Federal Register / Vol. 74, No. 145 / Thursday, July 30, 2009 / Notices 38073 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4 17 CFR 240.19b–4(f)(6). 

5Nasdaq’s continued listing requirements relating 

to bid price are set forth in Rules 5450(a)(1), 

5460(a)(3), 5550(a)(2) and 5555(a)(1) and the related 

compliance periods are set forth in Rule 

5810(c)(3)(A). Under these rules, a security is 

considered deficient if it fails to achieve at least a 

$1 closing bid price for a period of 30 consecutive 

business days. Once deficient, Capital Market 

issuers are provided one automatic 180-day period 

to regain compliance. Thereafter, these issuers can 

receive an additional 180-day compliance period if 

they comply with all Capital Market initial 

inclusion requirements except bid price. Global 

Market issuers are also provided one automatic 180- 

day period to regain compliance, after which they 

can transfer to the Capital Market, if they comply 

with all Capital Market initial inclusion 

requirements except bid price, to take advantage of 

the second 180-day compliance period. A company 

can regain compliance by achieving a $1 closing bid 

price for a minimum of ten consecutive business 

days. 

6Nasdaq’s continued listing requirements relating 

to market value of publicly held shares are set forth 

in Rules 5450(b)(1)(C), 5450(b)(2)(C), 5450(b)(3)(C), 

5460(a)(2), 5550(a)(5) and 5555(a)(4) and the related 

compliance periods are set forth in Rule 

5810(c)(3)(D). Under these rules, a security is 

considered deficient if it fails to achieve the 

minimum market value of publicly held shares 

requirement for a period of 30 consecutive business 

days. Thereafter, companies have a compliance 

period of 90 calendar days to achieve compliance 

by meeting the applicable standard for a minimum 

of ten consecutive business days. 

7Securities Exchange Act Release No. 58809 

(October 17, 2008), 73 FR 63222 (October 23, 2008) 

(SR–NASDAQ–2008–082). One comment was 

submitted on this proposal by Alan F. Eisenberg, 

Executive Vice President, the Biotechnology 

Industry Organization. This comment supported the 

suspension and ‘‘any efforts by the Commission and 

NASDAQ to extend [the suspension], as necessary, 

beyond the termination date of January 16, 2009.’’ 

8See, e.g., Securities Exchange Act Release No. 

58588 (September 18, 2008), 73 FR 55174 

(September 24, 2008) (‘‘The Commission is aware 

of the continued potential of sudden and excessive 

fluctuations of securities prices and disruption in 

the functioning of the securities markets that could 

threaten fair and orderly markets. Given the 

importance of confidence in our financial markets 

as a whole, we have also become concerned about 

sudden and unexplained declines in the prices of 

securities. Such price declines can give rise to 

questions about the underlying financial condition 

of an issuer, which in turn can create a crisis of 

confidence without a fundamental underlying basis. 

This crisis of confidence can impair the liquidity 

and ultimate viability of an issuer, with potentially 

broad market consequences.’’) 

9Securities Exchange Act Release No. 59219 

(January 8, 2009), 74 FR 2640 (January 15, 2009) 

(SR–NASDAQ–2008–099). Securities Exchange Act 

Release No. 59661 (March 31, 2009), 74 FR 15561 

(April 6, 2009) (SR–NASDAQ–2009–026). 

10Nasdaq would continue to identify on its Web 

site and in its daily data feed to vendors those 

companies in a compliance period or in the 

hearings process as not satisfying the continued 

listing standards, unless the company regains 

compliance during the suspension. A company 

would continue to be subject to delisting for failure 

to comply with other listing requirements. 

11Nasdaq would not consider the bid price or 

market value of publicly held shares for the period 

before or during the suspension with respect to a 

company that was not yet non-compliant with those 

requirements at the start of the suspension. 

12For example, if a company was 120 days into 

its first 180-day compliance period for a bid price 

deficiency when the suspension first started and the 

company does not regain compliance during the 

suspension, the company would have sixty days 

Continued 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60374; File No. SR– 

NASDAQ–2009–069] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Extend the 

Temporary Suspension of the 

Continued Listing Requirements 

Related to Bid Price and Market Value 

of Publicly Held Shares for Listing on 

the Nasdaq Stock Market Through 

July 31, 2009 

July 23, 2009. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on July 13, 

2009, 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 prepared by Nasdaq. Nasdaq 

has designated the proposed rule change 

as effecting a change described under 

Rule 19b–4(f)(6) under the Act,4 which 

renders the proposal effective upon 

filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Nasdaq proposes to extend the 

temporary suspension of the application 

of the continued inclusion bid price and 

market value of publicly held shares 

requirements for listing on the Nasdaq 

Stock Market through Friday, July 31, 

2009. 

