[Federal Register Volume 74, Number 64 (Monday, April 6, 2009)]
[Notices]
[Pages 15552-15560]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-7630]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59663; File No. SR-NASDAQ-2009-018]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Revisions and Restructuring of the NASDAQ Listing Rules

March 31, 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 March 12, 2009, The NASDAQ Stock Market LLC (``Nasdaq'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described

[[Page 15553]]

in Items I, II, and III below, which Items have been prepared by 
Nasdaq. Nasdaq included in its proposed rule change Exhibit 5A, which 
is the text of the proposed rule change; Exhibit 5B, which is a copy of 
the current 4000 Series rules as they currently exist which are being 
proposed for amendment in Exhibit 5A; and Exhibit 5C, which is a table 
that shows the location of the old rules to where they now reside in 
the new rule text.\3\ The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Exhibits 5A, 5B, and 5C are available on the Commission's 
Web site (http://www.sec.gov/).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes a rule change to reorganize the rules relating to 
the qualification, listing, and delisting of companies listed, or 
applying to list on Nasdaq (``Companies''). Nasdaq is proposing to 
house these rules, which are currently found in the 4000 Series of the 
Marketplace Rules, into a clearer and more intuitive structure under a 
new 5000 Series. In addition, Nasdaq has taken this opportunity to 
eliminate redundancies and clarify the language used for the rule text. 
The text of the proposed rule change is available from Nasdaq's Web 
site at http://nasdaq.cchwallstreet.com, at Nasdaq's principal office, 
and at the Commission's Public Reference Room. The new rules shall 
become operative on April 13, 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. The 
text of these statements may be examined at the places specified in 
Item IV below, and is set forth in Sections A, B, and C below.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Nasdaq proposes to reorganize the rules applicable to the 
qualification, listing, and delisting of Companies on Nasdaq (the 
``Listing Rules''), which are found in the Rule 4000 Series of the 
Nasdaq manual (the ``4000 Series''), in an effort to make the rules 
more transparent and clear.\4\ As these rules have evolved over the 
last thirty years, they have become very complex and can be difficult 
to navigate, especially for those who are unfamiliar with their 
structure. Nasdaq believes that there are opportunities to reduce 
redundancies and greatly improve the overall organization of the 
Listing Rules. As such, Nasdaq proposes to remove the listing rules 
from the 4000 Series and restate them in a simpler, more transparent 
and reader-friendly format in the proposed Rule 5000 Series (the ``5000 
Series''), which is presently unused.
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    \4\ The Listing Rules are divided into different sections within 
the 4000 Series, with each section numbered as a 100th of 4000 
(e.g., 4100 ``General'', 4200 ``Definitions,'' etc.). Nasdaq also 
refers to these sections as Series when making reference to all 
rules that fall under the section. For example, Rule 4310 would be 
said to reside in the 4300 Series. Nasdaq uses the same convention 
for referring to sections of the proposed 5000 Series.
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    Nasdaq represents that it is not making any substantive changes to 
the Listing Rules in this proposal. Rather, as described in greater 
detail below, Nasdaq proposes to: (1) Reorganize and recast much of the 
old 4000 Series into a more logical structure; (2) apply plain English 
principles where needed; (3) add descriptive titles and introductory 
language; (4) define terms for consistency; (5) delete obsolete or 
incongruent rules; and (6) add or amend rule text where appropriate to 
remove ambiguity, to clarify existing practices, and to resolve ongoing 
questions from the public. To assist with understanding the changes 
made to the Listing Rules, Nasdaq created a table that maps the 
location of every existing Listing Rule in the 4000 Series to its place 
in the proposed new 5000 Series. The table provides both the old rule 
number and rule text, together with the revised rule text and new rule 
citation to the rule's location in the proposed 5000 Series. In 
addition, the table provides a brief description of the changes made to 
the old rule. Nasdaq also notes in the table rules that have been left 
in the 4000 Series,\5\ rules that have been deleted altogether, and any 
newly-created rules added to the proposed 5000 Series (such as a new 
defined term). Nasdaq believes that, when the table is read in 
conjunction with this filing, readers will have a clear understanding 
of the changes made to the 4000 Series.
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    \5\ Nasdaq determined to leave certain rules that do not relate 
to the listing of Company securities in the 4000 Series.
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Organization
    The current 4000 Series contains the initial and continued listing 
standards for all three Nasdaq market tiers: The Nasdaq Global Select 
Market, The Nasdaq Global Market, and The Nasdaq Capital Market. In 
addition to listing standards, the 4000 Series also contains rules 
relating to trading of, and market making in, Nasdaq securities, as 
found in the 4100, 4600 and 4700 Series. The rules relating to the 
listing of securities are found in the 4200, 4300, 4400, 4500, and 4800 
Series. Specifically, the 4200 Series sets forth general definitions; 
the 4300 Series sets forth qualitative listing standards for all Nasdaq 
market tiers, as well as initial and continued listing requirements for 
the Capital Market; the 4400 Series contains the initial listing 
requirements for the Global Select Market and Global Market, and the 
continued listing requirements for the Global Market, including 
requirements for listing other securities, such as Index Warrants and 
SEEDS; the 4500 Series contains all the fees required to be paid for 
listing on Nasdaq; and finally, the 4800 Series contains the 
requirements and procedures regarding Nasdaq's appellate process for a 
Company denied initial or continued listing.
    Each of Nasdaq's three market tiers has its own specific listing 
standards that are progressively more stringent than the tier below. 
Today, the listing rules are all derived from the rules applicable to 
the Capital Market, so readers must have a working knowledge of the 
Capital Market rules to understand the listing requirements of the 
other tiers. The need to reference back to the Capital Market rules 
when reading the Global Market or Global Select Market rules is often 
confusing, and is made particularly difficult given that the rules 
applicable to the Capital Market and the other tiers are located far 
from each other in the current rules.
    Nasdaq proposes to organize the new Listing Rules by placing all 
quantitative tier-specific initial and continued listing standards 
within individual rule sections. Thus, the requirements for the Nasdaq 
Global Select Market will be contained in the proposed 5300 Series, the 
requirements for the Nasdaq Global Market will be contained in the 
proposed 5400 Series, and the requirements for the Nasdaq Capital 
Market will be contained in the proposed 5500 Series. Nasdaq is also 
proposing to create a new 5000 Series that contains general definitions 
applicable to Companies, a new 5100 Series that contains a description 
of Nasdaq's discretionary authority, and a new 5200 Series that 
contains qualitative requirements relating to all Companies seeking to 
list or already listed on Nasdaq. Nasdaq is proposing to create a new 
5600 Series that contains a stand-alone rule set dedicated to the

