[Federal Register Volume 69, Number 242 (Friday, December 17, 2004)]
[Notices]
[Pages 75578-75579]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-3706]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50838; File No. SR-NASD-2004-128]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Order Granting Approval of Proposed Rule Change To 
Modify the Annual Fee for Certain Issuers Listed on the Nasdaq Stock 
Market, Inc.

December 10, 2004.

I. Introduction

    On August 25, 2004, 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''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to modify the annual fee for domestic and foreign 
issuers (other than American Depositary Receipts) listed on the Nasdaq 
National Market and for all issuers listed on The Nasdaq SmallCap 
Market. The proposed rule change was published for notice and comment 
in the Federal Register on October 28, 2004.\3\ The Commission received 
no comments in response to the proposal as published in the Federal 
Register. The Nasdaq Office of General Counsel, however, received one 
comment letter before the proposal was published for comment.\4\ This 
order approves the proposed rule change as filed.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 50577 (Oct. 21, 
2004), 69 FR 62926 (Oct. 28, 2004). Footnote number 3 of the release 
incorrectly identified Mr. Golub; his correct information is: Arnold 
Golub, Office of General Counsel, Nasdaq.
    \4\ See letter from Dorrance W. Lamb, Chief Financial Officer, 
Performance Technologies, Inc., to Nasdaq Office of General Counsel, 
dated October 20, 2004.
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II. Summary of Comments

    The Nasdaq's Office of General Counsel received one letter in 
response to an e-mail it sent to listed issuers, before the proposal 
was published in the Federal Register, notifying listed issuers of the 
planned rule filing and the potential fee increase.\5\ The commenter 
did not file a comment on the proposal with the Commission; however, 
the Nasdaq forwarded the letter to the Commission and the Commission 
placed the letter in the public file. The commenter opposed the 
proposed increase in the annual fee and expressed concern over the fee 
for the listing of additional shares. In particular, the commenter 
opined that the fee charged for listing additional shares unfairly 
burdens listed issuers who reissue treasury shares as a result of stock 
option exercises and, accordingly, can result in total fees consistent 
with, or more than, the fees charged to listed issuers with a higher 
range of total shares outstanding.
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    \5\ See id. The proposal was published in the Federal Register 
on October 28, 2004, eight days after the date of Performance 
Technologies, Inc.'s letter to Nasdaq.
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III. The Nasdaq's Response to the Comment

    The Nasdaq acknowledged the commenter's concerns, but explained 
that the Nasdaq does not charge the fee for listing additional shares 
in connection with the reissuance of treasury shares.\6\ Further, the 
Nasdaq affirmed that the proposed fee schedule does not, by its terms, 
preference any class of listed issuers, but rather applies equally to 
all similarly situated listed issuers.\7\ The Nasdaq also noted that 
issuers falling into a higher total shares outstanding category 
similarly would be subject to the fee for listing additional shares, 
which fee would be proportionate to their total shares outstanding.\8\ 
The Commission believes that the Nasdaq's response to the commenter's 
concerns is reasonable.
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    \6\ Telephone conference between Arnold Golub, Office of General 
Counsel, Nasdaq, and Richard Holley, Attorney, Division of Market 
Regulation, Commission, on December 3, 2004.
    \7\ See id.
    \8\ See id.
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IV. Discussion and Commission Findings

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities

[[Page 75579]]

association,\9\ and, in particular, the requirements of Section 
15A(b)(5) of the Act.\10\ The Commission believes that the proposed 
rule change will result in the equitable allocation of annual fees 
among listed issuers. The Commission notes that the Nasdaq plans to use 
the proposed fee increase to support its ongoing costs of issuer 
services and to fund future product and service investments.
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    \9\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \10\ 15 U.S.C. 78o-3(b)(5).
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V. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-NASD-2004-128) be, and it 
hereby is, approved.
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    \11\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E4-3706 Filed 12-16-04; 8:45 am]
BILLING CODE 8010-01-P