Document ID: SEC-2023-1401-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Nasdaq Stock Market LLC
Posted Date: 2023-12-06T05:00Z

[Federal Register Volume 88, Number 233 (Wednesday, December 6, 2023)]
[Notices]
[Pages 84857-84861]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-26724]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99042; File No. SR-NASDAQ-2023-048]

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

November 30, 2023.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on November 15, 2023, 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, 2024.
    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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to (i) modify the entry 
fee for a Company that 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 certain domestic and foreign 
companies listing equity securities on the Nasdaq Global Select, Global 
and Capital Markets; and (iii) replace the tiered all-inclusive annual 
listing fee structure with a flat fee of $81,000 for an Acquisition 
Company, as defined below.
    All revised fees will be applied in the same manner to all issuers 
and the changes will not disproportionately affect any specific 
category of issuers. While these changes are effective upon filing, 
Nasdaq has designated the proposed amendments to be operative on 
January 1, 2024.
Entry Fees on the Nasdaq Global Market
    Currently, Nasdaq charges companies listing pursuant to Rule 
5910(a)(1)(A)(i) a $270,000 entry fee the first time the company lists 
a class of its securities (not otherwise identified in the Rule 5900 
Series) on the Nasdaq Global and Global Select Market. Nasdaq is 
proposing to increase the entry fee for these companies from $270,000 
to $295,000 to better align its fees with the value of a listing to 
issuers and to reflect costs in servicing these listings, such as from 
the remodeling of a portion of the New York Headquarters used for 
company events, including market opening and closing bells, conducting 
the required associated regulatory oversight, and Nasdaq's advocacy 
efforts on behalf of the public company model. In establishing these 
fee changes Nasdaq also considered the competitive atmosphere in which 
the Exchange operates.
    Nasdaq does not propose to increase the minimum entry fees 
described in Rule 5910(a) charged for additional classes of equity 
securities, Acquisition Companies, Closed-End Funds, and any

[[Page 84858]]

class of rights.\3\ The Exchange believes that the benefits issuers 
receive in connection with those listings are consistent with the 
current fee levels. Further, issuers of those types of listings are not 
generally entitled to the types of services provided and resources 
offered in connection with a primary equity security listing. As such, 
the Exchange has not incurred the same level of cost increases 
associated with them.
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    \3\ Nasdaq also is not proposing to amend the Entry Fees on the 
Nasdaq Capital Market.
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    While the new entry fees are effective upon filing and Nasdaq has 
proposed that they be operative on January 1, 2024, Nasdaq will offer a 
short period for any company that applies before January 1, 2024 to 
complete the listing process and list under the current fee schedule. 
Specifically, any company that submits its application to Nasdaq before 
January 1, 2024, and lists before February 15, 2024, would be subject 
to fees under the existing fee schedule. Nasdaq believes that it is 
appropriate to continue to apply the prior 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 that fee schedule.
All-Inclusive Annual Listing Fees
    Currently, for companies listed on the Capital Market, other than 
Acquisition Companies (i.e., 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), ADRs, Closed-end Funds and 
Limited Partnerships, the all-inclusive annual fee described in Listing 
Rule 5920 ranges from $47,000 to $84,000; for Acquisition Companies 
listing on the Capital Market the all-inclusive annual fee ranges from 
$70,000 to $81,000; and for ADRs listed on the Capital Market the all-
inclusive annual fee ranges from $47,000 to $56,500.\4\ On the Global 
and Global Select Markets, the all-inclusive annual fee described in 
Listing Rule 5910 for companies other than Acquisition Companies, ADRs, 
Closed-end Funds and Limited Partnerships ranges from $50,000 to 
$173,500; for Acquisition Companies on the Global and Global Select 
Markets the all-inclusive annual fee ranges from $70,000 to $81,000; 
for ADRs the all-inclusive annual fee ranges from $50,000 to 
$89,500.\5\ In each case, a company's all-inclusive annual fee is based 
on its total shares outstanding.\6\
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    \4\ Nasdaq is not proposing to amend the all-inclusive annual 
fee for Closed-end Funds and Limited Partnerships on any Nasdaq 
tier.
    \5\ 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. Nasdaq is not 
proposing to amend these rules.
    \6\ 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 certain 
domestic and foreign companies listing equity securities on the Nasdaq 
Global Select, Global and Capital Markets to the following amounts,\7\ 
effective January 1, 2024:
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    \7\ In establishing the fee changes described in this rule 
filing, Nasdaq considered various factors that distinguish 
companies, including market tier, shares outstanding, and security 
type, as well as the perceived use of various Nasdaq regulatory and 
support services by companies of various characteristics to better 
align fees with the size of the companies that pay those fees. 
Pricing for similar securities on other national securities 
exchanges was also considered. Based on this analysis, Nasdaq does 
not propose to modify the structure and the number of fee tiers 
within the annual fee schedule at this time.
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Global/Global Select Markets