[[Page 15554]]

corporate governance requirements for all Nasdaq-listed Companies. 
Last, Nasdaq is proposing a new 5700 Series that contains the 
requirements for listing other securities, a new 5800 Series that 
contains the requirements and processes relating to a Company that 
fails to meet a listing standard, and a new 5900 Series that contains 
the fees required to be paid for listing on Nasdaq.
    Within the proposed 5300, 5400 and 5500 Series, which, as noted, 
are each dedicated to a particular market, Nasdaq has organized all 
applicable quantitative initial and continued listing standards. Each 
of these three Series uses a numbering convention whereby the rules 
applicable to initial listing range from 01 to 49 and the continued 
listing rule numbers range from 50 to 99. For example, all initial 
listing rules applicable to the Nasdaq Global Market are housed in 
Rules 5405 through 5415, while the Global Market continued listing 
rules are housed in Rules 5450 through 5460. Nasdaq believes that both 
new readers and those familiar with the current rule structure will 
find the information they seek much more quickly under the new rule 
structure.
    Nasdaq has also divided the quantitative listing standards in the 
old rules into two subcategories in the new rules: listing requirements 
and listing standards. Under the new rules, listing requirements are 
quantitative metrics, all of which a company must meet for initial or 
continued listing on a particular tier. Listing standards consist of 
bundles of quantitative metrics; however, unlike listing requirements, 
a company must meet at least one listing standard to become listed or 
to continue listing. For example, the three Entry Standards found in 
current Rule 4420(a)-(c) contain certain repetitive quantitative 
requirements relating to bid price, publicly held shares, and round lot 
shareholders. Nasdaq took these common quantitative metrics and placed 
them in new Rule 5405(a) as initial listing requirements. For each 
bundle of quantitative requirements that remained under each old entry 
standard, Nasdaq created individual listing standards. It should be 
noted that, under old Entry Standard 3 found in Rule 4420(c), Nasdaq 
was able to create two new listing standards in the proposed new 5000 
Series, Rules 5405(b)(3) and (4).\6\ Under the old rule, Entry Standard 
3 contained an alternative quantitative listing requirement of either a 
market value of listed securities of $75 million or total assets and 
total revenue of $75 million each.\7\ Nasdaq believes that the two 
metrics are better understood as separate, stand-alone listing 
standards. The remaining Entry Standard 3 quantitative metrics are 
either captured under the new listing requirements or duplicated in 
each of the newly-created listing standards. Like all changes proposed 
by Nasdaq in this filing, this new structure is not a substantive 
change and in no way changes the application of the listing standards 
under the existing rules.
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    \6\ The new listing standards are titled ``Market Value 
Standard'' and ``Total Assets/Total Revenue Standard.''
    \7\ Rule 4420(c)(6) requires that ``The issuer has: (A) A market 
value of listed securities of $75 million (currently traded issuers 
must meet this requirement and the bid price requirement under Rule 
4420(c)(3) for 90 consecutive trading days prior to applying for 
listing); or (B) total assets and total revenue of $75 million each 
for the most recently completed fiscal year or two of the last three 
most recently completed fiscal years.''
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    As noted, Nasdaq has created a stand-alone section in the proposed 
5000 Series for rules that apply to all tiers of securities,\8\ which 
includes an overview of the application process,\9\ prerequisites for 
applying to list,\10\ and other obligations and requirements for 
listing.\11\ In addition, Nasdaq has created a stand-alone section for 
listing standards applicable to ``other securities,'' which includes 
listing requirements for Exchange Traded Funds, Index-Linked 
Securities, Selected Equity-linked Debt Securities, Trust Issued 
Receipts, and Index Warrants, as well as generic standards.\12\ 
Nasdaq's corporate governance standards are also contained in a single, 
stand-alone section.\13\
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    \8\ 5200 Series.
    \9\ Rule 5205.
    \10\ Rule 5210.
    \11\ Rules 5215-5290.
    \12\ 5700 Series.
    \13\ 5600 Series.
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    Also included in the proposed 5000 Series are the rules relating to 
fees currently found in the 4500 Series. Nasdaq proposes moving the 
4500 Series to the new 5900 Series with only minor non-substantive 
changes that do not affect the fees charged by Nasdaq. Nasdaq proposes, 
however, moving Rule 4550, which relates to written interpretations of 
Nasdaq rules, to the proposed 5600 Series. Nasdaq believes that it is 
more appropriate to move Rule 4550 to the proposed 5600 Series, which 
relates to corporate governance requirements, since the vast majority 
of interpretations are requested for corporate governance rules. Nasdaq 
has, however, provided a cross-reference to proposed new Rule 5600, 
which houses Rule 4550, in the introductory paragraph to the proposed 
5900 Series.
    Nasdaq has sought to clarify the process that applies to companies 
that fail to meet Nasdaq's listing standards, which is currently found 
in the 4800 Series. Although the 4800 Series rules are roughly 
organized chronologically, progressing from the initial identification 
of a deficiency through the Nasdaq hearings and appeals processes, 
Nasdaq believes that the individual sections could be reorganized into 
a more intuitive structure. With respect to the initial identification 
of deficiencies, Nasdaq has attempted to make clear both what steps 
Nasdaq will take with respect to particular deficiencies, and what 
obligations and options deficient companies may have. Nasdaq has also 
reorganized the rule text relating to the hearings and appellate 
processes, so that in each section the reader will find all information 
related to the process for each level of review.
    Nasdaq also identified instances of unnecessary duplication of rule 
text found in individual Series of the current rules as well. For 
example, Rules 4310 and 4320 set forth certain listing requirements 
applicable to domestic, Canadian, non-Canadian foreign securities, and 
American Depository Receipts. Rule 4310 sets forth the listing 
requirements for domestic and Canadian securities, whereas Rule 4320 
sets forth the listing requirements for non-Canadian foreign securities 
and American Depository Receipts. Although stand alone rules, there is 
much duplication of rule text between the two rules. Accordingly, 
Nasdaq is proposing to combine these rules and any other such 
duplicative rule text, where possible, throughout the proposed 5000 
Series. In combining these two rules, Nasdaq has retained the domestic 
and Canadian continued listing market maker requirement that allows one 
market maker entering a stabilizing bid to count toward the total 
number of market makers required by the rules. Nasdaq notes that the 
proposed new Capital Market continued listing rules makes it permissive 
for non-Canadian foreign securities to count a market maker entering a 
stabilizing bid toward the required number of market makers, which was 
not explicitly stated in the old rules.
    Nasdaq determined to leave certain rules that do not relate to the 
listing of Company securities in the 4000 Series. For example, Rules 
4100 through 4120 relate to the trading of listed Company securities on 
the market. Nasdaq believes these rules are more appropriately left in 
a stand-alone section, apart from the proposed 5000 Series, which 
addresses the listing and

