[Federal Register: April 25, 2007 (Volume 72, Number 79)]
[Notices]
[Page 20572-20573]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25ap07-121]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55645; File No. SR-NASDAQ-2007-040]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing of Proposed Rule Change Relating to the Waiver of Fees
Upon Relisting of Companies Removed for Late Filings
April 19, 2007.
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 April 4, 2007, The NASDAQ Stock Market LLC (``Nasdaq'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I and II below, which Items have been
substantially 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 Substance
of the Proposed Rule Change
Nasdaq proposes to allow, in certain circumstances, a company to
relist without paying a new entry and application fee if the Company
was delisted solely for the failure to file a required periodic report
with the Commission or other appropriate regulatory authority. Nasdaq
also proposes to delete a separate, duplicative provision in the rules.
The text of the proposed rule change appears below. Proposed new
language is italicized and 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://nasdaq.complinet.com.
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* * * * *
IM-4500-5. Waiver of Fees Upon Relisting for Companies Removed for
Late Filings Entry Fees. Pursuant to Nasdaq's authority to waive
certain fees, Nasdaq has determined to waive the entry fee (including
the application fee) in the following circumstances:
(1) the company was suspended and/or delisted from the Nasdaq Stock
Market solely for its failure to file a required periodic report with
the Commission or other appropriate regulatory authority, pursuant to
Rule 4310(c)(14) or 4320(e)(12); and
(2) the company has regained compliance with this requirement and
applies to relist on Nasdaq within one year of the date it is delisted
from Nasdaq.
Annual Fees. A company that meets the above requirements and
relists during the same year that it has previously paid an annual fee
will not be subject to a second annual fee in that same year.
* * * * *
4520. The Nasdaq Capital Market
(a) No change.
(b) No change.
(1)-(5) No change.
[(6) The issuer of each class of securities that is a non-U.S.
issue that is listed on the Nasdaq Capital Market shall pay to Nasdaq a
fee in connection with the issuance of additional shares, or in the
case of ADRs, the listing of additional shares underlying the ADRs. The
fee in connection with additional shares shall be $5,000 for any amount
of additional shares listed on an annual basis. This fee will be
assessed annually based on the issuer's total shares outstanding as
reported on its periodic reports filed with the SEC. There shall be no
fee, however, for issuances of up to 49,999 additional shares per
year.]
(c)-(e) 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, 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 III 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
Existing Nasdaq rules provide the authority to waive entry,
application and annual fees.\4\ Pursuant to this authority, Nasdaq has
determined to waive the entry and application fee for any company that
was suspended \5\ and/or delisted from the Nasdaq Stock Market solely
for its failure to file a required periodic report with the Commission
or other appropriate regulatory authority, if the company regains
compliance with this requirement and applies to relist on Nasdaq within
one year of the date it is delisted from Nasdaq. In addition, if such a
company relists during the same calendar year that it has previously
paid an annual fee, the company will not be subject to a second annual
fee in that same year.
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\4\ Nasdaq Rules 4510(a)(5), 4520(a)(4), 4530(a)(4) and
4540(a)(2) provide authority to waive entry and application fees and
Nasdaq rules 4510(c)(2), 4510(d)(5), 4520(c)(4), 4530(b)(2) and
4540(b)(3) provide authority to waive annual fees. Nasdaq notes that
in several prior instances, the predecessor market operated by The
Nasdaq Stock Market, Inc. as a facility of the NASD filed listing
fee waivers of general applicability on an immediately effective
basis, pursuant to SEC rule 19b-4(f)(1), 17 CFR 240.19b-4(f)(1), as
a stated policy, practice, or interpretation with respect to the
meaning, administration, or enforcement of these existing rules.
See, e.g., Securities Exchange Act Release No. 49133 (January 28,
2004), 69 FR 5630 (February 5, 2004) (SR-NASD-2003-198); Securities
Exchange Act Release No. 49286 (February 19, 2004), 69 FR 8999
(February 26, 2004) (SR-NASD-2004-004). More recently, the New York
Stock Exchange has submitted a filing to waive listing fees subject
to Commission approval under section 19(b)(2) of the Act, 15 U.S.C.
