Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Reduce the All-Inclusive Annual Listing Fee for Limited Partnerships Listed on Nasdaq, 4947-4950 [2017-00783]
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4947
Federal Register / Vol. 82, No. 10 / Tuesday, January 17, 2017 / Notices
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)
of the Act 30 and paragraph (f) of Rule
19b–4 thereunder.31 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 necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
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:
sradovich on DSK3GMQ082PROD with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
BatsEDGX–2017–01 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–BatsEDGX–2017–01. 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 (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 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–
BatsEDGX–2017–01, and should be
submitted on or before February 7, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.32
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–00782 Filed 1–13–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79770; File No. SR–
NASDAQ–2016–173]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Reduce the
All-Inclusive Annual Listing Fee for
Limited Partnerships Listed on Nasdaq
January 10, 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 December
28, 2016, 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to reduce the
fees for limited partnerships listed on
Nasdaq.
While these amendments are effective
upon filing, the Exchange has
designated the proposed amendments to
be operative on January 1, 2017.
A notice of the proposed rule change
for publication in the Federal Register
is attached as Exhibit 1 [sic]. The text of
the proposed rule change is set forth
32 17
30 15
31 17
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
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below. Proposed new language is
italicized; deleted text is in brackets.
*
*
*
*
*
5910. The Nasdaq Global Market
(including the Nasdaq Global Select
Market)
*
*
*
*
*
IM–5910–1. All-Inclusive Annual
Listing Fee
(a)–(c) No change.
(d) The All-Inclusive Annual Listing
Fee will be calculated on total shares
outstanding according to the following
schedules:
(1)–(3) No change.
(4) Limited Partnerships (effective
January 1, 2017):
Up to 75 million shares $37,500
75+ to 100 million shares $50,000
100+ to 125 million shares $62,500
125+ to 150 million shares $67,500
Over 150 million shares $77,500
(e) No change.
*
*
*
*
*
5920. The Nasdaq Capital Market
*
*
*
*
*
IM–5920–1. All-Inclusive Annual
Listing Fee
(a)–(c) No change.
(d) The All-Inclusive Annual Listing
Fee will be calculated on total shares
outstanding according to the following
schedules:
(1)–(3) No change.
(4) Limited Partnerships (effective
January 1, 2017):
Up to 50 million shares $30,000
Over 50 million shares $37,500
(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
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Nasdaq proposes to reduce the fees for
limited partnerships listed on Nasdaq.
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Federal Register / Vol. 82, No. 10 / Tuesday, January 17, 2017 / Notices
Historically, certain of Nasdaq’s
corporate governance requirements,
including most shareholder approval
requirements (other than for equity
compensation), most independence
requirements (other than for audit
committees at the general partner level),
and the annual meeting requirement
(unless required by statute or regulation
in the state in which the limited
partnership is formed or doing business
or by the terms of the partnership’s
limited partnership agreement), have
not been applied to limited partnerships
because their structure typically
requires that public investors have
limited rights and that the general
partners make all significant decisions
about the operation of the company.3 As
such, limited partners do not expect to
have a voice in the operations of the
partnership. Reduced corporate
governance requirements for limited
partnerships, in turn, result in Nasdaq
expending fewer resources on
monitoring and enforcing its rules
because a significant portion of the
regulatory cost Nasdaq incurs in
connection with the continued listing of
an issuer relates to the review by
Nasdaq staff of complex transactions for
compliance with Nasdaq’s shareholder
approval requirements, which limited
partnerships are not subject to.
Similarly, Nasdaq incurs lower
regulatory costs in connection with the
review by Nasdaq staff of limited
partnerships’ filings with the
Commission because these issuers are
not subject to most board and committee
independence requirements (other than
for audit committees at the general
partner level), and most limited
partnerships neither hold annual
meetings nor file proxy statements.
Accordingly, Nasdaq proposes to reduce
the All-Inclusive Annual Listing Fee for
limited partnerships listed on Nasdaq.
The proposed amendment will affect
the All-Inclusive Annual Listing Fee
schedule 4 on the Nasdaq Global Market,
the Nasdaq Global Select Market, and
the Nasdaq Capital Market.5 In 2014,
when Nasdaq adopted the All-Inclusive
Annual Listing Fee schedule, Nasdaq
considered various factors that
distinguish companies, including
3 See
Rule 5615(a)(4).
