Document ID: SEC-2019-0019-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Nasdaq Stock Market, LLC
Posted Date: 2018-12-31T05:00Z

[Federal Register Volume 83, Number 249 (Monday, December 31, 2018)]
[Notices]
[Pages 67752-67754]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-28394]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84930; File No. SR-NASDAQ-2018-105]

Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the 
Entry Fee for Listing on the Exchange's Global and Global Select Market 
Tiers

December 21, 2018.
    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 17, 2018, 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 entry fee for listing on the 
Exchange's Global and Global Select Market tiers.
    The text of the proposed rule change is available on the Exchange's 
website at http://nasdaq.cchwallstreet.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 
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 increase the 
Exchange's entry fees for companies listing on the Nasdaq Global and 
Global Select Markets.
    Nasdaq currently charges entry fees for the Nasdaq Global and 
Global Select Market based on the number of shares outstanding 
according to the following tiers: \3\

Up to 30 million shares, $125,000
30+ to 50 million shares, $150,000
50+ to 100 million shares, $200,000
Over 100 million shares, $225,000
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    \3\ Companies must also submit a $25,000 initial application 
fee, which is credited towards the entry fee upon listing. See Rule 
5910(a)(11).

    These fees are based on the aggregate of all classes of equity 
securities to be listed on the Nasdaq Global and Global Select Market, 
as shown in the company's most recent periodic report or in more recent 
information held by Nasdaq or, in the case of new issues, as shown in 
the offering circular or registration statement. In the case of foreign 
companies, total shares outstanding includes only those shares issued 
and outstanding in the United States.
    The entry fees for companies listing on the Nasdaq Global and 
Global Select Markets were last modified in 2010.\4\ Nasdaq now 
proposes to increase the entry fees to the following:

Up to 30 million shares, $150,000
30+ to 40 million shares, $170,000
40+ to 50 million shares, $210,000
50+ to 60 million shares, $250,000
60+ to 70 million shares, $290,000
Over 70 million shares, $295,000
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    \4\ See Securities Exchange Act Release No. 34-61669 (March 5, 
2010), 75 FR 11958 (March 12, 2010) (approving SR-NASDAQ-2009-081).

    As a result, the minimum entry fee for the Nasdaq Global and Global 
Select Markets would increase from $125,000 to $150,000 for companies 
with up to 30 million shares. The maximum entry fee for the Nasdaq 
Global and Global Select Markets, which would be applicable to 
companies with over 70 million shares outstanding, would increase from 
$225,000 to $295,000. The revised schedule would also increase the 
number of fee tiers so that each tier range between the minimum of 30 
million shares and the maximum of 70 million shares has 10 million 
shares in the tier.
    Nasdaq is proposing these changes to better align its fees with the 
value of a listing to issuers.
    Any company that submits its application to Nasdaq before January 
1, 2019, and lists before July 1, 2019, would be subject to fees under 
the existing fee schedule. Nasdaq believes that it is appropriate to 
continue the existing fee schedule for these companies because they 
will be substantially far along in the process of going public at the 
time of this filing and may have made decisions based on the existing 
fee schedule.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\5\ in general, and with Section 
6(b)(4) and (5) of the Act,\6\ in particular, in that it provides for 
the equitable allocation of reasonable dues, fees, and other charges 
among its members, issuers and other persons using its facilities and 
does not unfairly discriminate between customers, issuers, brokers or 
dealers. Further, the proposed rule change 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.
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    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(4) and (5).
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    Nasdaq believes that the proposed fee increase is not unfairly 
discriminatory and represents an equitable allocation of reasonable 
fees because it reflects the Exchange's increased costs since fees were 
last increased in 2010.\7\ In addition, the proposed fee increase 
reflects enhancements to the listing process, such as Nasdaq's online 
Listing Center, which simplifies the process of applying to Nasdaq; the 
Governance Clearinghouse, which provides insights into issues facing 
public companies and companies that are preparing to go

