[Federal Register Volume 77, Number 79 (Tuesday, April 24, 2012)]
[Notices]
[Pages 24549-24553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-9795]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66830; File No. SR-NASDAQ-2012-002]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing of Amendment No. 1 and Order Granting Accelerated 
Approval to Proposed Rule Change, as Modified by Amendment No. 1, To 
Adopt an Alternative to the $4 Per Share Initial Listing Bid Price 
Requirement for the Nasdaq Capital Market of Either $2 Closing Price 
Per Share or $3 Closing Price Per Share, if Certain Other Listing 
Requirements are Met

April 18, 2012.

I. Introduction

    On January 3, 2012, The NASDAQ Stock Market LLC (``Exchange'' or 
``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 
proposal to adopt an alternative to the $4 minimum bid price initial 
listing requirement for the Nasdaq Capital Market of either $2 or $3, 
if certain other listing requirements are met. The proposed rule change 
was published for comment in the Federal Register on January 20, 
2012.\3\ The Commission received one comment on the proposal.\4\ On 
March 1, 2012, the Commission extended to April 19, 2012 the time 
period in which to approve the proposed rule change, disapprove the 
proposed rule change, or institute proceedings to determine whether the 
proposed rule change should be disapproved.\5\ Nasdaq filed Amendment 
No. 1 to the proposed rule change on April 16, 2012.\6\ The Commission 
is

[[Page 24550]]

publishing this notice to solicit comments on Amendment No. 1 from 
interested persons and is approving the proposed rule change, as 
modified by Amendment No. 1, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 66159 (January 13, 
2012), 77 FR 3021 (January 20, 2012) (``Notice'').
    \4\ See letter from David A. Donohoe, Jr., Donohoe Advisory 
Associates LLC, to Elizabeth M. Murphy, Secretary, Commission, dated 
February 10, 2012 (``Donohoe Letter'').
    \5\ See Securities Exchange Act Release No. 66499 (March 1, 
2012), 77 FR 13680 (March 7, 2012).
    \6\ In Amendment No. 1, Nasdaq modified the proposal by, among 
other things: (1) Changing the alternative minimum price requirement 
from a bid price to a closing price that must be maintained for at 
least five consecutive business days; (2) stating that in the event 
a security listed under the alternative standard reaches a $4 
closing price, in determining whether the security qualifies for 
listing under the existing Nasdaq Capital Market listing requirement 
Nasdaq would review the security to ensure that it meets both the 
quantitative and qualitative listing standards and would require 
that the security maintain the closing price for five consecutive 
business days unless Nasdaq extends this five-day period to a longer 
period based on the facts and circumstances (Nasdaq would notify the 
issuer of any such qualification); (3) specifying that in 
determining whether a $4 closing price has been maintained for at 
least five consecutive business days in order to qualify for listing 
under the existing Nasdaq Capital Market listing requirement Nasdaq 
would use the Nasdaq Official Closing Price, if available, or the 
consolidated closing price; and (4) specifying that Nasdaq will 
update on a daily basis the list that it has proposed to publish on 
its Web site of securities that subsequently become penny stocks.
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II. Description of the Amended Proposal

