Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the Listing Requirements for Other Securities Listed Under Rule 5730, 71464-71466 [2012-28943]
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71464
Federal Register / Vol. 77, No. 231 / Friday, November 30, 2012 / Notices
attributable to each class, except that the
net asset value and expenses of each
class will reflect distribution fees,
service fees, and any other incremental
expenses of that class. Expenses of a
Feeder Fund allocated to a particular
class of Shares will be borne on a pro
rata basis by each outstanding Share of
that class. Applicants state that the
Feeder Fund will comply with the
provisions of rule 18f–3 under the Act
as if it were an open-end investment
company.
9. In the event the Feeder Fund
imposes a CDSC, the applicants will
comply with the provisions of rule 6c–
10 under the Act, as if that rule applied
to closed-end management investment
companies. With respect to any waiver
of, scheduled variation in, or
elimination of the CDSC, the Feeder
Fund will comply with rule 22d–1
under the Act as if the Feeder Fund
were an open-end investment company.
Applicants’ Legal Analysis
wreier-aviles on DSK5TPTVN1PROD with NOTICES
Multiple Classes of Shares
1. Section 18(c) of the Act provides,
in relevant part, that a closed-end
investment company may not issue or
sell any senior security if, immediately
thereafter, the company has outstanding
more than one class of senior security.
Applicants state that the creation of
multiple classes of Shares of the Feeder
Fund may be prohibited by section
18(c).
2. Section 18(i) of the Act provides
that each share of stock issued by a
registered management investment
company will be a voting stock and
have equal voting rights with every
other outstanding voting stock.
Applicants state that permitting
multiple classes of Shares of the Feeder
Fund may violate section 18(i) of the
Act because each class would be
entitled to exclusive voting rights with
respect to matters solely related to that
class.
3. Section 6(c) of the Act provides that
the Commission may exempt any
person, security or transaction or any
class or classes of persons, securities or
transactions from any provision of the
Act, or from any rule under the Act, if
and to the extent such exemption is
necessary or appropriate in the public
interest and consistent with the
protection of investors and the purposes
fairly intended by the policy and
provisions of the Act. Applicants
request an exemption under section 6(c)
from sections 18(c) and 18(i) to permit
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the Feeder Fund to issue multiple
classes of Shares.8
4. Applicants submit that the
proposed allocation of expenses and
voting rights among multiple classes is
equitable and will not discriminate
against any group or class of
shareholders. Applicants submit that
the proposed arrangements would
permit the Feeder Fund to facilitate the
distribution of its Shares and provide
investors with a broader choice of
shareholder options. Applicants assert
that the proposed closed-end
investment company multiple class
structure does not raise the concerns
underlying section 18 of the Act to any
greater degree than open-end
investment companies’ multiple class
structures that are permitted by rule
18f–3 under the Act. Applicants state
that the Feeder Fund will comply with
the provisions of rule 18f–3 as if it were
an open-end investment company.
CDSCs
1. Applicants believe that the
requested relief meets the standards of
section 6(c) of the Act. Rule 6c–10
under the Act permits open-end
investment companies to impose
CDSCs, subject to certain conditions.
Applicants state that any CDSC imposed
by the Feeder Fund will comply with
rule 6c–10 under the Act as if the rule
were applicable to closed-end
investment companies. The Feeder
Fund also will disclose CDSCs in
accordance with the requirements of
Form N–1A concerning CDSCs as if the
Feeder Fund were an open-end
investment company. Applicants further
state that the Feeder Fund will apply
the CDSC (and any waivers or
scheduled variations of the CDSC)
uniformly to all shareholders in a given
class and consistently with the
requirements of rule 22d–1 under the
Act.
Asset-Based Service and/or Distribution
Fees
1. Section 17(d) of the Act and rule
17d–1 under the Act prohibit an
affiliated person of a registered
investment company or an affiliated
person of such person, acting as
principal, from participating in or
effecting any transaction in connection
with any joint enterprise or joint
arrangement in which the investment
company participates unless the
Commission issues an order permitting
the transaction. In reviewing
applications submitted under section
8 The Master Fund will not issue multiple classes
of its shares and is an applicant because of the
master-feeder structure.