[[Page 15555]]

delisting of Company securities. Likewise, Nasdaq determined to leave 
certain definitions found in the 4200 Series that do not relate to 
listed Companies. Nasdaq also determined to leave Rule 4370 in the 4000 
Series. Rule 4370 concerns additional requirements for the listing of 
Nasdaq or Nasdaq affiliate securities on Nasdaq. Because the rule is 
specific to Nasdaq and does not apply to Companies generally, Nasdaq 
determined it would be confusing and add little value if placed in the 
proposed 5000 Series.
Plain English
    Nasdaq's primary goal in reworking the Listing Rules was to make 
them more clear and transparent. As noted above, the 4000 Series 
evolved over many years and were drafted by multiple individuals. As a 
consequence, the 4000 Series was not written with a consistent voice. 
Nasdaq has taken this opportunity to, where needed, make plain English 
changes to the 4000 Series and re-write certain rule text with a 
consistent voice to clarify provisions that have historically caused 
confusion, while ensuring not to change the meaning of the reworked 
rules. In some cases, this meant eliminating redundant language 
throughout the proposed rule text. In other instances, Nasdaq replaced 
inconsistently used terms with a single term used throughout the new 
rules.
Descriptive Titles and Introductory Language
    Nasdaq renamed many existing rules, using more descriptive titles 
that provide a better cue as to what follows. Nasdaq has also added 
descriptive introductory language to many sections of the proposed new 
5000 Series, which Nasdaq believes provides readers with a logical 
roadmap to what follows in each section. For example, Nasdaq has added 
a new introduction to the Listing Rules titled ``5000 Series: The 
Qualification, Listing, and Delisting of Companies'' under which is 
provided a description of what readers will find under each section of 
the proposed 5000 Series. Likewise, Nasdaq added descriptive 
introductory language to the beginning of the proposed 5000, 5400, 
5600, and 5700 Series, and added to the proposed 5500 and 5800 Series 
rewritten introductory language taken from the 4300 and 4800 Series, 
respectively.
Defined Terms
    Nasdaq has created, modified, or deleted several definitions in the 
process of incorporating the 4000 Series into the proposed new 5000 
Series. In certain cases, such as the new definition of ``Bid Price,'' 
Nasdaq sought to add certainty to a term that had been used in the 
Listing Rules, but not defined historically. Nasdaq's new definition 
clarifies that the term ``Bid Price'' is the closing bid price, which 
Nasdaq has always used as the metric for determining bid price. A 
common and recurring inquiry by investors and companies alike, Nasdaq 
believes that the clarifying language will help to answer a common 
question. In other cases, Nasdaq modified a term or its definition to 
make it more accurate or precise. As another example, under the old 
rules the Adjudicatory Body responsible for reviewing decisions of the 
Listing Qualifications Department was named the Listing Qualifications 
Panel, notwithstanding that it was in no way associated with the 
Listing Qualifications Department. When read together with Rule 4815, 
which generally prohibits ex parte communications between the Listing 
Qualifications Department and the Listing Qualifications Panel, Nasdaq 
thought it appropriate to rename the Listing Qualifications Panel the 
Hearings Panel so that there is no confusion surrounding the 
independence of the adjudicator.
    Nasdaq is proposing to create a new defined term, ``Company,'' as 
found in new Rule 5000(a)(6). Both the terms ``company'' and ``issuer'' 
are used synonymously throughout the current 4000 Series, however, 
neither term is defined. In the proposed new definition, Nasdaq is 
defining a Company as the issuer of a security listed or applying to 
list on Nasdaq. Nasdaq is also making it clear that, for purposes of 
the 5000 Series, the term Company includes an issuer that is not 
incorporated, such as a limited partnership. Nasdaq notes that the 
inclusion of issuers that are not incorporated is consistent with 
Nasdaq's current rules, as such issuers are able to list on Nasdaq 
pursuant to specific listing rules.
    In a similar regard, Nasdaq is proposing to define a new term, 
``Shareholder.'' In the current 4000 Series, there is no single defined 
term that represents the owner of a security that is listed or that is 
in the listing application process. Nasdaq is proposing in new Rule 
5000(a)(37) to define Shareholder as a record or beneficial owner of a 
security listed or applying to list. Nasdaq is including in the 
definition of Shareholder limited partners and owners of depository 
receipts or units. The inclusive definition of Shareholder does not 
change in the proposed 5000 Series how the rules applicable to such 
owners are applied currently under the 4000 Series.
    Nasdaq has created new terms ``Publicly Held Shares'' and ``Public 
Holders'' in proposed Rules 5000(a)(33) and (a)(34).\14\ The new 
definition of Publicly Held Shares is derived from Rules 4310(c)(7)(C) 
and 4420(e). Rule 4310(c)(7)(C) is a Capital Market rule, which states 
that shares held directly or indirectly by any officer or director of 
the Company and by any person who is the beneficial owner of more than 
10 percent of the total shares outstanding are not considered to be 
publicly held. Rule 4420(e) is a Global Market rule that provides, 
among other things, that the method for calculating beneficial 
ownership when determining publicly held shares shall be made in 
accordance with Rule 13d-3 under the Act.\15\ Nasdaq has historically 
used the methodology found in Rule 13d-3 under the Act \16\ when 
determining beneficial ownership for purposes of calculating publicly 
held shares, regardless of market. By also excluding shares that are 
indirectly held by officers and directors, the proposed rules would 
also provide transparency to Nasdaq's view that immediate family 
members of an Executive Officer, director, or 10 percent holder are 
also not Public Holders, and the shares they hold are not Publicly Held 
Shares, to the extent those shares are considered beneficially owned by 
the Executive Officer, director or 10 percent holder pursuant to Rule 
16a-1(a)(2) under the Act.\17\
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    \14\ The Commission notes that the proposed rule text for new 
Rule 5000(a)(33) in Exhibit 5A is correct. However, in Exhibit 5C, 
on page 569, the column in the table setting forth the new rule text 
does not have the correct definition for ``Publicly Held Shares.'' 
Specifically, the definition for Publicly Held Shares should read 
``* * * means 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. Determinations of 
beneficial ownership in calculating publicly held shares shall be 
made in accordance with Rule 13d-3 under the Act.''
    \15\ 17 CFR 240.13d-3.
    \16\ Id.
    \17\ 17 CFR 240.16a-1(a)(2).
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    Nasdaq has also created a new definition of ``filed with Nasdaq'' 
in proposed Rule 5000(a)(15). The new definition is derived from Rules 
4310(c)(14) and 4320(e)(12), which provide that Companies do not have 
to submit paper copies of filings to Nasdaq if these filings have been 
filed with the Commission via the EDGAR System. Nasdaq uses the term 
throughout the 4000 Series and proposed 5000 Series. Nasdaq believes 
the addition of the new definition will help inform readers of how to 
satisfy the requirement in the various contexts that it is used in the 
rules.

