[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