[Federal Register Volume 84, Number 224 (Wednesday, November 20, 2019)]
[Notices]
[Pages 64168-64170]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25108]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87538; File No. SR-NASDAQ-2019-087]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify Certain Annual Listing Fees
November 14, 2019.
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 November 6, 2019, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``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 modify certain listing fees. While changes
proposed herein are effective upon filing, the Exchange has designated
the proposed amendments to be operative on January 1, 2020.
The text of the proposed rule change is available on the Exchange's
website at http://nasdaq.cchwallstreet.com/, at the principal office of
the Exchange, and at the Commission's Public Reference Room.
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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to modify the Exchange's
all-inclusive annual listing fees for all domestic and foreign
companies listing equity securities covered by Listing Rules 5910 and
5920 on the Nasdaq Global Select, Global and Capital Markets.
Currently, for companies listed on the Capital Market, other than,
in part, ADRs, Closed-end Funds and Limited Partnerships, the all-
inclusive annual fee ranges from $42,000 to $75,000; for ADRs listed on
the Capital Market the all-inclusive annual fee ranges from $42,000 to
$50,000; and for Limited Partnerships listed on the Capital Market the
all-inclusive annual fee ranges from $30,000 to $37,500. On the Global
and Global Select Markets, the all-inclusive annual fee for companies
other than, in part, ADRs, Closed-end Funds and Limited Partnerships
ranges from $45,000 to $155,000; for ADRs the all-inclusive annual fee
ranges from $45,000 to $80,000; and for Limited Partnerships the all-
inclusive annual fee ranges from $37,500 to $77,500. The all-inclusive
annual fee for Closed-end Funds listed on any market tier ranges from
$30,000 to $100,000. In each case, a company's all-inclusive annual fee
is based on its total shares outstanding.\3\
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\3\ REITs are subject to the same fee schedule as other equity
securities; however for the purpose of determining the total shares
outstanding, shares outstanding of all members in a REIT Family
listed on the same Nasdaq market tier may be aggregated. Similarly,
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 on the Nasdaq Global Market or the
Nasdaq Capital Market. See Listing Rules 5910(b)(2) and 5920(b)(2).
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Nasdaq proposes to amend the all-inclusive annual fee for all
domestic and foreign companies listing equity securities on the Nasdaq
Global Select, Global and Capital Markets to the following amounts,\4\
effective January 1, 2020:
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\4\ The proposed fee change reflects about 2.5% increase rounded
to the nearest $500.
Global/Global Select Markets
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Annual fee before Annual fee
Total shares outstanding the proposed effective January
change 1, 2020
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Equity securities other than, in
part, ADRs, Closed-end Funds
and Limited Partnerships:
Up to 10 million shares..... $45,000 $46,000
10+ to 50 million shares.... 55,000 56,500
50+ to 75 million shares.... 75,000 77,000
[[Page 64169]]
75+ to 100 million shares... 100,000 102,500
100+ to 125 million shares.. 125,000 128,000
125+ to 150 million shares.. 135,000 138,500
Over 150 million shares..... 155,000 159,000
ADRs:
Up to 10 million ADRs and 45,000 46,000
other listed equity
securities.................
10+ to 50 million ADRs and 50,000 51,500
other listed equity
securities.................
50+ to 75 million ADRs and 60,000 61,500
other listed equity
securities.................
Over 75 million ADRs and 80,000 82,000
other listed equity
securities.................
Closed-end Funds:
Up to 50 million shares..... 30,000 31,000
50+ to 100 million shares... 50,000 51,500
100+ to 250 million shares.. 75,000 77,000
Over 250 million shares..... 100,000 102,500
Limited Partnerships:
Up to 75 million shares..... 37,500 38,500
75+ to 100 million shares... 50,000 51,500
100+ to 125 million shares.. 62,500 64,000
125+ to 150 million shares.. 67,500 69,000
Over 150 million shares..... 77,500 79,500
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Capital Market
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Annual fee before Annual fee
Total shares outstanding the proposed effective January
change 1, 2020
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Equity securities other than, in
part, ADRs, Closed-end Funds
and Limited Partnerships:
Up to 10 million shares..... $42,000 $43,000
10+ to 50 million shares.... 55,000 56,500
Over 50 million shares...... 75,000 77,000
ADRs:
Up to 10 million ADRs and 42,000 43,000
other listed equity
securities.................
Over 10 million ADRs and 50,000 51,500
other listed equity
securities.................
Closed-end Funds:
Up to 50 million shares..... 30,000 31,000
50+ to 100 million shares... 50,000 51,500
100+ to 250 million shares.. 75,000 77,000
Over 250 million shares..... 100,000 102,500
Limited Partnerships:
Up to 75 million shares..... 30,000 31,000
Over 75 million shares...... 37,500 38,500
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Nasdaq also proposes to update the maximum fee applicable to a
Closed-End Fund family and the maximum fee applicable to a REIT Family
to reflect the proposed fee change for other equity securities, as
described above.\5\
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\5\ See footnote 3 above.
