Notice2022-01969
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Listing Fees at Rule 5910(b) To Adopt a $15,000 All-Inclusive Annual Listing Fee Applicable to a Dually-Listed Company
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Published
February 1, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 21 (Tuesday, February 1, 2022)</title>
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[Federal Register Volume 87, Number 21 (Tuesday, February 1, 2022)]
[Notices]
[Pages 5552-5555]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-01969]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-94071; File No. SR-NASDAQ-2022-004]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the Exchange's Listing Fees at Rule 5910(b) To Adopt a $15,000
All-Inclusive Annual Listing Fee Applicable to a Dually-Listed Company
January 26, 2022.
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 January 13, 2022, 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 the Exchange's listing fees at Rule
5910(b) to insert language concerning a $15,000 annual listing fee
applicable to a Dually Listed Company, which was erroneously removed,
as described further below.
The text of the proposed rule change is detailed below: Proposed
new language is italicized and proposed deletions are in brackets.
* * * * *
The Nasdaq Stock Market Rules
* * * * *
5910. The Nasdaq Global Market (including the Nasdaq Global Select
Market)
(a) No change.
(b) All-Inclusive Annual Listing Fee
(1) No change.
(2)(A)-(F) No change.
(G) Dually-Listed Companies, whose securities are listed on the New
York Stock Exchange and designated as national market securities
pursuant to the plan governing New York Stock Exchange securities at
the time such securities are approved for listing on Nasdaq: $15,000.
Such fee shall be assessed on the first anniversary of the Company's
listing on Nasdaq, and annually thereafter on the anniversary of the
Company's listing. If an issuer of such securities ceases to maintain
its listing on the New York Stock Exchange that portion of the fee
described in this section attributable to the months following the date
of removal shall not be refunded, except if the securities remain
listed on the Nasdaq Global or Global Select Markets and are designated
as national market securities pursuant to the plan governing Nasdaq
securities such fee shall be applied to The Nasdaq Global Market All-
Inclusive Annual Listing Fee due for that calendar year.
(3) No change.
* * * * *
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/nasdaq/rules">https://listingcenter.nasdaq.com/rulebook/nasdaq/rules</a>, 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 purpose of the proposed rule change is to insert language
concerning the relevant all-inclusive annual fee applicable to the
listing of securities that are listed on the New York Stock Exchange
and designated as national market securities pursuant to the plan
governing New York Stock Exchange securities at the time such
securities are approved for listing on the Nasdaq Global or Global
Select Markets, and maintains such listing and designation after it
lists such securities on Nasdaq (``Dually-Listed Securities'').\3\ Such
[[Page 5553]]
language was erroneously deleted in a previous filing.\4\
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\3\ See Rules 5005(a)(11) (defining a Dually-Listed Security as
a security, listed on The Nasdaq Global Market or The Nasdaq Global
Select Market, which is also listed on the New York Stock Exchange).
As explained below, former Rule 5910(c)(5) described and set forth
the fees applicable to a Dually Listed Company but referenced only
The Nasdaq Global Market. Nasdaq proposes to clarify that a Dually
Listed Company may list on the Nasdaq Global or Global Select
Markets.
\4\ Securities Exchange Act Release No. 84634 (November 20,
2018), 83 FR 60522 (November 26, 2018) (SR-NASDAQ-2018-092) (The
``Annual Fee Transition Filing'').
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In 2014, Nasdaq adopted an all-inclusive annual listing fee
schedule to simplify, clarify and enhance transparency around the
annual fee to which listed companies are subject.\5\ The new annual fee
schedule became operative on January 1, 2015, and applied to all
companies listed after that date. Effective January 1, 2018, all
Nasdaq-listed companies became subject to the all-inclusive annual fee
schedule and the standard annual fee schedule ceased to have
applicability or effect for such companies.
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\5\ Securities Exchange Act Release No. 73647 (November 19,
2014), 79 FR 70232 (November 25, 2014) (SR-NASDAQ-2014-87).
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In 2018, Nasdaq eliminated expired and obsolete provisions in
connection with Nasdaq's completed transition to the all-inclusive
annual fee program.\6\ In the Annual Fee Transition Filing Nasdaq
deleted the language in former Rules 5910(c)-(f) and 5920(c)-(e) that
described and set forth the standard annual fee. However, former Rules
5910(c)(5) described and set forth the fees applicable to a company (i)
whose securities are listed on the New York Stock Exchange and
designated as national market securities pursuant to the plan governing
New York Stock Exchange securities at the time such securities are
approved for listing on Nasdaq, and (ii) that maintains such listing
and designation after it lists such securities on Nasdaq (a ``Dually
Listed Company''). The rule language further stated that if an issuer
of such securities ceases to maintain such listing and designation and
the securities are instead designated under the Rule 5400 Series, that
portion of the fee described in this section attributable to the months
following the date of removal shall not be refunded, except such fee
shall be applied to annual listing fee due for the calendar year of the
transfer. In lieu of the annual fees applicable to a Nasdaq-listed
company, a Dually Listed Company annual fee was set at $15,000 per
year. Such annual fee was set to be assessed on the first anniversary
of the Company's listing on Nasdaq.\7\ While not identical to the
current all-inclusive annual listing fee schedule, this provision was
similar in that companies also were not subject to fees for listing
additional shares or for substitution listing events.\8\ The companies
were still subject to fees in relation to request for written
interpretation, compliance plan review and record-keeping. The
foregoing fees are included in the all-inclusive annual fees and Dually
Listed Companies will pay only a single annual fee to Nasdaq, which
includes all the ordinary costs of listing for the year.\9\
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\6\ The Annual Fee Transition Filing, supra note 4.
