Document ID: SEC-2022-1656-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Nasdaq Stock Market, LLC
Posted Date: 2022-12-23T05:00Z

[Federal Register Volume 87, Number 246 (Friday, December 23, 2022)]
[Notices]
[Pages 79028-79033]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-27911]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96532; File No. SR-NASDAQ-2022-068]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to 
Modify Entry and All-Inclusive Annual Fees for Certain Companies

December 19, 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 December 12, 2022, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``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 entry and all-inclusive annual fees 
for certain companies, as described below. While changes proposed 
herein are effective upon filing, the Exchange has designated the 
proposed amendments to be operative on January 1, 2023.
    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 (i) replace the 
tiered entry fee structure with a flat fee of $270,000 when a Company 
first lists a class of equity securities on the Nasdaq Global or Global 
Select Market; (ii) modify the Exchange's all-inclusive annual listing 
fees for all domestic and foreign companies listing equity securities 
covered by Listing Rules 5910 and 5920 on the Nasdaq Global Select, 
Global and Capital Markets; (iii) replace the two-tier entry fee 
structure with a flat fee of $80,000 when an Acquisition Company, as 
defined below, first lists a class of equity securities on Nasdaq; (iv) 
to adopt an all-inclusive annual listing fee structure specific to 
Acquisition Companies listing on the Nasdaq Capital Market; and (v) to 
replace the current three-tier all-inclusive annual listing fee 
structure for all Acquisition Companies with a two-tier structure, as 
described below.
Entry Fees on the Nasdaq Global Market \3\
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    \3\ Nasdaq is not proposing to amend the Entry Fees on the 
Nasdaq Capital Market, except for the Acquisition Companies, as 
explained below.
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    Currently, Nasdaq charges Companies listing pursuant to Rule 
5910(a)(1), other than Acquisition Companies, entry fees for the Nasdaq 
Global and Global Select Market based on the number of shares 
outstanding according to the following tiers: \4\
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    \4\ Companies must also submit a $25,000 initial application 
fee, which is credited towards the entry fee upon listing. The 
initial application fee for an Acquisition Company is $5,000. See 
Rule 5910(a)(11).
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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

[[Page 79029]]