    Currently, issuers seeking to list their securities on the Nasdaq 
Capital Market must meet, among other things, the initial listing 
standards of the Nasdaq Capital Market. The initial listing standards 
include quantitative and qualitative requirements. To qualify for 
listing on the Nasdaq Capital Market, an issuer's security must, among 
other things, have a minimum bid price of at least $4 per share.\7\
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    \7\ See Nasdaq Rule 5505(a)(1). The term ``bid price'' refers to 
the closing bid price. See Nasdaq Rule 5005(a)(3).
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    Nasdaq proposes to add an alternative to the $4 minimum bid price 
per share requirement. Under the proposed alternative, a security would 
qualify for listing on the Nasdaq Capital Market if, for at least five 
consecutive business days prior to approval, the security has a minimum 
closing price of at least $3 per share, if the issuer meets the Equity 
or Net Income standards,\8\ or at least $2 per share, if the issuer 
meets the Market Value of Listed Securities standard.\9\
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    \8\ See Nasdaq Rule 5505(b)(1) and Nasdaq Rule 5505(b)(3). Under 
the Equity Standard, an issuer would need to meet, among other 
things: (A) stockholders' equity of at least $5 million; (B) market 
value of publicly held shares of at least $15 million; and (C) two 
year operating history. Under the Net Income Standard, an issuer 
would have to meet, among other things: (A) Net income from 
continuing operations of $750,000 in the most recently completed 
fiscal year or in two of the three most recently completed fiscal 
years; (B) stockholders' equity of at least $4 million; and (C) 
market value of publicly held shares of at least $5 million.
    \9\ See Nasdaq Rule 5505(b)(2). Under the Market Value of Listed 
Securities Standard, an issuer would need to meet, among other 
things: (A) Market value of listed securities of at least $50 
million (current publicly traded issuers must meet this requirement 
and the price requirement for 90 consecutive trading days prior to 
applying for listing if qualifying to list only under the market 
value of listed securities standard); (B) stockholders' equity of at 
least $4 million; and (C) market value of publicly held shares of at 
least $15 million. Nasdaq proposes to revise Nasdaq Rule 5505(b)(2) 
in order to make it consistent with the proposal. In particular, 
Nasdaq Rule 5505(b)(2)(A) would be revised to delete the specific 
reference to $4 bid price requirement, since an issuer seeking to 
initially list its securities under the Market Value of Listed 
Securities Standard using the proposed alternative price requirement 
would have to maintain a closing price of at least $2 per share for 
90 consecutive trading days. See email from Arnold Golub, Vice 
President, Office of the General Counsel, Nasdaq, to Sharon Lawson, 
Senior Special Counsel, Division of Trading and Markets, Commission, 
on April 18, 2012.
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    Further, for issuers to qualify their securities under this 
alternative price requirement, the issuer must demonstrate that it has 
net tangible assets in excess of $2 million if the issuer has been in 
continuous operation for at least three years. If the issuer has been 
in continuous operation for less than three years, then the issuer must 
demonstrate net tangible assets in excess of $5 million. The issuer 
could also be listed under the alternative, lower $2 or $3 price 
requirement if the issuer has average revenue of at least $6 million 
for the last three years.\10\
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    \10\ Nasdaq would define net tangible assets or average revenues 
based on the issuer's most recently filed audited financial 
statements that satisfy the requirements of the Commission or Other 
Regulatory Authority, so long as such financial statements are dated 
less than 15 months prior to the date of listing. Nasdaq Rule 
5005(a)(31) defines ``Other Regulatory Authority'' as ``(i) in the 
case of a bank or savings authority identified in Section 12(i) of 
the Act, the agency vested with authority to enforce the provisions 
of Section 12 of the Act; or (ii) in the case of an insurance 
company that is subject to an exemption issued by the Commission 
that permits the listing of the security, notwithstanding its 
failure to be registered pursuant to section 12(b), the Commissioner 
of Insurance (or other officer or agency performing a similar 
function) of its domiciliary state.''
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    Nasdaq is proposing to add new interpretative material in 
connection with this alternative price requirement. Proposed IM-5505 
states that an issuer that qualifies its securities for initial listing 
under the alternative price requirement could become a ``penny stock'' 
if the issuer fails the net tangible assets and revenue tests after 
listing and does not satisfy any of the other exclusions from being a 
penny stock contained in Rule 3a51-1 under the Act.\11\ Nasdaq would 
monitor issuers whose securities are listed under the alternative price 
requirement, and publish on its Web site on a daily basis a list of 
those companies that no longer satisfy the net tangible assets or 
revenue tests, nor any other exclusions from being a penny stock under 
Rule 3a51-1. Moreover, the proposed IM-5505, as amended, would provide 
that if an issuer initially lists its securities under the proposed 
alternative price requirement and the securities subsequently achieve a 
$4 closing price over at least five consecutive business days \12\ and 
satisfy all other initial listing criteria, the securities would no 
longer be considered as having listed under the alternative price 
requirement, and would no longer be monitored for compliance with that 
requirement.\13\ In Amendment No. 1, Nasdaq amended the proposal to 
state that the $4 closing price would be the Nasdaq Official Closing 
Price,\14\ or if such price is not available, the consolidated closing 
price distributed under the applicable National Market System Plan. In 
Amendment No. 1, Nasdaq also stated that it would notify a company that 
initially lists its securities under the alternative standard of its 
subsequent qualification for listing under the $4 price requirement of 
Rule 5505(a)(1)(A).
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    \11\ See 17 CFR 240.3a51-1.
    \12\ See Amendment No. 1, note 6, supra. As provided in proposed 
Amendment No. 1 to IM-5505, Nasdaq may extend this five-day period 
based on any fact or circumstance, including the margin of 
compliance, the trading volume, the Market Maker montage, the trend 
of the security's price, or information or concerns raised by other 
regulators concerning the trading of the security.
    \13\ In Amendment No. 1 Nasdaq also clarified that, for purposes 
of satisfying the Market Value of Listed Securities Standard to be 
no longer treated as listed under the alternative standard, a 
company would be required to maintain for 90 consecutive trading 
days the market value of their listed securities at $50 million and 
a $4 bid price, although this 90-day period may overlap with the 
five-consecutive-business-day period during which the company must 
maintain a $4 closing price. The company would, of course, also have 
to meet the other remaining quantitative and qualitative listing 
standards to no longer be considered listed under the alternative 
standard and therefore no longer subject to the penny stock rules. 
See Nasdaq Rule 5505(b)(2)(A).
    \14\ See Nasdaq Rule 4754(b)(4) and Amendment No. 1, supra note 
6. In Amendment No. 1, Nasdaq stated that the Nasdaq Official 
Closing Price is set by the Nasdaq Closing Cross process, using an 
algorithm to find a price to match all eligible buy and sell orders 
at the close. Nasdaq stated that a closing cross occurs for every 
security listed on Nasdaq. If no trades occur as a result of the 
closing cross, then the Nasdaq Official Closing Price is the last 
matched trade that occurred that day on Nasdaq.
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    Nasdaq's stated purpose for its proposal is to compete with NYSE 
Amex for initial listings of companies with securities priced between 
$2 and $4.\15\ Currently, NYSE Amex is able to list companies priced 
between $2 and $4 without their securities being considered ``penny 
stocks,'' because NYSE Amex benefits from the ``grandfather'' exclusion 
set forth in Rule 3a51-1(a)(1) under the Act,\16\ which does not apply 
to Nasdaq.\17\ As

