Document ID: SEC-2022-0150-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Nasdaq Stock Market, LLC
Posted Date: 2022-02-01T05:00Z

[Federal Register Volume 87, Number 21 (Tuesday, February 1, 2022)]
[Notices]
[Pages 5552-5555]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-01969]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94071; File No. SR-NASDAQ-2022-004]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend the Exchange's Listing Fees at Rule 5910(b) To Adopt a $15,000 
All-Inclusive Annual Listing Fee Applicable to a Dually-Listed Company

January 26, 2022.
    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 January 13, 2022, 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.
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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 amend the Exchange's listing fees at Rule 
5910(b) to insert language concerning a $15,000 annual listing fee 
applicable to a Dually Listed Company, which was erroneously removed, 
as described further below.
    The text of the proposed rule change is detailed below: Proposed 
new language is italicized and proposed deletions are in brackets.
* * * * *

The Nasdaq Stock Market Rules

* * * * *

5910. The Nasdaq Global Market (including the Nasdaq Global Select 
Market)

    (a) No change.
    (b) All-Inclusive Annual Listing Fee
    (1) No change.
    (2)(A)-(F) No change.
    (G) Dually-Listed Companies, whose securities are listed on the New 
York Stock Exchange and designated as national market securities 
pursuant to the plan governing New York Stock Exchange securities at 
the time such securities are approved for listing on Nasdaq: $15,000. 
Such fee shall be assessed on the first anniversary of the Company's 
listing on Nasdaq, and annually thereafter on the anniversary of the 
Company's listing. If an issuer of such securities ceases to maintain 
its listing on the New York Stock Exchange that portion of the fee 
described in this section attributable to the months following the date 
of removal shall not be refunded, except if the securities remain 
listed on the Nasdaq Global or Global Select Markets and are designated 
as national market securities pursuant to the plan governing Nasdaq 
securities such fee shall be applied to The Nasdaq Global Market All-
Inclusive Annual Listing Fee due for that calendar year.
    (3) No change.
* * * * *
    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
    The purpose of the proposed rule change is to insert language 
concerning the relevant all-inclusive annual fee applicable to the 
listing of securities that are listed on the New York Stock Exchange 
and designated as national market securities pursuant to the plan 
governing New York Stock Exchange securities at the time such 
securities are approved for listing on the Nasdaq Global or Global 
Select Markets, and maintains such listing and designation after it 
lists such securities on Nasdaq (``Dually-Listed Securities'').\3\ Such

[[Page 5553]]

