[Federal Register Volume 82, Number 197 (Friday, October 13, 2017)]
[Notices]
[Pages 47780-47782]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-22159]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81837; File No. SR-NASDAQ-2017-096]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Waive Nasdaq's Entry Fee When a New Entity Lists in Connection With 
Certain Transactions Between Two or More Nasdaq-Listed Companies

October 6, 2017.
    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 September 26, 2017, The NASDAQ Stock Market LLC (``Nasdaq'' or the 
``Exchange'') 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 the Exchange. 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\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to waive Nasdaq's Entry Fee when a new entity 
lists in connection with a transaction between two or more Nasdaq-
listed companies (or involving assets from such companies), where at 
least one of the Nasdaq-listed companies ceases to be separately 
listed.
    The text of the proposed rule change is set forth below. Proposed 
new language is italicized; deleted text is in brackets.
* * * * *

5910. The Nasdaq Global Market (including the Nasdaq Global Select 
Market)

(a) Entry Fee

    (1)-(6) No change.
    (7) The fees described in this Rule 5910(a) shall not be applicable 
with respect to any securities that:
    (i) No change.
    (ii) are listed on the New York Stock Exchange and Nasdaq, if the 
issuer of such securities ceases to maintain their listing on the New 
York Stock Exchange and the securities instead are designated as 
national market securities under Rule 5220; [or]
    (iii) are listed on another national securities exchange but not 
listed on

[[Page 47781]]

Nasdaq, if the issuer of such securities is acquired by an unlisted 
company and, in connection with the acquisition, the unlisted company 
lists exclusively on the Nasdaq Global Market; or
    (iv) are listed on Nasdaq by a newly formed Company resulting from 
a transaction between two or more Nasdaq-listed Companies (or involving 
assets from such Companies), where at least one of the Nasdaq-listed 
Companies ceases to be separately listed.
    (8)-(11) No change.
    (b)-(f) No change.
* * * * *

