Notice2024-14377
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Reconfigure Fees for the Daily List and Fundamental Data to Better Reflect the Value of the Information Distributed
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 1, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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[Federal Register Volume 89, Number 126 (Monday, July 1, 2024)]
[Notices]
[Pages 54545-54550]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-14377]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100416; File No. SR-NASDAQ-2024-027]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Reconfigure Fees for the Daily List and Fundamental Data to Better
Reflect the Value of the Information Distributed
June 25, 2024.
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 June 17, 2024, 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 reconfigure fees for the Daily List and
Fundamental Data to better reflect the value of the information
distributed.
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
Nasdaq proposes to reconfigure fees for the Daily List,\3\ its
corporate actions product,\4\ to better reflect the value of the
information distributed.\5\
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\3\ See Equity 7, Section 122. The information contained in the
Daily List includes information about the corporate actions of
issuers (such as dividends, stock splits, and mergers and
acquisitions), execution of corporate actions by the Exchange (such
as execution dates and symbol changes), and information about issuer
status.
\4\ Corporate actions are undertakings by issuers that
materially impact the value of their shares, such as, for example,
the payment of dividends, stock splits, tender offers, or a merger
and acquisition.
\5\ This proposal was first submitted on June 3, 2024. See SR-
Nasdaq-2024-024. On June 17, 2024, that filing was withdrawn and
replaced with the instant filing to provide additional information
in support of the proposal.
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First, Nasdaq proposes to increase the licensing fee for the Daily
List, which also includes Fundamental Data, from $1,750 to $3,500 per
month to better reflect its market value. Current fees for the Daily
List are below the range of fees for other corporate actions products,
none of which, except for the Daily List, are subject to the fee filing
requirements that apply to Self-Regulatory Organizations (``SROs'').\6\
Current fees for comparable products are between $3,000 and $12,000 per
month or more; the proposal will raise Daily List fees from below that
range to within the range, at its lower end.\7\
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\6\ As discussed in further detail below, the New York Stock
Exchange sells a corporate actions product, but does not file SRO
fees for that product. See New York Stock Exchange, Corporate
Actions, available at <a href="https://www.nyse.com/market-data/corporate-actions">https://www.nyse.com/market-data/corporate-actions</a>. NYSE also publishes information related to the execution of
corporate actions on a public website, as Nasdaq proposes to do with
this filing. The remaining vendors that offer corporate actions
products are not SROs.
\7\ As discussed below, this estimate is based on Nasdaq's
understanding of the market, as none of the competitor products have
published fee schedules.
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Second, together with the proposed rule change, the Exchange will
publish information about the execution of corporate actions by the
Exchange, as well as information related to issuer status under
Exchange rules, on <a href="http://NasdaqTrader.com">NasdaqTrader.com</a> or a successor website, at the same
time as such information is updated on the Daily List. The dual
publication of information on a public website and a corporate actions
product is the same
[[Page 54546]]
two-part structure used by the New York Stock Exchange, which does not
file the fees for its corporate actions product as an SRO.\8\
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\8\ NYSE publishes information on exchange implementation of
corporate actions on two different web pages, one for corporate
actions (NYSE Corporate Actions) and another for ex-date dividends
(NYSE Ex-Date Dividends).
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Publication of information about the execution of corporate actions
and corporate status by the Exchange on an open website will not
require a rule change. Nasdaq already publishes information concerning
certain corporate actions on <a href="http://NasdaqTrader.com">NasdaqTrader.com</a>, such as Market Center
and financial status, and this change will simply add to the
information made available to the public.