[[Page 15556]]

    Nasdaq is proposing to define a new term, ``Other Regulatory 
Authority'' in Rule 5000(a)(31). The new term includes regulators other 
than the Commission with which certain Companies must file 
documentation. In particular, certain Companies are regulated by a bank 
or savings authority identified in Section 12(i) under the Act,\18\ and 
others may be subject to an exemption issued by the Commission that 
permits the listing of the security, notwithstanding its failure to be 
registered pursuant to Section 12(b) under the Act.\19\ Nasdaq is 
proposing to add the new defined term to certain sections of 5000 
Series concerning filing obligations to make clear that filing 
requirements are applicable to Companies that are required to file with 
the Commission or with an Other Regulatory Authority.\20\
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    \18\ 15 U.S.C. 78l(i).
    \19\ 15 U.S.C. 78l(b).
    \20\ The Commission notes that the proposed rule text for new 
Rule 5205(b) in Exhibit 5A is correct. However in Exhibit 5C, on 
page 398, the column in the table setting forth the new rule text 
does not use the new defined term Other Regulatory Authority, and 
should read ``A Company's compliance with the initial listing 
criteria will be determined on the basis of the Company's most 
recent information filed with the Commission or Other Regulatory 
Authority and information provided to Nasdaq. The Company shall 
certify, at or before the time of listing, that all applicable 
listing criteria have been satisfied.''
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    Nasdaq is proposing to define the term ``Public Reprimand Letter'' 
in new Rule 5805(j), which means a letter issued by Staff or an 
Adjudicatory Body in cases where the Company has violated a Nasdaq 
corporate governance or notification listing standard (other than one 
required by Rule 10A-3 of the Act \21\) and Staff or the Adjudicatory 
Body determines that delisting is an inappropriate sanction. Although 
not a defined term under the 4000 Series, the term ``public reprimand 
letter'' occurs throughout the Listing Rules and was generally 
described by Rule 4801(k)(2), which provides one of two alternate 
definitions of the term ``Staff Determination,'' and also under Rule 
4811(e)(3), which describes an Adjudicatory Body's authority to issue 
Decisions that are public reprimand letters. In the proposed definition 
in new Rule 5805(j), Nasdaq combines the concept in the old rules that 
a public reprimand letter may be issued by the Staff or an Adjudicatory 
Body into the definition of the new defined term.
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    \21\ 17 CFR 240.10A-3.
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Deleted Rules
    Nasdaq has found that certain Listing Rules have historically 
caused confusion. In the majority of cases, such rules required minor 
clarifying changes or the application of plain English principles. In 
other cases, however, the confusion was due to a rule that ran contrary 
to other Listing Rules. For example, Nasdaq proposes deleting the first 
sentence to Rule 4802(b), which stated, ``An issuer may file a written 
request for an exception to any of the standards set forth in the Rule 
4000 Series at any time during the pendency of a proceeding under the 
Rule 4800 Series.'' Pursuant to Rule 4804, Nasdaq informs a Company of 
its determination to limit or prohibit the initial or continued listing 
of a Company's securities by way of a staff determination letter. 
Pursuant to Rule 4805, a company may request a hearing within seven 
calendar days. Once a Company makes a timely appeal, any responses to 
additional staff deficiency letters must be made within the seven-
calendar day timeframe. Nasdaq receives questions surrounding the 
conflicting meanings of these rules frequently. Nasdaq chose to 
eliminate the first sentence to Rule 4802(b), because, although a 
Company may submit a written request for an exception at any time in 
the hearings process, only a timely submission made pursuant to Rule 
4805 is considered. As such, the sentence had little meaning when read 
together with the other rules.
    In the current 4000 Series, Nasdaq's limited partnership rules 
incorporated the text from FINRA Rule 2810. As a consequence, much of 
the language provided in Nasdaq's limited partnership rules mirror 
those of the FINRA rule, and required Nasdaq to define several terms 
used by FINRA. In the proposed new Rule 5210(h), Nasdaq has adopted the 
approach taken by the American Stock Exchange with respect to limited 
partnership rules and mirrored Amex Rule 126, which incorporates by 
reference FINRA Rule 2810. Accordingly, it was not necessary to include 
in the proposed new 5000 Series certain defined terms, which were 
provided in the old Listing Rules, due to the inclusion of the FINRA 
Rule 2810 text. In addition, by referencing FINRA Rule 2810, Nasdaq was 
able to delete a substantial amount of text from Rule 4430 that 
mirrored the FINRA rule. This resulted in a much more streamlined 
presentation of the limited partnerships rules.
    Nasdaq identified two rules that, by design, have limited periods 
of applicability and whose periods have since expired. First, when 
Nasdaq created the Global Select Market, it adopted a series of new 
rules applicable exclusively to the new market segment. One such rule, 
IM 4425 described the initial process that Nasdaq used to determine 
which Companies would be assigned to the new market segment in 
conjunction with its launch. As such, the rule has no relevance to 
Companies going forward and accordingly Nasdaq has deleted it from the 
proposed new 5000 Series.
    Similarly, in conjunction with Nasdaq's registration as a national 
securities exchange Nasdaq adopted Rule 4305, which described the 
process for transitioning securities to the new Nasdaq exchange from 
the Nasdaq market. In particular, the rule made clear that securities 
listed on the old market's Global Market or Capital Market will be 
listed on the respective Global Market or Capital Market of the new 
Nasdaq exchange. The rule also clarified that all notices and 
deficiencies existing at the time of the transfer to the Nasdaq 
exchange would continue to be recognized as proper notices and 
deficiencies. Nasdaq notes that Rule 4305 is no longer relevant to 
Companies given that any notices or deficiencies received by Companies 
while listed on the old Nasdaq market have since been resolved, either 
by such Companies regaining compliance with listing standards or by 
exhausting any available appellate remedy. Accordingly, Rule 4305 no 
longer serves a purpose and has not been included in the proposed new 
5000 Series.
Added or Amended Rule Text
    Nasdaq also proposes to amend rule text to clarify the current 
application of existing rules. For example, Rule 4310(c) provides a 
list of criteria that a Company or its security must meet in order to 
list on Nasdaq. Rule 4310(c)(11) requires, among other things, that 
Companies shall not currently be suspended from trading by the 
Commission pursuant to Section 12(k) under the Act.\22\ Companies must 
also be current in filing required reports when listing on Nasdaq, and 
remain current while listed on Nasdaq pursuant to Rules 4310(c)(14) and 
4320(e)(12). Nasdaq has combined these requirements in proposed new 
Rule 5210(e), which also clarifies that suspensions by appropriate 
regulatory authorities of a Company's country of domicile are covered 
by the rule.
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    \22\ 15 U.S.C. 78l(k).
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    Rules 4310(c)(14) and 4320(e)(12) require Companies applying to 
list on Nasdaq to provide three copies of all reports and other 
documents filed or required to be filed with the Commission. Companies 
that file using the Commission's EDGAR System are exempted from this 
requirement. Rule 4310(c)(14) further requires Companies

