[Federal Register Volume 76, Number 144 (Wednesday, July 27, 2011)]
[Notices]
[Pages 44974-44976]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-18925]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64940; File No. SR-BX-2011-036]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Increase
the Application and Annual Fees for the BX Venture Market
July 21, 2011.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 14, 2011, NASDAQ OMX BX, Inc. (``Exchange'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I, II, and III below, which Items have
been prepared by the Exchange. 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\ 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 application and annual fees
payable by a company listing on the BX Venture Market. The Exchange
will implement the proposed rule immediately.
The text of the proposed rule change is below. Proposed new
language is in italics; proposed deletions are in brackets.\3\
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\3\ Changes are marked to the rule text that appears in the
electronic manual of Nasdaq found at http://nasdaqomxbx.cchwallstreet.com.
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5910. Listing Fees
(a) Application Fee
A Company that submits an application to list any class of its
securities on the Exchange, shall pay to the Exchange a non-refundable
application fee of [$7,500] $10,000, which must be submitted with the
Company's application. However, if a Company is listed on another
national securities exchange and has received notice that it is subject
to being delisted from that exchange for failure to comply with a
quantitative listing requirement, the application fee does not have to
be paid to the Exchange until the other exchange issues a final
decision to delist the Company's securities or the Company is listed on
the Exchange, whichever occurs first.
(b) Annual Fee
(1) Each issuer shall pay an annual fee of [$15,000] $20,000 for
the first class of securities listed on the Exchange and $5,000 for
each additional class of securities listed on the Exchange.
(2)-(4) No change.
(c)-(d) No change.
* * * * *
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 Exchange 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 these 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 aspects 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 recently received approval for the BX Venture Market,
a new listing venue for the Exchange. Under the approved rules, a
company that submits an application to list any class of its securities
on the BX Venture Market must pay a non-refundable application fee of
$7,500 \4\ and a listed company must pay an annual fee of $15,000 for
the first class of securities listed on the BX Venture Market and
$5,000 for each additional listed class of securities.\5\
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\4\ Exchange Rule 5910(a).
\5\ Exchange Rule 5910(b).
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The listing fees for the BX Venture Market were originally proposed
in August 2010.\6\ Following that original proposal, and in connection
with seeking approval for the BX Venture Market, the Exchange committed
to substantial enhancements to its regulatory process.\7\ Among these
enhancements are rules requiring the Exchange to engage independent
qualified third party investigative firms to assist in its public
interest review process in specified situations and on a random
basis.\8\ The Exchange may also
[[Page 44975]]
engage independent qualified third party investigative firms in
reviewing listed companies in certain situations, including where there
may be potential public interest concerns.\9\ The Exchange has also
committed to enhanced surveillance of the trading of listed securities,
including by FINRA and through the use of technology by the SMARTS
Group.
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\6\ Securities Exchange Act Release No. 62818 (September 1,
2010), 75 FR 54665 (September 8, 2010) (proposing SR-BX-2010-059).
\7\ Securities Exchange Act Release No. 64437 (May 6, 2011), 76
FR 27710 (May 12, 2011) (approving SR-BX-2010-059 as amended).
\8\ Exchange Rule 5205(d).
\9\ Exchange Rule 5205(e).
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These enhancements were not envisioned when the Exchange originally
proposed the fees for the BX Venture Market and the fees were not
previously adjusted in response to these changes. As such, the Exchange
now proposes to increase the application fee for the BX Venture Market
from $7,500 to $10,000 and the annual fees for the first class of
securities from $15,000 to $20,000.
The Exchange notes that the proposed fees remain substantially
lower than the fees for other markets. For example, the initial listing
fees for listing common stock on the NASDAQ Capital Market range from
$50,000 to $75,000 and the annual fees are $27,500; \10\ the initial
listing fees for listing common stock on NYSE Amex range from $50,000
to $70,000 and the annual fees range from $27,500 to $40,000; \11\ and
the initial listing fees for listing common stock on the New York Stock
Exchange range from $125,000 to $250,000 and the annual fees range from
$38,000 to $500,000.\12\
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\10\ Nasdaq Rule 5920(a)(1) and (c)(1)(A).
\11\ NYSE Amex Listed Company Guide Sections 140 and 141.
\12\ NYSE Listed Company Manual 902.03
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In addition, the fees remain comparable to those charged by OTC
Markets Group for companies to appear on its OTCQX tier. While OTC
Markets Group does not operate a national securities exchange, and does
not undertake a regulatory review similar to that required by the
Exchange's rules, it claims to have ``listings'' \13\ and charges a
$5,000 application fee and $15,000 annual fee for marketplace services
that it describes as ``formerly available only on a U.S. exchange.''
\14\
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\13\ http://www.otcqx.com/qx/otcqx/listing (June 15, 2011).
\14\ http://www.otcqx.com/qx/otcqx/overview (June 15, 2011).
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6 of the Act,\15\ in general, and with Section 6(b)(4) of the
Act,\16\ in particular, in that it provides for the equitable
allocation of reasonable dues, fees and other charges among members and
issuers and other persons using any facility or system which the
Exchange operates or controls. The proposed rule change, which
increases the application and annual fees to listed companies, proposes
a reasonable allocation of the Exchange's costs, as it will allow the
Exchange to recoup the costs of the additional regulatory steps the
Exchange has agreed to in connection with the BX Venture Market.
Moreover, the fees remain substantially lower than fees on other
national securities exchanges, and comparable to the fees for
OTCQX.\17\ In addition, the Exchange believes that the fees are
equitable, insomuch as they are charged to all companies that chose to
apply and list on the BX Venture Market; and reasonable, insomuch as
these companies will receive the benefits commensurate with a listing
on a national securities exchange, including heightened regulatory
oversight.
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\15\ 15 U.S.C. 78f.
\16\ 15 U.S.C. 78f(b)(4).
\17\ The Exchange notes that the fees charged by OTCQX have not
been filed with the Commission.
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The Exchange also believes that the proposed rule change is
consistent with the provisions of Section 6(b)(5) of the Act \18\
because it is designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, and to remove impediments to and perfect
the mechanism of a free and open market and a national market system.
As noted above, the Exchange believes the proposed fee increases will
help allow it to recoup the costs of performing its regulatory
responsibilities. As such, the Exchange believes that the proposed rule
change promotes just and equitable principles of trade and removes
impediments to the mechanism of a free and open market and a national
market system.
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\18\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as amended.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\19\ At any time within 60 days of the
filing of the 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 to determine whether the
proposed rule should be approved or disapproved.
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\19\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-BX-2011-036 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-BX-2011-036. This file
number should be included on the subject line if e-mail 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 Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
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printing in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-BX-2011-036 and should be
submitted on or before August 17, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-18925 Filed 7-26-11; 8:45 am]
BILLING CODE 8011-01-P