Notice2024-30524
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify All-Inclusive Annual Fees for Certain Companies
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
December 23, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 246 (Monday, December 23, 2024)</title>
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[Federal Register Volume 89, Number 246 (Monday, December 23, 2024)]
[Notices]
[Pages 104590-104593]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-30524]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101948; File No. SR-NASDAQ-2024-082]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify All-Inclusive Annual Fees for Certain Companies
December 17, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 3, 2024, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
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 modify all-inclusive annual fees for
certain companies, as described below. While the changes proposed
herein are effective upon filing, the Exchange has designated the
proposed amendments to be operative on January 1, 2025.
The text of the proposed rule change is available on the Exchange's
website at
[[Page 104591]]
<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 modify the Exchange's
all-inclusive annual listing fees for certain domestic and foreign
companies listing equity securities on the Nasdaq Global Select, Global
and Capital Markets.\3\ While these changes are effective upon filing,
Nasdaq has designated the proposed amendments to be operative on
January 1, 2025.
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\3\ The Exchange initially filed the proposed pricing change on
November 19, 2024 (SR-NASDAQ-2024-072). On December 3, 2024, the
Exchange withdrew that filing and replaced it with SR-NASDAQ-2024-
082.
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Currently, for companies listed on the Capital Market, other than
Acquisition Companies (i.e., 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), ADRs, Closed-end Funds and
Limited Partnerships, the all-inclusive annual fee described in Listing
Rule 5920 ranges from $49,500 to $85,000; for Acquisition Companies
listing on the Capital Market the all-inclusive annual fee is $81,000;
for ADRs listed on the Capital Market the all-inclusive annual fee
ranges from $49,500 to $59,500; and for Limited Partnerships listed on
the Capital Market the all-inclusive annual fee ranges from $34,500 to
$42,000. On the Global and Global Select Markets, the all-inclusive
annual fee described in Listing Rule 5910 for companies other than
Acquisition Companies, ADRs, Closed-end Funds and Limited Partnerships
ranges from $52,500 to $182,500; for Acquisition Companies on the
Global and Global Select Markets the all-inclusive annual fee is
$81,000; for ADRs the all-inclusive annual fee ranges from $52,500 to
$94,000; and for Limited Partnerships the all-inclusive annual fee
ranges from $42,000 to $87,000. On the Global Market, the all-inclusive
annual fee described in Listing Rule 5930 for SEEDS and Other
Securities ranges from $15,000 to $30,000.\4\ The all-inclusive annual
fee for Closed-end Funds listed on any market tier ranges from $34,500
to $112,000. In each case, except for Acquisition Companies, a
company's all-inclusive annual fee is based on its total shares
outstanding.\5\
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\4\ Rule 5940 sets forth the all-inclusive annual listing fees
applicable to Exchange Traded Products that are listed on the Nasdaq
Global Market. Nasdaq is not proposing to amend this rule.
\5\ REITs are subject to the same fee schedule as other equity
securities; however for the purpose of determining the total shares
outstanding, shares outstanding of all members in a REIT Family
listed on the same Nasdaq market tier may be aggregated. Similarly,
for the purpose of determining the total shares outstanding, fund
sponsors may aggregate shares outstanding of all Closed-End Funds in
the same fund family listed on the Nasdaq Global Market or the
Nasdaq Capital Market. See Listing Rules 5910(b)(2) and 5920(b)(2).
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Nasdaq proposes to amend the all-inclusive annual fee for certain
domestic and foreign companies listing equity securities on the Nasdaq
Global Select, Global and Capital Markets to the following amounts,\6\
effective January 1, 2025:
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\6\ In establishing the fee changes described in this rule
filing, Nasdaq considered various factors that distinguish
companies, including market tier, shares outstanding, and security
type, as well as pricing for similar securities on other national
securities exchanges. Nasdaq's also intends over time to transition
to a fee structure whereby the all-inclusive annual fee is
calculated on a per-share basis (subject to a minimum and maximum
fee), instead of one based on tiers. In setting the proposed fees
Nasdaq therefore also considered, in part, the resulting per-share
fee range of companies in the current tiers and attempted to
minimize the eventual impact of any future change to a per-share
fee. As a result of this, and the other factors noted above, some
tiers will have a higher percentage increase than other tiers.
Nasdaq believes that the ever-shifting market share among the
exchanges with respect to new listings and the transfer of existing
listings between competitor exchanges demonstrates that issuers can
choose different listing markets in response to fee changes.
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Global/Global Select Markets
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Annual fee Annual Fee
before the effective
Total shares outstanding proposed January 1,
change 2025
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Equity securities other than, in part, Up to 10 million shares......... $52,500 $56,000
Acquisition Companies, ADRs, Closed-end Funds
and Limited Partnerships.
