[Federal Register: July 25, 2007 (Volume 72, Number 142)]
[Notices]
[Page 40915-40917]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25jy07-106]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56092; File No. SR-NASDAQ-2007-042]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto To
Modify the Entry and Annual Fees Paid by a Company That Lists on Nasdaq
Upon Emerging from Bankruptcy
July 18, 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 13, 2007, The NASDAQ Stock Market LLC (``Nasdaq'' or
``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 substantially prepared by the
Exchange. The Exchange filed Amendment No. 1 to the proposed rule
change on June 28, 2007. The Commission is publishing this notice to
solicit comment on the proposed rule change, as amended, 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 modify the entry and annual fees paid by a
company that lists on Nasdaq upon emerging from bankruptcy. Nasdaq will
implement the proposed rule as of the date it filed this proposed
change.
[[Page 40916]]
The text of the proposed rule change is set forth below. Proposed
new language is in italics.
* * * * *
IM-4500-6. Waiver of Fees for Companies Emerging from Bankruptcy
(a) Entry Fees. Any company that lists on Nasdaq upon emerging from
bankruptcy is not required to pay the entry fee (including the
application fee) set forth in Rules 4510(a) and 4520(a).
(b) Annual Fees.
(1) The annual fee for any company that lists on the Nasdaq Global
Market (including the Nasdaq Global Select Market) upon emerging from
bankruptcy will be the minimum annual listing fee specified in Rule
4510(c)(1) for the first (pro rated) year that such a company is listed
and for each of the subsequent two full years.
(2) Any company listing on Nasdaq upon emerging from bankruptcy
that relists during the same year that it had previously paid an annual
fee will not be subject to a second annual fee in that year.
* * * * *
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. 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
Nasdaq proposes to modify the fees charged to companies that list
upon emerging from bankruptcy. Specifically, Nasdaq proposes to waive
the entry fee (which includes a $5,000 non-refundable application fee)
that such companies would otherwise be required to pay. In addition,
for companies listing on the NASDAQ Global Market (including the NASDAQ
Global Select Market), Nasdaq proposes to charge the company the
minimum annual listing fee applicable to companies on that market
(currently $30,000) for the first (prorated) year that such a company
is listed \3\ and for each of the subsequent two full calendar
years.\4\ Finally, Nasdaq proposes that a company that emerges from
bankruptcy and relists during the same year that it has previously paid
an annual fee will not be required to pay a second annual fee for that
year.
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\3\ Nasdaq prorates the annual fee for the year a company lists,
based on the month in which the company lists.
\4\ All domestic companies on the NASDAQ Capital Market pay the
same annual fee.
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Nasdaq believes that the proposed fees are justified by the unique
circumstances faced by companies emerging from bankruptcy. These
companies typically are not raising any new capital at the time of
listing, so the payment of initial listing fees is more burdensome than
for companies that are listing upon an initial public offering. Also,
because of the desire in bankruptcy proceedings to ensure that
creditors are paid as much as possible, these companies are much more
sensitive to both the initial and continued costs associated with
listing. As such, Nasdaq believes the proposed fees are reasonable and
equitably allocated.
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 historically has not
listed a large number of companies emerging from bankruptcy in any
given year.\5\ Further, 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. The
company must successfully complete that review process and demonstrate
compliance with the initial listing requirements prior to being
approved for listing.
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\5\ Nasdaq listed four companies upon their emergence from
bankruptcy from January 1, 2006, through March 31, 2007.
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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, which requires that Nasdaq's
rules provide for the equitable allocation of reasonable dues, fees,
and other charges among its issuers. Nasdaq believes that the proposed
waivers are equitable and reasonable in light of the unique
circumstances faced by companies emerging from bankruptcy.
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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 result
in 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 on the proposed rule change were neither solicited
nor received.
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 Exchange consents, the Commission will:
(A) By order approve the 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-Nasdaq-2007-042 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Nasdaq-2007-042. 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
[[Page 40917]]
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, 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-Nasdaq-2007-042 and should be submitted on or before
August 15, 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. E7-14315 Filed 7-24-07; 8:45 am]
BILLING CODE 8010-01-P