[Federal Register: September 12, 2003 (Volume 68, Number 177)]
[Notices]
[Page 53770]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12se03-90]
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SECURITIES AND EXCHANGE COMMISSION
[Release No.34-48450; File No. SR-NASD-2003-105]
Self-Regulatory Organizations; Order Granting Approval of
Proposed Rule Change by the National Association of Securities Dealers,
Inc. to Implement a Six-Month Pilot Program Establishing Fees for
Written Interpretations of Nasdaq Listing Rules
September 4, 2003.
On July 3, 2003, 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''), 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 implement a six-month pilot program to
establish fees for written interpretations of Nasdaq listing rules.\3\
Notice of the proposed rule change was published for comment in the
Federal Register on August 4, 2003.\4\ No comments were received on the
proposed rule change. This order approves the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b--4.
\3\ The Commission notes that Nasdaq submitted two amendments to
its Form 19b-4 to indicate the review and approval of the proposed
rule change by the NASD Board of Governors. The amendments were
technical in nature and did not require notice and comment. See
letters from John D. Nachmann, Senior Attorney, Nasdaq to Katherine
England, Assistant Director, Commission, dated July 23, 2003 and
August 1, 2003.
\4\ See Securities Exchange Act Release No. 48236 (July 28,
2003), 68 FR 45865.
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Nasdaq currently provides written interpretations regarding the
application of its listing rules to particular sets of facts, at no
cost, to issuers who request them. According to Nasdaq, the
transactions for which issuers are seeking interpretations have grown
in complexity and have resulted in its staff spending an increased
amount of time on interpretation letters. In order to address the
associated costs, Nasdaq proposes to charge, on a six-month pilot
basis, fees for providing written interpretations. Under the pilot,
Nasdaq would charge $2,000 for interpretation letters, with a response
generally provided within four weeks. Additionally, Nasdaq would charge
a $10,000 fee for expedited interpretation letters, with a response
generally provided within one to four weeks. Nasdaq would not impose
fees for requests related to initial listing on Nasdaq or requests for
an exception from NASD Rule 4350(i)(2). The Nasdaq Board of Directors
will also have the discretion to defer or waive all or any part of the
written interpretation fee. Nasdaq has proposed to make the pilot
program effective on the latter of October 1, 2003 or the date of
Commission approval.
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities association.\5\
Specifically, the Commission finds that the proposal is consistent with
Section 15A(b)(5) of the Act,\6\ which requires, among other things,
that the rules of a national securities association provide for the
equitable allocation of reasonable dues, fees, and other charges among
members, issuers and other persons. The Commission believes that the
written interpretation fee is reasonably related to the purpose of
covering the costs of providing written interpretations and is fairly
allocated among issuers. The Commission also notes that the fee is
being implemented on a six-month pilot basis and that Nasdaq will
evaluate its impact on issuers at the end of the pilot period and
report to the Commission its findings.
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\5\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
\6\ 15 U.S.C. 78o-3(b)(5).
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Finally, the rule proposal provides the Nasdaq Board of Directors
or its designee with the discretion to defer or waive all or any part
of the written interpretation fee in order to address exceptional
situations where the payment of a fee for an interpretation letter
would be inequitable under the circumstances (e.g., in cases of
economic hardship). The Commission notes that such discretion may not
be used in generally applicable or frequently-replicated situations.\7\
It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\8\ that the proposed rule change (File No. SR-NASD-2003-105) be,
and it hereby is, approved, as a six-month pilot, through March 31,
2004.
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\7\ See letter from Annette L. Nazareth, Director, Division of
Market Regulation, Commission, to T. Grant Callery, Executive Vice
President and General Counsel, NASD (March 27, 2003).
\8\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland
Deputy Secretary
[FR Doc. 03-23288 Filed 9-11-03; 8:45 am]
BILLING CODE 8010-01-P