Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing of Proposed Rule Change by National Association of Securities Dealers, Inc. Regarding Fees for Closed-End Funds Listing on The Nasdaq SmallCap Market, 57638-57640 [E5-5354]

Download as PDF 57638 Federal Register / Vol. 70, No. 190 / Monday, October 3, 2005 / Notices III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, it has become effective pursuant to Section 19(b)(3)(A) of the Act 9 and Rule 19b– 4(f)(6) thereunder.10 Nasdaq has requested that the Commission waive the 30-day operative delay. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because the proposed change rule would permit Nasdaq to implement an order type similar to one already in use in the marketplace that may offer market quality benefits. Therefore, the Commission designates the proposal to be effective and operative upon filing with the Commission.11 At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate 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: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NASD–2005–113 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 9 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 11 For purposes of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 10 17 VerDate Aug<31>2005 17:26 Sep 30, 2005 Jkt 205001 Station Place, 100 F Street, NE., Washington, DC 20549–9303. All submissions should refer to File Number SR–NASD–2005–113. This file number should be included on the subject line if e-mail 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 inspection and copying in the Commission’s Public Reference Room. Copies of the filing also will be available for inspection and copying at the principal office of the NASD. 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–NASD–2005–113 and should be submitted on or before October 24, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.12 Jonathan G. Katz, Secretary. [FR Doc. E5–5346 Filed 9–30–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52515; File No. SR–NASD– 2005–106] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing of Proposed Rule Change by National Association of Securities Dealers, Inc. Regarding Fees for Closed-End Funds Listing on The Nasdaq SmallCap Market September 27, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 12 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 notice is hereby given that on August 31, 2005, the National Association of Securities Dealers, Inc. (‘‘NASD’’), through its subsidiary, The Nasdaq Stock Market, Inc. (‘‘Nasdaq’’), filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Nasdaq. 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 Nasdaq proposes to amend NASD Rules 4510 and 4520. The text of the proposed rule change is below. Proposed new language is italicized; proposed deletions are in [brackets]. * * * * * 4510. The Nasdaq National Market (a)–(c) No change. (d) Annual Fee—American Depositary Receipts (ADRs) and Closed-End Funds. (1)–(3) No change. (4) 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 in The Nasdaq National Market or The Nasdaq SmallCap Market, as shown in the issuer’s most recent periodic reports required to be filed with the appropriate regulatory authority or in more recent information held by Nasdaq. The maximum annual fee applicable to a fund family shall not exceed $75,000. For purposes of this rule, a ‘‘fund family’’ is defined as two or more Closed-End Funds that have a common investment adviser or have investment advisers who are ‘‘affiliated persons’’ as defined in Section 2(a)(3) of the Investment Company Act of 1940, as amended. (5)–(6) No change. (e) No change. 4520. The Nasdaq SmallCap Market (a) Entry Fee. (1)–(2) No change. (3) A closed-end management investment company registered under the Investment Company Act of 1940, as amended (a ‘‘Closed-End Fund’’), that submits an application for inclusion of securities in The Nasdaq SmallCap Market shall pay to the Nasdaq Stock Market, Inc. an entry fee of $5,000 (of which $1,000 represents a nonrefundable, application fee). ([3]4) The Board of Directors of The Nasdaq Stock Market, Inc. or its designee may, in its discretion, defer or E:\FR\FM\03OCN1.SGM 03OCN1 Federal Register / Vol. 70, No. 190 / Monday, October 3, 2005 / Notices National Market fees for that calendar year. ([5]6) Total shares outstanding means the aggregate of all classes of equity securities included in The Nasdaq SmallCap Market as shown in the issuer’s most recent periodic report required to be filed with the issuer’s appropriate regulatory authority or in more recent information held by Nasdaq. In the case of foreign issuers, total shares outstanding shall include only those shares issued and outstanding in the United States. (7) Notwithstanding paragraph (6), 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 in The Nasdaq National Market and The Nasdaq SmallCap Market, as shown in the issuer’s most recent periodic reports required to be filed with the appropriate regulatory authority or in more recent information held by Nasdaq. The maximum annual fee applicable to a fund family shall not exceed $75,000. For purposes of this rule, a ‘‘fund family’’ is defined as two or more Closed-End Funds that have a common investment adviser or have investment advisers who are ‘‘affiliated persons’’ as defined in Section 2(a)(3) of the Investment