Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Impose a Quarterly Maximum on the Listing of Additional Shares Fees Payable by Closed-End Funds, 4401-4403 [2011-1436]
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Federal Register / Vol. 76, No. 16 / Tuesday, January 25, 2011 / Notices
its implementation in the BOX trading
system.
After careful review, 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.11 In particular, the
Commission finds that the proposed
rule change is consistent with the
requirements of Section 6(b)(5) of the
Act,12 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 remove
impediments to and perfect the
mechanism for a free and open market
and a national market system and, in
general, to protect investors and the
public interest. The Commission
believes that Initiating Participant’s use
of the Surrender Quantity function
could benefit investors by allowing an
Initiating Participant the flexibility to
designate a lower amount than the forty
percent (40%) of the PIP Order to which
the Initiating Participant is entitled,
thereby providing the other PIP
Participants with the opportunity to
receive increased trade allocations.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act, that the
proposed rule change (SR–BX–2010–
083), be and hereby is approved.
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on January 6,
2011, 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, which Items have been
prepared by Nasdaq. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Elizabeth M. Murphy,
Secretary.
5920. The Nasdaq Capital Market
[FR Doc. 2011–1435 Filed 1–24–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63732; File No. SR–
NASDAQ–2011–007]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Impose a
Quarterly Maximum on the Listing of
Additional Shares Fees Payable by
Closed-End Funds
mstockstill on DSKH9S0YB1PROD with NOTICES
January 19, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
11 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).
12 15 U.S.C. 78f(b)(5).
13 17 CFR 200.30–3(a)(12).
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq proposes to impose a
quarterly maximum on the listing of
additional shares fees payable by
Closed-End Funds. Nasdaq will
implement the proposed rule change
immediately.
The text of the proposed rule change
is below. Proposed new language is in
italics.
5910. The NASDAQ Global Market
(a) No change.
(b) Additional Shares
(1)–(5) No change.
(6) The maximum fee charged to an
issuer that is a Closed-End Fund in any
quarter is $25,000 per Company.
(c)–(f) No change.
(a) No change.
(b) Additional Shares
(1)–(5) No change.
(6) The maximum fee charged to an
issuer that is a Closed-End Fund in any
quarter is $25,000 per Company.
(c)—(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,
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.
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00124
Fmt 4703
Sfmt 4703
4401
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Nasdaq currently assesses a fee for
listing additional shares of an already
listed class in the amount of $5,000 or
$0.01 per additional share, whichever is
higher, up to an annual maximum of
$65,000 per listed company.3 There is
no fee assessed for issuances of less than
50,000 shares per quarter.4 This fee
applies to both operating companies and
closed-end companies (‘‘Closed-End
Funds’’).
A Closed-End Fund is a type of
company regulated under the
Investment Company Act of 1940.5
Generally, a Closed-End Fund sells a
fixed number of shares and invests the
proceeds in investments chosen by its
investment adviser to achieve the funds
stated investment objectives.
Shareholders have an interest in the
fund’s investments, but generally cannot
redeem shares from the fund. Instead,
the Closed-End Fund’s shares are listed
and trade at a value which may be
greater or less than the fund’s assets.
Unlike operating companies, a ClosedEnd Fund is not taxed on its income so
long as it generates at least 90% of its
income from permissible sources,
including dividends on and gains from
the sale of stock or securities, and
distributes that income to its
shareholders.6 As a consequence, a
Closed-End Fund generally distributes
all of its income annually and does not
have access to retained earnings for new
investment opportunities. A Closed-End
Fund, therefore, frequently needs to
issue additional shares to raise new
capital in order to fund such
opportunities. This is in contrast to
operating companies, which generally
have access to retained earnings to
acquire new assets, and as a
consequence are not limited to issuing
shares.
Given the unique nature of ClosedEnd Funds, Nasdaq believes it is
appropriate to provide them relief from
the fee for listing additional shares in
the form of a $25,000 quarterly limit.
The quarterly maximum will reduce the
likelihood of reaching the existing
$65,000 annual limit and eliminate the
possibility of reaching the annual
maximum with a single capital raise or
3 See Nasdaq Listing Rule 5910(b), applicable to
Nasdaq Global and Global Select Market companies
and Nasdaq Listing Rule 5920(b), applicable to
Nasdaq Capital Market companies.