2014, Nasdaq adopted an All-Inclusive
Annual Listing Fee schedule. Securities Exchange
Act Release No. 73647 (November 19, 2014), 79 FR
70232 (November 25, 2014) (SR–NASDAQ–2014–
87). All newly listed companies are subject to the
All-Inclusive fee structure and other listed
companies can elect to be on the All-Inclusive fee
structure. All companies will be subject to the AllInclusive fee structure effective January 1, 2018.
5 Listing Rule 5910 provides that fee schedules for
the Nasdaq Global Select Market are the same fee
schedules as for the Nasdaq Global Market.
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4 In
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market tier, shares outstanding, and
security type, as well as the perceived
use of various Nasdaq regulatory and
support services by companies of
various characteristics.6 Due to the
relatively few limited partnerships
listed on the Exchange at that time,
Nasdaq’s analysis did not focus on the
special characteristics of the limited
partnerships. Upon further
consideration, Nasdaq now believes that
the reduced regulatory oversight needed
for limited partnerships warrants a
reduced fee.
As detailed in the proposed rule, for
limited partnerships listed on the
Capital Market the All-Inclusive Annual
Listing Fee will range from $30,000 to
$37,500. On the Global and Global
Select Markets, the All-Inclusive
Annual Listing Fee for limited
partnerships will range from $37,500 to
$77,500.7 The proposed fees will
continue to be based on a limited
partnership’s total shares outstanding
and will maintain the same pricing tiers
based on shares outstanding as in the
current fee schedule applicable to
limited partnerships, except the tiers
that otherwise would have their fees
reduced below the minimum fee of
$37,500 for the Global and Global Select
Markets or $30,000 for the Capital
Market are combined into a single
pricing tier of up to 75 million shares
outstanding on the Global and Global
Select Markets and of up to 50 million
shares outstanding on the Capital
Market.
Nasdaq notes that American
Depositary Receipts (ADRs) and Closedend Funds also have different fee
schedules than other listed equity
securities. Nasdaq believes that the
characteristics of ADRs and Closed-end
Funds are different than the
characteristics of limited partnerships
and that it is therefore appropriate to
apply a different fee schedule for
limited partnerships.8
6 See Securities Exchange Act Release No. 73647,
supra note 4.
7 The proposed fees are generally 50% less than
the fees applicable to issuers of equity securities
other than ADRs and Closed-End Funds. However,
Nasdaq maintained a minimum fee of $37,500 for
the Global and Global Select Markets and $30,000
for the Capital Market in recognition of the
regulatory work Nasdaq must nonetheless perform
and the benefits a limited partnership accrues with
listing, and in consideration of the minimum fees
set by Nasdaq’s competitors.
8 See Securities Exchange Act Release No. 73647,
supra note 4, noting, among other differences, that
the U.S. listing is not typically the issuer of an
ADR’s primary listing, and that Closed-end Funds
are particularly sensitive to the expenses they incur,
given that they compete for investment dollars
based on return, but are otherwise subject to the
same regulatory requirements as other listed
companies.
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The proposed fee change will be
operative January 1, 2017.
Nasdaq notes that no other company
will be required to pay higher fees as a
result of the proposed amendments and
represents that the proposed fee change
will have no impact on the resources
available for its regulatory programs.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,9 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act,10 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 or system
which the Exchange operates or
controls, and is not designed to permit
unfair discrimination between
customers, issuers, brokers, or dealers.
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 fee
change reducing the fee paid by limited
partnerships is reasonable and not
unfairly discriminatory because it
recognizes the reduced regulatory cost
Nasdaq incurs for limited partnerships.
Specifically, certain of Nasdaq’s
corporate governance requirements,
including most shareholder approval
requirements (other than for equity
compensation), most independence
requirements (other than for audit
committees at the general partner level),
and the annual meeting requirement
(unless required by statute or regulation
in the state in which the limited
partnership is formed or doing business
or by the terms of the partnership’s
limited partnership agreement), do not
apply to limited partnerships because
their structure typically requires that
public investors have limited rights and
that the general partners make all
significant decisions about the operation
of the company. This allows Nasdaq to
expend fewer resources on monitoring
and enforcing its rules because a
significant portion of the regulatory cost
Nasdaq incurs in connection with the
continued listing of an issuer relates to
the review by Nasdaq staff of complex
transactions for compliance with
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
10 15
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Federal Register / Vol. 82, No. 10 / Tuesday, January 17, 2017 / Notices
sradovich on DSK3GMQ082PROD with NOTICES
Nasdaq’s shareholder approval
requirements, which limited
partnerships are not subject to.