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Sfmt 4703
17(d) and rule 17d–1, the Commission
considers whether the participation of
the investment company in a joint
enterprise or joint arrangement is
consistent with the provisions, policies
and purposes of the Act, and the extent
to which the participation is on a basis
different from or less advantageous than
that of other participants.
2. Rule 17d–3 under the Act provides
an exemption from section 17(d) and
rule 17d–1 to permit open-end
investment companies to enter into
distribution arrangements pursuant to
rule 12b–1 under the Act. Applicants
request an order under section 17(d) and
rule 17d–1 under the Act to permit the
Feeder Fund to impose asset-based
service and/or distribution fees.
Applicants have agreed to comply with
rules 12b–1 and 17d–3 as if those rules
applied to closed-end investment
companies.
Applicants’ Condition
The Feeder Fund agrees that any
order granting the requested relief will
be subject to the following condition:
Applicants will comply with the
provisions of rules 6c–10, 12b–1, 17d–
3, 18f–3 and 22d–1 under the Act, as
amended from time to time, or replaced
as if those rules applied to closed-end
management investment companies,
and will comply with the NASD
Conduct Rule 2830, as amended from
time to time, as if that rule applied to
all closed-end management investment
companies.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–28951 Filed 11–29–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68287; File No. SR–
NASDAQ–2012–131]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Modify the
Listing Requirements for Other
Securities Listed Under Rule 5730
November 26, 2012.
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
November 16, 2012, The NASDAQ
1 15
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 77, No. 231 / Friday, November 30, 2012 / Notices
Stock Market LLC (‘‘Nasdaq’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to modify the
listing requirements for Other Securities
listed under Rule 5730. The text of the
proposed rule change is below.
Proposed new language is in italics;
proposed deletions are in brackets.3
1. Purpose
5730. Listing Requirements for
Securities Not Otherwise Specified
[Above] (Other Securities)
wreier-aviles on DSK5TPTVN1PROD with NOTICES
(a) Initial Listing Requirements
(1) Nasdaq will consider listing on the
Global Market any security not
otherwise covered by the criteria in the
Rule 5400 or 5700 Series, provided the
instrument is otherwise suited to trade
through the facilities of Nasdaq. Such
securities will be evaluated for listing
against the following criteria:
(A) No change.
(B) For equity securities, there [There]
must be:
(i) a minimum of 400 holders of the
security[, provided, however, that if the
instrument is traded in $1,000
denominations, there must be a
minimum of 100 holders.]; and
(ii) a minimum public distribution of
1,000,000 trading units. However, if the
instrument is redeemable at the option
of the holders thereof on at least a
weekly basis, these requirements shall
not apply.
(C) [For equity securities listed
pursuant to this paragraph, there must
be a minimum public distribution of
1,000,000 trading units.
(D)] The aggregate market value/
principal amount of the security shall be
at least $4 million.
(2)–(3) No change.
(b) No Change.
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
3 Changes are marked to the rule text that appears
in the electronic manual of Nasdaq found at
https://nasdaqomx.cchwallstreet.com.
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Nasdaq Rule 5730 provides rules for
listing ‘‘Other Securities,’’ which are not
described elsewhere in Nasdaq’s listing
requirements.4 Generally, this rule
allows the listing of innovative
securities of substantially-sized
companies, which are not readily
categorized under the traditional listing
standards. It is not intended to
accommodate the listing of securities
that raise significant new regulatory
issues, which would require a separate
rule filing submitted pursuant to
Section 19(b) of the Act and Rule 19b–
4 thereunder.5
The issuer of a security listed under
Rule 5730 must have assets in excess of
$100 million, stockholders’ equity of at
least $10 million, and income of at least
$1 million; assets in excess of $200
million and stockholders’ equity of at
least $10 million; or assets in excess of
$100 million and stockholders’ equity of
at least $20 million.6 In addition, the
security generally must have a
minimum of 400 holders, an aggregate
market value/principal amount of at
least $4 million, and, in the case of
equity securities, there must be a
minimum public distribution of 1
million trading units.7 Prior to the
trading of a security under this rule,
Nasdaq evaluates the nature and
complexity of the issue and, if
appropriate, distributes a circular to the
membership providing guidance
regarding member firm compliance
responsibilities and requirements when
handling transactions in such
securities.8
4 Securities Exchange Act Release No. 32988
(September 29, 1993), 58 FR 52124 (October 6,
1993) (SR–NASD–93–15). This order approved the
predecessor to current Nasdaq Rule 5730 while
Nasdaq was a facility of the NASD, now FINRA.
