70232 Federal Register / Vol. 79, No. 227 / Tuesday, November 25, 2014 / Notices 

18 17 CFR 200.30–3(a)(34). 

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

2 17 CFR 240.19b–4. 

3A company that receives a delisting 

determination or public reprimand letter must still 

pay fees for review of that decision by an 

independent Hearings Panel or the Nasdaq Listing 

and Hearing Review Council. Companies also will 

pay application and entry fees to list new classes 

of securities. 

4 In addition to the annual fee, companies are also 

billed quarterly for listing of additional shares fees 

and upon the occurrence of events that result in 

record keeping and substitution listing fees. 

5 In establishing the fee changes described in this 

rule filing, including the changes to the number and 

cut-off point of pricing tiers, Nasdaq considered 

various factors that distinguish companies, 

including market tier, shares outstanding, and 

security type, as well as the perceived use of 

various Nasdaq regulatory and support services by 

companies of various characteristics. Pricing for 

similar securities on other national securities 

exchanges was also considered. Based on this 

analysis, Nasdaq proposes to modify the number of 

fee tiers within the annual fee schedule to better 

align fees with the size of the companies that pay 

those fees and the use Nasdaq believes that 

companies of various sizes typically make of 

Nasdaq’s services. In setting the all-inclusive 

annual fee, Nasdaq reviewed the billing history of 

more than 1,800 companies that had been listed on 

Nasdaq for at least four years to determine the fees 

assessed these companies for all listing-related 

services, including those assessed for listing of 

additional shares, record-keeping changes, 

substitution listing events, rule interpretations, and 

compliance plan reviews. Nasdaq established the 

all-inclusive annual fee for each security type and 

shares outstanding tier based on this analysis of 

historical fees paid and regulatory services used, 

taking into account the changes also proposed to 

the annual fee schedule. 

6Companies may make this election on the 

NASDAQ OMX Listing Center Web site. A copy of 

the electronic form that will be used for this 

purpose is attached to the rule filing as Exhibit 3. 

members affected by the Plan of their 

rights and obligations under the Plan. 

It is therefore ordered, pursuant to 

Section 17(d) of the Act, that the Plan 

in File No. 4–678, between FINRA and 

MIAX, filed pursuant to Rule 17d–2 

under the Act, is approved and declared 

effective. 

It is further ordered that MIAX is 

relieved of those responsibilities 

allocated to FINRA under the Plan in 

File No. 4–678. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–27878 Filed 11–24–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73647; File No. SR– 

NASDAQ–2014–087] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Adopt an 

All-Inclusive Annual Listing Fee and 

Modify Certain Other Listing Fees 

November 19, 2014. 

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 November 

7, 2014, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

the proposed rule change as described 

in Items I, II, and III, below, which Items 

have been prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to adopt an 

all-inclusive annual listing fee and 

modify certain other listing fees. While 

these amendments are effective upon 

filing, the Exchange has designated the 

proposed amendments to be operative 

on January 1, 2015. 

The text of the proposed rule change 

is available at http://

nasdaq.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, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Nasdaq proposes to adopt an allinclusive annual listing fee, which will 

simplify billing and provide 

transparency and certainty to companies 

as to the annual cost of listing, modify 

annual fees for listed companies that 

remain on the existing fee schedule, and 

clarify certain fee rules. 

Nasdaq understands from speaking 

with listed companies that many 

companies object to the number and in 

some cases the variable nature of certain 

of Nasdaq’s listing fees. For example, a 

company may owe fees when it issues 

additional shares as a result of events 

that do not raise money and cannot 

always be forecasted or budgeted for by 

the company, such as the exercise by 

employees of stock options or the 

implementation of a reverse stock split. 

To address such concerns, Nasdaq has 

determined to create an alternative fee 

schedule, which eliminates fees related 

to the issuance of additional shares, 

record-keeping changes, and 

substitution listing events, thereby 

simplifying and clarifying for 

companies the annual fees to which 

they are subject. In addition, under this 

alternative fee structure, Nasdaq will 

also eliminate the fee for a written 

interpretation of the listing rules and for 

review by Nasdaq Staff of a compliance 

plan. As a result, companies subject to 

this alternative structure will pay only 

a single annual fee to Nasdaq, which 

will include all the ordinary costs of 

listing for the year.3 This change will 

also benefit Nasdaq, by eliminating the 

multiple invoices that must be sent to a 

company each year 4 and providing 

more certainty as to revenue. 

