[Federal Register Volume 74, Number 145 (Thursday, July 30, 2009)]
[Notices]
[Pages 38073-38075]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-18165]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60374; File No. SR-NASDAQ-2009-069]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Extend the Temporary Suspension of the Continued Listing Requirements 
Related to Bid Price and Market Value of Publicly Held Shares for 
Listing on the Nasdaq Stock Market Through July 31, 2009

July 23, 2009.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on July 13, 2009, The NASDAQ Stock Market LLC (``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. Nasdaq has designated the proposed rule 
change as effecting a change described under Rule 19b-4(f)(6) under the 
Act,\4\ which renders the proposal effective upon filing with the 
Commission. 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\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to extend the temporary suspension of the 
application of the continued inclusion bid price and market value of 
publicly held shares requirements for listing on the Nasdaq Stock 
Market through Friday, July 31, 2009.

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 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
    On October 16, 2008, Nasdaq filed a proposed rule change, which was 
immediately effective, to temporarily suspend the bid price \5\ and 
market value of publicly held shares \6\ continued listing requirements 
otherwise applicable to issuers of common stock, preferred stock, 
secondary classes of common stock, shares or certificates of beneficial 
interest of trusts, limited partnership interests, American Depositary 
Receipts, and their equivalents.\7\ This suspension was designed to 
provide temporary relief to companies from the application of these 
requirements during a period in which the financial markets face almost 
unprecedented turmoil, resulting in a crisis in investor confidence and 
concerns about the proper functioning of the securities markets.\8\ On 
December 18, 2008 and March 18, 2009, Nasdaq filed proposed rule 
changes to extend this suspension until April 19, 2009 and July 19, 
2009, respectively.\9\
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    \5\ Nasdaq's continued listing requirements relating to bid 
price are set forth in Rules 5450(a)(1), 5460(a)(3), 5550(a)(2) and 
5555(a)(1) and the related compliance periods are set forth in Rule 
5810(c)(3)(A). Under these rules, a security is considered deficient 
if it fails to achieve at least a $1 closing bid price for a period 
of 30 consecutive business days. Once deficient, Capital Market 
issuers are provided one automatic 180-day period to regain 
compliance. Thereafter, these issuers can receive an additional 180-
day compliance period if they comply with all Capital Market initial 
inclusion requirements except bid price. Global Market issuers are 
also provided one automatic 180-day period to regain compliance, 
after which they can transfer to the Capital Market, if they comply 
with all Capital Market initial inclusion requirements except bid 
price, to take advantage of the second 180-day compliance period. A 
company can regain compliance by achieving a $1 closing bid price 
for a minimum of ten consecutive business days.
    \6\ Nasdaq's continued listing requirements relating to market 
value of publicly held shares are set forth in Rules 5450(b)(1)(C), 
5450(b)(2)(C), 5450(b)(3)(C), 5460(a)(2), 5550(a)(5) and 5555(a)(4) 
and the related compliance periods are set forth in Rule 
5810(c)(3)(D). Under these rules, a security is considered deficient 
if it fails to achieve the minimum market value of publicly held 
shares requirement for a period of 30 consecutive business days. 
Thereafter, companies have a compliance period of 90 calendar days 
to achieve compliance by meeting the applicable standard for a 
minimum of ten consecutive business days.
    \7\ Securities Exchange Act Release No. 58809 (October 17, 
2008), 73 FR 63222 (October 23, 2008) (SR-NASDAQ-2008-082). One 
comment was submitted on this proposal by Alan F. Eisenberg, 
Executive Vice President, the Biotechnology Industry Organization. 
This comment supported the suspension and ``any efforts by the 
Commission and NASDAQ to extend [the suspension], as necessary, 
beyond the termination date of January 16, 2009.''
    \8\ See, e.g., Securities Exchange Act Release No. 58588 
(September 18, 2008), 73 FR 55174 (September 24, 2008) (``The 
Commission is aware of the continued potential of sudden and 
excessive fluctuations of securities prices and disruption in the 
functioning of the securities markets that could threaten fair and 
orderly markets. Given the importance of confidence in our financial 
markets as a whole, we have also become concerned about sudden and 
unexplained declines in the prices of securities. Such price 
declines can give rise to questions about the underlying financial 
condition of an issuer, which in turn can create a crisis of 
confidence without a fundamental underlying basis. This crisis of 
confidence can impair the liquidity and ultimate viability of an 
issuer, with potentially broad market consequences.'')
    \9\ Securities Exchange Act Release No. 59219 (January 8, 2009), 
74 FR 2640 (January 15, 2009) (SR-NASDAQ-2008-099). Securities 
Exchange Act Release No. 59661 (March 31, 2009), 74 FR 15561 (April 
6, 2009) (SR-NASDAQ-2009-026).
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    Nasdaq believes that a further extension of the suspension is 
appropriate to allow some additional time for market conditions to 
return to normal and for deficient companies to develop a plan to 
regain compliance with the continued listing requirements. Therefore, 
Nasdaq has determined to continue the temporary suspension of the bid 
price and market value of publicly held shares requirements for 
approximately two additional weeks, until Friday, July 31, 2009. Under 
this proposal, companies would not be cited for new bid price or market 
value of publicly held shares deficiencies during the suspension 
period, and the time allowed to companies already in a compliance 
period or in the hearings process for bid price or market value of 
publicly held shares deficiencies would remain suspended with respect 
to those requirements.\10\ Following the temporary suspension, any new 
deficiencies with the bid price or market value of publicly held shares 
requirements would be determined using data starting on Monday, August 
3, 2009.\11\ When the suspension expires, companies that were in a 
compliance period as of October 16, 2008, when the suspension first 
began, would receive the balance of any pending compliance periods in 
effect at the time of the initial suspension.\12\ Similarly, companies 
that

