Document ID: SEC-2021-0495-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Nasdaq Stock Market LLC
Posted Date: 2021-04-13T04:00Z

[Federal Register Volume 86, Number 69 (Tuesday, April 13, 2021)]
[Notices]
[Pages 19309-19311]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-07491]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91492; File No. SR-NASDAQ-2021-013]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Insert Language Concerning an Initial Listing Requirement Applicable to 
American Depository Receipts or Shares

April 7, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 24, 2021, 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 and II 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to revise Listing Rule 5315(e) and Rule 
5405(a), which outline the initial listing requirements for primary 
equity securities for Nasdaq Global Select and Global Market, 
respectively, to insert language concerning the requirement for there 
to be at least 400,000 ADRs issued for initial listing of such 
securities.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, 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 
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 is proposing to revise Listing Rule 5315(e) and Rule 
5405(a), which outline the initial listing requirements for primary 
equity securities for Nasdaq Global Select and Global Market, 
respectively, to insert language concerning the requirement for there 
to be at least 400,000 ADRs issued for initial listing of such 
securities.
    In 2009, Nasdaq moved the listing rules from the Rule 4000 Series 
of the Nasdaq Listing Rules and restated them in Rule 5000 Series in 
order to reduce redundancies and improve the organization of the rules 
by presenting them in a simpler, more transparent and reader-friendly 
format.\3\ Prior to the reorganization, Nasdaq Listing Rule 4320 
provided the requirements for listing on Nasdaq applicable to the 
security of a non-Canadian foreign issuer, ADR or similar security 
issued in respect of a security of a foreign issuer. The rule further 
provided that issuers that met the requirements in Rule 4320, but that 
were not listed on the Nasdaq Global Market (including the Nasdaq 
Global Select Market), were listed on the Nasdaq Capital Market. Prior 
Rule 4320(e)(6) stated that ``in the case of . . . ADRs for initial 
listing only, at least 400,000 shall be issued.'' As part of Rule 4320, 
this requirement applied to ADRs listed on the Nasdaq Global Market 
(including the Nasdaq Global Select Market) as well as companies listed 
on the Nasdaq Capital Market.
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    \3\ See Securities Exchange Act Release No. 59663 (March 31, 
2009), 74 FR 15552 (April 6, 2009) (SR-Nasdaq-2009-018). The listing 
rules contained in the Rule 4000 Series as of April 13, 2009, are 
available at https://listingcenter.nasdaq.com/assets/rulebook/nasdaq/rules/old_listing_rules.pdf.
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    However, in the 2009 restatement of the listing rules, the 400,000 
ADR requirement from Rule 4320(e)(6) was restated under Rule 5505(a), 
which only applies to the Nasdaq Capital Market. Nasdaq inadvertently 
omitted this requirement from Rule 5315(e) and Rule 5405(a), which 
outline the initial listing requirements for primary equity securities 
on the Nasdaq Global Select Market and Nasdaq Global Market,

[[Page 19310]]

respectively. As a result, there is currently no stated minimum ADRs 
requirement for the Nasdaq Global Select Market and Nasdaq Global 
Market. This change was inadvertent and in connection with the 2009 
restatement Nasdaq specifically indicated that it was ``not making any 
substantive changes to the Listing Rules.'' \4\
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    \4\ Id.
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    Accordingly Nasdaq now proposes to insert language concerning the 
initial listing requirement for there to be a minimum of 400,000 ADRs 
issued for all Nasdaq market tiers, which was inadvertently deleted 
from the Nasdaq Global Select and Global Markets.\5\
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    \5\ Since the 2009 restatement Nasdaq has not listed any ADRs on 
the Nasdaq Global Select or Global Markets with fewer than 400,000 
ADRs outstanding at the time of listing. The requirements for a 
minimum number of round lot holders and publicly held shares in Rule 
4320(e)(6) have been carried over to the Nasdaq Global Select and 
Global Market rules pursuant to the 2009 restatement.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\6\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\7\ in particular, in that it 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, and, in general to protect investors and the public interest. 
The proposed rule change is consistent with the investor protection 
provisions of the Act because it will insert language concerning the 
initial listing requirement for there to be a minimum of 400,000 ADRs 
issued, which Nasdaq inadvertently omitted from the Nasdaq Global 
Select and Global Markets, to ensure consistency across the market 
tiers. This requirement is designed to help ensure that there is 
sufficient liquidity in the issue to promote orderly trading.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed rule change will 
have no material impact on competition as it merely inserts language 
concerning a requirement, which Nasdaq inadvertently omitted, to 
provide consistency across the Nasdaq market tiers and help ensure 
orderly trading in ADRs.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally 
does not become operative for 30 days after the date of the filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\11\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the Exchange 
may immediately insert language in the Listing Rules concerning the 
initial listing requirement for the minimum number of ADRs that must be 
issued for a company to list on the Nasdaq Global Select and Global 
Market. The Exchange stated that the proposed rule change would provide 
transparency to the requirement's application to all market tiers in 
the same manner as before it was inadvertently omitted. The Commission 
notes that previous Nasdaq Listing Rule 4320(e)(6) had applied this 
same minimum ADRs issued requirement to companies listing on the Nasdaq 
Global Select and Global Market and that the Exchange states that it 
had inadvertently omitted the requirement in the Global Select and 
Global Market rules in its 2009 restatement of its Listing Rules.\12\ 
For these reasons, the Commission believes that waiver of the 30-day 
operative delay is consistent with the protection of investors and the 
public interest. Accordingly, the Commission hereby waives the 30-day 
operative delay and designates the proposal operative upon filing.\13\
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ See supra note 4 and accompanying text.
    \13\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule change's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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) \14\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \14\ 15 U.S.C. 78s(b)(2)(B).
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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-2021-013 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2021-013. 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 website (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

[[Page 19311]]

available for website 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. Persons submitting comments are cautioned that we do 
not redact or edit personal identifying information from comment 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
NASDAQ-2021-013 and should be submitted on or before May 4, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-07491 Filed 4-12-21; 8:45 am]
BILLING CODE 8011-01-P