The Daily List
The Daily List is a compendium of corporate actions information--
including new listings, delistings, symbol name changes, dividends, and
other information for the Nasdaq Stock Market.\9\ It is comprised of
the following sets of information: \10\
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\9\ See Nasdaq, Daily List, available at <a href="http://www.nasdaqtrader.com/Trader.aspx?id=DailyListPD">http://www.nasdaqtrader.com/Trader.aspx?id=DailyListPD</a>; see also Securities
Exchange Act Release No. 68636 (January 11, 2013), 78 FR 3940
(January 17, 2013) (SR-Nasdaq-2013-009) (establishing fees for the
Daily List and Fundamental Data products); Securities Exchange Act
Release No. 34-79701 (December 29, 2016), 82 FR 1381 (January 5,
2017) (SR-Nasdaq-2016-175) (establishing current monthly fee for the
Daily List and Fundamental Data).
\10\ The last fee modification for the Daily List inadvertently
identified the Mutual Fund Quotation Service (``MFQS'') as included
with the Daily List product. See Securities Exchange Act Release No.
34-79701 (December 29, 2016), 82 FR 1381 (January 5, 2017) (SR-
Nasdaq-2016-175). The Commission approved removal of MFQS from the
Nasdaq rule book in 2008. See Securities Exchange Act Release No.
58392 (August 20, 2008), 73 FR 50382 (August 26, 2008) (SR-Nasdaq-
2008-019). MFQS information was removed from the Daily List on
October 17, 2011. See Nasdaq, ``Data Technical News #2011-17''
(September 1, 2011), available at <a href="https://www.nasdaqtrader.com/TraderNews.aspx?id=dtn2011-017">https://www.nasdaqtrader.com/TraderNews.aspx?id=dtn2011-017</a>. The identification of MFQS as
information included in the Daily List Product in SR-Nasdaq-2016-175
was in error.
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Nasdaq Equity Data: Provides notification of corporate actions
information such as new listings, delistings, corporate name changes,
trading symbol changes, market tier changes and Financial Status
Indicator (FSI) changes that occur on the Nasdaq Global Select Market,
Nasdaq Global Market and Nasdaq Capital Market.
Dividends: Provides notification of cash dividends, stock dividends
and stock splits to Nasdaq securities.
Next Day Ex-Date: Summarizes the securities with dividend
adjustments to be applied to the previous closing price on the next
business day.\11\
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\11\ The Daily List also includes a symbol directory and a list
of dual-listed securities for reference.
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Full historical information is available back to May 24, 1999.
Daily List files for the current business month are available for
download via a secured FTP interface, and from a secured website.
All of the information published on the Daily List is from issuers,
except for information related to the execution of corporate actions by
the Exchange and issuer status under Exchange rules. Nasdaq receives
corporate actions information from issuers on the same basis as any
other market participant, with no inherent advantage in speed or access
due to its unique position as an SRO.
Daily List is updated every 15 minutes between 7:00 a.m. and 10:00
p.m. on trading days.
Fundamental Data
Nasdaq Fundamental Data provides security master and market summary
statistics on a T+1 basis for Nasdaq securities.\12\ The fundamental
data report contains start of trading day information on Nasdaq
equities, including trading summary data such as high and low price,
total shares outstanding (TSO), Nasdaq Official Closing Price (NOCP),
and public float.
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\12\ See Supra, n.8.
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Like the Daily List, Fundamental Data files are available via
secured website or secured file transfer protocol server.
Fundamental Data is distributed with the Daily List as supplemental
information.
Proposed Changes
As summarized above, Nasdaq proposes to reconfigure fees for the
Daily List to better reflect the value of the information distributed.
First, Nasdaq proposes to increase the licensing fee for the Daily
List, which also includes Fundamental Data, from $1,750 to $3,500 per
month to better reflect its market value. The Daily List faces
competition from substitute products from a number of vendors, none of
which are required to file fees for their corporate actions products as
SROs. Based on Nasdaq's understanding of the sale of corporate actions
products, the fee range for competitor corporate actions products
appears to be between $3,000 and $12,000 per month or more. The
proposal will raise Daily List fees from below that range to within the
range, at its lower end.
