82652 Federal Register / Vol. 89, No. 198 / Friday, October 11, 2024 / Notices 

21 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 100461 

(July 3, 2024), 89 FR 56457 (‘‘Notice’’). Comments 

received on the Notice are available on the 

Commission’s website at: https://www.sec.gov/ 

comments/sr-nasdaq-2024-029/ 

srnasdaq2024029.htm. 

4 15 U.S.C. 78s(b)(2). 

5See Securities Exchange Act Release No. 

100791, 89 FR 68671 (Aug. 27, 2024) (designating 

October 7, 2024 as the date by which the 

Commission shall either approve, disapprove, or 

institute proceedings to determine whether to 

disapprove the proposed rule change). 

6Amendment No. 1 to the proposed rule change 

was submitted on September 27, 2024, and it was 

subsequently withdrawn on October 3, 2024. 

7 In Amendment No. 2, the Exchange (1) clarified 

the application of Rule 5810(c)(3)(H) in extending 

the ten consecutive day compliance period for 

regaining compliance with the minimum bid price 

requirement, (2) clarified that the failure to satisfy 

the requirements during the compliance period(s) 

applicable to the initial bid price deficiency will 

result in the issuance of a Staff Delisting 

Determination Letter, and (3) made other technical 

and non-substantive changes for readability. 

Because Amendment No. 2 does not materially alter 

the substance of the proposed rule change and 

makes clarifying modifications, Amendment No. 2 

is not subject to notice and comment. The full text 

of Amendment No. 2 can be found on the 

Commission’s website at: https://www.sec.gov/ 

comments/sr-nasdaq-2024-029/srnasdaq2024029- 

526675-1511382.pdf. 

8The Exchange states that each tier of Nasdaq 

listed securities includes a requirement that 

specified securities maintain a $1.00 minimum bid 

price. See Notice, supra note 3, at 56457, n.3 (citing 

to Rule 5550(a)(2) (Primary Equity Security listed 

on the Nasdaq Capital Market) and Rule 5450(a)(1) 

(Primary Equity Security listed on the Nasdaq 

Global or Global Select Markets). 

9Rule 5810(c)(3)(A) states: ‘‘A failure to meet the 

continued listing requirement for minimum bid 

price shall be determined to exist only if the 

deficiency continues for a period of 30 consecutive 

business days. Upon such failure, the Company 

shall be notified promptly and shall have a period 

of 180 calendar days from such notification to 

achieve compliance. Compliance can be achieved 

during any compliance period by meeting the 

applicable standard for a minimum of 10 

consecutive business days during the applicable 

compliance period, unless Staff exercises its 

discretion to extend this 10 day period as discussed 

in Rule 5810(c)(3)(H).’’ Rules 5810(c)(3)(A)(i) and 

(ii) also provide an additional 180 day compliance 

period for companies listed on Capital Markets, or 

Global Select or Global Market that transfer to 

Capital Markets, that are not in compliance with the 

bid price requirement prior to expiration of the first 

180 day compliance period if certain requirements 

are met. 

10The Exchange states that reverse stock splits 

have the effect of increasing a company’s stock 

price by consolidating the outstanding shares. See 

Notice, supra note 3, at 56457. 

11Rule 5005(a)(35) defines ‘‘Publicly Held 

Shares’’ as: ‘‘shares not held directly or indirectly 

by an officer, director or any person who is the 

beneficial owner of more than 10 percent of the 

total shares outstanding.’’ See also e.g., Rules 

5550(a)(3) and (4) (requiring 300 public holders and 

at least 500,000 Publicly Held Shares for Primary 

Equity Securities listed on the Nasdaq Capital 

Market) and Rules 5450(a)(2), 5450(b)(1)(B), 

5450(b)(2)(B) and 5450(b)(3)(B) (requiring 400 total 

holders and, depending on other characteristics of 

the company, either 750,000 or 1.1 million Publicly 

Held Shares for Primary Equity Securities listed on 

the Nasdaq Global Market). 

12See Notice, supra note 3, at 56457. 

13See id. 

14See id. at 56457, n.5. 

