Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Notices 66707

12 15 U.S.C. 78s.

13 15 U.S.C. 78s(b)(2).

14 17 CFR 200.30–3(a)(12).

1On December 3, 1997, the NASD, through

Nasdaq, submitted Amendment No. 1 to the filing.

See letter from Robert E. Aber, Vice President and

General Counsel, Nasdaq, to Katherine A. England,

Assistant Director, Division of Market Regulation,

Commission, dated December 3, 1997.

2 [For purposes of the Rule 4500 Series, the term

‘‘shares’’ shall include common and preferred stock,

American Depositary Receipts (ADRs), warrants,

partnership interests, or any other security listed on

the Nasdaq National Market.]

3Total shares outstanding shall be the aggregate

of all classes of securities listed on the NNM

calculated at year end.

8310–2 to include the phrase

‘‘electronic inquiry,’’ the NASD has

made it easier and more convenient for

interested persons to inquire about the

employment and disciplinary history of

its members and their associated

persons. The Commission commends

any effort made to improve investor

access to information that could help

investors determine whether to conduct

or continue to conduct business with a

particular broker-dealer or associated

person. The Commission understands,

however, that the NASD intends to

disseminate responses to some inquiries

electronically. As with developing and

instituting information systems

technology, the Commission expects the

NASD, consistent with its statutory

duties, to assure itself that security

concerns (i.e., the security of its systems

and the immutability of the records after

transmittal) have been addressed. Thus,

in granting this partial accelerated

approval, the Commission notes that it

is approving only the NASD’s ability to

respond to electronic inquiries as if they

were either written or telephonic

inquiries.

Based on the foregoing, the

Commission deems it appropriate to

partially approve the proposed rule

change on an accelerated basis,

pursuant to Section 19(b) of the Act and

the rules and regulations thereunder.12

It is therefore ordered, pursuant to

section 19(b)(2) of the Act,13 that the

aforementioned portion of proposed

rule change SR–NASD–97–78 be, and

hereby is, approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.14

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–33128 Filed 12–18–97; 8:45 am]

BILLING CODE 8010–10–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39441; File No. SR–NASD–

97–83]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

National Association of Securities

Dealers, Inc. Relating to Listing Fees

for Nasdaq National Market Issuers

December 11, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on November 13,

1997, the National Association of

Securities Dealers, Inc. (‘‘NASD’’ or

‘‘Association’’), through its wholly

owned subsidiary, the Nasdaq Stock

Market, Inc. (‘‘Nasdaq’’), filed with the

Securities and Exchange Commission

(‘‘SEC’’ or ‘‘Commission’’) the proposed

rule change as described in Items I, II,

and III below, which Items have been

prepared by the NASD.1 The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons.

1. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The NASD is proposing to amend

NASD Rule 4510 to revise the annual

fees for Nasdaq National Market issuers

and to make conforming changes to Rule

4520. Below is the text of the proposed

rule change. Proposed new language is

in italics; proposed deletions are in

brackets.

Rule 4510. The Nasdaq National Market

(a) Entry Fee

(1) When an issuer submits an

application for inclusion of any class of

its securities in the Nasdaq National

Market, it shall pay to The Nasdaq Stock

Market, Inc.:

(A) a one-time company listing fee of

$5,000 (which shall include a $1,000

non-refundable processing fee); and

[(B) for each class of security listed, a

fee calculated on a graduated rate of

$.005 per share for the first 5 million

shares, $.0025 per share for each share

between 5,000,001 and 15 million,

inclusive, and $.001 per share for each

share over 15 million, based on the total

number of shares outstanding. Entry

fees paid by a company for all classes

of securities listed on the Nasdaq

National Market, regardless of the date

those securities are listed, shall not

exceed $50,000 (inclusive of the $5,000

company listing fee).2]

(B) a fee calculated on total shares

outstanding according to the following

schedule:

