Federal Register / Vol. 82, No. 189 / Monday, October 2, 2017 / Notices 45917 

14 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4 15 U.S.C. 78s(b)(1). 

5 17 CRF [sic] 240.19b–4. 

6See Securities Exchange Act Release No. 34– 

78101 (June 17, 2016), 81 FR 41141 (June 23, 2016) 

(File No. 10–222). 

7The Exchange’s listing program launch is 

pending Commission rulemaking to amend Rule 

146 under Section 18 of the Securities Act of 1933 

(‘‘Securities Act’’) to designate securities listed on 

the Exchange as covered securities for purposes of 

Section 18(b) of the Securities Act. See Securities 

Act Release No. 10390 (July 14, 2017) 82 FR 33839 

(July 21, 2017) (File No. S7–06–17) proposing such 

rule amendment. 

8See IEX Rule 14.202. 

9Rule 12d2–2(c) under the Act specifies, among 

other things, the requirements applicable to an 

issuer of a class of securities listed on a national 

securities exchange to notify the Commission of its 

withdrawal of such securities from listing on such 

national securities exchange. Subparagraph 2(ii) 

thereto requires that the issuer must provide notice 

to its national securities exchange of such 

determination no fewer than 10 days before 

notification to the Commission. Subparagraph 

(2)(iii) thereto requires that ‘‘[c]ontemporaneous 

with providing written notice to the exchange of its 

intent to withdraw a class of securities from listing 

and/or registration, the issuer must publish notice 

of such intention, along with its reasons for such 

withdrawal, via a press release and, if it has a 

publicly accessible Web site, posting such notice on 

that Web site.’’ 

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 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal office of 

FINRA. 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–FINRA–2017–029 and 

should be submitted on or before 

October 23, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–21001 Filed 9–29–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81725; File No. SR–IEX– 

2017–30] 

Self-Regulatory Organizations: 

Investors Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Related to 

Listing Fees 

September 26, 2017. 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on 

September 13, 2017, the Investors 

Exchange LLC (‘‘IEX’’ or the 

‘‘Exchange’’) 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 the self-regulatory 

organization. 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 

Pursuant to the provisions of Section 

19(b)(1) under the Securities Exchange 

Act of 1934 (‘‘Act’’),4 and Rule 19b–4 

thereunder,5 Investors Exchange LLC 

(‘‘IEX’’ or ‘‘Exchange’’) is filing with the 

Commission a proposed rule change to 

amend Rule 14.601, which is currently 

reserved, to (i) adopt an annual fee of 

$50,000 for companies listing on the 

Exchange and (ii) provide for specified 

fee credits. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at www.iextrading.com, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization 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 statement [sic] may be 

examined at the places specified in Item 

IV below. The self-regulatory 

organization 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

On June 17, 2016, the Commission 

granted IEX’s application for registration 

as a national securities exchange under 

Section 6 of the Act including approval 

of rules applicable to the qualification, 

listing and delisting of companies on 

the Exchange.6 The Exchange plans to 

begin a listing program in 2017 and is 

proposing to adopt a simple fee 

structure for listed companies.7

Specifically, the Exchange proposes to 

amend Rule 14.601 to (i) adopt an allinclusive annual fee of $50,000 for 

companies listing on the Exchange and 

(ii) provide for specified fee credits for 

a company that is approved for IEX 

listing 8 and, prior to or within 120 

calendar days of the first IEX listing, 

announces its intent to transfer its 

listing to IEX in the company’s press 

release issued pursuant to Rule 12d2– 

2(c)(2)(iii) under the Act 9 announcing 

its intent to withdraw its securities from 

listing on its current national securities 

exchange. 