Second, together with the proposed rule change, the Exchange will
make corporate actions executed by the Exchange and information related
to issuer status under Exchange rules available to the public on
<a href="http://NasdaqTrader.com">NasdaqTrader.com</a> or a successor website at the same time as on the
Daily List. The dual publication of information on a public website and
a corporate actions product is the same two-part structure used by the
New York Stock Exchange, which does not file the fees for its corporate
actions product as an SRO.
Publication of information about the execution of corporate actions
and corporate status by the Exchange on an open website will not
require a rule change. Nasdaq already publishes information concerning
certain corporate actions on <a href="http://NasdaqTrader.com">NasdaqTrader.com</a>, such as Market Center
and financial status, and this change merely adds to the information
made available to the public.
Market for Corporate Actions Products
A corporate action is an undertaking by an issuer that materially
impacts the value of its shares. Corporate actions range from making a
change to a company's name to issuing a dividend or restructuring the
company through a merger or bankruptcy. Common corporate actions
include, but are not limited to, name or trading symbol change, stock
splits,\13\ issuance of dividends, mergers and acquisitions, rights
issue,\14\ and liquidation or dissolution.\15\
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\13\ This includes both the division of a stock into smaller
shares and a reverse stock split that reduces the number of shares
outstanding and increases the price per share.
\14\ ``Rights issue'' refers to the issuance of ``rights'' to
shareholders that entitle them to buy additional shares directly
from the company in proportion to their existing holdings within a
prescribed period.
\15\ Liquidation is the process by which a company sells off its
assets and closes its business. In liquidation, the company's assets
are sold and the proceeds are used to pay off creditors. Dissolution
is the last stage of liquidation, in which the assets and property
of the company are redistributed.
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Although corporate actions are undertaken by the issuer, certain
corporate actions require activity by the Exchange to complete. One
example of this is the Ex-Date for dividends. When a company declares a
dividend, its board of directors establishes a record date. This is the
date a person must be on the company's record as a shareholder to
receive a dividend payment. Once the record date is set, the ex-
dividend date is also set. For the Nasdaq Stock Exchange, the Ex-Date
for dividends is generally set one business day prior to the record
date, but a different date may be established under certain
circumstances.\16\
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\16\ See Equity 11, Section 11140. Transactions in Securities
``Ex-Dividend,'' ``Ex-Rights'' or ``Ex-Warrants'' (``All
transactions in securities, except ``cash'' transactions, shall be
``ex-dividend,'' ``ex-rights'' or ``ex-warrants'': (1) on the day
specifically designated by Nasdaq Regulation after definitive
information concerning the declaration and payment of a dividend or
the issuance of rights or warrants has been received at the office
of Nasdaq Regulation; or (2) on the day specified as such by the
appropriate national securities exchange . . .'').
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[[Page 54547]]
The status of an issuer on a listing exchange, as reported by that
exchange, is typically included in corporate actions products. For
example, the Nasdaq Stock Exchange establishes requirements for the
continued listing of issuers and standards for primary equity
securities.\17\ Nasdaq monitors and disseminates information on
financial status,\18\ whether there has been a downgrade, and the
reason for that downgrade, as applicable.
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\17\ See, e.g., Nasdaq Stock Market Rules 5400 (Nasdaq Global
Market), Section 5450 (Continued Lising Requirements and Standards
for Primary Equity Securities) (setting forth a number of standards
for continued listing, including standards related to market value).
\18\ The four basic categories of financial status are
deficient, delinquent, bankrupt and normal. The deficient, bankrupt
and delinquent categories are not mutually exclusive, and more than
one of these categories may apply to a particular issuer.
