Federal Register / Vol. 72, No. 8 / Friday, January 12, 2007 / Notices 1569 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 54825 

(November 28, 2006), 71 FR 70818. 

4 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

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

6 15 U.S.C. 78s(b)(2). 

7 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55052; File No. SR–

NASDAQ–2006–047] 

Self-Regulatory Organization; the 

NASDAQ Stock Market LLC; Order 

Approving Proposed Rule Change To 

Modify Its Listing Rules in the Case of 

a Reverse Merger 

January 5, 2007. 

On November 13, 2006, The NASDAQ 

Stock Market LLC (‘‘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 clarify the process an issuer 

must follow when applying for initial 

listing in connection with a reverse 

merger. The proposed rule change was 

published for comment in the Federal 

Register on December 6, 2006.3 The 

Commission received no comments 

regarding the proposal. 

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 

exchange.4 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,5 which requires that 

the rules of an exchange be designed to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national securities 

system, and, in general, to protect 

investors and the public interest. 

Nasdaq proposes to amend Nasdaq 

Rule 4340(a) and related interpretive 

material to state that an issuer must 

apply for initial listing prior to 

consummating a transaction whereby 

the issuer combines with an entity that 

is not listed on Nasdaq, resulting in a 

change of control of the issuer and 

potentially allowing the non-Nasdaq 

entity to obtain a ‘‘backdoor listing’’ on 

Nasdaq (‘‘Reverse Merger’’). 

Current Nasdaq Rule 4340(a) states 

that an issuer must apply for initial 

listing ‘‘following’’ a Reverse Merger. 

Nasdaq proposes to replace the word 

‘‘following’’ with the phrase ‘‘in 

connection with’’ and require the issuer 

to ‘‘submit an application for the posttransaction entity with sufficient time to 

allow Nasdaq to complete its review 

before the transaction is completed.’’

Because the entity resulting from the 

Reverse Merger could be substantially 

different from the one originally 

approved for Nasdaq listing, it is 

reasonable and consistent with the Act 

for Nasdaq to conduct a de novo listing 

review of the new entity and, for the 

new entity to keep the listing, to require 

sufficient time to complete the review 

before the Reverse Merger is completed. 

The Commission believes that this 

proposal is reasonably designed to 

enhance the transparency and integrity 

of the listing process. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,6 that the 

proposed rule change (SR–NASDAQ–

2006–047) be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.7

Nancy M. Morris, 

Secretary. 

[FR Doc. E7–311 Filed 1–11–07; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55042; File No. SR–

NASDAQ–2006–055] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Order Granting Accelerated 

Approval of a Proposed Rule Change 

as Amended by Amendment No. 1 To 

Temporarily Adjust Tier Volume Limits 

January 4, 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 December 

15, 2006, 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. On 

December 21, 2006, the Exchange 

submitted Amendment No. 1 to the 

proposed rule change. The order 

provides notice of the proposed rule 

change as modified by Amendment No. 

1 and approves the proposed rule 

change, as amended, on an accelerated 

basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Nasdaq proposes to reduce, for the 

month of November 2006, the average 

daily volume tiers in Nasdaq-listed 

securities contained in Nasdaq Rule 

7018(a) to qualify for certain fee and 

rebate levels. The text of the proposed 

rule change is available at Nasdaq, the 

Commission’s Public Reference Room, 

and http://nasdaq.complinet.com/ 

file_store/pdf/rulebooks/SR–NASDAQ–

2006–055.pdf. 

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 

Nasdaq is proposing to reduce, for the 

month of November 2006, the average 

daily volume tiers for trading and 

routing in Nasdaq-listed securities 

contained in Nasdaq Rule 7018(a) to 

qualify for certain fee and rebate levels. 

Currently, in order to qualify for a pershare execution fee of $0.0028, members 

must have an average daily volume 

through Nasdaq facilities in all 

securities during a particular month of 

(i) more than 30 million shares of 

liquidity provided, and (ii) more than 50 

million shares of liquidity accessed and/ 

or routed. For the month of November 

2006, Nasdaq is proposing to reduce 

those qualification volume tiers to 27 

million shares and 47 million shares, 

respectively. In addition, Nasdaq is also 

reducing for the month of November 

2006 the monthly average daily volume 

tier required to obtain the $0.0025 credit 

rebate from its current 30 million share 

level to 27 million shares. For routed 

orders, to qualify for a fee of the greater 

of (a) $0.0028 per share executed or (b) 

a pass-through of all applicable access 

fees charged by electronic 

communications networks that charge 


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