Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NASDAQ Listing Standards Related to Compliance Determinations for Market Value of Listed Securities and Market Value of Publicly-Held Shares Deficiencies, 61408-61411 [2013-24156]

Download as PDF 61408 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices by searching for the file number, or for an applicant using the Company name box, at https://www.sec.gov/search/ search.htm or by calling (202) 551– 8090. An order granting each application will be issued unless the SEC orders a hearing. Interested persons may request a hearing on any application by writing to the SEC’s Secretary at the address below and serving the relevant applicant with a copy of the request, personally or by mail. Hearing requests should be received by the SEC by 5:30 p.m. on October 22, 2013, and should be accompanied by proof of service on the applicant, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer’s interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. For Further Information Contact: Diane L. Titus at (202) 551–6810, SEC, Division of Investment Management, Exemptive Applications Office, 100 F Street NE., Washington, DC 20549– 8010. Claymore China Strategy Fund [File No. 811–22124] Summary: Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. Applicant has never made a public offering of its securities and does not propose to engage in any business activity other than those necessary for winding up it affairs. Filing Date: The application was filed on September 17, 2013. Applicant’s Address: 2455 Corporate West Drive, Lisle, IL 60532. tkelley on DSK3SPTVN1PROD with NOTICES [File No. 811–6727] Summary: Applicant seeks an order declaring that it has ceased to be an investment company. On June 27, 2013, applicant made a liquidating distribution to its shareholders, based on net asset value. Expenses of $2,970 incurred in connection with the liquidation were paid by applicant and its investment adviser. Filing Date: The application was filed on September 11, 2013. Applicant’s Address: c/o Fairfax Global Markets, LLC, 2 West Washington St., Middleburg, VA 20118. 18:29 Oct 02, 2013 [File No. 811–22354] Summary: Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. Applicant transferred its assets to Grosvenor Registered Multi-Strategy Fund (TI2), LLC, and on January 1, 2013, made a distribution to its shareholders based on net asset value. Applicant has retained $24,109 in outstanding assets to pay off its outstanding liabilities. Expenses of $152,274 incurred in connection with the reorganization were paid by Grosvenor Registered Multi-Strategy Master Fund, LLC, applicant’s master fund. Filing Date: The application was filed on September 13, 2013. Applicant’s Address: 900 North Michigan Ave., Suite 1100, Chicago, IL 60611. RiverSource Dimensions Series Inc. [File No. 811–1629] Summary: Applicant seeks an order declaring that it has ceased to be an investment company. Applicant has transferred its assets to corresponding series of Columbia Funds Series Trust and Columbia Funds Series Trust I, and, on May 31, 2011, made a distribution to its shareholders based on net asset value. Expenses of $82,382 incurred in connection with the reorganization were paid by applicant and applicant’s investment adviser, Columbia Management Investment Advisers, LLC. Filing Dates: The application was filed on March 8, 2013, and amended on July 17, 2013, and September 11, 2013. Applicant’s Address: 901 Marquette Ave. South, Suite 2810, Minneapolis, MN 55402–3268. Seligman Growth Fund, Inc. Filing Date: The applications were filed on September 10, 2013. Applicants’ Address: 901 Marquette Avenue South, Suite 2810, Minneapolis, MN 55402–3268. International Equity Portfolio/MA [File No. 811–21867] Summary: Applicant seeks an order declaring that it has ceased to be an investment company. On April 21, 2011, applicant made a liquidating distribution to its shareholders, based on net asset value. Applicant incurred no expenses in connection with the liquidation. Filing Dates: The application was filed on November 30, 2012, and amended on September 20, 2013. Applicant’s Address: Two International Place, Boston, MA 02110. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–24222 Filed 10–2–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70535; File No. SR–NASDAQ–2013–128] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NASDAQ Listing Standards Related to Compliance Determinations for Market Value of Listed Securities and Market Value of Publicly-Held Shares Deficiencies Jkt 232001 [File No. 811–229] September 27, 2013. Seligman LaSalle Real Estate Fund Series, Inc. Dominion Funds, Inc. VerDate Mar<15>2010 Grosvenor Registered Multi-Strategy Fund (TE), LLC 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 September 26, 2013, The NASDAQ Stock Market LLC (‘‘NASDAQ’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III, 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. [File No. 811–21365] Summary: Each applicant seeks an order declaring that it has ceased to be an investment company. Applicants transferred their assets to corresponding series of Columbia Fund Series Trust I, and on or prior to April 5, 2011, made final distributions to their shareholders based on net asset value. Expenses of $729,844 and $77,689, respectively, incurred in connection with the reorganization were paid by applicants and Columbia Management Investment Advisers, LLC, applicants’ investment adviser. PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 1 15 2 17 E:\FR\FM\03OCN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 03OCN1 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the