Document ID: SEC-2008-0161-0001
Agency: sec
Document Type: Notice
Title: * * * * * 4310. Listing Requirements for Domestic and Canadian Securities   (a)-(b) No Change.   (c)(1)-(24) No Change.   (c)(25) In the case of any dividend action or action relating to a stock distribution of a listed stock the issuer shall, no later than 10
Posted Date: 2008-01-31T05:00Z

[Federal Register: January 31, 2008 (Volume 73, Number 21)]
[Notices]               
[Page 5892-5894]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31ja08-109]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57198; File No. SR-NASDAQ-2007-094]

 
Self-Regulatory Organizations; The NASDAQ Stock Market, LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Regarding Notification Requirements for Issuers Making Distributions to 
Shareholders

January 24, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 5893]]

(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on November 30, 2007, The NASDAQ Stock Market, LLC (``Nasdaq'') 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 substantially prepared by Nasdaq. Nasdaq has designated 
the proposed rule change as constituting a ``non-controversial'' rule 
change under Rule 19b-4(f)(6) under the Act,\3\ which renders the 
proposal effective upon receipt of this filing by the Commission. 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.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes a rule change to include in the Nasdaq rule manual 
the notification requirements for issuers making distributions to 
shareholders.
    The text of the proposed rule change is below. Proposed new 
language is underlined; proposed deletions are in brackets.\4\
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    \4\ Changes are marked to the rule text that appears in the 
electronic manual of Nasdaq found at www.complinet.com/nasdaq.
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* * * * *
4310. Listing Requirements for Domestic and Canadian Securities
    (a)-(b) No Change.
    (c)(1)-(24) No Change.
    (c)(25) In the case of any dividend action or action relating to a 
stock distribution of a listed stock the issuer shall, no later than 10 
calendar days prior to the record date of such action: [[Reserved]]
    (i) Notify Nasdaq by filing the appropriate form as designated by 
Nasdaq; and
    (ii) Provide public notice using a Regulation FD compliant method.
    Notice to Nasdaq should be given as soon as possible after 
declaration and, in any event, no later than simultaneously with the 
public notice.
    (c)(26)-(30) No Change.
* * * * *
4320. Listing Requirements for Non-Canadian Foreign Securities and 
American Depository Receipts
    (a)-(d) No Change.
    (e)(1)-(20) No Change.
    (e)(21) In the case of any dividend action or action relating to a 
stock distribution of a listed stock the issuer shall, no later than 10 
calendar days prior to the record date of such action: [[Reserved]]
    (i) Notify Nasdaq by filing the appropriate form as designated by 
Nasdaq; and
    (ii) Provide public notice using a Regulation FD compliant method.
    Notice to Nasdaq should be given as soon as possible after 
declaration and, in any event, no later than simultaneously with the 
public notice.
    (e)(22)-(26) No Change.
    (f) No Change.
* * * * *

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, Nasdaq included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. Nasdaq has prepared summaries, set forth in Sections A, 
B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Pursuant to SEC Rule 10b-17,\5\ a national securities exchange may 
establish procedures under which an issuer must provide notice to the 
exchange no later than 10 calendar days prior to the record date of a 
dividend or other distribution in cash or in kind, including a dividend 
or distribution of any security. Nasdaq has implemented this 
requirement through procedures posted on its Web site at http://
www.nasdaq.com/about/FAQsMarketIntegrity.stm.
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    \5\ 17 CFR 240.10b-17.
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    Upon receipt of an issuer's notification information regarding an 
upcoming distribution to shareholders, and in accordance with Nasdaq 
Rule 11140, Nasdaq Corporate Data Operations Staff thereafter 
determines the ``ex'' date for the distribution and announces that 
information to the marketplace via a Daily List, which is a daily 
publication of all newly announced dividends. The information on the 
Daily List includes, among other things, the record date, payment date, 
payment amount and all new ex date rulings in order to provide the 
marketplace with the information necessary to adjust the price of the 
security on the ex date to represent the value of the dividend.
    The proposed rule text specifically incorporates the 10 day notice 
period set forth in SEC Rule 10b-17. Additionally, the proposed rule 
language requires that an issuer provide such notice through the use of 
appropriate Nasdaq forms and through the use of a Regulation FD 
compliant method to help ensure that both Nasdaq and the public are 
appropriately alerted in a timely manner as to any upcoming 
distributions to shareholders.
    Nasdaq believes that adopting a listing standard in this area, 
rather than relying on procedures described on a Web site, will provide 
greater transparency to issuers and investors and reduce the likelihood 
of untimely notification of dividend declarations. Moreover, we note 
that both the New York Stock Exchange LLC (``NYSE'') and the American 
Stock Exchange, LLC (``Amex'') have each already adopted rules that 
implement SEC Rule 10b-17 as to their listed issuers.\6\ Thus, adoption 
of a Nasdaq listing standard will provide uniformity throughout the 
markets. Nasdaq's proposed rule is consistent in all respects with the 
procedures on its Web site.
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    \6\ See NYSE Rule 204.12 and Amex Rule 830.
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2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6(b) of the Act \7\ in general and furthers 
the objectives of Section 6(b)(5) \8\ in particular in that it is 
designed to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanisms of a free and open market and a national market 
system and, in general, to protect investors and the public interest. 
Untimely notification of dividend declarations may have a negative 
impact on the marketplace in the form of a late ex date ruling so it is 
in the best interests of the marketplace that Nasdaq reflect its 
notification requirements in the Nasdaq manual.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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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

[[Page 5894]]

necessary or appropriate in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments on the proposed rule change 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) of the Act \9\ and Rule 19b-4(f)(6) thereunder \10\ because 
it 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 after the date of the filing, or 
such shorter time as the Commission may designate.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) may not become 
operative prior to 30 days after the date of filing unless the 
Commission designates a shorter time if such action is consistent with 
the protection of investors and the public interest.\11\ Nasdaq has 
requested that the Commission waive the 30-day operative delay, which 
would make the rule change operative immediately upon filing with the 
Commission. The Commission believes waiving the 30-day operative date 
is consistent with the protection of investors and the public interest 
because the proposed rule change provides greater transparency to 
issuers and investors and may reduce the likelihood of untimely 
notification of dividend declarations.\12\ For these reasons, the 
Commission designates the proposal to be effective and operative upon 
filing with the Commission.
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    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires that a self-regulatory organization submit to 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 Commission notes that Nasdaq has satisfied the five-
day pre-filing notice requirement.
    \12\ For purposes only of waiving the 30-day pre-operative 
period, the Commission has considered the impact of the proposed 
rule change on efficiency, competition, and capital formation. 15 
U.S.C. 78c(f).
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    At any time within 60 days of the filing of a rule change pursuant 
to Section 19(b)(3)(A) of the Act,\13\ the Commission may summarily 
abrogate the 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.
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    \13\ 15 U.S.C. 78s(b)(3)(A).
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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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2007-094 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2007-094. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements with respect to the proposed rule change that 
are filed with the Commission, and all written communications relating 
to the proposed rule change between the Commission and any person, 
other than those that may be withheld from the public in accordance 
with the provisions of 5 U.S.C. 552, will be available for inspection 
and copying 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 the Nasdaq. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NASDAQ-2007-094 and should 
be submitted on or before February 21, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-1731 Filed 1-30-08; 8:45 am]

BILLING CODE 8011-01-P