[[Page 24551]]

a result, in order to compete with NYSE Amex for listing securities 
priced between $2 and $4, and avoid their being considered ``penny 
stocks,'' Nasdaq's proposed Rule 5505(a)(1)(B) incorporates the net 
tangible assets and average revenue tests contained in the alternative 
penny stock exclusion set forth in Rule 3a51-1(g) under the Act \18\ so 
that Nasdaq can initially list companies priced between $2 and $4 on 
the Nasdaq Capital Market that are not considered ``penny stocks.'' 
\19\ As noted above, however, ongoing monitoring of listed companies 
relying on this alternative penny stock exclusion is required in order 
to assure they continue to meet the net tangible assets and average 
revenue tests set forth in that exclusion.
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    \15\ See Notice, supra at Note 3.
    \16\ 17 CFR 240.3a51-1(a)(1).
    \17\ See Notice, supra at Note 3; NYSE Amex Company Guide 
Section 102(b). Nasdaq filed a petition seeking an exemption from 
Rule 3a51-1(a)(2)(i)(C) to allow Nasdaq to adopt initial listing 
standards identical to NYSE Amex's or, in the alternative, 
elimination of the grandfather provision. See Notice, supra at Note 
3; see also Request for Rulemaking to Allow the Nasdaq Capital 
Market to Adopt Initial Listing Price Requirements Identical to NYSE 
Amex, File No. 4-604 (May 25, 2010).
    \18\ 17 CFR 240.3a51-1(g).
    \19\ See Notice, supra at Note 3.
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III. Comment Summary