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Competitor Products
Nasdaq has identified numerous competitors in the market for
corporate actions products, none of which file fee changes with the
Commission as an SRO. A non-exhaustive list of vendors offering
corporate actions products includes S&P Global, LSEG, Quodd, Barchart,
Six Financial, Polygon.io, EDI, and FactSet. S&P Global states that its
``unified Corporate Actions solution helps firms across a range of
asset classes, market client types and business lines'' with their
corporate actions processing.\19\ LSEG states that its Equity Corporate
Actions tracks ``all stocks which are primarily listed (or quoted) on
200+ key venues . . . .'' \20\ Quodd Financial Information Services,
Inc. states that it provides ``comprehensive access to global corporate
actions and dividend content across dozens of data elements.'' \21\
<a href="http://Barchart.com">Barchart.com</a>, Inc. provides ``corporate actions data on thousands of
publicly-traded companies.'' \22\ Six Financial Information states that
its corporate actions product ``[c]overs more than 80 event types with
the focus on the main event attributes to allow simple tracking of
corporate actions.'' \23\ Polygon.io, Inc. provides information on
``company financials, stock market holidays, [and] corporate actions.''
\24\ Exchange Data International, Ltd. states that it offers
``corporate actions data from over 150 exchanges worldwide.'' \25\
FactSet Research Systems Inc. advertises that it ``offers a
comprehensive view of global corporate actions data.'' \26\
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\19\ See S&P Global Market Intelligence, Corporate Actions,
available at <a href="https://www.spglobal.com/marketintelligence/en/mi/products/corporate-actions.html">https://www.spglobal.com/marketintelligence/en/mi/products/corporate-actions.html</a>; see also S&P Global Market
Intelligence, Corporate Actions Product Brochure, available at
<a href="https://cdn.ihsmarkit.com/www/pdf/0323/SPGI-MI-Corporate-Actions-Brochure.pdf">https://cdn.ihsmarkit.com/www/pdf/0323/SPGI-MI-Corporate-Actions-Brochure.pdf</a>.
\20\ LSEG Data & Analytics, Equity Corporate Actions, available
at <a href="https://www.lseg.com/en/data-analytics/financial-data/corporate-actions-data/equity-corporate-actions">https://www.lseg.com/en/data-analytics/financial-data/corporate-actions-data/equity-corporate-actions</a>.
\21\ Quodd Financial Information Services, Inc., QX Digital
Platform, available at <a href="https://quodd.com/universe/">https://quodd.com/universe/</a>.
\22\ <a href="http://Barchart.com">Barchart.com</a>, Inc., Corporate Actions Data, available at
<a href="https://www.barchart.com/solutions/data/company/corporate-actions">https://www.barchart.com/solutions/data/company/corporate-actions</a>.
\23\ Six Financial Information USA Inc., Corporate Action,
available at <a href="https://www.six-group.com/en/products-services/financial-information/display-and-delivery-capabilities/sixflex/corporate-action.html#scrollTo=available-content">https://www.six-group.com/en/products-services/financial-information/display-and-delivery-capabilities/sixflex/corporate-action.html#scrollTo=available-content</a>.
\24\ Polygon.io, Inc., Stocks API Documentation, available at
<a href="https://polygon.io/docs/stocks/getting-started">https://polygon.io/docs/stocks/getting-started</a>.
\25\ Exchange Data International, Ltd., Worldwide Equity
Corporate Actions, available at <a href="https://www.exchange-data.com/product/worldwide-corporate-actions-data/">https://www.exchange-data.com/product/worldwide-corporate-actions-data/</a>.
\26\ FactSet Research Systems Inc., New Corporate Actions Report
is Now Available in the Company/Security Tab, available at <a href="https://insight.factset.com/new-corporate-actions-report-is-now-available-in-the-company/security-tab">https://insight.factset.com/new-corporate-actions-report-is-now-available-in-the-company/security-tab</a>.