As detailed in the charts below, for 

companies listed on the Capital Market, 

other than ADRs and Closed-end Funds, 

the all-inclusive annual fee will range 

from $42,000 to $75,000; for ADRs listed 

on the Capital Market the all-inclusive 

annual fee will range from $37,000 to 

$45,000. On the Global and Global 

Select Markets, the all-inclusive annual 

fee for companies other than ADRs and 

Closed-end Funds will range from 

$45,000 to $155,000 and the allinclusive annual fee for ADRs will range 

from $45,000 to $75,000. The allinclusive annual fee for Closed-end 

Funds listed on any market tier will 

range from $30,000 to $100,000. In each 

case, a company’s all-inclusive annual 

fee will be based on its total shares 

outstanding.5

While this alternative is being 

introduced in response to feedback from 

Nasdaq’s listed-companies, Nasdaq also 

understands that this innovation may 

not be appealing to all companies and 

therefore proposes to allow currently 

listed companies the option to switch to 

the proposed all-inclusive annual fee 

schedule for 2015 or to wait until 2018, 

when it will become mandatory for all 

companies. However, Nasdaq will offer 

incentives to companies that voluntarily 

elect the all-inclusive annual fee 

schedule for 2015.6 Specifically, any 

company that chooses to be subject to 


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7Securities Exchange Act Release No. 68129 

(November 1, 2012), 77 FR 66907 (November 7, 

2012) (approving SR–NASDAQ–2012–120). 

8Securities Exchange Act Release No. 61669 

(March 5, 2010), 75 FR 11958 (March 12, 2010) 

(approving SR–NASDAQ–2009–081). 

9The proposed all-inclusive annual fee described 

above was based off of the proposed increased 

annual fees and also reflects Nasdaq’s investment 

in these initiatives and enhancements. 

the all-inclusive annual fee beginning in 

2015 will be billed for 2015, 2016 and 

2017 based on the lower of its thencurrent total shares outstanding or the 

total shares outstanding reflected in 

information held by Nasdaq as of 

December 31, 2014. As such, regardless 

of any increase in the company’s shares 

outstanding during that time, the tier 

upon which its all-inclusive annual fee 

is based will not increase until at least 

January 1, 2018. In addition, because 

listing of additional shares fees are 

billed based on a company’s public 

filings, share changes in the last 

reporting period of 2014 could be billed 

after the company has opted in and, in 

many cases, not until 2015. In order to 

eliminate confusion by companies that 

elect to pay the all-inclusive annual fee, 

and therefore believe they should not 

receive any further listing of additional 

shares fee bills, Nasdaq proposes to 

forgive these listing of additional shares 

fees. Specifically, a company that elects 

to be subject to the all-inclusive annual 

fee will not be billed for listing of 

additional shares after it notifies Nasdaq 

of its election by filing the required 

form. As such, fees for shares issued in 

the final period of 2014, which 

otherwise could be billed during 2015, 

will be forgiven. Nasdaq does not 

believe that these incentives will have 

any adverse impact on the amount of 

funds available for its regulatory 

programs. 

All companies that list after January 1, 

2015 will be subject to the proposed allinclusive annual fee. However, Nasdaq 

acknowledges that companies that have 

already applied to list, or apply in the 

near term, may have made their listing 

decision based on Nasdaq’s current fee 

schedule. As such, Nasdaq proposes to 

make the following accommodation for 

any company that applied to list on 

Nasdaq prior to January 1, 2015, and 

lists after that date. Until December 31, 

2017, such an applicant will be billed 

the all-inclusive annual fee based on the 

lower of its then-current total shares 

outstanding or the total shares 

outstanding reflected in information 

held by Nasdaq as of the date of listing. 

As such, regardless of any increase in 

shares outstanding, the tier upon which 

the all-inclusive annual fee is based for 

such companies will not increase until 

at least January 1, 2018. 

