[Federal Register Volume 68, Number 240 (Monday, December 15, 2003)]
[Notices]
[Pages 69736-69738]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-30984]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48889; File No. SR-NASD-2003-178]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the National Association of Securities Dealers, Inc. To 
Modify Certain Listing Fees for Foreign Issuers and To Make a Technical 
Change to the Rule Pertaining to Recordkeeping Fees for Issuers Listed 
on The Nasdaq SmallCap Market

December 5, 2003.
    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 December 3, 2003, the National Association of Securities Dealers, 
Inc. (``NASD''), through its subsidiary, The Nasdaq Stock Market, Inc. 
(``Nasdaq''), filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by Nasdaq. The Commission 
is publishing this notice to solicit comments on the proposed rule 
change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    Nasdaq has filed with the Commission a proposed rule change to 
modify certain listing fees for foreign issuers and to make a technical 
change to the rule pertaining to recordkeeping fees for issuers listed 
on The Nasdaq SmallCap Market.
    The text of the proposed rule change is below. Proposed new 
language is in italics; proposed deletions are in brackets.
* * * * *

4500. ISSUER LISTING FEES

4510. The Nasdaq National Market

    (a) Entry Fee.
    (1) An [domestic] issuer[, or foreign issuer raising capital in 
conjunction with its Nasdaq listing,] that submits an application for 
inclusion of any class of its securities (not otherwise identified in 
this Rule 4500 series) in The Nasdaq National Market, shall pay to The 
Nasdaq Stock Market, Inc. a fee calculated on total shares outstanding, 
according to the following schedule. This fee will be assessed on the 
date of entry in The Nasdaq National Market, except for $5,000, which 
represents a non-refundable, application fee, and which must be 
submitted with the issuer's application.

Up to 30 million shares--$100,000
30+ to 50 million shares--$125,000
Over 50 million shares--$150,000

    [(2) A foreign issuer not raising capital in conjunction with its 
Nasdaq listing, including American Depositary Receipts (ADRs), that 
submits an application for inclusion of any class of its securities 
(not otherwise identified in this Rule 4500 series) in The Nasdaq 
National Market, shall pay to The Nasdaq Stock Market, Inc. a fee 
calculated on total shares outstanding, according to the following 
schedule. This fee will be assessed on the date of entry in The Nasdaq 
National Market, except for $5,000, which represents a non-refundable, 
application fee, and which must be submitted with the issuer's 
application.

Up to 3 million shares--$50,000
3+ to 5 million shares--$75,000
5+ to 30 million shares--$100,000
30+ to 50 million shares--$125,000
Over 50 million shares--$150,000]

    Current (3)-(6) Renumbered as (2)-(5).
    (b)-(c) No change.
    (d) Annual Fee--American Depositary Receipts (ADRs).
    (1) The issuer of each class of securities that is an ADR listed in 
The Nasdaq National Market shall pay to The Nasdaq Stock Market, Inc. 
an annual fee calculated on ADRs outstanding according to the following 
schedule not to exceed $30,000 per issuer:

Up to 10 million ADRs--$21,225 [$10,000]
10+ to 25 million ADRs--$26,500 [$15,000]
25+ to 50 million ADRs--$29,820 [$20,000]
[50+ to 75 million ADRs--$22,500
75+ to 100 million ADRs--$25,000]
Over 50 [100] million ADRs--$30,000

    (2)-(4) No change.

4520. The Nasdaq SmallCap Market

    (a)-(c) No change.
    [(e)](d) Recordkeeping Fee.
    An issuer that makes a change such as a change to its name, the par 
value or title of its security, or its symbol shall pay a fee of $2,500 
to The Nasdaq Stock Market, Inc.
* * * * *

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

[[Page 69737]]

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 states that the purpose of the proposed rule change is to 
revise certain fees for foreign issuers listed on The Nasdaq National 
Market in order to eliminate or reduce the disparity in the amount of 
fees paid by issuers.\3\ Specifically, Nasdaq proposes to revise the 
entry fees for foreign issuers not raising capital in conjunction with 
their listing on Nasdaq and the annual fees applicable to American 
Depositary Receipts (ADRs), beginning on January 1, 2004. Nasdaq also 
proposes to make a technical change to the rule pertaining to 
recordkeeping fees for issuers listed on The Nasdaq SmallCap Market.
---------------------------------------------------------------------------

