[Federal Register Volume 70, Number 162 (Tuesday, August 23, 2005)]
[Notices]
[Pages 49347-49349]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4593]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52277; File No. SR-NASD-2005-096]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Regarding Nasdaq Listing Fees for Closed-End Funds

August 17, 2005.
    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 July 29, 2005, 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 and 
II below, which Items have been prepared by Nasdaq. On August 15, 2005, 
the Exchange amended the proposed rule change (``Amendment No. 1'').\3\ 
Nasdaq has filed the proposal as a ``non-controversial'' rule change 
pursuant to Section 19(b)(3)(A) of the Act \4\ and Rule 19b-4(f)(6) 
thereunder,\5\ which renders the proposal effective upon filing with 
the Commission.\6\ The Commission is publishing this notice to solicit 
comments on the proposed rule change, as amended, from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the Exchange deleted the proposed rule 
changes to NASD Rule 4520 that were included in the Exchange's 
original filing with the Commission on July 29, 2005.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(6).
    \6\ The Nasdaq asked the Commission to waive the 30-day 
operative delya. See Rule 19b-4(f)(6)(iii). 17 CFR 240.19b-
4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes changes to NASD Rule 4510. The text of the proposed 
rule change, as amended, is below. Proposed new language is italicized; 
proposed deletions are in [brackets].
* * * * *
    4510. The Nasdaq National Market
    (a) Entry Fee
    (1)-(2) No change.
    (3) A closed-end management investment company registered under the 
Investment Company Act of 1940, as amended (a ``Closed-End Fund''), 
that submits an application for a class of securities in The Nasdaq 
National Market shall pay to the Nasdaq Stock Market, Inc. an entry fee 
of $5,000 (of which $1,000 represents a non-refundable, application 
fee).
    ([3]4) An issuer that submits an application for inclusion of any 
class of rights in The Nasdaq National Market, shall pay, at the time 
of its application, a non-refundable application fee of $1,000 to The 
Nasdaq Stock Market, Inc.
    ([4]5) The Board of Directors of The Nasdaq Stock [National] 
Market, Inc. or its designee may, in its discretion, defer or waive all 
or any part of the entry fee prescribed herein.
    ([5]6) If the application is withdrawn or is not approved, the 
entry fee (less the non-refundable application fee) shall be refunded.
    ([6]7) The fees described in this Rule 4510(a) shall not be 
applicable with respect to any securities that (i) are listed on a 
national securities exchange but not listed on Nasdaq, or (ii) are 
listed on the New York Stock Exchange and Nasdaq, if the issuer of such 
securities transfers their listing exclusively to the Nasdaq National 
Market.
    ([7]8) The fees described in this Rule 4510(a) shall not be 
applicable to an issuer (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

[[Page 49348]]

listing on Nasdaq, and (ii) that maintains such listing and designation 
after it lists such securities on Nasdaq.
    (b) No change
    (c) Annual Fee--Domestic and Foreign Issues
    (1) The issuer of each class of securities (not otherwise 
identified in this Rule 4500 series) [other than an ADR,] that is a 
domestic or foreign issue listed in The Nasdaq National Market shall 
pay to The Nasdaq Stock Market, Inc. an annual fee calculated on total 
shares outstanding according to the following schedule:

Up to 10 million shares--$24,500
10+ to 25 million shares--$30,500
25+ to 50 million shares--$34,500
50+ to 75 million shares--$44,500
75+ to 100 million shares--$61,750
Over 100 million shares--$75,000

    (2)-(5) No change.
    (d) Annual Fee--American Depositary Receipts (ADRs) and Closed-End 
Funds
    (1)-(2) No change.
    (3) A Closed-End Fund listed in The Nasdaq National Market shall 
pay to The Nasdaq Stock Market, Inc. an annual fee calculated based on 
total shares outstanding according to the following schedule:

Up to 5 million shares--$15,000
5+ to 10 million shares--$17,500
10+ to 25 million shares--$20,000
25+ to 50 million shares--$22,500
50+ to 100 million shares--$30,000
100+ to 250 million shares--$50,000
Over 250 million shares--$75,000

    (4) 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 in The Nasdaq National Market, as shown 
in the issuer's most recent periodic reports required to be filed with 
the appropriate regulatory authority or in more recent information held 
by Nasdaq. The maximum annual fee applicable to a fund family shall not 
exceed $75,000. For purposes of this rule, a ``fund family'' is defined 
as two or more Closed-End Funds that have a common investment adviser 
or have investment advisers who are ``affiliated persons'' as defined 
in Section 2(a)(3) of the Investment Company Act of 1940, as amended.
    ([3]5) The Board of Directors of The Nasdaq Stock Market, Inc. or 
its designee may, in its discretion, defer or waive all or any part of 
the annual fee prescribed herein.
    ([4]6) If a class of securities is removed from the Nasdaq National 
Market, that portion of the annual fees for such class of securities 
attributable to the months following the date of removal shall not be 
refunded, except such portion shall be applied to The Nasdaq SmallCap 
Market fees for that calendar year.
    (e) No change.
* * * * *