As proposed, paragraph (a) of Rule 

14.601 contains introductory text stating 

that the rule sets forth the required 

listing fees. Paragraph (b) specifies a 

$50,000 all-inclusive annual listing fee 

that will be payable annually by each 

listed company on January 1st of each 

year for the upcoming calendar year, 

subject to fee credits as specified in 

paragraph (c) and described more fully 

below. The annual listing fee will not be 

charged in the first calendar year of a 

company’s listing on IEX, but thereafter 

would be the only fee payable by a 

listed company per year for all aspects 

of its listing. The Exchange is not 

proposing to charge application fees, 

entry fees, fees for the listing of 

additional shares, recordkeeping fees, 

substitution listing fees, fees for a 

written interpretation of listing rules or 

hearing fees. All listed companies will 

be subject to the same annual listing fee, 

without differentiation based on the 

number of shares outstanding, unless 

eligible for a fee credit as described 

below. Paragraph (b) also provides that 

the annual fee will be subject to a prorata refund if the company ceases to be 


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10 Id. 

11See proposed Rule 14.601(b). 

12See supra note 6 [sic]. 

13 15 U.S.C. 78f. 

14 15 U.S.C. 78f(b)(4). 

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

16See Securities Exchange Act Release No. 73647 

(November 19, 2014), 79 FR 70232 (November 25, 

2014) (SR–NASDAQ–2014–087). 

17Market capitalization estimates are based on 

Bloomberg data as of August 28, 2017. NYSE and 

NASDAQ listing fee estimates are based on listing 

fees reflected in Section 902 of the NYSE Listed 

Company Manual and the NASDAQ Rule 5900 

Series (as applicable) and assumes (for NASDAQ) 

that each company paid the all-inclusive annual 

listing fee. Listing fee estimates are based on shares 

outstanding as reflected in Bloomberg data as of 

August 28, 2017. 

listed on IEX during the calendar year 

for which such fee was paid. Paragraph 

(d) specifies that the Exchange is not 

proposing to charge any other listing 

fees. 

The Exchange proposes to provide a 

fee credit to any company that is 

approved for IEX listing and prior to or 

within 120 calendar days of the first IEX 

listing, announces its intent to transfer 

its listing to IEX in the company’s press 

release issued pursuant to Rule 12d2– 

2(c)(2)(iii) under the Act 10 announcing 

its intent to withdraw its securities from 

listing on its current national securities 

exchange. The credit will also apply to 

the first IEX listing if such listing is a 

transfer from another national securities 

exchange. The Exchange will provide 

notice of the first listing to the issuer 

community on the day when the first 

listing occurs. The fee credit will be the 

greater of $250,000 or the amount of any 

nonrefundable listing fees actually paid 

by the company to another listing 

exchange during the calendar year in 

which it lists on IEX if the company is 

no longer listed on such other exchange 

upon listing on IEX. The fee credit may 

only be used to offset the IEX allinclusive listing fee.11

Notwithstanding the fee credit, IEX 

will have sufficient resources available 

for its listing compliance program, 

which helps to assure that listing 

standards are properly enforced and 

investors are protected. Specifically, as 

described in the Commission’s order 

approving IEX’s exchange application, 

the Exchange and IEX Group, Inc. (its 

parent) have entered into an agreement 

that requires IEX Group, Inc. to provide 

adequate funding for the Exchange’s 

operations, including regulation of the 

Exchange.12

2. Statutory Basis 

IEX believes that the proposed rule 

change is consistent with the provisions 

of Section 6(b) 13 of the Act in general, 

and furthers the objectives of Sections 

[sic] 6(b)(4) 14 of the Act, in particular, 

in that it is designed to provide for the 

equitable allocation of reasonable dues, 

fees and other charges among its 

Members, issuers and other persons 

using its facilities. Additionally, IEX 

believes that the proposed fees are 

consistent with the investor protection 

objectives of Section 6(b)(5) 15 of the 

Act, in particular, 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, and are not designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

As a preliminary matter, IEX is a new 

entrant in the exchange listing market 

and expects to face intense competition 

from the New York Stock Exchange 

(‘‘NYSE’’) and the Nasdaq Stock Market 

(‘‘NASDAQ’’), which, IEX believes, 

essentially operate as a duopoly in the 

U.S. listing market with the vast 

majority of operating companies listed 

on U.S. securities exchanges listed on 

those two. As discussed more fully 

below, IEX’s proposed simple low cost 

flat-fee structure, combined with the 

limited fee credit, as well as no fee in 

the first year of listing, is designed to 

address the significant competitive 

challenges. Moreover, in view of the 

competition among listing exchanges, 

whereby companies can easily choose 

not to list on IEX, the fees that IEX can 

charge listed companies are constrained 

by the fees charged by its competitors 

and IEX cannot charge fees in a manner 

that would be unreasonable, 

inequitable, or unfairly discriminatory. 

