Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Granting Approval to a Proposed Rule Change To Modify the Eligibility Criteria for the Second Compliance Period for a Bid Price Deficiency on the Nasdaq Capital Market, 65044-65046 [2010-26474]

Download as PDF 65044 Federal Register / Vol. 75, No. 203 / Thursday, October 21, 2010 / Notices C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (1) Significantly affect the protection of investors or the public interest; (2) impose any significant burden on competition; and (3) 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 Act13 and Rule 19b– 4(f)(6) thereunder.14 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: 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–ISE–2010–101 on the subject line. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. SECURITIES AND EXCHANGE COMMISSION All submissions should refer to File Number SR–ISE–2010–101. 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 website viewing and printing in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. 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–ISE– 2010–101 and should be submitted on or before November 12, 2010. [Release No. 34–63110; File No. SR– NASDAQ–2010–107] For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–26509 Filed 10–20–10; 8:45 am] BILLING CODE 8011–01–P Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, 13 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). When filing a proposed rule change pursuant to Rule 19b–4(f)(6) under the Act, an exchange is required to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Commission notes that the Exchange has satisfied this requirement. jlentini on DSKJ8SOYB1PROD with NOTICES 14 17 VerDate Mar<15>2010 17:24 Oct 20, 2010 Jkt 223001 Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Granting Approval to a Proposed Rule Change To Modify the Eligibility Criteria for the Second Compliance Period for a Bid Price Deficiency on the Nasdaq Capital Market October 14, 2010. I. Introduction On August 25, 2010, 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 modify the eligibility criteria in order for a listed company to qualify for the second compliance period for a bid price deficiency on the Nasdaq Capital Market. The proposed rule change was published for comment in the Federal Register on September 2, 2010.3 The Commission received no comment letters on the proposal. This order approves the proposed rule change. II. Description of the Proposal Nasdaq is proposing, in order for a company to receive a second compliance period for a bid price deficiency on the Nasdaq Capital Market (‘‘Capital Market’’), to modify the eligibility criteria concerning market value of publicly held shares. Under the current Nasdaq rules, when a company has a closing bid price below $1 for 30 consecutive days, it is deemed deficient under Nasdaq’s bid price continued listing standard, and promptly receives written notice that it has 180 calendar days from such notification to regain compliance.4 Compliance can be achieved by maintaining a minimum $1 closing bid price for ten consecutive days. At the expiration of the 180-day compliance period, a company can receive an additional 180-day compliance period,5 provided it is either already listed on the Capital Market or transfers to that market and satisfies all of the Capital Market’s 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 62782 (August 27, 2010), 75 FR 53994 (‘‘Notice’’). 4 See Nasdaq Rule 5810(c)(3)(A). 5 In its filing, Nasdaq refers to the 180-day compliance period as a ‘‘grace’’ period. 2 17 15 17 PO 00000 CFR 200.30–3(a)(12). Frm 00061 Fmt 4703 Sfmt 4703 E:\FR\FM\21OCN1.SGM 21OCN1 Federal Register / Vol. 75, No. 203 / Thursday, October 21, 2010 / Notices initial listing criteria, except for bid price.6 Nasdaq has observed that many companies fail to qualify for the second compliance period because they do not meet the market value of publicly held shares requirement for initial listing on the Capital Market. Nasdaq therefore is proposing to ease the requirements for the second compliance period on the Capital Market by allowing a company to qualify if it satisfies the lower continued listing requirement for market value of publicly held shares, thereby enabling more companies to be eligible for the second compliance period.7 The company would still need to meet all of the other initial listing criteria for Capital Market other than bid price.8 Under the proposal, the company will need to notify Nasdaq of its intent to cure the bid price deficiency. If a company does not indicate its intent to cure the deficiency, or if it does not appear to Nasdaq staff that it is possible for the company to cure the deficiency, the company would not be eligible for the second compliance period under the Capital Market rules. Under the proposal, a company listed on Nasdaq’s Global or Global Select Markets would be permitted to transfer to the Capital Market if it meets the applicable market value of publicly held shares requirement for continued listing and all other applicable requirements for initial listing on the Capital Market (except for the bid price requirement), and notifies Nasdaq of its intent to cure the bid price deficiency.9 Once on the Capital Market, the company would be eligible for the second compliance period on the Capital Market, unless it does not appear to Nasdaq staff that it is possible for the Company to cure the deficiency.10 In its filing, Nasdaq noted 6 See Nasdaq Rule 5810(c)(3)(A)(i)–(ii). initial listing requirements for market value of publicly held shares for common stock on the Capital Market range from $5 million to $15 million, depending on the listing standard under which the company qualifies; the continued listing requirement is $1 million. See Nasdaq Rules 5505(b) and 5555(a)(4). 