\7\ Former Rule 5920(c)(8) also included similar language about
the fee for a Dually Listed Company on the Nasdaq Capital Market.
However, under Rule 5005(a)(11) and IM-5220 companies are not (and
were not previously) permitted to dually list on the Nasdaq Capital
Market. As such this Capital Market fee was inapplicable to any
companies and its deletion was appropriate.
\8\ See former Rule 5910(b)(5) and 5910(f).
\9\ See former Rules 5602, 5810(c) and 5910(e). In Nasdaq's
experience, Dually Listed Companies are, typically, established
companies that are used to being a public company and familiar with
the exchanges' requirements thus rarely having a need to pay for
written interpretation, compliance plan review and record-keeping
fees.
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Nasdaq believes it is appropriate to maintain the $15,000 fee on an
all-inclusive basis because it is not the primary listing venue for
such companies. The Dual Listing program was originally designed, and
continues to operate, to encourage NYSE-listed companies to compare
services provided by Nasdaq and NYSE without creating undue burden by
assessing duplicated fees. As required by Listing Rules, Nasdaq
monitors Dually Listed Companies for compliance with the Nasdaq listing
standards. In that regard, based on Nasdaq's experience, Dually Listed
Companies require less time and effort to review and to ensure
compliance because they seldom involve time-consuming regulatory
issues. This is, in part, due to the fact that NYSE listed companies
are already subject to the ongoing scheme of regulation by the NYSE
that is fairly similar to the Nasdaq's regulation regime.
Notwithstanding the similarities in regulatory regimes, the Dual
Listing program increases the regulatory burden on a listed company, in
part, by subjecting it to both the NYSE's and Nasdaq's corporate
governance regulations. As a result, the program targets bigger and
better established companies that are used to being a public company
and can afford a moderate increase in the regulatory burden. Nasdaq
believes that these larger companies will pay higher listing fees if
and when they become listed exclusively on Nasdaq and become subject to
the fee schedule applicable to Nasdaq listed companies thereby making
their listing more valuable to Nasdaq. Nasdaq also believes that
inducing these companies to compare services provided by Nasdaq and the
NYSE, may encourage these companies to list exclusively on Nasdaq and
to provide its listing market broader benefits from attracting the
larger, better known companies that are listed on the NYSE.
Accordingly, given the competitive nature of the dual listing program
and the potential benefits it may bring to Nasdaq and its listing
market, Nasdaq believes it is reasonable to set the all-inclusive
annual fee for Dually Listed Companies at $15,000.
Absent this provision, a Dually Listed Company would be subject to
the typical all-inclusive annual listing fee, which is higher than
$15,000.\10\ Nasdaq did not intend to subject the Dually Listed
Companies to the all-inclusive annual listing fee applicable to other
companies. Accordingly, Nasdaq now proposes to insert language, similar
to the language covering annual fees paid by Dually Listed Companies
that was erroneously removed, by adding proposed Rule 5910(b)(2)(G)
setting the all-inclusive annual fee for Dually Listed Companies, which
now covers fees for written interpretation, compliance plan review and
record-keeping fees, previously not covered as explained above, at
$15,000.
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\10\ Under Rule 5910(b)(2)(A) the minimum all-inclusive annual
fee for most companies is $48,000.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\11\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\12\ 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, will promote just and equitable principles of trade, and will
remove impediments to and perfect the mechanism of a free and open
market and a national market system, and is not designed to permit
unfair discrimination between customers, issuers, brokers, or dealers.
The proposed rule will insert language concerning the $15,000 annual
listing fee applicable to a Dually Listed Company, which Nasdaq
erroneously deleted, while also making this fee an all-inclusive fee,
which now covers fees for written interpretation, compliance plan
review and record-keeping fees, previously not covered as explained
above. The Commission previously approved the $15,000 annual fee
applicable to a Dually Listed Company, and the manner in which it is
assessed,
[[Page 5554]]
and found it consistent with requirements of the Act that rules provide
for equitable allocation of reasonable fees and not be designed to
permit unfair discrimination between issuers.\13\ There has been no
changes to the objectives of the Dual Listing program since Nasdaq
adopted the all-inclusive annual listing fee schedule for companies,
and the NYSE annual fee schedule has been changing to accommodate the
shifts in the competitive landscape.\14\ Nasdaq believes that, to
maintain consistency with the original objective of the Dual Listing
program, the annual listing fee assessed towards Dually Listed
Companies, noting the fact that they are paying the fees to the NYSE,
should remain the same as previously adopted, although now covering
fees for written interpretation, compliance plan review and record-
keeping fees, previously not covered as explained above. The erroneous
removal of language describing the fee, resulting in the need for this
rule filing to reinsert it, does not change that conclusion.\15\
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(4) and (5).