10+ to 50 million shares........ 65,500 70,000
50+ to 75 million shares........ 85,000 86,000
75+ to 100 million shares....... 113,500 115,000
100+ to 125 million shares...... 141,500 143,000
125+ to 150 million shares...... 157,500 164,000
Over 150 million shares......... 182,500 193,000
ADRs.......................................... Up to 10 million ADRs and other 52,500 56,000
listed equity securities.
10+ to 50 million ADRs and other 59,500 63,500
listed equity securities.
50+ to 75 million ADRs and other 70,500 75,500
listed equity securities.
Over 75 million ADRs and other 94,000 100,500
listed equity securities.
Closed-end Funds.............................. Up to 50 million shares......... 34,500 36,500
50+ to 100 million shares....... 56,500 59,500
100+ to 250 million shares...... 84,000 88,500
Over 250 million shares......... 112,000 118,000
Limited Partnerships.......................... Up to 75 million shares......... 42,000 44,500
75+ to 100 million shares....... 56,500 59,500
[[Page 104592]]
100+ to 125 million shares...... 69,500 73,000
125+ to 150 million shares...... 75,500 79,500
Over 150 million shares......... 87,000 91,500
SEEDS and Other Securities *.................. Up to 5 million shares.......... 15,000 16,000
5+ to 10 million shares......... 17,500 18,500
10+ to 25 million shares........ 20,000 21,000
25+ to 50 million shares........ 22,500 24,000
Over 50 million shares.......... 30,000 31,500
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* Rule 5930 sets forth the all-inclusive annual listing fees applicable to SEEDS and Other Securities qualified
under Rule 5715 or 5730 for listing on the Nasdaq Global Market.
Capital Market
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Annual fee Annual fee
before the effective
Total shares outstanding proposed January 1,
change 2025
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Equity securities other than Acquisition Up to 10 million shares......... $49,500 $53,000
Companies, ADRs, Closed-end Funds and Limited
Partnerships.
10+ to 50 million shares........ 65,500 70,000
Over 50 million shares.......... 85,000 86,000
ADRs.......................................... Up to 10 million ADRs and other 49,500 53,000
listed equity securities.
Over10 million ADRs and other 59,500 63,500
listed equity securities.
Closed-end Funds.............................. Up to 50 million shares......... 34,500 36,500
50+ to 100 million shares....... 56,500 59,500
100+ to 250 million shares...... 84,000 88,500
Over 250 million shares......... 112,000 118,000
Limited Partnerships.......................... Up to 75 million shares......... 34,500 36,500
Over 75 million shares.......... 42,000 44,500
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Nasdaq also proposes to amend the all-inclusive annual fee for
Acquisition companies. Nasdaq currently charges a flat all-inclusive
annual listing fee of $81,000 for Acquisition Companies listed on the
Nasdaq Capital, Global and Global Select Markets.\7\ Nasdaq is
proposing to increase the all-inclusive annual listing fee for these
companies from $81,000 to $85,000 to better align its fees with the
value of the listing to Acquisition Companies.
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\7\ See Listing Rules 5910(b)(2)(F) and 5920(b)(2)(G).
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Finally, Nasdaq proposes to update amounts in examples in Listing
Rules 5910(b)(3)(D) and 5920(b)(3)(D), clarifying the application of
the rules for companies transferring between Nasdaq tiers, to align the
fee amounts with the fees applicable in year 2025.
Nasdaq proposes to make the aforementioned fee increases to better
reflect the Exchange's costs related to listing equity securities, such
as from the ongoing remodeling of a portion of the New York
Headquarters used for company events, including market opening and
closing bells, conducting the required associated regulatory oversight,
and Nasdaq's advocacy efforts on behalf of listed companies, and the
corresponding value of such listing to companies. In establishing these
fee changes Nasdaq also considered the competitive atmosphere in which
the Exchange operates.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\8\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\9\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees and other charges
among 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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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4) and (5).
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As a preliminary matter, Nasdaq notes that the Exchange operates in
a highly competitive marketplace for the listing of companies.\10\ The
Commission has repeatedly expressed its preference for competition over
regulatory intervention in determining prices, products, and services
in the securities markets. The Exchange believes that the ever-shifting
market share among exchanges with respect to new listings and the
transfer of existing listings between competitor exchanges demonstrates
that issuers can choose different listing markets in response to fee
changes. Moreover, new competitors can enter the space, including
existing exchanges without listing programs.\11\ Accordingly,
competitive forces constrain the Exchange's listing fees and changes to
the listing fees can have a direct effect on the ability of Nasdaq to
[[Page 104593]]
compete for new listings and retain existing listings.
