliminating an
impediment to a free and open market, while ensuring adequate
distribution, shareholder interest, a liquid trading market and
investor protections through other listing standards.
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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that excluding a de-SPAC transaction by an
OTC-trading SPAC, which is listed or was previously listed on a
national securities exchange and provides its public shareholders the
opportunity to redeem or tender their shares in connection with the de-
SPAC transaction in exchange for a pro rata share of the IPO proceeds
and concurrent sale by the company of equity securities; from the
Reverse Merger definition avoids imposing an unnecessary impediment to
the mechanism of a free and open market and is not unfairly
discriminatory. Specifically, as noted above, the Reverse Merger
Requirement was designed to prevent an operating company from becoming
an Exchange Act reporting company and immediately accessing public
markets without proper disclosure and vetting opportunities by the
Commission and investors. The Exchange believes that a de-SPAC
transaction with such OTC-trading SPAC where the post-transaction
entity lists in connection with an effective Registration Statement
does not present the same concerns as a typical Reverse Merger
transaction. The Commission in the SPAC Release explained that
``[w]hile structured as an M&A transaction, the de-SPAC transaction
also is the functional equivalent of the private target company's IPO,
because it results in the target company becoming part of a combined
company that is a reporting company and provides the private target
company with access to cash proceeds that the SPAC had previously
raised from the public.'' Unlike the historical ``backdoor
registrations'' that the Reverse Merger rule was designed to capture, a
de-SPAC transaction would be required to file a 1933 Act registration
statement to avail itself of the proposed rule change.
The Exchange believes that excluding a de-SPAC transaction by such
OTC-trading SPACs from the definition of a Reverse Merger is reasonable
because it aligns the treatment of such transactions with the treatment
of a de-SPAC transaction by an Exchange-listed SPAC because both cases
represent the functional equivalent of an IPO, as the Commission
explained in the SPAC Release, and, therefore, these cases differ from
a typical Reverse Merger where a public shell merges into a private
company, in a so-called ``backdoor registration'' \15\ without a
Registration Statement which is subject to review by Commission
staff.\16\
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\15\ See footnote 6 above.
\16\ The Exchange notes that a de-SPAC transaction where the
SPAC is not the surviving entity is not subject to the Reverse
Merger Requirement because the entity to be listed is a new
registrant, and, therefore a de-SPAC transaction can already be
structured so as not to implicate the Reverse Merger Requirement.
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The proposed requirement that a de-SPAC transaction by a previously
listed OTC-trading SPAC, as described above, or a listed SPAC, is
excluded from the definition of Reverse Merger only where the Company
is listing in connection with an effective Registration Statement is
designed to protect investors and the public interest, because it will
ensure such companies satisfy the rigorous disclosure requirements
under the Securities Act of 1933 and are subject to review by
Commission staff. In addition, as noted above, SPACs that are listed or
were previously listed on a national securities exchange, generally
have established certain investor protection safeguards. Accordingly,
prior to the closing of the de-SPAC transaction, SPAC shareholders will
have an opportunity to review an effective Registration Statement
allowing them to make an informed decision whether to remain a
shareholder of the surviving company after the business combination or
redeem their shares prior to the de-SPAC transaction.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposed rule changes are
designed to avoid imposing an unnecessary impediment to the mechanism
of a free and open market and does not limit the ability of companies
to list on any other national securities exchange. Furthermore, while
the rule change may permit more companies to list on the Exchange in
connection with de-SPAC transactions, Nasdaq has already adopted a
similar rule \17\ and other exchanges could adopt similar rules to
compete for such listings. In addition, the proposed rule change could
help facilitate competition amongst OTC-trading SPACs with other SPACs.
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\17\ See Securities Exchange Act Release No. 104344 (December 8,
2025) (SR-NASDAQ-2025-066), 90 FR 57510 (December 11, 2025).
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[[Page 6707]]
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \18\ and Rule 19b-4(f)(6) thereunder.\19\
Because the proposed rule change does not: (i) significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \20\ and Rule 19b-
4(f)(6)(iii) thereunder.\21\
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\18\ 15 U.S.C. 78s(b)(3)(A)(iii).
\19\ 17 CFR 240.19b-4(f)(6).
\20\ 15 U.S.C. 78s(b)(3)(A)(iii)
\21\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \22\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\23\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.
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\22\ 17 CFR 240.19b-4(f)(6).
\23\ 17 CFR 240.19b-4(f)(6)(iii).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \24\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\24\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#1361667f763e707c7e7e767d6760536076703d747c65"><span class="__cf_email__" data-cfemail="2c5e594049014f4341414942585f6c5f494f024b435a">[email protected]</span></a>. Please include
file number SR-NYSEAMER-2026-06 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-NYSEAMER-2026-06. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing will be available for inspection and
copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to file number SR-NYSEAMER-2026-06 and should be submitted
on or before March 5, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
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\25\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-02805 Filed 2-11-26; 8:45 am]
BILLING CODE 8011-01-P
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