As described more fully below, IEX’s 

proposed listing fees and credits are 

available to all listed companies in a 

consistent and transparent manner, 

treating similarly situated companies 

similarly. IEX has chosen to structure its 

listing fees differently than NYSE and 

NASDAQ, which are generally based on 

shares outstanding. This structure has 

existed for many years, and has been 

justified on the basis that companies 

with fewer shares outstanding tend to be 

smaller companies, which may use 

fewer of the listing exchange’s services 

and be more willing to forgo an 

exchange listing if it costs more.16

However, the Exchange does not believe 

that the number of shares outstanding of 

a particular company necessarily 

corresponds to the size of the company. 

To the contrary, there are a variety of 

examples that demonstrate that shares 

outstanding does not correlate to larger 

market capitalization. This fee structure 

thus results in similarly situated 

companies being charged materially 

different listing fees. For example, 

Conagra Brands, Inc. (symbol: CAG), 

Fleetcor Technologies Inc. (symbol: 

FLT), and Autozone Inc. (symbol: AZO) 

each have similar market capitalizations 

($13.5 billion, $13.1 billion, and $14.7 

billion respectively) but because of 

differences in shares outstanding, we 

estimate that CAG paid an annual listing 

fee in 2017 to NYSE of $436,438 per 

year while FLT paid $96,473 and AZO 

paid $59,500. Similarly, NVIDIA Corp 

(symbol: NVDA) and The Priceline 

Group Inc. (symbol: PCLN) each have 

similar market capitalizations ($99 

billion and $87.8 billion respectively) 

but because of differences in shares 

outstanding, we estimate that NVDA 

paid an annual listing fee in 2017 to 

NASDAQ of $155,000 while PCLN paid 

$55,000. And we estimate that Biocryst 

Pharmaceuticals Inc. (symbol: BCRX), 

with a market capitalization of only 

$397.3 million, paid a $100,000 annual 

listing fee to NASDAQ in 2017, almost 

double the PCLN fee notwithstanding 

that PCLN’s market capitalization is 

approximately 221 times greater ($87.4 

billion greater) than BCRX’s market 

capitalization.17

In addition, a company that has made 

the decision to effect a forward stock 

split will, under the existing exchange 

pricing structure, be charged double 

their previous listing fee (subject to any 

relevant maximum fees as discussed 

below) despite the fact that the company 

has not changed in structure or market 

capitalization. 

IEX also does not believe that smaller 

companies use fewer listing exchange 

services. To the contrary, the Exchange 

believes that larger companies generally 

use fewer regulatory services than 

smaller companies since they tend to be 

more consistently above the continued 

listing requirements, and also tend to 

utilize more sophisticated advisors for 

interactions with the listing exchange. 

Thus, the Exchange believes that its 

simple listing fee and credit structure is 

a more reasonable and equitable 

approach, as described below. 

The Exchange believes that $50,000 

per year for the all-inclusive annual 

listing fee is fair and reasonable based 

on IEX’s anticipated costs to support 

and maintain a listing business, 

including its listing compliance 

program. IEX also notes that the 

proposed fee is less than all NYSE fees, 

within the range of NASDAQ fees, and 

materially less than the maximum 

annual fees charged by each of NYSE 

and NASDAQ. Currently, annual listing 

fees for NYSE range from $59,500 to 


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18See Sections 902.02 and 902.03 of the NYSE 

Listed Company Manual. 

19See NASDAQ Rule 5920(c) for NASDAQ 

Capital Market annual fees, Rule 5910(c) for 

NASDAQ Global and Global Select annual fees, and 

IM–5910–1 for the all inclusive annual listing fees 

applicable to companies listed on the NASDAQ 

Global Market (including the Global Select Market). 

20 Id. 

21See, e.g., Securities Exchange Act Release No. 