60+ to 70 million shares $290,000
Over 70 million shares $295,000

    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 2018.\5\ Nasdaq now 
proposes to replace the tiered structure with a flat fee of $270,000 
when a Company, other than an Acquisition Company, first lists a class 
of equity securities on the Nasdaq Global or Global Select Market.
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    \5\ See Securities Exchange Act Release No. 84930 (December 21, 
2018), 83 FR 67752 (December 31, 2018) (SR-NASDAQ-2018-105).
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    Nasdaq proposes to make this change to better reflect the value of 
such listing to companies. In particular, the Exchange believes it is 
reasonable to apply a flat entry fee when a Company first lists a class 
of securities as the value of the listing to a company is substantially 
the same regardless of the number of shares the company has 
outstanding. While some companies would pay a higher (or lower) initial 
listing fee under the proposed flat fee than under the current rate, 
Nasdaq believes that this change is not unfairly discriminatory 
because, similarly, the value of the listing to a company is 
substantially the same regardless of the number of shares the company 
has outstanding.
    Nasdaq also proposes to provide that any company, including an 
Acquisition Company (until it has satisfied the condition in Rule IM-
5101-2(b)),\6\ that lists an additional class of equity securities (not 
otherwise identified in Rule 5900 Series) is not subject to entry fees 
but is charged a non-refundable $25,000 initial application fee (except 
for an Acquisition Company that is charged a non-refundable $5,000 
initial application fee).\7\ Currently, Rule 5910(a)(1) provides that a 
company, including an Acquisition Company, that submits an application 
to list any class of its securities (not otherwise identified in Rule 
5900 Series) on the Nasdaq Global Market is subject to the entry fees. 
Nasdaq proposes to make this change to better reflect the value of 
listing an additional class of securities for already listed companies 
and to better align such value with Nasdaq's regulatory resources 
expended in connection with such applications. In particular, the 
Exchange believes it is reasonable to charge only a non-refundable 
$25,000 initial application fee (except for an Acquisition Company that 
is charged a non-refundable $5,000 initial application fee) because the 
company listing an additional class of equity securities is already 
subject to Nasdaq rules, including the applicable corporate governance 
requirements. Accordingly, Nasdaq, typically, expends less regulatory 
resources qualifying an additional class of equity securities for 
listing.
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    \6\ After an Acquisition Company completes a business 
combination where all conditions in Rule IM-5101-2(b) are met, the 
combined Company must meet the requirements for initial listing, but 
the company is not subject to Entry Fee because the company is 
either already listed on Nasdaq or the Entry Fees do not apply 
pursuant to Listing Rule 5910(a)(7)(v). After that, the combined 
Company is no longer subject to the additional requirements of 
Listing Rule IM-5101-2.
    \7\ Nasdaq is not proposing to change Rule 5910(a)(11), which 
provides that a company (except for an Acquisition Company) subject 
to the Entry Fee described in Rule 5910(a)(1) must submit a non-
refundable $25,000 initial application fee with its application. An 
Acquisition Company must submit a non-refundable $5,000 initial 
application fee with its application.
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All-Inclusive Annual Listing Fees
    Currently, for companies listed on the Capital Market, other than 
ADRs, Closed-end Funds and Limited Partnerships, the all-inclusive 
annual fee ranges from $45,000 to $81,000; for ADRs listed on the 
Capital Market the all-inclusive annual fee ranges from $45,000 to 
$54,500; and for Limited Partnerships listed on the Capital Market the 
all-inclusive annual fee ranges from $33,000 to $40,500. On the Global 
and Global Select Markets, the all-inclusive annual fee for companies 
other than, in part,\8\ ADRs, Closed-end Funds and Limited Partnerships 
ranges from $48,000 to $167,000; for ADRs the all-inclusive annual fee 
ranges from $48,000 to $86,000; and for Limited Partnerships the all-
inclusive annual fee ranges from $40,500 to $83,500. The all-inclusive 
annual fee for Closed-end Funds listed on any market tier ranges from 
$33,000 to $107,500. In each case, a company's all-inclusive annual fee 
is based on its total shares outstanding.\9\
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    \8\ Rule 5930 sets forth the all-inclusive annual listing fees 
applicable to SEEDS and Other Securities; and Rule 5940 sets forth 
the all-inclusive annual listing fees applicable to Exchange Traded 
Products that are listed on the Nasdaq Global Market.
    \9\ REITs are subject to the same fee schedule as other equity 
securities; however for the purpose of determining the total shares 
outstanding, shares outstanding of all members in a REIT Family 
listed on the same Nasdaq market tier may be aggregated. Similarly, 
for the purpose of determining the total shares outstanding, fund 
sponsors may aggregate shares outstanding of all Closed-End Funds in 
the same fund family listed on the Nasdaq Global Market or the 
Nasdaq Capital Market. See Listing Rules 5910(b)(2) and 5920(b)(2).
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    Nasdaq proposes to amend the all-inclusive annual fee for all 
domestic and foreign companies listing equity securities on the Nasdaq 
Global Select, Global and Capital Markets to the following amounts,\10\ 
effective January 1, 2023:
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    \10\ The proposed fee change reflects about a 4.0% increase 
rounded to the nearest $500.
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Global/Global Select Markets

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                                                                                Annual fee         Annual Fee
                                                Total shares outstanding        before the         effective
                                                                             proposed change    January 1, 2023
----------------------------------------------------------------------------------------------------------------
Equity securities other than, in part,       Up to 10 million shares......            $48,000            $50,000
 ADRs, Closed-end Funds and Limited
 Partnerships.
                                             10+ to 50 million shares.....             59,500             62,000
                                             50+ to 75 million shares.....             81,000             84,000
                                             75+ to 100 million shares....            107,500            112,000
                                             100+ to 125 million shares...            134,500            140,000
                                             125+ to 150 million shares...            145,500            151,500
                                             Over 150 million shares......            167,000            173,500
ADRs.......................................  Up to 10 million ADRs and                 48,000             50,000
                                              other listed equity
                                              securities.
                                             10+ to 50 million ADRs and                54,500             56,500
                                              other listed equity
                                              securities.