8 The initial listing standards for the Capital Market are set forth in Nasdaq Rule 5505 and include an equity standard, market value of listed securities standard, and a net income standard. See Nasdaq Rule 5505. 9 As noted above, Nasdaq Global and Global Select companies can currently receive the additional 180 day compliance period, provided they meet all the applicable Capital Market initial requirements and transfer to that market. 10 According to Nasdaq, once a company transfers to the Capital Market, Nasdaq would assess whether it is possible for the company to cure the deficiency. If not, the company would be denied the second 180 day compliance period, and Nasdaq would commence delisting proceedings for the company as a Capital Market listing. jlentini on DSKJ8SOYB1PROD with NOTICES 7 The VerDate Mar<15>2010 17:24 Oct 20, 2010 Jkt 223001 that under the proposal, while certain companies that do not currently qualify for the second compliance period could receive an additional 180 days to comply with the bid price requirement, the proposed rule change would not extend the overall maximum time of 360 days that is currently available to qualifying companies. Nasdaq also proposes to remove language in Rule 5810(c)(3) referencing the payment of fees by a company which transfers to the Capital Market. The current language implies that there are fees applicable to such a company. However, no fees are applicable under Rule 5920(a) to such a company. Nasdaq is proposing to delete the language, to remove any confusion, and has also proposed some other clarifying and nonsubstantive changes to the rule.11 III. Discussion and Commission Findings After careful consideration, 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 12 and, in particular, the requirements of Section 6 of the Act.13 Specifically, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,14 which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest and are not designed to permit unfair discrimination between customers, issuers, brokers or dealers. The development and enforcement of adequate standards governing the initial and continued listing of securities on an exchange is an activity of critical importance to financial markets and the investing public. Listing standards serve as a means for an exchange to screen issuers and to provide listed status only to bona fide companies that have, or in the case of an initial public offering will 11 See Notice, supra note 3. approving this proposed rule change the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 13 15 U.S.C. 78f. 14 15 U.S.C. 78f(b)(5). 12 In PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 65045 have, sufficient public float, investor base, and trading interest to provide the depth and liquidity necessary to promote fair and orderly markets. Adequate standards are especially important given the expectations of investors regarding exchange trading and the imprimatur of listing on a particular market. Once a security has been approved for initial listing, maintenance criteria allow an exchange to monitor the status and trading characteristics of that issue to ensure that it continues to meet the exchange’s standards for market depth and liquidity so that fair and orderly markets can be maintained, and so that only companies suitable for listing remain listed on a national securities exchange. The Commission believes that the proposal to modify the eligibility criteria for the second compliance period for a bid price deficiency on the Capital Market is reasonable and consistent with the Act, and furthers investor protection and the public interest. As stated above, Nasdaq has observed that many companies fail to qualify for the second compliance period because they do not meet the market value of publicly held shares requirement for initial listing on the Capital Market. The Commission notes that to qualify for a second compliance period, the company would still need to meet all of the other initial listing criteria for Capital Market other than bid price, as well as the continued listing requirement for market value of publicly held shares.15 These standards should help continue to ensure that only companies that meet the minimum requirements for adequate depth and liquidity remain listed for an extended period of time on the Capital Market. In addition, the company will need to notify Nasdaq of its intent to cure the bid price deficiency. If a Capital Market company does not indicate its intent to cure the deficiency, or if it does not appear to Nasdaq staff that it is possible for the company to cure the deficiency, the company would not be eligible for the second compliance period. Similarly, a company listed on the Global or Global Select Markets would be permitted to transfer to the Capital Market if it meets the applicable market value of publicly held shares requirement for continued listing and all other applicable requirements for initial listing on the Capital Market (except for the bid price requirement) and notifies Nasdaq of its intent to cure the bid price deficiency. Once on the Capital Market, the company would be eligible for the second compliance 15 See E:\FR\FM\21OCN1.SGM supra note 8. 