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The New York Stock Exchange, an SRO, offers a corporate actions
product that is not filed with its other SRO fees. NYSE states that its
``Corporate Actions package is comprised of several reports providing
over 60 different corporate actions types for all equities listed on
NYSE Group (NYSE, NYSE American and NYSE Arca market centers),
including but not limited to cash dividends, stock dividends,
distributions, splits, new listings (IPOs), suspensions and
delistings.'' \27\
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\27\ New York Stock Exchange, Corporate Actions, available at
<a href="https://www.nyse.com/market-data/corporate-actions">https://www.nyse.com/market-data/corporate-actions</a> (``The Corporate
Actions of NYSE Group Listings provide daily and intraday event
updates for securities including stock splits, dividends, rights
issues, spin-offs, and much more.''); see also NYSE, Corporate
Actions for NYSE Group Listings, available at <a href="https://www.nyse.com/market-data/corporate-actions/corporate-actions-for-nyse-group-listings">https://www.nyse.com/market-data/corporate-actions/corporate-actions-for-nyse-group-listings</a> (providing additional information about the NYSE Corporate
Actions product).
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In addition to offering a corporate actions product, NYSE makes
exchange-specific corporate actions information, such as ex-dates and
financial status, available on a public website.\28\ NYSE's Corporate
Actions product is disseminated by NYSE in its capacity as a vendor of
financial information, not in its capacity as an exchange, and is not
included in the NYSE rulebook. Nasdaq's proposal to reformulate the
Daily List is modeled on this structure.
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\28\ See NYSE Corporate Actions; NYSE Ex-Date Dividends.
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This is not an exhaustive list of products. For example, Nasdaq as
a vendor of financial information makes corporate actions information
from third parties available on its website.\29\
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\29\ See QuantRocket, Sharadar Data, available at <a href="https://www.quantrocket.com/sharadar/">https://www.quantrocket.com/sharadar/</a> (including corporate event data
sources from SEC Form 8-K filings with history since 1993).
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None of these vendors of corporate actions products publish their
fees. Based on Nasdaq's understanding of the market, the fee range for
these products appears to be between $3,000 and $12,000 per month or
more.
Publication of Exchange Information
The Exchange proposes to publish information that originates from
the Exchange related to the execution of corporate actions as well as
issuer status updates on a public website. This Exchange information
will be published on the following three pages on <a href="http://NasdaqTrader.com">NasdaqTrader.com</a> (or
a successor website): Nasdaq Ex-Date; Nasdaq Security Status Updates;
and When Issued/When Distributed.
Nasdaq Ex-Date.\30\ The Nasdaq Ex-Date will provide the execution
date for dividends. The dividend Ex-Date is generally set for stocks
one business day prior the record date, according to the settlement
cycle, except under specified circumstances. However, there are
occasions when Ex-dates are not set one business day prior to the
record date, such as when a date is floating. Under those
circumstances, the Ex-Date will be set by the Exchange and provided to
the public on <a href="http://NasdaqTrader.com">NasdaqTrader.com</a> or a successor website.
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\30\ See Nasdaq, Nasdaq Ex-Date, available at <a href="https://www.nasdaqtrader.com/Trader.aspx?id=nasdaq-ex-date&from=05%2F01%2F2024&to=05%2F22%2F2024">https://www.nasdaqtrader.com/Trader.aspx?id=nasdaq-ex-date&from=05%2F01%2F2024&to=05%2F22%2F2024</a>.
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The Nasdaq Ex-Date page will provide the following fields of
information: Issue Symbol, Issuer Name, Ex Date, Record Date, and Pay
Date.
Nasdaq Security Status Updates.\31\ The execution of corporate
actions and issuer status under Exchange rules will be published on a
page dedicated to status updates. These include security additions,
anticipated additions, deletions (delistings) \32\ and suspensions;
name and symbol changes; market center changes; \33\ and financial
[[Page 54548]]
status changes \34\ (old financial status, new financial status, and
downgrade reason, if applicable).