The proposed rule change also raises 

the annual fees that will be paid by 

listed companies that remain on the 

existing fee schedule. The annual fee 

paid by most Capital Market companies 

last increased effective January 1, 2013.7

Fees have not been increased on Global 

Market companies since January 1, 

2010.8 Since then, Nasdaq has invested 

in upgrades to the NASDAQ MarketSite, 

which houses a state-of-the-art digital 

broadcast studio and can be utilized as 

a New York venue by listed companies, 

and the MarketSite Tower. In addition, 

Nasdaq has invested in its online tools, 

including the Listing Center and 

Reference Library. The Listing Center 

allows companies to submit their 

notifications to Nasdaq electronically, 

using on-line forms that are prepopulated with much of the required 

information. The Reference Library 

contains more than 400 frequently asked 

questions describing the application of 

the listing rules, and summaries of 

approximately 450 interpretive letters 

and decisions of the Nasdaq Listing and 

Hearing Review Council. These tools, 

which provide transparency to the 

application of the listing rules and 

simplify some burdens of being a listed 

company, have had approximately 

440,000 page views from January 1 to 

July 31, 2014. Nasdaq believes it is 

appropriate to modify its fees to allow 

continued investment in these 

initiatives and other innovative ideas 

that benefit listed companies and 

enhance the effectiveness of Nasdaq’s 

regulatory program.9

The revised annual fees for most 

companies listed on the Capital Market 

will range from $32,000 to $45,000 

based on total shares outstanding, 

compared with the current $32,000. The 

revised annual fees for most companies 

listed on the Global or Global Select 

Markets will range from $40,000 to 

$125,000 based on total shares 

outstanding, compared with the current 

range of $35,000 to $99,500. 

The following charts summarize the 

current annual fee, the proposed annual 

fee and the proposed all-inclusive 

annual fee applicable to domestic and 

foreign companies, ADRs, and Closedend Funds. 

The revised fees for domestic and 

foreign companies, other than ADRs and 

Closed-end Funds, are as follows: 

Total shares outstanding 2014 annual 

fee * 

2015 annual 

fee * 

2015 allinclusive fee ** 

Global/Global Select Markets 

Up to 10 million shares ................................................................................................................ $35,000 $40,000 $45,000 

10+ to 50 million shares .............................................................................................................. 37,500 40,000 55,000 

50+ to 75 million shares .............................................................................................................. 46,500 46,500 75,000 

75+ to 100 million shares ............................................................................................................ 68,500 69,000 100,000 

100+ to 125 million shares .......................................................................................................... 89,000 93,000 125,000 

125+ to 150 million shares .......................................................................................................... 89,000 125,000 135,000 


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10This situation would most commonly arise 

when the Company delists early in the year before 

it has paid its annual fee invoice. 

11This situation currently affects fewer than five 

companies, which have their common stock listed 

on the Global or Global Select Market and a 

secondary class listed on the Capital Market. Each 

of these companies would pay less under the 

Total shares outstanding 2014 annual 

fee * 

2015 annual 

fee * 

2015 allinclusive fee ** 

Over 150 million shares ............................................................................................................... 99,500 125,000 155,000 

Capital Market 

Up to 10 million shares ................................................................................................................ $32,000 $32,000 $42,000 

10+ to 50 million shares .............................................................................................................. 32,000 40,000 55,000 

Over 50 million shares ................................................................................................................. 32,000 45,000 75,000 

The revised fees for ADRs and Closedend Funds are as follows: 

Total ADRs outstanding 

NASDAQ Global/Global Select Market NASDAQ Capital Market 

2014 annual 

fee * 

2015 annual 

fee * 

2015 allinclusive fee ** 2014 annual 

fee * 

2015 annual 

fee * 

2015 allinclusive fee ** 

ADRs 

Up to 10 million ADRs .............................................................. $30,000 $40,000 $45,000 $32,000 $32,000 $37,000 

10+ to 50 million ADRs ............................................................. 37,500 40,000 45,000 32,000 40,000 45,000 

50+ to 75 million ADRs ............................................................. 42,500 46,500 52,500 32,000 40,000 45,000 

Over 75 million ADRs ............................................................... 50,000 69,000 75,000 32,000 40,000 45,000 

Total shares outstanding 

NASDAQ Global/Global Select and 

Capital Markets 

2014 annual 

fee * 

2015 annual 

fee * 

2015 allinclusive fee ** 

Closed-end Funds 

Up to 5 million shares ................................................................................................................................................... $15,000 $22,500 $30,000 