21OCN1 jlentini on DSKJ8SOYB1PROD with NOTICES 65046 Federal Register / Vol. 75, No. 203 / Thursday, October 21, 2010 / Notices period on the Capital Market, unless it does not appear to Nasdaq staff that it is possible for the Company to cure the deficiency. The Commission believes that requiring a company to affirmatively state its intent to cure the bid price deficiency and Nasdaq staff to determine whether it is possible for the company to cure that deficiency, provides further protections to investors, by helping to ensure that only companies that are serious and capable of gaining compliance with the Capital Market listing standards within the timeframe provided qualify for the second compliance period. In this regard, the Commission would expect a thorough review to ensure that it is possible for the bid price deficiency to be cured at the end of the second 180 day compliance period and, if not, would expect Nasdaq to immediately commence delisting proceedings. In approving the Nasdaq’s proposal, the Commission recognizes that certain companies that do not currently qualify for the second compliance period could receive additional time to remain listed on a public market. The proposal, however, does not extend the overall maximum time of 360 days that a company may remain listed before delisting proceedings will commence. Moreover, the proposal eliminates the automatic nature of the second 180 day bid price compliance period that exists under the current rules. Further, notwithstanding the change in eligibility criteria for a second compliance period, the Commission expects Nasdaq to monitor companies closely that are out of compliance and use its authority to delist issuers in a prompt, efficient, and fair manner where necessary and appropriate, in accordance with Nasdaq Rule 5100, including where there are public interest or other concerns such as low price or market value, that make continued listing unwarranted. Finally, the Commission finds that Nasdaq’s proposal to remove language in Rule 5810(c)(3) will reduce confusion regarding the application of the rule by clarifying that there are no fees applicable to a company which transfer to the Capital Market. The additional changes proposed by Nasdaq to the text of Rule 5810(c)(3)(A)(i)–(ii) conform the rule language and format of the two paragraphs and clarify that Nasdaq will assess a company for compliance with applicable listing requirements based on the company’s most recent public filings and market information. The Commission believes that these changes either clarify the rule or are nonsubstantive. VerDate Mar<15>2010 17:24 Oct 20, 2010 Jkt 223001 IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,16 that the proposed rule change (SR–NASDAQ– 2010–107), be, and hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–26474 Filed 10–20–10; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION In the Matter of Cape Systems Group, Inc., Caribbean Cigar Company, Casual Male Corp., Cell Power Technologies, Inc., Cellmetrix, Inc. (f/k/a BCAM International, Inc.), Cellular Products, Inc. (n/k/a 872 Main Street Corp.), Ceptor Corp., CGS Scientific Corp., and Ciprico, Inc., File No. 500–1; Order of Suspension of Trading October 19, 2010. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Cape Systems Group, Inc. because it has not filed any periodic reports since the period ended December 31, 2006. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Caribbean Cigar Company because it has not filed any periodic reports since the period ended September 30, 1998. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Casual Male Corp. because it has not filed any periodic reports since the period ended February 3, 2001. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Cell Power Technologies, Inc. because it has not filed any periodic reports since the period ended April 30, 2006. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Cellmetrix, Inc. (f/k/a BCAM International, Inc.) because it has not filed any periodic reports since the period ended June 30, 2000. It appears to the Securities and Exchange Commission that there is a 16 15 17 17 PO 00000 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). Frm 00063 Fmt 4703 Sfmt 4703 lack of current and accurate information concerning the securities of Cellular Products, Inc. (n/k/a 872 Main Street Corp.) because it has not filed any periodic reports since the period ended December 31, 1994. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Ceptor Corp. because it has not filed any periodic reports since the period ended September 30, 2007. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of CGS Scientific Corp. because it has not filed any periodic reports since the period ended February 29, 2000. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Ciprico, Inc. because it has not filed any periodic reports since the period ended December 31, 2007. The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above-listed companies. Therefore, it is ordered, pursuant to Section 12(k) of the Securities Exchange Act of 1934, that trading in the securities of the above-listed companies is suspended for the period from 9:30 a.m. EDT on October 19, 2010, through 11:59 p.m. EDT on November 1, 2010. By the Commission. Elizabeth M. Murphy, Secretary. [FR Doc. 2010–26698 Filed 10–19–10; 11:15 am] BILLING CODE 8011–01–P SOCIAL SECURITY ADMINISTRATION Agency Information Collection Activities: Comment Request The Social Security Administration (SSA) publishes a list of information collection packages requiring clearance by the Office of Management and Budget (OMB) in compliance with Public Law (Pub. L.) 104–13, the Paperwork Reduction Act of 1995, effective October 1, 1995. This notice includes a new information collection for OMB approval. SSA is soliciting comments on the accuracy of the agency’s burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and ways to minimize burden on respondents, including the use of automated E:\FR\FM\21OCN1.SGM 21OCN1