    \3\ The Commission notes that the net effect of Nasdaq's 
proposal is to raise entry fees for foreign issuers not raising 
capital and raise annual fees for issuers of ADRs.
---------------------------------------------------------------------------

    Nasdaq proposes to revise the entry fees for foreign National 
Market issuers not raising capital in conjunction with their listing. 
Nasdaq rules currently provide two separate entry fee schedules for 
foreign issuers. The fee schedule set forth in Rule 4510(a)(1) applies 
to foreign issuers that raise capital in conjunction with their listing 
on Nasdaq (as well as to all domestic issuers), and the fee schedule in 
Rule 4510(a)(2) applies to those issuers that do not raise capital in 
conjunction with listing on Nasdaq. These two fee schedules are the 
same except for foreign issuers that do not raise capital in 
conjunction with their listing and that list less than 5 million 
shares. These issuers pay a lower fee than they would if they were 
raising capital in conjunction with their listing, in recognition of 
the fact that these listings are non-capital raising and generally 
represent secondary market listings. Nasdaq proposes to eliminate the 
reduced fees for these issuers and to adopt a single entry fee schedule 
for all domestic and foreign issuers.
    Nasdaq also proposes to revise the annual fee schedule for ADRs 
listed on the National Market. The current fee schedule for ADRs, which 
is set forth in Rule 4510(d), provides for lower fees than those 
applicable to U.S. issuers and foreign issuers that list ordinary 
shares. In order to more closely align the fees paid by issuers that 
list ADRs with those paid by other issuers, Nasdaq proposes to raise 
the fees for ADRs while maintaining the current annual cap of $30,000 
per issuer. Under this proposal, issuers that list up to 50 million 
ADRs will pay the same annual fee as U.S. issuers and foreign issuers 
that list ordinary shares. Those issuers that list more than 50 million 
ADRs will pay the maximum annual fee of $30,000.
    Lastly, Nasdaq proposes to make a technical change to the rule 
pertaining to recordkeeping fees for issuers listed on The Nasdaq 
SmallCap Market. Specifically, Nasdaq proposes to renumber Rule 4520(e) 
as Rule 4520(d) in order to avoid any potential confusion regarding the 
fees for SmallCap issuers.\4\
---------------------------------------------------------------------------

    \4\ The recordkeeping fee for SmallCap issuers was established 
pursuant to SR-NASD-2003-127. This fee, however, was erroneously 
numbered as Rule 4520(e) in the rule filing and should have been 
numbered as Rule 4520(d) in order to maintain continuity in Rule 
4520.
---------------------------------------------------------------------------

2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 15A of the Act,\5\ in general, and with 
Section 15A(b)(5) of the Act,\6\ in particular, in that the proposal 
provides for the equitable allocation of reasonable dues, fees, and 
other charges among members and issuers and other persons using any 
facility or system which the NASD operates or controls. Specifically, 
the revised fee schedules will eliminate or reduce the disparity in the 
entry and annual fees paid by Nasdaq issuers.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78o-3.
    \6\ 15 U.S.C. 78o-3(b)(5).
---------------------------------------------------------------------------

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 non-member issuers affected by the proposed rule change 
should be afforded the notice and comment periods under Section 
19(b)(2) of the Act,\7\ the Commission does not find good cause to 
accelerate approval of this proposal, as Nasdaq requested to ``minimize 
potential uncertainty or administrative difficulties.'' Within 35 days 
of the date of publication of this notice in the Federal Register or 
within such longer period (i) as the Commission may designate up to 90 
days of such date if it finds such longer period to be appropriate and 
publishes its reasons for so finding or (ii) as to which the Exchange 
consents, the Commission will:
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(2).
---------------------------------------------------------------------------

    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determinate whether the proposed rule 
change should be 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 in consistent with the Act. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. 
Comments should be submitted electronically at the following e-mail 
address: [email protected]. All comment letters should refer to 
File No. SR-NASD-2003-174. 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, comments should be sent in hard 
copy or by e-mail but not by both methods. 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 inspection and copying in the Commission's Public 
Reference Room. Copies of such filing will also be available for 
inspection and copying at the principal office of the NASD. All 
submissions should refer to file number SR-NASD-2003-178 and should be 
submitted by January 5, 2004.


[[Page 69738]]


    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 03-30984 Filed 12-12-03; 8:45 am]
BILLING CODE 8010-01-P