NASDAQ listing standards related to compliance determinations for Market Value of Listed Securities and Market Value of Publicly-Held Shares deficiencies. The text of the proposed rule change is below. Proposed new language is italicized; proposed deletions are in brackets. * * * * * 5810. Notification of Deficiency by the Listing Qualifications Department When the Listing Qualifications Department determines that a Company does not meet a listing standard set forth in the Rule 5000 Series, it will immediately notify the Company of the deficiency. As explained in more detail below, deficiency notifications are of four types: (1) Staff Delisting Determinations, which are notifications of deficiencies that, unless appealed, subject the Company to immediate suspension and delisting; (2) notifications of deficiencies for which a Company may submit a plan of compliance for staff review; (3) notifications of deficiencies for which a Company is entitled to an automatic cure or compliance period; and (4) Public Reprimand Letters. Notifications of deficiencies that allow for submission of a compliance plan or an automatic cure or compliance period may result, after review of the compliance plan or expiration of the cure or compliance period, in issuance of a Staff Delisting Determination or a Public Reprimand Letter. (a)–(b) No change. tkelley on DSK3SPTVN1PROD with NOTICES (c) Types of Deficiencies and Notifications The type of deficiency at issue determines whether the Company will be immediately suspended and delisted, or whether it may submit a compliance plan for review or is entitled to an automatic cure or compliance period before a Staff Delisting Determination is issued. In the case of a deficiency not specified below, Staff will issue the Company a Staff Delisting Determination or a Public Reprimand Letter. (1)–(2) No change. (3) Deficiencies for which the Rules Provide a Specified Cure or Compliance Period With respect to deficiencies related to the standards listed in (A)–(E) below, VerDate Mar<15>2010 18:29 Oct 02, 2013 Jkt 232001 Staff’s notification will inform the Company of the applicable cure or compliance period provided by these Rules and discussed below. If the Company does not regain compliance within the specified cure or compliance period, the Listing Qualifications Department will immediately issue a Staff Delisting Determination letter. (A)–(B) No change. (C) Market Value of Listed Securities A failure to meet the continued listing requirements for Market Value of Listed Securities shall be determined to exist only if the deficiency continues for a period of 30 consecutive business days. Upon such failure, the Company shall be notified promptly and shall have a period of 180 calendar days from such notification to achieve compliance. Compliance can be achieved by meeting the applicable standard for a minimum of 10 consecutive business days during the 180 day compliance period, unless Staff exercises its discretion to extend this 10 day period as discussed in Rule 5810(c)(3)(F). (D) Market Value of Publicly Held Shares A failure to meet the continued listing requirement for Market Value of Publicly Held Shares shall be determined to exist only if the deficiency continues for a period of 30 consecutive business days. Upon such failure, the Company shall be notified promptly and shall have a period of 180 calendar days from such notification to achieve compliance. Compliance can be achieved by meeting the applicable standard for a minimum of 10 consecutive business days during the 180 day compliance period, unless Staff exercises its discretion to extend this 10 day period as discussed in Rule 5810(c)(3)(F). (E) No change. (F) Staff Discretion Relating to the [Bid] Price-based Requirements If a Company fails to meet the Market Value of Listed Securities, Market Value of Publicly Held Shares, or Bid Price requirements, each of which is related to the Company’s security price and collectively called the ‘‘Price-based Requirements,’’ compliance is generally achieved by meeting the requirement for a minimum of ten consecutive business days. However, Staff may, in its discretion, require a Company to [maintain a bid price of at least $1.00 per share] satisfy the applicable Pricebased Requirement for a period in excess of ten consecutive business days, but generally no more than 20 consecutive business days, before PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 61409 determining that the Company has demonstrated an ability to maintain long-term compliance. In determining whether to require a Company to meet the [minimum $1.00 bid price standard] applicable Price-based-requirement beyond ten business days, Staff [will] may consider all relevant facts and circumstances, including without limitation[the following four factors]: (i) the margin of compliance (the amount by which a Company exceeds the [bid price is above the $1.00 minimum standard] applicable Pricebased Requirement); (ii) the trading volume (a lack of trading volume may indicate a lack of bona fide market interest in the security at the posted bid price); (iii) the Market Maker montage (the number of Market Makers quoting at or above $1.00 or the minimum price necessary to satisfy another Price-based Requirement; and the size of their quotes); and (iv) the trend of the stock price (is it up or down). * * * * * 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 The purpose of this proposed rule change is to increase transparency of the fact that NASDAQ Staff (‘‘Staff’’) may consider periods longer than ten days when evaluating whether a company has regained compliance with the minimum Market Value of Listed Securities (‘‘MVLS’’) and Market Value of Publicly-Held Shares (‘‘MVPHS’’) requirements, while also generally limiting such review to twenty days. Currently, NASDAQ Rules provide that compliance with the MVLS and MVPHS requirements ‘‘can be achieved by meeting the applicable standard for a minimum of 10 consecutive business days.’’ (emphasis added). As such, E:\FR\FM\03OCN1.SGM 03OCN1 61410 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices while a company cannot regain compliance in a period less than ten days, the rule does not require Staff to limit its review for compliance with the MVLS and MVPHS requirements to exactly ten days. Further, Staff’s broad discretionary authority under Rule 5101 supports Staff’s consideration of a longer period when necessary.3 By contrast, Rule 5810(c)(3)(F) explicitly describes Staff’s discretion to extend the compliance period for a bid price deficiency beyond ten days (but generally not more than 20 days) and identifies factors for Staff to consider in making a decision to do so.4 In the ten years since adopting these factors,5 Staff has found them useful in determining whether to extend the bid price compliance period beyond ten days and thus typically uses these same factors, and, generally, the 20 day limit, when evaluating compliance with the MVLS and MVPHS requirements. The proposed change to Rule 5810(c)(3)(F) would describe this practice and thereby provide transparency to the manner in which Staff applies its existing discretion. 2. Statutory Basis tkelley on DSK3SPTVN1PROD with NOTICES The Exchange believes that its proposal is consistent with Section 6(b) of the Act 6 in general, and furthers the objectives of Section 6(b)(5) of the Act 7 in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest. The proposed rule change will add greater transparency to the rule administration process by permitting issuers to better understand how NASDAQ evaluates compliance with the MVLS and MVPHS listing rules. At the same time, it describes NASDAQ Staff discretion to apply a higher standard in determining which companies are suitable for 3 Rule 5101 provides NASDAQ with broad discretionary authority over the initial and continued listing of securities, and allows the application of additional or more stringent criteria for the continued listing of particular securities based on any event, condition, or circumstance that exists or occurs, even though the securities meet all enumerated criteria for initial or continued listing on NASDAQ. 4 These factors are: (i) The margin of compliance; (ii) the trading volume; (iii) the market maker montage; and (iv) the trend of the stock price. 5 Current Rule 5810(c)(3)(F) was originally adopted in 2003 as Rule 4310(c)(8)(E). Exchange Act Release No. 47181 (January 14, 2003), 68 FR 3074 (January 22, 2003). 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). VerDate Mar<15>2010 18:29 Oct 02, 2013 Jkt 232001 continued listing on the exchange, thus protecting investors. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. In this regard, NASDAQ notes that the competition among exchanges for listings is robust and vigorous, and the proposed rule change is not intended, nor is it expected, to reduce or diminish such competition. The rule brings added transparency to NASDAQ’s vigilant enforcement of the Listing Rules, which already allow NASDAQ Staff to use discretion to apply more stringent listing standards. However, it does not allow the Staff any discretion to apply diminished listing standards in order to attract or retain listing business. The proposed rule change offers NASDAQ no advantages over its competitors beyond those created by enhancing the Exchange’s regulatory effectiveness. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or 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, it has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act 8 and subparagraph (f)(6) of Rule 19b–4 thereunder.9 The proposed rule change will add greater transparency by clarifying how NASDAQ applies its existing authority to evaluate compliance with the MVLS and MVPHS listing rules for periods longer than ten consecutive business days. As such, given that the proposed change merely describes, and does not modify, NASDAQ’s authority to determine compliance with the MVLS and MVPHS 8 15 U.S.C. 78s(b)(3)(a)(ii). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file 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 Exchange has satisfied this requirement. 9 17 PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 requirements, it does not significantly affect the protection of investors or the public interest and does not impose any significant burden on competition. 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: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) 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 email to rule-comments@ sec.gov. Please include File Number SR– NASDAQ–2013–128 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–2013–128. 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 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 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for E:\FR\FM\03OCN1.SGM 03OCN1 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices 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– NASDAQ–2013–128 and should be submitted on or before October 24, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–24156 Filed 10–2–13; 8:45 am] SECURITIES AND EXCHANGE COMMISSION 1. Purpose [Release No. 34–70570; File No. SR– NYSEArca–2013–97] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Reflecting Changes to the Means of Achieving the Investment Objective Applicable to Shares of the PowerShares China A-Share Portfolio September 30, 2013. tkelley on DSK3SPTVN1PROD with NOTICES Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on September 19, 2013, NYSE Arca, Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 self-regulatory organization. 