4 Id.
5 15 U.S.C. 80a–5.
6 26 U.S.C. 851—856.
E:\FR\FM\25JAN1.SGM
25JAN1
4402
Federal Register / Vol. 76, No. 16 / Tuesday, January 25, 2011 / Notices
in a single quarter. Nasdaq previously
had a fee schedule for listing additional
shares that, like the proposed amended
rule, included both an annual and
quarterly fee cap, but was applicable to
operating companies and Closed-End
Funds alike.7 As such, and for the
reasons discussed above, we believe it is
appropriate to adopt a quarterly
maximum on the listing of additional
shares fees payable by closed-end funds
in addition to the current annual
maximum.
While Nasdaq believes the proposed
quarterly cap is appropriate, Nasdaq
continues to believe that it is also
appropriate to charge Closed-End Funds
a listing of additional shares fee. In that
regard, Nasdaq notes that it must review
share issuances by Closed-End Funds
for compliance with the shareholder
approval rules. In addition, other
markets also charge fees for the listing
of additional Closed-End Fund shares,
separate from operating companies.8
mstockstill on DSKH9S0YB1PROD with NOTICES
2. Statutory Basis
Nasdaq believes that the proposed
rule change is consistent with the
provisions of Section 6 of the Act,9 in
general, and with Sections 6(b)(4) and
(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 Nasdaq operates or
controls, and it does not unfairly
discriminate between customers,
issuers, brokers or dealers. Nasdaq is
instituting a quarterly maximum on the
listing of additional shares fees
applicable to Closed-End Funds based
on their unique characteristics and their
need to issue shares as a primary means
by which they may expand their
businesses. As such, Nasdaq believes
that Closed-End Funds are differently
impacted than operating companies by
the current listing of additional shares
fees, and believes that the proposed
quarterly fee cap will serve to lessen the
adverse impact of the current fees. In
light of these considerations, Nasdaq
believes that the proposed rule change
will promote a more equitable allocation
of listing fees by reducing the impact of
listing of additional share fees on a class
of issuers that must issue shares as a
7 Securities Exchange Act Release No. 48631
(October 15, 2003), 68 FR 60426 (October 22, 2003)
(SR–NASD–2003–127) (eliminating the quarterly
fee cap for listing additional shares while retaining
the annual fee cap).
8 The New York Stock Exchange assesses a
Closed-End Fund listing of additional securities fee.
See NYSE Listed Company Manual Sections 902.03
and 902.04.
9 15 U.S.C. 78f.
10 15 U.S.C. 78f(b)(4) and (b)(5).
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Jkt 223001
primary means by which to expand
their business, and, accordingly,
consistent with Section 6(b)(5) of the
Act 11 will not unfairly discriminate
between issuers.
Nasdaq also believes that the
proposed rule change is consistent with
the provisions of Section 6(b)(5) of the
Act 12 because it is 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 facilitating transactions in securities,
and to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system. As noted above, Nasdaq is
implementing the quarterly fee cap
because it believes that Closed-End
Funds are differently impacted than
operating companies by the current
listing of additional shares fees. The
proposed quarterly fee cap will serve to
lessen the adverse impact of the current
fee, and, as noted above, does not
unfairly discriminate between issuers.
As such, Nasdaq believes that the
proposed rule change promotes just and
equitable principles of trade.
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.
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
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 13 and paragraph (f)(2) of Rule
19b–4 thereunder,14 because it
establishes a due, fee, or other charge
imposed by Nasdaq.
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. If the
11 15
U.S.C. 78f(b)(5).
12 Id.
13 15
14 17
PO 00000
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
Frm 00125
Fmt 4703
Sfmt 4703
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 e-mail to rulecomments@sec.gov. Please include File
Number SR–NASDAQ–2011–007 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington DC
20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2011–007. 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 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
a.m. and 3 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 No. SR–NASDAQ–
2011–007 and should be submitted on
or before February 15, 2011.