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\10\ The Justice Department has noted the intense competitive
environment for exchange listings. See ``NASDAQ OMX Group Inc. and
Intercontinental Exchange Inc. Abandon Their Proposed Acquisition Of
NYSE Euronext After Justice Department Threatens Lawsuit'' (May 16,
2011), available at <a href="http://www.justice.gov/atr/public/press_releases/2011/271214.htm">http://www.justice.gov/atr/public/press_releases/2011/271214.htm</a>.
\11\ In that regard, Nasdaq notes that CBOE BZX has announced a
new listing offering. See ``Cboe Launches New Global Listing
Offering for Companies and ETFs of the Purpose-Driven Innovation
Economy'' (June 2, 2023), available at <a href="https://ir.cboe.com/news/news-details/2023/Cboe-Launches-New-Global-Listing-Offering-for-Companies-and-ETFs-of-the-Purpose-Driven-Innovation-Economy-06-02-2023/default.aspx">https://ir.cboe.com/news/news-details/2023/Cboe-Launches-New-Global-Listing-Offering-for-Companies-and-ETFs-of-the-Purpose-Driven-Innovation-Economy-06-02-2023/default.aspx</a>. Similarly, the Texas Stock Exchange announced its
plans to be a fully electronic national securities exchange
providing a venue to list and trade public companies and the
exchange-traded products, available at <a href="https://www.txse.com/about-us">https://www.txse.com/about-us</a>.
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Nasdaq believes that the proposed amendments to Listing Rules
5910(b)(2), 5920(b)(2), and 5930 to increase the all-inclusive annual
listing fees as set forth above are reasonable because of the increased
costs incurred by Nasdaq, including due to price inflation. In that
regard, the Exchange notes that its general costs to support listed
companies and conduct the required associated regulatory oversight have
increased. The Exchange also continues to expand and improve the
services it provides to listed companies, the technology to deliver
those services and the customer experience at the Nasdaq MarketSite.
These improvements include the remodeling and expansion of a portion of
Nasdaq's New York Headquarters used for company events, including
market opening and closing bells, and the investment in technology to
support ongoing trading. Nasdaq also continued its advocacy efforts on
behalf of listed companies.
The Exchange also believes that the proposed amendments to the
annual fees for equity securities are equitable because they do not
change the existing framework for such fees, but simply increase the
amount of certain of the fees to reflect increases in operating costs
and the perceived value of a listing, including as a result of Nasdaq's
advocacy efforts on behalf of listed companies.\12\ Similarly, as the
fee structure remains effectively unchanged apart from increases in the
rates paid by certain issuers, as described above, the changes to
annual fees for equity securities neither target nor will they have a
disparate impact on any particular category of issuer of equity
securities.
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\12\ See also footnote 6, above.
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The Exchange believes that the proposal to increase annual fees is
not unfairly discriminatory because Nasdaq will maintain the current
fee structure, based on shares outstanding, except for fees applicable
to Acquisition Companies as described above, and the same fee schedule
will apply to all such issuers. While the Exchange does not propose to
increase the minimum annual fees charged for securities covered by Rule
5935 (that sets forth the all-inclusive annual listing fees applicable
to Non-Convertible Bonds) and Rule 5940 (that sets forth the all-
inclusive annual listing fees applicable to Exchange Traded Products),
the Exchange believes that this is not unfairly discriminatory because
the benefits the issuers of those other types of securities receive in
connection with their listings are consistent with the current fee
levels paid by those issuers. Pricing for similar securities on other
national securities exchanges was also considered, and Nasdaq believes
that a proposed all-inclusive annual listing fee is reasonable given
the competitive landscape.
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 market for listing services
is extremely competitive and listed companies may freely choose
alternative venues, both within the U.S. and internationally. For this
reason, Nasdaq does not believe that the proposed rule change will
result in any burden on competition for listings. The Exchange also
does not believe that the proposed rule change will have any meaningful
impact on competition among listed companies because all similarly
situated companies will be charged the same fee.
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 \13\ and Rule 19b-4(f)(2) \14\ thereunder.
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\13\ 15 U.S.C. 78s(b)(3)(A)(ii).
\14\ 17 CFR 240.19b-4(f)(2).
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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 necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change 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="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#fe8c8b929bd39d9193939b908a8dbe8d9b9dd0999188"><span class="__cf_email__" data-cfemail="e496918881c9878b8989818a9097a4978187ca838b92">[email protected]</span></a>. Please include
file number SR-NASDAQ-2024-082 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-2024-082. 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-2024-082 and should
be submitted on or before January 13, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-30524 Filed 12-20-24; 8:45 am]
BILLING CODE 8011-01-P
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