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                                                                                    Annual fee      Annual fee
                                                                                    before the       effective
                                                    Total shares outstanding         proposed       January 1,
                                                                                      change           2024
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Equity securities other than, in part,          Up to 10 million shares.........         $50,000         $52,500
 Acquisition Companies, ADRs, Closed-end Funds
 and Limited Partnerships.
                                                10+ to 50 million shares........          62,000          65,500
                                                50+ to 75 million shares........          84,000          85,000
                                                75+ to 100 million shares.......         112,000         113,500
                                                100+ to 125 million shares......         140,000         141,500
                                                125+ to 150 million shares......         151,500         157,500
                                                Over 150 million shares.........         173,500         182,500
ADRs..........................................  Up to 10 million ADRs and other           50,000          52,500
                                                 listed equity securities.
                                                10+ to 50 million ADRs and other          56,500          59,500
                                                 listed equity securities.
                                                50+ to 75 million ADRs and other          67,000          70,500
                                                 listed equity securities.
                                                Over 75 million ADRs and other            89,500          94,000
                                                 listed equity securities.
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Capital Market

----------------------------------------------------------------------------------------------------------------
                                                                                    Annual fee      Annual fee
                                                                                    before the       effective
                                                    Total shares outstanding         proposed       January 1,
                                                                                      change           2024
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Equity securities other than Acquisition        Up to 10 million shares.........         $47,000         $49,500
 Companies, ADRs, Closed-end Funds and Limited
 Partnerships.
                                                10+ to 50 million shares........          62,000          65,500
                                                Over 50 million shares..........          84,000          85,000

[[Page 84859]]

 
ADRs..........................................  Up to 10 million ADRs and other           47,000          49,500
                                                 listed equity securities.
                                                Over10 million ADRs and other             56,500          59,500
                                                 listed equity securities.
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    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 2024.
    Nasdaq proposes to make the aforementioned fee increases to better 
reflect the Exchange's costs related to listing equity securities, such 
as from the remodeling of a portion of the New York Headquarters used 
for company events, including market opening and closing bells, 
conducting the required associated regulatory oversight, and Nasdaq's 
advocacy efforts on behalf of listed companies, and the corresponding 
value of such listing to companies. In establishing these fee changes 
Nasdaq also considered the competitive atmosphere in which the Exchange 
operates.
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: \8\
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    \8\ See Listing Rules 5910(b)(2)(F) and 5920(b)(2)(G).

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

    Nasdaq now proposes to replace the tiered structure for Acquisition 
Companies listed on the Nasdaq Capital, Global and Global Select 
Markets with a flat fee of $81,000 effective January 1, 2024. 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 all-inclusive annual listing fee for 
Acquisition Companies because the value of the listing for an 
Acquisition Company, given the limited scope of operations and the 
requirement to engage in a merger or acquisition with one or more 
unidentified companies within a 36 months of the effectiveness of the 
Acquisition Company's IPO registration statement, is substantially 
similar regardless of the number of shares the Acquisition Company has 
outstanding.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\9\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\10\ 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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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4) and (5).
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    As a preliminary matter, Nasdaq notes that the Exchange operates in 
a highly competitive marketplace for the listing of companies.\11\ 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 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. Moreover, new competitors can enter the space, including 
existing exchanges without listing programs.\12\ Accordingly, 
competitive forces constrain the Exchange's listing fees and changes to 
the listing fees can have a direct effect on the ability of Nasdaq to 
compete for new listings and retain existing listings.
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    \11\ 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.
    \12\ In that regard, Nasdaq notes that CBOE BZX has announced a 
new listing offering. See ``Cboe Launches New Global Listing 
Offering for Companies and ETFs of the Purpose-Driven Innovation 
Economy'' (June 2, 2023), available at https://ir.cboe.com/news/news-details/2023/Cboe-Launches-New-Global-Listing-Offering-for-Companies-and-ETFs-of-the-Purpose-Driven-Innovation-Economy-06-02-2023/default.aspx.
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Entry Fees on the Nasdaq Global Market
    Nasdaq believes that the modification of the entry fees on the 
Nasdaq Global and Global Select Markets represents a reasonable attempt 
to address the Exchange's increased costs in servicing these listings 
and conducting the required associated regulatory oversight while also 
considering competitive dynamics and continuing to attract new 
listings. Nasdaq proposes to make the aforementioned fee change to 
better reflect the value of such listing to companies. While newly 
listing companies would pay a higher initial listing fee under the 
proposed fee than under the current rule, 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 consistent with the proposed fees. Nasdaq does not 
propose to increase the entry fees described in Rule 5910(a) charged 
for additional classes of equity securities, Acquisition Companies, 
Closed-End Funds, and any class of rights. The Exchange believes that 
the benefits issuers receive in connection with those listings are 
consistent with the current fee levels, as those types of listings do 
not generally entitle issuers to the types of services provided in 
connection with a primary common or preferred stock listing of an 
operating company and the Exchange has therefore not incurred the same 
level of cost increase associated with them. As such, Nasdaq does not 
think it is unfairly discriminatory to increase the entry fees only for 
operating companies listing their primary equity security.
    Nasdaq also does not think it is unfairly discriminatory to allow 
companies that apply to list before January 1, 2024, and list before 
February 15, 2024, to pay 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.
All-Inclusive Annual Listing Fees
    Nasdaq believes that the proposed amendments to Listing Rules 
5910(b)(2) and 5920(b)(2) to increase the all-inclusive annual fees 
listing fees as set

