Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices 9813 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

5Thus, under Section 7 of Schedule A to the 

NASD By-Laws, fees are capped with respect to 

offerings with an aggregate offering price of $750 

million or more. 

6See Securities Exchange Act Release No. 52056 

(July 19, 2005), 70 FR 44722 (August 3, 2005). 

7See Rule 405 under the Securities Act of 1933, 

17 C.F.R. 230.405. 

8See SR–NASD–2004–022. Amendment No. 4 to 

SR–NASD–2004–022 was filed with the 

Commission on April 28, 2006. See Securities 

Exchange Act Release No. 50749 (November 29, 

2004), 69 FR 70735 (December 7, 2004). 

9See NASD Rule 2720(m). Pursuant to Rule 

2720(m), all offerings that are within the scope of 

Rule 2720 are required to be filed with NASD and 

have the fee paid as required by Rule 2710, even 

if the offering would be otherwise exempt from 

Rule 2710. 

10As noted above, under Commission rules, a 

WKSI registration statement is not required to state 

a specific value of securities. Nevertheless, for 

purposes of NASD’s filing requirements, a value 

must be provided, and most issuers have indicated 

that they intend to offer at least $750 million. 

11NASD’s electronic filing system does not track 

subsequent amendments to WKSI registration 

statements to determine whether new securities 

have been registered by an amendment, thereby 

increasing the size of the offering. Moreover, if 

multiple members participate in takedowns of 

securities off of a WKSI shelf registration statement 

over time, no one member would have the ability 

to track the aggregate value of the securities sold by 

the multiple members and ensure that the proper 

filing fee is paid in connection with the offerings. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55360; File No. SR–NASD–

2007–006] 

Self-Regulatory Organizations; 

National Association of Securities 

Dealers, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to Fees for Filing 

Documents Pursuant to the Corporate 

Financing Rule 

February 27, 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 January 

24, 2007, the National Association of 

Securities Dealers, Inc. (‘‘NASD’’) 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 prepared substantially by 

NASD. NASD has designated this 

proposal as establishing or changing a 

due, fee, or other charge imposed by a 

self-regulatory organization pursuant to 

Section 19(b)(3)(A) of the Act,3 and Rule 

19b–4(f)(2) thereunder,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 

NASD is proposing to amend Section 

7 of Schedule A to the NASD By-Laws 

to adjust fees for filing documents 

pursuant to NASD Rule 2710 (Corporate 

Financing Rule—Underwriting Terms 

and Arrangements). The text of the 

proposed rule change is available at 

NASD, the Commission’s Public 

Reference Room, and http:// 

www.nasd.com/RulesRegulation/ 

RuleFilings. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

NASD 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. NASD 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 

Under Section 7 of Schedule A to the 

NASD By-Laws, the current fee for filing 

offering documents with NASD 

pursuant to Rule 2710 (Corporate 

Financing Rule—Underwriting Term 

and Arrangements) is equal to $500 plus 

.01% of the proposed maximum 

aggregate offering price or other 

applicable value of all securities 

registered, but not to exceed $75,500.5

However, pursuant to the Commission’s 

securities offering reform rulemaking 

(‘‘Securities Offering Reform’’),6 which 

became effective on December 1, 2005, 

Commission rules now permit, among 

other things, ‘‘well-known seasoned 

issuers’’ or ‘‘WKSIs’’ to file 

automatically effective shelf registration 

statements without specifying the 

amount or value of the securities that 

may be offered off the registration 

statement for up to three years. WKSIs 

are large issuers that generally must 

have either $700 million of worldwide 

equity market capitalization or an 

aggregate of $1 billion of nonconvertible securities issued within the 

past three years.7

Most WKSIs are exempt from the shelf 

offering filing requirements under 

NASD Rule 2710(b)(7), which exempts 

an issuer that is eligible to use a Form 

S–3 or Form F–3 registration statement 

and has been a reporting company 

under Section 13(a) or 15(d) of the Act 

for at least 36 months. In addition, 

NASD has proposed amendments to 

Rule 2710 to expressly exempt WKSI 

shelf registration statements from the 

filing requirements of Rule 2710.8 Thus, 

NASD intends that only those WKSIs 

with a conflict of interest as defined 

under Rule 2720 will be required to file 

shelf registration statements with 

NASD.9 For these issuers filing 

documents with NASD pursuant to Rule 

2720, NASD will review the proposed 

underwriting terms and arrangements to 

determine whether they comply with 

the substantive requirements of the rule, 

including limits on underwriting 

compensation and use of a qualified 

independent underwriter to provide a 

pricing opinion and conduct due 

diligence. Upon completion of the 

review, if the terms and arrangements 

comply with the rule, NASD will issue 

an opinion that it has no objection to the 

filing. 