Company Act of 1940, as amended. ([6]8) In lieu of the fees described in Rule 4510(c)(1), the annual fee shall be $15,000 for each issuer (i) whose securities are listed on the New York Stock Exchange and designated as national market securities pursuant to the plan governing New York Stock Exchange securities at the time such securities are approved for listing on Nasdaq, and (ii) that maintains such listing and designation after it lists such securities on Nasdaq. Such annual fee shall be assessed on the first anniversary of the issuer’s listing on Nasdaq. $15,000 (d) No change. $17,500 * * * * $20,000 * waive all or any part of the entry fee prescribed herein. ([4]5) Total shares outstanding means the aggregate of all classes of equity securities to be included in The Nasdaq SmallCap Market as shown in the issuer’s most recent periodic report or in more recent information held by Nasdaq or, in the case of new issues, as shown in the offering circular, required to be filed with the issuer’s appropriate regulatory authority. ([5]6) An issuer that submits an application for inclusion of any class of rights in The Nasdaq SmallCap Market, shall pay, at the time of its application, a non-refundable application fee to The Nasdaq Stock Market of $1,000. ([6]7) The fees described in this Rule 4520(a) shall not be applicable with respect to any securities that (i) are listed on a national securities exchange but not listed on Nasdaq, or (ii) are listed on the New York Stock Exchange and Nasdaq, if the issuer of such securities transfers their listing exclusively to the Nasdaq SmallCap Market. ([7]8) The fees described in this Rule 4520(a) shall not be applicable to an issuer (i) whose securities are listed on the New York Stock Exchange and designated as national market securities pursuant to the plan governing New York Stock Exchange securities at the time such securities are approved for listing on Nasdaq, and (ii) that maintains such listing and designation after it lists such securities on Nasdaq. (b) No change. (c) Annual Fee. (1)–(2) No change. (3) Notwithstanding paragraph (1), a Closed-End Fund listed on The Nasdaq SmallCap Market shall pay to The Nasdaq Stock Market, Inc. an annual fee calculated based on total shares outstanding according to the following schedule: Up to 5 million shares ................ 5+ to 10 million shares ............... 10+ to 25 million shares ............. 25+ to 50 million shares ............. 50+ to 100 million shares ........... 100+ to 250 million shares ......... Over 250 million shares .............. $22,500 $30,000 $50,000 $75,000 ([3]4) The Board of Directors of The Nasdaq Stock Market, Inc. or its designee may, in its discretion, defer or waive all or any part of the annual fee prescribed herein. ([4]5) If a class of securities is removed from The Nasdaq SmallCap Market, that portion of the annual fees for such class of securities attributable to the months following the date of removal shall not be refunded, except such portion shall be applied to Nasdaq VerDate Aug<31>2005 17:26 Sep 30, 2005 Jkt 205001 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq 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. Nasdaq has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 57639 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Currently, Closed-End Funds listing on The Nasdaq SmallCap Market (‘‘SmallCap Market’’) are required to pay entry and annual fees according to the applicable fee schedules set forth in NASD Rule 4520.3 These entry fees range from $25,000 to $50,000 and the annual fees from $17,500 to $21,000. Pursuant to the rule change, the entry fee for listing a Closed-End Fund on the SmallCap Market will decrease to $5,000 (of which $1,000 is a nonrefundable application fee) per fund. Annual fees will be based on the total number of shares outstanding, with a minimum fee of $15,000 and a maximum fee of $75,000. For the purposes of determining the annual fee, fund sponsors will be permitted to aggregate the shares outstanding of all Closed-End Funds listed on either The Nasdaq National Market (‘‘National Market’’) or the SmallCap Market that are part of the same fund family. As a result, the annual fee may not exceed $75,000 per fund family. For the purposes of this rule, a ‘‘fund family’’ is defined as two or more Closed-End Funds that share a common investment adviser or investment advisers who are ‘‘affiliated persons’’ as defined in Section 2(a)(3) of the Investment Company Act of 1940, as amended. Nasdaq believes there are several reasons to adopt new fees applicable to Closed-End Funds listing on the SmallCap Market. First, the new annual fee schedule would accommodate the needs of fund sponsors more effectively than the current fee schedule because sponsors often choose to issue and list multiple funds in the same family. Currently, each fund that is listed on The SmallCap Market is assessed a separate annual fee. Under the proposed rules, fund families would be permitted to aggregate shares outstanding of listed funds to determine the annual fee, subject to an annual cap of $75,000 per fund family. Second, under the proposed rule change, funds listed on the SmallCap Market would be subject to a schedule of annual fees identical to that of funds listed on the National Market.4 Because 3 Closed-End Funds are evaluated for listing on the SmallCap Market under the general initial listing criteria contained in NASD Rules 4310 and 4320. 