[[Page 79030]]

 
                                             50+ to 75 million ADRs and                64,500             67,000
                                              other listed equity
                                              securities.
                                             Over 75 million ADRs and                  86,000             89,500
                                              other listed equity
                                              securities.
Closed-end Funds...........................  Up to 50 million shares......             33,000             34,500
                                             50+ to 100 million shares....             54,500             56,500
                                             100+ to 250 million shares...             81,000             84,000
                                             Over 250 million shares......            107,500            112,000
Limited Partnerships.......................  Up to 75 million shares......             40,500             42,000
                                             75+ to 100 million shares....             54,500             56,500
                                             100+ to 125 million shares...             67,000             69,500
                                             125+ to 150 million shares...             72,500             75,500
                                             Over 150 million shares......             83,500             87,000
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Capital Market

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                                                                            Annual fee before      Annual Fee
                                                Total shares outstanding       the proposed        effective
                                                                                  change        January 1, 2023
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Equity securities other than ADRs, Closed-   Up to 10 million shares......            $45,000            $47,000
 end Funds and Limited Partnerships.
                                             10+ to 50 million shares.....             59,500             62,000
                                             Over 50 million shares.......             81,000             84,000
ADRs.......................................  Up to 10 million ADRs and                 45,000             47,000
                                              other listed equity
                                              securities.
                                             Over10 million ADRs and other             54,500             56,500
                                              listed equity securities.
Closed-end Funds...........................  Up to 50 million shares......             33,000             34,500
                                             50+ to 100 million shares....             54,500             56,500
                                             100+ to 250 million shares...             81,000             84,000
                                             Over 250 million shares......            107,500            112,000
Limited Partnerships.......................  Up to 75 million shares......             33,000             34,500
                                             Over 75 million shares.......             40,500             42,000
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    Nasdaq also proposes to update the maximum fee applicable to a 
Closed-End Fund family to $112,000 and the maximum fee applicable to a 
REIT Family listed on the Nasdaq Global Market and the Nasdaq Capital 
Market to $173,500 and $84,000, respectively, to reflect the proposed 
fee change for other equity securities, as described above.\11\
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    \11\ See footnote 9 above.
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    Finally, Nasdaq proposes to update amounts in examples in Listing 
Rules 5910(b)(3)(D) and 5920(b)(3)(D), clarifying the application of 
the rules for companies transferring between Nasdaq tiers, to align the 
fee amounts with the fees applicable in year 2023.
    As described below, Nasdaq proposes to make the aforementioned fee 
increases to better reflect the Exchange's costs related to listing 
equity securities and the corresponding value of such listing to 
companies.
    Nasdaq also proposes to remove references to fees that are no 
longer applicable because they were superseded by new fee rates 
specified in the rule text.
Entry Fee for Acquisition Companies
    Nasdaq proposes to modify the Entry Fee for companies whose 
business plan is to complete an initial public offering and engage in a 
merger or acquisition with one or more unidentified companies within a 
specific period of time, as described in IM-5101-2, (``Acquisition 
Companies'').
    Nasdaq currently charges entry fees for Acquisition Companies 
listing on the Nasdaq Capital, Global and Global Select Markets based 
on the number of shares outstanding according to the following tiers: 
\12\
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    \12\ Listing Rules 5910(a)(1)(B) and 5920(a)(1) for the Nasdaq 
Global or Global Select Market and the Nasdaq Capital Market, 
respectively. Companies must also submit a $5,000 initial 
application fee, which is credited towards the entry fee upon 
listing. See Listing Rules 5910(a)(11) and 5920(a)(11).

Up to 15 million shares $50,000
Over 15 million shares $75,000

    These fees are based on the aggregate of all classes of equity 
securities to be listed on Nasdaq, 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.
    Nasdaq now proposes to replace the two-tier structure with a flat 
fee of $80,000 when an Acquisition Company first lists a class of 
equity securities on Nasdaq. The flat entry fee would cover both an 
Acquisition Company's common shares and also warrants and rights, if 
any.
    Nasdaq proposes to make these fee increases to better reflect the 
value of such listing to companies. In particular, the Exchange 
believes it is reasonable to apply a flat entry fee when an Acquisition 
Company first lists a class of securities as the value of the listing 
to a company is substantially the same regardless of the number of 
shares the company has outstanding. While companies would pay a higher 
initial listing fee under the proposed flat fee than under the current 
rate, Nasdaq believes that this increase is not unfairly discriminatory 
because, similarly, the value of the listing to a company is

[[Page 79031]]

substantially the same regardless of the number of shares the company 
has outstanding. Nasdaq also believes that the fee increase is 
reasonable given the substantial increase in new listings of the 
Acquisition Companies in the last few years, which caused Nasdaq to 
dedicate additional resources to conduct regulatory reviews of 
Acquisition Companies' IPOs and subsequent business combination 
transactions with operating companies.
    In addition, the Exchange observes that many companies may not know 
their share structure or how many shares will ultimately be outstanding 
at the time they are considering whether to list on the Exchange. 
Therefore, the Exchange believes that adopting a flat entry fee will 
provide prospective Acquisition Companies listing on Nasdaq with 
greater transparency on the costs associated with initially listing on 
the Exchange.
All-Inclusive Annual Listing Fee for Acquisition Companies
    Nasdaq currently charges an All-Inclusive Annual Listing Fee for 
Acquisition Companies listed on the Nasdaq Capital, Global and Global 
Select Markets based on the number of shares outstanding according to 
the following tiers:

Up to 10 million shares $45,000
10+ to 50 million shares $59,500
Over 50 million shares $81,000

    Currently, the securities of an Acquisition Company listing on the 
Nasdaq Capital Market are subject to the same all-inclusive annual fee 
schedule as all domestic and foreign companies listing equity 
securities on the Nasdaq Capital Market. These fees were last modified 
in 2021, effective for 2022, as part of the Exchange's modification of 
all-inclusive annual listing fees for all domestic and foreign 
companies listing equity securities covered by Listing Rules 5910 and 
5920 on the Nasdaq Global Select, Global and Capital Markets.\13\ The 
securities of an Acquisition Company listing on the Nasdaq Global and 
Global Select Markets are subject to the same all-inclusive annual fee 
schedule as the securities of an Acquisition Company listing on the 
Nasdaq Capital Market as provided in Listing Rule 5910(a)(1)(B) 
[sic].\14\
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    \13\ See Securities Exchange Act Release No. 34- 93713 (December 
3, 2021), 86 FR 70156 (December 9, 2021) (SR-NASDAQ-2021-091).
    \14\ See Securities Exchange Act Release No. 92345 (July 7, 
2021), 86 FR 36807 (July 13, 2021) (SR-NASDAQ-2021-055). In this 
filing Nasdaq explained its belief that Acquisition Companies listed 
on the Nasdaq Global Market receive the same services as Acquisition 
Companies listed on the Nasdaq Capital Market making it appropriate 
for Nasdaq to charge such companies the same fees.
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    Nasdaq now proposes to adopt a fee structure specifically for 
Acquisition Companies listing on the Nasdaq Capital Market and to 
replace the current three-tier structure for Acquisition Companies 
listing on the Nasdaq Capital, Global and Global Select Markets with 
the following two-tier structure:

Up to 50 million shares $70,000
Over 50 million shares $81,000

    As described above, securities listed on the Nasdaq Capital Market 
by an Acquisition Company are, and have been, subject to the same 
annual fee schedule as all domestic and foreign companies listing 
equity securities on the Nasdaq Capital Market. This structure was 
maintained since Nasdaq first adopted a rule to impose additional 
listing requirements on Acquisition Companies, which allowed such 
companies to list on Nasdaq.
    In establishing the proposed All-Inclusive Annual Fees for 
Acquisition Companies across all tiers, including the changes to the 
number and cut-off point of pricing tiers, Nasdaq considered various 
factors that distinguish Acquisition Companies from other issuers of 
primary equity securities on Nasdaq, the use of various Nasdaq 
regulatory and support services by Acquisition Companies, as well as, 
pricing for similar securities on other national securities exchanges. 
Based on this analysis, Nasdaq proposes to modify the number of fee 
tiers within the annual fee schedule to better align fees with the size 
of the companies that pay those fees and the use that companies of 
various sizes typically make of Nasdaq's services. In setting the 
proposed All-Inclusive Annual Fee, Nasdaq reviewed the billing history 
of more than 450 Acquisition Companies that had been listed on Nasdaq 
to determine the fees assessed these companies. Nasdaq also reviewed 
listing-related services provided to Acquisition Companies, including 
reviews of various regulatory forms, rule interpretations requests, and 
compliance plan reviews. Nasdaq established the proposed two tier All-
Inclusive Annual Fee for Acquisition Companies and shares outstanding 
tier based on this analysis of historical fees paid and regulatory 
services used.
    Based on this analysis, Nasdaq determined that only a small 
minority of Acquisition companies were listed on Nasdaq with less than 
10 million of total shares outstanding, but the services provided to 
them and the Exchange's regulatory resources dedicated to such listings 
are substantially the same regardless of the number of shares the 
company has outstanding. The vast majority of listed Acquisition 
companies fall within the current second tier. Accordingly, Nasdaq 
believes that the new tier of up to 50 million shares better reflects 
both the value of the listing to Acquisition Companies and the 
expenditure of regulatory resources by Nasdaq. Nasdaq also believes 
that the all-inclusive fee increase for this tier is reasonable given 
the substantial increase in new listings of the Acquisition Companies 
in the last few years, which caused Nasdaq to dedicate additional 
resources to conduct regulatory reviews of Acquisition Companies' IPOs 
and subsequent business combination transactions.
    While there is a small minority of Acquisition Companies that fall 
within the current third tier (over 50 million shares) and that will 
not be affected by the proposed fee change, Nasdaq believes that this 
is not unfairly discriminatory because such large Acquisition Companies 
tend to have better known and more experienced sponsors and advisors, 
and therefore require fewer resources from Nasdaq. In addition, Nasdaq 
obtains value from being associated with these experienced sponsors. 
Pricing for similar securities on other national securities exchanges 
was also considered, and Nasdaq believes that maintaining this tier as 
is, is reasonable given the competitive landscape.
    Nasdaq also proposes to renumber certain rules to improve the 
clarity and readability of these rules.
    While these changes are effective upon filing, Nasdaq has 
designated the proposed amendments to be operative on January 1, 2023.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with section 
6(b) of the Act,\15\ in general, and furthers the objectives of 
sections 6(b)(4) and 6(b)(5) 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, and is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(4) and (5).
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    Nasdaq believes that the adoption of a flat entry fee on the Nasdaq 
Global and Global Select Markets represents a reasonable attempt to 
address the Exchange's increased costs in servicing these listings 
while continuing to attract and retain listings. Nasdaq proposes to