Agencies

[Federal Register Volume 75, Number 203 (Thursday, October 21, 2010)]
[Notices]
[Pages 65044-65046]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-26474]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63110; File No. SR-NASDAQ-2010-107]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order 
Granting Approval to a Proposed Rule Change To Modify the Eligibility 
Criteria for the Second Compliance Period for a Bid Price Deficiency on 
the Nasdaq Capital Market

October 14, 2010.

I. Introduction

    On August 25, 2010, 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 
modify the eligibility criteria in order for a listed company to 
qualify for the second compliance period for a bid price deficiency on 
the Nasdaq Capital Market. The proposed rule change was published for 
comment in the Federal Register on September 2, 2010.\3\ The Commission 
received no comment letters on the proposal. This order approves the 
proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 62782 (August 27, 
2010), 75 FR 53994 (``Notice'').
---------------------------------------------------------------------------

II. Description of the Proposal

    Nasdaq is proposing, in order for a company to receive a second 
compliance period for a bid price deficiency on the Nasdaq Capital 
Market (``Capital Market''), to modify the eligibility criteria 
concerning market value of publicly held shares. Under the current 
Nasdaq rules, when a company has a closing bid price below $1 for 30 
consecutive days, it is deemed deficient under Nasdaq's bid price 
continued listing standard, and promptly receives written notice that 
it has 180 calendar days from such notification to regain 
compliance.\4\ Compliance can be achieved by maintaining a minimum $1 
closing bid price for ten consecutive days. At the expiration of the 
180-day compliance period, a company can receive an additional 180-day 
compliance period,\5\ provided it is either already listed on the 
Capital Market or transfers to that market and satisfies all of the 
Capital Market's

[[Page 65045]]

initial listing criteria, except for bid price.\6\
---------------------------------------------------------------------------

    \4\ See Nasdaq Rule 5810(c)(3)(A).
    \5\ In its filing, Nasdaq refers to the 180-day compliance 
period as a ``grace'' period.
    \6\ See Nasdaq Rule 5810(c)(3)(A)(i)-(ii).
---------------------------------------------------------------------------

    Nasdaq has observed that many companies fail to qualify for the 
second compliance period because they do not meet the market value of 
publicly held shares requirement for initial listing on the Capital 
Market. Nasdaq therefore is proposing to ease the requirements for the 
second compliance period on the Capital Market by allowing a company to 
qualify if it satisfies the lower continued listing requirement for 
market value of publicly held shares, thereby enabling more companies 
to be eligible for the second compliance period.\7\ The company would 
still need to meet all of the other initial listing criteria for 
Capital Market other than bid price.\8\
---------------------------------------------------------------------------