    The Commission received one comment letter on the proposal, in 
which the commenter recommended that the Commission initiate a process 
to amend Rule 3a51-1 under the Act \20\ and then approve Nasdaq's 
proposal.\21\ The commenter noted that NYSE Amex's initial listing 
price requirements--$3 per share under three of NYSE Amex's listing 
standards and $2 per share under a fourth listing standard--are lower 
than Nasdaq's current $4 per share initial listing price 
requirement.\22\ The commenter stated his belief that this disparity is 
the main reason securities of companies trading between $2 and $4 per 
share list on NYSE Amex instead of the Nasdaq Capital Market.\23\ The 
commenter also expressed his belief that the Commission should ``level 
the playing field'' between NYSE Amex and Nasdaq.\24\ The commenter 
urged the Commission to focus on what changes to the penny stock rules 
must be made in order to eliminate the purported regulatory inequality 
between the two exchanges and carry out its mandate to ensure fair 
competition among the exchanges.\25\
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    \20\ 17 CFR 240.3a51-1(g).
    \21\ See Donohoe Letter.
    \22\ Id.
    \23\ Id.
    \24\ Id.
    \25\ Id.
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    Further, the commenter stated that the list of issuers published on 
Nasdaq's Web site would be ``unwieldy and certain to be less than fully 
transparent.'' \26\ The commenter suggested that this aspect of 
Nasdaq's proposal would ``allow the NYSE Amex to maintain a competitive 
advantage over Nasdaq'' because issuers listing on Nasdaq would risk 
being deemed a ``penny stock'' in the future whereas issuers listing on 
NYSE Amex incur no such risk.\27\ Again, the commenter suggested that 
the solution to this purported regulatory inequality is to amend the 
penny stock rules.\28\
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    \26\ Id.
    \27\ Id.
    \28\ Id.
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IV. Discussion and Commission's Findings

    After careful review, 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 
exchange.\29\ In particular, the Commission finds that the proposed 
rule change is consistent with Section 6(b)(5) of the Act,\30\ which 
requires, among other things, that the rules of a national securities 
exchange be 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; 
and not be designed to permit unfair discrimination between customers, 
issuers, brokers or dealers.
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    \29\ In approving this proposed rule change, as modified by 
Amendment No. 1, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. See 15 
U.S.C. 78c(f).
    \30\ 15 U.S.C. 78f(b)(5).
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    The development and enforcement of meaningful listing standards for 
an exchange is of substantial importance to financial markets and the 
investing public. Among other things, listing standards provide the 
means for an exchange to screen issuers that seek to become listed and 
to provide listed status only to those that are bona fide companies 
with sufficient public float, investor base, and trading interest 
likely to generate depth and liquidity sufficient to promote fair and 
orderly markets. Meaningful listing standards also are important given 
investor expectations regarding the nature of securities that have 
achieved an exchange listing, and the role of an exchange in overseeing 
its market, assuring compliance with its listing standards and 
detecting and deterring manipulative trading activity.
    Rule 3a51-1 under the Act \31\ defines ``penny stock'' as any 
equity security that does not satisfy one of the exceptions enumerated 
in subparagraphs (a) through (g) under the Rule. If a security is a 
penny stock, Rules 15g-1 through 15g-9 under the Act \32\ impose 
certain additional disclosure and other requirements on brokers and 
dealers when effecting transactions in such securities. Currently, 
Nasdaq-listed securities are not considered penny stocks because they 
comply with the requirements in Rule 3a51-1(a)(2) under the Act,\33\ 
which excepts from the definition of penny stock securities registered 
on a national securities exchanges that have initial listing standards 
that meet certain requirements, including a $4 bid price at the time of 
listing. Nasdaq listing standards currently include all the 
requirements to qualify for the penny stock exception under Rule 3a51-
1(a)(2) so that today, once a security is initially listed on Nasdaq, 
the security will not be considered a penny stock for so long as it is 
listed on Nasdaq.
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    \31\ 17 CFR 240.3a51-1.
    \32\ 17 CFR 240.15g-1 et seq.
    \33\ 17 CFR 240.3a51-1(a)(2).
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    As noted above, the penny stock rules also exclude from the 
definition of penny stock, under a ``grandfather'' provision, 
securities registered on a national securities exchange that has been 
continually registered as such since April 20, 1992, and has maintained 
quantitative listing standards that are substantially similar to or 
stricter than those listing standards that were in place on the 
exchange on January 8, 2004.\34\ NYSE Amex meets this standard, but 
Nasdaq, which was more recently registered as a national securities 
exchange, does not. Accordingly, NYSE Amex's initial listing price 
requirements of either $2 or $3 are grandfathered under this provision. 
Nasdaq has proposed its alternative price listing requirement in order 
to compete with NYSE Amex for listings of securities priced between $2 
and $4.
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    \34\ See 17 CFR 240.3a51-1(a)(1).
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    The Commission has carefully considered Nasdaq's proposal under the 
Exchange Act requirements. Under Nasdaq's proposed alternative price 
standard, companies that maintain a $2 or $3 closing price for at least 
five consecutive business days would qualify for listing if, among 
other things, they meet the net tangible assets or average revenue 
tests of the alternative penny stock exclusion set forth in Rule