5 15 U.S.C. 78s(b) and 17 CFR 240.19b–4.
6 Rule 5730(a)(1)(A).
7 Rule 5730(a)(1)(B), (C) and (D). A security traded
in one thousand dollar denominations must only
have 100 holders.
8 Rule 5730(a)(3).
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71465
This rule was based on a rule of the
New York Stock Exchange (‘‘NYSE’’)9
and is also similar to a rule of NYSE
MKT.10 Nasdaq now proposes changes
to Rule 5730 to more closely align that
rule with those other markets’ rules.
Specifically, the proposed rule change
would modify the holder requirement so
that it applies only to equity securities,
and thereby eliminate the holder
requirement for listing debt securities.
In this way, the revised rule will more
closely track the NYSE’s requirement,
which does not impose a holder
requirement on such listings.11 In
addition, Nasdaq proposes to adopt an
exception adopted by NYSE MKT to the
holder and public distribution
requirements for securities that are
redeemable at the option of their
holders on at least a weekly basis.12
Finally, Nasdaq also proposes to change
the title of the rule, to clarify its
applicability to only securities that do
not otherwise have specific listing
standards, wherever they may be in the
rulebook.
b. Statutory Basis
Nasdaq believes that the proposed
rule change is consistent with the
provisions of Section 6 of the Act,13 in
general, and with Section 6(b)(5) of the
Act,14 in particular, in that the proposal
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
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. Specifically, Nasdaq
notes that the proposed changes will
conform Rule 5730 with the rules of
other national securities exchanges,
while continuing to limit the
availability of the rule to more
financially substantial companies,
which can satisfy the assets, equity,
income, and other requirements of Rule
5730(a). In addition, Nasdaq is unaware
9 See Section 703.19 of the NYSE Listed Company
Manual.
10 See Section 107 of the NYSE MKT Company
Guide.
11 The proposed rule change would also remove
the 100 holder requirement for securities that trade
in $1,000 denominations because such securities
are debt securities, which would no longer be
subject to the holder requirement.
12 Securities Exchange Act Release No. 55733
(May 10, 2007), 72 FR 27602 (May 16, 2007) (SR–
Amex–2007–34).
13 15 U.S.C. 78f.
14 15 U.S.C. 78f(b)(5).
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Federal Register / Vol. 77, No. 231 / Friday, November 30, 2012 / Notices
of any problems related to the trading of
instruments that have qualified under
the other markets’ lower holder and
distribution requirements.
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.
Instead, the proposed rule change will
allow Nasdaq to list securities that can
already be listed on other exchanges,
thereby increasing competition with
other national securities exchanges.
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.
IV. Solicitation of Comments
wreier-aviles on DSK5TPTVN1PROD with 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 15 and Rule 19b–
4(f)(6) thereunder.16
The Exchange has requested the
Commission to waive the 30-day
operative delay period to allow the
proposed rule change to become
operative upon filing.17 The
Commission believes it is consistent
with the public interest to waive the 30day operative delay. The proposed rule
change is substantially similar in all
material respects to Section 703.19 of
the NYSE Listed Company Manual and
Section 107A(b) of the NYSE MKT
Listed Company Guide, and each policy
issue raised by the proposed rule change
(i) has been considered by the
Commission in approving the other
exchanges’ rules and (ii) is resolved in
a manner generally consistent with the
approved rules. As such, the
15 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
17 As required under Rule 19b–4(f)(6)(iii), the
Exchange provided the Commission with written
notice of its intent to file the proposed rule change
along with a brief description and the 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.
16 17
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15:17 Nov 29, 2012
Jkt 229001
Commission believes that the proposal
presents no novel regulatory issues.
Waiver of the operative delay will allow
the Exchange to list certain securities
that can already be listed and traded on
other exchanges without undue delay.
Therefore, the Commission grants such
waiver and designates the proposal
operative upon filing.18
At any time within 60 days of the
filing of such 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.
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
No. SR–NASDAQ–2012–131 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 No.