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 

On October 16, 2008, Nasdaq filed a 

proposed rule change, which was 

immediately effective, to temporarily 

suspend the bid price 5 and market 

value of publicly held shares 6

continued listing requirements 

otherwise applicable to issuers of 

common stock, preferred stock, 

secondary classes of common stock, 

shares or certificates of beneficial 

interest of trusts, limited partnership 

interests, American Depositary Receipts, 

and their equivalents.7 This suspension 

was designed to provide temporary 

relief to companies from the application 

of these requirements during a period in 

which the financial markets face almost 

unprecedented turmoil, resulting in a 

crisis in investor confidence and 

concerns about the proper functioning 

of the securities markets.8 On December 

18, 2008 and March 18, 2009, Nasdaq 

filed proposed rule changes to extend 

this suspension until April 19, 2009 and 

July 19, 2009, respectively.9

Nasdaq believes that a further 

extension of the suspension is 

appropriate to allow some additional 

time for market conditions to return to 

normal and for deficient companies to 

develop a plan to regain compliance 

with the continued listing requirements. 

Therefore, Nasdaq has determined to 

continue the temporary suspension of 

the bid price and market value of 

publicly held shares requirements for 

approximately two additional weeks, 

until Friday, July 31, 2009. Under this 

proposal, companies would not be cited 

for new bid price or market value of 

publicly held shares deficiencies during 

the suspension period, and the time 

allowed to companies already in a 

compliance period or in the hearings 

process for bid price or market value of 

publicly held shares deficiencies would 

remain suspended with respect to those 

requirements.10 Following the 

temporary suspension, any new 

deficiencies with the bid price or market 

value of publicly held shares 

requirements would be determined 

using data starting on Monday, August 

3, 2009.11 When the suspension expires, 

companies that were in a compliance 

period as of October 16, 2008, when the 

suspension first began, would receive 

the balance of any pending compliance 

periods in effect at the time of the initial 

suspension.12 Similarly, companies that 


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38074 Federal Register / Vol. 74, No. 145 / Thursday, July 30, 2009 / Notices 

remaining, starting on Monday, August 3, 2009, to 

regain compliance. The company may be eligible 

for the second 180-day compliance period if it 

satisfies the conditions for the second compliance 

period at the conclusion of the first compliance 

period. 

13 15 U.S.C. 78f. 

14 15 U.S.C. 78f(b)(5). 

15 15 U.S.C. 78s(b)(3)(A). 

16 17 CFR 240.19b–4(f)(6). Pursuant to Rule 19b– 

4(f)(6)(iii) under the Act, the Exchange is required 

to give the Commission written notice of its intent 

to file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Commission 

has determined to waive this requirement. 

17 17 CFR 240.19b–4(f)(6). 

18 17 CFR 240.19b–4(f)(6)(iii). 

19For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. 15 U.S.C. 78c(f). 

were in the Hearings process prior to 

October 16, 2008, would resume in that 

process at the same stage they were in 

when the suspension first went into 

effect. Nasdaq will continue to monitor 

securities to determine if they regain 

compliance during the temporary 

suspension. 

Based on discussions with the 

Commission Staff, Nasdaq does not 

expect a further extension of the 

suspension beyond July 31, 2009. 

2. Statutory Basis 

Nasdaq believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,13 in 

general and with Section 6(b)(5) of the 

Act,14 in particular in that it is designed 

to prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in regulating, clearing, 

settling, processing information with 

respect to, and facilitating transactions 

in securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. The 

proposed rule change is designed to 

allow some additional time for market 

conditions to return to normal and for 

deficient companies to develop a plan to 

regain compliance with the continued 

listing requirements, thereby protecting 

investors, facilitating transactions in 

securities, and removing an impediment 

to a free and open market. 

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 

While written comments were not 

solicited about the proposed extension, 

there was one comment submitted by 

the Biotechnology Industry 

Organization on the original suspension 

of the bid price and market value of 

publicly held shares requirements, 

which supported the extension. That 

comment is described in footnote 7, 

above. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the proposed rule change: (i) 

Does not significantly affect the 

protection of investors or the public 

interest; (ii) does not impose any 

significant burden on competition; and 

(iii) does not become operative for 30 

days after the date of the filing, or such 

shorter time as the Commission may 

designate if consistent with the 

protection of investors and the public 

interest, the proposed rule change has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 15 and Rule 19b– 

4(f)(6) thereunder.16

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 17 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6)(iii) 18

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. The Exchange has 

requested that the Commission waive 

the 30-day operative delay. 

The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest 

because it will allow Nasdaq to extend, 

through July 31, 2009, the temporary 

suspension of its bid price and market 

value of publicly held shares continued 

listing requirements. The Commission 

notes that the extension of the 

temporary suspension will continue to 

provide certain companies with 

temporary relief from receiving a 

deficiency or delisting notification, or 

from being delisted, and will provide 

some additional time to allow 

companies to regain compliance after 

the market volatility and conditions 

experienced earlier this year and last 

fall. The Commission notes that this 

action is temporary in nature, and that 

following the suspension, companies 

currently in the compliance period will 

resume at the same stage and receive the 

remaining balance of its compliance 

period if they remain non-compliant 

with these standards. For these reasons, 

the Commission designates that the 

proposed rule change become operative 

immediately upon filing.19

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

the rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 

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 rulecomments@sec.gov. Please include File 

Number SR–NASDAQ–2009–069 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2009–069. 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, 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 


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Federal Register / Vol. 74, No. 145 / Thursday, July 30, 2009 / Notices 38075 

20 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The Commission notes that The NASDAQ Stock 

Market LLC refers to itself in a variety of ways 

throughout this notice. 