[[Page 15557]]

that are not required to file reports with the Commission to provide 
three copies of reports required to be filed with its appropriate 
regulatory authority to Nasdaq in connection with its application to 
list its securities. Nasdaq proposes to require only one copy of 
required reports for these Companies in proposed Rule 5205(d). Nasdaq 
believes that, for the few Companies that must provide copies of 
reports to Nasdaq, a single copy is sufficient for Nasdaq's purposes.
    Nasdaq proposes combining Rule 4310(c)(15) with Rule 4330, which 
describes a Company's obligation to provide information to Nasdaq, into 
new Rule 5250(a). Rule 4310(c)(15) requires Companies to provide full 
and prompt responses to requests by Nasdaq for information related to 
unusual market activity or to events that may have a material impact on 
trading of its securities in Nasdaq. Rule 4330 sets forth Nasdaq's 
general authority to request any additional information or 
documentation, public or non-public, deemed necessary to make a 
determination regarding a security's initial or continued listing. In 
new Rule 5250(a) Nasdaq clarifies that the responsibility to respond 
promptly to requests for information applies to requests both from 
Nasdaq, and from FINRA, acting on behalf of Nasdaq. FINRA provides 
certain regulatory services to Nasdaq and must have access to 
information to adequately perform such services.
    Rule 4310(c)(16) requires Companies to promptly disclose to the 
public any material information that would reasonably be expected to 
affect the value of its securities or influence investors' decisions. 
Pursuant to the rule, if the information involves certain events set 
forth in IM-4120-1, Companies must provide prior notice of the 
disclosure to Nasdaq's MarketWatch Department. Nasdaq is moving Rule 
4310(c)(16) to proposed new Rule 5250(b)(1) with only minor changes. 
Nasdaq has, however, added clarifying language regarding the method by 
which notices to the MarketWatch Department should be made. As 
described in IM-4120-1, and proposed new IM-5250-1, prior notice of a 
required disclosure should be made through Nasdaq's Web-based 
electronic disclosure system.
    Rule 4310(c)(23)(A), which applies to all Nasdaq tiers, was 
modified in the new rules to make clear that all securities listed on 
both the Capital Market and Nasdaq Global Market must have a Committee 
on Uniform Securities Identification Procedures number (a ``CUSIP 
number'') or foreign equivalent. Currently, Rule 4310(c)(23)(A) 
requires that domestic securities have a CUSIP number; however, the 
rule does not require Canadian securities to have a CUSIP. Rule 4320, 
which applies to non-Canadian Foreign securities and American 
Depository Receipts, also does not have a similar identification 
assignment requirement. A CUSIP number is a security-specific number 
that identifies stocks of all registered U.S. and Canadian companies, 
and U.S. government and municipal bonds. Historically, Nasdaq has not 
explicitly required Canadian securities listed on Nasdaq to follow the 
general requirement that Nasdaq-listed securities have a CUSIP number; 
however, as a practical matter, all Canadian securities listed on 
Nasdaq have a CUSIP number. Likewise, although Nasdaq has not 
historically required an equivalent to the CUSIP number for non-
Canadian foreign securities, all such securities currently listed on 
Nasdaq have an identifier. The use of a CUSIP number or foreign 
equivalent facilitates efficient clearing and settlement processes. 
Nasdaq believes that all securities listed on Nasdaq should have such a 
number to facilitate a fair and orderly market, and to date, all listed 
Companies have such a number. As such, Nasdaq is explicitly requiring 
all Nasdaq-listed securities to have a CUSIP number or equivalent, as 
denoted in proposed new Rule 5210(g)(2).
    Rule 4320(e)(1) sets forth the Capital Market non-Canadian foreign 
securities and American Depository Receipt initial and continued 
listing requirements regarding market makers. Nasdaq is moving a part 
of Rule 4320(e)(1), which discusses how such a deficiency is determined 
and the timeframe in which to regain compliance, to proposed new Rule 
5810(c)(3)(B). Unlike Rule 4310(c)(8)(A), which is the Capital Market 
Domestic and Canadian Company continued listing requirement for Market 
Makers, Rule 4320(e)(1) is silent on how a Company can regain 
compliance with the non-Canadian foreign securities and American 
Depository Receipt continued listing Market Maker requirement. As a 
matter of practice, Nasdaq has applied the same test to non-Canadian 
foreign securities and American Depository Receipts as Domestic and 
Canadian issues. As such, proposed new Rule 5810(c)(3)(B) applies both 
to Domestic and Canadian Companies, as well as non-Canadian foreign 
securities and American Depository Receipts, and includes a description 
of how compliance can be achieved based on Rule 4310(c)(8)(A).
    Nasdaq is proposing to divide Rules 4310(c)(14) and 4320(e)(12), 
which set forth the requirement that Companies provide Nasdaq with 
three copies of all reports and other documents filed or required to be 
filed with the Commission, into two new rules. Proposed Rule 5205(d) 
applies to Companies seeking initial listing, and in which Nasdaq has 
proposed reducing the number of paper copies of required reports and 
documents that must provided to Nasdaq by Companies that do not file 
through EDGAR System from three to one. Proposed Rule 5250(c)(1) 
applies to the continued listing of securities and allows Companies 
that do not file through the Commission's EDGAR System to comply with 
the rule by providing Nasdaq two copies of required reports and 
documents, which can be provided by e-mail. Nasdaq has also added a 
requirement to both of the proposed new rules not found in Rule 
4320(e)(12) that requires annual reports to contain audited financial 
statements. Rule 4310(c)(14) requires that Domestic and Canadian 
Companies have audited financial statements in their annual reports; 
however, there is not an analogous requirement for securities listed 
pursuant Rule 4320, notwithstanding that Companies listing non-Canadian 
foreign securities or American Depository Receipts must have audited 
financial statements in their annual reports pursuant to Rule 
4350(b)(1)(A). Accordingly, Nasdaq is adding clarifying language to 
make it clear that the audited financial statement requirement applies 
equally to all Companies.
    Rules 4310(c)(22) and 4420(h)(3) set forth the specific disclosure 
requirements for Companies applying to list units on the Capital Market 
and Global Market, respectively. Nasdaq proposes moving Rules 
4310(c)(22) and 4420(h)(3) to new Rules 5225(b) and 5225(a), 
respectively. Although, no changes are made to the rule text in the new 
proposed rules, Nasdaq is making clear that when determining 
eligibility for listing units, all components of the unit must meet 
Nasdaq initial listing standards, including Rule 4310(a)(1), as found 
in proposed Rule 5210(a)(1), which require securities to be registered 
pursuant to Section 12(b) under the Act.\23\
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78l(b).
---------------------------------------------------------------------------