78149 (June 24, 2016), 81 FR 42388 (June 29, 2016) 

(SR–NASDAQ–2016–085). 

22See Securities Act Release No. 10390 (July 14, 

2017), 82 FR 33839 (July 21, 2017) (File No. S7– 

06–17). 

23 In the event that the Exchange proposes 

increases to its listing fees, such increases will 

include a grandfathering provision for companies 

that have remaining credits available so that each 

such company obtains the contemplated years of 

free listing as proposed herein, subject to 

Commission filing and effectiveness. 

24See Section 902 of the NYSE Listed Company 

Manual. 

25See NASDAQ IM–5900–4 (Waiver of Certain 

Annual Listing Fees Upon Transfer of a NonNasdaq Exchange Listed Security). 

26See Securities Exchange Act Release No. 53696 

(April 21, 2006), 71 FR 25273 (April 28, 2006) (SR– 

NASD–2006–047). 

27See Section 907.00 of the NYSE Listed 

Company Manual and Nasdaq Rule IM–5900–7. The 

Exchange notes that the transfer incentive values 

are provided over multiple years. Further, the value 

of the Nasdaq incentives noted are for listed 

companies with a market capitalization of $5 billion 

that transfer from NYSE to the Nasdaq Global 

Market or Global Select Market. Listed companies 

that transfer from NYSE to the Nasdaq Global 

Market or Global Select Market with market 

capitalization of up to $750 million and between 

$750 million or more but less than $5 million [sic] 

receive incentives over multiple years in the form 

of specified products and services valued at an 

aggregate of $144,500 and $553,500 respectively. 

The value of the NYSE incentives noted are for 

listed companies with a global market value of $400 

million or more that transfer from another national 

securities exchange to NYSE. Listed companies 

with a global market value of less than $400 million 

receive incentives over 24 calendar months in the 

form of specified products and services valued at 

$153,000. 

$500,000,18 while annual listing fees for 

NASDAQ range from $32,000 to 

$155,000,19 each depending on the 

company’s total shares outstanding. The 

all-inclusive annual listing fees 

applicable to companies listed on the 

NASDAQ Global Select Market range 

from $45,000–$155,000.20 IEX notes that 

its listing standards are substantially 

similar to the listing standards for 

NASDAQ Global Select market and 

therefore believes that it is most relevant 

to compare the IEX proposed allinclusive annual listing fee to the 

NASDAQ Global Select Market allinclusive annual listing fee range. 

IEX also believes that it is reasonable 

to structure its fee as an all-inclusive 

fee. NASDAQ has begun to structure its 

annual listing fees as an all-inclusive 

fee, noting that such a fee structure 

simplifies billing and provides 

transparency and certainty to companies 

as to the annual cost of listing.21 IEX 

also believes that such considerations 

warrant use of an all-inclusive fee. 

IEX further believes that it is 

reasonable to provide a fee credit under 

the terms described in the Purpose 

section. Transferring a listing to a new 

exchange is a significant decision for a 

public company, and the Exchange 

anticipates that NYSE and NASDAQ 

will each actively seek to retain listed 

companies considering transferring their 

listing to IEX. Accordingly, the 

Exchange believes that although listing 

on IEX will provide certain benefits to 

issuers compared to listing on NYSE 

and NASDAQ—such as its investor and 

issuer focused model—the Exchange 

also believes that meaningful fee credits 

are initially necessary to establish its 

listing program quickly. 

As the Commission has explicitly 

acknowledged, the current listing 

market is highly concentrated, noting 

that, ‘‘[e]ntrant exchanges cann . . . face 

barriers to entry related to reputation. 

Exchanges that enter the market may not 

be able to quickly establish a strong 

reputation for high quality listings, 

which may adversely affect their ability 

to compete with incumbent exchanges. 