    \7\ The initial listing requirements for market value of 
publicly held shares for common stock on the Capital Market range 
from $5 million to $15 million, depending on the listing standard 
under which the company qualifies; the continued listing requirement 
is $1 million. See Nasdaq Rules 5505(b) and 5555(a)(4).
    \8\ The initial listing standards for the Capital Market are set 
forth in Nasdaq Rule 5505 and include an equity standard, market 
value of listed securities standard, and a net income standard. See 
Nasdaq Rule 5505.
---------------------------------------------------------------------------

    Under the proposal, the company will need to notify Nasdaq of its 
intent to cure the bid price deficiency. If a company does not indicate 
its intent to cure the deficiency, or if it does not appear to Nasdaq 
staff that it is possible for the company to cure the deficiency, the 
company would not be eligible for the second compliance period under 
the Capital Market rules. Under the proposal, a company listed on 
Nasdaq's Global or Global Select Markets would be permitted to transfer 
to the Capital Market if it meets the applicable market value of 
publicly held shares requirement for continued listing and all other 
applicable requirements for initial listing on the Capital Market 
(except for the bid price requirement), and notifies Nasdaq of its 
intent to cure the bid price deficiency.\9\ Once on the Capital Market, 
the company would be eligible for the second compliance period on the 
Capital Market, unless it does not appear to Nasdaq staff that it is 
possible for the Company to cure the deficiency.\10\ In its filing, 
Nasdaq noted that under the proposal, while certain companies that do 
not currently qualify for the second compliance period could receive an 
additional 180 days to comply with the bid price requirement, the 
proposed rule change would not extend the overall maximum time of 360 
days that is currently available to qualifying companies.
---------------------------------------------------------------------------

    \9\ As noted above, Nasdaq Global and Global Select companies 
can currently receive the additional 180 day compliance period, 
provided they meet all the applicable Capital Market initial 
requirements and transfer to that market.
    \10\ According to Nasdaq, once a company transfers to the 
Capital Market, Nasdaq would assess whether it is possible for the 
company to cure the deficiency. If not, the company would be denied 
the second 180 day compliance period, and Nasdaq would commence 
delisting proceedings for the company as a Capital Market listing.
---------------------------------------------------------------------------

    Nasdaq also proposes to remove language in Rule 5810(c)(3) 
referencing the payment of fees by a company which transfers to the 
Capital Market. The current language implies that there are fees 
applicable to such a company. However, no fees are applicable under 
Rule 5920(a) to such a company. Nasdaq is proposing to delete the 
language, to remove any confusion, and has also proposed some other 
clarifying and non-substantive changes to the rule.\11\
---------------------------------------------------------------------------

    \11\ See Notice, supra note 3.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    After careful consideration, 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 \12\ and, in particular, the requirements of Section 6 of the 
Act.\13\ Specifically, the Commission finds that the proposed rule 
change is consistent with Section 6(b)(5) of the Act,\14\ which 
requires, among other things, that the rules of a national securities 
exchange be designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest 
and are not designed to permit unfair discrimination between customers, 
issuers, brokers or dealers.
---------------------------------------------------------------------------

    \12\ In approving this proposed rule change the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \13\ 15 U.S.C. 78f.
    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The development and enforcement of adequate standards governing the 
initial and continued listing of securities on an exchange is an 
activity of critical importance to financial markets and the investing 
public. Listing standards serve as a means for an exchange to screen 
issuers and to provide listed status only to bona fide companies that 
have, or in the case of an initial public offering will have, 
sufficient public float, investor base, and trading interest to provide 
the depth and liquidity necessary to promote fair and orderly markets. 
Adequate standards are especially important given the expectations of 
investors regarding exchange trading and the imprimatur of listing on a 
particular market. Once a security has been approved for initial 
listing, maintenance criteria allow an exchange to monitor the status 
and trading characteristics of that issue to ensure that it continues 
to meet the exchange's standards for market depth and liquidity so that 
fair and orderly markets can be maintained, and so that only companies 
suitable for listing remain listed on a national securities exchange.
    The Commission believes that the proposal to modify the eligibility 
criteria for the second compliance period for a bid price deficiency on 
the Capital Market is reasonable and consistent with the Act, and 
furthers investor protection and the public interest. As stated above, 
Nasdaq has observed that many companies fail to qualify for the second 
compliance period because they do not meet the market value of publicly 
held shares requirement for initial listing on the Capital Market. The 
Commission notes that to qualify for a second compliance period, the 
company would still need to meet all of the other initial listing 
criteria for Capital Market other than bid price, as well as the 
continued listing requirement for market value of publicly held 
shares.\15\ These standards should help continue to ensure that only 
companies that meet the minimum requirements for adequate depth and 
liquidity remain listed for an extended period of time on the Capital 
Market.
---------------------------------------------------------------------------

