53994 Federal Register / Vol. 75, No. 170 / Thursday, September 2, 2010 / Notices 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Changes are marked to the rule text that appears 

in the electronic manual of Nasdaq found at http:// 

nasdaqomx.cchwallstreet.com. 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–BX–2010–058. 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 Web site 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. 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–BX– 

2010–058 and should be submitted on 

or before September 23, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–21931 Filed 9–1–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62782; File No. SR– 

NASDAQ–2010–107] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing of Proposed Rule Change To 

Modify the Eligibility Criteria for the 

Second Compliance Period for a Bid 

Price Deficiency on the Nasdaq Capital 

Market 

August 27, 2010. 

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 August 

25, 2010, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been 

substantially prepared by Nasdaq. 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 the Substance 

of the Proposed Rule Change 

Nasdaq proposes to modify the 

eligibility criteria for a company to 

receive a second compliance period for 

a bid price deficiency on the Nasdaq 

Capital Market. The text of the proposed 

rule change is below. Proposed new 

language is in italics; proposed 

deletions are in brackets.3

* * * * * 

5810. Notification of Deficiency by 

the Listing Qualifications Department 

When the Listing Qualifications 

Department determines that a Company 

does not meet a listing standard set forth 

in the Rule 5000 Series, it will 

immediately notify the Company of the 

deficiency. As explained in more detail 

below, deficiency notifications are of 

four types: 

(1)–(4) No change. 

Notifications of deficiencies that 

allow for submission of a compliance 

plan or an automatic cure or compliance 

period may result, after review of the 

compliance plan or expiration of the 

cure or compliance period, in issuance 

of a Staff Delisting Determination or a 

Public Reprimand Letter. 

(a)–(b) No change. 

IM–5810–1 No change. 

(c) Types of Deficiencies and 

Notifications 

The type of deficiency at issue 

determines whether the Company will 

be immediately suspended and delisted, 

or whether it may submit a compliance 

plan for review or is entitled to an 

automatic cure or compliance period 

before a Staff Delisting Determination is 

issued. In the case of a deficiency not 

specified below, Staff will issue the 

Company a Staff Delisting 

Determination or a Public Reprimand 

Letter. 

(1)–(2) No change. 

IM–5810–2 No change. 

(3) Deficiencies for which the Rules 

Provide a Specified Cure or Compliance 

Period 

With respect to deficiencies related to 

the standards listed in (A)—(E) below, 

Staff’s notification will inform the 

Company of the applicable cure or 

compliance period provided by these 

Rules and discussed below. If the 

Company does not regain compliance 

within the specified cure or compliance 

period, the Listing Qualifications 

Department will immediately issue a 

Staff Delisting Determination letter. 

(A) Bid Price 

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)(F). 

(i) Global Select Market and Global 

Market 

If a Company listed on The Nasdaq 

Global Market has not been deemed in 

compliance prior to the expiration of the 

180 day compliance period, it may 

transfer to The Nasdaq Capital Market, 

provided that it meets the applicable 

market value of publicly held shares 

requirement for continued listing and all 

other applicable requirements for initial 

listing on the Capital Market [, other 

than the minimum] (except for the bid 

price requirement) based on the 

Company’s most recent public filings 

and market information and notifies 

Nasdaq of its intent to cure this 

deficiency. [A Company listed on The 

Nasdaq Global Market transferring to 

The Nasdaq Capital Market must pay 

any applicable entry fees set forth in 

Rule 5920(a). The Company may also 

request a hearing to remain on The 

Nasdaq Global Market pursuant to the 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
Federal Register / Vol. 75, No. 170 / Thursday, September 2, 2010 / Notices 53995 

4Nasdaq has previously recognized this link in 

other contexts. See, e.g., Securities Exchange Act 

Release No. 58809 (October 17, 2008), 73 FR 63222 

(October 23, 2008) (SR–NASDAQ–2008–082, 

suspending both the bid price and market value of 

publicly held shares requirements in light of the 

financial crisis). 