5 to 10 million shares .................................................................................................................................................... 17,500 22,500 30,000 

10 to 25 million shares .................................................................................................................................................. 20,000 22,500 30,000 

25 to 50 million shares .................................................................................................................................................. 22,500 22,500 30,000 

50+ to 100 million shares ............................................................................................................................................. 30,000 35,000 50,000 

100+ to 250 million shares ........................................................................................................................................... 50,000 55,000 75,000 

Over 250 million shares ................................................................................................................................................ 75,000 80,000 100,000 

* Company must also pay listing of additional shares, record-keeping, substitution listing, and certain regulatory fees. 

** Company does not pay any additional listing of additional shares, record-keeping, substitution listing, or certain regulatory fees in connection with its continued 

listing. 

Finally, Nasdaq proposes to make 

certain clarifying changes to the existing 

annual fee rule text and incorporate 

these same concepts in the proposed allinclusive fee. First, Nasdaq proposes to 

clarify how annual fees (including the 

proposed all-inclusive annual fees) are 

assessed when a company first lists or 

transfers between market tiers. 

Specifically, Nasdaq proposes to codify 

its practice of pro-rating annual fees 

based on the month of a company’s 

listing, and provide examples to 

demonstrate how this proration is 

applied. Nasdaq’s rules already provide 

that annual fees previously paid are not 

refundable if a company’s securities are 

removed from Nasdaq. Nasdaq proposes 

to continue to apply this provision to 

the proposed all-inclusive fee and to 

also clarify under both the annual fee 

and the all-inclusive fee that if a 

company is removed before it has paid 

the applicable fee, the fee is nonetheless 

owed and that Nasdaq will not waive 

the amount owed.10 In recognition of 

the fact that a company does not get a 

refund or waiver of annual fees or allinclusive annual fees if its securities are 

delisted, Nasdaq also proposes to clarify 

that if a company relists in the same 

year where it had previously paid an 

annual fee, that the company would not 

be subject to a second annual fee for that 

same year. 

In the case of a company that transfers 

between Nasdaq’s tiers, the proposed 

rule change would clarify that the 

annual fee or all-inclusive annual fee, as 

applicable, would be prorated based on 

the month of the company’s transfer. 

However, no amount of the annual fee 

previously assessed or paid would be 

refunded if the prorated fee for the new 

market tier is lower. 

The proposed rule would also modify 

the way a company is charged if it has 

securities listed on both the Global or 

Global Select Market and the Capital 

Market under both the standard annual 

fee and the all-inclusive annual fee. 

Presently, while Nasdaq’s rules provide 

that Nasdaq will aggregate shares of all 

securities listed on the Global Market 

(including the Global Select Market) in 

calculating the fee for the Global Market 

and shares of all securities listed on the 

Capital Market in calculating the fee for 

the Capital Market, the rules do not 

address the situation where the same 

company has a security listed on each 

the Global or Global Select Market and 

the Capital Market. As a result, a 

company presently is charged separately 

for the securities on each market tier. 

Nasdaq believes that this is an 

inequitable result, and proposes to 

modify the rules such that in this 

situation shares listed on the Capital 

Market are not assessed a separate fee 

for the Capital Market, but instead are 

aggregated with the shares listed on the 

Global or Global Select Market in 

calculating the fee for that market.11


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Federal Register / Vol. 79, No. 227 / Tuesday, November 25, 2014 / Notices 70235 

proposed rule change than they would if Nasdaq 

continued to assess fees separately for each market 

tier. 

12Securities Exchange Act Release No. 54241 

(July 31, 2006), 71 FR 45359 (August 8, 2006). 

13 If the company initially listed in 2014, it would 

pay the minimum $45,000 all-inclusive annual fee 

for 2015 and 2016 and be subject to the all-inclusive 

annual fee in 2017 based on its total shares 

outstanding as of December 31, 2014. Alternatively, 

if the company initially listed in 2013, it would pay 

the minimum $45,000 all-inclusive annual fee for 

2015 and be subject to the all-inclusive annual fee 

in 2016 and 2017 based on its total shares 

outstanding as of December 31, 2014. Fewer than 

10 companies have listed on Nasdaq upon emerging 

from bankruptcy in 2013 or 2014. 