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 The Exchange proposes to reflect changes to the means of achieving the investment objective applicable to shares of the PowerShares China AShare Portfolio (the ‘‘Fund’’). The text of the proposed rule change is available on the Exchange’s Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 VerDate Mar<15>2010 18:29 Oct 02, 2013 Jkt 232001 In its filing with the Commission, the self-regulatory organization 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 those 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 parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change BILLING CODE 8011–01–P 10 17 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The Commission has approved listing and trading on the Exchange of shares (‘‘Shares’’) of the PowerShares China AShare Portfolio, a series of PowerShares Actively Managed Exchange-Traded Trust (the ‘‘Trust’’),4 under NYSE Arca Equities Rule 8.600, which governs the listing and trading of Managed Fund Shares. Shares of the Fund have not commenced listing and trading on the Exchange. The Shares are offered by the Trust, a statutory trust organized under the laws of the State of Delaware and registered with the Commission as an open-end management investment company.5 The investment advisor to the Fund will be Invesco PowerShares Capital Management LLC (the ‘‘Adviser’’). In this proposed rule change, the Exchange proposes to reflect changes to the description of the measures the Adviser will utilize to implement the 4 See Securities Exchange Act Release No. 69915 (July 2, 2013), 78 FR 41145 (July 9, 2013) (SR– NYSEArca–2013–56) (‘‘Prior Order’’). See also Securities Exchange Act Release No. 69634 (May 23, 2013), 78 FR 32487 (May 30, 2013) (SR– NYSEArca–2013–56) (‘‘Prior Notice,’’ and together with the Prior Order, the ‘‘Prior Release’’). 5 The Trust is registered under the Investment Company Act of 1940 (15 U.S.C. 80a–1) (‘‘1940 Act’’). On August 30, 2013, the Trust filed with the Commission a post-effective amendment to its registration statement on Form N–1A under the Securities Act of 1933 (15 U.S.C. 77a) (‘‘Securities Act’’), and under the 1940 Act relating to the Fund (File Nos. 333–147622 and 811–22148) (‘‘Registration Statement’’). The description of the operation of the Trust and the Fund herein is based, in part, on the Registration Statement. In addition, the Commission has issued an order granting certain exemptive relief to the Trust under the 1940 Act. See Investment Company Act Release No. 28171 (February 27, 2008) (File No. 812–13386) (‘‘Exemptive Order’’). PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 61411 Fund’s investment objective, as described below.6 First, the Prior Release stated that, under normal circumstances,7 the Fund generally will invest at least 80% of its net assets in a combination of investments whose collective performance is designed to correspond to the performance of the FTSE China A50 Index (the ‘‘Benchmark’’). The Adviser now represents that, rather than being designed to correspond to the performance of the Benchmark, the Fund will seek to achieve its investment objective by providing exposure to the China ‘‘A-Shares’’ market using a quantitative, rules-based investment strategy. The Fund will be actively managed by the Adviser and will not be obligated to invest in the instruments included in the Benchmark or to track the performance of the Benchmark or of any index. However, although the Fund will seek to exceed the performance of the Benchmark, there can be no assurance that the Fund will do so at any time. Second, the Prior Release stated that the Trust has filed a notice of eligibility for exclusion from the definition of the term ‘‘commodity pool operator’’ (‘‘CPO’’) in accordance with Rule 4.5 of the Commodity Exchange Act (‘‘CEA’’).8 As stated in the Prior Release, under amendments to Rule 4.5 adopted in February 2012, an investment adviser of a registered investment company may claim exclusion from registration as a CPO only if the registered investment company it advises uses futures contracts solely for ‘‘bona fide hedging purposes’’ or limits its use of futures contracts for non-bona fide hedging purposes in specified ways. The Prior Release stated that, because the Fund did not expect to use futures contracts solely for ‘‘bona fide hedging purposes,’’ the Fund would be subject to rules that would require it to limit its use of positions in futures contracts in accordance with the requirements of amended Rule 4.5 unless the Adviser otherwise complies with CPO 6 The changes described herein will be effective contingent upon effectiveness of the Trust’s most recent post-effective amendment to its Registration Statement. See note 5, supra. The Adviser represents that the Adviser will not implement the changes described herein until the instant proposed rule change is operative. 7 The term ‘‘under normal circumstances’’ includes, but is not limited to, the absence of: Extreme volatility or trading halts in the equity markets or the financial markets generally; operational issues causing dissemination of inaccurate market information; or force majeure type events such as systems failure, natural or manmade disaster, act of God, armed conflict, act of terrorism, riot or labor disruption or any similar intervening circumstance. 8 7 U.S.C. 1. E:\FR\FM\03OCN1.SGM 03OCN1

