[Federal Register Volume 81, Number 125 (Wednesday, June 29, 2016)]
[Notices]
[Pages 42388-42390]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15360]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-78149; File No. SR-NASDAQ-2016-085]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Allow Listed Companies Not Currently Subject to Nasdaq's All-Inclusive
Annual Listing Fee To Opt In to That Fee Program for 2017
June 24, 2016.
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 June 10, 2016, The NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``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 allow listed companies not currently
subject to Nasdaq's all-inclusive annual listing fee to opt in to that
fee program for 2017. The changes proposed herein are effective upon
filing.
The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaq.cchwallstreet.com, at the principal office of
the Exchange, and at the Commission's Public Reference Room.
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.
[[Page 42389]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Effective January 1, 2015, Nasdaq adopted an all-inclusive annual
listing fee, which simplifies billing and provides transparency and
certainty to companies as to the annual cost of listing.\3\ This new
fee structure was designed, primarily, to address customer complaints
about the number and, in some cases, the variable nature of certain of
Nasdaq's listing fees. It also provides benefits to Nasdaq, including
eliminating the multiple invoices that were sent to a company each year
and providing more certainty as to revenue.\4\
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\3\ Securities Exchange Act Release No. 73647 (November 19,
2014), 79 FR 70232 (November 25, 2014) (SR-NASDAQ-2014-087).
\4\ Id.
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While this new fee structure will become operative for all listed
companies in 2018, listed companies were allowed to elect to be subject
to the all-inclusive annual listing fee effective January 1, 2015, and
were provided certain incentives to do so.\5\ In the second half of
2015, Nasdaq offered listed companies that did not choose to
participate in the all-inclusive annual fee program for 2015 to do so
effective January 1, 2016. The incentive offered to these companies was
similar to the one offered to companies that opted to participate in
the all-inclusive annual fee program for 2015. Companies have reacted
favorably to the new fee program and these incentives.
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\5\ See IM-5910-1(b)(1) and IM-5920-1(b)(1).
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Nasdaq now proposes to allow currently listed companies that did
not previously opt in to the all-inclusive annual fee program to do so
effective January 1, 2017. Specifically, from June 15, 2016 until
December 31, 2016, Nasdaq will allow companies to opt in to the all-
inclusive annual fee program for 2017. Any company that does so will
not be billed for the next $30,000 in fees for the listing of
additional shares otherwise payable to Nasdaq, regardless of when the
shares were issued. Fees for share issuances that were already billed
at the time the opt-in form is submitted will not be forgiven. Nasdaq
does not believe that this incentive will have an adverse impact on the
amount of funds available for its regulatory programs.
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\6\ in general, and with
Sections 6(b)(4) and (5) of the Act,\7\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees, and
other charges among its members, issuers and other persons using its
facilities, and does not unfairly discriminate between customers,
issuers, brokers, or dealers.
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\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(4) and (5).
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Nasdaq believes that the proposed incentive offered to companies
that elect the all-inclusive annual listing fee starting in 2017 is
reasonable, equitable, and not unfairly discriminatory. This incentive
is available equally to all companies. Moreover, no company is required
to opt in to the all-inclusive annual fee program under this change.
In addition, as noted above, Nasdaq will accrue benefits from
companies electing the all-inclusive annual listing fee structure.
These benefits include eliminating the multiple invoices that are sent
to a company each year and providing more certainty as to revenue. The
incentive is designed to help Nasdaq capture those benefits sooner,
which is a reasonable and non-discriminatory reason to provide the
incentive to companies.
Finally, the proposed incentive is consistent with the investor
protection objectives of Section 6(b)(5) of the Act \8\ in that it is
designed to promote just and equitable principles of trade, to remove
impediments to a free and open market and national market system, and
in general to protect investors and the public interest. Specifically,
the proposed change will not impact the resources available for
Nasdaq's listing compliance program, which helps to assure that listing
standards are properly enforced and investors are protected.
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\8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change will not result in any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act, as amended. The market for listing services is
extremely competitive and listed companies may freely choose
alternative venues based on the aggregate fees assessed, and the value
provided by each listing. As such, Nasdaq believes that this proposed
rule change does not encumber the competition for listings with other
listing venues, which are similarly free to set their fees, but rather
reflects the competition between listing venues and will further
enhance such competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or 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.\9\
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\9\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) 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.
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 email to [email protected]. Please include
File Number SR-NASDAQ-2016-085 on the subject line.
Paper Comments
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-NASDAQ-2016-085. 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 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
[[Page 42390]]
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
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 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-NASDAQ-2016-085 and should
be submitted on or before July 20, 2016.
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\10\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
Brent J. Fields,
Secretary.
[FR Doc. 2016-15360 Filed 6-28-16; 8:45 am]
BILLING CODE 8011-01-P