Document ID: SEC-2013-0141-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2013-01-23T05:00Z

[Federal Register Volume 78, Number 15 (Wednesday, January 23, 2013)]
[Notices]
[Pages 4908-4910]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-01245]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68677; File No. SR-NASDAQ-2013-003]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Increase the Record-Keeping and Substitution Listing Fees Payable by 
Companies Listed on Nasdaq

January 16, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on January 2, 2013, 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 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 is proposing to modify the record-keeping and substitution 
listing fees payable by companies listed on Nasdaq. While changes 
pursuant to this proposal are effective upon filing, the Exchange will 
implement the proposed rule on January 2, 2013.
    The text of the proposed rule change is below. Proposed new 
language is italicized; 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://nasdaqomx.cchwallstreet.com.
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* * * * *

5910. The [NASDAQ] Nasdaq Global Market

    (a)-(d) No change.
    (e) Recordkeeping Fee.
    A Company that makes a change such as a change to its name, the par 
value or title of its security, or its symbol shall pay a fee of 
[$2,500] $7,500 to Nasdaq and submit the appropriate form as designated 
by Nasdaq.
    (f) Substitution Listing Fee
    A Company that implements a Substitution Listing Event shall pay a 
fee of [$7,500] $15,000 to Nasdaq and submit the appropriate form as 
designated by Nasdaq. Notwithstanding the foregoing, this substitution 
listing fee shall not apply to securities that are listed on a national 
securities exchange other than Nasdaq and not designated by Nasdaq as 
Nasdaq national market system securities.

5920. The Nasdaq Capital Market

    (a)-(c) No change.
    (d) Record-Keeping Fee
    A Company that makes a change such as a change to its name, the par 
value or title of its security, or its symbol shall pay a fee of 
[$2,500] $7,500 to Nasdaq and submit the appropriate form as designated 
by Nasdaq.
    (e) Substitution Listing Fee
    A Company that implements a Substitution Listing Event shall pay a 
fee of [$7,500] $15,000 to Nasdaq and submit the appropriate form as 
designated by Nasdaq. Notwithstanding the foregoing, this substitution 
listing fee shall not apply to securities that are listed on a national 
securities exchange other than Nasdaq and not designated by Nasdaq as 
Nasdaq national market system securities.
* * * * *

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. 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
    Nasdaq proposes to modify the fees charged to Nasdaq-listed 
companies for record-keeping changes and substitution listings. 
Currently, a company owes a $2,500 record-keeping fee when it makes a 
change to its name, the par value or title of its security, or its 
symbol.\4\ This fee was adopted in 2003 and has never been changed.\5\ 
Nasdaq proposes to increase this record-keeping fee to $7,500, for 
notifications made after January 2, 2013.
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    \4\ See Rule 5910(e) and 5920(d).
    \5\ Securities Exchange Act Release No. 48631 (October 15, 
2003), 68 FR 60426 (October 22, 2003) (approving SR-NASD-2003-127).
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    In addition, a company currently owes a $7,500 substitution listing 
fee when it affects a reverse stock split, re-incorporation or a change 
in the company's place of organization, forms a holding company that 
replaces the listed company, reclassifies or exchanges the company's 
listed shares for another security, lists a new class of securities in 
substitution for a previously-listed class of securities, or makes any 
technical change whereby the shareholders of the original company 
receive a share-for-share interest in the new company without any 
change in their equity position or rights.\6\ This fee was adopted in 
2005 and has never been changed.\7\ Nasdaq proposes to increase this 
substitution listing fee to $15,000, for notifications made after 
January 2, 2013.
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    \6\ See Rules 5910(d) and 5920(c) [sic] and Rule 5005(a)(40).
    \7\ Securities Exchange Act Release No. 52712 (November 1, 
2005), 70 FR 67511 (November 7, 2005) (approving SR-NASD-2004-162).
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    Nasdaq also proposes to correct capitalization in the heading of 
Rule 5910 to be consistent with the capitalization used in the 
remainder of the Rule 5000 Series.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\8\ in general and with Sections 
6(b)(4) and 6(b)(5) of the Act,\9\ in particular in that it provides 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members, issuers and other persons using its 
facilities and does not unfairly discriminate between customers, 
issuers, brokers or dealers.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4) and (5).
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    Nasdaq believes that the proposed fees are reasonable because they 
will reflect Nasdaq's higher costs related to processing record keeping 
changes and substitution listings since the fees were set in 2003 and 
2005, respectively. In that regard, Nasdaq notes that expenses 
surrounding the processing and distribution of these changes, including 
technology costs and salaries, have increased since the fees were set, 
but that the fees have not been concomitantly increased. In addition, 
Nasdaq has developed an electronic notification system for listed 
companies and expects to launch early in 2013 an

