[Federal Register Volume 89, Number 39 (Tuesday, February 27, 2024)]
[Notices]
[Pages 14550-14552]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-03903]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99580; File No. SR-NASDAQ-2024-006]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Adopt a Temporary Listing Fee Waiver for Ukrainian Companies Until
December 31, 2028
February 21, 2024.
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 February 12, 2024, 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 adopt a temporary listing fee waiver for
Ukrainian companies until December 31, 2028.
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, 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 waive certain entry
fees (including the application fee) and All-Inclusive Annual fees for
Ukrainian Companies listing on Nasdaq for a time period until December
31, 2028.\3\ This fee waiver will be applicable to Ukrainian Companies
listed on or after the effective date of this rule change.
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\3\ As of the date of this filing, there are no Ukrainian
Companies listed on Nasdaq.
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On February 24, 2022, Russia invaded Ukraine causing a humanitarian
crisis that has left tens of thousands of dead, displaced millions and
sown economic turmoil in Ukraine. Ukraine's economy has been crippled
and some cities have faced massive devastation from the fighting.
Ukraine's economy contracted by 30% in 2022 and was forecast to grow by
of 1% to 3% in 2023, according to the International Monetary Fund.\4\
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\4\ See Reuters, Blood and billions: the cost of Russia's war in
Ukraine at https://www.nasdaq.com/articles/explainer-blood-and-billions:-the-cost-of-russias-war-in-ukraine.
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The White House supports Ukrainian efforts to stop the aggression
and is also focused on reconstruction efforts. In this regard,
President Biden recently stated that:
The United States will continue our work, together with partners
all around the world, to support Ukraine's ability to defend itself
against Russia's aggression, to uphold the foundational principles
of the UN Charter, and to help the Ukrainian people build the
secure, prosperous, and independent future they deserve.\5\
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\5\ https://www.whitehouse.gov/briefing-room/statements-releases/2023/08/24/statement-from-president-joe-biden-on-ukraine-independence-day/.
Further, according to USAID, a United States Agency that leads the
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U.S. government's international development and humanitarian efforts:
[[Page 14551]]
Since Putin's full-scale war against Ukraine on February 24,
2022, the United States, through USAID, has surged support to
rapidly address urgent humanitarian needs, while also investing in
Ukraine's economy and building resilient infrastructure and
institutions to help Ukraine recover from Putin's ruthless attacks
and sustain a lasting peace.\6\
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\6\ See USAID Response in Ukraine at https://www.usaid.gov/usaid-response-ukraine.
Nasdaq notes that the Government of the United States has
identified the private sector as one of key factors for the successful
Ukraine reconstruction efforts and is encouraging investment in
Ukraine.
Similarly, Nasdaq also believes that reconstruction of Ukrainian
infrastructure damaged or destroyed during the invasion and creation of
a new European economic model for Ukraine will be based on free
enterprise, attraction of international capital, the best international
experience and market practices, and a fair and attractive business
climate. As such, Nasdaq proposes to temporarily waive entry and annual
fees for Ukrainian Companies listing on Nasdaq. Specifically, Nasdaq
proposes to waive the entry fee (including the application fee) and the
All-Inclusive Annual Listing Fee described in Rule 5910 (with respect
to the Nasdaq Global Market, including the Nasdaq Global Select Market)
and Rule 5920 (with respect to the Nasdaq Capital Market) for Ukrainian
Companies until December 31, 2028.\7\ Nasdaq believes that this
temporary waiver will ease the listing of Ukrainian companies on Nasdaq
and thereby help those companies to attract international capital,
facilitating capital formation and creating opportunities for economic
growth both for these companies and the Ukrainian economy overall.
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\7\ Based on conditions at the end of the waiver, Nasdaq may
file a subsequent proposed rule change to extend this waiver.