[[Page 24552]]

3a51-1(g).\35\ This presents novel issues since it is the first time 
that an exchange-listed security could become subject to the penny 
stock rules following initial listing if it no longer meets the net 
tangible assets or average revenue tests of the alternative exclusion, 
and does not qualify for another exclusion under the penny stock 
rules.\36\ Further, unlike securities listed under Nasdaq's existing 
standards, which have a blanket exclusion from the penny stock rules, 
broker-dealers that effect recommended transactions in securities that 
originally qualified for listing under Nasdaq's alternative price 
standard would, among other things, under Rule 3a51-1(g), need to 
review current financial statements of the issuer to verify that it 
meets the applicable net tangible assets or average revenue test, have 
a reasonable basis for believing they remain accurate, and preserve 
copies of those financial statements as part of its records.
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    \35\ See 17 CFR 240.3a51-1(g). As set forth in note 9, supra, a 
company seeking to qualify under only the Market Value of Listed 
Securities Standard would, among other things, also be required to 
maintain for 90 consecutive trading days the market value of their 
listed securities at $50 million and the $2 price requirement prior 
to applying to list under the alternative standard.
    \36\ The Commission has previously noted the potential for abuse 
with respect to penny stocks. See, e.g., Securities Exchange Act 
Release No. 49037 (January 16, 2004), 69 FR 2531 (January 8, 2004) 
(``Our original penny stock rules reflected Congress' view that many 
of the abuses occurring in the penny stock market were caused by the 
lack of publicly available information about the market in general 
and about the price and trading volume of particular penny 
stocks'').
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    To facilitate compliance by broker-dealers, Nasdaq has committed to 
monitor the companies listed under the alternative price standard and 
to publish on its Web site, and update daily, a list of any such 
company that no longer meets the net tangible assets or average revenue 
tests of the penny stock exclusion, and which does not satisfy any 
other penny stock exclusion. Nasdaq also specifically reminds broker-
dealers of their obligations under the penny stock rules. The 
Commission believes that, although the listing of securities that do 
not have a blanket exclusion from the penny stock rules and require 
ongoing monitoring may increase compliance burdens on broker-dealers, 
the additional steps proposed by Nasdaq to facilitate compliance should 
reduce those burdens and that, on balance, Nasdaq's proposal is 
consistent with the requirement of Section 6(b)(5) of the Act that the 
rules of an exchange, among other things, be designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade and, in general, to protect investors and 
the public interest.
    Further, to address concerns about the potential manipulation of 
lower priced stocks to meet the initial listing requirements, Nasdaq 
has amended its proposal to require a company to maintain a $2 or $3 
closing price for five consecutive business days prior to approval for 
listing, rather than on a single day, as proposed.\37\ The Commission 
believes that requiring the minimum $2 or $3 closing price to be 
maintained for a longer period should reduce the risk that some might 
attempt to manipulate or otherwise artificially inflate the closing 
price in order to allow a security to qualify for listing. In addition, 
Nasdaq has noted that it would exercise its discretionary authority to 
deny initial listing if there were particular concerns about an issuer, 
such as its ability to maintain compliance with continued listing 
standards or if there were other public interest concerns. The 
Commission believes these additional measures, in conjunction with 
Nasdaq's surveillance procedures and pre-listing qualification review, 
should help reduce the potential for price manipulation to meet the new 
initial listing standards, and in this respect are designed to prevent 
fraudulent and manipulative acts and practices consistent with Section 
6(b)(5) of the Act.
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    \37\ The Commission notes that Nasdaq's current rules only 
require a company to achieve a $4 bid price on a single day to 
qualify for initial listing, except for reverse merger companies, 
which have to maintain a closing price of $4 per share or higher for 
a sustained period of time, but in no event for less than 30 of the 
most recent 60 trading days. See Nasdaq Rule 5110(c)(1)(B) and 
(c)(2)(B).
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    Additionally, under Nasdaq's proposal, if securities listed under 
the alternative price listing standard subsequently achieve a $4 
closing price over at least five consecutive business days, and the 
issuer and the securities satisfy all other relevant initial listing 
criteria, then such securities would no longer be considered as having 
listed under the alternative price requirement. As with the initial $2 
and $3 closing price requirements, the Commission has considered 
whether this provision could provide an incentive for market 
participants to manipulate the price of the security in order to 
achieve the $4 closing price and no longer be considered as having 
listed under the alternative price requirement. The Commission notes 
that Nasdaq has taken several steps to address these concerns. First, 
Nasdaq has represented that it would conduct a robust, wholesale review 
of the issuer's compliance with all applicable initial listing 
criteria, including qualitative and quantitative standards, at the time 
the $4 closing price is achieved, and would have a reasonable basis to 
believe that that price was legitimately, and not manipulatively, 
achieved. Secondly, Nasdaq has further represented that it is 
developing enhanced surveillance procedures to monitor securities 
listed under the alternative price requirement as they approach $4 to 
identify anomalous trading that would be indicative of potential price 
manipulation. Finally, the amended proposal requires the $4 closing 
price to be met over at least a five consecutive business day period in 
order to reduce the potential for price manipulation. The Commission 
believes that these measures should help reduce the potential for price 
manipulation to achieve the $4 closing price, and in this respect are 
designed to prevent fraudulent and manipulative acts and practices 
consistent with Section 6(b)(5) of the Act.\38\
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    \38\ We note that the commenter recommended that the Commission 
instead amend the penny stock rules to level the playing field 
between Nasdaq and NYSE Amex, and eliminate what he views as 
regulatory inequality between the two exchanges. The Commission, 
however, notes that the proposal before the Commission must be 
considered on its merits in accordance with the substantive and 
procedural requirements of Section 19(b) under the Act. 15 U.S.C. 
78s(b).
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    In sum, the Commission believes that the Nasdaq proposal, as 
amended, reasonably addresses the concerns discussed above. We also 
note that Nasdaq's proposal is more rigorous than existing NYSE Amex 
listing standards in that it additionally requires the net tangible 
assets or average revenue test set forth in Rule 3a51-1(g) to be met. 
For the reasons set forth above, the Commission finds that the proposed 
rule change is consistent withthe Act, including the provisions of 
Section 6(b)(5) thereunder.