    Nasdaq has combined Rules 4340(b) and 4450(f), which concern 
Nasdaq's process with respect to Companies in bankruptcy or the 
liquidation process. Under Rule 4300, Nasdaq has broad

[[Page 15558]]

discretionary authority over the initial and continued listing of 
securities on all Nasdaq market tiers, including using such authority 
when a Company files for protection under any provision of the Federal 
bankruptcy laws or comparable foreign laws. Rule 4340(b) details 
Nasdaq's discretionary authority to delist a Company should it file for 
bankruptcy protection and describes further a Company's obligations 
should Nasdaq not exercise its discretion to delist. Rule 4450(f) is a 
Global Market rule that restates Nasdaq's authority to delist a Company 
should it file for bankruptcy stated in Rule 4340(b), but also provides 
that Nasdaq may delist a Company's securities if it has announced that 
liquidation has been authorized by its board of directors and that it 
is committed to proceed. Although it has been a long-standing practice 
of Nasdaq to exercise its discretionary authority to delist a Company 
from any market tier should such a Company announce that liquidation 
has been authorized by its board, Rule 4340(b) was silent on how Nasdaq 
would proceed in cases involving Capital Market Companies. Accordingly, 
Nasdaq is combining Rule 4340(b) and 4450(f) into new Rule 5110(b) so 
that it is clear that any Nasdaq Company, regardless of tier, may be 
delisted should it announce that its board determined to liquidate the 
Company.
    Rule 4350(i)(3) describes what shares are considered for 
calculations involving shareholder approval. Often confusing to 
Companies, Nasdaq has rewritten the rule in proposed new Rule 
5635(e)(1) to clarify the application of the old rule by providing 
additional detail on the method used to calculate shares issued in a 
transaction, and the method to determine the number of shares 
outstanding. The new rule, however, does not change the application or 
calculation found in Rule 4350(i)(3).
    Nasdaq proposes combining part of Rule 4410(a) and Rule 4330 into 
new Rule 5205(e). Rule 4410(a) is a Global Market rule that requires, 
in part, Companies to provide Nasdaq information relevant to an initial 
listing determination upon Nasdaq's request. Rule 4330 sets forth 
Nasdaq's general authority to request any additional information or 
documentation, public or non-public, deemed necessary to make a 
determination regarding a security's initial or continued listing. 
Under the new combined Rule 5205(e), Nasdaq is applying the broader 
authority to request any information or documentation to make a an 
initial listing determination found in Rule 4330, which currently 
applies to all market tiers. As a result, the new Rule will be a more 
accurate reflection of the already existing authority to request 
information found under Rule 4330.
    Nasdaq has made clarifying changes to Rule 4426(f), which explains 
what type of securities other than common stock may be included in the 
Global Select Market, as found under proposed new Rule 5320. Nasdaq has 
clarified the type of securities that may be listed on the Global 
Select Market by using the defined term Primary Equity Security to 
replace the term ``common stock'' and by noting the types of securities 
that are not eligible to be listed with a cross reference to the rule 
governing such securities' listing. The defined term Primary Equity 
Security includes common stock in addition to Ordinary Shares, Shares 
or Certificates of Beneficial Interest of Trust, Limited Partnership 
Interests or American Depositary Receipts or American Depositary 
Shares, all of which are eligible for listing on the Global Select 
Market under the current rules.
    Nasdaq has expanded the scope of the 4800 Series, now found in the 
5800 Series, to include details on deficiency processing. In the 4800 
Series, for example, a description of the compliance periods available 
to a Company that failed to meet the bid price requirement was located 
in the 4310, 4320 and 4450 Series. In the new rules, Nasdaq proposes 
consolidating all these descriptions into the 5800 Series. As a 
consequence, Nasdaq has changed the introductory language to the 4800 
Series that was previously contained in Rule 4802(a) and now found in 
the introduction to the 5800 Series to include more than procedures for 
the independent review of Nasdaq determinations. The new 5800 Series 
introduction describes all the procedures for Companies found to be 
deficient in Nasdaq listing requirements.
    Nasdaq is proposing to add new clarifying language to Rule 4802(c), 
found in proposed new Rule 5840(b). The proposed new rule clarifies 
that information compiled under the rule will be made part of the 
record, which includes any written notice provided by the Adjudicator 
requesting information, responses to the notice, and the information 
considered. Although this authority is also stated in Rule 4811, which 
concerns the record on review in a proceeding and can be found under 
Rule 5840, Nasdaq believes that it is appropriate to make this 
authority clear under proposed Rule 5840(b) as well.
    Nasdaq is proposing to make clarifying changes to Rule 4803, as 
found in new Rule 5810. Rule 4803(a) requires, among other things, 
staff of the Listing Qualifications Department to immediately notify a 
Company once the staff has determined that the Company does not meet a 
listing standard. This requirement is found in proposed new Rule 5810, 
which also provides additional clarifying information regarding the 
types of notifications sent by staff to Companies that fail to meet a 
listing standard. Nasdaq believes such clarifying information is 
helpful to Companies in understanding Nasdaq's deficiency notice 
process.
    Nasdaq is proposing to make clarifying changes to Rule 4803(a)(3), 
which sets forth the process that Nasdaq Listing Qualifications 
Department staff will follow when it determines that a Company does not 
meet a listing standard that provides for a compliance period or 
certain standards that provide a cure period. The requirements of Rule 
4803(a)(3) are found in proposed new Rule 5810(c)(3). Proposed Rule 
5810(c)(3) also provides greater detail about the compliance periods 
and cure periods afforded under the rules implicated by Rule 
4803(a)(3), since the relevant language formerly located in Rules 4310, 
4320, 4350, 4360, and 4450 has been incorporated into proposed new Rule 
5810(c)(3). Nasdaq believes that consolidating the applicable rules 
under the new rule provides a more useful format, and that providing 
more descriptive information will help the reader to better understand 
the deficiency process.
    Nasdaq is proposing to make clarifying changes to Rule 4803(a)(4), 
which states that Nasdaq will issue a Staff Determination letter in all 
cases not noted in Rules 4803(a)(1)-(3). This requirement is found in 
proposed new Rule 5810(c), but because the new rule is structured as 
the introductory paragraph for various types of notices provided by 
staff, Nasdaq has added new descriptive information to Rule 5810(c) 
that explains that the type of deficiency identified by Listing 
Qualifications Department staff will determine whether the Company will 
receive immediately a delisting determination resulting in the 
suspension of the Company's securities unless appealed, or if the 
Company will be afforded the opportunity to provide staff with a 
compliance plan, or receive a cure period or compliance period prior to 
receiving a delisting determination.
    Nasdaq proposes clarifying changes to Rule 4804(a), as found in 
proposed new Rules 5810(a)(1)-(3). The old rule was significantly 
expanded to provide greater detail on the types of letters