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\31\ Nasdaq, Nasdaq Security Status Updates, available at
<a href="https://www.nasdaqtrader.com/Trader.aspx?id=nasdaq-security-status-updates&from=05%2F21%2F2024&to=05%2F21%2F2024">https://www.nasdaqtrader.com/Trader.aspx?id=nasdaq-security-status-updates&from=05%2F21%2F2024&to=05%2F21%2F2024</a>.
\32\ Securities pending suspension or delisting are also
published on the Nasdaq Listing Center. See Nasdaq, Issues Pending
Suspension or Delisting, available at <a href="https://listingcenter.nasdaq.com/IssuersPendingSuspensionDelisting.aspx">https://listingcenter.nasdaq.com/IssuersPendingSuspensionDelisting.aspx</a>
\33\ The three Nasdaq market centers are the Nasdaq Global
Select Market, the Nasdaq Global Market, and the Nasdaq Capital
Market.
\34\ The four basic categories of financial status are
deficient, delinquent, bankrupt and normal. The deficient, bankrupt
and delinquent categories are not mutually exclusive, and more than
one of these categories may apply to a particular issuer.
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The Nasdaq Security Status Updates page will provide the following
fields of information: Effective Date, Symbol, Company Name, Issue
Event, Downgrade Reason, Old Financial Status, and New Financial
Status.
When Issued and When Distributed.\35\ Nasdaq will separately
publish when issued and when distributed information for all Nasdaq
listed securities. ``When issued'' and ``when distributed'' refer to
transactions that are made conditionally because a security has been
authorized but not yet issued or distributed, respectively. Treasury
securities, stock splits, and new issues of stocks and bonds all can be
traded on a when-issued or when-distributed basis. This file will
identify when a security is in either of these two states.
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\35\ Nasdaq, When Issued and When Distributed Flags, available
at <a href="https://www.nasdaqtrader.com/Dynamic/SymDir/NasdaqWhenIssueWhenDistributed.txt">https://www.nasdaqtrader.com/Dynamic/SymDir/NasdaqWhenIssueWhenDistributed.txt</a>.
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The file will provide the following fields of information:
Effective Date, Issue Name, Symbol, When Issued Flag, and When
Distributed Flag.
These three pages of information, together with the corporate
actions information published by issuers and available on the
Commission's website and other sources, would enable any party to
assemble its own set of corporate actions information. These pages will
be updated at the same time as information is updated on the Daily
List. As such, Nasdaq will have no material advantage in the sale of
the Daily List relative to any other vendor offering corporate actions
information.\36\ Nasdaq Ex-Date and Nasdaq Security Status will update
every 15 minutes between 7:00 a.m. and 10:00 p.m. on trading days, as
needed (no update will be sent if there are no changes). When Issued
and When Distributed information will be updated at 8:00 a.m., 11:00
a.m., and 4:00 p.m. on trading days.
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\36\ Corporate actions information is not time sensitive in the
same way as real-time data.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\37\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\38\ 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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\37\ 15 U.S.C. 78f(b).
\38\ 15 U.S.C. 78f(b)(4) and (5).
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Equitable Allocation of Reasonable Dues, Fees and Other Charges
The proposed fees are an equitable allocation of reasonable dues,
fees and other charges because: (i) the Daily List and Fundamental Data
are subject to competition; (ii) the proposed fees are within the
prevailing market price for comparable corporate actions products;
(iii) exchange-specific information related to corporate actions will
be available on the <a href="http://NasdaqTrader.com">NasdaqTrader.com</a> or a successor website; and (iv)
customers can cancel the Daily List and Fundamental Data for any
reason, including cost.
The Daily List and Fundamental Data are subject to competition.
The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the current market
model, the Commission highlighted the importance of market forces in
determining prices and SRO revenues, and also recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \39\ Similarly, in
NetCoalition v. Securities and Exchange Commission,\40\
(``NetCoalition''), the D.C. Circuit upheld the Commission's use of a
market-based approach in evaluating the fairness of market data fees
against a challenge claiming that Congress mandated a cost-based
approach.\41\ As the court emphasized, the Commission ``intended in
Regulation NMS that market forces, rather than regulatory requirements'
play a role in determining the market data . . . to be made available
to investors and at what cost.'' \42\
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\39\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release''); see also Securities Exchange Act Release No. 34-79701
(December 29, 2016), 82 FR 1381 (January 5, 2017) (SR-Nasdaq-2016-
175) (discussion of competition in prior Daily List filing).
