Document ID: SEC-2021-1124-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Nasdaq Stock Market, LLC
Posted Date: 2021-08-19T04:00Z

[Federal Register Volume 86, Number 158 (Thursday, August 19, 2021)]
[Notices]
[Pages 46744-46746]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-17761]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92663; File No. SR-NASDAQ-2021-061]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Listing Rule 5910 To Modify the Application Fee for Companies 
Listing Under IM-5101-2

August 13, 2021.
    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 August 3, 2021, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``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 amend Listing Rule 5910 to modify the 
application fee for companies listing under IM-5101-2 (companies whose 
business plan is to complete one or more acquisitions) on the Nasdaq 
Global Market.
    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
    Nasdaq proposes to revise the application fee payable by 
Acquisition Companies listing on the Nasdaq Global Market to make it 
the same as the application fee payable by Acquisition Companies 
listing on the Nasdaq Capital Market, as described in more details 
below.
    Historically, 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'') would choose to 
list on the Nasdaq Capital Market instead of the Nasdaq Global Market, 
primarily because it had lower fees. Recently Nasdaq modified the Entry 
and All-Inclusive Annual Listing Fees for Acquisition Companies listing 
on the Nasdaq Global Market.\3\ As a result, the Entry and All-
Inclusive Annual Listing Fees for Global Market Acquisition Companies 
are currently identical to the fees charged to Capital Market 
Acquisition Companies.
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    \3\ Securities Exchange Act Release No. 92345 (July 7, 2021), 86 
FR 36807 (July 13, 2021).
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    A company applying to list on Nasdaq is required to submit a non-
refundable initial application fee with its application, which is 
subsequently credited towards the Entry Fee payable upon listing. A 
company listing on the Global Market is required to submit a non-
refundable $25,000 initial application fee, whereas the application fee 
on the Capital Market is $5,000.\4\
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    \4\ See Listing Rules 5910(a)(11) and 5920(a)(11).
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    Nasdaq proposes to revise the application fee for Acquisition 
Companies listing on the Nasdaq Global Market to make it the same as 
the application fee Acquisition companies pay on the Capital Market.
    Nasdaq has limited resources and charges companies applying to list 
on Nasdaq an application fee to offset the cost of conducting its 
regulatory review in connection with the initial listing of the 
company. As explained above, the application fee is subsequently 
credited towards the Entry Fee payable upon listing. In Nasdaq's 
experience, conducting an initial listing review for an Acquisition 
Company is less costly than conducting an initial listing review for 
other types of companies for a number of reasons. Specifically, review 
of an Acquisition Company's IPO application is generally much simpler

[[Page 46745]]

and quicker than an application of an operating company because an 
Acquisition Company has no underlying operating business. For the same 
reason, an Acquisition Company's SEC filings and IPO documentation are 
much less detailed and its financial statements are simple and do not 
have historical financials. An Acquisition Company's registration 
statement does not have an operating business to describe and has no 
risk factors related to an operating business. Further, Acquisition 
Companies always qualify as Emerging Growth Companies under Section 
2(a)(19) of the Securities Act, which results in scaled requirements 
for narrative disclosure and financial reporting.
    Accordingly, Nasdaq believes it is appropriate to charge 
Acquisition Companies listing on the Global Market a smaller 
application fee than the fee applicable to operating companies. Nasdaq 
notes that, as described above, the application fee is a part of the 
Entry Fee, and therefore, the overall Entry Fee payable by an 
Acquisition Company listing on Nasdaq remains unchanged under this 
proposal. Accordingly, this proposal has no financial impact on the 
level of listing fees collected from issuers that list on Nasdaq and 
thus has no impact the Exchange's resource commitment to its regulatory 
oversight of the listing process or its regulatory programs.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\5\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\6\ 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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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4) and (5).
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    As a preliminary matter, Nasdaq competes for listings with other 
national securities exchanges and companies can easily choose to list 
on, or transfer to, those alternative venues. As a result, the fees 
Nasdaq can charge listed companies are constrained by the fees charged 
by its competitors and Nasdaq cannot charge prices in a manner that 
would be unreasonable, inequitable, or unfairly discriminatory.\7\
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    \7\ In that regard, Nasdaq notes that while the New York Stock 
Exchange charges most companies an Initial Application Fee of 
$25,000 in connection with applying to list an equity security, 
Acquisition Companies are not subject to the Initial Application 
Fee. See Sections 902.03 and 902.11 of the NYSE Listed Company 
Manual.
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    The proposal is being implemented to avoid charging a higher 
application fee to an Acquisition Company that is listing on the Nasdaq 
Global Market over what such company is required to pay when applying 
to list on the Capital Market. As a result of a recent rule change, the 
Entry and All-Inclusive Annual Listing Fees for Global Market 
Acquisition Companies are currently identical to the fees charged 
Capital Market Acquisition Companies.\8\ This proposal would fully 
equalize listing fees and the timing of paying such fees for 
Acquisition Companies listing on the Capital and Global Markets. Nasdaq 
believes it is equitable under Section 6(b)(4) of the Act \9\ to charge 
Global Market Acquisition Companies the same application fee as Capital 
Market Acquisition Companies given that they are treated the same, and 
their applications are no more complicated, regardless of whether they 
are applying to list on the Global or Capital Market.
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    \8\ Securities Exchange Act Release No. 92345 (July 7, 2021), 86 
FR 36807 (July 13, 2021).
    \9\ 15 U.S.C. 78f(b)(4).
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    Moreover, the Exchange believes that it is not unfairly 
discriminatory to charge Acquisition Companies application fee 
different from the fee applicable to operating companies listing on the 
Global Market, because Acquisition Companies differ in some important 
respects from traditional operating companies and such differences make 
it less costly for Nasdaq to conduct an initial listing review. 
Specifically, an Acquisition Company's IPO process is generally much 
simpler and quicker than a regular IPO because an Acquisition Company 
has no underlying operating business. For the same reason, an 
Acquisition Company's SEC filings and IPO documentation, including its 
financial statements, are simple and do not have historical discussions 
or financials. An Acquisition Company's registration statement does not 
have an operating business to describe and has no risk factors related 
to an operating business. Further, Acquisition Companies always qualify 
as Emerging Growth Companies under Section 2(a)(19) of the Securities 
Act which results in scaled requirements for narrative disclosure and 
financial reporting. Therefore, Nasdaq believes that it is appropriate, 
and not unfairly discriminatory, to charge lower application fee to 
Global Market Acquisition Companies than application fee that are 
charged to operating companies listed on the Nasdaq Global Market.
    For the foregoing reasons, the Exchange believes that the proposal 
is consistent with the Act.

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 proposed modified application fee will be applicable to all 
similarly situated issuers on the same basis and will eliminate an 
existing distinction between Acquisition Companies listing on the 
Capital and Global Markets. The Exchange does not believe that the 
proposed fees will have any meaningful effect on the competition among 
issuers listed on the Exchange.
    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 listing venue, the Exchange does not believe its proposed fee 
change can impose any burden on intermarket competition. In that 
regard, Nasdaq notes that while the New York Stock Exchange charges 
most companies an Initial Application Fee of $25,000 in connection with 
applying to list an equity security, Acquisition Companies are not 
subject to the Initial Application Fee.\10\
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    \10\ See Sections 902.03 and 902.11 of the NYSE Listed Company 
Manual.
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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.\11\
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    \11\ 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

[[Page 46746]]

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 rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2021-061 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-2021-061. 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-2021-061 and should be submitted 
on or before September 9, 2021.
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    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-17761 Filed 8-18-21; 8:45 am]
BILLING CODE 8011-01-P