14 15 U.S.C. 78f. 

15 15 U.S.C. 78f(b)(4) and (5). 

16The Justice Department noted the intense 

competitive environment for exchange listings. See 

‘‘NASDAQ OMX Group Inc. and 

IntercontinentalExchange Inc. Abandon Their 

Proposed Acquisition Of NYSE Euronext After 

Justice Department Threatens Lawsuit’’ (May 16, 

2011), available at http://www.justice.gov/atr/

public/press_releases/2011/271214.htm. 

17See NYSE Listed Company Manual Section 

902.03 (charging an annual fee per share); NYSE 

MKT Company Guide Section 141 (charging an 

annual fee based on tiers of outstanding shares). 

18See footnote 5, supra. 

Nasdaq proposes to clarify that where 

Nasdaq rules waive fees in connection 

with certain merger situations, the 

company will receive a credit for the 

amount waived if the acquired company 

has already paid that fee. Conversely, in 

cases where the acquired company has 

not paid the fee, the forgiven fee will be 

treated as a waiver. The proposed rule 

will also extend those fee waivers and 

credits to companies paying the allinclusive annual fee. In addition, the 

proposed rule change will specify 

which of the entities involved in a 

merger will receive the waiver or credit. 

Further, while the rule currently 

requires that a company apply for a fee 

waiver if it is applicable, Nasdaq 

proposes instead to apply these waivers 

and credits automatically for all eligible 

companies. 

Nasdaq also proposes to delete 

current IM–5920–1, which provides a 

waiver for listed securities exempt from 

registration under Section 12(g) of the 

Act pursuant to Rule 12g3–2(b). After 

Nasdaq registered as a national 

securities exchange, these securities 

were initially permitted to list pursuant 

to an exemption from Section 12(a) of 

the Act.12 This exemption expired on 

August 1, 2009, and companies 

described in the interpretive material 

can no longer be listed on Nasdaq. 

The proposed rule change will also 

modify the fee accommodation available 

to companies that list upon emerging 

from bankruptcy to reflect the addition 

of the all-inclusive annual fee 

alternative. Under that rule, the annual 

fee for a company that lists upon 

emerging from bankruptcy is the 

minimum annual fee for the year of 

listing and the subsequent two full 

calendar years (the ‘‘Bankruptcy Annual 

Fee Accommodation’’). As revised, such 

a company can opt to transition to the 

all-inclusive annual fee for 2015, just 

like any other company. And, consistent 

with the current rule, a company that 

does so will pay the minimum allinclusive annual fee until the end of its 

second full calendar year following 

listing. In this manner, irrespective of 

when the company listed, it will receive 

the benefit of the Bankruptcy Annual 

Fee Accommodation. Moreover, the 

company will receive the benefits of 

proposed IM–5910–1(b)(1) for the 

period after the Bankruptcy Annual Fee 

Accommodation ends until December 

31, 2017.13

Last, Nasdaq proposes to modify a 

cross reference to the record-keeping fee 

in Rule 5250(e)(3), since that fee will 

not be payable by all companies, update 

the preamble to the listing fee section to 

reflect the changes discussed herein and 

remove from the rules certain effective 

dates that are no longer applicable. 

While the changes proposed herein 

are effective upon filing, Nasdaq has 

designated that the changes be operative 

on January 1, 2015. Until January 1, 

2015, Nasdaq will maintain the existing, 

applicable fee schedule in its online 

manual, and will also display the 

changes proposed herein as being 

effective in the future. 

2. Statutory Basis 

Nasdaq believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,14 in 

general and with Sections 6(b)(4) and (5) 

of the Act,15 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees, and other charges 

among its members, issuers and other 

persons using its facilities, and does not 

unfairly discriminate between 

customers, issuers, brokers or dealers. 

As a preliminary matter, Nasdaq 

competes for listings with other national 

securities exchanges and companies can 

easily choose to list on, or transfer to, 

those alternative venues.16 As a result, 

the fees Nasdaq can charge listed 

companies are constrained by the fees 

charged by its competitors and Nasdaq 

cannot charge prices in a manner that 

would be unreasonable, inequitable or 

unfairly discriminatory. 