This lack of reputation may discourage 

both investors and issuers from 

transacting or listing on an entrant 

exchange, which may reinforce an 

entrant exchange’s lack of 

reputation.’’ 22

As proposed, IEX’s fee credit is 

designed to address these significant 

competitive challenges, and quickly 

establish a strong reputation for high 

quality listings. Based on discussions 

with companies currently listed on 

NYSE and NASDAQ, the Exchange 

believes that a meaningful fee credit is 

necessary to incentivize currently listed 

companies to transfer their listing to 

IEX. In this regard, companies generally 

view a listing transfer as a long-term 

commitment and therefore the financial 

incentive should align with such longterm commitment. IEX further believes, 

based on these discussions, that in order 

to be meaningful the fee credit must 

accomplish two objectives: Provide at 

least five years of free listing and cover 

the listing fees already paid by the 

company in the year of listing on IEX.23

In order to address both objectives, the 

fee credit will be for a minimum of 

$250,000 (to cover five years of listing 

fees) or the greater of the amount of any 

nonrefundable listing fee actually paid 

by the company to another listing 

exchange during the calendar year in 

which it lists on IEX if the company is 

no longer listed on such other exchange 

upon listing on IEX. 

Further, the Exchange believes that it 

is reasonable, and consistent with an 

equitable allocation of listing fees to 

provide a larger fee credit to companies 

that have already paid comparatively 

larger listing fees to NYSE or NASDAQ, 

which for some NYSE companies is as 

high as $500,000.24 In this regard, the 

Exchange believes that an NYSE or 

NASDAQ listed company that has paid 

such larger listing fees may require a 

corresponding credit in order to 

incentivize the company to transfer its 

listing to IEX. Accordingly, the 

Exchange believes that providing an 

enhanced credit is not an inequitable 

allocation of fees because it merely 

operates to address the potential 

disincentive to list that may exist for a 

company that has paid listing fees 

higher than $250,000. All similarly 

situated companies will receive the 

same credit. 

The Exchange notes that there is 

precedent to provide a listing fee credit 

based on the amount of listing fees paid 

to another exchange. For example, 

NASDAQ Rules provide that NASDAQ 

waives a portion of its annual fee in the 

case of securities that transfer to 

NASDAQ, by providing such companies 

with a credit in the pro-rated amount of 

any annual listing fee paid to its prior 

listing exchange for the period of time 

after the transfer, which is used to offset 

NASDAQ listing fees for the first year of 

listing.25 In its rule filing adopting this 

credit,26 NASDAQ (then a subsidiary of 

the National Association of Securities 

Dealers, Inc.), noted that the credit 

would remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system by removing an impediment to 

issuers transferring from another market 

to NASDAQ. Similarly, IEX’s proposed 

enhanced listing fee credit for a 

company that paid more than $250,000 

in listing fees in the year of its transfer 

to IEX is designed to incentivize such 

companies to transfer to IEX by 

providing a credit for listing fees 

actually paid to another exchange in the 

year of transfer, thereby removing a 

potential impediment to such transfers. 

Further, the Exchange notes that NYSE 

and Nasdaq each offer incentives to 

certain listed companies that transfer 

from the other market in the form of 

specified products and services that are 

valued as high as $757,500 for a transfer 

from NYSE to Nasdaq and $263,000 for 

a transfer from Nasdaq to NYSE.27

Similarly, the IEX’s proposed credit is 

designed to incentivize companies 

listed on other markets to transfer their 

listing to IEX. Thus, IEX believes that 

the monetary value of its proposed fee 

credit transfer incentives is comparable 


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28See IEX Rule 14.201. 

29See IEX Rule 14.202. 

30See supra note 22 [sic], Section VI., Economic 

Analysis at 33842. 

31See, e.g., NASDAQ IM–5910–1(b)(2) (AllInclusive Annual Listing Fee). 

32See Securities Exchange Act Release No. 74472 

(March 11, 2015), 80 FR 13925 (March 17, 2015) 

(SR–NASDAQ–2015–017). 

to the monetary value of the transfer 

incentives offered by NYSE and 

NASDAQ. 

Moreover, as discussed above, both 

NYSE and NASDAQ charge listing fees 

predominantly based on the number of 

shares outstanding, such that a company 

with fewer shares outstanding is 

generally charged a lower listing fee 

than a company with a larger number of 

shares outstanding. By providing a 

higher credit to a company that has paid 

listing fees in excess of $250,000 to 

NYSE, the IEX credit is designed to take 

into account the fact that some issuers 

have been subject to higher fees based 

on their number of shares outstanding, 

and to provide issuers a credit incentive 

on that basis. 