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 website viewing and 

printing 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. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–GEMX–2024–36 and should be 

submitted on or before November 1, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–23529 Filed 10–10–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101271; File No. SR– 

NASDAQ–2024–029] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Order 

Granting Approval of a Proposed Rule 

Change, as Modified by Amendment 

No. 2, To Modify the Application of Bid 

Price Compliance Periods 

October 7, 2024. 

I. Introduction 

On June 21, 2024, The Nasdaq Stock 

Market LLC (‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Exchange Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to modify the application of the 

bid price compliance periods where a 

listed company takes an action to 

achieve compliance with the bid price 

requirement and that action causes noncompliance with another listing 

requirement. The proposed rule change 

was published for comment in the 

Federal Register on July 9, 2024.3 On 

August 21, 2024, pursuant to Section 

19(b)(2) of the Exchange Act,4 the 

Commission designated a longer period 

within which to approve the proposed 

rule change, disapprove the proposed 

rule change, or institute proceedings to 

determine whether to disapprove the 

proposed rule change.5 On October 3, 

2024, the Exchange filed Amendment 

No. 2 6 to the proposed rule change.7

This order approves the proposed rule 

change, as modified by Amendment No. 

2. 

II. Description of the Proposed Rule 

Change, as Modified by Amendment 

No. 2 

The Exchange is proposing to amend 

Rule 5810(c)(3)(A) to modify the 

application of the bid price compliance 

periods where a listed company takes an 

action to achieve compliance with the 

$1.00 minimum bid price continued 

listing requirement 8 (the ‘‘Bid Price 

Requirement’’) and that action causes 

non-compliance with another listing 

requirement.9

The Exchange states that listed 

companies may effect a reverse stock 

split 10 to regain compliance with the 

Bid Price Requirement. According to the 

Exchange, the reduction in the number 

of shares caused by the reverse stock 

split results in a proportional reduction 

in the number of Publicly Held Shares 11

and depending on how fractional shares 

are treated, may also reduce the number 

of holders of the company’s securities.12

As a result, the Exchange states that a 

reverse stock split used to regain 

compliance with the Bid Price 

Requirement may result in the 

company’s non-compliance with other 

Exchange listing rules that require a 

certain number of holders and Publicly 

Held Shares.13 Upon a company’s 

failure to satisfy the applicable holder or 

number of Publicly Held Shares 

requirement, Rule 5810(c)(2)(A) 

generally allows the company a 45- 

calendar day period to provide a plan to 

regain compliance to Nasdaq staff and 

Rule 5810(c)(2)(B) generally provides 

that Nasdaq staff may grant an extension 

of up to 180 calendar days for the 

company to achieve compliance.14

Currently, a company that regains 

compliance with the Bid Price 

Requirement by taking a corporate 

action (e.g., a reverse stock split) that 

results in the company’s security falling 

below the numeric threshold for another 

Exchange listing requirement could be 


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Federal Register / Vol. 89, No. 198 / Friday, October 11, 2024 / Notices 82653 

15Nasdaq provided the following example of how 

its current rules work for a Nasdaq Capital Market 

listed company seeking to regain compliance with 

a bid price deficiency. Company A with 1,600,000 

Publicly Held Shares attempts to regain compliance 

with the Bid Price Requirement by effecting a 

reverse stock split at a ratio of 1-for-4, which would 

initially increase the Company A’s stock price 

above $1.00. See id. at 56457. Assuming Company 

A thereafter maintains a closing bid price above 

$1.00 for ten consecutive business days, under 

current Rule 5810(c)(3)(A), Company A will achieve 

compliance with the Bid Price Requirement at the 

conclusion of the tenth consecutive business day. 

See id. However, in this example, at the same time 

that the reverse stock split increased Company A’s 

stock price, the 1-for-4 reverse stock split also 

reduced the number of Publicly Held Shares from 

1,600,000 to 400,000, causing Company A to no 

longer satisfy the minimum number of Publicly 

Held Shares required to remain listed on the 

Nasdaq Capital Market. See id. As a result, under 

these circumstances, the reverse stock split would 

allow Company A to regain compliance with the 

Bid Price Requirement of Rule 5550(a)(2) while at 

the same time causing non-compliance with the 

minimum Publicly Held Shares requirement of Rule 

5550(a)(4). See id. 

16See id. 

17See id. 

18See proposed Rule 5810(c)(3)(A). 