Agencies

[Federal Register Volume 78, Number 192 (Thursday, October 3, 2013)]
[Notices]
[Pages 61408-61411]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24156]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70535; File No. SR-NASDAQ-2013-128]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend the NASDAQ Listing Standards Related to Compliance Determinations 
for Market Value of Listed Securities and Market Value of Publicly-Held 
Shares Deficiencies

September 27, 2013.
    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 September 26, 2013, The NASDAQ Stock Market LLC (``NASDAQ'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I, II, and III, 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.

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

[[Page 61409]]

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

    The Exchange proposes to amend the NASDAQ listing standards related 
to compliance determinations for Market Value of Listed Securities and 
Market Value of Publicly-Held Shares deficiencies. The text of the 
proposed rule change is below. Proposed new language is italicized; 
proposed deletions are in brackets.
* * * * *

5810. Notification of Deficiency by the Listing Qualifications 
Department

    When the Listing Qualifications Department determines that a 
Company does not meet a listing standard set forth in the Rule 5000 
Series, it will immediately notify the Company of the deficiency. As 
explained in more detail below, deficiency notifications are of four 
types:
    (1) Staff Delisting Determinations, which are notifications of 
deficiencies that, unless appealed, subject the Company to immediate 
suspension and delisting;
    (2) notifications of deficiencies for which a Company may submit a 
plan of compliance for staff review;
    (3) notifications of deficiencies for which a Company is entitled 
to an automatic cure or compliance period; and
    (4) Public Reprimand Letters.
    Notifications of deficiencies that allow for submission of a 
compliance plan or an automatic cure or compliance period may result, 
after review of the compliance plan or expiration of the cure or 
compliance period, in issuance of a Staff Delisting Determination or a 
Public Reprimand Letter.
    (a)-(b) No change.