\13\ Securities Exchange Act Release No. 51005 (January 10,
2005), 70 FR 2917 (January 18, 2005) (SR-NASD-2004-142, approving
the predecessor NASD rule), 70 FR 2917 (January 18, 2005) (the
``Approval Order''). This finding was under Section 15A(b)(5) and
(6) of the Act, which applied to Nasdaq at the time as a facility of
the NASD.
\14\ See Securities Exchange Act Release No. 93862 (December 22,
2021), 86 FR 74198 (December 29, 2021) (SR-NYSE-2021-76).
\15\ Although the all-inclusive annual fee for Dually Listed
Companies will now include some additional services for the same
$15,000 annual fee, Nasdaq notes that Dually Listed Companies,
typically, do not use these services. See footnote 9 above.
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Nasdaq believes it is appropriate and not unfairly discriminatory
to maintain the $15,000 fee on an all-inclusive basis because Nasdaq is
not the primary listing venue for such companies. The Dual Listing
program is designed to encourage NYSE-listed companies to compare
services provided by Nasdaq and the NYSE without creating undue burden
by assessing duplicated fees. Based on Nasdaq's experience, Dually
Listed Companies require less time and effort to review and to ensure
compliance because they seldom involve time-consuming regulatory
issues. This is, in part, due to the fact that NYSE listed companies
already are, and, typically, have been subject to the ongoing scheme of
regulation by the NYSE that is fairly similar to the Nasdaq's
regulation regime.
Notwithstanding the similarities in regulatory regimes, the Dual
Listing program increases the regulatory burden on a listed company, in
part, by subjecting it to both NYSE and Nasdaq corporate governance
regulations. As a result, the program targets bigger and better
established companies that are used to being a public company and can
afford the increased regulatory burden. Nasdaq believes that these
larger companies will pay higher listing fees if and when they become
listed exclusively on Nasdaq and become subject to the fee schedule
applicable to Nasdaq listed companies thereby making their listing more
valuable to Nasdaq. Nasdaq also believes that inducing these companies
to compare services provided by Nasdaq and the NYSE, may encourage
these companies to list exclusively on Nasdaq and to provide its
listing market broader benefits from attracting the larger, better
known companies that are listed on the NYSE.
Finally, Nasdaq believes that the proposal does not result in
unfair discrimination by offering its program only to companies already
listed on the NYSE, and not on other exchanges, because Nasdaq believes
attracting the NYSE-listed companies will bring greater future value to
Nasdaq.
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 but instead will reinstate a
portion of the fee schedule that was erroneously deleted.
Nasdaq's dual listing program is designed to allow issuers to
undertake focused comparison of the services and market quality offered
by Nasdaq and NYSE, with the explicit goal to encourage eventual switch
of companies that dual list. Without a lower annual fee, an NYSE-listed
company would be unlikely to choose to dually list its securities,
either initially or on an ongoing basis. Accordingly, reinstituting the
proposed fee would promote competition among listing markets.\16\
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\16\ Nasdaq believes that national securities exchanges other
than the NYSE do not have established listing programs that attract
marquee operating companies and therefore the dually listed program
will not have any competitive impact on such exchanges because the
goal of the program is to allow an established exchange-listed
company to compare services provided by Nasdaq with those it already
receives.
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The lower fees on Dually Listed Companies also will not burden
competition between Dually Listed Companies and other companies listing
on Nasdaq. The lower fee reflects that Dually Listed Companies are also
subject to ongoing fees to the NYSE. In the Approval Order, the
Commission found the fees applicable to Dually Listed Companies
consistent with the requirements of the Act, and noted that ``[w]ithout
this program, it is unlikely that an issuer would choose to dually list
its securities'' and expressed its believe that ``competition among
listing markets has the potential to benefit the public, issuers, and
the listing markets.''
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.\17\
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\17\ 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
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#5f2d2a333a723c3032323a312b2c1f2c3a3c71383029"><span class="__cf_email__" data-cfemail="fd8f889198d09e9290909893898ebd8e989ed39a928b">[email protected]</span></a>. Please include
File Number SR-NASDAQ-2022-004 on the subject line.
Paper Comments
<bullet> 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-2022-004. 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/
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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-2022-004, and should
be submitted on or before February 22, 2022.
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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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-01969 Filed 1-31-22; 8:45 am]
BILLING CODE 8011-01-P
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