4 Nasdaq recently adopted new listing fees for Closed-End Funds listing on the National Market. See Securities Exchange Act Release No. 52277 E:\FR\FM\03OCN1.SGM Continued 03OCN1 57640 Federal Register / Vol. 70, No. 190 / Monday, October 3, 2005 / Notices fund families would be permitted to aggregate shares outstanding across markets for the purposes of calculating the annual fee, Nasdaq believes that matching fee schedules would minimize problems that could arise if fund families listing funds on both the National Market and SmallCap Market were subject to conflicting fee schedules. Although an individual fund listing on the SmallCap Market with over 25 million total shares outstanding would be subject to an increase in annual fees under the proposed rules, Nasdaq believes the benefits of substantially lower entry fees and the ability of fund families to aggregate shares across markets outweigh the burden to funds of the limited fee increase. Finally, in many cases where multiple funds are listed, the new fee schedule would lower fees payable by Closed-End Funds, thereby benefiting the fund investors that ultimately pay those expenses by reducing the costs associated with listing fund shares. In addition, Nasdaq believes that establishing lower fees for fund families would permit Nasdaq to compete more effectively for listings with other markets. Nasdaq believes that the proposed rule change is consistent with the provisions of Section 15A of the Act,5 in general, and with Section 15A(b)(5) of the Act,6 in particular, in that it provides for the equitable allocation of reasonable fees, dues, and other charges among members and issuers and other persons using any facility or system which the NASD operates or controls. The proposed change to the entry and annual fees will apply equally to all Closed-End Funds listing on The Nasdaq SmallCap Market. Furthermore, Nasdaq believes that the proposed fees are reasonable and fall within the range of fees charged by other markets. B. Self-Regulatory Organization’s Statement on Burden on Competition Nasdaq does not believe that the proposed rule change would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. (August 17, 2005), 70 FR 49347 (August 23, 2005) (SR–NASD–2005–096). 5 15 U.S.C. 78o–3. 6 15 U.S.C. 78o–3(b)(5). 17:26 Sep 30, 2005 Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding, or (ii) as to which the NYSE consents, the Commission will: A. By order approve such proposed rule change; or B. institute proceedings to determine whether the proposed rule change should be disapproved. public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of Nasdaq. 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 publicly available. All submissions should refer to File Number SR–NASD–2005–106 and should be submitted on or before October 24, 2005.7 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.7 Jonathan G. Katz, Secretary. [FR Doc. E5–5354 Filed 9–30–05; 8:45 am] BILLING CODE 8010–01–P 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: DEPARTMENT OF STATE [Public Notice 5198] 60-Day Notice of Proposed Information Collection: Form DS–86, Statement of Non-Receipt of a Passport, OMB Control Number 1405–0146 Electronic Comments 2. Statutory Basis VerDate Aug<31>2005 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Jkt 205001 • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NASD–2005–106 on the subject line. Notice of request for public comments. ACTION: SUMMARY: The Department of State is seeking Office of Management and Budget (OMB) approval for the information collection described below. The purpose of this notice is to allow 60 days for public comment in the Federal Paper Comments Register preceding submission to OMB. • Send paper comments in triplicate We are conducting this process in to Jonathan G. Katz, Secretary, accordance with the Paperwork Securities and Exchange Commission, Reduction Act of 1995. Station Place, 100 F Street, NE., • Title of Information Collection: Washington, DC 20549–9303. Statement of Non-Receipt of A Passport All submissions should refer to File • OMB Control Number: 1405–0146 Number SR–NASD–2005–106. This file • Type of Request: Extension of the number should be included on the currently approved collection subject line if e-mail is used. To help the • Originating Office: Bureau of Commission process and review your Consular Affairs, Department of State, comments more efficiently, please use Passport Services, Office of Field only one method. The Commission will Operations, Field Coordination post all comments on the Commission’s Division. CA/PPT/FO/FC. Internet Web site (https://www.sec.gov/ • Form Number: DS–86 rules/sro.shtml). Copies of the • Respondents: Individuals or submission, all subsequent Households amendments, all written statements • Estimated Number of Respondents: with respect to the proposed rule 23,500 change that are filed with the • Estimated Number of Responses: Commission, and all written 23,500 communications relating to the • Average Hours Per Response: 1/12 proposed rule change between the hr. (5 min.) Commission and any person, other than 7 17 CFR 200.30–3(a)(12). those that may be withheld from the PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 E:\FR\FM\03OCN1.SGM 03OCN1