The Exchange believes that limiting 

the fee credit to companies that 

announce their intent to transfer listing 

to IEX prior to or within 120 calendar 

days of the first IEX listing, as described 

in the Purpose Section, will operate as 

an incentive to companies listed on 

NYSE or NASDAQ to transfer their 

listing to IEX expeditiously in order to 

enable the Exchange to achieve critical 

mass relatively quickly, in a highly 

competitive environment. As described 

in the Purpose Section, the Exchange 

will provide notice to the issuer 

community on the day when the first 

listing occurs, and IEX believes that the 

120 calendar day period will provide 

ample time for any company that meets 

IEX’s listing requirements to 

successfully complete the clearance 28

and application processes,29 issue the 

required press release within 120 

calendar days of the first IEX listing, 

and thus receive the fee credit. As the 

Commission has noted, and as 

discussed above, if a new listing 

exchange does not quickly establish a 

strong reputation for high quality 

listings, it may adversely affect its 

ability to compete with incumbent 

exchanges.30 Structuring the availability 

of the fee credit within the specified 

time window is designed to address the 

imperative to quickly establish a strong 

reputation for high quality listings. 

The Exchange believes that this 

structure is reasonable, not an 

inequitable allocation of fees, and not 

unfairly discriminatory since while the 

time window is open any company that 

meets IEX’s listing standards will be 

able to make a decision to list on IEX, 

make the requisite announcement, and 

obtain the fee credit once it lists on IEX. 

While a company that is not in 

existence at that time would not be able 

to take the actions necessary to obtain 

a fee credit, IEX does not believe that 

this issue means that the fee credit is 

inequitable or unfairly discriminatory. 

NASDAQ provides several other 

categories of fee incentives to 

companies that transfer to NASDAQ 

from another exchange. These include 

an entry fee waiver, as well as a 

‘‘grandfathering’’ incentive related to 

the all-inclusive annual listing fee 

whereby the company’s fee is based on 

the lower of its shares outstanding as of 

the date of listing or at the time of 

billing. For example, NASDAQ provides 

an accommodation to companies that 

applied to list on NASDAQ prior to 

January 1, 2015 and list after that date 

whereby such companies are billed 

based on the lower of its shares 

outstanding at the time of application of 

listing.31 Thus companies that apply to 

list on NASDAQ after January 1, 2015 

are not able to take advantage of this 

accommodation, including companies 

that did not exist prior to January 1, 

2015. In its rule filing proposing this 

accommodation, NASDAQ asserts that it 

is consistent with the Act based on 

competitive considerations.32 Similarly, 

IEX’s proposed fee credit is designed to 

address competitive considerations (as 

discussed above) and is thus also 

consistent with the Act. Accordingly, 

IEX believes that the timing of 

availability of the fee credit to 

individual companies does not raise any 

new or novel issues not already 

considered by the Commission. 

Finally, IEX believes that it is 

consistent with the protection of 

investors, the public interest and 

removing impediments to a free and 

open market and a national market 

system to provide a pro-rata refund of 

the annual listing fee to a company that 

ceases to be listed on IEX during the 

calendar year for which such fee was 

paid. In this regard, IEX further believes 

that if a company ceases to be listed on 

IEX, either because of a corporate action 

(e.g., merger, acquisition, going private 

transaction) or delisting (whether 

voluntary or otherwise), the company 

will not have received listing for the 

entire year and therefore should not be 

required to pay for the entire year. IEX 

notes that NYSE and NASDAQ listing 

fees are nonrefundable, and believes 

that this structure can have an 

anticompetitive impact on the listing 

market since companies may be hesitant 

to transfer listing mid-year, thus 

forgoing the benefits of a nonrefundable 

listing fee already paid. In contrast, 

IEX’s proposal to provide a pro-rata 

refund is designed to be pro-competitive 

by providing listed companies with the 

ability to transfer listing mid-year 

without financial penalty. 