78s(b)(2). See Securities Exchange Release No. 55421 (March 8,
2007), 72 FR 11925 (March 14, 2007) (SR-NYSE-2007-19). As a result,
Market Regulation staff has advised Nasdaq that this proposed rule
change should also be filed under section 19(b)(2). Although Nasdaq
is following staff's guidance in this case, Nasdaq notes that the
rules authorizing waivers of listing fees have been in effect for an
extensive period of time, having first been approved as NASD rules
in 1991, and then re-approved by the Commission as rules of Nasdaq
during its registration as a national securities exchange.
Accordingly, it is Nasdaq's view that nothing in this filing should
be construed to restrict Nasdaq's approved authority to waive
listing fees with respect to particular issuers in appropriate
circumstances, nor should this filing be construed to restrict the
submission of filings on an immediately effective basis in
appropriate circumstances.
The Commission notes that the waiver authority referred to in
the Nasdaq Rules was specifically intended to grant Nasdaq
flexibility to waive fees on a case-by-case basis. See Securities
Exchange Release No. 28731 (January 2, 1991), 56 FR 906 (January 9,
1991) (SR-NASD-90-61). The Commission does not believe it is, as a
general matter, appropriate to allow for the waiver of fees to a
class of non-members without first providing interested persons an
opportunity to comment on the proposed rule change pursuant to
section 19(b)(2) under the Act.
\5\ Nasdaq Rule 4802(f) requires a security to meet the
requirements for initial listing (which include the requirement to
pay the applicable listing fees) if the security has been the
subject of a decision to delist by a Listing Qualifications Panel,
the Nasdaq Listing and Hearing Review Council or the Nasdaq Board.
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Nasdaq believes that this waiver is appropriate given that, on
average, the review of such an issuer is likely to be simpler than the
typical application for several reasons. First, because these companies
were previously listed on Nasdaq and compliant with all requirements
except the filing requirement, it is more likely that they will be
compliant with all other quantitative and qualitative
[[Page 20573]]
requirements. Further, relevant information about these companies is
already contained in Nasdaq's compliance systems. Finally, Nasdaq
anticipates that there would be fewer questions concerning the
company's financial statements given that these companies will often
have undergone extensive review by their auditors and, in some cases,
by independent investigators and the Commission or other regulatory
entities, in order to resolve the issues that caused the late filings.
Nasdaq is implementing these waivers to incent companies to re-list
on Nasdaq once they regain compliance with the periodic filing
requirement, rather than seek a listing elsewhere. Nasdaq believes that
this waiver is appropriate, especially because Nasdaq's rules governing
the delisting of companies that are delinquent in periodic reports are
generally stricter than those of other markets. As such, the proposed
waivers will promote competition between Nasdaq and other exchange
markets.
The proposed rule change will not affect Nasdaq's commitment of
resources to its regulatory oversight of the listing process or its
other regulatory programs. Specifically, Nasdaq will still conduct a
complete review of these companies for compliance with Nasdaq listing
standards in the same manner as any other company applying for listing
on Nasdaq. Any fee waiver under this proposed rule is predicated on the
Company successfully completing that review process and demonstrating
compliance with the initial listing requirements.
Finally, Nasdaq proposes to delete a duplicative provision in Rule
4520(b). Currently, Rule 4520(b)(6) is identical to Rule 4520(b)(2). As
such, Nasdaq proposes to delete Rule 4520(b)(6).
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 Section
6(b)(4) of the Act,\7\ in particular. Nasdaq believes that the proposed
waivers are equitable and reasonable because these companies previously
paid entry and annual fees to Nasdaq and to again charge such fees
would impose duplicative costs.
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\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq does not believe that the proposed rule change will impose
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
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. 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-NASDAQ-2007-040 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2007-040.
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. Copies of such
filing also will be available for inspection and copying at the
principal office of Nasdaq. 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-2007-040 and should be submitted on or before May
16, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-7838 Filed 4-24-07; 8:45 am]
BILLING CODE 8010-01-P