E:\FR\FM\25JAN1.SGM
25JAN1
Federal Register / Vol. 76, No. 16 / Tuesday, January 25, 2011 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–1436 Filed 1–24–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63729; File No. SR–FINRA–
2011–003]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Extending the Pilot
Period Regarding the Use of Multiple
MPIDs on FINRA Facilities
January 18, 2011.
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 January 5, 2011,
Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I and
II below, which Items have been
prepared by FINRA. FINRA has
designated the proposed rule change as
constituting a ‘‘non-controversial’’ rule
change under paragraph (f)(6) of Rule
19b–4 under the Act,3 which renders
the proposal effective upon receipt of
this filing by the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
mstockstill on DSKH9S0YB1PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
FINRA is proposing a rule change to
extend through January 27, 2012, the
current rules regarding the use of
multiple Market Participant Symbols
(‘‘MPIDs’’) in FINRA Rules 6160 (with
respect to Trade Reporting Facilities
(‘‘TRFs’’)), 6170 (with respect to the
Alternative Display Facility (‘‘ADF’’)),
and 6480 (with respect to the OTC
Reporting Facility (‘‘ORF’’)).
The text of the proposed rule change
is available on FINRA’s Web site at
https://www.finra.org, at the principal
office of FINRA and at the
Commission’s Public Reference Room.
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
1 15
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18:40 Jan 24, 2011
Jkt 223001
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FINRA 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. FINRA 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
FINRA has three rules governing the
use of multiple MPIDs on FINRA
facilities: Rule 6160 (Multiple MPIDs for
Trade Reporting Facility Participants),
Rule 6170 (Primary and Additional
MPIDs for Alternative Display Facility
Participants), and Rule 6480 (Multiple
MPIDs for Quoting and Trading in OTC
Equity Securities). The pilot period for
all three rules is scheduled to expire on
January 28, 2011. FINRA believes that
there continue to be legitimate business
reasons for members to maintain
multiple MPIDs for use on FINRA
facilities. Consequently, FINRA is
proposing to extend the pilot period for
each of the three rules until January 27,
2012. FINRA is not proposing any other
changes to the rules at this time;
however, FINRA notes that it intends to
file a proposed rule change within the
next year that amends the rules
governing multiple MPIDs, including a
proposed rule change to make the rules
permanent.
(1) Rule 6160
Rule 6160 provides that any Trade
Reporting Facility Participant that
wishes to use more than one MPID for
purposes of reporting trades to a TRF
must submit a written request to, and
obtain approval from, FINRA
Operations for such additional MPIDs.
In addition, Supplementary Material to
the rule states that FINRA considers the
issuance of, and trade reporting with,
multiple MPIDs to be a privilege and not
a right. A Trade Reporting Facility
Participant must identify the purpose(s)
and system(s) for which the multiple
MPIDs will be used. If FINRA
determines that the use of multiple
MPIDs is detrimental to the
marketplace, or that a Trade Reporting
Facility Participant is using one or more
additional MPIDs improperly or for
PO 00000
Frm 00126
Fmt 4703
Sfmt 4703
4403
other than the purpose(s) identified by
the Participant, FINRA staff retains full
discretion to limit or withdraw its grant
of the additional MPID(s) to such Trade
Reporting Facility Participant for
purposes of reporting trades to a TRF.
FINRA believes that Rule 6160 is
necessary to consolidate the process of
issuing, and tracking the use of,
multiple MPIDs used to report trades to
TRFs.
Rule 6160 was approved by the
Commission in 2006 on a pilot basis.4
The pilot period has been extended
several times since the rule was
originally adopted and currently expires
on January 28, 2011.5
(2) Rule 6170
Rule 6170 provides that a Registered
Reporting ADF ECN may request
additional MPIDs for displaying quotes
and orders and reporting trades through
the ADF trade reporting facility, TRACS,
for any ADF-Eligible Security. Among
other things, Registered Reporting ADF
ECNs are prohibited from using an
additional MPID to accomplish
indirectly what they are prohibited from
doing directly through their Primary
MPID. In addition, FINRA staff retains
full discretion to determine whether a
bona fide regulatory and/or business
need exists for being granted an
additional MPID privilege and to limit
or withdraw the additional MPID
display privilege at any time. The
procedures for requesting, and the
restrictions surrounding the use of,
multiple MPIDs are set forth in
Supplementary Material to the rule.