4 17 CFR 240.19b–4(f)(6). 

5Changes are marked to the rules of The 

NASDAQ Stock Market LLC found at http:// 

nasdaqomx.cchwallstreet.com/. 

6 If the order were a NASDAQ-only unpriced 

order that is not eligible for routing, NASDAQ 

would execute against the liquidity available on 

NASDAQ up to the Collared Order thresholds and 

cancel the remainder of the order, provided, 

however, that a NASDAQ-only order will never 

trade through a protected quote on another market 

center. 

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–2009–069 and should be 

submitted on or before August 20, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–18165 Filed 7–29–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60371; File No. SR– 

NASDAQ–2009–070] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Amend 

NASDAQ Rule 4751 To Provide System 

Functionality That Will Cancel Any 

Portion of Most Types of Unpriced 

Orders 

July 23, 2009. 

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 July 20, 

2009, The NASDAQ Stock Market LLC 

(the ‘‘NASDAQ Exchange’’) 3 filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the NASDAQ 

Exchange. The NASDAQ Exchange has 

designated the proposed rule change as 

constituting a non-controversial rule 

change under Rule 19b–4(f)(6) under the 

Act,4 which renders the proposal 

effective upon filing with the 

Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The NASDAQ Exchange is proposing 

a rule change with the Securities and 

Exchange Commission [sic] to amend 

NASDAQ Rule 4751 to provide system 

functionality that will cancel any 

portion of most types of unpriced orders 

(also known as market orders) submitted 

to the Exchange that would execute at 

a price that is more than $0.25 or 5 

percent worse than the national best bid 

and offer at the time the order initially 

reaches the Exchange, whichever is 

greater. This would apply both to orders 

executing on NASDAQ and the portion 

of any order routed to another market 

center. 

(a) The text of the proposed rule 

change is below. Proposed new 

language is underlined; deletions are 

bracketed.[sic] 5

* * * * * 

Rule 4751. Definitions 

(a)–(e) No change. 

(f)(1)–(11) No change. 

(12) ‘‘Unpriced Orders’’ are any order 

types permitted by the System to buy or 

sell shares of a security at the national 

best bid (best offer) (‘‘NBBO’’) at the 

time when the order reaches the System. 

(13) ‘‘Collared Orders’’ are all 

Unpriced Orders except: (1) Market On 

Open Orders as defined in Rule 4752; 

(2) Market On Close Orders as defined 

in Rule 4754; (3) Unpriced Orders 

included by the System in any Nasdaq 

Halt Cross or Nasdaq Imbalance Cross, 

each as defined in Rule 4753; or (4) 

Unpriced Orders that are Reference 

Price Cross Orders as defined in Rule 

4770. Any portion of a Collared Order 

that would execute (either on NASDAQ 

or when routed to another market 

center) at a price more than $0.25 or 5 

percent worse than the NBBO at the 

time when the order reaches the System, 

whichever is greater, will be cancelled. 

(g)–(i) 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, the 

NASDAQ 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 

NASDAQ 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 

The purpose of the proposed rule 

change is to protect market participants 

by reducing the risk that unpriced 

orders, also known as market orders, 

will execute at prices that are 

significantly worse than the national 

best bid and offer (‘‘NBBO’’) at the time 

the Exchange receives the order. 

NASDAQ believes that most market 

participants expect that their order will 

be executed at its full size at a price 

reasonably related to the prevailing 

market. However, participants may not 

be aware that there is insufficient 

liquidity at or near the NBBO to fill the 

entire order, particularly for more 

thinly-traded securities. These unpriced 

orders can disrupt both on [sic] 

NASDAQ and other markets to which 

all or a portion of these orders are 

routed. 

NASDAQ is proposing to implement 

new functionality in its trading and 

routing systems that would cancel any 

portion of most unpriced orders that 

would execute either on NASDAQ or 

when routed to another market center at 

a price that is the greater of $0.25 or 5 

percent worse than the NBBO at the 

time NASDAQ receives the order. 

Unpriced orders that would be subject 

to this calculation and potential 

cancellation are defined as ‘‘Collared 

Orders.’’ 

The following example illustrates 

how the Collared Order process would 

work. A market participant submits a 

SCAN Order (routable order) to buy 500 

shares.6 A SCAN order executes within 

NASDAQ to the extent liquidity is 

available at the NBBO and then routes 

to other market centers. The NBBO is 

$6.00 bid by $6.05 offer, with 100 shares 

available on each side. Both sides of the 

NBBO are set by another market center 

(‘‘Away Market’’), but NASDAQ has 100 

shares available at the $6.05 to sell at 

the offer price and also has reserve 

orders to sell 100 shares at $6.32 and 

400 shares at $6.40. No other market 

center is publishing offers to sell the 

security in between $6.05 and $6.40. 

In this example, the Collared Order 

would be executed in the following 

manner: 


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