Up to 1 million shares—$29,525

1+ to 2 million shares—$33,750

2+ to 3 million shares—$43,750

3+ to 4 million shares—$48,750

4+ to 5 million shares—$55,000

5+ to 6 million shares—$58,725

6+ to 7 million shares—$61,875

7+ to 8 million shares—$64,375

8+ to 9 million shares—$67,875

9+ to 10 million shares—$70,625

10+ to 11 million shares—$73,875

11+ to 12 million shares—$76,625

12+ to 13 million shares—$79,875

13+ to 14 million shares—$82,000

14+ to 15 million shares—$83,500

15+ to 16 million shares—$85,500

Over to 16 million shares—$90,000

[The entry fee shall be based on the

total number of] Total shares

outstanding means the aggregate of all

classes of equity securities [of the class]

to be included in the Nasdaq National

Market as shown in the issuer’s most

recent periodic report or in more recent

information held by Nasdaq or, in the

case of new issues, as shown in the

offering circular, required to be filed

with the issuer’s appropriate regulatory

authority. [and received by The Nasdaq

Stock Market, Inc.]

(3) no change

(4) no change

(b) Additional Shares

(1) The issuer of each class of

security, other than the American

Depositary Receipts, which is listed in

the Nasdaq National Market shall pay to

The Nasdaq [National] Stock Market,

Inc. the fee set forth in subparagraph (2)

below in connection with the issuance

of additional shares of each class of

listed security set forth In subparagraph

(3) below.

(2) no change

(3) no change

(4) Payment of the fee to The Nasdaq

Stock Market, Inc. shall be included

with the issuer notification to [the

Association] Nasdaq of the issuance of

additional shares of securities as

required under provisions of Rule

4310(c)(17) and Rule [4320(e)(16)]

4320(e)(15).

(c) Annual Fee—Domestic and Foreign

Issues

(1) As of January 1, [1993] 1998, the

issuer of each class of securities that is

a domestic or foreign issue listed in the

Nasdaq National Market shall pay to

The Nasdaq Stock Market, Inc. an

annual fee [(comprised of a base annual

fee and a variable annual fee) to be

computed as follows:] calculated on

total shares outstanding according to

the following schedule:

[(A) The base annual fee shall be

calculated on total shares outstanding 3

according to the following schedule:

Up to 1 million shares—$5,250
66708 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Notices

4Market capitalization is calculated by

multiplying total shares outstanding at year end

(except that convertible bonds, rights and warrants

are not included) times the price at year end.

5 [See footnote to Rule 4510(a)(1(B) defining

‘‘shares.’’] The term ‘‘shares’’ shall include common

and preferred stock, American Depositary Receipts

(ADRs), warrants, partnership interests, or any

other security listed on the Nasdaq SmallCap

Market. In the case of units, each component, but

not the unit itself, shall be considered separately as

an ‘‘equity security’’ for fee purposes.

6See notes to Rule [4510(a)(1)(B) and]

4520(a)(1)(B)(i), above.

1+ to 2 million shares—$5,750

2+ to 3 million shares—$6,250

3+ to 4 million shares—$6,750

4+ to 5 million shares—$7,250

5+ to 6 million shares—$7,750

6+ to 7 million shares—$8,250

7+ to 8 million shares—$8,750

8+ to 9 million shares—$9,250

9+ to 10 million shares—$9,750

10+ to 11 million shares—$10,250

11+ to 12 million shares—$10,750

12+ to 13 million shares—$11,250

13+ to 14 million shares—$11,750

14+ to 15 million shares—$12,250

15+ to 16 million shares—$12,750

Over 16 million shares—$13,250]

Up to 1 million shares—$10,710

1+ to 2 million shares—$10,960

2+ to 3 million shares—$11,210

3+ to 4 million shares—$11,460

4+ to 5 million shares—$11,710

5+ to 6 million shares—$11,960

6+ to 7 million shares—$12,210

7+ to 8 million shares—$12,460

8+ to 9 million shares—$12,710

9+ to 10 million shares—$12,960

10+ to 11 million shares—$17,255

11+ to 12 million shares—$17,505

12+ to 13 million shares—$17,755

13+ to 14 million shares—$18,005

14+ to 15 million shares—$18,255

15+ to 16 million shares—$18,505

16+ to 20 million shares—$18,755

20+ to 25 million shares—$22,795

25+ to 50 million shares—$26,625

50+ to 75 million shares—$32,625

75+ to 100 million shares—$43,125

Over 100 million shares—$50,000

[(B) The variable annual fee shall be

calculated at the rate of $.025 per $1,000

of market capitalization,4 but only for

market capitalization above $100

million.