[[Page 15559]]

issued by Staff, and the effects of these letters. Rule 4804(a) only 
specifies what is contained in a Staff Delisting Determination. 
Proposed Rules 5810(a)(1)-(3) provide detail on what is contained in 
each type of deficiency letter. Similarly, Nasdaq has added clarifying 
language to Rules 4804(c)-(d), as found in proposed new Rule 5810(d). 
Rules 4804(c)-(d) discuss the written notices of additional 
deficiencies from Staff to Companies under the review of an 
Adjudicatory Body. New Rule 5810(d) provides more clarity on 
notifications of additional deficiencies that are identified by Staff 
for a Company under the review of an Adjudicatory Body.
    Nasdaq Rule 4805 concerns requests for hearings before the Hearings 
Panel. Pursuant to the rule, a Company must request a hearing within 
seven calendar days of the Staff Determination. The rule, however, is 
unclear on the form that the request must be made (i.e., oral or 
written). In contrast, Rule 4807 explicitly states that Companies 
requesting a review by the Nasdaq Listing and Hearing Review Council 
must do so in writing. Rule 4808 concerns the reconsideration of both 
Hearings Panel and Nasdaq Listing and Hearing Review Council decisions. 
Pursuant to Rule 4808(a), a Company may request the Hearings Panel 
reconsider a Hearings Panel Decision upon the basis that a mistake of 
material fact existed at the time of the Decision. A similar provision 
applicable to Nasdaq Listing and Hearing Review Council Decisions is 
found in Rule 4808(b). Rules 4808(a) and (b), however, are silent on 
the form that such requests must be made. Although it is common 
practice for Companies to submit requests pursuant to Rules 4805 and 
4808(a) and (b) in writing, Nasdaq believes that such a practice should 
be codified in the proposed 5800 Series. Written requests not only 
provide documentation of such requests, they also become part of the 
written record on review. Accordingly, Nasdaq is taking this 
opportunity to harmonize the process for these rules by requiring all 
such request to be in writing, as provided by proposed new Rules 5815, 
5820(a), 5815(d)(5), and 5820(e)(4).
    Nasdaq also proposes combining, in part, Rules 4804(e) and 4805(a). 
Rule 4804 concerns written notices of staff determinations, and 
paragraph (e) states that a Company that fails to request a Panel 
hearing timely after receiving a Staff Determination, other than a 
Public Reprimand, will be subject to suspension and delisting. Rule 
4805 concerns requests for Panel hearings, and paragraph (a), among 
other things, sets forth the process for requesting a Panel hearing 
timely, yet does not mention that failure to request a hearing timely 
will result in suspension and delisting as discussed in Rule 4804(e). 
Nasdaq is proposing to combine the two rules into new Rule 5815(a)(2), 
which will provide a central location for all consequences resulting 
from failing to request a Panel hearing timely, and will make clear 
that such a failure will result in the immediate suspension and 
delisting.
    Nasdaq is proposing to make clarifying changes to Rule 4805(c), as 
found in new Rule 5815(a)(5). Rule 4805(c) describes the nature of the 
written submission that a Company may provide as part of the hearings 
process, which could state the specific grounds for the Company's 
contention that the Staff Determination was in error, or could request 
that the Hearings Panel grant the Company an exception to the listing 
standards, as permitted by Rule 4802. Proposed new Rule 5815(a)(5) 
provides a more detailed description of the submission that a Company 
may submit to the Hearings Panel when seeking an exception to the 
listing standards. In particular, the new rule provides that a 
Company's submission may be in the form of a written plan to regain 
compliance with Nasdaq listing standards together with a request that 
the Panel grant the Company an exception to the listing standards to 
regain compliance, as permitted by proposed new Rule 5815(c)(1)(A). 
Although not stated in the old rule, the ability to provide a plan of 
compliance and request an exception is implied by the fact that the 
Hearings Panel may grant exceptions to the listing standards. Nasdaq is 
also proposing to add further clarifying language that makes clear that 
the Hearings Panel will review the written record prior to the hearing, 
consistent with proposed new Rule 5840(a), which addresses the record 
on review and captures much of the current rule that addresses the 
record on review, Rule 4811.
    Nasdaq is proposing clarifying changes to Rule 4806(a), which sets 
forth the Panel Hearing process. Rule 4806(a) provides, among other 
things, that a Company may make a presentation as it deems appropriate 
to the Hearings Panel. Rule 4806(a) does not make a distinction between 
an oral hearing and a written hearing. Much of Rule 4806(a) is conveyed 
in new Rule 5815(a)(6), which concerns presentations at Panel Hearings. 
In the proposed new rule, Nasdaq is making it clear that presentations 
by Companies are allowed only at oral hearings. The limitation to oral 
hearings is consistent with Nasdaq's long-standing practice.
    Nasdaq is proposing to add clarifying language to Rule 4811(b), 
which concerns additional documents considered as part of the written 
record in a proceeding. Rule 4811(b) provides that if any additional 
information is considered as permitted by Rule 4802(c), that 
information and any written submission addressing the significance of 
that information, shall be made part of the record. Rule 4802(c) 
provides, among other things, that an Adjudicator may request 
additional information from the Company or Listing Qualifications 
Department, and may consider information from any source it deems 
relevant. Rule 4802(c)(2) provides that the Listing Qualifications 
Department and Company will be afforded written notice and an 
opportunity to address the significance of information from any source 
the Adjudicatory Body deems relevant to consider. Rule 4802(c)(2) does 
not, however, note that the information considered by Adjudicatory Body 
and any written submissions addressing the significance of such 
information by the Listing Qualifications Department or Company will be 
made part of the record. Nasdaq proposes combining Rules 4802(c)(2) and 
4811(b) into new Rule 5840(b)(2), which will provide a single location 
for the rules applicable to information from sources other than the 
Listing Qualifications Department and Company considered by an 
Adjudicatory Body.
    Nasdaq is proposing clarifying changes to Rule 4811(e), which sets 
forth the scope of what action an Adjudicatory Body Decision may direct 
if it is determined that a Company failed to satisfy the quantitative 
standards or qualitative considerations set forth in the 4000 Series. 
Currently, Rule 4811(e) applies equally to the Hearings Panel, Listing 
Council and the Board. Nasdaq is proposing to house rules generally 
applicable to the review by the Hearings Panel, Listing Council, and 
Board under proposed new Rule Series 5815, 5820, and 5825, 
respectively. Proposed Rules 5815(c)(1) and (2) address the scope of 
the Hearings Panel's discretion, and contains the requirements found in 
Rule 4811(e). Unlike Rule 4811(e), which describes only the action a 
Hearings Panel may take in issuing a decision if it concludes that a 
Company has failed to satisfy a qualitative or quantitative listing 
standard, proposed Rules 5815(c)(1) and (2) describe the possible 
action the Hearings Panel may take in issuing a decision and is not 
limited to a determination that a Company has