Section 7 of Schedule A to the NASD 

By-Laws provides that the fee imposed 

for filing documents required pursuant 

to Rule 2710 is based on the proposed 

maximum aggregate offering price or 

other applicable value of all securities 

registered on a Commission registration 

statement or included on any other type 

of offering document. However, because 

WKSIs are not required to specify a 

proposed maximum aggregate offering 

price or other applicable value on a 

registration statement, assessing NASD’s 

fee has been problematic. In their filings 

pursuant to Rule 2710, most WKSIs 

provided a value of securities that will 

be offered at or above $750 million, 

corresponding with the maximum filing 

fee. Since the Commission’s Securities 

Offering Reform has been in effect, 

NASD has received 71 WKSI filings, of 

which 62 (or 87%) have provided a 

value of $750 million or more.10 Nine 

(or 13%) have specified amounts of 

securities with an aggregate value of less 

than $750 million; however, these 

issuers are eligible to amend their 

registration during the three year 

effective period to increase the value of 

securities registered. Given this activity, 

and the fact that a WKSI shelf 

registration filing allows the issuer to 

offer securities on a registration 

statement for a three year period in 

amounts above $750 million, NASD is 

imposing the maximum filing fee on all 

WKSI filings.11


erjones on PRODPC74 with NOTICES
9814 Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices 

12Telephone conversation between Kathryn 

Moore, Assistant General Counsel, NASD, and 

Commission staff on February 26, 2007. 

13 15 U.S.C. 78o–3(b)(5). 

14 15 U.S.C. 78s(b)(3)(A). 

15 17 CFR 240.19b–4(f)(2). 16See 15 U.S.C. 78s(b)(3)(C). 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

Accordingly, NASD proposes to 

amend Section 7 of Schedule A to the 

NASD By-Laws expressly to require that 

offering documents that are required to 

be filed with NASD relating to an 

automatically effective shelf registration 

statement by a WKSI (which would 

currently include all WKSIs not 

otherwise exempt from Rule 2710 and, 

if SR–NASD–2004–022 is approved by 

the Commission, would only include 

WKSIs that are broker-dealers or 

affiliates of broker-dealers) 12 must be 

accompanied by a $75,500 fee. 

NASD has filed the proposed rule 

change for immediate effectiveness. The 

implementation date will be February 

26, 2007. 

2. Statutory Basis 

NASD believes that the proposed rule 

change is consistent with Section 

15A(b)(5) 13 of the Act, which requires 

that NASD rules provide for the 

equitable allocation of reasonable dues, 

fees, and other charges among members 

and issuers and other persons using any 

facility or system that NASD operates or 

controls. NASD believes that the 

proposed rule change, which specifies 

the filing fee required for shelf offerings 

by WKSIs where no proposed maximum 

aggregate offering or other applicable 

value of all securities registered is 

required to be stated, is necessary to 

ensure the appropriate review of 

offerings by WKSIs under NASD rules. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NASD 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 NASD 

has neither solicited nor received 

comments on the proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 14 and subparagraph (f)(2) of 

Rule 19b–4 thereunder 15 in that it 

establishes or changes a due, fee, or 

other charge imposed by NASD. At any 

time within 60 days of the filing of such 

proposed rule change, the Commission 

may summarily abrogate such 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 

ct.16

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–NASD–2007–006 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–NASD–2007–006. 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 the filing also will be 

available for inspection and copying at 

the principal offices of NASD. 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–NASD–2007–006 and 

should be submitted on or before March 

26, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3762 Filed 3–2–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55343; File No. SR–NYSE–

2007–12] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change and 

Amendment No. 1 Thereto To Amend 

Section 703.16 of the NYSE Listed 

Company Manual To Eliminate 

Requirement Regarding Index 

Calculation Methodology 

February 23, 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 February 

5, 2007 the New York Stock Exchange 

LLC (‘‘NYSE’’ 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. On February 15, 2007, the 

Exchange filed Amendment No. 1 to the 

proposed rule change. The Commission 

is publishing this notice to solicit 

comments on the proposed rule change, 

as amended, from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Section 703.16 of the NYSE Listed 

Company Manual (‘‘Manual’’), the 

Exchange’s generic listing standard for 

investment company units (‘‘ICUs’’), to 

eliminate the requirement that the 

calculation methodology for the index 

underlying a series of ICUs must be one 

of those enumerated in Section 

703.16(C)(4)(a). The proposed rule text 

is available at the NYSE, the 

Commission’s Public Reference Room, 

and http://www.nyse.com. 


erjones on PRODPC74 with NOTICES