(C) The annual fee (comprised of the

base and variable fee) shall be capped as

follows:

For companies with 10 million shares or

less—$10,000

For companies with 10+ to 20 million

shares—$15,000

For companies with more than 20

million shares—$20,000

(2) no change

(3) no change.

(d) Annual Fee—American Depositary

Receipts (ADRs)

(1) no change

(A) no change

(B) the sum of $500 or $.0005 per

share outstanding, whichever is higher,

up to a maximum of $6,000 of each

class of securities listed in the Nasdaq

National Market.

(2) The annual fee shall be based on

the total [amount of] shares outstanding

[securities] of the class included in the

Nasdaq National Market as shown in the

issuer’s most recent periodic report

required to be filed with the issuer’s

appropriate regulatory authority or in

more recent information held by

Nasdaq. [and received by the Nasdaq

Stock Market, Inc.]

(3) no change

(4) no change

Rule 5420. The Nasdaq SmallCap

Market

(a) Entry Fee

(1) no change

(A) no change

(B) no change

(i) Equity Securities

$1,000 or $.001 per share outstanding,

whichever is higher. For purposes of

this subparagraph, the term ‘‘equity

securities’’ includes all securities

eligible for inclusion in the Nasdaq

SmallCap Market not covered by

subparagraph (ii) hereof 5

(2) no change

(3) The entry fee shall be based on the

total shares [number of] outstanding

[securities] of the class to be included in

the Nasdaq SmallCap Market as shown

in the issuer’s most recent period report

or in more recent information held by

Nasdaq or, in the case of new issues, as

shown in the offering circular, required

to be filed with the issuer’s appropriate

regulatory [and received by The Nasdaq

Stock Market, Inc].

(b) no change

(c) no change

(d) no change

(1) no change

(A) Equity Securities

$500 or $.0005 per share outstanding,

whichever is higher. For purposes of

this subparagraph, the term ‘‘equity

securities’’ includes all securities

eligible for inclusion in the Nasdaq

SmallCap Market not covered by

paragraph [(ii)] (B) of this section.6

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

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. The NASD has

prepared summaries, set forth in

Sections (A), (B), and (C) below, of the

most significant aspects of such

statements.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

The proposed rule change will adjust

both the Entry Fee and the Annual Fee

for Nasdaq National Market issuers,

effective January 1, 1998. Nasdaq has

determined that an increase in the Entry

Fee and the Annual Fee for issuers

included on the Nasdaq National Market

is necessary. Nasdaq has not filed an

adjustment to its fee rates since the fall

of 1991. Since that time, Nasdaq has

committed increased resources in efforts

to strengthen market qualifications, to

communicate with investors, and to

prepare for closer integration of the

world’s equity markets. In particular,

during the last eighteen months,

substantial incremental annual expenses

have been incurred in the development

and operation of new information

services for issuers and investors. These

new information services include

nasdaq.com and Nasdaq Online. Such

additional services, while adding

considerable value to a Nasdaq listing,

were not envisioned when the 1991 fee

filing was put in effect.

Through nasdaq.com, the market

provides valuable information for

investors and prospective investors at

all levels. The Nasdaq website provides

internet access to pricing from all

markets. It also includes news, analyst

information, tear sheets, hot links to

EDGAR and other information which is

important to all investors. With Nasdaq

Online, companies now have access to

the information they need to better serve

their shareholders. Nasdaq Online

provides companies with market and

transaction data, analyst estimates,

institutional ownership data, and

fundamental financial information in an

integrated system accessible through the

internet. This service is important in

helping issuers fulfill their

responsibilities to shareholders.

The proposed fee increase will also be

used to support the continued

expansion and technological

enhancements of Nasdaq’s qualification

and market surveillance systems and

programs. Initiatives include the

development of an automated issuer risk

assessment system and an automated
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Notices 66709

7See Securities Exchange Act Release No. 38961

(Aug. 22, 1997), 62 FR 45895 (Aug. 29, 1997). 8 17 CFR 200.30–3(a)(12).