[[Page 79032]]

make the aforementioned fee structure change to better reflect the 
value of such listing to companies. In particular, the Exchange 
believes it is reasonable to apply a flat fee when a company first 
lists a class of securities as the value to the company is 
substantially the same regardless of the number of shares the company 
has outstanding. While some companies would pay a higher initial 
listing fee under the proposed flat fee than under the current rate, 
the Exchange believes that this increase is not unfairly 
discriminatory, as the resources the Exchange expends in connection 
with the initial listing of those companies are typically consistent 
with the resources the Exchange expends on many companies that are 
already subject to the similar fees under the current structure. This 
proposal is consistent with the approach of other exchanges.\17\
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    \17\ See Section 902.03 Fees for Listed Equity Securities; of 
the NYSE Listed Company Manual.
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    Nasdaq believes that it is not unfairly discriminatory and 
represents an equitable allocation of reasonable fees to amend Listing 
Rule 5910(a)(1) to provide that any company, including an Acquisition 
Company (until it has satisfied the condition in Rule IM-5101-2(b)), 
that lists an additional class of equity securities (not otherwise 
identified in Rule 5900 Series) is not subject to entry fees under this 
rule but is charged a non-refundable $25,000 initial application fee 
(except for an Acquisition Company that is charged a non-refundable 
$5,000 initial application fee) because this change better reflects the 
value of listing an additional class of securities for already listed 
companies and better aligns such value with Nasdaq's regulatory 
resources expended in connection with such applications. In particular, 
the Exchange believes it is reasonable to charge only a non-refundable 
$25,000 initial application fee (except for an Acquisition Company that 
is charged a non-refundable $5,000 initial application fee), because 
the company listing an additional class of equity securities is already 
subject to Nasdaq rules, including the applicable corporate governance 
requirements. Accordingly, Nasdaq, typically, expends less regulatory 
resources qualifying an additional class of equity securities for 
listing.
    Nasdaq believes that it is not unfairly discriminatory and 
represents an equitable allocation of reasonable fees to amend Listing 
Rules 5910(b)(2) and 5920(b)(2) to increase the all-inclusive annual 
fees listing fees \18\ as set forth above because of the increased 
costs incurred by Nasdaq since it established the current rates. In 
that regard, the Exchange notes that its general costs to support our 
listed companies have increased, including due to price inflation. The 
Exchange also continues to expand and improve the services it provides 
to listed companies, the technology to deliver those services and the 
customer experience at the Nasdaq MarketSite. These improvements 
include, ESG services, governance solutions and support, the remodeling 
of a portion of the New York Headquarters and the investment in 
technology to support direct listings with a capital raise, IPO 
innovations and ongoing trading.
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    \18\ Effective January 1, 2022, Nasdaq modified the fee schedule 
for all domestic and foreign companies listing equity securities 
covered by Listing Rules 5910 and 5920 on the Nasdaq Global Select, 
Global and Capital Markets. Securities Exchange Act Release No. 
93713 (December 3, 2022), 86 FR 70156 (December 9, 2022) (SR-NASDAQ-
2021-095).
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    Nasdaq also believes that it is not unfairly discriminatory and 
represents an equitable allocation of reasonable fees to amend Listing 
Rules 5910(b)(2) and 5920(b)(2) to increase the all-inclusive annual 
listing fees while rounding the 4% increase to the nearest $500 as set 
forth above because such rounding represents de minimis variation in 
fees for Nasdaq listed companies. In addition, Nasdaq has used the same 
methodology since the adoption of the all-inclusive annual listing fee 
schedule and all annual listing fees under Listing Rules 5910(b)(2) and 
5920(b)(2) are rounded to $500.
    The proposed change to update amounts in examples clarifying the 
application of the rules for companies transferring between Nasdaq 
tiers and to update the maximum fee applicable to a Closed-End Fund 
family and the maximum fee applicable to a REIT Family to reflect the 