Similarly, Nasdaq incurs lower
regulatory costs in connection with the
review by Nasdaq staff of limited
partnerships’ filings with the
Commission because these issuers are
not subject to most board and committee
independence requirements (other than
for audit committees at the general
partner level), and most limited
partnerships neither hold annual
meetings nor file proxy statements.
These reduced costs are a nondiscriminatory reason to charge limited
partnerships a lower All-Inclusive
Annual Listing Fee.
Currently, ADRs and Closed-end
Funds also pay lower All-Inclusive
Annual Listing Fees than other issuers
of equity securities. Nasdaq believes it
is appropriate to apply a fee schedule to
limited partnerships that is different
from those applicable to either ADRs or
Closed-end Funds due to their differing
characteristics. Specifically, Nasdaq
charges lower listing fees for ADRs
because, among other differences, the
U.S. listing is not typically the issuer of
an ADR’s primary listing.11 Similarly,
Nasdaq charges lower listing fees for
Closed-end Funds because they are
particularly sensitive to the expenses
they incur, given that they compete for
investment dollars based on return.12 As
a result, offering a different discount to
limited partnerships on the AllInclusive Annual Fee schedule than to
ADRs and Closed-end Funds is not
inequitable or unfairly discriminatory.
While the proposed fee reduction
only applies to limited partnerships on
the All-Inclusive Annual Fee schedule,
Nasdaq notes that any currently listed
limited partnership can opt into the AllInclusive Annual Fee schedule for 2017
prior to December 31, 2016, and that all
companies will transition to that fee
schedule in 2018. Moreover, Nasdaq
accrues benefits from companies being
on this schedule.13 These benefits to
Nasdaq provide a reasonable basis for
Nasdaq to adjust the fees only for
limited partnerships on the AllInclusive Annual Fee schedule and, as
a result, offering a discount only to
limited partnerships on the AllInclusive Fee schedule is not
inequitable or unfairly discriminatory.
11 See Securities Exchange Act Release No. 73647,
supra note 4.
12 Id.
13 These benefits include eliminating the multiple
invoices otherwise sent to a company each year and
providing more certainty as to Nasdaq’s revenues.
See Securities Exchange Act Release No. 73647,
supra note 4.
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Finally, Nasdaq believes that the
proposed fees are consistent with the
investor protection objectives of Section
6(b)(5) of the Act 14 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 allowing limited
partnerships to pay lower fees is not
substantial, and the reduced fees may
result in more limited partnerships
listing on Nasdaq, 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 the reduction of fees
payable by limited partnerships, as
proposed, will not hinder its ability to
fulfill its regulatory responsibilities.
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 based on the aggregate fees
assessed, and the value provided by
each listing. This rule proposal does not
burden competition with other listing
venues, which are similarly free to set
their fees. For these reasons, 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.15
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
14 15
15 15
PO 00000
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(3)(A)(ii).
Frm 00112
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4949
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 rule-comments@
sec.gov. Please include File Number SR–
NASDAQ–2016–173 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–2016–173. 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 (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 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–2016–173, and should be
submitted on or before February 7, 2017.
E:\FR\FM\17JAN1.SGM
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4950
Federal Register / Vol. 82, No. 10 / Tuesday, January 17, 2017 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Eduardo A. Aleman,
Assistant Secretary,
[FR Doc. 2017–00783 Filed 1–13–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79767; File No. SR–
NYSEArca–2016–62]
Self-Regulatory Organizations;
NYSEArca, Inc.; Order Granting
Approval of Proposed Rule Change, as
Modified by Amendment No. 1 Thereto,
Relating to a Change to the Underlying
Index for the PowerShares Build
America Bond Portfolio
January 10, 2017.
I. Introduction
sradovich on DSK3GMQ082PROD with NOTICES
On May 3, 2016, NYSE Arca, Inc.