Agencies

[Federal Register Volume 70, Number 190 (Monday, October 3, 2005)]
[Notices]
[Pages 57638-57640]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-5354]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52515; File No. SR-NASD-2005-106]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing of Proposed Rule Change by National 
Association of Securities Dealers, Inc. Regarding Fees for Closed-End 
Funds Listing on The Nasdaq SmallCap Market

September 27, 2005.
    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 August 31, 2005, the National Association of Securities Dealers, 
Inc. (``NASD''), through its subsidiary, The Nasdaq Stock Market, Inc. 
(``Nasdaq''), filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Nasdaq. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to amend NASD Rules 4510 and 4520. The text of the 
proposed rule change is below. Proposed new language is italicized; 
proposed deletions are in [brackets].
* * * * *

4510. The Nasdaq National Market

    (a)-(c) No change.
    (d) Annual Fee--American Depositary Receipts (ADRs) and Closed-End 
Funds.
    (1)-(3) No change.
    (4) 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 in The Nasdaq National Market or The 
Nasdaq SmallCap Market, as shown in the issuer's most recent periodic 
reports required to be filed with the appropriate regulatory authority 
or in more recent information held by Nasdaq. The maximum annual fee 
applicable to a fund family shall not exceed $75,000. For purposes of 
this rule, a ``fund family'' is defined as two or more Closed-End Funds 
that have a common investment adviser or have investment advisers who 
are ``affiliated persons'' as defined in Section 2(a)(3) of the 
Investment Company Act of 1940, as amended.
    (5)-(6) No change.
    (e) No change.

4520. The Nasdaq SmallCap Market

    (a) Entry Fee.
    (1)-(2) No change.
    (3) A closed-end management investment company registered under the 
Investment Company Act of 1940, as amended (a ``Closed-End Fund''), 
that submits an application for inclusion of securities in The Nasdaq 
SmallCap Market shall pay to the Nasdaq Stock Market, Inc. an entry fee 
of $5,000 (of which $1,000 represents a non-refundable, application 
fee).
    ([3]4) The Board of Directors of The Nasdaq Stock Market, Inc. or 
its designee may, in its discretion, defer or

[[Page 57639]]