[[Page 84860]]

forth above are reasonable because of the increased costs incurred by 
Nasdaq, including due to price inflation. In that regard, the Exchange 
notes that its general costs to support listed companies and conduct 
the required associated regulatory oversight have increased. 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 the remodeling of a portion of Nasdaq's New York Headquarters 
used for company events, including market opening and closing bells, 
and the investment in technology to support ongoing trading.
    The Exchange also believes that the proposed amendments to the 
annual fees for equity securities are equitable because they do not 
change the existing framework for such fees, but simply increase the 
amount of certain of the fees to reflect increases in operating costs 
and the perceived value of a listing, including as a result of Nasdaq's 
advocacy efforts on behalf of listed companies. Similarly, as the fee 
structure remains effectively unchanged apart from increases in the 
rates paid by certain issuers, as described above, the changes to 
annual fees for equity securities neither target nor will they have a 
disparate impact on any particular category of issuer of equity 
securities.
    The Exchange believes that the proposal to increase annual fees for 
operating companies is not unfairly discriminatory because Nasdaq will 
maintain the current fee structure, based on shares outstanding, and 
the same fee schedule will apply to all such issuers. While the 
Exchange does not propose to increase the minimum annual fees charged 
for various products including Closed-end Funds, Limited Partnerships, 
and securities covered by Rule 5930 (that sets forth the all-inclusive 
annual listing fees applicable to SEEDS and Other Securities), Rule 
5935 (that sets forth the all-inclusive annual listing fees applicable 
to Non-Convertible Bonds) and Rule 5940 (that sets forth the all-
inclusive annual listing fees applicable to Exchange Traded Products), 
the Exchange believes that this is not unfairly discriminatory because 
the benefits the issuers of those other types of securities receive in 
connection with their listings are consistent with the current fee 
levels paid by those issuers. Specifically, those types of listings do 
not generally benefit to the same extent from services provided by the 
Exchange and the Exchange's advocacy efforts as do issuers of operating 
company equity securities.
All-Inclusive Annual Listing Fee for Acquisition Companies
    Nasdaq believes the proposed change to apply a flat all-inclusive 
annual fee for all listed Acquisition Companies is reasonable, and not 
unfairly discriminatory, because the value of the listing to an 
Acquisition Company, and Nasdaq's costs in regulating and supporting 
the listing of an Acquisition Company, is substantially similar 
regardless of the number of shares the company has outstanding or its 
market tier, and, as revised, all Acquisition Companies would pay the 
same fee. While some companies would pay a higher fee under the 
proposed flat fee than under the current rate, Nasdaq believes that 
this change is not unfairly discriminatory because the value of the 
listing to an Acquisition Company is substantially similar regardless 
of the number of shares the company has outstanding. Pricing for 
similar securities on other national securities exchanges was also 
considered, and Nasdaq believes that a proposed flat all-inclusive 
annual listing fee for Acquisition Companies is reasonable given the 
competitive landscape.\13\
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    \13\ See, e.g., Section 902.11 of the NYSE Listed Company Manual 
imposing a flat annual fee of $85,000 on Acquisition Companies.
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    The proposed renumbering of 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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. 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. The Exchange also 
does not believe that the proposed rule change will have any meaningful 
impact on competition among listed companies because all similarly 
situated companies will be charged the same fee.

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.\14\
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    \14\ 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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-NASDAQ-2023-048 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-2023-048. 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 (https://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

[[Page 84861]]

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 
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. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-NASDAQ-2023-048 and should 
be submitted on or before December 27, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-26724 Filed 12-5-23; 8:45 am]
BILLING CODE 8011-01-P