Nasdaq believes that the proposed allinclusive annual fees are reasonable 

because Nasdaq is eliminating multiple 

fees in favor of a single annual fee for 

listed companies. Under the proposed 

fee structure, companies can pay less 

than they would if they remain on the 

existing structure and pay annual fees, 

listing of additional shares fees (which 

can be as much as $65,000 annually) or 

incur record-keeping or substitution 

listing fees. The proposed all-inclusive 

annual fees are also equitably allocated 

and not unfairly discriminatory because 

they will be assessed based on a 

company’s shares outstanding, 

consistent with the way Nasdaq and 

other national securities exchanges 

charge fees today.17 This allocation 

method, previously approved by the 

Commission, is not inequitable or 

unfairly discriminatory because 

companies with fewer shares 

outstanding tend to be smaller 

companies, which may use fewer of the 

Exchange’s services and be more willing 

to forgo an exchange listing if it costs 

more. In addition, while companies may 

pay separate fees today for certain 

corporate actions, record-keeping 

events, and share issuances, as well as 

fees for written interpretations of listing 

rules and reviews of compliance plans, 

it is not inequitable or unfairly 

discriminatory to eliminate those fees 

because all companies will benefit 

similarly from that elimination in years 

where they otherwise would have had 

to pay these fees. In that regard, Nasdaq 

reviewed the historic activities of 

companies with various amounts of 

shares outstanding to assess the use of 

listing-related services, and established 

the all-inclusive annual fee for each 

security type and tier of outstanding 

shares based on this analysis.18 Further, 

the expenses associated with 

maintaining the infrastructure to 

process share issuances and corporate 

actions and events and to review rule 

interpretation requests and compliance 

plans is part of Nasdaq’s overhead, 

which helps Nasdaq protect investors 

and the public interest to the benefit of 

all listed companies. That necessary 

overhead does not vary materially based 

on the number of companies that utilize 

these services, and it is therefore 

equitable to spread their costs across all 

companies. All listed companies also 

benefit from the transparency provided 

when Nasdaq publishes summaries of 

its interpretive letters. As such, 

spreading the costs of such 

interpretations across all listed 

companies represents an equitable 

allocation of reasonable fees and is not 

unfairly discriminatory. 

Nasdaq also believes that the 

proposed incentives offered to 

companies that elect the all-inclusive 

annual listing fee for 2015 are 

reasonable and not unfairly 


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70236 Federal Register / Vol. 79, No. 227 / Tuesday, November 25, 2014 / Notices 

19See footnotes 7 and 8, supra. 

20Nasdaq Rules 5910(c)(3), 5910(d)(6) and 

5920(c)(5). 

discriminatory. These incentives are 

available equally to all companies and 

would provide the same benefit to all 

companies that make the election. In 

addition, as noted above, Nasdaq will 

accrue benefits from companies electing 

the all-inclusive annual listing fee 

structure, including by eliminating the 

multiple invoices that are sent to a 

company each year and providing more 

certainty as to revenue, and the 

incentives are designed to help Nasdaq 

capture these benefits sooner, which is 

a reasonable and non-discriminatory 

reason to provide the incentives to 

companies. 

The proposed increase to the annual 

fee for companies that do not elect the 

all-inclusive fee, which increase is also 

reflected in the all-inclusive annual fee, 

is also an equitable allocation of 

reasonable fees and not unfairly 

discriminatory based on the 

enhancements Nasdaq has made since 

fees were last increased in 2010, for 

Global and Global Select Market 

companies, and 2013, for most Capital 

Market companies.19 As described 

above, Nasdaq has invested in upgrades 

to the NASDAQ MarketSite and 

MarketSite Tower, and its online tools, 

including the Listing Center and 

Reference Library, to the benefit of all 

listed companies and their investors and 

prospective investors. The proposed 

increase also will help Nasdaq continue 

to invest in these initiatives and its 

regulatory programs. 

Changes to the tier ranges for fees 

charged issuers that do not elect the allinclusive fee, including ADRs and 

Closed-end Funds, are not unreasonable 

nor unfairly discriminatory because 

these changes were based on a review of 

the number and size of companies in the 

existing tier ranges, their historic use of 

listing-related services, and the fees 

charged by other markets. 