waive all or any part of the entry fee prescribed herein.
    ([4]5) Total shares outstanding means the aggregate of all classes 
of equity securities to be included in The Nasdaq SmallCap Market as 
shown in the issuer's most recent periodic report or in more recent 
information held by Nasdaq or, in the case of new issues, as shown in 
the offering circular, required to be filed with the issuer's 
appropriate regulatory authority.
    ([5]6) An issuer that submits an application for inclusion of any 
class of rights in The Nasdaq SmallCap Market, shall pay, at the time 
of its application, a non-refundable application fee to The Nasdaq 
Stock Market of $1,000.
    ([6]7) The fees described in this Rule 4520(a) shall not be 
applicable with respect to any securities that (i) are listed on a 
national securities exchange but not listed on Nasdaq, or (ii) are 
listed on the New York Stock Exchange and Nasdaq, if the issuer of such 
securities transfers their listing exclusively to the Nasdaq SmallCap 
Market.
    ([7]8) The fees described in this Rule 4520(a) shall not be 
applicable to an issuer (i) whose securities are listed on the New York 
Stock Exchange and designated as national market securities pursuant to 
the plan governing New York Stock Exchange securities at the time such 
securities are approved for listing on Nasdaq, and (ii) that maintains 
such listing and designation after it lists such securities on Nasdaq.
    (b) No change.
    (c) Annual Fee.
    (1)-(2) No change.
    (3) Notwithstanding paragraph (1), a Closed-End Fund listed on The 
Nasdaq SmallCap Market shall pay to The Nasdaq Stock Market, Inc. an 
annual fee calculated based on total shares outstanding according to 
the following schedule:

Up to 5 million shares.......................................    $15,000
5+ to 10 million shares......................................    $17,500
10+ to 25 million shares.....................................    $20,000
25+ to 50 million shares.....................................    $22,500
50+ to 100 million shares....................................    $30,000
100+ to 250 million shares...................................    $50,000
Over 250 million shares......................................    $75,000
 

    ([3]4) The Board of Directors of The Nasdaq Stock Market, Inc. or 
its designee may, in its discretion, defer or waive all or any part of 
the annual fee prescribed herein.
    ([4]5) If a class of securities is removed from The Nasdaq SmallCap 
Market, that portion of the annual fees for such class of securities 
attributable to the months following the date of removal shall not be 
refunded, except such portion shall be applied to Nasdaq National 
Market fees for that calendar year.
    ([5]6) Total shares outstanding means the aggregate of all classes 
of equity securities included in The Nasdaq SmallCap Market as shown in 
the issuer's most recent periodic report required to be filed with the 
issuer's appropriate regulatory authority or in more recent information 
held by Nasdaq. In the case of foreign issuers, total shares 
outstanding shall include only those shares issued and outstanding in 
the United States.
    (7) Notwithstanding paragraph (6), 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 in 
The Nasdaq National Market and The Nasdaq SmallCap Market, as shown in 
the issuer's most recent periodic reports required to be filed with the 
appropriate regulatory authority or in more recent information held by 
Nasdaq. The maximum annual fee applicable to a fund family shall not 
exceed $75,000. For purposes of this rule, a ``fund family'' is defined 
as two or more Closed-End Funds that have a common investment adviser 
or have investment advisers who are ``affiliated persons'' as defined 
in Section 2(a)(3) of the Investment Company Act of 1940, as amended.
    ([6]8) In lieu of the fees described in Rule 4510(c)(1), the annual 
fee shall be $15,000 for each issuer (i) whose securities are listed on 
the New York Stock Exchange and designated as national market 
securities pursuant to the plan governing New York Stock Exchange 
securities at the time such securities are approved for listing on 
Nasdaq, and (ii) that maintains such listing and designation after it 
lists such securities on Nasdaq. Such annual fee shall be assessed on 
the first anniversary of the issuer's listing on Nasdaq.
    (d) 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, Nasdaq 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. Nasdaq 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
    Currently, Closed-End Funds listing on The Nasdaq SmallCap Market 
(``SmallCap Market'') are required to pay entry and annual fees 
according to the applicable fee schedules set forth in NASD Rule 
4520.\3\ These entry fees range from $25,000 to $50,000 and the annual 
fees from $17,500 to $21,000.
---------------------------------------------------------------------------

    \3\ Closed-End Funds are evaluated for listing on the SmallCap 
Market under the general initial listing criteria contained in NASD 
Rules 4310 and 4320.
---------------------------------------------------------------------------