19See proposed Rule 5810(c)(3)(A). The Exchange 

states that Company A described in footnote 15 

above ‘‘would continue to be considered noncompliant with the Bid Price Requirement until 

both the new Publicly Held Shares deficiency is 

cured and thereafter the company maintains a $1.00 

bid price for a minimum of ten (10) consecutive 

business days.’’ See Notice, supra note 3, at 56457– 

58. The Exchanges states that all of this must be 

accomplished during the compliance period 

applicable to the initial Bid Price Requirement 

deficiency. See id. at 56458. Accordingly, the 

proposed rule would not allow Company A to 

submit a plan to regain compliance with the 

Publicly Held Shares requirement and would 

instead require Company A to regain compliance 

with both rules within the applicable compliance 

period for the Bid Price Requirement pursuant to 

Rule 5810(c)(3)(A), unless extended pursuant to 

Rule 5810(c)(3)(H). See id. 

20 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). 

21 15 U.S.C. 78f(b)(5). 

22The Commission notes that this reference to 

‘‘listing standards’’ is referring to both initial and 

continued listing standards. 

23See, e.g., Securities Exchange Act Release Nos. 

88716 (Apr. 21, 2020), 85 FR 23393 (Apr. 27, 2020) 

(SR–NASDAQ–2020–001) (Order Approving a 

Proposed Rule Change To Modify the Delisting 

Process for Securities With a Bid Price at or Below 

$0.10 and for Securities That Have Had One or 

More Reverse Stock Splits With a Cumulative Ratio 

of 250 Shares or More to One Over the Prior TwoYear Period); 88389 (Mar. 16, 2020), 85 FR 16163 

(Mar. 20, 2020) (SR–NASDAQ–2019–089) (Notice of 

Filing of Amendment No. 1 and Order Granting 

Accelerated Approval of a Proposed Rule Change, 

as Modified by Amendment No. 1, To Amend Rule 

5815 To Preclude Stay During Hearing Panel 

Review of Staff Delisting Determinations in Certain 

Circumstances). See also Securities Exchange Act 

Release No. 81856 (Oct. 11, 2017), 82 FR 48296, 

48298 (Oct. 17, 2017) (SR–NYSE–2017–31) (Notice 

of Filing of Amendment No. 1 and Order Granting 

Accelerated Approval of a Proposed Rule Change, 

as Modified by Amendment No. 1, To Amend the 

Listed Company Manual To Adopt Initial and 

Continued Listing Standards for Subscription 

Receipts) (stating that ‘‘[a]dequate standards are 

especially important given the expectations of 

investors regarding exchange trading and the 

imprimatur of listing on a particular market’’ and 

that ‘‘[o]nce a security has been approved for initial 

listing, maintenance criteria allow an exchange to 

monitor the status and trading characteristics of that 

issue . . . so that fair and orderly markets can be 

maintained.’’). 

24See supra note 15 and accompanying text. 

25See supra notes 15 and 20. 

26See Notice, supra note 3, at 56457. 

27See id. at 56458. 

granted additional time of up to 180 

calendar days from initial notification 

by Nasdaq staff to regain compliance 

with the newly created deficiency.15

Nasdaq believes that it is not 

appropriate for a company to receive 

additional time to cure non-compliance 

with such newly violated listing 

standard.16 Accordingly, Nasdaq states 

that it is proposing this rule change to 

prevent companies from benefiting from 

additional time for the subsequent 

deficiency that was ultimately caused 

by the company’s non-compliance with 

the Bid Price Requirement.17

Under the proposed rule, such 

company will not be considered to have 

regained compliance with the Bid Price 

Requirement if the company takes an 

action to achieve compliance and that 

action results in the company’s security 

falling below the numeric threshold for 

another Exchange listing requirement 

without regard to any compliance 

periods otherwise available for that 

other listing requirement.18 In such 

event, the company will continue to be 

considered non-compliant until both: (i) 

the other deficiency is cured and (ii) 

thereafter the company meets the bid 

price standard for a minimum of ten 

consecutive business days, unless 

Nasdaq staff exercises its discretion to 

extend this ten day period as discussed 

in Rule 5810(c)(3)(H). If the company 

does not demonstrate compliance with 

(i) and (ii) during the compliance 

period(s) applicable to the initial bid 

price deficiency, Nasdaq will issue a 

Staff Delisting Determination Letter.19

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the proposed rule change, as 