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 the purpose of and basis for the proposed rule change, as 
amended, 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
    Currently, Closed-End Funds listing on The Nasdaq National Market 
are required to pay entry and annual fees according to the applicable 
fee schedules set forth in NASD Rule 4510.\7\ These entry fees range 
from $100,000 to $150,000 and the annual fees from $15,000 to $75,000.
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    \7\ Closed-End Funds are evaluated for listing on the Nasdaq 
National Market under the general initial listing criteria contained 
in NASD Rules 4420(a), (b) or (c).
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    Pursuant to the proposed rule change, as amended, the entry fee for 
listing a Closed-End Fund on the National Market will decrease to 
$5,000 (of which $1,000 is a non-refundable application fee) per fund. 
Annual fees will be based on the total number of shares outstanding, 
with a minimum fee of $15,000 and a maximum fee of $75,000. For the 
purposes of determining the annual fee, fund sponsors will be permitted 
to aggregate the shares outstanding of all Closed-End Funds listed on 
the Nasdaq National Market that are part of the fund family. As a 
result, the annual fee may not exceed $75,000 per fund family. For the 
purposes of this rule, a ``fund family'' is defined as two or more 
Closed-End Funds that share a common investment adviser or investment 
advisers who are ``affiliated persons'' as defined in Section 2(a)(3) 
of the Investment Company Act of 1940, as amended.
    Nasdaq believes there are several reasons to adopt new fees 
applicable to Closed-End Funds. First, the new annual fee schedule will 
accommodate the needs of fund sponsors more effectively than the 
current fee schedule because sponsors often choose to issue and list 
multiple funds in the same family. Currently, each fund that is listed 
on Nasdaq is assessed a separate annual fee. Capping annual fees at 
$75,000 per fund family will benefit fund sponsors and investors by 
reducing the costs associated with issuing fund shares.
    Second, in cases where multiple funds are listed, the new fee 
schedule will substantially lower fees payable by Closed-End Funds, 
permitting Nasdaq to compete more effectively for listings with other 
markets. In this regard, Nasdaq notes that the new entry fees are 
similar to entry fees charged by the American Stock Exchange for 
listing Closed-End Funds.\8\
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    \8\ See Annex Company Guide Section 140.
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    Nasdaq represents that the new fees proposed herein reflect a 
lowering of existing fees applicable to issuers of closed-end funds, 
listed on the Nasdaq National Market.\9\
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    \9\ Telephone call between Yolanda Goettsch, Associate General 
Counsel, Nasdaq, and Forence Harmon, Senior Special Counsel, 
Commission, on August 12, 2005.
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2. Statutory Basis
    Nasdaq believes that the proposed rule change, as amended, is 
consistent with the provisions of Section 15A of the Act,\10\ in 
general, and with Section 15A(b)(5) of the Act,\11\ in particular, in 
that it provides for the equitable allocation of reasonable fees, dues, 
and other charges among members and issuers and other persons using any 
facility or system which the NASD operates or controls. The proposed 
change to the entry and annual fees will apply equally to all Closed-
End Funds listing on The Nasdaq National Market. Furthermore, Nasdaq 
believes that the proposed fees are reasonable and fall within the 
range of fees charged by other markets.
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    \10\ 15 U.S.C. 78o-3.
    \11\ 15 U.S.C. 78o-3(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq does not believe that the proposed rule change, as amended, 
will result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act.

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.

[[Page 49349]]

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing proposed rule change has become effective pursuant to 
Section 19(b)(3)(A) of the Act \12\ and Rule 19b-4(f)(6) thereunder 
\13\ because the proposal: (i) Does not significantly affect the 
protection of investors or the public interest; (ii) does not impose 
any significant burden on competition; and (iii) does not become 
operative prior to 30 days after the date of filing or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest; provided that Nasdaq has given 
the Commission notice of its intent to file the proposed rule change, 
along with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
Nasdaq satisfied the five-day pre-filing requirement.
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(b)(iii), the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. Nasdaq has asked the 
Commission to waive the 30-day operative delay.\15\ The Commission 
believes that such waiver is consistent with the protection of 
investors and the public interest because the proposed rule change 
would lower listing fees for closed-end funds which may benefit those 
who invest in such funds by reducing the costs associated with the 
issuance of the shares. For this reason, the Commission designates the 
proposed rule change, as amended, to be effective upon filing with the 
Commission.\16\
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    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission may summarily abrogate 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.\17\
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    \17\ The effective date of the original proposed rule change is 
July 29, 2005 and the effective date of the amendment is August 15, 
2005. For purposes of calculating the 60-day period within which the 
Commission may summarily abrogate the proposed rule change, as 
amended, under Section 19(b)(3)(C) of the Act, the Commission 
considers the period to commence on August 15, 2005, the date on 
which the NASD submitted Amendment No. 1. See 15 U.S.C. 
78s(b)(3)(C).
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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, as amended, is consistent with the Act. Comments may be 
submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number SR-NASD-2005-096 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, Station, Place, 100 F 
Street, NE., Washington, DC 20549-9303.
    All submissions should refer to File Number SR-NASD-2005-096. 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, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/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 inspection 
and copying in the Commission's Public Reference Room. Copies of the 
filing also will be available for inspection and copying at the 
principal office of the NASD. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-NASD-2005-096 and should be submitted on or before 
September 13, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4593 Filed 8-22-05; 8:45 am]
BILLING CODE 8010-01-P