\40\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
\41\ See id. at 534-535
\42\ Id. at 537.
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As explained above, Nasdaq has identified numerous competitors in
the sale of corporate actions products, none of which are required to
file fee changes with the Commission as an SRO, including S&P Global
Corporate Actions, LSEG Equity Corporate Actions, and others. Corporate
actions information is also available from the issuer, as well as in
corporate filings on the SEC's website. Information on the execution of
corporate actions on the Nasdaq Exchange as well as information on
issuer status will be available on <a href="http://NasdaqTrader.com">NasdaqTrader.com</a> or a successor
website.
The publication of all information that originates from the
Exchange on <a href="http://NasdaqTrader.com">NasdaqTrader.com</a>, together with the corporate actions
information published by issuers and available on the Commission's
website and other sources, would enable any party to assemble its own
set of corporate actions information. Nasdaq has no unique access to
information that does not originate with the Exchange, and therefore
has no inherent competitive advantage relative to any other vendor with
respect to the gathering and dissemination of such information.\43\
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\43\ Moreover, corporate action information originating from
Nasdaq is limited to Nasdaq-listed issuers; Nasdaq has no unique
information related to issuers not listed on Nasdaq. Most vendors
sell corporate actions information for companies listing on all
exchanges.
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Fundamental Data provides security master and market summary
statistics on a T+1 basis for Nasdaq securities, as explained above.
This next-day information can be replicated by any vendor of market
information and is therefore subject to direct competition.
Nasdaq estimates that approximately 10 percent of its customers
that consume Nasdaq US equity data purchase the Daily List.
The proposed fees are within the range of prevailing market rates.
The corporate actions products listed above are not subject to
publication requirements for SRO products, and their fee schedules are
not published and not on a publicly available price list. Nevertheless,
based on Nasdaq's experience with and understanding of the market,
monthly fees for corporate actions products appear to range between
$3,000 and $12,000 per month or more. The proposal will raise Daily
List fees to be within the range, at its lower end.
Exchange-specific information will be available on
<a href="http://NasdaqTrader.com">NasdaqTrader.com</a>.
As explained above, this information will be available on three
pages: Nasdaq Ex-Date; Nasdaq Security Status Updates; and a When
Issued/When Distributed page.
[[Page 54549]]
The information published on <a href="http://NasdaqTrader.com">NasdaqTrader.com</a> or successor website
will provide materially the same information as published by NYSE. As
noted above, the NYSE Corporate Actions product is not an exchange
product published in NYSE's capacity as an SRO. Nasdaq understands that
NYSE Corporate Actions is not filed as an SRO product because the
corporate action information specific to NYSE as an SRO--related to the
execution of corporate actions and issuer status--is available on the
NYSE website. With this filing, Nasdaq is proposing to employ the same
distribution structure currently employed by NYSE.\44\
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\44\ Nasdaq is considering submission of a filing to withdraw
the Daily List from the Nasdaq rulebook on a future date. This
filing, however, is limited to bringing Daily List fees more in line
with prevailing market prices.
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The publication of this information, together with the corporate
actions information published by issuers and available on the
Commission's website and other sources, would enable any party to
assemble its own set of corporate actions information. Because the
information available on <a href="http://NasdaqTrader.com">NasdaqTrader.com</a> will be updated at the same
time as the Daily List, Nasdaq will have no material advantage in the
sale of its corporate actions product relative to any other vendor.
Customers can cancel these products for any reason, including cost.