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As described below, Nasdaq proposes to make the aforementioned fee
increases to better reflect the Exchange's costs related to listing
equity securities and the corresponding value of such listing to
issuers.
Nasdaq also proposes to remove references to fees that are no
longer applicable because they were superseded by new fee rates
specified in the rule text.
While these changes are effective upon filing, Nasdaq has
designated the proposed amendments to be operative on January 1, 2020.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\6\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\7\ 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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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(4) and (5).
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Nasdaq believes that it is not unfairly discriminatory and
represents an equitable allocation of reasonable fees to amend Listing
Rules 5910(b)(2) and 5920(b)(2) to increase the various listing fees
\8\ as set forth above because of the increased costs incurred by
Nasdaq
[[Page 64170]]
since it established the current rates. In that regard, the Exchange
notes that its general costs have increased since its most recent fee
adjustments, including due to price inflation. In addition, the
Exchange continues to improve the services it provides to listed
companies. These improvements include the continued development and
enhancement of Nasdaq's online tools, including the Listing Center and
Reference Library, to the benefit of all listed companies, their
shareholders and prospective investors. In addition, Nasdaq has
invested in upgrades to the Nasdaq MarketSite, which houses a state-of-
the-art digital broadcast studio and can be utilized as a New York
venue by listed companies, and the MarketSite Tower. The proposed
increase also will help Nasdaq continue to invest in these initiatives
and its regulatory programs.
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\8\ In 2014, Nasdaq adopted an all-inclusive annual listing fee
schedule to simplify, clarify and enhance transparency around the
annual fee to which listed companies are subject. See Securities
Exchange Act Release No. 73647 (November 19, 2014), 79 FR 70232
(November 25, 2014) (SR-NASDAQ-2014-87). Effective January 1, 2017,
Nasdaq reduced the fees for limited partnerships listed on Nasdaq.
See Securities Exchange Act Release No. 79770 (January 10, 2017), 82
FR 4947 (January 17, 2017) (SR-NASDAQ-2016-173). Effective January
1, 2019, Nasdaq modified the fee schedule for ADRs listed on Nasdaq,
including to subject ADRs to the same minimum fee as other companies
listing equity securities on the same tier of Nasdaq and to bring
the ADRs fees closer to the fees paid by other domestic and foreign
companies listing equity securities on Nasdaq. See Securities
Exchange Act Release No. 84880 (December 20, 2018), 83 FR 67374
(December 28, 2018) (SR-NASDAQ-2018-103).
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Nasdaq also believes that it is not unfairly discriminatory and
represents an equitable allocation of reasonable fees to amend Listing
Rules 5910(b)(2) and 5920(b)(2) to increase the various listing fees
while rounding the increase to the nearest $500 as set forth above
because such rounding represents di minimus variation in fees for
Nasdaq listed companies. In addition, Nasdaq has used the same
methodology since the adoption of the all-inclusive annual listing fee
schedule and all annual listing fees under Listing Rules 5910(b)(2) and
5920(b)(2) are rounded to $500.
The proposed change to update the maximum fee applicable to a
Closed-End Fund family and the maximum fee applicable to a REIT Family
to reflect the proposed fee change for other equity securities, as
described above, is not unfairly discriminatory because it merely
reflects the change in fees for other equity securities without
changing the substance of the rule.
Finally, Nasdaq notes that it operates in a highly competitive
market in which market participants can readily switch exchanges if
they deem the listing fees excessive.\9\ In such an environment, Nasdaq
must continually review its fees to assure that they remain
competitive.
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\9\ The Justice Department has noted the intense competitive
environment for exchange listings. See ``NASDAQ OMX Group Inc. and
IntercontinentalExchange Inc. Abandon Their Proposed Acquisition Of
NYSE Euronext After Justice Department Threatens Lawsuit'' (May 16,
2011), available at http://www.justice.gov/atr/public/press_releases/2011/271214.htm.
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The proposed removal of text relating to fees that are no longer
applicable is ministerial in nature and has no substantive effect.
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, as amended. The market for
listing services is extremely competitive and listed companies may
freely choose alternative venues, both within the U.S. and
internationally. For this reason, Nasdaq does not believe that the
proposed rule change will result in any burden on competition for
listings.
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.\10\
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\10\ 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-2019-087 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2019-087. 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 website (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 website 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 the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NASDAQ-2019-087, and should be submitted
on or before December 11, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-25108 Filed 11-19-19; 8:45 am]
BILLING CODE 8011-01-P