[Federal Register: October 28, 2004 (Volume 69, Number 208)]
[Notices]
[Page 62926-62928]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28oc04-99]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-50577; File No. SR-NASD-2004-128]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing of Proposed Rule Change To Modify the
Annual Fee for Certain Issuers Listed on the Nasdaq Stock Market, Inc.
October 21, 2004.
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 August 25, 2004, the National Association of Securities Dealers,
Inc. (``NASD''), through its subsidiary, The Nasdaq Stock Market, Inc.
(``Nasdaq''), filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by Nasdaq.
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 the
Substance of the Proposed Rule Change
Nasdaq proposes to amend NASD Rules 4510(c) and 4520(c) to modify
the annual fee for domestic and foreign issuers (other than American
Depositary Receipts (``ADRs'')) listed on the Nasdaq National Market
and for all issuers listed on The Nasdaq SmallCap Market. Nasdaq will
implement the proposed rule change on January 1, 2005, for issuers
listed on Nasdaq as of the date of approval of this rule filing, and
upon approval for all new listings after the date of approval of this
rule filing. In addition, Nasdaq proposes to adopt new IM-4520-1 to
clarify that no fees are due from issuers described in Rule 4320(c).
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 NASD Manual found at http://www.nasd.com, which was current as
of the date of this filing. No pending rule filings would affect
Rule 4510(c) and 4520(c). Telephone conversation between Arnold
Golub, Office of General Counsel, Amex, and Richard Holley,
Attorney, Division of Market Regulation, Commission, dated October
14, 2004.
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* * * * *
4510. The Nasdaq National Market
(a)-(b) No change.
(c) Annual Fee--Domestic and Foreign Issues.
(1) The issuer of each class of securities, other than an ADR, that
is a domestic or foreign issue listed in The Nasdaq National Market
shall pay to The Nasdaq Stock Market, Inc. an annual fee calculated on
total shares outstanding according to the following schedule:
Up to 10 million shares [$21,225] $24,500
10+ to 25 million shares [$26,500] $30,500
25+ to 50 million shares [$29,820] $34,500
50+ to 75 million shares [$39,150] $44,500
75+ to 100 million shares [$51,750] $61,750
Over 100 million shares [$60,000] $75,000
(2)-(4) No change.
(d)-(e) No change.
* * * * *
4520. The Nasdaq SmallCap Market
(a)-(b) No change.
(c) Annual Fee
(1) The issuer of [a] each class of securities that is a domestic
or foreign issue, including American Depositary Receipts (ADRs), listed
in The Nasdaq SmallCap Market shall pay to The Nasdaq Stock Market,
Inc. an annual fee [to be computed as follows:] calculated on total
shares outstanding according to the following schedule:
Up to 10 million shares $17,500
Over 10 million shares $21,000
[(A) 15,000 for the first issue if it has total shares outstanding
of up to 10 million shares; or
(B) $16,000 for the first issue if it has total shares outstanding
of 10 million or more shares; plus
(C) $2,000 for each additional issue.
(D) For companies with more than one issue, the first issue is the
company's common stock or common stock equivalent with the highest
total shares outstanding. For companies with no common stock or common
stock equivalent, the first issue is the issue with the highest total
shares outstanding.]
(2)-(4) No change.
(5) Total shares outstanding means the aggregate of all classes of
equity securities included in The Nasdaq SmallCap Market as shown in
the issuer's most recent periodic report required to be filed with the
issuer's appropriate regulatory authority or in more recent information
held by Nasdaq. In the case of foreign issuers, total shares
outstanding shall include only those shares issued and outstanding in
the United States.
[[Page 62927]]
(d) No change.
* * * * *
IM-4520-1. Foreign Exempt Securities
Rules 4520(b)(4) and 4520(c)(3) provide Nasdaq with the discretion
to waive all or part of the additional share and annual listing fees
otherwise due. Pursuant to that authority, Nasdaq has determined to
waive any additional share or annual fee that otherwise would be due
from any issuer described in Rule 4320(c).
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, Nasdaq 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. Nasdaq 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
Nasdaq is proposing to modify the annual fees for domestic and
foreign issuers (other than ADRs) listed on the Nasdaq National Market
and for all issuers listed on The Nasdaq SmallCap Market. Pursuant to
the rule change, annual fees on the Nasdaq National Market would
increase from a minimum of $21,225 and a maximum of $60,000 to a
minimum of $24,500 and a maximum of $75,000. Annual fees on The Nasdaq
SmallCap Market would increase from a minimum of $15,000 and a maximum
of $16,000 to a minimum of $17,500 and a maximum of $21,000. In
addition, Nasdaq is proposing to eliminate the separate $2,000 charge
to SmallCap Market issuers that list additional classes of stock.
Instead of this separate charge, Nasdaq will aggregate shares
outstanding for all issues of stock in determining the annual fee, as
is currently done on the Nasdaq National Market.
These fee increases are necessary to support the ongoing cost of
issuer services and to fund future product and service investments.
Nasdaq annual fees were last increased in 2001 for National Market
issuers and in 2003 for SmallCap Market issuers. The services added
since the prior increase include enhancements to the trading systems
such as the Closing Cross, a centralized order facility that brings
together the buy and sell interest in specific NASDAQ stocks and
executes all shares for each stock at a single price, and continued
improvements to Nasdaq Online, the Market Intelligence Desk, the Nasdaq
Corporate Services Network, and NASDAQ.com. In addition, the cost of
monitoring issuers for ongoing compliance with Nasdaq's listing
standards has increased, in part as a result of Nasdaq's enhanced
corporate governance requirements, which were approved in November
2003.
The new annual fee schedule would be effective January 1, 2005 for
all issuers listed on The Nasdaq Stock Market at the time of approval
of this rule filing. For newly listing issuers, the new annual fee
schedule would be effective once approved.
In addition, Nasdaq is proposing to adopt new Interpretive Material
that clarifies that issuers exempt from registration with the
Commission pursuant to SEC Rule 12g3-2(b), which are eligible to be
quoted on Nasdaq pursuant to Rule 4320(c), are exempt from annual fees
and additional share fees. These companies are not listed on Nasdaq at
their own initiative, and have not signed an application or listing
agreement. As such, Nasdaq believes it would be inequitable to assess
fees against this small group of uniquely situated issuers.
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 15A of the Act,\4\ in general, and with
Section 15A(b)(5) of the Act,\5\ in particular, in that it is designed
to provide an equitable allocation of reasonable fees and charges among
issuers listed on Nasdaq.
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\4\ 15 U.S.C. 78o-3.
\5\ 15 U.S.C. 78o-3(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq 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 by Nasdaq.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be 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 e-mail to rule-comments@sec.gov. Please include
File Number SR-NASD-2004-128 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW.,
Washington, DC 20549-0609.
All submissions should refer to File Number SR-NASD-2004-128. 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 inspection
and copying in the Commission's Public Reference Room, 450 Fifth
Street, NW., Washington, DC 20549. Copies of such filing also will be
available for
[[Page 62928]]
inspection and copying at the principal office of the NASD. 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-NASD-2004-128 and should be
submitted on or before November 18, 2004.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E4-2876 Filed 10-27-04; 8:45 am]
BILLING CODE 8010-01-P