(c) Types of Deficiencies and Notifications

    The type of deficiency at issue determines whether the Company will 
be immediately suspended and delisted, or whether it may submit a 
compliance plan for review or is entitled to an automatic cure or 
compliance period before a Staff Delisting Determination is issued. In 
the case of a deficiency not specified below, Staff will issue the 
Company a Staff Delisting Determination or a Public Reprimand Letter.
(1)-(2) No change.

(3) Deficiencies for which the Rules Provide a Specified Cure or 
Compliance Period

    With respect to deficiencies related to the standards listed in 
(A)-(E) below, Staff's notification will inform the Company of the 
applicable cure or compliance period provided by these Rules and 
discussed below. If the Company does not regain compliance within the 
specified cure or compliance period, the Listing Qualifications 
Department will immediately issue a Staff Delisting Determination 
letter.
    (A)-(B) No change.

(C) Market Value of Listed Securities

    A failure to meet the continued listing requirements for Market 
Value of Listed Securities shall be determined to exist only if the 
deficiency continues for a period of 30 consecutive business days. Upon 
such failure, the Company shall be notified promptly and shall have a 
period of 180 calendar days from such notification to achieve 
compliance. Compliance can be achieved by meeting the applicable 
standard for a minimum of 10 consecutive business days during the 180 
day compliance period, unless Staff exercises its discretion to extend 
this 10 day period as discussed in Rule 5810(c)(3)(F).

(D) Market Value of Publicly Held Shares

    A failure to meet the continued listing requirement for Market 
Value of Publicly Held Shares shall be determined to exist only if the 
deficiency continues for a period of 30 consecutive business days. Upon 
such failure, the Company shall be notified promptly and shall have a 
period of 180 calendar days from such notification to achieve 
compliance. Compliance can be achieved by meeting the applicable 
standard for a minimum of 10 consecutive business days during the 180 
day compliance period, unless Staff exercises its discretion to extend 
this 10 day period as discussed in Rule 5810(c)(3)(F).
    (E) No change.

(F) Staff Discretion Relating to the [Bid] Price-based Requirements

    If a Company fails to meet the Market Value of Listed Securities, 
Market Value of Publicly Held Shares, or Bid Price requirements, each 
of which is related to the Company's security price and collectively 
called the ``Price-based Requirements,'' compliance is generally 
achieved by meeting the requirement for a minimum of ten consecutive 
business days. However, Staff may, in its discretion, require a Company 
to [maintain a bid price of at least $1.00 per share] satisfy the 
applicable Price-based Requirement for a period in excess of ten 
consecutive business days, but generally no more than 20 consecutive 
business days, before determining that the Company has demonstrated an 
ability to maintain long-term compliance. In determining whether to 
require a Company to meet the [minimum $1.00 bid price standard] 
applicable Price-based-requirement beyond ten business days, Staff 
[will] may consider all relevant facts and circumstances, including 
without limitation[the following four factors]:
    (i) the margin of compliance (the amount by which a Company exceeds 
the [bid price is above the $1.00 minimum standard] applicable Price-
based Requirement);
    (ii) the trading volume (a lack of trading volume may indicate a 
lack of bona fide market interest in the security at the posted bid 
price);
    (iii) the Market Maker montage (the number of Market Makers quoting 
at or above $1.00 or the minimum price necessary to satisfy another 
Price-based Requirement; and the size of their quotes); and
    (iv) the trend of the stock price (is it up or down).
* * * * *

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
    The purpose of this proposed rule change is to increase 
transparency of the fact that NASDAQ Staff (``Staff'') may consider 
periods longer than ten days when evaluating whether a company has 
regained compliance with the minimum Market Value of Listed Securities 
(``MVLS'') and Market Value of Publicly-Held Shares (``MVPHS'') 
requirements, while also generally limiting such review to twenty days. 
Currently, NASDAQ Rules provide that compliance with the MVLS and MVPHS 
requirements ``can be achieved by meeting the applicable standard for a 
minimum of 10 consecutive business days.'' (emphasis added). As such,