Nasdaq believes that having lower 

maximum fees for ADRs under the 

proposed all-inclusive and standard 

annual fees is an equitable allocation of 

reasonable fees and not unfairly 

discriminatory because the U.S. listing 

is not typically an ADR’s primary 

listing. In addition, because ADRs are 

foreign private issuers, which currently 

pay a maximum listing of additional 

shares fee of $7,500, it is appropriate to 

charge ADRs a lower all-inclusive 

annual fee than a domestic company, 

which could pay a listing of additional 

shares fee of up to $65,000. On the other 

hand, Nasdaq believes that it is no 

longer appropriate to grant a preference 

for listing of additional shares fees to 

foreign private issuers other than ADRs, 

because Nasdaq is generally the primary 

listing for such companies and other 

exchanges charge additional listing fees 

for these companies in the same manner 

as domestic companies. As a result, 

Nasdaq proposes that foreign private 

issuers other than ADRs pay the same 

all-inclusive annual fee as domestic 

issuers, even though they are subject to 

a lower listing of additional shares fee 

under the current fee schedule. Nasdaq 

would continue to base its fees for these 

companies only on the shares issued 

and outstanding in the United States, 

however, so to the extent a foreign 

private issuer has another listing, it 

would only pay fees on those shares that 

trade on Nasdaq. As a result, Nasdaq 

believes it is an equitable allocation of 

reasonable fees and not unfairly 

discriminatory to require foreign private 

issuers, other than ADRs, pay allinclusive fees on the same schedule as 

domestic companies. In addition, in 

light of the historic benefit provided to 

foreign private issuers by way of a lower 

listing of additional shares fee, Nasdaq 

believes it is not unreasonable nor 

unfairly discriminatory to maintain that 

benefit until the existing annual fee 

schedule is completely phased out in 

2018. 

Nasdaq also believes that it is 

appropriate to maintain a separate fee 

schedule for Closed-end Funds based on 

their unique characteristics. These 

companies are particularly sensitive to 

the expenses they incur, given that they 

compete for investment dollars based on 

return. In addition, they need to issue 

shares as a primary means to expand 

their businesses and raise additional 

money to invest. As such, Nasdaq 

already applies a different annual fee 

and maximum quarterly listing of 

additional shares fee for these 

companies, and the proposed rule 

change maintains a separate, lower fee 

schedule for them, which remains an 

equitable allocation of reasonable fees 

that is not unfairly discriminatory. 

Nasdaq believes that continuing to 

assess separate fees for the review of 

delisting decisions by the Hearings 

Panels and the Nasdaq Listing and 

Hearing Review Council is an equitable 

allocation of reasonable fees that is not 

unfairly discriminatory. These reviews 

come only after Nasdaq staff has either 

allowed the company the maximum 

extension permitted under the listing 

rules or determined that such an 

extension is inappropriate. Such 

reviews are not an ordinary cost of a 

company’s annual listing and any 

benefit from consideration by the 

Hearings Panel or Listing and Hearing 

Review Council is limited to the 

particular company that requests review 

and is not precedential with respect to 

other companies. As such, Nasdaq 

believes it is appropriate to exclude the 

fees associated with these activities 

from the all-inclusive annual fee. 

Nasdaq believes that the proposed 

clarifying changes describing how fees 

are assessed when a company first lists 

or transfers between Nasdaq’s tiers is an 

equitable allocation of reasonable fees. 

In addition, these changes and the 

addition of examples demonstrating the 

application of various rules will clarify 

Nasdaq’s rules, and thereby remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, protect investors and the public 

interest. Nasdaq rules already provide 

that a company that is removed or 

voluntarily delists will not receive a 

refund of the listing fee. Clarifying that 

a company that transfers to the Capital 

Market from the Global or Global Select 

Market receives a credit for the fee 

previously assessed, but not a refund, 

aligns the treatment within the rules of 

these companies with that of companies 

that are removed or voluntarily delist. 

Similarly, clarifying that a company that 

paid an annual fee or all-inclusive 

annual fee for the year will not be 

subject to a second fee if it delists and 

relists in the same year assures that 

companies do not pay twice for the 

same services. As such, in each of these 

cases the company receives listing 

services for the year it paid the annual 

fee, and the proposed changes are 

therefore equitable allocations of 

reasonable fees. 