modified by Amendment No. 2, is 

consistent with the requirements of the 

Exchange Act and the rules and 

regulations thereunder applicable to a 

national securities exchange.20 In 

particular, the Commission finds that 

the proposed rule change, as modified 

by Amendment No. 2, is consistent with 

Section 6(b)(5) of the Exchange Act,21

which requires, among other things, that 

the rules of an exchange be designed to 

prevent fraudulent and manipulative 

acts and practices, 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 market system, and, in 

general, to protect investors and the 

public interest, and not be designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The development and enforcement of 

meaningful listing standards 22 for an 

exchange is of critical importance to 

financial markets and the investing 

public. Among other things, such listing 

standards help ensure that exchangelisted companies will have sufficient 

public float, investor base, and trading 

interest to provide the depth and 

liquidity to promote fair and orderly 

markets. Meaningful listing standards 

also are important given investor 

expectations regarding the nature of 

securities that have achieved an 

exchange listing, and the role of an 

exchange in overseeing its market and 

assuring compliance with its listing 

standards.23

As discussed above, currently, a 

company that regains compliance with 

the Bid Price Requirement by taking a 

corporate action (e.g., a reverse stock 

split) that results in the company’s 

security falling below the numeric 

threshold for another Exchange listing 

requirement could be granted additional 

time (up to 180 calendar days) to regain 

compliance with the newly created 

deficiency.24 The Exchange believes 

that this scenario, as described in the 

examples provided in the Notice,25

creates confusion for investors about a 

company’s ability to maintain 

compliance with its listing rules thereby 

negatively impacting investor 

confidence in the market.26 The 

Exchange believes that its proposal to 

address these concerns will protect 

investors and provide additional clarity 

to Exchange listed companies and 

market participants by preventing a 

company from receiving a compliance 

determination (for its initial bid price 

deficiency) and communicating to 

investors that it has regained 

compliance until it has cured both the 

new deficiency caused by its corporate 

action and thereafter its bid price 

deficiency during the compliance 

period applicable to the initial Bid Price 

Requirement deficiency.27

The Exchange’s proposal is 

reasonably designed to enhance its 

continued listing standards, particularly 

those involving issuers with securities 

that trade near or below the Bid Price 

Requirement that may be motivated to 

utilize reverse stock splits to 

inappropriately delay delisting, thereby 

protecting investors and the public 


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82654 Federal Register / Vol. 89, No. 198 / Friday, October 11, 2024 / Notices 

28See supra note 20. 

29Under the proposal, if the reverse split causes 

a new deficiency, the company will not be deemed 

compliant with the Bid Price Requirement even if 

it has a bid price above $1.00 for ten consecutive 

days after the reverse split until the new deficiency 

is first cured, and thereafter the bid price 

requirement is met for ten consecutive business 

days or such additional time period pursuant to 

Rule 5810(c)(3)(H). 

30The Exchange has stated, for example, that the 

bid price compliance periods are ‘‘designed to 

allow adequate time for a company facing 

temporary business issues, a temporary decrease in 

the market value of its securities, or temporary 

market conditions to come back into compliance 

with a bid price deficiency.’’ See Securities 

Exchange Act Release No. 87982 (Jan. 15, 2020), 85 

FR 3736, 3737 (Jan. 22, 2020) (SR–NASDAQ–2020– 

001) (Notice of Filing of Proposed Rule Change to 

Modify the Delisting Process for Securities with a 

Bid Price Below $0.10 and for Securities that Have 

Had One or More Reverse Stock Splits with a 

Cumulative Ratio of 250 or More to One over the 

Prior Two Year Period). 

