Document ID: SEC-2008-1701-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2008-12-18T05:00Z

[Federal Register: December 18, 2008 (Volume 73, Number 244)]
[Notices]               
[Page 77089-77091]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18de08-126]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59087; File No. SR-NASDAQ-2008-093]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Modify the Bid Price Required for Initial Listing on the Nasdaq Global 
and Global Select Markets from $5 to $4

December 11, 2008.
    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 December 1, 2008, The NASDAQ Stock Market LLC (``Nasdaq'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and III below, which Items 
have been prepared by Nasdaq. Nasdaq has filed this proposal pursuant 
to Exchange Act Rule 19b-4(f)(6) \3\ and requests that the Commission 
waive the 30-day pre-operative waiting period contained in Exchange Act 
Rule 19b-4(f)(6)(iii).\4\ 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).
    \4\ 17 CFR 240.19b-4(f)(6)(iiii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to modify the bid price required for initial 
listing on the Nasdaq Global and Global Select Markets from $5 to $4.
    The text of the proposed rule change is below. Proposed new 
language is italicized; proposed deletions are in brackets.\5\
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    \5\ Changes are marked to the rule text that appears in the 
electronic manual of Nasdaq found at http: //
nasdaqomx.cchwallstreet.com.
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4420. Quantitative Listing Criteria
    In order to be listed on the Nasdaq National Market, an issuer 
shall be required to substantially meet the criteria set forth in 
paragraphs (a), (b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (l), 
(m), (n) or (o) below. Nasdaq may extend unlisted trading privileges to 
any security for which Nasdaq has in effect rules providing for 
transactions in such class or type of security. Provisions of Rule 4420 
that govern trading hours and surveillance procedures, and that relate 
to information circulars and prospectus delivery, shall apply to 
securities traded on an unlisted trading privileges basis.
(a) Entry Standard 1--First Class of Common Stock, Shares or 
Certificates of Beneficial Interest of Trusts, Limited Partnership 
Interests in Foreign or Domestic Issues and American Depositary 
Receipts
    (1)-(3) No change.
    (4) The bid price per share is [$5] $4 or more.
    (5)-(7) No change.

[[Page 77090]]

(b) Entry Standard 2--First Class of Common Stock, Shares or 
Certificates of Beneficial Interest of Trusts, Limited Partnership 
Interests in Foreign or Domestic Issues and American Depositary 
Receipts
    (1)-(3) No change.
    (4) The bid price per share is [$5] $4 or more.
    (5)-(7) No change.
(c) Entry Standard 3--First Class of Common Stock, Shares or 
Certificates of Beneficial Interest of Trusts, Limited Partnership 
Interests in Foreign or Domestic Issues and American Depositary 
Receipts
    An issuer listed under this paragraph does not also need to be in 
compliance with the quantitative criteria for initial listing in the 
Rule 4300 series.
    (1)-(2) No change.
    (3) The bid price per share is [$5] $4 or more.
    (4)-(6) No change.
    (d)-(j) No change.
(k) Quantitative Listing Criteria--Preferred Stock and Secondary 
Classes of Common Stock
    For initial listing, if the common stock or common stock equity 
equivalent security of the issuer is listed on Nasdaq or another 
national securities exchange, the issue shall have:
    (1)-(2) No change.
    (3) A minimum bid price per share of [$5] $4;
    (4)-(5) No change.
    Alternatively, in the event the issuer's common stock or common 
stock equivalent security is not listed on either Nasdaq or another 
national securities exchange, the preferred stock and/or secondary 
class of common stock may be traded on Nasdaq so long as the security 
satisfies the listing criteria for common stock.
* * * * *
4426. Nasdaq Global Select Market Listing Requirements
    (a)-(c) No change.
    (d) Price. For inclusion in the Nasdaq Global Select Market, an 
issuer not listed on the Nasdaq Global Market shall have a minimum bid 
price of [$5] $4 per share.
    (e)-(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
    Nasdaq proposes to change the minimum bid price required for 
initial listing on the Nasdaq Global and Global Select Markets from $5 
to $4. Nasdaq believes that this change will permit the listing of more 
companies on Nasdaq, thereby enhancing investor protection by allowing 
these companies, and their investors, to benefit from Nasdaq's liquid 
and transparent marketplace, supported by strong regulation including 
Nasdaq's listing and market surveillance and FINRA's independent 
regulation.
    Nasdaq believes that companies satisfying the proposed minimum $4 
price requirement, along with all of Nasdaq's other listing 
requirements, are suitable for listing. Nasdaq notes that the proposed 
$4 minimum price meets the criteria from the definition of a penny 
stock contained in Rule 3a51-1 under the Act.\6\ In addition, the 
proposed $4 price is the same as the requirement recently adopted for 
listing on the New York Stock Exchange.\7\
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    \6\ See 17 CFR 240.3a51-1(a)(2)(i)(C).
    \7\ See Section 102.01B (applicable to domestic companies) and 
Section 103.01A (applicable to non-U.S. companies) of the NYSE 
Listed Company Manual, which require a $4 minimum price for initial 
listing. Securities Exchange Act Release No. 57785 (May 6, 2008), 73 
FR 27597 (May 13, 2008) (approving SR-NYSE-2008-17).
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2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\8\ in general and with Sections 
6(b)(5) of the Act,\9\ in particular in that it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest. The proposed rule change 
removes an impediment for certain otherwise qualified companies to list 
on Nasdaq, and thereby benefit from Nasdaq's liquid and transparent 
marketplace and strong regulation.
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    \8\ 15 U.S.C. 78f.
    \9\ 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 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 were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing 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 after the date of this filing, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) 
thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
under the Act 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 Exchange has satisfied this notice requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act normally does not become operative for 30 days after the date of 
filing.\12\ However, Rule 19b-4(f)(6)(iii) \13\ permits the Commission 
to designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has 
requested that the Commission waive the 30-day operative delay.
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    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ Id.
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. In 
making this determination, the Commission notes that it recently 
approved a substantially similar rule proposal for the NYSE.\14\ The

[[Page 77091]]

Commission believes that the Nasdaq's proposed rule change raises no 
new regulatory issues that were not previously considered by the 
Commission in approving the NYSE's similar proposal. In approving the 
NYSE proposal, the Commission found that adopting a $4 price 
requirement for initial listing was consistent with the requirements of 
the Act and that this requirement meets the criteria from the 
definition of penny stock contained in Rule 3a51-1 under the Act.\15\ 
Further, the Commission notes that the NYSE's proposal was subject to 
full notice and comment, and the Commission received no comments on the 
price requirement portion of the NYSE's rule proposal. Accordingly, for 
the reasons discussed above, the Commission finds that the Exchange's 
proposal is consistent with the protection of investors and the public 
interest and therefore designates the proposed rule change operative 
immediately upon filing.\16\
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    \14\ See supra note 7.
    \15\ Id.
    \16\ For the purposes only of waiving the 30-day operative 
delay, the Commission has considered the proposed rule'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 such proposed rule 
change the Commission may summarily abrogate 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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2008-093 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-2008-093. 
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 the filing also will be available for 
inspection and copying at the principal office of the self-regulatory 
organization. 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-2008-093 and should be submitted on or before January 8, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-29967 Filed 12-17-08; 8:45 am]

BILLING CODE 8011-01-P