Document ID: SEC-2011-1078-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.
Posted Date: 2011-07-27T04:00Z

[Federal Register Volume 76, Number 144 (Wednesday, July 27, 2011)]
[Notices]
[Pages 44974-44976]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-18925]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64940; File No. SR-BX-2011-036]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Increase 
the Application and Annual Fees for the BX Venture Market

July 21, 2011.
    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 July 14, 2011, NASDAQ OMX BX, Inc. (``Exchange'') filed with the 
Securities and Exchange Commission (``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 modify the application and annual fees 
payable by a company listing on the BX Venture Market. The Exchange 
will implement the proposed rule immediately.
    The text of the proposed rule change is below. Proposed new 
language is in italics; proposed deletions are in brackets.\3\
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    \3\ Changes are marked to the rule text that appears in the 
electronic manual of Nasdaq found at http://nasdaqomxbx.cchwallstreet.com.
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5910. Listing Fees
(a) Application Fee
    A Company that submits an application to list any class of its 
securities on the Exchange, shall pay to the Exchange a non-refundable 
application fee of [$7,500] $10,000, which must be submitted with the 
Company's application. However, if a Company is listed on another 
national securities exchange and has received notice that it is subject 
to being delisted from that exchange for failure to comply with a 
quantitative listing requirement, the application fee does not have to 
be paid to the Exchange until the other exchange issues a final 
decision to delist the Company's securities or the Company is listed on 
the Exchange, whichever occurs first.
(b) Annual Fee
    (1) Each issuer shall pay an annual fee of [$15,000] $20,000 for 
the first class of securities listed on the Exchange and $5,000 for 
each additional class of securities listed on the Exchange.
    (2)-(4) No change.
    (c)-(d) 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, 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange recently received approval for the BX Venture Market, 
a new listing venue for the Exchange. Under the approved rules, a 
company that submits an application to list any class of its securities 
on the BX Venture Market must pay a non-refundable application fee of 
$7,500 \4\ and a listed company must pay an annual fee of $15,000 for 
the first class of securities listed on the BX Venture Market and 
$5,000 for each additional listed class of securities.\5\
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    \4\ Exchange Rule 5910(a).
    \5\ Exchange Rule 5910(b).
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    The listing fees for the BX Venture Market were originally proposed 
in August 2010.\6\ Following that original proposal, and in connection 
with seeking approval for the BX Venture Market, the Exchange committed 
to substantial enhancements to its regulatory process.\7\ Among these 
enhancements are rules requiring the Exchange to engage independent 
qualified third party investigative firms to assist in its public 
interest review process in specified situations and on a random 
basis.\8\ The Exchange may also

[[Page 44975]]

engage independent qualified third party investigative firms in 
reviewing listed companies in certain situations, including where there 
may be potential public interest concerns.\9\ The Exchange has also 
committed to enhanced surveillance of the trading of listed securities, 
including by FINRA and through the use of technology by the SMARTS 
Group.
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    \6\ Securities Exchange Act Release No. 62818 (September 1, 
2010), 75 FR 54665 (September 8, 2010) (proposing SR-BX-2010-059).
    \7\ Securities Exchange Act Release No. 64437 (May 6, 2011), 76 
FR 27710 (May 12, 2011) (approving SR-BX-2010-059 as amended).
    \8\ Exchange Rule 5205(d).
    \9\ Exchange Rule 5205(e).
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    These enhancements were not envisioned when the Exchange originally 
proposed the fees for the BX Venture Market and the fees were not 
previously adjusted in response to these changes. As such, the Exchange 
now proposes to increase the application fee for the BX Venture Market 
from $7,500 to $10,000 and the annual fees for the first class of 
securities from $15,000 to $20,000.
    The Exchange notes that the proposed fees remain substantially 
lower than the fees for other markets. For example, the initial listing 
fees for listing common stock on the NASDAQ Capital Market range from 
$50,000 to $75,000 and the annual fees are $27,500; \10\ the initial 
listing fees for listing common stock on NYSE Amex range from $50,000 
to $70,000 and the annual fees range from $27,500 to $40,000; \11\ and 
the initial listing fees for listing common stock on the New York Stock 
Exchange range from $125,000 to $250,000 and the annual fees range from 
$38,000 to $500,000.\12\
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    \10\ Nasdaq Rule 5920(a)(1) and (c)(1)(A).
    \11\ NYSE Amex Listed Company Guide Sections 140 and 141.
    \12\ NYSE Listed Company Manual 902.03
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    In addition, the fees remain comparable to those charged by OTC 
Markets Group for companies to appear on its OTCQX tier. While OTC 
Markets Group does not operate a national securities exchange, and does 
not undertake a regulatory review similar to that required by the 
Exchange's rules, it claims to have ``listings'' \13\ and charges a 
$5,000 application fee and $15,000 annual fee for marketplace services 
that it describes as ``formerly available only on a U.S. exchange.'' 
\14\
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    \13\ http://www.otcqx.com/qx/otcqx/listing (June 15, 2011).
    \14\ http://www.otcqx.com/qx/otcqx/overview (June 15, 2011).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6 of the Act,\15\ in general, and with Section 6(b)(4) of the 
Act,\16\ 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 or system which the 
Exchange operates or controls. The proposed rule change, which 
increases the application and annual fees to listed companies, proposes 
a reasonable allocation of the Exchange's costs, as it will allow the 
Exchange to recoup the costs of the additional regulatory steps the 
Exchange has agreed to in connection with the BX Venture Market. 
Moreover, the fees remain substantially lower than fees on other 
national securities exchanges, and comparable to the fees for 
OTCQX.\17\ In addition, the Exchange believes that the fees are 
equitable, insomuch as they are charged to all companies that chose to 
apply and list on the BX Venture Market; and reasonable, insomuch as 
these companies will receive the benefits commensurate with a listing 
on a national securities exchange, including heightened regulatory 
oversight.
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    \15\ 15 U.S.C. 78f.
    \16\ 15 U.S.C. 78f(b)(4).
    \17\ The Exchange notes that the fees charged by OTCQX have not 
been filed with the Commission.
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    The Exchange also believes that the proposed rule change is 
consistent with the provisions of Section 6(b)(5) of the Act \18\ 
because 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 facilitating 
transactions in securities, and to remove impediments to and perfect 
the mechanism of a free and open market and a national market system. 
As noted above, the Exchange believes the proposed fee increases will 
help allow it to recoup the costs of performing its regulatory 
responsibilities. As such, the Exchange believes that the proposed rule 
change promotes just and equitable principles of trade and removes 
impediments to the mechanism of a free and open market and a national 
market system.
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    \18\ 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 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\19\ 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 to determine whether the 
proposed rule should be approved or disapproved.
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    \19\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-BX-2011-036 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BX-2011-036. 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 Web site viewing and

[[Page 44976]]

printing 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 Exchange. 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-BX-2011-036 and should be 
submitted on or before August 17, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-18925 Filed 7-26-11; 8:45 am]
BILLING CODE 8011-01-P