The Commission approved Rule 6170
on a pilot basis on August 11, 2006.6
The pilot period has been extended
several times since the rule was
4 See Securities Exchange Act Release No. 54715
(November 6, 2006), 71 FR 66354 (November 14,
2006); see also Securities Exchange Act Release No.
54715A (November 14, 2006), 71 FR 67183
(November 20, 2006).
5 See Securities Exchange Act Release No. 61297
(January 6, 2010), 75 FR 2173 (January 14, 2010);
Securities Exchange Act Release No. 59183
(December 30, 2008), 74 FR 842 (January 8, 2009);
Securities Exchange Act Release No. 57217 (January
28, 2008), 73 FR 6234 (February 1, 2008); Securities
Exchange Act Release No. 55206 (January 31, 2007),
72 FR 5479 (February 6, 2007).
6 See Securities Exchange Act Release No. 54307
(August 11, 2006), 71 FR 47551 (August 17, 2006).
By its terms, the initial pilot period expired on
January 26, 2007, to coincide with the expiration of
the ADF pilot period. See Securities Exchange Act
Release No. 53699 (April 21, 2006), 71 FR 25271
(April 28, 2006). On January 26, 2007, the
Commission approved a proposed rule change to
make the ADF rules permanent. See Securities
Exchange Act Release No. 55181 (January 26, 2007),
72 FR 5093 (February 2, 2007).
E:\FR\FM\25JAN1.SGM
25JAN1
]]>Agencies
[Federal Register Volume 76, Number 16 (Tuesday, January 25, 2011)]
[Notices]
[Pages 4401-4403]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-1436]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63732; File No. SR-NASDAQ-2011-007]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Impose a Quarterly Maximum on the Listing of Additional Shares Fees
Payable by Closed-End Funds
January 19, 2011.
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 January 6, 2011, 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, which Items have been
prepared by 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 impose a quarterly maximum on the listing of
additional shares fees payable by Closed-End Funds. Nasdaq will
implement the proposed rule change immediately.
The text of the proposed rule change is below. Proposed new
language is in italics.
5910. The NASDAQ Global Market
(a) No change.
(b) Additional Shares
(1)-(5) No change.
(6) The maximum fee charged to an issuer that is a Closed-End Fund
in any quarter is $25,000 per Company.
(c)-(f) No change.
5920. The Nasdaq Capital Market
(a) No change.
(b) Additional Shares
(1)-(5) No change.
(6) The maximum fee charged to an issuer that is a Closed-End Fund
in any quarter is $25,000 per Company.
(c)--(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, 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
Nasdaq currently assesses a fee for listing additional shares of an
already listed class in the amount of $5,000 or $0.01 per additional
share, whichever is higher, up to an annual maximum of $65,000 per
listed company.\3\ There is no fee assessed for issuances of less than
50,000 shares per quarter.\4\ This fee applies to both operating
companies and closed-end companies (``Closed-End Funds'').
---------------------------------------------------------------------------
\3\ See Nasdaq Listing Rule 5910(b), applicable to Nasdaq Global
and Global Select Market companies and Nasdaq Listing Rule 5920(b),
applicable to Nasdaq Capital Market companies.
\4\ Id.
---------------------------------------------------------------------------
A Closed-End Fund is a type of company regulated under the
Investment Company Act of 1940.\5\ Generally, a Closed-End Fund sells a
fixed number of shares and invests the proceeds in investments chosen
by its investment adviser to achieve the funds stated investment
objectives. Shareholders have an interest in the fund's investments,
but generally cannot redeem shares from the fund. Instead, the Closed-
End Fund's shares are listed and trade at a value which may be greater
or less than the fund's assets. Unlike operating companies, a Closed-
End Fund is not taxed on its income so long as it generates at least
90% of its income from permissible sources, including dividends on and
gains from the sale of stock or securities, and distributes that income
to its shareholders.\6\ As a consequence, a Closed-End Fund generally
distributes all of its income annually and does not have access to
retained earnings for new investment opportunities. A Closed-End Fund,
therefore, frequently needs to issue additional shares to raise new
capital in order to fund such opportunities. This is in contrast to
operating companies, which generally have access to retained earnings
to acquire new assets, and as a consequence are not limited to issuing
shares.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 80a-5.