Any Daily List customer would be able to obtain the information
contained in the Daily List with other corporate actions products, or
by compiling corporate actions information using publicly available
data and the information to be published on <a href="http://NasdaqTrader.com">NasdaqTrader.com</a>. The next-
day information provided with Fundamental Data can be replicated by any
vendor of market information. The Daily List and Fundamental Data can
be cancelled by any customer for any reason, including cost.
No Unfair Discrimination
The Daily List and Fundamental Data are purchased by a mix of
exchanges, asset managers, hedge funds, banks, and media portals. No
particular category of customer is more reliant on these products than
any other category, and therefore none will disparately impacted by the
proposed price change. As explained above, corporate actions products
are available from many vendors, and any customer can replace the Daily
List with any other corporate actions product or assemble such
information on its own. The same is true for Fundamental Data.
In summary, the proposed fees are an equitable allocation of
reasonable dues, fees and other charges because: (i) the Daily List and
Fundamental Data are subject to competition; (ii) proposed fees are
within the range of fees for comparable products; (iii) exchange-
specific information related to corporate actions will be available on
<a href="http://NasdaqTrader.com">NasdaqTrader.com</a> or a successor website; and (iv) customers can cancel
the Daily List and Fundamental Data for any reason, including cost. For
these reasons, the Exchange has provided a substantial basis
demonstrating that the fee is equitable, fair, reasonable, and not
unreasonably discriminatory, and therefore consistent with and in
furtherance of the purposes of the Exchange 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.
Inter-Market Competition
Nothing in the Proposal burdens inter-market competition (the
competition among self-regulatory organizations).
First, the Daily List can be replicated by any SRO, or any firm
that compiles corporate actions information.\45\ To the degree that the
Daily List includes information about the Exchange's execution of
corporate actions or issuer status, that same information will be
publicly available on the <a href="http://NasdaqTrader.com">NasdaqTrader.com</a> or successor website. The
remaining corporate actions information is available from issuers, on
the SEC website, and other sources.
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\45\ As noted above, NYSE does not file its corporate actions
product as an SRO product, and the other vendors of corporate
actions products are not SROs.
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Nasdaq does not have unique access to the information that is
provided through the product (except for the Exchange information that
will be made publicly available), and market participants do not have
an unqualified need for the information provided. Therefore, the price
that Nasdaq can charge for the product is constrained by the ability of
market participants to reduce their demand for the product and the
ability of competitors to enter the market and profitably undercut any
supracompetitive price increase.
If the price of this product were set above competitive levels,
other vendors could determine whether the product was sufficiently
attractive to their own customers to warrant incurring the costs
associated with purchasing it for distribution. Since distributors are
in competition with one another to attract customers, they must
continually evaluate their cost base and the value of their product
offering to customers to determine whether they allow them to maximize
profitability. This competition for customers provides another check on
the price for proprietary data products such as the Daily List. To the
extent that other exchanges seek to develop and market a corporate
actions product, they are free to do so.
With respect to Fundamental Data, nothing in the proposal impedes
the ability of any other SRO from introducing a similar product.
Intra-Market Competition
Nothing in the Proposal burdens intra-market competition (the
competition among consumers of exchange data) because the Daily List
and Fundamental Data are available to any customer under the same fee
schedule as any other customer, and any market participant that wishes
to purchase these products can do so on a non-discriminatory basis.
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.\46\ 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.
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\46\ 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.
[[Page 54550]]
Comments may be submitted by any of the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#fd8f889198d09e9290909893898ebd8e989ed39a928b"><span class="__cf_email__" data-cfemail="6311160f064e000c0e0e060d1710231006004d040c15">[email protected]</span></a>. Please include
file number SR-NASDAQ-2024-027 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-2024-027. 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 (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). 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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-NASDAQ-2024-027 and should
be submitted on or before July 22, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\47\
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\47\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-14377 Filed 6-28-24; 8:45 am]
BILLING CODE 8011-01-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.