(‘‘NYSE Arca’’ or ‘‘Exchange’’) 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 proposed rule
change to: (1) Propose changes to the
index underlying the PowerShares
Build America Bond Portfolio (‘‘Fund’’)
and the name of the Fund and (2) permit
the continued listing and trading of the
shares (‘‘Shares’’) of the Fund as a result
of the changes to the index underlying
the Fund. The proposed rule change
was published for comment in the
Federal Register on May 23, 2016.3
On June 27, 2016, pursuant to Section
19(b)(2) of the Act,4 the Commission
designated a longer period within which
to either approve the proposed rule
change, disapprove the proposed rule
change, or institute proceedings to
determine whether to disapprove the
proposed rule change.5 On August 12,
2016, the Commission instituted
proceedings to determine whether to
approve or disapprove the proposed
rule change.6 On October 27, 2016, the
Commission issued a notice of
designation of a longer period for
Commission action on proceedings to
determine whether to approve or
16 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 77849
(May 17, 2016), 81 FR 32371 (‘‘Notice’’).
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 78157,
81 FR 43327 (July 1, 2016).
6 See Securities Exchange Act Release No. 78564,
81 FR 55247 (Aug. 18, 2016).
1 15
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disapprove the proposed rule change.7
On January 4, 2017, the Exchange filed
Amendment No. 1 to the proposed rule
change.8 The Commission has received
no comments on the proposed rule
change. This order grants approval of
the proposed rule change, as modified
by Amendment No. 1 thereto.
II. Exchange’s Description of the
Proposal
The Exchange currently lists and
trades Shares of the Fund 9 under NYSE
Arca Equities Rule 5.2(j)(3),
Commentary .02, which governs the
listing and trading of Investment
Company Units (‘‘Units’’) based on fixed
income securities indexes.10 The Fund
is a series of the Trust. Invesco
PowerShares Capital Management LLC
is the investment adviser (‘‘Adviser’’)
for the Fund. Invesco Distributors, Inc.
is the Fund’s distributor. The Bank of
New York Mellon is the administrator,
custodian, and fund accounting and
transfer agent for the Fund.
The Fund currently seeks investment
results that generally correspond to the
price and yield (before fees and
expenses) of The Bank of America
7 See Securities Exchange Act Release No. 79173,
81 FR 76400 (Nov. 2, 2016). The Commission
designated January 18, 2017 as the date by which
it should approve or disapprove the proposed rule
change.
8 In Amendment No. 1 to the proposed rule
change, the Exchange: (a) Clarified that (i) in no
event will the New Index (as defined herein) be
composed of fewer than 500 issues, and (ii) FINRA
(as defined herein) is able to access data obtained
from the Municipal Securities Rulemaking Board
relating to municipal bond trading activity for
surveillance purposes in connection with trading in
the Shares; (b) stated that that Adviser (as defined
herein) represents that within a single municipal
bond issuer, separate issues by the same issuer are
likely to trade similarly to one another, and that
individual CUSIPs within the New Index that share
characteristics with other CUSIPs have a high yield
to maturity correlation, and frequently have a
correlation of one or close to one; and (c) made
other technical edits and non-substantive
corrections. Because Amendment No. 1 does not
materially alter the substance of the proposed rule
change or raise unique or novel regulatory issues,
Amendment No. 1 is not subject to notice and
comment. Amendment No. 1, which amended and
replaced the original filing in its entirety, is
available on the Commission’s Web site at: https://
www.sec.gov/comments/sr-nysearca-2016-62/
nysearca201662-1460311-130254.pdf.
9 The Exchange states that, on February 26, 2016,
PowerShares Exchange-Traded Fund Trust II
(‘‘Trust’’) filed a post-effective amendment on Form
485 under the Securities Act of 1933 (‘‘Securities
Act’’) to its registration statement on Form N–1A
under the Securities Act and the Investment
Company Act of 1940 (‘‘1940 Act’’) (File Nos. 333–
138490 and 811–21977) (‘‘Registration Statement’’).
The Exchange states that the Trust has obtained
certain exemptive relief under the 1940 Act (File
No. 812–13335) (‘‘Exemptive Order’’).
10 The Exchange states that the PowerShares
Build America Bond Portfolio was initially listed on
November 17, 2009 pursuant to the generic listing
criteria of Commentary .02 to NYSE Arca Equities
Rule 5.2(j)(3).
