Document ID: SEC-2010-0578-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2010-04-19T04:00Z

[Federal Register: April 19, 2010 (Volume 75, Number 74)]
[Notices]               
[Page 20415-20417]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19ap10-102]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61887; File No. SR-NASDAQ-2010-041]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Make Conforming Changes to Certain Notification Requirements

April 12, 2010.
    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 March 26, 2010, The NASDAQ Stock Market LLC (``Nasdaq'') 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 Nasdaq. Nasdaq has designated the proposed rule change as 
effecting a change described under Rule 19b-4(f)(6) under the Act,\3\ 
which renders the proposal effective upon filing with the Commission. 
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.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    Nasdaq proposes to modify the Listing Rules to make conforming 
changes to certain notification requirements.
    The text of the proposed rule change is below. Proposed new 
language is in italic; proposed deletions are in [brackets].\4\
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    \4\ Changes are marked to the rule text that appears in the 
electronic manual of Nasdaq found at http://
nasdaq.cchwallstreet.com.
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5250. Obligations for Companies Listed on The Nasdaq Stock Market
    (a) No change.
    (b) Obligation to Make Public Disclosure
    (1) No change.
    (2) As set forth in Rule 5810(b), a Company that receives a 
notification of deficiency from Nasdaq is required to make a public 
announcement by filing a Form 8-K, where required by SEC rules, or by 
issuing a press release disclosing receipt of the notification and the 
Rule(s) upon which the deficiency is based. However, note that in the 
case of a deficiency related to the requirement to file a periodic 
report contained in Rule 5250(c)(1) or (2), the Company is required to 
make the public announcement by issuing a press release. As described 
in Rule 5250(b)(1) and IM-5250-1, [notice to the] the Company must 
notify Nasdaq's MarketWatch Department [must be made] about the 
announcement through the electronic disclosure submission system 
available at www.nasdaq.net, except in emergency situations when 
notification may instead be provided by telephone or facsimile. If the 
public announcement is made during Nasdaq market hours, the Company 
must notify MarketWatch at least ten minutes prior to the [public] 
announcement. If the public announcement is made outside of Nasdaq 
market hours, the Company must notify MarketWatch of the announcement 
prior to 6:50 a.m. ET.
    (c)-(f) No change.
* * * * *
5810. Notification of Deficiency by the Listing Qualifications 
Department
    When the Listing Qualifications Department determines that a 
Company does not meet a listing standard set forth in the Rule 5000 
Series, it will immediately notify the Company of the deficiency. As 
explained in more detail below, deficiency notifications are of four 
types:
    (1)-(4) No change.
    Notifications of deficiencies that allow for submission of a 
compliance plan or an automatic cure or compliance period may result, 
after review of the compliance plan or expiration of the cure or 
compliance period, in issuance of a Staff Delisting Determination or a 
Public Reprimand Letter.
    (a) No change.
    (b) Company Disclosure Obligations
    A Company that receives a notification of deficiency, Staff 
Delisting Determination, or Public Reprimand Letter is required to make 
a public announcement disclosing receipt of the notification and the 
Rule(s) upon which the deficiency is based. A Company that receives a 
notification of deficiency or Staff Delisting Determination related to 
the requirement to file a periodic report contained in Rule 5250(c)(1) 
or (2) is required to make the public announcement by issuing a press 
release disclosing receipt of the notification and the Rule(s) upon 
which the deficiency is based, in addition to filing any Form 8-K 
required by SEC rules. In all other cases, the Company may make the 
public announcement either by filing a Form 8-K, where required by SEC 
rules, or by issuing a press release. [Before release of the public 
announcement, Companies must provide a copy of the announcement to 
Nasdaq's MarketWatch Department.] As described in Rule 5250(b)(1) and 
IM-5250-1, [notice to the] the Company must notify Nasdaq's MarketWatch 
Department [must be made] about the announcement through the electronic 
disclosure submission system available at www.nasdaq.net, except in 
emergency situations when notification may instead be provided by 
telephone or facsimile. If the public announcement is made during 
Nasdaq market hours, the Company must notify MarketWatch at least ten 
minutes prior to the [public] announcement. If the public announcement 
is made outside of Nasdaq market hours, the Company must notify 
MarketWatch of the announcement prior to 6:50 a.m. ET. The Company 
should make the public announcement as promptly as possible but not 
more than four business days following receipt of the notification.
    (c)-(d) No change.
* * * * *
5840. Adjudicatory Process: General Information
    (a)-(j) No change.
    (k) Disclosure of Public Reprimand Letter
    A Company that receives an Adjudicatory Body Decision that serves 
as a Public Reprimand Letter must make a public announcement by filing 
a Form 8-K, where required by SEC rules, or by issuing a press release 
disclosing the receipt of the Decision, including the Rule(s) upon 
which the Decision was based. [Prior to the release of the public 
announcement, the Company must provide such disclosure to Nasdaq's 
MarketWatch Department.] As described in Rule 5250(b)(1) and IM-5250-1, 
[notice to the] the Company must notify Nasdaq's MarketWatch Department 
[must be made] about the announcement through the electronic disclosure 
submission system available at www.nasdaq.net, except in emergency 
situations when notification may instead be provided by telephone or 
facsimile. If the public announcement is made during Nasdaq market 
hours, the Company must notify MarketWatch at least ten minutes prior 
to the [public] announcement. If the public announcement is made 
outside of Nasdaq market hours, the Company must notify MarketWatch of 
the announcement prior to 6:50 a.m. ET. The Company should make the 
public announcement [should be made] as