[[Page 4909]]

interface allowing companies to notify Nasdaq about these changes 
through an on-line portal.\10\ This web-based interface will simplify 
the notification process for the company and help eliminate errors that 
may otherwise have resulted from re-keying information. While over 
time, Nasdaq hopes that this technology will reduce the costs 
associated with maintaining the process, Nasdaq has invested 
significant up-front development costs in creating the system. Nasdaq 
has also committed resources to its online reference library, which 
includes a number of FAQs providing advice about these changes and the 
related forms and fees.\11\
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    \10\ See the NASDAQ OMX Listing Center at 
https:[sol][sol]listingcenter.nasdaqomx.com/Show--
Doc.aspx?File=listing--information.html#forms. While the Change in 
Company Record and Substitution Listing Event forms are currently 
available as pdfs, which have to be emailed to Nasdaq, they are 
being converted into online forms, which can be completed and 
submitted to Nasdaq electronically.
    \11\ https:[sol][sol]listingcenter.nasdaqomx.com/
MaterialHome.aspx?mcd=LQ.
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    Nasdaq also believes that the proposed changes are equitable and 
not unfairly discriminatory because they would apply equally to all 
companies listed on Nasdaq that effect one of these changes. In this 
manner, the proposed fees will help assure that the expenses arising 
from changes initiated by certain companies are borne by those 
companies.
    Finally, NASDAQ notes that it operates in a highly competitive 
market in which market participants can readily switch exchanges if 
they deem the listing fees excessive.\12\ In such an environment, 
NASDAQ must continually review its fees to assure that they remain 
competitive. In that regard, Nasdaq notes that the proposed fees remain 
similar to the fees charged by the New York Stock Exchange.\13\
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    \12\ The Justice Department recently noted the intense 
competitive environment for exchange listings. See ``NASDAQ OMX 
Group Inc. and IntercontinentalExchange Inc. Abandon Their Proposed 
Acquisition Of NYSE Euronext After Justice Department Threatens 
Lawsuit'' (May 16, 2011), available at 
http:[sol][sol]www.justice.gov/atr/public/press_releases/2011/
271214.htm.
    \13\ NYSE charges $7,500 for ``changes that involve 
modifications to [NYSE] records, for example, changes of name, par 
value, title of security or designation, and for applications 
relating to poison pills.'' See Section 902.03 of the NYSE Listed 
Company Manual and Securities Exchange Act Release No. 68024 
(October 10, 2012), 77 FR 63388 (October 16, 2012) (SR-NYSE-2012-
51). In addition, NYSE charges $15,000 for a new listing where the 
``change in the company's status is technical in nature and the 
shareholders of the original company receive or retain a share-for-
share interest in the new company without any change in their equity 
position or rights.'' These changes include a change in a company's 
state of incorporation or a reincorporation or formation of a 
holding company that replaces a listed company, and a reverse stock 
split. See Section 902.03 of the NYSE Listed Company Manual.
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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. In addition, Nasdaq's proposed fees 
are similar to the fees charged by its competitors. For this reason, 
and the reasons discussed in connection with the statutory basis for 
the proposed rule change, 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.\14\ 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. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule should be approved or disapproved.
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    \14\ 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-2013-003 on the subject line.

[[Page 4910]]

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2013-003. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NASDAQ-2013-003 and should 
be submitted on or before February 13, 2013.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-01245 Filed 1-22-13; 8:45 am]
BILLING CODE 8011-01-P