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(‘‘BofA’’) Merrill Lynch Build America
Bond Index (‘‘Build America Bond
Index’’). The Fund generally invests at
least 80% of its total assets in taxable
municipal securities eligible to
participate in the Build America Bond
program created under the American
Recovery and Reinvestment Act of 2009
or other legislation providing for the
issuance of taxable municipal securities
on which the issuer receives federal
support of the interest paid (‘‘Build
America Bonds’’) and that comprise the
Build America Bond Index. The Build
America Bond Index is designed to track
the performance of U.S. dollardenominated investment grade taxable
municipal debt publicly issued under
the Build America Bond program by
U.S. states and territories, and their
political subdivisions, in the U.S.
market. Qualifying securities must have
a minimum amount outstanding of $1
million, at least 18 months remaining
term to final maturity at the time of
issuance, at least one year remaining
term to final maturity, a fixed coupon
schedule, and an investment grade
rating (based on an average of Moody’s
Investors Services, Inc. (‘‘Moody’s’’),
Standard & Poor’s, a division of The
McGraw-Hill Company, Inc. (‘‘S&P’’),
and Fitch Ratings, Inc. (‘‘Fitch’’)).
The Trust has proposed to change the
index underlying the Fund to the BofA
Merrill Lynch US Taxable Municipal
Securities Plus Index (‘‘New Index’’)
and to change the name of the Fund to
PowerShares Taxable Municipal Bond
Portfolio. The Exchange represents that
the New Index does not meet the
generic listing criteria of NYSE Arca
Equities Rule 5.2(j)(3). The Exchange
submitted this proposed rule change to
permit the continued listing of the
Fund. The New Index meets all of the
requirements of the generic listing
criteria of NYSE Arca Equities Rule
5.2(j)(3), except for that set forth in
Commentary .02(a)(2).11 Specifically, as
of February 4, 2016, approximately
60.51% of the New Index weight was
composed of individual maturities of
$100 million or more (determined at the
time of issuance).
A. Changes to the Index Underlying the
Fund
According to the Exchange, the Fund
currently has a non-fundamental policy
to invest at least 80% of its net assets
(plus the amount of any borrowings for
investment purposes) in Build America
11 Commentary .02(a)(2) to NYSE Arca Equities
Rule 5.2(j)(3) provides that components that in the
aggregate account for at least 75% of the weight of
the index or portfolio each shall have a minimum
original principal amount outstanding of $100
million or more.
E:\FR\FM\17JAN1.SGM
17JAN1
]]>Agencies
[Federal Register Volume 82, Number 10 (Tuesday, January 17, 2017)]
[Notices]
[Pages 4947-4950]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-00783]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-79770; File No. SR-NASDAQ-2016-173]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Reduce the All-Inclusive Annual Listing Fee for Limited Partnerships
Listed on Nasdaq
January 10, 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 December 28, 2016, 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 reduce the fees for limited partnerships
listed on Nasdaq.
While these amendments are effective upon filing, the Exchange has
designated the proposed amendments to be operative on January 1, 2017.
A notice of the proposed rule change for publication in the Federal
Register is attached as Exhibit 1 [sic]. 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)
* * * * *
IM-5910-1. All-Inclusive Annual Listing Fee
(a)-(c) No change.
(d) The All-Inclusive Annual Listing Fee will be calculated on
total shares outstanding according to the following schedules:
(1)-(3) No change.
(4) Limited Partnerships (effective January 1, 2017):
Up to 75 million shares $37,500
75+ to 100 million shares $50,000
100+ to 125 million shares $62,500
125+ to 150 million shares $67,500
Over 150 million shares $77,500
(e) No change.
* * * * *
5920. The Nasdaq Capital Market
* * * * *
IM-5920-1. All-Inclusive Annual Listing Fee
(a)-(c) No change.
(d) The All-Inclusive Annual Listing Fee will be calculated on
total shares outstanding according to the following schedules:
(1)-(3) No change.
(4) Limited Partnerships (effective January 1, 2017):
Up to 50 million shares $30,000
Over 50 million shares $37,500
(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
Statutory Basis for, the Proposed Rule Change
1. Purpose
Nasdaq proposes to reduce the fees for limited partnerships listed
on Nasdaq.