[[Page 20416]]

promptly as possible[,] but not more than four business days following 
receipt of the Decision.
* * * * *

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, Nasdaq 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. Nasdaq 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 recently adopted changes to certain of its press release 
requirements for Nasdaq-listed companies (the ``Press Release 
Filing'').\5\ Subsequent to Nasdaq's filing and the Commission's 
publication of this proposal,\6\ Nasdaq made an immediately effective 
change to its rules to clarify when listed companies must provide 
notification to Nasdaq of material information disclosed outside of 
market hours.\7\ As revised, when the material information is made 
public outside of Nasdaq market hours, Nasdaq companies must provide 
notification of the information to MarketWatch by 6:50 a.m. ET. Nasdaq 
proposes to make conforming changes to the rules modified in the Press 
Release Filing, such that Rules 5250(b)(2), 5810(b) and 5840(k) would 
each specify that if a required public announcement is made during 
market hours, the company must notify Nasdaq's MarketWatch Department 
at least ten minutes prior to making the announcement to the public; 
otherwise the company must notify the MarketWatch Department prior to 
6:50 am ET. Nasdaq also proposes to clarify that companies are not 
required to use the electronic disclosure submission system to notify 
MarketWatch in emergency situations, when notification may instead be 
provided by telephone or facsimile.\8\ Finally, Nasdaq proposes to make 
other non-substantive changes to these rules so that they each use 
consistent language.
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    \5\ Securities Exchange Act Release No. 61713 (March 15, 2010), 
75 FR 13629 (March 22, 2010) (SR-NASDAQ-2010-006).
    \6\ Securities Exchange Act Release No. 61461 (February 1, 
2010), 75 FR 6241 (February 8, 2010) (SR-NASDAQ-2010-006).
    \7\ Securities Exchange Act Release No. 61521 (February 16, 
2010), 75 FR 8156 (February 23, 2010) (SR-NASDAQ-2010-008).
    \8\ IM-5250-1 already provides that companies do not have to use 
the electronic disclosure submission system in an emergency 
situation and provides examples of emergency situations, such as the 
lack of computer or internet access, technical problems, and cases 
where no draft disclosure document is available.
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2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\9\ in general and with Sections 
6(b)(5) of the Act,\10\ in particular in that it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, 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. The proposed change will 
conform Nasdaq's notification requirements in the rules amended in the 
Press Release Filing with Nasdaq's notification requirements for the 
disclosure of material information, thereby reducing confusion among 
listed companies and investors.
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    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(5).
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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.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the proposed rule change: (i) Does not significantly affect 
the protection of investors or the public interest; (ii) does not 
impose any significant burden on competition; and (iii) does not become 
operative for 30 days after the date of the filing, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest, the proposed rule change has 
become effective pursuant to Section 19(b)(3)(A) of the Act \11\ and 
Rule 19b-4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6). Pursuant to Rule 19b-4(f)(6)(iii) 
under the Act, the Exchange is required to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \13\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \14\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has requested that the Commission waive the 30-day operative delay.
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes that waiver of the operative delay is 
consistent with the protection of investors and the public interest 
because the proposed rule change would merely conform Rules 5250(b)(2), 
5810(b) and 5840(k) to the notification requirements when companies 
release material information outside of market hours in Nasdaq's other 
rules,\15\ thereby reducing company and investor confusion. As such, 
the Commission believes that the proposed rule change raises no new 
regulatory issues. Additionally, Nasdaq's clarification that in 
emergencies, companies are not required to notify MarketWatch through 
the electronic disclosure system but may do so via telephone or 
facsimile aligns the rules to the existing requirements of Nasdaq Rule 
5250(b)(1) and IM-5250-1, further reducing confusion for companies.\16\ 
For these reasons, the Commission designates that the proposed rule 
change become operative immediately upon filing.\17\
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    \15\ See Nasdaq Rule 5250(b)(1) and IM-5250-1.
    \16\ See supra note 8.
    \17\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate the 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.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing,

[[Page 20417]]

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 e-mail to rule-comments@sec.gov. Please include 
File No. SR-NASDAQ-2010-041 on the subject line.

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 No. SR-NASDAQ-2010-041. This file 
number should be included on the subject line if e-mail 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 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of NASDAQ. 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 No. SR-NASDAQ-2010-041 and should be 
submitted on or before May 10, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-8947 Filed 4-16-10; 8:45 am]
BILLING CODE 8011-01-P