Document ID: SEC-2021-0026-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Nasdaq Stock Market LLC
Posted Date: 2021-01-06T05:00Z

[Federal Register Volume 86, Number 3 (Wednesday, January 6, 2021)]
[Notices]
[Pages 640-641]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-29221]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90832; File No. SR-NASDAQ-2020-097]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Waive Certain Fees Related to Non-Convertible Bonds

December 30, 2020.
    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 23, 2020, 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 and 
II 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 waive certain fees related to non-
convertible bonds listed in conjunction with their voluntary delisting 
from a regulated foreign exchange.
    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 Exchange proposes to amend Rule 5935 of the Nasdaq Listing 
Rules to waive the application and annual fees to list a class of non-
convertible bonds on Nasdaq pursuant to Rule 5702 in conjunction with 
the company voluntarily delisting that bond from a regulated foreign 
exchange. The proposed waiver is identical to a waiver currently 
applied under Rule 5935 in connection with the listing of non-
convertible bonds transferred from the New York Stock Exchange or NYSE 
American.\3\ In adopting this waiver in relation to non-convertible 
bonds whose listing was being transferred from the New York Stock 
Exchange or NYSE American, the Exchange noted that less work is 
required to process a listing application for a security that is 
already listed on another exchange than it is to process an application 
for listing a new security.\4\ Similarly, less work is required to 
process a listing application for a security that is already listed on 
a foreign exchange because the issuer is familiar with being on a 
regulated exchange. Additionally, the Exchange noted that issuers that 
have already paid their annual fees to NYSE or NYSE American would be 
disincentivized to switch to the Exchange without a waiver.\5\ The 
Exchange also noted that the proposed waivers were consistent with the 
approach it has taken with certain listing and annual fees for issuers 
of equity securities who transfer their listings to the Exchange from 
another national securities exchange.\6\ The Exchange competes with 
foreign regulated exchanges for the listing of debt securities in the 
same way it competes with other national securities exchanges and the 
costs of initial listing and the potential duplication of fee payments 
in the first part year of listing on the Exchange represent a similar 
impediment to the Exchange successfully competing with foreign 
regulated exchanges for the transfer of the listing of those 
securities. As such, the Exchange believes it is appropriate to apply 
waivers in relation to issuers voluntarily delisting their securities 
from a regulated foreign exchange in connection with listing them on 
the Exchange for trading non-convertible bonds. The proposed rule 
change would not affect the Exchange's commitment of resources to its 
regulatory oversight of the listing process or its regulatory programs.
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    \3\ See Securities Exchange Act Release No. 84001 (August 30, 
2018); 83 FR 45289 (September 6, 2018) (SR-NASDAQ-2018-070).
    \4\ Id. at 45295.
    \5\ Id. at 45296.
    \6\ Id. at 45295. See also Securities Exchange Act Release No. 
70418 (September 16, 2013), 78 FR 57909 (September 20, 2013) (SR-
NASDAQ-2013-115).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\7\ in general, and furthers the 
objectives of Section 6(b)(4) \8\ of the Act, in particular, in that it 
is designed to provide for the equitable allocation of reasonable dues, 
fees, and other charges. The Exchange also believes that the proposed 
rule change is consistent with Section 6(b)(5) of the Act,\9\ in that 
it is designed to promote just and equitable principles of trade, to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system, and, in general, to protect 
investors and the public interest and is not designed to permit unfair 
discrimination between customers, issuers, brokers, or dealers.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
    \9\ 15 U.S.C. 78f(b)(5).
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The Proposed Change Is Reasonable
    The Exchange operates in a highly competitive marketplace when 
seeking to obtain listings of non-convertible debt securities. 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 listing 
fees. Stated otherwise, 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. Given this competitive environment, the 
Exchange believes that the proposal to waive the application and annual 
fees for non-convertible bonds listing in conjunction with their 
voluntary delisting from a foreign regulated exchange is reasonable 
because the cost

[[Page 641]]

of paying listing fees to both the Exchange and the predecessor foreign 
regulated exchange imposes a financial burden and acts as a 
disincentive to transferring. Additionally, the Exchange has 
implemented similar waivers for companies that switch their listing 
markets for its non-convertible bonds from the New York Stock Exchange 
or NYSE America.\10\ Moreover, similar waivers exist on other 
exchanges.\11\
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    \10\ See Rule 5935.
    \11\ See Securities Exchange Act Release No. 88408 (March 18, 
2020), 85 FR 16705 (March 24, 2020) (NYSE-2020-16).
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The Proposal Is an Equitable Allocation of Fees
    The Exchange believes that the waiver of the application and annual 
fees for listing non-convertible bonds listings in conjunction with 
their voluntary delisting from a foreign regulated exchange is not 
inequitable as it expects it will be available to a small number of 
issuers and is being implemented solely to relieve these issuers of the 
burden of duplicative payments to two exchanges.
The Proposal Is Not Unfairly Discriminatory
    The Exchange believes that the proposal is not unfairly 
discriminatory, because the proposed waivers are solely intended to 
avoid duplication of costs for issuers transferring their listings from 
foreign regulated exchanges and does not provide them with any benefit 
that would place them in a more favorable position than other listed 
companies. Finally, the Exchange believes that it is subject to 
significant competitive forces, as described below in the Exchange's 
statement regarding the burden on competition.

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 that is not necessary or appropriate 
in furtherance of the purposes of the Act.
Intramarket Competition
    The Exchange does not believe that its proposals will place any 
applicant at a competitive disadvantage. To the contrary, the proposed 
waiver will ensure that applicants who transfer their listings from a 
foreign exchange are not placed at a disadvantage versus other 
applicants. The proposed waivers will be available to all similarly 
situated applicants on the same basis. The Exchange does not believe 
that the proposed amended fees will have any meaningful effect on the 
competition among issuers listed on the Exchange. Moreover, applicants 
are free to list on other venues to the extent they believe that the 
waiver is not attractive.
Intermarket Competition
    The Exchange operates in a highly competitive market in which 
issuers can readily choose to list new securities on other exchanges 
and transfer listings to other exchanges if they deem fee levels at 
those other venues to be more favorable. Because competitors are free 
to modify their own fees in response, and because issuers may change 
their chosen listing venue, the Exchange does not believe its proposed 
fee change imposes any burden on intermarket 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) of the Act \12\ and paragraph (f) of Rule 19b-4 thereunder. 
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.
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    \12\ 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 email to rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2020-097 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-2020-097. 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-2020-097 and should be submitted 
on or before January 27, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-29221 Filed 1-5-21; 8:45 am]
BILLING CODE 8011-01-P