[[Page 4948]]
Historically, certain of Nasdaq's corporate governance requirements,
including most shareholder approval requirements (other than for equity
compensation), most independence requirements (other than for audit
committees at the general partner level), and the annual meeting
requirement (unless required by statute or regulation in the state in
which the limited partnership is formed or doing business or by the
terms of the partnership's limited partnership agreement), have not
been applied to limited partnerships because their structure typically
requires that public investors have limited rights and that the general
partners make all significant decisions about the operation of the
company.\3\ As such, limited partners do not expect to have a voice in
the operations of the partnership. Reduced corporate governance
requirements for limited partnerships, in turn, result in Nasdaq
expending fewer resources on monitoring and enforcing its rules because
a significant portion of the regulatory cost Nasdaq incurs in
connection with the continued listing of an issuer relates to the
review by Nasdaq staff of complex transactions for compliance with
Nasdaq's shareholder approval requirements, which limited partnerships
are not subject to. Similarly, Nasdaq incurs lower regulatory costs in
connection with the review by Nasdaq staff of limited partnerships'
filings with the Commission because these issuers are not subject to
most board and committee independence requirements (other than for
audit committees at the general partner level), and most limited
partnerships neither hold annual meetings nor file proxy statements.
Accordingly, Nasdaq proposes to reduce the All-Inclusive Annual Listing
Fee for limited partnerships listed on Nasdaq.
---------------------------------------------------------------------------
\3\ See Rule 5615(a)(4).
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The proposed amendment will affect the All-Inclusive Annual Listing
Fee schedule \4\ on the Nasdaq Global Market, the Nasdaq Global Select
Market, and the Nasdaq Capital Market.\5\ In 2014, when Nasdaq adopted
the All-Inclusive Annual Listing Fee schedule, Nasdaq considered
various factors that distinguish companies, including market tier,
shares outstanding, and security type, as well as the perceived use of
various Nasdaq regulatory and support services by companies of various
characteristics.\6\ Due to the relatively few limited partnerships
listed on the Exchange at that time, Nasdaq's analysis did not focus on
the special characteristics of the limited partnerships. Upon further
consideration, Nasdaq now believes that the reduced regulatory
oversight needed for limited partnerships warrants a reduced fee.
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\4\ In 2014, Nasdaq adopted an All-Inclusive Annual Listing Fee
schedule. Securities Exchange Act Release No. 73647 (November 19,
2014), 79 FR 70232 (November 25, 2014) (SR-NASDAQ-2014-87). All
newly listed companies are subject to the All-Inclusive fee
structure and other listed companies can elect to be on the All-
Inclusive fee structure. All companies will be subject to the All-
Inclusive fee structure effective January 1, 2018.
\5\ Listing Rule 5910 provides that fee schedules for the Nasdaq
Global Select Market are the same fee schedules as for the Nasdaq
Global Market.
\6\ See Securities Exchange Act Release No. 73647, supra note 4.
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As detailed in the proposed rule, for limited partnerships listed
on the Capital Market the All-Inclusive Annual Listing Fee will range
from $30,000 to $37,500. On the Global and Global Select Markets, the
All-Inclusive Annual Listing Fee for limited partnerships will range
from $37,500 to $77,500.\7\ The proposed fees will continue to be based
on a limited partnership's total shares outstanding and will maintain
the same pricing tiers based on shares outstanding as in the current
fee schedule applicable to limited partnerships, except the tiers that
otherwise would have their fees reduced below the minimum fee of
$37,500 for the Global and Global Select Markets or $30,000 for the
Capital Market are combined into a single pricing tier of up to 75
million shares outstanding on the Global and Global Select Markets and
of up to 50 million shares outstanding on the Capital Market.
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\7\ The proposed fees are generally 50% less than the fees
applicable to issuers of equity securities other than ADRs and
Closed-End Funds. However, Nasdaq maintained a minimum fee of
$37,500 for the Global and Global Select Markets and $30,000 for the
Capital Market in recognition of the regulatory work Nasdaq must
nonetheless perform and the benefits a limited partnership accrues
with listing, and in consideration of the minimum fees set by
Nasdaq's competitors.
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Nasdaq notes that American Depositary Receipts (ADRs) and Closed-
end Funds also have different fee schedules than other listed equity
securities. Nasdaq believes that the characteristics of ADRs and
Closed-end Funds are different than the characteristics of limited
partnerships and that it is therefore appropriate to apply a different
fee schedule for limited partnerships.\8\
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\8\ See Securities Exchange Act Release No. 73647, supra note 4,
noting, among other differences, that the U.S. listing is not
typically the issuer of an ADR's primary listing, and that Closed-
end Funds are particularly sensitive to the expenses they incur,
given that they compete for investment dollars based on return, but
are otherwise subject to the same regulatory requirements as other
listed companies.
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The proposed fee change will be operative January 1, 2017.