5The initial listing requirements for market value 

of publicly held shares for common stock on the 

Capital Market range from $5 million to $15 

million, depending on the listing standard under 

which the company qualifies; the continued listing 

requirement is $1 million. See Rules 5505(b) and 

5555(a)(4). 

6Cf. Section 1003(f)(v) of the NYSE Amex 

Company Guide (stating that NYSE Amex would 

consider delisting a common stock that sells for a 

substantial period of time at a low price per share, 

if the issuer fails to effect a reverse split of such 

shares within a reasonable time after being notified 

that the Exchange deems such action to be 

appropriate under all the circumstances). 

7 15 U.S.C. 78f. 

Rule 5800 Series.] Following a transfer 

to The Nasdaq Capital Market, the 

Company will be afforded the remainder 

of [any] the applicable compliance 

period set forth in [Rule 5810(c)(3)(A) 

or] Rule 5810(c)(3)(A)(ii) [as if the 

Company had been listed on The 

Nasdaq Capital Market], unless it does 

not appear to Nasdaq that it is possible 

for the Company to cure the deficiency. 

The Company may also request a 

hearing to remain on The Nasdaq 

Global Market pursuant to the Rule 

5800 Series. Any time spent in the 

hearing process will not extend the 

length of the remaining applicable 

compliance periods on The Nasdaq 

Capital Market afforded by this rule. 

(ii) Capital Market 

If a Company listed on the Capital 

Market is not deemed in compliance 

before the expiration of the 180 day 

compliance period, it will be afforded 

an additional 180 day compliance 

period, provided that on the 180th day 

of the first compliance period[, the 

Company demonstrates that] it meets 

the applicable market value of publicly 

held shares requirement for continued 

listing and all other applicable 

standards for initial listing on the 

Capital Market (except the bid price 

requirement) based on the Company’s 

most recent public filings and market 

information and notifies Nasdaq of its 

intent to cure this deficiency. If a 

Company does not indicate its intent to 

cure the deficiency, or if it does not 

appear to Nasdaq that it is possible for 

the Company to cure the deficiency, the 

Company will not be eligible for the 

second grace period. If the Company has 

publicly announced information (e.g., in 

an earnings release) indicating that it no 

longer satisfies the applicable [initial] 

listing criteria, it shall not be eligible for 

the additional compliance period under 

this rule. 

(B)–(F) No change. 

(4) No change. 

(d) No change. 

* * * * * 

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 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. Nasdaq 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 

Nasdaq proposes to modify the 

requirements for the second compliance 

period available to companies that fall 

below the continued listing price 

requirement. Under the present rules, 

once a company has a closing bid price 

below $1 for 30 consecutive days it 

becomes deficient and receives written 

notice that it has a 180 day ‘‘grace’’ 

period to regain compliance. 

Compliance can be achieved by 

maintaining a minimum $1 closing bid 

price for ten consecutive days. At the 

expiration of the 180 day period, a 

company can receive an additional 180 

day grace period, provided it is either 

already listed on the Capital Market or 

transfers to that market and satisfies all 

of the Capital Market’s initial listing 

criteria, except for bid price. 

Nasdaq has observed that many 

companies fail to qualify for the second 

grace period because they do not meet 

the market value of publicly held shares 

requirement for initial listing on the 

Capital Market. Eligibility for the second 

grace period is quite important as it 

allows more time to regain compliance 

before the company must undertake a 

reverse stock split to increase its stock 

price, and therefore frees company 

management to focus on running their 

business and not on remaining listed or 

addressing related investor concerns. 