In conclusion, the Exchange submits 

that its proposed fee structure satisfies 

the requirements of Sections 6(b)(4) and 

6(b)(5) of the Act for the reasons 

discussed above in that it is an equitable 

allocation of fees, does not permit unfair 

discrimination between customers, 

issuers, brokers, or dealers, and is 

designed to promote just and equitable 

principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system. For the 

foregoing reasons, the Exchange also 

believes that its simplified fee structure 

is consistent with the Act, in that it is 

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. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

IEX 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. The 

Exchange does not believe that the 

proposed rule change will impose any 

burden on intermarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

To the contrary, the Exchange believes 

that the proposed listing fee structure is 

designed to provide a competitive 

alternative to listing on NYSE or 

NASDAQ. The Exchange operates in a 

highly competitive market in which 

issuers can readily favor competing 

listing exchanges if fee schedules and 

services at such other exchanges are 

viewed as more favorable. As a new 

listing exchange, IEX expects to face 

intense competition from NYSE and 

NASDAQ. Consequently, the Exchange 

believes that the degree to which IEX 

fees could impose any burden on 

competition is extremely limited, and 

does not believe that such fees would 

burden competition among issuers or 

with competing venues in a manner that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

The Exchange also notes that other 

listing venues are similarly free to set 

their fees. 

The Exchange does not believe that 

the proposed rule change will impose 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 82, No. 189 / Monday, October 2, 2017 / Notices 45921 

33 15 U.S.C. 78s(b)(3)(A)(ii). 

34 15 U.S.C. 78s(b)(2)(B). 35 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 81406 

(August 16, 2017), 82 FR 39920. 

4See letter from Jane Heinrichs, Associate 

General Counsel, Investment Company Institute, to 

Brent J. Fields, Secretary, Commission, dated 

September 1, 2017. 

5 17 CFR 200.30–3(a)(12). 

any burden on intramarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act 

because, while different issuers will be 

eligible for different fee credits, these 

different fee credits are not based on the 

type of listed company but on the 

timing of listing on IEX and, when a 

higher credit is provided, on the listing 

fees already paid to its prior listing 

exchange. As discussed in the Statutory 

Basis section, limiting fee credits to 

companies that issue the required press 

release prior to or within 120 calendar 

days of the first IEX listing is designed 

to incentivize companies to transfer to 

IEX expeditiously in order to gain 

critical mass quickly. Further, providing 

a higher fee credit to companies that 

paid nonrefundable listing fees of more 

than $250,000 to another listing 

exchange during the calendar year in 

which it lists on IEX is designed to 

provide a meaningful incentive to such 

companies to transfer their listing to 

IEX. All similarly situated issuers would 

be treated similarly since the higher 

credit would be based on the amount of 

the listing fee paid. 

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 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) 33 of the Act. 

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. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) 34 of the Act to 

determine whether the proposed rule 

change should be approved or 

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 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– 

IEX–2017–30 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–IEX–2017–30. 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–IEX– 

2017–30 and should be submitted on or 

before October 23, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.35

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–21002 Filed 9–29–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81733; File No. SR– 

NASDAQ–2017–081] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Withdrawal of a Proposed Rule Change 

To Extend the Implementation Date for 

Certain Changes to the Rule 5700 

Series and Rule 5810 

September 27, 2017. 

On August 7, 2017, The NASDAQ 

Stock Market LLC (‘‘Nasdaq’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 1 and Rule 19b– 

4 thereunder,2 a proposed rule change 

to extend the implementation date for 

certain changes concerning the 

continued listing requirements for 

exchange-traded products in the Nasdaq 

Rule 5700 Series and related changes to 

Nasdaq Rule 5810. The proposed rule 

change was published for comment in 

the Federal Register on August 22, 

2017.3 The Commission received one 

comment letter on the proposed rule 

change.4 On September 22, 2017, 

Nasdaq withdrew the proposed rule 

change (SR–NASDAQ–2017–081). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.5

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–21159 Filed 9–29–17; 8:45 am] 

BILLING CODE 8011–01–P 


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