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were in the Hearings process prior to October 16, 2008, would resume in 
that process at the same stage they were in when the suspension first 
went into effect. Nasdaq will continue to monitor securities to 
determine if they regain compliance during the temporary suspension.
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    \10\ Nasdaq would continue to identify on its Web site and in 
its daily data feed to vendors those companies in a compliance 
period or in the hearings process as not satisfying the continued 
listing standards, unless the company regains compliance during the 
suspension. A company would continue to be subject to delisting for 
failure to comply with other listing requirements.
    \11\ Nasdaq would not consider the bid price or market value of 
publicly held shares for the period before or during the suspension 
with respect to a company that was not yet non-compliant with those 
requirements at the start of the suspension.
    \12\ For example, if a company was 120 days into its first 180-
day compliance period for a bid price deficiency when the suspension 
first started and the company does not regain compliance during the 
suspension, the company would have sixty days remaining, starting on 
Monday, August 3, 2009, to regain compliance. The company may be 
eligible for the second 180-day compliance period if it satisfies 
the conditions for the second compliance period at the conclusion of 
the first compliance period.
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    Based on discussions with the Commission Staff, Nasdaq does not 
expect a further extension of the suspension beyond July 31, 2009.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\13\ in general and with Section 
6(b)(5) of the Act,\14\ in particular in that it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest. The proposed rule change is 
designed to allow some additional time for market conditions to return 
to normal and for deficient companies to develop a plan to regain 
compliance with the continued listing requirements, thereby protecting 
investors, facilitating transactions in securities, and removing an 
impediment to a free and open market.
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    \13\ 15 U.S.C. 78f.
    \14\ 15 U.S.C. 78f(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 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

    While written comments were not solicited about the proposed 
extension, there was one comment submitted by the Biotechnology 
Industry Organization on the original suspension of the bid price and 
market value of publicly held shares requirements, which supported the 
extension. That comment is described in footnote 7, above.

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

    Because the proposed rule change: (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 for 30 days after the date of the filing, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest, the proposed rule change has 
become effective pursuant to Section 19(b)(3)(A) of the Act \15\ and 
Rule 19b-4(f)(6) thereunder.\16\
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6). Pursuant to Rule 19b-4(f)(6)(iii) 
under the Act, the Exchange is required to give the Commission 
written 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. 
The Commission has determined to waive this requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \17\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \18\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has requested that the Commission waive the 30-day operative delay.
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    \17\ 17 CFR 240.19b-4(f)(6).
    \18\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because it will allow Nasdaq to extend, through July 31, 2009, the 
temporary suspension of its bid price and market value of publicly held 
shares continued listing requirements. The Commission notes that the 
extension of the temporary suspension will continue to provide certain 
companies with temporary relief from receiving a deficiency or 
delisting notification, or from being delisted, and will provide some 
additional time to allow companies to regain compliance after the 
market volatility and conditions experienced earlier this year and last 
fall. The Commission notes that this action is temporary in nature, and 
that following the suspension, companies currently in the compliance 
period will resume at the same stage and receive the remaining balance 
of its compliance period if they remain non-compliant with these 
standards. For these reasons, the Commission designates that the 
proposed rule change become operative immediately upon filing.\19\
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    \19\ For purposes only of waiving the 30-day operative delay, 
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 the proposed rule 
change, the Commission may summarily abrogate the 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.

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

     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-NASDAQ-2009-069 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2009-069. 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, 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

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office of the Exchange. 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-NASDAQ-2009-069 and should be submitted on or before August 20, 
2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-18165 Filed 7-29-09; 8:45 am]
BILLING CODE 8010-01-P