    Pursuant to the rule change, the entry fee for listing a Closed-End 
Fund on the SmallCap Market will decrease to $5,000 (of which $1,000 is 
a non-refundable application fee) per fund. Annual fees will be based 
on the total number of shares outstanding, with a minimum fee of 
$15,000 and a maximum fee of $75,000. For the purposes of determining 
the annual fee, fund sponsors will be permitted to aggregate the shares 
outstanding of all Closed-End Funds listed on either The Nasdaq 
National Market (``National Market'') or the SmallCap Market that are 
part of the same fund family. As a result, the annual fee may not 
exceed $75,000 per fund family. For the purposes of this rule, a ``fund 
family'' is defined as two or more Closed-End Funds that share a common 
investment adviser or investment advisers who are ``affiliated 
persons'' as defined in Section 2(a)(3) of the Investment Company Act 
of 1940, as amended.
    Nasdaq believes there are several reasons to adopt new fees 
applicable to Closed-End Funds listing on the SmallCap Market. First, 
the new annual fee schedule would accommodate the needs of fund 
sponsors more effectively than the current fee schedule because 
sponsors often choose to issue and list multiple funds in the same 
family. Currently, each fund that is listed on The SmallCap Market is 
assessed a separate annual fee. Under the proposed rules, fund families 
would be permitted to aggregate shares outstanding of listed funds to 
determine the annual fee, subject to an annual cap of $75,000 per fund 
family.
    Second, under the proposed rule change, funds listed on the 
SmallCap Market would be subject to a schedule of annual fees identical 
to that of funds listed on the National Market.\4\ Because

[[Page 57640]]

fund families would be permitted to aggregate shares outstanding across 
markets for the purposes of calculating the annual fee, Nasdaq believes 
that matching fee schedules would minimize problems that could arise if 
fund families listing funds on both the National Market and SmallCap 
Market were subject to conflicting fee schedules. Although an 
individual fund listing on the SmallCap Market with over 25 million 
total shares outstanding would be subject to an increase in annual fees 
under the proposed rules, Nasdaq believes the benefits of substantially 
lower entry fees and the ability of fund families to aggregate shares 
across markets outweigh the burden to funds of the limited fee 
increase.
---------------------------------------------------------------------------

    \4\ Nasdaq recently adopted new listing fees for Closed-End 
Funds listing on the National Market. See Securities Exchange Act 
Release No. 52277 (August 17, 2005), 70 FR 49347 (August 23, 2005) 
(SR-NASD-2005-096).
---------------------------------------------------------------------------

    Finally, in many cases where multiple funds are listed, the new fee 
schedule would lower fees payable by Closed-End Funds, thereby 
benefiting the fund investors that ultimately pay those expenses by 
reducing the costs associated with listing fund shares. In addition, 
Nasdaq believes that establishing lower fees for fund families would 
permit Nasdaq to compete more effectively for listings with other 
markets.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 15A of the Act,\5\ in general, and with 
Section 15A(b)(5) of the Act,\6\ in particular, in that it provides for 
the equitable allocation of reasonable fees, dues, and other charges 
among members and issuers and other persons using any facility or 
system which the NASD operates or controls. The proposed change to the 
entry and annual fees will apply equally to all Closed-End Funds 
listing on The Nasdaq SmallCap Market. Furthermore, Nasdaq believes 
that the proposed fees are reasonable and fall within the range of fees 
charged by other markets.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78o-3.
    \6\ 15 U.S.C. 78o-3(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq does not believe that the proposed rule change would impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

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

    Written comments were neither solicited nor received.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding, or (ii) as to 
which the NYSE consents, the Commission will:
    A. By order approve such proposed rule change; or
    B. institute proceedings to determine whether the proposed rule 
change should be 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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-NASD-2005-106 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-9303.

All submissions should refer to File Number SR-NASD-2005-106. This file 
number should be included on the subject line if e-mail 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 inspection and 
copying in the Commission's Public Reference Room. Copies of such 
filing also will be available for inspection and copying at the 
principal office of Nasdaq. 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 publicly available. All submissions should refer to 
File Number SR-NASD-2005-106 and should be submitted on or before 
October 24, 2005.\7\
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    \7\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
Jonathan G. Katz,
Secretary.
[FR Doc. E5-5354 Filed 9-30-05; 8:45 am]
BILLING CODE 8010-01-P
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