Prorating fees for new listings based 

on the month of listing or transfer 

assures that companies are not subject 

to fees before listing and are not subject 

to the higher fees of a particular market 

tier before they are listed on that tier, 

subject to the constraints of Nasdaq’s 

monthly billing cycles. The rules 

already allocate annual fees in this 

manner for companies that transfer 

between Nasdaq market tiers.20 As such, 

this method of assessing fees is an 

equitable allocation of reasonable fees. 

Aggregating shares listed on the 

Global or Global Select Market with 

shares listed on the Capital Market 

when calculating fees provides an 

equitable allocation of fees in a manner 

that is not unfairly discriminatory 

because it provides the same benefit to 

a company with shares on both market 

tiers as is available to a company with 

all of its shares on the Global or Global 

Select Market and such a company does 


wreier-aviles on DSK4TPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 227 / Tuesday, November 25, 2014 / Notices 70237 

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

22 15 U.S.C. 78s(b)(3)(A)(ii). 

23 17 CFR 240.19b–4(f). 

24 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

not receive any additional benefit from 

having some of its shares listed on the 

Capital Market. 

A company that listed upon emerging 

from bankruptcy currently pays the 

minimum annual fee for the year of 

listing and subsequent two years. 

Allowing such companies that opt in to 

the all-inclusive annual fee to also pay 

the minimum fee on that fee schedule 

during the same period, and forgiving a 

portion of the all-inclusive annual fee in 

certain merger situations where the 

annual fee is similarly forgiven, is not 

unreasonable or unfairly discriminatory 

because these proposed changes extend 

benefits available to companies under 

the existing fee schedule to companies 

that will be on the all-inclusive fee 

schedule, thereby perpetuating features 

that the Commission has previously 

concluded satisfy the statutory 

requirements. Clarifying when a 

company receives a credit, instead of a 

waiver, and which company involved in 

a merger receives that credit or waiver 

clarifies Nasdaq’s rules and is not 

unreasonable or unfairly discriminatory 

because these clarifications give effect to 

the intent of the current waivers while 

respecting the difference between the 

two entities involved in a merger. 

Finally, Nasdaq believes that the 

proposed fees are consistent with the 

investor protection objectives of Section 

6(b)(5) of the Act 21 in that they are 

designed to promote just and equitable 

principles of trade, to remove 

impediments to a free and open market 

and national market system, and in 

general to protect investors and the 

public interest. Specifically, the fees are 

designed, in part, to ensure that there 

are adequate resources for Nasdaq’s 

listing compliance program, which 

helps to assure that listing standards are 

properly enforced and investors are 

protected. 

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. 

The market for listing services is 

extremely competitive and listed 

companies may freely choose alternative 

venues based on the aggregate fees 

assessed, and the value provided by 

each listing. This rule proposal does not 

burden competition with other listing 

venues, which are similarly free to set 

their fees. Further, this proposed rule 

change would introduce an all-inclusive 

annual listing fee, which no other 

market currently offers and which may 

therefore increase competition with 

other listing venues. Nasdaq believes 

that this innovative fee proposal reflects 

the existing competition between listing 

venues and will further enhance such 

competition. For these reasons, Nasdaq 

does not believe that the proposed rule 

change will result in any burden on 

competition for listings. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act 22 and 

paragraph (f) of Rule 19b–4 

thereunder.23

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend 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 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NASDAQ–2014–087 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2014–087. This 

file number should be included on the 

subject line if email 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 

10:00 a.m. and 3:00 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– 

NASDAQ–2014–087 and should be 

submitted on or before December 16, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–27879 Filed 11–24–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73640; File No. SR– 

NYSEMKT–2014–93] 

Self-Regulatory Organizations; NYSE 

MKT LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending Its Rules 

Concerning Supervision To Harmonize 

the Rules With Certain Financial 

Industry Regulatory Authority, Inc. 

Rules and Making Other Conforming 

Changes 

November 19, 2014. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) and Rule 19b–4 thereunder,2

notice is hereby given that on November 

5, 2014, NYSE MKT LLC (‘‘NYSE MKT’’ 

or ‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 


wreier-aviles on DSK4TPTVN1PROD with NOTICES