The link between failure to comply 

with the bid price requirement and 

failure to meet the initial listing 

requirement for market value of publicly 

held shares—and thus qualify for the 

second grace period—is clear, given that 

the market value of publicly held shares 

is directly derived from the price of the 

security.4 Accordingly, Nasdaq proposes 

to ease the requirements for the second 

grace period on the Capital Market by 

allowing a company to qualify if it 

satisfies the lower continued listing 

requirement for market value of publicly 

held shares, thereby enabling more 

companies to be eligible for the second 

grace period.5 The company would still 

need to meet all of the other initial 

listing criteria for Capital Market other 

than bid price. In addition, the company 

will need to notify Nasdaq of its intent 

to cure the bid price deficiency. If a 

company does not indicate its intent to 

cure the deficiency, or if it does not 

appear to Nasdaq staff that it is possible 

for the company to cure the deficiency, 

the company would not be eligible for 

the second grace period. A company 

listed on the Global or Global Select 

Markets would be permitted to transfer 

to the Capital Market if it meets the 

applicable market value of publicly held 

shares requirement for continued listing 

and all other applicable requirements 

for initial listing on the Capital Market 

(except for the bid price requirement) 

and notifies Nasdaq of its intent to cure 

the bid price deficiency. Once on the 

Capital Market, the company would be 

eligible for the second grace period on 

the Capital Market, unless it does not 

appear to Nasdaq staff that it is possible 

for the Company to cure the deficiency. 

While certain companies that do not 

currently qualify for the second grace 

period could receive additional time, 

the proposed rule change would not 

extend the overall maximum of 360 

days available to companies. Further, 

Nasdaq’s grace periods would remain 

stricter than those of NYSE Amex, 

which has no $1 continued listing 

requirement and therefore permits 

companies to remain listed indefinitely 

at a price below $1.6

Nasdaq is also proposing nonsubstantive changes to Rule 

5810(c)(3)(A)(i) and (ii) to clarify and 

reorder the rule language and conform 

the language in these two sections. 

These changes are consistent with how 

Nasdaq currently interprets the rule. 

Nasdaq also proposes to remove 

language about the payment of fees by 

a company which transfers to the 

Capital Market because no fees are 

applicable under Rule 5920(a) to such a 

company, making the existing language 

confusing. 

2. Statutory Basis 

Nasdaq believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,7 in 

general and with Section 6(b)(5) of the 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
53996 Federal Register / Vol. 75, No. 170 / Thursday, September 2, 2010 / Notices 

8 15 U.S.C. 78f(b)(5). 9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

Act,8 in particular in that it is designed 

to prevent fraudulent and manipulative 

acts and practices, 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. The 

proposed rule change is consistent with 

these requirements in that it would 

permit reasonable periods of time for 

companies to address instances of 

noncompliance with Nasdaq’s price 

requirement and would not adversely 

affect investors or the national market 

system. 

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 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change, as amended, is consistent with 

the Act. Comments may be submitted by 

any of the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–NASDAQ–2010–107 on the 

subject line. 

Paper Comments 

• 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–2010–107. 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 Web site 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 such filing 

also will be available for Web site 

viewing and printing at the principal 

office of Nasdaq. 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–2010–107 and should be 

submitted on or before September 23, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–21932 Filed 9–1–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62785; File No. SR– 

NASDAQ–2010–106] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify Fees 

Assessed to Members Using the 

NASDAQ Market Center 

August 27, 2010. 

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 August 

25, 2010, The NASDAQ Stock Market 

LLC (‘‘NASDAQ’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by NASDAQ. 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 the Substance 

of the Proposed Rule Change 

NASDAQ proposes to modify pricing 

assessed to NASDAQ members using 

the NASDAQ Market Center. NASDAQ 

will implement the proposed change on 

September 1, 2010. The text of the 

proposed rule change is available at 

http://nasdaqomx.cchwallstreet.com/, at 

NASDAQ’s principal office, 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, 

NASDAQ 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. 

NASDAQ 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 

NASDAQ is proposing to reduce fees 

assessed members for routing odd-lot 

directed orders. NASDAQ assesses 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1