[[Page 15560]]

failed to meet a listing standard. As such, proposed Rules 5815(c)(1) 
and (2) provide significantly greater clarity on the options available 
to the Hearings Panel when issuing a decision by including the 
alternatives should a Company regain compliance with an applicable 
standard during the Hearings process. In that regard, the new rule 
includes in Rule 5815(c)(1)(E) the Panel's options when determining 
that a Company has evidenced compliance with all the applicable listing 
standards.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 under the Act,\24\ in general and with 
Section 6(b)(5) under the Act,\25\ in particular. Section 6(b)(5) \26\ 
requires that Nasdaq's rule be designed 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. Nasdaq believes that 
reorganizing the Listing Rules into a new, more intuitive structure 
will help avoid investor confusion and foster better understanding of 
Nasdaq's listing requirements among both investors and companies alike. 
Nasdaq also believes that the use of plain English and descriptive 
language will help make the Listing Rules more accessible to the 
investing public. As such, Nasdaq believes the proposed rule change 
will promote just and equitable principles of trade, remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and protect investors and the public interest.
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78f.
    \25\ 15 U.S.C. 78f(b)(5).
    \26\ Id.
---------------------------------------------------------------------------

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, as amended.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    On December 3, 2007, Nasdaq solicited comment from issuers on the 
impact of the revisions to the rules. Nasdaq received three responses 
to this solicitation, two from representatives of companies and one 
from a law firm. One of the commentators voiced support for the rule 
change. Two commentators suggested minor changes to enhance the 
readability and ease of use of the new rules. Specifically, one 
commentator suggested clarifying the meaning of a particular sentence, 
and the other suggested that Nasdaq use hyperlinks throughout the rule 
text to help readers navigate to rules or interpretive material 
referenced in the rule text. In response, Nasdaq has amended the 
sentence consistent with the comment. Nasdaq also plans on using 
hyperlinks within its on-line manual to simplify navigation.
    The third commentator requested clarification on Nasdaq's changes 
so that he could more fully reply. This commentator did not provide a 
follow-on submission to Nasdaq.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days after the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \27\ and Rule 19b-
4(f)(6) thereunder.\28\
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    \27\ 15 U.S.C. 78s(b)(3)(A).
    \28\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the self-regulatory organization to give the Commission 
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. Nasdaq 
has satisfied this requirement.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the 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 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

    <bullet> Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an e-mail to <a href="/cdn-cgi/l/email-protection#6311160f064e000c0e0e060d1710231006004d040c15"><span class="__cf_email__" data-cfemail="0775726b622a64686a6a626973744774626429606871">[email protected]</span></a>. Please include 
File Number SR-NASDAQ-2009-018 on the subject line.

Paper Comments

    <bullet> 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-2009-018. 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, 100 F Street, 
NE., Washington, DC 20549, on official business days between the hours 
of 10 a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of the Nasdaq 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-
018 and should be submitted on or before April 27, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\29\
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    \29\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-7630 Filed 4-3-09; 8:45 am]
BILLING CODE 8010-01-P


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