30972 Federal Register / Vol. 66, No. 111 / Friday, June 8, 2001 / Notices

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

2 17 CFR 240.19b–4.

3Securities Exchange Act Release No. 44153

(April 5, 2001), 66 FR 44153 (April 11, 2001) (SR–

NASD–01–17).

4Pursuant to Marketplace Rule 4840(d), appeals

to the Listing Council are based only on the written

record unless the Listing Council exercises its

discretion to hold an oral hearing. There is no

additional fee for an oral hearing before the Listing

Council.

5See Securities Exchange Act Release No. 37088

(April 9, 1996), 61 FR 16662 (April 16, 1996). In

1999, a $1,400 fee for appeals to the Listing Council

was established, which matched the fee for appeals

to the Panel based only on the written record. See

Securities Exchange Act Release No. 41367 (May 4,

1999), 64 FR 25942 (May 13, 1999).

6See Securities Exchange Act Release No. 41367

(May 4, 1999), 64 FR 25942 (May 13, 1999).

7Nasdaq has represented that the other expenses

relating to the review process that are not covered

by the current hearing fees include the following:

overhead, including telephones, supplies,

depreciation and occupancy, computer system

support, listing qualifications retention analyst and

manager review, and a stipend for Panel and Listing

Council members. Telephone conversation between

John D. Nachmann, Senior Attorney, Office of

General Counsel, Nasdaq, and Lisa Jones, Attorney,

Division of Market Regulation, Commission (March

30, 2001).

8The additional variable fee allocated to issuers

who request oral hearings before the panel is

designed to recover the additional costs associated

with such hearings; specifically, travel expenses for

members of the Panel and court reporter time to

maintain a transcript of these hearings.

9On March 22, 2001, Nasdaq filed a proposed

rule change, SR–NASD–2001–02, with the

Commission pursuant to Section 19(b)(3)(A) of the

Act, and subparagraph (f) of Rule 19b–4 thereunder,

that transfers certain responsibilities from the

Nasdaq Office of General Counsel regarding the

review process to the Office of Appeals and Review,

a new unit in the Nasdaq’s Listing Qualifications

Department. The Office of Appeals and Review will

receive requests for review from issuers and will

keep records of proceedings.

10The fees proposed in this proposed rule change

are designed to recover only the direct costs

associated with the review process and do not

include various indirect overhead costs that have

been identified by Nasdaq as Senior Management,

Finance, Human Resources, Administrative

Services, Legal (excluding unrelated litigation and

international expenses), Economic Research, Nas

Tech and Strategic Development.

11 15 U.S.C. 78o–3(b)(5).

12 15 U.S.C. 78o–3(b)(6).

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

14 17 CFR 200.30–3(a)(12).

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44374; File No. SR–NASD–

2001–17]

Self-Regulatory Organizations; Order

Approving a Proposed Rule Change by

the National Association of Securities

Dealers, Inc. To Revise the Fees

Associated With Appeals of Nasdaq

Listing Determinations

May 31, 2001.

On March 13, 2001, the National

Association of Securities Dealers, Inc.

(‘‘NASD’’), through its subsidiary, the

Nasdaq Stock Market, Inc. (‘‘Nasdaq’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’) pursuant

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

Exchange Act of 1934 (‘‘Act’’),1 and

Rule 19b–4 thereunder,2 a proposed rule

change to revise the fees associated with

appeals of Nasdaq Listing

Determinations. The proposed rule

change was noticed in the Federal

Register on April 11, 2001.3 No

comments were received on the

proposed rule change. This order

approves the proposed rule change.

I. Description of the Proposal

Determinations by the Listing

Qualifications Department or the Listing

Investigations Department to limit or

prohibit the initial or continued listing

of an issuer’s securities may be appealed

by the issuer to the Listing

Qualifications Panel (the ‘‘Panel’’) and

thereafter to the Nasdaq Listing and

Hearing Review Council (the ‘‘Listing

Council’’). Nasdaq has proposed to

revise the current fee schedules for

issuer requests for the review of listing

determinations to both the Panel and

the Listing Council to cover the costs

associated with the review.

Currently, the fee for an appeal to the

Panel based on a written submission

from the issuer is $1,400, and the fee for

an oral hearing before the Panel is

$2,300. In addition, the fee for an appeal

to the Listing Council is $1,400.4

Nasdaq has proposed to change the fee

for an appeal to the Panel based on a

written submission from the issuer to

$4,000, and the fee for an oral hearing

before the Panel to $5,000. In addition,

Nasdaq has proposed to change the fee

for an appeal to the Listing Council to

$4,000.

The fees associated with appeals to

the Panel were last revised in 1996.5

Nasdaq asserts that since that time,

there has been an increase in the various

costs associated with the review

process. Nasdaq asserts in particular

that, in 1999, it expanded the review

process in part in response to the

Commission’s findings, which required

changes in the process of reviews and

an increase in the amount of time spent

by Nasdaq staff members dedicated to

the review process.6 Further, Nasdaq

has identified other expenses related to

the review process that are not covered

by the current hearing fees.7

The proposed fee for an appeal to the

Panel includes all costs of the Office of

Listing Qualifications Hearings

attributable to the processing of hearing

requests and the associated expenses of

the Panel.8 In addition, the proposed fee

for an appeal to the panel includes a

large portion of the expenses associated

with the Office of Appeals and Review,9

and the Listing Council. The proposed

fee for an appeal to the Listing Council

under Marketplace Rule 4840(b) will

cover the remainder of the expenses of

the Office of Appeals and Review and

the Listing Council, as well as the Office

of General Counsel’s time directly

related to the appeals process.10

II. Discussion

The Commission finds that the

proposed rule change is consistent with

the provisions of Section 15A(b)(5) 11

and Section 15A(b)(6) 12 of the Act. The

Commission believes that the proposed

rule change is consistent with Section

15A(b)(5) because it helps to provide for

the equitable allocation of reasonable

dues, fees, and other charges among

issuers using Nasdaq, by proposing fees

for the review process that are revenue

neutral and reflect the costs incurred by

Nasdaq to process issuer requests. The

Commission also believes that the

proposed rule change is consistent with

Section 15A(b)(6), which requires that

the rules of the Exchange be designed to

prevent fraudulent and manipulative

acts and practices as well as to protect

investors and the public interest. In

particular, the Commission believes that

the proposed fees will help Nasdaq to

ensure that only qualified issuers are

allowed to list or remain listed on

Nasdaq.

III. Conclusion

It Is Therefore Ordered, pursuant to

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

proposed rule change (SR–NASD–2001–

17) is approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.14

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–14430 Filed 6–7–01; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

[License No. 02/02–5377]

Elk Associates Funding Corporation;

Notice Seeking Exemption Under

Section 312 of the Small Business

Investment Act, Conflicts of Interest

Notice is hereby given that Elk

Associates Funding Corporation, 747

Third Avenue, New York, New York

10017, a Federal Licensee under the