SR–NASDAQ–2012–131. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
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
18 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
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Frm 00071
Fmt 4703
Sfmt 4703
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
office of 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
available publicly. All submissions
should refer to File No. SR–NASDAQ–
2012–131 and should be submitted on
or before December 21, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–28943 Filed 11–29–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68288 File No. SR–OCC–
2012–22]
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing of Proposed Rule Change To
Clarify the Use of Certain Amounts
Credited to the Liquidating Settlement
Account To Settle Mark-to-Market
Payments Arising From Stock Loan
and Borrow Positions Carried in the
Customers’ Account
November 26, 2012.
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 November
13, 2012, The Options Clearing
Corporation (‘‘OCC’’) 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
primarily by OCC. 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
OCC proposes to make certain
changes to Rule 1104 in order to
eliminate potential ambiguity as to
OCC’s right, in connection with the
suspension of a clearing member, to use
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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]]>Agencies
[Federal Register Volume 77, Number 231 (Friday, November 30, 2012)]
[Notices]
[Pages 71464-71466]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-28943]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68287; File No. SR-NASDAQ-2012-131]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify the Listing Requirements for Other Securities Listed Under Rule
5730
November 26, 2012.
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 November 16, 2012, The NASDAQ
[[Page 71465]]
Stock Market LLC (``Nasdaq'' or ``Exchange'') filed with the Securities
and Exchange Commission (``Commission'') the proposed rule change as
described in Items I and II below, which Items have been prepared by
the Exchange. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\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
The Exchange proposes to modify the listing requirements for Other
Securities listed under Rule 5730. The text of the proposed rule change
is below. Proposed new language is in italics; proposed deletions are
in brackets.\3\
---------------------------------------------------------------------------
\3\ Changes are marked to the rule text that appears in the
electronic manual of Nasdaq found at https://nasdaqomx.cchwallstreet.com.
---------------------------------------------------------------------------
5730. Listing Requirements for Securities Not Otherwise Specified
[Above] (Other Securities)
(a) Initial Listing Requirements
(1) Nasdaq will consider listing on the Global Market any security
not otherwise covered by the criteria in the Rule 5400 or 5700 Series,
provided the instrument is otherwise suited to trade through the
facilities of Nasdaq. Such securities will be evaluated for listing
against the following criteria:
(A) No change.
(B) For equity securities, there [There] must be:
(i) a minimum of 400 holders of the security[, provided, however,
that if the instrument is traded in $1,000 denominations, there must be
a minimum of 100 holders.]; and
(ii) a minimum public distribution of 1,000,000 trading units.
However, if the instrument is redeemable at the option of the holders
thereof on at least a weekly basis, these requirements shall not apply.
(C) [For equity securities listed pursuant to this paragraph, there
must be a minimum public distribution of 1,000,000 trading units.
(D)] The aggregate market value/principal amount of the security
shall be at least $4 million.
(2)-(3) No change.
(b) No Change.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Nasdaq Rule 5730 provides rules for listing ``Other Securities,''
which are not described elsewhere in Nasdaq's listing requirements.\4\
Generally, this rule allows the listing of innovative securities of
substantially-sized companies, which are not readily categorized under
the traditional listing standards. It is not intended to accommodate
the listing of securities that raise significant new regulatory issues,
which would require a separate rule filing submitted pursuant to
Section 19(b) of the Act and Rule 19b-4 thereunder.\5\
---------------------------------------------------------------------------
\4\ Securities Exchange Act Release No. 32988 (September 29,
1993), 58 FR 52124 (October 6, 1993) (SR-NASD-93-15). This order
approved the predecessor to current Nasdaq Rule 5730 while Nasdaq
was a facility of the NASD, now FINRA.
\5\ 15 U.S.C. 78s(b) and 17 CFR 240.19b-4.
---------------------------------------------------------------------------
The issuer of a security listed under Rule 5730 must have assets in
excess of $100 million, stockholders' equity of at least $10 million,
and income of at least $1 million; assets in excess of $200 million and
stockholders' equity of at least $10 million; or assets in excess of
$100 million and stockholders' equity of at least $20 million.\6\ In
addition, the security generally must have a minimum of 400 holders, an
aggregate market value/principal amount of at least $4 million, and, in
the case of equity securities, there must be a minimum public
distribution of 1 million trading units.\7\ Prior to the trading of a
security under this rule, Nasdaq evaluates the nature and complexity of
the issue and, if appropriate, distributes a circular to the membership
providing guidance regarding member firm compliance responsibilities
and requirements when handling transactions in such securities.\8\
---------------------------------------------------------------------------
\6\ Rule 5730(a)(1)(A).