V. Solicitation of Comments of Amendment No. 1

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether Amendment No. 1 
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 email to [email protected]. Please include 
File Number SR-NASDAQ-2012-002 on the subject line.

[[Page 24553]]

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-2012-002. 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 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 Web site 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 Nasdaq. 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-2012-002 and should 
be submitted on or before May 15, 2012.

VI. Accelerated Approval of Proposed Rule Change, as Modified by 
Amendment No. 1

    Amendment No. 1 revises the proposal to, among other things, change 
the minimum bid price requirement to a closing price, require that a 
security must have a $4 closing price for at least five consecutive 
business days, rather than one day as originally proposed, before it 
will be reevaluated under both the qualitative and quantitative initial 
listing standards, and require daily publication of the list of 
securities that become subject to the penny stock rules. The Commission 
believes that the changes in Amendment No. 1 strengthen the proposal 
and, as discussed above, address concerns about the potential for 
manipulation. Accordingly, the Commission also finds good cause, 
pursuant to Section 19(b)(2) of the Act,\39\ for approving the proposed 
rule change, as modified by Amendment No. 1, prior to the 30th day 
after the date of publication of notice in the Federal Register.
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    \39\ 15 U.S.C. 78s(b)(2).
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VII. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\40\ that the proposed rule change (SR-NASDAQ-2012-002), as 
modified by Amendment No. 1, is approved on an accelerated basis.
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    \40\ 15 U.S.C. 78s(b)(2).
    \41\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\41\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-9795 Filed 4-23-12; 8:45 am]
BILLING CODE 8011-01-P