Nasdaq notes that no other company will be required to pay higher
fees as a result of the proposed amendments and represents that the
proposed fee change will have no impact on the resources available for
its regulatory programs.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\9\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\10\ 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
or system which the Exchange operates or controls, and is not designed
to permit unfair discrimination between customers, issuers, brokers, or
dealers.
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\9\ 15 U.S.C. 78f(b).
\10\ 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 fee change reducing the fee paid
by limited partnerships is reasonable and not unfairly discriminatory
because it recognizes the reduced regulatory cost Nasdaq incurs for
limited partnerships. Specifically, certain of Nasdaq's corporate
governance requirements, including most shareholder approval
requirements (other than for equity compensation), most independence
requirements (other than for audit committees at the general partner
level), and the annual meeting requirement (unless required by statute
or regulation in the state in which the limited partnership is formed
or doing business or by the terms of the partnership's limited
partnership agreement), do not apply to limited partnerships because
their structure typically requires that public investors have limited
rights and that the general partners make all significant decisions
about the operation of the company. This allows Nasdaq to expend fewer
resources on monitoring and enforcing its rules because a significant
portion of the regulatory cost Nasdaq incurs in connection with the
continued listing of an issuer relates to the review by Nasdaq staff of
complex transactions for compliance with
[[Page 4949]]
Nasdaq's shareholder approval requirements, which limited partnerships
are not subject to. Similarly, Nasdaq incurs lower regulatory costs in
connection with the review by Nasdaq staff of limited partnerships'
filings with the Commission because these issuers are not subject to
most board and committee independence requirements (other than for
audit committees at the general partner level), and most limited
partnerships neither hold annual meetings nor file proxy statements.
These reduced costs are a non-discriminatory reason to charge limited
partnerships a lower All-Inclusive Annual Listing Fee.
Currently, ADRs and Closed-end Funds also pay lower All-Inclusive
Annual Listing Fees than other issuers of equity securities. Nasdaq
believes it is appropriate to apply a fee schedule to limited
partnerships that is different from those applicable to either ADRs or
Closed-end Funds due to their differing characteristics. Specifically,
Nasdaq charges lower listing fees for ADRs because, among other
differences, the U.S. listing is not typically the issuer of an ADR's
primary listing.\11\ Similarly, Nasdaq charges lower listing fees for
Closed-end Funds because they are particularly sensitive to the
expenses they incur, given that they compete for investment dollars
based on return.\12\ As a result, offering a different discount to
limited partnerships on the All-Inclusive Annual Fee schedule than to
ADRs and Closed-end Funds is not inequitable or unfairly
discriminatory.
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\11\ See Securities Exchange Act Release No. 73647, supra note
4.
\12\ Id.
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While the proposed fee reduction only applies to limited
partnerships on the All-Inclusive Annual Fee schedule, Nasdaq notes
that any currently listed limited partnership can opt into the All-
Inclusive Annual Fee schedule for 2017 prior to December 31, 2016, and
that all companies will transition to that fee schedule in 2018.
Moreover, Nasdaq accrues benefits from companies being on this
schedule.\13\ These benefits to Nasdaq provide a reasonable basis for
Nasdaq to adjust the fees only for limited partnerships on the All-
Inclusive Annual Fee schedule and, as a result, offering a discount
only to limited partnerships on the All-Inclusive Fee schedule is not
inequitable or unfairly discriminatory.
---------------------------------------------------------------------------
\13\ These benefits include eliminating the multiple invoices
otherwise sent to a company each year and providing more certainty
as to Nasdaq's revenues. See Securities Exchange Act Release No.
73647, supra note 4.
---------------------------------------------------------------------------
Finally, Nasdaq believes that the proposed fees are consistent with
the investor protection objectives of Section 6(b)(5) of the Act \14\
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 allowing
limited partnerships to pay lower fees is not substantial, and the
reduced fees may result in more limited partnerships listing on Nasdaq,
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 the reduction of fees
payable by limited partnerships, as proposed, will not hinder its
ability to fulfill its regulatory responsibilities.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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 based on the aggregate fees assessed,
and the value provided by each listing. This rule proposal does not
burden competition with other listing venues, which are similarly free
to set their fees. For these reasons, 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.\15\
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\15\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------
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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2016-173 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-2016-173. 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 (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 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-2016-173, and should
be submitted on or before February 7, 2017.
[[Page 4950]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary,
[FR Doc. 2017-00783 Filed 1-13-17; 8:45 am]
BILLING CODE 8011-01-P
