Self-Regulatory Organization; the NASDAQ Stock Market LLC; Order Approving Proposed Rule Change To Modify Its Listing Rules in the Case of a Reverse Merger, 1569 [E7-311]

Download as PDF Federal Register / Vol. 72, No. 8 / Friday, January 12, 2007 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55052; File No. SR– NASDAQ–2006–047] Self-Regulatory Organization; the NASDAQ Stock Market LLC; Order Approving Proposed Rule Change To Modify Its Listing Rules in the Case of a Reverse Merger January 5, 2007. On November 13, 2006, The NASDAQ Stock Market LLC (‘‘Nasdaq’’) 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 clarify the process an issuer must follow when applying for initial listing in connection with a reverse merger. The proposed rule change was published for comment in the Federal Register on December 6, 2006.3 The Commission received no comments regarding the proposal. The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.4 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,5 which requires that the rules of an exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national securities system, and, in general, to protect investors and the public interest. Nasdaq proposes to amend Nasdaq Rule 4340(a) and related interpretive material to state that an issuer must apply for initial listing prior to consummating a transaction whereby the issuer combines with an entity that is not listed on Nasdaq, resulting in a change of control of the issuer and potentially allowing the non-Nasdaq entity to obtain a ‘‘backdoor listing’’ on Nasdaq (‘‘Reverse Merger’’). Current Nasdaq Rule 4340(a) states that an issuer must apply for initial listing ‘‘following’’ a Reverse Merger. Nasdaq proposes to replace the word ‘‘following’’ with the phrase ‘‘in connection with’’ and require the issuer 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 54825 (November 28, 2006), 71 FR 70818. 4 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 5 5 15 U.S.C. 78f(b)(5). rmajette on PROD1PC67 with NOTICES 2 17 VerDate Aug<31>2005 15:41 Jan 11, 2007 Jkt 211001 to ‘‘submit an application for the posttransaction entity with sufficient time to allow Nasdaq to complete its review before the transaction is completed.’’ Because the entity resulting from the Reverse Merger could be substantially different from the one originally approved for Nasdaq listing, it is reasonable and consistent with the Act for Nasdaq to conduct a de novo listing review of the new entity and, for the new entity to keep the listing, to require sufficient time to complete the review before the Reverse Merger is completed. The Commission believes that this proposal is reasonably designed to enhance the transparency and integrity of the listing process. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,6 that the proposed rule change (SR–NASDAQ– 2006–047) be, and it hereby is, approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.7 Nancy M. Morris, Secretary. [FR Doc. E7–311 Filed 1–11–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55042; File No. SR– NASDAQ–2006–055] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change as Amended by Amendment No. 1 To Temporarily Adjust Tier Volume Limits January 4, 2007. 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 15, 2006, The NASDAQ Stock Market LLC (‘‘Nasdaq’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by Nasdaq. On December 21, 2006, the Exchange submitted Amendment No. 1 to the proposed rule change. The order provides notice of the proposed rule change as modified by Amendment No. 1 and approves the proposed rule 6 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 7 17 PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 1569 change, as amended, on an accelerated basis. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to reduce, for the month of November 2006, the average daily volume tiers in Nasdaq-listed securities contained in Nasdaq Rule 7018(a) to qualify for certain fee and rebate levels. The text of the proposed rule change is available at Nasdaq, the Commission’s Public Reference Room, and https://nasdaq.complinet.com/ file_store/pdf/rulebooks/SR–NASDAQ– 2006–055.pdf. 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 III 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 Nasdaq is proposing to reduce, for the month of November 2006, the average daily volume tiers for trading and routing in Nasdaq-listed securities contained in Nasdaq Rule 7018(a) to qualify for certain fee and rebate levels. Currently, in order to qualify for a pershare execution fee of $0.0028, members must have an average daily volume through Nasdaq facilities in all securities during a particular month of (i) more than 30 million shares of liquidity provided, and (ii) more than 50 million shares of liquidity accessed and/ or routed. For the month of November 2006, Nasdaq is proposing to reduce those qualification volume tiers to 27 million shares and 47 million shares, respectively. In addition, Nasdaq is also reducing for the month of November 2006 the monthly average daily volume tier required to obtain the $0.0025 credit rebate from its current 30 million share level to 27 million shares. For routed orders, to qualify for a fee of the greater of (a) $0.0028 per share executed or (b) a pass-through of all applicable access fees charged by electronic communications networks that charge E:\FR\FM\12JAN1.SGM 12JAN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 72, Number 8 (Friday, January 12, 2007)]
[Notices]
[Page 1569]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-311]



[[Page 1569]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55052; File No. SR-NASDAQ-2006-047]


Self-Regulatory Organization; the NASDAQ Stock Market LLC; Order 
Approving Proposed Rule Change To Modify Its Listing Rules in the Case 
of a Reverse Merger

January 5, 2007.
    On November 13, 2006, The NASDAQ Stock Market LLC (``Nasdaq'') 
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 
clarify the process an issuer must follow when applying for initial 
listing in connection with a reverse merger. The proposed rule change 
was published for comment in the Federal Register on December 6, 
2006.\3\ The Commission received no comments regarding the proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 54825 (November 28, 
2006), 71 FR 70818.
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\4\ In 
particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Act,\5\ which requires that the 
rules of an exchange be designed to promote just and equitable 
principles of trade, to remove impediments to and perfect the mechanism 
of a free and open market and a national securities system, and, in 
general, to protect investors and the public interest.
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    \4\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \5\ 5 15 U.S.C. 78f(b)(5).
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    Nasdaq proposes to amend Nasdaq Rule 4340(a) and related 
interpretive material to state that an issuer must apply for initial 
listing prior to consummating a transaction whereby the issuer combines 
with an entity that is not listed on Nasdaq, resulting in a change of 
control of the issuer and potentially allowing the non-Nasdaq entity to 
obtain a ``backdoor listing'' on Nasdaq (``Reverse Merger'').
    Current Nasdaq Rule 4340(a) states that an issuer must apply for 
initial listing ``following'' a Reverse Merger. Nasdaq proposes to 
replace the word ``following'' with the phrase ``in connection with'' 
and require the issuer to ``submit an application for the post-
transaction entity with sufficient time to allow Nasdaq to complete its 
review before the transaction is completed.'' Because the entity 
resulting from the Reverse Merger could be substantially different from 
the one originally approved for Nasdaq listing, it is reasonable and 
consistent with the Act for Nasdaq to conduct a de novo listing review 
of the new entity and, for the new entity to keep the listing, to 
require sufficient time to complete the review before the Reverse 
Merger is completed. The Commission believes that this proposal is 
reasonably designed to enhance the transparency and integrity of the 
listing process.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\6\ that the proposed rule change (SR-NASDAQ-2006-047) be, and it 
hereby is, approved.
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    \6\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E7-311 Filed 1-11-07; 8:45 am]
BILLING CODE 8011-01-P

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