5920. The Nasdaq Capital Market

(a) Entry Fee

    (1)-(6) No change.
    (7) The fees described in this Rule 5920(a) shall not be applicable 
with respect to any securities that:
    (i) No change.
    (ii) are listed on the New York Stock Exchange and Nasdaq, if the 
issuer of such securities ceases to maintain their listing on the New 
York Stock Exchange and the securities instead are designated under the 
plan applicable to Nasdaq Capital Market securities; [or]
    (iii) are listed on another national securities exchange, if the 
issuer of such securities is acquired by an unlisted company and, in 
connection with the acquisition, the unlisted company lists exclusively 
on the Nasdaq Capital Market; or
    (iv) are listed on Nasdaq by a newly formed Company resulting from 
a transaction between two or more Nasdaq-listed Companies (or involving 
assets from such Companies), where at least one of the Nasdaq-listed 
Companies ceases to be separately listed.
    (8)-(11) No change.
    (b)-(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, the Exchange 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. The Exchange 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to adopt a waiver of 
Nasdaq's entry fee for a newly formed company resulting from a 
transaction between two or more Nasdaq-listed companies (or involving 
assets from such companies), where at least one of the Nasdaq-listed 
companies ceases to be separately listed.
    Nasdaq charges most newly listing companies an entry fee, but 
excludes certain new listings from that fee where it believes it is 
equitable to do so. For example, Nasdaq does not charge an entry fee 
for companies that transfer from another national securities exchange 
given that these companies had previously paid an entry fee to that 
other exchange and to encourage companies to switch their listing to 
Nasdaq.\3\ In addition, Nasdaq does not charge an entry fee for a 
previously unlisted company that lists in connection with a transaction 
whereby it acquires a company listed on another national securities 
exchange because this situation is similar to a company switching its 
listing.\4\
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    \3\ Nasdaq Rules 5910(a)(7)(i) and 5920(a)(7)(i).
    \4\ Nasdaq Rules 5910(a)(7)(iii) and 5920(a)(7)(iii).
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    Nasdaq now proposes to exclude an additional category of companies 
from the entry fee: Newly formed companies resulting from a transaction 
between two or more Nasdaq-listed companies (or involving assets from 
such companies) where at least one of the Nasdaq-listed companies 
ceases to be separately listed. In such a case, while there may 
technically be a new legal entity created and listed for the first 
time, at least one of the companies ceases to be separately listed and 
so Nasdaq believes it is equitable to treat the new combined company as 
succeeding to that listing, which has already been subject to the 
applicable entry fees. In addition, given that all companies involved 
in the transaction are already listed on Nasdaq, the Exchange's 
regulatory staff will already be familiar with the companies and the 
transaction and the companies will be familiar with the Exchange's 
rules, which will result in a reduced burden on staff to review the new 
company than would otherwise be the case.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\5\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\6\ in particular, in that it provides 
for the equitable allocation of reasonable dues, fees and other charges 
among members and issuers and other persons using any facility, and is 
not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4) and (5).
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    As a preliminary matter, Nasdaq competes for listings with other 
national securities exchanges and companies can easily choose to list 
on, or transfer to, those alternative venues. As a result, the fees 
Nasdaq can charge listed companies are constrained by the fees charged 
by its competitors and Nasdaq cannot charge prices in a manner that 
would be unreasonable, inequitable, or unfairly discriminatory.
    Nasdaq believes that the proposed waiver of Nasdaq's entry fee for 
a newly formed company resulting from a transaction between two or more 
Nasdaq-listed companies (or involving assets from such companies), 
where at least one of the Nasdaq-listed companies ceases to be 
separately listed, is reasonable and not unfairly discriminatory 
because it recognizes that the new combined company is essentially 
succeeding to the listing of the company that ceases to be separately 
listed in the transaction, which has already been subject to the 
applicable entry fees. In addition, given that all companies involved 
in the transaction are already listed on Nasdaq, the Exchange's 
regulatory staff will already be familiar with the companies and the 
transaction and the companies will be familiar with the Exchange's 
rules, which will result in a reduced burden on staff to review the new 
company than would otherwise be the case. These are non-discriminatory 
reasons to waive the fee for this situation. Nasdaq also notes that the 
proposed waiver would be applied in the same manner to all similarly 
situated companies.
    Nasdaq also believes that the proposed waiver is not unfairly 
discriminatory in that it will encourage the new company to remain 
listed on Nasdaq at a time when the company is undergoing a change and 
may otherwise consider alternative listing venues. This competitive 
dynamic provides an additional reason as to why it is appropriate to 
distinguish companies in this situation from other new listings.
    Finally, Nasdaq believes that the proposed fees are consistent with 
the investor protection objectives of Section

[[Page 47782]]

6(b)(5) of the Act \7\ in that they are designed to promote just and 
equitable principles of trade, to remove impediments to a free and open 
market and national market system, and in general to protect investors 
and the public interest. Specifically, the amount of revenue forgone by 
this limited waiver of Nasdaq's entry fee is not substantial, and may 
result in more companies remaining listed on Nasdaq in connection with 
such transactions, thereby increasing the resources available for 
Nasdaq's listing compliance program, which helps to assure that listing 
standards are properly enforced and investors are protected. 
Consequently, Nasdaq believes that the potential loss of revenue from 
this change will not hinder its ability to fulfill its regulatory 
responsibilities.
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    \7\ 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 impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The market for listing services 
is extremely competitive and listed companies may freely choose 
alternative venues based on the aggregate fees assessed, and the value 
provided by each listing. In such an environment, Nasdaq must 
continually adjust its fees to remain competitive with other exchanges. 
Because other listing venues are similarly free to modify their own 
fees in response, Nasdaq believes that the degree to which fee changes 
in this market may impose any burden on competition is extremely 
limited.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\8\
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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule should be approved or 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 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-2017-096 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2017-096. 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 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal 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-2017-096, and should 
be submitted on or before November 3, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-22159 Filed 10-12-17; 8:45 am]
 BILLING CODE 8011-01-P