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Nasdaq proposes to define a Ukrainian Company for purposes of this
fee waiver to mean a Company \8\ incorporated in Ukraine or a Company
whose business is principally administered in Ukraine. A Company's
business will be considered to be principally administered in Ukraine
if: (i) at least 50% of the Company's assets are located in that
jurisdiction; or (ii) at least 50% of the Company's revenues are
derived from that jurisdiction. The proposed definition of a Ukrainian
Company is based in part on Rule 5005(a)(37) which defines when a
company is from a Restrictive Market.\9\ Nasdaq believes the proposed
definition of a Ukrainian Company is appropriate given the significant
connection it requires to Ukraine and the Exchange's experience in
applying the similar definition.\10\
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\8\ Rule 5005(a)(6) defines ``Company'' as the issuer of a
security listed or applying to list on Nasdaq.
\9\ Rule 5005(a)(37) defines Restrictive Market as a
jurisdiction that does not provide the Public Company Accounting
Oversight Board with access to conduct inspections of public
accounting firms that audit Nasdaq-listed companies. A Company's
business will be considered to be principally administered in a
Restrictive Market if: (i) the Company's books and records are
located in that jurisdiction; (ii) at least 50% of the Company's
assets are located in such jurisdiction; or (iii) at least 50% of
the Company's revenues are derived from such jurisdiction. While the
location of the Company's books and records were a factor in
determining whether a company was in a Restrictive Market because of
the inability of the PCAOB to inspect those books and records,
Nasdaq does not believe that element is appropriate as a sole
determination as to whether a company is principally administered in
Ukraine.
\10\ Id.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\11\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\12\ 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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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(4) and (5).
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Specifically, Nasdaq believes that the proposed fee waivers are
equitable and not unfairly discriminatory as they are being implemented
to support companies that are incorporated in or whose business is
principally administered in Ukraine--a country operating under
conditions unprecedented during this century caused by a full scale
military invasion, as described above. Nasdaq believes that Ukraine
stands in unique circumstances, facing an almost two-year long invasion
by a member of the United Nations Security Council, while the United
Nations, in just its eleventh emergency special session ever,
overwhelmingly adopted a resolution demanding the Russian Federation
immediately end its invasion and unconditionally withdraw.\13\ Nasdaq
believes that waiving these fees will facilitate the listing of
Ukrainian companies on Nasdaq in the United States, providing them
access to a deep pool of liquidity to raise capital to use in the
rebuilding of the Ukrainian economy, consistent with the goals of the
United States government and Nasdaq's interest in speeding the recovery
of the Ukraine economy in these unique circumstances. Finally, Nasdaq
believes that it will also allow these companies to reinvest the money
that otherwise would be paid to Nasdaq into those reconstruction
efforts.
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\13\ See General Assembly Overwhelmingly Adopts Resolution
Demanding Russian Federation Immediately End Illegal Use of Force in
Ukraine, Withdraw All Troops at https://press.un.org/en/2022/ga12407.doc.htm.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposed waiver will be
available to all similarly situated issuers on the same basis.
Moreover, the companies eligible for the waiver will be faced with
operating under conditions unprecedented during this century caused by
a full scale military invasion, as described above--conditions not
generally experienced by other companies that are not eligible for the
waiver. As such, the Exchange does not believe that the proposed
temporary waivers will have any meaningful effect on the competition
among issuers listed on the Exchange.
The Exchange operates in a highly competitive market in which
issuers can readily choose to list new securities on other exchanges
and transfer listings to other exchanges if they deem fee levels at
those other venues to be more favorable. Because competitors are free
to modify their own fees in response, and because issuers may change
their listing venue, the Exchange does not believe its proposed fee
change will impose any burden on intermarket competition.
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.\14\
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\14\ 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
[[Page 14552]]
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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-NASDAQ-2024-006 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-2024-006. 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 (https://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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-NASDAQ-2024-006 and should
be submitted on or before March 19, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-03903 Filed 2-26-24; 8:45 am]
BILLING CODE 8011-01-P