[[Page 67753]]

public; and the IPO process, including the Nasdaq IPO Bookviewer, which 
provides information to stabilization agents during the IPO opening 
process, and the Nasdaq IPO Indicator, a unique web-based data tool 
available to all Nasdaq member firms, which helps manage their orders 
for an IPO. Nasdaq also continues to invest in its physical facilities 
for listed companies, including an expansion of the Nasdaq Marketsite, 
where Nasdaq hosts market opens and closes and which will provide 
expanded meeting space for company events.
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    \7\ See Securities Exchange Act Release No. 34-61669 (March 5, 
2010), 75 FR 11958 (March 12, 2010) (approving SR-NASDAQ-2009-081).
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    Nasdaq believes that the proposed fees are reasonable because those 
fees would be equal to, or less than, the entry fee for listing the 
same number of shares on the New York Stock Exchange (``NYSE'').\8\
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    \8\ At each tier level of the proposed fees, Nasdaq's fees would 
be equal to, or less than, the entry fee for listing the same number 
of shares on the NYSE. See NYSE Listed Company Manual Section 
902.03, imposing a one-time special charge of $50,000 and an 
additional fee of $0.004 per share, subject to a minimum fee of 
$150,000 and a maximum fee of $295,000. For each proposed Nasdaq fee 
tier, Nasdaq's fee will be substantially the same, but slightly less 
than, the NYSE fee for a company listing the minimum number of 
shares in that tier. For example, a Nasdaq-listed company with 
50,000,001 to 60,000,000 shares will pay a $250,000 entry fee, 
whereas the NYSE entry fee for the same company would range from 
$250,000.04 to $290,000.
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    The proposed change to the tier structure, which will expand the 
number of fee tiers and make each tier between the minimum and maximum 
fee smaller, is not unfairly discriminatory and represents an equitable 
allocation of reasonable fees because it helps minimize the difference 
in fees paid by companies with a similar number of shares outstanding. 
Further, the proposed change is not unfairly discriminatory because it 
more closely aligns Nasdaq's fees for listing on the Global and Global 
Select Markets with those of NYSE, which charges on a per share basis.
    Under the proposed fee schedule, as under the current fee schedule, 
companies with more shares outstanding will pay higher fees. Nasdaq 
believes that this is not unfairly discriminatory because these 
companies have more shares available for trading on the Exchange's 
facilities and companies with more shares outstanding are generally 
larger companies that may use more of the Exchange's services.
    Nasdaq also believes that it is equitable and not unfairly 
discriminatory to allow any company that submits its application to 
Nasdaq before January 1, 2019, and lists before July 1, 2019, to pay 
fees under the existing fee schedule. These companies will be 
substantially far along in the process of going public at the time of 
this filing and may have made decisions based on the existing fee 
schedule, which is a non-discriminatory [sic] reason to allow them time 
to list under that fee schedule.\9\ On the other hand, Nasdaq believes 
that a company that has not yet filed an application, or that cannot 
complete the listing process before July 1, 2019, has sufficient time 
to consider the revised listing fees in making its listing decision.
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    \9\ See Securities Exchange Act Release No. 34-55202 (January 
30, 2007), 72 FR 6017 (February 8, 2007) (SR-NASDAQ-2006-040) 
(increasing entry fees for certain companies, but allowing companies 
that had applied before the date of the filing to pay the prior 
entry fees). See also Securities Exchange Act Release No. 34-72669 
(July 24, 2014), 79 FR 44234 (July 30, 2014) (SR-NASDAQ-2014-058) (a 
filing on May 27, 2014 that modified the free services offered to 
certain newly listing companies, but allowed companies that applied 
to list before July 31, 2014, and actually listed before September 
30, 2014, to receive services under the prior rule).
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    In addition, the proposed fee increases will help ensure that 
Nasdaq has adequate resources for its regulatory program, thereby 
helping to protect investors and the public interest consistent with 
the requirements of Section 6(b)(5) of the Act.
    Last, Nasdaq notes that it operates in a highly competitive market 
in which companies can readily switch exchanges if they deem the 
listing fees excessive.\10\ In such an environment, Nasdaq must 
continually review its fees to assure that they remain competitive with 
other exchanges.
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    \10\ The Justice Department has noted the intense competitive 
environment for exchange listings. See ``NASDAQ OMX Group Inc. and 
IntercontinentalExchange Inc. Abandon Their Proposed Acquisition of 
NYSE Euronext After Justice Department Threatens Lawsuit'' (May 16, 
2011), available at http://www.justice.gov/atr/public/press_releases/2011/271214.htm.
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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, as amended. The market for 
listing services is extremely competitive and listed companies may 
freely choose alternative venues, both within the U.S. and 
internationally. For this reason, Nasdaq does not believe that the 
proposed rule change will result in any burden on competition for 
listings.

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.\11\
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    \11\ 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 rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2018-105 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-NASDAQ-2018-105. 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 available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE,

[[Page 67754]]

Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such 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-2018-105, and should 
be submitted on or before January 22, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2018-28394 Filed 12-28-18; 8:45 am]
 BILLING CODE 8011-01-P