[[Page 61410]]

while a company cannot regain compliance in a period less than ten 
days, the rule does not require Staff to limit its review for 
compliance with the MVLS and MVPHS requirements to exactly ten days. 
Further, Staff's broad discretionary authority under Rule 5101 supports 
Staff's consideration of a longer period when necessary.\3\
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    \3\ Rule 5101 provides NASDAQ with broad discretionary authority 
over the initial and continued listing of securities, and allows the 
application of additional or more stringent criteria for the 
continued listing of particular securities based on any event, 
condition, or circumstance that exists or occurs, even though the 
securities meet all enumerated criteria for initial or continued 
listing on NASDAQ.
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    By contrast, Rule 5810(c)(3)(F) explicitly describes Staff's 
discretion to extend the compliance period for a bid price deficiency 
beyond ten days (but generally not more than 20 days) and identifies 
factors for Staff to consider in making a decision to do so.\4\ In the 
ten years since adopting these factors,\5\ Staff has found them useful 
in determining whether to extend the bid price compliance period beyond 
ten days and thus typically uses these same factors, and, generally, 
the 20 day limit, when evaluating compliance with the MVLS and MVPHS 
requirements. The proposed change to Rule 5810(c)(3)(F) would describe 
this practice and thereby provide transparency to the manner in which 
Staff applies its existing discretion.
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    \4\ These factors are: (i) The margin of compliance; (ii) the 
trading volume; (iii) the market maker montage; and (iv) the trend 
of the stock price.
    \5\ Current Rule 5810(c)(3)(F) was originally adopted in 2003 as 
Rule 4310(c)(8)(E). Exchange Act Release No. 47181 (January 14, 
2003), 68 FR 3074 (January 22, 2003).
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \6\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \7\ in particular, in that it is designed to promote 
just and equitable principles of trade, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general to protect investors and the public interest. 
The proposed rule change will add greater transparency to the rule 
administration process by permitting issuers to better understand how 
NASDAQ evaluates compliance with the MVLS and MVPHS listing rules. At 
the same time, it describes NASDAQ Staff discretion to apply a higher 
standard in determining which companies are suitable for continued 
listing on the exchange, thus protecting investors.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. In this regard, NASDAQ notes 
that the competition among exchanges for listings is robust and 
vigorous, and the proposed rule change is not intended, nor is it 
expected, to reduce or diminish such competition. The rule brings added 
transparency to NASDAQ's vigilant enforcement of the Listing Rules, 
which already allow NASDAQ Staff to use discretion to apply more 
stringent listing standards. However, it does not allow the Staff any 
discretion to apply diminished listing standards in order to attract or 
retain listing business. The proposed rule change offers NASDAQ no 
advantages over its competitors beyond those created by enhancing the 
Exchange's regulatory effectiveness.

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

    No written comments were either solicited or 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, it has become 
effective pursuant to Section 19(b)(3)(A)(ii) of the Act \8\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\9\ The proposed rule 
change will add greater transparency by clarifying how NASDAQ applies 
its existing authority to evaluate compliance with the MVLS and MVPHS 
listing rules for periods longer than ten consecutive business days. As 
such, given that the proposed change merely describes, and does not 
modify, NASDAQ's authority to determine compliance with the MVLS and 
MVPHS requirements, it does not significantly affect the protection of 
investors or the public interest and does not impose any significant 
burden on competition.
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    \8\ 15 U.S.C. 78s(b)(3)(a)(ii).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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 Exchange has satisfied this requirement.
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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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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 email to rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2013-128 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-2013-128. 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 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 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for

[[Page 61411]]

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-NASDAQ-2013-128 and should 
be submitted on or before October 24, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24156 Filed 10-2-13; 8:45 am]
BILLING CODE 8011-01-P
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