\7\ Rule 5730(a)(1)(B), (C) and (D). A security traded in one
thousand dollar denominations must only have 100 holders.
\8\ Rule 5730(a)(3).
---------------------------------------------------------------------------
This rule was based on a rule of the New York Stock Exchange
(``NYSE'')\9\ and is also similar to a rule of NYSE MKT.\10\ Nasdaq now
proposes changes to Rule 5730 to more closely align that rule with
those other markets' rules.
---------------------------------------------------------------------------
\9\ See Section 703.19 of the NYSE Listed Company Manual.
\10\ See Section 107 of the NYSE MKT Company Guide.
---------------------------------------------------------------------------
Specifically, the proposed rule change would modify the holder
requirement so that it applies only to equity securities, and thereby
eliminate the holder requirement for listing debt securities. In this
way, the revised rule will more closely track the NYSE's requirement,
which does not impose a holder requirement on such listings.\11\ In
addition, Nasdaq proposes to adopt an exception adopted by NYSE MKT to
the holder and public distribution requirements for securities that are
redeemable at the option of their holders on at least a weekly
basis.\12\ Finally, Nasdaq also proposes to change the title of the
rule, to clarify its applicability to only securities that do not
otherwise have specific listing standards, wherever they may be in the
rulebook.
---------------------------------------------------------------------------
\11\ The proposed rule change would also remove the 100 holder
requirement for securities that trade in $1,000 denominations
because such securities are debt securities, which would no longer
be subject to the holder requirement.
\12\ Securities Exchange Act Release No. 55733 (May 10, 2007),
72 FR 27602 (May 16, 2007) (SR-Amex-2007-34).
---------------------------------------------------------------------------
b. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\13\ in general, and with
Section 6(b)(5) of the Act,\14\ in particular, in that the proposal 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 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. Specifically,
Nasdaq notes that the proposed changes will conform Rule 5730 with the
rules of other national securities exchanges, while continuing to limit
the availability of the rule to more financially substantial companies,
which can satisfy the assets, equity, income, and other requirements of
Rule 5730(a). In addition, Nasdaq is unaware
[[Page 71466]]
of any problems related to the trading of instruments that have
qualified under the other markets' lower holder and distribution
requirements.
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\13\ 15 U.S.C. 78f.
\14\ 15 U.S.C. 78f(b)(5).
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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. Instead, the
proposed rule change will allow Nasdaq to list securities that can
already be listed on other exchanges, thereby increasing competition
with other national securities exchanges.
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
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 \15\ and Rule 19b-
4(f)(6) thereunder.\16\
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f)(6).
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The Exchange has requested the Commission to waive the 30-day
operative delay period to allow the proposed rule change to become
operative upon filing.\17\ The Commission believes it is consistent
with the public interest to waive the 30-day operative delay. The
proposed rule change is substantially similar in all material respects
to Section 703.19 of the NYSE Listed Company Manual and Section 107A(b)
of the NYSE MKT Listed Company Guide, and each policy issue raised by
the proposed rule change (i) has been considered by the Commission in
approving the other exchanges' rules and (ii) is resolved in a manner
generally consistent with the approved rules. As such, the Commission
believes that the proposal presents no novel regulatory issues. Waiver
of the operative delay will allow the Exchange to list certain
securities that can already be listed and traded on other exchanges
without undue delay. Therefore, the Commission grants such waiver and
designates the proposal operative upon filing.\18\
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\17\ As required under Rule 19b-4(f)(6)(iii), the Exchange
provided the Commission with written notice of its intent to file
the proposed rule change along with a brief description and the 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.
\18\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of such 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 email to rule-comments@sec.gov. Please include
File No. SR-NASDAQ-2012-131 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 No. SR-NASDAQ-2012-131. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Web site (https://www.sec.gov/rules/sro.shtml). Copies
of the submission, all subsequent amendments, all written statements
with respect to the proposed rule change that are filed with the
Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of such filing also will be available for inspection
and copying at the principal office of 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 available publicly. All submissions
should refer to File No. SR-NASDAQ-2012-131 and should be submitted on
or before December 21, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-28943 Filed 11-29-12; 8:45 am]
BILLING CODE 8011-01-P