language was erroneously deleted in a previous filing.\4\
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    \3\ See Rules 5005(a)(11) (defining a Dually-Listed Security as 
a security, listed on The Nasdaq Global Market or The Nasdaq Global 
Select Market, which is also listed on the New York Stock Exchange). 
As explained below, former Rule 5910(c)(5) described and set forth 
the fees applicable to a Dually Listed Company but referenced only 
The Nasdaq Global Market. Nasdaq proposes to clarify that a Dually 
Listed Company may list on the Nasdaq Global or Global Select 
Markets.
    \4\ Securities Exchange Act Release No. 84634 (November 20, 
2018), 83 FR 60522 (November 26, 2018) (SR-NASDAQ-2018-092) (The 
``Annual Fee Transition Filing'').
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    In 2014, Nasdaq adopted an all-inclusive annual listing fee 
schedule to simplify, clarify and enhance transparency around the 
annual fee to which listed companies are subject.\5\ The new annual fee 
schedule became operative on January 1, 2015, and applied to all 
companies listed after that date. Effective January 1, 2018, all 
Nasdaq-listed companies became subject to the all-inclusive annual fee 
schedule and the standard annual fee schedule ceased to have 
applicability or effect for such companies.
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    \5\ Securities Exchange Act Release No. 73647 (November 19, 
2014), 79 FR 70232 (November 25, 2014) (SR-NASDAQ-2014-87).
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    In 2018, Nasdaq eliminated expired and obsolete provisions in 
connection with Nasdaq's completed transition to the all-inclusive 
annual fee program.\6\ In the Annual Fee Transition Filing Nasdaq 
deleted the language in former Rules 5910(c)-(f) and 5920(c)-(e) that 
described and set forth the standard annual fee. However, former Rules 
5910(c)(5) described and set forth the fees applicable to a company (i) 
whose securities are listed on the New York Stock Exchange and 
designated as national market securities pursuant to the plan governing 
New York Stock Exchange securities at the time such securities are 
approved for listing on Nasdaq, and (ii) that maintains such listing 
and designation after it lists such securities on Nasdaq (a ``Dually 
Listed Company''). The rule language further stated that if an issuer 
of such securities ceases to maintain such listing and designation and 
the securities are instead designated under the Rule 5400 Series, that 
portion of the fee described in this section attributable to the months 
following the date of removal shall not be refunded, except such fee 
shall be applied to annual listing fee due for the calendar year of the 
transfer. In lieu of the annual fees applicable to a Nasdaq-listed 
company, a Dually Listed Company annual fee was set at $15,000 per 
year. Such annual fee was set to be assessed on the first anniversary 
of the Company's listing on Nasdaq.\7\ While not identical to the 
current all-inclusive annual listing fee schedule, this provision was 
similar in that companies also were not subject to fees for listing 
additional shares or for substitution listing events.\8\ The companies 
were still subject to fees in relation to request for written 
interpretation, compliance plan review and record-keeping. The 
foregoing fees are included in the all-inclusive annual fees and Dually 
Listed Companies will pay only a single annual fee to Nasdaq, which 
includes all the ordinary costs of listing for the year.\9\
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    \6\ The Annual Fee Transition Filing, supra note 4.
    \7\ Former Rule 5920(c)(8) also included similar language about 
the fee for a Dually Listed Company on the Nasdaq Capital Market. 
However, under Rule 5005(a)(11) and IM-5220 companies are not (and 
were not previously) permitted to dually list on the Nasdaq Capital 
Market. As such this Capital Market fee was inapplicable to any 
companies and its deletion was appropriate.
    \8\ See former Rule 5910(b)(5) and 5910(f).
    \9\ See former Rules 5602, 5810(c) and 5910(e). In Nasdaq's 
experience, Dually Listed Companies are, typically, established 
companies that are used to being a public company and familiar with 
the exchanges' requirements thus rarely having a need to pay for 
written interpretation, compliance plan review and record-keeping 
fees.
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    Nasdaq believes it is appropriate to maintain the $15,000 fee on an 
all-inclusive basis because it is not the primary listing venue for 
such companies. The Dual Listing program was originally designed, and 
continues to operate, to encourage NYSE-listed companies to compare 
services provided by Nasdaq and NYSE without creating undue burden by 
assessing duplicated fees. As required by Listing Rules, Nasdaq 
monitors Dually Listed Companies for compliance with the Nasdaq listing 
standards. In that regard, based on Nasdaq's experience, Dually Listed 
Companies require less time and effort to review and to ensure 
compliance because they seldom involve time-consuming regulatory 
issues. This is, in part, due to the fact that NYSE listed companies 
are already subject to the ongoing scheme of regulation by the NYSE 
that is fairly similar to the Nasdaq's regulation regime.
    Notwithstanding the similarities in regulatory regimes, the Dual 
Listing program increases the regulatory burden on a listed company, in 
part, by subjecting it to both the NYSE's and Nasdaq's corporate 
governance regulations. As a result, the program targets bigger and 
better established companies that are used to being a public company 
and can afford a moderate increase in the regulatory burden. Nasdaq 
believes that these larger companies will pay higher listing fees if 
and when they become listed exclusively on Nasdaq and become subject to 
the fee schedule applicable to Nasdaq listed companies thereby making 
their listing more valuable to Nasdaq. Nasdaq also believes that 
inducing these companies to compare services provided by Nasdaq and the 
NYSE, may encourage these companies to list exclusively on Nasdaq and 
to provide its listing market broader benefits from attracting the 
larger, better known companies that are listed on the NYSE. 
Accordingly, given the competitive nature of the dual listing program 
and the potential benefits it may bring to Nasdaq and its listing 
market, Nasdaq believes it is reasonable to set the all-inclusive 
annual fee for Dually Listed Companies at $15,000.
    Absent this provision, a Dually Listed Company would be subject to 
the typical all-inclusive annual listing fee, which is higher than 
$15,000.\10\ Nasdaq did not intend to subject the Dually Listed 
Companies to the all-inclusive annual listing fee applicable to other 
companies. Accordingly, Nasdaq now proposes to insert language, similar 
to the language covering annual fees paid by Dually Listed Companies 
that was erroneously removed, by adding proposed Rule 5910(b)(2)(G) 
setting the all-inclusive annual fee for Dually Listed Companies, which 
now covers fees for written interpretation, compliance plan review and 
record-keeping fees, previously not covered as explained above, at 
$15,000.
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    \10\ Under Rule 5910(b)(2)(A) the minimum all-inclusive annual 
fee for most companies is $48,000.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\11\ in general, and furthers the objectives of 
Sections 6(b)(4) and 6(b)(5) of the Act,\12\ in particular, in that it 
provides for the equitable allocation of reasonable dues, fees and 
other charges among members and issuers and other persons using any 
facility, will promote just and equitable principles of trade, and will 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system, and is not designed to permit 
unfair discrimination between customers, issuers, brokers, or dealers. 
The proposed rule will insert language concerning the $15,000 annual 
listing fee applicable to a Dually Listed Company, which Nasdaq 
erroneously deleted, while also making this fee an all-inclusive fee, 
which now covers fees for written interpretation, compliance plan 
review and record-keeping fees, previously not covered as explained 
above. The Commission previously approved the $15,000 annual fee 
applicable to a Dually Listed Company, and the manner in which it is 
assessed,

