Document ID: SEC-2016-1110-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market, LLC
Posted Date: 2016-06-29T04:00Z

[Federal Register Volume 81, Number 125 (Wednesday, June 29, 2016)]
[Notices]
[Pages 42388-42390]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15360]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78149; File No. SR-NASDAQ-2016-085]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Allow Listed Companies Not Currently Subject to Nasdaq's All-Inclusive 
Annual Listing Fee To Opt In to That Fee Program for 2017

June 24, 2016.
    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 June 10, 2016, 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 allow listed companies not currently 
subject to Nasdaq's all-inclusive annual listing fee to opt in to that 
fee program for 2017. The changes proposed herein are effective upon 
filing.
    The text of the proposed rule change is available on the Exchange's 
Web site 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.

[[Page 42389]]

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

1. Purpose
    Effective January 1, 2015, Nasdaq adopted an all-inclusive annual 
listing fee, which simplifies billing and provides transparency and 
certainty to companies as to the annual cost of listing.\3\ This new 
fee structure was designed, primarily, to address customer complaints 
about the number and, in some cases, the variable nature of certain of 
Nasdaq's listing fees. It also provides benefits to Nasdaq, including 
eliminating the multiple invoices that were sent to a company each year 
and providing more certainty as to revenue.\4\
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    \3\ Securities Exchange Act Release No. 73647 (November 19, 
2014), 79 FR 70232 (November 25, 2014) (SR-NASDAQ-2014-087).
    \4\ Id.
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    While this new fee structure will become operative for all listed 
companies in 2018, listed companies were allowed to elect to be subject 
to the all-inclusive annual listing fee effective January 1, 2015, and 
were provided certain incentives to do so.\5\ In the second half of 
2015, Nasdaq offered listed companies that did not choose to 
participate in the all-inclusive annual fee program for 2015 to do so 
effective January 1, 2016. The incentive offered to these companies was 
similar to the one offered to companies that opted to participate in 
the all-inclusive annual fee program for 2015. Companies have reacted 
favorably to the new fee program and these incentives.
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    \5\ See IM-5910-1(b)(1) and IM-5920-1(b)(1).
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    Nasdaq now proposes to allow currently listed companies that did 
not previously opt in to the all-inclusive annual fee program to do so 
effective January 1, 2017. Specifically, from June 15, 2016 until 
December 31, 2016, Nasdaq will allow companies to opt in to the all-
inclusive annual fee program for 2017. Any company that does so will 
not be billed for the next $30,000 in fees for the listing of 
additional shares otherwise payable to Nasdaq, regardless of when the 
shares were issued. Fees for share issuances that were already billed 
at the time the opt-in form is submitted will not be forgiven. Nasdaq 
does not believe that this incentive will have an adverse impact on the 
amount of funds available for its regulatory programs.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\6\ in general, and with 
Sections 6(b)(4) and (5) of the Act,\7\ 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.
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    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(4) and (5).
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    Nasdaq believes that the proposed incentive offered to companies 
that elect the all-inclusive annual listing fee starting in 2017 is 
reasonable, equitable, and not unfairly discriminatory. This incentive 
is available equally to all companies. Moreover, no company is required 
to opt in to the all-inclusive annual fee program under this change.
    In addition, as noted above, Nasdaq will accrue benefits from 
companies electing the all-inclusive annual listing fee structure. 
These benefits include eliminating the multiple invoices that are sent 
to a company each year and providing more certainty as to revenue. The 
incentive is designed to help Nasdaq capture those benefits sooner, 
which is a reasonable and non-discriminatory reason to provide the 
incentive to companies.
    Finally, the proposed incentive is consistent with the investor 
protection objectives of Section 6(b)(5) of the Act \8\ in that it 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. Specifically, 
the proposed change will not impact the resources available for 
Nasdaq's listing compliance program, which helps to assure that listing 
standards are properly enforced and investors are protected.
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    \8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change will not 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 based on the aggregate fees assessed, and the value 
provided by each listing. As such, Nasdaq believes that this proposed 
rule change does not encumber the competition for listings with other 
listing venues, which are similarly free to set their fees, but rather 
reflects the competition between listing venues and will further 
enhance such competition.

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.\9\
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    \9\ 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-2016-085 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-2016-085. 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 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

[[Page 42390]]

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 
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; 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-2016-085 and should 
be submitted on or before July 20, 2016.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Brent J. Fields,
Secretary.
[FR Doc. 2016-15360 Filed 6-28-16; 8:45 am]
 BILLING CODE 8011-01-P