proposed fee change for other equity securities, as described above, is 
not unfairly discriminatory because it merely provides transparency to 
the application of fees without changing the substance of the rule.
    Nasdaq believes that the Exchange operates in a highly competitive 
marketplace for the listing of companies, including the Acquisition 
Companies.\19\ The Commission has repeatedly expressed its preference 
for competition over regulatory intervention in determining prices, 
products, and services in the securities markets. The Exchange believes 
that the ever-shifting market share among the exchanges with respect to 
new listings and the transfer of existing listings between competitor 
exchanges demonstrates that issuers can choose different listing 
markets in response to fee changes. Accordingly, competitive forces 
constrain exchange's listing fees. In other words, changes to exchange 
listing fees can have a direct effect on the ability of an exchange to 
compete for new listings and retain existing listings.
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    \19\ The Justice Department has noted the intense competitive 
environment for exchange listings. See ``NASDAQ OMX Group Inc. and 
Intercontinental Exchange 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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    Given this competitive environment, Nasdaq believes that the 
adoption of a flat Entry Fee and a modification to the All-Inclusive 
Annual Fee schedule for Acquisition Companies represent a reasonable 
attempt to address the Exchange's increased costs in servicing these 
listings while continuing to attract and retain listings.
    Nasdaq believes it is reasonable to apply a flat Entry Fee when an 
Acquisition Company lists a class of securities as the value of the 
listing to a company is substantially the same regardless of the number 
of shares the company has outstanding. While Acquisition Companies 
would pay a higher initial listing fee under the proposed flat fee than 
under the current rate, Nasdaq believes that this increase is not 
unfairly discriminatory, similarly, the value of the listing to a 
company is substantially the same regardless of the number of shares 
the company has outstanding. Nasdaq also believes that the fee increase 
is reasonable given the substantial increase in new listings of the 
Acquisition Companies in the last few years, which caused Nasdaq to 
dedicate additional resources to conduct regulatory reviews of 
Acquisition Companies' IPOs and subsequent business combination 
transactions.
    Nasdaq believes it is reasonable to transition from the current 
three-tier structure for the All-Inclusive Annual Fee for Acquisition 
Companies to the proposed two-tier structure because Nasdaq's analysis, 
as described above, indicates that the proposed structure better 
reflects the value of services Nasdaq provides to Acquisition 
Companies. Nasdaq also believes that the All-Inclusive Fee increase for 
the proposed first tier is reasonable given the substantial increase in 
new listings of the Acquisition Companies in the last few years, which 
caused Nasdaq to dedicate additional resources to conduct regulatory 
reviews of Acquisition Companies' IPOs and subsequent business 
combination transactions.

[[Page 79033]]

    While there is a small minority of Acquisition Companies that fall 
within the proposed second tier (over 50 million shares) that will not 
be affected by the proposed fee change, Nasdaq believes that this is 
not unfairly discriminatory because such large Acquisition Companies 
tend to have better known and more experienced sponsors and advisors, 
and therefore have more value to Nasdaq when they list. Pricing for 
similar securities on other national securities exchanges was also 
considered, and Nasdaq believes that maintaining this tier as is, is 
reasonable given the competitive landscape.
    The proposed removal of text relating to fees that are no longer 
applicable and renumbering certain rules to improve their clarity and 
readability is ministerial in nature and has no substantive effect.

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.\20\
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    \20\ 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-2022-068 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-2022-068. 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, 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-2022-068 and 
should be submitted on or before January 13, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-27911 Filed 12-22-22; 8:45 am]
BILLING CODE 8011-01-P