31See Letter from Joseph Corcoran, Managing 

Director, Associate General Counsel, Securities 

Industry and Financial Markets Association, dated 

July 30, 2024; Thomas H. Merritt, Deputy General 

Counsel, Virtu Financial, Inc., dated Aug. 5, 2025; 

Letter from Daniel Zinn, General Counsel, and 

Flavia Vehbiu, Deputy General Counsel, OTC 

Markets Group Inc., dated Sept. 17, 2024. See also 

Joint Letter from Christopher A. Iacovella, President 

and Chief Executive Officer, American Securities 

Association, Stephen Hall, Legal Director, Better 

Markets, Tyler Gellasch, President and CEO, 

Healthy Markets Association, John Ramsay, Chief 

Market Policy Officer, Investors Exchange LLC, 

Joseph Saluzzi, Partner, Themis Trading LLC, dated 

Aug. 23, 2024, at 2, n.4 (stating that recent 

Exchange proposals, including SR–NASDAQ–2024– 

029, to amend listing rules to address concerns 

regarding ‘‘listed penny stocks’’ ‘‘represent steps in 

the right direction’’). The comment letters received 

also express support for additional proposals to 

enhance exchange listing standards to further 

address investor protection concerns, particularly 

those involving Nasdaq listed companies with lowpriced securities. Nasdaq states that it is 

considering other changes to the delisting process 

applicable to companies that are non-compliant 

with the Bid Price Requirement and such changes 

will be subject to a separate rule filing. See Notice, 

supra note 3, at 56458, n.10. See, e.g., Securities 

Exchange Act Release No. 100767 (Aug. 19, 2024), 

89 FR 68228 (Aug. 23, 2024) (SR–NASDAQ–2024– 

045) (Notice of Filing of Proposed Rule Change to 

Modify the Application of the Minimum Bid Price 

Compliance Periods and the Delisting Appeals 

Process for Bid Price Non-Compliance in Listing 

Rules 5810 and 5815 Under Certain Circumstances). 

In approving this proposal, the Commission is 

finding the proposal before us is consistent with the 

Exchange Act. 

32 Id. 

33 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

interest. In particular, the proposal 

reasonably addresses a gap in the 

Exchange’s current continued listing 

standards that potentially allows an 

issuer to delay delisting, through 

corporate action taken to cure a Bid 

Price Requirement deficiency that then 

results in a deficiency in another 

numeric continued listing requirement, 

and thereby remain listed on the 

Exchange for an extended period of time 

despite not maintaining the Exchange 

standards required for continued 

listing.28

Importantly, the Exchange’s proposal 

also prevents a company from 

requesting or receiving a compliance 

determination for its initial Bid Price 

Requirement deficiency and 

communicating to investors that it has 

regained compliance with the 

Exchange’s listing requirements until it 

has also cured any non-compliance with 

other numeric listing requirements 

caused by its actions to cure the initial 

Bid Price Requirement deficiency.29 If 

the company does not meet both these 

requirements, in that order, during the 

compliance period applicable to the 

initial bid price deficiency, the 

Exchange will issue a Staff Delisting 

Determination Letter. Furthermore, 

while the Commission recognizes that 

the Exchange delisting process is in part 

designed to allow companies 

experiencing temporary financial and/or 

business issues to regain compliance 

with continued listing standards,30 the 

proposal reasonably balances the intent 

of the delisting process with the need to 

prevent companies from taking 

advantage of the delisting process 

through multiple extensions to remain 

listed while failing to comply with the 

Exchange’s continued listing standards, 

contrary to the goal of protecting 

investors and the public interest. 

Finally, the Commission notes that 

the comment letters received on the 

proposal were generally supportive.31

For the reasons discussed above, the 

Commission finds that this proposed 

rule change, as modified by Amendment 

No. 2, is consistent with the 

requirements of the Exchange Act. 

IV. Conclusion 

It Is Therefore Ordered, pursuant to 

Section 19(b)(2) of the Exchange Act,32

that the proposed rule change (SR– 

NASDAQ–2024–029), as modified by 

Amendment No. 2, be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.33

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–23535 Filed 10–10–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101266; File No. SR–ISE– 

2024–47] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Establish Fees for Its 

Expanded Co-Location Services 

October 7, 2024. 

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 

September 24, 2024, Nasdaq ISE, LLC 

(‘‘ISE’’ or ‘‘Exchange’’) 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 Exchange. 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 

The Exchange proposes to establish 

fees for its expanded co-location 

services. The text of the proposed rule 

change is available on the Exchange’s 

website at https://listingcenter.

nasdaq.com/rulebook/ise/rules, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room. 

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 

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 

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 Exchange filed a proposal to 

expand its co-location services by 

offering new cabinet, power, and power 

distribution unit options in the 


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