    \15\ See supra note 8.
---------------------------------------------------------------------------

    In addition, the company will need to notify Nasdaq of its intent 
to cure the bid price deficiency. If a Capital Market company does not 
indicate its intent to cure the deficiency, or if it does not appear to 
Nasdaq staff that it is possible for the company to cure the 
deficiency, the company would not be eligible for the second compliance 
period. Similarly, a company listed on the Global or Global Select 
Markets would be permitted to transfer to the Capital Market if it 
meets the applicable market value of publicly held shares requirement 
for continued listing and all other applicable requirements for initial 
listing on the Capital Market (except for the bid price requirement) 
and notifies Nasdaq of its intent to cure the bid price deficiency. 
Once on the Capital Market, the company would be eligible for the 
second compliance

[[Page 65046]]

period on the Capital Market, unless it does not appear to Nasdaq staff 
that it is possible for the Company to cure the deficiency.
    The Commission believes that requiring a company to affirmatively 
state its intent to cure the bid price deficiency and Nasdaq staff to 
determine whether it is possible for the company to cure that 
deficiency, provides further protections to investors, by helping to 
ensure that only companies that are serious and capable of gaining 
compliance with the Capital Market listing standards within the 
timeframe provided qualify for the second compliance period. In this 
regard, the Commission would expect a thorough review to ensure that it 
is possible for the bid price deficiency to be cured at the end of the 
second 180 day compliance period and, if not, would expect Nasdaq to 
immediately commence delisting proceedings.
    In approving the Nasdaq's proposal, the Commission recognizes that 
certain companies that do not currently qualify for the second 
compliance period could receive additional time to remain listed on a 
public market. The proposal, however, does not extend the overall 
maximum time of 360 days that a company may remain listed before 
delisting proceedings will commence. Moreover, the proposal eliminates 
the automatic nature of the second 180 day bid price compliance period 
that exists under the current rules. Further, notwithstanding the 
change in eligibility criteria for a second compliance period, the 
Commission expects Nasdaq to monitor companies closely that are out of 
compliance and use its authority to delist issuers in a prompt, 
efficient, and fair manner where necessary and appropriate, in 
accordance with Nasdaq Rule 5100, including where there are public 
interest or other concerns such as low price or market value, that make 
continued listing unwarranted.
    Finally, the Commission finds that Nasdaq's proposal to remove 
language in Rule 5810(c)(3) will reduce confusion regarding the 
application of the rule by clarifying that there are no fees applicable 
to a company which transfer to the Capital Market. The additional 
changes proposed by Nasdaq to the text of Rule 5810(c)(3)(A)(i)-(ii) 
conform the rule language and format of the two paragraphs and clarify 
that Nasdaq will assess a company for compliance with applicable 
listing requirements based on the company's most recent public filings 
and market information. The Commission believes that these changes 
either clarify the rule or are non-substantive.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\16\ that the proposed rule change (SR-NASDAQ-2010-107), be, and 
hereby is, approved.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
Florence E. Harmon,
Deputy Secretary.
---------------------------------------------------------------------------

    \17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

[FR Doc. 2010-26474 Filed 10-20-10; 8:45 am]
BILLING CODE 8011-01-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.