\6\ 26 U.S.C. 851--856.
---------------------------------------------------------------------------
Given the unique nature of Closed-End Funds, Nasdaq believes it is
appropriate to provide them relief from the fee for listing additional
shares in the form of a $25,000 quarterly limit. The quarterly maximum
will reduce the likelihood of reaching the existing $65,000 annual
limit and eliminate the possibility of reaching the annual maximum with
a single capital raise or
[[Page 4402]]
in a single quarter. Nasdaq previously had a fee schedule for listing
additional shares that, like the proposed amended rule, included both
an annual and quarterly fee cap, but was applicable to operating
companies and Closed-End Funds alike.\7\ As such, and for the reasons
discussed above, we believe it is appropriate to adopt a quarterly
maximum on the listing of additional shares fees payable by closed-end
funds in addition to the current annual maximum.
---------------------------------------------------------------------------
\7\ Securities Exchange Act Release No. 48631 (October 15,
2003), 68 FR 60426 (October 22, 2003) (SR-NASD-2003-127)
(eliminating the quarterly fee cap for listing additional shares
while retaining the annual fee cap).
---------------------------------------------------------------------------
While Nasdaq believes the proposed quarterly cap is appropriate,
Nasdaq continues to believe that it is also appropriate to charge
Closed-End Funds a listing of additional shares fee. In that regard,
Nasdaq notes that it must review share issuances by Closed-End Funds
for compliance with the shareholder approval rules. In addition, other
markets also charge fees for the listing of additional Closed-End Fund
shares, separate from operating companies.\8\
---------------------------------------------------------------------------
\8\ The New York Stock Exchange assesses a Closed-End Fund
listing of additional securities fee. See NYSE Listed Company Manual
Sections 902.03 and 902.04.
---------------------------------------------------------------------------
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\9\ in general, and with
Sections 6(b)(4) and (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 Nasdaq operates or controls, and it does not
unfairly discriminate between customers, issuers, brokers or dealers.
Nasdaq is instituting a quarterly maximum on the listing of additional
shares fees applicable to Closed-End Funds based on their unique
characteristics and their need to issue shares as a primary means by
which they may expand their businesses. As such, Nasdaq believes that
Closed-End Funds are differently impacted than operating companies by
the current listing of additional shares fees, and believes that the
proposed quarterly fee cap will serve to lessen the adverse impact of
the current fees. In light of these considerations, Nasdaq believes
that the proposed rule change will promote a more equitable allocation
of listing fees by reducing the impact of listing of additional share
fees on a class of issuers that must issue shares as a primary means by
which to expand their business, and, accordingly, consistent with
Section 6(b)(5) of the Act \11\ will not unfairly discriminate between
issuers.
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\9\ 15 U.S.C. 78f.
\10\ 15 U.S.C. 78f(b)(4) and (b)(5).
\11\ 15 U.S.C. 78f(b)(5).
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Nasdaq also believes that the proposed rule change is consistent
with the provisions of Section 6(b)(5) of the Act \12\ because it is
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 facilitating transactions in
securities, and to remove impediments to and perfect the mechanism of a
free and open market and a national market system. As noted above,
Nasdaq is implementing the quarterly fee cap because it believes that
Closed-End Funds are differently impacted than operating companies by
the current listing of additional shares fees. The proposed quarterly
fee cap will serve to lessen the adverse impact of the current fee,
and, as noted above, does not unfairly discriminate between issuers. As
such, Nasdaq believes that the proposed rule change promotes just and
equitable principles of trade.
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\12\ Id.
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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.
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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \13\ and paragraph (f)(2) of Rule 19b-4
thereunder,\14\ because it establishes a due, fee, or other charge
imposed by Nasdaq.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
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 e-mail to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2011-007 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2011-007. 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 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 a.m. and 3 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 No. SR-NASDAQ-
2011-007 and should be submitted on or before February 15, 2011.
[[Page 4403]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-1436 Filed 1-24-11; 8:45 am]
BILLING CODE 8011-01-P