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

2SCCP, Philadep, DTC, and NSCC have

submitted rule filings relating to the Agreement

which are being addressed in a separate order.

Securities Exchange Act Release Nos. 39220

(October 8, 1997, 62 FR 53848 (October 16, 1997)

[File No. SR–NSCC–97–08]; 39221 (October 8,

1997), 62 FR 53680 (October 15, 1997), [File No.

SR–Philadep–97–04]; 39222 (October 8, 1997), 62

FR 53847 62 FR 53847 (October 16, 1997) [File No.

SR–DTC–97–16]; and 39223; (October 8, 1997), 62

FR 53681 (October 15, 1997) [File No. SR–SCCP–

97–04].

Internet surveillance system. Additional

resources will be committed to

additional listing qualifications staff to

insure compliance with the recently

approved increase in Nasdaq’s listing

requirements.7 These initiatives, in

concert with the additional services

provided to companies and investors,

will enhance the overall quality of

companies listed on Nasdaq, foster the

protection of investors and promote the

integrity of The Nasdaq Stock Market.

The Nasdaq Stock Market expects to

witness the continuing rapid growth

and integration of the world’s equity

capital markets in the next few years.

Nasdaq plans to be in the position to

meet the growing demand of global

investors for ownership of U.S.

securities. This will require refinements

to the market and further development

of the global positioning of U.S.

companies. The proposed fee increase

will be used to cover costs that Nasdaq

is incurring by providing these extra

services to Nasdaq issuers, their

shareholders and potential investors.

The proposed rule change also deletes

references to filings received by Nasdaq

because the receipt by Nasdaq is not the

determinative test for which periodic

report is most recent. Furthermore, it

makes other conforming changes to

clarify the text of the applicable rules.

The NASD believes that the proposed

rule change is consistent with the

provisions of Section 15A(b)(5) and (6)

of the Act. The proposed rule change is

consistent with Section 15A(b)(5) as it

provides for the equitable allocation of

reasonable dues, fees, and other charges

among members and issuers using the

Nasdaq system. The proposed rule

change is consistent with section

15A(b)(6) as it is designed to promote

just and equitable principles of trade

and does not permit unfair

discrimination between customers,

issuers, brokers or dealers. As noted

above, the fee increase reflects

additional costs that Nasdaq incurs for

services provided to issuers.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

The NASD 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, as amended.

(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. 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 self-regulatory

organization consents, the Commission

will:

A. By order approve such 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.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street NW.,

Washington, DC 20549. 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 will also be

available for inspection and copying at

the principal office of the NASD. All

submissions should refer to File No.

SR–NASD–97–83 and should be

submitted by January 9, 1998.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–33193 Filed 12–18–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

Release No. 34–39445; File No. SR–PHLX–

97–59

Self-Regulatory Organizations;

Philadelphia Stock Exchange,

Incorporated, Notice of Filing and

Order Granting Accelerated Approval

of a Proposed Rule Change Relating to

the Decision to Limit its Clearance and

Settlement Business and to Withdraw

From the Securities Depository

Business

December 11, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’),1 notice is hereby given that on

November 14, 1997, the Philadelphia

Stock Exchange, Incorporated,

(‘‘PHLX’’) filed with the Securities and

Exchange Commission (‘‘Commission’’)

the proposed rule change (File No. SR–

PHLX–97–59) as described in Items I

and II below, which items have been

primarily prepared by PHLX. The

Commission is publishing this notice

and order to solicit comments from

interested parties and to grant

accelerated approval of the proposal.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposal Rule Change

The proposed rule change will allow

PHLX to limit its clearing services and

to stop providing depository services

that it currently operates through its

wholly owned subsidiaries, Stock

Clearing Corporation of Philadelphia

(‘‘SCCP’’) and Philadelphia Depository

Trust Company (‘‘Philadep’’),

respectively, in order to focus its

resources on the operation of the

exchange. PHLX has entered into an

agreement with SCCP, Philadep, The

Depository Trust Company (‘‘DTC’’),

and the National Securities Clearing

Corporation (‘‘NSCC’’), dated June 18,

1997, that set forth the arrangements

relating to PHLX’s decision

(‘‘Agreement’’).2