Document ID: SEC-2008-0169-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2008-02-01T05:00Z

[Federal Register: February 1, 2008 (Volume 73, Number 22)]
[Notices]               
[Page 6228-6229]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01fe08-125]                         

[[Page 6228]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57214; File No. SR-NASDAQ-2007-096]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing of Proposed Rule Change To Modify the Allocation of 
the Maximum Time an Adjudicatory Body May Grant a Company To Regain 
Compliance With the Listing Requirements Without Modifying the Maximum 
Time Available Under Nasdaq Rule 4802

January 28, 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 3, 2007, The NASDAQ Stock Market LLC (``Nasdaq'') 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 substantially prepared by Nasdaq. 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

    Nasdaq proposes to modify the allocation of the maximum time an 
adjudicatory body may grant a company to regain compliance with the 
listing requirements. Nasdaq will implement the proposed rule 
immediately upon approval.
    The text of the proposed rule change appears below. Proposed new 
language is italicized and 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://nasdaq.complinet.com.

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* * * * *
4802. Purpose and General Provisions
    (a) No change.
    (b) An issuer may file a written request for an exception to any of 
the standards set forth in the Rule 4000 Series at any time during the 
pendency of a proceeding under the Rule 4800 Series. A Listing 
Qualifications Panel may grant exceptions for a period not to exceed 
[the earlier of 90 days from the date of the Panel Decision or] 180 
days from the date of the Staff Determination with respect to the 
deficiency for which the exception is granted, and the Listing Council 
may grant exceptions for a period not to exceed [the earlier of 60 days 
from the date of the Listing Council Decision or 180] 360 days from the 
date of the [Panel Decision] Staff Determination with respect to the 
deficiency for which the exception is granted, in each case where it 
deems appropriate.
    (c)--(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 III 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 modify provisions in the ``Procedure for Review 
of Nasdaq Listing Determinations'' relating to the allocation of the 
maximum time an adjudicatory body may grant a company to regain 
compliance with the listing requirements (``Exception Period''). This 
proposal would not increase the maximum time potentially available 
under the rule.
    Under the current rules, the Exception Period a Listing 
Qualifications Panel (``Panel'') can grant is limited to the lesser of 
180 days from the date that Nasdaq staff sends a delisting letter 
(``Staff Determination'') or 90 days from the date of the Panel's 
decision in the matter. Similarly, the maximum Exception Period that 
the Nasdaq Listing and Hearing Review Council (``Listing Council'') can 
grant when reviewing a Panel decision is limited to the lesser of 180 
days from the date of the Panel decision on review or 60 days from the 
date of the Listing Council's decision in the matter. As a result, 
while the maximum cumulative exception these bodies can grant is 360 
days from the date of the Staff Determination, the actual amount of 
time can vary from company to company based on how quickly the company 
is scheduled for a hearing and the speed with which the Panel and 
Listing Council decisions are prepared.\4\ This variability creates 
uncertainty for Nasdaq-listed companies and their investors regarding 
the maximum amount of time available under an exception.
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    \4\ These time frames are influenced by factors including the 
number of companies in the process at a given time and the 
availability of Panel or Listing Council members for the review and 
approval of drafts.
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    In order to eliminate these differences and provide certainty to 
companies and investors regarding the Nasdaq delisting process, Nasdaq 
proposes to modify the computation of the maximum Exception Period such 
that the maximum time that a Panel can provide is 180 days from the 
date of the Staff Determination and the maximum time that the Listing 
Council can provide is 360 days from the date of the Staff 
Determination. As such, this proposal will eliminate the competing 
deadlines that are based on variable events, such as the amount of time 
it takes to schedule a hearing and issue decisions reflecting the Panel 
or Listing Council's conclusions. As is presently the case, these 
adjudicatory bodies may grant a company a shorter Exception Period, or 
no Exception Period at all, based on their analysis of the applicable 
facts and circumstances.
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)(5) of the Act,\6\ in particular. Nasdaq believes that the proposed 
rule change is designed to provide additional transparency to Nasdaq's 
process surrounding the review of delisting determinations, thereby 
protecting investors and removing an impediment to a free and open 
market.
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    \5\ 15 U.S.C. 78f.
    \6\ 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 impose 
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. 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:

[[Page 6229]]

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-2007-096 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2007-096. 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 on official 
business days between the hours of 10 a.m. and 3 p.m. Copies of such 
filing also will be available for inspection and copying at the 
principal office of Nasdaq. 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-2007-096 and should be submitted on or before 
February 22, 2008.
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    \7\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-1832 Filed 1-31-08; 8:45 am]

BILLING CODE 8011-01-P