[[Page 5554]]

and found it consistent with requirements of the Act that rules provide 
for equitable allocation of reasonable fees and not be designed to 
permit unfair discrimination between issuers.\13\ There has been no 
changes to the objectives of the Dual Listing program since Nasdaq 
adopted the all-inclusive annual listing fee schedule for companies, 
and the NYSE annual fee schedule has been changing to accommodate the 
shifts in the competitive landscape.\14\ Nasdaq believes that, to 
maintain consistency with the original objective of the Dual Listing 
program, the annual listing fee assessed towards Dually Listed 
Companies, noting the fact that they are paying the fees to the NYSE, 
should remain the same as previously adopted, although now covering 
fees for written interpretation, compliance plan review and record-
keeping fees, previously not covered as explained above. The erroneous 
removal of language describing the fee, resulting in the need for this 
rule filing to reinsert it, does not change that conclusion.\15\
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(4) and (5).
    \13\ Securities Exchange Act Release No. 51005 (January 10, 
2005), 70 FR 2917 (January 18, 2005) (SR-NASD-2004-142, approving 
the predecessor NASD rule), 70 FR 2917 (January 18, 2005) (the 
``Approval Order''). This finding was under Section 15A(b)(5) and 
(6) of the Act, which applied to Nasdaq at the time as a facility of 
the NASD.
    \14\ See Securities Exchange Act Release No. 93862 (December 22, 
2021), 86 FR 74198 (December 29, 2021) (SR-NYSE-2021-76).
    \15\ Although the all-inclusive annual fee for Dually Listed 
Companies will now include some additional services for the same 
$15,000 annual fee, Nasdaq notes that Dually Listed Companies, 
typically, do not use these services. See footnote 9 above.
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    Nasdaq believes it is appropriate and not unfairly discriminatory 
to maintain the $15,000 fee on an all-inclusive basis because Nasdaq is 
not the primary listing venue for such companies. The Dual Listing 
program is designed to encourage NYSE-listed companies to compare 
services provided by Nasdaq and the NYSE without creating undue burden 
by assessing duplicated fees. Based on Nasdaq's experience, Dually 
Listed Companies require less time and effort to review and to ensure 
compliance because they seldom involve time-consuming regulatory 
issues. This is, in part, due to the fact that NYSE listed companies 
already are, and, typically, have been subject to the ongoing scheme of 
regulation by the NYSE that is fairly similar to the Nasdaq's 
regulation regime.
    Notwithstanding the similarities in regulatory regimes, the Dual 
Listing program increases the regulatory burden on a listed company, in 
part, by subjecting it to both NYSE and Nasdaq corporate governance 
regulations. As a result, the program targets bigger and better 
established companies that are used to being a public company and can 
afford the increased regulatory burden. Nasdaq believes that these 
larger companies will pay higher listing fees if and when they become 
listed exclusively on Nasdaq and become subject to the fee schedule 
applicable to Nasdaq listed companies thereby making their listing more 
valuable to Nasdaq. Nasdaq also believes that inducing these companies 
to compare services provided by Nasdaq and the NYSE, may encourage 
these companies to list exclusively on Nasdaq and to provide its 
listing market broader benefits from attracting the larger, better 
known companies that are listed on the NYSE.
    Finally, Nasdaq believes that the proposal does not result in 
unfair discrimination by offering its program only to companies already 
listed on the NYSE, and not on other exchanges, because Nasdaq believes 
attracting the NYSE-listed companies will bring greater future value to 
Nasdaq.

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 but instead will reinstate a 
portion of the fee schedule that was erroneously deleted.
    Nasdaq's dual listing program is designed to allow issuers to 
undertake focused comparison of the services and market quality offered 
by Nasdaq and NYSE, with the explicit goal to encourage eventual switch 
of companies that dual list. Without a lower annual fee, an NYSE-listed 
company would be unlikely to choose to dually list its securities, 
either initially or on an ongoing basis. Accordingly, reinstituting the 
proposed fee would promote competition among listing markets.\16\
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    \16\ Nasdaq believes that national securities exchanges other 
than the NYSE do not have established listing programs that attract 
marquee operating companies and therefore the dually listed program 
will not have any competitive impact on such exchanges because the 
goal of the program is to allow an established exchange-listed 
company to compare services provided by Nasdaq with those it already 
receives.
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    The lower fees on Dually Listed Companies also will not burden 
competition between Dually Listed Companies and other companies listing 
on Nasdaq. The lower fee reflects that Dually Listed Companies are also 
subject to ongoing fees to the NYSE. In the Approval Order, the 
Commission found the fees applicable to Dually Listed Companies 
consistent with the requirements of the Act, and noted that ``[w]ithout 
this program, it is unlikely that an issuer would choose to dually list 
its securities'' and expressed its believe that ``competition among 
listing markets has the potential to benefit the public, issuers, and 
the listing markets.''

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.\17\
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    \17\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule 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 [email protected]. Please include 
File Number SR-NASDAQ-2022-004 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-2022-004. 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/

[[Page 5555]]

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 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-2022-004, and should 
be submitted on or before February 22, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-01969 Filed 1-31-22; 8:45 am]
BILLING CODE 8011-01-P